Findell Capital Management LLC Applauds Oportun (OPRT) in Announcing Cost Savings Measures
NEW YORK, May 9, 2023 /PRNewswire/ -- On May 8th, 2023, Oportun (Nasdaq: OPRT) reported financial results for the first quarter ending March 31, 2023. In their press release, OPRT announced an additional reduction in overhead costs of $78-83 mm, which complements their prior announced cuts of $48-53mm.
These cost cuts demonstrate that OPRT's board and management team were willing to constructively read our letter and listen to our concerns and the concerns of other shareholders. We applaud them for taking this step in the right direction.
As stated in our original letter (see here), OPRT has the potential to generate significant earnings should the cost structure be right-sized. The cost cuts envisaged so far (~$130mm) should get OPRT to an operating expenditure base below $500mm by 2024, which would allow OPRT to generate +$3 in EPS that year.
While we are heartened to see this pivot, we remain concerned that the company is still leaving open the possibility of a return to fintech growth initiatives as evidenced by continued spending in the area. We would implore management to entirely eliminate this spending and not ramp it back up at the first sign of economic improvement.
We believe that to ensure a full pivot back towards managing costs and focusing on specialty lending, the board should not be compensating management on metrics like adjusted EBITDA, but on metrics like return on tangible common equity. We would additionally like to see management judged on how well they keep operating expenses below certain thresholds and the long-term share price performance.
Today's share price reaction demonstrates the market's receptiveness to these cost-cutting efforts and OPRT's renewed focus on its core specialty lending business.
Further efforts in this direction will be further rewarded by the market and will more importantly ensure a bright future for OPRT.
Brian A Finn
CIO
Findell Capital Management LLC
Contact: info@findell.us
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SOURCE Findell Capital Management, LLC
