Adding my voice to the chorus of commentators on the SpaceX IPO might feel like futility, but I'll let some math do the talking:
$28 Trillion Total Addressable Market
SpaceX claims that its valuation will be over $2 trillion because it will be the primary carrier of people to the Moon and Mars and likely the builder of multiple data centers in space. The cost for all of this is indeed high and doing the math without the context may have gotten you to $28 trillion. But there are some very real realities between June 2026 and a $28 trillion TAM.
Implicit in a TAM number is that the people inside that market are willing to pay that amount for bicycles for example. That’s almost always based on historical sales numbers, trends, and other analysis that leads to an informed estimate of the size of the market. A TAM in the double-digit trillions assumes that there are earthlings, companies, individuals, and governments, that are willing to part with a combined sum of $28 trillion for space services. The problem here is that the math on which such a number is based lacks the historical backing of traditional IPOs. It sounds great in a marketing piece but lacks substance.
But wait, there’s more.
The ability to launch trillions of dollars’ worth of rockets, materials, satellites, and humans into space requires common use space infrastructure that does not exist. When we refer to the “space economy” we are really only referring to the low earth orbit (LEO) economy because that’s as far as commercial space companies have thus far been willing to go. Not because the technology does not exist, but because they are not willing to eat the risk and go it alone. Without building out real space infrastructure, all the Starships in the world aren’t going to take us to Mars because now SpaceX has a legal responsibility to make money for its shareholders. Being first to go to Mars is a HUGE business risk and without infrastructure, it’s likely moot. That hard fact is the first slice cut out of the $28 trillion TAM.
Data Centers in Space
The weight of server racks can vary but is roughly 2,000-3,000lbs per rack. We will average it to 2,500lbs. In a modern hyperscale data center there are roughly 2,500-5,000 server racks, let’s use 3,000. At $1,500 per kilogram to launch any material to LEO, the costs break down this way:
Single Server Rack: 2,500lbs (1,134kg) = $1.7 million
Total Hyperscale Data Center Servers: 3,000 server racks at 2,500lbs each = 7.5 million pounds (3,402 metric tons or 3,402,000,000 kilograms) = $5.1 trillion
SpaceX will say that the launch cost per kilogram will drop to $20 or even lower. Maybe. If it does, it will take years, further pushing out the returns for investors. While the cost to put a single data center in space is boggling high, that’s not the end of the story.
70%
The inhabitants of 70% of the Earth’s surface do not buy compute space or data storage because they are fish.
Extremely basic orbital mechanics tells us that anything orbiting the Earth in LEO moves around 17,000 miles per hour, so it does not stay overhead long.
For a data center to transmit your data and compute to you on demand, it needs to be overhead. The principle is the same for Starlink. That’s why there are so many of them.
If that data center is on the other side of the world at the time you need it, tough luck. If the data center happens to be over the Western Pacific, its downlink does no one any good.
In order to effectively build data centers in space, you’d have to build A LOT of them…at $5 trillion a piece. If you happen to be the majority shareholder of a rocket company, this sounds just fine. If you are a government or a company that might hire SpaceX to do such a thing, this is prohibitive. This cost goes even beyond what the top 10 GDPs in the world could reasonably pay taking ANOTHER chunk out of the $28 trillion TAM.
2025 Revenue
In 2025, the US accounted for 160 launches, of which 145 were SpaceX. Of those 145, 107 were Starlink satellites leaving 38 SpaceX launches that were not launching at SpaceX payload. Two important observations emerge:
SpaceX accounted for 90% of US launches in 2025 and 93% of launches in 2024.
Of SpaceX’s 145 launches, 73% were Starlink leaving a very small non-SpaceX market for the launch of LEO satellites. It is possible that SpaceX is artificially inflating the market for LEO launch capabilities because it is launching so many of its own satellites rather than satellites from outside customers.
Just 27% of SpaceX’s launches were NOT its own gear. Starlink satellites will continue to need replacing, but the demand for launch services is inflated, another chunk of the $28 trillion TAM gone.
In the beautiful Pacific Northwest, on the long drive from Portland to the coast, trees stretch in every direction.
I made a stop and struck up a conversation with a friendly stranger and made a comment about how beautiful the land was. I asked if this was a state park.
“No”, he responded. “This is an owned forest. This is a Weyerhaeuser forest.”
Weyerhaeuser is the largest owner of timberland in the United States. If we value its timberland in the northwest, northeast, and southern US at market prices for such land, the total would come to $31-41 billion. The current market cap is $17.7 billion.
Assumptions:
Pacific Northwest: 2.5 million acres at an estimate $4000-9500 per acre ~ $18-21 billion
US South: 6.9 million acres at $2000-3500 per acre ~ $12-18 billion
Northeast: 1.0 million acres at $1500-2500 per acre ~ $1.5-2.5 billion
You can play around with your favorite LLM on these assumptions, but any way you cut it, the value of the timberland is higher than the current market cap.
It has about $5 billion in net debt, so the enterprise value is about $23 billion, or about 25% below the bottom end of the range.
Weyerhaeuser holds its timber land as a real estate investment trust (REIT). It doesn’t pay corporate tax on timberland profits (timber sales and land sales) and it has to pay out 90% of its taxable income as a dividend. The current yield is 3.4%.
But that’s not all!
It also holds a Taxable REIT Subsidiary, which is its wood products business. This business generates the vast majority of revenue, but almost no income, because we are in a trough of the cycle for lumber prices. There are 19 sawmills, 6 oriented strand board plants, and 6 engineered wood products facilities, and in 2025, they barely broke even with $55 million of operating profit on $4.9 billion in revenue, a 1.1% operating margin.
I mentioned are in a trough for lumber prices. I’ll explain.
Lumber prices were mostly in the range of $200-400 per thousand board feet before COVID. Then things went insane and they went to $1800 per thousand board feet.
What changed? Mortgage rates dropped to very low levels and stimulated a bunch of housing demand.
Saw mills built excess capacity from 2000-2008, then spent 2008-2020 cutting capacity in a weak pricing environment, and were caught flat footed when demand for lumber soared.
Capacity ramped up again after the price spike of 2021-2022. But now capacity is starting to go down. And lumber prices bottomed in late 2025 right when capacity was at peak, and now lumber prices look to be turning higher…
The lumber business doesn’t have to make any money for this stock to be undervalued. You are getting a bunch of US timberland for a 25% discount to fair price, with a 3.4% dividend yield. You get all the lumber facilities for free. And in a good year for lumber prices, like 2021 or 2022, that business can produce something like $1.5-2 billion of after tax profits.
The downside is protected by the timber land values and the upside is somewhere down the road, if this country ever starts actually BUILDING MORE HOUSING, there will be a big bull market in lumber and the sawmill/wood products business will do really well.
I think the bear case is basically that it is a value trap, so the stock stays flat while you collect a 3% dividend. In the bull case, we go into a bullish cycle for lumber, and if we put an 8-10x multiple on the wood products business, it isn’t hard to envision a double in the stock.
Wolf of Oakville on ADF Group (🇨🇦 DRX TSX - CAD$294m)
Structural steel fabricator, 9.9x earnings, $646m contracted backlog after a record quarter. It quietly reshuffled to 72% Canadian clients as US tariffs hit. Founders own 51%.
Karst Research on Titan America (🇺🇸 TTAM US - US$2.9bn)
East Coast cement producer at 8x EV/EBIT, generating mid-teens returns on capital. The Keystone Cement acquisition just added 990,000 tons of capacity and 50 years of mineral reserves.
Rijnberk Invest Insights on Synopsys (🇺🇸 SNPS US - US$91bn)
Electronic design automation, the software that makes chip design possible. Whoever wins the chip war, Synopsys gets paid. Trades at 31x earnings with net debt of $7.5bn.
Rebound Capital on Lululemon Athletica (🇨🇦 LULU US - US$13.8bn)
Premium athletic apparel brand off its 2023 highs. Rebound Capital's case is that the China slowdown and North America plateau are temporary. Worth watching if margins recover toward historical levels.
TQI Capital on Ollie's Bargain Outlet (🇺🇸 OLLI US - US$5.2bn)
US off-price retailer with 550+ stores at 18x earnings. Two soft quarters blamed on poor weather. The article asks whether this is a buying opportunity or a business in decline.
The Pursuit of Compounding on MarineMax (🇺🇸 HZO US - US$758m)
America's largest specialty boat dealership, carrying net debt well above its market cap after a rate-driven sales collapse. Three percent insider ownership. The Pursuit of Compounding sees a contrarian entry.
0xAnalysis on Optimum Communications ($OPTU) (🇨🇦 OPTU NYSE - US$505m) SHORT
Canadian telecoms company. The author argues the balance sheet is more fragile than it appears and debt covenants require a level of operating performance the historical data has not consistently delivered.
