PortfolioOS

m0xt Verified account @m0xt_ · Jul 7

GLXY is my largest position. I think it hits $50 within 12 months.

I built a full sum-of-the-parts (SOTP) model across three scenarios: bear $34, base $50, bull $66. Every assumption is below so you can stress test it yourself.

The stock trades at $24. Here's why I think the market is wrong.

Helios Phase I+II (393MW contracted)

I value this segment at $15.1B in the bear case and $19.2B in the bull case. These are enterprise values, meaning what this business would be worth as a standalone company before subtracting debt.

Tenants signed (CoreWeave), power secured, revenue locked on 15-year contracts. I value this at a multiple of its annual EBITDA (earnings before interest, taxes, depreciation, and amortization, essentially the cash profit the business generates each year). I use 22x in the bear (multiple compression from higher rates), 25x in the base (current peer range for contracted AI infrastructure like CoreWeave and Applied Digital), and 28x in the bull (AI demand premium, rate cuts). In other words, in the base case I'm saying this business is worth 25 times its annual cash profit. The cash flows don't change across scenarios because they're contracted. The multiple the market assigns to them does.

Phase III (133MW under construction)

Valued at $3.3B (bear) to $6.3B (bull). Same approach: annual EBITDA times a multiple, but with a wider range because this isn't generating cash yet. I use 14x in the bear (construction delays, cost overruns, pre-revenue assets get punished hardest in downturns), 20x in the base (on-track construction, reasonable discount to operating peers), and 27x in the bull (delivered on time, multiple nearly converges with Phase I+II as risk disappears).

Pipeline (Helios + Merlin Ranch)

Valued at $3.0B (bear) to $11.0B (bull). This is future buildout optionality. Construction hasn't started and won't until Phase III is done. But Galaxy owns permitted, grid-connected sites where new power interconnections take 3-5 years to secure. That land and those permits have real value today even before a shovel hits the ground.

- Bear: $3.0B
Development rights value plus modest buildout probability.
- Base: $6.5B
Majority buildout over 3-5 years, second tenant on similar terms.
- Bull: $11B
Full buildout, strong demand. Still a 50% discount to what the pipeline would be worth fully built and contracted.

Over a 12-month horizon, Phase III construction progress and the second tenant announcement are the primary catalysts that close the gap to fair value.

Digital Asset Operations

Valued at $0.3B (bear) to $4.0B (bull). Galaxy has built the most complete institutional crypto platform on a public exchange: $5B in assets under management, 1,700+ counterparties, full-service OTC trading, derivatives, structured products, lending, and advisory.

- Bear: $0.3B
Liquidation value in a crypto winter.
- Base: $2.0B
About 6x net revenue in a typical year for a healthy crypto market.
- Bull: $4.0B
Peak cycle volumes and AUM growth.

Crypto Portfolio

Valued at $0.8B (bear) to $3.0B (bull). Galaxy holds $1.3B in digital assets today, primarily BTC and ETH plus venture positions.

Bear: $0.8B
About 40% drawdown from current, venture marks compress.
- Base: $1.75B
Continued cycle, BTC toward $120-$130K.
Only 35% appreciation from current marks.
Bull: $3.0B
Full cycle plays out, venture positions reprice.

What I subtract: Project Debt + Net Treasury

I add up all the segment values above, then subtract what Galaxy owes. Project debt is non-recourse (meaning it's tied to the data center assets, not Galaxy as a company): $5.5B for Phase I-III. Pipeline debt scales with buildout ($0 bear, $4B base, $9B bull). Net treasury after corporate debt and cash: negative $2.3B

Dilution: 10% bear, 5% base, 3% bull

Galaxy has diluted shareholders aggressively in the past, nearly doubling share count since 2021. In the bear, I assume they tap equity markets again. In the bull, strong cash generation limits the need. I divide the total equity value by the diluted share count to get the per-share price target.

Here's the base case math all the way through: $17.1B + $4.7B + $6.5B + $2.0B + $1.75B = $32.05B in total segment value.
Subtract $5.5B Phase I-III debt, $4.0B pipeline debt, and $2.3B net treasury.

That leaves about $20.3B in equity value. Divide by diluted shares after 5% dilution and you get $50/share.

After dilution: bear $34, base $50, bull $66.

Here's what's wild. Helios Phase I+II contracted value alone, after subtracting all project debt and treasury, covers most of the current stock price.

At $24, you're paying almost nothing for Phase III under construction, the entire pipeline, an institutional crypto platform with $5B AUM, and $1.3B in digital assets.

The market prices Galaxy as a crypto proxy. The SOTP says it's contracted power infrastructure with crypto upside attached for free.

The next catalyst: Galaxy is expected to announce a second contracted tenant this summer. If the terms match CoreWeave's, this model gets repriced overnight.

I share all my positions and thesis updates in real-time at Milk Road PRO. You can join today at 33% discount (link in bio).

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