Callouts & quotes from 363+ activist slides

"With the power to couple arbitrary pairs of qubits, comes the responsibility to ensure that qubit couplings are properly calibrated and can perform accurate gate operations. Therefore, the duty cycle of an ion-trap QC interchanges operational periods and rounds of recalibration...In more mature QC systems with improved coupling quality, more subtle faults will complicate fault detection...Testing (N2) qubit couplings, now already at a quarter of the ion-trap QC duty cycle, is going to consume a larger fraction of time as QC systems scale up....Brute-force diagnosis that checks qubit couplings one at a time scales poorly..."

"What incremental data Intuit does provide shows (1) decreasing penetration of the payroll offering (using the imperfect data Intuit provides), (2) essentially no growth in average employees per payroll customer, suggesting poor mid-market penetration, (3) average payments volume per customer of just $20K, again highlighting Intuit's micro-business customer base, (4) YoY growth rates that are significantly lower than revenue growth rates, suggesting heavy reliance on price increases that may not be sustainable, and (5) declining growth rates over time, particularly in FY 2023."

"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"

"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."

"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."

"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."

"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."

"PepsiCo is undoubtedly one of the world's great consumer franchises, whose leading scale and iconic brands have propelled it to over 100 years of exceptional performance. Yet, the Company's strategic and financial challenges have recently led to poor operational results, sharp stock-price underperformance and a meaningfully discounted valuation."

"The poor economics of this business, in our opinion, fuel SOFI's need to issue equity. While there could be strategic value to the Student Loan business, given its direct economic costs, we believe that SOFI's principal reason for originating at these levels is to meet targets for management bonuses through manipulating their Fair Values."

"Twist has no value proposition beyond price and is a bottom-tier vendor with a poor reputation, viewed as inferior to even Chinese vendors, due to escalating manufacturing delays, product limitations, a lack of sample purity and quality control, and other problems that have shut it out of pharma, clinical work, and anything FDA-related."

"Documents from a class action shareholder lawsuit against Lumenis Ltd. allege that its predecessor ESC Medical Systems (where CEO Gerstel was VP Operations/COO) was, "a company fraught with problems, among other things poor product reliability, physician lawsuits, increasing inventories, and poor collections of accounts receivables.""

"Amazon, the most dominant retailer in the world, lists Califia Farms Oat Milk as its “Best Seller”. We believe Oatly has a poor product placement on the website and is being pushed farther down on search results according to our recent tracking. We observe that Oatly’s price per fluid ounce is $0.30 cents, or 3x Pacific Oat milk."

"Arconic cannot blame poor performance on the disastrous Firth Rixson acquisition. From 2013-2016, the Company invested over $3 billion in capital apart from the Firth Rixson deal. But merely generated an incremental $109 million of Net Operating Profit After Tax (NOPAT) for a Return on Incremental Invested Capital of only 3.4%"

"We believe Prestige is overvalued on both a revenue and EBITDA basis. Given Prestige's poor organic growth prospects, lack of competitive advantage, eroding market share, declining financial transparency, low quality management and governance practices, it is well justified for the Company to trade at a discount to its peers."

"Heska's gross margins generally fall between those of high value-added diagnostic equipment companies and pure animal health distributors. Heska's EBITDA margins fall below those of nearly all possible comparable companies. We believe this is indicative of Heska's lack of proprietary technology and poor competitive position."

"We believe the Company’s stock price underperformance versus both peers and the broader market indices is due to consistently poor financial performance, a lack of credibility from repeatedly failing to deliver on commitments to shareholders, and a history of problematic governance that fails to demand accountability."

"As we discussed in our investor presentation, we believe this poor capital allocation was the direct result of poor corporate governance at the Board level, including shareholder-unfriendly compensation practices that incentivized management to pursue growth at the expense of returns on capital and shareholder value."

"Given the totality of our forensic research that indicates Zebra's business is under rising pressures from Chinese competition, diminished returns on R&D and innovation, and poorly timed and levered acquisitions that aren't paying off as planned, we are puzzled as to why Zebra's valuation multiple has been expanding."

"Wall Street is fixated on Kratos's earnings "potential" of >100% growth in the next few years and give KTOS a commanding 20x and 70x EBITDA and P/E ratio. Be warned: this growth is off a low EPS base, on highly adjusted figures, and will surely disappoint given Kratos demonstrated ability to poorly execute."

