WEBVTT - 100 John Does

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Happy Birthday America, Matt, What are you doing for America

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<v Speaker 2>to fifty?

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<v Speaker 1>People have asked me that, and I'm confused.

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<v Speaker 2>What do you think?

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<v Speaker 1>You know? I'm like going to the pool. Yeah, I

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<v Speaker 1>might go to like the riverfront fireworks. I might not.

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<v Speaker 2>Yeah. I'm also I guess the heat dome is descending

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<v Speaker 2>the heat dome.

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<v Speaker 1>The lateness of the fireworks. I want to go to

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<v Speaker 1>the pool and stay on the air conditioning.

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<v Speaker 2>And I love that. The World Cup, Yeah, I think

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<v Speaker 2>I'm going to watch my first match of the World

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<v Speaker 2>Cup tonight, which is Wednesday versus Bosnia.

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<v Speaker 1>Yeah.

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<v Speaker 2>I didn't know that was happening, and then my dad

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<v Speaker 2>informed me of such. Since I'm on my way to

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<v Speaker 2>my parents' house after i do this podcast in anchor

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<v Speaker 2>two hours of television, just so.

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<v Speaker 1>You know, we're watching World Cup tonight. Yeah. I was

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<v Speaker 1>come here with big ideas.

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<v Speaker 2>It was like, it starts at eight pm, so you

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<v Speaker 2>should get here before that.

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<v Speaker 1>I sthized, I really enjoy watching the World Cup with.

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<v Speaker 2>My children, So I'm psyched. I mean that's great. I

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<v Speaker 2>just I like sports.

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<v Speaker 1>I can't believe that you like like sports and have

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<v Speaker 1>not watched any of the I don't know fifty.

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<v Speaker 2>Imagined casual consumer. I have like two niche sports that

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<v Speaker 2>I really care about, and then I'll watch anything you

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<v Speaker 2>put in front of me pretty much. I'm excited to

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<v Speaker 2>make this lobster cake. For some reason, the trend on

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<v Speaker 2>TikTok right now is to cut up strawberries and arrange

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<v Speaker 2>them on cake in the shape of a lobster. The

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<v Speaker 2>algorithm has decided that this is the only thing that

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<v Speaker 2>I need to see. So, like every other video is

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<v Speaker 2>women making lobster cake, so I'm going to try that.

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<v Speaker 1>It's interesting. I don't know you that well. I wouldn't

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<v Speaker 1>have thought of you as a person who, like your

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<v Speaker 1>number one interest is going to be cake decorating, But

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<v Speaker 1>I guess the algorithm knows you're better than I do.

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<v Speaker 2>I don't have a lot going on right now. A

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<v Speaker 2>lot of my normal activities I can't do, which is

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<v Speaker 2>like drinking alcohol and like running a lot, or like

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<v Speaker 2>horseback riding. You know, those are kind of that's the

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<v Speaker 2>kind of stuff I like to do, so I can't

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<v Speaker 2>really do that, so I'm gonna be instead.

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<v Speaker 1>It's like drunk horse back riding, like.

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<v Speaker 2>Don't drink and ride.

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<v Speaker 1>Hello, and welcome to the Money Stuff Podcast, your weekly

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<v Speaker 1>podcast where we talk about stuff related to money. I'm

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<v Speaker 1>Matt Levian and I write the Money Stuff column for

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<v Speaker 1>Bloomberg Opinion.

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<v Speaker 2>And I'm Katie Greifeld, a reporter for Bloomberg News and

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<v Speaker 2>an anchor for Bloomberg Television.

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<v Speaker 1>Jeff yass Quehanna Investment Group, the big options trading market

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<v Speaker 1>making quant firm. I've heard of him, yeah, back in

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<v Speaker 1>nineteen ninety two. He did an interview in Jack Schueger's

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<v Speaker 1>book New Market Wizards. Great great series of books, The

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<v Speaker 1>Market Wizards books. It's like just these great, like super

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<v Speaker 1>informative interviews with edgehund managers and traders. And in that

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<v Speaker 1>interview they talked about Susquehanna being an options market maker,

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<v Speaker 1>and they spent a long time talking about Susquehanna getting

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<v Speaker 1>picked off by insider traders. Susquehanna would get a call

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<v Speaker 1>being like would you make a price and hundreds of

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<v Speaker 1>call options in some company, and they're like, sure, here's

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<v Speaker 1>your price, because they're a market maker and that's what

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<v Speaker 1>they do, and they don't want to say no, and

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<v Speaker 1>they'd make a price and they'd sell a bunch of

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<v Speaker 1>options and then ten minutes later the company would be

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<v Speaker 1>taken over and they'd lose a bucket of money on

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<v Speaker 1>the options. And he discuss this, you know, he gives

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<v Speaker 1>an example and he's like, well, in case, we got

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<v Speaker 1>our money back because the SEC found the guy who

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<v Speaker 1>did it and he immediately gave back the money and

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<v Speaker 1>we got all our money back. And he talks about like,

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<v Speaker 1>you know, in the option of the market, the more

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<v Speaker 1>you can trust the SEC to crack down and insider

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<v Speaker 1>trading and stop insider traders, the better the pricing of

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<v Speaker 1>options will be, the tighter the spreads will be because

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<v Speaker 1>people like jeff Yass, people like sus Queahana won't get

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<v Speaker 1>picked off by insider traders and so they can quote

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<v Speaker 1>type prices because they're not going to lose a lot

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<v Speaker 1>of money getting insider traded against. So that was thirty

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<v Speaker 1>four years ago.

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<v Speaker 2>Yeah, he's still doing it.

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<v Speaker 1>So this week Susquehana sued one hundred anonymous people for

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<v Speaker 1>insider trading against them. I'm like Chinese brokerage options.

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<v Speaker 2>Yeah, it's so cool. The Susquehana is saying that this

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<v Speaker 2>would be one of the largest insider trading schemes in

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<v Speaker 2>recent memory. Sure if it were insider treading.

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<v Speaker 1>Yeah, outsider trading.

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<v Speaker 2>One hundred people is a lot to organize, right right right.

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<v Speaker 1>China announced everyone goes that a crackdown on cross border trading.

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<v Speaker 1>So all these are Chinese brokers firms that did cross

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<v Speaker 1>border trading. Their share prices plummeted on like May twenty second,

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<v Speaker 1>I think, yeah, and this, you know, more or less

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<v Speaker 1>game is a surprise in the market. Like the stocks

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<v Speaker 1>were and then they were low, and some people bought

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<v Speaker 1>short data out of the money, put options on these

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<v Speaker 1>Chinese brokerages, and a lot of them bought them from Susquehanna.

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<v Speaker 1>And Susquehanna's like all those people one had inside information

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<v Speaker 1>and two were part of a coordinated scheme to pick

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<v Speaker 1>us off by insided trading. And so Susquehanna is like,

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<v Speaker 1>please give us the money back. And they went to

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<v Speaker 1>court and they sued these people, but they don't knowho

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<v Speaker 1>these people are. They just put like John Doe one

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<v Speaker 1>through one hundred, and they sued these people, but like

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<v Speaker 1>the real like sort of immediate object of their lawsuit

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<v Speaker 1>is to get the court to order their brokerages to

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<v Speaker 1>freeze their accounts and give up information about them to Susquehanna.

