Investor asks Avantax to explore sale, shares rise

Cummins

05/06/2023 13:07

** Shares of fund operator Avantax Inc  AVTA.O  rise 4% to
$22.88 premarket 
    ** Investor Engine Capital LP, which has an about 2% stake
in AVTA, asks co to explore strategic alternatives including a
possible sale
    ** Engine believes co is worth between $27/shr and $32/shr;
stock closed at $22 on Friday
    ** Avantax is worth much more to a larger firm, than as a
standalone entity, considering co's cost structure, pressures on
profitability and tough competition - Engine
    ** Adds that Avantax's stock is trading at much higher
levels than the core value of co's standalone business
    ** Engine says recent improvements, including positive net
flows, make it the perfect time for AVTA to explore a sale
    ** All four brokerages covering the stock rate it "buy" or
higher; their median PT is $32 - Refinitiv data
    ** Up to last close, stock had fallen 14% YTD 

 (Reporting by Johann M Cherian in Bengaluru)
 ((johann.mcherian@thomsonreuters.com;))