WEBVTT - Economic Animals 0:00:02.720 --> 0:00:07.560 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.400 --> 0:00:11.479 Katie some sort of take your children to Bloomberg Television day. 0:00:11.720 --> 0:00:14.240 Yeah. I feel like that's evidenced by all the children 0:00:14.240 --> 0:00:15.840 that are well, there are a lot of children walking 0:00:15.880 --> 0:00:16.800 at where are your kids? 0:00:17.000 --> 0:00:20.840 I have never once been informed in advance or frankly 0:00:20.880 --> 0:00:22.920 in real time about it take your child to workday. 0:00:23.120 --> 0:00:24.480 I just show up and all the kids are here, 0:00:24.480 --> 0:00:26.080 and they're like, oh, yeah, take your child the workday, 0:00:26.079 --> 0:00:26.960 And like I. 0:00:26.920 --> 0:00:30.680 Hear, I hear there's a lottery. Not everyone's allowed to 0:00:30.680 --> 0:00:32.120 bring their children, is my understanding. 0:00:32.240 --> 0:00:34.600 Okay, I wasn't informed with the lottery. It's fine, my 0:00:34.680 --> 0:00:36.720 kids have school. It's fine, it's fine. 0:00:36.720 --> 0:00:39.880 It's fun. I mean you're not getting anything done that day, right. 0:00:40.440 --> 0:00:42.320 Someone at Bloomber Opinion had. 0:00:42.159 --> 0:00:45.280 His kids here and a kid. 0:00:45.440 --> 0:00:46.839 I was like, a bad influence. I was like my 0:00:46.920 --> 0:00:51.400 daughter like first tried root beer here. But I saw 0:00:51.600 --> 0:00:54.480 two kids recording like on the camera in the lobby 0:00:54.680 --> 0:00:57.120 that's waking behind them, and I could see the prompter 0:00:57.200 --> 0:00:59.920 and it was like at Bloomberg News for kids, Yeah, 0:01:00.160 --> 0:01:02.240 It's like are they is that going to be aired? 0:01:02.480 --> 0:01:04.839 It's cute that they do that. Certainly not on my show. 0:01:07.120 --> 0:01:08.360 No, we're killing it. 0:01:10.800 --> 0:01:14.280 Man, You're a competitive I don't know why I want 0:01:14.280 --> 0:01:17.400 to go tackle those children. Get away from my prompt 0:01:17.520 --> 0:01:17.920 looking for. 0:01:17.880 --> 0:01:19.920 Your job In approximately twenty years. 0:01:19.680 --> 0:01:21.679 I thought I was having to worry about AI. 0:01:23.200 --> 0:01:26.880 Hello, Welcome to The Money Stuff Podcast, your weekly podcast 0:01:26.880 --> 0:01:31.200 where we talk about stuff related to money. I'm Matt 0:01:31.280 --> 0:01:34.080 Levine and I heard the Money Stuff Colm from Bloomberg Opinion. 0:01:34.959 --> 0:01:37.440 And I'm Katie Greyfeld, a reporter for Bloomberg News and 0:01:37.440 --> 0:01:38.920 an anchor for Bloomberg Television. 0:01:48.720 --> 0:01:50.040 Should we talked about the weather? I feel like we 0:01:50.080 --> 0:01:52.240 talked about the weather last week and now we're talking 0:01:52.240 --> 0:01:56.240 about the weather again. There's a very economically important local 0:01:56.600 --> 0:02:01.920 climatic zone, which is that apparently somewhere within Charligall Airport 0:02:01.960 --> 0:02:05.880 in Paris, there's a censor that tells you the temperature 0:02:05.960 --> 0:02:09.960 for like Paris. Yeah, and so polymarket takes quite a 0:02:09.960 --> 0:02:13.480 lot of bets on the weather in Paris. And at 0:02:13.480 --> 0:02:17.880 two points this month it's been reported the temperature in Paris, 0:02:17.960 --> 0:02:20.240 by which I mean the temperature at this one sensor 0:02:20.280 --> 0:02:23.440 in the airport spiked by like four or five degrees 0:02:23.480 --> 0:02:26.560 celsius in the space of a few minutes, causing very 0:02:26.600 --> 0:02:29.440 long shot bets on this temperature to pay off to 0:02:29.440 --> 0:02:31.720 the tune of tens of thousands of dollars. And so 0:02:31.840 --> 0:02:35.600 the French like meteorological service is investigating, and you know 0:02:35.639 --> 0:02:38.959 their tweets about someone took a hair dryer to Sharyl 0:02:39.000 --> 0:02:42.400 the Gahala and made thousands of dollars treating these weather 0:02:42.400 --> 0:02:43.560 derivatives so good. 0:02:43.800 --> 0:02:46.320 Yeah, I have to imagine there's going to be so 0:02:46.360 --> 0:02:47.520 many more cases like this. 0:02:48.240 --> 0:02:49.959 Right, I tried to write about it. 0:02:50.040 --> 0:02:51.919 I feel like you did successfully. 