The Bear Cave #71

New Activist Reports, Recent Resignations, More Problems at Triterras, More Problems at Medical Properties Trust, Tweets of the Week

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New Activist Reports

Borrowed Shorts, a new anonymous author, published on GreenBox POS (NASDAQ: GBOX — $653 million), a high-risk payments processor that is up roughly 3,500% over the last twelve months. Borrowed Shorts highlighted problems with BF Borgers, Greenbox’s auditor, as well as irregularities in the company’s financial statements. The author also highlights that one of the company’s recent acquisitions, ChargeSavvy, has a broken website and does not have a working app. Join me in following @borrowed_shorts on Twitter.

The Bear Cave previously published on GreenBox POS and wrote:

“GreenBox POS describes itself as a blockchain-enabled next-generation payment processor. In reality, the company has questionable management, self-dealing, numerous lawsuits, and subcontracts work for the cannabis industry. GreenBox’s audit chairman was the CEO of a company that had its registration revoked by the SEC, and GreenBox’s co-founder and chairman filed for bankruptcy and paid a multi-million-dollar arbitration settlement amidst allegations of fraud.”

Hindenburg Research published on DraftKings (NASDAQ: DKNG — $19.3 billion), an online sports betting company that is up around 350% since its 2020 SPAC merger. Hindenburg alleged that SBTech, a DraftKings subsidiary that was acquired during the SPAC merger, may be involved in questionable or illegal markets and accounts for upwards of 25% of DraftKings’ revenue. Hindenburg also highlighted over $1.4 billion in insider selling by company insiders.

Dubra Stocks published positively on SEMrush (NYSE: SEMR — $2.38 billion), a recent software company IPO that helps businesses manage their online web presence. Dubra Stocks highlighted that SEMrush trades at a cheaper valuation compared to peers and has added new services which will increase retention and revenue.

Culper Research published an update on CleanSpark (NASDAQ: CLSK — $635 million), a Utah-based energy software company. Culper Research claimed that the company’s financials for its digital currency mining segment “don’t add up.” Culper Research previously highlighted insider enrichment and promotional behavior at the company.


More Problems at Triterras

The Bear Cave has been a frequent skeptic of Triterras (NSADAQ: TRIT -- $564 million), a Singapore-based “blockchain-enabled” trade finance lending platform that went public through a SPAC in November of 2020. Back in December I wrote,

“Singapore-based Triterras describes itself as a ‘custom-built, blockchain-enabled, end-to-end global trade and trade finance platform.’ The company went public through a SPAC earlier this year and the company’s executives may have ties to numerous bankruptcies and stock promotions. In addition, the company may derive a large portion of its revenue directly or indirectly from related-party entities.”

Since then, Triterras’s auditor, KPMG, resigned and Triterras disclosed that its sister company Rhodium received “a statutory demand for payment” and was looking to “restructure its debts.” In addition, in May two board members resigned. One board member wrote that the “Chairman and the company’s interim general counsel’s office have very different views to my own as to the optimal path forward.”

Nonetheless, last Friday Triterras announced it engaged Nexia TS Public Accounting Corporation as its new auditor. According to PCAOB records, Nexia TS has not audited any publicly traded company within the last three years.

I remain a skeptic.


More Problems at Medical Properties Trust

Medical Properties Trust (NYSE: MPW — $11.7 billion) is a Birmingham-based REIT that owns for-profit hospitals. Three weeks ago, The Bear Cave highlighted that many of the company’s largest tenants appear to be in financial distress. In particular, Medical Properties Trust had extended loans and questionable investments to Steward Health Care, its largest tenant (27% of revenue).

On Friday, the Wall Street Journal published a 1,374-word article about Medical Properties Trust and its relationship with Steward Health Care that highlighted even more issues. Below are two excerpts:

“When Steward ran into financial trouble, Medical Properties Trust provided it more than $700 million through a series of complex deals, the documents show. It provided $200 million to buy Steward assets valued at $27 million. Then it refinanced debts Steward owed Cerberus.”

“Steward accounted for 30% of Medical Properties Trust’s revenue last year. Steward lost more than $400 million in 2020 and reported nearly $1 billion of unpaid supplier expenses and other bills, the documents show. The company also faces audits by the Internal Revenue Service and state authorities.”

Following the Wall Street Journal article, Medical Properties Trust stock fell 5%.


Recent Resignations and Departures

Notable executive departures disclosed last week include:

  • CFO of Calavo Growers (NASDAQ: CVGW — $1.12 billion) departed after roughly one year on the job.

  • Chief Medical Officer of Pacira BioSciences (NASDAQ: PCRX — $2.63 billion) “ceased service” after about one year.

  • Chief Legal Officer of Credit Acceptance (NASDAQ: CACC — $6.78 billion) retired after 17 years. In May, the 19-year CEO of Credit Acceptance retired as well.

  • Chief Accounting Officer of Apartment Investment and Management Co (NYSE: AIV — $1.09 billion) departed after about six months.

Data for this section is provided by InsiderScore.com


What to Read

“The Twitter Revolution (TWTR)” (The Bear Cave)

“Twitter is becoming a royalty on the growth of the creator economy. Twitter is the best way for online creators to stay close with their customers, and Twitter is going to start monetizing this relationship with “Super Follows” later this year. In addition, Twitter recently rolled out a number of engagement-focused products (Spaces, Topics, and Tipping), which are A+. Wall Street does not know it yet, but in the near future artists, photographers, streamers, celebrities, podcasters, educators, and newsletter authors like myself will be paying sizable royalties to Twitter.”

“Nathan Anderson, the Hindenburg founder taking on Spacs” (FT)

The 37-year-old, who has built a small team at Hindenburg with five full-time employees and a handful of contractors, has staked his livelihood on critical research he says serves an important role in today’s markets.”

“Six Charged in Silicon Valley Insider Trading Ring” (SEC)

“According to the SEC’s complaint, Nathaniel Brown, who served as the revenue recognition manager for Infinera Corporation, repeatedly tipped Infinera’s unannounced quarterly earnings and financial performance to his best friend…”


Tweets of the Week


Until next week,

The Bear Cave

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The Bear Cave is Not Investment Advice. Twitter: @StockJabber