1 00:00:03,080 --> 00:00:12,119 Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Hello and welcome to 2 00:00:12,119 --> 00:00:14,920 Speaker 1: the Money Stuff Podcast. You're a weekly podcast where we 3 00:00:14,960 --> 00:00:19,160 Speaker 1: talk about stuff related to money. I'm Matt Levin and 4 00:00:19,239 --> 00:00:21,439 Speaker 1: I are at the Money Stuff column for Bloomberg Opinion. 5 00:00:21,680 --> 00:00:24,119 Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and 6 00:00:24,160 --> 00:00:25,560 Speaker 2: an anchor for Bloomberg Television. 7 00:00:26,680 --> 00:00:27,960 Speaker 1: What are we at today, Katie? 8 00:00:28,200 --> 00:00:31,520 Speaker 2: We're going to talk about insider trading it's now legal 9 00:00:31,880 --> 00:00:34,440 Speaker 2: in the UK and only in private markets. Then we're 10 00:00:34,440 --> 00:00:38,360 Speaker 2: going to talk about drama the grocery store, and then 11 00:00:38,360 --> 00:00:41,479 Speaker 2: we're going to talk about micro strategy and Michael Saylor. 12 00:00:41,600 --> 00:00:43,440 Speaker 1: Sounds great, let's get into it. 13 00:00:45,479 --> 00:00:47,280 Speaker 2: Insider trading, it's great. 14 00:00:47,479 --> 00:00:50,000 Speaker 1: Yeah, if you guys had on this podcast, I love 15 00:00:50,000 --> 00:00:52,000 Speaker 1: insider trading. And then and then I walked it back 16 00:00:52,240 --> 00:00:53,239 Speaker 1: and you qualified. 17 00:00:52,880 --> 00:00:55,080 Speaker 2: It a few a few different ways. But in the 18 00:00:55,160 --> 00:01:00,040 Speaker 2: UK now in certain circumstances it's maybe not encouraged, but 19 00:01:00,480 --> 00:01:01,800 Speaker 2: maybe not not allowed. 20 00:01:01,920 --> 00:01:05,400 Speaker 1: They're launching this thing called PISCES, which stands for Private 21 00:01:05,440 --> 00:01:08,480 Speaker 1: Intermittent Securities and Capital Exchanges. This is like a thing 22 00:01:08,520 --> 00:01:11,080 Speaker 1: that everyone talks about. Private companies have become such a 23 00:01:11,080 --> 00:01:15,520 Speaker 1: big part of the market and are so important. And 24 00:01:15,560 --> 00:01:17,840 Speaker 1: the thing about being a private company is you can't 25 00:01:17,880 --> 00:01:19,920 Speaker 1: trade their stock, and I was like, well, shouldn't you 26 00:01:20,000 --> 00:01:21,320 Speaker 1: be able to trade their stock? And so like there 27 00:01:21,319 --> 00:01:23,800 Speaker 1: are all sorts of like solutions and marketplaces that have 28 00:01:23,840 --> 00:01:27,240 Speaker 1: sprung up, and the UK is building this regulatory soundbox 29 00:01:27,240 --> 00:01:29,399 Speaker 1: where basically they're gonna have a set of rules for 30 00:01:29,440 --> 00:01:32,080 Speaker 1: the private market that are different from the rules for 31 00:01:32,160 --> 00:01:35,520 Speaker 1: public market less publicity, but allowed for some trading of 32 00:01:35,560 --> 00:01:38,800 Speaker 1: private market shares. And in setting up those rules, they 33 00:01:38,800 --> 00:01:42,800 Speaker 1: thought should it be legal to insider trade? And they decided, sure, 34 00:01:42,880 --> 00:01:45,240 Speaker 1: why not, let's make it legal to insider trade, which 35 00:01:45,280 --> 00:01:48,400 Speaker 1: I think, like, you know, I'm kind of cautiously optimistic 36 00:01:48,440 --> 00:01:49,680 Speaker 1: for it because I love insider trading. 37 00:01:50,400 --> 00:01:53,840 Speaker 2: So reading this, as I was working my way through 38 00:01:53,880 --> 00:01:56,280 Speaker 2: the column, I was thinking about the fun market. And 39 00:01:56,320 --> 00:01:58,760 Speaker 2: then you did get there that you have the nice 40 00:01:58,760 --> 00:02:00,560 Speaker 2: market and then you have the fund mark, which is 41 00:02:00,600 --> 00:02:04,200 Speaker 2: similar to the doped up Olympics, where let's just see 42 00:02:04,240 --> 00:02:04,880 Speaker 2: what happens. 43 00:02:05,200 --> 00:02:07,120 Speaker 1: Yeah, right, it's the doped up Olympics, right. I mean, 44 00:02:07,160 --> 00:02:08,760 Speaker 1: like I've written about like this idea of having the 45 00:02:08,840 --> 00:02:11,120 Speaker 1: nice market, where like there are rules and like everyone's 46 00:02:11,120 --> 00:02:13,560 Speaker 1: suposed to be on kind of an informational level playing field. 47 00:02:13,840 --> 00:02:15,280 Speaker 1: And then like there's the idea of the fun market, 48 00:02:15,320 --> 00:02:16,760 Speaker 1: where there are no rules and you kind of just 49 00:02:16,800 --> 00:02:18,560 Speaker 1: do whatever you want. And I sort of started thinking 50 00:02:18,560 --> 00:02:20,520 Speaker 1: about that in terms of crypto, because like there's there 51 00:02:20,520 --> 00:02:23,120 Speaker 1: a reason in the abstract for crypto to like ban 52 00:02:23,280 --> 00:02:26,000 Speaker 1: market manipulation. And we've talked about like the Mango markets guy, right, Like, 53 00:02:26,040 --> 00:02:28,079 Speaker 1: there was like this notion in crypto that like, if 54 00:02:28,080 --> 00:02:30,320 Speaker 1: you can do it, it's legal, right, and there's no rules. 55 00:02:30,760 --> 00:02:34,239 Speaker 1: And it turns out that like US regulators impose a 56 00:02:34,280 --> 00:02:37,560 Speaker 1: lot of market manipulation rules, even on crypto markets, to 57 00:02:37,639 --> 00:02:40,880 Speaker 1: the surprise of some crypto market manipulators. But like you know, 58 00:02:40,960 --> 00:02:43,080 Speaker 1: in cryptosa, like it's just like it's a set of 59 00:02:43,120 --> 00:02:46,160 Speaker 1: gambling tokens. So like whatever rules everyone agrees to are fun. 60 00:02:46,800 --> 00:02:48,680 Speaker 1: In capital markets, it's a little different, right, Like you 61 00:02:48,800 --> 00:02:51,880 Speaker 1: have rules of capital markets in part because you think 62 00:02:51,880 --> 00:02:54,840 Speaker 1: they're the right rules to like encourage retirement saving and 63 00:02:54,880 --> 00:02:58,520 Speaker 1: capital formation. And I think the consensus is that in 64 00:02:58,560 --> 00:03:02,400 Speaker 1: public markets, insider trading is bad because people will be 65 00:03:02,480 --> 00:03:04,360 Speaker 1: less likely to invest their money in the stock market 66 00:03:04,400 --> 00:03:06,760 Speaker 1: if they think everyone is insider trading against them. And 67 00:03:06,800 --> 00:03:08,960 Speaker 1: if they think everyone's insider trading against them, then it'll 68 00:03:08,960 --> 00:03:11,320 Speaker 1: be harder for companies to raise money. And like, what 69 00:03:11,360 --> 00:03:14,520 Speaker 1: you want in a stock market is capital formation, like 70 00:03:14,520 --> 00:03:17,800 Speaker 1: retirement savings and not so much fun gambling, but like, 71 00:03:17,840 --> 00:03:20,320 Speaker 1: you know, like a crypto market, you could have fun 72 00:03:20,400 --> 00:03:24,480 Speaker 1: gambling rules. The private market stuff is from first principles, 73 00:03:24,480 --> 00:03:27,880 Speaker 1: you would be like, we want to encourage capitalformation and investing, 74 00:03:28,040 --> 00:03:31,400 Speaker 1: but so we would want to ban insider trading. But 75 00:03:31,520 --> 00:03:33,640 Speaker 1: you know, it's like a higher bar. It's not open 76 00:03:33,680 --> 00:03:36,560 Speaker 1: to all retail investors. It's open to like sophisticated investors, 77 00:03:36,840 --> 00:03:38,960 Speaker 1: and so the sophisticated investors can say, we're going to 78 00:03:39,040 --> 00:03:41,240 Speaker 1: live with some insider trading. And the other reason to 79 00:03:41,280 --> 00:03:45,240 Speaker 1: allow insider trading and private markets is insider trading rules 80 00:03:45,240 --> 00:03:47,840 Speaker 1: and the public markets kind of go along with disclosure rules. 81 00:03:48,200 --> 00:03:51,000 Speaker 1: And so the reason you can insider trade is because 82 00:03:51,000 --> 00:03:52,640 Speaker 1: it's like your company is kind of supposed to make 83 00:03:52,680 --> 00:03:54,720 Speaker 1: everything public anyway, and so if you know something that 84 00:03:54,720 --> 00:03:56,760 Speaker 1: they haven't made public yet, like wait three days and 85 00:03:56,760 --> 00:03:59,320 Speaker 1: then you can trade right in private markets. If your 86 00:03:59,360 --> 00:04:03,440 Speaker 1: company never just closes financial information, then how can you 87 00:04:03,480 --> 00:04:05,840 Speaker 1: ever trade? And it's like it's you know, like there 88 00:04:05,840 --> 00:04:08,760 Speaker 1: are solutions to that. But it seems like a little 89 00:04:08,800 --> 00:04:11,040 Speaker 1: bit harder to ban insider trading in private markets than 90 00:04:11,040 --> 00:04:14,360 Speaker 1: it is in public markets because there's just more information 91 00:04:14,440 --> 00:04:16,680 Speaker 1: that the public doesn't generally have, and so it's a 92 00:04:16,720 --> 00:04:20,840 Speaker 1: little harder for employees to trade, you know, without knowing 93 00:04:20,880 --> 00:04:23,320 Speaker 1: something that the public doesn't know. But the UK has 94 00:04:23,320 --> 00:04:26,400 Speaker 1: decided to strike that balance by just letting the employees trade. 95 00:04:26,880 --> 00:04:31,800 Speaker 2: I want to talk more about the name a little bits. Yeah, 96 00:04:32,120 --> 00:04:34,159 Speaker 2: it seems like a backronym, Like do you think that 97 00:04:34,200 --> 00:04:35,400 Speaker 2: they organically. 98 00:04:35,000 --> 00:04:36,680 Speaker 1: I don't think it's a backronym. I don't know. I 99 00:04:36,680 --> 00:04:37,039 Speaker 1: don't know. 100 00:04:37,200 --> 00:04:41,000 Speaker 2: They like private intermittent securities and capital exchange system. 101 00:04:41,040 --> 00:04:43,680 Speaker 1: I think most financial acronyms are like half backgrounds, right, 102 00:04:43,680 --> 00:04:45,960 Speaker 1: Like they're like kind of write down what it is, yeah, 103 00:04:46,000 --> 00:04:47,760 Speaker 1: and then you're like, ah, that doesn't spell anything, and 104 00:04:47,800 --> 00:04:49,640 Speaker 1: then you like add letters until it's spells something, and 105 00:04:49,680 --> 00:04:51,279 Speaker 1: then you like figure out those letters should stand for. 106 00:04:51,520 --> 00:04:54,520 Speaker 1: So like, yeah, they're like the private securities exchange. That's 107 00:04:54,600 --> 00:04:56,560 Speaker 1: kind of like pisces. Let's add some letters. They get 108 00:04:56,600 --> 00:04:58,440 Speaker 1: the pisces, right, I don't think they were, like, I 109 00:04:58,440 --> 00:05:00,719 Speaker 1: don't think they set out from like, let's name this 110 00:05:00,800 --> 00:05:02,920 Speaker 1: thing after an astrological sign. Maybe they did. 111 00:05:03,080 --> 00:05:05,320 Speaker 2: I love the word intermittent. 112 00:05:05,040 --> 00:05:08,560 Speaker 1: You know rightly that one's like there for the acronym. 113 00:05:08,720 --> 00:05:12,080 Speaker 2: You don't see that word a lot tossed around. Other 114 00:05:12,120 --> 00:05:18,240 Speaker 2: words they could have considered occasional, the posse's I don't 115 00:05:18,279 --> 00:05:18,840 Speaker 2: like that at all. 116 00:05:18,880 --> 00:05:22,200 Speaker 1: Actually you could have gotten into posseas but is a 117 00:05:22,240 --> 00:05:23,400 Speaker 1: little more, little more friendly. 118 00:05:23,640 --> 00:05:28,080 Speaker 2: It's a fish, so this hasn't launched yet, right, that'll 119 00:05:28,080 --> 00:05:30,960 Speaker 2: be fun. I mean, even if they're saying enter at 120 00:05:31,000 --> 00:05:33,359 Speaker 2: your own risks sort of thing. I don't really know 121 00:05:33,400 --> 00:05:35,360 Speaker 2: what the moon music is like over in the UK, 122 00:05:35,440 --> 00:05:37,440 Speaker 2: but I could still see if this were in the US, 123 00:05:37,480 --> 00:05:39,520 Speaker 2: this would still lead to lawsuits. 124 00:05:39,520 --> 00:05:43,240 Speaker 1: And I would posit that insider trading and private companies 125 00:05:43,360 --> 00:05:46,040 Speaker 1: is illegal in the US. Brief you know, there's an 126 00:05:46,080 --> 00:05:48,640 Speaker 1: SEC case from twenty eleven about a company doing employee 127 00:05:48,640 --> 00:05:51,320 Speaker 1: tender offers where they didn't tell the employees that they 128 00:05:51,320 --> 00:05:54,200 Speaker 1: were like negotiating a bridger, and so the SEC sued 129 00:05:54,200 --> 00:05:56,599 Speaker 1: them for fraud, which is like kind of what insider 130 00:05:56,640 --> 00:05:59,320 Speaker 1: trading is in the US. And you know, a lawyer 131 00:05:59,360 --> 00:06:02,560 Speaker 1: pointed out on LinkedIn that there's actually a California law 132 00:06:02,760 --> 00:06:07,600 Speaker 1: against insider trading that applies to private companies. And that's 133 00:06:07,720 --> 00:06:10,320 Speaker 1: relevant because you know, like most of like the private 134 00:06:10,320 --> 00:06:11,960 Speaker 1: companies in the in the US. You know, if you 135 00:06:12,000 --> 00:06:14,840 Speaker 1: say about like they're probably trading in California, so it's 136 00:06:14,839 --> 00:06:17,920 Speaker 1: pretty illegal in the US. But I think as chat 137 00:06:17,960 --> 00:06:20,240 Speaker 1: GPT is private company insider trading or like, you know, 138 00:06:20,279 --> 00:06:22,640 Speaker 1: I googled it and like, yeah, the l AI results 139 00:06:22,640 --> 00:06:24,520 Speaker 1: were like, no, it's fine, go ahead. I could be 140 00:06:24,520 --> 00:06:26,640 Speaker 1: wrong with that. I don't want to slander Google. But 141 00:06:26,800 --> 00:06:28,560 Speaker 1: it's just like it's not like a well known thing. 142 00:06:28,760 --> 00:06:32,120 Speaker 1: There's an SEC case from twenty eleven. There's not twenty 143 00:06:32,160 --> 00:06:35,200 Speaker 1: cases a year. And the reason is like private, you know, 144 00:06:35,240 --> 00:06:37,440 Speaker 1: there's no one suing, no one's like aware of you know, 145 00:06:37,520 --> 00:06:40,400 Speaker 1: like there's just like less ability to find out that 146 00:06:40,440 --> 00:06:42,560 Speaker 1: there was insider trading, right, but like probably there's some 147 00:06:42,600 --> 00:06:44,960 Speaker 1: insider trading. It's just like it's not like they announced 148 00:06:44,960 --> 00:06:47,080 Speaker 1: the bad earnings two days later, right, It's like they 149 00:06:47,120 --> 00:06:48,680 Speaker 1: never announced the bad earning, so you don't know that 150 00:06:48,720 --> 00:06:49,599 Speaker 1: you were insider trading. 151 00:06:50,680 --> 00:06:53,000 Speaker 2: But with the rise of tender offers, which are becoming 152 00:06:53,440 --> 00:06:56,800 Speaker 2: more regular and just secondary market activity in general in 153 00:06:56,839 --> 00:06:58,880 Speaker 2: the US. Do you think that will see more. 154 00:06:58,880 --> 00:07:01,240 Speaker 1: Cases tender offers are they're real? 155 00:07:01,640 --> 00:07:03,919 Speaker 2: Yeah, I don't know enough about tender offers, and I 156 00:07:03,920 --> 00:07:06,520 Speaker 2: thought it was the company buying back shares from employees. 157 00:07:07,000 --> 00:07:10,320 Speaker 1: That's like the normal idea of it, but increasingly it's 158 00:07:10,360 --> 00:07:13,520 Speaker 1: now kind of a two sided trade where the company 159 00:07:13,520 --> 00:07:16,400 Speaker 1: is sort of brokering a trade where some list of 160 00:07:16,440 --> 00:07:20,120 Speaker 1: new investors are buying back shares from employees and old investors. 161 00:07:20,200 --> 00:07:21,800 Speaker 2: Interesting, so it's kind of like, you know, so like 162 00:07:21,800 --> 00:07:24,720 Speaker 2: the company is like the stock exchange kind. 163 00:07:24,560 --> 00:07:26,800 Speaker 1: Of yeah, because there's no stock exchange, and like these 164 00:07:26,800 --> 00:07:29,280 Speaker 1: companies normally have control over the trading of their shares 165 00:07:29,280 --> 00:07:30,880 Speaker 1: and so if you want to buy, if they're the 166 00:07:30,880 --> 00:07:32,440 Speaker 1: company you want to sell, you a theird to the company, 167 00:07:32,440 --> 00:07:34,440 Speaker 1: and so the company, you know, intermediates the trade. 