Latest news with #JimChanos
Yahoo
02-08-2025
- Business
- Yahoo
How the crypto treasury craze is creating ‘true scarcity,' says BitMine chairman Tom Lee
Tom Lee reckons investors are overlooking one of the most important trends inside the crypto treasury craze: the aggressiveness with which a handful of companies are buying up Ethereum. 'There's true scarcity in Ethereum right now,' the Wall Street strategist and chairman of BitMine Immersion Technologies said in an interview with DL News. But it's not just the asset — 'it's the velocity at which we're accumulating it,' he said. Michael Saylor kicked off a trend that is only getting bigger — buying cryptocurrencies and holding them on a company's balance sheet. Strategy, the firm he leads, now holds more than 3% of Bitcoin's total supply, and shareholders have enjoyed a tenfold price appreciation in the company's stock price since it started buying the cryptocurrency in August 2020. Now, companies are looking down the risk curve into other cryptocurrencies, like Ethereum. Lee recently became chairman of BitMine, a little-known Bitcoin miner that has quickly become the largest public holder of Ethereum. In just two weeks, the firm has accumulated over $2 billion of Ether. But the firm is just getting started. According to a July investor deck titled The Alchemy of 5%, BitMine plans on acquiring up to 5% of the entire supply of Ether. But Lee did not reply to questions about supposed risk presented by Ethereum treasury companies, instead cutting the interview short. Concerns abound. Famed short seller Jim Chanos has called one of Strategy's financial maneuvers 'complete financial gibberish' and shorted the company's stock. Coinbase analysts warned treasury companies pose 'systemic risk' to the crypto market. Macro analyst Noelle Acheson has called the trend 'alarming.' For Lee, Ethereum presents a bigger opportunity than Bitcoin. 'Ethereum is the biggest macro trade of the decade,' he told DL News. Why? Stablecoins. Indeed, stablecoins have become a killer use-case for crypto, amassing a staggering market valuation of $272 billion. And now that US President Donald Trump signed into law the Genius Act, which opens the floodgates for banks to issue their own stablecoins, the pie could get even bigger. 'Stablecoins are the 'ChatGPT' of crypto,' Lee said. 'And Ethereum is the backbone. It's legally recognised, and has zero downtime.' Mimicking Strategy Popularised by Strategy's Bitcoin-per-share model, BitMine is rolling out its own 'ETH per share.' Investors can now track how much Ethereum the company holds for each share of stock. It's a way to measure value — not by earnings, but by onchain assets. As of July 27, BitMine reported about 600,000 Ether worth around $2.2 billion, along with 192 Bitcoin and over $400 million in cash. With 118 million fully diluted shares, their net asset value per share comes in around $23—up from $4 less than a month earlier. The company plans to grow that figure through market activity, reinvested cash flow, and — ideally — a rising price of Ether. Unlike Bitcoin treasury plays, however, BitMine's thesis doesn't rely on price alone. By staking its Ether, BitMine expects to generate $100 million in net income annually, making it part treasury play, part infrastructure business. The company hasn't disclosed when it will start staking, nor how much it will allocate to staking. Transforming capital markets 'MicroStrategy transformed capital markets,' Lee said, using a former energy giant as an example. ExxonMobil had the largest market capitalisation for long stretches of time between the 1990s and 2010s, often trading places with Apple and other tech giants. Its valuation, however, wasn't just based on quarterly earnings — it was underpinned by its massive reserves of untapped oil and gas, which the market treated as future revenue. According to Lee, Exxon was valued for the resources it controlled, a logic, he said, that now applies to crypto treasury companies. Strategy, for instance, posted a $10 billion profit in the second quarter, propped up mostly by its Bitcoin holdings. 'It's a new world: companies valued purely on their crypto holdings.' Pedro Solimano is DL News' Buenos Aires-based markets correspondent. Got at a tip? Email him at psolimano@ Sign in to access your portfolio
Business Insider
02-08-2025
- Business
- Business Insider
This Is How Much AMZN, GOOGL, MSFT, and META Will Spend on AI This Year
