David Brail

@AsifSuria @JulianKlymochko Not the cash/stock election part, but aspect where GSAT holders deal value is capped at 90, and the ratio declines as the acquirors stock goes through the cap. Usually the ratio has a minimum. Here the ratio just declines the higher Amazon goes during the pricing period

The lack of a collar was one of the reasons the Core Scientific $CORZ - CoreWeave $CRWV deal fell apart. We come across cash or stock deals from time to time. One cash or stock deal without a collar that comes to mind was the acquisition of VMWare by Broadcom $AVGO The cash/stock proration in that deal was 50/50 and I remember the value fluctuating a lot during the 18 months the deal was active.

If you are wondering why GlobalStar $GSAT is trading at a 12% discount to the $90 per share cash portion that Amazon $AMZN is offering for the company, it is partly because the deal is a cash or stock deal. Shareholders can receive either $90 per share in cash or 0.3210 shares of Amazon. Based on today's Amazon price of $248.50, it works to just shy of $80. There is a proration factor where a maximum of 40% of the consideration will be paid in cash and the rest in Amazon stock. Beyond this structure, the regulatory approvals this deal will require will also take a while to play out and the initial guidance was that the deal might close at some point in 2027. The outside date is April 13, 2027, but there can be two extensions to October 13, 2027 and April 13, 2028. We also covered the company on our podcast several times including in episodes 12, 43 and more recently in episode 61 after rumors of an Amazon deal surfaced. Here is some of what we wrote about GlobalStar in a March 2025 Insider Weekends article before adding the company to our model portfolio. We exited the position in January 2026 after it had appreciated nearly 200% and missed out on this last leg of gains from the deal with Amazon.

It all my years in arbitrage, I’ve never seen a deal structured this way. I’m shocked Jay Monroe agreed to these terms. It’s so one sided in favor of Amazon. A collar with the min and max ratio would have been much more fair. We owned it, was very happy to sell it yesterday at $80 and move on. $GSAT

@JulianKlymochko Yes indeed Julian!

@FundamentEdge Event-driven.

Our experience has been similar. We are more than driven so the metrics and information in the reports that we are creating are different, but it looks like the methodology underneath. It is very similar. Every iteration gets better. I kind of feel like we’re in the second or third end, and as we learn the capabilities of AI, we can direct it to produce better and better reports, more closely targeted to the metrics that matter for our particular investment style. And while we’re not even aware of the full suite of capabilities that exist today, it’s incredible. How fast the capabilities are being added. Eventually, we will kind of catch up I think. But in the meantime, we’re driving massive value from AI in our process. It reminds me of when regulation FD came along. I’ve always worked at small shops and I felt back in the 80s and 90s. The big shops had a structural advantage that FD diminished. Now with AI, I think we can produce the volume of research of a much bigger shop. Even though the quality of our research I believe has always been higher.

I could never quite get a chat-bot to give me a good, institutional-grade earnings preview. It required the confluence of too many separate prompts. I was working on this today for $DHR, and I personally was quite impressed with the result (this is grading my own homework, for sure). All I have to do is enter a ticker, press button, and this is the output I get. The key unlock is an orchestrated skills pipeline in a multi-model agentic workspace with tool calling capabilities. This is built solely on publicly available information - no primary research, expert network calls, data or management touchpoints. One can imagine how much better this gets piping in the right Research Context. Full preview on comments - let me know what you think.

@BobHarig He also spit into the cup once after missing a short putt, w half the field yet to play the hole. Class act.

Sergio got a code of conduct warning

I think the decline in the alternative managers based on fears around private debt, such as Apollo and Blackstone, is overdone. I think they will have a hard time selling this product to retail because the limited liquidity feature obviously is flawed. But institutions will buy the asset class with no liquidity. From their perspective it’s marginally better than syndicated bank loans, they pick up a little extra return in exchange for the liquidity, and I don’t think the default experience will be materially different in the two types of senior lending. One area that is not getting enough scrutiny is the situation at Blue Owl. Some of the principals have levered their stock thru margin loans at much higher prices. The terms of these loans are opaque. But with the stock making fresh lows every day, at some point they’re gonna run out of additional shares to post against the loan and I have no idea what assets they may have outside of $OWL stock to post to prevent the LTV rising to a level that we may see forced selling. I think it’s in the company‘s interest to get in front of this and disclose where things stand with these margin loans. In the meantime, as far as I know, these issues do not exist at Blackstone Apollo, KKR, Ares etc., which makes them relatively more attractive if you believe the private credit issue slowly goes away $OWL $APO, $BX, $KKR Discl long APO BX

Agree with you regarding Centerspace. Our work points to a deal north of $75 a share. The process has been running long enough that we would expect an announcement of a deal sometime in the next six weeks. It was good to see Ares as a buyer of Whitestone, confirms private equity still has an appetite for REITS. The biggest pushback we get on Centerspace is that they play in somewhat marginal markets, but that shouldn’t be enough to prevent a successful sale.

