Callouts & quotes from 26,677+ activist slides

"As an immediate first step, we call on management and the Board to initiate an in-depth, open and truly independent review of BHP's petroleum business, to be overseen by a committee which includes management, shareholder representatives and outside experts, with full disclosure of all results on a timely basis"

"A simple re-rating of ACMR to its direct comparables set - other Chinese WFE national champions that will continue to be directed revenue by Chinese semiconductor customers for many years to come as the country aggressively builds out its homegrown industry - implies multi-bagger returns for ACMR shareholders."

"While we acknowledge that some of ALO’s issue may have pre-dated her arrival, there is evidence the business got progressively worse under her tenure, culminating in a “non-reliance” on Alpharma’s financial statements, multiple restatements, material weaknesses, a DOJ Federal investigate and a covenant breach."

"KOL’s and ex-employees were remarkably consistent, across several dozen interviews, in explaining why Nevro’s sales growth collapsed – yet we failed to see one instance of device failures, lack of efficacy, and explants being asked about or mentioned in ~5 years of earnings calls or effusive sell-side reports."

"Surgeons freely admit that the only use case is convenience, to which the executive replied “100%...they told me first-hand...I’ll sleep overnight...TransMedics can go and get it...but TransMedics won’t let you just hire their surgeon to go...not something they will permit...you’ve got to use the cartridge...”"

"The Board of Directors concluded that none of these candidates possess the relevant board and management experience, expertise and engagement expected of the Company's Outside Directors, and that these candidates would not contribute to the effectiveness of the Board and the enhancement of the corporate value."

"Thus, even though the Sponsor claims it is transferring equipment value to the Tax Equity, when one looks through the economics of the transaction, we believe it becomes clear that RUN is mainly selling assets that are not dependent on the homeowner's purchase of electricity once the FMV has been established."

"Nuvei filed with the SEC a registration statement on October 4, 2021 in which it attached the AIF dated March 17, 2021 showing Allan Lacoste as EVP Partnership Group, North America. However, it’s possible that Allan Lacoste left Nuvei prior to this filing. On Nuvei’s current website Mr. Lacoste is now absent."

"A 15% decrease in the price of product requires a substantial volume increase - even for high margin businesses such as Box - to contribute the same gross margin dollars to the company. Compare this to the volume needed for a price increase - decreasing price hurts a company worse than increasing price helps."

"So, is Ballroom doing well or not doing well? When I hear or learn that a claim is being filed in the German courts for the return of the purchase price you paid because Ballroom is not doing well, and yet you write under no. 11 of the response that Ballroom is doing well, then we are going to lose the claim."

"It appears CTC is more inclined to sell properties than it was in the past. In 2018 and during the first half of 2019, CTC drastically increased the value of sales. This is concerning given that CTC’s debt load has grown substantially over this time. We believe this is a sign the company is strapped for cash."

"Spruce Point believes that analysts are stretching for reasons to promote BOOT with a most recent example being Beyoncé’s new Cowboy Carter album. Unfortunately, we find that consumer interest is quickly fading, and such “one-time” sales benefits should not be a reason for BOOT’s valuation multiple to expand."

"There are extreme reporting anomalies with AMR’s former Trading & Logistics (T&L) segment. Were 2017 revenues between AMR / ANR $478 or $566 million? Furthermore, why was no EBITDA eliminated in the merger when AMR shows $89.3 million of segment EBITDA with 84% of the segment’s purchased coal coming from ANR?"

"There is evidence of exaggerated claims made regarding Oatly's China business. Its Asian president made a statement in China during September 2020 that mainland China had more than 10,000 cafes. However, SEC filings indicate that China foodservice (coffee and tea shops) were closer to 8,000 – 8,200 locations."

"We believe investors are ascribing an irrationally high valuation to Oatly. Per the Company’s own trusted data source of Euromonitor, the plant-based dairy market in its key regions is expected to be $21 billion by 2025. However, Oatly’s current valuation is almost $12 billion, or 62% of the projected market."

"There's Chinese companies making this stuff really cheap all day long. And that's a threat because whenever there's a market like the rugged tablet market is a good example and even the video conferencing market that I'm in, those are very high-margin businesses, like 40%, 50%, 60%, even sometimes 70% margin."

"To be used for the internal business of the assigned users only. Sharing, distributing or forwarding the entirety or any part of this article in any form to anyone that does not have access under your agreement is strictly prohibited and doing so violates your contract and is considered a breach of copyright."

"CEO Adnani is classic entrepreneur in our view who is self-assured with grand ambitions supported by highly promotional claims. However, we are further troubled by his judgement and association with a web troubling business relationships. Further, his time is distracted with two other public company ventures."

"Perion’s PP&E, operating lease assets, and capital expenditures in relation to its revenues are so far below the advertising technology industry average that it raises material concerns that either they are wildly underspending to develop and maintain their technology assets, or that their sales are inflated."

"GINGKO BIOWORKS executive #1 repeatedly stated “the jury is still out” despite ~24 months of partnership; still just “a concept on paper” that hasn’t been operationalized; unclear if machine is built for the right set of applications; “hard to know” how it compares to other ways of screening; “just so early.”"

