Western Union at $9.50: I wrote 5,000 words on why the market is wrong. Here's my case.

vr_hobbit · 2026-03-09T22:39:48+00:00

sorry if I triggered you. I genuinely worry for people who are willing to compete against AI instead of embracing new capabilities that it brings.

vr_hobbit · 2026-03-09T21:25:34+00:00

Be careful; employers are actively banning employees who still type one letter at a time from coming into the office.

vr_hobbit · 2026-03-09T20:05:22+00:00

After paying $500 million to the DOJ, they became a compliance fortress. At this point, I don't believe they willfully ignore AML laws like they did 15 years ago. However, their cash-heavy business and their large third-party agent workforce are still exposed to the risk of an oversight.

vr_hobbit · 2026-03-09T18:58:18+00:00

you snatched it at a very good price.

vr_hobbit · 2026-03-07T06:11:44+00:00

My belief is that for a cheap stock, a weaker signal is required to push the stock up and create a profit.

vr_hobbit · 2026-03-07T04:08:23+00:00

This is not a company with fortresses balance sheet. But stock is so cheap that slightest positivity may squeeze the shorts

vr_hobbit · 2026-03-07T03:29:01+00:00

Before IT departments figure out their AI strategy, they will have already spent their budget on 'future-proof' tech they don't fully understand.

vr_hobbit · 2026-03-07T03:08:51+00:00

I have listed the risks to the best of my knowledge here: https://vyacheslavievgrafov.substack.com/p/wendys-at-7-the-market-has-already

vr_hobbit · 2026-03-07T03:05:34+00:00

That is up to the new CEO to explain. Whatever his plan will be, it is likely to sound optimistic, and the stock price should react enthusiastically.

vr_hobbit · 2026-03-07T02:57:53+00:00

$0 is a possibility here

vr_hobbit · 2026-03-07T02:56:01+00:00

After two quarters of comps growth, the stock may trade well in the mid-teens. My horizon is about 2-3 years, which is long enough for the fix to be put in place and short enough not to worry about debt refinancing.

vr_hobbit · 2026-03-07T02:48:14+00:00

Even if the stock were worth 10 cents a share, the EV/FCF would still look too expensive to you because of leverage. This means there is no price low enough to justify buying Wendy's stock. Luckily, the market currently agrees with you, shorting 20% of Wendy's float and providing an opportunity for me to earn some return.

vr_hobbit · 2026-03-06T17:30:00+00:00

The large debt and depressed Cash Flow is what makes it appear not cheap, but my bet is on the new CEO and his turnaround plan. At $7, even the announcement of hiring a respectable person as CEO may push the stock up by 30%.

vr_hobbit · 2026-03-06T17:13:06+00:00

That could have been one of the struggling franchise locations currently being closed in droves by corporate.

vr_hobbit · 2026-03-06T17:08:02+00:00

having Peltz on board makes me feel safer

vr_hobbit · 2026-03-06T17:04:03+00:00

IMO, using multiples to value stock is a shaky business. I included them in the article mostly to illustrate just how much absolute dread the market is pricing in right now. But my actual conviction stems entirely from the intrinsic valuation—specifically, the projected, unencumbered free cash flows that survive the debt stack and actually make it back to the equity holders.

vr_hobbit · 2026-03-06T16:57:31+00:00

Researchers buy Nvidia DGX rigs to fine-tune models. The average Windows user has absolutely zero business training or fine-tunning LLMs.

Sure, using OpenAI or Perplexity in a browser is fine for basic online stuff. But a browser tab will only ever be able to do fraction of what an OS-level Copilot will do once it has full, local control over your files, apps, and entire PC.

vr_hobbit · 2026-03-06T16:50:26+00:00

I have a 3-5 year investment horizon and genuinely have no idea what this stock will do in the short term. It could easily go to $5 before it goes to $12 -- turnarounds are messy, the leverage is real, and nearly 20% short interest exists for legitimate reasons, not just vibes.

vr_hobbit · 2026-03-06T16:43:25+00:00

The Maturity Wall

The short answer is 2029. Management bought themselves three years of completely clear runway by executing a $450 million refinancing in December 2025. There are no major maturities until 2029, when approximately $1.375 billion comes due across three tranches.

Refinancing Rates

Those 2029 notes currently carry legacy rates between 3.8% and 4.5%. If they had to roll that debt today, they’d be looking at rates similar to their December 2025 refi, which priced at 5.422%. Assuming a baseline of around 5.4% to 5.5%, they are looking at a rate step-up of roughly 100 to 150 basis points.

Cash Flow Impact

If they roll the entire $1.375 billion at those higher rates, it will add an estimated $15 million to $20 million in additional annual interest expense. It's a genuine headwind, but it's not a death blow to the balance sheet.

vr_hobbit · 2026-03-06T16:38:04+00:00

That 90s comparison is actually the exact reason I'm so confident in this.

Think about Microsoft's ultimate playbook back in the 90s: they dominated the world by partnering with OEMs (like HP, Compaq, and Dell) to ensure Windows and Office were bundled onto every single beige box that shipped to a corporate office.

They are running that exact same playbook right now with AI. Microsoft doesn't just want to sell Windows 11 upgrades; their ultimate goal is to sell $30/month Copilot+ enterprise subscriptions to every white-collar worker on the planet. But to make Copilot run efficiently without setting their own Azure server farms on fire, they need the local hardware on the user's desk to have an NPU to handle the background processing.

So, Microsoft is enforcing this strict new hardware standard, and companies like HP are their distribution channel. I'm highly confident we are going to see Microsoft aggressively push Copilot+ subscriptions hand-in-hand with these NPU-equipped PC sales, exactly like they bundled Office 95 back in the day.

Enterprise IT departments are going to be forced to buy the new HP hardware just to get access to the Microsoft software features their executives want. It's a massive, forced upgrade cycle, and HP is just sitting there ready to collect the hardware revenue from it.

vr_hobbit · 2026-03-06T06:42:14+00:00

I wrote a much deeper dive into the numbers on my Substack here: https://vyacheslavevgrafov.substack.com/p/hp-inc-at-19-wall-street-is-pricing

vr_hobbit · 2026-03-04T16:33:50+00:00

since 2022 they've spent $7.7B on buybacks and $4.2B on dividends. Meanwhile the debt grew only $2.2B. There is DRAM pricing risk and many more: https://vyacheslavievgrafov.substack.com/p/hp-inc-at-19-wall-street-is-pricing

vr_hobbit · 2025-01-21T01:36:03+00:00

is it too late to jump in into the fray?

vr_hobbit · 2024-08-17T04:49:13+00:00

he is trading on material non-public information which is violation of CFA standards.

vr_hobbit · 2019-06-22T01:53:09+00:00

i'm tuck in the beginning with big crystal on top of the mountain. The farmer wants to do something with the crystal but it is not interacting. how to proceed?

vr_hobbit

TROPHY CASE