The Bear Cave #243
The Bear Cave #243
New Activist Reports, Recent Resignations, and Tweets of the Week
Welcome to The Bear Cave! Our last premium articles were “Problems at Verint Systems (VRNT)” and “Problems at Roblox (RBLX) #4” and our next special investigation comes out this Thursday, October 17.
New Activist Reports
Hindenburg Research published on Roblox (NYSE: RBLX — $26.9 billion), a popular gaming platform for children. Hindenburg alleged that Roblox “is lying to investors, regulators, and advertisers about the number of ‘people’ on its platform, inflating the key metric by 25-42%+.” Specifically, Hindenburg claimed Roblox would include alternate accounts and fraudulent bots in its user count and “effectively has two sets of books for its key user metrics – one for internal business decisions and one for public reporting to investors.”
In addition, Hindenburg raised safety concerns about the platform and found some Roblox groups “openly trading child pornography and soliciting sexual acts from minors.” Hindenburg also alleged that Roblox largely outsourced its content moderation to Asian call centers.
In response, Roblox wrote, “Every day, tens of millions of users of all ages have safe and positive experiences on Roblox” and noted that it had proper disclaimers about its investor metrics in its SEC filings, including explicit disclaimers about duplicate accounts and bots.
The Bear Cave has published extensively on safety problems at Roblox and concluded that “Roblox is facilitating widespread child abuse across the United States.”
The Bear Cave’s prior investigations are below:
“Problems at Roblox (RBLX)” (February 3, 2022)
“More Problems at Roblox (RBLX)” (February 17, 2022)
“Even More Problems at Roblox (RBLX)” (August 17, 2023)
“Problems at Roblox (RBLX) #4” (October 3, 2024)
The Bear Cave has also created a dedicated tab to track all Roblox child abuse cases and other scandals available here.
Independent researcher Lauren Balik published on Zeta Global Holdings (NYSE: ZETA — $7.26 billion), a data and marketing automation company. Ms. Balik alleged the company obtains emails for its marketing campaigns from questionable sources, such as political website comment sections, and further alleged that the company’s email marketing is partly done by contracted employees in India.
Recent Resignations
Notable executive departures disclosed in the past week include:
CFO of Sphere Entertainment (NYSE: SPHR — $1.57 billion) “will be leaving the company” after just ten months. The company is overseen by a sixteen-person board, including nine members with the last name Dolan.
CFO of Nuvation Bio (NYSE: NUVB — $760 million) departed after ten months. The company’s Board Chair also did not stand for reelection in July after four years and the company is down ~85% since its February 2021 SPAC merger date.
CFO of Urogen Pharma (NASDAQ: URGN — $531 million) “entered into a separation and consulting agreement” after two and a half years. The company has had six different CFOs since its May 2017 IPO.
CFO of Appian Corp (NASDAQ: APPN — $2.27 billion) “will be leaving effective November 8, 2024, to pursue an opportunity as a CFO at another company” after two and a half years. In April, the company’s Chief Revenue Officer also departed “to take on an expanded role at a privately held software company” after less than two years. Appian is audited by BDO USA.
CEO of Cerence (NASDAQ: CRNC — $141 million) resigned after nearly three years and was replaced by Brian Krzanich, the former CEO of Intel and CDK Global. Cerence stock has fallen ~80% in the last year and is down ~97% from its February 2021 highs.
Data for this section is provided by VerityData from VerityPlatform.com
What to Read
“Senator urges DOJ to investigate youth treatment centers after probe uncovers 'rampant abuse'” (NBC)
“In two letters, obtained by NBC News, Wyden stated that his recent Senate investigation into the corporations — Universal Health Services, Acadia Healthcare, Devereux Advanced Behavioral Health and Vivant Behavioral Healthcare — turned up evidence of ‘rampant abuse, neglect and substandard care.’ He alleged that many facilities ‘fail to provide the treatment they purport to’ and instead provide ‘worthless services’ that don’t meet federal standards.”
“SEC Charges ‘Magic Mushroom’ Company and Two Individuals with Multimillion Dollar Pump-and-Dump Scheme” (SEC)
“‘As alleged here, pump-and-dumps often begin when cheap stock of dormant companies is suddenly touted by a promoter as the next big thing,’ said Melissa Hodgman, Associate Director of the Division of Enforcement. ‘Today’s action serves as an important reminder that the SEC will remain steadfast in its efforts to root out of the market stock offerings that are more about hype than substance.’”
“Activist Accuses Pfizer of Pressuring Former Executives” (WSJ)
“Starboard called on Pfizer to conduct an investigation into the withdrawals of former Chief Executive Ian Read and ex-Chief Financial Officer Frank D’Amelio. The investor lobbed allegations that the ex-Pfizer executives were threatened with lawsuits, clawbacks of compensation and other measures unless they publicly supported Pfizer CEO Albert Bourla.”
Tweets of the Week
Until Thursday,
The Bear Cave