A group of investors in Terran Orbital ($LLAP) sent a letter to the company’s board on Thursday laying out a pathway to success after “underlying strategic and operational issues” have “significantly harmed the business,” the letter says.
The problem: The investors laid out several problems the company has faced, including:
- A 94% drop in stock value since going public in March 2022
- A “mistimed and poorly executed” de-SPAC that has left the company “in constant need of cash”
- A reckless “growth at all costs” philosophy
- A lack of trust in the market and inability to raise funds
“We recognize that many SPACs have underperformed in the public markets, however, we believe the issues plaguing Terran are largely self-inflicted and can be remediated if the right management team and directors are installed immediately. Accordingly, time is of the essence,” the investors wrote in the letter.
The investors: The letter was written by Sophis Investments LLC and Roark’s Drift LLC, in addition to Jordi Puig-Suari, Roland Coelho, and Austin Williams—the three cofounders of Tyvak Nanosatellite Systems. The group of investors own more than 16 million shares combined, or about 8.4% of the company.
The solution: The investors laid out three things they believe Terran must address to be successful in the long term:
- Hire a new CEO and separate chairman and CEO into two roles
- Implement better corporate governance practices, including changes to the board
- Conduct a comprehensive strategic review process with the help of outside financial and legal advisors
“Terran must regain market credibility and more favorable access to capital, which we believe can only be achieved through a meaningful change in leadership and greater operating efficiency,” the letter says. “Given the urgency that we believe exists, it is in the best interests of all of the company’s stakeholders that we share our concerns publicly.”