Callouts & quotes from 984+ activist slides

"We looked at 150 bankruptcies over the past decade to see if we could find any other examples of public companies entering bankruptcy with (i) positive cash flow before debt maturities and (ii) asset values in excess of liabilities."

"Spruce Point observes that Stryker has recorded in its income statement $419 million of inventory sold that was stepped-up to fair value since 2017. Stryker passes this through as a "non-cash" cost add-back to improve gross margins."

"Despite the CEO offering expectations of “winning” in Europe at the beginning of the year, we find that profits were down materially. Even worse, we find that Amcor’s cash pool swung from a surplus of €62.7m to a deficit of -€34.4m."

"It seems possible that as of 2018 at least, rent24 had been booking significant revenue without cash receipts – if that is a correct interpretation, seemingly the lack of cash flow would eventually become Vivion’s lack of cash flow."

"Leidos discloses that $166m of its cash is really earmarked for “outstanding payments” and are included within cash and cash equivalents. Market data providers use an incorrect and overstated cash amount to derive Leidos’ valuation."

"Where is the actual $5.6 million payment that was made in 2022? It is not recorded through the financing or investing section as related to the acquisition. Did it go all through the income statement and reduce operating cash flow?"

"athena wants everyone to back out the stock compensation because it’s a “non-cash” expense. Yet, it pays out cash taxes as part of its stock compensation scheme. At $28 million, that’s more than the company’s entire free cash flow."

"We estimate that Zillow's Adj. EBITDA growth since 2017 is comprised entirely of stock-based compensation. Zillow adds back stock-based compensation to Adj. EBITDA as a non-cash cost but uses cash to repurchase stock from dilution."

"Through accounting sleight of hand, a cash investment partially provided by Invesco, and a reverse merger into a soon-to-collapse U.S. nanocap led by a highly questionable CEO, BUR turned a loss at trial into a purported 195% ROIC."

"Adding a conservative $20 million in estimated cash legal fees incurred to date for this complex international litigation yields an ROIC that, while still impressive, is over seven times smaller than the 3,278% that Burford claims."

"Management plans to use all free cash flow after dividends to repurchase stock and will increase leverage to 1.8x Lease Adjusted Net Debt / EBITDAR from 1.6x. We estimate share repurchases will be ~$10bn to $13bn from 2012 to 2015"

"..there will be times when CLR may outspend its internally generated cash flow. However, so long as it is earning the returns on investment in the incremental barrel produced by these borrowings... this should be of minor concern."

"DND is a high-quality business with competitive products and cash flows of a similar quality to peers. However, it has significantly underperformed its benchmark indices and self-selected peer group over all relevant time horizons"

"We estimate that more aggressive tax maneuvers (i.e. discrete items) by BR in FY 2022 resulted in approximately $20.6 million of cash flow benefits. We believe there are long-term limits to how much lower BR can push tax benefits."

"A senior Genomatica employee told us clearly and unequivocally that they have never paid Ginkgo cash for foundry R&D services, and are simply using R&D credits provided after large investments by Viking and Ginkgo into Genomatica."

"Seventeen acquisitions since Jacobs took control of XPO, $6.1 billion of capital deployed, and it has generated $73m of cumulative adjusted free cash flow = a failed business strategy yielding a 1.2% return on capital investment."

"When we carry the AKG's excess liquidity into 2018, and include the company's amortization of the loan and second phase of the wall pushback, we project the company has a cash shortfall ranging from -$43 million to -$129 million."

"Spruce Point cannot account for at least $294 million in milestone payments. As later illustrated, milestone payments for Mobius and OrthoSpace appear to have been made, but where are they flowing through the cash flow statement?"

"Data providers have taken Amcor's cash at face value and do not adjust, or at least discuss, the presence of bank overdrafts or legal deposits that might restrict cash. This leads to incorrect conclusions about Amcor's liquidity."