0:02:52.080 --> 0:02:56.040 Well, yeah, I wrote words about it, Like there's market 0:02:56.080 --> 0:02:59.720 manipulation in the world. Right, there's some stuff tapping right now, 0:03:00.200 --> 0:03:02.680 lying stuff, and there are derivatives on the underlying stuff, 0:03:02.680 --> 0:03:05.720 and people can manipulate the stuff to cause the derivatives 0:03:05.760 --> 0:03:07.720 to go up. And I've written about dozens of cases 0:03:07.760 --> 0:03:10.360 over the years. But like, what prediction markets have done 0:03:10.400 --> 0:03:14.160 is they've created a sort of infinite surface for market manipulation. 0:03:14.240 --> 0:03:16.640 Like anything you can think of, there can be a 0:03:16.680 --> 0:03:21.000 prediction market on and the outcome of anything you can 0:03:21.000 --> 0:03:24.200 think of might be manipulable. And so if you are 0:03:24.240 --> 0:03:28.320 buying like grain futures, the weather in the Midwestern United 0:03:28.320 --> 0:03:31.280 States is an input to the price of those grain futures, 0:03:32.080 --> 0:03:34.720 but like a leader of air in the Midwestern United 0:03:34.760 --> 0:03:37.080 States is not is not a material input. But if 0:03:37.080 --> 0:03:40.720 you're buying the polymarket, like bet on the weather in Paris, contract, 0:03:41.240 --> 0:03:44.960 one tiny little spot causes the vets to pay off 0:03:45.040 --> 0:03:47.240 or not. There's always gonna be market manipulation. But like 0:03:47.560 --> 0:03:52.520 the prediction markets have just created this vast new possibility 0:03:52.560 --> 0:03:53.520 of things to manipulate. 0:03:53.800 --> 0:03:55.560 It's exciting, right, it. 0:03:55.560 --> 0:03:56.080 Kind of is. 0:03:56.360 --> 0:03:56.640 Yeah. 0:03:56.680 --> 0:03:59.360 I mean, I don't know, I feel stupid every time 0:03:59.360 --> 0:04:00.800 I write about it, but keep writing about it. 0:04:00.880 --> 0:04:03.240 I mean, it's clever, and some of them are clever 0:04:03.280 --> 0:04:03.720 and fun. 0:04:04.640 --> 0:04:05.360 I guess. 0:04:05.640 --> 0:04:07.120 I feel like I want to see photos or a 0:04:07.160 --> 0:04:10.880 diagram of like where this temperature sensor is. Yeah, I 0:04:11.280 --> 0:04:13.280 feel like they could fix this by just placing it 0:04:13.400 --> 0:04:17.520 higher rights drinking. 0:04:17.279 --> 0:04:19.279 Fountain like in the at the gate, you know, but 0:04:19.320 --> 0:04:22.960 it's probably not. It's probably like on a runway, yeah, right, 0:04:23.160 --> 0:04:26.160 because like you know, the weather in the actual airport 0:04:26.240 --> 0:04:27.160 is climate control. 0:04:27.360 --> 0:04:29.200 So yeah, it's I think. 0:04:29.040 --> 0:04:32.800 I don't actually eight degrees again, it would be in. 0:04:33.160 --> 0:04:36.640 Europe is less committitary conditioning. Then it's a good still. 0:04:36.440 --> 0:04:39.400 Still, that's yeah, still Yeah. 0:04:39.960 --> 0:04:44.680 I also wrote this week about bespoke parametric insurance. Yeah, 0:04:45.000 --> 0:04:47.719 so basically there's a good Bloomberg article about bad Bunny. 0:04:47.720 --> 0:04:48.960 I think it's bad Bunny. 