Mercury Systems Inc.
System Failure (Original) – report 1
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Mercury Systems Inc.
System Failure (Update) – report 2
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Mercury Systems Inc.
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Mercury Systems Inc.
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Mercury Systems Inc.
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Mercury Systems Inc.
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Mercury Systems Inc.
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Research Overview

INDEX:
S&P 500
Sector:
Industrials
Position:
Short
Date:
Oct 17, 2018

After conducting a forensic financial and accounting review, Spruce Point believes Mercury Systems Inc (Nasdaq: MRCY), an aerospace and defense company, is showing signs of deteriorating financial metrics and has evidence of misrepresentation. Based on our original investigation, we estimated 50% - 85% downside risk, or $7.00 to 23.00 per share. 

The reports highlight several key concerns with the company, including:

  • We observe that adjusted EBITDA is increasingly disconnected from free cash flowWe believe cyber compliance is likely to drag on revenues and margins
  • We have found deteriorating financial metrics, undisclosed signs of strain, and evidence of misrepresentation
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