"Heska fails to provide adequate financial disclosure to allow investors to properly assess business performance. We find that most of the omissions are provided by sector leader IDEXX Labs, suggesting Heska is not conforming to industry norms. Moreover, some Heska disclosures are simply wrong or inconsistent."

"In view of the apparent discrepancy between these public representations and the alleged unlawful practices occurring on the ground, there is a risk that Accor SA could be considered to have disseminated misleading information to consumers regarding the scope and effectiveness of its human rights commitments."

"Erie Indemnity Company, which is the public traded entity serves at the attorney-in-fact for the policyholders of Erie Insurance Exchange, “Exchange”. Erie Indemnity Company receives a management fee, not to exceed 25% of annual premiums written by Erie Insurance Exchange, for handling day-to-day operations."

"Dye & Durham closed at $14.80 per share on its first trading day. This is the price that needs to be used when comparing performance with other publicly traded companies. Introducing the IPO discount in the measurement creates an apples-to-oranges comparison since the peers did not benefit from the IPO bump."

"To discuss these challenges, we would like to meet with you. In light of the critical importance of independence in your role, and the undue influence that senior distributors and senior management have exerted over compliance efforts in the past, we propose a meeting without other executives of the Company."

"With KRNT’s share price up 55% YTD and near all-time highs, Spruce Point finds certain events concerning in the overall context of management touting record results and ‘game changing’ new product innovations, and promoting an Amazon deal where we find concerning revenue recognition and accounting anomalies."

"Kornit’s share price is effectively at the average analyst price target which is near all-time highs, yet none of the analysts have closely investigated the impact of Amazon payments and revenues tapering off, but instead anchor their estimates to management hitting ambitious long-term $500m revenue targets."

"Perion promotes its iHub, but how does the model work? In the most recent version, it not only made the pictograph significantly less elaborate, removed the millions and billions of data points, but also changed the flow of video monetization and social, a key part of the growth story, and also removed Bing."

"Sell-side analysts are not exceedingly bullish on the stock: several analysts do, in fact, voice concerns regarding the sustainability of Hill-Rom’s sales growth, in addition to frustration with management’s frequent re-basing of core sales growth ("core fatigue," as it’s amusingly called on earnings calls)."

"Spruce Point does not believe that BR is justified in calling itself a SaaS company with margins that scale. In fact, its financials look nothing like a high quality SaaS company. When we benchmark BR's gross margins and deferred revenue relative to its recurring revenue, we find it to be wildly below peers."

"Elliott believes that there is an opportunity for stockholders to realize value SIGNIFICANTLY greater than BMC's current stock price through the addition of thoughtful and experienced technology executives who will encourage a full strategic and operational review with the aim of maximizing stockholder value"

"In short, we believe a standalone digital cytology provider such as Lacuna has no sustainable competitive advantage, as the technology is relatively simple (transmitting a test image or result) and the available pool of veterinary pathology expertise is large and fluid (Lacuna has lost two to IDEXX to date)."

"But when a third of the value of the company is cash, managing it requires the sort of attention one would normally reserve for operating the business. And in contrast to the rest of Apple’s business, where innovation is the norm, Apple’s attitude toward managing its cash has been exceedingly non-innovative."

"This survey data supports the thesis that if compensation cooperation requirements were eliminated and home-buyers had to compensate their agents directly, a significant population of home-buyers would try to negotiate commissions, seek agents with lower fees, or even try to purchase a home without an agent."

"This happened to the storied former bulge bracket investment bank Credit Suisse. On Sunday March 19, 2023, UBS announced that it will acquire Credit Suisse for ~CHF 0.76 per share. Credit Suisse shares closed at CHF 1.86 per share on the Friday before. This represents ~59% offer discount to the market price."

"Herbalife's entire business model appears to incentivize primarily the payment of compensation that is ‘facially unrelated to the sale of the product to the ultimate users because it is paid based on the suggested retail price of the amount ordered from [HLF], rather than based on actual sales to consumers.’"

"The senior employee noted that inventory mis-valuation in the semiconductor equipment industry “is a common thing, unfortunately, that I’ve seen across multiple companies in the space...to manipulate earnings: “they defer out...that impairment...because they don’t want to record a hit on their gross margin.”"

"Recent legal filings show that Nuvei’s Vantage Payments worked with Allied Wallet. Individuals associated with Allied Wallet have been charged with scheming to defraud financial institutions and securing payment processing for high-risk businesses through fraudulent misrepresentation about merchant clients."

"As confirmation of this market opportunity, our illustrative analysis shows that across all the relevant markets, there is a total potential licensing revenue opportunity ranging between $750 million - $1.0 billion, with a potential current annual run-rate of more than $75 million based on device shipments."

"[Dauman] took a short-term financial gain beginning in 2011 by selling kids TV hits including SpongeBob to Netflix. That now appears to have backfired by encouraging young viewers to abandon Nickelodeon and other ad-supported channels and go online where they can watch shows whenever they want, without ads."

