Landbridge Holdings ("LB"): A Related Party Dance, with a Circular Shuffle

Gotham City Research LLC
Jul 24
2 min read

GOTHAM CITY RESEARCH’S OPINIONS

We believe 16%-55% of LB revenues are artificially boosted by related parties, so that insiders can sell LB stock.
We believe false and/or misleading claims have boosted the stock since its IPO on June 28, 2024.
We estimate shares are worth no more $5 to $24 per share implying 53-89% downside to the current share price.

SUMMARY OF THE BASES OF OPINIONS

We estimate that 16%-55% of 2024 revenue is suspect, not consistent with arms-length, recurring, or market activity.
The $8 million Data center related party deposit was recognized as revenue upon receipt of the deposit. We don’t see evidence that the revenue was earned.
LB’s reported per barrel produced water royalty fee, exceeds best-in-class TPL’s fee by 2x. We find this suspect.
David Capobianco claimed in June 2024 “WaterBridge only makes up about 17% of LandBridge revenues” yet LB revenue from related parties was actually 32% for 2024.
2 out of 3 audit committee members oversaw their prior companies undergo related party and/or accounting problems, involving prison time and bankruptcy.
Unlike your typical US-listed companies, LB’s auditor Deloitte did not audit its internal control over financial reporting, due to a temporary loophole LB is exploiting.
Longtime LB/WB CFO and CO-CEO, Steven Jones, resigned shortly after LB’s IPO, without any evident explanation.
Other than LB, NEHC is the only other company touting Permian data center “deals”. NEHC is a $13 million market cap and shares are -90% YTD despite touting its DC deal.
Powered Land was incorporated in Delaware on November 6 - the same day LB announced it had a DC deal with it.
Powered Land’s website is unmaintained, and looks like it was made in minutes, enhancing our suspicion this was a bogus transaction.
In April, the PUCT approved the Howard-Solstice 765 kV transmission line. We believe this line undermines the electricity component of the LB data center bull thesis.
Both Microsoft and OpenAI are looking to cool gigawatt data centers with closed loop cooling systems. We believe this technology limits LB’s DC monetization potential.
A former TPL employee doesn’t believe gigawatt Data Centers are coming to the Permian. If they do, he believes LB stands to make just a few million in land lease revenues.
Recent RRC guideline changes, effective June 1 2025, will pressure LB’s revenue growth, per our assessment.

The full report: