The Bear Cave #145

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

Nov 27, 2022

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New Activist Report

Viceroy Research published on Home REIT (London: HOME — GBP472 million), a property company that owns housing primarily for charities catering to homeless individuals. Viceroy said that “financial data of HOME's tenants show that many cannot afford rent, have not been paying rent, are in administration, are run by bad actors, and/or simply do not provide social housing services.” In addition, Viceroy cast doubt on the company’s claims that its largest client exposure was limited to 15% of its portfolio and noted that multiple large clients “all appear to share the same office and are run by the same people.” Viceroy concluded,

“We strongly believe that these are not the people who should be entrusted to look after the vulnerable, nor should they be entrusted with your taxes to do so. This industry is nascent, subject to limited oversight, and has begun breeding a plethora of for-profit vultures who have limited ability to actually run a charity or social enterprise.”

Home REIT stock fell ~22% this week.

Recent Resignations

Notable executive departures disclosed in the past week include:

CEO of Symbotic Inc (NASDAQ: SYM — $739 million) resigned after just eight months and also left the board. As part of the departure, the company entered a separation agreement for “aggregate severance payments of $1,050,000.” The company is up ~30% since its June 2022 SPAC merger.
CEO of Builders FirstSource (NYSE: BLDR — $8.91 billion) resigned after one and a half years and also departed the board “to accept another opportunity outside of the industry.”
CFO of First Foundation (NASDAQ: FFWM — $782 million) resigned after two and a half years. The company is down ~45% this year and is audited by Eide Bailly LLP.
CEO of Walt Disney Co (NYSE: DIS — $180 billion) was “terminated without cause” after two and a half years. The firing comes after multiple Disney executives, including the CFO, raised concerns to the board.
CFO of F45 Training Holdings (NYSE: FXLV — $240 million) stepped down after four and a half years “to address immediate personal and family matters in Australia.” The Mark Wahlberg-backed fitness company is down ~85% since its July 2021 IPO.
Executive Vice President of Retail at CrossAmerica Partners (NYSE: CAPL — $756 million) was “terminated” after one year. The company’s Chief Accounting Officer also departed in March after just six months and the company has had three different CEOs and five different CFOs in the last five years.
Chief Operating Officer of Redwire (NYSE: RDW — $144 million) departed after a little under two years. The company is down ~75% since its August 2021 SPAC merger and was previously criticized by The Bear Cave for “aggressive SPAC projections and spurious metrics.”
Luisa Ingargiola, chair of the audit committee for AgEagle Aerial Systems (NYSE: UAVS — $41 million), resigned “effective immediately” after four years. AgEagle is down ~95% since The Bear Cave criticized the company in February 2021 for its ties to “a Lichtenstein-based hedge fund involved in pump-and-dumps.” Ms. Ingargiola continues to serve on the board of Dragonfly Energy Holdings (NASDAQ: DFLI — $356 million), a lithium-ion battery company that merged with a SPAC last month.

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

What to Read

“Was This $100 Billion Deal the Worst Merger Ever?” (NYT)

“Soon after a sweeping courtroom victory in 2018 cleared the way for AT&T’s $100 billion takeover of Time Warner, John Stankey, AT&T’s chief operating officer and the newly anointed chief executive of Warner Media, summoned his top Warner Media executives to a meeting at the Time Warner Center off Columbus Circle…. Among Mr. Stankey’s dictates: 30 minutes was the ‘default’ length for meetings, Saturdays were reserved for ‘quality time’ with his family, and he expected to be home for dinner by 6:30 or 7. ‘My routine is important to me,’ Mr. Stankey wrote.”

“FTX’s regulatory chief had 4 job titles in 2 years. What was he really doing?” (NBC News)

“Prior to disclosures by investigators, it may be difficult to determine what Friedberg’s potential involvement was in the FTX debacle or what he actually did there. Some people who worked at FTX or did business with it told NBC News they’d never encountered Friedberg. When NBC News asked Friedberg to discuss his work for FTX and in online gaming, he declined the request.”

“Companies Brace for Onslaught of New Activists After Change in Proxy-Voting Rules” (WSJ)

“In the new format, directors nominated by a company must be listed on the same ballot as those put forth by activists, enabling investors to pick and choose, rather than voting entirely with either the company or the activist.”