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Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.

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Speaker 1: I'm Joe Wisn't Thal and I'm Tracy Alloway. Tracy UM.

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Speaker 1: You know, we've done a few episodes on SPACs, and

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Speaker 1: obviously at this point, I don't think anyone has missed

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Speaker 1: the incredible spack boom that we've seen over the last

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Speaker 1: several months. But I have to admit I still have

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Speaker 1: like tons of questions about like how they work and

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Speaker 1: where this all came from. I was just thinking, if we, uh,

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Speaker 1: if we timed our all thoughts back episodes for every

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Speaker 1: time a new SPAC entered the market, we'd be doing

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Speaker 1: what like two or three episodes per week for each SPAC.

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Speaker 1: It's been insane the number that have come to market. No,

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Speaker 1: it would be way more than two or three episodes

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Speaker 1: per week. Tracy. You know that last Friday, so we're

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Speaker 1: recording this on I think it's Tuesday, February. Last Friday,

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Speaker 1: there were thirteen SPACs filed in one day last Friday,

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Speaker 1: and then I think there were like another five that

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Speaker 1: like we're out by like Monday morning the next week.

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Speaker 1: So we would never we would just be all SPACs

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Speaker 1: all the time. There's no way our producer Laura would

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Speaker 1: be able to handle the handle the long, our long

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Speaker 1: suffering producer. So here's one thing that I always think

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Speaker 1: of when we talk about SPACs. I get a little

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Speaker 1: bit nervous when the focus is on a particular capital

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Speaker 1: markets tool, Like it's never a good indicator for where

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Speaker 1: you are in the cycle. When people start talking about

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Speaker 1: the actual packaging of the product versus the content. Yeah,

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Speaker 1: that is a pretty I agree. I mean that is

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Speaker 1: kind of weird. People are more interested in the phenomenon

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Speaker 1: of SPAC than like the companies. The other question that

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Speaker 1: I have, and this is something it is like where

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Speaker 1: do they come from? Because one of the things that

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Speaker 1: we've see is that a lot of them like are

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Speaker 1: associated with a very well known name, like for example,

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Speaker 1: you know, like Colin Kaepernick for example, the quarterback um

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Speaker 1: has a SPACK. And what I was like, did he

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Speaker 1: reach out to someone say I want to do a

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Speaker 1: SPAC or did someone reach out to him and say, Colin,

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Speaker 1: you should really be involved in our spect There's like

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Speaker 1: a bunch of names like I saw, Like I swear

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Speaker 1: to god, it's so weird. Like the former editor in

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Speaker 1: chief of Cosmo, the magazine is involved in a spack

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Speaker 1: that to take the clearing company behind, like we will

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Speaker 1: like it's it's just there's a bunch of weird stuff.

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Speaker 1: But I like where did these come from? And who

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Speaker 1: like brought in the where did he? You know, whose

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Speaker 1: idea was it to bring in the former editor in

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Speaker 1: chief of Cosmo to do a spec our former Bloomberg

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Speaker 1: News colleague Betty Lewis doing a spec Like where did

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Speaker 1: that come from? I have all these questions I want

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Speaker 1: to know, like wh was that? It was it over

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Speaker 1: some zoom, Like how did this happen? Well, when a

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Speaker 1: venture capitalists loves a company very much, they get together,

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Speaker 1: right now, that's not where spacts come from. Um, yes,

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Speaker 1: I agree, Like, obviously this is a hot phenomenon in

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Speaker 1: markets right now. It does feel like a bunch of

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Speaker 1: people are jumping on the bandwagon. But how does the

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Speaker 1: actual process work? Who approaches who? And then of course,

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Speaker 1: like how does the actual process of raising money and

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Speaker 1: finding a company to acquire or merge with work? So

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Speaker 1: I'm very excited about our episode today because I think

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Speaker 1: we might at least answer some of these questions and

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Speaker 1: where they come from. What the opportunity is with someone

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Speaker 1: who it's very, very open and honest, and I think

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Speaker 1: will be really help us demystify the whole thing. We're

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Speaker 1: going to be speaking with Howard lenz In. Um. He

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Speaker 1: has a VC. He's a founding partner at the venture

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Speaker 1: capital firm Social Leverage. Bunch of big winners, right. He

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Speaker 1: was an early investor in robin Hood and stock twits

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Speaker 1: and Toro and a company called Manscape dot com, which

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Speaker 1: will learn more about. But I basically like know Howard

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Speaker 1: lens In and a lot of people do because he's

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Speaker 1: been on Twitter for a long time talking about tag

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Speaker 1: and investing, extremely open and when I he's always sort

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Speaker 1: of one of these people that I think just has

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Speaker 1: this sort of uncanny intuition about where the puck is going,

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Speaker 1: as they say in hockey. And it's like sometimes I

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Speaker 1: see him and he's talking about stuff and I'm like

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Speaker 1: this is crazy, but he always ends up sort of

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Speaker 1: being right and sort of has this just sort of

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Speaker 1: feel of where the market's going, where stocks are going,

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Speaker 1: where VC is going, where tech is going. And now

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Speaker 1: he is the CEO of a spec and he is

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Speaker 1: uh recently, I think late January filed the S one

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Speaker 1: for Social Leverage Acquisition Corps, and we're going to learn

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Speaker 1: more about his process and why he's doing it and

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Speaker 1: how it came about. Here all the wisdom of Howard Linsen. So, Howard,

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Speaker 1: thank you so much for joining us intro. I totally

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Speaker 1: mean it. I mean I followed you online. We've talked

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Speaker 1: for probably a decade now, over a decade, I think

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Speaker 1: probably like two eight. You were probably one of the

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Speaker 1: first people that thought Twitter was good to be a

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Speaker 1: really big thing, and you thought Twitter was going to

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Speaker 1: be a big thing for markets, which it turned out

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Speaker 1: to be in particular. So I've always sort of enjoyed

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Speaker 1: following your stuff. But you know, like, where did this

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Speaker 1: come from? Like let's just start like where did one

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Speaker 1: Where did the idea of the light bulb come off?

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Speaker 1: To launch us back? So it's a great question because

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Speaker 1: there is an origin story for everything, and you get

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Speaker 1: the I'm from Toronto, so you get as back when

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Speaker 1: you're born. It's like it's like a Tim Horton's doughnut

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Speaker 1: that you you're entitled to a spack that goes to

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Speaker 1: zero and record time. The So I think, you know,

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Speaker 1: growing up in Toronto with the the mining and Saskatchewan

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Speaker 1: and drilling for oil and belize, and that was Canada.

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Speaker 1: Like I mean, you didn't call your broker and asked

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Speaker 1: for a tech growth stock. You got served as back

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Speaker 1: and you didn't have a good experience with them spacks.

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Speaker 1: So I have to say I had a very twisted

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Speaker 1: I would curl my mustache. If I had a mustache,

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Speaker 1: I would play with it all the time. Color me surprised.

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Speaker 1: I was My last pre COVID memory of a fun

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Speaker 1: time was that this incredible dinner at Carbones, which is

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Speaker 1: like an institution, you know, for some reason in New York,

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Speaker 1: hard to get into Italian place. And I was sitting

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Speaker 1: at a table with Adam Bain as a friend and

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Speaker 1: really amazing entrepreneur and former CFO of Twitter, former CEO

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Speaker 1: or CFO. He's had every every job there. He's kryptonite,

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Speaker 1: this man. You know, I'm kind of cousins with him.

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Speaker 1: I'm actually like fourth cousins. You're like the Adam Baine

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Speaker 1: of media. You're like me, are you really looking for

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Speaker 1: a compliment right now? We're going to do our own

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Speaker 1: sac No, but keep going. But I am actually very

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Speaker 1: weirdly related to that guy. And you know me because

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Speaker 1: it's funny because you talked about some stuff. One of

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Speaker 1: my favorite companies that ever was a seat investor was

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Speaker 1: your company that you worked for with Henry. I was

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Speaker 1: one of Henry's first investors at Ali Insider, Business insider,

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Speaker 1: whatever the hell they call it these days in the

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Speaker 1: trade n f t S. And you'll probably have me

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Speaker 1: on in six months to talk about n f t s.

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Speaker 1: But anyway, so I'm sitting in February and Carbones, and

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Speaker 1: there was two things that you talked about at the time.

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Speaker 1: With Adam Bain. We were talking about what the hell

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Speaker 1: is going on with this COVID thing, what are we

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Speaker 1: gonna be doing? We didn't know it would be locked

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Speaker 1: down a week later, two weeks later forever. And uh,

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Speaker 1: what is this spac that you speak of? Like everybody

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Speaker 1: was very Everybody was talking about Virgin Collactic, which was

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Speaker 1: an Adam Bain production with Chama that was done by Spack,

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Speaker 1: and as a Canadian, I was very I looked at

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Speaker 1: him and I was like, oh God, what are you

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Speaker 1: doing to people, Adam Bain, You're supposed to be a

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Speaker 1: nice guy. He took the time to to walk us

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Speaker 1: through how Chamath was thinking about Spacks. So we're kind

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Speaker 1: of like ground zero because you know, if you had

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Speaker 1: told me that COVID would strike two weeks later and

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Speaker 1: the country would shut down, I would have said, yeah,

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Speaker 1: I saw that coming kind of But if you said

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Speaker 1: it would lead to stocks only go up and barstool

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Speaker 1: Dave and Chamath being the new Warren Buffett and spacks

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Speaker 1: backs back discussions on your show by the following year,

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Speaker 1: I would have laughed. I would have giggled like a

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Speaker 1: like a child. And so so he explains to us

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Speaker 1: what a what a spack is and how they were

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Speaker 1: using it more importantly for growth ideas. Right, So spacks

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Speaker 1: have been around an elegant really an elegant feature, right

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Speaker 1: for a punch of entrepreneurs that have influenced right, kind

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Speaker 1: of like they talked about director, consumers these days are

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Speaker 1: around the influencer network and so in in the most

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Speaker 1: simplest term, I understood the edit that the wedge the

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Speaker 1: pivot of a spack to be still about the promoter

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Speaker 1: slash creator slash influencer, but more about how they were

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Speaker 1: going to use it. They weren't just going to use

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Speaker 1: it to go speculate on a mining uh. Discovery facts

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Speaker 1: have always been this elegant feature. It's been around for

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Speaker 1: a long time, and much like the swipe became an

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Speaker 1: important thing on the iPhone with Tinder SPACs, subtle chain

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Speaker 1: was the fact that we had the cloud, we had

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Speaker 1: this growth, and for ends, we had zero interest rates.

