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indell Capital Management LLC Issues Statement to the Stockholders of Oportun Financial Corporation (OPRT)

December 4, 2023 8:38 AM EST

Findell Capital Management LLC (together with its affiliates, "Findell Capital" or "we"), which beneficially owns approximately 5.4% of the outstanding shares of common stock of Oportun Financial Corporation (NASDAQ: OPRT) ("Oportun" or the "Company"), today issued the following statement to all stockholders of Oportun.

Dear Fellow Stockholders:

Findell Capital Management LLC (together with its affiliates, "Findell Capital" or "we"), has been a significant stockholder of Oportun Financial Corporation (NASDAQ: OPRT) ("Oportun" or the "Company"), and we recently acquired a greater than 5% ownership stake of the Company's outstanding shares of common stock.

We are writing to our fellow stockholders today because we believe that Oportun's board of directors (the "Board") is not acting with the sort of urgency required to address the Company's dire situation.

Oportun's performance under the current management team speaks for itself.

Since its IPO in late 2019, Oportun has delivered a total stockholder return of -82% while its competitor OneMain Holdings, Inc., subject to the same macro environment, has returned +78% inclusive of dividends.

These divergent returns speak not to the quality of Oportun's lending franchise but to the incompetence of its CEO Raul Vazquez and the non-existent oversight provided by the Board.

Oportun's core business is a great one. Under the right cost structure, the Company should generate +$3-$4 in earnings per share and the stock should trade for +$20 a share versus $2.60 a share today.

What stands in the way of realizing these earnings and subsequent stockholder returns is leadership.

This Board does not have a single member with subprime lending experience. Mr. Vazquez previously worked at Walmart.com before becoming CEO of Oportun. This lack of industry-specific knowledge is reflected in their decision-making. Oportun has made several expensive forays into tangential business areas with little understanding of the risks involved.

In addition to capital allocation mistakes, Mr. Vazquez has created an extravagantly bloated expense structure as we noted in our public letter to the Company in March, 2023.

In March, we gave the Company very clear guidance as to what to do – take out overhead, shut down tangential business lines and focus on the profitable core business that can generate $3-4 a share in earnings.

Following our letter, Oportun did make some cost cuts, to which the market reacted favorably, but they were not nearly enough, as Mr. Vazquez sought to preserve the sprawling businesses he had created. They did not divest their non-core businesses.

In our subsequent calls with the Board, the members of the Board offered unmitigated support for Mr. Vazquez, which is astonishing given his track record to date.

Today, the Company is apparently seeking to make all the changes that we asked them to make 6 months ago. That these changes, which were obvious to stockholders, did not occur sooner reflects the Board's lack of independence from Mr. Vazquez and his failed vision.

Given the Company's very depressed share price, we would expect lead director Neil Williams to show some urgency. To date, we have not seen evidence of leadership from Mr. Williams in making the relevant course correction needed here.

We urge Mr. Williams and his fellow Board members to take their fiduciary responsibilities to Oportun's stockholders seriously.

To show that they do, they must take the following steps:

1) Sell the credit card business with no strings attached.

2) Reduce operating expenditures to below $350mm a year with the loan portfolio right sized accordingly. There should be no need to do any dilutive financing if the company reduces loan size and operating expenditures accordingly.

3) Replace Mr. Vazquez with an experienced operator. We have several candidates who could act in stockholders' interest.

4) Replace the current Board members up for election (Roy Banks, Ginny Lee, and Louis Miramontes – we note that none of whom have relevant experience) with candidates who have non-prime consumer lending experience. Again, we have candidates we can put forward.

5) Eliminate the stockholder unfriendly staggered board structure.

If the Board starts to re-position this Company accordingly, Oportun will be a +$20 stock in short order.

We reiterate that we do not want a costly proxy battle to further distract and embarrass this Board and drain this Company of capital. However, if we cannot work constructively with the Board to make these obvious changes, we will not hesitate to take further action and we will put forward our own slate of candidates.

This Board will ultimately be forced to respond to stockholders – either by taking decisive actions today or through legal proceedings at a later date.

We urge our fellow stockholders to hold this Board accountable for their lackadaisical approach to date.

Sincerely,

Brian Finn
Chief Investment Officer
Findell Capital Management, LLC



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