Core Thesis - Bel Fuse Inc. (BELFA) presents a compelling investment opportunity due to its share class arbitrage potential and the ongoing discussions around collapsing its dual-class structure [2][3][4]. Share Class Dynamics - Bel Fuse Inc. has two share classes: BELFA shares with voting rights and BELFB shares without voting rights, which offer at least a 5% higher dividend [2][3]. - Historically, BELFA and BELFB shares have traded close to parity, with BELFA reaching a premium of 142% over BELFB in 2022 and a low of 72% in 2018 [2]. Current Market Situation - Currently, BELFA shares trade at 91% of BELFB shares, indicating a significant mispricing, especially as the dividend yield on BELFA is at a historic low [3]. - Large institutional investors, including Gabelli Funds, are advocating for a proposal to collapse the dual-class structure, which could unlock substantial value for BELFA shareholders [3]. Investment Opportunity - The potential simplification of the share structure presents a unique opportunity for investors to capture value, as the undervaluation of BELFA shares relative to BELFB may correct sharply upon any corporate action [4]. - The historically tight trading relationship between the two classes, combined with potential activist-driven governance changes, positions Bel Fuse as a low-risk, high-reward arbitrage opportunity [4]. Historical Performance - Previous analyses highlighted operational improvements and a growth outlook for Bel Fuse, with a noted stock price appreciation of approximately 172.50% since earlier coverage [5].

Core Insights - Merion Road Capital Management reported a 5.0% return for its Small Cap Fund in Q3 2025, underperforming the Russell 2000 Index which returned 12.4% [1] - The long-only portfolio achieved a 10.1% return, outperforming the S&P 500's 8.1% return, primarily driven by the strong performance of Kratos [1] Company Highlights - Bel Fuse Inc. (NASDAQ:BELFB) is noted for its design, manufacturing, marketing, and sales of products that power, protect, and connect electronic circuits [2] - The stock of Bel Fuse Inc. had a one-month return of 0.15% and a remarkable 93.40% increase in value over the past 52 weeks, closing at $152.69 per share with a market capitalization of $1.933 billion on November 26, 2025 [2] - Merion Road Capital established a capital structure arbitrage in Bel Fuse, noting a significant widening of the price discount between Class A and Class B shares, approaching historic levels [3] - The investment in Bel Fuse was initially based on improved management and the successful acquisition of Enercon, which led to strong Q2 results [3] - Gabelli, a major holder of Class A shares, is considering resubmitting a shareholder proposal to collapse the share structure [3]