Two quick updates

Removed the paywall on a liquidation play.

Update #1

Following its completion of the 19-property portfolio sale to Cortland Partners, Elme Communities at the end of last week announced a $14.67 per share special liquidation dividend to be paid on January 7, 2026. This lands at the midpoint of what management outlined in its August liquidation announcement — back when I wrote up the stock as a liquidation play for a 20% expected IRR.

With 99% of attending shareholders voting both the deal and liquidation proposal through on October 30, and with the share price still trading like a layup even after the vote, last week’s dividend announcement simply formalized what was already a high-conviction outcome.

As a result, last week, the market quickly corrected course. The IRR has now been front-loaded into the share price, and the investment case has played out. Since my original writeup, the IRR sits at 22.2% and well over 100% since the vote. Gotta love those boring special sits.

If you’re not premium, I’ve removed the paywall so you can read the original thesis here:

Liquidation play for a 20% IRR

Update #2

I’m also pleased to share that Sung Capital has now been registered with the Danish Financial Supervisory Authority as investment manager for an alternative investment fund (and that the fund itself has likewise been registered with the FSA). This is quite a milestone for me. I’ve dreamt about setting up an investment partnership since forever, and here we are.

Many of you have been following my writing from its earliest Junto days, when my newsletter was simply a place for me to publish research, test ideas, and document my thinking. A heartfelt thank you to everyone who’s still here and to those who wrote me kind notes when I revitalized the newsletter under Sung Capital. Your encouragement and support have meant more than you think.

(I’m mentioning this update strictly for informational purposes. It should not be interpreted as investment advice, a marketing communication, a solicitation, or an invitation to invest in any alternative investment fund.)

Bonus update

I have an exciting writeup coming on yet another special situation within the next couple of days. We’re dealing with a proposed take-private offer by the controlling CEO and chairman. The cash offer sits at a modest premium to the current market price, but things get interesting when you dig deeper. This came on my radar when I was alerted that a minority holder had sent a letter to the board arguing that the offer dramatically undervalues the business, claiming it’s worth a whopping >3x more than the bid. Even four sell-side analysts — who will rarely put out price targets far above or below the share price unless they have a very strong case — collectively sit at twice the current share price. I agree: the offer grossly undervalues the business.

Setups like these are attractive because there’s huge upside in a potential revised bid or a third party stepping into the ring to snatch up this scalable business with high recurring revenue, strong unit economics, and clear strategic value to both financial sponsors and industry buyers who continue to consolidate. And even if the proposal fails, you’ll still own a stock at a price below what a sophisticated buyer with complete inside knowledge was just willing to buy the whole shop for, with a rerating catalyzed by the offer being put on the table in the first place. In other words, the margin of safety and risk/reward proposition here is solid.

You don’t want to miss this one, so keep an eye on your inbox this week.

Cordially,
Oliver Sung

PS: Part 4 of my investment method series is coming this week too. It took a back seat to a few practical priorities recently, but it’ll be well worth the wait.

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Oliver Sung is the founder of Sung Capital. Sung Capital manages an investment partnership and picks underpriced stocks, usually in pockets of the market where large pools of capital (funds and institutions) can’t or won’t invest. Sung Capital picks stocks only, uses no leverage, and requires a significant margin of safety in every investment. Oliver can be reached at oliver@sungcap.com.