WEBVTT - Half Backronym: PISCES, ACI, MSTR 0:00:03.080 --> 0:00:12.119 Bloomberg Audio Studios, Podcasts, Radio News. Hello and welcome to 0:00:12.119 --> 0:00:14.920 the Money Stuff Podcast. You're a weekly podcast where we 0:00:14.960 --> 0:00:19.160 talk about stuff related to money. I'm Matt Levin and 0:00:19.239 --> 0:00:21.439 I are at the Money Stuff column for Bloomberg Opinion. 0:00:21.680 --> 0:00:24.119 And I'm Katie Greifeld, a reporter for Bloomberg News and 0:00:24.160 --> 0:00:25.560 an anchor for Bloomberg Television. 0:00:26.680 --> 0:00:27.960 What are we at today, Katie? 0:00:28.200 --> 0:00:31.520 We're going to talk about insider trading it's now legal 0:00:31.880 --> 0:00:34.440 in the UK and only in private markets. Then we're 0:00:34.440 --> 0:00:38.360 going to talk about drama the grocery store, and then 0:00:38.360 --> 0:00:41.479 we're going to talk about micro strategy and Michael Saylor. 0:00:41.600 --> 0:00:43.440 Sounds great, let's get into it. 0:00:45.479 --> 0:00:47.280 Insider trading, it's great. 0:00:47.479 --> 0:00:50.000 Yeah, if you guys had on this podcast, I love 0:00:50.000 --> 0:00:52.000 insider trading. And then and then I walked it back 0:00:52.240 --> 0:00:53.239 and you qualified. 0:00:52.880 --> 0:00:55.080 It a few a few different ways. But in the 0:00:55.160 --> 0:01:00.040 UK now in certain circumstances it's maybe not encouraged, but 0:01:00.480 --> 0:01:01.800 maybe not not allowed. 0:01:01.920 --> 0:01:05.400 They're launching this thing called PISCES, which stands for Private 0:01:05.440 --> 0:01:08.480 Intermittent Securities and Capital Exchanges. This is like a thing 0:01:08.520 --> 0:01:11.080 that everyone talks about. Private companies have become such a 0:01:11.080 --> 0:01:15.520 big part of the market and are so important. And 0:01:15.560 --> 0:01:17.840 the thing about being a private company is you can't 0:01:17.880 --> 0:01:19.920 trade their stock, and I was like, well, shouldn't you 0:01:20.000 --> 0:01:21.320 be able to trade their stock? And so like there 0:01:21.319 --> 0:01:23.800 are all sorts of like solutions and marketplaces that have 0:01:23.840 --> 0:01:27.240 sprung up, and the UK is building this regulatory soundbox 0:01:27.240 --> 0:01:29.399 where basically they're gonna have a set of rules for 0:01:29.440 --> 0:01:32.080 the private market that are different from the rules for 0:01:32.160 --> 0:01:35.520 public market less publicity, but allowed for some trading of 0:01:35.560 --> 0:01:38.800 private market shares. And in setting up those rules, they 0:01:38.800 --> 0:01:42.800 thought should it be legal to insider trade? And they decided, sure, 0:01:42.880 --> 0:01:45.240 why not, let's make it legal to insider trade, which 0:01:45.280 --> 0:01:48.400 I think, like, you know, I'm kind of cautiously optimistic 0:01:48.440 --> 0:01:49.680 for it because I love insider trading. 0:01:50.400 --> 0:01:53.840 So reading this, as I was working my way through 0:01:53.880 --> 0:01:56.280 the column, I was thinking about the fun market. And 0:01:56.320 --> 0:01:58.760 then you did get there that you have the nice 0:01:58.760 --> 0:02:00.560 market and then you have the fund mark, which is 0:02:00.600 --> 0:02:04.200 similar to the doped up Olympics, where let's just see 0:02:04.240 --> 0:02:04.880 what happens. 0:02:05.200 --> 0:02:07.120 Yeah, right, it's the doped up Olympics, right. I mean, 0:02:07.160 --> 0:02:08.760 like I've written about like this idea of having the 0:02:08.840 --> 0:02:11.120 nice market, where like there are rules and like everyone's 0:02:11.120 --> 0:02:13.560 suposed to be on kind of an informational level playing field. 