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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 3 clicks

From X

@StableBread

Fajasy on X

35% of TOYO Co., Ltd’s $TOYO H1 2026 revenue came from one customer it doesn’t name, and 22% came from companies under its own controlling shareholder. $TOYO manufactures solar cells, the processed silicon wafers that turn sunlight into electricity, and assembles some of them into panels (modules). Its cells use TOPCon (tunnel oxide passivated contact), a common high-efficiency silicon cell design. $TOYO runs three factories: 1) Ethiopia (4 GW of cells): Started production in April 2025, six months after $TOYO announced the plant, added a second 2 GW line in August, and reached its 4 GW nameplate in October 2025. 2) Vietnam (2 GW of cells): Running since H2 2023, but its cells now go to non-U.S. markets like India and Taiwan, since the U.S. Commerce Department set anti-dumping and countervailing duties (taxes on imports sold below cost or subsidized) on Vietnamese cells in April 2025. 3) Texas (2 GW of modules): A leased 567,140-square-foot plant near Houston that started its first 1 GW line in October 2025 and had completed its second by early October 2026. It assembles panels from $TOYO’s Ethiopian cells. VSUN (Vietnam Sunergy JSC) is the Vietnamese panel maker $TOYO was carved out of, and both companies sit under the same majority shareholder, Abalance, a Japanese solar group. VSUN is still $TOYO’s lender, owed $51.4M including interest, and a past wafer supplier through its Chinese subsidiary. $TOYO’s $261.0M of H1 2026 revenue came from four lines: → Third-party cells (56.5%): $147.6M of cells sold to outside module makers. → Related-party sales (22.0%): $57.5M of cells and modules sold to VSUN and its affiliates. → OEM services (14.2%): $37.2M of fees for cells made under one customer’s name, which $TOYO books net, counting only its fee as revenue. → Third-party modules (7.2%): $18.7M of Texas-made panels. Upstream, 70% of the polysilicon (the refined silicon that wafers are cut from) in $TOYO’s Ethiopian cells comes from a U.S. producer and the rest from OCI’s plant in Malaysia, Rhone Resch, $TOYO’s Chief Strategy Officer, said on the Q2 call. Resch also said its 2026 wafers come from non-China production, “including a designated facility in Indonesia.” $TOYO markets its supply chain as “non-FEOC,” free of any foreign entity of concern. U.S. buyers care, since the One Big Beautiful Bill Act (OBBBA) denies the main clean-power tax credit to projects with too much equipment from Prohibited Foreign Entities, a label aimed at Chinese suppliers.
@StableBread

Fajasy on X

A tape library maker fired its CFO on October 9, 2026, without giving a reason, and its stock is now down 41.3% from its October 2 peak. Within two months, it replaced both of its top finance officers. Yet it still expects to meet or exceed its September-quarter guidance. That company is Quantum $QMCO, which makes tape libraries that companies use to archive data for years. $QMCO has fallen to $20.25/share, down 22.4% since my August update, but still more than double the $9.42 investors paid in its June private placement (PIPE). Worth mentioning that the larger hard drive and flash memory stocks have fallen from their 2026 highs as well, through the October 27 close: → SanDisk $SNDK: Down 44.1% to $1,304.84/share. → Seagate $STX: Down 39.0% to $667.85/share. → Western Digital $WDC: Down 49.0% to $380.88/share. So $QMCO fell about as far as the group, but in under four weeks instead of four months, and mostly after the CFO was fired. Besides the firing, three accounting issues hang over $QMCO’s September-quarter 10-Q, due November 9: 1) Material weaknesses: $QMCO’s June-quarter 10-Q still reports material weaknesses (the most serious kind of gap in a company’s financial reporting controls) in revenue recognition, inventory, and income taxes. 2) Restatements: None of the weaknesses has led to a material misstatement, but $QMCO has restated its financial statements before, in May 2024 and again in August 2025. 3) Late filings: Its June-quarter 10-Q was officially filed on August 11, a day after its 40-day deadline, and its FY2026 10-K needed a notice of late filing in June. Still, tape demand is growing, and no $QMCO insider has sold since my August update: → Tape: Secondary storage, which $QMCO’s 10-K describes as “primarily tape storage systems,” doubled from a year earlier to $37.0M in the June quarter, 46% of total revenue, up from 29%. → Industry: The LTO Program, the group of $HPE, $IBM, and $QMCO that sets the LTO tape standard, reported on September 1, 2026 that tape capacity shipped in Q1 2026 rose 57% from Q1 2025. → Supply: By CEO Hugues Meyrath’s account, $IBM’s drive supply, not demand, limits how much $QMCO can sell for now. → Insiders: No $QMCO insider has bought or sold shares in the open market since my August update, including Dialectic, the activist fund managed by director John Fichthorn. $QMCO’s EV is $825.3M, counting its warrants, options, and RSUs. That’s 2.8x TTM revenue, down from 4.9x at the October 2 peak, but still 34.4x the September quarter’s $6M ±$1M of adjusted EBITDA guidance, annualized. So is $QMCO’s drop a pullback worth buying, or a warning about the numbers? That’s what I answer in my new update on $QMCO, including my bear, base, and bull cases.

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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 $129M
Cestrian Capital Research 1 click
PSN · long

Parsons CORP

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

PSN $5.6B
Value Investors Club

The Data Center Bridge

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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…

KNSL $8.3B
Bearstone 8 clicks

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