Pythia Cap: Partially Conductive

Multibillionaire space pirate. CIO of Vader Capital LP. Activist engagements include Jeddha and Alderaan.

[Pythia Cap: Partially Conductive @PythiaR]

@DadInvest We should have known he’d try the backdoor next 🤦

[Pythia Cap: Partially Conductive @PythiaR]

JENSEN LEFT AND NOW PLANES ARE FALLING FROM THE SKY

[Pythia Cap: Partially Conductive @PythiaR]

All hail our new corporate board members of
*checks notes*
Vanguard & Blackrock

Does anyone have their phone numbers? What are their last names?

[@jason @Jason]

RESET ALL BOARDS TO BE RANKED BY SHARES HELD.

NO MORE DEI AND VIRTUE SIGNALING BOARDS

NO MORE "EXPERTS"

ONLY WARRIORS WITH SKIN IN THE GAME

[Fireside Alpha @firesidealpha]

Dylan Patel reveals SemiAnalysis has had to email Jensen Huang directly to get Nvidia to fix open source software, and says that was the only way it got solved

“If there’s any manufacturing issues with Rubin, people are distracted and Jensen’s not there. Things get solved slower. Things get solved by committees. Things don’t get escalated up.”

“I don’t know how many times at SemiAnalysis we’ve emailed Jensen for a thing to get solved. Like, what the fuck? Why are we emailing Jensen to fix something on some open source software? And yet that’s the only way we get it solved. And we’re irrelevant, compared to actual companies in the space.”

“How often is it Jensen going out there and solving a problem? From what I’ve heard from everyone around the ecosystem, it’s a lot. How many times is it like Elon tells Jensen something, Jensen goes and tells his team, and the team fixes it, because the team was trying to work with the team and it doesn’t work out.”

[Pythia Cap: Partially Conductive @PythiaR]

@SouthernValue95 @JerryCap I think they should be mad at the board too, but for different reasons (failure to do any succession planning/poor key-man risk management).

But ya, lots of blaming the messenger, not the people actually responsible for this.

[Pythia Cap: Partially Conductive @PythiaR]

Instead of making excuses for him, maybe try being angry at him for putting your investment and the company at risk through actions that created massive leverage for someone to use against him.

[Pythia Cap: Partially Conductive @PythiaR]

Lloyd Blankfein, were he on the NVDA board, would probably cite the stat in the below tweet and argue the board should plan for and manage this kind of risk given Jensen's NW & status.

The company had massive key man risk and did not manage it or mitigate it properly.

[Pythia Cap: Partially Conductive @PythiaR]

The top 10 richest women in the world all either inherited their money or got it in a divorce.

The 10 richest men have been divorced a total of 13 times.

It's kind of weird at the top.

[Pythia Cap: Partially Conductive @PythiaR]

@JerryCap Basically was Ned Stark

[Pythia Cap: Partially Conductive @PythiaR]

@the_penske_fi7e They're both just very dumb

[Pythia Cap: Partially Conductive @PythiaR]

@SkeleCap Gay4GPUs?

[Pythia Cap: Partially Conductive @PythiaR]

@Midnight_Captl Yes there's a distinction between murdering someone and sawing their arm off but neither is good...

[Gavin Baker @GavinSBaker]

The 2021 semiconductor shortages painfully educated the world in the iron law of semiconductor investing: buffer inventories must equal lead times.

This means that where there are shortages and extend(ed/ing) lead times there is always double-ordering and eventually inventory builds that inflate demand in excess of “true,” end market demand. When lead times are extend(ed/ing), inventory is building and demand is overstated. Shortages just light a fuse that will eventually end in excess inventories and earnings misses after some period of earnings beats.

As Taleb said in 2021, he has seen gluts that were not followed by shortages, but he has never seen a shortage that was not followed by a glut.

First order consequence of the super visible 2021 shortages may be that it is hard for semiconductor stocks to go up when their products are in a highly visible shortage as it is now more common knowledge that no one on planet Earth (including the company) knows the true level of demand and hence “normalized” earnings.

Early in the shortage period it is possible, perhaps even probable, that true, underlying “end” demand may actually be significantly higher than shipments (might be possible today for GPUs) - but no one knows what real demand is during a shortage. The mkt hates uncertainty.

Second order consequence may therefore be that semis selling products in short supply will trade at low multiples during the shortage period, even early in the shortage period. We are obviously seeing this in the mkt today in some (at least one) semiconductor stocks. Although part of this may also come from the deeply ridiculous Coreweave narrative.

