Space Summary
The Twitter Space Live Miami-Dade Election results, with Elaine DeValle and Martha Bueno hosted by BuenoForMiami. The Twitter space discussion on live Miami-Dade election results with Elaine DeValle and Martha Bueno revolves around themes of entrepreneurship, family commitments, political engagement, and innovative product launches. The conversation highlights the importance of promoting messages of freedom and liberty, the challenges and benefits of balancing multiple roles, the disruptive potential of unique products, and the significance of advocating for societal values. The space resonates with individuals navigating diverse domains while aspiring for personal fulfillment and societal impact, encapsulating a narrative of resilience, creativity, and the pursuit of meaningful contributions in various spheres of life.
For more spaces, visit the Innovation page.
Questions
Q: How crucial is it to propagate messages of freedom and liberty during elections in Miami-Dade?
A: Promoting freedom and liberty is pivotal as political ideologies shape the future of communities.
Q: What challenges and benefits come with being an entrepreneur and a mother of four?
A: Juggling entrepreneurship with motherhood presents challenges but also demonstrates the capacity for multitasking and determination.
Q: What sets the first nano Delta 8 tabs apart from traditional products on the market?
A: The unique characteristics of being vegan, sugar-free, and rapid onset make the tabs innovative and appealing to specific consumer segments.
Q: How does political engagement on platforms like Twitter spaces influence voter awareness?
A: Engagement on social media platforms amplifies messages and enhances voter knowledge of candidates and issues.
Q: In what ways can unique product features create market disruption?
A: Products with distinct characteristics stand out, attract niche markets, and drive innovation within industries.
Q: Why is it essential to find balance between entrepreneurial ventures and family responsibilities?
A: Balancing work and family life is crucial for personal well-being, success in business, and overall fulfillment.
Q: How can individuals contribute to societal change through political participation in local elections?
A: Active involvement in local elections empowers individuals to influence policies, decisions, and community development.
Q: What motivates entrepreneurs to diversify into different domains and ventures?
A: Entrepreneurial drive and adaptability lead to exploring new opportunities and expanding into diverse business areas.
Q: What competitive advantages do products like nano Delta 8 tabs have with unique characteristics?
A: Distinctive product features like being vegan, sugar-free, and providing rapid onset differentiate brands, attract customers, and foster loyalty.
Q: How can advocating for freedom and liberty impact various aspects of life beyond politics?
A: Being a voice for freedom and liberty transcends politics, influencing personal choices, beliefs, and societal values.
Highlights
Time: 00:15:28
Importance of Message Propagation for Election Impact Discussing the significance of spreading messages of freedom and liberty during Miami-Dade elections.
Time: 00:25:47
Entrepreneurial Resilience and Family Commitments Exploring the challenges and rewards of managing entrepreneurship alongside a family of four.
Time: 00:35:12
Innovative Product Launch: Nano Delta 8 Tabs Introducing the first nano Delta 8 tabs with vegan, sugar-free, and rapid onset features.
Time: 00:45:59
Political Engagement through Twitter Spaces Engaging in political discourse via Twitter spaces for enhanced voter awareness and participation.
Time: 00:55:30
Market Disruption and Unique Product Features Exploring how unique product characteristics can revolutionize industries and captivate consumer preferences.
Time: 01:05:14
Balancing Work and Family Life Successfully Tips on managing entrepreneurial ventures while maintaining a healthy work-life balance.
Time: 01:15:42
Local Elections and Community Influence Empowering individuals through active participation in local elections to shape their communities.
Time: 01:25:18
Diversification and Entrepreneurial Spirit Motivating factors driving entrepreneurs to explore varied business opportunities and domains.
Time: 01:35:03
Competitive Edge of Unique Product Characteristics Analyzing the advantages of distinctive product features like being vegan, sugar-free, and offering rapid onset.
Time: 01:45:29
Advocacy for Freedom and Liberty in Everyday Life Reflecting on the broader impact of advocating for freedom and liberty beyond political contexts.
Key Takeaways
- Promoting freedom and liberty remains a significant focus in Miami-Dade elections.
- Entrepreneurship can thrive alongside family commitments.
- Introduction of innovative products like the first nano Delta 8 tabs can disrupt markets.
- The importance of message dissemination through platforms like Twitter spaces.
- Balancing business ventures and family life is achievable and essential.
- Political engagement in local elections is crucial for societal change.
- Growth opportunities exist in the market for unique products with distinct features.
- Entrepreneurial spirit can fuel involvement in multiple domains.
- Product differentiation through characteristics like being vegan, sugar-free, and rapid onset is a competitive advantage.
- The significance of being a voice for freedom and liberty in various spheres of life.
Behind the Mic
Introduction to Small Caps
All right, what's going on, Ben? Okay, welcome in, everybody. Let's get to it. We're talking about small caps, which have been on a very interesting trajectory over the past couple of weeks or so. For those that have been watching small caps, I mean, let's talk iwm here, which is obviously not a perfect representation of small caps because it includes a lot of the crap that's not near the top. But for all intents and purposes, it is up 3.68% in the past week. It did have a down day to day, down about 1.14%. Past month. It is still down 1.47% after spiking back in late July. So right now, if you pull out to the full year, small caps are green. Green about 6.69%. They've been as high as green, up twelve and a half percent. Just, again, using IwM here as a metric. But there's a lot of these names that have just been absolutely huge movers.
Trending Small Cap Stocks
RKLB, I feel like, is this still a small cap at this point? Three point three billion now, but, you know, went up 25% in the past week and 55% in the past few months. That's when. Where people have their eyes on it. We've talked about he a lot on these spaces. Hawaiian electric has been one that people have been paying attention to. That one had a big spike in the past, I guess three months at this point. It's come down from that a little bit. Seems like maybe the momentum slowing, but for some of them, they are still rocketing pretty hard. Ben, do you got me now? Yeah, yeah. Hold on. Okay. I'm trying to accept the co-host invite. It was doing funny things earlier. Okay. I think it's working now. Okay. Yeah. Got it. Yeah. How was your day in the market?
Market Performance Insights
It was today. I could have done better. We had my pre-market picks. Most of them didn't work out, but we had, like, killer calls in our community, and I should have adjusted a little bit quicker, but, yeah, my trade account was down a modest 2%, up 28% for the last five days still. So. Doing okay. Little tiny setback today, but things are still looking good. Got it, got it. Sniper. How about you? I haven't listed as a listener here. Is he shown as a speaker for you? Yeah, he chose a speaker for me. All right, well, I'm waiting on him, but, Ben, you want to start running through some of your watch list here? Things you've been looking at? I could do that. Just get those other panelists on. Do you know how we're expecting on the panel?
Panelist Engagement
Yeah, all the normal guys confirmed. I see mantle with Godfather in the audience now. Oh, here he is. Cool snipe up here. So, yeah, all the normal guys confirmed. Yeah, just popped in. Okay, great. No, it's been a crazy week. Is logical showing up today. You should. Yeah, man, his ASPN just freaking exploded. That was incredible move Friday and today. But yeah, look, the huge win for us was TSSI. We won that competition last week with TSSI up 50% in one week. And I think moneymark is coming today. Did he confirm with you? Do you know if he's coming? He's gonna have his here. He's gonna have an update on TSSI, which should be very interesting. That's right. Now my number one largest position. We'll talk about that more. I think I said last week, one of your shows like this is the strongest, highest conviction I've had on any stock since I rode air EhR from 250 to 25 a couple years ago.
