The Bear Cave #133
New Activist Report, Recent Resignations, and Tweets of the Week
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New Activist Report
Iceberg Research published a second report on Lilium NV (NASDAQ: LILM — $652 million), an early-stage German electric aircraft company. Iceberg noted that “Lilium regularly releases PR statements on future suppliers and potential partners” but often lacks true substance. For example, one report cited by Iceberg found that a four-minute Lilium test flight would reduce its battery by 33%, meaning its long-range flight ambitions are unlikely. An aeronautics professor hired by Iceberg also found excessive noise levels with the electric aircraft and other battery problems. Iceberg Research concluded,
“Lilium should have remained a school project and never come to market to raise hundreds of millions. There is no redemption for companies when their technology is structurally flawed. We had the same conclusion with EOS Energy, which is now down 93%. The same fate awaits Lilium.”
Iceberg Research previously criticized the company for its promotional behavior and a lack of meaningful development progress. Lilium is down nearly 80% since its September 2021 SPAC merger.
Recent Resignations
Notable executive departures disclosed in the past week include:
CFO of Scotts Miracle-Gro (NYSE: SMG — $3.39 billion) “mutually agreed that he will depart his position effective immediately” after just one year. The company is down ~60% over the last twelve months.
CFO of Paysafe Ltd (NYSE: PSFE — $1.15 billion) is leaving the company after two years. In May the CEO also resigned and in March the company’s Chairman, Bill Foley, also stepped down “to focus on other commitments.” The company is down ~85% since its March 2021 SPAC merger.
CFO of MarketWise (NASDAQ: MKTW — $874 million) “informed the company of his decision to voluntarily resign from his position to pursue another professional opportunity” after nearly four years. The company is down over 70% since its July 2021 SPAC merger.
Chairman of Clarivate Plc (NYSE: CLVT — $7.75 billion), the company’s former CEO, announced he would retire after just two months and would “become Chairman Emeritus upon his retirement from the Board.” In addition, the President of the company’s Science Group departed in April, the Chief Accounting Officer departed in March, and the company’s CFO departed in December 2021. The company is down ~55% over the last twelve months.
Chief Operating Officer of Hippo Holdings (NYSE: HIPO — $514 million) resigned after just eight months. The company’s CEO also departed in June and the company is down ~90% since its August 2021 SPAC merger.
Chief Human Resources Officer and Chief Operating Officer of Spectrum Brands Holdings (NYSE: SPB — $2.49 billion) were terminated without cause by the company “in furtherance of its prior stated objective of creating a pure play Global Pet Care and Home and Garden company and reducing its short-term spending.” In July, a board member “mutually agreed that she shall not be re-nominated to the board upon the completion of her term” and in April 2021 a different board member resigned “in order to pursue other opportunities.”
Data for this section is provided by VerityData from VerityPlatform.com
What to Read
“Wall Street Rails Against Costs of Chairman Gary Gensler’s Regulatory Agenda at SEC” (WSJ)
“Mr. Gensler is pursuing what lawyers and former regulators say is the SEC’s most aggressive agenda in decades, an effort that could upend established and lucrative business models. It includes requiring public companies to disclose information related to climate change, bringing more transparency to private-equity and hedge funds, imposing stricter rules for investment products advertised as environmentally or socially responsible, and overhauling the way stock trades are executed.”
“Bed Bath & Beyond the Pale” (Doomberg)
“For as long as there have been stock markets, there have been pump and dump schemes. While the development of technology has expanded the suite of tools available to market manipulators, the overall arc of pump and dumps has changed little over the centuries. It typically involves three phases: quietly accumulating stock, creating a frenzy based on false narratives, and selling into the resulting exit liquidity.”
“Perpetrator Of Catfishing Scheme Charged With Extortion, Cyberstalking, And Interstate Threats” (DOJ)
“The defendant used multiple online identities to target wealthy and high-profile men in a catfishing and extortion scheme. In particular, as alleged in Count One, Blackwood made threats against the Chief Executive Officer of a publicly traded company, identified in the Indictment as ‘Victim-1,’ and threatened to release explicit photographs and communications involving Victim-1 with the intent to extort.”
Tweets of the Week
Until next week,
The Bear Cave