M&A Hot Stove

tpltblogger11 Comments

Is it cooking?

Rundown of events:

-TPL wins judgement in court

-Defendants file for appeal and include a request for a stay of activity (no new shares)

-TPL (on Jan 5) files their opposition to the stay. Part of that opposition is a sealed affidavit of Chris Steddum, CFO.

-It costs me $46 a click to get court docs but not this time because the affidavit is SEALED.

What’s so secret? What does the sealed affidavit contain? Is the company cooking something up?

What kind of outfit is going to take payment for itself or for assets in the form of a stock of a company that sues its shareholders regularly? A desperate one, probably.

11 thoughts on “M&A Hot Stove”

    • Interesting letter from Murray Stahl. He said he isn’t opposed to issuing or exchanging share of TPL for another asset as long as it is “unique and rare”, in other words creates more value than holding a share of TPL.

      The hard part is finding another asset that can provide more long term value than just holding TPL, doing the financial calculations and finding the evidence to support the claim would take a lot of work.

      For example TPL’s 10 year Compound Annual Growth Rate (CAGR) is 29.7%. Take a look at some comparisons:

      Last 10 Years CAGR

      NVDA 61.6%
      Tesla 33.4%
      Monolithic Power systems 33.1%
      Dexcom 28.3%
      Eli Lily and company 27.5%
      Old Dominion freight line 27.4%
      Copart 27.3%
      Microsoft 26.2%
      Apple 25.9%
      Amazon 23.9%
      Facebook 18.4%

      Of course this is only the last 10 years, only Nvidia, Tesla, and Monolithic Power beat TPL’s CAGR that I could find.

      This isn’t even looking at shares being diluted, consistent free cash flows, low capital operating costs. Also are the companies in a sector that is cyclic, is the company so large that it can’t keep growing at that rate in the future. So many variables to factor in.

      Murray Stahl’s articles and interviews are definitely thought provoking.

      Would be interested in hearing anyone else that know of some long term stocks or investments that can beat TPL’s 10 year CAGR or better yet 20 or 30 year CAGR.

      Liked by 2 people

      • Forgive me for statin the obvious but he mentions Bitcoin 26 times in that letter. With FASB accounting rules changing in 2024 and companies about to more easily hold Bitcoin on the balance sheet, perhaps the answer is already in front of us.

        Like

        • Forgive the typos in my first reply, I’m yet to have my coffee!! Something to ponder… HK is the largest institutional holder of GBTC, the grayscale Spot Bitcoin ETF, which charges a 1.5% fee. Could Murray be looking for a deal to replace that with actual bitcoin?

          Liked by 1 person

        • Stahl is still filing an appeal. In any case, what would that do for TPL if HK wanted to swap their GBTC for BTC proper?

          Like

  3. Since Bitcoin ETF’s were just allowed by then SEC, I think it’s likely that he’s going to redeem his holdings in Greyscale and buy bitcoin ETF’s that charge a lower fee.

    Liked by 1 person

  4. ohthatbdawg,

    That is a good point GBTC is a large holding of his. Think his average buy price was $9.85 per share according to Hedgefollow website.

    He also is invested in FRMO and WELX. FRMO is his closed ended fund that you earn money from Horizon Kinetics management fees of running their company and has investments in Consensus Mining Crypto company, WELX, and HM tech a crypto mining repair company. https://www.frmocorp.com/index.html

    WELX holding he has been investing in by purchasing brand new crypto mining equipment and trading it for shares of WELX.

    I’m waiting for Consensus Mining to be listed on the stock exchange, its passed its accounting audit and hopefully be listed soon. https://www.consensusmining.com/

    So he is growing and holding his share of Bitcoin. He also has a smaller amount of Litecoin and Bitcoin Cash. Bitcoin cash he thinks has a potential of making a large appreciation if it only raises a small % of Bitcoin’s price.

    Since this is TPL Blog I don’t want to run off topic.

    Liked by 2 people

Comments are closed.