Florian Buschek

[Compound248 💰 @compound248]

Anthropic published its IPO roadshow slides and presentation today.

Below, I provide some highlights.

Scroll through, and I've provided a link to all the slides at the end. 👇

1. $ANT is growing rapidly without burning cash and already has a fortress balance sheet.

[Sebastian Krog @SebKrog]

What supposed to be the strongest earnings update, turned out to be disappointing throughout all RIN producers.

The overarching theme: none of them were able to actually capture strong spot-margins. For some it was stated as one-time operational issue ($DAR), others have to prove the market they are capable of achieving it.

As for $FF, I will keep it brief here since I covered it in detail in the subscriber discord.

First: management has done a poor job of communicating what has happened/ what drives economics here. I also think FF is a weird company, that no one really understands. No real analyst coverage and the chemical guys don’t get biodiesel and the RIN guys prefer $DAR or $CLMT.

The key to understand is that they have one big plant from where they operate both segments. Overhead is shared and allocation to COGS depends on utilization. Hence, if one segment operates at lower utilization, like the chemical segment did this quarter, it drags down the other segments GM.

This is one explanation, why margin looked extremely weak on surface. It doesn’t explain the entire gap to spot-margin but add to that some timing lag, and you can get a sense that actual realized margin on each gallon was not as bad as the market thinks after this sell-off.

Ultimately, we will know from Q4 onwards how close they can get to spot-margins.

[Florian Buschek @FBuschek]

@crackspread1 Oh boy
Seems overdone though

[John Huber @JohnHuber72]

New post with some weekend Thoughts: Datacenters, AI Stocks and the AI Religion
https://t.co/JlXyeFpbIk

[barrier island man @crackspread1]

Wanted to repost this. $ff has earnings on Monday morning. I expect them to post STOUT numbers. And as you can see it didn’t get pulled up by all the CRAKheads. Admittedly I felt like I was locked outside the party looking in as my ff position was considerably larger than $CLMT(that’s changed because I added to clmt significantly in the mid 40s). Needles to say even with the CRAk route it still has catching up to do. I have them forecasted to have a 125-160 million dollar cash balance by EOY 2027. That’s 3-4 bucks a share on a $5.30 stock that has ZERO debt. Enjoy your weekends!

[Corey Hoffstein 🏴‍☠️ @choffstein]

A friendly reminder that @KeithMcCullough's "Family Office" has returned by ~4% a year annualized.

(Analysis based upon stitching together ~10 self-published screen shots of his account over time: https://t.co/9Xpv61tjpl)

[Sebastian Krog @SebKrog]

Much respect to this guy. Not only has he covered the name, along the RIN thesis, better than any other for years, all publicly, but also has no ego to point out what went worse than expected.

[Liger Cub @realLigerCub]

$USIO reports its Q3 results on Tuesday after the market closes. Once again, a great setup for a beat and raise.

We are now used to 3 out of 4 biz lines growing at 20%+ rates, with the exception of card issuing. The latter has now implemented 4 school voucher programs that should contribute beautifully. Record ACH metrics have already been pre-announced. Re PayFac, mgmt “anticipate[s] a nice pickup in the third quarter from a couple of new ISVs that are ramping up.” And for Output Solutions, “inbound traffic is on the rise” and the “majority of that's reoccurring.”

Mgmt hinted at operating leverage during the LD Micro and Planet MicroCap conferences and also at a potential revenue raise from the current +14-16%: “As you can see, first half was at 17%, so we remain conservative in our guidance, and we’ll continue to evaluate that as the remainder of the year progresses.”

Added during the recent weakness and my pos is now as large as it can get. Rare setup and max conviction, but obv many things can go wrong in a quarter, even if I struggle to build a bear case here.

P.S. A quick and dirty way to value the company: $300M in Ion customer balances (as guided for next year) @ ~3% translates to $0.30+ in EPS. Apply a 10x multiple and you get $3.00+ per share. In other words, Ion alone gets you there. The PayFac flywheel, ACH tailwinds, school voucher programs, Title IV disbursements and the Harris partnership all come for free.

[Florian Buschek @FBuschek]

@crackspread1 Price action is puzzling

[0SG @Zerosumgame33]

$CLMT announced revised agreement w/ Warburg....

My reading of the tea leaves...

Cleans up capital structure for an outright sale of MRL as Calumet ownership of MRL goes from 87% to 100% (92% above $750M floor equity value).

