Harvest Capital Calls for Leadership Overhaul at Green Dot

Harvest Capital Strategies LLC said Monday it is seeking immediate leadership and board changes at Green Dot Corp., citing "continued mismanagement and value destruction" at the company where it holds a 6.2% stake.

Pasadena, Calif.-based Green Dot issues prepaid MasterCard and Visa cards at retail stores including CVS Health Corp. and Walgreens Boots Alliance Inc.

In a letter to the Green Dot board, Harvest Capital said it aims to invest in "misunderstood businesses with capable, well-aligned fiduciaries" and that "Green Dot is the only company with leadership and execution so problematic that we are compelled to approach the board."

A Green Dot spokesperson wasn't immediately available for comment.

San Francisco-based Harvest Capital said it has worked privately with the board over the past year but last month it became clear no leadership changes were under way. The firm points to missed consensus estimates or lowered revenue guidance in each of the past eight quarters, as well as missed annual revenue targets in three of the past four years.

The letter calls for the immediate removal of Chief Executive Steve Streit, whom the firm links as a constant factor in the company's woes.

"Mr. Streit's repeated failure to achieve both short- and long-term targets is a symptom of a deeper and more fundamental problem. He struggles with the basic tenants of running a larger company and lacks the ability to execute on his strategic vision," the firm said.

Harvest Capital also points to senior leadership turnover as "symptomatic of an unhealthy culture." Since its initial public offering in 2010, all but one named executive officer has resigned, according to the firm.

The firm said it is willing to work with the board on its turnaround proposals but said "activities within our rights as shareholders may include a proxy contest at the 2016 annual meeting."

Shares of Green Dot, which have fallen 15% over the past 12 months, were inactive premarket.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

January 25, 2016 09:05 ET (14:05 GMT)

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