Soho House Plummets 10% as MCR Funding Fiasco Unfolds – What’s Next for the Go-Private Deal?

Summary
• Soho House (SHCO) gaps down 16% pre-market, trading at $7.5050 with a 10.37% intraday drop
• MCR Hospitality Fund withdraws $200M merger funding commitment, triggering liquidity fears
• Stock hits intraday low of $6.943 amid Altman Z-Score of -0.01 and debt-to-equity of -7.13

Soho House’s shares are in freefall as a critical $200 million funding commitment for its go-private merger collapses. The stock’s 10.37% intraday plunge reflects a perfect storm of liquidity risk, weak financials, and sector-specific volatility. With the merger vote looming on January 9, investors are scrambling to assess whether the deal can survive this funding gap.

MCR’s $200M Funding Pullback Sparks Chaos in SHCO Shares
The collapse of MCR Hospitality Fund’s $200 million equity commitment has shattered confidence in Soho House’s go-private deal. This funding was critical to closing the merger at $9.00 per share, and its withdrawal has created a $200 million hole in the transaction. The company’s Altman Z-Score of -0.01 and interest coverage ratio of 0.36 highlight pre-existing financial fragility, while insider selling and a 16% revenue decline in Q4 2025 amplify execution risks. The stock’s 10.37% drop reflects a re-pricing of these risks into a liquidity crisis.

Travel & Leisure Sector Mixed as Marriott (MAR) Rises 1.97%
Bearish Options Play and Technical Reversal Setup for SHCO
• 200-day MA: $7.66 (below current price) • RSI-14: 63.64 (overbought) • MACD: 0.027 (bullish divergence) • Bollinger Bands: $8.86–$9.02 (price at lower band)

SHCO’s technicals suggest a short-term bearish reversal despite a long-term bullish trend. Key support at $7.50 (200D MA) and resistance at $8.93 (Bollinger Middle Band) define a volatile range. The RSI’s overbought reading and negative MACD histogram (-0.001) signal potential exhaustion in the short-term rally. For options, focus on high-leverage puts and calls with liquidity:

• SHCO20260116P7.5 (Put): Strike $7.50, Expiry 1/16, IV 73%, Leverage 53.50%, Delta -0.256, Theta -0.006, Turnover 8,676
• SHCO20260220C7.5 (Call): Strike $7.50, Expiry 2/20, IV 38.15%, Leverage 10.70%, Delta 0.731, Theta -0.0088, Turnover 101,725

SHCO20260116P7.5 offers 53.5x leverage for a 5% downside scenario (targeting $7.62). A 5% drop to $7.62 would yield a put payoff of $0.12 per share. The high IV (73%) and moderate delta (-0.256) suggest strong sensitivity to price declines. SHCO20260220C7.5 is a bullish play with high liquidity (101k turnover) and 10.7x leverage, ideal for a rebound above $8.93. Aggressive bears should prioritize the January 16 put; bulls, the February 20 call.

Backtest Soho House Stock Performance
The backtest of SHCO's performance after a -10% intraday plunge from 2022 to the present reveals positive short-to-medium-term gains. The 3-Day win rate is 52.06%, the 10-Day win rate is 55.31%, and the 30-Day win rate is 59.22%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 8.40% over 30 days, suggesting that while there may be volatility, SHCO has the potential for recovery and growth.

SHCO’s Merger Vote on January 9 Could Define Its Survival – Act Now
Soho House’s 10.37% drop reflects a re-pricing of merger uncertainty and weak fundamentals. The stock’s survival hinges on resolving the $200M funding gap by January 9’s shareholder vote. Key levels to watch: $7.50 (support) and $8.93 (resistance). For context, sector leader Marriott (MAR) is up 1.97%, highlighting SHCO’s divergence. Investors should prioritize the SHCO20260116P7.5 put for short-term bearish exposure or the SHCO20260220C7.5 call for a rebound trade. The next 48 hours will determine whether this collapse becomes a buying opportunity or a liquidation event.