A buyer can take control without negotiating with Warburg over its 13% stake. Warburg’s remaining claims are a fixed preferred balance, which gets paid off, and warrants that only matter above $750M floor.

Under the old terms, a "qualified IPO" was the event that turned Warburg’s 13% stake into common. With that stake now gone and structured as a call option above $750M floor, an IPO no longer hands Warburg 13%.

At 11.5%, Warburg’s preferred grows by about $45M a year, eating into the common equity Calumet owns. This gives Calumet a strong incentive to reach a liquidity event.

[0SG @Zerosumgame33]

$CLMT highly credible and respected source told me that today, this afternoon actually, Motiva, the US base oil price leader, raised its price on its group II 600N base oil by 12% from $7.70/gal to $8.62. Pure margin. Unprecedented demand inelasticity.

The market is blind to the base oil bonanza extravaganza that’s NOT priced into $CLMT stock.

Friday.

[Michael Pettis @michaelxpettis]

This very interesting paper argues that global imbalances cannot be understood simply as the outcome of independent national saving and investment decisions. The structure of the international monetary and financial system helps shape those decisions, determines how capital flows across borders, and influences which countries bear the costs of adjustment.

[Breakout Investors @BreakoutInvestr]

$DAIO appointed Douglas Adams, formerly of Source Electronics and Avnet, as SVP Global Services, Support and Quality. The company says he joins CEO Bill Wentworth and Monty Reagan to lead its Programming-as-a-Service expansion as A&J Programming is integrated.

[David Barbato @DavidBarbato_]

In 2010, @JohnHuber72 had a plan to raise money and buy 100 foreclosed homes.

He and a partner had spent the GFC buying houses from banks at 50 cents on the dollar. They peaked at 19 units. Shortly after, Blackstone and the big single-family rental funds moved into the same trade.

He passed. He didn’t want to spend the next decade managing houses.

He spent three years winding down the real estate and launched Saber Capital in 2013, modeled on Buffett’s 1950s partnership.

@iancassel and I sat down with John for our latest @MicroCapClub podcast.

In this episode, John explains why he moved away from his "never sell great businesses" rule. He uses Copart to show how a stock at 40 to 50 times earnings can fall 50% on a small hiccup. He also covers how he splits his portfolio between long-term compounders and a basket of Ben Graham-style bargains, how Pitney Bowes moved from one bucket to the other, and how he sizes positions so no single mistake can do serious damage. The conversation opens with his essay on the Tampa Bay Rays and what happens when everyone optimizes for the same metric.

Chapters

00:00 Intro
02:38 What the Tampa Bay Rays teach investors
09:58 Home runs vs base hits
11:29 When to sell a great business
15:41 Lessons from a self-taught investor dad
17:28 Why journalism makes better investors
19:11 Buying houses at 50 cents on the dollar
22:12 Why he walked away from real estate
24:16 Compounders vs bargains
27:51 When a turnaround becomes a compounder
32:04 Why he keeps an investment journal
34:14 Margins vs return on capital
38:39 Should you look for value overseas?
41:19 Inside his Ben Graham basket
42:31 How he sizes his biggest positions
45:38 Concentrated, but never fragile
48:01 Greenblatt, Schloss and many ways to win
51:04 How to stay in the game for decades
53:24 Why there’s no high-risk version of Saber
56:07 Do the work on your desk

[3:10 Value @310Value]

Week 14 of the $GFL buyout watch. Here’s the latest.
1) BC partners papering their deal with LPs.
2) Bid date extended to 11/9.
3) New party,a SWF, entered the process. Extended bid date makes sense in light of new entrant, but it’s not too long. My guess is the SWF is GIC who already knows both GFL and Secure. Does this mean we may be seeing a price starting with a 6?
4) Debt portable with or without BC roll.
5) IR team member out - “unrelated” to process.
6) General recovery in sector.
7) Strong Q3 print by GFL/Secure.

[𝓜 @Midewontmiss]

What’s a polite way to tell someone, “I’m not discussing this with you because your entire understanding of the subject is built on so many interconnected misconceptions that correcting them would require uninstalling your current worldview and starting the tutorial from birth”?

[Lake Cornelia Research Management @CorneliaLake]

Buffett: A CEO calls and says he has a great deal for you and all you wanted was a 6% discount to last trade?

