Value trap?

Not selling you on a substack

[Value trap? @itsatrappp]

Obviously Net income won’t be that clear cut because of re investment. However, cash flow is very easy to calculate. Bullish big time

[Value trap? @itsatrappp]

$DGXX back of the napkin math here. @michelamar3 said today 70/30 loan to cash term. So at 140 mill of cash we can assume there’s 300mill of loan available? Run rate on colo and Neo cloudz will be 17 million a month by Q1 2027. That’s a 204 mill annual revenue run rate!! Even if we assume after SG&A, cash flow for interest on debt for build out (if there is any) a 30% net income margin that’s 61 million a year net income on 90 million shares now? What multiple do you put on net income of .67/share for a growing, Tier 3 data centre company with wayyyyy more MW’s available? 40X? Maybe more? I’m so bulled up it isn’t funny

[Value trap? @itsatrappp]

@JaxxMcbride Ya he specifically said “think hyper scalers” when talking about the CO-LO deals. Not to mention the latest press release mentioned coming deals with hyper scalers. Maybe do some more digging

[Value trap? @itsatrappp]

@JaxxMcbride “Aaannnnd it’s gone” people’s money who short this company

[Value trap? @itsatrappp]

@Ovatek_Invests Which is why it’s nice that it’s cut out of the Parent company

[Value trap? @itsatrappp]

You’re right. The super micro partnership and all the information around USDC has been vague. Here’s how I understand it. It’s a “definitive purchase order agreement” and listening to Michel Amar it’s sounds like USDC purchases all hardware for ARMS from Super micro, They then collaborate with install and set up and testing, and sell this as a turnkey service to hyper scalers or anyone who wants to buy them. Michel also said “they’re leveraging their partnership and expertise in Supermicro to assist in setup”. So to me the margin in the whole USDC business is essentially how much more can you sell it for minus your expenses and what help Supermicro gives you. To me it does not sound like a high margin business at all. Unless customers are willing to spend big bucks ahead of time to get hardware and ARMS purchased through Super Micro. It’s honestly a contract by contract business and will be super lumpy and hard to predict. Yes it could be wonderful. But it will be somewhat capital intensive to operate. Super Micro is not doing everything out of the goodness of their heart. It’s a purchase contract essentially with some perks.

[Value trap? @itsatrappp]

@chinoalemano So $DGXX has no costs in USDC other than SG&A expenses? They simply broker ARMS pods and pocket a revenue share? If so I agree, that’s frustrating as a share holder. The way I understand it is they have shared expenses as well.

[Value trap? @itsatrappp]

Does SMCI manufacture everything at 100% their cost? Infrastructure in the form of plants or factories, labour, materials, testing, logistics for delivery, and if they want to scale large up front costs to expand? My understanding is it’s a partnership. And they share costs. I could be wrong, But I’d like to see where USDC is a “broker” and has very little overhead expenses

[Value trap? @itsatrappp]

@runners271851 We will get a pop on AI revenue. Not sure what that will look like though. Big one for me is a Co-Lo deal. That with a financial plan to get to 100MW makes discounting cash flows easy. If plan has minimal dilution then this takes off

[Value trap? @itsatrappp]

@ROIRecruiter If they play this right. This could be big with minimal dilution……

[Value trap? @itsatrappp]

No idea. Press release said 90MW Co-Lo and 10MW GPU-aas for 26,27 goals. I’d imagine the first 10MW will be a proof of concept/GPU-aas ? But maybe LOI will have stipulations on percentage after initial proof of concept being CO-LO? Very very interesting though. Also LOI could include upfront capital for certain MW build out?

[Value trap? @itsatrappp]

@JaxxMcbride @michelamar3 @DigipowerX Got to be patient. They need cash for capital ratios for funding to build this out further. People forget that

[Value trap? @itsatrappp]

@paullechiaro “So far” when you have infrastructure to build out. You need certain capital ratios to get loans, grants, or even hyper scalers to fund build out cause you’re not insolvent

[Value trap? @itsatrappp]

@runners271851 Sir, this is a sub $200 mill market cap company on track to have $150 mill revenue annually that’s high margin. I’ll buy more sub $2 thanks

[Value trap? @itsatrappp]

@CanadianPM I hate to be a disgruntled Albertan saying I told you so…..However, This could be an issue later due to similar heavy crude characteristics that we have

[Energy Blogger @energy_blogger]

Venezuela production cannot increase significantly overnight

Even to bring back ~2.5 million b/d (2015 levels) will be a challenge in short term

If political stability achieved, US imports profile to change a lot in next couple of years

#OOTT #Oil
Img: https://t.co/w1HUu17A3L

[Value trap? @itsatrappp]

@socoastcpa On dilution it sucks but here is my reasoning on the growing cash pile through dilution. 1). Cash for tier 1-3 upgrades rather than debt is prudent. But more important 2) having a good liquidity ratio helps get better deal terms with hyper scalers and….. banks for North Carolina

[Value trap? @itsatrappp]

@socoastcpa I guess my counter to the Peter Lynch thing is this. If you’re going to fabricate a big name investor in your company why Peter Lynch? Why not Berkshire Hathaway? Seems unimportant. The deal signing is more of a focus and the dilution. Taxes on equity can be messy