The Best Investment Of My Career

Back in the dark days of 2020 I was actively buying a conglomerate around a couple bucks per share. The stock had fallen from the highs of $40 down to a valuation where everyone thought bankruptcy was on the horizon.

My thoughts on the valuation were pretty simple at the time. Either the stock went to zero and I lost all of my capital. Or the company somehow survived the pandemic and you get at least a ten bagger. If I sized my position right, a 1-2% position could easily become a 10-20% position, and if I was wrong I would only lose 1-2% of my capital. It was an asymmetric bet I was willing to take.

Fast forward a few months and the company ended up surviving. The stock went from $2 per share to $10 and continued to climb. I ended up selling out after the company announced a “go-private” transaction to private equity that seemed significantly under the fair market value of all of the assets.

The “go-private” transaction ended up failing as investors voted down the private equity deal. The stock fell under $10 per share and I started aggressively buying again.

Then one day I woke up and saw the company announced a significant asset sale. The asset sale was an attempt to sell one of their three business units for almost one billion dollars. One billion dollars for a company that was trading less than $100 million only one year ago during the pandemic. The stock shot up. I continued to purchase shares as it appeared the entire company was in play to be sold. My analysis suggested each business unit could be sold for close to one billion each.

This past Monday, the company announced that the sale of this asset closed. In addition, the management team announced they are doing a $12 dollar per share special dividend along with a pretty aggressive stock repurchase plan. All of the remaining proceeds will be used to pay down debt.

My average cost basis in this company is $12.50 per share. Getting a $12 dollar per share special dividend in less than a month will be significant. This dividend check is a higher payment than my first year salary at my first professional job.

It is mind blowing. Almost all of the risk in this investment will be returned to me in early February, and I can ride the rest of the investment using house money. In addition, I think this company could selloff the remaining two segments for close to a billion each. Should this happen, I am guessing the management team does additional special dividends, that could be even higher than the $12 per share they just announced.

This may be the best investment of my career and it is only just starting. All of my initial capital is getting returned to me and I can ride out the rest of this investment using house money. Should management sell the other two divisions, I stand to make a significant amount of money.

I have highlighted this investment to the community of over 1,500 investors on Alpha Letter multiple times. We have a pretty great discussion ongoing about the tax treatments of this special dividend along with what the company will look like in a couple of years. The stock is up over 20% in 2022 and anyone who bought on my initial research is getting most, if not all of their capital returned in a month.

You can get access to this community along with an archive of all my past research and future research. Join the discussion today.

Disclaimer: The publisher does not guarantee the accuracy or completeness of the information provided in this page.  All statements and expressions herein are the sole opinion of the author or paid advertiser.

Alpha Letter is a publisher of financial information, not an investment advisor.  We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient.  

THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME.  THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION.  INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN.

No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.  

Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable.  They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.  Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein.  The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and the publisher undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.

The publisher, its affiliates, and clients of the a publisher or its affiliates may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities).  To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.

Neither the publisher nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.

By using the Site or any affiliated social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.

For Full Terms of Use Click HERE. For the Privacy Policy Click HERE.

alphaletter.co (“Alpha”) is a website owned and operated by Substack. Alpha is paid fees by the companies that make investment offerings on this website. Be aware that payment of these fees may put Alpha in a conflict of interest with the investor. By accessing this website or any page thereof, you agree to be bound by the Terms of Use and Privacy Policy, in effect at the time you access this website or any page thereof. The Terms of Use and Privacy Policy may be amended from time to time. Nothing on this website shall constitute an offer to sell, or a solicitation of an offer to buy or subscribe for, any securities to any person in any jurisdiction where such an offer or solicitation is against the law or to anyone to whom it is unlawful to make such offer or solicitation. Alpha is not an underwriter, broker-dealer, Title III crowdfunding portal or a valuation service and does not engage in any activities requiring any such registration. Alpha does not provide advice on investments or structure transactions. Offerings made under Regulation A under the U.S. Securities Act of 1933, as amended (the "Securities Act") are available to U.S. investors who are “accredited investors” as defined by Rule 501 of Regulation D under the Securities Act well as non-accredited investors, who are subject to certain investment limitations as set forth in Regulation A under the Securities Act. In order to invest in Regulation A offerings, investors may be asked to fill out a certification and provide necessary documentation as proof of your income and/or net worth to verify that you are qualified to invest in offerings posted on this website. All securities listed on this site are being offered by, and all information included on this site is the responsibility of, the applicable issuer of such securities. Alpha does not verify the adequacy, accuracy or completeness of any information. Neither Alpha nor any of its officers, directors, agents and employees makes any warranty, express or implied, of any kind whatsoever related to the adequacy, accuracy, valuations of securities or completeness of any information on this site or the use of information on this site. Neither Alpha nor any of its directors, officers, employees, representatives, affiliates or agents shall have any liability whatsoever arising from any error or incompleteness of fact, or lack of care in the preparation of, any of the materials posted on this website. Investing in securities, especially those issued by start-up companies, involves substantial risk. investors should be able to bear the loss of their entire investment and should make their own determination of whether or not to make any investment based on their own independent evaluation and analysis