The Bear Cave #268
New Activist Reports, Recent Resignations, Billing Issues at KinderCare, and Tweets of the Week
Welcome to The Bear Cave! Our last premium articles were “Problems at Ibotta (IBTA)” and “Problems at KinderCare Learning Companies (KLC)” and our next special investigation comes out Thursday, April 17.
New Activist Reports
Culper Research published on Gorilla Technology Group (NASDAQ: GRRR — $311 million), a company that claims to make AI solutions for smart cities. Culper called Gorilla “the most ridiculous fraud we’ve written about” and claimed the company “fabricated nearly every aspect of its business – spanning the company’s product claims, office openings, and supposed multi-billion-dollar backlog.” Culper alleged that one of Gorilla’s partners has “been sued at least 43 times in Brazil for fraud” and that its “milestone” Seattle office is actually part of a co-working space.
Last month, The Bear Cave also published on Gorilla and raised similar concerns around its deal announcements, management quality, and financial shortcomings.
Grizzly Research published on KULR Technology Group (NYSE: KULR — $341 million), an energy storage systems and bitcoin investment company. Grizzly Research called the company “a fancy PR machine trying to impress gullible investors with little business success and a dim future ahead.” Grizzly alleged that many of the company’s partnerships were smaller than claimed and that the company was inflating results “by pulling forward millions of dollars in revenue from recent licensing agreements, even though the payments will be made over the next three to five years.” For example, Grizzly wrote:
“This agreement is a licensing agreement where the Japanese customer agreed to pay $1,800,000 to KULR over five years with installments of an initial $300,000 in February 2025 and consecutively $150,000 each quarter until December 2029.
To save its quarter and full-year results, KULR decided to recognize the entirety of the revenue tied to the agreement in 2024, signing the deal only two days before the end of the year.”
(The Bear Cave has no affiliation with Grizzly Research.)
Matthew Earl of ShadowFall Research, a prominent early skeptic of Wirecard, said he is short Nagarro (Frankfurt: NA9 — EUR919 million), a German digital products and IT company. Mr. Earl raised concerns about the company’s “acquisitions, financial record keeping, controls and governance” and specifically highlighted examples of debt-enabled acquisitions that appear to lack economic substance.
Recent Resignations
Notable executive departures disclosed in the past week include:
CEO of Timken (NYSE: TKR — $4.22 billion) resigned “effective immediately” after seven months and also departed the board.
CFO of UWM Holdings (NYSE: UWMC — $8.84 billion) “transitioned into a senior advisor role” after a little over two years. In April 2024, Hunterbrook alleged the company manipulated data to drive consumers towards its loans.
CFO of Phathom Pharmaceuticals (NASDAQ: PHAT — $340 million) resigned “for personal reasons” after a little over five years and also departed the board.
CEO of Twin Hospitality Group (NASDAQ: TWNP — $303 million) “is resigning to pursue other opportunities” after eight years and also departed the board. In addition, the company’s General Counsel resigned as well. The debt-heavy Hooters competitor is down ~60% since its January 2025 spinoff from FAT Brands (NASDAQ: FAT — $46 million).
CFO of The Bancorp (NASDAQ: TBBK — $2.11 billion) “entered into a Retirement, Consulting and Release Agreement” after 15 years. Last year, three board members departed the company and in March 2024 Culper Research alleged the company “has misrepresented the quality of its real estate bridge loan portfolio.” In March 2024, the firm also switched auditors from Grant Thornton to Crowe LLP.
Chief Merchandising Officer of SpartanNash (NASDAQ: SPTN — $683 million) “will be leaving the company” after a little over three years. Last month, the company’s Chief Strategy Officer also departed after four years.
Ms. Manjula Talreja, board member of Sunrun (NASDAQ: RUN — $1.58 billion), resigned with three days’ notice after a little over three years. In December 2024, Mr. Gerald Risk, the company’s audit chairperson, also resigned with two weeks’ notice after nearly 11 years. In October 2024, Sunrun was on the B7A FOIA exemption list, indicating a potential undisclosed SEC investigation.
Data for this section is provided by VerityData from VerityPlatform.com
What to Read
“Marc Cohodes: A Warning from a Legendary Short Seller” (Brave New Normal podcast)
“Marc Cohodes is a legendary investor, short seller… We discuss the scope of Chinese money laundering and mortgage fraud in Canada, and Canada’s crucial choice between the United States and China as its primary ally.”
“Big Office Landlord Made $4 Million in Previously Undisclosed Payouts to Its CEO” (WSJ)
“Paramount (NYSE: PGRE — $868 million) paid more than $900,000 for Chief Executive Albert Behler’s personal accounting services over the past three years, the company disclosed for the first time in a proxy statement Thursday.
That disclosure followed a February securities filing from Paramount in which the company revealed that it had paid millions of dollars during that three-year period for contracts with companies in which Behler and his wife, Robin Kramer, had ownership stakes…
The previous lack of disclosure of these payouts from the company could raise red flags with financial authorities, including the Securities and Exchange Commission. Most public companies are required each fiscal year by securities law to disclose any transactions above $120,000 with people or entities related to the companies.”
“The National Court opens the door to charging Grifols with accounting fraud in addition to Gotham” (Translated version of Okdiario)
“The sources explain that ‘the judge still doesn't have sufficient evidence to determine accounting manipulation, but there are some reports from the CNMV that say what they say,’ that is, that Grifols (NASDAQ: GRFS — $5.36 billion) committed irregularities in its accounts.”
Gotham City Research previously published on accounting issues at Spanish pharmaceutical company Grifols in January, February, and March of 2024.
Tweets of the Week
Billing Issues at KinderCare
On Thursday, The Bear Cave published on child safety issues at KinderCare Learning Companies (NYSE: KLC — $1.30 billion), the country’s largest daycare company. New records suggest potential billing irregularities at KinderCare as well. For example, in one complaint against KinderCare to the Massachusetts Attorney General, obtained via FOIA, a foster parent wrote: