Indaba Capital Management L.P. (together with its affiliates, "Indaba" or "we"), which is the second largest shareholder of ON24, Inc. (NYSE: ONTF) ("ON24" or the "Company") with an ownership interest of nearly 9% of the Company's outstanding shares, today issued an open letter to the Company's Board of Directors (the "Board").
Members of the Board,
As you know, Indaba is ON24's second largest shareholder. We are strong proponents of ON24 enacting a meaningful capital return program, a plan to achieve profitability and corporate governance enhancements. We believe these actions are necessary in light of the Company's approximately 80% share price decline over the past two years.
Unfortunately, the need for change at ON24 is evidenced by much more than just objectively terrible shareholder returns. ON24 has a classified Board, long serving directors, no shareholder representative in the boardroom and a history of excessive spending and questionable capital allocation under Co-Founder and Chief Executive Officer Sharat Sharan. These apparent issues are all the more concerning when taking into account that ON24 had a hoard of cash, cash equivalents and marketable securities on its balance sheet as of the end of its last reporting period.
As the Board has overseen billions of dollars in value erosion over the past 24 months, it has not offset share price declines by meaningfully returning excess capital on the balance sheet to shareholders. This leads us to fear that the Board may allow Mr. Sharan to sustain elevated expenses and squander capital on questionable acquisitions. We believe the Board should address these concerns ? which we suspect are shared by many other shareholders ? by taking the following steps:
At this point, we hope the Board simply acts in shareholders' best interests rather than seeming to prioritize the interests of ON24's Co-Founder and Board. The time for debate is over. The time for transparent action is here.
Sincerely,
Derek Schrier
Managing Partner
Indaba Capital Management L.P.
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About Indaba Capital
Indaba was founded in 2010 to invest in corporate equity and debt. It is based in San Francisco. Learn more at www.IndabaCapital.com.