PITTSBURGH, March 28, 2019 /PRNewswire/ -- Hestia Capital
Partners LP (together with its affiliates, "Hestia Capital") and
Permit Capital Enterprise Fund LP (together with its affiliates,
"Permit Enterprise"), are long-term stockholders of GameStop Corp.
(NYSE: GME) ("GameStop" or the "Company"), with a combined
ownership of approximately 1.3% of outstanding stock. Hestia
Capital and Permit Enterprise (the "Investor Group") today
announced that Hestia Capital has delivered to the
Company a formal notice of nomination of four highly qualified
candidates: Don C. Bell III, Christopher P. Carvalho, Lizabeth Dunn, and Kurtis J. Wolf, for election to the board of
directors of GameStop (the "Board") at the Company's upcoming 2019
annual meeting of shareholders. Hestia Capital currently
contemplates running three of the four nominees.
Permit Enterprise and Hestia Capital are deep value investors,
have been invested in the Company since 2011 and 2012,
respectively, and do not typically engage in activism as a part of
their investment strategies. Nevertheless, the ongoing value
destruction at the Company, combined with the Board's reluctance to
directly engage with the Investor Group since Hestia Capital's
February 12, 2019 letter (link) and
the Investor Group's March 13, 2019
letter (link) has left the Investor Group with no alternative but
to pursue change via a proxy contest.
Kurt Wolf, Managing Member of
Hestia Capital said, "Our hope had been to work constructively with
the Company, and we had purposely kept our public communications as
positive as possible. We are surprised and disappointed that
during this process the Board hasn't given us more than 30 minutes
to talk with two Board Members – a conversation where it seemed the
Company's advisor did the majority of their talking. They've
otherwise referred us to speak with their legal and financial
advisors."
John C. Broderick, Portfolio
Manager of Permit Enterprise said, "As long-standing GameStop
shareholders, we see significant upside in the Company's stock
provided it focuses on managing costs, returning excess capital to
shareholders, and developing a strategy that optimizes the
Company's relationship with its core customer base. We
believe that the incoming CEO would benefit from new, independent
directors who have the knowledge and skills to help guide the
Company as it looks to catch up in a rapidly changing
industry. The proposed candidates would be excellent
additions to the Board and we hope the Company will engage with us
directly to consider them as directors."
Hestia Capital's highly qualified independent director
nominees, who will bring significant skills including: turn-around
experience, "new wave" gaming insight, retail analytics, capital
allocation, and investment knowledge, are:
Don. C. Bell III (age 50)
- Over the past five years, Don has led the successful sale of
three public companies, either as CEO or as an Independent
Director.
- Most recently, from March 2017 to
December 2018, Don was CEO and a
Director of magicJack Vocaltec, a previously NASDAQ listed consumer
VOIP service with nearly 2 million subscribers, where in under two
years at the helm he launched a new mobile service for businesses,
and sold the company to BRiley Financial for a 54% premium over the
closing share price before announcement.
- As an Independent Director and Chairman of the Special
Committee, Don led the February 2016
sale of TeleCommunication Services, a previously NASDAQ listed
company, to strategic buyer ComTech Communications, a NASDAQ listed
company, for $431 million, over 10x
LTM EBITDA.
- As an Independent Director and Member of the Special Committee,
Don led the June 2014 sale of NTS
Communications to private equity firm Tower Three Partners as their
platform acquisition in the fiber space.
- Don also served on the Board of Wireless Telecom Group,
Inc., a NYSE listed company, accomplishing a CEO-change and
strategic acquisition before he left to focus on his new role as
CEO of magicJack.
- Don is currently the Founder and Co-Owner of Bell Family Office
LLC, an investment firm in communications technology, energy and
real estate.
- Mr. Bell has previous experience as a President, SVP, or VP at
several private firms in the broadband wireless, VOIP,
digital marketing and energy industries (Trigg Partners LLC,
Tidal Research, IPC Systems, Inc. and Clearwire Technologies,
Inc.)
- He also worked at The Goldman Sachs Group, Inc. as an
Investment Banker in the Mergers and Strategic Advisory Department
and has extensive mergers experience as an investment banker,
senior executive, and public director.
- Don holds an M.B.A. from The Wharton School, University of Pennsylvania, and a B.A. from
St. John's College
Christopher P.
Carvalho (age 53)
- Chris is a Director at Roblox, a user generated gaming content
and social play "imagination platform" with almost 100 million
monthly users, and at G5 Entertainment, a STO listed developer and
publisher of mobile free-to-play games
- Mr. Carvalho also serves as a formal advisor to a dozen
companies focused on the gaming technology and/or mobile
application industries, including businesses in mobile gaming,
virtual reality, and gaming reward systems.
- From January 2010 to December of
2013, he served as COO of Kabam, a world leader of developing
entertaining, immersive games for Facebook and then mobile devices.
Revenue grew from $2M the year before
his tenure started to $360M in
2013.
