Katapult (Nasdaq: KPLT), a lease-to-own platform that went public in a SPAC deal with FinServ Acquisition Corp. in 2021, has received an open letter from a shareholder telling the firm to sell itself.
Infinitum Partners, L.P., a firm that reports a 1.3% equity stake in Katipult, states that since Katipult went public at around a $1 billion valuation it has lost about 80% of its equity value has been destroyed under its current management and board of directors.
To quote the letter:
“Katapult’s dismal performance of late starkly contrasts with its previous track record as a private company, when its growth was outstanding by any metric (139% Revenue CAGR from 2018 to 2020). In our opinion, this is partially explained by wildly unrealistic projections that were made while the SPAC deal was marketed, resulting in the Company subsequently missing every single target set then – by embarrassing margins. We also believe that this has been compounded by inaction and ineptitude by the Company’s management and the Board. At this point, based on our own research, in-depth discussions with other investors, and prevailing market conditions, it is clear to us that in order to protect what is left of shareholder value, Katapult must urgently explore strategic options that would take the Company private.”
Katipult’s current market cap is hovering around $226 million. Katipult’s shares have a 52 week high of almost $15/share. Today, shares trade around $2.40/share.
Katipult has also been hit with numerous class-action lawsuits due to its performance.
Infinitum Partners describes Katipult as delivering a “troubling record” since going public and “fundamentally headed in the wrong direction,” calling the SPAC deal a mistake. Infinitum Partners tells the Board of Directors to “focus on potential acquisitions by strategic buyers and banking institutions.”
“We have repeatedly voiced our views privately in discussions with Katapult’s management and members of the Board. However, at this point we find ourselves with little choice but to publicly air our grave misgivings about the state of affairs at the Company, and hope that this will encourage the Company to finally take decisive action. While we remain open to further conversations with the Company, we reserve all options available to us to protect the rights and shareholder value of all investors in Katapult,” stated the letter.
