NN ARBOR, Mich., Jan. 03, 2017 (GLOBE NEWSWIRE) -- Arotech Corporation (Nasdaq:ARTX) today announced the early termination of its employment agreement with Steven Esses, Arotech’s president and CEO and a member of the Board. Mr. Esses left the Company and resigned as a director of the Company and as an officer and director of all of the Company’s subsidiaries effective December 31, 2016. The early termination was by mutual agreement.
The market has reacted very positively to this announcement.
In December 2015, I presented my thesis for investing in Arotech:
I have a small position in Arotech http://www.arotech.com
It is was a speculative bet. At the time of purchase my view was that the company had some assets of value; however, they were compromised by management. The share price declined, but I held on in the hope that the company would eventually see sunshine.
It appears that a deep-pocketed investor is proposing to shake things up.
http://finanacialpassagemaker.blogspot.ca/2015/12/artotech-some-thoughts-to-consider-when.html
In the above-noted post, I also presented information about the CEO and President of Arotech. Having experienced the depredations of a President who was hired without any knowledge of the business I was in, I know on a first-hand basis, how such people can derail the operations of an enterprise: employees soon learned not to speak their minds; strategic mistakes were made; the individual lost respect within the "community", employee turnover rates approached 30 percent annually (I was a "leaver"), etc. He was finally booted out by the Board. A few years on, the organization is prospering under new leadership. I don't know if there is a direct parallel with Arotech - this cannot be known except by insiders.
It usually takes time for change to be effected: delaying tactics of the company executives and the board members appointed by them have to be overcome; there may be legal obstacles, financial controls take time to be implemented and so on. However, it appeared that Echo Lake Capital prevailed and that initial steps had been taken to turn the company around:
http://finanacialpassagemaker.blogspot.ca/2016/04/update-on-arotech.htmlIn December 2015, I presented my thesis for investing in Arotech:
I have a small position in Arotech http://www.arotech.com
It is was a speculative bet. At the time of purchase my view was that the company had some assets of value; however, they were compromised by management. The share price declined, but I held on in the hope that the company would eventually see sunshine.
It appears that a deep-pocketed investor is proposing to shake things up.
http://finanacialpassagemaker.blogspot.ca/2015/12/artotech-some-thoughts-to-consider-when.html
In the above-noted post, I also presented information about the CEO and President of Arotech. Having experienced the depredations of a President who was hired without any knowledge of the business I was in, I know on a first-hand basis, how such people can derail the operations of an enterprise: employees soon learned not to speak their minds; strategic mistakes were made; the individual lost respect within the "community", employee turnover rates approached 30 percent annually (I was a "leaver"), etc. He was finally booted out by the Board. A few years on, the organization is prospering under new leadership. I don't know if there is a direct parallel with Arotech - this cannot be known except by insiders.
It usually takes time for change to be effected: delaying tactics of the company executives and the board members appointed by them have to be overcome; there may be legal obstacles, financial controls take time to be implemented and so on. However, it appeared that Echo Lake Capital prevailed and that initial steps had been taken to turn the company around:
It will now be a matter of concentrating on the financials to see if the full potential of investing in the company can be realized.
I normally do not invest in turnaround situations, but this one was too good to pass up. It resonated with my personal experience. Maybe history will repeat itself.
I will maintain my position. The company is well positioned given the proclivities of the "new management" at the White House.
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