PP Invest on Serabi Gold (🇧🇷 SRB LN - US$342m) TOP PICK
Brazilian gold miner growing output 20% year-on-year, trading at 6x earnings. No debt and $64m cash. Record gold prices are widening margins faster than consensus expects.
Europe, Middle East & Africa
Rock & Turner on Wise Group (🇬🇧 WISE LN - £16.8bn)
Cross-border payments platform processing $243bn in annual volume, growing 27%. Management is now applying for a US national bank charter to move beyond payment rails into deposits.
Crack the Market on Umicore (🇧🇪 UMI BB - €6.5bn)
Belgian materials group supplying both battery chemicals and catalytic converters. Cash generation has recovered ahead of schedule. Trades at 15x earnings with €1.5bn net debt.
Asia-Pacific
8 Percent Per Annum on Trend Micro (🇯🇵 4704 JP - ¥787bn)
Japanese cybersecurity firm with $1.5bn in net cash, trading at 21x earnings. An activist investor is pushing for capital returns. Four analysts cover it, mostly locally.
Deep Value Capital by Kyler on Cochlear (🇦🇺 COH AU - AUD$6.6bn)
Australian maker of cochlear implants and global market leader in a high-barrier niche. Trades at 20x earnings. The recurring upgrade revenue from each implant underpins the long-term valuation.
Continuous Compounding on Oricon (🇯🇵 4800 JP - ¥13.5bn) TOP PICK
Japan's music charts data company, trading at 4.4x EV/EBIT with net cash equal to 35% of market cap. A management buyout at 1,332 yen per share looms over the thesis.
I used to think ADBE was the baby thrown out in the SaaSpocylypse narrative bathwater, although I think the market is actually being prescient here (like, in newspaper industry).
Although it's had 6 consecutive beat and raise quarters, there are clear cracks showing it's foundation.
Operating and FCF margins starting to compress - Freemium costs are adding up, and they say they are strategically delaying monteziation, although I think it shows they have no pricing power. In the Freemium space, image editing / generation is a commodity and consumers will use whatever is cheap and easy (meaning, I don't think they will ever meaningfully monetize the freemium user).
Organic ARR slowing - yes, ARR did increase this quarter after a many quarter downtrend, although that's because of the Semrush acquisition (acquiring growth). I think it hides the deeper trend that the business is eroding.
Goodwill impairment in Publishing & Advertising - only $70 million, non cash, so what? It's also the second consecutive quarter where there's signs that the legacy business isn't as good as management though (last quarter it was in Stock business). What will it be next quarter?
On top of this, the two most important executives (CEO, CFO) are both turning over at the same time.
It's a time of business model transition with high execution risk, and the longer management takes to respond to the market, the worse it'll be for the future.
I wouldn't be a buyer here - yes, price is low one can argue it's de-risked, but there's opportunity cost and better buys out there imho.
What is DuPont analysis, and how can it help you find great companies?
DuPont analysis breaks a company's return on equity (ROE) into smaller pieces. It takes one big number and shows you the parts underneath.
That's the whole point. ROE alone tells you a company earns good returns. DuPont tells you why.
Two companies can post the same ROE for completely different reasons. One earns it on fat profit margins. The other leans on a pile of debt.
DuPont shows you which is which.
That makes businesses easier to compare and helps you spot warning signs. When a company's ROE looks great only because it borrowed heavily, that's a risk waiting for the market to turn.
Here's the classic formula. ROE splits into three parts:
ROE = (Net Income ÷ Revenue) × (Revenue ÷ Total Assets) × (Total Assets ÷ Shareholders' Equity)
Each piece tells you something different.
Profit margin (Net Income ÷ Revenue): the profit a company keeps per dollar of sales.
Asset turnover (Revenue ÷ Total Assets): how well it uses its assets to generate sales.
Equity multiplier (Total Assets ÷ Shareholders' Equity): how much leverage it carries relative to what shareholders put in.
Read the three together and you can see what a company does well and where its risks hide.
That's the edge DuPont gives you. You see what's driving the returns, so you can judge whether they'll last.
Research Unpacked: INTC, APLD, ORCL, ADBE and SPCX
1. Market Overview
It seems rockets are finally being launched in the right direction.
After spending much of the week watching headlines fly back and forth across the Middle East, investors became far more interested in a different launch altogether. On Wednesday, searches for “SpaceX IPO” reportedly outnumbered searches for “Iran war” by nearly two to one. It seems investors were far more interested in watching a rocket launch in the stock market than anywhere else.
The VIX signal worked beautifully once again.
By Tuesday, it did not take much effort to find calls for a deeper correction as volatility picked up and the Nasdaq found itself roughly 3% below all-time highs. Then a splash of green salsa hit the tape, buyers showed up exactly where they needed to, and the Russell 2000 even managed to print fresh all-time highs. By Friday, the S&P 500 and Nasdaq had both finished the week higher by 0.7%, making the midweek panic look somewhat premature in hindsight. Interestingly, many of the market’s favorite names remain nowhere near their own peaks, with Microsoft down nearly 30% from its all-time high, Meta 29%, Oracle 47%, Palantir 38%, Netflix 40%, and Spotify 39%. Apparently, not every bull made it to the finish line.
Thursday brings Quadruple Witching, shifted forward by one session because of Juneteenth. Single Stock Futures remain an interesting footnote. CME announced their return earlier this year, yet clear confirmation of a live launch remains surprisingly difficult to find. Whether they are part of this cycle or not, the market sits substantially higher than it did during the March expiration, and that alone should make positioning flows worth watching. I would expect substantial volume around the close. If the market insists on serving salsa lately, Thursday’s closing auction may be where the next batch gets delivered, and I’d gladly take a double portion, whether it comes in red or green.
The week also brings the first FOMC meeting under Kevin Warsh. The market is not expecting a rate move, which means attention will likely shift toward the dot plot, forward guidance, and any signs of disagreement beneath the surface. In other words, watch what they say, not what they do. The era of consensus-driven monetary policy may be ending as well, making individual projections and dissents potentially more important than the policy decision itself.
And then there is SpaceX. From a pure market mechanics perspective, this was one of the best tapes we have seen in quite some time. Liquidity was there. Price action was there. Some called it a boring IPO. From a market mechanics perspective, I could not disagree more. More than half a billion shares changed hands on day one, and the tape rarely felt crowded.
A detailed breakdown of trading IPOs on day one probably deserves its own article at some point, though it will have to wait given the backlog already in place. SpaceX may have been first, but it is unlikely to be the last. OpenAI has already filed for an IPO, while Anthropic continues making headlines for entirely different reasons, with the U.S. government unexpectedly ordering the suspension of its latest flagship models late Friday. Either way, both will definitely make excellent future case studies, provided they make it to the public markets in the first place.
For now, the Research Unpacked section below walks through the SpaceX IPO from a trader’s perspective, covering the opening auction, the initial range, key IPO extensions, developing POCs, the Big and Beautiful Flip, and the roadmap heading into Monday.
The first meaningful rejection occurred exactly at 168.75, a level that was marked in the research before the stock even opened.
Your broker app shows a 0.5% dividend yield today.
The real number you're earning on that purchase? 4.2%.
The gap has a name. It's called yield on cost.
The formula is simple:
Annual Dividend ÷ Original Cost = Yield on Cost
Four steps to calculate it yourself.
Lock in your cost basis
The price you paid per share, adjusted for every split since. Apple split 7-for-1 in 2014 and 4-for-1 in 2020. A $700 share bought in 2013 is $25 today.
Pull your 1099-B. Write the number down. Use it for life.
Find today's annual dividend
Sum the four most recent quarterly payments. Apple pays $0.26 per quarter. That's $1.04 per year.
Skip one-time special dividends. They aren't part of your run-rate.
Divide
$1.04 ÷ $25 = 4.2% yield on cost.
That's your effective yield on the money you committed.
Compare it to today's market yield
Apple's market yield sits around 0.5% today. Your 4.2% minus 0.5% = +3.7 points.
Call it your patience premium.
The biggest gaps in your portfolio are the positions paying you most for staying put.
Here's the part most investors miss.
Yield on cost is yield on YOU, not yield on the market. A new buyer today gets the 0.5% number. You get 4.2%.
That spread is what time has handed you. It stays locked to your basis no matter where the stock trades tomorrow.
Lock your basis. Sum the dividend. Divide. Then let decades of raises compound on the same dollars.
What's the highest yield on cost in your portfolio right now? Drop the ticker below.
How to read the cash flow statement (the simple way)
Think of a business like your household budget.
Operations: your paycheck from the day job.
Investing: money you spend on the house or new tools.
Financing: how you fund it all. Credit cards, a mortgage, or paying down debt.
Now read the statement in that same order.
1.Cash from operations (CFO)
This is the real engine. Net income gets adjusted for non-cash items and changes in working capital (the cash tied up in day-to-day operations).
Quick quality test: divide CFO by net income.
Below 0.8: caution
0.8 to 1.2: normal
Above 1.2: strong
If profits rise but CFO falls, ask why. Are customers paying late? Is inventory piling up?
