Activism, Featured, Latest Research

Activism Update – June 17

Published: June 17, 2024

Activism Snapshot

WisdomTree (WT) won their proxy contest with ETFS Capital according to their press release on the 12th. They have not yet released the 8-K with actual voting tallies, so we’ll have to wait to see just how much support WT ended up getting. Both Glass Lewis and ISS had supported the board’s nominees. ETFS Capital had tired to make the point that governance and results would be even worse had they not already pushed WT to make improvements.

AmeriServ Financial (ASRV) entered into a cooperation and settlement agreement with Driver Opportunity Partners. AmeriServ Financial is repurchasing Drivier’s shares for an aggregate of $1,494,647 while Driver has agreed to drop its lawsuit for a settlement amount equal to $1,762,659. Driver also is dropping its plans to nominate 3 directors to the board.

Forte Biosciences (FBRX) entered into a Standstill and Voting agreement with Camac Capital. Camac will get board seats and the board will create a new committee focused on assessing strategic alternatives.

Medallion (MFIN) won its fight with ZimCal as ~77% of shareholders supported the board’s two nominees Robert Meyer and David Rubnick. Shareholders also supported Say-On-Pay with approximately 74% voting FOR.

Braemer Hotels (BHR) and Blackwells continue to trade blows. BHR just released the proxy filing for the meeting and has set the date for July 30th. So we have over a month of additional back and forth to come.

Enhabit (EHAB) and Masimo (MASI) also released their contested proxies and both selected July 25th for their shareholder meeting dates. EHAB is down almost -30% in the past year and MASI is down over -15%, so unless some dramatic change occurs in the next 45 days, both will have uphill battles to convince shareholders that they’ve got the right plans and teams to turn the ship around. LL Flooring (LL) is in an even worse position with it now down more than 65% this year alone and 94% over the past three years.

Latest Activism and Governance research from Boardroom Alpha:

ACTIVISM UPDATE

LATEST 13-D FILINGS

FILED	TICKER	COMPANY	FILED BY	OWNERSHIP	1-Year TSR	SUMMARY	FILING
2024-06-14	IVZ	INVESCO LTD	Trian Fund Management	6.1%	-6.9%	Trian reduced its stake from ~7% to just over 6%.	2024-06-14 – SC 13D
2024-06-13	BOOM	DMC GLOBAL INC	STEEL CONNECT INC	9.8%	-18.4%	Made an acquistion offer at a 25% premium over the closing price of $13.20 per Share on May 30, 2024 and a 22% premium over the average 30-day closing price (ending May 30, 2024) of $13.47 per Share.	2024-06-13 – SC 13D
2024-06-13	HIBB	HIBBETT INC	Bronte Capital Management Pty Ltd.	5.1%	130.8%	Believes the proposed merger with JD Sports Fashion significantly undervalues HIBB and therefore the merger is not in the best interests of shareholders..	2024-06-13 – SC 13D

