Four liquidations that seem interesting
Brokerage, Oil, Real Estate, and Communications
I tend to like liquidations as part of my portfolio along with broken biotechs selling below cash.
They usually feel like situations where you know what you can lose.
Today, we are going to cover four liquidations.
Hopefully, some of you got in on the SATS trade from the last article, which happened to be timed rather well with the $2 trillion IPO of SpaceX.
Depending on my mood and how much interest there is, I may do another what I am trading list next week. I have been pretty active.
Anyway, let’s get to it.
Special Situation #1: Jarvis Securities (JIM.L)
Jarvis was a small UK retail stockbroker. Past tense.
The company sold its brokerage business, announced a managed wind-down of its regulated subsidiary JIML, and appointed S&W Partners LLP as an independent monitor to oversee the process.
What remains is not an operating business.
It is a balance sheet with an FCA supervisor and an independent wind-down monitor standing between shareholders and their cash.
The numbers from the 31 December 2025 interim accounts:
Total assets: £13.3m
Total liabilities: £4.9m
Shareholders’ equity: £8.398m
Shares outstanding: 44.731m
That is 18.8p of reported book equity per share.
The stock last traded at 7.25p.
You are buying 18.8p of reported equity for 7.25p. That is a 61% discount to book.
Now the adjustments that matter.
The liability includes £3.050m of customer redress provisions.
Specifically, inducement breaches (sharing commission with an introducer) and interest-related complaints (unclear language in legacy client terms around interest on client money).
Management stated actual outcomes could deviate materially from estimates.
The main constraint is £10.5m of cash sitting inside JIML. That cash does not move until the FCA is satisfied, redress closed, client assets reconciled, wind-down substantially complete.
S&W Partners are there specifically to push this process and represent client and shareholder interests in getting to the finish line.
Besides this issue, of course there are closing costs and G&A, which make the value proposition much less clear.
So, what you are buying is equity at a 61% discount, backed by real cash, gated by regulators. The discount is wide because the process has been painful and the timeline is uncertain.
If redress settles near provision and the FCA releases JIML on a reasonable timeline, the upside from 7.25p to 18p+ is substantial.
If redress balloons or the regulator drags its feet, the wait gets longer and the returns compress.
G&A and other expenses also eat up cash, so an estimate of final return can be quite extreme.
Special Situation #2: Otto Energy (OEL.AX)
Otto is a small Australian-listed E&P with non-operated Gulf of Mexico producing assets. It has no financial debt.
Its cash position alone is extraordinary relative to its market capitalization.
Cash and equivalents: US$19.314m
Financial debt: zero
Total assets: US$32.336m
Total liabilities: US$8.746m
Shareholders’ equity: US$23.590m
Shares outstanding: 4,795m
Market cap sits at approximately A$28.8m or USD $19.9m
The company sells at cash and below equity value.
It has been generating positive value on its few wells with 75% of its revenue coming from oil and ngl products.
Given the average price of oil and gas has increased a lot due to the Iran crisis, they are going to make a good deal (several million dollars) of cashflow in the 1H of 2026.
The biggest issue with this company is that it seems to have too much G&A for a non-op producing entity with just a couple of wells.
It also seems to have problems around issuing dividends in Australia without drama based on the last capital return they did.
Special Situation #3: Stratus Properties (STRS)
Stratus spent two decades building mixed-use projects in Austin, Texas: retail, multifamily, land development, hospitality with a track record of $1.3 billion in total asset sales at an average 39% pre-tax margin over 20 years.
On March 24, 2026, the board unanimously approved a plan of complete liquidation and dissolution.
The plan is subject to stockholder approval at a future meeting. It is not yet final.
The range is intentionally wide.
What remains is a portfolio of Austin-area development parcels, income-producing retail, multifamily projects, and raw land.
Stratus has a 20-year track record of selling assets at prices exceeding published NAV.
You are buying at the low end of forecasted liquidation value with the stock at $30.
The main question is how long it takes for them to liquidate and will the plan get approved.
Special Situation #4: Beam Communications (BCC.AX)
Beam Communications is an Australian-listed satellite communications equipment company that, until recently, co-owned ZOLEO.
That joint venture is now gone.
What remains is a stripped-down legacy hardware business, a clean balance sheet, and a $12.1 million capital return actively being paid out to shareholders.
Beam held a 50% stake in ZOLEO Inc. alongside Canadian partner Roadpost Inc.
The relationship deteriorated badly.
An arbitration panel found Beam in material breach of its JV obligations and ordered it to sell its ZOLEO shares to Roadpost.
After a prolonged dispute involving competing settlement offers and public sparring on the ASX, Beam received a lump-sum payment of US$9.03 million (approximately A$14.6 million) from Roadpost in January 2026, fully resolving the dispute.
The stock currently trades at approximately A$0.185, meaning the $0.14 distribution alone represents roughly 74% of the current share price being returned in cash.
