Vadim Perelman resigned as a member of the board of directors at USA Truck Inc. of Van Buren after his investment group divested itself of the 1.4 million shares it had owned in the trucking company.
Share price in the stock has dropped nearly 25 percent since the company announced the secondary sale of 2 million shares, which was completed Wednesday. Company executives believe the price drop is a “technical disruption” caused by the announcement and, in their consultations with investors, are optimistic of a price recovery.
Perelman is the founder and manager partner of Baker Street Capital Management, whose ownership stake represented 13.2 percent of USA Truck’s shares. Perelman had been appointed to the board in May 2014 and had just been re-elected at the company’s shareholders meeting May 7.
USA Truck CFO Michael Borrows said the company, which expanded the board to accept Perelman and Thomas Glaser in May, will not fill the spot left open by Perelman’s departure. Glaser is now the company’s interim COO while CEO John Simone is on a medical leave of absence for treatment of lung cancer.
USA Truck announced Wednesday the closing of a public secondary offering of 2 million shares that were held by Baker Street and Stone House Capital Management, led by Mark Cohen. USA Truck said the stock was sold for $20 per share.
Stone House, which owned 1.55 million shares (14.6 percent) of USA Truck, put up 600,000 shares. It now owns 950,000 (8.9 percent) and, as it stands now, is still the largest shareholder in the company.
“Stone House is a long-term investor in our stock,” Borrows said. “[Cohen] believes there is a lot of room to run.”
Borrows said since Stone House’s ownership stake dropped below 10 percent, it will reduce the amount of filings required by the Securities & Exchange Commission and “make life easier” for Cohen.
USA Truck shares (Nasdaq: USAK) were trading at $31.13 when the secondary sale was announced and closed Wednesday at $23.36. The company said the secondary offering was made because USA Truck shares are not heavily traded so a directed mass sale of shares would be less volatile than a drawn-out process.
“The disturbance is short term,” Borrows said. “I don’t know if it will be a week, a month or six months.”
Baker Street bought it shares in November 2013 when the price hovered around $13. The sale Wednesday would represent an approximate profit of $9.8 million.
Borrows said, as a member of the board of directors, Perelman was restricted in how quickly he could reduce his stake in the company. He said the company and Perelman had a good relationship the past year.
“We were and are on good terms,” Borrows said. “It was Vadim’s decision to sell or not to sell.”
Stone House purchased its shares in multiple transactions with the price fluctuating in the mid-teens. Cohen, in a statement in February, said the company wanted “flexibility to trim our holdings in the future,” and Stone House agreed to vote according to the board’s recommendations at the shareholders’ meetings in 2015 and 2016 with exceptions for special situations.
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