Sign manufacturing company Daktronics (US:DAKT) finished the trading week with 15.6% in gains after activist investor Alta Fox Capital announced its latest campaign against the firm’s management team.

On Friday, Fintel reported that Alta Fox Opportunities Fund, LP filed a 13D form with the SEC disclosing ownership of 2.66MM shares of Daktronics, Inc. (DAKT). This represents 5.9% of the company.

The latest filing follows an initial announcement from the Texas based alternative asset management firm on the 19th of January which called for a change in leadership by removing Chairman and CEO Reece Kurtenbach and CFO Sheila Anderson from the company.

At the time of the initial letter last week, Alta Fox disclosed a 4% shareholding in the company and told the market that Daktronics had ignored a proposal from the fund last month that discussed governance enhancements and a financing solution.

The letter was sent after the company delayed its second quarter result filing in December citing supply chain and liquidity issues. Alta Fox said it had provided a term sheet with a financing solution that was disregarded.

Alta Fox’s managing partner Connor Haley said in the letter “Your silence leads us to believe you are either unable or unwilling to make the difficult”

Since the initial filing last week, Alta Fox has accumulated almost 2% more of the company’s float and is currently the largest shareholder on the register.

The activist also highlighted that since Kurtenbach took over as CEO in 2013, Daktronics has lost around -60% of its value compared to the Russell 2000 which has risen more than 110% during the same period.

Alta Fox Capital is now threatening to proceed with a sustained public campaign that will expose the underlying dysfunction at Daktronics and to ultimately instil new leadership.

When Daktronics released its delayed filing of second quarter results in December, the company reported a 14% growth in net sales to $187.4 million with orders rising 11.7%.

Net income swung from a $2.4 million profit in 2021 to a -$13.0 million loss in the quarter as rising costs and a significantly higher tax expense deemed as a “non-cash deferred tax asset valuation adjustment”.

The group’s backlog remained at historically high levels of $463.1 million however the group’s cash balance slid to $6.4 million.

Daktronics Inc. Background Information

(This description is provided by the company.)

Daktronics has strong leadership positions in, and is the world’s largest supplier of, large-screen video displays, electronic scoreboards, LED text and graphics displays, and related control systems. The company excels in the control of display systems, including those that require integration of multiple complex displays showing real-time information, graphics, animation, and video. Daktronics designs, manufactures, markets and services display systems for customers around the world in four domestic business units: Live Events, Commercial, High School Park and Recreation, and Transportation, and one International business unit.

Fund Sentiment

There are 179 funds or institutions reporting positions in Daktronics, Inc. This is a decrease of 75 owner(s) or 29.53%.

Average portfolio weight of all funds dedicated to Daktronics, Inc. is 0.0529%, an increase of 74.5429%. Total shares owned by institutions decreased in the last three months by 3.16% to 22,858,223 shares.

What are large shareholders doing?

Alta Fox Capital Management, Llc holds 1,748,098 shares representing 3.84% ownership of the company.

Acadian Asset Management Llc holds 1,364,721 shares representing 3.00% ownership of the company. In it’s prior filing, the firm reported owning 1,721,422 shares, representing a decrease of 26.14%. The firm decreased its portfolio allocation in DAKT by 23.71% over the last quarter.

Kovack Advisors, Inc. holds 1,229,600 shares representing 2.70% ownership of the company. In it’s prior filing, the firm reported owning 1,054,700 shares, representing an increase of 14.22%. The firm increased its portfolio allocation in DAKT by 16.80% over the last quarter.

Renaissance Technologies Llc holds 1,083,448 shares representing 2.38% ownership of the company. In it’s prior filing, the firm reported owning 1,413,214 shares, representing a decrease of 30.44%. The firm decreased its portfolio allocation in DAKT by 17.52% over the last quarter.

Private Advisor Group, LLC holds 1,048,050 shares representing 2.31% ownership of the company. In it’s prior filing, the firm reported owning 988,050 shares, representing an increase of 5.72%. The firm decreased its portfolio allocation in DAKT by 99.52% over the last quarter.

This article originally appeared on Fintel

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