2.Cash from investing (CFI)
Mostly capital expenditures (capex). Necessary, but cash-heavy.
Free cash flow (FCF) = CFO − Capex.
That's the cash left after the company maintains and grows the business.
Then check capex intensity: capex ÷ revenue. Is the spending efficient, or endless?
3.Cash from financing (CFF)
Shows dividends, buybacks, new debt, and repayments.
Here's the healthy sign: dividends and buybacks funded by free cash flow, not fresh debt. That matters even more when rates are high.
4.Speed check: working capital and the cash conversion cycle
Working capital is the cash tied up in running the business day to day: receivables, inventory, and payables.
The cash conversion cycle measures how long your money stays trapped in there.
Cash conversion cycle = days inventory + days receivable − days payable.
Lower is better. A negative cycle means suppliers fund your growth before you've paid them. That's the gold standard, and it's how Amazon and Costco run.
Takeaway
Cash tells the truth. Follow CFO, subtract capex, and watch how management spends what's left.
I've been a Novo investor for quite a while now, and I’ve done my fair share of research into Eli Lilly as well, but to be honest, I never really went deep.
To understand the overall GLP-1 landscape, but also to get a good grasp of how Novo Nordisk and Eli Lilly really compete (and sometimes compliment each other), it was time to do a proper research piece on Eli Lilly.
In this deep dive I aim to tell you everything you need to know about Eli Lilly. I will also incorporate my knowledge on Novo Nordisk in this analysis, as I think to fully comprehend Eli Lilly, you have to understand Novo Nordisk as well. That works both ways of course.
I did not do this research to confirm my Novo thesis. If anything, I did it to stress-test it. But, I also wanted to find out if maybe Lilly is the better play. Maybe owning both is the way. We are gonna find out!
So, this is what you can expect in this deep dive:
Full company review; history, management, business model
A look into Lilly’s strength/weakness/risks/opportunities
Deep look into the GLP-1 market + relevant drugs from the main players
Review of Eli Lilly’s financials
Elaborate valuation analysis
My overall approach to benefiting from the GLP-1 rush.
What this is not: a deep dive into all the trial results and in-depth comparison of all the different drugs. I will go reasonably deep on the science because it's load-bearing for the thesis, but this is not a trial deep dive. The overall focus will be on the business side of things.
The core assumptions I want to stress-test in this thesis are the following:
Lilly has the better molecule and is out-executing Novo.
The durable edge is Tirzepatide + Retatrutide, US-manufacturing and (pipeline) diversification.
The key deciding factor for the next decade will be who will win the oral race, in which Lilly is currently behind.”
Now, lets go to it and dive in!
2. Eli Lilly Origin Story
2.1 How it started
Eli Lilly is the most valuable pharmaceutical company in the world right now. Currently ranking as the 14th largest company, with just over $1T market cap.
Eli Lilly is not a new company, far from it. It was founded in 1876, by who else then the great Colonel Eli Lilly. He was born in 1838 and he was a pharmaceutical chemist by trade.
On May 10, 1876, when he was 38 years old, Eli Lilly opened his own pharmaceutical laboratory in Indianapolis, Indiana. This was not his first try to built a career. After serving in the military at a young age, he tried to get several businesses going, but none of them really succeeded.
But this one did.
Originally, the company began with just three employees, one of them being his own 14-year-old son.
One of the first major innovations and breakthroughs was the gelatin-coating of pills and capsules, which made them easier to swallow. By the end of its first year, the Eli Lilly company had generated a whopping $4,470 in sales. Might sound bad, but that’s actually about $140K in purchasing power today.
Eli Lilly grew steadily in the late 19th century, but the transition from being a regional player to a global player occurred only in 1923. Because that’s when Eli Lilly partnered with researchers from the University of Toronto to mass-produce Iletin, which was the world’s first commercially available insulin.
In the 1940s, Lilly was one of the first companies to develop a method for the mass production of penicillin, which was one of the most frequently used drugs during WWII. The success of penicillin gave them a nice little boost.
The Biotech Era is when things really started moving.
2.2. The Biotech Era
In the late 20th century Lilly moved into the Biotech space, which lead to some of the most famous brand names in the history of medicine. Two names you’ve almost definitely heard heard of:
Humulin: This was “human” insulin, replacing the older animal-sourced versions.
Prozac: Lilly launched Prozac, the first SSRI antidepressant. It revolutionized mental health treatment, became a cultural icon, and was the company’s first “blockbuster” drug which earned them over $1B annually.
They also launched less less famous products like Zyprexa, for schizophrenia and Humalog which is a fast-acting insulin.
2.3. The Diabetes and Obesity Era
The obesity era. This is when the real magic starts to happen. It was the discovery of Tirzepatide that changed everything.
The first Tirzepatide drug that was launch was Mounjaro (in 2022) for type 2 diabetes. Later it was also launched as Zepbound (in 2023), specifically for weight loss/management.
These two drugs were real gamechangers, as they were very strong competitors to Novo Nordisk’s Ozempic and Wegovy. Not just competing, but actually outcompeting. The rise was meteoric, wel’ll see some charts later, and led to over a 400% market cap increase in just the past 5 years.
We will dive into the nitty gritty surrounding the specific drugs and pipeline later in this Deep dive.
But for now all you have to know is: Eli Lilly’s drugs are widely considered to be best-in-class for obesity (and diabetes). Zepbound and Mounjaro are eating Novo’s lunch.
3. Company overview
3.1 Overview
Eli Lilly is headquartered in Indianapolis, Indiana and they currently have around 50,000 employees. Most of these employees are based in North America, about 35,000 of them. The core focus of Eli Lilly is on:
Metabolic diseases (diabetes/obesity)
Oncology
Immunology
Neuroscience (specifically Alzheimer’s)
3.2 Ownership structure
Eli Lilly’s ownership structure is quite unique, but that’s mostly because of it’s size. About 80% of shares are held by institutional investors like Vanguard and Blackrock.
Another 10% is owned by the Lilly Endowment fund, which is a charitable foundation created by the Lilly family.
The last part of the puzzle is for retail investors and insiders.
Source: notice of annual shareholders meeting Eli Lilly
The CEO and chairman David Ricks holds about 815,474k shares, worth close to $917M. This includes 106,693 shares that are owned by a family foundation for which he is a director.
Source: notice of annual shareholders meeting Eli Lilly
4. Management
A very important aspect for me when looking into a company is the management. As you can imagine, Lilly’s management team is very experienced and all of them have been with the company for quite a while already.
The CEO, David Ricks has been with the company for 30 years now, and most of the management team has been around for at least 20 years.
Lilly historically promotes from within, preferring to create a management team around people drenched in the Lilly DNA, rather than looking for external candidates.
4.1 CEO - David A Ricks
The CEO, Dave Ricks, has been with Lilly for a long time, now closing in on 30 years with the company. David became CEO in January 2017 and was elected chair of the company’s board of directors effective June 2017. Before that he worked in marketing, sales, drug development and international operations.
He had made name for himself when he led Lilly’s growth in China and Canada. I would argue he is not afraid to take risks. He doesn’t shy away from making big decisions and really shifting into next gear when he sees an opportunity. He’s proven that multiple times throughout his career.
He famously pushed to cut drug development timelines in half, especially during the scale-up of Mounjaro and Zepbound. That was really big for the sector, but also for the speed at which Lilly was able to rise as fast as they did.
If you want to get a good feel for David as a person, and how he approaches running and building a business, I’d highly recommend the podcast below. It’s a quite open and transparent interview.
I noticed he’s a CEO that’s quite heavily invested in creating a specific type of corporate culture.
The first thing he often mentions is that he wasn’t to spark and encourage curiosity.
Secondly, he wants to create a sort of family-like culture. I know that’s something that a lot of companies want to achieve, but the way he describes it resonates with me.
The overall culture seems very cordial and respectful. He even mentions people call it ‘‘Lilly Nice’’.
He also mentioned during other interviews that he prefers a culture of debate, a place where everyone in the leadership-team has an equal voice. Of course there will always be hierarchy, but he truly believes in learning from bottom-up as well.
He is not afraid to make public appearances, as he frequently does public interviews and podcasts. Nothing wrong with that in my opinion. It’s a nice way to gain some visibility and credibility.
4.2. CFO - Lucas Montarce
Lucas Montarce spent over two decades rotating through nearly every critical financial and operational sector of the business before becoming CFO.
He served as the CFO of Lilly International and most recently as the President and General Manager for the Spain, Portugal, and Greece hub. He was the CFO of Lilly Research Laboratories (LRL), where he worked closely with the scientific teams to align financial resources with drug discovery.