0:02:13.840 --> 0:02:15.280 And then like there's the idea of the fun market, 0:02:15.320 --> 0:02:16.760 where there are no rules and you kind of just 0:02:16.800 --> 0:02:18.560 do whatever you want. And I sort of started thinking 0:02:18.560 --> 0:02:20.520 about that in terms of crypto, because like there's there 0:02:20.520 --> 0:02:23.120 a reason in the abstract for crypto to like ban 0:02:23.280 --> 0:02:26.000 market manipulation. And we've talked about like the Mango markets guy, right, Like, 0:02:26.040 --> 0:02:28.079 there was like this notion in crypto that like, if 0:02:28.080 --> 0:02:30.320 you can do it, it's legal, right, and there's no rules. 0:02:30.760 --> 0:02:34.239 And it turns out that like US regulators impose a 0:02:34.280 --> 0:02:37.560 lot of market manipulation rules, even on crypto markets, to 0:02:37.639 --> 0:02:40.880 the surprise of some crypto market manipulators. But like you know, 0:02:40.960 --> 0:02:43.080 in cryptosa, like it's just like it's a set of 0:02:43.120 --> 0:02:46.160 gambling tokens. So like whatever rules everyone agrees to are fun. 0:02:46.800 --> 0:02:48.680 In capital markets, it's a little different, right, Like you 0:02:48.800 --> 0:02:51.880 have rules of capital markets in part because you think 0:02:51.880 --> 0:02:54.840 they're the right rules to like encourage retirement saving and 0:02:54.880 --> 0:02:58.520 capital formation. And I think the consensus is that in 0:02:58.560 --> 0:03:02.400 public markets, insider trading is bad because people will be 0:03:02.480 --> 0:03:04.360 less likely to invest their money in the stock market 0:03:04.400 --> 0:03:06.760 if they think everyone is insider trading against them. And 0:03:06.800 --> 0:03:08.960 if they think everyone's insider trading against them, then it'll 0:03:08.960 --> 0:03:11.320 be harder for companies to raise money. And like, what 0:03:11.360 --> 0:03:14.520 you want in a stock market is capital formation, like 0:03:14.520 --> 0:03:17.800 retirement savings and not so much fun gambling, but like, 0:03:17.840 --> 0:03:20.320 you know, like a crypto market, you could have fun 0:03:20.400 --> 0:03:24.480 gambling rules. The private market stuff is from first principles, 0:03:24.480 --> 0:03:27.880 you would be like, we want to encourage capitalformation and investing, 0:03:28.040 --> 0:03:31.400 but so we would want to ban insider trading. But 0:03:31.520 --> 0:03:33.640 you know, it's like a higher bar. It's not open 0:03:33.680 --> 0:03:36.560 to all retail investors. It's open to like sophisticated investors, 0:03:36.840 --> 0:03:38.960 and so the sophisticated investors can say, we're going to 0:03:39.040 --> 0:03:41.240 live with some insider trading. And the other reason to 0:03:41.280 --> 0:03:45.240 allow insider trading and private markets is insider trading rules 0:03:45.240 --> 0:03:47.840 and the public markets kind of go along with disclosure rules. 0:03:48.200 --> 0:03:51.000 And so the reason you can insider trade is because 0:03:51.000 --> 0:03:52.640 it's like your company is kind of supposed to make 0:03:52.680 --> 0:03:54.720 everything public anyway, and so if you know something that 0:03:54.720 --> 0:03:56.760 they haven't made public yet, like wait three days and 0:03:56.760 --> 0:03:59.320 then you can trade right in private markets. If your 0:03:59.360 --> 0:04:03.440 company never just closes financial information, then how can you 0:04:03.480 --> 0:04:05.840 ever trade? And it's like it's you know, like there 0:04:05.840 --> 0:04:08.760 are solutions to that. But it seems like a little 0:04:08.800 --> 0:04:11.040 bit harder to ban insider trading in private markets than 0:04:11.040 --> 0:04:14.360 it is in public markets because there's just more information 0:04:14.440 --> 0:04:16.680 that the public doesn't generally have, and so it's a 0:04:16.720 --> 0:04:20.840 little harder for employees to trade, you know, without knowing 0:04:20.880 --> 0:04:23.320 something that the public doesn't know. But the UK has 0:04:23.320 --> 0:04:26.400 decided to strike that balance by just letting the employees trade. 0:04:26.880 --> 0:04:31.800 I want to talk more about the name a little bits. Yeah, 0:04:32.120 --> 0:04:34.159 it seems like a backronym, Like do you think that 0:04:34.200 --> 0:04:35.400 they organically. 