In an amended filing, Joshua Silverman and Richard Abbe and their fund Iroquois Capital Management LLC disclosed a letter sent to the board of director of MGT Capital Investments Inc. (NYSE:MGT).
Iroquois sent a letter to the board of directors of MGT Capital Investments Inc. (NYSE:MGT), President and CEO Robert Ladd and Treasurer and CFO Robert Traversa on February 5, according to the filing.
In the letter, Iroquois stated that MGT Capital Investments Inc. (NYSE:MGT) disclosed and misconstrued the fund’s private discussion with President and CEO Robert Ladd and CFO Robert Traversa in a 8-K on January 21.
According to the fund, MGT Capital Investments Inc. (NYSE:MGT) has taken portions of such private discussion so blatantly out of context and have spun them for its own selfish interests all in an effort to mislead shareholders as to Iroquois’ positive intentions with respect to creating value for the benefit of all shareholders and entrench the current management team and the board.
Additionally, Iroquois stated that it is concerned about the series of shareholder-unfriendly actions approved by the board on January 26. The fund stated that the board’s actions were collectively designed to make it more difficult and costly for shareholders to lawfully exercise their rights.
Further, Iroquois stated that the market currently reflects the lack of confidence in management’s ability to unlock value at MGT Capital Investments Inc. (NYSE:MGT). Since Robert Ladd took over as CEO in February 2011, shareholders have suffered substantial dilution and loss of value under a share price that has declined by more than 72% while MGT Capital Investments Inc. (NYSE:MGT) market capitalization has more than doubled, the fund stated.
Moreover, Iroquois stated that the 8-K filed on January 21 was designed to divert shareholders’ attention away from the real and serious issues facing MGT Capital Investments Inc. (NYSE:MGT) under its current management team, which include, among others, prolonged dismal financial and stock price performance and history of ill-conceived and poorly executed acquisitions.
Iroquois stated it remains open to discussing ways in which it can work constructively with management and the board to ensure MGT Capital Investments Inc. (NYSE:MGT) is appropriately governed and run in a manner consistent with the best interests of all shareholders.
Iroquois owns 900,543 shares of MGT Capital Investments Inc. (NYSE:MGT), which represent 9.99% of the company’s common stock.
MGT Capital Investments Inc. (NYSE:MGT) and its subsidiaries are engaged in the business of acquiring, developing and monetizing assets in the online and mobile gaming space.
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