In a strong indictment, shareholders of Acacia Research Corp. (Nasdaq: ACTG) overwhelmingly approved the addition of two board members nominated by dissident shareholders, ousting its chairman and a director in the process.
Coming on board are Clifford Press and Alfred Tobia, nominated by New York-based hedge fund manager Sidus Investment Management LLC and BLR Partners LP in Houston.
Out are Chairman G. Louis Graziadio, who took the top post in 2016, and Frank Walsh, who joined the board that same year.
Press is co-owner of New York investment advisory firm Oliver Press Partners LLC and a director at several public companies, including Stewart Information Services Corp. (NYSE: STC), Quantum Corp. (Nasdaq: QTM) and Drive Shack Inc. (NYSE: DS).
Tobia, who co-founded and serves as equity portfolio manager at Sidus, is a director at San Antonio-based marketing agency Harte Hanks Inc. (NYSE: HHS). Before the vote, he earned a nod from San Francisco-based Glass, Lewis & Co. and Institutional Shareholder Services in Maryland—the country’s leading independent proxy and corporate governance service providers.
Press had approval only from ISS.
The votes were tallied at Acacia’s annual shareholder meeting on June 14 and certified by Acacia’s election inspector. The new board members were elected by a more than 4 to 1 margin and began service immediately.
The latest development marks another turn for Acacia, which shifted its strategy and business model under Graziadio to focus on investing in emerging technologies, such as artificial intelligence, robotics and blockchain applications. The moves further distanced the company from its core business of monetizing patents primarily through litigation, an increasingly costly and challenging endeavor due to recent changes in intellectual property law, devalued intellectual property and jurisdiction limitations.
Acacia’s revenue fell 57.1% last year to $65.4 million. It posted net income of $22.1 million compared to a 2016 loss of $54 million.
A potential silver lining: Acacia shares are rebounding lately to trade at about $4.25 as of press time, up nearly 5% this year for a market value of $215 million. The stock has popped 30% off its mid-April low.
Veritone Roller Coaster
Veritone Inc. (Nasdaq: VERI) shares nosedived after the Costa Mesa-based company recently priced a public offering of about 1.7 million shares at $18.
Investors on June 21, the day pricing was announced, sent shares down 16.2%.
Veritone, which is trying to crack into the booming and trendy artificial intelligence segment, plans to use the proceeds for working capital and general corporate purposes, including research and development, capital expenditures, and sales, marketing and administrative expenses, according to a prospectus filing.
Its share price, trading around $18, has swung wildly since the company went public in May 2017, and is down 22.6% this year to a market value of about $295 million—miles from its intraday high of $74.92 and a $1.1 billion market value on Sept. 27, 2017.
Acacia, Veritone’s biggest shareholder with about 31% of capital stock, is along for the ride. Its $54 million bet, which includes warrants and convertible debt, looked great out of the gate, leading to a profit of $159 million in the third quarter last year.
It’s fizzled since, losing $151 million of the gains.
In the first quarter, Veritone posted record quarterly revenue of $4.4 million, up nearly 42% year-over-year and beating Yahoo Finance analyst consensus of $3.9 million. Its aiWARE platform generated licensing revenue of $1.3 million, up 506% and the first time it crossed the million-dollar benchmark. More than 70 customers use its software, which allows companies to track advertisements and media comments in real time, up from 25 year-over-year.
But its traditional media-buying business accounted for 70.4% of revenue, or $3.1 million.Â
Veritone reported an operating loss of $13 million, or 81 cents per share, widely missing a forecasted loss of 73 cents, or $11.8 million. Operating expenses increased 79% to $17.1 million, driven by higher headcount to “expand its business and enhance its AI platform.” The expense increase also included $2.5 million in stock-based compensation, the same as in the fourth quarter.
The company ended the first quarter with 225 employees, 69 in research and development.
Blizzard Alum to LA
Paul Sams, former president and chief operating officer of Irvine-based Blizzard Entertainment Inc., has taken a senior role at Damage LA LLC in Los Angeles.
Sams, who moved to Austin, Texas, three years ago after leaving Blizzard, was named partner and is a co-founder of the marketing and creative agency, which focuses on the red-hot esports segment.
Agency client Gen.G esports runs the Seoul Dynasty team in Blizzard’s Overwatch League, which debuted in January at its esports arena at Burbank Studios.
Damage LA, established two years ago, is relaunching with capital to expand, said the Esports Observer.
Sams, who spent 20 years at Blizzard, played a key role in guiding the company from 50 employees to more than 4,000 as its market value soared past $5 billion.
He also serves as lead strategic adviser at Irvine-based game developer Ready at Dawn.
