Silvia (formerly ProCap Financial) announced today they’ve bought back an additional 5% of the shares outstanding. Total repurchases so far have totaled 20%.
I’ve updated my NAV model. Based on pre-market trading, the stock is priced at 100% of NAV. Said another way, when you buy $SVIA, you are buying Bitcoin at the current market price and getting the AI CFO Silvia business at zero cost. The risk is that spending on that business exceeds the value created. Initial disclosures from the company indicate CFO Silvia is growing quickly and attracting paying users at an extraordinary rate. It’s early, but they’re succeeding.
Management has a history of being willing to shrink the size of the company to create shareholder value. Part of my positive initial thesis on the stock (originally $BRR) was that this is one of the most shareholder-friendly management teams I’ve ever seen. Pomp and CFO, Cormier, have a demonstrated history of buying back stock when the discount to NAV is substantial. Pomp also receives no meaningful compensation for running the company. Instead, he has an option package that provides massive compensation if shareholders make a large multiple of their money vs the current stock price. As I said in my initiation report, if he does that, the appropriate response is to pay him and say “thank you”.
For DKI premium subscribers, we have made money multiple times by buying an additional position in the stock at a discount to NAV and selling those extra shares at a premium. Those opportunities are increasingly rare and last a very short time. That’s why I mark those posts “urgent” and get them to subscribers immediately. Management action has decreased both these opportunities as well as the duration they last, and has effectively put a floor on the stock. I continue to watch the relationship between company assets and the stock price, and may find other opportunities to add returns by buying at favorable valuations.
Not counting additional trading profits, DKI has made more than 140% in the stock since we initially recommended it two months ago.
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