My honest point: bad governance optics, not thesis death. It damages trust, but it does not change the power portfolio, NVIDIA relationship, Microsoft contract, or AI factory strategy. The board deserves criticism. Management now needs to repair this with execution
Incentive comp should always be simple to understand and its motives clear. Ball is dropped here, and board got lazy. Iβve seen it many times. Doesnβt impact the thesis, but itβs not a good look and the board shouldβve done a better job. This is incentive comp, not rewarding for the past.
In my understanding the payout to the co-CEO founders with stock price say 300 in 2032 is significantly higher than it would be if the stock was say 30.
So even they get paid big money only by showing up, they will get paid much bigger money by delivering
Thanks Agrippa for this insightful piece. I think as an IREN shareholder you already have to accept share dilution as a fact of life, which isn't for everyone. If you come to terms with that, I firmly believe that the bare minimum management can do is to maintain the highest governance standards if they don't want to lose the trust of the very shareholders they need to keep diluting for the survival of the company in the long term...that means crystal clear comp plan and incentives that nobody would dare to challenge because nobody would question the genuine intentions of the brothers...that is definitely NOT what is at play here and most of us myself included that are willing to hold on and see what happens next will sell all or part of our shares at the first possible occasion. Sad.
I agree. From a long-term investment perspective, the current outcome may not be the best possible one, but it was likely the most reasonable one available. We have to account for human imperfection.. founders are human too, and their interests can't simply be dismissed. That said, when viewed through a long-term lens, this structure does a reasonable job of aligning the interests of founders and shareholders. I also agree that optimizing purely for hitting a short-term target, at the cost of long-term value, is never the right direction.
Thanks, Agrippa. This is very helpful. BTW... the market seems to agree with you. The losses of the last two days of the week were equivalent to those of similar companies in the AI infrastructure sector. IOW, the market did not punish the company for these grants.
Do you get paid to promote bull case argument irrespective of what the news and its implication is?. Totally lost respect and feel betrayed with your analysis..
Hi Agrippa do you feel like behind the scenes maybe they have some big deals/ huge announcements thatβs why the board justified this kind of stock compensation plan?
Fuck the Robertβs brother, what does Will even do. iPO,d at $28. Price 5 years later $38 but those two bankers are billionairesβ¦. Yeah thatβs actually not delivering shareholder value. Thatβs delivering yourself value at the expense of those that pay for your as it currently stands huge loss making self wealth generation machine.
That IPO comparison only works if you ignore everything in between. The stock did a round trip through $1 in 2022 and the founders didn't sell a share through that either, while the business underneath 10x'd in scale. Anyone who bought below $10, where IREN spent most of its trading history, is up multiples. The IPO print is nearly one of the least flattering starting points you could pick.
It is a very well put point that the fortunes of the founders are now tied to the stock price. That does give shareholders some solace. However, some decisions like sponsoring Golden State Warriors draws the ire of many investors. The thesis is intact, the opportunity is plenty, but the questions hanging over the management will only go away with flawless execution. For now, we remain long $IREN
They should have pursued a less dilutive alternative: extending the life of the Class B shares. But that would have given them control, not new economic wealth. What they did with the RSUs does not appear to be primarily designed to protect control; it appears designed to ensure that the founders capture a much larger share of the economic upside if IREN becomes a $50 billion, $100 billion, or larger AI infrastructure company.
And that is the uncomfortable part: for common shareholders, extending the Class B structure would have been worse from a governance perspective, but better from a dilution perspective. The RSUs are worse from a dilution perspective, but less permanent in terms of control.
They chose Wealth and Control in exchange of dilution. Damaging all the shareholders trust, only thinking much more on their personal pocket. The governance is a complete disaster.
IREN still may generate a lot of future profit as a business, I have no doubt, but how much will be trickled down to investors is the question. I expect more of the same in future from the two brothers to strip away future profits purely for own benefits. I have no evidence this will be the case, but also no confidence either this is not the case. IREN should have remained as a private business, and no business as a public company when accountability is absent. I am out.
I like Agrippa's analysis, but the GS sponsorship and CEO stock grants back to back is damaging. IREN just convinced Nvidia that $70 option pricing as fair, but turn around gave the two brothers $0 option pricing, one of them has to true, which one?
Promoters like Agrippa rarely shift their thesis when management breaks promises or shows they have no clue how to communicate their vision because their entire brand, follower base, or financial position is tied to the stock going up. When management does something contradictoryβlike saying they don't need marketing and then buying a marketing agencyβpromoters will immediately spin it as "genius vertical integration" rather than a broken promise. Agrippa is a 1 trick IREN pony who will justify any move by IREN. There are a few others out there as well, so be wary of people's motives. Clearly management are clowns. We are bare metal so the next week they buy a software company. We don't need marketing, we have NVDA - the next week they buy a marketing company and then pay for the sphere and now GSW jersey's. The IREN CEO's are getting paid more than the MSFT CEO but somehow it gets twisted that this is the in the best interest of shareholders, what a joke! NBIS has executed much better and shown that the software stack advantage is real. They actually sign deals and have much less dilution. Hard to have any faith in crypto bros like Mike Alfred or the dilution brothers at this point.
My honest point: bad governance optics, not thesis death. It damages trust, but it does not change the power portfolio, NVIDIA relationship, Microsoft contract, or AI factory strategy. The board deserves criticism. Management now needs to repair this with execution
Cut the AI slop.
