‘Epic’ tech selloff will continue unless mega cap Tech lifts revenue guidance: GS By Investing.com



A massive reversal of momentum favoring small-cap stocks over large-cap stocks is likely to continue, according to Goldman Sachs strategists.

Last week, small-caps recorded a historic weekly performance against large-caps, which is attributed to several factors, including a slowdown in inflation and the anticipation that the Federal Reserve may lower interest rates in September.

Furthermore, consistent economic growth data and a surge in the likelihood of a Republican majority in upcoming elections have contributed to this reversal.

“Small caps tend to be very sensitive to the US economic growth environment, and they strongly outperformed following Trump’s 2016 election. Small caps are also more domestic-facing than large caps and less vulnerable to tariffs,” the analysts wrote in a report.

The investment banking giant also noted a compression in the earnings per share (EPS) growth premium of large-cap stocks relative to their smaller peers as a significant factor. 

“The recent trend of small-cap outperformance will likely persist unless the macro environment changes substantially, or the mega-cap Tech stocks report 2Q results that causes analysts to raise revenue forecasts for the next several quarters.”

The report also highlighted that investors are showing concern regarding the sales projections for large technology firms, known as hyperscalers.

“[I]nvestors have become increasingly concerned about the prospect of “overinvestment” in AI, especially among the four hyperscalers (AMZN, META (NASDAQ:), MSFT, and GOOGL).

“[These firms during the past six months have dramatically increased their planned spending on AI initiatives but it is not apparent when the return will come – in 2027, 2028, 2029, or perhaps not at all?”

This lack of growth in sales estimates is seen as a potential limiter to the performance of these large-cap tech stocks.

“The potential resumption of the AI trade – and by extension a reversal of the recent underperformance of large-caps vs. small-caps – will depend on revenue revisions.

” outperformance will resume if big Tech beats and raises its forward sales guidance. If not, then small caps will continue to outperform,” the brokerage firm concluded.





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U.S. FTC probes Hess, Occidental execs over OPEC communication, Bloomberg reports By Reuters


(Reuters) -The U.S. Federal Trade Commission is probing executives from major oil firms, including Hess Corp (NYSE:), Occidental (NYSE:) and Diamondback (NASDAQ:) Energy over their communications with OPEC officials, Bloomberg News reported on Friday, citing people familiar with the matter.

All three companies are pursuing multi-billion dollar deals which are currently under FTC review.

The current investigation of communication with OPEC officials is part of the U.S. antitrust regulator’s review, the report said, adding that investigators are looking for evidence of collusion over oil market dynamics.

Earlier this year, FTC barred former Pioneer Natural Resources (NYSE:) CEO Scott Sheffield from Exxon (NYSE:)’s board on allegations that he attempted to collude with OPEC to raise oil prices.

The FTC made the move as it approved Exxon’s $60 billion purchase of Pioneer.

© Reuters. FILE PHOTO: The logo for Occidental Petroleum is displayed on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 30, 2019. REUTERS/Brendan McDermid/File Photo

Hess, Occidental, Diamondback and the FTC did not immediately respond to Reuters requests for comment.

Last month, the U.S. Senate budget committee launched a probe of domestic oil producers, including Exxon and Chevron (NYSE:), about any efforts to illegally coordinate oil prices with the OPEC.





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Tesla’s California sales slip 17% YTD, rivals surge By Investing.com


Investing.com – The California New Car Dealers Association (CNCDA) released its California Auto Outlook Report on Thursday, summarizing new vehicle registrations and forecasting annual sales.

The report indicates a slight dip in California’s new light vehicle registrations. Despite this, the state is projected to reach a forecasted 1.8 million new vehicle registrations by the year’s end.

A key highlight from the report is Tesla Inc (NASDAQ:) declining market presence in California. The electric vehicle (EV) giant’s registrations have dropped a significant 17% year-to-date (YTD), marking the third consecutive quarter of registration declines for the brand.

While Tesla’s Model Y remains the top-selling car in the state, the data suggests that Tesla sales may have reached their peak in California.

On the other hand, traditional automakers like Toyota (NYSE:), Hyundai (OTC:) (LON:), and Ford (NYSE:) have seen a surge in popularity, particularly in their EV models. Toyota and Hyundai’s battery electric vehicle (BEV) registrations rose by 108.1% and 65.7% respectively. Hyundai’s Ioniq 5 notably took third place in the top-selling EVs in California YTD, surpassing Tesla’s Model X.

