Investment Pitches

Pitch Summary:
Bakkt Holdings, Inc. has faced significant challenges due to regulatory uncertainties in the U.S. crypto market, impacting its ability to maintain a consistent business focus. Despite its strong backing from Intercontinental Exchange and initial successes like launching the first physically settled bitcoin futures contract, Bakkt has struggled with leadership changes and shifting priorities. The recent U.S. presidential election, which may lead to a more favorable regulatory environment, has sparked increased trading volumes and optimism for Bakkt's future. However, the potential acquisition by Trump Media adds uncertainty to its long-term prospects.

BSD Analysis:
Bakkt's journey has been marked by its attempts to navigate a volatile regulatory landscape, which has led to frequent strategic pivots and leadership changes. The company's acquisition of Apex Crypto in 2023 and subsequent delisting of certain cryptocurrencies highlight the challenges posed by SEC regulations. Despite these hurdles, Bakkt's infrastructure and ICE affiliation provide a solid foundation for potential growth if regulatory clarity improves. The recent surge in trading volumes following the U.S. presidential election suggests market confidence in a more crypto-friendly administration. However, the looming acquisition by Trump Media introduces a new layer of complexity, as it could result in Bakkt's delisting and alter its strategic direction. Investors should weigh these factors carefully, considering both the potential for regulatory tailwinds and the uncertainties surrounding the acquisition and Bakkt's ability to capitalize on its market position.

Pitch Summary:
Applovin (APP): Applovin's stock has been a major contributor to our portfolio this year. The stock was up +57% during the third quarter alone. And it's appreciated a further +117% so far in the fourth quarter – for a cumulative +240% gain. The stock has risen more in the last 3 months, than the prior 30. When I first laid out our investment rationale last quarter, I certainly didn't expect the stock to re-rate so quickly (LINK). Obviously, intrinsic value didn't change that drastically. The business didn't suddenly become "higher quality" overnight – the story remains largely the same as when we first bought it 2.5 years ago. (But perhaps this is further evidence of the "hockey stick" payoff / change in market structure discussed above). Nonetheless, I'm writing about Applovin again this quarter, simply because I think it's an interesting case study in how the market's perception around its earnings quality and durability of growth can drive rapid price changes. I mainly write this for myself as reference, in anticipation of similar scenarios in the future. And also as an effort to improve our investment process (which hopefully our partners will gain a better understanding of too). So why the market's sudden appreciation for this business? I believe the primary catalysts came during the last two earnings calls. On the Q2 2024 earnings call, Adam Foroughi (Applovin's Founder & CEO) reiterated his belief in the company's 20% - 30% long-term growth trajectory. Adam had said this before, but investors had largely glossed over it before as a "throwaway" comment. This quarter was different though, as Adam provided detailed steps of how he reached this conclusion (and the financial results started showing evidence to back this up): "Last quarter, I talked about a goal of growing our software business 20% to 30% for the long term. I typically don't communicate externally about our goals, if I don't have confidence in it. I'm communicating it now because I do have strong confidence in it, and I see many years of growth ahead of us." (LINK) The Path to 20% y/y Growth When asked about this later on the call, he explained: "[the goal is not] very dependent outside of gaming at all… We've got a mobile gaming category. It's got a few percentage points of growth a year now. So let's call that low single digits. We've got a business that as these models continue to improve from gathering more data, we think that's an extra 3%, 4% a quarter as well. So that's where it gets you to the low end." Translation: Applovin thinks it can easily hit the low-end of guidance (20% y/y growth), simply from a couple percent per year of industry growth + self-improving models that allow them to grow an additional 12 - 17% per year on top (3 - 4% per quarter). Adam's making the point that simply due to the nature of artificial intelligence / machine learning models, their algorithms naturally get better by itself as it ingests more data. Even if no human engineer ever touches it again (i.e. it's the same "version", but with more data). So the majority of the low-end guidance is based on "organic" growth – i.e. something that will occur in a predictable way, and essentially "guaranteed" in Adam's view. And at zero incremental costs, to boot. The market tends to reward predictability and self-determined growth (and more so if it's 100% incremental margins), so this comment naturally allowed the market to bid up the valuation multiple. Going From 20% -> 30% y/y Growth Next, he stated: "And then we've got a team that's constantly working on improving the models. And any improvement that's actually developer-driven enhancement to the models that makes them more accurate, then steps you up into the higher end of that range. And so we've got a lot of confidence in the growth goal we put out there just on a baseline basis, the current business." Translation: If Applovin's engineers do make manual improvements to the algorithm (beyond simply feeding it with more data), this will create "step-function" improvements in the model accuracy (and ultimately in financial returns). The most obvious example of this is the upgrade from Axon 1 to Axon 2 in early 2023, which created a +140% increase in the ads business in just two years. These returns are "lumpy" since new model versions are only launched periodically. More importantly though, this component of growth is also within the company's control, rather than at the whims of the industry or macro environment. This statement further solidified the market's confidence that the company's growth guidance is structural / self-determined. Since it's based on improvements in the algorithm (i.e. the ingenuity of Applovin's engineers), the company's future is more firmly in its own control than the market had appreciated. The Call Option: Getting to >30% y/y Growth Lastly, Adam gave investors a "call-option" on top of this already impressive guidance: "Now we do, do sit on 1 billion-plus daily active users. We've got one of the most sophisticated advertising platforms in the world, and we're driving billions of dollars of performance value in gaming. There's nothing about the technology we have that would disallow it from going outside of just mobile gaming, and we're already seeing positive trends in that pilot. So as we start putting these pieces together and broaden out our platform over time, we're really excited about how big the numbers could become." "So we're not backing those numbers into longer-term views on the business. So we think we're going to be - in a place where this business is going to be steady, it's going to be growing at a very nice rate. The conversion to cash flow is only going to improve, and we've got a lot of other exciting things that are going on that give us confidence that we could even be above those ranges." Translation: On top of the previous guidance, Applovin plans to expand into ecommerce performance ads. This is still in the early phases, so it's not incorporated to the previous guidance at all. But if it works, it could expand Applovin's addressable market by 2 - 4x, and result in over 30% y/y growth. And then on the following Q3 2024 earnings call, investors started getting concrete data points on this call option. "While we remain confident in 20% to 30% growth for mobile gaming advertisers alone, we're also exploring new areas, as shown by our recent e-commerce pilot. Early data has exceeded our expectations, with the advertisers in the pilot seeing substantial returns, often surpassing those from other media channels and, in many cases, experiencing nearly 100% incrementality from our traffic." "We're increasingly confident this vertical will scale significantly in 2025 and become a strong contributor for us over the next year and beyond… In the next few quarters, we'll launch a self-service platform, opening global opportunities for advertisers of all sizes." "In all my years, it's the best product I've ever seen released by us, fastest growing, but it's still in pilot." "We're not going to invest heavily in sales, and we're going to organically grow over the years. And we've done that. And you can look at the trajectory of the company since we've been public, but even if you backdate it to when we started, every year, we've gotten bigger and gotten more penetration into the gaming category and done it organically. So when we look at e-commerce, we're not in any sort of rush. Now that said, if you check even Twitter today, there's tons of noise from e-commerce brands saying, in our pilot, they're seeing as much scale and a strong ROAS as they're seeing anywhere in the world today on their user acquisition buys." (LINK) Translation: Despite being launched just a few months ago, both Applovin and early customers are already expressing extremely positive reviews of the product. The call option "dream" started becoming "reality" in investors' minds. Not only is the new initiative doing well, but Applovin believes that they can scale the business in a similarly cost effective manner as the core gaming advertising business. This removed a major point of uncertainty for investors. The market previously feared that Applovin would need to invest heavily into the ecommerce business (via both data-purchases and hiring sales personnel), thus depressing margins & profits in the near-term. This quarter's earnings call quashed that fear. The street is now modeling for the ecommerce division's unit economics to be just as attractive as the core gaming advertising business. This means that near-to-medium term margin expectations are rising, and therefore further expands the valuation multiple. Reading the above comments, it's easy to see why investors are excited about the story. Over the last two years, Applovin has gone from being valued as a commoditized ad network with low switching costs, to one that owns ~30% of the total gaming market and is instrumental in the monetization of the entire mobile gaming ecosystem. Now, the market is finally recognizing the heart of this business is in the algorithm itself, which can be expanded to other verticals like ecommerce. What's interesting though, is that during this time period, the company's expected financial trajectory has largely stayed the same. For example, sell-side estimates actually haven't changed much in the last two years. When we first invested in early 2022, the street was expecting Applovin's EBITDA to be ~$1.8BN in 2024 and ~$2.1BN in 2025. Two and a half years later, the street is now looking for ~$2.6BN EBITDA in 2024, ~$3.4BN in 2025, and ~$4.1BN in 2026. The +44% and +62% increase in 2024 and 2025 estimates are nothing to sneeze at. But it's certainly not enough to justify how much the stock rose at the same time. Rather, most of the stock's gains have come from multiple expansion. Multiples have risen from ~8x EV / EBITDA (2yr forward), to ~24x EV / EBITDA (2yr forward). Given the above, we can calculate that ~70% of the total stock return is from multiple expansion, with ~20% attributed to EBITDA growth, and the remainder to Applovin's share buybacks over the period. Applovin's perceived "quality of earnings" improved from one that's majority transactions / low quality gaming revenues, to one that comes from a repeatable and superior advertising engine. The market now has visibility for a 10-year runway for this company, rather than just a year or two out. Multiple expansion is really what's created a 7-bagger for us in the last few years. So the lesson is, focus on not just earnings growth, but also the quality of that earnings stream and the durability /"predictability" of it. If you can get both right, that's where the real winners are (I wrote about this in our "10-Bagger Club" piece a few years ago too; LINK). So what are we doing with the stock now? Well, the driver of future returns have shifted from the gaming ad network, to now getting the ecommerce extension right. Essentially, it feels like the gaming ad business's growth potential is fully priced-in. Future returns require a successful ecommerce ad product, and gaining material market share in the next few years. Due to this higher hurdle, we've been trimming the stock along the way and have now recouped ~2x our original cost basis. Yet, it's still one of our largest positions. In relation to Hayden's portfolio, the stock is up ~7.6x since we first began buying 2.5 years ago, and an astonishing ~31x from its December 2022 lows. We continue to follow the company closely, and are watching if they can successfully transition to their next leg of growth. So far, early signs are pointing to "yes".

