Callouts & quotes from 26,677+ activist slides

"Warning: If in fact Oatly is right and that it will never be able to supply enough oat milk, then we believe its future will be doomed. We expect competitors will continue to fill the void and take market share. In the long run, we see a real possibility that Oatly is squeezed out of the market and towards insolvency."

"We believe an ownership threshold of 20% to call a special meeting strikes a reasonable balance between enhancing shareholder rights and protecting against the risk that a small minority of shareholders could trigger a special meeting resulting in unnecessary financial expense and disruption to State Street's business"

"We believe the Company’s stock price underperformance versus both peers and the broader market indices is due to consistently poor financial performance, a lack of credibility from repeatedly failing to deliver on commitments to shareholders, and a history of problematic governance that fails to demand accountability."

"Notably, with much of Hill-Rom's c-suite fairly new to the business, we believe that – with much of its long-term equity incentives locked up for several years at least – management has incentive to re-set expectations to manageable targets now, rather than leave investors expecting Hill-Rom to hit unattainable goals."

"Notably, with much of Hill-Rom's c-suite fairly new to the business, we believe that – with much of its long-term equity incentives locked up for several years at least – management has incentive to re-set expectations to manageable targets now, rather than leave investors expecting Hill-Rom to hit unattainable goals."

"So I really think that kind of the 7 and 8 caps that you saw at retail and even some of the 9 caps on the institutional transaction, like a lot of assets in many different areas, were a function of the abundant and cheap financing that was out there, and it shouldn't be too surprising to see cap rates moving up again."

"TIP REIT will be required to fund land capex for the first two years after the spin-off. Thereafter, TIP REIT will be Target Corp’s land developer through its Preferred Vendor Agreement. As such, Target Corp will generate significant free cash flow and will likely deleverage to an A-/A3 ratings profile after two years"

"Oasis's proposals are additive only and are not calling for shareholders to oppose any incumbent directors; we believe there is benefit in having a larger board, like sector peers, allowing for the addition of specialized expertise while retaining existing directors to ensure continuity and stability for shareholders."

"The COGS software and payment line quickly collapsed and became less transparent after its IPO. Support costs clearly changed, and were revised lower, while “other third-party” costs increased and include Lightspeed Payments. Payments is a big growth story for management, but it doesn’t disclose granular cost details."

"Fast forward to TFS’s FY 2010 results and any mention of the outstanding institutional investor’s payment is non-existent. However, the breakdown of receivables shows a massive growth in amounts outstanding from institutional investors despite management’s prior assertion that future BC sales would be on a cash basis!"

"One possible reason why you have not been more realistic in your public assessments of TeliaSonera’s corrupt actions is that you understand that the scale of corruption is jaw-dropping, but you have a misguided belief that the best course of action is to say as little as possible publicly (and possibly to regulators)."

"In Q3 2021, Nuvei made another modification to its “Focus on High Growth Verticals” slide. Looking carefully, we see it now removed the sales TAM per vertical in addition to the CAGR expectation. Furthermore, Nuvei no longer makes the statement of “tremendous upside from continuing to gain share in a massive market.”"

"GFL is acquiring Advance Disposal Services assets. If, by its own admission, it is getting a mixed bag of imperfect assets, than how is it possible based on the metrics it told investors, that the assets are among the most productive and profitable in the industry, and even above Waste Management's corporate average?"

"Note that the magnitude of management’s EBITDA adjustments will only grow over time. In particular, with new wellness center openings set to reach 200-300 per year in FY21-23, with each new wellness center incurring one-time opening expenses of $70K, new clinic launch expenses could approach $15-20M within 3-5 years."

"As we discussed in our investor presentation, we believe this poor capital allocation was the direct result of poor corporate governance at the Board level, including shareholder-unfriendly compensation practices that incentivized management to pursue growth at the expense of returns on capital and shareholder value."