Incentive comp should always be simple to understand and its motives clear. Ball is dropped here, and board got lazy. Iβve seen it many times. Doesnβt impact the thesis, but itβs not a good look and the board shouldβve done a better job. This is incentive comp, not rewarding for the past.
In my understanding the payout to the co-CEO founders with stock price say 300 in 2032 is significantly higher than it would be if the stock was say 30.
So even they get paid big money only by showing up, they will get paid much bigger money by delivering
Precisely :)
Thanks Agrippa for this insightful piece. I think as an IREN shareholder you already have to accept share dilution as a fact of life, which isn't for everyone. If you come to terms with that, I firmly believe that the bare minimum management can do is to maintain the highest governance standards if they don't want to lose the trust of the very shareholders they need to keep diluting for the survival of the company in the long term...that means crystal clear comp plan and incentives that nobody would dare to challenge because nobody would question the genuine intentions of the brothers...that is definitely NOT what is at play here and most of us myself included that are willing to hold on and see what happens next will sell all or part of our shares at the first possible occasion. Sad.
I agree. From a long-term investment perspective, the current outcome may not be the best possible one, but it was likely the most reasonable one available. We have to account for human imperfection.. founders are human too, and their interests can't simply be dismissed. That said, when viewed through a long-term lens, this structure does a reasonable job of aligning the interests of founders and shareholders. I also agree that optimizing purely for hitting a short-term target, at the cost of long-term value, is never the right direction.
Thanks, Agrippa. This is very helpful. BTW... the market seems to agree with you. The losses of the last two days of the week were equivalent to those of similar companies in the AI infrastructure sector. IOW, the market did not punish the company for these grants.
Do you get paid to promote bull case argument irrespective of what the news and its implication is?. Totally lost respect and feel betrayed with your analysis..
doesn't seem that you read the post
Hi Agrippa do you feel like behind the scenes maybe they have some big deals/ huge announcements thatβs why the board justified this kind of stock compensation plan?
Fuck the Robertβs brother, what does Will even do. iPO,d at $28. Price 5 years later $38 but those two bankers are billionairesβ¦. Yeah thatβs actually not delivering shareholder value. Thatβs delivering yourself value at the expense of those that pay for your as it currently stands huge loss making self wealth generation machine.
That IPO comparison only works if you ignore everything in between. The stock did a round trip through $1 in 2022 and the founders didn't sell a share through that either, while the business underneath 10x'd in scale. Anyone who bought below $10, where IREN spent most of its trading history, is up multiples. The IPO print is nearly one of the least flattering starting points you could pick.
Agrippa! Another great one, thank you for your continued work.
Sometimes, what you need is a dictator β someone who wonβt be held back by the interference of ignorant masses.
It is a very well put point that the fortunes of the founders are now tied to the stock price. That does give shareholders some solace. However, some decisions like sponsoring Golden State Warriors draws the ire of many investors. The thesis is intact, the opportunity is plenty, but the questions hanging over the management will only go away with flawless execution. For now, we remain long $IREN
They should have pursued a less dilutive alternative: extending the life of the Class B shares. But that would have given them control, not new economic wealth. What they did with the RSUs does not appear to be primarily designed to protect control; it appears designed to ensure that the founders capture a much larger share of the economic upside if IREN becomes a $50 billion, $100 billion, or larger AI infrastructure company.
And that is the uncomfortable part: for common shareholders, extending the Class B structure would have been worse from a governance perspective, but better from a dilution perspective. The RSUs are worse from a dilution perspective, but less permanent in terms of control.
They chose Wealth and Control in exchange of dilution. Damaging all the shareholders trust, only thinking much more on their personal pocket. The governance is a complete disaster.
IREN still may generate a lot of future profit as a business, I have no doubt, but how much will be trickled down to investors is the question. I expect more of the same in future from the two brothers to strip away future profits purely for own benefits. I have no evidence this will be the case, but also no confidence either this is not the case. IREN should have remained as a private business, and no business as a public company when accountability is absent. I am out.
Good luck. NUAI can help
I like Agrippa's analysis, but the GS sponsorship and CEO stock grants back to back is damaging. IREN just convinced Nvidia that $70 option pricing as fair, but turn around gave the two brothers $0 option pricing, one of them has to true, which one?
Promoters like Agrippa rarely shift their thesis when management breaks promises or shows they have no clue how to communicate their vision because their entire brand, follower base, or financial position is tied to the stock going up. When management does something contradictoryβlike saying they don't need marketing and then buying a marketing agencyβpromoters will immediately spin it as "genius vertical integration" rather than a broken promise. Agrippa is a 1 trick IREN pony who will justify any move by IREN. There are a few others out there as well, so be wary of people's motives. Clearly management are clowns. We are bare metal so the next week they buy a software company. We don't need marketing, we have NVDA - the next week they buy a marketing company and then pay for the sphere and now GSW jersey's. The IREN CEO's are getting paid more than the MSFT CEO but somehow it gets twisted that this is the in the best interest of shareholders, what a joke! NBIS has executed much better and shown that the software stack advantage is real. They actually sign deals and have much less dilution. Hard to have any faith in crypto bros like Mike Alfred or the dilution brothers at this point.
This incentive comp tells me the stock will be dead in water for the foreseeable future.