We Still Call a Spade a Spade: Why We Believe National Beverage Corp (FIZZ) Might be a Better Short Than Ever

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  • The recent frenzy in high short interest stocks, most notably GameStop and AMC, has lifted several other stocks and created an attractive short opportunity in FIZZ.
  • We heard rumors that brokers are circulating positive notes about FIZZ to hedge funds. We believe a lot of the recent buyers do not really understand what they own.
  • The problems at FIZZ start with horrific corporate governance, Chairman and CEO Nick Caporella has been on the board for 36 years, his son Joseph for 34. No one new has joined the board in 11 years, and no one is under 60.
  • The integrity issues at the company show on many fronts like misleading marketing, alleged dealings with undisclosed related parties und undisclosed insider enrichment. Most shocking to us are sexual harassment allegations against FIZZ’s 82-year-old Chairman.
  • The company has a history of alleged financial manipulation and our research substantiates the suspicion.
  • The core business is under pressure, sales have flatlined and increasing competition will translate to FIZZ’s declining profits.
  • The main product La Croix is in our opinion overprized and a fad; Competitors with deeper pockets (Pepsi & Coke) are gaining market share.
  • Newly introduced brands and products have performed sub-par. FIZZ does not deserve a premium valuation of a growth company.

 

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Grizzly Research LLC is focused on producing differentiated research insights on publicly traded companies through in-depth due diligence.