Stone Fox Capital
Founder, CIO & Portfolio Manager of Stone Fox Capital
TeraWulf rushed to sell more shares right after breaking out above $20, despite a first-quarter miss. It is offering $800 million of common stock, plus up to $120 million more for underwriters, to help fund a data center in Hawesville, Kentucky. Preliminary Q1 revenue of $30-35 million fell short of the $39.17 million consensus, with adjusted EBITDA of just $0-3 million. x.comÂ
CoreWeave, IREN, Nebius and TeraWulf will sell shares as fast as they can when their stocks get pumped back up, adding issuer supply to rebounds. x.comÂ
Heavily indebted data-center and compute names, including CoreWeave, IREN, Cipher, TeraWulf, Core Scientific, Riot, MARA, Hut 8, Bitdeer and Bit Digital, are vulnerable if credit tightens next year. High-debt firms get punished in tightening, especially if a credit freeze stalls projects, and panicked markets sell everything. TeraWulf shows the risk, with a $427.6 million Q1 net loss, $713 million of quarterly cash burn and $7.09 billion of liabilities. This is a macro basket trade. x.com x.com … Show more
TeraWulf's lease rates are repricing higher as scarce powered shells grow more valuable. Lake Mariner's Fluidstack leases came in around $1.86M per MW-year and the Anthropic deal at roughly $2.37M, a 27% increase. Nvidia's 15%+ AI server price hike falls on tenants, not landlords, making speed to power more valuable. Its warrant charge hits when the stock rises, so headline EPS is an anti-signal. The key watch item is pricing on the $3.5B Kentucky loan this fall. x.comÂ
CoreWeave's heavy debt and negative free cash flow heighten the risk that neocloud contract growth will not fund expansion. It has $104.2B in backlog against $35.6B in debt and negative $5.74B quarterly free cash flow; Nebius has over $40B in contracts but $5.7B quarterly capex and customer-concentration risk. DigitalOcean's diversified cloud model reduces reliance on debt-funded GPU expansion, while TeraWulf avoids direct GPU depreciation but faces capital-intensive construction. x.comÂ
TeraWulf is a Ponzi designed to enrich its subsidiary and give billionaire friends and insiders exit liquidity. CEO Paul Prager should step down. x.comÂ
Cipher Mining's recent capital raise at these share prices weakens its appeal relative to TeraWulf. Both companies are doing things worth liking, but the disappointing raise tips the preference toward TeraWulf. x.comÂ
TeraWulf's reported $20 billion lease with Anthropic and roughly 3 gigawatts of compute capacity look like barely hidden fraud for a formerly bankrupt company now competing with Meta on capacity. x.com x.comÂ
Gorilla Technology's financing was needed to grow enough to fulfill already signed contracts. Its $180 million cash balance versus a $205 million market value and the roughly $1.4 billion Freyr agreement still make the selloff look excessive; the over $10 billion qualified pipeline remains unsigned. x.com x.comÂ
TeraWulf's pivot from bitcoin mining to AI compute is drawing financing and analyst support after a reported $19B AI data-center lease with Anthropic. Per Bloomberg, citing CFO Patrick Fleury, it plans about $3.5B of leveraged loans and high-yield bonds, run by Morgan Stanley, to build the Kentucky campus under a 20-year Anthropic lease. Rosenblatt and Bernstein raised targets, with Bernstein seeing up to 70% upside. It must hold above $24.50 to keep its reclaim alive. x.com x.comÂ
CoreWeave's losses, high debt and rising share count make it look like one of the worst things to buy. Sales have grown sharply, but earnings and returns on capital remain negative. x.com x.comÂ
