Vintage Wine Estates has accounting problems, plunging margins, and an ugly balance sheet. Fundamental analysis suggests the stock is a +screaming sell. But the company and the stock have one enormously valuable attribute: time. Turnaround potential is real, and valuation is reasonable if the business improves only modestly. VWE looks like a ???zero or triple??? situation. We???ve talked a couple of times this year, most recently on Friday [ +https://substack.com/redirect/9f0550d2-7a8d-4fc8-82f2-0534ff29ab42?j=eyJ1Ijoibm1idCJ9.oKN8sNuAta-fKDvVXVf40Ijrk4j2KaDlakvdPE7BH98 ], +about the opportunities created by a market driven by fund positioning. That positioning can create dislocations that should be +attractive to fundamentally-minded investors with a longer time horizon. Vintage Wine Estates $VWE unequivocally is not that kind of opportunity. The stock is, to use industry jargon, an absolute mess. The +company, which went public via the de-SPAC route in 2021, just announced that it was restating results for the fiscal first quarter +(calendar Q3). At the same time, it pre-announced soft revenue for the December quarter, pulled full-year guidance and announced the +removal of its chief executive officer. Meanwhile, VWE was leveraged ~5x on a net basis based on that guidance that has been withdrawn. Add it all up, and this stock +absolutely can be a zero. We???ve been comfortable (and remain comfortable) taking risk in this market, but even by that standard this +is a high-risk idea. Indeed, VWE has probably the most potential for downside of any stock we???ve recommended to this point. But, underneath the mess, +there???s a potentially high-quality business here. If new management can find a way to fix current problems and rediscover that +business, VWE has probably the highest potential rewards of any stock we???ve recommended as well. Introducing Vintage Wine Estates

Update April 2024

Basically gone to zero.