"Based on our research and conversations, we believe recent acquisitions executed under Farrell and Dierker have been poorly planned and executed, and more aggressively structured (notably with earnouts) – insult to injury given the large multiples paid for these deals and rising debt load to fund the deals."

"Far from being the self-appointed gold standard in safety, the Federal Railroad Administration's August 2023 safety report found that Norfolk Southern frequently did the minimum to comply with required standards, its training programs/resources were struggling and its communication and culture were poor."

"Poor Controls over Equity Grants: That the board did not become aware until several years after the fact that multiple grants to the CEO were in violation of the Company's incentive plans indicates that it did not have adequate controls in place to monitor the Company's executive compensation practices."

"AMR's CFO and management has a poor track record of capital allocation when it comes to dividends and share repurchases. Notably, during the last capital return policy in late 2017, not long before coal prices weakened and the stock price collapsed, insiders sold while the Company repurchased stock."

"Another paper highlighted how these issues plague non-imidazole-based compounds specifically, such as pitolisant: “poor pharmacokinetic characteristics,” “poor blood-brain penetration,” “genotoxicity” (DNA damage), as well as the problems such as cardiotoxicity already described on previous pages."

"The reasons for the industry-wide failure of these H3R antagonist programs over several decades are voluminous: poor pharmacokinetic characteristics due to lack of bioavailability and/or a failure to penetrate the blood/brain barrier; a variety of off-target effects; and a broad toxicity profile."

"Despite adding $4.7 billion of revenue over the past ten years, Skechers' General & Administrative expense as a percent of revenue has barely budged. Furthermore, often blamed supply chain expenses don't seem to be a major driver. We view this as a colossal example of poor financial management."

"We believe the proposed transaction will not close the Company's substantial discount to net asset value ("NAV") and is a thinly veiled attempt by management and the Board to rid themselves of a decades-long poor track record rather than address the fundamental issues challenging the Company."

"We are writing to you today because we believe the Company has a great deal of potential that is unfortunately not being realized. This is due to Upwork’s lack of strategic clarity and focus, ineffective execution, poor capital allocation, and revolving management team under CEO Hayden Brown."

"To the extent our suspicions turn out to be correct, this circular symbiosis would be reminiscent of Enron’s off-balance sheet structures in which Enron issued shares to “special purpose entities”, which borrowed money using the stock as collateral, and then bought (poor) assets from Enron."

"This has resulted in executive compensation at AOL that is approximately 3.4 times the median compensation of an appropriate peer group that fits within the guidelines recommended by both ISS and Glass Lewis, despite poor absolute and relative stock price and financial performance."

"MDA has consistently produced poor free cash flow. From 2012-2017 average free cash flow was C$33m (US$30m). Leading up to the DigitalGlobe deal, it even reported bank overdrafts of cash. YTD 2018 overdrafts have continued, and debt is rising through credit facility borrowing."

"While this trade worked out well for FMCN insiders, FMCN shareholders did poorly. By Q4 2009, FMCN had written off Allyes by at least $258.4 million (including any amortization of acquired intangibles), which was a loss to shareholders of 87.0% of the original purchase price."

"At a potential 4X increase, patients would be hit 153 ng/mL times 4 (fold change at 90% CI per the label for poor metabolizers) times 2 (Harmony’s claimed fold change in the presence of CYP2D6-inhibiting drugs), which equals 1224 ng/mL – a red-alert level for cardiotoxicity."

"It was done in an attempt to show keeping pace with Joby even though this was completely different. This stunt, endorsed at the highest levels of management, reflects poorly on Archer's credibility, this is the eVTOL equivalent of Nikola Corporation rolling a truck downhill."

"It’s easy to claim your algorithm is accurate when the data used to evaluate its accuracy excludes mistakes. We believe these failures of simple data analytics (far short of anything approaching AI) reflect poorly on iRhythm’s internal capabilities and external motivations."

"The sell side values VRNT on a P/E basis against Non-GAAP EPS. This approach fails to take into account Verint's poor organic growth, the widening disparity between GAAP EPS and (low-quality) Non-GAAP EPS, and the Company's failure to grow cash flow despite a flood of M&A."

"In short, due to the poor quality of data and documentation on the forest plot, until there is an opportunity to both verify the forest's physical characteristics and use satellite imagery on all forest claims, that the sample sizes are too small to establish significance."

