ON24 Inc. ( NYSE: ONTF ) rose 3.6% amid a repeated call from an activist investor to improve the company's stock price and for the company to return capital to investors.
Indaba Capital Management, which as a nearly 9% stake in ON24 and said its the company's second largest holder, urged the company to establish stablish a specific plan for returning $150 million to shareholders, according to a letter Indaba wrote to ON24's board.
"There is no plausible rationale for ON24 keeping so much cash on its balance sheet, especially when the company has not disclosed a clear and credible plan for investing that capital and producing strong returns for shareholders," Derek Schrier, managing partner of Indaba Capital, wrote in the letter.
The activist latest push comes after the investor in December said the company's board needs to take urgent action to improve its stock price, balance sheet and valuation. ON24 shares fell 50% last year and 80% since its first day of trading in February 2021. ON24 ( ONTF ) offers webinars and other video-based marketing efforts that help B2B companies reach out to current and potential customers. ONTF stock gained 13% this year before Wednesday.
Indaba proposes that ON24 should implement a $75 million dividend, a $50 million accelerate share repurchase plan and a $25 million 10b5-1 plan.
The activist investor also wants ON24 to appoint an Indaba designee as a director, de-stagger its director classes and set up a committee of independent directors to oversee capital allocation.
ON24 ( ONTF ) is scheduled to report Q4 results on Feb. 28.
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ON24 gains amid activist call for company to return $150M to shareholders