Yet Another Value Podcast - Lake Cornelia Capital's Judd Arnold on $TOI and a bunch of other stuff

Episode Date: January 8, 2026

Judd Arnold from Lake Cornelia Capital joins for a wide ranging discussion of inflection investing, $TOI's unique oncology model, and tons of stuff on risk management and portfolio construction.See Lake Cornelia's Substack here: https://lakecornelia.substack.com/___________________________________________[00:00:00] Podcast intro and guest announcement[00:02:41] Judd on becoming a father[00:03:40] Judd discusses launching Substack[00:06:30] Complexity versus simplicity in investing[00:07:52] Liquidity and investor interest matter[00:11:06] Inflection investing over valuation focus[00:15:59] Sector and story versus fundamentals[00:19:55] TOI scalability and market potential[00:25:26] TOI business model and economics[00:31:32] Comparisons with other healthcare models[00:39:31] Consulting impact on investment process[00:44:21] Sizing up at inflection points[00:50:48] Risk profiles in portfolio strategy[00:53:20] M&A strategy and market perceptions[00:57:35] Netflix synergies and investor worries[01:01:45] Warner Bros bidding strategy discussionLinks:Yet Another Value Blog - https://www.yetanothervalueblog.com See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimerProduction and editing by The Podcast Consultant - https://thepodcastconsultant.com/

All right, hello and welcome to yet another value podcast. Happy holidays. I'm happy to be back. I can't wait for the New York podcast. We're kicking it off with the banger. Today I have Jed Arnold from Lake Cornelia Capital. We have a wide, wide-ranging conversation about a whole bunch of stuff. We were actually supposed to talk about the death of Vegas, Caesars, gambling, casinos. We talk about so much stuff. We don't even get there. But you are going to enjoy it. We're going to talk a little bit of theory, sizing up into inflection points. He's going to give the pitch for TOI. We're going to talk. Just all sorts of stuff. I really enjoy this conversation. I think you're going to, too. Judge, just launched the late Cornelia capital substack on Clutalink in the show notes. But, you know, if you enjoy this pod, you'll probably really enjoy a subscribe to that too. So we're going to get there in one second. But first, a word from our sponsors.

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Go check them out. All right, hello, and welcome to yet another value podcast. I'm your host, Andrew Walker, with me today. I'm happy to have one of the people's favorite guests based on the viewership metrics, the amount of response on Twitter. My God, but Judd Arnold from Lake Cornelia Capital. Judd, how's it going? Great to be here.

Happy New Year. And congratulations to you, new father. Double father. Double father. Double father, yep. Man-to-man defense still. Oh, my God. Okay, it's a lot.

Well, we don't have to talk about that. Before we get started, quick to say, and remind everyone, nothing on this podcast. Investing advice, Judd and I have, I mean, I think we had a list of like seven stocks. We were talking through three of them before. So we're going to talk about a lot, but just remember, you know, not investing advice, please consults financial advisor, do your own work, all that sort of stuff. Judd, you have had the glorious launch. The Twitter account was basically dormant for a month and then you, for a year,

and then you came out and you've had the glorious launch of late Cornelia, the substack. I'll include a link in the show notes. just on fire in terms of 4,000 page memos. I mean, my God, people tell me, Andrew, I don't know how you do so much. You're publishing like three, four thousand page memos a week, it feels like. But we've got lots to talk about, I wanted to talk Vegas, I wanted to talk to I, but I'll toss it over to you.

You're publishing on everything. Where do you want to start? What do you want to talk about? We can go wherever you want. I think the substack is something I've been thinking about for a while. And I think the transition big picture that I made was, you know, I left hedge funds at the start of 20, 20 with like land unknown.

And during COVID very rapidly, I had a few people reach out saying, well, you work here. I didn't want to work for anybody ever again. So I offered to be a consultant. And that was kind of my business for almost five years, and which had a lot of positives. And I'm still doing that with a few clients. One of the negatives that always bothered me, which was something that bothered me going throughout my whole hedge fund career, and this is something a lot of senior analysts talk through, which is it's really hard to pitch a boss or a client something that's obvious. You have to be unique.

You have to be like, I have this unique insight. That's always better. And I think generally that that's been nice, but it also put me in a box of like a mistake I've made historically is doing stuff that's too cute by half or just a little bit too fancy to a liquid and whatnot. And I just had this moment of like, you know, I write a lot of stuff. People like what I read. What if I do a substack where I just say, this is interesting. And I think the other aspect of this is interesting, and this is another thing for senior analysts that like it was illuminating, I used to have about 10 clients that would pay me for the consulting thing. What I found, and it was so nuts because I go back through my career, I worked at three of the biggest

funds out there. You know, as a senior analyst, you pitch an idea of the PM. What's your probability of the PM caring, usually 10 to 20 percent, the position being put on, like five percent, less than five. It's really hard. When I had 10 clients, I could see this in real time. So at least every idea I pitched, I'd have one or two people that shared and would follow through. But then I sort of had the second hand epiphany, and this was something a friend of mine who I worked with at two funds brought up to me. And this just sort of goes to like the business of what we do, which is we don't know which names are going to work. Okay. So people would pay me for like, I just want to hear what you're doing, even if it's not what I'm doing.

And one of my friends, he said, you know, I went through all my numbers for the last three years. When I was high conviction, only one in four, one and five times when the thing actually worked. So I think what I should do with my book is have, you know, these junior varsity positions and then I'll ramp up when it's starting to play out. And that's sort of high conviction inflection investing. And that's what it is. So all of this is sort of merged together. I'm really liking this upstack thing. I deeply appreciate the response. I'm like super thrilled with how it's impacting me and my investment process,

which is I feel like less pressure to be unique, but also do stuff that's interesting. Okay. As everything we were going to talk about before, you said I took, I don't know if you saw, I was taking a lot of notes. You said a few things that really struck a court through just things I've been thinking about and everything.

So we're going to talk about those and then we'll come back to Vegas and everything else if we get a chance. Let me start with you said, And let's start in terms of, let's start with the two Q by half. So one thing I have really been thinking about is, hey, two Q by half versus simple, right? And the simple to me is historically, I really liked the financial engineering stories, right? Hey, we've got this thing. It's going to be a 2% top line grower.

It trades for 10 times free cash flow. They're going to buy back, all the cash flow goes to share buybacks. And, you know, the famous levered buyback story, as they grow, they take on more debt so that you can even work. like I used to love that story. I don't think any of them have worked over the past 10 years. And I would say that's an example of simple versus some of the stuff you and I've talked about are done like, you know, hey, this is a D spec that went insane. The private equity sponsor needs to sell all their shares.

