Reveals Extreme Dissatisfaction in Obvious Bad Faith Intentions of the Board and Management in Looking For to Settle with ETFS and Lion Point
Sends Out Open Letter to the Board of Directors of WisdomTree
Emphasizes Immediate Requirement for Independent Directors with Appropriate Market Experience to Assist Correct WisdomTree’s Worth Damage and Hold Management Accountable
NEW YORK CITY, Might 04, 2022 (WORLD NEWSWIRE)– ETFS Capital Limited (” ETFS”), the biggest combined owner of typical stock, $0.01 par worth (the “Common Stock”) and Series A Non-Voting Convertible Preferred Stock (the “Series A Preferred Stock”) of WisdomTree Investments, Inc. (” WisdomTree” or the “Business”) (NASDAQ: WETF), with aggregate ownership of roughly 10.4% of the exceptional Common Stock, which together with its Series A Preferred Stock would represent roughly 18.6% of the Business’s exceptional Common Stock on an as-converted basis, and Lion Point Capital, LP (together with specific of its affiliates, “Lion Point” and together with ETFS, the “Group”), which owns 3.1% of the exceptional Common Stock, revealed today their intent to submit initial proxy products for election to the Board of Directors of WisdomTree (the “Board”) at the Business’s 2022 yearly conference of shareholders and released an open letter to the Board.
The complete text of the letter sent out to WisdomTree follows:
Might 4, 2022
Dear Board Members,
As you understand, ETFS Capital Limited (” ETFS”) and Lion Point Capital, LP (together with specific of its affiliates, “Lion Point” and together with ETFS, the “Group” or “us”) presently beneficially own roughly 13.5% of the exceptional typical stock of WisdomTree Investments, Inc. (” WisdomTree” or the “Business”) and roughly 21.4% of the Business upon conversion of their Series A Non-Voting Convertible Preferred Stock, making us the Business’s biggest financial stakeholder.
Our company believe that there is significant worth to be opened at WisdomTree through functional and governance enhancements. ETFS has actually shown its clear functional and item development abilities by constructing its European and so on Company over years, which WisdomTree obtained in 2018 and which has actually been the single biggest chauffeur of WisdomTree’s property development considering that the acquisition. ETFS likewise has actually produced over one billion dollars of business worth through running ETF providers and buying the ETF and crypto ETP/digital possessions environments. Likewise, Lion Point has actually opened billions of dollars in investor worth at public and personal business through tactical modifications, functional performance enhancements and governance improvements.
We are composing this open letter to offer all WisdomTree shareholders openness about how our authentic efforts to work constructively with the Board of Directors of the Business (the “Board”) have actually been prevented by a CEO who, just hours prior to a cooperation contract was set to be signed, explained his decision to protect the status quo and not make any significant modifications to the method the Business is run. This leaves us no option however to resolve our issues straight and openly in this letter and our proxy products, which we plan to disperse in the coming weeks.
As you understand, we have actually consistently provided our support and know-how in the ETF market to WisdomTree in an effort to create worth for all shareholders. After the Business selected not to meaningfully react to these deals, on March 18, 2022 we chose 3 extremely certified directors with ETF experience for election at WisdomTree’s 2022 yearly conference of investors (the “2022 Yearly Satisfying”). Our candidates have actually gotten incredible assistance from shareholders of the Business, much of whom have actually consistently revealed to us and the Board their disappointment with the Business’s historic underperformance and their strong desire for modification at both the management and Board level.
In spite of the obvious broad and deep assistance for our candidates, consisting of from existing WisdomTree workers– an extraordinary incident in our experience– we have actually invested significant effort and time to work independently with the Board to work out and prepare a cooperation contract that our company believe would offer the Business the chance to execute much required modifications without needing to participate in a pricey and public proxy contest. Over the previous month, we have actually looked for to come to a plan that would: examine the Business’s puffed up expense structure, refocus investing far from misdirected development efforts, include much-needed ETF experience to the Board, and improve outdated governance practices. Especially, these modifications consisted of ending the Investor Rights Strategy embraced on March 14, 2022 and beginning the procedure to declassify the Board. While we feel these modifications still fall materially except finest governance practices, our companied believe that paired with product modifications to the functional efficiency of the Business over the coming months, these modifications would make up actions in the best instructions.
The Board needs to be aware that comparable plans that Lion Point and its affiliates and partners have actually carried out with public business throughout the years have actually cumulatively led to billions of dollars of investor worth produced. Nevertheless, we highly think that any such effective engagement of this sort is just feasible where the settlement of the cooperation contract is performed in great faith by the Business, leading to a high degree of mutual trust in between the Business and its shareholders. In specific, trust that the Business will then move forward and honor not simply the letter, however the spirit of the contract and work collaboratively to make the needed modifications in the interests of all stakeholders.
