Welcome to The Bear Cave! Our last premium articles were “Problems at Oddity Tech (ODD)” and “Problems at Coca-Cola (KO)” and our next premium investigation comes out Thursday, October 5. In addition, The Bear Cave recently went on the Security Analysis podcast to discuss our early journey, the role of regulators, pump and dumps, and more. This is one of our favorite podcasts, please enjoy it here!
New Activist Reports
Substack author “Cryptadamus” published on Axos Financial (NYSE: AX — $2.30 billion), a Nevada-based bank formerly known as Bank of Internet. Cryptadamus criticized Axos for its ties to the cryptocurrency industry. For example, Cryptadamus noted that Axos was on the list of FTX creditors and Axos was listed as a banking partner for Binance in lawsuits filed by the SEC and CFTC. Cryptadamus also highlighted that Axos lent former President Donald Trump ~$225 million in 2022, collateralized by Trump Tower and Trump Doral Miami.
Spruce Point Capital published on Samsara (NYSE: IOT — $12.4 billion), a San Francisco-based software and “Internet of Things” company. Spruce Point alleged that the company “grew through aggressive practices such as contract buyouts and customer financing, which helps explain why it has long been one of the least profitable SaaS companies.” Spruce Point also alleged the company used “Chinese sourced wireless modules from Quectel that the FCC chair wants blacklisted” and engaged in aggressive accounting by amortizing the cost of its devices over five years when its device contracts are largely over three years.
Kerrisdale Capital published on Tilray Brands (NASDAQ: TLRY — $1.69 billion), a cannabis company. Kerrisdale called the company “structurally unprofitable” and criticized the company for paying its suppliers in stock instead of cash. Kerrisdale also cast doubt on the company’s expansion into craft beer and concluded,
“Once buzz over declining craft beers, heavily manipulated earnings, and misunderstood rescheduling benefits wears off, investors will realize TLRY shares, trading at 40x phony EBITDA, are worth far less than the current price. Our price target is $0.90.”
Recent Resignations
Notable executive departures disclosed in the past week include:
CFO of 3D Systems Corp (NYSE: DDD — $602 million) resigned after a little over one year “to accept a new career opportunity.” The company has had five different CFOs in the last five years and is audited by BDO LLP. In addition, the company’s Chief Accounting Officer resigned in September 2022 “to pursue other career opportunities.”
CFO of Bausch Health Companies (NYSE: BHC — $3.00 billion) resigned after one and a half years “to pursue another opportunity.”
CEO of Cboe Global Markets (BATS: CBOE — $16.6 billion), Edward Tilly, resigned after ten years “following the conclusion of an investigation led by the Board and outside independent counsel that was launched in late August 2023.” That investigation “determined that Mr. Tilly did not disclose personal relationships with colleagues, which violated company policies, and stands in stark contrast to the company's values. The conduct was not related to and does not impact the company's strategy, financial performance, technology and market operations, reporting or internal controls.” In July, the company’s CFO also resigned “to pursue another career opportunity.”
Chief Operating Officer of Mission Produce (NASDAQ: AVO — $694 million) resigned after a little over one year “to pursue other opportunities.” The company’s prior Chief Operating Officer also resigned after about one and a half years and the company is down ~20% since its October 2020 IPO.
Chief Operating Officer of Yext (NYSE: YEXT — $775 million) resigned after about one and a half years. In October 2022, the company’s Chief Accounting Officer resigned after just three months and the company’s longtime CEO and CFO both departed in March 2022.
Chief Accounting Officer of Fisker (NYSE: FSR — $1.93 billion) resigned after three years “to become the chief financial officer of a private company that is focused on refueling solutions.”
Chief Revenue Officer of Leslie's Inc (NASDAQ: LESL — $924 million) “ceased to serve… in connection with a planned reorganization of certain senior management positions.” In July, the company’s CFO “stepped down” after eight years. Two board members also resigned in March and the company is down ~80% since its October 2020 IPO.
Chief Risk Officer of OceanFirst Financial (NASDAQ: OCFC — $871 million) “retired” after six years. This week the company also disclosed “an increase in third-quarter charge-offs arising from a $17 million, or 17%, participation in a $98 million credit to a borrower managed by a real estate fund… secured by an office building in Midtown Manhattan.”
Data for this section is provided by VerityData from VerityPlatform.com
What to Read
“Planet Fitness' longtime CEO says he was 'blindsided' by abrupt firing that sent gym's stock plummeting — and barred him from talking to staff” (Insider)
“Rondeau's separation agreement bars him from contacting any Planet Fitness employees except those in the legal or human-resources divisions ‘about your employment or the end of your employment with the Company.’ A separate non-solicitation clause blocks him from trying to recruit his former employees for new ventures.”
“An Insurance Regulator Asked for a Favor. It Cost a Senior Executive His Job.” (WSJ)
“The infraction, people familiar with the matter now say, was Turner’s role in a hiring situation that involved a relative of Carol Hui, a senior official at the Insurance Authority of Hong Kong. Hui had approached Prudential as her son was looking for a job, according to the people.”
“Jehoshaphat Research Comes Out of the Shadows” (Institutional Investor)
“But the person behind Jehoshaphat is no newcomer. A graduate of the Wharton School at the University of Pennsylvania, he has a 15-year record of short-selling at several firms, including hedge funds Diamondback Capital, Lawton Park Capital Management, and Carlson Capital, and then AllianceBernstein. He left AllianceBernstein’s New York City offices during the early days of the Covid pandemic to work remotely from his hometown of Tampa, Florida. In 2021, he departed from the firm to form his own hedge fund, Carrollwood Capital Management, named after the neighborhood where he grew up. His name is Victor Bonilla.”
Tweets of the Week
Until next week,
The Bear Cave