ETFS Capital Releases Letter to Fellow WisdomTree Stockholders
2024年3月21日 - 9:00PM
ETFS Capital Limited (“ETFS Capital”), the largest combined owner
of common stock, $0.01 par value (the “Common Stock”), and Series A
Non-Voting Convertible Preferred Stock (the “Series A Preferred
Stock”) of WisdomTree, Inc. (“WisdomTree” or the “Company”) (NYSE:
WT), with ownership of approximately 10.2% of the outstanding
Common Stock, which together with its Series A Preferred Stock
would represent approximately 18.3% of the Company’s outstanding
Common Stock on an as-converted basis, today released a letter to
its fellow WisdomTree shareholders, responding to a public letter
from WisdomTree board of director’s (the “Board”) to ETFS Capital’s
Chairman, Mr. Graham Tuckwell.
The full text of the letter follows:
March 21, 2024
Dear Fellow Stockholders:
By now you may have had an opportunity to review a public letter
from WisdomTree’s board of directors (the “Board”) issued in
response to our private engagement with the Company. If you found
the Board’s response to a request to evaluate all options that
maximize shareholder value as dismissive and disappointing, you are
not alone.
As a long-term shareholder, with deep ETF industry and operating
expertise, ETFS Capital has attempted constructively to engage with
the Board about reversing the Company’s long term destruction of
value, excessive cost-structure, negligent capital allocation, and
the consistent failure of the board to fulfill their fiduciary
obligations to stockholders.
For many years now WisdomTree has embarked on an ill-advised
strategy of trying to transform the Company from an ETF business to
a DeFi business, which has resulted in the core ETF business being
poorly managed and all of its DeFi efforts ending in failure. More
specifically, its flagship DeFi initiatives, namely WisdomTree
Prime launched in July of 2023 and the Company’s Bitcoin ETF
launched in January of 2024, have failed to generate any meaningful
market interest. WisdomTree Prime is and always has been a complete
folly in our opinion, and in crypto ETFs the Company continues to
rank towards the bottom relative to peers.
As a result of this misguided ‘transformation’ strategy,
WisdomTree lost focus on the core ETF business, which despite
record AUM, suffers from poor profitability. Consequently,
WisdomTree trades at a significant discount to its intrinsic value
if it were a well-run pure-play ETF business. We believe the
intrinsic value is $15.50 per share compared to the current market
price of $9.00 per share. This massive value gap exists despite the
recent increase in WisdomTree’s share price of almost $2.00 per
share since our engagement with the Board on February 13, 2024, and
follow up letter on February 20, 2024 requesting the Company
initiate a strategic review process.
In the hope of engaging in a respectful and productive dialogue
with the Board, over the past several months, we have conducted our
engagement in private. We sought a two-way constructive dialogue
with the Company on actions required to close the value gap. We
called for greater disclosure of robust KPIs and urged the Company
meaningfully to engage with ALL stockholders regarding performance
milestones and metrics associated with Prime and the Bitcoin ETF
during the February earnings call. The Board produced no counter to
our well thought through arguments and analysis. They blocked the
discussion.
In our February 20, 2024, letter to the Board, we acknowledged
that individual members of the Board and stockholders (such as ETFS
Capital) have divergent views about the best way forward to unlock
value at WisdomTree.
We proposed that to resolve this question, the Board should form
a special committee of independent directors with a mandate to
consider strategic alternatives including, but not limited to, a
sale of part or all of the business and returning capital to
stockholders, and a significant repositioning of the business
including the replacement of members of WisdomTree’s senior
leadership team. To assist in this work, we further proposed that
the special committee retain a recognized tier-one investment bank
along with independent counsel.
The Board responded to our private proposal with a public and
bafflingly hostile response. Nothing in our proposal would commit
the Board to a particular course of action, other than to empower a
special committee to evaluate all value enhancing options by
running an unbiased and complete review process. We have made a
reasonable and straightforward request to the Board, and one that
would benefit all stockholders.
Fellow stockholders, over the past three years, we have
attempted to address operational and governance failures through
proxy campaigns. Unfortunately, the resulting change to
WisdomTree’s Board has been insufficient to overcome the influence
that management and long-tenured directors exert in maintaining the
status quo. Instead, as a referendum on the Company’s failed
diversification strategy and its refusal to unlock value through a
strategic review process, we intend to Withhold our votes from
members of the Board at the upcoming shareholder meeting. We invite
other shareholders to do the same.
It is time to send a clear and resounding message to the Board.
Hire a reputable banker and evaluate all options to unlock
value.
We urge Board members to reconsider their decision and act as
independent fiduciaries for all stockholders.
Sincerely,
Graham TuckwellChairman, ETFS Capital Limited
About ETFS Capital Limited
In 2018, WisdomTree spent $611 million to acquire the European
ETC business of ETF Securities Limited (now called ETFS Capital
Limited) for cash and shares, becoming the largest shareholder in
WisdomTree. The management team lead by Graham Tuckwell
successfully ran and grew their business at a much higher EBITDA
margin than WisdomTree runs its business.
ETFS Capital is a London-based strategic investment company
focused on growth opportunities across the ETF ecosystem. As part
of its investment process, ETFS Capital receives and analyses many
dozens of business ideas and proposals within the ETF ecosphere
each year and conducts in-depth technical and commercial due
diligence on the companies where it chooses to deploy capital.
Thereafter it engages in a hands-on approach, as a partner to
management teams and Boards bringing its unparalleled
industry-specific expertise for the benefit of those companies.
Media Contact:
Dan Gagnier / Riyaz
Lalani+1-646-569-5897ETFS@gagnierfc.com
WisdomTree (NYSE:WT)
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