Mike He

For the last year or so this was essentially a shouting match between the bulls and the bears, mainly because of the tussle between the company + federal government and the state and local agencies + the courts. Rightfully so. As of the official issuance of the defense production act order, the bull side has largely won in my opinion. So whereas the regulatory risk discount used to be 50-90%, it is much closer to 10-20% now. That means the valuation is driven mainly by oil and gas fundamentals at this point. I think I’ve heard $15-$60 (adjusted for the dilution last year) being thrown around previously when oil was around $70. I am no expert in oil and gas so my reading of these projects aren’t very valuable, but I would pick around $15-20 as fair.

@BDM110110 given you were long and seemingly right on $SOC in the past - what is the stock worth now given the news?

New milestone, my first 13F filing! sec.gov/Archives/edgar… Reminder that 13F's tell a very incomplete story about a fund's entire book. It excludes short positions (stocks and written options), as well as various other securities. I run both a fundamental book and a quant/arb/short book. So a lot of the stuff you see in the list, is likely half of an "arb" type of trade. The stuff I write about on Twitter is typically my highest conviction positions in my fundamental book. (SPHR, ASTS, ABVX, EVLV, CORZ, etc.)

@RoaringSensei Hi Sensei, I'm struggling to find this in deferred revenue. it doesn't look like deferred revenue's changes can account for Power Packs. Can you plaese share more of what you're seeing/hearing/thinking here? thanks!

The Hidden Catalyst: "Power Packs" 💎 This is the alpha. Management confirmed $0 revenue from the Power Packs beta was recognized in Q3. ​The Accounting: Digital Beta = Deferred Revenue. ​The Reality: We know volume is massive (crashing payment processors!), but it sits on the Balance Sheet, not the P&L. ​The Future: When this switch flips to "Recognized," earnings could gap up violently.

My $GME Q3 Review: The market is trading the headline but missing the revolution. 🧵 ​Algos saw a revenue miss (-4.6%) and dumped. Smart money sees a profitability explosion, a viral pivot, and a massive "hidden asset" that hasn't even hit the books yet. Here is the full breakdown...⬇️

You can’t say one is 100% risk and the other is 60% risk, while saying the 100% risk bet gets 5.5x return and the 60% risk bet can’t get 5.5x. Gotta factor the risk differential in the the return as well. So the comp is 3.3x return on the call spread with the same capital at risk as the stock, which means stock just has to go above $100 to beat the option spread bet. Pretty similar odds imo. Except the call spread is more expensive to execute and less flexible than the stock

I don’t really understand the options pricing for $QURE. You can buy the common, and if the FDA stuff doesn’t work out, you get a 60% haircut (at least). Or you can buy Jan ‘28 30/70C, risk a 100% loss, but gain 5.5x on FDA approval. Harder to imagine the common at 180, IMO…

We are out of it completely at this point. I think the recent EPA RVO mandate is good news. The Trump administration's hostility toward green energy at best introduces uncertainty for SAF and at worst dims the prospect. The fundamental outlook is still positive for the company if I have to bet, but we don't bet on pure fundamental thesis without any high-confidence events/catalysts.

@BDM110110 Any thoughts on CLMT now that the index rebalancing is complete?

My long thesis on $CLMT. PDF below. drive.google.com/file/d/1PPvhoh… 1/4

@InvestidorrTuga @garyHeff definition is in item g. sec.gov/Archives/edgar…

@garyHeff @BDM110110 Yes, I have the same doubt... what do they mean by the start of production — could it be related to the pipelines?

Appreciate it. I'm surprised the May 19 PR said "If Restart Production ... is not achieved by March 1, 2026 ... could result in the SYU assets being reverted to EM without any compensation to Sable therefor." That's not something you'd include if you thought you were in the clear IMO.

@Carflos223Matos @garyHeff why does the stock crash if they have to do ships?

@BDM110110 @garyHeff but if they have to do tanker ships the stock crashes. are you buying dip

$SOC Pipeline is bogged down as I expected. But my sense is Sable is now larger than this pipeline fight. They've come a long wait having done all of the repairs and restarted production. The political climate is now much more friendly both on the state and federal level. The pipeline restart is no longer an existential threat, but just a problem to be solved.

x.com/BDM110110/stat… There was a time when the restart seemed like the gating item for the production restart, which was tied to XOM's repossession right. They have announced that they restarted production. There's some room for interpretation here, but I believe they're in the clear now regarding XOM's repossission. So whether they restart the pipeline now or later, or figure out some other way to get the crude to the refineries, it's a matter of time/execution, and not a matter if "if they don't restart the pipeline the entire asset gets taken over by XOM by 2026". Hence I'm saying it's no longer an existential threat.