168 00:07:34,640 --> 00:07:37,160 Speaker 2: So maybe we'll see more shenanigans, yeah. 169 00:07:37,000 --> 00:07:38,520 Speaker 1: Because like if you have a tender offer like that, 170 00:07:38,680 --> 00:07:41,200 Speaker 1: or like they're sort of you know, stereotypically, like employees 171 00:07:41,240 --> 00:07:43,600 Speaker 1: are on the selling side and like venture capitalists on 172 00:07:43,640 --> 00:07:45,680 Speaker 1: the buying side, or like you know, growth funds are 173 00:07:45,720 --> 00:07:49,440 Speaker 1: on the buying side. Then you know you probably have 174 00:07:50,160 --> 00:07:54,120 Speaker 1: obligations to disclose material information to both sides, and if 175 00:07:54,160 --> 00:07:56,640 Speaker 1: you mess that up, as you know public companies do 176 00:07:56,680 --> 00:07:58,960 Speaker 1: all the time, you could eventually get lawsuits. 177 00:07:59,040 --> 00:07:59,120 Speaker 2: Right. 178 00:07:59,160 --> 00:08:01,560 Speaker 1: I mean, it's a smaller it's not a ripe field 179 00:08:01,600 --> 00:08:04,520 Speaker 1: for like securities class action lawyers yet, but like you'll 180 00:08:04,560 --> 00:08:05,720 Speaker 1: eventually say, some lawsuits. 181 00:08:05,960 --> 00:08:09,119 Speaker 2: You went to an article from Sarah McBride in your 182 00:08:09,280 --> 00:08:11,360 Speaker 2: column on this and I thought it was interesting, like 183 00:08:11,400 --> 00:08:15,720 Speaker 2: the changing attitudes at these companies towards the fact that 184 00:08:15,760 --> 00:08:20,480 Speaker 2: there is a increasingly vibrant secondary market for their shares, 185 00:08:20,480 --> 00:08:23,080 Speaker 2: like it used to be like a bit taboo, I 186 00:08:23,080 --> 00:08:25,000 Speaker 2: feel like, and companies really didn't like it, but I 187 00:08:25,080 --> 00:08:28,040 Speaker 2: just feel like it's inevitable now. 188 00:08:28,520 --> 00:08:31,480 Speaker 1: I think attitudes remain kind of varied, and like you 189 00:08:31,560 --> 00:08:35,360 Speaker 1: see in pisces in the UK, there's like one aspect 190 00:08:35,400 --> 00:08:37,520 Speaker 1: of the plans the companies will have some control over, 191 00:08:37,960 --> 00:08:39,960 Speaker 1: like when and how their their shares trade, which I 192 00:08:39,960 --> 00:08:43,240 Speaker 1: think is a big draw of the private markets everywhere, 193 00:08:43,240 --> 00:08:45,360 Speaker 1: which is just like you don't want activists to be 194 00:08:45,360 --> 00:08:46,960 Speaker 1: able to buy up your stock without telling you, right, 195 00:08:47,000 --> 00:08:48,520 Speaker 1: Like you want to have some control over who owns 196 00:08:48,520 --> 00:08:50,480 Speaker 1: your stock and when they can buy it. But yeah, 197 00:08:50,480 --> 00:08:54,319 Speaker 1: I mean, like in a world where you are private 198 00:08:54,400 --> 00:08:55,880 Speaker 1: until you're kind of big enough to go public, and 199 00:08:55,920 --> 00:08:59,040 Speaker 1: then you go public, you might really care about preventing 200 00:08:59,040 --> 00:09:00,800 Speaker 1: your employees from selling ntil you're a public in a 201 00:09:00,800 --> 00:09:03,640 Speaker 1: world where the default is kind of the same private forever, 202 00:09:03,720 --> 00:09:06,320 Speaker 1: Like your employees need some liquidity, and yeah, you offer 203 00:09:06,360 --> 00:09:09,400 Speaker 1: tender raffers, but like some companies are also like, you know, 204 00:09:09,440 --> 00:09:11,440 Speaker 1: we'll live with the secondary market. 205 00:09:11,720 --> 00:09:14,440 Speaker 2: You can't eat on your net worth alone. You need 206 00:09:14,440 --> 00:09:15,719 Speaker 2: that liquidity, mat. 207 00:09:15,800 --> 00:09:17,920 Speaker 1: You need that liquidity. I've also written this week of 208 00:09:17,960 --> 00:09:20,760 Speaker 1: at margin lens and tests stock, which is another way 209 00:09:20,760 --> 00:09:23,120 Speaker 1: to get that liquidity. That's a story we don't need 210 00:09:23,160 --> 00:09:23,760 Speaker 1: to talk about that. 211 00:09:37,840 --> 00:09:40,040 Speaker 2: Let's glide gracefully along, shall we. 212 00:09:40,440 --> 00:09:41,520 Speaker 1: Let's glide along. 213 00:09:41,400 --> 00:09:47,199 Speaker 2: Right into the grocery aisle. Kroger and Albertson's. Man, are 214 00:09:47,240 --> 00:09:52,480 Speaker 2: they in a tiff? Yeah, it was a long engagement 215 00:09:53,080 --> 00:09:54,160 Speaker 2: and a messy breakup. 216 00:09:54,440 --> 00:09:56,000 Speaker 1: I have to say I have a soft spot for 217 00:09:56,000 --> 00:09:59,120 Speaker 1: Albertson's because when I was very briefly an M and 218 00:09:59,160 --> 00:10:04,400 Speaker 1: a layer, I did a deal for Albertson's. Like they 219 00:10:04,440 --> 00:10:09,199 Speaker 1: sold themselves to two separate buyers. One was essentially Serberus. 220 00:10:09,400 --> 00:10:12,199 Speaker 1: The thing called Alberton's today is like the Cerberus Anthony. 221 00:10:12,679 --> 00:10:14,040 Speaker 1: And then they sold a lot of stories to a 222 00:10:14,080 --> 00:10:17,000 Speaker 1: company called Supervalue. This like nice midwestern grocery store chain. 223 00:10:17,080 --> 00:10:20,600 Speaker 1: And I was the junior lawyer for super Value. 224 00:10:21,360 --> 00:10:22,800 Speaker 2: I thought you were going to say you grew up 225 00:10:22,840 --> 00:10:25,040 Speaker 2: going to an Albertson's, which like didn't quite try. 226 00:10:25,240 --> 00:10:26,920 Speaker 1: No, But in college I went to like Shaw and 227 00:10:27,000 --> 00:10:29,160 Speaker 1: Star Market, which I learned for Albertson's brands, and I 228 00:10:29,160 --> 00:10:29,520 Speaker 1: was pleased. 229 00:10:30,480 --> 00:10:33,520 Speaker 2: I went to Kings. So I can't relate to this 230 00:10:33,640 --> 00:10:34,160 Speaker 2: in any way. 231 00:10:34,320 --> 00:10:36,520 Speaker 1: Not good at like knowing which grocery brands are un 232 00:10:36,559 --> 00:10:38,400 Speaker 1: by which companies Like for all I know that's a 233 00:10:38,440 --> 00:10:39,800 Speaker 1: Albertson's brand, I don't think it is. 234 00:10:39,920 --> 00:10:42,520 Speaker 2: I don't think it is either. I love Kings anyway. 235 00:10:42,720 --> 00:10:47,480 Speaker 2: So there's all this enthusiasm over the regulatory landscape, how 236 00:10:47,559 --> 00:10:49,400 Speaker 2: we're going to get this big boom and m and A. 237 00:10:49,880 --> 00:10:52,040 Speaker 2: There's some deals that are still dying on the vine. 238 00:10:52,240 --> 00:10:57,840 Speaker 2: Kroger and Albertson's, their proposed merger is one of them. 239 00:10:57,960 --> 00:11:02,079 Speaker 2: And Albertson's suing Kroger saying that they in fact didn't 240 00:11:02,120 --> 00:11:05,160 Speaker 2: do everything that they could have to satisfy the FTC. Here. 241 00:11:05,400 --> 00:11:07,440 Speaker 1: Yeah, so like you signed this deal, and like you know, 242 00:11:07,600 --> 00:11:10,120 Speaker 1: the main problem is antitrust, right, because it's too big 243 00:11:10,120 --> 00:11:14,880 Speaker 1: grocery store chains combining, and in particular it's chains with 244 00:11:15,080 --> 00:11:17,440 Speaker 1: a lot of geographical overlaps. You have a lot of 245 00:11:17,720 --> 00:11:21,559 Speaker 1: places where the Kroger's supermarket competes with the albertson supermarket 246 00:11:21,640 --> 00:11:24,520 Speaker 1: and if they combine, and then there'll be less competition 247 00:11:24,640 --> 00:11:28,360 Speaker 1: and the FTC for the next month doesn't like that. 248 00:11:28,640 --> 00:11:31,560 Speaker 1: Who knows after that? Right, But they signed this deal, 249 00:11:31,600 --> 00:11:33,000 Speaker 1: you know, in twenty twenty two, and so they were 250 00:11:33,000 --> 00:11:37,520 Speaker 1: dealing with the current FDC, and they signed the deal 251 00:11:37,640 --> 00:11:41,360 Speaker 1: hoping to combine, but they knew that there would be 252 00:11:41,640 --> 00:11:45,000 Speaker 1: FDC impediments and the deal required them to sort of 253 00:11:45,160 --> 00:11:47,000 Speaker 1: do everything in their power to get the deal done, 254 00:11:47,040 --> 00:11:50,319 Speaker 1: and in particularly required like Kruger is the buyer. Albertson's 255 00:11:50,440 --> 00:11:53,400 Speaker 1: is much more at risk in that situation because like 256 00:11:53,440 --> 00:11:55,600 Speaker 1: if the deal falls apart, it's bad for Albertsons. This 257 00:11:55,640 --> 00:11:58,760 Speaker 1: is less bad for the larger, more stable buyer. And 258 00:11:58,840 --> 00:12:01,319 Speaker 1: so the deal agreed was like it's called a hell 259 00:12:01,360 --> 00:12:03,120 Speaker 1: or high water clothes. They have to do anything, come 260 00:12:03,160 --> 00:12:05,600 Speaker 1: hell or high water to get the deal closed, except 261 00:12:05,600 --> 00:12:07,000 Speaker 1: they don't have to al more than six hundred and 262 00:12:07,040 --> 00:12:10,080 Speaker 1: fifty stores. And you know, the thing that everyone knew 263 00:12:10,080 --> 00:12:11,800 Speaker 1: they would have to do to get the deal closed 264 00:12:11,880 --> 00:12:14,160 Speaker 1: was to be would be to divest some of their stores. 