The Bear Cave #143

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

Nov 13, 2022

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New Activist Report

J Capital Research published an update on Lake Resources (ASX: LKE — AUD$1.56 billion), a large lithium explorer working to produce “cleaner lithium.” J Cap Research published the results from a FOIA request to the UK Government that contradicted the company’s claims of “confirmed” financing from the UK Export Finance (UKEF) agency. The documents published by J Cap show that UKEF was simply in the early stages of reviewing Lake Resource’s filings and UKEF criticized the company’s public statements as misleading and instructed, “Lake should refrain from inferring a statement from UKEF.”

In July, J Capital Research highlighted more problems including high insider selling, a sudden CEO departure, and potential environmental damage from the company’s Lithium mining methods.

Recent Resignations

Notable executive departures disclosed in the past week include:

CEO of Keurig Dr Pepper Inc (NASDAQ: KDP — $52.9 billion) resigned after just three months “effective immediately.” The company said the outgoing CEO “agreed to resign due to violations of the Company's Code of Conduct that were unrelated to strategy, operations or financial reporting.”
CEO of Broadmark Realty Capital (NYSE: BRMK — $695 million) “mutually agreed to terminate [his] employment relationship” after eight months. The company’s Chief Operating Officer and Chief Credit Officer were both terminated in April as part of a restructuring and in October the company’s CFO resigned after “accepting an opportunity at a private company.” Broadmark Realty Capital is audited by Moss Adams LLP and is down nearly 50% since its November 2019 SPAC merger.
CEO of ACI Worldwide Inc (NASDAQ: ACIW — $2.34 billion) was “terminated without cause” after a little less than three years. In July, the company’s Chief Product Officer resigned after two and a half years and in June a board member resigned “effective immediately” after a little over one and a half years. In May, the company’s Chief Revenue Officer “terminated her employment” after a little over one year. The company’s prior Chief Revenue Officer “terminated his employment for personal reasons” in March 2021 after just seven months.
CEO of WM Technology Inc (NASDAQ: MAPS — $206 million) resigned after three and a half years. The company is down ~85% since its June 2021 SPAC merger.
CEO of DocGo Inc (NASDAQ: DCGO — $824 million) disclosed his intent to retire after about eight years. The company is down ~20% since its November 2021 SPAC merger.
Principal Accounting Officer of The Children's Place Inc (NASDAQ: PLCE — $491 million) stepped down after one year. In September the company’s CFO departed after one and a half years and the company’s Chief Operating Officer also retired in June.
CFO of Tyson Foods (NYSE: TSN — $24.2 billion), John R. Tyson, was arrested just two months into the job “for criminal trespass and public intoxication.” Mr. Tyson is the son of the company’s chairman, the great-grandson of the company’s founder, and at age 32 is the youngest chief financial officer serving at a company in the S&P 500
Chief Operating Officer of Silvergate Capital Corp (NYSE: SI — $1.09 billion) had her title changed to Chief Risk Officer. The change was followed by an announcement from Silvergate concerning its “limited” exposure to FTX which said, in part, “we maintain a strong balance sheet with ample liquidity to support our customers’ needs.” The bank’s prior Chief Risk Officer, Tyler Pearson, is the son-in-law of Silvergate’s CEO. Silvergate is audited by Crowe LLP and is down ~50% over the last month.
Richard Kivel, Chairman of Lottery Inc (NASDAQ: LTRY — $15 million), resigned after about one year on the board and four months as chairman. His resignation letter reads, in part,
“I was made aware that the Chief Compliance Officer Dennis Ruggeri, appointed by [CEO] Sohail Quraeshi is currently under investigation by the FBI. I spoke with Mr. Ruggeri and he confirmed that this is true and accurate information. This demonstrates a clear lack of good judgment...”
The company is down ~97% since its November 2021 SPAC merger.

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

What to Read

“Sam Bankman-Fried Has a Savior Complex—And Maybe You Should Too” (Sequoia Archived Link)

“‘I LOVE THIS FOUNDER,’ typed one partner. ‘I am a 10 out of 10,’ pinged another… I open with a doozy: ‘Am I talking to the world’s first trillionaire?’…I first tried out the trillionaire question on Michelle Bailhe, the Sequoia partner who, along with Lin, knows SBF and his company the best. ‘It’s a juicy question,’ she said, wavering for a moment while calculating the odds. ‘I think he has a real chance at that.’”

“Hedge-Fund Manager Who Helped Expose Luckin Coffee’s Fraud Bets on Chinese Chain’s Comeback” (WSJ)

“A hedge-fund manager who secretly wrote a scathing report in 2020 that accused Luckin Coffee of accounting fraud is now backing the Chinese chain, calling it ‘a miracle in China’s business history.’”

“Private-Equity Giants Are Latest Targets of SEC’s Record-Keeping Probes” (WSJ)

“Apollo Global Management., KKR., and Carlyle Group disclosed Tuesday that they face investigations over whether their employees used messaging apps such as WhatsApp to do business. They are the most prominent asset-management firms so far to reveal their exposure to a regulatory sweep that examines compliance with record-keeping rules.”