Soho House may take its members’ club private after short sellers doubled after the listed company declared it would not make a profit.
A review released Wednesday by Glasshouse Research compared Soho House to the now-defunct WeWork.
The report puts a zero price target on the New York-based company, which has more than 40 locations around the world.
Soho House said it “fundamentally rejects” the report, saying it “contains factual inaccuracies, analytical errors, and false and misleading statements.”
But the company told the Post it has “established an independent special committee of the board” to “evaluate certain strategic transactions” that could result in the company being taken private.
Despite this rebuttal, Glass House was not dissuaded from maintaining its bearish outlook on Soho House.
“We feel this company is not profitable in the future,” Glass House’s head of research told the Post on Friday.
“Those are just generalities. They didn’t list anything specific.”
After Glass House’s initial report, Soho House shares fell as much as 30% intraday, the biggest drop on record.
It rebounded on Friday, rising nearly 13% to close at $5.62. The stock remains down more than 16% since the beginning of the year.
“It may be proprietary and there may be a waiting list, but finance and accounting are our strong suit, and this company is rarely profitable,” said the company, who would only give their first names for security reasons. said a researcher at Glass House. post.
A representative for Soho House declined to comment beyond the statement shared with the Post on Friday.
A Soho House membership costs more than $6,000 a year for those 27 and older.
Members under the age of 27 will shell out about $2,600 to enjoy Soho House’s amenities, including a rooftop terrace and pool, restaurant, screening room, and an event list that offers networking opportunities.
GlassHouse suggested that Soho House would perform better if it functioned more like a country club.
Soho House operates entirely “on the other side of a private country club,” Wes said, adding that since going public in 2021, Soho House “needs to grow to satisfy investors.” ” he pointed out.
Country clubs, on the other hand, “allow high-net-worth high-income earners between the ages of 50 and 75 to get disposable income so they can focus on themselves and not have to worry about growing up.”
But Soho House “targets the 20-35 age group, the least affluent group,” Wes noted.
Additionally, Soho House, where aspiring members submit letters of recommendation and collect a $3,200 membership fee, is “not a family-friendly place.”
“Members are kicked out of the club when they turn 35,” Wes said. “A lot of things are working against the company, and it shows in the numbers.”
“At the end of the day, we think this company is similar to WeWork. It went public two years ago. [and] Abandoned by the average investor. ”
in GlassHouse reportThe company said Soho House’s schedule is “eerily similar to WeWork’s,” both of which held initial public offerings in 2021.
WeWork then filed a Chapter 11 lawsuit.
Soho House’s latest quarterly earnings report, released in November, missed Wall Street expectations.
Revenues were $301 million, 1.4% below analysts’ expectations, and earnings per share were -$0.22, also 147% below analysts’ expectations.
