# Xponential Fitness (XPOF): Fund 1 Reaches 19.88% Exposure, Just Under a 19.9% Poison Pill > Xponential Fitness closed at $4.20 on October 22, 2026, as Fund 1 Investments reached 19.88% total economic exposure, just under the 19.9% trigger of the board's new poison pill. A special-situations writer sees a sale. We check the 13D filings, the Club Pilates math, the guidance cut and the $522.4 million of debt. By MCAFax · Published October 23, 2026 Section: Markets & Main Street › From Wall Street · Series: Market Calls, Investigated (https://mcafax.com/notebook/series/market-calls-investigated) Canonical: https://mcafax.com/notebook/xpof-xponential-fitness-fund-1-19-88-percent-exposure-poison-pill Source: MCAFax, The Broker's Notebook (https://mcafax.com/notebook). MCAFax is not a lender or a law firm. --- Xponential Fitness, Inc. (NYSE: XPOF), the franchisor behind Club Pilates, closed at $4.20 on October 22, 2026, while Fund 1 Investments sits at 19.88% total economic exposure, just under the 19.9% trigger of the poison pill the board adopted on October 13. Special-situations writer Dalius (@InvestSpecial) flagged the build-up on October 23 as part of his strategic-review case for a sale. The board's review with Jefferies is still open, but there is no deal, and 2026 profit guidance was cut in August. *This is journalism and commentary, not investment advice. We hold no position unless stated.* ## Key facts - **Ticker and exchange:** Xponential Fitness, Inc., XPOF, NYSE; a boutique fitness franchisor whose main brand is Club Pilates. - **Situation type:** strategic review plus activist accumulation; no offer has been announced. - **The stake:** Fund 1 Investments reported 4,170,610 shares (9.9%) plus cash-settled swaps on 4,213,826 shares (9.98%) in its [October 20 Schedule 13D/A](https://www.sec.gov/Archives/edgar/data/1802156/000092189526002831/primary_doc.xml). - **The pill:** the [rights plan](https://www.sec.gov/Archives/edgar/data/1802156/000119312526419697/d135071dex991.htm) triggers at 19.9%, counts derivatives, had an October 22, 2026 record date and expires October 11, 2027. - **The waiver:** a September 28, 2026 letter agreement waives Delaware's Section 203 for Fund 1, which agreed to stay at or below 19.9% including derivatives. - **The business:** Q2 2026 revenue fell 13% to $66.0 million, North America same-store sales fell 6.8%, and the 2026 adjusted EBITDA guide was cut to $91-97 million from $100-110 million. - **Leverage:** $522.4 million of total long-term debt against $25.0 million of cash at June 30, 2026. ## Is XPOF a good bet right now? It is a bet on a sale, not on the current business. Two large holders and an open review with Jefferies make a transaction more plausible than it was a year ago. The case against is just as concrete. Sales and same-store sales are falling, the debt is large relative to the equity, and a review that ends without a buyer would leave holders with a shrinking franchisor and its debt. ## Why are investors bullish on Xponential Fitness? - **Club Pilates.** Bulls argue the Pilates brand alone could be worth more than the whole company's enterprise value. - **Motivated holders.** Voss Capital reported 16.2% in May 2026, and Fund 1 now has about 19.88% total exposure. - **Underwater buyers.** Fund 1 paid about $25.85 million for its 4,170,610 shares, roughly $6.20 a share by our math from its August 13D, well above $4.20. - **A board signal.** The pill release says the plan "will not prevent an acquisition" and that the review remains ongoing. ## Who's making this call and why? Dalius runs a special-situations site and a paid picks service. On October 23 he [posted](https://x.com/InvestSpecial/status/2113589443089297745): "Total economic exposure now stands at 19.88%." He tied it to his public April 23 [Quick Pitch](https://www.specialsituationinvestments.com/2026/04/quick-pitch-xponential-fitness-xpof/), headlined "Strategic review: 50% upside (at $6.88)." That pitch valued Club Pilates at 11-13 times about $100 million of EBITDA, or $1.1-1.3 billion, against an enterprise value of about $910 million at the time. The stock has fallen about 39% from that $6.88 reference. Fund 1 has done this before. In December 2024 it made a [non-binding $3.00 cash proposal](https://www.sec.gov/Archives/edgar/data/813298/000092189524003007/ex991to13da413866004_122024.htm) for Destination XL, a 34% premium at the time. **Track record.** In our tracking, Dalius is 4-16 (a .200 win rate) on 20 calls scored at 180 days against the S&P 500, with an average edge of -11.7 points, ranked 10th. His March 9, 2026 XPOF long trailed the index by 31.5 points at 180 days. See the [scoreboard](https://mcafax.com/notebook/market-calls-scoreboard). **Other supporters:** - FRAGMENTS Value, a small deep-value account, [wrote](https://x.com/FragmentsValue/status/2101649866564767949) on September 20: "At around $3.65, XPOF is getting very interesting." - Event-driven monitor KEDM.com [said](https://x.com/KEDM_COM/status/2112890662999777331) on October 21, after the Fund 1 news: "Just sell the damn thing." ## Who disagrees? The sharpest caution came from a supporter. In an [August 24 post](https://x.com/FragmentsValue/status/2091960482379002060), FRAGMENTS Value estimated about $2.92 per economic unit at 7 times the $94 million EBITDA midpoint if no deal comes, and about $1.96 at 6.5 times. "So I am not looking at $5 and pretending the downside is protected by some huge pile of assets." The company's own numbers make the bear case: - **Shrinking results.