Theme of the Week
European Defense
While Americans like to talk about Europe as one nation, the continent has always been greatly divided. The cultural differences are vast. In the eyes of their neighbors, the Dutch are cheap and too direct, the Germans have no sense of humor, the French are arrogant, the Spaniards are lazy, the Italians are chaotic, the Brits just pretend to be polite before they stab you in the back, and the Swedes, Danes, and Norwegians have a century-long tradition of killing each other out of mutual respect.
The long history of conflict is evident in modern-day borders. Switzerland exists so that the Italians can’t place any artillery on the German border and vice versa. Belgium exists so that the Dutch and the French don’t have to share a border.
Student exchange programs taught Europeans that, despite their differences, they all share a love of beer and, strangely, a high tolerance for excessive taxes.
Kuppy’s Tweet of the Week
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Kliff Note of the Week
Spin Monitor: Adaptive Biotechnologies (ADPT) will separate its MRD and Immune Medicine businesses, focusing on MRD diagnostics while exploring strategic and structural options for Immune Medicine.
The separation is expected to move swiftly, with year‑end 2026 as the target. To support the move, Adaptive is also planning a $250m convertible‑notes offering to finance a bunch of stuff (capped‑call transactions, $25m buybacks, repayment of OrbiMed obligations, MRD growth initiatives).
Cluster Buying Monitor: ‘Digital native homeownerhip’ company (whatever that means) Better (BETR) continues to see VERY strong insider buying activity – and that despite quite the heavy SBC. Topline growth remains very strong, which should drive some serious operating leverage this year.
Post Bankruptcy Monitor: Office Properties Income Trust (OPI) emerged from Chapter 11 on Jun 17, and the new shares began trading on the Nasdaq Jun 18 under the same ticker.
The old common was wiped out, with 22 mil new shares now owned largely by ex-creditors who swapped debt for equity. Helix Partners (founder Jonathan Heller now Chairman) and Redwood Capital are among the largest holders. Debt cut by ~$714mil to ~$1.7b.
13D Monitor: After 6 years of losses, 3 CEOs, and a takeout offer that the BoD failed to disclose, Mill Pond Capital expresses its displeasure with Rayonier Advanced Materials (RYAM) in a letter to the board, urging them to sell.
It’s hard to underwrite the value of loss-making cellulose plants, but a buyer offered $11 to $12 per share back in November, versus today’s $9 share price.
Other Interesting ED Action: It might be a good time to flag Zegona Communications (ZEG LN) on the recent (small) drop on earnings, which we thought were actually pretty ok.
Perhaps the market was expecting an update on its capital allocation policy – which, as a reminder, is what most of the thesis has been about (along with debt reduction, refinancing potential, further asset monetization potential, billions in NOLs, a good chance of a takeover, etc.). CFO remains strong, and we will hear on the capital allocation policy.
Disclaimer. KEDM is provided for informative purposes only. No due diligence has (yet) been performed on the names on this list. The list might change strongly on a regular basis. This overview does not constitute advice; always do your own due diligence. For the full disclaimer, please go here.