Sunday, March 12, 2017 11:55:34 AM
"Conclusion
This is a case of private equity doing what private equity is supposed to do. They bought into a growing company, helped it grow rapidly over five years, figured out a way to extract as much revenue as possible from franchisees, and then when the time was right, decided to take the company public and exit their investment for the highest price possible.
The structure of the deal, with the tax receivable agreement, the controlled release of shares to the public, the special dividend, and the way they account for equipment revenue, seem like a carefully planned strategy by clearly some sophisticated investors. It's almost a textbook example on maximizing value extraction. With an understanding of how brilliantly TSG has managed this exit, I would probably expect another quarter or two of aggressive growth targets and maximizing non-recurring income which most people view as real income, as they push to keep the growth story momentum going before they unload their final tranche of equity onto the public.
But my guess is that once they are out of the loop, we will see some serious moderation in growth.
Based on using what we feel are very generous assumptions, and correctly understanding that the large part of their income which is non-recurring should not be capitalized or valued with a multiple, results in a value for the stock of $9.40 per share versus the $21.70 where it trades at today. Finally, just on pure principle, I would never own a company that was subject to a tax receivable agreement, but assuming you are okay with it, the valuation is still extremely high. Buy a gym membership, it's a good deal - but run away from the stock.
Disclosure: I am/we are short PLNT."
Recent PLNT News
- Planet Fitness Inspires Nearly 3 Million High School Students to Prioritize Their Health with Annual High School Summer Pass™ Program • GlobeNewswire Inc. • 09/17/2024 12:30:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/16/2024 08:09:21 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 08/14/2024 11:11:21 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/08/2024 08:27:26 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 08/07/2024 08:07:27 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/06/2024 10:30:30 AM
- Planet Fitness, Inc. Announces Second Quarter 2024 Results • PR Newswire (US) • 08/06/2024 10:30:00 AM
- US Index Futures Rise After Market Sell-off, Oil Prices Trim Losses • IH Market News • 08/06/2024 09:49:06 AM
- PLANET FITNESS, INC. TO REPORT SECOND QUARTER 2024 RESULTS ON AUGUST 6, 2024 • PR Newswire (US) • 07/23/2024 08:05:00 PM
- Planet Fitness, Inc. Announces $280 Million Accelerated Share Repurchase Program • PR Newswire (US) • 06/13/2024 11:05:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 06/13/2024 10:48:57 AM
- Form 3 - Initial statement of beneficial ownership of securities • Edgar (US Regulatory) • 06/12/2024 10:03:13 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/12/2024 10:02:50 PM
- Planet Fitness, Inc. Completes Refinancing Transaction • PR Newswire (US) • 06/12/2024 08:05:00 PM
- Planet Fitness Prices $800 Million Securitized Financing Facility • PR Newswire (US) • 06/07/2024 12:05:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 06/07/2024 11:59:57 AM
- Planet Fitness, Inc. Announces Proposed Refinancing Transaction • PR Newswire (US) • 05/29/2024 08:35:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/29/2024 08:33:42 PM
- Planet Fitness’ High School Summer Pass™ Returns; Teens Work Out Free June 1 – August 31 • GlobeNewswire Inc. • 05/21/2024 11:00:00 AM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 05/09/2024 08:06:30 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/09/2024 10:30:57 AM
- Planet Fitness, Inc. Announces First Quarter 2024 Results • PR Newswire (US) • 05/09/2024 10:30:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/06/2024 08:05:50 PM
- PLANET FITNESS, INC. TO REPORT FIRST QUARTER 2024 RESULTS ON MAY 9, 2024 • PR Newswire (US) • 04/25/2024 12:00:00 PM
- Planet Fitness Names Colleen Keating Chief Executive Officer • PR Newswire (US) • 04/16/2024 12:45:00 PM
VHAI - Vocodia Partners with Leading Political Super PACs to Revolutionize Fundraising Efforts • VHAI • Sep 19, 2024 11:48 AM
Dear Cashmere Group Holding Co. AKA Swifty Global Signs Binding Letter of Intent to be Acquired by Signing Day Sports • DRCR • Sep 19, 2024 10:26 AM
HealthLynked Launches Virtual Urgent Care Through Partnership with Lyric Health. • HLYK • Sep 19, 2024 8:00 AM
Element79 Gold Corp. Appoints Kevin Arias as Advisor to the Board of Directors, Strengthening Strategic Leadership • ELMGF • Sep 18, 2024 10:29 AM
Mawson Finland Limited Further Expands the Known Mineralized Zones at Rajapalot: Palokas step-out drills 7 metres @ 9.1 g/t gold & 706 ppm cobalt • MFL • Sep 17, 2024 9:02 AM
PickleJar Announces Integration With OptCulture to Deliver Holistic Fan Experiences at Venue Point of Sale • PKLE • Sep 17, 2024 8:00 AM