David Simpson, CNCDA Chairman, expressed his excitement about the evolving auto market, stating, “With new competitive EV models and the latest ICE options, we’re able to meet diverse customers’ needs and provide the support they want from their local dealership.”

Toyota continues to dominate the Californian market with 150,964 registrations and a 16.9% market share. California also leads the nation in BEV registrations, with BEVs accounting for 21.4% of sales YTD.

In the first half of 2024, combined sales of BEVs, plug-in hybrid electric vehicles (PHEVs), hybrids, and fuel cell vehicles accounted for 38% of the market share in California, while internal combustion engine (ICE) vehicles made up the remaining 62%.

Despite Tesla’s declining market presence, it remains the second-best selling brand in California with 102,106 registrations YTD. However, the brand’s market share has dipped 2.3 points from last year, and Q2 2024 registrations have fallen 24.1% compared to Q2 2023.

The report also notes regional variations in BEV market share, with Northern California leading at 24.9%, followed by Southern California at 22.1%.





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Wintrust Financial reports earnings miss in second quarter, shares slip 5% By Investing.com



ROSEMONT, Ill. – Wintrust Financial (NASDAQ:) Corporation (NASDAQ: WTFC) reported a second-quarter earnings miss, with earnings per share (EPS) of $2.32, falling short of the analyst consensus estimate of $2.42.

The company’s revenue for the quarter was $591.75 million, slightly above the consensus estimate of $587.31 million. Despite the revenue beat, the earnings miss prompted a 5% decline in the company’s shares.

The financial services company, known for its community banking operations, faced challenges that led to the earnings shortfall. Despite reporting revenue that marginally beat analyst expectations, the discrepancy in EPS has raised questions about the company’s cost management and operational efficiency during the quarter.

Wintrust Financial’s President and Chief Executive Officer, Timothy S. Crane, commented on the results, highlighting robust loan and deposit growth as key drivers of the company’s performance. “We are pleased with our record net income for the first half of 2024 and record quarterly net interest income,” said Crane. However, he noted that the net interest margin decreased by seven basis points compared to the first quarter of 2024, which contributed to the earnings miss.

Wintrust Financial remains optimistic about its financial trajectory, with Crane stating, “We believe we are well-positioned for strong financial performance as we continue our momentum into the second half of the year.” The company’s leadership is confident in their strategy, which includes disciplined expense control and maintaining consistent credit standards to increase long-term franchise value.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.





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Senators seek answers from AT&T in massive hacking of US customer call data By Reuters


© Reuters. FILE PHOTO: The AT&T logo is seen in a store window, as airports around the country are awaiting for Verizon and AT&T to rollout their 5G technology, in the Manhattan borough of New York City, New York, U.S., January 19, 2022. REUTERS/Brendan McDermid/File Photo

WASHINGTON (Reuters) – Two U.S. senators on Tuesday asked AT&T (NYSE:) to answer questions about a massive hacking incident in April that resulted in the illegal downloading of about 109 million customer accounts at the U.S. wireless company.

Senator Richard Blumenthal, a Democrat who chairs a subcommittee on investigations and Republican Josh Hawley, sought details after AT&T disclosed on Friday its call logs were copied from its workspace on a Snowflake (NYSE:) cloud platform covering about six months of customer data from 2022 from nearly all its customers.





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Exclusive-In blow to Biden, Teamsters consider no endorsement in 2024 race By Reuters


By Trevor Hunnicutt and Jarrett Renshaw

WASHINGTON (Reuters) – President Joe Biden is on the brink of failing to win a key labor endorsement as leaders of the 1.3 million-member Teamsters union consider backing no candidate at all in the U.S. presidential race, according to two people familiar with the matter.

The International Brotherhood of Teamsters decision has not been finalized and is expected to be made in the coming weeks.

Not backing Biden, who the union endorsed in 2020, would compound political damage to the Democratic president’s reelection bid.

A Teamsters endorsement for Republican candidate Donald Trump appears unlikely, sources say, but deep internal divisions mean the union may not back any candidate at all. That would mark the first time since 1996, according to news reports.

Since his halting performance in a presidential debate on June 27, Biden has already seen a number of lawmakers and donors ask him to stand aside, worried about his ability to get reelected and to serve another four-year term. Some allies say they believe Saturday’s Trump assassination attempt could quiet those calls, but other Democrats doubt that.

