🐻The Bear Cave #47🐻

New Activist Reports, Suspicious Resignations, Tweets of the Week, and More!

Jan 04, 2021

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New Activist Reports

Kerrisdale Capital published on fuboTV (NYSE: FUBO — $1.89 billion), a streaming service that focuses on live sports. Kerrisdale conducted interviews with rival streaming executives skeptical on the company and highlighted that fuboTV trades at an extreme valuation: $12,000 per current subscriber. Kerrisdale wrote,

“Fubo is not Roku. Fubo is not the next NetFlix. Fubo is not the next DraftKings. Fubo is a streamier version of a pay TV distribution model that is going away, only with far worse underlying economics.”

FUBO stock is up about 180% since merging with a SPAC in December, despite shares falling nearly 50% last week.

The Friendly Bear published on Lemonade Inc (NYSE: LMND — $6.93 billion), an app-based insurance company that claims to be philanthropic. The Friendly Bear highlighted that the company donates less than $1 per customer to charity, growth has been slowing, and insiders have been selling stock quickly.

Marcus Aurelius Research published on Penumbra (NYSE: PEN — $6.35 billion) and wrote,

“We believe that Penumbra’s defective Jet 7 Xtra Flex catheter, which caused at least 18 patient deaths before the FDA announced an urgent recall on December 15th, is not just a matter of “bad luck” but instead symptomatic of more pervasive rot… Penumbra has repeatedly engaged a small Tennessee entity as the “independent” core lab used to adjudicate many of Penumbra’s clinical studies since at least 2013 even though it is registered to the wife of a Penumbra scientific author and site investigator.”

Quintessential Capital Management, Marc Cohodes, and Roddy Boyd have all published on Penumbra as well. A Twitter handle @penumbrafraud and website penumbrafraud.com were recently created to compile all the information from activist short-sellers.

Marcus Aurelius Research and Marc Cohodes both previously criticized MiMedx, a once high-flying healthcare that has since been delisted and had its former CEO and COO indicted.

The Marginal Ideas newsletter made a formal sign-up page. Last week Marginal Ideas critiqued Innovative Industrial Properties (NYSE: IIPR — $4.18 billion), a medical marijuana REIT conducting questionable sale-leaseback transactions. The newsletter is free and once every few months provides detailed research on potential short ideas.

2020 Executive Turnover

Below is a list of the shortest tenures of non-interim CEOs and CFOs in 2020. High turnover at public companies may be a sign of other hidden issues.

Michael Wasserfuhr was “terminated” as CFO of USA Technologies (NASDAQ: USAT — $684 million) after four months on the job. The company has had 4 different CFOs this year and 7 different CFOs in the last five years.

Sergio Rivera resigned as CEO of SeaWorld (NYSE: SEAS — $2.48 billion) after five months “due to disagreements over the Board's involvement in the decision making at the Company.” SeaWorld has had six CEOs over the last five years.

Lisa Mayr resigned as CFO of MicroStrategy (NASDAQ: MSTR — $3.60 billion) after six months. The company has had four CFOs over the last two years.

Hartmut Liebel resigned as CEO of Sanmina (NASDAQ: SANM — $2.07 billion) after less than a year. The company has had six CEOs and three CFOs over the last five years.

Todd Booth resigned as CFO of 3D Systems (NYSE: DDD — $1.30 billion) after eight months. 3D Systems has had three CEOs and five CFOs over the last five years.

Michael Pearl stepped down as CFO of Western Midstream Partners (NYSE: WES — $5.75 billion) after less than a year. The company has had four CEOs and four CFOs over the last five years.

Darin G. Holderness departed as CFO of ProPetro Holding Corp (NYSE: PUMP — $746 million) after six months. ProPetro has had four different CFOs over the last two years.

Craig Eastwood departed as CFO of CytoDyn (OTC: CYDY — $3.07 billion) after about five months. The company has had four CFOs over the last two years.

Zhao Peng resigned as CFO of China Life Insurance (NYSE: LFC — $136 billion) after ten months. The company has had three CFOs in the last two years.

Xia Liu left as CFO of CenterPoint Energy (NYSE: CNP — $11.8 billion) after one year. CenterPoint has had four CFOs and three CEOs in the last three years.

Jide Zeitlin resigned as CEO of Tapestry Inc (NYSE: TPR — $8.62 billion) “for personal reasons” after less than a year.

Callum Mitchell-Thomson resigned as CFO of Golar LNG (NASDAQ: GLNG — $1.05 billion) after seven months.

Stuart Chaffee stepped down as CFO of Praxis Precision Medicines (NASDAQ: PRAX — $2.11 billion) after six months.

David Socks stepped down as CFO of Phathom Pharmaceuticals (NASDAQ: PHAT — $1.04 billion) after about seven months.

Robert Chambers resigned as CFO of Saia (NASDAQ: SAIA — $4.73 billion) after eight months.

Bill Wheat stepped down as CFO of Forestar Group (NYSE: FOR — $970 million) after about six months.

Data for this section is provided by InsiderScore.com

What to Read

“Inside the Whale: An Interview with an Anonymous Amazonian” (Logic Magazine)

“We have a product called Snowmobile. It’s a gas-guzzling truck. There are no public pictures of the inside, but it’s pretty cool. It's like a modular datacenter on wheels. And customers rightly expect that if they load a truck with all their data, they want security for that truck. So there's an armed guard in it at all times.”

“Oyo Hotel Chain Suffered Ailments Beyond Pandemic’s Travel Slowdown” (WSJ)

“Chinese hotelier Xiong Genxiang, in the city of Yichun, said he left Oyo in March after it failed to pay $3,800 in revenue guarantees and other fees…Mr. Xiong said a company representative returned and used Mr. Xiong’s smartphone to compose and send a message to the Journal asking that his comments not be used. Mr. Xiong said the message didn’t represent his true sentiments.”

“Jack Ma disappears from his own talent show” (FT)

“Jack Ma has disappeared as the public face of an African talent show he created, in a hint of the difficulties he is facing after a fall from grace in China.”

Tweets of the Week

clueless @clueless_1337

Note to self: every once in a while do due diligence for a shitty company to calibrate your mental gauge for identifying quality companies.

Kerrisdale Capital @KerrisdaleCap

We're short $FUBO. Report available at kerr.co/fubo. Structurally unprofitable business model ridiculed by nearly every industry executive we spoke with. Recently collapsed app download data a sign of things to come