0:04:35.000 --> 0:04:36.680 I don't think it's a backronym. I don't know. I 0:04:36.680 --> 0:04:37.039 don't know. 0:04:37.200 --> 0:04:41.000 They like private intermittent securities and capital exchange system. 0:04:41.040 --> 0:04:43.680 I think most financial acronyms are like half backgrounds, right, 0:04:43.680 --> 0:04:45.960 Like they're like kind of write down what it is, yeah, 0:04:46.000 --> 0:04:47.760 and then you're like, ah, that doesn't spell anything, and 0:04:47.800 --> 0:04:49.640 then you like add letters until it's spells something, and 0:04:49.680 --> 0:04:51.279 then you like figure out those letters should stand for. 0:04:51.520 --> 0:04:54.520 So like, yeah, they're like the private securities exchange. That's 0:04:54.600 --> 0:04:56.560 kind of like pisces. Let's add some letters. They get 0:04:56.600 --> 0:04:58.440 the pisces, right, I don't think they were, like, I 0:04:58.440 --> 0:05:00.719 don't think they set out from like, let's name this 0:05:00.800 --> 0:05:02.920 thing after an astrological sign. Maybe they did. 0:05:03.080 --> 0:05:05.320 I love the word intermittent. 0:05:05.040 --> 0:05:08.560 You know rightly that one's like there for the acronym. 0:05:08.720 --> 0:05:12.080 You don't see that word a lot tossed around. Other 0:05:12.120 --> 0:05:18.240 words they could have considered occasional, the posse's I don't 0:05:18.279 --> 0:05:18.840 like that at all. 0:05:18.880 --> 0:05:22.200 Actually you could have gotten into posseas but is a 0:05:22.240 --> 0:05:23.400 little more, little more friendly. 0:05:23.640 --> 0:05:28.080 It's a fish, so this hasn't launched yet, right, that'll 0:05:28.080 --> 0:05:30.960 be fun. I mean, even if they're saying enter at 0:05:31.000 --> 0:05:33.359 your own risks sort of thing. I don't really know 0:05:33.400 --> 0:05:35.360 what the moon music is like over in the UK, 0:05:35.440 --> 0:05:37.440 but I could still see if this were in the US, 0:05:37.480 --> 0:05:39.520 this would still lead to lawsuits. 0:05:39.520 --> 0:05:43.240 And I would posit that insider trading and private companies 0:05:43.360 --> 0:05:46.040 is illegal in the US. Brief you know, there's an 0:05:46.080 --> 0:05:48.640 SEC case from twenty eleven about a company doing employee 0:05:48.640 --> 0:05:51.320 tender offers where they didn't tell the employees that they 0:05:51.320 --> 0:05:54.200 were like negotiating a bridger, and so the SEC sued 0:05:54.200 --> 0:05:56.599 them for fraud, which is like kind of what insider 0:05:56.640 --> 0:05:59.320 trading is in the US. And you know, a lawyer 0:05:59.360 --> 0:06:02.560 pointed out on LinkedIn that there's actually a California law 0:06:02.760 --> 0:06:07.600 against insider trading that applies to private companies. And that's 0:06:07.720 --> 0:06:10.320 relevant because you know, like most of like the private 0:06:10.320 --> 0:06:11.960 companies in the in the US. You know, if you 0:06:12.000 --> 0:06:14.840 say about like they're probably trading in California, so it's 0:06:14.839 --> 0:06:17.920 pretty illegal in the US. But I think as chat 0:06:17.960 --> 0:06:20.240 GPT is private company insider trading or like, you know, 0:06:20.279 --> 0:06:22.640 I googled it and like, yeah, the l AI results 0:06:22.640 --> 0:06:24.520 were like, no, it's fine, go ahead. I could be 0:06:24.520 --> 0:06:26.640 wrong with that. I don't want to slander Google. But 0:06:26.800 --> 0:06:28.560 it's just like it's not like a well known thing. 0:06:28.760 --> 0:06:32.120 There's an SEC case from twenty eleven. There's not twenty 0:06:32.160 --> 0:06:35.200 cases a year. And the reason is like private, you know, 0:06:35.240 --> 0:06:37.440 there's no one suing, no one's like aware of you know, 0:06:37.520 --> 0:06:40.400 like there's just like less ability to find out that 0:06:40.440 --> 0:06:42.560 there was insider trading, right, but like probably there's some 0:06:42.600 --> 0:06:44.960 insider trading. It's just like it's not like they announced 0:06:44.960 --> 0:06:47.080 the bad earnings two days later, right, It's like they 0:06:47.120 --> 0:06:48.680 never announced the bad earning, so you don't know that 0:06:48.720 --> 0:06:49.599 you were insider trading. 