Market Analysis and Reflections
So this has achieved that status. I think there's once every two or three years, you find a stock at an inflection point and all the stars aligned. And I think this is one of them. So I'll let money Mark give the details when he shows up. But, yeah, other than that, I mean, it's just been a great market for small cap. So looking forward to seeing what the whole panel does. Yeah, so unfortunately, logical message me. He had work come up and he can't get on the others. I didn't message individually, by the way. I know that we just had that chat and were letting people know when things were happening, so hopefully they are able to show up for this one. But I think we messaged in the chat, actually, I did on Thursday, and it looks like the Godfather and logical and Maj also, that they can make it. So we'll see who ends up actually getting on stage.
Discussion on Market Conditions
We could go over to the godfather first now, if you want to run through some analysis, what you've been looking at in this small caps area. Yeah. Hi, guys. Thanks for the floor. So, like everybody else, you know, waiting on the, what Powell will have to say at the end of the week, I think it's fair to say that rates are going lower and lower rates are supportive, generally speaking, for small caps. I don't think there's much disagreement on that. I will say, though, that there are a few caution signs. Obviously, we've had quite the bounce back. We saw a peak in July that coincided with the expiration of the VIX, and that happens tomorrow. So that's something I'm watching. I think the bar is a little bit high here. You know, fed funds are pricing in three rate cuts this year. I don't think we get that personally. But at the end of the day, you know, I'm not sure it matters a great deal if you can continue to pick solid companies that deliver exceptional alpha. I am a bit cautious that this US dollar weakening against the Japanese yen continues here.
Watchpoints in Macro Dynamics
And some will say that the carry trade is all but unwound. I'm not so sure about that either. But suffice to say that to the extent that the US dollar continues to weaken against the yen, it will impede liquidity, flows into equity markets in general. Those are things that I'm watching from a macro standpoint in terms of individual small cap names. I imagine a lot of listeners here are back from previous sessions, so I'll just recap a couple of names. Previously, I mentioned census Health. They hit actually a 52 week high today, I'm happy to say, finally breaching the $7 mark. The stock was up in the $1415 range. Maintain my view that this thing should be valued in the double digits. This is again a medical device company that is delivering software type metrics, you know, still barely a smidge over ten times on a PE basis, five times on an EV EBITDA basis. And for that you're getting recurring revenues with the top line growing over 25% and 30% EBITDA margins.
Opportunities in the Market
It's just staggering to me that this isn't already back through $10. So that one I continue to like. The other one that I think is worth mentioning again is applied optoelectronics AAOI. And I mentioned it in the context of several more of their peers having very good quarterly reports, the most recent one being fabrinet FN, which reported yesterday after close and combined with the after hours yesterday and today's activity, it's up a total of some 16%. The other peer that reported on Thursday of last week was coherent Cohr. That's Stanley Druckenmiller's largest position currently. Look, all three of these companies, well, there's more, including Lite, which is also performing really well, but they're in this optical transceiver space. Again. This is simply converting electrical signals into light for transmission over fiber optics at up to 160 times the speed of copper, which eliminates a big bottleneck for AI data center transmission speeds.
Investment Considerations
If you want a little more sizzle on your stake. It's worth taking a look at AaoI. They are the crapco, if you will, of the group. They have had some hiccups in terms of execution, but for that you get evaluation. That's half to a third, depending on which metric you look at to its peers. And you get a company that's got 26% short interest. So any hint of execution there? And look, the tide is lifting the boats. They indicated it on their quarter as well, that they're starting to see some real demand, specifically for their 800 gig product. So, yeah, just waiting for the match of execution to light that gas plume. And this thing has a big gap to fill on the chart. Between 16 and 19, it could easily skate to over $15 in a single trading session. So those are names that I've talked about in the past, a couple of names that I'm looking at right now that I'd like to chat about.
Fubo's Strategic Position
One is Fubo. I think everybody knows. F u b o. Fubotv. And of course, newsworthy recently is the preliminary injunction that they received against Warner brothers, Disney and Fox, who have gotten together to pitch a sports streaming joint venture called Venu. And what's important here is they got a preliminary injunction. It's a high bar to get preliminary injunction. Essentially, what these guys have done is forced the likes of Dish and the likes of Fubo to bundle to pay for big bundles. So Fubo is in the sports business. They want to provide ESPN, TNT, other specific MLs, you name it, offerings to their clients. But they're being forced to buy CNN and Disney plus and all these other things. So essentially the judges said, look, this is potentially in contravention of the Sherman antitrust act.
Financial Implications for Fubo
And I've done some back of the envelope math here. And look, half of their content they buy from these guys at a 30% to 50% markup. So if you do the back of the envelope math on this thing. It. Comes out to about every 10%. Cost savings is around $70 million directly to the bottom line by my math. So if at the end of the day, they get a price concession of just 10%, this thing immediately goes free. Cash flow positive. In the most recent quarter, they were down to an EBITDA loss of 11 million. They've got no debt payable for the next two years. Revenues grew at 26%. Subscribers grew at 24%. Year over year. They paid down 20% of their debt in the last two quarters.
Market Developments Surrounding Fubo
The other thing that's interesting, that's happening right now is their executive chairman, Edgar Bronfman is also pitched to buy Paramount. So there's some talk about, well, does he put the two of them together? Who knows if that's going to happen. But that's out there. Look, there's 50 million shares short on this thing. It's around 16% short interest. The stock's right at its 200-day moving average at $1.94. There's huge option open interest at $2. This thing could squeeze through. I think it's an interesting situation. Look, it's a crappy business. They have 13% gross margins because of their content costs. So structurally, any discounting there can have a major impact on their financials. Have we got time for one more?
Market Overview and Sentiment
Yeah, one more quick one. What do you think, Ben? Yeah, I just want to chime in a little second. Also give you. You're talking all fundamentals here, but you have been absolutely incredible on fire in our community the last couple of days, especially today. I just want to give you a big kudos on buying the dip in Fubo. You haven't mentioned as you've been all over asts leading up into the earnings report, predicting a short squeeze right after the earnings report. Now buying the dip in BKTX today as well. So in addition to this wealth of information, I just don't want people to get the wrong idea. Like, this guy's like an encyclopedia, but he is an amazing tactical trader as well. So just wanted to let people know, give godfather a follow here.
Emerging Opportunities in the Market
Thanks, Ben. I appreciate that. Another little interesting situation that's come on my radar is a company with a ticker symbol, GTEC. And this is a. Look, it's headquartered in New Jersey. They've got a 54,000 square foot EV assembly plant in Baltimore. It's for EV forklifts, but essentially this is a Chinese micro cap company. All the management are Chinese. The bulk of their business is selling drivetrains and transmissions to 100 different Chinese forklift manufacturers. That's not just EV transmissions, but regular transmissions as well. Look, what's interesting about this thing, if you dig into the financials, it's trading at just over $2. They've got a buck 40 in net cash.
Investor Insights on GTEC
They've got 20% EBITDA margins. The thing is, trading at less than 7.5 times on a PE basis, less than 0.1 times on an EV to sales, and less than one times on EV EBITDA. Now that's ignoring this note receivable on their balance sheet of around $30 million. And, you know, they said on their conference call that they expect to collect on this in the next twelve months. And I don't know if there's concerns about their ability to collect on that or not, but this effectively represents receivables from clients and customers. And you know, if this is real, then this thing is trading at a negative enterprise value.
Evaluating GTEC's Market Position
So you're effectively getting, look, it doesn't grow. It hasn't been growing, at least on the top line, but you're effectively getting a hundred million dollar a year run rate revenue business at a negative enterprise value. And not just 100 million revenue run rate business, but something that kicked out of, you know, $4.5 million in adjusted EBITDA in the most recent quarter. So this is really piqued my interest. They are talking about expanding their partner ecosystem and returning to growth as well. So you'll see, if you look at the chart GTEC, that the bottom is really in here at $1.50, it traded up to 250. I think this thing could have legs.
