A small cap holding company with an enterprise value lower than the cash and investments on the balance sheet
Dates analyzed: (12/6/21-12/14/21) Market Cap: Around $50 Million
Disclosure: I am long BTN
Ballantyne Strong is a small-cap (around 50 Million as of this writing) holding company compromised of 1 major operating business and 3 investments. The company was founded in 1932 and began to manufacture and design film projectors. it then went public in 1995 and focused on the screens and projections business. The story gets interesting in 2015 when Kyle Cerminara and Fundamental Global took a large stake in the company and on November 24, 2015, he was sworn in as Executive Chairman and CEO of the company effective immediately.
This shift can be felt in the initial paragraphs of the 2015 Annual Report:
“The Company elected a new Board of Directors at its 2015 annual meeting of shareholders on May 13, 2015. Since that time, the newly composed Board has been reviewing and considering the company’s strategy going forward and making changes in how the company views its investments and capital allocation decisions.
The Company currently has two business segments, Cinema and Digital Media. The Board expects to continue to invest in these businesses and expects that these businesses will continue to generate free cash flow for the Company.
As of March 3, 2016, the Company has no long term debt, approximately $20.6 million in cash, and approximately $5.6 in investments in other public companies.” (2015 Annual Report Link)
The next year it was clarified to shareholders what the future held for BTN:
“Pursuant to a settlement agreement entered into with Fundamental Global Investors, LLC and its affiliated funds to settle a pending proxy contest, the Company elected a new Board of Directors at its 2015 Annual Meeting of stockholders on May 13, 2015. On that same date, the newly composed Board appointed Mr. D. Kyle Cerminara, the Chief Executive Officer of Fundamental Global Investors, LLC, as the Company’s Chairman of the Board. The Board subsequently appointed Mr. Cerminara as Executive Chairman in September 2015 and as Chief Executive Officer in November 2015.
On January 18, 2016, the Board appointed Ndamukong Suh as a member of the Board, and on May 23, 2016 at the Company’s 2016 annual meeting of stockholders Lewis M. Johnson, President and Co-Founder and Partner of Fundamental Global Investors, LLC, was elected to the Board.
The new Board has undertaken a review and consideration of the Company’s strategy and has implemented changes in how the Company’s businesses are organized and how the Company makes investments and capital allocation decisions.
The new Board has implemented a strategy focused on making optimal capital allocation decisions across all of the Company’s businesses and investments. The Board intends to continue to invest in and grow the Company’s Cinema and Digital Media businesses. At the same time, the Board intends to consider and make investments in other industries that are expected to produce higher returns on invested capital. This may involve investments in public companies or the complete acquisitions of other businesses, which may be within or outside of the Cinema and Digital Media markets. Investments in public companies may involve the Company taking control positions or seeking to effectuate positive change through board representation or other shareholder activism” ( 2016 Annual Report Link)
Since taking over in 2015 management has transformed the company to look a lot different than when they first took over. There have been some assets divested and sold for cash and others assets used strategically to acquire equity. He has also used the extra cash on the companies balance sheet to make strategic investments in other public equities, both of them are also large holdings of the investment partnership Kyle Co-founded in 2013, Fundamental Global (FGI), which has a focused portfolio of companies, most of which he has had significant influence over.
Currently, the company is made up of 1 operating business; Strong Entertainment, and 3 investments; GreenFirst Forest Products, FGF Financial, and Firefly.
The main operating business of the company is Strong Entertainment. They are the largest manufacturer and distributor of premium large-format projection screens in the U.S. with a 65% market share. They have an exclusive deal with IMAX, Cinemark, and, most recently, AMC Theaters which signed an exclusive deal in January of 2022. In addition to movie screens, they also manufacture curvilinear screens, “Eclipse”, for theme parks, museums, schools, as well as for special events and military operations. For the nine months ended Sept 30, 2021 product sales were $11.8 million vs 11.3 during the same period in 2020.
Along with the sale of the screens themselves, they also have reoccurring service contracts in which they provide maintenance and troubleshooting for all projection equipment and screens. In the most recent quarter management highlighted the growth in the services segment which might accelerate over the next few years as cinemas transition to an outsourced services model and as they upgrade to laser projection.
In Q3 2021 services revenue increased 43% YoY and recurring revenue was up 41% YoY. For the nine months of Sep 30, 2021 service revenue was $5.1 million vs 4.1 million in the same period in 2020.
