Why I'm shorting QumulusAI

I'm drunk after the England-Argentina game so forgive the verbal diarrhoea but I want to get this out before I go to bed.

QumulusAI have announced tomorrow they will begin trading via their direct listing.

https://www.qumulusai.com/articles/qumulusai-to-begin-trading-tomorrow-on-the-nasdaq-global-market-under-ticker-symbol-qmls

Safe to say, barring something truly remarkable, the SONM reverse merger is dead, and I was obviously wrong. That said, I still think the SONM shell will print regardless for reasons I've already explained in other posts/comments.

With every life experience, there are lessons to be learned. And I've learned a lot about QMLS having followed them since September last year.

To put it bluntly: this company is broke after years of mismanagement, and the fact it is going through with the direct listing tells me it has no idea what it's doing.

They have just financially castrated themselves by committing to this direct listing. My suspicion is that certain individuals with a financial interest in the company going public (i'm not naming them, but you can find out who I'm talking about if you look deep enough in the prospectus) have strong handed the founders who own more than 10% to agreeing to this. And the founders are two crypto bros who used to mine bitcoin and know shit about fuck when it comes to AI if you look at their backgrounds.

But more to the point: QumulusAI have put out a massively misleading $300 million ARR forecast. They would need something on the order of 10,000 to 20,000 GPUs to hit these figures depending on utility %, and they would need between $500 million and $1 billion to finance the GPUs that would be needed to produce those kind of numbers.

To put it simply: these guys have no money. If they had financing in place, it would've been declared in the prospectus. They only made $3 million last quarter. You do not 100x your revenue within 6 months without clarity on financing.

All this to say: tomorrow's direct listing is a liquidity event. Every single sub 10% holder, which amounts to over 50% of the company's shareholders in total, will be able to sell from Day 1 and probably will sell at some point in the near future. Meanwhile, the two founders who own 16% each will be locked up for the next 6 months and be left bag holding by the time they can sell as well.

If you want to get an idea of what the graph could look like, take a look at Arrive AI who direct listed last year or reAlpha tech.

The entire merger thesis was predicated on the idea that QMLS was pursuing a public vehicle that they could leverage the public vehicle to raise capital via an equity raise + thin 1 million float. The direct listing has neither of these characteristics. Some 20+ million shares will be available to trade on Day 1.

QumulusAI is about to get wrecked.

Markets

Good evening, everyone. We’ve been stuck in the $60,000 range for Bitcoin since February, yet some hotheads are urging people to buy at current levels. Let me state right off the bat that I am a Bitcoin maximalist and a bear.

Let’s take things in order. We saw Bitcoin hit $60,000 out of the blue, even before the events in Iran. At the time, the stock market was rising daily, and gold was performing well. In other words, against the backdrop of a bull stock market, the price of Bitcoin fell by 50 percent (literally within a couple of months of its October peak at $126,000). Gold dropped 30%. Yet the stock market continues to break all records. We recently hit a new local low for Bitcoin at $57,000, and this happened against the backdrop of a rising stock market.

Some argue that we have been in an accumulation phase since February, but in my opinion, this is distribution. I expect the Bitcoin bottom to be in the $31,000–$35,000 range. This gives you an idea of just how crazy it is to buy Bitcoin at $65,000 today.

A new market model and cycle structure has emerged based on the 2022–2023 period specifically, when the bottom was established in October 2022 and the entire following year was characterized by growth accompanied by accumulation. As for the altseason, it occurred precisely when Bitcoin hit its bottom and dominance was low. Recall the rise of APT from $3 to $20, Solana’s surge from $8 to $20, and so on.

I expect the same pattern to repeat this time: we will see bottoms for Bitcoin, altcoins, and stocks in the autumn. By the spring of 2027, Bitcoin will rise to $60,000 before crashing to $45,000, followed by a period of accumulation lasting until the autumn of 2027, at which point a new bull market will begin.

A stock market crash will occur, wiping out trillions of dollars in market capitalization. We will fall to March 2025 levels (driven by Trump’s tariffs, which sent the S&P 500 plunging to 4,900 points). I expect gold to reach $3,300 per ounce it might go lower, but there is no point in guessing.

Hang in there and be patient. During an apocalypse, everyone rushes to the US dollar, not to gold or crypto. The dollar is the only safe haven.