A correction to last night's note, we misinterpreted the S-1 filing. This was purely a registration of shares, no sale is happening yet. 50% of these shares came off of lockup on April 12th with the stock trading above $14 for 20 trading days within any 30 consecutive trading day period. All of the shares are being registered now, the other 50% will come off lockup 12 months after the deal closing in Feb 2021. The shares off lockup can now (when SEC finalizes registration) be sold via Form 4 during appropriate windows if desired. No change in float until a sale happens from these holders.
The market looks to be misinterpreting the filing as a liquidity event like we did. We see this as a buying opportunity on a big Tail Long idea.
We're hosting a deep dive Black Book on May 11th at 11am to review the bull case on PLBY and why it will be a $10bn company in 3-5 years. We hope you can tune in.
Previous Note from 4/28
PLBY filed an S-1 announcing that nearly all of the shares (21.9mm) owned by the collection of PE owner Rizvi and the SPAC PIPE investors and sponsors are being offered for sale. This deal will take the float from about a third of shares outstanding to about 95%. Some institutions were limited in investing in PLBY due to the float dynamics. Now real growth investors can step in and take advantage of what we see as a huge Tail investment opportunity. The stock has already doubled since we went long a few weeks ago, and surely the market will take this sale as negative at first with SPAC participants cashing in. But such a sale was expected, Rizvi is a private equity entity, not a public market growth investor. Holding PLBY for the long term growth opportunity was most likely never the plan when they decided to take it public again. We’ve made allusions to our RH call a few times with this PLBY Long. Recall that the main private equity investor in RH, Catterton Partners (which we consider one of the best consumer PE firms), sold out of its RH stake in 2013 after the IPO with the stock in the 60s. Two years later RH hit $105, and currently trades at $720. Catterton simply had to take its gains and move on to the next PE deal. Even after the huge run in the stock we continue to think it has a lot of runway over the long term as PLBY proves to be one of the most valuable global lifestyle brands.
