Breach Inlet Capital Management, LLC, a top 10 shareholder of PROG Holdings, Inc. with approximately 2% ownership, issued an open letter urging the company's Board of Directors to launch an immediate strategic review process. The investment firm expressed concerns over significant value destruction and the company's underperformance.
Breach Inlet Capital highlighted that PROG Holdings' share price has fallen approximately 55% since its spin-off on November 30, 2020, while a self-selected peer group has risen by an average of approximately 50% over the same period. The firm also noted that Progressive Leasing's EBITDA is projected to be approximately 30% below its 2020 level by 2025.
The activist investor criticized executive compensation, stating that the combined total compensation of the CEO and CFO rose by over 86% from 2021 to 2024, despite a roughly 30% drop in the company's EBITDA during that time. Breach Inlet Capital suggested options such as selling the entire company or individual business units like Progressive Leasing and Four Technologies, and then repurchasing shares, estimating a potential value of $45 to $65 per share in a sale scenario.
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