Spruce Point releases e.l.f. Beauty, Inc. short report, sees potential 65% downside
Investing.com | Author Sam Boughedda
Published Nov 09, 2023 10:44AM ET
Spruce Point releases e.l.f. Beauty, Inc. (ELF) short report, sees potential 65% downside
Spruce Point Capital said in a report Thursday that it sees a potential 45% to 65% downside in e.l.f. Beauty, Inc. (NYSE:ELF) shares.
The firm said it has "grave concerns" about ELF's continuing brand equity due to its business relationship with marketing firm Movers+Shakers. They allege the marketing company has "ties to the notorious NXIVM cult."
ELF shares initially dipped following the report but are now up 2.4% from Wednesday's close, trading back above the $100 per share level
"Brand integrity is critically important to ELF and customer concentration presents a material risk," said Spruce Point.
The short-seller added that they believe that to salvage its brand equity, ELF may need to undertake a "new and expensive creative re-branding strategy to restore the public’s confidence."
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