Core Viewpoint - Billionaire investor Bill Ackman has reaffirmed his investment in Fannie Mae and Freddie Mac, calling their release from federal conservatorship his "Best Idea for 2026" [1] Group 1: Ackman's Proposal - Ackman's strategy involves a three-step "walk before you run" approach aimed at stabilizing the housing market while benefiting the U.S. Treasury [2] - The plan includes a repayment acknowledgment, where the U.S. Treasury and FHFA should recognize that the GSEs have repaid their initial $190 billion bailout, returning over $300 billion in profits to the government [8] - The proposal also suggests that the government should exercise its warrants for a 79.9% stake in both companies, creating a mark-to-market windfall estimated at over $300 billion [8] Group 2: 2026 Catalyst - Ackman identifies 2026 as a crucial year for this investment, projecting that if Fannie and Freddie trade at 16x and 13x their estimated 2026 earnings, their shares could see an upside of 300% to 400% [4] - The relisting of Fannie and Freddie would provide a three-year period for the Trump administration to finalize capital requirements and management structures [4] - Michael Burry has echoed a similar sentiment, suggesting that the government is preparing to re-privatize the GSEs through a massive IPO, potentially valuing them at $500 billion by 2026 [5] Group 3: Financial Implications - Ackman argues that freeing Fannie and Freddie from federal conservatorship could remove approximately $8 trillion in liabilities from the government's balance sheet [6] - This move is seen as a way to transform a crisis-era burden into a significant success story for taxpayers in financial history [6] - The final component of Ackman's plan is to relist the stocks on the New York Stock Exchange, which would enhance liquidity for institutional investors [8]

Financial Performance - Fiscal Year 2025 total consolidated revenue reached $87.7 million, a 25% increase from $69.9 million in Fiscal Year 2024[1] - Journal Technologies generated $69.9 million in revenue, marking a 32% increase from $53.1 million in Fiscal Year 2024, driven by a 51% rise in consulting fees and a 59% increase in other public service fees[3] - Operating income for Fiscal Year 2025 was $9.5 million, representing 10.9% of revenue, compared to $4.1 million or 5.8% of revenue in Fiscal Year 2024[3] - Net income for Fiscal Year 2025 was $112.1 million, or $81.41 per diluted share, an increase of 44% from $78.1 million or $56.73 per diluted share in Fiscal Year 2024[3] - The company generated $13.3 million in operating cash flow during Fiscal Year 2025[3] Market Position and Strategy - As of September 30, 2025, the fair market value of marketable securities was $493.0 million, including pretax unrealized gains of approximately $134.3 million for the twelve months ended September 30, 2025[3] - Traditional Business reported advertising and circulation revenues of $17.8 million, reflecting a 6% increase over $16.8 million in Fiscal Year 2024[3] - Journal Technologies secured 17 multi-year contracts with courts and government agencies, expanding its client base[3] - The company is focused on expanding recurring revenue, maintaining low churn, and building long-term client relationships in the courts and justice agency sector[2] - Daily Journal Corporation continues to optimize its digital publishing operations and expand online content offerings in response to market demands[3]