Panelists' Perspectives on Market Trends
The float is just 7.2 million shares. Wolf, and step in here. I just want to take a step back and actually go around the panel and get everyone's thoughts on macro. Yeah, Godfather just gave us lots of good picks, but if you can just give a quick, because I want to move on to the rest of the panelists, a quick one to two minute max on rates where we are at the market, small caps, just a macro sentiment overview, and then we'll go around the panel with that and we'll save the stock picks for a second round. Godfather, you want to go with some macro overview first? Well, I kind of did before I got into the picks, so I'll concede the floor to those that have more macro comments.
Summary of Current Market Conditions
All right, money mark your hands up. Go. Yeah, I mean, valuations are a little bit stretched and we see some deterioration in the economic picture going on, but we're not going off a cliff. And that's what we said a few weeks ago when everybody thought were going off cliff. The data was skewed. People weren't really looking under the covers. And here we are roaring back towards all time highs. That's worked out. Where do we go from here? There's still room for upside in the market. There is still deterioration in the economic picture, but it's not anything that the Fed can't handle as long as they take action and they've got 300 basis points of firepower before they even start to really get accommodative.
Interest Rates and Market Sentiment
Right. Like we're still in a tightening position with interest rates. So interest rates can come down quite a bit, which is bullish for stocks in terms of valuation calculation. And at the same time that decrease interest rates can stave off recession. Goldman Sachs just lowered their projections of a recession from 25% odds to 20% odds. I think there's a reason for that. So I think we're good. Just keep picking good stocks, period. Yeah. Oh, I was just going to pop it over to shy, see if you had some thoughts here on everything that you've been trading in the small cap world.
Reflections on Market Movement
Yeah, so I put it up there in the spaces. Tom Lee just did an interview today, not just he, I think it was. A couple weeks ago. He mentioned that he thinks IWM will hit $300 by end of August. He pushed out that timeline to the end of this year, so he's maintained his bull stance. I am a little caught off guard that small cap isn't really catching as much of a bid as the indices in the past week or so. Maybe it's because of that huge rug pull we experienced two weeks ago during the markup tantrum that Monday morning. A lot of the money just went towards safer, high-quality names, and I probably would have been part of that camp if I was heavily invested in small caps.
Investment Strategy and Trends
It's still only maybe a third of my whole portfolio, but I have a feeling a lot of people sold out their small cap hi beta trades to buy these high-quality names like the Nvidia 92 Amazon on 150, Palantir 21. I think all the funds went towards those kind of high quality names that was benefiting from the AI thematic and took away from the small cap repositioning that occurred a couple of weeks before. I don't know if that's the repositioning is going to occur again in small caps. It might all those if you went hard during that Monday morning, you're up probably 25% to 30% in a matter of weeks, and that might be good enough for you.
Seasonality Trends in the Market
You might want to reposition towards those lagging small cap names that haven't really caught as much of a bid as I anticipated during the end of the summer. So that's one part. Part two is we're about to enter some real seasonality weakness in September and October. I don't really know how the small caps really will play into that, but I know the indices will be highly volatile, probably feel some pullbacks. I anticipate that small caps won't be able to catch a bid because of that. Maybe the woolen won't go down as much the queues and spy, but there's still, it's going to be prevent them from maybe hitting that leg up that they absolutely need to.
Future Outlook for Small Caps
So I think I was disappointed that small caps didn't really catch the bid in August. I really have a hard time believing in September and October. They're going to as well because of seasonality weakness before the election especially. However, things are improving in the small cap world. Things will not be as bad as it been past two years. Rates, rate cut is coming, narrative is still there. It's still going to maintain momentum once we get past the seasonality weakness. I really do think small caps are going to absolutely rage in November December similar fashion as last November December.
Anticipating Market Movements
If you guys remember, small caps just went bonkers. I know right now in the past week it feels like SPAC season all over again with all these former spacs just going crazy. Rocket lab, including one of my highest convictions, is participating in it from sympathy play to asts, but still, it's really a handful of names are really catching that massive run up where the majority of small caps really isn't participating as much. That might occur in November, December, we'll see, but I'll pass back to you. But that's kind of my two cents on the macro. Sweet. Really good thoughts on the macro.
Engaging the Audience
Hey, if everybody could take a second to share out the space. Hey, and that's appreciated. yeah, I'll go to you one sec, Mark. Yeah, if everybody's able to just take a second share out the space. If you're in the audience and you are a small cap investor, comment some tickers for us that you are watching into the spaces chat below. You can just click that purple three comment button near the bottom of the space and get that there. And for everyone else, it's real easy just to go ahead and throw this space retweet. Or you can also tweet it out onto your own timeline quite easily as well just by hitting the share button in the top of the space. Much appreciated.
Concluding Thoughts
Okay, let's go on over to money. Mark. I don't hear Mark. Do you guys hear him? Yeah, no, I heard him for a second beforehand. You there, Mark? Yeah, you may have to drop off and come back, so let me jump in while we come back with some macro thoughts of my own. So Iwm exploded a couple of weeks ago on light CPI. Broke a critical level. I think at the time it was 216. And then we got into this kind of scare of hey, is that light CPI too? Light because we're heading into a recession. And that's one of the factors that resulted in that, besides the young carryover trade unwinding into that little black Monday scare.
Seasonality in Small Caps
I do remember not only last November, December, it seems like it happens very often into a January effect, which I love for small caps because of tax loss selling in end of November through the end of December, and then you get this big snapback in January. So I would say November through January potential for big seasonality move in small caps and money. Mark you back. Hope so. You hear me? Yep. Go ahead.
Global Perspectives
Yeah, I'm on the other side of the world. It's over in near Romania. 02:00 a.m. over here. So, no, I was just going to say it just to dovetail off of what was said regarding seasonality. And this is not a political statement, but obviously we've got some pressure on the stock market due to concerns with Kamala Harris getting into office and what that would mean for stocks, taxation and things like that. So with a certain amount of that priced in, we're looking at a coin flip right now. If you do get a Trump win or the momentum starts to slide significantly back in his favor, then really watch out on that seasonality.
Investment Strategies and Stock Research
Another good point there by Mark. Ben, I know that you went over a few items towards the beginning of this. Did you have some thoughts on some of those stocks that were shared there by shy or by the godfather in ways that people in the audience who are hearing us talk through certain pickers can go about approaching their research here? Because I know that you really like to build out that story. Yeah, well, look, we've also been playing rocket labs on the sentiment sympathy play with asCs. But yeah, how we do it at story trading, we start with the catalyst. We don't start with the chart, which I would say, like probably 95% of Fintway, they're starting with a chart. So we start with the catalyst.
Understanding Market Dynamics
We interpret the impact of the catalyst on sentiment and fundamentals, and then if it's a positive impact on the sentiment, positive impact on the fundamentals, then we'll look at the technicals and come up with a trade idea, whether that's a day trade, a swing trade, or a long term investment. And the other side of this, we're going to talk. We got a CEO interview just coming up in two minutes with the CEO of Game Square, who's on. We'll bring up in just a couple minutes. But after that, we'll talk about TSSI, which Mark money Mark brought to the attention of your community and our community. And that's an example of.
Market Reactions and Positioning
Okay, he had a fundamental thing going on, and that's great. But first of all, I'm interested because the catalyst was proximal, right. The catalyst either just happened or is just about to happen. And that's the situation I'm interested in, because I believe markets are efficient. We believe that markets are efficient at story trading. So if you have a delta of information, you have a delta in price. And this lends itself to getting into stocks right before rapid reweightings. That's like the number one thing we look for is rapid re ratings and inflection point catalysts. So that was a situation where there was a catalyst there. Moneymark will tell us about the fundamentals in a few minutes. And then we also liked it from a sentiment perspective and a technical perspective.
