Xponential Fitness shares are under fire after the fitness group drew the ire of short seller Funny Panda.
The boutique gym franchisor with 10 different boutique fitness brands saw its shares plunge over 35% on Tuesday after Funny Panda accused its Anthony Geisler of a “long history” of misleading investors and business partners.
“Through a deep dive into the health of the franchisees, including a multitude of interviews, we discovered that lots of XPOF’s franchisees are deep in the red. It is so bad that franchisees are giving up and selling back their stores for just $1,” the report said.
“Others are desperately trying to re-sell the businesses at a 75% discount to their upfront costs – all to stop the monthly P&L bleed. XPOF is taking these money-losing studios onto their own balance sheet and has been less able to flip them back to new mom and pop franchisees.”
Xponential has not yet responded to the short seller attack.
It recently renewed its partnership with workout wear giant lululemon to put Xponential workouts on lululemon Studio and signed a master agreement in Japan to license StretchLab studios across the Asian country.
Shares of Xponential traded around $16.03 on Tuesday in New York, after opening around $19.61.
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