Revenue and Financial Performance - Journal Technologies constituted approximately 80% of the Company's total revenues in fiscal year 2025, up from 76% in fiscal year 2024[38]. - Revenues from Journal Technologies' foreign customers were approximately $11.9 million in fiscal year 2025, compared to $6.2 million in fiscal year 2024[42]. - Consolidated revenues increased by $17.8 million (25%) to $87.7 million in fiscal year 2025 from $69.9 million in fiscal year 2024, driven by Journal Technologies' consulting fees, public service fees, and licensing fees[127]. - Total revenues increased to $87.7 million in September 30, 2025, up 25.4% from $69.9 million in September 30, 2024[180]. - Net income rose to $112.1 million for the year ended September 30, 2025, compared to $78.1 million for the same period in 2024, reflecting a 43.5% increase[180]. - Journal Technologies' pretax income increased by $10.2 million (408%) to $12.7 million, driven by a revenue increase of $16.8 million (32%)[136]. - Traditional Business revenues increased to $17.8 million from $16.8 million, with advertising revenues rising by $0.8 million (8%) to $10.1 million[141]. Operating Expenses and Cash Flow - Consolidated operating expenses rose by $12.3 million (19%) to $78.1 million in fiscal year 2025, primarily due to increased personnel costs and outside services[129]. - In fiscal year 2025, net cash provided by operating activities was $112.1 million, with non-cash items totaling $99.2 million and cash used for working capital of $0.4 million[150]. - The company reported a net cash provided by operating activities of $13.3 million for the year ended September 30, 2025, compared to a net cash used of $89,000 in 2024[185]. - In fiscal year 2025, net cash used in financing activities totaled $5.7 million, mainly due to a $5.5 million repayment on the investment margin loan[153]. Market and Competitive Landscape - The Company faces significant competition in the case management software market, with many competitors having greater scale and longer operating histories[54]. - The Company anticipates challenges in maintaining commercial advertising and circulation revenues due to competition from online platforms[82]. - The Traditional Business is expected to continue facing significant secular decline, impacting future revenues[86]. Technology and Development - The Company has begun developing next-generation development patterns and practices to address technical debts within current generation offerings[52]. - The Company has introduced AI features in some of its products and plans to further invest in cutting-edge technologies to maintain a competitive edge[53]. - The Company is investing in the development of new technologies and improving existing products to enhance profitability[87]. - Research and development expenses related to software development were $2.5 million for fiscal year 2025, up from $1.4 million in fiscal year 2024[201]. Internal Controls and Compliance - The Company has identified a material weakness in its internal control over financial reporting, primarily related to segregation of duties and access controls, which has not been fully remediated as of September 30, 2025[102]. - The Company has made significant improvements in internal controls during fiscal year 2025, including increased finance personnel and enhanced review procedures[104]. - The Company is currently evaluating the impact of new accounting standards issued by FASB, including ASU 2023-09 and ASU 2024-01, which will affect future financial disclosures[214][215]. Assets and Securities - The Company held marketable securities worth approximately $493.0 million as of September 30, 2025, with a cumulative unrealized gain of $353.9 million[94]. - The Company's marketable securities portfolio is concentrated in six companies, increasing the risk of significant declines affecting net income and shareholders' equity[95]. - The passing of Charles T. Munger in November 2023 is expected to affect the future financial performance of the marketable securities portfolio[96]. Employee and Corporate Governance - As of September 30, 2025, the Company had approximately 415 full-time employees and contractors, with a good employee relations status[60]. - The Company did not declare or pay any dividends during fiscal years 2025 or 2024, and does not expect to do so in the foreseeable future[121]. - The Company has a stock repurchase program in place since 1987 but did not repurchase any shares during fiscal years 2025 and 2024[123]. Subscription and Revenue Recognition - The Company recognizes revenues in accordance with ASC Topic 606, with deferred revenue recorded for subscription sales and recognized as earned when services are provided[156]. - Revenue from subscription-type services is recognized on a pro-rata basis over the subscription term, with proceeds deferred at the time of sale[211]. - The Journal Technologies segment generates revenues from contracts including subscription software licenses, maintenance, support, and consulting services, with revenue recognized when performance obligations are satisfied[172].

Core Insights - Daily Journal Corporation achieved annual revenue of $87.7 million for fiscal year 2025, reflecting a 25% increase from $69.9 million in fiscal year 2024, primarily driven by growth at Journal Technologies [1][2] Financial Performance - Journal Technologies reported revenue of $69.9 million for fiscal year 2025, marking a 32% increase over $53.1 million in fiscal year 2024, driven by significant growth in consulting fees (up $7.6 million or 51%), other public service fees (up $5.7 million or 59%), and license and maintenance fees (up $3.5 million or 12%) [5] - Operating income for fiscal year 2025 was $9.5 million, representing 10.9% of revenue, compared to $4.1 million or 5.8% of revenue in fiscal year 2024 [5] - Net income for fiscal year 2025 was $112.1 million, or $81.41 per diluted share, an increase of $34.0 million (44%) compared to net income of $78.1 million, or $56.73 per diluted share, in fiscal year 2024 [5] - The company generated $13.3 million in operating cash flow during fiscal year 2025 [5] Market Position and Strategy - The company sees a significant opportunity in the courts and justice agency sector, aiming to create durable value over time through modernization and implementation capacity [2] - Daily Journal Corporation's Traditional Business reported advertising and circulation revenues of $17.8 million, reflecting a 6% increase over $16.8 million in fiscal year 2024 [5] - Journal Technologies expanded its client base by securing 17 multi-year contracts with courts and government agencies [5] - The company is optimizing its digital publishing operations, expanding online content offerings, and streamlining workflows in response to evolving market demands [5] Marketable Securities - As of September 30, 2025, the company's marketable securities had a total fair market value of $493.0 million, including pretax unrealized gains of approximately $134.3 million for the twelve months ended September 30, 2025, and accumulated pretax unrealized gains of $353.9 million [5]