Catalyst-Driven Investments
So it was like balls to the wall long on that stock last week and ended up being amazing, up 50% in a few days. But, yeah, that's our process over at story trading. Beautiful. And, yeah, whenever they're here, go ahead and feel free to pull them back up. Mark, were talking a little bit earlier today, and one of the comments that was made on his face was someone felt like there was a lot of momentum, and then that momentum kind of, you know, pulled back hard over the past week. What do you think the small cap market needs to regain that momentum?
Market Sentiment and Speculative Trading
Yeah, I mean, it really does come back to the Trump trades returning to the marketplace. I think there are some animal spirits out there. So as long as the markets stay up, speculative juices really kind of flow towards the top end of the market. And that's kind of where we are right now. I think a lot of people would think that we're in a topping process or near historic levels where the market would tend top out. So, you know, that's the last bastion of movement is, you know, can you trust the large caps or do you want to move down to the small? And we have so many winners amongst the small caps now.
Drivers of Market Movement
You're seeing them flow in, and I'm starting to see, you know, the volume come into my videos and the number of people coming through is it's really picked up. So it, all it takes is interest and good stories, and that's what we're coming out with. You know, this whole group is coming out with a great story after story. And when it makes sense and the earnings or whatever the catalyst is comes through and people get that win, they get hooked. So, you know, we started that process, we got a little bump in the road.
Global Economic Considerations
I don't think we're going to see another one because the picture in Asia is weak. So there's two things that go along with that. One is inflation should be a little bit under control in Japan, and they're going to be hesitant to raise rates any further given what happened the last time they tried it. And China has to come through with liquidity soon. So that's going to be a catalyst for small caps as well, given the weakness in their market. So the economic background around the world is conducive to inflation not coming back. That's conducive to Japan not raising rates further.
Liquidity and Market Resilience
And China is in such a bad condition with their real estate market that they have to inject liquidity, which is positive for. For everything downstream, which includes crypto and small caps. Well put. All right, I see we got Justin up here. Ben, are we ready to roll here? yeah, let's. Let's do it. I'll.
Group Dynamics and Business Impact
I think, like a week ago, like, faze, banks, whoever is a leader, like, kicked out one of the other guys from the group chats, and then there's back and forth. Does that drama ever, like, impact the business as a whole, as a larger. Is it, is it good for business? I'm trying to, like, fully understand.
Managing Business Risks
Yeah, another good question. And certainly something that, we need to manage, right. I think is probably the best way to answer that. It's a really interesting one. Right. When I was looking at acquiring faith clan, there's certainly a level of risk. Not on the esports side, I think, you know, the esports business is extremely buttoned up. It's more of the competitive side.
The Role of Content and Audience Engagement
And really, you know, it's funny with Jerry being our biggest investor, but really think about the esports side as being faze. Really are the Dallas Cowboys of the esports world. But on the faze media front, the lifestyle side, I mean, you're spot on, right? It's been, there's been sort of controversy and things that have sort of followed it around for some time.
Maintaining Brand Integrity
I think we're doing a really good job of toeing that line. Right. And that is understanding the content that is being created that resonates with the audience and who the brand is and allowing it to be the brand. And I think that's really important. Right. My job isn't to sit here and put a muzzle on banks or any of the big creators.
Balancing Risks with Creative Freedom
It is to try and help put parameters around them. So to your point, to capture the audience, to engage the audience, and then to be able to partner with the right brands that maybe are a little bit more risk averse, that, you know, are more interested, that these are your challenger type brands, that, you know, are willing to take a few more risks to really convert and reach math eyeballs.
Addressing Online Controversies
I mean, if you look online now at all the biggest streamers, you know, they are, there is a little bit of controversy attached right now. You know, it's something that I certainly have to manage and certainly talk to investors about and the market about and take accountability and responsibility for. There's certainly a line, but, you know, we are in the gaming business, we're in the entertainment business, we're in the content business.
Navigating Trends and Opportunities
And look, I do think that allows you to be maybe on the riskier side a little bit and just making sure that you are partnering with the right brands, that allows you to own the creative process and to be organic in what you're creating so that you can convert for the brands. That piece that you mentioned with banks kicking out one of the guys, that was a prank.
Interpreting Social Media Trends
It's not actually real. A lot of what's going on with the guys, they are different memes or things that are trending online. Banks is, you know, and I don't say this lightly, a genius when it comes to the Internet, to engaging audience and fan bases. So, you know, a lot of it is tongue in cheek.
Responsibility and Compliance
Don't get me wrong. There is a line that we need tow. Gainsco is a public company, and that's on me, and he's my responsibility. I don't take that lightly. So, yeah, I think it's certainly a fine line. But to this point, I think we're doing a good job. Right, which is we've tripled audience, we're finding the right brands.
Achievements and Future Goals
We're really monetizing. We're cleaning up the business, and we're bridging the gap between sort of corporate and creative. And I think that's really important to be able to do that in an authentic way. Great questions, man. We got two more here. Maj and then Shaidhead.
Expected Profitability and Market Position
Go ahead, Marsh. Hey, man, thank you. Hey, man. Thanks for doing this. I have a couple quick questions for. You, maybe here are a few, actually. I'm looking at your goal to become profitable here. I guess in Q four, maybe break even. I guess the question, I see some potential seasonality in your business. I'm looking at the analyst estimates, and they don't necessarily jive with you staying profitable until maybe on a full year basis until 2026.
Financial Insights and Projections
They have you breaking even in the fourth quarter this year and making money in the fourth quarter next year, but then overall losing money. So you say you're planning on getting the profitability in Q four this year. First of all, are you saying that's like net income or you're talking about cash flow? And can that be maintained, you think, go forward? Or is it too early for you to say that right now in terms of what you know and what's going on with your business.
Understanding Profitability Metrics
Great question. No talking adjusted EBITDA. We've obviously done a number of m and a transactions which make it a little harder from a complete profit loss standpoint. But we believe by year end that a lot of those pieces will have normalized and we can get to a normalized ish burn. Right. Like, you know, I'm sure you can imagine that acquiring a company that was trading for a billion dollars for $14 million.
Financial Cleanup Variables
While that sounds great, there's a real cleanup that has to be done. And there's no doubt that's taken a lot of time and effort and stress, and it takes time to get to that normalized burn. But, yeah. So talking about adjusted EBITDA, I do very much believe that's scalable from Q four. This isn't a one time thing. We've reached it.
Managing Seasonality and Growth
And then seasonality so dramatically affects our business that we fall off a cliff. I don't think that at all. I think that if you look at the fact that, again, pro forma first half of the year, we've been able to do 50 million in revenue, I think getting to that normalized cost burn is really important, and we will do so over sort of Q four, Q one.
Industry Context and Revenue Challenges
So I believe very much so that we can get the profitability and to scale from there. But look, this is a newer industry. We're proud of the growth, we're proud of the progress. But I'm not going to sit here and say that this is just pure, easy, linear growth. But what I do take comfort from, and I heard you guys talking about sort of the macro effects before.
Market Navigation and Opportunities
I mean, I've been in a knife fight for three and a half years, right, in micro cap land, and certainly from an ad and brand standpoint. So we've navigated some really tricky markets, and I think we've done it really well in terms of our 2023 revenue, didn't quite hit where we thought it would because of some of those effects, with budgets either going away or minimizing or a bit more handholding and getting to, yes, a little slower than we would have liked, but we're actually starting to see that translating to real dollars.
Revenue Generation and Agency Developments
And what I would say is, from an agency standpoint being bucket two of our business, which. Yeah, I think we lost. No, he's back. Probably just got a call. Go for it, Justin. Sorry. That is an area of our business that it really is only year four of the business. So what we're seeing there is agency of record opportunities, multi year deals, and multi year seven figure plus deals that are starting to mature.
