NTN Buzztime Inc (NYSE: NTN) shareholder Sean Gordon, who owns roughly 9 percent of the company, is making a push to join the company’s board of directors. Up to this point, NTN Buzztime has not been receptive to the idea of nominating Gordon, and the company said a proxy fight could be detrimental.
NTN Buzztime produces electronic trivia game networks for bars and restaurants, and 40 percent of its $21.3 million in annual revenue comes from Buffalo Wild Wings. In 2016, CEO Ram Krishnan predicted that NTN would grow its subscriber count to 10,000 different locations within five years, according to The San Diego Union-Tribune.
Today, NTN has just 2,730 restaurant locations, and the company lost 114 subscriber locations in 2017, Gordon said.
In the past three years, NTN stock is down 75 percent, and Gordon has argued that NTN has struggled to grow its business, has been slow to execute its strategy and is overly reliant on a single customer.
Jumping Through Hoops
NTN has said Gordon failed to meet the stockholder nomination requirements for a board seat, but Gordon said meeting those requirements are next to impossible.
“In their corporate bylaws, they have numerous hurdles set up where you have to jump through the perfect hoop that is on fire with three tigers on the other side and come out safely,” Gordon said earlier this year, adding that he has attempted to meet the requirements to the best of his ability.
NTN was notified in March that its has dropped below the $5.5-million NYSE minimum shareholder equity threshold required to maintain its listing, a warning that could set the company up for a dilutive capital raise in the near future.
On Tuesday, Gordon updated NTN shareholders on his activist cause, disclosing that he has sent a letter to the company demanding access to a list of the company’s major shareholders.
“Reviewing last year's shareholder vote, it is clear the market is sending a strong message to the board, as existing members only received roughly 50-percent support, and that was when they went unchallenged,” Gordon said in a press release.
Gordon has said that NTN needs outside help to unlock what he sees as $25 to $50 per share in shareholder value.
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