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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 4 clicks

From X

@convequity

Convequity on X

$TSEM + $SOI: positioned on both sides of the biggest shift in AI datacenter interconnect — and Google's new TPUv8i just supercharged the story. Leg 1 — Smarter optics, much bigger chips. Next-gen optical links ("coherent-lite") encode data far more densely than today's IMDD links. But the sophistication has a physical cost: the photonic chip needs roughly 2–2.5x more silicon area per port, because it packs in multiple modulators, splitters, and detectors where today's simpler links need one of each. Factor in that bigger dies yield worse, and you need ~3–4x the wafer starts per port. More area × more volume × worse yield = several-fold growth in SiPh wafer demand over the cycle. Leg 2 — The switch itself goes photonic. TPUv8i connects its chips through an optical circuit switch (OCS) built from silicon photonics — a genuinely new thing. $GOOGL's old scale-out OCS used MEMS mirrors: zero SiPh content. The new one puts a very large photonic die (300–450mm², heading toward 500–800mm² — near the reticle limit) in every pod. That's a brand-new ~10–20% layer of demand on top of the transceiver story, and it scales faster than linearly as switch radix grows from 64×64 to 128×128. The elegant part: Leg 2 forces Leg 1. The optical switch loses 5–10dB of light — 70–90% of the signal is gone by the time it exits. Today's IMDD transceivers can't read a signal that weak; coherent ones can. So every transceiver plugged into the switch fabric has no choice but to go coherent — and coherent means the 2–2.5x bigger chips from Leg 1. Google's switch decision doesn't just create its own SiPh demand; it automatically triggers the transceiver upgrade too. Tower has manufacturing flows for both legs: high-speed modulator + Ge flows for transceiver PICs, AND mature passive flows for the huge fabric dies. Soitec supplies the photonics-SOI wafers upstream either way — it wins regardless of which foundry takes the socket. One more kicker: Celero, the Alphabet-backed startup tipped for Google's coherent DSP socket, has no fab of its own — its companion photonic chip has to land somewhere, and an open specialty foundry is the obvious somewhere. Risks: coherent modulators migrating to InP/TFLN would leak the PIC leg out of silicon photonics; Marvell verticalizing into its own photonics partially bypasses the open-foundry path.

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 $333M
The Oak Bloke 3 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 $17B
Stock Thoughts 5 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 $4T
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 4 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 $5.3B
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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