Episode Details

TeraWulf Inc. (WULF) Q2 2026 — Revenue $44.8M, DOWN 6.0% YoY, against a $46.0M FactSet bar. HPC lease revenue $31.9M - 71% of the top line, up from ZERO. Bitcoin mining revenue $12.8M, down 73%. GAAP diluted EPS -$1.94 vs a -$0.31 bar, but $755.7M of the $939.9M net loss is a non-cash warrant mark; ex-warrants it is -$0.36. Adjusted EBITDA -$18.3M, negative for the first time. Stock -1.8% to $18.55. TeraWulf signed a 20-year, ~$19 billion lease with Anthropic on July 6 - roughly twice its market capitalisation in contracted revenue. The stock closed at $22.21 that day. It is $18.55 now, 36% below the June high. THE CALL: AVOID (4/5, A REAL ASSET, A GREAT CONTRACT, AND A PRICE THAT BANKED THE NEXT ONE) — base-case value ~$11.75 vs ~$18.55 today. KEY METRICS: - CALL: AVOID 4/5, fair value ~$11.75 vs $18.55 (-37%), far BELOW the Street's $38.50 (+108%). We value it as a landlord, not on earnings - there are none. The 839 MW contracted (438 MW Lake Mariner + 401 MW Justified) produce ~$1,740M of stabilised 2028 lease revenue, ~$1,218M of NOI at a 70% margin, less $150M of corporate overhead and ~$550M of cash interest on ~$7.3B of debt = ~$518M of levered free cash flow. Bear $2.85, bull $19.80. - THE $755.7M LOSS IS GOOGLE'S PENNY WARRANTS, TO THE DOLLAR. TeraWulf issued Google warrants over 73,580,000 shares at a $0.01 strike for the Fluidstack backstop, so the warrant liability IS the share price times 73.58M. Dec 31: 73,580,000 x $11.48 = $844,698k - the balance sheet exactly. Jun 30: x $24.69 = $1,816,690k - again exactly. The difference, $971,992k, is the six-month charge. None of it is operational. - AND THE NEXT PRINT RUNS IN REVERSE. The stock has fallen from $24.70 to $18.55, so on the same arithmetic Q3 carries a non-cash GAIN of roughly $452M. The headline will likely read 'TeraWulf swings to a profit'. It will not be a profit - it will be the share price falling, booked as income, with the cash position unmoved. - DILUTION IS THE STORY MOST COVERAGE MISSES. Shares outstanding went from 420,065,944 to 498,932,431 in six months - up 18.8% - funded by $1,199.8M of stock sold net. Screens show a $9.25B market cap; the true fully diluted figure is $10.62B on 572,512,431 shares once Google's penny warrants are counted, and the 2030/2031 converts strike at $8.48 and $12.43. Total liabilities $7,900.9M against $147.5M of book equity. - WHAT $18.55 REQUIRES. Every contracted megawatt creates about $11.7M of value (~$20.7M of asset value for ~$9M of build cost). The 839 MW signed is worth ~$4.1B to shareholders today; the equity is priced at $10.62B. Grossed up over four years at 12%, the $6.5B difference implies 869 MW of brand-new contracts at full value with no risk discount - a third of the 2,570 MW uncontracted pipeline, banked in advance. What to watch: Changes our mind UP: a second hyperscale lease at Muskie or Chesapeake, or project debt on Justified raised WITHOUT new equity. Confirms the bear: another equity raise above $1B, a slip in CB-4 or CB-5 rent commencement, or data-centre operating margins still under 50% once 438 MW are live. We would buy $9-$12. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.