The Bear Cave’s Ultimate Guide For Bears
Red Flag Checklist, 43 Twitter Accounts to Follow, Best of The Bear Cave, and Famous Activist Short Responses
In this special edition of The Bear Cave, we compiled the ultimate guide for bears which includes a 39-point red flag checklist, 43 of the top Twitter accounts for short idea generation, a compilation of The Bear Cave’s best articles, and a selection of the most notable (and crazy) CEO responses to activist shorts.
We will be back with our normal content going forward. Enjoy!
The Bear Cave’s Red Flag Checklist
High turnover in senior and middle management
CEO complains repeatedly about short-sellers
Proxy risk factors mention short-sellers
CEO doesn’t live in the city where the company is located
Leaders who treat their assistants and secretaries badly
A leader with a large corporate jet allowance disclosed in the proxy
Constant restructuring and layoffs, even in good times
Frequent press releases about winning business with unnamed customers
Small/unknown companies touting contracts or relationships with large household name companies. E.g., “We have signed a memorandum of understanding with Boeing”
Compensation that consistently appears egregious relative to the size of the company and the compensation of its peers
2 pages’ worth of related party transactions in the proxy
New lavish HQ
Big naming rights deals to stadiums
Rapidly growing audit fees or high audit fees relative to peers
CEO gives interviews in hard-hats
Major executives are married to each other
Company spends a lot of money on consultants
Excessive or nonsensical ESG disclosures
The use of “serial entrepreneur” biographies by management
Tech companies with no patents granted or applications on file at the Patent Office
Companies located in regions with weak criminal law penalties. Senior management who can make a run to their home country
Unknown accounting or law firms doing meaningful work
Any company based in Ft. Lauderdale
Big Florida homes (homestead exemption from creditors’ claims). Abrupt trips to countries lacking extradition treaties
Managers/shareholders with margin loans. Low levels of pushback on corporate doc negotiation
Hiring a bunch of college buddies
Not showing organic growth. E.g., M&A, changing/rearranging segments frequently
Frequent changes in accounting firms. “Strategic” changes in fiscal reporting periods
Kissinger or similar luminaries on the board
“Philanthropy that tries too hard”
Executives who do not speak freely & candidly but resort to legal boilerplate or drivel
CEOs who wear wigs
The majority of equity compensation is time-vesting without any performance requirements
Responding, “will follow up offline” to detailed questions on conference calls. And any reference to Street/consensus expectations
Long-term guidance is non-GAAP / lots of adjustments in non-GAAP stuff
CEO is giving interviews promoting the stock
Multiple senior executives attend Davos every year
Board members have ties to multiple failed companies
Marianne Jennings’ “Seven Signs of Ethical Collapse” checklist: Pressure to maintain numbers, Fear and silence, Young 'uns and a bigger-than-life CEO, A weak board, Conflicts (of interest), Innovation like no other, and goodness in some areas atoning for evil in others
The 43 Best Twitter Accounts for Short Idea Generation
Here’s our list of the 43 best public Twitter accounts that share content on potential company-specific short ideas:
@RagingVentures – Long and short ideas from Bill Martin, former PM of Raging Capital. Bill published a famous thread about the weakness of Silicon Valley Bank months before its collapse
@AlderLaneEggs – Unfiltered thoughts from Marc Cohodes, early to blow the whistle on FTX, Signature Bank, MiMedx, and many other frauds
@WallStCynic – A dude from Wisconsin tweeting about shorts
@DeepSailCapital – Long/short equities, amazing predictions on 2021 bubble stocks, recent prediction on AI bubble stocks, and semi-regular threads on short ideas
@LogicalThesis – Wicked sharp private investor sharing off-the-beaten-path short ideas
@eliant_capital – Super sharp long/short equities trader. Was very early on Signature Bank, Silvergate Bank, Coinbase, and others
@Seawolfcap – Excellent tweets from Porter Collins a long/short PM and one of the protagonists of The Big Short. Very savvy on financials
@BlueDuckCap – Long/short equities, smart, interesting tweets on Disney, big pharma, and Fox Corp