Please join us for a Flash Call on Lululemon (LULU) tomorrow, June 25th, at 11am ET. The purpose of the call is to review why we turned positive and added LULU to our Best Ideas list as a Long following the company’s latest disappointing quarter.
Simply put, our view is that things are so bad, that it’s good – and the subsequent activism by Chip Wilson supports that case. Don’t get us wrong, Wilson is as much a liability now as he ever has been. But, we think that the path he’s marching down leads this company, and the stock, down an array of very defined outcomes - most of which are positive for LULU shareholders. Our math suggests at least 3-to-1 upside/downside.
We’ll be exploring the following…
- A key focus for us is the decision tree facing this company based on Wilson’s effort to regain control of the Board. If he wins, certain things will happen. If he loses, there’s a completely different set of outcomes. We look at all outcomes that have a remote chance of happening and look at likely ensuing stock price.
- What obstacles does Wilson face in going activist on the company that he created? There are many. We’ve done the deep dive on the Board history and relationships.
- We’ll analyze the governance factors surrounding anyone who wants to influence this Board.
- What factors could lead to a take-out? Who could absorb a deal this big, and more importantly, who wants to?
- What’s the worst case scenario, and what would need to happen for us to back off of our thesis?
- Yes, there’s this thing called Selling Yoga Apparel. That matters. We’ll outline what fix we think the company needs in order to jump start its financial model.
Toll Free Number:
Direct Dial Number:
Conference Code: 619868#
Materials: CLICK HERE