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<v Speaker 1>And so then after that, you know, Susquehanna can like

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<v Speaker 1>go look and see who these people are, and if

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<v Speaker 1>they're like employees of like Chinese regulators or brokerage firms,

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<v Speaker 1>they can be like, aha, you had inside information. Yeah,

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<v Speaker 1>but like also not somebody who's frozen like you know,

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<v Speaker 1>but Suskohada keeps pursuing this lawsuit that people don't necessarily

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<v Speaker 1>show up up because one, probably most of them are

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<v Speaker 1>in China, and two, maybe some of them are insider trading,

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<v Speaker 1>maybe all of them inside. Maybe it was a coordinated conspiracy,

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<v Speaker 1>and if they don't show up then maybe so Kohana

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<v Speaker 1>just gets to give the money. So that seems to

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<v Speaker 1>be the trade.

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<v Speaker 2>Yeah, so in ensuing one hundred, John does is give

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<v Speaker 2>is the idea that okay, maybe half of them were

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<v Speaker 2>actually insider trading.

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<v Speaker 1>Sus Quehanna's complaint suggests that there's evidence that it was

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<v Speaker 1>all part of the same scheme, but like not really

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<v Speaker 1>yeah exactly, Well, they were all on like a few brokerages,

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<v Speaker 1>and they all bought short dated out of the money puts,

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<v Speaker 1>and so yeah, it's all probably inside of trading, but

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<v Speaker 1>like realistically, you know, sus Quehana is an option options

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<v Speaker 1>market maker. They know what they're doing. It's a probabilistic better. Yeah,

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<v Speaker 1>probably half these people were insider trading. Well the half

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<v Speaker 1>can show up and ask for their money back.

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<v Speaker 2>And we'll give it to them by lumping them all together.

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<v Speaker 2>They did get to cite an impressive number seventy dollars.

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<v Speaker 1>The rod Roger rata. Like insider trading cases even smaller

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<v Speaker 1>than this, It's like, well that was one guy who

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<v Speaker 1>actually did the trades. This is like one hundred people

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<v Speaker 1>who are unified only by having bought some put options.

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<v Speaker 2>Yeah. Yeah, I do think it's interesting that. Okay, Interactive Brokers,

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<v Speaker 2>that's where a lot of the accounts were where the

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<v Speaker 2>trades were made, but also Futu Holdings and Tiger Brokers,

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<v Speaker 2>so these were firms that were targeted in the crackdown,

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<v Speaker 2>and these are also platforms where these trades were made.

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<v Speaker 1>Yeah. As well, if you asked me who is likely

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<v Speaker 1>to buy put options on Chinese brokerages, I'd be like

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<v Speaker 1>Chinese retail investors who are customers of those brokerages. Right,

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<v Speaker 1>they've bought out of money bets. It's a good trad

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<v Speaker 1>Like one thing I read about it is that I

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<v Speaker 1>know this is rude, and you're not supposed to say this,

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<v Speaker 1>but like, in a world in which Susquehanna is actually

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<v Speaker 1>making markets in sports bets, they have to kind of

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<v Speaker 1>think of Susquehanna as like not literally a bookie, but

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<v Speaker 1>you know, analogous to running a casino or a sports

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<v Speaker 1>book or whatever. And options market making with retail kind

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<v Speaker 1>of like running a casino, right, Like, you're sort of

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<v Speaker 1>offering people bets and you expect that some of them

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<v Speaker 1>will and some of them will lose, and on balance

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<v Speaker 1>they will mostly lose, particularly after the spread, and so

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<v Speaker 1>you'll make a lot of money. And that's been a

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<v Speaker 1>great business in the last few years because there's been

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<v Speaker 1>a real rush of degenerate gamblers to the options market

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<v Speaker 1>and it seems to be nice first sous Quahanta and

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<v Speaker 1>other big options market makers. And the risk of that

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<v Speaker 1>business is that you'll encounter sharp betters, people who win

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<v Speaker 1>more than they lose. And if you actually run a

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<v Speaker 1>sports book or a casino, like a lot of your

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<v Speaker 1>business is about getting rid of sharp betters, right it's

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<v Speaker 1>tracking who's a good better and if they win a lot,

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<v Speaker 1>then you limit their size or you don't let them bet,

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<v Speaker 1>and you can't do that traditionally in the stock market

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<v Speaker 1>or the options market rely. One thing you can do

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<v Speaker 1>is like one kind of sharp betting, which is maybe

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<v Speaker 1>the main kind of sharp betting and short dated options

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<v Speaker 1>is like insider trading, right, And if you can get

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<v Speaker 1>rid of those people, then like most of the customers lose,

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<v Speaker 1>the customers are win. You're like, no, not paying you.

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<v Speaker 1>You cheated, and like they don't have to prove that

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<v Speaker 1>they cheated. I mean maybe eventually they have to prove

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<v Speaker 1>that they cheated it, but they haven't proved it yet

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<v Speaker 1>and they've managed to keep the money so far.

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<v Speaker 2>I hadn't been you know, reading the tea leaves enough

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<v Speaker 2>going into May twenty second. I mean, you could make

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<v Speaker 2>the case that this was an insider trading that if

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<v Speaker 2>you you know, of course, looked at the body language

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<v Speaker 2>of Chinese regulators, you knew this crackdown was coming.

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<v Speaker 1>Two things. One is like, yes, you might have just

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<v Speaker 1>made an educated bat based only on public information that

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<v Speaker 1>this crackdown is coming. The other thing is, let's say

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<v Speaker 1>there was some insider trading. Right, Let's say that you're

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<v Speaker 1>just like a person, just a regular retail trader, I

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<v Speaker 1>have no insider information, and you're like looking at a

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<v Speaker 1>screen and you see that a lot of people have

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<v Speaker 1>been buying put options on Chinese brokers, just saying you're like, hmm,

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<v Speaker 1>I wonder if that means a crackdown is coming and

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<v Speaker 1>you buy put options. As far as Susquehanna has complained,

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<v Speaker 1>it's concerned you're a part of the conspiracy. Now are

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<v Speaker 1>you justing to tell like, in a sense if you're

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<v Speaker 1>trading based on like public condisha of the conspiracy, maybe

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<v Speaker 1>you are, but like you're not, really, you're not insider trading.

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<v Speaker 2>You're just like, you know, you're following the crowd, following

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<v Speaker 2>the croud.

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<v Speaker 1>Yeah, so it seems unlikely to me that all one hundred.

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<v Speaker 1>By the way, one hundred is a fake number. It's

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<v Speaker 1>just like to say John does one three hundred. But

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<v Speaker 1>like it seems to buzzling me that all one hundred

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<v Speaker 1>of these people are all part of an insider trading conspiracy.

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<v Speaker 2>But wouldn't it be exciting if they were?

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<v Speaker 1>It would be really cool. Yeah, But like if half

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<v Speaker 1>of them are and the other half were innocent. It's like,

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<v Speaker 1>how do you, like, you know, show up and court

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<v Speaker 1>in a foreign country and be like, oh, like, I

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<v Speaker 1>don't know. It's a strange.

