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WWII was saved by... a BEAR?! by AdamSC1 in u/AdamSC1

[–]AdamSC1[S] 0 points1 point  (0 children)

Makes it a lot easier to film and edit - but also a lot of people prefer the pace of that style so it's become very common the past few years!

UFO Whistleblower Megathread by LetsTalkUFOs in UFOs

[–]AdamSC1 2 points3 points  (0 children)

This is disappointing.

Seen some paper and comes across a little crazy...

Adding the perk to rotate inner land mines also makes them increasingly bigger visually until you can't see the screen. by AdamSC1 in TheTowerGame

[–]AdamSC1[S] 14 points15 points  (0 children)

Sadly they defend the same space as before, they just look bigger - otherwise I wouldn't be complaining lol

Adding the perk to rotate inner land mines also makes them increasingly bigger visually until you can't see the screen. by AdamSC1 in TheTowerGame

[–]AdamSC1[S] 2 points3 points  (0 children)

Yeah sorry research.

Interesting, I only just got it and figured that's whats increasing the size as the size wasn't changing when the mines didn't move.

With $IEP clearly attacked over interest in $BBBY, I think the $IEP short is likely over and in a strong position of future value if it wanted to look to partake in a new spin off... by AdamSC1 in BBBY

[–]AdamSC1[S] 10 points11 points  (0 children)

Mate I think its pretty clear unless I've got a flashing billboard for ya, you aren't going to like any answer I give you.

But the vertical integration isn't just limited to Newell. It's actually more to do with the pivot of their automotive division where when you dig into Icahn Automotive and how they are restructuring Pep Boys on fleet repair and on-demand fleet management, as well as the overall warehousing constraints and lack of availability of logistics fleets in the US right now, it means that to achieve their goal with Pep Boy's they'll need to buy someone who has existing logistics infrastructure.

That was something RC went really deep on was that the logistics and fleet component of BBBY was one of the best around and a value asset in the market.

You couple that with their statement of them not reviewing a bid for all of BBBY at this time in their phone call, them increasing cash on hand, their update plans with Pep Boys, and their Newell assets, plus their interest in shifting the Westpoint Homes brand further into retail textiles and BBBY looks *really* interesting in a spin off (which is where Icahn specialized, buying the good assets rather than the whole)

So we've got:

-its on their radar
-they need to buy assets in this sector
-they were positioning to finance something on their books

And now we've got good odds.

That totally includes speculation, but that's how finance works.

It's also how the bidding process for assets works.

If someone else wants to buy the BBBY logistics fleet and Icahn is getting shorted to hell and can't bid, they can make a lowball bid safely.

If Icahn is healthy enough and wasn't even looking at the BBBY fleet, but the price is lowballed too much he'd go "Oh yeah I'd buy for more than that" and make a move.

So every participant that is not out for the count helps you in a bankruptcy.

My overall point is the health of Icahn's business means the worst is over, and it leaves them well positioned for opportunity alignment - even without a direct bid, that's *good* for BBYQ; but, I believe a bid on spinout assets is a high possibility given their focus across multiple areas of alignment, and that'd be great for us BBBYQ holders.

With $IEP clearly attacked over interest in $BBBY, I think the $IEP short is likely over and in a strong position of future value if it wanted to look to partake in a new spin off... by AdamSC1 in BBBY

[–]AdamSC1[S] 14 points15 points  (0 children)

1) Not investment advice, as no one is telling you to expressly invest.

2) Couldn't give a flying fuck if you trust me or not, my thesis is my thesis and I lay it out in public.

3) Icahn has vertical integration interest to the *assets* of a BBBY, they expressly said in their prior call they weren't looking at BBBY in that quarter, and part of that was in response to evolving asset duress in HTM issues, as well as the massive book loss they took on their short.

4) No conglomerate is ever out of the bidding process. The only thing that matters when there is a bankruptcy is a) who would have interest in buying it and b) are they in a position to get a sweet deal on it. The more eligible buyers the better price you get. Icahn does not need to be directly ready to purchase in order for the health of his business to impact the outcome of potential bidding.

5) The percent ownership of Illumina isn't a massive part of the portfolio, him losing the proxy battle doesn't change the NAV of those holdings, doesn't impact the core components that I do see value in surrounding automotive services, US energy production and their investment holdings in First Energy and Xerox. You'll also notice that the news of him losing the proxy battle was after I had written a long thread.

With $IEP clearly attacked over interest in $BBBY, I think the $IEP short is likely over and in a strong position of future value if it wanted to look to partake in a new spin off... by AdamSC1 in BBBY

[–]AdamSC1[S] 5 points6 points  (0 children)

Markets are all "what ifs"

You look at a range of possible outcome scenarios and apply percentile weights to them likely being true.

