Embattled Echo Therapeutics (NSDQ:ECTE) issued a new volley against its proxy war rival and largest shareholder Platinum Group, accusing the activist investor of conspiring to tank the company’s stock.
Echo claimed today that a Platinum leader threatened the company’s former CEO via text message, adding that the investment had made some recent deals that hurt other stockholders while lining the company’s coffers.
Platinum launched a proxy context against Echo earlier this year, saying that the company had reneged on its obligations under an agreement reached late last year and that Echo leadership had failed to protect stockholder interests, as evidenced by a dramatic decline in share value over the past 3 years. Platinum has been pushing to unseat interim CEO Robert Doman from Echo’s board and replace him with Shepard Goldberg, the 1st cousin of existing Platinum designee Michael Goldberg.
Doman has been on Echo’s board since March 2013, and took over the company in August 2013 as interim CEO after the sudden departure of long-time chief Dr. Patrick Mooney.
Echo has issued a series of letters to shareholders, questioning Shepard’s qualifications and Platinum’s motives. The company added today that Platinum had spurred a major drop in stock prices in June 2013 and then threatened to cripple Echo’s share prices if the company didn’t play ball.
According to Echo:
The platinum group wants you to believe that it is concerned with preventing ‘value destruction.’
Can that really be the case given the events of June 10, 2013? On that date, as outlined in the Platinum Group’s proxy, members of the Platinum Group sold a total of 121,041 shares, or 30% of the shares traded that day. Those members of the Platinum Group made sixty (60) separate trades, including numerous small trades of 20 shares or less. Perhaps not surprisingly, Echo’s stock, which opened that day at $5.39 per share, closed at $3.97 per share. Consequently, stockholders experienced a single day drop in the value of their shares of approximately 26%. Only a few days later, when Echo’s stock price closed between $2.46 and $2.78 per share, members of the Platinum Group purchased 1,016,388 shares of Echo’s stock over a five-day trading period.
Can that really be the case when Platinum’s Chief Investment Officer, Mark Nordlicht, texted Echo’s former CEO on the evening of January 31, 2013 and made the following threat? "U shd let mkt know we plan on selling every share down to a penny if u do new deal under 1.00 with new investors. Announce that @******."
ECTE shares were trading at $1.72 today, down 0.6% on the day and down 46.2% since the start of the year.