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<v Speaker 2>Something that was delightful about this story was a quote

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<v Speaker 2>from Thomas Petterphy of Interactive Brokers at the bottom of

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<v Speaker 2>this article. He was recently on Odd Lots I missed

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<v Speaker 2>the nugget where he was like, actually, there shouldn't be

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<v Speaker 2>any rules at all against insider trading, which is just

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<v Speaker 2>live and let live. It would get information to market faster.

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<v Speaker 1>So this is like a classic thing. I mean people

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<v Speaker 1>in times for decades and like if you just made

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<v Speaker 1>that the rule tomorrow, Susquehanna would adapt. Yeah, it'd be fine.

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<v Speaker 1>Like they charge wider spreads, right, and they'd like do

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<v Speaker 1>more to try to prevent getting picked up. But like,

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<v Speaker 1>you know, there's a price. But you know, as Jeffy

0:11:06.240 --> 0:11:09.080
<v Speaker 1>said thirty four years ago, the cost of insider trading

0:11:09.080 --> 0:11:10.840
<v Speaker 1>is paid by the retail investors, right, because like in

0:11:10.880 --> 0:11:15.560
<v Speaker 1>a world where insider trading was legal, then Susquehanna would

0:11:15.600 --> 0:11:18.280
<v Speaker 1>still sell you short data out of the money call options,

0:11:18.559 --> 0:11:21.760
<v Speaker 1>but they would charge a much wider bid ask spread.

0:11:21.800 --> 0:11:24.400
<v Speaker 1>So like every other retail investor would lose more money

0:11:24.520 --> 0:11:28.600
<v Speaker 1>trading options to subsidize the profits of the insider traders, which,

0:11:28.640 --> 0:11:30.000
<v Speaker 1>by the way, it's fine because it's just gambling.

0:11:30.000 --> 0:11:51.600
<v Speaker 2>But whatever, All right, do you want to talk about ETFs?

0:11:51.640 --> 0:11:52.920
<v Speaker 1>Now, yeah, let's do it.

0:11:53.040 --> 0:11:54.760
<v Speaker 2>Okay, good, and you don't want to say it's so

0:11:54.800 --> 0:11:56.000
<v Speaker 2>good that you don't want to save it for the

0:11:56.120 --> 0:11:58.280
<v Speaker 2>end of the podcast, because usually the ETF stuff we

0:11:58.360 --> 0:12:01.000
<v Speaker 2>sort of, oh, no, this is great stuff, this is

0:12:01.200 --> 0:12:02.480
<v Speaker 2>pretty good stuff.

0:12:02.559 --> 0:12:06.439
<v Speaker 1>Okay, so no, it's not. ETF stuff is boring, but fine.

0:12:06.520 --> 0:12:10.800
<v Speaker 1>Sports gambling ETFs are my white whale. I've been writing

0:12:10.800 --> 0:12:13.880
<v Speaker 1>since March twenty twenty five. I think it's March eighteenth.

0:12:13.960 --> 0:12:16.840
<v Speaker 1>Maybe that within two years there will be sports gambling

0:12:16.840 --> 0:12:19.959
<v Speaker 1>ETFs in the US. I've written about there's this guy

0:12:20.000 --> 0:12:24.240
<v Speaker 1>named Mike Wall who in the early twenty tens ran

0:12:24.720 --> 0:12:27.600
<v Speaker 1>a sports gambling fund because he like wrote a paper

0:12:27.600 --> 0:12:29.520
<v Speaker 1>when he was like a student at Warton about like

0:12:29.520 --> 0:12:34.200
<v Speaker 1>if you bat moneyline bets on huge favorites in college football,

0:12:34.240 --> 0:12:36.000
<v Speaker 1>like teams that are favored to win by thirty points,

0:12:36.160 --> 0:12:37.959
<v Speaker 1>if you just bet on them to win, they win,

0:12:38.120 --> 0:12:40.160
<v Speaker 1>like you know, ninety four percent of the time, and

0:12:40.200 --> 0:12:42.720
<v Speaker 1>you get some money from these winning bets. Like it's

0:12:42.720 --> 0:12:44.120
<v Speaker 1>not you know, you know, double your money, but you

0:12:44.120 --> 0:12:46.800
<v Speaker 1>get some money. And if you do that on like

0:12:46.880 --> 0:12:50.840
<v Speaker 1>every huge favorite, you pretty reliably make like a you know,

0:12:51.480 --> 0:12:55.320
<v Speaker 1>low double digit ish sort of return. And so it's

0:12:55.400 --> 0:12:58.600
<v Speaker 1>like a bond fund that is uncorrelated to the rest

0:12:58.600 --> 0:13:03.480
<v Speaker 1>of the market because you're turns come from football favorites winning, right,

0:13:03.520 --> 0:13:05.720
<v Speaker 1>And so he ran a fund for a while doing

0:13:05.760 --> 0:13:07.440
<v Speaker 1>this and like you did, okay, but like you can't.

0:13:08.280 --> 0:13:10.000
<v Speaker 1>This was in the dark age. It's when like you

0:13:10.080 --> 0:13:12.320
<v Speaker 1>had to go to a bookie at like in like

0:13:12.400 --> 0:13:12.959
<v Speaker 1>Las Vegas.

0:13:13.040 --> 0:13:14.160
<v Speaker 2>Can you imagine your.

0:13:13.960 --> 0:13:19.080
<v Speaker 1>Sports bets but now make sports bets on a regulated

0:13:19.840 --> 0:13:24.320
<v Speaker 1>US commodities future exchange and so like, of course people

0:13:24.760 --> 0:13:28.160
<v Speaker 1>want to launch sports gambling ETFs. Like one thing you

0:13:28.160 --> 0:13:30.040
<v Speaker 1>can do is that can actively manage the sports scambling

0:13:30.040 --> 0:13:31.800
<v Speaker 1>ETF where like you hire a really good gambler and

0:13:31.840 --> 0:13:34.080
<v Speaker 1>he makes really good bets, right, But one thing you

0:13:34.080 --> 0:13:36.400
<v Speaker 1>do is just bet the huge favorites and like achieve

0:13:36.480 --> 0:13:39.360
<v Speaker 1>a bond like return with like no correlation to the

0:13:39.400 --> 0:13:41.240
<v Speaker 1>market and be like haha, what a great product I

0:13:41.280 --> 0:13:45.079
<v Speaker 1>have and sell that to like institutions and retail people

0:13:45.120 --> 0:13:47.600
<v Speaker 1>definitely want to do it, and I definitely want them

0:13:47.640 --> 0:13:49.720
<v Speaker 1>to do it because one I've like put a marker

0:13:49.760 --> 0:13:52.080
<v Speaker 1>down that I've predicted it until it's just funny, it's

0:13:52.160 --> 0:13:52.840
<v Speaker 1>just good comedy.

0:13:52.880 --> 0:13:54.080
<v Speaker 2>Well, you've got one big hurdle.

0:13:55.200 --> 0:13:56.600
<v Speaker 1>We have one medium sized hurdle.

