Roumell Asset Management, which owns an about 4.5% stake in ZAGG, strongly disagrees with the board's decision to continue as an independent public company as the market is significantly undervaluing ZAGG. According to the activist investor, this is likely to persist due to the lack of credibility of the company's management, which repeatedly failed to hit financial objectives despite ZAGG's "market-leading" products.
"ZAGG is a premier franchise known worldwide for its quality products and we have no doubt that the true value of ZAGG is well in excess of the current stock price," wrote Roumell Asset Management. "However, we believe the public market will not provide a valuation that approximates its take-out value anytime soon."
In the meantime, Roumell Asset Management called for ZAGG's executives to reduce their compensation by at least one-third and for board fees to be paid in stock, to align their financial interests with the company's shareholders.
ZAGG shares were down to a 10-year low of $2.22.
Price: 2.25, Change: -0.39, Percent Change: -14.85
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