Pluralsight, Inc. (PS) – Closing Short Position – up 17% vs. S&P up 18%
We put Pluralsight, Inc. (PS: $20/share) in the Danger Zone on March 2, 2020. At the time, PS received an Unattractive rating. Our report focused on Pluralsight’s misleading GAAP and non-GAAP metrics, rising competition, negative profitability, lack of economies of scale, and the high expectations baked into Pluralsight’s stock price.
This report, along with all of our research, utilizes our superior data to get the truth about earnings, as shown in the Journal of Financial Economics paper, “Core Earnings: New Data and Evidence.”
During the 287-day holding period, PS outperformed as a short position, rising 17% compared to an 18% gain for the S&P 500.
While the firm’s fundamentals remain poor, with negative economic earnings and return on invested capital (ROIC), the Wall Street Journal reports private-equity firm Vista Equity Partners has agreed to acquire Pluralsight for $20.26/share. As a result, we are closing this short position.
Figure 1: PS vs. S&P 500 – Price Return – Successful Short Call
Sources: New Constructs, LLC and company filings
Note: Gain/Decline performance analysis excludes transaction costs and dividends.
This article originally published on December 14, 2020.
Disclosure: David Trainer, Kyle Guske II, and Matt Shuler receive no compensation to write about any specific stock, style, or theme.
 Harvard Business School features the powerful impact of our research automation technology in the case New Constructs: Disrupting Fundamental Analysis with Robo-Analysts.
 Our Core Earnings are a superior measure of profits, as demonstrated in Core Earnings: New Data & Evidence a paper by professors at Harvard Business School (HBS) & MIT Sloan. Recently accepted by the Journal of Financial Economics, the paper proves that our data is superior to all the metrics offered by S&P Global (SPGI).