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Tuesday, October 27, 2026

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@ACapitalLP 53 clicks

A Capital on X

𝙒𝙝𝙖𝙩 𝙝𝙖𝙥𝙥𝙚𝙣𝙚𝙙 𝙩𝙤 𝙩𝙝𝙚 𝙉𝙚𝙤𝙘𝙡𝙤𝙪𝙙 / 𝘼𝙄/𝙃𝙋𝘾 𝙩𝙧𝙖𝙙𝙚 𝙡𝙖𝙨𝙩 𝙬𝙚𝙚𝙠: I like distilling complex topics down to plain English. Here’s my understanding of what happened. Please correct where wrong… $CRWV and its peers rent $NVDA GPUs to AI labs and hyperscalers under multi-year take-or-pay contracts. The capex is so large relative to cash flow that the model only works if they can keep raising tens of billions a year in new financing to build what customers have already signed for. Much of that comes from secured loans backed by specific chips and contracts, while the rest comes from unsecured bonds, converts or stock. Importantly, not all secured debt is non-recourse, and many of $CRWV’s GPU loans are guaranteed by the parent. Still, the secured facilities held up considerably better than the unsecured bonds, which went from ~12% to ~15% yields, while the cost of insuring them via CDS roughly doubled… Nothing fundamental appears to have caused it. No major customer walked, GPU pricing held up, and the quarter looks fine. What happened was a cluster of headlines landing on a nervous market with the 10-year near 5.2% and hundreds of billions of AI debt issuance expected: Chamath calling it a private-credit bubble, an analyst saying the equity could go to zero, Gartner forecasting that over 80% of neoclouds stop operating independently by 2030, a few smaller peers failing to get IPOs and debt deals done. Underneath sat the bigger question of whether neoclouds are durable businesses or really just financing wrappers that hyperscalers eventually insource and cheap open-source models undercut. Once investors doubt the parent can fund growth, the stock falls, which makes the equity leg more dilutive, which worries bondholders more. Credit and equity fed on each other and the whole group fell 10-30% in sympathy. Was it justified? In three parts. (1) The $CRWV unsecured bond move was likely overdone: a company with ~$17bn of liquidity and a $129bn contracted backlog doesn’t suddenly become a distressed credit because of a handful of headlines. But backlog isn’t cash flow, and secured lenders have first claim on specific assets and cash flows, with many loans also carrying parent guarantees. The question for unsecured creditors is how much cash actually makes it back to the parent after servicing the secured debt. Still, a move to ~15% yields looks more like aggressive HF de-risking with headlines as the accelerant than a sudden collapse in the underlying business. (2) The $CRWV equity move was more understandable, just not for the headline reasons: this is a levered financing business whose equity returns depend on the cost of the marginal dollar of capital. When financing gets more expensive, the residual value on every future GW shrinks, and any gap that needs to be filled with equity becomes more dilutive. That said, unsecured bonds trading at 15% doesn’t mean every new GPU deployment costs 15% to finance. A 20% haircut for a stock that may not self-fund until 2030 could be seen as fair, but it ultimately depends on how much parent-level capital is actually required. (3) The group ($CORZ, $CIFR, $WULF) selloff was the least justified: $CRWV finances depreciating GPUs and bears the risk of obsolescence and replacement. The miners converting to HPC are increasingly financing long-lived power and data center infrastructure leased to hyperscalers under 15-20 year contracts, often with the customer owning the GPUs. Their risks are construction, power delivery and financing, not GPU replacement or compute pricing. Different assets, different contracts, different capital structures. Yet the market sold them as though they had the same problem, and that’s where the mispricing most likely sits…
@calvinblissett 4 clicks

Calvin Blissett on X

LendingTree ($TREE) Upside: ~120% to ~$54. Assumes 7x the midpoint of 2026 adjusted EBITDA guidance ($148.5 million), less ~$280 million of net debt, across 14.0 million shares. The stock currently trades at about 4x. LendingTree is the largest U.S. online marketplace connecting consumers with lenders and insurers. The stock has fallen 65% from its high, first on a Q2 earnings miss and lowered guidance, then in September on a Wall Street Journal report about Meta’s “Muse” AI agent, which investors fear could let consumers shop for loans and insurance without visiting a marketplace. At $24.43, TREE trades at roughly 4x enterprise value to 2026 EBITDA guidance of $145–152 million. The AI fear overlooks two things. First, insurance is now about two-thirds of revenue ($209 million in Q2, up 42%), paid by carriers buying leads regardless of where the search starts. Second, loan brokering requires state licensing and fraud controls; management notes that ChatGPT and Gemini declined to process loan applications and referred users to marketplaces including LendingTree. Net leverage has fallen from 5.3x in 2023 to 1.9x, removing the balance-sheet risk that once hung over the stock. The disintermediation risk is real, but a 4x multiple prices in a lot of it.
@calvinblissett

