🥒baller

The @MoHawksAtlanta x @DWilkins21 collab! #NBATopShotThis

My thoughts on $CIFR and AI data centers generally today: 1) Whether a pure-play AI data center company is pursuing a colocation or neocloud strategy, these are still highly volatile, hyper growth assets. 2) Generally speaking, companies don't want to broadcast strategy, or announce things they aren't sure they've accomplished. Complaining about "communication" on down days is amateur behavior. 3) One of the upshots of the colocation model is cheaper financing, because you're de-risking the portfolio earlier on. CIFR proposing to raise $850M with a 0% cash interest coupon, especially in today's higher-rate environment, to keep building and expanding is bullish. 4) We can infer from Cipher's own press release that the converts aren't intended solely to fund upgrades and design changes at Barber Lake: "Cipher intends to use the net proceeds from the offering to fund the cost of entering into the capped call transactions … and use the remainder of the net proceeds to fund additional equity investment in the Barber Lake project, support the build-out of its high-performance computing (HPC) strategy across its near-term pipeline, continue to expand its pipeline of development sites, and for general corporate purposes." (investors.cipherdigital.com/…) 5) The extra spend at Barber Lake is being mischaracterized as simply cost “overruns.” These include tenant-driven upgrades negotiated in connection with an amendment that doubles Barber Lake’s contracted lease duration from 10 to 20 years. Securing another decade of contracted revenue in exchange for additional investment is hardly a bad development, especially in a world where AI compute capacity is becoming one of the most constrained (and valuable) assets. 6) Cipher is receiving both direct reimbursements for Barber Lake upgrades and additional rent that reimburses a portion of the remaining costs, inclusive of a contractual return on capital. Effectively, Cipher is earning “interest” for fronting some of the upgrade costs. Taken together with the additional contracted lease revenue, Cipher comes out ahead even after accounting for the costs it must absorb. 7) Cipher isn't throwing money away on this deal. Quite the opposite. Even after accounting for the additional capital required, management expects Barber Lake's returns to improve across the board. Their own investor presentation says: "Lease amendment significantly improves Barber Lake's investment return profile across all key financial metrics, inclusive of the additional capital required to complete the project." 8) The timing of the converts isn't "strange" or "weird." Cipher announced the Barber Lake amendment in late September, and it's now only mid-October. Raising capital promptly to fund contracted development obligations and capitalize on an attractive financing window is hardly unusual. All parties want these facilities completed and generating revenue, and companies that aren't aggressively executing risk being left behind. 9) Convertible financing isn't free capital, and dilution is a legitimate consideration. But the relevant question is whether management can deploy that capital into projects generating returns that outweigh the financing costs and dilution. The new investor presentation suggests that Cipher believes it can, with materially improved project IRR, NPV, and MOIC at Barber Lake. 10) My opinion is that these prices for stocks like $IREN and $CIFR right now will be a golden opportunity compared to what's to come not too long from now. Look, you can either spiral down the rabbit hole trying to account for every last dollar and speculate about what management might be hiding, or evaluate what's actually been disclosed. The lease amendment, the financing, the cost-sharing framework, and the projected returns are all there. There's more than enough information to reasonably assess these as positive developments without resorting to blind faith. And at some point, you have to recognize the quality of the team executing this strategy and trust that they're making the best possible decisions with the resources and circumstances in front of them. That isn't blind faith in @rftylerpage. It's informed confidence in management backed by the economics of the deals they're putting together.

$CIFR IS BUILDING ANOTHER MEGA DATA CENTER IN TEXAS Cipher Mining acquired the rights to 187 acres, where they plan to build a 500 MW data center named Milsing. The site is part of Ciphers 2.6 GW footprint across Texas with an energization timeline of 2028. The project shows Cipher's rapid growth in AI infrastructure, not just bitcoin mining 📈