Selina Management Reaffirms Its Confidence In Its Strategy and Highlights Alignment with Shareholders Through Equity Ownership in the Company
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Insights
When executive management of a publicly-traded company like Selina Hospitality PLC increases their equity stake, it often sends a positive signal to the market regarding their confidence in the company's future. The conversion of cash compensation to shares suggests that the leadership team has a vested interest in the company's success, which may align their interests more closely with those of the shareholders. This action could potentially mitigate concerns about the recent stock decline, indicating that the decline may not reflect the company's fundamentals.
However, the impact of such insider transactions on the stock market can be complex. While it may reassure some investors, others may scrutinize the timing and motivation behind these transactions. The stock's performance will continue to depend on a range of factors, including the company's financial health, market conditions and investor sentiment. Therefore, while the management's investment is a positive development, it is just one of many factors that investors will consider.
The disclosure of the management team's increased investment in Selina is an attempt to reaffirm the company's strategy and long-term growth prospects. From a financial standpoint, the conversion of half a million dollars of cash compensation into common stock is not only a sign of confidence but also a strategic move to better align executive compensation with performance. This can be appealing to investors who favor companies with 'skin in the game' leadership.
Furthermore, the clarification regarding Form 144 disclosures is critical. Automatic sell-to-cover transactions are a standard method for executives to handle tax obligations arising from vested equity awards and their distinction from discretionary open market sales is an important one. It suggests that the recent stock sales by certain executives are not necessarily indicative of a lack of confidence in the company's future.
The decision by Selina's executives to opt for equity compensation over fixed cash compensation is indicative of a corporate governance approach that favors long-term value creation. This strategy can be beneficial for shareholders as it ensures that the interests of the executives are more closely aligned with the company's performance. It's a governance practice that is often viewed favorably by investors looking for signs of responsible management.
However, it's important to assess the broader implications of such decisions. If the company does not perform well, the value of the equity compensation could decrease, potentially leading to dissatisfaction and turnover within the executive team. In addition, while a 6.5% stake by the co-founders is significant, it must be evaluated in the context of total insider ownership and the company's overall governance structure.
NEW YORK, April 09, 2024 (GLOBE NEWSWIRE) -- Selina Hospitality PLC ("Selina"; NASDAQ: SLNA), a global lifestyle and experiential hospitality company catering to millennial and Gen Z travelers, announces that its management team reaffirms its confidence in its strategy as reflected in recent increased equity levels of members of its executive team. These investments underscore management’s confidence in the company's vision and long-term prospects and are in alignment with its current shareholder base.
Led by CEO and co-founder Rafael Museri, Chief Growth Officer and co-founder Daniel Rudasevski, and recently promoted COO Gadi Hassin, the executive team has collectively demonstrated their dedication by making substantial investments into Selina. Most recently, the executive team converted approximately
Co-Founders Museri and Rudasevski both have significant positions in Selina. As of April 8, together they have a deemed beneficial interest in approximately 29.2 million ordinary shares of the company, either directly or indirectly through their investment entities. This represents approximately
“It is important for us to remind our financial community that we are fully aligned with our shareholders. We are as disappointed as they are in the recent stock decline. However, we do not believe it is based on the fundamentals of the business,” stated Mr. Museri. “We continue to move forward with the execution of our strategy and our path to profitability, as we believe this will generate the most shareholder value.”
The Company also clarifies that the recent Form 144 disclosures filed on behalf of certain executives reflect stock sales that were made via automatic sell-to-cover tax withholding transactions following the vesting of certain equity awards held by the executives. None of those management transactions were discretionary open market sales by the executives.
In addition, as another indication of aligned interests, several Selina executives have agreed to reduced levels of fixed cash compensation in exchange for equity compensation, demonstrating the leadership's dedication to creating value for shareholders over the long term.
Selina remains steadfast in its commitment to delivering value to its shareholders, customers, and stakeholders.
About Selina Hospitality PLC
Selina Hospitality PLC (NASDAQ: SLNA) is a global hospitality brand built to address the needs of millennial and Gen Z travelers, blending beautifully designed accommodation with coworking, recreation, wellness, and local experiences. Founded in 2014 and custom-built for today’s nomadic traveler, Selina provides guests with a global infrastructure to seamlessly travel and work abroad. Each Selina property is designed in partnership with local artists, creators, and tastemakers, breathing new life into existing buildings in interesting locations in 24 countries on six continents – from urban cities to remote beaches and jungles. To learn more, visit Selina.com or follow Selina on X, Instagram, Facebook, Linkedin or YouTube.
Contacts
Media: press@selina.com
Investor: investors@selina.com
1The calculations of the combined beneficial ownership interest of Messrs. Museri and Rudasevski and the outstanding share capital represented by such interest take into account (i) ordinary shares held by Kibbutz Holding S.a.r.l. (“Kibbutz”), in which Messrs. Museri and Rudasevski together hold a controlling interest and for which they serve as directors, (ii) ordinary shares held by Dekel Development Holding, SARL, which is wholly owned by Kibbutz, (iii) warrants held by Kibbutz that are exercisable into ordinary shares of Selina, (iv) shares held by Mr. Museri and Mr. Rudasevski personally through the company’s 2022 Omnibus Equity Incentive Plan, (v) vested, but undistributed restricted stock units, and vested, but unexercised options held by Mr. Museri and Mr. Rudasevski, and (vi) unvested restricted stock units held by Mr. Museri and Mr. Rudasevski that are due to vest within the following 60 days. The number of ordinary shares outstanding as of April 8, 2024, used as part of the calculations, is 442,170,291 ordinary shares.
FAQ
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