Looking back into history for the years 2017-’18-’19 the strong entertainment division was able to produce around $10 million a year in operating income. In ’19 they produced $6.6 million largely due to a major disruption in their manufacturing facility. (I think I heard something like the roof caved in?)
Large projections screens and the services attached to them are like the blade and razor business. COVID hit in early 2020 and the OI for the year was $2 million. For the nine months ended SEP 30, 2021 they earned $3 million in operating income so far. I wouldn’t be surprised if operating levels are able to rise back to the levels where they were before, given the movement to new laser projection and cinemas transitioning to an outsourced services model.
The overall Cinema industry had a rough 2020 and in late October overall box office sales already passed the levels set in 2020, however they remained down from the 2019 levels by a large margin. According to the website the-numbers.com the most recent box office numbers come in as follows: (12/7/21) Total Box Office Gross: $3.6 billion which is much lower than the $11.2 billion spent in 2019. The headwinds are still present and the large transition to the streaming economy has posed some threats to the cinema business. Along with these, there is a large customer concentration so there is the risk if they lose one, there will be a revenue hit.
There are some solid tailwinds to acknowledge. The growth in the eclipse business has been solid, with revenues on track to double in the year 2021 and the proprietary paints and coatings used on the screens themselves are the most compatible with the next generation of laser projection. There is also a large backlog of movies that were put on the sidelines when COVID hit. The numbers so far are showing good signs with October breaking an all-time box office record for the specific month.
All in all the Strong Entertainment division of BTN is showing positive signs but one of the most interesting developments was the information of the IPO of Strong Entertainment. This will not be a spin-off but rather an IPO at the subsidy level and management has said in earnings calls they will remain the majority shareholder post offering. By unlocking this subsidy to the public markets it will better recognize the value of SE which might be over shadowed by the holding company structure.
The other big portion of BTN is the investment portfolio. On their most recent investor day, they released a slide deck with the value of all their investments and cash with a price tag of $49 million this is without the value of the screen business. In the same presentation, they compared this value to the current enterprise value the market set on September 30 of $47 million.
These investments are going to be a big way to judge capital allocation going forward. Some of these investments began all the way back when Kyle took over in November of 2015. They each have their own story and all of the investments except for Firefly are also large holdings in the Fundamental Global portfolio. These will be a way for managment to demonstrate execution ability when we look back in 5 years.
GreenFirst Forest Products
We will begin with the one who has been making a lot of noise recently. The investment began in 2015 when Kyle used some of the BTN’s money to purchase a stake in Itasca Capital, which at the time was nothing but a shell company and a pile of cash. Larry Swets Jr (Also a large shareholder and CEO of FG Financial) approached Paul Rivett, a retired president of Fairfax Financial, and was curious if there were any deals he was aware of that Itasca could participate in. In 2020 Rick Domain (CEO of GreenFirst) approached Mr. Rivett, with who he had done prior business, to discuss the potential opportunities in the forestry space. There was interest from both parties and Mr. Domain began to search for an opportunity.
In late August of 2020, Mr. Domain presented Mr. Rivett with a potential investment in assets located in Kenora (Kenora Assets) and Mr. Rivett called Mr. Swets Jr to see if the company could be interested. They were but the price was too large and Itasca didn’t have enough funds to cover the purchase. After a few months, Mr. Rivett and Mr. Domain concluded that a public vehicle would be the best method to finance the acquisition of the Kenora Assets, as well as potentially other assets. They both decided to invest in the entity through a private placement, giving them exposure on the platform they desired.
On August 13, 2020, the company was selected as the winning bidder for the Kenora Assets and closed on October 6 of the same year. For the all-in purchase price of $11.5 million. Soon thereafter this minnow of a company went after a whale and began to look further into another acquisition presented by Mr. Domain but this one would require outside financing due to the sheer size of the deal.
Having put alternative financing in place and negotiations are taken care of the company announced on April 12, 2021, the execution of the acquisition of the additional sawmills and newsprint mills for a purchase price of $214 million.
What started as a small shell company with some cash on the balance sheet, named Itasca Capital, has thus transformed into one of the top 10 lumber producers in Canada. They change the name to GreenFirst and Rick Domain took over as CEO.
Going into the transaction BTN owned around 7 million shares and in the recent quarter, they doubled their ownership to 15.3 million shares giving them a stake of around 10% of the company.
