The Bear Cave #260
New Activist Reports, Recent Resignations, and Tweets of the Week
Welcome to The Bear Cave! Our last premium articles were “Problems at Signet Jewelers (SIG)” and “Diamonds Aren’t Forever” and our next special investigation comes out Thursday, February 20.
New Activist Reports
Culper Research published on Applied Optoelectronics (NASDAQ: AAOI — $1.42 billion), a manufacturer of fiber optic networking products. Culper alleged the company “misrepresents the status of supposedly ongoing 800G qualifications, overstates its production abilities, and has already squandered chances with multiple potential customers.” Culper’s investigation included “20+ calls with former employees, competitors, and customers, as well as visits to AAOI's facilities.”
Grizzly Research published on GeneDx Holdings (NASDAQ: WGS — $1.64 billion), a personalized genetic testing company. GeneDx stock is up ~1,500% over the last year due to recent revenue growth, which Grizzly Research alleged was “an illusion, driven by fraudulent schemes and illegal tactics deliberately aimed at exploiting Medicaid and Medicare systems to artificially inflate revenue.” Grizzly Research spoke to multiple former employees and concluded the company’s fraudulent billing “inflates revenue by approximately 25%.”
Hunterbrook Media published on PDD Holdings (NASDAQ: PDD — $159 billion), the Chinese online retailer that owns Temu. Hunterbrook highlighted the company was “hit by tariffs and forced labor accusations” and also raised concerns about other U.S.-listed Chinese microcaps that “appear to support Chinese surveillance.”
Recent Resignations
Notable executive departures disclosed in the past week include:
CEO of NCR Voyix (NYSE: VYX — $1.81 billion) departed effective immediately after a little over one year. The company has had three CEOs and three CFOs in the last five years. In April 2024 NCR Voyix was on the B7A FOIA exemption list, indicating a potential undisclosed SEC investigation.
CEO of Match Group (NASDAQ: MTCH — $8.49 billion), Bernard Jin Kim, resigned after nearly three years and also departed the board. During his tenure, Mr. Kim notably said he “personally spent $50,000” playing the mobile game Clash of Clans. The new Match CEO, Spencer M. Rascoff, is the co-founder and former CEO of Zillow.
CFO of Digital Turbine (NASDAQ: APPS — $508 million) “agreed to a mutual separation” effective immediately after eight and a half years. The company is audited by Grant Thornton LLP.
General Counsel of Rumble (NASDAQ: RUM — $3.62 billion), Michael Jay Ellis, resigned after three years “to pursue a position in government.” Mr. Ellis was selected by President Trump to be the Deputy Director of the CIA. According to FOIAsearch.com, in August 2024 the Democratic National Committee sent a FOIA request to the SEC for “all complaints, violations and investigations that mention Rumble.” During the Biden Administration, the Democratic National Committee filed a total of 234 FOIA requests with the SEC, largely for communication between the SEC and prominent Republicans, including Senator Tom Cotton, Senator Ben Sasse, Ron DeSantis, Kristi Noem, and Mike Pompeo, among others. By contrast, the Republican National Committee has sent no FOIA requests to the SEC since October 2019.
Data for this section is provided by VerityData from VerityPlatform.com
News of the Week
Changes at the SEC
Reuters reported that SEC lawyers “have been told they need to seek permission from the politically appointed leadership before formally launching probes,” which was described as “a marked change in procedure that could slow down investigations.” In prior administrations, “the SEC has delegated authority to formally launch investigations to enforcement directors or other senior staff.” Separately, the SEC launched a Crypto Task Force, led by Commissioner Hester Peirce, “to provide clarity on the application of the federal securities laws to the crypto asset market.”
DOGE vs. DoD, CMS, and CFPB
DOGE employees are reportedly focused on Medicare fraud and “have been working at the Centers for Medicare and Medicaid Services, where they have gotten access to key payment and contracting systems.” Mr. Musk tweeted about CMS and said, “this is where the big money fraud is happening” and later tweeted, “They wasted $100B of taxpayer money!” President Trump also said Mr. Musk and DOGE would look into spending by the Department of Defense and other agencies. In addition, DOGE reportedly has “gained access to the internal systems, including personnel rolls and financial records” of the Consumer Financial Protection Bureau, with Mr. Musk later tweeting, “CFPB RIP.”
Former hedge fund manager Bill Martin published an interview with investor Brian Bellinger titled “The Case for Short Selling.”
Some investors have started to use the prediction market Kalshi to make investment decisions. For example, @EricTheUmpire highlighted that Kalshi users accurately predicted that Grand Theft Auto VI would be released this year, one day before Take-Two management confirmed the upcoming release on the company’s earnings call.
Tweets of the Week
Watch the FOIAsearch.com launch video here. It’s completely free and open — like government should be.
Until next week,
The Bear Cave