I’m interested in “uglystocks” for a simple reason: I’ve lost faith in the current pricing system. I believe its discovery function has been compromised, making it extremely challenging to perform reliable economic calculations and value projections. I believe buying undervalued stock issues, Ben Graham Net-nets, Walter Schloss cheap TBV, and contrarian international /oversold stocks (selling at their 5- to 10-year lows) is an intriguing proposition because these assets have already shed their “inflationary” excesses, making them leaner, healthier investments with potential for a turnaround. More importantly, the wider investment public and the US centric pros are rarely privy to such opportunities.

PayPal Holdings. ( )

I like PayPal ( ). The company controls 45% of online payments processing. The stock sells at 8x FCF and is widely disregarded by the AI-infatuated public. Great opportunity to own a “ commodity” staple selling at an extreme discount.

PYPL shareholders and management rejection of a $53 billion buyout as “insufficient” signals internal confidence that the market is severely undervaluing the core business.

Without M&A distortion, the fintech giant can channel its robust double-digit unlevered free cash flow (FCF) yield into buying back its own stock at depressed valuations rather than letting a private consortium acquire that cash flow on the cheap.

What’s also worth mentioning is that PYPL’s second-quarter metrics were stable, with total payment volume up 10% year-over-year ($486 billion) and adjusted per-share earnings (EPS) of a better-than-expected $1.38.

A 1.04% dividend yield makes PayPal Holdings even more attractive to own for the long term.

NIKE, Inc ( )

I like Nike ( $NKE). Nike is still the most valuable sports brand in the world, and the crowd is overreacting to natural zigzagging patterns that often characterize great companies.

Granted, previous management miscalculations and brand-equity-destructive woke ideologies have severely hurt the company's cash yields. Nonetheless, Nike won’t go away without a fight and may even turn around as a safe haven when the AI narrative winds down and investors seek out alternatives to park their capital.

The stock is selling at its 13-year low, just our type of “Uglystonks”. The 4% dividend yield isn’t a bad return to hold onto as management scrambles to regain customers' and partners’ trust.

Pernod Ricard SA ( EPA: RI)

I like Pernod Ricard S.A. The company was founded in 1805, and isn’t going anywhere. Millennials and TikTok-infatuated Gen Zs drink less than their predecessors. They also have less sex and marry less.

But alcohol consumption is a civilizational reality, and holding onto valuable producers is as sound as an investment as they come along. In fact, alcohol ( whisky and vodka) has served as a medium of exchange during major currency crises.

Pernod Ricard owns a global portfolio of over 200 premium spirits, wines, and champagnes and pays a generous 7% dividend yield. The stock trades at a P/E of 12, nearly 1/2 below its industry’s peers of 22x. Pernod Ricard is currently selling at a 16-year low.

What’s not to like when everyone else is chasing Neocloud’s pump-and-dump schemes?

All these 3 stocks are leading brands, proven market leaders in their markets, and selling at extreme discounts to the popular AI narrative. The intelligent investor would be better off holding onto sound companies with proven records and established historical legacies.

(Not investment advice. I write to feed my own curiosity and for intellectual stimulation only. Always consult a trusted investment advisor before buying or selling financial securities. Wall Street is not your friend.)

Wall Street loves a bubble, even in the gold standard.

I am here asserting that the most important indicator of economic prosperity is the quality of the money medium. That is because a currency that maintains and even increases its purchasing power signals a prosperous, competitive, dynamic, free, and high-trust society, as opposed to an inflationary purchasing power-degraded monetary regime that often denotes interventionism, cronyism, and the hyper-financialization of the economy.

Interestingly, the financial industry tends to thrive under inflationary regimes while shrinking in a deflationary hard-money currency system. Wall Street, I must say, has rarely been the friend of Sound money.

Under sound money, workers need only to work hard and be thrifty to be relatively prosperous. Under inflationism, they must absolutely invest and own financial assets to mitigate the negative effects of declining purchasing power. Securities issuers and sellers therefore thrive as the production and demand for financial securities rise incrementally with inflation, transferring wealth and prestige towards the financial industry and adjacent sectors.

Under hard money, securities issuance is marginal, serving as proxy for actual industrial and business ownership. Savings-based capital investments and value creation are rewarded with profits, while entrepreneurial errors are quickly cleared out of the pricing network. Capital is dear, and interest rates stay relatively high to reward savers. Cheap credit-induced business cycles are shortened, and speculative euphoria restrained as fractional-reserve credit growth is severely hampered by monetary inelasticity. Investors can keep their savings safely in cash for decades, unperturbed.

In the meantime, the financial industry remains small; bankers, brokers, insurers, hedge funds, quants, lawyers, Newsletter writers, accountants, financial advisory services, and many other fancy white-collar “high finance” jobs are relegated to mid-level salaries. The social prestige and compensation attached to those jobs do not exist.

Gone are the days of large mansions and prestige attached to high finance, and welcome to middle-class three-bedroom, two-bath suburban life. The Cantillon wealth effect from central banks into the financial industry dries up, and capital formation shifts from artificial fractional-reserve credit growth to actual savings-based natural interest-rate demand.

Historical Evidence:

The American experience: 1873-1913.

The US operated under a de facto Gold standard after 1879, and the period was characteristically deflationary. Wholesale prices fell roughly 30-40% between the end of the Civil War and the mid-1890s.

During that period, a savings account was a prestigious wealth-building instrument. A farmer, mechanic, or store owner who deposited his gold-backed currency into a savings account or bought government bonds saw real returns with little equity market risk.

Wall Street was geographically and socially marginal. Powerful investment banks existed, with JP Morgan and Rockefeller’s banks competing over government financing and corporate reorganizations. But hyper-securitization of consumer debt or financial engineering was almost non-existent.

Also, the financial sector's share of GDP and employment was relatively small. Banks held mortgages on their balance sheets until maturity. There were no mortgage-backed securities, no collateralized debt obligations, no structured products…etc

The British Gold Standard, 1815-1914.

In Britain, the gentleman capitalist could maintain his social standing by holding consols ( government perpetuities) and keep a current account at his bank. The city of London social cachet was real, but limited to prestigious banking houses like the Barings or the Rothschild.

London under the classical Gold standard was the world's largest, most sophisticated financial center. Merchant banking, sovereign debt underwriting, and global capital flows boomed despite hard money. Capital raising and underwriting for genuine enterprise was dynamic, but the retail and speculative complexity of the financial service industry was almost nonexistent. Finance did not dominate popular culture, nor was finance a career aspiration the way investment banking and private equity are today.

The social contrast and the social contract:

Since the closure of the gold exchange window in 1971, the financial sector has exploded concurrently with rising inflation. Holding cash throughout that period guarantees poverty, as inflation gradually eats away at savers’ purchasing power. Every teacher, nurse, and engineer is thus forced to become an amateur portfolio manager, or hire one. This has created a massive captive clientele for the financial industry.

This led to a systemic shift in cultural values, as the brightest young minds aim for jobs in investment banking rather than becoming engineers, inventors, merchants, industrialists, or even clergymen. In the 19th century, the financier was a respected useful clerk; in the 21st century, he is the master of the universe.

In a fiat system, financial institutions generate massive revenues via financial engineering: taking illiquid debt (mortgages, auto loans, consumer credit, corporate debt), bundling it into tranches through structured products (MBS, CLOs), and selling it to yield-hungry investors. Wall Street and private equity firms occupy a central role in the culture and in the economy. They serve as the indispensable conduits through which central bank liquidity flows into real estate, buyouts, venture firms.

Initially a marginal, specialized finance niche, private equity exploded in the 80s; from 1982 through 1993, it grew amid a dramatic surge in leveraged buyout activity financed by junk bonds heralded by Drexel-Burnham Lambert and led by Michael Milken. The leveraged buyout industry then nearly collapsed in the late 1980s and early 1990s.

The second boom-and-bust cycle (from 1992 through 2002) emerged from the ashes of the savings and loan thrifts crisis, real estate market collapse, and the early-1990s recession. This period saw the emergence of more institutionalized private equity firms, ultimately culminating in the massive dot-com bubble in 1999 and 2000.

The third boom-and-bust cycle (from 2003 through 2007) came after the dot-com bubble's collapse; leveraged buyouts reached unprecedented size, and the institutionalization of private equity firms was exemplified by the Blackstone Group's 2007 initial public offering.

Today, thousands of private equity firms operate globally, with estimates generally placing the number between 10,000 and 24,000 active firms worldwide. In the US alone, industry data tracks over 11,000 investment vehicles and firms. The largest market leaders include Blackstone, KKR, Apollo Global Management, and the Carlyle Group.

The historical trajectory of hyperfinancialization is equally evident in the growth of the hedge fund industry. Alfred W. Jones created the hedge fund industry in 1949, a middle-aged journalist with a master’s in sociology and little to no investing experience. He borrowed $60,000 and added $40,000 of his own money to create the world's first “hedged fund”. Despite its management-incentive fee, over 10 years, Mr. Jones's hedge fund beat the top-performing mutual funds, the Dreyfus Fund, by 87 percent. This led to a flurry of interest in hedge funds in the 60s and 70s with at least 130 hedge funds started, including George Soros's Quantum Fund and Michael Steinhardt's Steinhardt Partners.

The hedge fund industry has grown by leaps and bounds since the 40s, with total capital reaching a record $5.6 trillion in the second quarter of 2026. Meanwhile, the US currency has lost nearly 90% of its purchasing power, and the US industrial base has shrunk dramatically. The number of global billionaires has equally surged from 140 when Forbes first tracked the world's richest in 1987 to over 3,400 today, many of whom are mere fee-earning capital trustees.

Conclusion: Wall Street, a Fiat benefactor.

Adjusted to Gold, the vast majority of asset prices have trended down for decades. Thanks to the exponential growth of international trade, technological and scientific innovation, living standards have factually increased across all spectrums. In real terms, prices have generally gone down: food, healthcare costs, education, leisure, travel, entertainment, and even stock securities. The veil of inflation only hides the real treasure of entrepreneurial dynamism and the success of the financial and capital division of labor, which continues to alleviate poverty worldwide regardless.

The trajectory of the financial industry, by contrast, is telling: Once a marginal and specialized sector, the financial industry has largely benefited from the past 50 years of unrelenting inflationary and rescue policies, driving growth and wealth aggregation within a small circle of sophisticated financial and corporate dealers. As an example: Total global hedge fund industry capital exploded in 2Q 2026 to a historic $5.6 trillion, jumping for the 15th consecutive quarter, as reported in the latest HFR Global Hedge Fund Industry Report, released by HFR®, the established global leader in indexation, analysis, and research of the hedge fund industry. Institutional Investors website notes that the 25 managers who earned the most last year made a total of $36.65 billion, the highest amount in the quarter-century Institutional Investor has been publishing its definitive ranking.

Meanwhile, Bankrate.com reports that only 46% of U.S. adults have enough emergency savings to cover three months of expenses according to its Emergency Savings Report. This is particularly troubling given the currency's gradual decline and the fall in savings rates. In fact, 40 years ago, CDs were considered great investments. The average annual percentage yield (APY) on a one-year CD was over 11%, a far cry from the meager 1 or 2 percent offered today. At 11%, most people will naturally try to work harder, produce more, and save more. In fact, a natural psychological link exists between market-based interest rates and savings rates. Today, unfortunately, the average investor has been forced to either “play the market,” with potentially disastrous consequences, or trust a fee-hungry financial professional. Either way, the working man has lost tremendously, while most of the wealth has been transferred to a small circle of connected Wall Street rent-seekers. The gap between the rich and the not-so-rich only continues to widen as the currency depreciates over time.

( I write to satisfy my own intellectual curiosity. Not investment advice.)

“ If you invest in a stock, you must be mentally ready to watch it drop 50% or even more and stay calm through it.”

Warren Buffett.

Introduction: The Nike Fatigue!

I was rather awestruck by this YouTube video comment, as it rightfully summed up the main reason behind Nike, Inc ( ) current crisis. I had to borrow it for this analysis: ( I left the comment as is for authenticity purposes!)

“as former Nike dealer who was with them for 36 years, I just want to say that before they got rid of somewhat big national chains that was not their "40 dealers". Nike got rid of all the independent dealer who were with them as long as 50 years or more. Our family were with them since 1980. And I was let go in 2016. So in big picture, they got rid of Independent then smaller nationals then big nationals like DSW and Zappo.
And Some of the 40s are not there anymore. LOL

You should have seen hubris, arrogance, misguided confidence of Nike executives and staff going back 10 years. It was something else, biblical.”

@YongKim-lp7hl

3 months ago (edited)

This comment hits the nerve. It effectively touches on the common factors that often precede great brands’ decay: hubris, arrogance, self-entitlement, detachment, and greed. Consumers’ growls have grown louder over the years, fueled by a series of blunders born from a gradual disconnect between consumers’ expectations and corporate priorities.

Nike executives just grew overconfident and lost their “ foot on the street” over the years. Decades of unchallenged success may have caused them to forget that customer satisfaction was their real bread and butter.

So a question must be asked:

Can Nike ( ) regain its mojo?

Watching Nike, hoping for $30 per share entry point.

The Facts: Nike is still expensive, to me!

I will get even more excited if the stock collapses -50%

I am an ugly stock hunter, and Nike screens like a contrarian bargain with its stock hovering near a 13-year low. The stock is down 73% in five years, and news headlines emphatically highlight the company’s struggles and its well-earned consumers’ distrust, which should hopefully put more downside pressure on the stock even when operations and results may warrant a fair rerating.

With a trailing PE ratio at 20.05, a PB ratio over 4, and an EV/FCF at 28, I believe Nike hasn’t quite hit the bar of real distress yet.

I am a scavenger by nature (allegorically speaking), and while everyone is panicking and crying “fool,” I hope the macro forces pressure the stock even lower.

I prefer to invest in stocks with a (P/E) ratio below 10 and a price-to-free cash flow (EV/FCF) ratio below 15. At its current valuation, Nike would need a share price below $30 to make me salivate.

The Ugly:

It is evident that the “ Swoosh” brand’s equity has deteriorated. The premium value associated with Nike has been compromised by the widespread commoditization of its products, which has eroded decades of cultivated exclusivity refinement. Purchasing a $250 pair of shoes no longer makes sense when everyone can wear the same logo on a $15 shirt or short.

The common blame is inputed on the company’s strategic miscalculation under past leadership, namely former CEO John Danahoe, that overemphazed digital direct-to- consumer sales while abandoning key wholesale partners to favor its own apps and stores. Other factors also include a shift away from sports toward generic lifestyle.

Macro factors such as tariffs, the entry of competitive new brands such as Hoka and Onon, rising inflation, and polarizing “ woke” issues have equally exerted real pressure on the company’s margins.

Cash often tells the big story, and while the brand remains relatively solid, its cash flow margins shine a brighter light than marketing stunts could ever do.

Nike Inc. (NYSE: NKE) reported an annual free cash flow of $2.184 billion for its fiscal year ending May 31, 2026. This represents a 33.17% decline compared to the previous fiscal year, continuing a downward trend from prior peak levels. Nike's free cash flow peaked in 2024 and has fallen by nearly 2/3 in 2 years!

• NIKE annual free cash flow for 2026 was $2.184B, a 33.17% decline from 2025.

• NIKE annual free cash flow for 2025 was $3.268B, a 50.61% decline from 2024.

• NIKE annual free cash flow for 2024 was $6.617B, a 35.82% increase from 2023.

Internationally, Chinese brands like Anta and Li Ning in particular, have demonstrated remarkable resilience and dynamism, enabling them to challenge Western brands in the most sought-after Asian markets. Nike has been among the hardest hit.

ASICS, the company that inspired Phil Knight to found his company, presents an intriguing case study, having successfully navigated hypercompetitive pricing through a well-defined strategy focused on quality and exclusivity. The stock is trading at all-time highs, while Nike is languishing near 13-year lows.

ASICS has successfully navigated Chinese entry and market stratification

Nike also faces challenges stemming from a deteriorating corporate culture, exacerbated by an aging executive team and a lack of clear leadership continuity.

Let’s be candid; Nike has lost its “cool factor,” and few people are willing to pay $300 for a pair of Jordans amid a challenging job market and an inflationary environment.

The beauty: Exceptionally recognized brand.

Nevertheless, Nike remains an exceptionally profitable company deeply ingrained in the global collective consciousness. A turnaround is still possible, provided it returns to fundamentals and structurally focuses on revitalizing the brand while dissociating its equity from partisan ideologies and pseudo-social justice themes.

Nike revenue for the twelve months ending May 31, 2026 was $46.398B, a 0.19% increase year-over-year. Net income for the twelve months ending May 31, 2026 was $3.108B, a 3.45% decline year-over-year. While the income statements have remained relatively in line with the company’s historical trajectory, cash-flow issues have been the clear red flags driving the stock's collapse.

Nike generated about $2.7 billion of cash from operations in 2026, slightly more than the $2.24 billion generated in 2020. This suggests the company's recent post-COVID boost was largely driven by consumer overspending and strategic over-commoditization, which temporarily boosted cash flow while diluting brand equity.

The “direct-to-consumer online strategy” seems to have failed. And the near -50% decline in cash flow proceeds in 2025 tells the story.

Bringing back Eliot Hill, a Nike 33-year in-house veteran, from retirement should be met with cautious optimism, as it signals the board is refocusing on mending broken relationships and rebuilding the company’s historical equity focus on quality and trust.

Positive momentum also seems to be building up, with more than $1 billion in tariff reimbursements and the Fed dropping a DEA subpoena alleging the company discriminated against workers. It is fair to say that the clouds are clearing quite a bit.

With $9 billion in cash reserves and a solid 4% dividend yield for patient investors, Nike can undertake numerous initiatives to recenter its equity on the trajectory that built its reputation as the most profitable and valuable sports brand in the world.

Conclusion: The only problem with Nike is that the stock isn’t cheap enough.

The herd tends to overreact to extremes, overstimulating a stock on positive momentum and equally over-panicking on negative headlines. Nike has been around for 60 years; it went public in the 80s and has dominated Athletic wear and sports fashion for decades. Its recent challenges are a normal occurrence in a successful company’s lifecycle. Trust and integrity are key, especially for a company whose operating model is built around its “BRAND EQUITY.” Nike seems to have gotten the wake-up call with its current CEO.

I have bought a few shares, but I really want the stock to crash! Nike stock is still overvalued even at current discounts. I love ugly stocks, and the panic button hasn’t really rung on Nike yet to get me (really) drooling. I am keeping an eye out and waiting for the opportune entry point to truly “go HAM”.

The stock currently trades at an EV/FCF of 28; I’d swoop in if a black swan event could crash the stock toward 15x, or preferably even under 10x.

Nike at $25 per share, not totally impossible but far from a sign of distress in my opinion. Nike is still the “go-to” leader in athletic wear and sports fashion. Any significant down pressure on the stock ought to be embraced as buying opportunity.

Nike is an iconic American brand with global appeal; its turnaround will not materialize in 2 years. This is a 5 years turnaround bet at minimum. Phil Knight was inspired by ASICS in the 60s; ASICS is once again quietly showing the roadmap by focusing on credibility over “politics” and ignoring diluted hyper-marketing that feels more like propaganda.

Nike execs should follow along, and everything will be alright.

( Not investment advice. I own a few shares. Always consult a reputable investment advisor before purchasing shares. Wall street is not your friend.)

Hindsight is indeed 20/20; thus the ominous collapse of “boy wunder” Leopold Aschenbrenner seems rather obvious now. Just a few months ago, he was hailed as the next Warren Buffett, the genius “valedictorian,” the 24-year-old who seemingly transformed a small $224M fund into a multi-billion-dollar investment juggernaut in just two years. Jim Cramer even quipped, “Everything he touches turns to gold.”

Move aside, old Warren, with your “value investing” bullshit, and make way for a new talent more attuned to the needs of AI. The twit-sphere and the casino Street heaped praise on this otherworldly genius while skeptics like me were ignored.

-I told you so!

No one really gives a damn now. Especially the investors who trusted the inexperienced first-time fund manager with their wealth and lost millions, maybe even hundreds of millions. Ken Griffin’s Citadel just bought the fund on the “down low,” yet everyone found out, and the market is rallying on this news as I scribe this paragraph.

Buying opportunity maybe? We shall soon find out in due time.

Meanwhile, the lessons are more important than the individuals who recurrently epitomize markets’ follies throughout financial history. That’s because outside of horror movies and ritualistic sacrifices, the world of finance is among the most terrifying and ghastly realms known to humanity.

Leopold Aschenbrenner is not the first nor the last boy wonder or boy plunger (Jesse Livermore RIP) ever recorded. He is, in fact, the most recent fallen domino in an industry built on hubris, pretense, and greed.

Let’s analyze three generations of heralded geniuses that were sold to the masses as the next great ones: Garrett Van Wagoner, the rock star of 1999. Cathie Wood, the prophet of 2020s. And Leopold Aschenbrenner, the current symbol of the AI infrastructure mania.

1-Garrett Van Govener: The dot-com wunder man ( 1996-2008)

In a 2008 Kiplinger article announcing the shutdown of his fund, Garret Van Wagoner tepidly acknowledged: “My track record is not good at all. I wish I had done better.” Warren Buffett had presciently warned in 1996: “You can’t tell who is swimming naked until the tide goes out.” Mr. Van Wagoner was unfortunately caught with his pants down when the bear market hit tech stocks three years later.

Garrett Van Wagoner emerged from relative obscurity in the mid-1990s as a specialist in small-cap technology companies. After relocating to San Francisco in 1993 to develop a small-cap business for the UK-based Govett, he struck out on his own in 1996, launching the Van Wagoner Funds.

His edge came from two disciplines: direct product research and “pre-IPO” investments in late-stage private companies before they went public.

Van Wagoner Emerging Growth Fund gained 291% in 1999. AUM ballooned to almost $1.5 billion, up from $189 million a year earlier. A $10,000 investment in Emerging Growth at the beginning of 1997 would have been worth more than $45,000 by March 2000.

Those riches didn’t come without risk. Garrett Van Wagoner was known for trading aggressively and successfully, and his hard-charging style suited the times. By the time PBS featured the rising star on an episode of “Frontline” in January 1997, Mr. Van Wagoner was being compared to legendary investor Peter Lynch of Fidelity Magellan Fund.

The Fall.

Emerging Growth lost 21% in 2000 as the Nasdaq began its slow grinding collapse. Then it dropped almost 60% in 2001, and fell 65% in 2002, when assets slipped below $100 million. That $45,000 amassed by early 2000 would have dwindled to $3,300 by the end of September 2002.

For every dollar invested at the height of the euphoria, investors were left with eight cents. The mathematics of catastrophic drawdowns are unforgiving — a 92% loss requires a 1,150% gain just to break even.

Van Wagoner stepped down in 2008, by which point the fund had delivered an annualized return of negative 7.8% since inception.

A New York Post article reported later that:

Well-known mutual fund manager Garrett Van Wagoner was barred from serving as a fund director or officer for seven years after the Securities and Exchange Commission alleged that he and his company duped investors about the value of his funds.

Van Wagoner and his firm, San-Francisco based Van Wagoner Capital Management, would later pay $800,000 in fines to settle allegations of improperly pricing securities.

He tried a comeback in 2018 with a Van Wagoner Venture Fund II focused on helping to build the smart grid of the future by leading the financing of the Fourth Generation Industrial Revolution by investing in vanguard companies that are building a cleaner, more sustainable, connected, and intelligent transportation ecosystem. His thesis was based on what he deemed an investment in the Fourth Industrial Revolution around transportation and connectivity.

The PitchBook website states that the fund had been liquidated.

Van Wogener is now retired in Palm Beach, Florida; his latest attempt at a comeback seems to have failed as the website for a Van Wogener private equity fund was shut down.

This is a hard fall from a man who ruled the market in the late 90s and was compared to Warren Buffett at some point.

Cathie Wood: “ It's all God’s work anyway -and the Fed.

Cathie Wood was mentored by “ fame” supply-side economist Art Laffer. It all makes sense in aggregate: She is a trained economist! Red flag numero uno.

Supply-side was extremely popular in the 80s and is still dominating conservative old-school Wall Street today. Supply-siders love a good government spending, especially when the credit and the policies support the financial markets.

Trillions of dollars of capital have been invested on the back of that theory, and Wall Streeters have cheered it ever since. Supply-side economics made mainstream waves in theaters with the popular Oliver Stone 1987 movie “Wall Street” starring Charlie Sheen and Michael Douglas. The famous “Greed is Good” speech delivered by Gordon Gekko has left a sour taste in many people’s understanding of Free-Market Capitalism ever since. Supply-side is flawed. Woundedly so!

Cathie Wood is also connected to Bill Hwang of Archegos Capital with whom she shares a strong faith in Christ. In an interview with CNBC, she said that BH provided seed capital for Ark’s first four exchange-traded funds. Red flag numero dos!

Cathie Wood spent 12 years at AllianceBernstein managing $12 billion of capital focused on growth stocks until she decided at age 57 to form her own fund.

She started ARK after reportedly clashing with her former employer: Her old boss at AllianceBernstein told the Financial Times that “her biggest blind spot is managing risk and volatility” — a serious charge against someone responsible for other people’s money. Wood credited the inspiration for starting ARK — which offers nine exchange-traded funds that anyone can buy like a stock, making them accessible to rank-and-file investors in a way that hedge funds are not — to a divine “calling” from the Holy Spirit. The fund is named after the Ark of the Covenant, a religious storage chest and relic held to be the most sacred object by the Israelites.

Cathie Wood was one of the earliest promoters of Tesla around 2014, when the company’s survival was uncertain. She bought initial shares at approximately $15 per share, adjusted for stock splits.

Her rise to fame coincided with post-COVID government spending policies and a stock market boom, as a combination of government stimulus, near-zero interest rates, and a surge in retail trading skyrocketed the markets, particularly tech stocks. Her flagship ARK Innovation ETF ( ARKK) gained 153% in 2020 and she became one of the most talked about investment stars. She quickly rose to icon status, praised for her bold, long-term forecasts on artificial intelligence, DNA sequencing, and blockchain.

AUM exploded from roughly $1.8 billion at the start of 2020 to $17 billion by December 2020, then peaked at $27.9 billion in February 2021. Wood even began to promise investors 40% compounding annual returns over the next five years.

The Fall.

A Morningstar analysis written in 2023 found that Cathie Wood's ARK Invest destroyed approximately $14.3 billion in shareholder wealth from 2014 to 2023, the highest for a fund family during that period. High-growth tech bets and rising interest rates drove these losses, with the ARK Innovation ETF (ARKK) accounting for roughly $7.1 billion of the total.

Wood, despite her background as an economist, did not anticipate the Federal Reserve would begin raising interest rates in 2022; her portfolio—full of unprofitable, long-duration growth companies that only work in a zero-rate world—collapsed. Her inability to manage volatility had come home to roost.

ARKK fell more than 70% from its all-time high. Investors who had rushed in at the peak, once again drawn by recent performance, absorbed the bulk of the losses.

Wood has never fully recovered her earlier status. She continues to manage money, make projections, and attract the kind of media attention that a 150% year buys you in perpetuity. But the investors who loaded up at the top are still waiting.

“ When he touches something, it turns to gold...” Jim Cramer.

Leopold Aschenbrenner: Situational Unawareness and more…A lot more.

The official story, so far, about Leopold Aschenbrenner is that he got caught with his pants down because of his overleveraged positions.

As of July 30, 2026, Situational Awareness LP — the AI infrastructure hedge fund run by former OpenAI researcher Leopold Aschenbrenner — has sold its entire public equity book to Ken Griffin’s Citadel following forced margin calls from Goldman Sachs, JPMorgan Chase, and Bank of America. The fund had reached $45 billion in AUM and boasted a 439% net return through June 30. It took less than three weeks for 4x leverage to turn that triumph into a forced liquidation.

That story is only partially accurate. In reality, his whole thesis was flawed from the get-go, and his selection of securities would have doomed him sooner or later, leverage or not. Just as his predecessors, Wagoner and Wood, Aschenbrenner's stock selection has been less than remarkable, built on momentum and hype with a complete disregard for the “art” of securities analysis and fundamental research.

In an alert 🚨 that I posted on my X account on May 25th, 2026, I clearly highlighted the red flags 🚩 of his selected investments.

My research — see the accompanying Loss Portfolio analysis — covers the 16 loss-making companies inside Situational Awareness LP’s disclosed holdings.

1. Bloom Energy (BE) — Largest non-semi long (~$879M). Fuel cell power play. Trades at P/S ~33x, forward P/E 126-160x+, P/B ~85x. GuruFocus GF Value shows ~900-990% overvalued (e.g., ~$26 fair vs. ~$280-290 price). Negative or razor-thin historical margins; speculative AI power demand. No margin of safety.

2. Core Scientific (CORZ) (~$389M). Bitcoin miner/AI hosting pivot. P/S ~22-25x, forward P/E 167x, negative P/B. Highly volatile crypto-adjacent; earnings erratic. Graham would reject due to lack of consistent profitability and asset backing.

3. IREN (Iris Energy) (~$401M). Similar miner-to-AI pivot. P/E 220x+, P/S ~25x, P/B ~8-9x. Extreme multiples on growth hopes; history of dilution and crypto cyclicality. Far from Graham’s “bargain” threshold.

4. CleanSpark (CLSK). Crypto miner/HPC. Elevated P/S (often 5-15x+ in rallies), volatile earnings. Benefits from the AI narrative but lacks a defensive balance sheet or a low valuation.

5. Riot Platforms (RIOT). Analogous to above—high P/S, speculative pivot risks, no stable earnings track record for Graham-style analysis.

6. Applied Digital (APLD). Data center/AI infrastructure. Similar high-multiples growth story with execution and funding risks typical of the sector.

7. CoreWeave (CRWV) (~$556M). GPU cloud provider. Post-IPO growth stock with premium valuation (P/S often 8-10x+ on projections). Heavy on future AI contracts; debt and capex intensive. Speculative, not asset-based value.

8. SanDisk (SNDK) (~$724M). Memory/storage. Benefits from AI data needs but trades on cyclical hype; valuation stretched vs. normalized earnings.

9-10. Other miners/infra proxies (e.g., Bitfarms/BITF, smaller positions) and selective longs like certain power/storage plays follow the pattern: narrative-driven premiums, weak current profitability, and vulnerability to delayed AI capex or competition.

Several of these companies are not merely unprofitable; they are deeply, structurally, persistently overvalued. Applied Digital traded at approximately 50 times sales while losing more money than it earns in revenue.

SanDisk posted a $1.64 billion net loss in FY2025, 144% worse than the year before.

CoreWeave, the fund’s second-largest position, is facing an active securities fraud class action, reported a $452 million net loss in Q4 2025 alone, and issued guidance that missed Wall Street estimates by more than 15%.

These are not small imperfections in an otherwise solid portfolio. These are structural red flags that would disqualify most of these companies from serious institutional analysis — were it not for the gravitational pull of the AGI narrative draping everything in inevitability.

While the leverage effect has precipitated the Fund collapse, the fundamental value of the heralded companies is still in limbo while the AI infrastructure thesis remains a major concern for investors with the entry of competitive Chinese companies and the growing fragility of hyper-scaling giants in the US and in South Korea.

How long will the party last?

Conclusion: The heroes of bubblenomics always end in tatters.

The history of speculative bubbles is always personified by the meteoric rise and inevitable fall of central figureheads. While they are exalted as heroes at the beginning, their swift fall is soon regarded as a cautionary tale. In reality, they were mere symbols of the blissful and blinding exuberance that periodically sweeps over the markets under the pretense of world-changing technological themes, only to end up in tatters when reality sets in.

The 90s were marked by the dot-com internet bubble. While that era gave birth to revolutionary companies such as Google and Amazon, the plethora of zombie pretenses that populated that bubble led to the bankruptcy of Garret Van Wagoner. For a brief moment, Van Wagoner rose from an obscure analyst into a celebrity financial expert hailed as the next Peter Lynch. As quickly as his rise occurred so was his fall.

Cathie Wood preached Tesla in the early 2010s, before everyone else would recognize the company's worth. And she benefited greatly. Covid stimulus further heralded her vision, and her Ark fund became a staple for the average investor seeking exposure to world-changing technologies. She is now worth up to $200M. But her fund returns have been abysmal. And she has become a subject of mockery across social media and internet platforms. She was right on Tesla…But missed the boat on literally everything else despite close to 4 decades as an investment professional!

Last but not least: Boy Wunder “New Warren Buffett” Aschenbrenner. The most recent archetype of market folly! It's rather perplexing how an inexperienced 24-year-old was even elevated to a hedge fund principal to begin with. His proximity to Sam Bankman-Fried, and to the very controversial Sam Altman as well as his intimate relationships with Anthropic's Chief of Staff should have raised eyebrows.

Eyebrows,I did raise! Not so much because of Leopold Aschenbrenner’s ties to Silicon Valley’s elites, but because of serious qualitative and quantitative valuation concerns. The vast majority of Aschenbrenner’s stocks are (his fund has been co-opted by Ken Griffin’s at Citadel) mediocre perennial hype-cycle riders (Bloom Energy), zombified crypto-to-AI infrastructure pivots (WhiteFiber), and unprofitable insiders’ stock-dumping schemes (Coreweave).

Although young “King” Leopold's story ended abruptly on his wedding day, his stock portfolio selection has not been wiped off the map. In fact, in some corners of the market, investors view the recent mini-crash as buying opportunity. This is utterly reckless!

Good old Warren must be laughing at the utter foolishness once again. These “actors” were prompted by certain media to replace his buy-and-hold and don’t-borrow “boring” strategy over three decades. All of them have eaten dust; one has vanished from the scene, retired. The lady is now a laughingstock to her former followers, and a young man has just learned a brutal lesson on the pitfalls of uber-leverage.

Finally, I believe the wider public must carefully reassess the fundamental value of these AI-related securities in light of global trends and risks. The 'AI infrastructure theme has hit a critical juncture, and the failure of 'SITUATIONAL UNAWARENESS' could be a major market top signal that may potentially trigger a significant downturn in the near future... KABOOM!!!!

You have been ALERTED.

( This article was written for intellectual stimulation only. None of the authors opinion should be conflated for investment advice. Always consult a trusted advisor before buying or selling financial securities. Wall Street is not your friend.)

I am drawn to “uglystocks” because struggling companies force their execs fat cats into taking action or they are fired and replaced by competent operators.

Most corporate leaders are Ivy League-educated climbers formatted to Wall Street’s metrics. The asymmetry lies in delineating technocrats and careerists climbers from real leaders-entrepreneurs trying to work out solutions to salvage and revive their companies.

The failure rate of turn around tends to be high but occasionally, a strong exec and a team of visionary officers successfully revive their struggling companies and sets them on a path to profitability, which benefits shareholders.

Struggling companies are thus a unique investment niche because they operate as closely as possible to pure capitalist active management, unlike “growth” investing, which is often driven by momentum and popular trends, therefore rewards unimaginative corporate opportunists.

Introduction

FMC Corporation is the quintessential “uglystock.” 20% of its tradable float is held by shorts. And that trade has been right on the money. Shorts have eaten “good.”

The stock is down 70% Y/Y after reporting a net loss of $2.5 billion on $3.4 billion in revenue in 2025. The company was booted from the S&P 500, slashed its dividend by 86%, and carries roughly $4.5 billion of debt in its balance sheet. FMC Company is stumbling around like an emaciated half-dead corpse waiting to wither away after a decade of miscalculated short-term Wall Street-friendly missteps.

The stock is currently trading below its Global Financial Crisis lows. Adjusted to inflation, it is likely selling at an all-time low.

At first glance, it is nearly impossible to identify a clear catalyst that justifies a contrarian buy outside of pure technical-analysis gymnastics. Even for an “Uglystock” lover like me, the situation looks a lot like a gamble into the void.

Nevertheless, everything isn’t completely gloomy. In fact, there is an interesting valuation catalyst that can transform this seemingly “ sick” stock into an interesting M&A trade opportunity: it is the human factor; more specifically, the leadership asymmetry. . .

The Man, the Mission

When Pierre Brondeau first joined FMC Corporation in 2010, the company was a sprawling hodgepodge spanning agricultural chemicals, lithium, soda ash, peroxygens, phosphorus chemicals, and health and nutrition ingredients.

Brondeau is a classically French-trained engineer turned Wall Street portfolio builder. Unlike lifetime managers who defend legacy operations, he views chemical assets as trading chips to be optimized, combined, and even liquidated.

During his first tenure, he executed a multi-billion-dollar portfolio overhaul. He orchestrated the divestiture of FMC’s soda ash and health segments, acquired Danish chemical maker Cheminova, and completed a major asset swap with Dow/DuPont to inherit their massive crop protection portfolio. He delivered a historic 325% total return to shareholders across his first tenured stretch.

FMC became the world’s fifth largest crop protection company with a balanced global footprint and a portfolio of patented, high-margin technology. Wall Street cheered, and Brondeau retired in 2020, giving way to his protegee Marc Douglas to take over the reins of the company.

The challenges

FMC Corporation stock has dropped from its 2022 highs above $140 per share to recent new lows at $11 per share. This collapse was driven by the lingering effects of post COVID crop protection destocking, debt accumulation, and most importantly, generic competition on its key diamide patents.

The global pesticide industry has shifted from being dominated by patented products and legacy multinationals to being led by generic producers in India and China. This “generics revolution” has led to increased pesticide use, particularly in lower-income countries, and has blurred the lines between R&D and generics firms.

Agrochemical patent expirations are driving a multi-billion-dollar shift toward generics, with Asian manufacturers in China and India leading global production. FMC’s core cash cows, Rynaxypyr and Cyazypyr, have faced increasing patent expirations and aggressive post-patent generic competition in key markets such as India and Latin America, eroding the company’s margins.

Global leaders in generic agrochemicals and off-patent crop protection include UPL Limited, ADAMA Ltd., and Nufarm Limited. All these companies are known for providing cost-effective, large-scale agricultural solutions. These firms have cornered the markets once dominated by Western pesticide companies like FMC -1.60%↓, which is among the most fragile and weakest market leaders.

Criticisism:

Christian Pereira, of Campo de Visao Internacional, wrote an in-depth analysis describing the driving factors behind the FMC Corporation difficulties:

the patent cliff, specifically the expiration of Rynaxypyr patents, and the acceleration of Chinese generics have eroded the company’s hold over its market.

Pereira paints an interesting picture of a company that failed to anticipate the lingering effects of its patent expiration, contending with short-term, Wall Street-friendly financial reporting rather than investing in structural acquisitions for the future. His article sheds new light on an industry-wide “neglect” that has come home to roost, negatively affecting heavily indebted and poorly capitalized companies such as .

At the November 2023 investor Day, FMC projected revenue of $5.5-6 billion for 2026 and $11 billion for 2033. The reality has been quite brutal; aggressive Chinese generic entry has shrunk the company’s market share much faster than anticipated.

Whilst the company headquarters focused on assuaging investors’ concerns with press releases, Chinese and Indian generics developed manufacturing capabilities faster. And the market quickly accepted quality generics.

2025 was one of the worst years in the company’s modern history:

• Q4 2024 earnings missed expectations. Full-year revenue guidance of $4.15-4.35 billion disappointed against a $4.40 billion consensus. The stock began its descent.

• In March 2025, FMC was removed from the S&P 500 index entirely and demoted to the S&P small-cap index. A humiliating fall for a company that was once a mid-cap stalwart.

• The Q3 2025 report was a disaster. Revenue of $542 million was down 49% versus Q3 2024. The company reported GAAP net loss of $569M. Free cash flow guidance was slashed to -$200M. The quarterly dividend was cut 86% to preserve cash for debt reduction.

• FMC recorded a $1.36 billion goodwill impairment, writing off its entire goodwill balance. The company posted a full-year net loss of approximately $2.2 billion, a significant swing from a $ 3.21-per-share profit in FY 2024.

Caught in a conundrum

Fmc stock is down -85% in 5 years

FMC looks like a company frozen in the middle of the road like a deer caught in the headlights. Chinese and Indian generic manufacturers have squeezed its margins by aggressively flooding the market with cheap off-patent alternatives to its flagship insecticide, Rynaxypyr (chlorantraniliprole). Generics now account for a large majority of the global crop protection market by value estimates. Estimates range from 70% to as high as 93% depending on the source and definition.

This massive supply surge collapsed global active ingredient prices and compressed FMC’s revenues, forcing the chemical producer into severe financial restructuring.

The company is therefore stuck in a survival conundrum after exhausting its capital armory. The B word, aka Bankruptcy has been mentioned quite often. The company’s capital structure and negative cash flow give skeptics reasons to doubt the 148-year-old company's ability to survive what amounts to its most severe existential crisis.

The Brondeau’s Asymmetry:

I believe Brondeau’s return at the helm ought to be cheered by investors and seen as a valuable catalyst for contrarian rerating. The merger or sale of the company is back on the table. Pierre Brondeau is reputed for his ability to remove operational bottlenecks, deleverage balance sheets, and clean up enough for a valuation repricing. And he has moved quite swiftly:

• In May 2026, FMC priced a $1.2 billion offering of 8% senior secured notes due in 2031. Proceeds were earmarked to retire the company’s 3.2% note due in October 2026, repay debt, and for other general corporate purposes. This was a junk-rate coupon, but it bought time and pushed out maturities.

• In June 2026, FMC announced a $400M minority equity investment from Belgium’s Tessenderlo Group, for a 20% stake. In parallel, the company agreed to sell its India commercial business to Crystal Crop Protection for $252M with all proceeds allocated to debt reduction.

• The company also amended its revolving credit facility to include covenant relief, rescheduled a $200M prepayment under a strategic supply agreement with Corteva, and signed a $114M sale-and-leaseback of its Newark, Delaware property.

All combined, these actions represent a credible path to reducing debt by up to $1 billion. This might not solve the company’s problems entirely, but it marks a significant positive step forward to push bankruptcy off the table and give Brondeau enough leeway and room to operate.

He was the architect of previous transformation. There is no better candidate to clean up the current mess and potentially get a decent takeover bid.

The asymmetry is clear: the market is pricing FMC as an extreme distress case. But with Pierre Brondeau back at the helm, I believe the bankruptcy risks are overblown and the upside multi-baggers completely ignored by general consensus.

The Valuation pessimism.

FMC trades at a P/B of 0.8x, below book value, and at an EV/EBITDA that is roughly 1/2 of the industry average. The combination of dividend cuts, debt load, generic competition, the patent cliff, and negative cash flow has led many analysts to rate the company at a high probability of bankruptcy.

But the market is underweighting Brondeau’s recent actions and ignoring the aggressive transformation. The facts are clear: the agrochemical industry will be forced to consolidate to compete with Asian generics.

The Tessenderlo investment and the company’s bond refinancing have bought 2-3 years of runway. The India subs sale and other asset divestitures are generating real cash for deleveraging.

A strategic buyer, likely a larger Agrochemical firm interested in FMC’s patent portfolio—including Rynaxypyr, CYazypyr, and the diamide platform—along with manufacturing capabilities and Latin American distribution, might purchase the company at a distressed price of $25 to $35 per share. Well below its replacement cost. Private equity is also an option if the debt can be further reduced and the cash flow profile stabilized.

The market consensus overlooks that the downside is already priced in, while the upside is priced at near-zero probability. The optionality lies in exploiting this valuation mispricing.

At 8.1x, FMC trades below its peers’ EV/EBITDA average of 12x. The agrochemical and fertilizer sector saw M&A multiples averaging 14-18x for high-growth and strategically critical assets. For a distressed but valuable entity such as FMC, a buyer should nominally bid up to 12x EBITDA. With Pierre Brondeau's premium included, investors can be confident in an experienced operator who knows exactly what his assets are worth and in an exec with deep relationships across the agrochemical industry who can facilitate a smooth transition.

Most investors and analysts have not fully priced in Pierre Brondeau's “unique premium”. Without him, the company would lack a clear restructuring plan, potentially setting the stage for bankruptcy within 12-18 months. Brondeau's presence alone represents a huge margin of credibility that has yet to be priced in.

Conclusion: A risky optionality bet selling at extreme discount.

FMC Corporation is facing its worst existential crisis. The market consensus has completely abandoned any hope for its future, with many experts comparing its current situation to the fate of drug manufacturers’ patent-expiration crisis in 2016.

The rehiring of Pierre Brondeau represents a premium hedge against the loud bankruptcy noise. That alone constitutes a baseline that the company stock price misses. Brondeau’s restructuring expertise and ongoing, swift debt-reduction push are equally mispriced and ignored in analysts’ reports.

To be fair, FMC is not a clear-cut contrarian discount selling below cash flow or Net Asset. FMC is a seriously distressed entity trying to clean up decades of capital misallocation and debt accumulation for a profitable sum-of-the-parts sale to a deep-pocketed competitor.

Consequently, I will not directly hold the equity itself but mitigate the stock's current risk profile by buying its deeply discounted out-of-the-money call option expiring in 2028.

Why? Because Brondeau is 68 years old, and FMC’s own proxy disclosures show the board explicitly wrestling with succession terms tied to his tenure. Age and energy are non-negligible factors given the scale of energy and effort required to turn what amounts to a sinking ship.

Is Pierre Brondeau the last CEO of an independent FMC Corporation? Much of the proxies language points to that. For a contrarian, risk-tolerant hedger, 2 years of optionality margins of error is a safe bet against extreme uncertainty while maintaining a premium discount in case the turnaround or sale pans out.

Not investment advice. Always consult a trusted investment advisor before buying or selling financial securities. Wall Street is not your Friend.

For nearly a century, mainstream economic history has cast Andrew W. Mellon as the Great Depression’s ultimate villain. As Treasury Secretary, he is routinely portrayed in textbooks for advising “liquidate labor, liquidate stocks, liquidate the farmers,” which is presented as the epitome of callous, hands-off laissez-faire dogmatism.

However, viewed through a modern lens—characterized by compounding systemic failures, structural economic distortions, and unpayable debt overhangs generated by decades of Keynesian interventionism—Mellon’s philosophy demands a rigorous rehabilitation.

Far from being an unfeeling relic of the Gilded Age, Mellon understood a fundamental economic truth that contemporary policymakers have spent trillions trying to avoid: you cannot print, spend, or borrow your way out of a structural credit bubble; you can only delay the clearing process, compounding the final cost.

fee.org

Why Andrew Mellon Was the Best Treasury Secretary the US Has Ever Had

The 1920s Record: Prosperity Without Perpetual Stimulus

As Treasury Secretary (1921–1932) under Harding, Coolidge, and Hoover, Mellon oversaw sharp reductions in top marginal tax rates (from over 70% post-WWI to 24–25%), aggressive debt paydown, and spending restraint.

The national debt fell dramatically while revenues rose as economic activity expanded. Unemployment averaged low single digits for much of the decade; real GDP growth was robust; productivity surged in autos, manufacturing, and consumer goods. This was not a speculative frenzy fueled by easy money but genuine expansion under hard budget constraints and lower tax barriers to enterprise.

thebalancemoney.com 1920s Economy With Timeline and Statistics

The short, sharp 1920–1921 depression that preceded this boom was allowed to quickly liquidate wartime distortions. Recovery followed without massive intervention—the last major episode treated with classical “let the market clear” methods. Mellon’s Taxation: The People’s Business (1924) articulated a coherent philosophy: tax policy must raise necessary revenue, minimize burden on the productive, and remove obstacles to business development. High rates, he argued, bred evasion and stifled growth. The results validated the approach.

The Depression Smear and the Real Doctrine

The infamous “liquidate” quote appears in Hoover’s memoirs, written years later. Historians note that it lacks corroboration in Mellon’s public statements or in contemporary records; Lawrence H. White and others have shown that Hoover likely caricatured Mellon to portray himself as the activist savior against a supposed do-nothing Treasury chief.

Mellon supported Fed rate cuts in 1930, temporary tax relief, and some early stabilization steps. He opposed endless propping up of weak businesses, viewing recessions as necessary purges of speculative excess and inefficiency—consistent with pre-Keynesian understanding that credit-fueled booms distort capital allocation.

The deeper problem in the 1930s was not insufficient intervention but monetary contraction, trade wars (Smoot-Hawley), and inconsistent policy that turned a necessary correction into prolonged collapse.

Mellon’s insistence on eventually balancing the budget amid falling revenues was procyclical and painful, yet the alternative—unlimited deficits and moral hazard—has its own modern track record of bigger, more frequent crises.

Creative Destruction vs. the Preservation of Rottenness

Mellon’s worldview aligned with Schumpeterian creative destruction and Austrian business-cycle insights: artificial credit expansion misallocates resources into unsustainable projects; liquidation reallocates them to stronger hands, lowers inflated costs, restores incentives, and enables renewal by more prudent actors.

This is “market democracy” in action—flushing out mediocrity rather than subsidizing it.

The Mainstream Critique (Keynesian & Monetarist)

To mainstream economists such as John Maynard Keynes, Milton Friedman, and, later, Ben Bernanke, liquidationism was a catastrophic intellectual failure.

Mellon’s stance aligned with classical and some Austrian-influenced thinking of the time. Panics and depressions were seen as medicine after speculative excesses—exacerbated here by 1920s credit expansion and stock speculation, which Mellon and the Fed tried (belatedly) to curb with rate hikes in 1928–1929.

Critics, including emerging Keynesians and Democrats like FDR, portrayed this as heartless social Darwinism that favored the rich. Mellon, a wealthy industrialist with conflicts-of-interest accusations, became a symbol of elite indifference.

Keynesians argue that during a balance-sheet recession, forcing wage and price liquidation causes a lethal deflationary spiral. As prices fall, the real value of nominal debt rises, triggering widespread bankruptcies and total demand destruction.

Later on, the Monetarists, spearheaded by Friedman, argued that by allowing the banking system to collapse, the Federal Reserve inadvertently allowed the money supply to contract by one-third, turning a standard recession into an unprecedented Depression.

Andrew Mellon was Right!

Today’s economy offers an interesting contrast to Andrew Mellon’s prescriptions. Decades of QE, zero rates, and bailouts have inflated serial bubbles (tech, housing, AI infrastructure, speculative microcaps) while enabling a golden age of fraud: dilution-heavy stock promotions, circular financing, related-party tunneling, SPAC hype, crypto boom-and-bust, and zombie firms sustained by cheap credit.

Easy money has not eliminated risk—it has socialized losses, privatized gains, eroded societal trust, transferred wealth, and impoverished the masses.

Andrew Mellon understood that economic pain is an unavoidable law of thermodynamics: when you misallocate capital on a massive scale, the loss must eventually be realized. You can either take the pain up front through a swift, intense market clearance, or drag that pain out over decades through inflation, stagnant growth, and generational debt burdens.

Mellon’s liquidationism was not an act of cruelty; it was the ultimate form of economic realism. In an era currently buckling under the weight of unpayable debts and currency debasement, Mellon’s defense of balanced budgets, sound money, and letting the market find its true floor looks less like an antiquated error—and more like a prophetic warning.

As a wealthy industrialist, Mellon was well placed to recognize the pattern: interventionism preserves “bankrupted elites” and distorts market signals, breeding the excesses that eventually burst.

Although liquidation might be harsh in the short term, it ultimately clears space for genuine value creation in the future.

The caricature of Andrew Mellon served its political purpose in the 1930s, but his ideas are worthy of reconsideration. He was a successful industrialist, banker, and policymaker who delivered measurable prosperity through discipline laissez faired policies, and whose diagnosis of boom-time excesses remains more than prescient in today's dominant interventionist consensus.

Sources:

Core Historical & Biographical Sources

• Wikipedia: Andrew Mellon — Comprehensive overview of his career, tax reforms, Depression-era actions, and the Hoover quote attribution. Excellent starting point with citations. en.wikipedia.org/wiki/Andrew_Mellon

• U.S. Department of the Treasury: Andrew W. Mellon (1921–1932) — Official biography highlighting debt reduction, tax policy, and philosophy of balanced budgets. home.treasury.gov/about/history/prior-secretaries/andrew-w-mellon-1921-1932

• ITR Foundation: Andrew Mellon’s Pro-Growth Fiscal Policy (2024) — Strong defense of Mellon’s 1920s tax cuts, spending restraint, and economic outcomes (GDP growth, unemployment, debt reduction).itrfoundation.org/andrew-mellons-pro-growth-fiscal-policy

Liquidationism Debate & Scholarly Analysis

• Lawrence H. White, “Did Hayek and Robbins Deepen the Great Depression?” (Journal of Money, Credit, and Banking) — Key debunking of the “liquidationist myth,” showing Mellon supported some easing and that the extreme quote is largely Hoover’s framing. Essential for rehabilitation. Related discussion: macromarketmusings.blogspot.com/2008/05/debunking-liquidationist-myth.html

• Herbert Hoover Memoirs (quoted widely) — Source of the famous “liquidate” passage; context shows Hoover’s self-portrayal. Cross-referenced in Econlib and other analyses.

Economic Data & 1920s Context

• Federal Reserve History: Andrew W. Mellon — Covers tax reforms, interest rate views, and transition to Depression. federalreservehistory.org/people/andrew-w-mellon

• FRED (St. Louis Fed) Data — GDP growth, unemployment, national debt, and inflation series for 1920s vs. later periods (search “GDPA”, debt metrics). Visual timelines of Roaring Twenties prosperity.

Modern Critiques & Parallels

• Paul Krugman, “The Mellon Doctrine” (NYT, 2011) — Prominent invocation of Mellon as cautionary tale against austerity; useful for contrasting views. nytimes.com/2011/04/01/opinion/01krugman.html

• Broader readings on bubbles, moral hazard, and creative destruction: Austrian/Schumpeterian perspectives (e.g., White’s work on monetary institutions); analyses of post-2008/2020 interventions, zombie firms, and financialization.

Additional Visual & Archival Materials

• Public-domain portraits of Mellon (e.g., Library of Congress/Harris & Ewing photos, 1920s).

• Roaring Twenties timelines/infographics illustrating growth metrics under Mellon policies.

Quick “bust-up” analysis: Julong Holding Limited () is a zero!

Julong Holding Limited, a Beijing-based provider of smart infrastructure engineering and intelligence-integrated technology solutions, went public on June 26, 2025, listing its Class A ordinary shares on the Nasdaq Capital Market under the ticker symbol “JLHL.”

The company priced its IPO at $4.00 per share, offering 1,250,000 shares to raise approximately $5.0 million. The offering was underwritten by US Tiger Securities.

Julong Holdings Limited fits the characteristics of a stereotypical China hustle pump-and-dump scheme:

• A shady China-based VIE shell entity registered in the Cayman Islands and listed on the US market.

• A CEO who controls 93% of the company's ordinary shares and 99% of voting power in all corporate matters.

• Untrustworthy and unreliable financial reporting.

  The company claims to have earned $3.6M in profit and shows $7.4M in net cash on its balance sheet. Meanwhile, the Cash flow statement is structurally misaligned with reported earnings, showing only $36,000 in operating cash flow and $38,000 in Free Cash. Such a diametrical disconnect between cash flow and net earnings is unbecoming of a serious company and flags either pure fraud or unprofessional neglect by the company’s CFO and auditors.

• Fortuna CPA, Inc, the company's auditor, is of questionable repute.

  Its list of clients raises serious red flags in the light of their financial and valuation records: ZK International Group Co., Ltd. ; Global Tech Industries Group, Inc. $GTII; Fly-E Group, Inc. , NetSol Technologies, Inc. : All of the aforementioned names have either gone bankrupt, been delisted, or are currently trading at or near all-time lows.

• A ridiculously cheap-looking corporate website written in Mandarin script for a Western audience…

  

  English, do you speak it? ( website)

  In all, the whole thing reads like a ridiculous joke even though vast sums of money are involved. This is a company valued at almost $250 million. The company’s investors deserve at least a semi-decent English-translated website for the devil’s sake!

The stock’s trading volume has recently exploded on no known news, with 91 million shares “traded” on a tiny 1.2 million-share float.

The usual suspects’ promoters on social media have been raving about its recent 317% spike in value, high-fiving each other and promoting the stock to their “students” and trading community.

If history is a precedent, may likely implode within the next few weeks as its undertakers eventually exit out with their bounty before they get halted.

It is a real race against time for the schemers given the SEC's recent approval of rule IM-5101-4, a new regulatory framework that enables a faster delisting of manipulated stocks. This new development should lead to a rapid unraveling of fraudulent stocks.

The above-mentioned facts should be sufficient to consider a “ Vampirestock” condemned to crash to its fair value: zero.

The company is a worthless shell issued solely to pirate wealth out of gullible and naive Western and Asian investors.

In a normal world, the story should end here: a “vampirestock” ramp-and-dump operation, like hundreds of others, issued and promoted by criminal outfits and unscrupulous underwriters.

But there is a lot more to the Julong Holding story than meets the eye.

In fact, there is a bigger fish in the pond, a listed whale ruling the sea and most deserving of attention, especially in light of recent regulatory developments in China: Up Fintech Holdings, the holding company behind US Tiger Brokers, and JULONG HOLDING’s underwriter.

Up Fintech Holdings: A value trap and a penny stock promoter.

1-Origin:

Up Fintech Holdings (TIGR) operates Tiger Broker, an online brokerage focused on Chinese investors in New Zealand, the Cayman Islands, Singapore, the United States, and other international markets. Through its Tiger Trade platform, investors can trade stocks, options, warrants, and other financial instruments. Tiger Broker also provides investor education, community engagement, and IR platform services.

Tianhua Wu founded the company in 2014 after leaving NetEase to develop a better mobile trading app for Chinese investors interested in US stocks. Wu was inspired to start the company after receiving stock options and finding existing US stock trading platforms cumbersome and difficult to use.

Jim Rogers' early sponsorship was instrumental in helping the company achieve unicorn status before going public in 2019. Rogers was a key early investor, participating in several of its primary funding rounds, including Series B and Series C. As a legendary Wall Street figure and drew interest from other major institutional investors such as Xiaomi and Interactive Brokers.

Interestingly, the company was even on the receiving end of laudatory praise from “short boutique” Kerrisdale Capital in February 2021, which published a bullish report, calling Tiger Brokers “the Robinhood of China” and praising its rapid expansion and capture of overseas Chinese retail investment.

2-The regulatory overhang comes home to roost.

Up Fintech Holdings (Nasdaq: TIGR), along with Futu Holdings Limited ( Nasdaq: FUTU) and Long Bridge Securities, has recently made headlines1 for its role in illegally facilitating Chinese citizens’ trading in US securities, which is tantamount to money laundering in the CCP’s tight capital-control financial system. The stock collapsed 25% on the news and is now down 55% Y/Y.

On May 22, 2026, the CSRC Beijing Bureau formally concluded its investigations into UP Fintech’s China-based subsidiaries, finding that they engaged in unlicensed cross-border securities business and illegal fund and futures activities in mainland China. This enforcement was coordinated across eight Chinese government departments simultaneously — the CSRC, Ministry of Public Security (criminal enforcement), Ministry of Industry and Information Technology (internet blocking), People’s Bank of China (payment controls), National Financial Regulatory Administration, State Administration of Foreign Exchange, Cyberspace Administration of China, and additional coordinating bodies.

The combined RMB 411.2 million penalty (~USD $58.7 million) against Tiger’s subsidiaries, plus personal sanctions against CEO Tianhua Wu, was not an isolated action. Futu Holdings and Longbridge Securities received simultaneous enforcement under the same framework, signaling a sector-wide, coordinated regulatory closure.

For decades, Up Fintech operated in a regulatory grey zone that has undermined the company’s growth rate and investors’ confidence. That is particularly evident when the company's valuation is compared with that of popular trading applications such as Robinhood, whose stock has risen nearly 200% since its IPO. Interactive Brokers, another popular Western trading platform, has risen by up to 400% in five years, while has lost more than 50% of its value in a year and close to 70% over five years.

3-The Discovery: A “quasi” Illegal Business Model?

While hailed as a unicorn by institutional investors and benefiting from the support of Wall Street legends like Jim Rogers and Xiaomi’s founder Lei Jun, the company has always operated in the crosshairs of the law.

Behind its veneer as the world's manufacturing center, China remains a top-down authoritarian regime ruled through the fits and moods of the CCP apparatchiks.

Recently, the government has intensified its crackdown on cross-border capital flights to stem record outflows, which have reached an estimated $1 trillion. Driven by a weakening domestic economy, declining real estate values, and the search for global diversification, citizens have increasingly sought ways to move money offshore.

To choke off illegal and quasi-legal capital flight channels, Beijing has implemented several strict enforcement measures and regulatory actions.

• Tiger was flagged by the CSRC as an unauthorized platform as far back as 2016.

  A crucial element of the overall governance picture is corroborated by a 2016 South China Morning Post report archived on Tiger Brokers’ own website, is that the recent CSRC’s concerns about Tiger Brokers’ cross-border securities activities are not a sudden 2026 revelation.

In July 2016, the CSRC explicitly identified Tiger Brokers (alongside Futu Network and Jimu Stock) as ‘unauthorized platforms’ for transacting financial instruments involving mainland Chinese investors in overseas securities.

The CSRC issued a formal risk alert at that time, stating: ‘A number of mainland internet companies have emerged recently. They cooperate with overseas brokerage companies, providing channels and services for domestic investors to trade the overseas equity market. These activities lack legal protection.’

Tianhua Wu and UP Fintech leadership knew, from the company’s earliest operating days in 2016, that the CSRC considered its mainland client acquisition and cross-border trading facilitation to be operating in an illegal grey zone.

• On December 30, 2022, the China Securities Regulatory Commission (CSRC) officially announced that UP Fintech Holding Limited (the parent company of Tiger Brokers) had violated domestic laws by conducting unlicensed cross-border securities activities.

The CSRC took specific enforcement steps during this initial crackdown by:

1. Banning New Client Acquisition: UP Fintech was ordered to immediately cease soliciting or accepting new clients from mainland China.

2. Banned New Account Openings: The regulator prohibited the firm from opening any new accounts for domestic mainland investors.

3. On-Site Inspections: The CSRC dispatched regulatory officers to conduct direct, on-site inspections of the firm’s operations.

The company continued, expanded, and benefited financially from its activities for nearly a decade — fully aware of the risk entailed through its 2019 NASDAQ listing, the 2022 FINRA communications violations, the 2025 FINRA AML censure, until the 2026 CSRC formal enforcement.

Basically, Tiger Brokers had been operating in a regulatory grey zone in China long before and after going public. All the while, the company's execs kept its investors and shareholders unaware of the compliance risks and potential negative impact of government enforcement on the company's operational model and future earnings.

The May 2026 CRSC enforcement measures banning the company's operations inside mainland China were therefore not a matter of " if" but rather a matter of " when."

4-The Undervaluation narrative.

At face value, screens as a classic deep-value opportunity for “uglystocks” hunters.

This undervaluation has been recognized by a number of financial analysts in popular Newsletters, in investment websites, and even some innovative and popular “Value Investing” AI Valuation platforms.

The company’s trailing P/E is around 7.5x, with a reported net profit of $114M. The stock sells below Net Assets. Its balance sheet shows $4.49 billion in cash and $66.17 million in debt, with a net cash position of $4.43 billion, or $24.87 per share.

The stock has been crushed by 50% from its 52-week high amid broader China -related sentiment.

Many investors have deemed the CSRC’s regulatory action overblown, citing the company's global diversification pivot and growing revenue as evidence.

In Q1 2026, retail net asset inflows broke historical records; surpassing $2 billion in a single quarter, with 90% coming out of China.

While the CSRC penalty completely wiped out Q1 2026 profitability to a net loss of $26.9M ( compared to GAAP net profit of $30.4M the prior year) and triggered panic selling and class action investigations across the investment landscape, management has reiterated confidence in its business model by authorizing a $50M share repurchase program running from June 2026 to June 2027.

Up Fintech basically trades like a dying business relative to its peers and to its own growth rate. This may be considered a rare opportunity for investors to purchase a dominant Asian brand at a cheap premium. Its Fortress's balance sheet and core operating momentum provide a margin of safety for patient investors focused on the earnings discount.

Wall Street consensus estimates the stock at a target price of $8.12 to $8.58 per share, with some DCF models assigning a baseline intrinsic value of $12.00 to $21.00 per share.

5-The Value “ crapers” thesis.

5-1 The gamification conundrum

Playing (with) the markets: Gamification and playfulness in brokerage platforms

Research into “Gamification brokers”2 has yielded controversial societal and financial issues that have alarmed regulators.

“Gamification brokers” refer to online trading platforms, often “neo-brokers,” that incorporate video game-like features—such as points, badges, leaderboards, and digital confetti, to encourage users to trade more frequently. While these apps boost engagement and learning, they are closely scrutinized by regulators for nudging investors toward riskier, more impulsive decisions.

Tiger Brokers (UP Fintech) was famously modeled after Robinhood3 to offer Chinese retail investors a sleek, mobile-first platform for trading international equities. The App is popular with Chinese-speaking (and increasingly international) retail users trading US equities, options, HK stocks, and more.

Tiger Brokers’ features include trending/heatmaps, “discover” tools, hot stock/ETF rankings, community discussions, AI-assisted insights (TigerGPT), and low barriers (e.g., $1 minimums, margin financing).

These tools surface and encourage trading in momentum-driven or speculative names — exactly the environment where mediocre or questionable penny stocks, biotechs, meme plays, and low-float US-listed microcaps thrive.

The economics reinforce this: revenue depends in large part on commissions, margin interest, and securities lending. High turnover in volatile, low-quality names drives the engine.

While discloses standard penny stock/OTC risks (manipulation, fraud, pump-and-dump potential, illiquidity) in its agreements — a tacit admission of the activity its platform hosts — the model benefits from that very volume.

In an article titled: The Gamification of Investment: A comparative approach between the US and EU, Tommaso Mambrini states that:

“Platforms like Robinhood, Webull, and crypto exchanges are increasingly turning financial investing into a game, using elements taken from the gambling and video game sector such as nudging, interface designs that subtly steers users toward specific actions, confetti animations that celebrate completed trades, badges that mark milestones or achievements and more.

These techniques, collectively known as digital engagement practices (DEPs), are designed to draw users' attention, lower psychological barriers, and attract new investors. But DEPs are also encouraging behavioral biases that can lead to impulsive trades.”

Tiger Brokers is not a neutral utility like a pure institutional broker; it is optimized for active, speculative retail users who often gravitate toward the riskiest segments of the US market, just like Robinhood, the company most recognized for popularizing “ gamification brokerage” to retail investors in the US. On top of its quasi-illegal China-centric business model, Tiger Brokers' high-engagement casino-like features have attracted the ire of regulators.

5-2 The elephant in the room: The Micro-cap Pennie stocks underwriting business.

Tiger Brokers, a VampireStocks underwriter

US Tiger Securities, Inc. — the FINRA-registered, New York-based subsidiary of UP Fintech, and one of the most active book-running managers of small Chinese-company U.S. IPOs — has become the focal point of a pattern of alleged market manipulation that extends far beyond any single offering.

Recently, the retail investigative platform Reddit (“r/vampirestocks”) brought intense scrutiny to UP Fintech’s US-based underwriting arm, US Tiger Securities. The community alleges that the firm operates as a primary underwriter and clearing pipeline for microcap "pump-and-dump" penny stocks, exposing retail investors to catastrophic losses.

In a detailed November 2025 post on r/VampireStocks (”Beware of any stock tied to US Tiger Brokers!”), users highlighted TIGR’s US-facing entities as underwriter or key service provider for multiple collapsed or highly questionable names. The post explicitly ties recent collapses — such as Smart Digital Group ($SDM) — to this involvement and lists prior examples of sharp drawdowns in stocks associated with the platform’s operations:

• TRSG (TUNGRAY TECH Inc.): Down ~68%

• YMT (YIMUTIAN Inc.): Down ~72%

• FGL (FOUNDER GROUP LIMITED): Down ~90%

• DKI (DARKIRIS Inc.): Down ~89%

• NIPG (NIP GROUP Inc.): Down ~84%

These are presented as part of a pattern of “questionable and fraudulent stock schemes” enabled through the brokerage’s services.

The allegations are anchored in verifiable regulatory action: FINRA fined US Tiger and TradeUP a combined $950,000 for AML program deficiencies. Specifically, between late 2019 and mid-2023, the firms’ anti-money laundering controls were “not reasonably designed to detect and report potentially suspicious transactions” in thinly traded, low-priced securities. They also failed to conduct appropriate due diligence on correspondent accounts for foreign financial institutions.

r/VampireStocks focuses on exposing pump-and-dump schemes, Chinese-linked ramps, and stocks that “suck” retail capital. The post frames TIGR’s US brokerage as a conduit that serviced the very omnibus accounts enabling volume in these names. While not every allegation is independently verified in court, the FINRA settlement provides hard evidence of compliance gaps precisely in the low-priced securities segment.

The following list highlights microcap and small-cap initial public offerings underwritten or co-managed by US Tiger Securities that have experienced catastrophic crashes:

1. Smart Digital Group Limited

• IPO Date: May 5, 2025

• IPO Price: $4.00 per share

• Peak vs. Valley: Driven by low-float dynamics and aggressive promotions, the stock was pumped to an intraday high of $29.40 on July 28, 2025.

• The Crash: On September 26, 2025, the stock collapsed 86.4% in minutes, closing at $1.85 per share. The crash triggered an immediate, prolonged SEC trading suspension due to “potential manipulation” carried out by unknown operators via social media networks. It is now the subject of a massive class-action lawsuit naming US Tiger Securities as a primary defendant for failing to disclose the risk of structural manipulation.
  

2. DarkIris Inc. ( New ticker)

• IPO Date: August 11, 2025

• IPO Price: $4.00

• The Setup: US Tiger Securities acted as the sole bookrunner, raising a tiny $6.9 million in gross proceeds.

• The Crash: Following the classic low-float microcap script, the stock experienced massive volatility post-listing before losing the vast majority of its trading value, leaving retail investors with severe losses. It is actively cited in litigation as a benchmark example of Tiger’s microcap pipeline.

3. Top KingWin Ltd ( New ticker)

• IPO Date: April 2023

• IPO Price: $4.00 per share

• The Lifecycle: This training and advisory firm was one of the early, classic examples of the US Tiger microcap pipeline. Post-listing, it experienced temporary, vertical upward spikes on zero fundamental corporate news, followed by an aggressive, permanent down-draw into deeply distressed penny-stock territory (trading well under $0.50).

4. Agroz Inc.

• IPO Date: October 1, 2025

• IPO Price: $4.00

• The Crash: Unlike the stocks that pump before they dump, Agroz struggled almost immediately upon entering public markets. It closed down roughly 22% shortly after its listing window and continued its downward trajectory toward penny-stock status as retail liquidity dried up.

The Compliance Connection: These specific stock failures are heavily tied to regulatory findings. In April 2025, FINRA formally censured and fined US Tiger Securities (alongside its affiliate TradeUP Securities) specifically for failing to maintain proper anti-money laundering (AML) programs. FINRA noted that the firm failed to properly monitor, detect, and report suspicious cross-border trading activity in exactly these types of thinly traded, low-priced securities.

Here is the consolidated master list of microcap and small-cap stocks underwritten, co-managed, or distributed through the US Tiger Securities/Tiger Brokers pipeline that I have compiled, along with their official stock ticker symbols. The list is not exhaustive.

This pattern of engaging in low-priced securities trading and small IPOs, which comes with compliance gaps, highlights an operational risk that makes TIGR -3.98%↓ a potential value trap. Although the stock appears inexpensive based on multiples, these could conceal hidden liabilities stemming from supporting speculative or questionable activities, leading to persistent regulatory, reputational, and volume-related challenges.

Conclusion: Up Fintech Holdings valuation multiples hide its true Nature.

Julong Holding Limited is down 23% in pre-market as of today ( Monday July 13th ). I expect the stock to eventually follow the trajectory of all the stocks issued and promoted by US Tiger Securities, the US brokerage arm of Up Fintech Holdings ( ).

Talking is cheap, writing even more so. Many financial analysts have recklessly highlighted Up Fintech as a rare bird, a strong brand equity popular Financial App that can successfully pivot out of its recent regulatory issues within the heavy handed Chinese Financial market.

I disagree with their thesis. Unlike other popular financial apps that merely gamify their operations to attract unsophisticated retail traders, the case against Up Fintech rests on its long history of issuing and promoting “Vampirestocks.” Thus, the case against Up Fintech leads to a clear conclusion: Up Fintech Holdings (TIGR -3.98%↓) is a structurally impaired asset.

The low valuation multiples are completely justified because the market is factoring in a toxic underlying revenue mix, persistent legal defense costs, and a business model structurally built on underwriting high-risk microcap promotions.

True value investing relies on buying a mispriced stream of future cash flows; buying TIGR means buying a compounding stream of regulatory penalties and litigation.

VERDICT: AVOID!!!!!!!

( Let’s all watch and follow for a live case study of Speculative vampirism.)

I expect US Tiger Brokers to speed up its issuance of micro-cap junk in the future, given the cutoff of its profit center around its formerly China-exit, money-laundering Silk Road.

( Not Financial advice. Always consult a professional investment advisor before buying or shorting a stock. I write for my own intellectual stimulation. Wall Street is not your friend.)

“The three stocks sellers”

Introduction to The Game: “Get Rich or Ipo trying!”

A distinctive yet often overlooked aspect of the dominant Financial Regime is the emergence of an elite class known as Fiat Oligarchs—individuals and organizations whose wealth and power mainly stem from issuing, accumulating, and selling Fiat Financial products and securities.

Because monetary policy incentivizes credit flow into speculative and structurally unviable ventures where profitability is secondary to orchestrating public share offerings, the industry of “ Get Rich or IPO trying” has exploded to unheard-of heights in recent years.

What has emerged is not a functioning capitalism rooted in productive value creation, but rather its corruption into excessive financial engineering.

As credit-capital has artificially sustained the financial economy, securities holders’ wealth has increased faster than the net returns of their underlying businesses whilst consumers and real producers have been left to bear the burden of higher prices.

This “Fiat” Financial system has thus morphed into a mechanism for wealth transfer, in which securities issuers dump their overvalued, often fraudulent, and zombified stock issues onto the public exit-liquidity market.

Rather than fulfilling its stated mission of democratizing the ownership of industries across all segments of society, the financial market has been essentially bastardized into a welfarist and parasitic means of wealth extraction for a tiny class of securities undertakers.

1- CoreWeave, Inc., a pivot hustle?

The story of CoreWeave is intimately tied to two failed companies that preceded it: Hudson Ridge Asset Management LLC and Atlantic Crypto. Without beating around the bush, a clear question must be asked: Will CoreWeave be any different?

From January 2013 to January 2018, Michael Intrator served as co-founder and CEO of Hudson Ridge Asset Management, LLC, a fundamental, systematic natural gas hedge fund.

Natural gas trading is notoriously volatile, and Hudson Ridge attempted to algorithmically and systematically trade natural gas futures. Unfortunately, the company became a casualty of the post-2015 energy market oversupply of NG. The prolonged shale boom suppressed volatility, compressing trading margins. The cost of capital and data infrastructure began to outpace returns, forcing Intrator to quietly shut down the operations.

In September 2017, as Hudson Bridge was reeling from the effects of the long NGs bull market, Intrator teamed up with fellow energy traders Brian Venturo and Brannin McBee to chase after a new kind of digital volatility: Ethereum mining. They founded Atlantic Crypto Corp.

The trio bought thousands of Graphics cards ( Mostly Nvidia GPUs), built custom rigs and leased warehouses with cheap power access. At its peak, Atlantic Crypto was one of the largest private GPU inventories in the USA.

The 2018 cryptocurrency crash obliterated Ethereum's price, driving mining profitability to near zero. Compounding this, the Ethereum network was openly preparing to transition from GPU-heavy proof of work to proof of stake, which would render GPU mining completely obsolete.

The company rebranded as CoreWeave in 2019 and pivoted its hardware stack toward GPU rendering for visual effects studios, then toward AI compute when ChatGPT's 2022 launch triggered a global GPU shortage that hyperscalers couldn't meet fast enough.

The company went public on March 28, 2025, at a price of $40 per share (raising $1.5 billion, scaled back from the initial target of $40 billion) and listing under the ticker CRWV. The stock later surged (peaking near $119 in mid-2026) before settling around $95–96 as of late June 2026, implying a market capitalization of roughly $50+ billion.

“ The three founders instantly became Billionaires.”

2-From failed commodity traders to hyperscaler commodity billionaires.

CoreWeave’s execs have seemingly gone from nearly burning down a Manhattan office building while plugging Nvidia GPUs to mine Ethereum, to the status of Billionaires without ever earning a profit in their operating business!

How was that possible?

Short seller Kerrisdale Capital (September 2025) has characterized CoreWeave as a “debt-fueled GPU rental business with no moat,” arguing it is undifferentiated, financially engineered rather than innovative, and that lenders capture front-loaded returns while equity is left with residual claims on rapidly obsolescing hardware.

Famed investor Jim Chanos has called the company a risky leasing and finance company rather than a technology business. He views Coreweave (and similar “neoclouds”) as middlemen that buy chips from Nvidia and rent them out to hyperscalers. He therefore argues that premium valuation multiples should not apply to a company that does not build AI models.

The stock dropped 11% on July 1st after Meta announced plans to establish a cloud infrastructure division to sell surplus AI computing power.

The market declined amid concerns that a large hyperscaler such as Meta might soon rival independent “neocloud” providers. This vulnerability aligns with Kerrisdale Capital's calls and Jim Chanos’ criticisms of the company as a debt-funded GPU real estate operation lacking a competitive moat.

The continuous insider share exit pressure is beginning to make sense.

Pre-IPO cash-out: All three founders pocketed over $150 million apiece by cashing out shares ahead of the IPO. Collectively, the founders and early investor Jack Cogen sold $660 million of CoreWeave stock before the March 2025 IPO, and another $640 million since.

The company’s execs have sold over $2.3 billion of stock since the IPO lockup expired in August 2025. Its institutional backers, such as Magnetar Financial, have sold over $5.5 billion in stock, cutting its stake in half.

3-It’s a small club and you ain’t in it.

1-Micheal Intrator: The founder.

Is the CEO and co-founder of CoreWeave ( ) and its most recognizable public figure. He embodies the company’s multiple pivots from its origin as an Ethereum miner into today’s AI hyperscaler infrastructure.

Michael Intrator has an estimated personal fortune of $6.7 billion, according to the latest figures tracked by Forbes. This represents an adjustment from mid-2025, when a rapid post-IPO stock surge briefly drove his net worth to an estimated $10 billion. Still, the scale and the speed of the wealth acquisition are staggering. In less than a decade, Michael Intrator went from a failed Natural Gas trader to a Billionaire in the novel AI Real Estate business.

Some would see through his journey a story of resilience and opportunity taken; others will judge him as an opportunistic theme rider waving through an artificial narrative built on easy-credit access for the AI/adjacent industry.

Nevertheless, Michael Intrator appears to be the most gun-shy stock-selling insider among his co-founders.

Estimated total sales post lock-up are valued at around $600M with the bulk of his fortune still tied to his holding of nearly 10.4% of the company’s shares outstanding.

2-Brian Venturo

Chief Strategy Officer, co-founder. Got his start at Intrator's hedge fund after cold-calling Intrator every morning at 6 a.m. for five months until Intrator finally answered. Forbes estimates his ownership at roughly 6% of the company.

Per Forbes' September 2025 report, he is listed with a net worth of roughly $1.4 billion. He has cashed out an estimated $1.3 billion by selling about 13.5 million shares since the company's public debut. Brian Venturo has filed a total of 467 insider trades since 2021. His most recent trade was a sale of 15,380 shares made on July 1st, 2026.

3-Brannin McBee

Chief Development Officer, co-founder. Brannin McBee is one of our co-founders and has served as our Chief Development Officer since March 2024. He has an estimated net worth ranging between $2.2 billion and $4.7 billion.

From September 2017 to March 2024, Mr. McBee served as the company’s Chief Strategy Officer. Previously, he worked as a Proprietary Trader at Active Power Investments, a company in the North American Natural Gas, Power and Agriculture markets from April 2020 to January 2021. From March 2017 to August 2018, Mr. McBee was Vice President at Fourth Floor Coastal LLC, an exploration and production company in the oil and gas industry. Prior to that, from January 2013 to January 2018, he was a proprietary trader at Windy Bay Power LLC, a commodity-focused hedge fund. Mr. McBee earned a B.S. in Finance from the University of Colorado Boulder.

Has been one of the most active insider sellers, offloading over $57 million in stock in a short window, and is named as a defendant in the pending securities fraud suit.

Jack Cogen: Early believer, early exiter.

Jack Cogen was a director and early investor in CoreWeave. He was an early investor in Atlantic Crypto, which ultimately shuttered / pivoted into becoming Coreweave.

Coreweave went public in 2025 at an approximately $23 billion valuation; Cogen owned approximately 5% of the company. Jack D Cogen has an estimated net worth of at least $1.6 Billion, is a private investor in early-stage companies. Before that, he was the founder and CEO of greenhouse gas asset manager Natsource. He was also a director at natural gas hedge fund Hudson Ridge Asset Management, where two of CoreWeave’s cofounders worked.

Jack Cogen has sold an estimated total of 8.4 million shares of stock since 2021, bringing his total sales value to approximately $753 million.

Over the span of just a few days in May 2026, Jack Cogen cashed out exactly 2M shares for a total value of $221M.

He also chose not to renew his seat on the Board of Directors and effectively resigned as a Director on June 8th, 2026.

Magnetar Financials:

is a multi-product, multi-strategy alternative asset management firm based in Evanston, Illinois. The firm was founded in 2005 and invests in alternative credit and fixed-income, quantitative investing, venture, and fundamental and event-driven investing strategies

Magnetar Financial is the largest institutional investor in CoreWeave, owning a multi-billion-dollar stake built from early-stage convertible notes and major debt financing. Magnetar has been a crucial backer, helping fund CoreWeave’s pivot from crypto mining to specialized GPU cloud computing.

Magnetar invested $50 million in convertible notes as early as 2021 when CoreWeave was focused on Ethereum mining.

In 2023 and 2024, Magnetar partnered with Blackstone to lead multi-billion-dollar debt and credit facilities to help CoreWeave rapidly expand its data center footprint.

When CoreWeave (NASDAQ: CRWV) went public, Magnetar’s initial $50 million investment grew into a massive equity stake worth over $12.5 billion.

Although executives initially stated they had no plans to sell, SEC filings revealed that Magnetar and its affiliates later divested hundreds of millions of dollars in CoreWeave shares, while retaining a majority of their holdings.

Magnetar Financial has reportedly sold more than $5 Billion worth of stock in the AI infrastructure company, reducing its stake by 1/2 since the IPO lockup expiration.

CoreWeave Inc. might be a relatively new company to most investors, but its origin and its founders’ ties can be traced to an unknown natural gas commodity trading entity named Hudson Ridge Asset Management in 2013.

The story of a failed Natural Gas prop firm turning into a multi-billion-dollar AI infrastructure company would be the stuff of legend were it not for its questionable business model and suspect capital structure.

The concentration of related-party circular transactions and links with financiers of doubtful repute involved in past financial scandals, as well as aggressive insider stock sales, raise significant issues about the economic validity of the entire enterprise and even mark the company as a potential scheme for its connected parties’ share-exit enrichment.

A small “ gang” of former commodity traders/financiers has essentially gotten rich by successfully riding the AI hype and left enough juice in the bag for retail to hold.

It is a small club indeed, and you weren’t invited the first time around. Will you take the bait for a second go around?

4-Red flag! The circularity problem!

CoreWeave, Inc.'s aggressive insider share exit is not a random coincidence; it is just a tree that hides a venomous snakes filled forest. But the issue of related-party circular financing warrants a thorough breakdown. My short perspective could not possibly do the matter Justice.

https://io-fund.com/ai-stocks/nvidia-coreweave-nebius-circular-financing-gpu-boom

AI infrastructure financing, An extension cord plugged into itself?

Critics have explicitly compared the CoreWeave-Nvidia relationship to the telecom bubble of the late 1990s, in which vendor financing masked weak underlying demand.

The mechanics: Nvidia owns roughly 7% of CoreWeave and supplies it chips, which CoreWeave then rents largely to Microsoft and OpenAI — two of Nvidia’s own largest direct customers.

In September 2025, Nvidia committed to purchasing up to $6.3 billion of CoreWeave’s unsold cloud capacity through April 2032 — effectively acting as a financial backstop for its own customer/portfolio company.

CoreWeave’s own prospectus discloses extensive related-party transactions: Magnetar funded early convertible notes, Nvidia is simultaneously a supplier and an equity holder, and OpenAI’s capacity contracts were partly paid for with CoreWeave’s own private shares.

OpenAI invested $350 million into CoreWeave via private placement at the same time it was signing an $11.9 billion compute contract, a deal later expanded to roughly $22.4 billion in total commitments through 2031, with CoreWeave financing a dedicated $2.6 billion debt facility specifically to build the infrastructure for that same contract, using the contract itself as loan collateral.

Legendary short-seller Jim Chanos has flagged the deeper assumption underpinning all of it: Nvidia’s six-year depreciation schedules for GPUs are, in his view, unrealistic given the pace of chip obsolescence, and if the hardware loses value in three to four years instead, CoreWeave and peers like Oracle face what he calls “massive financial risk.”

Every dollar of “investment-grade” CoreWeave debt rests on two unproven assumptions: that hyperscaler demand for capacity is durable rather than circular, and that yesterday’s Nvidia silicon retains tomorrow’s collateral value. Both assumptions are, not coincidentally, the same assumptions that made the dot-com fiber-optic buildout look rational in 1999.

CoreWeave's stock (NASDAQ: CRWV) tumbled nearly 14% after a Bloomberg report revealed Meta Platforms is developing a cloud business to sell its excess AI computing capacity. This news sent specialized AI infrastructure providers—including CoreWeave and Nebius Group—sharply lower.

5-Trivia: You can tell a person by his friends; you can tell a company by its backers.

Magnetar Capital, CoreWeave, Inc. largest institutional backer, faced major controversy for its role in the 2008 financial crisis through a strategy dubbed the “Magnetar Trade.” The hedge fund allegedly helped create and finance risky Collateralized Debt Obligations (CDOs) while simultaneously betting that these same investments would collapse.

The Magnetar Trade generated significant backlash and media scrutiny, most notably through an investigative series by ProPublica. Critics accused Magnetar of intentionally encouraging investment banks to bundle the riskiest, lowest-quality subprime mortgages into CDOs.

Because Magnetar had protected itself against losses by purchasing credit default swaps, it stood to make massive profits when the housing market inevitably crashed and the CDOs became worthless:

“ In late 2005, the booming U.S. housing market seemed to be slowing. The Federal Reserve had begun raising interest rates. Subprime mortgage company shares were falling. Investors began to balk at buying complex mortgage securities. The housing bubble, which had propelled a historic growth in home prices, seemed poised to deflate. And if it had, the great financial crisis of 2008, which produced the Great Recession of 2008-09, might have come sooner and been less severe.

At just that moment, a few savvy financial engineers at a suburban Chicago hedge fund helped revive the Wall Street money machine, spawning billions of dollars of securities ultimately backed by home mortgages.

When the crash came, nearly all of these securities became worthless, a loss of an estimated $40 billion paid by investors, the investment banks who helped bring them into the world, and, eventually, American taxpayers.

Yet the hedge fund, named Magnetar for the super-magnetic field created by the last moments of a dying star, earned outsized returns in the year the financial crisis began.

How Magnetar pulled this off is one of the untold stories of the meltdown. Only a small group of Wall Street insiders was privy to what became known as the Magnetar Trade.”

The Magnetar connection is a serious red flag that ought to be a major issue of concern for potential investors.

6-Conclusion: CoreWeave, Inc., An unprofitable exit liquidity on the edge of discovery.

CoreWeave, Inc. () fits the “fiat oligarchy” lens particularly well. The company has benefited from a series of macroeconomic and speculative themes that have helped it grow into an influential AI hyperscaler and infrastructure provider and to sign multi-billion-dollar contracts with giant tech companies such as Microsoft, Meta, and OpenAI.

Loose post-pandemic monetary conditions, abundant venture and growth capital, and the powerful AI narrative enabled rapid scaling, leading to lofty private valuations and culminating in a successful IPO.

Its small cadre of founders—most of whom had transitioned from failed energy trading and crypto mining ventures—has captured billions in paper wealth on liquidity-driven hype while retaining decisive voting control.

With a combined net worth hovering around $21 Billion, they have been the clear winners by effectively capturing the AI narrative in their stock holdings and selling to the public despite their company’s derelict capital structure, mediocre earnings, and questionable related-party circular transactions.

In fact, there is high uncertainty about the company’s ability to become profitable in the near future, and the stock has even begun to feel the effects of the winding-down AI bubble.

CoreWeave, Inc. is now defending a federal securities fraud class action alleging it concealed known construction and supplier risks from public investors during the same window when insiders were selling — resulting in a roughly 34% stock decline and a $14 billion market-cap loss for the shareholders left holding the bag.

While it is clear that CoreWeave's equity holders are betting the entire enterprise on hyperscaler demand remaining durable and on GPU collateral retaining its value for six-plus years — an assumption contested by credible skeptics — the people who built the company have already extracted well over 7 billion dollars in pre- and post-IPO liquidity.

If that isn’t a form of Fiat Oligarchs shares exit dumping I don’t know what else it is.

Sources Material:

Official Company & Regulatory Filings

• CoreWeave Investor Relations (Quarterly Results, Earnings, Presentations): https://investors.coreweave.com/financials/quarterly-results/default.aspx

• CoreWeave Governance / Executive Bios: https://investors.coreweave.com/governance/executive-management/default.aspx

• IPO Prospectus (424B4, March 2025): https://www.sec.gov/Archives/edgar/data/1769628/000119312525067651/d899798d424b4.htm

• SEC Form 4 Insider Transactions: https://www.secform4.com/insider-trading/1769628.htm (detailed filings) and https://finance.yahoo.com/quote/CRWV/insider-transactions/

• 10-K / 10-Q Examples: Searchable via SEC EDGAR (e.g., https://www.sec.gov/edgar/browse/?CIK=1769628)

Financial Data & Stock Information

• Yahoo Finance CRWV Quote & Data: https://finance.yahoo.com/quote/CRWV/

• Nasdaq CRWV Page: https://www.nasdaq.com/market-activity/stocks/crwv

Insider & Founder Wealth Profiles

• Forbes Real-Time Net Worth (Michael Intrator): https://www.forbes.com/profile/michael-intrator/

• CoreWeave Leadership Bios (e.g., Intrator, Venturo): https://www.coreweave.com/leadership/mike-intrator and https://www.coreweave.com/leadership/brian-venturo

Critical Research & Short Reports

• Kerrisdale Capital Short Thesis (PDF, Sep 2025): https://www.kerrisdalecap.com/wp-content/uploads/2025/09/Kerrisdale-CoreWeave.pdf

• New Constructs IPO Analysis (Hidden Debt / Valuation Critique): https://www.newconstructs.com/ipo-report-valuation-rotten-to-the-core/

News & History Coverage

• IPO Announcement & Details (e.g., CNBC, Company PR): https://investors.coreweave.com/news/news-details/2025/CoreWeave-Announces-Pricing-of-Initial-Public-Offering/default.aspx

• Crypto-to-AI Pivot Article: https://finance.yahoo.com/news/coreweave-turned-crypto-crash-ai-173700140.html

• Insider Selling Coverage: Various, including MarketWatch and Investing.com articles on specific Form 4s (e.g., https://www.marketwatch.com/story/coreweaves-stock-slides-as-insider-selling-sparks-investor-concerns-fef032fe)

• Lancaster PA Data Center Opposition: Community sites (e.g.,

https://pastandsup.org/

• ) and local news (e.g., FOX43, GovTech reports on zoning fights)

This report is for informational and educational purposes. It is not investment advice. I write for intellectual stimulation only. Conduct independent due diligence and consult a licensed financial advisor before making any investment decision.

The mainstream financial industry lives in its own dystopian reality. Warning to the wise: Don’t you dare telling them that to their face.

Stocks have risen for many years and continue to do so, so the economy must be doing great. Got a problem?

I mean, a “brilliant” Financial Media Cheerleader had the toupee of calling the great Jeremy Grantham a loser the other day. Why listen to the ominous call of a 70-year-old investment legend when all you have to do is turn on CNBC at 6:00 AM Eastern Time to get the secret sauce to market success!

The bonuses have been flowing, billionaires are popping out like wild mushrooms, many with revenue-less companies going public at ridiculously high valuations.

It just hit me: Revenues and profits are binary in today’s Market. Accounting is patriarchal and exploitative.

“Down with the G.A.A.P tyranny! The revolution shall be Fintwited.”

Just buy the industries mentioned below in the name of equality.

“No profits no problems.”

Crypto innovations that will change the world are at the cusp of widespread embrace, I mean, only ten thousand of them minus Bitcoin and Ethereum. You see, you have a diversity of choice. Make sure to pick the right one.

Quantum computing is just a few weeks away from revolutionizing computing. Make sure to grab that “amazing” quantum stock selling at a 677x sales ratio and 14x Tangible Book. That’s an opportunity of a lifetime.

AI, not Allan Iverson the basketball legend, but AI for “ Artificial Intelligence.” The term “ Artificial” actually hits in the gut when you take a second to tinker. I mean, whence “ intelligence” is artificialized, what is the need for “ real-natural” intelligence then? Ok! I am overthinking: just buy the stocks, anything with AI in it, no need to overthink like a philosopher.

Don’t forget Space Travel -some people want to settle colonies on Mars- with your money, not theirs of course. Let them issue stock and then finance bonds a few days later because, just in case you didn’t know, it takes a lot of money to travel intergalactically, buddy! So shut up hater.

Who cares about beef prices? Buy the stocks.

And small modular reactors (SMRs)? They have only been tried for 70 years; give it a few more months. What’s the hurry? Just make sure to buy the stocks issued by former nighclubs managers and nanocap Canadian mining stocks promoters currently innovating this amazing revolution made in “ PowerPoints” and LLMs generated videos.

Anyway, shut up and buy the stocks, they will go up.

Just in case you didn’t get my corny sarcasm, I was merely “keeding.”

The intelligent investor would be doing himself a lot of harm “ trusting” these fools. The reality of the market, when adjusted to real “money,” paints a whole different picture of the indices and the quality of financial assets that are invisible under the keynesian trope.

What “Priced in Gold” Actually Measures

The S&P 500 has effectively been in a recession, or at least in a prolonged stagnation when priced in #Gold since the 2000 dot-com peak. While nominal charts show a massive, multi-decade secular bull market, when priced in real money, we get a whole different picture.

Dividing the S&P 500 index level by the spot gold price (both in USD) gives the number of ounces of gold required to “buy” the index. It serves as a proxy for real purchasing power using gold as a relatively stable store of value and monetary benchmark, rather than inflated fiat dollars subject to central bank policy. And this is a systematic framework across the globe in all major indices.

This long-term log-scale chart of the S&P 500 / gold ratio (annotated with major events) illustrates the point vividly. The ratio captures how equities perform relative to hard money across eras of inflation, war, policy shifts, and bubbles.

The Post-2000 Reality in Gold Terms

At the 2000 dot-com peak, it took roughly 5.1 ounces of gold to buy the S&P 500—the highest level in over a century.

By contrast, as of mid-2026, the ratio is around (with the S&P 500 near 7,300–7,500 and gold recently in the $4,000+ range). That represents massive compression: stocks have become dramatically cheaper in gold terms since the 2000 extreme. 1.66–1.85 ounce.

Key observations from the data and analyses:

• Post-2000 bear market in real terms: After the 2000 peak, the ratio collapsed. It never sustainably recovered to prior highs despite nominal stock market rallies. Priced in gold, U.S. stocks peaked in 1999–2000 and entered a clear bear phase.

• Illusory recoveries: The post-2008 and post-2020 “bull markets” look impressive in dollars but appear flat-to-down or only modestly recovering when measured in gold. Much of the nominal rise stemmed from quantitative easing, zero/negative real rates, bailouts, and monetary debasement rather than broad-based real earnings growth or productivity.

• Gold’s outperformance: Since 2000, gold has risen dramatically more than the S&P 500 in nominal terms (roughly 1,500% vs. ~400% in one common comparison, with gold still ahead even after including reinvested dividends in some analyses).

