FINDELL CAPITAL MANAGEMENT ISSUES OPEN LETTER TO BOARD AND SHAREHOLDERS OF OPORTUN (NASDAQ: OPRT) CALLING FOR LEADERSHIP CHANGE
Findell Capital Management, owning 9.1% of Oportun Financial (NASDAQ: OPRT), has issued an open letter demanding leadership changes and announcing plans to nominate two director candidates to replace CEO Raul Vasquez and Lead Director R. Neil Williams.
The activist investor criticizes the current board's lack of lending experience and poor performance, noting a 64% decline in share price under Williams' tenure. Findell highlights that OPRT trades at 0.75x tangible book value compared to peers at 1.5-2x, suggesting significant undervaluation.
The letter outlines specific operational improvements including:
- Reducing operating expenses by 20% to align with industry benchmarks
- Removing the voluntary 36% APR cap to increase finance charge revenue
- Using cashflows to reduce leverage
Findell Capital Management, che possiede il 9,1% di Oportun Financial (NASDAQ: OPRT), ha emesso una lettera aperta chiedendo cambiamenti nella leadership e annunciando piani per nominare due candidati al consiglio per sostituire il CEO Raul Vasquez e il Direttore Principale R. Neil Williams.
L'investitore attivista critica la mancanza di esperienza nel settore dei prestiti da parte dell'attuale consiglio e le scarse performance, evidenziando un calo del 64% del prezzo delle azioni durante il mandato di Williams. Findell sottolinea che OPRT viene scambiata a 0,75 volte il valore contabile tangibile, rispetto ai concorrenti che si attestano tra 1,5 e 2 volte, suggerendo una significativa sottovalutazione.
La lettera delinea specifici miglioramenti operativi, tra cui:
- Ridurre le spese operative del 20% per allinearsi con i benchmark del settore
- Rimuovere il limite volontario del 36% di TAEG per aumentare i ricavi da oneri finanziari
- Utilizzare i flussi di cassa per ridurre la leva finanziaria
Findell Capital Management, que posee el 9,1% de Oportun Financial (NASDAQ: OPRT), ha emitido una carta abierta exigiendo cambios en el liderazgo y anunciando planes para nominar a dos candidatos a director para reemplazar al CEO Raul Vasquez y al Director Principal R. Neil Williams.
El inversor activista critica la falta de experiencia en préstamos del actual consejo y su pobre desempeño, señalando una caída del 64% en el precio de las acciones durante el mandato de Williams. Findell destaca que OPRT se cotiza a 0,75 veces el valor contable tangible en comparación con los pares que están entre 1,5 y 2 veces, sugiriendo una subvaluación significativa.
La carta detalla mejoras operativas específicas, incluyendo:
- Reducir los gastos operativos en un 20% para alinearse con los estándares de la industria
- Eliminar el límite voluntario del 36% de TAE para aumentar los ingresos por cargos financieros
- Utilizar los flujos de efectivo para reducir el apalancamiento
Findell Capital Management는 Oportun Financial(NASDAQ: OPRT)의 9.1%를 소유하고 있으며, 리더십 변경을 요구하는 공개 서한을 발표하고 CEO Raul Vasquez와 선임 이사 R. Neil Williams를 대체할 두 명의 이사 후보를 지명할 계획을 알렸습니다.
이 액티비스트 투자자는 현재 이사회의 대출 경험 부족과 저조한 성과를 비판하며, Williams의 재임 기간 동안 주가가 64% 하락했다고 언급했습니다. Findell은 OPRT가 동종 업계의 1.5-2배에 비해 0.75배의 유동 자산 장부가치로 거래되고 있어 상당한 저평가를 받고 있다고 강조합니다.
이 서한은 다음과 같은 특정 운영 개선 사항을 설명합니다:
- 업계 기준에 맞추기 위해 운영 비용을 20% 줄이기
- 재정 수수료 수익을 늘리기 위해 자발적인 36% APR 한도 제거하기
- 현금 흐름을 사용하여 레버리지 줄이기
Findell Capital Management, qui détient 9,1 % d'Oportun Financial (NASDAQ: OPRT), a publié une lettre ouverte exigeant des changements de direction et annonçant des plans pour nommer deux candidats au conseil d'administration afin de remplacer le PDG Raul Vasquez et le Directeur Principal R. Neil Williams.
L'investisseur activiste critique le manque d'expérience en matière de prêts du conseil actuel et ses mauvaises performances, notant une baisse de 64 % du prix de l'action sous la direction de Williams. Findell souligne qu'OPRT se négocie à 0,75 fois la valeur comptable tangible, contre 1,5 à 2 fois pour ses concurrents, ce qui suggère une sous-évaluation significative.
La lettre décrit des améliorations opérationnelles spécifiques, notamment :
- Réduire les coûts d'exploitation de 20 % pour s'aligner sur les normes du secteur
- Supprimer le plafond volontaire de 36 % d'APR pour augmenter les revenus des frais financiers
- Utiliser les flux de trésorerie pour réduire l'endettement
Findell Capital Management, das 9,1% von Oportun Financial (NASDAQ: OPRT) besitzt, hat einen offenen Brief veröffentlicht, in dem es Führungswechsel fordert und Pläne ankündigt, zwei Direktorenkandidaten zu nominieren, um CEO Raul Vasquez und den leitenden Direktor R. Neil Williams zu ersetzen.
