Investments

We are short shares of Principia Biopharma, a company whose $2 billion valuation rests on a single obscure molecule known as Bruton’s tyrosine kinase (BTK). Named after a pediatrician who discovered an immunodeficiency later found to be caused by a defective mutant form of…

We are short shares of CareDx, a $1.7bn diagnostics company whose share price has increased by 30x over just the last two years and now trades at over 18x sales. The meteoric rise and generous valuation have come in the wake of excitement over the commercialization of AlloSure, a blood test intended to identify organ rejection in kidney transplant recipients. Transplant nephrologists have long used measures of kidney function to assess the probability of rejection, with a tissue biopsy providing a definitive diagnosis. To hear CareDx tell it, AlloSure is the…

Tucows (TCX) operates two declining tech/telecom businesses and a fledgling low-return fiber division, yet is being valued by the market at 60x trailing normalized earnings. Its two profitable segments barely deserve double-digit earnings multiples given their bleak growth profiles, and the company’s cash flow is being plowed back into a third segment that will prove to be a massive destroyer of capital. TCX’s valuation is wildly overstretched and the stock is worth 50%+ less…

We are short shares of Qualcomm Incorporated, a semiconductor company teetering on the brink of disaster. For years, Qualcomm has presented itself as a technological innovator that monetizes its R&D in two ways: 1) selling chips that go into smartphones and other wireless devices and 2) licensing its patent portfolio. The licensing business, despite contributing far less revenue than the chip business, has historically supplied roughly two thirds of Qualcomm’s…

We are short shares of The St. Joe Company, a Florida Panhandle developer with overhyped real estate holdings and a controlling shareholder who will soon be forced to liquidate part of his investment. For more than a decade, St. Joe has lured investors with the promise of unlocking value in large tracts of undeveloped land near Panama City Beach. Every year, however, this promise has remained unfulfilled, because St. Joe’s purported plan for…

We are short shares of QuinStreet, a web-1.0 adtech firm that acts as a middleman between online advertisers and niche web sites. These niche sites attract visitors (leads) who are shopping for, say, a new credit card; QuinStreet acquires those visitors and delivers their data or eyeballs to advertisers, like credit-card companies, earning a fee along the way.

For much of QuinStreet’s eight-year history as a public company, its stock traded at less than half of its IPO price, as investors realized that QuinStreet’s outdated business model is unlikely…

We are short shares of Proteostasis Therapeutics, a clinical-stage biopharmaceutical company whose lead drug, PTI-428, aims to treat the genetic disorder cystic fibrosis. Proteostasis claims that the drug works in a unique way, by somehow increasing the levels of messenger RNA and protein corresponding to the so-called CFTR gene that is dysfunctionally mutated in people with the disease and that gives rise to its ultimately fatal…

We are short shares of Eastman Kodak Company (“Kodak”, NYSE: KODK), a 138-year old commercial printing and imaging company whose stock has more than doubled since announcing a blockchain and cryptocurrency licensing partnership.

Fittingly for a long-time provider of motion picture film products, Kodak’s sudden rise resembles something out of the movies. A dying relic of…

Prothena Corp. PLC (NASDAQ:PRTA) is a $2.4bn development-stage biotechnology company whose stock has climbed over 700% since its spin-off from Elan in December 2012. We are certain that its lead asset, NEOD001, will fail its ongoing Phase 2b and Phase 3 trials.

NEOD001 is a monoclonal antibody designed to treat amyloid light chain amyloidosis (AL amyloidosis). AL amyloidosis is a condition caused by light chain proteins misfolding, which then leads to the light chains sticking together and forming amyloid structures. These amyloids are then deposited…

ViaSat considers itself a leader in satellite technology, capable of producing bandwidth economics competitors can’t match. For the sliver of revenue generated from delivering broadband to an airplane, that may be true. For the 70% of EBITDA that comes from delivering broadband to homes and small businesses, it is not. ViaSat provides inferior technology in a hyper-competitive market. The company’s main business is selling satellite-based basic home internet service to U.S. consumers. Unfortunately, its technology is no match for terrestrial internet providers today…

We are short shares of Pulse Biosciences, a ~$400mm medical-device company with 13 employees, zero revenue, and one focus: developing and commercializing a technology it calls “Nano-Pulse Stimulation” (NPS), in which cells are exposed to very strong electrical fields for very brief periods of time in hopes of killing them. Pulse…