The Bear Cave #222
New Activist Reports, Recent Resignations, and Tweets of the Week
Welcome to The Bear Cave! Our last premium articles were “More Problems at eXp World Holdings (EXPI)” and “Problems at AMC Entertainment (AMC)” and our next premium investigation comes out Thursday, June 6.
New Activist Reports
Independent researcher Lauren Balik published on Klaviyo (NYSE: KVYO — $6.71 billion), an email marketing platform primarily used by Shopify-powered businesses. Ms. Balik alleged that Klaviyo is “overrun with spam bots creating short-term, low-quality revenue” for the company by inflating email list sizes. Ms. Balik further alleged the company “is willfully ignoring rampant fraud on its platform” and noted that the company’s “auto-upgrade” feature automatically moves merchants to more expensive offerings as their email lists grow. Her article concludes, in part,
“Simply put, many Klaviyo customers are paying more to Klaviyo and padding incremental Klaviyo revenue while getting worse results out of the platform.”
In January, The Bear Cave also published on Klaviyo and highlighted numerous low-quality merchants using the platform as well as upcoming changes from Gmail and Yahoo Mail to curtail unwanted marketing emails.
Iceberg Research published on NuScale Power (NYSE: SMR — $1.53 billion), a small-scale nuclear power company. Iceberg claimed the company “deceived Investors about the certification of its reactor.” Specifically, Iceberg found that the company’s uneconomic original 50-MWe reactor was certified by the US Nuclear Regulatory Commission; however, its new upgraded 77-MWe reactor has never been certified and could face a lengthy certification process.
Iceberg previously published on NuScale in October 2023 and raised concerns about some of the company’s contracts including one led by an individual who “had previously been charged by the SEC for securities fraud.”
Blue Orca Capital published on Insulet Corp (NASDAQ: PODD — $13.1 billion), “the world’s leading manufacturer of insulin delivery patch pumps,” and also disclosed it went long Korean competitor EOFlow Co. (KOSDAQ: A294090). Blue Orca wrote,
“Last week the Court of Appeals for the Federal Circuit killed a preliminary injunction that protected Insulet’s key monopoly against competition from EOFlow. The appellate court decision instantly restores EOFlow’s business from court-induced purgatory, clears the path for Medtronic (or another industry heavyweight) to acquire EOFlow and shatters Insulet’s U.S. monopoly on tubeless automated insulin delivery systems.
Incredibly, not only have investors and analysts not noticed this highly material legal defeat, but Insulet, to our knowledge, has failed to disclose this material event to investors despite ample opportunity to do so on its recent earnings call, in an 8-K or in its newly issued 10-Q… This injunction is now dead. Competition is here.”
Viceroy Research published a mini-update on Globe Life (NYSE: GL — $7.94 billion), a supplemental life insurance company that operates through a network of independent salespeople. Viceroy concluded that Globe Life “appears to be the target of an SEC investigation” because the SEC responded to Viceroy’s FOIA request using a B7A exemption, “which protects from disclosure records compiled for law enforcement purposes.”
Recent Resignations
Notable executive departures disclosed in the past week include:
CFO of Cerence (NASDAQ: CRNC — $167 million) resigned after two months “for personal reasons.” The prior CFO lasted two years and in May 2022 the company’s third-from-last CFO resigned after just one month. The company is audited by BDO USA and is down ~85% in the last year.
CFO of Marti Technologies (NYSE: MRT — $104 million) resigned after seven months. The company’s prior CFO resigned in October 2023 after two years and the company is down ~80% since its July 2023 SPAC merger.
CEO and CFO of Petrobras (NYSE: PBR — $96.4 billion) were both removed from their positions after a little over one year. The Brazilian oil giant has had eight different CEOs, four different CFOs, and four different board chairs in the last five years.
CFO of Berkshire Hills Bancorp (NYSE: BHLB — $1.02 billion) “has decided to step down to pursue other interests” after one and a half years. The bank has had three different CEOs, four different CFOs, and fourteen board departures in the last five years.
CFO of Cirrus Logic (NASDAQ: CRUS — $5.93 billion) resigned “due to his pursuit of other professional opportunities outside the semiconductor industry” after two and a half years.
CFO of ProFrac Holding Corp (NASDAQ: ACDC — $1.44 billion) resigned after a little less than two and a half years. In February, the company’s Chief Operating Officer was “terminated” after one year and in September 2023 the company’s Chief Legal Officer “entered into a severance agreement” after nearly two years.
Homer Sun, board member of Gogoro (NASDAQ: GGR — $369 million), resigned after two and a half years “due to personal reasons.” The company is down ~85% since its April 2022 SPAC merger and in July 2022 Bonitas Research called the company “a cash-burning over-valued stock promotion with declining user growth.”
Data for this section is provided by VerityData from VerityPlatform.com
What to Read
“Top fitness company CEO suspended amid federal probes, allegedly threatened to decapitate franchisee: report” (New York Post)
“More shockingly, XPonential boss Anthony Geisler, who founded the company in 2017 and took it public in 2021, allegedly threatened to decapitate a franchise owner during a contentious mediation session, according to a Businessweek report and confirmed by the owner to The Post.”
“A Famed Car Designer’s Doomed Attempt to Challenge Tesla” (WSJ)
“It struggled in its early years with a limited budget. To drum up interest, the company showed off a concept vehicle, a curvaceous four-door sports car, in a 2017 marketing video. It was filmed slowly rolling down a desert road in front of a field of wind turbines.…
Six months after the company went public, the Fiskers took out a loan against their shares and bought a $21.8 million home in the Hollywood Hills with panoramic views of the Los Angeles skyline. The Fiskers sold around $20 million in shares in three transactions that same year, according to SEC filings.”
“EXCLUSIVE: Citron Research's Andrew Left Is Short GameStop Again” (Benzinga)
“Left said short sellers are now more cautious and understand the gamification of the market. For years, hedge funds have known how to trade short squeezes, Left added. While Left bet against GameStop this week, he's doing less short reports now, saying that the market got crowded, and the risk reward isn't worth it.”
Tweets of the Week
Until next week,
The Bear Cave