Independent Research, Food Delivery Space, Newmoon Capital

Newmoon Capital

Independent Research, Food Delivery Space

We look for owner-operators in what we believe are either highly defensible assets or soon to be highly defensible assets, trading at a fraction of their future potential.

Equity Bottom-Up

Owens & Minor, Inc. distributes medical/surgical supplies throughout the United States.  The Company's customers include hospitals, integrated healthcare systems, and group purchasing organizations.  Owens & Minor also provides services in supply chain management, logistics, and technology.

<ul><li>It looks to me that the company is now run-rating to $500M of EBITDA, but it is possible that it is much lower depending on how Q3 turn out.</li><li>It was very possible that things were fine for the first 2 months of Q3 and then got really bad thereafter and so the run-rate EBITDA is actually much lower…but let’s just use $500M as our base case</li><li>Capex in this business is really closer to Opex. Apria is really a leasing/distribution business and so Capex is needed to keep the business running.</li></ul>

It looks to me that the company is now run-rating to $500M of EBITDA, but it is possible that it is much lower depending on how Q3 turn out.It was very possible that things were fine for the first 2 months of Q3 and then got really bad thereafter and so the run-rate EBITDA is actually much lower…but let’s just use $500M as our base caseCapex in this business is really closer to Opex. Apria is really a leasing/distribution business and so Capex is needed to keep the business running.

Eastside Distilling, Inc. produces hand-crafted spirits in Southeast Portland. The Company also offers tours and tasting.

<ul><li>I believe EAST might be a 0, or basically 0, before the end of this year and equity holders (as well as preferred equity holders) are going to be wiped out.</li><li>Here is my analysis of the latest results. Please note that this is after my 3rd (but not last) whiskey shot so there is a chance this will just be a stream of disorganized consciousness</li><li>EAST has $2.6 million of cash as of March 31st, but that is after raising $2 million of working capital financing during the quarter offset by paying off $900K of the Live Oak debt facility.</li></ul>

I believe EAST might be a 0, or basically 0, before the end of this year and equity holders (as well as preferred equity holders) are going to be wiped out.Here is my analysis of the latest results. Please note that this is after my 3rd (but not last) whiskey shot so there is a chance this will just be a stream of disorganized consciousnessEAST has $2.6 million of cash as of March 31st, but that is after raising $2 million of working capital financing during the quarter offset by paying off $900K of the Live Oak debt facility.

Eastside distilling part 2: review Q1 results

<ul><li>Eastside Distilling looks like an attractive short at the current price given its uneconomical business model, negative growth, and current liquidity/solvency crisis</li><li>There are very identifiable catalysts over the next 6 months that can push the company into bankruptcy</li><li>There might also technical factors that adds selling pressure to the stock, further juicing the risk/reward</li></ul>

Eastside Distilling looks like an attractive short at the current price given its uneconomical business model, negative growth, and current liquidity/solvency crisisThere are very identifiable catalysts over the next 6 months that can push the company into bankruptcyThere might also technical factors that adds selling pressure to the stock, further juicing the risk/reward

<ul><li>Why: Profits in “Global Products” should decline over the next two years as it emerges from a period of over-earning in 2020 and 2021, resulting in a collapse in earnings and valuation</li><li>When: Should show evidence in 1Q/2Q2022 - once investors see that Global Products profit is shrinking and start applying a low-growth multiple to normalised earnings.</li><li>Factor Exposure: Value, Covid-beneficiary, negative earnings revision</li></ul>

Why: Profits in “Global Products” should decline over the next two years as it emerges from a period of over-earning in 2020 and 2021, resulting in a collapse in earnings and valuationWhen: Should show evidence in 1Q/2Q2022 - once investors see that Global Products profit is shrinking and start applying a low-growth multiple to normalised earnings.Factor Exposure: Value, Covid-beneficiary, negative earnings revision

Gores Holdings V, Inc. operates as a blank check company. The Company aims to acquire one and more businesses and assets, via a merger, capital stock exchange, asset acquisition, stock purchase, and reorganization.

Typically, I invest in businesses with a 5 years horizon, but sometimes I’d like to allocate a small part of my portfolio for what I call “special situations”. These are ideas that I think have potential for high returns short- term. To be very frank, this is a way to simply scratch my itch by researching something completely new to expand my circle of competence, and at the same time have the potential to be rewarded quickly, yet keeping the rest of my portfolio intact. Anyway, I think GRSV seems like a great potential target. (h/t @contralculator for bringing my attention to this). As with my other ideas, all feedback is appreciated, especially if you have some opinions and ideas on areas do let me know where I might have overlooked!

Typically, I invest in businesses with a 5 years horizon, but sometimes I’d like to allocate a small part of my portfolio for what I call “special situations”. These are ideas that I think have potential for high returns short- term. To be very frank, this is a way to simply scratch my itch by researching something completely new to expand my circle of competence, and at the same time have the potential to be rewarded quickly, yet keeping the rest of my portfolio intact. Anyway, I think GRSV seems like a great potential target. (h/t @contralculator for bringing my attention to this). As with my other ideas, all feedback is appreciated, especially if you have some opinions and ideas on areas do let me know where I might have overlooked!

[Special situation] Gores Holdings V warrants