And semis may then actually start to go up when the shortage ends, lead times normalize and the true level of end demand becomes apparent such that the market can more accurately value the company.

Only complication being that semi companies like to clean up the channel quickly so demand goes from overstated to understated quickly so “true” demand and normalized EPS are hard to ascertain. Great semi CEOs will simply stop shipping for a few months and the mkt has historically overreacted to these quarters, which are almost always buying opportunities (late last year for CPU/GPUs).

But perhaps we will see less downside volatility in the future on inventory cycle induced misses in the same way we are seeing less upside volatility on (partially) inventory cycle induced beats. Obviously the “true,” underlying, normalized AI driven demand has shifted up/accelerated.

None of this is to say that semis, esp. those exposed to AI, aren’t “secular” growth co’s that should massively outgrow global GDP and trade at a premium to the market on normalized metrics. Just that semis are, always have been and always will be growth cyclicals due to these inventory cycle dynamics that are therefore best measured on peak to peak, trough to trough, throughcycle metrics and valued on normalized EPS/FCF.

Net, net, semis outside of DRAM have rarely traded like the growth cyclicals that they are (trough multiple on peak EPS and vice versa) over time - often get peak on peak as a new generation of analysts is skeptical of the aforementioned iron law and inventory dynamics (see replies to my negative semi tweets from this timeframe) and there is *always* a secular story even if todays AI dynamics are unusually powerful. I.e. Semi investors have historically been unusually prone to believing that “this time is different.”

But the 2021 shortages made the “iron law of semi investing” so clear to even casual observers that this may change. Semis may actually begin trading like the growth cyclicals that they are via peak multiples on trough fundamentals and trough multiples on peak fundamentals. And being valued like “growth cyclicals’ rather than “secular growth” co’s would almost certainly lead to lower stock volatility in response to inventory cycles which would then logically lead to higher multiples over time.

[Pythia Cap: Partially Conductive @PythiaR]

💯🎯

[Sorian @sorianmare]

They are trying to flatter in order to invest in his next company

She/he does it all the time

[Pythia Cap: Partially Conductive @PythiaR]

THEY FIRED JENSEN AND NOW EVERYTHING IS BREAKING

[Quantіan @quantian1]

Cheating on your wife is indeed not a fireable offense. Multiple affairs with your direct subordinates at work, on the other hand, is the most justifiably fireable offense of all time, and if you didn’t immediately revise your opinion of Jensen when *that* news hit, well…

[The Washington Sun @washingtonsun]

The president allegedly approved the chip exports after Nvidia contributed $26 million toward his personal priorities, including the White House ballroom project. https://t.co/IsAPzc2tLS

[Rex "garbage in" Douglass Ph.D. @RexDouglass]

Since we're debating again what's private life versus judgment/competence, I'll retell my favorite Bill Clinton story which is his staff moved unpaid intern Monica Lewinsky out of the White House for obvious security and political concerns and Bill fought to have her moved back.

[Pythia Cap: Partially Conductive @PythiaR]

@EmJay72159508 Yes that's why he sent an email to all his employees and resigned in disgrace instead of just telling the board he was in an open relationship.

[Pythia Cap: Partially Conductive @PythiaR]

Lmao if your main concern was your wife you wouldn’t have had multiple affairs go fuck yourself.

[Negligible Capital @negligible_cap]

Jensen lately per Bloomberg:

“According to people who’ve spoken with him in recent days,  Huang has already taken a penitent turn, castigating himself as a “piece of sh--.” He claims not to care what happens to himself at this point. His main concern, he says, is his wife, and not “ruining the lives” of the multiple women now romantically linked to him in the public imagination.”

[Pythia Cap: Partially Conductive @PythiaR]

I think a/the problem is going to be there are a bunch of really wealthy employees some of whom presumably stayed because of the culture/halo of jensen and now… why stay?

Also the mgmt team might be deep and steward the company strategically just fine but culturally there will be a shift and a shuffle and when you’re executing on an annual product cadence at $500b revenue scale that can be an issue.

[Soren Kierkegaard @BumrahBachi]

The jensen defense is very simple really

> We don't know if alice is a spy and he sold us out
> We don't know if he has an open marriage

But the jensen defenders are being so fucking weird

> "He's a billionaire he can have a side piece"
> "He's been couped by the EA/Anthropic deep state"
> "China wants him out and we hate china so I want him in even if he sold us to china"
> "He's just a little billionaire who made a little mistake"
> "This will lead to a violent asian american revolution"

Everyone has such entrenched interests and priors that they have to engage in gymnastics to align their agenda and they're not reaching for the simple argument