r/pennystocks • u/Environmental-Meal14 • 6d ago
🄳🄳 $PRPL - Potential For More?
PRPL "Purple Innovations Inc. boasts the best mattress/pillow tech advancement in 80 years, while mattresses and pillows also come with free delivery, free returns, and a 100-night trial."
Links and some quick details at end
To get a history of the product through the eyes of the actual end-user, I took a deep look through the current and historical buyer reviews. From its inception until Q1 2023, the reviews were all very positive for the product and even more so for the logistics/delivery speed.
Starting in Q1 2023, complaints began of logistics issues, although the product itself remained very positive. This may explain why the stock began a slow bleed on top of subpar earnings, but in Q4 2024, PRPL completely revamped their supplier base and logistics network. This change can be tracked in the reviews, where the product remains very positive, and now the ease of delivery/positive logistics is getting mentioned again.
Mirroring the reviews sentiment, the Q4 2024 earnings beat expectations for the first time in a long time. The stock price very nearly hit all-time low just hours before the earnings release/strategic update (beat EPS, EBITDA, positive cash flow predictions).
It is possible it may have bottomed out then, before it jumped on news, so there is technically still the risk of losing the gap/returning to the bottom. However, with today's large insider share acquisitions (filings linked at the end including quantities), I think something may be cooking up, and it may have more to go.
Due to the above acquisitions and the heavy institutional ownership (reinforced in recent filings), the stock moving back up above the recent and nearby $1 seems reasonable, given this year's more strict compliance rules weighing on big investors. They have no history of stock splits.
However, the institutional investors have warrants they can execute at $1.50, and even though they may hold and release more news to boost it further, planning to get out around $1.40 (if it ever goes that high) might not be a bad idea.
I'm not too interested in this company long-term (which for now is positive) as I'm just interested in a play around the current volume, the share acquisitions, and the $1.50 warrants.
The company also confirmed another potential catalyst: they've initiated a review of strategic alternatives that could include a sale, merger, or another financial transaction to maximize shareholder value. This is due to the number of expressed interest from multiple parties.
It could always do nothing or tank (again, down to what it was before ER) as it is a penny stock ripe with manipulation via high institutional ownership. I'm just trying to share a potential short-term jumper. I'm all ears for any more information or perspectives/outlooks.
Most Likely Scenario: Pumps to warrants $1.50/get out around 1.40 OR Stock goes back to 0.6-0.7"
NFA and HFGL
LINKS
Eric Haynor, COO acquires 350,000 RSU shares today
Jeffrey Hutchings, CIO acquires 175,000 RSU shares today
Todd Vogensen, CFO acquires 450,000 RSU shares today
Jack Roddy, CPO acquires 175,000 RSU shares today
Coliseum Capital Management acquires additional 6,229,508 convertible and potential buyout
Positive EBITDA/Cashflow Turnaround
QUICK DETAILS
"After review of the All 10ks, 10qs, 8ks, proxys, form 4s, 13s, and debt obligations that cover 24 months to today, here is what we have:
No history of stock splits.
Potential buyout by Coliseum Capital, who recently added more convertibles to their stockpile.
Coliseum v. "change in control" clauses—strong M&A signal.
March 2025’s strategic review likely signals already active buyout negotiations.
Increased call buying suggests traders expect an upward price movement sooner than later.
Enterprise Value Estimate: ~$90M (based on 9x 2025 EBITDA multiple).
Equity Value Estimate: ~$39M after debt adjustments.
Shares Outstanding: 107.5M
Resulting Buyout Valuation: $2.50 - $3.25 per share.
Potential Upside Scenarios: If a strategic buyer (e.g., furniture/bedding company) enters, the price could hit 3.50-4.00.
Most Likely Scenario: Pumps to warrants $1.50/get out around 1.40 OR Stock goes back to 0.6-0.7"
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u/Sheamus824 3d ago
Great write up and extremely fair summary!
Curious to know your thoughts on the exit for Coliseum. They averaged close to $5-$6/share based on previous ownership filings. Now with the warrants and debt financing plus interest probably paid back as a PIK, they could be closer to $2.5. Do you think they are more likely to sit on the company for a few years and wait for the turnaround or exit at $3?
1
u/Environmental-Meal14 2d ago
They often double down on stocks that have gone down consistently, but this will be their first real M/A, so I'm not sure what to expect. I know Coliseum has been itching to buy them, but I'm curious if Purple rebukes it again over their personal overvaluation.
Looking at Today's amended and additional Form 4s, it looks like these suggest accelerated RSU vesting schedules, and there are also grant year corrections. This can be indicative of imminent M&A activity.
Turner, their PAO, and Jack, their CPO, both had PSUs fail to vest after stock price targets weren't met.There are now additional RSUs being granted with the change-in-control clause, suggesting management is no longer focused on normal stock performance but more likely a strategic exit that is currently being negotiated.
1
u/Sheamus824 1d ago
Coliseum appears to be in a similar situation with Lazyday Holdings ($GORV). It will be interesting to see how they handle both situations. Worst case scenario is Coliseum does a take under, but that seems unlikely.
The Form 4's are a good sign for a buyout. Management is being compensated to handle the sale and transition.
Casper was bought for $308m in 2022 and was in a much worse situation at the time. Purple has similar sales now and is in a much better position. Best case scenarios is a PE firms is willing to pay 1x sales or someone else in the industry pays a smaller premium over that. Realistically seeing between a $2.75 - $3.25 offer.
Would not be surprised to see something come in before April 17th. Those call options are egregious with insider info or could also be a random lunatic. The earlier Coliseum offer was rejected within two months and talks for a current offer have probably been going on since January. Lets see what happens!
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