FRAGMENTS finds the pieces the market leaves behind — hidden assets, neglected balance sheets, broken stories — and puts them together before the cro #Fragments
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FRAGMENTS Value retweeted
𝗖𝗹𝗮𝗿𝗼𝘀 𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗧𝗿𝘂𝘀𝘁 $CMTG — $𝟭.𝟭𝟭 𝗮 𝗦𝗵𝗮𝗿𝗲 𝗔𝗴𝗮𝗶𝗻𝘀𝘁 $𝟴.𝟰𝟵 𝗼𝗳 𝗥𝗲𝗽𝗼𝗿𝘁𝗲𝗱 𝗕𝗼𝗼𝗸 𝗩𝗮𝗹𝘂𝗲
CMTG closed yesterday at $1.11. At that price, the market valued the company's common equity at approximately $157 million, against more than $1.2 billion of reported common equity.
I can understand why investors are skeptical. CMTG has troubled commercial real estate loans, properties taken back from borrowers, expensive financing and a $500 million HPS term loan.
But something interesting is happening with the assets.
The company has started resolving troubled loans and reducing financing. It also has an agreement to sell a distressed multifamily loan for $245 million, or 98% of its carrying value. Some of the values that investors have been questioning are now being tested against actual offers from buyers.
When I wrote our Deep Value Report in August, I spent a lot of time on the individual properties. The Park in Santa Monica, Uptown Atlanta, Key Bridge and the Old Chicago Post Office all have very different recovery prospects.
Old Chicago alone is worth understanding. CMTG has a $125 million mezzanine position sitting behind $830 million of mortgage debt. Even if the building is worth hundreds of millions, CMTG could still recover very little.
Then you have JPMorgan's repo financing, HPS, property-level debt and the ongoing costs of working through these assets.
I wanted to know how much of the reported book value could actually make its way back to common shareholders. Our August report goes through the assets, the financing and the possible recoveries individually, including our bear, base and bull valuations per share.
With the Q3 results now available, I think it's worth revisiting that analysis. Some of the recent developments are encouraging, although the risks remain substantial.
𝗢𝘂𝗿 𝗳𝘂𝗹𝗹 𝗗𝗲𝗲𝗽 𝗩𝗮𝗹𝘂𝗲 𝗥𝗲𝗽𝗼𝗿𝘁:
Here: cundilldeepvalue.substack.co…
FRAGMENTS Value retweeted
𝗠𝗲𝗿𝗰𝗲𝗿 𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 $MERC — 𝗔𝗿𝗼𝘂𝗻𝗱 $𝟬.𝟮𝟬 𝗽𝗲𝗿 𝘀𝗵𝗮𝗿𝗲. $𝟰𝟬𝟬 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 𝗶𝗻 𝗻𝗲𝘄 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴. 𝗔𝗻𝗱 𝗮 𝗺𝗮𝗷𝗼𝗿 𝘀𝗵𝗮𝗿𝗲𝗵𝗼𝗹𝗱𝗲𝗿 𝘄𝗶𝘁𝗵 𝗮𝗯𝗼𝘂𝘁 𝟰𝟬%.
Mercer's restructuring is becoming one of the more interesting situations I've researched recently.
The company has agreed to eliminate approximately 88% of its existing senior-note debt through an exchange for equity. It will also receive $400 million in new financing.
And Peter Kellogg, whose reporting group last disclosed a 40.25% position, has been involved with Mercer for years.
But there's something important about that new financing.
The investors providing the $400 million receive $420 million in secured notes, plus 40% of the reorganized company's common equity and 40% of its convertible preferred equity.
Existing shareholders are expected to receive 8.5% of the common and 3.5% of the preferred, before certain dilution.
Meanwhile, management's newly disclosed projections show 𝗢𝗽𝗲𝗿𝗮𝘁𝗶𝗻𝗴 𝗘𝗕𝗜𝗧𝗗𝗔 𝗿𝗲𝗮𝗰𝗵𝗶𝗻𝗴 $𝟯𝟭𝟭 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 𝗶𝗻 𝟮𝟬𝟮𝟴.
If those projections are achieved, Mercer could be worth considerably more than today's stock-market capitalization. But most of that enterprise value would belong to a very different group of owners.
I've examined the seven major operating asset groups, the new financing terms, the creditor priorities and three possible recovery scenarios for the existing shares.
𝗠𝘆 𝗳𝘂𝗹𝗹 𝗦𝗽𝗲𝗰𝗶𝗮𝗹 𝗦𝗶𝘁𝘂𝗮𝘁𝗶𝗼𝗻 𝗗𝗼𝘀𝘀𝗶𝗲𝗿 𝗼𝗻 𝗙𝗥𝗔𝗚𝗠𝗘𝗡𝗧𝗦 𝗴𝗼𝗲𝘀 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝘁𝗵𝗲 𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻𝘀, 𝘁𝗵𝗲 𝗱𝗲𝗯𝘁 𝗮𝗻𝗱 𝘁𝗵𝗲 𝗽𝗼𝘁𝗲𝗻𝘁𝗶𝗮𝗹 𝗿𝗲𝗰𝗼𝘃𝗲𝗿𝘆 𝗽𝗲𝗿 𝘀𝗵𝗮𝗿𝗲.
