GOOGL - Breaking Down Micron + Merger Opportunities With Chris DeMuth Jr.

Summary

• FOMC recap from a technical perspective; bullish/bearish calls.
• Breaking down Micron's stock.
• Chris DeMuth Jr. joins us to dive into merger arbitrages; Apple, Disney, and more!

Editors' Note: This is the transcript version of the show we recorded on Wednesday. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the show embedded above, if you need any clarification. Enjoy!

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Daniel Snyder: Let's get some vibes going. Here we go, welcome, welcome, welcome. Stock Market Live.

- We like the vibes. We like the vibes.

- Class is in session. Welcome, everybody, I see everybody's showing up. Few shout-outs to get this thing started. Alexander, Anna, Chris, Harry, James, everybody, thanks for joining us today. We got Scott, we got Rena in the house. Wendy, Mark, I see everybody showing up to hang out with us today. Christian Ringer is back. Christian, appreciate you showing up. Coming to the live recording. We love interacting with you guys. We have a special guest joining us today besides Austin Hankwitz , which you know is a special guest. He is on Seeking Alpha. If you don't follow him already, make sure you do.

But we will get to our special guest later in the show. It is Chris DeMuth Jr. who runs Sifting the World on Seeking Alpha. The guy is crazy when it comes to merger, and acquisitions, and arb trades. I mean, he really does his research, and we're gonna dive in with that with him later on all of that. But before we get too into overall market views and the stock that we're diving into this week, which was pitched to us last week by Dan, we'll get to it.

- Shout-out to Dan.

- Shout-out to Dan. And I'm just being told my mic is hot. Apologies if my mic is hot. There we go, let's turn it down a little bit. All right, so before we dive into the overall market view, let's do a little FOMC recap because we were obviously, last week, on here just saying we might see a rip to the upside if everything was, you know, gonna be more dovish. And obviously, it didn't play out that way, right? Did not go the way we wanted.

- It did not, it did not, man. And what was kinda interesting is, you know, I'm not over here saying I'm a day trader. I'm not, everyone knows that. I'm the most fundamental guy you'll ever meet, but I got so lucky with these call options and these put options, I was able to somehow jump in, jump out, and we moved into put options quickly after. But let's recap that, right? So the stock market took a really sharp dive last week following the Federal Reserve's decision to hike interest rates by 75 basis points. At his press conference, Federal Reserve Chairman Jerome Powell's pretty much signaled two main things to us.

I think the first one was monetary policy is gonna remain restrictive for a prolonged period of time or at least until inflation is completely under control. And the second thing he told us is a soft landing appears incredibly unlikely now for the economy and avoiding a recession might not be as easy as they originally thought. Daniel, I've kind of been talking about this to my community for a little bit here, and I'm excited to share some more thoughts later. But I think the idea of a soft landing, to begin with, was, you know, slim to none. The chances of that happening just didn't really make a lot of sense. And I even think I read somewhere, I could be wrong, but I mean to this inflation point, if we're able to keep inflation at nil, right, inflation just staying steady or coming down like, you know, things are, we're not going back up.

I mean, we're doing that for four, five, six months. The annual inflation rate's still at 4 1/2, 5 1/2%, so I mean, like, we need to really bring things down, dial things back into Q1, Q2 of next year to see any sort of impact, you know? So from a timeline perspective, I don't think this is going away anytime soon. I think monetary policy is gonna remain tight but really interested to get your feedback as well as the chat's feedback.

- Yeah, what you're saying exactly what Powell was telling us, right? We're gonna hike, we're gonna stay higher for longer. We're not gonna cut back, you know, like, you know, the Bank of England decided to do today with their announcement about buying the 30-year Gilts over there. I think, I mean, I'm expecting to see us raise interest rates, and then just plateau for a little bit, and wait for the effects to actually hit the economy, which we're starting to see, right?

DocuSign ( DOCU ) saying they're laying off 9% of their workforce this morning. I think that's going to continue. We have to see unemployment take up, the Fed wants to see unemployment take up. They gotta continue to pull liquidity out of the system, reduce the balance sheet, everything that everybody's heard time and time again. So we're not out of the weeds yet. Obviously, you, I mean, I don't know if you were watching earlier, but Stanley Druckenmiller was on CNBC's Discovering Alpha, Delivering Alpha, whatever they call that, just saying that he thinks the Dow's not gonna be back to these levels for like 10 years. Is it fear? Is that absurd? We'll find out, hopefully not.

- Oh gosh. The lost decade is back.

- Hopefully not, right? I mean, we don't want this to happen. We don't want to see people go through pain, but we have to find a stabilized equilibrium, which we have not done yet. So time will tell. But I do wanna, actually, I took a screenshot of this. So Josh, can we go ahead and throw up that first slide? You know, I'm on here all the time as we talk about looking at the charts. I talk about gaps, I talk about Fibonacci, and why these levels matter.

This was from FOMC day last week. I took it right at market close, as you can see. And obviously, the big red candle there that sticks out was the announcement, right? But I want you to see right to the next, right to the right of that, where did it bounce? It bounced off the top of the gap, which is something that happens typically, went all the way back up, touched the .618 Fibonacci level, and it sold right back up.

Now, I'm just saying this is what the chart showed. Is were we expecting to see this happen? I wasn't but it's something to keep in mind, of course. Then we went and filled the gap. Let's go ahead and move on to the next slide, Josh, 'cause we're gonna go ahead and talk about the overall market as well. Now, last week, I brought up the VIX, the volatility index, which of course, is over 30 now and it's something that people should keep an eye on. It doesn't tell you everything, but it helps you prepare for where we're going next. And this is DataTrek Research.

This is from Nick Colas, who I mentioned last week. He's phenomenal, like his data is spot on. So I saw this come across my Twitter feed actually. We either wanna see the CBOE VIX Index hit +36 or trade above 30 for a straight week before thinking there is a tradable slash investible rally coming, which is definitely something that I'm keeping an eye on. So let me go ahead and jump in here. I'm gonna go, Josh, go ahead and take that slide off for me. I wanna dive into the charts.

- I'm right there with you, man. I mean you kinda pulled up a chart going back to, you know, the late '80s, early '90s of the VIX. And now, this isn't, you know, you were talking about these tradable rallies, but I would say, you know, we're not gonna see, at least historically speaking, any sort of market bottom until the VIX has spiked above sort of this 40 to 45 level, right? I think we're looking at the same chart here. Yeah, we definitely are.

- [Daniel] Yeah.

- And every time, you know, we see some of these, you know, we had the dot-com bubble, the 2008 Great Financial Crash, the market corrections we had sort of in the 2010s, and these market corrections in the '90s, every single time, we saw a market bottom, this was when the VIX had hit this 40 to 45 level. So, as you know, for those long-term investors hoping to time the bottom, if that's even possible, definitely keep an eye on the VIX for sure.