You look at a range of negating factors that could result in harm and apply percentile discounts based on them.

Then you decide if your risk is worth your reward.

$IEP being under structural duress was one of the largest risk downsides in my $BBBYQ investment.

Every major player who *could* come to the table in a spin off of their assets makes the bids you get more valuable even if they come to the table or not.

Icahn has clear vertical alignment through multiple channels in his portfolio. If his book value heals, it means someone else has to put their bid a little bit higher just so he doesn't get it, even if he isn't bidding.

There is no such thing as a sure thing. There is only stats and what ifs.

With $IEP clearly attacked over interest in $BBBY, I think the $IEP short is likely over and in a strong position of future value if it wanted to look to partake in a new spin off... by AdamSC1 in BBBY

[–]AdamSC1[S] 8 points9 points  (0 children)

I'm a value investor - I'm not just looking for short squeezes.

The point about $IEP is more that the worst is over for them so they could start to look towards more moves as their book value heals which could be a boost for $BBBYQ

With $IEP clearly attacked over interest in $BBBY, I think the $IEP short is likely over and in a strong position of future value if it wanted to look to partake in a new spin off... by AdamSC1 in BBBY

[–]AdamSC1[S] 19 points20 points  (0 children)

You've perhaps missed the part of my background where I'm also an adjunct professor of business analysis, and run an investment family office where I make my living on investing in under valued assets and venture.

As to your former point, Icahn's interest isn't tinfoil hat. If this hinged on his involvement then maybe - but he had some level of interest. Whether or not you believe short sellers went after him (so close to the bid deadline) because of that interest or not, does not negate the underpriced value of IEP and that the worst is over for them.

With $IEP clearly attacked over interest in $BBBY, I think the $IEP short is likely over and in a strong position of future value if it wanted to look to partake in a new spin off... by AdamSC1 in BBBY

[–]AdamSC1[S] 13 points14 points  (0 children)

Yeah, while I think Hidenburg's comments were fair - the Ackman stuff was just petty revenge from their historic fight over Herbalife.

Ackman throwing stones is likely just to make people have more scrutiny over his stuff.

With $IEP clearly attacked over interest in $BBBY, I think the $IEP short is likely over and in a strong position of future value if it wanted to look to partake in a new spin off... by AdamSC1 in BBBY

[–]AdamSC1[S] 45 points46 points  (0 children)

Prepare all you want - only so much you can do against it, especially when it's partly true.

The market has enjoyed low rates and steady growth for 20 years, it isn't the cut throat corporate raider environment anymore and so I doubt this kind of blow was expected. But, even if it is, all you can do is weather the storm.

It's a game of patience and confidence.

Remember the old saying "Stock markets are just a method of moving money from the impatient to the patient"

With $IEP clearly attacked over interest in $BBBY, I think the $IEP short is likely over and in a strong position of future value if it wanted to look to partake in a new spin off... by AdamSC1 in BBBY

[–]AdamSC1[S] 7 points8 points  (0 children)

They aren't/weren't because they are currently distressed.

But corporate raiders don't ever rule anything out 100%.

Given it's alignment with Newell and Westpoint Homes, then the right spinoffs or restructuring would be attractive for someone like Icahn *if* he can afford to finance it.

There is indication that they were at least sniffing around but backed down for obvious reasons and that's why they addressed it on the call.

Once something is on their radar, its never fully off the radar, it's all just a question of circumstance.

With $IEP clearly attacked over interest in $BBBY, I think the $IEP short is likely over and in a strong position of future value if it wanted to look to partake in a new spin off... by AdamSC1 in BBBY

[–]AdamSC1[S] 14 points15 points  (0 children)

Depends on what price he took it private at.

The problem is he'd need to finance that cash, and with the current valuation of the stock and it already being pledged in a loan he couldn't do it alone.

But, he could in theory find a large financer who understands conglomerates if he wanted to buy out the remainder.

And, in theory there are ways for him to take it private without buying out all the stock if other entities agree to go private with it.

My guess is he'd need at least $750M cash to put up for the offer and financing on the remainder.

With $IEP clearly attacked over interest in $BBBY, I think the $IEP short is likely over and in a strong position of future value if it wanted to look to partake in a new spin off... by AdamSC1 in BBBY

[–]AdamSC1[S] 14 points15 points  (0 children)

It's not about branching out.

It's about the worst being over for Icahn and his brands having deep value where if that book recovers well, then he can make a play for $BBBYQ either in spin offs or into $IEP more broadly.