"Spruce Point believes that the economics of hydrogen refueling stations are so poor, 12.5 years to repay investment amount without overhead (based on Foshan refueling station economics), that they will never be built barring significant sustained subsidies from government"

"Piperidines and piperazines are great structures, and medicinal chemistry would be a lot poorer without them, but they can set off hERG activity, which can (in some cases) lead to heart rhythm problems, which can (in pretty much all cases) lead to your drug wiping out."

"We believe this repeated behavior is the outcome of broader and more systemic problems, including a poor corporate culture that appears to reward loyalty to the founder over performance, a Board that has failed to provide true accountability for delivering on results."

"Spruce Point takes issue with Oatly’s first slide of its June 2021 Investor Presentation. The analysis is based on a 2013 study (updated in 2016) which doesn’t include its recent expansion into the U.S. and Asia, which we believe has been poorly planned and executed."

"As GAAP gross margins have declined, the Company's poor financial performance is shown by its negative operating and net margins. However, the Company's non-GAAP adjustments create the illusion of Sunnova being a profitable business with high Adjusted EBITDA margins."

"We speculate whether Harmony may have misled the FDA, given the rampant statistical tricks across its papers and trials – using a 40mg dose to determine the plasma level in normal metabolizers, but only a 17.8mg dose in the three patients who were poor metabolizers."

"In many cases, Carvana has delivered vehicles in dangerously poor condition, and has hidden the fact that a vehicle has been in an accident. Note that, depending on the state, failing to disclose that a used vehicle has been in an accident constitutes dealer fraud."

"While BOOT is struggling, it splurged on a brand new 116,000 square feet corporate headquarters which is 37% bigger that its existing space. Spruce Point believes that BOOT should be doing more with less and not expanding SG&A while it posts poor financial results."

"In the next quarter’s Q&A, the CEO stated that “in Q1 there were ACTIS units with very low gross margin from the first lots” – without ever explaining what “first lots” means; and that “we have finished recording the sales of ACTIS with poor gross profit margins.”"

"We believe the Red Lobster Sale, combined with management and the Board’s poor capital allocation, excessive corporate spending, and lack of focus on restaurant operations, has already threatened the sustainability of Darden’s investment grade rating and dividend"

"We believe the Red Lobster Sale, combined with management and the Board’s poor capital allocation, excessive corporate spending, and lack of focus on restaurant operations, has already threatened the sustainability of Darden’s investment grade rating and dividend"

"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)"

"Collectively, the Company's years of missed execution and unfulfilled promises have translated into poor stock price performance, leaving long-term shareholders significantly worse off than if they had simply invested in the chemical or broader market indices."

"Independent proxy advisor Glass Lewis, citing Phillips 66’s (NYSE: PSX) underperformance and poor governance, recommends that shareholders support Elliott’s case for urgent change by voting for board nominees Brian Coffman, Sigmund Cornelius and Michael Heim."

"Collectively, the Company's years of missed execution and unfulfilled promises have translated into poor stock performance, leaving long-term shareholders significantly worse off than if they had simply invested in the chemical or broader market indices."

"We believe Essential is signaling that it will miss its targets for the first time since 2015, is richly valued with a poor risk / reward, and should trade at a discount – not a premium – to peers given the numerous issues we’ve identified including:"

"We strongly believe that additional change is necessary at the Company given its poor operating performance, long-term destruction of shareholder value, serious corporate governance concerns and failure to honor the spirit of our 2012 settlement."

"With GTT's poor trailing twelve-month cash conversion rate of 5.1%, and management's guidance for capex of 7% of revenue, it is mathematically impossible for GTT to generate free cash flow unless it can significantly improve cash conversion."

"Phillips 66 has failed to grow their G&P business like their competitors. With a higher cost of capital and a poor in-house engineering function, the midstream business must pursue dilutive M&A to try to correct their own self caused issue."

"Phillips 66 has failed to grow their G&P business like their competitors. With a higher cost of capital and a poor in-house engineering function, the midstream business must pursue dilutive M&A to try to correct their own self caused issue."

"Spruce Point views the pending legal battle as a sign of PBH's poor business practices to not uphold its end of the obligation and worst-case scenario is part of a last-ditch effort to preserve cash as revenue and cost pressure intensifies."

"Management compensation is a significant percentage of EBITDA and has been immune to Kratos’ struggles and poor performance. Among small cap aerospace and defense contracting peers, Kratos’ management is excessively paid relative to EBITDA"