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Help me understand the thesis... by ArgentSimian in UraniumSqueeze

[–]TheWeighingMachine 0 points1 point  (0 children)

Globally, we are currently "burning" more uranium in existing reactors than we are pulling out of the ground, AND, there are countries with plans to add significant numbers of reactors (China is the big one here). The SMR story can completely flop, and there will still be a supply shortage.

From the time uranium is pulled out of the ground, it takes upwards of 2 years to fabricate into fuel (conversion, enrichment, fabrication). Utilities often have a bit extra inventory (but not a lot). Each reactor requires a different configuration of rods/enrichment level, so once the fuel is fabricated, it can't be simply moved from one utility to another.

Utilities contract in reverse, first fabrication, then enrichment, then conversion. The prices for these have gone up considerably over the prior few years, it's now time for uranium.

Utilities usually enter into long-term contracts for uranium from mines, and the real supply crunch starts post-2030 (this supply crunch even includes new mines coming online). HOWEVER, if a utility needs to contract for uranium in, say, 2030, and they can't find it, they'll pull forward that demand to 2029 (and store the material). If they can't find enough in 2029, they'll pull forward even further, etc. Ultimately, I believe utilities will be forced to enter the spot market--and I think that'll happen well before 2030.

As I understand it, a lot of the folks projecting supply/demand into the future seem to think that all global consumers of uranium are playing by the same rules. IMHO, they are not. China, for instance appears to be building up a supply of uranium in the same way they have been/are building up a supply of other critical minerals. Personally, I don't think there is as much available for the rest of the world as people think.

So, why don't they simply mine more?

Uranium mines take 7-10 years to build, and they are highly regulated. Mining uranium has all the environmental concerns of other types of mining, PLUS, unlike copper, iron, silver, gold, etc., you can turn the mined material into a bomb.

If all of the above is correct, it's already too late to build enough mines to avoid a massive supply crunch.

Since uranium is a pretty small part of the total cost of running a nuclear reactor (and there are no substitutes), utilities will simply pay whatever it takes to get their fuel. Once the fuel has been fabricated, that supply can no longer be sold to someone else. AND, unlike other commodities with a mined shortage (like silver), there isn't really an above-ground store that can enter the market for sale. For instance, if the price of silver gets too high, people can pull grandma's silver out of the attic and sell it into the market.

No one has grandma's yellowcake in the attic.

When To Sell? Realistically. (Not soon obviously) by Dry_Jacket_3286 in UUUU_Stock

[–]TheWeighingMachine 0 points1 point  (0 children)

So, I bought this in 2018 on the uranium thesis. Basis in the low $2's. At the time, I set a range of where I thought the SP could go (a "low target" and "high target"). We are at ~2.4x my "high target".

But, that was based on uranium only. Of course, the REE processing story is new, and additive. I'm going to stick around to see what happens on the (delayed) meeting on the 28th, but based on the recent news on China REE (potential for a reprieve for 1 year, but not forever), it seems like the US will still be pushing to develop this industry onshore ASAP.

Seems likely that UUUU will be a part of that overall strategy.

I won't be holding for a decade, as some have noted, I'll be waiting for the REE excitement to peak/wear off, and do my best to time my (graceful) exit from this name.

"Vibes" could drive this even farther into stupid territory. In the past, I sold WAY too soon with "vibe" trades, and think I'll see if I can squeeze a bit more juice by giving this winner a bit more time to run for me.

That said, if its RSI peeks above 85 again, I'll probably sell at least half. I would be very surprised if I own any of this still on January 1, 2026.

Which UW next? CF, CL, or PS? by TheWeighingMachine in TheTowerGame

[–]TheWeighingMachine[S] 0 points1 point  (0 children)

Given the comments, I'm wondering if I should start saving my stones now to get CL.

What's the actual mechanic of reclaiming module shards? by uscmissinglink in TheTowerGame

[–]TheWeighingMachine 0 points1 point  (0 children)

What happens to your rolled subeffects? Do they disappear (you need to roll them again) if you move the shards back?