We are incredibly dissatisfied that regardless of our best shots to reach an arrangement with the Business over the previous month and having an arrangement in significantly last type, current actions taken by WisdomTree over the last couple of days and declarations made to us and other shareholders (both openly and independently) have actually verified to us, with no doubt, that even needs to the Business sign an arrangement with us, it appears to have no intent of honoring the spirit of any such contract and is simply looking for to silence its biggest stakeholders to preserve the status quo whilst doing little bit more than welcoming cosmetic governance modifications. In discussions that happened this previous Monday, both the CEO and the Chairman made it clear to ETFS that they have no desire or intent to embrace modifications to the operations or instructions of the Business in any significant method.
In our view, Jonathan Steinberg, a director and the CEO who has commanded several years of worth damage and below average returns, bears a big part of the obligation for the Business’s underperformance and incredible loss in market share. Our company believe his method of consistently trying to chase after the “next huge thing” (usually winding up in write-offs or divestitures), has actually triggered the Business to miss out on chances to take advantage of the money generation and development capacity of WisdomTree’s core ETF franchise. Although Mr. Steinberg’s board seat is not up for election till 2023, our company believe that the 2022 Yearly Satisfying can function as a reliable referendum on his trustworthiness as CEO and his performance history of worth damage. We and lots of other shareholders highly think that WisdomTree seriously requires a brand-new CEO who is industrial, has clear and tested ETF know-how, and can provide better execution under the oversight of a much better certified Board, one with stockholder-elected independent directors with deep and tested ETF experience.
We anticipate sharing our views on the efficiency of the Business and the CEO with WisdomTree’s shareholders, proxy advisory companies, the SEC, independent monetary consultants, the Business’s suppliers and partners, market media, and financiers in WisdomTree’s items over the coming weeks through our proxy products.
PARTICULAR INFO WORRYING THE INDIVIDUALS
ETFS Capital Limited (” ETFS Capital”) and the other Individuals (as specified listed below), plan to submit an initial proxy declaration and accompanying WHITE proxy card with the Securities and Exchange Commission (” SEC”) to be utilized to get elect the election of their slate of extremely certified director candidates at the 2022 yearly conference of shareholders of WisdomTree Investments, Inc. a Delaware corporation (the “Business”).
ETFS CAPITAL HIGHLY RECOMMENDS ALL SHAREHOLDERS OF THE BUSINESS TO READ THE PROXY DECLARATION AND OTHER PROXY PRODUCTS, INCLUDING A PROXY CARD, AS THEY APPEAR BECAUSE THEY WILL INCLUDE ESSENTIAL INFO. SUCH PROXY PRODUCTS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE INDIVIDUALS IN THIS PROXY SOLICITATION WILL SUPPLY COPIES OF THE PROXY DECLARATION WITHOUT CHARGE, WHEN AVAILABLE, UPON DEMAND. ASK FOR COPIES NEED TO BE DIRECTED TO THE INDIVIDUALS’ PROXY LAWYER.
The individuals in the proxy solicitation are prepared for to be ETFS Capital, Lion Point Master, LP (” Lion Point Master”), Lion Point Capital GP, LLC (” Lion Point GP”), Lion Point Capital, LP (” Lion Point Capital”), Lion Point Holdings GP, LLC (” Lion Point Holdings”), Graham Tuckwell, Didric Cederholm, Lynn S. Blake and Deborah Fuhr (jointly, the “Individuals”).
Since the date hereof, ETFS Capital straight beneficially owns 15,250,000 shares of typical stock, $0.01 par worth per share, of the Business (the “Common Stock”). ETFS Capital likewise straight owns 14,750 shares of the provider’s Series A Non-Voting Convertible Preferred Stock, which are convertible right away into 14,750,000 shares of Common Stock at the holder’s choice. The Certificate of Classifications for the Series A Non-Voting Convertible Preferred Stock (the “Preferred Stock”) limits ETFS Capital from transforming such Preferred Stock into Common Stock if ETFS Capital would beneficially own more than 9.99% of the Company’s exceptional Common Stock after offering impact to such conversion, and renders any conversions over such quantity space ab initio (the “Conversion Cap”). As the Chairman and managing investor of ETFS Capital, Mr. Tuckwell might be considered an indirect useful owner of the 15,250,000 shares of Common Stock straight owned by ETFS Capital and the 14,750 shares of Preferred Stock straight owned by ETFS Capital. Since the date hereof, Lion Point Master straight beneficially owns 4,521,979 shares of Common Stock. As the basic partner of Lion Point Master, Lion Point GP might be considered to beneficially own the 4,521,979 shares of Common Stock straight owned by Lion Point Master. As the financial investment supervisor of Lion Point Master, Lion Point Capital might be considered to beneficially own the 4,521,979 shares of Common Stock straight owned by Lion Point Master. As the basic partner of Lion Point Capital, Lion Point Holdings might be considered to beneficially own the 4,521,979 shares of Common Stock straight owned by Lion Point Master. As a Supervisor and Member of Lion Point Holdings, Mr. Cederholm might be considered the useful owner of the 4,521,979 shares of Common Stock owned straight by Lion Point Master.
Martyn James, (+44) 207-509-0674
Cristiano Amoruso, (212) 356-6200