13D Weekly Report - Jan 29, 2024 to Feb 2, 2024
$B, $MINM, $CCO, $PBI, $SCOR, $PRKA, $GDDY, $ASRV, $OPTT, $GIL
Table of Contents
Irenic Capital nominated Board candidate to Barnes Group (B)
David E. Lazar announced ownership interest in Minim, Inc (MINM)
Legion Partners reaches agreement with Clear Channel Outdoor Holdings (CCO)
Pitney Bowes (PBI) Announces Continued Refreshment of its Board of Directors
Starboard Voices Concerns about GoDaddy's (GDDY) Performance
Driver Management delivered a letter to the shareholders of AmeriServ Financial (ASRV)
INITIATED
Irenic Capital nominated Board candidate to Barnes Group (B)
Key Summary: On January 29, 2024, Irenic Capital (5.1%) nominated director candidatesMarket Cap: $1.6 billion | Barnes Group Inc. provides engineered products, industrial technologies, and solutions in the United States and internationally.
On January 29, 2024, Irenic Capital (5.1%) nominated two candidates for election to the Board at the 2024 AGM. Source
David E. Lazar announced ownership interest in Minim, Inc (MINM)
Key Summary: David Lazar acquires 2M Series A Pref. Stock, with conversion, warrants, and plans for shareholder valueMarket Cap: $7 million | Minim, Inc., together with its subsidiaries, designs, manufactures, markets, sells, and supports Internet access and other communications-related products in North America and internationally.
On January 30, 2024, David E. Lazar has acquired 2,000,000 shares of Series A Convertible Preferred Stock. Each Series A Preferred Stock is convertible into 1.4 shares of Common Stock. Additionally, Mr. Lazar received warrants to purchase up to 2,800,000 shares of Common Stock at $1.00 per share, subject to adjustment. The conversion and exercise of these securities into Common Stock require stockholder approval. Mr. Lazar expressed enthusiasm about his investment and a willingness to explore strategic options to enhance shareholder value in collaboration with the Board of Directors and management. Source
Past
Jeremy P. Hitchcock (17.9%), a non-employee Director, expressed concerns about the company's performance and corporate governance from October 2019. In response, a special Board meeting on January 16, 2020, led to corporate governance changes, including the retirement of Frank B. Manning as CEO and the appointment of Joseph L. Wytanis as CEO, Jacquelyn Barry Hamilton as acting CFO, and Jeremy Hitchcock as Chairman of the Board.
On September 26, 2020, the company ("Zoom, Inc") entered into an Exclusivity Agreement with Minim Inc. (“Minim”) regarding a possible business combination. Mr. Hitchcock (37%) serves as Executive Chairman of Minim, and members of the Group collectively hold approximately 43% of the voting shares of Minim, on a fully diluted basis. On November 12, 2020, the company announced the signing of a definitive merger agreement pursuant to which Zoom will acquire Minim Inc. Under the terms of the agreement, the two companies will merge in a non-cash, stock transaction valuing Minim at $30 million. On December 4, 2020, the company completed its merger with Minim Inc.
On August 20, 2021, a Settlement Agreement was reached between the company, Mr. Hitchcock, and stockholder Eric Griffith. As per the agreement, for either four years or until Mr. Hitchcock's beneficial ownership drops below 35% of total shares, the company must maintain a majority of independent directors on its board, and Hitchcock and affiliates cannot acquire more company stock for the initial 18 months after the agreement's execution.
BOARD SEAT/ AGM RESULTS
Legion Partners reaches agreement with Clear Channel Outdoor Holdings (CCO)
Key Summary: On May 16, 2023, Legion Partners (5.1%) urged board for broader strategic review and expressed concern over the pace. On Jan 31, 2024, they entered into a cooperation agreement and added Ted White (co-founder of Legion Partners) to the board.Market Cap: $845 million | Clear Channel Outdoor Holdings, Inc. operates as an out-of-home advertising company in the United States, Europe, and internationally.
Background
On May 16, 2023, Legion Partners (5.1%) delivered a letter to the board expressing its belief that the current market price of the shares does not reflect the company’s intrinsic value. As detailed in the letter, in the Legion Partners' view, the company’s strategic review of non-core assets in Europe is an appropriate and necessary strategic initiative but may not sufficiently improve the market price of the shares or the capital structure. In addition, Legion Partners noted its concern with the scope and pace of the current strategic review process and belief that the Board needed to consider, with greater urgency, a broader strategic review process, including potential divestitures of other non-core assets and select U.S. assets, or a sale of the entire company. Legion Partners stated that it may seek to add industry, capital markets and governance expertise to the board.
Update
On January 31, 2024, Legion Partners (5.4%) entered into a cooperation agreement with the company and pursuant to it, the company increased the size of the Board to 10 and appointed Ted White (co-founder, Chief Compliance Officer and a Managing Director of Legion Partners Asset Management ) as a member of the Board.
Pitney Bowes (PBI) Announces Continued Refreshment of its Board of Directors
Key Summary: Hestia Capital, holding 7.2%, aimed to overhaul Pitney Bowes' board due to value destruction; eventually, their director nominees won seats, and on Jan 31, 2024, they reached a cooperation agreement, expanding the board and appointing new directors.Market Cap: $731 million | Pitney Bowes Inc., a shipping and mailing company, provides technology, logistics, and financial services to small and medium-sized businesses, large enterprises, retailers, and government clients in the United States, Canada, and internationally.
Background
On December 12, 2022, Hestia Capital (7.2%) issued a press release announcing its intent to overhaul the Board, following years of value destruction under the Board’s Chairman, Michael Roth, and the company’s CEO, Marc B. Lautenbach, by nominating a majority slate of director candidates to the Board, including a highly-qualified proposed interim CEO.
On January 23, 2023, Hestia Capital issued a presentation titled “Pitney Bowes’ Failings During the Roth-Lautenbach Era” that details a sampling of current leadership’s failings that have led to significant stockholder value destruction. It has nominated seven candidates for election to the Board at the 2023 AGM.
On February 24, 2023, Kurtis J. Wolf, Managing Member of Hestia Capital Management, LLC, took part in an interview with Yahoo! Finance. Kindly click here to read the transcript
On February 27, 2023, Hestia Capital filed proxy materials seeking support for its nominees.
On March 6, 2023, Hestia Capital withdrew its nomination of Messrs. Grassi and McBride as nominees for election at the annual meeting. With the withdrawal, Hestia Capital intends to solicit proxies to elect the remaining five nominees to the Board at the annual meeting. Source
On March 15, 2023, Hestia Capital filed proxy materials seeking support for its nominees.
On March 16, 2023, Hestia launched a website to communicate with stockholders of the Company regarding the Annual Meeting. The website address is www.TransformPitneyBowes.com. Source
On April 4, 2023, Hestia's Interim CEO candidate, Lance Rosenzweig sent a letter to the shareholders that includes turnaround strategy designed to lift share price above $15 in coming years
On April 6, 2023, Hestia Capital (8.5%) issued an open letter to employees of the company expressing its enthusiasm for bringing stability to the company and all its stakeholders. It stated that it nominees are committed to: Increasing investment in, and improving profitability at, SendTech and Presort; cutting excessive corporate costs; improving profitability of, and reviewing strategic alternatives for, Global Ecommerce; and establishing a capital allocation policy that reduces debt and retains the dividend.
On April 11, 2023, Hestia issued an Investor Presentation titled “Transform Pitney Bowes” reiterating its detailed six-pillar plan for the company that targets a $15+ stock price in the coming years.
On April 19, 2023, Hestia issued a Rebuttal Investor Presentation titled “Facts that Reinforce the Urgent Case for Change at Pitney Bowes”
On April 27, 2023, Hestia announced that ISS recommended shareholders support meaningful boardroom change by voting for Milena Alberti-Perez, Todd Everett, Katie May and Kurt Wolf at the Company’s 2023 AGM. Source
On May 1, 2023, Hestia announced that Glass Lewis recommended shareholders support meaningful boardroom change by voting for Milena Alberti-Perez, Todd Everett, Katie May and Kurt Wolf at the Company’s 2023 AGM. Source
On May 2, 2023, Hestia announced that Egan-Jones recommended shareholders support meaningful boardroom change by voting for all five nominees of Hestia Capital at the Company’s 2023 AGM. Source
According to the preliminary voting results announced on May 9, 2023, Hestia Capital’s director nominees, Ms. Alberti-Perez, Mr. Everett, Ms. May and Mr. Wolf, were elected to the Company’s nine-member Board of Directors. Source
Update
On January 31, 2024, Hestia Capital entered into a cooperation agreement with the company and pursuant to it, the company increased the size of the Board to ten and appointed new directors (William “Bill” Simon and Jill Sutton) to the Board.
ONGOING
180 Degree Capital Proposes Board Declassification and Nominates Matthew F. McLaughlin for 2024 Annual Meeting at comScore (SCOR)
Key Summary: On March 6, 2023, 180 Degree Capital criticized the company's governance, calling for changes. On April 20, it raised concerns about dividend payments. On December 11, it proposed annual director elections starting in 2025. On January 25, 2024, they nominated Matthew F. McLaughlin for the 2024 Annual Meeting.Market Cap: $1.8 billion | comScore is a cross-platform measurement company that measures audiences, brands and consumer behavior everywhere. comScore completed its merger with Rentrak Corporation in January 2016, to create the new model for a dynamic, cross-platform world.
Background
On March 6, 2023, 180 Degree Capital Corp (6%) issued a letter to shareholders and employees of the company to express its disappointment in the company's director compensation policy and called on the Board to make a number of corporate governance changes, including, but not limited to, augmenting the compensation policy for those Board members appointed by preferred stockholders, reducing the size of the Board, replacing over-tenured directors, eliminating the Board's classified structure, and providing additional clarity on the Special Dividend Process. As part of these changes, 180 Degree Capital Corp recommended either the immediate resignation of Brent Rosenthal from the Board or, at least, the removal of his position as Lead Independent Director on the Board.
On April 20, 2023, 180 Degree Capital Corp issued an open letter (refer "Exhibit 2")to the board to express its concerns with certain efforts by the company to pay dividends on the company's Series B Preferred Stock through the issuance of additional Series B Preferred Stock. 180 Degree Capital Corp also requests further reductions in compensation paid to the Board of Directors, the appointment of Jon Carpenter to the, the removal of Brent Rosenthal as Lead Independent Director and that Cerberus, Charter and Liberty Media/Qurate take tangible steps to reverse the destruction in value of common stock since their involvement began in March 2021.
On May 10, 2023, 180 Degree Capital Corp (6%) issued a press release containing an open letter (refer "Exhibit 3") to the preferred stockholders of the company, Cerberus, Charter and Liberty Media/Qurate. In addition to reiterating concerns detailed in the April Press Release, 180 Degree Capital Corp requested Cerberus, Charter and Liberty Media/Qurate take tangible steps to reverse the destruction in value of company’s common stock since their involvement began in March 2021. 180 Degree Capital Corp also continues to request further reductions in compensation paid to the board, the appointment of Jon Carpenter to the board, the removal of Brent Rosenthal as Lead Independent Director.
On November 29, 2023, 180 Degree Capital Corp stated that it intends to nominate at least two industry experts for the 2024 Annual Meeting, supporting Ms. Leslie Gillin's continued service on the Board, and nominating Mr. McLaughlin and Mr. Rendino for the other two director seats. Source
On December 11, 2023, 180 Degree Capital submitted a proposal, requesting that the Board take all necessary steps to declassify the Board so that commencing at the 2025 annual meeting of stockholders, directors are elected on an annual basis. Source
Update
On January 25, 2024, 180 Degree Capital sent a formal letter to the company stating its intent to propose that the Board of Directors be declassified for annual elections starting in 2025. They also nominated Matthew F. McLaughlin for the Board at the fiscal year 2024 Annual Meeting. Source
On February 1, 2024, 180 Degree Capital issued a press release which discussed its nomination of Matthew F. McLaughlin for election to the Board at the Annual Meeting. Furthermore, 180 Degree Capital reiterated its belief that the Board requires significant improvements in corporate governance and fresh perspectives from individuals with deep industry experience in the company's markets.
Past
On September 28, 2017, Starboard (7.2%) entered into an agreement with the company, pursuant to which, the company appointed Wesley Nichols, Paul Reilly and Bryan Wiener to the Board and agreed to appoint an additional independent director recommended by Starboard. On October 16, 2017, Michelle McKenna-Doyle was appointed to the Board as the additional independent appointee. Source
On January 16, 2018, the company entered into an agreement with Starboard under which the company:
issues $150 million in convertible notes to Starboard in exchange for $85 million in cash and $65 million in outstanding common stock, and grants Starboard an option to acquire up to an additional $50 million in convertible notes
intends to conduct convertible notes rights offering of up to $150 million to all stockholders with $100 million backstopped by Starboard
Focused Compounding Calls for Special Shareholder Meeting and Proposes Significant Bylaw Revisions at Parks! America, Inc (PRKA)
Key Summary: In January 2020, Focused Compounding disclosed a 17.01% stake and requested discussions. In December 2023, they demanded a special shareholder meeting.Market Cap: $31 million | Parks! America, Inc., through its subsidiaries, engages in acquiring, developing, and operating local and regional theme parks and attractions in the United States.
Focused Compounding Fund
Background
On January 28, 2020, Focused Compounding Fund disclosed 17.01% and sent a letter to the Board seeking discussions with the management, Board and representatives of the company.
On December 22, 2023, Focused Compounding (38.5%) demanded a special shareholder meeting from the Company. The meeting will address five proposals: (i) Repealing certain provisions of the Bylaws to restore them to their 2012 form if amended before the proxy solicitation is complete, (ii) Removing all seven members of the Board as per Section 4.9(a) of the Bylaws, (iii) Amending Section 4.7 of the Bylaws regarding vacancies on the Board, (iv) Electing new Board members, Andrew Kuhn, Geoff Gannon, and James Ford, and (v) Authorizing Focused Compounding Fund to adjourn the meeting if needed for the proposed changes. Source
On January 4, 2024, Focused Compounding filed proxy materials seeking support for its nominees.
On January 18, 2024, Focused Compounding sent a letter to the Board insisting on holding a special election, criticizing the Board's legal maneuvers and reliance on Nevada law to maintain their positions. It accused the Board of avoiding direct shareholder communication and instead using legal strategies to remain in power. The letter emphasized the importance of democratic engagement and challenged the Board to run a genuine campaign to win over shareholders. It criticized the Board's lack of honor and integrity, questioning their reliance on technicalities rather than shareholder interests.
On January 26, 2024, Focused Compounding filed proxy materials seeking support for its proposals.
Update
On January 29, 2024, Focused Compounding announced the nomination of Jacob McDonough to their board slate for the company. Source
Past
Nicholas A. Parks
On January 30, 2019, Nicholas A. Parks (12.06%) entered into discussions with a private equity firm to discuss strategic options involving the company’s stock. Mr. Parks stated that he wishes to continue such discussions in hopes of the following:
To purchase additional shares of the outstanding stock.
To have an active role in company decisions in order to maximize shareholder value.
On September 23, 2019, Nicholas A. Parks (6.28%) stated that he believes the company should,
Acquire a scalable business in order to grow the company’s revenue over time. If unable to identify appropriate acquisitions, to return capital to shareholders via a special dividend or by purchasing its own stock
On January 28, 2020, Nicholas A. Parks entered into a Stock Purchase Agreement with Focused Compounding Fund, LP for the sale of 4,110,000 shares of Common Stock. As a result of the closing of the transactions, Nicholas A. Parks beneficially own approximately 2.00% of the outstanding Common Stock. Source
Marlton Wayne
On December 17, 2018, Marlton Wayne (5.04%) sent a letter to the Board noting its concerns that the company’s public equity trades below its intrinsic value and offering potential solutions to substantially increase stockholder value. In the letter, Marlton outlined a proposed change in capital allocation and corporate governance that they believe is needed to put the company on a path that will reward stockholders:
Return of capital of $1,500,000 through either a Special Dividend of $0.0201 per share representing 13.8% of the market capitalization based on the current share price of $0.1451 or a Modified Dutch Auction Tender.
Forming a Special Committee of Independent Board Members to explore all strategic alternatives to maximize stockholder value, including the disbursement of a Special Dividend, Modified Dutch Auction Tender and/or the sale of the company.
On January 14, 2019, Marlton Wayne (5.04%) sent a letter reiterating its concerns that the company’s current capital allocation strategy and corporate governance are causing the company’s equity to trade at a significant discount. to the Board.
On July 22, 2019, Marlton Wayne (5.04%) delivered a letter to the company demanding the inspection of certain of the company’s books and records
Starboard Voices Concerns about GoDaddy's (GDDY) Performance
Key Summary: Starboard (7.8%) expressed disappointment in the company's performance on Sep 12, 2023, suggesting expense reduction and aiming for 40% growth + profitability by end 2024; On Jan 31, 2024, Starboard (6%) urged targeting 40% growth + profitability for FY2025, with potential for free cash flow/share to reach $9.00 (FY2024) and $14.00 (FY2026).Market Cap: $15 billion| GoDaddy Inc. engages in the design and development of cloud-based products in the United States and internationally.
Background
On September 12, 2023, Starboard (7.8%) delivered a letter to the company expressing disappointment in the company's operational, financial, and stock price performance over the past 18 months. Starboard believes that the company has the potential to improve its growth and profitability metrics by reducing expenses, especially in Technology & Development.
Valuation insight
If GoDaddy achieves 7% revenue growth and 28% Adjusted EBITDA margins in Q4 2023, it can aim for a 40% growth + profitability metric by end of 2024. Regardless of 2024's revenue growth, cost-cutting measures are advised. Generating 7-8% revenue growth in 2024 with 32-33% Adjusted EBITDA margins could mean over $1.5 billion in Adjusted EBITDA. GoDaddy's undervaluation at 11x 2023E FCF could significantly improve with these targets, reaching a pro forma multiple of about 7x, closer to peers.
On October 17, 2023. Starboard delivered a presentation at the 2023 Active-Passive Investor Summit to highlight value creation opportunities at the company. It reiterated its belief that the company can reach growth and profitability of 40% by Q4'24E through a combination of stable growth and meaningful margin expansion.
Update
On January 31, 2024, Starboard (6%) delivered a letter to the company stating that the company's valuation still lags behind peers and historical trading multiples. At the 2024 Investor Day, it is suggested that GoDaddy should aim for at least 40% growth plus profitability for FY2025, aligning with industry standards.
Valuation insight
Starboard stated that, "With successful execution and share repurchases, the company could achieve over $9.00 of free cash flow per share in FY2024, growing to approximately $14.00 per share by FY2026."
Driver Management delivered a letter to the shareholders of AmeriServ Financial (ASRV)
Key Summary: In Jan 2023, Driver Management nominated directors, faced legal disputes with the company, and in May 2023, shareholders elected the company's candidates. In Sep 2023, Driver Management requested a special litigation committee and sought information regarding company bylaws. In Dec 2023, they raised concerns about insufficient legal proceedings disclosure. In Jan 2024, they highlighted their dispute with AmeriServ Financial and calls for shareholder inquiry into the company's actions.Market Cap: $51 million | AmeriServ Financial, Inc. operates as the bank holding company for AmeriServ Financial Bank that provides various consumer, mortgage, and commercial financial products.
Background
On January 17, 2023, Driver Management (8.6%) delivered a letter to the company nominating a slate of director candidates: J. Abbott R. Cooper, Julius D. Rudolph, and Mr. Simmons, for election to the Board at the 2023 AGM. Source
On January 20, 2023, Driver Management delivered a letter to the CEO of the company stating that it is exercising its right to inspect certain books and records and demands to inspect certain documents.
On March 15, 2023, the company disclosed that Driver management's notice of director candidate nominations is invalid. Source
On March 16, 2023, Driver Management sent a letter to the counsel of the company regarding the unlawful attempt by the company to prevent Driver's nominees from serving as candidates for election to the board.
On March 17, 2023, the Company filed a complaint against Driver Management and the Driver Nominees in the Court seeking declaratory judgment that (i) the Company properly rejected Driver Opportunity’s notice of intent to nominate director candidates at the annual meeting, which was submitted on January 17, 2023, and (ii) because of such rejection, Driver has no right to nominate candidates for election to the Board and the defendants have no right to seek election to the board at the annual meeting. Driver reiterates its belief that there is no justification for the conclusions reached by the Company and is committed to defending itself against what it views as, an attempt to prevent it from exercising its rights as a shareholder. Source
On March 29, 2023, Driver Management filed a complaint in the Court against the Company and the Company’s board of directors. Source
On May 31, 2023, the company announced that shareholders voted to elect the company’s three director candidates. Source
On September 7, 2023, Driver Management delivered a letter to the Chairman of the board stating that it intends to nominate J. Abbott R. Cooper for election to the board at the company's 2024 AGM.
