Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Did you know I interviewed Adam Back on Tuesday?
Speaker 3: On Tuesday?
Speaker 2: Yeah, do you know when the New York Times article
Speaker 2: came out Wednesday?
Speaker 3: Yeah, So that's fascinating. John Carrier at the New York
Speaker 3: Times identified Adam Back as Satosha knocking out over, the
Speaker 3: founder of bitcoin. And there's a lot of skepticism of
Speaker 3: this arification. A lot of the evidence for it is
Speaker 3: like sort of circumstantial stuff and a lot of like
Speaker 3: linguistic analysis, and like Adam Back is like a.
Speaker 2: Cryptographers also British, British.
Speaker 3: And there's all these things that like are basically shared
Speaker 3: by any of the you know, one hundred people who
Speaker 3: might have invented bitcoin. So there's a lot of skepticism
Speaker 3: of the identification. But what I really like in the story, Yeah,
Speaker 3: and this is why I wish you would interviewed him
Speaker 3: a day later. What I really liked in the story
Speaker 3: is that John Carrier doesn't hang his hat on these analyzes.
Speaker 3: I met with the guy and asked if he was
Speaker 3: Satoshi and he said no, but he looked shifty when
Speaker 3: he was doing it. Yeah, and I love I read
Speaker 3: out this all the time, like this notion that like
Speaker 3: investors get information from like the tone and body language
Speaker 3: of executives. I love the idea that everyone sort of
Speaker 3: goes around thinking that they can spot a liar, where
Speaker 3: like they can just look into someone's eyes and know
Speaker 3: if they're telling the truth. But the supposed to John Carrier,
Speaker 3: that's true, right, Like he's an accomplished investigative reporter. But
Speaker 3: I wish that you had looked at him back in
Speaker 3: the eyes and said so.
Speaker 2: And then my follow up question could have been like,
Speaker 2: why are you so nervous?
Speaker 3: You know you look turning red? Why is this adam
Speaker 3: so anyway? I love that as a category of evidence.
Speaker 3: I don't know that I'm convinced, but I like it.
Speaker 2: Yeah, I like it too. I will say I wish
Speaker 2: I wish that New York Times article had come out
Speaker 2: a day earlier. You were talking about quantum computing and
Speaker 2: I was filling in on our crypto show. I wasn't
Speaker 2: supposed to do it. It was just, you know, an
Speaker 2: anchor called out and I hopped in and it wasn't
Speaker 2: my best work.
Speaker 3: No, I tell you, if you had sat Nakamoto on
Speaker 3: your show and you didn't.
Speaker 2: Add yeah, I said, I was just talking to the
Speaker 2: CEO of Blockstream, you know, about quantum computing, also potentially
Speaker 2: the founder of bitcoin itself. I really think it is
Speaker 2: the most interesting modern mystery, you know. Yes, what else
Speaker 2: you got like truly modern, like still happening mystery.
Speaker 3: I don't know. My first instinct is that we are
Speaker 3: sort of training my children to be skeptical of the moonlanding.
Speaker 2: Just for fun, just for fun.
Speaker 3: You know.
Speaker 2: I've been telling my nephew that I'm a witch for
Speaker 2: consistently for the past couple of years.
Speaker 3: So yeah, I feel like that's a good aunt joke.
Speaker 2: He doesn't know if I'm joking at scared apparently I
Speaker 2: love the story. He was riding in the back of
Speaker 2: my brother and my sister in law's car and they
Speaker 2: hadn't been talking about me, but he very seriously asked,
Speaker 2: does Aunt Katie write a broom like it's on his mind? Yeah,
Speaker 2: he's just thinking, Yeah.
Speaker 3: It'spare moments. Yeah, that's what it means that you're a witch.
Speaker 3: Hello and welcome to The Money Stuff Podcast. You're a
Speaker 3: weekly podcast where we talk about stuff related to money.
Speaker 3: I'm Matt Levine and I write The Money Stuff column
Speaker 3: for Bloomberg Opinion.
Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and
Speaker 2: an anchor for Bloomberg Television.
Speaker 3: I feelin like we have some money stuff the podcast
Speaker 3: Greatest That's Today. Bill Ackman keeps doing stuff.
Speaker 2: Got so much stuff. He has a lot going on,
Speaker 2: a lot going on.
Speaker 3: It's impressive. But yeah, the news this week is that
Speaker 3: he's doing something with the Universal Music Group, or proposing
Speaker 3: to do something with Universal Music Group.
Speaker 2: He wants to buy it, No he doesn't, but he
Speaker 2: wants to do all this stuff that isn't necessarily just
Speaker 2: buying it.
Speaker 3: Yeah, I love it because like you love it. The
Speaker 3: headline is that he is proposed to acquire all of
Speaker 3: Universal Music Group for fifty five billion euros. But that's
Speaker 3: not true. Like what's happening is so universal? Is it?
Speaker 3: It's like listen in your ainext ins and Acman and
Speaker 3: a lot of people would like it to be listed
Speaker 3: in New York and it's proposed to listen to New
Speaker 3: York and like delay it and so partly as a
Speaker 3: matter of speeding that along, Akman has proposed basically a
Speaker 3: series of activist things. He wants the company to like
Speaker 3: borrow some money to buy back stock, you know, classic
Speaker 3: activist move. He stock buyback funted by borrowing. They own
Speaker 3: a stake in Spotify. He wants them to sell that
Speaker 3: off and use the cash to buy back more stock.
Speaker 3: He wants to buy some stock, and like they use
Speaker 3: those proceeds to buy back other people's stock and all
Speaker 3: of that activist stuff, he says, and his letter to
Speaker 3: the board will cause the stock to go up from
Speaker 3: you know, something like seventeen years now up thirty years. Right,
Speaker 3: So we created a lot of value for shareholders, and
Speaker 3: that's good theoretically. Yeah, yeah, strictly, this is great, right,
Speaker 3: It's like the law of nature. It's just like that's
Speaker 3: that's his analysis of what would happen if they changed
Speaker 3: their capital return strategy and you know, listed in New
Speaker 3: York and did some other stuff for sure, and the
Speaker 3: way that he would buy stock and the way that
Speaker 3: they would do this borrowing to buy more stock is
Speaker 3: a transaction that's technically a merger. It's a merger with
Speaker 3: like one of his vehicles. Kid, he's like falling directly
Speaker 3: asleep here.
Speaker 2: The problem is, I've read this so many times and
Speaker 2: my eyes glaze over every single time.
Speaker 3: But so I believe it has this thing called a spark. Yes,
Speaker 3: like a speck, only doesn't have money. It's going to
Speaker 3: raise money later, Yeah, don't worry about So he's going
Speaker 3: to go ahead and raise a billion dollars in the
Speaker 3: spark or he won't because like it's backstop by his
Speaker 3: hedge fund that has the money, and he's going to
Speaker 3: use the spark to merge with Universal. And like the
Speaker 3: combined company will list on the New York'stock Exchange, So
Speaker 3: like most of the stock in the combined company will
Speaker 3: be owned by existing Universal shareholders, you know, Pershing squirrel on,
Speaker 3: you know, ten eleven percent of it. That's the transaction.
Speaker 3: But because it involves a merger, he can say things
Speaker 3: like I'm proposing to buy all of Universal, and because
Speaker 3: it involves a merger, he can say I'm proposing to
Speaker 3: buy it for a value of thirty yuros per share,
Speaker 3: even though that's not he's not buying it for thirty
Speaker 3: years per share. Yeah, buying a little bit of that
Speaker 3: twenty two years a share. But because the activist thing,
Speaker 3: like the math on, it pencils out to being worth
Speaker 3: thirty years a share, says him, he can say I'm
Speaker 3: going to buy the whole company at a seventy eight
Speaker 3: percent premium and get people to write that Andy, Yeah, Yeah,
Speaker 3: it's proprilling to buy the company. It's seventy eight percent premium.
