The Bear Cave #223
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.
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New Activist Reports
NINGI Research published on Oddity Tech (NASDAQ: ODD — $2.09 billion), an Israeli makeup company. NINGI alleged the company “misled investors about every critical aspect of its business” and alleged the company’s “AI-optimized product personalization” is actually just “a normal questionnaire,” according to a former executive. NINGI also alleged the company, which stylizes itself as a tech-forward DTC brand, secretly operates a large base of physical stores in Israel:
“Our on-the-ground investigation reveals that ODD owns and operates a material, yet undisclosed conglomerate in Israel, including 43 physical stores. One former employee explained, these stores likely ‘didn't feed into his [CEO] narrative very well’ during the IPO roadshows.”
NINGI also highlighted discrepancies with the company’s disclosed employee count, noted that the retail subsidiary in Israel appears to be unaudited, and raised concerns about high turnover and other irregularities in the company’s accounting department. NINGI also found that insiders have sold over $600 million in stock since its July 2023 IPO.
In September 2023, The Bear Cave also published on Oddity and highlighted widespread complaints from consumers about billing issues and concluded the company was “high on hype, but low on substance.”
Grizzly Research published on GigaCloud Technology (NASDAQ: GCT — $1.33 billion), a Hong Kong-based payments and logistics provider for e-commerce companies. Grizzly Research called the company “another China Hustle inflating key metrics using undisclosed related party shell companies.” Specifically, Grizzly Research identified shell company customers opened by former employees and found the company’s web traffic was declining despite claims of rapid growth.
In September 2023, Culper Research also published on the company and interviewed a former executive who said the company’s operations were significantly smaller than the company claimed.
Bleecker Street Research published on Lithium Americas Corp (NYSE: LAC — $634 million), an early-stage Lithium mining company. Bleecker Street said the company’s Nevada mine is “grossly uneconomic” and called the company “an underfunded, Vancouver-based stock promotion.”
J Capital Research published on biote Corp (NASDAQ: BTMD — $394 million), a “healthy aging” pharmaceutical company. J Capital said that many of the company’s customers had adverse effects ranging from sickness to cancer and death. J Capital also said the company’s CEO previously worked for a clinical practice that some customers described as a “scam” led by a “snake oil salesman.” The company is down ~35% since its May 2022 SPAC merger.
Jehoshaphat Research published on The Toro Company (NYSE: TTC — $8.69 billion), a Minneapolis-based lawn mower, snow blower, and general maintenance company. Jehoshaphat claimed Toro “appears to be getting phased out of Home Depot, historically its largest customer” and alleged the company inflated non-GAAP operating earnings by ~35% “thanks to a variety of accounting irregularities.” Jehoshaphat also noted the company’s CFO, an audit committee board member, and three Vice Presidents have departed since January 2023 and concluded,
“We see 40-60% downside to fair value over time, as investors realize Toro isn’t the business it used to be.”
Recent Resignations
Notable executive departures disclosed in the past week include:
CEO of Jabil Inc (NYSE: JBL — $14.4 billion) “ceased to serve as Chief Executive Officer and Director” after one year “following the completion of the previously announced internal investigation related to corporate policies.” The company also disclosed the Vice President of Operations would depart after two years. In October, Jabil’s Chief Human Resources Officer departed and later joined a much smaller company according to her LinkedIn.
CFO of Amplitude (NASDAQ: AMPL — $1.19 billion) “is no longer serving as Chief Financial Officer” after a little over one year. Last month, the company’s Chief Accounting Officer resigned “in order to pursue another opportunity” after two and a half years. The company is down ~80% since its October 2021 IPO.
CFO of SiriusPoint Ltd (NYSE: SPNT — $2.21 billion) departed after one and a half years. The insurance company has had four CEOs, four CFOs, and four Board Chairs in the last five years.
CEO of Leggett & Platt (NYSE: LEG — $1.43 billion) resigned “effective immediately” after two and a half years and will also leave the board. In June 2023, the company’s CFO was “terminated without cause” after nearly four years. The company also disclosed it “agreed to terminate the Aircraft Time Sharing Agreement” with the outgoing CEO. The company is down ~65% in the last year.
Tiago Lourenco, board member of National CineMedia (NASDAQ: NCMI — $531 million), resigned “effective immediately” after ten months. Last week, the company’s President of Sales was “terminated” after nearly three years.
Chief Operating Officer of SunPower Corporation (NASDAQ: SPWR — $512 million) was “terminated” after one year. In February, the company’s CEO resigned “for good reason” after nearly three years and also left the board. The company is down ~70% in the last year.
Data for this section is provided by VerityData from VerityPlatform.com
What to Read
Ruling by United States Magistrate Judge Laurel Beeler in Cohodes v. Department of Justice (PACER)
“The case reads like a novel… In sum, the government must produce the following information that it redacted: (1) the name of the “MDXG Friend” who sent the anonymous email; (2) the name and email address of the individual who forwarded the anonymous email to the FBI; (3) the names of the three witnesses interviewed by the government in January 2018; (4) the names of the two witnesses interviewed by the government in February 2018; and (5) the email address of the person who offered information about Mr. Cohodes in exchange for Bitcoin.”
“The Long, Steep Fall of an Online Education Giant” (WSJ)
“USC’s master’s degree in social work was a lightning rod, leaving students with six-figure loans and low-paying jobs for what many said was a subpar product. A 2021 Wall Street Journal investigation into the program led to inquiries by lawmakers and heightened scrutiny of the revenue-sharing model on which 2U relied.”
“Planet Fitness’s New Chief Steps Into a Culture-War Storm” (WSJ)
“Gym chain contends with a boycott and bomb threats as it stands by its inclusive locker-room policy”
Tweets of the Week
Until next week,
The Bear Cave