Alta Fox Capital Management is led by Connor Haley. Connor describes his investment philosophy as trying to find high quality businesses that are misunderstood by the market.  Prior to investing, the Alta Fox team typically does extensive diligence with a business, including meeting with the management team to determine if the company meets their investment criteria. After investment, Alta Fox is not shy about correcting the misperception that the market might have about a business, even if that includes becoming an activist for change.

Per a summary of Alta Fox investments from WhaleWisdom, the Company invested in Daktronics in the third quarter of 2022. From a look at the Alta Fox letter, they seem to have been aware of Daktronics liquidity issues, and stated that “In September 2022, Mr. Kurtenbach and Ms. Anderson were informed that Alta Fox was available to be a good faith partner if Daktronics ever needed liquidity“.

It is very clear, from their letter, that Alta Fox was unaware of the coming “going concern” notification by management in their latest 8K release, but still expressed their willingness to assist with liquidity, with no response from Daktronics.

The letter seems to indicate that Alta Fox is willing to become much more of an activist related to their investment.  As to next steps, only time will tell, but the YouTube interview video below provides some important perspective related to Connor Haley, in particular the first 15 minutes.

One quote from Haley in the interview:

Their should be compromise that results in value creation related to all stakeholders. However, when you have deep conviction when you are correct…we have been forced to be a formal activist and say that the company is owned by its shareholder, not by its management, not by its board…and if the board is not acting in the best interest of  shareholders, sometimes the large shareholders have to remind them of who the company and force them to do the right thing.

 

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