The Bear Cave #194
New Activist Reports, Recent Resignations, and Tweets of the Week
Welcome to The Bear Cave! Our last premium articles were “Problems at LifeStance Health (LFST)” and “Problems at Progress Software (PRGS)” and our next premium investigation comes out Thursday, November 16.
New Activist Reports
Bleecker Street Research published on PureCycle Technologies (NASDAQ: PCT — $818 million), an emerging plastic recycling company. Bleecker Street alleged the company misrepresented the operational status of its advanced recycling plant. For example, in June the company “announced it had begun commercial scale operations, [which was] contradicted by regulatory documents that show no salable product was produced during the time period.” In addition, Bleecker Research “commissioned a drone survey of [PureCycle’s] facility” and based on the drone’s thermal imaging determined that the plant was operating at temperatures around 50 degrees Celsius rather than the 200 degrees Celsius necessary to melt and recycle plastic.
In May 2021, Hindenburg Research also published on PureCycle and highlighted that the company’s executive team “collectively took 6 companies public prior to PureCycle. All have failed, resulting in 2 bankruptcies, 3 delistings, and 1 acquisition after a ~95% decline.”
Recent Resignations
Notable executive departures disclosed in the past week include:
CFO of Sphere Entertainment (NYSE: SPHR — $1.28 billion) resigned after just six months. The company is overseen by a sixteen-person board, including nine members with the last name Dolan.
CEO of Viridian Therapeutics (NASDAQ: VRDN — $797 million) “ceased serving” after just nine months and also left the board. The company has had five different CEOs and three different CFOs in the last five years.
CEO of El Pollo Loco (NASDAQ: LOCO — $289 million) resigned after about two years and also departed the board.
Chief Operating Officer of Guardant Health (NASDAQ: GH — $3.37 billion) resigned after six months.
Ms. Xiaoni Meng, board member of Bitdeer Technologies Group (NASDAQ: BTDR — $444 million), resigned after seven months. In May, the company’s CFO resigned after two years “to pursue other interests” and the company is down ~60% since its April 2023 SPAC merger.
Richard Paul, board member of Funko (NASDAQ: FNKO —-$424 million), resigned after one and a half years. Mr. Paul continues to serve on the board of two other public companies: Designer Brands (DBI) and Live Nation Entertainment (LYV). Funko has had four different CEOs and four different CFOs in the last five years.
Chief Revenue Officer of Weave Communications (NYSE: WEAV — $577 million) resigned after nearly three years. The company’s CEO, Chief Legal Officer, and Chief Operating Officer have also all departed in the last eighteen months and the company is down ~30% since its November 2021 IPO.
Chief Technology Officer of Fisker Inc (NYSE: FSR — $1.56 billion) resigned after three years “for personal reasons.” The company’s Chief Accounting Officer also resigned last month and in July 2022 The Bear Cave highlighted that the company “has disclosed a material weakness in financial reporting, dismissed its auditor, and employs the CEO’s wife, Dr. Geeta Gupta-Fisker, as CFO.” The company is down ~55% since its October 2020 SPAC merger.
Data for this section is provided by VerityData from VerityPlatform.com
What to Read
“US media veterans back new trading firm with financial news arm” (FT)
“A group of veteran US financial journalists is teaming up with investors to launch a trading firm that is designed to trade on market-moving news unearthed by its own investigative reporting.
The business, founded by investor Nathaniel Brooks Horwitz and writer Sam Koppelman, would comprise two entities: a trading fund and a group of analysts and journalists producing stories based on publicly available material, according to several people familiar with the matter.”
“A Harvard Prodigy Set Out to Disrupt the Legal Industry. Now, CS Disco Tries to Fix Its Culture.” (WSJ)
“Camara had run the company since he co-founded it in 2013 and he called employees Discovians. CS Disco gave little explanation when he resigned, and the board’s chairman praised the departing CEO for his dedication in a Sept. 11 news release. Camara left shortly after the board opened a probe into a complaint that he groped a female employee at a dinner with staff, the Journal has reported. The status of the board’s investigation couldn’t be learned.
A group of more than 150 of CS Disco’s roughly 600 employees wrote a letter on Sept. 27 to the board raising concerns about what they called the company’s ‘toxic culture’ and that leaders hadn’t been forthcoming about Camara’s exit.”
“How Does the World’s Largest Hedge Fund Really Make Its Money?” (NYT)
“The bottom line: Mr. Dalio was Bridgewater and Mr. Dalio decided Bridgewater’s investments. True, there was the so-called Circle of Trust. But though more than one person may have weighed in, functionally only one investment opinion mattered at the firm’s flagship fund, employees said. There was no grand system, no artificial intelligence of any substance, no holy grail. There was just Mr. Dalio, in person, over the phone, from his yacht, or for a few weeks many summers from his villa in Spain, calling the shots.”
Tweets of the Week
Until next week,
The Bear Cave