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Speaker 1: We have these new influencers like Chama, we have a

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Speaker 1: lack of I p O s. And then I think

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Speaker 1: one of the most important things was you also had

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Speaker 1: this late stage money in the hands of what we

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Speaker 1: found out where some empty suits let's call them, or

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Speaker 1: like promoters themselves and weren't creating any value like we

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Speaker 1: work like soft Bag story and like t row price

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Speaker 1: and fidelity, So that late stage money, all these things

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Speaker 1: were combining together for a perfect moment for spects. But

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Speaker 1: we didn't know that. But you know, along the way,

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Speaker 1: like we're soft Bank was writing four or five million

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Speaker 1: dollars checks based on an Uber ride, you know, based

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Speaker 1: on their feelings about a CEO at the Uber. And

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Speaker 1: I think that whole concoction, that whole moment in time

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Speaker 1: back last year, guys like me learning from Adam Bay

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Speaker 1: in a ground zero how they were you know, tinkering

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Speaker 1: with the with the back towards growth and towards uh

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Speaker 1: big ideas versus drilling a hole in the ground and

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Speaker 1: you know, rolling up something in real estate or something

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Speaker 1: in finance. Was this, Oh my god, if soft bank

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Speaker 1: can do this, we can do this, you know. That

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Speaker 1: was my epiphany, was like, we would make fun of

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Speaker 1: soft Bank and there and their silly investments in the

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Speaker 1: way they folded money into the market, And how is

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Speaker 1: that different than us back, Like it's it's it's really

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Speaker 1: just an expression on how you feel about the the

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Speaker 1: person running this back. So so you have this epiphany

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Speaker 1: that you can start your own spack do whatever soft

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Speaker 1: Bank does. How do you actually get the ball rolling? Like,

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Speaker 1: what does that inception process look like? Well, for me,

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Speaker 1: that's a good question for me, it was like, well,

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Speaker 1: I'm not going to do this. I'm like, the last

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Speaker 1: thing I want to do is go through the process

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Speaker 1: of hiring an expensive law firm, uh, to do an

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Speaker 1: S one, going on a road show, uh, and pitching

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Speaker 1: people you know in a room about you know, because

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Speaker 1: this is still about raising money. You know. It's back

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Speaker 1: is all fancy term and it looks so sexy because

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Speaker 1: we're a public company and we have a lot of cash.

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Speaker 1: But really behind all that. It's just a lot of

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Speaker 1: boring and very detailed and careful disclosures about what this

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Speaker 1: you know entity will do and you know what is

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Speaker 1: its purpose? Who is on the team, Why did you

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Speaker 1: assemble this team, what do you plan to do? What

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Speaker 1: are your high level of focuses? So so you need

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Speaker 1: a quarterback for all this, And lucky for me at

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Speaker 1: that dinner was my friend Doug Horlick, who's an next

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Speaker 1: Goldman guy, and he just his ears perked up when

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Speaker 1: he was listening to Adam Bain and he was like

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Speaker 1: taking notes. We're all like joking around and and enjoying

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Speaker 1: our our last meal. It turns out pre COVID. But

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Speaker 1: he came out of that meeting dog and he said, Howard,

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Speaker 1: you're the perfect guy to be the CEO of a spack.

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Speaker 1: You have this huge audience of which you can talk to.

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Speaker 1: People trust you. You've got all this uh trust built up.

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Speaker 1: You know, why shouldn't you quarterback back? And I said,

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Speaker 1: you know, I don't want anything to do with this,

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Speaker 1: with the regulatory and in the hoops and the detail. Um.

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Speaker 1: But he said, I got your back. I know how

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Speaker 1: to do this, and off we went. So Now I

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Speaker 1: had a partner, Doug Horlick, who really had a lot

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Speaker 1: of experience in markets. He also knew who to call

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Speaker 1: in the banking side, just pitched the idea and see

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Speaker 1: if they would be as excited as he was about

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Speaker 1: this idea that than that. So that was the first

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Speaker 1: step that we needed someone too that I felt there's

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Speaker 1: no way I was going to go down this road

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Speaker 1: with just Doug. We needed someone who had public market experience, right.

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Speaker 1: So sure the media hasn't having a field d and

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Speaker 1: say oh anybody should have us back, right, and we

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Speaker 1: all we all fall prey to that. It's just whatever

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Speaker 1: whoever's got the hot tape. But really I would say,

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Speaker 1: do not do this unless you have someone at your

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Speaker 1: side who has tremendous public market experience. And for me,

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Speaker 1: that was Paul Grimberg, who happened to be an LP

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Speaker 1: and was president of Encore Capital, which is, you know,

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Speaker 1: a global financial lending business, and also the chairman of

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Speaker 1: Axos Bank, which is a large public bank, profitable public bank.

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Speaker 1: So what a perfect moment for me to know someone

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Speaker 1: like that, and I called Paul. Has raised money around

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Speaker 1: the world his jobs and overseeing audits of public companies

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Speaker 1: and overseeing, you know, the growth of profitability of a

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Speaker 1: public bank. And I said, is this is this something

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Speaker 1: you can help me with? And you got really excited,

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Speaker 1: he says, oh, man with your network. And so we

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Speaker 1: got Paul Grimberg on. So now we have the makings

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Speaker 1: of a band. As you would say, it's like the

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Speaker 1: traveling willberrys of finance. I've got a Goldman person, I've

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Speaker 1: got a public market chairman of a of a great

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Speaker 1: bank in the New York Stock Exchange. And now I

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Speaker 1: just got to keep filling out the band. And so

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Speaker 1: my next piece of the publics how to find some

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Speaker 1: partners that have targets. So so now if you are

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Speaker 1: going to do its back, you've got to, like I said,

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Speaker 1: find someone to put the banking relationships together and and

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Speaker 1: ensemble a road show. You also need someone to get

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Speaker 1: you through the s process. And I would say, don't

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Speaker 1: just hire scattering or some expensive attorney, which we did,

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Speaker 1: but you need someone to guide these attorneys, and you

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Speaker 1: need someone who understands how to do all the filings.

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Speaker 1: And that I found with Paul Grimberg. We had the

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Speaker 1: core of a SPAC team pretty quickly. But there's still

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Speaker 1: so much more that you have to put together. So

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Speaker 1: I want to go back to a point you made,

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Speaker 1: and you you know, it's like, we look at all

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Speaker 1: these SPACs run by public figures, and there's like, you know,

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Speaker 1: the the Use back and the Colin Kaepernick spack and

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Speaker 1: the founder the co founder of Facebook's back or the

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Speaker 1: co founder of Dell's back or the Betty Loose back,

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Speaker 1: and you mentioned and then of course the spacks we're

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Speaker 1: going to get. And you mentioned the importance of that

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Speaker 1: public network the promoter someone who's kind of basically an influencer.

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Speaker 1: Can you articulate specifically why in this current iteration of

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Speaker 1: the SPACs, whatever the SPAC cycle, what exactly your network,

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Speaker 1: your platform allows you to do and really allows you

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Speaker 1: to sort of contribute to the spec value creation. Okay,

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Speaker 1: this is all high level because I can't even explain it, like,

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Speaker 1: and you're asking me to explain something that I laugh

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Speaker 1: because I wish I could film the whole processes from

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Speaker 1: the eyes of a Larry David of finance. Right, I

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Speaker 1: look at this is all rather silly. I mean, it's

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Speaker 1: very important and I take this thing extremely seriously. Hopefully

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Speaker 1: the origin story helps with that. It's not like I

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Speaker 1: woke up, had lunch with Adam Bain and said, well,

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Speaker 1: like I joke and I said, well, Adam Bank can

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Speaker 1: do a spec. I can do a spec. Like that's

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Speaker 1: an easy, funny joke. But reality is Adam was explaining,

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Speaker 1: and that's the genius. It's just not a one minute

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Speaker 1: It's a very complicated process that people need that people

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Speaker 1: generally take seriously. I have to imagine because sec and lawyers,

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Speaker 1: and it's expensive. It's not free. So so getting to

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Speaker 1: the to the next part of it is um The

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Speaker 1: key thing here about the markets to understand is we

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Speaker 1: talk about the creator economy, right, Like, for there was

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Speaker 1: all these years where I was like, man, people like

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Speaker 1: my writing and they respect my work, but like, should

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Speaker 1: I set up a Shopify store to like, how do

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Speaker 1: I monetize all this daily writing on my blog and

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Speaker 1: my tweets and all these people that think I'm funny

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Speaker 1: or smart so so so I felt, as someone who

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Speaker 1: writes for free and gets all the feedback that maybe

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Speaker 1: I should have, I'm not monetized singing myself properly, right,

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Speaker 1: Like everybody has that feeling someone tells them they're great.

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Speaker 1: You know. Spacts are basically a perfect tool for financial

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Speaker 1: you know entrepreneurs, right. You know I have a farm

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Speaker 1: with two great partners, Tom and Gary. But when we

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Speaker 1: commit to a fund, we have to commit to twenty

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Speaker 1: five investments over three to five years. Together. We have

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Speaker 1: to go through the money raising process and you're in it.

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Speaker 1: You got to write an album. It's like Bruce Springsteen

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Speaker 1: in the East Street Band. If I would just say,

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Speaker 1: you know, music is like the closest thing to it

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Speaker 1: with a spack, I could put a separate band together,

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Speaker 1: like I said the Traveloy Wilbury to just try and

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Speaker 1: produce one hit. Okay, And there's a lot and something

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Speaker 1: more elegant about that, right when you consider how many

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Speaker 1: people can I just ask a real specific question. Is

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Speaker 1: it on the fundraising side that the platform helps, as in, okay,

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Speaker 1: we want to back the Howard Linson spac is either

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Speaker 1: from the people who buy into the I p O

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Speaker 1: or the pipe that's part of the process. Or is

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Speaker 1: it on the deal acquisition part that people wanted that

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Speaker 1: a company thinking about going public wants to be part

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Speaker 1: of it? Like, what specifically is the brand the Howard

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Speaker 1: Lendson What part does it help with the most that

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Speaker 1: you know Joshmo would have a harder time with That's

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Speaker 1: a good question. It really helped with all of them

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Speaker 1: and color me as surprised as everybody else because I

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Speaker 1: had Doug tell me, how are they're going to love

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Speaker 1: you that you don't understand they know what stock twitches

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Speaker 1: and they know what Twitter is, and I would laugh,

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Speaker 1: I said, I don't think so, right. So it was,

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Speaker 1: you know, it was very you know, it was very

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Speaker 1: much curby R exuberant I call it versus curb your enthusiasm.

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Speaker 1: I was. I was saying, guys, we're gonna go here,

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Speaker 1: and these headphones are gonna laugh us out of the

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Speaker 1: room because they don't even know what Twitter is. But

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Speaker 1: I think I guess they do. From the road show,

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Speaker 1: I learned that I actually have a little bit of

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Speaker 1: cashet in that world, and I think it helped the

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Speaker 1: game stop at Wall Street bets and and and read

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Speaker 1: it and Twitter and TikTok and social media and investing

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Speaker 1: things that you know I was talking about with you

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Speaker 1: and Henry Blodgett, you know, fifteen years ago, all of

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Speaker 1: a sudden, I am someone with some grab a toss

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Speaker 1: in that space. And I can't explain why it's now,

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Speaker 1: but it's just that perfect kind of moment that I

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Speaker 1: might have gotten lucky or you know, the people that

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Speaker 1: talk me gently said, Howard, this will be this. You'll

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Speaker 1: you'll kill them on Broadway, which is like you're going

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Speaker 1: to kill them on a zoom road show. And they're

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Speaker 1: gonna be prepared and they're gonna know what stuck to

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Speaker 1: its is and and to be honest Rail, you know

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Speaker 1: they did like the hedge funds that and the asset

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Speaker 1: managed from black Rock on down below. They know that

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Speaker 1: public companies have two things to sell. They have the

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Speaker 1: company itself, the product where the widget, whatever that company is.

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Speaker 1: And then when you're public, you also have your product

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Speaker 1: is the ticker. And you have to tell this story. Right,

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Speaker 1: There's there's Tesla the company, and then there's Tesla the

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Speaker 1: men's right, and some people are saying they're interchangeable today,

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Speaker 1: but the narrative is become And again this isn't just timing.