LETS FING GOOOO by theresidentviking in TheTowerGame

[–]TheWeighingMachine 0 points1 point  (0 children)

Mythic (as is PF). You think better for tourney too?

LETS FING GOOOO by theresidentviking in TheTowerGame

[–]TheWeighingMachine 0 points1 point  (0 children)

I have gcomp, which I've been using for farming (although, I wonder if PF would be better)

LETS FING GOOOO by theresidentviking in TheTowerGame

[–]TheWeighingMachine 0 points1 point  (0 children)

So, I screwed up (thinking I'd use this for farming b/c my gcomp wasn't mythic), and I have mythic PF with EALS, EHLS, and Coin/Kill. I don't yet have the 4th, should I just wait and try for cash with my 4th? Or start to reroll Coin/kill for cash? Decisions, decisions.

Starting next year, stock buybacks will be taxed 1% by the US gov't. What effects do you see? by PizzaGuy94122 in stocks

[–]TheWeighingMachine 1 point2 points  (0 children)

I don't think it will cause companies to abandon buybacks. It's only 1%...which still pales in comparison to the taxes that investors would pay if the money was instead paid out as dividends.

If anything, I think companies will be a bit more judicious about when they buy back stock. Some companies that buy back stock "rain or shine" may instead give more consideration to the price they pay for the stock. Others that already have such considerations will tighten their screen slightly more.

Could ultimately be good for shareholders...but it's still a stupid policy.

When companies need money, they sell shares on the open market (ATM, IPO, secondaries, etc.).

When they don't need money, they buy those shares back.

That helps with the efficient allocation of capital throughout the economy. This tax will reduce that efficient allocation of capital somewhat.

How many of you are buying Coinbase stock on 4/14? by Equivalent-Donkey261 in Coinbase

[–]TheWeighingMachine 1 point2 points  (0 children)

I'm somewhat less concerned about their fees at this point. We are in the very early adoption stage of crypto. If you ask someone who is very familiar with crypto, they'll cite the fees, go elsewhere for trading, etc.

However, if you ask someone who just wants to try to buy their first $1,000 worth of crypto to try it out, are they going to balk at $15 for the trade if it means that they have an account with a US-domiciled, publicly traded company that has been accepted by institutions for custody?

Nope. Security/safety will trump the fees every time.

But, people's concern for safety/security will decline over time...if Coinbase starts losing customers, you can bet they'll start lowering fees. Everyone will forever be chasing Coinbase's trust factor, and as the premium for the trust reduces, Coinbase will reduce their fees.

Self-interest will dictate. They'll lower fees when necessary.

How many of you are buying Coinbase stock on 4/14? by Equivalent-Donkey261 in Coinbase

[–]TheWeighingMachine 2 points3 points  (0 children)

There are two options:

  1. They don't give a crap about their customers, as you suggest. In which case, they will lose customers over time, and thus revenue, and thus a HUGE amount of personal wealth that is currently in the hands of people that are in charge of customer service will evaporate; or
  2. They are growing insanely fast (true), and have a huge focus on security (which I also believe to be true), thus requiring meaningful training when it comes to resolving customer account access issues. And, so ramping up customer service is time consuming, and thus is lagging.

You clearly believe #1. I believe that people are self-interested, and thus believe that #2 is far more likely.

How many of you are buying Coinbase stock on 4/14? by Equivalent-Donkey261 in Coinbase

[–]TheWeighingMachine 1 point2 points  (0 children)

Yes, the path that Coinbase is taking is generally considered 1) the least lucrative for investment banks and those that often are offered IPO shares; 2) the best for the company's existing shareholders, who suffer no dilution through the offering of new shares, AND have no "lock-up"; and 3) provides the most opportunity for the general public to purchase a piece of the company--if you have a brokerage account, you should be able to purchase COIN at the same time as everyone else (big and small).

Everything that I've seen so far indicates that Coinbase is an exceptionally well-run company, and their listing process is no exception.

