Not even a better-than-expected second quarter earnings report has succeeded in calming the ire of Synacor's dissonant shareholders, who have offered to independently conduct a meeting to overthrow chairman Jordan Levy and other key board members.
JEC Capital Partners and Ratio Capital Partners jointly control about 10 percent of shares for Buffalo-based Synacor, a leading developer of multiscreen technologies for the pay-TV industry. With Synacor stock cratering 60 percent since the company's IPO, these investors have been seeking to clean out Synacor's board of directors and put the company up for sale--a movement the board has resisted by, among other tactics, making it difficult to convene the shareholders meeting needed to conduct such a vote.
On Aug. 19, JEC and Ratio Capital publicly released a letter, indicating they'd pay to convene shareholders themselves: "Board change at Synacor is so urgently needed that we are willing to pay the costs of a special meeting so shareholders can effectuate the removal of chairman Jordan Levy and director Andrew Kau," the letter reads., "Mr. Levy and Mr. Kau have each served 13 years on the Synacor Board and shareholders have seen and endured enough."
Among the institutional investors' grievances: In April 2013, the board voted to increase its compensation level by 500 percent.
Synacor management has yet to respond to JEC and Ratio Capital's latest volley. The board has preached a "stay-the-course" message, believing that the growth and proliferation of pay-TV multiscreen services will soon improve the company's bottom line.
On Aug. 5, Synacor announced the hiring of former Comcast (NASDAQ: CMCSA) and Charter (NASDAQ: CHTR) executive Hamesh Bhise as CEO. On Aug. 12, the company continued to report sliding revenue, tallying just $24.12 for the second quarter. But that beat analysts' consensus forecasts, and the $1.9 million loss for the quarter was buffered by the fact that Synacor still has $25.7 million in cash on hand.
For more:
- read this press release
Related links:
Dissonant Synacor shareholders react to poison pill
Synacor management resists activist investors' call for sale
Synacor investors seek board spot as vendor hunts new CEO