LA Times Article. Saturday, the L.A. Times published an article suggesting FAT Brands CEO Andrew Wiederhorn is being investigated for allegations of securities and wire fraud, money laundering, and attempted tax evasion. Deeper into the article, the newspaper notes that the "status of the investigation is unclear. No charges have been filed against any person or against FAT Brands...".But FAT Brands Not Implicated. A key takeaway from the article, in our opinion, is that the Company itself is not being investigated or implicated in any of the alleged wrongdoing at this time. CEO Wiederhorn's attorneys are quoted as replying, "Mr. Wiederhorn categorically denies these allegations and at the appropriated time we will demonstrate that the government has its facts wrong."The Affidavit. Interestingly, the L.A. Times article references a November affidavit outlining the investigation on which the article is based. We could not find the affidavit after an internet search. Mr. Wiederhorn's attorney states in the article, "...despite our requests, the government has refused to provide us with a copy of the affidavit."Deep Bench. Although such an article is not positive regardless of the merits, we take some comfort in the deep management bench FAT Brands has assembled. Through its acquisitions over the past year, in the case CEO Wiederhorn is sidelined we believe there is sufficient depth of management talent to continue to drive FAT Brands forward, especially given our expectation 2022 will be a year of consolidating past acquisitions.Maintaining Outperform, $25 PT. While the L.A. Times article is concerning, until we have more information, we are going to maintain our Outperform rating and our 12-month price target of $25, which equates to 14.7 times normalized 2022 EBITDA. We believe the recent acquisitions represent a new paradigm for FAT Brands and vaults the Company into the "big leagues." We expect consolidation of the acquisitions to drive revenues and EBITDA higher. Read More >>