1 00:00:02,680 --> 00:00:07,200 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,440 --> 00:00:11,760 Speaker 2: Did you know I interviewed Adam Back on Tuesday? 3 00:00:11,840 --> 00:00:12,360 Speaker 3: On Tuesday? 4 00:00:12,480 --> 00:00:14,160 Speaker 2: Yeah, do you know when the New York Times article 5 00:00:14,200 --> 00:00:15,480 Speaker 2: came out Wednesday? 6 00:00:15,680 --> 00:00:18,520 Speaker 3: Yeah, So that's fascinating. John Carrier at the New York 7 00:00:18,520 --> 00:00:21,400 Speaker 3: Times identified Adam Back as Satosha knocking out over, the 8 00:00:21,440 --> 00:00:23,919 Speaker 3: founder of bitcoin. And there's a lot of skepticism of 9 00:00:24,000 --> 00:00:26,600 Speaker 3: this arification. A lot of the evidence for it is 10 00:00:26,640 --> 00:00:28,360 Speaker 3: like sort of circumstantial stuff and a lot of like 11 00:00:28,440 --> 00:00:31,240 Speaker 3: linguistic analysis, and like Adam Back is like a. 12 00:00:31,160 --> 00:00:34,240 Speaker 2: Cryptographers also British, British. 13 00:00:34,040 --> 00:00:37,120 Speaker 3: And there's all these things that like are basically shared 14 00:00:37,159 --> 00:00:39,239 Speaker 3: by any of the you know, one hundred people who 15 00:00:39,320 --> 00:00:42,480 Speaker 3: might have invented bitcoin. So there's a lot of skepticism 16 00:00:42,479 --> 00:00:45,280 Speaker 3: of the identification. But what I really like in the story, Yeah, 17 00:00:45,320 --> 00:00:46,839 Speaker 3: and this is why I wish you would interviewed him 18 00:00:46,840 --> 00:00:48,720 Speaker 3: a day later. What I really liked in the story 19 00:00:49,000 --> 00:00:52,000 Speaker 3: is that John Carrier doesn't hang his hat on these analyzes. 20 00:00:52,280 --> 00:00:53,760 Speaker 3: I met with the guy and asked if he was 21 00:00:53,840 --> 00:00:57,560 Speaker 3: Satoshi and he said no, but he looked shifty when 22 00:00:57,560 --> 00:01:00,840 Speaker 3: he was doing it. Yeah, and I love I read 23 00:01:00,880 --> 00:01:02,640 Speaker 3: out this all the time, like this notion that like 24 00:01:03,320 --> 00:01:06,000 Speaker 3: investors get information from like the tone and body language 25 00:01:06,000 --> 00:01:09,600 Speaker 3: of executives. I love the idea that everyone sort of 26 00:01:09,640 --> 00:01:13,560 Speaker 3: goes around thinking that they can spot a liar, where 27 00:01:13,600 --> 00:01:15,520 Speaker 3: like they can just look into someone's eyes and know 28 00:01:15,560 --> 00:01:18,600 Speaker 3: if they're telling the truth. But the supposed to John Carrier, 29 00:01:18,640 --> 00:01:22,640 Speaker 3: that's true, right, Like he's an accomplished investigative reporter. But 30 00:01:22,760 --> 00:01:24,640 Speaker 3: I wish that you had looked at him back in 31 00:01:24,680 --> 00:01:27,280 Speaker 3: the eyes and said so. 32 00:01:27,200 --> 00:01:28,920 Speaker 2: And then my follow up question could have been like, 33 00:01:29,240 --> 00:01:30,240 Speaker 2: why are you so nervous? 34 00:01:30,640 --> 00:01:34,080 Speaker 3: You know you look turning red? Why is this adam 35 00:01:34,319 --> 00:01:38,319 Speaker 3: so anyway? I love that as a category of evidence. 36 00:01:38,640 --> 00:01:40,840 Speaker 3: I don't know that I'm convinced, but I like it. 37 00:01:41,040 --> 00:01:45,200 Speaker 2: Yeah, I like it too. I will say I wish 38 00:01:45,319 --> 00:01:47,160 Speaker 2: I wish that New York Times article had come out 39 00:01:47,200 --> 00:01:49,920 Speaker 2: a day earlier. You were talking about quantum computing and 40 00:01:49,960 --> 00:01:52,120 Speaker 2: I was filling in on our crypto show. I wasn't 41 00:01:52,120 --> 00:01:54,480 Speaker 2: supposed to do it. It was just, you know, an 42 00:01:54,520 --> 00:01:58,440 Speaker 2: anchor called out and I hopped in and it wasn't 43 00:01:58,440 --> 00:01:59,280 Speaker 2: my best work. 44 00:02:01,160 --> 00:02:04,960 Speaker 3: No, I tell you, if you had sat Nakamoto on 45 00:02:05,040 --> 00:02:06,680 Speaker 3: your show and you didn't. 46 00:02:06,440 --> 00:02:11,600 Speaker 2: Add yeah, I said, I was just talking to the 47 00:02:11,639 --> 00:02:17,160 Speaker 2: CEO of Blockstream, you know, about quantum computing, also potentially 48 00:02:17,200 --> 00:02:20,000 Speaker 2: the founder of bitcoin itself. I really think it is 49 00:02:20,240 --> 00:02:25,760 Speaker 2: the most interesting modern mystery, you know. Yes, what else 50 00:02:25,800 --> 00:02:30,960 Speaker 2: you got like truly modern, like still happening mystery. 51 00:02:31,080 --> 00:02:33,440 Speaker 3: I don't know. My first instinct is that we are 52 00:02:33,520 --> 00:02:36,560 Speaker 3: sort of training my children to be skeptical of the moonlanding. 53 00:02:36,320 --> 00:02:38,679 Speaker 2: Just for fun, just for fun. 54 00:02:39,120 --> 00:02:39,399 Speaker 3: You know. 55 00:02:39,720 --> 00:02:42,160 Speaker 2: I've been telling my nephew that I'm a witch for 56 00:02:42,520 --> 00:02:44,080 Speaker 2: consistently for the past couple of years. 57 00:02:44,120 --> 00:02:47,560 Speaker 3: So yeah, I feel like that's a good aunt joke. 58 00:02:49,639 --> 00:02:52,240 Speaker 2: He doesn't know if I'm joking at scared apparently I 59 00:02:52,280 --> 00:02:54,440 Speaker 2: love the story. He was riding in the back of 60 00:02:54,560 --> 00:02:58,280 Speaker 2: my brother and my sister in law's car and they 61 00:02:58,320 --> 00:03:02,560 Speaker 2: hadn't been talking about me, but he very seriously asked, 62 00:03:02,880 --> 00:03:06,839 Speaker 2: does Aunt Katie write a broom like it's on his mind? Yeah, 63 00:03:06,880 --> 00:03:08,720 Speaker 2: he's just thinking, Yeah. 64 00:03:08,600 --> 00:03:11,360 Speaker 3: It'spare moments. Yeah, that's what it means that you're a witch. 65 00:03:12,600 --> 00:03:16,160 Speaker 3: Hello and welcome to The Money Stuff Podcast. You're a 66 00:03:16,160 --> 00:03:19,280 Speaker 3: weekly podcast where we talk about stuff related to money. 67 00:03:20,200 --> 00:03:22,360 Speaker 3: I'm Matt Levine and I write The Money Stuff column 68 00:03:22,400 --> 00:03:23,360 Speaker 3: for Bloomberg Opinion. 69 00:03:24,240 --> 00:03:26,760 Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and 70 00:03:26,800 --> 00:03:28,400 Speaker 2: an anchor for Bloomberg Television. 71 00:03:28,720 --> 00:03:30,959 Speaker 3: I feelin like we have some money stuff the podcast 72 00:03:31,040 --> 00:03:39,760 Speaker 3: Greatest That's Today. Bill Ackman keeps doing stuff. 73 00:03:39,480 --> 00:03:41,880 Speaker 2: Got so much stuff. He has a lot going on, 74 00:03:42,040 --> 00:03:42,800 Speaker 2: a lot going on. 75 00:03:43,080 --> 00:03:45,440 Speaker 3: It's impressive. But yeah, the news this week is that 76 00:03:45,480 --> 00:03:50,160 Speaker 3: he's doing something with the Universal Music Group, or proposing 77 00:03:50,200 --> 00:03:51,839 Speaker 3: to do something with Universal Music Group. 