Spear Point Buyout Group Publicizes Letter to Shareholders of TheStreet

On August 20th, New Orleans-based Spear Point Buyout Group (SPBG) announced its action against financial news and services website TheStreet, challenging its current strategy and suggesting a rework, after a letter sent to the company on July 9th, 2013.

Spear PointToday, SPBG made the open letter to shareholders, written on September 19th, public. The letter quickly became a top 10 most read article on Seeking Alpha, a stock market analysis website.

The letter begins: “The purpose of this letter is to inform Shareholders of certain current developments with TheStreet, Inc. (“the Company”), to discuss some scenarios as to why some parties may be acting as they are, and what we think the next steps should be toward our goal of maximizing value for the Common Shareholders.”

If consummated, shareholders would receive $2.80/share for their Common Shares and the Preferred Shareholders (Technology Crossover Ventures or “TCV”) receiving $15,000,000 in cash for their shares of the Company’s Series B Preferred Stock (the “Preferred Shares”).

The proposal was rejected by TheStreet, prompting SPBG to list four scenarios under which refusing to sell the Preferred Shares for a discount could make sense: Faith in the Company’s Strategy, Anticipated Acquisition of TheStreet, TCV Plans to Acquire the Company after November 15, 2014, and Hope that an Activist like Spear Point pushes the Company into a Strategic Transaction.

In conclusion, Ron Bienvenu, Co-founder of Spear Point, writes, “Spear Point intends to continue urging the Company to move toward a strategic transaction in order to maximize value for the Company’s Common Shareholders.”