Core Viewpoint - The Company has firmly rejected the allegations made by Buxton Helmsley USA, Inc. and its CEO, Alexander Erwin Parker, and has referred the matter to federal and state authorities for potential criminal prosecution [1][11]. Group 1: Allegations and Responses - Mr. Parker has accused the Company of improperly expensing software development costs that should be capitalized, claiming this would "unlock value" and demanding two board seats and a consulting contract that could yield him $24 million [3][10]. - The Company has refuted Mr. Parker's accounting allegations, asserting that his claims are based on misunderstandings of accounting standards and practices [4][15]. - The Company has stated that its financial statements and accounting judgments are sound and have been reviewed by third-party experts and auditors [17][23]. Group 2: Threats and Coercive Tactics - Mr. Parker has engaged in a campaign of intimidation, sending numerous letters threatening reputational damage to Company directors unless they comply with his demands [4][6]. - Specific threats included disciplinary referrals to the State Bar of California against directors unless they supported his agenda [6][8]. - The Company views these tactics as coercive and inappropriate, leading to its decision to involve federal and state authorities [5][11]. Group 3: Company Governance and Future Actions - The Company has reassured stockholders of its commitment to integrity and governance standards, emphasizing that it will not be swayed by coercive tactics [23]. - The Company plans to file its Annual Report on Form 10-K for Fiscal Year 2025, which will reflect its continued application of accounting standards [17]. - The Company has also indicated that it will file a Form 8-K to provide transparency regarding the ongoing situation with Mr. Parker and BuHeUI [23].

Core Viewpoint - The Company has firmly rejected the allegations made by Buxton Helmsley USA, Inc. and its CEO, Alexander Erwin Parker, and has referred the matter to federal and state authorities for potential criminal prosecution [1][11]. Group 1: Allegations and Responses - Mr. Parker has accused the Company of improperly expensing software development costs that should be capitalized, claiming this would "unlock value" and demanding two board seats and a consulting contract worth an estimated $24 million [3][10]. - The Company has refuted Mr. Parker's accounting allegations, asserting that his claims are baseless and intended to harass and intimidate [4][10]. - The Company has consistently maintained that its financial statements and accounting practices are sound, with third-party expert reviews supporting its approach [17][23]. Group 2: Threats and Coercive Tactics - Mr. Parker has threatened Company directors with disciplinary referrals unless they comply with his demands, which the Company views as coercive and inappropriate [6][10]. - In his communications, Mr. Parker has made various threats, including reputational damage to directors if they do not support his agenda [8][10]. - The Company has documented these threats and intends to file them with the SEC for consideration of civil charges against Mr. Parker and BuHeUI [11][23]. Group 3: Governance and Future Actions - The Company has referred the matter to the SEC's Enforcement Division for potential civil charges related to the threats made by Mr. Parker [11]. - The Company is preparing to file its Annual Report on Form 10-K for Fiscal Year 2025, which will reflect its continued application of accounting standards consistent with past practices [17]. - The Board remains focused on acting in the best interests of the Company and its stockholders, rejecting any coercive tactics [23].

Core Insights - The article discusses the author's journey from a political career to value investing, emphasizing the importance of risk management and long-term wealth growth [1] Group 1: Career Transition - The author initially pursued a career in politics but shifted to finance after facing challenges in 2019, recognizing the need for financial stability [1] - A sales role at a law firm from 2020 to 2022 allowed the author to excel and manage a team, contributing to the development of sales strategies [1] - The transition to an investment advisory role at Fidelity from 2022 to 2023 highlighted a conflict between the author's value investing approach and Fidelity's reliance on modern portfolio theory [1] Group 2: Investment Philosophy - The author focuses on value investing, adopting an owner's mindset and a long-term perspective, avoiding short-selling strategies [1] - The experience gained from reading annual reports and studying public companies has been instrumental in assessing company prospects based on their sales strategies [1] - The author expresses enthusiasm for products that demonstrate strong market demand, indicating a preference for investments that have inherent selling power [1] Group 3: Current Endeavors - Since November 2023, the author has been writing for Seeking Alpha, sharing investment opportunities and insights with readers [1] - The author's aggressive saving and capital building efforts have positioned them to actively invest while providing valuable content to the audience [1]