- Yeah, this is what helps us recognize capitulation, right? Which is what everybody's saying, saying, "We wanna see capitulation." The VIX will help us recognize when that happens. So obviously, you know, we looked at the VIX last week, we're looking at it again today. Of course, it's shot up after FOMC meeting, and we've been talking about it. Of course, it's dropping today. The overall market is finding a little bit of support, which is, you know, well, is it, is it, right? That's the question right now. So let's go ahead and look at the SPDRs.

So [[SPY]] ETF, that's how we look at the S&P 500. Of course, there's other ETFs as well if you're investing, and I always recommend the VOO, lower expense ratio. And I left some of these gaps on, right? So of course, the gap filled here. So I'm gonna go ahead and remove this one. And then a gap fill from way back in June down here has been filled. Now we got gaps just above the market. So that's something that I'm keeping that for, okay, possible levels for either a pullback, right? Or if we go and fill the gap, then maybe the pullback level would be here. Usually when the gap fills, it does change direction. It's 80% of the time.

Put statistics on your side. Of course, we had the moving averages in a significant downtrend. Looking over at the Qs, so I wanna zoom out real quick, right? When we say when in doubt, zoom out. So I'm coming back, why? What is this line here? The trend line. So I went back, and I drew these off of the monthly of where it used to be resistance. We find this resistance level, this resistance level that finally broke through during COVID.

Now we're coming back, it's acting as a little bit of support right here. Now the question is, is will that hold? Obviously, we know, we talked about midterm elections coming up. We talked about, you know, tech sector gets hit by the rates changing 'cause they need liquidity, and they're the ones going through the layoffs, right? Watch the tech sector for that.

Obviously, there's a gap by the market. There was a small gap right here, but that has since filled. So you can actually remove that if you want. Just keeping an eye on the levels. Obviously, finding support on that trend line, that's something that I'll be watching in the coming days and weeks ahead. And then finally, IWM, looking at the small caps, there is still a gap below the market down here. Just wanna highlight that to everybody. And it looks like they're hitting some resistance, right? They're at the gap. So something to keep an eye on as well. Now why do I point out the gaps, why? I mean, we talking about this.

I was talking to Mike Saul the other day actually, and we were like, "Okay, well, you know, make sure you know your exit before you ever enter a trade, right?" And I think that was something that he was talking to me about because he put on a trade, and he was like, "Oh man, if I would've held on," I'm like, yes, if you would've held on, you could've made X, Y, Z more, or it could have gone the other way.

But if you have your target, if you prepare, if you know what your thesis is, and this is great for when we talk to Chris, because this is what he's all about. He goes, "Hey, this is my target. I recommend selling at this point. I'm buying now because of X, Y, Z. Whether it's, you know, Twitter and Elon, which we can talk about. He has activist investors. I mean, there's so much to dive into him, with him. So we'll get to that here soon. But we just wanted to highlight that, take an overall look at the market and get, bring those levels to you. Now, this is fun. I like this next segment. This next segment we introduced last week.

- It's a favorite.

- Seems to be a smashing hit. It's a smash hit right from the top. So it is your favorite segment, Initial Thoughts. Let's get into it. Austin, you wanna go first or you want me?

- Oh, I'll go first. No, I'll kick things off.

- All right.

- So Daniel, I gotta know, bullish or bearish, right? Here we go, first question, are you bullish or bearish on Apple's ( AAPL ) iPhone 14?

- Extremely bullish.

- Yeah?

- And I'll tell you why. Extremely bullish because I think what they're doing is there's a lot of hype coming. I'm thinking forward, right? A lot of hype coming about how they're going to move into augmented reality with the glasses. I think the iPhone 14, iPhone potentially 13 as well and beyond, might be the device to help power the glasses. So I think because they're building their own chips and they're designing these cameras and this processing computer in your pocket to help power the watch, and power the AirPods, and power everything else, I mean, extremely bullish.

- Okay.

- Challenging computers. So interesting enough, I saw just earlier, I wish I had saved the article, if you were to create an iPhone back in 1991, they're saying to get the supplies to create it would've cost you like $101 million based off of like what gigabyte storage and everything was back then? Just thought it was really interesting.

- Wow.

- Obviously, it's why it wasn't, but of many other reasons. But yeah, extremely bullish.

- Well, that reminds me. I think I saw a statistic back to, like, kinda like rewind there. I saw a statistic that said the iPhone 4 had more computing power than NASA did when we put a man on the moon, right? Isn't that just like crazy to put in perspective? Like we're able to do stuff like that, and now we have these iPhone 4s, which are, you know, mind you, probably 2% of the computing power that we have today in our iPhone 14s. But it's just wild. So I'm actually surprised you said bullish. I was thinking you would say bearish because the news that was on around the pre-orders and people are just, the demand wasn't there. I think I saw some headlines of people, just the demand for the iPhone 14 wasn't there. So really interesting perspective. I didn't think about the augmented reality side of things. So next question.

- I think it's going to power-

- Yep, all right, Daniel, bullish or bearish? Here we go, record high number of people in Congress over the age of 70 just hit a record high, 23%.

- Oh, so bearish.

- Yeah.

- So bearish, I mean, this is my own personal view. Let's not get political on the show and everything. But my political view is at some point, that doesn't accurately represent the people anymore, like a democracy should.

- 100%.

- And there might need to be some age limits in the future.

- See, I was in the same stance, right? It was kind of funny, I saw this on, I think the website's called Charter. They're like a cool newsletter that they illustrate really interesting data points. And I was looking this up, I was like, "There's no way." That, I mean, 20, like that's, you know, one in four people in Congress are over 70. It's like, you know, my dad is 77, and you know what my dad did last year? He learned about Amazon ( AMZN ), right? And so it's like if my dad's 77, and he's just now learning about Amazon, and like Prime Shipping, and stuff, and they're people who are, you know, also in that age cohort, even in their 80s. Maybe they're sharp as a tack, right? Maybe they're just awesome.

But on the same token, it's like, I kinda feel like that's not the best representation to your point, Daniel, of the broader, you know, just age cohort in the United States. So yeah, also bearish on that one. Last one here for you. And this one actually is something that I'm excited to learn more about, but I wanna get your take of course. So Daniel, are you bullish or bearish on Tesla's Optimus robot?

- This is great, so actually I'll change on that, so that was one of mine for you.

- Okay, cool.

- I'm so bullish on the Optimus. So for people that don't know, Tesla AI Day's on Friday, I think it's Friday, right?

- Yeah, I think so.

- And they're showcasing, I think there's a lot of buzz around it, their robot, the final design called the Optimus. I'm bullish because I think, I think they can pull it off like-

- Me too.