The company, you know, three of the four divisions are absolute garbage and they're going to have to shut them down. But this one good company, if they can just like refy everything, it's going to the moon. Like, that's a really hairy story. And I think 10 years ago, I leaned towards the simple stories. And now I lean towards the more complex stories. then I come back and I'm like, damn, these more complex stories will rip your face off when you get them wrong.

So I'd love to just hear how you're thinking about it. You've been a long-dispos. I would add one more continuum to what you said because the other thing that sort of looped into this and they go hat and hand is liquided. And for every name that's worked for me, it's gotten really liquid. And I have too many names I found where I'm fighting the battle of will it get liquid and I'm buying it illiquid, hoping that like I'll get the mega payoff. when it becomes liquid.

And you do the inverse of that, and you're like, what if I go just to the next level up where I trade valuation obviousness? Because that's really what I was doing, which is the less liquid names, the valuation was like transparently cheap, where the more liquid comparable names,

and I'll give a few examples of this. The valuation wasn't as obviously cheap, but it was already liquid. Okay? So, and I'll give, you know, a few examples of both, right? Like Mix-T, which became powerfully, which became A-I-O-T, never really got liquid, okay?

It's still obviously very cheap. Well, I don't know if it's obviously very cheap because the stock's kind of gone sideways, but you can like, on traditional valuation metrics, you're like, okay, seven, eight, ten, tibita, like this thing could trade for 20 times, blah, blah, blah, blah, blah. All right. I looked at like, and it really crystallized for me

with Nimbus or Nebius and BIS. Look, you are the one, if I can help in here. You were the one who told me about Nebius, a few other people. I can't think of a stock that I have traded more poorly. Like, if I had just bought it when we talked about it, and I did. I never sold a share, I'd be a lot bigger office that I'm talking to you. And, oh, that stock just infuriates me. But with Nebius, you could push back on everything.

Okay, and we started talking about this at 18, and like, I really had a chance to lean in at 20, okay? And that was after the venture capital funds came in. This was post-tariff, and, like, you could really need it. The number one thing, I would say. to people when I was talking about it is I'm 100% certain that people will care. I was trading like one to two million shares out of the gate. I was like, this is going to be a QQQQ, like highly liquid trades 25 million shares the days.

It's just like you have too many pieces with Arcaday, you know, like a management team that's known. You have all these pieces. And it became super liquid. And so if something is already liquid or your high conviction on it being liquid and the growth story is. somewhat tangible, you know, and not hard. And I put ASATs in this bucket, too, which is ASTS, which is one I'm not involved

with, but it's one like, I look back over the last five years, it's one like when they got that first contract and it ripped a five and came back to four, like two days later, and, you know, the warrants were at one, like, people care. This thing can go to 50 to 100. People would say, how are you getting there? I go, I don't know. I just know it's going 50 or 100. And it's liquid as all get out.

And so, you know, TE is an example, which is T1 Energy, which was Friar. And we're, like, I have two notes on my substack about it. It's a solar name. But it's one where, like, I came to it. I'm like, I knew this at dispatch. It was always the liquid one. It's liquid still. Now we have a story.

This is worth my time exponentially more than the other stuff. So if I could just, yeah. So it sounds to me liquidity. Like, you're really talking about liquidity, things that trade. And I like how you framed it things that people. care about, right? ASTS, whether you believe the technology or not, and I know people on both sides of that of believing the tech and the optionality there, whether you believe it or not, it's space

communications. People are going to care. And BIS, it is a data center, cloud data center for AI, right? People are going to care if you get it. How do you think about people are going to care, T-O-I, which I've done some work on and we might talk about later? That probably fits nicely. There's a lot of shares out there.

They had a big private equity sponsor and give out shares LPs, which obviously does. people probably care if it works but you know it's a less so so less so and i like healthcare services what i'll say is when you're right they're always going to care i feel convicted enough like in the the care there though is you can get you have to get more grain which is it's a 20% grower in health care services that has a fixed capital structure and a like a multi-year you know five 10 year massive like size the tam and high quality business like if they can execute, people will care. They're going to show up.

Let me ask the liquidity question different way. When you said ASTS and BIS, I think what I hear a little bit is, hey, I'm looking for the story before it inflex or as it inflex, right? And that's an interesting style of trading, but it doesn't have anything with valuation or fundamental. So are you like kind of increasingly divorced from that where you're just trying to find, hey, I want the story before it inflex? And, like, I know people who they want the story before it inflex, and then it inflex and they sell,

and maybe it's a zero long term, but they, you know, they're out before it goes. It went from 40 to 200 to zero, and they're out at 151.60. Which is, which is critically important, which is, yes, I'm less tethered to traditional evaluation metrics and more tethered towards story and liquidity. Okay. But because I think my advantage is an ability to move quickly and to appreciate. things that have a big, I think it, is right tail the good one or is left tail the good one? Right tail is generally the good one, but hey, I know. Okay. Right tail. Why is with a huge

right tail? So like let's go back. Like I started on this journey really, you know, leaving traditional valuation stuff and thinking more conceptually about like just the nature of inflection investing. Really, you know, I'll say in 2017, 2018 at my last time, I just wonder when I said to start looking at capital market stuff because I started the first eight, nine years of my career weren't distressed debt. And I was the energy commodity chipping, like, believe me, I was asked Heather to valuation. No, I was pulling up a, I was prepping for this podcast, and I pulled up, and I saw, you know, a fund in 2013 files at 13D and says, hey, Judd Arnold will be resigning from this board.

And I was like, oh, that was a distressed debt board seat. Like, that's, that's just the, yeah, that's just the DHT, the shipping one. But, which was a, I mean, I still remember, you were buying a 10-year-old BLCC. for $11 million, and it was just like, you're buying them at scrap. But I thought, like, really getting on my own and leaving in 2020 and leaving hedge funds completely, you lose, and this really goes to, like, the nature of, like, what I do. And the more people I meet sort of on this journey of, like, it's mostly people who run money, just their run money.

It's, like, hard to get other people's money to do this because, but it's names that, like, are hard to pitch, but you know you want to. pitch that. So like, and I just keep going back. Like N BIS, there's no person I pitch that too that said, this is a terrible idea. Every single person was like, it's awesome. Like, help me with the sum of the part story because that's what I can lean on to pitch my boss. Yeah. You know, like I can pitch downside. And like ASTS is another one. And WGS, I would throw into this bucket, which is this Exome Company and Genome Company that went on them did like two and went to, I think it's at 140 right now. It's another one.

