Fed Hold Sparks AI Stock Panic: IREN, KEEL, HUT, DMGI & CORZ!

We react to the Fed holding rates and unpack why Bitcoin volatility and future rate expectations still trigger a brutal sell-off across AI infrastructure and miner-adjacent stocks. We then dig into what actually matters next: inflation drivers, staffing up with real HPC talent, contract economics, valuation methods, and what earnings could look like with FASB and big Bitcoin treasuries. 

• Fed decision context and why markets sell off anyway 
• Bitcoin volatility and how it feeds into equity fear 
• Inflation pressure from data center build bottlenecks and energy costs 
• Why power remains the core bottleneck for HPC demand 
• Core Scientific board appointment and what it signals about scaling 
• Hut 8 contract economics through NOI multiples and implied valuation ranges 
• How Bitcoin HODL positions can swing earnings under FASB 
• Keel timeline clues from job postings and the pace of deal-making 
• IREN investor relations hire and the broader talent land-grab 
• What makes an HPC deal attractive: revenue per MW, cost pass-through, WACC 
• Institutional interest and how we think about DMG-style upside scenarios 

Let us know in the comment section below what you thought of today's headlines and your top pick in the sector currently!

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Transcript

Welcome Agenda And Housekeeping

SPEAKER_01 0:00

Hey guys, welcome or welcome back to the channel McNally Money, the official home of power analysis. An interesting episode today with the Fed rate cut decision. We're gonna be covering that in addition to news out from Iron Keel Core Scientific, just to name a few. We've got a lot to get through. Before we do, take a second, smash the like button, guys. Big help to myself and the channel. Anthony absolutely loves it. If you're not already subscribed, McNally Money, feel free to join. Let us know in the comment section below what you thought of today's headlines and your top pick in the sector currently. With that being said, let's get into today's episode.

Fed Holds Rates Bitcoin Whipsaws

SPEAKER_01 0:42

All right, guys, away we go. Halfway through the trading week, a big day and a big podcast in store. It was the Fed rate cut decision today. We wanted to postpone the podcast until after that decision and meeting. We're gonna be talking about that first and foremost, and then an absolute bloodbath in the AI infrastructure market, Anthony. A sell-off across the board. Going to be talking about our thoughts there and giving you guys some updated valuations uh based on where we see some opportunity. So, first things first, Bitcoin. We pulled the one-day chart. We wanted to highlight those big spikes you're seeing as the Fed activity was going on. But as we're moving through the podcast, we're seeing continued volatility in Bitcoin.

SPEAKER_00 1:27

Yeah, extremely volatile today. Um, waiting for the news whether rates were going to go higher or remain as they were. And as you as you say, we'll cover that in a second. But the volatility of Bitcoin um has as has obviously spooked, and and the the share prices and the markets are pretty much in freefall today.

SPEAKER_01 1:46

Yeah, they definitely are. Now, first things first, this morning we woke up, obviously, a lot of anticipation coming into today. We saw a big sell-off over the last few sessions in the sector. Uh, Warsh was having some big dissension within the Fed. We'll talk about the actual results, but the decision was really favored to either keep rates flat or increase with a fear, obviously, of a rate increase. The companies we follow very dependent on interest rates as they have to borrow a ton of money to finance these projects. The meeting itself took place at 12 uh noon mountain time or two Eastern. That's when the actual rate decision came out, followed by the discussion and commentary a half hour later. And luckily, Anthony, we had the rates stay flat, but as you say, that did not help the markets.

SPEAKER_00 2:38

Yeah, the Fed held the rate steady at uh at 3.5 to 3.75%, and that's one of the closest calls in a few years, actually, as the inflation from AI infrastructure bottlenecks and the Iran conflict has really divided the committee. There were three dissenters um who wanted to have an increase of 25 basis points instead of a hold. Now, the chair uh uh Walsh has actually targeted inflation at about 2%, and um he's he's basically shut down any idea of a soft inflation target, insisting that the Fed remains committed to the original goal despite running hot. Um aside from that, we've looked at the the other markets as well, the SP, the Dow, the Nasdaq, all significantly down today. Um, and so you know this is the this is the the the bearishness of of of what's going on around the world and sort of like you know news at the moment, and nothing is is uh able to hide from this, as we'll come on to with the uh with the share prices.

SPEAKER_01 3:40

And that's where we wanted to start off today. So you'll see on the screen a sea of red. Now, it was pretty red this morning, Anthony. Once the Fed decision came out, they were holding rates. We actually saw some of the miners rebound or the AI infrastructure players, and just towards the tail end of trading here, a major sell-off. So my question to you is what would have happened if they did raise interest rates by a quarter point here, uh, considering how dependent these companies are on financing these projects?

