WisdomTree, Inc. (NYSE: WT) (“WisdomTree” or the “Company”), a
global financial innovator, today sent a letter to Graham Tuckwell,
chairman of ETFS Capital Limited, from its Board of Directors
(“Board”) in response to a February 20, 2024 letter from Mr.
Tuckwell to the Board. Mr. Tuckwell sent the letter to the Board
following a meeting Mr. Tuckwell had with two of WisdomTree’s Board
members on February 13, 2024. In an effort to be transparent with
all of its stockholders, WisdomTree is publicly disclosing this
letter from the Board. Given the nature of the proposals contained
in Mr. Tuckwell’s letter and the Company’s focus on ongoing
stockholder communications and engagement, the Board believes that
it is important to make its response to Mr. Tuckwell’s letter
publicly available.
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No stockholder action is required at this time. A full copy of
the letter follows:
February 27, 2024 Mr. Graham Tuckwell Chairman ETFS Capital
Limited
Dear Graham,
On behalf of the Board of Directors of WisdomTree, Inc., we are
writing in response to your February 20, 2024 letter to the Board,
in which you asked the Board to consider the following proposals:
(1) replacing Jonathan Steinberg, our CEO; (2) raising outside
money for WisdomTree Prime; and (3) appointing an investment bank
to review strategic alternatives for the Company. You also proposed
that the Board immediately form a special committee of independent
directors and publicly announce an expeditious strategic review of
the entire business.
After having carefully reviewed your proposals, we have
unanimously concluded not to implement them as we believe that
taking any of these actions would undermine our long-term growth
strategy and value-creation initiatives.
This Board believes that if we were to implement your proposals,
it would jeopardize WisdomTree’s success and harm the Company and
its stockholders.
- First, Mr. Steinberg has the unanimous support of the Board,
and, importantly, our clients, employees and partners have
overwhelming trust and confidence in his abilities and vision for
the Company. That confidence has been validated by our
stockholders, as evidenced by the fact that Mr. Steinberg received
approximately 86% of the shares voted at the 2023 Annual Meeting of
Stockholders, which represented more votes than nearly all other
director nominees. This trust was further evidenced by the Board’s
recent unanimous approval of both the 2024 annual budget and 2023
performance compensation.
- Second, seeking to obtain third-party financing for our digital
assets business is unnecessary. We have conviction in our digital
assets strategy and believe it is an appropriate use of capital.
Furthermore, the Board and management believe that the digital
assets strategy is highly integrated with the Company’s overall
strategy and critical to the Company’s future success.
- Third, given the Company’s current trajectory and the progress
demonstrated on various value-creation initiatives, the Board does
not believe that appointing an investment bank to review strategic
alternatives, or forming a special committee of independent
directors and publicly announcing an expeditious strategic review
of the entire business, is in the best interests of the Company and
its stockholders.
The Board recognizes its fiduciary duties to stockholders and is
focused on stockholder value creation. The Board continually
monitors the Company’s business and strategies, as well as
developments in the business environment in which the Company
operates. The Board will continue to carefully evaluate any
proposals for strategic transactions that it receives, in line with
its fiduciary duties and commitment to acting in the best interests
of all of the Company’s stockholders.
We have engaged with you in good faith and accommodated many of
your requests over the past two years: (1) we added two new Board
members you proposed, (2) declassified our Board, and (3) formed a
special committee of the Board to review the cost structure,
margins and strategy of our entire business, including digital
assets. After a thorough and deliberate review, the special
committee found no reason to change our course and our Board
unanimously reaffirmed support for our CEO and our strategy and
plan for stockholder value creation.
In 2023, we successfully defended against your proxy contest at
our Annual Meeting of Stockholders, in which you tried to replace
three of our Board nominees with three of your own, including
yourself. Our stockholders voted to elect five of our six nominees,
while rejecting your own candidacy, and approved a stockholder
rights plan to protect our Company from your activism campaign.
We are highly focused on corporate governance and, over the past
three years, have substantially refreshed our Board, adding key
additional experience and perspective, and rotated all committee
chair positions. We have a diverse, independent and highly
qualified Board that oversees WisdomTree’s strategy and performance
with the best interests of all stockholders in mind. Currently, two
of our nine Board members were nominated by you in connection with
your 2022 and 2023 activism campaigns, respectively. One sits on
all three Board committees and chairs the Audit Committee and the
other, who joined the Board in June 2023, is an active member of
the Nominating and Governance Committee.
We believe that your letter presents an inaccurate picture of
WisdomTree’s performance, strategy and value proposition.
For example, while you claim that we should provide more
visibility into current initiatives, we publicly provide detailed
KPIs and set the highest standard for shareholder transparency.
