Callouts & quotes from 26,677+ activist slides

"Why does Stryker claim tuck-ins are easy? Why did it take almost a year to close the small “tuck-in” acquisition of SafeAir, a pencil that sells in boxes of ten? Why hasn’t Stryker said much of anything about SafeAir after completing the acquisition? Did Stryker not want to inform investors that it issued a recall with the FDA shortly after closing the acquisition?"

"After adjusting for improper add-backs, contingent consideration write-downs, and capitalized commissions (on a tax-adjusted basis for Non-GAAP Net Income), Spruce Point believes that FY19 Adj. EBITDA should be at least ~25% lower than Company-reported Adj. EBITDA, and FY19 Non-GAAP Net Income should be at least ~65% lower than Company-reported Non-GAAP Net Income."

"Avery talks up its stock ownership policy that requires Directors and management to own minimum amounts of stock. However, what it doesn't say is that AVY insiders own just 1.1% of the total shares, and their overall ownership has declined materially in the past few years as we believe the business has become less competitive and under greater financial pressures."

"The problem with photonic interconnect is it’s even slower, and it’s very unreliable. If you ask me, this is still at a fundamental research level, and how they actually plan to bring such an underdeveloped technology that mainly sits in the area of doing fundamental research to a commercial product within the timeframe that they promised, it’s questionable to me."

"The overlap of administrators, the key contact persons’ use of anta.cn email addresses for communications with the local government, and the shareholding of known associates, insiders, and relatives of the Ding family led us to conclude that Jinan Ruili and Jinan Anchuang are controlled by Chairman Ding and the founding Anta families and are de facto subsidiaries."

"Since 2018, approximately 50% of Monster's $3.7 billion in total sales growth has come from international markets, with the largest growth contributor being EMEA. However, we do not expect international sales momentum to continue as only two countries have been added in the past two years, competition has vastly expanded, and regulation appears likely to increase."

"It's probably 90% down from last year...I could put you in touch with a lot of people that are just going to say the same thing, 'I hate TransMedics....I had recently had a conversation with the surgeon from our local OPO because I fly with them often for Paragonix. It's the same thing over and over again, just TransMedics, we don't see them being here in a year.'"

"ABML has already changed how it characterizes its relationship with BASF. Not surprisingly, the regulatory requirements of SEC filings have resulted in the most conservative characterization. We believe this is clear evidence that management is prone to exaggeration of its commercial status and prospects and that investors should find such changes very troubling."

"The previous study covered MAUDE data through 2021. Our review from 2018 to the present shows Aquablation has resulted in 24 deaths since FDA approval. Moreover, FDA adverse event data suggests Procept's transfer of manufacturing operations to a new location in Q3 2023 resulted in above-trend equipment malfunctions, suggesting poor execution at patients' expense."

"Procept’s “utilization” definition is handpieces “purchased”, not handpieces “used”. If handpieces “purchased” overstates known US procedures (as the Company’s proxy disclosure suggests), and if rising DSOs are indicative of hospitals ordering more handpieces than they need, then not only is Procept’s “utilization” metric overstated, it might even be meaningless."

"FDA clearance through the 510(k) pathway requires only evidence of “substantial equivalency” with a “predicate device” already on the market. That these aspiration catheters were cleared through direct comparison with Penumbra reinforces the commoditization of the industry and the ease with which competitors can enter the neurovascular aspiration catheter market."

"Bunge has significantly moderated talk of its oilseed processing business, once its biggest EBIT contributor in Agribusiness, from being, "extremely difficult to replicate" and "the global leader" to now changing segment reporting around the business and admitting the Viterra deal, "mitigates risk because it adds more balance to our oilseed processing footprint.""

"Considering that Zillow's Adj. EBITDA is virtually all stock-based compensation, Spruce Point believes free cash flow is a much better figure to value the Company. Zillow trades at a much higher multiple of free cash flow then nearly all its peers. At over 6x sales and ~37x+ FCF, we believe that Zillow is one of the most richly valued stocks among its peer group."

"Warning: Oatly's largest investor Verlinvest describes Genius Foods, a Scottish gluten-free brand with a presence in Europe, as a success. Verlinvest made a "significant investment" in 2014 when gluten-free was the latest hot trend in the food industry. Since then, revenues haven't materially changed, while operating losses have doubled even with restructuring."