LATEST PROXY CONTEST FILINGS

TICKER	COMPANY	TSR 1/3yr	MEETING DATE	LATEST PROXY	SUMMARY	TARGET FILINGS	ACTIVIST FILINGS
BHR	BRAEMAR HOTELS & RESORTS INC	-24.5% -50.5%	Jul 30	2024-06-17 – DEFC14A	Nominating four directors: Michael Cricenti, Jennifer M. Hill, Betsy L. McCoy and Steven J. Pully Proposal to remove “overreaching” advance notice bylaw provision Proposal to urge the Board to amend the Bylaws to preclude any current or former employee, director, officer, or control person of the Corporation or Ashford (as defined in the Proxy Statement) and Ashford’s affiliates from serving as the Corporation’s chairman of the Board Proposal to require the Board to disclose all extraordinary transaction proposals made by stockholders, affiliates and third parties during the two most recently completed calendar years and the terms of those proposed transactions Proposal to require the Board to disclose all compensation paid by the Corporation to members of the Bennett family, The Dallas Express and employees, directors or agents of The Dallas Express, including Louis Darrouzet	BRAEMAR HOTELS & RESORTS INC Jun 17 – DEFC14A Jun 14 – DEFA14A Jun 13 – DEFA14A Jun 12 – DEFA14A Jun 11 – DEFA14A May 23 – DEFA14A May 22 – DEFA14A May 22 – DEFA14A May 21 – DEFA14A May 20 – DEFA14A	BLACKWELLS CAPITAL LLC Jun 14 – DFAN14A Jun 13 – DFAN14A Jun 12 – DFAN14A Jun 11 – DFAN14A Jun 10 – DFAN14A May 20 – DFAN14A May 17 – DFAN14A May 16 – DFAN14A May 16 – DFAN14A May 13 – DFAN14A
EHAB	ENHABIT INC	-29.1%	Jul 25	2024-06-11 – DEFC14A	AREX Capital owns 4.8% of the shares of Enhabit (EHAB) AREX Capital believes EHAB strategic review should have resulted in a sale of the company. AREX Capital believes EHAB board lacks “Health and Hospice” expertise AREX nominating 7 directors to the board: Megan Ambers, James T. Corcoran, Maxine Hochhauser, Mark W. Ohlendorf, Anna-Gene O’Neal, Dr. Gregory S. Sheff, Juan Vallarino.	ENHABIT INC Jun 12 – DEFA14A Jun 11 – DEFA14A Jun 10 – DEFC14A Jun 10 – DEFA14A May 23 – PREC14A May 23 – DEFA14A	AREX CAPITAL MANAGEMENT, LP Jun 11 – DFAN14A Jun 11 – DEFC14A Jun 10 – PRRN14A May 29 – DFAN14A May 28 – PREC14A May 09 – DFAN14A
LL	LL FLOORING HOLDINGS INC	-69.0% -93.6%	Jul 10	2024-05-31 – DEFC14A	Seeking to elect 4 directors: Thomas D. Sullivan, John Jason Delves and Jill Witter Recommending voting “WITHHOLD” for company nominees: Douglas T. Moore, Ashish Parmer and Nancy M. Taylor F9 group includes Mr. Sullivan who founded the company in 1994 and served as Chair through 1994 F9 previously made a bid to acquire the company for $5.76 per share — a 100% premium to the then 52-week low of $2.75	LL FLOORING HOLDINGS INC Jun 11 – DEFA14A Jun 11 – DEFA14A Jun 07 – DEFA14A Jun 05 – DEFA14A Jun 03 – DEFA14A Jun 03 – DEFA14A Jun 03 – DEFA14A May 31 – DEFA14A May 24 – DEFC14A May 20 – PREC14A	F9 INVESTMENTS LLC Jun 14 – DFAN14A Jun 13 – DFAN14A Jun 07 – DFAN14A Jun 03 – DFAN14A Jun 03 – DFAN14A May 31 – DFAN14A May 31 – DEFC14A May 28 – PRRN14A May 20 – PREC14A
MASI	MASIMO CORP	-15.2% -38.9%	Jul 25	2024-06-17 – DEFC14A	Politan Capital, owning ~9% of MASI, has nominated two directors to the board of Masimo Politan Capital previously won two board seats at last year’s shareholder meeting Politan has nominated William Jellison, former CFO of Stryker and Darlene Solomon, former CTO of Agilent Technologies Politan paints a picture (see their filings) of MASI being uncooperative and freezing their board members out Masimo (see their filings) refutes Politan’s claims	MASIMO CORP Jun 17 – DEFA14A Jun 17 – DEFC14A Jun 12 – DEFA14A May 31 – PREC14A May 31 – DEFA14A May 31 – DEFA14A May 20 – DEFA14A May 16 – DEFA14A May 13 – DEFA14A May 13 – DEFA14A	POLITAN CAPITAL MANAGEMENT LP Jun 14 – PRRN14A Jun 03 – PREC14A Jun 03 – DFAN14A May 10 – DFAN14A Mar 25 – DFAN14A
