The Bear Cave #239
New Activist Report, Recent Resignations, and Tweets of the Week
Welcome to The Bear Cave! Our last premium articles were “The Five Biggest AI Losers” and “Problems at Five9 (FIVN)” and our next special investigation comes out this Thursday, September 19.
New Activist Report
Hunterbrook Media published on Symbotic (NASDAQ: SYM — $12.4 billion), a supply chain automation company that works closely with Walmart. Hunterbrook alleged that an offer by C&S Wholesale Grocers to acquire about 500 grocery outlets to help the Albertsons-Kroger merger overcome FTC concerns was actually being done to help prop up Symbotic’s business. Hunterbrook alleged this “ulterior motive” is supported by the fact that C&S and Symbotic share common ownership, for example C&S’s executive Chair Rick Cohen is also CEO of Symbotic, and many of the transferred grocery stores are near Symbotic’s various automation facilities.
Last month, an unrelated anonymous report claimed Symbotic was providing misleading disclosures about its system deployments and alleged the company “appears to have gone to extreme lengths” to inflate its revenue and backlog with related party deals.
Recent Resignations
Notable executive departures disclosed in the past week include:
CEO of Norfolk Southern (NYSE: NSC — $55.6 billion) was terminated after two and a half years “in connection with preliminary findings from an ongoing investigation conducted by independent counsel that determined [he] violated company policies by engaging in a consensual relationship with the company’s Chief Legal Officer.”
CEO of Myers Industries (NYSE: MYE — $512 million) departed “effective immediately” after four and a half years and also left the board. The company has had five different CEOs and seven different CFOs in the last ten years.
CEO and Chairman of Gogoro (NASDAQ: GGR — $294 million), a Taiwanese electric scooter company, resigned after 13 years. The company disclosed that it “conducted internal investigations into allegations that the company incorporated imported components into certain of its vehicles in violation of the requirement of the Taiwan government that certain core components of the electric scooters shall be produced domestically in order to be qualified for subsidies.” The company added it “identified certain irregularities in [its] supply chain which caused the company to inadvertently incorporate certain imported components in some of its vehicles.”
President of TTEC Holdings (NASDAQ: TTEC — $205 million), a call center company, “is resigning effective December 31, 2024” after a little over two years. Last month, The Bear Cave included TTEC Holdings in our list titled, “The Five Biggest AI Losers.”
Data for this section is provided by VerityData from VerityPlatform.com
What to Read
“Criminal Charge Against Outspoken Short Seller Unsettles Wall Street” (NYT)
“Edwin Dorsey, who writes The Bear Cave, a newsletter that focuses on corporate fraud and misconduct, said he is surprised that authorities were putting so much emphasis on Mr. Left’s price targets. ‘Price targets are fluid,’ said Mr. Dorsey, who said he does not short shares of companies he writes about.”
“SEC Charges Former Financial Consultant for Providing Father and Friends Inside Information Regarding Firm’s Client” (SEC)
“On June 7, 2022, Federico Nannini, of Coral Gables, Florida, was entrusted with material nonpublic information that his firm’s client, MasTec, was interested in acquiring IEA. The next day, Federico Nannini tipped his father, Mauro Nannini, who then purchased 34,500 shares of IEA over the next several weeks for $310,729…
‘The first rule of material nonpublic information is: You don’t talk about material nonpublic information,’ said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.”
“SEC Charges Zymergen With Misleading IPO Investors About Company’s Market Potential and Sales Prospects” (SEC)
“Zymergen raised approximately $530 million through its IPO in April 2021 and filed for bankruptcy in 2023… According to the SEC’s order, Zymergen claimed that it had a $1 billion electronics display market opportunity for Hyaline, but the estimate was based on flawed and unreasonable assumptions that included product markets that were poor fits for Hyaline’s technical characteristics and unsupported premium pricing…
‘Pre-revenue and early-stage companies that seek to tap the capital markets must do so with reasonable estimates of their market potential,’ said Monique C. Winkler, Director of the SEC’s San Francisco Regional Office.”
Tweets of the Week
Until Thursday,
The Bear Cave