Speaker 2: Yeah, And a lot of places did write yeah, or a.
Speaker 3: Version of it, that's the headline. It's a good way
Speaker 3: to get attention for your activism because you send a
Speaker 3: letter being like, I want to buy a little bit
Speaker 3: of stock and I want you to make some changes
Speaker 3: in your capital return strategy. So yeah, everyone says that
Speaker 3: all the time, right, yeah, and then you go, oh,
Speaker 3: it'll be worth a lot of more money and sure whatever.
Speaker 3: But if you say I'm gonna buy it, and then
Speaker 3: it sounds real.
Speaker 2: So I mean the stock surged on this, eighty rs popped.
Speaker 2: There are some very high hurdles to this happening, sure,
Speaker 2: I mean he has to convince two thirds of investors
Speaker 2: to agree. And also there's a certain.
Speaker 3: Thought suggests people like it. You can wave away everything
Speaker 3: else and be like, well, listing in New York it
Speaker 3: is going.
Speaker 2: To be good for the that's the interesting part. I
Speaker 2: mean that makes sense to me. We've seen a lot
Speaker 2: of European companies come to New York or IPO on
Speaker 2: US exchanges. But I didn't realize that Universal Music Group
Speaker 2: UMG had planned to do this but then scrapped it
Speaker 2: just last month. Their plans a list setting market uncertainty,
Speaker 2: which is fair. But I mean.
Speaker 3: Maybe it's yeah, maybe it's nothing.
Speaker 2: But I don't really understand is what he wants to
Speaker 2: sell the stake in Spotify, Like why that would be
Speaker 2: good long term because Spotify has crushed it over the
Speaker 2: last five years or so compared to UMG. Yeah, like
Speaker 2: that seems pretty valuable.
Speaker 3: Sure, but if it seems pretty valuable, you can sell
Speaker 3: it for money now, I know.
Speaker 2: But it might be something you want to hang on to.
Speaker 3: Yeah, but if the market value is that as highly
Speaker 3: or more or more highly than you do, then you
Speaker 3: should sell it now. Also, it's just it's like very
Speaker 3: standard activist playbook to be like, the market never values
Speaker 3: some weird random minority stake at its full value because
Speaker 3: the market is focused on, you know, investing in the
Speaker 3: company's business. If you make the business a simpler story,
Speaker 3: then the market will, you know, describe more value to
Speaker 3: that story. If you can sell a minority stake in
Speaker 3: Spotify for more dollars than like the market describes to
Speaker 3: its value when it's part of a bigger company. So
Speaker 3: I don't know, that's like pretty standard logic. It might
Speaker 3: not be true, but like, if you're sure that Spotify
Speaker 3: is going to continue going up much more than the
Speaker 3: rest of the company, then sure, hang out to it.
Speaker 2: Yeah, anyway, I did want to bring up the French
Speaker 2: billionaire that he has to convince. Sure, I'm so bad
Speaker 2: at French names, so I'm scared to say it. Vincent
Speaker 2: Pulair Does that sound good?
Speaker 3: Sounds good?
Speaker 2: French person's going to write in anyway, he owns more
Speaker 2: than an eighteen percent stake through his family holding company.
Speaker 2: But apparently Ackman said that he spoke to bull Air
Speaker 2: and his investment group and said that they were quote
Speaker 2: intrigued with the.
Speaker 3: Right part of the point of the proposals. So maybe
Speaker 3: intrigued crush him out, you know, if he wants cash
Speaker 3: instead of his stake. But I'm not privy to those negotiations.
Speaker 2: No, that was billionaire to a billionaire, not for us
Speaker 2: to know the ft.
Speaker 3: Today Thursday, I think reported another he's so busy he's
Speaker 3: got going on.
Speaker 2: I know I was wondering if we were going to
Speaker 2: get there.
Speaker 3: Yeah, briefly because I don't really understand it. He's got
Speaker 3: a big let's say hedge fund, it's not really the
Speaker 3: right word for it, but he is a big pot
Speaker 3: of money that he invests in some stocks basically and
Speaker 3: he does the occasional like asymmetric derivatives trade as he
Speaker 3: would say. That makes a lot of money on for instance, COVID,
Speaker 3: and it's in this like series of funds that are
Speaker 3: most prominently is like close end fund in Europe, and
Speaker 3: he's like launching a closed end fund in the US,
Speaker 3: pushing to where USI We've talked about this a lot.
Speaker 3: It keeps being in the process of launching.
Speaker 2: Yes, as a launched, it's going to happen.
Speaker 3: It's gonna happen. But so he's raising like five to
Speaker 3: ten billion dollars for that. He's like Peoing the management
Speaker 3: company is part of that, blah blah blah. But the
Speaker 3: f he reported that he's also in talks three is
Speaker 3: a separate fund. Now only do the like asymmetric toatives.
Speaker 3: So instead of owning like you know, a concentrated portfolio
Speaker 3: of large cap stops and sometimes buying index CDs, oat
Speaker 3: of a pandemic, he would own treasury bills and occasionally
Speaker 3: buy index CDs instead of a pandemic, which okay, yeah sure, yeah,
Speaker 3: like a like sort of like a tele risk hedge fund. Yeah,
Speaker 3: a permanent capitol vehicle.
Speaker 2: Yeah. The ft called it like you know, he's making
Speaker 2: doomsday trades here.
Speaker 3: Yeah. The headline is something like he wants the profit
Speaker 3: from market complacency. Right, He's going to bet against complacency, Yeah,
Speaker 3: as opposed to the rest of the portfolios. Is like
Speaker 3: owning latche caap equities.
Speaker 2: This is something that apparently he has highlighted two investors
Speaker 2: as a way to turbo charge the firm's fee earnings.
Speaker 2: So it does play into the potential IPO here.
Speaker 3: Yeah. Right. The way the IPO works is that he's
Speaker 3: mostly selling shares of this closed infund's mostly selling shares
Speaker 3: of a pot of you know, investments, but he's partially
Speaker 3: selling shares in the management company. And so the more
Speaker 3: assets the management company runs, the more that is worth,
Speaker 3: and therefore the more appealing it is to investors in
Speaker 3: the I p O. Right, So, like, if you're paying
Speaker 3: people to buy your clothes end fund and the currency
Speaker 3: of your management company, then like the more funds you run,
Speaker 3: the better that.
Speaker 2: Is doesn't seem very more in buffet of him. I
Speaker 2: keep getting confused over who Bill Lackman is.
Speaker 3: You know, is he Warren Buffett?
Speaker 2: Or is he a bird?
Speaker 3: Yeah?
Speaker 2: I don't know, Bill Ackman, who are you?
Speaker 3: He's a bird? Don't answer that or do He's also
Speaker 3: like tweeting a lot, But that's a that's a whole
Speaker 3: other story of all.
Speaker 1: The thing he wrote today is that it is not
Speaker 1: quite fair to say that Billlackman runs a portfolio of
Speaker 1: a dozen ish large cap stocks that don't change very much.
Speaker 3: But it's a little bit true, and that's very cool
Speaker 3: if you can do that and make money and be
Speaker 3: edge trying to manage it. Right, You're just like, I'm
Speaker 3: gonna own twelve stocks with the right twelve stocks, and
Speaker 3: I'm not gonna change it that much. I'm just gonna
Speaker 3: kind of hang out here and tweet a lot.
Speaker 2: That's what I would do.
Speaker 3: That's what I would do it. Like that is my
Speaker 3: dream as a money manager, right, Like the people who
Speaker 3: are like, I'm going to like work all day and
Speaker 3: change my portfolio every day so they can capture like
Speaker 3: every incremental piece of alpha. That sounds like a hard job,
Speaker 3: whereas like I'll just pick the red stocks and then.
Speaker 2: Tweet I'll just pick good snack.
Speaker 3: Incredible move. But what I like about this idea of
Speaker 3: the like whatever complacency.
Speaker 2: Doom to day fun.
