WisdomTree Inc
For the period ended Mar 31, 2024. Filed May 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 7, 2024
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Item 1A. RISK FACTORS
| ITEM 1A. | RISK FACTORS |
In addition to the updated risk factor and other information set forth below and elsewhere in this Report, you should carefully consider the information set forth in Part 1, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Responding to actions of activist stockholders against us has been costly and the possibility that activist stockholders may wage proxy contests or contested solicitations or seek representation on our Board of Directors in the future may be disruptive and cause uncertainty about the strategic direction of our business.
During fiscal years 2022 and 2023, we were the target of stockholder activism whereby a certain investor, acting together with other investors during 2022 (the “Investor Group”) and acting alone during 2023 (the “Investor”), notified us of their intention to nominate director candidates to stand for election to the Board of Directors at the 2022 and 2023 annual meetings of stockholders. On May 25, 2022, we entered into a cooperation agreement with the Investor Group whereby we agreed, among other things, to increase the size of our Board of Directors by two to a total of nine directors and appoint two nominees proposed by the Investor Group. At the 2023 annual meeting of stockholders, our stockholders elected five of our six nominees to the Board of Directors and one of three nominees proposed by the Investor. Responding to actions by the Investor and the Investor Group has been costly and actions by activist stockholders to seek representation on our Board of Directors in the future may similarly impact us.
On April 17, 2024, the Investor filed a preliminary proxy statement with the SEC in connection with the 2024 annual meeting of stockholders to solicit the Company’s stockholders to vote against the election of certain of the Company’s director nominees. On April 18, 2024, the Investor filed an amended Schedule 13D with the SEC disclosing that they had filed a preliminary proxy statement. On May 3, 2024, the Investor filed definitive proxy statement with the SEC.
Activist stockholders, such as the Investor, may from time to time attempt to effect changes in our strategic direction, and in furtherance thereof, may seek changes in how the Company is governed. Our Board of Directors and management strive to maintain constructive, ongoing communications with our stockholders, including the Investor, and welcome their views and opinions with the goal of enhancing value for all stockholders. However, an activist campaign that seeks to replace or remove members of our Board of Directors or changes in our strategic direction could have an adverse effect on us because:
| ● | responding to actions by activist stockholders is costly and may be disruptive, time-consuming and divert the attention of our Board of Directors and senior management from the pursuit of business strategies, which could adversely affect our results of operations and financial condition; |
| ● | perceived uncertainties about our future direction as a result of changes to the composition of our Board of Directors, or senior management team, including our Chief Executive Officer, or changes to our stockholder base may lead to the perception of a change in the direction of the business, instability or lack of continuity, which may be exploited by our competitors, may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel and business partners; |
| ● | these types of actions could cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business; and |
| ● | if individuals are elected to our Board of Directors with a specific agenda, it may adversely affect our ability to effectively implement our business strategy and to create additional value for our stockholders. |
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