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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

@aleabitoreddit

Serenity on X

So spent some more time to look at more DBS conference material: - "Two semiconductor giants, $AVGO and $INTC, both stated that breakthroughs in AI will keep demand for chip investment elevated for at least another 2 years. As current supply is insufficient to meet market demand." - "Current chip production capacity is already far from sufficient to meet demand, and $AVGO CEO expects the shortage to become even more severe in the future." (HKEJ) - "Regarding OpenAI, Hock Tan stated that the market had misinterpreted the company because its underlying fundamentals remained strong. He argued that investors who sell based on a single short-term data point [$50B ARR] are "essentially no different from people gambling in a casino." (eg. Hong Kong Economic Journal): - Commenting on investors' disappointment in OpenAI’s latest revenue forecast: "by itself, not that bad" on their $50B ARR. (Business Times) And connected investors' disappointment to a failure to understand the business and excessive expectations like a casino. - Tan rejected the proposition that OpenAI was overvalued. It quotes him saying: "It’s almost like they are in a casino gambling" in regards to investors' unrealistic expectations and lack of understanding on OpenAI. - Hock Tan if OpenAI and Anthropic achieve widespread market adoption: their attractiveness would substantially strengthen their bargaining power when raising capital. But cautioned elevated global interest rates could make capital requirements a constraint for future growth. - The real driver, he said, is whether frontier AI companies can create models that generate enough value and returns to justify the buildout. (which is fair) - Most companies are wasting money on tokens. He also warned that most companies just waste money spending tokens like kids in a video arcade. This part was the most badly worded by Hock Tan given he's running $AVGO. But Western media commentary narrowed this down to: - "Shortage of capital now, AI Investors are gamblers". In the conference, Broadcom's CEO was actually defending frontier lab valuations and giving cautiously bullish statements about AI infrastructure demand. While citing rising interest rates as a potential constraint that larger revenue or adoption could overcome. Cherry picking quotes out of context disorts the actual messaging. TLDR: - Large and elevated AI semi demand, semi supply insufficient to meet market demand. At least another 2 years of elevated spend - OpenAI valuations defensible, people who sell based on extreme expectations for the company are like casino gamblers. - Tan stated markets had misinterpreted OpenAI's ARR because its underlying fundamentals remained strong. - Frontier labs if they achieve widespread adoption / revenue would strengthen capital raising, which overpower headwinds from raising interest rates. Lot of $AVGO CEO remarks looks heavily nuanced, which Western media coverage distored.

Investor Letters

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Verra veerer

Verra Mobility’s Avis termination threatens 2027 earnings, while Government Solutions profit rose 25% and implied fourth-quarter guidance…

VRRM $404M
The Oak Bloke 2 clicks

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 $20B
Stock Thoughts 4 clicks

Microsoft's AI Boom Has A Cost

Microsoft’s Azure grew 48% as AI monetization accelerated, but doubled CapEx, largely for CPUs and GPUs, reduced quarterly free cash flow…

MSFT $3.9T
Yiannis Zourmpanos 2 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 $423B
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 $114B
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 $5.6B
Value Investors Club

AMZN Q3 FY12/26 Earnings Review

Amazon reported $201.9 billion Q3 revenue and 39% AWS growth, while $220 billion in 2026 capex drove trailing free cash flow to a $42.4…

AMZN $2.9T
Cestrian Capital Research 3 clicks

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