TL:DR
🎯 Nope pass on this keeping my 1M sats but a Fiat DCA is reasonable Esp. if a Tether Fan 🎯
USD/BTC = $79,292
Block 964,758
1M sats = $793.12
BTC on Balance Sheet = 0
One share of ARGO = 13,541 sats ($10.74)
73.84 shares of ARGO per 1M sats
The Company Adecoago S.A (NYSE)
- Market cap = 18,922 BTC ($1.5B)
- PE = 31 (paying $31 for $1 of earnings)
- Forward PE = 6.9 (+251% earnings growth)
- Dividend? = Yes, 441 sats per share ($0.35)
- Debt =. 25,487 BTC ($2.02B)
- Cash = 4,163 ($330M)
- Expected earnings growth = 24%
Adecoagro S.A.(AGRO), engages in agricultural and agro-industrial activities in Argentina, Brazil, Chile, and Uruguay. The company operates through three segments: Sugar, Ethanol and Energy, Fertilizers and Farming. The company is involved in the production of a range of agricultural commodities, including soybean, corn, wheat, peanut, sunflower, cotton, and others; planting, harvesting, processing, and marketing of white, brown, and rough rice; genetic development of seeds; and production of dairy products, such as raw milk, ultra-high temperature milk, powdered milk, semi-hard cheese, cream, cream and cocoa flavored milk, chocolate and fluid milk, and other dairy products.
It also generates electricity through burning biogas extracted from effluents produced by its dairy cattle; and provides grain warehousing and conditioning, and handling and drying services. In addition, the company cultivates andharvests sugarcane to produce ethanol, sugar, and bioelectricity; and sells carbon credits. Further, it engages in land transformation activities, such as the acquisition of farmlands or businesses with underdeveloped or underutilized agricultural land; and the implementation of production technology and agricultural practices. The company was founded in 2002 and is based in Luxembourg, Luxembourg.
Bull(🐂 )and Bear(🐻)Case:
Bull case 🐂
Per @justin_shocknet Post: #1557518
I've long wanted exposure to hard farming assets without getting chopped up by futures contango or buying into a chemical-dependency
Recently broadened the search to off-shore while looking for regenerative farm land since everything public in the US is clown world chemically dependent, dollarized debt, asset light.
Offshore plays into a few confluent thesis...
- The dollar milkshake, US exports a lot of food and much of the world can't afford it. Even less so once foreign fiats start dying.
- The fertilizer FUD the deep state pushes every few years and extra hard since the Iran war psyop started
- Vertical integration now that the large packer monopolies are finally in the cross-hairs: https://www.washingtonpost.com/politics/2026/08/28/trump-suggests-allowing-ranchers-bypass-usda-inspected-meat-plants/
Found something more interesting than I expected that expands into yet another thesis
- Milei is the governor of a new US state in Argentina
But wait, it gets even more interesting...
This company I found mines Bitcoin 2 ways, with the methane for bio-effluent they use to make their own fertilizer from cow shit and with sugarcane mill waste.
And... it's majority owned by... fucking Tether. The keystone in Lutnick's dollar milkshake / Bitcoin world reserve currency operation.
Tether bought ~75% of if just last year. They have non-dollar operational costs but are settling shipments in USDT, lol. They're already on milkshake rails.
Whether South American fiats go to zero on their own, or the dollar milkshakes everything, or simply food continues to get more expensive, the assets are structured to reprice.
Doesn't appear to have Bitcoin on balance sheet yet, but with 2 mining operations and Tether as majority shareholder I'd imagine that's likely to reveal in any given quarter.
Even better, it's relatively cheap right now. P/E looks like it got worse recently because of paper mark-downs on unharvested crops in the ground, and they stored massive ethanol inventories last quarter instead of dumping at lows. Operational cash flow in reality just hit a record in Q2.
Chart seems to be working its way out of the chop.