Why This Feels Like a “Recession Phase”

In Austrian or hard-money frameworks, aggressive monetary intervention (the Greenspan/Bernanke/Yellen/Powell era of puts, QE, and liquidity floods) distorts price signals, props up malinvestment, and transfers wealth via the Cantillon effect. Nominal asset prices rise, but real capital allocation suffers. Gold, as a hard monetary asset with limited supply growth, reveals the underlying stagnation or contraction in real terms.

Multiple crises since 2000 (dot-com bust, Global Financial Crisis, COVID, inflation spikes) were met with ever-larger policy responses that inflated financial assets without delivering commensurate real growth for the broader economy or equity holders in stable-value terms. The result: a multi-decade period where owning the broad market delivered disappointing real returns relative to history or to gold itself.

This does not mean the economy has been in continuous technical recession by GDP measures. It means equity investors, in real purchasing-power terms, have experienced something closer to a lost decade, especially outside the largest growth/momentum names that benefited most from liquidity.

Implications for Value Investors: Uglystocks all the way.

If the broad market has been treading water (or worse) in gold terms for 25+ years, many individual stocks—particularly unloved value names, small-caps, internationals, and deep-discount situations—likely trade at even more compelling real valuations.

Why this favors “ Uglystocks:

• Margin of safety in real terms: A stock trading at a low multiple of tangible book, net current asset value (NCAV), or liquidation value, or with high free-cash-flow yield, offers protection against further debasement or stagnation. These “cigar-butt” or Walter Schloss-style ideas become even more attractive when the index itself is cheap in gold.

• Nominal vs. real disconnect: High nominal valuations (elevated P/E ratios driven by AI hype, buybacks, or multiple expansion) can coexist with attractive real prices. The market looks expensive on the surface but offers selective opportunities underneath.

• Global and contrarian edge: Information asymmetries, governance issues, language barriers, and thinner coverage make international small-caps (e.g., certain Korean or other Asian names) even cheaper in real terms. Many trade at new lows or extreme discounts to fair/liquidation value precisely because they are ignored in a liquidity-driven nominal bull market.

• Historical playbook: The best value opportunities often emerge after prolonged real-price compression (late 1970s/early 1980s being the textbook case). Patient capital that buys quality or deep-value businesses with strong balance sheets and owner-operator alignment can compound powerfully when mean reversion or creative destruction eventually plays out.

Basically, the era of trend following easy credit is over. Entrepreneurial investors with deep investigative processes and patience will be able to find quality even when the market crashes. In a market where the overall equity-to-gold ratio is falling, the average company is becoming deeply discounted. Value investors should screen for structural valuation anomalies—such as unloved industrial cyclicals, deep-value international equities (including the structural "discounts" in Asian markets), and cash-generative businesses trading at low single-digit multiples of true free cash flow.

Bottom Line: Uglystocks and Gold forever.

Pricing the stock market in gold uncovers a sobering reality: the majority of the post-2000s “bull market” has been driven by monetary illusion and has rewarded the dystopian financial economy.

In inflation-adjusted terms, equities have shown significantly less growth than nominal figures suggest, reflecting a prolonged period of weak real returns and concealed malinvestment.

For disciplined value investors—especially those focused on extreme discounts, net-nets, global contrarian ideas, and high margins of safety—this environment is fertile ground.

The bargains are there for those willing to look past the nominal noise and buy real businesses cheaply in stable value terms. Platforms and approaches emphasizing rigorous, skeptical analysis of global uglystocks and deep-value opportunities are particularly well-suited to capitalize on this dynamic. The patient hunter who focuses on asymmetric risk/reward in inefficient corners of the market stands to benefit when (or if) real normalization eventually arrives.

(Not investment advice. I write for entertainment and intellectual stimulation only. Always do your own due diligence, consider diversification, position sizing, and personal circumstances. Markets can remain irrational longer than expected. AI was used in the writing and editing of this article.)

I’m interested in “uglystocks” for a simple reason: I’ve lost faith in the current pricing system. I believe its discovery function has been compromised, making it extremely challenging to perform reliable economic calculations and value projections.

I believe buying undervalued stock issues, Ben Graham Net-nets, Walter Schloss cheap TBV, and contrarian international /oversold stocks (selling at their 5- to 10-year lows) is an intriguing proposition because these assets have already shed their “inflationary” excesses, making them leaner, healthier investments with potential for a turnaround. More importantly, the wider investment public and the US centric pros are rarely privy to such opportunities.

“ At the end of the day, the history of Business is ultimately the History of Men.”

Introduction: The Apes are onto something.

Wendy’s is at the center of a huge meme-driven “ stonk” euphoria. The stock is currently trading upward to +40% above its recent lows with the expectation of a continuous rally in the next few weeks.

The famed fast-food company has struggled in recent years due to a multitude of negative factors that a simple observer like me cannot begin to list. Let’s just say the laundry list is more than exhaustive.

Watch video below for a full rise and fall history.

The bottom line is simple: many people are nostalgic for the old-fashioned Dave Thomas’ motto of “ never cutting corners,“ a distinctive call that set Wendy's apart from its competitors for its sit-down diner feel and homey interior, creating a "premium" fast-food identity.

Customers believe the company has lost its unique touch and has become a mere profit-extraction tool for corporate raiders and financiers.

Someone commented that Wendy’s looked like a prison visitor's parlor.

The stock recently touched its 5-year low, an attractive marker for an “uglystocks” hunter like me. The share count has decreased by 6% y/y, with a P/E of 9.42 and a P/S of 0.64. Wendy’s pays a generous dividend yield, averaging 7% on an absolute basis, with a 72% payout ratio.

is statistically cheap enough to warrant consideration by bottom-barrel stocks pickers. If anything, the recent “Apes” driven euphoria is evidence of the power of “brand equity,” a major asset class often ignored by LLM-generated valuation models.

Wendy’s is nearly 60 years old and has been a staple of the US fast-casual food industry. Millions of Americans have worked, eaten, and hung out there. The company is an important part of American restaurant identity and of its folksy culture.

The company has also expanded globally and enjoys a respectable reputation, with 7,000 restaurants in more than 30 countries and US territories.

Wendy’s still enjoys a considerable goodwill that cannot be easily wiped out.

With an EV/EBITDA of 15.5, a fat dividend yield, and close to 18.6% FCF Yield, is not a complete clunker despite its $4B debt load.

Many “Wall Street” analysts are deriding the “WallStreetBets” stonk-bros as a bunch of financially illiterates betting on a dead carcass. They ignore that the securities market does not reward “formal expertise” or generated financial modeling.

Instead, the market is a dynamic and complex ecosystem driven by real-world action and entrepreneurial decisions.

Investing is more art than science, and the right touch and the right personality at the helm of a company can be the engine that sparks a turnaround.

The human factor cannot be easily translated into a balance sheet or in a discounted cash flow, but that factor is probably the most important gauge of value.

Wendy’s is still a respectable business, a struggling one maybe, but a valuable and profitable enterprise worthy of a fair appraisal.

Nostalgia 101: “We really had it all and we threw it away.”

The (potential) bull case for Wendy’s.

Beyond social media-driven speculative craze and the unending back-and-forth-ism between the pros and the cons camps lies an important factor that could systematically re-rate the company’s value: leadership.

The story of Wendy’s is the story of its leaders, or to be more precise, its founder: Dave Thomas.

Since his passing, the company has lost its unique cache and personality. Its near-term and long-term future will thus hinge on finding the right personality and character fit to reconnect the restaurant with its customers in the age of AI.

Wendy’s brought Bob Wright back to lead its turnaround project after going through 3 CEOs changes in less than 3 years.

I believe the market ( the Apes and analysts ) is neglecting this important game-changing development.

Wendy’s; an orphaned company in search of an identity.

Many customers believe that Wendy’s died the day Dave Thomas was buried in 2002. And rightfully so! Dave Thomas was more than a founder; he was literally and figuratively the company’s patriarch.

An orphan and high school dropout, he built the chain from a single Columbus, Ohio, location in 1969 into a global powerhouse by emphasizing simple, folksy values and qualities, fresh beef, premium service, and its unique differentiated square burgers.

His personal story of overcoming abandonment infused the brand with genuine warmth, customer focus, and hands-on excellence.

“The passing of Dave Thomas also marked the loss of its Iconic Spokesman and Human Face.”

Dave appeared in over 800 TV commercials between 1989-2002, making him one of the most recognized founders in US history. A survey showed that nearly 90% of Americans knew who he was.

His simple, trustworthy, grandfatherly persona differentiated Wendy’s from its competitors (McDonald's, Burger King), setting the company apart in a crowded, low-barrier-to-entry quick-service restaurant business.

After his death, the company struggled to maintain an identity long defined by a single persona. To many, Wendy’s lost its authentic voice, moral compass, and public persona that made it feel like a family operation rather than just another corporate chain.

This remains a foundational part of its ongoing turnaround struggles.

Wendy’s in the days of Dave. Wendy’s after Dave.

Ignore WallStreetBets: Robert “Bob” Wright is the real catalyst.

Nostalgics may be yearning for the glorious days of Dave Thomas; meanwhile, skeptics are rightfully exposing the company’s records:

300 planned restaurant closures, 5 consecutive quarters of same-store sales declines, and an 11.3% sales drop in a single quarter. A vulture investor and the largest shareholders circling around to take the company private at a lower price than in previous attempts.

It is difficult to rationalize the business performance and reputation and agree with Reddit’s WallStreetBets exuberance.

On the other hand, Wendy’s is still a major operator vowing to expand its footprints across the world. The company is actively executing a massive international expansion, targeting 2,000 global locations by 2028.

So while the closure of restaurants in the US makes the headlines, Wendy’s is betting on the world for its growth.

Its shareholders’ expectations are high, and only a well-seasoned captain can rightfully steer Wendy’s ship in the right direction.

I believe Robert “Bob” Wright is the right leader to mitigate Wendy’s decline and the most apt to steer it back its planned turnaround strategy.

Robert “ Bob” Wright, the Man and the leader.

Wright is a career restaurant industry executive with deep familiarity with Wendy's and a proven track record in both fast-casual and quick-service restaurant turnarounds. He enjoys challenges and is willing to embrace the job and leave a mark. By bringing Bob Wright back, Wendy’s is betting on:

• A turnaround proof of concept with documented results.

Bob's most recent stint was at Potbelly, a chain that was hemorrhaging through eleven consecutive quarters of same-store sales declines before he arrived. Wright delivered a 39% increase in average unit volumes, 42% system-wide sales growth, a thriving digital platform built from scratch, and ultimately a $566 million exit to RaceTrac. He fixed the unit economics and let the outcome speak to the delight of shareholders.

challenges are urgent and require immediate attention. Robert Wright's success in turning around Potbelly during the height of the COVID pandemic is noteworthy for shareholders. He orchestrated a comprehensive, post-pandemic operational turnaround, expanded the brand footprint, and built one of the industry’s fastest-growing digital ordering platforms. His tenure at Potbelly has set him up as a capable shareholders friendly executive. He will be expected to replicate his post-COVID success at Wendy’s, a company he knows from top to bottom.

• Franchisee credibility trust.

Bob Wright spent years as Wendy's COO. But his stint with the company goes back to 1998, when he was a franchise area director responsible for all aspects of franchise relations with over 90 franchises restaurants and 12 Wendy’s Franchisees in the West Virginia, Kentucky, and Ohio markets.

The franchise community already knows him well. In a system that is almost entirely franchised, you cannot execute a turnaround without operators’ buy-in. Most external CEO hires spend eighteen months earning that trust. Wright walks in with it on day one. Decades of Wendy’s field-to-corporate office experience give him instant credibility. Franchisee economics and system health are make-or-break for Wendy’s predominantly franchised model.

Wendy’s appears to be betting that Wright’s combination of operational expertise, prior company familiarity, and franchise credibility can help stabilize execution while positioning the company for more sustainable growth.

• genuine digital upside lever.

A primary driver of Potbelly's turnaround under Wright was a swift, aggressive pivot to digital ordering infrastructure. With Wendy's currently navigating an industry-wide shift toward mobile apps, drive-thru automation, and loyalty reward ecosystem capture, Bob Wright’s technical implementation history at Potbelly serves as a direct blueprint. Wendy's mobile and loyalty infrastructure remains a fraction of what McDonald's and even Burger King have captured. Margin improvement from digital order mix is a real, near-term driver that the market is not pricing in.

Wright’s hands-on success in building a high-performing digital/loyalty engine at Potbelly is one of his strongest credentials for Wendy’s. It provides a repeatable framework to close the gap with McDonald’s/BK, capture more high-margin digital mix, and drive the operational excellence pillar of Project Fresh. If he replicates even a portion of Potbelly’s digital momentum, especially accelerating loyalty growth and owned-channel shift while scaling FreshAi, it could be a material near-term catalyst for traffic, AUV, margins, and franchisee economics.

• A kitchen floor up executive.

Bob Wright began his career at age 19 in the food industry, delivering pizza, and his leadership style is therefore grounded in operational reality rather than corporate gamesmanship. He is reputed to be empathetic and people-centric.

He frequently credits his early days as a pizza delivery driver for giving him a genuine appreciation for the daily hustle of restaurant staff. He is equally disciplined and process-oriented. And more importantly, Wright intentionally fights against the pitfalls of large corporate structures which he describes as getting “big and fat and slow.”

Bob Wright’s leadership philosophy is deeply rooted in blue-collar operational grit, frontline empathy, and a deliberate resistance to bureaucratic bloat, traits forged from humble beginnings that make him a culturally resonant choice for Wendy’s “Dave’s Place” heritage and Project Fresh turnaround.

The re-rating catalyst: “Taking opportunities that are presented to you.”

Bob Wright is the right fit to revamp WEN -11.72% and salvage one of America’s most recognizable fast-casual restaurants.

His selection aligns with the company’s founder ethos of simplicity, customer focus, quality, affordability, and premium service. More importantly, Bob Wright was brought back to re-engineer his successful turnaround of Potbelly at Wendy’s.

His career trajectory, including multiple leadership roles at Wendy’s and stints at Charleys Philly Steaks, Checkers, Domino’s, and Potbelly, shows a consistent focus on executional excellence.

At Potbelly, he completely rebuilt the management team and the organization to deliver industry-leading results.

He delivered approximately 785% total shareholder returns over 5 years, resulting in the company’s sale for $17.12 per share. He grew market capitalization from $50M to $566M in that same 5-year period.

He would be joined in his effort to revitalize the company by Steve Cirulis, Potbelly’s CFO, with whom he successfully steered the company out of near bankruptcy.

Bob Wright is a winner, but more importantly, a decent human principled floor general. And that’s exactly what Wendy needs.

Conclusion: Wendy’s is a two years turnaround workout.

The WallStreetBets’ “Operation Save Wendy’s” is not a silly speculative call by a bunch of ignoramus degenerates. It is a fair and just assessment of a mismanaged American fast-food institution.

Wendy’s still holds significant goodwill among its customers and stakeholders, which warrants patience as the company tries to turn around.

The “Apes” might be driven by short-term stock-squeeze tactics, but in the long run and with the right leadership, Wendy’s can return to a respectable standing in its industry.

As an “uglystocks” investor, I sail only with a ship captain I trust and forget the rest. Bob Wright's reputation is stellar, and he comes across as a decent bloke. That’s all I need to know.

Struggling companies cannot be systematically ascertained through quantitative financial metrics alone. Businesses are not “spreadsheets” but the byproducts of human action and vision.

In that regard, the “Apes” are far smarter than professional analysts at gauging Wendy’s value. In fact, Wendy’s was built in the image of its founder, and its success or failure hinges on the management's ability to maintain Dave Thomas’s vision and ethos, something that has been neglected by the rating agencies.

I believe the market has not yet fully grasped the unique skillset Bob Wright brings to the table; once his plans are in place and his operational discipline and organizational skills are put to work, the current share price will be seen as an absolute bargain.

Meanwhile, I expect a lot of near-term volatility and I have appraised the risks of a market crash caused by general market uncertainty and macroeconomic dynamics. This is a high-risk, high-reward turnaround opportunity that can take up to 2 years to work out.

Things might get worse before they get better.

Extreme patience is warranted.

( Not Investment advice. I write for entertainment and for intellectual stimulation only. Always contact a professional investment advisor before trading a stock. )

Uglystock Report (2): Kumulus Vape S.A. (EPA:ALVAP)

I’m interested in “uglystocks” for a simple reason: I’ve lost faith in the current pricing system. I believe its discovery function has been compromised, making it extremely challenging to perform reliable economic calculations and value projections.

I believe buying undervalued stock issues, Ben Graham Net-nets, Walter Schloss cheap TBV, and contrarian international /oversold stocks (selling at their 5- to 10-year lows) is an intriguing proposition because these assets have already shed their “inflationary” excesses, making them leaner, healthier investments with potential for a turnaround. More importantly, the wider investment public and the US-centric crowd are rarely privy to such opportunities.

https://www.kumulusvape.fr

Kumulus Vape is a tiny French nano-cap that operates primarily through its e-commerce flagship, kumulusvape.fr, which retails electronic cigarettes, e-liquids, DIY vaping components, and ancillary accessories. The company maintains a catalog of over 11,000 product references, targeting two distinct customer segments: traditional smokers seeking harm-reduction aids and dedicated vaping enthusiasts.

Kumulus Vape S.A. (EPA: ALVAP) presents a classic micro-cap contrarian setup that fits Benjamin Graham’s “net-net” or a Walter Schloss-style deep tangible asset play. As of mid-June 2026, the stock trades at approximately €2.93, with a micro-cap market capitalization of €8.9M amid heavily compressed earnings, intense regulatory scrutiny in the European vaping sector, and unregulated Chinese competition. The stock is “ ugly”, tiny, and French! But it has also consistently returned dividends and maintained positive free cash flow. Let’s deconstruct a valuation.

The stock is down -70% over 5 years. Just the way I like them. ugly and ignored.

Execs skin in the Game: The catalyst.

Uglystock investing goes beyond simple valuation asymmetries; the company’s story is equally important. If a stock’s story doesn’t grab my attention immediately, I rarely take a second look and move on. That wasn’t the case with this tiny company. I wasn’t particularly blindsighted, but I found the company’s background story fairly intriguing, enough to make me “ wanna know more.”

What I discovered was quite interesting: a passionate founder and CEO supported by a strong team that has worked together since the company’s inception in 2012 to build France’s most trusted vape platform.

Founder/CEO Rémi Baert (self-made entrepreneur) and the team (including CFO Laetitia Touchet and COO Lionel Hugues) are true believers with significant skin in the game. They collectively hold a substantial portion (37%, according to some shareholder breakdowns). Alignment is clear as insiders are exposed to the same challenges and upside. The company has conducted share buybacks/capital reductions and pays dividends, signaling a focus on capital returns to shareholders.

Vaping goes beyond a mere business for these folks; the business was developed as an outlet for a group of former smokers wanting to break free from traditional tobacco nicotine addiction. Remi Baert is also the President of “ France Vapotage”, a lobbying group defending the interests of French Vaping merchants and manufacturers. Also:

• The retailer boasts an outstanding 4.9 out of 5-star rating on independent, verified platforms like Trustpilot.

• Buyers frequently note that orders are shipped promptly, often with small complimentary gifts added to packages.

• Beyond retail, the company is actively engaged in promoting the use of e-cigarettes as a recognized smoking cessation tool, frequently commissioning independent health surveys regarding vaping efficacy.

The fundamental principles of good management are explicitly aligned: ethical, skin in the Game, honest leadership that strives for more than just profit.

The company grew from these values rather than forcing its way into the market. It’s often much easier when natural market demand drives the product than when it doesn’t.

Though the story seems small and insignificant given the company’s size and market cap, in business, size isn’t everything.

Great businesses are defined by their quality, story, and value, not solely by scale. When employees and executives enjoy their work doing something they find important and meaningful, I want to be part of that journey and share in its success as a shareholder.

The reviews speak for themselves.

The Ugly:

Despite carving out a competitive niche in France via compliance transparency and customer education, the company is battling structural and cyclical headwinds:

• Product Shift: A structural market shift from premium refillables to low-margin disposable vapes.

• Macro Pressures: Regulatory tightening across the EU and aggressive price competition from illicit, unauthorized Chinese imports.

• Margin Compression: These dynamics culminated in a challenging FY2025, where revenue fell 5% YoY to €57.5M and gross margins tightened to 14.3%.

The stock peaked at EU14 per share in 2021 and has lost nearly 70% of its value over the past 5 years. This is a hard pill to swallow for a shareholder and a telltale sign of the underlying operational reality on the ground. Clearly, forces are at work eroding the company’s strategic niche. Maybe large tobacco corporations have decided to enter the field and flood it with competitive alternatives, or the effect of murky French regulatory complexity on the market1, or the unregulated, cheap Chinese platforms. It is really hard to pinpoint a specific issue, but the fact is that “Kumulus” is not a growth story but rather a resilient, passion-driven platform. Can it turnaround?

The beauty:

Early Q1 2026 data points to revenue stabilization, suggesting that the worst of the operational degradation may be bottoming out.

Let’s be clear: Kumulus is a lot more than a mere online retailer of vaping products. It strives to grow as a premier ecosystem controlling the direct consumer retail side with its flagship website (1), business-to-business logistics delivery, which accounts for 85% of the company’s revenues with “ KMLS Pro” (2), and, in 2023, the Group acquired “Cigarverte”, a franchised vaping retail boutique network where vaping enthusiasts can gather(3). The network has expanded to more than 60 branded stores, further cementing its role as a key player in the physical retail market. In January 2026, the Group inaugurated “Labster”, a state-of-the-art production facility that brings the company’s clear ambition to life — regaining control over the manufacturing of select proprietary brands while maintaining strong complementarity with the partner ecosystem that makes the Kumulus Vape catalog so rich (4).

From 2027 onward, the facility will pursue ISO 9001 (quality management) and Origine France Garantie certifications, confirming its premium positioning and its dedication to traceability and transparency.

The company also boasts Ziplock in its ecosystem (5), a retailer of vaping accessories, “Strategik”, a marketing agency (6).

Quantitative Valuation: Graham NCAV & Schloss TBV

To quantify the margin of safety, we strip out all subjective long-term growth assumptions and evaluate Kumulus Vape strictly through a liquidating-asset lens, using audited FY2025 balance sheet data (ended Dec 31, 2025).

Balance Sheet Breakdown (in €M)

• Cash & Cash Equivalents: €6.47M

• Trade Receivables: €7.84M

• Inventory: €8.57M

• Total Current Assets: €22.87M

• Total Assets: €27.52M

• Total Liabilities: €10.57M (Current Liabilities: €7.9M)

• Shareholders’ Equity: €16.95M

1. Ben Graham Net Current Asset Value (NCAV)

Graham’s NCAV metric measures a company’s liquidation value by looking solely at current assets and subtracting all liabilities, treating fixed assets (property, plant, and equipment) and intangibles as completely worthless in a distress scenario.

NCAV=Total Current Assets−Total Liabilities

NCAV=€22.87M−€10.57M=€12.30M

With 3.02M shares outstanding, this translates to an NCAV per share of €4.07. At a current share price of €2.93, Kumulus Vape trades at 0.72x NCAV—representing a massive 28% discount to its net liquidating value. While it does not fully breach Graham’s ultra-strict rule of trading at less than two-thirds of NCAV (≤0.67x), a 28% discount for a business that remains structurally profitable is a rare anomaly in today’s market.

2. Walter Schloss Tangible Book Value (TBV) Analysis

Legendary value investor Walter Schloss looked for companies trading at deep discounts to tangible book value, backed by clean balance sheets and zero debt.

Kumulus Vape holds a positive Net Cash position of approximately €3.0M and working capital of €14.97M. If we strip away goodwill and intangible assets from total equity, we arrive at a highly conservative Tangible Book Value:

• Tangible Book Value (TBV): ~€14.01M

• TBV Per Share: ~€4.63

• Price / TBV: 0.63x

Buying a company with positive net cash, no long-term solvency threat, and a history of generating free cash flow at just 63% of its physical net worth aligns perfectly with classic deep-value criteria.

A well entrenched platform in its niche

Conclusion: Ugly, Abandoned, and Statistically Cheap acquisition premium.

Kumulus Vape is not a compounder. It is not a growth story. It is an ugly stock in a shunned industry operating in a complicated regulatory environment, with earnings that have collapsed 62% in a single year. The consensus hates it. The market has ignored it.

I disagree!

I see a lot of potential in the company, but the human factor is even more compelling to me. The founder and his team are truly dedicated to vaping as an alternative to smoking. They are true believers and are building an entire production-to-retail and marketing ecosystem in France. That's all I look for in management: integrity, 100% focus, and dedication. I am looking for a buy-and-forget situation, and in Baert and his team's case, the trust factor is seriously compelling.

Here is an important cherry on the cake that I have kept for last in this report: Key Article 23 of France’s 2026 Finance Bill, introduced in late 2025 to tighten regulations on vaping products, was defeated in January 20262. The Bill was hanging like a “ sword of Damocles” over the head of the country’s vaping industry, threatening as many as 20,000 jobs and putting thousands of SMEs at risk. This important development should be appraised as a positive baseline for vaping growth, which in turn could benefit $ALVP.PA long term.3

At €2.93, the stock trades at 0.72× NCAV and 0.63× Tangible Book Value, against a backdrop of positive net income and net cash, zero long-term debt, and 37% insider ownership. The bear case is already fully priced in. The upside, even a partial revaluation to NCAV, represents approximately 39% return from current levels. Moreover, the company has carved a strong brand equity in its niche and could easily be the target of an attractive acquisition offer from a richer, deep-pocketed European or international distributor looking to consolidate the French vape market.

(Not investment advice. Consult a professional and trustworthy advisor before trading financial securities. I write as a hobby and for intellectual stimulation. Wall Street is not your friend.)

Uglystocks’ investing seeks to purchase roadkills trading at multi-year lows, selling below net asset intrinsic value within the Ben Graham/Schloss/ Templeton framework. I have lost all faith in the current price economy trust-value discovery process. Most financial assets trade at an extreme premium to their net fair returns due to artificial liquidity sustaining the market. Quantitative accounting metrics are unreliable and untrustworthy due to the preeminence of cheap debt financing and short-term incentive mechanisms. I believe buying 1/3 rotten-tomatoes gives me a better picture of the asset’s true worth because “ugly” asset prices are better aligned with reality. I want to deal with real “facts,” and ugly companies tend to better reflect their underlying economics unlike artificially stimulated high-techs and popular theme-driven oversubscribed securities.

Premise:

Grange Resources Limited (ASX: GRR) is Australia’s oldest continuous magnetite iron ore producer, operating the Savage River integrated mine and pellet plant in Tasmania for over 55 years. At a price of A$0.16 per share, the company trades at a deep discount to its net-tangible asset value of A$0.93 per share. Its balance sheet is loaded with A$284 million in cash and liquid investments against a market capitalization of only A$185–231 million. The implied deeply negative enterprise value of approximately A$95 million looks interesting.

The market is essentially paying you to own the underlying operating business, the Port Latta pellet plant, the world-class Southdown Magnetite Project optionality, and the rights to over 1.2 billion tonnes of mineral resources.

Yet the discount exists for reasons. Iron ore pellet prices have fallen sharply from their post-COVID peaks. The company has deferred its flagship North Pit Underground (NPUG) project multiple times. Dividend payments have been eliminated. Profit after tax declined 61% in FY2024 and a further 48% in H1 2025. The controlling Chinese shareholders (Jiugang Group) add governance opacity. This report tries to deconstruct the ugly side and extract the beautiful opportunity underneath the company’s trashy appearance.

The Edge: Grange’s Pellet premium.

Grange’s magnetite pellets occupy a distinct and strategically valuable niche. Magnetite is a naturally occurring mineral commonly refined into an iron ore concentrate and used for steel production. Iron ore makes up about five per cent of the Earth’s crust and most commonly occurs in the form of haematite or magnetite. Most of the magnetite mined is usually used to produce concentrate for pellet feed or pellets which are used to make steel. Magnetite concentrate has internal thermal energy, meaning less energy is required to convert the magnetite into haematite pellets. This results in lower carbon dioxide emissions. The blast furnace chemically reduces iron oxide into liquid iron called ‘hot metal’. The iron ore and reducing agents (coke, coal and limestone) are combined. Pre-heated air is injected at the bottom of the combination for up to eight hours. The final product is a liquid which is drained and eventually refined to produce steel. Mining magnetite ore is capital-intensive and requires significant downstream processing infrastructure, including a beneficiation plant, a pellet plant, and port facilities. Magnetite products command a value premium over hematite ore products such as fines and lump. This premium is derived from two sources, namely additional iron content and a quality premium. As magnetite concentrate is a refined product, it usually has a higher iron content and lower impurity levels. This can have beneficial effects and environmental outcomes for the steelmaker.

The Ugly factors:

Grange Resources looks terrible on the surface (depleting pits, project risk, cyclical commodity, small/illiquid/foreign-controlled, volatile earnings). That ugliness drives the extreme discount to net cash and book value.

The most significant and immediate risk facing Grange Resources is the cyclical nature of iron ore and pellet pricing. The company’s entire revenue stream derives from selling iron ore pellets and concentrates into Asian steel markets, primarily China. The benchmark 65% Fe iron ore fines price declined approximately 21% from US$146/t in late 2023 to US$115/t by December 2024. Pellet premiums have compressed as Chinese steel demand faces structural headwinds from the country’s property sector downturn.

The Savage River magnetite mine in Tasmania (its core asset) has open-pit reserves depleting, particularly at North Pit. The company is transitioning to underground mining through the North Pit Underground (NPUG) project, a complex, capital-intensive block-cave/sub-level-cave development. This was paused/delayed earlier due to softer iron ore price forecasts; it is now advancing with due diligence and funding work in 2025–2026, with development targeted to ramp up in +2026.

Grange Resources is effectively controlled by Shagang Group or Shasteel, a large Chinese state-owned steel enterprise. While the company is listed on the ASX and subject to Australian corporate law and ASIC oversight, the concentration of ownership by a SOE introduces governance considerations that value investors must price:

Shagang International (Australia) Pty Ltd (26%) and Jiangsu Shagang Group (21.5%) are major shareholders. This brings long-term offtake contracts, Letters of Credit for credit risk mitigation, and historical strategic support. But it creates perception risks for many investors: governance concerns (past shareholder complaints about influence), potential conflicts, or geopolitical overhang in Australia-China relations. It can feel like “a Chinese steel mill subsidiary” rather than a pure independent ASX play.

Also, while the company remains debt-free and operationally stable, its backward-looking financial metrics show severe deceleration.

Revenues and Profits have collapsed dramatically over 5 years

Between FY2022 and FY2024, revenue collapsed from A$572M to A$451M, and net profit after tax fell from A$150M to A$58.5M. Operating leverage is substantial: a US$10/t change in realized price for ~2.5 Mt of annual pellet production translates into an A$35–40M EBITDA impact. The FY25 full-year results, released in February 2026, confirmed that revenue fell 8% to A$477.9 million and net profit after tax declined 21% to A$46.6 million, with no final dividend declared – a decision that disappointed income-focused investors who had previously enjoyed average annual yields of approximately 11% over five years. The earnings pressure stems from iron ore prices, which have been under sustained pressure rather than any fundamental operational failure.

At current price levels (US$126/t realized as of Q1 2026), margins remain acceptable but thin, and any further deterioration would rapidly erode the profitability that underpins the balance sheet accumulation story.

The dividend trajectory tells a stark story of deteriorating free cash flow and management caution. GRR paid A$0.10 per share in FY2022 — implying a yield of 5–6% at prevailing prices. By FY2024, this had fallen to A$0.02, and Q1 2025 saw no interim dividend. While the balance sheet remains robust (A$284M in cash), the decision not to return capital to minority shareholders as cash accumulates on the balance sheet is a point of tension. The cash is nominally owned by shareholders, but its deployment is at management’s and the board’s discretion, and the board is majority-influenced by Jiugang.

Finally, Grange frequently highlights its Southdown Magnetite Project in Western Australia as a world-class optionality asset, boasting a massive resource capable of producing 5 million tonnes per annum (mtpa) of premium direct-reduction grade concentrate over a 28-year mine life. However, looking at the Feasibility Study reveals why the market values this asset at near-zero:

The capital expenditure required to build Southdown has risen to A$2.34 billion due to inflation and the scale of the infrastructure. Grange cannot advance this project alone. It has explicitly stated that Southdown is dormant until it finds a strategic equity partner willing to bankroll construction. Until a partner signs on the dotted line, Southdown remains an expensive piece of paper rather than a cash-generating asset.

