What's at stake?
Ceragon’s current management and Board have a history of destroying shareholder value.
Over the last five years, Ceragon’s stock has declined 12%, compared to 33% appreciation among Russell 2000 companies; in other words, over the last five years, Ceragon has underperformed the market by a differential of an abysmal 45 percentage points. Looking back ten years, shares of Ceragon have returned -79%, while the Russell 2000 has returned 10%. It’s time for Ceragon to change course.
The Ceragon leaders who oversaw such disastrous returns remain in positions of leadership at Ceragon today
Ira Palti served as Ceragon CEO from 2005 to 2021, during which time he delivered total shareholder return of -21% and, critically, let Ceragon fall behind competitors in the development and delivery of 4G chips.
Palti remains on the Board today, where he fosters a culture of underperformance and has the power to restrict any efforts to correct the mistakes he made.
Palti has wedded the Board to his failed strategy and stands directly in the path of any steps current management could take to reverse Ceragon’s downward trajectory and pursue alternative strategies.
Yael Langer has served on the Ceragon Board even longer than Mr. Palti, since 2000, during which time Ceragon's stock has fallen 80%.
A third Ceragon director, David Ripstein, is too beholden to Chairman Zohar Zisapel to have the independence to fix anything, having spent nine years as CEO of RADCOM, another company founded by Zisapel and a part of the RAD Group, of which Ceragon is also a member.
Ceragon's leadership is failing
Ceragon’s performance represents management’s failures, first under Ira Palti and now under his successor, Doron Arazi. The Company’s gross margin has declined from 34% in CY19 to 30% over the last twelve months, during which time Ceragon has generated negative free cash flow of $42 million. The strategy of the current leadership team simply is not working.
Looking ahead, Ceragon’s existing strategy continues to present significant execution risk. Ceragon leaders say things are going to turn around, but much of its forecasted improvement is based on the rollout of a next generation chip that has been mismanaged and repeatedly delayed. Ceragon leaders have given shareholders conflicting timelines and asked them to sit patiently while their investment is destroyed. With stagnating innovation and a non-differentiated product offering in an already saturated market, Ceragon has no strategic plan for improvement and no clear path for growth.
Vote now for a change
Vote FOR five new, independent director nominees, who will bring an independent and objective perspective to Ceragon, seriously consider all value creation opportunities, and commit to correcting Ceragon’s downward trajectory.