78 00:03:51,880 --> 00:03:54,000 Speaker 2: He wants to buy it, No he doesn't, but he 79 00:03:54,040 --> 00:03:56,840 Speaker 2: wants to do all this stuff that isn't necessarily just 80 00:03:56,880 --> 00:03:57,320 Speaker 2: buying it. 81 00:03:57,720 --> 00:04:00,280 Speaker 3: Yeah, I love it because like you love it. The 82 00:04:00,320 --> 00:04:03,680 Speaker 3: headline is that he is proposed to acquire all of 83 00:04:03,800 --> 00:04:07,839 Speaker 3: Universal Music Group for fifty five billion euros. But that's 84 00:04:07,880 --> 00:04:11,760 Speaker 3: not true. Like what's happening is so universal? Is it? 85 00:04:11,760 --> 00:04:16,479 Speaker 3: It's like listen in your ainext ins and Acman and 86 00:04:16,520 --> 00:04:18,039 Speaker 3: a lot of people would like it to be listed 87 00:04:18,200 --> 00:04:20,440 Speaker 3: in New York and it's proposed to listen to New 88 00:04:20,520 --> 00:04:23,240 Speaker 3: York and like delay it and so partly as a 89 00:04:23,240 --> 00:04:27,440 Speaker 3: matter of speeding that along, Akman has proposed basically a 90 00:04:27,480 --> 00:04:30,480 Speaker 3: series of activist things. He wants the company to like 91 00:04:30,960 --> 00:04:33,480 Speaker 3: borrow some money to buy back stock, you know, classic 92 00:04:33,560 --> 00:04:36,960 Speaker 3: activist move. He stock buyback funted by borrowing. They own 93 00:04:36,960 --> 00:04:38,680 Speaker 3: a stake in Spotify. He wants them to sell that 94 00:04:38,760 --> 00:04:40,680 Speaker 3: off and use the cash to buy back more stock. 95 00:04:41,000 --> 00:04:43,240 Speaker 3: He wants to buy some stock, and like they use 96 00:04:43,279 --> 00:04:46,800 Speaker 3: those proceeds to buy back other people's stock and all 97 00:04:46,800 --> 00:04:49,120 Speaker 3: of that activist stuff, he says, and his letter to 98 00:04:49,160 --> 00:04:51,400 Speaker 3: the board will cause the stock to go up from 99 00:04:51,520 --> 00:04:54,240 Speaker 3: you know, something like seventeen years now up thirty years. Right, 100 00:04:54,520 --> 00:04:56,800 Speaker 3: So we created a lot of value for shareholders, and 101 00:04:56,839 --> 00:05:00,560 Speaker 3: that's good theoretically. Yeah, yeah, strictly, this is great, right, 102 00:05:00,960 --> 00:05:03,400 Speaker 3: It's like the law of nature. It's just like that's 103 00:05:03,480 --> 00:05:06,040 Speaker 3: that's his analysis of what would happen if they changed 104 00:05:06,040 --> 00:05:08,719 Speaker 3: their capital return strategy and you know, listed in New 105 00:05:08,800 --> 00:05:11,240 Speaker 3: York and did some other stuff for sure, and the 106 00:05:11,279 --> 00:05:13,440 Speaker 3: way that he would buy stock and the way that 107 00:05:13,680 --> 00:05:16,680 Speaker 3: they would do this borrowing to buy more stock is 108 00:05:16,720 --> 00:05:19,520 Speaker 3: a transaction that's technically a merger. It's a merger with 109 00:05:20,160 --> 00:05:25,000 Speaker 3: like one of his vehicles. Kid, he's like falling directly 110 00:05:25,040 --> 00:05:25,680 Speaker 3: asleep here. 111 00:05:25,800 --> 00:05:27,919 Speaker 2: The problem is, I've read this so many times and 112 00:05:27,960 --> 00:05:29,920 Speaker 2: my eyes glaze over every single time. 113 00:05:29,960 --> 00:05:32,760 Speaker 3: But so I believe it has this thing called a spark. Yes, 114 00:05:32,920 --> 00:05:34,680 Speaker 3: like a speck, only doesn't have money. It's going to 115 00:05:34,760 --> 00:05:36,520 Speaker 3: raise money later, Yeah, don't worry about So he's going 116 00:05:36,560 --> 00:05:37,920 Speaker 3: to go ahead and raise a billion dollars in the 117 00:05:38,000 --> 00:05:40,520 Speaker 3: spark or he won't because like it's backstop by his 118 00:05:40,640 --> 00:05:43,080 Speaker 3: hedge fund that has the money, and he's going to 119 00:05:43,200 --> 00:05:46,840 Speaker 3: use the spark to merge with Universal. And like the 120 00:05:46,880 --> 00:05:49,960 Speaker 3: combined company will list on the New York'stock Exchange, So 121 00:05:50,000 --> 00:05:52,480 Speaker 3: like most of the stock in the combined company will 122 00:05:52,480 --> 00:05:55,960 Speaker 3: be owned by existing Universal shareholders, you know, Pershing squirrel on, 123 00:05:56,080 --> 00:05:59,839 Speaker 3: you know, ten eleven percent of it. That's the transaction. 124 00:06:00,120 --> 00:06:03,720 Speaker 3: But because it involves a merger, he can say things 125 00:06:03,760 --> 00:06:07,160 Speaker 3: like I'm proposing to buy all of Universal, and because 126 00:06:07,960 --> 00:06:10,919 Speaker 3: it involves a merger, he can say I'm proposing to 127 00:06:10,920 --> 00:06:13,040 Speaker 3: buy it for a value of thirty yuros per share, 128 00:06:13,040 --> 00:06:15,320 Speaker 3: even though that's not he's not buying it for thirty 129 00:06:15,400 --> 00:06:17,480 Speaker 3: years per share. Yeah, buying a little bit of that 130 00:06:17,600 --> 00:06:20,440 Speaker 3: twenty two years a share. But because the activist thing, 131 00:06:20,560 --> 00:06:22,400 Speaker 3: like the math on, it pencils out to being worth 132 00:06:22,440 --> 00:06:25,839 Speaker 3: thirty years a share, says him, he can say I'm 133 00:06:25,839 --> 00:06:27,240 Speaker 3: going to buy the whole company at a seventy eight 134 00:06:27,279 --> 00:06:30,000 Speaker 3: percent premium and get people to write that Andy, Yeah, Yeah, 135 00:06:30,000 --> 00:06:32,560 Speaker 3: it's proprilling to buy the company. It's seventy eight percent premium. 136 00:06:32,640 --> 00:06:36,279 Speaker 2: Yeah, And a lot of places did write yeah, or a. 137 00:06:36,320 --> 00:06:38,280 Speaker 3: Version of it, that's the headline. It's a good way 138 00:06:38,320 --> 00:06:40,320 Speaker 3: to get attention for your activism because you send a 139 00:06:40,400 --> 00:06:41,920 Speaker 3: letter being like, I want to buy a little bit 140 00:06:41,920 --> 00:06:44,159 Speaker 3: of stock and I want you to make some changes 141 00:06:44,160 --> 00:06:46,320 Speaker 3: in your capital return strategy. So yeah, everyone says that 142 00:06:46,360 --> 00:06:48,280 Speaker 3: all the time, right, yeah, and then you go, oh, 143 00:06:48,279 --> 00:06:50,320 Speaker 3: it'll be worth a lot of more money and sure whatever. 144 00:06:50,440 --> 00:06:52,480 Speaker 3: But if you say I'm gonna buy it, and then 145 00:06:52,800 --> 00:06:53,440 Speaker 3: it sounds real. 146 00:06:53,800 --> 00:06:57,040 Speaker 2: So I mean the stock surged on this, eighty rs popped. 147 00:06:57,400 --> 00:07:00,640 Speaker 2: There are some very high hurdles to this happening, sure, 148 00:07:00,800 --> 00:07:02,920 Speaker 2: I mean he has to convince two thirds of investors 149 00:07:02,960 --> 00:07:04,920 Speaker 2: to agree. And also there's a certain. 150 00:07:04,680 --> 00:07:08,159 Speaker 3: Thought suggests people like it. You can wave away everything 151 00:07:08,160 --> 00:07:09,680 Speaker 3: else and be like, well, listing in New York it 152 00:07:09,720 --> 00:07:09,960 Speaker 3: is going. 153 00:07:09,960 --> 00:07:12,840 Speaker 2: To be good for the that's the interesting part. I 154 00:07:12,880 --> 00:07:14,400 Speaker 2: mean that makes sense to me. We've seen a lot 155 00:07:14,400 --> 00:07:18,880 Speaker 2: of European companies come to New York or IPO on 156 00:07:19,040 --> 00:07:23,880 Speaker 2: US exchanges. But I didn't realize that Universal Music Group 157 00:07:24,200 --> 00:07:26,960 Speaker 2: UMG had planned to do this but then scrapped it 158 00:07:27,120 --> 00:07:30,960 Speaker 2: just last month. Their plans a list setting market uncertainty, 159 00:07:31,480 --> 00:07:32,720 Speaker 2: which is fair. But I mean. 160 00:07:34,400 --> 00:07:36,280 Speaker 3: Maybe it's yeah, maybe it's nothing. 