SPEAKER_00 4:11

Yeah, I think the market's probably looking at the fact that, you know, um if you're seeing the board the way they were with people wanting to raise rates this time, and we're still going to have these global issues around because for the next vote, uh the challenge is that people are anticipating maybe a rate hike in the in the near future. And so the markets work off future predictions. You know, when you look at some of these stocks here, it's not about today, it's about the future. Whenever we put a price target out there by a by a Wall Street company, they're looking at future revenues, they're looking at future expectation. That's how they give their targets there. So everything's based on the future, and with what's happened today in the news and the fact that yes, it was held today, but there were a number of dissenters, and if those dissenters increase, you'll like to see a rate hike also

Inflation Drivers Behind The Sell-Off

SPEAKER_00 5:03

as well. And if if inflation, because of the fact that data centers are causing some of that inflation, that that that you know, when we've talked about this many times on the podcast, the fact that all these companies want to do everything now, you know, how many people out there in the construction world and electric electrical world there in terms of contractors are going to be available to meet these demands, what's the price you're gonna pay for those if you want it done now and not when they become available? And so we're already seeing and hearing from CEOs where saying they're having to pay what they would say is a premium to get these skill sets. And this is just like one part of an industry. You know, this could be happening, you know, if you're using all the electricians to do HPC, what are they doing in other parts of um in you know businesses around you know in the country or like that? So you're seeing this knock-on effect there, the requirement for these services during this time here. Also, the fact that we have an oil problem at the moment in terms of the fact that this conflict with Iran is causing problems to the oil price, is causing problems to the fuel price, is causing problems to everything because everything has to be delivered, and oil is you know is intricately uh part of everything, you know. If you start looking at how products are made and the energy required to do that, and so you know, the impacts of all this is just creating that inflation, and the US, you know, and like every other major economy trying to keep inflation down to a level of about 2%, um, it's a problem. Um, and as we can see from these share prices today, it's just that this is like the third third day. I think we even had Friday was a C have red, we've had some big uh uh uh downside in these share prices over the uh the the recent period there. And I've talked about this last month. This last month has been a significant turmoil. Go back to that 22nd of June where we were at some of these like 52-week highs, and we look at that 52-week range now, and you can see quite clearly 90% of the companies are in that sort of you know, 10% towards their 52-week lows, and there's only a couple of companies that you know maybe Hutt can only hold a flag and say we're about halfway, but the other companies are significantly lower. We've only got two companies above $10 billion at one point. We had six or seven. Uh, that also tells you how much has been reduced of the market. Iron just about managing to stay ahead of Hutt, it's on $12 billion, and as you can see, Iron is is holding on to $11 billion along with Hutt at $10.85 billion. So there's only $400 million between those two stocks there. And you know, if you to you know, if to be a betting person, you you would say that maybe HUT uh might end up with a higher market capitalization by the end of the week if share prices continue to fall at the rate they're falling um on a daily basis.

SPEAKER_01 7:59

Yeah, it's interesting to see. We're gonna talk about some different ways to value these companies, but if you look at the fundamentals again, Anthony, we're seeing more contracts signed, increasing rates per megawatt, bigger deals, bigger hyperscaler contracts, and now starting to see some of these AI factories actually being delivered. So we'll talk about some of the valuation. I also wanted to mention this is the time where money is made in investing, when the streets are red, uh, people are worried, and you're able to pick up these shares at a fraction of what you could just a few months ago. I know both you and I were taking advantage, making some purchases over the past few days, and we highlight that on the members channel and Patreon. But again, keep in mind, you guys, fundamentally, not much has changed over the past month. Uh, if anything, I would say more positives than negatives. Now, moving into the heat map, Anthony, and speaking about the last month, despite the news, we've seen these big contracts from Hut, from Core, uh, from Anthropic, we're not seeing any positivity across the first three columns.