BSD Analysis:
Hayden Capital presents a compelling case study of AppLovin's remarkable transformation from a commoditized ad network to a dominant force in mobile gaming monetization. The manager highlights how CEO Adam Foroughi's detailed guidance of 20-30% long-term growth, backed by concrete operational metrics, shifted market perception dramatically. The thesis centers on AppLovin's self-improving AI algorithms that naturally enhance performance as they ingest more data, creating predictable organic growth with zero incremental costs. The company's expansion into e-commerce advertising represents a significant catalyst, with early pilot results showing exceptional returns and near 100% incrementality for advertisers. Management's confidence in scaling this new vertical without heavy sales investment suggests attractive unit economics similar to the core gaming business. The stock's 240% gain in 2024 primarily reflects multiple expansion from 8x to 24x EV/EBITDA as the market recognized the durability and quality of earnings. While Hayden has trimmed the position after recouping 2x their cost basis, they maintain it as a top holding, viewing the successful e-commerce transition as the key driver for future returns.

Pitch Summary:
2024 has proven to be a bumpy year for WillScot, the specialty rentals company the Fund first invested in in April 2024. We remain enthusiastic about the company's prospects and continue to believe the market underestimates the resilience of the company's contracted leasing revenues and rental growth opportunity. For a primer on the company, we wrote about WillScot in our first quarter 2024 letter. Over the course of the year, WillScot has moved its 2024 financial guidance downwards. Guidance for the company's preferred cash flow metric, adjusted EBITDA, is down 9% from a $1.16 billion guidance midpoint in the first quarter to a $1.06 billion guidance midpoint in the most recent third quarter. The guidance revision was driven by the challenging operating environment for residential and nonresidential construction. Adding to the market's dislike of downwards revisions, peers have posted stronger utilization metrics than WillScot, leading some market participants to question the company's go-to-market strategy. WillScot has historically prioritized price over utilization and justified price increases by offering the most extensive suite of value-added products and services. This is a key strategic area that management must validate or correct moving forward. Finally, in September, WillScot terminated its merger agreement with McGrath RentCorp after a "path to regulatory clearance" failed to emerge following "exhaustive engagement" with the Federal Trade Commission (the "FTC"). We expect the merger would have been highly accretive to WillScot's intrinsic value and underlined its market-leading position in its specialty rentals niche. As shareholders, we were disappointed by this regulatory outcome. As part of the terminated merger agreement, WillScot also had to pay McGrath RentCorp a $180M termination fee. In light of these developments, we have completed a full re-underwriting and bottoms-up analysis of the company. This was an important exercise to scrutinize our initial conviction and investment thesis. Following our re-underwrite, we remain highly convicted in our WillScot investment: • Intrinsic value is much higher than current price; intrinsic value is not overly dependent on the company's earnings in 2024: despite the market's (and our own) dislike of the company's downwards revision to 2024 guidance, our estimate of WillScot's intrinsic value is not overly sensitive to 2024's earnings. When incorporating new information into an investment judgement, it is important to challenge prior convictions with humility and curiosity. It is also important to not "miss the forest for the trees." Our revised intrinsic value estimate for WillScot of $55 per share (45%+ higher than the share price at the end of third quarter) is concentrated in earnings power growth from company and sector-specific tailwinds, strong continued capital allocation, and deleveraging. We are optimistic about the company and sector-specific tailwinds: o Future construction and infrastructure spend is expected to outgrow GDP. o Construction rental equipment is growing ~1.5x faster than overall construction spend as the financial logic of leasing drives secular penetration. o Within the construction rental equipment sector, specialty rental growth outperforms as customers demand more complex and customized solutions. o The largest rental providers are winning the largest customers because they provide better service and invest in technology to optimize fleet distribution and utilization. • Failed merger is in the rearview mirror: the company's management can pivot from playing defense against the FTC and start to play offense. Meeting the FTC's extensive inquiries had an indeterminable impact on management's time and focus. Management has already demonstrated efforts to refocus their efforts on core business operational execution and shareholder-friendly capital allocation; in the same press release that announced the merger termination, the company's Board of Directors expanded the existing Share Repurchase Authorization to $1 billion. We have been impressed by WillScot's management team who have demonstrated sophisticated knowledge of capital allocation, have profitably grown and built an impressive market-leading company, and are incented through their ownership of $200M+ worth of shares. In the past year, the company has repurchased 6% of its outstanding shares. In the past month, the company's CEO, CFO, and certain board members have also purchased shares in the open market. • We expect America's new political regime will result in more attractive regulatory environment: although the current FTC was a one-time barrier to WillScot's intended acquisition of McGrath RentCorp, we expect the regulatory environment will shift in favor of WillScot in 2025 as regulatory agency nominees under President Trump and a Republican House of Representatives and Senate are less hostile to certain mergers and acquisitions. Not only may WillScot face less resistance when it intends to acquire worthy competitors, but WillScot itself could be the target of an acquisition by a larger competitor. We believe there would be significant industrial logic and value creation to a larger generic equipment rental company acquiring WillScot. WillScot's management team has a long and successful track record of value-accretive M&A that it will continue to deploy to generate strong returns and customer value proposition. That said, even without a more attractive regulatory environment, WillScot has many ways to "win" and build on its asset-light, high-margin, and cash-generative business model.

