(1/x) This is worth a listen. Doug Braunstein and Doug Bergeron of Hudson Executive Capital (HEC) are the activists that have taken over $USAT. TLDR at 39:20 he talks about their investment in $CATM, which we believe is illustrative of the (lack of) downside at $USAT
(2/x) We believe that if $USAT can execute, the stock is worth $30+ in a few years based on FCF, but what we really like is the reflexivity of the investment based on HEC’s involvement. If they CAN’T execute, we believe the $CATM example is illustrative of what would happen next
(3/x) Hudson partnered with Apollo to take CATM private, which led to an overbid from a strategic. If in ~3 years (?) $USAT disappoints, HEC will likely maximize the value of their investment by either trying to take it private which would elicit other bids, or just run a sale
(4/x) Strategics like $GPN (9x EV/Rev) and $LSPD (infinite EV/REV) have been paying high multiples to gobble up software centric niche payments players like $USAT because they can take out basically all of the costs. Heads we win, tales we don’t lose.
We are long $USAT, and suggest you do your own diligence.

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