SPEAKER_00 9:06

No, no, we're not. Um, and if yet if you look at the Bitcoin price, you are seeing uh an element of green there over the last three uh periods there, albeit you see the reverse of that. Bitcoin spent most of 2025 above $100,000, reached that $126,000 all-time high in October, and since then it's had this sort of like uh movement down to the $58,000 range. And we're just starting to we're just hopefully starting to see uh this pickup, but uh as you can see from today, the volatility um is immense. Um, you know, it's going to take a you know a big turnaround when stocks drop by a percentage, it doesn't mean they will have to increase that same percentage to get back to where they were, they'll have to increase significantly more just to get back to where they were. And when you look at that one month change, um the average there at 25%. Uh some of those household names in there are probably edging towards 40%. I mean, iron down 31%, Hutt's only down 19%. So arguably that's where that difference there is is coming into work now. This is only a one-month change. Look at the year-to-date change, you can see Hutt's share prices doubled year to date, and iron's is actually down 16%. So, you know, that it could be a case of you know, by the end of the week, we see Hutt at the top of the table there. Um, it's very strong over a year as well, 384%, as opposed to iron um only being up a hundred percent uh year to date. And so, you know, uh the challenge is, but we do know that these stocks can equally like look at the daily change there, they can they can they can turn that around very, very quickly. Can they turn around this whole month change um in a short period? Very, very possible. We know that there's no real issue in the space. I mean, we know that you know these companies have got the power, there's a drive for HPC. Um there might be some issue with the fact that rising energy cost, but energy cost is not as um sensitive in HPC as it is for mining. It's absolutely sensitive in mining. Any fractions of a change in the in in you know in the cost per kilowatt hour is going to seriously impact your your um your your profit margins. I was talking to you know a very prominent miner, and they're currently, I think their power costs are about five cents a kilowatt hour at the moment. And I said, Is it how sensitive is the power cost for your client? And they said, We doubt we'd get a phone call unless the power cost went to about 10 cents, literally doubled, and then the client might just give them the ring and say, Is everything okay? Power cost, blah, blah, blah. That's the sort of like, you know, that that that it's not as sensitive there. If that five cents changed to five and a half cents in Bitcoin mining, that's a massive difference, and you'd be you'd be, you know, either switching off machines or or or trying to mitigate that that increase there somewhere or some form. But um, as I say, we can see these turnaround quickly. Uh you know, I think last week we had a couple of the of the periods there in green, but this last four days has been um has been a bit more gloomier. And um, you know, people who who didn't sort of sell as at the end of you know, as of that period in June there will be looking at their portfolios and saying I'm down 30 to 40 percent because most of these stocks are down 30, 40 percent, you're not gonna hide from them. If you're following this channel, the chances are you've got many of the stocks on here. If you say, well, actually, I've got I've got Hook and I've got Sluna, they're still down, you know, 19 and 12% respectively, just over the last month. So that's the challenge of the space. That's what probably entices people, that volatility. Um, let's hope we get some some some positivity and get some of these numbers back to where they need to be, because I think people are are looking now and saying, my my my positions here and some will have pension positions um not looking too great at the moment.

SPEAKER_01 12:59

Well, and we've talked about swing trading or using a portion of your account to swing trade between some of these highs and lows, and I think that's pretty effective to take advantage of the volatility. The other comment I wanted to make, Anthony, it's pretty much everything related to AI. It's not just the companies we cover, it's the memories, uh, Micron, DRAM, the chipmakers themselves. Anything related to AI right now is selling off, even some of the hyperscalers. And in our situation, we know power is the bottleneck. We know the companies have that regardless of what the price action tells us on the screen. Now,

Bitcoin Asia Conference Plans

SPEAKER_01 13:36

before we get into some of the top headlines and valuations, quick shout out on the Bitcoin side of the house. You're going to be headed back to the Bitcoin conference in Asia. Uh, speaking at that event, you've been there a number of times following our US Bitcoin conference experience as well, uh, and potentially making your way down to Korea.

SPEAKER_00 13:56

Yeah, I I attended the Bitcoin Asia conference last year, um, took my wife to that conference actually, and we managed to catch up with Asher Ganoot from uh HUT 8 and some of some of the other members of the team there. So, really, really uh good conference. I'm there this year as the speaker, and I've just been invited to the Korean um uh Bitcoin conference, which takes place the following week. So just trying to sort out logistics for that at the moment, but um it's a place on my list I'd like to go. So I've been to quite a few places in in Asia, but uh Korea and Japan are on my list to visit. Korea hopefully be attending this year. So looking forward to both of both of those. If you are in those areas and you want to catch up, I'll confirm the Korea one in the next few days, hopefully. Um please drop me a DM and hopefully we can uh catch up during the conference, have a coffee. But uh always great to see some of the some of the followers and um managed to meet many at the main Bitcoin conference and other conferences we've been to. But uh yeah, Bitcoin Asia should be quite special. They're um they're very that it's a technology city, Hong Kong, and that they're all all about technology and and and Bitcoin is very high on that agenda. So really looking forward to attending that conference again.