265 00:12:14,160 --> 00:12:16,439 Speaker 1: And like all those places where at Albertson's and a 266 00:12:16,480 --> 00:12:19,840 Speaker 1: Kroger's compete, you put one of those competing stores into 267 00:12:19,880 --> 00:12:21,920 Speaker 1: a new company, or you sell it to a company 268 00:12:22,160 --> 00:12:24,840 Speaker 1: so that it continues to compete with the combined Krager 269 00:12:24,840 --> 00:12:29,840 Speaker 1: Albertson's and Albertson says that Krager like dragged its feet 270 00:12:29,960 --> 00:12:32,480 Speaker 1: and then propose enough to divestures and then listened to 271 00:12:32,520 --> 00:12:35,840 Speaker 1: the FTC when they asked for more divestres And so 272 00:12:35,920 --> 00:12:40,680 Speaker 1: the FTC eventually sued and their divestiture proposals were so 273 00:12:40,840 --> 00:12:43,640 Speaker 1: bad that the FDC one in court. And so now 274 00:12:43,640 --> 00:12:46,520 Speaker 1: the deal is dead and Albertson's wants billions of dollars 275 00:12:46,559 --> 00:12:48,360 Speaker 1: of damages from Kroger for not getting the deal. 276 00:12:48,400 --> 00:12:52,320 Speaker 2: Then, yeah, I mean Albertson's had two specific gripes with 277 00:12:52,400 --> 00:12:55,679 Speaker 2: the divestiters that they weren't divesting the good stores, and 278 00:12:55,720 --> 00:12:58,040 Speaker 2: also that they didn't like the buyer that they picked 279 00:12:58,040 --> 00:12:59,239 Speaker 2: CNS Whole Sealers. 280 00:12:59,400 --> 00:13:02,800 Speaker 1: I believe it was, Yeah, because CNS is like a 281 00:13:02,840 --> 00:13:05,400 Speaker 1: grocery hill store that doesn't own a lot of grocery stores. 282 00:13:05,400 --> 00:13:07,520 Speaker 1: And yeah, there's some question in the mind of like 283 00:13:07,559 --> 00:13:09,840 Speaker 1: the fac in the court about whether they could successfully 284 00:13:09,880 --> 00:13:14,640 Speaker 1: compete with combined Kroger. Yeah, and apparently Kroger like had 285 00:13:14,679 --> 00:13:17,040 Speaker 1: some sort of auction for these divestitures and like got 286 00:13:17,200 --> 00:13:20,320 Speaker 1: sixty potential bidders, but they didn't, you know, consult Albertson's 287 00:13:20,360 --> 00:13:22,000 Speaker 1: on the bidders and they just picked CNS. And so 288 00:13:22,080 --> 00:13:25,120 Speaker 1: Albertson's is now mad that they could have possibly found 289 00:13:25,160 --> 00:13:27,559 Speaker 1: a better buyer and they didn't, so the deal got killed. 290 00:13:27,800 --> 00:13:29,760 Speaker 2: They have a lot to prove when it comes to 291 00:13:29,800 --> 00:13:30,480 Speaker 2: this lawsuit. 292 00:13:30,760 --> 00:13:33,400 Speaker 1: Yeah, it seems hard. It does seem hard because like 293 00:13:33,920 --> 00:13:35,360 Speaker 1: as what you're trying to prove a kind of factually, 294 00:13:35,360 --> 00:13:37,560 Speaker 1: you're trying to prove they could have proposed a different 295 00:13:38,120 --> 00:13:40,200 Speaker 1: set of stores that I've asked, they could have found 296 00:13:40,200 --> 00:13:42,280 Speaker 1: a better buyer and if they had done that, the 297 00:13:42,320 --> 00:13:44,199 Speaker 1: FTC would have been happy with it. And it's like, well, 298 00:13:44,240 --> 00:13:46,480 Speaker 1: you know, like the FDC is like it's like pretty 299 00:13:46,480 --> 00:13:49,200 Speaker 1: skeptical of big mergers, right, and like it's possible that 300 00:13:49,240 --> 00:13:50,960 Speaker 1: they couldn't have gotten a deal done, or they couldn't 301 00:13:50,960 --> 00:13:53,319 Speaker 1: have gotten a deal done without divesting more than six 302 00:13:53,400 --> 00:13:56,079 Speaker 1: hundred and fifty stores. So they'll definitely be able to 303 00:13:56,120 --> 00:13:57,640 Speaker 1: find places where the're like, oh, they could have done 304 00:13:57,640 --> 00:13:59,520 Speaker 1: a better job. But will they be able to prove 305 00:13:59,559 --> 00:14:02,280 Speaker 1: that they would have gotten the deal and therefore deserve 306 00:14:02,400 --> 00:14:03,800 Speaker 1: billions of dollars of damages? 307 00:14:04,080 --> 00:14:07,679 Speaker 2: Yeah, I was reading the Bloomberg Intelligence take on this, 308 00:14:08,200 --> 00:14:09,920 Speaker 2: so they basically agreed with you, saying that it's going 309 00:14:09,960 --> 00:14:11,800 Speaker 2: to be difficult to prove all this, but they did 310 00:14:11,800 --> 00:14:14,880 Speaker 2: say that they could prove that they're entitled to the 311 00:14:14,920 --> 00:14:17,480 Speaker 2: six hundred million dollar breakup fee. So maybe they won't 312 00:14:17,520 --> 00:14:20,120 Speaker 2: get billions of dollars in damages, but six hundred million 313 00:14:20,160 --> 00:14:25,080 Speaker 2: dollars is it's not nothing, but it's not six billion dollars. 314 00:14:25,160 --> 00:14:27,760 Speaker 1: You can definitely argue that, though I Thinkroger is going 315 00:14:27,800 --> 00:14:30,080 Speaker 1: to say Albertson's preached its agreements and so it's not 316 00:14:30,240 --> 00:14:31,680 Speaker 1: entitled to it. But like that breakup fee is like 317 00:14:31,800 --> 00:14:35,320 Speaker 1: essentially there as like if you can't get through a 318 00:14:35,360 --> 00:14:37,640 Speaker 1: frant i address, Like the seller gets a consolation price, 319 00:14:37,720 --> 00:14:39,680 Speaker 1: so you would expect them to get the breakup fee. 320 00:14:39,760 --> 00:14:42,720 Speaker 2: You touched on this a bit like the reason why 321 00:14:42,800 --> 00:14:47,120 Speaker 2: this has antitrust concerns And Okay, maybe you eliminate some 322 00:14:47,160 --> 00:14:51,160 Speaker 2: local competition and Kroger prices go higher as a result, 323 00:14:51,240 --> 00:14:55,320 Speaker 2: But then you think about this like dystopian future where 324 00:14:56,120 --> 00:15:01,440 Speaker 2: Walmart controls everything, like they're protect local competition, but that 325 00:15:01,480 --> 00:15:06,280 Speaker 2: local competition could just be steamrolled by Walmart in the future. 326 00:15:06,520 --> 00:15:10,600 Speaker 1: I think in general, if you're like a pretty activist 327 00:15:10,720 --> 00:15:13,920 Speaker 1: FTC and like you want to prevent companies from getting 328 00:15:14,000 --> 00:15:16,800 Speaker 1: like you you you're like give careful scartinator mergers. Everyone 329 00:15:16,800 --> 00:15:18,280 Speaker 1: who's doing a merger is going to come and say, no, 330 00:15:18,280 --> 00:15:20,320 Speaker 1: we're actually this is better for competition because we'll be 331 00:15:20,360 --> 00:15:23,000 Speaker 1: able to take on ninety percent of time. The word 332 00:15:23,000 --> 00:15:24,720 Speaker 1: that goes there is Amazon, right, Like we will take 333 00:15:24,760 --> 00:15:26,920 Speaker 1: on Amalon, right, and so you have to let us 334 00:15:26,960 --> 00:15:28,760 Speaker 1: merge because then we'll be big enough to take on Amazon. 