High-profile Stansberry Research founder Porter Stansberry is slamming his nameskake company’s current owner MarketWise (NASDAQ:MKTW) in an SEC filing, calling for the ouster of struggling MKTW’s board and a review of “potential business combinations and strategic alternatives.”
“This board’s performance, alongside the company’s, ever since I gave up control of the business, has been abysmal,” Stansberry wrote in a letter accompanying a 13-D filing. “You and this management team are like the Bad News Bears of publishing and corporate oversight. Even the most obvious things that should be done to increase the company’s financial performance … haven’t happened yet.”
Stansberry, who founded an investment newsletter in 1999 that eventually grew into Stansberry Research, wrote in his filing that he planned to “explore all potential ways to change the composition of the board.” He called for the ouster of all but one current board menber.
The entrepreneur added that he “may also engage the board and the issuer’s management to change the issuer’s dividend policy to begin paying dividends, to discuss the business, financial condition, and operations of the issuer, and to discuss potential business combinations and strategic alternatives.”
Stansberry disclosed in his 13-D that he currently owns 67.7M shares of MarketWise (MKTW), although other filings say he’s no longer a company employee.
Word of Stansberry’s actions sent MKTW shares 8.5% higher Friday to close at $2.43.
Company management told Seeking Alpha in a statement that while it “welcomes input from all shareholders … the allegations made in the filing against the current board and management are without merit and, in many cases, factually incorrect.”
Stansberry Research grew over time to become a unit of Beacon Street Group, which also owned other well-known investor news-and-information services like Chaikin Analytics and InvestorPlace. Some of the businesses compete with Seeking Alpha.
Beacon Street went public at a $3B initial valuation via a 2021 merger with a special purpose acquisition company (SPAC) to become MarketWise (MKTW), which briefly turned into a Wall Street darling. The stock shot up more than 70% in its early days following the SPAC merger’s July 2021 closing.
However, shares have tumbled since then. Although MKTW rallied on Friday, the stock is still down more than 80% from its July 2021 peak.
MarketWise (MKTW) reported poorly received quarterly results in November and CEO Mark Arnold stepped down shortly thereafter.
In his SEC filing, Stansberry criticized current management for a wide range of alleged shortcomings, from what he characterized as poor dividend performance to disappointing returns from the SPAC deal for himself and other insiders.
“There was a $3 billion IPO. And what did I get out of the deal? Bupkis,” he wrote. “But what happened next was even worse.”
Porter Stansberry is no stranger to controversy. The U.S. Securities and Exchange Commission sued him and his companies in 2003, claiming that his publications solicited business with e-mails offering investors “fantastic claims of quick profits or inside information.” A court ultimately ordered Stansberry and his businesses to pay $1.5 million in penalties and restitution.
As for MarketWise (MKTW), Seeking Alpha contributor GS Investing recently laid out a “Strong Buy” case for the stock despite the firm’s ongoing woes.
