I stole this idea. A lot of what I’m doing here is paraphrasing the work of my friend. OK? OK. With that out of the way… let’s dive in.
People, businesses and communities continue to increase their use and dependence of technology. More and more people shop online, stream content and make Zoom calls, every day. We know this. The story isn’t new. covid accelerated these phenomena, etc.
Interestingly, this growing use and dependence on digital stuff… results in massive changes in the physical world. More specifically, it’s having a profound effect on digital assets.
Colony Capital is undergoing significant change. It’s transforming from a diversified REIT to a digital asset-focused asset manager. During 2020, Colony hired Marc Ganzi as CEO (after acquiring his company) and shed some non-digital assets, like their hospitality and bulk industrial assets, while acquiring digital assets like data centers, fiber businesses and cellular towers.
In short, they use OPM (other people’s money) and a bit of their own, to acquire and operate digital assets.
Valuation and Price
I need to improve on this section, as I’m totally relying on my friend, but here we go…
CLNY has about a $2.5 billion market cap and is trading close to its 2021 NAV of $5.00 per share. The belief is that Colony will be worth $8.00 per share in 2023.
Margin of Safety
The stock price has come up to 2021 estimated NAV, but there’s still a pretty big redundancy with an $8.00 2023 price target.
Marc Ganzi is an absolute stud with a great track record.
I need to work hard and do more of my own work on this one, to see if I can develop conviction, otherwise the margin of safety doesn’t even matter.
Need to learn more about Marc Ganzi, digital assets, and 5G.
Some interview of Marc. He kind of talks like Bruce Flatt, but perhaps all polished executives speak similarly. https://www.youtube.com/watch?v=UGrJEPFVATw, https://www.youtube.com/watch?v=bSV8_d15O74, https://www.youtube.com/watch?v=oY8CJ23bPs0.
I own shares of CLNY.
Thank you to my friend who wants to be anon.