Der aktivistische Investor kritisiert den Mangel an Kreditvergabeerfahrung des aktuellen Vorstands und die schlechte Performance, da der Aktienkurs unter Williams' Amtszeit um 64% gefallen ist. Findell hebt hervor, dass OPRT mit dem 0,75-fachen des materiellen Buchwerts im Vergleich zu Wettbewerbern, die zwischen 1,5 und 2-fach handeln, gehandelt wird, was auf eine erhebliche Unterbewertung hinweist.
Der Brief skizziert spezifische betriebliche Verbesserungen, darunter:
- Reduzierung der Betriebskosten um 20%, um sich an den Branchenbenchmarks zu orientieren
- Aufhebung der freiwilligen Obergrenze von 36% APR, um die Einnahmen aus Finanzgebühren zu erhöhen
- Nutzung der Cashflows zur Reduzierung der Verschuldung
- Findell owns significant 9.1% stake, showing strong investor commitment
- Recent board additions with lending experience led to stock price improvements (up to 135%)
- Clear operational improvement plan could generate $3.75-4.75 earnings per share
- Company has strong core lending business fundamentals
- 64% decline in share price under current leadership
- Operating expenses 14.8% vs industry benchmark of 7%
- Significant undervaluation at 0.75x book value versus peers at 1.5-2x
- Previous management decisions resulted in $1 billion capital waste through acquisitions
- 20% shareholder dilution from recent financing
Announces Intent to Nominate Two Highly Qualified Director Candidates With Lending Experience to Replace CEO Raul Vasquez and Lead Director R. Neil Williams
Criticizes Inexperienced Legacy Board Members for Standing in the Way of Significant Shareholder Value Creation
Believes Oportun Is Significantly Undervalued
The full text of the letter can be found on Findell's website here and below:
To the Board of Directors and our Fellow Shareholders:
Findell Capital Management LLC (together with certain of its affiliates, "Findell," "we," "us," or "our") is the largest single shareholder of Oportun Financial Corporation ("Oportun" or the "Company") and over the last two years, we have made a concerted effort on behalf of all shareholders to improve Oportun's operations and corporate governance.
Oportun has a wonderful lending business that, if properly run and overseen, should generate strong returns across all environments. However, we believe this strong core business has been nearly wrecked by the CEO, Raul Vazquez, who ballooned the cost structure and engaged in what we see as disastrous acquisitions (wasting by our estimates
Since 2023, we have pushed Oportun to reduce costs and focus on the core lending business. The leadership did partially acquiesce to our entreaties but only after significant delay and pushback, which caused a further expensive financing and
In the spring of 2024, Oportun agreed to add two lending industry veterans that we put forth, Scott Parker and Rich Tambor. Today, Oportun is in a much-improved position, which we believe can be credited to the oversight provided by Scott and Rich.
As our standstill was expiring, we came to the Board with a simple and constructive proposition - we would forgo calling for further governance change if Neil Williams would step down as lead director and be replaced by one of the three individuals on the Board who have lending experience – Scott Parker, Rich Tambor, or Carlos Minetti (who had been separately added as an independent director in 2024). We even indicated to the Board that we would be willing to agree to a longer than usual standstill if the Board would change out the Chairs of the Credit Risk and Finance Committee and Nominating, Governance and Social Responsibility Committee.
The Board informed us that Neil would agree to step down at the end of this term but would not commit to having a new Board member with lending experience as the lead director.
As some context for shareholders:
Neil appears to be serving on the Oportun board at the behest of his friend Oportun's CEO Raul – Raul had overseen Neil as a director while Neil was CFO of Intuit Inc. ("Inuit"),2 and we question whether Neil is returning the favor. Neil's tenure has been disastrous with a
The other legacy Board members have even less experience – but given the staggered nature of the Board and poor corporate governance practices, they continue to serve on a bloated Board of 10 directors.4
- Ginny Lee worked for Neil Williams at Intuit5 (another apparent conflict of interest) and has since worked in non-profits that relate to children's education. Absent our vote, which was guaranteed pursuant to our co-operation agreement with the Company, she would not even have received a majority in the 2024 election. She has overseen a
77% decline in share price. - Jo Ann Barefoot is a podcast host, formerly working in non-profits – she failed to receive even a plurality of the vote during the 2023 election. She has overseen a decline of
77% in share price. - Louis Miramontes retired from accounting in 2014. He has overseen a share price decline of
64% . - Sandra Smith is a retired tech executive who last worked at Twilio Inc. in 2021. She has overseen a share price decline of
77% .
In our view, these individuals are not particularly qualified to be on any public company board, let alone the board of a specialty lending company. Raul's history of failures demands that Oportun have a Board comprised of individuals who have lending experience and are capable of providing oversight.
We can see what happens when Oportun brings on such members. Since the three board members with lending experience came on board in 2024, the operating and stock price performance has dramatically improved.
