Blue Orca, LLC on EquipmentShare.com Inc.

Blue Orca believes EquipmentShare's OWN Program creates substantial undisclosed off-balance-sheet liabilities despite being presented to investors as an asset-light financing model. The report alleges that closely connected capital funnels promise participants roughly 10% first-loss protection and create an expectation that EquipmentShare will repurchase equipment at the end of the investment term. Blue Orca estimates that the first-loss arrangements alone could represent approximately half a billion dollars of undisclosed liabilities and argues that potential repurchase exposure could be substantially larger relative to the roughly $5.5 billion of equipment enrolled in the program. The firm also questions whether reported third-party demand is genuinely arm's length, citing evidence that an entity connected to the founders may hold hundreds of millions of dollars of equipment. Blue Orca further argues that EquipmentShare overstates rental profitability by excluding OWN Program distributions, estimating roughly 14% adjusted EBITDA margins rather than the reported 40% plus. Additional downside risks in the thesis include selling by major shareholder Romulus Capital and the co-founders' large stock pledges supporting margin loans.