Harvest Capital Calls for Leadership Overhaul at Green Dot
January 25 2016 - 9:20AM
Dow Jones News
Harvest Capital Strategies LLC said Monday it is seeking
immediate leadership and board changes at Green Dot Corp., citing
"continued mismanagement and value destruction" at the company
where it holds a 6.2% stake.
Pasadena, Calif.-based Green Dot issues prepaid MasterCard and
Visa cards at retail stores including CVS Health Corp. and
Walgreens Boots Alliance Inc.
In a letter to the Green Dot board, Harvest Capital said it aims
to invest in "misunderstood businesses with capable, well-aligned
fiduciaries" and that "Green Dot is the only company with
leadership and execution so problematic that we are compelled to
approach the board."
A Green Dot spokesperson wasn't immediately available for
comment.
San Francisco-based Harvest Capital said it has worked privately
with the board over the past year but last month it became clear no
leadership changes were under way. The firm points to missed
consensus estimates or lowered revenue guidance in each of the past
eight quarters, as well as missed annual revenue targets in three
of the past four years.
The letter calls for the immediate removal of Chief Executive
Steve Streit, whom the firm links as a constant factor in the
company's woes.
"Mr. Streit's repeated failure to achieve both short- and
long-term targets is a symptom of a deeper and more fundamental
problem. He struggles with the basic tenants of running a larger
company and lacks the ability to execute on his strategic vision,"
the firm said.
Harvest Capital also points to senior leadership turnover as
"symptomatic of an unhealthy culture." Since its initial public
offering in 2010, all but one named executive officer has resigned,
according to the firm.
The firm said it is willing to work with the board on its
turnaround proposals but said "activities within our rights as
shareholders may include a proxy contest at the 2016 annual
meeting."
Shares of Green Dot, which have fallen 15% over the past 12
months, were inactive premarket.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
January 25, 2016 09:05 ET (14:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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