Calling all PGNT shareholders please vote!
In this proxy every vote really does count so please do vote, no matter how many shares you hold.
Sham owns about 29% of the outstanding. Given the two larger shareholders with 11% and 17%, this could really go either way depending on what they do.
If you own shares please vote. If you know other shareholders please encourage them to vote.
PGNT has been tragically undervalued for years and this is your chance to force the change you want to see.
Personally I can't see a single reason to vote with Sham. He has a history of theft and shadiness. He paid himself $446k when the company market cap was only $11m! He had the company buy MLS season tickets in both Atlanta and Miami. He had the company lease an office in Las Vegas, for what looking at condos?
- Sham was chairman of the board from Mar 2012 to Aug 2024 and in that time guided PGNT to an unimpressive 7.4% CAGR versus 11.7% for the S&P500
- "Sham should really be judged on his investment performance since capital allocation is his main responsibility. It'd hard to see clearly because they don't break things out that well in the reports so I've taken a few different angles. Each one looks bad:
- If we add up all of the realized and unrealized investment gains on PGNT’s income statement since Sham took over the sum is $360k over 12 years. He started with $1.27m giving about 2% CAGR versus 14% for the S&P 500.
- If we add up all of the purchases of investments and proceeds from sales of investments on the cashflow statement since Sham took over the sum is $-4.2m over 12 years which is horrible taken on its own.
- 12 years ago when Sham took over the company had $1.27m of marketable securities and now we have $1.6m in the most recent annual report. If we would have just invested in the S&P 500 that number would be $6.1m."
When Sham got kicked out last August the stock was languishing down at $6.40. Now it's up to $9, gaining 40%. I really hope the new board wins so we can see that stock keep moving up. They've already done so much good by getting out of the OPTT situation, selling those stupid Las Vegas condos, and liquidating Sham's underperforming stock portfolio.
If Sham wins I'm sure the stock will drop back down as it would be back to the same old bad decisions
--Dan
disclosure: long PGNT and voting against Sham
just noting I added a line to this blog post comparing Sham's return as PGNT of chairman to the SP500
ReplyDelete"Sham was chairman of the board from Mar 2012 to Aug 2024 and in that time guided PGNT to an unimpressive 7.4% CAGR versus 11.7% for the S&P500"
Dan I'm really confused about the whole situation. Why has Sam suddenly been ejected? Why has the board nominate Renell & Leoni against their wishes? Why has Kevin Ting sided with Sham? Frankly Kevin's letter seemed sort of compelling. I have heard a lot of allegations levied against Sham but I have trust issues with the board. Tim almost seems to have emerged out of nowhere and I'm suspicious of his motivations.
ReplyDeleteI think Sam leaving was always part of the plan for the new board. Sam was there during all the Sham stupidity so it only makes sense
DeleteI think the board nominated Renell and Leoni (who is Kevin Ting's girlfriend) to try convincing Kevin to vote on their side
Kevin has been on Sham's side for some time I think. I don't understand why since his letter lacks any logic
If you have trust issues or suspicions on the new board you can talk to Tim directly. Just email me and I'll put you in touch. I think tim is a great addition and is just what PGNT needs
Thanks that sounds reasonable. Though I think it's a slightly harsh to say Kevin's letter lacked any logic. The poison pill point seem to make sense. Frankly I'd welcome someone buying up a bunch of shares and driving the price up. That aside I also wanted to mention that I got a phone call today from an investor relations company telling me that the board recommended I vote by phone. Sorta rubbed me the wrong way because it felt like they're spending shareholder money to win the proxy fight. Then again if Sham is truly as bad as they say perhaps the ends justify the means. I'd like to speak to Tim but I need to really spend some time thoughtfully reviewing everything this weekend. Perhaps you could maybe do a YouTube interview with him so he can share his perspective? I feel like I know Sham from his YT interviews and it'd be nice to have the same from Tim.
ReplyDeletesorry no I don't do interviews. you are welcome to contact Tim to hear his perspective or follow his work from other companies
DeleteKevin's letter is just full of contradictions so it's hard to take any of it seriously. His number one bullet point of reasons to stand behind Gad is separating the Chairman and Chief Executive roles which Sham is the one and only person who has combined them. 3rd bullet point is refrain from equity incentive plans, but guess what Sham granted himself 10k shares during his last year in charge and tried to pass a 125k share equity incentive plan last year! He talks about how Sham will require directorys to purchase shares, well Sham presided over a 12 year period already in which his other directors bought absolutely nothing.
And of course the most important point is "Focus on high-quality investments-profitable businesses at attractive valuations". Sham has a long history of doing the exactly opposite of this
Good points thanks
DeleteMain point is Sham's number one job was capital allocation and he's just bad at it. He's not good. He makes bad decisions and has a long track record of that.
Deleteso like who cares if Sham is now saying he'll separate roles or encourage the board to buy their own shares or whatever
I sent an email to Kevin after he issued his press release to point out his incorrect thinking. It read in part:
Delete"I saw your press release. It is unfortunate that you misunderstand the Rights Plan. By publicly opposing it you are effectively saying you are in support of directors letting shareholders buy stock freely without limitation, which courts have deemed a breach of fiduciary duty. That may come back to bite you and Elodie should Gad win. Breach of fiduciary duty is not indemnified – meaning Elodie and likely you could have personal liability for all legal costs. Multiple counsels all said the same thing. The board had a fiduciary duty to pass the plan to prevent a creeping takeover. By aligning with Gad you were effectively a group that was within a few percentage points of having total control without paying any premium to shareholders. You are correct that Plans can be Poison pills used against shareholders but that was not the case. It did not entrench us. It did not meaningfully limit communication. It forced Gad to make his case to all shareholders openly. Which is where we are at."
So while you may want a shareholder to buy to force the price up. If it results in them gaining control of the company individually or as part of a group it is not good for shareholders and courts in DE have deemed a board not preventing it as a breach of fiduciary duty. Kevin was effectively saying he supports a director breaching his/her fiduciary duty. I suspect he did so out of ignorance of the law.
I would be happy to speak with any shareholders. tim@eriksencapitalmgmt.com
ReplyDelete