FRMO (OTCMKTS:FRMO) leadership used its fiscal 2026 third-quarter earnings call to address the company’s results and provide an update on strategy following the recent death of investor and longtime partner Murray Stahl.
Corporate Secretary Thérèse Byars opened the call and said the discussion would be led by Co-Chief Executive Officers Steven Bregman and Peter Doyle, joined by General Counsel Jay Kesslen and Chief Financial Officer David Arndt. Doyle began with remarks about Stahl’s influence on the firm’s investment philosophy and said Horizon Kinetics and FRMO were “grieving,” while also asserting that “the foundations” Stahl built for the organizations and their investments “are in great shape.”
Management addresses transition after Murray Stahl’s death
Bregman described the immediate period after Stahl’s death as operationally intense, including memorial planning and internal reorganization. He said employees and clients have asked whether the firm is stable, and he told staff, “Don’t worry, we’re not closing our doors. We’re not firing anybody. We’re not selling ourselves.”
Bregman attributed the firm’s flexibility to what he called a “fortress balance sheet,” saying it gives management time to make decisions “the right way” without being forced into actions under market pressure. He also said the firm’s portfolios are “very different qualitatively” than they were a decade ago, emphasizing what he termed “strategic holdings” as opposed to investments owned solely for a cyclical re-rating.
Third-quarter financial highlights: net income, key drivers, and taxes
Arndt summarized what he called “a few key highlights” for the quarter. He reported net income attributable to FRMO of $83 million, bringing year-to-date net income to “just shy of $57 million.” He said results were “primarily driven by unrealized gains and losses” in major investments.
Arndt cited several key contributors:
- Texas Pacific Land (TPL), described as FRMO’s largest holding directly and in private funds, rose 82% in Q3 and was up 40% year-to-date.
- Horizon Kinetics Holding Corporation increased by “over 20%” during Q3.
- MIAX declined slightly in Q3 but remained a “strong driver” year-to-date and was up about 80% from the prior year-end. Arndt also noted that MIAX “went public in August 2025.”
Those gains were partially offset by cryptocurrency declines. Arndt said FRMO has crypto exposure “both in direct and indirect ownership,” led by Bitcoin, which fell 26% in the quarter and was down 36% year-to-date.
Arndt added that net income was reduced by “a significant income tax expense,” which he said was driven primarily by increases in deferred taxes related to the unrealized gains in investments.
On revenues, Arndt said consulting and advisory fees decreased versus the prior year period, attributing it to Horizon Kinetics not benefiting from “significant incentive fees” in the quarter compared with the prior year’s third quarter.
Balance sheet: cash position and move to debt-free status
Arndt called the balance sheet a “source of key strength,” highlighting “over $45 million of cash” alongside what he described as a “well-positioned portfolio of investments.” He said that as of February, FRMO is debt-free following the sale of its land and building to Synteq Digital, which eliminated a “small mortgage” tied to the property.
Bregman emphasized that this change means the company is now “debt-free without any qualifications,” contrasting it with prior periods when FRMO had “no net debt” but still had a modest mortgage outstanding.
Bregman also discussed the balance sheet line item “securities sold, not yet purchased,” describing a continuing program of shorting what he called “path-dependent ETFs.” He said the balance was $717,000 as of February versus $1.3 million at May 31, 2025, and noted the firm “continue[s] to sell short every week.” He added that cumulative short sale proceeds were “a little over $9 million,” and said the difference between proceeds and current market value represented “almost $9 million of profit.”
Strategy updates: Winland stake, crypto mining, and engagement with portfolio companies
In prepared remarks and Q&A, Doyle said a core objective for FRMO is to establish an operating business to help drive value beyond a portfolio of cash and marketable securities. He said the company has been increasing its ownership in Winland and is “close to now 47%,” adding that Stahl’s intention was to be “at least 50%, over 50% by December of this year,” which Doyle said “is still our intention.”
Bregman added that the company intends to reach 50% “in an orderly fashion,” including attention to timing that would allow efficient consolidation and auditing once control is achieved.
On crypto mining, Doyle said he and Bregman met with the mining team earlier in the day and discussed an opportunity involving mining an alternative coin, selling a portion to buy Bitcoin, and using proceeds to fund equipment purchases. He characterized current conditions for Bitcoin and Litecoin mining as “very challenging” and “barely profitable,” but said management remains “very optimistic” about what it can turn the crypto business into.
Management also addressed strategic relationships tied to exchange-related investments. In response to a question about TPL and MIAX, Doyle said the company is “exploring all opportunities” and having discussions with both, with a goal of potentially obtaining a board seat “on either one or both.” Bregman noted that MIAX CEO Tom Gallagher attended Stahl’s memorial.
Kesslen also clarified a shareholder question about Miami International Holdings (MIH) restricted shares versus MIAX, saying prior restrictions have been lifted and that “all of the Miami shares owned by FRMO are unrestricted” as of the call date.
Other shareholder questions: ownership reporting and long-term view of value
Arndt responded to questions about an apparent change in Stahl’s FRMO share ownership between filings, saying the company discovered that certain affiliated entities’ shares were “inadvertently excluded” from earlier reporting. He said Stahl did not acquire more than 850,000 shares between the end of 2025 and the first quarter of fiscal 2026, and management was unaware of any sale of shares by him during that period.
Bregman also responded to questions about FRMO’s stock performance by reiterating a focus on intrinsic value and long-term compounding rather than near-term market price. He cited a history of FRMO book value per share growth, saying book value rose from “a penny” in 2000 to $2.61 per share by May 31, 2020 and to $8.02 per share by May 31, 2025, which he described as roughly 19% to 20.5% annualized compounding over those periods.
Doyle said he intends to “hang on to it,” adding that returns can be “episodic” and comparing the company’s long-term approach to Warren Buffett-era examples where book value compounded while the stock price lagged for a period.
Closing the call, Bregman and Doyle thanked shareholders for participating and said they would work to provide more detailed answers in future calls as the organization continues its transition.
About FRMO (OTCMKTS:FRMO)
FRMO Corporation (OTCMKTS:FRMO) is a diversified holding company based in Bloomfield Hills, Michigan. The company seeks long-term capital appreciation by acquiring, incubating and supporting a range of businesses and investments across public equities, private ventures, commercial real estate and special situations. With a flexible investment mandate, FRMO allocates capital to sectors and asset classes it considers undervalued or poised for future growth.
Through its wholly owned subsidiaries and strategic partnerships, FRMO’s portfolio spans multiple industries, including software and technology services, digital media, consumer products and real estate development.
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