In all, a combination of a maturing open-pit operation, uncertainty around a high-stakes underground transition, cyclical small iron ore, a tiny, illiquid, neglected small-cap, and Chinese majority ownership might explain the stock's underperformance and investors' skepticism. The equity has effectively crashed to its 5-year lows, with further uncertainty tied to the slowdown in steel demand and macroeconomic deceleration that could push iron ore below $100.

The undervaluation beauty.

With a market cap hovering between A$185 million and A$275 million cash in hand, and a rock-bottom P/E ratio of under 4x, the market is pricing Grange as if it is headed straight into a wall. However, a deep-value, contrarian thesis reveals several massive structural mispricings.

Grange does not mine standard 62% Fe iron ore fines (the stuff that heavyweights like BHP and Rio Tinto dump onto the market, which is highly sensitive to the cooling Chinese property sector). Instead, it produces premium 65%+ Fe magnetite pellets.

Even in a softer global iron ore environment, Grange achieved a stable average realized product price of US$ 126.29/t (A$182.61/t) for the March 2026 quarter. This reflects a major, structural premium (18%) over the standard 65% Fe benchmark.

The global steel industry is under intense pressure to decarbonize. Blast furnaces require significantly less energy and emit far less carbon dioxide when using high-grade pellets than when using low-grade fines. As steelmakers transition to Electric Arc Furnaces (EAF) and Direct Reduced Iron (DRI) technologies, the structural premium for Grange’s specific product is poised to widen, decoupled from standard iron ore price slumps.

With a market cap of A$185M at A$0.16 per share, and A$275M in cash and liquid investments (with nearly zero debt), the enterprise value is negative A$90M. You’re essentially getting the entire operating business (Savage River mine, Port Latta pellet plant, premium product capability, Southdown resources, inventory, etc.) for free or at a discount to cash. This provides a rock-solid floor: limited downside in a worst-case scenario (e.g., prolonged weak iron ore prices or transition hiccups), as the cash hoard funds operations, potential dividends/buybacks, or self-funded optimizations. This is an interesting “ugly statistical asymmetry” where time decay works in your favor through cash preservation and potential distributions.

The market crushed the stock because of the looming A$890 million capex required to transition the Savage River mine underground. While retail investors fled, management has been systematically de-risking the project behind the scenes:

In the Q1 2026 update, Grange confirmed that independent technical and legal due diligence reviews for the North Pit Underground (NPUG) project financing are fully complete.

The company is currently progressing with lender engagement to secure project debt. More importantly, they are seeking a project completion guarantee from their majority shareholder, Shagang Group (China’s largest private steelmaker). If Shagang steps up to guarantee the completion, the existential funding risk evaporates, exposing the market’s “value trap” narrative as overly pessimistic.

The Southdown project near Albany, Western Australia, contains 1.2 billion tonnes of mineral resources and 412 million tonnes of ore reserves — a world-scale deposit by any measure. In isolation, this represents one of the largest undeveloped high-grade magnetite projects globally. The pre-feasibility study indicated an initial production capacity of 5 million tonnes per annum of premium magnetite concentrate — double Savage River’s current output. Grange recently reacquired its partner’s stake, now holding 100% ownership.

The development capex is substantial (multiple billions of dollars) and well beyond Grange’s current independent financial capacity. However, a strategic partnership, sale, or joint venture with a major steel producer seeking long-term supply security could unlock enormous value. At normalized magnetite concentrate valuations of US$8–15/t NPV per tonne of annual capacity, a 5Mt/year operation represents US$40–75M of annual EBITDA potential — implying a project NPV (appropriately risk-adjusted) that could dwarf Grange’s entire current market capitalization.

At A$0.16 per share, the market ascribes zero value to Southdown. A deep value investor would view this as a free embedded option on a world-scale asset.

The Valuation: Ben Graham/ Walter Schloss perspective:

The Ben Graham/Walter Schloss perspectives are my valuation anchors. Sir John Templeton has inspired me to look globally for potential bargains and contrarian value brand equity. The current untrustworthiness in economic calculation has led me to focus on the core assets’ net worth before any other financial metrics. I am interested in sound, healthy, low-debt stocks.

My analytical starting point is the balance sheet. As of March 2026, Grange holds A$284 million in cash and liquid investments. With a market capitalization of approximately A$185, the company’s enterprise value is a deeply negative figure of approximately negative A$95 million. This means an investor buying GRR at current prices is receiving.

A$1.54 of cash per A$1.00 of market value paid (based on A$185M cap, A$284M cash.)

The full operating business (Savage River / Port Latta) effectively for free.

100% of the Southdown Magnetite Project (1.2Bt resource, 412Mt reserves) for free.

The NPUG underground optionality for free.

Graham’s description of the net-net investor’s advantage was simple: you are buying a dollar for fifty cents. In Grange’s case, the arithmetic is arguably more compelling — you are buying a dollar of cash for roughly 65 cents, plus a free operating business producing A$400M+ of annual revenue.

GRR currently trades near or at its NCAV — an extremely rare occurrence for a company with positive earnings. The NCAV analysis establishes a hard downside floor at ~A$0.11–0.17 (2/3 NCAV to full NCAV), implying extremely limited downside from current levels in a Graham framework. The company would need to actively destroy its cash balance through value-destructive capex or losses to breach this floor — which, given its current operational profitability and rising cash balance, appears unlikely.

Walter Schloss, who ran a concentrated net-net value portfolio at the Graham-Newman fund and later independently for 45 years, famously focused on price-to-book value (P/B) as his primary entry criterion. He sought stocks trading at meaningful discounts to book, typically below 0.5x.

GRR’s current price-to-NTA ratio is approximately 0.18–0.22x. This is extraordinary even by Schloss’s demanding standards. The NTA of A$0.93 per share includes tangible mining assets — mine infrastructure, the pipeline, the Port Latta pellet plant, and port facilities — that have genuine replacement value.

GRR’s NTA is A$0.93/share (confirmed H1 2025). A 50% discount to NTA — Schloss’s minimum comfort level for deep value — implies A$0.465. A 60% discount (approximately 0.18–0.22x NTA) is what the market offers. Historically, mining companies with operating businesses trade at 0.5–1.2x NTA through the cycle. Mean reversion to even 0.5x NTA yields A$0.465, while normalization to 0.7x NTA implies A$0.651.

Target implied by P/NTA reversion: A$0.37–0.65 depending on multiple applied.

Even applying a severe 50% haircut to the carrying value of all non-cash tangible assets (to account for distressed sale or cyclical impairment), the resulting adjusted NTA would still be materially above the current share price. The margin of safety, even after stress testing, is substantial.

Even when applying other valuation methodologies (Sum of the Parts, Earnings Power Value, Discounted Cash Flow, Technical analysis), the company remains at a significant discount to fair value, with a relatively safe margin of safety protecting against downside uncertainty. I tend to be particularly interested in companies trading at 10-year lows, and $ GRR's 2/3 NACV is A$0.11, which aligns with 2015’s entry price.

Applying a conservative 25–30% governance/liquidity/single-asset discount to the base composite of A$0.52 yields a published price target of A$0.38. This represents approximately 90–138% upside from the prevailing price of A$0.16 and remains well below the reported NTA of A$0.93.

Conclusion:

The market is valuing Grange Resources as if it were on the brink of bankruptcy. That isn’t true. The company has operated for nearly 60 years. In fact, it is a highly profitable, debt-free operation with a mountain of cash that exceeds its market capitalization. If Grange secures institutional debt funding for the underground transition over the coming quarters—backed by its Chinese parent—the capital wall overhang disappears. Once the capital expenditure uncertainties pass, the business will be positioned to resume its historic role as a massive cash generator and dividend machine. A value investor with a 3-5 year time horizon, willing to accept the genuine risks of Chinese governance, commodity cyclicality, and single-asset concentration, is being offered an extreme margin of safety that compensates for these risks.

This report is for informational purposes only and does not constitute financial advice. The author may hold positions in the securities discussed. Past performance is no guarantee of future results. Equity research involves the risk of total capital loss.

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“ I must force myself to laugh at everything lest I be obliged to weep.” Figaro: The Barber of Seville.

THESIS IN ONE SENTENCE

NNE is not a nuclear company; it is an insider liquidity machine wearing nuclear clothes, engineered by a serial micro-cap promoter with a psychology degree and a history of penny-stock promotions, deployed into the most capital-intensive, regulation-intensive industry on earth, with zero proof of concept and zero institutional backing.

Introduction: A fitting story befitting an insane hype cycle.

Nano Nuclear Energy ( ) is a boldfaced wealth-extraction scheme by the lowest common-denominator group of financial piranhas. How a company with no working prototype, zero revenue, a part-time CEO, and a marketing budget larger than its R&D loudly claims to be the ‘first publicly listed, vertically integrated advanced nuclear micro modular reactor company in the United States’ is almost comical.

I highlighted the "scheme” two years ago. Hunterbrook wrote a detailed analysis of the company, and J Capital followed suit. But the “thing” kept metastasizing, at one point valued at nearly four billion dollars, as its operators grew increasingly emboldened in their misguided sense of respectability, even daring to appear in official mainstream financial news accessible to everyday investors.

It is rather simple, however: the entire SMR industry is riding the coattails of hype around small nuclear reactors. But the harsh reality is that the SMR’s magic elixir may be a sham. It is benefiting from an euphoric conceit, aided and abetted by cheap capital and a near-religious zeal against fossil fuels, which often grabs headlines every few years, with a momentous peak, with new ‘magical’ solutions promoted as alternatives to the so-called ‘big oil.’ SMRs are the new buzzword in the energy world, the hot-chic money-maker for both Wall Street Elite investment-banking fees-hustling, stock-pushing houses and for “side streets” upstarts, curb-side OTC hustlers tussling to get their big opportunity to feed their vanity for success and fame as “successful Wall Street Entrepreneurs.”

Thus, beneath the appearance of a complex technological energy innovation in need of adaptation to current market demands lies an all-too-human theme: Ego, conceit, hubris, and delusion.

1-THE SCIENTIFIC FACTOR: Small modular reactors are inferior to conventional reactors.

In its Annual Report mission statement, Nano Nuclear Energy Management boldly claims:

“A key pillar of our business plan is to provide readily replaceable mobile reactors which we can provide to customers, along with operative personnel, to power projects, residential and commercial enterprises, and major development projects. Our vision is to be a commercial and domestic energy supply leader within the U.S. nuclear industry, and to advance U.S. domestic and foreign policy and national security priorities. The mobile, lower-cost and ultra-safe solid core model of our micro-reactor vision will provide a clean energy option that supports initiatives for sustained international engagement and promotes enhanced and more efficient cooperation and assistance in the application of peaceful uses of nuclear energy, science, and technology. We will also drive resources to projects and activities in developing countries of greatest need by supplying energy to areas removed from the grid.”

The nuclear industry’s latest pitch is not a revolution, but a rerun — an expensive distraction from real climate solutions.

Arnie Gundersen would probably scoff at Nano Nuclear Energy’s execs’ bold claims; he would cynically read their mission statement and quickly pinpoint their self-serving objectives. Without even knowing ’s execs’ professional history and financial standing, his years of experience within the field of Nuclear energy production have already led him to deconstruct the whole SMRs business apparatus, and deal a decisive punch in the guts to pretense.

"SMRs only exist in the imagination of the nuclear industry and its supporters. SMRs can only be found on glossy PowerPoint slides. That is why Mycle Schneider dubbed SMRs “power point reactors.” There are no engineering plans, no blueprints, no working prototypes.

Indeed, NNE 7.26%↑ looks a lot like a PowerPoint company filled with promising ideas about the energy revolution. But 50 years of industry expertise can help filter the nonsense from the essence. And it appears that, for all their flaws, conventional nuclear plants are far preferable to the uncertainty and risk associated with SMRs.

According to Arnie Gundersen, SMRs require the use of higher-enriched uranium, close to weapons-grade, raising serious proliferation and safety concerns.

Their smaller size exacerbates certain problems due to their compact cores. They are far more likely to leak neutrons than conventional reactors. In that regard, their small size remains a massive hindrance and a dangerous piece of radioactive infrastructure that requires the same level of security, emergency planning, and long-term waste management as any other nuclear reactor.

Stanford-led research finds that small modular reactors will actually generate more radioactive waste than conventional nuclear power plants.

While nuclear reactors generate reliable electricity with limited greenhouse gas emissions, they also produce radioactive waste that must be isolated from the environment for hundreds of thousands of years. Small modular reactors have been touted as an alternative to expensive conventional reactors because of their design flexibility (they can be assembled in factories) and lower levels of radioactive byproducts.

The study shows that most small modular reactor designs will actually increase the volume of nuclear waste requiring management and disposal by factors of 2 to 30 in some cases. These findings stand in sharp contrast to the cost- and waste-reduction benefits that advocates have claimed for SMRs.

In an article written on cleanTechnica, Micheal Barnard clearly states that:

Small modular reactors won’t achieve economies of manufacturing scale, won’t be faster to construct, forego efficiency of vertical scaling, won’t be cheaper, aren’t suitable for remote or brownfield coal sites, still face very large security costs, will still be costly and slow to decommission, and still require liability insurance caps. They don’t solve any of the problems that they purport to while intentionally choosing to be less efficient than they could be. They’ve existed since the 1950s and they aren’t any better now than they were then.

In fact, the history of SMRs is a history of failure. They were first commissioned and operated by the U.S. Army in the 50s but proved unreliable and expensive. The program was shut in 1977. The same trajectory was followed in the U.K., India, Canada, France, and Japan.

“ Without exception, small reactors cost too much for the little electricity they produce. The result of both their low output and their poor performance.”

Pr M.W. Ramana

The recent failure of NuScale highlights the complexity and challenges facing potential entrants into the SMRs industry. The company abandoned its flagship project in Idaho after securing up to $4 billion dollars in subsidies from the U.S. government. The same thing occurred with mPower, whose project was abandoned in 2017 despite more than $375M spent, plus a $111M contribution from the DOE.

In reality, nothing in the history of small nuclear reactors suggests that they would be more economical than full-size ones. In fact, the record is pretty clear: Without exception, small reactors cost too much for the little electricity they produce, due to both their low output and their poor performance. In the end, as an analyst for General Electric pronounced in 1966, “Nuclear power is a big-plant business: it is most competitive in the large plant sizes.” And if large nuclear reactors are not competitive, small reactors are unlikely to do any better. Worse, attempts to make them cheaper might end up exacerbating nuclear power’s other problems: production of long-lived radioactive waste, linkage with nuclear weapons, and the occasional catastrophic accident.

ZEUS design, not even prototype.

2-The quantitative factors: Zombified capital raise scheme.

Nano Nuclear Energy, Inc. is a pre-revenue, capital-raising, loss-accumulating developmental-stage technology vehicle. It currently functions like an early-stage biotechnology firm operating in the heavily regulated, capital-intensive nuclear energy sector. Significant progress on engineering, site characterization, regulatory filings, and team expansion has been noted. However, the company's asset-light capital structure and the absence of a recorded revenue source raise significant questions about its long-term viability in a sector reputed for its slow multi-hundred-million-dollar licensing process.

It recorded $14M in operating losses in Q1 March 2026, with only $5.6M invested in research and development, nearly the same amount as was paid in equity-based compensation. The company has recorded an accumulated deficit of up to $73M as of March 2026. The company’s timeline for breaking ground on its Kronos micro reactor prototype is set for late 2027 with the plans for full commercialization set for 2030 and 2031.

“We estimate that the development, construction, testing and licensing of our microreactors (notably the KRONOS MMR) will continue from 2026 to 2030, with the full-scale, first-of-its-kind KRONOS energy system expected to be fully operational and licensed by 2030. Our microreactor construction permit application (CPA) for KRONOS is expected to be filed in 2026, with full construction activities commencing after NRC approval of our CPA is completed. Our KRONOS microreactors are expected to be commercially launched around 2030. We also plan on providing nuclear service support and consultation services for the expanding and resurgent nuclear energy industry in 2026, both domestically and internationally.”

Meanwhile, the company has continuously raised hundreds of millions through common stock issuances, consistent with a series of capital raises since the May 7th, 2024 IPO. These include the July and October 2024 firm commitments, in which the company raised a net total of $52.1M; the November 2024 private placement of $55M; and the May 2025 and October 2025 private placements, which raised a net total of $47.7M. In total, the company has raised up to $600M in cash through dilutive offerings amid zero revenue and rising expenses. The vast majority of the company’s executive team works on a part-time basis, with the CEO, President, and CFO concurrently working for a wide array of micro-cap TSX mining companies, as well as their involvement with the founder’s privately owned NNE’s shareholders-funded Laser Uranium Enrichment technology.

“Our business plans will require us to raise substantial additional amounts of capital. Future capital needs will require us to sell additional equity or debt securities that will dilute or subordinate the rights of our common stockholders. In addition, we may be unable to secure government grants as part of our funding strategy.”

And to add a little cherry on top, the company has already set itself up for a next dilutive equity raise, with an effective July 2025 ATM offering of up to $900M. That announcement is particularly concerning for current shareholders who should likely feel the brunt of their holdings’ dilution.

Bottom line: Contrary to press releases and marketing articles, microreactor construction and operation is a billion-dollar industry, as expensive, if not more strenuously complicated than traditional nuclear facilities. NNE -3.63%↓ is currently operating as an equity-funded R&D vehicle with a venture capital risk profile minus a venture backer. Most venture capital firms crash and burn within a few years of going into business; when dilution is added to the equation, the risk premium rises even higher. Can be the exception to the rule?

The math is unambiguous. NNE’s $569M in cash would be consumed long before the company could generate a single dollar of nuclear energy revenue. Estimates for the cost of moving from prototype to commercialization range from $6 to $9 billion. The gap between current capitalization and actual commercialization capital requirements is not a rounding error; it is an existential chasm that the current company’s structure can’t miraculously bridge even with its most aggressive dilution push.

That alone should bring into question the entire premise and real intention behind the company’s existence and raise significant red flags for current or potential public equity shareholders.

The nitty-gritty: Insiders share dump!

According to Quiverquant Jiang Yu, the company’s founder, has an estimated net worth of at least $291.8 million, as of June 3, 2026. He owns 8.4 million shares of $NNE stock and has sold 2.5 million shares since 2021, for an estimated $55.7 million. He and his executive team have been aggressively dumping shares over the past 12-18 months, with essentially zero open market purchases recorded. They have sold an estimated $168M worth of shares through option exercises.

So far in 2026, the most aggressive share dumper has been none other than “el presidente” Jiang Yu, who has sold close to 745,900 shares or $19M directly and more than 700,000 shares indirectly through I Financial Ventures Group LLC as of June 2026.

Jiang Yu has filed a total of 31 insider trades in $NNE since 2021. The most recent trade was a sale of 2,085 shares, made on Jun 03, 2026 and largest trade was a sale of 888,000 shares, made on Dec 24, 2025

“Figurehead,” I mean” CEO” Johnny Walker, hasn’t been too shy either in selling his holdings, albeit not as aggressively as the company’s founder. But with up to $20M in shares sold since December 2025, it would be fair to say that the man has come a long way from his miserable debut as a TSX nano-cap operator.

Others execs such as CFO Jaisun Garcha, director Seth Berl and CTO Florent Heidet have equally monetized their options/RSUs profitably.

Van Eck associates and Blackrock own a few million shares of$NNE

Despite its multi-billion-dollar market cap, $NNE’s underlying financial reality couldn’t be more questionable, given its lack of revenue, massive equity dilution, absence of institutional financing, and aggressive insider cash-outs. The company’s conceptual tech and distant commercialization prospects truly make the entire enterprise an extremely risky investment, on top of its founder’s own risk profile.

3-The man, the myth, and the ridicule: The ubuesque founder’s psyche!

“If humility was a sin, Jiang Yu would be an angel.”

While the lack of a working prototype, revenue line, and the absence of clear technological breakthroughs are alarming enough to paint $NNE as a risky promise, the company’s founder’s egomaniacal self-aggrandizement tendencies further diminish its prospects to a farcical construct designed to feed both the greed and the savior complex of a corporate buffoon.

In literature, an ubuesque figure (from Alfred Jarry’s 1896 satirical play Ubu roi) is a bloated, greedy character who hoards ridiculous titles, rules with infantile incompetence, and treats the realm as a personal piggy bank.

Jiang Yu holds the titles of Founder, Executive Chairman, President, Secretary, and Treasurer himself! In a parallel universe, he would be a satirical reminiscent of the North Korean dictator Kim Jong Un’s series of titles, or of the much more colorful yet equally dark triad’s psychopathic Ugandan tyrant Idi Amin’s grandiose epithets: His Excellency, President for Life, Field Marshal Al Hadji Doctor Idi Amin Dada, VC, DSO, MC, CBE, Lord of All the Beasts of the Earth and Fishes of the Seas and Conqueror of the British Empire in Africa in General and Uganda in Particular.

While the comparison between a company’s founder and an absolute dictator might seem forced, the psychological similarities speak volumes.

It looks as if Yu has established absolute structural dominion over $NNE’s financing, recruitment, branding, and board oversight. That leaves virtually no room for independent governance or checks and balances.

Yu holds a B.A. in Psychology and has a background in retail brokerage and investor relations. He possesses no advanced degrees or a strong background in nuclear physics, thermodynamics, or industrial energy engineering. A behavioral analysis of Yu’s public persona reveals a textbook high-agency, low-humility archetype frequently seen in speculative market bubbles:

Yu exhibits a deep-seated need for admiration, framing himself as an untouchable visionary with a “Midas touch.” Critical realities—such as his history with hyper-dilutive penny-stock promotions, or the fact that $NNE relies heavily on unpaid interns and marketing affiliates rather than on teams of nuclear scientists are completely erased from the corporate narrative. Despite having no deep nuclear footprint, company media routinely frames Yu as a “leading U.S. advanced nuclear technology entrepreneur” steering a “Wall Street Cinderella story.”

Yu is an expert in narrative capture—knowing exactly “what motivates retail investors. When faced with harsh short reports, like J Capital’s label of $NNE as a “shameless grift,” or lawsuits over exaggerated timelines, he doesn’t admit fault. Instead, he shifts blame outward, becomes even more optimistic, and pushes strong counter-narratives to keep market attention and validation.” Such behavior clearly paint the picture of “narcissistic supply.

Yu’s career trajectory follows the classic serial promoter pattern observed repeatedly in micro-cap markets: identify a macro hype cycle, rapidly construct a corporate vehicle to capture the narrative, execute an IPO to access public capital, dilute early, and monetize. The specific sector is incidental—the mechanics are consistent.

His prior professional involvements include a pattern of micro-cap and penny-stock promotions in prior hype cycles (cannabis, mining, clean technology) before he identified nuclear energy as his most lucrative opportunity to date.

He is genuinely skilled at identifying what the retail market wants to buy and constructing a corporate story to satisfy that demand. But this skill is entirely insufficient for the actual execution challenge of developing, licensing, fueling, constructing, and commercializing a first-of-a-kind Generation IV nuclear microreactor.

His marketability savviness is admirable. He has gradually managed to insert himself into the mainstream media, first through popular albeit fringe media platforms such as Shawn Ryan’s Podcast, which is followed by Millions of optimistic go-getters taking the world by the “cojones” types of Alpha-male wannabes. But recently, he has also inserted himself into the mainstream by appearing on Fox News Business and other respectable outlets, all of which serve a single purpose: to bait the gullible public into investing in his company’s shares.

Compensation? That is probably the best term to define Jay Yu's approach to management. Titles hoarding, aggressive press releases, sector pivots, and all sorts of gymnastics cannot hide the fact that is a business, but on paper only. In a way, Jiang Yu is still that little boy vying to escape his humble origins but perpetually getting caught by his own limitations in education, competence, and skill. That fact alone marks him as a tragic character.

Conclusion: Get rich or lie trying? Thy shall be diluted.

The story of Nano Nuclear Energy, Inc. is intimately tied to the persona and ambition of its founder: Jay Jiang Yu. In fact, the business itself does not matter: there is no real operational viability across the entire SMRs spectrum right now. The hype shall fade; and it is fading quite a bit already, especially since the collapse of NuScale Power ( ) $9 billion small modular reactors plants in Utah in 2024. Nearly all the companies in the sector are trading on momentum-driven crowd exuberance.

Nuclear energy, while seemingly less polluting than other energy sources, has a long-established track record as the most expensive approach to large-scale energy production. SMRs, rather than lowering that cost-hindrance factor with their apparent small size, merely add another layer of complexity and risk tied to their design flaws and a higher probability of accidents and leaks. Therefore, NNE 7.76%↑ is simply a "terrible project” in a sector filled with equally bad ideas, all destined to crash sooner or later.

But is also unique in that it fully captures the psyche of a recurrent tragic-comedic-cynical archetype that often makes a splash during speculative bull runs with its colorful, hyper-machismo, uber-confident, cult-leader-like personality. Jay Jiang Yu depicts such an ubuesque profile to the tie.

What isn’t exactly funny is that Jay Jiang Yu has managed to improve his economic standing by bullshitting the public with his vacuous company. With a fortune recently estimated at more than $200M, Jay Yu has somewhat earned the right to speak and be heard. His interview on the Shawn Ryan Show is an absolute must-see study in grandiose narcissism: a combination of humble-brag, self-made success masturbation, and his revolutionary technological innovation-changes-the-world grandiosity is otherworldly. And the audience bought into the nonsense. Whole!

As an example, Jay tells the interviewer that he recognized the value of acting fast by observing his slow-moving mother being outworked and out-earned in a Chinese sweatshop in New York when he was three years old!

While his crash-bag company is likely destined to flounder, Jay Jiang has effectively succeeded in “making something out of nothing” by quickly dumping millions of shares on the public before the market comes to its senses. Jay Yu is essentially confessing. The “miracle” isn’t a valuable product or service, nor is it a marketable innovation that improves millions of people’s lives. The “miracle” is him. Jay from the “Ghetto of NY” taking advantage of any opportunity presented to him to improve his lot, regardless of the ethical and moral implications.

Jay Jiang Yu's psychological profile says it all; he will maintain the facade as long as necessary. Therefore, the slew of “revolutionary ideas” press releases will keep flowing, dilutive capital raises will continue, and the share-exit dump will never stop. He and his team will suck as much blood as the “Game” permits from their listed “corpse,” and you, the believer holding onto the shares, will only have your pride to cry out to.

Potential investors should seriously re-analyze their investment thesis and investigate the company’s founder and executive structure. The business is one but in name only as is the whole SMR theme altogether. Expect more dilution for real capital has rightfully avoided the company and for a good reason.

Verdict: Expect more dilution going forward. Vampirestock! Avoid.

Disclaimer:

This report is published for informational and educational purposes only. It represents the analytical opinion of the author as of June 2026 and is based exclusively on publicly available information including SEC filings on EDGAR, company press releases, market data, and publicly available research. Nothing in this report constitutes financial advice, an offer or solicitation to buy or sell any security, or a recommendation to engage in any investment strategy.

Sources:

1. SEC Filings & Insider Transactions (Form 4, 10-K, 10-Q)

• SEC EDGAR / secform4.com / OpenInsider: Primary source for all Form 4 insider sales (e.g., Jay Jiang Yu / I Financial ~745,900 shares June 2026 for ~$19.9M; James Walker 123,688 shares; others like Garcha, Berl, Hare, Heidet). Tracks ~5.6M+ shares sold in recent periods, mostly exercise-and-sell under 10b5-1 plans.

• 10-K / 10-Q (via SEC, company IR, MarketBeat, StockTitan): Zero revenue confirmation, net losses (e.g., FY2025 ~$40M, Q2 FY2026 ~$9.2M), cash positions post-raises (~$203M–$569M), dilution details, accumulated deficits, and R&D/cash burn. Includes timelines (e.g., licensing 2026–2031, commercialization 2030–2031).

• Company S-1/S-3 and other registrations: IPO and follow-on details, dilution history.

2. Company Disclosures & Press Releases

• Official Website (nanonuclearenergy.com): KRONOS MMR™ concept art/renderings, timelines, partnerships (e.g., University of Illinois), executive bios (Jay Jiang Yu background), subsidiaries, and updates on NRC CPA acceptance, site work, and funding.

3. Stock Data, Charts & Market Context

• Yahoo Finance, Nasdaq, Barchart, TradingView: Insider rosters, price history, volatility charts (run-ups/corrections), market cap, and volume.

• MarketBeat, Simply Wall St, Quiver Quantitative: Aggregated insider stats, financial summaries, and dilution tracking.

4. Short Seller & Critical Reports

• J Capital Research (Oct 2024 report): Detailed critique on promotion, founder/insider penny-stock history, related parties (e.g., LIST), lack of nuclear expertise, governance, and “stock promote” thesis. Onsite observations and promotion tactics.

• Hunterbrook Media (2024 report): Investigative short thesis on hype vs. substance; company response via legal threats (Alex Spiro/Quinn Emanuel).

• Class Action Lawsuit Filings (e.g., Rosen Law, Law360): Allegations on overstated timelines/”laughable” regulatory claims involving Yu and Walker.

5. Founder & Executive Background

• Company Announcements / LinkedIn / Yahoo Finance: Jay Jiang Yu (Founder/Chairman/President) Wall Street analyst/entrepreneur background, philanthropy, serial ventures; no deep nuclear expertise noted. CEO James Walker profile.

• Interviews & Profiles: Self-promotional framing as visionary (e.g., Innovation Zero, podcasts).

6. Technology, Timelines & Expert/Regulatory Context

• NRC / University of Illinois Announcements: CPA acceptance, site characterization, review estimates (2027 construction potential).

• Industry News (ANS, NucNet, etc.): Contracts (e.g., Air Force), partnerships, and realism critiques on microreactor delays/costs.

• Independent Analyses (Substack, etc.): Reviews of reactors, red flags on milestones/promotion.

7. Additional Context (Reddit, Media, Visuals)

• Community discussions (e.g., Reddit on promotion/grift concerns).

• Stock charts and concept renderings (from company site, Barchart, TradingView) for hype vs. performance visuals.

• www.utilitydive.com

• https://medium.com/enrique-dans/small-reactors-big-problems-the-nuclear-mirage-behind-ais-energy-hype-77f93a3a4460

I remain convinced that the Financial Professional (Analyst, banker, accountant, investment advisor)'s main vocation is to protect society's capital, and ward off its misallocation unto unworthy and wasteful undertakings. In that regard, my goal as a stock analyst is to expose futile and potentially fraudulent stock issues. Great businesses are fairly self-explanatory; scams, on the other hand, must be denounced publicly to scare off ill-intentioned spirits.

Solidion Technology, Inc. is likely a pump-and-dump scheme. Beware!

Solidion Technology, Inc. is a risky, speculative pre-revenue de-SPAC that should set investors’ spidey senses tingling. The stock has all the markings of an artificially manipulated insider-managed dilution scheme.

Warning to the eager wannabe “Michael Burries”: you will get your spine broken. The “system” is eagerly trying to maintain confidence in the market, and short sellers are considered bad omens, if not worse. I do not advise nor advocate for retail shorting stocks! Let the pros give it a try with their investors’ capital.

The fly on the cake guides the exit liquidity.

When a fly lands on your cake, it transfers hundreds of bacteria that may compromise your immune system and make you sick.

There is probably no greater symbol of micro-cap hype than Timothy Sykes. He symbolizes the demise of many retail investors who are gullibly drawn into sponsored schemes of quick wealth promoted by the day-trading pseudo-industry.

Paid promotional campaigns are the bread and butter of many trading “gurus,” alongside selling courses, coaching, and broker sponsorships. Within the day-trading community, no one is bigger than Tim Sykes! Online trading “gurus” operate much like these nasty flies that land on otherwise deliciously looking cakes, rotting and putrefying anything they touch while passing themselves off as experts.

Tim Sykes has been tweeting nonstop about STI -1.94%↓ throughout the day (June 4th 2006), such behavior fits the classic pattern of micro-cap “managed” schemes. Any naive believers buying into this scheme could easily find themselves on the other side of a sophisticated ramp-and-dump operation.

