Earnings Update: LNSR / OWLT / GENK / DAKT + SHCO
Going over earnings for the first four companies + a quick update for SHCO
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For today’s update, we’re going to
Briefly go over an update for Soho House (SHCO)
Then provide earnings updates for
LENSAR (LNSR)
Owlet (OWLT)
GEN Restaurant Group (GENK)
Daktronics (DAKT)
They will be presented in that order, should you choose to jump around. So, first off, let’s start with a brief update on Soho House (SHCO).
Soho House (SHCO)
At the end of 2024, we shared an arb trade with Soho House (below - free) and how we believed that the deal was borderline fake and it would not materialize.
We then sent a follow-up (below - free) on the trade to further prove that the numbers quite literally could not allow it to be taken private by a private equity firm, let alone a firm that was controlled by Ron Burkle.
We highlighted how the timing and vagueness of the announced deal seemed all too sketchy, and if it were “real”, more details would have been given out, which led us to believe that the deal was in fact, not likely to occur.
Now while lawyers will sue companies left and right for anything, we thought it was interesting that Bleichmar Fonti & Auld LLP (BFA) opened up an investigation into Soho House against its controlling stockholders (Ron Burkle, etc) for potentially breaking fiduciary duties.
BFA said in a statement that this offer arrangement
“raises serious concerns about conflicts of interest that may undermine the rights of minority stockholders.” The firm added that there is “no indication that the offer is conditioned on approval by a special committee or minority stockholders, and therefore minority stockholders may not have any say on whether to approve the ultimate transaction.”
While not critical to the thesis, it is reassuring that others have thought as we have when it comes to the validity of this deal. Something to note if you’re still long or short.
The company is down 20% since we first released the trade idea above.
Disclaimer: No position.
LENSAR (LNSR)
LENSAR (LNSR) has been a homerun thus far for us and any others that participated in going long this company. Since our release just two weeks ago (below), the company has increased in value by ~40% over that time (even after yesterday).
The rapid stock price appreciation was on the back of a stellar earnings report that was above and beyond what we had modeled in our initial report. But let’s go into the earnings and why we’re more bullish than prior to the release.