BSD Analysis:
Silver Beech maintains strong conviction in WillScot despite a challenging 2024 marked by guidance reductions and a failed merger with McGrath RentCorp. The manager completed a comprehensive re-underwriting following 9% EBITDA guidance cuts and a $180M termination fee payment, yet remains bullish with a $55 intrinsic value target representing 45%+ upside. The investment thesis rests on secular tailwinds including construction spending outgrowing GDP, rental equipment penetration growing 1.5x faster than construction spend, and specialty rental outperformance driven by customer demand for complex solutions. Management's capital allocation discipline is highlighted through 6% share repurchases and $1 billion buyback authorization expansion, while insider purchases demonstrate alignment. The failed merger removes regulatory overhang and allows management to refocus on operational execution. Silver Beech expects a more favorable regulatory environment under the Trump administration, potentially enabling future M&A or making WillScot an acquisition target. The manager views the company's asset-light, high-margin model as resilient despite near-term construction headwinds.

Pitch Summary:
Silver Beech first invested in Brookfield Corporation in November 2023. We've long admired the firm's value investing philosophy and watched with admiration as the company's asset manager emerged as a leading private markets investor across corporates, real estate, and infrastructure. We wrote about Brookfield in our fourth quarter 2023 investor letter. Since we invested, Brookfield has gone from strength to strength, and the market is waking up to the company's potential and low valuation. Over the last year, the company's share price has increased by over 60%, so we think this position warrants an update. Our core investment thesis remains centered on Brookfield's corporate transformation from asset owner to asset manager. Five years ago, the majority of Brookfield's intrinsic value was in its ownership of hard assets (many of which the market still dislikes and/or does not understand). Today, Brookfield owns many of the same hard assets, but most of the company's intrinsic value is in the management and performance fees it earns from its fast-growing asset manager, Brookfield Asset Management. Brookfield's corporate transformation is years in the making and still underway. Management continues to take action to simplify the company's complex holding structure while executing on the asset manager's significant opportunity: • Simplification of asset manager's share class structure: in October 2024, Brookfield announced that it would convert its 73% privately held economic interest in its asset manager into an equivalent economic interest in the asset manager's publicly traded stock. Share class structure simplification will make it easier to value Brookfield, and it should also make the asset manager eligible for S&P 500 index inclusion, driving demand for the asset manager's shares from index investors. • Succession planning: in July 2024, Brookfield took a significant step towards solving one of the pressing governance challenges that face asset managers: succession planning. Connor Teskey, the 36-year-old President of Brookfield Asset Management and CEO of Brookfield Renewables, was declared the King in waiting. Connor's younger age, investment talent, and devotion to Brookfield mirror that of Bruce Flatt, Brookfield's current CEO, who was 37 years old when he became CEO. • Private markets risks & bull thesis: Brookfield is a first-class private markets asset manager. However, at Silver Beech we are more skeptical of widespread enthusiasm for private markets. Many of the so-called "benefits of private markets" are rhetorical and reporting innovations that provide a false sense of calm to LPs who rest easier when private market valuations don't drawdown with public market valuations in a bear market. Due to private markets reporting norms, private investments appear less volatile than public ones; some observers have affectionately named this phenomenon 'volatility laundering.' That said, private markets lack transparency, can be circular and rife with conflicts, and contain aggressive valuations and unrealized gains. We will continue to monitor private markets and Brookfield, specifically, for these growing risks; that said, private markets have been resilient with rare exception over the last few years, despite contending with illiquid credit markets, rising rates and risk premia, and a volatile public market for exit liquidity. The private markets "bull thesis" has been strengthened by this resilience and continued recent growth. This is positive news for Brookfield. • Asset-light fee growth & realized carried interest: Over the past year, fee-bearing capital at Brookfield's asset manager grew by 23% (~$100 billion), driven by organic assets under management ("AUM") inflows, investment performance, and strategic acquisitions of other asset managers. We expect this strong AUM growth to continue. We also expect Brookfield to realize substantial carried interest (also known as carry or performance fees) over the next three years as the dealmaking logjam caused by interest rate volatility clears and more funds from the 2019-2022 vintages enter their harvest period. We expect this carried interest will be a significant vector of cash generation for Brookfield. Brookfield continues to take positive action to simplify its corporate structure, execute on the private markets growth opportunity, and post strong returns in its funds, but it is still a complex, misunderstood, and undervalued company. One year ago, the company's shares traded for ~$35 and we pegged intrinsic value at ~$57. As of the end of the third quarter 2024, the spread between the company's price and intrinsic value has tightened; the company's shares traded at $53 and we believe intrinsic value has increased to over $68 per share.

BSD Analysis:
Silver Beech maintains a bullish stance on Brookfield Corporation, emphasizing the company's ongoing transformation from asset owner to asset manager. The manager's thesis centers on Brookfield's evolution into a fee-generating business model through its asset management operations, which now represent the majority of intrinsic value versus historical hard asset ownership. Key catalysts include corporate structure simplification through share class conversion, succession planning with Connor Teskey's appointment, and strong 23% growth in fee-bearing capital to ~$100 billion. The manager expects significant carried interest realization over the next three years as 2019-2022 vintage funds enter harvest periods, providing substantial cash generation. Despite acknowledging private markets risks including 'volatility laundering' and aggressive valuations, Silver Beech views the sector's resilience as validating the bull thesis. The investment case is supported by valuation upside, with intrinsic value estimated at $68 per share versus a $53 trading price. The manager views Brookfield as a complex but misunderstood company benefiting from structural growth in alternative asset management.

