Investment Pitches

Pitch Summary:
The author argues that Remedy Entertainment is at an inflection point similar to CD Projekt Red before its breakout success, with the market failing to recognize the company’s transformation. Remedy has transitioned from a work-for-hire studio into a fully self-publishing, IP-owning developer with multiple AAA franchises. Over the past decade, it has scaled from producing one game every four years to being structurally capable of launching one major title annually by running four parallel development cycles. The author contends that Remedy’s upcoming slate—Firebreak, Max Payne 1&2 Remake, and Control 2—represents a recurring pipeline where any single hit could equal or exceed the company’s entire market cap. They highlight the acquisition of key IP rights, improved publishing deals with top-tier partners, strong insider ownership, and back-catalog royalties that alone justify much of the valuation. With EBIT potentially reaching 35–40 million EUR in 2026 and over 70 million EUR in 2027, the stock trades at extremely low implied multiples. The market’s skepticism, recent sector-wide pessimism, and misunderstanding of Remedy’s structural shift have created what the author believes is a highly asymmetric risk/reward setup.

BSD Analysis:
Remedy sits at the intersection of high-end content creation and scalable IP leverage, a space where hit dynamics can transform long-term earnings power. Its move toward annual releases reduces revenue cyclicality, spreads development risk, and increases the probability of establishing durable franchises—critical in the modern gaming landscape. Owning key IP rights gives Remedy far more economic participation and strategic flexibility than under its earlier publishing structures. Its partnerships with Epic, Annapurna, and Rockstar signal industry validation, while Tencent’s ownership stake underscores strategic optionality, including potential M&A scenarios. Back-catalog performance provides a growing base of recurring, high-margin revenue that can smooth cash flow between major releases. Still, the model remains exposed to execution risk, hit-dependency, and the inherent volatility of AAA development costs. Competitive intensity in action RPG and shooter genres is high, and production delays could challenge the one-game-per-year cadence. However, given its IP depth, improved economics, and structural scale-up, the valuation disconnect appears unusually wide for a studio with Remedy’s pedigree and optionality.

Actual Post Content:
World’s Cheapest AAA Gaming Play $REMEDY Remedy Entertainment? Remedy Entertainment At The CD Projekt Red Moment For those who followed CD Projekt Red $CDR knows that after Witcher 3 it changed everything for the company - the company multiplied in short order year after year. A studio like CD Projekt Red which is very rare in a global setting has the infrastructure to produce world-class titles. One other that is pivoting and by far not understood by the market is Remedy Entertainment producing some of the most beloved titles ever created in gaming including Max Payne, Alan Wake and Control. The company is now for the first time in its history set to produce more world class titles with mass-market appeal and recurring yearly release. Let’s first have a closer look on key parts of the history of $Remedy: Remedy’s business is very differently structured operationally from 10 years ago and likewise even from five years ago which is not all, at least currently, understood by the market. To get a grip on this, the company started as work for hire for around 30 years ago and then around 10 years ago pivoted to partial self-publishing, contract with a publisher, where Control was its first title and a sales success and got rid of its work-for-hire business to concentrate on self-publishing where the major value centers around. The capacity 10 years ago was one game per 4 years and improved in 2020 to one game per 3 years. Fast forward to 2025 doubling the staff roughly in the last 8 year period and the company is now ready with teams - optimized to be able to deliver on average one game per year. That will most likely propel the business in the future. Finally Remedy is for the first time in its history ready to release one new game per year with four simultaneous spinning 4 year cycles of development. Notably, while many large and smaller players had to shut down or limit their games productions in recent years, Remedy went directly in the opposite direction, scaling up to catch the opportunity - all made possible because of its robust business and the balance sheet strength. Not surprisingly either, the company is owner operated with c. 50% insider ownership. This is clearly not understood by the market at all, as if each of the game’s potential in terms of sales can exceed or half of the market capitalization of the company, the latter being tilted clearly on the low sales outcome but more on that later. The argument that has for long circulated with Remedy is that they do niche games while they consistently also underestimated the sales trajectory of these “niches” (also one of the reasons why arguably the major price to value situation exists) but reality now is entirely different - this is not their strategy any more the company is focused on making mass-market appeal games within large genre’s with large commercial successes going forward - FBC Firebreak with multiplayer co-op aspect is a clear testament to this evolution. Control 2 pivots to the very large action RPG segment and Max Payne 1&2 Remake together with one of the most premiere studios in the world focusing on mass market games - Rockstar Games / Take Two $TTWO. Furthermore, the company has clearly bought its own future in its hands with buying all the rights to Control franchise in 2024 from 505 Games / Digital Bros $DIB and to Alan Wake in 2019 from Microsoft XboX $MSFT. Business decisions along with recent favorable deals with world class gaming companies most likely means that the company has learnt their lesson to only do deals with the few global tier-1 gaming companies and not selling its upside potential to another entity. Indeed, it is evident the company has pivoted to better strategic decision for the business and shareholders by having favorable publishing deals set with large recognized players Epic Games for Alan Wake and the Oracle linked Annapurna Pictures for Control 2 and also possible franchise films through Megan Ellison (daughter of Larry Ellison) who is the CEO and founder. This seems to be a great decision not only to increase royalty income from movies or series based on unique stories from the Remedy universe, but also as a significant step to help the IP reach new players and become more mass market through future games like Control 2. Remedy is again one of the few developers also working with Rockstar Games one of the planet’s most successful IP games companies. It is clear that Remedy is structurally very interesting - Tencent has bought shares in the company already three times in the last five years owning 15% (last time in 2024). But let's dive more into this topic a bit later. Favorable Extreme R/R Profile With Zero Level Expectations On Delivery FBC Firebreak is its first 100% profit accretive game. The game alone easily has the potential to deliver millions of copies the talk/previews are clearly positive overall for the game but lets only count with around a half of million - the result? EUR 20 million EBIT for 2025 vs EV of C. 200M - c. 10X EV/EBIT. The case is not FBC Firebreak albeit looking favorable, the case is the pivot to high quality recurring yearly releases where it is only a matter of time they release a hit that far exceeds the market cap. All of the upcoming years it is highly likely that the company has a reasonable shot at producing close to or above its market capitalization. But there is more dynamics that is playing that is directly bottomline accretive. Namely that Control franchise sales came in effect only starting in the beginning at the new year shift in to 2025 and secondly Alan Wake 2 generated its full quarter of its royalties since launch in late 2023. In conservative terms with release of Max Payne 2 most likely in H2-26 the company is set to produce 35-40 million EUR in EBIT in 2026 (4x EV/EBIT) and then in 2027 with Control 2 with larger audience target it's clear that the company has the shot in a conservative scenario to produce >EUR 70M EBIT (