- I think there's a team.

- I really think they can.

- A team around Elon, like Elon, I would say is like our modern Steve Jobs, our modern, maybe not Einstein. Einstein was more, you know, science of, you know, E equals mc squared. But definitely when it comes to technology and you know, Elon was so ingrained in AI, the OpenAI community for a long time. I think they would be the ones of anybody to be able to actually pull this off within a reason of still caring about humanity, you know. 'Cause we obviously don't want "I, Robot" to happen. I mean, we don't have, you know, what's Will Smith gonna do? Slap a robot? Sorry, too far. Nah, I mean, come on, like seriously, like-

- Yeah.

- Robots are going to be the next age. We talk about, you know, Bronze Age, Stone Age, technology age, I think robots are the next age. It's gonna boost our productivity. It's going to solve a ton of problems for us. And if we can incorporate this into businesses, and healthcare, and everything, I mean, where's the limit, you know?

- I'm right there with you. And I think to the point of Tesla being this company that's gonna be the one to actually do it. I mean, you think about, you know, we heard like, oh, self-driving cars, you think like Waymo or a random startup that was obviously turned into what Google's ( GOOG ) ( GOOGL ) turning into and things of that nature. But like we hear these crazy outlandish ideas and these big, you know, excited startup founders wanna do it, but then you have to go raise all the money, then it's gonna take a lot of time to hire. It's like, no, Tesla's got the money, they've got the cash flow, they've got the profits, they've got the team already. It's like, let's just divide out a, you know, a cohort of people who are gonna work on this day in and day out for three years and figure it out. And I think that they've got the resources, they've got the leadership, they've got all that fun stuff, all the technology to move it forward. I'm excited, I think that it's going to be game-changer. I don't know what the timeline's gonna look like. I don't know how well it's gonna be adopted. I don't know like what the price point is. I'm sure all that, you know, comes into factor. But as someone who's watching from the sidelines is I don't really need a robot to help me with things. But it'd be really cool to interact with one, one day, at a cool company. So yeah, I'm definitely bullish on the Optimus robot as well.

- Yeah, and everybody watching, I mean we see you all here with us. Thanks for hanging out with us today. Let us know in the chat right now, are you bullish or bearish on Tesla's ( TSLA ) AI Day? Go ahead and let us know. Now, Austin, let's break it down, bullish or bearish? I don't know if you read this, I think it's pretty cool. So Chipotle ( CMG ) has been testing an autonomous cooking assistant using AI and machine learning to monitor ingredient levels in real time, notifying their crew how much to prep, cook, and when to start cooking. Bullish or bearish? Is this the future of fast food?

- Yes, I would say it is, absolutely, right? So when I think back about fast food, I think about that movie that was on Netflix about McDonald's and how they were able to scale McDonald's ( MCD ) to this incredible empire because of how efficient they were. It's like, you gotta stand here and flip this burger while this guy is here and he's moving. It's like, I feel like fast food is like a very calculated process that we might take for granted 'cause we're just in the drive-through.

But if Chipotle, I don't know how many of you guys eat Chipotle, I eat there maybe a couple times a month, but I'm standing there in line, not gonna lie, for a little bit, right? They're getting it all figured out. Maybe will say, "Hey, we're out a guacamole." You know what I'm saying? So I think that's interesting. I love that idea, I think if it works, it's gonna be licensed and given out to all the other different places. I'd love to see something like that at McDonald's on Broadway. It takes me forever to get a cheeseburger over there on a Saturday night. But yeah, I'm bullish on that idea for sure.

- All right, next up. So in regards to Tesla, since you already covered AI Day, news came out, they're expected to post a big Q3 delivery number with estimates ranging to as high as 370,000 units, which would absolutely smash their prior quarterly record of 310,000 units set in Q1 of 2020. Bullish or bearish?

- I'm bullish, and I'll tell you why. I think that there are a lot of people, despite everything we're seeing in the economy, right, despite we're seeing layoffs, we're seeing even white-collar layoffs, right? We're seeing all these, you know, economic uncertainty, despite a lot of that, I still think that there's a lot of people who say, "Yeah, I can afford this, and I deserve this." Or, "Yeah, I was able to, you know, get promoted during COVID over the last two years. So now I have more flexibility with this." Or, "Hey, I was able to just refinance my mortgage and so my monthly payment on that slowing, I'm gonna like move that over into maybe a car payment.

I've seen, personally, three to four my friends over the last, call it six to eight weeks, buy Teslas and have them delivered, right? And to me it's like, first off, wow, why would, like, the thing about that four years ago, I knew no one with a Tesla. Maybe I was, you know, in a big city, and I saw someone really rich have a Tesla. But now it's like these Model 3s and these Model Ys, a lot more people in my age cohort of, like, in the 20s and 30s are beginning to say, "Yeah, like, I can do this, this makes sense for me."

I think it makes total sense. I don't think that, okay, sure, there's gonna be some macroeconomic uncertainty that might impact Tesla's deliveries and the demand for that. But I also think that people who they're selling to have a little bit of, you know, resistance around that. They're very predictable financial situations. They have their salaries. They work in very, you know, long-standing jobs and industries. So I would say bullish, and I'm excited to see what that translates into from a stock price perspective as well.

- Yeah, I'd say bullish as well on that. All right, and lastly, without further ado, instead of Tesla AI Day, I'm gonna have you take Taiwan Semiconductor as the stock between the two of these. So this news just came out an hour ago or so, and Chris over here at Seeking Alpha wrote it and published it on the site. So Taiwan Semiconductor actually, it's being reported, they haven't responded to any request for comment yet, Taiwan Semi, who is arguably the biggest semiconductor foundry in the world, right?

- Sure, sure.

- We all know that, and they're leading in technology of going down to three nanometer chips coming up. So Apple has been reported as being one of their biggest clients, right? Securing contracts for years on end into the future. Taiwan Semi turned around to Apple and said, "Hey, we want to raise our prices by 3%." And Apple said, "Yeah, no." So bullish or bearish for Taiwan Semi?

- I'm gonna say bearish because I think if you're, yeah, so whenever I'm thinking about a company, right? And again, I'm no expert in Taiwan Semiconductors, but from just like my perspective, I'm thinking about a company, I've got some big clients, some small clients, diversified revenue streams, and my largest client is a rockstar client. They're always paying me on time. They got the money, everything's great, the demand's coming in, we're supplying 'em good stuff.

And we have fixed costs that what I'm assuming are increases, right? We saw the index for inflation for producers and manufacturers that, you know, that's been increasing. Same thing with just the CPI in general, right? So I know, like, I guess I'm saying is I'd imagine their margins are shrinking because of inflation, and they're trying to pass it on to Apple, and Apple's saying no. To me, that's just like not good news for Taiwan, right? I feel like Taiwan Semi is just kinda stuck between a rock and a hard place at that point.