0:04:49.000 --> 0:04:49.240 Yeah. 0:04:49.320 --> 0:04:52.479 He had a concert scheduled in like Columbia, and he 0:04:52.600 --> 0:04:56.320 worried about it being canceled for torrential rain. And he 0:04:56.360 --> 0:04:59.760 went to insurance companies to get cancelation insurance and they're like, wow, 0:04:59.800 --> 0:05:01.760 we can and sell your policy that pays off if 0:05:01.760 --> 0:05:04.120 it rains. But like the rain sensor is a mile 0:05:04.160 --> 0:05:06.680 away and it's like a very different microclimate where you are. 0:05:07.200 --> 0:05:08.960 And he was like, what if we built a weather 0:05:09.040 --> 0:05:12.000 station and it's not him, This is like insurance adjuster. 0:05:12.800 --> 0:05:15.720 They built a weather station inside the venue so that 0:05:16.200 --> 0:05:19.000 they could get paid out if it rained in the venue. 0:05:19.320 --> 0:05:21.280 The story was great because one of the things like 0:05:21.600 --> 0:05:23.320 it was like they could have built just like a 0:05:23.440 --> 0:05:24.200 rain collector. 0:05:24.560 --> 0:05:27.640 Yeah, but then you could manipulate. 0:05:27.720 --> 0:05:30.000 Then you could you could just get a watering can 0:05:30.040 --> 0:05:32.080 and pour water on it. It's like they had to 0:05:32.080 --> 0:05:35.240 build out a whole weather station because that you have 0:05:35.279 --> 0:05:37.760 all the confirmatory readings and if they just pour water 0:05:37.760 --> 0:05:40.599 into the weather to the rain sensor. Then they'll know 0:05:41.240 --> 0:05:44.880 appurrently the French Meteorological Service has this problem. 0:05:44.960 --> 0:05:47.560 Yeah, bad bunny. Should have just created a market on 0:05:47.800 --> 0:05:49.640 polymarket or kelcill. 0:05:49.080 --> 0:05:50.360 That's the thing, right. I wrote about this and I 0:05:50.440 --> 0:05:52.560 was like, oh, bespoke parametric insurance, and someone was like, 0:05:53.080 --> 0:05:56.080 is bespoke parametric insurance the same thing as a prediction market? 0:05:56.120 --> 0:06:04.279 And it's like kind of yeah, I'm glad the weather sensor. 0:06:04.360 --> 0:06:06.640 It's gonna be all we talk about. Famously boring topic 0:06:06.680 --> 0:06:08.880 of conversation, but coming up more and more often. 0:06:09.800 --> 0:06:12.840 It'll come up again talking about Avis. Yeah, do you 0:06:12.880 --> 0:06:14.800 know anything about as No. 0:06:14.839 --> 0:06:16.080 Davis budget is what it's called. 0:06:16.160 --> 0:06:19.760 That's too two or more different more have often used hurts. 0:06:19.800 --> 0:06:21.599 So I don't know much about AUS. I do know 0:06:21.640 --> 0:06:25.840 that the stock has been going insane ripped, and the 0:06:25.839 --> 0:06:27.839 consensus is that it's a short squeeze. 0:06:27.960 --> 0:06:30.279 What's interesting is this stog who was like one hundred 0:06:30.279 --> 0:06:32.680 dollars about a month ago, one hundred dollars a share 0:06:32.720 --> 0:06:35.680 and it is a It got to seven hundred and 0:06:35.760 --> 0:06:37.320 thirteen on Tuesday. 0:06:37.520 --> 0:06:39.120 Wow, it must have been a great earnings report. 0:06:39.160 --> 0:06:42.000 Yeah, say, the consensus is that it's not earnings DRIPPN. 0:06:42.360 --> 0:06:44.359 But it's not a fundamental. 0:06:44.160 --> 0:06:45.799 Their report on the twenty ninth of April. 0:06:46.000 --> 0:06:50.360 Right, maybe people have an inside you on the but 0:06:50.360 --> 0:06:52.280 I don't think so. The phrase that is normally thrown 0:06:52.279 --> 0:06:54.360 out a short squeeze and a couple of good reasons 0:06:54.440 --> 0:06:56.560 for it, when is that is a heavily shortened stock. 0:06:56.600 --> 0:07:00.960 He's like, short interest is like a somewhat mysterious thing 0:07:01.040 --> 0:07:03.039 to report, and you often get it onto ala. But 0:07:03.120 --> 0:07:05.200 something like sixty percent of the shares have been shorter. 