0:06:50.680 --> 0:06:53.000 But with the rise of tender offers, which are becoming 0:06:53.440 --> 0:06:56.800 more regular and just secondary market activity in general in 0:06:56.839 --> 0:06:58.880 the US. Do you think that will see more. 0:06:58.880 --> 0:07:01.240 Cases tender offers are they're real? 0:07:01.640 --> 0:07:03.919 Yeah, I don't know enough about tender offers, and I 0:07:03.920 --> 0:07:06.520 thought it was the company buying back shares from employees. 0:07:07.000 --> 0:07:10.320 That's like the normal idea of it, but increasingly it's 0:07:10.360 --> 0:07:13.520 now kind of a two sided trade where the company 0:07:13.520 --> 0:07:16.400 is sort of brokering a trade where some list of 0:07:16.440 --> 0:07:20.120 new investors are buying back shares from employees and old investors. 0:07:20.200 --> 0:07:21.800 Interesting, so it's kind of like, you know, so like 0:07:21.800 --> 0:07:24.720 the company is like the stock exchange kind. 0:07:24.560 --> 0:07:26.800 Of yeah, because there's no stock exchange, and like these 0:07:26.800 --> 0:07:29.280 companies normally have control over the trading of their shares 0:07:29.280 --> 0:07:30.880 and so if you want to buy, if they're the 0:07:30.880 --> 0:07:32.440 company you want to sell, you a theird to the company, 0:07:32.440 --> 0:07:34.440 and so the company, you know, intermediates the trade. 0:07:34.640 --> 0:07:37.160 So maybe we'll see more shenanigans, yeah. 0:07:37.000 --> 0:07:38.520 Because like if you have a tender offer like that, 0:07:38.680 --> 0:07:41.200 or like they're sort of you know, stereotypically, like employees 0:07:41.240 --> 0:07:43.600 are on the selling side and like venture capitalists on 0:07:43.640 --> 0:07:45.680 the buying side, or like you know, growth funds are 0:07:45.720 --> 0:07:49.440 on the buying side. Then you know you probably have 0:07:50.160 --> 0:07:54.120 obligations to disclose material information to both sides, and if 0:07:54.160 --> 0:07:56.640 you mess that up, as you know public companies do 0:07:56.680 --> 0:07:58.960 all the time, you could eventually get lawsuits. 0:07:59.040 --> 0:07:59.120 Right. 0:07:59.160 --> 0:08:01.560 I mean, it's a smaller it's not a ripe field 0:08:01.600 --> 0:08:04.520 for like securities class action lawyers yet, but like you'll 0:08:04.560 --> 0:08:05.720 eventually say, some lawsuits. 0:08:05.960 --> 0:08:09.119 You went to an article from Sarah McBride in your 0:08:09.280 --> 0:08:11.360 column on this and I thought it was interesting, like 0:08:11.400 --> 0:08:15.720 the changing attitudes at these companies towards the fact that 0:08:15.760 --> 0:08:20.480 there is a increasingly vibrant secondary market for their shares, 0:08:20.480 --> 0:08:23.080 like it used to be like a bit taboo, I 0:08:23.080 --> 0:08:25.000 feel like, and companies really didn't like it, but I 0:08:25.080 --> 0:08:28.040 just feel like it's inevitable now. 0:08:28.520 --> 0:08:31.480 I think attitudes remain kind of varied, and like you 0:08:31.560 --> 0:08:35.360 see in pisces in the UK, there's like one aspect 0:08:35.400 --> 0:08:37.520 of the plans the companies will have some control over, 0:08:37.960 --> 0:08:39.960 like when and how their their shares trade, which I 0:08:39.960 --> 0:08:43.240 think is a big draw of the private markets everywhere, 0:08:43.240 --> 0:08:45.360 which is just like you don't want activists to be 0:08:45.360 --> 0:08:46.960 able to buy up your stock without telling you, right, 0:08:47.000 --> 0:08:48.520 Like you want to have some control over who owns 0:08:48.520 --> 0:08:50.480 your stock and when they can buy it. But yeah, 0:08:50.480 --> 0:08:54.319 I mean, like in a world where you are private 0:08:54.400 --> 0:08:55.880 until you're kind of big enough to go public, and 0:08:55.920 --> 0:08:59.040 then you go public, you might really care about preventing 0:08:59.040 --> 0:09:00.800 your employees from selling ntil you're a public in a 0:09:00.800 --> 0:09:03.640 world where the default is kind of the same private forever, 0:09:03.720 --> 0:09:06.320 Like your employees need some liquidity, and yeah, you offer 0:09:06.360 --> 0:09:09.400 tender raffers, but like some companies are also like, you know, 0:09:09.440 --> 0:09:11.440 we'll live with the secondary market. 