SPEAKER_01 15:07

Yeah, and I think South Korea's got a pretty good following of Kiel infrastructure. So if anyone uh involved in the Kiel club, that's a great opportunity to meet up with Anthony. Uh now housekeeping bit digital. We mentioned their AGM was coming up a couple of weeks ago on the channel. That took place this morning, uh 9 a.m. Eastern time. So just wanted to update everyone on that. Hopefully, you're able to attend if you're holding shares. And with that being said, we move into the main event. We're

Core Scientific Board Hire And Expansion

SPEAKER_01 15:36

gonna be talking about human capital, some key hires, some timelines, and where we think the value of some of these stocks should be, Anthony. Kicking things off, Core Scientific. They've made a big appointment in terms of their board of directors, Mark Adams. We just talked about their earnings recently on the channel. Uh, this is a company that's really gone strength to strength. We've seen them consistently bring on new talent. This is a great example of that.

SPEAKER_00 16:03

Yeah, and and bear in mind, remember, it's only two and a half years since they came out of chapter 11, and look where they are now. They've got effectively the largest amount of megawatts or compute megawatts of any of the companies that we talk about on a daily basis. 1.1 uh gigawatts of compute power in contracts, um, you know, with the likes of core, with the likes of AMD, and a neo cloud supported by AMD as well. So Mark Adams joining that board immediately, that's expanding the board now to seven directors. And uh his previous position, he was most recently the president and CEO of Penguin Solutions, they're formerly Smart Global Holdings, that's from 2020-26, and leading its repositioning into AI infrastructure and memory solutions. He's also spent 10 years at uh Micron Tech. Many of you will be familiar with that company, that's MU. That's nearly a trillion dollar company as we stand today, and the mark the stock prices come down from $1,255 to about $750. So imagine what it was valued at when it was at $12.55. Now, he was there as uh uh spent four years as the president. Deep um he's got a deep semiconductor and storage pedigree, and he also sits on the boards of Seagate Technology since 2024 and Cadence Design Systems since 2015. Now, the great thing uh you know about Adam Sullivan bringing him onto the onto the board is to hire these people um around him so that the company can scale their business globally and cause want to expand this HPC business globally across across the world. So expect to see more potential updates with with sites purchased in in other countries, and they won't be the first to do that. A number of the people we talk about on a daily basis, you know, the likes of you know Mara, the likes of um uh Bit Digital uh Wi-Fi, they've they've set up hive are set up in in different countries as well. You know, um there's plenty of opportunity out there, um, and Europe uh being one of the biggest uh continents in the world in terms of you know a developed uh continent there with you know nearly 600 million people living there. Maybe we see core scientific move in that direction as well, like some of their peers have.

SPEAKER_01 18:20

Yeah, we know Nebus Iron did that. Iron also eyeing up South Australia. So it seems the strategy is once you lock down megawatts in the States, maybe expand the borders internationally. And we know sovereign AI and compute is a big theme we've been covering. So that's core scientific. Now, I wanted to touch on you, just mentioned around 1.1 gigawatts of contracted value. I think their total contract book was in the neighborhood of about 24 to 25 billion. Now, we wanted to take a different lens here on HUD 8. They're

Hut 8 Valuation Using NOI Multiples

SPEAKER_01 18:52

in a very similar situation around that gigawatt club. They've got an overall run rate right now of $26.6 billion based on their current contracts. And in this most recent update, disclosed an annual NOI of $1.75 billion. So we did a bit of digging here, Anthony, looked into some NOI multiples. Now, we've talked about EBITDA multiples before on the channel. I know you've got a few examples later of that, Anthony. But if you look at NOI multiples, essentially the inverse of the cap rate, you get anywhere from 16 to 23 and a half as the industry benchmark for these data center type companies. Now we plug that in based on the NOI HUTs provided. It gave us some pretty interesting implied values. Uh, and you made a point. This does not include any of the Bitcoin or HODL also associated with HUD 8.

