Company Overview - Formula Growth, based in Montreal, has established a new position in Galaxy Digital (NASDAQ:GLXY) by acquiring 139,195 shares valued at approximately $4.71 million, representing about 1.67% of the fund's total U.S. equity assets of approximately $281.08 million [2][3] - As of the latest market close, Galaxy Digital's share price is $24, with a market capitalization of $9.7 billion, revenue of $23.3 billion, and a net income of -$230.9 million over the trailing twelve months [5] Financial Performance - In the third quarter, Galaxy Digital reported a net income of $505 million and adjusted EBITDA of $629 million, driven by record trading activity and investment gains [12] - The company maintains a liquid balance sheet with $1.9 billion in cash and stablecoins, and total equity of $3.2 billion at the end of the quarter [12] Business Model and Services - Galaxy Digital offers a range of services including digital asset trading, derivatives, structured products, lending, capital markets, M&A advisory, asset management, bitcoin mining, and validator services [9][10] - The company serves institutional investors, corporations, and individuals seeking exposure to digital asset markets and blockchain technology solutions, leveraging a diversified platform across trading, asset management, and infrastructure solutions [10] Market Position and Strategy - Despite a nearly 40% drop in shares since late October due to a $1 billion exchangeable notes offering, Galaxy Digital's diversified exposure to trading, asset management, and AI-linked infrastructure is viewed as a long-term strategic advantage [11][13] - The Helios data center project is fully funded, with anticipated annual revenue of up to $1 billion once all phases are delivered, indicating strong future growth potential [12]

Core Thesis - Solaris Energy Infrastructure, Inc. (SEI) has experienced significant stock price appreciation, nearly quadrupling in the past year due to a strategic pivot towards AI-linked infrastructure following a $200 million acquisition [2][6] - However, the company's business model is showing signs of distress, particularly due to its reliance on a single customer, xAI, and the commoditized nature of its power rental segment [2][3] Company Performance - As of September 3rd, SEI's stock was trading at $26.98, with a trailing P/E ratio of 45.73 [1] - The power rental segment is facing challenges as xAI has removed most of SEI's turbines and plans to idle the remaining ones, which raises concerns about capacity expansion claims [3][4] Financial Outlook - Industry experts predict that if idling continues and no new customers are acquired, SEI's EBITDA could decline to $200 million by 2026, significantly below the consensus estimate of $363 million, leading to an EPS of approximately $0.50 [5] - The stock is currently trading at around 40 times forward earnings and 6 times tangible book value, reflecting aggressive expectations for future earnings growth [4] Competitive Landscape - The mobile power rental market is becoming increasingly crowded, with competitors like Fortress and Atlas Energy entering the space, which may exacerbate the challenges faced by SEI [4] - SEI's management history and inconsistent disclosures raise further concerns about the company's operational stability and transparency [4]