161 00:07:36,360 --> 00:07:40,320 Speaker 2: But I don't really understand is what he wants to 162 00:07:40,360 --> 00:07:42,520 Speaker 2: sell the stake in Spotify, Like why that would be 163 00:07:42,560 --> 00:07:47,160 Speaker 2: good long term because Spotify has crushed it over the 164 00:07:47,240 --> 00:07:50,800 Speaker 2: last five years or so compared to UMG. Yeah, like 165 00:07:50,840 --> 00:07:51,960 Speaker 2: that seems pretty valuable. 166 00:07:52,280 --> 00:07:54,360 Speaker 3: Sure, but if it seems pretty valuable, you can sell 167 00:07:54,360 --> 00:07:55,480 Speaker 3: it for money now, I know. 168 00:07:55,760 --> 00:07:57,880 Speaker 2: But it might be something you want to hang on to. 169 00:07:58,240 --> 00:08:00,559 Speaker 3: Yeah, but if the market value is that as highly 170 00:08:00,680 --> 00:08:02,640 Speaker 3: or more or more highly than you do, then you 171 00:08:02,680 --> 00:08:05,120 Speaker 3: should sell it now. Also, it's just it's like very 172 00:08:05,160 --> 00:08:08,720 Speaker 3: standard activist playbook to be like, the market never values 173 00:08:08,720 --> 00:08:12,920 Speaker 3: some weird random minority stake at its full value because 174 00:08:12,960 --> 00:08:15,800 Speaker 3: the market is focused on, you know, investing in the 175 00:08:15,840 --> 00:08:18,200 Speaker 3: company's business. If you make the business a simpler story, 176 00:08:18,240 --> 00:08:20,280 Speaker 3: then the market will, you know, describe more value to 177 00:08:20,320 --> 00:08:22,440 Speaker 3: that story. If you can sell a minority stake in 178 00:08:22,440 --> 00:08:26,040 Speaker 3: Spotify for more dollars than like the market describes to 179 00:08:26,120 --> 00:08:28,640 Speaker 3: its value when it's part of a bigger company. So 180 00:08:28,800 --> 00:08:30,760 Speaker 3: I don't know, that's like pretty standard logic. It might 181 00:08:30,800 --> 00:08:33,640 Speaker 3: not be true, but like, if you're sure that Spotify 182 00:08:33,720 --> 00:08:35,319 Speaker 3: is going to continue going up much more than the 183 00:08:35,360 --> 00:08:36,760 Speaker 3: rest of the company, then sure, hang out to it. 184 00:08:37,520 --> 00:08:40,480 Speaker 2: Yeah, anyway, I did want to bring up the French 185 00:08:40,520 --> 00:08:43,360 Speaker 2: billionaire that he has to convince. Sure, I'm so bad 186 00:08:43,400 --> 00:08:46,920 Speaker 2: at French names, so I'm scared to say it. Vincent 187 00:08:46,920 --> 00:08:48,280 Speaker 2: Pulair Does that sound good? 188 00:08:48,400 --> 00:08:48,920 Speaker 3: Sounds good? 189 00:08:49,559 --> 00:08:52,640 Speaker 2: French person's going to write in anyway, he owns more 190 00:08:52,640 --> 00:08:56,240 Speaker 2: than an eighteen percent stake through his family holding company. 191 00:08:56,400 --> 00:09:00,320 Speaker 2: But apparently Ackman said that he spoke to bull Air 192 00:09:00,440 --> 00:09:02,520 Speaker 2: and his investment group and said that they were quote 193 00:09:02,600 --> 00:09:03,840 Speaker 2: intrigued with the. 194 00:09:03,880 --> 00:09:06,439 Speaker 3: Right part of the point of the proposals. So maybe 195 00:09:06,600 --> 00:09:09,480 Speaker 3: intrigued crush him out, you know, if he wants cash 196 00:09:09,480 --> 00:09:12,319 Speaker 3: instead of his stake. But I'm not privy to those negotiations. 197 00:09:12,520 --> 00:09:16,400 Speaker 2: No, that was billionaire to a billionaire, not for us 198 00:09:16,440 --> 00:09:17,320 Speaker 2: to know the ft. 199 00:09:18,040 --> 00:09:23,360 Speaker 3: Today Thursday, I think reported another he's so busy he's 200 00:09:23,400 --> 00:09:24,000 Speaker 3: got going on. 201 00:09:24,120 --> 00:09:25,839 Speaker 2: I know I was wondering if we were going to 202 00:09:25,880 --> 00:09:26,200 Speaker 2: get there. 203 00:09:26,320 --> 00:09:28,559 Speaker 3: Yeah, briefly because I don't really understand it. He's got 204 00:09:28,559 --> 00:09:30,880 Speaker 3: a big let's say hedge fund, it's not really the 205 00:09:30,960 --> 00:09:32,240 Speaker 3: right word for it, but he is a big pot 206 00:09:32,280 --> 00:09:34,640 Speaker 3: of money that he invests in some stocks basically and 207 00:09:34,640 --> 00:09:37,680 Speaker 3: he does the occasional like asymmetric derivatives trade as he 208 00:09:37,679 --> 00:09:40,560 Speaker 3: would say. That makes a lot of money on for instance, COVID, 209 00:09:40,840 --> 00:09:43,439 Speaker 3: and it's in this like series of funds that are 210 00:09:43,640 --> 00:09:46,520 Speaker 3: most prominently is like close end fund in Europe, and 211 00:09:46,559 --> 00:09:49,040 Speaker 3: he's like launching a closed end fund in the US, 212 00:09:49,559 --> 00:09:52,199 Speaker 3: pushing to where USI We've talked about this a lot. 213 00:09:52,480 --> 00:09:54,400 Speaker 3: It keeps being in the process of launching. 214 00:09:54,600 --> 00:09:56,680 Speaker 2: Yes, as a launched, it's going to happen. 215 00:09:56,760 --> 00:09:58,640 Speaker 3: It's gonna happen. But so he's raising like five to 216 00:09:58,679 --> 00:10:00,680 Speaker 3: ten billion dollars for that. He's like Peoing the management 217 00:10:00,720 --> 00:10:03,320 Speaker 3: company is part of that, blah blah blah. But the 218 00:10:03,440 --> 00:10:05,240 Speaker 3: f he reported that he's also in talks three is 219 00:10:05,280 --> 00:10:09,400 Speaker 3: a separate fund. Now only do the like asymmetric toatives. 220 00:10:09,880 --> 00:10:13,360 Speaker 3: So instead of owning like you know, a concentrated portfolio 221 00:10:13,400 --> 00:10:17,760 Speaker 3: of large cap stops and sometimes buying index CDs, oat 222 00:10:17,800 --> 00:10:21,800 Speaker 3: of a pandemic, he would own treasury bills and occasionally 223 00:10:21,840 --> 00:10:27,440 Speaker 3: buy index CDs instead of a pandemic, which okay, yeah sure, yeah, 224 00:10:27,760 --> 00:10:31,000 Speaker 3: like a like sort of like a tele risk hedge fund. Yeah, 225 00:10:31,280 --> 00:10:32,520 Speaker 3: a permanent capitol vehicle. 226 00:10:33,080 --> 00:10:36,080 Speaker 2: Yeah. The ft called it like you know, he's making 227 00:10:36,120 --> 00:10:37,400 Speaker 2: doomsday trades here. 228 00:10:37,600 --> 00:10:39,360 Speaker 3: Yeah. The headline is something like he wants the profit 229 00:10:39,400 --> 00:10:43,120 Speaker 3: from market complacency. Right, He's going to bet against complacency, Yeah, 230 00:10:43,200 --> 00:10:44,960 Speaker 3: as opposed to the rest of the portfolios. Is like 231 00:10:45,000 --> 00:10:46,319 Speaker 3: owning latche caap equities. 232 00:10:46,559 --> 00:10:50,760 Speaker 2: This is something that apparently he has highlighted two investors 233 00:10:50,920 --> 00:10:53,400 Speaker 2: as a way to turbo charge the firm's fee earnings. 