Trade Idea #12

A microcap with near certain odds of being taken private, trading at a 40% discount to net cash

Occasionally, the market misprices a company so dramatically that the risk/reward equation becomes unusually asymmetric.

We recently found such a situation, from an idea gen source we occasionally rely on: a cash-rich, profitable microcap controlled by a founder who has previously attempted — and narrowly failed — to take it private. The combination of optionality, balance-sheet strength, and operational compounding makes this a compelling special-situation opportunity.