Alpha’s client was a niche small-cap company that had recently undergone a management transition and restructuring plan. The shareholder base included a combination of legacy investors (one of which had filed a 13D) and ten new activist-oriented holders (two of which had filed 13Gs). These new investors were led by one primary activist who had courted others to the stock.
Alpha first initiated several conversations with these new activist followers and learned that most had very limited knowledge of the Company or its investment thesis. Our client was not interested in being consolidated and believed there was a significant opportunity to generate shareholder value if given time.
Alpha worked with the new executive team to better articulate both the strategic goals of the restructuring, as well as the milestones that the Street could use to measure their implementation success. Through this process, several messaging tweaks were needed to provide qualitative direction and guidance, while keeping investors focused on the long-term path. Alpha IR also participated in several board discussions around the use of a poison pill, a staggered board, and other defense mechanisms.
As a result of Alpha’s communication strategy, the primary activist exited the stock within two quarters. Most of the naïve activist followers exited soon thereafter. Our focus has now turned to rebuilding the shareholder base with higher quality shareholders and our team has already been instrumental in securing ownership by long-term value-oriented investors like Royce, Tocqueville, and Kennedy.
About Alpha IR Group:
The Alpha IR Group is a holistic investor relations and transactions/crisis advisory firm that protects, enhances and builds the investment brands of America’s leading companies. We bring significant Wall Street, financial, and large agency experience to our clients, while retaining a small company, holistic approach. With deep sector expertise and senior-driven programs, Alpha IR is the right choice to manage our clients’ reputations, credibility, and ultimately, their valuation. The firm has offices in Chicago, New York, and Boston and represents over $100 billion of equity value trading on today’s public exchanges.