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Saturday, October 31, 2026

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When the liquidity does not add up

Arbor Realty Trust’s dividend suspension is presented as creating $60 million of liquidity, raising questions about its ability to meet 2027 debt maturities.

ABR $2.2B
John Hempton's Newsletter 4 clicks

From X

@marginofdanger

marginofdanger on X

$APTL is a tiny HIGHLY ILLIQUID OTC nano-cap that consists of two businesses that serve lower Alaska (essentially the tail of Alaska that extends toward lower British Columbia): 1) an electric utility and 2) a regional telco. These businesses generate $25 million of EBITDA and in my view the stock price in the low 80s reflects a discounted valuation on these two very stable assets. However, there is a third asset that could potentially be worth MULTIPLES of the current stock price that investors are essentially getting for free: Sealink Networks, which has the only approved landing zone for subsea cables in the state of Washington in a city called Westport. There are other landing zones in the lower 48, primarily in Oregon and Northern California, which provide connectivity to the Far East. The Westport landing spot will have capacity for six subsea cables. One cable will connect Western Washington to APTL's assets in lower Alaska, and could also serve other telcos in Alaska. The other five cables are currently being marketed to HYPERSCALER CLIENTS (i.e., Amazon, Microsoft, Google, etc.). The terms of these contracts are unknown, but my suspicion is that they will be 20-30 year contracts matching the useful life of the cables. When you have multiple trillion dollar companies competing for a scarce asset, you could easily see them paying literally any amount reasonable for this Far East conduit. I have no idea what APTL will be able to charge for these, but could it be $10 mm per line? $100 mm? APTL's market cap right now is ~$70mm. The company's recent buyback action is VERY TELLING: They just bought back ~250k shares by forcing retirements of retired employees in the pension plan and also have a deferred buyback of ~140k shares from an exiting shareholder (1/3 done, the other 2/3 over the next two years). Between the two transactions, this represents a 30% reduction in the share count! Because the company has a large ESOP ownership, they are required to put out an annual valuation. While I do not know for sure, the company's most recent valuation is ~$90/share and while I'm not sure I do not believe there is any real valuation in that number for the Westport landing spot. In conclusion, I don't know if the stock is worth $90, $190, $290, $390/share, etc. Ultimately it comes down to whether $APTL just happens to be at the perfect place at the perfect time. Do they succeed in convincing someone at Microsoft or Google to pay a nine figure rounding error to APTL? Or does APTL drop the ball and leave a lot of money on the table? It's anyone's guess. This is my favorite idea right now. But be very careful as the float here is small and the stock is very illiquid. I haven't seen anyone write anything on this and I think its just a matter of time before they announce a contract and there is more attention and focus on the name.
@BrokenMoats

Broken Moats on X

Sector action is bizarre today --- travel/discretionary (ex amazon (who posted very lousy prime sales) are surging), housing and adjacent like furniture ($w $wsm), biotech adjacent bid ($rgen, $medp) and waste stocks ($wcn). You want to derrick micron, I get it. And I get gas prices lower, market expects to fade out rate cuts that were priced moving forward as Warsh moves to trim mean/new data versus actually being hawkish, and some impact on a name like $hd off the housing bill. But all of these things are at the margin and known leading up to today --- so why target, kbh (on relatively inline to disappointing numbers yesterday) Expedia today versus yesterday? Market moves in very funny ways recently

Investor Letters

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FTAI 3Q26: Aero margins in focus

FTAI’s Aerospace Products margin rebounded to 31% as CFM56 module output rose, while Power deposits and contracted deliveries fund its 2027…

FTAI $17B
Stock Thoughts 5 clicks
PSN · long

Parsons CORP

Parsons generates roughly half of its $6.4 billion revenue from Federal Solutions, serving defense and intelligence customers.

PSN $5.3B
Value Investors Club

Another Haircut with Avy the Barber

SoFi’s stock case hinges on interest rates, tangible book value and private-credit loan sales after its $1.5 billion equity offering.

SOFI $21B
WHAT ARE WE DOING? “Contrarians At The Gate” 3 clicks

Twilio CEO: ‘Buy the dip!’

Twilio CEO Khozema Shipchandler urged investors to “buy the dip” after earnings sent the software maker’s shares down 17% after hours.

TWLO $33B
The Technology Letter 2 clicks

OSS Q3 FY12/26 Earnings Analysis

One Stop Systems grew Q3 continuing-operations revenue 36% to $12.6 million, raised FY2026 revenue guidance to $45 million, and used $11.8…

OSS $117M
Cestrian Capital Research 1 click

CoStar: 3Q26 Business Recap

CoStar’s 3Q26 revenue growth slowed to 14% as bookings fell to $37 million, while cost cuts lifted EBIT margin to 8.8%.

CSGP $13B
Speedwell Memos 3 clicks

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