When it is all put together GreenFirst is a collection of sawmills that can yield around 900 million board feet of capacity. The Kenora assets are still idled and are in discussions with the Government in Canada to open with two operating shifts.
The other assets (Rayonier Assets) have been fully acquired and on their most recent quarterly earnings presentation, these assets were operational for the last four weeks of the 3rd quarter. During that time the mills reported net sales of around $30 million and shipped about 30 million board feet of product. To give these assets some context they produced around 600 million board feet in 2020 and 2019 and in the fiscal year 2020 they generated around $100 million in operating profit on around $500 million in sales. These numbers were done with much lower lumber prices.
This company is highly dependent on lumber prices and is subject to the volatile swings of the lumber market, but management holds a very bullish view on lumber prices. This isn’t a certainty but if they are close to correct on the idea that on average lumber prices will be higher in the future than they were in the past, then the purchase price of these assets will look like a steal. They paid around 2-3 times operating profit for the Rayonier assets and the Kenora Mill is still on the sidelines. This is a top ten lumber producer in Canada and it was built in less than 3 years through acquisitions. Should the lumber market tank, the margin of safety built into the purchase price can provide solid downside protection.
Management at GreenFirst has laid out a plan for the short term and the long term for the company of 1) getting operating efficiencies and lowering costs and then 2) growth through aqusitions. They are not the only one’s thinking this way as we have seen other competitors aquire mills with simialr capacity of GreenFirst for a price 2-3x more than the price for the Rayonier assets.
I am not a lumber expert but here are some resurces I found helpful while trying to digest this investment:
BTN owns about 20% of FG Financial and this too is an investment made at the beginning of Kyles's tenure as leader of this company. In the beginning, the name was 1347 Property Insurance Holdings which was a property and casualty insurance provider in Louisiana, Texas, and Florida. Today the company is much different, it changed its name to FG Financial in December of 2020 to “better align with a future business plan”. Now the company has two large focuses 1) loss-capped reinsurance and 2) SPAC and SPAC-related business. They have a mission statement which is present on every monthly presentation stating;
This mission statement drives their main strategy which is to focus on opportunistic collateralized and loss capped reinsurance contracts and allocate capital to SPACs at the sponsor level. They currently have two reinsurance contracts and have completed two SPAC investments at the sponsor/founder level. They have made it clear what the stagey is laying it out in 3 points on their monthly presentations 1) write opportunistic reinsurance 2) Become a leaving SPAC Platform 3) Grow Assets under management.
To someone who knows little about insurance Kyle broke it down simply on The Business Brew Podcast (link) when he said an insurance company can either be conservative with underwriting and aggressive with investments or vice versa. Which is the strategy we are seeing here, conservative reinsurance and investments in SPACs which can be viewed as volatile and aggressive.
SPACs have been all the rage lately but there is a major difference between someone sponsoring a SPAC who has no financial industry experience and a SPAC sponsored by industry veterans like Joe Moglia, the founder of Ameritrade. The SPAC platform will be used as a way to help companies through the process of going public giving them exposure to seasoned professionals who know the business and can provide mentorship to these companies which could provide tremendous value.
When I read about this business it reminded me of a lesson in investing taught to me by Mohnish Pabrai. During one of his talks, he discussed the idea of a “spawner” business which is a business that spawns off other businesses.
Management is trying to position itself as the team of choice for a company looking to go through with a SPAC, because of this they get to invest in founder shares which are low-priced shares in the common stock of a corporation. The other side of this is you can lose all your money if the deal doesn’t go through. See why they chose conservative underwriting?
For example, they put up around $5 million for both of the SPACs they sponsored/co-sponsored and these shares (excluding warrants) are now worth around $12 million. Both of the companies are trading near historic lows but FGF still maintains an ROI of over 100%. One day a deal will fall through and they will lose their investment but if they have the ability to take multiple shots on goal, the risk/reward profile is attractive.
Here is the breakdown of their ownership:
861,690 shares of OPFI (valued around $4.3 million) plus 358,419 $11.50 warrants
533,000 shares of HGTY (valued at around $7.2 million) plus 321,000 $15 warrants.
This ability to own founder shares in each of the companies they participate in gives them an immediate return on investment which is very attractive. Over the long run the SPAC platform will be the crown jewel and if they can become the partner of choice to go public with it will give them an advantage. This moat widens with each new deal and the reputation grows along with it.
