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Spruce Point's Ben Axler Going Short On Planet Fitness, Shares Down

Spruce Point's Ben Axler Going Short On Planet Fitness, Shares Down

Shares of Planet Fitness Inc (NYSE: PLNT) have tanked 7 percent after short seller Ben Axler of activist investment hedge fund Spruce Point Capital Management said he is going short on the discount gym chain.

Axler, speaking at the Harbor Investment Conference, said he thinks the company has a "questionable business strategy," according to a report on Business Insider.

Axler said the company has "unachievable revenue goals," and it has unsustainable margins, no barriers to entry (a lot of "copy cats"), and rapidly rising competition in the fitness space, the report added.

Related Link: Planet Fitness CEO Thinks His Company Can Win From Sports Authority's Bankruptcy

Founded in 1992 in Dover, N.H., Planet Fitness is one of the largest and fastest-growing franchisors and operators of fitness centers in the United States by number of members and locations. It has more than 1,000 locations in 47 states and the District of Columbia, Puerto Rico, Canada, and the Dominican Republic.

For the full year 2015, profit was $38.1 million, up from $37.3 million last year. On a Pro forma basis, profit rose 26.2 percent to $53.2 million, or $0.54 a share. Total revenue increased 18.1 percent to $330.5 million. System-wide same store sales improved 7.7 percent. The company opened 209 new stores during the year.

Shares were down 7.8 percent at $13.65.


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