The Bear Cave #261

New Activist Reports, Recent Resignations, and Tweets of the Week

Feb 16, 2025

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 this Thursday, February 20.

New Activist Reports

Independent researcher Lauren Balik published a third article on AppLovin (NASDAQ: APP — $171 billion), a mobile app monetization company. Ms. Balik alleged some of AppLovin’s largest apps are part of a pay-to-play scheme that offers users cash rewards to make in-app purchases, effectively creating circular revenue. Ms. Balik also raised concerns that investor enthusiasm about the company’s push into e-commerce advertising within mobile games is misplaced. Ms. Balik concluded,

“AppLovin is more than priced to perfection, given that the two most popular games which account for 9-10% of revenue are engaged in a gift card/PayPal payout scheme, not to mention the fact that many other AppLovin games and AppLovin partner games also engage in this same scheme, driving ad impressions to extremely low-intent audiences through AppLovin.”

Iceberg Research published on Pagaya Technologies (NASDAQ: PGY — $1.13 billion), a fintech lending company specializing in high-risk borrowers. Iceberg alleged that the company was offloading some of its loan risk to its managed “Opportunity Fund,” which was marketed to foreign investors who have reportedly made “an extremely high number of requests for withdrawal.”

Recent Resignations

Notable executive departures disclosed in the past week include:

CEO of Sealed Air (NYSE: SEE — $4.95 billion) “left the company and has resigned as a member of the board” after just eight months. The company has had four CEOs and six CFOs over the ten years. Last April, Bleecker Street Research called the company “a melting ice cube hiding in plain sight.”
CEO of Greenfire Resources (NYSE: GFR — $450 million) departed after nearly two years. The company is down ~35% since its September 2023 SPAC merger.
CFO of Teradata (NYSE: TDC — $2.37 billion) resigned “to take a Chief Financial Officer position with another company that is outside of the company’s industry” after nearly four years. Last year, the company’s Chief Revenue Officer departed and its Chief Product Officer was terminated.
Independent Board Chair of GDEV Inc (NASDAQ: GDEV — $267 million) stepped down after two and a half years. The prior Board Chair also stepped down after just one year. The Cyprus-based PC and mobile gaming company is down ~85% since its August 2021 SPAC merger.

Data for this section is provided by VerityData from VerityPlatform.com

News of the Week

Sam Altman published a post titled “Three Observations” about the rise of artificial intelligence. He wrote, in part,
“The price of many goods will eventually fall dramatically (right now, the cost of intelligence and the cost of energy constrain a lot of things), and the price of luxury goods and a few inherently limited resources like land may rise even more dramatically.”
Conservative activist Robby Starbuck hinted that he would soon expose more problems at Coca-Cola (NYSE: KO — $297 billion) and tweeted, “Many don’t realize how woke Coca-Cola has gone but I think I’ll tell the story very soon!” The Bear Cave previously published on cultural issues at Coca-Cola and called the company “an out-of-touch bureaucracy that is positioned against the winds of progress.”
Elon Musk and the Department of Government Efficiency highlighted that the U.S. government stores and processes employment and retirement papers for Federal employees in a limestone mine leased from Iron Mountain (NYSE: IRM — $28.0 billion), a document storage company. In 2014, Iron Mountain paid $44.5 million “to settle alleged false billings for storing government documents and data.”