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Spruce Point Shorts Tootsie Roll

Spruce Point Capital Management announced today it has released the contents of a unique short idea involving Tootsie Roll Industries Inc. (NYSE: TR or "Tootsie"), a producer and marketer of candies such as the Tootsie Roll, Blow Pops, and Junior Mints. Tootsie has no analyst coverage, hosts no investor calls, or investor communication program. For years, investors have ascribed the highest valuation multiple in the food and candy sector to Tootsie on the “hope” that one day it will become an acquisition target.

Spruce Point has conducted an extensive fundamental and forensic accounting review of Tootsie, and believe that investors are overlooking significant problems that dampen its attractiveness as a takeover target. Its research suggests that Tootsie’s products are losing market share, its gross margins and cash flow are significantly overstated, its main production facility has undisclosed asbestos issues, and its governance and share structure severely disadvantage common shareholders.

As a result, Spruce Point has a "Strong Sell" opinion and a long-term price target of approximately $18.50 - $27.75 per share, or approximately 25% to 50% downside risk.