Abel: It was a chance to invest in a company you said we missed

Munger: The miss was in 2003

Abel: The bankers all said we got it cheap to where would could buy it

Buffett: Wait, your tipping point was banker praise?

Abel: They congratulated me on the deal

Munger: Did you get a deal toy?

Buffett: What else are we doing because “the bankers” said so

Abel: I think you are both over reacting. Its one trade

Buffett: You just pissed away 20% of our profits from Japanese trading houses

Munger: Maybe he doesn’t like sushi

Abel: David Sokol said he loved our trade and owns in his PA

[Professor Oak @Prof_Oak_]

Surprise 1: Anthropic acquired a one-person biotech
.
.
.
Surprise 2: that person is me
Surprise 3: I’m here to tell you all about it

Yes, this is what you think it is; after 6 yrs of increasingly loose anonymity: the Professor Oak reveal post

…and yes, it has gotten so boring around here that I’m literally doxxing myself to spice up the timeline

-------
Ok, allow me to introduce myself. My name is Cody Tranbarger. I mostly tweet, but occasionally find time to dabble in drug dev & starting/building biotechs. My past lives span the VC, crossover, startup continuum; Prof Oak has been my way of keeping a digital foot in those worlds, despite having my physical feet planted elsewhere.

The past 18 mo, ‘elsewhere’ was Mithril Medicine, a co. I founded to develop bsAbs for LAMA2-CMD & other ECM-related genetic diseases.

Mithril was born out of hands-on building with @MikeNGladstone, @JasonPaulRhodes, @LifeSciVC, & team @atlasventure. Somehow, I made enough half-decent calls along the way (even a broken clock is right twice a day, eh?) to convince them Mithril/I warranted a small seed. While I can hardly rationalize such an outrageously cavalier bet, I’m grateful for it, & I'd partner with Atlas again in a heartbeat.

In typical AV fashion, Mithril’s primordial form was virtual, decentralized, & ultra-lean. This stage tends to be short-lived, but for Mithril, it worked surprisingly well, for surprisingly long, thanks in part to the rapid maturation of the AI tools I used liberally.

Eventually, Mithril became a bit of an experiment itself - to find the upper bound of how far it could scale as a single operator + a bunch of Claude (+ a stellar bench of part-time consultants).

In parallel, I started spending time with @nc_frey, @an1lam, & @CoefficientBio team; and promptly experienced, for the 1st time, AI at the frontier. Soon thereafter, Mithril stopped looking like an experiment, & started looking like a preview of an entirely new operating model.

From that spark came “Pipeline-in-a-Person.” The idea immediately resonated when we shared it here back in April; and it was central to the shared vision that led to Anthropic’s acquisition of Mithril, & my joining the team.

Why join Anthropic? Three reasons.
(1) For Mithril, the programs continue, with more resources & infrastructure behind them, and as much Claude as I can put to work.

(2) For me, the chance to start several more programs, & find out how many one person can actually run in parallel - an almost unprecedented luxury for a curious drug hunter.

(3) For our mission, a path to institutionalize & scale this new way of working, then put it in the hands of all of biopharma, all over the world - which, candidly, I find the most energizing.

Will AI x Bio cure diseases? Unequivocally yes, imo… but not by the route that gets the most airtime. Rather than timeline acceleration & compression, I see orchestration & parallelization as today's low-hanging fruit.

Most drug hunters see a handful of go/no-go calls in a career, & spend entirely too much of the rest trading emails (my inbox can attest).

Give them the bandwidth to run several programs at once, and the time to focus on scientific judgment, and I’m willing to bet they’ll make better calls. And at scale, better calls translate to more drugs, higher hit rates, broader patient impact, & likely, a disease or 10 or 100 cured. I couldn't be more excited to build toward that future @AnthropicAI.

Finally, a heartfelt thank you to BioTwitter/X. The end of anonymity is bittersweet, but if anyone’s earned a proper introduction, you all have.

It’s difficult to overstate how much this app has done for me: a decade of education, plenty of friends, many job opportunities, several mentors, a few investors, even a co-founder (fmr). It was the generosity of this community that inspired me to start posting 6 years ago, after just as many years lurking. I hope I’ve been able to pay it forward, in my own small way.

But, to be clear, Prof Oak isn’t going anywhere. Same beat, same themes, and now, a front-row seat to drug development at the frontier. Stay tuned for dispatches from the trenches; and remember...

Gotta Cure 'Em All