Pitch Summary:
We are long shares of Phinia, Inc. A recent spin-off from Borg Warner (BWA), the company is an auto parts supplier that operates two distinct businesses – 1) Fuel Systems (original equipment manufacturer supplier) and 2) Aftermarket automotive products supplier. The Fuels Systems business is uniquely positioned to capitalize on attractive competitive dynamics that we believe will allow the company to take gobs of market share in its niche markets over the coming years. As an internal combustion engine (ICE) parts supplier pure play, overly hyped expectations of electric vehicle (EV) penetration created an especially good long-term buying opportunity in PHIN earlier in the year. We believe estimates will continue to prove too optimistic on battery electric vehicle (BEV) penetration as evidence is showing that the pure BEV market has already flatlined in the US and China and is declining rapidly across Europe. Consumer surveys around the world point to growing disinterest of BEVs leading to original equipment manufacturers (OEMs)s and auto dealers to resort to substantial discounts on BEVs to get those units sold and work down already bloated inventory, with limited success. The decline of EV's auto share has come even before the incoming Trump administration's plan to repeal the $7,500 EV tax credit and roll back onerous emission regulations. We think PHIN benefits from the auto OEM strategy reversal as they de-emphasize pure BEVs and instead are focusing on hybrid EVs which still have a gasoline engine requiring PHIN fuel systems. We see commercial vehicle operators adopting BEV technology at an even slower pace as (despite endless hype from some part time CEOs) years are ticking by without material EV penetration into the commercial vehicle market. The market realization that BEVs are not ideal for towing heavy loads long distances would be a meaningful ballast for PHIN as ~30% of the Fuel Systems segment revenue is generated from commercial vehicles as of the most recent quarter. PHIN's Gasoline Direct Injection (GDI) technology makes vehicles much more fuel efficient by injecting fuel directly into the combustion chamber at high pressure (up to 45,000 PSI and +/- 0.5-micron tolerance) which breaks the fuel down into smaller drops and increases surface area per unit of volume. As you may imagine, the GDI component is a highly engineered product and would require significant amounts of R&D spend by any potential competitors that wanted to try and break into the business. Globally, GDI penetration in ICE passenger vehicles is ~50% and PHIN has ~12% market share. We believe both the GDI penetration will rise dramatically in the next few years and PHIN will take substantial market share. S&P Global predicts that ICE vehicle production will decline at a -4% CAGR through 2030 (revised upwards recently from -5%). Although our inclination would be to take the over and flip the negative to a positive growth rate, a successful outcome in PHIN from here does not require an ICE growth tailwind, but simply a slow transition of the existing car parc that needs maintenance and repair. There is an existing ICE fleet globally of >1.4 billion vehicles that we estimate will keep growing in absolute terms for a very long time, as each could require the non-discretionary parts that PHIN manufacturers to be replaced multiple times over the life of the vehicle. For example, on-highway heavy duty truck fuel injectors are typically replaced every ~500k miles driven, or once every 3-4 years. In addition to what we believe is a variant macro view on ICE vs EV, we highlight additional idiosyncratic developments that contribute to our bullish outlook on the Fuel Systems business. Strategic Withdrawal of Competitors: Japanese competitor Denso has announced it will no longer invest in new GDI systems, effectively ceding market share as it pivots to next-generation components. This shift opens the door for Phinia, especially as it targets the growing Chinese OEM market. Furthermore, there has been chatter about Toyota being disappointed with Denso's lack of investment in their product and Toyota has reached out to Phinia to inquire about its capabilities, which could be a large growth opportunity in the longer term. PHIN CFO Chris Gropp recently mentioned at a conference: "From Japan. We've had inquiries coming out of Toyota. When they got the message and their engineers started hearing from DENSO that they didn't want to invest in the next generation of products then certainly, we got inquiries in. We've quoted, we've looked at some products. We've dealt with Toyota before. It's a long time for them to make a decision. You do a lot of quoting. You [have] a lot of discussions with them before you finally land anything..." Supply Chain Consolidation: As automotive manufacturers look to streamline their supply chains, they are increasingly requesting suppliers provide full fuel systems as well as the calibration and certification services related to the engine. As mentioned, Phinia has a 12% market share in the GDI portion of the fuel system, but less than 1% market share of electronic control units (ECU), which is another important component of the system. Management has communicated that it is a reasonable expectation that Phinia's market share in ECUs should increase to the level of the GDI product over time. The ECU component generates about the same revenue per vehicle for Phinia as the GDI component. We expect this trend of OEMs consolidating vendors and buying more fuel systems components from Phinia to be a tailwind over the coming decade, and we believe this dynamic is currently underappreciated by the market. Here is the CEO Brady Ericson responding to a question related to Phinia's first full fuel system award on the Q2 call: "I think it also really intertwines us into their business and makes us really a core partner to our customers. From the low-pressure pump in the fuel tank to the high-pressure pump to the high-pressure rail and the injectors, that's historically, customers would buy 1 or 2 components at a time. Now they're looking and saying, "Hey, we want the entire wet side system" that we'll design and develop for them. As we mentioned, we then kind of picked up the ECU as well." Growing Demand from Chinese OEMs: Phinia has already established relationships with leading Chinese manufacturers such as BYD, Nio, and Li Auto. As Chinese share of PHEVs and ICE autos increases globally, Phinia stands to gain substantial market share. New Product Development: Although historically focused on on-highway applications, Phinia is now expanding into new off-highway products. Recent contracts, such as the one with Kohler engines, demonstrate this commitment to customer demands for enhanced fuel efficiency in construction equipment and will be a growing emphasis for PHIN's diversification efforts. The other leg of the thesis is that PHIN should start to get recognition as a majority after-market supplier. PHIN's after-market business is comprised of three well-known brands: Delphi, Delco Remy, and Hartridge. The after-market business is steadier through an economic cycle, has higher margins, is growing faster, and now comprises just over 50% of the company's operating profit. There is a noticeable valuation premium for companies that serve the auto aftermarket versus those that remain mostly reliant on cyclical auto production, yet the market has not yet caught on to the mix-shift and PHIN is still valued more as an OEM pure play. The company's Aftermarkets business enjoys 18%+ EBITDA margins and mid-single digit organic revenue growth – clearly superior financial traits than Phinia's overall 5.6x forward EBITDA multiple would suggest. PHIN's aftermarket products include batteries, brake pads, air conditioning compressors, fuel pumps, gasoline direct injection systems, commercial vehicle starters and alternators under the Delco Remy brand, diesel fuel systems (injectors, pumps, filtration), braking, steering and suspension parts (ball joints, control arms, steering rods, sway bar links), and diagnostic tools for auto repair shops. In addition to the business dynamics, we like the capital allocation priorities of the management team. The company has been very aggressive with share repurchases since being spun off, as evidenced by the 11%+ reduction in share count in the first year since being a stand-alone public company. Phinia has stated that significant M&A doesn't make sense in the context of the low valuation of their own stock. We think this is still an underfollowed name with narrow sell side coverage that should expand over time. Assuming 6.0x forward EBITDA for the Fuel Systems business and 9.0x forward EBITDA for the Aftermarket business (a conservative 25% discount to comps), the company's enterprise value would be ~$3.8B by the end of 2025. Assuming the company continues to repurchase shares aggressively, this would equate to an equity value of ~$3.1B and a per share value of ~$79, a double from our cost basis within two years. At the heart of our investment philosophy is the belief that surprises relative to expectations can significantly drive stock performance. Given Phinia's strategic positioning with competitors/supply withdrawing from the market, improving aftermarket dynamics and mix, and growth prospects in emerging product lines, we anticipate a long-term series of positive revisions and surprises that could lead to meaningful value creation.