- Scott Parker is a former CFO at OneMain Holdings, Inc. ("OneMain Financial"), and was also a former CFO of CIT Group Inc. and Ryder System, Inc. He has overseen a share price increase of
135% . - Rich Tambor is a former Chief Risk Officer at OneMain Financial and Chief Risk Officer of retail at JPMorgan Chase & Co. He has overseen a share price increase of
95% . - Carlos Minetti is a former President of Consumer Banking and Chief Credit and Risk Officer at Discover Financial Services. He has overseen a share price increase of
56% .
It is clear to us that the legacy directors, led by Neil and Raul, will do whatever they can to maintain their positions of leadership on this bloated Board – not because it is in the shareholder interest, as clearly demonstrated by historical operating and share price performance, but because it is in their interest.6
As the largest shareholder, we cannot let them put the Company at risk by passing Board leadership to someone with no background in lending and so we will be nominating two individuals with lending and board experience for the seats currently held by the ringleaders we view as most problematic to the Company: Raul and Neil.
If either or both of our highly-qualified nominees are elected, the inexperienced legacy Board members will be outnumbered 5-4 or 6-4. As a result, a majority of the Board would be composed of the new independent directors who have lending experience and can drive further changes to improve the valuation and operations of Oportun.
In this respect, there is much work to be done.
On Valuation -
Resulting, we believe, purely from a lack of investor confidence in Oportun's leadership, Oportun trades at a massive discount to its peer group - at .75x tangible book value ("BV") while peers trade for 1.5-2x. Competent leadership that drives strong GAAP earnings can correct that.
On Operations -
Oportun's Board has allowed management to set forth ROA targets of 3
- Reducing operating expense by another
20% to be consistent with industry benchmarks – OPRT reported a14.8% Opex Ratio,7 but that is still woefully above OneMain Financial, which reported a sub7% Opex Ratio.8 - Abandoning the voluntary
36% APR cap to lift finance charge revenue by 200 to 300 basis points and open up adjacent and profitable growth markets that are being confoundingly ignored. This current cap is profoundly against the mission of this company which exists to serve this sort of underserved credit and there is no reason for this to be in place especially in light of the changed regulatory environment. - Using cashflows to reduce leverage and thereby lowering the actual cost of lending capital.
Given the roughly 1-year life of Oportun loans, these changes can happen in relatively short order and could allow a significantly higher ROA. Under such an ROA and assuming
At a conversative market multiple of 6-7X earnings, Oportun would be worth
It is clear to us that there is much that can be improved about Oportun's business performance and valuation, but what stands in the way of this are inexperienced legacy Board members acting in their own self-interest. Removing their control will, we believe, significantly help to unlock Oportun's full potential and rid the Company of the risk they have posed in the past and continue to pose to the success of Oportun.
We look forward to sharing more information about Raul and Neil, specifically, as well as the other legacy members of the Board, in the weeks to come, and to providing details regarding our own highly qualified, independent nominees.
Sincerely,
Brian Finn
CIO
Findell Capital
Contact:
Findell Capital Management, LLC
88 Pine Street, 22nd Fl.
info@findell.us
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Findell Capital Management LLC, ("Findell"), together with the other participants named herein, intends to file a preliminary proxy statement and accompanying WHITE universal proxy card with the Securities and Exchange Commission ("SEC") to be used to solicit votes for the election of Findell's slate of highly-qualified director nominees at the 2025 annual meeting of stockholders of Oportun Financial Corporation, a
FINDELL STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS, INCLUDING A PROXY CARD, AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY SOLICITOR.
The participants in the anticipated proxy solicitation are expected to be Findell, Findell Capital Partners LP ("Findell Partners"), Finn Management GP LLC ("Findell Management"), Brian Finn and the individuals to be named by Findell as director candidates at the Company, who have not yet been identified.
As of the date hereof, Findell Partners directly beneficially owns 1,961,000 shares of common stock,
1 https://fintech.global/2024/10/30/oportun-secures-235m-in-new-financing-to-bolster-capital-structure-and-profitability/
2 Raul joined the Intuit board in May 2016, while Neil served as Intuit's CFO from 2007 to January 2018.
3 Source: Bloomberg.
4 Director experience and voting results sourced from Company filings; share price data sourced from Bloomberg.
5 Ginny served in various roles at Inuit from 1999 to September 2014.
6 When challenged on their level of support from shareholders, they claimed that the dilutive warrants issued to affiliates of Neuberger Berman Specialty Finance and McLaren Harbor LLC (Castlelake) would vote with them, which has clearly given them the confidence to take on the effort and expense of a costly proxy challenge, as much of a distraction as that would be and as much shareholder capital they would waste in order to do so.
7 https://www.sec.gov/Archives/edgar/data/1538716/000153871625000007/earningsrelease4q2024.htm
8 https://www.sec.gov/Archives/edgar/data/1584207/000158420725000003/exhibit991earningsreleaseo.htm
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SOURCE Findell Capital Management, LLC
FAQ
What changes is Findell Capital demanding for Oportun (OPRT) in March 2025?
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