WisdomTree Investments, Inc. (“WisdomTree” or the “Company”)
(NASDAQ: WETF), an exchange-traded fund (“ETF”) and exchange-traded
product (“ETP”) sponsor and asset manager, today responded to the
numerous false and misleading assertions made by dissident
WisdomTree stockholders ETFS Capital Limited (“ETFS”) and Lion
Point Capital (“Lion Point”) in their May 4th press release and
open letter.
During 13 meetings over the past few months, members of the
Board of Directors of WisdomTree (the “Board”) have negotiated in
good faith with Cristiano Amoruso, a Principal of Lion Point, with
the goal of reaching a mutually agreeable cooperation
agreement that would avert a costly, distracting and
unnecessary proxy contest. During this period, the Board met 16
times to discuss potential settlement options and act in the best
interests of all WisdomTree stockholders. Following weeks of
negotiations, the parties reached a final definitive cooperation
agreement, which all parties were planning to announce publicly
yesterday on Wednesday, May 4th, when ETFS and Lion Point abruptly
abandoned the agreement and instead issued an open letter grossly
mischaracterizing both the nature of the agreement and the
negotiations with WisdomTree.
Frank Salerno, WisdomTree Chair of the Board, said, “A
cooperation agreement with ETFS and Lion Point would have been a
win for all stockholders. We were shocked that, mere hours before
its planned announcement, ETFS and Lion Point abruptly and
irresponsibly discarded the cooperation agreement and announced
their intention to engage in a proxy fight. Our negotiations with
Lion Point, in which I was personally involved every step of the
way, were so constructive and positive that I had, just days
before, received a dinner invitation from Mr. Amoruso, who himself
expressed confidence in WisdomTree’s business direction and
strategies. Unless Lion Point was always negotiating in bad faith,
we can only conclude that Graham Tuckwell, the Chairman and CEO of
ETFS, deliberately derailed this agreement, placing his own
personal agenda above the best interests of other stockholders,
including his fellow activist.”
THE WISDOMTREE COOPERATION AGREEMENT
WOULD HAVE ENHANCED CORPORATE GOVERNANCE AND BENEFITED ALL
STOCKHOLDERS
The cooperation agreement to which all parties had
agreed included numerous stockholder-friendly features and
demonstrated WisdomTree’s continued commitment to Board
refreshment, good corporate governance and acting in the best
interests of all stockholders.
The terms of the cooperation agreement included:
- Consistent with the Company’s ongoing process of Board
refreshment, the size of the Board would have been increased to
nine members, and a new independent director
nominated by ETFS and Lion Point, Lynn S. Blake, would have been
appointed to the Board and its Nominating and Governance Committee,
effective immediately. Lion Point and ETFS would also have been
entitled to designate an additional independent
director, subject to the approval of the Board’s
Nominating and Governance Committee.
- The Company would seek stockholder approval at its upcoming
2022 Annual Meeting of Stockholders (“2022 Annual Meeting”) to
declassify the Board.
- The Board would have created an Operations and Strategy
Committee, which would include the two new directors as
well as two current directors, to help to evaluate operational
improvement opportunities and Company strategy.
- The Company would also have terminated the stockholder
rights plan adopted in March 2022, effective May 11,
2022.
- The agreement also included standstill provisions so permissive
that Lion Point would have been able to increase its economic
interest in WisdomTree stock from 3.1%, up to 9.9%.
Having met 16 times to discuss the cooperation agreement, the
Board is fully committed to its terms. As such, the Board is
offering Ms. Blake a seat on the Board, submitting a binding
declassification proposal for stockholder approval at the 2022
Annual Meeting, will form an Operations and Strategy Committee upon
the conclusion of the 2022 Annual Meeting which will be at least
50% composed by Board members who have joined the Board in the last
three years, and will terminate the stockholder rights plan if it
is not approved by stockholders.
The Board’s decision to seek stockholder approval to declassify
the Board was made unanimously and unilaterally on the part of the
Board. The Board believes such a step is in the best interests of
stockholders and is consistent with corporate governance best
practices. Despite ETFS and Lion Point’s decision to abandon the
cooperation agreement, WisdomTree will still seek
stockholder approval to declassify the Board at the 2022 Annual
Meeting. Further details about this will be available when
the Company files its preliminary proxy materials soon.