Here:cundilldeepvalue.substack.co…
𝗠𝗲𝗿𝗰𝗲𝗿 𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 $MERC — 𝗔𝗿𝗼𝘂𝗻𝗱 $𝟬.𝟮𝟬 𝗽𝗲𝗿 𝘀𝗵𝗮𝗿𝗲. $𝟰𝟬𝟬 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 𝗶𝗻 𝗻𝗲𝘄 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴. 𝗔𝗻𝗱 𝗮 𝗺𝗮𝗷𝗼𝗿 𝘀𝗵𝗮𝗿𝗲𝗵𝗼𝗹𝗱𝗲𝗿 𝘄𝗶𝘁𝗵 𝗮𝗯𝗼𝘂𝘁 𝟰𝟬%.
Mercer's restructuring is becoming one of the more interesting situations I've researched recently.
The company has agreed to eliminate approximately 88% of its existing senior-note debt through an exchange for equity. It will also receive $400 million in new financing.
And Peter Kellogg, whose reporting group last disclosed a 40.25% position, has been involved with Mercer for years.
But there's something important about that new financing.
The investors providing the $400 million receive $420 million in secured notes, plus 40% of the reorganized company's common equity and 40% of its convertible preferred equity.
Existing shareholders are expected to receive 8.5% of the common and 3.5% of the preferred, before certain dilution.
Meanwhile, management's newly disclosed projections show 𝗢𝗽𝗲𝗿𝗮𝘁𝗶𝗻𝗴 𝗘𝗕𝗜𝗧𝗗𝗔 𝗿𝗲𝗮𝗰𝗵𝗶𝗻𝗴 $𝟯𝟭𝟭 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 𝗶𝗻 𝟮𝟬𝟮𝟴.
If those projections are achieved, Mercer could be worth considerably more than today's stock-market capitalization. But most of that enterprise value would belong to a very different group of owners.
I've examined the seven major operating asset groups, the new financing terms, the creditor priorities and three possible recovery scenarios for the existing shares.
𝗠𝘆 𝗳𝘂𝗹𝗹 𝗦𝗽𝗲𝗰𝗶𝗮𝗹 𝗦𝗶𝘁𝘂𝗮𝘁𝗶𝗼𝗻 𝗗𝗼𝘀𝘀𝗶𝗲𝗿 𝗼𝗻 𝗙𝗥𝗔𝗚𝗠𝗘𝗡𝗧𝗦 𝗴𝗼𝗲𝘀 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝘁𝗵𝗲 𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻𝘀, 𝘁𝗵𝗲 𝗱𝗲𝗯𝘁 𝗮𝗻𝗱 𝘁𝗵𝗲 𝗽𝗼𝘁𝗲𝗻𝘁𝗶𝗮𝗹 𝗿𝗲𝗰𝗼𝘃𝗲𝗿𝘆 𝗽𝗲𝗿 𝘀𝗵𝗮𝗿𝗲.
Here:cundilldeepvalue.substack.co…
𝗠𝗲𝗿𝗰𝗲𝗿 𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 $MERC — 𝗧𝗿𝗮𝗱𝗶𝗻𝗴 𝗮𝗿𝗼𝘂𝗻𝗱 $𝟬.𝟮𝟬, 𝘄𝗶𝘁𝗵 𝗣𝗲𝘁𝗲𝗿 𝗞𝗲𝗹𝗹𝗼𝗴𝗴 𝗵𝗼𝗹𝗱𝗶𝗻𝗴 𝗮𝗯𝗼𝘂𝘁 𝟰𝟬% 𝗼𝗳 𝘁𝗵𝗲 𝗰𝗼𝗺𝗽𝗮𝗻𝘆.
That combination got my attention.
Kellogg's last ownership filing showed 26.95 million shares, representing 40.25% of Mercer. He was still buying in June, around $0.90 per share.
Now Mercer has announced an agreement to exchange approximately $1.125 billion of senior notes for equity and raise $400 million in new financing.
The company owns four pulp mills, lumber operations, mass-timber facilities and power-generating assets. But the creditors are negotiating for most of the ownership.
Here's what I'm particularly curious about.
Shareholders representing approximately 50% of Mercer have agreed to support the restructuring. Kellogg's group last disclosed more than 40%. We don't yet know from the public agreement whether he is among those supporting it.
I went through the mills, their estimated values, the debt, Kellogg's ownership and the securities existing shareholders are expected to receive.