0:13:56.800 --> 0:13:59.960
<v Speaker 2>It's the SEC. I mean it's it's a size hurdle.

0:14:00.200 --> 0:14:04.480
<v Speaker 1>Yeah, the SEC did say, whoa, they're slow down. We

0:14:04.520 --> 0:14:11.640
<v Speaker 1>have like, however many I say sports. They have applications

0:14:11.640 --> 0:14:12.560
<v Speaker 1>for prediction marketing.

0:14:12.679 --> 0:14:14.560
<v Speaker 2>Yes, thank you. I don't think I mean, I don't

0:14:14.559 --> 0:14:15.800
<v Speaker 2>think it's all sports gambling.

0:14:16.200 --> 0:14:20.560
<v Speaker 1>I'm not sure any of it sports ye, sportsling. But right, well,

0:14:20.600 --> 0:14:23.120
<v Speaker 1>the Republicans think the House ETF who cares? Who cares?

0:14:23.600 --> 0:14:28.880
<v Speaker 1>Some people not you interesting, but yes, they have applications

0:14:28.880 --> 0:14:32.080
<v Speaker 1>for prediction markets and they have been like whoa, they're

0:14:32.400 --> 0:14:34.840
<v Speaker 1>slow down. And so this week they put out a

0:14:34.880 --> 0:14:39.440
<v Speaker 1>request for comments on just sort of like weird ETFs.

0:14:38.920 --> 0:14:40.680
<v Speaker 2>Generally, Yeah, there's a lot of them.

0:14:40.880 --> 0:14:44.600
<v Speaker 1>Yeah, it's like they have this process for approving well

0:14:44.800 --> 0:14:46.120
<v Speaker 1>ETFs and they don't like it.

0:14:46.360 --> 0:14:49.040
<v Speaker 2>That's the thing. It's not necessarily a process for approving

0:14:49.080 --> 0:14:53.160
<v Speaker 2>the way that the SEC handles ETF applications is that

0:14:54.000 --> 0:14:58.600
<v Speaker 2>rather than formally approve or reject, basically you're just you

0:14:58.680 --> 0:15:03.040
<v Speaker 2>go effective and if the SEC doesn't want you to

0:15:03.160 --> 0:15:06.000
<v Speaker 2>go effective and like bring this to market, they'll probably

0:15:06.040 --> 0:15:11.479
<v Speaker 2>backchannel that to you and you'll politely withdraw your application.

0:15:11.720 --> 0:15:15.640
<v Speaker 2>But it doesn't outright reject ETFs, but.

0:15:15.640 --> 0:15:19.000
<v Speaker 1>It can suspenetrating, Yeah, which is rejecting.

0:15:19.200 --> 0:15:22.640
<v Speaker 2>But the ETF was created. They can't get an application

0:15:22.640 --> 0:15:25.280
<v Speaker 2>and be like this is a hank of junk. You

0:15:25.280 --> 0:15:26.000
<v Speaker 2>can't launch this.

0:15:26.640 --> 0:15:29.200
<v Speaker 1>Yeah, right, So they want to like fine tune their

0:15:29.240 --> 0:15:31.600
<v Speaker 1>process for they want to be able to approve. They

0:15:31.600 --> 0:15:32.360
<v Speaker 1>want to be able.

0:15:32.200 --> 0:15:36.280
<v Speaker 2>To well that's the process that's not for some to be.

0:15:36.400 --> 0:15:38.800
<v Speaker 2>I mean, there's this is a great story coming from

0:15:38.840 --> 0:15:43.160
<v Speaker 2>Bluebird News. Basically, they're thinking about how they oversee the

0:15:43.200 --> 0:15:46.880
<v Speaker 2>ETF industry in general. One of the things they're asking

0:15:46.960 --> 0:15:50.200
<v Speaker 2>is whether there should be additional circumstances under which they

0:15:50.240 --> 0:15:54.400
<v Speaker 2>could suspend the effectiveness of an ETF so launching. The

0:15:54.440 --> 0:15:56.640
<v Speaker 2>way that ETF filings work right now is that once

0:15:56.680 --> 0:15:59.720
<v Speaker 2>you file something, once you file an application, everyone can see.

0:15:59.760 --> 0:16:03.200
<v Speaker 2>It's open to the public. It's not dramatic. But when

0:16:03.240 --> 0:16:07.360
<v Speaker 2>you have all these new categories being dreamed up, when

0:16:07.440 --> 0:16:13.120
<v Speaker 2>one person files for a new ETF prediction markets ETF,

0:16:13.120 --> 0:16:17.440
<v Speaker 2>you see this like dog piling among issuers with copycat filings.

0:16:18.000 --> 0:16:20.880
<v Speaker 2>And now they're asking, maybe this should be a confidential.

0:16:20.280 --> 0:16:25.040
<v Speaker 1>Process, right, because like when someone other than me, yeah,

0:16:25.120 --> 0:16:28.360
<v Speaker 1>dreams up the mousetrap of like what's bet on sports favorites?

0:16:28.960 --> 0:16:30.560
<v Speaker 1>You want that to yourself. You don't want everyone to

0:16:30.560 --> 0:16:31.480
<v Speaker 1>copy before you long?

0:16:31.640 --> 0:16:34.560
<v Speaker 2>Yeah, I mean it's like some of these it's like

0:16:34.600 --> 0:16:37.000
<v Speaker 2>this copy and paste mentality of you know, we just

0:16:37.160 --> 0:16:40.320
<v Speaker 2>we need to get our filing into so that we

0:16:40.400 --> 0:16:46.120
<v Speaker 2>can maybe capture a first mover advantage exactly. Yeah, wouldn't

0:16:46.120 --> 0:16:48.240
<v Speaker 2>it be sweet if you had the second or the

0:16:48.320 --> 0:16:50.040
<v Speaker 2>first instead of the seventh.

0:16:51.000 --> 0:16:52.920
<v Speaker 1>Wow, this is like not my problem, right, I get

0:16:52.960 --> 0:16:55.280
<v Speaker 1>to just a box like there should be a sports

0:16:55.280 --> 0:16:57.920
<v Speaker 1>gambling ETF to someone else to be the first mover

0:16:58.000 --> 0:16:58.960
<v Speaker 1>in the sports gambling ETF.

0:16:59.040 --> 0:17:01.480
<v Speaker 2>Well you say that, and then there's a blood bath

0:17:01.600 --> 0:17:03.400
<v Speaker 2>to get your filing to the SEC.

0:17:03.640 --> 0:17:05.000
<v Speaker 1>I don't care about that. That's their problem.

0:17:05.480 --> 0:17:07.720
<v Speaker 2>Well, that's what the SEC is a little bit concerned

0:17:07.720 --> 0:17:08.160
<v Speaker 2>about here.

0:17:08.240 --> 0:17:10.600
<v Speaker 1>You know, the proposal is not just about the process.

