FleetCor – Citron believes FTC Lawsuit is Imminent

“Let me be clear.  My bet would be that FleetCor is subject to an FTC order either through consent or litigation where FleetCor must pay a significant amount of money and be subject to a consent decree that alters the company’s billing and marketing practices.”

– Former Director of the FTC’s Bureau of Consumer Protection

FleetCor (FLT), the nation’s largest operator of fleet cards, has over the course of 10 years skillfully built a business based on deceiving small and medium-sized businesses into paying excessive and erroneous fees.  This cannot be disputed.  What can be disputed is the legality of the business.

The FleetCor business was best described in a recent Bloomberg article:

“Consumer advocates and some former FleetCor executives say the firm is an embodiment of bare-knuckles, winner-takes-all capitalism, and takes advantage of smaller fish who have little recourse but to complain to regulators or undertake costly litigation.”


All that is about to change as Citron has good reason to believe that the FTC is about to file a formal lawsuit against FleetCor for multiple violations and force the company to change its advertising/marketing and billing practices.

After extensive due diligence and many conversations with former senior FTC officials including a Director of the FTC’s Bureau of Consumer Protection, an Executive Director at the FTC who spent more than 25 years with the agency, and an Attorney in the Division of Enforcement at the FTC’s Bureau of Consumer Protection, Citron believes we could see a formal lawsuit from the FTC against FleetCor as early as the first week of January.

Citron Research Presents Peloton – Investors Pedaling Themselves into Frenzy

2020 Target Price – $5

Before we even start with the narrative, we are obligated to show the only chart that matters.

Unless Peloton invents a piece of equipment that works out for you – this is going to $5 (which is still a $1BN-$2BN market cap).

Looking back over the past 5 years, one of the biggest trading regrets held by Citron was not being more aggressive and staying short GoPro from the article we published in late 2014.


While Wall St was giddy over the new “must-have product”, Citron maintained that GoPro sold a consumer electronics device that would eventually show decelerating growth as competition came into the marketplace.  At the end of the day no matter how much lipstick Wall St put on this company, it was just a camera – the rest is history.

Disclosure:  Yes, we own a Peloton bike just like we owned a GoPro, Fitbit, Blackberry, and even an ab roller… but who cares.

In this report, we won’t restate the obvious points that have been made by numerous short-sellers regarding Peloton’s future.  These include (but are by no means limited to):

  • Obvious comparisons to GoPro and Fitbit
  • History of fitness products in the public marketplace
  • Dependence on the spin class trend and fitness fads
  • A marketing plan that shows a niche audience
  • The disingenuous rhetoric of management on the value proposition of Peloton ownership vs. a gym membership

Instead, we will focus on clear flaws in the Peloton business model and a management team that has been overly promotional while trying to justify an unrealistic valuation that is disconnected from all reality in the post-WeWork economy.  Combine this with a share structure that is designed to make long term shareholders sweat and we have all the makings of a compelling short.

Once you get past management’s grandiose talks, you have a company that sells hardware and software.



Wayfair Would Have Had to Pull Its IPO in 2019


Recent Earnings Debacle Have Citron Lowering PT to $45

In a new market environment where investors have little appetite for structurally money-losing businesses without a clear path to profitability, Citron believes that Wayfair would not be able to complete an IPO in 2019.

After eight years operating as a public company, Wayfair has never been further from profitability as its most recent quarterly earnings release reflects the Company’s largest quarterly loss while revenue growth is decelerating.

*In business for 17 years and $W loses $654 million in the first 3 quarters of 2019.  (How is this an $8 billion company?)

One quarter after the resignation of its COO and CTO, Wayfair reported another bad quarter, this time blaming it on tariffs.  Why not?… if things go bad just blame it on Trump.

Read the full Report here.

Bausch Health – The Textbook Turnaround

Giving Credit Where Credit is Due – Target Price $40

Published October 15th, 2019 | Citron Research

It was four years ago this month that Citron wrote a series of articles that were instrumental in the unraveling of the Pearson-era Valeant business model.  In quick manner the stock has declined by 90% from its highs as the scandals unraveled and many questioned the sustainability of the equity.

Four years later BHC still trades with a “Valeant discount” despite new management’s 180-degree turn of corporate culture.  To add to the artificially depressed share price, Bausch has been unjustly grouped with Specialty Pharma despite having ZERO opioid exposure and minimal exposure to the generics market.

Citron believes this quarter (reporting on Nov 4) will force Wall St. to finally take notice of BHC’s “pivot to offense”.  Once this is considered along with the acknowledgment of the recent M&A spree in pharma, even David Maris will have to admit that BHC is on its way to $40.


It Doesn’t Matter Until It Matters

With new market realities, Wayfair should quickly trade down to $70.

Anyone who follows Citron knows that we have been bearish on Wayfair for YEARS as we never thought selling furniture online with free shipping would be a profitable business.  We were right and wrong at the same time.

Right – Wayfair has never been able to make the business profitable for 8 years as Wayfair has generated losses vs. Wall Street expectations of profitability.

Wrong – The stock price continued to go higher as Wall Street has ignored a lack of profitability over the years and instead stayed focused on top-line growth.

Below is an infographic of management’s elusive promise of profits over the years.


In an environment best represented by Wayfair’s unjustifiable stock price, bankers rushed to market a bevy of high growth unprofitable companies, most with more compelling business models than Wayfair.

With Wayfair’s enterprise value at close to $11 billion ask yourself how it would look as an IPO today with:

  • $1 billion of historic losses
  • Upper management turnover (recent departure of COO and CTO)
  • Decelerating growth
  • Sizable insider sales in last financing round
  • Failed international expansion
  • Dependence on products “made in china”

It is the opinion of Citron that as of TODAY this IPO would have to get pulled.  To illustrate how crazy this is, since the LYFT IPO (start of the recent bubble) insiders of Wayfair have sold over $180 million of stock.

In this new reality, we expect Wayfair to trade back to its 5-year average stock price of $68-$69 FAST.

Cautious Investing to All


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