The Bear Cave #80

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

Welcome to The Bear Cave — your weekly source of short-seller news. If you are new, you can join here. Please hit the heart button if you like today’s newsletter and reply with any feedback.

New Activist Reports

The law firm Labaton Sucharow filed a Citizen Petition on Cassava Sciences (NASDAQ: SAVA — $2.33 billion) with the FDA. The Citizen petition included a 42-page report alleging “[there are] multiple reasons to question the quality and integrity of the research supporting Cassava’s claims” and “detailed analysis of the western blots… shows a series of anomalies that are suggestive of systematic data manipulation.” Below is a screenshot from page 10 of the Citizen Petition:

The letter was submitted on behalf of an anonymous petitioner by Jordan A. Thomas, who was a principal architect of the SEC Whistleblower Program before going into private practice. The company’s stock fell 45% this past week.

White Diamond Research published on Flora Growth Corp (NASDAQ: FLGC -- $394 million), a startup Canadian cannabis producer with 95% of its operations in Colombia. White Diamond alleged the company had substandard facilities and wrote,

“Essentially FLGC is a roll-up of low quality, cheap companies. The key asset that is supposed to grow cannabis, Cosechemos, was acquired in October 2019 for a mere $80,000.”

White Diamond also questioned the qualifications of Flora Growth’s 39-year-old CEO, Luis Merchan. According to his LinkedIn, Mr. Merchan’s last two employers before Flora Growth were Macy’s and Target.

Recent Resignations

Notable resignations disclosed in the past week include:

  1. CFO of Radius Health (NASDAQ: RDUS — $646 million) resigned after about eight months on the job. The company has had four different CFOs in the last five years and switched auditors in September of last year.

  2. Executive Vice President of Real Estate at Agree Realty (NYSE: ADC — $5.10 billion) resigned after less than seven months on the job. Two weeks ago, the company’s CFO resigned after about six months on the job. The company has had eight CFO transitions in the last ten years and is audited by Grant Thornton. Agree Realty’s new interim CFO is 29 years old.

  3. CFO of Purple Innovation (NASDAQ: PRPL — $1.69 billion) resigned after about two and a half years. The company’s prior CFO lasted about one and a half years. Purple Innovation went public via SPAC in 2018 and is audited by BDO.

  4. Thomas Barrack Jr. resigned from the board of Guess Inc (NYSE: GES — $1.58 billion) two months after joining. He was indicted for undisclosed lobbying and obstruction of justice last month.

  5. A board member of NV5 Global (NASDAQ: NVEE — $1.61 billion) resigned after about three months.

Data for this section is provided by

What to Read

“Most Unmarried SPACs Will Be Left at the Altar” (Doomberg)

“Perversely incentivized SPAC sponsors, facing the expiration of their allotted time to find a private company to merge with before the money in the SPAC’s trust is returned to investors, will cut terrible deals. They will do so because any deal is better than no deal and the competition to buy private companies among unmarried SPACs is fierce…”

“The Social-Media Stars Who Move Markets” (WSJ)

“Many influencers report that when they hype an investment, they get the page views they crave. When the message is bearish, however, viewers turn away, or worse, attack the messenger with vicious trolling.”

Tweets of the Week

Until Thursday,

The Bear Cave

New? Sign Up Here
Got Feedback? Just Hit Reply
The Bear Cave is Not Investment Advice. Twitter: @StockJabber