Company: Harmonic Inc. (HLIT)
Business: Harmonic provides video delivery software, products, system solutions, and services worldwide. Its products enable customers to create, prepare, store, playout, and deliver a range of broadcast and streaming video services to consumer devices, including televisions, personal computers, laptops, tablets, and smart phones. The company has two business segments – Video and Cable Access. The Video segment provides video processing, production and playout solutions and services worldwide to cable operators and satellite and telco service providers and to broadcast and media companies, including streaming media companies. The Video business infrastructure solutions are delivered through shipment of products, software licenses or as SaaS subscriptions. The Cable Access business provides cable access solutions and related services primarily to cable operators globally.
Stock Market Value: $782M ($7.76 per share)
Activist: Scopia Capital Management
Percentage Ownership: 9.61%
Average Cost: $5.72
Activist Commentary: Scopia is not historically an activist investor. However, activist investor Jerome Lande (of Coppersmith Capital and prior to that, MMI Investors) folded his operations into Scopia for the purpose of operating an activist portfolio within the firm and giving activist advice and support on Scopia’s larger portfolio, which is a traditional long-short fund.
What’s Happening:
On April 9, 2021, Scopia and the company entered into a Cooperation Agreement, pursuant to which as long as Scopia owns 5% of the company’s common stock, they have the right to appoint two directors to the board, one of whom is Jerome Lande, head of special situations for Scopia, and the other to be an independent director. This appointment may be made at any time prior to the earlier of (x) 15 days prior to the deadline for the submission of stockholder nominations of directors for the company’s 2022 Annual Meeting and (y) 75 days prior to the first anniversary of the 2021 Annual Meeting. Scopia agreed to abide by customary voting and standstill provisions.