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Speaker 1: And this some time in market and spacts might not

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Speaker 1: have happened if COVID, you know, hadn't happen, or if

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Speaker 1: if there was only two ways to really go public,

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Speaker 1: which is Goldman and Morgan Stanley, right, like, there's only

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Speaker 1: two pipes that get you onto the onto the stage. Well,

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Speaker 1: of course all this going on SPACs became interesting, but

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Speaker 1: the most important thing to me was like the reception

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Speaker 1: was very strong for someone that understood social media, for

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Speaker 1: someone that understood the importance of helping a company that

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Speaker 1: is does choose to go public through respect how to

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Speaker 1: build a narrative, right, how our team can help just

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Speaker 1: as well as hero Price or Fidelity or soft Bank

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Speaker 1: or any late stage VC. How our team that we

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Speaker 1: assemble can help a company actually accelerate themselves post going public,

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Speaker 1: because the SPAC or the I p O is just

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Speaker 1: one day in the end, right, Like, how you choose

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Speaker 1: to go public, and you've probably heard this a hundred times,

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Speaker 1: it's just one day and then the bell gets wrong,

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Speaker 1: the stock gets traded, and the next day no one

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Speaker 1: remembers if you were public through an I p O

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Speaker 1: or through a spack. And I started seeing that happen

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Speaker 1: with drafting, you know, as someone who started stock to it,

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Speaker 1: I was seeing this happen with Virgin Galactic. I'm like,

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Speaker 1: I was just as surprised as the next guy. The

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Speaker 1: draft Kings was a successful spack, so you know, you

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Speaker 1: start seeing a few successes and you start trying to

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Speaker 1: glean from podcasts. You know, I've had Jason Robinson on

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Speaker 1: my podcast We Found It Um Draft Kings, and I'm

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Speaker 1: asking him questions, you know, with him not knowing that

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Speaker 1: I'm in the middle of doing a back and I'm

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Speaker 1: listening and I'm getting his his brain explaining to me

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Speaker 1: how this whole process went down. So there's all these

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Speaker 1: ways to quickly learn and draft behind other people that

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Speaker 1: do it as well, which is different than any other

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Speaker 1: moment in time. So, Howard, one thing I've always been

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Speaker 1: curious about is what this s back road show actually

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Speaker 1: looks like in terms of the fund raising process. So,

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Speaker 1: you know, normally, when you have a road show to

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Speaker 1: I don't know, do an I P O or to

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Speaker 1: sell a bond or something like that, you have a

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Speaker 1: specific product or company that you are pitching to investors.

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Speaker 1: But of course, in this case, you have the shell

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Speaker 1: of this fact that you are launching and a sort

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Speaker 1: of mandate or idea about the kind of companies that

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Speaker 1: you're interested in buying or merging with. How do how

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Speaker 1: do those conversations actually unfold and what do they look like?

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Speaker 1: And also how did you decide on your acquisition um

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Speaker 1: target industry? All good questions, the the and all the

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Speaker 1: important things that have to happen. So I was learning

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Speaker 1: in real time, you know I call I say it

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Speaker 1: learned by doing, by seeing other people that were contemporaries

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Speaker 1: or mind doing it, and having the lucky ability to

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Speaker 1: talk to these people, and having the capital in the

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Speaker 1: network to be able to form a team to go

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Speaker 1: do this. The road show was mesmer you know, it

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Speaker 1: was staggering to me. It's like, wait a minute, we

430
00:24:03,560 --> 00:24:04,960
Speaker 1: don't have to get on a small plan and go

431
00:24:05,040 --> 00:24:06,719
Speaker 1: to Toronto in the middle of the day to do

432
00:24:06,800 --> 00:24:09,040
Speaker 1: one meeting in Montreal and then I back up to

433
00:24:09,080 --> 00:24:11,240
Speaker 1: New York to do this. And I think the bankers

434
00:24:11,240 --> 00:24:14,200
Speaker 1: have discovered this too too. It takes two to tango.

435
00:24:15,040 --> 00:24:17,200
Speaker 1: Let's do math and say your raise three d million,

436
00:24:17,200 --> 00:24:20,320
Speaker 1: Well banks charged two percent. So on a three million dollars,

437
00:24:20,359 --> 00:24:25,280
Speaker 1: Remember who makes six million dollars risk free? Are the banks?

438
00:24:25,600 --> 00:24:28,639
Speaker 1: And so the banks have a new toy of which

439
00:24:29,320 --> 00:24:31,719
Speaker 1: of that six million. In the olden days, let's call

440
00:24:31,760 --> 00:24:35,560
Speaker 1: it pre COVID. The olden days of road shows, you

441
00:24:36,040 --> 00:24:38,000
Speaker 1: it was very expensive for a bank to put on

442
00:24:38,000 --> 00:24:40,200
Speaker 1: a road show. You know, flights had to be made,

443
00:24:40,320 --> 00:24:42,960
Speaker 1: schedules had to be made, meetings had to be canceled,

444
00:24:43,359 --> 00:24:47,840
Speaker 1: Pineapple how to be ordered for the food room, and occasionally,

445
00:24:47,880 --> 00:24:51,199
Speaker 1: you know, a little booze, a little steak. So you know,

446
00:24:51,240 --> 00:24:54,800
Speaker 1: the bank's margins have gone from on a road show

447
00:24:54,840 --> 00:24:59,040
Speaker 1: to ninety eight point nine percent. And so the banks,

448
00:24:59,359 --> 00:25:01,359
Speaker 1: you know, we can make fun of zoom and oh

449
00:25:01,400 --> 00:25:04,040
Speaker 1: it zooms the next day. I'll have heard some very

450
00:25:04,080 --> 00:25:06,520
Speaker 1: smart people saying I look back and go, I don't

451
00:25:06,520 --> 00:25:09,080
Speaker 1: think they've ever been on a banking zoom road show.

452
00:25:09,119 --> 00:25:12,920
Speaker 1: You're not going to put that genie back in the bottle. So, banks,

453
00:25:13,480 --> 00:25:16,520
Speaker 1: if you told me that I could raise three million

454
00:25:16,640 --> 00:25:21,520
Speaker 1: over Zoom amongst some of the top financial hedge funds

455
00:25:21,520 --> 00:25:24,000
Speaker 1: and investors in the world, I would have laughed you

456
00:25:24,040 --> 00:25:26,000
Speaker 1: out of the room. On top of laughing you out

457
00:25:26,000 --> 00:25:27,520
Speaker 1: of the room for all the other things I've told

458
00:25:27,520 --> 00:25:29,679
Speaker 1: you about today, that would have been the one I

459
00:25:29,760 --> 00:25:32,120
Speaker 1: really would have had a good chuckle at. But yes,

460
00:25:32,400 --> 00:25:38,479
Speaker 1: Zoom and the road show is an incredible, magical, weird,

461
00:25:39,480 --> 00:25:45,399
Speaker 1: very useful way to raise capital and tell stories. And

462
00:25:45,440 --> 00:25:47,760
Speaker 1: I think that would be one of the most incredible

463
00:25:48,200 --> 00:25:53,360
Speaker 1: long term financial effects of COVID will be Yeah, kids

464
00:25:53,400 --> 00:25:54,879
Speaker 1: should go to school, of course, they should go to

465
00:25:54,960 --> 00:25:58,359
Speaker 1: school and socialize. You know who shouldn't go anywhere and

466
00:25:58,440 --> 00:26:02,920
Speaker 1: socialize or hedge funds and they found their toy. Uh,

467
00:26:02,960 --> 00:26:06,119
Speaker 1: and they're using social networks to do their due diligence

468
00:26:06,200 --> 00:26:08,920
Speaker 1: because hey, it's a lot better than going through customs

469
00:26:09,119 --> 00:26:13,120
Speaker 1: New York Toronto or Toronto to London. Uh. And by

470
00:26:13,119 --> 00:26:15,440
Speaker 1: the way, we have LinkedIn and we have social networks,

471
00:26:15,440 --> 00:26:18,359
Speaker 1: and we have UH, we'll have more tools to to

472
00:26:19,000 --> 00:26:22,160
Speaker 1: background check people. And there's a lot you can get

473
00:26:22,200 --> 00:26:25,359
Speaker 1: a lot more meetings done and a lot more capital

474
00:26:25,440 --> 00:26:29,400
Speaker 1: raised over zoom if everybody is is committed to the process.

475
00:26:29,440 --> 00:26:33,720
Speaker 1: And that's that's where we have so many stacks because

476
00:26:33,760 --> 00:26:38,720
Speaker 1: both the suppliers and the demand on both sides are exploding.

477
00:26:39,359 --> 00:26:43,040
Speaker 1: The marketplace is getting endless supply and endless demand right

478
00:26:43,080 --> 00:26:46,760
Speaker 1: now because both sides want the product. So what does

479
00:26:46,840 --> 00:26:49,680
Speaker 1: the pitch actually look like? Though? In the road show,

480
00:26:49,800 --> 00:26:52,719
Speaker 1: so you say I'm starting it back, I'm Howard Lindson.

481
00:26:52,960 --> 00:26:56,680
Speaker 1: We're thinking of buying these types of companies and like,

482
00:26:57,680 --> 00:27:02,320
Speaker 1: what's the value proposition there? Well, I mean the value

483
00:27:02,359 --> 00:27:06,680
Speaker 1: proposition is do these First of all, we're in a

484
00:27:06,800 --> 00:27:10,159
Speaker 1: zero rate, We're in a low interest rate environment. So

485
00:27:10,280 --> 00:27:14,280
Speaker 1: the that's not they're not stupid people of the hedge funds.

486
00:27:14,320 --> 00:27:16,960
Speaker 1: You know a lot of the enticements, the warrants which

487
00:27:16,960 --> 00:27:20,119
Speaker 1: are now quickly coming down to zero as we're seeing.

488
00:27:20,400 --> 00:27:23,680
Speaker 1: But the other thing is do I trust this group

489
00:27:23,680 --> 00:27:28,720
Speaker 1: of people to get a deal done? If we give

490
00:27:28,840 --> 00:27:31,679
Speaker 1: this group money, will they go out and do a

491
00:27:31,720 --> 00:27:36,360
Speaker 1: good job finding a target and finding a company and

492
00:27:36,440 --> 00:27:38,560
Speaker 1: getting out of their way or getting in their way

493
00:27:38,840 --> 00:27:42,479
Speaker 1: and making the change that happen that create uh, you know,

494
00:27:42,800 --> 00:27:45,960
Speaker 1: market beating returns out of the out of the target

495
00:27:46,000 --> 00:27:49,000
Speaker 1: that they find. It comes down to performance and can

496
00:27:49,119 --> 00:27:51,960
Speaker 1: I bet on this team to get a job done.