The way I've kind of thought about this, you can tell me from wrong, this might be too married to fundamentals. But what you don't want, you don't want a stock, as I said at the beginning, that's trading at 10 times price to earnings, right? Because that is the quants, the computers, they're all over that. That's fairly priced. What you want is, I'm sure you're at least something familiar with Talon, TLN. This is a company that, to very much simplify it for viewers, they own a big nuke out in PJM, right? And what you want is somewhere where, hey, the financials mean nothing, right? It has a 500 megawatt, a 500 megawatt nuke or whatever, and what you want is a place where the financials mean nothing because all of a sudden

the demand for megawatts is going up, up, up, up, up, up, and it's hit that inflection. And you'll never see it in the financials trailing, but like the megawatts are just like infinite money printing machines. I don't know if that quite made sense, but that's like how it does and I would go further on that topic, which is, I mean, talent, look, Talon is the spendoff for PPL. PPL was my biggest equity position in my first hedge fund. It like made the My career. I've been to that plan. It's awesome. And when it came out, I looked at this. And I was like, power hasn't worked. I was like that power is my original. Do you wonder why I didn't feel like it? I did distress that. I was involved in TXU and a few others. And when it came out and I had all these generalists pitching it to me, I was like, you guys have no effing clue how hard this is. Like all of these go bankrupts every seven years. Maybe you catch a cycle. Never thought you catch a cycle like that. That's where I was sort of going, which is you've covered power for a while. many years did we watch with Vistria? Oh, it's a 20% trick cash flow yield and like all this stuff. Like,

and you, like, I literally moved away from power. It was where I started an investment banking. I've been to more power plants in this country than anybody on Wall Street. I bought power plants like in the Calpine bankruptcy. But I don't know where CEG is trading today. C.G is the nuke spin-off from Constellation. Like last time I I looked at that, 35 times earnings. And so to the point I would make, and that was after more than a decade of all these power names, NRG, all this stuff,

trading at 15 to 20% for cashier yields, the story being share cannibals. When you get the wave of generalist money coming in and the story changes, you are going to price it something stupid. And so what, in terms of focus, I don't know if it's like, divorce from reality or valuation reality, but like, I deal in the liquid world. And I think, you know, the first two funds I worked at were 15 to 20 billion AUM at the time,

single manager funds. You were really restricted on stuff you could buy. You can't play this game of I think people will care, buy it, you have meaningful size, and then exit. Like, you have to actually be correct when you're at that AUM size. You know, when you're running $500 million, a billion dollars, like, it's lost, as long as there's at the end, like, does it matter if you're not intellectually perfectly correct on a 20-year basis that the terminal value was X? Oh, like, you know, money flows in. So give yourself credit

to call what I'll call skill-based alpha, or sorry, skill-based sector alpha, which is like a factor when I was at the big pot shop, which is there's single company idiosyncratic. And the decop for people who don't, you know, most people get it. The average stock, and this is, there's a wide range, right? 40% of the return is typically the market. 30%'s the sector, 30%'s the company. So if you can call the sector, that's almost, that's worth basically the same thing as calling the individual stock. And it's best when you can call both, right?

So you're looking for stories where the individual company and the sector are both freeing and value. And when you find that, like, does valuation matter in the whole checklist of the stock decal? Not really, you know. One question, what you just said, T-O-I. And I'm just using two, we can talk about it later, but TIO is small enough. And there is sector, right?

It's health care. There's going to be oncology payments, Medicare, Medicare, all this sort of stuff. But it's small enough and unique enough. Like, when I think health care, I think Pfizer, I think tenant hospitals, right? When you're dealing with something that's small and a unique-ish business model, do you think sector matters as much? Doesn't matter just because of the tailwinds? Or when you're doing that, like, to me, I would say, hey, if Judd and I were looking at tenant health care,

I'd probably agree with your 40, 30, 30, and we could split hairs if it's 34, you know. But when you look at TOI, I'd kind of be like, yeah, on a date-day basis, maybe it's like probably 40% market for something that's small, 20% sector. But overall, I think like the stock on something like more, a little, I know you would talk about liquidity, but a little smaller, a little more liquid with a little more reflection. I think it's actually going to be a lot more stock. Do you think I'm wrong or did I choose a- No, I think you're right. That's one of the things I like about TOI and healthcare services in general.

And this goes back to why people will always care for a health care services name if it's showing it because you can have these mini you know what is the sector for to i it's literally a company onto itself i'm still the same process which is do they have a story and i mean this is where it's like is it the company or is it the sector you know but certainly let's well let's start with market for a second economically completely insensitive short term yes there's market implication but on a two year basis 90% of the idiosyncratic move the stock is the the stock itself for something like T.O.I. And that's something you can size a lot more than, you know, a commodity-based company or a consumer retail GDP exposed per cyclical thing. So that's one of the reasons why I was able to say to

myself, you know, hey, I'm going more liquid, but like, hey, this is a really, you know, this is, this is one to sort of take that risk. But with T.O. where I really ramp the thing up, because I was involved with it, I wrote a lot about it in 2023. And I left the scene in 2024. I round-trip. the thing from 35 cents, went up to 220, I got out of 65 cents. And the thing ended up bottoming at 12 cents during tax loss selling last November. And it bounced off, you know, $4.80 a year a few months ago. It's back today to about, I think, $4.20. You know, and we put it in our substack note that we put out. We think it can be somewhere between $15 and $30 in two years. It's still trading under one-time's revenue, which is just nuts. But to go from

from like a reasonable position size to like a full massive ramp into the thing. You know, and I own, you know, somewhere between two and four percent of the company. The story of oncology services really, you know, in this multi-year penetration, which is basically with oncology services, they give cancer, they dispense cancer drugs. That's the business. They buy the drugs from the drug distributor. They give them to the cancer pages. You can go into the clinics and get the fluid chemotherapy or they'll give you an oral chemotherapy drug like Katrina.

Okay. And they make 15 to 20 percent margins what their business model is versus all their guys because about 50 percent of the people, patients go get the service via a hospital. And that's the highest cost thing. About 95 percent of the ecosystem is fee for service. The next level is all the big drug, the big three drug distributors, McKesson, Sincora, and whatever. the AmeriSource Bergen is, and Cardinal Health are starting to roll all these up. There's a private, all the private equity firms are coming in, TPG owns one of the biggest ones called One Oncology.

