The Bear Cave #235
New Activist Reports, Recent Resignations, and Tweets of the Week
Welcome to The Bear Cave! Our last premium articles were “Problems at Teleperformance (TEP)” and “Problems at TaskUs (TASK)” and we will be releasing our next special investigation on Thursday, August 29.
New Activist Reports
Grizzly Research published on TeraWulf (NASDAQ: WULF — $1.54 billion), a Bitcoin miner that claims to be environmentally friendly. Grizzly Research called the company “a charade” and alleged the company has ties to stock promoters. For example, the company’s third-largest shareholder is “an entity controlled by the wife of John O’Rourke.., who was [previously] charged for his part in a $27 million ‘market manipulation scheme’ by the SEC.” Grizzly Research also raised concerns that the company was missing prior management mining projections by 70%+ and had excessive related party transactions with management-connected entities.
Grizzly Research concluded that “TeraWulf is exclusively run for the benefit of insiders and to the detriment of public shareholders.”
Anonymous Twitter account “@BrokenMoats” published briefly on Biolife Solutions (NASDAQ: BLFS — $1.19 billion), a supplier of cell processing tools for cell and gene therapy companies. Broken Moats highlighted that the company previously restated financials, later dismissed BDO as its auditor after an adverse audit opinion, trades at a lofty 10x sales, has a CFO with limited experience and a non-active CFA license, and has a CEO who previously served as audit chair at Pareteum, a public company that recently filed for bankruptcy amid accounting fraud allegations.
Recent Resignations
Notable executive departures disclosed in the past week include:
CEO of MarketWise Inc (NASDAQ: MKTW — $273 million), Porter Stansberry, “resigned due to his frustration that after ten months of negotiating for the sale of his company, Porter & Co., to MarketWise, they have been unable to come to terms.” The investment research company has had four different CEOs and four different CFOs in the last two years and has fallen ~90% since its July 2021 SPAC merger.
CEO of Starbucks Corp (NASDAQ: SBUX — $107 billion) was “terminated without cause” after one and a half years and also departed the board. The incoming CEO, Brian Niccol, previously served as CEO of Chipotle Mexican Grill (NYSE: CMG — $71.9 billion) for the last six and a half years and oversaw a roughly 700% share price increase during that period. Mr. Niccol also joined the board of Walmart two months ago.
CFO of Ardagh Metal Packaging (NYSE: AMBP — $2.02 billion) “has decided to move on to new opportunities” after three years. The company is down ~65% since its August 2021 SPAC merger.
CFO of Rogers Corp (NYSE: ROG — $1.98 billion) resigned effective immediately after a little over three years “to pursue other opportunities.” The company has had six different CFOs in the last ten years.
General Counsel of Vitesse Energy (NYSE: VTS — $733 million) departed after two years according to his LinkedIn. In August 2023, the company’s CFO also departed after three years and the company is up roughly 60% since its January 2023 spin-off from Jefferies.
Chief Accounting Officer of Embecta Corp (NASDAQ: EMBC — $819 million) resigned “in order to pursue another opportunity” after two and a half years. The company is down ~65% since its April 2022 spin-off from Becton, Dickinson and Company.
Data for this section is provided by VerityData from VerityPlatform.com
What to Read
“SEC probe of B. Riley widens as struggling firm’s stock drops more than 50% on profit warning” (New York Post)
“The feds have widened a probe of financial irregularities at B. Riley, sources told The Post — even as the struggling Wall Street firm suspended its dividend and warned on profits Monday, sending its stock tumbling more than 50%.
Short sellers in June and July continued to deliver information on B. Riley to the Securities and Exchange Commission — and the SEC has asked them for additional material in a continuing probe, according to emails and texts reviewed by The Post.”
“How Bank of America Ignores Its Own Rules Meant to Prevent Dangerous Workloads” (WSJ)
“An analyst on the Latin American finance team in New York collapsed last year after working long hours, prompting his colleagues to call an ambulance to the office.
Another New York banker, currently a vice president, checked into a hospital this year after he felt rundown and sick from working around the clock—yet he chose to continue fulfilling tasks and took client calls from his hospital bed.
Then in May, a Bank of America associate died. He had been putting in over 100 hours a week to finish work on a $2 billion acquisition.”
“The CEO Who Made a Fortune While His Hospital Chain Collapsed” (WSJ)
“While it was losing hundreds of millions of dollars a year, Steward paid at least $250 million to its chief executive officer, Dr. Ralph de la Torre, and to his other companies during the four years he was the hospital chain’s majority owner.”
Tweets of the Week
Until next week,
The Bear Cave