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. Follow The Bear Cave’s author on Twitter @StockJabber and stay tuned for a new product release coming 1pm ET on Tuesday!
New Activist Reports
Swan Street Research published on WiMi Hologram Cloud (NASDAQ: WIMI — $351 million), a Chinese hologram augmented reality company. Swan Street alleged that the company misappropriated $100 million of the $160 million of investor cash it raised. For example, WiMi Hologram claimed it spent $35 million to acquire “artificial intelligence and cloud computing technologies,” when it actually bought a wholesale electronics and assembly business. Swan Street also highlighted that five board members, including two audit chairs, have resigned since the company’s April 2020 IPO. Swan Street also alleged that WiMi Hologram had undisclosed ties to stock promoters and noted the company has issued 170 press releases over the last year.
Swan Street Research concluded,
“WiMi Hologram is not a high-tech company, but actually a low-growth, low-margin, unprofitable advertising and electronics wholesale business with a shoestring R&D budget of US$5m in the three years prior to IPO.”
WiMi Hologram’s auditor is Friedman LLP, and Joy Pan is the audit partner responsible for the company according to PCAOB records. The Bear Cave reviewed Ms. Pan’s record and, over the last four years, she has been the auditor for eight other U.S.-listed public companies:
Infobird (NASDAQ: IFBD — $62.6 million), a Chinese software company down 42% since its April 2021 IPO.
Scienjoy Holding (NASDAQ: SJ — $120 million), a Chinese live-streaming company down 60% since its April 2020 SPAC merger.
Regencell Bioscience Holdings (NASDAQ: RGC — $227 million), a Hong Kong-based bioscience company up 65% since its July 2021 IPO.
Recon Technology (NASDAQ: RCON — $69.2 million), a Chinese energy company down 50% over the last five years.
Powerbridge Technologies (NASDAQ: PBTS — $62.3 million), a Chinese software company down 80% since its April 2019 IPO.
MingZhu Logistics Holdings (NASDAQ: YGMZ — $49.9 million), a Chinese logistics company down 90% since its January 2021 peak.
Rebel Group, Inc. (OTC: REBL — $2 million), an Asian MMA company down 99%.
China Advanced Construction Materials Group (NASDAQ: CSCW — $51 million), a Chinese tech/construction company down 80% after changing its name twice.
Ms. Pan is also the audit partner for five active SPACs: Hong Kong-based Goldenbridge Acquisition (NASDAQ: GBRG — $65 million), Hong Kong-based Ace Global Business Acquisition (NASDAQ: ACBA — $60 million), TradeUP Acquisition (NASDAQ: UPTD — $52 million), Venus Acquisition (NASDAQ: VENA — $60 million), and Golden Path Acquisition (NASDAQ: GPCO — $75 million), which recently announced a merger with MC Hologram, “a Cayman Islands exempted company operating in China.”
To learn how to use the PCAOB database to uncover potential misconduct watch this video.
New short activist Sumerian Research published a Twitter thread on DatChat (NASDAQ: DATS — $179 million), “a blockchain, cybersecurity, and social media company.” Sumerian Research highlighted past management failures and the company’s lack of revenue and promotional behavior. Follow Sumerian Research on Twitter @SumerianRsch
Nanalyze, a disruptive tech investor website, published a blog post about selling Berkeley Lights (NASDAQ: BLI — $1.44 billion), a digital cell biology company that was the target of a Scorpion Research investigation last week. Nanalyze wrote,
“We’re selling Berkeley Lights because our original thesis has changed, and we feel that the opportunity cost of continuing to cover BLI in the face of today’s newly emerging drama is too high.”
Recent Resignations
Notable executive departures disclosed in the past week include:
CFO of Cerevel Therapeutics (NASDAQ: CERE — $4.48 billion) resigned after a little over two years “to pursue other personal and professional interests.”
COO of Seritage Growth Properties (NYSE: SRG — $692 million) resigned five months after being promoted to the role to “pursue another opportunity.”
COO of BlackBerry (NYSE: BB — $5.88 billion) resigned six months after being promoted to the role “to pursue other opportunities.”
General Counsel of C3Ai Inc (NYSE: AI — $5.15 billion) resigned after a little over two years.
David Zaslav resigned as a board member of Blade Air Mobility (NASDAQ: BLDE — $807 million) about five months after the company went public via SPAC. Mr. Zaslav is the company’s largest outside shareholder and the CEO of Discovery.
Data for this section is provided by InsiderScore.com
What to Read
“Washington University Managed Endowment Pool generates record 65% return” (WashU)
“The Washington University Investment Management Company (WUIMC) generated an unprecedented 65% return on its Managed Endowment Pool (MEP) during the 2020-21 fiscal year…”
“Toast built a $30 billion business by defying Silicon Valley” (CNBC)
“‘We intentionally chose not to put reps in Silicon Valley,’ Papa said. As long as potential competitors didn’t see the product in action, they could continue ‘arrogantly dismissing it.’”
“Harvard, a Media Company” (The Generalist)
“There are different paths to success. The Harvard Business Review (HBR) was founded in 1922 and struggled to break even for more than 25 years. Today, it’s one of the world’s most impactful media organizations.”
Tweets of the Week
Until next week,
The Bear Cave