Penguin Solutions (PENG) carries a deeply negative liquidation value under standard recovery haircuts, consistent with MFFAIS CLV of -$605M and LLV of -$603M. The asset-to-liability gap is driven by the composition of the balance sheet: total assets of $1.75B are dominated by current assets ($1.24B) that include $489M cash (100% recovery), $322M inventory (60% recovery = ~$193M), and $216M in receivables-and-other current assets (90-95% recovery). Non-current assets include $86.9M net PP&E (50-70% recovery = ~$43-61M), $73.5M finite-lived intangibles (0% under liquidation lens), $145.9M goodwill (0%), $99.1M deferred tax assets (0% in distress), $56.6M operating lease ROU assets (likely absorbed by associated liabilities), and $37.8M non-marketable equity investments at carrying value (uncertain, likely deeply discounted or zero in forced liquidation). Against these haircut assets, liabilities stand at face value: $1.14B total liabilities comprising $590.7M current liabilities (including $401.5M accounts payable, $111.2M deferred revenue, $54.6M other current liabilities), $442.8M long-term debt (2029 Notes $150M + 2030 Notes $200M + $100M revolver draw), $60.8M long-term lease obligations, and $44.9M other non-current liabilities. Preferred stock (SKT/Astra AI Infra convertible preferred) carries a $200.4M aggregate redemption requirement and $202.7M carrying value in temporary equity—this sits ahead of common equity in liquidation at 1x liquidation preference. The result is that common equity holders face zero recovery in any realistic liquidation scenario. Compared to the prior filing (Q1 FY2026, period ended November 28, 2025), the material changes are: cash increased from $461.5M to $489.2M; inventory grew from approximately $255M (implied from operating CF movements) to $322.4M, adding inventory liquidation risk; accounts payable surged to $401.5M from a lower Q1 level, increasing face-value liabilities; the $20M 2026 Notes matured and were repaid in Q2, reducing current debt but the revolving facility remains at $100M drawn. The $5.8M inventory write-off for goods stolen in transit (insurance claim pending) is a cash-neutral timing item at balance sheet date but reduces recoverable inventory. The OLV of -$280M reflects the going-concern value of operating assets and is materially less negative than CLV, indicating the operating business generates positive value above liquidation; however, common equity recovery remains negative after preferred liquidation preference of ~$200M.
▼ Community Notes