Key Summary: On January 6, 2020, Daniel Khoshaba disclosed a 7.5% stake and requested a board appointment. He was elected director on February 25 and became CEO on April 13, 2020, resigning on July 5, 2021. On August 23, 2021, he raised governance concerns and, on May 11, 2023, urged action on stock price and investor confidence. On June 12, 2023, Khoshaba (11.3%) criticized management, urging the board to address shareholder value issues.Market Cap: $5 million | Wheeler Real Estate Investment Trust, Inc. is a self-managed commercial real estate investment company.
Daniel Khoshaba
On January 6, 2020, Daniel Khoshaba disclosed a 7.5% stake and requested a board appointment. On February 25, 2020, he was elected as a director. On April 13, 2020, Khoshaba became the CEO after the termination of the previous CEO. However, on July 5, 2021, he resigned as President, CEO, and board member. On August 23, 2021, Khoshaba expressed concerns about corporate governance and leadership, hinting at potential board changes. On May 11, 2023, he delivered a letter urging actions to address the company's declining stock price, lost investor confidence, and the need for a settlement with Series D preferred stockholders.
On June 12, 2023, Mr. Khoshaba (11.3%) delivered a letter (refer "Exhibit A") to the board expressing his concerns about the management and financial performance. He emphasized that shareholders had voted against the board's recommendations, indicating their disapproval. Mr. Khoshaba urged the board to address critical issues that were eroding shareholder value and make timely decisions.
Past
(i) SR Equity Ventures
On December 30, 2022, SR Equity Ventures (8.14%) delivered a letter to the company nominating a slate of six director candidates for election to the Board at the 2023 AGM. Source
(ii) Steamboat Capital Partners
On June 24, 2020, Steamboat Capital Partners disclosed a 12% stake and requested a meeting to elect directors representing Series D Preferred Shareholders. On May 21, 2021, they again requested the election of directors and discussed capital structure with management. On October 25, 2021, Steamboat Capital Partners filed a complaint alleging a breach of governing documents and violation of rights by the company's distribution of rights to common stockholders. On December 20, 2022, they expressed their intention not to tender shares and highlighted the need for negotiations to address the company's challenges.
(iii) JCP Investment Management
On June 11, 2018, JCP Investment Management exercised its right to have the company redeem their shares due to a failure to maintain the required asset coverage. They threatened further action, including litigation. On June 28, 2018, JCP Investment Management filed a complaint alleging that the company altered the terms of the shares without a vote and violated Maryland law. They sought an injunction and redemption of preferred stock. On February 26, 2020, a settlement agreement was reached, leading to the dismissal of the lawsuit. However, on December 9, 2020, JCP Investment Management increased its stake and hinted at potential legal action for breach of the settlement agreement.
(iv)Westport Capital Partners
On December 18, 2017, Westport Capital Partners nominated two candidates for the board at the 2018 annual meeting. Mr. Armstrong from Westport Capital Partners was appointed as a director on April 11, 2018, but he resigned on September 13, 2019. On February 11, 2020, Westport Capital Partners reduced its stake to 4.6%.
(v) Joseph Stilwell
On July 3, 2017, Joseph Stilwell disclosed an 8.2% stake, expressing a desire to work with the board to maximize shareholder value. In November 2017, Stilwell submitted a written consent to be named in the proxy statement and increased his stake to 9.7%, announcing nominees for the board. In January 2018, Stilwell called for the removal of the Chairman and CEO, which was followed by the termination of the CEO in January 2018. Stilwell continued to file proxy materials and letters, but his nominees were not elected to the board in October 2018. Stilwell nominated candidates again in 2019, and two of his nominees were recommended by ISS. Eventually, three of Stilwell's nominees were elected to the board in December 2019. The Stilwell Group further increased its stake in June and September 2020.
(vi) NS Advisors
On July 21, 2017, NS Advisors expressed concern about the trading price of the company, disclosing a 5.4% stake and intending to engage in a dialogue with management and the board. In January 2018, NS Advisors (6.8%) sent a letter requesting the company's board to commit to a plan of complete liquidation, appoint independent directors to oversee the process, and hire a real estate broker. In February 2018, the company announced the retention of KeyBanc Capital Markets to explore strategic alternatives. In April 2018, Andrew R. Jones of NS Advisors (5.8%) was appointed to the Board. By December 10, 2019, NS Advisors reduced its stake to 4.7%.
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