Share this page!

Enter URL or ID to Unroll

You can paste full URL like: https://x.com/threadreaderapp/status/1644127596119195649
or just the ID like: 1644127596119195649

How to get URL link on X (Twitter) App

  1. On the Twitter thread, click on or icon on the bottom
  2. Click again on or Share Via icon
  3. Click on Copy Link to Tweet
  4. Paste it above and click "Unroll Thread"!
  5. More info at Twitter Help
Jeremy Raper Profile picture
@puppyeh1
Mar 5, 2021 • 8 tweets • 2 min read • Read on X
Scrolly
Here's a trade I 💕 in this SPAC pullback, and added to today: selling $PSTH Jun $20 puts. They closed at 80c...

I'm hardly the axe on this name (looking at you @AndrewRangeley ) but in terms of risk/reward this is about as juicy as it gets...40% RoI in a few mms

(mini) THREAD
$PSTH is the Ackman SPAC. It has a bunch of cash in trust ($20 a share) and no announced deal.

SPAC deals take a while to close. PWC says '3-4 mms': pwc.com/us/en/services…

3mos is basically about as fast as you can ram one through...
...but the Ack SPAC is whale hunting and whatever they hope to buy would be a massive transaction ($4bn in trust, plus a big committed PIPE).

Complexity + size = increased time to close.
Today is Mar 5. These options expire in mid-June.

unless Ackman announces a deal in the next 3 weeks, I think it's basically impossible for him to close this transaction before these options expire...
....meaning you get paid 80c (against whatever you have to put up to sell the put, at my broker, ~$2/share), to commit to get long $20 worth of cash at $20.

This is a 40% RoIC for 3.5mos work. With very little risk (beyond mark to market on the puts).
Keep in mind also that as the market goes lower/gets wobbly the odds of doing a deal GO DOWN, not up. So the value of this put should be going down...

The put leg here is MASSIVELY misunderstood and misplaced. Below $20/share in the next few months you're shorting a cash box...
...who wouldn't mind getting long a bunch of cash and then just redeem?

You get paid 40% ROIC to do this. Yes its not scalable. Yes you need to wear mark-to-market. Yes this is options to if you didn't understand even a word of this thread, its NOT FOR YOU.

DYODD always...
...but if none of that applies, this seems highly compelling and (to me) the best risk-adjusted way to play the current SPAC meltdown.

Let Ack's cash box pay you 40% ROICs in a few months. Then go on summer vacay w the proceeds before he even announces a deal 😎😎

GLTA 🙏

• • •

Missing some Tweet in this thread? You can try to force a refresh
　

Keep Current with Jeremy Raper

Jeremy Raper Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @puppyeh1

Jeremy Raper Profile picture
Mar 16
I havent done a deep dive thread in a while, let alone a credit/distressed pitch, so let's give it a go. Alliance Aviation $AQZ.AX

High level: this is an 'existential bet' type trade. You are simply betting it doesn't get restructured at these kinds of prices. Ie going from simply 'imminent B/K' to 'very bad' and the stock doubles.

Obviously - this is a higher-risk security. There is risk in getting zeroed. This is a small-cap stock. This is a >2% position of my NAV. DYODD.

All that said, dive in... 👇👇
$AQZ.AX is a hybrid combo of a FIFO airline (theoretically good biz) and regional aircraft wet lessor (pretty bad, at least in this case, biz). Right now tangible book value is $2.22 (Dec25) vs a stock at 59c - yes, it trades at 0.26x P/B.

Obviously that is a yuuuge discount to tangible assets...how big?
Thesis 1) The current price implies imminent equity wipe-out. I think that is wayyy too bearish.

Consider charts of other aircraft lessors etc during COVID. In Mar/Apr 2020, things like $AL $AER $AVAP.LN etc bottomed out around 0.2x P/B. Maybe a touch lower but you get the point.
Read 24 tweets
Jeremy Raper Profile picture
Mar 9
Markets blowing up. As usual lots of interesting stuff. Will just drop a cpl notes. I expect a few more days of pain before TACO big time, this isn’t a firmly held view but it’s unlikely Trump can just sit and endure $110 oil for more than a week.

In any case I think these prob work regardless…
$BSL.AX at $25 and change. How long before the mkt forces re-engagement w $SGH.AX at $32.35? Pretty decent spread now. I reckon you see low $24s then some kind of change in mgmt posture. stokes is a long term strategic buyer and won’t care about near-term oil px vol. dipping back in small.
$PPM.AX NBIO at $2.6 less div is about $2.52. Stock $2.16 so about 15% cheap on a deal that I think closes in <5mos. You prob could get it $2.1 or cheaper in coming days but pretty juicy here.

