- GNC has been rather quite recently in terms of news.
- However, short interest continues to fall at a reasonably consistent (and largely uninterrupted) pace.
- The full closing of the joint venture appears to be delayed well into the current year.
- We maintain our valuation range and recommend investors focus on the long-term fundamental potential rather than short-term short squeeze-driven arguments.
GNC (GNC) has been unusually quiet since December as the company has not provided any significant new information for investors on its fourth-quarter results or other operational issues since the third-quarter report. The company did report last week receipt of the final tranche of funds from the preferred stock transaction, as expected, as well as a rather delayed date for its fourth-quarter earnings call, but otherwise news has been unusually thin. In the context of a relative information vacuum, the share price has been essentially flat for more than a month after rebounding from year-end lows with much of the rest of the market.
In the meantime, we’ve continued to refine our projections for the company although these have only served to narrow our forward projections and inform the relative probabilities of specific outcomes. Indeed, our view remains that the company is somewhat undervalued with an intermediate to long-term valuation range between $3.25 and $6.50 per share, pending additional information in the fourth-quarter results.