- From 2008 to 2010, Chris was VP of SmartyCard, an entertainment
and rewards platform, which was a division of Gazillion
Entertainment, a gaming company
- From 1999 to 2008, he headed up Business Development at
Lucasfilm, Ltd., and eventually ran the company's online division
and its crown jewel, StarWars.com
- Mr. Carvalho previously worked for seven years at Deloitte LLP
as an auditor and consultant
Lizabeth Dunn (age
45)
- Liz is Founder and CEO of Pro4ma Inc., a SaaS company that
provides alternative data and performance management for retailers
and investors, and of Talmage Advisors, a provider of strategic
advisory services for retailers and brands
- Ms. Dunn is also an Operating Partner at Consumer Growth
Partners, LLC a private equity investment and advisory firm that
focuses on specialty retail and consumer products companies
- Previously, Liz spent fourteen years as a research analyst,
primarily in the retail space, at Macquarie Group, FBR Capital
Markets, Thomas Weisel, and Prudential
Equity Group
- Prior to her career in equity research, she worked in the
finance department at Gap Inc. and Liz
Claiborne and consumer investment banking at Bear Stearns
& Co
- Ms. Dunn appears frequently on CNBC and is regularly quoted in
national print media as a subject matter expert on the retail
sector
- Past nonprofit board experience at Flux Factory
- Liz graduated summa cum laude with a BA in Economics from
Spelman College
Kurtis J. Wolf (age
46)
- Kurt is Managing Member and Chief Investment Officer of Hestia
Capital Management LLC, a deep value hedge fund that he founded in
January 2009
- He has prior investment experience at Relational Investors and
First Q Capital
- Mr. Wolf was previously co-Founding Partner at Lemhi Ventures
LLC, a health care services focused venture capital incubator and
at Definity Health Corporation, a leading player in the
consumer-driven health care space, which was purchased by
UnitedHealth Group Inc., a NYSE listed company, for over
$300 million.
- He has five years of strategy consulting experience as a
co-Founding Partner at Lemhi Consulting, as a consultant at
Deloitte Consulting/Braxton Associates, and as a summer intern at
The Boston Consulting Group
- Mr. Wolf previously served as a Director of Edgewater
Technology, Inc., a previously NASDAQ listed company, until it
became part of Alithya Group, a NASDAQ listed company
- Kurt received his M.B.A. from the Stanford Graduate School of
Business and his B.A. from Carleton
College
About Hestia Capital
Hestia Capital is a long-term focused, deep value fund that
leverages the General Partner's expertise in competitive strategy
to identify and invest in companies which it believes are
undervalued due to transitory company and/or industry disruptions,
which are misunderstood by the investment community.
About Permit Capital Enterprise Fund
The Permit Capital Enterprise Fund, through its management
company, follows an investing philosophy that seeks to identify
securities trading at a discount to intrinsic value. The
investment approach is bottom-up and focused on the valuation of
the securities of individual issuers. The management
company's assessment of intrinsic value is based on its own
fundamental research as well as numerous sources of publicly
available information.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Hestia Capital Partners LP ("Hestia LP"), together with the
other participants named herein (collectively, the "Stockholder
Group"), intends to file a preliminary proxy statement and an
accompanying proxy card with the Securities and Exchange Commission
("SEC") to be used to solicit votes for the election of its slate
of highly-qualified director nominees at the 2019 annual meeting of
stockholders of GameStop Corp., a Delaware corporation (the "Company").
THE STOCKHOLDER GROUP STRONGLY ADVISES ALL STOCKHOLDERS OF THE
COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS,
INCLUDING A PROXY CARD, AS THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE
AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV.
IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL
PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN
AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO
THE PARTICIPANTS' PROXY SOLICITOR.
The "Participants" in the proxy solicitation are anticipated to
be Hestia LP, Hestia Capital Management, LLC ("Hestia LLC"),
Kurtis J. Wolf, Permit Capital
Enterprise Fund, L.P. ("Permit Enterprise"), Permit Capital, LLC
("Permit LLC"), Permit Capital GP, L.P. ("Permit GP"), and
John C. Broderick.
As of the date hereof, Hestia LP beneficially owns directly
160,000 shares of Class A common stock, par value $0.001 per share (the "Common Stock"), of the
Company. Hestia LLC, as the general partner of Hestia LP, may be
deemed to beneficially own the 160,000 shares of Common Stock of
the Company directly owned by Hestia LP and an additional 40,000
shares of Common Stock of the Company held in a separately managed
account. Mr. Wolf, as the Managing Member of Hestia LLC, may be
deemed to beneficially own the 160,000 shares of Common Stock of
the Company directly owned by Hestia LP and an additional 40,000
shares of Common Stock of the Company held in a separately managed
account. In addition, Mr. Wolf is deemed to beneficially own 6,900
shares of Common Stock that are beneficially owned directly by Mr.
Wolf, his wife and various trusts for the benefit of his
children.
As of the date hereof, Permit Enterprise beneficially owns
directly 1,000,000 shares of Common Stock. Permit GP, as the
general partner of Permit Enterprise, may be deemed to beneficially
own the 1,000,000 shares of Common Stock of the Company directly
owned by Permit Enterprise. Permit LLC, as the investment
manager of Permit Enterprise, may be deemed to beneficially own the
1,000,000 shares of Common Stock of the Company directly owned by
Permit Enterprise. John C.
Broderick, as an Officer of Permit Inc and Partner of Permit
LLC with sole voting and dispositive power over such shares, may be
deemed to beneficially own the 1,000,000 shares of Common Stock of
the Company directly owned by Permit Enterprise. In addition,
Mr. Broderick beneficially owns directly 104,100 shares of Common
Stock of the Company and may be deemed to beneficially own an
additional 3,825 shares of common stock of the Company that
are beneficially owned directly by his wife.
Contacts:
Kurt Wolf at 724-687-7842
John Broderick at 610-941-5025
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SOURCE Hestia Capital Management, LLC