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Saturday, November 7, 2026

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@StableBread

Fajasy on X

Quantum $QMCO ran to $34.50 on October 2, 2026, and has fallen 41.3% since, to $20.25/share. No $QMCO insider has bought or sold shares in the open market since my August 16 update, including Dialectic, the activist fund managed by director John Fichthorn. Dialectic received 14.1M shares in June when it settled its convertible notes, 35.8% of the 39.4M shares outstanding, which makes it $QMCO’s largest shareholder. Its lockup, which also covered $QMCO’s officers and directors, ended on August 23, 30 days after the PIPE shares were registered for resale. So Dialectic could’ve sold into the run to $34.50, and it hasn’t reported a sale. On October 1, $QMCO granted options to buy shares at $31.885, that day’s close, to three executives: → Hugues Meyrath (CEO): 500,000 options. → James Clancy (COO): 400,000 options plus 150,000 RSUs. → Anthony Craythorne (Chief Revenue Officer): 200,000 options. The options vest monthly over four years and only pay off above $31.885, 57.5% above $20.25. CFO William White, fired eight days later, got no grant. So the largest holder hasn’t sold, and management’s new options only pay off above $31.885. But no insider bought during the drop either.
@convequity

Convequity on X

Buying an inference provider could make a software company's AI growth look much stronger. I partly agree with Sridhar. Ali Ghodsi's strengths extend well beyond technology into marketing, dealmaking and fundraising. I see Databricks as a very aggressive commercial operator, and staying private gives it more flexibility over which financial metrics the public gets to scrutinize. Snowflake ($SNOW) has to defend its growth alongside margins, stock-based compensation and dilution every quarter. Databricks has more room to prioritize the growth number in its public messaging while making trade-offs elsewhere. I'd like to see their full financials side by side. Separate core platform growth from inference resale, identify how much comes from AI-native customers, and quantify any benefit from changes in billing. Then compare gross profit, cash flow and dilution on the same basis. Inference is especially interesting here. A provider can collect a large customer bill while paying much of it to model or compute suppliers. Where accounting rules allow that full bill to be recognized as revenue, the business can add a lot of AI revenue for relatively little gross profit. That could make inference companies attractive acquisition targets for software vendors under pressure to show AI growth. Baseten and Fireworks come to mind, along with RadixArk and Inferact, founded by the creators of SGLang and vLLM respectively. These businesses offer serving technology and customers. An acquisition could also immediately increase the buyer's reported AI revenue, with a much smaller contribution to earnings if the acquired business has thin margins. The revenue boost would be acquired growth, so organic growth needs to remain visible. I wouldn't be surprised to see Snowflake and other publicly traded companies explore this route. If investors reward the added AI revenue more than the underlying gross profit warrants, buyers have an incentive to pay very high prices for these businesses.

Investor Letters

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Entravision Q3 Update

Entravision’s Q3 ad-tech revenue reached $177.2 million, up 133% year over year, while total revenue rose 88% to $226.3 million and diluted…

EVC $832M
The Value Road 4 clicks

Axon 3Q26 Business Update

Axon cut full-year guidance after delayed federal Dedrone contracts slowed 3Q revenue growth to 28%, while software and services grew 43%.

AXON $31B
Speedwell Memos 2 clicks

GREAT DEC-TECTIVE WORK

Diversified Energy reported $255.6 million of “true” nine-month free cash flow, while its $1.8 billion Birch acquisition would shift…

DEC $900M
The Oak Bloke 2 clicks
AAP · long

Advance Auto Parts INC

Advance Auto Parts, AAP, is presented as a long idea following prior write-ups at $48.81 per share in January 2025.

AAP $2.9B
Value Investors Club 1 click

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