Shares of STAAR Surgical, Trupanion drop after reports as Wolfpack’s David battles Davey Day Trader over Remark Holdings
Six presenters, the most ever, provided stock picks at the third Contrarian Investor Virtual Conference on Aug. 11. Four of the presentations were short ideas and two long calls on individual stocks. Markets reacted immediately and in a few instances quite dramatically. The conference was picked up in various media. For more on that see our press page.
Bradley Safalow of PAA Research kicked off the proceedings with a short thesis: Trupanion Inc. (NASDAQ:TRUP), a Seattle-based pet insurance provider. “This is maybe the best short idea I’ve come across in my career,” Safolow said. His presentation lists 11 facts about the company and one opinion “that the stock trades below $10 a share.”
TRUP dropped from its previous close of around $68 per share to less than $64 after Safalow’s presentation, corresponding to a decline of about 7%.
Anne Stevenson-Yang of J Capital Research followed with a short idea of her own: STAAR Surgical (NASDAQ: STAA), a Monrovia, Calif.-based manufacturer of implantable contact lenses used in the treatment of myopia. The company is valued at about $3.2 billion and derives more than half of its revenue from a single distributor in China, said Stevenson-Yang. “We think that STAAR China’s sales are overstated by at least a third,” she said on the call. Her presentation takes a closer look at the company’s China distributor, Lansheng, supplying what she says is evidence of empty shell companies.
STAA shares dropped when the presentation started at yesterday’s open, from the previous day’s close of around $51 to less than $48 before stabilizing — a decline of about 6%.
Vishal Bhutani of Pyrrho Capital had the first long thesis of the day, with Freeport McMoran (NYSE: FCX). The copper producer “is a play on macro themes that are very topical right now,” specifically the best way of expressing a recovery in global growth.
Eric Chung of Lighthaven Capital presented a short thesis on Energous Corp. (NASDAQ: WATT), arguing that the San Jose, Calif.-based producer of wireless charging solutions “is a moonshot.” His presentation says the company is “off trajectory” and presents some of the technical obstacles.
Gabriel Grego of Quintessential Capital, a well-known short activist, had the second long idea: Sun Corporation, which his presentation bills as “a hidden gem in the rising sun.” The Israeli cybersecurity company trades in Japan under ticker 6736 and gained almost 7% in today’s trading session. Sun is trading at 1.4 times enterprise value to sales in an industry that in the U.S. trades at 5x or more. “We believe this company at some point will probably be double-listed or spun off in a NASDAQ IPO,” Grego said on the call.
Dan David of Wolfpack Research closed the proceedings with a colorful presentation on Remark Holdings (NASDQ: MARK). Shares of the Las Vegas-based media company were the subject of bullish commentary from one Dave Portnoy, aka @stoolpresidente. “I think that short-selling in general is a service to the market,” David said. “Calling Davey on his [BS] is an even bigger service to the market.”
One of the most popular bull arguments for MARK is its 5% stake in Sharecare, David said in his presentation. “It’s believed that Sharecare could be valued upwards of $1 billion in an IPO.” But Remark’s stake in Sharecare was seized by a Delaware sheriff, David said. “We see no chance that Remark is going to continue to own a stake in Sharecare.” Wolfpack doesn’t believe Remark owns KanKan, an artificial intelligence data platform in China, either.
MARK shares sold off slightly with David’s presentation, dropping from $1.78 to $1.67 in an hour before rebounding. Remark Holdings reports earnings before the start of trading on Friday.
Wolfpack’s presentation follows below, courtesy of its YouTube channel (viewer discretion is advised due to mature language). A Q&A with David from the conference follows below that.