234 00:10:53,440 --> 00:10:56,760 Speaker 2: So it does play into the potential IPO here. 235 00:10:56,840 --> 00:11:00,200 Speaker 3: Yeah. Right. The way the IPO works is that he's 236 00:11:00,320 --> 00:11:04,920 Speaker 3: mostly selling shares of this closed infund's mostly selling shares 237 00:11:04,960 --> 00:11:07,800 Speaker 3: of a pot of you know, investments, but he's partially 238 00:11:08,200 --> 00:11:12,000 Speaker 3: selling shares in the management company. And so the more 239 00:11:12,040 --> 00:11:15,360 Speaker 3: assets the management company runs, the more that is worth, 240 00:11:15,800 --> 00:11:18,800 Speaker 3: and therefore the more appealing it is to investors in 241 00:11:18,840 --> 00:11:21,080 Speaker 3: the I p O. Right, So, like, if you're paying 242 00:11:21,440 --> 00:11:23,560 Speaker 3: people to buy your clothes end fund and the currency 243 00:11:23,600 --> 00:11:26,199 Speaker 3: of your management company, then like the more funds you run, 244 00:11:26,280 --> 00:11:26,880 Speaker 3: the better that. 245 00:11:26,880 --> 00:11:30,160 Speaker 2: Is doesn't seem very more in buffet of him. I 246 00:11:30,240 --> 00:11:32,320 Speaker 2: keep getting confused over who Bill Lackman is. 247 00:11:32,440 --> 00:11:33,840 Speaker 3: You know, is he Warren Buffett? 248 00:11:33,880 --> 00:11:35,079 Speaker 2: Or is he a bird? 249 00:11:35,880 --> 00:11:36,200 Speaker 3: Yeah? 250 00:11:36,640 --> 00:11:38,920 Speaker 2: I don't know, Bill Ackman, who are you? 251 00:11:39,440 --> 00:11:42,600 Speaker 3: He's a bird? Don't answer that or do He's also 252 00:11:42,600 --> 00:11:44,240 Speaker 3: like tweeting a lot, But that's a that's a whole 253 00:11:44,240 --> 00:11:46,439 Speaker 3: other story of all. 254 00:11:46,559 --> 00:11:50,080 Speaker 1: The thing he wrote today is that it is not 255 00:11:50,160 --> 00:11:52,720 Speaker 1: quite fair to say that Billlackman runs a portfolio of 256 00:11:53,320 --> 00:11:56,680 Speaker 1: a dozen ish large cap stocks that don't change very much. 257 00:11:56,840 --> 00:11:59,000 Speaker 3: But it's a little bit true, and that's very cool 258 00:11:59,120 --> 00:12:00,760 Speaker 3: if you can do that and make money and be 259 00:12:00,960 --> 00:12:02,839 Speaker 3: edge trying to manage it. Right, You're just like, I'm 260 00:12:02,840 --> 00:12:04,559 Speaker 3: gonna own twelve stocks with the right twelve stocks, and 261 00:12:04,559 --> 00:12:06,040 Speaker 3: I'm not gonna change it that much. I'm just gonna 262 00:12:06,360 --> 00:12:07,520 Speaker 3: kind of hang out here and tweet a lot. 263 00:12:07,760 --> 00:12:08,480 Speaker 2: That's what I would do. 264 00:12:08,840 --> 00:12:10,360 Speaker 3: That's what I would do it. Like that is my 265 00:12:10,520 --> 00:12:12,400 Speaker 3: dream as a money manager, right, Like the people who 266 00:12:12,440 --> 00:12:14,800 Speaker 3: are like, I'm going to like work all day and 267 00:12:14,880 --> 00:12:17,199 Speaker 3: change my portfolio every day so they can capture like 268 00:12:17,240 --> 00:12:19,600 Speaker 3: every incremental piece of alpha. That sounds like a hard job, 269 00:12:19,600 --> 00:12:21,959 Speaker 3: whereas like I'll just pick the red stocks and then. 270 00:12:22,120 --> 00:12:23,880 Speaker 2: Tweet I'll just pick good snack. 271 00:12:24,559 --> 00:12:26,960 Speaker 3: Incredible move. But what I like about this idea of 272 00:12:27,000 --> 00:12:29,439 Speaker 3: the like whatever complacency. 273 00:12:29,240 --> 00:12:30,440 Speaker 2: Doom to day fun. 274 00:12:31,320 --> 00:12:32,959 Speaker 3: So one way to run a doomsday fund and the 275 00:12:33,000 --> 00:12:35,640 Speaker 3: way people run their dooms day funds is basically you 276 00:12:35,679 --> 00:12:37,920 Speaker 3: wake up every day and you buy some pots on 277 00:12:37,920 --> 00:12:40,040 Speaker 3: the S and P. Yeah, and it costs you money, 278 00:12:40,240 --> 00:12:42,160 Speaker 3: and at the end of every year you send your 279 00:12:42,360 --> 00:12:44,640 Speaker 3: investors a statement being like I've lost ten percent of 280 00:12:44,679 --> 00:12:46,640 Speaker 3: your money, and then once every like ten years you're 281 00:12:46,640 --> 00:12:48,439 Speaker 3: like I've made twenty thousand percent of your money and 282 00:12:48,440 --> 00:12:51,120 Speaker 3: they're like, okay, fun. It's like a bad profile, right. 283 00:12:51,480 --> 00:12:53,520 Speaker 3: But like the alternative way to run a doomsday fun 284 00:12:53,520 --> 00:12:54,880 Speaker 3: which is like a little bit what is implied by 285 00:12:54,920 --> 00:12:57,800 Speaker 3: the ft article though I don't have no idea, is 286 00:12:57,840 --> 00:13:00,319 Speaker 3: you take the investors' money put in treasure. But I 287 00:13:00,360 --> 00:13:02,880 Speaker 3: don't do anything. You're in four percent a year, and 288 00:13:03,040 --> 00:13:05,160 Speaker 3: every once in a while you're like, you know what 289 00:13:05,960 --> 00:13:08,840 Speaker 3: next week is doomsday. I'm gonna buy puts on the 290 00:13:08,920 --> 00:13:11,720 Speaker 3: S and P today, And if you're right all the time, 291 00:13:12,200 --> 00:13:16,920 Speaker 3: every time you buy doomsday insurance, it pays off, which 292 00:13:16,960 --> 00:13:19,000 Speaker 3: is like what happened to Acmin in COVID, Like you 293 00:13:19,080 --> 00:13:23,839 Speaker 3: bought like some index CDs twenty seven million dollars. I'm like, 294 00:13:23,880 --> 00:13:26,400 Speaker 3: the next week it paid off like billions of dollars. Right, 295 00:13:26,520 --> 00:13:31,000 Speaker 3: So if you're just perfect at predicting doomsday like next week, 296 00:13:32,040 --> 00:13:34,360 Speaker 3: then like your return profile is like most years you 297 00:13:34,480 --> 00:13:37,160 Speaker 3: just earned treasury bills. In some years you return like 298 00:13:37,160 --> 00:13:42,160 Speaker 3: ten thousand percent. That's a great fund. And the reason 299 00:13:42,160 --> 00:13:44,880 Speaker 3: that no one does that is one, no one's perfect predicting, 300 00:13:45,440 --> 00:13:47,000 Speaker 3: right and too because like you know, you have a 301 00:13:47,080 --> 00:13:49,640 Speaker 3: job and you're like, oh, I'm like charging fees and 302 00:13:49,679 --> 00:13:52,160 Speaker 3: like taking investors' money to protect them from doomsday, And 303 00:13:52,200 --> 00:13:54,319 Speaker 3: so you end up buying a lot of doomsday insurance 304 00:13:54,320 --> 00:13:56,000 Speaker 3: because it's just like what it says on the tin. 305 00:13:56,960 --> 00:13:59,000 Speaker 3: And if you're Bill Ackman and you have the zen 306 00:13:59,160 --> 00:14:01,720 Speaker 3: like repose to just buy twelve stocks and hold them 307 00:14:01,720 --> 00:14:03,839 Speaker 3: and tweet all the time, they're like, maybe you can 308 00:14:03,920 --> 00:14:05,640 Speaker 3: do the doomsday fund the right way, where you just 309 00:14:05,640 --> 00:14:08,240 Speaker 3: don't do anything until it's almost doomsday and then you 310 00:14:08,280 --> 00:14:10,400 Speaker 3: buy insurance and make a lot of money. This is 311 00:14:10,400 --> 00:14:12,760 Speaker 3: like I'm mostly joking suggestion, but I kind of like it. 312 00:14:12,800 --> 00:14:16,400 Speaker 2: No, I fantasize all the time, Like what if I 313 00:14:16,440 --> 00:14:19,720 Speaker 2: wasn't in journalism, what if I had a completely unrelated job, 314 00:14:20,120 --> 00:14:24,680 Speaker 2: what if I was a novelist. Then I dream about 315 00:14:24,720 --> 00:14:27,360 Speaker 2: what my portfolio would be and doing something like that 316 00:14:27,480 --> 00:14:29,680 Speaker 2: sounds really fun, right, Like the best. 317 00:14:29,480 --> 00:14:32,840 Speaker 3: Way to invest is to just buy a stock right 318 00:14:32,880 --> 00:14:35,520 Speaker 3: before it goes up a lot, or buy crash insurance 319 00:14:35,560 --> 00:14:37,520 Speaker 3: right before the market goes down a lot. Yeah, it's 320 00:14:37,520 --> 00:14:40,000 Speaker 3: hard to pull off, both intellectually and as a matter 321 00:14:40,040 --> 00:14:42,520 Speaker 3: of getting antsy. But like Bill, likeman might not get antsy, 322 00:14:43,120 --> 00:14:43,640 Speaker 3: that's true. 323 00:14:58,240 --> 00:15:01,680 Speaker 2: Also very busy man. He's got a lot going on. 324 00:15:01,840 --> 00:15:02,560 Speaker 3: A lot going on. 325 00:15:02,880 --> 00:15:05,280 Speaker 2: He has one, like really big thing going on right now, 326 00:15:07,000 --> 00:15:07,640 Speaker 2: can you guess? 