The way this investment came about is an interesting case study in capital allocation.
A few years ago there was another business within BTN called Strong Digital Media (SDM). This arm provided advertising services and experiential marketing services. Some of the business was conducted through advertising on top of Taxicabs in major metropolitan areas and other off-the-beaten path advertising ideas like using glass trucks at music festivals. But on May 21, 2019, the company entered into a collaboration agreement and a unit purchase agreement with Firefly Systems, where SDM made 300 digital top on taxi cabs viable to Firefly.
Instead of getting cash for the assets, Kyle elected to receive shares in Firefly instead. Then in August 2020, SDM entered into an asset purchase agreement with Firefly to sell certain assets to them from their strong outdoor unit in addition to the 300 taxi tops they were already operating under the other agreements.
As of September 30, 2021, SDM held approx $5.7 million worth of Firefly B-1 shares and $7.4 million worth of Firefly Series B-2 shares. Bringing their total investment to around $13 million in Firefly, this investment was gained by swapping out assets for equity. An interesting move on the capital allocation front, one which can demonstrate the creativity of management.
Firefly defines itself on its website, fireflyon.com, as an Internet-connected, high res smart screen on taxis and rideshares in the most impactful markets in the US, including LA, San Fran, Chicago, Miami, and New York. It is a first-of-its-kind street-level media company. Companies are able to target their audience more effectively and drivers are able to earn more by employing the screens on top of their car, around $300-400 more per month.
Before signs on Taxis were static and whoever was around the given vehicle was able to view the advertisement, which means you can get a lot of faces to view your sign but with the internet connection and the digital make up of the FireFly signs make it so the signs can be focused on given locations and can change if the vehicle moves from one “zone” to another.
For example, if you are Nike you might want to drive traffic to your store, before you would buy space on a static sign and wherever the car goes, so does the sign but now if you’re Nike you can set up a marketing campaign to run only around 2 square miles of your store thus making the campaign more productive if the car moves out of the desired location, it changes to another campaign. These dynamic campaign types give the creator much more control over the entire campaign. Companies want to make sure each dollar is being spent to achieve maximum value. These types of campaigns give much more value than the static signs of yesteryear.
This idea of maximizing every dollar spent is only capable because on top of being a digital sign company there is an arm to Firefly called, StreetIQ which is where they take all the data produced from the signs like latitude and longitude and leverage it to make the campaigns even stronger for their clients. This ability to watch the campaign effectiveness in real-time and tweak them as they go to make them stronger is a huge advantage over older ways of taxi top advertising.
Recently Firefly made a big move and acquired the largest and most established mobility media company in the U.S., Curb Taxi Media, giving them 10,000 more taxi tops which is a huge scale addition. Which a company like this, scale matters, and acquiring it will be the difference between them being a huge advertising company and one that falls behind. When you take a company with this kind of unit economics the game is get big, fast. This is a network business and the more nodes in the network, the more valuable the network, see Metcalf’s Law.
Firefly is a private company so the cost of the investment is carried on the balance sheet as $13 million. They have succeeded in raising more capital for growth and revenues have been accelerating with an exit as either an IPO or a SPAC merger ( I don’t want to speculate but cough FG Financial cough). It is more reasonable than not to assume the stake in FireFly is worth more than the current-carrying cost on the balance sheet.
In the business description of the 10-k, there is mention of being an authorized reseller for Blink Charging Co. ass of right now, to my knowledge, they don’t own any electric vehicle charging stations but this could represent an opportunity in the future.
They also have a technology incubator referred to as Digital Ignition, there isn’t much information about it in financial reports so it is very small compared to the entire enterprise but might be the source of some value in future years.
Kyle is the overarching commander of these ships but one can not do it alone. The need to assemble a team for all of these to work out is as important, if not more important than making the capital decisions alone. There are teams in place for each entity so here is a small rundown of the “family tree”
Fundamental Global: Joe Moglia and Kyle are the Co-Founders. Joe is a name you might not have heard of but I am sure you are aware of his product. He is the founder of Ameritrade and built the company into one of the largest online brokerage players in the space, he took a company worth around $700 million and sold it to Charles Schwab for $25 billion. Kyle was the analyst covering Ameritrade back in the early days and was the one to pitch the Board of Ameritrade on merging with TD Waterhouse, which happened, leading to the name we all know as TD Ameritrade.
