Danimer Scientific, Inc. DNMR
Danimer is an over-hyped SPAC bioplastics story whose governance-tainted management, irreconcilable facility claims, failed-PHA precedent, and 138x EBITDA valuation imply 65-100% downside to ~$8.75/share.
Thesis
Spruce Point argues that Danimer Scientific, a SPAC-promoted bioplastics company built on 30-year-old PHA technology, is a strong sell with 65-100% downside to a $8.75 price target. CEO Stephen Croskrey was directly involved in Armor Holdings' $30 million DOJ settlement over defective Zylon body armor, where he urged suppliers to 'stick together' to 'overcome the threat.' The company has made four different, irreconcilable claims about its Bainbridge facility size and slashed stated PHA production 90% between 2012 and 2013. Pepsi appears to have quietly sold its entire equity stake in Q2 2021. Previous PHA attempts by Metabolix, NatureWorks, and P&G failed commercially, and Danimer trades at 138x 2022E EBITDA versus a 9x chemical/plastic peer median, with rising canola oil costs further threatening margins.
SCQA
Danimer Scientific (NYSE: DNMR), a SPAC-merged producer of PHA bioplastic (Nodax brand) with Pepsi and Nestle partnerships, is viewed by the market as a premier ESG growth story set to disrupt plastics.
The CEO has a defective-body-armor scandal, facility and capacity disclosures are irreconcilable, PHA has commercially failed for 30 years, and Pepsi appears to have exited its stake.
Sell or avoid DNMR; discount management's 2025E guidance and value the company as a chemical/plastic peer at ~9x EBITDA rather than the aspirational ESG growth multiple.
65% downside to a $8.75 price target under management's own optimistic 2025E EBITDA of $169m and a 9x multiple, with 100% downside if DNMR follows its failed PHA predecessors.
The three reasons
- 1
Corporate governance red flags: CEO Croskrey linked to Armor Holdings defective-vest cover-up
- 2
Inconsistent facility size and capacity claims expose a consistently changing story
- 3
PHA technology has failed for 30+ years; 2022E EV/EBITDA of 138x is unsustainable
Primary demands
- Investors should short DNMR / avoid the stock
- Scrutinize governance red flags around CEO Croskrey, CTO Van Trump, and Board
- Reject management's scale-up narrative and optimistic 2025E EBITDA projections
- Demand disclosure of Pepsi's shareholding status and partnership dependencies
KPIs cited
Pattern membership
Precedents cited
- Metabolix (YTEN) — burned hundreds of millions on PHA, sold assets for $10m in 2016
- NatureWorks PLA — multiple restructurings, <1% of global plastics market after 20 years
- Procter & Gamble Nodax — halted PHA production in 2006 before selling IP to Danimer
- Armor Holdings Zylon body armor — $30m DOJ settlement involving Croskrey
Composition what's on the 63 slides
Slide gallery ·
Notes
Classic Spruce Point short-report template: editorial cover image ('When the tide goes out, what will wash ashore?'), full legal disclaimer, ToC, red-flag emoji callouts throughout, and dense evidence slides. No single named human author on cover — signed only as Spruce Point Capital Management LLC (founder Ben Axler is not explicitly credited in the document). Strong specimen for studying SPAC de-SPAC short theses and governance-centric attack arcs. Notable rhetorical moves: (1) linking CEO to prior DOJ case via fax exhibit, (2) facility-size reconciliation table, (3) Pepsi stealth divestment appendix built from 10-Q footnote forensics. Valuation slide (p.55) uses a 4-column Failure/Spruce Point/Company/Street comparison — a reusable pattern.