Penetrable Moats

L/S investor

[Penetrable Moats @PenetrableMoats]

You can easily underwrite a 15% IRR on $SPGI, $TDG, and $MA at these levels. A gift from Mr. Market.

[Penetrable Moats @PenetrableMoats]

@evrgn11112231 I can see the ROIC theyre generating from this capex but how do you know how much js maintenance vs growth capex? What’s terminal ebit margins here in your now? Used to be a 60-70% terminal mgn biz…what’s it now?

[Penetrable Moats @PenetrableMoats]

@RadishHarmers Because illegal immigrants commit crimes at significantly higher rates, materially lowering the well being of the host country, including those of legal immigrants. This is proven by the released Danish data

[Penetrable Moats @PenetrableMoats]

Imagine writing this confidently but having zero understanding of beginner tier M&A knowledge. Netflix IS paying the fell EV, retard. This is true for every M&A txn ever.

[Mr. Possible @Mrpossidez]

I’ll share four points about the Netflix deal just for educational purposes.

First, Netflix is not paying Warner $87b. The number you usually see in the headlines is the “enterprise value” of the business which is a combination of equity and debt. Most deals are negotiated on a cash-free, debt-free basis, which means Warner pays off its own debt at closing. Netflix pays only for the equity. That’s valued at $72B. Still huge, but really important to know the difference because sometimes the equity value is way lesser than the enterprise value depending on how the business is financed.

Second, the largest M&A deals on Wall Street are HARDLY ever financed in pure cash (and when that happens, it’s usually by a PE firm and they raise cash from banks). Netflix is not a PE firm. It would hurt their books to pull out $72b for a large media acquisition.

What they do is combine cash and stock.
Warner shareholders get $23.25 in cash and approx $4.50 in Netflix stock per share. So there’s a payout and an exchange. The stock portion is subject to a collar, meaning the final number of shares adjusts depending on Netflix’s 15-day value weighted average price right before the deal closes (roughly between $77 and $119). That’s normal for deals where the buyer wants to preserve liquidity.

Third, Netflix has not “bought” Warner yet. They just signed a deal agreeing on the pricing and other conditions that need to be satisfied to get this deal done. The real battle is going to be antitrust/competition. It’s a large deal which means it needs to be approved by several regulators. Netflix absorbing Warner puts a huge amount of premium IP under one roof. Streaming was already consolidating, but this pushes the industry toward a few mega-libraries controlling most of the content pipeline. Regulators in both the U.S. and EU are likely to take a hard look not just at subscription pricing, but also at licensing, exclusivity and vertical integration.

Fourth, on subscription prices, yes, consolidation can create upward pricing pressure because a platform with more premium IP has more leverage. But the economics cut both ways. Warner is selling for a reason. Cos running a studio is expensive, and HBO-level content only makes sense at global distribution scale. By moving that library under Netflix, the business may actually shed some of the inefficiencies that were pushing costs up in the first place, reducing Warner’s need to nickel-and-dime consumers through complicated tiers, aggressive licensing and short-window exclusivity battles. So while Netflix may still raise prices, this deal could also streamline the economics behind the content.

[Penetrable Moats @PenetrableMoats]

@partners_road You are genuinely the biggest grifter ive seen on fintwit and that’s saying something

[Penetrable Moats @PenetrableMoats]

Doing some real work on $AMZN. Come at me with your takes / challenges

[Penetrable Moats @PenetrableMoats]

AMZN is trading at pretty much the lowest multiple it ever has.

Plus, why look at this on an FCF basis? If you think mature / terminal FCF generation will be good enough, makes sense to look at EBITDA for a "clean" valuation. Capex is temporarily elevated - if AI doens't pan out, they can and will cut it, and absorb overbuilt capacity quickly

[Penetrable Moats @PenetrableMoats]

@RadnorCapital I ran these regressions on a bunch of metrics. NTM revenue growth and EBITDA are *by far* the most predictive (R-Sq 0.6). 13x EBITDA for a biz like this with so many NT tailwinds is ridiculous imo, unless you think there is a fundamental reason why FCF will never materialize

[Penetrable Moats @PenetrableMoats]

AMZN is trading at pretty much the lowest multiple it ever has.

Plus, why look at this on an FCF basis? If you think mature / terminal FCF generation will be good enough, makes sense to look at EBITDA for a "clean" valuation. Capex is temporarily elevated - if AI doens't pan out, they can and will cut it, and absorb overbuilt capacity quickly

[Penetrable Moats @PenetrableMoats]

@PreppingRemarks Which one do you like the most then?

META: +ve tailwinds but terminal value narrative can return at any point, trading at peak mult
GOOG: I own this one but Search risk overhang over N3Y
MSFT idk and AAPL too expensive
I like AMZN the most - no real LT bear case, + AI tailwinds

[Penetrable Moats @PenetrableMoats]

@bucketshopcap Can you explain what you mean? $META was at sub-10x EV/EBITDA 12mo ago, and <13x NTM until Q4 earnings. $GOOGL still <13x NTM EBITDA for what is an incredible business.

Sure there are pockets of excess ($TSLA) but idt the market is anywhere as crazy as ‘21?

[Penetrable Moats @PenetrableMoats]

@di_shawarma I dont even want to start on how wretchedly stupid this virtue-signalling , communist propaganda regurgitating thinking is

[Penetrable Moats @PenetrableMoats]

@d_rose92 Say more?

[Penetrable Moats @PenetrableMoats]

@wolfejosh BxG3!

[Penetrable Moats @PenetrableMoats]

@londoncap100 count me in

[Penetrable Moats @PenetrableMoats]

@pandawwwg Whats ur @

[Penetrable Moats @PenetrableMoats]

Title: IT Procurement Manager

Base: $70k
Bonus: $15k
GLG expert calls: $500k

[Penetrable Moats @PenetrableMoats]

It's called a trustless system because you can't trust anything

[foobar/ @0xfoobar]

$34 million, or 11,539 eth, is permanently locked into the AkuDreams contract forever. It cannot be retrieved by individual users or by the dev team.

The refund processing, which is complete, sets each bid status to 1.

[Penetrable Moats @PenetrableMoats]

@tolstoybb high quality DD

[Penetrable Moats @PenetrableMoats]

@ExcelHumor sickos

[Penetrable Moats @PenetrableMoats]

One man's smart money is another man's forced liquidation

[TT3 @TradingThomas3]

Smart money dumping hard, dumb money buying every dip 😅 $SPY $SPX