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New York Investors Don't Buy New Business Strategy
One of Acacia Research Corp.'s largest shareholders is waging a proxy battle to oust the company's chairman and another director up for re-election.
New York-based hedge fund manager Sidus Investment Management LLC and BLR Partners LP in Houston, which own a combined 4.1% of outstanding Acacia shares, plans to replace G. Louis Graziadio, who became chairman in 2016, and Frank Walsh, who took a board role the same year, at Acacia's annual shareholder meeting.
The activist investors have nominated Clifford Press and Alfred Tobia to replace them.
Acacia, as of press time, hadn't announced the meeting date.
Press, a co-owner of New York investment advisory firm Oliver Press Partners LLC, is a director at several public companies, including Stewart Information Services Corp., Quantum Corp. and Drive Shack Inc.
Tobia, who co-founded Sidus and serves as its equity portfolio manager, is a director at San Antonio-based marketing agency Harte Hanks Inc.
Sidus and BLR in a March 20 letter to Acacia shareholders laid out several issues with the firm's governance and shifting business model since Graziadio's appointment as chairman, a period during which Acacia's share price has dropped 38% to $3.35, with a recent market cap of about $169 million.
"The market is unimpressed by the company's prospects under Mr. Graziadio's leadership and we believe that he must be held accountable for the destruction of stockholder value," the letter said.
The new model, focused on investment in high-growth and potentially game-changing technologies in artificial intelligence and machine learning, robotics and blockchain applications, deviated from Acacia's core business of monetizing patents primarily through litigation, an increasingly costly and challenging endeavor due...