Mike Smith

Wall Steet. I lurked for a while and now time to engage. If you successfully doxx me I will buy you a GPU.

[Mike Smith @firefoxcapital]

@edzitron The converts are largely immaterial, but we are nearing a banking problem

[Mike Smith @firefoxcapital]

@BullTheoryio You forgot the off balance sheet financing and revenue recognition

[Mike Smith @firefoxcapital]

@zerohedge But what about the maintenance capex ?

[Mike Smith @firefoxcapital]

@buccocapital Midterms are going to be fun.

[Kakashii @kakashiii111]

After IREN and CoreWeave's reports.
This is a good reminder for you all.

[Origo @origoinvest]

Intel financing

Let's start with AP Grange which was a $3.6B position for Athene.

This type of transaction is a common playbook for Apollo & Athene - partnering with large IG-rated counterparties to provide off-balance sheet financing.

While we lack the full specifics, the basic mechanics are as follows:

1) AP Grange Holdings LLC (controlled by Apollo) receives a 49% equity interest in FAB 34's holding entity in exchange for a $11B consideration which is partly funded by Athene ($3.6B of debt) and equity through Apollo-managed funds

2) This allows Intel to free-up capital while still consolidating physical assets on the books and without increasing leverage

3) Grange NewCo LLC enters into an off-take agreement (which provides Apollo with predictable cashflows) – Intel is also responsible for construction and O&M

4) Importantly, these contracts are guaranteed by Intel Corporation, a BBB+ rated entity. While Intel does not guarantee the Athene debt, Athene is able to obtain BBB+ equivalent rating on its exposure because the off-take agreement provides a clear cashflow profile and the contracts are guaranteed by Intel Corporation

Ultimately, this is a very low LTV deal with off-take cashflows implicitly guaranteed by Intel.

A few weeks ago Intel announced that it was repurchasing Apollo's 49% stake for $14.2B and so this position is now realised (potentially with some upside)

7/

[Mike Smith @firefoxcapital]

@buccocapital Why is he doing an interview in his mudroom?

[Mike Smith @firefoxcapital]

@NicoGladia Is he calling Larry Fink an idiot because 40% of his ETFs are tech and AI?

[Mike Smith @firefoxcapital]

@NicoGladia The fact that all this has been in plain site for years. Never seen a traffic signal while driving

[Mike Smith @firefoxcapital]

@LeylaKuni Is that (one) reason why the FASB is taking on a private credit project?

[Mike Smith @firefoxcapital]

@edzitron They gave some clients 24 hours for the opportunity of a lifetime

[Mike Smith @firefoxcapital]

@UnicusResearch But how are we going to build the datacenters?

[boaz weinstein @boazweinstein]

My partner @kieranwgoodwin has been so right about this space for over a year which has really sharpened my vision.

Outflows beget outflows. Gating begets outflows. Selling some of the underlying portfolio to meet minimum redemptions creates losses and begets outflows. Four recent fake abs frauds begets outflows. NAV write downs beget outflows.

How is this not going to get way worse, when ‘Frankenstein’s Monster’ of 700bn of products that vastly overpromised liquidity to retail, are so out of favor?

[Mike Smith @firefoxcapital]

@michaeljburry Also a substantial chunk of buyback “capital return” is to fund employee payroll taxes. Kinda smells like PIK to non employee shareholders.

[Mike Smith @firefoxcapital]

@kakashiii111 Got Sam tomorrow after he swapped out Sarah

[Mike Smith @firefoxcapital]

@kakashiii111 The mood at the conference is very giddy…Jensen is eating it up

[Mike Smith @firefoxcapital]

@herbgreenberg @CNBC @jimcramer Also the Axios BFD conference. CEO walked out and cancelled the fund merger.

[Mike Smith @firefoxcapital]

@UnicusResearch Oh boy…going there

[Mike Smith @firefoxcapital]

@DavidBCollum @martinfrosa The supply chain finance market is also ~$20T. Sponsored by banks and funded by private