Together in 2012 they both came together and put their family money under one roof called Fundamental Global and have been focused on compounding capital through focused positions since.
FG Financial: Larry Swets Jr is the CEO of FGF. When talking about Larry in a podcast, Kyle referred to him as his partner. I am not 100% sure where the origins of the friendship began but they have been involved with each other for a number of years now. Larry has over 20 years of experience in the financial services sector and also has a good amount of wealth invested in the appropriate entities. He is currently on the board of FGF and was recently elected to the board of BTN in October 2021 and also on the board of GreenFirst.
Joe Moglia is also a big player here because his industry experience gives them a leg up in terms of management talent.
GreenFirst: Paul Rivett and Rick Doman, Rick is the CEO and on the board. Paul is the Chairman. Laid out above Rick and Paul have done business together prior to creating go this entity but through the platform have assembled under one roof. Paul is a retired President of Fairfax Financial, if you don’t know this name I strongly recommend a google search. Rick has built a career with timber industry experience dating back to 1988 when he was a director of a company now called, Western Forest Products.
Mike Mitchell, A private investor who replaced Kyle’s seat on the board and owns 2.7% of GreenFirst. He has no operational duties with the company but his seat on the board and skin in the game aligns with all other shareholders and his seat at the table gives him a voice. Based on past interviews, he has experience working with boards in an effort to push for shareholder value creation. It should be noted he is also on the Ballantyne board.
FireFly: CEO and Cofounder Can Gunay. There is not much public about him but from his LinkedIn Page, he got his MBA from Stanford Business school, did a fellowship with Sequoia Capital, and started on the venture route before founding Firefly. He is a huge key player for this company and his most recent decision to acquire curb taxi media is an example of his ability to broker big mergers which could be very influential and value-added for the company. This is still a very young company but he is one of the key players.
Competition To Watch and Resources
Strong Entertainment: Harkness Screens Internationals on the screen’s side and Christie Digital Systems for the installation portion of the business. I will also be watching the box office numbers through Boxofficemojo.com and watching theme park attendance numbers on statista: https://bit.ly/3GQdffk
GreenFirst: The top 5 mills by production in Canada are as follows: West Fraser, Canfor, Resolute Forest Products, Intefor, and Tolko Industries. Most of them are public and reading the annual reports of the big ones will give one a good insight into the industry also some big ones in the US like Weyerhaeuser. Sawmilldatabase.com is a god response for mill data.
FG Financial: Being so new and small, FG Financial faces competition from anyone who writes reinsurance and is involved with the SPAC process. It’s an uphill battle for contracts and sponsorships. Spacinsider.com gives good data on the SPAC environment.
FireFly: A venture company like FireFly faces competition from everyone who has advertising signs on top of taxis and the bigger billboard companies with locations in big cities like Lamar and Outdoor Media. https://bit.ly/33yahhs gives good data on the advertising environment.
• The movie and entertainment industry is forever impaired by COVID and could continually fight an uphill battle if stronger variants emerge and there are forced shutdowns.
• There could be supply chain issues translating to hurt in performance.
• GreenFirst was created as a way to gain exposure to the lumber market. This market is highly cyclical and can have some serious fluctuations which could translate to sub-par performance.
• Integrating news assets into a new company could pose some integration problems and the word “synergies” comes up a lot. They might not materialize.
• The investments above are all in early-stage ventures and there is a possibility they don’t work out and could end up losing shareholder money, I understand this is broad. Each investment itself comes with its own risks and right now there are around 5 parts of this company between the operating businesses and the investments. The odds of all of them being home runs are small.
• FG Financial is a brand new insurance and reinsurance company wiring policies and making deals in areas with little prior experience. A few bad years in the insurance and there could be substantial losses in the investment. They are also starting a Risk Retention Group to help insurance directors and officers of SPACS, a brand new business line that isn’t proven. This is a risk they quote in their 10K.
• FG Financial could have not an adequate reserve amount, loss-capped reinsurance helps mitigate this, but they are new to the industry and this one risk can wipe them out.
• The main focus of FG Financials investments is in SPACs which are highly risky investments in newly public companies. Right now everyone and their mother has a SPAC, they are all the rage and at some point, the music will stop which could affect FG Financial and possibly turn away potential mergers because popularity becomes low.
• Firefly is a young entity trying to disrupt an industry, this in of itself is an uphill battle filled with risk. It has venture risk and most of the venture ideas don’t end up huge winners when we look at the base rates.
