Green Dot Talks Harvest, New Products
In Green Dot Corp.’s first earnings call since investor Harvest Capital Strategies called for the ouster of Green Dot CEO Steve Streit and two board members, Streit said that while neither he nor the board members will be going anywhere, the company is open to Harvest’s input on how to improve the company’s performance and its advice on adding potential new board members. Last month, Harvest—a San Francisco-based investment firm that owns a 6.2 percent stake in Green Dot—sent a strongly worded letter to Green Dot’s board outlining concerns with Streit’s leadership and the company’s financial results. The letter also called for the removal of Ken Aldrich, chairman of the compensation and nominating and corporate governance committees, and Tim Greenleaf, chairman of the audit committee.
This week, in Green Dot’s Q4 2015 earnings call, Streit addressed the Harvest situation. “[B]eing open to a wide variety of input, criticism, opinions and perspectives is a really good thing and I’ve taken the underlying meaning of every one of Harvest’s comments seriously,” he said. However, he rejected Harvest’s call for the removal of himself or the other board members. “We feel we’ve done a very good job of strategically guiding our company to a great place over many years and now we are in a position to show Harvest and all of our investors what we can do.”
During the call, Streit also announced that Green Dot plans to grow the size of its board and “would very much like Harvest to help us recruit new members and for them to suggest some names of candidates who they feel would be great additions to our board,” Streit said. “And beyond that, we’re hoping that our performance over time will speak for itself.”
Green Dot’s latest quarterly results were better than expected, with the company reporting earnings of $0.06 per share, beating out the consensus estimate of $0.03 per share. Green Dot earned $151 million during the quarter, compared with analyst estimates of $149.76 million, although overall revenue was down 1.3 percent year-over-year.
Streit also discussed several new products, including a new Walmart MoneyCard and the Green Dot Everyday Visa, for sale at Walmart stores. The company also confirmed that rollout of its new MoneyPak product is on schedule to launch in April 2016. The new MoneyPak, with mobile and Web-based risk controls powered by Green Dot’s GoBank Product Technology Platform, is designed to help the company win back former users of the original MoneyPak, which was discontinued in 2015 because of fraud issues. Finally, Green Dot Bank received regulatory approval to engage in consumer lending and will begin offering a secured Green Dot-branded credit card this year, the company said.
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