r2fire | Stories X Stocks

Deep dives on distressed debt & restructuring | Stories X Stocks on Substack

[r2fire | Stories X Stocks @r2fire1]

$qvcga crashed 38% on Fri, 3/20. What happened?
My take: It wasn't fundamental. It was engineered. And whoever did it just rolled their position forward to October. Read more on Substack. Link in bio.

[r2fire | Stories X Stocks @r2fire1]

@Areskapitalon It really depends on which softwares' moat won't be eroded by Claude and the likes

[r2fire | Stories X Stocks @r2fire1]

A checklist for $QVCGA 10-K catalyst

Here is what I’m going to watch for tonight:

—Is 10-K dropped after mkt close or further delayed to 4/30?

—Where does OIBDA stand: base, bull, bear?

—Restructuring language: RSAs, constructive discussions?

—NCTI/GILTI status

—Where does all this fall into my decision tree scenario?

[r2fire | Stories X Stocks @r2fire1]

$QVCGA 10-K is expected in two days. Curious where it'll land in the scenarios outlined in my 10-K decision tree.

[r2fire | Stories X Stocks @r2fire1]

Yeah, great book. Very informative. Seems he also tried to set the record straight and promote some current public holdings there. His lack of/ limited mention of Maffei concerns me a bit though. Apparently, in his view Maffei is not a strategic value investor or a pathbreaking leader but rather one of the best financial engineering masters. But hey, that's what we need for $QVCGA right now, isn't it?

[r2fire | Stories X Stocks @r2fire1]

$QVCGA TikTok sales ranking drops from No. 3 in February to No. 6 in March, recording a -25% revenue decline from $14.35m to $12.67m. Still better than Jan, but not trending too well.

[r2fire | Stories X Stocks @r2fire1]

That's how you do investment research!

"Analyst #3 decided – against the counsel of an Omani border agent, the implicit counsel of God, and the extremely explicit counsel of two Coast Guard officers holding assault rifles – that he was going to the center of the most consequential waterway on earth, during a live war, in a speedboat with no GPS, captained by a man he met three hours ago at a port inlet by pulling out a wad of cash. For investment research purposes."

[r2fire | Stories X Stocks @r2fire1]

$QVCGA 10K by 4/15 now. Negotiations still on.

[r2fire | Stories X Stocks @r2fire1]

$QVCGA Filed NT. 10-K filing in 15 calendar days. Restructuring negotiations are live and the disclosures depend on their outcome.

[r2fire | Stories X Stocks @r2fire1]

Well, $QVCGA clearly missed the boat on filing a 10-K by the SEC deadline. Nor did it file a NT 10-K to extend for another 15 days. Hope they are still working on it and have something to show us soon.

[r2fire | Stories X Stocks @r2fire1]

Hahaha...good one. Sadly things will all go down from here.

[Special Situations 🌐 Research Newsletter (Jay) @SpecialSitsNews]

BREAKING:

US-Iran 1 month ceasefire terms leaked, peace is near!

US demands: Iran must surrender

Iran demands: US must surrender

[r2fire | Stories X Stocks @r2fire1]

@Areskapitalon What's next then...according to Claude? How the new world order looks like ?

[r2fire | Stories X Stocks @r2fire1]

@Areskapitalon 精辟！

[r2fire | Stories X Stocks @r2fire1]

Way OTM long not real long call IMO. Possibly a pair trade by the same actor to finance his puts.

[r2fire | Stories X Stocks @r2fire1]

$qvcga crashed 38% on Fri, 3/20. What happened?
My take: It wasn't fundamental. It was engineered. And whoever did it just rolled their position forward to October. Read more on Substack. Link in bio.

[r2fire | Stories X Stocks @r2fire1]

@commonsense6174 The difference is more important to separate the two in outcomes. Audacy topco was a guarantor of its sub, which is the primary borrower. Audacy had inadequate cash to serve debt or support ops. Covenant breached. Interest pmts failed. All pre filing capital. None at $QVCGA

[r2fire | Stories X Stocks @r2fire1]

This is eye opening. FT used the 10K numbers filed by Apollo and KKR. Here is what it found:

If KKR’s first $31 million fund from 1976 had compounded at 26% a year it would be worth $2.6 trillion today. Add in its second $350 million fund and you get $13 trillion—more than the global PE market.

Apollo’s first funds would now be worth $74 trillion, just shy of global GDP.