Biden’s team once viewed the Teamsters endorsement as all but inevitable, and still counts a number of senior leaders there as supporters. But months of deteriorating relations and rising concerns about Biden’s political endurance have soured sentiment among some of the leaders at the union, which represents workers in fields ranging from trucking to manufacturing and office work.

“No final decision has been made,” said Kara Deniz, a spokesperson for the Teamsters, adding that any reporting that suggests an outcome is speculative.

Last week, United Auto Workers President Shawn Fain met with that union’s executive board to discuss his concerns over Biden’s ability to defeat Trump.

Teamsters President Sean O’Brien will speak at the Republican National Convention in Milwaukee on Monday night but is not yet scheduled to speak at the Democratic convention in August.

O’Brien reached out simultaneously to the Democratic and Republican national committees to speak at their conventions but only heard back from Republicans, Deniz told Reuters.

A person familiar with the planning of the Democratic convention said no final decisions had been made about their programming.

“We are building a convention in Chicago that will tell our story to the American people, including the stories of labor and union leaders and workers that President Biden has been delivering for as the most pro-union president in modern history,” said convention spokesperson Matt Hill.

BIDEN, CLINTON, OBAMA

The Teamsters, founded in 1903, endorsed Biden in 2020, as well as Democrats Hillary Clinton in 2016 and Barack Obama in 2008 and 2012, though they have sometimes picked Republicans in earlier elections.

The group’s frustrations with Biden’s team have mounted in recent months. On one key priority, rescuing trucking giant Yellow (OTC:) Corp and its 30,000 union jobs from bankruptcy, O’Brien sought and was denied an Oval Office meeting to discuss the issue with Biden, according to one of the people familiar with the matter.

The White House did not respond to a request for comment.

Those frustrations were compounded as some Democratic lawmakers and donors have since the debate called for Biden to drop his reelection bid and open the door for another candidate, another person familiar with the union’s deliberations said.

Working-class groups helped power Biden’s 2020 election victory in closely contested states such as Michigan, Pennsylvania and Nevada.

Union groups encourage their members to vote, volunteer and donate to campaigns, and they form a particularly important source of cash and labor for Democratic presidential campaigns.

In return, they expect policies that increase union jobs, wages and make it easier to collectively bargain contracts with employers. Biden’s gestures have included a $36 billion bailout of a union pension fund that prevented cuts to the income of over 350,000 Teamsters union workers and retirees.

Across many unions, rank-and-file workers are more divided about Democrats than their leadership, and Trump has actively courted workers’ support.

The Teamsters held roundtables with Trump and Biden this year and hosted some 300 local events with workers to gauge their opinions on the race.

Charles Lutvak, a Biden campaign spokesperson, said the campaign had drawn vast union support reflecting Biden’s “record of delivering results for working families while Donald Trump delivers for his wealthy donors and himself.”

© Reuters. U.S. President Joe Biden delivers an address to the nation from the Oval Office of the White House in Washington, DC on July 14, 2024.    Erin Schaff/Pool via REUTERS

He said Biden is “a champion for working people over greedy corporations – whether they vote for him or not.”

O’Brien has said the union would conduct polling and likely make a decision on an endorsement after the parties’ conventions have concluded next month.





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Wall Street dives into Stellantis’ market dynamics By Investing.com


In the highly competitive automotive industry, Stellantis N.V. (EXCHANGE:NYSE:), known for its Ram pickups and Jeep SUVs, has become a major player with global scale, selling over 6 million units annually. With a diverse portfolio that includes luxury vehicles like Maserati, premium brands such as Alfa Romeo and Lancia, and widely recognized names like Jeep, Dodge, Ram, and Chrysler, Stellantis has positioned itself as a major player in the global market.

Financial Outlook and Market Performance

Analysts from BofA Securities have reiterated a “Buy” rating on Stellantis, with a revised price target of €25.00, down from €26.00, while acknowledging the company’s iconic US brands, Ram and Jeep, as underappreciated assets. Despite operational challenges, such as high US inventories and new platform teething problems, Stellantis is expected to undergo a transitional year in 2024, with significant cost savings and a strong product pipeline. The company’s balance sheet remains conservative, with an expected distribution of excess free cash flow linked to a gross liquidity target of 25-30% of revenue. Dividends and buybacks are projected to increase in 2025, with a forecasted FY24E free cash flow of €8.7bn providing ample room for these distributions. Stellantis’ valuation is seen as undemanding at a forward P/E of 3.4x compared to peers, with an attractive combined dividend and buy-back yield projected for FY24-25E.

