The Bear Cave #263

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

Mar 02, 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 this Thursday, March 6.

New Activist Reports

Bleecker Street Research published on Rocket Lab (NASDAQ: RKLB — $10.2 billion), a rocket launch and aerospace engineering company. Bleecker Street alleged the company “materially misled investors about the likelihood that its Neutron rocket will launch in mid-2025” and suggested the launch would likely occur in “mid-2026 to mid-2027.” Bleecker Street based its research on “thousands of pages of technical docs and interviews with 23 experts” and concluded,

“Without Neutron, Rocket Lab’s revenue goals for space don’t add up. SpaceX took a huge bite out of the market for Rocket Lab’s small Electron rocket by offering cheaper satellite rideshare aboard Falcon 9. Electron and Space Systems alone don’t come close to supporting the company’s current valuation.”

Bleecker Street Research also expanded its terms of use and disclosed it was “a for-profit journalistic organization that… finances its journalism through a non-traditional revenue model where it earns revenue from positions that [Bleecker Street Capital] takes in the securities of issuers on which [Bleecker Street Research] reports.”

Bleecker Street also disclosed, in part,

“You should assume that upon publication of a report, we will, or have begun to, close a substantial portion – possibly the entirety – of our positions in the Covered Issuer’s securities.”

On Wednesday this week, both Fuzzy Panda Research and Culper Research published on AppLovin (NASDAQ: APP — $109 billion), a mobile app monetization company.

Fuzzy Panda alleged the company’s flagship Axon 2.0 advertising matchmaking engine “is the nexus of a House of Cards built upon tactics that formers and experts refer to as ‘Ad Fraud.’” Fuzzy Panda said it “uncovered a confidential analysis by a whistleblower and AdTech expert that… told us their statistical analysis found AppLovin’s e-commerce ad targeting correlates with Meta’s at 12.78 standard deviations.” In essence, Fuzzy Panda alleged AppLovin would inappropriately repurpose Meta advertising data for its own use and attribution. The Fuzzy Panda report also included allegations from industry participants:

“Everybody in the industry knows that AppLovin is full of sh*t and that it’s fraudulent.” -Former AppLovin executive

“Facebook is getting the great return on ad spend and AppLovin is just stealing the credit.” -Ad fraud expert

“When Meta dips in performance, AppLovin is also dipping in performance.” -DTC company co-founder

Fuzzy Panda further alleged that AppLovin is “serving explicit ads to children,” “illegally tracking kids,” and engaging in other unethical advertising practices.

Culper Research also published on AppLovin and said the company “could go down as the single largest stock promotion unraveling since at least the Great Financial Crisis.” Culper alleged that AppLovin “systematically deployed, then exploited incredibly dangerous app permissions that enable in-app ads themselves to force-feed silent, backdoor app installations directly onto users’ phones, with just a single click.” Culper based its direct download allegation on a contracted external expert, app download data, and user reviews. Culper also shared Fuzzy Panda’s concerns that AppLovin is gaming attribution from Meta advertising. Culper concluded,

“In the [Last Twelve Months], AppLovin insiders have sold nearly $2.0 billion in stock, while KKR has dumped the entirety of its remaining $7.3 billion stake. We are short AppLovin and believe shares are headed lower.”

Fuzzy Panda and Culper both disclosed that they, or affiliates, may “immediately transact” in AppLovin post-publication and also disclosed that they shared some of their views with each other prior to publication.

Last week, The Bear Cave published on AppLovin and wrote,

“The Bear Cave believes AppLovin’s rapid rise — up ~750% over the last year to around 35x revenue — is fueled by low-quality revenue growth from ads that are deceptive, predatory, and at times unreadable or unclickable. Today’s investigation also explores allegations of potential ad fraud within AppLovin.”

The Bear Cave does not take financial positions against the companies we write about and only makes money from reader subscriptions.

The Bear Cave also highlighted four investigative articles from Lauren Balik, who was the first to raise mainstream concerns about AppLovin:

“AppLovin is a Round Tripping Hellhole” (January 8, 2025)
“How AppLovin Gooses Revenue” (January 21, 2025)
“AppLovin Has a ‘SuperBad’ Third-Party Gift Card Scheme Fueling Growth” (February 10, 2025)
“AppLovin’s E-Commerce Story is Nothing But a Pyramid Scheme” (February 18, 2025)

Recent Resignations

Notable executive departures disclosed in the past week include:

CFO of CarGurus (NASDAQ: CARG — $3.34 billion) “stepped down” after a little over one year. The company has had three CFO transitions in the last three years.
CFO of AlTi Global (NASDAQ: ALTI — $483 million) departed after about one and a half years. The company is down ~65% since its January 2023 SPAC merger.
CEO of Unilever (NYSE: UL — $139 billion) stepped down after almost two years “by mutual agreement” and will also be leaving the board.
CEO of Marqeta (NASDAQ: MQ — $2.10 billion) departed effective immediately after two years and also departed the board. In April 2024, The Bear Cave published on Marqeta and noted the company and its close partner Block (NYSE: XYZ) have seen a large exodus of executives and board members amid recent whistleblower allegations.
CEO of LifeStance Health (NASDAQ: LFST — $2.98 billion) retired after two and a half years and will become Executive Chairman. In October 2023, The Bear Cave published on numerous billing irregularities at LifeStance.
Chief Accounting Officer of Sitio Royalties (NYSE: STR — $3.06 billion), Dawn Smajstrla, departed effective immediately after just eight months. Ms. Smajstrla was previously the Chief Accounting Officer of Black Stone Minerals (NYSE: BSM) for nearly nine years.
Chief Business Officer of CeriBell (NASDAQ: CBLL — $833 million) “will be departing from the company” after one and a half years. The AI-powered neurological monitoring company went public in an October 2024 IPO.
General Counsel of XPEL (NASDAQ: XPEL — $924 million) “separated from the company” after slightly less than two years. XPEL is overseen by a five-person board and in October 2023 Culper Research published on the company.
Chief Human Resources Officer of American Water Works (NYSE: AWK — $26.5 billion) “agreed to a separation from service” after eight years. Last week, the company’s CEO resigned after about three and a half years and departed 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.