Activist Adam Arviv Announces Intent to Nominate New Slate of Directors to the Board of WonderFi
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Major shareholders representing ~22% of
WonderFi stock are demanding urgent change as share price plummets during the strongest bull run in history for crypto currencies like Bitcoin -
KAOS Capital CEOAdam Arviv leading the charge to replace the entrenched and disorganized Board that missed opportunities to capitalize on the Company’s position as the only fully regulated crypto exchange inCanada
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KAOS’s call for change in the Board reflects its dissatisfaction with WonderFi’s lifeless stock performance and its failure to capitalize on its position as the only fully regulated crypto exchange in
The current Board has repeatedly refused to engage on plans to restore investor confidence, leading KAOS to this decision to nominate a more effective and engaged slate of directors. KAOS’ call for change has significant support from shareholders, and cumulatively represents approximately 22% of the issued and outstanding shares, including
KAOS is confident that new leadership will enable
“As the cryptocurrency market rebounds,
“This need for new leadership has already been identified by a large proportion of shareholders and every day more shareholders are joining our call for change,” added Arviv. “I encourage the Board not to waste more Company resources and to participate in an orderly transition, given that change is inevitable.”
MISSED OPPORTUNITIES: FAILURE TO CAPITALIZE ON STRENGTHS
As the only Canadian crypto exchange listed on the
This failure is compounded by a lack of product strategy and fragmented brand positioning, eroding investor confidence and perpetuating value destruction. KAOS believes that a valuable asset with significant upside potential is being led astray by a weak Board and Management, squandering opportunities and driving the stock price far below its true intrinsic value.
SIGNIFICANT UNDERPERFORMANCE
Despite the thriving crypto market seeing double and triple-digit growth, the Company’s share price has witnessed significant value destruction this year.
As of market close on
During these periods,
The Company’s missteps lie not only in its financial performance but also in its investor relations strategy, which has favoured issuing superficial press releases over substantive engagement with shareholders. This flawed approach has done little to increase investor confidence, instead raising valid concerns regarding the transparency and credibility of the company’s communication practices.
SUPPORT FROM WONDERFI’S LARGEST SHAREHOLDER
To ensure that
POOR CAPITAL ALLOCATION
- In assessing the Company’s capital allocation practices, several areas of concern have surfaced. This includes a lack of strategic coherence in mergers and acquisitions, coupled with inadequate follow-through on integrating acquired assets effectively.
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The haphazard integration of five acquisitions made over the last two years and the presence of multiple brands and platforms has contributed to market confusion. The Company's recent announcement on
March 19, 2024 , regarding the acquisition of FX Institutions Pty. Ltd. inAustralia is another example of a misguided go-forward strategy that has confused investors. This acquisition appears to be following the same pattern of previous ill-advised acquisitions under the current Board. -
Significant impairments from past acquisitions have raised questions about the Board’s oversight. The earlier acquisition of three entities totaling
$158 million byDecember 2022 resulted in impairment charges of$121 million , representing 77% of the acquisition value. -
In 2023, two additional acquisitions valued at
$74 million led to a 70% dilution of shareholder value, with a looming threat of further impairments. This pattern has contributed to an accumulated deficit of approximately$200 million as ofSeptember 2023 .
TUMULTUOUS TURNOVER IN LEADERSHIP
- Over the past two years, the Company has experienced a tumultuous turnover in leadership, with changes including the departure of the CEO, two CFOs, the CSO, and multiple directors. This whirlwind of personnel shifts at the executive level has raised concerns regarding the Company’s strategic trajectory and governance practices.
- As recently as last month, there were discussions around another major change in management with the board and third parties.
LOSS OF TRUST IN LEADERSHIP
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WonderFi's shareholders have lost trust in the Board’s ability to protect investors’ interests and lead the Company into the future. -
KAOS cautions the Board not to take any defensive or further entrenchment actions or attempt to delay the previously scheduled
WonderFi shareholder meeting. Any sale, transaction or other fundamental change being contemplated should be halted until shareholders have the opportunity to vote for a refreshed board. -
Considering the views of a significant percentage of the Company's shareholders, the urgency of the situation and the likely disruption, distraction, and costs of a proxy contest, the shareholders request that the current Board carefully consider and do what is right for
WonderFi and its shareholders. - All shareholders are advised the current Board may try to shift focus with an aggressive smear campaign to distract shareholders from the core issue of ongoing value destruction and poor governance. The only thing consistent about this Board’s actions is dysfunction.
KAOS welcomes the opportunity to engage with fellow shareholders who believe that the Company needs better governance and a swift recovery in share price.
Interested parties can contact
About KAOS
KAOS, a
The firm specializes in opportunistic investing in equities venture capital strategies and activist investing, principally in
Advisors
Additional Information
The information contained in this press release does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable corporate and securities laws. While KAOS intends to take additional steps in the future, which may include submitting director nominees pursuant to the advance notice requirements of the Company’s articles, soliciting proxies of shareholders, filing a dissident information circular and/or other actions or steps, shareholders are not being asked to execute or not execute a proxy with respect to any matter at this time (including any potential nominees of KAOS).
1 Financial figures are based on local currency; Bitcoin priced in USD.
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Director, Special Situations
Phone: 647-265-4528
Email: ageorge@kingsdaleadvisors.com
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