Calvin Blissett on X

Farmer Mac ($AGM) Upside: ~28% to ~$265. Assumes 2027 core EPS of ~$22 (Q2 run-rate excluding a one-time $7.4 million interest recovery, growing ~12%) at 12x. Farmer Mac is the government-sponsored secondary market for agricultural and rural infrastructure loans, the “Fannie Mae of the farm.” The stock fell 12% in February after a Q4 earnings miss and has not fully recovered. At $206.92, AGM trades at about 10.5x normalized core EPS and roughly 1.8x book value, for a business with a 19% core ROE and record Q2 core earnings of $5.40 per share (+24%). The underappreciated shift is in mix. Rural infrastructure is now one of the fastest-growing parts of the business: broadband volume grew 58% and renewable energy 55% in Q2, at net effective spreads of 2.30% and 1.72%, versus 1.01% on traditional farm and ranch loans. As higher-spread infrastructure lending becomes a bigger share of $37.2 billion in total volume, Farmer Mac’s spread should expand. Its GSE status lets it fund at near-agency rates. Tier 1 capital is a healthy 13.2%.
@calvinblissett

Calvin Blissett on X

Enova International ($ENVA) Upside: ~30% to ~$215. Assumes 2027 adjusted EPS of ~$19.50 (Q2 run-rate of ~$17 growing ~15%) at 11x. Enova is an online lender to non-prime consumers and small businesses. Shares fell from $227 to $167 in September after Enova withdrew its $369 million bid to acquire Grasshopper Bank, following opposition from 20 state attorneys general and two senators who argued the deal was designed to escape state rate caps. At $167.11, ENVA trades at about 10x annualized Q2 adjusted EPS of $4.31. The sell-off treats the bank charter as if it were in the earnings base, but it was option value; the core business is performing. Q2 adjusted EPS grew 33%, originations rose 27% to a record $2.3 billion, and net charge-offs improved to 7.3% from 8.1%. CEO Steve Cunningham stated that Enova’s “future growth and success do not depend on becoming a bank.” The episode also matters for peers: it shows charter acquisitions by non-bank lenders face real political resistance, a read-across for OppFi’s pending BNC National Bank deal. Enova repurchased $19 million of stock in Q2.
@calvinblissett 1 click

Calvin Blissett on X

Blue Owl Capital Corporation ($OBDC) Upside: ~34% total return. Assumes the shares re-rate to 0.90x NAV ($12.83, +22%) plus a ~12% dividend yield. Blue Owl Capital Corporation is one of the largest business development companies (BDCs), with a $15 billion portfolio of loans to sponsor-backed middle-market companies. The stock has fallen on contagion from its manager, Blue Owl, which gated redemptions at a retail credit fund and sold assets amid fears that AI will disrupt the software companies private credit lends to. At $10.49, OBDC trades at 0.74x NAV of $14.26 and yields 11.8% on its $0.31 base dividend, which is covered by adjusted net investment income of $0.34. A detail in the credit disclosures suggests the marks are already conservative: non-accruals rose to 2.8% at cost but fell to 0.8% at fair value, meaning troubled loans have been written down hard. With 73% of the portfolio in first-lien debt and leverage at a two-year low of 1.11x, the market price implies losses far beyond what the marks show. Every share OBDC buys back at a 26% discount adds to NAV per share, and it repurchased $35 million in Q2. The risk to watch is a shrinking portfolio: repayments ($747 million) outran new commitments ($319 million) last quarter.

Investor Letters

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Molina & Kinsale

Molina Healthcare and Kinsale Capital’s earnings are reassessed through a long-term lens, emphasizing conviction and detachment during…

KNSL $8.3B
Bearstone 8 clicks
WULF · long

Terawulf INC

TeraWulf is shifting from bitcoin mining toward data centers, seeking a higher-quality and more defensive business model.

WULF $5.4B
Value Investors Club

MYR Group q3’26 Earnings Preview

MYR Group’s Q3 2026 preview cites data-center and power transmission demand, with long-term service agreements supporting margin growth and…

MYRG $4.3B
Monte Independent Investment Research 6 clicks

Mosaic, Part One: The Story

Mosaic’s history traces the 2004 Cargill-IMC merger and the phosphate and potash mines that shaped NYSE: MOS.

MOS $6B
Latticework by MOI Global 34 clicks

Mosaic, Part Two: The Deep Dive

Mosaic, NYSE: MOS, is the subject of a second audio program for professional investors analyzing fertilizer producers.

MOS $6B
Latticework by MOI Global 5 clicks

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