Stellantis’ strategy of capital discipline, effective execution, and stable communication, especially when compared to peers like General Motors (NYSE:), has been highlighted as a key strength. The company’s share buyback program of €1.5B for the fiscal year 2023 signals strong cash reserves and the possibility of similar actions in 2024.

Conversely, Wells Fargo Securities initiated coverage with an “Underweight” rating and a more conservative price target of €18.00. They cite several industry headwinds that could dampen future prospects, such as price deterioration, the expensive shift to battery electric vehicles (BEVs), a potential decline in pickup demand, and excess global capacity. Despite this, Stellantis’ cost discipline and platform consolidation under CEO Tavares are noted as positive factors.

Adding to the mix, Piper Sandler & Co. has updated their coverage on Stellantis with an “Overweight” rating and a DCF-based price target of $38.00. They favor the company for its differentiated strategy in China and a joint venture with Leapmotor (HK:), a rising Chinese EV brand, which could provide competitive production costs and advanced technology integration. This is seen as a key strategic move for Stellantis, potentially bolstering its position in the global market. The price target suggests a significant upside potential, reinforcing the bullish sentiment around Stellantis’ financial prospects.

Competitive Landscape and Strategic Moves

Stellantis has shown resilience in a market that is rapidly shifting towards electrification. While the company was relatively late to enter the BEV market in the US, its investment in hybrids is seen as a strategic move to comply with regulatory pressures. However, the company must demonstrate its ability to maintain profitability and volumes even in less favorable market conditions. Piper Sandler’s analysis acknowledges Stellantis’ best-in-class margins and large scale as key competitive advantages, but also notes the potential margin pressure due to the increasing mix of EVs.

The company’s recent joint venture with Leapmotor is a testament to Stellantis’ proactive approach to the challenges in the Chinese market, where local manufacturers have cost and technology advantages. This partnership is anticipated to enhance Stellantis’ competitive production costs and facilitate advanced technology integration, potentially offsetting the risks associated with the Chinese market and positioning the company favorably on a global scale.

Upcoming Events and Anticipated Developments

Investors and market watchers are looking forward to Stellantis’ next earnings report scheduled for February 15, 2024, and a Capital Markets Day planned for June 13, 2024, in Auburn Hills. These events are expected to provide further insight into the company’s strategy and outlook.

Bear Case

Why might Stellantis’ stock underperform?

Analysts express concerns over the automotive industry’s challenges, which might impact Stellantis’ profitability. The transition to BEVs, price discipline post-supply chain resolution, and the potential oversupply of vehicles could lead to discounting and margin pressures. Additionally, the possible softening demand for high-profit full-size pickups, a key segment for Stellantis, especially in the US market, could affect the company’s bottom line. Piper Sandler highlights the potential margin pressure from a rising EV mix as a bearish perspective for Stellantis.

Operational challenges such as high US inventories and new platform teething problems, coupled with the transitional period, may affect short-term performance. Market share recovery is contingent on successful model refreshes in the latter half of 2024, according to BofA Securities.

Bull Case

Can Stellantis maintain its strong financial performance?

Analysts note Stellantis’ robust past performance, with adjusted EBIT surpassing €23B in 2022, as a sign of the company’s strong financial health. Under CEO Tavares, the company has exhibited cost discipline and effective platform consolidation, which may continue to bolster its financial results in the face of industry challenges. Piper Sandler’s bullish perspectives reinforce this view, emphasizing Stellantis’ best-in-class margins and strong brand presence with Ram pickups and Jeep SUVs.

The company’s differentiated approach to the Chinese market through its joint venture with Leapmotor is expected to mitigate risks and capitalize on Chinese manufacturing efficiencies, providing a unique advantage over competitors. BofA Securities’ analysis suggests that the strong product pipeline and liquidity position provide earnings visibility even if light vehicle demand remains flat, and the company’s strategic choices are believed to secure its long-term future. Anticipated merger synergies and cost savings could drive further upside.

SWOT Analysis

Strengths:

– Diverse brand portfolio catering to various market segments.

– Strong cost discipline and platform consolidation under CEO Tavares.

– Positive track record of execution and communication.

– Best-in-class margins and large scale with over 6 million units sold annually.

– Strategic joint venture with Leapmotor to leverage Chinese market advantages.

Weaknesses:

– Late entry into the competitive BEV market.

– Potential vulnerability to industry headwinds, including price deterioration and excess capacity.