0:07:05.240 --> 0:07:07.279 It's a little lot. But the other reason that people 0:07:07.279 --> 0:07:09.320 talk about a short squeeze, and I wrote about this 0:07:09.440 --> 0:07:13.320 last week, is that two hedge funds own one hundred 0:07:13.360 --> 0:07:16.920 and eight percent of the stock, which if you do 0:07:17.000 --> 0:07:20.200 some simple math, like if you want one hundred and 0:07:20.200 --> 0:07:22.280 eight percent of the stock and you call in all 0:07:22.280 --> 0:07:25.880 of your borrow, then there's no borrow to be found. Now, 0:07:26.520 --> 0:07:30.080 it's not that's not exactly what happened here. One thing 0:07:30.080 --> 0:07:32.440 that has happened is I've gotten several emails from people 0:07:32.600 --> 0:07:34.280 being like, is there actually a short squeze? Because like 0:07:34.320 --> 0:07:37.520 there's no reports of hedge funds being like carried out 0:07:37.600 --> 0:07:39.800 like you know, like in gamestat where like, you know, 0:07:40.280 --> 0:07:42.640 a big hedge fund closed because of the game stop 0:07:42.680 --> 0:07:45.200 short squeeze. Yeah, there's not really any reports that here. 0:07:45.400 --> 0:07:47.960 Bloomberg has been reporting that people were adding short positions 0:07:47.960 --> 0:07:51.160 as the stock was going up and have now made 0:07:51.240 --> 0:07:54.400 billions of dollars more than all of setting the billions 0:07:54.440 --> 0:07:57.840 of dollars they lost on the way up. Yeah, it's interesting. 0:07:57.880 --> 0:08:00.360 So these two hedgehunds own one hundred eight percent of 0:08:00.360 --> 0:08:02.520 the stock, but they don't really They own like sixty 0:08:02.640 --> 0:08:04.920 nine percent of the stock, right, and then they have 0:08:05.360 --> 0:08:09.040 big swap positions where like you know, traditionally, the way 0:08:09.040 --> 0:08:12.760 a swap works is like a bank writes the hedge 0:08:12.800 --> 0:08:14.520 fund of contract time, we'll give you the upside in 0:08:14.560 --> 0:08:17.280 the stock and you'll lose the downside, and the bank 0:08:17.320 --> 0:08:20.760 hedges it by buying stock. But it doesn't have to 0:08:20.760 --> 0:08:23.640 hedge it by buying stock. One thing I was thinking 0:08:23.640 --> 0:08:26.440 about is that if short sellers want to be short 0:08:26.480 --> 0:08:28.280 a lot of the stock, and if like these two 0:08:28.320 --> 0:08:30.880 hedge funds are called SRS and Pentwater want to be 0:08:30.880 --> 0:08:33.840 long a lot of the stock, they can just do 0:08:33.920 --> 0:08:36.680 a bet with each other. The hedge fund says if 0:08:36.679 --> 0:08:38.920 the stock goes up, I'll pay you, and if the 0:08:38.960 --> 0:08:41.520 stock goes down, you'll pay me. Right, that's a swap. 0:08:42.280 --> 0:08:46.199 And what might be happening here is that that might 0:08:46.240 --> 0:08:48.520 be happening. What might be happening is that the short 0:08:48.520 --> 0:08:51.079 sellers are short the stock on swap, SRS and Pentwater 0:08:51.080 --> 0:08:53.800 are along the stock on swap. The bank is sitting between 0:08:53.800 --> 0:08:56.480 them and basically brokering a bat between the short hedge 0:08:56.520 --> 0:08:58.480 funds and the long hedge funds. And then there's no 0:08:58.559 --> 0:09:00.959 short screeze. Everything's easy, you know. I mean, there's a 0:09:00.960 --> 0:09:03.240 little bit of short squeze youet, like collateral calls, but 0:09:03.280 --> 0:09:06.680 basically you can just sit there until the world returns 0:09:06.679 --> 0:09:07.600 to reality. 0:09:08.440 --> 0:09:13.000 I do also like the psychological maybe theory that if 0:09:13.120 --> 0:09:16.040 enough people think there's a short squeeze happening, yeah, more 0:09:16.080 --> 0:09:18.760 people are going to pile in, right, regardless of whether 0:09:18.800 --> 0:09:20.040 it's truly happening at scale. 