327 00:15:08,040 --> 00:15:09,720 Speaker 3: No, I actually wonder like if you went to him 328 00:15:09,720 --> 00:15:11,280 Speaker 3: and said, what's a big thing you've got going on 329 00:15:11,360 --> 00:15:14,480 Speaker 3: right now? Would he be like fighting the woke mind virus? 330 00:15:14,600 --> 00:15:17,000 Speaker 2: No. I think he'd say something like trying to make 331 00:15:17,080 --> 00:15:20,440 Speaker 2: more people use rock. Really, it'd be one of the things. 332 00:15:20,560 --> 00:15:23,720 Speaker 3: I think it would be something much weirder. God, it 333 00:15:23,760 --> 00:15:26,600 Speaker 3: would be like solving the population crisis. 334 00:15:26,640 --> 00:15:29,200 Speaker 2: That's my second big question. Of the podcast Elon Musk, 335 00:15:29,800 --> 00:15:31,760 Speaker 2: what's your big thing anyway? 336 00:15:32,280 --> 00:15:34,480 Speaker 3: I believe the big thing you were referring to, Yeah, 337 00:15:34,560 --> 00:15:37,200 Speaker 3: is the space, the impending SpaceX slash X. 338 00:15:37,480 --> 00:15:40,960 Speaker 2: I mean, it's factually very big. It's very big. It 339 00:15:41,040 --> 00:15:42,800 Speaker 2: keeps getting bigger, probably. 340 00:15:42,960 --> 00:15:47,360 Speaker 3: Soon, although yeah, they filed confidentially. Everyone says they're looking 341 00:15:47,400 --> 00:15:48,960 Speaker 3: to go in June, although it's not clear that they 342 00:15:49,000 --> 00:15:51,280 Speaker 3: will go in Jane. But yeah, very big, two trillion 343 00:15:51,320 --> 00:15:54,960 Speaker 3: dollars supposedly, and yes, as part of his quest to 344 00:15:55,000 --> 00:15:58,400 Speaker 3: get everyone to use Croc and thus fight the woke 345 00:15:58,480 --> 00:15:58,960 Speaker 3: mind virus. 346 00:15:59,040 --> 00:15:59,640 Speaker 2: Yeah, for sure. 347 00:16:00,040 --> 00:16:04,360 Speaker 3: Your Times reported that is making bankers who want to 348 00:16:04,440 --> 00:16:09,840 Speaker 3: lead the IPO by subscriptions to Kroc for their banks, 349 00:16:10,240 --> 00:16:13,480 Speaker 3: which is like a little frowned upon. But I don't 350 00:16:13,520 --> 00:16:18,560 Speaker 3: know why. It's like impolite. It feels somehow dodgy. Yeah, 351 00:16:18,680 --> 00:16:21,360 Speaker 3: but I kind of respect it. You know, he's the 352 00:16:21,400 --> 00:16:22,920 Speaker 3: CEO of or whatever he is. 353 00:16:23,080 --> 00:16:25,800 Speaker 2: He's not actually I don't think he's sick or whatever. 354 00:16:25,800 --> 00:16:29,480 Speaker 3: He's the owner. Yeah, and he's like making a sale. Yeah, 355 00:16:29,560 --> 00:16:31,720 Speaker 3: you know, like shows up this meaning like, hey, guys, 356 00:16:31,760 --> 00:16:33,840 Speaker 3: you know what's great is groc? You should by Groc. Yeah, 357 00:16:33,880 --> 00:16:35,680 Speaker 3: they're like, okay, well look into him, be like no, no, no, 358 00:16:36,280 --> 00:16:37,240 Speaker 3: by Grock right now. 359 00:16:37,560 --> 00:16:40,560 Speaker 2: And this matters personally that Elon Musk. It also matters 360 00:16:40,600 --> 00:16:43,400 Speaker 2: to SpaceX, and SpaceX now owns XII. 361 00:16:43,680 --> 00:16:45,440 Speaker 3: Okay, so first of all, this company is going to 362 00:16:45,440 --> 00:16:47,720 Speaker 3: go public at one hundred times earnings or a hundred 363 00:16:47,720 --> 00:16:50,040 Speaker 3: times revenue or something. I don't actually know the revenue numbers, 364 00:16:50,040 --> 00:16:52,600 Speaker 3: but like the two trillion dollar evaluation is not closely 365 00:16:52,600 --> 00:16:55,840 Speaker 3: connected to any amount of revenue or income. But you know, 366 00:16:55,840 --> 00:16:58,680 Speaker 3: every little bit helps, and in particular, you know, to 367 00:16:58,720 --> 00:17:01,280 Speaker 3: the extent you are going public not only as a 368 00:17:01,360 --> 00:17:05,199 Speaker 3: rocket company, but as ooh AI everything's AI, you know, 369 00:17:05,320 --> 00:17:08,520 Speaker 3: showing like AI adoption is valuable, even if the AI 370 00:17:08,720 --> 00:17:11,359 Speaker 3: is still a sort of smallest part of the business 371 00:17:11,359 --> 00:17:14,920 Speaker 3: commerci Yeah, and so saying you know, all of these 372 00:17:15,040 --> 00:17:18,200 Speaker 3: big banks there's names are on the cover of the perspective, 373 00:17:18,200 --> 00:17:21,639 Speaker 3: So all these big banks have purchased subscriptions to GROC. 374 00:17:22,880 --> 00:17:25,760 Speaker 2: Some of the banks seems positive. 375 00:17:27,000 --> 00:17:28,560 Speaker 3: I mean not if you have articles being like, oh, 376 00:17:28,600 --> 00:17:29,960 Speaker 3: they only did it because they were forced through, but 377 00:17:30,000 --> 00:17:31,080 Speaker 3: you know, maybe they'll like it. 378 00:17:31,880 --> 00:17:34,359 Speaker 2: Or I was also wondering like after they get the 379 00:17:34,400 --> 00:17:37,080 Speaker 2: IPO over the line. Can they just cancel their subscriptions? 380 00:17:37,520 --> 00:17:39,960 Speaker 3: So One, I'm sure they'll pay for some portion of 381 00:17:40,000 --> 00:17:41,800 Speaker 3: it upfront. Two, maybe they'll like it. 382 00:17:42,600 --> 00:17:43,680 Speaker 2: Maybe it's the best. 383 00:17:43,920 --> 00:17:47,520 Speaker 3: No, because Elon Musk is like a continual source of 384 00:17:48,600 --> 00:17:52,560 Speaker 3: ajata for banks, right, and then fees, you know, and 385 00:17:52,640 --> 00:17:56,359 Speaker 3: so you're always looking to win continued business and you know, 386 00:17:57,160 --> 00:17:59,080 Speaker 3: a million dollars a year for crock or whatever. 387 00:17:59,200 --> 00:18:00,560 Speaker 2: It's fair. Feel maybe it's good. 388 00:18:00,640 --> 00:18:01,880 Speaker 3: Be they like it, Maybe they like it. 389 00:18:01,920 --> 00:18:02,600 Speaker 2: Maybe they will. 390 00:18:02,800 --> 00:18:05,359 Speaker 3: You'd hope that Sam Altonman and Tima Day are reading 391 00:18:05,359 --> 00:18:06,720 Speaker 3: this and being like, I we should do that too. 392 00:18:07,200 --> 00:18:09,160 Speaker 3: So now every bank has to buy the subscriptions every 393 00:18:09,440 --> 00:18:09,920 Speaker 3: that's true. 394 00:18:10,080 --> 00:18:13,480 Speaker 2: Of course, open Ai and Anthropic also potentially going public 395 00:18:13,560 --> 00:18:13,920 Speaker 2: this year. 396 00:18:14,080 --> 00:18:14,280 Speaker 3: Right. 397 00:18:14,560 --> 00:18:16,439 Speaker 2: I love some of the details in this piece from 398 00:18:16,480 --> 00:18:18,399 Speaker 2: the New York Times. Some of the banks have agreed 399 00:18:18,400 --> 00:18:21,640 Speaker 2: to spend tens of millions of dollars on the chatbot. 