The Bear Cave #266

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

Mar 23, 2025

Welcome to The Bear Cave! Our last premium articles were “Problems at Gorilla Technology Group (GRRR)” and “Problems at Ibotta (IBTA)” and our next special investigation comes out Thursday, April 3.

New Activist Reports

Independent researcher Lauren Balik published on Appian (NASDAQ: APPN — $2.27 billion), a cloud computing and software company. Ms. Balik alleged that “a large portion of Appian’s revenue and operations in Europe come from Austrian bank Raiffeisen Bank,” which was accused of facilitating Russian money laundering. In addition, Ms. Balik highlighted that the company’s financial disclosures “became significantly more vague following Russia’s invasion of Ukraine in 2022.” Ms. Balik also noted the company’s CFO was previously CFO of MicroStrategy in the late 1990s and early 2000s and “responsible for MicroStrategy’s infamous revenue restatement in March 2000.”

Morpheus Research published on Solaris Energy Infrastructure (NYSE: SEI — $1.51 billion), a “Houston-based mobile power and oilfield services company that completed its IPO in 2017.” Morpheus highlighted that Solaris’s stock has gone up ~200% since acquiring Mobile Energy Rentals, a gas turbine company that Morpheus believes derives ~96% of its revenue from xAI. Morpheus found that a co-owner of Mobile Energy Rentals was “released from prison in 2017 after being convicted of environmental crimes in 2012” and concluded,

“Ultimately, SEI doubled its leverage, paying 3.19x book value for a commoditized business. Despite Solaris’s claims that [Mobile Energy Rentals] had a ‘diversified earnings stream’ at acquisition, its 10-K reveals 96% of turbine leasing revenue was driven by xAI in ‘24.”

Morpheus also disclaimed, in part,

“Certain principals of Morpheus Research hold short positions in SEI, and Morpheus Research may profit from short positions held by others.”

Blue Orca Capital published on Hesai Group (NASDAQ: HSAI — $2.35 billion), a Chinese LiDAR products company. Blue Orca called Hesai Group a “Chinese scam actively lying to investors.” Specifically, Blue Orca published videos and screenshots showing Hesai’s technology on Chinese military vehicles in apparent contradiction to the company’s claims of not selling to the Chinese military. Blue Orca suggested this could lead the U.S. to “bar or deter investment in Hesai and force divestiture of its stock” and could lead to a delisting. In addition, Blue Orca raised doubts about whether the company’s revenue and margins are legitimate. Blue Orca concluded,

“In our opinion, Hesai is completely untrustworthy as a business and uninvestable as a stock.”

White Diamond Research published on ZJK Industrial (NASDAQ: ZJK — $294 million), a Chinese fastener and structural parts manufacturing company. White Diamond alleged the company lied about having a partnership with NVIDIA and highlighted that the company’s North American office “is a residential house.”

Recent Resignations

Notable executive departures disclosed in the past week include:

CFO of Leslie’s (NASDAQ: LESL — $145 million) departed effective immediately after one and a half years. This week, the company’s Chief Stores Officer also resigned after one and a half years. The pool supply company is down ~96% since its October 2020 IPO and was backed by private equity firm L Catterton.
CFO of Silvaco Group (NASDAQ: SVCO — $146 million) resigned after a little less than two years “to pursue a new career opportunity outside of the semiconductor design industry.” The company’s Chief Technology Officer also “retired effective immediately” in December and the company has fallen ~75% since its May 2024 IPO.
CFO of Cronos Group (NASDAQ: CRON — $689 million) “entered into a separation agreement” after a little over two years. The company has had three different CEOs and four different CFOs in the last five years. KPMG resigned as the company’s auditor in August 2024 “as a result of its decision to cease providing audit services to companies in the cannabis industry” and Cronos hired Davidson & Company as its new auditor. In December 2024, the SEC charged Davidson & Company “with violating auditor independence rules.”
CEO of Vestis Corp (NYSE: VSTS — $1.32 billion) “will leave her positions with the company” effective immediately after three and a half years. The company’s Chief Accounting Officer, CFO, and Chief Legal Officer all departed earlier this year as well. The uniform supply company is down ~50% since it was spun out from Aramark in October 2023.
CFO of STAAR Surgical (NASDAQ: STAA — $873 million) resigned “effective immediately” after nearly five years. In February, the company’s CEO and chairman also departed.
Mr. Christopher Stanley, board member of Federal National Mortgage Association (OTC: FNMA — $7.40 billion), commonly known as Fannie Mae, resigned just one day after being appointed. Mr. Stanley is a cybersecurity engineer who previously worked for SpaceX and X and was viewed as an ally of Elon Musk.
Mr. Jonathan Seiffer, board member of AerSale (NASDAQ: ASLE — $436 million), resigned “effective immediately” after a little over four years. Mr. Seiffer continues to serve on the boards of Mister Car Wash (NASDAQ: MCW — $2.61 billion) and Signet Jewelers (NYSE: SIG — $2.53 billion). In February, AerSale’s audit chairperson also retired “for personal reasons” after a little over three years.

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

Potential Undisclosed SEC Inquiries

The SEC recently released its February 2025 FOIA Logs, which are publicly accessible CSV 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 February 2025 B7A exemption list include:

CBIZ (NYSE: CBZ — $3.66 billion)
FactSet (NYSE: FDS — $16.5 billion)
Fortinet (NASDAQ: FTNT — $75.6 billion)
Carvana (NYSE: CVNA — $39.7 billion)
Walmart (NYSE: WMT — $691 billion)
CSX Corp (NASDAQ: CSX — $57.0 billion)
First Solar (NASDAQ: FSLR — $14.1 billion)
GameStop (NYSE: GME — $11.1 billion)
Broadcom (NASDAQ: AVGO — $898 billion)
TD Synnex (NYSE: SNX — $10.8 billion)
Kraft Heinz (NASDAQ: KHC — $35.7 billion)
AutoNation (NYSE: AN — $6.61 billion)
SentinelOne (NYSE: S — $7.75 billion)
OPKO Health (NASDAQ: OPK — $1.23 billion)
Toyota Motor (NYSE: TM — $250 billion)
Inter Parfums (NASDAQ: IPAR — $3.79 billion)
Eagle Bancorp (NASDAQ: EGBN — $645 million)
Newell Brands (NASDAQ: NWL — $2.68 billion)
Interpublic Group (NYSE: IPG — $9.88 billion)
Acadia Healthcare (NASDAQ: ACHC — $2.66 billion)
Digital Realty Trust (NYSE: DLR — $49.9 billion)
Advance Auto Parts (NYSE: AAP — $2.24 billion)
Methode Electronics (NYSE: MEI — $238 million)
Medical Properties Trust (NYSE: MPW — $3.59 billion)
Commercial Vehicle Group (NASDAQ: CVGI — $48.6 million)
International Business Machines (NYSE: IBM — $225 billion)

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.

This information is largely public because of John Gavin, the founder of Disclosure Insight/Probes Reporter. Mr. Gavin has decades of experience analyzing SEC filings, has filed tens of thousands of FOIA requests with the SEC, and even sued the agency over public records access. This week, The Bear Cave interviewed John Gavin about SEC changes under the Trump Administration, detecting undisclosed government investigations, and public company disclosure tricks. You can listen to the interview recording here and get more insights on his free Disclosure Insight substack.