Victoria’s Secret & Co. (VSCO) short, mcap=$2.3bn, price $28.21 vs $42.00

Short pitch:
– Hasn’t sold off with other retailers despite various indications that sales and traffic are down and getting worse.
– Trades at $4bn EV vs $1.1bn pre-covid valuation.
– Analyst estimates are overly optimistic.
– Ongoing structural brand deterioration due to missteps in brand management.

– Pre-covid Sycamore Partners intended to acquire a majority stake in VSCO at EV=$1.1bn vs $4bn EV today.
– The buyer later walked away from the transaction.
– At a $1.1bn EV, it is a $7 stock.

Exp. gain: 85% to $7/share

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

Leave a Comment