𝗜𝗻 𝗺𝘆 𝘂𝗽𝗱𝗮𝘁𝗲𝗱 𝗙𝗥𝗔𝗚𝗠𝗘𝗡𝗧𝗦 𝗱𝗼𝘀𝘀𝗶𝗲𝗿, 𝗜 𝗮𝗹𝘀𝗼 𝘄𝗼𝗿𝗸 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝗕𝗲𝗮𝗿, 𝗕𝗮𝘀𝗲 𝗮𝗻𝗱 𝗕𝘂𝗹𝗹 𝗿𝗲𝗰𝗼𝘃𝗲𝗿𝘆 𝘀𝗰𝗲𝗻𝗮𝗿𝗶𝗼𝘀 𝗽𝗲𝗿 𝗲𝘅𝗶𝘀𝘁𝗶𝗻𝗴 𝘀𝗵𝗮𝗿𝗲.
Because I'd like to understand what someone buying Mercer today could actually end up owning.
Here:cundilldeepvalue.substack.co…
𝗖𝗹𝗮𝗿𝗼𝘀 𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗧𝗿𝘂𝘀𝘁 $CMTG — $𝟭.𝟭𝟭 𝗮 𝗦𝗵𝗮𝗿𝗲 𝗔𝗴𝗮𝗶𝗻𝘀𝘁 $𝟴.𝟰𝟵 𝗼𝗳 𝗥𝗲𝗽𝗼𝗿𝘁𝗲𝗱 𝗕𝗼𝗼𝗸 𝗩𝗮𝗹𝘂𝗲
CMTG closed yesterday at $1.11. At that price, the market valued the company's common equity at approximately $157 million, against more than $1.2 billion of reported common equity.
I can understand why investors are skeptical. CMTG has troubled commercial real estate loans, properties taken back from borrowers, expensive financing and a $500 million HPS term loan.
But something interesting is happening with the assets.
The company has started resolving troubled loans and reducing financing. It also has an agreement to sell a distressed multifamily loan for $245 million, or 98% of its carrying value. Some of the values that investors have been questioning are now being tested against actual offers from buyers.
When I wrote our Deep Value Report in August, I spent a lot of time on the individual properties. The Park in Santa Monica, Uptown Atlanta, Key Bridge and the Old Chicago Post Office all have very different recovery prospects.
Old Chicago alone is worth understanding. CMTG has a $125 million mezzanine position sitting behind $830 million of mortgage debt. Even if the building is worth hundreds of millions, CMTG could still recover very little.
Then you have JPMorgan's repo financing, HPS, property-level debt and the ongoing costs of working through these assets.
I wanted to know how much of the reported book value could actually make its way back to common shareholders. Our August report goes through the assets, the financing and the possible recoveries individually, including our bear, base and bull valuations per share.
With the Q3 results now available, I think it's worth revisiting that analysis. Some of the recent developments are encouraging, although the risks remain substantial.
𝗢𝘂𝗿 𝗳𝘂𝗹𝗹 𝗗𝗲𝗲𝗽 𝗩𝗮𝗹𝘂𝗲 𝗥𝗲𝗽𝗼𝗿𝘁:
Here: cundilldeepvalue.substack.co…
𝐀𝐫𝐛𝐨𝐫 𝐑𝐞𝐚𝐥𝐭𝐲 𝐓𝐫𝐮𝐬𝐭 $ABR — 𝐃𝐞𝐞𝐩 𝐕𝐚𝐥𝐮𝐞 𝐑𝐞𝐩𝐨𝐫𝐭
Arbor shares trade around 𝐔𝐒𝐃 𝟏.𝟕𝟓, compared with reported book value of 𝐔𝐒𝐃 𝟏𝟎.𝟗𝟐 𝐩𝐞𝐫 𝐬𝐡𝐚𝐫𝐞. At roughly 16% of book, the company could lose a substantial amount of its reported equity and still leave shareholders more than the current price—provided it can finance the recovery without substantial dilution.
The dividend has been suspended, but Arbor still holds approximately 𝐔𝐒𝐃 𝟏𝟐 𝐛𝐢𝐥𝐥𝐢𝐨𝐧 𝐨𝐟 𝐥𝐨𝐚𝐧𝐬 and services 𝐔𝐒𝐃 𝟑𝟔.𝟖 𝐛𝐢𝐥𝐥𝐢𝐨𝐧 of mortgages for other investors. The servicing contracts generate fees while the troubled loans require further capital and time.
How much could the properties sell for? What are the servicing rights worth? How much can the loans lose before the remaining value is absorbed by lenders and preferred shareholders?
𝐓𝐡𝐞 𝐮𝐩𝐝𝐚𝐭𝐞𝐝 𝐅𝐑𝐀𝐆𝐌𝐄𝐍𝐓𝐒 𝐃𝐞𝐞𝐩 𝐕𝐚𝐥𝐮𝐞 𝐑𝐞𝐩𝐨𝐫𝐭 𝐩𝐮𝐭𝐬 𝐧𝐮𝐦𝐛𝐞𝐫𝐬 𝐨𝐧 𝐞𝐚𝐜𝐡 𝐨𝐟 𝐭𝐡𝐨𝐬𝐞 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧𝐬. Paid subscribers get the revised asset valuations, debt repayment analysis and Bear, Base and Bull estimates per share, including the recovery assumptions needed to justify buying the stock.
Here:cundilldeepvalue.substack.co…
𝗖𝗹𝗲𝗮𝗿𝘄𝗮𝘁𝗲𝗿 𝗣𝗮𝗽𝗲𝗿 — 𝗔𝗿𝗼𝘂𝗻𝗱 $𝟭𝟰.𝟮𝟬 𝘃𝗲𝗿𝘀𝘂𝘀 $𝟰𝟵.𝟮𝟬 𝗶𝗻 𝗿𝗲𝗽𝗼𝗿𝘁𝗲𝗱 𝗯𝗼𝗼𝗸 𝘃𝗮𝗹𝘂𝗲 $CLW
Clearwater is recovering some ground after losing nearly 29% in one session following last week’s results. Even after the rebound, the shares trade at less than 30% of reported book value. For an investor willing to examine an industrial recovery, that discount deserves attention.
The company owns three paperboard mills with different equipment, costs and investment needs. Our Deep Value Report examines 𝘄𝗵𝗮𝘁 𝗲𝗮𝗰𝗵 𝗺𝗶𝗹𝗹 𝗰𝗼𝘂𝗹𝗱 𝗿𝗲𝗮𝗹𝗶𝘇𝗲 𝗶𝗻 𝗮 𝘀𝗮𝗹𝗲 and what those operations could earn after repairs and recurring capital spending.
We then deduct the obligations that stand between those assets and shareholders, including the cash consumed while waiting for a recovery. The full report contains our valuation ranges, the assumptions behind them and 𝘁𝗵𝗲 𝗽𝗿𝗶𝗰𝗲𝘀 𝗮𝘁 𝘄𝗵𝗶𝗰𝗵 𝘁𝗵𝗲 𝗿𝗶𝘀𝗸 𝗯𝗲𝗰𝗼𝗺𝗲𝘀 𝗺𝗼𝗿𝗲 𝗮𝘁𝘁𝗿𝗮𝗰𝘁𝗶𝘃𝗲.
Here:cundilldeepvalue.substack.co…
𝗖𝗹𝗮𝗿𝗼𝘀 𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗧𝗿𝘂𝘀𝘁 $CMTG — 𝗤𝟯 𝗨𝗽𝗱𝗮𝘁𝗲
CMTG was up roughly 𝗜𝟳% 𝗶𝗻 𝗽𝗿𝗲𝗺𝗮𝗿𝗸𝗲𝘁 𝘁𝗿𝗮𝗱𝗶𝗻𝗴 this morning after closing at 𝗦𝟭.𝟭𝟭 yesterday. The company released its Q3 results last night, reporting 𝗦𝟴.𝟰𝟵 𝗼𝗳 𝗯𝗼𝗼𝗸 𝘃𝗮𝗹𝘂𝗲 𝗽𝗲𝗿 𝘀𝗵𝗮𝗿𝗲.
We published our Deep Value Report on CMTG back in August, when the stock had fallen to $1.77 against $8.58 of reported book value. I went back through the new numbers this morning to see how the actual recoveries compared with our estimates.
During Q3, CMTG resolved 𝗦𝟰𝟬𝟵.𝟱 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 𝗼𝗳 𝗹𝗼𝗮𝗻𝘀, followed by another 𝗦𝟮𝟲𝟴.𝟳 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 in full repayments during October. Financings outstanding have also come down substantially, and no additional loans were added to the watchlist during the quarter.
One transaction caught my attention. CMTG has agreed to sell a troubled multifamily loan for 𝗦𝟮𝟰𝟱 𝗺𝗶𝗹𝗹𝗶𝗼𝗻, about 98% of its carrying value. The company hasn't identified the property, but the figures appear to match The Park in Santa Monica, which we analyzed in August.
We had estimated 𝗦𝟭𝟴𝟱–𝟮𝟮𝟬 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 for that exposure in our base case. If this is indeed The Park and the sale closes at $245 million, we were too conservative. I'm happy to acknowledge that.
There are still plenty of risks. CMTG has $566.2 million of CECL reserves, roughly 40% of its loan portfolio by carrying value remains on non-accrual, and the 𝗦𝟱𝟬𝟬 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 𝗛𝗣𝗦 𝘁𝗲𝗿𝗺 𝗹𝗼𝗮𝗻 is still outstanding.
I'm encouraged by the recent transactions, particularly because we're starting to see what buyers are actually willing to pay for some of these assets. But I still want to see how much cash remains after the lenders, financing costs and other expenses have been paid.
