The Bear Cave #99
New Activist Reports, Recent Resignations, and Tweets of the Week
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New Activist Reports
Twitter user @unemon1 published on Align Technology (NASDAQ: ALGN — $43.1 billion), the company that makes Invisalign clear aligners used in orthodontics as an alternative to braces. Unemon claimed that the company’s recent sales growth is a one-time boost from COVID and showed that social media activity mentioning Align on TikTok, Reddit, Instagram, and Facebook have declined sharply in recent months. For example, Unemon plotted the number of “InvisalignJourney” hashtags on Instagram:
Unemon highlighted the company’s Q4 earnings results on February 2 as a potential catalyst. In addition, Unemon noted that the company’s short interest is at multi-year lows and that other companies in the dental space have warned investors of “softness” in demand due to COVID recovery dynamics.
Sumerian Research published a Twitter thread on Amylyx Pharmaceuticals (NASDAQ: AMLX — $998 million), a recent-IPO drug development company focused on ALS and other neurodegenerative diseases. Sumerian highlighted that the company’s current studies for its ALS drug barely achieved statistically significant outperformance compared to placebos.
Hindenburg Research published a Twitter thread on Royal Caribbean (NYSE: RCL — $20.6 billion) and highlighted the company’s $17 billion in net debt and “permanently impaired” business fundamentals.
The Bear Cave published on Embark Technology (NASDAQ: EMBK — $3.03 billion), a software company focused on autonomous trucking that merged with a SPAC in November. The Bear Cave highlighted that the company appears to be based on puffery rather than actual substance. For example, Embark holds no patents even though its competitors hold hundreds. Instead, Embark “relies heavily on trade secrets [and] proprietary know-how.” Embark’s 26-year-old CEO projects no revenue in 2022 and 2023, but $867 million in revenue in 2024 and $2.7 billion in 2025. The company fell roughly 17% following The Bear Cave’s article.
Recent Resignations
Notable executive departures disclosed in the past week include:
CFO of Seritage Growth Properties (NYSE: SRG — $567 million) resigned after a little over one year “to pursue another professional opportunity.” In October 2021, the company’s Chief Operating Officer resigned after less than six months “to pursue another opportunity at a private real estate company.”
CFO of Marchex (NASDAQ: MCHX — $106 million) resigned after nine months “to pursue other opportunities.”
CEO of Liquidia Corp (NASDAQ: LQDA — $325 million) resigned after a little over one year. The company has had five different CFOs in the last five years.
CFO of Magnachip Semiconductor (NYSE: MX — $850 million) resigned after a little over one and a half years. The company has had six different CFOs over the last ten years.
CFO of Pixelworks (NASDAQ: PXLW — $216 million) resigned after a little over two years. In 2020, the company dismissed KPMG as its auditor and hired Armanino LLP.
Patricia Agnello resigned as Chairman of CVR Energy (NYSE: CVI — $2.01 billion) “for personal reasons” less than nine months after being elevated to that role.
Chief Strategy Officer of SAB Biotherapeutics (NASDAQ: SABS — $320 million) resigned after one year on the job. The company has fallen ~27% since its October 2021 SPAC merger.
COO of Sharecare (NASDAQ: SHCR — $1.34 billion) resigned after one and a half years “to pursue other opportunities.” The company has fallen over 60% since its June 2021 SPAC merger.
Data for this section is provided by InsiderScore.com
What to Read
“Idea Brunch with Harris (“Kuppy”) Kupperman” (Sunday’s Idea Brunch)
“Kuppy shares his inflection investing strategy, why he loves newspapers, and his top six investment ideas… Praetorian Capital was reportedly up 127%, net of fees, in 2020 and up another 128%, net of fees, for the first 11 months of 2021.”
“Larry Fink Wants to Save the World (and Make Money Doing It)” (WSJ)
“CEO of giant asset manager BlackRock uses his position to push firms to address climate change… Real-estate investor Sam Zell said to CNBC a few years ago: ‘I didn’t know Larry Fink had been made God.’”
“C-Suite Chaos at World’s Top Fertilizer Company Baffles Investors” (Bloomberg)
“These are boom times in the fertilizer market, with record prices amid strong demand. But the world's largest producer is in disarray after losing two chief executive officers in less than a year, and investors are still waiting for an explanation for the latest departure.”
Tweets of the Week
Until next week,
The Bear Cave