Callouts & quotes from 1,508+ activist slides

"Investor enthusiasm ebbs and flows over the years for money-losing and speculative fuel cell and energy storage companies similar to Ballard (ex: PLUG, FCEL, and HYGS). We find long-term valuations tend to be around 2.0x - 2.5x book value and 1.5x - 3.5x revenues"

"Spruce Point has had a lot of success in identifying aggressive accounting related to unbilled receivables. Suspiciously, the rise in unbilled receivables may have given C3.ai a "cookie jar" needed to deliver quarterly revenues above the high end of its guidance."

"Like State Street, their problems have been largely self inflicted as the whole industry has been poorly managed in our view (e.g., disappointing cost controls, poor capital allocation, lack of price discipline in core custody as ancillary revenues have declined)"

"After we make this final adjustment to the 223 million Rmb deferred revenue balance from before, we get 156 million Rmb of deferred revenue at fair value—or, just $24 million. Based on the calculations we made, TAL overstated Firstleap’s deferred revenue by 90%."

"Applying that rate of revenue contraction to each geography implies that areas outside those markets must grow 15% and 20%, respectively, to meet Street consensus, which we believe is unlikely, particularly given Skechers' challenges in the domestic U.S. market."

"Carvana not only trades at nosebleed levels relative to its closest peers, even on consensus revenue growth expectations we regard as too high, Carvana now trades at a premium to leading tech players, all of whom enjoy better margins and generate free cash flow."

"It is concerning that Limbach removed working capital targets from its incentive compensation plan targets after 2020, particularly given the Company's use of cost-to-cost accounting, where revenue and profit recognition are heavily tied to management estimates."

"a vote for Trian’s nominees is a vote for four highly qualified individuals who will seek to work collaboratively with the Board to: Assess the corporate structure and determine whether management is capable of achieving best-in-class revenue growth and margins"

"The only possible reason why EDU’s Beijing subsidiary would not be paying Enterprise Income Tax is because it is not turning a profit. PRC tax law makes it clear that no EIT exemption is available to the BJ Operation because its revenue is deemed “for-profit”."

"Trian believes the mindset and culture at State Street has prioritized growth (in AUCA, AUM and revenue) over profitability. The “land grab” mentality must transition to a focus on EPS growth, return on invested capital and maximizing total shareholder returns"

"Mitek's true rationale for adopting this poison pill - old-fashioned entrenchment - is demonstrated by the Company's use of an amorphous and far-reaching definition of beneficial ownership that extends well beyond the requirements of the Internal Revenue Code."

"We believe that, even on reasonable base-case assumptions for growth in new products and the legacy business, respectively, Hill-Rom should miss consensus core revenue estimates by 2% – a top-line miss the likes of which the Company has not seen since Q2 FY16."

"Yahoo said on December 9th that Gemini is now at a $500 million revenue run rate but has never given any financial details to demonstrate this product's success and hasn't said how much of the $500 million run rate comes from cannibalizing other Yahoo revenues"

"During FY2018, PBH changed its organic revenue disclosure to “organic & proforma revenue growth” to include the benefit of the acquired brands growth. We believe investors should not give management credit for the high growth of PBH’s recently acquired brands."

"We find it concerning that management’s definition of “cloud revenue” is not consistent between its press releases and financial statements, with its SEC filings noting that cloud revenue includes “term-based licenses, which are recognized at a point in time.”"

"How is it possible that Lightspeed experienced no organic revenue decline as COVID-19 swept worldwide? Its closest revenue peers in the POS technology space, Par Technologies, Agilysys and Toast, experienced sales declines of -19%, -25% and -27%, respectively."

"Today, we reveal why we believe EHang (NASDAQ: EH) is an elaborate stock promotion, built on largely fabricated revenues based on sham sales contracts with a customer who appears to us to be more interested in helping inflate the value of its investment in EH."

"MSCI and analysts talked up RCA's mid-to-high teens revenue growth and high and improving renewal rates. However, within a year after the acquisition, the evidence points to substantially lower revenue growth and MSCI stopped reporting RCA's Run-Rate revenue."

"While GNYHA receives $7M in various tax-related distributions from Premier on an annual basis through its ownership of Class B shares, it stands to increase its administrative fee revenue by close to $40M per year by moving to a market-rate shareback of 66%."

"Spruce Point has a track record of calls that identified anomalies related to capital raising, capex spending, suspicious acquisitions, and abnormal revenue per employee in businesses that appear commoditized. We observe the same issues with Perion Networks."

