In the opening salvo of what might be a long battle between investors and management, the investment group Harvest Capital Strategies has declared it wants immediate changes at the very top of Green Dot’s executive slate, claiming that “value destruction” and “continued mismanagement” have been the hallmarks of the current slate of executives.
Harvest Capital said it wants the immediate ouster of the current CEO of the prepaid card firm, Steve Streit, it said in a letter addressed to the company. While the investment firm usually follows the directive of taking shares in “misunderstood businesses with capable, well-aligned fiduciaries,” this is a tack of a different sort as “Green Dot is the only company with leadership and execution so problematic that we are compelled to approach the board.” As a result, said a release on Monday (Jan. 25) from Harvest, the group prepared a presentation titled “Proven Leadership is the Missing Ingredient for Long-Term Success.” The firm has also launched a site called FIXGDOT.com.
At present, Harvest has a 6.2 percent stake in Green Dot, which it started accumulating in 2012, according to the statement.
As proof positive of its claims, Harvest said that Green Dot has missed consensus and/or lowered its top line guidance in each consecutive quarter over the past two years and has missed its own revenue targets across three of the past four years.
In its letter, Harvest said that senior leadership has been marked by turnover, which has been “symptomatic of an unhealthy culture,” with almost all (save one) executives resigning in the years since 2010. As a result of these and other issues, alleged Harvest, stakeholders have “suffered double-digit percentage declines in four of the last five years.”
In addition, a proxy fight may loom this year, said Harvest.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More