MRC	MRC GLOBAL INC	20.4% 11.2%	TBD		Nominating two directors to the board: Brad Favreau and Daniel Silvers Engine Capital believes that MRC is significantly underperforming, especially relative to DNOW Inc. Engine Capital believes that MRC’s inability to settle it’s ongoing dispute with Cornell Capital is preventing MRC from optimizing capital structure Engine Capital believes that MRC’s M&A strategy is flawed and that CEO Rob Saltiel does not have a successful track record in acquisitions or integrations	MRC GLOBAL INC Apr 02 – DEFA14A	ENGINE CAPITAL, L.P.
NVAX	NOVAVAX INC	79.1% -93.1%	TBD	2024-05-06 – PREC14A	Shah Capital Management intends to vote against Novavax directors Richard H. Douglas, Margaret G. McGlynn, and David Mott Shah Capital Management believes that Novavax is undervalued and continues to suffer from poor profitability, despite the substantial value to be unlocked in the Company’s Matrix-M adjuvant platform and non-mRNA protein vaccine portfolio. Shah Capital Management met with management and the board multiple times over the course of 2023 and 2024, but believes Novavax has been unresponsive to their suggestions.	NOVAVAX INC Jun 05 – DEFA14A Apr 29 – DEFA14A	SHAH CAPITAL MANAGEMENT May 20 – DFAN14A May 13 – DFAN14A May 08 – DFAN14A May 07 – DFAN14A May 06 – PREC14A May 06 – DFAN14A
SLRX	SALARIUS PHARMACEUTICALS INC	-75.5% -98.6%	TBD		Mismanagement and Poor Performance: The letter claims that Salarius Pharmaceuticals is mismanaged by its current Board and management, leading to a significant decline in shareholder value and underperformance of the company. Compensation Issues: The letter criticizes the Board for failing to establish a culture of accountability, highlighting excessive and poorly justified salary increases and stock option grants to executives despite the company’s poor performance and declining stock price. Misaligned Incentives: The author points out that the Board members and executives hold a minimal percentage of the company’s shares and have not made open market purchases, indicating a lack of alignment with shareholder interests. Questionable Decisions and Lack of Transparency: The letter accuses the Board of engaging in “curious compensation practices” and “disclosure diffusion,” making it difficult for shareholders to get a clear understanding of executive compensation and undermining informed voting. Call for Change: The activist argues for the need for new Board members with fresh perspectives and better alignment with shareholder interests, expressing a lack of confidence in the current Board’s ability to improve the company’s performance and accountability.	SALARIUS PHARMACEUTICALS INC Mar 26 – DEFA14A	ELVIN LEE Mar 20 – DFAN14A
SPRU	SPRUCE POWER HOLDING CORP	-49.8% -95.2%	TBD	2024-04-17 – PREC14A	Clayton Partners, JSCC Family Trust, and Jason Stankowski are contesting the proxy Clayton is nominating Jason Stankowski and Clara Nagy McBane to the board Clayton believes the company is not being managed to the benefit of its shareholders — believes “Spruce is, at worst, a break-even business and has significant opportunities for positive cash flow generation going forward” Clayton disagrees with the company not buying back any stock despite trading at a 25% discount to the estimated value of the stock	SPRUCE POWER HOLDING CORP	CLAYTON PARTNERS LLC May 31 – PRRN14A Apr 18 – DFAN14A Apr 17 – PREC14A