The ex-date is May 1, 2026. If you are buying today, you are essentially paying $0.045 for whatever the remainco is worth after the distribution clears.
After the capital return, you are left with the legacy Beam hardware business, satellite and dual-mode communication devices sold to carriers like Iridium, Inmarsat, Thuraya, and Telstra. This is not a growth business. But it is generating cash.
The company is also executing a cost optimization program targeting A$3.5 million in annualized savings, up from an earlier target of A$2.5 million.
Here is where it gets interesting. Strip out the $0.14 distribution and you are paying roughly A$0.045 per share for the residual business.
With approximately 86 million shares outstanding, that implies a post-distribution market cap of roughly A$3.9 million for a business that just generated $2.0 million in net profit in a single half-year.
The strategic review currently underway introduces the possibility of a further sale, merger, or full wind-down of the residual business, which could unlock additional value above and beyond the distribution.
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None of these liquidations is compelling.
Jarvis Securities:
• What you are suggesting is to buy 18.8p of clean book for 7.25p. The “61% discount to book” is true, but it is the wrong anchor – in this regulated wind-down, book value is not the same thing as realizable equity for shareholders
• In reality, one would be buying here a claim on trapped cash and uncertain receivables inside a regulated wind-down, where the largest liability is a still-evolving redress scheme and the operating cost base continues to erode value while the FCA process runs.
• The redress estimate carries a huge risk. For example, just a 0.5% increase in the interest rate used to calculate redress would increase the provision by £1,489,162, which has an impact of 3.3p/share (see 30 June 2025 audited results). When the stock is around 7.25p, this is not rounding error. This is a thesis-moving number. And so on and so on.
• Probably the most underappreciated risk is the ongoing wind-down burn / cost leakage. Please note that for the six months ended 31 December 2025, Jarvis only reported a positive profit because of £10.817m exceptional proceeds from the business sale. Else the underlying pre-tax result for the half year would be about minus £2.89m, or roughly minus 6.45p/share over six months. So the idea that the shareholders are patiently waiting for a static pile of cash is wrong. They are waiting while a regulated entity continues to consume resources.
• The stock is illiquid and quoted with a very wide spread; e.g. Hargreaves Lansdown showed around 6.75p bid / 7.75p ask.
• Note that Jarvis still intends to seek cancellation of trading on AIM, subject to shareholder approval, once the process gets far enough along. This can leave minority shareholders with worse liquidity and a more awkward path to exit before final distributions.
• S&W Partners LLP were appointed to monitor the objective of an effective and efficient wind-down and to challenge and advise. Not to stand between shareholders and the cash in a constructive, almost protective way.
Otto Energy:
• Your statement that “the company sells at cash” is true but it is analytically imprecise to treat reported cash as excess cash – let us not forget that the company had liabilities of US$8.746m at 31 December 2025.
• The big risk and here are the decommissioning provisions. At 30 June 2025, they were US$6.469m, and management warns there could be significant adjustments as assumptions change. At 31 December 2025, total provisions had risen to US$7.390m.
• Can it be that the market is not mispricing the cash but is rather discounting the possibility that a large part of that cash will be consumed or economically offset by decommissioning obligations, asset deterioration, and time and corporate leakage before shareholders ever receive another meaningful distribution?
STRS:
You are saying that “You are buying at the low end of forecasted liquidation value with the stock at $30.” Yes, the stock is currently $30.35, and the company’s low-end estimate is $29.73. And it is fair to say that the company is unusually explicit that the estimate is based on many judgments. There are just so many risks associated with this “development-asset realization story priced close to management’s downside case” that I just do not see the risk vs. reward here in this messy multi-year liquidation – e.g. the remaining property portfolio is weak and Austin property market is challenging, there is also incentive leakage - disclosed cash severance/pro-rata bonus amounts tied to the liquidation are sizeable: CEO: about $4.97 million, CFO: about $2.33 million, possible time-drag, etc. etc. No reason to underwrite management low-end estimate of the liquidation value and for a special situation with real execution risk there is absolutely no margin of safety here.
Beam Communications:
You are right when you say that “you are essentially paying A$0.045 for whatever the remainco is worth” is mathematically just A$0.185 minus A$0.14. But that does not mean the market is truly valuing the post-return business at only A$3.9 million in a mispriced way.
The statement that “post-distribution market cap of roughly A$3.9 million for a business that just generated $2.0 million in net profit in a single half-year” is weak in the way that you may be too optimistic in treating H1 FY26 profit as a durable run-rate and extrapolating an unusually favorable half-year for this now-smaller hardware business despite management’s warning that H2 core equipment revenue is expected to be considerably lower. So the question even is whether this remaining business should not actually deserve a distressed valuation – because what will be left may be low-quality, lower-earning, ex-growth hardware business with expected lower revenue, no moat and uncertain normalized earnings power.
despite gains, stratus missed peak austin hype phase by ~2 years.