"Spruce Point has found a confidential report prepared for Oatly that was designed to help Oatly assess the environmental impact of its aseptic and fresh oat milk product relative to dairy milk. In the document there is detailed information and assumptions about quantities of ingredients needed. This could allow competitors to more easily replicate its products."

"Spruce Point questions the accounting choices made in the Burgiss acquisition. Notably, the decision to apply a lag in reporting may reflect Burgiss' inability to produce timely financials. Furthermore, the decision to capitalize deal costs appear to put it in violation with GAAP which dictates that acquisition-related costs be expensed in the periods occurred."

"You should assume that as of the publication date of our reports and research, Muddy Waters, LLC (possibly along with or through our members, partners, affiliates, employees, and/or consultants) along with our clients and/or investors has a short position in all stocks (and/or options, swaps, and other derivatives related to the stock) and bonds covered herein."

"The cumulative impact of these announcements helped send shares from ~$1.50 to over $7 in the span of a couple weeks, driven by what we view as misplaced AI excitement, poor retail investor understanding of the true cash impact of PCF deals, and aggressive short covering from investors positioned for Lumen's death rather than the extension of a sudden lifeline."

"By defining its market presence as the area within which it offers free delivery – even when in-market deliveries will require a fee in many cases, when it still offers delivery outside of its “markets,” and when it reimburses out-of-market customers to fly in – we question the significance of “entering a new market” with respect to Carvana’s growth trajectory."

"The USDA produces a regular report on the diary market conditions in Argentina. The country is facing major challenges that are affecting domestic consumer consumption and the export market. Inflation continues to be rampant, the UK/Russia war is impacting exports, and energy subsidies to producers are expected to be eliminated and increase cost of production."

"TaskUs is a human capital intensive business process outsourcing company being backed and promoted by Blackstone, and is focused on content moderation and digital customer experience for clients in the social media and digital economy. Spruce Point has past successes betting against a similar business named Bazaarvoice, and a recent Blackstone stock promotion."

"Stryker only discloses the Operating Income (EBIT) contribution from transactions completed in the year in its Proxy Statement. We can now clearly see that it has spent $8.6 billion in total acquisition and integration costs from 2018 - 2021. EBIT contribution, which is influenced by the timing of when acquisitions are completed, has been virtually negligible."

"Spruce Point has identified many red flags as it relates to Aerojet’s meteoric share price appreciation since 2017. Its significant EBITDAP growth without corresponding cash flow growth should be evaluated relative to recent executive and director departures, along with heavy insider selling, a civil DOJ inquiry, and disclosure of federal and state tax audits."

"A former employee described concerns about WTRG's ability to meet its long-term goals leading up to the Peoples transaction. By looking carefully at the three-year period leading up to the transaction announcement in 2018, we find evidence that water revenue per customer was declining in two of three segments, while return on equity and EPS were also falling."

"In short, unless this sale of 2.2 million cubic meters of broad leaf timber from Yunnan was fulfilled illegally (in excess of quota and without all of the requisite permits) and accomplished with an army of Chinese farmers and shipped out via a secret under-ground train tunnel running below the mountains, it either never happened or was grossly over-inflated."

"By supporting not only large, recognizable players like Straumann and Zimmer Biomet, but also third-party 3D printing labs like Voodoo Manufacturing, third-party aligner design services are lowering the barrier to entry in the aligner manufacturing space, and making low-cost aligner manufacturers more accessible to a wider range of dentists and orthodontists."

"TASK made a lengthy enhancement to its definition of “Win Rate” that we believe added significantly more complexity. It then showed its Win Rate increase over a three year period. Management did not explain the impact of the revision on its subsequent improved Win Rate reporting though it claimed it “Simplified” its Win Rate to align with its NRR calculation."

"Earnings misses & downgrades, improptu management changes, auditor concerns, quality concerns, increasingly competitive markets, and Kibbutz board backstabbing activism are apparently obscure concepts to Stifel, who simply provide a hindsight note after a major share price fall, then upgrade a few weeks later, all on the back of an obscure EV/EBITDA multiple."

"He indicated that some centers were happy to jam Medicare for a $90,000 consumable, even when the device was unnecessary, just to use the NOP organ recovery service – a practice our research is prevalent among smaller centers lacking staff and who we believe to be paying for the device as a kickback in exchange for organs steered their way by the NOP program."

"We believe that BP also needs to have a "more honest debate" - particularly as "the facts change" - with the objective being to "put the long-term interests" of stakeholders ahead of "the short-term" interest of BP's leadership to please the "others who argue with an ideological zeal": BP's decision to cut its oil and gas production by around 15% by 2030 vs."