"Given the totality of our forensic research that indicates Zebra's business is under rising pressures from Chinese competition, diminished returns on R&D and innovation, and poorly timed and levered acquisitions that aren't paying off as planned, we are puzzled as to why Zebra's valuation multiple has been expanding."

"The increase was reflective of building inventory to support net sales growth, as well as $8.7 million related to Naturium inventory, and $27.7 million related to a change in certain vendor arrangements where we now take ownership of inventory at shipment from China versus when it enters our U.S. distribution center."

"HIMS' prices for its core products are significantly higher than widely available alternatives. In fact, we would argue that the massive annual savings available from other sources more than offsets the cost, inconvenience, or potential stigma from doctor visits. We believe such pricing disparities are unsustainable."

"DV does not disclose the contribution to revenues from acquisitions to calculate organic growth. The CFO recently referenced M&A as accelerating organic growth. However, based on our analysis we disagree and find that absent the contribution from OpenSlate and Meetrics that organic revenue growth decelerated in 2022."

"The upshot is that while Continental might eat the losses for Aurora on the first few thousand trucks, come the next hardware upgrade cycle, that cost will end up where it belongs – on the truck itself, where it will increase the cost to the customer, reducing the ceiling on what Aurora could charge for its software."

"This analysis has identified multiple clusters of deceptive behavior. My findings strongly suggest that Casino is not being completely revelatory concerning their deleveraging plan, their accounting practices, the French “recovery”, Brazil, and their fears surrounding the S&P re-evaluation of their credit worthiness."

"Pramac has a troubled history. It was listed on the Italian stock exchange (PRA IM) in 2007 and its fortunes swiftly declined. The Company once issued lofty goals of achieving €322m and €48m of revenue and EBITDA by 2014. However, trading in shares were suspended indefinitely in 2012 and Pramac filed for bankruptcy."

"The graver economic issue for public companies is (and always has been) below the gross profit line, where significant non-mining related corporate costs and the constant need to invest in hardware raises the all-in cost to mine bitcoin to a level where nearly all publicly traded miners are effectively unprofitable."

"BP justifies its investment in Renewables & Power with unclear and unquantified benefits of integration: i.e., the argument that BP will have strong internal demand for renewable power in the medium term and that at least part of the renewable power generated by BP could be used internally, makes little sense to us."

"Spruce Point has a negative view of public companies acting like venture capitalists. Our general opinion is that there is a signal effect involved that a public company is mature, lacking innovation, or finding acquisitions difficult if it needs to incubate new business ventures with speculative chances to succeed."

"To your point, here's Zebra takes back 2/3 of distributions inventory, as part of their contract. Now they're holding a big bag, and now they are carrying all that inventory cost. If things were to slow down even more, then they can't ship it. Then they're going to take a hit because they had to give it away, right."

"From the perspective of a recent VP in C3's financial industry vertical, the sales cycle was at least 18 months in late 2020. C3's prospectus notes sales cycles of generally six to nine months, while the CEO recently references a 17 month figure, but is claiming it's down to 4.5 months and is decreasing every month."

"It is time for shareholders' voices to be heard, for accountability to be introduced in the Taubman Centers boardroom, and for a clear message to be sent to the Taubman family that shareholders will no longer tolerate abysmal corporate governance, misguided operations, lavish developments and inferior total returns."

"The estimate of net realizable value of inventory is impacted by assumptions regarding general semiconductor market conditions, manufacturing schedules, technology changes, new product introductions and possible alternative uses, and require management to use significant judgment that may include uncertain elements."

"Spruce Point believes that MSCI's "average" ESG rating is woefully inaccurate and fails to acknowledge that Rollins settled charges with the SEC, has a large vehicle fleet with no plans to adopt EVs, uses pesticides that harm insects vital to the ecosystem, and has been cited in the past for cruelty towards animals."

"Spruce Point conducted a Freedom of Information Act (FOIA) request with the Texas DOT to confirm contract awards to Asphalt Inc, LLC (dba Lone Star Paving) and each of its named subsidiaries. We were provided just one purchase order since 2022 related to equipment rentals where LSP is listed as the prime contractor."