0:09:20.280 --> 0:09:22.680 Yeah, because like a short squeeze is almost like a 0:09:23.080 --> 0:09:26.000 magical incantation for a meme stock. Right, You're gonna have 0:09:26.040 --> 0:09:29.200 a stock go up seven x without a short squeeze 0:09:29.240 --> 0:09:31.560 just because retail investors thinks there's a short squaze, right, 0:09:31.559 --> 0:09:33.520 I mean that's you know, that's game stop. Yeah, well 0:09:33.520 --> 0:09:36.800 there there was one probably, but right, and like the 0:09:37.600 --> 0:09:40.640 setup here with the huge amount shorted and the huge 0:09:40.640 --> 0:09:43.920 amount long really encourages someone to think, ooh a short 0:09:43.960 --> 0:09:47.440 squeeze and then pile into it. So curse to me 0:09:47.520 --> 0:09:49.240 that my writing about it last week. 0:09:50.520 --> 0:09:51.280 Is this your fault. 0:09:52.480 --> 0:09:55.080 Not a lot of meme stops are born in money stuff. 0:09:56.679 --> 0:09:57.560 But who knows? 0:09:57.800 --> 0:10:00.360 There was an interesting jp we're going to down. 0:10:00.360 --> 0:10:02.479 No other fundamentals, don't justify. 0:10:02.160 --> 0:10:03.760 This, Yeah, exactly. 0:10:03.760 --> 0:10:06.200 It downgraded them to underweight from neutrals, saying it has 0:10:06.240 --> 0:10:09.079 an unsustainable valuation not supported by them. 0:10:09.200 --> 0:10:11.920 Raise their price target, yes, because their pricever is like 0:10:11.960 --> 0:10:13.439 one hundred bucks or whatever. And then it goes to 0:10:13.520 --> 0:10:15.880 seven hundred and they're like, okay, well now it's a 0:10:15.960 --> 0:10:17.160 sell at two hundred. 0:10:17.320 --> 0:10:21.000 Well they boosted the price target to account for capital 0:10:21.000 --> 0:10:23.520 markets opportunity. And this is what I wanted to bring 0:10:23.520 --> 0:10:26.640 to your attention that they wrote we view the recent 0:10:26.800 --> 0:10:31.360 extraordinary quote short squeeze driven rally and avis budget shares 0:10:31.400 --> 0:10:34.680 as a potentially significant opportunity for management to create lasting 0:10:34.800 --> 0:10:37.800 value via opportunistic capital market transactions. 0:10:37.840 --> 0:10:40.199 I was thinking about that when you're a meme stock 0:10:40.679 --> 0:10:42.760 and you say, okay, we're going to rip off an ATM. 0:10:42.800 --> 0:10:45.360 Like that works, right, That's become like a standard piece 0:10:45.400 --> 0:10:48.280 of the playbook. Now you to at the market stock 0:10:48.320 --> 0:10:51.760 offering to take advantage of your memestock status. It's tougher 0:10:52.200 --> 0:10:55.720 when you are like nominally purely a short squeeze, because 0:10:55.760 --> 0:10:58.679 the thing about a stock offering is that like alleviates 0:10:58.720 --> 0:11:00.560 the short squeeze problem. Right, you can sell the shares 0:11:00.600 --> 0:11:02.800 to the shorts or whatever. Right. Yeah, So when people 0:11:02.840 --> 0:11:05.280 are like really amped for short squeezes, they get mad 0:11:05.320 --> 0:11:07.640 if the company talks about issuing stock because that like 0:11:07.880 --> 0:11:10.600 somehow dew flights to the short squeeze. But sure, right, 0:11:10.640 --> 0:11:13.480 I mean if your stack's at seven hundred, sew some stock. Yeah, 0:11:13.559 --> 0:11:15.120 And I was wondering if they if they would do 0:11:15.200 --> 0:11:17.400 some sort of at the market offering. And it's it's trickier. 0:11:17.640 --> 0:11:19.560 Yeah, has the moment passed? 0:11:20.000 --> 0:11:22.520 The stock was down Tuesday was the peak, and it's 0:11:22.679 --> 0:11:24.400 you know, we're recording this on Thursday, it's up two 0:11:24.480 --> 0:11:27.680 hundred and thirty dollars or something, which is you know, yeah, 0:11:27.760 --> 0:11:30.320 like has the moment passed? It's doubled in the last 0:11:30.320 --> 0:11:32.600 month for no reason. It's still a good deal, but 0:11:32.640 --> 0:11:33.680 it's not seven hundred. 