The Bear Cave #107

New Activist Reports, Recent Resignations, and Tweets of the Week

Mar 06, 2022

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New Activist Reports

New activist Peabody Street Research published on Regencell Bioscience Holdings (NASDAQ: RGC — $451 million), a zero-revenue Chinese medicine company. Peabody Research alleged that “Regencell relies heavily on its Traditional Chinese Medicine strategic partner, Sik-Kee Au, who happens to be the father of the CEO, Yat-Gai Au.” Peabody Research also found that Sik-Kee Au was reprimanded for professional misconduct in 2021 for overprescribing medicine. In addition, Peabody Research highlighted the company’s dubious claims around treating COVID-19 and showed that its underwriter, Maxim Group, has participated in multiple IPOs that quickly collapsed. Follow @Peabody_street on Twitter and join their free newsletter here.

Culper Research published on Core Scientific Inc (NASDAQ: CORZ — $2.05 billion), a “blockchain infrastructure provider” that went public through a SPAC in October 2021. Culper Research found Core Scientific made a questionable acquisition of its largest customer, Blockcap, for $1.46 billion, which is 20x its valuation seven months earlier. In addition, Culper highlighted that the company’s co-founder and Chairman, Darin Feinstein, has “an uncanny ability to do business with fraudsters” including a longtime business partner who was sentenced in 2019. Culper also highlighted that the company recently waived its 180-day lock-up for insiders.

New Activist NINGI Research published on Northern Data AG (ZETRA: NB2 — EUR1.06 billion), a German data storage company. NINGI Research alleged the company’s executives “used related party acquisitions to enrich themselves” and used aggressive accounting to overstate the future benefits of acquisitions.

Recent Resignations

Notable executive departures disclosed in the past week include:

CEO of OppFi Inc (NYSE: OPFI — $348 million) “entered into a separation agreement” after just two months and resigned from the board. The company is on its third CEO since its July 2021 SPAC merger and shares have since fallen nearly 70%. The Bear Cave previously criticized the company for misleading customers, dubious reviews, and excessive interest rates.
CFO of C3.ai Inc (NYSE: AI — $2.23 billion) resigned after three months and received “repayment forgiveness in connection with his signing bonus.” Two weeks ago, Spruce Point criticized the company and its CFO’s work history.
CFO of Faraday Future (NASDAQ: FFIE — $1.54 billion) “will step down from his role and separate from the company effective immediately due to health reasons” after four months. In November, the company’s prior CFO resigned “to pursue other opportunities.”
CEO of TuSimple Holdings (NASDAQ: TSP — $2.55 billion) resigned effective immediately after one and a half years and will leave the board. Shares are down over 70% since the company’s April 2021 IPO.
CFO of Legacy Housing Corp (NASDAQ: LEGH — $583 million) resigned after one and a half years. The company has had four different CFOs since its December 2018 IPO and is audited by BKD LLP.
CFO of Six Flags Entertainment (NYSE: SIX — $3.55 billion) resigned after a little under two years “to pursue a different career opportunity.” The company has had three different CFOs and four different CEOs in the last five years.
CEO of Avangrid (NYSE: AGR — $17.4 billion) “notified the company of his decision to leave the business” after two years. The company’s CFO resigned last month.
CFO of Ocugen (NASDAQ: OCGN — $544 million) “tendered his resignation in order to pursue new opportunities” after two and a half years.
Principal Accounting Officer of Consensus Cloud Solutions Inc (NASDAQ: CCSI — $1.18 billion) resigned after five months. The company is up over 30% since its October 2021 IPO.
Chief Accounting Officer of SeaWorld Entertainment (NYSE: SEAS — $4.91 billion) “notified the Company of his decision to resign to pursue a different career opportunity” after eleven months.
Chief Human Resources Officer of Aerie Pharmaceuticals (NASDAQ: AERI — $385 million) “retired” after six months. The company has had three different CEOs and four different CFOs in the last year.
Chief Product Officer of LiveRamp Holdings (NYSE: RAMP — $2.80 billion) resigned after seven months “due to personal reasons.”
Richard M. Adams Sr., CEO of United Bankshares (NASDAQ: UBSI — $4.76 billion), stepped down after over 47 years. His son, Richard M. Adams Jr., is now CEO.

Data for this section is provided by InsiderScore.com

What to Read

“On the Cusp of an Economic Singularity” (Doomberg)

“The simple truth of a singularity applies whether it occurred in the past or will in the future: what transpires on the other side is unknowable from here. Given the horrific and still-unfolding events of Vladimir Putin’s invasion of Ukraine and the West’s collective response to it, one can’t help but wonder whether we are on the cusp of an economic singularity in which the laws and bedrock beliefs that formed the foundation of international economic order for decades break down.”

“A Billionaire’s Heir Hangs Up His Healing Crystal to Fix Capitalism” (Bloomberg)

“William Peterffy spent his career avoiding working for his Wall Street tycoon father at Interactive Brokers—until ESG became a thing.”

“Idea Brunch with Ian Cassel of Intelligent Fanatics Capital Management” (Sunday’s Idea Brunch)

“We love to find CEOs and management teams that have had past success — who have the knowledge and personal resources to backstop their vision. This reduces execution and financing risk moving forward. We prefer the management and board own significant pieces of the business… We are extremely hands-on with management. In 2021, we had 381 points of contact (email, phone, or zoom) with our portfolio positions. We do this work so we can hold our winners longer and sell our losers quicker.”