Daktronics Inc - DAKT STOCK NEWS

Alta Fox Capital Management, Daktronics' (NASDAQ: DAKT) largest shareholder with 11.7% ownership, has issued a statement addressing what it calls misleading claims from Daktronics regarding negotiations over Alta Fox's convertible note. The investment firm disputes Daktronics' version of events, stating they never intended to sell their entire stake but were open to retiring a portion in exchange for governance reforms.

Alta Fox claims Daktronics did not offer fair market value for their shares or propose meaningful governance improvements. In response to rejected offers, Daktronics called a Special Meeting to reincorporate in Delaware and eliminate cumulative voting, which Alta Fox views as an attempt to diminish their influence. The firm maintains that Daktronics is undervalued and criticizes the board and management for owning less than 2.5% of the company while being net sellers.

Daktronics (NASDAQ:DAKT) has responded to recent litigation and public comments from Alta Fox Capital Management regarding the company's proposed reincorporation to Delaware. The company's stock has generated over 23% annualized returns over five years and increased by more than 110% in the past twelve months.

The proposed reincorporation aims to adopt modern governance features, including majority voting for uncontested director elections and proxy access. Daktronics claims Alta Fox has been seeking to sell its equity stake while publicly claiming long-term commitment, demanding premium prices for its convertible note and shares above market value.

The company states Alta Fox demanded above-market prices, expense reimbursements since 2022, litigation release fees, and interest payments approximately four times the actual amount owed. Daktronics intends to defend against Alta Fox's lawsuit and proceed with the reincorporation plan, which would align its voting standards with over 90% of U.S. public companies.

Alta Fox Capital Management, Daktronics' (NASDAQ: DAKT) largest shareholder with 11.7% ownership, has filed a federal lawsuit against the company and its CEO Reece A. Kurtenbach. The lawsuit challenges Daktronics' proposal to reincorporate from South Dakota to Delaware, which would eliminate cumulative voting rights.

Alta Fox believes this move is an entrenchment maneuver designed to protect underperforming directors and weaken shareholder rights. The timing of the reincorporation proposal comes after Alta Fox's announced plan to nominate new director candidates. The activist investor has filed a preliminary proxy statement to solicit votes AGAINST the reincorporation proposal at the upcoming Special Meeting.

Alta Fox criticizes the company's governance practices, including staggered director elections, a poison pill, and a combined Chair-CEO role. If successful in their lawsuit, Alta Fox plans to call a special meeting to declassify the Board, remove the poison pill, and elect new independent directors.

Breach Inlet Capital, a top 10 shareholder owning 2.0% of Daktronics (NASDAQ: DAKT), announced its intention to vote against the company's proposed reincorporation from South Dakota to Delaware. The investment firm argues that the Board's primary motive for reincorporation is to eliminate cumulative voting, a right that enables minority shareholders to gain Board representation more easily.

The firm criticizes the Board for attempting to remove this pro-shareholder right while maintaining the classified Board structure. According to a preliminary proxy statement by Alta Fox Capital Management, company advisors allegedly threatened to remove cumulative voting if a negotiated resolution couldn't be reached promptly.

Breach Inlet Capital believes eliminating cumulative voting would make it more difficult for shareholders to reconstitute the Board with candidates committed to acting in shareholders' best interests.

Anchor Capital Advisors, a shareholder of Daktronics (NASDAQ: DAKT), has expressed support for governance improvements at the company. The firm advocates for adding shareholder-supported board members to address Daktronics' undervaluation and implementing a de-classified board structure to enhance corporate governance.

Anchor Capital recommends that Daktronics maintain its South Dakota incorporation for now, suggesting a potential future move to Delaware. They argue that immediate reincorporation could weaken non-insider shareholder influence and impede positive changes supported by major shareholders. The firm believes these proposed governance enhancements are important for Daktronics' long-term success.

Daktronics (NASDAQ:DAKT) has filed a preliminary proxy statement for a special meeting of shareholders to vote on reincorporating from South Dakota to Delaware. The company emphasizes this change will only affect its legal domicile while maintaining its headquarters and operations in South Dakota.

The reincorporation aims to enhance corporate governance by implementing a majority voting standard for uncontested director elections, proxy access, and a conventional statutory voting system. These changes would ensure majority shareholders can elect a cohesive Board while preventing minority groups from selecting directors for particular interests.

As one of South Dakota's largest employers with over half of its nearly 3,000 employees based in the state, Daktronics reaffirms its commitment to maintaining its strong presence and continuing investments in South Dakota communities, where it has operated since its founding in 1968.

Cree LED, a Penguin Solutions brand (PENG), and Daktronics (DAKT) have established a multi-year, global patent license agreement effective December 2024. The agreement grants Daktronics access to Cree LED's patented technology, with exceptions.

Cree LED, with over 35 years of expertise in LED die and packaging technology, maintains a substantial intellectual property portfolio focused on LED display applications. The agreement allows Daktronics, a leader in large-scale LED displays, to utilize these patents without concern for potential patent disputes during the agreement term.

While specific licensing terms remain confidential, the partnership enables Daktronics to confidently deliver state-of-the-art LED display systems to the market.

Breach Inlet Capital, a top 10 shareholder of Daktronics (DAKT) with nearly 2% ownership, has issued a public letter expressing concerns about the company's board and supporting fellow shareholder Alta Fox. The letter criticizes several issues including: delayed CFO search announcement following a going concern notice, late disclosure of consultant hiring, and vague financial targets. The firm points out that management and board members have sold approximately $19 million in stock (35% of holdings) in the past six months.

Breach Inlet Capital proposes immediate changes including board declassification, appointment of four shareholder-nominated directors, separation of CEO and Chairman roles, and restructuring of executive compensation. The letter also highlights the board's rejection of Glen Herrick, a qualified candidate for both board and CFO positions, suggesting potential entrenchment issues.

Alta Fox Capital Management, Daktronics' (NASDAQ: DAKT) largest shareholder with 11.7% ownership, has issued a statement addressing what they describe as misleading claims from the company. Alta Fox clarifies their position regarding their convertible promissory note and reiterates their belief that Daktronics can achieve approximately $40 per share and ~100% upside by FY28.

The investor criticizes Daktronics' governance practices, including a staggered Board, poison pill, and alleged nepotism. Alta Fox's equity position is worth nearly $114 million once converted, representing about 5 times the shares held by the entire Board. The firm plans to nominate independent director candidates and emphasizes their right to call a special shareholder meeting.