400 00:18:21,640 --> 00:18:24,560 Speaker 2: But also this is fun. Elon Musk also reportedly asked 401 00:18:24,560 --> 00:18:27,679 Speaker 2: the banks to advertise on X, his social media site 402 00:18:27,920 --> 00:18:32,160 Speaker 2: also owned by SpaceX, but was less adamant about that request. 403 00:18:32,400 --> 00:18:33,960 Speaker 3: Right, which I think makes sense. 404 00:18:34,080 --> 00:18:35,960 Speaker 2: Yeah, he's one, it's not a natural fit. 405 00:18:36,040 --> 00:18:39,240 Speaker 3: It's not a natural fit, right, use my AI because 406 00:18:39,240 --> 00:18:42,000 Speaker 3: it'll help you run your banking business. Advertise on Twitter 407 00:18:42,040 --> 00:18:44,440 Speaker 3: to run your banking like that makes sense. But also 408 00:18:44,480 --> 00:18:49,080 Speaker 3: because you know, like you're selling an IPO and being like, oh, 409 00:18:49,600 --> 00:18:54,159 Speaker 3: our flagship AI product is being adopted by big you know, 410 00:18:54,200 --> 00:18:56,760 Speaker 3: fortune five hundred companies. Is a good pitching. I always 411 00:18:56,760 --> 00:18:58,800 Speaker 3: tell some ads on our cess pool social media. So 412 00:18:59,119 --> 00:19:02,280 Speaker 3: let's have a good pitch catering to IPO investors. 413 00:19:02,480 --> 00:19:05,119 Speaker 2: Yeah, I will say. I mean when it comes to 414 00:19:05,119 --> 00:19:09,359 Speaker 2: all these chatbots, actually getting enterprise customers is like a big, 415 00:19:09,680 --> 00:19:13,760 Speaker 2: big part of it because people individuals use chatbots, but 416 00:19:13,960 --> 00:19:14,760 Speaker 2: it's less common. 417 00:19:15,000 --> 00:19:17,600 Speaker 3: No, enterprise is a big deal. And my impression is 418 00:19:17,600 --> 00:19:22,919 Speaker 3: that Groc has some trouble there. Marketing is like, oh, 419 00:19:22,960 --> 00:19:24,879 Speaker 3: we're making mecha Hitler or whatever. 420 00:19:25,280 --> 00:19:26,960 Speaker 2: That's the thing. Like from what I can I don't 421 00:19:26,960 --> 00:19:29,719 Speaker 2: really use chatbots in general, but I spent a lot 422 00:19:29,720 --> 00:19:31,720 Speaker 2: of time on X, which means I spend a lot 423 00:19:31,760 --> 00:19:34,800 Speaker 2: of time reading Elon Musk's posts on X and everything 424 00:19:34,800 --> 00:19:37,840 Speaker 2: he posts from Groc is like, I don't know, it's 425 00:19:37,880 --> 00:19:39,600 Speaker 2: just like anime girls. 426 00:19:39,760 --> 00:19:43,600 Speaker 3: I could see not like a button down corporate it stuff, 427 00:19:43,640 --> 00:19:46,239 Speaker 3: but they have other marketing channels to corporate clients, like 428 00:19:46,440 --> 00:19:48,000 Speaker 3: forcing them to buy it for the IPEA. 429 00:19:48,080 --> 00:19:50,240 Speaker 2: There you go, twist my arm. 430 00:19:50,520 --> 00:19:52,159 Speaker 3: I love that because you know, I used to be 431 00:19:52,640 --> 00:19:54,040 Speaker 3: an equity capital markets. 432 00:19:54,000 --> 00:19:57,199 Speaker 2: I've heard and how delighted would you be if they 433 00:19:57,200 --> 00:19:59,480 Speaker 2: were like, guys, we have to use CROC. 434 00:19:59,640 --> 00:20:02,320 Speaker 3: I wrote about this. There's so much stupid stuff in 435 00:20:02,359 --> 00:20:05,000 Speaker 3: these pitches, right, there's so much like you know, like 436 00:20:05,080 --> 00:20:07,639 Speaker 3: programs drove an Uber for a year to pitch Uber. 437 00:20:09,119 --> 00:20:10,680 Speaker 3: But also like the one I always come back to 438 00:20:10,840 --> 00:20:15,439 Speaker 3: is when Lululemon went public, every bank sent their teams 439 00:20:15,760 --> 00:20:19,399 Speaker 3: in like yoga pants got to pitch the IPO god, 440 00:20:20,880 --> 00:20:24,000 Speaker 3: and like did that boost Lulemon's revenue like a little bit? 441 00:20:24,040 --> 00:20:25,400 Speaker 3: They had to go out and buy the yoga pants, 442 00:20:25,400 --> 00:20:28,520 Speaker 3: but not materially, not enough to like move the numbers 443 00:20:28,520 --> 00:20:31,680 Speaker 3: in the IPO perspectives, But like how humiliating the banks? 444 00:20:32,160 --> 00:20:34,800 Speaker 2: Humiliation ritual, just a humiliation. 445 00:20:35,320 --> 00:20:37,680 Speaker 3: Whereas when you show up and Elon Musk is like, look, 446 00:20:37,760 --> 00:20:39,480 Speaker 3: you can pitch me, but you gotta spend twenty million 447 00:20:39,480 --> 00:20:41,280 Speaker 3: dollars on rock and I was like, okay, that's like 448 00:20:41,359 --> 00:20:44,600 Speaker 3: it's not humiliating. It's just like transactional. It's very straightforward. 449 00:20:45,200 --> 00:20:47,719 Speaker 3: I like it. Gosh, it makes sense. 450 00:20:48,160 --> 00:20:49,440 Speaker 2: Other possible humiliation. 451 00:20:49,840 --> 00:20:51,640 Speaker 3: There's so much like this. Used to be a real 452 00:20:51,840 --> 00:20:56,560 Speaker 3: big thing. Banks were really into thinking about how they 453 00:20:56,560 --> 00:20:59,640 Speaker 3: could prove to a company is that they loved those companies' products. 454 00:21:00,240 --> 00:21:01,880 Speaker 3: You know, with AI you have some of that, right, Like, 455 00:21:02,200 --> 00:21:05,160 Speaker 3: I'm sure that everyone who shown up the pitch open 456 00:21:05,200 --> 00:21:08,480 Speaker 3: a or anthropic or even I say I on the 457 00:21:08,520 --> 00:21:10,359 Speaker 3: right pa. I was like, well, we made this pitch 458 00:21:10,359 --> 00:21:13,160 Speaker 3: book with chat GPT or Claude or you know, whatever 459 00:21:13,200 --> 00:21:14,960 Speaker 3: it may be. And some days they probably get it wrong. 460 00:21:15,560 --> 00:21:17,120 Speaker 3: We made this with chat GPT and it's like, nope, 461 00:21:17,119 --> 00:21:19,960 Speaker 3: you're pitching anthropic. But I'm sure they'll do that, but 462 00:21:21,280 --> 00:21:22,919 Speaker 3: more direct connection. 463 00:21:23,119 --> 00:21:24,479 Speaker 2: We made Mecha Hitler. 464 00:21:25,560 --> 00:21:27,520 Speaker 3: You have to show up and be like we made 465 00:21:27,560 --> 00:21:30,280 Speaker 3: this pitch book with Crock and he opens and I 466 00:21:30,320 --> 00:21:32,520 Speaker 3: don't know, it's kind of woke. You're like, no, no, 467 00:21:32,880 --> 00:21:33,880 Speaker 3: here's all the slurs. 468 00:21:34,000 --> 00:21:34,760 Speaker 2: Where's the anime? 469 00:21:34,960 --> 00:21:35,640 Speaker 3: I take it back? 470 00:21:35,840 --> 00:21:54,800 Speaker 4: It would be pretty That was fun, you know, it's 471 00:21:55,280 --> 00:21:57,200 Speaker 4: also fun everyone. 472 00:21:57,840 --> 00:22:00,840 Speaker 3: It's been a while since we talked about the reads 473 00:22:00,840 --> 00:22:02,880 Speaker 3: of the ETF markets. I'm going to leave, and. 474 00:22:02,880 --> 00:22:06,439 Speaker 2: Katie is gonna If you are not interested, you can 475 00:22:06,520 --> 00:22:09,520 Speaker 2: leave now for the dozen, the dozen listeners who are 476 00:22:09,560 --> 00:22:12,480 Speaker 2: still with us, Matt, you threw me a bone. 477 00:22:13,200 --> 00:22:15,240 Speaker 3: Can you talking about competition for QQQ? 478 00:22:15,560 --> 00:22:18,720 Speaker 2: And Katy's like, yes, obviously, that's the fastest I've ever 479 00:22:18,760 --> 00:22:19,600 Speaker 2: answered an email. 