In reality, the micro-cap trading space is a rapacious, venomous jungle that feeds on retail naivety's dreams of quick wealth. The stories of rapidly accumulated gains are plentiful, but the statistical facts show that most day traders get their a$$ handed to them before they even figure out what a stock is. Exit liquidity is the code name for the little guy, and the main function of the “ gurus” is to recruit a new batch of suckers through their marketing schemes to continuously feed the machine.

If a Tim Sykes-like guru is promoting a stock, like the road runner cartoon says: “ Mip, mip!” run! And far away thou shalt go because the real money is you, the sucker buying into an empty promise.

A classic micro-cap boom and bust volatile cycle

is up almost 400% on the news of its Patented Extreme-Climate Battery Technology Targeting Low Earth Orbit-Based Artificial Intelligence Data Centers, Lunar Economy, and Space. The company announced its Gen-ECB platform, which utilizes graphene’s thermal conductivity and radiation- resistant properties. The tech is tailored to support Low Earth Orbit (LEO) AI data centers, satellites, and planned lunar and Mars missions, including SpaceX and NASA Artemis infrastructure.

While the stock has exploded in response to the recent press release, the company’s history, capital structure, financials, and recent pivot leave a lot to be desired.

1-Press release hustling and delisting warnings:

STI -4.16%↓ has a history of issuing press releases that briefly fuel short-term speculative hysteria. On October 13, 2025, the stock surged 300% the day following the unveiling of its groundbreaking PEAK Series Uninterruptible Power Supply system. The system was engineered specifically to meet the skyrocketing energy demands of AI data centers. Within a week of the announcement, the stock crashed as momentum faded and traders took profits.

In April 2025, the company was notified of noncompliance with Nasdaq’s minimum market value requirement, which put it at risk of delisting. The stock was trading at $0.10 per share in late April. By Mid October, thanks undoubtedly to the “ PEAK SERIES UNINTERRUPTIBLE POWER SUPPLY (UPS) press release, the stock had peaked at $38 per share before crashing to $10 within a week and dropping down to $3 per share by Feb 2026. The real objective, without a doubt, was to regain compliance with Nasdaq listing standards, and in that regard, the mission was accomplished.

I believe the recent crack-up should be viewed within the same loop as previous speculative outbursts. The timing of Solidion’s recent announcement represents a calculated play on macro market sentiment.

With the investing world hyper-focused on SpaceX’s upcoming $1.75 trillion public listing, Wall Street is ravenously searching for public “proxy” stocks to capture downstream aerospace revenue. Solidion’s newly patented graphene-based power platform addresses a huge operational bottleneck – heat regulation in deep space.

By announcing that its cells can withstand extreme operational threshold ranging from -80℃ to +60℃ while maintaining over 500 continuous charge cycles, has positioned itself in the path of lucrative defense and federal aerospace procurement, potentially triggering an explosive institutional re-rating.

What has followed was a logical rise in interest in the company with its stock price reaching $35 per share by 10:00 AM on June 4th, 2026, a 400% rise from market open. Depending on market dynamics and traders' exuberance, it is reasonable to infer that the stock may likely revert to the mean whence the hype fades.

2-Dilution risks and going concern red flags

Solidion is an ambitious company, it claims to be: “an advanced battery technology solutions provider, with a patented breakthrough in extreme-climate battery technology and a strategic positioning within the rapidly expanding space and lunar economy. As commercial space activity accelerates — anchored by SpaceX's anticipated IPO and NASA's Artemis program — Solidion's Generation Extreme-Climate Battery (Gen-ECB) platform is engineered to deliver reliable, high-performance power storage for satellites, Low Earth Orbit (LEO)-based AI data centers, crewed spacecraft, and future lunar infrastructure.”

However, a brief investigation of the company’s capital structure and financing makes its bold claims sound comical and devoid of serious consideration.

In its latest 10-K Annual Report, the company clearly raises serious going concern risks tied to its history of recurring losses and inability to generate revenue.

https://www.sec.gov/Archives/edgar/data/1881551/000121390026044126/ea0276988-10k_solidion.htm

The company stated that it incurred a net loss of approximately $32.4 million for the year ended December 31, 2024, and approximately $41.0 million for the year ended December 31, 2025.

“We believe that we will continue to incur operating and net losses each quarter until the time significant production of our high-capacity anode and high-energy solid-state battery technology begins.”

The company is currently valued at $162M, with negligible revenue ($98,776) and a net loss of $51M. The stock trades at 1,992x sales with a balance sheet showing only $38,887 in cash for $2.61M in debt. Working capital is negative, and so is its free cash flow. The company's balance sheet highlights a negative accumulated deficit of $164 Millions.

Only $38k in cash for a platform that claims to be supporting Elon Musk’s SpaceX

And more importantly for traders or interested holders, the company announced in its latest 10Q that it intended to: As an early-stage growth company, the Company’s ability to access capital is critical. The Company plans to finance its operations with proceeds from the sale of equity or debt securities; however, there is no assurance that management’s plans to obtain additional debt or equity financing will be successfully implemented or on terms favorable to the Company.

Extreme climate Battery technology development and commercialization is a fairly novel industry requiring extensive investment and capital. STI -5.10%↓ balance sheet and revenues do not look particularly adequate. It is really hard to even take this company seriously in that regard. There is only one word to connote with such contradictory dichotomy: “ BULLSHIT.”

In fact, the company’s CFO disclosed on March 18, 2026, that all financial statements preceding 2024 should no longer be relied upon because of warrants accounting errors. This type of basic errors and professional negligence further call into question the credibility of a company already facing enormous pressure from its own set of expectations.

Also, management has made it clear that it will use its preferred means of financing, share issuance, to raise capital in the near future. Total shares outstanding are only 7M, but total shares issued amount to 300M. This gives the execs plenty of room to dilute in the near term and in the future. So, buyers beware!

3-Professional Hype cycles pivot hustler.

Solidion Technology has undergone multiple strategic pivots throughout the years. The company has transitioned from its initial graphene and electric-vehicle batteries to specialized storage for AI data centers and, more recently, to “extraterrestrial” applications.

• Graphene-to-EV Battery Focus (Pre-2024): Solidion began as Honeycomb Battery Company, the energy solutions division of Global Graphene Group. It pivoted its primary R&D from generic graphene applications into high-capacity silicon-rich anodes and solid-state batteries for EVs.

• Phase 2: AI Data Center Backup (Late 2025): The company pivoted its commercial strategy by unveiling the PEAK Series. This compact, high-density backup battery system was specifically built to meet the immense, space-constrained power demands of ground-based AI data centers.

• Phase 3: Extraterrestrial Power Market (Mid-2026): Solidion announced its Generation Extreme-Climate Battery (Gen-ECB) platform. This marked a shift toward space-focused tech, specifically designed for satellites, low-Earth orbit (LEO) AI data centers, and lunar infrastructure.

is an extremely volatile stock; it has frequently experienced explosive upward surges triggered by announcements of strategic pivots, such as the most recent SPACEX listing and SATELITE hype. Such happenstance is neither accidental nor random, but the classic mark of fraudulently designed micro-cap “empty vessels” navigating across headlined sectors with unsubstantiated PRs in order to capitalize on market hype.

Conclusion: Solidion Tech is a vampirestock!

On May 12, 2025, the Company effected a 1-for-50 reverse stock split of its common stock. As a result, each 50 shares of common stock issued and outstanding immediately prior to the reverse split were converted into one share of common stock. By splitting its stock, management bought itself another lifeline into one of the most liquid capital markets on earth, the Nasdaq.

Most micro-cap shells are really in the business of “ uplisting” and driving liquidity into their stocks for insiders’ enrichment. This appears to be our company's core operational business model. The red flags are just too glaring to pretend otherwise: repeated business pivots into hyped cycles, dilution-driven capital raises, warrant restructurings, going-concern warnings, and SEC delisting notices. So on and so forth.

is therefore a financially fragile, promotion-sensitive issuer whose equity value is being supported by narrative, manipulation, and corporate press releases than by durable operating economics. The cherry on the cake is topped with the alignment of penny stock “ guru” Tim Sykes to completely paint the company as a risky “ vampirestock.”

Retail investors should probably avoid this stock altogether. A high probability of coordinated low-float manipulation may cause serious damage to unsophisticated short traders. Pro or experienced speculators may likely try to give it a shot, but be wary of volatility and other unforeseeable risks.

( Not investment advice. I write for entertainment and educational purposes only. I am a firm advocate of value investing, buying and holding strong brand equity value creating businesses for the long term. Always consult a reputable and trustworthy financial advisor before trading securities. Consider a subscription to my Newsletter if you don’t mind my ramblings.)

These men didn't need central banks to smooth their path. They built vertically integrated empires with real cash flows, genuine pricing power, and the operational depth to survive contractions and expand through them. Their companies were built on industries layered with interconnected networks. Steel-fed railroads fed coal-fed manufacturing, which fed retail. A downturn in one sector stressed the system but rarely destroyed it, because the underlying demand for physical goods didn't vanish; it was just deferred. And when it returned, the survivors were positioned to capture it.

The wealth of the Nation, its capital, its credit, must be protected from the predatory poor, as well as from the predatory rich, but more importantly from predatory politicians.

Following the panic of 1873, James Hill and his partners identified the ailing St. Paul & Pacific Railroad as a golden opportunity, a railroad that could be profitable if managed well. Unlike rival barons who relied on government handouts, Hill focused on immediate profitability. He upgraded the infrastructure and aggressively extended branches into the wheat-producing country of Minnesota and the Dakota Territory. By the 1880s, he chose to build a true transcontinental line. Critics labeled it “Hill’s Folly” because he refused to use federal land grants or subsidies, choosing instead to pay for everything out of pocket. He created the Great Northern by consolidating the Manitoba and several smaller regional lines he had acquired. In January 1893, the tracks reached Puget Sound in Seattle. Hills line was so efficiently built and managed that when the panic of 1893 hit, the Great Northern was the only Northern transcontinental railroad that did not go bankrupt. Hill took aggressive cost-saving measures to keep his trains running and, in 1896, formed a lucrative business alliance with J.P. Morgan to control the Northern Pacific Railroad.

By contrast, today’s financial elite operate on an entirely different Framework altogether. While a minority are genuine entrepreneurs, the wealth of the modern billionaires is not primarily industrial; it is financial. It is denominated in equity multiples, bond spreads, and asset valuations that have been systematically inflated by four decades of accommodative monetary policy. Since Greenspan’s implicit backstop following the 1987 crash — what traders came to call the “Fed Put” — each successive generation of capital allocators has operated with a safety net that their 19th-century counterparts never had and would likely have despised.

The result is a class of FIAT billionaires whose net worth is inseparable from the policy environment that created it. Consider that the S&P 500’s price-to-earnings ratio has traded well above its long-run historical average for most of the post-2008 era, sustained not by proportional earnings growth but by the mechanical effect of suppressed discount rates on asset valuations.

When rates are held artificially low, the present value of future cash flows rises mathematically, enriching asset holders while doing nothing for the underlying businesses. The CEOs and founders who sit atop these inflated market caps are, in many cases, not wealthier because their companies have improved. They are wealthier because of the artificial rise in the value of their equity holdings.

An illustrative example is Frank Slootman, a director and former CEO of Snowflake, Inc., a provider of cloud data services for organizations in the US and worldwide. has recorded negative operating income since its founding, with aggregate net equity falling every year. The company has been persistently unprofitable yet characterized by massive stock-based comp and ballooning operating expenses. is valued at $99 Billions while struggling against its competitors and changing market dynamics. Meanwhile, insiders like Slootman have been able to build a fortune by holding and dumping their equity shares on the public. When you combine the full calendar for 2025 with the first 5 months of 2026, Slootman’s gross share dump is staggering.

In 1 1/2 years, Mr. Slootman has liquidated close to 4 Millions shares for an estimated gross value of $1.09 Billion. His net worth is estimated at roughly $3.9 Billion, which he earned by taking three major tech companies public: Data Domain, ServiceNow, and Snowflake.

Frank Slootman has led 3 companies through IPOs.

Unlike today’s Frank Slootman’s generation of share-dumping “Billionaires,” the 19th-century industrialists (many were corrupted as well) focused on collecting dividends, reinvesting profits, and gauged success by output, tonnage, and profit margins. Today, financial leaders’ success is defined by stock price, which encourages share issuance, buybacks, and insider liquidity events over actual capital formation.

The process is thus clear: executives get equity incentives, boost valuations with buybacks financed by cheap debt, and sell shares to the public at the highest prices. This is wealth extraction dressed as wealth creation.

Such is the fragile state of our leading economic and financial elites. They are dragging their way to the finish line, losing market share on the global competitive stage while their financial assets are propped up with inflationary steroids to sustain a superfluous illusion of strength and power.

Worse, the sad reality is far too obvious to ignore. The system cannot afford a healthy, structural rebalancing of assets. A genuinely healthy market can absorb a 30% correction the way a well-conditioned athlete absorbs physical stress — painfully, but without systemic damage. What we have instead is a market so laden with leverage, so dependent on continued monetary support, and so politically entangled with the fragile interests of its largest asset-owning class that a true price-discovery event could lead to a breaking point. The Fed knows this. The Treasury knows this. And, critically, the market knows it, which is precisely why every meaningful sell-off since 2009 has been met with accommodation or outright intervention.

So where does that leave us? The honest answer is uncomfortable. A structural revaluation of asset prices — one that would bring equity multiples, private market valuations, and real estate back toward levels justified by organic earnings and genuine demand — would wipe out a significant portion of the wealth held by our richest class. This should indeed be welcomed as a necessary structural, albeit painful, change in the power elite guard. But the system is way too entrenched and too fragile to allow such an event to occur.

The global money supply is rapidly increasing, reaching a new high of $121.9 trillion. In the past two years, it has grown by $17.1 trillion, a 16% rise. Since the 2022 low, the increase totals $27 trillion, or 28%. The global growth rate is approximately 7% to 8% annually. Meanwhile, the US M2 money supply rose by $1 trillion year-over-year, a 4.6% increase, reaching a record $22.7 trillion. Overall, money supply growth is gaining momentum.

The market may keep rising, unfortunately.

In the near to medium-term, the base case, then, is not a crash. It is drift, a steady grind upward, punctuated by episodes of volatility that are contained before they compound, supported by whatever policy tools remain available, and sustained by the collective unwillingness of every major institution to blink first.

The bull market must continue. The system depends on it. Therefore, the inflation of stock prices is not yet over, not because the fundamentals justify it, but because the alternative is a reckoning no one in power is willing to face.

( Just my opinion, not financial advice. I write for entertainment purposes only. Consult a trusted certified advisor before investing in securities.)

Sources:

• -Lawrence Reed; “One of the greatest entrepreneurs in history.”

• Ron Chernow, Titan: The Life of John D. Rockefeller, Sr. (1998) — The definitive biography. Covers Standard Oil's acquisition strategy, the "Cleveland Massacre" of 1872, and Rockefeller's approach to buying out distressed competitors. The core source for the article's Rockefeller passages.

• Wikipedia — "Greenspan Put": Traces the origins of the Fed Put to the 1987 crash, explaining how Greenspan's monetary responses became controversial by leading to periods of extreme speculation and successive asset price bubbles through overuse of repurchase agreements.

• William Lazonick, "Profits Without Prosperity" (Harvard Business Review, September 2014) — The most-cited academic critique of share buybacks as a mechanism of wealth extraction over genuine capital formation. Argues that buybacks primarily benefit executives holding equity compensation.

• Murray Rothbard, America's Great Depression (1963) — Applies Austrian theory to the 1929 crash; useful counterpoint to Keynesian interpretations of monetary intervention.

• James J. Hill: Empire Builder Without Peer

• The panic of 1873

“The public equity market is not a realm for experimentation or Gamification. You only get one opportunity to make a fool out of investors. Or do you?”

hyliion.com

Hyliion’s KARNO linear generator: The centerpiece of the company’s latest pivot.
Images courtesy of Hyliion.

Premise: Promises are cheap!

Thomas Healy burst onto the business scene in 2020 with the Hypetruck ERX, an extended-range electric powertrain that used a natural-gas generator to recharge its batteries. His company, Hyliion Motor, went public that same year through a merger with Tortoise Acquisition Corp, a Special Purpose Acquisition Company, valuing the company at $1.6 billion. Following the merger, the company began trading under the ticker HYLN 2.71%↑ and rose to a high of $58.66 per share. Healy briefly became the youngest self-made billionaire in the USA, with an estimated net worth of $1.5 billion by October 2, 2020.

These were the 2020s EV SPACs’ go-go days, when dozens of pre-revenue electric-vehicle and battery startups bypassed traditional IPOs to go public via blank-check mergers. Companies such as Nikola, Fisker, Canoo, Faraday Future, and Lordstown used SPACs to raise billions in cash, promising to disrupt the auto industry with revolutionary battery tech, electric pickup trucks, and delivery vans. Most of these “darlings” went bankrupt; Hyliion was severely wounded but managed to pivot. Its stock had crashed to under $1 per share by November 2023, but Healy neither diluted nor engaged in reverse stock splits to stave off bankruptcy. He had saved the bulk of his SPAC cash to live another ...bubble!

Thomas Healy is back on the scene with “Karno,” restructured and adapted to today’s energy needs. Investors are increasingly optimistic about Hyliion’s modular, fuel-agnostic power generation capabilities scaling to support the massive energy demands of AI-driven data centers.

Karno is yet another technology “purchased rather than built.” Another revolutionary energy breakthrough promised to investors, yet another revenue-less, uncommercialized product. And Thomas Healy is once again riding his stock and promoting his tech in a new hyped-up equity market driven by hysterical “FOMO” hunters!

Does he deserve a second chance?

is valued at $1.18B on zero revenue spent ( gov R&D makes up the bulk of earnings.)

The first experiment:

Hyliion Holdings exemplifies the classic 2020 SPAC boom-and-bust cycle in green technology. Once valued at billions on promises of revolutionary electric trucking, the company has since abandoned its original powertrain business, burned through substantial capital, and pivoted to the unproven KARNO generator technology. While recent military contracts and a 2026 stock rebound spark optimism, persistent losses, negligible commercial revenue, and a history of missed timelines warrant deep skepticism for long-term investors.

The 2020 SPAC Rise and Spectacular Fall

Hyliion merged with Tortoise Acquisition Corp in 2020 amid EV and sustainability euphoria. The stock surged to an all-time high closing price of $55.85 in early September 2020. But the company was marred with multiple red flags from the onset:

• Unsubstantiated 30% fuel savings claim:

  The Fuel savings, a central theme in Hyliion's marketing for its Hybrid-X retrofit on a Class 8 diesel truck, lacked studies, scientific papers, or independent validation to support them. Bonitas's research investigation showed that “pilot programs” like the P.A.M. Transportation reported only a small percentage of savings after 2 years, not the 30% promised by the company.

• Technology not proprietary or impressive:

  Hyliion’s key battery management system (BMS) was acquired from Gentherm for under $1 million (~$698k in cash, with Gentherm recording a loss), which equated to pennies per Hyliion share. It wasn’t revolutionary tech; it was a means for Gentherm to sever any further relationship with Hyliion’s execs.

• Failed/limited customer adoption:

  Many listed “customers” or partners in presentations were just testers or demo recipients with no significant follow-on orders. For example, only a few actual systems were sold to major names like Wegmans or Penske, compared to the claimed deployments. Partners like Dana developed their own solutions instead of relying on Hyliion.

• Pattern of exaggeration by CEO Thomas Healy:

  Bonitas highlighted shifting product designs (trailer to tractor) while keeping the same 30% claim, fake or overstated credentials (e.g., misrepresenting a “NASA Create the Future Award” as a NASA award), and overly optimistic projections that strained supplier relationships.

Because of the Bonitas Research report and general public scrutiny of overvalued EVs startups, suffered a devastating decline, losing over 90% of its value in subsequent years as execution faltered. Following cost overruns and delays, Hyliion entirely wound down its powertrain segment, laid off 175 employees and pivoted to stationary power. The new “Elon” had failed, much like Lordstown, Nikola, Fisker and others.

Hyliion Hypertruck ERX prototypes – remnants of the original vision now largely wound down.

The KARNO “Turnaround”: Promising Technology, Execution Risks.

The Karno generator is a flameless, linear heat generator “developed” by Hyliion. It generates electricity by using heat to expand a trapped working gas, which drives a piston linearly through a magnetic field. Unlike traditional internal combustion engines, which rely on controlled mini-explosions and complex mechanical components, the KARNO system uses a simple thermodynamic cycle. Therefore, it boasts higher efficiency and requires minimal maintenance.

Ok, let’s put things into perspective: far from in-house technological development, “ Karno core 3D technology” was purchased from GE Aerospace in 2022 for $37M to be integrated into electrified heavy-duty trucks and stationary power solutions.

The hypertruck ERX powertrain business had failed following the SPACs bust of 2021-2022; management shifted into electricity generation. This followed a pattern of technological acquisitions characterizing Thomas Healy’s operational model. The KARNO was initially purchased to power semi-trucks. Hyliion completely shifted its business focus in late 2023 to develop the KARNO generator for stationary power generation and EV charging.

Red Flags:

1. From the horse’s mouth himself, the “ system is more expensive” than diesel but cheaper than fuel cell. The KARNO system operates on a linear heat-generation model akin to that of a Stirling engine. Historically, these engines are notorious for mechanical challenges. Skeptics have noted that continually reversing a linear piston’s direction without a rotary crankshaft can waste energy and create immense stress on the magnets and moving parts.

“While Stirling engine technology is not new, their commercial launch into off-grid power applications is relatively new. Their fuel-to-electrical efficiency (10%-12%) is roughly half that of internal combustion engines (22%-25%), meaning that for the same power output, they require double the fuel intake. When providing 5.65kW of power, the Stirling engine consumes 112.25m³/d (3,964ft³/d) while the MX Primegen consumes 56.8m³/d (2,006 ft³/d). As the additional energy is lost to heat, it means that Stirling engines can offer more heat output at the same power output of an internal combustion engine, but with double the fuel, so these advantages may be lost for overall site efficiency or fuel use effectiveness. Stirling engines require specialist training for commissioning and service. In some cases, major components cannot be serviced in the field (or uneconomical to service even with the original manufacturer), and a full unit replacement may be necessary if a breakdown occurs. Industry is still assessing the true field reliability of these units, as many end users report failures occurring after approximately two years with little to no warning.”

2. Relying solely on expanding/contracting gases (like helium) to drive linear electric motors, rather than on direct combustion thrust, leads some engineers to question the theoretical efficiency limits. Also, linear motors come with significant drawbacks such as high upfront operational costs, extreme heat generation, low vibration dampening, vulnerability to contamination, and lack of inherent self-locking when power is removed.

First, the manufacturing cost of linear motors is high. Since linear motors require precise manufacturing and assembly, they also need higher-quality materials, which increases manufacturing costs. Secondly, the heat dissipation problem of linear motors is more prominent. Linear motors generate a lot of heat during operation. Due to their structural characteristics, the heat dissipation area is relatively small, so special heat dissipation measures need to be taken, otherwise it will affect its normal operation.

3. Hyliion claims the KARNO’s high efficiency is unlocked by complex, 3D-printed metal components and recuperators. Critics point out that printing these intricate heat exchangers at scale—and ensuring they withstand constant thermal cycling and high temperatures—remains a massive engineering hurdle.

The engineering hurdle must be one of the reasons that led GE to sell its “ Karno” Technology in the first place. The KARNO generator cannot be built using traditional machining; its internal heat exchangers can only be produced using advanced 3D metal printing (additive manufacturing). By selling the generator design while retaining its massive GE Additive division, GE secured a long-term arrangement under which Hyliion would have to buy expensive 3D printers and materials from GE to manufacture the units. GE effectively sold the recipe but kept an exclusive right to sell the ovens.

It looks a lot like Thomas Healy “got played” by GE!

Unproven linear technology, high replacement costs, and a lack of scalability raise serious questions about the materiality of Hyliion’s recent pivot. Commercializing a brand-new thermodynamic generator requires hundreds of millions of dollars in validation, testing, and regulatory approvals. GE offloaded 100% of those expensive development risks to Hyliion. Through its stock ownership, GE ensured that if Hyliion successfully scaled the KARNO technology globally, GE would still profit from the financial upside without spending its own capital.

-A look into the most recent Q1 “ language.”

Hyliion Holdings released its latest Q1 report on May 12th, and the wording was perplexingly cautionary, guarded, and shallow. Hardly the marks of a technologically and commercially viable innovative company gaining market shares and growing earnings. Hyliion’s current focus is the KARNO linear generator — a fuel-agnostic system targeting data centers, military, and industrial power applications. Recent positives include UL testing progress, Navy sea trials, LOIs, and multi-fuel demonstrations. In its corporate website, Hyliion Holdings ($HYLN) claims:

• It executed an LOI with advanced data center developer VFG Holdings for up to 250 KARNO Cores, or 50 megawatts, targeted over five years.

An LOI ( Letter of Intent) is a preliminary document outlining the key terms of a proposed business transaction before a legally binding contract is drafted. It is meaningless and immaterial for long-term shareholders!

• Nearly 750 KARNO Cores under non-binding letters of intent, representing more than $400 million of potential revenue at current pricing. ( Potential is the key wording. Potential does not materialize into earnings or cash flows!)

• On track to complete the deployment of the approximately 10 early adopter units in 2026 and commercialize the KARNO Power Module by year end.

• Commenced build of an 800-kilowatt KARNO system for an unmanned U.S. Navy vessel, the same platform to be used in multi-megawatt systems for data center applications

• Reaffirming $40 to $50 million in expected additional U.S. military contracts during 2026

Demonstrated dynamic in-operation fuel switching across diesel, natural gas, and hydrogen on a single KARNO reactor.

The language is clear: the Karno technology is not operational. It is still in the “development and demonstration phase. “It is on track to be completed.” “It has commenced build,” and, as a whole, the gambit is revenue-less, except for R&D spent under a US government contract.

From the company’s website summary alone, it is clear that the much-heralded Karno pivot is far from a materially viable or guaranteed turnaround in execution. Commercialization of the 200 kW Power Module is now targeted for late 2026; the timelines have slipped consistently with the project. The stock trades at a significant premium to sales (190x), with zero earnings, and is valued at 6x book value, even as it records -$45M in operating cash flow. Also, the company faces established players in power generation, while its scaling, manufacturing, and profitability remain uncertain.

Thomas Healy is making the rounds to promote “ Karno.”

Thomas Healy is back on the roadshow, hyping up his new “ pet project”; but much like the old one, the Hypertruck ERX core technology, little should be expected out of it, and investors must seriously re-analyze their whole investment thesis by researching onto the feasibility and scalability of “ Linear power generation.”

Thomas Healy has been selling “ some shares.”

Final Verdict: Can’t trust this!

Thomas Healy’s linear generator technology is the subject of an intense debate within the scientific, engineering, and, in our case, investment communities. While revolutionary in theory, its widespread applicability has never been demonstrated despite 200 years of trials and investments. By most experts’ accounts, the technology is more expensive and far less effective than classical turbines and internal combustion engines. So, while Hyliion’s pivot toward energy generation is commendable, the economics supporting its strategic realignment are shaky at best and potentially disastrous for shareholders.

Thomas Healy earns around $2M/yr in total comp on top of a fortune estimated at around $150M. Let’s just say the guy won’t starve any time soon!

But many trusting retail investors bought into Healy’s Hypertruck ERX scheme in 2020 and got burned. They deserve reparations. The cash saved after the ERX gas turbine’s dissolution amounted to up to $300M and could have been used to repay shareholders. The company should have either gone private or delisted to the OTC to conserve cash.

The public equity market is not a realm for scientific experimentation and financial gamification. Thomas Healy lost investors’ “Trust” after his SPAC’s EV turbine debacle; yet he pivoted into stationary power generation as if nothing had happened. He moved on as if hundreds of millions of dollars in investors’ capital had not been incinerated in a failed enterprise. Such actions are unwarranted, dishonorable, uncommendable, and untrustworthy. While he did not file for bankruptcy like many of his SPACs’ “go-go years” peers, he effectively went bankrupt “ethically and morally” by bypassing his shareholders’ voices and needs before launching his vision to revolutionize linear generator technology.

Hyliion Holdings should therefore be approached as a purely speculative, hyped AI-adjacent infrastructure play. It is certainly not a sound, long-term, operational, revolutionary energy company. The stock is up 475% y/y, driven by AI FOMOs and last-ditch speculators. Insiders have been slowly selling shares, but not aggressively enough to cause a panic exit. Trade consciously and mitigate volatility, but do not put all your eggs in such an unproven technology.

Sources & Further Reading:

• Hyliion Investor Relations: investors.hyliion.com

• Q1 2026 Earnings Release: Business Wire

• Yahoo Finance HYLN Quote & History: finance.yahoo.com/quote/HYLN

• Macrotrends Historical Data: macrotrends.net

• https://www.bonitasresearch.com/company/hyliion-nyse-hyln/

https://www.freightwaves.com/news/

This report is published for informational and educational purposes only. It does not constitute investment advice, a solicitation to buy or sell any security, or a fiduciary recommendation of any kind. Readers should conduct their own due diligence and consult a qualified financial advisor before making any investment decision.

Alarma!!!!!!

57 years of cushy executives’ salaries, taxpayers and shareholders subsidized Failure.

I don’t care for Wall Street’s shenanigans. I do not in any shape or form encourage trading or shorting stocks. I find such endeavors financially irresponsible in today's environment of zombified financialism and neutered pricing discovery. Only fools or geniuses try to “ play the market”, and I humbly bow out to both groups. My goal, however, is to raise the alarm and highlight the red flags. That’s the vocation of the financial analyst: exposing and trying to restrain the misallocation of capital onto unworthy promises. On this matter, I am fully dedicated.

FuelCell Energy, Inc. ( )

Premise:

FuelCell Energy, Inc. has been trending across various trading and investing social media communities as “investors” (sarcasm) debate whether the company can capitalize on the data center and AI power demand surge, with bulls pointing to potential commercial contracts while skeptics cite historical dilution and execution risks. Community discussion is heavily focused on the stock’s massive volatility, intense options activity, and comparisons to peers like Bloom Energy ( ) as traders ( more appropriately) watch for a breakout or a pullback.

FuelCell Energy (FCEL) and the broader hydrogen sector are experiencing a massive momentum rally driven by a rush from hyperscalers to power AI data centers. With grid interconnection queues stretching out for years, major tech companies are scrambling for off-grid and on-site “ time-to-power” solutions. Fuel cell companies, specifically FuelCell Energy, are pivoting their infrastructure toward resilient, “AI-ready” base-load power platforms to meet surging energy demand. has surged significantly following strategic data-center announcements, new board appointments, and higher-than-expected revenue reports. Despite massive year-over-year gains, the stock remains well below its multi-year historical highs, making it a favorite for short-term and momentum traders.

Stock Price History (volatile hype cycles; recent surge on data-center narrative, with sharp pullbacks):

In reality, has a decades-long history of struggling to commercialize its carbonate fuel cell. Despite over fifty years in operation, the company has never achieved profitability. Its financial history is marked by persistent negative gross margins, execution challenges, heavy reliance on equity dilution, and multiple restructurings. Although recent revenue growth (FY2025: $158M, +41% YoY) suggests progress, it obscures ongoing cash burn and widening losses (FY2025 net loss of $191M). I believe FuelCell Energy’s current clean tech narrative: promising carbonate fuel-cell technology for distributed power, data centers, and hydrogen applications, isn’t anything but the same FuelCell of old; investors should thus think carefully before buying into the current hype cycle.

Key skeptical Factors:

• Cumulative net losses exceeding $1.3 billion over the past 15 years with no end in sight.

• 1-for-30 reverse stock split (Nov 2024) masks a pre-split price that had fallen below $1.00 — a Nasdaq compliance emergency, not a capital strategy.

• Structural dilution engine: >$800M raised via ATM equity offerings since 2020, with share count growing 132% from FY2019 to FY2023 before the reverse split cosmetically reset optics.

• Gross margins have been persistently negative; no Wall Street consensus model projects consistent profitability before 2030.

• Multiple executive departures, workforce reductions of 13-22%, and governance red flags including SEC action over prospectus failures.

• Current market cap ($940M at $17.65/share) implies a premium multiple on negative-margin revenue — a purely speculative valuation.

The surge: AI data center demand.

Deployed fuel cell systems.

