Steamboat Capital
Hedge fund manager, long/short equity, energy

LifeVantage: Deteriorating Performance And Red Flags Signal Significant Short Opportunity

LifeVantage (NASDAQ:LFVN) Short Investment Thesis

Security: LifeVantage common stock short

Date: 12/2/13

Price: $1.92

Timing: 12 months

Catalyst: Increased investor scrutiny; earnings

Summary Thesis:

    Deceptive "multi-level-marketing" business that derives nearly 80% of its revenues from one product-an overpriced and easily replicated vitamin supplement Aggressive marketing strategy centered around misleading scientific studies co-authored by the company's largest shareholder-Dr. Joe McCord-who has steadily been selling his shares Weak and deteriorating business fundamentals - unlike some other MLM businesses, LifeVantage's distributor and revenue growth has stagnated Recently completed debt-financed tender offer allowed insiders and early investors to dispose of their LifeVantage holdings Management's desperation to maintain stock price is evident as the company issues overly promotional press releases and other communications ...
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