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Thursday, November 12, 2026

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Looking Back at Another Successful Thesis

DoubleU Games raised its all-cash tender offer for DoubleDown Interactive minority holders to $16.25 per ADS from $11.25 after net cash made the earlier bid untenable.

DDI $779M
The Value Road 2 clicks

From X

@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.
@StableBread

Fajasy on X

By my numbers, Magna Mining $MGMNF (TSX: $NICU) is worth CAD$0.88-3.08/share before restart capital, depending mostly on Levack, its flagship mine. Here’s what the stock is worth under four Levack outcomes at Q2 margins, before restart capital (the upfront spending to rebuild and reopen the mine): 1) Levack worth nothing: CAD$0.88-1.09/share from cash, McCreedy West (the producing mine), and Crean Hill (the permitted nickel mine), 45-56% below the CAD$1.98 share price (October 23 close). 2) Levack at McCreedy West’s scale: 17M lbs/year is worth ~US$114M, which makes the stock worth CAD$1.35-1.56/share, 21-32% below CAD$1.98. 3) Levack at its study’s plan: The October 7 preliminary economic assessment (PEA) plans 36.8M lbs/year from mid-2028 to 2035, worth ~US$246M, which makes the stock worth CAD$1.90-2.12/share, 4% below to 7% above CAD$1.98. 4) Levack at the top of CEO Jason Jessup’s range (3x McCreedy West): 54M lbs/year is worth ~US$361M, which makes the stock worth ~CAD$2.59/share (+31%) with McCreedy West and Crean Hill at the top of my ranges. With a 10% higher realized price, Levack rises to ~US$479M and the stock to ~CAD$3.08 (+56%). The PEA’s CAD$70.1M of initial capital would take ~CAD$0.21/share off the last three cases, but pre-commercial cash flow and tax credits cut the net funding need to CAD$8.6M (~CAD$0.03/share). On the upside, SCP Resource Finance, a mining-focused investment bank, put a CAD$5.10 target on the stock (+158%) in its April 14 note, before Alpayana, a Peruvian mining group, bought 62.4M new shares at CAD$2.25. Canaccord Genuity $CCORF, a Canadian investment bank, and Desjardins, a Quebec-based financial cooperative, also cover the stock, and both advised Magna on the Alpayana deal. Reaching SCP’s CAD$5.10 would demand ~US$964M from Levack and the rest, ~3.9x Levack’s value at the PEA’s output and Q2 margins. Getting there takes (1) ore from R2, a high-grade zone at Levack, (2) higher metal prices, (3) better margins at Levack than at McCreedy West, or a strong mix of the three.

Investor Letters

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Peloton: Beyond The Bike

Peloton’s connected-fitness subscribers fell 9% year over year to 2.475 million, with another high-single-digit holiday decline forecast as…

PTON $2.6B
TSOH Investment Research 3 clicks

Cat-Scratch Fervo

Fervo Energy raised $2 billion in its May IPO, then fell nearly 70% below issue price after a Morpheus short report, despite targeting 1 GW…

FRVO $3.8B
Doomberg 5 clicks
MONOY · long

Monotaro CO LTD

MonotaRO, traded as MONOY in the U.S. and 3064 in Japan, is a Japanese MRO distributor recommended as a long.

MONOY $7.4B
Value Investors Club

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…

AN $6B
Cannibal Stocks 4 clicks

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