Lumentum Shed $8 Billion After "Sold Out," While Broadcom's Chief Said Capital May Be AI's Biggest Limit

About twice.

SWI Group raised about €800 million from big backers. The deal valued it at €6.1 billion. Its adjusted net assets were €2.3 billion in June. Add the new cash, and you get about €3.1 billion, half the price. The group took control of bitcoin miner Genesis this summer. It plans to turn the miners' grid hookups into AI data centers. Most of its first-half profit came from the value it put on Genesis. Buyers paid about twice SWI's own mark to own grid hookups.

• The S&P 500 slipped even as most sectors rose. It ended about flat, and the Nasdaq lost 0.4%. Tech was the worst sector by afternoon. An energy stock fund touched a record.
• Brent touched a two-week high near $107. Late Monday it was near $106, up about 1%. Heating oil was down nearly 1%. Russia's full diesel pledge covers about nine days of U.S. demand. Only the first part is due now.
• September CPI is out at 8:30 a.m. Wednesday. Forecasts call for core prices to rise 0.2% from August.
• Big banks, led by JPMorgan, report Tuesday before the open. ASML and TSMC report Wednesday and Thursday.

Lumentum Lost More Than $8 Billion of Value Three Days After Saying It Was Sold Out.

On Friday, PMD led with Lumentum saying it is sold out into 2029. On Monday, Lumentum (LITE) fell with no company news. It closed down nearly 10%. It lost more than $8 billion in value. Memory makers fell too. Micron lost about 4% and SanDisk about 6%. China's largest DRAM maker spoke over the weekend. It said it had made progress on a denser cell design.

The day's other AI news was about money. Broadcom's chief, Hock Tan, said capital "might be the biggest constraint" on the AI build. He spoke in Singapore on Monday. He said Broadcom was overcoming wafer and memory shortages, reports said.

No source ties the two. One reading is profit-taking after a long run. The stock traded near $153 last October. Another is that traders now see rivals and a peak in the shortage. A sold-out book can also mean more supply is on the way.

Sold Out Counts for Less if Money Is the Limit

Owners of AI parts makers may need a new test. If buyers' cash sets the pace, a full order book counts for less. The question moves from supply to who can pay. Results from ASML and TSMC this week will show if orders hold.

SIGNAL 1: Elisity's Backers Will Be Paid in IonQ Stock. Britain's Buyout Owners Are Lining Up Sales.

IonQ (IONQ) agreed to buy Elisity for up to $1.3 billion, all in stock. Up to $150 million rides on results. IonQ's recent average price sets the share count. That price is held between about $33 and $50. IonQ closed near $36, down about 9%. It gave no revenue or last private value for the startup.

In Britain, owners of PizzaExpress, Third Space and Morrisons are seeking exits. Bankers say the $8.9 billion Boots sale, debt included, could help. Morrisons has about £7.5 billion of debt, with leases. Reports put the two small chains at up to £1.2 billion together. That is about a sixth of Morrisons' debt.

What resolves this

A filing on the deal may show Elisity's numbers and the final share count. In Britain, bids for PizzaExpress and Third Space will show whether buyers pay what sellers want.

SIGNAL 2: Strategy Spent Nine Times as Much on Its Own Preferred as on Bitcoin.

On Friday, PMD asked if Strategy's preferred, STRC, would top $100 so it could sell more. Not yet. STRC closed at $99.88 Monday. Last week, Strategy (MSTR) sold no preferred. It spent about $192 million buying back STRC. It spent about $22 million on 250 bitcoin.

Other firms that hold crypto pulled back too. Bitmine said it is "largely finished" buying ether, at 4.9% of supply. SkyAI sold about half its Solana to help fund a bid for its own shares. Bitcoin was near $83,000 late Monday, down about 1% since Sunday night.

What resolves this

Strategy still holds about $5.5 billion in cash and reserves. Next Monday's filing shows whether it buys coins or its own paper.

SIGNAL 3: Money Funds Took In the Most Cash in Six Years. A Fed Voter Wants Policy Restrictive.

Money funds took in about $166 billion in the week to Oct. 7. That was the most since April 2020, EPFR data show. Cash pays about 4% after September's hike.

Cleveland Fed chief Beth Hammack said "a restrictive monetary policy stance is appropriate." She also said AI spending is pushing up prices for tech parts. She did not back a move this month. On Kalshi, an October hike was 15 cents Friday. It traded at 19 cents by midafternoon Monday. About $13,000 of buying moved it one cent.

What resolves this

Wednesday's CPI. A sharp move in the contract on heavier trading would say more than Monday's did.

• Polymarket's U.S.-Yemen contract counts only strikes the U.S. carries out itself. Help for Saudi strikes would not settle it. Traders put about a 20% chance on one by Oct. 31, in a thin market.
• The White House set a Nov. 5 hearing on removing Fed Governor Lisa Cook. She still votes at the Oct. 27-28 meeting. The panel only reports; the president decides.
• LVMH's fashion sales fell 5% last quarter, excluding currency and deals. They had grown again in the spring. It pointed to China.

Private Market Trends Driving Public Market Moves

If money is AI's limit, the firms that sell the parts answer to their buyers' funding.

Tan's warning may change what a sold-out book is worth. Buyers with a choice are being choosy. They paid up for SWI's grid hookups and crowded into cash funds. Companies chose too. Strategy bought back its own preferred. IonQ kept its cash by paying in stock. For owners of public parts makers, that could make buyers' funding the number to watch. CPI on Wednesday and TSMC on Thursday are the first tests.