Their business model, this is the drug distributors, rolling these up, is saying the fee-for-service benchmark for drugs is ASP, average sales price plus 6%. That's what you get paid. Well, we're the big three drug guys. We can procure an ASP minus 20, and so we can make 20% margins on ASP plus 6 in a fee-for-service model. And we're cheaper than a hospital because we're going to do it all in an outpatient thing. So we're going to be lower than the fee for service benchmark on patient services when you come in for your fluid chemo. And then on the drug dispensing, we're going to be really good because

we can procure cheaper. What TOI does is one level further, which is they're going to look at this menu of 10 drugs. Look at what you're doing. They're like, we're going to service you. We're going to give you, this is sort of a weird way. It's hard for me to describe this without sounding like morbid. Like, they're doing what's best for the patient. Don't get me wrong. But, like, if you can get the same patient outcome for a $2,000 a year therapy for $20,000 a year, T.OI is like, we're going to be, we're going to do the 2000. Okay.

We're the big three drug distributors. They want volume, like max volume as much as they can. TOI goes to individual health plans, you know, all the big Medicare Advantage guys, and says, we will, we will be 20% cheaper than fee for service. We'll take this, and the typical Medicare Advantage premium payment per month per member is, you know, somewhere between $1,500. The oncology piece is somewhere that T.OI touches is somewhere between $30 and $50. bucks. TOI goes to an insurance company like Humana's like we will take that capitated risk on

your whole network, all your members, and we're going to lock in 30 buck PMPMs. And we're going to save you 20 bucks on top of saving you 20 buck PMPMs. You're not going to have to think about this. We're just going to do the whole thing. We're specialized in this. And so they're really ramping up, you know, as they expand. The business used to be 95% California. California is sort of a weird island into itself in terms of health care

because you have all these big physician groups that act as like many insurance companies. TOI just is really expanded in Florida. So in California, the PMPMs because the physician groups do most of the stuff, in terms of administration, delegation, and stuff like that. And credentialing is like $3 p.m. p.m.s. In Florida, they're earning $35 p.m. p.m. and there's a bunch of states like Florida. So 20% margin business. You're seeing what I, you know, product market fit in terms of this new service.

They're the only people doing it. You got a new CEO in about two and a half years ago when the company was really struggling. And you really leaned in sort of, you know, pulled this out of nowhere. I mean, the company looks like she was going to go under. But let me jump in here. So, all right, see what I. I thought we're still talking all this stuff, but we're talking to you I know. So I've looked at this a few times.

And I guess my first thing is, as you said, they're managing the oncology for a fever service. Why can they do this so much cheaper? Like, I understand, hey, nobody's going to argue with me that fee for service, there's tons of fat to be cut, right? Like, as you said, guess what? Just forget everything else. If you give someone a 6% margin, they're incentivized to give you the $20,000 pay drug over the $2,000 drug, just because 6% on 20,000 is worth a heck of a lot more than 6% on 2000, right? So I totally get that, but why are these the only guys who can do it?

Like, why can't someone else do it? Why can't you and I start this up? Why can't the drug distributors, as you said, do it? Why can't the hospitals do it? Like, why are these the only guys who can do this? Sure, the few levels of this, right? So most of this care is coming through hospitals, okay? And this is, hospitals is like a 2% to 3% margin business.

You can go through AI. You can call a million GOG or Alpha Sense experts. No one will give me the actual number other than it's material and big part of hospital earnings is dispensing cancer drugs, oncology drugs, via their pharmacy, okay? And so from the highest level at CMS, take something at CMS centers for Medicare and Medicaid, okay? They crack down on scam durable medical equipment. That's where they've gone. Like oxygen's been a big focus. A lot of people, you and I know, I don't know if you wanted the Sonia wave. I knew, I thought you were going to mention. I was like, look, I've had a lot of people, wound care is a really scary area.

So there is a solution to the wound care scan, but CMS is like really going after this wound care, like, skin graft thing, okay? CMS isn't going after oncology drugs because, one, it's oncology. They don't want to kill people. Two, the hospitals behind the curtain are tell CMS like, hey, man, this is like 25, 30% of the total margin of the hospital, which is a 2% margin business, is dispensing oncology drugs. Like, if you crack down on this, there's going to be real issues in the health care system. So you start at that level. All the big three drug distributors were like, oh, you're going to let hospitals just like charge for the highest drugs and be really expensive for, you know, inpatient?

Great. We'll undercut them without patient oncology delivery at ASP plus six and we'll just be way cheaper. And it doesn't matter that we're volume-based, you know, just trying to pump it. because the feed-for-service benchmark is set by this insane hospital spend, which CMS is like winking and nodding and letting happen. That's a huge business, right? So if you're anybody but the big three hospital or big three drug distributors, you're like, what can I do?

So TPG, when they bought one oncology three years ago, who did they partner with? Amarasor's Bergen at the time. Now, you know, they changed the name to Sincora or whatever the heck the company's called, okay? Because all the value is getting the drugs really cheap. T-O-I doesn't really have competition in the next layer, which they do, which is like, okay, we take, we look at what the big three guys are doing. What if we, instead of prescrib, you know, being really focused on volume,

what if we prescribe, you know, a cheaper cocktail of drugs that we know does the same thing? Okay, that's a huge business. Now, what's the negative of it? It doesn't scale as fast because you need to have. have a great oncologist in every, you know, in every era or in every area that you are. And you need to get oncologists to cooperate with you to like stay on the menu, right? And so the big oncology groups, what they struggle with when people try to do this is like, if you don't own the oncology clinics yourself and you do it in an MSO model,

these oncologists that are in your MSO, they're just not going to cut rate. They're not going to deliver enough value. And this has been the problem for EVH. you know, Evalent Health, which is like a value-based provider where they don't really control, they don't have any doctors. Their MLR blew out massively. The stocks gone from 35 to 4 over two years because they don't have enough control over the network and clinician behavior. So for TOI, you need to have an oncologist in it. Like, you need to build out all these clinics. That takes time. Each ontologist you hire is six to six to nine months.

The aha moment for them was in Florida. They realized because, of the market structure of oncologists and patients, they could get leverage over the oncologists and execute an MSO mom. So let me start with where MSO doesn't work. T-OI's in Nevada, mostly in Las Vegas, okay? So Las Vegas is just an island. There's three million people in that metropolitan, you know, that MSO or MSA, metropolitan statistical area, okay? I don't know. There's like 50 oncologists that matter, right? If you do an MSO network, and you don't like what the oncologist is doing. You call them up and you say,

I don't like how you're prescribing drugs to all these people. You're doing it way too expensive. Then oncologists can say, well, I control the members. Where else are you going to go? There's not been there any oncologists here. I don't have to comply. Whereas in Florida, you have density of patients and you have density of oncologists

and you have density of hospital. So you want these areas like, so it's Florida, Texas, Ohio, and I want to say North Carolina are the markets where you have this conversion of hospitals disproportionately are setting the fee-for-service benchmark. You can get leverage over oncologists

because there's enough density and there's enough people in every area. So TOI think they think they can service areas in Florida and other like, you know, three or four other states with only 20% own clinics and 80% MSO. And that's how you scale. Because if you don't have an MSO network, the scaling is going to be so,

slow you're so much deeper on this than me but let me ask i think like the question when i was researching that popped up you know again i i looked at this back in 2021 with the spack deck their spack deck when they did this you know the peers they listed and the business model is not the same because of oncology but it is it has a lot of rhymes you know in terms of hey the golden market is florida hey we're undercutting hospitals the peers they listed were cano village md oak oak street one medical right all the primary here guys yep and they all went i mean i mean I mean, I got beat up. But, like, you know.

