Murchinson Issues Letter to Fellow Shareholders Regarding the Urgent Need for Boardroom Change at Nano Dimension
Murchinson Ltd. (collectively with its affiliates and funds it advises and/or sub-advises, “Murchinson” or “we”), which holds approximately 5.1% of the outstanding shares of Nano Dimension Ltd. (NASDAQ: NNDM) (“Nano Dimension” or the “Company”), today issued the below open letter to its fellow shareholders following its unsuccessful attempts to engage with the Company’s Board of Directors (the “Board”) and management.
Murchinson is the largest shareholder of Nano Dimension. After months of disappointing engagement with Chairman and Chief Executive Officer Yoav Stern, we sent a letter to Nano Dimension’s Board on January 22, 2023 to demand that it promptly convene a special meeting to provide shareholders the opportunity to vote on proposed resolutions that include the removal of four current directors (including Mr. Stern) and the appointment of two new independent directors. We took this step because shareholders deserve the right to vote on a reconstitution of the Board following a decline of more than 77% in the Company’s share price during Mr. Stern’s chairmanship. We worked with a leading U.S. law firm and a leading Israeli law firm to ensure that all aspects of our demand and related materials complied with all legal requirements, even though we suspected the Stern-controlled Board would react by employing entrenchment maneuvers to avoid being held accountable by shareholders.
As predicted, instead of respecting our clear right under local law to convene a special meeting or trying to collaborate with us on Board refreshment, Mr. Stern and his allies have rejected our demand and immediately embarked on a scorched earth campaign to entrench themselves at all costs. The Stern-controlled Board appears to have abandoned any semblance of appropriate corporate etiquette and sound governance by issuing a series of false and misleading press releases that attack us and misrepresent our intentions. It is clear to us that Mr. Stern is causing the Company to make these unsubstantiated claims in order to distract from his record of presiding over massive value destruction throughout his tenure.
With this context in mind, the urgent need for change at Nano Dimension is as much about future risks as past underperformance. We believe that Mr. Stern, who has a dubious history as a capital allocator, and his seemingly hand-picked Board cannot be trusted to steward the approximately $1 billion in cash on the Company’s balance sheet. We fear Mr. Stern could continue his value-destructive acquisition spree and continue burning excessive cash on cronyism and questionable initiatives. In light of investor unrest, we also fear Mr. Stern may try to dilute shareholders in order to place shares in friendly hands.