EquipmentShare Stock Drops 6% After Short Seller Alleges Billions in Hidden Liabilities

Shares of EquipmentShare.com Inc. (NASDAQ:EQPT) fell 6% on Thursday following the publication of a critical report by short seller Blue Orca. The report alleges the equipment rental company holds billions of dollars in hidden liabilities tied to its financing program, challenging the core of its asset-lite business model.

Short Seller's Allegations

Blue Orca's report centers on EquipmentShare’s “OWN Program,” a financing arrangement that uses third-party investors to fund the expansion of its rental fleet. The short seller claims the company makes undisclosed promises to backstop these investments, which could create substantial liabilities not reflected on its balance sheet.

According to the report, entities connected to co-founders Jabbok and William Schlacks offer investors incentives, including:

• A first-loss guarantee on equipment investments.
• A promise that EquipmentShare will repurchase the equipment at the end of the investment term.

Blue Orca argues these guarantees effectively transform what is presented as third-party financing into a significant financial obligation for EquipmentShare.

Accounting and Related-Party Concerns

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The report also questions whether a significant portion of the OWN Program's funding comes from truly independent, arms-length investors. Blue Orca identified an entity, now called the Premiere Group and previously known as Schlacks Rentals, which recently stated on its website it owned over $440 million of equipment. A former executive reportedly told Blue Orca this equipment is likely part of the OWN Program.

Furthermore, the short seller alleges that EquipmentShare improperly inflates its Equipment Rental Segment Adjusted EBITDA. The report claims the company achieves this by excluding distributions made to the OWN Program investors who purchased the equipment, thereby artificially boosting its reported profitability and margins.

Market Context and Investor Risk

EquipmentShare, which went public in January, secured a premium valuation based on its asset-lite model, a premise the short seller's report directly contests. The report also highlights that the company's largest third-party investor, Romulus Capital, is no longer in a lock-up period and has begun selling shares.

Adding to investor concerns, Blue Orca noted that Romulus Capital had previously sued EquipmentShare in 2025, with allegations including connected-party dealings. The combination of these allegations has put significant pressure on the company's stock.