IMMR - Turtle Beach adopts limited duration poison pill amid Toro 18 stake

2023-03-28 16:46:30 ET

Turtle Beach ( NASDAQ: HEAR ) adopted a limited duration stockholder rights plan amid a disclosure last week that Toro 18 had taken a 7% stake in the maker of videogame headphones.  Turtle Beach fell 2.1% in after hours trading.

The "poison pill" is set to go in effect if  a person or group acquires beneficial ownership of 12% or more of the company’s common stock in a transaction not approved by the board, according to a statement. The rights plan is set to expire in a year.

The poison pill comes after Toro 18, which is part of Immersion Corp. ( IMMR ), on Thursday disclosed its stake in Turtle Beach  in a 13D filing.

Toro 18 has an activist background and could be looking for the company to make changes, Roth MKM analyst Sean McGowan wrote in a note on Friday.

"A key part of our investment thesis has been that Turtle Beach could be the target of renewed interest on the part of potential bidders," McGowan wrote in the note.

News of the poison pill also comes after Turtle Beach ( HEAR ) announced in August that it ended plans to sell itself.  Turtle Beach ( HEAR ) said it decided not to sell itself following a strategic review that included "discussions with 109 parties" about some kind of deal.

"Since that process ended, the gaming industry has stabilized, Turtle Beach's results have improved and its share price has fallen," McGowan, who has a buy rating and $16 price target on HEAR wrote in the note.

Earlier this month Turtle Beach ( HEAR ) extended a $25 million share buyback until 2025.

For further details see: