$IREN & $NBIS: It’s Not $10B, It’s What $10B Unlocks

I think there is a fundamental misunderstanding about the purpose of Neo-Cloud $IREN Ltd(IREN)$ and $NEBIUS(NBIS)$ capital raises.

It's not about what IREN and NBIS can directly do with the $6B and $4B raises, but what they enable.

To build a data center, companies use:

- Customer Pre-Payments

- Bank Financing

- Vendor Financing

- Revolving Credit Lines

- Asset Backed Loans

However, these funding sources rarely cover 100% of the costs, companies need the remaining 10-20% in cash.

Moreover, customers won't pre-pay, banks won't provide financing, vendors won't delay payments, and creditors won't take assets as collateral if you are broke.

All funders must have the trust that you will keep your end of the bargain, and for that, some cash is needed.

This misunderstanding led to investors doing the wrong calculations.

They do the math of how many MW of compute IREN and NBIS can build with this money using some basic formula, let's say $40M per MW.

Conclude that they can build only 150MW and 100MW, and declare these equity raises stupid.

What they are missing is that this funding is the last crucial 10-20% cash piece, enabling a much larger deployment.

Without this missing piece, large-scale deployments wouldn't be possible.

So, is it really economically dilutive to rase $6B and $4B when this capital enables you to get even more capital, to build high-quality assets with favourable long term demand trends?

Fundamentally, it always comes back to the trust in the management.

Do you trust the management to deploy this capital in a way that will achieve strong long-term returns on invested capital?

If you don't, then you should stay out of these stocks.

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