The Bear Cave #172
New Activist Reports, Recent Resignations, and Tweets of the Week
Welcome to The Bear Cave! Our last premium articles were “Problems at Allegro MicroSystems (ALGM)” and “Problems at Palantir Technologies (PLTR)” and our next premium investigation comes out Thursday, June 15.
Following The Bear Cave’s article on Palantir, Bloomberg asked Palantir CEO Alex Karp about the concerns we raised. Mr. Karp responded in part,
“The Bear Cave is a Bear Cave, they can stay in their Bear Cave. We are a profitable software company, those are interesting critiques of us and we have the best products on the market and we will win.” (6:18 mark)
Mr. Karp also added,
“My real answer to the short people is ‘ask the Russians.’ Ask people on the battlefield about the effectiveness of our products. There is very little we can say... these products have changed the course of history.” (8:28 mark)
Watch the full interview here.
New Activist Reports
Grizzly Research published on bluebird bio (NASDAQ: BLUE — $386 million), an experimental gene therapy company. Grizzly Research wrote that the company’s drug prospects are dwindling, the cash runway is drying up, and alleged the company is “attempting to retain an investor base with false hopes driven by misleading statements.” Grizzly Research also said the company’s “core technology has been eclipsed by newer, safer, and more reliable treatment pathways” and added, “the forces of gravity pulling it toward a liquidation or dissolution scenario can no longer be escaped.” (The Bear Cave has no affiliation with Grizzly Research.)
White Diamond Research published a one-page report on GreenPower Motor (NASDAQ: GP — $66 million), a Canadian electric bus company. White Diamond highlighted that one of the company’s largest customers is suing over a failure to deliver vehicles. The company is down over 90% from its 2021 highs and was previously criticized by Mariner Research and White Diamond.
Recent Resignations
Notable executive departures disclosed in the past week include:
CFO of AllianceBernstein (NYSE: AB — $4.03 billion) resigned after just eleven months “to become the president of a large privately-owned asset management firm.” The company has had five different CFOs in the last three years.
CFO of AlTi Global (NASDAQ: ALTI — $658 million) “stepped down” after two years. The company is down ~40% since its January 2023 SPAC merger.
CFO of NRG Energy (NYSE: NRG — $7.67 billion) resigned after two years. The company has had four different CFOs in the last three years.
Chief Operating Officer of Planet Fitness (NYSE: PLNT — $5.68 billion) departed after just five months. In January, The Bear Cave published on Planet Fitness and questioned “whether Planet Fitness is actually a thriving gym franchise or an illegal billing operation with gyms on the side.”
Executive Chairman of BRC Inc (NYSE: BRCC — $1.16 billion) resigned after about a year “due to urgent family medical needs and his desire to spend the vast majority of his time with his family.” In April, the company’s Chief Retail Officer resigned after a little over one year “to pursue other opportunities.” The company is down ~45% since its February 2022 SPAC merger.
Alan Schumacher resigned from the board of Blue Bird Corp (NASDAQ: BLBD — $834 million) after eight and a half years. Mr. Schumacher had served as audit committee chair. Last week, Jared Sperling also resigned from the company’s board “effective immediately” after almost three years. Two weeks ago, the company’s CEO resigned “for personal reasons” after one and a half years and also left the board. The company’s General Counsel also resigned in March 2022 and the company has had three CEO transitions and four CFO transitions since its February 2015 SPAC merger.
Catherine C MacMillan, 75, resigned from the board, audit committee, and loan committee of Westamerica Bancorporation (NASDAQ: WABC — $1.10 billion) after 38 years. In March, the firm’s CFO resigned after three years in an 8-K filed Friday after the close. The company’s seven-person board now has one member who has served for over forty years, two additional members who have served for thirty to forty years, and a fourth member who has served for nearly twenty years.
Data for this section is provided by VerityData from VerityPlatform.com
What to Read
“SEC Drops 42 Enforcement Cases After Employees Accessed Restricted Records” (WSJ)
“So-called independent agencies such as the SEC and Federal Trade Commission have their own court systems for adjudicating claims of wrongdoing that regulators make against businesses. Judges oversee trials and make initial decisions that can be reviewed by the agency’s commissioners.
Many defendants and a growing number of corporations argue these in-house courts, which Congress authorized decades ago, are at odds with the federal government’s separation of powers. The in-house judges are classified as independent from the agency’s enforcement attorneys, but the system feeds concerns that the SEC wields both judicial and prosecutorial powers.”
“Business Is Slowing. So Companies Are Juicing Profits.” (WSJ)
“A report published Thursday by research firm Calcbench compared the net income based on accounting standards for 200 randomly selected companies in the S&P 500 with their adjusted net income, which can include or exclude items that would normally be counted. The adjusted numbers were higher by $1.1 billion on average last year, an increase of more than 130% over a similar sample from the year prior.”
“Company Insiders Made Billions Before SPAC Bust” (WSJ)
“Executives and early investors in companies that went public via special-purpose acquisition companies sold shares worth $22 billion through well-timed trades, profiting before share prices collapsed.”
Tweets of the Week
Until next week,
The Bear Cave