"Wall Street is fixated on Kratos's earnings "potential" of >100% growth in the next few years and give KTOS a commanding 20x and 70x EBITDA and P/E ratio. Be warned: this growth is off a low EPS base, on highly adjusted figures, and will surely disappoint given Kratos demonstrated ability to poorly execute."

"Management claimed that Utiba’s revenue contribution was “immaterial” in Q2 FY 2014, when the business was first acquired. However, during its Q4 FY 2015 call – three quarters after it first launched the MFS segment – management confirmed that MFS was generating revenue “in the tens of millions of dollars”."

"Based on our research and conversations, we believe recent acquisitions executed under Farrell and Dierker have been poorly planned and executed, and more aggressively structured (notably with earnouts) – insult to injury given the large multiples paid for these deals and rising debt load to fund the deals."

"The former Mailchimp employee also confirmed our belief that Mailchimp provides little benefit in facilitating QuickBooks' international expansion, another oft-stated rationale for the deal. In the end, the former employee questions, as do we, whether the Mailchimp deal will be value-destructive for Intuit."

"Spruce Point finds that, taken together, management’s consistent under-reserving has created $55M in paper earnings since FY15, accounting for 6% of cumulative EPS over the same timespan. Reversing each of these items to their FY15 levels would result in management wiping out over 16% of consensus FY19 EPS."

"Spruce Point has evaluated some of the language used by management about its relative market share. Whereas in the past management talked about growing relative market share, the tone shifted in 2023 to things it was worried about and then to referencing “enhanced” relative market share vs. outright growth."

"Spruce Point believes Heska Corp (Nasdaq: HSKA or “the Company”), a $2.8 billion market cap animal health equipment distributor, has been struggling to grow organically and has been using low-quality acquisitions as a means to deflect market share loss and margin erosion and to generate investor enthusiasm."

"Since we were not able to find any production equipment or raw material inventory on site, we think it is highly likely that EH has the near-finished parts manufactured and shipped in from contractors, performs simple light assembly on site, and then stores units at EH’s corporate headquarters in Guangzhou."

"You then said you had an investigation conducted by Ernst & Young (EY). This is the same company that prepared the annual financial statements. What did you expect? That they would come forward and say, Oops, sorry, we've made a mistake, we're returning our auditor's licence to practice? This is laughable."

"Karl's significant experience transforming independent E&P companies and operating a global portfolio of conventional and unconventional assets, as well as his track record of value creation across exploration, production, midstream, marketing and private equity will add significant value to the Hess Board"

"INVESTORS AND SECURITY HOLDERS OF VALEANT AND ALLERGAN ARE URGED TO READ THE PROXY STATEMENT(S), REGISTRATION STATEMENT, PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION."

"Darden's current conglomerate model and inefficient asset ownership structure are preventing Darden from realizing its potential operating performance or maximizing long-term value for shareholders – we are excited to instill change at Darden for the benefit of all shareholders if our nominees are elected."

"Current investors are paying a significant premium to the Company’s historical valuation. Spruce Point finds it difficult to justify Kratos’ valuation expansion in light of its history of disappointment, unproven drone opportunities, questionable business practices, shrinking backlog, and rising cash burn."

"Monster's Australian filings show increased financial strain. While Monster was publicly referencing “timing of sales into bottlers,” “shipping delays” and “severe flooding” its financial reports indicate it either lost a major customer (or they consolidated into one larger customer) between 2021 and 2022."

"Stifel's $29 price target and "Buy" recommendation illustrates that analysts and investors are expecting expansion of the Amazon relationship. Barclays as well believes Amazon sales will be stable for the next few quarters, and acknowledges the big downside risk. We believe the market will be disappointed."

"BR has experienced multiple expansion over the past few years, while the evidence shows its cash flow has deteriorated, it has a shrinking ecosystem and greater customer concentration, has failed to deliver on the UBS project in a timely manner, and may be under increasing regulatory scrutiny from the SEC."

"Spruce Point believes that the overwhelming macroeconomic events which have transpired since the deal was announced could render the business even less appealing at the current juncture, encouraging the buyers to pressure Forescout into renegotiating the deal, or even compelling them to walk away outright."

"Although NICE is larger than Verint on most metrics (revenue, EBITDA, EBIT) and more efficient (revenue per employee, EBIT per employee), average compensation per insider at Verint is over 3x that at NICE, and Verint insiders take home a far greater percentage of EBIT in compensation than do NICE insiders."

"Spruce Point believes there is rampant misunderstanding of CLEAR’s capital structure. Even Bloomberg fails to identify over $115 million of operating leases. However, we think the biggest disconnect is the multiple share classes that are convertible to Class A shares and the Tax Receivable Agreement (TRA)."

"The abstract states “no cardiovascular or other significant safety concern,” yet three patients on pitolisant had at least one prolonged QT interval >450 msec and 4 patients had at least one QTc longer than 60 msec - and one patient in the pitolisant group died due to cardiopulmonary failure (heart attack)"