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Monday, October 26, 2026

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Merger Monday & Election Implications

EQT’s $50 billion merger with Range Resources and Ovintiv’s $1.26 billion acquisition of Logan Energy reshape North American oil and gas alongside Brazil and British Columbia election…

EQT $34BRRC $13B
Bison Insights 7 clicks

From X

@convequity

Convequity on X

Why we exited $CRSP and kept $TEM AlphaFold solved the backend of the problem — predicting a protein’s 3D structure from its sequence. The harder frontend problem remains: knowing which protein or pathway is actually worth targeting. Most complex diseases are still poorly understood at the causal level. That distinction matters. The next real breakthroughs look more likely to come from AI-native groups that treat large-scale compute as the primary engine, in the same way OpenAI and Anthropic approached language before the ChatGPT moment. Public investors may only get clean access later via secondaries or IPOs. CRISPR sits on the earlier-generation side of that divide. Tempus is closer to the compute-and-data native side — building models while assembling a genuine clinical data moat. That is why one was exited and the other retained.
@evantindell

Evan Tindell on X

Finally got a chance to go through the $UMG earnings... Obviously, a disappointment on revenue growth and margins, which saw the stock drop like 20%. Subscription revenue was 6.7% organically, and the street was looking for >9%. So, a big miss. Still, I think things should improve. Apple, Spotify, Amazon, and YouTube music have all raised prices this year, and a portion of that will go to UMG. CFO Matt Ellis said on the call that these prices and "better market share to start the third quarter" make them "cautiously optimistic" (really sticking his neck out there!!) that growth will improve in H2 of 2026. Interestingly, Warner Music $WMG managed to grow revenue 12% in CC and adjusted OIBDA by 24%, so clearly this is a UMG-only problem, at least for this quarter. $UMG trades at 14x earnings on a NTM basis now... this seems pretty reasonable if not downright cheap for a company that has grown EBIT from EUR 1b in 2019 to around 2b today (11% organic EBITDA CAGR). We own this through Bollore, which currently has an NAV of just above 11 EUR by my calculation vs a last price of under 4 EUR. Notably, JPM thinks new AI tiers in Spotify and Apple Music will drive ARPU growth of 300 bps per year. Their price target was 48 EUR prior to the recent earnings release...
@convequity

Convequity on X

Himax and the parallel optical bet $HIMX sits in two places in the optical stack: micro-lens arrays that route light into fiber, and a more speculative but potentially transformative position in microLED-based CPO. The microLED idea inverts the industry’s core assumption. Instead of fewer, ever-faster InP laser channels, it uses hundreds or thousands of simple low-speed lanes (4–10G each). High-speed SerDes and DSP largely disappear, energy drops below 1 pJ/bit, and the continuous-wave InP laser is eliminated entirely — replaced by GaN microLEDs from the display supply chain. Reliability improves and failures become graceful rather than catastrophic. Reach is limited to a few meters and the fiber-bundle ecosystem is still immature, so the technology is confined to short-reach scale-up. It remains pre-revenue and more debated than it was a few months ago. Yet the process know-how from Himax’s high-density display drivers maps unusually well onto this architecture. The stock is up ~55% YTD but down ~18% QTD, and currently trades around 31x EV/FCF and 10x EV/GP. For anyone who still sees a meaningful path for CPO — and views the microLED route as high-upside optionality rather than pure speculation — the current levels look like a reasonable place to build or add. We go deeper on the microLED architecture and its place in the broader optical stack in Part 4 of our Photonics series at Convequity.

Investor Letters

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Molina & Kinsale

Molina Healthcare and Kinsale Capital’s earnings are reassessed through a long-term lens, emphasizing conviction and detachment during…

MOH $11BKNSL $8.3B
Bearstone 8 clicks

Tower Semiconductor Deep Dive

Tower Semiconductor’s low-loss photonics chips halve lasers in 1.6T optical modules, supporting a $680 million annualized photonics run…

TSEM $18B
CV's Substack 10 clicks
WRBY · long

Warby Parker

Warby Parker's $25 valuation does not capture potential upside from smartglasses alongside its core omnichannel eyewear business.

WRBY $3.1B
Value Investors Club 3 clicks

Margin Call

Petrobras’s Morpho-1 well revived hopes that Brazil’s Equatorial Margin can become a major new oil frontier after hydrocarbons were…

PBR $81B
Doomberg 13 clicks

Our Views on CoreWeave

CoreWeave's financial statements point to a business model familiar to the authors after a closer review of the AI infrastructure company.

CRWV $34B
WHAT ARE WE DOING? “Contrarians At The Gate” 13 clicks

Capital Wars

CoreWeave’s $35 billion to $39 billion 2026 spending plan relies on debt as unsecured yields reach 15%, making its GPU cloud expansion a…

CRWV $34B
Net Interest 12 clicks

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