Ariana Research
Long/short equity, deep value, special situations

Papa Murphy's Holdings Inc: Another Gift From The JOBS Act

Executive Summary

I recommend a SHORT position in Papa Murphy's Holdings Inc. (NASDAQ:FRSH) ("Papa Murphy", "FRSH", or the "Company") with a 12-18 month price target of $5.5 per share versus its current price of ~$9.75 (~45% implied gain). Papa Murphy is the largest franchisor and operator of "take n bake" pizzas, selling uncooked pizzas that customers cook at home. The Company is a recent sponsor-backed JOBS Act IPO, which is a proven hunting ground for shorts. FRSH went public in early May 2014, selling 5.8MM shares at $11 per share (low-end of the range). The ~$55MM in proceeds were used to pay down the Company's heavy debt load, while allowing for future capital markets access, i.e.

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