0:09:11.720 --> 0:09:14.440 You can't eat on your net worth alone. You need 0:09:14.440 --> 0:09:15.719 that liquidity, mat. 0:09:15.800 --> 0:09:17.920 You need that liquidity. I've also written this week of 0:09:17.960 --> 0:09:20.760 at margin lens and tests stock, which is another way 0:09:20.760 --> 0:09:23.120 to get that liquidity. That's a story we don't need 0:09:23.160 --> 0:09:23.760 to talk about that. 0:09:37.840 --> 0:09:40.040 Let's glide gracefully along, shall we. 0:09:40.440 --> 0:09:41.520 Let's glide along. 0:09:41.400 --> 0:09:47.199 Right into the grocery aisle. Kroger and Albertson's. Man, are 0:09:47.240 --> 0:09:52.480 they in a tiff? Yeah, it was a long engagement 0:09:53.080 --> 0:09:54.160 and a messy breakup. 0:09:54.440 --> 0:09:56.000 I have to say I have a soft spot for 0:09:56.000 --> 0:09:59.120 Albertson's because when I was very briefly an M and 0:09:59.160 --> 0:10:04.400 a layer, I did a deal for Albertson's. Like they 0:10:04.440 --> 0:10:09.199 sold themselves to two separate buyers. One was essentially Serberus. 0:10:09.400 --> 0:10:12.199 The thing called Alberton's today is like the Cerberus Anthony. 0:10:12.679 --> 0:10:14.040 And then they sold a lot of stories to a 0:10:14.080 --> 0:10:17.000 company called Supervalue. This like nice midwestern grocery store chain. 0:10:17.080 --> 0:10:20.600 And I was the junior lawyer for super Value. 0:10:21.360 --> 0:10:22.800 I thought you were going to say you grew up 0:10:22.840 --> 0:10:25.040 going to an Albertson's, which like didn't quite try. 0:10:25.240 --> 0:10:26.920 No, But in college I went to like Shaw and 0:10:27.000 --> 0:10:29.160 Star Market, which I learned for Albertson's brands, and I 0:10:29.160 --> 0:10:29.520 was pleased. 0:10:30.480 --> 0:10:33.520 I went to Kings. So I can't relate to this 0:10:33.640 --> 0:10:34.160 in any way. 0:10:34.320 --> 0:10:36.520 Not good at like knowing which grocery brands are un 0:10:36.559 --> 0:10:38.400 by which companies Like for all I know that's a 0:10:38.440 --> 0:10:39.800 Albertson's brand, I don't think it is. 0:10:39.920 --> 0:10:42.520 I don't think it is either. I love Kings anyway. 0:10:42.720 --> 0:10:47.480 So there's all this enthusiasm over the regulatory landscape, how 0:10:47.559 --> 0:10:49.400 we're going to get this big boom and m and A. 0:10:49.880 --> 0:10:52.040 There's some deals that are still dying on the vine. 0:10:52.240 --> 0:10:57.840 Kroger and Albertson's, their proposed merger is one of them. 0:10:57.960 --> 0:11:02.079 And Albertson's suing Kroger saying that they in fact didn't 0:11:02.120 --> 0:11:05.160 do everything that they could have to satisfy the FTC. Here. 0:11:05.400 --> 0:11:07.440 Yeah, so like you signed this deal, and like you know, 0:11:07.600 --> 0:11:10.120 the main problem is antitrust, right, because it's too big 0:11:10.120 --> 0:11:14.880 grocery store chains combining, and in particular it's chains with 0:11:15.080 --> 0:11:17.440 a lot of geographical overlaps. You have a lot of 0:11:17.720 --> 0:11:21.559 places where the Kroger's supermarket competes with the albertson supermarket 0:11:21.640 --> 0:11:24.520 and if they combine, and then there'll be less competition 0:11:24.640 --> 0:11:28.360 and the FTC for the next month doesn't like that. 0:11:28.640 --> 0:11:31.560 Who knows after that? Right, But they signed this deal, 0:11:31.600 --> 0:11:33.000 you know, in twenty twenty two, and so they were 0:11:33.000 --> 0:11:37.520 dealing with the current FDC, and they signed the deal 