Concerned Shareholder Group Urges the Board of Directors of Hippo Holdings Inc. to Initiate a Strategic Review Following a Period of Significant Value Destruction
Bradley L. Radoff and Etude Capital LLC (together with their affiliates, the "Concerned Shareholder Group" or "we"), who are among the Company's 10 largest shareholders and hold nearly 2.5% of the outstanding common shares of Hippo Holdings Inc. (NYSE: HIPO) ("Hippo" or the "Company"), today issued the following open letter to the Company's Board of Directors (the "Board"):
Members of the Board,
Since becoming a publicly traded entity in early 2021, Hippo has generated abysmal financial results and operated in an unsustainable manner. Hippo is now a micro-cap stock that trades at a roughly 50% discount to book value. We believe the Board must immediately embrace its fiduciary duty to preserve shareholder value while navigating a highly regulated industry.
We contend the only viable path forward is for the Board to immediately announce and run a strategic review process with the goal of preserving and maximizing value from the Company's capital, Spinnaker Insurance Company and NOLs. Additionally, the Company should take immediate steps to enhance its financial disclosures so that shareholders can hold the Board and management accountable. The Company should cease giving meaningless non-GAAP guidance, like adjusted EBITDA, and focus on metrics that are critical to success as an insurer, such as book value and net income.
Taking the right and necessary steps, in our view, could return $15-$20 in per share value. To ensure an objective review is run and to help improve governance going forward, we urge you to elect insurance industry veteran Jay Nichols Jr. as independent Chair of the Board. We believe Mr. Nichols's successful experience leading insurance company strategic actions and exits will inure to the benefit of the Company and its shareholders.
We expect the Board to address our concerns and move quickly to take the right steps. There is no excuse for exposing Hippo stakeholders to more risk and uncertainty. The Concerned Shareholder Group will seek to hold you accountable if no value-enhancing actions are taken.
Sincerely,
Bradley L. Radoff |
Steven Stein |
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Etude Capital LLC |
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