Investor becomes activist in NTN Buzztime (NYSE-Amex: NTN), says shares are undervalued and potentially worth $25.00-$50.00

Investor becomes activist in NTN Buzztime (NYSE-Amex: NTN), says shares are undervalued and potentially worth $25.00-$50.00

PR Newswire

NEW YORK, Feb. 20, 2018

NEW YORK, Feb. 20, 2018 /PRNewswire/ -- In a letter to NTN's Board of Directors, Sean Gordon discloses an 8.63% stake & requests himself to be nominated to the Board. He says NTN's inability to grow sales over the years has depressed its stock price, and shares could be worth $25.00 - $50.00.

Investor cites several management deficiencies over the past 10 years:
1) Stock has depreciated 83% from $31.00 to $5.41 (12/30/07 to 1/22/18).
2) Company continually makes false narratives regarding potential new sales growth, to be driven by its latest marketing tactics & product releases.  However, the complete opposite has occurred over the past decade - a 25% reduction in net revenue, a 30% reduction in net site count, and $30 million in accumulated losses.
3) Overdependence on a single large customer.
4) Company's undue reliance on: financial tricks such as reverse/forward stock splits, shareholder dilution, endless cost cutting; poor marketing tactics via player partnerships that are de-minimis to net revenue & site growth; vague sales strategies per the Company's earnings calls/disclosure filings; and endless excuses as to why sales never materialize.
5) Sales skills are not central to the core DNA of the Company or the Board.
6) Company losing its grip on its main gaming market & moving too tepidly into adjacent markets.
7) NTN stock appears depressed at $5.41 (as of 1/22/18), yielding a market cap of $13.6mm, which is roughly 61% of its annual sales.  In comparison, the average technology company trades at 3x or 300% of annual sales, which would equate to a stock price of approximately $26.61.  Also, if net revenue growth was targeted higher than the 5% level the Board sets for executive bonus compensation (a low bar it can't even reach), the stock could potentially move towards $50.00+.  

Investor proposals:
1) Nominates himself as a candidate for election to the Board of Directors at the 2018 annual meeting of stockholders.
2) For the Company to give shareholders direct access to the Company's proxy materials.
Note:  Investor wants to leverage his core sales skills, as a 20-year sales professional, to work with the Company to overcome its long-term sales malaise.

Investor background:
1) Sean Gordon was a Managing Director at Barclays Capital and the Head of U.S. Retail Sales for Alternative Investments (2001-2013). He built the firm's Retail Division from the ground up, increasing sales from $200 million to $5 billion+.  From 1994-2001, he worked at UBS as Director of Retail Credit Sales, spending one year as the U.S. Head of E-commerce to scale his unit's successful sales model to the firm's entire Fixed Income Division.
2) Holds a BA in Finance and MBA in Management.
3) Has over 25 years of experience as a professional investor.
4) Is currently active in a portfolio of investments.
5) Long term investor in NTN.

Full letter to NTN's Board of Directors: 
https://www.sec.gov/Archives/edgar/data/748592/000147793218000647/ntn_ex991.htm

SEC-13D filing:
https://www.sec.gov/Archives/edgar/data/748592/000147793218000647/ntn_sc13d.htm

Sean Gordon
Email:  [email protected]

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SOURCE Sean Gordon

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