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Saturday, October 31, 2026

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When the liquidity does not add up

Arbor Realty Trust’s dividend suspension is presented as creating $60 million of liquidity, raising questions about its ability to meet 2027 debt maturities.

ABR $2.2B
John Hempton's Newsletter 3 clicks

From X

@stockgutter

SG on X

So you got an LLM to spin out a fancy DCF model for you, or maybe you hacked one together in Excel. How do you account for changes in outstanding shares? Most use a linear assumption. That might work for a company that throws off steady FCF, has limited SBC, and consistently buys back shares. For these, share count often shrinks predictably. But for money losing companies, its usually just a poorly reasoned throw-shit-at-the-wall guess. That's a problem. Dilution is the greatest threat to these names, and Wall Street's DCF models never give it serious contemplation. Example: show me an analyst who modeled in 2024 that $SPCE would 7x its outstanding share count. There are none.
@convequity

Convequity on X

Thoughts on Elon's recent neocloud comments "Neocloud" has always been a weak label. These businesses aren't really clouds, and they aren't particularly new. The more accurate term is GPU VPS. Most of them rent bare-metal GPUs. They generally don't offer redundancy across three availability zones, and they don't sell hundreds of platform services on top of the hardware the way a true cloud does. That puts them closer to VPS providers than to cloud platforms. CPU history shows the difference. CPU cloud concentrated among three to five players because platform services lock customers in and drive a demand flywheel. Customers use more of the stack over time, rather than only renting the hardware. That is how AWS-style clouds kept high margins and strong moats. CPU VPS went the other way: many providers selling essentially the same product, in a brutally competitive, commoditized market. If GPU supply stops being constrained by chips or energy, GPU VPS starts to look like CPU VPS, with gross margins of something like 50%. Better marketing and operations can lift margins and grow revenue, but they won't push gross margins to 75-80%. That is the long-term risk Musk pointed to when he predicted most neoclouds would go out of business. Most of these names are VPS businesses earning cloud-like profits and valuations from a temporary imbalance between supply and demand. $CRWV is part of that group. CoreWeave and $NBIS are also the two furthest from a pure GPU VPS, because both already sell platform services on top of the GPUs. CoreWeave is still the most exposed on financing. It pushed hard to maximize margins on each contract and took on interest-rate risk against fixed contracted revenue. Its counterparties, OpenAI, $MSFT and $META, may have played those deals more intelligently. So CRWV is the most vulnerable name on its balance sheet, yet one of the least commodity-like on product. That gap is where the return potential sits for investors willing to stick with CRWV.

Investor Letters

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FTAI 3Q26: Aero margins in focus

FTAI’s Aerospace Products margin rebounded to 31% as CFM56 module output rose, while Power deposits and contracted deliveries fund its 2027…

FTAI $16B
Stock Thoughts 4 clicks

CVX Earnings Review

Chevron’s Q3 revenue rose 35% to $65.2 billion and EBITDA 75% to $20.2 billion, while production trailed guidance and refining margins…

CVX $465B
Cestrian Capital Research 3 clicks

SNY Earnings Review

Sanofi raised FY26 guidance after Q3 sales grew 14.3% at constant currency, led by 34.8% Dupixent growth; vaccines declined 6.6%.

SNY $108B
Cestrian Capital Research 1 click
PSN · long

Parsons CORP

Parsons generates roughly half of its $6.4 billion revenue from Federal Solutions, serving defense and intelligence customers.

PSN $5.4B
Value Investors Club

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

Intel Q3 2026: Dead Inside

Intel’s Q3 2026 datacenter CPU shortage reflects wafer-start planning failures, not substrate constraints, after demand shifted from client…

INTC $348B
Irrational Analysis 2 clicks

INTC Q3 FY12/26 Earnings Review

Intel's Q3 revenue rose 21% to $16.5 billion, led by 78% data-center and AI growth, but Q4 guidance of $15.5 billion trailed consensus.

INTC $348B
Cestrian Capital Research 4 clicks

Twilio CEO: ‘Buy the dip!’

Twilio CEO Khozema Shipchandler urged investors to “buy the dip” after earnings sent the software maker’s shares down 17% after hours.

TWLO $39B
The Technology Letter 2 clicks

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