SPEAKER_00 19:48

So using the different CAT rates in terms of the type of client that you're going to be working with, or you know, hyperscaler, um, you know, uh wider enterprise uh value um or institutional, and you can see the multiples uh calculated, which are the inverse of the cat rate, one divided by the multiples there range from 16 to 23 and a half, and the implied values for the company, just based on the deals, this is 949 megawatts of compute power, uh 1350 megawatts in total, so um you know 400 megawatts of of ancillary power support in this, which is the fraction of their total pipeline, by the way. If total pipelines over nine uh um gigawatts of power, so they've probably got the opportunity to do this like six times over, but the implied value of that 949, based on the numbers that they've provided, is given us anywhere between 28 billion and 41 billion. Now we know the hodl's worth potentially close to a billion dollars, maybe a little bit less today with the Bitcoin price dropping, and they've also got other facilities, one of them which is that phenomenal Vega site, which is a leased out to ABTC, and they'll have a number of other assets on their balance sheets, so they're not included in these values. Now I look at today's uh valuation, and arguably, yes, they've not started to receive any of the revenues from these deals, but the way that you know the companies on Wall Street there, when they do their analysis, they're always looking at future, and the expectation is by 2028 all these revenues will be flowing through for these three deals. So um, you know, if you look at the value today, 10 just over 10 billion dollars, and you know, if they've got you know one of the big, big hyperscalers in there with that implied value um of 41 billion dollars, we've got a long way to go. That's a 4x from where we are today. So um, you know, plenty of upside in this there, and we've been showing you plenty of valuations of potential deals for other companies, and we'll come on to those at the end of the podcast just to show you what that looks like uh when they provide the transparency that they have been doing. on these deals and this is a great deal for Hull. I think one of the in fact it was listed as one of the best deals out there in terms of that they're managing to get really high revenues and also with the with the way they've set up the contracts all the costs are flowing through to the client so they've got very very little cost is effectively like 100% eBit Dart because all the costs are are client-based costs so they're able to do that with the type of contract they set up so really really strong contracts but again you know we spoke yesterday this is one element of it so it's all right having all those revenues 26.6 billion in revenues uh once we need to see you know the financing supporting those revenues what does that look like and uh that will also matter depend on the type of clients and although we haven't seen a name mentioned associated with any of these deals we have seen um the name Nvidia um as a co-signer of some of these deals uh matt siegel our great friend at Vanette he's um he he put out a recent tweet suggesting that they were the co-signer but the company haven't confirmed or denied that maybe um when asher comes onto the podcast um hopefully next week we'll be able to say maybe raise that question with him but the chances are if it's not if there's nothing being named at the moment they'll be probably fairly fairly Qt about it unless they want to announce it on the day of the earnings to give to give the the the boost uh in information available out there and because we know from a from a from an earnings perspective it's not going to be a great period to report on Q2 and as we saw with Core Scientific yesterday the first company to announce their earnings from the companies that we talk about a daily basis they announced earnings and at the same time they announced a $14 billion deal with AMD so I'm expecting maybe more of that than just earnings coming out with a you know typical the Bitcoin price dropped and and our earnings are not as great as the previous year blah blah blah so that's what we've got to to look forward to hopefully a lot of these companies are are playing that game where they can give out some positive news on a day where they're giving out you know poor effectively fairly poor results because of the Bitcoin price not through their through their uh through their poor uh management their reliance on a bitcoin price which they have no control of and that's really exactly what started this whole switch over to AI infrastructure now you just mentioned the HODL I wanted to go to HODL 15's top 100 here quick refresher Anthony we started this channel in the Bitcoin space I know a lot of our new followers are coming in from an AI infrastructure lens a lot of the companies we talk about here going into earnings the riots the Maras the Hutt ABTC uh the list goes on and on they've got significant Bitcoin on their balance sheet can you just give a quick update based on where we saw Bitcoin at the end of Q1 versus Q2 how does FASB impact these companies and what can we expect uh going into earnings for people maybe not as familiar with the Bitcoin uh past here yeah and if you look at the earnings you know this for the previous quarter here quarter two the 10,000 drop in Bitcoin price from the end of Q1 to the end of Q2 from 68000 down to 58000 you're going to see you know significant impact on a number of the companies that have high HOLs in terms of the likes of Hutt, Riot uh Mara um all with over 10,000 Bitcoin if we use Riot just an example um you know if we look at the the change in value of Bitcoin for their HODL during that period it's gonna be around about $156 million just for the quarter.

Bitcoin HODL And FASB Earnings Hit

SPEAKER_00 25:52

That's gonna wipe out any revenues that they've achieved during the quarter um for for Bitcoin mining effectively so you and then you've got all the cost to associate with Bitcoin mining so you're gonna see uh you know a pretty much a CRE against a lot of these companies with the hodls it won't affect as much the likes of uh TerraWolf or or uh Iron and remember we've had those CEOs on the channel saying we're not gonna hodl we don't see the benefit hodl we'd rather use our money to build and grow the businesses well they've probably got a stronger argument for that now if you look at how those companies have have changed since the time they came on the podcast and said that when they were nowhere near the size of they are today they've used their Bitcoin to grow the company and they've made the best use of that um Hutt have managed to do that with growing a hodl as well because they are hot on the heels of overtaking iron in terms of the of the of the largest company that we talk about regularly maybe they do that and if the Bitcoin price rallies it's a it's a win-win for them but um bitcoin's a challenge uh for FASB when it's when it's reducing in in price quarter by quarter great when it rallies and you get the reverse of that but we're gonna see another quarter now where we have significant losses like the previous two quarters.

