Clear Secure, Inc. YOU
Spruce Point is short Clear Secure (YOU): TSA Digital ID and weakening airline partnerships are eroding CLEAR's value prop while accounting red flags and a CAO from Ubiquiti suggest 30-50% downside.
Thesis
Spruce Point argues Clear Secure (NYSE: YOU) is a strong sell with 30-50% intermediate-term downside as its core airport-security business becomes obsolete. CLEAR's value proposition is degrading because adding members creates bottlenecks at fixed lanes, while the TSA, Delta, United, and American are rolling out competing Touchless/Digital ID, and warrants once held by Delta and United have lapsed. Spruce Point's forensic review flags accounting signals: the Chief Accounting Officer worked at Ubiquiti during its inflated-user-community SEC matter, the active-member grace period quietly expanded from 45 to 51 days, revenue-recognition language was loosened, and a $177M Chelsea HQ lease and $196M tax receivable obligation are missing from Street capitalization. With executive turnover, insider selling, and an 85.8% gross margin that drops to roughly 61.5% once direct salaries are included, fair value is $10.62-$17.28 versus $25.31.
SCQA
Clear Secure (CLEAR Plus) sells $199/year expedited airport-security membership, getting 64% of sign-ups inside airports and depending on TSA directives, Delta/United/American partnerships and Amex distribution to grow its 7.3M-member base.
TSA Digital ID and Touchless ID rollouts plus expiring airline warrants are commoditizing CLEAR's lane, while accounting-quality red flags around the ex-Ubiquiti CAO, an expanded grace period and loosened revenue recognition suggest reported KPIs are stretched.
Spruce Point recommends shorting YOU, urging investors to discount Street consensus, reprice CLEAR off consumer/labor-intensive comps rather than SaaS, and adjust enterprise value for the Tax Receivable Agreement, leases and multi-class share count.
Adjusted EV/Sales (1.5x-2.5x) and EV/Gross-Profit (3.0x-4.0x) multiples on more honest ~61.5% gross margins yield a $10.62-$17.28 share price versus $25.31, implying 32%-58% downside over the intermediate term.
The three reasons
- 1
TSA Digital ID rollouts and expired airline warrants are obsoleting CLEAR's expedited lane
- 2
CAO came from Ubiquiti during its SEC subpoena; active-member grace period quietly extended 45 to 51 days
- 3
Adjusted for TRA, leases and direct salaries, CLEAR is worth $10-$17 vs $25 - 32%-58% downside
Primary demands
- Short Clear Secure (NYSE: YOU)
- Reprice CLEAR off labor-intensive consumer-subscription comps, not SaaS / tech comps
- Adjust enterprise value for the $196M Tax Receivable Agreement, $115M operating lease, multi-class share count and NCI
- Discount Street consensus given decelerating KPIs and TSA/Digital-ID displacement risk
KPIs cited
Pattern membership
Precedents cited
- Leidos / L3Harris airport-security business (Spruce Point report Feb 2021; CEO Krone retired Feb 2023)
- Ubiquiti Networks (NYSE: UI) - SEC subpoena and inflated-Community-user lawsuit, where CLEAR's CAO Dennis Liu was Controller
- Chegg (CHGG) - touted high-moat disruptor displaced by new technology, now a penny stock
Composition what's on the 85 slides
Slide gallery ·
Notes
Classic Spruce Point short-seller forensic deck: cover image (airport kiosk reading 'Warning! Unclear future, proceed to a TSA agent') paired with the tagline 'What Are YOU Hiding?' frames the adversarial posture. Document opens with a track-record slide on Leidos before the thesis - a recurring Spruce Point credibility move. Heavy reliance on expert-network interviews (Tegus + direct) with former CLEAR and former TSA employees as evidence. Stake size not disclosed beyond 'short position' - typical Spruce Point practice. No named human author on cover; Ben Axler founded the firm but is not signed to this report.