Big Tech companies are ramping up their spending on artificial intelligence, with Amazon (AMZN), Alphabet (GOOGL), Microsoft (MSFT), and Meta (META) expecting a combined total of $364 billion in capital expenditures for 2025. This is a sharp increase from their prior forecast of $325 billion earlier this year. Nevertheless, despite the massive spending, investor reactions were mostly positive, with shares of Meta, Microsoft, and Alphabet rising after their recent earnings reports showed strong results. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Microsoft led the group with $88.7 billion in capital expenditures for Fiscal 2025, which exceeded its earlier projections. Separately, Meta raised the lower end of its spending outlook for a new range of $66-$72 billion. This was due to aggressive AI data center investments and talent recruitment. In addition, Alphabet boosted its estimate from $75 billion to $85 billion, thanks to strong demand for its Google Cloud services. As a result, analysts responded positively, with Wedbush raising Meta's price target to $920, RBC lifting Microsoft's to $640, and Needham increasing Alphabet's to $220. However, Amazon was the outlier, with its shares falling despite forecasting $118.5 billion in spending. The drop was due to worries about weaker operating income guidance at Amazon Web Services, even as its AI business grows at triple-digit annual rates. Interestingly, though, while AI investments are making many investors optimistic, some market observers, including Apollo's Torsten Sløk and short-seller Jim Chanos, warn that an AI bubble could form that surpasses the dot-com era. Which Big Tech Stock Is the Better Buy? Turning to Wall Street, out of the four stocks mentioned above, analysts think that AMZN stock has the most room to run. In fact, AMZN's average price target of $259.87 per share implies more than 20% upside potential. On the other hand, analysts expect the least from META stock, as its average price target of $850.98 equates to a gain of 13.4%.
Yahoo
31-07-2025
- Business
- Yahoo
Saylor's New $4.2 Billion Bitcoin Plan Aims to Reassure Skeptics
(Bloomberg) -- Michael Saylor isn't backing down. The Strategy co-founder is preparing to sell $4.2 billion more in preferred stock to fuel his latest Bitcoin bet — while throwing a lifeline to investors worried he's diluting them into oblivion. The World's Data Center Capital Has Residents Surrounded An Abandoned Art-Deco Landmark in Buffalo Awaits Revival We Should All Be Biking Along the Beach Budapest's Most Historic Site Gets a Controversial Rebuild San Francisco in Talks With Vanderbilt for Downtown Campus The plan, unveiled with second-quarter earnings on Thursday, is Saylor's latest answer to the big question hanging over his stock: how long can he keep using a lofty premium to fund ever-larger Bitcoin buys? To reassure shareholders, Strategy pledged it won't issue new common shares at less than 2.5 times its net asset value, except to cover debt interest or preferred dividends. At the same time, Saylor will keep tapping the market 'opportunistically' when the premium is high, turning equity sales into fresh Bitcoin buys. The move does two things at once: it locks in a floor aimed at reassuring any skeptical shareholders and arms the company with a larger war chest to keep buying Bitcoin. It's a double play that pits Saylor directly against hedge fund managers like Jim Chanos, who have been betting the company's premium will collapse. 'That would put common shareholders who are concerned about potential dilution at ease,' said Brian Dobson, managing director for Disruptive Technology Equity Research at the brokerage firm Clear Street. 'The market is reacting positively to Strategy's equity products. The demand is there as evidenced by their substantial capital raises.' It's the latest in a string of financial maneuvers that have transformed a once-obscure software firm into a leveraged Bitcoin proxy. The dual move showcases Saylor's mastery of capital markets during these bullish digital-asset times: using a self-imposed floor to placate critics, while simultaneously arming the company with fresh ammunition to keep buying Bitcoin. The company - which is known formally as MicroStrategy Inc. — has already raised more than $10 billion this year through stock and structured offerings, feeding a balance sheet now holding $74 billion in Bitcoin. Its stock has surged 3,300% since Saylor's first crypto purchase, outpacing Bitcoin itself and forcing hedge funds into a high-stakes battle over whether his premium-fueled strategy can last. Since Strategy's first Bitcoin purchase in 2020, Saylor has sold equity, issued various types of debt