As part of its extensive process to negotiate an outcome that
would benefit stockholders, WisdomTree conducted its standard due
diligence process regarding the director candidates put forth by
ETFS and Lion Point, including interviews with two of those
candidates. The Board recognized Ms. Blake’s relevant experience
and collaborative spirit, had commenced its new director onboarding
process, and was prepared to welcome her to the Board as part of
the cooperation agreement. Being true to its word, the Board hereby
offers Ms. Blake a seat on the Board where she would immediately
become a member of the Nominating and Governance Committee and
would become a member of the to-be-formed Operations and Strategy
Committee.
At the same time, the Board quickly determined that the second
nominee of ETFS and Lion Point, Deborah Fuhr, has significant
conflicts of interest that disqualify her as a suitable candidate
for the Board. Lion Point was very ready to concede her conflicts
at this point, swiftly dropping Ms. Fuhr and substituting only the
right to name another director at a later point. The Board did not
interview Mr. Tuckwell, having already determined on numerous
occasions that he does not have the necessary temperament or
qualifications to join the WisdomTree Board, a collaborative group
of directors with diverse backgrounds and experience, a point which
Lion Point did not dispute. Mr. Tuckwell also has significant,
unresolvable conflicts of interest that in and of themselves
disqualify him as a WisdomTree director. ETFS and Lion Point claim
they “nominated three extraordinarily qualified directors,” who
were apparently so extraordinarily qualified that two of the three
nominees were discarded without a second thought by the dissidents
themselves during negotiations as soon as WisdomTree noted their
massive conflicts.
GRAHAM TUCKWELL DERAILED THE COOPERATION
AGREEMENT SOLELY TO ADVANCE HIS PERSONAL AGENDA
Mr. Tuckwell has been a WisdomTree stockholder since 2018, when
the company he founded, ETF Securities, sold its European asset
management business to WisdomTree. At the time the Company pursued
this strategic acquisition, Mr. Tuckwell agreed to be a passive
stockholder of WisdomTree, and WisdomTree implemented legal
protections to limit his ability to control the Company, capping
his voting power at 10% and stipulating that he had no contractual
right to Board representation. Since that time, he has chaffed at
those restrictions, demanding numerous times to be added to the
Board.
From the start, Mr. Tuckwell has been driven by his outsized ego
and personal animosity towards WisdomTree’s Founder and CEO, Jono
Steinberg, and has insisted that only he, Mr. Tuckwell, can lead
this Company. Just days before the cooperation agreement was
intended to be signed and announced, Mr. Tuckwell insisted on
speaking individually to Mr. Steinberg and Mr. Salerno, in separate
conversations, without Lion Point, during which he made clear that
he felt he had been, in his own words, “sidelined” during the
negotiations between Lion Point and WisdomTree. Mr. Tuckwell has
only participated in one of the numerous settlement conversations.
Lion Point chose to exclude Mr. Tuckwell from
subsequent conversations, acknowledging several times that
constructive conversations were not possible with Mr. Tuckwell
present and that discussions with him were like “getting into a
cage with a tiger.”
Mr. Salerno added, “I can personally attest that Mr. Tuckwell’s
characterizations of the last-minute conversations he had with me
and Mr. Steinberg are purposefully inaccurate. His sole focus was
to push for our CEO and Founder to step down, even though his
counterpart at Lion Point had never even met him. We were – and are
– fully committed to every aspect of the cooperation agreement that
had been hammered out through exhaustive negotiations extensively
negotiated by his own associates, including the creation of an
Operations and Strategy Committee with a remit to evaluate and, if
appropriate, recommend changes in the Company’s strategy.
If anyone was operating in bad faith, it was Mr.
Tuckwell, who appears to have allowed these negotiations
to proceed with no real intention of accepting any outcome other
than the ouster of our CEO, a result he could never achieve through
a vote at the 2022 Annual Meeting. He has once more demonstrated
his lack of fitness to serve as a director of this or any other
public company.”
WISDOMTREE BOARD STANDS BEHIND CEO JONO
STEINBERG, STRONG BUSINESS & INNOVATIVE
STRATEGY
The Board remains confident in WisdomTree’s current strategy and
in its execution under the leadership of Mr. Steinberg and his
management team. The statements about WisdomTree’s business in the
open letter are disingenuous – Mr. Amoruso explicitly expressed
confidence in WisdomTree’s strategy and business direction
throughout the negotiation process. The facts are clear.