"We find it troubling that so many material changes occurred to Heska’s finance organization, financial reporting, and auditor over the short span of four months in 2020. And these events occurred only seven months into the tenure of CFO Grassman, which followed a 1.5 year period during which Heska didn’t have a CFO."

"Heska’s market cap grew 218% from the close of the scil transaction through the end of 2020. However, despite scil adding a relatively large chunk of negative-growth, ~30% gross margin revenue and Heska consensus 2021E EBITDA estimates not changing, the implied value of scil and CVM grew 282% over just eight months."

"Kao’s external directors are under-skilled with the relevant expertise to oversee a turnaround and overseas growth rollout in the Company’s core consumer products division. However, three of them suddenly developed new skills in the past twelve months to fill out the board skills matrix – including Global expertise."

"Since 2004, McDonald’s stock price has increased from approximately $23 to $61 because of its initiatives to (1) improve systemwide same-store sales, (2) improve profitability at its Company-operated stores, (3) enhance the financial transparency of its Brand business and (4) increase share repurchases and dividends"

"There is clear evidence that HSB penetration is falling behind Generac's internal expectations. Notice carefully, Generac recently revised a key slide that lowered the penetration rate from 5.75% to 5.50%. Also, Generac is claiming that the highest penetrated markets in the U.S. are 15-20%+, down from “nearing 20%”"

"Mercury is now spinning excuses for gross margin contraction as related to acquisitions...while not quantifying any added costs related to the loss of its small business designation, DFARS compliance requirements, or potential recalls and/or new product costs related to replacing Supermicro as a technology partner."

"Our analysis of the budgets for the 2023-24 school year of 50 of the largest school districts in the U.S. by enrollment show that as COVID-19 funds begin to dry up, districts are choosing to prioritize core instructional expenses such as teacher headcount, salaries, and benefits over other areas such as technology."

"Spruce Point does not believe the Evoqua deal was an effective roll-up strategy worthy of the commanding valuation paid by Xylem. After deploying $490m for acquisitions, cash flow struggled ever since COVID-19, and its final acquisition of Mar Cor appears to have been a bust with the return of unpaid earnout money."

"Entering a negative feedback loop: We believe that O Realty is highly dependent on keeping its stock premium inflated to lower its cost of capital to pursue growth. However, we will illustrate that its growth is declining, which will leads to a lower stock price, higher cost of capital and lower investment spreads."

"Detailing the fraud at Ullico and Steed’s role is beyond the scope of this report, but all one has to do is google terms like “Ullico” – the name Steed left off his bio – along with “Steed,” “fraud,” “organized crime,” “insider trading,” and “government hearings” to open a Pandora’s Box of now-forgotten corruption."

"The Audit Committee of the Board of Directors concluded that the Company has a material weakness in its internal control over financial reporting as of September 30, 2019 and December 31, 2019 related to a design deficiency in the Company's review controls over unusual or non-recurring and significant transactions."

"HIMS has highlighted its crossover into positive adjusted EBITDA. However, even taking the adjusted metric at face value, we find that net income from its VIE entities (affiliated medical groups and pharmacies) rather than core operations accounted for over 100% of Q4 2022 and nearly 50% of Q1 2023 adjusted EBITDA."

"Taking into account a number of considerations such as the premier franchise, distribution network, strong library of Filmed Entertainment, relative projected financial performance and analysis of selected comparables, the implied enterprise value of Filmed Entertainment was viewed to be 11.0x - 12.0x 2006PF OIBDA."

"The dramatic “pop” and “drop” reflected in Herbalife’s individual markets are highly characteristic of pyramid schemes, which achieve accelerated growth until a market reaches saturation. After which, there is a dramatic decline in volumes as participants recognize being a distributor is a money-losing proposition."

