Stockholder advises IASG's next move
ALBANY, N.Y.--Worried about the steep decline in Integrated Alarm Services Group's stock price, the company's major stockholder suggested it is time for a sale in a letter filed Monday with the U.S. Securities and Exchange Commission and the board of directors of the alarm monitoring company.
Contrarian Capital Management of Greenwich, Conn., which owns 13 percent, about 3 million shares, of Integrated Alarm Services Group stock, filed a letter addressing the stock price, which has taken a 78-percent drop, from $9.25 to $2, in the past two years.
Contrarian, a private investment company, is worried about IASG's attrition rate, which in the first quarter of this year was 10.9 percent and increased to 17.8 by the end of the third quarter in September.
The letter read, "We believe that this deterioration of shareholder value...will continue unless the board retains an investment banking firm for the purpose of maximizing shareholder value by strategically selling the entire company," wrote Jason Mudrick, a Contrarian portfolio manager, reported by the Times Union.
Contrarian's Mudrick could not be reached before Security Systems News' deadline.
Joseph Reinhart, head of investor relations for IASG, said the company has no plans to sell.
Reinhart noted that there are multiple ways to create shareholder value. "[For IASG], first and foremost is to have a successful execution of the business plan, such as growing the value of their investment," he said.
The company's net loss for the third quarter was $5.4 million, or $0.22 per share, compared to a net loss of $2.1 million or 9 cents per share in the same period last year.
An IASG third-quarter 2005 press release attributed the loss to lack of customer service caused by personnel turnover in IASG's Las Vegas monitoring center.
Despite the disappointing attrition rates this year, the company in early October acquired the operating assets of Financial Security Services and its $17 million loan portfolio and specialty lending business for $23 million.