Your claim that management’s approach to shareholder communications
does not resonate with investors is contradicted by the fact that,
as the chart attached illustrates, WisdomTree’s total stockholder
return (TSR) has significantly outperformed its relevant peers over
each of the most recent 1, 2, 3 and 4-year time periods.
WisdomTree’s stock price also has surpassed its 52-week high, and
nears its 5-year high.
In addition, you claim in your letter that value has been
destroyed since the Company acquired ETF Securities in 2018, which
is inaccurate. We acquired the European ETP business of ETF
Securities to diversify our products, expand our markets and
increase our scale and profitability. The acquisition has been very
beneficial for WisdomTree, as it boosted our earnings and cash flow
and added value to our stockholders. We also used WisdomTree stock
as a portion of the consideration in the transaction when the
shares were trading at a premium, which was a smart and strategic
use of our capital that benefitted all other WisdomTree
stockholders.
We continue to demonstrate strong financial and operational
performance, outperforming our peers and the market in terms of
organic AUM growth, margin expansion and stock price. We also have
invested in innovation and technology, launching new products and
services that leverage our expertise in tokenization and
blockchain-enabled finance. These initiatives have enhanced our
competitive advantage and position us for future growth.
We have a proven track record of delivering value to our
stockholders, and we have a clear and compelling strategy for the
future. The Board continues to unanimously support our strategy and
CEO, and recognizes Mr. Steinberg’s strong performance. We are
confident that we have the right leadership, the right vision and
the right capabilities to continue to grow and succeed in the
evolving financial services industry. We remain focused on
executing our strategy and delivering superior results for all
stockholders.
We urge you to respect the will of our stockholders and the
judgment of our Board. The WisdomTree Board and management are
committed to constructive dialogue with our stockholders that
furthers our goal of creating stockholder value, and we remain open
to continuing to engage in an open, constructive dialogue with you
regarding the Company.
Sincerely, The Board of Directors of WisdomTree, Inc.
Win Neuger Chair of the Board
About WisdomTree
WisdomTree is a global financial innovator, offering a
well-diversified suite of exchange-traded products (ETPs), models,
solutions and products leveraging blockchain-enabled technology. We
empower investors and consumers to shape their future and support
financial professionals to better serve their clients and grow
their businesses. WisdomTree is leveraging the latest financial
infrastructure to create products that provide access, transparency
and an enhanced user experience. Building on our heritage of
innovation, we are also developing and have launched
next-generation digital products, services and structures,
including digital or blockchain-enabled mutual funds and tokenized
assets, as well as our blockchain-native digital wallet, WisdomTree
Prime™.*
*The WisdomTree Prime digital wallet and digital asset services
are made available through WisdomTree Digital Movement, Inc. (NMLS
ID: 2372500) in select U.S. jurisdictions and may be limited where
prohibited by law. Visit https://www.wisdomtreeprime.com or the
WisdomTree Prime mobile app for more information.
WisdomTree currently has approximately $102.3 billion in assets
under management globally.
For more information about WisdomTree and WisdomTree Prime™,
visit: https://www.wisdomtree.com.
Please visit us on X, formerly known as Twitter, at
@WisdomTreeNews.
WisdomTree® is the marketing name for WisdomTree, Inc. and its
subsidiaries worldwide.
Cautionary Statement Regarding Forward-Looking
Statements
This press release may contain a number of “forward-looking
statements” as defined in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are based on
WisdomTree’s management’s current expectations, estimates,
projections and beliefs, as well as a number of assumptions
concerning future events. These forward-looking statements are not
guarantees of future performance, conditions or results, and
involve a number of known and unknown risks, uncertainties,
assumptions and other important factors, many of which are outside
WisdomTree’s management’s control, that could cause actual results
to differ materially from the results discussed in the
forward-looking statements. Forward-looking statements in this
press release may include statements relating to WisdomTree’s
strategy, its digital assets business, its value creation
initiatives and its overall trajectory. Forward-looking statements
included in this release speak only as of the date of this release.
WisdomTree does not undertake any obligation to update its
forward-looking statements to reflect events or circumstances after
the date of this release except as may be required by the federal
securities laws.
Category: Business Update
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Investor Relations WisdomTree, Inc. Jeremy Campbell
+1.646.522.2602 Jeremy.Campbell@wisdomtree.com
Media Relations WisdomTree, Inc. Jessica Zaloom
+1.917.267.3735 jzaloom@wisdomtree.com /
wisdomtree@fullyvested.com
H/Advisors Abernathy Tom Johnson / Dana Gorman +1.212.371.5999
tom.johnson@h-advisors.global / dana.gorman@h-advisors.global
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