0:11:33.760 --> 0:11:36.520 Well, at least JP Morgan thinks that what's the price 0:11:36.559 --> 0:11:39.000 start now? Their price target is one hundred and sixty 0:11:39.000 --> 0:11:42.520 five dollars. It was one hundred and twenty three dollars. 0:11:42.640 --> 0:11:44.240 We'll see earnings are next week. 0:11:44.320 --> 0:11:45.680 You can be a Bye at one twenty three and 0:11:45.679 --> 0:11:47.160 the stocks at one hundred, and then you're a cell 0:11:47.600 --> 0:11:50.360 at one sixty five when the stock is at seven hundred. 0:11:50.520 --> 0:12:07.960 There you go, speaking of stocks. 0:12:08.960 --> 0:12:10.120 Should I about SpaceX? 0:12:10.200 --> 0:12:10.400 Yeah? 0:12:10.440 --> 0:12:13.040 Probably public. I can't wait. 0:12:13.440 --> 0:12:15.760 You'll have to wait. It's supposedly going public in June. 0:12:15.880 --> 0:12:18.760 I know there's no real guarantee of that, that's true, 0:12:18.840 --> 0:12:21.440 especially if they want to do some interesting M and A. 0:12:21.920 --> 0:12:25.360 I love it so much. Decided to buy Cursor, Yeah, 0:12:25.520 --> 0:12:27.800 for like reasons, like they're. 0:12:27.600 --> 0:12:28.960 A fundamental reasons. 0:12:29.000 --> 0:12:32.320 Yeah. Then Thomson stra Techery has a nice piece about 0:12:32.480 --> 0:12:36.000 why this makes sense, right, I mean, like SpaceX has 0:12:38.400 --> 0:12:41.080 SpaceX is a rocket company, but it's also an AI company, 0:12:41.120 --> 0:12:43.080 And as an AI company, it's like quite good at 0:12:43.160 --> 0:12:45.000 getting chips and building data centers and just sort of 0:12:45.040 --> 0:12:47.680 like infrastructure. Yes, but you know it's a hot mess 0:12:47.760 --> 0:12:51.680 in terms of building a model, and so it seems 0:12:51.720 --> 0:12:56.000 a little bit like they're importing a AI lab into that, 0:12:56.200 --> 0:13:00.440 you know, use their AI infrastructure, which makes sense, right. 0:13:00.600 --> 0:13:02.520 It turns out like the big use case for AI 0:13:02.640 --> 0:13:05.959 right now is coding tools and XAI fell behind in 0:13:06.000 --> 0:13:09.400 the coding tools race and Cursor had a lead in 0:13:09.440 --> 0:13:11.360 the coding tools race, and you know, maybe even the 0:13:11.440 --> 0:13:13.680 MOS of chips will help with that. So it makes sense. 0:13:14.160 --> 0:13:17.400 But the problem with it is that theoretically SpaceX is 0:13:17.400 --> 0:13:19.439 going public in June, yeah, and it's. 0:13:19.360 --> 0:13:22.479 April and not for much longer either. 0:13:22.520 --> 0:13:25.880 No, And traditionally, when you go public, you like, you know, 0:13:26.040 --> 0:13:31.000 disclose information about your business, and like SpaceX's business is 0:13:31.080 --> 0:13:33.480 changing from week to week, as you can tell from 0:13:33.520 --> 0:13:35.800 the fact that it's called SpaceX and we're talking about 0:13:35.800 --> 0:13:36.640 its AI business. 0:13:36.760 --> 0:13:39.000 Yeah, well, data centers in. 0:13:38.920 --> 0:13:40.320 Space, Data centers in space. 0:13:40.320 --> 0:13:43.439 Absolutely, it's real, Matt, it's. 0:13:43.000 --> 0:13:46.240 Something, it's it's it's really going to be a part 0:13:46.240 --> 0:13:50.040 of the pitch. But the point is you can't like 0:13:50.240 --> 0:13:54.480 acquire Cursor, generate pro form of financials, put the pro 0:13:54.520 --> 0:13:58.000 form of financials into the prospectus, run it by the 0:13:58.120 --> 0:14:02.640 SEC get the auditors to seign off, educate the research 0:14:02.720 --> 0:14:06.000 analysts about it, and go public in June. If you're 0:14:06.040 --> 0:14:08.080 signing that deal in April. So they're not doing that. 0:14:08.080 --> 0:14:11.080 They're like, we're gonna buy Cursor, but we gotta do 0:14:11.120 --> 0:14:12.960 it after the IPI, So just put a pin in that, 0:14:13.600 --> 0:14:16.440 telling everyone we're planning it now, but no promises, no 0:14:17.120 --> 0:14:20.560 promises that are certain enough to require us to realize 0:14:20.560 --> 0:14:21.680 the IPI perspectives. 