335 00:15:29,240 --> 00:15:32,240 Speaker 1: And the SEC I think is skeptical of that part 336 00:15:32,280 --> 00:15:34,560 Speaker 1: because everyone says that part because like they don't get 337 00:15:34,560 --> 00:15:38,400 Speaker 1: to stop Walmart or Amazon right, they get to stop mergers, right, Yeah, 338 00:15:38,480 --> 00:15:40,080 Speaker 1: And so if someone comes to you with a merger, 339 00:15:40,120 --> 00:15:43,200 Speaker 1: you're like, I want to you know, improve competition and 340 00:15:43,240 --> 00:15:45,840 Speaker 1: like reduce the concentration of corporate powers. I'm gonna say 341 00:15:45,880 --> 00:15:47,640 Speaker 1: no to this merger, and they're like, no, no, we're actually 342 00:15:47,640 --> 00:15:49,560 Speaker 1: doing it competing. It's more Omart, like you can't do 343 00:15:49,600 --> 00:15:50,400 Speaker 1: anything but Walmart. 344 00:15:50,640 --> 00:15:54,080 Speaker 2: That's true. I do find myself more sympathetic to that 345 00:15:54,200 --> 00:15:58,360 Speaker 2: narrative when you consider what happened with Jet Blue and Spirit. 346 00:15:58,760 --> 00:16:01,480 Speaker 2: Oh yeah, for example, like the same story, right, Yeah, 347 00:16:01,480 --> 00:16:03,200 Speaker 2: they wouldn't let them merge, just like there's like. 348 00:16:03,200 --> 00:16:05,600 Speaker 1: Those low cost carriers and like they're like, we need 349 00:16:05,640 --> 00:16:07,800 Speaker 1: to be bigger to compete with the legacy carriers and 350 00:16:07,840 --> 00:16:11,560 Speaker 1: like continue to provide price competition. Yeah, And the SEC 351 00:16:11,680 --> 00:16:13,400 Speaker 1: is like, now if you merged, there'll be less competition 352 00:16:13,440 --> 00:16:15,280 Speaker 1: between the two of you, and the price will go higher. 353 00:16:15,320 --> 00:16:18,800 Speaker 2: And then Spirit filed for bankruptcy a couple of years later. 354 00:16:19,320 --> 00:16:22,320 Speaker 1: I don't know enough about like the economics of grocery 355 00:16:22,320 --> 00:16:22,840 Speaker 1: stores to know. 356 00:16:23,000 --> 00:16:27,400 Speaker 2: Like how true you were like a grocery store banker 357 00:16:27,440 --> 00:16:29,640 Speaker 2: in your past life. I feel like every story is the. 358 00:16:29,640 --> 00:16:32,280 Speaker 1: Grocery store layer, but like, I'm sympathetic to the idea. 359 00:16:32,440 --> 00:16:34,880 Speaker 1: It is hard as a grocery stoperator these days to 360 00:16:34,880 --> 00:16:38,440 Speaker 1: compete with Walmart, Costco, Target, which is like not part 361 00:16:38,520 --> 00:16:41,040 Speaker 1: of the market from the FEC's point of view. But no, 362 00:16:41,160 --> 00:16:42,960 Speaker 1: I mean, like the Spirit Jet Blue stuff is just 363 00:16:42,960 --> 00:16:45,840 Speaker 1: like yeah, played out immediately. Yeah, probably letting the merger 364 00:16:45,920 --> 00:16:46,920 Speaker 1: to be better for competition. 365 00:16:47,560 --> 00:16:51,640 Speaker 2: I'm not saying that Albertson's is going to die necessarily. 366 00:16:52,040 --> 00:16:53,840 Speaker 2: It is interesting to look at the stock price though, 367 00:16:53,920 --> 00:16:56,960 Speaker 2: since the start of October twenty twenty two, when the 368 00:16:57,000 --> 00:16:59,480 Speaker 2: steal is first announced, Kroger's is up forty eight percent 369 00:16:59,600 --> 00:17:03,040 Speaker 2: since the Albertson's. I had to check this a few times, 370 00:17:03,080 --> 00:17:05,520 Speaker 2: because they're up eight percent on a total return basis. 371 00:17:05,560 --> 00:17:08,720 Speaker 2: Their share price alone is down like twenty something percent, 372 00:17:09,160 --> 00:17:11,000 Speaker 2: but eight percent on a total return basis. 373 00:17:11,000 --> 00:17:15,359 Speaker 1: So total return basis is like when they signed the deal, Yeah, 374 00:17:15,440 --> 00:17:17,760 Speaker 1: they tland to padd a big dividend. Yeah, it's sort 375 00:17:17,800 --> 00:17:19,520 Speaker 1: of like a down payment on the deal. 376 00:17:19,840 --> 00:17:23,440 Speaker 2: Well, showing up. I love it when share price performance 377 00:17:23,480 --> 00:17:26,200 Speaker 2: doesn't match total return in like a very dramatic way. 378 00:17:26,520 --> 00:17:28,240 Speaker 1: Normally that's not because you're paying a twer cent divot 379 00:17:28,320 --> 00:17:30,199 Speaker 1: in every quarter here. It's because they paid at a 380 00:17:30,200 --> 00:17:33,680 Speaker 1: big dividend as part of the deal. Yeah, so that's 381 00:17:33,720 --> 00:17:34,760 Speaker 1: not The stock. 382 00:17:34,560 --> 00:17:37,320 Speaker 2: Price is not really ap I do wonder where Albertson 383 00:17:37,720 --> 00:17:40,760 Speaker 2: goes from here. I don't expect you to have that answer, Matt, 384 00:17:41,040 --> 00:17:44,800 Speaker 2: so so let's move on. 385 00:17:48,400 --> 00:17:52,200 Speaker 1: It does our producer is telling us that Alberton's does 386 00:17:52,200 --> 00:17:53,240 Speaker 1: in fact own Kings. 387 00:17:53,480 --> 00:17:57,000 Speaker 2: Oh my god. Now I'm personally invested in this story. 388 00:17:57,200 --> 00:18:00,640 Speaker 1: Sure, sure, now, yeah, I love Kings. 389 00:18:00,760 --> 00:18:02,879 Speaker 2: I don't know is it local? Is it is it 390 00:18:02,960 --> 00:18:05,840 Speaker 2: a regional? If it's on the internet, I'm inclined to 391 00:18:05,880 --> 00:18:06,400 Speaker 2: believe it. 392 00:18:06,880 --> 00:18:09,600 Speaker 1: Of Kirker's brand, I didn't recognize, like any of Creaker's Brown's. 393 00:18:09,760 --> 00:18:12,280 Speaker 1: One of them is King Supers, but like s O 394 00:18:12,400 --> 00:18:13,240 Speaker 1: O P E R. 395 00:18:13,640 --> 00:18:17,840 Speaker 2: Oh, yeah, I didn't know that. Have you never been 396 00:18:17,880 --> 00:18:18,480 Speaker 2: to a King's. 397 00:18:19,280 --> 00:18:20,480 Speaker 1: I've been to a King Colin. 398 00:18:21,119 --> 00:18:25,520 Speaker 2: That's not what I'm talking about. The King's near my parents' house. 399 00:18:25,720 --> 00:18:29,240 Speaker 2: This is not interesting anyway. So they had a relaunch party. 400 00:18:32,119 --> 00:18:34,679 Speaker 2: They renovated the store a couple of years back. I 401 00:18:34,680 --> 00:18:37,199 Speaker 2: think I was in crowd school and I went to 402 00:18:37,240 --> 00:18:39,600 Speaker 2: the party. Yeah, I went with my boyfriend now husband, 403 00:18:39,840 --> 00:18:41,280 Speaker 2: and it was. 404 00:18:42,240 --> 00:18:43,919 Speaker 1: Wait, sec, can you set this so you're like in 405 00:18:43,920 --> 00:18:45,320 Speaker 1: grad school in New York? 406 00:18:45,520 --> 00:18:49,000 Speaker 2: Yeah, for sure, and you're like, Joe, yeah. 407 00:18:48,640 --> 00:18:54,800 Speaker 1: There's a supermarket launch in New Jersey. Yeah, I'm clear. 408 00:18:56,480 --> 00:19:02,119 Speaker 2: I don't understand the confusion. I love it. A good quirky, 409 00:19:02,440 --> 00:19:06,880 Speaker 2: quirky outing and supermarket launch party is exactly my sort 410 00:19:06,920 --> 00:19:08,840 Speaker 2: of scene. And it was awesome. I have a photo 411 00:19:08,880 --> 00:19:10,320 Speaker 2: of it on my desk. I'll show you after. 412 00:19:10,440 --> 00:19:11,400 Speaker 1: I do want to see that. 413 00:19:11,480 --> 00:19:13,600 Speaker 2: Yeah, because I had like a photo booth at the 414 00:19:13,640 --> 00:19:17,720 Speaker 2: supermarket and they had all these samples. This was pre pandemic, 415 00:19:17,840 --> 00:19:22,120 Speaker 2: so samples were still cool. Oh god, it was so fun. 416 00:19:22,160 --> 00:19:25,560 Speaker 2: So anyway, man, now I'm rooting for Albertson's because King's 417 00:19:26,000 --> 00:19:28,560 Speaker 2: is a great grocery store and you can find them 418 00:19:28,600 --> 00:19:29,240 Speaker 2: in New Jersey. 419 00:19:29,680 --> 00:19:33,520 Speaker 1: I like food down and the soundtrack is like, you 420 00:19:33,520 --> 00:19:35,919 Speaker 1: know whatever, it's like supermarket music, but it's also frequently 421 00:19:36,000 --> 00:19:40,840 Speaker 1: interrupted by this recorded voice, very enthusiastically saying, spice up 422 00:19:40,880 --> 00:19:44,639 Speaker 1: your dinner with sushi. And it's like like this, like 423 00:19:44,680 --> 00:19:48,720 Speaker 1: you're truly like loving description, like loving enthusiastic description of yeah, 424 00:19:48,800 --> 00:19:53,080 Speaker 1: what sushi is. It's amazing. God, yeah, I've never bought sushi. 425 00:19:53,800 --> 00:19:54,760 Speaker 1: You know what they're trying. 