Vivint "Single Worst Deal" Alleges Activist Investor Elliott

•Published May 15, 2023 21:25 PM

Beset by legal issues including a recent $190 million judgment, Vivint's problems are growing, with its new owner NRG under pressure from investor Elliott Management which declared the Vivint acquisition "the single worst deal in the power and utilities sector in the past decade".

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In this note, we examine Elliott's May 15, 2023 letter to NRG's board of directors and the risks that Vivint and its new owner face from one of the most aggressive and influential activist hedge funds.

Elliott's *******

******* **********, * $**.* ******* ********** firm ******* ****** ******, ** ***** *** ****** ******** campaigns *** ******** ***** ********* ********** changes. *** ********, *** **** *** pressure ** ******* ** ******** ********** *** **** ******** ****** ** *** *** ****** Chief ********** ******* ***** ******* ** take *** ***** ** ****.

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********* ******* * **% ***** ** NRG ***** $* *******, ******* ** well-positioned ** ***** *********** ********* **** the ****** *******. ** ****, *** hedge **** ********* *** ********** ** NRG *** ****** **** *** ***** on * "************** ****," ***** *** company ** ** ****** *********, ******* said ** *** ******. ******* *********:

***** *** ********** ** *** ***********, NRG *** ******** *********** ********, ****** financial ********, *** – **** *** recentacquisition ** ,* **** ******** ******** **** ***** operational *********** ** ***'* **** ***** businesses – ********* ** *** ****unfocused, ************* ******** model that predated our initial involvement. [Emphasis added]

*** ***** **** **** ** ** presenting * "***** **** ******* *** how ** ****** ***'* *************" *** laid *** *** ********* *******, ***** it ******* ***** ****** $* ******* in ***** *** ***** *** ***** price ** **** **** **% **** its ******* ~$** *** ***** ** executed ** *** **** ** ******.

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"Single ***** ****"

***'*$*.* ******* ****** ** ****** ($*.* billion ********* ******* ****),********* ** ***** ****, *** * major ***** ** *** ******** ********'* complaints. *** ****** ****'* ********* ******* negatively ** *** **** **** ** was ********* ***. *, ****, ******* the ***** ** *******-***** *** ***** to ****** **** **** **% ** Dec. *, ****. ***** ****, ** has *** ******** *** **** ******, as *** ********* ***** *****.

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*** ****** *******'* *********** ** *** Provo, ****-***** **** ******** ******* "***** as *** ****** ***** **** ** the ***** *** ********* ****** ****** the **** ******" ** ******** ** one-week ****** ********, *** ***** **** said ** *** ******.

***lost ********* ********* with its poorly *********, "all-in" pivot to the home security business founded on the acquisition of Vivint. We and other investors struggle to understand why NRG would make such a significant bet on a strategy that many other companies have already failed to execute successfully, especially given the Company's previous lack of success in entering home services. [emphasis added]

*** ********* ******* ** *** ***** price, ****** *** $* ******* ** market ************** ** *** ***** ****, was "**** *********** *** ***********," ******* argued. "*** *********** ********* ** **** near-universal ********** ***** ********* *** ****-**** analysts."

*************** *** *** *** ****** *** not ***** ** ****'* ******** *** comment.

Vivint ***** ***********

***** *** ********* ** *******'* ****** letter, * ********* ***** *** ****** is *** ******* ***** ***** *** to ******** ****** ** ******* ***** practices. ** ******** ****, * ******* jury ** ***** ******** ******* * ~$190 ******* ******* ******* ****** ** a ******* ******* ***** ******** *********** *********** ****** ***** **** ********* through *********.

****** *** **** ** ********** *** *******, ****** **% ** ***** ********* of ******** *******. *** ** *** meantime ** ***** ****** ********* *** ***. **, ****** ******* ** * ************** ***** ** ***,***** ***** *********** ****** ** * larger ******* ******* ** ******** * larger ******* **** **** ********* ***** territory **** ***** ********-***** ***.

***** **** ***** *** ********, ****** has **** **** ******* ** *** following ***** *** *********** *******: *$** ******* ************** *** ******* ***** ********** *** the *.*. ******* ********** ** *** 2021 **** ****** ** ********* *** Fair ****** ********* ***. *************** ***** ********** ** ***** ** **** ******** of ********* ** ******** *** ********* who ***** *** ********* ******* *** financing ** *** *** *******'* ********.

************* ************ ******* **** ** *****-** ***** action ******* ** ******* *** ********* violating ***** *** ******* ************* ************ by ********** ** **** *** **** consumers *** ***** *** ** ** contacted.

*$*.* ******* ************ ******* **** **** *** ******* Department ** ******* *********** **** ****** employees **** ***** ********** ** ********* institutions ** ****** ***** *** *********' purchases ** **** ********** ********. *** legal ****** *** ******* ***** *** Financial ************ ******, ********, *** *********** Act ** **** (******).

Possibility ** * ****

********** *******'* *******, ***** ******* ********** NRG ** *** **** ********** ***** business *** ********* ** ***** **% of **** **** **** ** ************, could **** *** ** **** ******. As *** ***** **** ****** *** in *** ******, ****** **** *** fit **** ***'* **** ********. ********* itself ** ****** ***** **** ** reorient ***'* ********** *** **** ** billions ** ******* ** ****.

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****** *** **** ******,*** **** ** *** ************ ******** *** ******** *** ******** options, ******** ***** ********* **** ** was *********** *********** ******* ***.

Risks *** ******

****** ** ********* ********* ********** *****,***** *****, *** **** ******,****** **** ****** ******* ***** ****** ** ******** * $*.* ******* ********** *********. Since ****, *** ***** ******** *** related ************* **** **** * ***** stumbling *****, ******** **** *** ****** by **% ** ~$* ** ****.

** ********** **** *** ***/*** ***********, Vivint's *********** ******** ********* *** *********** ** May ****.** *** ******** ** *** *******'* former*** ***** *******.*** *******'* ****** ***** ***** ******* Shawn ********* ********* ************** *** ********* *****.

***'* ********,****** ****** ** $** *** *****, *** **** ******* ********* ** more ********* ***** *******. *******, *** recent ********** **** ******* ********** ******* the ******* ** *** **** ****. If *** ***** **** ** **** to ****** * **** ** ******, it *** ** ** * ***** discount **** ** *********** *** ** sight ** *** ***** *******.