Vivendi spinoff day

Vivendi spin-off day — I’m a silly idiot for not realising this sooner, but Vivendi actually spun off their companies overnight (so the risk-arb was short lived!). Canal Plus dropped on its first day on the LSE, while Havas was up slightly (on Amsterdam) and Louis Hatchette was up around 26% on the Euronext. Hatchette popping is reflective of its ~66% ownership in Lagardere.

Havas is interesting because it’s one of the few small players left in advertising — the rest have been gobbled up into a kind unholy amalgamation. I.e. a likely acquisition target. Remaining assets stay within Vivendi, which mostly include their stake in UMG and Telecom Italia and a few unlisted cos (CVC is keen to buy Vivendi’s stake in Telecom Italia which may unlock more value).

Over at WMG our friend Zaz is restructuring the debt-monster media company into two segments — linear TV (i.e. dead weight) and the ‘growth’ assets — streaming, HBO, etc. The dead weight co could be a candidate to merge with ComCast’s recently spun off assets, which include NBCUniversal — i.e. dead weight with more dead weight, squeezing what it can from a stone.

Closer to home — MetroPerformanceGlass, that invertebrate disappointment, received a takeover offer of 8c per share from Viridian Owner Cresent Capital Partners. Opportunistic given that 18c was Masfen and co’s bid last year, which the board probably should’ve taken. This offer values the co at 14.8mn. Again, they had a better offer last year — this one is taking the piss a bit.

Also of note — Bluebell Capital Partners closing their activist hedge fund. They had some good “gos” at Richemont and Tiffany. I used to have a copy of their Richemont presentation (can’t find it now) — if anyone has a copy — email me. From memory it was a good 'un.

Max Stupid continues — NASDAQ at record highs, BTC around 105k, stupid stocks like IonQ up 23% on the day, etc. The question Dylan and I are always considering is when max stupid stops. We don’t know. But Dylan pointed out that the NASDAQ traded around 200x earnings before the dot com bubble. Gotta remember though that a lot of the NASDAQ is now highly profitable, unlike then, so probably a better metric is looking at how well BTC and other cryptos are doing.

Our friend

Le Shrub

likes playing this by way of the Russell 2000 (love you Shrub). Dylan and I both like playing it buy owning some IBIT calls to take advantage of max stupid (not fin advice, do your own research, I am a monkey at a keyboard). But when max stupid ends you will want a short book and/or cash to wash up yo stank face.

I think more max stupid to go — Microstrategy is set to enter the NASDAQ 100 (i.e. buying pressure from indexes/passive flows), plus our favourite beacon of max stupid, Masayoshi Son, has just announced a $100bn investment into the US in partnership with Trump. I will remind you all of how Masayoshi Son makes slides:

Lachlan Corner

About twice a week Lachlan sends me an investment idea or do a chart for me. Obviously this is not advice, Lachlan drinks far too many cherry cokes, but it is always fun showing his ideas. I asked him to make a chart showing the sales of RTDs vs box office takings of Marvel movies. Diageo is one of the few companies that clearly breaks down their RTD sales, so it’s an imperfect chart. My “thesis” is that we have a lot of baby adults who enjoy watching Marvel nonsense and their palettes are undeveloped, so they enjoy drinking Pals or similar. It is a funny chart.

Here is a Lachlan idea:

Been looking at this interesting company today.

Finance of America Companies (FOA)

FOA, a $240M market cap reverse mortgage provider, plus they have a market share of 37% of the total reverse mortgages in the U.S.

FOA has $7.3B in reverse mortgages, generating residual income from the spread between the 7.9% floating mortgage rate and fixed investor payouts. This 4.8% spread yields $350M annually.

There is a silver tsunami of $14T of home equity that will either be passed down or used for income. I think FOA has a big chance to benefit from this.

I'm not fully comfortable investing since it's a finance company and I prefer to invest in a simple business that a ham sandwich can run. I just wanted to share because I found it pretty interesting and maybe you can get some benefit out of it idk. I also like the fact it helps old people, puts a little bit of pocket money in their pockets for bingo or whatever. I think the elderly are an underappreciated group.

Lachlan is 20 or something. I predict that my the time I am old, Lachlan will be running the country.