THE ARGENTINA MODEL

Hedge fund manager Chris DeMuth Jr. on why Latin America is going the way of Argentina PLUS eBay, SpaceX, and Warner Bros M&A update

Jun 05, 2026

Chris DeMuth Jr. is the founder of Rangeley Capital, an event-driven hedge fund, and writes Sifting the World on Seeking Alpha and Substack.

In his first Oracle conversation, he named Paramount as the likely buyer of Warner Bros. Discovery while Netflix was still the heavy favorite.

Now he is back to chat about the rightward shift in Latin America, and the latest M&A chatter around eBay, SpaceX-Cursor, and more.

This interview has been edited for length. All answers are his own.

You’ve been looking closely at the upcoming elections in Latin America. What stands out to you?

The rest of Latin America is going the way of Argentina. I had big equity positions around a Javier Milei victory. I will disclose I was a supporter of his. As an investor I was actually unduly tepid in the short term, because I thought a man that principled would take a lot of short-term pain to get things right long term. It went extremely well almost immediately. Even the things I flagged as caveats turned out fine. Argentina has been a triumph, and I think everybody else is going to follow. I have the same view now in Chile, Colombia and Peru, a little less edgy than a few months ago, because they have gotten more priced in.

Colombia is your big one. What did you see there?

Espriella was super, super undervalued in April, under 25%, when he should have been at least 50/50. The right is united in Colombia, with the moderates and the conservatives consolidated around somebody offering a combination of El Salvador tough-guy with Milei libertarianism, which is going to be very popular there. That unity is exactly what was needed.

The dynamic was a jungle race with two brands of conservative against one candidate on the left. There is a shyness among the conservatives, an effort to look a bit more moderate, and then they consolidate. It looks similar to early Trump, where a lot of Chamber of Commerce Republicans would not have gravitated toward him stylistically but were almost unanimous in collapsing their support around him once it became binary. I watched the same thing happen in the Colombian business community, including a prominent ex-president. I built the call on polls, second-choice data, and connections to people in the country with real money on the line. It is hard to get excited about a market already sitting at 85% in Latin American politics, but the read I really care about is that this is going to be extremely good for Colombian equities.

And Peru?

I feel less sure about Peru, but I think Fujimori wins. It is a smaller market, less connected to the US, though there is interesting mining exposure, including lithium and electric vehicle minerals. She is the more business-friendly, more conservative option. Our right-left terminology grafts onto Peru less cleanly, and the recent left there has not been terrible to deal with, so it is a softer version of the Argentina story. But it fits the same theme, the Mileification of Latin America. She is going to win an election that is good for equities and good for mining interests.

You have professional interests in Venezuela too. What is the angle?

I am very interested in Venezuela, though it is more an investing interest than a market call. My exposure there is largely on the gold side, several claims pending resolution, and some of it monetizes through the Citgo auction. The current political situation opens up a lot of different ways to win.

Venezuela is also the perfect lesson in reading the footnotes. There is a Maduro market where it matters enormously that he is officially still president even after everything that has happened. People trade on a casual understanding of who is in charge. The actual resolution depends on the precise terms. It is the same discipline as reading a definitive merger agreement instead of the press release some PR person wrote. The filing is what is legally binding, not the verbiage.

You mentioned your equity book is aligned with these political views. Could a prediction market work as a hedge?

In principle, yes, and it is something I am watching, especially where you can get leverage and an option-like payoff. Right now my equity exposure already points the same way as the politics, so it is really a Texas hedge, which is to say not much of a hedge at all. Where it gets interesting is an isolated political blind spot. Say you have a big position in Fannie and Freddie and you are worried Republicans get hammered in the midterms, Democrats launch investigations and impeachment, the administration gets distracted for two years and then gets replaced. That would be doomy for those names. A big bet on Democrats sweeping would be the offset. That is the kind of structure these markets are built for.

It is also where the space is going. The hedges that are barely worth the effort at small size today are exactly what I would want at tens of millions once the liquidity is there. As the institutional desks show up, there will be real depth on these markets to hedge corporate events at scale. I want to get smart on that now.

Let’s turn to your day job, merger arbitrage. Which deal looks most mispriced right now?

GameStop’s bid to buy eBay. I think the correct odds are zero. If you had ten or twelve things to check on whether this gets consummated, all ten or twelve give you a clear answer. It is a much smaller company making a bid for a much bigger company, with no credibility on any aspect of it and no financing in place. The oddness of it is that they never even approached the target. In the most hostile situations I have ever looked at, you at least walk up to the potential target. This was just something they said.

I could launch a bid for eBay too, in the sense that I can tell you right now I will buy eBay if somebody gives me financing on terms I want and the other side agrees to it. That is completely unserious. The NO side at 85 cents on the dollar pays better than a savings account, and it lets you express the view without ever shorting the stock.

Why does not having to short the stock matter here?

Because I actually like eBay. I think it is undervalued, I would not want to short it in size, and in the days after the bid it was trading well, so you could lose money shorting it even if you are completely right about the deal. The appeal of a prediction market is that the deal failing becomes its own instrument. You can take that view directly, with no opinion on where the equity trades. You do not need a theory for why GameStop did this. You just need to be right that it will not happen.

One caveat I give everyone: triple check the rules, always. I read a market description the way I would read a press release, then I go read what is actually binding. There was an aliens market where the description was not about a three-eyed man landing, it included any senior official making the claim, which made it much wider than the headline suggested. You are allowed to be wrong. You are an idiot if you are not even looking at the thing you think you are looking at.

You have been watching the SpaceX and Cursor market, which is unusual because Cursor is private.

That is what makes it interesting. There is now a way to do pre-merger arbitrage on a private target with no publicly traded stock. The market was a little better than 50/50 when it first appeared. It is now in the 80s. I believe SpaceX is not just going to acquire Cursor, I think they have already determined that they want to. Elon wants it, and Elon is good at getting what he wants.

There was an entertaining public back and forth. He wanted to buy them while SpaceX was in the quiet period before its S-1, and the lawyers would have torn their hair out, because you cannot do major M&A then without redoing all your filings. So it is a poorly concealed, already negotiated deal that I expect to go forward in the weeks following the IPO.

Last time we spoke you were on the Warner Bros. Discovery deal. How is that playing out?

Really well. That was something like one in three when I first mentioned it. We then got a definitive deal announced with Paramount as the buyer, which is the side I had favored and the side I was long in the equity. They have very good antitrust counsel and are farther along in the approval process than I would have guessed. They have German approval and a handful of other foreign approvals, and they have aggressive, bordering on audacious, plans to slam this shut.

The market now puts a successful close around 83%, and I think even that is a little low. On a roughly 31 dollar cash deal with about a 4 dollar spread, the math is a 46% IRR assuming an October close, which is my timing assumption. The scuttlebutt is that they want to slam it shut in July, so the real number is better than 46% if it pays out that fast. I discount the timing even beneath what they think they can do, and there is still upside.

It reminds me of Tegna, where they closed and did some of the litigating after. As a shareholder that is fun, because you get cashed out before you have to worry about whether they win. Caesars was similar. I was a shareholder, the deal was not rich, so the stock popped only a percent or two on announcement, while the market on the deal itself roughly doubled that day. Practically nothing in the equity, everything in the deal.

Final words of wisdom?

My compliance officer would kill me if I said riskless, or free money, or a lock, so I will not say any of those things about GameStop and eBay. But if somebody else said it, I would not disagree.

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