"Avery's NTM valuation relative to its closest materials and specialty chemical adhesive peers cannot be justified by Avery having higher free cash flow, or faster sales growth potential. It's dividend yield is also below market."

"We are concerned by the apparent divergence of cash costs related to capex and amounts recorded on the balance sheet within PP&E. Through 2023, the reported amounts reconciled, but in 2024 and 2025 it appears that they diverged."

"As investors watch yet another SPAC fail to deliver on lofty projections and with its cash balance burning away like a rocket with a fuel leak (which Astra has experienced), Astra shares will be left smoldering on the launchpad."

"Besides adding to the evidence that the real farm construction costs were a fraction of that implied by cash flow analysis, this farm project is significant as it is among those four transferred to an undisclosed related party."

"Amcor's financial control issues appear to extend to capital expenditures. Capex in 2018 was mysteriously revised lower, which lends further support to our opinion that its Adjusted Free Cash Flow cannot be taken at face value."

"WTRG cannot cover its dividend with free cash flow that money raised from investors through these programs could essentially be used to pay the same and other investors dividends, or "taking from Peter, to pay Peter and Paul.""

"BHP's c.US$19.9 billion of US onshore acquisitions has led to US$13.1 billion of write-downs, and negative pre-tax free cash flow(1) since purchase of US$9.4 billion for an asset currently valued by brokers at c.US$6.5 billion"

"Bunge may think it is a stable REIT by using FFO as a term and projecting ample “discretionary” cash flow. Based on our more conservative analysis, we see its discretionary cash flow as weak and not even covering its dividend."

"Absent these extreme, and often repeated restructuring measures, Spruce Point estimates AVY’s Adjusted Free Cash Flow would be approximately $265m, or a 13% decline from 2019 – continuing its multi-year cash flow contraction."

"Absent these extreme, and often repeated restructuring measures, Spruce Point estimates AVY's Adjusted Free Cash Flow would be approximately $265m, or a 13% decline from 2019 – continuing its multi-year cash flow contraction."

"At a $36 share price (adjusting for ~$4 of equity value ascribed to the NWC at the Mall and International Stores), Borders would trade at 7x '08E EBITDA, 7.5x '08E EBITDAR and approximately 11x '08E Maintenance Free Cash Flow"

"AOL (assuming initial maximum leverage of 2.5x OIBDA or $4.8 billion) is projected to generate approximately $4.1 billion of free cash flow over the next three years and $7.6 billion of cash flow over the 2006 - 2010 period."

"To understand why NQ’s results were much worse than expected, investors need to realize that prior audits of the company were likely not as rigorous, and the extra scrutiny made it harder to fake profits and cash flow in Q4."

"Margins are already “industry leading” and yet Rollins is now talking about SG&A initiatives. With such strong cash flow, why is Rollins only now making these investments with the Rollins family and management selling stock?"

"Margins are already "industry leading" and yet Rollins is now talking about SG&A initiatives. With such strong cash flow, why is Rollins only now making these investments with the Rollins family and management selling stock?"

"We believe Alpha's cash flow statement does not give an accurate view of its core cash flow because it includes divested businesses, and fails to capture the critical cost of operating the Dominion Terminal export facility."

"Free cash flow conversions, 125% in 2015, average for the last five years, 119%; so just stellar result. We did dip our toe in the water in 2015 on AR factoring, so that isn't 125%. If we take that out, we're still at 119%."

"Spruce Point believes it is customary for large and global U.S. public financial reporting peers to disclose how much cash and equivalents are held outside of the U.S. in foreign subsidiaries or permanently invested abroad."

"For all-cash transactions, you can compare the sum of Incremental Interest Expense, Foregone Interest on Cash, Amortization of Financing Fee, and Incremental D&A against the sum of the target's Pre-Tax Income and Synergies."

"We believe that Tempus is extremely dependent on keeping the perceived value of its equity high because it is among the most aggressive issuers of stock-based compensation at 77% of revenue and 283% of operating cash flow."

