Daktronics, Inc. has responded to recent public statements from Alta Fox Capital Management, LLC regarding the company's financial dealings and debt repayment. In May 2023, Daktronics sold $25 million of convertible debt to Alta Fox, which at the time stated on social media that Daktronics’ stock “could triple” to approximately $16.23 per share. Since then, the company has engaged extensively with Alta Fox, including regarding their desire to accelerate the company’s repayment of the debt.
Alta Fox demanded that the company retire the convertible debt at a price more than three times its face value and nearly 50% above its fair value. The board rejected this proposal as too costly to common shareholders. In response, Alta Fox threatened to initiate specious litigation on three separate matters, call a special meeting of shareholders, and nominate candidates to replace directors at the company’s 2025 annual meeting if their terms were not accepted.
Daktronics has made a counterproposal to Alta Fox that reflects the market value for the convertible note and remains willing to assist Alta Fox in gaining the liquidity it desires at a fair price. Meanwhile, after significant transformation efforts and record financial performance in fiscal year 2024, Daktronics’ stock closed at a price of $19.24 per share, well above the price target set by Alta Fox in May 2023.
Daktronics is the leading U.S.-based designer and manufacturer of dynamic video communication displays and control systems for customers worldwide. The company has strong leadership positions in large-screen video displays, electronic scoreboards, LED text and graphics displays, and related control systems, serving customers in live events, commercial, high school park and recreation, transportation, and international business units. Following these announcements, the company's shares moved -2.9%, and are now trading at a price of $18.68. For more information, read the company's full 8-K submission here.