@BDM110110 You’re closer to the situation than I am. Why is the pipeline restart no longer an existential threat to the company? $SOC

@OddDiligence You’re right it’s not retirement. I just assumed RIA was retirement. It’s actually the registered investment advisor custody assets they got from an acquisition of TradePMR.

@BDM110110 Retirement is a small percentage of RH customer assets unless I am misenterpreting. If you stripped retirement $1.3B QoQ, RH still grew assets 14% (rounding)

$HOOD QoQ customer assets for Q1 vs $BULL BULL -7.3% HOOD +14%

The wording is kinda interesting regarding "Restart Production". 150 days after the resumption reads more like, "once you restart you're good", if they wanted to require continuous production, they would have written it differently I think. I will further note that they kept this wording even though they had the chance to clarify with the amendment. But I think your point stands, they need real production to be on solid footing here. I still think as long as the issue with the CCC is outstanding, they won't get the approval from the OFSM, so it doesn't matter whether they claim they've met all the COnsent Decree or not. But we'll see soon enough.

$SOC production restart. Based on my understanding that satisfies the "Restart Production" condition with XOM. So I believe the binary bet is won by the company and its investors at this point. There still remains the issue of pipeline restart. Based on the company's PR, the oil is being stored at the LFC storage facility right now, and it will fill up in June. At that point the company has to figure out how to get them to the various refineries, otherwise they won't be able to make the sale. It's entirely possible that pipeline restart hasn't been approved by the OSFM yet at that point. But there have been various solutions floated such as trucking or using a barge, which I'm sure have their own hurdles, but the company has plenty of time and runway to figure that out.

@perry_lin1 You're right, $11-13m, and Galaxy pays.

@BDM110110 I believe $GLXY guided $11-$13M capex that they themselves will be paying

$CORZ the Galaxy deal is $4.5b for 15 years for 133mw critical IT load, or 200mw total load. So $2.2m per mw in critical IT load, and about $1.5m per mw total power. There is an analyst note saying they expect CRWV to foot the capex as well, I think that's highly unlikely, not after they stopped doing that for CORZ in the last 70mw expansion deal at Denton. CORZ's latest deal at Denton is 70mw critical IT load and 100mw total load, for $1.2b, which is $1.45m per mw critical IT, and $1m per mw total power. So face value: Galaxy: $2.2m/mw critical IT, $1.5m/mw total power CORZ: $1.45m/mw critical IT, $1m/mw total power However, a couple of nuances to consider. First, CORZ has 590mw critical IT load contracted with CRWV, and the deal is $1.45m/mw critical IT. While the total load for the latest 70mw is 100mw, indicating Power Usage Effectiveness (PUE) of 1.4ish, they have disclosed that their blended PUE is actually better at 1.3ish (see screenshot of their latest quarterly presentation). Which means their blended revenue is actually at $1.1m/mw total power (vs the $1m/mw above). Note Galaxy's Helio DC's PUE is 1.5. I assume that's because Helio DC is located 230 miles west of Denton, where it's significantly hotter and will require more cooling power. Secondly, as @perry_lin1 points out in the thread below, the total capex for these mining to HPC conversions is about $6.5m per mw. CORZ's deal with CRWV is $1.5m in credit (CRWV pays upfront, but owned by CORZ and paid back in revenue credits), and CRWV pays for and owns the rest for the during of the contract, and CORZ owns these $5m capex at the end of the contract. That's essentially CRWV bearing the cost of $5m over 12years, or roughly $400k per year of depreciation expense per mw of critical IT, or $300k per mw of total load. If we add these back to the CORZ revenue then we're pretty close to the contract value of Galaxy. But this is dependant on the assumption that CRWV isn't paying capex for Galaxy. x.com/perry_lin1/sta…

@perry_lin1 @matthew_sigel i see. thanks for clarification. Also interesting that the blended PUE of CORZ is actually 1.3. Also, how did you arrive at the $5m number? I understand that's 5-8m per mw of conversion cost is what's been thrown around before, is that what you're relying on?

@BDM110110 @matthew_sigel I add in $5M of capex contribution from $CRWV

🚨 Galaxy (GLXY CN) Announces $4.5B Contract with CoreWeave (CRWV), 15-year Lease. Galaxy to Deliver 133 MW of Critical IT Load to Host Coreweave AI