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Disclosure: ShadowFall is short Rockwool, $ROCKB. It has been over three years since ShadowFall has publicly spoken on matters of social impacts and where we believe that shareholders may be being badly misled. Allow us to explain. Yesterday, Rockwool’s shares rose strongly even though it only tiptoed over the line for FY24 expectations thanks to the sale of a warehouse in Baltimore. Meanwhile, its FY25 guidance was poor as compared to consensus. A strange outcome for a weaker outlook. There is a school of thought that management always guides low and eventually beats, however in recent years this may have been due to its exposure in Russia. Russia seems to us to be a far bigger part of the Rockwool business than Rockwool’s management has indicated to the market. Far bigger (see below). But before yesterday’s earnings report, Rockwool’s shares were also materially bid up on the hopeful prospect of peace for Ukraine and the associated economics of rebuilding the badly war-torn country. The reason for this is that Rockwool appears to be included in every so-called “Ukraine reconstruction” basket created by many investment banks. Hence, Rockwool is being sold as a potential beneficiary of the reconstruction of Ukraine. For the people and government of Ukraine we can only conclude that this must be a bitter pill to swallow due to the fact that 1. Rockwool has immensely benefited from material profit in Russia. 2. The Ukrainian anti-corruption agency, NACP, has added Rockwool to a “blacklist” of companies, and designated Rockwool as an “international sponsor of war”. To think that Rockwool will have any involvement in the reconstruction of Ukraine seems farfetched and as a perversion and insult to the people of Ukraine to sell it to investors in baskets as such. Given the fact that Rockwool does so much business in Russia, we find it hard to believe that there remain such large shareholders in Rockwool, which claim to adhere to an ESG investment framework. Although this may be because they lack a proper understanding with little scrutiny of how significant the Russian component of Rockwool’s business has been. Equally to those for which ESG is less relevant, and are simply interested in assessing intrinsic value, they too may find it helpful to better understand how important the Russian business has been to Rockwool as compared to its other geographic regions, especially now that the Russian market looks to be deteriorating fast. And then as we highlight above, there is another, possibly more passive set of investors, who may have potentially been duped into inadvertently buying into Rockwool, through the so-called “Ukraine reconstruction” baskets. The chance to have greater public scrutiny of all this is why, with over a week’s advance notice, we politely requested to Rockwool’s investor relations if we could be invited to the earnings call. They declined us access to ask open questions and told that us that we can only submit questions offline. As we highlight above, we believe that the Russian business has been far more material than the “less than 10%” that Rockwool’s management has previously guided to. The fact that since the invasion of Ukraine, Rockwool’s Russian operations have paid dividends of EUR 166m, which is almost 60% of Rockwool’s group cash balance, and is over 50% of the group’s total cumulative dividends paid to Rockwool’s investors would also suggest that Russia is a lot more material than “less than 10%”. So, for the lucky persons who have been pre-selected with access to the call please can they ask the following to Rockwool’s management: 1. Since the Russian invasion of Ukraine, what has been the revenue and growth of the Russian business in 2022, 2023 and 2024? 2. What EBITDA and EBIT margins has the Russian business achieved in 2022, 2023 and 2024? 3. Regarding the share buyback and prospective dividend, given that almost 60% of group cash is seemingly stuck in Russia, will the company have to use debt to finance these shareholders returns? 4. Rockwool states that it exercises passive ownership of the Russian companies and is not involved in the operations of them. If this is true, then how does Rockwool’s management ensure that there are sufficient local governance controls in place to ensure that illegal activity such as bribery is not being undertaken, nor morally questionable business such as either direct or indirect supply of materials to the Russian government? 5. Can Rockwool categorically state that its Russian entities have had no transactions with other group such as Rockwool subsidiaries in Europe? The reason we ask is that the filings for the Russian entities suggest they have had some transactions with a European subsidiary, however the corresponding European subsidiary (unsurprisingly) fails to disclose this. 6. Does Rockwool expect to receive any business in Ukraine if there is a peace settlement? 7. Historically, Rockwool has paid its auditor EUR 2m in statutory audit fees. It paid EUR 2m in 2024 but also an additional EUR 1m to its auditor for “other services”. What were these “other services”? Thank you in advance for anyone who can put the above questions to Rockwool’s management and we hope that a peaceful resolution between Ukraine and Russia can be achieved.

