Quick Ideas 1

Post-bankruptcy play

Interesting Ideas

TLNE (Talen Energy) $52 per share ($3bn market cap) 11/7/23

Nuclear power producer in US.

Cheap and because:

1.       Just emerged from bankruptcy - so new equity holders are incentivised to keep valuation low when setting stock options etc.

2.       Listed on OTC Pink market, which makes in inaccessible and illiquid

Catalysts:

1.       Up-listing to NASDAQ will likely happen creating liquidity

2.       Nuclear pricing improving. Currently has a floor in US with inflation reduction act policy

Reasons for pass:

·       It’s cheap but not that cheap

·       Large bankruptcy, so on a lot of peoples’ radars, so not exactly hidden

·       They have a crypto side of the business, which personally is a bit of red flag for management probably unfairly so

·       Dynamics on up-listing uncertain – if people are buying for up-listing catalyst then might get lots of sellers when up-list happens. Plus largest equity holder may want to trim position.

Summary: Cheap but not that cheap, too many eyeballs on it, up-listing catalyst might not be sure win with uncertain dynamics at play. Not a business I’d like to hold long-term.

H/T to Alluvial Capital for bringing it to my attention. He always has ideas worth checking out!

I’ll be publishing ideas more frequently. Including ideas that I’ve passed on. So follow for more:

Nothing here is financial advice. Do your own due diligence.