Thread by @HindenburgRes

New from us: GrowGeneration—This Latest Euphoric Retail Stock Has The Brightest Management Red Flags We’ve Ever Seen—70%+ Downside

hindenburgresearch.com/growgeneration/

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's management team is one of the most questionable we have ever seen at a public company. Top executives have extensive ties to alleged pump & dump schemes, organized crime and various acts of fraud.

President & Co-Founder Michael Salaman was alleged by the FTC to have engaged in scheme to sell credit card information without authorization.

He has an extensive career in penny stock failures alongside his father, Abraham Salaman, a twice-convicted fraudster w/ mob ties

At Michael Salaman’s last public company, Skinny Nutritional Corp, he selected a CFO who had previously spent 3 years in prison for bank fraud.

A key shareholder/landlord, known as “the Godfather of payday lending” was later sentenced to 14 years in prison.

All the Skinny Nutritional Corp directors resigned amidst securities fraud allegations and complaints that management failed to provide the board with basic financial information. The company eventually filed for bankruptcy.

CEO Darren Lampert is a lawyer turned penny stock broker. Lampert spent the former half of his career defending several boiler rooms & individuals with ties to the mob & the second half operating at brokerages, including some that came under scrutiny from regulators.

For example, CEO Lampert has personal and business ties to Robert Cattogio, who was sentenced to 12 years in prison in 2001 in what the government at the time dubbed “the largest securities fraud ever prosecuted”.

CEO Lampert later worked at several questionable trading operations including Hold Brothers (expelled by FINRA) and Incremental Capital (founders were arrested for insider trading).

CFO Monty Lamirato has previously been sanctioned by the SEC over allegations of professional misconduct. He had a history of working for failing penny stock companies prior to joining GrowGen

sec.gov/news/digest/19…

's auditor Plante & Moran was reported to have missed major fraud at one of its key clients.

Its latest PCAOB inspection report detailed a laundry list of audit failures and some of the firm’s clients consist of failing OTC companies

Purely on a fundamental basis, we see 60% downside to shares of after its recent impressive stock run and its strong quarterly sales numbers.

The company trades at an extremely rich 60.5x adjusted estimated 2020 EBITDA and over 6.1x estimated 2020 sales.

management seems to agree with our valuation assessment. The company completed a financing at $5.60 per share, reflecting a 70% discount to current levels.

Insiders and key holders have sold stock aggressively this year in the $4-$8 range

ir.growgeneration.com/news-events/pr…

Discounted for management's track record, we see downside of 70%+ at , and believe the stock is uninvestable

hindenburgresearch.com/growgeneration/