SharonAI Holdings

SHAZ · investment memo

Valuation margin
demonstrated − required CAGR

—

Required CAGR

—

Demonstrated

-9.6%

Terminal margin

—

Exit multiple

—

Company state

Terminal margin basis

NULL BY DESIGN. The prose supports no terminal margin. Latest-quarter gross margin is -78.9% and the ten-year maximum recorded elsewhere in the framework is -880%; the 10.7% previously assigned is exactly the fabrication this record exists to stop repeating. The memo's verdict is INDETERMINATE, not FAIL - a missing input is INDETERMINATE, and here the missing input is the entire contracted book.

Risk & exit

Four distinct questions, one field each. A price is not a thesis: the trigger below forces a re-underwrite and freezes further purchases — it is never an automatic sell.

Risk trigger
25% below the memo price

$30.03

A daily close below $30.03 triggers a mandatory re-underwrite and freezes further purchases. It is not an automatic sell unless a separate fundamental invalidation condition has been breached.

Thesis-invalidation conditions

Fundamental and falsifiable, never price-based. If one is satisfied the thesis is marked dead and the position is retained only by explicit decision.

The ~29.6MW commencing "late 2026" as a fixed cost without matched contracted revenue. This is the classic neocloud failure shape — committed capacity ahead of committed demand — and SHAZ has disclosed the commitment while disclosing no offsetting contract.
A further quarter of negative gross margin. Q1 2026 cost of revenue was $526k on $294k of revenue. Scale makes this worse, not better, until unit economics invert.
Q1 2026
A further decline in revenue. It is already −9.6% YoY on the only business it now has.
The share price staying below the $48.24 conversion price while the $350m of 6% notes accrue cash interest at ~17x revenue. That is the mechanism by which dilution becomes forced rather than opportunistic.

Impairment case

Named cause: the current convertible notes, against a business generating $294,014 a quarter. $199.4m falls due within twelve months and it exceeds every liquid asset the company has. The response in April 2026 was to issue $350m more — at 6.00%, due 2031, convertible at ~$48.24. That resolves the near-term maturity and creates ~$21m of annual cash interest against ~$1.2m of annual revenue. Solvency therefore depends entirely on continued capital-market access, and the terms of that access depend on the share price: the 2031 notes convert at $48.24 against a $40.04 spot. If the equity falls ma

Documents

SHAZ Catalyst Calendar SHAZ Financial Model Notes SHAZ Research SHAZ Trade Construction SHAZ Valuation

Generated from each name's analysis.json. Figures are research output, not investment advice. Gaps are shown as “—” rather than filled: a missing input is recorded as indeterminate, never estimated.