BSD Analysis:
Voss Capital presents a compelling contrarian thesis on Phinia, betting against the EV transition narrative that has pressured auto parts suppliers. The fund argues that BEV adoption has stalled globally, creating an opportunity in this ICE-focused spin-off from BorgWarner. Phinia's competitive moat centers on its Gasoline Direct Injection technology, which requires significant R&D investment and precision engineering that creates barriers to entry. The strategic withdrawal of competitor Denso from GDI investments and potential Toyota partnership discussions represent significant market share expansion opportunities. The aftermarket business, comprising over 50% of operating profit with 18%+ EBITDA margins, provides stability and higher-quality earnings that the market hasn't recognized in the current 5.6x forward EBITDA valuation. Management's aggressive share repurchase program (11% reduction in year one) and disciplined capital allocation further support the value creation thesis. The fund's $79 price target implies a double from cost basis, based on sum-of-the-parts valuation applying 6.0x EBITDA to Fuel Systems and 9.0x to Aftermarket segments.

Pitch Summary:
We are long shares of Phinia, Inc. A recent spin-off from Borg Warner (BWA), the company is an auto parts supplier that operates two distinct businesses – 1) Fuel Systems (original equipment manufacturer supplier) and 2) Aftermarket automotive products supplier. The Fuels Systems business is uniquely positioned to capitalize on attractive competitive dynamics that we believe will allow the company to take gobs of market share in its niche markets over the coming years. As an internal combustion engine (ICE) parts supplier pure play, overly hyped expectations of electric vehicle (EV) penetration created an especially good long-term buying opportunity in PHIN earlier in the year. We believe estimates will continue to prove too optimistic on battery electric vehicle (BEV) penetration as evidence is showing that the pure BEV market has already flatlined in the US and China and is declining rapidly across Europe. Consumer surveys around the world point to growing disinterest of BEVs leading to original equipment manufacturers (OEMs)s and auto dealers to resort to substantial discounts on BEVs to get those units sold and work down already bloated inventory, with limited success. The decline of EV's auto share has come even before the incoming Trump administration's plan to repeal the $7,500 EV tax credit and roll back onerous emission regulations. We think PHIN benefits from the auto OEM strategy reversal as they de-emphasize pure BEVs and instead are focusing on hybrid EVs which still have a gasoline engine requiring PHIN fuel systems. We see commercial vehicle operators adopting BEV technology at an even slower pace as (despite endless hype from some part time CEOs) years are ticking by without material EV penetration into the commercial vehicle market. The market realization that BEVs are not ideal for towing heavy loads long distances would be a meaningful ballast for PHIN as ~30% of the Fuel Systems segment revenue is generated from commercial vehicles as of the most recent quarter. PHIN's Gasoline Direct Injection (GDI) technology makes vehicles much more fuel efficient by injecting fuel directly into the combustion chamber at high pressure (up to 45,000 PSI and +/- 0.5-micron tolerance) which breaks the fuel down into smaller drops and increases surface area per unit of volume. As you may imagine, the GDI component is a highly engineered product and would require significant amounts of R&D spend by any potential competitors that wanted to try and break into the business. Globally, GDI penetration in ICE passenger vehicles is ~50% and PHIN has ~12% market share. We believe both the GDI penetration will rise dramatically in the next few years and PHIN will take substantial market share. S&P Global predicts that ICE vehicle production will decline at a -4% CAGR through 2030 (revised upwards recently from -5%). Although our inclination would be to take the over and flip the negative to a positive growth rate, a successful outcome in PHIN from here does not require an ICE growth tailwind, but simply a slow transition of the existing car parc that needs maintenance and repair. There is an existing ICE fleet globally of >1.4 billion vehicles that we estimate will keep growing in absolute terms for a very long time, as each could require the non-discretionary parts that PHIN manufacturers to be replaced multiple times over the life of the vehicle. For example, on-highway heavy duty truck fuel injectors are typically replaced every ~500k miles driven, or once every 3-4 years. In addition to what we believe is a variant macro view on ICE vs EV, we highlight additional idiosyncratic developments that contribute to our bullish outlook on the Fuel Systems business. Strategic Withdrawal of Competitors: Japanese competitor Denso has announced it will no longer invest in new GDI systems, effectively ceding market share as it pivots to next-generation components. This shift opens the door for Phinia, especially as it targets the growing Chinese OEM market. Furthermore, there has been chatter about Toyota being disappointed with Denso's lack of investment in their product and Toyota has reached out to Phinia to inquire about its capabilities, which could be a large growth opportunity in the longer term. PHIN CFO Chris Gropp recently mentioned at a conference: "From Japan. We've had inquiries coming out of Toyota. When they got the message and their engineers started hearing from DENSO that they didn't want to invest in the next generation of products then certainly, we got inquiries in. We've quoted, we've looked at some products. We've dealt with Toyota before. It's a long time for them to make a decision. You do a lot of quoting. You [have] a lot of discussions with them before you finally land anything..." Supply Chain Consolidation: As automotive manufacturers look to streamline their supply chains, they are increasingly requesting suppliers provide full fuel systems as well as the calibration and certification services related to the engine. As mentioned, Phinia has a 12% market share in the GDI portion of the fuel system, but less than 1% market share of electronic control units (ECU), which is another important component of the system. Management has communicated that it is a reasonable expectation that Phinia's market share in ECUs should increase to the level of the GDI product over time. The ECU component generates about the same revenue per vehicle for Phinia as the GDI component. We expect this trend of OEMs consolidating vendors and buying more fuel systems components from Phinia to be a tailwind over the coming decade, and we believe this dynamic is currently underappreciated by the market. Here is the CEO Brady Ericson responding to a question related to Phinia's first full fuel system award on the Q2 call: "I think it also really intertwines us into their business and makes us really a core partner to our customers. From the low-pressure pump in the fuel tank to the high-pressure pump to the high-pressure rail and the injectors, that's historically, customers would buy 1 or 2 components at a time. Now they're looking and saying, "Hey, we want the entire wet side system" that we'll design and develop for them. As we mentioned, we then kind of picked up the ECU as well." Growing Demand from Chinese OEMs: Phinia has already established relationships with leading Chinese manufacturers such as BYD, Nio, and Li Auto. As Chinese share of PHEVs and ICE autos increases globally, Phinia stands to gain substantial market share. New Product Development: Although historically focused on on-highway applications, Phinia is now expanding into new off-highway products. Recent contracts, such as the one with Kohler engines, demonstrate this commitment to customer demands for enhanced fuel efficiency in construction equipment and will be a growing emphasis for PHIN's diversification efforts. The other leg of the thesis is that PHIN should start to get recognition as a majority after-market supplier. PHIN's after-market business is comprised of three well-known brands: Delphi, Delco Remy, and Hartridge. The after-market business is steadier through an economic cycle, has higher margins, is growing faster, and now comprises just over 50% of the company's operating profit. There is a noticeable valuation premium for companies that serve the auto aftermarket versus those that remain mostly reliant on cyclical auto production, yet the market has not yet caught on to the mix-shift and PHIN is still valued more as an OEM pure play. The company's Aftermarkets business enjoys 18%+ EBITDA margins and mid-single digit organic revenue growth – clearly superior financial traits than Phinia's overall 5.6x forward EBITDA multiple would suggest. PHIN's aftermarket products include batteries, brake pads, air conditioning compressors, fuel pumps, gasoline direct injection systems, commercial vehicle starters and alternators under the Delco Remy brand, diesel fuel systems (injectors, pumps, filtration), braking, steering and suspension parts (ball joints, control arms, steering rods, sway bar links), and diagnostic tools for auto repair shops. In addition to the business dynamics, we like the capital allocation priorities of the management team. The company has been very aggressive with share repurchases since being spun off, as evidenced by the 11%+ reduction in share count in the first year since being a stand-alone public company. Phinia has stated that significant M&A doesn't make sense in the context of the low valuation of their own stock. We think this is still an underfollowed name with narrow sell side coverage that should expand over time. Assuming 6.0x forward EBITDA for the Fuel Systems business and 9.0x forward EBITDA for the Aftermarket business (a conservative 25% discount to comps), the company's enterprise value would be ~$3.8B by the end of 2025. Assuming the company continues to repurchase shares aggressively, this would equate to an equity value of ~$3.1B and a per share value of ~$79, a double from our cost basis within two years. At the heart of our investment philosophy is the belief that surprises relative to expectations can significantly drive stock performance. Given Phinia's strategic positioning with competitors/supply withdrawing from the market, improving aftermarket dynamics and mix, and growth prospects in emerging product lines, we anticipate a long-term series of positive revisions and surprises that could lead to meaningful value creation.