Yeah, and all of them either ended in tiers for their investors or the investors managed to get the bag off to someone, you know, like Oak Street gets bought by CBS. CVS takes a $6 billion right now. Cano, like, as you're seeing this, I knew, like, very certain, like, takes Cano public through his IPO, says the CEO of Canoe is the best entrepreneur. I know. Look, I got, yeah, I got heard on that one. Like, so let's talk about what this thing isn't, okay?

There's no MLR risk. The MLR variability, these guys are delivering mid-70s MLRs, but it's not like primary care where you can have like flu season or this stuff. The biggest driver is drugs, it's drug costs. They know. They know because they're like, all we have to do, the benchmark is so high. We have this huge gap and we're just going to prescribe these different drugs. And then the second piece is cost was that they shifted.

They were four to one oncologist for nurse practice. and now they're getting nurse practitioner versus oncologist is getting one-to-one. So they're saving on labor. But it's a nichey business. They screwed up. Part of the other reason is this was a recent pivot over the last 18 months where they shifted to the sort of delegated model in Florida. What they did out of the SPAC is they just said, okay, we're going to land grab across the country.

They took SG&A from $40 million to $120 million in two years, built out of enough all this capacity and the patients didn't show up and they just lit money on i mean they lit money on fire fast forward to this year or so i'll say 2024 they started adding a lot of contracts they're they've got to um ebidop break even in q4 and now you're going to start getting you know 20% incremental margins so the gross margin in this business i looked at that is like 15 or 17 How do you get 20% and grow in a margin with 15% or 20%? This is the other piece of how gnarly this thing is. On the capitated business, the margin is 15 to 20%.

You have a big fee-for-service piece in California, all right? But you also, the fastest-growing piece of their business this year in Florida is fee-for-service. Why? They built the clinic. They get the oncologists. While they're waiting for these capitated contracts to come in, they're open for fee-for-service business. And what they've been stunned with in a pleasant way in Florida was the demand for outpatient

because their service level is so much higher than a hospital and other oncologists, they're getting all this fee-for-service business in. So as that fee-for-service capacity transitions or the, I say the capacity transitions from predominantly fee-for-service in Florida to capitate it over the next two years as you start layering in all these contracts, the margin you're going to go on the dispensing. side's going to go from ASP plus six to full capitated, and on the patient services, which is the in-clinic, you know, chemo, IV stuff, and it's also some hematology stuff. That all goes from, you know, fee for service to fully capitated. So you're going to win, you're going to get a

market. I think that all makes sense, though. I will be honest. You're deep into this. Let me ask the last question. I mean, the same question I would ask when people were pitching Malina Healthcare or all the health insurers. Like, I do. the Medicare health insurance, I do worry, like, hey, even if you're right, CMS is pretty rigid, right? And if they came and they saw this, or the insurance companies, they're like, hey, you guys are all, like, on all fixed costs and you're making a good profit. Like, we don't care that you're cheaper than the hospitals. We're just taking your rates down and you can either go pound sand or you can take it. Like, I do worry, like, just like the ruling from on high,

if that makes sense. You're not, like, I mean, I sort of walked through this on why, like, it's not like durable medical equipment or the skin grafts, you know, because it's a huge piece of hospital earnings. Yeah. And, you know, the big three drug distributors, like, CMS loves them. They're like, you're saving money. This is great. You're on the right side of this. I think the most telling discussion I've had with the company, I did a site business. I got to meet the chief medical officer and they're heading colleges in Florida. Their head, Florida on colleges actually was the oncologist at ChenMed, which is private, but it's like universally considered like the best value-based primary care provider out there, he switched over to T-O-I in 2022.

And I had this whole talk with him. He's like, this is the way it's supposed to go and whatnot. The most illuminating conversation I had with them is Katrina comes off patent in, I think, 2028. And I asked them, I was like, what do you think happens? Do you think it's just a one-for-one immediate step down as biosimilars and generics step in? Is it going to go down? And they both, like, immediately looked at me.

They're like, no way. I go, so you were literally, they're like, arnologists aren't going to move that quickly. And everyone's going to play the game because it's over 95% fee for service. They're like maybe over four or five years. It's going to converge to the lowest, like, not even the lowest cost, Katrina, but like a lower quartile contrude generics. They're like, it's going to take years to that play out.

I go, so we could literally be making 20, 30% of the company's profits just on generic Katrina versus the benchmark. And they're like, yeah. You know, I remember we a long time ago, there was a roll-up by back that was just like, hey, this was over the UK, I believe. But it was basically what you're saying, like, hey, you buy old brands after they're off patent. And this was like 10 or 15 years. And there's still some doctors who just like prescribe the brand and you've got a little bit of pricing power. It's not like the greatest thing in the world. But when you pay a nice multiple, it's like it's actually a royalty stream. That's really interesting. Let me go back to some of the stuff.

though for people for people listening just very we talk story about it let me give you everybody the valuation number real quick okay this thing's trading at 0.7 times revenue it's got it's gonna have zero EBITDA in Q4 it's been negative EBITDA I think it's gonna do 20 to 40 million dollars of EBITDA next year I think you're building up to 75 million bucks of EBITDA by 2027 exit rate there's about 130 million shares net debt's about 40 40 million bucks my target I think this can go to like two to three times um sales, if you really believe in it, because the TAM is so big as they execute more states. But this is going to be, it's going to be time as people buy it. Street numbers are also insanely low. They've beaten and raised all year. So I think the street revenue number for 2026 is about 600 in change. Don't quote me on that. But you're going to get guidance coming up.

And I think just mathematically, I think you still have a lot of upside on the annual guide. So I'm going to start thinking about this when it gets closer to two times revenue if I'm so lucky. But I think there's just a ton of valuation room if this thing starts working. And I think the exit here is likely private equity, you know, one of the private equity back your drug distributor back guys shows up and buys you. It's it just worries me because this, I mean, look, this was, this was the piss for all the value-based guys. And a lot of them did get taken out.