Speaker 3: So one way to run a doomsday fund and the
Speaker 3: way people run their dooms day funds is basically you
Speaker 3: wake up every day and you buy some pots on
Speaker 3: the S and P. Yeah, and it costs you money,
Speaker 3: and at the end of every year you send your
Speaker 3: investors a statement being like I've lost ten percent of
Speaker 3: your money, and then once every like ten years you're
Speaker 3: like I've made twenty thousand percent of your money and
Speaker 3: they're like, okay, fun. It's like a bad profile, right.
Speaker 3: But like the alternative way to run a doomsday fun
Speaker 3: which is like a little bit what is implied by
Speaker 3: the ft article though I don't have no idea, is
Speaker 3: you take the investors' money put in treasure. But I
Speaker 3: don't do anything. You're in four percent a year, and
Speaker 3: every once in a while you're like, you know what
Speaker 3: next week is doomsday. I'm gonna buy puts on the
Speaker 3: S and P today, And if you're right all the time,
Speaker 3: every time you buy doomsday insurance, it pays off, which
Speaker 3: is like what happened to Acmin in COVID, Like you
Speaker 3: bought like some index CDs twenty seven million dollars. I'm like,
Speaker 3: the next week it paid off like billions of dollars. Right,
Speaker 3: So if you're just perfect at predicting doomsday like next week,
Speaker 3: then like your return profile is like most years you
Speaker 3: just earned treasury bills. In some years you return like
Speaker 3: ten thousand percent. That's a great fund. And the reason
Speaker 3: that no one does that is one, no one's perfect predicting,
Speaker 3: right and too because like you know, you have a
Speaker 3: job and you're like, oh, I'm like charging fees and
Speaker 3: like taking investors' money to protect them from doomsday, And
Speaker 3: so you end up buying a lot of doomsday insurance
Speaker 3: because it's just like what it says on the tin.
Speaker 3: And if you're Bill Ackman and you have the zen
Speaker 3: like repose to just buy twelve stocks and hold them
Speaker 3: and tweet all the time, they're like, maybe you can
Speaker 3: do the doomsday fund the right way, where you just
Speaker 3: don't do anything until it's almost doomsday and then you
Speaker 3: buy insurance and make a lot of money. This is
Speaker 3: like I'm mostly joking suggestion, but I kind of like it.
Speaker 2: No, I fantasize all the time, Like what if I
Speaker 2: wasn't in journalism, what if I had a completely unrelated job,
Speaker 2: what if I was a novelist. Then I dream about
Speaker 2: what my portfolio would be and doing something like that
Speaker 2: sounds really fun, right, Like the best.
Speaker 3: Way to invest is to just buy a stock right
Speaker 3: before it goes up a lot, or buy crash insurance
Speaker 3: right before the market goes down a lot. Yeah, it's
Speaker 3: hard to pull off, both intellectually and as a matter
Speaker 3: of getting antsy. But like Bill, likeman might not get antsy,
Speaker 3: that's true.
Speaker 2: Also very busy man. He's got a lot going on.
Speaker 3: A lot going on.
Speaker 2: He has one, like really big thing going on right now,
Speaker 2: can you guess?
Speaker 3: No, I actually wonder like if you went to him
Speaker 3: and said, what's a big thing you've got going on
Speaker 3: right now? Would he be like fighting the woke mind virus?
Speaker 2: No. I think he'd say something like trying to make
Speaker 2: more people use rock. Really, it'd be one of the things.
Speaker 3: I think it would be something much weirder. God, it
Speaker 3: would be like solving the population crisis.
Speaker 2: That's my second big question. Of the podcast Elon Musk,
Speaker 2: what's your big thing anyway?
Speaker 3: I believe the big thing you were referring to, Yeah,
Speaker 3: is the space, the impending SpaceX slash X.
Speaker 2: I mean, it's factually very big. It's very big. It
Speaker 2: keeps getting bigger, probably.