497
00:27:52,040 --> 00:27:55,200
Speaker 1: And so we put together a team that really exuded

498
00:27:55,680 --> 00:27:58,000
Speaker 1: this ability to get it done. You know, we brought

499
00:27:58,040 --> 00:28:00,879
Speaker 1: on a board of executed as we brought in you

500
00:28:00,920 --> 00:28:03,600
Speaker 1: know Ross Mason who founded Mule, saw the six and

501
00:28:03,640 --> 00:28:06,920
Speaker 1: a half billion dollar company that was acquired, a sixteen

502
00:28:07,000 --> 00:28:10,040
Speaker 1: year overnight success that was acquired by Salesforce. You know,

503
00:28:10,160 --> 00:28:14,560
Speaker 1: Ross knows open source software, Ross knows enterprise software. Any

504
00:28:14,840 --> 00:28:18,800
Speaker 1: CEO in that space would be thrilled to have Ross

505
00:28:19,280 --> 00:28:22,280
Speaker 1: chatting with them about how to build an open source

506
00:28:22,320 --> 00:28:25,040
Speaker 1: or enterprise company. So so just like a like a

507
00:28:25,280 --> 00:28:28,520
Speaker 1: like a team in sports or uh, you know, a

508
00:28:28,600 --> 00:28:31,800
Speaker 1: perfect band. You know, our job was to assemble a

509
00:28:31,840 --> 00:28:35,120
Speaker 1: team that could get a deal done, not just get

510
00:28:35,119 --> 00:28:39,560
Speaker 1: a deal done, but then help that company really become

511
00:28:40,480 --> 00:28:42,880
Speaker 1: you know, uh uh you go from two to ten months,

512
00:28:42,920 --> 00:28:45,840
Speaker 1: they go from a two billion dollar valuation and the

513
00:28:45,840 --> 00:28:48,840
Speaker 1: private markets to a ten billion dollar valuation over a

514
00:28:48,840 --> 00:28:52,040
Speaker 1: few years in the public markets. So this is exactly

515
00:28:52,200 --> 00:28:55,800
Speaker 1: what I was curious about. Next and it is and

516
00:28:55,840 --> 00:28:58,720
Speaker 1: I think this is really helping me understand this even further,

517
00:28:59,000 --> 00:29:03,120
Speaker 1: is how much of the pitch is about not just

518
00:29:03,200 --> 00:29:05,960
Speaker 1: the ability to identify and get a good deal done,

519
00:29:06,280 --> 00:29:10,360
Speaker 1: but about you, Howard Lindon and your team being part

520
00:29:11,040 --> 00:29:14,720
Speaker 1: of this public company that exists and as you say,

521
00:29:14,840 --> 00:29:18,960
Speaker 1: tell its story and essentially sell the stock ticker. And

522
00:29:19,800 --> 00:29:24,200
Speaker 1: what is the sort of the structure of the deal

523
00:29:24,760 --> 00:29:29,920
Speaker 1: such that you are incentivized to not you know, okay,

524
00:29:29,960 --> 00:29:31,840
Speaker 1: it's public, I'm gonna wash my hands of it and

525
00:29:31,880 --> 00:29:35,720
Speaker 1: go launch the next SPACs, but actually have some skin

526
00:29:35,800 --> 00:29:39,680
Speaker 1: in the game so that it does outperform over the

527
00:29:39,720 --> 00:29:42,920
Speaker 1: long term, and you do use your network and your

528
00:29:42,960 --> 00:29:45,640
Speaker 1: skills to help it up do well. Yeah, that's I

529
00:29:45,680 --> 00:29:48,680
Speaker 1: think another ultimate question. I think for us, first of all,

530
00:29:48,360 --> 00:29:51,560
Speaker 1: it was completely our money. So maybe in the olden

531
00:29:51,640 --> 00:29:54,040
Speaker 1: days and I say this in someone who's been burned

532
00:29:54,080 --> 00:29:57,200
Speaker 1: by winning spacts when they were younger in Canada, but

533
00:29:57,760 --> 00:30:00,400
Speaker 1: we didn't know how the sausage was made. So you know,

534
00:30:00,480 --> 00:30:03,280
Speaker 1: some broker called you and said this is going public

535
00:30:03,360 --> 00:30:07,560
Speaker 1: and it's uh f ME Drill Incorporated, and you're going

536
00:30:07,640 --> 00:30:09,880
Speaker 1: to buy the stock. It's how the product was sold

537
00:30:10,080 --> 00:30:13,160
Speaker 1: that was probably shady. You know, the product hasn't changed

538
00:30:13,160 --> 00:30:15,560
Speaker 1: that much, but I said, like the tactics of which

539
00:30:15,880 --> 00:30:19,320
Speaker 1: they were put together and sold have so you know,

540
00:30:19,880 --> 00:30:23,440
Speaker 1: I believe what's something that's different And it's up to

541
00:30:23,680 --> 00:30:25,960
Speaker 1: the investors to read the s ones and ask the

542
00:30:26,040 --> 00:30:29,320
Speaker 1: right questions. Is who owns the stock? Like who put

543
00:30:29,400 --> 00:30:32,520
Speaker 1: up the money to get this band together? And for

544
00:30:32,640 --> 00:30:34,560
Speaker 1: us it was all our own money. So the the

545
00:30:34,640 --> 00:30:38,320
Speaker 1: almost ten million dollars that there's a pay to play here,

546
00:30:38,800 --> 00:30:40,360
Speaker 1: and I think some of the ones you have to

547
00:30:40,360 --> 00:30:43,520
Speaker 1: be careful. One where that ten million dollar comes from,

548
00:30:43,560 --> 00:30:47,720
Speaker 1: not the group involved, but maybe some retail investors or

549
00:30:47,800 --> 00:30:52,760
Speaker 1: some shell that was put together with creatively from a

550
00:30:52,880 --> 00:30:56,000
Speaker 1: pile of old shells that already has all the filings, etcetera,

551
00:30:56,400 --> 00:30:58,880
Speaker 1: started from scratch. That we've got to invest in the

552
00:30:58,960 --> 00:31:03,360
Speaker 1: law firm, the the s one, the the who's going

553
00:31:03,400 --> 00:31:05,600
Speaker 1: to pay the two percent to the bank, the D

554
00:31:05,760 --> 00:31:08,640
Speaker 1: and O insurance? You know, are there going to be salaries?

555
00:31:08,720 --> 00:31:11,360
Speaker 1: This could take two years of time and that so

556
00:31:11,400 --> 00:31:13,400
Speaker 1: you've got to set aside eight to ten million dollars

557
00:31:13,440 --> 00:31:15,600
Speaker 1: depending on what you're going to raise for those two

558
00:31:15,760 --> 00:31:18,800
Speaker 1: years that you've got to operate this public company. So

559
00:31:18,800 --> 00:31:23,160
Speaker 1: there's no free lunch, and the returns if you don't

560
00:31:23,240 --> 00:31:27,600
Speaker 1: have to negotiate down your your your fees can be fantastic,

561
00:31:27,760 --> 00:31:30,320
Speaker 1: you know. But the risk is still there, you know.

562
00:31:30,440 --> 00:31:34,200
Speaker 1: And I think what good allocators are capital asked for

563
00:31:34,360 --> 00:31:36,960
Speaker 1: is like who put that risk capital together? And how

564
00:31:37,000 --> 00:31:39,200
Speaker 1: long is that risk capital going to be tied up?

565
00:31:39,560 --> 00:31:44,520
Speaker 1: How do you align the spack operators with the public company.

566
00:31:44,640 --> 00:31:46,880
Speaker 1: And and a good board at a good public company

567
00:31:46,960 --> 00:31:50,240
Speaker 1: is gonna put the clamps down on all the stuff

568
00:31:50,600 --> 00:31:52,840
Speaker 1: that happened. And I think where Chamath and Adam Bain

569
00:31:52,960 --> 00:31:57,800
Speaker 1: and this new batch of of good intentions backs like

570
00:31:57,880 --> 00:32:00,080
Speaker 1: people that are going to be great band leaders and

571
00:32:00,240 --> 00:32:02,680
Speaker 1: people that know how to put together a symphony. And

572
00:32:02,920 --> 00:32:05,000
Speaker 1: by a symphony, I mean a great public company that

573
00:32:05,040 --> 00:32:07,160
Speaker 1: grows faster in the public market than ever do in

574
00:32:07,160 --> 00:32:10,840
Speaker 1: the private markets. It's going to come down to, you know,

575
00:32:11,200 --> 00:32:16,960
Speaker 1: intentions and execution, and the more risk capital and the

576
00:32:17,000 --> 00:32:20,080
Speaker 1: more alignment that the back operator has with the long

577
00:32:20,200 --> 00:32:22,040
Speaker 1: term goals of the public company, the better. So it's

578
00:32:22,080 --> 00:32:24,880
Speaker 1: up to both sides to kind of tie each other

579
00:32:25,040 --> 00:32:28,680
Speaker 1: into the long term here. So for you, though, just

580
00:32:28,840 --> 00:32:31,760
Speaker 1: if I can follow up real quickly, what is the

581
00:32:31,760 --> 00:32:34,680
Speaker 1: requirements or what is the expectation on the part of

582
00:32:34,720 --> 00:32:37,720
Speaker 1: these hedge funds that you're going to be with it

583
00:32:38,160 --> 00:32:40,840
Speaker 1: for a while? Good question, I mean, until you find

584
00:32:40,880 --> 00:32:43,360
Speaker 1: the target that the sharp knives probably don't come out

585
00:32:43,520 --> 00:32:46,080
Speaker 1: right where everybody really puts the screws to each other

586
00:32:46,120 --> 00:32:49,240
Speaker 1: and says, we'll agree. This deal happens if you guys

587
00:32:49,320 --> 00:32:51,960
Speaker 1: lock up your shares for two years. Right, there's no

588
00:32:52,400 --> 00:32:56,360
Speaker 1: nothing's written in stone. Everything's up for negotiation. Now. Some

589
00:32:56,560 --> 00:33:00,680
Speaker 1: maybe Chamath has more power because he's done more and

590
00:33:00,680 --> 00:33:02,440
Speaker 1: he says no, we're only gonna lock up. I can

591
00:33:02,440 --> 00:33:05,440
Speaker 1: only speculate, but you know each deal will be different.

592
00:33:05,520 --> 00:33:08,240
Speaker 1: You know, as the clock takes back towards two years,

593
00:33:08,240 --> 00:33:10,720
Speaker 1: if you haven't found a deal, you're going to lose

594
00:33:10,760 --> 00:33:13,760
Speaker 1: a lot of your negotiating power as a spack operators.

595
00:33:13,800 --> 00:33:18,200
Speaker 1: So so so many things can can change, and I

596
00:33:18,240 --> 00:33:21,520
Speaker 1: think the media has had a field day just kind

597
00:33:21,520 --> 00:33:25,840
Speaker 1: of putting everything neatly compartmentalized. But there's a very complex,

598
00:33:26,400 --> 00:33:30,120
Speaker 1: very elegant product. But with all kinds of complex ways

599
00:33:30,200 --> 00:33:33,600
Speaker 1: that they will in each one will be structured differently

600
00:33:33,600 --> 00:33:51,480
Speaker 1: when they're finally expressed as a public company. Got So,

601
00:33:51,560 --> 00:33:55,560
Speaker 1: how is the acquisition search actually going at the moment,

602
00:33:55,640 --> 00:33:59,560
Speaker 1: because in previous podcasts on the subject of SPACs, Joe

603
00:33:59,560 --> 00:34:03,480
Speaker 1: and I have heard the competition is pretty intense. Uh,

604
00:34:03,640 --> 00:34:07,160
Speaker 1: spacks are starting, you know, every week, if not every

605
00:34:07,240 --> 00:34:09,360
Speaker 1: day at this moment in time. We've heard of spack

606
00:34:09,440 --> 00:34:13,320
Speaker 1: offs where you know, multiple spacts will compete for one target.

607
00:34:14,040 --> 00:34:19,360
Speaker 1: How's it going? Woo doesn't like spacking up, So that

608
00:34:19,440 --> 00:34:21,640
Speaker 1: was keyed up. That was so teed up. I don't

609
00:34:21,640 --> 00:34:24,560
Speaker 1: even know if that could run on Bloomberg. The The

610
00:34:24,640 --> 00:34:28,560
Speaker 1: ultimate question is what you just asked, is like, what's

611
00:34:28,600 --> 00:34:31,920
Speaker 1: it like out there on the gridiron, And let me

612
00:34:32,000 --> 00:34:34,680
Speaker 1: just tell you that I'll give you the same answer

613
00:34:35,680 --> 00:34:39,359
Speaker 1: if I can be a venture capitalist and I say that, yeah,

614
00:34:39,520 --> 00:34:41,799
Speaker 1: loosely or whatever. I mean. It's a bull market and

615
00:34:41,800 --> 00:34:44,080
Speaker 1: we've had our winds and we've got a great track record,

616
00:34:44,160 --> 00:34:46,680
Speaker 1: so we're very proud of that. But we are in

617
00:34:46,719 --> 00:34:51,440
Speaker 1: a software boom, bull market and zero interest rate economy.

