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Tuesday, November 10, 2026

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The AutoNation Story

AutoNation shed rentals and megastores, focused on dealerships, and retired 91.1% of its shares through buybacks after its 1990s roll-up collapse.

AN $6.1B
Cannibal Stocks

From X

@StableBread

Fajasy on X

The Tokyo Stock Exchange (TSE) delisted TOYO Co., Ltd’s $TOYO parent on September 26, partly over “deference” to the former chairman who still controls 59.8% of $TOYO. $TOYO’s governance traces back to Junsei Ryu, its Chairman and CEO until March 2026, who controlled 66.9% of $TOYO’s vote before the June offering, or 59.8% of today’s 42.7M shares by my count. He was also Representative Director, Chairman and CEO of Abalance until he gave up his representative role in March 2026. $TOYO’s 20-F calls Abalance its controlling shareholder and says Abalance’s board or president must approve $TOYO’s significant transactions, including investments above 5% of $TOYO’s total assets. As of June 30, that bar was $26.9M, which the $357M HJT cell plant $TOYO plans in Texas clears more than 13 times over. Abalance’s problems came to a head in 2026: → January 2026: The TSE fined Abalance ¥43.2M and, on January 31, designated its shares a “Security on Special Alert” over group governance and related-party controls. → July 31, 2026: The TSE moved Abalance to “Security Under Supervision.” → August 19, 2026: Abalance’s FY3/2026 results carried a going-concern warning, and its auditor disclaimed an opinion on its annual report. → September 26, 2026: The TSE delisted Abalance. The TSE’s stated reasons for the delisting say Abalance’s improvement plan didn’t address why its officers and employees stopped exercising independent judgment, which the exchange traced to “deference to the former Representative Director, Chairman and CEO and reluctance to challenge him.” That executive is Ryu, who held the title until March. The exchange also cited missing group-wide controls over deals where Abalance companies sold materials to outside processors and then bought the processed goods back. Put simply, some of Abalance’s overseas subsidiaries sold polysilicon to wafer makers and bought it back as wafers, and Abalance had to correct how it accounted for those deals in its FY3/2026 results. Abalance didn’t name those subsidiaries. $TOYO, for its part, buys polysilicon and gets its wafers from a “designated facility in Indonesia,” and neither company has said whether any of $TOYO’s transactions were among those corrected. So buying $TOYO means trusting Ryu, whose 59.8% stake outvotes all other holders combined, and a delisted parent with a going-concern warning to treat outside holders fairly.
@aleabitoreddit

Serenity on X

Following the Lumentum / Marvell deal: My opinion is that independent Western laser players, like $AAOI, $COHR, and $SIVE became a lot more strategically valuable. $MTSI and $SMTC should get some attention too as emerging laser players in 2027. If I had to guess: 1. Companies competing against Marvell, or not in the $NVDA ecosystem bandwagon, such as $AMD, are likely going to rethink their relationship with $LITE. If getting bottlenecked by Nvidia capacity agreements wasn't enough... Incentives around qualifying + bringing up other laser players, seems very necessary now. Since you generally don't want competitors like Marvell to have influence or visibility over your roadmaps, IP, capacity, pricing, etc. even if there is a "firewall". 2. $MRVL acquiring Lumentum opened pandoras box in a way of acquiring a critical chokepoint all your competitors + buyers use. $LITE was used by your major hyperscalers and across AI supply chains. Now, your leaders might wonder if weaponizing capacity agreements might not be as effective.... If someone else can just buy the entire company. There's only a few major public merchant Western players out there, and I'm also sure many others will want to follow the Marvell / Broadcom route via vertical integration, given I think $MRVL saves around $1B+ in costs/year. So M&A premiums likely went up. $SMTC was actively looking to buy laser capacity via M&A so I'm sure they're looking at $SIVE given their 100M CW DFB laser expansion + tiny MC. $JBL also probably wants to vertically integrate down the road too so $SIVE is also an acquisition target for their 1.6T program. $AMD was looking for ELSFP + CW capacity given Nvidia bottlenecks, so I'm sure they've looked at $AAOI. can go on and on about other ASIC players (like in Taiwan) that likely are looking at vertical integration too. Since multiple players use a small subset of laser suppliers, if competitors just go ahead and buys them... There's a lot pressure to M&A for their own supply chain defensibility. TLDR: Independent laser suppliers should capture a material strategic revaluation since $MRVL + $LITE, sets a new precedent + implications. We'll see what happens.
@aleabitoreddit

Serenity on X

I actually thought $MRVL would buy $SIVE given smaller MC, but they went ahead and bought $LITE instead. Since it looked like Marvell was heading the Broadcom direction with vertical integration and needed lasers. As you said, $SIVE / $AAOI are much more strategically valuable now (both as independent suppliers + M&A prospects). Never crossed my mind Lumentum would get bought... but this sets an example for other players on what you can do now.
@aleabitoreddit

