LSPD - Spruce Point Capital Opinion

Spruce Point Capital Management Announces Investment Opinion: Releases Report and Strong Sell Research Opinion on Lightspeed Commerce Inc.

Key points made in the report:

•Evidence shows that Lightspeed massively inflated its business pre-IPO, overstating its customer count by 85% and gross transaction volume (“GTV”) by 10% – a payment volume metric that a former employee described as “smoke and mirrors.”
•Evidence of declining organic growth and business deterioration through Lightspeed’s IPO, despite management’s claims that Average Revenue Per User (“ARPU”) is increasing.
•Recent acquisition spree has come at escalating costs with no clear path to profitability, while management pursues aggressive revenue reporting practices.
•Weak governance standards and worrisome auditor oversight by PwC under a concerning CFO, who was tied to a prior technology roll-up scandal.
•Lightspeed commands a premium multiple of 23x and 47x 2022E sales and gross profit despite its substandard financial reporting quality, and inability to generate positive EBITDA margins or cash flow 16 years after it was founded.

“Once investors come to grips with reality and reassess the quality of its business, Spruce Point expects Lightspeed’s share price to decline by 60%-80%.”

You can download the full report here:

MoneySpin (Long LSPD 5%)


Haven’t read through it yet but noticed this right at the beginning of the article. Wondering how much the bolded part plays into their “opinion”.

Spruce Point Capital Management, LLC (“Spruce Point” or “we” or “us”), a New York-based investment management firm that focuses on forensic research and short-selling, today issued a detailed report entitled “Putting the Brakes on Lightspeed” that outlines why we believe shares of Lightspeed Commerce Inc. (NYSE: LSPD / TSX: LSPD) (“Lightspeed” or the “Company”), face up to 60% to 80% long-term downside risk, or $22.50–$45.00 per share.


“As disclosed, Spruce Point has a short position in Lightspeed and owns derivative securities that stand to net benefit if its share price falls.”

I wouldn’t place too much credence in hit pieces from short sellers. I’d want to see more evidence from someone who doesn’t have a vested interest in the stock tanking.



FYI: I retrieved that quote from the bottom of the report at this page:…

You can’t take these reports at face value, that’s for sure, but they aren’t always wrong.

Almost a year ago to the day, Hindenburg Research took down Nikola. Stock only dropped 10-15% after the report release, but is now down 80% after the fraud was proven true. (

On the flip side, Bill Ackman tried to take down Herbalife for 5 years before giving up. He released similar style reports. (…)

Unfortunately, it’s tough to get to the absolute truth, but usually these reports aren’t TOTALLY false.


Also check their own Twitter feed. One tweet with a link to the report should be more than enough. I’ve seen more convincing smear campaigns in freshman high school. Hyperbolic trash.


I don’t care much about GTV. (Gross transaction volume of customers) I get it. There’ll maybe some small discrepancy. But What I care most is: Revenue growth rate, gross margin. Those are big numbers close to 100% to 200% per year. You can’t fabricate big numbers or it’ll be a big scam.

His main point is about pre-IPO, IPO numbers. That’s already passed. I am aware of Light speed was growing at a measly 30% per year but it accelerated recently due to acquisitions and payment adoption. You can’t fake those numbers also.

I hate to be scare into selling with a hit piece. I am not selling a single share and will wait it out: Be it right or be it wrong. If we are selling in blind belief of short seller report, we are doing them a flavor. I am skeptic of short sellers report until proven. A few screenshots from a old website is not a good DD. Information on website is public. If Light Speed had something to hide, why did they posted them on the website in the first place?

Here’s a great quote from financial Post and some short examples didn’t work out. Shorts are wrong most of time. Else how can their return be measly 10% to 20% per year?

“What’s the conclusion here? First, don’t panic. If you own a good company, ignore the short sellers, sit back or perhaps buy more from the nervous nellies. If you own a bad company (why?), your stock is likely going to decline whether the short sellers push it down the hill or not.”…


I don’t have time to study the kitchen sink attack this guy has thrown at LSPD as I’m in middle of project, and I really think it’s key to look at the attack not the man making the attack. That said, this guy’s reputation is suspect.

His calls on Seeking Alpha have often been flat out wrong,

Aerovironment, Dropbox, Planet Fitness to name a few.

And this seems like a legit complaint about his firm……

I personally took to sidelines on this to see if there’s anything to his claims. But I’ve gone to a lot of cash lately off the recent run-up and admittedly have twitchy trigger finger these days. And only had 4% or so position. But again, at first glance this feels like a hit piece. Just hard to spend the time needed to analyze each one of his claims.

His business model sure seems to be to go short, launch savage attack, collect profits, move on. My gut feeling is this will pass.



Sorry to clog board, this report strikes me as a joke.

I bought back and doubled my position.


Here’s a Bloomberg article on Spruce Point Capital :…

The article seems to give them some legitimacy.


Don’t want to clog the board but I had to point this out.
Leeps if you had bought Dexcom at the time of this article from Bloomberg, May of 2019 you would have paid about 125 per share, down, as the article points out, 20 points from March when the attack started. It never went much lower and today trades for 550 something.
So it looks like going against Spruce Point could pay big dividends. I can’t see this adding legitimacy.


Please stop the posts speculating on the short seller’s credibility or lack there of. This board is not about Spruce or their track record – good or bad. Unless you want to systematically address their report and the claims about Lightspeed the company, NO MORE POSTS on this thread!

For my part, I think the report is garbage, I think they point out harmless (though perhaps careless) reporting weirdnesses 5+ years before Lightspeed was even public, and I’m sure they’ve already closed their short and made their quick buck. I’ve taken advantage of the opportunity and bought a bunch more shares.

Asst Board Manager