618
00:34:51,520 --> 00:34:53,360
Speaker 1: So I'd like to pat myself on the back, but

619
00:34:53,440 --> 00:34:57,799
Speaker 1: remind myself that pretty good tail wins out there. It's

620
00:34:57,880 --> 00:35:02,640
Speaker 1: all about, you know, and you get something done. What's

621
00:35:02,640 --> 00:35:09,080
Speaker 1: important here is that you move, you know, quickly. We

622
00:35:09,160 --> 00:35:13,960
Speaker 1: have we have just legally gotten through the process. And

623
00:35:14,000 --> 00:35:15,880
Speaker 1: this is the end of my quiet perier where we

624
00:35:16,000 --> 00:35:21,600
Speaker 1: actually can talk two companies about our spack and prepare

625
00:35:21,640 --> 00:35:24,880
Speaker 1: you know, explainers about what we think we can offer

626
00:35:25,000 --> 00:35:28,359
Speaker 1: and send that around. But I never worry about the competition.

627
00:35:28,960 --> 00:35:32,279
Speaker 1: And and the world is big. We've gone through this

628
00:35:32,640 --> 00:35:36,120
Speaker 1: very long period of indexing and like set him forget,

629
00:35:36,640 --> 00:35:40,440
Speaker 1: and we're coming out of this period where every American

630
00:35:41,600 --> 00:35:44,799
Speaker 1: is basically holding the same portfolio. Right. We came out

631
00:35:44,800 --> 00:35:47,880
Speaker 1: of this long period where you should you should only index,

632
00:35:47,960 --> 00:35:50,160
Speaker 1: and you should buy Vanguard, and you should put your

633
00:35:50,160 --> 00:35:53,880
Speaker 1: retirement money in Black Rocks SMP index, and you should

634
00:35:53,880 --> 00:35:57,719
Speaker 1: have a seventy thirty portfolio or sixty forty portfolio like

635
00:35:57,800 --> 00:36:01,279
Speaker 1: Tony Robins. All of a sudden, it is the is

636
00:36:01,320 --> 00:36:03,560
Speaker 1: saying that's the way to manage your money. And guess what.

637
00:36:04,200 --> 00:36:06,360
Speaker 1: I think what we've seen in the last year is

638
00:36:06,440 --> 00:36:10,440
Speaker 1: the what we saw with Uber and transportation is what

639
00:36:10,480 --> 00:36:13,320
Speaker 1: we're seeing with Robin Hood and e Toro and trading.

640
00:36:13,480 --> 00:36:16,360
Speaker 1: Is when you put a beautiful button on top of

641
00:36:16,400 --> 00:36:20,400
Speaker 1: a very complex thing. Uh, this next generation likes to

642
00:36:20,440 --> 00:36:24,240
Speaker 1: push the button and spin the dice or roll the dice,

643
00:36:24,440 --> 00:36:27,840
Speaker 1: and so we have this incredible unbundling of the indexes.

644
00:36:27,960 --> 00:36:31,600
Speaker 1: And so I think there's hundreds of new public companies

645
00:36:32,000 --> 00:36:35,360
Speaker 1: that can survive. And when you and that may not

646
00:36:35,520 --> 00:36:39,080
Speaker 1: sound like a lot, but it really is. I'm talking

647
00:36:39,120 --> 00:36:42,640
Speaker 1: about good public companies. Right where we we the market

648
00:36:42,640 --> 00:36:45,719
Speaker 1: could support probably a thousand new public companies, of which

649
00:36:45,760 --> 00:36:47,800
Speaker 1: there will be two hundred great ones or a hundred

650
00:36:47,840 --> 00:36:50,520
Speaker 1: great ones, and so are we don't think it's that

651
00:36:50,600 --> 00:36:55,560
Speaker 1: competitive if you know where to look. And just as

652
00:36:55,680 --> 00:36:59,160
Speaker 1: VCS they told you that unless you're in Silicon Valley,

653
00:36:59,200 --> 00:37:02,040
Speaker 1: you can have great returns well social leverages in Phoenix

654
00:37:02,080 --> 00:37:06,120
Speaker 1: and San Diego. And we're tough, you know, performing venture

655
00:37:06,160 --> 00:37:09,040
Speaker 1: capital fund. So I've never really boughted to that competition.

656
00:37:09,080 --> 00:37:12,160
Speaker 1: America is a huge country. I say it's an emerging

657
00:37:12,200 --> 00:37:15,680
Speaker 1: market in many ways because you can do investing outside

658
00:37:15,680 --> 00:37:18,200
Speaker 1: of San Francisco and New York right now. So the

659
00:37:18,239 --> 00:37:22,320
Speaker 1: flyover states are emerging markets, just like Malaysia's an emerging market.

660
00:37:22,640 --> 00:37:26,040
Speaker 1: So I think the targets are way more than people

661
00:37:26,840 --> 00:37:31,120
Speaker 1: estimate or gu estimate. Just like most people can't analyze

662
00:37:31,160 --> 00:37:33,480
Speaker 1: and tell you where stock's going to go, I don't

663
00:37:33,520 --> 00:37:37,600
Speaker 1: believe that the media or the analysts can say how

664
00:37:37,600 --> 00:37:40,719
Speaker 1: many public companies there can or should be. So I

665
00:37:40,719 --> 00:37:45,200
Speaker 1: think we're in this like wild West, where um, if

666
00:37:45,200 --> 00:37:47,920
Speaker 1: you find a great company, you can get support for

667
00:37:47,960 --> 00:37:50,480
Speaker 1: that great company, and you can find shareholders for that

668
00:37:50,520 --> 00:37:53,120
Speaker 1: great company because everybody has a brokerage account in the

669
00:37:53,120 --> 00:37:55,439
Speaker 1: palm of their hand. I just want to point out

670
00:37:55,440 --> 00:38:01,359
Speaker 1: while we're having this conversation February seven am Eastern time now,

671
00:38:01,360 --> 00:38:03,800
Speaker 1: as the extent three and a half percent. So maybe

672
00:38:03,800 --> 00:38:06,839
Speaker 1: this is the top. Maybe this is the this is

673
00:38:06,880 --> 00:38:09,479
Speaker 1: this would be perfect. No, I don't really I don't

674
00:38:09,480 --> 00:38:12,000
Speaker 1: really think that there's no way at the top. I

675
00:38:12,000 --> 00:38:16,280
Speaker 1: think that you think so well. No, I I personally

676
00:38:16,320 --> 00:38:18,439
Speaker 1: think that if I can do us fact, that would

677
00:38:18,480 --> 00:38:22,080
Speaker 1: you know, it's that old saying, you know, as if

678
00:38:22,200 --> 00:38:24,080
Speaker 1: they're gonna if this club is going to accept me,

679
00:38:24,160 --> 00:38:26,120
Speaker 1: and then you know, why would I join the club?

680
00:38:26,760 --> 00:38:29,960
Speaker 1: I think, you know, it's easy to just yell out,

681
00:38:30,000 --> 00:38:31,799
Speaker 1: this will be the top of that, the top. There

682
00:38:31,840 --> 00:38:35,560
Speaker 1: has been so much speculative behavior. And I was writing

683
00:38:35,560 --> 00:38:37,520
Speaker 1: about today and n f t S because I can't

684
00:38:37,520 --> 00:38:40,080
Speaker 1: get enough uh you know, I can't get enough action

685
00:38:40,120 --> 00:38:42,240
Speaker 1: in the real markets. I got to develop a digital

686
00:38:43,120 --> 00:38:46,480
Speaker 1: card market. We've seen all the signs right that there

687
00:38:46,480 --> 00:38:48,719
Speaker 1: should be a pullback. And it's not just you know,

688
00:38:48,719 --> 00:38:51,759
Speaker 1: a year ago is just Tesla, and today it's not

689
00:38:51,800 --> 00:38:56,280
Speaker 1: just Tesla. It's like ethereum, it's bitcoin and it's alt coins,

690
00:38:56,360 --> 00:38:59,920
Speaker 1: it's n f t s, it's you know, game stop.

691
00:39:00,080 --> 00:39:02,920
Speaker 1: I mean, there are so many reasons why you could

692
00:39:02,960 --> 00:39:07,000
Speaker 1: say it was the top, and eventually somebody will have

693
00:39:07,080 --> 00:39:10,000
Speaker 1: a tweet that they hold up five years from I'm

694
00:39:10,040 --> 00:39:12,960
Speaker 1: saying I called the top. But you know, it's just

695
00:39:13,160 --> 00:39:17,440
Speaker 1: not a very practical way to go through life yelling

696
00:39:17,440 --> 00:39:20,319
Speaker 1: out bearish statements, you know, I mean we joke about

697
00:39:20,360 --> 00:39:22,920
Speaker 1: this all the time. It's like, it's just stupid idea

698
00:39:22,960 --> 00:39:25,640
Speaker 1: to just run around yelling looking for the top or

699
00:39:25,680 --> 00:39:29,640
Speaker 1: looking for the bottom. Right now, to participation economy, some

700
00:39:29,760 --> 00:39:32,399
Speaker 1: of us are luckier than others, and there's a lot

701
00:39:32,440 --> 00:39:34,239
Speaker 1: of supply. The way I look at it is there's

702
00:39:34,239 --> 00:39:36,960
Speaker 1: gonna be some vicious sell us because there's a lot

703
00:39:37,000 --> 00:39:41,359
Speaker 1: of smart people creating products for the investing world, and

704
00:39:41,480 --> 00:39:44,560
Speaker 1: there's just a lot of supply. So sorry, can we

705
00:39:44,600 --> 00:39:47,239
Speaker 1: just dig into the froth idea of a little bit more?

706
00:39:47,239 --> 00:39:52,800
Speaker 1: Because you on your blog have been like slightly critical.

