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

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:

2025 07 24 - LB - A Related Party Dance with a Circular Shuffle- Final.pdf

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