The Staar Surgical Shareholder Battle: A Governance Crisis or a Buying Opportunity?

The corporate governance battle at Staar Surgical (NASDAQ: STAA) has reached a fever pitch, with Broadwood Partners-holding a 27.5% stake-launching a campaign to remove three board members, including CEO Stephen Farrell and Chair Elizabeth Yeu, over the proposed $28-per-share acquisition by Alcon Inc. (NYSE: ALC). This conflict, now entangled with shareholder revolts and proxy advisory firm recommendations, raises a critical question: Is this turmoil a sign of systemic governance failure, or does it conceal an undervalued opportunity for discerning investors?

Governance in Turmoil: Conflicts, Compensation, and Proxy Power

Broadwood Partners has framed its campaign as a defense of shareholder interests against a "long string of bad decisions" Investing.com report. The firm's primary grievances include Yeu's consulting relationship with Alcon, Farrell's potential $24 million payout after just five months as CEO, and Arthur Butcher's role in approving executive compensation tied to the deal Investing.com report. These concerns are amplified by the fact that all three major proxy advisory firms-ISS, Glass Lewis, and Egan-Jones-have recommended against the Alcon takeover Investing.com report.

The postponement of the shareholder vote from October 23 to December 19, 2025, has further inflamed tensions. Broadwood and other dissenting shareholders argue that the delay reflects a rushed process and inadequate scrutiny of the $28-per-share offer, which they claim undervalues Staar's strong revenue growth and market position Yahoo Finance report. Alcon, meanwhile, has accused Broadwood of orchestrating a "silent takeover" to block a value-maximizing deal Investing.com report.

Financial Fundamentals: Strength Amidst the Storm

Despite the governance drama, Staar's financials tell a story of resilience. In Q3 2025, the company reported revenue of $94.7 million, exceeding estimates by $5.3 million FinancialModelingPrep report. Its EVO ICL product line, particularly in China, has driven growth, with a 6.9% year-over-year increase in net sales Investors' press release. However, the company's price-to-sales ratio of 6 and a negative enterprise value to operating cash flow ratio of -42.74 highlight lingering concerns about profitability FinancialModelingPrep report.

The $28-per-share offer from Alcon, valuing Staar at approximately 8.6 times its trailing revenue, appears modest compared to its peers in the medical device sector. Yet, with a 30-day go-shop period now open, the board has a window to explore alternatives without paying a termination fee Yahoo Finance report. This flexibility could either validate the current offer or unlock a higher bid, depending on the company's ability to engage with potential suitors.

Strategic Implications for Investors

The 72% shareholder opposition to the Alcon deal, as reported ahead of the original vote Yahoo Finance report, suggests a significant portion of the market views the transaction as suboptimal. Coupled with ISS's "no" recommendation Yahoo Finance report, this dissent underscores a governance crisis rooted in perceived conflicts of interest and inadequate board independence. However, for investors, the turmoil may also signal an opportunity.

Staar's strong liquidity-evidenced by a debt-to-equity ratio of 0.12 and a current ratio of 4.94 FinancialModelingPrep report-provides a buffer against short-term volatility. If the go-shop period yields a superior bid or the board successfully defends the company's standalone value, the stock could rebound. Conversely, a poorly executed governance reshuffle or a forced sale at a discount could erode shareholder value.

Conclusion: Navigating the Crossroads

The Staar Surgical saga exemplifies the delicate balance between corporate governance and shareholder value creation. While Broadwood's campaign exposes deep-seated concerns about board accountability, the company's financial fundamentals and the open-ended go-shop period offer a path to resolution. For investors, the key lies in assessing whether the current turmoil reflects a temporary mispricing of risk or a more profound misalignment of interests. In either case, the coming months will test the resilience of Staar's management and the integrity of its governance framework.