- All right, there you go. That's the take, everyone. That is your initial thoughts today. Obviously, so we have Sammy in the chat saying he is bearish on Tesla and Stephanie says bullish on Tesla in classic fashion.

- Sammy and Stephanie on on either sides of the aisle.

- Two sides make a market. Right now, let's just go ahead and dive into the next segment. We're gonna get into the stock that was pitched to us last week. So I'm gonna go ahead and give off some clues. I wanna see everybody here with us today, if you can guess what this stock is before we dive into it. And we'll give you the answer here in just a second.

So to guess the stock, this company was founded in 1978 and is based outta Boise, Idaho in the United States. It IPO-ed in 1984 and joined the New York Stock Exchange in 1990. They employ 45,000 people and the stock price has been cut in half this year. On August 9th of this year, management pre-announced they expect a disappointing Q4 and Q1 for this company's revenue goals, even saying that free cash flow will be negative in Q1 of 2023.

We've got some guesses coming in the chat. What do we think? This company announces earnings on Thursday, tomorrow, and the CEO shared with Reuters earlier this month that they are planning to break ground on its newly-announced $15 billion factory in Idaho, which will be operational in 2025 with another plant planned for the US in the future. The main products this company produces focuses on retrieving data amounts at extremely high speeds, and their competitors are Samsung ( SSNLF ) and SK Hynix, which is the second largest memory chip maker. So obviously, Christian says HP, Norman says Micron, Jorge says Micron. It is Micron, well done, everyone. Well done, well done, well done. All right, so.

- Good stuffs. That was insane, I think Jorge over here, I don't, I'm not saying Jorge cheated, but this guy is like, he was on it, I think you said Idaho. He's like, "Oh, Micron ( MU ), that's it. That's the one, I know it." It's insane.

- Not many companies, you know, hang out in Idaho, you know what I mean? So let's get your take. What do you got going on? What's the analysis from Mr. Austin Hankwitz about Micron?

- Let's check it out. So, you know, Micron Technology is a $55 billion semiconductor company that designs, manufactures, and sells memory storage products worldwide. They operate through four main business segments: compute and networking, mobile, storage, and embedded. And they sell their products to six different buckets of customers: client, cloud server, enterprise, graphics, networking, and 3D XPoint. They're all pretty self-explanatory if you kinda think through them, right? Enterprise, cloud, it makes a lot of sense. But that client one kinda threw me off. So you can think about this as people who are purchasing their products to manufacture PCs and other digital work-from-home products.

So those are the segments, those are who they sell to. Let's talk more in-depth now as to the specific segments, and so we can better understand like the product lines and really how they make their money. And then we'll get into the financials. So that first business segment, their compute and networking business segment, right? That includes memory products and solutions sold to client, cloud server, enterprise, graphics, and networking markets.

The main product line being sold is their D-R-A-M semiconductor, which is dynamic random access memory provides high-speed data retrieval like Daniel was saying here, you can find these semis inside of Chromebooks, and other notebook PCs, and even a couple of automobiles. Their mobile business segment is also pretty straightforward selling memory products that end up specifically inside of smartphones and other mobile devices. The business line here includes those D-R-A-M semis I mentioned before but also universal flash storage N-A-N, I'm sorry, N-A-N-D, NAND, products that are typically used in these solid state drives. Storage on your phone, it's very, you know, that's the business segment, storage on your phone.

Now, keeping up with the storage segment, we've got primarily SSD component-level solutions and SSDs are sold to enterprises, cloud, client, consumer storage markets, all that fun stuff. That's also pretty straightforward, but the last one here is their embedded business segment. And you can think about this business segment as sort of all the different types of product lines that are specifically embedded into things like automobiles, the internet of things, and industrial equipment.

So this includes the D-R-A-M, the N-A-N-D, and memory-first semiconductors enabling edge devices to store, connect, and transform information. So you get the business, you know who they're selling to, you know their products, you know the segments, all that fun stuff. Let's talk about those financials, the fun stuff, the sexy stuff. How is the company making money?

So throughout 2021, the company generated $27.7 billion in revenue with about 40% gross profit margins, resulting in about 13.9 billion in adjusted EBITDA and about 7 billion in profits. Year-to-date here in 2022, the company has generated 24.1 billion in revenue with another 6.7 billion expected to be reported during their next earnings call, bringing their 2022 total revenue to about 30.8 billion. So maybe 31 billion or so, give or take, which is an increase of 11% over that 2021 revenue, right? So 2022 is moving in the right direction.

Gross profit margins on that almost 31 billion in revenue should come in around 45%. So even above then those margins last year, 40% resulting in 17 billion in adjusted EBITDA and about 9.3 billion in profits. Profits are climbing faster than revenue, up 33% in 2022 versus revenue only increasing 11% here in 2022. So that's a good thing. But will this momentum continue into 2023? That's the good question. So reasons to get excited, reasons to stay on the sidelines.

I'm not gonna lie to you, Daniel, I tried really, really hard to find those good reasons to get excited about this company. I've got one, right? They've emerged as the clear winner in the D-R-A-M industry, right? They've got the good financial footing, they're investing in infrastructure, new technology, stuff like that. They're gonna cut capital expenditures next year. So maybe that might look like some more, you know, free cash flow.

But to your point, it's like, you know, next year's gonna be a hard one. So now kinda flipping to the reasons to stay on the sidelines, I've got a couple. The first one is sales cycles. So with sales cycles, you know, I think that there's a lot of close substitutes for their D-R-A-M and N-A-N-D products with faster lead times and very competitive pricing, which means the up cycles are great, right? They're seeing that, that momentum, the revenue's coming in, but the down cycles should also be accounted for.

We saw this in 2019, we saw this a little bit in 2020. I mean it's a commodity-like product, so which should be treated like one. We also have slowing economic conditions, and they've already begun to contribute to a shortfall in memory demand this year. Soft landing isn't likely, which is probably gonna put more pressure on their profitability.

Micron has also, like you mentioned before, already lowered their guidance for the year, acknowledging this worsening demand environment. And even the company's CFO noted limited visibility. And this was a couple weeks ago in a conference. He says, "You know, we got limited visibility over inventory adjustments and reiterated the company's view of a couple quarter long correction even as the industry approaches a seasonally strong period. Demand weakness in the PC and smartphone markets are likely to persist, remain through the year." And all in all, I'm just kinda not not too pumped, right?

- Not really.