Pitch Summary:
The author argues that EAF is positioned at the bottom of a pricing cycle in a deeply out-of-favor industry with limited spare capacity. They highlight insider buying and activity from foreign competitors as indications of improving conditions. The company is expected to benefit from the reshoring of U.S. steel production, which requires substantial investment in electric arc furnaces and thus more graphite electrodes. EAF is described as the lowest-cost producer with vertical integration through needle coke, providing structural advantages over peers. As steel gains share within the broader metals mix in the U.S., demand for electrodes should rise. With the stock trading at a low valuation and the company carrying leverage, the author views it as having high torque if earnings begin to re-rate alongside tightening supply-demand dynamics.

BSD Analysis:
GrafTech represents a cyclical, capacity-driven industrial materials business that is highly sensitive to steel industry capex, particularly the build-out of electric arc furnace capacity. Vertical integration into needle coke gives the company cost and margin stability that competitors often lack, but dependence on a concentrated end market adds inherent volatility. The long-term shift toward EAF steelmaking in the U.S. creates a structural demand tailwind, though the timing and magnitude can vary with macro cycles. Supply discipline from global producers would be key to maintaining pricing power in electrodes, which historically have experienced sharp boom-bust periods. Leverage amplifies both upside and downside, making earnings momentum critical. If the supply-demand balance tightens as expected, the company could see a meaningful re-rating, but execution risk, commodity exposure, and global steel-cycle uncertainty remain central considerations.

Actual Post Content:
$EAF Thesis Pricing cycle appears to have bottomed, hated sector with limited spare capacity Directors are buying, as well as foreign competition Beneficiary of US insourcing of steel production, requiring capex on arc furnaces and therefore electrodes … that only $EAF can produce Lowest cost producer of graphite electrodes and vertically integrated operations of needle coke Beneficiary of rising steel wallet share in US Levered asset trading at a low valuation offering significant torque if and when earnings rerate

URL: https://x.com/jupiters_string/status/1928531749874634779

Pitch Summary:
Mining equipment OEM with dominant slurry pump installed base, 80% aftermarket revenue, and structural growth tailwinds from ore-grade decline and production intensity.

BSD Analysis:
Weir is a “pure play” mining OEM (grinding, crushing, pumps, cyclones, GETs via ESCO) with ~£2.5B FY24 revenue and ~19% adj. op margin. Its global Warman slurry pump franchise underpins an unrivaled aftermarket business—50% of sales and majority of profit—with 80% of total revenue recurring. Pumps in abrasive slurry environments require frequent part replacements (often >100% of OEM price/year) at 50%+ GM. This entrenched base, global service centers, and IP-protected foundries create high switching costs and barriers to entry. Trading at ~12x 2026E EV/EBITA, WEIR’s valuation doesn’t capture its durable, high-ROIC model or optional upside from a future mining capex upcycle. Structural tailwinds include declining ore grades (more rock processed per ton of output) and potential copper/gold demand from energy transition. Cost-out and restructuring programs support near-term margins. Micromine acquisition adds digital optionality, though capital allocation bears watching.