0:17:10.640 --> 0:17:13.800
<v Speaker 1>That's also like wonder you. Thing is like these things

0:17:13.840 --> 0:17:17.600
<v Speaker 1>are investment companies under the regulation of investment companies, and

0:17:17.640 --> 0:17:20.200
<v Speaker 1>like I think investment companies traditionally, the core of them

0:17:20.240 --> 0:17:22.600
<v Speaker 1>is they invest in securities and none of the stuff

0:17:22.600 --> 0:17:25.879
<v Speaker 1>of securities. I mean, like leverage singles like scuries, but

0:17:25.960 --> 0:17:32.520
<v Speaker 1>like bitcoin, gold, sports bets, other prediction market bets all

0:17:32.600 --> 0:17:34.880
<v Speaker 1>not securities. And so the sec is like, are these

0:17:34.920 --> 0:17:38.760
<v Speaker 1>even ETFs? Yeah, I know that doesn't trouble me that much.

0:17:38.800 --> 0:17:42.120
<v Speaker 2>I feel like I'm glad, I'm glad they're thinking about it.

0:17:42.160 --> 0:17:44.679
<v Speaker 1>Sure, I have to say, like is this at all legal?

0:17:45.119 --> 0:17:48.520
<v Speaker 2>It's like a worthy topic for a regulator to engage

0:17:48.520 --> 0:17:50.080
<v Speaker 2>with philosophically, but.

0:17:50.040 --> 0:17:54.639
<v Speaker 1>Like guess what, Yeah, great, sure, sure, I don't know.

0:17:54.640 --> 0:17:57.639
<v Speaker 1>I mean, like the fact that they did pause the

0:17:57.680 --> 0:18:02.040
<v Speaker 1>prediction mar thank you, there's some chance that they, in

0:18:02.119 --> 0:18:05.320
<v Speaker 1>their secret sec heart of hearts, are like, actually, this

0:18:05.560 --> 0:18:07.600
<v Speaker 1>sports gambling stuff has gone too far, But like, I

0:18:07.640 --> 0:18:09.720
<v Speaker 1>don't know, man, there's no other indication of that. Like

0:18:09.720 --> 0:18:11.760
<v Speaker 1>everything else is like full speed out on sports gambling.

0:18:12.080 --> 0:18:15.640
<v Speaker 2>Yeah, So, I mean, I don't know the fund design

0:18:16.280 --> 0:18:19.280
<v Speaker 2>of these ETFs seems a little bit tricky.

0:18:19.480 --> 0:18:25.800
<v Speaker 1>Of course, that's what's fun. Their problem that the fund

0:18:25.880 --> 0:18:30.520
<v Speaker 1>design is tricky, Like, that's the forsures probably the business.

0:18:30.800 --> 0:18:33.159
<v Speaker 2>Aren't they in the business of protecting those investors?

0:18:33.760 --> 0:18:37.240
<v Speaker 1>They should be like all these double you know, triple

0:18:37.320 --> 0:18:40.399
<v Speaker 1>Leopard singles, nikes, like are they Yeah, this is not

0:18:40.440 --> 0:18:44.280
<v Speaker 1>investing advice. I would rather invest in anything at all,

0:18:44.320 --> 0:18:48.760
<v Speaker 1>the favorites college football ETF, than like a double levered

0:18:48.760 --> 0:18:50.199
<v Speaker 1>micro strategy ETF.

0:18:50.600 --> 0:18:53.240
<v Speaker 2>Brave, that's brave, right.

0:18:53.080 --> 0:18:55.600
<v Speaker 1>It's just an arbitrary dividing line between like what's a

0:18:55.720 --> 0:18:58.440
<v Speaker 1>quasi legal investment company and wants sports?

0:18:59.200 --> 0:18:59.760
<v Speaker 2>Yeah?

0:19:00.080 --> 0:19:02.560
<v Speaker 1>Did you imagine ten years ago that financial markets would

0:19:02.560 --> 0:19:04.919
<v Speaker 1>be like sports gambling ets?

0:19:04.960 --> 0:19:07.560
<v Speaker 2>I didn't have. The thought was not close to my mind.

0:19:07.600 --> 0:19:10.840
<v Speaker 2>I have to say, I am excited to leave here

0:19:10.960 --> 0:19:14.680
<v Speaker 2>for six months and see what happens. I know, right,

0:19:14.720 --> 0:19:17.080
<v Speaker 2>it's going to like I feel like the world's going

0:19:17.160 --> 0:19:17.960
<v Speaker 2>to change.

0:19:17.960 --> 0:19:19.080
<v Speaker 1>A steaming waistlet.

0:19:19.760 --> 0:19:23.439
<v Speaker 2>I'm not going to recognize the kind.

0:19:23.280 --> 0:19:26.760
<v Speaker 1>Of a beard done to my knees like that.

0:19:26.800 --> 0:19:27.960
<v Speaker 2>What the heck happened to you?

0:19:29.000 --> 0:19:29.800
<v Speaker 1>Sports gambling?

0:19:48.040 --> 0:19:49.400
<v Speaker 2>You mentioned micro strategy?

0:19:49.560 --> 0:19:52.399
<v Speaker 1>Oh yeah, make a strategy. How are they doing not.

0:19:52.320 --> 0:19:56.600
<v Speaker 2>Great fives aren't great, man. The main problem is I've

0:19:56.640 --> 0:20:01.560
<v Speaker 2>identified it is that big point Bitcoin continues to fall

0:20:01.600 --> 0:20:03.480
<v Speaker 2>and they have a problem. They have a lot of

0:20:03.520 --> 0:20:06.040
<v Speaker 2>it though, okay, but like it's a big problem.

0:20:06.160 --> 0:20:08.919
<v Speaker 1>Okay, But like simply owning a lot of bitcoin that

0:20:08.920 --> 0:20:11.159
<v Speaker 1>has gone down is not a problem. The way that

0:20:11.200 --> 0:20:13.719
<v Speaker 1>it becomes a problem for a company or for anyone

0:20:14.240 --> 0:20:18.640
<v Speaker 1>is when you have leverage. And it becomes a particular

0:20:18.640 --> 0:20:21.200
<v Speaker 1>problem if you have borrowed money for two reasons. One

0:20:21.280 --> 0:20:23.960
<v Speaker 1>is that you have to pay interest on the money

0:20:23.960 --> 0:20:26.560
<v Speaker 1>you borre for sure, to make a strategy, borrowed so

0:20:26.640 --> 0:20:29.560
<v Speaker 1>much money to buy bitcoin, and now it has to

0:20:29.600 --> 0:20:32.679
<v Speaker 1>pay so much interest on that money. And it like

0:20:32.840 --> 0:20:35.160
<v Speaker 1>it has a software bus that generates some.

0:20:35.160 --> 0:20:37.080
<v Speaker 2>Money, which I love to think about it.

0:20:37.160 --> 0:20:40.800
<v Speaker 1>Yeah, sure they don't. But like it doesn't naturally generate

0:20:40.880 --> 0:20:43.159
<v Speaker 1>tons and tons and tons of cash flow too, for instance,

0:20:43.240 --> 0:20:45.320
<v Speaker 1>pay interest on it's billions and billions of dollars of

0:20:45.320 --> 0:20:49.200
<v Speaker 1>perferret stock. So that's one problem mm hmm. The other

0:20:49.240 --> 0:20:52.400
<v Speaker 1>problem is that it did a lot of this borrowing.