"Sell-side promoters are divided on Zebra, and there is even one analyst with an underweight opinion and market perform rating and a $290 per share price target. We believe that even that is overly optimistic because analysts fail to conduct a rigorous forensic review of Zebra's recent acquisitions and financial reporting which suggests more issues lie ahead."

"We are not surprised to see a significant decline of insider ownership since the IPO. We have found management’s interests are aligned with its compensation and achieving performance targets rather than long-term, sustained share price appreciation. PBH’s “private equity” like acquisition strategy appears built for an exit and not long-term sustained growth."

"When he told TransMedics an organ was unsuitable, they would disingenuously say “the machine will do the trick...the transplant centers...make the judgement” – a disingenuous ploy as “the transplant program who’s accepting the liver is not here...if I don’t tell them my professional judgment, they don’t know....it was simply, just put the liver on the pump.”"

"Notice carefully that LSPD's prospectus cloud image (right) fails to disclose customers, instead focusing on 47,000+ "Customer Locations". However, LSPD left a clue that allows us to calculate implied customers from the $500,000 GTV per customer. We estimate LSPD had 27,200 customers at IPO. This is 46% fewer customers than it reported just 5 months earlier."

"Danimer provided little disclosure of its litigation with Pereira. The limited disclosure is provided in financial statement footnotes (11 & 16 Commitments and Contingencies). There is no mention of the former Chairman and CEO and the filings only mention “the Company terminated a former executive and terminated the Company’s contract with an advisory firm.”"

"We believe that Vivion’s January 2019 purchase of three relatively rundown Potsdamer Straße properties from Aroundtown generated significant profits for Aroundtown. The purchase appears to have been at an undue premium, and could have been consistent with our view that Vivion deliberately inflates its asset values in order to increase its borrowing capacity."

"Unfortunately, as we have highlighted to you throughout our engagement, this overhang cannot be addressed through incremental improvements to the business, with analysts repeatedly highlighting the inability of the market to look beyond the longevity debate and reward the substantial operational improvements that the Company has made over the last few years."

"I believe that, as far as the numbers are concerned, discussion is possible. But you have an auditor, and you have others who are overseeing the audit. I also know that there are some in-house analysts who are also looking at the issue. A clear opinion has emerged, which we at the DSW share, that the numbers have not been manipulated, massaged or falsified."

"If cross-selling has been such a major component of management's growth plan, then why is the Company failing to capture a greater share of customer wallet? PowerSchool contracts we were able to obtain show that in most cases, PowerSchool's share of school district budgets stays flat and even declines as a percentage of a school district's operating budget."

"They stated that when Twist attempts larger oligos, it has to use standard technology and not its chip: “they cannot come up with these really long oligos”; “you only use that in the early, early stages of discovery which is mostly in academia...then you don’t use that technology anymore”; “they take much longer because they need to use another technology.”"

"In 2017, Saputo acquired control of Warrnambool Cheese and Butter Factory Company.(1) Its Sungold milk brand appears to have shrunk. Its website shows only three products, and no longer provides news updates, information on farms & processes, or nutrition and health. Sungold milk's Twitter feed hasn't provided an update since 2018 and has just 55 followers."

"If I had to pick one platform, say hybridoma versus Berkeley Lights, for our antibody discovery effort, I tend to be more comfortable with the hybridoma approach, just because it's more robust, it's more reliable. Some of the issues we often encounter are the reliability of the instrument, and we haven't really gotten good hits derived from Berkeley Lights."

"We find management's unwillingness to entertain Neuberger's recommendations in a good-faith manner concerning. We have little confidence that Verint executives will change their ineffective growth strategy so long as they can help it, and their behavior throughout the proxy fight makes us question their commitment to defending the interests of shareholders."

"We believe that the rapid uptake of the Libre among T2 patients compared to their much more muted adoption of the G-Series demonstrates that the (current) technological advantages of the more expensive G-Series are superfluous for T2 diabetics, and that the rest of the T2 market is almost entirely open for the taking by the cheaper and easier-to-use Libre."

"Effective Dec 31, 2021 Stryker says it realigned its business and financial reporting around “Orthopaedics and Spine” and “MedSurg and Neurotechnology” – However, months later its website shows three different product groupings, and “Spine” appears under both Orthopaedics and Neurotechnology. Clicking on the “Spine” links go to the exact same product page."

