🐻The Bear Cave #57🐻

New Activist Reports, What to Read, and Tweets of the Week

Mar 15, 2021

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New Activist Reports

Hindenburg Research published an outstanding 11,835-word report on Lordstown Motors (NASDAQ: RIDE — $2.44 billion), an electric truck company that went public through a SPAC in October of last year and has touted over 100,000 pre-orders. Hindenburg found that one non-binding $735 million pre-order came from a small residential apartment and a $52.5 million pre-order came from a two-person startup. Hindenburg also wrote,

Lordstown is an electric vehicle SPAC with no revenue and no sellable product, which we believe has misled investors on both its demand and production capabilities.
Multiple former senior employees who have worked with Lordstown Founder & CEO Steve Burns openly described him as a “con man”, or a “PT Barnum” figure. One senior employee told us that, while working with Steve for a couple of years, they saw more questionable and unethical business practices than they had seen in their entire career.
Lordstown only went public in October 2020, but in that brief time, executives and directors have unloaded ~$28 million in stock. We think it bodes poorly when executives unload stock in a company with no actual product that claims to be on the cusp of mass-production.

In an interview with the Wall Street Journal, CEO Steve Burns said the Hindenburg report “contained half-truths and lies.”

Wolfpack Research published on Skillz (NYSE: SKLZ — $10.8 billion), a mobile gaming platform that went public through a SPAC last year. Wolfpack alleged that the company “has a history of announcing partnerships which have historically amounted to very little” and its “top games appear to be stagnant to declining.”

Grizzly Research published on Alpine 4 Holdings (OTC: ALPP — $542 million), a small conglomerate that recently pivoted into the drone business. Grizzly Research alleged the company’s CEO is “a serial stock promoter that has often misled shareholders” and wrote that Alpine has “no tangible assets [and] no production facility.” Over the last three months the company has published approximately 35 press releases and its stock is up around 8,000%.

Muddy Waters Research published a follow up report on XL Fleet (NYSE: XL — $1.68 billion), a vehicle electrification company that went public through a SPAC in November. Muddy Waters pointed out that the company “did not deny exaggerating its purported $220 million pipeline [and] did not deny that its customer reorder rate is only approximately 10%.” The new report also said,

“We understand that following our [initial] report, XL’s counsel sent threatening emails to former employees warning them about speaking with investors.”

XL Fleet said Muddy Waters’ previous report is “grossly inaccurate and misinformed.”

Mariner Research published on Y-mAbs Therapeutics (NASDAQ: YMAB — $1.57 billion), a cancer drug development company. Mariner alleged that a doctor tied to the company’s FDA trials is also a large shareholder. Mariner also highlighted high levels of insider selling and deficient SEC disclosures.

Spruce Point Capital published a “strong sell” opinion on American Battery Metals (OTC: ABML — $1.14 billion) and Comstock Mining (NYSE: LODE — $178 million), two high-flying EV battery recycling companies. Spruce Point alleged the companies have ties to stock promoters and “little chance of success.” Spruce Point also highlighted that American Battery’s Chief Resource Officer, Scott Jolcover, is a Nevada brothel owner.

What to Read

“Celebrity Involvement with SPACs – Investor Alert” (SEC)

“The SEC’s Office of Investor Education and Advocacy cautions investors not to make investment decisions related to SPACs based solely on celebrity involvement…”

“Companies’ Climate Risks Are Often Unknown. Here’s How One Opened Up.” (WSJ)

“Mr. Neri said he calculated that the company was awarded $847 million in contracts in the fiscal year that ended in October because of extra consideration from its climate engagement. It booked $27 billion in total revenue over the same span.”

Tesla Form 8-K (SEC)