Have a Look at Two Ongoing Proxy Fights and One Freshly-Completed Activist Campaign

Red Mountain Continues Fight with iRobot

According to a fresh filing with the SEC, Willem Mesdag’s Red Mountain Capital Partners LLC has made a definitive filing with the SEC of a proxy statement, seeking support for the election of two director nominees, including Mr. Mesdag, at iRobot Corporation (NASDAQ:IRBT)’s upcoming annual meeting of shareholders. Since the aforementioned filing does not disclose new insights about the ongoing proxy contest between the robotics company and Red Mountain, let’s focus our attention on certain points of discussion that have not been previously touched in our previous articles (read more details).

The California-based activist shareholder, which owns roughly 6.2% of iRobot’s outstanding shares, has only one “agenda” with regard to this proxy contest, which involves the creation of a culture of accountability in the boardroom. It should be noted that Red Mountain did not initially seek to replace any Board members at iRobot, but rather suggested the increase of the Board size to ten seats from eight seats and the appointment of its two director nominees. Instead, iRobot opted for engaging in a proxy contest that does no good for the company.

As a long-time observer of this proxy fight, I believe that a more appropriate decision on the part of iRobot would have been to appoint the two director nominees proposed by Red Mountain and increase the size of the Board. At the end of the day, iRobot Corporation (NASDAQ:IRBT) has implemented most value-enhancement proposals outlined by the activist shareholder at early stages of the activist campaign. Precisely, the robotics company voiced its commitment to focus on the Home Robots business and already sold the Defense and Security business, so clearly Red Mountain has served as a positive catalyst for the company’s stock performance. So why not appoint two shareholder-represented directors? Red Mountain believes that there is more opportunity to create shareholder value through increased operating leverage and margin expansion, so there is more work to be done at the company. Steven Cohen’s Point72 Asset Management acquired a new stake of 325,600 shares of iRobot Corporation (NASDAQ:IRBT) during the December quarter.