What smart money is saying about Merlin Labs

Position history

Every position in Merlin Labs on record in the archive was reported in Q1 2026, across 1 fund letter — 1 opened or added to the position.

Fund activity · 1 position · 1 move

• AddedCrossroads Capital Investment Partners, LP

  March 2026

  “Our largest contributor was Merlin Labs (MRLN), contributing to 40% of our Q1 net gains,2 as it started trading as a public company in mid-March and we both closed out the short position on the common as our rights converted and took advantage of the early-days volatility. We detailed our thesis extensively in a published research report,3 but the early price action is consistent with what we expected: a “tiny public float, locked-up insiders,” and a market that hasn’t done the work yet on a name that entered through the SPAC channel—the one channel institutional investors have been trained to ignore. We suspect the repricing has barely started, so the company is firmly in both our special situations bucket and our emerging compounder bucket if milestones are met. AST SpaceMobile (ASTS) contributed 23% of our gains in Q1, continuing to reward patience as the constellation buildout progresses and the market slowly digests the implications of what this company has already demonstrated. FTAI Aviation contributed 17%, and Nebius (NBIS) contributed 14%; both are names where our original thesis remains intact and the businesses themselves continue to execute. On the downside, Nintendo (NTDOY) was our largest detractor, comprising 35% of our losses, followed by Vistry (VTY) at 19% and Company X at 13%. On Nintendo, the market remains fixated on near-term memory prices and we continue to believe that investors are missing the forest for the trees. Vistry was a different story. We held a small position and exited during the quarter as the final nail in the coffin (CEO Fitzgerald resigning) confirmed that this transformation has meaningfully greater uncertainty than we’d originally underwritten. We’ll revisit the name once the heavy lifting is behind the company, whenever that may be, but for now our capital is better deployed elsewhere. We‘ve said it before, but it bears repeating: The gap between being right and being rewarded is where most investors lose their nerve. Our portfolio is not built to outperform in any particular quarter. It’s built to compound over years as the transformations we‘ve identified play out on their own schedule—not the market’s, and certainly not ours. Quarterly Investment Activity Update Several of our names carried their late-2025 momentum into the new year, and we saw little reason to get in the way. The core book was largely untouched in Q1. When businesses are compounding and the thesis is intact, the best thing a PM can do is stay out of his own way. Faithful readers will recall that we hinted at the Merlin Labs special situation roughly six months ago. The trade began as a paired position: long BACQR rights and short BACQ common. We aimed to capture the spread while hedging the risk that the deal would fail to close. As the common broke toward the rights-implied price just ahead of the merger, we closed the short leg at a profit. We also trimmed the long side into strength, locking in gains on a portion of the position before letting the remaining rights convert through the de-SPAC.”

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