Algodon Wines & Luxury Development Group: Riding The Young Argentinian Credit Bull

Dallas Salazar profile picture
Dallas Salazar


  • Algodon Wines & Luxury Development Group, or "VINO", is a decade-long investment thesis that's finally hitting an inflection point.
  • The company finally has macro tailwinds helping establish growth and investment at the operational level.
  • Current monetary and fiscal policy in Argentina should help "leverage on" the country, which I believe credit expansion will do well to inflate the value of real assets in-country.
  • VINO has timed its IPO with a maximized utility of use of proceeds; it wants to ride the credit bull.
  • An investor friend and partner of mine is heading down to Argentina in just a few weeks to vet the company's properties and thesis.

Note: This initiation note contains information regarding an enterprise currently listed "over the counter", which brings with it inherent risks of illiquidity, highly-inefficient pricing, volatility, potentially lower reporting requirements, as well as reduced shareholder rights. This note will also cover an enterprise with operations in a foreign country - Argentina - which brings with it its own set of non-traditional risks. Please consider any investment in "over the counter" opportunities higher risk than opportunities on "listed" stock exchanges, as well as please be sure to consult a financial advisor as to the suitability of any "over the counter" investment.

Argentina: A Young Credit Bull is Born…

There are few better times to invest - period but especially in "higher risk" opportunities - than during a "leverage-on" part of the credit cycle. Put simply, very early credit cycle investments have something of a derisking inherent in them by way of credit expansion providing investment multiple expansion (for both real and financial assets) as well as leverage-driven demand of underlying assets (generally driven by inflows of capital which are generally driven by an availability of credit). It's not uncommon for even "underperforming" assets to see drastic equity pricing and/or underlying asset value increases during credit cycle maturation simply from the factors mentioned prior (activist investor Nelson Peltz of Trian Fund recently used this argument, and overwhelming evidence of this argument, to win a forcing attempt of a merger between DuPont (DD) and Dow Chemical (DOW)).

However, it's a difficult task to be able to call the beginnings and ends of a credit cycle usually. This makes so called "bottom ticking" the "leverage-on" cycle nearly impossible to do. These axioms setting the foundation for this note, it should be noted that Argentina - because of a handful of factors including a recent regime shift, a resolution of a decade long sovereign default, a reformation of

This article was written by

Dallas Salazar profile picture
Dallas Salazar is the CEO an Austin-based consulting firm that specializes in private company lifecycle management, up to and including taking companies public, and in helping consult publicly traded companies. Mr. Salazar is also a venture investor in a portfolio of energy and commodity startups, including startups extracting oil, natural gas, helium, and carbon dioxide, as well as engaged in the business of large scale carbon sequestration. Mr. Salazar has recently had large exits in Comstock Resources, Eclipse Resources, Torchlight Energy, as well as numerous privately held natural resource and commodity extraction ventures.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (10)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.