On September 12, 2023, Driver Management delivered a letter to the Company’s counsel regarding a demand made on August 1, 2023, for the company to appoint a special litigation committee (SLC) to investigate alleged breaches of fiduciary duties by current and former members of the board. The demand relates to ongoing litigation preventing shareholders from voting for certain director candidates. Driver Management seeks confirmation of the SLC's appointment, the estimated investigation completion date, and expresses concern about ongoing corporate waste.
On September 19, 2023, Driver Management sent a letter to the Chairman of the Board, seeking confirmation that its request to inspect specific company records has been denied, as indicated in a previous Rejection Letter from the company.
On September 25, 2023, Driver Management sent a letter to the Chairman of the Board, expressing frustration with the lack of response to its requests for information regarding company bylaws and director nominations. It highlights the importance of this information for its upcoming director nominations and question the Board's transparency and accountability in light of ongoing legal costs and underperformance.
On December 12, 2023, Driver Management sent a letter to the Chairman of the Board highlighting concerns about insufficient disclosure of material legal proceedings in the company's recent Form 10-Q filings.
Update
On January 23, 2024, Jack Babich, former SVP & Chief HR Officer of AmeriServ Financial, contacted Abbott Cooper via LinkedIn. Babich disclosed concerns about his forced retirement due to his objection to how the company handled illegal misconduct by another senior officer. Driver Management Company LLC, represented by Cooper, demanded access to AmeriServ's records to verify Babich's claims but faced refusal and litigation from AmeriServ. In response, AmeriServ filed a complaint against Babich, alleging a violation of confidentiality provisions in his retirement agreement. On January 26, 2024, AmeriServ filed a claim against Cooper for "tortious interference." Driver views AmeriServ's actions as an attempt to distract shareholders and questions the company's financial decisions and motives behind its legal actions. They urge shareholders to seek answers from AmeriServ's board regarding these matters. Source
On February 1, 2024, Driver Management sent a letter to the shareholders criticizing the board's priorities and performance. They've nominated three directors for the 2024 annual meeting and proposed changes to improve corporate governance. AmeriServ's financial losses, litigation expenses, and focus on legal matters raise concerns about its board's effectiveness, according to Driver Opportunity Partners.
Paragon Technologies Challenges Ocean Power Technologies' (OPTT) Management and Strategy, Urges Shareholder Action
Key Summary: Paragon Technologies (3.9%) has raised concerns about Ocean Technologies' financials and initiated legal action following the company's declaration of their nomination letter as invalid. Despite Paragon continuing to seek votes for its nominees, the company has urged shareholders to ignore the nomination letter, stating that such votes will not be counted.Market Cap: $18 million | Ocean Power Technologies, Inc. develops and commercializes proprietary systems that generate electricity by harnessing the renewable energy of ocean waves in North America, South America, Europe, and Asia..
Background
On July 7, 2023, Paragon Technologies (3.9%) provided a letter to the stockholders with respect to its views regarding the Company’s financial condition and the performance of the board. It expressed its concerns about the company's ongoing cash burn and lack of a coherent plan for profitability. It highlighted the company's history of net losses since its inception in 1994, declining share price, failed commercialization efforts, and high operating expenses. Paragon intends to provide a slate of director nominees with the aim of reducing losses, addressing the cash burn, and implementing a go-to-market strategy to create profitable operations at the company.
On July 14, 2023, Paragon Technologies (4%) expressed its concerns about alleged wrongdoing and mismanagement by the board and management. It has requested access to the company's records and will pursue litigation if the board does not comply. Furthermore, it stated that it may make binding or non-binding stockholder proposals or may nominate one or more individuals as nominees for election to the board. Source
On July 17, 2023, Paragon sent an Inspection Demand to the company, requesting access to the company's books and records for the purpose of investigating apparent wrongdoing and/or mismanagement by the Board and/or management. Source
On July 27, 2023, Paragon filed a complaint in the Delaware Court of Chancery to enforce for inspecting Company's books and records.
On August 2, 2023, Paragon Technologies, Inc. issued a press release regarding the company, demanding clear explanations from the board on how the company will fund operations beyond July 31, 2024.
