Liam

Opinions expressed are my own and should represent the views of everyone.
Let's talk undervalued stocks.

[Liam @LiamContraire]

$BMBL Bumble's market cap is so disconnected from reality that it can double in value every year for the next 5 years by simply returning to past growth rate of 12.1%.
https://t.co/Fkq04yOl4x

[Liam @LiamContraire]

Who is the bigger threat to the US carriers; cable or starlink.

[Alex Morris (TSOH Investment Research) @TSOH_Investing]

Cable Wireless Lines $CMCSA $CHTR

[Liam @LiamContraire]

@SteinHajek Nothing too exciting eh, over 50% of sales are direct to consumer now. That was quick and margins have farther to go. I expect we'll se a 13D/A in a few months.

[Liam @LiamContraire]

As we approach fair value judgement day for $DDI (DoubleDown Interactive) it trades at $11.70 per share and I am perhaps more enthusiastic about the investment today than when I was buying it for $8.29 10 weeks ago. Deep value is great but slightly more shallow value with an immediate catalyst is often better.

The DoubleU Games buyout is the expedited catalyst we needed to pave a path towards fair value. I believe the $11.25 buyout price is an opening salvo that could potentially end at 3x that amount.

If we back out the investing interest earned from their sizeable cash pile $DDI had roughly $125m of FCF from their core businesses in 2025 (it only includes 3.5 months of WHOW games contribution which should easily add 5M more in FCF this year but we will ignore that since FCF from their core app may decline in step). A fair value for this stable high margin business sits between a 7x-22x multiple depending on your forward assumptions. Lets assume a 15x multiple which implies a 1.88B valuation, adding back in $525M of cash we land on a quick & dirty fair value of $2.4B or $48.50 per ADS.

The stock market is not valuing DDI’s business anywhere near that - it's thinly covered, legally dubious, facing regulatory headwinds across all segments, and it's Korean owned and operated which brings with it the infamous Korean discount. Analysts consensus price target is $18.20 with $22 on the high end. to get a deal our patient Korean overlords need a good price and our largest minority shareholders need one too. I think there's a middle ground between $18-$29 where a deal could satisfy both parties. $RILY in particular should be amenable to a quick cash out in the low end of that range given their approaching debt maturities and difficulty in liquidating their other investments to cover it. They have held $DDI since it’s IPO 5 years ago with a cost basis near $18 - they know the business intimately, it’s a much better business 5 years on, they are unlikely to accept a fraction of fair value while holding a $23 price target.

In 4 months $DDI should have ~$570M in cash on hand in time for a finalized deal (given our 16.3M of minority shares) it leaves them the option to pay $35 per ADS with cash on hand, so I expect that to be our hard cap on a potential deal this year.

The five hundred million dollar question is what does management do if they can't close a deal? Do they drop the act, repeatedly refusing sensible share buybacks at negative enterprise value while claiming they are simply waiting for a large accretive acquisition? Special situation investors care only for the degree of drop immediately following a deal break, I care more about what comes in the months/years that follow.

I think most outcomes are favorable here but there's always room for bad faith and BS. Overall I am quite optimistic and would add at todays prices if I didn’t already max my position size the day it was announced. If the buyout fails I think the secret is out and we are more likely to see buybacks than a return to business as usual. Even if a deal closes on the low end of my estimated range it's more than a double in about a year and an opportunity to invest into other promising deeply undervalued businesses; $GAMB, $BMBL, $GSL, and $KSPI look great at todays prices.

DDI’s parent and potential acquirer the Korean listed DoubleU Games (KRX:192080) is now accessible on Interactive Brokers and may be worth rolling into as they treat their shareholders much better than those of their subsidiary, as evidenced by the attached image from their investor presentation. As always there's no rush, I’ll continue to turn over rocks having barely scratched the surface of the tens of thousands of businesses that I can understand well enough to invest in.

[Liam @LiamContraire]

I reiterate my position $BMBL has stabilized and is a screaming buy. https://t.co/Fkq04yOl4x

[Liam @LiamContraire]

@PrivateSamyFund @RoyalPips 2.0 was delayed so we haven't even seen the effect it will have.

[Liam @LiamContraire]

$BMBL Down after hours despite stopping the paid user churn despite delays in the new cloud platform. Bodes well in my view, we'll see what they say on the call.

[Liam @LiamContraire]

@pangpangyanjiu1 @WagieCapital 10% off last year so not super far off but I do think world cup travel helped us out.

[Liam @LiamContraire]

@dandawsonx Look at the interest rate, TW debt is cheap. You're short right ahead of profitability. Main competitor Ionex has quit, Ionex sold 13k vehicles last year & only 118 in June. $GGR sold 4,068 in June putting Q2 sales up 46% YOY. Sticky EaaS rev, E2W standard, and a tech/scale moat.

[Liam @LiamContraire]

@FatRatKiller This was written by AI

[Liam @LiamContraire]

@GrandstandLtd Company is better than ever and trading at 1/4th of its IPO - good time to be a net buyer of $GRSD
(I hope, I said the same thing at $6, $5, $4, and $3 so it's possible I am a bigger schizophrenic than mr. market.)

[Liam @LiamContraire]

@rbmann21 @JacobKeeton20 You guys need to stop gambling and buy some bonds and globally diversified low cost ETF's. If you lose it all multiple time you have a well known and treatable disorder.

[Liam @LiamContraire]

@khoiuna @truth_seeker_vp @HedgeyeDJ $GSL is sitting at 3% and it's on my shortlist to add once I workout the math on the new 15 ships. But its competing with $KSPI $BMBL and $CHTR for new money which are all undervalued while being easier to understand and model FWD FCF.

[Liam @LiamContraire]

@ThierryBorgeat This company might be a great investment for folks in 4 years. They played this IPO perfectly. Made hay while the sun was up with dilution, debt and a key aquisition.

[Liam @LiamContraire]

@pccepar @valuedgaijin SEO doesn't need to recover for $GRSD / $GAMB to not dilute. They have better debt terms than most, ~6.3% currently and they have the cash and revolver credit on hand to pay the 40m earn out early and bank the difference between the 10% prepayment discount and their 6.3% loan.

[Liam @LiamContraire]

@pccepar @valuedgaijin It's 40m. Why would $GRSD settle in shares at this stock price, they paid early in all cash for the first tranch and that was at triple the current market cap. They have 4 quaters of cash flow - I put them at 21m cash and 35m revolver April 1 27 with 55m left in the term loan.

[Liam @LiamContraire]

@kmccrystle I do like the name, don't love the ticker $GRSD, looks like a growl in 480p. Shame Grindr beat you to $GRND.

[Liam @LiamContraire]

@NanoDimensionX Atrocious tenure by David Stehlin at $NNDM, wish him the worst in all his endeavors. AME sold for pennies and they tried to give Infinite Epigenetics a presumably preposterous valuation(provided zero financials just a hunch) all so they could keep board seats/salary.

[Liam @LiamContraire]

@__Nick__Moran__ @APompliano Hey nick, not a shareholder. That sounds really stupid, probably allocate capital responsibly to repurchasing shares below NAV instead of paying $3000/kg to shoot an ASIC into space.

[Liam @LiamContraire]

@DetachedCa @ValueBorderless Game recognize game