The Bear Cave #88

New Activist Reports, Recent Resignations, JYNT Twitter Spaces, Tweets of the Week

Oct 24, 2021

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New Activist Reports

Bonitas Research published on ESS Tech (NYSE: GWH — $2.25 billion), a Bill Gates-backed long-duration battery company that recently merged with a SPAC. Bonitas alleged the company concealed five failed battery deployments from investors and was “teetering on bankruptcy” before being saved by a SPAC. Moreover, Bonitas highlighted that four ESS Tech competitors, but not ESS, received a grant from the Department of Energy for battery tech.

White Diamond Research published on NextPlay Technologies (NASDAQ: NXTP — $192 million), a Florida-based online advertising company that uplisted to the NASDAQ in July. White Diamond highlighted that the executives running NextPlay have previously run Axion Ventures, which currently trades for less than a cent. White Diamond also alleged that the company has very little economic substance. For example, the company’s true revenue for 2020 was less than six thousand dollars according to White Diamond.

Prescience Point Capital tweeted bullishly on AerSale (NASDAQ: ASLE — $809 million), an airplane part supplier that went public via SPAC in December 2020:

Prescience Point Capital Management @PresciencePoint

We are long $ASLE. @AerSale is poised to benefit from the greatest re-equipment cycle in the airline industry’s history. The Co is also on the verge of receiving FAA approval & a large order from a major airline for AerAware, its game-changing, wearable HUD product. Our PT is $45

Citron Research tweeted bullishly on Marqeta (NASDAQ: MQ — $13.7 billion), a credit card and payments company that Citron described as a “best in class product loved by developers.” The stock is down ~20% since its June 2021 IPO.

Recent Resignations

Notable executive departures disclosed in the past week include:

CFO of Aviat Networks (NASDAQ: AVNW — $327 million) resigned after one and a half years. The company has had three different CEOs and four different CFOs over the last five years.
CFO of BioDelivery Sciences International (NASDAQ: BDSI — $408 million) resigned after a little less than three years “to pursue other professional opportunities.”
Chief Technology Officer of Root Inc (NASDAQ: ROOT — $1.33 billion) resigned after less than five months “in order to pursue an outside opportunity.”
Chief Medical Officer of Adverum Biotechnologies (NASDAQ: ADVM — $191 million) resigned after five months “to focus on work-life balance.”
General Counsel of Farmer Bros (NASDAQ: FARM — $133 million) “has been separated from the Company effective immediately” after less than four months on the job.

Data for this section is provided by InsiderScore.com

New Twitter Spaces on The Joint (JYNT) Tomorrow

The Bear Cave’s author, Edwin Dorsey, will be hosting a Twitter Spaces to discuss The Bear Cave’s follow-up report on The Joint (NASDAQ: JYNT — $1.18 billion) and take audience Q&A. Join the live audio event tomorrow at 4pm ET and follow Edwin on Twitter @StockJabber

Edwin Dorsey @StockJabber

Monday 4pm ET I’ll be discussing The Joint $JYNT and potential problems with the company. Bring your toughest questions. Would love to have longs participate too. https://t.co/ZjGd0iiZW1

The Joint’s stock is down 20% since The Bear Cave’s first report and the Wall Street Journal recently published a critical article on the company and mentioned The Bear Cave.

What to Read

“Entry into S&P 500 could be influenced by ratings sales, research suggests” (FT)

“Entry into the S&P 500, the benchmark index of large US stocks, could be influenced by whether companies buy other services from the index’s parent company S&P Global, according to an academic study.”

“Idea Brunch with Scott Jackson of Ravenwood Capital” (Sunday’s Idea Brunch)

“Where there is smoke, the fire is usually not far behind… We do our FOIA requests with various government agencies (SEC Enforcement Division, FTC complaints, DOJ, etc.). We look at changes in auditor language, read employee Glassdoor reviews and Better Business Bureau ratings/complaints, and use Bloomberg Law, or PACER to set up alerts for names in the portfolio and look for relevant legal proceedings. We find that it doesn’t cost us much in terms of time/money to avoid some potentially devastating mistakes.”

“My employee wasn’t respectful enough” (Ask A Manager)

“I’m not comfortable with one of my new staff members and how overconfident she is. Her work is great and she needed very little training but she’s got very big britches…”