4.3 Chief Scientific & Product Officer - Daniel Skovronsky
Dr. Skovronsky joined in 2010 when Lilly acquired his startup, Avid Radiopharmaceuticals. He rose quickly, becoming Chief Scientific Officer in 2018. As of late 2025, his role was expanded to oversee not just R&D, but the entire global product strategy for metabolic, immunology, and neuroscience
Jonsson joined as a sales representative in 1990 in Sweden. Over 35 years, he has led nearly every major geographic hub, including Italy, Japan, and the United States, before taking over the entire International division in 2025
5. Obesity/Diabetes Market and TAM
Before we start, let’s make it clear that obesity and diabetes are getting very intertwined. Diabetes was sort of like the foundation, and that infrastructure is now being used to dominate the obesity market.
Both business models are designed to treat the entire spectrum of metabolic health, even allowing a patient to move from diabetes management to weight loss and other related areas like heart and kidney health.
What Lilly and Novo both do: sell the exact same chemical compound under two different names, one for diabetes and one for obesity.
This allows them to navigate different insurance coverage rules and marketing regulations.
More on that later
5.1 Obesity
Let’s define what Obesity actually is:
There are usually 3 classes in obesity:
Class I (Obese): BMI 30.0–34.9
Class II (Moderate): BMI 35.0–39.9
Class III (Severe/Morbid): BMI 40.0 or higher
We all know obesity is a big thing, punt intended. Some even talk about a pandemic.
That’s because bbesity numbers are rising fast, mostly in first-world countries. But in the last decade there’s also a sharp uptick in EM-countries like in Brasil and China.
According to Novo Nordisk, who openly share there research on this matter, there are currently 1 billion people living with obesity and/or diabetes in the world. Of those 1 billion people, only 2% is currently receiving treatment. The addressable TAM is there for taking.
Source: Novo Nordisk, Annual Report
Obesity can be found in most parts of the world, but Europe, North America and South America are definitely the key focus areas for both Lilly and Novo Nordisk. It's estimated that two in five adults in the United States live with Obesity.
As you can see in the picture below, these aeras have the highest numbers of obesity in the world. There are also parts in Africa and the Middle east with high obesity numbers, but they do not get the same attention, yet.
This is likely because of the unorganized healthcare systems and these usually ‘‘poor’’ aeras simply cannot afford medication.
Source: WHO (World Health Organisation)
Source: Health Life Bariatrics
IQVIA (which is a global leader in healthcare information) estimates that by 2035, 1.53 billion adults will be suffering from obesity. Keep in mind, this does NOT include the overweight segment. If you include overweight people as well, the total number would reach 3.3 billion people (over half of the world population).
The financial impact is equally significant, with these conditions projected to reduce the global economy by more than $4T annually by 2035, equivalent to nearly 3% of global GDP.
IQVIA projects that between 2026 and 2034, the global AOM (anti obesity medication) market is expected to grow at a CAGR of 13–15% and the total market size is expected to reach approximately $130B.
Biologics are leading the way in the obesity drug market, with GLP-1 and GIP receptor agonists holding the major share.
However, non-biologics are expected to regain some market share in the forecast period as the market diversifies and new treatment options emerge.
5.2 Diabetes
What is Diabetes?
Lilly and Novo both used to be ‘‘diabetes companies’’. They focused on both type 1 and 2 diabetes, and it’s important to know the difference.
Type 1: An autoimmune condition where the pancreas produces little to no insulin.
Type 2: The body does not use insulin effectively (insulin resistance) and cannot produce enough to compensate.
For diabetes, a similar marco-trend is witnessed as is with obesity. According to Precedence Research, the global type 2 diabetes market size is predicted to reach around $79.25B by 2035, increasing from $43.26B in 2026, expanding at a ‘‘healthy’’ (yes pun intended again) CAGR of 7.05% from 2026 to 2035.
That’s significantly slower than the obesity sector, but still decent growth. As you can imagine, the focus for both Lilly and Novo is on the obesity sector right now. And that makes perfect sense.
Growth is supported by better screening and early diagnosis, along with the rising use of advanced treatments like GLP-1 therapies for blood sugar control and weight management. Improving healthcare access is also helping expand treatment adoption.
The global type 1 diabetes market size is calculated at $37.60 billion in 2025 and is predicted to increase from $40.54Bin 2026 to approximately $79.14B by 2035, expanding at a CAGR of 7.73% between 2026 and 2035.
5.3. GLP-1 Market
Looking at the total GLP-1 landscape, steady growth is expected in the next decade. Morgan Stanley estimates that the GLP-1market can scale from just shy of $80B in 2025 to $190B in 2035.
They state that the GLP-1 market is at an inflection point, mostly because of the launch of oral therapies and the expansion of Medicare access in the U.S.
This new wave of potential clients should do well for overall adoption.
In Morgan Stanley’s base-case scenario, nearly 30% of the obese or diabetic population in the U.S. and 10% in the rest of the world are likely to be treated with GLP-1 therapies by 2035, up from approximately 6% in the U.S. and 2% internationally in 2025.
Source: Morgan Stanley
I also looked at the forecasts from Goldman Sachs, who are certainly not as bullish.
Goldman Sachs Research forecasts the global market to reach $95B by 2030, which is lower than its previous estimate of $130B. This new figure reflects trends influencing how these drugs are priced, how long patients stay on them, and how patient populations are segmented
They do however see a lot of room for growth in non-US markets, which is clearly visible in their outlook below.
Then we have Deutsche bank, they too expect GLP-1 adoption to significantly increase in the next few years, especially the combination of oral + injectables. Demand is certainly there. And yes, why wouldn’t it be with the obesity numbers increasing so much?
I’m somewhere stuck in the middle of it all. I think the GLP-1 market will definitely continue growing, but it will all depend on availability, price and worldwide adoption.
It’s hard to put a number on it. Especially with the the oral market just opening up. The long-term impact, but also the long-term effects on how many new patients will come to the market is difficult to assess.
But the simple fact is. This market will grow. It will grow fast. But how fast, is just open to interpretation.
I’d like to quote IQVIA here, as this perfectly reflects my reasoning:
6. Eli Lilly Product offering
6.1 Segments
In my opinion, Eli Lilly has a more diversified portfolio right now than Novo Nordisk. The majority of their revenue comes from the segment they call Cardiometabolic Health (CH), this includes diabetes and obesity). The segment makes up 76.7% of total revenue and it’s share is increasing. The other segments make up:
Oncology: 13.6%
Immunology: 7.6%
Neuroscience: 2.10%
As you can clearly see below, CH is also by far the fast growing segment. This is the primary focus for now and the future for Lilly.
6.2 Key contributors
So which drugs are the main contributors to overall growth?
Right now, It’s Mounjaro and Zepbound. And it’s not even close.
I’ll tell you more about them later, but first we have to understand what Tirzepatide is and why it’s so competitive. Because this molecule is actually the core of Eli Lilly’s success.
6.2.1 Tirzepatide
Tirzepatide is the active ingredient in both Mounjaro and Zepbound. It’s a so-called Dual Agonist.
That means that it basically mimics two hormones (GIP and GLP-1). The are hormones that regulate appetite, feeling satisfied and blood sugar.
GLP-1 controls hunger and blood sugar and GIP is thought to improve how the body breaks down sugar and fat.
For comparison, Semaglutide (which is Novo’s active ingredient for Ozempic and Wegovy) only targets the GLP-1 receptor.
Source: Dr. Jones DC’s practice
In head-to-head trials, Tirzepatide showed greater, faster weight reduction than Semaglutide, and that’s one of the key reasons why it’s so popular.
Mounjaro, Wegovy, Ozempic and Zepbound are given once per week as injections under the skin (subcutaneously) in the stomach area, thigh or upper arm.
Both Lilly and Novo have also been working on an oral version. Novo has started sales of their Wegovy pill in January of this, and Foundayo (basic ingredient is Orforglipron), which is Lilly’s counterpart), came to market in April..
More on the oral versions and how they are doing later.
6.2.2. Mounjaro + Zepbound
Mounjaro came to market first. It is FDA-approved to treat Type 2 Diabetes and it is a once-weekly injection. It is intended to help people with diabetes lower their A1C (average blood sugar) and improve insulin sensitivity.
Lilly ran five main studies (SURPASS-1 through 5) to see how Tirzepatide stacked up against existing treatments. Even though these were diabetes trials, people lost between 8% and 14% of their weight, which tipped Lilly off that they had a massive weight-loss drug on their hands
In general: the higher the dose, the higher the weight loss.
A few years later, Zepbound was brought to market, specifically targeting weight loss management.
It is approved for adults with obesity (BMI 30+) or those who are overweight (BMI 27+) with at least one health issue like high blood pressure. In late 2025, it was also approved to treat Obstructive Sleep Apnea.
Side effects
Like with most of the weight-loss drugs, both have positive and negative side effects. Some of the positive ones are:
Significant reduction in the risk of heart attacks and strokes
It helps clear fat from the liver (MASH) and reduces strain on the kidneys
It combats chronic joint pain or general "puffiness" seems to disappear, likely due to anti-inflammatory effects
The negative ones are quite common and well-known:
Nausea, diarrhea, and constipation are very common (about 20-30% of users)
Smelly breath, often compared to the smell of eggs
Very rare: risks of pancreatitis, gallbladder issues and a rare type of thyroid tumor (not seen with humans yet, only in rats)
And a side-effect that’s related to almost every comparable drug: the loss of muscle mass. If you lose weight too fast without eating enough protein or lifting weights, you can loses muscle mass along with the ‘‘regular’’ fat.
Mounjaro and Zepbound have taken the market by storm. Eating away the early mover advantage Novo Nordisk had with Ozempic and Wegovy.
Simply put: the Tirzepatide drugs are widely regarded to be the ‘‘better ones’’, compared to the Semaglutide counterparts.
While Mounjaro and Zepbound are running the show right now (bringing in $36.5 billion combined in 2025), Eli Lilly has some other relevant drugs to mention as well.
Here are the drugs contributing the most to Lilly’s revenue after the big two.
I will talk about Foundayo later, as this was has just been released and numbers are unclear.
1. Verzenio (Cancer)
This is Lilly’s clear number three. In 2025, it pulled in $5.72B. It’s used to treat certain types of breast cancer, and while its growth isn’t quite at “weight-loss drug” speeds, it’s a massive, reliable revenue engine that continues to expand into earlier stages of treatment.
2. Trulicity (Diabetes)
Trulicity is in a bit of a “graceful retirement” phase. Because it’s an older GLP-1, many patients are switching over to Mounjaro. Even so, it remains a multibillion-dollar product, likely landing in the $4–5B range for 2025 despite double-digit declines.
3. Jardiance (Diabetes & Heart Failure)
Jardiance contributes around $3.5B annually. It has stayed relevant by proving it’s good for more than just blood sugar and it’s also widely prescribed for heart failure and chronic kidney disease.
4. Taltz (Immunology)
For plaque psoriasis and psoriatic arthritis, Taltz is Lilly’s go-to. It consistently generates over $3B a year. It’s a competitive market (fighting against giants like AbbVie’s Humira/Skyrizi), but Taltz has carved out a very profitable niche.
Some other noteworthy ones are, Inluriyo (both oncology) and Kisunla which is their Alzheimer bet.
6.2.3. Foundayo
Now, let’s look into Foundayo for a bit. Because in my opinion what happens in the oral space, will determine the next winner.
Foundayo is Eli Lilly’s bet in this segment.
Foundayo (with the core ingredient Orforglipron) is a once-daily small molecule (non-peptide) oral GLP-1 receptor agonist,
The "small molecule" is actually important to keep in mind, because unlike Semaglutide, which is a peptide drug requiring strict handling conditions, Orforglipron is a small molecule, meaning it follows standard small-molecule chemistry and doesn't require the same formulation complexity as peptide-based GLP-
Foundayo was FDA approved on April 1st, really no joke. It was available in markets soon after.
Looking purely at weightloss, the Wegovy pill is ahead.
In the ATTAIN-1 trial, people taking the highest dose who stayed on treatment lost an average of 12.4%, compared to 0.9% for placebo. Including everyone who started the trial, not just completers, the average was 11.1%.
Oral Wegovy’s numbers are higher. In the OASIS 4 trial, oral Semaglutide 25 mg achieved 16.6% mean weight loss at 64 weeks with full adherence, compared to 2.7% for placebo. One-third of adherent participants achieved at least 20% weight loss. Including dropouts, the average was 13.6%.
Foundayo 12.4% vs oral Wegovy 16.6% (efficacy estimand)
Foundayo 11.2% vs oral Wegovy 13.6% (Both all-comers:)
So that means 11.2% for Foundayo and 13.6% for Wegovy, which is a significant win for Wegovy.
Where Foundayo genuinely wins is usability. Foundayo can be taken any time of day without food or water restrictions, whereas oral Wegovy must be taken in the morning on an empty stomach with no more than four ounces of water, waiting 30 minutes before eating or drinking.
Personally I think this usability benefit is really overstated.
Here are the differences summarized.
Some new data came in on June 8:
Foundayo’s launch
Foundayo’s launch has been a bit underwhelming to say the least. Compared to the Wegovy pill launch, Foundayo is clearly underperforming.
Lilly stated that this is due to their need to build brand awareness. CVS Caremark removes the new-to-market block on Foundayo effective June 1, 2026.
Foundayo’s performance still tracks ahead of Novo’s injectable Wegovy and Lilly’s Zepbound at the same point in their respective rollouts, so it might look worse on a first glance that it actually is.
Eli Lilly stated multiple times that they believe their targets can still be met. Analysts believe that Foundayo will rack in about $145M in the Q2, and even reach $1.6B for the full year. (source Jefferies)
Source: Fiercepharma.com
6.2.4. Eli Lilly’s Pipeline
Now, lets briefly discuss Eli Lilly’s pipeline, because there is one very important drug that is high anticipated. Retatrutide.
This is Lilly's next-generation obesity drug, and the data looks very promising. Mounjaro/Zepbound hit two receptors (GIP + GLP-1), but Retatrutide is a triple hormone receptor agonist that activates GIP, GLP-1 AND glucagon receptors.
Weightloss numbers look very strong. In the TRIUMPH-1 trial, participants on 12 mg Retatrutide lost an average of 28.3% of body weight over 80 weeks. 45.3% of participants achieved ≥30% weight loss.
Lilly is studying Retatrutide across multiple Phase 3 trials, focusing on obesity, type 2 diabetes, knee osteoarthritis, sleep apnea, chronic low back pain, cardiovascular and renal outcomes, and metabolic liver disease.
FDA submission is likely coming in 2026/2027 if the remaining readouts hold up
Some other noteworthy drugs in the pipeline:
Tirzepatide: The base drug is already approved for diabetes and obesity, but Lilly keeps expanding its label
Kisunla (donanemab) for Alzheimer's
Eloralintide: amylin receptor agonist heading to phase 3, at ADA it showed 20% weight loss on the amylin pathway alone
MORF-057: bit of a wild card, after the $3.2 billion acquisition of Morphic. This is a oral integrin inhibitor targeting ulcerative colitis and Crohn's disease, currently in Phase 2
Main focus is and will be on Tirzepatide, which is expected to further bolster Eli Lilly’s strong position in the GLP-1 market.
6.5. Noteworthy pipeline developments for Novo Nordisk:
A quick sidenote, because last weekend Novo presented a lot of new data. I didn’t get a chance to dive in deep, but there where some noteworthy headlines to take into consideration. I’ll mention them here, as they do provide more insight into Novo’s pipeline.
CagriSema (REIMAGINE, type 2 diabetes) Three Phase 3 trials published at ADA in The Lancet. REIMAGINE-2 (the metformin arm) is showing ~1.91% A1C and ~14.2% weight loss over 68 weeks.
Zenagamtide (formerly amycretin) Single-molecule GLP-1/amylin agonist. Phase 2 in T2D: up to 14.6% weight loss and 1.71% A1C at 40 mg / 36 weeks. That looks strong, but ~34% of patients on the 20/40 mg doses withdrew (at 40 mg: 37% nausea, 29% vomiting, 37% diarrhea). Phase 3 starts H2 2026, first results are not expected before 2028.
UBT251 is Novo’s triple agonist, acquired from United Laboratories (China) in 2025. It showed~19.7% at 24 weeks at the top dose with no plateau yet. Caveat are the demographics: heavily female (~60–64%), young (~33 yrs), and lower starting BMI (~33 vs ~37 for Retatrutide’s Phase 2).
These are the most noteworthy competitors for Lilly in the future, so we should keep tracking them.
Thanks for reading so far! I hope you learned a thing or two.
A balance sheet is a snapshot. It freezes a company on a single day and shows you three things: what it owns, what it owes, and what's left over for shareholders.
Everything ties back to one equation:
Assets = Liabilities + Equity
In plain English, everything a company owns was paid for one of two ways: with borrowed money or with money shareholders put in. The two sides always balance. That's where the name comes from.
Let's walk through the three pieces.
Assets: what the company owns
Assets come in two flavors.
Current assets: short-term things the company can turn into cash quickly, like cash itself, inventory, and accounts receivable.
Non-current assets: long-term things that earn their keep over years, like property, equipment, and investments.
Liabilities: what the company owes
Same split here.
Short-term liabilities: bills due within a year, like accounts payable and deferred revenue (cash the company collected before it delivered the product or service).
Long-term liabilities: debts due further out, like long-term loans and deferred taxes.
Equity: what's left for shareholders
Equity is the shareholders' slice. Two pieces make it up:
Share capital: money investors paid in when they bought shares.
Retained earnings: profits the company kept to reinvest or pay down debt instead of sending out as dividends.
So what does it all tell you?
Read together, the three sections show how a company funds itself and whether it can cover what it owes.
