TaskUs (TASK)

The second topical example is TASK.This is timely because late last month they concurrently announced earnings,a big refi + special dividend, and a CFO transition.

Last May, Task announced a deal to be taken private by itsco-founders and Blackstone for $16.50/share. The company noted that their business would be significantly impacted by AI, and going private would give them the chance to make needed changes to keep up.

Shareholders were not happy, and I admit that I have a lot of sympathy with shareholders here. Blackstone and the co-founders basically said, “we won’t sell to anyone else; take our deal or accept an uncertain AI future.” That is not a good process and exactly the type of thing shareholders should generally try to stand against. And stand against it they did; shareholders voted the deal down and TASK and Blackstone eventually backed down and broke the deal.

However, TASK’s business is getting rapidly disrupted by AI, and their recent earnings reports make it seem like the business has stalled out. When a business is getting disrupted, it’s not a far throw from “stalling out” to “rapidly shrinking”, and TASK’s share price is perhaps foreshadowing the latter is likely to happen.

I admire TASK’s shareholders for standing up to a flawed process, but when they pushed back on the deal last summer and the company published a note asking shareholders to vote for the deal and noting4 that the buyer had repeatedly refused to increase their purchase price in light of the shareholder frustration, that may have been a signal that all was not alright at the company and they should have just taken the bird in hand and thanked their lucky stars.