Iceberg Research

Andrew Left spent the day testifying yesterday, and cross-examination is expected today. Unlike Friday, Andrew was relaxed, confident, and commanded the courtroom yesterday. Much of courtroom debate revolves around the word “opposite” and whether buying to cover shortly after releasing a short report is doing the “opposite” of what you recommend. Defense emphasizes the opposite of short is long and the opposite of long is short, and Andrew never issued a short then went long or vice versa, just reduced via risk management. Defense also emphasized Andrew is a short-term trader in all stocks not just reports Adam Fee: “Were you hoping to make money trading around the report?” Andrew: “Yes, I was.” Defense also argued that the rules are not clear, and nobody believed these trading practices were wrong. In fact, in one case mentioned in the indictment, $LOPE, Andrew even submitted an SEC whistleblower petition on the company. Cross-examination today should help clarify the government’s position. Closing arguments expected tomorrow.

$EOSE Q1 reality check. Gross margin -78% (-96% ex IRA subsidy). 45% of revenue went unbilled into contract assets, up from 1% a year ago. Meanwhile investors are briefly excited about a new JV with Cerberus that burns and dilutes shareholders. Cerberus already had warrants, preferred, board seats, and senior debt. The new JV adds $50 million of founder units for zero cash, 10% IRR pref on capital they didn’t deploy, controlling equity, the operating contract, and another discount warrant. Shareholders chip in $150 million through a rights offering. Cerberus is named for the three-headed dog that guards hell. Shareholders are fully trapped there.

*QUANTUM BEVERAGE RISES 33% AFTER REBRANDING FROM BEVERAGES TO QUANTUM TO PHOTONICS $QUBT

We are short Gevo Inc ($GEVO). The change in the US administration is the obvious threat but problems run deeper, in particular the competitiveness of technology. A lot of room to fall further.

Dear Joe, I’m writing this as a shareholder who actually wanted to believe in $EOSE is building and who still believes the underlying problem you’re trying to solve is real, urgent & structurally important for the grid. But this quarter wasn’t just a bad print.. it genuinely was a complete trust break. Small-cap investing is like watching your house catch fire since you already know the risk going in but the only way you survive is if you trust the person guiding you to the front door. Once that trust is gone then you don’t just lose money but you burn with it. That’s what this quarter felt like. Reaffirming guidance deep into the quarter and then missing it by this much without pre-announcing tells me that you actually didn't know what was happening inside the factory or chose to stick with the story even as the numbers were falling apart. Both are bad. As CEO, that’s on you. What makes this harder to swallow is the timing since you raised roughly $600M late in the quarter and then turned around and delivered results that were nowhere close to what had been guided. Even if every operational issue you laid out is real then the sequence alone creates a governance problem. You can’t take fresh capital from the market while the quarter is blowing up and then act surprised after the fact. That destroys credibility. I heard the explanations of supplier issues, downtime way above expectations, automation not hitting quality targets, rework, utilization below plan. These are real problems but from the outside it looks like the manufacturing system still isn’t stable enough to support the confidence you projected publicly. You can’t ask investors to underwrite a scaling story when the engine is still sputtering. The frustrating part is that demand doesn’t look like the problem. You booked a lot of new orders, backlog grew and the pipeline is big and the tech actually matters. Long-duration, non-flammable zinc batteries solve a real gap that lithium-ion doesn’t since data centers run 24/7 but the grid wasn’t built for that. Eos sits right at the intersection of AI power demand and grid reliability which is why people believed in this story in the first place. But none of that matters if management credibility is impaired which is exactly what today’s stock action reflects. A 40% drawdown isn’t the market debating long-duration storage but it’s the market GRADING YOU JOE and saying it no longer trusts you on execution. I hope the company does turn it around. I hope the technology scales. I hope the mission succeeds. But as an investor, I already accept enough uncertainty from markets, supply chains and the normal fog of war but what I cannot accept is uncertainty layered with distrust of management communication. This quarter crossed that line and you should assume many shareholders feel the same.

The salmon win again. It makes you wonder. If $NAK can't build Pebble during the Trump Administration, when will it ever? Pebble will become the greatest "What If" story in mining history, if it isn't already.