Amcor plc AMCR
Amcor is a packaging roll-up masking 3-4% organic declines, obscured tobacco dependence, liquidity strain, and accounting red flags — including a CAO with a revoked CPA — with 40-60% downside to $3.60-$5.40.
Thesis
Amcor plc, formed through a 2019 stock-for-stock merger with Bemis, is a $20bn global packaging roll-up that Spruce Point argues is a 'Core Short' with 40-60% downside to US$3.60-US$5.40 per share. Beneath the promoted cost-synergy narrative, Spruce Point's forensic review finds organic revenue already declining 3-4% through September 2019 and accelerating to -5.4% in Q4; free cash flow dropping over 50% year-over-year; a European subsidiary cash pool that flipped from €62m surplus to €34m deficit; and leverage closer to 3.3x than the claimed 2.9x after adjusting for leases and pensions. The deck exposes obscured tobacco-carton dependence (~10% of sales, once ~30% of EBITDA), two unresolved material weaknesses lingering 18 months, and Chief Accounting Officer Jerry Krempa, whose CPA license was revoked by Minnesota in 2017 despite his biography claiming otherwise. Investors should expect a dividend cut and a credit migration from BBB toward junk.
SCQA
Amcor plc is a $20bn S&P 500 global packaging roll-up formed through a 2019 Amcor-Bemis stock-for-stock merger, serving CPG and beverage clients with flexible packaging, rigid packaging, specialty cartons and closures.
Organic revenue is actually declining 3-4% while management sells a cost-synergy growth story; free cash flow fell over 50%, leverage is understated, material weaknesses have lingered 18 months, and the Chief Accounting Officer's CPA is revoked.
Sell AMCR: investors should demand a forensic investigation into Amcor's financial affairs, reject management's deal narrative, and reprice the stock at a discount for unsustainable dividend, fragile liquidity, and governance failures.
40-60% downside to US$3.60-US$5.40 per share from $9.00, applying a 1.0x-1.2x 2020E sales multiple consistent with struggling peer WestRock; a dividend cut and further credit downgrade toward junk are expected.
The three reasons
- 1
Organic revenue is actually declining 3-4%, masked by Bemis deal accounting and cost-synergy narrative
- 2
Chief Accounting Officer Jerry Krempa claimed CPA credentials that were revoked by Minnesota in 2017
- 3
Free cash flow fell ~50%, European cash pool flipped to deficit, dividend and BBB rating at risk
Primary demands
- Sell Amcor shares — 'Strong Sell' opinion with 40-60% downside target
- Demand a full investigation into Amcor's financial affairs given material weaknesses and CAO credential misrepresentation
- Reprice the stock at a discount to peers to reflect unsustainable dividend, fragile liquidity, and governance failures
KPIs cited
Pattern membership
Precedents cited
- WestRock/KapStone acquisition (2018) — comparable packaging roll-up missing estimates and losing ~50%
- Newell Rubbermaid SEC goodwill-accounting investigation
- Kraft Heinz accounting investigation and goodwill write-down (large Bemis customer)
- MDC Partners cash-overdraft scandal
- XPO Logistics and Maxar Technologies (prior Spruce Point short wins on roll-ups)
- Greif, CECO, LKQ (prior Spruce Point packaging/industrial roll-up shorts)
Composition what's on the 95 slides
Slide gallery ·
Notes
Iconic Spruce Point cover composition — 3D-rendered dystopian tabletop still life with rats, 'Mac & Moldy Cheese', 'Tear Jerker Beef', rotten meat, 'Kola' bottle and 'Unlucky Cigarettes' — visually telegraphs the thesis (tobacco, CPG customer stress, environmental pressure) and is a genuinely swipeable cover. Signed 'Quote From Ben Axler' on the S&P 500 track-record slide confirms authorship. Classic multi-pillar Spruce Point short structure: prior-track-record credentialing, 'What Company Said vs. Spruce Point Cold Reality' comparison tables, management quote contradictions, forensic financial tables, precedent deal (WestRock/KapStone) analogue, valuation bridge. Stake is not disclosed as a percentage — document only says short position in AMCR. Campaign phase is initial_thesis: first Spruce Point report on Amcor.