RECENT COOPERATION AGREEMENTS

TARGET	1-Year TSR	ACTIVIST	SUMMARY	FILING	DATE	STOCK CHANGE	DAYS SINCE
AMERISERV FINANCIAL INC (ASRV)	-5.2%	Driver Management Co LLC	Driver agreed to withdraw its notice of intent to nominate three directors at the upcoming shareholder meeting. Driver agreed to drop their lawsuits filed against AmeriServ for a settlement fee of $1,762,659. AmeriServ agreed to repurchase 628,003 shares from Driver at a total cost of $1,494,647.	View Filing	2024-06-13	4.6%	4
FORTE BIOSCIENCES INC (FBRX)	-45.2%	Camac Fund, LP	The FBRX board will expand to nine seats. One incumbent director will resign and two directors will be selected from a Camac list of five options. The FBRX board will create a committee to explore strategic altenratives for the company. Camac and FBRX will settle their legal case. The agreement runs through the 2028 annual shareholder meeting. As of the agreement date, Camac held 3.5% of FBRX’s outstanding stock.	View Filing	2024-06-11	1.6%	6
ANIKA THERAPEUTICS INC (ANIK)	-3.9%	Caligan Partners LP	Increasing board to 10 directors Appointing William Jellison as an independent Class I director (2024) and Joseph Capper as an independent Class II (2025) Board will nominate and support Jellison at 2024 annual meeting Mr. Jellison and Mr. Capper will be appointed to the Capital Allocation Committee Board size will decrease to 9 directors at 2024 annual meeting Company agreed to implement a share repurchase program	View Filing	2024-05-28	6.1%	20

RECENT PROXY CONTEST RESOLUTIONS

TICKER	COMPANY	MEETING DATE	RESULTS	ACTIVIST SITUATION SUMMARY
MFIN	MEDALLION FINANCIAL CORP	Jun 11	Medallion Financial won this fight with shareholders electing the board’s two nominees with ~77% of the vote. Shareholders also supported the board’s executive compensation plan via the Say-on-Pay vote at ~74% support.	ZimCal looking to add Stephen Hodges and Judd Deppisch to the board ZimCal flags long-term underperformance with Medallion down 40% over the last 10 years and heightened near-term risk from subprime exposure ZimCal has published a site supporting its case at: https://restoretheshine.com/
WT	WISDOMTREE INC	Jun 12	WisdomTree, Inc. (WT) released a press release on June 12th announcing that all nine WT nominees were elected. WT said “Voters repudiate ETFS Capital And Graham Tuckwell” WT also said all other proposals, including say-on-pay for the year and say-on-pay frequency passed. The 8-k with certified results will help provide better insights into the actual support levels as there is no mention in the press release.	ETFS Capital owns approximately 10% of Wisdom Tree (WT) and believes “immediate action to unlock significant value for all stockholders and halt further value destruction.” Puts a focus on WT’s strategy of transitioning to a decentralized finance (DeFi) business and believes that it resulted in poor management of the core, profitable ETF business. Believes the company’s true value lies in its ETF business, which suffers from poor profitability despite record assets under management. Believes its attempts to be collaborative have been met with ” a public and bafflingly hostile response.”

Share the Post:

Daily SPAC Update – December 18, 2024

December 18, 2024

Daily SPAC Update – December 17, 2024

December 17, 2024

Research Disclaimer

The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but Boardroom Alpha cannot guarantee its accuracy and completeness, and that of the opinions based thereon.

This report contains opinions and is provided for informational purposes only – it does not constitute investment, legal or tax advice. You should not rely solely upon the research herein for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional before you make any investment.

None of the information contained in this report constitutes, or is intended to constitute a recommendation by Boardroom Alpha of any particular security or trading strategy or a determination by BA that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

No representation or warranty, expressed or implied, is made on behalf of Boardroom Alpha as to the accuracy or completeness of the information contained herein. Boardroom Alpha does not accept any liability for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on all or any part of this research and any liability is expressly disclaimed.

Know Who Drives Return

All-in-one platform delivering governance-focused insights and analytics on U.S. public companies, providing in-depth data on boards, executives, SEC filings, fund voting, insider activity, and shareholder proposals and more.

Boardroom Alpha's AI-driven tools for benchmarking, monitoring, and making informed decisions delivers alpha for institutional investors, activists, advisors, corporate leaders, underwriters and more.