Xponential Stock Sinks After Scathing Report

A short-sale report claims most of Xponential’s ten boutique fitness brands are failing and made allegations of executive misconduct

Shares of Xponential Fitness (NYSE: XPOF) plunged 37% Tuesday after Fuzzy Panda Research released a startling report that calls the fitness company an “abusive franchisor,” warning that Xponential is a “house of cards” about to tumble.

From its Twitter page, Fuzzy Panda Research describes itself as “short-only” and works to “expose stock promotions, frauds, BK’s.”

Upon Fuzzy Panda’s report, one Baird analyst maintained a neutral rating of Xponential but lowered the price target of the stock to $23 from $36, according to BestStocks.

The report accuses Xponential founder and CEO Anthony Geisler of misleading partners and alleges that many of Xponential’s ten boutique fitness brands are failing.  

Fuzzy Panda Research also makes allegations of Geisler’s past — ones that read straight out of a Hollywood movie script, including Bangkok boiler rooms, arrest records, condoning a culture of sexual harassment and “massive” insider stock sales, alleging that Geisler and “sophisticated insiders” sold north of $167 million in Xponential stock this year.

Geisler recently sang the praises of the fitness company he founded during TD Cowen’s 7th Annual Future of the Consumer Conference, adding that Xponential’s decisions during the pandemic paid off considerably. 

“While others were shrinking, we were growing,” Geisler said at the conference, noting the resiliency of Xponential’s customers. 

While Xponential has long touted its ability to have sailed through the pandemic with ease, Fuzzy Panda refutes Geisler’s glowing business reports and says it discovered over 30 permanently closed stores and alleges that the fitness franchisor is likely “violating their debt covenants.” 

Fuzzy Panda also makes an allegation that eight of the ten Xponential brands are losing money monthly and that 50% of studios never make a positive financial return.

The scathing report has prompted numerous law firms, including Block & Leviton, to announce investigations into the boutique fitness franchisor for possibly committing securities law violations.

Xponential Fitness didn’t immediately respond to Athletech News’ request for comment.

This is a developing story. Athletech News will update as additional information becomes available.