Looking Ahead to Financial Stability
So our 2025 view, our base of revenue that we're starting with is so much higher than it was in 2024. This is early days, we believe adjusted EBITDA, we can get to breakeven profitability in Q four. But I very much believe that is a 2025 hitting, scaling, getting to net income profitability within 2025 and for a full year.
Analyst Expectations and Business Strategy
So I don't have the analyst numbers in front of me. Look, I'm not surprised by that. There's certainly some risk in that, but we feel really bullish that we can get there. Okay, so what, so with your cash position right now? So I think I'm looking at twelve or $13 million. Is that right?
Reviewing Cash Reserves and Future Plans
Yeah. So cash at 30 June was around 14 million. As I mentioned before, we had a divestment that produced another 4.75 million that came in on August 15. Okay. Yeah, we have ample Runway to get this. You think that. Do you think that cash is enough to get you to where you're gonna get to without having to tap capital markets or you have that visibility?
Strategic Financial Positioning
I guess I'm trying to figure out, like, you have nice pile of cash, you're cutting expenses, but the same time you got to obviously acquire brands or acquire, you make up positions to grow, too. And you think with the cash you got, you can do all that without risking, you know, capital raise. Yeah, we absolutely do.
Operational Efficiency and Cost Reduction
So, you know, we feel that if anything, there's more. More cuts to be done and to get a little more efficient rather than the opposite. Right. We don't have major needs right now to be spending capital. If were to look at doing any acquisitions, like I mentioned before, we'd be looking at doing, you know, stock deals with profitable businesses that are generating cash flow.
Acquisition Strategy and Financial Health
Otherwise, we wouldn't be doing it. Our CAC is really low. Right. Because we have all of these pieces in house. Right. We have talent in house. We have data in house, we have media in house, we have content in house. And so for us, the ability to scale from where we are is real.
Strategic Positioning for Growth
And it's more about pulling more cost out rather than a need to spend additional dollars to grow. Okay, great. And one last question. In terms of your model, I think you say here, your website, your growth is based on acquisition.
Revenue Generation Insights
Esports, influencer networks, professionally, sports teams, adjacent assets, entities that serve an esports, gaming, sports. So I'm curious, on the assets that you have relationship your owner have relationships with, are there contracts that kind of end with any of these you know, entities that you have to renew every so often.
Stability in Business Relationships
Sorry, could you just repeat the last part? I had the first in the middle part. Yeah. Any of the revenue you're depending. Revenue that you generate here, like of the assets that are generating the revenue for you, are they other con. Are there any of them based on.
Contractual Considerations
Contracts you don't own, you know, like relationships that could end, for example, and what that looks like. I don't understand that this is totally. But I used to know from like under, when I was. When I used it when I interviewed et Alex years ago, that concerned me a little bit.
Reassuring Business Model
And I don't know, you're a little different than that. Yeah, no, we definitely are. I think what would help is so our sort of technology SaaS managed services business, if you think about, you know, let's just call it 100 mil high level, right.
Revenue Streams and Client Retention
That bucket number one, segment number one is around sort of ten to 15 million. Being technology and managed services, that's really high retention, high recurring, high margin revenue. The challenge there is obviously getting to real scale, but that's nice.
Evaluating Business Growth Strategies
Public market revenue while you sleep, etcetera. Bucket number two is really our agency and media business. I think that this is probably more where you're talking, right? Which is how much of this is recurring versus RFP land and needing to win to be able to grow.
Agency Business Developments
Pretty pleased that a large part of this is now recurring, which is we are again in year four of the agency business. We certainly are absolutely in the RFP process and that's how you get wins and then scale clients. But on our programmatic side, Newsweek is our major client that's been with us for a number of years and it's pretty low risk in terms of moving away.
Long-Term Client Relationships
It's a contract that we have and our agency business, our aim is to convert every client that we work with into multi year longer term deals, agency of record opportunities. That's starting to resonate more and more. I think of that segment two as being around 40 to 45 million of revenue.
Self-Operated Revenue Insights
And then bucket three is our own and operated IP, which is around sort of 35 ish million of revenue, which is really faze clan on the phase media side, and our own and operated IP business, that is. Look, on the esports side, certainly there's some variability in terms of performance, right?
Revenue Models in the Esports Sector
Because esports, the easiest way to think of that financial model is akin to traditional sports and prize money will be contingent on winning and so forth. I think one of the big positives there is we are faze clan we have a brand, so we aren't as reliant on having to win to generate revenue because we're able to do so through content, through our distribution channels, through merchandise, and through other verticals.
Brand Recognition and Revenue Resilience
So we're less reliant there. But yeah, look, I'd be lying if I had an exact percentage for you on recurring revenue, but can certainly get you that. It's a percentage that is increasing. We feel very good again about what our base is to start 2025.
Concluding Thoughts
Well, thank you. Awesome. And we can connect you guys later if you're interested. Let's just take one more question from Shai. I got to get some money, Mark. After that, it's 230 in the morning where he is. We want to get an update on TSSI.
Entertainment Industry Insights
So shy. Go ahead. Yeah, appreciate it. Hey, Justin. So I come from the entertainment world, and I also know a couple folks from faze as well. But I used to be a director of corporate strategy for Lionsgate, so I absolutely know the business of eyeballs and how tough the economics is of that business.
Leveraging AI in Business Strategies
Curious though, for you in the post AI world, are you guys leveraging AI to kind of bump use as a lever to improve the business economics of your business model, or is that kind of not. I'm curious on how you use AI right now in the business of eyeballs, like, since I was in that world, pretty AI.
Strategic Use of AI Technology
So I'm just curious if that's helped you guys pull to that profitability in a couple months or that's something you guys are using that for something else in the influencer world? Yeah, it certainly has. And mainly in bucket number one at this point.
Exploring AI Opportunities
We do think there's opportunities on the agency side, absolutely. But on our technology side, yes, we actually have something exciting in the works there that we're building out, and certainly something, I'd say watch this space on.
AI in Influencer Marketing
I can't give too many details there, but we certainly are using AI in terms of mass influencer deployment, in terms of brand logo recognition, certainly on the technology side of the business, AI is definitely, certainly a buzzword in capital markets, but has certainly helped us in terms of different features we've been able to build into our technology platforms and something that we'll continue to monitor.
Building Performance Marketing and AI
We are also looking at really building out our performance marketing, affiliate marketing, part of our business in terms of being able to really convert at mass for brands. And there's a number of AI solutions that can help us do that by obviously reducing manual work and overall headcount costs there as well.
Future Prospects and Innovations
Little bit of a watch this space. But, yeah, certainly in segment one of our business, AI has been critical and really helped us. Awesome. One quick. Another quick question before I pass to money marks.
Live Sports and Esports Intersections
It's late for him, obviously. Netflix, Amazon, Apple, they're getting into live sports. I think that's going to be a precursor, potentially esports. Do you see any of their presence right now in your realm of the esports industry? If not, do you anticipate them participating more because they're investing so much?
Traditional Media and Esports Future
So they're in the business of eyeballs, but specifically now they're getting into sports. So I think that's going to be them doubling down as well. On the esports front. Yeah, it's a great question. We haven't in terms of pure endemic esports to this point, but I think that it's certainly a natural evolution, and you're absolutely spot on.
Emerging Trends in Live Streaming
Right? You can see the trend that's happening with everything that is live and that obviously feeds into our world with these kids that are streaming nonstop to these huge audiences. The reality is that we are bullish about esports, and there is a lot of upside there.
Youth Engagement and Market Dynamics
But certainly on the live streaming side of the world, some of these kids are streaming to 5100 thousand people, you know, from their bedroom on a Tuesday night. And it's. It's crazy, and it's staggering. So, yes, I think that we will see traditional media converge on this space more so, especially as it pertains to esports tournaments that are starting to generate, you know, more mainstream buzz.
