Spruce Point Capital Management Releases Report and Strong Sell Research Opinion on Sunnova Energy International Inc. (NYSE: NOVA)
Spruce Point Capital Management, 29 September 2020
According to the complaint, throughout the Class Period, Defendants misrepresented and concealed that (1) ACM Research’s revenues and profits were diverted to undisclosed related parties, and (2) consequently, the company materially overstated its revenues and profits.
Investors allegedly began to learn the truth on Oct. 8, 2020, when J Capital Research published a report entitled “Dirty business,” bringing ACM Research’s reported financials into serious question.
More specifically, J Capital concludes ACM Research is a fraud, over-reporting both revenue and profit. According to the report, “ACMR reports industry-beating gross margins of 47%” but “[w]e believe the real gross margins are half at the best.” J Capital also concludes revenues are overstated by 15-20%, undisclosed related parties are diverting revenue and profit from the company, the key means by which ACMR tunnels over-reported profit out of the company may be through about $20 million in overstated inventory and through cash that is inflated or compromised, and warranty and service costs are understated by at least $11 million.
Continue reading “Article: Spruce Point Capital Management Releases Report and Strong Sell Research Opinion on Sunnova Energy International Inc. (NYSE: NOVA)”
Spruce Point Capital Management Releases Report and Strong Sell Research Opinion on GFL Environmental Inc. (NYSE/TSX: GFL)
PRNewswire, 18 August 2020
Based on an extensive forensic analysis and holistic review of GFL’s accounting practices, financial controls and reporting, and corporate governance, Spruce Point believes that without access to new capital, the Company’s shares are worthless and likely uninvestable for institutional investors. GFL’s executives have not only fostered what appears to be an extremely aggressive and opaque business model, but they have either deliberately concealed, or inattentively omitted, past failures and questionable business connections. Our report’s textual and visual evidence shows that Chief Executive Officer Patrick Dovigi has obfuscated his connections to what some observers have dubbed “organized crime” figures. We have also discovered that former General Counsel and current Senior Vice President Joy Grahek has failed to disclose her role advising Philip Services Corporation (“Philip Services”), which was a dual-listed roll-up of metal and industrial businesses that collapsed, was pursued by the Ontario Securities Commission, settled $80 million in shareholder claims, and was described as a “house of cards” and “one of the great unprosecuted frauds in Canadian business history.”
Continue reading “Article: Spruce Point Capital Management Releases Report and Strong Sell Research Opinion on GFL Environmental Inc. (NYSE/TSX: GFL)”
Dollarama shares drop after short-seller says ’broken growth story’ could tumble 40%
Svea Herbst-Bayliss, 31 October 2020
BOSTON — Spruce Point Capital Management, which focuses on in-depth research of companies’ vulnerabilities, sees room for Dollarama Inc’s stock price to tumble roughly 40 per cent after the Canadian retailer raised prices and fewer customers are shopping at its stores. “Spruce Point believes Dollarama is a ‘strong sell’ with an approximately 40 per cent downside risk,” Ben Axler, who runs the hedge fund, said at an investment conference on Tuesday, according to a person familiar with his presentation. He examined the company’s products, pricing and what he called “troublesome management and governance red flags.”
Continue reading “Article: Dollarama shares drop after short-seller says ’broken growth story’ could tumble 40%”
Here’s Why Shares of Ballard Power Systems Sank 18% in January
Scott Levine, 06 February 2018
Shares of Ballard Power Systems (NASDAQ:BLDP), an industry leader in fuel cell solutions, plunged more than 18% last month, according to data provided by S&P Global Market Intelligence. The decline follows a report from Spruce Point Capital that cast a critical eye on the company and assigned a long-term price target for the stock of $1.15 to $2.50. Through 2017, Ballard’s stock had risen 167%, ending the year at $4.41.
Ballard has high hopes for its success in the Chinese market — by providing solutions to bus and truck manufacturers — over the next several years. In fiscal 2016, for example, the company attributed 39% of its revenue to sales there, and forecasts that it will contribute 45% to its top line in fiscal 2020. However, it’s less optimistic about success in other markets, guiding for sales in North America (its second-largest source of revenue) to remain stagnant at 33% from fiscal 2016 to fiscal 2020 and sales in Europe to slide from 22% to 18% during the same period.