Our original 𝗗𝗲𝗲𝗽 𝗩𝗮𝗹𝘂𝗲 𝗥𝗲𝗽𝗼𝗿𝘁 goes through The Park, Uptown Atlanta, Key Bridge, Old Chicago, the REO portfolio and the debt structure in detail.
Here: cundilldeepvalue.substack.co…
𝗔𝗶𝗿 𝗖𝗮𝗻𝗮𝗱𝗮: 𝗪𝗵𝗼 𝗪𝗶𝗹𝗹 𝗙𝗹𝘆 𝘁𝗵𝗲 𝗡𝗲𝘅𝘁 𝗔𝗶𝗿𝗽𝗹𝗮𝗻𝗲? $AC.TO
𝗝𝗮𝘇𝘇 𝗵𝗮𝘀 𝗮 𝗰𝗼𝗻𝘁𝗿𝗮𝗰𝘁 𝘄𝗶𝘁𝗵 𝗔𝗶𝗿 𝗖𝗮𝗻𝗮𝗱𝗮 𝘂𝗻𝘁𝗶𝗹 𝟮𝟬𝟯𝟱. Yet its fleet is approaching the contractual minimum of 80 aircraft, and its quarterly departures have fallen approximately 48% since 2015.
That got me looking at how Air Canada has managed its regional airlines over the years.
In 2015, Air Canada was using Jazz, Sky Regional and Air Georgian. By 2021, it wanted everything consolidated under Jazz, expecting roughly 𝗖$𝟰𝟬𝟬 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 𝗶𝗻 𝗰𝗼𝘀𝘁 𝗿𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻𝘀 over the remaining agreement. Five years later, PAL is operating Air Canada Express flights, with a proposed expansion to eleven Q400s.
Meanwhile, Rouge is receiving 737 MAX aircraft, and Air Canada's incoming CEO, Anko van der Werff, comes from SAS, where several airlines operate under one commercial brand.
I went back through the historical agreements, Jazz's management, the pilot recruitment problems, and what van der Werff actually accomplished at SAS and Avianca. I also examined whether Air Canada could create something similar to SAS Link under its current pilot agreement.
𝗧𝗵𝗲 𝗳𝘂𝗹𝗹 𝗶𝗻𝘃𝗲𝘀𝘁𝗶𝗴𝗮𝘁𝗶𝗼𝗻 𝗶𝘀 𝗳𝗿𝗲𝗲 𝗼𝗻 𝗙𝗥𝗔𝗚𝗠𝗘𝗡𝗧𝗦.
Here: cundilldeepvalue.substack.co…
𝗖𝗮𝗯𝗹𝗲 𝗢𝗻𝗲 $CABO — 𝗔 𝗡𝗲𝘄 𝗗𝗶𝗿𝗲𝗰𝘁𝗼𝗿, 𝗮 𝗦𝗽𝗲𝗰𝗶𝗮𝗹 𝗖𝗼𝗺𝗺𝗶𝘁𝘁𝗲𝗲 𝗮𝗻𝗱 𝗮𝗯𝗼𝘂𝘁 $𝟯𝟭 𝗠𝗶𝗹𝗹𝗶𝗼𝗻 𝗶𝗻 𝗘𝗾𝘂𝗶𝘁𝘆.
Cable One made an interesting disclosure on October 30. The board appointed Paul Keglevic, a former restructuring executive and CEO of Energy Future Holdings, and named him to a special committee evaluating strategic alternatives. He also served on the board of Frontier Communications during its Chapter 11 restructuring.
With CABO closing Monday at approximately $5.50 a share, the entire common equity is valued at only $31 million. The company still operates a substantial broadband network, but its financing problems now involve billions of dollars, a disputed MBI acquisition and creditors with very different economic interests.
I keep going back to the cash flow. During the first half of 2026, Cable One generated approximately $239 million in operating cash flow and spent $142 million on capital expenditures. That left about $97 million over six months, before debt principal repayments and acquisition payments. And the company is still losing broadband customers.
The board's decision to evaluate strategic alternatives deserves attention. A refinancing, asset sales or a broader restructuring could produce very different outcomes for the people who own the common shares today. The appointment itself does not establish that Cable One will file for bankruptcy.
Cable One reports its third-quarter results on November 5. I'll be particularly interested in whether the customer losses are slowing and how much cash the business is generating after capex.
Our 𝗙𝗥𝗔𝗚𝗠𝗘𝗡𝗧𝗦 𝗦𝗽𝗲𝗰𝗶𝗮𝗹 𝗦𝗶𝘁𝘂𝗮𝘁𝗶𝗼𝗻 provides the financial groundwork for examining these alternatives. We traced the MBI payments back to 2020, examined both businesses' cash generation, reconstructed the debt maturities and calculated what different equity settlements could mean for existing shareholders.
We also revisited our earlier $24-per-share valuation and explained why it can no longer be treated as a reliable price target under the current financing uncertainty.
