Ammo’s top investor seeks board control, nominates 7 new directors

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BOSTON (Reuters) -Ammo Inc’s largest investor wants to take control of the ammunition manufacturer’s board and boost the firm’s profit through growth in e-commerce of firearms, outdoor sporting and related goods, according to a letter seen by Reuters.

Steve Urvan, who owns 17% of the Scottsdale, Arizona-based company and sits on the board, nominated seven director candidates, including himself, his letter to other shareholders said. The candidates have experience in firearms manufacturing, e-commerce and mergers and acquisitions.

Urvan sold GunBroker.com, a company he founded and ran for over two decades, to Ammo in 2021 and believes the company could reach $1 billion in annual sales over the coming years by growing the online platform and entering new categories.

Ammo this month announced plans to separate its manufacturing and online marketplace, just 16 months after completing the acquisition of GunBroker.com.

The company said it is “focused on executing on our strategy to drive long-term shareholder value” and that it disagrees with many of Urvan’s “assertions and analysis.” It said it will provide additional information for shareholders in the coming days and weeks.

Ammo’s stock price climbed as much as 2.8% in early trading on the news and then wiped away some gains to change hands at $3.97, up 1.02%.

The company, Urvan argues, should adopt a new strategy to transform itself from a conventional ammunitions manufacturing business to a diversified e-commerce platform. He acknowledged that he is taking “a relatively extraordinary step for a sitting director” with his plan to take control of the board.

Shareholders will be able to vote on directors at the company’s annual meeting due later this year.

Urvan thinks new directors could assess Ammo’s leadership team, cut costs in its ammunitions segment, focus more on higher growth opportunities in e-commerce and consider possible acquisitions in related areas including sporting goods, apparel and collectibles. Ultimately he would also like to separate the CEO and chairman roles, a trend in corporate governance.

Before Ammo bought GunBroker.com, the company posted five years of net losses as expenses rose, Urvan wrote. Ammo’s share price has lagged peers, tumbling 47% in the last 52 weeks. Rival Clarus (NASDAQ:CLAR) Corp’s shares fell 18% and Vista Outdoors’ stock dropped 29% during the same time.