426 00:19:55,680 --> 00:19:58,320 Speaker 2: I just think supermarkets and grocery stores. They really bring 427 00:19:58,359 --> 00:20:14,040 Speaker 2: the community together. Micro strategy, micro strategy. 428 00:20:15,400 --> 00:20:16,000 Speaker 1: What do you got? 429 00:20:16,200 --> 00:20:18,879 Speaker 2: How do we get into micro strategy micro strategy? You 430 00:20:19,000 --> 00:20:20,800 Speaker 2: put this on the list, I know I want to 431 00:20:20,800 --> 00:20:26,120 Speaker 2: talk about MicroStrategy. They obviously buy bitcoin. They're not only 432 00:20:26,200 --> 00:20:28,720 Speaker 2: a software company, so much so that they're being added 433 00:20:28,720 --> 00:20:29,960 Speaker 2: to the NASAQ one hundred. 434 00:20:30,119 --> 00:20:31,680 Speaker 1: I think I've written this, but like when you and 435 00:20:31,720 --> 00:20:33,360 Speaker 1: I talked to John, I think I've maybe even said 436 00:20:33,400 --> 00:20:35,400 Speaker 1: on the podcast, but you and I talked to John Collison, 437 00:20:35,680 --> 00:20:37,600 Speaker 1: and like he said something like, if you run a 438 00:20:37,640 --> 00:20:40,399 Speaker 1: great business, all the capital market stuff take care of itself. 439 00:20:40,480 --> 00:20:42,960 Speaker 1: A company that spends too much time focusing on its 440 00:20:43,000 --> 00:20:45,560 Speaker 1: stock and like doing stuff with its stock is like 441 00:20:45,800 --> 00:20:48,240 Speaker 1: parking up the runtry. Micro strategy is the opposite. 442 00:20:47,920 --> 00:20:49,439 Speaker 2: Attitude we found the foil. 443 00:20:50,400 --> 00:20:53,840 Speaker 1: I like, temperamentally, am much closer to a micro strategy, 444 00:20:54,160 --> 00:20:56,720 Speaker 1: Like I like a company that's doing financial engineering's that's 445 00:20:56,720 --> 00:20:57,400 Speaker 1: that's fun. 446 00:20:57,160 --> 00:21:01,000 Speaker 2: For this is your perfect company. So micro Strategy has 447 00:21:01,040 --> 00:21:03,640 Speaker 2: always been buying a lot of bitcoin. They're particularly buying 448 00:21:03,680 --> 00:21:06,120 Speaker 2: a lot of bitcoin right now. I think for six 449 00:21:06,240 --> 00:21:10,800 Speaker 2: consecutive Mondays they've announced more bitcoin purchases. In October, they 450 00:21:10,800 --> 00:21:14,600 Speaker 2: announced plans to raise forty two billion dollars over three years. 451 00:21:14,840 --> 00:21:15,359 Speaker 2: Three years. 452 00:21:15,480 --> 00:21:16,600 Speaker 1: They're doing it like all now. 453 00:21:16,680 --> 00:21:19,480 Speaker 2: Exactly through a combination of at the market stock sales 454 00:21:19,480 --> 00:21:22,080 Speaker 2: and through convertible debt offerings. But at this rate, they're 455 00:21:22,080 --> 00:21:25,240 Speaker 2: gonna fulfill that target by January. 456 00:21:25,440 --> 00:21:27,000 Speaker 1: Wait, is that true? They don't think they're gonna do 457 00:21:27,040 --> 00:21:29,160 Speaker 1: that much convert No, no, no, I think they're gonna 458 00:21:29,160 --> 00:21:30,760 Speaker 1: do the twenty one billion dollar ATM like. 459 00:21:31,119 --> 00:21:33,199 Speaker 2: But it is twenty one twenty one, like they call 460 00:21:33,200 --> 00:21:36,480 Speaker 2: it the twenty one twenty one plan, but they've burned 461 00:21:36,760 --> 00:21:39,320 Speaker 2: through a lot of it already. 462 00:21:39,560 --> 00:21:42,520 Speaker 1: Of the ATM, the stock, yes, not the convert The 463 00:21:42,520 --> 00:21:44,880 Speaker 1: convert is part because like a convert is like first 464 00:21:44,920 --> 00:21:46,520 Speaker 1: of all, like a convert, like you do an offering, 465 00:21:46,520 --> 00:21:48,320 Speaker 1: you're they going to do five billion dollars or whatever, 466 00:21:48,320 --> 00:21:49,679 Speaker 1: and you go to a bank and you underte an 467 00:21:49,720 --> 00:21:52,040 Speaker 1: offering and you don't do it just tribling out week 468 00:21:52,040 --> 00:21:55,119 Speaker 1: to week. Secondly, actually their converts someone told me like 469 00:21:55,200 --> 00:21:57,800 Speaker 1: they have a lock up in their converts that say 470 00:21:58,080 --> 00:22:00,040 Speaker 1: you can't do another convert for another you know, a 471 00:22:00,080 --> 00:22:00,879 Speaker 1: few months or whatever. 472 00:22:01,000 --> 00:22:03,920 Speaker 2: I saw that as well. I also saw it on Twitter. Yeah, 473 00:22:03,960 --> 00:22:05,919 Speaker 2: I don't know about that. What I don't know if 474 00:22:05,960 --> 00:22:09,679 Speaker 2: that's for real. Ya's okay, So let's assume that's for real. 475 00:22:09,760 --> 00:22:11,760 Speaker 1: Zaes, I can see why I was. The convert investors 476 00:22:11,760 --> 00:22:14,080 Speaker 1: like don't want They are like one of the biggest 477 00:22:14,080 --> 00:22:16,120 Speaker 1: issues is not the biggest issue in the convert market. 478 00:22:16,200 --> 00:22:18,119 Speaker 1: And yeah, you know, there's some limit on how much 479 00:22:18,160 --> 00:22:20,280 Speaker 1: size you can buy, and so convert investors say, I 480 00:22:20,280 --> 00:22:22,040 Speaker 1: don't want to have, you know, the market flooded with 481 00:22:22,080 --> 00:22:24,480 Speaker 1: micro strategy paper. But that's the other point. The point 482 00:22:24,520 --> 00:22:26,400 Speaker 1: is that the stock investors love it. They don't care. 483 00:22:26,440 --> 00:22:28,480 Speaker 1: They love to have the market flooded with more micro 484 00:22:28,560 --> 00:22:31,119 Speaker 1: strategy stock. And like, if your micro strategy you and 485 00:22:31,240 --> 00:22:33,280 Speaker 1: it's a twenty one billion dollar at the market offering 486 00:22:33,320 --> 00:22:38,160 Speaker 1: over the course of three years, and your stock continues 487 00:22:38,200 --> 00:22:40,280 Speaker 1: to trade at like one hundred and fifty percent premium 488 00:22:40,359 --> 00:22:42,119 Speaker 1: to the value of your bitcoin, like you do it 489 00:22:42,160 --> 00:22:43,920 Speaker 1: all now, Like why would you wait? Yeah, there's no 490 00:22:44,000 --> 00:22:44,600 Speaker 1: reason to wait. 491 00:22:44,840 --> 00:22:47,439 Speaker 2: I asked Michael Saylor about it. I interviewed him on 492 00:22:47,520 --> 00:22:51,959 Speaker 2: the television television, Yeah, on Thursday, And I aske him 493 00:22:52,000 --> 00:22:53,600 Speaker 2: about that, like, why all now are you going to 494 00:22:53,680 --> 00:22:55,800 Speaker 2: like lift the ceiling once you got there, And he 495 00:22:55,880 --> 00:22:58,840 Speaker 2: said that basically they went through it faster than they 496 00:22:58,840 --> 00:23:01,760 Speaker 2: thought because they now sit in October and then Trump 497 00:23:01,840 --> 00:23:06,280 Speaker 2: won the presidential election. We had that in November, and 498 00:23:06,400 --> 00:23:08,359 Speaker 2: then he was like, it's off to the races. 499 00:23:08,400 --> 00:23:11,320 Speaker 1: Basically, to me, the micro strategy trade is like micro 500 00:23:11,320 --> 00:23:14,560 Speaker 1: strategy is essentially a pot of bitcoin. It trades at 501 00:23:14,560 --> 00:23:16,359 Speaker 1: a huge premium to the value of that pot of bitcoin. 502 00:23:16,960 --> 00:23:19,480 Speaker 1: If you're anyone, you should say, well, we're going to 503 00:23:19,560 --> 00:23:22,040 Speaker 1: sell the stock which is high, and buy bitcoin, which 504 00:23:22,080 --> 00:23:24,520 Speaker 1: is low, and eventually they'll converge, right, And it's a 505 00:23:24,560 --> 00:23:26,440 Speaker 1: risky trade to do if you're a short seller or whatever, 506 00:23:26,440 --> 00:23:27,639 Speaker 1: but it's an easy trade to do if you're a 507 00:23:27,640 --> 00:23:30,880 Speaker 1: micro strategy, right, because like you have the stock printmore stock, 508 00:23:31,600 --> 00:23:33,480 Speaker 1: and so I think micro strategy is very clearly doing 509 00:23:33,480 --> 00:23:35,959 Speaker 1: that trade. And like if you announce that you're going 510 00:23:36,000 --> 00:23:40,040 Speaker 1: to do twenty one billion dollars of that trade, you think, well, okay, 511 00:23:40,080 --> 00:23:43,040 Speaker 1: that'll converge pretty quickly, right, and like we'll keep doing 512 00:23:43,080 --> 00:23:45,120 Speaker 1: the trade until it converges, right, And if it converges 513 00:23:45,200 --> 00:23:49,000 Speaker 1: next week and like we're selling stock for like less 514 00:23:49,040 --> 00:23:50,959 Speaker 1: than the value of the bitcoin we can buy, then 515 00:23:51,000 --> 00:23:53,720 Speaker 1: we'll stop doing it. Right, But instead the premium has 516 00:23:53,800 --> 00:23:55,920 Speaker 1: it's like compressed a little bit, but it stayed really 517 00:23:55,960 --> 00:23:59,040 Speaker 1: really big. And so if your micro strategy, you're like, what, 518 00:23:59,200 --> 00:24:01,200 Speaker 1: we can keep doing this arbitrage for free, Like we 519 00:24:01,359 --> 00:24:03,439 Speaker 1: better do it, right? Why would you stop? 520 00:24:03,680 --> 00:24:04,000 Speaker 2: Yeah? 521 00:24:04,359 --> 00:24:06,000 Speaker 1: I mean would you slow down? I mean it's it's 522 00:24:06,040 --> 00:24:06,480 Speaker 1: free money. 