With the board now considering strategic alternatives, those calculations have become even more relevant.
The full investigation, including our valuation sensitivities and potential dilution scenarios, is available to paid subscribers.
Here:cundilldeepvalue.substack.co…
FRAGMENTS Value retweeted
𝗠𝗲𝗿𝗰𝗲𝗿 𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 $MERC — 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝗽𝗿𝗼𝗷𝗲𝗰𝘁𝘀 $𝟯𝟭𝟭 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 𝗶𝗻 𝟮𝟬𝟮𝟴 𝗘𝗕𝗜𝗧𝗗𝗔.
The projections released with Mercer's restructuring agreement show Operating EBITDA recovering from approximately negative $4 million in 2026 to $171 million in 2027 and $311 million in 2028.
Management also projects $132 million of unlevered free cash flow in 2028, before the new financing costs.
At 𝟱𝘅 𝗽𝗿𝗼𝗷𝗲𝗰𝘁𝗲𝗱 𝟮𝟬𝟮𝟴 𝗘𝗕𝗜𝗧𝗗𝗔, the operating business would have an enterprise value of approximately $1.56 billion.
But here's what I wanted to understand: existing shareholders are expected to retain only 8.5% of the new common equity before certain dilution, along with 3.5% of the new convertible preferred equity.
So I went back through the mills, the debt, the financing terms and the ownership structure. I also calculated 𝗕𝗲𝗮𝗿 / 𝗕𝗮𝘀𝗲 / 𝗕𝘂𝗹𝗹 recovery scenarios per existing share.
Mercer could become a considerably healthier business. How much of that recovery will actually belong to today's shareholders?
That's what I examine in my updated FRAGMENTS Special Situation Dossier.
Here:cundilldeepvalue.substack.co…
𝗠𝗲𝗿𝗰𝗲𝗿 𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 $MERC — 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝗽𝗿𝗼𝗷𝗲𝗰𝘁𝘀 $𝟯𝟭𝟭 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 𝗶𝗻 𝟮𝟬𝟮𝟴 𝗘𝗕𝗜𝗧𝗗𝗔.
The projections released with Mercer's restructuring agreement show Operating EBITDA recovering from approximately negative $4 million in 2026 to $171 million in 2027 and $311 million in 2028.
Management also projects $132 million of unlevered free cash flow in 2028, before the new financing costs.
At 𝟱𝘅 𝗽𝗿𝗼𝗷𝗲𝗰𝘁𝗲𝗱 𝟮𝟬𝟮𝟴 𝗘𝗕𝗜𝗧𝗗𝗔, the operating business would have an enterprise value of approximately $1.56 billion.
But here's what I wanted to understand: existing shareholders are expected to retain only 8.5% of the new common equity before certain dilution, along with 3.5% of the new convertible preferred equity.
So I went back through the mills, the debt, the financing terms and the ownership structure. I also calculated 𝗕𝗲𝗮𝗿 / 𝗕𝗮𝘀𝗲 / 𝗕𝘂𝗹𝗹 recovery scenarios per existing share.
Mercer could become a considerably healthier business. How much of that recovery will actually belong to today's shareholders?
That's what I examine in my updated FRAGMENTS Special Situation Dossier.
Here:cundilldeepvalue.substack.co…
FRAGMENTS Value retweeted
𝗗𝗲𝗲𝗽 𝗩𝗮𝗹𝘂𝗲 𝗥𝗲𝗽𝗼𝗿𝘁 — 𝗖𝗹𝗲𝗮𝗿𝘄𝗮𝘁𝗲𝗿 𝗣𝗮𝗽𝗲𝗿 $CLW
𝗖𝗹𝗲𝗮𝗿𝘄𝗮𝘁𝗲𝗿 𝗣𝗮𝗽𝗲𝗿 𝗳𝗲𝗹𝗹 𝟮𝟴.𝟴% 𝗶𝗻 𝗮 𝘀𝗶𝗻𝗴𝗹𝗲 𝘀𝗲𝘀𝘀𝗶𝗼𝗻. At the $13.69 share price used in our report, its equity is valued at approximately $221 million. Augusta’s operating failures, the implementation of price increases and a management transition have put the company under renewed scrutiny.
Our report examines those developments together with the financing agreement. We investigate what lenders can require, how maintenance affects funding needs and what different financing outcomes would mean for existing shareholders.
We also revisit Augusta’s economics before Clearwater bought it and examine the subsequent repairs and insurance settlements. 𝗧𝗵𝗲 𝗳𝘂𝗹𝗹 𝗿𝗲𝗽𝗼𝗿𝘁 𝗰𝗼𝗻𝘁𝗮𝗶𝗻𝘀 𝗼𝘂𝗿 𝗰𝗼𝗻𝗰𝗹𝘂𝘀𝗶𝗼𝗻𝘀, 𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗿𝗮𝗻𝗴𝗲𝘀 𝗮𝗻𝗱 𝘁𝗵𝗲 𝗲𝘃𝗶𝗱𝗲𝗻𝗰𝗲 𝘁𝗵𝗮𝘁 𝘄𝗼𝘂𝗹𝗱 𝗰𝗵𝗮𝗻𝗴𝗲 𝘁𝗵𝗲𝗺. It is written for investors deciding whether the selloff warrants a position.
