Xponential (XPOF) Crash
We’ve held one-third of a position in Xponential Fitness (XPOF) after having sold the first third last September for a 28% gain and the second third just last month for a 39% gain. Unfortunately, a short selling outfit going by the name of Fuzzy Panda Research came out with a report yesterday afternoon that has sent shares of XPOF through the floor today.
The link to that report is here.
As with most short reports this one sounds awful and makes a number of allegations that, if true, are damning for the company and for management. Big if. I expect management and some of the many analysts following XPOF will come to the company’s defense soon.
Also, as with most short reports it seems the selling is overdone. Only time will tell if this reaction is right or not, but it won’t change what we do in the short-term.
In my view we have been winding down our position anyway and this is just one more reason to move on. I don’t see much reason to think about the long game right now. The lawyers will jump on this right away and it’s going to be a drag. There are plenty of other opportunities out there. So XPOF is moving to sell today.
That all said, there is a decent chance shares of XPOF bounce back some before this is resolved one way or the other. So I wouldn’t argue with anybody that gradually winds down a remaining position. SELL
