The drama continues at MindMed. The (former?) fan-favorite has had a rough run, facing an industry-wide drop in share price while dealing with a string of announcements that have (rightly or wrongly) hurt the confidence of retail investors. Now, MindMed is facing a mini-coup attempt as activist investors attempt to take over MindMed’s board of directors.
FCM (Freeman Capital Management) is a group managed by Jake Freeman (a 20-something meme-stock investor) representing early investors in MindMed, including Scott Freeman and Chad Boulanger, who collectively own approx 5% of MindMed’s shares. And FCM has been causing quite the ruckus.
FCM is forcing a vote on a group of new board members at MindMed’s 2023 Annual General Meeting on June 15th. These are FCM-friendly board members who will not only implement FCM’s vision for MindMed’s future but, perhaps most importantly, give FCM de facto control of the company.
Yesterday, MindMed released a letter detailing the vote to shareholders and laying out the case for their board members versus the proposed FCM candidates.
Some context. Jake Freeman’s father, Scott Freeman is a MindMed co-founder and former CMO (back in MindMed’s early days). He and his son Jake have been rocking the MMED (or MNMD) boat, from suing a fellow MindMed co-founder to starting FCM and attacking MindMed’s current management. FCM has made some very public calls for company restructuring, firing of executives, and basically complaining about everything MindMed has ever done.
While FCM has raised some legit questions around MindMed’s IP protection and shareholder compensation — the majority of their complaints, in my opinion, seem heavy on the dramatic yet lack details or compelling arguments. In some cases, their contentions and propositions seem pretty amateurish.
From MindMed’s letter to shareholders, detailing why FCM’s complaints lack legitimacy.
And some details on MindMed’s proposed board members, arguing that they have the necessary biotech and industry experience.
Freeman’s antics are hurting MindMed investors
Are FCM’s motives actually in line with those of retail investors, or are they using the current downturn to get themselves in a power position within the company?
Impossible to know for sure, but reviewing the case presented by FCM shows that besides some dramatic press releases, FCM has been unable to present anything substantive to back up its complaints. A series of interviews with both Jake Freeman and MindMed CEO Robert Barrow show the difference in depth of knowledge and general seriousness.
And unfortunately for MindMed investors, the Freeman’s boat rocking has hurt the stock considerably. MindMed has a huge base of retail investors who’ve been hurt by the extended market funk. A great many of these retail and Reddit-based investors were losing patience with biotech’s long developmental timelines and were waiting for someone to blame — something FCM delivered.
MindMed’s stock was already battling tough market conditions and this drama and mostly unnecessary panic among retail investors only drove the stock further down (I blame the expectations and education many retail investors received during the GameStop/meme stock craze, but that’s a conversation for another day).
Disclosure: I do hold MindMed shares, and as an investor and someone who covers the space I can’t help but lean toward the experience of MindMed’s proposed leadership team.
Stay tuned to Microdose for more on this story as it unfolds.
For more on MindMed, check out MindMed Announces Positive Data from Phase 2 LSD Trial for Depression and Key Takeaways from MindMed’s 2023 Corporate Update