The share price of Tix Corp. dropped by 12 percent Wednesday after an open letter from an investor advocated for new leadership on the Studio City company’s board of directors.
Haren Bhakt, an investor in Tix through his firm HSB Capital Partners in Santa Ana, said that he was writing the board to refocus its attention on long-term value creation.
“In order to drive long-term value, we believe new, independent directors must be added to the board to inject a culture of accountability,” wrote Bahkt, who owns about 5 percent of the company.
While based in the San Fernando Valley, the company’s operations are all in Las Vegas where it has nine kiosks under its Tix4Tonight subsidiary. They sell tickets for up to 50 percent off to shows, concerts and other attractions, as well as discount dining and shopping offers. In 2017, the company began offering its tickets online and through mobile devices
Bahkt took issue with the compensation that Chief Executive Mitch Francis and two other top executives received, including an $861,000 bonus in 2016, despite the decline in the company’s revenue, operating income and share price.
“While logic would dictate management being fired for this performance, the board awarded a bonus! Clearly there is a lack of alignment of interests with shareholders,” Bahkt said in the letter.
Bhakt recommended in the letter that the board be “refreshed with new independent directors who can bring fresh perspectives, rigorous financial discipline, and who are able to evaluate and act upon opportunities for value creation.”
Shares of Tix (TIXC) closed Wednesday down 3 cents, or more than 12 percent, to 21 cents on the over-the-counter market.