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Share Name | Share Symbol | Market | Type |
---|---|---|---|
GFL Environmental Inc | NYSE:GFLU | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 70.30 | 0 | 01:00:00 |
Finds GFL has Obfuscated its Executives' Failures and Highly-Questionable Relationships, Including CEO Patrick Dovigi's Connections to What Observers Have Dubbed "Organized Crime"
Makes the Case that GFL is an Opaque, Unsustainable Roll-Up of Roll-Ups Failing to Grow Free Cash Flow and Failing to Provide an Accurate Depiction of its Leverage
Highlights Aggressive Accounting and Reporting of Revenue, EBITDA, Cash Flow, Adjusted EPS and Capex – Pointing to Financial Control Issues Overlooked During GFL's 2020 IPO led by Underwriters JPMorgan Chase and Goldman Sachs
Underscores Belief that H1 2020 Adjusted Free Cash Flow is 60% Lower Than it Appears on the Surface
Spruce Point – Which has a Proven Record of Exposing Governance and Financial Lapses at Canadian Companies and Industrial Roll-Ups – Estimates 100% Downside Risk to GFL's Shares
NEW YORK, Aug. 18, 2020 /CNW/ -- Spruce Point Capital Management, LLC ("Spruce Point"), a New York-based investment management firm that focuses on forensic research and short-selling, today issued a 107-page report entitled "Green for Life, Red for Losses" that outlines why shares of GFL Environmental Inc. (NYSE: GFL and GFLU and TSX: GFL) ("GFL" or the "Company") face 100% downside risk. The full report can be downloaded and viewed at www.sprucepointcap.com.
Based on an extensive forensic analysis and holistic review of GFL's accounting practices, financial controls and reporting, and corporate governance, Spruce Point believes that without access to new capital, the Company's shares are worthless and likely uninvestable for institutional investors. GFL's executives have not only fostered what appears to be an extremely aggressive and opaque business model, but they have either deliberately concealed, or inattentively omitted, past failures and questionable business connections. Our report's textual and visual evidence shows that Chief Executive Officer Patrick Dovigi has obfuscated his connections to what some observers have dubbed "organized crime" figures. We have also discovered that former General Counsel and current Senior Vice President Joy Grahek has failed to disclose her role advising Philip Services Corporation ("Philip Services"), which was a dual-listed roll-up of metal and industrial businesses that collapsed, was pursued by the Ontario Securities Commission, settled $80 million in shareholder claims, and was described as a "house of cards" and "one of the great unprosecuted frauds in Canadian business history."
Spruce Point's assessment of GFL's accounting and financials leads us to believe that the Company's true leverage is understated by an aggressive reporting of revenue and EBITDA. This is evidenced by the Company making financial restatements without explanation and by minimizing its material weaknesses of financial controls. We also believe GFL's depiction of its debt is understated by at least C$460 million. By our estimate, GFL's staggering C$5.6 billion in total debt and its ongoing financial losses make it reliant on new capital to sustain itself – never mind its prospective growth via an increasingly expensive acquisition strategy. Given that a meaningful portion of GFL's stock is pledged as collateral for loans, we contend there is a real risk that the stock may collapse and the Company's auditor may not sign-off on its financials after reviewing the evidence included in our report.
A high-level overview of some of the detailed findings in Spruce Point's 107-page report includes:
Please note that the items summarized in this press release are expanded upon and supported with data, public filings and records, and images in Spruce Point's full report. As a reminder, our full report, along with its investment disclaimers, can be downloaded and viewed at www.sprucepointcap.com.
Spruce Point Capital has a short position in securities tied to GFL and stands to benefit if its share price falls.
About Spruce Point
Spruce Point Capital Management, LLC is a forensic fundamentally-oriented investment manager that focuses on short-selling, value and special situation investment opportunities. Spruce Point Capital Management, LLC is a member of the Financial Industry Regulatory Authority, CRD number 288248.
Contact
To contact Spruce Point, please reach us online.
1 The Iron Warrior, "Leafy Thoughts: Earthworx Convicted and Fined for Providing Contaminated Soil to Sheep Farm," March 18, 2015. (link)
2 Securities and Exchange Commission filing (Amendment No 5. to Form S-1) dated July 21, 2006.
3 CNBC, "How the 'McMillions' scammers rigged McDonald's Monopoly game and stole $24 million," February 9, 2020. (link)
View original content:http://www.prnewswire.com/news-releases/spruce-point-capital-management-releases-report-and-strong-sell-research-opinion-on-gfl-environmental-inc-nysetsx-gfl-301113961.html
SOURCE Spruce Point Capital Management, LLC
Copyright 2020 Canada NewsWire
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