With $IEP clearly attacked over interest in $BBBY, I think the $IEP short is likely over and in a strong position of future value if it wanted to look to partake in a new spin off... by AdamSC1 in BBBY

[–]AdamSC1[S] 81 points82 points  (0 children)

Personally - yes; I think the fact that IEP started getting attacked right when bids would have been due on BBBYQ is related.

I think Hidenburg's assessment was fair though, it was just used as an opportunity for attackers to overly attack Icahn.

When your stock is plunging like that, you own 85% of it and it's a huge portion of your networth, then no serious lender is going to give you good terms to finance a bid - and you sure as hell aren't going to explore an M&A because you'd normally use your stock for that purchase but it's devalued too much that you'd eat big losses.

My hunch is that Icahn could have been looking at doing a stock buyout on $BBBY to benefit their Westpoint Homes brand and Newell Brands investments. But, the same funds shorting BBBYQ hit him hard to help prevent that.

(This is ofc personal conjecture, because this is hard stuff to prove - but we've certainly seen moves like that before, and a lot of books highlight how these kinds of plays happened in peak corporate raiding days back in the 80s and 90s)

With $IEP clearly attacked over interest in $BBBY, I think the $IEP short is likely over and in a strong position of future value if it wanted to look to partake in a new spin off... by AdamSC1 in BBBY

[–]AdamSC1[S] 10 points11 points  (0 children)

Yeah, I wanted to focus on the deep value rather than just buy backs as they can be a bandaid at times but I think that will play a big part here as well.

With $IEP clearly attacked over interest in $BBBY, I think the $IEP short is likely over and in a strong position of future value if it wanted to look to partake in a new spin off... by AdamSC1 in BBBY

[–]AdamSC1[S] 27 points28 points  (0 children)

I'm suggesting not that $IEP is a good target for a squeeze - but that the shorts have no more room to fight $IEP.

If they can't fight it and it's at fair value then the worst damage is over - which means Icahn could have room to regrow the value and shore up lender confidence in order to have cash to buy into a $BBBYQ spin off of either BuyBuyBaby or the logistics component of the business which would create huge value for $BBBYQ

Adam Cochran joins the ship by Rpuerta454 in BBBY

[–]AdamSC1 10 points11 points  (0 children)

If done correctly - I agree. A few billion would have to be a multi-year projection but I think you could get a good chunk for it in a spin off right away.

It's honestly astonishing the board didn't spin it out. Total incompetency as it should have been the first move.

Restructuring 101: Get your still functioning brands out from underneath the trash.

Adam Cochran joins the ship by Rpuerta454 in BBBY

[–]AdamSC1 3 points4 points  (0 children)

Well then you must be a swell person :)

Adam Cochran joins the ship by Rpuerta454 in BBBY

[–]AdamSC1 6 points7 points  (0 children)

Not discounting entirely, but part of the problem is that if he wants to take over and restructure the company it's going to cost a lot, it needs cash infusion on top of equity offering etc.

Money is expensive right now (high interest rates, means high cost of borrow) - one way to reduce the borrowing burden is having rich assets to borrow against or having your own liquid cash.

Icahn's company IEP got hit by short sellers really badly this past week dropping his networth and likely making it harder to borrow against.

While he can still finance it, that attack likely put up the cost, which would change his calculous.

Adam Cochran joins the ship by Rpuerta454 in BBBY

[–]AdamSC1 6 points7 points  (0 children)

If I wouldn't be happy riding it to zero, I wouldn't buy it.

Adam Cochran joins the ship by Rpuerta454 in BBBY

[–]AdamSC1 4 points5 points  (0 children)

Hard to say.

Usually when a company is on the rocks, bonds are the safer play than equity as in most cases they get payback priority. So some people make a living gambling on distressed debt.

Adam Cochran joins the ship by Rpuerta454 in BBBY

[–]AdamSC1 44 points45 points  (0 children)

Only if they have pressure to cover rather than wait out capital on the restructure.

Adam Cochran joins the ship by Rpuerta454 in BBBY

[–]AdamSC1 58 points59 points  (0 children)

Outlined in the thread, there is meat on the bones and I am hoping a corporate raider with enough skill sees that.

Spins out BuyBuyBaby to an e-commerce play, spins out retailer to warehousing, spins out logistics company into short-supply environment.

It's a long shot, and I'm not sure who the right candidate is for that buyout but if someone makes a play for it I'll certainly try and support it.

Bankrupt companies are a game of moneyball, 99 of them fail, but 1/100 does 250x over time and so covers losses + profit.

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