SPEAKER_01 27:13

Yeah and I was saying yesterday I don't think Bitcoin can go much lower from here. That's personal not financial advice but at some point we'll start to see the benefit maybe it will coincide with the ramp of AI revenue and we'll get a kind of a double banger there down the road but as of Q2 you're right not going to help us out on the FASBI accounting. And we

Keel Hiring Signals Deal Timelines

SPEAKER_01 27:35

just talked about a key board appointment over at Core Scientific an interesting posting from Keel we noticed not so much the post itself but the timeline here Anthony I know you've worked on some of these big contracts in the past you can see a construction safety director role but interestingly noted for Sharon Pennsylvania now if we bring up the investor deck uh we know Sharon is one of the sites that's scheduled to sign this year.

SPEAKER_00 28:02

Yeah one of the three sites along with Panther Creek and Moses Lake and if you're starting to advertise these types of posts you're gonna need these HPE these safety guys at every location there because one thing about um when you're doing construction works there you want to make sure that everything um is built to a standard where and and where there's no uh slip ups or no accidents or whatever like that and these people uh will be managing these projects um to make sure every element of safety is incorporated I've worked on some big oil and gas contracts there and they are sort of like key appointments and not the overall in charge but they have a have a seat at the management table because safety is extremely important on any agenda. Now the fact that they're advertising this now suggests that that post is going to be filled this year which suggests um that things are moving in the timeframe that Ben talked about on the previous pod two podcasts uh when he highlighted three deals um this year and on the second podcast we asked his percentage of conviction on those three deals and he said he had a larger conviction that they would be achieving three this year. The market's certainly anticipating it um uh in terms of the anticipation but the the share price um as we've seen today now it's getting very very close to dropping below three dollars a share and um bear in mind if you go to that slide we we showed yesterday I think it was you know with no deals in place it looked like it had about a $4 valuation for Kiel so at the moment uh potentially none of the deals are factored in that's the that's the way the market works I can tell you now that I sold a few uh keel shares on the 22nd of uh june I think I was seven dollars per share so that four dollar reduction just in a space of a month that's a challenging uh challenging period um but equally I've bought some a significant amount of shares since that since then topping up uh back to where I was uh and probably a little bit extra from where I was on the 22nd of June because I believe that you know that that that there's some value in this company they haven't announced these deals they're about to you know by the end of the year and I'm hoping that some maybe get announced with the earnings there. Van Eck also have a timetable of when they believe deals are going to be announced and they did suggest that two could be announced by the end of summer well depending where you are in the world summer for me finishes in about a month's time so hopefully that's enough for for Ben to give us more of an update but we know they've been following every process um going through all of these sites in terms of zoning approval active commercialization um and and so really looking at all the very very the the processes you need to build a site properly not just a case of we've bought some land and now we've signed a contract there's far more to it than that and Ben's been quite clear to educate us all in how that process looks and we're seeing more and more companies start to educate us more in some of these processes because it's not a case of you know here today sign tomorrow these deals take you know a minimum of six months when you're around the table discussing we've had you know the likes of Patrick uh fleury explain that the that you know 16 hours a day for you know for nearly six months to get to a deal once that deal was signed the following deals took very very short space of time because you've built that relationship and hopefully we'll see more of these companies on their second third and subsequent deals do it far quicker but the first one and probably that's what Keel are going through now that round the table uh discussions now once the first one's signed you probably see uh two more in very very quick succession so looking forward to to Ben coming on the podcast in the next few weeks to highlight where they are at the moment but it's getting close to the end of summer Ben hopefully you've got some good news for us uh to support the earnings update yeah no kidding and we actually have Patrick Fleury and Ben Ganyon both confirmed booked in for earnings interviews so that's gonna be great now moving over to Iron this is another one very excited for earnings a lot of anticipation around what will they announce next uh they've actually made a key hire as well coming from Wall Street so Bob Chen actually joining the team with an extensive history at none other than JP Morgan.