Large Prize Pot Implications
And I think that what's going on, I'm not sure if the listeners are aware or not, but what's going on over in the Middle east right now with the esports World cup is a really good example. Right? It's really high production quality. You know, it's been eight weeks of competitive tournaments.
Esports Tournament Highlights
There's a club championship between all the global esports teams. Faze Clan is currently 6th on that. We've got our pub g team competing tomorrow. Hopefully we get a win, and we'll probably get a podium finish there. This is for $60 million of prize money.
Prize Money Impact on Revenue
60,000,600. The club champion gets 7 million straight to the entity. If were to finish third, that's $2 million straight to the top line. That's not prize money for the competitive game that you're playing in, that you share with the players, that is, to the overall entity.
Convergence of Traditional and Esports
So with these increased prize pots, with the move from these big giants into live streaming and then move into live tv, traditional sports, I think that evolution is natural, and I think there's a huge opportunity for us to be at the forefront of that, not only from an esports perspective, but also helping navigate, really, the intersection of pop culture.
Innovative Strategies with NFL
Right. Which is, I think, part of really what we're doing with this NFL program in bringing some of the biggest creators to NFL games, having them stream live to their channels and reach a new demographic for, you know, what is obviously already a giant in the sports world, being the NFL.
Current Esports Market Landscape
So right now, not a huge amount in terms of endemic esports. Certainly a lot more on the creative front, for sure, but I think absolutely, that's a natural evolution. I think we'll be really well positioned to take advantage of that.
Final Thoughts
All right, great, Justin. That was awesome. Packed in a lot of information and just 35 minutes. We'd love to see you back here with an update after next earnings release in three months from now.
Wrapping up the Discussion
I just posted a little summary of your earnings report up top from last week, Wolf. Got any closing comments before you hand it over to Mark? Yeah, I really enjoyed this conversation here with Justin.
Appreciation for Engagement
I want to commend the speakers up here. Ma shy sniper, everybody that's on stage, really for great questions as well. Just digging into those financials, understanding Runway background with the company. I really appreciate it because that's how investors actually learn.
Looking Forward
Would love to do more of these together with you guys in the future as well. Before I turn it over to Mark, Justin, did you have any final comments on the conversation there? No. This was awesome.
Thanks and Farewell
Thank you so much for having me. And honestly, really great questions. So, yeah, hopefully for the listeners, it was beneficial and keep an eye on what we're up to because I think the start of really exciting things and would love to come back and join you guys at some other point.
Sign-Off
Perfect, Justin, have a great rest of your day or evening. Thank you. Thank you, guys. Awesome. Thank you. All right, moneymark, we're excited to hear from you.
Investment Updates
Let's hit it. Sorry to keep you up late, man. Money. Mark Tssi, my largest position, thanks to you, up 50% in one week. Tell us more.
Market Updates and Earnings
Hey, no problem at all. So, you know, just to give you the quick update on the picks that I've given you, some of the picks I've given you guys before, just a quick 32nd. EVLV came out with great earnings.
Stock Performance Insights
That stock has hit a three month high. It's now 85% off of their lows. I think the stock now at 3.33, having it's filled the gap now has to break through that gap once it does, I think it's clear sailing to $6.
Strategic Partnerships and Future Growth
They got in with Disney, the New York City, the Olympics, and they're expanding into x ray machines as well. That's evlv. they're doing great. Kraken, Krknf, the. One of the hottest companies and maybe the.
Innovation in Defense Industry
The hottest defense company on the planet called Anderil. A n d u r I L. Just got 1.5 billion in funding. I've spoken about them before and how they're pulling Kraken along for the ride.
Technological Advancements
Well, they just delivered their first ghost Shark XL autonomous underwater vehicle. This is basically the next generation of submarines. This is basically Tesla for defense.
Investment Insights
If you look at. Look up Andoril, and they put $3 million of Kraken material in each of their normal ghost sharks and 8 million into these xls. They've already said they're opening a facility where they're going to build 200 of the smaller machines per year.
Revenue Growth Projections
And that's over 600 million in revenue for Kraken, who only has 70 million now. So this is a company that once these facilities are fully up and running, cracking can go from 70 million to 700 million in revenue. The market is starting to pick up on that.
Recent Stock Performance
The stocks up 33% since I started talking about them with you guys. And then last but not least, before we get to the. To the best, Geodrill, they came out with great earnings as well.
Geodrill Performance
The stock is now 95, 92% off of their lows stock. The CEO owns 40% of the company, and a Yemenite wired $80,000 more with his own pocket money.
Positive Market Indicators
Has told me in no uncertain terms that the company is going to continue getting stronger because of the deals that they have signed, multi year deals with large tier one gold miners. They provide the drills, and he will sell the company once they get to.
Long-Term Growth Strategies
Once he can't grow the company at a fast pace any further. So this stock now at $2.64, up 92% off of their lows. I see this one going to $4.
Concluding Remarks
So, last but not least, let's bury the lead. You can look at the jumbotron up ahead for more. Shout out to Maj at Geo investing as well, working with him on this.
Recent Developments
I've put out a lot of tweets this week, so you can check those out. They came out with earnings just this past week, and since the time where we started talking about this company with you guys, I had modeled them out and told you that they were going to come out with.
Projected Financial Growth
I saw them doing two x quarter over quarter on the integration revenue and over five X on the bottom line, and they beat that. They came out with 5 million of integration revenue, up from two the quarter before.
Collaborations and Partnerships
And that was with just one month of revenue from the big win that I was talking to you guys about. I've told you that as Xai. I believe that they are working with Elon Musk at Xai, at Twitter and at Tesla.
Future Collaborations
If you read through their transcript, they do talk about autonomous vehicles. So, boom, there you go with Tesla. And the company did.
Observations and Projections
Now, of course, they're not saying that they are working with Dell. They're not saying that they're working with Elon Musk, Xai, because they can't. But when you look at the clues, you see exactly what's going on.
AI Projects Insights
They admitted that it's a high profile AI data center project. This is the only high profile AI data center project out there. It's Xai.
Highlighting Opportunities
It's clearly the one. When it comes to that. When you map what they did this quarter, what they said in the conference call to what Elon has been saying in the marketplace, it's no doubt what's going on there.
Future Workforce Expansion
I also said that they had added 200 employees during the quarter.
Company Growth and Employee Count
The company hadn't told us that, but they did admit on the call now that they have over 200 employees. They only had 80 before. So 200 to 280, that's 200 employees. They're somewhere in that ballpark now. So enough patting myself on the back for calling it. What does this mean going forward? Well, if you were on the call, and only if you were on the call, you heard the guidance that they gave. They delivered this quarter just $12 million in revenue, which is great for a company their size. Right. Six cents per share, which is a 24 cent run rate, which is great for a company trading at $4. But they said that $12. Their guidance implied that $12 million in Q two is going to 50 or 60. That's 50 or 60, yes. Revenue to quadruple or quintuple this quarter.
Financial Impact and Predictions
Q three versus Q two. The market doesn't know this. This is not a company that's covered by Wall street analysts. And this is how we make the big bucks, is being there when companies like this announce these sort of things. I confirm this with the CEO. That's the first question I asked him because nobody asked him on the call. Did you say 15 or 50? He said 550. And that's just getting started because our facility can handle more business than that, and we're looking for another facility. Okay, so why is this happening? Right. First of all, just know that when I run the numbers on what they're looking to do in Q three, based on their guidance, they're good.
Future Expectations and Market Position
That's going to get them pretty close to the 20 cent run rate. I mean, the eps that I told you that they might be able to do next year in a quarter, they're going to. They might do that this quarter. That would put them on an 80 cent run rate. Now, I'll let Marge tell you later, but he did a great piece on the earnings call, and he thinks that they're going to hit a dollar EPS run rate pretty soon. Now, you could put whatever PE you want on that dollar, but this stock is trading at $4 right now. The market just doesn't know what's going on. Now, of course, the stock has run great since the earnings call came out because the people who were listening are buying the stock.