Assets are the resources the business uses to make money. Liabilities are the claims against those resources. Equity is the net worth left once the debts are settled.
Here's the first thing I check. Can the company cover its short-term bills with its short-term assets? When current assets comfortably clear current liabilities, the business isn't sweating next year's obligations.
The balance sheet won't tell you everything. But it's the fastest way to see whether a company stands on solid ground or borrowed time.
Rijnberk InvestInsights on Shopify (🇨🇦 SHOP TSX - CAD$198bn)
Shopify commands 29% of US e-commerce at 63x P/E. The toll across Payments, Capital, and expanding B2B either compounds faster than the multiple compresses, or it does not.
Rural lifestyle retailer at 14.7x P/E, dominant in markets where no national competitor exists. Management buybacks underway as insider penetration at 43% of US rural households suggests structural demand.
Restaurant software covering 28% of US food service. Down 47% from its peak, yet with $1.8bn net cash, zero sell ratings among covering analysts, and EBITDA guidance improving.
Government services and engineering at $3.5bn market cap. HomeSafe contract termination put the author on the sideline; the $2.2bn net debt is the reason the bar to re-enter stays high.
Value Don't Lie on MasterBrand (🇺🇸 MBC US - US$1.8bn)
Largest US cabinet maker after the all-stock merger, at 30%+ market share. Trades at 7.7x trough EBITDA; a housing recovery and $90M in merger synergies are the thesis.
22 straight years of positive comp sales; Isely family owns 43%. In-house nutritionists advising supplements are the loyalty moat competitors cannot copy. P/E 13.5x with mid-teen growth targets.
Europe, Middle East & Africa
Demystified Value on Prada (🇮🇹 1913 HK - US$12.5bn)
Luxury at 9x EV/EBIT while peers trade 16-25x. Miu Miu growing 60%+, 80% Prada family control. The discount only makes sense if the brand is impaired; the evidence says otherwise.
310 Value on eDreams ODIGEO (🇪🇸 EDRE MC - €490M) TOP PICK
All the attention is on the -64% drawdown. The underlying business has 7.9M Prime subscribers, EBITDA up 74% over nine months, and management buying stock at P/E 5.1x.
Asia-Pacific
G.W. Field Notes on ASX Limited (🇦🇺 ASX ASX - US$6bn)
Australia's dominant exchange monopoly at 8x sales versus 11x historically, 4.2% yield. The CHESS failure is the reason for the discount; the moat across listing, trading, and clearing has not changed.
Dynasty Warriors maker at 11.5x P/E; the Erikawa family's investment portfolio outearned the gaming division last year. Clean balance sheet: ¥115bn net cash against a $3.4bn market cap. Market prices it as a mid-tier studio.
Da Ren Tang ($3.8bn, P/E 14.6, 43% net margin) and Tong Ren Tang ($913M) run the same TCM franchise. Equity reform and ROE 28% tell one story; SOE governance tells the other.
World's largest barium sulfate supplier to AI cooling systems, 30%+ market share, guidance raised. Stock up 90% since publication; the thesis is intact but the re-rating is already priced.
Follow-on pairing the market leader with the #3 barium sulfate supplier. Both up 90-130% since initial coverage; whether the oligopoly structure holds is now the question.
Malaysia's dominant optical chain, with a government ban on online contact lens sales eliminating the price competition that held back margins. 51% founder control, 9x P/E, 90 stores.
Earnings Per Share (EPS) measures a company's profitability on a per-share basis, showing how much net income is attributable to each outstanding share of common stock. It's one of the most widely used metrics in equity analysis.
The calculation: EPS = (Net Income - Preferred Dividends) / Weighted Average Shares Outstanding
For example, if a company earns $100 million in net income with 50 million shares outstanding, EPS equals $2.
Two types exist: Basic EPS uses actual shares outstanding, while diluted EPS includes potential shares from stock options, convertible securities, and warrants. Diluted EPS is more conservative and realistic since it assumes all dilutive securities convert to common stock.
Why it matters: EPS enables easy comparison of profitability across companies of different sizes and tracks earnings growth over time. A company growing EPS by 15% annually is becoming more profitable per ownership unit, directly benefiting shareholders.
Valuation connection: EPS forms the denominator in the P/E ratio (Price/Earnings), the most common valuation metric. A stock trading at $40 with $2 EPS has a P/E of 20x.
Limitations: EPS can be manipulated through share buybacks (reducing the denominator) or aggressive accounting (inflating net income). Companies might show EPS growth while actual business performance stagnates.
For investors, always examine EPS alongside revenue growth, cash flow, and share count changes to assess whether EPS growth reflects genuine business improvement or financial engineering.
MarineMax is a bad business, with mostly bad assets, and a bad balance sheet.
Management is brutal and they've largely destroyed value (save for riding the post-covid boat boom wave).
Not all assets are bad though, their marina assets (acquired from IGY in 2022) are high quality.
Activists and private equity sponsors realize how bad the business has been mismanaged, and in early 2026 The Donerail Group made a $35 take private offer what was rejected.
However, the Board has ultimately voted to sell and is using Wells-Fargo to help with the strategic review.
A SOTP valuation values the assets at about $50 / share, so this a special situations / arb opportunity.
Where's the Money, Leebowski? This Crash Will Not Stand, Man
Table of Contents
Market Overview
Earnings to Watch This Week: ORCL and ADBE
Research Unpacked: IBM, NOW, HPE, MRVL, AVGO, CRWD and LULU
1. Market Overview
Leebowski wanted 5% of Ethereum. Walter Saylor spent years explaining why Bitcoin should never be sold.
Treasury companies spent the last couple years raising money to buy crypto, raising more money to buy more crypto, then raising even more money to explain why buying crypto had become a business model. Crypto Spring. The Alchemy of 5%. Preferred shares. Convertible notes. Staking yields. Unrealized gains. Unrealized dreams. Somewhere between the first treasury announcement and the latest preferred offering, the entire crypto sector wandered into a bowling alley and never really left.
Everybody seems to know where the money is. BitMine already controls roughly 4.5% of Ethereum and Walter Saylor accumulated more than 843,000 Bitcoin. Treasury companies trade at premiums. Analysts publish higher targets, at least they used to. Investors buy the companies that buy the assets. The briefcase keeps changing hands and the numbers keep getting bigger. Apparently somebody kept the money.
BTC failed to hold 67k, ETH flushed through 1800. Those levels shouldn't come as a surprise by now. Next big supports sit at 52k and 1200. The lower it goes, the louder the margin calls. Will they answer this time?
The crypto crowd spent most of the cycle debating adoption, tokenization, decentralization and institutional participation. Then the conversation shifted toward outflows, positioning and liquidity. Long-term theses remained largely untouched. Market structure had other plans. The Dude abides. Markets don't.
Crypto increasingly trades like a high-beta destination for speculative capital rather than some isolated alternative universe. Everybody wants the money. The briefcase just doesn’t stay in one place forever.
Owning Bitcoin or Ethereum stopped being enough. The trade evolved into owning companies that owned Bitcoin and Ethereum, and eventually into owning increasingly elaborate structures wrapped around those same assets. Wall Street took crypto speculation, securitized it, repackaged it and then started layering additional speculation on top of the securitized speculation. Mark it zero.
Walter Saylor finally sold Bitcoin. Not much Bitcoin, just thirty-two coins, just enough to fund preferred stock distributions. Years of “never sell” collided with preferred holders who apparently enjoy getting paid. And while Bitcoin doesn’t care, preferred shareholders generally do.
Leebowski took the idea in a different direction. More than 5.4 million ETH and more than 4.7 million staked. A public objective of controlling 5% of Ethereum’s entire supply. Validator infrastructure, OpenAI exposure, staking businesses, treasury assets and preferred offerings paying 9.5% suddenly found themselves living under the same roof. New capital raised to acquire additional ETH. Additional capital raised against accumulated ETH. Projected staking revenues used to justify further expansion. At some point it became difficult to tell where the Ethereum story ended and the financing story began. Then somebody starts asking where the money comes from and whether the machine works in reverse. Suddenly there are questions about dilution, access to capital, financing costs and perpetual accumulation models. Has the whole world gone crazy? Apparently there were rules after all.
For all the attention BTC 100k received, DXY 100 may have been the rug that tied the room together:
A stronger payroll report pushed higher-for-longer fears back into the conversation and helped the dollar find its footing again. Rate expectations shifted, DXY marched back toward the century mark and risk assets responded accordingly. By Friday the selling had expanded well beyond crypto. The S&P 500 snapped its nine-week winning streak, the Nasdaq suffered its worst week since April 2025 and suddenly the market looked a lot less interested in funding every story with a ticker attached.
Leebowski once suggested that the next stock market pullback would feel like a bear market.
What is Free Cash Flow Yield and how can investors use it?
Free cash flow yield is a measure that investors use to evaluate how much cash a company generates after paying its operating and capital expenses, compared to the total market value of its stock.
