Sandell RIPS Bob Paul for over-promising and under-delivering (nothing new about that)
From Business Wire, a letter from key investors to Compuware's BOD:
Robert C. Paul
Chief Executive Officer
One Campus Martius
Detroit, MI 48226-5099
cc: Board of Directors
Dear Mr. Paul,
As you know from our prior communication with you, we are shareholders of Compuware, owning approximately 2.5% of shares outstanding, and have invested because we believe the Company is substantially undervalued with over 80%+ upside in your shares. We had hoped that the Board and management would take action to realize that potential value, but are discouraged by the lack of urgency.
While we appreciate your recent comments at the Credit Suisse Technology Conference on November 28th, we challenge you to actually follow through on these opportunities. In addition to the “imminent” IPO filing of Covisint, the Company must take action to 1) rationalize its cost structure and 2) spin-off or sell its remaining businesses in order to maximize shareholder value in the most tax-efficient manner.
Management has the tendency to over-promise and under-deliver. You are already off-track in accomplishing your financial projections for FY-2013 presented nearly a year ago at your December 2011 Investor Day. The Company has been plagued by failures of execution, most recently in poor sales performance in the APM Europe segment, resulting in a reduction in FY-2013 earnings guidance and a 12% drop in the stock. Furthermore, the Company has lagged its peer group for the past five years, underperforming the S&P North American Technology-Software Index Fund and the S&P 400 Midcap Software Index by 20% and 60%, respectively.