The Bear Cave #262

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

Feb 23, 2025

Welcome to The Bear Cave! Our last premium articles were “Diamonds Aren’t Forever” and “Problems at AppLovin (APP)” and our next special investigation comes out Thursday, March 6.

New Activist Reports

Independent researcher Lauren Balik published a fourth article on AppLovin (NASDAQ: APP — $139 billion), a mobile app monetization company. Ms. Balik raised concerns about AppLovin’s ties to Flip, a TikTok-like app that offers users credits for watching influencer-created ads. Ms. Balik noted that Flip, which uses AppLovin technology under a revenue share agreement, heavily incentivizes recruitment and forces influencers to purchase products before making videos, aggressive actions that may be wrongly creating AppLovin’s “e-commerce growth” narrative in the eyes of investors.

Iceberg Research published a second article on Pagaya Technologies (NASDAQ: PGY — $1.07 billion), a fintech lending company specializing in high-risk borrowers. Iceberg reiterated its concerns about Pagaya’s credit risk and its reliance on offloading loans to related funds and said the company’s auditor, Kost Forer Gabbay & Kasierer, has “a very poor track record.” Iceberg concluded,

“A business model where a general partner misuses LPs funds to artificially boost its own profitability, then blocks redemption, is obviously not sustainable.”

Spruce Point Capital published on Dycom Industries (NYSE: DY — $5.00 billion), a contractor for telecommunications and utility companies. Spruce Point predicted that “revenues and margins are likely to come under pressure stemming from consolidation among customers with aggressive cost-saving goals” and highlighted that the company’s past two Chief Accounting Officers “had senior financial accounting roles at companies that restated results and had internal control issues.”

Blue Orca Capital published on Teladoc Health (NYSE: TDOC — $1.98 billion), a telemedicine company. Blue Orca alleged that patients using Teladoc’s BetterHelp platform sometimes unknowingly receive text therapy from AI-powered services like ChatGPT, based on documents shared by whistleblowers. Blue Orca also alleged that Teladoc “is shifting R&D expenses from its income statement into ‘capitalized software’ in its cash flow from investing, thereby inflating both Adjusted EBITDA and operating cash flows.”

Recent Resignations

Notable executive departures disclosed in the past week include:

CEO of Autohome (NYSE: ATHM — $3.62 billion), China’s leading marketplace for auto sales, resigned effective immediately after a little over one year and also left the board. The company’s prior CEO also abruptly stepped down after three years in December 2023 “due to his other personal commitments.”
CEO of Herbalife (NYSE: HLF — $838 million), Michael Johnson, “will transition to Executive Chairman” after two and a half years. This was Mr. Johnson’s third stint as Herbalife’s CEO. The company has also had three CFO transitions in the last ten years.
CEO of American Water Works (NYSE: AWK — $25.9 billion) resigned after about three and a half years and will also depart the board. In June 2024, the company’s General Counsel also retired “effective immediately” after a little over two years. In November 2024, American Water Works was on the B7A FOIA exemption list, indicating a potential undisclosed SEC investigation.
CFO of Cidara Therapeutics (NASDAQ: CDTX — $236 million) “mutually agreed” to separate after three and a half years. In January, the company’s Chief Medical Officer “separated” after nearly eight years and a board member, Laura Tadvalkar PhD, resigned effective immediately after just seven months. The company has had four CFO resignations in the last ten years.
Mr. Kash Patel, board member of Trump Media & Technology (NASDAQ: DJT — $5.85 billion), “stepped down upon his confirmation by the U.S. Senate as Director of the Federal Bureau of Investigation.” Mr. Patel had served on the board for eleven months.
Ms. Kelly Loeffler, board member of PSQ Holdings (NYSE: PSQH — $108 million), resigned after her confirmation as Administrator of the Small Business Administration. Ms. Loeffler had served on the board for one and a half years, and the company is down ~70% since its July 2023 SPAC merger.
Ms. Audrey Robertson, board member of Liberty Energy (NYSE: LBRT — $3.14 billion), will resign “effective upon [her] confirmation by the United States Senate as the incoming Assistant Secretary of Energy, Efficiency and Renewables, in the Department of Energy.” Ms. Robertson has served on the board for nearly four years.