Company Growth Dynamics
It's Ben's largest position. It's my largest position. I don't know what it is for fromage. He could tell you himself. But the bottom line is they're going to continue to grow into this quarter. They're still not at full capacity that they told us two quarters ago that they were going to be able to ten x their integration revenue in the current facility. They haven't ten x it yet. And the CEO told me that they're already looking for a whole new facility on top of it. This company's growing so much that. So here's the punchline. So why is this happening? And it comes back to the number one short that I've been giving people over the last few months, which is super Micro SMCI.
Company Insights and Competitive Analysis
Dell is eating their lunch. I've been telling you that my contacts in the field from 30 years of being a technology analyst for Wall street told me that SMCI is not being able to scale up with the customer support that's needed. Dell is a longtime veteran of this industry. They just didn't have the product and the integration capability to do it well, now they do. And TsSi has proven to be the linchpin. They're delivering product on time. They said this on the commerce call. SMCI is not. There's a chance that SMCI gets kicked out of X AI and they give that to Dell, and it's because of TSSI.
Market Dynamics and Future Forecasts
And as a result, Dell gave them free money, free capital this quarter to expand what they're doing so Dell can eat more of SMCI's lunch. Okay, so bottom line here you've got Google Meta, Microsoft, Amazon, and Elon all racing to achieve AGI. Elon thinks they're going to find it within two years. The rest can't afford to let him go after it. So they're all pressing the gas pedal on AI data centers. You hear that? You heard it in every single one of their transcripts. Okay, so who's going to deliver all of these solutions? Well, you see it right here. It's TSSI.
Operational Capacity and Growth Potential
They've got the full facility right now that they're ramping up, and Dell's given the money, and they're looking for a whole new facility, go from ten xing that they haven't even reached yet to 20 x that they could achieve in 2025. So they could get to that dollar run rate that Maj is talking about real soon and just keep going because the CEO said that 2025 is going to be even better. That's crazy, man. Yeah. I'll give you a little p's. By the way, I've gathered some more information since my last analysis, and I'm not going to reveal yet, but there are more wins that are going to be coming down the pipe.
Investment Insights and Future Opportunities
I will be revealing that maybe later this week on my show, and if I do, then I'll come back and let you guys know about it. But Elon's not the only one looking to do business with TSSI. So that was crazy, because I chose TSSI as my pick of the week for one of wolf's stock picking shows, and we won. Obviously, that was great. But I had predicted three open green. I predicted, you won't believe this. I'm like, we're going to have three open green candles, and the target is $450 to $5 within three days.
Consolidation and Market Strategies
But I went on my show this morning, I'm like, all right, we reached the target. We're going to consolidate for a while. Maybe we'll work our way up towards $7 before the next earnings report. After hearing what you just said, I'm like, I don't know about consolidation. I might have to buy more tomorrow. Yeah. I mean, yeah. I mean, that's every. Every dip is being bought right now. And it makes sense. I mean, at the end of the day, right, I can't tell you what their 2026 is going to look like, but I can tell you that while these companies are all racing to AGI, they can't get enough integration capability, they can't get enough power for the testing, they can't get enough of the liquid cooling capabilities, and TSSI has it.
Future Competitiveness and Market Insights
TSSI's biggest problem right now is finding a facility that can give them as much power as they need to handle all the business that wants to do business with them. They'll solve that problem. If they have to put a nuclear plant, you know, under the facility, they'll. They'll do it. But, that's the way it's going for them right now. So, you know, if you're looking at a buck run rate of EPS coming soon and 2025 being stronger than 2024, you tell me what happens when people start to realize who they're working with. And what if it works out the way you're talking about? We're talking about a $15 to $20 stock before the end of the year.
Insights on Growth and Market Strategies
Maj put a bow on it. Hey, man, thanks. Yeah, thanks, Mark, man, for. That's a great summary. I just, like anybody, this is probably my largest position now. Hey, everyone out there, in terms of conditions, you know, investing, apply for this conversation here for me. So you agree to that. But, yeah, I think one of the most important things I want to point out here is what Mark just said about Dell kind of committing to TSS. So anyone out there who's thinking like, okay, because, you know, 80% of the revenue, or even more sometimes is, you know, coming from Dell relationship, it's.
Dell's Commitment and Market Positioning
It's not just Dell, you know, it's all these customers that Dell brings to you aside to do the integration. But obviously now Dell is showing they're committed. And it's pretty funny because, you know, were at the. I was at a conference in Chicago last week, and TSI was one of the companies there. I did a fireside chat with him. He's one of six companies. And I brought that up and he was like, yeah, that. That's in there. And he's. You really don't want to talk about it too much, but.
Financial Insights and Future Planning
And, but that was. That's really cool. I get a good sense, too here. You know, they worry about how they're. Going to pay for this, you know, facility expansion, whether it's the current facility as well as maybe going into new facility. And I get a sense that it's not going to be equity or if it is, it wouldn't mean it wouldn't be a lot at all. But I got to sense most of it will be kind of, you know, dead at some point. And also, I would expect them to get support from their oems to help them also.
Strategic Growth in Data Center Business
But one thing I want to talk about, too, really, on why I think that this 2025 cent run rate and the EPS per quarter is going to be more than achievable here, coming soon is because everyone's really talking about their main rack integration business, which is building the racks in house and sending them to a data center that's basically called enterprise level data center integration, but not really talking about the growth, really. And no one's really talk about the growth and modular side of the business.
Emerging Trends and Financial Growth
And that's basically a plug and play type of data centers. You build a data center in house and they start dropping it into like a outside fence. It's all enclosed. There's no building on the building. And with that type of deployment, there's maintenance revenue with that. And maintenance revenue comes, at least, as I disclosed last quarter, like 70% gross margins compared to your maybe 40% in your regular gross margins for the actual integration work. So I think that's more, which I like about the story is like 24 and 25 is the regular integration wherever I probably then at some point, probably until 25, because a longer sales cycle to do the modular, you'll have this another growth element come in with higher margin modular with the maintenance revenue attached to it.
Exciting Opportunities and Future Growth
So that's. I'm really excited about that. That's why I really think they can start even exceeding these kind of EPS targets that mark and I are kind of talking about here. So I'm really excited about where these guys are going. I think this is a unique case here where you have, I hate to say it and jinx it, but so many great things going on at the same time. I think it's unique to have this kind of like, perfect storm going on and, you know, and people are trying to realize that who TSI is, no one's mentioning Dell or Twitter.
Company Dynamics and Future Projects
Everyone's trying to put it together. And if we start having other news come out with other companies kind of building out, that everyone's probably start knowing this is, you know, tsi doing that work. And I don't know, Mark, if you want to talk about is it, was there any relevance to the AMD acquisition of Ztech? If it matters, it'll talk about that at all at this point. Yeah, I mean, no, I mean, that was a multi billion dollar acquisition is strategic, it's defensive on AMD's part.
Competitive Market Landscape
They need to do something to match what Nvidia did on the ecosystem side of things. I've been saying for well over a year, people, you know, were negative on Nvidia last year. Not everybody, of course, but the bears that come out and say, well, AMD has a chip that's better than Nvidia's. So what? It's just the chip. You, those don't, those chips don't integrate better into servers. Those servers don't integrate better than networking equipment. They don't have infiniband, they don't have the software. They don't have anything else that Nvidia has.
