WEST PALM BEACH — AI-powered attribution specialist Veritone Inc.‘s fall 2017 stock surge, and subsequent dip, has been a much-reported story. A jump from $15.56 to $45.45 and slide to $17.75 by the start of 2018 had some wondering if this tech company actively working with radio and TV stations was on the right track for long-term growth.
Now, some may wish Veritone stock was worth even half of what it was priced a year ago.
As of 3:09pm Eastern Friday, Veritone was off by 1.4%, to a new all-time low of $3.9235.
It’s a hard fall for a once high-flying issue that appeared to be a hot tech issue just 15 months ago.
Today, its market cap is $75.38 million and has seen a steady decline in its stock price since June 11, when shares were valued at $23.06.
The last two weeks have been particularly harsh for Veritone shareholders who have owned the stock since its partial IPO in mid-2017.
What’s fueling the decline? On Dec. 12 Bragar Eagel & Squire, P.C. revealed that it is investigating potential claims against Veritone’s board of directors on behalf of stockholders concerning a proposed acquisition of the company by Apis Capital Management.
A day earlier, WeissLaw LLP made a similar announcement, echoing Bragar Eagal & Squire in announcing an investigation into whether Veritone and its board violated federal securities laws and/or breached their fiduciary duties to stockholders by failing to conduct a fair process and whether and by how much the proposed transaction undervalues the company.
While largely unreported, Apis confirmed Dec. 10 that its private equity fund, Apis Ventures, has submitted an all-cash offer to the Veritone board to acquire all outstanding shares of Veritone for $10.26 per share.
That’s a huge premium based on where it sits today, and “a result of careful consideration of the opportunity,” Apis had actually increased an initial offer for Veritone’s outstanding stock.
The Dec. 10 revised offer represented a 93% premium over the closing price of Veritone shares on Dec. 4, the date of Apis’s initial private written proposal to Veritone, and an 82% premium over the closing price on December 7, the last trading day prior to this announcement.
This values Apis’ offer for Veritone at approximately $198 million.
Dr. Edgar Radjabli, Managing Partner of Apis Capital Management, said, “This compelling transaction would deliver immediate liquidity to Veritone stockholders, at a premium to Veritone’s prospects as a stand-alone company.”
Call it a hostile takeover attempt.
Radjabli continued, “Veritone shareholders have seen the management of the company unable to deliver value since its IPO, nor has management been able to provide a compelling vision for a turnaround in the company’s business, and we believe our proposal represents the best possible outcome.”
While Radjabli envisions a March 2019 closing for Apis, he notes that Apis has engaged “in an initial productive discussion with Veritone to explore the merits and potential terms of a transaction, yet Veritone has stalled in moving forward with substantive discussions.”
Apis Ventures is a private equity fund headquartered in West Palm Beach.
To date, Veritone has remained relatively mum on Apis’ offer. On Dec. 10, Costa Mesa, Calif.-based Veritone confirmed Apis’ “unsolicited, non-binding proposal” — adding that Apis’ $10.26 per-share revised bid came following a $8 per share proposal received Dec. 4.
Two days later, on Dec. 6, Veritone indicated that its board would be meeting to discuss the proposal, and would respond following that meeting. At the time, Veritone requested additional information from Apis regarding its financing for its proposal and its experience in executing transactions of this magnitude and scope. “Apis’ response indicated that they do not have committed financing, and do not have any experience or track record in transactions of this nature,” Veritone noted.
With GCA Advisors LLC is serving as financial advisor to Veritone and Gibson, Dunn & Crutcher LLP acting as Veritone’s legal counsel, the company hasn’t commented further on Apis’ offer.
This could suggest both parties are talking — or not — as VERI withers on Wall Street.