Back in November 2017 I traveled to Sonoma in California to spend the day at Alderlane
Farm with Marc Cohodes and his fantastic wife Aurora.
Marc and I spent the day talking about his career in finance as one of the most notorious
short sellers on Wall Street and amongst the topics we covered in a phenomenal conversation
was the story of MiMedx.
Marc has contended that the company is a fraud for some considerable time now against staunch
opposition from the company.
This past week the company has restated its finances for the last six years, causing a
trading hole and the stock opened down to 25%.
The story's not over yet but we thought this would be a great time to give you a chance
to listen to Marc's thoughts on the MiMedx story.
let's talk about MiMedx because this is something-- we've mentioned it a lot already.
Yeah.
Let's tell that story.
Let's go back to the beginning.
How it came on your radar, and just walk us through the story.
Because I've followed your Twitter feed, I've followed the presentation.
It's just a fascinating story.
The beauty of MiMedx is I have certain tells.
I always say on Twitter that my wig indicator-- Right.
Literally.
CEOs who wear wigs.
I think I'm 13 out of 14.
And this guy Pete Petit, he sued Capital Form for writing research.
Caught my attention.
He sued anonymous bloggers to get their name.
Caught my attention.
But then on his website site, he mentions me and my former partner David Rocker.
He says I'm a member of a Cali cartel, tax evader.
Believe me, I'm not a tax evader.
Money launderer-- I'm not one of those.
All this stuff.
And Carson brought it to my attention and my lawyer sent him a letter to take it down
or we'll sue you.
And when they took it down and sent a letter saying they took it down, I put it on my Twitter.
And Pete Petit has bullied so many women, former employees, customers.
The second I put it out on Twitter, my direct message-- Him backing down.
Him backing down to me.
It was almost like a symbol that Mugabe has been overthrown in Zimbabwe.
People got into the streets and celebrated.
And that was, I think, a sign that there was a big change.
But why do you think he went after you in the first place?
Why-- He was stupid and he bought off on the rhetoric that I'm this all powerful guy who
controls all these skeptics, and actually believed in all this wolf pack bullshit rhetoric
that's out there.
If he'd seen you in the pink Crocs, then maybe he wouldn't have bought into that.
If he would have just called me up and said, what's going on?
That would have been different.
But I always say there's no greater motivator than disrespect.
And this guy showed me the ultimate disrespect by defaming me and accusing me of a bunch
of shit.
I figure if you're doing something like this, you have a ton of stuff to hide.
And the stuff that has come Luke’s and my way, I've never seen the amount of evidence
of criminal activity, kickbacks, Medicaid, VA, channel stuffing, revenue recognition
bullshit in my ear.
So when people ask me on Twitter what I think of MiMedx, at first I said it's in my top
20 all time.
Then I said it's in my top 10 all time.
Now it's in my top five.
I think their sales are overstated by 70%.
I think it's a criminal operation.
I think Pete's the mastermind behind it.
I think people are going to go to jail.
Probably him and maybe their general counsel.
And they all hassle me and follow me on Twitter through anonymous things, and threaten me,
and this, that, and the other.
And it's just wonderful.
So how do you go about-- the battle lines are drawn.
They come after you, you push back, now you're starting to get people come to you and say
you don't know the half of it.
Here's what's going on.
How do you then build that into something tangible that you can put a case forward.
Well, just this past weekend, someone in Georgia, a company, was doing business with MiMedx
and they have proof of revenue recognition fraud at MiMedx.
And there are some lawsuit-- most people can search under MiMedx or the plaintiff or the
defendant and find things, but in this weird state court you need a docket number.
Yeah.
So this guy reached out to me and he said you should look up this verse MiMedx.
And I look it up, and a friend of has LexisNexis looks it up, and someone else looks it up.
No, we can't find shit.
This is on a Saturday.
10:00 Pacific time.
So I go back and I say I need a case number, docket number.
Gives me the docket number and we get all this shit.
And I spent my Saturday reading his deposition, reading the complaint, reading the exhibits.
And I say, fuck.
This stuff is just dynamite.
And it's proof of revenue recognition fraud.
It's proof.
So I take it, distill it, rewrite it, highlight it, keyword it, put some of it out on the
website, sent part of it to the government.
The government didn't know about it.
Exhibits people didn't know about it.
And you start weaving this and I say to myself, fuck.
If they're doing it with this guy, who else are they doing it with?
And it helps build the mosaic that MiMedx, which even though they have 90% gross margins,
they don't really make much money because it's an SG&A fraud.
They're kicking back to the doctors through SG&A.
And they're playing games.
Giving doctors stock to create a pod, to create distribute-- just all these illegal activities.
But none of these are new, right?
These have been going on forever.
Exactly.
But as I said, there's only really six frauds.
Right.
Yeah.
And it's like primary colors.
Again, I wasn't too good in school.
I vaguely remember the primary color thing.
But MiMedx is a shade of red.
I don't know if it's crimson or I don't know if it's sunset red.
I don't know exactly what it is, but it's gets your ass thrown in jail red.
I'm playing for keeps here.
This is not shorting a stock at 13 and covering it nine and an eighth, making four points
and saying, god, aren't I smart.
No, no, no, no, no, no, no.
No.
This is for the whole enchilada because I think you're running a fraud.
And my lot in life is exposing people like you.
And this is what I will do.
And the deeper you go and the more you lie and put out these bogus press releases, the
more I'll dig in.
And that's what he doesn't understand.
And that's what people don't understand about me.
Because at the end of the day, I'll save the system money.
I'll save the VA money.
I'll save Medicare money.
I'll save his customers money.
Crooked docks may go to jail like they did with Insys.
I think they're being investigated by the DOJ, SEC, VA, HHS, and probably the FDA.
That's speculation on my part.
The company has yet to put out an AK saying who they're being investigated by.
They dance around the thing.
I don't know if they're going to get raided tomorrow, a week from tomorrow, a month from
tomorrow, or a year from tomorrow, but I play until not only the whistle blows, I hear the
echo of the whistle.
And I'll keep lobbing stuff over to the government.
I'll keep giving stuff to journalists.
I'll keep the web site updated.
I'll keep tweeting about it till this thing blows.
And what they don't understand is I won't stop.
Short sellers get an awful lot of flack in the press but I've found them pretty universally
to be staunch, prinicipled human beings who take on fights for the right reasons, mostly,
particularly in Marc's case, Marc goes after frauds not just companies that are overpriced.
This story is now playing out and Marc has promised me that when all is said and done
he and I can sit down again and go through the entire story, and what I know about it
it's an astonishing tale and Marc, as only Marc can, will tell the story in a full and
candid way so watch this space.