PCCEpar Z

[Andrew Coye @andrewcoye]

That's good, but the $SIRI -us answer is higher...
The longer its in 30s and the begin to buyback stock in size for a year or two before the $GOOG YouTube audio partnership really kicks in will pay-off a lot more than if it runs up to a 15x P/E in the short run and buybacks become far less impactful...
Of course, everyone has their own time horizon. This one has a long-run ahead and is just building momentum...

[PCCEpar Z @pccepar]

@LiamContraire @valuedgaijin If SEO recovers, all will be ok. If not, Huge dilution is Inevitable.

[PCCEpar Z @pccepar]

@LiamContraire @valuedgaijin The Wells Fargo Amended and Restated Credit Agreement requires the borrowers to comply with a maximum leverage ratio not greater than
3.00 to 1.00, a minimum consolidated fixed charges ratio requirement of 1.25 to 1.00 and a minimum liquidity requirement of $15,000.

[PCCEpar Z @pccepar]

@valuedgaijin exercise the option to settle 70% of the payment in shares. If 70% of the remaining $28.9 million due in April 2027 (i.e., $20.2 million) is settled in shares:
Based on a price of $1.80, this amounts to approximately 11.23 million shares.
Dilution of ~24.2%.

[David Kass @DrDavidKass]

(3) Warren Buffett on CNBC: Banks earn 13-14% on capital, but American Express (Berkshire's second largest equity investment) earns 30% on capital without additional risk. Not buying shares of Alphabet (Google) sooner was a mistake. He speaks with Greg Abel every day. Greg would not do anything that Warren disapproves, and Warren would not do anything that Greg disapproves.

[Rose Celine Investments 🌹 @realroseceline]

Show me the cash!

One of the biggest investing lessons I’ve learned is that EBITDA is often far less important than investors think.

Don’t get me wrong, EBITDA is useful. It tells you something about the economics of a business. But at the end of the day, nobody gets rich from EBITDA, you get rich from cash.

A metric I pay a lot of attention to is “Free Cash Flow conversion”, which is simply Free Cash Flow divided by Adjusted EBITDA. If a company generates $100m of EBITDA and $80m of Free Cash Flow, its conversion rate is 80%. In other words, for every dollar of EBITDA, eighty cents actually became cash.

The reason I find this so useful is because EBITDA is like a “promise” while Free Cash Flow is “proof”. EBITDA is management telling you how much money they think they’re making. Free Cash Flow is the bank account telling you how much money actually arrived.

Think about two businesses. Both report $100m of EBITDA. One generates $70m of Free Cash Flow while the other generates only $20m. Most investors see two businesses with similar profitability. I see one money printer and one money consumer.

The funny thing is that if you owned 100% of a private business, you would never ask how much EBITDA you could take home this year. You would ask how much cash you could take home. Nobody retires on adjusted EBITDA. Nobody buys a house with adjusted EBITDA or funds a buyback with adjusted EBITDA.

This is one of the reasons I tend to gravitate toward asset light businesses. Companies like $WING, $DLO, $MSCI, etc don’t need massive amounts of capital just to keep the lights on. A large percentage of what they earn eventually turns into cash that can be reinvested, distributed to shareholders, or used for acquisitions.

Compare that to a business like $AMZN. It can have periods where Free Cash Flow conversion looks much weaker, because it’s constantly pouring billions into warehouses, data centers, logistics and AI. The context matters, which is why looking at a single metric without understanding the business can be dangerous.

One thing I’ve learned over the years is that cash eventually tells the truth. A company can adjust earnings or EBITDA and it can explain away weak results. But if a business reports $500m of Adjusted EBITDA and only produces $50m of Free Cash Flow, something is wrong.

I also think investors underestimate how much Free Cash Flow conversion can tell you about the quality of a business. Most people think moats are brands, patents or network effects. Those things matter, but consistently high cash conversion is often evidence of a moat too because it usually means the business doesn’t need to constantly spend money.

The most valuable businesses I’ve studied are often the ones that can grow while generating cash rather than consuming it. Many companies grow by spending money. Great companies grow while producing money. That difference may not seem important at first, but over ten years it creates an enormous difference in shareholder returns.

One simple thought experiment I like is this, if EBITDA disappeared tomorrow, the business would still exist. If Free Cash Flow disappeared tomorrow, everyone would notice immediately.

🌹

[Andrew Coye @andrewcoye]

@SouthernValue95 You want a real explanation?

The antitrust trial remedies were not decided until Sep 2025.
$BRK.B not going to buy into $GOOG with a IBM/MSFT break-up risk overhang.

