The Bear Cave #92
New Activist Reports, Recent Resignations, and Tweets of the Week
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New Activist Reports
Blue Orca Capital published on Standard Lithium Ltd (NYSE: SLI — $1.35 billion), a pre-revenue lithium extraction company. Standard Lithium is up over 300% this year after claiming its technology and new plant can extract 90% of lithium from industrial waste-product brines. Based on records obtained from the Arkansas Oil & Gas Commission, Blue Orca calculated that the company was only recovering 12% of lithium. Blue Orca also highlighted misleading statements made by company management about a joint venture that never materialized. In addition, Soren Aandahl, CIO of Blue Orca Capital, did a Zer0esTv interview about the company.
Standard Lithium said the report “contains numerous important inaccuracies and misunderstandings” and claimed Blue Orca ignored the large “volume [of Lithium] that is continuously reinjected back into the brine formation.”
The Bear Cave published on Playtika Holding Corp (NASDAQ: PLTK — $8.08 billion), a China-backed Israel-based app developer whose “mission is to entertain the world through infinite ways to play.” The Bear Cave alleged that Playtika was excessively monetizing its apps and preying on gambling addicts. As evidence, The Bear Cave cited dozens of consumer complaints and petitions against Playtika as well as a recent settlement with the Washington State Attorney General. The Bear Cave concluded,
“Playtika is reliant on large tech platforms, is positioned against social winds, is encumbered by $2.5 billion in debt, plays in a highly competitive industry with low barriers to entry, profits off of gambling addicts, and faces major and immediate headwinds in its most profitable games. Don’t play with Playtika.”
Recent Resignations
Notable executive departures disclosed in the past week include:
Chief Accounting Officer of eHealth Inc (NASDAQ: EHTH — $642 million) resigned after one and a half years. The company has had five different CFOs in the last five years. Muddy Waters previously criticized the company’s revenue recognition and churn disclosures.
Chief Accounting Officer of AdaptHealth (NASDAQ: AHCO — $3.04 billion) resigned after a little over a year and a half. The company went public via SPAC in late 2019 and its accounting was previously criticized by Jehoshaphat Research.
CEO of Six Flags Entertainment (NYSE: SIX — $3.50 billion) resigned after two years and also stepped down from the board. The company has had four different CEOs and three different CFOs over the last five years.
CFO of Fluent Inc (NASDAQ: FLNT— $174 million) “gave notice of his resignation” after a little under three years.
Oren Frank, Co-Founder and CEO of Talkspace (NASDAQ: TALK — $341 million), resigned less than five months after the company’s SPAC merger. His wife and co-founder, Roni Frank, also resigned. The stock has fallen 80% since listing in June.
Chief Legal Officer of Arconic (NYSE: ARNC — $3.19 billion) resigned after a little over one and a half years “due to personal reasons.”
President of a business banking subsidiary at CVB Financial Corp (NASDAQ: CVBF — $2.79 billion) resigned after seven months.
Chief Product Officer of Black Knight Inc (NYSE: BKI — $11.6 billion) resigned after a little over two years.
Chief Accounting Officer of BM Technologies (NYSE: BMTX — $155 million) resigned after 43 days on the job. No reason was given. The company was taken public by a SPAC sponsored by Jay Sidhu earlier this year. His 35-year-old daughter is the company's CEO.
Data for this section is provided by InsiderScore.com
What to Read
“Tiger Global: How to Win” (The Generalist)
“The first investors Coleman hired at the new fund were Scott Shleifer, Feroz Dewan, and Karthik Sarma. All three have carved out extraordinarily successful careers in the years since. Shleifer heads Tiger's private equity team and is worth a reported $5 billion. Dewan spent 15 years at Tiger, taking over day-to-day management for a time before starting his own fund, Arena Holdings. Sarma left after five years to start SRS Investment Management; just last week, the Financial Times reported that the vehicle was sitting on up to $5 billion in unrealized gains thanks to a well-timed bet on Avis.”
“What Went Wrong With Zillow? A Real-Estate Algorithm Derailed Its Big Bet” (WSJ)
“This month, Zillow conceded failure in what amounts to one of the sharpest recent American corporate retreats. It said it would close Zillow Offers, which was responsible for the majority of the company’s revenue but none of its profits; cut about 2,000 jobs, or a quarter of its staff; and write down losses of more than a half-billion dollars on the value of its remaining homes.”
“Idea Brunch with Joe Frankenfield of Saga Partners” (Sunday’s Idea Brunch)
“Platforms/marketplaces have qualitative characteristics that behave more like cities while more common traditional linear businesses behave like living organisms. Cities scale super-linearly meaning they have increasing returns to scale. They get stronger the larger they get. Living organisms scale sub-linearly. Eventually, size weighs them down meaning they have a ceiling to growth and a finite lifespan.”
Tweets of the Week
Until next week,
The Bear Cave