0:20:52.920 --> 0:20:54.840
<v Speaker 1>They say borring. It's all preferred stock, but it's like

0:20:54.920 --> 0:20:57.040
<v Speaker 1>it's essentially borring. They call it a credit instrument. They

0:20:57.080 --> 0:20:59.440
<v Speaker 1>think of it as borrowing. That a lot of this

0:20:59.520 --> 0:21:03.160
<v Speaker 1>borrowing for this thing called a stretch, which is absolutely magical.

0:21:03.600 --> 0:21:06.520
<v Speaker 1>It is like it has been widely reported that Michael Saylor,

0:21:06.800 --> 0:21:10.000
<v Speaker 1>he's not the CEO, he's the eminence behind micro Strategy,

0:21:10.080 --> 0:21:12.480
<v Speaker 1>like that, he's the chairman, He's the he's the guy.

0:21:13.600 --> 0:21:14.600
<v Speaker 2>Was is he the founder?

0:21:15.280 --> 0:21:18.840
<v Speaker 1>Sure, let's say he's the guy. Has been widely reported

0:21:18.840 --> 0:21:21.680
<v Speaker 1>that he asked Chad Gpt to design the security for him,

0:21:21.680 --> 0:21:25.200
<v Speaker 1>and Chad Gpt did a bang up job. It prefers

0:21:25.240 --> 0:21:28.480
<v Speaker 1>thought that it's dividend rate resets every month and they

0:21:28.520 --> 0:21:31.960
<v Speaker 1>reset it at their own discretion. But they said when

0:21:31.960 --> 0:21:36.320
<v Speaker 1>they issued it eleven and a half months ago, issued

0:21:36.359 --> 0:21:38.680
<v Speaker 1>this in July of twenty twenty five. They said when

0:21:38.680 --> 0:21:41.800
<v Speaker 1>they issued it that our current intention, which is subject

0:21:41.840 --> 0:21:44.240
<v Speaker 1>to change in our sole and absolute discression, is to

0:21:44.280 --> 0:21:46.359
<v Speaker 1>adjust the regular dividend rate in such a manner as

0:21:46.359 --> 0:21:49.480
<v Speaker 1>we believe will maintain stretched stocks trading price add or

0:21:49.520 --> 0:21:51.520
<v Speaker 1>close to its stated amount of one hundred dollars pressure.

0:21:51.680 --> 0:21:55.280
<v Speaker 1>So basically, the dividend floats every month to make a

0:21:55.359 --> 0:21:59.240
<v Speaker 1>trade at par, which makes it basically a monthly data

0:21:59.240 --> 0:22:02.120
<v Speaker 1>instrument that roll over every month, like automatically rolls over,

0:22:02.200 --> 0:22:04.360
<v Speaker 1>but like if your borrowing costs go up, you pay

0:22:04.400 --> 0:22:07.040
<v Speaker 1>more on the stretch, right, And that is like a

0:22:07.080 --> 0:22:10.360
<v Speaker 1>bank deposit. They like use bank deposits to buy bitcoin,

0:22:10.400 --> 0:22:14.520
<v Speaker 1>which is crazy on so many levels. A career Bloomberg

0:22:14.520 --> 0:22:16.479
<v Speaker 1>reported in May that they were the majority of corporate

0:22:16.520 --> 0:22:19.920
<v Speaker 1>and ETF bitcoin buying for the year. They were buying

0:22:19.960 --> 0:22:22.280
<v Speaker 1>like all the bitcoin, and they're doing it funny with stretch,

0:22:22.480 --> 0:22:28.600
<v Speaker 1>like issuing like short dated par liabilities to buy all

0:22:28.640 --> 0:22:31.159
<v Speaker 1>the bitcoin you could sell them. Crazy thing to do,

0:22:31.680 --> 0:22:36.679
<v Speaker 1>and then everything went bad. And now their market clearing

0:22:37.400 --> 0:22:40.840
<v Speaker 1>interest rate on stretches fifteen percent on billions and billions

0:22:40.840 --> 0:22:43.639
<v Speaker 1>of dollars, which means that like hundreds of millions of

0:22:43.680 --> 0:22:47.000
<v Speaker 1>cash cost yeah, that they have to pay from somewhere.

0:22:47.600 --> 0:22:49.879
<v Speaker 1>So this week they announced the series of measures to

0:22:50.040 --> 0:22:53.840
<v Speaker 1>fix that, one of which was never mind where you're

0:22:53.840 --> 0:22:56.560
<v Speaker 1>not going to keep stretch at par. They raise the dividend.

0:22:56.640 --> 0:22:58.080
<v Speaker 1>It was at eleven point five percent. There is it

0:22:58.119 --> 0:23:01.439
<v Speaker 1>to twelve percent, which is lot market clear and doesn't

0:23:01.800 --> 0:23:03.919
<v Speaker 1>to trade a part's trading the eighties. Now they're no

0:23:04.000 --> 0:23:06.240
<v Speaker 1>longer trying to keep it at par. They had said

0:23:06.240 --> 0:23:08.720
<v Speaker 1>when they issued it less than a year ago, our

0:23:08.720 --> 0:23:10.760
<v Speaker 1>intention is to keep it at par with no guarantees.

0:23:10.800 --> 0:23:13.360
<v Speaker 1>And now they've already been like yeah, sorry, never munch.

0:23:14.400 --> 0:23:16.399
<v Speaker 1>They've also like announced that they're going to sell some

0:23:16.440 --> 0:23:19.760
<v Speaker 1>bitcoins they did to raise some cash to these dividends. Yeah,

0:23:19.840 --> 0:23:24.280
<v Speaker 1>they're going to increase their cash reserves. They're trading it

0:23:24.359 --> 0:23:28.080
<v Speaker 1>like around m I think on Friday they were below MNF,

0:23:28.160 --> 0:23:30.200
<v Speaker 1>so like they were the value of the company is

0:23:30.280 --> 0:23:31.320
<v Speaker 1>less than the value of the bitcoin.

0:23:31.440 --> 0:23:33.480
<v Speaker 2>They did break the book at one point, broke the buck.

0:23:33.560 --> 0:23:36.040
<v Speaker 2>It's just like it's a sad story.

0:23:36.800 --> 0:23:39.359
<v Speaker 1>It's sad. You know, We've talked about it, and I've

0:23:39.359 --> 0:23:41.800
<v Speaker 1>written about like a bunch of dats, like Digital Aid

0:23:41.800 --> 0:23:45.280
<v Speaker 1>Treasure companies have also broken the buck. Yes, I have

0:23:45.359 --> 0:23:49.119
<v Speaker 1>various problems and various solutions, including you know, selling crypto

0:23:49.160 --> 0:23:51.199
<v Speaker 1>to buy back your stock or like activists have been

0:23:51.200 --> 0:23:53.200
<v Speaker 1>trying to get them to do that. But that's all

0:23:53.600 --> 0:23:57.240
<v Speaker 1>the minor leagues, like Strategy, the original dat the biggest

0:23:57.280 --> 0:24:00.680
<v Speaker 1>that the one that was like we'll never all bitcoin

0:24:01.600 --> 0:24:05.480
<v Speaker 1>traded above that asset value for much longer than the

0:24:05.480 --> 0:24:09.400
<v Speaker 1>other ones and really really like, look like they might

0:24:09.680 --> 0:24:11.560
<v Speaker 1>be able to weather the storm, but now it is

0:24:11.640 --> 0:24:13.200
<v Speaker 1>not great. Not great.