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

Potential Undisclosed SEC Inquiries

This week, the SEC publicly released its January 2025 FOIA Logs, which are publicly accessible Excel files with copies of all the FOIA requests the SEC received that month and all requests met with a B7A exemption, which can often indicate an undisclosed SEC inquiry. Companies on the January 2025 B7A exemption list include:

Prospect Capital (NASDAQ: PSEC — $1.94 billion)
DiDi Global (OTC: DIDIY — $24.3 billion)
BrightSpring Health (NASDAQ: BTSG — $3.39 billion)
Invitation Homes (NYSE: INVH — $19.5 billion)
Roblox (NYSE: RBLX — $41.0 billion)
Oddity Tech (NASDAQ: ODD — $2.51 billion)
Acadia Healthcare (NASDAQ: ACHC — $3.68 billion)
Newpoint Financial (OTC: NPFC — $24.0 million)
Ally Financial (NYSE: ALLY — $11.5 billion)
International Paper (NYSE: IP — $19.3 billion)
Masimo Corporation (NASDAQ: MASI — $9.10 billion)
Equifax (NYSE: EFX — $29.5 billion)
RTX Corporation (NYSE: RTX — $164 billion)
Uber (NYSE: UBER — $166 billion)
CrowdStrike Holdings (NASDAQ: CRWD — $100 billion)
Stifel Financial (NYSE: SF — $10.6 billion)
Avis Budget Group (NASDAQ: CAR — $3.06 billion)
AppFolio (NASDAQ: APPF — $7.69 billion)
Cisco Systems (NASDAQ: CSCO — $255 billion)
Dentsply Sirona (NASDAQ: XRAY — $3.73 billion)
Dr Reddy's Laboratories (NYSE: RDY — $11.1 billion)
Foot Locker (NYSE: FL — $1.73 billion)
Roper Technologies (NASDAQ: ROP — $61.6 billion)
A10 Networks (NYSE: ATEN — $1.50 billion)
Boston Scientific (NYSE: BSX — $154 billion)
Charles River Laboratories (NYSE: CRL — $8.34 billion)
Dell Technologies (NYSE: DELL — $82.1 billion)
Freedom Holding Corp (NASDAQ: FRHC — $8.86 billion)
Mr. Cooper Group (NASDAQ: COOP — $7.07 billion)
Procter & Gamble (NYSE: PG — $399 billion)
ServiceNow (NYSE: NOW — $193 billion)
Tutor Perini (NYSE: TPC — $1.16 billion)
ZoomInfo Technologies (NASDAQ: ZI — $3.31 billion)
Malibu Boats (NASDAQ: MBUU — $680 million)
Independent Bank Corp (NASDAQ: INDB — $2.89 billion)
Bausch Health (NYSE: BHC — $2.65 billion)
Humana (NYSE: HUM — $30.8 billion)
Autodesk (NASDAQ: ADSK — $61.3 billion)
MGM Resorts (NYSE: MGM — $10.7 billion)
Simpson Manufacturing (NYSE: SSD — $7.12 billion)
e.l.f. Beauty (NYSE: ELF — $4.22 billion)
HealthEquity (NASDAQ: HQY — $9.41 billion)
Evolv Technologies (NASDAQ: EVLV — $566 million)
Everest Group (NYSE: EG — $14.5 billion)

Two of the largest filers of SEC FOIA requests are Probes Reporter and Canary Data.

Academic research has found that B7A exemptions are “associated with significant negative future abnormal returns.” You can search through all SEC FOIA requests and B7A exemptions since October 2019 on FOIAsearch.com. Please reply with any feedback on how The Bear Cave can make the SEC FOIA Log information more accessible for you.