iFresh Inc. (NASDAQ:IFMK) owns 8 Chinese grocery stores on the East Coast and recently debuted on the Nasdaq via reverse merger with the SPAC ECAC. I have shopped at the stores in New York, and while they are well trafficked, they are essentially glorified corner stores: small and dingy with poor service.
Source: Yelp, 128 Mott, NY Location
40x ebitda versus peers ~8x
Per store valuation (they don't own real estate) of ~$40mm versus $2.5mm private market valuations and $1.5mm capital cost.
I think shares are worth ~$4.0, which at 8x ebtida, is still a generous $8mm per store.
Pump and dump:
No arms length institutional money came into the SPAC before its acquisition of IFMK. I believe insiders are orchestrating a pump and dump that will eventually leave the public owners holding the bag.
My broker shows tens of thousands of shares available to short at a modest borrow cost. I caution that while we are certain the valuation is unjustified by the fundamentals, insiders own most of the shares and can manipulate the stock in the short run.
Given the valuation, large insider ownership, and acquisition pipeline, I would not be surprised to see a large secondary or primary offering in the coming months.
From the company's investor presentation:
Disclosure: I am/we are short IFMK.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.