#crushing it

on a more serious note, no crystal balls, this is the wild wild west—Godspeed!

Bitcoin Is Crashing and Exchanges Freezing Up | Patrick Boyle

Does OpenAI expect a Government Bailout? | Patrick Boyle

[9:22] OpenAI's CFO Sarah Friar explains the Co's financing at WSJ event, magic word: Innovation, raising free-cash-flow thru equity—a really bizarre claim bc OpenAI can't fund anything with FCF when that cash flow is negative. The warrant between OAI & AMD is a strategic partnership where OAI commits to buying billions of dollars of AMD's AI chips & in return AMD grants OAI warrants to purchase up to 160 million of its shares—which is about a 10% stake in the company, at a nominal price of one cent per share. When the deal was announced, AMD stock went up 24% but the deal only vests if OAI buys 6 gigawatts of AMD chips/hits undisclosed milestones/AMD's share price triples. The AMD deal would bring in almost $100 Billion worth of AMD stock, if all the targets were hit—including the tripling of AMD stock price (inflation counts? or adjusted for inflation???). But it is tied to 6 gigawatts of chip purchases, which she later explains: So one gigawatt data center build today is about a $50 Billion investment (x6, means OAI would need $300 Billion) How that really breaks down is about $15 Billion is for the land power shell, and about $35 Billion is for the chips. (ouch both sides do not know how to do the math) So to bring in $100 Billion dollars, they have to spend $300 Billion dollars; Nvidia's $100 Billion pledge to invest in OpenAI is also tied to reciprocal commitments—if all of these deals work out, OpenAI could bring in $200 Billion but that still leaves them $1.2 Trillion short. And they are burning tens of billions of dollars per year with no end in sight.

Free Cash Flow (FCF) is the cash a company generates after covering its operating expenses and capital expenditures (investments in assets). It represents the true discretionary cash available to pay dividends, reduce debt, or fuel growth, making it a critical measure of financial health, flexibility, and profitability for investors and analysts.

Key Aspects of Free Cash Flow

Formula: The most common formula is FCF = Operating CF - Capital Expenditures (CapEx).

Significance: A high or growing FCF indicates a company is efficient, generating more cash than it consumes, which can be used to reward shareholders or reinvest in the business.

Difference from Net Income: Unlike net income, FCF excludes non-cash expenses (like depreciation/amortization) and includes the actual cash spent on investing in the business, offering a clearer picture of real liquidity.

Negative FCF: If a company spends more on capital expenditures than it generates from operations, it has negative free cash flow, often referred to as a "burn rate".

Use in Valuation: Investors use FCF for discounted cash flow analysis to determine a company's intrinsic value and potential return.

Components of FCF

Operating Cash Flow: Cash generated from regular business activities (found on the cash flow statement).

Capital Expenditures (CapEx): Cash used to buy, maintain, or improve physical assets like property, plants, and equipment. 

Why FCF Matters

Financial Flexibility: Enables companies to pay dividends, buy back shares, or pay off debt.

Growth Potential: Allows for funding of new projects, R&D, or acquisitions without needing external financing.

Investor Insight: Helps distinguish between companies with high accounting profits but poor cash generation.

Felix Prehn: Congress Reduced Tariffs from 16.9% to 9.1% 8% Reduction in Tariffs = 0.80% Inflation Reduction Approximately 0.1% Inflation for every 1% Tariff [10:00]

Essentially all this upheaval in the markets make big bankers on wall street squeal with glee as they rub their hands together over the mass influx of commissions based trading as ppl scramble to buy & sell. More trade uncertainty causes ppl to recalibrate their portfolio: [a] Remove exposure to stock/companies who are affected by import tax, second order effects; [b] Same for companies who have doubled debt without significant increases in revenue are affected by higher inflation which attracts higher interest rates, a double whammy on both revenue & expense; [c] Follow big money moves, see what they are shifting in & out of.. Felix recommends investing in big tech, not giving a convincing reason to counter what we see from Patrick Boyle's analysis. Midterm results will dictate whether tax/tariffs will remain permanently in place or you can breathe a sigh of relief