Opportunities:

– Growth in revenue and EBITDA forecasted through 2024.

– Investment in hybrids could mitigate regulatory pressures and bridge the transition to full electrification.

– Differentiated strategy in China may provide a competitive edge in technology and cost efficiencies.

Threats:

– Changes in demand for high-profit vehicles like full-size pickups.

– Intensifying competition in the BEV space.

– Potential margin pressures as the EV mix increases.

– Risks associated with the integration of the Leapmotor joint venture.

Analysts Targets

– Stifel: “Buy” rating with a price target of €27.00 (November 30, 2023).

– Wells Fargo Securities: “Underweight” rating with a price target of €18.00 (December 11, 2023).

– Piper Sandler & Co.: “Overweight” rating with a price target of $38.00 (May 17, 2024).

– BofA Securities: “Buy” rating with a price target of €25.00 (June 17, 2024).

In conclusion, Stellantis is navigating a complex landscape with strategic maneuvers aimed at sustaining its market position and financial performance. The contrasting views of analysts, ranging from bullish to cautious, reflect the uncertainty and dynamic nature of the automotive industry. The period used for this analysis spans from November 2023 to June 2024.

InvestingPro Insights

Stellantis N.V. (EXCHANGE:STLA) continues to make headlines in the automotive industry, not only for its strategic partnerships and diversified brand portfolio but also for its impressive financial metrics. With a relatively low Price/Earnings (P/E) ratio of 3.12, Stellantis is trading at a discount compared to its near-term earnings growth potential. This low earnings multiple suggests that the company may be undervalued, which aligns with the bullish sentiment of certain analysts who see the stock as an attractive investment opportunity.

The company’s financial prudence is further emphasized by its strong balance sheet, holding more cash than debt. This positions Stellantis well to navigate industry headwinds with financial flexibility. Moreover, the company’s dividend yield stands at an impressive 6.16%, highlighting its commitment to returning value to shareholders.

From an operational standpoint, Stellantis has demonstrated profitability over the last twelve months, with a robust gross profit margin of 20.15% and operating income margin of 12.12%. These figures underscore the company’s ability to maintain healthy margins despite the competitive pressures in the automotive sector.

For investors seeking more in-depth analysis, there are additional InvestingPro Tips available on InvestingPro that could provide further clarity on Stellantis’ strategic positioning and financial health. As of the latest update, there are 9 additional tips available, which can be found on the Stellantis page at https://www.investing.com/pro/STLA.

With the next earnings date set for July 25, 2024, investors will be keen to see if the company’s strategic initiatives and financial discipline will continue to yield positive results, potentially reinforcing the optimistic projections set by analysts.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.





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Boeing begins 777-9 certification flight trials with US FAA By Reuters


By Chandni Shah and Devika Madhusudhanan Nair

(Reuters) -Boeing has started certification flight testing of its long-delayed 777-9 with U.S. aviation regulators onboard, the U.S. planemaker said in an emailed statement.

The company said it conducted its first flight on Friday night after receiving Type Inspection Authorization (TIA).

The development is a boost for Boeing (NYSE:), which has been grappling with production and legal issues since a Jan. 5 mid-air panel blowout on a 737 MAX plane.

The news was first reported by Air Current.

The U.S. Federal Aviation Administration (FAA) while declining to comment on specific certification projects, said “Generally, this kind of thorough process takes many months.”

The 777-9 is part of the 777X project to upgrade the 777 wide-body jet. The project has been in development since 2013 but has faced multiple hold-ups, including certification delays.

Type inspection authorization is typically associated with the start of the certification process, made after the FAA has examined technical data. The milestone allows FAA pilots to participate in flight testing needed to certify the plane for normal operation.

© Reuters. FILE PHOTO: A man passes Boeing model planes on display at the Singapore Airshow at Changi Exhibition Centre in Singapore February 20, 2024. REUTERS/Edgar Su/File Photo

The chairman of Emirates, the plane’s biggest customer, said in May he did not expect the certification before the first quarter of 2025.

Boeing has said that the 777-9 test fleet will undergo the most thorough commercial flight test effort the planemaker has ever undertaken.





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AT&T says data from 109 million US customer accounts illegally downloaded By Reuters


By David Shepardson

WASHINGTON (Reuters) -AT&T said on Friday the company suffered a massive hacking incident as data from about 109 million customer accounts containing records of calls and texts from 2022 was illegally downloaded in April.

