Callouts & quotes from 26,677+ activist slides

"We have thus far established that (1) the Libre 2 will be nearly technologically equivalent to the G6, (2) Abbott has the financial capacity to drive CGM pricing to unsustainable levels for Dexcom with only limited consequences for its own profitability, and (3) even Dexcom’s most technology-dependent Type 1 diabetes customers could switch to the Libre 2 given its new technological capabilities and the potential degree of cost savings to be had from switching."

"This begs three questions: 1) What is the value proposition of the Taexx system if homeowners don't even realize they have the system installed as a home buying benefit, 2) If conventional pest control sales were 90% of the business, and HomeTeam D2D marketers were successful, why does Rollins need Fox's marketers to push the use of Taexx, and 3) If HomeTeam's margins are well below corporate average, why is Rollins pushing investment in lower margin business?"

"Using the Wayback Machine, we see that Chronogolf has gone through three iterations of its pricing plan. Initially, customers could get any of its plans for free. In exchange for using its tools, it would ask for a set of golf games which it would promote and sell online on its marketplace. Its most popular promoted “Eagle” plan was $299.99 per month. At the time of acquisition by LSPD, we see that its comparable plan was offered at $250 per month in 2019."

"Article 2: Defines “pyramid selling” as an “an act by which an organizer or operator seeks for unlawful interests, disturbs the economic order and affects the social stability by recruiting persons, calculating and paying remunerations to recruiters on the basis of the number of persons a recruiter has directly or indirectly recruited or the sales performance, or asking the recruiters to pay a certain fee for obtaining the qualification for participation.”"

"As we discussed earlier, just 4% of men over 70 have prostates above 100g, and our research found that Aquablation is most competitive versus MISTs and other resective procedures for larger prostates, above 80-100g. Thus, even if we assume 10% of active patients have large prostates, 9.6 million patients, and a 2% annual intervention rate, that implies only 19,200 of the annual 192,000 estimated annual BPH interventions are “best suited” for Aquablation."

"CCME Rep: The situation is just what I’ve told you. Say for example we have 1,000 vehicles, 1,000 is the number we quote to outsider. But I have only quoted 500 vehicles to you, because these 500 vehicles are already signed with contracts and installed with devices. The other 500 vehicles don’t have devices installed, so the number I quoted to you is the actual number, installed with devices, but our company has asked us to claim based on 1,000 vehicles."

"Spruce Point believes that consensus estimates for future aspiration catheter revenues are not analytically robust. Yet, as with most companies, the market interprets these estimates as a good indicator of future sales, and as perhaps the most educated, rigorous, and analytically complete assessment of future performance. Accordingly, we believe that Penumbra shares are currently valued according to estimates which likely feature a high degree of error."

"While impressive on the surface, Samsara’s historical revenue ramp has been the result of opportunistic targeting of a one-time government mandate, an accounting sleight of hand, the beneficial impact to revenue recognition of customer financing, and the aggressive practice of buying out existing customer contracts (an extremely expensive technique for buying business that we believe is not appropriately captured in the Company’s financial disclosures)."

"To expose the true nature of BlackRock's argument as entirely pretextual, on the 5th of April 2024, Bluebell Capital Partners has informed BlackRock (see Appendix 1) that it is prepared to withdraw our proposed to amend by-law, subject to the following condition: BlackRock must irrevocably commit to adopting a policy that mandates an independent board chair, effective BlackRock AGM 2025, with the announcement to be made to the market by April 15, 2024."

"IDEXX has dominant 55-60% market share in diagnostic equipment, the best selling disposable fecal test (SNAP), and operates one of the leading reference labs in the world. IDEXX also has more fecal-related patents than Heska has total patents. We imagine they understand the market's demand for such testing and the technology required to do it better than Heska. We believe their entry into the point of care market would be a material negative for Heska."

"Families are also indicating concern about hypertrichosis – excessive hair growth – a known side effect: “just hands and feet and the one girl we heard who just shaved it off”; “my daughter definitely had the excessive hair growth during the trial…her back, legs, arms, upper lip, and forehead”; “our endo did mention the possibility of shaving the forehead”; “they had patients…in the trial?…that were shaving their foreheads…was it on random body parts?”"