707
00:39:52,880 --> 00:39:55,880
Speaker 1: I mean you've praised facts as a graceful product and

708
00:39:55,960 --> 00:39:58,319
Speaker 1: efficient product and all of that, but you've also been

709
00:39:58,520 --> 00:40:01,399
Speaker 1: sort of critical of some of the stuff going on

710
00:40:01,520 --> 00:40:03,920
Speaker 1: around it. So I think you said something like the

711
00:40:03,960 --> 00:40:08,239
Speaker 1: stock market has its own fantasy sports SPACs. So just

712
00:40:08,320 --> 00:40:11,400
Speaker 1: how crazy do you think everything is at the moment. Well,

713
00:40:11,440 --> 00:40:14,440
Speaker 1: I'm I'm very much an investor trend faller. I call

714
00:40:14,520 --> 00:40:17,480
Speaker 1: eight to eight companies I like to own. I like

715
00:40:17,560 --> 00:40:22,240
Speaker 1: to invest in public companies that I really feel I understand,

716
00:40:22,280 --> 00:40:24,680
Speaker 1: maybe not to corraly financials. I'm not listening to all

717
00:40:24,719 --> 00:40:27,560
Speaker 1: the conference calls, but you know, when I wake up

718
00:40:27,600 --> 00:40:29,640
Speaker 1: and I call them eight to eight companies and I

719
00:40:29,680 --> 00:40:33,640
Speaker 1: think about Google, I can compartmentalize Google and say, you know,

720
00:40:33,640 --> 00:40:37,600
Speaker 1: if you believe the Internet is growing, uh, then you

721
00:40:37,600 --> 00:40:40,560
Speaker 1: know Google is fine and there's going to be as

722
00:40:40,600 --> 00:40:45,440
Speaker 1: growing too. And so in the spack world, what's so

723
00:40:45,760 --> 00:40:50,719
Speaker 1: unique is there's so many different ways to express a

724
00:40:50,840 --> 00:40:53,520
Speaker 1: SPAC and so for me, I don't like the SPAC

725
00:40:53,560 --> 00:40:57,120
Speaker 1: ideas that are in these very nascent markets like e

726
00:40:57,480 --> 00:41:02,279
Speaker 1: like electric vehicles, where the revenues five years out. It's

727
00:41:02,320 --> 00:41:05,440
Speaker 1: just not my style. So I can be cynical of

728
00:41:05,440 --> 00:41:08,799
Speaker 1: of of SPACs, but still want to create a spec

729
00:41:08,840 --> 00:41:11,640
Speaker 1: because for our spact, we're looking down the middle of

730
00:41:11,680 --> 00:41:16,719
Speaker 1: the road of enterprise and at e commerce, mainly where

731
00:41:16,760 --> 00:41:21,080
Speaker 1: we think big, profitable, cash flowing companies can be built

732
00:41:21,160 --> 00:41:24,759
Speaker 1: in the next you know, shopifies, in the next Twilios

733
00:41:25,239 --> 00:41:27,400
Speaker 1: and they're out there. You know, when we invested in

734
00:41:27,520 --> 00:41:29,600
Speaker 1: robin Hood along the way and it got to a

735
00:41:29,640 --> 00:41:33,640
Speaker 1: billion dollar valuation, which wasn't that long ago. People still

736
00:41:34,160 --> 00:41:37,960
Speaker 1: we're like making fun of it. And you know, in

737
00:41:37,960 --> 00:41:40,719
Speaker 1: in many other eras that a billion dollar Robin Hood

738
00:41:40,760 --> 00:41:44,200
Speaker 1: company would have been a public company. And now it's

739
00:41:44,239 --> 00:41:46,400
Speaker 1: you know, give or take a few billion, they're saying

740
00:41:46,440 --> 00:41:49,960
Speaker 1: thirty billion dollars in the private market. Like that thirty

741
00:41:50,000 --> 00:41:54,120
Speaker 1: billion dollars, it still was locked in the private markets.

742
00:41:54,160 --> 00:41:56,440
Speaker 1: That that moved from one to thirty billions. So I

743
00:41:56,480 --> 00:42:02,040
Speaker 1: think the investors need more choice. Wall Street in the

744
00:42:02,760 --> 00:42:06,520
Speaker 1: main street or the advertising. Wall Street got away with

745
00:42:06,600 --> 00:42:10,320
Speaker 1: telling this story about passive investment and cut your fees,

746
00:42:10,680 --> 00:42:12,920
Speaker 1: and we all ended up with the same product, and

747
00:42:12,920 --> 00:42:16,279
Speaker 1: we all ended up with Wells Fargo and Verizon in

748
00:42:16,320 --> 00:42:19,520
Speaker 1: our portfolios. And we hate those companies. I can tell

749
00:42:19,640 --> 00:42:22,960
Speaker 1: by the media writing poorly about their practices that we

750
00:42:23,040 --> 00:42:25,480
Speaker 1: hate those companies. So why do we own those things

751
00:42:25,920 --> 00:42:30,279
Speaker 1: if we hate them? That bothers me and SPACs even

752
00:42:30,320 --> 00:42:32,720
Speaker 1: if you make fun of them. We have a chance,

753
00:42:32,920 --> 00:42:34,759
Speaker 1: and I call it fantasy. We have a chance to

754
00:42:34,800 --> 00:42:38,799
Speaker 1: align our capital with people that aren't gonna get us

755
00:42:38,800 --> 00:42:41,560
Speaker 1: into the next Verizon or Wells Fargo. We're gonna take

756
00:42:41,560 --> 00:42:44,440
Speaker 1: people to space, or we're gonna build an electronic vehicle

757
00:42:44,520 --> 00:42:48,520
Speaker 1: or We're gonna get a the next Twilio public and

758
00:42:48,600 --> 00:42:50,759
Speaker 1: bet on us to do that. So I think there's

759
00:42:50,760 --> 00:42:54,480
Speaker 1: that fantasy part where you can you can actually not

760
00:42:54,600 --> 00:42:57,160
Speaker 1: just be an armchair quarterback, but you can feel like

761
00:42:57,239 --> 00:42:58,880
Speaker 1: you have some skin in the game, whether it's one

762
00:42:58,920 --> 00:43:01,920
Speaker 1: thousand shares or ten thous and shares, and you have

763
00:43:02,000 --> 00:43:05,000
Speaker 1: access because you you talked to Howard Linson on Twitter,

764
00:43:05,280 --> 00:43:08,719
Speaker 1: so maybe you with your your your your tweets can

765
00:43:08,760 --> 00:43:11,800
Speaker 1: subtly influence how the game is going to be played.

766
00:43:11,840 --> 00:43:13,840
Speaker 1: So I think that's part of the fantasy part of

767
00:43:13,880 --> 00:43:17,440
Speaker 1: it is that, um, the people making decisions are on

768
00:43:17,480 --> 00:43:21,080
Speaker 1: Twitter and on stock twits and and sharing their insights,

769
00:43:21,080 --> 00:43:23,160
Speaker 1: and you feel like you have some kind of say

770
00:43:23,200 --> 00:43:25,560
Speaker 1: in the game. And I think that's coming back to

771
00:43:25,600 --> 00:43:27,560
Speaker 1: the markets, and I don't think there's anything wrong with that.

772
00:43:29,000 --> 00:43:31,520
Speaker 1: I want to talk a little bit about Robin Hood,

773
00:43:31,520 --> 00:43:33,160
Speaker 1: but before we do that, I have one more sort

774
00:43:33,200 --> 00:43:35,680
Speaker 1: of SPACs question. This might be a little speculative, but

775
00:43:36,080 --> 00:43:40,160
Speaker 1: you know, like you hang out obviously and very impressive circles,

776
00:43:40,160 --> 00:43:44,000
Speaker 1: and you go to Carbone with Adam Bain even though

777
00:43:44,000 --> 00:43:46,040
Speaker 1: he has like a fifth This is kind of back

778
00:43:46,080 --> 00:43:48,080
Speaker 1: to haunt me, even though he is like a fifth

779
00:43:48,080 --> 00:43:50,720
Speaker 1: cousin of mine. I don't think you know, he didn't

780
00:43:50,719 --> 00:43:53,120
Speaker 1: invite me there. So, but you know, we look at

781
00:43:53,120 --> 00:43:55,839
Speaker 1: all these SPACs and you know kind of joke, it's like, oh,

782
00:43:55,920 --> 00:43:59,799
Speaker 1: the editor a chief of Cosmo head us back and

783
00:44:00,200 --> 00:44:03,320
Speaker 1: Colin Kaepernick had us back and all these like we're

784
00:44:03,360 --> 00:44:05,960
Speaker 1: in your from your sense are these coming from? Is

785
00:44:06,040 --> 00:44:08,800
Speaker 1: someone approaching them out of the blue at places? I

786
00:44:08,800 --> 00:44:10,440
Speaker 1: don't know. I guess no one's going to Carbone now

787
00:44:10,440 --> 00:44:14,320
Speaker 1: because the viers. But is someone Are there like groups

788
00:44:14,320 --> 00:44:16,239
Speaker 1: of deal makers out there who it's like, you know what,

789
00:44:16,480 --> 00:44:18,640
Speaker 1: we have everything we need. We have the lawyer, we

790
00:44:18,719 --> 00:44:20,719
Speaker 1: have the operations guy. We have the guy that knows

791
00:44:20,760 --> 00:44:23,359
Speaker 1: the cloud, we have the goldman guy. What we don't

792
00:44:23,440 --> 00:44:26,160
Speaker 1: have is the person with a big Twitter following as like,

793
00:44:26,239 --> 00:44:29,520
Speaker 1: you know, who would be great, Colin Kaepernick? Whatever it

794
00:44:29,560 --> 00:44:31,480
Speaker 1: is like, is that kind of how is that your

795
00:44:31,520 --> 00:44:33,520
Speaker 1: sense of how these are coming about? Are they more

796
00:44:33,560 --> 00:44:36,480
Speaker 1: like the conversation do you had, like what's you must

797
00:44:36,520 --> 00:44:40,279
Speaker 1: have some feel for what's going on. Absolutely, I did

798
00:44:40,360 --> 00:44:44,520
Speaker 1: not call Colin Kaepernick, um or any athletes to get

799
00:44:44,560 --> 00:44:48,120
Speaker 1: involved in our spack or entertainers because not that they

800
00:44:48,160 --> 00:44:50,360
Speaker 1: shouldn't be right. It's a free country. And this is

801
00:44:50,400 --> 00:44:53,800
Speaker 1: just another financial tool. And we've seen this with tokens,

802
00:44:53,840 --> 00:44:58,400
Speaker 1: and we've seen this in in in advertisements for products.

803
00:44:58,719 --> 00:45:02,560
Speaker 1: This is just another product. If some if a promoter

804
00:45:02,760 --> 00:45:09,000
Speaker 1: slash creator of a spec is thinking that a celebrity

805
00:45:09,040 --> 00:45:12,200
Speaker 1: will make their spec better, you've just for sure turned

806
00:45:12,200 --> 00:45:13,880
Speaker 1: me off to deal. I can't. I'm not going to

807
00:45:14,000 --> 00:45:17,040
Speaker 1: tell other people what to do. But if I'm reading

808
00:45:17,040 --> 00:45:19,480
Speaker 1: an S one, the last thing I care about is

809
00:45:19,520 --> 00:45:24,160
Speaker 1: if an athlete or a celebrity is involved, unless that

810
00:45:24,280 --> 00:45:28,719
Speaker 1: athlete or celebrity has incredible domain experience or investing experience

811
00:45:28,760 --> 00:45:31,960
Speaker 1: around what I think they might target. So when we

812
00:45:32,000 --> 00:45:34,560
Speaker 1: put together our team, it was more about how will

813
00:45:34,719 --> 00:45:40,520
Speaker 1: founders it very fast growing companies respond to us, right like,

814
00:45:41,320 --> 00:45:43,520
Speaker 1: you know, what do our trading card? Like? If they

815
00:45:43,560 --> 00:45:47,200
Speaker 1: have a quick one page or about social leverage acquisition corps,

816
00:45:47,239 --> 00:45:49,000
Speaker 1: how do we make sure they take our call? And

817
00:45:49,040 --> 00:45:51,399
Speaker 1: if there's four other bidders around the table, why would

818
00:45:51,400 --> 00:45:53,279
Speaker 1: they go with us? And that's how we thought about

819
00:45:53,320 --> 00:45:55,440
Speaker 1: the team, and that's why Ross Mason is involved in

820
00:45:55,440 --> 00:45:58,880
Speaker 1: Mike Marquez and Brian no regard from Tinder and Mike

821
00:45:59,000 --> 00:46:01,600
Speaker 1: Lazarow started by the media. You know, when we put

822
00:46:01,640 --> 00:46:04,879
Speaker 1: this team together, and it was mostly orchestrated by me.

823
00:46:05,640 --> 00:46:08,360
Speaker 1: Is I wanted to be able to when we we

824
00:46:08,400 --> 00:46:11,279
Speaker 1: want our founders to light up and be ecstatic that

825
00:46:11,360 --> 00:46:13,840
Speaker 1: they have Brian Norgard in there to help around product

826
00:46:13,880 --> 00:46:16,160
Speaker 1: and growth, or Mike Lazzaro who sold his company for

827
00:46:16,200 --> 00:46:19,720
Speaker 1: eight million to Buddy Media, or and worked as chief

828
00:46:20,360 --> 00:46:23,960
Speaker 1: strategy officer for a few years and under Mark Bennioff,

829
00:46:24,320 --> 00:46:28,080
Speaker 1: and so so you know, we we thought about our facts.

