Here you go:
**The thing propping up EQPT isn’t the fleet, it’s a tax pitch that won’t survive contact with the IRS**
Everyone is arguing about the short report and whether the self dealing stuff is real. Doesn’t matter. There’s a simpler problem that works even if every word of that report is wrong.
EQPT doesn’t own most of its fleet. It’s in their own S-1. About $5.1 billion of equipment, over half of it, belongs to outside participants in the OWN program, and 88% of fleet growth since 2023 came through it. Q1 sales to participants were $102M. Payouts to them grew 41% yoy. Sit with that gap for a second, payouts growing 6x faster than the sales feeding them.
And the retail funnel is STILL running. Search OwnAFleet, the site is live today. Put 10% down on a million bucks of equipment, personal guarantee on the other 90%, and a “major publicly traded US rental operator” (they only name them on the intro call, wonder why) manages everything while you write off \~$400K in year one from bonus depreciation. Their own site says 80% of buyers just had a windfall. Sold a practice, sold stock, sold a business. These are dentists with a tax problem, not equipment guys. Oh and there’s a 3% fee on the way in, plus the short report found another 1.25% financing fee going through a broker whose officers are… the founders. Cool cool.
Nobody is buying scissor lifts for the yield here. They quote 12-15% on equipment cost but that’s a revenue share, not a lease, no guarantees, and debt service on a 90 LTV note runs about 13% a year by itself. The write-off IS the product.
Which is the problem. To use those losses against active income you need material participation under 469. Regular, continuous, substantial involvement. Actually running the thing. These deals are sold as fully managed and turnkey, and participants get coached to log 100 hours a year checking an app. The regs flat out exclude investor activities like reviewing reports from counting. The site says the program is “structured to satisfy” the test. They wrote that down. On the internet. 469 literally exists because Congress passed it in 1986 to kill equipment shelters exactly like this one.
We’ve seen this movie twice already. Conservation easements. Micro captives. Same doctors, same webinars, same “ask your CPA” hand wave. Both died from one IRS notice making them listed transactions, everybody has to self report on 8886, new sales stop that week. Two of the easement promoters got 25 and 23 years.
If that notice lands, the money stops the same day, because the tax break is the only reason the money shows up. EQPT is 4.2x levered, negative FCF. No OWN inflows means buying their own fleet like everyone else or shrinking, while payouts to existing participants keep compounding. None of this needs the fraud allegations. The IRS just has to read a website that’s up right now.
No position. Not advice. Company disputes everything and raised guidance, weigh it yourself.