Successful activist investor Starboard is part of a turnaround situation where a great deal of value can often be created.
Starboard has extensive experience helping companies focus on operational efficiency and margin improvement.On February 3, 2020, Starboard reported a significant position in Green Dot in the midst of a transition in leadership from the founder to a new CEO trying to take the company to the next level.Starboard has watched this stock for a long time – it has been volatile since it went public in 2010 and most recently, the stock fell from a high of $91.51 in September 2018 to $21.
In situations like this there is a great deal of value that can be created by replacing the founder-CEO with a public company CEO with more discipline and shareholder focus. The two impediments to that strategy are removing the founder and finding the right CEO. In this case, at the time of Starboard's investment the first one has already been accomplished and the second one was somewhat obvious.
The logical choice was former NetSpend CEO Dan Henry. During Harvest Capital's proxy fight in 2016, the Wall Street Journal published an article speculating that Henry was a leading candidate for the role if Streit were to be removed. In fact, Henry bought $500,000 of 'GDOT' stock after Harvest's campaign was announced and said he would sell his shares if Harvest could not remove Streit.
On March 25, 2020, the company announced that it had appointed Dan Henry as its new CEO. Once a new CEO is hired, there are additional opportunities to create value. The company can focus on its operations as a standalone company and balancing growth initiatives, improving margins and optimizing capital allocation.
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