480 00:22:19,880 --> 00:22:20,119 Speaker 3: I know. 481 00:22:21,200 --> 00:22:26,520 Speaker 2: So this is interesting, So I promise. So the ques QQQ, 482 00:22:26,720 --> 00:22:29,560 Speaker 2: it's investos, NAZAQ one hundred ETF, it's been around since 483 00:22:29,640 --> 00:22:31,159 Speaker 2: nineteen ninety nine, is everywhere. 484 00:22:31,640 --> 00:22:33,560 Speaker 3: Yes, we've talked about why they advertised every which is 485 00:22:33,560 --> 00:22:34,240 Speaker 3: they have too much money. 486 00:22:34,280 --> 00:22:36,520 Speaker 2: But yeah, my eyes just lit up. They might not 487 00:22:36,640 --> 00:22:41,359 Speaker 2: advertise everywhere going forward because their proxy vote passed at 488 00:22:41,400 --> 00:22:43,320 Speaker 2: the end of twenty twenty five, so now they don't 489 00:22:43,320 --> 00:22:44,720 Speaker 2: have to spend as much on marketing. 490 00:22:44,800 --> 00:22:46,240 Speaker 3: I feel like I still see them on the trend, but. 491 00:22:46,400 --> 00:22:49,600 Speaker 2: Well, they probably made commitments for twenty twenty six. You know. 492 00:22:50,240 --> 00:22:53,560 Speaker 3: Anyway I'm getting anyway, we're. 493 00:22:53,400 --> 00:22:56,919 Speaker 2: Still talking about the cues anyway. So NASAC and the 494 00:22:57,000 --> 00:23:01,000 Speaker 2: Cues have had this long standing relationship. NASAK has been 495 00:23:01,280 --> 00:23:05,320 Speaker 2: historically very selective about who they license out the NASAQ 496 00:23:05,359 --> 00:23:09,520 Speaker 2: one hundred two and at least in the US as 497 00:23:09,560 --> 00:23:13,920 Speaker 2: of right now, there's only two ETFs that purely track 498 00:23:14,119 --> 00:23:16,800 Speaker 2: the NASAQ one hundred. You can there's other ETFs that 499 00:23:16,840 --> 00:23:21,000 Speaker 2: like add derivative income options overlay stuff to it, But 500 00:23:21,080 --> 00:23:23,560 Speaker 2: in terms of the pure NASAQ one hundred, there's just 501 00:23:23,600 --> 00:23:27,640 Speaker 2: two Invesco ETFs in the US. Outside in a Mia 502 00:23:28,320 --> 00:23:32,320 Speaker 2: there are NASTAQ one hundred ETFs. But anyway, Matt is 503 00:23:33,160 --> 00:23:37,520 Speaker 2: slowly inching towards the DOR. What's interesting is that Black 504 00:23:37,640 --> 00:23:41,240 Speaker 2: Rocks six am on Monday filed for a Nasdaq one 505 00:23:41,280 --> 00:23:47,240 Speaker 2: hundred ETF. Mat what is going on, h you know, 506 00:23:47,280 --> 00:23:52,840 Speaker 2: it's crazier. Tuesday in the morning, State Street filed for 507 00:23:52,960 --> 00:23:57,520 Speaker 2: NASAQ one hundred ETF. I know, it's nuts. So apparently 508 00:23:57,880 --> 00:24:01,679 Speaker 2: Nasdaq is feeling a little bit, you know, more open, 509 00:24:02,440 --> 00:24:05,440 Speaker 2: and Invesco shares, I mean, at least on Monday they 510 00:24:05,480 --> 00:24:08,280 Speaker 2: went straight down. I think they closed five percent lower 511 00:24:08,359 --> 00:24:12,000 Speaker 2: or something, because they might have some serious competition here. 512 00:24:12,040 --> 00:24:16,360 Speaker 2: I mean, then cues have been a cash cow and 513 00:24:16,720 --> 00:24:19,960 Speaker 2: Invesco just figured out how to open the piggybank and 514 00:24:20,040 --> 00:24:22,720 Speaker 2: actually get some of that windfall since they have to 515 00:24:22,720 --> 00:24:25,879 Speaker 2: spend less on marketing now. But to have black rocks 516 00:24:25,880 --> 00:24:31,320 Speaker 2: show up months later. Traders reacted appropriately here. 517 00:24:31,840 --> 00:24:36,359 Speaker 3: So I really love that index licensing is such a thing. Yeah, 518 00:24:36,400 --> 00:24:39,919 Speaker 3: because if I in my personal account wanted to track 519 00:24:40,240 --> 00:24:45,320 Speaker 3: the NASAK one hundred index without buying any ETF that 520 00:24:45,440 --> 00:24:49,520 Speaker 3: licenses that index, it could probably do okay, Like it's 521 00:24:49,600 --> 00:24:51,000 Speaker 3: kind of a public knowledge. 522 00:24:51,119 --> 00:24:53,480 Speaker 2: But if you went out and launched a product. 523 00:24:53,200 --> 00:24:55,320 Speaker 3: If I launched a product, right and I called it 524 00:24:55,359 --> 00:24:58,480 Speaker 3: the like one hundred and three tech stock index, that 525 00:24:58,480 --> 00:25:01,199 Speaker 3: would get less traction than the Nasdaq one hundred, We'll 526 00:25:01,240 --> 00:25:01,439 Speaker 3: call it. 527 00:25:01,440 --> 00:25:03,200 Speaker 2: The matt Levine At least. 528 00:25:04,920 --> 00:25:06,159 Speaker 3: It is kind of weird to me that, like the 529 00:25:06,200 --> 00:25:09,280 Speaker 3: licensing of the actual official indexes is so valuable because 530 00:25:09,359 --> 00:25:12,680 Speaker 3: like you can recreate much of that performance, and there 531 00:25:12,720 --> 00:25:15,880 Speaker 3: are some pan cardial role that's on indexes sometimes. Yeah, 532 00:25:17,600 --> 00:25:19,399 Speaker 3: but least the nas like one hundred has enough like 533 00:25:19,600 --> 00:25:22,200 Speaker 3: cachet that you really do need to license it. 534 00:25:22,200 --> 00:25:24,639 Speaker 2: It's funny to talk about this because as I was 535 00:25:24,680 --> 00:25:27,240 Speaker 2: writing this article, I was talking to my husband about 536 00:25:27,280 --> 00:25:32,360 Speaker 2: it very excitedly, because this is huge. He's a he's 537 00:25:32,359 --> 00:25:35,080 Speaker 2: a very nice man, but he raised the same question. 538 00:25:35,160 --> 00:25:40,600 Speaker 2: He was like, why Googles you like a sleep mask, 539 00:25:40,760 --> 00:25:42,159 Speaker 2: but he was like, why can't I just go and 540 00:25:42,160 --> 00:25:44,600 Speaker 2: buy all the stocks he can? I was like, you 541 00:25:44,680 --> 00:25:47,800 Speaker 2: just you can't, Joe, Okay, you can't. And probably the 542 00:25:47,840 --> 00:25:50,720 Speaker 2: answer is that NASAC would sue you no, if you 543 00:25:50,920 --> 00:25:54,199 Speaker 2: launched a product, fine, right, right, I'd sue you. 544 00:25:54,400 --> 00:25:57,200 Speaker 3: Right. You'd have to be very careful to not use 545 00:25:57,240 --> 00:26:00,480 Speaker 3: words like Nasdaq or one hundred of the product. 546 00:26:01,240 --> 00:26:04,680 Speaker 2: It is interesting and fun to think about why now 547 00:26:04,920 --> 00:26:07,640 Speaker 2: you know, why is NASDAK Now. 548 00:26:07,800 --> 00:26:09,680 Speaker 3: The answer SpaceX? I don't know. 549 00:26:09,760 --> 00:26:11,520 Speaker 2: I mean, that's one of the big theories out there 550 00:26:11,720 --> 00:26:15,879 Speaker 2: is that if SpaceX does go with Nasdaq as the 551 00:26:16,000 --> 00:26:19,280 Speaker 2: change that they list on, and if they fast track 552 00:26:19,480 --> 00:26:23,000 Speaker 2: SpaceX into the NASAQ one hundred, NASAK is going to 553 00:26:23,080 --> 00:26:25,480 Speaker 2: have a huge competitive advantage here over other. 554 00:26:25,800 --> 00:26:28,720 Speaker 3: Big period where you know, the NAZA one hundred is 555 00:26:28,720 --> 00:26:30,480 Speaker 3: a big deal, but like S ANDB five hundred is 556 00:26:30,480 --> 00:26:32,440 Speaker 3: the main like indix that people index. 557 00:26:32,200 --> 00:26:33,920 Speaker 2: Two, but they're not mutually exclusive. 