"As the founder of Velodyne Lidar, I have always put the Company’s best interests first. This operating philosophy helped guide my actions and decisions as I led Velodyne Lidar to many years of high growth and success, cementing the Company’s position at the forefront of lidar technology invention and innovation. It gives me great concern to see this commitment now fade in the boardroom and c-suite of the Company I built. I will not stand idly by and watch the Board squander Velodyne Lidar’s bright future with what I believe is a lack of strategic focus and poor corporate governance. That is why Marta and I have nominated Eric Singer – a highly-qualified and independent individual – for election to Velodyne Lidar’s Board.
Marta and I have repeatedly expressed our belief that Velodyne Lidar is at a critical juncture at this point in time. We voiced our grave concerns regarding the Company’s plunging product sales, departure of key R&D personnel, significant loss of market share to competitors, the serious risk of theft of IP in China and the Company’s overall poor financial performance. We believe that the Board has allowed stagnation in innovation to persist, resulting in a lack of new product offerings to meet evolving market demand. Additionally, we believe the Board has overconcentrated limited company resources on executive compensation when capital should instead be invested in research and development.
As disclosed by Velodyne Lidar, the average selling price of existing lidar sensors will continue to decline by as much as 20% in 2021, so the Company’s ability to introduce new products that adapt to changing technology and anticipate future standards is critical to improve its prospects for growth.
In order to maintain its competitive position and take advantage of consolidation opportunities, the Board should have a singular strategic focus. But rather than increasing focus on the addition of new research and development personnel to keep pace with innovation, the current Board instead opted to increase G&A expenses significantly. G&A expenses increased by 59% for the three months ended March 31, 2021 from the comparable period of 2020. This is in the face of Velodyne Lidar’s 35% decline in product revenues for the comparable periods of March 31, 2020 to March 31, 2021.
In our view, the status quo at Velodyne Lidar is unacceptable. Poor leadership and weak financial performance are not a recipe for success in the public markets."
BusinessWire: Velodyne responds: "The Company believes its pipeline is the most robust in the industry, as demonstrated by a 51% increase in projects – growing from 131 projects in January 2020 to 198 as of May 2021. Velodyne Lidar shipped over 2,600 sensors in the first quarter of 2021 alone, including 600 solid state sensors. Based on available public information, this far exceeded shipments of all of the Company’s public competitors combined.
In recent months, Velodyne’s Chief Executive Officer, Dr. Anand Gopalan, PhD, and Board have continued to bolster the Company’s leading executive team with a focus on maintaining its position as the most innovative lidar company in the industry. Supporting Velodyne Lidar’s executives is a world-class engineering team with more than 120 engineers on staff.
The Velodyne Lidar Board prides itself on its commitment and adherence to sound corporate governance, seeking highly qualified, independent and diverse directors. The Halls have put forward a candidate in Eric Singer who the Board believes exemplifies none of those characteristics. The Board determined not to recommend Mr. Singer for election at the upcoming Annual Meeting of Stockholders following a comprehensive process to evaluate Mr. Singer, including reviewing his qualifications and prior experience.
The Board is committed to upholding the highest standards of corporate governance. That commitment is evidenced by the Board’s responses to various proposals made by the Halls in December 2020 that would have had the effect of enhancing the Halls’ control over the Company."
Few slides from the company's recent Q4 2020 investor presentation:
Interesting to see how Mr. Hall has seemingly no control over the company albeit owning the majority of shares (~52.2%)??? How does that work? I also wonder if having this battle publicly is a really smart thing to do...
ReplyDelete