0:14:21.880 --> 0:14:24.760 I wonder if in the meantime you see another bitter emerge. 0:14:25.440 --> 0:14:28.600 It's an interesting question. I was thinking the opposite, which is, 0:14:28.680 --> 0:14:31.720 like Elon Musk has some track record of changing his 0:14:31.800 --> 0:14:34.520 mind about m and a mm hmm, particularly here, Like 0:14:34.720 --> 0:14:36.560 it seems apparent that this is not like they're signing 0:14:36.640 --> 0:14:39.600 a deal and then meeting once a week on a 0:14:39.640 --> 0:14:41.800 conference room to negotiate into CREATIONIA. It's pretty clear that 0:14:41.840 --> 0:14:44.040 like those guys are going to work at SpaceX tomorrow, 0:14:44.120 --> 0:14:46.000 you know, so, like they have a lot of time 0:14:46.040 --> 0:14:48.320 to fall out of love with Elon Musk, or for 0:14:48.400 --> 0:14:51.120 him to fall out of love with them, and if 0:14:51.160 --> 0:14:54.760 he changes his mind, he has to pay a ten 0:14:54.840 --> 0:14:57.880 billion dollar breakup fee. Break up He's like traditionally are like, 0:14:57.920 --> 0:14:59.800 you know, on the order of two percent of deal, 0:15:00.200 --> 0:15:02.400 and this one is seventeen percent of deal value. 0:15:02.440 --> 0:15:04.080 I was going to say, I mean even compared to 0:15:04.120 --> 0:15:06.040 like the Warner Brothers Discovery breakup like this. 0:15:06.040 --> 0:15:07.360 It's an enormous breakup fee. 0:15:07.480 --> 0:15:08.000 Yeah. 0:15:08.040 --> 0:15:10.640 And here's why. One because it's not like a signed deal. 0:15:10.680 --> 0:15:12.240 It's a little bit weirder, so it's like buying an 0:15:12.280 --> 0:15:14.480 option rather than like really signing a deal with a 0:15:14.520 --> 0:15:18.760 breakup fee. And two, he has a track record, you. 0:15:18.760 --> 0:15:21.360 Know, Twitter, which is part of XAI. 0:15:21.200 --> 0:15:24.240 Which is part of When Musk was like trying to 0:15:24.240 --> 0:15:25.960 get out of the Twitter deal, I had so many 0:15:25.960 --> 0:15:27.680 people email me and I kept thinking about it, like, 0:15:28.560 --> 0:15:31.000 is this going to affect his ability to do m 0:15:31.040 --> 0:15:33.040 and A in the future. Will people be hesitant to 0:15:33.080 --> 0:15:35.840 sign MNA deals with Elon Musk in the future after 0:15:35.880 --> 0:15:40.000 he flaked on this one? And he's the answer, Yeah, 0:15:40.040 --> 0:15:41.320 you gotta pay a lot of money. 0:15:41.640 --> 0:15:48.920 Because it is interesting that Musk's ambitions here are bumping 0:15:49.000 --> 0:15:51.280 up against like real human timelines. If he did want 0:15:51.280 --> 0:15:53.640 to really buy Cursor, he can't do it before the IPO. 0:15:53.720 --> 0:15:55.520 It just physically can't happen. 0:15:55.880 --> 0:15:57.960 You say, physically, Like the jerker is always that Elon 0:15:58.000 --> 0:16:00.440 Musk is constrained only by the laws physics about the 0:16:00.520 --> 0:16:03.040 laws of friends at the SEC, and you could imagine, 0:16:03.680 --> 0:16:06.080 you know, him yelling at the lawyers who like, please 0:16:06.120 --> 0:16:09.600 don't close another deal between now and the IPO. You 0:16:09.600 --> 0:16:13.000 can imagine being like, ad, it's just doing physically impossible. 