0:24:13.600 --> 0:24:17.000
<v Speaker 2>I mean the natural question is, how does this story end?

0:24:17.600 --> 0:24:20.000
<v Speaker 2>If bitcoin rips from here, let's say it goes back

0:24:20.000 --> 0:24:22.520
<v Speaker 2>to all time highs, does that solve a bunch of

0:24:22.560 --> 0:24:23.840
<v Speaker 2>these problems.

0:24:24.000 --> 0:24:26.959
<v Speaker 1>One, yeah, not necessarily all of them. Right. One thing

0:24:26.960 --> 0:24:28.840
<v Speaker 1>that happened as bitcoin went down. Another thing that happened

0:24:28.920 --> 0:24:32.840
<v Speaker 1>is like the whole dat story of like where's he

0:24:32.880 --> 0:24:35.800
<v Speaker 1>going to have any Like they called it a creative dilution.

0:24:35.880 --> 0:24:38.000
<v Speaker 1>Will always like issue stock to buy more bitcoin, which

0:24:38.000 --> 0:24:40.000
<v Speaker 1>will be a creative because we're issuing stock at a premium.

0:24:40.080 --> 0:24:41.680
<v Speaker 1>Like that story doesn't work anymore because you're no longer

0:24:41.720 --> 0:24:45.000
<v Speaker 1>issuing stock at a premium. So even if bitcoin rips,

0:24:45.080 --> 0:24:48.120
<v Speaker 1>people might be like, well, why bitcoin instead of buying strategy?

0:24:48.119 --> 0:24:51.320
<v Speaker 1>But like, for the most part, bitcoin ripping doesn't hurt.

0:24:51.440 --> 0:24:57.080
<v Speaker 1>Probably helps, but that's not necessarily exogenous. Like strategy is

0:24:57.080 --> 0:25:00.520
<v Speaker 1>buying the called the bitcoin, right yeah, wh and bitcoin

0:25:00.600 --> 0:25:03.800
<v Speaker 1>is down, it's strategy. It's not buying all the bitcoin anymore. Yeah,

0:25:04.040 --> 0:25:07.040
<v Speaker 1>you have like conspiracy theories about how big a influence

0:25:07.200 --> 0:25:09.080
<v Speaker 1>strategies buying is, but none.

0:25:09.160 --> 0:25:12.639
<v Speaker 2>Yeah, I mean, especially from a sentiment perspective as well.

0:25:13.160 --> 0:25:15.520
<v Speaker 1>Yeah, Michael Steeler's that ever being like, yeah, I bitcoin

0:25:15.600 --> 0:25:16.120
<v Speaker 1>like it's bad.

0:25:16.240 --> 0:25:18.760
<v Speaker 2>I haven't checked his X in a while. I don't

0:25:18.800 --> 0:25:21.280
<v Speaker 2>know if he's still posting those AI generated photos of

0:25:21.359 --> 0:25:25.960
<v Speaker 2>like him as a bear, like a big b across

0:25:25.960 --> 0:25:26.360
<v Speaker 2>his chest.

0:25:26.560 --> 0:25:27.600
<v Speaker 1>There's so much like.

0:25:27.960 --> 0:25:31.840
<v Speaker 2>Or no, he's slapping a bear, yeah with a bitcoin.

0:25:33.400 --> 0:25:33.560
<v Speaker 1>Well.

0:25:33.600 --> 0:25:36.560
<v Speaker 2>Another sad part of the story is that, I mean,

0:25:36.600 --> 0:25:40.879
<v Speaker 2>they bought all the way up, like just every and

0:25:40.920 --> 0:25:42.560
<v Speaker 2>now they're selling all the way down.

0:25:43.440 --> 0:25:46.640
<v Speaker 1>That's life bad. It's not a life as a leverage investment.

0:25:46.800 --> 0:25:48.320
<v Speaker 2>Oh you're supposed to do, man.

0:25:48.359 --> 0:25:49.760
<v Speaker 1>I thought what you're supposed to do?

0:25:50.280 --> 0:25:50.520
<v Speaker 2>Yeah.

0:25:50.960 --> 0:25:53.720
<v Speaker 1>The reason markets have cycles, and it's because everyone does that.

0:25:54.119 --> 0:25:57.840
<v Speaker 2>So how does this potentially end? Assuming that bitcoin doesn't rip,

0:25:58.280 --> 0:26:00.920
<v Speaker 2>we don't break one hundred thousand dollars in short order.

0:26:01.200 --> 0:26:02.440
<v Speaker 1>So as you used to say, and I used to

0:26:02.440 --> 0:26:04.320
<v Speaker 1>agree with them, that they had really good leverage because

0:26:04.560 --> 0:26:08.280
<v Speaker 1>it's all long dated, most of its perpetual. You know,

0:26:08.359 --> 0:26:11.240
<v Speaker 1>now most of their leverage is perpetual preferred, which means

0:26:11.560 --> 0:26:13.080
<v Speaker 1>they never have to pay it back and they never

0:26:13.119 --> 0:26:14.480
<v Speaker 1>have to pay interest. They can just be like we're

0:26:14.480 --> 0:26:16.879
<v Speaker 1>skipping the dividend this month on stretch and they just

0:26:16.960 --> 0:26:20.320
<v Speaker 1>do that. There's no contractual obligation to ever pay out

0:26:20.320 --> 0:26:22.800
<v Speaker 1>any cash. So like one thing they could do is

0:26:22.880 --> 0:26:24.840
<v Speaker 1>hybern it and just be like, we're gonna keep this

0:26:24.840 --> 0:26:27.000
<v Speaker 1>bitcoin until it rips up again, and then when it does,

0:26:27.040 --> 0:26:28.960
<v Speaker 1>we'll turn the dividends back on and sell more stock

0:26:29.000 --> 0:26:31.720
<v Speaker 1>and it's going to be great. That's not a preferred

0:26:31.720 --> 0:26:32.639
<v Speaker 1>outcome for anyone.

0:26:32.960 --> 0:26:35.640
<v Speaker 2>No, I can't imagine, because like in.

