USG Corporation
USG
position
short
Rational Asset Management
Thesis
When USG was trading at $90 in 2006, it was implied that there would be a soft landing in the housing market and the return over invested capital for USG would remain around 30%, which we considered a mathematical impossibility.
Did it work?
failed
confidence: high
The thesis was based on the expectation that USG's return on invested capital would not sustain around 30%, implying a decline in stock price. However, since the pitch, the stock has increased by 62.8%, indicating that the anticipated downturn in the housing market and its impact on USG's performance did not materialize as expected. This significant price increase contradicts the short thesis.
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