I know, but there's no, there's really no MLR risk. And it's also, like, to add, though, to your bear point, like, EVH really scared a lot of people because that was the value-based oncology name, and it's worth it for people to go through both. Like, EVH is not really that great of the business, like high customer concentration, whatnot. But anyway, I'm going back to my notes from at the start of the episode when you were talking about launching Lake Bonnet. You mentioned pitching to a PM as a senior analyst versus pitching as a consultant or maybe, you know, writing on Lake Cornia.

I'm interesting. How have you seen people, you know, work with you differently as a consultant or when you write something up versus when you've kind of been the senior analyst or the head of research or whatever it is at places? I think the biggest thing is when you're a consultant and like, look, I've done well enough in my career. So it's part of that too where like if people don't like the name, I'm just like, okay, great. Like I'm not going to take it personally. This isn't my job. I don't need to like, I'm not upset about two. things. Whereas, you know, I'm just, I'm upset that you don't like my idea, but like, okay, I got other clients I can pitch this too and I'll find another name. When you work for somebody, how many good ideas are you realistically going to go with? That's the tough thing, right? Like, you're an analyst and you're convicted and it's just, it's why most analysts don't last for

forever with the PM because you get one name, you do a lot of work, you get convicted. Hopefully the PM likes it. But if they don't, like, if you're a 10 out of 10 and they're a me, it's really hard no matter which way. Exactly. You have this. transmission problem, which is, you know, and then even if they like it, they're going to buy it when you don't like, you're going to, you know, you're not going to trade it perfectly, you wouldn't size it. And so you have this, it's a transmission problem of things that you would love to put in the book, where you would like to put in, how that actually happens. And then your compensation, you know, as a function of the latter versus the former, you know, and then I think it's something, you know, your roads are buddy too, from one main, one. One, one. One, one main capital, he did a great interview, I think it was like a month ago, and he made this point about going off on your own that like investing is a deeply personal experience. And it's like art. And at some point you just reach a point where you just say, you know, I want to do it my way.

And that's, that really resonated with me because it's like as I've gotten older, my willingness to sort of engage with people when they don't like something. I like having the veto of, oh, you don't like it. Great. I don't know anything. I'll move on to the next one because what you want to guard against, and I think one of the other reasons why I love the substack versus sort of how I was doing this before, which is getting high conviction, pitching a memo, and then screaming about

something on Twitter, is you don't want to, you want to stay intellectually as open as possible. And the more debates that you have to, like, vociferously defend yourself, I think it's a negative and it really impacts your ability to think, clear. and cogently, you know, the big decision I made just, you know, going back in 2025, I mean, it was my decision of the year was I was very prolific and public on my feelings on Sable offshore. And we got back involved, you know, a couple weeks ago. And we'll see how that plays out from here. That's certainly like, you can do five podcasts and not from here. But a name that I was very public on, you can do organic dicing. And I sold the whole position in the 20s.

and I, like, I need to keep that ability to do that. And I, you know, and the way the news flow on Sable Works, you could do a podcast on them every day. Yes. Let me ask you different question. One other thing you mentioned at the start, and this is something I've been thinking a lot about, having a small position and ramping it up as it inflats, right? And the reason I've been thinking about is a lot is because most of the big successes I've seen are very similar what you think. I'll give you point. My friend Jeremy Raper, right? He, Twitter, when Twitter

was getting, assuming Elon Moss to close the deal, you know, I specifically remember there was something that came out in a court docket and Jeremy was like, he'd been following it, he had a small position, I don't want to like give away his trade and I could be misremembered, but it was and he was like, this is the inflection, Elon is done, he cannot win this case and he pulled the trigger. And like my, I just had that one in mind because it's Jeremy, it was kind of public and but the best guys I see do this they're waiting they're waiting and then there's the inflection and boom they hit it right now I do worry on the other side like it's very easy to see that and pull the trigger but you know you know how works you're following in deeply and you see

something and you're just so convicted there's a lot of selection bias and also the guys who have seen blown up have been hey I see this it's the inflection boom I pull the trigger and you're wrong so I guess I want to ask you like how do you weigh oh this is the inflection versus oh my gosh am I just confirming my own biases and, you know, it's very easy. I love this, I love this. Oh, all the news is positive. I was wrong and it's a zero. So how do you kind of weigh that as you're looking for the inflection?

Well, look, the biggest defense against all of this is keep keeping a liquid portfolio and having retaining the ability when you're wrong to hit the eject button as soon as possible. Like we're not burdened, you know, by a $15, $20 billion fund. Like, I'll just go back. Like the first guy worked for, I mean, there was two of them. ran the fund one guy did everything but run the money one guy ran the money but people would be like oh you see the returns they'd be like well it's not that great i'm like you try to run 20 billion that 14 net was 4% ball tell me how that works for you it's like you know every dollar of a um

just gets exponentially more difficult you know for us we're hanging out super liquid things and i mean i think that's that's important i sort of like with twitter and with substacks sort of and, you know, keeping myself as mentally open as possible. I think that that's a big piece. The second piece is at this stage, I kind of know, I felt what it feels like to be right enough times. And so holding on and being like, okay, I'm going to get conviction. It's going to come.

And if I don't have it, all right. Or if I do that and I'm wrong, you know, we can exit because it's liquid. I think. Let me push back on one thing you said. You said a few times, if I'm wrong, I can exit because it's liquid. And I think I would guess that you are a much better trader and changer of your mind than I am. But like, Intelgo, I'm sure you don't know this. But this is a company that a lot of people I looked at, I looked at deeply.

I, to me, I saw clear red flags. And a lot of people looked at it. And a lot of them got out. You know, they bought in at 2030. It ran up to 200. A lot of them got out there. A lot of them got out 100. But one day you woke up and, hey, the C.

are fraud, the stock's been halted, and it's going to open up and probably be a zero, right? And not investing in a price, I don't know. But I guess my, that's an extreme example, but you keep saying, hey, if I'm wrong, it's liquid, I can exit. I mean, sometimes you wake up to these things and you're wrong. It's not liquid. It's not something. Yeah.

If you have something with downside jump in it and like, you know, Sable's top of tajure, whether there's actually downside jump, jump to the fault, as I would say, in a CDX context, you know, or a risk art trade that's got break risk, however you want to describe it. You know, when you're in names, you know, I'm going to remove fraud unless it's like fraud is clearly out of that. I just use Intelgo because the stock literally got halted. So no matter how could it. Well, because of Tano, certainly, like, it was out there that like,

hey, maybe this guy's sketchy. It was a spack. Like, you had to ascertain like at least a 5% chance of that, right? Or something with huge quarterly earnings volatility, like a consumer retail name, something where, you know, you really get in there and you're like, wow, most of the stock balls that cornered. So I think I would wrap. that all into this, which is a function of being able to size something is directly related to

your ability to ascertain and feel conviction on your downside outcome. That's it. And so, like, you think about, let's just start with Sable because this topic is your reverse, you know, T.E or T.O.I, right? Like, you have to respect the fact that Sable, like, maybe the California Coastal Commissioner or the governor of California, like, here's the menu of scenarios where you could wake up to you know, down 25, down 40 percent, right? And like, that's realistic and that has to impact sizing, right? And so because you're trying, like, think about it three-dimensionally, right?

