Windward Management Issues Letter To NETGEAR Board Advising The Immediate Repurchase Of At Least 25% Of The Shares Outstanding, ~$100M, & the Formation Of A Strategic Review Committee To Examine Splitting Off And/Or Selling The NFB Segment
$NTGR
Telecommunications Equipment
Utilities
- Current net cash is equal to ~80% of NETGEAR's market cap & recent company-provided 2024 free cash flow guidance implies a de minimis, to potentially negative, enterprise value by year-end
- Windward believes splitting off the NFB segment would create significant shareholder value as diligence and comp analysis suggest this historically growing and highly profitable enterprise business is likely worth the entirety of the market cap, let alone the paltry enterprise value
- Market is ascribing almost no value to NETGEAR's business, despite the Company being a market leader in Consumer WiFi (~35% market share) and possessing a hidden gem in NFB
- Implores board to act swiftly to reward shareholders with highly accretive actions ahead of a significant and impending fundamental inflection over the next 6-12 months: WiFi 7 upgrade cycle, COVID replacement cycle/demand, channel restocking off of historically low inventory levels, and a potential easing of competitive dynamics, should the bipartisan ROUTERS Act gain traction
- Windward believes shares have 150%+ upside potential over the next 12-18 months as excess cash is used accretively to shrink dirt-cheap shares, Consumer segment (CHP) returns to normal profitability and the unrecognized value of (NFB) is highlighted/monetized