Exposes Recent All-Expenses Paid Trip for Mr.
Stern and the Board, Despite Nano Recently Cutting 25% of Its
Workforce to Reduce Cash Burn
Questions Timing of Recent Desktop Metal Stock
Price Jump, Leading Murchinson to Believe Nano May Be in Deal Talks
with Desktop Metal and Urges the Nano Board to Seek Shareholder
Approval for any Strategic Deal
Expects Israeli Court to Issue a Ruling on the
Validity of the March 2023 EGM Vote, in Which Shareholders
Overwhelmingly Supported Murchinson’s Proposals
Pending the Outcome of Various Lawsuits,
Affirms Willingness to Continue to Spend the Time and Resources
Necessary to Replace the Board and Mr. Stern at the 2024 Annual
General Meeting
Murchinson Ltd., one of the largest shareholders of Nano
Dimension Ltd. (NASDAQ: NNDM), today issued an open letter to
fellow shareholders. The full text of the letter is below.
***
Dear Fellow Nano Shareholders,
Murchinson Ltd. (collectively with the funds it advises and/or
sub-advises, “Murchinson” or “we”), is one of the largest
shareholders of Nano Dimension Ltd. (“Nano Dimension,” “Nano,” or
the “Company”). Over the past two years, we have invested
considerable time and resources in an effort to effectuate
meaningful change at Nano to finally address the anti-shareholder
culture that has taken hold under contractless CEO Yoav Stern.1
Despite these efforts, including numerous attempts at raising these
serious issues with the Nano Board of Directors (the “Board”), the
troubling status quo remains – and Mr. Stern continues to make
decisions that we believe are illegitimate and contrary to Nano’s
and your best interests.
The list of illegitimate actions of Nano continues to grow. We
have recently learned that the “refreshed” Board (after the
addition of three new board-appointed members since the September
2023 Annual Meeting) took a company-sponsored trip to Alaska.
Notably, this lavish trip took place while a war rages in Israel
and after the Company fired a quarter of its workforce to reduce
cash burn.2 Since Nano cancelled its extraordinary general meeting
(“EGM”), at which a significant increase to the directors’
compensation was up for a vote, we view this trip as nothing more
than an attempt by Mr. Stern to buy the directors’ loyalty to
support his initiatives, all at the expense of shareholders.
Despite claiming in its response to us that the Board’s schedule
was very busy and included several “strategic meetings,” we are not
aware of any other nexus that Nano has to Alaska to justify wasting
company resources on such a seemingly unnecessary and costly Board
trip.
Mr. Stern has been attempting to acquire other 3D printing
companies, albeit unsuccessfully, for some time now.3 Although we
are not aware of any specific transaction at this time, the recent
trading frenzy in Desktop Metal, Inc. (“Desktop Metal” or “DM”)
shares, particularly on June 18, 2024, when DM shares jumped about
60% on very high volume, is in our view highly suspicious and a
potential indication that deal talks could be underway. In this
context, the lavish Alaska trip also takes on more significance,
given that Mr. Stern would need the directors’ support to push
through such a deal without shareholder support.
If this hypothesis is correct, it only further solidifies our
concerns that Mr. Stern operates the Company for his own
self-interest and demonstrates the recklessness of Nano’s
management team and the Board. Less than a year ago, Mr. Stern
spoke with nothing but disdain towards Desktop Metal in press
releases and YouTube videos when Stratasys Ltd. tried to acquire
it, stating, among other things: “Desktop Metal is a cash-burning
former special purpose acquisition company (SPAC) that has
underperformed and destroyed substantial shareholder value.”4 Mr.
Stern made clear in an email to our attorney that he would be
willing to pursue a “$599mm” acquisition for the sole purpose of
hurting us, as if such actions can possibly only hurt select
shareholders and not all of them. The entire unsettling string of
messages can be found starting at page 9 of the attachment to our
Schedule 13D/A filed on December 8, 2023.5
Trading at a negative enterprise value inherently means that, if
the Company were to acquire DM (or any company which doesn’t trade
at an enterprise value lower than Nano’s), Nano would be buying a
higher multiple target, effectively making this would-be deal value
dilutive by definition. It is the duty of the Board as
stewards of shareholder capital to reject such attempts to
destroy shareholder value. We, as one of the largest Nano
shareholders, intend to object to any deal that is not in Nano’s
and its shareholders’ best interests.
We remind you that our deep concerns are not raised in a vacuum.
The Stern legacy of bad deals started with the acquisition of
DeepCube in 2021 from two then-sitting Nano directors, who were
appointed when Mr. Stern essentially had a veto power over all
changes to the composition of the Board. This $70mm deal is now the
subject of derivative action in Israel. We believe any deal that
the current Stern-led Board may approve, especially if not subject
to a fully-informed shareholder vote (certainly in light of the
questionable legitimacy of the composition of the Board and the
pending lawsuits), would similarly become the subject of a class
action against the Company and its Board.
Importantly, the Israeli Court is expected to issue a decision
on the March 2023 EGM outcome, in which shareholders voted
overwhelmingly in support of Murchinson’s four proposals –
including the removal of Mr. Stern from the Board. You may recall
that Nano’s primary argument against recognizing the validity of
that vote (and the resulting Board changes, among others) is that
ADR holders are not shareholders of Nano, and therefore, have no
shareholder rights. This argument underscores the anti-shareholder
culture that permeates Nano under Mr. Stern’s leadership,
especially when considering the fact that all of Nano’s cash was
raised by selling ADRs and that ADRs are the only listed securities
of the Company.
Notably, the Company is expected to hold its next AGM no later
than early December 2024. Given the Stern-led Board’s refusal to
engage with us, one of its largest shareholders, in good faith over
the past two years, we see no option than to continue our fight for
shareholder-driven change. Rest assured that we are willing to
spend the time and resources we deem necessary (pending, among
other things, the outcome of the various lawsuits) to replace Board
members at the next AGM, including Mr. Stern, whose director class
is up for re-election this year.
We are highly confident that a Stern-free Board will not support
a strategic transaction that is neither put to a shareholder vote
nor in the best interest of Nano shareholders and that such Board
would conduct proper due diligence and consider all options for
unwinding any such deal.
The market has spoken loud and clear. Nano’s stock is stuck in
the low-$2’s every time the buyback is halted. If the market had
any faith at all in Mr. Stern’s ability to create value, the stock
would have been trading at least its cash value, which according to
our calculation is greater than $4 at this time. Mr. Stern’s past
empty threats that he would resign following any changes to the
Board that he doesn’t agree with, are, in our opinion, proof that
he only serves his own interests rather than those of shareholders.
It is truly confounding that the Board has continued to endorse a
CEO that has repeatedly shown he is not only self-serving, but also
lacks the integrity to follow through on his commitments. We urge
our fellow shareholders to make their views known and remind the
Board that they serve their interests – not Mr. Stern’s.
Sincerely,
Murchinson Ltd.
***
About Murchinson Founded in 2012 and based in Toronto,
Canada, Murchinson is an alternative asset management firm that
serves institutional investors, family offices and qualified
clients. The firm has extensive experience capturing the best
returning opportunities across global markets. Murchinson’s
multi-strategy approach allows it to execute investments at all
points in the market cycle with fluid allocation between
strategies. Our team targets corporate action, distressed
investing, private equity and structured finance situations,
leveraging its broad market experience with a variety of
specialized products and sophisticated hedging techniques to
deliver alpha within a risk-averse mandate. Learn more at
www.murchinsonltd.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking information within the
meaning of applicable securities laws. In general, forward-looking
information refers to disclosure about future conditions, courses
of action, and events. All statements contained in this press
release that are not clearly historical in nature or that
necessarily depend on future events are forward‐looking, and the
use of any of the words “anticipates”, “believes”, “expects”,
“intends”, “plans”, “will”, “would”, and similar expressions are
intended to identify forward-looking statements. For example, when
we say that the Israeli Court decision on the March 2023 EGM is
expected shortly, we are using a forward-looking statement. These
statements are based on current expectations of Murchinson and
currently available information. Forward-looking statements are not
guarantees of future performance, involve certain risks and
uncertainties that are difficult to predict, and are based upon
assumptions as to future events that may not prove to be accurate.
Murchinson undertakes no obligation to update publicly or revise
any forward-looking statements, whether as a result of new
information, future events, or otherwise, except as required by
applicable securities legislation.
Disclaimer The information contained or referenced herein
is for information purposes only in order to provide the views of
Murchinson and the matters which Murchinson believes to be of
concern to shareholders described herein. The information is not
tailored to specific investment objections, the financial
situations, suitability, or particular need of any specific
person(s) who may receive the information and should not be taken
as advice in considering the merits of any investment decision. The
views expressed herein represent the views and opinions of
Murchinson, whose opinions may change at any time, and which are
based on analyses of Murchinson and its advisors. Nothing in this
press release should be construed as a waiver of Murchinson's
claims and arguments, nor an admission on any arguments and claims
towards Nano.
_________________ 1 According to Nano Dimension’s latest annual
report, CEO is engaged by Nano without contract and compensation
(other than expenses) since September 2023. 2 Nano Dimension press
release dated March 21, 2024. 3 Nano Dimension press release dated
July 28, 2023; See also Nano Form 20-F filed with the U.S.
Securities and Exchange Commission on March 21, 2024. 4 Nano
Dimension press release dated September 14, 2023. 5
https://www.sec.gov/Archives/edgar/data/1643303/000092189523002733/ex991to13da1113459002_112823.pdf
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version on businesswire.com: https://www.businesswire.com/news/home/20240628753854/en/
Longacre Square Partners Ashley Areopagita
murchinson@longacresquare.com
Nano Dimension (NASDAQ:NNDM)
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