Here:cundilldeepvalue.substack.co…
FRAGMENTS Value retweeted
𝗖𝗮𝗯𝗹𝗲 𝗢𝗻𝗲 $CABO — 𝗔 𝗡𝗲𝘄 𝗗𝗶𝗿𝗲𝗰𝘁𝗼𝗿, 𝗮 𝗦𝗽𝗲𝗰𝗶𝗮𝗹 𝗖𝗼𝗺𝗺𝗶𝘁𝘁𝗲𝗲 𝗮𝗻𝗱 𝗮𝗯𝗼𝘂𝘁 $𝟯𝟭 𝗠𝗶𝗹𝗹𝗶𝗼𝗻 𝗶𝗻 𝗘𝗾𝘂𝗶𝘁𝘆.
Cable One made an interesting disclosure on October 30. The board appointed Paul Keglevic, a former restructuring executive and CEO of Energy Future Holdings, and named him to a special committee evaluating strategic alternatives. He also served on the board of Frontier Communications during its Chapter 11 restructuring.
With CABO closing Monday at approximately $5.50 a share, the entire common equity is valued at only $31 million. The company still operates a substantial broadband network, but its financing problems now involve billions of dollars, a disputed MBI acquisition and creditors with very different economic interests.
I keep going back to the cash flow. During the first half of 2026, Cable One generated approximately $239 million in operating cash flow and spent $142 million on capital expenditures. That left about $97 million over six months, before debt principal repayments and acquisition payments. And the company is still losing broadband customers.
The board's decision to evaluate strategic alternatives deserves attention. A refinancing, asset sales or a broader restructuring could produce very different outcomes for the people who own the common shares today. The appointment itself does not establish that Cable One will file for bankruptcy.
Cable One reports its third-quarter results on November 5. I'll be particularly interested in whether the customer losses are slowing and how much cash the business is generating after capex.
Our 𝗙𝗥𝗔𝗚𝗠𝗘𝗡𝗧𝗦 𝗦𝗽𝗲𝗰𝗶𝗮𝗹 𝗦𝗶𝘁𝘂𝗮𝘁𝗶𝗼𝗻 provides the financial groundwork for examining these alternatives. We traced the MBI payments back to 2020, examined both businesses' cash generation, reconstructed the debt maturities and calculated what different equity settlements could mean for existing shareholders.
We also revisited our earlier $24-per-share valuation and explained why it can no longer be treated as a reliable price target under the current financing uncertainty.
With the board now considering strategic alternatives, those calculations have become even more relevant.
The full investigation, including our valuation sensitivities and potential dilution scenarios, is available to paid subscribers.
Here:cundilldeepvalue.substack.co…
FRAGMENTS Value retweeted
𝗦𝗽𝗲𝗰𝗶𝗮𝗹 𝗦𝗶𝘁𝘂𝗮𝘁𝗶𝗼𝗻 — 𝗢𝗻𝗲𝗪𝗮𝘁𝗲𝗿 𝗠𝗮𝗿𝗶𝗻𝗲 $ONEW
𝗧𝗵𝗲 𝗕𝘂𝘆𝗲𝗿 𝗧𝗵𝗮𝘁 𝗖𝗼𝘂𝗹𝗱 𝗕𝗲 𝗕𝗼𝘂𝗴𝗵𝘁
𝗢𝗻𝗲𝗪𝗮𝘁𝗲𝗿 𝘁𝗿𝗮𝗱𝗲𝘀 𝗮𝗿𝗼𝘂𝗻𝗱 $𝟵.𝟱𝟬, 𝘃𝗮𝗹𝘂𝗶𝗻𝗴 𝗶𝘁𝘀 𝗲𝗻𝘁𝗶𝗿𝗲 𝗲𝗾𝘂𝗶𝘁𝘆 𝗮𝘁 𝗿𝗼𝘂𝗴𝗵𝗹𝘆 $𝟭𝟱𝟴 𝗺𝗶𝗹𝗹𝗶𝗼𝗻. 𝗜𝗻 𝗳𝗶𝘀𝗰𝗮𝗹 𝟮𝟬𝟮𝟮 𝗮𝗹𝗼𝗻𝗲, 𝘁𝗵𝗲 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝗿𝗲𝗰𝗼𝗿𝗱𝗲𝗱 $𝟰𝟵𝟮 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 𝗶𝗻 𝗮𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻 𝗰𝗼𝗻𝘀𝗶𝗱𝗲𝗿𝗮𝘁𝗶𝗼𝗻.
