{ "docId": "019dd923-622c-750b-8b9a-0f4bec37392f", "docSlug": "f982379e2e48", "documentTitle": "Lasertec Corporation (6920)", "authorId": "58_Scorpion_Capital", "authorName": "Scorpion Capital", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2024-06-05 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 240, "pageCount": 334, "prevPage": 239, "nextPage": 241, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "dense", "nDataPoints": 0, "notes": "The slide uses a Q&A format to build a case for potential revenue recognition fraud.", "elementsJson": [ "paragraph", "quote_block", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9a-0f4bec37392f/240", "deckHref": "/decks/019dd923-622c-750b-8b9a-0f4bec37392f", "deckJsonHref": "/decks/019dd923-622c-750b-8b9a-0f4bec37392f.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9a-0f4bec37392f#slide-240", "components": [ { "bbox": null, "kind": "callout", "text": "A Global Foundries executive conveyed color “from colleagues that I’ve spoken with” – “their factory floor for finished goods is full...a substantial amount of finished goods inventory that’s either not passing [evaluation by customers] - customers have deferred shipment...but from colleagues who have visited, they said they have literally no space left on their final inspection bays before the inspection ships.”", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-78b7-702e-9619-af54ec7bbd5e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.55, "w": 0.86, "x": 0.07, "y": 0.38 }, "kind": "list", "text": "Executives who recently visited Lasertec saw finished goods inventory piling up; premature revenue recognition\nA: “I have not heard of any A300s actually shipping. I’ll just say, through colleagues that I’ve visited, that there are systems on the floor that customers are doing evaluations on, but I don’t know of any that have actually shipped to a customer site.”\nQ: “Lasertec’s financial statements look really weird, the kind that to me typically signal some kind of accounting games or accounting fraud.”\nA: “I’m not an expert in financial treatment, but I’d say recognized revenue for prepayments of systems that aren’t yet shipped.”\nQ: “Their financial statements are very opaque. It’s very unclear. But the one thing that is very clear is that the inventory over the last five years on their balance sheet has absolutely exploded where inventory now is about one times revenue. I wonder if product is piling up or they’re misvaluing the inventory to inflate earnings.”\nA: “From colleagues that I’ve spoken with, their factory floor for finished goods is full. So, I’m guessing that they have a substantial amount of finished goods inventory that’s either not passing [evaluation] - customers have deferred shipment - I don’t know. But from colleagues who have visited, they said they have literally no space left on their final inspection bays before the equipment ships”\nQ: “When did your colleagues visit?”\nA: “It would have been this fall, in the September/October timeframe.”\nQ: “Do you know roughly how many machines were in that space?”\nA: “I didn’t inquire about specifics around how many bays it was. Realistically, an equipment provider probably - I don’t know - given about the size of Lasertec, it’s probably not more than 10 or 15 maybe. I don’t know.” – Longtime executive at Global Foundries; directly involved with Lasertec and all aspects of mask inspection", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "44dedcd7-de97-4893-b9ce-c0c536c1844d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.86, "x": 0.07, "y": 0.07 }, "kind": "paragraph", "text": "Other customers who recently visited their headquarters confirmed seeing an unusual level of inventory piling up, and speculated that they “recognized revenue for prepayments of systems that aren’t yet shipped.” A Global Foundries executive conveyed color “from colleagues that I’ve spoken with” – “their factory floor for finished goods is full...a substantial amount of finished goods inventory that’s either not passing [evaluation by customers] – customers have deferred shipment...but from colleagues who have visited, they said they have literally no space left on their final inspection bays before the inspection ships.”", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "70f84e50-0844-4a4b-9866-f70229477c51", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "“I have not heard of any A300s actually shipping. I'll just say, through colleagues who have visited, that there are systems on the floor that customers are doing evaluations on, but I don't know of any that have actually shipped to a customer site.” — Longtime executive at Global Foundries", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-78b7-702e-9619-b26a88ebc7ae", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.3, "x": 0.07, "y": 0.95 }, "kind": "source-note", "text": "Source: Scorpion Capital consultation calls with experts", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "452eb6e8-6aff-4405-9b92-ea3b438c452b", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "fraud-exposure", "slug": null, "matchId": "fdd4c510-3ca6-4735-9d9f-ca36cc0b4990", "evidence": "The slide presents expert testimony to allege premature revenue recognition and inventory inflation.", "confidence": 0.9 } ], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }