MP — Revision 2026-06-10 — EPV recompute
Executes the Tier 2 Backlog item opened by audit-log entry #013. The thesis used $46.3M (the Materials + Magnetics segment sum) as Q1 2026 consolidated adjusted EBITDA; the reported consolidated figure is $36.6M after corporate and unallocated costs T1. The groundskeeper corrected the factual figures in place on 2026-06-10; this revision re-derives the EPV that depended on them.
What changed
| Item | Prior | Recomputed |
|---|---|---|
| Annualized adjusted EBITDA (EPV input) | ~$185M | ~$146M ($36.6M × 4) |
| Honest D&A charge | implicit ~$105–115M | $90–110M stated (FY2025 actual $89.3M; Q1 2026 run-rate ~$128M annualized) |
| Normalized EBIT | $70–80M | $36–56M |
| Operating EPV (21% tax, 8–10% WACC) | $0.6–0.9B | $0.3–0.55B |
| Net cash added | ~$0.7B | ~$0.7B unchanged, now carrying an explicit verification flag (see below) |
| Share count | 177.7M | 178.0M diluted (Q1 2026 10-Q per MP-fundamentals) |
| EPV per share | $8–12 | $5.50–7.00 (central ~$6) |
| EV/EBITDA at $58 (Method 4 cross-check) | ~50x | ~65x |
| Shadow-matrix Klarman row | central $11, range $8–14, trigger $5.50 | central $6, range $5.50–7, trigger $3.00 |
| Matrix spread | $11–85, 7.7x | $6–85, ~14x |
Central value ($50), range ($35–95), trigger ($42), methodology, and verdict (pass-with-trigger) are unchanged. The trigger rests on the asset and replacement anchor (Method 2), which this revision does not touch.
Reconciliation of the three disagreeing EPV floors
Audit #013 noted three EPV-floor figures in circulation: thesis §5 "$8–12," shadow-matrix Klarman central "$11," and the 2026-06-09 builder note "$7.50." All three descend from the same overstated $185M input — they differ only in rounding, net-cash handling, and where in the WACC/D&A band each landed. The recomputed band of $5.50–7.00 (central ~$6) replaces all three. The 2026-06-09 builder note and PM note are historical records and are left as written; this file and audit #013 are the reconciliation.
Derivation at the band edges: low = $146.4M − $110M D&A = $36.4M EBIT × 0.79 ÷ 10% + $0.7B net cash, over 178.0M shares ≈ $5.55. High = $146.4M − $90M = $56.4M EBIT × 0.79 ÷ 8% + $0.7B, over 178.0M ≈ $7.06. Central uses $100M D&A and 9% ≈ $6.20.
Balance-sheet flag opened by this revision
The ~$0.7B net-cash input came from the original thesis (sourced to the Q1 2026 8-K). The EDGAR pipeline cannot confirm it: per MP-fundamentals, cash was $886.3M against total debt of $1.00B at 2026-03-31 — net debt of $114.2M on a cash-only read — and the concept map carries no short-term-investments tag for MP ("no data found"), so whatever sits in investments is invisible to the pipeline. The figure stands on the 8-K for now, flagged rather than corrected, because the pipeline gap means the cross-check is incomplete, not failed. Follow-up filed in the Backlog: extend _Tools/edgar/concept-map.json with short-term-investments tags, regenerate the MP fundamentals file, and verify the net-cash figure at figure level. Sensitivity: each $100M of net liquidity that fails to verify removes about $0.55 from the EPV band; at the cash-only net-debt read the band bottoms near $1.00–2.50. No outcome in that range moves the floor toward $58 or touches the asset-anchored trigger.
Prior state (snapshot)
Thesis §5 Method 1 (as published 2026-06-09, with the 06-10 groundskeeper markers)
Annualizing the March 2026 quarter gives roughly $185 million of adjusted EBITDA. [corrected 2026-06-10 — see audit-log #013: this $185M annualization uses the overstated $46.3M segment-sum (×4). Using the actual consolidated adjusted EBITDA of $36.6M, annualized adjusted EBITDA is ~$146M, not $185M — about 21% lower. ...] Mountain Pass depreciation is heavy; charging it honestly pulls normalized EBIT to roughly $70–80 million. Taxed at 21% and capitalized at a 10% cost of capital, the earnings-power value of the operating business is on the order of $0.6–0.9 billion. Add net cash of about $0.7 billion and divide by 177.7 million shares, and EPV lands near $8–12 per share T1. This is the floor, and it is far below the price.
Shadow-matrix Klarman entry (as published 2026-06-09)
| Pure Klarman / Graham | $11 | $8 – $14 | $11 × 0.50 = $5.50 | Pass |
Pure Klarman / Graham — $11. EPV-only. Normalized EBIT roughly $70–80M, taxed at 21%, capitalized at 10% WACC, plus net cash, divided by 177.7M shares. Zero growth value. Range ±~15% on normalization uncertainty.