- I read this, I see this stuff, and I'm just like, "You know what? I understand, you know, semis, all these great things," but I'm just not seeing it right now with this company. Especially with a lot of their revenue coming from other companies reinvesting back into their businesses, right? Like "Hey, this is gonna be a reinvestment year of getting new infrastructure, and other variable inputs, and consumerism is just like, I don't know, it just doesn't make a lot of sense to me. Love to get your feedback, love to get your thoughts, so.

- Yeah, that's a great rundown. I mean this might be a classic case of demand pulled forward, right? I mean like you're talking about the forward projections and everything. So I thought the interesting thing from my standpoint is, you know, the forward PE is under six times, something to keep an eye on, but I dove into a contributor here, Joe Albano, author of Tech Cache on Seeking Alpha. The article came out yesterday, highly recommend everybody go check it out. His big argument was that Micron's price to book value is below its five year average.

- I did see that.

- So he would recommend starting to scale into a position, but personally, you know, my opinion, just my opinion, not investment advice, is I would wait like Austin's kinda saying. I think there's gonna be a more attractive level to start a position in with this company in the future. He also notes using price to book is outdated. Yeah, we know that since the market uses it to denote what the company's worth if it goes bankrupt.

The problem with that is Micron has $10 billion in cash on the balance sheet and only $7 billion in debt. So it's not going bankrupt. Unless they do something completely, horribly wrong. In Q3, the company's book value is around 49 billion. And of course, we'll find out tomorrow if they continue to grow their assets. This is an asset-heavy business. I mean you look at the balance sheet and the assets are just through the roof, over the liabilities. The company started paying a dividend, which is kinda weird to me.

I mean, they stopped the dividend back in, I think it was 1996. The dividend's 10 cents a share. So it's not like it's gonna make you rich overnight. But I think that's something that they might consider cutting over the next few years as we're going through this, you know, potential economic hardship. So keep that in mind.

I wanna go off the chart real quick. Let me go ahead and pull it up just to show you guys what we're looking at. So I'm gonna start actually on the month of the max monthly. So what are all these white hyphenated lines here across the way? It's just support and resistance zones. This big spike back here is the dot-com bubble. Now this is crazy to me that it reached 97 1/2 back in dot-com, and here we are, literally how many years later? Imagine if you bought the top in this chart.

- [Austin] I was gonna say, imagine-

- And you decided to hold it the entire time, and you finally got an opportunity in January of this year to finally sell break even. I mean this is why it's like you gotta know when to cut your losses. But anyways, so looking at the chart, obviously, we were coming down, we're breaking through this support level right here. I'm gonna go into the daily chart and get a better idea. Tons of gaps above the market.

Do I think we're gonna get back up and fill those? Honestly, I think these are all gap-and-go scenarios. Obviously, getting a little bit of balance today, the overall market is 'cause Bank of England added more liquidity. So if anything you see the pre-announcement, that's when it happened.

This massive gap down back here on August 9th is when they came out and said, "Hey, we expect revenue to be less in Q4 and Q1 of next year." And of course, you know, this stock hasn't found its bottom yet, I don't think. You might see something temporarily, but for the meantime, it's not looking like something that I would wanna enter at this moment in time. There is just lower lows, I wanna see a higher low, I wanna see some establishment. If I go back to the weekly chart here, you know, next support might be down here around 43. Underneath that, you could be looking at, what is that? 32, that's just the technical standpoint. Obviously, technicals with fundamentals help you prepare, I think, a lot better. I like to look at the fundamentals of the company-

- I agree.

- Like you broke down. So I do like this company potentially as a long-term investment for the right price. And I'll tell you why. It's because of everything that we've been talking about, AI, 5G, internet of things, autonomous driving, potentially Tesla's AI robot, I mean all of these technological advancements are going to need memory chips. And did you know Micron is one of the few companies in the world that actually owns over 50,000 patents. 50,000 patents.

- 50,000?

- Which hopefully, they can turn around, and set up some license agreements, and get some significant revenue off of that. I mean, this company has innovation ingrained in its culture. So that's something that I always look for. Apple was innovative, HP was innovative. Every big company has been innovative, and if you can hold onto that, eventually, you're gonna get a breakthrough somewhere.

- Right, right, right.

- At least we hope. So some things to keep in mind, I mean, is this company going away tomorrow? Definitely not, we're gonna need a ton of memory, especially since they're innovating in the memory space. I think there could be a bright future ahead, but if I can wait now and get a better entry, then I'm probably going to, and that's my take.

- Yeah, I'm right there with you. And I think what's interesting about this one specifically, right? It's like, you know, they had a good 2021, a good 2022 looks like it's moving forward pretty well, and it just comes down to the 2023, right? So if you can look past that 2023, and you're thinking I want 2027, I wanna think about 2031, right?

That's your mentality, dollar cost average seems like a great, you know, secular growth trend that this company's operating inside of, good stuff. But to your point too of the technicals, there's a lot of volatility around that. And yeah, I think pairing fundamentals with technicals is the way to do it.

- Yeah and to wrap this up real quick, Josh, let's go ahead and throw up the slides. We're just gonna run through this real quick. Make sure you guys know the Seeking Alpha ratings. The Seeking Alpha authors have a buy on the stock. Wall Street analysts are a buy, and the quant system is currently a hold. Let's go to the next slide. The Factor Grades are breaking down, valuation at B+, growth at a C, profitability A+, momentum is a C, and revisions are a D-. Obviously, there have been, I think it was 26 down revisions when they did the pre-announcement, makes complete sense. Next slide for me, Josh. I'm looking at valuation down here towards the bottom, you can see price to book.

This is obviously what our Seeking Alpha author, Joe Albano , was referring to when he was talking about, you can see there, the 1.13, 1.12. If you look at the forward look of price to book, it's obviously under that 1.625 year average that he was arguing.

And then last slide, Josh, for me. This is the Wall Street analyst breakdown on the stock. 20 are strong buy, 8 have a buy, 6 have a hold. I mean, this has been a stock that Wall Street has just loved forever obviously. You see the three-year chart right there. I mean, they've been bullish on the stock the entire time. So go ahead and take that off for me, Josh. Let's get into what we've all been waiting for.

Chris DeMuth Jr. who has been patiently waiting for us to bring him on screen. Chris, why don't you go ahead and join us? We have so many questions. Everyone say hi to Chris, this guy is a legend. If you haven't heard of him, now you have. He focuses on arb, and merger, and acquisitions like I was talking about. We have so much to talk about because he has been breaking down some great opportunities in the market right now. Chris, thanks for joining us today.

- Daniel, it's good to be here.

- So let's take a quick second, give a brief introduction of who you are and Sifting the World on Seeking Alpha.

- My name is Chris DeMuth. I'm portfolio manager, founder of Rangeley Capital. We're an event-driven hedge fund in Connecticut. I focus on value investing but in the context of some particular transactions. So M&A, spinoffs, merger securities, litigation, some kind of process where we can be right or wrong about an event timeline of special situations, distressed, anytime we can underpay for something that we can analyze and participate as much or as little as is helpful to realize value.