523 00:24:06,560 --> 00:24:08,960 Speaker 2: Yeah, the reception has been insane, at least on the 524 00:24:09,000 --> 00:24:11,159 Speaker 2: equity side. I did ask him about the dead side, 525 00:24:11,400 --> 00:24:15,159 Speaker 2: because they have been using the equity issuance much more 526 00:24:15,200 --> 00:24:18,800 Speaker 2: than the convertible issuance, and he said he expects that 527 00:24:18,960 --> 00:24:21,320 Speaker 2: mix will shift more heavily to fix income in the 528 00:24:21,440 --> 00:24:25,720 Speaker 2: second quarter. But I want to get your thoughts on this. 529 00:24:25,960 --> 00:24:27,280 Speaker 1: Why did you say fixed income? 530 00:24:27,880 --> 00:24:30,200 Speaker 2: Yeah, that's what he said. Yeah, that's a direct. 531 00:24:30,040 --> 00:24:32,399 Speaker 1: Quote, because I feel like they do converts, and like 532 00:24:32,440 --> 00:24:36,119 Speaker 1: their converts are all immediately hugely on the money. 533 00:24:36,160 --> 00:24:37,640 Speaker 2: This is what he said, let me read it. He 534 00:24:38,240 --> 00:24:40,760 Speaker 2: expects the mix will shift more heavily to fix income 535 00:24:40,840 --> 00:24:43,320 Speaker 2: his words in Q two, because right now we're getting 536 00:24:43,320 --> 00:24:46,120 Speaker 2: too de levered, and we'd like to get more leverage. 537 00:24:46,359 --> 00:24:48,840 Speaker 2: We have about seven point two billion dollars of converts. 538 00:24:49,320 --> 00:24:52,399 Speaker 2: Four billion are already equity through the strike price, et cetera. 539 00:24:52,640 --> 00:24:55,160 Speaker 2: So they're looking like equity. We'd like to go back 540 00:24:55,200 --> 00:24:58,360 Speaker 2: and build more intelligent leverage for the benefit of our 541 00:24:58,400 --> 00:25:00,000 Speaker 2: common stock shareholders. 542 00:25:01,240 --> 00:25:03,439 Speaker 1: Yeah, I think that makes sense, right, I mean, like 543 00:25:03,520 --> 00:25:06,000 Speaker 1: I do think that, Like, if your stock is trading, 544 00:25:06,040 --> 00:25:08,080 Speaker 1: it's such a huge premium to your net asset value, 545 00:25:08,200 --> 00:25:12,919 Speaker 1: Like it seems a little crazy dead there. Converts, Like, 546 00:25:13,800 --> 00:25:17,000 Speaker 1: he's right that their effect to the equity, right, if 547 00:25:17,040 --> 00:25:19,040 Speaker 1: the stock keeps going up, they're the fact of the equity, 548 00:25:19,040 --> 00:25:21,520 Speaker 1: and so you're not really getting a ton of like leverage. Blue. 549 00:25:22,200 --> 00:25:23,560 Speaker 1: But the other thing about the converts is that I 550 00:25:23,560 --> 00:25:27,760 Speaker 1: read about this, a convert is like you're selling volatility, right, 551 00:25:27,800 --> 00:25:31,160 Speaker 1: Like your convert investors are buying the convert because it's 552 00:25:31,160 --> 00:25:33,840 Speaker 1: an equity option, and the option is more valuable the 553 00:25:33,880 --> 00:25:36,919 Speaker 1: more volatile your stock is. And micro Strategy stock is 554 00:25:36,920 --> 00:25:41,439 Speaker 1: incredibly volatile, in part because it's a crazy proposition, but 555 00:25:41,560 --> 00:25:43,720 Speaker 1: like in large part because of and we've talked about 556 00:25:43,720 --> 00:25:47,840 Speaker 1: this too, like the double levered ETFs. They're like single 557 00:25:47,880 --> 00:25:51,520 Speaker 1: stock levered ETFs on micro Strategy, they're on billions of 558 00:25:51,560 --> 00:25:53,679 Speaker 1: dollars of stock. And I think you've said this on 559 00:25:53,720 --> 00:25:55,600 Speaker 1: the show, Like they add to the volatility because every 560 00:25:55,600 --> 00:25:57,280 Speaker 1: time the stock goes up at the end of the day, 561 00:25:57,280 --> 00:25:59,359 Speaker 1: they have to buy buy more stock to remain like 562 00:25:59,400 --> 00:26:01,919 Speaker 1: the proper leverage. Every time the stock goes down, they 563 00:26:01,960 --> 00:26:03,480 Speaker 1: have the sell stock to get back to the proper 564 00:26:03,560 --> 00:26:06,320 Speaker 1: level of leverage. And so they are adding enormously to 565 00:26:06,320 --> 00:26:08,120 Speaker 1: the volatility. They buy when it's up and they sell 566 00:26:08,119 --> 00:26:09,960 Speaker 1: when it's down, and so they make the stock like 567 00:26:10,080 --> 00:26:11,640 Speaker 1: more than you know, that's like more than one hundred 568 00:26:11,680 --> 00:26:15,080 Speaker 1: percent annual volatility, which is great for convert investors because 569 00:26:15,119 --> 00:26:17,600 Speaker 1: convert investors are doing the opposite trade and they're basically 570 00:26:17,600 --> 00:26:21,199 Speaker 1: getting like free volatility from these ETFs. And so, like, 571 00:26:21,480 --> 00:26:23,359 Speaker 1: I've always been skeptical of the idea that it's a 572 00:26:23,480 --> 00:26:27,320 Speaker 1: leveraged bitcoin fund because yes, it has leverage, but like 573 00:26:27,720 --> 00:26:30,720 Speaker 1: the premium and the equity price is so much greater 574 00:26:30,760 --> 00:26:32,400 Speaker 1: than the leverage. Like if you put a dollar into 575 00:26:32,440 --> 00:26:34,200 Speaker 1: micro Strategy stock, you're getting less than a dollars with 576 00:26:34,240 --> 00:26:36,719 Speaker 1: their bigoins. There's not really leveraged, right, but they are 577 00:26:36,720 --> 00:26:39,639 Speaker 1: selling volatility because people want to buy their volatility, So 578 00:26:40,040 --> 00:26:44,720 Speaker 1: selling overpriced stock and selling like incredible volatility convert investors 579 00:26:44,720 --> 00:26:46,160 Speaker 1: are both like, yeah, that's a gret trade. They should 580 00:26:46,160 --> 00:26:46,400 Speaker 1: do that. 581 00:26:46,680 --> 00:26:47,720 Speaker 2: Well, there's more of a coming. 582 00:26:47,960 --> 00:26:50,960 Speaker 1: Sure, you gotta do it till it stops, right, Yeah, 583 00:26:51,400 --> 00:26:52,640 Speaker 1: it's like irrational not. 584 00:26:52,640 --> 00:26:55,600 Speaker 2: To if the music is playing, you're going to dance. 585 00:26:55,800 --> 00:27:01,520 Speaker 1: And they're so far stopping. Yeah, is something that previous 586 00:27:01,560 --> 00:27:03,359 Speaker 1: compressed a little bit, but it's like it's still a 587 00:27:03,359 --> 00:27:05,160 Speaker 1: great trade for them. Theah thing I want to say 588 00:27:05,200 --> 00:27:06,680 Speaker 1: is I read about this a little bit like other 589 00:27:06,720 --> 00:27:08,080 Speaker 1: companies are like, wow, it is a great trade, we 590 00:27:08,080 --> 00:27:09,600 Speaker 1: should do this right. Yeah. And the way you do it, 591 00:27:09,600 --> 00:27:12,720 Speaker 1: it's not shorty micro strategy. It's just like a wish right. 