This is the way … Pricey Steaks Become a Must-Have at Top London Restaurants

It’s like a miserable sequel to The King’s Speech.

The EU, UK and other NATO allies should be paying their fair share and for too long have relied on the generosity of the US taxpayer. However, the fly in this ointment is that (as in the UK) almost all major EU economies are budgetary basket cases. If defence spending moves from 2% of GDP (which in many NATO member cases it isn’t even close to), to 3%, then for European nations it would require an incremental c. $188bn. The majority of which will come from Germany at $32bn and Italy at $30.2bn followed by France at $25.2bn, Spain at $23.7bn, and the UK at $21.6bn, (with the other nations making up the residual of $55bn). For the UK, this is yet another “black hole”. We seem to be collecting black holes. If the respective governments agree to pay this, then either taxes need to go up (again in the UK) or cuts need to be made elsewhere to public spending. In the UK yet higher taxes would be a death knell. We already have a millionaire leaving every 45 mins. Either way, when considering von der Leyen’s dismal record on overseeing Defence, she seems the least equipped person to be involved in sorting it out.

For full disclosure, ShadowFall is short VusionGroup $VU. A très intéressant development.👀 The French regulator, @AMF_actu, has subscribed to @leoeperry’s, “a beginner’s guide to accounting fraud”. I wonder if they’ll be able to make any sense of VU’s accounts. I doubt it.

Initiation by a mid-tier EU investment bank on a basket case EU company. I smell a capital raise ... 👃💶💶💶

Post-haste all runways need to be closed not opened to stop the millionaires from leaving.

Don’t tell the IMF 👀

It's always interesting when a CEO (incl. familial shareholders) pledges a significant portion of their equity holdings. Especially when the respective company has historically been subject to a high-profile short report. I’m unfamiliar with how matters may develop in the Polish market, however when this has occurred in other markets, such as in the UK or Germany (in the case of @wirecard), it has often led to inauspicious outcomes for the other shareholders.

For full disclosure, ShadowFall is short VusionGroup $VU Yet further devastating analysis from @leoeperry on @vusiongroup's financial statements, querying the veracity of its cash, receivables, accrued income, and revenue among other items. As far as I know, Sir Rod Stewart doesn’t work in the finance department of VU, although he seems to demonstrate some of the requisite skills.

The Mayans could have easily been short sellers. They clearly have what it takes to at first undergo excruciating masochistic pain in the hope of then looking quite the man about financial town sometime later.

@CyrusdeWeck

I suspect this exodus is still in its infancy and will only snow ball from here, moving down the ranks from the super rich to HNW’s and entrepreneurs. Labour’s mindset is from 50+ years ago. They ignore the fact that unlike as compared to the UK then, there is now a multitude of jurisdictions that offer a far greater quality of life, less crime, more attractive tax frameworks, better public services, not to mention a sunnier climate, and a more positive approach to wealth creation. And social mobility is now so much higher, with many of these jurisdictions eager to attract wealth creation. Then again, I guess those countries might not have the NHS 🥴.

RT @SharePickers: “They are universally the worst cabinet of all time. They have gone off half cocked without any thought of the ramificat…

If at first you don’t succeed, tax, tax, and tax again.🥴👇🏻

For full disclosure, ShadowFall is short VusionGroup $VU Another tricky brain-teaser from @leoeperry for @vusiongroup co-auditors, Ms. Fimayer from @KPMG_France, and Ms. De Bie from @DeloitteFrance, to contend with. Someone really should write them a letter and maybe send them a Panasonic scientific calculator to help them with their sums.👇

Ahhh. An old fashioned sale and lease back. What’s that? (Checks notes…📑). … An old fashioned free handover and lease back.

As a general rule of thumb, I always find that whenever a company starts shifting focus towards the long term opportunity and away from the short term, it means the short term is likely not so good. Sausage roll anyone?