Yahoo Finance David Kanen Writes Letter to PRTS Board Reiterating Poor Stock Performance. Kanen declares he will be voting against CEO David Meniane on the upcoming proxy, and demands the board conduct an investigation into Mr. Meniane’s behavior, and conduct a CEO search based on awful stock performance since he’s been CEO
CORAL SPRING, Fla., April 25, 2023 (GLOBE NEWSWIRE) --
Dear Mr. Meniane and PRTS Board,
Despite your requests for “private” dialogue we cannot remain silent. Our public communication is justified due to your lack of action and lip service only posture. We will be voting our shares against David Meniane for the following reasons:
Since both founder Mehran Nia and myself have left the board, our stock has lost over $500 million dollars of value. It has declined from a peak of over $22 to approximately $5. From peak to current levels, that is an approximate $935 million dollar decline.
Revenue growth has decelerated over the last 8 quarters from 64.9% to 11.8%.
Since Mr. Meniane has been CEO, revenue growth is just barely above double digits at 11.8% in the latest quarter. Even more concerning, EBITDA as a % of revenue was only 1.35% vs. 1.88% a year ago, illustrating that our company is going backwards under the leadership of Mr. Meniane. Then, the most recent guidance given by Mr. Meniane calls for meager single digit growth.
Mr. Meniane is disconnected from the ultimate scorecard and what we believe is a morale problem at the company. Under his leadership he recently stated in the last earnings call: “the key to our success lies in our culture and our commitment to shareholders. We’ve built an incredible business centered around positive unit economics, repeat customers, and a laser focus on financial discipline, all with the intention of maximizing long-term value.”
In regards to culture, we strongly disagree with Mr. Meniane. We believe he was handed an excellent culture and company. Since becoming CEO, in our opinion, he is doing great harm. Although we are not insiders, we can only go by publicly available information and testimony of former employees including “Glassdoor”. Please visit the following link: PRTS Employee Reviews. As you can see, over the last year, while Mr. Meniane has been CEO, the number of employees who disapprove of his leadership specifically has gone up to 6! This is out of only 12 months and 29 reviews. That compares to a total of 5 in the previous 28 months and out of 69 reviews on the employee review platform. There are already more people disapproving of Mr. Meniane within the company in his first year than in the previous two-plus years before him. We have also heard anecdotal stories of Mr. Meniane behaving in a threatening, dictatorial manner towards certain employees, particularly those exiting. If this is true, WE DO NOT SUPPORT DICTATORS!
Therefore, we are calling upon the board to create a “safe zone” and process, whereby employees that feel threatened with retribution can “safely” express their concerns without fear. This is the only way that the board can get to the bottom of this and determine if Mr. Meniane should be terminated with cause.
Regardless of the outcome, the financial results and stock price performance alone are sufficient for the board to conduct a CEO search immediately.
In conclusion, we look forward to the board taking action and making a shift towards value creation, and reversing the poor outcomes under Mr. Meniane’s CEO tenure.
Sincerely,
David Kanen
President/CEO
Kanen Wealth Management
