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We go deep, so that investors don't have to.

Be warned. We are activists, usually on the short side. We are biased. We do our best to find and present facts, based on extensive primary research and using public sources. But we will profit if these stocks decline or, when we are long, rise in value. We do not offer advice on how to trade a stock. We present our views.
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J Capital is short ​Nearmap Ltd. (NEA AX)

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On February 15, Nearmap published a response to our report. They failed to refute any of our allegations. See our response here.
Nearmap Ltd. (NEA AX) repeatedly assures investors it deserves a heady share price because of high growth and coming profits in the U.S. market. Actually, the company is laying off sales staff and offering discounts in a panicked attempt to improve margins, kneecapping its efforts to grow. Nearmap is apparently trying to hide its U.S. failure with accounting tricks to pull forward revenue. Without these maneuvers, U.S. revenue growth could have been half what was reported.

Nearmap turned up in the U.S. in 2014 with a unique product but failed to monetize it, and now competitors have speeded past. The company incurs twice the costs of the leading U.S. competitor to complete the same surveys and has a vanishingly small U.S. market share after seven years of trying. Its analytic technology lags far behind the competition. Sales to insurers, about 41% of the total, may be challenged in a potential patent dispute with key U.S. competitor. Throwing money at the problem isn’t helping.

The valuation and bull case for Nearmap are based on Nearmap’s assurance that it can replicate its Australian success in the much-larger U.S. market. The reality is that losses are widening, gross margins are going backwards, and competitors are crushing them. We spoke with five competitors, seven former employees, and 17 clients or prospective clients and learned that Nearmap has failed to succeed in any key sector in the U.S. Expect more losses and more hype about the prospects in the U.S. when the company reports H1 FY 2021 on February 16.

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FEATURED REPORTS

September 9, 2020
January 11, 2021

NAK US

Pretend and Extend

We believe Northern Dynasty has crafted a money-losing mining plan to achieve government approvals. Since management is bonused on lobbying success instead of for producing minerals, NAK has no reason to care that the new plan is irrational: we think it will lose money, leave investors with a stranded asset, and be canceled anyway if Joe Biden is elected.

So why has NAK twisted itself into this knot? The CEO of Pebble Partners, the operating entity for NAK’s low-concentration gold and copper deposit, will receive $4.4 mln of the promised $12.5 mln bonus for winning a green light just to start the permitting process.
 
We believe that the deposit cannot be mined profitably and that mining majors Anglo American (AAL L) and Rio Tinto (RIO US) know that. 
NAK Report

BTBT US

“The Company was not able to reach Mr. Liu.” 

With key executives in jail or on the lam for having bilked Chinese investors out of $42 mln in a fraudulent P2P business, Bit Digital (BTBT) has moved on to a fake crypto currency business. We will show that the assets probably do not exist, and the business is designed to steal funds from investors.

BTBT tried to downplay the criminality. It disclosed that it had to replace Director Liu Xiaohui in September 2020 because “the Company was not able to reach Mr. Liu.” That is because, as BTBT knew, Liu was in jail. It reported that the then-CFO, Leng Jing, also in jail, was “the subject of [such] criminal enforcement measures.” The VIE bank accounts were frozen by a Shanghai court and remain frozen to this day.

Once police had shut down its business, BTBT tried to distance itself by selling the China operations, for $10 plus “other good and valuable consideration.” Actually, BTBT likely has liability for the $42 mln lost through fraud.
​
BTBT is now onto its third scheme since IPO for stealing money from investors. There was P2P, car rental, and now “bitcoin mining.” The company reported at end Q3 2020 that it was operating 22,869 bitcoin miners in China, but that is simply a lie. ​
Download the BTBT report
May 28, 2020

NG TSX

Pipe Dream

For the last 15 years, NovaGold’s management team has systematically misled investors with subjective presentation of information about a deposit so remote and technically challenging that the mine will never be built. Over those years, they’ve been treating this 12-person concept company like an ATM, awarding themselves base salaries that rival those of the CEOs at Newmont and Barrick and total compensation packages comparable with those at Rio and BHP. If the information from the company’s feasibility studies were presented in a more honest light, investors would understand that the Donlin deposit, of which they own 50%, is not feasible to put into production at any gold price.
Full NovaGold report
June 25, 2020

IDEX US

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Champion of Stock Promotes

December 3, 2020

TPIC US

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We Are Long TPIC!

December 18, 2020

CBAK US

The Undead: Why CBAT Has Zero Value

Ideanomics (IDEX) (formerly Seven Stars Cloud Group, Inc. and before that WeCast and before that You on Demand Holdings and before that China Broadband) is a zero. The company changes its name and promotional story so frequently that it’s hard to keep up. One thing remains a constant, despite all the press releases, buzzwords and hype: shareholders get wiped out.
Full IDEX report
We believe TPI Composites (TPIC) presents an interesting opportunity to own a business inflecting toward profitable growth with optionality on electric vehicles. In its core business, we believe TPIC may grow EBITDA by 250% over the next two years, propelled by strong demand for new wind turbines. Out beyond two years, demand for offshore wind–where the World Economic Forum predicted an 18.6% CAGR before factoring in Biden Administration programs—is likely to turbo-charge growth and profitability. While we have yet to see results from the EV business, TPIC has secured multiple contracts with automakers including Proterra and Workhorse, and, unlike many of the EV scams with little substance, possesses key EV expertise in composite manufacturing.
TPIC report
CBAK Energy Technology Inc. (CBAT) represents the barely re-animated corpse of CBAK, a Chinese reverse merger that lost all its manufacturing assets to default in 2014. In 2015-16, CBAT raised $113 mln from investors to build new factories—and, we will show, appears to have simply taken a lot of that cash. 

History is repeating itself. CBAT appears to be on the brink of another default. CBAT “is about to go bust; the factory director already ran away,” said a recently departed engineer on the phone with us. “It’s all along been half dead, half alive, mainly relying on the parent company for cash injections to stay alive.” 

CBAT report
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​Cartoon by Johannes Leak
Disclaimer
The reports and other commentary displayed are for information purposes only and should not be relied upon as investment advice. The information provided is not a complete analysis of every material fact regarding any country, region, or market. Because market and economic conditions are subject to change, comments, opinions and analyses are rendered as of the date of this posting and may change without notice. 

Opinions are intended to provide insight on macroeconomic issues and commentary is not intended as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy.

Investments involve risk. The value of investments can go down as well as up, and investors may not get back the full amount invested. The information contained in these reports has not been reviewed in the light of your personal financial circumstances. Reliance upon the information is at your sole discretion.
© 2021 J Capital Research USA LLC. All rights reserved. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of J Capital. Use of this publication by authorized users is subject to the J Capital Authorized User Content Agreement available here. Use of this publication by non-authorized individuals is subject to the J Capital Non-Authorized User Content Agreement available here. 
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