13.5m SGA against 23.5m in Revenue. Their executives fly all over the world at shareholders expense. I am not sure this management could run the corner taco shop.
I haven't bought MERU yet but I wanted to...It has been on my radar. With the DOW at the levels it is at and everyone screaming for a pullback this isn't the time to take a dip in MERU's pond especially with the new info...You are right...the CEO's and other head honchos shouldn't be rewarded for a poorly executed plan...if there was a plan at all!
Another drop in sales and red ink for the quarter just ended.
Exec's get spanked by losing their 1st half bonuses.
How long can MERU sustain this negative momentum?
PLXT's fundamentals: $103m TTM revenue, 57% non-GAAP gross margin, and +4% 2013 revenue growth
Meru's fundamentals: $102m TTM revenue, 65% non-GAAP gross margin, and +8% 2013 revenue growth
Avago's PLXT purchase price: $293m enterprise value, with EV / TTM revenue multiple of 2.85x.
Meru's current valuation: $68m enterprise value, with EV / TTM revenue multiple of 0.67x.
6 Months - the time period that it took for Potomac Capital to sell PLXT after it gained 3 of the 8 board seats.
5 Months - time period, and counting, that Potomac Capital has held 2 of the 7 board seats at Meru.
24.1% - number of PLXT shares held by 3 known activist shareholders (Potomac, Raging Capital Management, and Discovery Group / Mike Murphy) at the time of its sale to Avago.
25.1% - number of Meru shares currently held by 4 known activist shareholders (Potomac, Raging Capital Management, Castle Union, and Diker Management).
The daily trading volume in Meru has dried up over the past 1-2 months due to the activists owning a substantial amount of the float.
I am long. But I would have gone more long had I not noticed that over the years MERU's exec's have rewarded themselves extremely handsomely, even when our corporation which they manage for us was not performing well at all. Just not a healthy for all shareholders sign. A lingering stink for those who purchase shares, is what it is. Senior management is entrenched, it will take a lot of activism for them to loosen the reins on their personal, eternal cash cow.
What should MERU's customers take away from the ABYSMAL Balance Sheet?
IMO - MERU's customers should wise up and look to greener pastures. MERU's money losing business cannot go on forever.
agreed. castle union is correct to. this management needs a new management and board or a sale. Good to have activists. This is the perfect stock that needs an activist
Meru's Director Compensation is Egregiously High
Meru's stock began 2011 trading at $15.42/share. On April 30, 2014, the stock closed at $3.66/share. Over this period where shareholders suffered a 76% loss, Meru's directors collected over $3.8 million of total compensation. In 2013 alone, the Board received 263,157 shares of stock.
To put these numbers in perspective, $3.8 million is a full 6.2% of Meru's current enterprise value. Meru's shareholders suffered over 1% dilution in 2013 from stock given to the directors. For an even more nausea-inducing revelation, we note that management and director compensation for the last three years totals $15.7 million, a full 26% of Meru's current enterprise value.
As a major shareholder, we cannot stand idly by while the Board repeatedly fails to take the appropriate actions to maximize shareholder value. We will withhold our votes for all Board nominees except Eric Singer and Stephen Domenik at the Company's annual shareholder meeting on May 22, 2014.
Meru's Board, as historically constituted, cannot be trusted to run the Company for the benefit of shareholders. The status quo of consistent weak operating performance and egregious director compensation cannot be allowed to continue. There is one path to maximize shareholder value and the Board, in discharge of its fiduciary duties, must undertake it: the Board must immediately initiate a sale process for the Company.