BSD Analysis:
Voss Capital presents a compelling contrarian thesis on Phinia, betting against the EV transition narrative that has pressured auto parts suppliers. The fund argues that BEV adoption has stalled globally, creating an opportunity in this ICE-focused supplier that was spun off from BorgWarner. Phinia's competitive moat centers on its Gasoline Direct Injection technology, which requires high-precision engineering (45,000 PSI tolerance) and significant R&D investment that deters competitors. The strategic withdrawal of Japanese competitor Denso from GDI investments creates a clear market share opportunity, particularly with potential Toyota business. The dual-business model provides defensive characteristics, with the higher-margin aftermarket segment (18%+ EBITDA margins) comprising over 50% of operating profit and offering steady mid-single digit growth. Management's aggressive capital allocation, evidenced by an 11% share count reduction in the first year post-spinoff, demonstrates shareholder-friendly priorities. The valuation methodology applying 6.0x EBITDA to Fuel Systems and 9.0x to Aftermarket suggests significant upside to the $79 target price, representing a potential double from cost basis within two years.

Pitch Summary:
Failed technology that is virtually worthless; Cameco looked at partnership and is skeptical of the technology; paid stock promotion; microcap fraud (the HQ is now a co-working space); zero patents; questionable history; delusional estimates;

BSD Analysis:
ASP Isotopes develops nuclear and isotope enrichment technology. Bears argue that the company is pre-revenue, highly promotional, and faces geopolitical/regulatory hurdles tied to nuclear materials. The business model is capital-intensive with uncertain commercial demand. With limited transparency, skeptics question viability absent significant external funding.

Pitch Summary:
Mattr Corporation is undergoing a significant transformation under new management, shifting from a cyclical oil and gas focus to a more stable industrial materials business. The company has divested low-margin segments and acquired high-margin businesses like AmerCable, which is expected to be immediately accretive to earnings. With a strategy emphasizing organic growth, strategic acquisitions, and share buybacks, Mattr aims to enhance shareholder value. The management team, led by CEO Mike Reeves, has a proven track record in executing similar turnarounds, suggesting potential for substantial upside if the company can deliver on its growth and margin expansion targets.

BSD Analysis:
Mattr's strategic pivot is supported by a robust capital allocation framework, including aggressive share buybacks and maintaining moderate leverage. The acquisition of AmerCable at a low EBITDA multiple is expected to enhance earnings per share by 40%, indicating management's focus on accretive deals. Despite current margin compression and flat revenue growth, the company targets a 10% organic growth rate into 2030, with capital expenditures winding down, potentially leading to improved free cash flow. Insider buying and significant holdings by Turtle Creek Asset Management, a firm with a strong track record in midcap investments, underscore confidence in Mattr's strategy. However, the market currently prices in low growth expectations, providing a margin of safety for investors willing to bet on management's execution capabilities. If successful, Mattr could follow a trajectory similar to TerraVest, which saw significant appreciation post-restructuring and strategic acquisitions.

Pitch Summary:
Mansei Corporation is a compelling deep-value investment opportunity, trading at a net-net valuation with a history of consistent profitability and dividend payments. The company recently executed a transformative 29% share buyback, significantly enhancing shareholder value. Despite its small market cap and limited liquidity, Mansei's straightforward valuation, backed by cash and receivables, makes it an attractive option for patient deep-value investors.

BSD Analysis:
Mansei Corporation's valuation metrics, such as a P/E of 8.49 and a P/B of 0.53, underscore its deep-value status. The company's strategic 29% share buyback, executed at ¥3,800 per share, has reduced the share count significantly, boosting earnings per share and enhancing book value per share from ¥6,032 to ¥6,940. Despite the lack of market reaction, the company's profitability remains robust, with a net income forecast of ¥730 million and an adjusted EPS of ¥431. The dividend yield of 2.5%, with a potential increase to 3.5%, further supports the investment case. While risks include potential management missteps or prolonged undervaluation, the company's strong financial position and history of frugality mitigate these concerns. For investors willing to navigate the illiquidity and small market cap, Mansei offers a durable business model with potential for significant returns.

Pitch Summary:
China's hustle stock (secretly transferring critical assets, aggressive overleverage, undisclosed related parties); business disruptions from the tariff increase;

BSD Analysis:
Snap Inc. is a social media company. The short thesis emphasizes slowing ad revenue growth, weak monetization versus Meta/Google, and user growth stagnation in developed markets. Heavy reliance on AR/VR initiatives adds execution risk. With margins lagging peers and high competitive intensity, valuation downside is significant if engagement weakens further.

Pitch Summary:
Montero Mining and Exploration has reached a settlement with Tanzania for C$38 million, resolving a long-standing arbitration over an expropriated mining license. The settlement, which is payable in three installments, represents a significant reduction from the original claim but aligns closely with realistic expectations. The company is expected to distribute a substantial portion of the net proceeds to shareholders, potentially exceeding the current market capitalization.

BSD Analysis:
Montero's settlement with Tanzania, although at a 61% discount to the original claim, is only a 12% discount to the estimated realistic claim value, suggesting a favorable outcome. The payment terms are advantageous, with all installments scheduled within a short timeframe, enhancing liquidity. The potential net cash available for distribution is estimated at C$20 million, surpassing the current market cap of C$18 million, indicating a margin of safety. Despite management's previous hints at reinvestment in exploration, the presence of activist investor Jeremy Raper suggests a strong likelihood of cash returns to shareholders. Given the quick payment schedule, distributions could occur by Q1 2025, offering an attractive short-term return potential. Investors should monitor management's forthcoming details on capital allocation to assess the full impact on shareholder value.

Pitch Summary:
Paywalled (TransDigm’s model is enabled by burdensome regulation and bureaucratic negligence. The Bear Cave also believes this will change under the incoming Trump Administration and that TransDigm should be target #1 for the Department of Government Efficiency);

BSD Analysis:
TransDigm’s value creation relies on high pricing power in proprietary/sole-source parts and aggressive financial engineering. With OEM/aftermarket cycles normalizing, bears see pricing scrutiny from the Pentagon/airlines and limited unit growth to offset. Rising rates keep interest expense elevated; another special dividend could constrain flexibility. Catalysts include aftermarket organic growth vs. price, disclosure on acquired SKUs, DOJ/DoD pricing reviews, and leverage trajectory. Counterpoints: portfolio quality and MRO resilience are strong, but shorts argue risk/reward is asymmetric at premium multiples if pricing power faces policy pushback.