0:26:35.680 --> 0:26:37.680
<v Speaker 1>Theory, if you do that, you can really never sell

0:26:37.720 --> 0:26:41.840
<v Speaker 1>preferred stock again. In theory, memories are short, and maybe

0:26:41.840 --> 0:26:44.560
<v Speaker 1>if like some new part of the story comes in,

0:26:44.600 --> 0:26:46.560
<v Speaker 1>maybe there's something there, But like, that's not what they're doing, right,

0:26:46.560 --> 0:26:48.560
<v Speaker 1>I Mean, what they're doing is they're buying back stretch

0:26:48.680 --> 0:26:50.919
<v Speaker 1>to try to you know, the answer to how does

0:26:50.920 --> 0:26:53.040
<v Speaker 1>this end is it's like it's it's just the inverse

0:26:53.040 --> 0:26:54.400
<v Speaker 1>of what they did on the way up. Right, It's

0:26:54.400 --> 0:26:59.440
<v Speaker 1>like selling bitcoin, buying stock, paying down preferred just reversing

0:26:59.440 --> 0:27:02.240
<v Speaker 1>all the trades that they did. And you know, there's

0:27:02.960 --> 0:27:05.919
<v Speaker 1>a huge frictional cost in reversing all those trades, right,

0:27:05.920 --> 0:27:07.200
<v Speaker 1>because you buy on the way up and you sell

0:27:07.200 --> 0:27:09.639
<v Speaker 1>on the way down, there's a lot of money for

0:27:09.680 --> 0:27:11.840
<v Speaker 1>sharel there's and then the question is how long does

0:27:11.880 --> 0:27:14.520
<v Speaker 1>that continue until you know something better happens.

0:27:14.600 --> 0:27:17.280
<v Speaker 2>I'm looking up right now how many employees Strategy actually has.

0:27:17.520 --> 0:27:20.639
<v Speaker 2>It's over a thousand. We've talked about this before. I

0:27:20.680 --> 0:27:22.359
<v Speaker 2>want to know what they do. I want to know

0:27:22.400 --> 0:27:25.959
<v Speaker 2>what they all do. If you be yeah, but if

0:27:26.000 --> 0:27:29.520
<v Speaker 2>you're if you're the average employee at Strategy, and I

0:27:29.560 --> 0:27:31.560
<v Speaker 2>don't know what that looks like, how do you feel

0:27:32.119 --> 0:27:35.199
<v Speaker 2>right now? Entertained, scared? I don't know.

0:27:35.400 --> 0:27:38.280
<v Speaker 1>I don't know, but like this has been going on

0:27:38.320 --> 0:27:40.679
<v Speaker 1>for a while in some form, right, Yeah, you have

0:27:40.760 --> 0:27:42.399
<v Speaker 1>to have made your piece with like this is a

0:27:42.400 --> 0:27:45.600
<v Speaker 1>weird bitcoin company now and like you have to like

0:27:45.640 --> 0:27:47.080
<v Speaker 1>wear orange to work and stuff.

0:27:47.200 --> 0:27:49.720
<v Speaker 2>It's like that is that for real? I don't think,

0:27:51.240 --> 0:27:54.000
<v Speaker 2>but like a little bit, I feel like you could

0:27:54.000 --> 0:27:56.560
<v Speaker 2>make that piece and enjoy it while the times were

0:27:56.600 --> 0:27:57.840
<v Speaker 2>good and the line was going on.

0:27:58.320 --> 0:28:02.360
<v Speaker 1>Yeah, all right, maybe you don't know now you're like, ah,

0:28:02.480 --> 0:28:06.160
<v Speaker 1>like no one told me that the line could go down? Yeah,

0:28:07.440 --> 0:28:09.359
<v Speaker 1>you just do you feel like it's amusing on the

0:28:09.400 --> 0:28:11.840
<v Speaker 1>way up, it's amusing on the way down. Yeah, probably

0:28:11.920 --> 0:28:13.760
<v Speaker 1>less so if you own a lot of stock options.

0:28:13.960 --> 0:28:16.359
<v Speaker 2>Yeah, well it'd be fun to see how this all

0:28:16.400 --> 0:28:20.320
<v Speaker 2>happens again six months from now. Who knows what strategy

0:28:20.359 --> 0:28:20.879
<v Speaker 2>will look like.

0:28:21.680 --> 0:28:25.440
<v Speaker 1>Yeah, Like for a while, they're really like shooting out

0:28:25.480 --> 0:28:26.800
<v Speaker 1>weird capital markets instruments.

0:28:26.800 --> 0:28:29.399
<v Speaker 2>I wonder if they're and you were living for it, I.

0:28:29.440 --> 0:28:31.679
<v Speaker 1>Know, And like now, as I said, like the thing

0:28:31.720 --> 0:28:33.280
<v Speaker 1>that's going to happen, as they're going to reverse that

0:28:33.320 --> 0:28:35.200
<v Speaker 1>and buy back all these crazy instruments. But like maybe

0:28:35.240 --> 0:28:37.400
<v Speaker 1>they'll find something else. Yeah, this is like I used

0:28:37.440 --> 0:28:40.680
<v Speaker 1>to be a corporate acority derivative structure, so like this

0:28:40.760 --> 0:28:43.000
<v Speaker 1>is near and dear to my heart. You know, there

0:28:43.000 --> 0:28:45.640
<v Speaker 1>are people at banks are getting calls from like the

0:28:45.680 --> 0:28:48.920
<v Speaker 1>people who cover MICROE Saler being like, could we find

0:28:49.200 --> 0:28:51.320
<v Speaker 1>some kind of new preferred stock for them to issue

0:28:51.480 --> 0:28:54.000
<v Speaker 1>now when they're treading below MNEV and their stock of

0:28:54.080 --> 0:28:56.400
<v Speaker 1>going down? Like is there something that could we could

0:28:56.400 --> 0:28:56.920
<v Speaker 1>work with here?

0:28:57.080 --> 0:28:58.760
<v Speaker 2>Like just wrestle something together.

0:28:59.240 --> 0:29:02.280
<v Speaker 1>So I hope that the corporate decretat to it as

0:29:02.320 --> 0:29:06.520
<v Speaker 1>bankers are burning the midnight oil to think up weird

0:29:06.560 --> 0:29:08.800
<v Speaker 1>transfer Michael Salator do, and I hope they find one.

0:29:08.960 --> 0:29:10.800
<v Speaker 2>I hope they're having fun and think of one.

0:29:11.080 --> 0:29:13.080
<v Speaker 1>Yeah, does not a lot makes sense here, but like

0:29:13.120 --> 0:29:14.480
<v Speaker 1>you know, maybe I'll think of something.

0:29:14.280 --> 0:29:17.240
<v Speaker 2>Maybe some of a noodle on over the long weekends.

0:29:17.600 --> 0:29:22.760
<v Speaker 1>Yeah, America's real, real way to celebrate America's birthdays time. Yeah,

0:29:23.160 --> 0:29:34.720
<v Speaker 1>find the new preferred stock for my consolidation. And that

0:29:34.840 --> 0:29:36.040
<v Speaker 1>was the Money Stuff Podcast.

0:29:36.320 --> 0:29:38.440
<v Speaker 2>I'm Matt Levine and I'm Katie Greifeld.

0:29:38.640 --> 0:29:40.560
<v Speaker 1>You can find my work. I subscribe me to the

0:29:40.600 --> 0:29:42.800
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0:29:42.640 --> 0:29:45.400
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0:29:45.440 --> 0:29:48.600
<v Speaker 2>day on the Clothes between three and five pm Eastern.

0:29:49.320 --> 0:29:51.320
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0:30:03.040 --> 0:30:07.400
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0:30:07.800 --> 0:30:09.760
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0:30:12.600 --> 0:30:16.000
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0:30:16.040 --> 0:30:18.440
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