- Amazing

- So that's Rangeley. And then when I'm done, you know, we size our positions with thought and care. And once we've sized our positions, then Sifting the World is the community of kind of like-minded long-term value investors interested in this kinda thing. And so we discuss things that we're doing anyways there, put my best ideas first in Sifting the World. And then more recently, they just kinda spun off a little newsletter that kind of has a more bare-bones version of those ideas.

- Which is amazing. And obviously, I've been reading it. But I wanted to highlight, let's talk about activists investing.

- Sure.

- Because you've been publishing some articles lately. I'll go ahead and bring up this one that I have on hand about Disney ( DIS ). And can you kinda just walk our viewers through, what's the argument here? What's going on with Disney? What is this activist investor doing? What is the potential thesis here that you see?

- Sure, there's kind of two parts to it, and they're both ideas everyone had thought about. So I'm really kind of enthusiastic about somebody picking up this fight. First of all, I have a little bit of, I use the term, and occasionally, described is the term, but I have a little bit of reticence on the phrase "activists". Only in that we are the owners of the equity. It's our, in aggregate, company. And so to say you're activist would be like saying your activist towards your house, or your dog, or your truck, or something, it's yours.

So it should be the default that investors have a say in how things are run. In good times, we have a lot of deference to management and are kind of on the sideline, we're just cheerleaders, but getting involved as much or as little as necessary. And so we, from time to time, are dealing with what is normally the agency problem is normally the difference in incentives between insiders and owners. They can be less enthusiastic to take a high bid and sell when it's the right time to sell.

And they can be more enthusiastic to kind of build empires in a way that might accumulate value but not add to value per share. We're pretty sensitive about the value per share because we own the shares. And so that, sometimes you're blessed with a management team where there is no daylight between the two. Often such management teams are teams where they own a lot of shares themselves, and we have some like that. And we take their calls, they take ours, and we're largely just kind of cheering them on and offering ideas if they care. And then sometimes you have the opposite.

Sometimes you just have horrible management teams that are just collecting salaries, don't own much, don't care about the shares. So in this case, you have a very kind of new type, something that I think is really incredibly fascinating, why I wrote three different articles and three different companies about it.

If you're on Seeking Alpha, you can find respectively, Disney, Apple, and Chevron ( CVX ). But Strive Asset Management is a new firm, and they are in the business of managing capital, but they're explicitly in the business of managing capital for the benefit of the shareholders, which if you kind of, a hundred years ago or 50 years ago, said they were gonna manage it for shareholders, who else would you manage it for?

But there's this kind of faddish idea that you take somebody's money, and while you're in charge of it, you use it for unrelated political gains or unrelated benefit to other parties. They slipped in the phrase "stakeholder". Sounds kind of like shareholder, but it basically means taking your money and somebody else's politics. Now, the people who have these other politics also have their own money. In the cases of executives, these are people who you can look up, often make millions or tens of millions, or in some cases, hundreds of millions of dollars a year. Some or all of it they could spend on their own political agendas if this was important to them.

Sometimes those agendas are the ones I agree with or not. But unless it was the coincidence that it was my top charity pick, it wouldn't be something I do. And in no case, do I wanna do it with my LP's money. So this kind of comingling these different unrelated politics here, capital there is very related to the topic of whose shares are they and for whose benefits should they be managed.

And so Strive's idea is that one, politics is totally separate topic from corporate life and from investing life. And two, investment managers are there to enrich their investors. Some of the biggest firms, some of the biggest competitors, and they, and I will name names, BlackRock ( BLK ), for one, is highly political. They have a political agenda that you can agree with or disagree. The substance of that agenda isn't terribly important to me and it is unimportant to me, whether or not what the CEO of BlackRock's politics are as the PM of Rangeley Capital.

So setting aside the substance of it, it's a politically-charged message, in many cases, antithetical to the corporate purpose of the companies they invest in. And they use their position because they have a vote even in their passive funds to push a political agenda in favor of race-based hiring at Disney, in favor of climate privacy at Chevron, running an oil and gas company that digs for petrochemicals to limit the impact of petrochemicals.

The two at Disney, they have these plans that are not what their investors necessarily want based on the popularity. These tend to be kinda niche issues. Again, I've nothing against somebody having niche politics, but it's not what these corporations are for, it's not what the investment managements are for, and it is kind of adverse to the interest and adverse to the average view. I'm sure they represent some of 'em but not all of 'em of their investors. And so Strive is this new group pushing back in saying you should run these companies for maximizing shareholder value and so should we, we should leave politics out of it.

- Man, I couldn't agree with that more. What about you, Austin? What do you think?

- Yeah, I'm all here for the stock price going up, right? So Chris, I don't know if you're very familiar with the type of content that I make, but I'm a TikToker, right? I make videos, and I post them very short form, and I try to make them as educational as possible because I know a lot of people that are watching that might not better under, you know, might not understand the stock market investing a lot. So with that being said, how would you describe, you know, arbitrage trading and sort of your trading and investment style to someone who might not really understand what's going on behind the scenes?

- Sure.

- So a good example, I guess, for this would be iRobot, right? I read your article about Amazon acquiring iRobot and how that is like a 5 or 6% sort of arbitrage spread there. How would you really under, you know, kinda describe that to someone that might not really understand?

- Any arbitrage is trying to capture the difference in pricing ideally simultaneously between different markets. So there were purer versions of this that were kind of readily available to humans a hundred years ago. And then as things get kind of arbitrage kills arbitrage. As it gets arbitraged away, it tends to move from humans to computers and from kind of leisurely paces to tiny fractions of a second. So a pure real arbitrage is the simultaneous capture of price differences in different markets.

Merger arbitrage orders, people who speculate on deals have kind of for marketing purposes broadened this term a bit, and we use it more cavalierly to describe speculating on deals between the market price and the deal price. So different types of deals. A tender offer might take 45 days, a deal with a complicated regulatory process could even take a few years between the time a deal's announced, kind of it is the speculating on the difference between the bird in hand and bird in the bush between the market price and the deal price. So the types of things we tend to think about include regulatory risk, include financing risk, especially in a rising rate environment.

And so somebody's offered something, and it is thinking about whether or not you're gonna get it. The difference, the spread is the money you can make if it happens. So right now, you know we're dealing with a difficult credit environment that's much worse than banks thought they would be in six months ago. So older deals, that's extremely dicey, because they're taking big hits on their financing commitments. Newer deals, you kinda have this data point if something was announced in the last month, say, that they're willing to go forward with these deals in a tough environment 'cause they announced 'em in a tough environment. So those more recent deals, I think, are the ones that I'm kind of focused on there.