There's a few aspects to making a lot of money. There's the stocks that you like, right? And then you think about the total potential P&L in a year, right, from the price that you like it to the price that it goes. And you're trying to capture simplistically as much of that bar, be it horizontal or vertically, I don't care how you think, you know, pick one. You're trying to capture as much of the bar as possible. And it's like the whole Bernard Baruch or some other trader was like, you know, you miss the first 20, you miss the last 20, you capture the middle 60, right? And that's like if you're doing it perfectly, that's sort of Steve Cohen too as well, which is never try to call the bottom that the market will tell you and wait for a breakout,

okay? The second order aspect to that debate is sizing as well. So it's really not vertical or horizontal bars. It's really this cube, right? Now, the other side of that cube, you know, the potential P&L from $10 a share to 20, say maybe that's the range of the year, how big were you at 10, 11, 12, 13, 14, all the way up to 20? And then there's the downside, you know, below the iceberg, if you will, risk that you're taking, which really leads into portfolio management as well. So it's not just, are you right? So take TOI. I follow the name for three years. My probability of being able to ascertain and understand and correctly projected is it in my circle of competence. Well, it probably wasn't at the beginning three years ago when I put

the train up. When I really ramped the thing up, I'm like, I think I'm right. My conviction level of me missing something is very high. Here's the bounded downside. I can really size this thing up. So that all wraps up the one thing. And I would agree with you. Like, I've been guilty of this as well. like there's certain names, you just can't size. You know, let me, let me ask, so we mentioned Nevis at the beginning. And for those who don't know, Nevius is the old Yandex. They basically, you know, Russia invade Ukraine, Yandex gets forsold. They emerge, and rough numbers, they emerge, the stock set, let's say 18.

They've got $15 per share of cash, plus kind of three startups that are worth anywhere from depending on you ask zero to $100 per share, and they move into the data center business, right? That's one. So I just said $18 per share with $15. of cash. Now, they will burn cash on the data center business, right? Now, let's just compare it to the other FARC stream, Sable, billion dollars of debt, loan tax on mobile, California government does not want them producing. If California government wins, they'll never produce, a billion dollars debt, it's a zero, right? One of the things I've struggled with,

and I use those because they're two, we've mentioned them on the podcast, and there's two diametrically opposed, like, how do you have those two in the same book? Because for me, like, I looked at a lot of net cash biotech this year, right? Like trading below net cash. How can I have those in a book with literally anything else? Because on those, it's just like kind of a liquidation to cash play. Very little downside unless management likes it on fire, which one or two of them, they did light it on fire.

But, you know, it's tough to do that. How do you have something with just such diametrically risk, different risks in the same book? Say both of those, if you say Sable in 2024, like we put the trade on, actually in 2023 when the great creaker we don't we don't have to only be stable in nebius no no but i'll use this it's a key point though which is stable in 2023 i bought the warrants at a dollar preclose and for most of 24 as well i would argue the duration of the investment whether you were right or wrong was sufficiently long enough such that your downside was protected by vol you know these are

100 vols scenarios and this is where i was going back to right tail if you if you are correct that people will care and the right tail potentially will be the perception of right tail is big enough right so sable people are like okay if you're right it's a hundred bucks the stock you know is trading 15 bucks before Santa Barbara settled with them on the valves in 20 in the summer of 20 24 um you know what is it just an option theory right like they had enough cash the coastal commission hadn't woken up yet you didn't think you could die but like if you were going to die like you were going to die two to three years from now when you're sitting there in 2024 so like what is that worth it's worth a time hard and nebius too like that's what got me there which which was okay the some of the parts

is kind of helpful but like okay if we play this out these are the best data center guys out there they're like execution jettis they have the best relationship with invidia outside of any company in the united states and people already you know they're vetted by institutional investors and whatnot I was like, okay, this is probably, you know, I was like, this is probably 75, how wrong I was. So it's sort of, you know, a 10 by 75, but with two to three years of duration, okay, so then, like, even if I'm wrong on the sum of the parts map day one, like, is it really going to get worse than 15? And what, this is where time becomes the enemy for you and you have to be disciplined as well. This is where liquidity, right? So Sable or, you know, Sable did, you know, struggled.

It bounced off 33 times in 2025, but you got late summer after the GEC ruling and nothing was happening with the fire marshal. All of a sudden, you know, when you were leaning on in 2024, which was an option with massive duration and massive, massive option. Now your data is really starting to stick down. It's really compressed. And so if you're not going to lean on valuation traditionally, you have to at least lean on option theory, which comes down to right to. potential and then fall. That makes total sense. No, it's a really, and you know, I will say,

I don't know if you're filing the Warner Brothers Paramount Netflix deal. It's probably a little bit larger than the stuff you normally. I have, yeah. Yeah, I get a lot of people who are like, oh, how can you own Warner Brothers right now? Disclosure, I own Warner Brothers, I guess, but how can you own Warner Brothers right now? Like, there's antitrust risk. I'm like, look, there is going to be antitrust, a discussion on antitrust, and we can have that. But in the next 30 days, you're not going to.

to get a DOJ or FTC ruling. Actually, the only one you could probably get is positive if they cleared, if they cleared paramount. You're not, like, that's a conversation for a different day. I would go further with this point for people. And I bring this up, like, so after I left distress dead, I went to a big pod shop. They relaunched their event driven group. I was the non-risk garb guy on the risk carb team.

So I got to see a $4 billion risk art book. And like, this was right during Abby Shire and the inversions and whatnot. My team's out. Oh, boy. The, what was it? It was the, what was the inversion apocalypse? There was two of them. One of them was Pfizer-Allegan.

I remember, and then I'm not going to remember the other one. If you said, it's like, it's another drug company. It was Pfizer-Allergan, I think, and it was Arbigan. Yeah, yeah, but, you know, then my team watched, you know, I had you find a New Burger Berman. They're still there. It's not my team anymore. I mean, it's the 2020.

But I got to see, you know, seven, eight years of risk card. I think it should be mandatory for any event-driven investor to study the Acorn Roken merger. So, for Sennius... Oh, I know this one, yeah. For Sennius, this German company, was buying Acorn, this generic drug company, okay? They sued over a Mac.

