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NEW YORK – A hedge is aiming to make changes at Overstock.com, and it is warning in a public filing that it may come after some seats on the board of directors.
JAT Capital Management, which owns a 9.1% stake in the company, publicized its suggestions for Overstock in a regulartory filing with SEC yesterday afternoon.
The hedge fund reported that it had previously shared the advice with Overstock’s board in an Oct. 12 letter.
Among its recommendations:
- Marcus Lemonis – the celebrity “turnaround king” who joined Overstock’s board earlier this month – should be given an elevated position. “Executive chairman as [sic] a preferred option,” the filing noted.
- Overstock’s board should develop a business plan outlining financial objectives for the next one-month, three-month, 12-month and 36-month periods and communicate progress toward those goals regularly with investors.
- The company should overhaul its management and board compensation structure to reduce or eliminate cash compensation and to emphasize stock option participation.
- The CEO role should be offered a meaningful option package at strike prices meaningfully above current market price to align interests with shareholders.
- The company should immediately begin a strategic review of its non-core assets, particularly its Medici subsidiary, with an eye to a potential sale or spin-off.
“JAT is not traditionally an activist investor, but its filing signaled mounting frustration with the company and left open the option of pursuing strategies like running a proxy contest,” Reuters noted in its report on the JAT filing.
Thus far, Overstock.com has not issued a public reply or responded with an SEC filing of its own.
The company, which completed the acquisition of the Bed Bath & Beyond brand and its intellectual property on June 28, is scheduled to reports its third quarter results on Oct. 26.
For the first six months of the current fiscal year, ended June 30, net revenue fell 25% to $803 million. The company reported an operating loss of $12.6 million and a net loss of $83.8 million. Overstock relaunched the Bed Bath & Beyond brand on Aug. 1.
