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By putting all of our investment recommendations and strategies into a single product, with complete do-it-for-you portfolios like Porter’s Permanent Portfolio, and adding a lively Roundtable discussion each month, this single membership is truly everything you need to be a complete investor.

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About Distressed Investing

The Secret To Investing In Distressed Debt

As the corporate debt bubble unwinds, we have partnered with legendary financial author and credit analyst Martin Fridson to take advantage of “the greatest legal transfer of wealth in history.” Martin releases monthly distressed debt and equity recommendations, for Partners only.

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A Once-In-A-Generation Moment For Tech Investors

We’re at a tipping point with emerging technology, witnessing changes that were unimaginable just years ago. Living in the San Francisco Bay Area — the tech capital of the world — Tech Frontiers senior analyst Erez Kalir has his finger on the pulse of advancements in artificial intelligence, blockchain, computing, and biosciences.

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Winning New Contracts Even As Competition Heats Up

Welcome to Porter & Co. Distressed Investing, edited by Wall Street’s Dean of High Yield, Martin Fridson. 

To learn how distressed investments like this one help us take advantage of “The Greatest Legal Transfer of Wealth in History,” see the complete Guide to Distressed Investing on our Reports page.

In addition to hosting Distressed Investing on our website, we also make it available as a downloadable PDF on the Issues & Updates page here.

“Good morning,” Sarah said casually after sliding into the driver’s seat of her sleek new BMW. 

A natural, human-sounding response greeted her: “Good morning, Sarah. Where are we headed today?” 

“Take me to the nearest coffee shop,” she replied in a natural conversational tone, and the system instantly plotted a route, displaying it on the windshield via an augmented reality (“AR”) overlay – a feature that allows Sarah to keep her eyes on the road.

As she pulled out of her driveway, Sarah decided to tweak the cabin environment. “It’s a bit chilly – turn up the heat to 72 degrees,” she said. The climate control adjusted. She then added, “Play my morning playlist.” The car’s internal system pulled up a curated mix from her connected Spotify account, all without her lifting a finger.

The road ahead curved through a busy city stretch. “Ugh, traffic again,” she said to herself. Analyzing her tone and subtle facial cues via in-cabin cameras, the assistant responded empathetically: “Looks like a busy morning out there. Would you like a calming podcast instead?” Sarah smiled and nodded.

Halfway to the coffee shop, her phone buzzed through the car’s sound system. “Answer it,” she instructed, and the system filtered out road noise, delivering crystal-clear audio. It was her friend Mark, asking about weekend plans. “Let’s figure that out later – add it to my to-do list,” she said. The call ended, and an internal device logged the task, syncing it to her phone.

The company behind these technological advancements is a $300 million market cap business that had spun off from a larger firm in 2019 to focus exclusively on revolutionizing the automotive experience through artificial intelligence (“AI”)-powered voice assistance.

For two decades, that larger company had been a titan in the world of speech recognition, its technology woven into the fabric of countless industries, from healthcare to automotive. But now, as a separate entity, it has emerged with a singular mission: to revolutionize the way we talk to our cars.

The spinoff wasn’t just a corporate shuffle – it was a strategic leap. The company had powered voice systems in over 250 million cars, from BMWs to Toyotas, but the automotive landscape was shifting. Giants like Amazon (AMZN) and Google (GOOG) were eyeing the dashboard, and this smaller, nimbler entity needed to carve its own path.

Most cars had some aspect of the technology it had developed – like hands-free calling. But now the competition is growing up – and getting way more complex, integrating advanced voice tech features with assistants who understand you and anticipate your needs.

Now it’s been more than four years, and the new spinoff’s journey hasn’t been without bumps. It debuted on the Nasdaq in the fall of 2019, and its shares took a nosedive of more than 50% in a matter of weeks. The new company remained focused – and began to prove itself. By December 2019, the company reported $83 million in quarterly revenue, a 10% jump year-over-year, and the stock began to climb.

Now the company has grown into a leader, powering over 500 million vehicles with AI that listens, learns, and responds. 

Turning The Company Around

The bond we are recommending this month was issued by that spinoff technology company, which investors valued at roughly $4 billion at its peak four years ago. Then the company’s revenue declined and its stock price fell dramatically. It’s still the leading player in a growing industry, and new management is doing the right things and beginning to turn the company around. We believe this past turmoil has created an opportunity to buy its bond at a very favorable yield. Specifically:

  • The company is the market leader in a specialized use of AI
  • It is priced at a roughly 30% discount from its face value
  • It features an annual yield of 13.6%. 
  • The company generates positive free cash flow every year
  • Management has instituted a comprehensive process to enhance productivity and cut costs