Activist Highlights #1 | Stadium Capital Letter to Sleep Number 9/13/2023

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Activist

Marc & Ari

5 episodes

2 weeks ago

Learn from history's greatest shareholder activists and investors. We study cases of shareholder activism and learn about successful activist strategies when dealing with an entrenched management or board. “You have to understand how the system is structured. The guy who gets to the top of the big corporations is, with notable exceptions, a political animal. He’s a survivor. He knows how to watch his back. That means hiring a number two guy that’s not as smart as him. That works for the CEO because he’s never threatened by his second in command “But think what that does to our corporates..."

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Investing

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Activist Highlights #1 | Stadium Capital Letter to Sleep Number 9/13/2023

Activist

38 minutes 4 seconds

2 years ago

Activist Highlights #1 | Stadium Capital Letter to Sleep Number 9/13/2023

In this Activist Highlights episode, we dive into Stadium Capital’s recent 13D filing (dated 9/13/2023) regarding Sleep Number (SNBR).

We provide some background on Stadium Capital and Alex Seaver.

We review the activist letter and break down the key points regarding how they potentially are threatening a proxy fight and requesting a seat on the board.

We also shed light on Sleep Number Managment’s underperformance including instances of aggressive leveraged stock buybacks at significantly inflated prices.

Despite poor performance, management and the board is extremely well compensated and continues to adjust earnings targets as they miss them over and over again.

We also discuss why Sleep Number is a solid business, and how focusing on reducing R&D and other costs can push some of the mouth watering 57% gross margin to the bottom line.

Join us as we explore the world of shareholder activism, delve into activist investing, and navigate the regulatory nuances of 13D filings through a thoughtful SEC disclosure analysis.