"Parents appear to be sounding the alarm to warn other parents – “I just wanted to share, and I hope this is not happening to any of you...my son...started Vykat 7 weeks ago...he was going alright (no appetite change though), but a week and a half ago his legs and feet started to swollen [sic] rapidly, to the point it was hard to walk...he was given a week of diuretics and we stop Vykat...his legs and feet are fine now...has it happened to any of you?”"

"Parents appear to be sounding the alarm to warn other parents – “I just wanted to share, and I hope this is not happening to any of you...my son...started Vykat 7 weeks ago...he was going alright (no appetite change though), but a week and a half ago his legs and feet started to swollen [sic] rapidly, to the point it was hard to walk...he was given a week of diuretics and we stop Vykat...his legs and feet are fine now...has it happened to any of you?”"

"We found one anecdote striking: "Dr Miller is AMAZING! She walked in to our appointment and gave us a BIG hug. Then her attention turned all to Kimber, who was acting a little shy and nervous...after trying to coax a few words out of her she simply turned to us and announced 'We're going for a walk. You guys stay here.' They were gone for about 10 min. When they came back Kimber had bubbles and a puzzle and was just chatting away with her new bestie.""

"We believe the evidence is clear: tech spending by school districts will be pressured during the 2023-24 school year. The effect is magnified in districts that have seen declining student enrollment. However, we believe this is just the beginning as ESSER funds won't run out until September 2024. Spruce Point believes this pressure will only continue to intensify in 2025, which will be the first full year without emergency federal funding since 2019."

"TASK's financial performance is not as robust as it appears on the surface. The company promotes its 57% top-line growth, 82% and 95% Adjusted EBITDA and Net Income growth, respectively. However, we point out that the COVID-19 adjustments are not industry standard, and should be removed. Furthermore, by adjusting LTM cash flows for one-time equity payments, we find that cash flow growth has lagged headline figures. Free cash flow growth was negative."

"The other key observations from our derivation of estimated Live metrics are that (1) Consumer segment revenue grew faster before the launch of Live (FY 2016-2018) than it has over the past three years (FY 2022-2024), suggesting Live's massive revenue growth may just be fueled by cannibalization of non-Live revenue, and (2) Consumer segment revenue growth ex-Live is very modest, we believe calling into question the sustainability of the franchise."

"It is, but let me tell you something [chuckles]. There are certain things that are a little cloudy, especially with Methodist. So, the chief of transplant at Methodist, it is very well known, that he owns a lot of stock from TransMedics. That is a lot of conflict of interest there, which I don't know how he managed with the cost, but it is very well known by everybody that the chief of transplant at Houston Methodist owns a lot of their stock."

"Weis claims hardship in tracking prices or products sold (don’t worry we’ve done the work): "Although the Company experienced retail inflation and deflation in various commodities for the years presented, management cannot accurately measure the full impact of inflation or deflation on retail pricing due to changes in the types of merchandise sold between periods, shifts in customer buying patterns and the fluctuation of competitive factors.""

"The Intel SPIE papers confirm challenges with Lasertec’s EUV tool, namely contamination and optics degradation from tin plasma (“ion induced damage to the optical components”); light source stability and brightness level; struggles in managing source brightness vs. source chamber pressure, as high pressure is needed to help mitigate tin debris but which reduces brightness; and unstable plasma which leads to dark pulses and inspection failures"

"The ex-Nevro district manager’s comments reveal the severity of what we believe the company has covered up: that “sort of every KOL was saying the device isn’t working”; that sales reps across the country came to the same conclusion; the company refused to acknowledge the situation and blamed the reps instead; and that he personally couldn’t look customers “in the eye and ask them for visits anymore, because I didn’t believe in the therapy.”"

"We have conducted on the ground due diligence in China and believe that Ballard’s Chinese growth ambitions are likely to fail from weak partnerships with Broad Ocean and Synergy, and a market that is not developed enough to support fuel cell vehicle growth; Déjà vu, Ballard’s last China deal with Azure resulted in a contract breach and revising guidance lower in early 2015; investors should brace for similar disappoints this time around too"

"Spruce Point believes Mako’s robotic surgical platform is one of the few growth drivers in Stryker's overall lackluster product portfolio and could be over $1 billion of annual revenues. However, we believe that sell-side analysts and investors are not attuned to the fact that Stryker recently cut prices on Mako’s product suite by -17% to -30% in response to companies like Zimmer, which have been giving their system away at no upfront cost."