The material library changed. It was going to Delaware Court, and nobody wins on a Mac. Now, it didn't kind of look like Acorn live. Like, their facility didn't work. The stock was like, I think the takeout was at $32 or $33 all cash. the stock was 12 bucks into the trial. And you had this 25-day period before the trial started.

And the stock went from, you know, 11 to 12 to 18 during those three weeks. And you talk to people, and by the way, presentius one, and Gordon was zero, it went bankrupt. But to your point, and this is sort of a downside risk and narrative, right? This is everything. Everybody, it was the most genius trade watching that thing unfold because the people long. you had a lot of people were short and all the long guys were like everybody's short you can't die before the trial there's a trial i know and the the thing peaked a day before a day before the trial started the stock peaked and you know probably it went from 18 all the way now but

they're like 30 you know do your probability wait 33 versus zero I also don't think people thought it was a zero zero at the time right so I don't think people thought that and look until the trial, like, the company's always going to, especially your company that bad, they're always going to risk it for the trial, right? They're always going to take that risk. And having into the trial, you mentioned peaks today before, because guess what? There might be a settlement, right? Every other ME, like ACOR and Fresno is so interesting because every other MEE case has basically

settled because even the buyer knows, like, hey, we wanted this strategically, right? So if we can get a price cut, the seller generally knows things aren't great if they're getting sued. So there's generally a lot of room for a cut. is the unique case because they were supposed to be running clean rooms and there were cockroaches running around the clean rooms. Like, that's the one unique case. And it's, it's just a fact, so, you know, timeline and monetizing you thinking through and option, like, all this stuff, it comes together. And like the more, it's one of the other lessons, which is you can, you know, why do I write, going back to the subject? Why do I write it, you know, I run on eBay, PayPal,

people are like, why are you doing it? Because in everything, there's a lesson. And you don't know where the lessons are going to come together. And being free to explore is just, it's so fun. Going back to Warner Brothers for you, you know, I looked at it, I put on some Netflix. I took it off because I just, other stuff was more exciting. But like Netflix is super, you know, where's it now? And I haven't even checked. Let's go pull up the Handy Bloomberg.

It's, uh, 90. I mean, Netflix is super interesting to me. You know, they freak asshole finally. inflected, the thing's pooping, pooping cash, you had a negative guide into it that, you know, on a single stock basis before the deal happened, right? You had a broken bull story that looks very secular to me. Then you have this, which is like, you know, even people at the long-only community throws up their hands, which is, you know, is Netflix going to raise their price? And if they don't raise their price, the stock's going to be in merger purgatory for two, three years.

The best I could hope for is T-Mobile during the Sprint merger, which I thought was going to be in purgatory for 18 months. It actually, the stock, T-Mobile did very well. But, like, that is an outlier of an example of something facing regulatory risk that works. So if you're long Netflix, what you're really rooting for is, you know, it completes on, you know, your existing terms. That would be, you know, resolution would be helpful. Yeah. If you're on Netflix, you're hoping Paramount comes in 34. The best thing is you lose and they don't raise.

The second best thing is you complete the deal on your terms. The worst thing that could happen is they bomb and then they take out a bunch of debt. From a Netflix perspective, you know, I think it's interesting because, I mean, they did have soft earnings, but I do think they bought Warner Brothers and they've never bought anything, right? when this came together, when this all, I kept telling people, man, Netflix has bought one thing in their entire history, right? They bought that small comic book publisher. These guys don't buy anything. They're not going to buy Warner Brothers for, you know, rounds to a hundred billion dollars. No effing chance. They bought them. They won. And they, you know, it might not have been the best best bid, but it was very close to the Paramount bid. Warner Brothers thought it was Spear or whatever.

I think Netflix is going to have a little bit of taint on them for the next couple years just in terms of investors are going to wonder, hey, what was Netflix seen in their business that they needed to go buy Warner Brothers, right? And now Netflix is going to say, hey, great synergies, we can run it the best, all this sort of stuff, and they're probably right. But I think investors, whether they buy Warner Brothers or not, for the next two years, I think investors are going to be saying, what was Netflix so worried about that they needed to do one of the large seven-eight deals of all time from this company that does everything organic? Fair. I mean, I think that's kind of the thesis from 110 to 90 on the way down.

You know, because you had the earrings miss into this. And I think that's where I was sort of getting at, which is, you know, if they don't screw up, like, you know, or if, you know, they lose and they walk, that would be great. I mean, I think the other side of it, which, you know, who knows? The synergy number looks really juicy to me on the low side from Netflix. Only $2 billion of synergies seems exponentially low. But so I think Netflix has really hurt more on just the potential. merger purgatory it's interesting my problem with risk arms since i've left uh hedge funds though it's like i go through like once every other year i feel like i find myself in a merger arm

situation i'll put out a position and then two days later i'll remind myself i don't need to do this anymore i know yeah i'm just going to find you you're doing and you're like oh cool i'm paying for 10 percent upside 15 percent upside and then you're like oh if i you know hit hit They're not against the smartest people. Everyone's looked like, you know, you've got to look at a hundred of these situations to find something fall out. And it's usually the weird thing that falls out. And that's why I'm sort of fixating it on Netflix because these three-way mergers, they start pricing weird things. And I think most people sort of get that.

Netflix, the other thing, I mean, I've got, again, big position of Warner Brothers, but they're so big. I do like the, everybody says when something really big happens, like, hey, there's not enough risk or capital in the world. to close the spread. And I've never seen for Warner Bros. When I was putting this on, I've never seen a stock get a $30 per share topping offer or hostile bid. And the day it came out, it was trading at 27. I've never seen a company in a bidding more trade below one of the cash bids, which is what I thought was so interesting there. Agreed. And then they went hostile. I mean, it's just the political, I mean, it's a fascinating. We haven't seen this, you know, for, I can't remember the last one that was really

certainly one was we had Pfizer who was bidding them in MetSara I mean

literally just two months ago we saw that was it Nova who bit against them I can't remember but

before that it had been a while maybe Disney Fox Comcast but okay we're way off topic

yeah this has been great you know we're gonna schedule follow up because I have

I'm looking I have 15 questions and notes on Cesar's and Vegas that we're not going to

be able to get to today but this has been awesome I'll include a lake to Lake

Amelia substack in there. I was a pretty, pretty damn early subscriber, and it's fun reading all the eclectic stuff and everything. But John Arnold, Lake Cornia, thanks for hopping on, buddy, and I'll hope to see you soon. I have a good one. Thanks so much. A quick disclaimer. Nothing on this podcast should be considered an investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advisor. Thanks.