FCEL stock has experienced sharp volatility and significant upside in 2025–2026, driven almost entirely by the AI/data center power narrative. Key catalysts include:

• March 2026: Launch of a standardized 12.5 MW “Power Block” (10 × 1.25 MW modules with integrated absorption cooling for AI thermal loads). The company positioned it as a rapidly deployable, utility-grade solution for grid-constrained data centers.

• Pipeline Explosion Claims: Business development pipeline up 275% since February 2025, with the “vast majority” from data center customers. Over 80% of the commercial pipeline tied to data centers by early 2026. Q1 2026 saw >1.5 GW in new proposals.

• Partnerships: Collaboration with Sustainable Development Capital LLP (SDCL) targeting up to 450 MW of identified projects (announced ~Jan/Feb 2026). Earlier MOU with Inuverse for up to 100 MW at Korea’s AI Daegu Data Center (phased from 2027).

These announcements fueled multi-day surges (e.g., +21% in one session in April 2026) and pushed the stock toward 52-week highs near $22+. Market cap fluctuated into the $900M–$1.1B range amid high volume.

While the narrative is compelling—fuel cells offering behind-the-meter, continuous, low-emission power with usable thermal output for cooling—the facts on the ground remain consistent with FCEL’s 57-year history:

• No Major Firm Contracts Announced: Announcements center on proposals, MOUs, and pipelines—not binding, revenue-committed deals at scale. The SDCL and Inuverse agreements are non-binding or early-stage. Historical backlog has repeatedly disappointed on conversion.

• Revenue Still Modest: Q1 FY2026 revenue $30.5M (+61% YoY) driven largely by existing South Korea deliveries and services—not new data center wins. Product sales jumped but gross margins stayed deeply negative. Net loss ~$26M; ongoing cash burn.

• Manufacturing Scale Gap: Plans to expand Torrington facility from ~100 MW to 350 MW “over time.” Current capacity and utilization remain far below what multi-GW pipelines would require. Past scaling promises have underdelivered.

• Peer Comparison: Bloom Energy (BE) has secured billions in actual data center contracts (e.g., Oracle, utilities) and achieved better gross margin progress. FCEL is playing catch-up in a market where execution speed and balance sheet matter.

-Company Legacy: Decades of Pivots Without Commercial Breakeven

1-Founding Through IPO and Early Commercial Pivot (1969–1999)

Chemical engineers Bernard Baker and Martin Klein founded ERC in Danbury, Connecticut, in 1969 to develop fuel cells and rechargeable batteries. Through the 1970s–1980s, the company relied heavily on U.S. military and utility sponsorship for low-temperature fuel cells and silver-zinc batteries before shifting focus to high-temperature carbonate fuel cells (its “Direct Fuel Cell” platform). Revenues in the late 1990s were overwhelmingly government-funded (87–97% from DOE and similar sources). In 1992, Klein retired from the company and went on to found Electro Energy Inc., while Baker continued to guide ERC (FuelCell Energy's predecessor) through its eventual NASDAQ public listing. In 1997, Baker stepped down as CEO and mechanical engineer Jerry Leitman took over. By 1999, ERC spun off its battery business (Evercel) and fully rebranded as FuelCell Energy,Inc., after a 1.5-to-1 stock split, betting everything on stationary fuel-cell power generation. This was the first of many “full commitment” moments that never delivered breakeven.

Above: FCEL headquarters/manufacturing facilities in Danbury/Torrington area (company and news images).

2-Global Expansion, Revenue Peaks, and Repeated Declines (2000s–2010s)

In the 2000s, FuelCell Energy experienced a dramatic stock-market mania during the California energy crisis, followed by a sharp reality check as the company pivoted its focus. Driven by the Dot-Com boom, its stock soared to extraordinary (split-adjusted) highs in 2000 but then sharply declined as investors realized the industry still required extensive research and development.

During this decade, the company’s activities included:

Commercialization and Testing: The company scaled up its Direct FuelCell (DFC) power plants, moving from pre-commercial phases to testing facilities capable of megawatt-scale output.

Government and Industry Partnerships: FuelCell Energy relied heavily on government support. In 2000, it secured a $19.4 million contract from the Department of Energy (DOE) under the Vision 21 program and collaborated with the U.S. Navy on a 500 kW demonstration project at the Philadelphia Navy Yard.

International Expansion: The firm expanded its global presence by establishing manufacturing and testing operations in Europe through a partnership with MTU, a division of DaimlerChrysler.

National Focus on Hydrogen: The decade also saw a strong push for hydrogen technology, bolstered by federal initiatives such as President George W. Bush’s 2003 Hydrogen Fuel Initiative, which helped sustain the renewable energy sector.

The 2000s also brought early commercial deployments and a major Asian push via the 2007 POSCO Energy partnership (targeting South Korea). This produced notable projects, including the 59 MW Gyeonggi Green Energy Fuel Cell Park. The company also acquired Versa Power Systems (2012) for solid-oxide technology and pursued joint ventures (e.g., Fraunhofer IKTS in Europe). Revenue peaked in the low-to-mid $180 million range around 2013–2015 amid these deals and DOE grants.

Yet even at peak revenue, the company was deeply unprofitable. Gross margins were negative or razor-thin because module production costs remained stubbornly high at low volumes, long-term service agreements (LTSAs) carried heavy maintenance/replacement obligations, and R&D overhead never scaled down. The POSCO relationship was terminated in 2020 amid disputes and shifting economics. Revenue then collapsed—dropping ~63% from the 2013 peak to $70 million by 2021—as projects lagged, competition intensified, and policy support proved fickle.

Leadership churn accelerated: longtime CEO Arthur “Chip” Bottone was terminated without cause in June 2019 amid a severe liquidity crisis, workforce cuts, and a “going concern” warning. Board member Jason Few was appointed CEO in August 2019 and remains in that role. This was not an isolated event—decades of CEO transitions and restructurings reflect a chronic inability to translate technology into profitable operations.

2020s: More Restructurings, Revenue Recovery, Widening Losses

Throughout the 2020s, FuelCell Energy (NASDAQ: FCEL) navigated a turbulent transition, evolving from a niche hydrogen fuel cell developer into a self-described AI-focused distributed power provider.

The decade opened with a massive rally as investors piled into clean energy names. FuelCell rode the wave, raising capital to advance its solid-oxide platforms and carbon-capture technology. The hangover was predictable: commercial deployment proved far more costly than anticipated, net losses mounted, profit margins stayed elusive, and the company suffered a significant blow when its partnership with POSCO Energy in South Korea collapsed.

Survival came through cost-cutting and a pivot toward long-term service agreements — most notably with Gyeonggi Green Energy — while many hydrogen peers failed to make it through the shakeout at all. Recognizing that central utility grid delays were structurally intractable, management shifted focus toward continuous on-site baseload power generation.

By 2026, the repositioning had taken on a sharper marketing angle. The company now claims that over 80% of its project pipeline is tied to data centers and digital infrastructure, pitching its modular systems as a source of steady baseload power that also produces usable water and thermal energy for cooling server racks. To accelerate commercial traction, FuelCell launched a packaged 12.5-megawatt utility-grade power block designed to bypass the lengthy grid interconnection approvals that have become a chokepoint for hyperscale data center buildouts.

1-Financial Track Record: Revenue Volatility, Perpetual Losses

FuelCell revenues have varied with projects and grants, but have never turned profitable. Its peak revenue was followed by declines and a $188M partial recovery in FY2013 amid renewed hype.

FuelCell had a multi-year manufacturing and distribution deal with POSCO, including a large order (about 70MW) completed around 2013 and a record 122 MW order for kits and services announced in late 2012-the biggest in the fuel cell industry at that time. These shipments significantly boosted product revenues in FY2013.

The company was positioned as a leader in molten carbonate fuel cells for clean, efficient baseload power, with hopes of global expansion. However, revenue did not hold at that level and trended downward over the years.

Even at peak revenue in 2013, the company was deeply unprofitable. Gross margins were negative or razor-thin because module production costs remained stubbornly high at low volumes, long-term service agreements (LTSAs) carried heavy maintenance/replacement obligations, and R&D overhead never scaled down. The POSCO relationship was terminated in 2020 amid disputes and shifting economics. Revenue then collapsed—dropping 63% from the 2013 peak to $70 million by 2021—as projects lagged, competition intensified, and policy support proved fickle.

Revenue vs. Net Income (2011–2025, $ millions)
(Data: Macrotrends / Company filings)

In its fiscal Q1 2026 (ended Jan. 31, 2026), revenue rose to $30.5 million (up from $19.0 million YoY, driven by product sales), but the company still posted a gross loss of -$5.9 million and a net loss of -$26 million. Operating cash burn was -$34 million for the quarter.

Margins remain deeply negative (gross margin –19% in Q1), far from peers like Bloom Energy (BE), which has turned positive on gross/operating/net bases. Production scaling lags promises, and backlog growth has been described as stagnant in critical analyses. Liquidity is propped up by equity raises: in Q1 alone, FCEL sold 6.4 million shares via at-the-market (ATM) offerings for ~$55 million net proceeds. This is not new—dilution has been relentless for years, with share count surging repeatedly to fund operations.

Historical patterns show boom-bust cycles: an 80%+ stock crash in prior periods amid missed profitability targets, followed by fresh hype. Analysts’ consensus 12-month price target sits around $8.24 (high $12, low $6), implying material downside from recent $12+ levels, with warnings of “7 severe” red flags (e.g., dilution, negative cash flow).

2- Ridiculous Dilution/Stock-split Gamesmanship

FuelCell Energy ($FCEL) has a documented history of multiple reverse stock splits, a common feature among long-term unprofitable, cash-burning companies that repeatedly issue equity to fund operations. These splits do not improve underlying fundamentals but serve to maintain Nasdaq listing compliance (minimum bid price rules), reduce the number of outstanding shares for psychological/per-share metric optics, and facilitate continued capital raising.

On November 8, 2024, FuelCell consolidated every 30 shares into 1. The pre-split price had fallen to roughly $0.51–$0.72 per share — the Nasdaq minimum bid threshold is $1.00, and the company was at risk of delisting. The reverse split was a compliance maneuver.

Here is what the split did not change: the number of authorized shares remained at one billion. The dilution machinery was left fully loaded. Sure enough, post-split shares have already grown from about 20.4 million at the time of the split to roughly 53.3 million by May 2026 — an increase of 161% in 18 months, driven by continued at-the-market (ATM) equity issuance. FCEL has been here before.

SHARE COUNT MILESTONES

Oct 2019 — shares outstanding 193.6 M (pre-split)

Oct 2023 — shares outstanding 450.6 M (pre-split, +133%)

Nov 2024 — 1-for-30 reverse split 20.4M post-split

May 2026 — shares outstanding 53.3M (+161% since split)

Authorized shares (unchanged)1,000,000,000

The pattern is to raise equity at low prices to cover losses, diluting the stock price and causing it to fall below Nasdaq’s $1 minimum. This triggers a reverse split, which is 1-for-30 split, which was repeated. extreme consolidation, and the company has since diluted its shares again, now more than twice the number after the split. The split is merely cosmetic; the losses are structural.

A share purchased before the late 1990s forward splits would have been reduced by a factor of approximately 720x (30 × 12 × 12, plus earlier adjustments) through the reverse splits alone. This illustrates extreme long-term dilution when combined with ATM offerings.

One share bought prior Nov 17th 1999 is worth 0.00138888888888889 shares today.

Since 2020, FuelCell has raised over $847 million in equity capital through ATM offerings.

The $488M raised in the 2021–2022 window alone — during the height of clean-energy speculation — was sold at a split-adjusted average price of roughly $0.26 per share. That capital is now funding a business with negative gross margins. The cash balance of $379.6M at the end of Q1 FY2026 looks healthy on the surface, but it is almost entirely the product of transferring shareholder investment into an operating loss account. At the current burn rate of roughly $125M per year, that runway is about 27 months — and management has shown no hesitation in replenishing it with further ATM issuance.

“During the first fiscal quarter, we delivered strong revenue growth, sharpened operating discipline, and strengthened our liquidity position — all while positioning FuelCell Energy to capture the defining opportunity of the AI era.”— CEO Jason Few, Q1 FY2026 earnings release, March 2026

Similar language appeared before every prior cycle of disappointment. The “AI era” opportunity is real — data centers genuinely need reliable on-site power. But $FCEL has not yet demonstrated it can deliver that power at a price that covers its own costs.

3-Past Controversies and Governance

FuelCell Energy’s 57-year track record includes not only chronic unprofitability and dilution but also recurring controversies involving disclosures, regulatory scrutiny, shareholder disputes, executive turnover, and governance friction. While none rise to the level of major accounting fraud, they form a pattern of aggressive optimism in communications, capital-raising pressures, and alignment issues that erode investor trust.

• 2020 SEC action: The company (and broker NFS) was charged with failing to deliver prospectuses for>$148 million in at-the-market shelf offerings. FCEL cooperated and avoided penalties, but it highlighted sloppy capital-raising practices.

• PPP loan drama (2020): FCEL received $6.57 million in Paycheck Protection Program funds; the SEC investigated potential misuse/misrepresentation. A major shareholder (POSCO Energy) sued for books-and-records inspection, alleging securities violations, financial misrepresentation to secure the loan, and excessive debt risk. The company prevailed in Delaware Chancery Court (claims dismissed with prejudice) and repaid the loan, but the episode underscored liquidity and governance concerns at the time.

• Short-seller clash (2020): FCEL publicly disputed claims of misleading disclosures around Long Island Power Authority (LIPA) projects, which were excluded from backlog/revenue guidance. The company pushed back aggressively, but it highlighted questions over project certainty and revenue recognition.

• Older issues include a 2014 investor probe into potential securities-law violations tied to financial statements and a 2014 director resignation letter blasting leadership for ignoring concerns. A 2022 union complaint alleged the then-CEO illegally fired workers after unionization (creating safety risks). Recent state scrutiny could impose a ~$2.1 million penalty over jobs shortfalls tied to a 2015 Connecticut economic-development loan.

These are not Enron-level scandals, but they fit a pattern of aggressive optimism in disclosures, capital-market dependence, and external scrutiny that erodes trust.

4-Management Turnover, Governance Issues, and Executive Pay Scrutiny

Leadership instability has also been a recurring theme. The February 2026 proxy revealed the company quietly parted ways with four senior executives over the prior year, including terminations of EVP/General Counsel Joshua Dolger (without cause, Jan. 2026) and EVP Strategic Partnerships Michael Lisowski (2025). This follows earlier high-profile exits, such as the 2019 ouster of longtime CEO Chip Bottone amid restructuring and a “going concern” warning.

Executive compensation has drawn fire. “Say on Pay” votes have been weak (e.g., 48% approval in a prior year), prompting adjustments to align pay with revised (more realistic) backlog/liquidity targets amid policy uncertainty and ITC expiration/reinstatement volatility. The proxy also highlighted employee bonuses for cost-cutting ideas—telling in a company that has repeatedly restructured (17% then 22% workforce cuts).

Insider selling has coincided with price pops, further eroding confidence. These are not isolated “scandals” but signal execution risk and potential misalignment with common shareholders.

Valuation and Implications

For long-term value-focused investors, is probably an uninvestable proposition! The red flags are glaring, the abuses too numerous to count. In fact, it would be fair to classify the company among “ zombiestocks!" The fact that one share bought in 1999 is now worth $0.00138888888888889 is a mind-boggling otherworldly insult to the concept of investment altogether!

For the speculative and trading addicts, “ the field is wide open. Have a go at it.” Listen to your experts on X or whatever. You are not my audience, and I seek not to convince you in any way, shape, or form!

In fact, it would be a fool’s errand to assign a valuation proposition to this “ vampire company” riding on 57 years of mediocrity, government subsidies, and equity dilution to stay relevant for yet another hype cycle of pump-and-dump. I refuse to bend my honor to such futility.

A 2025 study titled “Imagining a Hydrogen Economy: From Grand Technological Utopia to Enabler of the Energy Transition in Three Waves Since the 1970s,” by Laurens S.F. Frowijn, David M. Baneke, and Gert Jan Kramer, published in Energy Research & Social Science (Elsevier), underpins the hydrogen economy “romanticism” born of a grand technological utopia in the wake of the oil crisis of the 70s.

In that publication, the authors use historical analysis, sociotechnical imaginaries framework, and utopian concepts to show how hype cycles drive policy and investment in the hydrogen economy—but often clash with technical, economic, and infrastructural realities. It identifies three distinct “Waves” of high expectations, each shaped by different societal, technological, and political contexts. Rather than a linear progression, hydrogen narratives have shifted from grandiose techno-utopian dreams to more pragmatic, transitional roles today.

I fully concur with the authors’ cyclical, evolutionary wave-of-investment construct. However, I also believe that the “hydrogen utopian dream “ was also hijacked by securitized endeavors such as $FCEL 33.72%↑ multi-decades cycles of boom and bust as its founders and executives might have cynically used and abused governments, corporations, and societal hope for the emergence of an infinite, abundant energy substitute to fossil fuels to eke out a living (great salaries and generous benefits) on the backs of taxpayers and shareholders.

Not a bad hustle if you ask me!

Bonus: For the laugh!!!

This short video resumes how I feel when I hear the Fintwits investment pitches on Fuelcell Energy, Inc. ( )

Primary Sources

FY2025 10-K: SEC EDGAR — FuelCell Energy, Inc. (FY ended October 31, 2025)

Q1 FY2026 10-Q and Earnings Transcript: Company filings and The Globe and Mail (March 9, 2026)

SEC Proxy Filing (PX14A6G, 2024): ATM share issuance history and reverse split disclosure

Historical Revenue / Net Income Data: Macrotrends.net

Market Capitalization Data: StockAnalysis.com, WallStreetZen, Robinhood (as of May 2026)

Balance Sheet Data: SimplyWallSt, StockTitan (FY2025 and Q1 FY2026)

Stock Split History: CompaniesMarketCap.com

https://investor.fce.com/Investors/default.aspx

“The boom produces impoverishment. But still more disastrous are its moral ravages. It makes people despondent and dispirited.” LVM

1- The Wall Street casino: Nicholas Darvas’ early warnings.

- In my latest write-up, I highlighted Nicolas Darvas’s unique place among successful speculators and traders. Darvas did something unusual on Wall Street: “He beat the house at its own game and lived to tell his story.” After all, he was an outsider, a non-institutionalist who shed a bright light on the well-kept truth about the nature and intent of the financial market: an institution designed to separate the average man from his money.

Nicolas Darvas was a Renaissance man. Literate and athletic, he was good at a wide range of activities.

He trained to be an economist at the University of Budapest.

He earned a living at occupations as disparate as creating crossword puzzles and sportswriting.

He played championship ping-pong. He toured Europe and the U.S. as one of the world’s highest- paid ballroom dancers, book publisher Lyle Stuart noted in the preface of one of Darvas’ works.

Darvas’ most enduring feat was conquering Wall Street — in his spare time. Still dancing full-time, he parlayed a $3,000 bet on a speculative Canadian mining stock into a series of investments that culminated in a $2.25 million portfolio.

That success earned him a profile in Time magazine. His 1960 book, “How I Made $2,000,000 in the Stock Market,” was a best-seller. It still pops up on reading lists for investors. Darvas’ book is notable for its skepticism about Wall Street’s conventional wisdom.

On The Right Side

He wrote in a later book titled “Wall Street: The Other Las Vegas”: “Wall Street is nothing more than a huge gambling casino, bristling with dealers, croupiers and touts on one side and winners and suckers on the other. ... I had been a winner and was determined to stay one.”

“I have been speaking of the stock market collectively as a lottery, a gambling enterprise, a casino. This is no mere figure of speech. The average reader may say, well, sure, we understand that there is a certain element of risk in buying stocks; even the brokers admit that. But no—I am speaking not merely of risk, but of gambling in the fullest sense of the word, the same sort of gambling you will find in Las Vegas, where you bet on the turn of a card, or the movement of a little ivory ball spinning around a numbered wheel, or when you put your $5 or $50 on the Big 8 at the dice table. In Las Vegas, the owners of the casinos have a direct interest in the spin of the wheel, the turn of the card. They are betting their money against yours. The percentages, naturally, are in their favor; if not, they would not remain in business. Now, here is the fact as I have observed it.

2-Activists Reports/Vampirestocks.

• MeliFinance wrote an extended report on Digi Power X ( ) on May 14th.

• Recent Short Seller Attack on Nvidia (NVDA): Culper Research Report (May 13, 2026)

  The most prominent and recent activist short seller attack on Nvidia came from Culper Research, an activist short-focused firm. On May 13, 2026 (late Wednesday), they publicly disclosed a short position and released a detailed ~40-page report titled “The China Problem”.

  Key Claims in Culper’s Report (Summary)

  • Core Thesis: Despite Nvidia publicly stating its China compute business went to “zero” after April 2025 U.S. export restrictions on advanced AI chips, Culper alleges that >20% of Nvidia’s projected FY2026 compute revenues still derive from China. This is allegedly enabled by illegal GPU diversion through Southeast Asian intermediaries.

• Shares of York Space Systems dropped more than 10% on Monday morning after short seller Wolfpack Research announced a short position in the company, citing the elimination of its primary revenue source.

  Wolfpack Research said 96% of York’s 2025 revenue came from selling satellites to the Pentagon’s Space Development Agency (SDA), which is being dissolved. In late April, the Pentagon announced it eliminated future funding for the SDA’s Tranche 3 Transport Layer and is dissolving the SDA.

  The company’s January initial public offering was based on continued growth as the provider for the SDA’s Transport Layer program. According to Wolfpack, the program is being replaced with the Space Data Network (SDN), which names SpaceX’s Starshield as the provider in Pentagon budget documents made public on April 28.

• At the 2026 Sohn Investment Conference, panelists Soren Aandahl, Joyce Meng, Zachary Datikash, moderated by Jim Chanos, discussed identifying investment opportunities and shorting strategies within the current market environment.

3-Fiatlonaires 101 and Suspicious Insiders share dump.

The wealth of the Fiat financial elites is concentrated in their ownership and control of “Financial securities” rather than in the net returns of their underlying businesses. The scheme is thus to prop up their holdings and gradually dump the over-inflated issues on the public. Our modern elites’ wealth and prestige have thus become dependent on monetary authorities’ guidelines and their political allegiance, a far cry from previous generations of industrialists and scientific and technological breakthrough entrepreneurs. Long gone are the days when wealth was built on equity and dividends; we are now ruled by “FIATLONAIRES.”

1-WeWork Inc. (WEWKQ)Bankrupt.

Adam Neuman is still a Billionaire! How?

Per Forbes Rankings, AN is worth $2.8B, making him the 1511 richest man in the world. A Global Times articles noted a few months ago that the eccentric entrepreneur is back to his old tricks with a new venture, a few years after his Office sharing company filled for bankruptcy. In October 2019, an amendment to WeWork’s rescue agreement quietly obligated SoftBank Group Corp. to provide up to US $5.05 billion in debt financing to keep the company alive. The number appeared in a single paragraph deep inside a Delaware court exhibit — a footnote to one of the most expensive governance failures in venture-capital history.

That figure did more than save a collapsing start-up; it preserved Adam Neumann’s personal fortune. While investors, employees, and lenders took losses measured in billions, the founder who had sold the story of “community capitalism” walked away with hundreds of millions in cash, stock, and refinanced loans — a golden parachute built atop a failed promise. ( Link)

2. DigitalOcean Holdings, Inc. (DOCN)

DigitalOcean Holdings, Inc. reported that entities affiliated with its 10% owners conducted large insider sales of common stock. On May 13, 2026, AI Droplet–related LLCs sold a total of 3,300,000 shares of DigitalOcean common stock at $150.30 per share in an unregistered block sale under Rule 144 for up to $495.99M.

DigitalOcean stock has risen up to 400% in a year despite facing several controversies over the years, primarily around financial reporting, data security, customer service, and governance concerns.

3-Bloom Energy Corp (BE)

• Insider: Shawn Soderberg — Chief Legal Officer and Corporate Secretary- executed multiple liquidations concluded by early May, estimated at around $9.76 million (selling 35,000 shares through a trust at $279.00 each).

  Summary: Diversification achieved via a pre-arranged 10b5-1 plan.

  This sale was executed systematically under a Rule 10b5-1 trading plan established in November 2025.

  MeliFinance released a report on BE -3.96%↓ on April 28th, describing the company as a rinse and repeat dilutive financial greenwash designed to benefit executives and major shareholders. is up 1,250% thanks in part to Leopold Aschenbrenner large stake.

4-SNAP

Robert C. Murphy, Chief Technology Officer at Snap Inc (NASDAQ:SNAP), sold a total of 4,000,000 shares of the company’s Class A Common Stock for approximately $21,445,200, according to a recent SEC filing. The sales occurred on May 13 and May 14, 2026, with the weighted average prices per share for these transactions falling between $5.2807 and $5.4419.

On May 13, Mr. Murphy sold 2,000,000 shares at a weighted average price of $5.4419 per share. These shares were sold in multiple transactions with individual prices ranging from $5.31 to $5.54. The following day, May 14, he sold an additional 2,000,000 shares at a weighted average price of $5.2807 per share, with individual transaction prices ranging from $5.185 to $5.50. Both sales were executed under a Rule 10b5-1 trading plan, which Mr. Murphy adopted on November 11, 2025, and subsequently amended on February 11, 2026.

SNAP 3.20%↑ has been the focus of an article examining the concept of “Financial welfarism” and its founder and main shareholder, Evan Spiegel. SNAP, Inc.'s officers have aggressively sold their shares to the public while the company has underperformed financially and destroyed shareholder value. The wealth of its largest holders has been essentially based on their stock holdings and on their ability to profitably dump on the market. Robert Murphy co-founded the company with Evan Spiegel, and he is ( aledgedly) worth between $1.1 B to $2.2B. Since 2021, he has aggressively diversified his portfolio, selling over 20M shares for an estimated $268M.

4-Uglystocks#2

( Spy-hopping Contrarian catalyst deep value -cigarbutts analysis.)

I’m interested in “uglystocks” for a simple reason: I’ve lost faith in the current pricing system. I believe its discovery function has been compromised, making it extremely challenging to perform reliable economic calculations and value projections.

I believe buying undervalued stock issues, Ben Graham Net-nets, Walter Schloss cheap TBV, and contrarian international /oversold stocks (selling at their 5- to 10-year lows) is an intriguing proposition because these assets have already shed their “inflationary” excesses, making them leaner, healthier investments with potential for a turnaround. More importantly, the wider investment public and the US centric pros are rarely privy to such opportunities.

Sewon Precision Industry (KRX: 021820): A Rare Net-Net Bargain May 2026 ·

Sewon Precision Industry makes stamped metal and aluminum parts — body panels, structural components, interior trim — primarily for Hyundai and Kia. The company has returned to profitability after a rough stretch in 2022–2023, carries almost no debt, and sits on an extraordinary cash position built partly from a successful lawsuit against former controlling shareholders.

At ₩14,500 per share, the stock trades at roughly 40% of its Net Current Asset Value. Cash and near-term liquid assets alone exceed the entire market capitalization. The operating business, the U.S. plant expansion, and a long-standing customer relationship with the world’s third-largest automaker group are all available, in effect, at a negative price.

The Net-Net Math

Benjamin Graham defined a net-net as a company trading below its Net Current Asset Value — current assets minus all liabilities. He considered purchasing such stocks at two-thirds of NCAV or below to be the most reliable margin-of-safety strategy available to common stock investors. Sewon trades at roughly 40% of NCAV, well inside even Graham’s most conservative threshold.

Current assets stand at approximately ₩453 billion, including a cash pile of around ₩319 billion. Total liabilities are a modest ₩67–91 billion. That produces an NCAV of roughly ₩362 billion, or ₩36,200 per share — more than double the current price.

Applying Graham’s more conservative Net-Net Working Capital method — discounting receivables to 75 cents on the dollar, inventory to 50 cents, crediting cash at full face value, then deducting all liabilities — yields approximately ₩30,500 per share. The current price represents roughly 48% of even this fire-sale number.

The Business

Sewon is expanding into the United States, positioning plants to serve Hyundai’s new EV assembly complex in Georgia. This gives the company a foothold in North American EV supply chains at a moment when localisation mandates under U.S. industrial policy are creating structural demand for nearshore component manufacturing. Revenue has resumed growth, and trailing net margins approach 23% — unusually strong for a metal-stamping operation.

The stock trades at roughly 3.5x earnings and 0.21x book value. Enterprise value is deeply negative — by more than ₩160 billion — because net cash dwarfs the market cap entirely.

What Could Unlock Value

Deep discounts in Korean small-caps often persist due to family control structures, limited analyst coverage, and a generalised governance discount. Sewon has relevant history here — but the litigation that generated the cash hoard also resolved the underlying governance dispute, which clears the air somewhat.

The catalysts are straightforward: a special dividend or buyback, increased institutional attention as the U.S. EV expansion matures, or activist engagement. Even absent a near-term catalyst, the company continues accumulating earnings on top of an already outsized asset base. If the market re-rates toward NCAV over a two-to-three-year horizon, the implied range is ₩36,000–50,000 per share — two to three times the current price, with no guarantee of timing.

Risks

Customer concentration is the primary concern — Hyundai and Kia together represent the majority of revenue, so a meaningful pullback in Korean auto output or a sourcing shift would hit Sewon hard. The stock is thinly traded, making position-sizing discipline essential. Prior related-party transactions warrant continued vigilance on capital allocation decisions, even after the litigation resolution. And auto component businesses are inherently cyclical.

Bottom Line

This is one of the purest net-net situations available in global markets today. Cash alone exceeds the market cap. The business is profitable, expanding, and nearly debt-free. The principal requirement is patience — and a tolerance for the idiosyncratic risks of Korean small-caps. Suitable for long-term value investors; not for traders or anyone uncomfortable with illiquidity.

Review the latest DART filings (Korea’s regulatory disclosure system) before taking a position. This is research, not investment advice.

5- New 5-10 years Lows stocks.

• Whirlpool Corporation ( )

A major U.S home appliance manufacturer is trading near multi-year lows around $40/share. This marks a 14-year low with shares down 40% YTD in 2026. The company was founded in 1911 and has recently suspended its dividend payment for the first time since 1950.

• The Kraft Heinz Company ( )

The Kraft Heinz Company, together with its subsidiaries, manufactures and markets food and beverage products in North America and internationally. The company has struggled in recent years but Q1 report was solid, beating estimates with sales up +0.8%. The company has maintained its 7% dividend yield. Stock down near all time lows ( Combination with Kraft).

• Molson Coors Beverage Company ( )

Molson Coors Beverage Company manufactures, markets, distributes, and sells beer and other malt beverage products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers flavored malt beverages including hard seltzers, craft, spirits, and ready to drink beverages. The company also provides non-alcoholic beverages including premium mixers and energy drinks. The company was founded in 1873.

6-“Triviae”

The Inflation of Stock Prices is not Yet Over. These are the Reasons to Stay Invested.

by Thorsten Polleit
(published on The Libertarian Alliance, UK, 10 May 2026)
The U.S. stock market index S&P 500 has reached a new record high at 7,330 points. The NASDAQ has done the same at 25,800 points. European and Japanese stock markets are also at all-time highs, and Chinese stock prices are not far from their previous record levels.
This may be a rather surprising outcome for many market observers — given the multitude of current stress factors and fears: just think of the war against Iran, the energy price shock, the Ukraine-Russia war, excessive government debt burdens, increasing political disagreement within the Western world, etc.
Are stock investors too optimistic in their (world) view? Or are the skeptics too pessimistic? To answer these questions — and above all to take an informed look into the future — let us first recall the most important factors that fundamentally drive stock markets:
Rising corporate profits and rising dividends make stocks more valuable and drive their prices higher (especially when profits and dividends come in higher than previously expected).
Falling interest rates increase the present value of expected corporate profits and dividends and also drive stock prices up; the opposite applies when rates rise.
Decreasing risk aversion among investors reduces the discount rate, increases the present value of dividends, and raises stock prices.
In addition to these “normal” price-determining factors, there are also “special factors” that can influence stock prices:
For example, a large-scale reallocation in which savers and investors now wish to hold less fiat money and more stocks can increase demand for equities and drive stock prices (and thus their valuations) higher.
Rising stock prices can also result from exaggerations, i.e., “bubble formation,” because investors overestimate profit potential and future rate cuts and/or underestimate risks. Conversely, persistent undervaluation can also occur and persist in stock markets.
The expansion of the money supply and the interest rate cuts by central banks have played a particularly important role in stock market developments in recent years. A quick look back: Since the early 1980s, U.S. interest rates have been on a downward trend that continued almost uninterrupted until 2020. During this period, U.S. stock prices rose steeply (albeit with considerable ups and downs) — and much more strongly than the U.S. dollar money supply grew. One can interpret this as follows: Over the past roughly 40 years, falling interest rates have, among other factors, inflated stock prices. And the swelling of the money supply has not primarily driven consumer price inflation, but has instead — and to a considerable extent — also caused inflation in stock markets.

https://www.boombustreport.com/english

-Social Media chatters.