AMD's Market Strategy and Future Plans
Well, they're trying. Right. Obviously, they're not going to give up on all that. So that's what this acquisition is. You know, Zt's a, they have a lot of server talent, but they also have a lot of engineering talent that's going to, that's what AMD is going to keep. Okay? So AMD wants to take that engineering talent and use it to develop better chips that will integrate into servers better so that they can challenge Nvidia better. And they're going to spin off the hardware part of the business.
Future Expectations and Market Implications
Somebody's going to buy that, right? Because right now, obviously, selling AI servers is a hot business. SMCI took the lead. Now Dell is starting to crush them. You can expect HP, Lenovo, et cetera, every data center server vendor needs to be in the AI data center space. So, you know, that's just the, that's the machinations that are going on right now. And basically, you know, you've got, the hyper scalers are Batman and they're willing to give the best equipment to anybody that can play Robin to them.
Future Projections and Financial Forecasts
And right now, you look at TSSI and they kind of fit the bill for what they do. Interestingly enough, their guidance for this quarter, if they do over 50 million in revenue like they're talking about, that's a $200 million run rate. The stock has to double just to get them to one times revenue. Right. I think Mark two is like, it's a situation where you starting to see that, when you see system, when you see that procurement revenue go up like that, because a lot of that's going to be procurement revenue.
Dell's Commitment to TSSI and Market Dynamics
That's showing you Dell is even more committed to TSSI as you level that up. These are all signs that Dell is here to stay. Right? Do either of you know his management said anything about uplifting to better exchange? Because, man, I know a lot of people who want to get into the stock, but they can't. Not all brokers allow over the counter trading. And also, there's no after hours, which if there was after hours, I'd be buying right now.
Market Strategies and Future Dynamics
Mark. Yeah. I think that probably is going to come. I don't think it's going to come tomorrow or next week. Maybe Maj has some comments on that. But I'll tell you this, they're definitely going to be incentivized to do so because once the stock hits $7, that puts them right in the ballpark to make it into the Russell 2000 next year. And this is something that I, I do. I was a longtime Russell Arb, and once they get. Once it looks like they're going to be getting in, you're going to have ARB start to buy the stock just because they know the institutions are going to be putting them into the Russell 2000 next June.
Stock Expectations and Future Listings
That starts, that buying starts in as early as December or January. So, you know, once that happens, now they have an incentive to uplift because they won't get into. The only thing that'll keep them out of the Russell is the uplifting. And which, by the way, I think they now qualify to uplift. They definitely qualify on the, on the net equity side of things, which is great. There was an interview that Darrell did with, I think was called merger markets. It's behind a paywall.
Management Strategy and Future Directions
And they interviewed me for that, for the thing and during, and that wasn't a stock was $0.90. We hadn't cracked one yet. And they asked him that very question about uplifting, and he said it wasn't like, in his, you know, in his vision at that point. But that stock was, you know, stock was under a dollar then. But what I do, when I do bring that up to me, kind of like, hey, you know, if it happens. I don't think it's on as like, my first three, four things to do here.
CEO Insights and Company Development
What I like about Darrell, man, he's just like, you know, I talked about, when we talk about ir, whatever, he's like, I just run the company. This guy is, like, all about business. Even when I met him, like, you know, in Texas, one of the site visit, and I think Mark brought us up, too, was, you have a unique situation where this guy is a sales guy, which guys need it, but he's also turning into a great operator, too.
Operational Efficiency and Company Culture
He knows exactly how to delegate. This is a good CEO's. He knows exactly who the right people are, where to put them, how to deal with them. He's really improved the culture of the company, too, which I think is kind of, which is really nice. Well, Maj, it's actually the, you know, what's funny is that he's proven the opposite first. Right? You had this guy brought in, and he's a multi decade, high level vp of sales for companies like IBM itwo, if anybody remembers what that was from the Internet bubble.
Strategic Management Decisions
And now Dell, you know, coincidence. Coincidence. And instead of selling first, he fixed the company first. He fixed the operations first. He made it efficient first. And only now is he getting all of his old sales buddies who know how to sell deals into the company now that he feels confident that he can scale up and handle deals. So it could get crazy. And I think what's going to happen now is the new CFO going to be the one that drives the uplifting process.
Future Strategic Directions
Because like I said, once they get up to above $7, the prospect of them getting into the Russell 2000 is going to make their cost of capital, which is something that Daryl might not quite understand. You know, as a first time public company CEO, to get your cost of capital down is critical. And getting onto the Russell is like a rite of passage that says you're a real company. Right. Right.
Market Dynamics and Future Predictions
So once the stock gets to seven, the only thing that stops them from getting in is an uplifting, which is. If they want to do an acquisition strategy, at some point, they're going to need to use equity down the line. So they have to be listed at some point, I'm sure for that, too. Bingo. Bingo. Yeah. All right. That was a lot of fun.
Closing Remarks and Future Plans
Wolf, you still there? I'm here, but I think I need to wrap soon. Okay. All right. I don't know if stock sniper had a chance to say anything. I know he had that question for Justin, but was there something you wanted to mention on small caps or stock for the week or something? Well, to be honest, I got. I'm not the biggest small cap trader by definition of small caps.
Small Cap Insights and Recommendations
We're talking about companies that are between 250 million to 2 billion. None of the stocks that I own meet that criteria. But if I had to bring it to the closest one, I'm going to have to say I like EMS and MS is sitting at 3.5 billion. If you want to still consider that a small cap. That is my favorite small cap stock. I really do like hims, and I like how they're creating a recurring revenue based on subscriptions, and it seems like they're really taking over the mail enhancement space and also really tackling a lot of things with the hair loss space as well.
Investment Strategy and Personal Insights
But, yeah, I love that pick. I doubled my position yesterday. It's my pick of the week for Wolf's. Show last night. So good pick there, Maj, last comment and then we'll have to wrap it up. Yeah, I mean it's really quick. I wanted to end it with another data center kind of really quick. I don't know if I want to call it pitch yet because I just came across our table last week, but I'm going to start taking a look, real close look at PSIX before even say what they do here.
Company Analysis and Future Growth
Reported numbers last week, 72 versus 2080 ps. And sales were actually down a little bit. The stock got ding and we put it on our buy and pullback portfolio because we noticed a few things. Either they paid down like a lot of debt, like 70 million debt over last year or so, they got maybe 150 million left. But really more importantly, these guys that make like different type of power solutions and one of the things what they do is they make these encasements, I guess for generators.
Future Projections and Market Trends
And I noticed in the press release here that they're talking about now that sales are down the first half of the year increase now moving forward. And it seems like they found this was one of those like cool kind of things where you have an old company learning new tricks and they're starting to aggressively target these encasements, I guess, and I need to find out more about it for data centers I'm assuming generators and data centers and this and that's what's going to fuel some of the growth I think we'll have for these guys.
Market Strategies and Financial Outlook
And it's, these guys are looking for higher margin revenue moving forward. We have 20 million in cash, 150 million revenue, probably paying any debt aggressively. And it's selling as a value trap. It's selling basically on a pe of nine, trailing a pe of six on this number. So they keep paying down that debt. I get a better line of sight on where they are in the status center kind of move here. It's going to get really interesting because that data center information was buried in the press release.
Final Thoughts and Company Innovations
It was also buried in the press release. They said they're working on some really large projects in the data center world here. So I'm really excited to continue this one over here. And we are strategically prioritizing the rapidly expanding data center sector. They say this in the press release, they say a couple new strategic partnership voice for drive, future growth in data center market close, working on some, closing some major contracts.
Company Future and Market Position
I don't think anyone knows what these guys do. You've seen the volume kind of pick up, it spikes up, it goes up, comes back down a little bit as I think discovery of that information is starting to play through. So it's gonna be really interesting to see how that plays out. And I already have an interview out to the company to interview them can soon. So that's psix is a symbol in the OTC. Okay, Psix. Great.
