WillScot Holdings Corporation (WSC): A Bear Case Theory

Ricardo Pillai

Thu, Apr 17, 2025, 7:39 AM 3 min read

We came across a bearish thesis on WillScot Holdings Corporation (WSC) on Substack by Keith Dalrymple. In this article, we will summarize the bears’ thesis on WSC. WillScot Holdings Corporation (WSC)'s share was trading at $23.21 as of April 16^th. WSC’s trailing and forward P/E were 161.53 and 15.80 respectively according to Yahoo Finance.

Aerial shot of a modular space surrounded by poratable storage units.

WillScot Holdings Corporation (WSC) recent investor day and unexpected $500 million debt offering have raised serious concerns about the company’s liquidity, fleet condition, and future strategy. While management had previously indicated they would refinance the maturing $525 million 2025 notes using their Asset-Based Lending (ABL) facility—citing $1.7 billion in borrowing capacity at a lower interest rate—they instead opted for a second lien note offering at 6.625%. This sharp deviation suggests that ABL lenders may have reassessed the collateral value of WSC’s aging fleet and reduced the company’s access to credit, effectively pushing WSC into the high-yield junk market. The timing of this shift, which followed a series of public critiques about WSC’s deteriorating fleet condition, supports the idea that lenders may be growing wary of the asset base that backs the ABL line.

Investor day remarks from President and CFO Tim Boswell only added to the skepticism. His detailed discussion of WSC’s “idle fleet” being “parked” for future remanufacturing was interpreted by many as a veiled admission that much of the fleet is no longer rental-ready. Instead of generating near-term cash flow, the fleet requires material capital expenditures to be viable again, which undermines its utility as collateral. Boswell’s effort to frame this as a capital-efficient advantage fell flat, as it contradicted prior messaging about the fleet’s immediate monetization potential and suggested the assets were effectively scrap with uncertain recovery value.

This pivot away from emphasizing utilization—a key metric in the equipment rental industry—further signals that management is distancing itself from traditional benchmarks, which may be revealing in itself. Management’s statement that the company doesn’t “price based on utilization” and its focus on remanufacturing idle units paints a picture of a company facing capital constraints and asset degradation. While the debt deal staves off a near-term liquidity crisis, the higher rate, speculative credit rating, and withdrawal of cheaper funding speak to diminished confidence in WSC’s underlying business health. The equity value is now questionable in light of limited fleet monetization potential, tighter lender scrutiny, and the risk that stock buybacks—funded by new debt—are no longer aligned with lender interests. In total, WSC’s recent moves suggest not just a tactical refinancing but a strategic retreat from earlier financial narratives, leaving investors to question what the company’s assets are truly worth and whether the core business model remains intact.