Galaxy Digital (GLXY): A Bull Case Theory

Core Thesis - Galaxy Digital (GLXY) is viewed positively due to its strategic financing moves, including an exchangeable senior note offering of up to $1.15 billion and a $325 million equity sale to Capital Group, aimed at funding the next phase of its Helios site [2][4] Financial Overview - As of December 2nd, GLXY's share price was $25.36, with trailing and forward P/E ratios of 44.29 and 69.44 respectively [1] - The first 800MW development at Helios has an estimated capital expenditure (CapEx) of $7 billion, funded by 20% equity and 80% debt, projected to generate approximately $900 million in EBITDA by 2028 [3] Growth Potential - The application of a 25x multiple, consistent with Goldman Sachs' valuation approach, suggests an enterprise value of $22.5 billion and an equity value of about $15.5 billion, translating to roughly $40 per share [3] - Replicating similar economics in the next 800MW phase could potentially double the equity value, indicating significant upside potential for investors [3] Strategic Financing - The exchangeable structure of the notes provides Galaxy Digital with flexibility in repayment options, minimizing dilution risk while extending maturity to 2031, by which time substantial cash flow is expected [4] - This capital raise is positioned to enhance cash flow generation, strengthen the balance sheet, and solidify leadership in AI-optimized data center infrastructure [4] Market Position - At the end of the second quarter, 26 hedge fund portfolios held GLXY, a notable increase from zero in the previous quarter, indicating growing interest [6] - Despite the potential of GLXY, there are suggestions that other AI stocks may offer greater upside potential with less downside risk [6][7]