Brokerage 2.0 - Alpaca Monster Capital Raise, Tokenization and The Stocktwits Idea Machine and Time Machine

Good morning…

As a reminder, Stocktoberfest is in New York this year on October 5-7. The details are here. If you have questions or want to sponsor just hit me up. I hope you can attend. We will of course be discussing the topics below.

Before I get started…

This week was bananas in the markets. Earnings have started, the war is heating up, oil is back on the rise, The Democrats have the ‘wealth’ pitchforks out, and Trump wants to do weekly state of the unions I call ‘whinefests’. He also launched what I call a ‘grift API’ so that he can charge $100,000 to people that want to hear his inside information moments before he types them for the public. This is gross and maybe just a troll distraction from the White House, but it is the exact business model I pitched Jack and Ev at Twitter in the 2007 early days. As owner of the ‘pipe’ Twitter should have slowed down the feed by 20-60 seconds and just sold access to the banks and exchanges and funds that wanted ‘real-time’ access. I imagine Twitter would have been insanely profitable by 2010 and have less than a few hundred employees. Instead we have algo feeds, ads and an asset tucked into SpaceX.

Speaking of Space X ( $SPCX ( ▼ 5.43% ) ), the stock is now down in the 120’s, below the $135 IPO price set by Elon and down 40 percent since the hyped IPO peaked. I watched ‘Wolf of Wall Street’ this weekend and in hindsight the whole story is a tame version of what Elon and all of Wall Street unleashed on the public. We are witnessing the worst behavior of the ‘degenerate economy’ coming from Goldman, JP Morgan, CNBC, Elon and friends, Silicon Valley and The White House.

For months I wrote at length about why I was de-selecting SpaceX ( $SPCX ( ▼ 5.43% ) ) from my FREC.com direct indexing holdings and three weeks ago I detailed why I was selling down my semiconductor index position. Here is my post. Since sharing, the index has sold off hard and many of the stocks in the index are down over 40 percent.

In AI this week, the two big stories were New York State giving data centers ‘The Heisman’ and The Chinese open source model Kimi gaining traction and closing the gap between American and Chinese AI. It is a must read. Josh Wolfe calls this new worry in AI ‘consent constraint’…

OK…Onward to the important stuff…Brokerage 2.0

A few weeks ago I wrote about ‘Brokerage 2.0’ and the massive TAM that is developing as Brokerage 1.0 proliferates and evolves. You can read it here.

A leader in this trend is Alpaca (a portfolio company of ours) which we helped seed in 2017. It continues to lead the brokerage 1.0 and now 2.0 infrastructure build out. Alpaca has built the modern infrastructure stack for global investing. The latest raise was announced this week…

This Alpaca raise is on the heels of $150 million raise they closed at the beginning of 2026 and an additional $300 million of debt financing.

Alpaca is an API-native brokerage infrastructure that lets fintechs, exchanges, and financial institutions embed U.S. stocks and options trading directly into their products without building brokerage, clearing, or custody from scratch. Crucially, Alpaca is a self-clearing broker-dealer in the U.S. and Japan. That means it does not just route trades. It executes, clears, settles, and custodies assets end-to-end. It offers a full stacked brokerage-as-a-service solution to 300 companies across 40 countries, including SBI Securities and Kraken.

Most recently Alpaca participated in DTCC's landmark Tokenization Services launch by converting traditional equities into tokenized version and making them available to blockchain participants. Alpaca has quietly become the core infrastructure for tokenized U.S. stocks. It is the brokerage and clearing backbone behind tokenized stock platforms such as Ondo Finance, xStocks and Dinari. Of the $1.85B tokenized stocks on the market, it is responsible for providing the clearings, connectivity and custody services for $1.5B or 81% of the entire market.

So…

The pipes of Brokerage 2.0 are being laid and we know that people around the world want to invest, predict, bet and speculate. We also know that AI is an accelerant and multiplier of the enormous TAM.

What goes best with all the rails, AI and demand is ‘unique data’ and ‘ideas’.

Over the last year, we have been working at Stocktwits to take advantage of this massive opportunity. Today, hundreds of thousands of daily active contributors and users of Stocktwits are watching their screens and sharing ideas in real time. We are deploying AI as fast as possible to read the streams and organize them in the form of sentiment, ideas and summaries.

Our MCP is in beta and launching soon. The Stocktwits MCP plugs our real time feeds into the AI you already use - Claude, ChatGPT and Cursor. You can ask about any ticker and get back what investors are actually talking about in real-time. Plus your AI can access proprietary data sets - summarized ideas, message volume and investor sentiment.

I call our MCP a ‘time machine’. While it may not predict the future, it will allow investors to look back over years of ideas and sentiment to get a unique picture and feel for what the future might look like and find the people that might be the best at predicting it.

Stocktwits as an ‘idea machine’ is also coming into focus.

A few weeks back here I explained my favorite stock scan based on years of tracking which I call ‘social relative strength’. In order to help people follow along in real time and see stocks that surface from the scan, we created a stream to follow on Stocktwits. You can check in anytime or choose to get mobile notifications. In the coming months we will offer hundreds of unbundled scans like this in streams format you can easily follow.

Unbundling price and fundamental screens into streams you can easily follow is unique and cool, but pairing these streams with social context is a game changer.

For example…

‘I would like to be notified when Howard mentiones a stock at a 52 week high or a stock in the ‘social relative strength’ stream.’

Enough for today.

Have a great Sunday.