And then on the regulatory side, we're really focused on a government in the US that is very aggressive on antitrust right now, especially against big tech companies. And so unless there's a very widespread or unless they already have gone to court to suit a block, I'm kind of pretty cautious on sizing and exposure to those deals right now.

- Got it.

- Chris, can I jump in right here? 'Cause this is you're talking about big tech and regulation-

- Sure.

- And everything, and I can't help but think about the Microsoft ( MSFT )-Activision Blizzard ( ATVI ) deal.

- Yeah.

- Which it was announced forever ago and I'm pretty sure isn't it Berkshire that's been buying up Activision Blizzard as well? And it's trading right now around $75 a share.

- Yeah.

- The price of the deal is over 90, correct? I mean is that the arb you're talking about? Is there any regulatory?

- For example, so the offer from Microsoft to Activision, ticker ATVI, $95 per share, trading at slightly over at $20 spread to that. And yes, Berkshire was actually, before this deal was announced, and Buffet made very clear, unrelated to any information about the offer itself, was buying shares of ATVI. A lot of deal targets since their announcements have done somewhere between mediocre and horrifically.

So you can't just take the pre-deal price, you're not owed anything. In many of these cases, it's much, much, much worse than would have been before the deal was announced. Twitter would be one example of such companies. But ATVI's been doing pretty well. And if you look at their rolling out of products, and if you look at how their company's doing, you know, I think that this is one that would be more benign than some in terms of a break. But it is a, I call it an acqui-fire. You know, Silicon Valley has acqui-hires when they're trying to bring on a CEO. This case, Activision needed new CEO, and they kind of rolled it into a sale to Microsoft.

- So you mentioned Twitter ( TWTR ).

- Interesting.

- I would really love to hear, I know you mentioned in that post, I read it, I think it came out just a couple days ago about Amazon acquiring iRobot, and you mentioned Twitter I think at the end there. Do you mind walking us through specifically how you're approaching that from a trading perspective? The timelines, the prices, things of that nature?

- Sure, Twitter is an interesting case for me because the closest you get to an actual arbitrage, not merger but a real arbitrage, is a situation where something's trading at a discount to what it is worth as a standalone or in a deal, and you're simply waiting for resolution. I mean, every once in a while, you stumble on a situation where I think, "Oh, this is fantastic with or without the deal. This is something that I'd happily own. If you wanna pay me to take me out at a big premium, you know, I'm happy to take your money. I'm happy to own the equity either way." Twitter is emphatically not that situation.

But Twitter is one where you're stuck between a standalone company right now that reasonable minds differ. I think the range of top holders that I've spoken with goes between 15 and $25 per share is the standalone value. I'm at the low end of that range and have an enormous stake in Twitter. But it also has an offer from Elon Musk to buy the company for $54.20.

It's interesting because of the kind of chaos monkey aspect of the person involved and the scale involved. It is not interesting from a legal perspective. It is not a close call. It is not something that scholars would pour over. It is almost at the point of defining terms what a tight agreement is and what the point of contract law is. You have somebody who has the ability to do something, fully commit himself to do it, and then changed his mind later.

And when he changed his mind later, we've even seen, he was concerned about Putin and Putin's war in Ukraine. He was sad that this was gonna cost him more Tesla shares than he thought it originally was. If you kinda denominated in the number of shares he had to sell, that went way up as Tesla's price came down. And he thought he overpaid, which he absolutely did. These were really good things to think about before you're committed to the deal, right? This would be somebody who, you know, kind of like if you're gonna get married, kinda just like totally think about all the downside ahead of time, but he kind of does the thing, he starts at the end and makes this commitment, and then he starts kind of picking away all the things that you might wanna do ahead of time to see if it was a good idea. All of them would conclude they don't.

So I would say that I have a large investment in the Twitter merger contract, I have a large investment in the rule of law, and I have a large investment in Chancellor Kathaleen McCormick, who is a brilliant jurist, who I think should be on the Supreme Court, who is the perfect person to sort this out. And in whoever owns the movie rights for this, things can have a lot of fun. Just in terms of the character profile, these are two almost opposite ends of humanity, which have different things you might admire about. I mean, you got Elon Musk is the greatest winging-it guy, fake-it-'til-you-make-it guy in the history of the world.

And Kathaleen McCormick's kind of a somebody with attention to detail who is not a fake-it-'til-you-make-it person. She is a contract person, she's a law person and is kind of somebody with a lot of gravity and seriousness with how she approaches this. I think the likelihood that she will side with Twitter and asks Elon Musk, rather insists that Elon Musk does the thing he said he would do and put it in a contract is extremely high.

When you asked how I'm set up, due to the grotesque downside if I'm wrong, I mean really apocalyptic downside if I'm wrong, one little thing in her decision, and she's somebody I admire her total independence here from any kind of pressure which can cut both ways, right? I think I'm right, and it's gonna cut in my favor, but if I'm wrong, she'll side against me just as happily as she'd side with me. And this thing goes to $15 a share, it is traumatic for the share prices. So one might consider looking at contracts. I've written about an example, June 47.50 calls in Twitter.

Why June? I'm 99% sure this is done by June. 90% sure it's done by March. More than 50-50 it's done by December. And why 47.50? We might take the kind of cut that simply is the time value of money and risk-adjust it for an extremely high level of confidence that we win in Delaware.

Now, one problem with recutting it is how do we qualitatively do this because we already have the contract that we would want a really high level. What is he gonna like, pinky promise, double swear? I mean, we would need the whole thing in escrow. I would like if we redid the contract with Elon Musk, and anybody who ever does a contract with him again in the future, should actually have a punitive process for if it is contested.

So he simply is joking, which for him is much more likely than most corporate executives that are just kinda joking. He's joked several times about buying multibillion dollar companies. The price would go from 50 to... We could even do another funny number, you know, go from 54.20 to 64.20. But yeah, something that could actually get his attention because at his scale, paying $300,000 a day of legal bills on both sides, both sides of which he's ultimately gonna have to pay for is trivial.

I mean that's fun for him. For most people, that would be punitive. For him, it's not, and so the punitive aspect of anybody who deals with him in the future, anything he does has to be put in escrow with some kind of downside for him that matters at his scale. He doesn't have either of those things now. And so he's kind of playing games in Delaware, even with a case so weak, it's absurd.

- This sounds like Michael Lewis's next book.

- I appreciate it.

- It really does sound like his book. So I wanna go ahead and start diving into some questions.

- Sure.

- Of course, everybody that's tuning in right now, we always encourage you to ask questions throughout the show. We'll get to them, I see one here from Jacob. Jacob says, "Does Chris believe in corporate social responsibility to take care of their customers and the society it is a part of?" What do you think, Chris?

