Plenty of people would probably agree that LaCroix flavored seltzer is a fad – or, at the very least, the beneficiary of an unsustainable amount of hype. But what about the company behind the brand, a NASDAQ traded stock that’s seen share prices soar 65 percent in the past year? Are the owners content to ride the wave of LaCroix’s success or should they be concerned about troubled waters? One stock analyst group thinks the makers of LaCroix are a bubble that’s ready to burst.
National Beverage Corporation, the company behind LaCroix as well as two other cult brands Shasta and Faygo, saw its stock tumble as much as 16 percent yesterday after Glaucus Research Group – billed by Bloomberg as an “activist short seller,” meaning it actively looks to make money off companys it believes are overvalued – released a scathing 51-page report that probably had people at National Beverage shooting pamplemousse soda out their nose.
National Beverage “has become a faddish stock-market darling du jour,” the report said according to Bloomberg. “We believe that government regulatory and enforcement agencies should launch a full investigation of the company, its accounting and its practices, creating a reasonable probability of further downside.” In all, Glaucus said that shares, which were hanging around $47 before the report was released, could lose as much as two-thirds of their worth.
For its part, National Beverage called foul on the whole thing, suggesting that the report was intended to sink company shares for GRG’s short selling advantage. “We believe that this ‘report’ was intended to severely manipulate our stock price downward in support of short sellers, whose short position has dramatically increased over recent weeks,” the LaCroix maker said in a statement. “The allegations in this ‘report’ are untrue and are based on allegations made in a complaint for the purpose of extorting money from the company.” National Beverage also referred to the report as “false and defamatory,” and reassured investors of its “excellent earnings and cash flow.”
Luckily for most of us, National Beverage’s stock price isn’t really our concern – and none of this should have any real effect on whether or not you’ll be able to find LaCroix in your local grocery store. Still, is it possible LaCroix is trying to hide something? It’s always seemed a bit shady that the brand lists its flavors in French instead of English…