"2022 CTV revenue was $28.5m, and PERI has disclosed its two annual growth rates in 2022 (108%) and 2021 (205%). As a result, we can work backwards and estimate that 2020 CTV should be $4.5m. However, a presentation slide from 2020 shows CTV revenue as $9.9m."

"Perion has not called out Microsoft Bing in relation to “monetizable searches” since the end of 2021. Recent explanations of search advertising revenue is attributable to average daily searches which are not referenced as monetizable ore commercial searches."

"There is a continuation of acquisition revenue contribution misreporting into early 2020. The Company first claimed that $21.2 million of sales were contributed by Captiva, Neurio and Pika in Q1 2020. The 10-Q later revised this figure to just $1.0 million."

"Zebra referenced only one client win early and continues to talk up “strong interest” but provides no specifics on revenues. In fact, almost three years after acquiring Fetch on July 1, 2021, Zebra is still saying robotics is “nascent” and in its “infancy”."

"We believe that Globant should explicitly disclose to investors which of their related parties are affiliated with WPP. We believe the spirit of related party disclosure is to highlight to investors how much revenues are coming from your largest shareholder"

"Total receivables have ballooned 456% in the same period that revenues have grown 99%. This suggests that Axon has booked revenues, generally associated with the weapon (and body cam), in advance of its ability to collect on these sales in a timely fashion."

"From a penny stock to a $5 billion market cap with no proven or probable reserves and now trading at 42x highly questionable 2026E revenue estimates, we believe investors should exercise extreme caution and believe there is 65%-85% potential downside risk."

"Limbach previously included a footnote in its financial statements indicating whether its existing backlog substantially covered forecasted revenue but removed that disclosure in Q1’25, supporting our view that backlog coverage has materially deteriorated."

"Spruce Point finds it troubling that GFL restated results again in Q2 2020. Solid waste revenues mysteriously increased by $12m. The large increase of intercompany revenue, and boosting of Solid Waste segment results, is alarming in light of our research."

"When asked on the Aug 2022 call “how quickly” it would contribute to revenue, the CFO evaded the question and shifted the topic to “we’ve increased our capacity in San Francisco,” saying only that the facility would “start to record revenues” in Jan 2023."

"A Snake Oil Salesman And Some Hedge Funds Partner Up To Pimp The Latest “Synthetic Biology” Scam -- As Phantom Revenue, A Hocus-Pocus Business Model, Rampant Related-Party Games, And A Decade of Colossal Failure Get Shoveled Into Yet Another Garbage SPAC."

"Basically all revenue growth since Mar '23 has come from siphoning deferred revenue – an abrupt change of trend and the first major, sustained decline in “advances.” Increase in revenue of ¥38B/$245MM is similar to ¥44B/$283MM decline in deferred revenue."

"Miraculously, there are still sell-side analysts recommending to buy Zillow’s stock despite the Company eliminating its 2025 revenue target, lowering 2024 revenue guidance and consensus estimates for Adj. EBITDA being way below management’s 2025E target."

"Lower commodity prices are forcing the industry to cut costs. Here we adjust the revenue to the future strip price, and cut expenses by 20%. On that basis, gross cash flow is $30 per BOE and Pioneer earns a positive margin. But, it's not positive value."

"In the context of his wildly aggressive revenue target claims, pressures on cash flow, outsized exposure to struggling Facebook as a 22% customer, and new evidence of financial reporting tied to borrowing not adding up, investors should be on red alert."

"Amcor screens as if its valuation is reasonable for a global paper and packaging company. In addition, its sales and earnings are temporarily showing growth from the addition of Bemis, but as we've illustrated, there is underlying revenue deterioration."

"Marathon today reports lower RINs expense than merchant peers because Speedway reports no RINs revenue. If Speedway were a separate company, it would recognize higher revenue from RINs commensurate with the higher cost of RINs at Marathon’s refineries."

"During the monitoring period, the highest gift revenue we observed for a dating channel room was approximately RMB 150,000 in a week, while weekly gift earnings for the top 10 dating performers as of March 2020 ranged from 16,000 up to 99,000 per week."

"We believe Axon should be valued relative to traditional weapons and firearms manufacturers and connected device and location electronics companies, not high growth SaaS peers with bigger TAMs, lower business risks, and proven recurring revenue models."