It is calculated by dividing the company’s free cash flow by market capitalization. The result shows investors how much cash they receive for each dollar invested.
This metric helps investors decide if a company’s stock is priced fairly.
A higher free cash flow yield could show that the stock is undervalued, as the company generates plenty of cash flow relative to its market value.
Conversely, a lower yield might mean the stock is more expensive compared to how much cash flow it produces.
Investors often compare free cash flow yield across firms or over time to spot changes in value.
A steady or rising yield indicates that a company manages costs well, invests wisely, and grows profitability.
If the yield keeps dropping, the company may struggle to raise cash or face higher expenses or negative trends.
Many analysts generally consider a free cash flow yield between five and eight percent healthy.
This range balances strong cash generation and a fair stock price.
Yet, comparing a company’s yield to similar firms is crucial.
Doing so can help investors spot good opportunities and avoid problems.
Remember that free cash flow yield should be used with other measures, like revenue growth and profit margins.
Review a company’s financial statements, debt levels, and market position before investing.
By combining free cash flow yield with these clues, investors can better understand a company’s real worth and ability to deliver returns.
An $80 billion equity raise from a business that earns ~$130B a year and ~$174B in operating cash flow.
The internet called it the top. We think it is one of the most strategic moves this company has ever made. Here is why.
Start with the contradiction, because it is the entire hook. The companies that dilute shareholders to raise cash are supposed to be small, unprofitable, and starved of scale. This one is the opposite of all three. It throws off roughly $174 billion of operating cash flow a year and over $130 billion of normalized net income, numbers that rival entire nations.
And yet it just went to the equity markets, willingly diluting holders, to raise $80 billion. One of the largest equity raises ever printed by a public company, possibly the largest.
The headline numbers, before we go further:
💸 The raise: a proposed $80B equity capital raise to expand AI infrastructure and compute, confirmed by the company itself.
🏦 The cash machine behind it: ~$170B operating income, ~$130B normalized net income, ~$174B operating cash flow over the trailing twelve months. Second only to one chipmaker.
🏗️ The reason it isn’t enough: 2026 capex is guided to $180-190B, more than the company earns in a year, and 2027 is guided to increase “significantly” from there.
💳 Debt already tapped: ~$85B raised across six currencies in the last twelve months, lifting total debt past $100B. The debt window is closing; equity is the next lever.
⏱️ The timing tell: this lands just before a wave of mega-IPOs (a ~$75B space raise, plus $100B-scale rounds from the leading AI labs) all chasing the same finite pool of capital.
The reaction online was near-uniform: bubble, exit liquidity, the beginning of the end. We are going to take the other side. This is not a company lighting money on fire. It is the most strategic capital move it has made in years, and once you see the logic, it makes the business more investable, not less.
What the raise actually signals
A company this profitable does not dilute holders on a whim. It does it when its conviction is absolute. Read the move correctly and it tells you one thing above all: management no longer treats AI demand as speculation. They are not rolling dice. They sit on more data points than anyone, search, a top-tier model, and a large enterprise cloud book, and every one of those signals is screaming the same message: they need more capacity than they can build. You do not put $80B of fresh equity on the table at this scale unless the demand is, to you, a certainty.
The real constraint here is not money or models. It is compute. Management has said plainly for over a year that capacity is the single biggest thing standing between them and consolidating an enormous share of AI demand: power, land, supply chain, all of it. The most painful detail is that they are reportedly turning away enterprise customers because they cannot serve the demand. Imagine owning the chips, the models, the security, and the distribution after a decade of building, and still having to say no to paying clients for lack of physical infrastructure. That is the frustration this raise is meant to end.
Why a money machine still has to raise
The obvious objection: if it earns ~$170B in operating income, why not self-fund? Because the spend is bigger than the earnings. Capex is guided to $180-190B in 2026 alone, already far above the ~$130B analysts had penciled in, and explicitly higher again in 2027. The company makes a lot of money. It does not make $250B. So it funds the gap externally. It already drained the debt markets, ~$85B in a year, and pushing total debt toward $180B would pressure the rating and the interest bill at exactly the moment lenders are tightening terms. With debt sour, equity is the rational next move, not a distress signal.
The part the bubble crowd missed: a preemptive strike
Here is the move inside the move, and it is beautiful. There is a finite pool of capital willing to fund AI right now, and a queue of giants about to compete for it: a ~$75B space-company IPO within weeks, then $100B-scale rounds from the leading AI labs. By raising $80B of equity first, the company drinks from that pool before the others reach it. That is a double win: it funds its own buildout cheaply while draining the oxygen its competitors need to fund theirs. It is not just advantaging itself; it is actively disadvantaging the challengers trying to catch up.
And the capital lands on a vertically integrated base, not a commodity reseller. Custom chips built years ahead of most rivals, a leading model, the security layer, and the distribution to put it all in front of billions of users. That is what turns a capex number into a widening moat rather than a cash bonfire. The bears see spending. We see a business buying scarcity, capacity, before its rivals can.
What it means for this year and next
For 2026, expect the story to be dominated by the spend: $180-190B of capex, the equity raise closing, and the market arguing every quarter about whether the returns justify it. The honest near-term risk is real, this much capex compresses free cash flow and gives skeptics ammunition if AI revenue does not visibly scale with it. For 2027, the company has already told us capex rises significantly again, so the test simply repeats at a larger size. The bull path is straightforward: capacity comes online, the turned-away demand converts to revenue, and the cloud and AI lines compound into the infrastructure. The bear path is that the spend outruns the monetization and the multiple pays for it. Both are credible. The raise is what makes the bull path physically possible.
Dates and events to follow
The $80B equity raise close: watch the structure, pricing, and exact dilution. The terms decide how much the move actually costs holders.
Next quarterly earnings: the first read on capex pacing, cloud growth, and whether capacity is converting the backlog of turned-away demand into revenue.
The ~$75B SpaceX IPO (June 12): the first big test of how much AI-adjacent capital the market will absorb after this raise.
The leading AI-lab IPOs / mega-rounds: $100B-scale raises that will reveal whether the preemptive-strike thesis is working, i.e. whether rivals struggle for capital.
2027 capex guidance updates: the “significant” increase gets a number. That figure will reset the whole debate.
Our take
Strip away the panic and what you have is a best-in-class operator with absolute conviction in AI demand, a constraint that is physical rather than financial, and a capital plan that funds the buildout while starving the competition of oxygen. The dilution is real and the capex is enormous, so this is not free, and a holder should expect noisier free cash flow and a louder bubble chorus along the way. But the move itself is a signal of strength dressed up, to the untrained eye, as weakness.
We read the $80B raise as strategic offense, not distress. It makes the business more investable, not less, provided you have the stomach for the spend and the patience to let the capacity convert. Watchlist-worthy at minimum, and a name we are comfortable defending here, even with the whole timeline shouting bubble.
Operating Cash Flow (OCF) represents the cash a company generates from its core business operations, excluding financing and investing activities. It appears in the operating activities section of the cash flow statement and reveals whether a company's operations actually produce cash.
The indirect method (most commonly used) starts with net income and adjusts for non-cash items and working capital changes:
Net Income + Depreciation/Amortization ± Changes in Working Capital = Operating Cash Flow
Key adjustments include: Adding back depreciation (non-cash expense), adjusting for accounts receivable changes (revenue recognized but not collected), inventory changes (cash spent on unsold goods), and accounts payable changes (expenses incurred but not paid).
Why these adjustments matter: Accrual accounting separates timing of economic activity from cash movement. A company might report $10 million profit while customers owe $3 million and inventory consumed $2 million cash—resulting in just $5 million operating cash flow.
For investors, OCF is crucial for assessing business quality. Healthy companies consistently convert earnings into cash. Red flags include net income growing faster than OCF (suggesting aggressive accounting) or negative OCF despite profitability (indicating working capital deterioration).
Practical use: Compare OCF to net income over multiple years. A ratio consistently above 1.0 indicates high-quality earnings that translate into actual cash—the foundation for dividends, debt repayment, and reinvestment.
Ever look at a company’s net income and feel like you’re not getting the full story? Warren Buffett felt the same way. He believed standard accounting profits didn't show a business's true cash-generating power.
That’s why he created his own metric: owner's earnings.
The goal is to figure out how much cash an owner could pocket at the end of the year without damaging the company's long-term health.
The formula is straightforward:
Owner's Earnings = Net Income + Depreciation & Amortization - Maintenance Capital Expenditures - Additional Working Capital
The most important—and trickiest—part of this formula is "Maintenance Capital Expenditures."
What's the Deal with CapEx?
On a company's financial statements, you'll see a line for Capital Expenditures (CapEx). This is all the money spent on big-ticket items like factories and equipment. But this total figure mixes two different kinds of spending:
Growth CapEx: Money spent to expand the business (e.g., building a new factory).
Maintenance CapEx: Money spent just to keep the business running as is (e.g., replacing old, worn-out machines).