Pitch Summary:
Potential dilution via new offering; High debt, negative cash flow and low cash reserves strain liquidity.

BSD Analysis:
Report flags liquidity and dilution risks tied to shelf/registration usage and asset-level leverage. Infra portfolio requires ongoing capex amid a higher-rate regime; cash coverage for distributions and growth is tight, leaving downside if asset sales slip or financing costs rise. Monitor non-recourse debt covenants and any equity issuance against volatile project cash flows.

Pitch Summary:
Nippon Pigment's acquisition of Sumika Color, now rebranded as PLASiST, from Sumitomo Chemical presents a unique opportunity for growth. The acquisition was structured as a bargain purchase, resulting in a significant one-time gain for Nippon Pigment. This strategic move is expected to enhance the company's revenue by approximately ¥13 billion annually, potentially improving its pricing power and competitive position in the specialty chemicals industry.

BSD Analysis:
Nippon Pigment's acquisition of Sumika Color is a strategic play that could significantly alter its financial trajectory. The company recorded a substantial negative goodwill gain of ¥6.8 billion, which is unusual but indicative of the favorable terms of the acquisition. Despite historical revenue declines, this acquisition could reverse that trend by adding substantial revenue and potential synergies. The company's valuation, with a P/B ratio of 0.25x and a P/E of 7x, suggests it is undervalued, especially given its NCAV+Investments per share of ¥8,522. However, the success of this investment hinges on effective integration and realization of synergies. The stock's illiquidity and the company's small size may deter activist investors, but a focus on improving shareholder returns, such as increasing dividends, could lead to a re-rating of the stock. Investors should monitor the company's ability to capitalize on this acquisition and improve its capital returns.

