Wynnefield Partners Dumps MusclePharm
Wynnefield Partners is dumping MusclePharm ($MSLP) in more ways than one. The fund sold off close to 40% of its shares, now owning 4.7% of the company - down from the 7.7% stake it had when it went active in April. CONSAC is still active here with a 7.4% stake after they went active in May.
Here are our previous notes on MSLP that we put out via Activist Strategy.
But the story gets better. Wynnefield said that it was selling because MusclePharm may not be able to continue as a going concern for much longer. Bankruptcy is a very real possibility if it does not do a dilutive capital infusion, which would also be negative for shareholders.
Recall that back on June 8 Wynnefield sent a letter to MusclePharm. Here were the highlights, where it wanted the company to do the following:
1) “Issue an immediate press release correcting any material misstatements regarding the Company’s current liquidity and cash flow position.
2) Announce the opening of a window for shareholder submission of nominees for election to the Company’s Board, including nominees to fill the newly created seventh board seat, in accordance with Nevada corporate law.
3) Provide a full explanation surrounding the mass resignation and replacement of the three independent directors of the Company.
4) Engage a qualified investment bank to assist management and the Board to fully explore all strategic opportunities to increase shareholder value, including auction of the Company.”