"Spruce Point has serious concerns about the accuracy of Xylem’s financial statements for 2023 and 2022 after identifying two sets of published financials. As a result, we cannot trust the accuracy of Xylem’s reported cash."

"Spruce Point has serious concerns about the accuracy of Xylem's financial statements for 2023 and 2022 after identifying two sets of published financials. As a result, we cannot trust the accuracy of Xylem's reported cash."

"The current stock price is so dislocated that the Company should immediately start using a portion of its cash flow to repurchase shares (e.g., 50% with the other 50% for debt paydown) until it reaches its leverage target."

"Not only is Oklo's cash level insufficient to fund its long-term capital requirements, as typical for a pre-revenue SPAC in a capital-intensive industry, we believe Oklo lacks sufficient cash to complete its first project."

"With cash levels well below what BUR had previously characterized as a “strong” cash position, poor cash realizations, and escalating funding obligations, it is no coincidence that BUR aims to raise even more debt in 2020."

"We are advocating for a comprehensive, multi-year capital return program comprised of an accelerated share repurchase (ASR) this year and a minimum percentage of future cash flow dedicated to share repurchases thereafter."

"While capital lease adds have been increasing, capital lease repayments modelled by research analysts reports we’ve seen, have repayments falling. As a result, we believe Adjusted Free Cash Flow will disappoint investors."

"BHP should seek to avoid making badly-timed acquisitions paid for in cash and instead return the substantial upcoming excess cashflow to shareholders by way of post DLC unification 14% discounted off-market share buybacks"

"We are advocating for a comprehensive, multi-year capital return program comprised of an accelerated share repurchase (ASR) this year and a minimum percentage of future cash flow dedicated to share repurchases thereafter."

"We think this is grossly misleading considering that not only does Nature's Miracle not have enough cash to buy $100 million in vehicles from FFAI; it does not even have the cash to preorder 1,000 vehicles at $100 apiece."

"Despite ~50% increase in revenue, ~800bps of margin expansion and improved free cash flow over the last two years, NFLX’s share price is down more than 40% from recent highs and has nearly returned to pre-pandemic levels"

"Spruce Point’s warns that Evoqua’s final 10-K Annual Report made multiple alarming revisions to its “Growth Opportunities” around margin expansion, cash flow improvements, and capabilities servicing complex contaminants."

"As a result, we conclude that the vast majority of the RMB 1.326 billion that was supposedly transferred offshore either constituted a violation of Chinese capital controls or the cash was never there in the first place."

"Elevated DSOs signal cash flow collection issues. The problem is also suggested by an accounts payable specialist posting on the company review website Glassdoor. Kratos is now expanding discussion about DSO in its 10-K."

"We have significant concerns that Axon raised $234m in June 2018, when its balance sheet had $96m of cash, no debt, and it was projecting accelerated revenue growth of 18-20% with healthy earnings projected at over $30m."

"Amcor changed its presentation of cash post-closing of the transaction. We observe Amcor has been increasing usage of cash overdrafts (up from $4m, $78m to $103m in the past 3yrs), a sign of financial strain in our view."

"Based on a forensic review of Amcor and Bemis' statements on capex, we believe it is materially underspending either to boost near-term cash flow, or in support of our view, that its business is in rapid organic decline."

"While we believe there are substantial cost savings opportunities at GRP, the Company could produce a dramatic increase in free cash flow simply by increasing the utilization even in the absence of EBITDA/MT improvement"

"HASI appears to have booked non-cash interest income from SunStrong PIKs totaling $26.4 million over 2019-2021 per SunStrong’s cash flow statement, which is approximately 9.5% of HASI’s interest income during this time."

"The reduction in cash provided was primarily driven by higher tax payments, the investment in a distribution agreement of select technology and the payment of transaction costs associated with the acquisition of Evoqua."

"Finally, and most importantly, this all has a detrimental effect on SGH's balance sheet. As you can see in the chart below, the cash burn eats into the Company's balance sheet and causes a big problem by fiscal Q4 2020."