An AI IPO Fell Short of Its Ask | TalkTalk's Bondholders Got Nothing | The 30-Year Sold at 5.62%

2.2x to 2.4x

Firmus's IPO value over its August private round, at the prices now reported. The ask was 2.9x.

The Nasdaq fell 1.2% and the S&P 500 0.5%.

Thirty-nine states, D.C. and the NFL urged the Supreme Court to hear New Jersey's appeal in its fight with Kalshi. Sycamore signed Wednesday to sell Boots to Canada's Weston family for $8.9 billion, debt included.

Firmus Marketed Its IPO at 2.9 Times Its Last Private Value. Public Buyers Want Less.

Firmus Grid shut the order book for its IPO with no price set. Nvidia (NVDA) and Blackstone (BX) back the Australian AI data-center firm. It marketed shares at A$11, a value near A$44 billion. Fund managers now expect about A$9, people familiar said. Other reports put it as low as A$8.25. Bankers pulled the offer papers to shrink the deal.

Even A$8.25 would be about 2.2 times the August private round. So the private backers would still gain, just less. Buyers doubted the price and feared quick selling by early holders. Maas Group, a listed backer, closed down 22.4% in Sydney.

U.S. chip stocks fell too, amid doubts about AI spending. The main chip-stock index fell 3.4%. Oracle (ORCL) lost 5.6% and Broadcom (AVGO) 4.3%. OpenAI told investors its yearly sales pace is nearing $50 billion, a report said. That's about $20 billion below last month's reported figure. The gap comes from how investors had counted its revenue, not lost sales. Samsung fell after record profit, and TSMC’s (TSM) U.S. shares after record sales.

Much of this buying runs on borrowed money. Broadcom is arranging more than $50 billion of financing tied to OpenAI's chip, people familiar said. Apollo and Blackstone are among the lenders in talks. If OpenAI's sales fall short, lenders could charge more or pull back. Then the chip orders they fund could shrink, and buyers could keep bidding AI assets below the ask.

The Public Price Came In Lower

Public buyers still offer more than Firmus's last private round, but less than sellers wanted. That gap is what a private mark loses when it meets public money. Firmus's final price and the terms on the big chip loans will show how wide it gets.

SIGNAL 1: Apollo Has Traded $35 Billion of Private Credit. In TalkTalk's Failure, the Bonds Got Nothing.

Apollo (APO) has traded more than $35 billion of private credit, partner John Cortese said. About a third were loans other firms made. Apollo's daily values for its whole credit book are its own estimates. The trades are prices someone paid.

TalkTalk shows what lenders get when a deal fails. BT bought TalkTalk out of administration, debt-free. Holders of nearly £1 billion of TalkTalk bonds were wiped out. A month earlier, the first-lien notes traded near 65% of face value. Ares (ARES), a lender and shareholder, expects to get back about half its cash, people familiar said. Ares has not disclosed how it marked the loan.

Leveraged loans quoted under 60 cents now total about $65 billion. That's the most since March 2020, JPMorgan's strategists say.

A Trade Says More Than a Mark

A mark is what the manager thinks. A trade is what someone paid. TalkTalk's notes went from about 65 to nothing in a month. More trading would show losses sooner. It helps holders who want out and strains funds sold on steady values.

SIGNAL 2: The 30-Year Sold at 5.618%, the Highest Since 2000. Long Yields Still Fell.

Last night PMD said Thursday's sale would test whether demand reaches the longest bonds. It did, at a price. The Treasury sold $22 billion at 5.618%. No 30-year sale has cleared higher since 2000. It was 31 basis points above September's. Dealers kept 6.8%, against 2.5% at Wednesday's 10-year sale.

Long yields kept falling. The 30-year ended near 5.61%, down about 6 basis points. The 10-year ended near 5.23%. The sale landed 43 minutes after Trump posted that the U.S. would not attack Iran before the midterms. The blockade stays. Brent still settled up 4.1%, above $104. A Polymarket bet on the blockade lifting before November barely moved, near 20 cents in the early afternoon.

Fed Governor Christopher Waller said he expects more hikes if the data hold up. They "do not need to come at consecutive meetings," he said. Freddie Mac's average mortgage rate rose for a seventh straight week, to 7.40%. That's the highest since November 2023.

Buyers Came Back. The Bill Went Up.

Two long sales in two days found buyers at the highest yields in decades. Each cost more than last month. With oil up and the Fed leaning toward hikes, long money may stay costly. Home buyers and AI borrowers would both pay.

SIGNAL 3: Bitcoin Broke Below $81,000 a Day After U.S. Funds Pulled $485 Million

Bitcoin fell below $81,000 for the first time since Sept. 21. It won back some of the drop by 4 p.m. Ether was down more than 6% at its low.

U.S. funds were already selling. Spot bitcoin ETFs lost about $485 million on Wednesday, the most since June. That wiped out October's inflows.

The Slide Outlasted the Good News

Bitcoin kept falling for hours after yields eased and the Iran news calmed. Among miners, Hut 8 and Riot fell the most, about 11% and 9%. Both are building AI data centers. Rates alone don't explain the slide. Friday's options expiry is next.

• Friday: Bitcoin and ether options expire.
• Oct. 14: September consumer prices.
• Late October: Firmus's planned listing, now in question.
• Oct. 30: Apollo expects to start asset-level pricing for some funds.
• Nov. 9: Kalshi's reply to the Supreme Court.

Treat a private mark as the manager's estimate until someone pays it. Firmus may still list at more than twice its last private value. TalkTalk's bondholders got nothing. Before trusting a mark, ask when the asset last traded, and at what.

By the close, buyers had filled in what the morning left blank. Firmus's buyers still bid above the private round, but below the ask. Apollo is trading loans, and TalkTalk showed what a failed one fetches. Watch the marks that haven't met a buyer yet.