Lemelson Capital Management calls for Removal of Geospace Technologies (NASDAQ: GEOS) Senior Executives, Sale of Company
Firm seeks public and transparent filings
Marlborough, MA, February 9, 2017—Lemelson Capital Management, LLC, a private investment management firm, announced today it is calling on the board of directors of Geospace Technologies (NASDAQ: GEOS) to remove CEO Rick Wheeler and CFO Thomas McEntire. In addition, it is urging the board to explore an immediate sale of the company. Geospace is a global leader in the design and manufacture of instruments and equipment used by the oil and gas industry.
The full letter can be found here
“CEO Rick Wheeler and CFO Tom McEntire have recently and knowingly allowed the filing of a materially misleading form 8-K with the Securities and Exchange Commission (SEC), failed to design and maintain controls over financial reporting, and allowed dysfunction and incompetence to lead to the loss of major contracts,” said Fr. Emmanuel Lemelson, Chief Investment Officer of Lemelson Capital Management.
Geospace Technologies stock price recently hit a new 52-week low, plummeting nearly 90 percent since Mr. Wheeler took over as CEO in January 2014, despite the extraordinary industry-wide recovery in the oil and gas sector which has led to the stock price of several of the company’s competitors recently achieving new 52-week highs. In addition, the decision by Statoil (NYSE: STO), one of the world’s oil and gas majors, to stop using Geospace’s services underscores the failures of current management, and places at risk what should be a shoe-in win of the PRM contract for Petrobas’ (NYSE: PBR) giant Roncador field expected in 2018.
“We believe that given the company’s vast unencumbered assets and market-leading technology, Geospace stock is worth at least $38 per share today,” Lemelson continued. “To allay the legitimate concerns and uncertainty now flooding the marketplace and provide much needed transparency. we are calling on the board to immediately correct all public filings with the SEC, and to remove Mr. Wheeler and Mr. McEntire for breaching their fiduciary responsibilities and for violating securities laws and regulations. In addition, we ask that the board immediately engage an investment bank to explore a sale of the company,” Lemelson added.
Disclosure: Lemelson Capital Management, LLC owns approximately 10 percent of the outstanding shares of Geospace Technologies stock for its clients.
 Given the divestiture of PGS’s PRM business and the fact that Nokia is likely at full capacity, the loss of any of the 8 fields in the portfolio Petrobras has designated for PRM systems would be indefensible
About Lemelson Capital Management
Lemelson Capital Management, LLC is a private investment management firm focused on deep value and special situation investments. For more information, see: http://www.lemelsoncapital.com
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