IREN Adds Wall Street Talent

SPEAKER_00 32:22

Yeah uh Bob Chen joins the company uh from JP Morgan after seven years of head of technology media and telecommunications research in Sydney itself so he's going to be based at the where the where the home head office is there now he's previously covered ASX listed tech coverage including Next DC WiseTech Global and Zero and he joins the IRAN's investor relations function to support them on their bank side research now he's the latest in a string of finance sector hires at IRAN following the CEO Anthony Lewis from Macquarie and the business development head Boris Langubic from CVC Capital Partners so as you can see these companies are starting to really build and grow uh top talents in their teams as they progress this uh move into HPC remember all these companies were Bitcoin mining and to be honest with you you don't need top talent to to put a container out there and put um some uh ASIC miners in there and switch them on for HPC that's a whole different ball game this is not an area where most of these companies have all their experience in that's why they're bringing in you know uh experience from people who've been working at the top companies in the space for a number of years you know sometimes 10 20 or 30 years of experience coming in uh with the with the right personnel and every company's been announcing uh this especially the ones that we cover on a day-to-day basis it's a requirement but it's also sending a message to the market that they are exactly knowing what they're they're going to get into and they can deliver that's all about we don't you know we don't know from experience you know how every company's going to deliver but bringing these people in here it gives the market a sense of they've done this before in other locations they can now do it with a new company as well so I'm I'm happy with the with the announcements today in terms of these people joining the likes of Iran uh course scientific and keel as well uh we'll see many many more of these as more and more of these deals start to get announced because they're an important part of the strategy.

SPEAKER_01 34:30

Yeah they are and we've actually seen a number of hyperscaler uh work employees being poached by the companies we cover so it's interesting to see opportunities like this uh present themselves speaking of opportunity Mike Alfred think following maybe a Kevin Zoo interview with our friends over at Iced Coffee Hour Graham Steven who we actually got to meet at the Bitcoin conference uh seems to have inspired quite a few people on Twitter.

Mike Alfred Monetizes X Following

SPEAKER_01 34:57

We know Mike Alfred is a board member or director at IRIN.

SPEAKER_00 35:01

He started up a subscription plan here Anthony and we got to give a shout out pretty impressive results considering he's only been in the subscription uh business about two days now I think it's even less time than that um you know 24 hours effectively uh yeah Mike Alfred is an independent director at IRIN he's been there since um late 2022 so just over uh four years since the company IPO'd actually um and he's been an avid user of uh twitter now known as um X during that period he's built up a a following there of about 300 close to 35000 followers and I think it looks like he's decided having listened to uh Kevin's uh podcast there uh maybe to uh to monetize his his following there and he's uh announced um a subscription um for about I think it's about 230 dollars a month in terms of US dollars there I know it's got their 302 Canadian dollars whatever the conversion rate is there and in the first 24 hours he's already up to 374 subscribers if you were to put that into dollars and multiply that out um the gross amount of this at the moment in 24 hours is about a million dollars a year now he has promised uh some some perks to go along with this subscription so he's going to be exclusively posting to these people and he's already started doing that you can see from his ex that probably more of his posts now are going through to the subscribers rather than to the general public and the other thing he's put on there is he's he's going to have in-person wine dinners and he's already looking to do one in New York and he's and I think on looking one of his latest tweets it suggests that he's gonna do some more in different parts of the US as well so that more and more subscribers in those areas are able to attend um but that looks like um a great opportunity we've been very fortunate to be at a dinner with with um Mike and the RNT and obviously a background in in investment um far more so than me and you Bryce so definitely worth having a review to see if it's something that you're interested in but if you follow Mike on on on X hopefully he'll still be able to give a few a few tweets to those people as well that I think that's the issue there. If people can't afford it are they going to miss Mike altogether I think he'll still do a few shout out posts for the general public as well as his subscribers.

SPEAKER_01 37:20

Yeah I think he will or hope he will too and I've actually applied for my subscription service so that's soon to launch here Anthony a couple more pieces before we get into the valuation you mentioned earlier in terms of keel what percentage of share price is based on future deals versus what's already uh maybe signed in the case of some of their peers.

What Makes A Good HPC Deal

SPEAKER_01 37:41

An interesting article out from KB and Woods talking about the fact specifically Clean Spark Hutt and Wolf in the case of them showing a lot of opportunity and starting to talk about okay what's the next deal that may be presented that seems to be kind of the hamster wheel effect here these companies find property they sign a deal and then immediately retail is looking for that next deal wanted to get your thoughts on that as we move into earnings here as well yeah I mean you know that they've highlighted three companies there with with really good deals at the moment we talked about the Hutt deal being one of the best deals out there.

