Investment Thesis
GPGI appears to be systematically overstating the financial performance of Husky Technologies, a recently acquired industrial business that represents over 70% of the combined company's pro forma EBITDA.
Jehoshaphat Research alleges Husky's free cash flow is inflated by approximately 90% through conflation of different FCF definitions, that revenue recognition practices include shipping products to the company's own parking lot, and that a self-enriching governance structure — where the chairman's family-controlled management company collects acquisition-linked fees — incentivizes aggressive deal-making over shareholder value creation. The simultaneous departure of both Husky's CEO and CFO, with no replacements identified, raises further alarm.
Core Allegations
Free Cash Flow Inflated ~90%
Husky's reported FCF is allegedly overstated by approximately 90% through conflation of different free cash flow definitions that make growth projections appear attainable when they are not.
Parking Lot Revenue Scheme
Former Husky employees described aggressive accounting including shipping products to the company's own parking lot to justify revenue recognition — a classic channel stuffing tactic.
Dual C-Suite Departure
Both Husky's CEO (Bradley Selleck) and CFO (John Linker) resigned within weeks of the GPGI acquisition closing, with no replacements identified — suggesting the departures surprised even GPGI.
Self-Enriching Fee Structure
GPGI pays management fees (2.5% of EBITDA quarterly) to Resolute Holdings (NYSE: RHLD), a publicly traded company controlled by GPGI Chairman David Cote's circle. Fees grow with acquisitions.
Inadequate Due Diligence
The Husky acquisition was completed after what Jehoshaphat describes as a relatively brief due diligence period — insufficient for a $5B+ deal comprising 70%+ of pro forma EBITDA.
Reduced Lockups / PIPE Risk
Platinum Equity, which sold Husky, secured a reduced 90-day lockup on its 55M GPGI shares. Recent PIPE investors face no lockups at all and can sell shares at current prices.
Valuation: GPGI vs. Industrial Peers
Price-to-Sales ratio comparison · Source: Simply Wall St, Investing.com · Feb 2026
RHLD Management Fee Structure — Incentive Alignment Concerns
Fees scale with EBITDA and acquisitions · Source: SEC 8-K filings, Insider Monkey, Jehoshaphat Research
Key Players & Governance
| Name | Role | Issue | Status |
|---|---|---|---|
| David Cote | Executive Chairman, GPGI | Controls RHLD which collects acquisition-linked management fees; no performance hurdles | Conflict |
| Bradley Selleck | CEO, Husky Technologies | Departing April 2026 — weeks after acquisition closed; no replacement named | Departing |
| John Linker | CFO, Husky Technologies | Departing March 2026 — weeks after acquisition closed; no replacement named | Departing |
| Platinum Equity | Former Husky Owner (PE) | Sold Husky after owning since 2018; secured reduced 90-day lockup on 55M shares | Selling |
| Louis Samson | Platinum Equity → GPGI Board | Joined GPGI board as part of deal; PE affiliate retains board nomination rights | Installed |
| Tom Knott | RHLD Co-Lead with Cote | Co-manages Resolute Operating System deployment; benefits from fee expansion | Conflict |
Timeline of Events
1953
Husky Technologies Founded
Husky established as an injection molding machinery maker in Bolton, Ontario. Becomes a leader in engineered equipment for plastics manufacturing.
2018
Platinum Equity Acquires Husky
Private equity firm Platinum Equity acquires Husky Technologies. Installs Bradley Selleck as CEO and John Linker as CFO.
2024
Resolute Holdings Takes Control of CompoSecure
Resolute Holdings I LP invests $372M in CompoSecure, gaining a controlling stake. A reconstituted board approves a sweeping 10-year management agreement with no performance hurdles.
Nov 2025
Husky Acquisition Announced
CompoSecure announces acquisition of Husky for ~$689M cash plus 55M shares. Jehoshaphat describes the due diligence period as "relatively brief."
Dec 24, 2025
CompoSecure Shareholders Approve Husky Deal
Stockholders vote to approve the issuance of shares for the Husky combination.
Jan 12, 2026
Acquisition Closes — Rebrand to GPGI
Business combination completes. CompoSecure rebrands to GPGI, Inc. ("Great Positions in Good Industries"). Platinum retains minority stake with reduced 90-day lockup. PIPE investors face no lockups.
Feb 18, 2026
Husky CEO & CFO Both Resign
Bradley Selleck (CEO, departing April) and John Linker (CFO, departing March) announce departures "for personal reasons." No replacements named. Active searches underway.
Feb 26, 2026
Jehoshaphat Publishes Short Thesis
Jehoshaphat Research announces short position, alleging 90% FCF overstatement, parking-lot revenue recognition, and self-enriching governance. GPGI shares rise 1.6% on the day.