OII - Subsea Robotics, Artic Supremacy, and the S Korean Retail Connection
OII has historically been an oil services company, but internally it has been making a much under-appreciated shift to an autonomy, robotics, and defense company. For subsea robotics they are considered the best compared to their peers.
https://preview.redd.it/r2zi9znoc7gg1.png?width=730&format=png&auto=webp&s=a0d5cb6a37f83710717658cdf0d71edbf0b33775
ased on recent news, my understanding is the most urgent needs for the the US military to address is:
(a) US Navy build-out given that China ship-building capacity vastly out-strips the the US at this point, and they have been they have been making inroads in gaining control over critical global sea infrastructure across the world (note, this was the reason Venezuela mattered...Panama isthmus... oil is simply a means of saying this military incursion will not cost the taxpayer and it is also the reason why Greenland matters.
(b) Reclaiming dominance in the Artic Circle, where China has been mapping the seafloor like mad.
So bottom line is - US is completely dominant in Space, Missiles, and Air - but sea is more dicey than anything else. I expect spend going forward here to be very aggressive.
So back to OII...compare is to OIH (oil services companies) and it trades basically in tandem with that. It also has an oil services multiple of \~1x ev / sales and 5x ev / ebidtda.
However what they call AdTech has long been the fastest growing segment. Here is some of what they are capable of.
https://preview.redd.it/upb5jp5sc7gg1.png?width=1031&format=png&auto=webp&s=599ce1c7edde5f14fe48d83583a8f6a0c6703873
https://preview.redd.it/l3gbtutsc7gg1.png?width=1030&format=png&auto=webp&s=fb4122e72220a139d886d62449e9c35377827718
[https://s201.q4cdn.com/108344635/files/doc\_presentations/2025/Nov/18/2025-Baird-Defense-Government-PPT-final.pdf](https://s201.q4cdn.com/108344635/files/doc_presentations/2025/Nov/18/2025-Baird-Defense-Government-PPT-final.pdf)
Now to the interesting part: The March DoD Contract.
In March 2025 they received a Maritime Mobility System that they simply list as largest initial contract value in the company’s history. The specific dollar amount for that award remains undisclosed due to its sensitive nature with the U.S. Department of Defense. Note, this is a serious company, they make about 3b in rev a year. They don't play any games. In other words, there is no reason for them to play coy and tease shareholders. In Q1 2025, they stated AdTech margins took a hit as they took on readiness costs for this new contract.
Bottom line, the company is making the shift from being a subcontractor (a "part-maker") to the lead company managing an entire military program - in one of the hottest and most urgent areas of DoD defense spend.
What's this worth if the market views it as a robotics and defense pure play? What are the comps here? Well, right now the only decent comp is Kraken. Which is now a 2b ev off of \~20m in quarterly rev. Again OII is only 3b ev against \~750m in quarterly revenue. Kraken is looking a 27x / sales vs 1x sales for OII. I am not here to talk shit about Kraken. I think the company is great and could continue to rip.
My point is simply this - the market is very, very thirsty for subsea military tech. So thirsty, they seem to form cults around them.
This brings me to my other major points - the S Korean retail interest. From what I understand this is one of the most influential S Korean retail accounts.. Which is well deserved given the guy way beating the drum on RKLB consistently since early on. He rarely pitches new names, and when he does people sit up and listen. In this case, the OII post got about \~200k views and very enthusiastic responses.
https://preview.redd.it/hw27zlu1d7gg1.png?width=492&format=png&auto=webp&s=8077e0357c447ba3fa74019c21ea589ad2b2c0f8
After seeing what the S Koreans did to quantum, my general heuristic is - when they take an early interest in something I reach for the highest strikes possible.
In sum, if this was given a reasonable multiple of 3x sales and 15x ebidtda, this would would be 3x on the commons...which given the modest IV would translate to \~20x on a many of the strikes.
And if this were to run to unreasonable valuations - which seems to be the case with the other subsea pure plays like Kraken and anything the S Korean retail takes a liking to, this could be bar none the trade of the year.
Disclosure: I have call options from feb to july and strikes from 22.5 to 40.