[Michael McNair @michaeljmcnair]

https://t.co/Ba9M6Pt21b

[Rose Celine Investments 🌹 @realroseceline]

$DPZ

Someone asked me an interesting question recently. What could $DPZ realistically look like and be worth 20 years from now? It sat in the back of my mind, so I decided to really think through the long term economics, the franchise model, the moat, and what this business could potentially become over the next couple decades.

Before even getting into the future, I think it is important to understand the quality of the business itself. $DPZ is very quietly one of the greatest performing public companies of the modern era and in fact has actually outperformed $GOOG over roughly the last 20 years. That sounds almost ridiculous at first because one company sells pizza while the other built the modern internet, but that is exactly why I find it so fascinating.

I think investors often underestimate simple outstanding operational systems that compound for decades. The market gets excited about futuristic narratives because they feel intellectually stimulating, while some of the greatest compounders in history were actually very simple businesses that became more efficient every year. Businesses like $COST, $FAST, $AZO, $SHW, $MCD, and now arguably $DPZ all looked “boring” to many investors at various points while creating enormous shareholder value.

Most people look at $DPZ and see a pizza company. I increasingly think that is the wrong way to analyze the business entirely. Over time, $DPZ is more like a global logistics, software, and franchise infrastructure platform than a traditional restaurant chain.

The pizza almost becomes secondary at a certain point. What really matters is the system underneath it. Millions of loyal app users, massive advertising scale, franchise relationships, and a business model where franchisees fund the expansion while $DPZ collects high margin royalties. Quite similar to $WING.

What makes $DPZ and by extension $WING so powerful is that the economics actually improve as the network gets larger. More stores improve efficiency, more customer data, stronger advertising efficiency, and better purchasing power. Scale itself becomes the moat because every additional order makes the overall system slightly smarter and more efficient.

I also think people underestimate how much runway still exists internationally. $DPZ already has more than 21k stores globally and continues opening hundreds every year, yet many countries are still dramatically underpenetrated relative to the US. Stretch this out over 20 years and I would not be surprised if the company eventually reaches 50k+ stores globally albeit obviously with a much larger international mix.

The really important part though is the franchise model itself. If the franchise system remains intact, the long term economics could become extraordinary because $DPZ requires very little capital to grow. Franchisees fund most of the restaurant expansion while $DPZ collects recurring royalty streams that become larger every single year as sales compound globally.

That is why the free cash flow of the business has historically been so strong. Even during weak consumer periods $DPZ still generates significant cash, continues buying back shares, pays dividends, and expands internationally. Most restaurant businesses simply cannot do that consistently through multiple economic cycles.

The buyback is also very important. Over very long periods, a business that steadily compounds earnings while aggressively shrinking the share count can create enormous per share value even if growth eventually slows. The combination of global unit growth, pricing power, franchise economics, and buybacks becomes extremely powerful mathematically over decades.

1/👇

[Nathan S @UltimateTrad8r]

Im actually very glad you asked tomorrow ill write about it as well on $rddt at #UltimateTraders

But the story changed on $gamb

You will notice the valuation was on the floor but it was growing

Now there is a decline in sales and earnings

They borrowed money for an acquisition, without looking at the report im going to say the purchase quarters ago was not accreative to the company as they hoped

[PCCEpar Z @pccepar]

@SS0006080831473 @gambling_group I am surprised that it will be an option. And he didn't deny it. Take $GAMB private when its price is extremely low. Then IPO again when the market is favorable. Loop forever. That’s the implication.

[PCCEpar Z @pccepar]

@nate_yellin @perplexity_ai @PPLXfinance @AskPerplexity If you think you are right, short $SIRI,then you will be very rich.

[PCCEpar Z @pccepar]

@SS0006080831473 @oliverloveosva It gives me a new perspective.👍

[PCCEpar Z @pccepar]

@SS0006080831473 @Codebeer7777 @oliverloveosva Make sense.👍

[PCCEpar Z @pccepar]

@Codebeer7777 @oliverloveosva Gillespie must think it is not a big problem, since he has already confirmed the earnout and paid the money by the end of 2025. But if he were wrong, $GAMB would be in serious trouble, and OpticOdds’ business model might not be legal.

[PCCEpar Z @pccepar]

@Raul_DSF @RenaSherbill Do you think Swish Analytics sue OddsJam and OpticOdds lawsuit is a big problem for $GAMB ?

[PCCEpar Z @pccepar]

@readdisclosures what about https://t.co/uOLD4oZQxB and https://t.co/ATiCChKfdA