** Q2 adjusted EBITDA fell to $21.9 million from $28.1 million, and the company posted a $4.8 million net loss. - **Debt.** $522.4 million of long-term debt is large next to a stock at $4.20. - **The cap.** Fund 1 agreed to vote shares above 9.9% in proportion with other holders, so its extra exposure buys economics, not control. - **No bid yet.** The review began in April 2026 and has produced no announced offer. ## What are the key facts to verify? - Fund 1's [October 20 13D/A](https://www.sec.gov/Archives/edgar/data/1802156/000092189526002831/primary_doc.xml) for the 9.9% stake, the 9.98% swaps, and $5 puts on 2,500,000 shares that it says expired unexercised on October 16. - The [September 30 13D/A](https://www.sec.gov/Archives/edgar/data/1802156/000092189526002688/) for the five-year letter agreement and voting limits. - The [rights plan release](https://www.sec.gov/Archives/edgar/data/1802156/000119312526419697/d135071dex991.htm) for the 19.9% trigger and $15.00 exercise price. - The [Q2 2026 results](https://www.sec.gov/Archives/edgar/data/1802156/000119312526338374/d328551dex991.htm) for revenue, same-store sales, guidance and debt. ## What would prove it right or wrong? **Right:** Xponential Fitness announces a sale or a Club Pilates separation at a price above where Fund 1 and Voss bought, or Fund 1 makes a public proposal as it did at Destination XL. **Wrong:** the board ends the review with no deal, Q3 results show more same-store declines or another guidance cut, and XPOF trades on its debt load instead of on takeover hopes. *This is journalism and commentary, not investment advice. We hold no position unless stated.* ## Questions readers ask **What does Xponential Fitness (XPOF) do?** Xponential Fitness, Inc. (NYSE: XPOF) is a boutique fitness franchisor. Its largest and best-known brand is Club Pilates, and Xponential Fitness earns most of its money from franchise fees, royalties and equipment sales to studio owners. **How much of Xponential Fitness (XPOF) does Fund 1 Investments control?** Fund 1 Investments reported 4,170,610 Xponential Fitness (XPOF) shares, or 9.9%, plus cash-settled swaps on 4,213,826 shares, or 9.98%, in an October 20, 2026 Schedule 13D/A. That is about 19.88% total economic exposure. **What is the Xponential Fitness (XPOF) poison pill?** Xponential Fitness (XPOF) adopted a shareholder rights plan on October 13, 2026. It triggers if an investor reaches 19.9% including derivatives, had an October 22, 2026 record date, and expires on October 11, 2027. **Can Fund 1 go above 19.9% of Xponential Fitness (XPOF)?** Under a September 28, 2026 letter agreement, the Xponential Fitness (XPOF) board waived Delaware's Section 203 for Fund 1, and Fund 1 agreed to stay at or below 19.9% including derivatives. Fund 1 also agreed to vote shares above 9.9% in proportion with other holders. **Is Xponential Fitness (XPOF) for sale?** Xponential Fitness (XPOF) announced a strategic review in April 2026, with Jefferies as financial advisor. The company said in October 2026 that the review remains ongoing, and no offer had been announced as of October 23, 2026. **Why are some investors bullish on Xponential Fitness (XPOF)?** Bulls on Xponential Fitness (XPOF) argue that Club Pilates alone could be worth more than the whole company's enterprise value. They also point to large holders such as Voss Capital and Fund 1 that bought well above the October 22, 2026 close of $4.20. **What did Fund 1 pay for its Xponential Fitness (XPOF) shares?** Fund 1 disclosed an aggregate cost of about $25.85 million for 4,170,610 Xponential Fitness (XPOF) shares in its August 2026 Schedule 13D. That works out to roughly $6.20 a share, by our math. **How did Xponential Fitness (XPOF) do in Q2 2026?** Xponential Fitness (XPOF) reported Q2 2026 revenue of $66.0 million, down 13%, with North America same-store sales down 6.8%. Adjusted EBITDA fell to $21.9 million from $28.1 million, and the company posted a $4.8 million net loss. **What is Xponential Fitness (XPOF) 2026 guidance?** In August 2026, Xponential Fitness (XPOF) cut its 2026 adjusted EBITDA guidance to $91-97 million from $100-110 million. It guided 2026 revenue to $250-260 million. **How much debt does Xponential Fitness (XPOF) have?** Xponential Fitness (XPOF) reported $522.4 million of total long-term debt and $25.0 million of cash at June 30, 2026. That debt is a key risk if the strategic review ends without a sale. **What is the downside case for Xponential Fitness (XPOF)?** One small deep-value account estimated in August 2026 that Xponential Fitness (XPOF) could be worth about $2.92 per economic unit at 7 times the $94 million EBITDA midpoint if no deal happens, or about $1.96 at 6.5 times.