"LumiraDx and Butterfly Network are two recent SPAC merger targets that are focused on low-cost point of care diagnostic testing (blood/disease testing and ultrasound, respectively). Although they focus on humans as opposed to companion animals, their application areas offer high growth potential. However, despite their business similarity and dramatically higher anticipated growth, they still trade at discounts or small premiums to Heska."

"Over the course of his nearly two decades as an institutional investor, Mr. Loeb has developed a sophisticated understanding of how to create and unlock long-term value for shareholders. As Chief Executive Officer of the Company's largest shareholder, Mr. Loeb would advocate vocally for stockholders' interests if elected to the Board. For these reasons, we believe Mr. Loeb is exceptionally qualified to serve as a director of the Company."

"AMR had two audit partners at KPMG before being dismissed. Its current RSM audit partner has a history with a controversial company. Notably, Phyllis Deiso was audit partner at EBIX, Inc. (Nasdaq: EBIX). EBIX's share collapsed 50% in 2021 after RSM resigned and noted its inability to obtain sufficient audit evidence for significant and usual transactions related to its business in India. We note that India is AMR's largest export market."

"The culture is very toxic...We used to call Zymergen Theranos because it was lying so much about the Hyaline film, and all the stuff that came out about Hyaline being not good for customers and stuff, we all knew that for a whole year, we just couldn't talk about it. I just think that it's lying about stuff that's creating an extremely toxic culture, silencing...The culture is pretty toxic. There are some really terrible things going on."

"We believe the Street is structurally misunderstanding the magnitude of the cybersecurity-related costs that Mercury will face going forward, as well as the delays in revenue contract award opportunities it will face in its high-growth “command, control, communications, computers, and intelligence” (C4I) segment – expected to be a $100m business. Mercury does not even have a CISO at present, and only recently replaced its departed CIO."

"Lasertec customers who have recently visited Lasertec’s headquarters confirmed seeing highly unusual levels of inventory - "pretty scary...pretty weird" - and other red flags: their "factory floor for finished goods is full.. a substantial amount of finished goods inventory that’s either not passing [evaluation]" or "customers have deferred shipment"; "literally no space left on their final inspection bays before the equipment ships.""

"Across the three machines, we’d have daily issues. Some consumable parts within, such as mirrors and the like, that when they were approaching their end of life, we’d see an uptake in issues, but it wouldn’t warrant shutting the tool down just because the end goal was trying to maintain 24/7 operation based on customer needs. So, there was a balance between sacrificing a little bit of speed and functionality for maintaining uptime."

"We consider the poor functioning of the Board, and the lack of proper oversight to the point of not even acknowledging “Greenwashing” as a specific risk category, particularly alarming: this is especially true when considering that the “Greenwashing” risk has been arguably increased by the numerous statements around ESG personally made over the years by CEO and Chair Mr. Fink, which are inconsistent with BlackRock actual practices"

"We consider the poor functioning of the Board, and the lack of proper oversight to the point of not even acknowledging “Greenwashing” as a specific risk category, particularly alarming: this is especially true when considering that the “Greenwashing” risk has been arguably increased by the numerous statements around ESG personally made over the years by CEO and Chair Mr. Fink, which are inconsistent with BlackRock actual practices"

"Zillow's former CFO, who served for ~6 years, resigned in May 2023 with no clear explanation for the transition. He was replaced by Jeremy Hofmann (37), who previously served as Zillow's SVP of Corporate Development and Strategy. Moreover, Mr. Hofmann has never held a public company CFO position, has no functional accounting or financial reporting experience, and is relatively young for the position based on a Korn Ferry analysis."

"In light of our issues with various acquisitions (including: purchases from owners embroiled in litigation, limited deal costs and, unexplainable and quick post-acquisition financial improvement at Smart2Pay and SafeCharge), we find it curious that Nuvei recently added a new Risk Factor warning about information received from targets, and that it has not independently verified the accuracy or completeness of information received."

"BlackRock is a textbook example of bad corporate governance due to an oversized Board (16 directors vs. the S&P500 average of 10.8), low women representation (31% vs. the S&P500 average of 33%), long tenure of directors as a symptom of lack of independence (10 yrs vs. the S&P500 average of 7.8 yrs), low presence of independent directors (81% vs. the S&P500 average of 85%), and above all, a Chairman who is also the CEO (Mr. Fink)."

