Dollarama shares drop after short-seller says ’broken growth story’ could tumble 40%
Svea Herbst-Bayliss, 31 October 2020
BOSTON — Spruce Point Capital Management, which focuses on in-depth research of companies’ vulnerabilities, sees room for Dollarama Inc’s stock price to tumble roughly 40 per cent after the Canadian retailer raised prices and fewer customers are shopping at its stores. “Spruce Point believes Dollarama is a ‘strong sell’ with an approximately 40 per cent downside risk,” Ben Axler, who runs the hedge fund, said at an investment conference on Tuesday, according to a person familiar with his presentation. He examined the company’s products, pricing and what he called “troublesome management and governance red flags.”
