EL SEGUNDO, Calif.,
Aug. 11, 2016 /PRNewswire/ -- In
a letter to the Board of Directors of Westell Technologies, Inc
(Nasdaq: WSTL) ("Westell" or the "Company"), and in an updated 13D
filling with the SEC, Cove Street Capital, LLC ("Cove Street")
called upon the Board of Directors of Westell and in particular,
its controlling shareholder, Robert C.
Penny, III, to end nearly two decades of shareholder value
destruction by hiring a reputable investment banker and selling the
Company.
|
Two Decades of Total
Returns as of August 8, 2016
|
|
1-YR
|
5-YR
|
10-YR
|
15-YR
|
20-YR
|
|
Westell
|
-40.9%
|
-73.4%
|
-70.8%
|
-52.4%
|
-98.0%
|
|
Russell
2000
|
0.6%
|
76.8%
|
81.2%
|
157.6%
|
276.6%
|
|
S&P
500
|
3.6%
|
86.0%
|
72.2%
|
83.1%
|
229.4%
|
"It is not a giant mental stretch to conclude that owning the
shares of Westell has been a dismal investment over almost any time
period during the past 20 years," states Cove Street Principal and
Portfolio Manager, Jeffrey
Bronchick, CFA. "What is prompting our rare and frankly
undesired public stance is the obvious disinterest of the Board and
in particular, Robert Penny, III—who
leads the Trust that controls the majority voting shares in
Westell—to show any ability or desire to improve shareholder
value."
Cove Street presently owns 16.3% of the common stock class A
shares outstanding, making it the second largest shareholder after
the Penny Family Trust. Cove Street's research suggests Westell's
complete inability to create shareholder value is largely due to
its small size and specifically that it sells to very large
customers in a telecommunication industry that requires significant
scale. It simply does not possess the scale to profitably develop
new products or to run an operations infrastructure that can
effectively sell into what is an increasingly global industry.
Cove Street Principal Eugene
Robin, CFA adds that, "It is time for the Board and the
Penny family to wake up and take an interest in the damage it has
inflicted on shareholders ... and frankly its own economic
position. Westell has no business being a standalone public company
and every day that goes by, the Company burns cash and eats
shareholder value. We urge the Board and the Penny family to take
immediate action."
Read Cove Street Capital's Letter to the Board of Westell
Technologies at www.CoveStreetCapital.com/blog.
Important Information:
Cove Street Capital, LLC, a Delaware Limited Liability Company,
is a California based, SEC
registered investment advisor that commenced operations in
2011.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cove-street-capital-llc-calls-on-westell-technologies-inc-board-of-directors-to-hire-investment-banker-sell-company-300312537.html
SOURCE Cove Street Capital, LLC