Pitch Summary:
SEC has engaged in "investigative matters" related to the company; CFO cashing out; FTC is also investigating the company;

BSD Analysis:
Engagement (hours) is growing faster than bookings per hour, so monetization intensity slips as the user base skews younger and international. Ad platform ramp is promising but unproven at scale, and the take-rate vs. developer payouts tension limits long-run margin expansion. Infrastructure spend grows with concurrency, creating negative operating leverage if revenue per user underwhelms. Catalysts include DAU vs. payer conversion, bookings per DAU, ad RPMs, and older cohort penetration. Counterpoints: creator marketplace and ads could re-accelerate ARPU, but shorts argue Street models overestimate ad monetization slope and underplay cost to support real-time 3D.

Pitch Summary:
Pioneer Power Solutions, Inc. (PPSI) presents a compelling investment opportunity due to its strategic focus on the burgeoning electric vehicle (EV) infrastructure market. Following the divestiture of its e-Bloc business, PPSI is concentrating on its e-Boost segment, which has shown significant revenue growth and is poised for further expansion. The company's recent announcement of a special dividend underscores management's commitment to returning capital to shareholders. With a strong backlog and optimistic revenue guidance, PPSI is well-positioned to capitalize on the growing demand for EV charging solutions.

BSD Analysis:
PPSI's e-Boost segment has demonstrated impressive growth, with revenues increasing by 88% sequentially and 130% year-over-year. The company expects to achieve profitability in 2025, driven by a projected $28 million in revenues and a 35% gross margin. This growth is supported by a robust backlog and strong demand from sectors such as electric buses and package carriers. Despite the slowdown in EV adoption in the U.S., the market remains promising, and PPSI's planned launch of new products like HOMe-Boost could further enhance its growth trajectory. Valued at approximately 6x 2025E EBITDA, PPSI offers an attractive entry point for investors seeking exposure to the high-growth EV infrastructure sector. The company's strategic divestiture of its slower-growth e-Bloc business at an 11x EBITDA multiple further highlights the potential upside in PPSI's current valuation.

Pitch Summary:
Grown Rogue (OTC: GRUSF) took it easy in Q3 finishing relatively flat after soaring in Q1. This despite the company announcing that it has officially started planting in New Jersey, where prices are at least three times the prices the company receives in Oregon and Michigan and the company putting up an excellent earnings report. We continue to believe the company is exceptionally undervalued at 4 times our estimate of EBITDA next year and cannot wait for sales to start in New Jersey in early December. We think the stock can easily double if not triple from its current stock price in the next twelve months. This contrasts with a myriad of problems many other cannabis companies are experiencing and that should be showing at best flat growth to at worst negative growth in 2025.

BSD Analysis:
The manager maintains a strong bull thesis on Grown Rogue despite recent stock underperformance, viewing current levels as an attractive entry point. The key catalyst is the company's expansion into New Jersey, where cannabis prices are approximately three times higher than in their existing Oregon and Michigan markets. With New Jersey sales expected to commence in early December, this geographic expansion represents significant margin enhancement potential. The valuation appears compelling at 4x estimated next-year EBITDA, particularly given the company's operational excellence in highly competitive markets. The manager's confidence is reinforced by Grown Rogue's proven ability to generate strong cash flows even in price-compressed environments, citing $6 million annual cash flow on a $6 million capital investment in Michigan despite 70% pricing declines. This operational resilience contrasts sharply with industry peers facing flat to negative growth prospects in 2025. The 12-month price target implies 100-200% upside potential, reflecting the substantial value creation opportunity from the New Jersey market entry.

Pitch Summary:
In our last update, we wrote the bull case for Perimeter Solutions, which makes the fire retardant used to fight fires. Our bull case is that with a combination of more deadly fires and a lack of insurance coverage, the only solution is to be more aggressive fighting fires and to use a lot more fire retardant than in the past. Investors got a taste of this in Q2, when the company blew away earnings estimates of $0.01 per share and reported $0.14 per share instead. The stock jumped over 70% in Q3. After such a strong report, earnings estimates for Q3 jumped from $0.41 per share to $0.62 per share in Q3. The company just reported $0.65 per share for the third quarter. What is fascinating is the reaction the stock just had to its Q3 earnings. The stock fell (though a lot of it was profit taking after the stock had risen more than 125% from the beginning of the year). There is some confusion about the company's unique compensation scheme, in which management gets incentive shares if the stock price increases, very much like a hedge fund. Through weird accounting, they must estimate in advance how much their stock will rise and take a "charge" based on estimates of a share price going out past the year 2030. Here is the point to emphasize when you look through the accounting noise: The company generated almost $180 million in free cash flow in one quarter on a market cap of $1.7 billion. The company's cash balance went up from $43 million to $223 million in one quarter alone! As the monopoly producer of fire retardant, we think the company is going to be able to earn much more than previously thought as the Federal and state government fight fires much more aggressively and Perimeter slowly but surely raises its prices due to its monopolistic position and that fire retardant represents just 2-3% of the cost of fighting fires. And in a warming world with less insurance available to insure fire prone areas, Perimeter is poised to generate significant cash flows. We think the stock is still undervalued and plan to take advantage of any weakness in the stock.

BSD Analysis:
The manager presents a compelling bull case for Perimeter Solutions based on structural demand drivers for fire retardant. The thesis centers on increasing wildfire severity and reduced insurance coverage creating sustained demand for aggressive firefighting measures. Recent financial performance validates this view, with Q3 earnings of $0.65 per share significantly exceeding estimates of $0.62, following a Q2 beat where the company earned $0.14 versus $0.01 expected. The company's monopolistic position in fire retardant production provides pricing power, particularly given that retardant costs represent only 2-3% of total firefighting expenses. Strong cash generation is evident with $180 million in quarterly free cash flow on a $1.7 billion market cap, and cash balances surging from $43 million to $223 million in one quarter. Despite recent stock volatility due to accounting complexities around management compensation, the fundamental investment case remains intact. The manager views current levels as attractive entry points given the long-term structural tailwinds from climate change and evolving firefighting strategies.