"Intuit’s two major acquisitions of Credit Karma and Mailchimp generated a massive $5.9 billion of intangibles related to the value ascribed to user relationships and customer lists. Remarkably, the Company has assumed 15- and 13-year useful lives, respectively, for those intangibles for the purpose of amortization."

"Lumen has not disclosed the exact prepayment amount for the $5bn in contracts (neither for 2024 nor in aggregate) but based on the company's change in FCF outlook guidance and the management comments regarding the upfront nature of cash paid in advance of construction, we estimate ~$1.3bn will be received in 2H24E."

"We find that PGNY has been pushing the envelope on its corporate practices since its repositioning as a fertility benefit manager. An investigation by the NYPost in 2016 identified numerous questionable practices, ranging from the unethical to the possibly illegal, as the Company sought to build its clinic network."

"A vote for Trian’s nominees is a vote for a minority slate of four directors with extensive operating, strategic, and financial experience and a history of generating long-term shareholder value – individuals committed to working collaboratively with the continuing directors to achieve the great potential of DuPont"

"LSPD has cobbled together a motley collection of assets at increasingly expensive valuations. LSPD does not disclose target EBITDA margins, and generally hasn't disclosed historical growth rates. We believe a majority of the assets lose money and had already peaked in their growth cycle prior to LSPD's acquisition."

"Taubman's total shareholder return has lagged its Class A Mall Peers since the 2017 Annual Meeting by 22%, due primarily to three factors: (i) the same underlying resistance to truly embrace good corporate governance; (ii) the same operational deficiencies; and (iii) the same stubborn approach to capital allocation"

"if a private entity or its personnel knowingly provided premises or logistical support for the alleged transit, concealment, or processing of children in circumstances inconsistent with applicable international adoption safeguards, that conduct could fall within domestic offences implementing the Optional Protocol."

"As Philip Service Corp. continued to file financial statements, we see that 1996-1997 total operating cash burn was revised up from -$175m to -$224m. Over the same time period, Capex was revised from $92.4m to $82.9m. As a result total free cash burn from these two years was revised higher from $267.5m to $307.1m."

"Spruce Point finds evidence that Generac is aware that its core business is under pressure. Between September and November 2020 it briefly changed a key slide from "Growth Drivers" to "Legacy Growth Drivers." In subsequent versions of its investor presentation, it has deleted the Legacy Growth Drivers slide below."

"We believe that the FY25 revenue guidance increase earlier this month of $10 million is substantially explained by the expected contributions from the Ambry Genetics acquisition and the new Pathos/AstraZeneca deal, two factors that we estimate should have added nearly $46 million to projected revenue for the year."

"Decoupling the provision of the monitoring device from real-time cardiac event supervision and report preparation would dramatically alter the economics of iRhythm’s business, as it would likely result in reduced revenue and effectively relegate the Company to simply supplying a largely commoditized patch product."

"Revealing language buried in Twist’s SEC filings confirms our belief that Twist is misclassifying manufacturing expenses as R&D - the kind of language that lawyers add in an attempt to cover-your-ass, which nonetheless conflicts with the CEO and CFO’s strong, unambiguous statements using the phrase “gross margin.”"

"Samsara has a history of exorbitant cash burn. While the Company celebrated its positive CFO in its latest fiscal Q1 and Q2, we find that the result was primarily driven by exceptional changes in accounts receivable and inventories relative to previous six quarter results and ratios and are likely not sustainable."

"Management has cited a high return on capital over the past 10 years as an indication of their competence. Over a more relevant five-year time horizon, Phillips 66 has underperformed both refining and midstream peers, with the underperformance especially stark after adjusting for midstream's lower cost of capital."

"Spruce Point has serious concerns about DV’s treatment of the Zentrick deferred payment termination accounting. It recorded the lowest possible expense given its estimated range of $2.8 - $5.5 million in 2021. Yet, in early 2022 DV disclosed that it recorded a $5.6 million payment, above the high end of its range."