So, near perfect asymmetry. The value of land and food production is what it is which limits downside, everything else is high upside.
Bear case 🐻
I believe the Agriculture business has very low profit margins. With revenue over $1B the free cash flow comes in at $52M. With operating expenses creeping higher. Also I find it strange they are paying a dividend when they are highly leveraged. While the bull case mentions the Tether $100M equity purchase with plans to possibly mine bitcoin which is also a low margin business adds more execution risk to delivering on the growth projections.
But is worth selling off 1M sats to stack 74 AGRO shares?
🚫NOPE!👎
First I want to thank shocknet for mentioning this stock in yesterday’s daily discussion thread. He makes a strong case to convince me to pick up a few shares. Owning shares in a company that are doing things in the real economy makes this investment really enticing to me. Being an owner of energy, water, and construction stocks makes adding AGRO would fit nicely with investment goals.
I rather keep the 1 million sats today! Getting 74 shares for 1 million sats isn’t bad but AGRO is projected to grow less than Bitcoin in fiat terms over the long term. Selling sats now to purchase this stock doesn’t sound like a good investment. Now if you have spare fiat around and want to latch on the bull case as laid out by shocknet then this stock could have some potential.
But I have my concerns as to why it’s not worth liquidating a million sats for.
I don’t quite understand why the company is paying a dividend right now that is yielding less than US treasuries. With all the debt they have they could be using that capital to pay off the debt or to grow the business. Paying dividends now appears to be destroying capital when growth is still possible. I do believe BTC is the tide that lifts all boats but I have reservations with this management team. Below are some fundamentals I pulled from my Simply Wall St. subscription
They cut the dividend in the past. Having unstable dividends shakes investor confidence and reflects negatively on the management team.
The stock way behind the market (S&P) and bitcoin over the last 5 years:
73% of the float is owned by private companies (Tether). Which means Wall Street can still come in and place a massive bid to pump the stock which could happen with a BTC narrative hard to see with a foreign Ag business that may not have the best management team. But also the company is at the mercy of Tether which can be good or bad. So far Tether hasn’t had much success beyond USDT. They have yet to prove to run a company outside of the bitcoin sector.
The revenues are on a trend up but it has been a bumpy ride. The general trend is growth but at this valuation I am sure investors would like to see more consistency and would like a smoother growth but with Ag on bad season can really hurt the bottom line. Plus margins are very thin at 3%.
Forgot to add this graphic showing their core business
My brother, agriculture here in Brazil is in terrible shape right now, and Milei isn't doing very well in Argentina, to say the least. He might even lose the next elections. Brazil is having elections in October, and Lula might win again... if Lula wins, agriculture will continue to decline... even though southern Brazil is purely agricultural, it's suffering a lot. Thanks for sharing that information; I wasn't familiar with that company.
Trading hard, century-spanning, strictly limited money for ethereal, permissioned, infinitely printable paper?
Yes, that sounds like a Blok prospect!
I've been very curious about this company since reading about it via tether research last year. Thanks a bunch for the sock analysis.
One of the questions I have with such a company as Adecoago is that there's really no telling what something like Tether will do with them. I'm sure they want to turn a profit, but it's definitely not a core part of their business. With a majority owner like that, I'd be worried that it becomes a pawn on their balance sheet.
I didn't know anything about the Tether relation, had never heard of the company, just happened to come up in Ag equity search.
The tether thing just happened to fit retrospectively with the dollar milkshake via stablecoin thesis.
My read is it makes their particular stablecoin a tollbooth for food in South America, it's buying network effect, and capturing arb between king dollar and dying local fiats. The Bitcoin mining creates an added dividend as a by-product.
Could they subsidize the stablecoin adoption at the expense of AGRO? Sell food below market just to get buyers on Tether rails? Perhaps, but I'd think that less intuitive than using the stables to make the company more profitable by selling goods to people with dollars while their costs are in a worse fiat... and then flip it back onto markets once those markets dollarize.