- Oh, I think that even if ultimately the company's job is to enrich shareholders, how they take care of customers is kind of along the way how one does that. So I don't know that those things are in tension. I think as you go further and further from the nominal purpose of the company, you know, Apple dealing with their, delighting their customers with their products and services, Disney, people having fun at their parks and enjoying their movies.

As you go further and farther afield from that, I think the two alternatives that make more sense to me is for executives to fund their unrelated priorities with their own resources and enriching shareholders who then can take their greater resources to and to do whatever social political objectives they have. I'm a die hard capitalist, but I also think capitalism is sort of specific in what it can accomplish.

It's good at providing the goods and services that their customers think they want. It is not a philosophy in the sense of telling people what they should want. And as it tries to delve into that, it kinda does it stupidly. It kind of ends up being over too bad at the philosophy and bad at the business. So I think that people doing a optimized job tend to be focused and honest, and I think being focused and honest implies that a corporation and an investment team should focus on doing the job of the corporation. So yeah, so I don't see any tension in terms of how they deal with customers. It's when you go farther field into politics that I'm more skeptical.

- Gotcha, I also have a question over here. Ron is joining us on YouTube today. He says, "Great content today." Thank you, Ron. But he also asked all of us, "Do any of you see the S&P 500 dropping below 3,200?

- Yes.

- Austin, maybe you have a thought on that.

- Yeah, yeah, actually, it's kind of funny. I just posted a video on TikTok kinda updating everyone on the recession we're not in, right? And I walked through the recent 85,000 layoffs we've seen so far, year to date. We talked about monetary policy, but funny enough, my pinned comment on my TikTok video is SPY to 3,100.

So yeah, I do believe that we are going to come back down to those, you know, pre-COVID highs. It's just there's so much stuff right now that just doesn't make sense for us to move anywhere high. It just doesn't, for me, I mean, I just don't see it. But again, I'm not a technical analysis guy. It's just like I think about the economy and things of that nature. But Daniel, Chris, do you have any thoughts?

- Yeah, Chris, do you have anything?

- As Charlie Munger says, "I have nothing to add." All the things I'm working on contemplate could be a much, much lower market, and I hope they'll work regardless. I kind of, if I'm going out in the evening, I kinda glance to see if the market was up or down that day. As of this moment, I've no idea. I spent enough time trying to understand one company. I can't imagine understanding 500.

- 5,000, yeah, exactly. I mean, personally, I think we're gonna continue to see multiple compression in the overall market.

- Excuse me.

- Of course, earning season here is right around the corner. We're gonna start seeing what the numbers come out to.

- I'm getting one, I'll be right back.

- We've seen the extreme FedEx issue that's happened, KB Homes, the housing sector is seeing it. Obviously, multiple compression is going to continue if the bond market does not stabilize. So that is something I've been focusing on, the two-year, the five-year, the 10-year, the 30-year. I'm actually considering actually for the first time in my life, buying a two-year Treasury Note because the yield actually makes sense.

- Same man, exact same. I talked about this yesterday with a couple of guys. I was like, "Guys, we're getting close to 5% here."

- Which a savings account is paying you what? .25, .5, like banks.

- Yeah.

- I mean, anyways, that I digress. Chris, I wanna get back to you right before we wrap up here with ya.

- Sure.

- I've been telling people all year. Every time I've been talking to you in the second half, we've done countless interviews and videos together. You put out a stock idea at the beginning of this year, Renren ( RENN ), which you scaled into early on, and I mean this company has completely given you a great return, and you are very vocal about it, and you are very much in front of everyone's face telling them this is the thesis, here's the opportunity, trust me. And now this stock is a massive return for you. And I'm just kinda curious, I mean is Renren over? Maybe we tell these people a little bit about Renren in this scenario just real quick before we jump off?

- Sure, it's been our best idea for the year, and it actually just hit, we had a $30 price alert for Sifting the World members. It's up a little bit over 100% so far this year. It is one that we don't kinda have a perspective. Sometimes we kinda bump these alerts. We're just kinda leaving it as is for now. Actually, just starting to think about what my best ideas should be for next year as we slide into the fourth quarter. But let me just refer to the earlier thesis 'cause there's some things that I can and can't discuss, but earlier thesis was you're gonna get a distribution this year in excess of the market cap.

I still think based on today's market cap, that's the case. You own a stub equity after that that has some value. It's a little hard to value. Call it mid single digits of assets that'll probably be pretty significantly discounted. But you know, a few bucks worth of value there in addition to a distribution that will be well in excess of the current market price, about $30 a share now. So you have something that you're gonna get all of your money back and be left with the stock. So I think that that's been interesting. It's based on a litigation that I've described in the past. I won't go through the litigation now, it's too complicated.

- Yeah.

- But look up Renren, ticker RENN, I've written about it a zillion times on Seeking Alpha.

- Yeah, no, it's definitely been there. It's been in everyone's faces. That's why I had to bring it up real quick. Chris, thank you so much for joining us today. Everyone, Chris DeMuth Jr. from Sifting the World. Go check him out on Seeking Alpha. He's got the newsletter, he's got the full service. He gives out some articles for free. I mean this guy's the real deal. Chris, thanks for taking the time today.

- Thanks so much Daniel, appreciate your time.

- Thanks, Chris.

- All right, thanks, Chris.

- Thanks, Austin, sorry about the coughing.

- Josh!

- All good, man.

- It's all right. Josh, let's go ahead and keep things moving. Get on that next slide real quick. Just wanted to tell everybody, of course, you can find us across the internet as well as on Seeking Alpha. Austin's on Seeking Alpha. Go follow him on his profile. You'll find me on Seeking Alpha interacting. You'll see, you know, this show, other shows. Weekend Bite comes out every Friday morning. What's Happening in the Stock Market with Mike Saul on Mondays. Now, real quick before we go, 'cause we gotta remind you, we need your stock ideas.

If you like what you heard today about Micron and how we deep-dived into that stock, give us some more stock ideas. Go ahead and slide off for me, Josh. Now, few rule of thumbs, right? Make sure it's not an extreme illiquid stock, small cap, super small like penny stock, we don't want any of that. But if you have any stocks that you want us to cover, email us at stockmarketlive@seekingalpha.com , and we will get into those. And anything else to add, Austin?

- I'm good, we're good. This is a really good episode. I'm excited to hear what these stock ideas are. I'm ready to dive deep into somethin' fun.

- Awesome, well, then let's go ahead and get on outta here. Everyone, have a great rest of the day. Thanks for hanging out with us. We'll see you next Wednesday , 12:00 PM Eastern. Take care, Josh, wrap us up.

- Thanks, Dan.

For further details see:

Breaking Down Micron + Merger Opportunities With Chris DeMuth Jr.