PhenixFIN Corporation (NASDAQ:PFX)

MDLY is on the verge of selling the MCC investment contract which will allow MCC to be managed by stronger credit manager. The stock will react similar to the way FSC reacted after FSAM changed FSC/FSFR management. 40-50% boost in stock valuations. MCC is trading at 48-50 cents of 3/31/18 book value per share. The company is invested in 85% senior secured loans across 64 investments. MDLY, the manager of MCC, has a huge cash problem. Now locked out of the equity and bond markets, MDLY faces no real solutions to raising capital without massive dilution which would severely impact the Taubes(management) who own over 80% of the company. Their only real option is to sell the MCC investment contract and pay off debts. MDLY and MCC both are late in their press release that schedules earnings. Something is up and strategic alternatives are a definite strong possibility at this point. This isn't like other speculative deals, this is simple math. There is no alternative solutions for MDLY, and they will do whats in their own best interest - selling the MCC investment advisory contract. The contract is highly valuable and in strong demand by other BDC managers, credit managers, etc. In addition, MCC has not put forward notice to redeem any of their notes in the june quarter, which suggests that NAV has stabilized for June. MCC maintains to the best of their ability a 0.75:1 debt to equity ratio. If you look at proforma cash on balance sheet via press release may 9, you can see that cash is approximately $140MM. So they have lots of liquidity here to pay down debt and keep leverage ratios intact, repurchase stock, etc.