alt Hacker NewsLetting new stocks marinate in the market and get 4 quarters of SEC filings along with following all the GAAP accounting practices will definitely help evaluate them before inclusion. The last large boom/bust cycle had a couple of companies, at least, that were doing illegal things. I'm not stating that these three are, just that nobody knows and the process should play out.
I do wonder if any of these three companies are using AI to do their accounting and bookkeeping. What happens when there are AI hallucinations affecting those outcomes?
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I would expect actual human professional accountants to be involved somewhere in the due diligence stage of those approving the IPO. Then again, I know nothing of the IPO process, and am definitely thinking of mergers and acquisitions due diligence and hoping something exists for IPOs.
Reading the Spacex S-1, there’s a notable footnote (notable in that it’s a unique disclosure amongst all filers in the context it’s presented and is not required by any FASB standard). It calls out that land is not a depreciable asset.
That really didn’t need to be said and it seems to be sourced from memes from Reddit. It is the kind of infantile patronizing feedback you would get if you asked for comments on financial statements from chatGPT.
Cerebras is a good example here. Largest IPO of 2026 and as of Friday, down 33% from their top and about $15 away from their initial price.
CFO was at Bird (a SPAC flop) and CEO was previously charged by the SEC with a felony... for cooking the books.
Everyone wants you to believe that a giant wafer is the future (and soon enough layers of wafers), but a P/E of $500, just doesn't make sense for a company selling AI fast tokens.
Especially with a whole bunch of other solutions just waiting for tapout and competing with everyone else for more and more memory allocations to be able to hold the models.
That is a great question re: accounting and I can readily see both sides of it playing out. On one hand, they know not to trust the output and on the other, they're way too high on their own supply.
These things get checked pretty carefully by humans. They can get sued for fraud. But some of the future estimates can be swayed by hallucinations, both AI and Elon Musk etc.
You can also game things a bit like Anthropic is showing better figures just now due to an introductory discount on getting compute from xAI. Those tend to fade out with time.
> just that nobody knows
I don't understand. Guilty until proven innocent, because they... are too successful? What could possibly be the generalizable idea here?
Should we have a speed limit for too successful companies, even if they might be doing super valuable work? Who would we trust to be the judge of the potential havoc that bad capital allocation in such a moment might cause?
EDIT: To be more clear, I don't have any particular qualms with the S&P committee maintaining it's position. That part I find mostly interesting and goes towards the second paragraph.
The first one is reserved for the quote, which I do have qualms with. "Nobody knows" feels a bit weak when the implication, that someone could be doing something illegal, turns into a guiding principle.
What happens if the auditors use software that consumes the model provider they are auditing? Seems like an obvious conflict of interest for the model, no?
I think that’s not how that works today, but I’m sure that it could and will one day.