Here’s everything you need to know the $AER deal for GECAS sucked bigly in one thread.

1) This is NOT ILFC. When AER bot ILFC in 2013 they went up to 5x levto buy an asset at a lower multiple of book, at much lower absolute valuations on the fleet, w a much better order book...
...they also had an equity currncy trading well above book to pay for it. Basically diametrically opposed to today’s deal (higher book multiple; worse order book; less leverage; own currency trading at a discount)
2) fleet mix: AER took a predominantly narrow body, newer, mostly new tech fleet and diluted it w widebodies, older lanes, and current tech (oh and helis and freighters!) Exactly the things Aengus railed against, for years.
3) scale: I’m not sure I buy any of these scale arguments. Certainly the pandemic showed scale was irrelevant, it’s still fundamentally about picking the right clients. When you’re this big you basically have to serve every client so it’s tantamount to a sector bet now...
4) structure: Aengus took every share he’s bought back since ILFC (and more) and gave it to GE for this deal. They now own 46% and you can bet your life they’ll be smacking the bid every time they can, basically a $6.3bn overhang in the stock....🤮🤮
All in all I can’t see the rationale for this transaction, this price, or this structure. They put Guinness Peat back together and shareholders (of $AER) lost out bigtime. I would vote AGAINST this transaction if I’m still involved (which I doubt) when the vote comes around
Off to drown my sorrows now 😥😥

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More from @puppyeh1

6 Mar
OK normally I would write this up for my subs but since @IBKR won't let me trade Oslo Growth listed stocks, I present Rana Gruber, $RANA.OL, to my Twitter peeps

THREAD
$RANA.OL is a small iron-ore miner in Norway. It just listed a week ago at 49.5 NOK. Price now is 68 NOK. There are 37.4mm shs out = 2.5bn NOK mkt cap, and 190mm NOK bank debt at yr end (which will be near zero imminently).

So all in EV is say 2.7bn today...
Last yr they produced 5.1mt of ore, and generated 681mm of EBITDA at 51% margins. Ie its on ~3.8x EV/EBITDA LTM...but given where the iron ore curve is (or was), its on more like 2.4x EV/EBITDA this year:
Read 18 tweets
5 Mar
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.
Read 8 tweets
3 Mar
@hkuppy and I have been having a spirited disagreement about $ACND and the deal to buy Beacon. Kuppy thinks this is a 'mind-numbingly great' biz. I am FAR more skeptical. You know what that means...it's time for a THREAD

1/
Issue 1) why are the incremental margins so low? Kuppy says this is an asset-lite 'better than SaaS' biz. Here is the rev/EBITDA progression last three years. Tell me when you find the op leverage.

I'll wait.

42% incrementals...true SaaS/platform incrementals are 80%+...
The fact this is happening despite aggressive growth in ARPU is further puzzling (normally ARPU growth is higher margin, all else equal).

Obviously, marketing expense is roofing it...this is basically the opposite of a typical SaaS biz...
Read 13 tweets
23 Dec 19
So Draftkings is coming public via a SPAC - the deal values the combined DK + SBTech (gaming tech software provider) at ~4x FY20E revs...

Couple of interesting takeaways for shareholders...

1/
1) SBTech is being valued at ~4.7x FY20E revs and 4.4x FY21E revs for <30% growth next yr and 7% growth in 21E...with likely aggressive growth assumptions. trades - on my numbers - at 2.6x FY21E EV/revs (w/ no credit for other states beyond NJ, PA)

2/
2) Deck makes it clear economics for software/platform providers at scale are very juicy - they allocate 12% of gross revs for 'platform' costs and 5% for 'revenue share', either or both of these numbers could be considered 's potential take rate for sports betting:

3/ Image
Read 5 tweets
17 Oct 19
GAN PLC (LSE: GAN) is breaking out to new highs daily, and I think the stock has a lot more to go. Here's why...

THREAD 1/

(disclosure: long )
GAN provides enterprise software to land-based casinos to enable online gambling in the US. Online gambling - largely driven by legalization of sports betting - is exploding in the states where it is legal. Check this:

legalsportsreport.com/35725/nj-sport…

2/
GAN is the provider to the two largest players in sports betting in NJ and PA, today (Fanduel, Parx Casino), and thus is a direct beneficiary of the secular growth ongoing.

GAN reported 145% net rev growth in 1H'19 and KPIs have continued to accelerate in 3Q...

3/
Read 9 tweets
23 Sep 19
I am long a little bit of $MDR here (ard $2). Clear risk of quick bagholdership + B/K not withstanding, this seems a massively mispriced option (both stock and the bonds).

THREAD

1/
1) The co definitely seems low on liquidity and is stressed/distressed but B/K does not seem imminent. They have not busted any covenants (nor will next Q unless there is some massive further deterioration) + have $1bn of extant liquidity today

2/
2) The co proactively put out a PR suggesting 'offers' (plural, ie more than one bidder) for their Lummus business 'exceeding $2.5bn'. It is exceedingly rare for a co to go on record re the bid level received, suggesting there is some credibility to the number

3/
Read 10 tweets

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