"Value Proposition: Trian believes Mr. Winkleblack's substantial executive experience, including almost 12 years of service as Executive Vice President and Chief Financial Officer of H.J. Heinz Company, provides him with knowledgeable perspectives on strategic planning, international operations, acquisitions and divestitures and cost and financial controls."

"A 5.8 point reduction is well within what common sense indicates is the margin of error in a crude survey like ESS – the reduction is equal to a patient self-reporting that they went from a “high chance” of “dozing” to a “slight chance” in 3 of 8 settings, with still a high chance in each of the other 5 settings like “sitting and reading” or “watching TV.”"

"Spruce Point believes that DY does not have a good handle on the trajectory of its Days Sales Outstanding (“DSO”), a measure of days to collect from customers. The CEO's recent comments indicate a false sense of optimism that DSO will improve when they have worsened. Following his last comment on DSO, both CEO Nielsen resigned and CAO Villaverde resigned."

"We question the scalability and commercialization aspects of the technology. To support our concerns, we observe that IPX no longer references that the technologies were tested over a 10-year period, funded in part with approximately $10 million from the U.S. DOE ($12 million total investment through 2021(1)) and with industry partners Boeing and Arconic."

"As shown in our presentation, the upside from a more focused, streamlined PepsiCo is substantial – greater strategic focus, faster organic growth and meaningful profit-margin expansion would warrant a valuation in line with peers, the market and PepsiCo’s own history, representing a path to more than 50% stock-price increase from today’s depressed levels."

"Warning: From the earliest time of inception in 1986, the entity described as a "Joint Venture / Partnership Manufacturing" has listed as its Officers and Directors all of CHD’s key executives at the time including its CEO, CFO, Treasurer, and General Counsel. If this is truly a 50/50 joint venture as CHD describes, why is Occidental not represented here."

"Considering the fact that IQ paid RMB 2.4 billion for this supposed “game development company,” we find this to be ridiculous at face value and believe it is indicative of utter incompetence by IQ’s management at best, or a completely fraudulent transaction designed to siphon cash out of the publicly-traded company and into management’s pockets, at worst."

"The time since randomization—that is, most of the important content of the graph—uses six-month time increments. This allows AbbVie to plot a reasonable looking slope: BNP, and consequently risk of heart failure, increases over time in both groups while always remaining higher in the drug group, but the change seemingly doesn’t happen at too great a rate."

"The pricing was multi-million dollars per project per year. A project lasts two or three years, so it's a significant amount...Their pricing method was very opaque, ..There was very little breakdown about what was happening behind the door for each project...But at the beginning, it was really one pot, and you didn't know exactly what you were paying for."

"We believe Nuvei is a mixture of acquisitions which on average have been acquired at approximately 5.6x revenues. We estimate up to 40% of revenues are acquired and do not deserve to increase the value of the entire company given numerous issues we've identified with specific acquisitions such as Base Commerce, Smart2Pay, SafeCharge and Vantage Payments."

"When we remove AMR's three least common cost of coal adjustments, and include the cost of operating Dominion Terminal Associates ("DTA") - its coal export facility necessary and critical for delivering the coal to its export customers which we evaluate in the coming slides - we find that its cost of coal margin per ton is materially lower than portrayed."

"We believe that if Quectel were added to the Covered List that it would not only be a headwind to government (and perhaps all sector) sales, but it would also necessitate a widespread replacement of existing hardware, which would be accompanied by a requisite write-off of capitalized connected device costs, thus further compressing Samsara gross margins."

"Based on our research: rising competitive pressures from the Terminix / Rentokil merger, a deluge of private equity money entering the market, signs that Rollins is acquiring lower-quality companies, rising auto accident claims, a change in auditor, and frothy valuation of the stock all bolster our view that now is an appropriate time to liquidate stock."

"Viterra’s website removed its historical consolidated financial information. However, a link to its 2022 financial statements can still be found which shows that actual revenue was $53.8bn which is 22% above the $44.2bn result in 2024. Even worse, Viterra disclosed that it effectively booked repurchase agreements as revenue and had to make a restatement."

"It's just been very frustrating watching them not just take... like look at Wise and look at Remitly. They both started at the same place. 50% of Wise customers use more than one product and the velocity with which they put out new features, and they're just evolving very rapidly. Whereas Remitly keeps incrementally changing the things that are working."