And here's something I find even more interesting. In 2024, OneWater was reportedly trying to buy MarineMax for $40 a share. MarineMax has since agreed to be acquired for $53 a share, while OneWater has started selling some of its own businesses.
So I wanted to know what somebody could realistically pay to acquire OneWater today.
There's approximately $352 million in corporate borrowing, another $405 million in inventory financing, and a substantial related-party arrangement involving Global Marine Finance. Anyone interested in buying the company would have to understand all of it.
𝗪𝗲 𝘄𝗲𝗻𝘁 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝘁𝗵𝗲 𝗮𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻𝘀, 𝘁𝗵𝗲 𝗿𝗲𝗺𝗮𝗶𝗻𝗶𝗻𝗴 𝗱𝗲𝗮𝗹𝗲𝗿𝘀𝗵𝗶𝗽𝘀, 𝗱𝗶𝘀𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀, 𝗰𝗮𝘀𝗵 𝗳𝗹𝗼𝘄, 𝗯𝗮𝗻𝗸 𝗮𝗴𝗿𝗲𝗲𝗺𝗲𝗻𝘁𝘀 𝗮𝗻𝗱 𝗱𝗲𝗯𝘁 𝗺𝗮𝘁𝘂𝗿𝗶𝘁𝗶𝗲𝘀.
Then we did the calculations ourselves.
What could the individual businesses be worth today? What can OneWater realistically earn as an independent company? What would an acquisition cost, and how much could shareholders actually receive?
𝗢𝘂𝗿 𝗙𝗥𝗔𝗚𝗠𝗘𝗡𝗧𝗦 𝗿𝗲𝗽𝗼𝗿𝘁 𝗶𝗻𝗰𝗹𝘂𝗱𝗲𝘀 𝟭𝟬 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝘁𝗮𝗯𝗹𝗲𝘀, 𝘁𝗵𝗿𝗲𝗲 𝗼𝗽𝗲𝗿𝗮𝘁𝗶𝗻𝗴 𝘀𝗰𝗲𝗻𝗮𝗿𝗶𝗼𝘀 𝗮𝗻𝗱 𝗼𝘂𝗿 𝗼𝘄𝗻 𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻𝘀 𝗽𝗲𝗿 𝘀𝗵𝗮𝗿𝗲.
If you're looking at ONEW as a deep value investment or a possible acquisition candidate, I think you'll appreciate how much there is to examine beyond its $158 million market capitalization.
𝗧𝗵𝗲 𝗳𝘂𝗹𝗹 𝗦𝗽𝗲𝗰𝗶𝗮𝗹 𝗦𝗶𝘁𝘂𝗮𝘁𝗶𝗼𝗻 𝗿𝗲𝗽𝗼𝗿𝘁 𝗶𝘀 𝗮𝘃𝗮𝗶𝗹𝗮𝗯𝗹𝗲 𝗼𝗻 𝗙𝗥𝗔𝗚𝗠𝗘𝗡𝗧𝗦.
Here:cundilldeepvalue.substack.co…
FRAGMENTS Value retweeted
𝗗𝗲𝗲𝗽 𝗩𝗮𝗹𝘂𝗲 𝗥𝗲𝗽𝗼𝗿𝘁 — 𝗖𝗹𝗲𝗮𝗿𝘄𝗮𝘁𝗲𝗿 𝗣𝗮𝗽𝗲𝗿 $CLW
Clearwater Paper trades at a substantial discount to its reported assets: 𝟭𝟯.𝟲𝟵 𝗱𝗼𝗹𝗹𝗮𝗿𝘀 𝗽𝗲𝗿 𝘀𝗵𝗮𝗿𝗲 in our report, against 𝟰𝟵.𝟮𝟬 𝗱𝗼𝗹𝗹𝗮𝗿𝘀 𝗼𝗳 𝗯𝗼𝗼𝗸 𝘃𝗮𝗹𝘂𝗲. The company owns three integrated paperboard mills supplying cups, food packaging and folding cartons.
Our Deep Value Report examines what an investor actually owns at that price. We value each mill separately, investigate its maintenance requirements and account for the debt, retirement obligations and other costs that affect shareholders’ recovery.
The full report includes 𝗼𝘂𝗿 𝗮𝘀𝘀𝗲𝘁 𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻𝘀, 𝗯𝗲𝗮𝗿/𝗯𝗮𝘀𝗲/𝗯𝘂𝗹𝗹 𝗿𝗮𝗻𝗴𝗲𝘀 𝗮𝗻𝗱 𝗽𝘂𝗿𝗰𝗵𝗮𝘀𝗲-𝗽𝗿𝗶𝗰𝗲 𝗮𝗻𝗮𝗹𝘆𝘀𝗶𝘀, supported by a reconstruction of the company’s operating economics. For investors considering CLW, it provides the work needed to assess whether the discount offers enough protection.
Here:cundilldeepvalue.substack.co…