"This is the highest revenue Mettler-Toledo company in China with 38%, or $464m in revenue, and it has an incorrect address. Our investigators visited the 3rd floor and found one abandoned company and one in operation, but no evidence of Mettler-Toledo."

"Spruce Point is alarmed that PERI's audit chairman Michal Drayman held multiple financial roles at Lumenis Ltd. during the same period where the CFO and COO were charged with a scheme to fraudulently inflate revenues and misrepresent financial metrics."

"Even with evidence that Microsoft revenue is falling below plan, Perion retracted Yandex as a search partner, made search its #1 risk factor, and experienced a sharp decline in revenue per day per search, sell-side consensus estimates are still rising."

"The striking absence of dedicated finance, treasury, HR, legal, or other G&A staff in LinkedIn searches makes it apparent to us that Allonnia is controlled and run by Ginkgo as a captive entity, with no purpose we believe except to create fake revenue."

"Our rigorous forensic analysis suggests it may be outright impossible for Amcor to meet lofty analyst expectations, with revenues already vanishing, deal costs higher than planned, and critical maintenance and growth capital expenditures being delayed."

"Spruce Point believes our assumptions are conservative given there is a good chance the state litigation ends up at SCOTUS, allowing Kalshi to operate at least through 2026. In our base case, we estimate DraftKings risks missing 2026 revenue by ~15.0%."

"As we've already shown: 1) MPWR's Chinese tax filings do not account for ~$262m of revenue, and 2) MPWR's inventory turnover metrics are ballooning and a significant industry outlier despite stable and steady gross margin growth that management touts."

"In less than twelve months, durvalumab, demcizumab, ACY-241, and RPC-4046 had all been removed from the list. While fedratinib was added to the list, current Wall Street analysts' estimates expect fedratinib to generate peak revenues of <$500 million."

"Notice that PERI included Yandex with Microsoft Bing in early 2021 after commencement of the new Microsoft deal. The inclusion of Yandex coincides with PERI increasing its total revenue from Microsoft by $100m over the four-year term of the agreement."

"Spruce Point has identified inconsistent statements made by Rollins about its termite business. On the one hand, they said revenue from termite has tripled. However, a year later they said that they don't break out the termite from ancillary business."

"However, with recent acquisitions poised to contribute $115-125M in cloud revenue by our estimates, we believe that this leaves targeted cloud revenue growth at a three-year CAGR of just 13-27% excluding outstanding sources of inorganic cloud revenue."

"It seems to us that if one were to overstate revenue in a global business, one wouldn't want the margins to seem glaringly out of line with peers. Therefore, we would expect that a smart person (or people) would find a way to inflate expenses as well."

"Our research suggests that Kratos is a tiny player in the field of unmanned systems, with approximately 1% share of industry revenues and contract awards as a percentage of the DoD budget for drone procurement, research, development and construction."

"There is more evidence that PERI’s revenue growth story is cracking. In the recent quarter, revenue growth vastly exceeded accounts receivable growth. Even more alarming, Q1 2023 accounts receivables amounted to 92% of total revenue for the quarter."

"It lists only two open positions on its website as well as on LinkedIn – again, a striking fact for a “independent” company that raised $50MM in Oct 2020, and one from which Ginkgo already reports a $38MM deferred revenue balance as of Mar 31, 2021."

"We believe providing a target of at least 40% growth plus profitability for FY2025 would be in-line with peer targets and timelines and should be readily achievable through a reasonable acceleration in revenue growth and meaningful margin expansion."

"Absent any helpful answers from the Company, shareholders can only assume that the Company is significantly increasing spending in other areas and offsetting the margin improvement that should result from the workforce reduction and revenue growth."

"We believed that GoDaddy had significant opportunities to deliver on strong revenue growth, meaningful margin expansion, and a more appropriate capital allocation strategy, which, collectively, would result in meaningful shareholder value creation."

"We believed that GoDaddy had significant opportunities to deliver on strong revenue growth, meaningful margin expansion, and a more appropriate capital allocation strategy, which, collectively, would result in meaningful shareholder value creation."

"We believed that GoDaddy had significant opportunities to deliver on strong revenue growth, meaningful margin expansion, and a more appropriate capital allocation strategy, which, collectively, would result in meaningful shareholder value creation."

"NQ management during Q&A on conference call: “Yidatong reports net revenues associated to a portion that would be earned by them for their services, and not the gross amount that is being passed to the carriers on behalf of the developers like NQ”."