592 00:27:13,000 --> 00:27:14,399 Speaker 1: The way you do it is like you sell your 593 00:27:14,400 --> 00:27:17,200 Speaker 1: own stock like you're company. You're like, you know, you're 594 00:27:17,200 --> 00:27:19,199 Speaker 1: not having that much fun as a company. You just 595 00:27:19,240 --> 00:27:21,560 Speaker 1: buy all the bitcoin that you can buy, sayeh or 596 00:27:21,600 --> 00:27:23,360 Speaker 1: micro strategy, and then you sell your stock to fund 597 00:27:23,359 --> 00:27:25,040 Speaker 1: more bitcoin buying. And it like has worked for some 598 00:27:25,080 --> 00:27:27,480 Speaker 1: companies where they traded a premium to their bitcoin whole 599 00:27:27,520 --> 00:27:30,000 Speaker 1: things and I also have other businesses, So it's like 600 00:27:30,040 --> 00:27:32,400 Speaker 1: it's hard to exactly calculate that, but you know, they 601 00:27:32,480 --> 00:27:34,959 Speaker 1: can raise money from investors to you know, they can 602 00:27:35,000 --> 00:27:36,600 Speaker 1: do at the market offerings to buy bitcuin. 603 00:27:36,920 --> 00:27:38,719 Speaker 2: The other thing I wanted to talk about is the 604 00:27:38,760 --> 00:27:42,320 Speaker 2: index inclusion a little bit. It was announced last Friday 605 00:27:42,440 --> 00:27:45,119 Speaker 2: that they will get added to the NASAQ one hundred. 606 00:27:45,400 --> 00:27:47,800 Speaker 2: And people think of the NASAQ one hundred as a 607 00:27:47,840 --> 00:27:51,320 Speaker 2: big tech benchmark. It's not actually a tech benchmark, but 608 00:27:51,359 --> 00:27:58,159 Speaker 2: it's specifically non financial companies. Micro Strategy was controversial because, Okay, 609 00:27:58,200 --> 00:28:01,040 Speaker 2: they have a financial company, they have software business. They 610 00:28:01,040 --> 00:28:04,840 Speaker 2: have a software business. It's obviously not the main focus obviously, 611 00:28:04,960 --> 00:28:07,280 Speaker 2: And I did ask Sailor. I was like, do you 612 00:28:07,359 --> 00:28:10,359 Speaker 2: think of yourself as a software business? He founded it, 613 00:28:10,400 --> 00:28:12,679 Speaker 2: co founded it in nineteen eighty nine as a software 614 00:28:12,680 --> 00:28:16,680 Speaker 2: business god And he he said, I think of ourselves 615 00:28:16,960 --> 00:28:19,399 Speaker 2: primarily as a bitcoin treasury company. 616 00:28:19,440 --> 00:28:22,040 Speaker 1: Now, I mean that's like, they're so, yeah. 617 00:28:22,800 --> 00:28:24,800 Speaker 2: You heard that from the horse's mouth. Should it be? 618 00:28:25,320 --> 00:28:27,280 Speaker 1: Like part of what the arbitrage is in micro Strategy 619 00:28:27,359 --> 00:28:29,760 Speaker 1: is like a lot of people want to buy bitcoin, 620 00:28:30,320 --> 00:28:33,200 Speaker 1: some people can't buy bitcoin, like physically buying bitcoin, and 621 00:28:33,240 --> 00:28:34,879 Speaker 1: so that they were like, well, buy ETFs or whatever. 622 00:28:35,160 --> 00:28:38,120 Speaker 1: Some people can't buy ETFs. Right, if you're an equity 623 00:28:38,120 --> 00:28:40,320 Speaker 1: fund manager, it's a little weird for you to buy, like, 624 00:28:40,360 --> 00:28:43,040 Speaker 1: you know, an ETF like a bitcoin. It's fine for 625 00:28:43,080 --> 00:28:44,120 Speaker 1: you to buy a software company. 626 00:28:44,200 --> 00:28:44,360 Speaker 2: Right. 627 00:28:44,560 --> 00:28:47,400 Speaker 1: If you're an index fund, you know, you don't buy 628 00:28:47,400 --> 00:28:49,160 Speaker 1: atfs because the ETFs aren't in the index. But you 629 00:28:49,160 --> 00:28:51,160 Speaker 1: can buy a micro strategy because it's in the index. 630 00:28:51,240 --> 00:28:51,640 Speaker 2: That's true. 631 00:28:51,720 --> 00:28:53,480 Speaker 1: So it's a real it's like an r B. I'm like, 632 00:28:53,520 --> 00:28:56,920 Speaker 1: who is allowed to buy? Like, there's just people who 633 00:28:56,960 --> 00:28:58,560 Speaker 1: want to buy bitcoin, and this is the closest thing 634 00:28:58,560 --> 00:29:00,560 Speaker 1: they can get to buying bitcoin their mandate. 635 00:29:01,000 --> 00:29:03,680 Speaker 2: There is speculation that they could be eligible for the 636 00:29:03,760 --> 00:29:06,600 Speaker 2: S and P five hundred next year because there's going 637 00:29:06,640 --> 00:29:09,360 Speaker 2: to be new accounting rules that go into effect, which 638 00:29:09,480 --> 00:29:13,400 Speaker 2: I know not enough about. But under those new accounting rules, 639 00:29:13,480 --> 00:29:17,320 Speaker 2: I believe that MicroStrategy is it's thought that they will 640 00:29:17,360 --> 00:29:20,320 Speaker 2: then meet the profitability requirements to be included in the 641 00:29:20,400 --> 00:29:23,880 Speaker 2: S and P five hundred, which is if you thought, 642 00:29:23,920 --> 00:29:28,640 Speaker 2: like the NASAQ one hundred inclusion was controversial, MicroStrategy getting 643 00:29:28,640 --> 00:29:30,760 Speaker 2: added to the s and P five hundred will cause 644 00:29:30,920 --> 00:29:36,400 Speaker 2: so much parl clutching, because that's what like retirement funds track. 645 00:29:36,560 --> 00:29:38,440 Speaker 2: You know, I don't. 646 00:29:40,360 --> 00:29:43,200 Speaker 1: It's a great arbitrage where a bitcoin treasury company is 647 00:29:43,240 --> 00:29:45,720 Speaker 1: almost saying we're a bitcoin investment fund, but it's not 648 00:29:45,800 --> 00:29:47,680 Speaker 1: quite right. It's you can you can be in the 649 00:29:47,680 --> 00:29:50,120 Speaker 1: index and still be like, no, we're just a regular company. 650 00:29:50,160 --> 00:29:51,120 Speaker 1: All we do is on bitcoin. 651 00:29:51,200 --> 00:29:52,880 Speaker 2: But I'm just thinking about like my four oh one K, 652 00:29:53,240 --> 00:29:55,680 Speaker 2: you know. 653 00:29:54,760 --> 00:29:57,440 Speaker 1: So much more volatile, right because like your for and 654 00:29:57,520 --> 00:30:00,440 Speaker 1: K at that point, well on some bitcoin, yeah, but 655 00:30:00,560 --> 00:30:03,560 Speaker 1: mostly it'll well a lot of it will own micro 656 00:30:03,560 --> 00:30:06,280 Speaker 1: strategy premium, right, Yeah, if it continues to trade it 657 00:30:06,280 --> 00:30:08,640 Speaker 1: a huge premium to the bitcoin, it'll just be like, 658 00:30:08,680 --> 00:30:11,440 Speaker 1: you know, like just slice of premium, but your for 659 00:30:11,520 --> 00:30:12,200 Speaker 1: our own gavalan. 660 00:30:12,720 --> 00:30:15,000 Speaker 2: There's so much to look forward to in twenty twenty five. 661 00:30:16,800 --> 00:30:19,400 Speaker 2: I wasn't expecting your eyes to go dark at that. 662 00:30:20,400 --> 00:30:22,280 Speaker 2: The light just went out in Matt's eyes. 663 00:30:22,480 --> 00:30:24,400 Speaker 1: I take it back, I take yeah, you're right, there's 664 00:30:24,440 --> 00:30:26,120 Speaker 1: so much luck for it to in twenty twenty five. 665 00:30:27,760 --> 00:30:28,680 Speaker 2: Speaking of I. 666 00:30:28,640 --> 00:30:30,320 Speaker 1: Know, I was gonna say, it reminds me that I 667 00:30:30,400 --> 00:30:32,560 Speaker 1: just wrote the last Money Stuff of twenty twenty four 668 00:30:32,800 --> 00:30:37,440 Speaker 1: and programming note, we're taking next week off and then 669 00:30:37,480 --> 00:30:39,680 Speaker 1: we'll be back with an entire episode of questions from 670 00:30:39,720 --> 00:30:43,720 Speaker 1: our It says here now for our first episode of 671 00:30:43,720 --> 00:30:44,680 Speaker 1: twenty twenty five. 672 00:30:45,240 --> 00:30:49,120 Speaker 2: Happy holidays, Kitty, Happy holidays, Matt. We'll be back next 673 00:30:49,240 --> 00:30:52,800 Speaker 2: year with more stuff. God, it was so good. 674 00:30:55,240 --> 00:30:56,680 Speaker 1: And that was Money Stuff Podcast. 675 00:30:56,840 --> 00:30:58,680 Speaker 2: I'm Matt Luvia and I'm Katy Greifeld. 676 00:30:59,160 --> 00:31:01,240 Speaker 1: You can find my word by subscribing to the Money 677 00:31:01,240 --> 00:31:03,560 Speaker 1: Stuff newsletter on Bloomberg dot com. 678 00:31:03,280 --> 00:31:05,760 Speaker 2: And you can find me on Bloomberg TV every day 679 00:31:05,840 --> 00:31:08,920 Speaker 2: on Open Interest between nine to eleven am Eastern. 680 00:31:09,320 --> 00:31:11,000 Speaker 1: We'd love to hear from you. You can send an 681 00:31:11,000 --> 00:31:14,240 Speaker 1: email to Moneypod at Bloomberg dot net, ask us a 682 00:31:14,280 --> 00:31:15,720 Speaker 1: question and we might answer it on air. 683 00:31:16,040 --> 00:31:18,160 Speaker 2: You can also subscribe to our show wherever you're listening 684 00:31:18,280 --> 00:31:20,280 Speaker 2: right now and leave us a review. 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