Speaker 3: Soon, although yeah, they filed confidentially. Everyone says they're looking
Speaker 3: to go in June, although it's not clear that they
Speaker 3: will go in Jane. But yeah, very big, two trillion
Speaker 3: dollars supposedly, and yes, as part of his quest to
Speaker 3: get everyone to use Croc and thus fight the woke
Speaker 3: mind virus.
Speaker 2: Yeah, for sure.
Speaker 3: Your Times reported that is making bankers who want to
Speaker 3: lead the IPO by subscriptions to Kroc for their banks,
Speaker 3: which is like a little frowned upon. But I don't
Speaker 3: know why. It's like impolite. It feels somehow dodgy. Yeah,
Speaker 3: but I kind of respect it. You know, he's the
Speaker 3: CEO of or whatever he is.
Speaker 2: He's not actually I don't think he's sick or whatever.
Speaker 3: He's the owner. Yeah, and he's like making a sale. Yeah,
Speaker 3: you know, like shows up this meaning like, hey, guys,
Speaker 3: you know what's great is groc? You should by Groc. Yeah,
Speaker 3: they're like, okay, well look into him, be like no, no, no,
Speaker 3: by Grock right now.
Speaker 2: And this matters personally that Elon Musk. It also matters
Speaker 2: to SpaceX, and SpaceX now owns XII.
Speaker 3: Okay, so first of all, this company is going to
Speaker 3: go public at one hundred times earnings or a hundred
Speaker 3: times revenue or something. I don't actually know the revenue numbers,
Speaker 3: but like the two trillion dollar evaluation is not closely
Speaker 3: connected to any amount of revenue or income. But you know,
Speaker 3: every little bit helps, and in particular, you know, to
Speaker 3: the extent you are going public not only as a
Speaker 3: rocket company, but as ooh AI everything's AI, you know,
Speaker 3: showing like AI adoption is valuable, even if the AI
Speaker 3: is still a sort of smallest part of the business
Speaker 3: commerci Yeah, and so saying you know, all of these
Speaker 3: big banks there's names are on the cover of the perspective,
Speaker 3: So all these big banks have purchased subscriptions to GROC.
Speaker 2: Some of the banks seems positive.
Speaker 3: I mean not if you have articles being like, oh,
Speaker 3: they only did it because they were forced through, but
Speaker 3: you know, maybe they'll like it.
Speaker 2: Or I was also wondering like after they get the
Speaker 2: IPO over the line. Can they just cancel their subscriptions?
Speaker 3: So One, I'm sure they'll pay for some portion of
Speaker 3: it upfront. Two, maybe they'll like it.
Speaker 2: Maybe it's the best.
Speaker 3: No, because Elon Musk is like a continual source of
Speaker 3: ajata for banks, right, and then fees, you know, and
Speaker 3: so you're always looking to win continued business and you know,
Speaker 3: a million dollars a year for crock or whatever.
Speaker 2: It's fair. Feel maybe it's good.
Speaker 3: Be they like it, Maybe they like it.
Speaker 2: Maybe they will.
Speaker 3: You'd hope that Sam Altonman and Tima Day are reading
Speaker 3: this and being like, I we should do that too.
Speaker 3: So now every bank has to buy the subscriptions every
Speaker 3: that's true.
Speaker 2: Of course, open Ai and Anthropic also potentially going public
Speaker 2: this year.
Speaker 3: Right.
Speaker 2: I love some of the details in this piece from
Speaker 2: the New York Times. Some of the banks have agreed
Speaker 2: to spend tens of millions of dollars on the chatbot.
Speaker 2: But also this is fun. Elon Musk also reportedly asked
Speaker 2: the banks to advertise on X, his social media site
Speaker 2: also owned by SpaceX, but was less adamant about that request.
Speaker 3: Right, which I think makes sense.
Speaker 2: Yeah, he's one, it's not a natural fit.
