AppHarvest (APPH), mcap=$300m, price $2.97 vs $4.11

Short pitch:
– Structurally unprofitable greenhouse builder.
– Went public through a SPAC with very aggressive projections.
– These have already been cut in half but remain too aggressive.
– No scale benefits as unit economics of facilities don’t work.
– Cash burn over next two years equal to current market cap.
– Expected significant dilution from new capital required to fund operations.
– Eventual bankruptcy.

Valuation: Currently trades at 17x sales. Comparable commodity agriculture companies ($AVO) are at 1x revenues. At this multiple equity would be worthless.

Exp. gain: 100% on the short side to $0/share

Full APPH write-up (free guest account required):

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