On August 11, 2023, Paragon Technologies (4%) calls on the company to REFRAIN from ALL future equity share sales that will dilute shareholders and immediately announce a significant cost cutting plan to demonstrate the Board’s commitment to protecting shareholder value. Source
On August 25, 2023, Paragon demands corporate governance adherence and shareholder value enhancement, urging to:
Reinstate the Company’s bylaws to their original form prior to Paragon’s calling out the Company’s worsening financial performance
Terminate the Company’s poison pill and grant Paragon its limited waiver
Allow Paragon, as is Paragon’s right as a shareholder, to examine the Company’s books and records
Reconstitute its Board to appoint Paragon’s directors to the Company’s Board.
On August 25, 2023, Paragon Technologies notified its intent to nominate five directors for the company's board at the 2023 annual meeting. On August 29, 2023, Paragon Technologies submitted a second request for an exemption related to the "Section 382 Tax Benefits Preservation Plan" adopted by the company's board on June 29, 2023, limiting ownership to 19.9% of the company's outstanding shares. The company's board has not responded to these exemption requests. Source
On October 9, 2023, Paragon Technologies stated that it has initiated legal action against the board and CEO for alleged breach of fiduciary duties. They sought to appoint three directors to the board and requested an exemption from poison pill provision. Paragon criticized the management for self-serving actions and misleading statements. Source
On October 20, 2023, the Delaware Court of Chancery ruled in favor of Paragon Technologies (OTC PINK:PGNT), ordering Ocean Power Technologies (OPT) to provide Paragon with certain books and records for an investigation. Paragon had made a books and records demand on July 17, 2023, which OPT initially refused, leading to litigation. During the trial, Paragon raised concerns about OPT's financial losses, expenses, and director/officer compensation, as well as actions by OPT's board seemingly aimed at interfering with Paragon's efforts to elect new directors. The Court found that Paragon had a credible basis to suspect wrongdoing and rejected OPT's claim of an improper motive for the demand. Sham Gad, Chairman of Paragon, expressed satisfaction with the decision and urged OPT to work constructively with shareholders. Source
On October 24, 2023, Paragon Technologies sent a letter to the independent directors of the company, raising concerns about recent decisions made by the board. The letter questioned whether the actions taken by the directors are in the best interest of shareholders and suggests that these actions may be aimed at preventing certain director candidates from being presented to shareholders. Paragon highlights several actions, including the adoption of new by-laws, the implementation of a poison pill, engagement of multiple law firms and a proxy defence firm, and the refusal to provide access to company records. Paragon calls for transparency and questions the board's spending decisions in light of OPT's financial situation.
On November 13, 2023, Paragon Technologies notified the Company that Robert J. Tannor notified them of his withdrawal as a nominee, due to health reasons that he is still recovering from, for election to the Company’s board of directors at the Company’s 2023 AGM. Paragon Technologies intends to proceed to nominate the four other candidates previously notified to the Company. Source
On November 17, 2023, a Delaware Chancery Court ruling and evidence suggest a gap between OPT's public statements and financial reality. Paragon calls on OPT to implement a substantial cost-cutting plan and cease issuing equity to safeguard shareholder interests. Source
On November 28, 2023, Paragon Technologies filed proxy materials seeking support for its nominees.
On November 30, 2023, the Delaware Court of Chancery denied Paragon's request for injunctive relief filed on October 9, 2023. As a result, Paragon's nominations and exemption request remain rejected, and they cannot nominate their candidates for the OPT Board at the 2023 Annual Meeting. Source
On December 4, 2023, Paragon Technologies stated that it intends to move forward with its election contest at the Company’s 2023 annual meeting of shareholders (scheduled by the Company to be held on January 31, 2024) and intends to nominate its four director candidates at the annual meeting. Source
On December 11, 2023, Paragon Technologies reiterated its concerns and urges shareholders to vote for its nominees. Source
On December 18, 2023, Paragon Technologies reiterated its concerns and urges shareholders to vote for its nominees. Source
On December 21, 2023, the company announced shareholders may receive materials from Paragon Technologies but advised discarding them, as votes for Paragon's nominees on the blue proxy card will not be counted
On December 29, 2023, Paragon Technologies reiterated its concerns and urges shareholders to vote for its nominees. Source
On January 4, 2024, Paragon Technologies, Inc. reminded shareholders to DISREGARD any WHITE proxy from OPT and issued a presentation on how to vote the BLUE proxy card.