0:11:37.640 --> 0:11:41.360 hoping to combine, but they knew that there would be 0:11:41.640 --> 0:11:45.000 FDC impediments and the deal required them to sort of 0:11:45.160 --> 0:11:47.000 do everything in their power to get the deal done, 0:11:47.040 --> 0:11:50.319 and in particularly required like Kruger is the buyer. Albertson's 0:11:50.440 --> 0:11:53.400 is much more at risk in that situation because like 0:11:53.440 --> 0:11:55.600 if the deal falls apart, it's bad for Albertsons. This 0:11:55.640 --> 0:11:58.760 is less bad for the larger, more stable buyer. And 0:11:58.840 --> 0:12:01.319 so the deal agreed was like it's called a hell 0:12:01.360 --> 0:12:03.120 or high water clothes. They have to do anything, come 0:12:03.160 --> 0:12:05.600 hell or high water to get the deal closed, except 0:12:05.600 --> 0:12:07.000 they don't have to al more than six hundred and 0:12:07.040 --> 0:12:10.080 fifty stores. And you know, the thing that everyone knew 0:12:10.080 --> 0:12:11.800 they would have to do to get the deal closed 0:12:11.880 --> 0:12:14.160 was to be would be to divest some of their stores. 0:12:14.160 --> 0:12:16.439 And like all those places where at Albertson's and a 0:12:16.480 --> 0:12:19.840 Kroger's compete, you put one of those competing stores into 0:12:19.880 --> 0:12:21.920 a new company, or you sell it to a company 0:12:22.160 --> 0:12:24.840 so that it continues to compete with the combined Krager 0:12:24.840 --> 0:12:29.840 Albertson's and Albertson says that Krager like dragged its feet 0:12:29.960 --> 0:12:32.480 and then propose enough to divestures and then listened to 0:12:32.520 --> 0:12:35.840 the FTC when they asked for more divestres And so 0:12:35.920 --> 0:12:40.680 the FTC eventually sued and their divestiture proposals were so 0:12:40.840 --> 0:12:43.640 bad that the FDC one in court. And so now 0:12:43.640 --> 0:12:46.520 the deal is dead and Albertson's wants billions of dollars 0:12:46.559 --> 0:12:48.360 of damages from Kroger for not getting the deal. 0:12:48.400 --> 0:12:52.320 Then, yeah, I mean Albertson's had two specific gripes with 0:12:52.400 --> 0:12:55.679 the divestiters that they weren't divesting the good stores, and 0:12:55.720 --> 0:12:58.040 also that they didn't like the buyer that they picked 0:12:58.040 --> 0:12:59.239 CNS Whole Sealers. 0:12:59.400 --> 0:13:02.800 I believe it was, Yeah, because CNS is like a 0:13:02.840 --> 0:13:05.400 grocery hill store that doesn't own a lot of grocery stores. 0:13:05.400 --> 0:13:07.520 And yeah, there's some question in the mind of like 0:13:07.559 --> 0:13:09.840 the fac in the court about whether they could successfully 0:13:09.880 --> 0:13:14.640 compete with combined Kroger. Yeah, and apparently Kroger like had 0:13:14.679 --> 0:13:17.040 some sort of auction for these divestitures and like got 0:13:17.200 --> 0:13:20.320 sixty potential bidders, but they didn't, you know, consult Albertson's 0:13:20.360 --> 0:13:22.000 on the bidders and they just picked CNS. And so 0:13:22.080 --> 0:13:25.120 Albertson's is now mad that they could have possibly found 0:13:25.160 --> 0:13:27.559 a better buyer and they didn't, so the deal got killed. 0:13:27.800 --> 0:13:29.760 They have a lot to prove when it comes to 0:13:29.800 --> 0:13:30.480 this lawsuit. 0:13:30.760 --> 0:13:33.400 Yeah, it seems hard. It does seem hard because like 0:13:33.920 --> 0:13:35.360 as what you're trying to prove a kind of factually, 0:13:35.360 --> 0:13:37.560 you're trying to prove they could have proposed a different 0:13:38.120 --> 0:13:40.200 set of stores that I've asked, they could have found 0:13:40.200 --> 0:13:42.280 a better buyer and if they had done that, the 0:13:42.320 --> 0:13:44.199 FTC would have been happy with it. And it's like, well, 0:13:44.240 --> 0:13:46.480 you know, like the FDC is like it's like pretty 0:13:46.480 --> 0:13:49.200 skeptical of big mergers, right, and like it's possible that 0:13:49.240 --> 0:13:50.960 they couldn't have gotten a deal done, or they couldn't 0:13:50.960 --> 0:13:53.319 have gotten a deal done without divesting more than six 0:13:53.400 --> 0:13:56.079 hundred and fifty stores. So they'll definitely be able to 0:13:56.120 --> 0:13:57.640 find places where the're like, oh, they could have done 0:13:57.640 --> 0:13:59.520 a better job. But will they be able to prove 0:13:59.559 --> 0:14:02.280 that they would have gotten the deal and therefore deserve 0:14:02.400 --> 0:14:03.800 billions of dollars of damages? 