bizaro86

Great call on the Artis prefs!

The fact the cash is tied up doesn't make any difference to the warrant price. The cash in trust doesn't belong to them, same as the rights. The $20 strike is obviously better than the $23 strike. But the warrant is exercisable for years after the deal closes, while the right is only exercisable at the close. I think that extra time value offsets the higher strike price.

I think the right has negative time value. It is worth a "Bill Ackman pop" at some point in the future, within the next 5 years. So the value is whatever you think that pop will be on day 1, discounted back to today by however long you think it'll take him to find a deal

It is. I've added some here (offset with a few very far out of the money covered calls) anyway. Every time I've bought a truly great business at an "almost" reasonable price I've been happy I did so. Their multiple is very high, but this is a business with huge growth and huge pricing power. I rent on airbnb and the market there is so much better than their competitors I'd pay 3x what they currently charge me for fees and still feel I was getting good value. I am still disappointed about the IPO allocation. They gave hosts with enough transactions (I would have qualified) access to a $50k allotment at the IPO price. I tried to subscribe but it was US residents only. ?

Yeah, the base rate for a holding company that small succeeding is low. But I'd rather cheer for success than failure given the people involved. Admittedly I'm doing that from the sidelines. I think it's really too bad the Russell Breweries deal didn't close. That would have given PDH a sustainable source of cash flow (cover G&A, reinvest, etc)

They are wrong. Bonvoy points aren't worth 0.9 cents, your estimate of 0.5 is more realistic for the average person. Black market price is around 0.5-0.6. The travel packages (hotel stay plus airline miles) have historically been the best value. You get a certificate for a 7 night hotel stay and a bunch of airline miles. There are also 5 night stay packages available. You're supposed to own a timeshare to get them, but enforcement of that rule has been uneven in the past.

Related to this topic: I've always been a SAGD guy, so I know an unreasonably large amount about that process. But very little about mining. What I don't understand is WHY the miners have such high greenhouse gas emissions? SAGD requires burning gas to heat water to make steam, and the giant steam generators produce a lot of CO2. Where are the emissions at the mines? Tailpipe emissions from their giant equipment? Or is it somewhere in the process part of the operation?

You're welcome. I can see why he liked it, lots of parallels with CSU (buy a bunch of businesses in the same vertical, not much centralization, then expand by investing in competent people in related verticals). The long term value of Thomson came from the specialty publications, as newspapers have essentially died. But at the same time they were rolling up specialty pub they were also doing package holidays and all sorts of other stuff. But they also knew when to fold the businesses that weren't key.

I think the history of Malone doing deals with AT&T suggests that his shareholders end up the winners in that negotiation.

Archive.org has a copy digitized copy you can borrow. Had to sign up for free account. https://archive.org/details/afteriwassixtych00royh/page/110/mode/1up

I just read the book he referenced and enjoyed it.

COST ROST DIS GOOGL

Yeah, if you owned this business and those numbers were real why on earth would you go public? Shining a light on how profitable you are just invites both regulatory scrutiny and competition, and you don't need the extra capital anyway.

All the cousins get to be a vice president.

It probably is illusory. I can't imagine CN and KSU (with parallel North-South networks) would be allowed to merge. Some of that premium comes from potentially increased market power. As a thought experiment, what would Union Pacific pay for BNSF? The answer is a huge number because of the giant synergies and monopoly power the combined entity would have. But that doesn't matter, because the government would never let the two merge. So that value is entirely hypothetical.