Velodyne Founder Who Quit Now Attacks Board as SPAC Deal Turns Sour
(Bloomberg) -- The SPAC deal that took auto-sensor maker Velodyne Lidar Inc. public has turned sour, with founder David Hall, who quit as chairman last month, criticizing the company’s leadership and strategic direction.
“I firmly believe that the board has fostered an anti-stockholder culture and that Velodyne Lidar’s corporate governance is broken,” Hall said in a March 9-dated letter to directors, in which he disputed the reasons for his departure. “To be completely clear: I chose to resign because I had numerous concerns about the strategic direction and current leadership of Velodyne Lidar.”
The San Jose, California-based company, a leading maker of sensors used in the development of self-driving cars, went public in September after merging with a special purpose acquisition company, or SPAC, founded by Jim Graf and Michael Dee. The stock has been on a volatile ride, plunging 25% on the first day of trade before more than doubling in a matter of months, only to plunge anew and wipe out all those gains. The shares closed at $12.66 in New York Wednesday, down 45% this year.
Interest in SPACs, essentially corporate shells that take companies public through a back door listing, has surged this year. In 2020, blank-check companies raised $83.3 billion from investors, according to data compiled by Bloomberg, up from $13.6 billion in 2019. So far in 2021, they have raised more than $70 billion. On Wednesday, the U.S. securities regulator said it’s “taking a hard look” at disclosures and other structural issues in the wake of a rapid increase in the number of SPACs.
For Hall, the experience hasn’t been a happy one. In the letter, he says Graf and Dee “wanted to curtail my involvement in the quality and selection of products being developed, the contracts negotiated and integrity of the company’s business moving forward.”
He said he and his wife, former Chief Marketing Officer Marta Thoma Hall, were publicly censured on “unfounded claims which we strongly refute.”
In response, Velodyne Lidar said it “strongly believes David Hall’s letter contains a number of false accusations, misstatements and inaccuracies, and disagrees with its assertions.”
The company last month said Hall and his wife were replaced following an investigation by the board’s audit committee that found they “behaved inappropriately with regard to board and company processes, and failed to operate with respect, honesty, integrity, and candor in their dealings with company officers and directors.”
Hall, who said he owns 54.7% of the company’s common shares, said the board has “fostered an anti-stockholder culture,” citing its decision to “rubberstamp” an increased remuneration package for Chief Executive Officer Anand Gopalan despite releasing “weak” fourth-quarter earnings and missing year-end forecasts.
“I believe the status quo in Velodyne Lidar’s boardroom is unacceptable,” Hall said. “The board lacks prior public company experience, seems to prioritize its own self-interests over stockholders and has overseen the destruction of significant stockholder value.”
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