Wynnefield Partners Dumps MusclePharm (MSLP)

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Wynnefield Partners Dumps MusclePharm  (MSLP)

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.

 

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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.

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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.”

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