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  "documentTitle": "Kratos Defense & Security Solutions (KTOS)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "presentationDate": "2018-03-16 00:00:00",
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      "text": "After a reckless and failed acquisition spree from 2008-2012, Kratos teetered on credit default before divesting a key division to deleverage, and pivoting focus to hype its unmanned systems (aka drones) business. With its share price rising, and a wave of equity offerings, Kratos has made a remarkable come back. However, after a close forensic analysis, we question the legitimacy of Kratos’ success and its ability to hit its aspirational goals of $800m of revenues at 10% EBITDA margins. Given the propensity of Kratos to over-promise and under-deliver, we do not believe it warrants its premium valuation. We see 40%-70% downside risk",
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      "text": "After a reckless and failed acquisition spree from 2008-2012, Kratos teetered on credit default before divesting a key division to deleverage, and pivoting focus to hype its unmanned systems (aka drones) business.",
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      "text": "downside risk: 40%-70%",
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      "text": "Terrible Business Through Multiple Reinventions Now Hyping Drones: Originally a dotcom darling named Wireless Facilities that IPO’ed in 1999... Significant Value Destruction Through Wasted Mergers and Acquisitions: From 2008–2012, Kratos acquired ten businesses for nearly $1bn... Warning About Management History Associated With Past Scandal: Kratos is led by Eric DeMarco (CEO) and Deanna Lund (CFO) since 2003-2004...",
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      "text": "DeMarco was also allegedly the source of the “percentage of completion accounting techniques learned from the ‘Andersen school of accounting’ that allowed Titan to either overstate or prematurely state revenues at the company.” — Shareholder lawsuit documents",
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      "text": "Spruce Point Believes Kratos (Nasdaq: KTOS) Is A “Strong Sell” With 40% - 70% Downside Risk",
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