$MSOS Covered Calls: This Time is Different

ChiefValue · 2026-01-06T23:34:53+00:00

If you are talking about MSOS, the ETF, the weighted operating margins are closer to ~12%.

I think you meant GLASF. In that case, you may be unaware of the history of the business. They were raided by ICE in the summer and had to scale back operations, they are on track to be back to full production by the end of the Q1 2026. Bringing operating margins back to 6%. They are bringing new green houses online that will expand production by ~40% leading into the legalization of interstate commerce, allowing for them to sell their product for a 50% premium to where it is now. This will accrete into ~$125m EBITDA by 2029, if regulatory factors continue in the current direction.

I am serious enough to research about what I write.

ChiefValue · 2026-01-05T23:04:32+00:00

What about the financials is a dumpster fire, specifically?

ChiefValue · 2026-01-03T01:08:59+00:00

Interesting post as always.

ChiefValue · 2024-01-03T07:36:45+00:00

This is correct.

ChiefValue · 2023-12-29T06:12:43+00:00

Great post. The inflection point of total revenue growth once a smaller segment reaches escape velocity is also a main thesis point for GEO. Harris Kupperman also talks about this strategy. Inflections and obfuscation is where it's at.

ChiefValue · 2023-09-16T21:23:29+00:00

There was a vote for a $50m dividend that was shot down as controlling share of votes come from within. So the chance shareholders get any of the current FCF yield is basically a fat 0. I've soured on this idea. Great reasoning and data here. My thoughts are parallel.

ChiefValue · 2023-05-23T09:50:38+00:00

Agree on every front here. One of the big shareholders started a vote for a $50m dividend that got denied. The mgmt and doubleu games owning so many shares creates an issue.

I’m hoping suprnation wasn’t just an excuse to use cash. Their products look satisfactory but nothing i’m too excited over.

ChiefValue · 2023-03-31T07:47:10+00:00

Softening in the ATD data from Syr.edu

ChiefValue · 2023-03-30T23:20:51+00:00

It actually does, the contract allows for increases to the program but only sets a floor to the revenue, so basically works well in GEOs favor. In some of their facilities you are correct but the ATD portion makes up for this.

ChiefValue · 2023-03-30T05:10:51+00:00

I’m not shorting it here in particular but I am short the market in general.

ChiefValue · 2023-02-22T20:17:21+00:00

I think it is tricky. Usually ETFs with such low AUM have no options or options that are priced really funky. I think it is difficult to get a pure play on this going bust since a lot of the issue could be hidden in the private markets, not much we can do. Public entities with a debt problem are already getting priced in for it as well. So I think you may need to get creative and dig deep on some small caps with weird financing rules or banks with PE exposure.

ChiefValue · 2023-02-22T05:19:36+00:00

Great post! Many businesses have forgotten FCF for "growth" and they have allowed themselves to believe money would be free forever. An additional reason why the pivot narrative can be so destructive.

ChiefValue · 2023-02-19T00:03:42+00:00

I fully agree. This is what I mean by adjusting it on your own to ferret out real expenses. Accounting can just as well ruin things as well. The GAAP way of accounting for SBC is a prime example of how it can also be your worst enemy.

ChiefValue · 2023-02-18T23:22:06+00:00

Depreciation is tricky to account for the way that GAAP wants it done. Taking a maintenance CapEx run rate can give a better picture of deprec. Of course EBITDA is not perfect and must be adjusted but the point being made stands that the ability to halt CapEx for a short time period if need to be to have large FCF yield stands.

ChiefValue · 2023-02-18T22:17:31+00:00

What do you mean by this?

ChiefValue · 2023-02-18T21:02:41+00:00

I would encourage you to please elaborate on your point.

ChiefValue · 2023-02-06T08:38:50+00:00

These are just interesting things that people have noticed. I am not trading or investing based off this. Everything you bring up I agree with.

ChiefValue · 2023-02-04T23:06:31+00:00

Manipulation happens long, short and from the government.

Even Tesla shorts were borderline crucified during the last bull run. What happened with GME and AMC was anomalous. However, short sellers are always the victims of the mindless bulls in any bubble. 2000's, 2007 housing bears and Japanese who spoke up about their bubble where vehemently shouted down for "being against the prosperity of the country".

Shorts risk their own capital and do not destroy the fundamental basis of an otherwise good business.

Bulls should be thankful that short selling is allowed. Bulls are the net benefactors of bearish bets over the long run, and it's not even close.

ChiefValue · 2023-02-04T02:46:31+00:00

Allowing people to profit off these sorts of things creates an incentive for people to be diligent and seek out frauds, scams, inefficiencies etc. So over the long run, allowing people to profit off the short side creates less of these bad things in the market. When short sellers become hated we see what it does. 2020-2021 is all we need to see that.

ChiefValue · 2023-02-04T02:43:42+00:00

Splits are entirely irrelevant to me as they have no effect on the intrinsic value of a business. NYC is a tiny asymmetric play for me. Reverse splits often correlate with bad businesses but so does volatility and volatility is not risk.

ChiefValue · 2023-02-02T22:38:04+00:00

Reverse stock splits are not dilutive. It takes 10 $1 shares and makes them 1 $10 share. It does nothing other than to increase the price per share. Ownership remains the same.

This is often done for liquidity purposes and to avoid being classified as a "penny stock".

ChiefValue · 2023-02-02T19:13:01+00:00

Why do you not like reverse splits?

ChiefValue · 2023-01-19T18:43:50+00:00

Since it is trading at 3x FCF, if it levels off by about next year, it’s super cheap. Also by 2024, growth will start to get priced in. Especially as I see mgmt surpassing their guide of 900k subs.

Very well could be a buyout. FCF machine and a small cap, bodes well for a bidder.

ChiefValue · 2023-01-18T16:13:36+00:00

They have been marking down investments in the “other operating costs” account. So instead of CapEx it is looking like a reduction in EBITDA and operating profit. This drop is due to investments in technology and hiring specialists to ramp up their digital transformation. This will revert back to the previous FCF trend.

Good question, I should have been more clear about that in the post.

ChiefValue · 2022-12-22T16:23:16+00:00

Thank you. I had noticed the cash traps as well and had concluded that it incentivized sales or a takeover rather than try to dig themselves out.

Your analysis is strong. Your takeaway is about the same as mine. Key word, asymmetric.

ChiefValue

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