[Trevor Noren @trevornoren]

Apollo's John Zito on private equity: "I literally think all the marks are wrong...This next cycle is going to be a big moment in time for the private markets because people are way smarter than I think private-market participants, particularly people in the wealth channel. Like, I kind of sense an arrogance of the people who grew up in the private-markets business . . . If you don’t mark your book, I think you actually lose trust with the clients."

As I dissected in my report on the "Retailization of Private Markets" (https://t.co/kEx5Z4BJH7), it's dumbfounding how much enthusiasm for PE over the past decade+ was predicated on nakedly absurd performance assumptions. In an article in May, the FT dissected IRR claims made by both KKR and Apollo in 10-K filings. First, they quoted KKR: “From our inception in 1976 through December 31, 2024, our Private Equity and Real Assets investment funds with at least 24 months of investment activity generated a cumulative gross IRR of 25.5%, compared to the 12.2% and 9.5% gross IRR achieved by the S&P 500 Index and MSCI World Index, respectively, over the same period.” As for Apollo, it claims a 39% gross IRR generated by its private equity funds from inception through year-end 2024. The FT contextualized these numbers:

"Across almost all regulatory and marketing material filed by private equity, awe-inspiring IRRs are common. Apparently, these private equity firms have managed to defy the laws of mathematics, economics—and reality. Since most people typically don’t have a good grasp of compounding, it might be helpful to express these numbers in dollars to show how fantastical they really are. If KKR’s first $31 million fund from 1976 had compounded at 26% a year it would be worth $2.6 trillion today. Add in its second $350 million fund and you get $13 trillion—more than the global PE market. Apollo’s first funds would now be worth $74 trillion, just shy of global GDP."

Private credit problems could easily spill over into PE and finally force a reckoning with the "laws of mathematics, economics—and reality." To again quote Zito: “There’s . . . unlimited demand for secondary private equity but they are worried about private credit which finances 80% of those portfolios . . . I can’t compute, but I’m the dumb guy. I don’t understand. I start saying this and I get these blank stares back at me like OK, I don’t know.” This is a particularly acute concern for the broader US economy given the PE creep into small businesses over the past decade (chart below).

Learn more about Sage Road Research: https://t.co/Wgwz2xnvR6. Interested in subscribing? Message me.

WSJ interview with Zito: https://t.co/IafAbcOKea

Chart source: https://t.co/bsM6hOqT03

[r2fire | Stories X Stocks @r2fire1]

New piece dropped on what's next for $QVCGA. Current powder keg setup only needs a little spark from 10K to explode. Plus decision tree for six scenarios. Full deep dive in Substack. Link in bio.

Let me know what you think.

[r2fire | Stories X Stocks @r2fire1]

The upside is retail investors can now level up with institutional investors, knowledge wise. A huge step up IMO.

[Boring_Business @BoringBiz_]

XAI is reportedly hiring credit investors and bankers to help teach finance to Grok

All of the big LLM companies are now doing this to advance their model when it comes to financial analysis

Absolutely no way we don’t see an impact on finance headcount in the next few years

[r2fire | Stories X Stocks @r2fire1]

Where the base-rate argument does land: negotiations fail for mundane reasons even when cooperation is rational. That’s Kill Scenario #2 at 15–25%. But JPMorgan’s syndicate holds 57% of OpCo claims and loses $600M–$1.3B in Path C. This isn’t “everyone is better off cooperating” in the abstract — it’s one party with majority economic mass and a nine-figure incentive to drive the outcome. What specific mechanism fractures that coalition before October 2026?​​​​​​​​​​​​​​​​ $QVCGA

[r2fire | Stories X Stocks @r2fire1]

The bear case against $QVCGA that almost got me: "Even if Path B succeeds, equity gets wiped in the exchange — just like Charter." Except: at Charter, equity sat at the filing entity. At QVC, equity sits at TopCo — which never files. That structural difference is the entire thesis. One sentence in a 10-K footnote.

[r2fire | Stories X Stocks @r2fire1]

Frontier, WeWork, Revlon, Cano Health — equity got wiped because equity sat in the filing entity. $QVCGA sits in TopCo, which has zero external debt, $370–425M in unreachable assets, and no creditor who can force involuntary petition. None of those comps have that structure. The base rate for “equity in the filing entity gets wiped” is high. The base rate for “equity in a non-filing parent with no debt gets wiped” is a very different dataset.