Digital Bridge is finalizing a huge transformation from a stale legacy real estate biz to the best owner of digital infrastructure assets this side of $BYTE Index.
$DBRG = combo of Private Equity + Directly Held Digital Infra: data centers, fiber, towers, & more.
Led by Marc Ganzi and Ben Jenkins, $DBRG is poised to grow assets for years.
They built DBRG as an independent biz, then merged it into Colony Capital - taking over the combinedco. They sold all of CLNY's legacy real estate, positioning DBRG as THE pureplay dig infra holdco.
2/
At its core, $DBRG is a Private Equity biz, raising large PE funds that target dig infra. Key holdings incl Zayo & Vantage Data Centers. It also uses co-invest funds and bal sheet capital for large takeouts. It is expanding into other alternative investments (eg, credit & HF). 3/
This combination of raising PE-style GP funds ("Investment Management") + Balance Sheet investing ("Operating") differentiates Digital Bridge and gives it the ability to combine two incredible economic models together.
$DBRG is a leader in digital infra investing ( $BYTE 👀). 4/
From a standing start 7 years ago, Marc & Ben built Digital Bridge into a collection of world-class digital infra assets: towers, wifi, fiber, data centers, edge infra & more.
Marc previously built, ran, & sold a leading towerco.
Ben was a Senior Partner at Blackstone ($BX). 5/
Imagine what Digital Bridge might become in the next 10 yrs.
To serve the demand for reliable, fast, ubiquitous internet, huge investments in digital infra are required. $DBRG will play a key role - acquiring and building assets to meet this demand, raising more $$ to do it.
6/
The value creation opp in Digital Infra is breathtaking. It's the 21st Century's Class-A real estate, fueled by growth from high-quality tenants.
As we digitize everything (including the actual world - Zuck?), our need for physical assets to handle that will grow as well.
7/
All cos have plenty of risks, including $DBRG. examples include:
- Is it growing too fast?
- Hungry, aggressive management can cut both ways...
- It wants infra multiples on its Operating assets, but if it has to sell and reinvest, does it deserve them?
8/
Note:
I never intend Tweets as investment advice. This is meant as a basic, high-level overview of what $DBRG does and how one might begin to look at the business.
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Today we learned while the voice of the people may be the voice of the gods, in Delaware there’s only one true god:
And her name is Chancellor Kathaleen McCormick. 1/x 🧵👇
Below is a brief thread breaking down her denial of Elon’s request for $55 billion in $TSLA stock.
2. Her original January 2024 ruling highlighted several flaws in the years old shareholder vote that was meant to award Elon massive stock compensation, if he delivered massive value to $TSLA shareholders.
Her determination wiped out Musk’s entire equity grant, stating Tesla failed to follow required procedures, which invalidated the original vote from years ago to grant the compensation package.
3. Tesla asked her to review her ruling.
Then, this past summer, Tesla held a new shareholder vote to (re)affirm the prior flawed compensation package.
Today’s 103 page decision responded to that request AND was meant to decide how much the plaintiffs’ lawyers should be paid.
Mrs. B founded Nebraska Furniture Mart in 1937 with $500 of savings, selling 90% to Warren Buffett’s $BRK 50 years later for $55 million.
Even at 94-years old, she continued to work 70 hour weeks, pricing rugs and carpets from memory. 🧵👇
“We like managers who are in love with their business…who feel like I do - I want to tap dance when I get to the office,” is how Buffett answered Adam Smith’s question about the Berkshire Hathaway culture. 1/x
Mrs B barely spoke English when she started NFM; she sought a $75 business loan and was denied.
50 years later, what did she think of the doubters?
“I still hate them. Anybody who does you dirty, you should never forgive and forget.” ☠️
- Rose Blumkin at 94 years young
Mrs. B had uncommon sense:
“God blessed me: anything I do, I make money.”
Mrs. B’s daughter on growing up:
“The customer was God - that came first and we came next,” she laughingly shared.
Most people assume it makes its money as a crypto exchange.
True...sort of.
Its rev comes as much from interest income on its cash balances + its share of $USDC's cash ($COIN owns a share of USDC owner, Circle) as from transactions.
Worrisome.
🧵👇
2. Interest Income is Lower Quality
Even as $COIN's core transaction revenue has declined by nearly HALF, its interest income has skyrocketed with rising rates.
In Q2 2022, interest was 5% of revenue; in Q2 2023, it was 35%...
3. Stablecoin Revenue
...in Q3, interest income hit nearly 40% !!! of revenue.
(With $COIN restructuring its deal with Circle, Coinbase's share of $USDC interest income is now categorized as "Stablecoin Revenue.")
I expect $COIN just achieved peak interest income.