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An activist short-seller slammed Planet Fitness and the stock is tanking

Mar 9, 2016, 03:11 IST

Planet Fitness

Activist short seller Ben Axler, the founder of long/short equity hedge fund Spruce Point Capital Management, is short Planet Fitness.

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The fitness club chain's stock fell more than 10% in the after-hours session and was last trading around $13.20 per share.

Speaking at the Harbor Investment Conference, Axler said he thinks the company has a "questionable business strategy."

He said the company has "unachievable revenue goals," saying the company wants to run 4,000 clubs with a membership base of 6,500 per club.

He also called the company a "glorified equipment reseller." He said that the company has unsustainable margins, no barriers to entry (a lot of "copy cats"), and rapidly rising competition in the fitness space.

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On the accounting side, Axler said he thinks that the company has some issues with its equipment purchases/resales.

Axler has an $8 price target for the company's stock.

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