"When you combine the ~€150M that WFG generates as a distribution business with the 70% of the Operating Earnings from Aegon Americas Individual Solutions segment that WFG may be responsible for, then WFG could have been responsible for €400M+ of operating earnings in 2023, ~35% and ~25% of operating earnings in the Americas and for the consolidated Company, respectively, making WFG one of Aegon’s single most impactful businesses."

"I would call him Waleed’s enforcer...he’s someone you wouldn’t be surprised to find out is knee-capping people...Tamer’s just going to tell you...‘this is how it’s going to be’...and you’re going to like it, and if you cause any trouble, I’m going to keep you in line...those movies where the guys go around and collect the protection money...that’s what he reminds me of - the guy who’s going around to collect the protection money."

"LinkedIn profiles of current and former field service engineers hint at the challenges: “tackled challenging problems regarding losing EUV light transmission through EUV optics”; “we needed to work with…troubles with our existing equipment”; “troubleshooting…equipment problem”; “cooperated with design engineers in Japan…to resolve complex maintenance issues”: “providing service support to customers encompassing…system breakdown.”"

"Verint's restructuring charge add-back appears particularly suspicious to us. We note that management has never announced a formal restructuring program; rather, it defines “restructuring costs” as “employee termination costs, facility exit costs, certain professional fees, asset impairment charges, and other costs directly associated with resource realignments incurred in reaction to changing strategies or business conditions.”"

"Heska has stated on numerous occasions that it sees an opportunity to convert existing scil customers in Europe to subscription programs, replicating its efforts with US customers that began in 2013. However, our research makes us skeptical, since (1) scil already offered subscriptions, so Heska’s year end 2020 figure is not indicative of recent conversions, and (2) IDEXX and Zoetis are laser focused on the European opportunity."

"The purpose of this letter is to specifically outline the following two important opportunities that we believe the Board and management team should pursue in order to unlock value: (1) An exploration of all strategic alternatives for the underperforming Family Dollar business, including an outright sale; (2) An evaluation and initiation of a wide-scale market test of a multi-price point strategy at Dollar Tree bannered stores."

"Warning: Oatly regularly touts its good corporate citizenship to the environment. In its 2019 Sustainability Report, it hinted that its growth was placing strains on its short-term ability to improve its environmental footprint, but pledged to “make things right again” with various improvements. However, Spruce Point believes that it has back-tracked on this pledge. We find that it has unremedied EPA violations for over a year."

"Spruce Point observes that multiple DV executives have 10b5-1 trading programs to dump stock. Most recently, the Chief Legal Officer enacted a program in mid March 2023. We also observe that an unusual reference was added to CEO Zagorski's Form 4 referencing vested shares being delivered "as soon as administratively feasible following his separation from service with the Issuer." Is this an indication that he is on his way out?"

"CEO Fayer’s businesses have each come under scrutiny. His current biography says he founded Pivotal Payments (now Nuvei) in 2003. However, it doesn’t talk about the fact that his Company PaySystems was still operating in 2004. PaySystems ended poorly with consumers putting up websites such as PaySystemsFraud.com. Even today, industry reviews claim that Nuvei is nothing more than a continuation of Pivotal’s old shady practices."

"During the third quarter of fiscal year 2024, the USG announced new and updated licensing requirements for exports to China and Country Groups D:1, D:4, and D:5 (including but not limited to, Saudi Arabia, the United Arab Emirates, and Vietnam, but excluding Israel) of our products exceeding certain performance thresholds, including, but not limited to, the A100, A800, H100, H800, L4, L40, L40S RTX 4090, GB200 NVL72, and B200."

"Given that Ginkgo is simply engineering yeast and doing so with the same third-party equipment others use, we were not surprised that former employees indicated the "Foundry" is nothing special: "not unique"; just standard small molecule screens people have done for decades; robotics are nothing innovative, just a "schtick" around automated liquid handlings; no unique equipment or IP; nothing "that other companies don't have.""

"During the third quarter of fiscal year 2024, the USG announced new and updated licensing requirements for exports to China and Country Groups D:1, D:4, and D:5 (including but not limited to, Saudi Arabia, the United Arab Emirates, and Vietnam, but excluding Israel) of our products exceeding certain performance thresholds, including, but not limited to, the A100, A800, H100, H800, L4, L40, L40S RTX 4090, GB200 NVL72, and B200."

