If Insider told you, your investment in a company would gain 132% in a year, we would expect that might make you smile. Apparently not, Alta Fox Capital who we have written about over the last few years and who holds a 12% ownership in Daktronics on a fully converted basis.
Alta Fox released a presentation that details their thoughts on unlocking the full potential of Daktronics. The presentation, a similar version of which was delivered by Alta Fox Founder and Managing Partner Connor Haley at the Bloomberg Activism Forum 2024, can be accessed at www.FixDaktronics.com.
Yahoo/finance reports that Alta Fox believes that Daktronics is a high-quality, secular growth business that remains severely undervalued today due to ineffective corporate governance. Despite the Company’s position as an undisputed market leader with revenues fueled by the expanding sports and live events market, Daktronics’ second-generation leadership under Chief Executive Officer and Chairman Reece Kurtenbach has driven a culture of complacency and nepotism that has resulted in significant long-term underperformance.
Alta Fox indicates their commitment to delivering positive change, even if it means nominating director candidates for election to the Board in 2025 and thereafter. By modernizing its governance and embracing public company governance norms, the Company can reignite consistent growth and sustained profitability and ultimately produce superior shareholder value. Alta Fox feels they have outlined a highly credible path for Daktronics to achieve ~$1.88 in FY28 EPS, potentially resulting in a ~$40 per share price target. Alta Fox’s proposed path includes:
- Collaborating with Shareholders on a Meaningful Board Refresh
- Instituting Modern Governance Practices
- Recruiting a Highly Qualified Chief Financial Officer
- Restoring Accountability for Management and Setting a Merit-Based Culture
- Improving Investor Engagement
The dispute moves to the next level. We will keep you all updated as this saga continues.
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