David Kanen Writes Letter to PRTS Board Reiterating Poor Stock Performance. Kanen declares he will be voting against CEO David Meniane on the upcoming proxy, and demands the board conduct an investigation into Mr. Meniane’s behavior, and conduct a CEO se
April 25 2023 - 1:19PM
Dear Mr. Meniane and PRTS Board,
Despite your requests for “private” dialogue we cannot remain
silent. Our public communication is justified due to your lack of
action and lip service only posture. We will be voting our shares
against David Meniane for the following reasons:
- Since both founder Mehran Nia and myself have left the board,
our stock has lost over $500 million dollars of value. It has
declined from a peak of over $22 to approximately $5. From peak to
current levels, that is an approximate $935 million dollar
decline.
- Revenue growth has decelerated over the last 8 quarters from
64.9% to 11.8%.
- Since Mr. Meniane has been CEO, revenue growth is just barely
above double digits at 11.8% in the latest quarter. Even more
concerning, EBITDA as a % of revenue was only 1.35% vs. 1.88% a
year ago, illustrating that our company is going backwards under
the leadership of Mr. Meniane. Then, the most recent guidance given
by Mr. Meniane calls for meager single digit growth.
- Mr. Meniane is disconnected from the ultimate scorecard and
what we believe is a morale problem at the company. Under his
leadership he recently stated in the last earnings call: “the key
to our success lies in our culture and our commitment to
shareholders. We’ve built an incredible business centered around
positive unit economics, repeat customers, and a laser focus on
financial discipline, all with the intention of maximizing
long-term value.”
In regards to culture, we strongly disagree with Mr. Meniane. We
believe he was handed an excellent culture and company. Since
becoming CEO, in our opinion, he is doing great harm. Although we
are not insiders, we can only go by publicly available information
and testimony of former employees including “Glassdoor”. Please
visit the following link: PRTS Employee Reviews. As you can see,
over the last year, while Mr. Meniane has been CEO, the number of
employees who disapprove of his leadership specifically has gone up
to 6! This is out of only 12 months and 29 reviews. That compares
to a total of 5 in the previous 28 months and out of 69 reviews on
the employee review platform. There are already more people
disapproving of Mr. Meniane within the company in his first year
than in the previous two-plus years before him. We have also heard
anecdotal stories of Mr. Meniane behaving in a threatening,
dictatorial manner towards certain employees, particularly those
exiting. If this is true, WE DO NOT SUPPORT
DICTATORS!
Therefore, we are calling upon the board to create a “safe zone”
and process, whereby employees that feel threatened with
retribution can “safely” express their concerns without fear. This
is the only way that the board can get to the bottom of this and
determine if Mr. Meniane should be terminated with cause.
Regardless of the outcome, the financial results and stock price
performance alone are sufficient for the board to conduct a CEO
search immediately.
In conclusion, we look forward to the board taking action and
making a shift towards value creation, and reversing the poor
outcomes under Mr. Meniane’s CEO tenure.
Sincerely,
David Kanen
President/CEO
Kanen Wealth Management
dkanen@kanenadvisory.com
CarParts com (NASDAQ:PRTS)
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