"I think the government is working their way down. Because what CMS does is like, what’s a reasonable cost? Well, this stuff is all new, so they’ve never established what reasonable costs are. I think what they’re going to do is I think they’re going to come in and they’re going to establish ‘reasonable cost.’ And now, all of a sudden, the Hawker 800 that costs $12 million does not make sense because that’s not reasonable cost."

"And one of the reasons why I also left MSCI is because I anticipated that there's a very strong saturation of the market with ESG or ratings, which is the product which MSCI can charge the most for. And any other products which are in the family of ESG family of products, ESG family of products, they are nowhere close in terms of how much value they bring to the client base. Plus, they're not sticky and they're not as pricey."

"Isn’t it strange that accounting, industry and business scandals and problems have befallen Lumber Liquidators, Tile Shop and Floor & Decor. Yet, despite many clear and obvious signs to us of Floor & Decor’s revenue misstatements, disclosure omissions, accounting policy changes and leadership associated with prior scandals, its equity value reflects “success” in an otherwise difficult to impossible industry to make money?"

"Former employees we interviewed indicated a widespread awareness of and concern inside Ginkgo about its related-party/round-tripping business model: fear inside the company it may not be able to go public or could “be slammed by regulators”; indicated “confusion” at what Ginkgo counts as revenue and questioned if “money actually passed hands”; and suggested that concern around the circular flows was widespread internally."

"The Company reclassified prior year comparative figures in the condensed consolidated statement of cash flows to conform to the current year's presentation. In addition, the Company reclassified certain prior year comparative figures from interest expense to net sales to conform to the current year's presentation. This change in presentation did not have an impact on the Company's financial condition or operating results."

"If customers can't venture into the store with their pets - forcing them either to leave their pets in the car (which most pet owners prefer not to do) or to return to the store to purchase whatever else they intended to buy - does the in-store wellness center model really save customers a trip to the vet? Is it any more convenient than a stand-alone veterinarian (especially considering their limited service offerings)?"

"It is important to note that, to our knowledge, this data is known to very few market participants: it is designed for and provided primarily to the health care industry. Our understanding is that it is known to few, if any, sell-side brokerage firms. We believe that the market is generally blind to this data, and that prices of Penumbra shares must adjust to reflect this powerful, credible, and compelling information."

"The figures for the cardiovascular endpoint have also been manipulated: Though the SONAR study acknowledges 31 cardiovascular deaths in the drug group and 28 in the placebo group among responders, along with 47 hospital admissions for heart failure in the drug group and only 34 in placebo among responders, it then makes use of two strange calculations to arrive at its cardiorenal and cardiovascular composite endpoints."

"With public awareness of the Chinese hack story high, relations with China cooling, and military spending cycles accelerated under the Trump administration, it would be no surprise if the government encouraged domestic sourcing or other remedial actions for companies tied to Supermicro within a relatively short period of time, forcing companies like Mercury to bring forward their cybersecurity-related spending rapidly."

"Starboard believes that Mr. Lacey’s experience in the senior management of public companies, including service as chairman, president, chief executive officer and corporate vice president, his experience on the boards of directors of public companies, his financial expertise and his direct knowledge of the component manufacturing and camera module business, will enable him to provide invaluable oversight to the Board."

"Spruce Point finds it highly suspicious that AMR claimed all year in 2021 that it had 100% of its “All other” segment coal from NAPP priced. By late October that changed to 90%. By year end, it reported selling just 1.27m of the 1.50m tons. Yet, for the year, AMR reported realized pricing of $61.76 per ton vs. its last reported sales commitment of $58.33 per ton – a 6% premium for a business that appears under stress."

"Generac has been pitching its story that HSB’s have a low market penetration, with powerful macro trends that will materially increase adoption. They have continuously shown a slide comparing generators with central air conditioning, and home security alarms to illustrate the potential of where portable and home standby generators can grow. In 2015, the penetration was 3.5% and now seven years later, it is only 5.5%."

"In short, shareholders are demanding change now, and Elliott remains committed to providing them with a clear choice between continued industry-lagging performance under an incumbent leadership team that has repeatedly failed to deliver on its promises, versus fundamental leadership change involving new and proven airline industry executives capable of returning Southwest to its rightful place as an industry leader."