Callouts & quotes from 529+ activist slides

"Spruce Point believes that ELF’s valuation is supported by its above market revenue growth. This revenue is highly dependent on its retail channels through Target, Walmart, and Ulta Beauty along with continued appeal with mostly female Gen Z consumers. To the extent that ELF receives pushback from these customers related to its association with Movers+Shakers and its perceived messaging and association with the NXIVM cult, there could be material downside to the share price."

"On face value, Aerojet's revenue and earnings growth are comparable with industry peers. This forms the basis that its valuation is also in-line or at a discount with peers. However, Spruce Point believes that Aerojet's enterprise value does not accurately reflect numerous liabilities, its financial results are inflated with aggressive accounting, and its projected financial results will materially disappoint the Street “consensus” view formed by just a few analysts."

"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."

"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."

"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."

"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."

"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 believes there is significant downside to TASK's share price as the Company is overvalued on both its revenue and EBITDA multiple and should trade at best in-line with peer valuations, and at worse a material discount to reflect the numerous concerns we've documented in our report including substandard disclosures, and evidence of increased financial pressures with its largest customer Facebook."

"With one of the major bottlenecks preventing more widespread in-house 3D printing demand now gone with the expiration of key Align patents and the development of new software, Spruce Point believes that the cost savings and workflow efficiency offered by in-house printing will trigger a new wave of demand for 3D printers among orthodontists, posing a significant threat to Align's case volumes."

"The Street believes that VRNT shares trade at a ~35% discount to SaaS peers. However, we estimate that VRNT trades just above the industry median, despite its chronically low organic growth, destructive acquisitions, and inability to generate cash flow growth despite frequent M&A – a stark contrast to the many fast-growing and highly-profitable true cloud businesses which occupy the space."

"Petitioner believes that given the recent i) fatality, ii) hospitalization and near-fatality, iii) 13 fatalities in the pitolisant development program, and iv) the inherent and unavoidable toxicity of H3 receptor antagonists/inverse agonists as a drug class, as indicated supra, it would be a grave mistake to repeat the incremental approach that marked the eventual withdrawal of Seldane."

"Spruce Point believes it's likely that MPWR routes its cash through Singapore, which is owned by MPS International Ltd. (Bermuda). Singapore engaged in related-party transactions with Bermuda for "Services Rendered". Yet, its Singapore subsidiary Monolithic Power Systems (Singapore) PTE. LTD currently has a going concern warning, and is audited by a three person firm called Plus LLP."

"Spruce Point believes it’s likely that MPWR routes its cash through Singapore, which is owned by MPS International Ltd. (Bermuda). Singapore engaged in related-party transactions with Bermuda for “Services Rendered”. Yet, its Singapore subsidiary Monolithic Power Systems (Singapore) PTE. LTD currently has a going concern warning, and is audited by a three person firm called Plus LLP."

"Spruce Point believes that Stryker doesn't cleanly provide investors with Mako sales figures. However, based on our research, we believe the market fails to appreciate both the size of the business, and the pressures it is under from disruptive pricing and sales from Zimmer Biomet, the #2 player in the industry. Mako revenues could exceed $1.0 billion, with prices dropping up to 30%"

"Spruce Point believes that the ongoing proliferation of third-party 3D printing labs in the clear aligner space will only incentivize further R&D directed at clear aligner development: whereas Align was, until recently, the only major player in the clear aligner space, materials producers now face a broad and rapidly-growing number of potential customers for clear aligner plastics."

"Spruce Point believes that Dropbox overstates free cash flow with a simplistic presentation that is analytically flawed and ignores two material costs such as: 1) Costs required to repurchase shares related to employee compensation programs, which are operating in nature, and 2) Costs associated to pay for infrastructure, which are effectively deferred capital expenditure payments."

"Spruce Point believes CLEAR trades at an unwarranted premium to other subscription businesses geared toward consumers. We believe it is facing formidable competition to solve the TSA and airline pain points which are the checkpoint and checked baggage areas. We also believe its valuation is materially higher once adjusted for the TRA liability, lease, and fully diluted share count."

