The Bear Cave #130

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

Aug 14, 2022

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New Activist Report

Bleecker Street Research published a follow-up report on Hall of Fame Resort and Entertainment (NASDAQ: HOFV — $123 million), a company attempting to build an indoor NFL-themed waterpark in Canton, Ohio. Bleecker Street noted that the company “has risen 100% after a couple of financing agreements were announced and a blitz of publicity” but predicted the company “will eventually be bankrupt.” Bleecker Street highlighted that progress on the waterpark has been slow, the company’s recent financing deal is highly constrained, and in May the largest sponsor, Johnson Controls, looked to terminate its naming rights deal.

In July 2021 Bleecker Street also highlighted the company’s ties to Fyre Festival promoters and a failed three-wheeled electric vehicle company. Hall of Fame Resort and Entertainment is down nearly 90% since its July 2020 SPAC merger.

Recent Resignations

Notable executive departures disclosed in the past week include:

CFO of Harsco Corp (NYSE: HSC — $524 million) resigned after one year “to pursue employment at another company.” In June, the company’s Chief Human Resources Officer also resigned after a little less than two years and in May the President of the company’s Clean Earth division also departed.
CFO of Holley Inc (NYSE: HLLY — $775 million) resigned after a little over one year “to pursue another opportunity and for personal reasons.” The company is down ~35% since its July 2021 SPAC merger.
CFO of CarGurus (NASDAQ: CARG — $2.39 billion) “announced his intent to resign to pursue another career opportunity” after a little under two years. The company is down ~30% since its October 2017 IPO.
CEO of Fluence Energy (NASDAQ: FLNC — $3.12 billion) resigned after a little over two years. A member of the company’s Governance Committee also resigned earlier this month and the company’s Chief Digital Officer resigned in June after less than two years. Fluence Energy is down ~50% since its October 2021 IPO.
CEO of Marqeta (NASDAQ: MQ — $4.63 billion) will be stepping down after twelve years once a search to identify a successor is completed. The company’s Chief Operating Officer also resigned this week after less than one year. In addition, the company’s CFO resigned in February and the company’s Chief Product Officer departed in September 2021. Marqeta is down ~75% since its June 2021 IPO.
Chief Operating Officer of BigBear AI Holdings (NYSE: BBAI — $244 million) was “terminated” after ten months. The company is down over 80% since its December 2021 SPAC merger.
Chief Stores Officer of National Vision Holdings (NASDAQ: EYE — $2.90 billion) resigned “to take an international leadership position in a company outside of the optical industry” after a little over one year. The company’s Chief Marketing Officer also departed “to pursue other opportunities” in December 2021 and the Vice President of Store Operations departed in July 2021.

Data for this section is provided by VerityData from VerityPlatform.com

What to Read

“Do legacy OEMs really want to sell EVs?” (Auto Insights)

“Preliminary data suggests that EVs have higher residual values and stronger value propositions than ICE vehicles. Hertz just highlighted that EVs require ~50% less maintenance, have lower depreciation, and generate higher satisfaction scores than internal combustion engine vehicles. This doesn’t even account for the fuel savings. As both consumers and companies realize the benefits of EVs, automakers will be negatively impacted by lower residual values on existing fleets.”

“SEC Investigating Melvin Capital Management” (WSJ)

“The U.S. Securities and Exchange Commission is looking into Melvin Capital Management risk controls and investor disclosure after the hedge fund was crippled by the meme-stock rally last year… The regulator has contacted investors in the hedge fund in recent months as part of an investigation into what Melvin founder Gabriel Plotkin and other senior executives told them following the meme-stock rally in January 2021 and whether it misled investors when it raised money last year.”

“Carlyle boss quit after failed request for $300mn pay package” (FT)

“Carlyle Group’s ousted chief executive Kewsong Lee asked for a pay package worth up to $300mn over five years and resigned from the US private equity group after its co-founders refused to even discuss the deal, multiple people with knowledge of the matter said.”