J. Carlo Cannell Sends Outraged Letter To ValueVision Media Inc (VVTV)’s Chairman

On June 3, J. Carlo Cannell’s Cannell Capital filed a Schedule 13D at the U.S. Securities and Exchange Commission, in which it declared a 20% increase in its exposure to ValueVision Media Inc (NASDAQ:VVTV). The fund disclosed ownership of 2.81 million shares of Common Stock, which account for 5.6% of the company’s outstanding shares.

Carlo Cannell

In the filing, Mr. Cannell included an outraged letter to Mr. Randy Ronning, Chairman of ValueVision Media Inc (NASDAQ:VVTV)’s Board of Directors. Almost at the beginning of the note, the fund manager states: “I write to express my outrage that you stiffed me and other shareholders with a $3.00 million bill for the six months ending March 31, 2014 for public relations and legal advisors to defend ValueVision Media Inc (NASDAQ:VVTV) from the Clinton Group’s request for a special shareholder meeting” (SEC). He states that this kind of expense wouldn’t even be justified at a $20 billion “Fortune 50″ company, and even less, at a $200 million market cap company like ValueVision.

I should highlight that Cannell had formed an activist group with Clinton Group in November 2013, to disclose together the moves made in their positions, as well as to consult each other in relation to new acquisitions or sales of the ValueVision’s shares. As reported in a previous article, “the group also demanded a shareholder’s meeting, where the stockholders of ValueVisioun should have voted to elect new directors for the company’s board. However, later, the electronic retailer company, ValueVision Media Inc (NASDAQ:VVTV), informed the group that the request does not comply with the company’s By-laws and Minnesota law, according to a press release. The company also stated that the Cannell-Clinton group does not hold enough voting power to satisfy the thresholds for such a request to be approved.”

Continuing the letter to Mr. Randy Ronning with quite a “humoristic” (yet quite angry) tone, Mr. Cannell includes a –used- copy of Alan “Ace” Greenberg’s Memos and highlights the following:

When you are a private enterprise, savings on expenses go to the bottom line. When you are owned by the public, savings still go to the bottom line, but they are in turn magnified by the multiple the stock carries. – Page 80

He then closes the epistle by exhorting the Chairman to consider reimbursing the company for the misuse of its assets for his exclusive benefit.

Cannel Capital is the second largest hedge fund shareholder (amongst those that we track) of ValueVision Media Inc (NASDAQ:VVTV), only trailing Paul Reeder And Edward Shapiro’s Par Capital Management, which owns 3.65 million shares. Its current value, of approximately $13.7 million (as of June 6), makes it one of the fund’s top five holdings, accounting for almost 5% of its equity portfolio’s total value. In addition to Cannell, Clinton Group and Par Capital, Chuck Royce‘s Royce & Associates last declared having upped its stake in the company by 80%, to 1.8 million shares, while Jim Simons‘ Renaissance Technologies boosted its exposure by 41%, to 462,875 shares.

Read the full letter below:

Carlo Cannell Letter to ValueVision

Disclosure: Javier Hasse holds no position in any stocks mentioned.

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