https://mailchi.mp/ab1dd7303e43/blue-orca-is-short-sy-nasdaq-5206537
We are short EquipmentShare.com Inc. (NASDAQ: EQPT) (“EquipmentShare” or the “Company”) because we believe that undisclosed promises to backstop its equipment investment program create billions of dollars in hidden liabilities that could easily impair its balance sheet and bonds.
EquipmentShare IPO’d in January ‘26 at a premium to peers because investors believe that its asset-lite model fuels growth without the capital requirements that generally burden competitors in the equipment rental industry. The Company tells investors that its OWN Program represents a purportedly novel financing arrangement in which EquipmentShare leverages the balance sheet of third-party investors like local dentists to fund the expansion of its rental fleet.
In practice, we believe that resellers/ capital funnels closely connected to the Company’s co-founders Jabbok and William Schlacks (i.e., EZ Equipment Zone, LLC & Armada Fleet Management, LLC [1]) entice investors to participate in the OWN Program by promising that EquipmentShare will backstop the equipment investment with a first-loss guarantee and a murky promise that EquipmentShare will repurchase the equipment at the end of the investment term. We believe that these promises create massive hidden liabilities that could easily impair the interests of not only shareholders but also bond holders.
We also question how much of the OWN Program is arms-length, third-party capital. On its Q2 ’26 earnings call, EquipmentShare told investors that its co-founders enrolled less than $1 million of equipment in the OWN Program. Yet we found an entity which used to be called Schlacks Rentals (now called the Premiere Group) which recently boasted on its website that it owned over $440 million of equipment. A former Company executive told us that this equipment is likely enrolled in the OWN Program. [2] To us, this not only makes a mockery of SEC disclosure rules but also raises the question as to whether the reported demand from outside investors for the OWN Program is real. Lamenting the self-dealing of the founders, a former EquipmentShare executive we interviewed described it best when he said EquipmentShare “is a beautiful financial ecosystem that furthers their enrichment.”
Critically for investors, we think EquipmentShare inappropriately inflates the reported Equipment Rental Segment Adj. EBITDA (“ERS Adj. EBITDA”) and associated margins by excluding OWN Program distributions to the investors who purchased the equipment. In short, we think EquipmentShare is far less profitable than investors and bond holders are led to believe.
Starting in August ‘26, the Company’s biggest third-party investor, Romulus Capital, is now unlocked and has already started selling. This same investor sued EquipmentShare in 2025, alleging rotten connected-party dealings, an unusually aggressive action for a major shareholder before an IPO. We surmise that a shareholder angry enough to sue the Company will likely aggressively dump shares when given the opportunity. This already appears to be happening, as Romulus has started selling. Considering the co-founders’ massive share pledge, we believe that any widespread selling from pre-IPO investors could devastate the Company’s stock.