One of Zoran’s largest shareholders thinks the company’s shares...
One of Zoran’s largest shareholders thinks the company’s shares are “deeply undervalued” and wants to replace its board with its own slate of directors, the shareholder, Ramius Value and Opportunity Advisors, told Zoran CEO Levy Gerzberg in a letter Monday.…
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Copies were filed at the SEC. Ramius, which owns 8.3 percent of Zoran’s outstanding shares, said it blames the company’s “long-term fundamental underperformance and repeated missed expectations for revenue growth and profitability” for the stock’s performance. The letter said: “Shareholders have grown increasingly frustrated with the current direction and leadership of Zoran.” Changes in the board “must be implemented without delay to restore credibility and proper guidance in order to improve performance at Zoran,” the letter said. For example, Zoran’s “long-term objectives in the DTV business are unclear and misguided,” it said. “The DTV business is highly competitive, consisting of many low-cost Asian based suppliers fighting for market share and in some cases selling products at, or even below, cost.” Yet “management’s proposed solution to the current issues facing the DTV business is to continue to invest heavily in R&D and Sales and Marketing to attempt to recapture market share losses and improve gross margins by penetrating the tier-one market and de-emphasizing the tier-two market. We believe that this is an ill-advised strategy that will not succeed.” Zoran shares closed 4.3 percent higher at $8.03 in Monday trading. Zoran executives didn’t respond right away to requests for comment.