Pitch Summary:
Sea Ltd (SE): In last quarter's letter, I outlined Shopee's logistics investments and how it's helped the company defy skeptics who claimed "Shopee has no moat" years ago (LINK). In a similar vein, another often heard complaint was that Shopee had gotten overly confident and expanded too much during the boom times. Most notably, they simultaneously launched Latin America, India, and Europe in 2021. The implication was that they were wasting investor capital and this is a signal of management's poor decision-making. But was this really true? Was management actually harming the business's long-term prospects? Or were investors just frustrated over a declining stock price? I disagreed with this notion 2.5 years ago, arguing that I thought it was the right move to make, with the information available at the time (LINK). Companies that experiment and try to find new growth avenues are good for shareholders – as long as the initial costs are small, and the decisions can be reversed quickly. After all, how else will you know where the boundaries of your company / products are, if you don't occasionally test them? In total, these experiments cost ~$600M, or equivalent to just 0.3% of its market cap or 5% of total cash (LINK). And the company was quick to recognize the failures, and shut them down within just 6 months – actions that I think should be applauded, not faulted. It's true that like most experiments, two out of three markets failed. But it also led to discovering a promising new market - Latin America. By our estimates, this single market may soon justify their entire overseas investment spend. And now that we have a few more years of data, we can objectively see how these decisions played out, instead of merely pontificating… I estimate that Shopee spent a cumulative ~$1.7BN on its Latam + other markets bets. On this spend, I project Shopee Brazil will make ~$150M in EBITDA this year – equivalent to ~1.1% of its Brazil GMV. This equates to a ~9% yield (or slightly lower on an FCF basis). Admittedly a high-single digit return on investment is good, but nothing to get excited about. However, I think this metric under-reports the optionality that management kept, by expanding to and investing in Brazil. First off, Shopee Brazil is still far from achieving its full monetization potential. The company is guiding to ~3% EBITDA as a % of GMV for its overall business, which means that there's still significant room for profit expansion. On top of this, their Brazilian GMV is growing ~40% y/y and is projected to maintain these high rates in the medium-term. Shopee has also built one of the leading logistics networks in Brazil – shipping more orders per day than even Mercado Libre, and with per parcel costs $1-2 cheaper than other 3rd party logistics providers. This gives them a defensible moat, similar to their SE Asia operations. It's quite realistic that Shopee Brazil will hit $30BN GMV by 2028 (or a 3-year, ~30% CAGR). If they can achieve close to ~2% EBITDA as a % of GMV by then, that'd be ~$600M EBITDA. Additionally, most of Shopee Brazil's capital investments are fixed, which means profits should grow quicker than the incremental capital needed to support it (i.e. operating leverage). Added together, it would equate to a ~28% yield on ~$2.2BN of total invested capital by 2028. And at a full 3% on GMV, that's a ~42% yield. Their overseas experiment will have been a tremendous success, if they can hit anywhere close to these targets – generating high incremental returns on invested capital for shareholders, and proving management's decision correct in hindsight. However, there's also an embedded "call option" on top. They can leverage this infrastructure and use their Brazilian operations as a "launching pad", to re-enter other Latin American countries. We already saw signals of this when they were re-trenching in 2022. Shopee said that they would "maintain cross-border operations in Chile, Columbia and Mexico", despite completely shutting down their European and Indian operations (LINK). Cross-border sales by themselves aren't a meaningful business, so why would these be the only markets they kept a toehold in unless they had bigger plans in store? Latin America is a ~$200BN ecommerce market, with Brazil being only ~40% of this (LINK). Shopee still has a lot of untapped opportunities in the region, with just ~12% market share in Brazil and ~5% of the total Latam market. And notably, Chile, Columbia, and Mexico were some of their best performing markets outside of Asia (based on customer repeat purchase rates, app downloads, etc.), before they retreated from these markets. While it isn't formally announced yet, I would heavily wager that Shopee re-enters the rest of Latin America within the next few years. They've already proven to investors that they can compete head-on and be profitable in Brazil, with higher profit margins and take-rates than even their Asian operations. It's only a matter of time before they replicate this playbook across other markets. Lastly, some investors would argue that instead of taking on too much, too soon, Shopee should have at least waited a few more years before growing in Brazil. But I contend that if they had waited, they may have missed the window of opportunity entirely… For example, Shopee Brazil grew unencumbered from 2019 – 2024. The only real competitors were local platforms (Mercado Libre, Magazine Luiza, etc), who had different value-propositions versus Shopee's middle & lower income household focus. This gave Shopee a window of time to build their brand awareness, customer trust, and market share on their own terms. But if they had waited a few more years, like some investors proclaim? Well Temu just entered Brazil last summer, and TikTok Shop announced they're launching this month. And even Meituan is setting their sights on the market. There's a wave of Chinese competition is coming… Luckily it's easier to defend your territory, if you've already had years to build up your walls and moats. And it's almost always easier (and cheaper) to retain an existing customer, versus trying to "steal" one from a competitor. Especially in ecommerce, where your early competitive advantages are sticky customer habits and scale, which you need to justify building logistics scale later on. In essence, if Shopee Brazil had launched later, it's likely that it would have cost a lot more to get to where they are today, while also having lower odds of success to boot. I can understand why Sea Ltd shareholders have felt "angsty" these last few years. But I also think many of the criticisms are simply due to mis-matched time-horizons and incentives. For example, if Shopee had completely exited the Brazilian market and conserved capital to focus on their Asian business, the business would have achieved profitability a few quarters sooner. With a "clean story" and greater investor confidence, perhaps the stock wouldn't have suffered as sharp of a draw-down. But at what cost? Dedicated shareholders may have missed out on a market opportunity worth tens of billions of dollars. Is a smooth stock price, really worth missing out on this prize? As longstanding investors, we will always support management decisions that maximize long-term shareholder value, even if it means a bumpier ride in the interim.

BSD Analysis:
The manager presents a compelling defense of Sea Ltd's international expansion strategy, particularly focusing on the Brazilian market opportunity. The thesis centers on Shopee Brazil's transformation from an experimental venture to a profitable growth engine, with current EBITDA margins of 1.1% of GMV expected to expand toward the company's 3% target. The manager projects impressive returns, estimating a potential 28-42% yield on invested capital by 2028 based on $30B GMV projections and operating leverage from fixed infrastructure investments. The competitive positioning appears strong, with Shopee building superior logistics capabilities that deliver packages cheaper than competitors while achieving higher daily order volumes than Mercado Libre. The timing advantage is particularly noteworthy, as Shopee established market presence before new Chinese competitors like Temu and TikTok Shop entered Brazil. The manager views the $1.7B cumulative investment as creating an embedded call option for broader Latin American expansion, with the region representing a $200B e-commerce opportunity where Shopee currently holds only 5% market share. The long-term value creation potential appears substantial, justifying near-term volatility for patient shareholders.

Pitch Summary:
Deep-distressed cyclical with runway after liability mgmt + exchanges; now a recovery/asset-sale bet vs. near-term restructuring. Liquidity guided >$450mm by YE’25; maturities pushed ~3yrs; optionality from AmSty & PS asset sales and demand rebound (auto/construction).

BSD Analysis:
Risks: macro/downcycle persists into ’27–’28; failed asset sales; cash burn >plan; eventual ’28/’29 restructure if recovery slips. Catalysts: 2H’25 FCF inflection; announced divestitures (AmSty/PS); tariff actions; gas/power relief in EU; visible volume recovery in auto/construction. Catalysts: 2H’25 FCF inflection; announced divestitures (AmSty/PS); tariff actions; gas/power relief in EU; visible volume recovery in auto/construction.