830
00:46:28,160 --> 00:46:31,000
Speaker 1: Like I said, it's an incredible band that we're trying

831
00:46:31,040 --> 00:46:35,520
Speaker 1: to put together to to produce one incredible hit. And

832
00:46:35,520 --> 00:46:38,239
Speaker 1: obviously we'd like the band to stay together and do

833
00:46:38,440 --> 00:46:41,399
Speaker 1: two and three and four. But I think it's very

834
00:46:41,400 --> 00:46:43,960
Speaker 1: elegant that you put it together and do one company.

835
00:46:44,000 --> 00:46:45,719
Speaker 1: The idea that you can even do more than one

836
00:46:45,760 --> 00:46:50,360
Speaker 1: company seems crazy. So I think it's just so interesting

837
00:46:50,400 --> 00:46:53,160
Speaker 1: that you can expand all your energies to go create

838
00:46:53,200 --> 00:46:54,960
Speaker 1: that one great hit. And if you watch any of

839
00:46:55,000 --> 00:46:58,480
Speaker 1: these music documentaries, it's kind of the same thing. When

840
00:46:58,480 --> 00:47:00,319
Speaker 1: they go back and tell you how they made the song,

841
00:47:00,400 --> 00:47:02,880
Speaker 1: it's like, Wow, I didn't know that person was involved

842
00:47:02,920 --> 00:47:05,160
Speaker 1: in the in the lyrics, and I didn't know. But

843
00:47:05,239 --> 00:47:09,720
Speaker 1: generally it's not some fluke that a great song get built.

844
00:47:09,760 --> 00:47:12,880
Speaker 1: There's a backstory, and I think it's important for investors

845
00:47:12,920 --> 00:47:15,400
Speaker 1: to really understand the backstory and how long that team

846
00:47:15,440 --> 00:47:18,399
Speaker 1: has been put together, because maybe the Colin Kaepernick one

847
00:47:18,480 --> 00:47:20,560
Speaker 1: has a specific I haven't read the s one but

848
00:47:20,600 --> 00:47:24,480
Speaker 1: has a very specific reason they're using calling Kaepernick. So again,

849
00:47:24,800 --> 00:47:27,520
Speaker 1: there's more than one person. But I am what I

850
00:47:27,560 --> 00:47:30,719
Speaker 1: am a little bit leery of things that get promoted

851
00:47:30,800 --> 00:47:34,600
Speaker 1: as it was with someone famous, because behind the scenes,

852
00:47:34,640 --> 00:47:36,799
Speaker 1: you need someone great in the boardroom, and you need

853
00:47:36,840 --> 00:47:40,240
Speaker 1: people that help guide through quarterly earnings and earnings missing

854
00:47:40,800 --> 00:47:43,600
Speaker 1: and let's be fair that even I'm not good at

855
00:47:43,640 --> 00:47:45,680
Speaker 1: that stuff, so you have to put people on your

856
00:47:45,680 --> 00:47:49,680
Speaker 1: team that know how to do all these things. Well, uh,

857
00:47:49,760 --> 00:47:52,719
Speaker 1: let's let's real quickly and sort of running out of time.

858
00:47:52,719 --> 00:47:56,640
Speaker 1: But you know, I'm curious obviously now too many people

859
00:47:57,239 --> 00:47:59,880
Speaker 1: investors in Robin Hood, which everyone knows all the contra

860
00:48:00,040 --> 00:48:02,680
Speaker 1: versas and everything that's going on right now. So first

861
00:48:02,880 --> 00:48:07,120
Speaker 1: simple question, um, has the recent controversy do you think

862
00:48:07,120 --> 00:48:09,360
Speaker 1: it derailed it or slowed it down at all because

863
00:48:09,360 --> 00:48:12,640
Speaker 1: the downloads are still huge, Like, is their trajectory for

864
00:48:12,680 --> 00:48:15,600
Speaker 1: this company still as good as it was? And I'm not.

865
00:48:15,640 --> 00:48:18,080
Speaker 1: I don't have a seat inside the border, man. I

866
00:48:18,080 --> 00:48:20,560
Speaker 1: will say that we did try and invest, even though

867
00:48:21,040 --> 00:48:23,600
Speaker 1: you know we're early seed investors, seed investors, you know,

868
00:48:23,640 --> 00:48:26,440
Speaker 1: A bunch of our LPs and myself got around, you

869
00:48:26,480 --> 00:48:28,759
Speaker 1: know when we thought through at the end of the day,

870
00:48:28,920 --> 00:48:31,920
Speaker 1: we decided to try and invest a little in this

871
00:48:32,000 --> 00:48:33,719
Speaker 1: round because we I look at it from a very

872
00:48:33,800 --> 00:48:36,440
Speaker 1: high level, Joe, I mean forgetting about the communications and

873
00:48:36,480 --> 00:48:42,160
Speaker 1: who called who um, there was an incredible security. And

874
00:48:42,520 --> 00:48:45,640
Speaker 1: by security this time, I mean everybody pushed the exact

875
00:48:45,680 --> 00:48:49,440
Speaker 1: same button, give or take. You know how they pushed

876
00:48:49,480 --> 00:48:52,200
Speaker 1: it and how much leverage they decided to put once

877
00:48:52,239 --> 00:48:55,360
Speaker 1: they pushed the button. Everybody decided to push kind of

878
00:48:55,400 --> 00:48:58,000
Speaker 1: the game stop button at the same time in the

879
00:48:58,040 --> 00:49:02,160
Speaker 1: same direction. There's two camps. It happened at internet scale,

880
00:49:02,480 --> 00:49:04,880
Speaker 1: and I don't think anybody had seen this. Anybody developing

881
00:49:04,920 --> 00:49:08,120
Speaker 1: models for a hedge fund had their models and I said,

882
00:49:08,120 --> 00:49:12,040
Speaker 1: oh three standard deviation move would put game stop at eighty.

883
00:49:12,080 --> 00:49:14,399
Speaker 1: So we're not you know, so at eighty they felt like,

884
00:49:14,480 --> 00:49:16,839
Speaker 1: oh my god, the world's never seen this. Well, guess what.

885
00:49:16,880 --> 00:49:19,319
Speaker 1: Once the world hasn't seen something, the model doesn't count

886
00:49:19,360 --> 00:49:21,600
Speaker 1: for anything. And a lot of great people that shared

887
00:49:21,640 --> 00:49:23,880
Speaker 1: a game Stop at eighty ended up with Game stop

888
00:49:23,920 --> 00:49:26,040
Speaker 1: at three hundred dollars like an hour and a half

889
00:49:26,120 --> 00:49:29,279
Speaker 1: later or a day later, meaning the models that they

890
00:49:29,280 --> 00:49:33,800
Speaker 1: were basing their their their trade on imploded, and it

891
00:49:33,880 --> 00:49:38,759
Speaker 1: imploded an internet scale. And I think that, combined with

892
00:49:39,160 --> 00:49:41,359
Speaker 1: the middle of the night phone call for probably more

893
00:49:41,440 --> 00:49:46,560
Speaker 1: deposits um just the game went tilt. And I think

894
00:49:46,760 --> 00:49:48,680
Speaker 1: the three and a half billion that was used to

895
00:49:48,760 --> 00:49:52,759
Speaker 1: patch this, you know, security breach. Let's call it, you

896
00:49:52,800 --> 00:49:54,640
Speaker 1: can call it what you want, but really it's a

897
00:49:54,680 --> 00:49:57,320
Speaker 1: security breach by a lot of people doing the exact

898
00:49:57,400 --> 00:49:59,000
Speaker 1: same thing at the same time. It's kind of like,

899
00:49:59,640 --> 00:50:03,520
Speaker 1: uh an attack that they'll say, bots will attack a

900
00:50:03,560 --> 00:50:05,880
Speaker 1: site and you have cloud flare to protect your site

901
00:50:05,960 --> 00:50:09,400
Speaker 1: from something like that. Yeah, do do o S attack?

902
00:50:09,560 --> 00:50:13,680
Speaker 1: This dodos attack happened, and there's a it was just

903
00:50:13,719 --> 00:50:16,920
Speaker 1: basically a run on the bank and not on purpose,

904
00:50:17,040 --> 00:50:20,840
Speaker 1: let's say, but it just happened, and we can we

905
00:50:20,840 --> 00:50:23,320
Speaker 1: can pitch a moan about how the game rules were changed,

906
00:50:23,360 --> 00:50:25,960
Speaker 1: and I totally have empathy for people that have been

907
00:50:26,480 --> 00:50:28,480
Speaker 1: feel that they got screwed over here because it's happened

908
00:50:28,480 --> 00:50:31,320
Speaker 1: to me in other trades. Is that owning game stuff

909
00:50:31,320 --> 00:50:33,640
Speaker 1: at three, even for an hour, is a little bit

910
00:50:33,719 --> 00:50:36,840
Speaker 1: risky after it was you know, let's just be honest

911
00:50:36,880 --> 00:50:39,160
Speaker 1: with themselves. The people that were playing in that game.

912
00:50:39,560 --> 00:50:42,279
Speaker 1: We're looking for trouble, even if and they may not

913
00:50:42,400 --> 00:50:44,759
Speaker 1: have deserved it, but they were looking for it. I

914
00:50:44,800 --> 00:50:47,160
Speaker 1: think what robin Hood comes out of this, and and

915
00:50:47,239 --> 00:50:50,480
Speaker 1: just brokerage in general is much stronger to see Internet

916
00:50:50,640 --> 00:50:55,680
Speaker 1: scale into. And yes, people got hurt for sure financially,

917
00:50:56,200 --> 00:50:58,680
Speaker 1: but I'm glad it happened over in this corner of

918
00:50:58,719 --> 00:51:01,640
Speaker 1: the market, not you know, everybody pushing SMP was we

919
00:51:01,680 --> 00:51:05,040
Speaker 1: saw in March everybody selling their five stocks at the

920
00:51:05,040 --> 00:51:09,759
Speaker 1: exact same time to some incredible volatility and some scary moments.

921
00:51:09,920 --> 00:51:12,440
Speaker 1: And I think the system will get stronger. And so

922
00:51:12,480 --> 00:51:17,000
Speaker 1: I think for robin Hood, the risk is always when

923
00:51:17,040 --> 00:51:21,120
Speaker 1: you're a leader, is if there's a number two, there's

924
00:51:21,160 --> 00:51:24,200
Speaker 1: a lot bigger risk of getting stuff wrong than if

925
00:51:24,200 --> 00:51:26,239
Speaker 1: there's no clear number two. And I think what we

926
00:51:26,280 --> 00:51:29,920
Speaker 1: found with robin Hood and color me surprise that I've

927
00:51:29,960 --> 00:51:32,360
Speaker 1: been saying this for years, like why is there no

928
00:51:32,560 --> 00:51:35,360
Speaker 1: lift to their uber? It's very rare that you find

929
00:51:36,000 --> 00:51:39,240
Speaker 1: a leader like robin Hood go from one to thirty

930
00:51:39,280 --> 00:51:44,120
Speaker 1: billion if there's intense, true competition. And what we found

931
00:51:44,120 --> 00:51:46,200
Speaker 1: with robin Hood and post robin Hood is their products

932
00:51:46,280 --> 00:51:50,960
Speaker 1: so good that um and so much clearly better than

933
00:51:52,080 --> 00:51:57,160
Speaker 1: any adventure backed competitor, any incumbent, that they got through

934
00:51:57,200 --> 00:52:02,919
Speaker 1: this rather well and should come out stronger, both financially

935
00:52:03,040 --> 00:52:06,799
Speaker 1: and from understanding what the hell just happened with game stoff,

936
00:52:06,800 --> 00:52:09,000
Speaker 1: because now there's something that they can put in their models.

