Dave Portnoy says he buys stocks based on his mantra that they “only go up” — but a muckraking short-seller thinks one of his bets is in for a stomach-churning plunge.
The famously flippant Barstool Sports founder — who has become a face for the recent day-trading boom since the coronavirus shut down this year’s sports seasons — has lately been touting shares of an obscure Las Vegas-based tech firm called Remark Holdings.
But in a Tuesday presentation to investors, Dan David of Wolfpack Research raised a host of red flags about Remark, including alleged ties to a blacklisted Chinese company and a CEO with a pile of gambling debts. Remark’s “less than worthless” shares, which trade under the ticker symbol MARK, are an ill-advised bet that could lead Portnoy’s fans to lose serious money, according to David. David personally went short on the company after hearing Portnoy’s ramblings about it.
“He’s a menace,” David said of Portnoy in a Tuesday presentation at the Contrarian Investor Virtual Conference. “He does not research. He hears from what he calls the birds on Twitter, they tell him this is a great company, and he starts pumping it.”
“These are average people just getting annihilated and this jackass doesn’t care,” David added.
Portnoy — who has amassed a large following of amateur investors on Twitter, adopting the moniker “Davey Day Trader” despite warning them not to “trust anything I say about stocks” — has been on a wild ride with Remark, a stock he said he bought on the recommendation of “acquaintances.”
Remark shares — which rose as high as $3.56 on May 27, a day before Portnoy first mentioned the stock on Twitter — closed at $1.86 on Tuesday, up 1 cent.
In his daily trading livestreams on Twitter, Portnoy has bemoaned the company — which offers artificial-intelligence systems in China and thermal cameras in the US — as the “WOAT,” or “worst of all time,” on bad days, only to boast about its gains on good ones.
“Those who stay will become champions!” Portnoy exclaimed July 23, when the stock rose 5.6 percent to $1.49 after weathering a two-week tumble that nearly cut the shares in half. “That’s why you never jump ship, because it doesn’t matter what company, doesn’t matter how bad they are… Give it time, and what happens, people? Stocks always go up.”
But there are plenty of reasons to jump ship on Remark, according to David.
For one, David claims, the company has admitted that Chinese company Hikvision is one of its suppliers, in an email from a company representative that a shareholder posted on Twitter. Last year, the US Commerce Department placed Hickvision on its “entity list’ over concerns it was “acting contrary to the national security or foreign policy interests” of the US.
The entity list imposes restrictions on the ability of American businesses to exports items to listed companies.
David also pointed to multiple legal battles that Remark is entangled in, including one that could cost it its stake in Sharecare, a buzzy health-care firm co-founded by celebrity doctor Mehmet Oz.
Remark CEO Kai-Shing Tao has also landed himself in court over $86,000 in gambling debts to Las Vegas’s Bellagio and Aria casinos, according to David. He cited records from a May lawsuit against Tao to which the executive has not yet responded.
David said the debts suggest Tao “runs his personal finances the same way he runs his company.” Remark posted net losses of $25.6 million last year and $2.4 million in the first quarter of 2020, financial statements show.
“Our investment thesis for MARK is the same investment thesis we had for any of the companies in the China hustle: F— ‘em,” David said. “And f— you too, Davey Day Trader.”
Remark did not immediately respond to a request for comment on David’s claims, and a Barstool Sports rep did not immediately comment on Portnoy’s behalf.
Remark isn’t the only small-cap company Portnoy has promoted. He claimed in June that he bought a stake in a company called InspireMD — whose shares were closed at 44.5 cents Tuesday afternoon — after getting a tip from a woman he went on a date with.
“Bought 400 grand just to impress her,” Portnoy said. “That’s how you trade. It’s not always the X’s and the O’s like Warren Buffett likes to tell you.”