Key view is KKR is rolling their 60%, ie they’re already pregnant. Yes, some chance $CGF.AX tries to recut etc but I’ll live with that risk given both extant businesses (bidder and seller) no direct oil px impact
Read 4 tweets
Jeremy Raper Profile picture
Jan 19
Deep dive $HUM.AX Humm Group Limited 🧵number 3: what are we playing for + event trade setup

👇👇

DYODD. Not advice. Recall I own 29mm shares ($21mm AUD) so I have skin in the game.
There are really only two outcomes re $HUM.AX: the Convenors (me+CSAM) win and complete board renewal; or the Convenors lose and Abercrombie remains Chair.

What happens if we win?
The stock is cheap, recall, for two reasons - a big governance discount, and a bloated cash position/underutilized balance sheet.

If we win fixing the governance issue is a fait accompli. Abercrombie will be gone. Compliant directors will be gone. We will add a further 1-2…
Read 16 tweets
Jeremy Raper Profile picture
Jan 11
$HUM.AX deep dive 🧵number 2: What does the current Board offer?

In any EGM/Board renewal situation, it's crucial to understand the diff b/w status quo and the change slate.

In this 🧵I will summarize some of the major probs w/ continuing under the current BoD...
1) Current BoD has been a disaster for shareholders. Abercrombie (Chair) acceded in Aug 2015; since then (before our EGM was called) the stock was -80% in 10.5yrs vs the ASX +50%.

A horrendous record of value destruction and market underperformance. Image
2) Current BoD, esp Chair, has made a litany of mistakes, exhibiting bad judgement over many years.

Eg in 2022, the Chair killed a papered, agreed deal to sell the Consumer unit to Latitude...calling the deal 'horribly undervalued...a garage sale'

afr.com/companies/fina…Image
Read 23 tweets
Jeremy Raper Profile picture
Jan 5
As mentioned now that mkts are open again I will do a no of deep dive 🧵 on Humm Group $HUM.AX.

As you prob know, I own ~29mm shs here (~$20mm AUD); and have (along w/ CSAM) called an EGM to effect Board Renewal, that will be held on Feb 19, 2025. All details here:

hummboardcleanout.com

These threads will be organized as follows:
1) What are we playing for? (valuation, etc - 50+% upside imo if we win)
2) The status quo (incumbent Board) and what it offers
3) What I/new Board offers + event/arbitrage set-up

NB you should only look at this if you intend to vote in the EGM. It is not hard to vote - full instructions will be forthcoming - takes 5min online for most Aussie shareholders. If you hold through IBKR/overseas brokers it is a bit more involved but still, not exactly difficult.

Also - given the high reflexivity of this idea - that is, the more who believe in it and vote, the more likely it is to work - if you agree w/ the thesis/goal, I would appreciate all sharing on this one. 🙏🙏

OK, on to the 🧵, what are we playing for?
$HUM.AX is a non-bank lender (non-bank financial services), w/ two main businesses: Commercial and Consumer. This is a quintessential 'good business, bad Board' set-up. Fundamentally there isn't much wrong w/ the business, I am not trying on some massive operational turnaround, this is all about simple blocking and tackling on capital allocation and proper, fit for purpose governance norms.

Commercial is a jewel, they provide asset-backed financing to SMEs, for things like equipment, vehicles, inventory. Per below, this segment alone is doing $45-46mm NPAT:Image
Commercial has a long track record of structural growth (see below). AUM is growing, avg losses have been stable (and low) at ~1%; and CTI has improved sequentially over last 4yrs (currently <25% ie v competitive for this type of biz).

The opportunity remains large as banks continue to cede share to non-bank lenders (like $HUM.AX) better able to quickly offer and disburse credit to SMEs.Image
Read 18 tweets
Jeremy Raper Profile picture
Dec 1, 2025
$EDU.AX out w/ banger announcement, lifting FY25 guidance substantially - to inline w/ my nos ☺️ - along w/ 13% buyback from Mulpha @ 55c/share.

hotcopper.com.au/threads/ann-fy…

A fair few implications... x.com/puppyeh1/statu…
1) guidance raise. Not hugely surprising to me, but further evidence incremental profits higher again than mgmt was letting on. Despite timing on costs, expect margins to be at a min maintained next yr given this...ie $20mm NPAT next yr is clearly well in play.
2) EPS accretion. They are acquiring 13% of the co at ~5.5x EPS (on FY25 nos, not adjusted for excess cash). Gives you a sense where they think value is.

If my FY26 nos are accurate (ie $20mm NPAT, etc), EPS next yr goes from 13c to 15.7c thru this... Image
Read 7 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us!

Send Email!

:(