Notice of Exempt Solicitation. Definitive Material. (px14a6g)
May 04 2020 - 9:03AM
Edgar (US Regulatory)
U.S. Securities
and Exchange Commission
Washington, DC 20549
NOTICE OF EXEMPT SOLICITATION
1. Name of the Registrant:
OnDeck Capital, Inc.
2. Name of persons relying on exemption:
Voce Capital Management LLC
3. Address of persons relying on exemption:
600 Montgomery Street, Suite 4400, San Francisco,
California 94111
4. Written materials. Attach written material required to be submitted
pursuant to Rule 14a-6(g)(1)
See attached.
vocecapital
A voice for
value
VOCE CAPITAL URGES FELLOW STOCKHOLDERS TO
VOTE AGAINST ONDECK DIRECTORS AT MAY 7 ANNUAL MEETING
To Survive in Current Environment OnDeck
Must Acknowledge Strategic Mistakes, Arrest Wasteful Spending and Realign Corporate Governance
32% Loss of Value Since Announcing Earnings
Further Evidence Company’s Strategic Tweaks Fall Woefully Short
Voting AGAINST All Three Directors Only Way
to Send Strong Signal of Dissatisfaction with the Status Quo
San Francisco,
CA (May 4, 2020) – Voce Capital Management LLC (“Voce”) issued the following
statement in connection with the upcoming Annual Meeting of Stockholders of OnDeck Capital, Inc. (NYSE: ONDK) (“OnDeck”
or the “Company):
As one of OnDeck’s
most actively engaged stockholders, we’re rooting for it to succeed. Over the course of the past year, we tried to work with
management and the Board to sharpen the Company’s strategic focus on its profitable and differentiated U.S. offering, and
consistently pushed them to address its chronic lack of expense discipline. But we simply do not believe the Company can survive,
especially in this environment, without acknowledging its strategic mistakes, arresting its wasteful spending and realigning its
corporate governance to better represent the interests of stockholders. The unsatisfactory results of our private efforts to get
the Company to take action culminated in the release of a letter to our fellow stockholders on April 17, 2020.
Sadly, but perhaps
unsurprisingly, OnDeck’s reaction to the issues we raised was to play the “COVID-Card” early and often, repeatedly
invoking the current challenging environment as if that should somehow immunize the Board from accountability. But long-term stockholders
know that the crisis at OnDeck is many years in the making, and that flawed choices and poor leadership cost stockholders dearly
long before anyone had even heard the word “coronavirus.” Since its December 2014 IPO, OnDeck had already vaporized
79% of stockholder value prior to the start of the pandemic, and shares now sit 95% below that initial offer price. OnDeck
plunged 30% in 2019 alone, a year when its peers gained 18% and the Russell 2000 surged 25%. Its underperformance has continued
during the pandemic period, too.
With such a
grim track record, one might have expected at least a modicum of reflection by OnDeck or a willingness to evolve. Instead, in response
to our analysis it stubbornly doubled down on the status
quo,
The Pyramid | 600 Montgomery
Street
San Francisco, CA 94111
(415) 489-2600 tel
(415) 489-2610 fax
www.vocecapital.com
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Voce Capital Urges Fellow Stockholders to Vote Against OnDeck Directors
May 4, 2020
Page 2 of 3
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offering no lasting changes to its strategy, expenses or corporate governance. Stockholders are being asked to award the long-tenured
Directors seeking reelection (all of whom pre-date the IPO) three additional years in exchange for nothing more than:
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A reaffirmation of all of its strategic plans – with
no material changes to its controversial Australian and Canadian forays or protean “ODX” strategy, and only a “pause”
in its quest to obtain a bank charter (including through a potential acquisition);
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A series of discrete, one-time cost reductions (only in 2Q20)
of $10-13 million, representing a mere 5% of OnDeck’s annual operating expense, with none of the 750 positions in the Company
eliminated – compared to $50+ million in permanent annual savings we identified through benchmarking and historical comparative
analysis, all of which we provided to management; and
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Zero governance changes now, despite significant questions
raised about the Board’s fulfillment of its core responsibilities, other than a vague statement of intention to consider
the commencement of a process to de-stagger its Board in 2021, which would likely not be complete until 2024 – no reform
or even response to the myriad misalignments of interest in its compensation schemes, and numerous, material defects in the structure
and composition of the Board that we chronicled.
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As we noted
in our April 24 statement, “[i]f a perennial laggard like OnDeck can’t make a single difficult choice in an environment
like this, how or when will it ever do so?” Following our criticism, on its April 30 earnings call OnDeck attempted to sweeten
the pot with a few million dollars of extra savings and some more soothing language, but the stock’s swift reaction is the
ultimate tell: Down 32% since the earnings call ended. The final two hold-out bullish analysts have since downgraded the stock.
Through the
Board’s conscious decision to move the Director nomination deadline from February 16, 2020 all the way back to December 3,
2019, stockholders are left with only two options at the present time: passively do nothing (yet again, with likely similar results
to past years) or vote against the three senior OnDeck Directors standing for reelection this year. Withholding support is the
only way at this time to send a strong signal of dissatisfaction with the status quo.
To those
who have chosen to ponder “what could have been?” had we been permitted to run a full proxy contest this year,
rather than focusing on the Company’s choices and results, we are reminded of Theodore Roosevelt’s admonition to
“[d]o what you can, with what you have, where
you are.” We did and we have, and encourage others to join us.
vocecapital
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Voce Capital Urges Fellow
Stockholders to Vote Against
OnDeck Directors
May 4, 2020
Page
3 of 3
VOCE STRONGLY
URGES ITS FELLOW STOCKHOLDERS TO VOTE AGAINST THE REELECTION OF ONDECK CHAIRMAN AND CEO NOAH BRESLOW; CORPORTATE GOVERNANCE AND
NOMINATING COMMITTEE CHAIR JANE THOMPSON; AND COMPENSATION COMMITTEE CHAIR RONALD VERNI AT THE ANNUAL MEETING OF STOCKHOLDERS ON
MAY 7, 2020.
About Voce Capital Management LLC
Voce Capital Management LLC is a fundamental
value-oriented, research-driven investment adviser founded in 2011 by J. Daniel Plants. The San Francisco-based firm is 100% employee-owned.
Media Contact:
Sloane & Company
Dan Zacchei / Joe Germani
dzacchei@sloanepr.com / jgermani@sloanepr.com
vocecapital
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