937
00:52:09,400 --> 00:52:11,440
Speaker 1: So it's it's in the end, you know, love it

938
00:52:11,520 --> 00:52:18,040
Speaker 1: or hated it's it's a strong wind for robin Hood. Howard,

939
00:52:18,160 --> 00:52:21,160
Speaker 1: that was fantastic. I swear, I swear that was Actually.

940
00:52:21,280 --> 00:52:23,719
Speaker 1: I feel like I have such a better grasp of

941
00:52:23,960 --> 00:52:26,520
Speaker 1: specs now than I did an hour ago. After having

942
00:52:26,560 --> 00:52:29,319
Speaker 1: listened to you walk through the mechanics, I think exactly

943
00:52:29,760 --> 00:52:32,160
Speaker 1: what I needed looking for. And I really appreciate you

944
00:52:32,200 --> 00:52:34,359
Speaker 1: coming on out lot. Yeah, I figured, you know, learned

945
00:52:34,360 --> 00:52:37,080
Speaker 1: by doing I appreciate you. Let me tell the story.

946
00:52:37,680 --> 00:52:40,240
Speaker 1: You know, I didn't know. I didn't know anything myself.

947
00:52:40,360 --> 00:52:42,319
Speaker 1: I was skeptical when I talked to Adam Pain and

948
00:52:42,320 --> 00:52:44,480
Speaker 1: I was like, oh my god, I can't believe you're

949
00:52:44,480 --> 00:52:46,920
Speaker 1: doing that. Well, looking forward to seeing how it goes.

950
00:52:46,920 --> 00:52:49,120
Speaker 1: Maybe we'll have you back after after the process is

951
00:52:49,160 --> 00:52:51,919
Speaker 1: all complete, all right, see a Tracy or to talk

952
00:52:51,960 --> 00:52:58,160
Speaker 1: about wait, what was it the N phase? The token NONN?

953
00:52:58,880 --> 00:53:16,920
Speaker 1: There we go and take care of heart. You know,

954
00:53:17,000 --> 00:53:19,359
Speaker 1: I swear, like I said at the end there Howard,

955
00:53:19,400 --> 00:53:21,840
Speaker 1: that really did actually answer a bunch of questions in

956
00:53:21,840 --> 00:53:23,920
Speaker 1: my head. Are you going to talk about doing an

957
00:53:23,920 --> 00:53:26,960
Speaker 1: all thoughts back? No? No, because no, because we don't

958
00:53:27,000 --> 00:53:28,600
Speaker 1: have you know, what would we do. I don't have

959
00:53:28,640 --> 00:53:31,120
Speaker 1: like those connections or anything like that. So if anything,

960
00:53:31,160 --> 00:53:34,839
Speaker 1: I feel more confident that I probably couldn't launch us back.

961
00:53:35,160 --> 00:53:37,920
Speaker 1: But but I just sort of get I think a

962
00:53:37,960 --> 00:53:41,480
Speaker 1: little bit better, like what the premises now now And

963
00:53:41,520 --> 00:53:42,960
Speaker 1: you know you said the point in the beginning. It's

964
00:53:42,960 --> 00:53:45,799
Speaker 1: always a little um dicey when people start talking about

965
00:53:45,800 --> 00:53:49,040
Speaker 1: like the vehicle more than the company. And actually I

966
00:53:49,080 --> 00:53:53,000
Speaker 1: don't disagree with that at all, but in terms of um,

967
00:53:53,040 --> 00:53:55,120
Speaker 1: even after listening to it, but in terms of like

968
00:53:55,400 --> 00:53:59,000
Speaker 1: why now, why they're coming together, why they're coming in

969
00:53:59,160 --> 00:54:01,280
Speaker 1: together in the way they are, why they're coming together

970
00:54:01,280 --> 00:54:03,719
Speaker 1: with the speed that they are, Like that actually really

971
00:54:03,719 --> 00:54:06,560
Speaker 1: did help out clarify a lot of things. So one

972
00:54:06,640 --> 00:54:09,279
Speaker 1: thing I thought was really interesting, and it sort of

973
00:54:09,320 --> 00:54:13,560
Speaker 1: ties together the Spack conversation with the Robin Hood and

974
00:54:13,840 --> 00:54:16,440
Speaker 1: game Stop that we were discussing at the end. But

975
00:54:16,960 --> 00:54:20,640
Speaker 1: Howard mentioned this idea of SPACs as a sort of

976
00:54:21,160 --> 00:54:26,120
Speaker 1: rebellion against the index world or you know, the tyranny

977
00:54:26,239 --> 00:54:30,080
Speaker 1: of passive investing. And I think that we are seeing

978
00:54:30,120 --> 00:54:32,359
Speaker 1: that to some extent with the text stocks and this

979
00:54:32,440 --> 00:54:35,319
Speaker 1: idea that you know, people are buying companies that they

980
00:54:35,360 --> 00:54:38,560
Speaker 1: like to use, you know, the Reddit joke. They like

981
00:54:38,680 --> 00:54:42,000
Speaker 1: game Stop, they like AMC, they like Tesla for whatever reason,

982
00:54:42,520 --> 00:54:45,959
Speaker 1: and uh, SPACs are kind of unlocking a whole new

983
00:54:46,040 --> 00:54:49,000
Speaker 1: group of those types of companies that people could potentially

984
00:54:49,040 --> 00:54:51,319
Speaker 1: invest in. I think that's interesting, and I do think

985
00:54:51,360 --> 00:54:54,239
Speaker 1: like people are getting frustrated with this idea that they're

986
00:54:54,280 --> 00:54:56,759
Speaker 1: just going to pour their money into an SMP five

987
00:54:56,840 --> 00:55:00,480
Speaker 1: hundred fund and wait for you know, forty year, sixty

988
00:55:00,520 --> 00:55:05,479
Speaker 1: years until they retire. That's boring and also a little

989
00:55:05,520 --> 00:55:08,239
Speaker 1: bit sad it is Borg and said, I just feel

990
00:55:08,280 --> 00:55:11,160
Speaker 1: like it's kind of like Big told the eatar spinach.

991
00:55:12,080 --> 00:55:15,160
Speaker 1: And I do think that eventually this is good for you,

992
00:55:15,200 --> 00:55:17,080
Speaker 1: but you're not going to enjoy it too. Yeah, and

993
00:55:17,120 --> 00:55:19,280
Speaker 1: I get it. It's like you're not supposed to enjoy

994
00:55:19,680 --> 00:55:23,359
Speaker 1: It's it's tough because you're not really supposed to enjoy investing,

995
00:55:23,520 --> 00:55:26,080
Speaker 1: and investing isn't supposed to be fun. On the other hand,

996
00:55:26,640 --> 00:55:30,160
Speaker 1: this is this impulse that is latent and exists in

997
00:55:30,280 --> 00:55:33,359
Speaker 1: all markets throughout time. So it's kind of almost like

998
00:55:33,600 --> 00:55:36,839
Speaker 1: how long can you suppress it? Like gambling the earth

999
00:55:36,920 --> 00:55:41,880
Speaker 1: to speculate has been part of respectable financial markets and

1000
00:55:42,120 --> 00:55:45,440
Speaker 1: for all time, and so we can write articles and

1001
00:55:45,560 --> 00:55:50,040
Speaker 1: say just passively index and rebalance and jack Bogel and

1002
00:55:50,120 --> 00:55:53,040
Speaker 1: low fees and stuff like that. But it just because

1003
00:55:53,040 --> 00:55:55,160
Speaker 1: we say it doesn't and just because it's the maybe

1004
00:55:55,239 --> 00:55:58,080
Speaker 1: right doesn't mean that people are going to accept it.

1005
00:55:58,120 --> 00:56:01,200
Speaker 1: And we're clearly seeing that, especially over the last few years.

1006
00:56:01,239 --> 00:56:03,719
Speaker 1: And game Stop was part of that. Robin Hood is

1007
00:56:03,800 --> 00:56:07,319
Speaker 1: part of that and uh spacks are party. Yeah, that's

1008
00:56:07,400 --> 00:56:09,800
Speaker 1: a good way of framing it, all, right, Shall we

1009
00:56:09,880 --> 00:56:13,000
Speaker 1: leave it there? Go ahead, Yeah, I was just gonna

1010
00:56:13,000 --> 00:56:14,279
Speaker 1: say one more thing though. You know what I was

1011
00:56:14,320 --> 00:56:16,040
Speaker 1: just thinking about with Howard. It's like there's like a

1012
00:56:16,080 --> 00:56:20,080
Speaker 1: famous quote that of George Soros or something. He said

1013
00:56:20,120 --> 00:56:23,040
Speaker 1: like when I see a bubble, I don't get scared

1014
00:56:23,040 --> 00:56:24,920
Speaker 1: of it. I run towards it. And I kind of

1015
00:56:24,960 --> 00:56:28,319
Speaker 1: think that's like Howard's approach. It's like he can recognize

1016
00:56:28,360 --> 00:56:31,760
Speaker 1: that there's some maybe some disturbing stuff going on with spacks.

1017
00:56:31,800 --> 00:56:34,680
Speaker 1: He can recognize that there's some disturbing stuff, etcetera. But

1018
00:56:34,719 --> 00:56:38,000
Speaker 1: as an investor, I've always thought of, like the thirteen

1019
00:56:38,080 --> 00:56:40,319
Speaker 1: years I think I've been following him now, he had

1020
00:56:40,360 --> 00:56:44,280
Speaker 1: a good nose for like which bubbles to run towards, uh,

1021
00:56:44,360 --> 00:56:47,000
Speaker 1: as opposed to you know, the sort of like typical

1022
00:56:47,000 --> 00:56:49,879
Speaker 1: mentality of like I'm gonna stay far away from that. Yeah.

1023
00:56:49,920 --> 00:56:53,000
Speaker 1: I mean, people get rich during bubbles if they're able

1024
00:56:53,040 --> 00:56:56,160
Speaker 1: to time their exit. Um, so there's definitely opportunities there.

1025
00:56:56,760 --> 00:56:59,920
Speaker 1: All right, shall we leave it there, Let's leave it there.

1026
00:57:00,800 --> 00:57:04,120
Speaker 1: This has been another episode of the All Thoughts podcast.

1027
00:57:04,200 --> 00:57:06,920
Speaker 1: I'm Tracey Alloway. You can follow me on Twitter at

1028
00:57:06,960 --> 00:57:10,279
Speaker 1: Tracy Alloway and I'm Joe wi Isn't thal. You can

1029
00:57:10,320 --> 00:57:13,640
Speaker 1: follow me on Twitter at the Stalwart. Follow Howard Linson

1030
00:57:13,680 --> 00:57:17,520
Speaker 1: on Twitter. He's at Howard Linson. Follow our producer Laura Carlson.

1031
00:57:17,600 --> 00:57:20,640
Speaker 1: She's at Laura M. Carlson. Follow the Bloomberg head of

1032
00:57:20,640 --> 00:57:24,680
Speaker 1: podcast Francesca Levi at Francesca Today, and check out all

1033
00:57:24,720 --> 00:57:28,280
Speaker 1: of our podcasts at Bloomberg under the handle at podcasts.

1034
00:57:28,360 --> 00:58:00,240
Speaker 1: Thanks for listening one