You have to start somewhere. Just go ahead and do it.

But before joining Berkshire, Munger ran his own successful investment firm ( Wheeler, Munger & Co.) He and Buffett informally collaborated and advised each other on major investments for years.

The boy wonder that never was.

Brutal.

The psychology of Human Misjudgment: Charlie Munger.

Random Books: Week#2.

“Millionaire: The Philanderer, Gambler, and Duelist Who Invented Modern Finance” (1999) by Janet Gleeson is a biography of John Law (1671–1729), the Scottish adventurer, gambler, and financial innovator whose schemes created France’s first major paper-money system and the Mississippi Bubble—the world’s first major stock-market boom and bust.

The book chronicles Law’s dramatic rise from a dueling dandy and gambler to the most powerful man in France, where he briefly controlled the economy, coined the term “millionaire,” and introduced ideas that shaped modern finance (paper money, central banking, joint-stock companies, and widespread speculation). His fall was equally spectacular, triggering economic chaos and discrediting his vision for decades.

Gleeson portrays Law as a complex, charismatic figure—mathematically brilliant, charming, and visionary—while exploring the nature of money, credit, trust, and the perils of speculation. It’s a tragicomic tale set against the backdrop of early 18th-century Europe, post-Louis XIV France’s massive debts, and the Enlightenment-era fascination with wealth.

“Never Yield To Evil”

Not investment advice. This Newsletter was created for intellectual stimulation only. Always consult a professional investment advisor before purchasing financial securities. Wall Street is not your friend, Never Yield To Evil.

A society that subsidizes speculation deserves the ultimate prizes that come with gambling: Misery!

I’ve been pondering the real nature and purpose of the financial market for some time. What I’ve observed suggests that although the nominal purpose of public equity markets—to facilitate the exchange, trading, and financing of business ownership—appears noble and democratic, its actual impact often runs counter to this mission. Today, most of the wealth in public corporations is controlled by a very small minority. Meanwhile, the cost of living has soared, unemployment and underemployment have increased dramatically, and pervasive pessimism persists despite the illusion of prosperity created by the ongoing bull market.

“Cui bono?” Who actually benefits from the stock market?

I may be free to express my personal biases and doubts ( I believe most of the blame ought to be pointed at the monetary authorities that have subsidized the financial economy at the expense of the real economy for one), but I am probably too insignificant and unaccomplished to be taken seriously. Nicolas Darvas on the other hand, a ballroom dancer turned legendary trader, managed to accumulate up to $2 million trading part-time in the 1960s ($22 Millions today). He wrote a series of books describing the trading journey that led to his fortune, while expressing, in less-than-politically-correct terms, his opinion on institutional finance and Wall Street in particular. He harshly rebuked and condemned “ the Wall Street machine”, viewing it as a giant gambling casino designed to separate the average person from their money.

So, rather than read my whiny pseudo-intellectual crashouts, let’s hear and learn from a man, an outsider, who actually managed to beat the street at its own game and lived to tell his story:

Link

“I have been speaking of the stock market collectively as a lottery, a gambling enterprise, a casino. This is no mere figure of speech. The average reader may say, well, sure, we understand that there is a certain element of risk in buying stocks; even the brokers admit that. But no—I am speaking not merely of risk, but of gambling in the fullest sense of the word, the same sort of gambling you will find in Las Vegas, where you bet on the turn of a card, or the movement of a little ivory ball spinning around a numbered wheel, or when you put your $5 or $50 on the Big 8 at the dice table. In Las Vegas, the owners of the casinos have a direct interest in the spin of the wheel, the turn of the card. They are betting their money against yours. The percentages, naturally, are in their favor; if not, they would not remain in business. Now, here is the fact as I have observed it.

The stock market is not appreciably different, except in one important respect: it is the broker-members of the stock exchanges who own the Wall Street casino; and although some of them bet their money consistently against the public’s, most of the profits of the brokerage community as a whole come not from gambling, but from commissions. Brokerage commissions are the primary reason for the existence of the organized stock exchanges; without the brokerage commission, there would be no Wall Street casino.

This I realized early in the game and I wasn’t gulled by the propaganda relating to “sound investments,” “shares in American business,” and the like which gushes forth continually like Niagara from the pens of copywriters. I must grant that the hucksters of Madison Avenue have done a good job of selling Wall Street to Main Street, for a purpose which may be perfectly legitimate. But I don’t misunderstand that purpose: it has very little to do with shares in American business; the primary purpose is to bring more gamblers into the casino to buy and sell more stocks and generate more commissions for the brokers who own and operate the casino. I have no pretensions to sainthood.

What I do have is a lively interest in facts, as these relate to my income, and it is a fact that “people’s capitalism,” as depicted by the New York Stock Exchange, is largely a myth. The “people,” meaning the vast majority of the population of the United States, own a very small part of the capital instruments of the free enterprise system; in fact, public ownership of the means of production is not greater but less extensive than it was a century ago.

As regards corporations, it is true that they are initially financed, and that industrial expansion is financed to a greater or less extent by the sale of stock to the public.

What then? The management of the corporation, having received its share of the proceeds from the underwriters, has little to do with that particular issue of stock in the future—except as the corporation officers may own shares in the company. A stock that is initially offered at $30 may fall in price to $5 a share, or rise to $150 as it passes from hand to hand in the market place. Since it is not redeemable, like a bond or a promissory note or a mutual fund share, it makes no difference to the corporation what the price of the stock may be. The company’s financial affairs do not depend on the fluctuations in the market, but on more practical matters, entirely unrelated to those handsomely engraved certificates which bear its name.

Dividends? There is no obligation. The board of directors will vote to pay dividends, or not, at its own discretion. If the directors own a big block of the stock themselves, as is usually the case, they may want to pay dividends. On the other hand, there may be lots of good reasons why they will not wish to pay. They may be more interested in expansion, in acquiring the assets of other companies through stock trades, in building a financial empire and creating high-priced executive jobs, in the control of wealth for its own sake.

Meanwhile, dividend or no dividend, the stock of the corporation will continue to be traded in the market. And here is the truth of the matter: it will be traded largely on the basis of the buyer’s estimate of how much he may subsequently be able to sell it for. This is speculation, this is the gamble. What it amounts to is that, when you buy a $10 or a $20 or a $50 stock, you are paying $10, or $20, or $50 for a nicely printed certificate and wagering that someone else will pay more for it than you did. And, of course, that someone else who takes the printed certificate off your hands will be making exactly the same kind of bet.

The commission broker’s part in the whole affair will be, naturally, to stimulate lively betting and collect as many commissions as possible. He is, in case you didn’t know, one of the owners of the casino in which the bets are placed. And his membership gives him the privilege of taking a cut on each transaction that he handles. After all, this is the reason he joined the casino; it is the reason he, or another member of his firm, was willing to lay out $40,000 for a seat on the American Exchange, or upwards of $150,000 for membership in that exclusive gambling club—the New York Stock Exchange. Business is business, it has its ups and downs, and involves some risks. No one ever claimed it was a sure thing. But the risks are usually calculated risks, the up-cycles and down-cycles are both explicable in rational terms. The coal or fuel oil business is fine this year because we had a cold winter and people burned a lot of fuel. The melon business is dismal this summer because farmers grew more melons than people care to eat and melons are a glut on the market.

link

The gambling business—and this describes Wall Street—is something else again. It is not rational, and the proof of it is the wild fluctuations of stock prices, not merely from day to day but from hour to hour. The rising and falling prices on the stock market ticker tape resemble nothing so much as the runs of good and bad luck, of sevens or elevens or deuces and treys at the dice table. If a share of stock is, as the New York Stock Exchange copywriters like to say, “Your Share in American Business,” why should its price change twenty times a day? Does the price of my dinner from fluctuate one evening to the next? Suppose that when I went to the Oak Room in the Plaza for cocktails, as I often do, the bartender were to say: “Good evening, Mr. Darvas. Martinis are being quoted at 97 cents this evening, sir; Manhattans 78; bourbon 43; the bottom has fallen out of sweet vermouth and it’s down to 3; but the dry is holding firm at 39; club sandwiches $5.26; pickles $1; and I don’t recommend the chicken salad until we see how the proxy fight in the kitchen is going to come out.”

A ridiculous world, if it were so. I see a valuable property at 650 Park Avenue. I don’t see real estate being quoted on a ticker tape: 650 Park Avenue going for $3,500,000 in the morning, three hours later selling for $3,530,000, two hours later down to $3,450,000, the next day only $2,900,000. I don’t see the man who sold it at three o’clock one afternoon rushing in the following morning to buy it back for less than the price he received for it the day before. To suggest that such fluctuations of price in any commodity could serve the public interest is insane. But in gambling, naturally, it is another matter. Fluctuations in the value of numbers in a lottery is necessary to the entire existence of that kind of lottery, and one gets what one pays for—a gambler’s chance to sell numbers; or, in the case of Wall Street, symbols printed on paper IP—INTERNATIONAL PAPER, CN—NEW YORK CENTRAL, IBM—INTERNATIONAL.”

Darvas, Nicolas. Wall Street: The Other Las Vegas by Nicolas Darvas (the author of How I Made $2,000,000 In The Stock Market) (pp. 34-37). (Function). Kindle Edition.

What do you think?

Not investment advice. I am not a registered financial advisor. I write for entertainment and intellectual stimulation only. Contact a trustworthy investment advisor before buying or trading financial securities. Wall Street is not your friend.

“Any securitized undertaking that fails to abide by the most basic Trust factors should be prohibited from selling its issues to the public.”

Father and son duo getting rich on AI hype?

I believe Digi Power X Inc. (NASDAQ: DGXX) does not qualify as a trustworthy business undertaking. Potential investors should thoroughly investigate the company's history, management, and any red flags before investing.

“Digi Power X (DGXX) looks a lot like another textbook micro-cap pivot play. A failed Bitcoin miner reinventing itself as an AI infrastructure operator is a la mode these days. The stock trades at 15-16x trailing sales amid headline AI Infrastructure-driven hype. It has surged 400% over the past 12 months, driven by a series of aggressive press releases and Fintwit promotions that mask a decaying capital structure and falling revenue. In fact, multiple structural flaws support a skeptical thesis, among which: (1) an insiders’ arrangement that transferred substantial value to execs at depressed valuations through the US Data Centers subsidiary; (2) a history of relentless equity dilution; and (3) an execution record marked by slipping timelines, with the only material AI revenue not commencing until late 2026 at the earliest. And not least, and probably the most important catalyst: a Founder who could simply be qualified as a disingenuous, self-serving, hyping, bullshitting hustler leveraging the thin edge of a “legendary investor’s name and reputation to pump his stock.”

Q1 2026 results (May 15) represent the first major catalyst for a potential de-rating. Still, upward Volatility might last longer than operational value warrants.”

Digi Power X Inc. (NASDAQ: DGXX)

As of May 14, 2026, DGXX shares trade near $8.43 (recently intraday highs in the $9s), pushing the market cap to approximately $596 million amid a parabolic run fueled by an eye-popping 40 MW colocation deal with Cerebras Systems and aggressive timelines for its ARMS modular AI pods. The stock is up over 187% YTD and nearly 400% over the past year. Yet beneath the AI infrastructure narrative lies quite a few eyebrow-raising issues:

1. Leadership and Governance: An unproven founder/son execs suite with a background in fashion currently managing a 17-person team of purported hyperscale data center developers. Concerns include family ownership, excessive insider compensation ($12M salary for daddy CEO / $7.4M salary for son-President in FY2025), and a related-party subsidiary transaction structured to bypass shareholder approval, raising serious governance issues.

2. Execution Risk: The AI division is still in development with no significant revenue yet. The flagship Cerebras deal — touted at $1.1 billion — won’t generate revenue until Phase 1 completion, targeted December 15, 2026. Earlier launch dates for the ARMS 200 pod have already been delayed. Competition from well-funded companies like Equinix, Digital Realty, and CoreWeave raises red flags about the true intent behind the company’s switch to an AI database.

3. Capital Structure Abuse: DGXX has relied heavily on equity issuance for funding, with shares outstanding increasing by 91% over the past year. The $175 million ATM offering, increased shortly after a 35%+ surge following the Cerebras announcement, appears to be opportunistic capital raising at the expense of retail investors.

4. Valuation Disconnect: With a market cap of around $541 million based on $34.2 million in trailing twelve-month revenue and an -82.9% net margin, the stock trades at an absurd 16x sales. Crypto holdings valued at $14.8 million add downside risk linked to Bitcoin, and while cash reserves of $78.5 million offer some protection, they will likely be depleted by capital expenditures and ongoing operational losses.

Introduction: The birth, near-death, and resurrection of a Reverse merger ugly-duckling.

Digi Power X Inc. was initially incorporated in Canada on February 18, 2017, under the name Chortle Capital Corp., and later changed its name to HashChain Technology Inc. (“HashChain”) on September 18, 2017. HashChain was incorporated under British Columbia law on February 18, 2017, and underwent a reverse take-over (the “RTO”) that merged the business and assets of HashChain with Digihost International, Inc. (“Digi International”) through a share exchange completed on February 14, 2020. Before the RTO closed, the Corporation approved a special resolution for unlimited proportionate voting shares (“PV Shares”) and unlimited SV Shares without par value. After the RTO, HashChain amended its articles to rename itself Digihost Technology Inc. The company started trading on the OTC under the ticker $HSSHF and later listed on Nasdaq on November 15, 2021, following a share consolidation under the ticker DGHI. In March 2025, at the peak of AI data center market hype, management rebranded the company as Digi Power X Inc., focusing entirely on AI infrastructure.

Digihost Technology Inc. (DGHI) has faced multiple compliance issues, primarily related to Nasdaq listing standards and regulatory filings, though it has consistently regained compliance within designated timeframes.

In October 2022, Nasdaq notified Digihost that it failed to maintain a minimum closing bid price of US$1.00 for 30 consecutive business days. In February 2023, the company restored compliance after the closing bid price was at or above US$1.00 for 10 consecutive business days.

In May 2023, Digihost indicated it was likely to receive a Nasdaq deficiency notice for failing to submit its Annual Report on Form 20-F for the fiscal year ending December 31, 2022, on time. This delay violates Nasdaq Listing Rule 5250(c)(1).

In November 2024, the company replaced Raymond Chabot Grant Thornton LLP with Davidson & Company LLP as its auditor.

The company has also highlighted risks related to the security of its private keys, warning that loss or compromise could hinder access to its cryptocurrency. Also, some projects faced delays due to issues in utility interconnection.

In March 2025, the company received a Nasdaq notice requiring a restatement of previously issued financial statements following a SEC review that identified a material error in the company's classification of proceeds from digital asset sales.

The real miracle is Digi Power X managing to stay listed on Nasdaq despite multiple close calls with delisting. But what if the company's true business model (DGXX 0.80%↑) is actually focused on maintaining its uplisting in the world's most liquid equity market?

1. Michel Amar — From fashion to failed Crypto miner, and now AI.

Michel Amar is the Founder, Chairman, and CEO of Digi Power X and, along with his son Alec and the family’s entities, remains its primary shareholder. The company’s website paints him as a ‘French-American businessman recognized for his achievements in innovative technologies like blockchain and electronics, as well as for creating branded fashion.

In fact, Michel Amar spent close to 28 years as a Fashion/high-couture exec, consulting and working with famous French brands specializing in leather garments and accessories. He was the CEO of Street Beat Sportswear from 1993 to 2006, the president of BCBG from 2006 to 2014, and the founder of NYAM Licensing Agency in 2014.

There is no public record — in SEC filings, LinkedIn disclosures, or company biography — of Amar or any key executive possessing prior large-scale experience in power generation, grid interconnection, hyperscale data center construction, or AI/HPC deployments.

The ARMS 200 modular Tier III pod system, presented as a proprietary engineering achievement, emerged from a company with 17 employees and a history of material internal-control weaknesses (later disclosed as remediated in subsequent filings).

Red Flag #1 — Unproven Leadership in a Capital-Intensive Domain

Building and operating hyperscale AI data centers requires deep expertise in power systems engineering, grid interconnection, permitting, and mission-critical facility management. Amar’s publicly documented background is in fashion licensing and consumer electronics retail partnerships. Son Alec Amar serves as President with no disclosed domain credentials. In FY2025, the father-son duo received combined compensation of $19.4 million — $12.0 million (Michel) and $7.4 million (Alec) — in a year the company generated a $28.4 million net loss.

2-The numbers don’t lie:

On March 31, 2026, Digi Power X reported its full-year 2025 results. The headline numbers tell a story of revenue shrinkage, widening losses, and heavy reliance on non-cash items to dress the EBITDA picture.

Originally a Bitcoin miner (hashing via pools, holding BTC/ETH), ( fomerly Digihost) has deliberately scaled mining down to near zero while shifting to colocation/energy sales. FY 2025 results (ended Dec. 31, 2025): $34.2 million total revenue (down 8% YoY by design), with colocation at $17.5 million and energy at $13.2 million. Mining is now marginal. GAAP net loss: -$28.4 million ($22.2 million non-cash: $8 million share-based comp, $7 million depreciation, etc.). Adjusted EBITDA: $(3.2) million. Cash: $78.5 million; crypto holdings: $14.8 million (combined liquidity $93 million, zero debt).

Sources: StockTitan.net DGXX overview; Simply Wall St earnings data; StockAnalysis.com DGXX statistics; SEC 10-K filing March 31, 2026

The company’s new narrative centers around the March 2025 rebrand to Digi Power X, the ARMS 200 modular Tier III pods, and NeoCloudz GPU-as-a-Service. Its first AI revenue contract, signed on April 20, 2026, is a 24-month bare-metal GPU rental with SubQ AI, valued at $19.6 million and effective May 15.

On May 5, it signed an MSA ( Master Service Agreement) with Cerebras for a purpose-built 40 MW Alabama campus, touted as a $1.1 billion base / $2.5 billion with options, though revenue from this is expected to start late 2026. Claims regarding ARMS 200 commissioning have shifted repeatedly—from an initial target of first revenues in April 2026 to now focusing on small-scale 1 MW deals and a full 10 MW Alabama project by Q3 2026. Although a 400 MW pipeline is promoted, nothing is at commercial scale yet.

The $1.1B Number is a Contract Value, Not Revenue.

$1.1 billion spread over 10 years equals approximately $110 million per year — but only after facility delivery in late 2026/early 2027, contingent on Cerebras occupying the contracted capacity. At current burn rates and capex requirements, the company will need additional equity raises before a single dollar of Cerebras revenue flows. The $2.5B figure (inclusive of 7-year extensions) assumes continuous occupation and contractual performance through the mid-2030s.

Red flag #2: AI copy-paste new narrative is unoriginal.

Many Bitcoin miners (Core Scientific, Riot, Terawulf) are rapidly pivoting to the current AI narrative due to plunging mining profitability. Meanwhile, Digi Power X’s AI segment remains in pre-revenue stages, with tangible capex burn, significant power/grid risks, and intense competition from better-capitalized players with established hyperscale relationships. Crypto holdings introduce additional volatility. Q1 results will be revealing—any delays in pods or power deals could severely impact the valuation multiple.

3-The Dilution Financing scheme: The true business model.

The most damaging aspect of $DGXX’s capital structure is the systematic erosion of per-share value caused by its history of continuous equity issuance. The company has never generated positive operating cash flow sufficient to cover its operations, relying solely on repeated ATM offerings. These offerings seem to favor management’s ability to raise capital rather than safeguarding shareholder value.

- Before 2024, shares increased from 12 million in 2020 to 31 million by the end of 2024, roughly 2.6 times over four years. This growth was linked to early financing for crypto-mining expansion, the 2020 reverse merger, option exercises, and smaller offerings, with growth occurring in episodes.

- In 2025, ATM programs accelerated, raising tens of millions of dollars, with some programs dating back several years. Notably, on April 9, 2026, an amended ATM with A.G.P. was announced, and on May 8, 2026, the program was increased by $100 million to $175 million—just as the stock surged on news of Cerebras’s deal. This led to a significant increase in share count (approximately 73 million outstanding), with filings showing pro forma dilution prescriptions. Insiders sold shares during these raises. All of the company’s Cash growth was driven by dilution and zero operational imput.

Red flag#3: Classic “story stock” capital structure.

On May 5, 2026, DGXX skyrocketed by approximately 35-40% following the Cerebras announcement. Three days later, on May 8, management filed a prospectus supplement increasing the ATM from $100 million to $175 million — precisely at the peak of share-price enthusiasm. The previous $75 Million ATM tranche was already 96% exhausted, with $72.4 Million sold. This is a classic case of capital harvesting: leveraging positive narratives to boost the stock price and then issuing shares at high levels to fund ongoing operations that are not self-sustaining.

ATM flexibility allows management to issue shares freely during hype periods, which diminishes value. As AI capital expenditure increases and operating cash burn continues, additional funding rounds are unavoidable. The recent increase amid a one-day surge of over 35% is especially bold. It would be fair to view the undertaking as a potential dilutive hype train.

Let’s also note that the USDC “spinout” is a rather cynical development, consistent with the company’s overall nature as an insiders-first construct.

On March 13, 2026, Digi Power X announced the next phase of development for US Data Centers, Inc., which was previously a fully owned subsidiary. The transaction included three main elements:

1. Insider Equity Grant (Free Shares): Certain insiders, including officers and directors of Digi Power X, received a total of 10,200,000 USDC common shares in exchange for services, at no cash cost to them. No independent valuation was performed.

2. Private Capital Raise at $10M Valuation: USDC raised $800,000 from external investors by issuing 3.2 million preferred shares, indicating a pre-money valuation of about $10 million. This entity was created using Digi Power X's shareholder capital, with prior capex estimated at over $20 million.

3. Hans Vestberg, former Chairman and CEO of Verizon and current BlackRock board member, was appointed co-founder and Senior Advisor of USDC. The co-founding management team, including Vestberg, holds roughly 35% of the founder equity within the same $10 million valuation.

The USDC equity distribution smells like fools’ play by management against shareholders and further brings into question the “ investment” validity of the company.

Rather than seeking a formal independent valuation or minority shareholder approval — both standard requirements under Multilateral Instrument 61-101 (MI 61-101) for related-party transactions — management invoked two exemptions:

Section 5.5(a) of MI 61-101: Exemption from formal valuation, on the basis that the insider participation did not exceed 25% of the company’s market capitalization.

Section 5.7(1)(a) of MI 61-101: Exemption from minority shareholder approval, on the same 25% threshold basis.

The company also explicitly disclosed that it did not file a material change report at least 21 days before closing — the standard advance notice requirement — stating only that this was ‘reasonable in the circumstances in order to complete the transaction in an expeditious manner.’ The rush to close, without advance notice or shareholder vote, is telling.

Sources: Yahoo Finance press release (March 13, 2026); Finanzwire.com SEC filing summary; TradingView News summary; WebDisclosure.com (March 16 clarification).

While the market has indeed reacted favorably to the AI pivot, it appears that management and insiders would be the net beneficiaries of future Data Center revenues and would control a larger portion of the equity, despite financing being shouldered by DGXX shareholders. This constitutes a classic related-party self-dealing red flag, and potential investors would be well-advised to consider such “gamesmanship” before investing.

Director Gerard Rotonda received $250,000 in cash, options, and 200,000 USDC shares explicitly for recruiting Hans Vestberg (per the 10-K/A filed April 30, 2026). This means a board director was compensated with shares in a related-party entity — shares that were only worth anything because DigiPower X shareholder capital built the underlying platform. The structure, the exemptions relied upon, and the speed of execution are consistent with a transaction designed to transfer value away from public shareholders before scrutiny could be applied.

4-Valuation: What valuation?

The stock has an extremely volatile trading history driven by periodic alignment with speculative hypes.

With a market cap of $541 million and a TTM revenue of $34.2 million, DGXX is trading at about 15–16 times its sales—an unreasonable valuation given its losses, early-stage AI focus, limited infrastructure advantages, and ongoing dilution risks.

While cash provides some short-term stability, ongoing burn and capital needs suggest that future funding may be necessary. Also, the Crypto market volatility remains a major risk. Many analysts have set price targets around $10/share, assuming perfect execution. However, the company’s unstable history and the executive team's track record of not delivering shareholder returns raise serious concerns about the undertaking.

In the short- to medium-term, market fluctuations might enable speculative investors to exit profitably, but long-term investors should exercise caution.

DGXX 22.14%↑ was initially a pure-play Bitcoin miner (hashing via pools like Foundry, holding BTC/ETH). Mining revenue plummeted to just $3.5M in 2025 (a sharp YoY decline) as the company shifted to colocation/energy sales ($30.7M combined).

mining margins were squeezed by hash rate increases, halving events, and rising energy costs. Management then focused on AI and Data Centers to drive multiple expansions.

The March 2025 rebrand to Digi Power X, along with the development of ARMS 200 modular pods (first deployment targeted for Q2 2026) and the co-founding of US Data Centers, Inc (USDC) for manufacturing and deployment, are part of a strategic pivot to position within the speculative AI narrative.

The AI segment had zero revenue as of 2025; commercial operations remain pre-revenue, with aggressive timelines.

Why sell your stock at $3/share when you know its true value?

Execution risks are therefore significant: construction delays, supply chain issues, power supply problems, skilled labor shortages, and competition from better-capitalized players could all undermine the current optimistic outlook. I believe the undertaking is more or less a wealth extraction scheme than anything.

Red flag#4: A tiger is recognized by its spots.

Digi Power X has been a mediocre capital allocator and a serial dilutor throughout its history. Ongoing AI narrative shift may not improve earnings, let alone strengthen capital structure despite management hype about its recent deal with Cerebras. Competition in the space is brutal and the “ Amar” clan is probably more habilitated at designing high couture purses than building data centers.

5- wily old Michel!

Is he treading on the thin edge of False endorsement to promote his stock?

Fintwit is craziland. What is really driving the hype?

DGXX 0.80%↑ Fintwit-sphere hype is mind-numbingly loud and aggressive. It is bold, organized, and armed to the teeth with “ thesis” to convince the retail public to look up to the stock as the next APLD 0.73%↑ or SNDK -3.61%↓. While most arguments have been built on stereotypical projections of AI databases’ energy needs and long-term cash flow projections, the Peter Lynch’s “ endorsement pitch” is by far the shrewdest.

Michel Amar, the founder and CEO of Digi Power X, has been making rounds on social media, claiming that his “company” has been supported by none other than Peter Lynch, a confirmed large shareholder and advisor.

But, “ Michel Amar” is no fool, quite the contraire.

Many investors may easily assume that the Peter Lynch mentioned by “ Michel Amar” is none other than the legendary Magellan Fund “ super investor Peter Lynch”, now part-time Vice Chairman of Fidelity Management & Research co. His name alone carries legitimacy and Trust to any “ brand” and company. And everyone knows this, especially the unsophisticated retail public… as well as the French “couturier” turned crypto investor!

But what Michel, the former fashion exec turned crypto/AI entrepreneur, isn’t telling you, and others, is that there are at least 3 others “ Peter Lynchs”, all respectable financial professionals of great repute.

-Peter Lynch, CPA, is a financial advisor and retirement tax specialist based in New Jersey, currently associated with The Lynch Financial Group and Prosperity Capital Advisors in Red Bank. He specializes in tax consulting, retirement planning, insurance, and investment strategies, providing services to individuals and corporate clients.

-Peter Lynch, CFP, of Wintrust Wealth Management. He serves as a client Portfolio Manager and provides comprehensive investment management services to high-net-worth families and institutions.

-Peter Lynch, UFCU Investment Services With over 20 years of experience in financial services, Pete has a wealth of knowledge that has helped clients navigate through just about every type of market or financial situation. He has approached financial planning from various viewpoints: as an advisor, portfolio strategist, and banking officer. He’s helped clients through all stages of planning: saving for and growing a portfolio, college planning, increasing retirement income, estate planning, and wealth transfer. His years of experience in investment strategy analysis, market research, and financial planning have made him a valuable resource for UFCU Members.

The “Peter Lynch’s sales pitch” is quite clever because it blurs the line of 'False endorsement.’ The name 'Peter Lynch’ is common, which allows fraudsters to promote their products while shielding themselves from the Lanham Act potential retribution. It is often used in online scams targeting investors, falsely claiming Lynch’s endorsement. His name has been associated with obscure investments or stocks, leading to " pump-and-dump” schemes that have cost investors millions of dollars.

So, which “ Peter Lynch” is Michel Amar talking about exactly?

Final verdict: Extreme caution warranted.

The return of the French connexion?

Digi Power X’s valuation raises legitimate concerns: a shady reverse-merger uplisting, founders and execs with no domain expertise; serial sector changes to chase hype; continuous equity dilution through ATM programs that favor management’s access to capital over shareholder interests; related-party deals that shift upside to insiders while exposing public investors to risk; and an AI revenue outlook that is heavily scheduled for late 2026 and beyond. The Cerebras deal is confirmed but not yet generating revenue. The ARMS 200 pods exist but are not at commercial scale. Q1 2026 results on May 15 will be the first real test. Any slip in execution—such as delayed pod deployment, low colocation adoption, or reduced guidance—could cause a 50%+ decline in cash-adjusted fundamentals. Fintwit hype and aggressive press releases may have driven the stock well above its true fair value.

Potential traders should size positions carefully and consider the risk of a squeeze amid high-momentum hype. Personally, management’s “forced” association with well-known value investor Peter Lynch was unconvincing and cynically self-serving; the last straw that broke the camel’s back. I have therefore deemed Digi Power X Inc. ( ) an unsuitable investment proposition for long-term investors.

“ Be ruthless to the system but kind to the people”

Micheal Brooks

This report was prepared for informational purposes only and does not constitute investment advice, a solicitation, or an offer to buy or sell securities. The views expressed are those of MeliFinance and are subject to change without notice.

Nothing in this report should be construed as a guarantee of any outcome. Past performance of similar trade ideas is not indicative of future results. Readers should conduct their own due diligence and consult a qualified financial adviser before making any investment decision. I have shamelessly used and abused AI platforms throughout the research process.

I do not hold a position against this stock. All sources cited are publicly available and believed to be accurate as of the report date. Source hyperlinks and filing references are provided for independent verification.

Primary Sources Referenced

SEC EDGAR — DGXX filings (10-K, 10-K/A, 8-K, Form 4, 424B5): www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=DGXX

DigiPowerX.com Leadership Page: www.digipowerx.com/leadership-committees

Yahoo Finance — DGXX Company Profile & Press Releases: finance.yahoo.com/quote/DGXX

DataCenterDynamics — Cerebras/DGXX Deal (May 6, 2026): www.datacenterdynamics.com

ProactiveInvestors.com — DGXX Q1 Date & SubQ AI Articles: www.proactiveinvestors.com

StockTitan.net — SEC Filing Summaries (ATM, Cerebras, USDC): www.stocktitan.net/overview/DGXX

StockAnalysis.com — DGXX Statistics & Financials: stockanalysis.com/stocks/dgxx/statistics

Simply Wall St — Dilution & EPS History: simplywall.st/stocks/us/software/nasdaq-dgxx/digi-power-x/past

MarketScreener — Michel Amar Executive Biography: www.marketscreener.com/insider/MICHEL-AMAR-A2P7WH

TradingView / WebDisclosure — USDC March 13 & 16 Announcements: www.tradingview.com; www.webdisclosure.com

StockObserver.com — Alec Amar Insider Sales (May 2026): www.thestockobserver.com

Morningstar — DGXX Fair Value Estimate: www.morningstar.com/stocks/xnas/dgxx/quote

AInvest.com — ATM Dilution Analysis (May 10, 2026): www.ainvest.com

Invezz.com — Cerebras Rally Analysis (May 5, 2026): invezz.com