Core Insights - Daily Journal Corp. (NASDAQ: DJCO) has a legacy that cannot be overlooked, but its current identity needs to be clearly defined [1] Company Analysis - The company is analyzed with a focus on its current operations and market position, emphasizing the importance of understanding its evolution over time [1] - The approach to investment includes a mix of long-term conviction holdings and tactical sector rotations, indicating a strategic method to capitalize on market opportunities [1] Investment Strategy - The investment philosophy is centered around the belief that successful investing is not merely about being correct but about generating profits [1] - There is a focus on uncovering undercovered opportunities and sectors driven by momentum, suggesting a proactive approach to identifying potential growth areas [1]

Core Viewpoint - Daily Journal Corporation (DJCO) experienced a mixed financial performance in the quarter ended June 30, 2025, with significant revenue growth but a notable decline in net income compared to the previous year [1][2][7]. Financial Performance - DJCO reported quarterly revenues of $23.4 million, a 34% increase from $17.5 million in the prior-year quarter, driven by strong performances in licensing, consulting services, and public service fees [2][3]. - Net income decreased to $10.47 per share, down 38% from $16.96 a year earlier, reflecting lower gains on the securities portfolio [1][2]. Segment Performance - The Journal Technologies segment was the primary growth driver, contributing approximately 79% of total revenues, with segment revenues climbing 44% to $18.5 million from $13.1 million a year ago [3]. - The Traditional Business segment generated $4.9 million in revenues, a modest increase from $4.4 million, but pretax income turned negative, recording a $0.9 million loss due to higher personnel costs [4][6]. Management Insights - Management highlighted that growth was largely due to successful customer project execution at Journal Technologies, focusing on product upgrades and operational efficiencies, although increased staffing and contractor costs pressured operating margins [5][6]. Investment Portfolio Impact - The decline in net income was significantly influenced by the company's investment portfolio, with unrealized securities gains dropping to $11.5 million from $28 million a year earlier, reducing non-operating income contributions [7]. - Operating expenses rose 23% year over year to $20.2 million, primarily due to salary adjustments and increased legal costs, impacting operating income, which grew to $3.2 million from $1.1 million in the previous year [8]. Other Developments - DJCO continued to decrease its reliance on margin borrowings, with the investment margin loan balance at $25 million as of June 30, 2025, down from $27.5 million at the end of fiscal year 2024 [9].

Core Viewpoint - Daily Journal Corporation is addressing allegations from Buxton Helmsley USA, Inc. regarding improper accounting practices related to software development costs, asserting that it has complied with accounting standards [1][2]. Group 1: Allegations and Responses - Buxton Helmsley USA, Inc. claims that Daily Journal Corporation should capitalize its software development costs instead of expensing them, suggesting this change would unlock shareholder value [2]. - The Audit Committee of Daily Journal Corporation reviewed the allegations and confirmed that the company is correctly accounting for its software development costs in accordance with ASC 950-20 [3]. Group 2: Accounting Standards Explanation - Historically, software companies followed ASC 985-20, which allows capitalization of development costs only after technological feasibility is established and before general release [4]. - The evolution of software development practices, particularly the adoption of agile methodologies, has shortened the capitalization window, making it rare for companies to incur significant costs eligible for capitalization [6]. - Companies developing software as a service (SaaS) may capitalize costs under ASC 350-40, which has a longer development window compared to ASC 985-20 [7]. Group 3: Misunderstandings and Clarifications - Buxton Helmsley USA, Inc. appears to have misunderstood the accounting practices of other companies, as they likely use different standards for capitalizing costs [8]. - Daily Journal Corporation emphasizes that it will continue to expense development costs when appropriate and capitalize them when justified, ensuring transparency in reporting R&D costs [9]. Group 4: Call for Resolution - Daily Journal Corporation urges Mr. Parker to cease his unfounded attacks and allow the company to focus on creating actual business value for shareholders [11].