"Spruce Point believes that investors need to pay careful attention to USCR's capital expenditure (capex) program. In 2017 for the first time, USCR gave hard capex guidance, which explicitly stated it included capital leases. USCR is becoming increasingly dependent on capital leases (>50% of total capex for the first time in 2017) and has missed its capex forecast every single time."

"Spruce Point believes that IAS is undervalued relative to DV and that the gap should narrow. We believe IAS offers greater exposure to faster growing and less saturated international markets. We also believe IAS has better patent coverage, financial reporting transparency and stronger equity sponsorship. We are long IAS as a relative value hedge for our DV short position."

"In light of the prevailing restrictions on non-emergency dental activity and expert predictions which indicate that the coronavirus may linger for months into the future, Spruce Point believes that it is not outlandish to believe that, not only could US volumes collapse to near-zero in Q2, but that volumes may remain heavily depressed through the remainder of the year."

"Spruce Point believes that IoT is an old technology that has suffered from adoption headwinds and poor profitability. Recall that even C3.ai was C3.IoT before its business model pivot. We find a common theme among technology stock promoters: they typically rely heavily on targeting retail investors to sell their story of large profits and riches from buying the stock."

"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."

"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."

"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."

"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."

"Spruce Point believes CLEAR can potentially solve its capacity issues by continuing to raise prices, which would weed out some members not wanting to pay. In the extreme, CLEAR becomes like a high-end concierge service for a small member base willing to pay a significant fee. The Company would likely be much smaller than it is today under this scenario."

"Spruce Point believes Broadridge should have ceased capitalization of additional costs with the UBS project last year given delays and cost overruns. As a result, had the latest capitalized conversion and start-up costs been expensed, Broadridge would have been in violation of its “Leverage Ratio” covenant, which limits it to 3.5x Total Debt to EBITDA."

"Spruce Point believes it odd that GFL did not discuss an amended agreement with Waste Management on their Q2 earnings call. At the same time, GFL is introducing greater regulatory uncertainty by acquiring the WCA business. A new "forward-looking" risk factor statement highlighted by GFL may offer clues that its deals are on shaky regulatory grounds."

"Spruce Point believes part of what has driven Weis' share price is the belief that its operating cash flow grew 550% YoY in Q1'18. However, by pro forma adjusting results for its aggressive accounting change to accelerate accounts receivables as cash, and a one-time incentive payment (cash flow drag) from Q1'17, we estimate the growth rate was 74%."

"Notwithstanding that Vivendi nominees Anna Jones and Camilla Antonini declared their independence in the candidacy papers, it is our opinion that such independence is doubtful, since they both resigned from their former position in the board — together with other directors — to accomplish what Elliott believes to be a pro-Vivendi oriented outcome."

"Spruce Point believes that Xylem's digital ambitions are failing, in part, due to its lack of commitment to growth capital spending. We observe that software spending growth is declining and not exceeding its amortization. We also observe that in the quarter before closing Evoqua, Xylem made its first software impairment in more than two years."

"Spruce Point believes PowerSchool’s current share price presents asymmetric downside risk due to growing regulatory risks, a domestic customer base that is struggling to fund necessities, a flawed international growth plan, and nascent personalized learning products that we believe are unlikely to become meaningful contributors to bottom line."

"Spruce Point believes AMR is an ESG nightmare. Environmentalists and the public should be outraged to think AMR believes shareholders deserve rewards at this point. Spruce Point finds hidden liabilities, debts due to mine reclamation costs, pensions costs and compensating workers for black lung disease amounting to approximately $740 million."

"Spruce Point believes investors should be skeptical of the continued outperformance of PERI’s share price. PERI recently announced a CEO transition plan and then disclosed concerning revisions to accounting policies in its annual report. Insiders have been repeatedly liquidating shares and PERI reported its first cash flow decline in years."

"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."

"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."

"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."

"Some of these changes to the competitive landscape will be familiar to Align investors. Others will not. Spruce Point believes, however, that, taken as a whole, these developments will (and are beginning to) drive seismic shifts in the economics of the clear aligner space, which was until recently occupied by just one major player."