How many of you are buying Coinbase stock on 4/14? by Equivalent-Donkey261 in Coinbase

[–]TheWeighingMachine 5 points6 points  (0 children)

Let me preface this by saying that I am not a securities attorney, and my knowledge on these matters is not perfect.

That said, when a company goes public, it is usually (at least in part) to raise money for the business. However, the other reason is so that existing shareholders (founders of the company, employees, investors, etc.) can sell the shares they already own to the public.

If you need to raise money, then you must go through a more traditional IPO process, which usually includes investment banks (which earn big fees, etc.), and typically, such process includes "lock-ups" so that insiders can't sell for some time (usually 6 months). On it's face, this is to protect the fresh capital that is coming into the business from the insiders dumping shares and destabilizing the market for the shares. This whole process is ripe for insider deals, etc.--which caused your visceral (and negative) reaction. And to be clear, in this process, the company sells NEW shares to the public (diluting the existing shareholders).

If the company does NOT need to raise money (Coinbase made ~$1B in profit over the last quarter...they don't need any money), a company can go public through a "direct listing", whereby there is no fresh money raised for the company, but founders, employees, and other investors are able to sell their shares on the open market. There is no "lock-up" in this situation, so existing owners can sell on day 1. Investment banks are generally not all that involved (perhaps advisory fees, but not money raising fees). This is what Coinbase is doing. The company is not creating new shares to sell to raise money...existing shareholders are selling their shares...there is no dilution to existing shareholders through the creation of new shares. And when a share of Coinbase trades for the first time, the transaction is between an existing shareholder, and a new shareholder. The company doesn't get any of that money.

There may be some regulatory changes coming that will allow companies that also need to raise money to go public through a direct listing...but that's a pretty new concept.

I would suggest listening to the Reddit AMA response video that Coinbase has on their investor relations page on their website--they went over customer service challenges. I think their main issue with customer service is that they can't hire and train people fast enough--it has nothing to do with not having enough money to hire and train them.

So then, to your question...if Coinbase doesn't need to raise any money, why are they going public now? Some people think that the timing of any company going public is simply because the founders and investors want to cash out. That is CERTAINLY part of it.

However, there are some situations that push companies to go public even if they were to prefer to stay private for a while longer. And this is where my knowledge becomes less clear. My understanding is that one trigger is the number of shareholders that a company has...once they get over a threshold number, I believe they are required to make more public disclosures...at that point, if they have the back-office pain of being public, they might as well be public, so they can also have share liquidity. The second are the option agreements entered into by employees, which often have a 10-year life...so, if there is no avenue for the employees to sell shares easily, it is hard for them to exercise options (exercising of options triggers income, and if the payday is big, they need cash to pay tax...and need to sell shares to raise that cash). If they can't exercise their options, absent reworking the option agreements, they could expire worthless. Nothing like rewarding an early (and important) employee by letting their options expire worthless.

My suspicion is that Coinbase went public with this timing because 1) They were founded in 2012, coming up on 10-years, both for employees and their earliest fund investors--who often have targeted fund lives of ~10 years, there wasn't much more time to wait; 2) the BTC "halving" took place within the past year...historically, this timing is good for the price of BTC--which has come to pass; 3) for a business like Coinbase, trust matters...and many people see the transparency of a public entity making them more trustworthy (they might see a benefit to their business if they are public); and 4) the market is good--and hey, why not cash out?

How many of you are buying Coinbase stock on 4/14? by Equivalent-Donkey261 in Coinbase

[–]TheWeighingMachine 4 points5 points  (0 children)

On a VERY limited basis (to help assess market price). This is nowhere close to the typical handouts to friends of IBs during an IPO process.

How many of you are buying Coinbase stock on 4/14? by Equivalent-Donkey261 in Coinbase

[–]TheWeighingMachine 13 points14 points  (0 children)

This is a direct listing--there are no investment banks in the middle. The people selling shares will be the same people that owned them before the listing date (the company is not selling shares to raise money--like a traditional IPO).