0:14:04.080 --> 0:14:07.679 Yeah, I was reading the Bloomberg Intelligence take on this, 0:14:08.200 --> 0:14:09.920 so they basically agreed with you, saying that it's going 0:14:09.960 --> 0:14:11.800 to be difficult to prove all this, but they did 0:14:11.800 --> 0:14:14.880 say that they could prove that they're entitled to the 0:14:14.920 --> 0:14:17.480 six hundred million dollar breakup fee. So maybe they won't 0:14:17.520 --> 0:14:20.120 get billions of dollars in damages, but six hundred million 0:14:20.160 --> 0:14:25.080 dollars is it's not nothing, but it's not six billion dollars. 0:14:25.160 --> 0:14:27.760 You can definitely argue that, though I Thinkroger is going 0:14:27.800 --> 0:14:30.080 to say Albertson's preached its agreements and so it's not 0:14:30.240 --> 0:14:31.680 entitled to it. But like that breakup fee is like 0:14:31.800 --> 0:14:35.320 essentially there as like if you can't get through a 0:14:35.360 --> 0:14:37.640 frant i address, Like the seller gets a consolation price, 0:14:37.720 --> 0:14:39.680 so you would expect them to get the breakup fee. 0:14:39.760 --> 0:14:42.720 You touched on this a bit like the reason why 0:14:42.800 --> 0:14:47.120 this has antitrust concerns And Okay, maybe you eliminate some 0:14:47.160 --> 0:14:51.160 local competition and Kroger prices go higher as a result, 0:14:51.240 --> 0:14:55.320 But then you think about this like dystopian future where 0:14:56.120 --> 0:15:01.440 Walmart controls everything, like they're protect local competition, but that 0:15:01.480 --> 0:15:06.280 local competition could just be steamrolled by Walmart in the future. 0:15:06.520 --> 0:15:10.600 I think in general, if you're like a pretty activist 0:15:10.720 --> 0:15:13.920 FTC and like you want to prevent companies from getting 0:15:14.000 --> 0:15:16.800 like you you you're like give careful scartinator mergers. Everyone 0:15:16.800 --> 0:15:18.280 who's doing a merger is going to come and say, no, 0:15:18.280 --> 0:15:20.320 we're actually this is better for competition because we'll be 0:15:20.360 --> 0:15:23.000 able to take on ninety percent of time. The word 0:15:23.000 --> 0:15:24.720 that goes there is Amazon, right, Like we will take 0:15:24.760 --> 0:15:26.920 on Amalon, right, and so you have to let us 0:15:26.960 --> 0:15:28.760 merge because then we'll be big enough to take on Amazon. 0:15:29.240 --> 0:15:32.240 And the SEC I think is skeptical of that part 0:15:32.280 --> 0:15:34.560 because everyone says that part because like they don't get 0:15:34.560 --> 0:15:38.400 to stop Walmart or Amazon right, they get to stop mergers, right, Yeah, 0:15:38.480 --> 0:15:40.080 And so if someone comes to you with a merger, 0:15:40.120 --> 0:15:43.200 you're like, I want to you know, improve competition and 0:15:43.240 --> 0:15:45.840 like reduce the concentration of corporate powers. I'm gonna say 0:15:45.880 --> 0:15:47.640 no to this merger, and they're like, no, no, we're actually 0:15:47.640 --> 0:15:49.560 doing it competing. It's more Omart, like you can't do 0:15:49.600 --> 0:15:50.400 anything but Walmart. 0:15:50.640 --> 0:15:54.080 That's true. I do find myself more sympathetic to that 0:15:54.200 --> 0:15:58.360 narrative when you consider what happened with Jet Blue and Spirit. 