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Thursday, October 29, 2026

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Another Haircut with Avy the Barber

SoFi’s stock case hinges on interest rates, tangible book value and private-credit loan sales after its $1.5 billion equity offering.

SOFI $22B
WHAT ARE WE DOING? “Contrarians At The Gate” 3 clicks

From X

@StableBread 1 click

Fajasy on X

On EV to year-end ARR, Boost Run $BRUN now trades below CoreWeave $CRWV, Nebius $NBIS, and $IREN. At $8.89/share, $BRUN’s EV is $989.7M. That’s 2.5x its $400M target for year-end ARR, down from 5.4x at the $22.93 price in my August 16 update. EV is market cap plus debt and lease liabilities, less unrestricted cash, using October 16 closes and June 30 balance sheets ($BRUN’s cash is pro forma for the warrant exercises). ARR is the midpoint of each company’s year-end 2026 target, which is $18.5-19.5B for CoreWeave, $7-9B for Nebius, $400M for $BRUN, and more than $4B for $IREN. At 2.5x, $BRUN trades below all three peers, including $IREN at 3.2x. A reasonable range for $BRUN is 2.5-5.0x, from where it trades today to just under the midpoint of CoreWeave’s 4.2x and Nebius’s 5.9x. I use the peers’ median rather than their average, since Nebius’s 5.9x skews the average higher. Nebius also owns more than 75% of its contracted power, while $BRUN owns no data centers (a different model, not a weakness).
@convequity 1 click

Convequity on X

The neocloud debt pullback is about how long delivery takes, and the useful response is a targeted renegotiation that pays lenders for more time, not a liquidation of the borrowers. Demand for AI compute is huge, and investors were eager to fund the buildout. That demand is still there. What is drying up is debt for neoclouds that cannot show revenue outside AI data centers. In our view the pullback is almost entirely about timing. Compute gets billed only once the site is built, powered and staffed, long after the cash has gone in. That wait is the squeeze. As a hypothetical, if the neoclouds could stand compute up and start billing ten times faster, the problem would ease. They would be generating revenue and cash flow to fund more of the next investment themselves, and outside investors could ask less interest on future money. On the latest reported figures, $CRWV's operating cash flow is positive but its free cash flow is negative, because the build is still being paid for. Lenders are now pulling back from neoclouds that have no revenue outside AI data centers. The race between neoclouds pushed CoreWeave too far. They took the debt probably knowing the delivery timetable was tight, because a firm that is not aggressive enough ends up with no compute at all. If lenders call a default and CoreWeave is then bankrupted and liquidated, the credit investors are left holding the GPUs. Taking the collateral does not make it earn. Someone still has to power, staff and bill the site, so the lenders must find another company to run it. In our view they lose money net-net, the handover is costly, and the buildout stalls to a degree. Amazon, Microsoft and Google can keep funding GPUs from businesses that already earn. A stall on the independent side leaves more AI compute with them, which in our view is bad for an AI-led economy. Who would buy a failed neocloud is still open. Blanket leniency would be a moral-hazard problem. If every late project gets time for free, covenants stop binding and the next borrower takes the same risk again. The exception here is that the demand behind the loans is still there. A lender can give more time to a project that will cover its debt once it is billing, and be paid for the wait with a higher margin, a fee or upside. When the cash flow recovers, that is the lender's reward. Musk predicting that 200-plus neoclouds will fail or consolidate makes the pullback worse. More credit investors step back, and the wait gets longer for everyone still building.

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CoStar: 3Q26 Business Recap

CoStar’s 3Q26 revenue growth slowed to 14% as bookings fell to $37 million, while cost cuts lifted EBIT margin to 8.8%.

CSGP $12B
Speedwell Memos 3 clicks

My Last GFL Update - Hopefully

GFL’s take-private structure hinges on BC Partners rolling 60% of its stake to preserve debt portability under the 40% permitted-holder…

GFL $16B
310 Value’s Newsletter 5 clicks

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