on August 4, 2014 - 4:28 PM
Synacor Inc. has hired Comcast Corp. executive Himesh Bhise as its new chief executive officer, ignoring the demands of dissident shareholders that it focus on selling the company.
Bhise joins Synacor after leading Comcast’s new services and platforms group, where he was responsible for developing new content platforms for the Philadelphia-based cable television giant. He also has worked for cable TV company Charter Communications, as well as AOL and consulting firm McKinsey & Co.
“I’m excited to be here. I’m excited about the opportunity,” Bhise said, citing the company’s products, customer relationships, staff talent and cash reserves. “I’m here to figure out how to grow the company, how to find the next tranche of revenues, how to deliver the next set of products and get the next set of customers.”
Bhise replaces Ronald Frankel, Synacor’s CEO since 2001, who announced in March that he planned to resign as soon as the company found a successor.
“We had specific criteria for our new CEO, and we were intensely strategic and deliberate about finding the right person – Himesh is that person,” said Jordan Levy, Synacor’s chairman, in a statement.
The dissident shareholders – investment firms JEC Capital Partners and Ratio Capital Management – own a combined stake of 9.8 percent in Synacor and have been pressuring the company since June to halt its CEO search, replace Levy as chairman and put the business up for sale.
Behind the fight over Synacor’s future is the company’s current financial struggles.
Synacor lost $1.4 million last year as its revenues slid by 8 percent after a change by Microsoft in its Windows 8 operating system relegated the start pages that Synacor operates for its customers to a secondary screen that requires additional clicks for users to access. That led to an 8 percent drop in Synacor’s sales, which totaled $112 million last year, with expectations that sales will decline by an additional 11 percent this year, to $100 million.
“I’m confident the company has the assets, customer relationships and, most importantly, the people to overcome today’s challenges,” Bhise said in the statement, noting that Synacor is at a “pivotal moment” in its history.
Synacor’s management has argued that it thinks its stable of new products, from authentication and single log-in services to new applications for tablets and mobile devices, eventually will catch on and bring in new business that would make the company profitable again.
Synacor’s disgruntled shareholders, on the other hand, contend that selling the company is the best way to provide the company’s investors with a return on their investment. They argue that the company’s new products and services, which have taken longer than expected to develop, are unlikely to have enough of an impact to turn around the business.
Bhise said he is “hoping certainly” to meet with them. “I am open to meeting any significant shareholder of Synacor, because I assume that they have the same motivations I do, which is growing the value of the company,” he said. “Those two firms, and a whole bunch of others, are really important shareholders of the company, and it is absolutely our responsibility to make sure we maximize revenues for all.”
Synacor announced Bhise’s hiring after the stock market closed Monday. The company’s shares, which have lost more than half their value since selling stock in an initial public offering in February 2012, fell by 3 cents to $2.38 on Monday.