Kintera, Inc. (NDAQ:KNTA) shares moved up $0.06, or 4.84%, to $1.30 today after Coghill Capital Management LLC voiced its support to an increasing clamor for change in control of the company. Steven Becker, a 5.8% shareholder, first expressed concern on January 26th over Chairman and CEO Harry Gruber's inability to move the company forward. Specifically, he was concerned over Kintera’s pattern of losses, progressively dilutive financings, inaccurate guidance, and plunging credibility within the investor community. Becker insisted that Gruber's inexperience with Wall Street and tendencies to run the company as more of a "family business than a value-maximizing public company" have led to steep losses for shareholders. After reaching a high of $17.29 during the months following the IPO, Kintera’s share price has plummeted to the $1.25 levels, which has caused serious concern in amongst shareholders. Consequently, Becker maintains that the company could achieve much higher returns if it were run by a compotent manager that is more experienced with Wall Street.

Coghill Capital Management LLC, a 9.9% holder, said today that it would support a CEO change in a Schedule 13D filing with the SEC. The hedge fund also voiced its concerns over company policies that forbid independent board members to hold talks with investors without the CEO's oversight. This policy along with the fact that Harry serves as both Chairman and CEO, leads to undue influence over the strategic and operational decisions without meaningful checks and balances. These decisions, Coghill contends, are what has been driving the stock price down. Consequently, they believe it necessary that Harry Gruber be replaced as head of the company by a professional manager in order to drive Kintera to sustainable profitability and deliver shareholder value.

A combined 15% of the outstanding shares have now voiced concern, which should be enough to warrant a response from the company. Despite the fact that Gruber has significant influence over the board of directors, the independent directors still have a fudiciary duty to act in the best interest of shareholders. It is likely that the company will at least respond to the dissident shareholders over the next few weeks, which should give some clues as to future actions. It is also worth noting that shareholders appear to support this directive as well, as shares rose almost 5% today on the news. Combined, these factors make KNTA a stock worth watching!

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