As reflected in WisdomTree’s recent financial results published
on April 29th, the first quarter of 2022 marked the sixth
consecutive quarter of organic growth, with strong earnings results
and record assets under management in the first quarter despite
ongoing market volatility. WisdomTree’s core ETP business is
strong, and the Company has never been more competitive or better
positioned for growth. The Company’s product positioning and
performance is excellent, the models business is gaining traction,
and WisdomTree is a first mover in Digital Assets, a natural
extension of its core business with a massive addressable market.
In the first quarter, no other publicly traded U.S.
traditional asset management company with an enterprise value of
greater than $1 billion had better relative AUM growth than
WisdomTree; in fact, no other company increased AUM during
the quarter, and WisdomTree’s organic flow growth rate was the
second highest among its peers and over twice the industry mean.
WisdomTree’s year-to-date annualized organic growth is already
accelerating in Q2, hitting 12% as of April 30th.
WISDOMTREE BOARD REMAINS OPEN TO A
SETTLEMENT AGREEMENT
The Board continues to believe that reaching a consensual
resolution and avoiding the cost and distraction of a proxy contest
at the 2022 Annual Meeting is in the best interests of the Company
and its stockholders. As such, the Board remains willing and ready
to execute the cooperation agreement on the terms that were heavily
negotiated and agreed to by the parties over the last several
weeks.
Advisors
BofA Securities is serving as financial advisor, and Goodwin
Procter LLP is serving as legal counsel to WisdomTree. Innisfree
M&A is serving as proxy solicitor and Abernathy MacGregor is
serving as strategic communications advisor.
About WisdomTree
WisdomTree Investments, Inc., through its subsidiaries in the
U.S. and Europe (collectively, “WisdomTree”), is an ETF and ETP
sponsor and asset manager headquartered in New York. WisdomTree
offers products covering equity, commodity, fixed income, leveraged
and inverse, currency, cryptocurrency and alternative strategies.
WisdomTree currently has approximately $79 billion in assets under
management globally.
WisdomTree® is the marketing name for WisdomTree Investments,
Inc. and its subsidiaries worldwide.
Cautionary Statement Regarding Forward-Looking
Statements
Any statements contained in this press release that do not
describe historical facts may constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such statements are identified by use of the words
“anticipates,” “believes,” “estimates,” “expects,” “intends,”
“plans,” “predicts,” “projects,” “should,” and similar expressions.
Any forward-looking statements contained herein are based on
current expectations, but are subject to risks and uncertainties
that could cause actual results to differ materially from those
indicated, including those factors discussed under the caption
“Risk Factors” in our most recent annual report on Form 10-K, filed
with the SEC on February 25, 2022, as amended on April 29, 2022,
and in subsequent reports filed with or furnished to the SEC.
WisdomTree assumes no obligation and does not intend to update
these forward-looking statements, except as required by law, to
reflect events or circumstances occurring after today’s date.
Important Additional Information and Where to Find
It
WisdomTree intends to file a proxy statement on Schedule 14A, an
accompanying WHITE proxy card and other relevant
documents with the SEC in connection with such solicitation of
proxies from WisdomTree stockholders for WisdomTree’s 2022 Annual
Meeting. WISDOMTREE STOCKHOLDERS ARE STRONGLY ENCOURAGED TO
READ WISDOMTREE’S DEFINITIVE PROXY STATEMENT (INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO), ACCOMPANYING
WHITE PROXY CARD, AND ALL OTHER DOCUMENTS
FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors and stockholders may obtain a copy of the definitive
proxy statement, an accompanying WHITE proxy card,
any amendments or supplements to the definitive proxy statement and
other documents that WisdomTree files with the SEC at no charge at
the SEC’s website at www.sec.gov. Copies will also be available at
no charge at the “SEC Filings” subsection of the “Financial
Information” section of WisdomTree’s Investor Relations website at
http://ir.wisdomtree.com/ or by contacting Jeremy Campbell,
Director of Investor Relations, at jeremy.campbell@wisdomtree.com,
as soon as reasonably practicable after such materials are
electronically filed with, or furnished to, the SEC.
Contact Information
Investor RelationsWisdomTree Investments, Inc.Jeremy
Campbell+1.646.522.2602jeremy.campbell@wisdomtree.com
or
Innisfree M&A IncorporatedScott Winter / Jonathan
Salzberger+1.212.750.5833 swinter@innisfreema.com /
jsalzberger@innisfreema.com
or
Media RelationsWisdomTree Investments, Inc.Jessica
Zaloom+1.917.267.3735jzaloom@wisdomtree.com
or
Abernathy MacGregorCarina Davidson / Dana
Gorman+1.212.371.5999ccd@abmac.com / dtg@abmac.com
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