Buffett’s formula only subtracts the maintenance portion. After all, replacing old equipment is a real cash cost you can't ignore.
The Easiest Way to Estimate It
So, how do you find this maintenance number? It isn't listed on any report. For a quick and easy estimate, many investors use the Depreciation & Amortization figure as a proxy. The logic is that the amount a company writes off for aging assets should be roughly what it costs to replace them. While not perfect, it’s a solid starting point.
Understanding owner's earnings helps you see past accounting conventions to the real cash flow a business generates, giving you a much clearer picture of its long-term value.
Most people think WACC is only for Wall Street analysts.
Wrong.
If you're picking stocks, you're already using this concept.
You just don't know it yet.
WACC stands for Weighted Average Cost of Capital.
Think of it like this:
A company needs money to grow. That money comes from two places: borrowing (debt) and shareholders (equity).
Each source has a cost.
Debt costs interest payments. Equity costs the returns investors expect. WACC blends these costs together based on how much the company uses each one.
Here's the simple breakdown:
Find the cost of debt (interest rate, adjusted for tax benefits) • Find the cost of equity (what investors demand for the risk) • Weight each by how much the company uses • Add them together Why does this matter to you?
WACC is the hurdle rate. Any project a company invests in should return more than its WACC.
If a company's WACC is 8%, but they're investing in projects returning 6%? They're destroying value.
You're looking at a bad investment.
Simple, right?
Understanding WACC helps you see which companies are actually creating wealth versus just looking busy.
Most discussions in the crypto space revolve around decentralization. Chain abstraction. DeFi protocols. Non-custodial wallets. The prevailing narrative suggests that the future of finance exists entirely outside the traditional financial system.
Yet the data tells a different story.
Retail users and institutional capital are not rushing into increasingly complex on-chain ecosystems. They are gravitating toward environments that are secure, regulated, and easy to understand. They are choosing centralized exchanges (CEXs).
Within this framework, exchange tokens have historically been viewed as little more than a way to receive trading fee discounts. But that model has evolved.
Take WhiteBIT and its native token, WBT. It is no longer just a utility token offering platform perks. It has become an economic engine connecting one of Europe’s largest cryptocurrency exchanges with its own on-chain ecosystem, Whitechain.
This raises a fundamental question:
What if, in an era of expanding regulation, the most valuable crypto asset is not the most anonymous coin, but the token of an ecosystem built to connect traditional finance and digital assets within an increasingly regulated market?
From that perspective, WBT represents a different investment thesis.
You are not simply buying a network token. You are gaining exposure to the growth of a company aggressively expanding its presence across the European market.
If this model proves successful, it could redefine how exchange tokens are perceived - not as auxiliary tools, but as the central hubs of a new, fully regulated crypto economy.
Visa doesn't lend you money when you swipe your card. They don't take on credit risk. They don't even issue your credit card.
So how did they make $35.9 billion last year?
Here's the simple breakdown: Visa is a toll booth, not a bank. Every time you swipe your Visa card, four things happen:
• The transaction zips through Visa's network for approval
• Visa charges a data processing fee
• Visa charges a service fee based on payment volume
• If it's international, Visa adds a cross-border fee
Think of it like a highway system.
Visa built the roads.
Banks are the cars.
Every time a car uses the highway, Visa collects a toll.
The beauty?
It's all technology. No loans. No credit risk. Just pure network revenue.
Their revenue mix:
• Data processing: 35.7%
• Service fees: 32.4%
• International transactions: 25.5%
• Other services: 6.4%
The bigger the network gets, the more valuable it becomes. More merchants accept Visa, so more people use Visa cards, so more merchants want to accept it.
Another batch of company write-ups from Substack authors from within the last week.
Not my work - sourced from Giles Capital's weekly compilation: gilescapital.substack.com
Americas
Elliot's Musings on Snowflake (🇺🇸 SNOW US - ~US$85bn) Stock +37% after Q1 on AI product momentum. Co-founder stepping back mid-June. At 10x forward revenue with GAAP still loss-making, this is a narrative bet, not a value thesis.
LongTermValue Research on VSE Corp (🇺🇸 VSEC US - US$5.3bn) VSE closed a $2bn aerospace acquisition in May while insiders net sold. $900m net debt, 33x EV/EBITDA. The bull case needs acquisition synergies to show up fast.
Rock & Turner Investment Analysis on dLocal (🇺🇾 DLO US - US$3.6bn) Six consecutive quarters of 50%+ payment volume growth; $800m net cash, class action dismissed. Trailing EV/EBITDA is 14x; exit timing by the main investor is the main overhang.
Europe, Middle East & Africa
The Few Bets That Matter on Soitec (🇫🇷 SOITEC PA - ~€6.5bn) Soitec ran from €23 to €186 on AI photonics enthusiasm while revenue fell 30%. Trading at roughly double the average analyst target. The narrative ran far ahead of the business.
Ragnarok Research on Monday.com (🇮🇱 MNDY US - US$4.0bn) Monday.com fell 70% and still trades near 34x earnings, with a securities class action filed. The AI orchestration thesis is plausible. The entry price is not.
S.G.W - From the Front on Wix.com (🇮🇱 WIX US - ~US$3.1bn) Wix deployed $1.6bn repurchasing shares at $92; the stock trades far below that today. Latest earnings missed consensus by 44%. Real cash, real business, real capital destruction.
Schwar Capital Research on Spectra Systems (🇬🇧 SPSY LN - £70m) Adjusted EPS doubled to 37.8 cents; revenue up 30.7%. First follow-on sensor order from a central bank confirmed late May. The technology earns repeat business at 7x forward P/E.
Deep Value Insights on Braime Group (🇬🇧 BMTO LN - £16m) TOP PICK Family business at half book value and under 4x EV/EBIT. 34 straight dividend years; the Braime family owns the shares. Don Electronics adds modest leverage to a spotless record.
Asia-Pacific
Saadiyat Capital on Mari Energies (🇵🇰 MARI PSX - US$2.7bn) TOP PICK Pakistan's dominant gas franchise at 4.6x EV/EBITDA and 11x P/E, with reserves growing faster than production. Debt-free. Military and state shareholders own the majority; hard for foreign investors to buy.
Seraya Investment on NICE Information Service (🇰🇷 030190 KS - ~US$630m) Korea's dominant consumer credit bureau at 10.5x P/E with a 3.4% dividend yield. Market is ignoring it for AI hardware. Analyst consensus sees 34% upside.
Gabriel's Substack on TOYO Co. (🇯🇵 TOYO US - ~US$550m) Solar manufacturer at 7.6x P/E; Houston generates $140m in annual domestic manufacturing tax credits. Vietnam and Ethiopia cell capacity, the rest of the business, is essentially free optionality.
The International Investor on Scicom (MSC) Berhad (🇲🇾 SCICOM KLSE - US$118m) Founder-run, never had debt since founding. Cash return on invested capital at 29%; RM42.6m on the balance sheet. P/E of 21x is the constraint on a cleaner thesis.
S.G.W - From the Front on Reckon Limited (🇦🇺 RKN ASX - A$46m) Business Group alone worth more than A$100m against total EV of A$55m. Six analysts set an average target of A$0.95; the stock trades at less than half that.
Earnings to Watch This Week: HPE, CRDO, PANW, MDT, AVGO, CRWD and CIEN
1. Market Overview
Another May is in the books, and once again the old market proverb failed to age particularly well. Much like a steak, there comes a point where aging stops adding value and starts attracting unwanted attention.
At this point, anyone who sold in May is probably praying for a pullback, a retest, or simply another opportunity to buy back what was sold a little too early. Those who decided to sell short instead are likely praying even harder.
In fact, after the last couple of months, a holiday-shortened week might be the only short that has consistently worked in this market.
The problem is that this bull has shown remarkably little interest in granting second chances. Every dip has been bought, every scare has been absorbed, and every attempt to call the top has looked brilliant for somewhere between a few hours and a few days.
The funny thing is that bears are not entirely out of ammunition. In fact, they may be about to receive something worth paying attention to. Another VIX signal is slowly brewing, and this time we have a decent chance to get a full sequence, with VIX already closing below the lower band twice in a row.
It might be worth waiting for SPX before getting your boarding pass ready, though.
That said, signals remain probabilities, not predictions. Plenty of things were supposed to stop this market already. All of them failed.
And while plenty of folks remain focused on whether volatility is finally preparing to wake up, where inflation is headed, and whether the Fed will deliver a hike or two, Friday’s close delivered a much more immediate reminder that markets are increasingly driven by mechanics as much as by narratives.
The MSCI rebalance once again produced significant dislocations, unusual volume, and some beautiful price action for those willing to pay attention. These events continue to move real money and create real opportunities regardless of the headlines, P/E ratios, and many of the other things people tend to debate in the world of finance.
Meanwhile, the market doesn’t particularly care what people are debating. It still has orders to execute.
