“A brutal few days across the AI infrastructure sector, and TeraWulf WULF$12.61·Market Closed has been no exception,” tweeted company CEO Paul Prager earlier this afternoon.
After speaking with a group of investors organized by Morgan Stanley yesterday, Prager summarized some of the issues and his responses.
Among them were the questions about the effect of high interest rates.
“Our customers are investing billions in compute to generate substantial economic returns,” said Prager. “The cost of delaying that capacity can far exceed the incremental cost of financing it today.”
“That's why financing costs are central to our lease negotiations and, where contractually provided, borne by the tenant … Higher rates matter. But so does the value of time. Our job is to protect the economics.”
“At Lake Mariner, we're advancing CB4 and CB5 toward their planned Q4 and Q1 deliveries. And our construction costs remain squarely within guidance. We're currently tracking ~$9 million per critical IT MW at Lake Mariner, within our $8–10 million guidance range.”
WULF is higher by 9.2% today, but still lower by 9% over the past five days.
It was late August when then-newish Fed Chair Kevin Warsh surprised markets with his hawkish Jackson Hole speech, setting up a rate hike a few weeks later.
The 10-year U.S. Treasury yield was at about 4.65% when Warsh gave that speech and rose to 5.30% by early October.
The Fed chair speaks again tonight (11:30 pm ET), and yields have tumbled in the past two days despite two very troubling inflation reports.
It’s possible that Warsh goes with the flow and eases back on the hawkish rhetoric, given recent equity market stumbles. However, thanks in part to those two poor inflation reportss, it seems more likely Warsh will reiterate his hawkish position, setting markets up for multiple rate hikes in coming months.
“Warsh has no choice tonight, he has to sound even more hawkish than at Jackson Hole,” said one trader. “Fresh off hot CPI and PPI, anything soft will be read as surrender.”
Source
This article is syndicated for educational reading. For the latest updates, visit the original publisher.
Read on coindesk.com