and layered stacks of preferred shares on top. In the process, he has encouraged a fleet of imitators and spurred a new industry of public companies following a so-called treasury strategy dedicated to buying and holding cryptocurrencies. Good Times Since Strategy trades so far above the value of its Bitcoin, the company can sell stock at rich levels, buy more Bitcoin, and in turn reinforce that premium. It's a reflexive loop that critics warn would snap if sentiment shifts. For now, Saylor's ability to turn equity markets into a Bitcoin funding engine has made his firm both a proxy for the cryptocurrency and a pressure point for critics betting the spread will collapse. The company reiterated that it registered an unrealized gain of about $14 billion in the second quarter. After factoring in deferred taxes, the Bitcoin treasury company had net income of $10 billion, or $32.60 a share, the firm said in a statement. The eye-catching benefit, first disclosed at the start of the month, was due to a rebound in Bitcoin's price and a recent accounting change. Demand for offerings can fluctuate depending on Bitcoin prices. The firm had to sweeten one of its earlier preferred stock offerings this year with a steep discount to win over price‑sensitive buyers. Just last week the company launched a new kind of preferred stock, dubbed Stretch, that was upsized from $500 million to more than $2 billion. It was yet another move that showed how deftly Saylor can turn financial engineering into crypto firepower. For now at least. 'Strategy's upsize is a huge reflection on the market demand for its Stretch Preferred Stock offering,' said Tyler Evans, co-founder and chief investment officer of UTXO Management. 'They have had similar upsizes from previous preferred stock offerings, but this one is an eye-popping number.' --With assistance from Kirk Ogunrinde. Burning Man Is Burning Through Cash Russia Builds a New Web Around Kremlin's Handpicked Super App Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
31-07-2025
- Automotive
- Yahoo
Carvana Reports Higher Quarterly Profit on Record Car Sales
(Bloomberg) -- Online car retailer Carvana Co. reported a sixfold increase in net income and record quarterly sales of used vehicles, countering some of the bear arguments put forth recently by short sellers. The World's Data Center Capital Has Residents Surrounded An Abandoned Art-Deco Landmark in Buffalo Awaits Revival Budapest's Most Historic Site Gets a Controversial Rebuild San Francisco in Talks With Vanderbilt for Downtown Campus We Should All Be Biking Along the Beach Carvana's sales growth helped push earnings per share to $1.28, surpassing the average estimate of analysts surveyed by Bloomberg. Revenue rose 42% from a year earlier and also beat estimates. The shares jumped as much as 17% in extended New York trading. Famed short seller Jim Chanos publicly shorted the stock earlier this year, saying its profits are primarily driven by the sale of loans it originates — not from selling cars — and that it's overvalued after a long run up in the shares. The stock has risen more than 160% over the past 12 months. In most quarters Carvana gets most or all of its income from selling car loans that it originates, or would have lost money without those gains. The company books the entire value of the loan sale at once, while other retailers book the revenue over the life of the loans. In the second quarter, Carvana said loan sales accounted for $274 million of its $308 million in profit. Still, Carvana Chief Executive Officer Ernest Garcia III has been growing the company's sales and says that, with just 1.5% market share in the US used-car market, there is more room to run. The company added inventory in the quarter and made more available to potential buyers. Carvana also plans to boost its advertising spending with a brand-building campaign in the current quarter. 'We're on plan,' Garcia said on an analyst call. 'We grew sales by 41% year-over-year. We grew inventory available for our customers by 50%. So we're obviously growing production a little faster than we're growing sales.' Garcia also has been wringing costs out of the company's sales and vehicle reconditioning networks. Operating expense per retail unit sold shrank by about $150 from a year ago. Carvana maintained its full-year outlook for earnings before interest, taxes, depreciation and amortization in the range of $2 billion and $2.2 billion, roughly bracketing the average analyst estimate. The company also disclosed in a regulatory filing that it received a subpoena in June from the Securities and Exchange Commission related to allegations made in a short-seller report in January. Hindenburg Research, which has since been disbanded, issued a report that month alleging that the company had lax underwriting standards and sold its subprime loans to related parties to pad its profits. Carvana refuted the allegations. (Updates with more details beginning in seventh paragraph.) Russia Builds a New Web Around Kremlin's Handpicked Super App Burning Man Is Burning Through Cash It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
