The Bear Cave #103
New Activist Reports, Recent Resignations, and Tweets of the Week
Welcome to The Bear Cave — your weekly source of short-seller news. If you are new, you can join here. Please hit the heart button if you like today’s newsletter and reply with any feedback.
New Activist Reports
Hindenburg Research published on Standard Lithium (NYSE: SLI — $1.03 billion), a Canadian lithium mining company. Hindenburg called Standard Lithium “a zero-revenue mining company that uplisted to the NYSE in July 2021” and highlighted that the company has spent over $5 million on “advertising and investor relations” since going public compared to only $1.7 million on R&D. Hindenburg also highlighted the CEO’s checkered history:
“Standard’s CEO Robert Mintak has been involved with at least 9 publicly traded companies. On average, shares of these companies have fallen ~97%. Of the 9 companies, 5 have been delisted, several have faced regulatory scrutiny, none operate profitably, and at least 8 used paid stock promotion.”
Shares were down 10% last week, but remain up 630% over the last five years.
Fuzzy Panda Research published on Electric Last Mile Solutions (NASDAQ: ELMS — $283 million), an electric van company that has “taken misleading statements to investors to a different level.” Fuzzy Panda alleged the company was lying about making its vans in the USA and published import records showing that the company is “importing fully assembled Chinese vehicles.” Fuzzy Panda highlighted that the company’s major customer, Randy Marion Automotive, had a “Buyer Put Right” that allowed it to return purchased vehicles without penalty. Fuzzy Panda also found high executive turnover at the company. For example, the company’s CTO and General Counsel resigned in November 2021, the company’s CFO resigned in January, and the company’s CEO and Chairman resigned on February 1 after the board found that the company’s past financial statements “should no longer be relied upon.”
Electric Last Mile Solutions has fallen over 75% since its June 2021 SPAC merger.
Bonitas Research published on MP Materials (NYSE: MP — $6.37 billion), a Nevada-based rare metals mining company. Bonitas Research alleged that a related-party China-based customer, Shenghe, “overpaid for MP concentrates to artificially inflate MP’s profits.” MP insiders have sold over $400 million in shares and Shenge benefits because it was awarded $55 million in company stock. Bonitas concluded,
“If MP was to sell either MP concentrates or MP oxides to independent 3rd parties, we expect MP’s profits to plummet because MP’s ore content is too expensive to process. We are short MP and think that its stock is going lower.”
The company is up about 260% since its November 2020 SPAC merger.
Grizzly Research published on Playtika Holding Corp (NASDAQ: PLTK — $6.71 billion), a China-backed Israel-based app developer. Grizzly Research wrote that Playtika “seems like a low-quality business with a huge regulatory risk” and highlighted that Chinese regulators denied Playtika access to its A-Share market four times before its U.S. IPO. Grizzly research also highlighted that Playtika’s largest shareholder is looking to sell $1 billion+ in stock and that “~20% of Playtika shares are pledged by insiders in China to Chinese banks” which “is hidden from US investors through a holding structure.”
The Bear Cave, which has no affiliation with Grizzly Research, previously published on Playtika and its high levels of consumer complaints and rapidly declining user reviews for its apps.
Sumerian Research published a Twitter thread on SQL Technologies Corp (NASDAQ: SKYX*) and highlighted that the underwriter for its upcoming IPO, The Benchmark Company, has been associated with many post-IPO collapses:
Recent Resignations
Notable executive departures disclosed in the past week include:
CFO of Cantaloupe Inc (NASDAQ: CTLP — $561 million) “announced his retirement and resigned” after one and a half years. The company has had seven different CFOs in the last five years.
CFO of XL Fleet (NYSE: XL — $270 million) resigned “to pursue other career opportunities” after nine months. The company has fallen over 80% since its December 2020 SPAC merger and is audited by Marcum LLP.
CFO of Reneo Pharmaceuticals (NASDAQ: RPHM — $140 million) resigned after a little over one year. The stock has fallen nearly 60% since its April 2021 IPO.
CFO of Clene (NASDAQ: CLNN — $177 million) resigned “to pursue other opportunities” after a little over a year. The company has fallen over 70% since its December 2020 SPAC merger.
CFO of Citi Trends Inc (NASDAQ: CTRN — $378 million) “notified the Company of her decision to retire for personal reasons” after a little over one year. The company has had four different CFOs over the last five years and dismissed KPMG as its auditor in June 2021.
CFO of Butterfly Network Inc (NYSE: BFLY — $1.14 billion) resigned “to pursue opportunities outside of the Company” after one and a half years. The company has fallen over 40% since its November 2020 SPAC merger.
CFO of Halozyme Therapeutics (NASDAQ: HALO — $4.74 billion) resigned after a little less than two years “to pursue another opportunity.”
Skip Paul, a board member of Dave Inc (NASDAQ: DAVE — $4.23 billion), resigned after just 22 days. The company is up about 15% since its January 2022 SPAC merger.
Chief Accounting Officer of Qualys Inc (NASDAQ: QLYS — $5.01 billion) “notified the Company of his resignation” after ten months. The company is audited by Grant Thornton.
Data for this section is provided by InsiderScore.com
What to Read
“David Tepper: The King of Bouncing Back” (Neckar’s Insecurity Analysis)
“For better or worse we’re a herd leader. We’re at the front of the pack. We're one of the first movers. First movers are interesting; you get to the good grass first, or sometimes the lion eats you."
“Vast DOJ Probe Looks at Almost 30 Short-Selling Firms and Allies” (Bloomberg Law)
“The Justice Department is collecting a trove of information on dozens of investment firms and researchers engaged in short selling as part of a sweeping U.S. hunt for potential trading abuses, according to people with knowledge of the matter.”
Tweets of the Week
Until next week,
The Bear Cave