"Now, as pandemic-era spending dries up and district staffing costs have ballooned to their highest levels ever, Spruce Point believes that school districts across the country will face a major fiscal cliff, effectively ending the gravy train of federal funding that ed-tech companies have been milking for the past several years."

"Spruce Point believes there is little margin for error in food manufacturing, since the slightest mistake can cause contamination, illness, and even death. The repercussions could be long-lasting and tarnish the manufacturer's brand. We've noticed a recent uptick in product recall notices by Saputo, particularly in Canada."

"Valuing FSCT shares at a more conservative multiple – below that of its purported peer group – and taking into account (A) management’s unreleased guidance and (B) the potential impact of the pandemic on sales, Spruce Point believes that FSCT shares are worth 50%-60% less than the $33 price set by the merger agreement."

"Spruce Point believes that MSCI's "average" ESG rating is woefully inaccurate and fails to acknowledge that Rollins settled charges with the SEC, has a large vehicle fleet with no plans to adopt EVs, uses pesticides that harm insects vital to the ecosystem, and has been cited in the past for cruelty towards animals."

"Spruce Point believes that the circumstances facing Premier are very similar: while the sell side believes that Premier’s above-market shareback rates can last indefinitely into the future, Spruce Point finds evidence that near-term catalysts could force Company economics back in-line with the rest of the market."

"Spruce Point believes that Dollarama is significantly overvalued based on its undifferentiated and increasingly uncompetitive business model, inflated and unsustainable margins which are posed to decline, and its limited growth prospects which will restrain its ability to hit its long-term earnings expectations."

"Spruce Point believes Kornit Digital (“the Company” or KRNT) saw 2018 revenues, and particularly cash flow, driven entirely by Amazon’s expansion of its Merch program, which are likely to taper based on a slow-down of program growth, and would leave a gaping hole in Kornit’s aggressive revenue growth strategy."

"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."

"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"

"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."

"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."

"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."

"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)."

"Spruce Point believes that investors should take the CEO’s claims that SORT® will be a major contributor to revenue and EBITDA with a grain of salt. It is currently being given away for free. We believe that converting users accustomed to paying nothing into customers paying something is an uphill battle."

"Spruce Point believes it is time for significant change at Kratos (Nasdaq: KTOS). Based on our research suggesting abysmal financial and compliance failures leading to a recent criminal conviction of a senior Kratos Director, we are calling for the resignation of its CEO Eric Demarco and CFO Deanna Lund."

"Spruce Point believes that Rollins' gross margins reporting is also opaque. Recently in 2022, the Company provided no qualitative discussion at all about factors affecting its performance. While we applaud recent efforts for more transparency, we believe gross margin discussion could be enhanced further."

"Spruce Point believes that, with Penumbra U.S. Stroke revenue growth set to slow in the face of heavy competition, and with consensus peripheral thrombectomy sales expectations far too aggressive, company-wide sales growth is set to be cut almost in half from Street estimates, from FY19 through FY21."

"Spruce Point believes that, with Penumbra U.S. Stroke revenue growth set to slow in the face of heavy competition, and with consensus peripheral thrombectomy sales expectations far too aggressive, company-wide sales growth is set to be cut almost in half from Street estimates, from FY19 through FY21."

"With third-party 3D printing labs only just now entering the clear aligner industry in size, Spruce Point believes that this head-to-head comparison is similar to the kind of cost comparisons which will increasingly be conducted by orthodontists and dentists as third-party labs enter the mainstream."

"Spruce Point believes Ballard investors should be cautioned by its history of partnership failures in China, notably Azure in 2013-15. Our on the ground due diligence strongly suggests this time around with Synergy/Broad Ocean will result in disappointment and a significant stock price correction."

"Starboard believes these seemingly self-serving actions demonstrate a complete disregard for proper corporate governance and fiscal discipline by members of management and the Board and suggest that these transactions were not entered into with the best interest of the common stockholders in mind."

"Starboard believes Mr. Brown’s experience as a founder and senior executive of one of the world’s most successful semiconductor technology and licensing companies along with his strong operational experience and deep industry knowledge will enable him to provide invaluable oversight to the Board."