Someone called me a truffle pig yesterday for REIT buyouts following the $WSR buyout Never thought I would feel proud to be called a pig $ROIC $ALEX $WSR for grocery anchor shopping centers $DRR.U $VRE for MF and $CSR in the process $NSA for SS (small operations position)

100%. Clients of the RIA's that sell these to them don't highlight the fact that when the client may want to use the redemption feature to meet an unexpected liquidity need, there is a huge chance it will be in a period of market stress when everyone like them will also wan that limited liquidity.

Spoke to a classic boomer HNW investor yesterday casually about this topic. He is retired and has his money with an advisor at one of the bulge bracket banks. His view was that the private equity and credit firms loaded up on retail investors while the institutions all pulled out. He feels like he is left “holding the bag”. I explained that it’s not exactly what is going on but it gave some insight into the mindset of the end client of these products. Oh and btw, it’s 10% of his portfolio and he “isn’t upset about the returns”. I’ve said all along it’s not that these products are inherently bad, it’s how they were sold.

@compound248 We own it and had the same questions. Best we can come up with is high short interest, and no borrow available, at least at our PB, Goldman Sachs.

“Shift4 Payments Jumps Most in Four Years,” and NOBODY knows why on zero public news? $FOUR

Anyone know?

foolish move. what do they gain? some incremental pressure on special committee not to find the $VCTR superior ? what if VCTR bumps again, and Peltz might have the option of bumping below VCTR but high enough that holders owuld still accept it due to timing advantage and modest risk of VCTR not getting client consents?

$JHG trian goes out of their way to file another PR saying "best & final"

Trian bumped its cash bid from $49 to $52 in Janus, versus Victory's $57 cash & stock bid. Peltz must have been nervous the special committee would have found the Victory bid superior. $52 may be enough to keep the special committee in line here with the various risks to the Victory bid. Holders may also vote to accept this bid despite the inferior economics do to faster timing and lower risk of not closing. Victory looks financially stretched here, but if they really want it, they could further bump its bid to force the special committee into negotiating. I am skeptical tho. discl long $JHG $VCTR

@neil_sipes4 @gatorcapital Peltz out there poisoning the waters and giving the special committee cover to say "not superior" . Doesn't look like Peltz is bumping. Now up to $VCTR to solicit "no" votes at meeting. Shouldn't be too hard given high required "yes" vote threshold. long $JHG

@gatorcapital @DavidBrail x.com/neil_sipes4/st…

New $VCTR bid for $JHG. In the slide deck, Victory says the deal will result in +50% accretion. 2027 EPS goes from $7.56 to at least $11.34. The combined company would trade at 6x 2027 EPS.

this is the wsj piece wsj.com/finance/invest…

Am concerned that Peltz and/or the Janus board is trying to poison the waters for the Victory bid by causing these negative articles to appear in WSJ and elsewhere that 1) Janus portfolio managers don't want to work for Victory, and large allocators including Morgan Stanley do not want Victory to buy Janus. I no longer believe the special committee will find the new Victory bid to be "superior", and they can point to these risks. I have lightened in $JHG, expect to buy back lower after special committee speaks. There is still low chance janus can get the vote for the Trian deal with Victory bidding far above, so this is a speedbump. disc: long $JHG $VCTR

@neil_sipes4 is the $JHG special committee going to start playing fair? or continue to unduly favor Peltz?

Forget Netflix vs. Paramount for Warner Bros Discovery... Victory vs. Trian for Janus Henderson is the real M&A drama. $VCTR aiming to sweeten ~$57/sh bid for $JHG with bigger cash mix at $40 vs. $30.

@InsideArbitrage Special committee going to keep favoring Peltz?

Victory Capital $VCTR submitted an improved offer to acquire Janus Henderson $JHG - Under the revised proposal, Janus Henderson shareholders would receive $40 per share in cash and a fixed exchange ratio of 0.25 shares of Victory Capital common stock for each Janus Henderson share owned.

Here is the full press release on the improved bid businesswire.com/news/home/2026…

As we had expected, Victory Capital has bumped its bid for Janus. They added $10 of cash to the bid and with the stock component their bid is now worth ~$56, versus Trian’s $49 in cash. Victory also addressed several of the special committee’s objections to its bid - the client consent condition, the shareholder vote at victory, and the necessity of a high voter turnout to meet the super-majority requirement at the Janus vote, and the quality of its financing. It’s gonna be increasingly hard for the special committee to hide behind spurious concerns with a -$7 difference in the bids. It will soon become clear if they’re unfairly favoring Peltz because of some misplaced loyalty to him. If I were in Peltz’s shoes, I would bump to 51 in cash to make it easier for the board to turn down Victory. Disclosure - Long $JHG $VCTR