Ammo's top investor seeks board control, nominates 7 new directors (updated)

Outdoor Holding

29/08/2022 17:45

(Adds comment from company, share price)
    By Svea Herbst-Bayliss
    BOSTON, Aug 29 (Reuters) - Ammo Inc's  POWW.O  largest
investor wants to take control of the ammunition manufacturer's
board and boost the firm's profit through growth in e-commerce
of firearms, outdoor sporting and related goods, according to a
letter seen by Reuters.
    Steve Urvan, who owns 17% of the Scottsdale, Arizona-based
company and sits on the board, nominated seven director
candidates, including himself, his letter to other shareholders
said. The candidates have experience in firearms manufacturing,
e-commerce and mergers and acquisitions.
    Urvan sold GunBroker.com, a company he founded and ran for
over two decades, to Ammo in 2021 and believes the company could
reach $1 billion in annual sales over the coming years by
growing the online platform and entering new categories.
    Ammo this month announced plans to separate its
manufacturing and online marketplace, just 16 months after
completing the acquisition of GunBroker.com. 
    The company said it is "focused on executing on our strategy
to drive long-term shareholder value" and that it disagrees with
many of Urvan's "assertions and analysis." It said it will
provide additional information for shareholders in the coming
days and weeks.
    Ammo's stock price climbed as much as 2.8% in early trading
on the news and then wiped away some gains to change hands at
$3.97, up 1.02%.
    The company, Urvan argues, should adopt a new strategy to
transform itself from a conventional ammunitions manufacturing
business to a diversified e-commerce platform. He acknowledged
that he is taking "a relatively extraordinary step for a sitting
director" with his plan to take control of the board.
    Shareholders will be able to vote on directors at the
company's annual meeting due later this year.
    Urvan thinks new directors could assess Ammo's leadership
team, cut costs in its ammunitions segment, focus more on higher
growth opportunities in e-commerce and consider possible
acquisitions in related areas including sporting goods, apparel
and collectibles. Ultimately he would also like to separate the
CEO and chairman roles, a trend in corporate governance.
    Before Ammo bought GunBroker.com, the company posted five
years of net losses as expenses rose, Urvan wrote. Ammo's share
price has lagged peers, tumbling 47% in the last 52 weeks. Rival
Clarus Corp's  CLAR.O  shares fell 18% and Vista Outdoors'
 VSTO.N  stock dropped 29% during the same time.

 (Reporting by Svea Herbst-Bayliss; Editing by Sam Holmes and
Susan Fenton)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))