558 00:26:34,440 --> 00:26:36,400 Speaker 3: Well they are in product terms, like I. 559 00:26:36,400 --> 00:26:37,360 Speaker 2: Know, but I'm saying, like. 560 00:26:37,920 --> 00:26:40,879 Speaker 3: Right, you can be in both indexes, but like crucially, yeah, 561 00:26:41,040 --> 00:26:45,160 Speaker 3: for some period of months, it seems like SpaceX will 562 00:26:45,160 --> 00:26:47,000 Speaker 3: be in the NAZAK one hundred and not in the SMP. 563 00:26:47,200 --> 00:26:47,280 Speaker 4: Right. 564 00:26:47,400 --> 00:26:51,000 Speaker 3: Yes, it seems like NASDAC has changed its rules to 565 00:26:51,200 --> 00:26:54,120 Speaker 3: fast track listing SpaceX, So that's shortly, you know, weeks 566 00:26:54,160 --> 00:26:57,280 Speaker 3: after it goes public, it'll be in the NAZAK one hundred, 567 00:26:57,640 --> 00:27:00,040 Speaker 3: and the SMP moves more slowly, So there will be 568 00:27:00,160 --> 00:27:03,960 Speaker 3: some period of months where, yes, if you want space 569 00:27:04,080 --> 00:27:07,080 Speaker 3: X and your index fund because you're buying index funds 570 00:27:07,080 --> 00:27:09,560 Speaker 3: that like deep down you're an active stock picker or 571 00:27:09,560 --> 00:27:12,320 Speaker 3: at least like that name, then you have to buy 572 00:27:12,359 --> 00:27:13,719 Speaker 3: the NAZAQ one hundred one. 573 00:27:13,960 --> 00:27:15,879 Speaker 2: Yeah, that could be a theory. 574 00:27:16,240 --> 00:27:18,000 Speaker 3: I think it's break it theory. And then it's you know, 575 00:27:18,000 --> 00:27:20,600 Speaker 3: it's like also open AI and all of the big 576 00:27:20,640 --> 00:27:24,879 Speaker 3: tech companies. You know, the NAZAC rules will allow them 577 00:27:24,920 --> 00:27:27,800 Speaker 3: to fast track into the Nasdaq index and SMP might 578 00:27:27,800 --> 00:27:29,520 Speaker 3: move more slowly, and so you have this period where 579 00:27:29,560 --> 00:27:32,960 Speaker 3: like the big tech IPOs that everyone is most interested 580 00:27:33,000 --> 00:27:35,760 Speaker 3: in will come first to the NAZAK one hundred if 581 00:27:36,040 --> 00:27:38,520 Speaker 3: all breaks now the next way, I. 582 00:27:38,600 --> 00:27:42,720 Speaker 2: Was also wondering if it connects to the proxy vote somehow. 583 00:27:43,000 --> 00:27:47,600 Speaker 2: I mean, under the new fee revenue breakdown of the queues, 584 00:27:48,160 --> 00:27:51,320 Speaker 2: NASAC is still getting paid and I think that they're 585 00:27:51,320 --> 00:27:55,880 Speaker 2: getting paid the same amount, So maybe that doesn't quite connect. 586 00:27:55,960 --> 00:28:01,480 Speaker 2: But obviously Invesco is going to theoretically be marketing the 587 00:28:01,560 --> 00:28:05,359 Speaker 2: cues less. Yeah, so maybe that could be it as well. 588 00:28:06,000 --> 00:28:10,320 Speaker 2: But maybe it's some delightful combination. You know. See, who 589 00:28:10,359 --> 00:28:15,399 Speaker 2: wasn't this fun? Yeah? What I'm waiting for. What I 590 00:28:15,440 --> 00:28:17,959 Speaker 2: can't wait to see is that we haven't had fees 591 00:28:18,000 --> 00:28:21,040 Speaker 2: listed on any of these filings yet. They're very preliminary 592 00:28:21,080 --> 00:28:22,880 Speaker 2: filings from both What do people pay. 593 00:28:22,720 --> 00:28:25,600 Speaker 3: For neke licensing like a basis punt? 594 00:28:25,840 --> 00:28:30,080 Speaker 2: It left depends on the index you know, the cues 595 00:28:30,200 --> 00:28:33,720 Speaker 2: right now, they were charging twenty basis points. Then post 596 00:28:33,720 --> 00:28:39,680 Speaker 2: privacy charging yes, yes, now that fee is eighteen basis points. 597 00:28:40,120 --> 00:28:43,440 Speaker 2: They have qqq M, which is fifteen basis points. And 598 00:28:43,480 --> 00:28:47,600 Speaker 2: we're talking about an index, like an index tracking ETF. 599 00:28:47,720 --> 00:28:52,160 Speaker 2: That's pretty it's pretty expensive. So very curious to see 600 00:28:52,200 --> 00:28:56,040 Speaker 2: if Blackrock comes out with a three basis point productor I. 601 00:28:56,000 --> 00:28:59,720 Speaker 3: Assume how much of that fifteen or twenty basis prints 602 00:28:59,800 --> 00:29:01,000 Speaker 3: is is that's not kidding. 603 00:29:01,160 --> 00:29:03,480 Speaker 2: I believe when it was twenty basis points, it was 604 00:29:03,520 --> 00:29:05,920 Speaker 2: something close to like seven or eight basis points. 605 00:29:06,120 --> 00:29:06,640 Speaker 3: That's a lot. 606 00:29:06,840 --> 00:29:10,680 Speaker 2: It is a lot, I know. So we'll say they 607 00:29:10,680 --> 00:29:13,840 Speaker 2: could do something. This is something that black Rock does occasionally, 608 00:29:13,920 --> 00:29:15,600 Speaker 2: is you know, the way of fees for the first 609 00:29:15,680 --> 00:29:18,760 Speaker 2: year or something, just accumulate a bunch of scale and. 610 00:29:18,720 --> 00:29:20,640 Speaker 3: Then they go, do you think they're paying now seven 611 00:29:20,680 --> 00:29:21,360 Speaker 3: basics points? 612 00:29:22,000 --> 00:29:24,120 Speaker 2: That's what I'm so curious to find out. I want 613 00:29:24,120 --> 00:29:27,000 Speaker 2: to know what if their fee is like ten basis points, 614 00:29:27,040 --> 00:29:28,920 Speaker 2: then you have to assume that, okay, And as I 615 00:29:29,200 --> 00:29:33,720 Speaker 2: still yeah, I'm also interested to see, like if a 616 00:29:33,840 --> 00:29:36,560 Speaker 2: Vanguard files for Nazaq one hundred ETF that would be 617 00:29:36,560 --> 00:29:37,520 Speaker 2: fun for me and. 618 00:29:37,880 --> 00:29:39,760 Speaker 3: Or for like a big tech ninety eighty ts. 619 00:29:39,840 --> 00:29:44,719 Speaker 2: Yeah, yeah, man, Thank you to everyone who's still listening. 620 00:29:44,880 --> 00:29:46,520 Speaker 2: This is really great for me. 621 00:29:46,640 --> 00:29:49,480 Speaker 3: I feel we need to have like a reward. 622 00:29:51,400 --> 00:29:54,080 Speaker 2: Tell us right. 623 00:30:02,360 --> 00:30:03,960 Speaker 3: And that was the Money Stuff Podcast. 624 00:30:04,240 --> 00:30:06,360 Speaker 2: I'm Matt Levine and I'm Katie Greifeld. 625 00:30:06,520 --> 00:30:08,640 Speaker 3: You can find my work by subscribing to the Money 626 00:30:08,640 --> 00:30:10,640 Speaker 3: Stuff queletter on Bloomberg dot. 627 00:30:10,440 --> 00:30:13,160 Speaker 2: Com, and you can find me on Bloomberg TV every 628 00:30:13,240 --> 00:30:16,400 Speaker 2: day on the Clothes between three and five pm Eastern. 629 00:30:17,120 --> 00:30:19,120 Speaker 3: We'd love to hear from you. You can send an 630 00:30:19,120 --> 00:30:22,440 Speaker 3: email to Moneypod at Bloomberg dot net. Ask us a 631 00:30:22,560 --> 00:30:24,400 Speaker 3: question and we might answer it on the air. 632 00:30:24,760 --> 00:30:27,360 Speaker 2: You can also subscribe to our show wherever you're listening 633 00:30:27,400 --> 00:30:29,239 Speaker 2: right now and leave us a review. It helps more 634 00:30:29,280 --> 00:30:30,120 Speaker 2: people find the show. 635 00:30:31,040 --> 00:30:35,400 Speaker 3: The Money Stuff Podcast is produced by Anamasarakis, Moses Onam 636 00:30:35,800 --> 00:30:37,560 Speaker 3: and Alexis HoTT Our. 637 00:30:37,640 --> 00:30:39,680 Speaker 2: Theme music was composed by Blake Maples. 638 00:30:40,400 --> 00:30:43,840 Speaker 3: Amy Keen is our executive producer. Thanks for listening to 639 00:30:43,880 --> 00:30:46,360 Speaker 3: The Money Stuff Podcast. We'll be back next week with 640 00:30:46,520 --> 00:30:47,200 Speaker 3: more stuff.