Pitch Summary:
SEG is a recent spinoff from Howard Hughes Holdings (HHH), a developer of real estate and master-planned communities. SEG is what I have previously called a "bad bank" spin, where a company that is otherwise doing well spins off its troubled and/or non-core assets to highlight the value of the remaining parent company. I am generally very interested in bank bad spins, as this type of spin implies that shareholders of the parent company do not want what is being spun, thus we might find indiscriminate selling and a bargain valuation. However, my enthusiasm is highly contingent upon how "bad" these assets truly are. In the case of SEG, I believe the spin contains one large, troubled asset, the Seaport in Lower Manhattan, that I think is redeemable or at least priced at an excessive discount to a reasonable outcome. In addition, SEG contains a handful of non-core yet marketable assets and a lot of cash. At present, I believe SEG's cash and other assets are worth more than its current market cap, thus unless the Seaport turnaround eats considerably into the value of these assets, we should expect to do quite well on our investment over time. For perspective, I estimate SEG has cash per share of $16 and other assets of $25/sh., which compares to the current SEG price of $28. While the Seaport development has thus far been a failure, I estimate its construction costs were over $70/sh., implying significant upside potential if the new management team has even modest success. Before walking through SEG's assets, I want to flesh out the spin dynamics to explain why I think we have been able to buy shares at a large discount to fair value. SEG was spun with a nine-to-one ratio. At the time, HHH was valued at $70 and SEG was trading at $25, so the spinoff represented less than 5% of the overall value of existing shareholders' investment. I believe many HHH investors sold their SEG shares due to sloth, lack of mandate to own lower market cap companies, and a dislike of the Seaport investment after years of issues. Further, after the spin, SEG commenced a rights offering whereby for every one share already owned, SEG shareholders could buy an additional 1.25 shares of SEG at a $25 price. I believe the rights offering had a four-fold effect. First, it made holding onto the shares even less compelling for existing HHH shareholders. Second, the rights offering pinned SEG's price around $25 until it was completed, a typical dynamic seen in large rights offerings. Third, the rights offering limited SEG management's ability to discuss their business plans, limiting new investor interest. Finally, both HHH and SEG have a large shareholder, Bill Ackman's Pershing Square fund, who agreed to backstop the SEG rights offering. As Pershing Square already owns ~40% of each company, had the fund completely backstopped the rights offering, they would have owned almost 75% of the company. I do not know Ackman, and I will not pontificate on his motives. What I will say is that if McIntyre Partnerships ever agrees to backstop a rights offering and essentially take a company private, you can be sure I will demand a significant discount to take that risk. I believe a similar dynamic played out here. Regarding SEG's assets, I divide them into cash, other assets, and the Seaport. SEG has roughly $200MM in cash and 12.5MM shares outstanding, yielding $16/sh. at the hold co level. While there are two small pieces of non-recourse debt and some cash will be spent repositioning the Seaport, unless management's capital allocation is atrocious, I believe unencumbered cash representing over 50% of the market cap provides strong downside support. Regarding the other assets, the largest ones are a Las Vegas minor league baseball team and its stadium, air rights to build a casino in Las Vegas, and the 250 Water Street property in New York City. The baseball team and property were acquired for roughly $10/sh., net of debt, and are operating well. The air rights are difficult to value, but they sit on top of roughly 60 acres of prime Las Vegas Strip real estate, where recent land transactions have taken place in the $30-$50MM per acre range. As a rule of thumb, air rights are worth about a third of the overall land value, thus one could argue the LV air rights are worth $40-$65/sh., net of the 20% owned by their JV partner. However, there is no guarantee development will take place, and I value them at $4/sh. for conservatism. 250 Water Street is located adjacent to the Seaport, has sunk development costs of ~$240MM, and has been zoned to build a ~550,000 square foot building, implying costs of $440 PSF. While the Seaport has been underwhelming relative to original expectations, in a Manhattan real estate development, land costs typically range between $250-$400 PSF, and the 250 Water Street property is significantly further along in its entitlement process than most land deals. I conservatively value it at $300 PSF, or $8/sh. net of debt. SEG also has a handful of smaller JVs and assets that I value at $3/sh. Regarding the Seaport, there are several different assets, but the primary driver of value are several newly constructed buildings with a combined ~500,000 SF of rentable space. A full examination of the Seaport's troubles is beyond the scope of this letter, but suffice to say, execution has not been as envisioned when HHH sank close to $1B into these assets. Significant space remains unleased, and the properties are losing a modest amount of money at present. With negative cash flow and a bad track record, I am sympathetic to the previous HHH shareholders who sold and said "good riddance" upon the spin. However, there is a price for almost anything, and I believe we are buying at an unrealistically low valuation. First, I believe the cash burn concerns are real but exaggerated, and I do not anticipate SEG generating significant losses beyond tenant improvement expenses. As is the case with most spinoffs, GAAP accounting of SEG's historical operations is not necessarily reflective of the company's post-spin expenses, something management was restricted from fully explaining during the rights offering period. As the space is only approximately 60% leased, I am not surprised by a modest cash burn. Once leasing is completed, I believe the asset will be solidly cash flow positive, which I expect to occur in the next two years. Second, I estimate the replacement cost for these assets at $1,000 PSF at a minimum, and likely closer to $1,300, yielding $40-$50/sh. While replacement costs are not necessarily indicative of current value, I believe Lower Manhattan will remain a growing destination and I expect the cost to develop and the Seaport's rent PSF to converge over time. Finally, there is an active rental market in the area that provides comparable transactions for what the full lease out of the Seaport will look like. On the low end, old Class B office space in the area rents for $40 PSF. In a more optimistic scenario, street-level retail rents in Lower Manhattan average $200-$300 PSF, Manhattan restaurant rents average $150-$400 PSF, and new office space across the river in Brooklyn currently rents for $70-$90 PSF. Further, several Seaport assets are already fully leased at rents over $100 PSF. I conservatively estimate the Seaport will achieve rents of $75 PSF net of overhead, which yields $40MM in NOI. A 6% cap rate would yield $50/sh. in value. Adding it all up and then applying a modest hold co discount, I believe a conservative price target for SEG is $70/sh., with significant catalysts from management providing clarity and the lease out of the Seaport. If the new management team successfully turns around the Seaport, I believe a significantly higher price is possible over time.

BSD Analysis:
McIntyre presents a compelling spinoff opportunity in Seaport Entertainment Group, arguing the market has created an attractive entry point through forced selling dynamics. The manager's thesis centers on SEG trading below the sum of its parts, with $16/share in cash and $25/share in other assets versus a $28 market price, essentially getting the troubled Seaport asset for free. The investment case relies heavily on the Seaport's turnaround potential, where McIntyre estimates replacement costs of $1,000-$1,300 per square foot against current distressed valuations. Key catalysts include achieving full lease-up of the 500,000 square feet of space (currently 60% leased) and management providing operational clarity post-rights offering. The manager's conservative NOI estimate of $40MM at a 6% cap rate yields $50/share value for the Seaport alone. Risk factors include continued execution challenges at the Seaport and potential cash burn during the turnaround period. The $70 price target represents 150% upside from the $28 entry point, supported by detailed asset-by-asset valuation work including Las Vegas air rights and the 250 Water Street development property.

Pitch Summary:
Materially overstated revenue; inventory overstated by x2; COGS materially overstated;

BSD Analysis:
e.l.f. Beauty has gained share via TikTok virality, value positioning, and retail penetration. Bears focus on peak-multiple risk, fading social media momentum, and gross margin vulnerability as the brand invests in international and skincare. Growth increasingly relies on distribution expansion rather than same-store velocity. Catalysts: sell-through vs. shipment divergence, social media virality metrics, and competitor launches. Counterpoints: digital edge is real, but shorts argue valuation embeds perfect execution in a cyclical, low-barrier category.

Pitch Summary:
The product design is not approved by the regulator; no revenue for years; no commercially viable microreactors; technical and financial challenges; at least 4 years to obtain a license;

BSD Analysis:
Oklo is a pre-revenue SMR developer. The bear case rests on multi-decade regulatory, licensing, and commercialization hurdles in nuclear power. Economics of microreactors remain unproven at scale, with unit CAPEX potentially dwarfing forecasted power revenues. Reliance on DOE/DoD contracts and subsidies adds policy risk. Skeptics argue the timeline mismatch (revenues expected late 2030s) makes valuation unsustainable. Catalysts: NRC licensing, government funding rounds, early MOUs. Counterpoints: nuclear resurgence could spark speculative rallies, but shorts see this as a “show-me decade” stock.