Serenity on X

Considering $LITE (that is sold out into 2029) is going to get swallowed up by $MRVL next week. I see $AAOI / $SIVE / $COHR are going to be a lot more strategically valuable in the West. Both for M&A prospects (which deserves a premium) so companies can vertically integrate like $AVGO. + players are going to be incentivized to qualify other light sources not owned by their competitor. $AAOI has a ton of optionality to supply CPO lasers in 2027 if they buy transceiver laser supply merchant, since they have the technology now. But 2028 they'll have capacity available AFAIK. AOI also had a lot of opportunities to sign LTAs but didn't, so there's a lot more uncertainty alongside the series of $600M ATMs. But we'll see how they're doing, especially with their 1.6T shipments... Laser chokepoint part of the optical supply chain is extraordinarily strong
@aleabitoreddit

Serenity on X

We've finally made it to November... holy crap October was brutal. Per Morgan Stanley data, the recent hedge fund de-grossing was the highest in the past 10 years. Exceeding the: - 2016 Chinese stock market crash - 2018 Volmageddon - March 2020 COVID crash - 2021 Archegos collapse / Evergrande crisis - 2022 bear market Goldman's prime brokerage desk reported on the 26th that it had also seen ~$20B of selling over 2 weeks vs. $23 billion during July's entire unwind. From $HOOD short interest data, from Sept -> Oct short float also increased from: $AAOI: 12.5% -> 19.84%+ $AEVA: 11% -> 25.64%+ $CBRS: 12.25% -> 20.12%+ $AEHR: 14.33% -> 17.93%+ $TSEM: 2.15% -> 4.73%+ $CIFR: 19.94% -> 25.39%+ $LWLG: 15.24% ->19.12%+ $OKLO: 17.72% ->22.93%+ $CRWV: 17.91% ->26.58%+ Substantial deleveraging coinciding with surging short interest, kinda looks like a July setup after Midterms? The recent rotation also kinda pushed names like $CRWD and cybersecurity to bubble valuations into hundreds of fwd P/E... Earnings on many AI capex + bottlenecks (not all like $INTC) looked strong: eg. $AXTI guided annualized Q4 = 23.7x P/E now, not including potential InP substrate hikes + capacity expansion that can compress it to single digits. - $SKHY (~$59B operating profit) casually making more than trillion dollar companies like Amazon ($28.1B operating profit), backed with 5Y LTAs. - No signs of $MSFT / $AMZN materially cutting capex, while $SPCX secures $40B more for GPU procurement. Slightly painful, but I think the AI capex trade (specifically photonics/memory) is a generational opportunity, with extreme volatility in between.

Investor Letters

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💥Tead-ering💥

Teads’ revenue fell 26% and its stock dropped 38% as Google AI summaries cut publisher referral traffic, worsening losses and straining its…

TEAD $17MGUTS $13M
PETITION

Lion Copper: Initiation Report

Lion Copper targets 2030 Nevada copper production at Yerington, with Rio Tinto’s Nuton funding its 2027 feasibility study under a 65%…

LCU $96M
Atrium Research - Equity Research

Quick Value #337 - Dana Inc (DAN)

Dana is combining with Eaton’s Mobility unit via a 1Q27 Reverse Morris Trust after selling a division, delevering and accelerating buybacks.

DAN $2.1B
Value Don't Lie 2 clicks

Seed Corn

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XRN $372M
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STRL: 80 new electricians a week

Sterling’s $4.1 billion backlog faces Texas permitting risk after a governor proposed a moratorium, while Connexion, Capital Asset Planning…

STRL $7.6B
Trade Ideas Flow 1 click
AVO · long

Mission Produce INC

Mission Produce (AVO) is pitched long as a consumer-staples investment, countering a September 2024 short case.

AVO $1B
Value Investors Club

Diamond Estates: Research Note

Diamond Estates converts $4.7 million of Lassonde debentures at a 69% premium, cutting debt to $10.9 million and raising Lassonde ownership…

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Atrium Research - Equity Research 3 clicks

Vicor Update, Part Four

Vicor’s Federal Circuit hearing put Foxconn’s disputed patent license under pressure, reinforcing its AI server royalty model and licensing…

VICR $6.8B
CV's Substack 3 clicks

Floor & Decor 3Q26: Business Update

Floor & Decor’s 3Q26 sales rose 3% while comparable sales fell 1.4%; it cut 2027 openings to 10-15 as high mortgage rates pressure…

FND $5B
Speedwell Memos 1 click

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