Valuation insight
Paragon believes OPT could be worth +$3 a share, or 10x return, with an improved operating cost structure, disciplined capital allocation, and a realigned focus on potential growth of Marine Advanced Robotics.
On January 15, 2024, Paragon Technologies issued a presentation reiterating its concerns and reminded shareholders to vote for its nominees.
On January 18, 2024, Paragon Technologies (4.8%) challenged OPT's CEO, Phillip Stratmann, over his conflicting statements regarding OPT's profitability in 2025. Stratmann had claimed OPT would be profitable using current capital, but Paragon pointed out discrepancies between this and OPT's EBITDA breakeven projection, questioning the lack of a clear cost-cutting strategy. Paragon criticized Stratmann's management, noting OPT's ceased R&D disclosures since he became CEO and escalating expenses. They accused OPT's Board of self-serving actions and misleading shareholders, failing to commercialize products or present a viable strategy. Paragon urged shareholders to vote using their BLUE proxy card for change and transparency in OPT's management and strategy. Source
On January 22, 2024, Paragon Technologies, Inc. issued a statement and a presentation relating to Ocean Power Technologies, Inc
Update
On February 1, 2024, Paragon Technologies criticized OPT's annual meeting postponement due to a lack of quorum. Paragon questions the board's focus on entrenchment over financial responsibility and transparency. Source
Browning West to Run Slate of Eight Highly Qualified Director Candidates for Election at Gildan Activewear’s (GIL) Annual Meeting
Key Summary: Browning West (5%) is concerned about CEO's abrupt termination and board's choices. They demand CEO reinstatement and may call a Special Meeting for changes. On Jan 23, 2024, Browning West voiced concern over Board's actions, citing value destruction, entrenchment tactics, and delay of Special Meeting, vowing to improve governance. On Jan 31, 2024, Browning West decided to nominate eight qualified candidates for the BoardMarket Cap: $5.4 billion | Gildan Activewear Inc. manufactures and sells various apparel products in the United States, North America, Europe, Asia-Pacific, and Latin America.
Background
On January 8, 2024, Browning West (5%) stated its concerns about the abrupt termination of CEO Glenn Chamandy and the appointment of Vince Tyra as his replacement by the company's board. It issued public letters (Dec 14, 2023, Dec 20, 2023, Dec 29, 2023) expressing its concerns and demands, including reinstating Chamandy, removing the board chair, and appointing a shareholder representative. Further, it stated that if the board continues to ignore its feedback, shareholders plan to requisition a Special Meeting to vote on removing directors and appointing its five candidates, which would potentially lead to changes in leadership. Source
Valuation insight
Browning West, in its letter dated December 14, 2023, opined that under Mr. Chamandy’s leadership, Gildan’s share price was poised to be worth $60 to $80 USD over the next two years, which represents an approximately 80% to 140% increase from the current price, which assumes that Mr. Chamandy delivers $4 of earnings per share and the stock re-rates to its historical valuation range.
On January 9, 2024, Browning West (5%) delivered a letter to the company to requisition a Special Meeting of Shareholders, seeking shareholder support at the upcoming Special Meeting to, (i) Remove eight of the incumbent directors, (ii) Appoint eight highly qualified director candidates to the Board.
On January 23, 2024, Browning West (5%) highlighted its concern regarding the Board's actions. It mentioned the requisition of a Special Meeting to vote on the reconstitution of the Board due to perceived value destruction and questionable leadership decisions. The Board was accused of resorting to entrenchment maneuvers, including seeking to invalidate Browning West's requisition based on antitrust allegations. The letter also criticized the Board's conduct, misinformation campaigns, and attempts to delay the Special Meeting. Browning West expressed determination to protect its investment and improve corporate governance at the company. Source
Update
On January 29, 2024, the Company called an Annual and Special Meeting of Shareholders for May 28, 2024, in response to a requisition by Browning West seeking the removal and replacement of eight directors. In response, Browning West expressed disappointment in the Board's delay in setting the Meeting date and its legal actions. They emphasized that the delay seemed to protect an apparently unqualified CEO and criticized the distraction caused by the legal action.
On January 31, 2024, Browning West decided to nominate eight qualified candidates for the Board at the AGM rather than through a Special Meeting due to the Board's actions. They believe this approach simplifies the voting process, eliminates the need for legal tactics, and gives shareholders a chance to reject the CEO Vincent Tyra's record of value destruction.