Continue reading “Article: Here’s Why Shares of Ballard Power Systems Sank 18% in January”
China Based Investigation Into Ballard Power (Nasdaq/TSE: BLDP) Suggests 35% – 70% Downside Risk
Ben Axler, 25 Janury 2018
Spruce Point Capital Management is pleased to announce it has released the contents of a unique research report on Ballard Power Systems (Nasdaq and TSE: BLDP). Spruce Point has conducted a critical business and financial review of Ballard and its Chinese growth ambitions, which has been a key driver of its recent share price out performance. Based on our on the ground China research, in our opinion Ballard is set to disappoint expectations as a result of having selected the wrong Chinese partners, and the market and infrastructure for its products not having developed according to plan
As a result, we have issued a “Strong Sell” opinion and a long-term price target of approximately $1.15 – $2.50 per share, or approximately 35% to 70% downside risk.
Continue reading “Article: China Based Investigation Into Ballard Power (Nasdaq/TSE: BLDP) Suggests 35% – 70% Downside Risk”
Spruce Point Capital Releases a Strong Sell Primary Research Opinion on Ballard Power Systems Inc. (Nasdaq: BLDP, TSE: BLDP)
Spruce Point Capital Management, 25 January 2018
Report entitled “Fuel Sell Opportunity” highlights the findings of Spruce Point’s on the ground due diligence on the nascent state of the China hydrogen fuel cell industry, and the significant challenges faced by Ballard’s China partners, Broad Ocean and Synergy. The report discusses the potentially significant risk to Ballard’s backlog and suggests that the stock has 35%-70% downside.
China Industry Challenges: There are currently only 36 licensed fuel cell vehicles on the road in China, only six refueling stations (one is public), and limited planning being devoted to hydrogen sourcing and transportation. In Spruce Point’s view, the lack of refueling infrastructure, confusion around refueling subsidies and abysmal refueling station economics pose the greatest threat to fuel cell vehicle commercialization. At this point, it still remains uncertain if China will develop the fuel cell vehicle market beyond an experimental phase.
Continue reading “Article: Spruce Point Capital Releases a Strong Sell Primary Research Opinion on Ballard Power Systems Inc. (Nasdaq: BLDP, TSE: BLDP)”
SPRUCE POINT CAPITAL ISSUES “STRONG SELL” RESEARCH OPINION ON TSO3
ValueWalk, 23 August 2017
TSO3 Inc. (“TSO3” or “the Company”) makes low-temperature sterilization systems to eliminate microbial contaminants that cause infection. Founded in 1998, TSO3 is a regular stock promotion that has repeatedly disappointed investors by failing to broadly commercialize its product and show a profit. Déjà vu, now on its 3rd attempted generation STERIZONE VP4 and its 3rd sales/distribution partner Getinge (previous partner 3M sued it), TSO3 is again baiting investors, who’ve bid its share price up 6x since 2014. Our fundamental and forensic analysis suggests investors should brace for disappointment and >80% downside.
The Canadian markets are littered with recent examples of healthcare stocks in need of urgent medical attention, wounded from over-promotion, questionable practices, and poor performance. Short sellers made early warning calls on many names down >80%: Valeant, Concordia, Nobilis, CRH Medical.
Continue reading “Article: SPRUCE POINT CAPITAL ISSUES “STRONG SELL” RESEARCH OPINION ON TSO3”
Spruce Point Capital Releases a Strong Sell Research Opinion on TSO3, Inc. (CN:TOS, OTC:TSTIF)
Spruce Point Capital Management, 23 August 2017
In late January 2021, GameStop experienced a once-in-a-decade squeeze that has captivated the world’s attention. It was a premeditated and programmatic exercise, orchestrated by coordinated stock and option buying across the retail and professional community, resulting in large institutional entities losing billions of dollars. Investment houses with significant short positions did not expect a stock with GameStop’s fundamental profile to increase +2,500% in price over less than three weeks; therefore, they did not have the controls in place to handle the incredible levels of stock and call option purchases. The frenzy drew comments from the White House, provoked a social media crackdown, caused brokerage units to restrict trading, and has led to a Congressional hearing on GameStop on Thursday, February 18th.
Continue reading “Article: Spruce Point Capital Releases a Strong Sell Research Opinion on TSO3, Inc. (CN:TOS, OTC:TSTIF)”