With $BTU likely providing upwards of 10% of America’s electricity feedstock in today’s environment, the simplest question is: What’s that worth?
Regarding supply coming onto the market, from an expansion of productive capacity in coal mining, what is the probability of obtaining permits to develop new coal mines in America?

The probability is zero. So, the supply of domestic coal is largely fixed.
As Ivan Glasenberg essentially alludes to, the percentage expansion required for substitutes like wind is NOT REALISTIC! Very few people have woken up when it comes to these numbers. Yet as Glasenberg noted previously: global demand doesn’t go away (hence his own coal bet)…
And following a decade-long assault on coal from regulations, mine shutdowns, heavy debt and bankruptcies, heavily-subsidized alternatives, and depressed #natgas prices, the supply of coal is down by perhaps half or more over a decade…
Thus, we have diminished supply—yet sustained and rising demand—and an inability to expand capacity to bring on more supply…

With higher #natgas prices today, coal is even more competitive. And renewables have proven to be a chimera, over 15 years of extreme subsidies…
Indeed, coal is outright punished, while renewables have a fist on the scale in their favor, and coal is STILL more competitive!
The significant insight is that those fundamentals are the *exact fulcrum* in today’s reflation economy, which won’t go away anytime soon (regardless of whether we see short-term volatility).

At nearly 25% of America’s electricity, #KingCoal is a silent giant.
I will go out in a limb and say that $BTU already should be a $100 stock, TODAY, corresponding to roughly a $10 billion valuation.

To put that figure (and today’s market) into perspective, $SNAP is $100 billion, an asinine toy which loses money and faces extensive competition.
$100 per share for $BTU is modest given the strategic importance of the assets—a critical national security interest, our electricity—and has room for growth from there.

Further, with $500 million to $1.5 billion in EBITDA, possibly by yearend, the valuation is supported.
#CoalTwitter and, a close second, Ivan Glasenberg of $GLEN, are the only people in the world who arrived at these insights. The road to $100 per share in $BTU will be everybody else’s wakeup call…


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8 Jun
I suspect what we’ll see are $BTU met coal assets spun off—and then Elliott will merge them with the BHP portfolio which they are now poised to acquire.
I view Elliott’s strategy as exactly the same as what’s unfolding with $T:
They spin off the growth asset (into $DISCA, which will keep rolling up content portfolios), which is met coal for $BTU.
Read 5 tweets
29 May
An excellent overview of today's coal market (h/t: @ShaiDardashti):
"People need to get over price and become more concerned about availability," said a US-based coal consultant. "This market is so inelastic. The demand for energy in Q3 has spiked and they can't find the coal."
"Coal is telling the market something is wrong," said the US consultant. "The demand for energy is increasing faster than supply. It's starting to smell like 2007."
Read 4 tweets
8 Feb
Three Laws of Distress, picked up from the world's top distressed investors, and operating many such deals myself. And relevant to the times yet again:
(1) Find demand and profit as quickly as possible. Distressed situations typically involve some fundamental change in demand or competitiveness.
Thus, finding new sources of demand and profit are crucial. Distress can feel like a hall of mirrors, and you may not understand what is happening, or why, until well after the fact. But steady operating profit will never lie to you—find it as quickly as possible.
Read 6 tweets
12 Oct 20
At market cap of roughly $160 million and over 800,000 hectares under management, $CRESY is a gem holding in agricultural commodities. Ignoring its extensive other assets, many of which are publicly-quoted, this works out to a mere $200 per hectare...
Cattle land trades for around $3,000 per hectare in Argentina, and crop land can trade for closer to $15,000 per hectare. All of $CRESY — even ignoring extensive other assets — has a price of $200 per hectare...
The top equity positions in commodities — in the world — may well be Cresud $CRESY for agriculture and livestock, and Antero $AR for natural gas and NGLs...
Read 4 tweets

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