23-07-2025
- Business
- Yahoo
Why famed short seller Jim Chanos is warning Bitcoin treasury companies of SPAC-style risk
Jim Chanos has seen this movie before — and he says it doesn't end well. The legendary short seller that called the 2001 Enron bankruptcy is now sounding the alarm on the booming market for corporate Bitcoin treasuries. Chanos is comparing it to the SPAC mania of 2021 that raised $90 billion in just three months before crashing spectacularly. Only this time, it's public companies issuing convertible notes and preferred shares to buy Bitcoin — and not much else. 'We are seeing SPAC-like 2021 numbers in the Bitcoin treasury market right now,' Chanos said on the Bitcoin Fundamentals podcast this week, adding that there are reasonably large announcements every day now — 'hundreds and hundreds of millions of dollars a night.' It shouldn't be a surprise that Bitcoin treasuries have become all the rage. Since Michael Saylor adopted the scheme for his firm, now-called Strategy, the company's stock has soared more than tenfold. That success has brought in a deluge of other companies that want to mirror the model — and reap the same returns. Some, like former budget hotel operator Metaplanet, scrapped its previous business model in favour of a Bitcoin treasury scheme. Its market capitalisation has ballooned to $6 billion from $13 million in one year. SPAC boom and bust Chanos's warning is warranted. SPACs — those blank-check companies that exploded in 2020 and early 2021 — raised $90 billion in just 90 days at the height of the craze. They promised easy exits, moonshot mergers, and infinite upside. Instead, they delivered one of the most brutal post-hype collapses in modern market history. Indeed, many of them tanked. Electric truck startup Lordstown Motors went public via SPAC, hyped a futuristic factory, only to declare bankruptcy in 2023. Its stock dropped more than 98%. Hydrogen truck play Nikola rocketed on nothing more than a rolling prototype and a catchy narrative. The founder was later convicted of fraud. Shares are down over 95% from their peak. By mid-2022, the De-SPAC Index, which tracks companies post-merger, had cratered more than 75%. 'Me too' trades Chanos, who's shorting the premium between Strategy's stock and its underlying Bitcoin holdings — to then go long on Bitcoin — says capital markets are being flooded with 'me-too' Bitcoin trades. 'Now we have to bring in what's also new in the past handful of months in 2025, and that is the proliferation of me-too strategies,' Chanos said. 'I believe it's over 130 companies already — and growing.' Collectively, 154 public companies control about 863,298 Bitcoin worth around $102 billion. According to 26 firms have become Bitcoin treasuries in the past 30 days. Financial engineering Just as SPACs were built on cheap capital, investor euphoria, and zero business fundamentals, the new wave of Bitcoin treasury companies are being built on clever financial engineering schemes. One example is Strategy's preferred shares. Michael Saylor raised over $1 billion through this model just a few months ago. Preferred stock lands in between debt and common equity. Similar to bonds, preferred shares usually pay a fixed dividend and tend to be considered less risky than common stock. Whereas debt comes with a maturity date — the day when a loan has to be paid — preferred stock does not. Holders of preferred shares usually don't get voting rights, but they do have priority over common shareholders when it comes to dividends. And since preferred stock never matures, Strategy has no need to repay the principal, nor does it face the same refinancing or liquidation risk as it would with traditional debt. For Chanos, it's 'complete financial gibberish.' And just like the SPACs, he warns, it could all implode once the money dries up or sentiment turns. Pedro Solimano is DL News' Buenos Aires-based markets correspondent. Got at a tip? Email atpsolimano@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
