![](/cdn/assets/images/search/clock.png)
We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Name | Symbol | Market | Type |
---|---|---|---|
Santech Holdings Limited | NASDAQ:STEC | NASDAQ | Depository Receipt |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.3142 | 0.303 | 0.339 | 76 | 13:32:14 |
NEW YORK, June 10, 2013 /PRNewswire/ -- Balch Hill Partners, L.P., a Delaware limited partnership, together with its affiliates, with approximately 9.9% of the outstanding common stock of STEC, Inc., a California corporation (the "Company"), announced today that they have delivered an open letter to shareholders of the Company.
The full text of the letter is included below:
BALCH HILL CAPITAL, LLC
2778 Green Street
San Francisco, CA 94123
June 10, 2013
Dear Fellow STEC Shareholder,
CHANGE IS NEEDED AT STEC
Vote the GOLD Proxy Card Today to Support Our Highly-Qualified and Experienced Nominees to Rebuild Shareholder Value
Balch Hill Partners, L.P., a Delaware limited partnership (together with its affiliates, "Balch Hill"), currently owns approximately 9.9% of the outstanding common stock of STEC, Inc. ("STEC" or the "Company"), making us the largest independent shareholder of the Company. We are seeking your support on the GOLD proxy card to elect our slate of three highly qualified and independent candidates - Adam Leventhal, Clark Masters and Eric Singer, to replace three of STEC's eight director nominees to the Board of Directors (the "Board") at the Company's 2013 Annual Meeting of Shareholders to be held on July 12, 2013 (the "Annual Meeting"). We are pursuing this action because since 2009, the current Board has overseen a dramatic deterioration of the Company's stock price and operating and financial performance. During this time, we believe the Board has failed to anticipate market share losses, has failed to understand the cause of such market share losses, has responded with a misguided business strategy, and has failed to hold its senior management accountable for this dismal performance. We also believe that the Board has an abysmal corporate governance culture and in particular has failed to hold accountable its current and former CEOs, Mark and Manouch Moshayedi, with respect to their questionable trading practices, even after the SEC commenced a formal enforcement action against Manouch Moshayedi for insider trading.
Given our significant stake in the Company, our only goal is to increase shareholder value. We are not seeking control of the Board. We are seeking to improve the composition of the Board by electing directors who will bring much needed accountability and transparency to the Board. Please support our efforts by signing, dating and returning your GOLD proxy card in the envelope provided.
THE BOARD MUST BE HELD ACCOUNTABLE FOR OVERSEEING THE DESTRUCTION OF OVER $1.3 BILLION OF SHAREHOLDER VALUE
On August 5, 2009, Manouch and Mark Moshayedi sold $279 million of STEC stock (or approximately 18% of the Company's outstanding stock) in a registered public offering approved by the then existing Board, at a price of $31.00 per share. Three months later, on November 3, 2009, Manouch Moshayedi revealed on the Company's earnings conference call that the end-user demand of its largest customer was lower than expected, resulting in an unexpected inventory build up at that customer. STEC's shares closed the next day at $14.14, representing a one day drop of approximately 39%, and a decline of 54% from the $31.00 per share offering price at which the Moshayedis sold their stock. On July 20, 2012, the SEC formally charged Manouch Moshayedi with insider trading in connection with his 2009 sale of stock, alleging that not only did Manouch Moshayedi know that its largest customer's true demand was lower than expected at the time of the offering, he also engaged in a fraudulent scheme to conceal the truth from the investing public. Since then, STEC's stock price has declined even further. On June 7, 2013, STEC's shares closed at $3.37, an approximately 90% decline in the stock price since the Moshayedi stock sale in August 2009, resulting in the destruction of over $1.3 Billion in shareholder value.
In addition, as shown in the chart below, not only has the stock seen a precipitous decline over the past three and a half years, STEC has significantly underperformed against the NASDAQ composite and the S&P 500, which have rallied 75.6% and 66.3%, respectively, since August 5, 2009.
(Photo: http://photos.prnewswire.com/prnh/20130610/NY28818-a )
THE BOARD MUST BE HELD ACCOUNTABLE FOR THE COMPANY'S POOR OPERATING AND FINANCIAL PERFORMANCE
The Results Speak For Themselves
The current Board and executive management team have presided over a massive loss of revenue and market share in the Company's core OEM enterprise SSD market, even as that market grows strongly.
(Photo: http://photos.prnewswire.com/prnh/20130610/NY28818-b )
(Photo: http://photos.prnewswire.com/prnh/20130610/NY28818-c )
(Photo: http://photos.prnewswire.com/prnh/20130610/NY28818-d )
In addition, STEC has suffered operating losses of over $103 million for the year ended December 31, 2012, an over 510% decline in operating income from the year earlier. Operating losses have continued in 2013, with the Company reporting an operating loss of over $25 million in the three months ended March 31, 2013.
(Photo: http://photos.prnewswire.com/prnh/20130610/NY28818-e )
The Company's cash and liquid assets are also in serious decline and we have serious concerns that the Company may burn through its cash by mid-2014.
(Photo: http://photos.prnewswire.com/prnh/20130610/NY28818-f )
We are very concerned that the Company is nearing a point of no return and believe that immediate action must be taken to stop the erosion of further shareholder value.
THIS BOARD HAS NO VIABLE PLAN TO RESTORE PROFITABILITY
We believe the Company has lost incredible market share in the wake of increasing competition because the Board first failed to anticipate such market share losses and then, in response to rising competition, decided to pursue a flawed strategy that is focused on going after its direct end users (its customer's customers) rather than trying to repair its relationships with its large storage OEM customers who have historically been the source of over 80% of STEC's SSD revenues, a strategy that Manouch Moshayedi himself once considered "not a long-term strategy."
At the same time, we believe the Company's spending has been excessive and ineffective. The Company has increased its R&D spending for years without seeing commensurate increases in revenue or income. We believe the Company's precipitous decline over the past year clearly demonstrates that the Company's strategy is not working. We believe that the only means to recapture the loss of market share and unlock the value of the Company's underlying assets is to reconstitute the Board with truly independent directors who will act in your best interests.
INDUSTRY ANALYSTS AGREE - CHANGE IS NEEDED
Consider the following:
STEC'S BOARD AND EXECUTIVE MANAGEMENT TEAM MUST BE RECONSTITUTED FOR UNDERLYING VALUE TO BE REALIZED
We are soliciting proxies to elect not only our three Nominees, but also the candidates who have been nominated by the Company other than Manouch Moshayedi, Mark Moshayedi and Matthew Witte. In addition to the reasons set forth above, we have specifically targeted these long-serving incumbent directors for the following reasons:
OUR NOMINEES HAVE THE EXPERIENCE TO IMPROVE THE PERFORMANCE OF STEC AND THEREFORE THE VALUE OF ITS STOCK
We have nominated three highly qualified director nominees - Adam Leventhal, Clark Masters and Eric Singer - who we believe are each uniquely qualified to help develop and execute a successful turnaround of STEC. Complete biographies are available in the proxy materials filed today as well as on our website, www.myproxyonline.com/STEC.
Adam Leventhal has served as the Chief Technology Officer for Delphix Corp., an agile data management company, since January 2013, and has been with Delphix since September 2010, previously serving as Director of Systems Engineering. He is a co-inventor of DTrace and the winner of several industry awards, including the top prize for the 2005 WSJ Technology Innovation Awards program, the 2005 InfoWorld Innovator program, and the USENIX STUG award in 2008. From August 2001 until August 2010, Mr. Leventhal worked in the Solaris kernel group of Sun Microsystems, Inc. and was a founding engineer in Sun's Fishworks group. He also led the flash memory technology team at Sun and later at Oracle Corporation following its acquisition of Sun in January 2010. Mr. Leventhal currently sits on the Illumos Developer Council, and has 11 patents filed or pending.
Clark Masters has over 30 years of experience in the technology industry and currently serves as Senior Vice President, HANA Cloud Computing for SAP AG, a multinational software corporation, since July 2012. From August 2010 until July 2012, Mr. Masters served as a consultant to various technology start-ups and fortune 500 companies. From December 2007 to August 2010, Mr. Masters was a member of the board of directors and Chairman of the compensation commission of SonicWALL, Inc., a network security software/appliance company with unique technology for deep packet inspection. From August 2007 to June 2010, Mr. Masters was the President and Chief Executive Officer of Astute Networks, a venture capital funded network storage provider for the telecommunications and government markets. From July 1996 to January 2007, Mr. Masters held several executive positions with Sun Microsystems, including President and Chairman of Sun Microsystems Federal Inc., a wholly owned subsidiary of Sun Microsystems, Executive Vice President of Industry Sales, and Executive Vice President of Enterprise Systems Products.
Eric Singer has served as a co-managing member of Potomac Capital Management II, L.L.C and Potomac Capital Management III, L.L.C, since March 2012 and was previously an advisor to Potomac Capital Management, L.L.C. and its related entities since May 2009. Mr. Singer is the Chairman of the Board of Sigma Designs, Inc., a public semiconductor company, and has been a Board member since August 2012. From August 2008 until its sale in February 2010, Mr. Singer served as a director of Zilog Corporation, a public semiconductor company. From July 2007 to April 2009, Mr. Singer was a senior investment analyst at Riley Investment Management and previously managed private portfolios for Alpine Resources LLC from January 2003 to July 2007.
Our nominees are well qualified, highly experienced and are committed to working as independent fiduciaries to maximize shareholder value. Each nominee's accomplishments and reputation speak for itself. Our nominees are committed to working constructively with the other members of the Board and using their experience to help effect more prudent and thoughtful decision making, thus helping management to reverse the recent significant underperformance and execute a successful strategic plan for the Company. If elected, our nominees intend to submit the following plans and proposals for enhancing shareholder value:
YOU HAVE THE OPPORTUNITY TO PROTECT YOUR INVESTMENT
By voting for our nominees, you empower our nominees, from a minority position, to re-evaluate management's plan, and any other alternatives to maximize shareholder value. They can, and will, appropriately represent the shareholder's best interests.
VOTE FOR CHANGE AT STEC -- PLEASE SIGN, DATE AND MAIL THE ENCLOSED GOLD PROXY CARD TODAY
If you have any questions, require assistance in voting your GOLD proxy card, or need additional copies of Balch Hill Partnership's proxy materials, please contact Okapi Partners at the phone numbers or email listed below.
OKAPI PARTNERS LLC
437 Madison Avenue, 28th Floor
New York, N.Y. 10022
(212) 297-0720
Call Toll-Free at: (877) 566-1922
E-mail: info@okapipartners.com
Sincerely,
BALCH HILL PARTNERS, L.P.
By: Balch Hill Capital, LLC,
its general partner
By: /s/ Simon J. Michael
Name: Simon J. Michael
Title: Manager
Contact:
Simon J. Michael
Balch Hill Partners, L.P.
(415) 474-7055
SOURCE Balch Hill Partners, L.P.
Copyright 2013 PR Newswire
1 Year Santech Chart |
1 Month Santech Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions