RichardJK

Most of making money is just being patient and doing boring things consistently. Nobody wants to hear that because it doesn’t go viral. But it’s the truth.

Pretty big development on $STIM just hit. Jorey Chernett, a well regarded health care investor with a large balance sheet, just changed his 14.1% stake from a 13G to a 13D, indicating he may no longer be passive. Why? Well, we think an obvious place to start is that the SOTP implied by the market makes zero sense. For example, $BWAY, a pure public comp to STIM's TMS device business trades for 7x 2026 revenues (7 x $65mn in est rev, less $64mn in net cash = $453mn EV). STIM has similar TMS device biz, Neurostar, which should do around $70mn in revenue this year. The STIM EV is ~$143mn including op lease liabilities as debt. But STIM also has a much faster growing Clinic business, Greenbrook, with 130 locations nationwide and ~$87mn in trailing 12 month revenue. Greenbrook also is positioned to be one of the exclusive care providers for Compass Pathways, $CMPS, soon to be FDA approved COMP360 psilocybin treatment for TRD. So STIM has the TMS device biz with $70mn in revs and the Clinic biz with near $90mn in revs and a total EV of just $143mn or 0.8x expected 2026 revs. This is what we call a SOTP discount, and it is one of the most egregious we've ever seen. So what might an activist do here? They might push for a sale of one of these business. I would argue it makes the most sense to evaluate strategic alternatives wrt the device biz, given the market imposed glaring discount to BWAY. If STIM sells the device biz for just 4x revenues, a 43% discount to BWAY, then that would gross $280mn in proceeds. More than enough to pay down all of their debt, and issue a special dividend to shareholders. Put another way, 4x revenue is $280mn which is 2x today's market cap! Put another way, the market is putting negative value on the Clinic business! Eliminate $65mn in debt, that adds $1 to equity. We still have $135mn in net tax cash from the sale of the hardware biz, so either buy back stock or issue a $2/share special divy...the options here are too compelling for the board to ignore. Our hope is that a formal Strategic Review will thus commence soon and this could be why we have the change from 13G to 13D. Not financial advice. We may hold long or short positions in any securities mentioned, and may buy or sell such securities without prior disclosure.

if Atlanta locked the fuck in, we would consolidate Fulton, DeKalb, Clayton, Cobb, and Gwinnett under the City of Atlanta

SHMD - Got this back under 6 with a 1/4 size position.

VTI - Sold 325C April, 3.60 My actual idea didn't work out, but this is fine. Adding some cash and playing defense on the shares that got assigned at 325.

I added to $RKT here on this move over $15.25 but only slightly as I do not want to hurt my cost bass. But, I needed more shares!