Kintera Inc. (NYSE:KNTA) shares moved down marginally after Coghill Capital Management disclosed a ten percent stake in the company and expressed its support for a change in the role of chief executive officer.

The activist hedge fund said in a letter, "In our view, Harry's track record with respect to managing Kintera has demonstrated an ongoing inability to achieve business goals and objectives resulting in destruction of shareholder value, as well as the squandering of a considerable market opportunity for which Kintera's solution is well suited to take advantage of. Kintera's lack of acquisition integration and cost rationalization have led to massive and ongoing losses necessitating several equity financings that have been significantly dilutive to existing shareholders. Unrealized performance projections and consistent cash burn have caused the investment community to become disenchanted; as evidenced by Kintera's current $1.30 stock price (as of close on February 5, 2007), which is a fraction of the Company?s $7.00 per share IPO price in 2003.

As Harry is both the Chairman and Chief Executive of the Company, we
 are concerned that he has the ability to exert undue influence over strategic and operational decisions without meaningful checks and balances.  Further, as we view a certain level of dialogue between boards of directors and investors to be important and constructive, we are especially concerned with Kintera?s policy of prohibiting independent board member communication with the investment community. In this particular case, we view such communication to be key to catalyzing change and we support Harry's replacement with a professional manager as a necessary step to drive Kintera to sustained profitability."

Clearly, a new chief executive could help turn around the company and prevent any further deterioration in value. A turnaround CEO could even help the company further its objectives and improve its condition. Combined, these factors make KNTA a stock worth watching!

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