Republican influencer Robby Starbuck posted a video on Monday claiming that Montana Republican Senate candidate Tim Sheehy and his airplane firefighting company Bridger Aerospace are under attack from Democratic Party-directed short sellers.
After Starbuck put the video out, the stock surged. It’s up over 33% since the market opened on Monday.
In the video, Starbuck claims that Sheehy, who is a veteran, and his company, Bridger Aerospace, were well-respected and uncontroversial—that is until Sheehy decided to run for Senate against Sen. Jon Tester (D-Mont.) and threaten the Democratic Party’s slim majority in the upper chamber.
“The guy they’re attacking is not just a Republican Senate candidate. This man was a Navy SEAL with a Purple Hheart,” Starbuck said in the video. “He is the type of guy we should be rewarding in this country for their service, but instead the Democrats are going after him full force; I guess they couldn’t find anything on him personally.”
The video also got a boost from Donald Trump Jr., who shared it on his X account.
“Watch all of this and understand what the Democrats will do each and every time if they perceive you to be a threat to their power,” Trump Jr. wrote. “It’s disgusting and it’s ridiculous… though not surprising anymore.”
Starbuck pointed to a letter that investor Marc Cohodes signed with a group of local Montana businessmen on Aug. 29 as evidence of a coordinated campaign against the politician. The letter asks the Small Business Administration and the Gallatin County Commission to investigate Sheehy and his company over $160 million Bridger raised from Gallatin County bonds.
The money was supposed to go to building hangars and investing in aircraft, the letter charges. Instead, the bonds were used “largely to repay out-of-state investors.”
“[Sheehy] is not fit for public office,” Cohodes tweeted, calling him “a tool for private equity.”
According to an SEC filing from last September, Sheehy’s company Bridger used $134 million of the money raised from the bond offering to pay investors who bought two specific types of shares. The Gallatin County Commission called Cohodes’ letter a “politically motivated” inquiry in a statement.
“To clarify, Gallatin County has no liability exposure related to Bridger Aerospace’s business operations.” The company reported that $7.7 million was used to buy an airplane and build two hangars in Belgrade, Montana.
“They’re out of their f*cking minds, I mean they’re out of their minds and they’re scared half to death,” Cohodes told the Daily Dot about the Commission’s statement. “There’s nothing political about it. The use of proceeds, instead of being to expand the thing, get planes, build out hangars, hire people, the use of proceeds is to pay off [Chairman & CEO] Steve Schwarzman of Blackstone.”
“They have zero ability to pay it back, and I don’t think they’ll ever pay it back,” Cohodes added.
If the company doesn’t pay the bond money back on a strict schedule, it could run into trouble. Bridger’s revenue was around $13 million last year. As of June 30, the company had $209.9 million in unpaid debts.
“The money went to private equity,” Cohodes added. “The money went to Schwarzman et. al. … he doubles the money … when the person who bought the bond is going to face default because they don’t have the cash flow to service the debt.”
According to Sheehy’s memoir, Blackstone invested $150 million in Bridger, NBC reported. On July 31 this year, the firm announced that it was cashing out its holdings.
Bridger’s most recent quarterly report, which was filed on Aug. 13, reported that the company has “a substantial amount of debt.”
“Servicing future interests or principal payments may impair our ability to operate our business or require us to change our business strategy to accommodate the repayment of our debt,” the company acknowledged.
Bridger also acknowledged that it’s not in compliance with the terms of the loan agreement it signed with Gallatin County to pay back its debt at a fixed rate, and said it likely won’t be able to do so over the next 12 months. Bridger said it has $8 million of cash on hand—as the agreement requires—but that its reserves may fall below that if seasonal firefighting operations for 2024-2025 don’t bring in as much money as it needs.
Knowing it couldn’t fulfill the terms in 2024, the company met with the bond counsel to draft a plan to reduce costs at the end of 2023.
“However, this plan is in progress and there is no assurance that management will be able to diligently prosecute the remediation plan to completion,” the company noted.
Uncertainty about whether the company will actually be able to successfully negotiate a plan, and failure to make its required interest payments, could trigger some of its bonds becoming due immediately, “which raises substantial doubt about our ability to continue as a going concern as of the date our financial statements are issued.”
“The company has a going concern opinion from its auditor, which means their auditor doesn’t think they’re going to be in business over a period of time,” Cohodes said.
“We have incurred significant losses since inception,” a disclosure from the company acknowledged in July. “We are not currently profitable, and it is difficult for us to predict our future operating results. As a result, our losses may be larger than anticipated, and we may not be able to reach profitability in the foreseeable future.”
All this makes it an attractive target for short sellers, regardless of whether the owner is running for Congress.
Starbuck pointed to shorts on the company as of Aug. 15, just two days after the quarterly report was filed, as evidence that the Democratic Party is going after Sheehy.
“As a result of all the bad press driven by stories that Democrats have put out there, now some mysterious person is shorting the stock of Bridger Aerospace,” Starbuck said, claiming that Sheehy, as a shareholder in the company, could potentially have less money to put into the Montana Senate race. Starbuck pointed to donations to the Democratic Party from people who signed the letter with Cohodes as evidence that they were going after Sheehy for his politics.
“Democrats are willing to do anything, tear anything down for power, and it is disgusting,” Starbuck said.
“People like this,” Starbuck said, pointing to a picture of Tester with Joe Biden, are “willing to destroy veterans for power belong nowhere near power, and that’s the truth.”
Shorts don’t have a direct impact on stock prices but can be an indication that a company has fundamental problems that can lead to the stock price dropping.
Cohodes, who says he isn’t invested in Bridger or shorting it, said it isn’t about politics. Cohodes has only one reported contribution to a politician in FEC filings—he gave “ten bucks” to the investor Tom Steyer’s 2020 presidential run, who he called a friend.
Cohodes said about Starbuck. “I don’t know who he is … But he’s just factually incorrect”
Starbuck didn’t immediately respond to questions about the argument that the company lacks a road to profitability or Cohodes’ characterization of his video.
Cohodes also said he was getting involved in raising the alarm about the company because he’s certain that the bond issue will have a bad ending for Gallatin County, where he lives.
“[Sheehy] runs commercials that he’s one of Montana’s great business success stories, when in fact this thing is going to fail,” Cohodes said. “When the sh*t hits the fan, my point is, Gallatin County’s going to end up paying for this.”
But for the time being, Starbuck’s video seems to have steadied the stock price.
Whether that will improve the company’s long-term outlook, though, is unknown.
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