The Bear Cave #161

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

Mar 19

Welcome to The Bear Cave! Our last premium articles were “Problems at Symbotic (SYM)” and “More Problems at Coinbase (COIN)” and our next premium investigation comes out Thursday, April 6.

New Activist Report

NINGI Research published on Arbor Realty Trust (NYSE: ABR — $2.01 billion), a mortgage REIT focused on bridge financing. NINGI Research said Arbor “owns a toxic and worthless portfolio of mobile homes called Lexford/Empirian” and alleged the company is understating credit loss allowances. Specifically, NINGI Research highlighted that the company’s credit loss allowance for its multifamily loan portfolio has grown only $1.7 million since 2020 despite a ~$9 billion increase in its multifamily loan portfolio. NINGI Research also highlighted accounting anomalies and alleged the company hides debt off its balance sheet. NINGI Research concluded,

“Most of Arbor’s peers trade at a discount to book value. Arbor trades at 1.2x of common book value per share. We think, ABR's stock is significantly overvalued and median downside is 55%.”

Recent Resignations

Notable executive departures disclosed in the past week include:

CEO of Amedisys (NASDAQ: AMED — $2.36 billion) “will cease serving” the company after just five months. The company’s prior CEO was “terminated without cause” after just seven months in November 2022 and the company’s Chief Legal Officer resigned in September 2022.
CEO of Calavo Growers (NASDAQ: CVGW — $404 million) was “terminated without cause” after just one year. The company has had five different CEOs and seven different CFOs in the last five years.
CFO of CRISPR Therapeutics (NASDAQ: CRSP — $3.60 billion) resigned after one and a half years “to pursue external opportunities.” In October 2022, the company’s Chief Operating Officer also departed “to pursue external opportunities.”
CFO of EQRx Inc (NASDAQ: EQRX — $958 million) “stepped down” after two years. The company is down ~80% since its December 2021 SPAC merger.
CFO of Clearwater Paper (NYSE: CLW — $544 million) departed after three years. The company’s predecessor CFO had departed after just one year.
CEO of FinVolution Group (NYSE: FINV — $1.07 billion) resigned “due to personal reasons” after four years. The Chinese fintech platform has had five board resignations since its November 2017 IPO, all “due to personal reasons.”
Chief Product Officer of DigitalOcean Holdings (NYSE: DOCN — $3.30 billion) “is resigning to pursue other opportunities” after one and a half years. In January, the company’s CFO “entered into a transition agreement” after three years.
Chief Human Resources Officer of Disney (NYSE: DIS — $170 billion) was “terminated without cause” after almost two years.

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

What to Read

“Signature Bank Executive Used to Audit Firm” (WSJ)

“Keisha Hutchinson signed off on KPMG’s clean audit of Signature Bank in March 2021, public records show. That June, she was appointed chief risk officer for the New York lender….”

“SIVB: Held-to-Mortem Governance” (NonGAAP)

“This non-disclosure immediately makes me wonder what caused former Chief Risk Officer Laura Izurieta to leave the role and create such a glaring hole in risk oversight during such a critical time…”

“Barney Frank defends role at Signature Bank: ‘I need to make money’” (FT)

“But the Democrat said he had no regrets about joining Signature’s board. ‘I worked as a member of Congress for a certain objective. And then having retired, not having a pension by my choice, not wanting to be a lobbyist for reasons personal, I need to make some money.’”