Findell Capital Releases Presentation on Oportun Financial
Visit www.OpportunityAtOportun.com to Download the Presentation
In the presentation, Findell outlines what it sees as the legacy Board of Directors' (the "Board") failure to effectively oversee management and instill accountability:
- CEO
Raul Vazquez turnedOportun's simple lending business into a money-losing fintech platform – destroying nearly$1.5 billion of stockholder capital in the process – by exploding its cost per loan, massively increasing its net charge-offs and pursuing disastrous acquisitions, including the approximately$211 mm purchase ofHello Digit, Inc.
- As a result of these strategic missteps, the Company's revenue and earnings deteriorated, leading to a roughly 76% collapse in the stock price from
September 2019 throughMarch 2023 .
-
Oportun has severely underperformed its closest public peer, OneMain Holdings, Inc., in terms of net charge-offs, OpEx ratio and stock price performance.
- Management's long-term targets for return on assets ("ROA") and return on equity ("ROE") are subpar and conceal the Company's weak annual percentage rate and overly high leverage.
- Not a single legacy Board member has lending experience, let alone subprime lending experience. Several directors also appear to us to have conflicts of interest based on their previous working relationships with each other and with
Mr. Vazquez , as described in the presentation.
- Despite the Company's poor performance under their oversight, the legacy directors have remained on the
Board for years – even when failing to receive a majority of votes in favor of their election – and continue to control the Board's committees and other leadership positions.
Findell also notes how the addition of independent lending expertise has benefited
- Our engagement – including the appointment of Scott Parker and
Richard Tambor , two Findell-identified directors with lending expertise – led to positive operating and governance changes, including a 61% reduction in OpEx per loan and a more than 206% total stockholder return.
- The election of independent director candidate
Warren Wilcox , who has highly relevant expertise in subprime lending and a deep understanding ofOportun's business, will help eliminate the legacy directors' control of the Board and lead to better oversight of the Company.
-
Oportun has ample room to reduce its corporate overhead by$80 mm and run at an OpEx ratio of less than 12%, which would bring the Company more in line with competitors.
- The Company should remove its self-imposed 36% interest rate cap, which has driven significant underperformance and prevented
Oportun from serving large swaths of customers.
-
Oportun should target pre-tax ROA of 8-10% while maintaining a conservative leverage ratio to yield >40% ROE.
- Findell believes
Oportun could achieve more than$22 per share1 if it reasonably reduces annual operating expenses to$325 mm by the end of 2026 and does not dilute stockholders any further.
***
We urge stockholders to vote FOR the election of
Contact:
info@findell.us
OR
info@saratogaproxy.com
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1 Assuming a pre-tax ROA of 8-10%,
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