SPEAKER_00 38:19

Clean Spark I mean surprisingly um you know the CEO chairman Matt Schultz went on CNBC the day that was announced if you can still see a uh a clip of that interview that's an interesting one I actually thought the numbers are really good and they sort of went on the attack a little bit in terms of well they're not as good as some of your peer miners and he sort of agreed with them saying well this is our first deal and hopefully we'll grow from that um I I thought the numbers were were were really good for a first deal uh certainly better than most of the most of the deals we've seen up to now and that's why they're in this group of three we know also from from uh Patrick Fleur who came on the podcast to highlight their latest deal there the price per or the revenues per megawatt was in the sort of like 2.35 2.37 million range can't remember the exact number but it was certainly higher than what we've seen everywhere else um but clean spot was certainly heading towards a 2 million there and Hutt have got these great deals around about the 2 million as well we talked about core scientific yesterday their first deal was in the 1.4 million range there but again don't just look at the revenue look at the costs associated they've got the six billion of reef of refurbishment costs paid by their their client uh core weave uh whereas these other companies have to go out there and borrow and remember what Patrick said it's all about weighted average cost of capital so even though these companies looked at core scientific's original deal and thought the revenues are quite low they've all come out subsequently and said that was a phenomenal deal because you're not having to pay any significant amounts you have to raise any uh big big amounts of capital to to do that because your clients paying for that I think they had about 70 megawatts of uh refurbishment cost to find themselves of which they they've done that since subsequently and you know this this time next year that 590 will all be compute all be gaining revenues and then moving on to the next deal with AMD that 14 billion dollar deal which will be complete in the first half of 2028 so um you know really really um optimistic um uh these here but clean spot hut and terror wolf uh yeah i i i agree they're they're three good deals out there but there's a lot of good deals out there as well you've got to go and do the research uh clean spark have these other two sites in Texas and their current client has um an option to uh expand into those as well and I don't think um the market and neither does the writer of this believe that that's actually represented at all in their share price um you know a lot of these companies with the share price at the moment the volatility there um there's there's such a low price that it looks like none of the HPC is is is in there and and they may have some value and but do your research before you make decisions to buy.

SPEAKER_01 41:08

Now

BlackRock Stake And DMG Upside Math

SPEAKER_01 41:09

another nice thing about earnings season is we get to see some of the big institutional holdings and updates on their positions. BlackRock came out with a disclosure today dated for the end of Q2 so June 30th talking about their keel position so as we move into our valuation analysis here on Kiel I wanted to get your thoughts on institutions in this case taking a pretty big piece of the pie.

SPEAKER_00 41:33

Yeah BlackRock uh you know um have have obviously announced their um earnings in there and and it's highlighted now through their 13F that they've got a an 8.4% stake in Kiel over 50 million shares in the company that that will come as a a you know as a surprise to have that level of stake in the company there they've obviously you know they don't just go in investing companies they will do their research and then do the right investment they've obviously got a firm belief that keel is going to uh do some great things over the next few years with the amounts of power 2.2 gigawatts of power so great to see institutional interest. Yeah it certainly is now one thing we've been covering a lot over the past few weeks these valuation analysis tables we've actually updated the website poweranalysis.io to feature uh some of these highlighted deals or potential deal values we have DMG here Anthony so if you wanted to walk us through kind of what this is again available on the website under the HPC deals analysis drop down yeah we just did a uh well I did a valuation based on that 50 megawatts of compute um IT load there we've only got 65 megawatts of of pipeline they're growing that to 75 megawatts that'll give them at least 50 megawatts there looking at the revenues of about 1.75 million so very much sort of middle of the park in terms of revenue per megawatt and a and a 70% margin which is probably lower than some of the other companies their peer companies have been providing so a little bit more pessimistic if you're to factor that through there and 50 megawatts we talked about this before this is a sizable deal especially for DMG this is going to provide 88 million dollars a year in revenues and uh this deal alone um could have an impact to the share price of about $2.06 and bear in mind today I think it was hovering around the 30 cents or 33 cents range there in the very low 30s uh this is the potential to move that share price up significantly um you know they've been involved in one of the oldest miners in in bitcoin mining but that that that sort of strategy just hasn't worked for any of the companies now using their power towards HPC uh this looks like a more appetising strategy to follow I've included sensitivity analysis as well that will highlight any changes that you think for the eBit DAR percentage and also for the revenue per megawatt so at the moment at you know 1.75 you know if you were to say they get closer to uh to what Hook got if they get a neo cloud who are paint playing a bit more revenue than than hyperscalers uh that could be significantly higher then if they've got a higher eBit DAR that um that $2.06 can very quickly become $3.42 at 8% EBIT DAR. So this is using a less a less optimistic um set of assumptions but the potential could be higher so even less optimistic sniff an upside in share price for 50 megawatts for DMG.

SPEAKER_01 44:37

Certainly

Website Valuation Tables And Closing

SPEAKER_01 44:38

is yeah and we have these available for all the companies we cover on the website so make sure you guys go in take a look at our valuation see how it compares to your price targets let us know if you are taking advantage of the dip today we'll see you back here tomorrow as earnings season continues.