In today’s briefing:
- 2024 High Conviction: Buy Hollysys
- Crypto Markets Take Center Stage
- EB: Brightening Up the Portfolio, Initiating with Buy
- ServiceNow, Inc: Global Funds Ramp Up Exposure
- MariMed, Inc. – Closes $58.7 Million Debt Refinancing
2024 High Conviction: Buy Hollysys
- Despite Hollysys Automation (HOLI US) receiving a myriad of proposals over the past three years, nothing moved forward. Calling an SGM to spill the board would change that status quo.
- But Hollysys’ board stonewalled the SGM, pinning its reason – and a proposed injunction – on the subjective ownership of Ace Lead, and in turn, its 6.7% holding in Hollysys.
- That injunction was dismissed last week. An SGM will now be held late January. A firm merger proposal is expected in the middle of next month. This is a buy.
Crypto Markets Take Center Stage
- BTC is up ~140% since its bottom 1yr ago. Prior instances imply BTC is in the early innings of a new bull cycle with most of its expected gains ahead.
- Market breadth is expanding as we are seeing industry wide participation in recent weeks.
- Onchain borrowing activity is picking up, as are average lending rates and utilization rates on stablecoins, which are some of the most popular assets to borrow during market uptrends.
EB: Brightening Up the Portfolio, Initiating with Buy
- We are initiating coverage of Eventbrite (EB) with a Buy Rating and $12 target.
- Eventbrite benefits from social change where in-person meet ups are celebrated more so than virtual events.
- Eventbrite fills the void of online dating apps. The popularity of online dating apps is dwindling, and Eventbrite should benefit from this growing trend.
ServiceNow, Inc: Global Funds Ramp Up Exposure
- Global Fund exposure in ServiceNow, Inc. hits all-time high with 20.6% of funds invested. Funds move to overweight.
- Positive Rotation Across All Metrics Driven by Growth and Aggressive Growth Managers.
- Positioning relative to technology sector peers suggests room for even broader market penetration.
MariMed, Inc. – Closes $58.7 Million Debt Refinancing
- MariMed closed a $58.7 million secured credit facility with a US chartered bank on November 17, 2023.
- The refinancing will result in a $4.7 million reduction to principal and interest expense in the first 12 months and $3.5 million annually for the next four years.
- MariMed estimates its new weighted average cost of debt is now about 8%, down from more than 11% previously.
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