0:16:14.320 --> 0:16:17.360 For whatever reason they didn't do it, they decided to 0:16:17.840 --> 0:16:18.400 hold off. 0:16:18.440 --> 0:16:21.160 It pours cold water also on some of the speculation 0:16:21.400 --> 0:16:26.800 of SpaceX combining with Tesla, because it kind of I 0:16:26.840 --> 0:16:28.760 don't think for the IPO it does. 0:16:29.040 --> 0:16:30.480 It's not going to come out before the IPO. 0:16:30.680 --> 0:16:31.200 Yeah. 0:16:31.280 --> 0:16:33.800 So the other thing that I wrote about SpaceX this 0:16:33.880 --> 0:16:36.840 week is that SpaceX is going public with dual class stock, 0:16:37.320 --> 0:16:40.400 so I don't know the perspectives is not public and 0:16:40.480 --> 0:16:42.640 like it's you know, they're blanks anyway. But I don't 0:16:42.640 --> 0:16:45.080 know how much Elon Musk owns, but like he will 0:16:45.120 --> 0:16:49.080 have ten times voting stock he shares with ten votes 0:16:49.080 --> 0:16:55.040 per share, so he will control SpaceX probably, which makes 0:16:55.080 --> 0:16:58.120 sense because one, if you're investing in SpaceX, you are 0:16:58.160 --> 0:17:01.520 clearly buying into the Elon Musk machine. And two, from 0:17:01.640 --> 0:17:05.040 his perspective, you know, like he said about Tesla, I 0:17:05.040 --> 0:17:07.639 don't want to build a robot army at Tesla if 0:17:07.640 --> 0:17:11.560 I don't control it. And all the more so when 0:17:11.560 --> 0:17:14.960 he's building like an intergalactic robot army to colonize Mars 0:17:15.280 --> 0:17:17.560 and data center, you know, all this stuff, like he 0:17:17.640 --> 0:17:19.639 needs to control it. So I get it. He's going 0:17:19.680 --> 0:17:21.639 to control SpaceX. It's going to go public with du 0:17:21.680 --> 0:17:24.600 a class stock. Tesla did not go public with du 0:17:24.640 --> 0:17:27.280 a class stock. And you can't really add it afterwards, 0:17:27.480 --> 0:17:29.080 like even if you get the shaoulders to vote to 0:17:29.080 --> 0:17:31.200 approve it, like the stock exchange rules like they don't. 0:17:31.240 --> 0:17:33.840 They don't like it. So he can't really add du 0:17:33.840 --> 0:17:36.000 a class stock in Tesla. And so there's these weird things. 0:17:36.119 --> 0:17:38.280 Every few years he gets a trillion dollar payback that 0:17:38.400 --> 0:17:41.040 then we talk about, you know, whether that's legal. It 0:17:41.040 --> 0:17:42.760 wouldn't be a trillion dollar pay package if they're just 0:17:42.800 --> 0:17:46.840 like you get ten times as many votes. Anyway, there 0:17:46.880 --> 0:17:49.920 is an obvious solution to all of these problems, which 0:17:50.000 --> 0:17:54.879 is you take SpaceX public with dual class stock. Elon 0:17:54.960 --> 0:17:59.000 Musk controls the votes and then two weeks later, maybe 0:17:59.040 --> 0:18:03.520 two weeks is optimistic. Two months later and then the 0:18:03.560 --> 0:18:06.000 combined company has doll class stock and Elon Musk controls 0:18:06.040 --> 0:18:08.080 both of them forever, and like they both you know, 0:18:08.760 --> 0:18:11.639 there's some overlap in like they're both building robot armies. 0:18:11.800 --> 0:18:14.639 Yes, like you know you only need one company building 0:18:14.720 --> 0:18:16.120 robot robot army. 0:18:16.160 --> 0:18:19.520 Well, you wouldn't want the robot armies to fight. 0:18:19.640 --> 0:18:20.880 I mean I would like. 0:18:20.840 --> 0:18:21.280 To see that. 0:18:21.800 --> 0:18:25.840 Yes, actually that would be probably probably like give them 0:18:25.920 --> 0:18:29.640 good for humanity. Elon Musk's root armies fight and annihilate 0:18:29.680 --> 0:18:33.400 each other, like somewhere off the shoulders of Oryon, you know, like. 0:18:33.520 --> 0:18:35.600 Just a theory. 0:18:35.600 --> 0:18:38.919 I want to get your take on. Is you know 0:18:38.960 --> 0:18:42.280 Tesla reported earnings on Wednesday, broke those on live TV. 0:18:42.480 --> 0:18:47.240 But right now Tesla is the only public option to 0:18:47.359 --> 0:18:50.440 get into the Elon Musk machine, as you call it. 0:18:50.840 --> 0:18:54.040 I do wonder if SpaceX going public takes the shine 0:18:54.880 --> 0:18:57.400 off of Tesla and sort of collapses the Elon Musk 0:18:57.400 --> 0:18:58.040 premium there. 0:18:58.560 --> 0:19:01.200 I think it's very possible. I think it's so interesting 0:19:01.240 --> 0:19:03.160