0:15:58.760 --> 0:16:01.480 Oh yeah, for example, like the same story, right, Yeah, 0:16:01.480 --> 0:16:03.200 they wouldn't let them merge, just like there's like. 0:16:03.200 --> 0:16:05.600 Those low cost carriers and like they're like, we need 0:16:05.640 --> 0:16:07.800 to be bigger to compete with the legacy carriers and 0:16:07.840 --> 0:16:11.560 like continue to provide price competition. Yeah, And the SEC 0:16:11.680 --> 0:16:13.400 is like, now if you merged, there'll be less competition 0:16:13.440 --> 0:16:15.280 between the two of you, and the price will go higher. 0:16:15.320 --> 0:16:18.800 And then Spirit filed for bankruptcy a couple of years later. 0:16:19.320 --> 0:16:22.320 I don't know enough about like the economics of grocery 0:16:22.320 --> 0:16:22.840 stores to know. 0:16:23.000 --> 0:16:27.400 Like how true you were like a grocery store banker 0:16:27.440 --> 0:16:29.640 in your past life. I feel like every story is the. 0:16:29.640 --> 0:16:32.280 Grocery store layer, but like, I'm sympathetic to the idea. 0:16:32.440 --> 0:16:34.880 It is hard as a grocery stoperator these days to 0:16:34.880 --> 0:16:38.440 compete with Walmart, Costco, Target, which is like not part 0:16:38.520 --> 0:16:41.040 of the market from the FEC's point of view. But no, 0:16:41.160 --> 0:16:42.960 I mean, like the Spirit Jet Blue stuff is just 0:16:42.960 --> 0:16:45.840 like yeah, played out immediately. Yeah, probably letting the merger 0:16:45.920 --> 0:16:46.920 to be better for competition. 0:16:47.560 --> 0:16:51.640 I'm not saying that Albertson's is going to die necessarily. 0:16:52.040 --> 0:16:53.840 It is interesting to look at the stock price though, 0:16:53.920 --> 0:16:56.960 since the start of October twenty twenty two, when the 0:16:57.000 --> 0:16:59.480 steal is first announced, Kroger's is up forty eight percent 0:16:59.600 --> 0:17:03.040 since the Albertson's. I had to check this a few times, 0:17:03.080 --> 0:17:05.520 because they're up eight percent on a total return basis. 0:17:05.560 --> 0:17:08.720 Their share price alone is down like twenty something percent, 0:17:09.160 --> 0:17:11.000 but eight percent on a total return basis. 0:17:11.000 --> 0:17:15.359 So total return basis is like when they signed the deal, Yeah, 0:17:15.440 --> 0:17:17.760 they tland to padd a big dividend. Yeah, it's sort 0:17:17.800 --> 0:17:19.520 of like a down payment on the deal. 0:17:19.840 --> 0:17:23.440 Well, showing up. I love it when share price performance 0:17:23.480 --> 0:17:26.200 doesn't match total return in like a very dramatic way. 0:17:26.520 --> 0:17:28.240 Normally that's not because you're paying a twer cent divot 0:17:28.320 --> 0:17:30.199 in every quarter here. It's because they paid at a 0:17:30.200 --> 0:17:33.680 big dividend as part of the deal. Yeah, so that's 0:17:33.720 --> 0:17:34.760 not The stock. 0:17:34.560 --> 0:17:37.320 Price is not really ap I do wonder where Albertson 0:17:37.720 --> 0:17:40.760 goes from here. I don't expect you to have that answer, Matt, 0:17:41.040 --> 0:17:44.800 so so let's move on. 0:17:48.400 --> 0:17:52.200 It does our producer is telling us that Alberton's does 0:17:52.200 --> 0:17:53.240 in fact own Kings. 0:17:53.480 --> 0:17:57.000 Oh my god. Now I'm personally invested in this story. 0:17:57.200 --> 0:18:00.640 Sure, sure, now, yeah, I love Kings. 0:18:00.760 --> 0:18:02.879 I don't know is it local? Is it is it 0:18:02.960 --> 0:18:05.840 a regional? If it's on the internet, I'm inclined to 0:18:05.880 --> 0:18:06.400 believe it. 0:18:06.880 --> 0:18:09.600 Of Kirker's brand, I didn't recognize, like any of Creaker's Brown's. 0:18:09.760 --> 0:18:12.280 One of them is King Supers, but like s O 0:18:12.400 --> 0:18:13.240 O P E R. 0:18:13.640 --> 0:18:17.840 Oh, yeah, I didn't know that. Have you never been 0:18:17.880 --> 0:18:18.480 to a King's. 0:18:19.280 --> 0:18:20.480 I've been to a King Colin. 0:18:21.119 --> 0:18:25.520 That's not what I'm talking about. The King's near my parents' house. 0:18:25.720 --> 0:18:29.240 This is not interesting anyway. So they had a relaunch party. 0:18:32.119 --> 0:18:34.679 They renovated the store a couple of years back. I 0:18:34.680 --> 0:18:37.199