• All of the results of this company will mostly come through the capital allocation of Kyle and his team. This is not a “company that a ham sandwich can run”
• The movie industry has a backlog unlike any other time in history due to restricted releases during the pandemic.
• The change over to the newest laser generation of projection and the proprietary blend of paint used by Strong is the best in the industry.
• Strong Entertainment has a large market share in the US with exclusivity agreements with some of the biggest names in the industry.
• The invention of the eclipse screen could open more revenue streams for the business.
• The diversity of the investments provides management with the ability to be wrong on a few ideas and still turn out okay.
• FG Financial is positioning itself in the SPAC industry which has caught fire over the last year and has introduced the ability to come public in a new way, unlike the traditional IPO process which private business owners might prefer. SPACs could be here to stay and if they are FG could be seen as the go-to company with their “SPAC Platform”
• GreenFirst bought their assets at prices with huge margins of safety. They paid about 2-3x operating income for the Rayonier assets and if management is correct on their lumber thesis, this could be a home run.
• The individuals who put together GreenFirst are not new guys to the world of making investments with the Chairman coming from Fairfax and the CEO possessing a large amount of industry experience.
• Firefly has the potential to become one of the largest DOOH advertisers and is slowly creating a network business that falls in line with Metcalf’s law, the more nodes in the network the more valuable it becomes. With the most recent acquisition of the largest player in the space the nodes grew by around 10 thousand. The network value increased with it.
• FireFly can prove to be a better business for companies to use outdoor advertising with its geofencing and location-specific ability on their platform and by leveraging all the data they have to make the best possible product for the customer. The TAM is projected to grow to almost $13 billion by 2025. It’s around $8 billion now.
• Kyle and the team are proven investors and can prove to be a huge tailwind for shareholders by simply allocating capital in a rational manner. The incentives push them in the direction of focusing on shareholder returns because they are the largest shareholder.
The Overwhelming Factor
Ballantyne Strong will be undergoing a name change in 2022 to FG Holdings. This name change, I believe, better reflects the true nature of what is going on in this business.
When you lift up the hood underneath we find 1 operating business and 4 investments, when you take the sum of the parts valuation of the investments and the cash we get a value of $49 million, this changes with the market values of each of these holdings, but the entire company as of this writing (12/11/21) trades for $55 million placing a value of $6 million on the Strong Entertainment division. Think about that. $6 million for a business that has shown to produce around $10 million in operating profits.
Kyle Cermianra, to me, is an interesting individual with a lot of irons in the fire right now. Being the CEO of Fundamental Global has put him in the chairman position or on the board in the companies he has investments in. All of the investments currently in the BTN portfolio have a connection to Kyle.
The driver of value for this company comes down to a single variable, capital allocation.
It is a broad term and applies to almost every business but in this scenario, it is more important than others. The usual CEO is running a company where the capital allocation decisions are to either continue to push capital into the operation to grow the business at attractive rates, pay down debt, or return it to shareholders in the way of dividends or buybacks. But here it is a little different.
The operation business throws off cash to headquarters and instead of deciding to return it to shareholders, Kyle decided to funnel these assets into investments. This is not an unusual activity for a CEO who comes to the helm with an investment background. Usually, the activist investor will come into a deadly situation and try to move capital into more productive assets.
Kyle is a proven investor. He rose to the top of the Fidelity Investment ranks quickly, sat beside Steve Cohen trading banks during the financial crisis, and is an ex tiger cub. Right now, I believe we are seeing a shift into the next chapter of his investment life into the role of the capital allocator and I am willing to argue he has shown he is capable to harness the title, making rational decisions, ignoring the institutional imperative, and work for shareholders.
“I do this to make the share price go up” - Kyle Cerminara, Planet Mircocap Podcast with Bobby Kraft
The biggest reason for all of this is his wealth is tied to the performance of these entities and having skin in the game is the best incentive of all.
The track record of deal-making and capital allocation has already begun with an interesting start. Since taking over BTN and the other entities he has made moves in all of them, swapping out operational businesses for stakes in companies, setting up an IPO for underlying businesses, or using some financial alchemy to turn a small cash shell of $11 million into a top 10 lumber producer in Canada. The current moves are all about setting the groundwork and putting the infrastructure in place for the next decade. From here on out it, all comes down to execution.
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Disclosure: I am long BTN