The U.S. telecom company said the FBI is investigating and at least one person has been arrested after AT&T (NYSE:) call logs were copied from its workspace on a third-party cloud platform, in a significant breach of consumer communication records.

AT&T’s breach is the latest big hack to hit a wide swath of Americans, coming on the heels of a ransomware attack on UnitedHealth Group (NYSE:)’s Change Healthcare (NASDAQ:) unit in February that hit an estimated one-third of the country whose private data may have been exposed.

AT&T said the compromised data includes files containing AT&T records of calls and texts of nearly all of AT&T’s cellular and AT&T’s landline customers interacting with those cellular numbers between May and October 2022. The data does not contain the content of calls or texts or personal information such as social security numbers.

AT&T shares were down 1.2% in early trading. AT&T had delayed public disclosure of the hack at the request of the Justice Department.

The FBI did not identify any suspects on Friday but said it worked with AT&T and the Justice Department “collaboratively through the first and second delay process, all while sharing key threat intelligence to bolster FBI investigative equities and to assist AT&T’s incident-response work.”

The Federal Communications Commission said it also has an ongoing investigation.

The compromised data also includes records from Jan. 2, 2023 for a small number of customers.

AT&T said it first learned on April 19 that a hacker had claimed to have unlawfully accessed and copied AT&T call logs. The company said its investigation found hackers had between April 14 and 25 unlawfully exfiltrated files containing AT&T records of customer call and text interactions. The records also include AT&T customers of mobile virtual network operators using AT&T’s wireless network.

These records identify telephone numbers with which a wireless number interacted during these periods and aggregate call duration. A subset of records includes one or more cell site identification number.

© Reuters. FILE PHOTO: The AT&T logo is seen in a store window, as airports around the country are awaiting for Verizon and AT&T to rollout their 5G technology, in the Manhattan borough of New York City, New York, U.S., January 19, 2022.  REUTERS/Brendan McDermid/File Photo

AT&T said it has closed off the point of unlawful access and does not believe the data is publicly available.

In March, AT&T said it was investigating a data set released on the “dark web” and said its preliminary analysis showed it affected approximately 7.6 million current account holders and 65.4 million former account holders. The company said the data set appeared to be from 2019 or earlier.





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Culper Research calls out Iris Energy’s misrepresentations and overvaluation By Investing.com



Investing.com – In a research note relased on Thursday, Culper Research cast a shadow over Iris Energy Ltd (NASDAQ:), a firm originally focused on bitcoin mining that is now rebranding as a high-performance computing (HPC) data center operation.

Culper’s analysis suggests that this strategic shift is more superficial than substantive, and the company’s capabilities and potential in the HPC field are being misrepresented.

The report underlines that IREN’s existing facilities, all established before April 2023, are not well-equipped to handle HPC workloads without significant further investment. Furthermore, Culper points out that the company’s co-CEOs, Daniel and Will Roberts, have begun selling their shares as of February 2024, a first since the company’s IPO.

Analysis of IREN’s flagship Childress facility reveals a lack of crucial features for HPC applications, such as backup power or uninterruptible power supplies. IREN’s assertion that its air cooling system will be adequate for GPU clusters in Texas is also doubtful considering the state’s much higher temperatures compared to British Columbia, where IREN has previously conducted GPU tests.

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Culper also criticizes IREN’s financial pronouncements, specifically its claim that its undeveloped land and power agreements are worth between $5 and $12 million per MW, suggesting billions in latent value. The research firm contends that IREN has inaccurately quoted a Morgan Stanley (NYSE:) research note to substantiate this claim.

As a result, according to Culper, IREN’s shares are significantly overvalued compared to both M&A comps and publicly traded peers. If IREN’s shares were valued at a similar multiple to recent M&A deals, such as CoreWeave’s offer for Core Scientific, RIOT’s offer for Bitfarms, and CleanSpark (NASDAQ:)’s offer for GRIID, the share price could be 55% lower.

The research firm believes that IREN’s misrepresentations will eventually be exposed and that the company will continue to be a significant drain on cash.

Using recent public deals in the sector as a benchmark, Culper argues that IREN’s overvaluation is evident. These deals averaged a valuation of $2.5 million per MW. If this valuation multiple were applied to IREN, its share price would fall to $5.75, a 59% decrease from its current price.

In sum, Culper Research’s report implies that IREN’s market valuation is considerably inflated, with analysis suggesting that the company’s worth could be 52% to 79% less than its current market price based on a sum-of-the-parts basis.





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