Speaker 3: It's not a natural fit, right, use my AI because
Speaker 3: it'll help you run your banking business. Advertise on Twitter
Speaker 3: to run your banking like that makes sense. But also
Speaker 3: because you know, like you're selling an IPO and being like, oh,
Speaker 3: our flagship AI product is being adopted by big you know,
Speaker 3: fortune five hundred companies. Is a good pitching. I always
Speaker 3: tell some ads on our cess pool social media. So
Speaker 3: let's have a good pitch catering to IPO investors.
Speaker 2: Yeah, I will say. I mean when it comes to
Speaker 2: all these chatbots, actually getting enterprise customers is like a big,
Speaker 2: big part of it because people individuals use chatbots, but
Speaker 2: it's less common.
Speaker 3: No, enterprise is a big deal. And my impression is
Speaker 3: that Groc has some trouble there. Marketing is like, oh,
Speaker 3: we're making mecha Hitler or whatever.
Speaker 2: That's the thing. Like from what I can I don't
Speaker 2: really use chatbots in general, but I spent a lot
Speaker 2: of time on X, which means I spend a lot
Speaker 2: of time reading Elon Musk's posts on X and everything
Speaker 2: he posts from Groc is like, I don't know, it's
Speaker 2: just like anime girls.
Speaker 3: I could see not like a button down corporate it stuff,
Speaker 3: but they have other marketing channels to corporate clients, like
Speaker 3: forcing them to buy it for the IPEA.
Speaker 2: There you go, twist my arm.
Speaker 3: I love that because you know, I used to be
Speaker 3: an equity capital markets.
Speaker 2: I've heard and how delighted would you be if they
Speaker 2: were like, guys, we have to use CROC.
Speaker 3: I wrote about this. There's so much stupid stuff in
Speaker 3: these pitches, right, there's so much like you know, like
Speaker 3: programs drove an Uber for a year to pitch Uber.
Speaker 3: But also like the one I always come back to
Speaker 3: is when Lululemon went public, every bank sent their teams
Speaker 3: in like yoga pants got to pitch the IPO god,
Speaker 3: and like did that boost Lulemon's revenue like a little bit?
Speaker 3: They had to go out and buy the yoga pants,
Speaker 3: but not materially, not enough to like move the numbers
Speaker 3: in the IPO perspectives, But like how humiliating the banks?
Speaker 2: Humiliation ritual, just a humiliation.
Speaker 3: Whereas when you show up and Elon Musk is like, look,
Speaker 3: you can pitch me, but you gotta spend twenty million
Speaker 3: dollars on rock and I was like, okay, that's like
Speaker 3: it's not humiliating. It's just like transactional. It's very straightforward.
Speaker 3: I like it. Gosh, it makes sense.
Speaker 2: Other possible humiliation.
Speaker 3: There's so much like this. Used to be a real
Speaker 3: big thing. Banks were really into thinking about how they
Speaker 3: could prove to a company is that they loved those companies' products.
Speaker 3: You know, with AI you have some of that, right, Like,
Speaker 3: I'm sure that everyone who shown up the pitch open
Speaker 3: a or anthropic or even I say I on the
Speaker 3: right pa. I was like, well, we made this pitch
Speaker 3: book with chat GPT or Claude or you know, whatever
Speaker 3: it may be. And some days they probably get it wrong.
Speaker 3: We made this with chat GPT and it's like, nope,
Speaker 3: you're pitching anthropic. But I'm sure they'll do that, but
Speaker 3: more direct connection.
Speaker 2: We made Mecha Hitler.
Speaker 3: You have to show up and be like we made
Speaker 3: this pitch book with Crock and he opens and I
Speaker 3: don't know, it's kind of woke. You're like, no, no,
Speaker 3: here's all the slurs.
Speaker 2: Where's the anime?
Speaker 3: I take it back?
Speaker 4: It would be pretty That was fun, you know, it's
Speaker 4: also fun everyone.
Speaker 3: It's been a while since we talked about the reads
Speaker 3: of the ETF markets. I'm going to leave, and.
Speaker 2: Katie is gonna If you are not interested, you can
Speaker 2: leave now for the dozen, the dozen listeners who are
Speaker 2: still with us, Matt, you threw me a bone.
Speaker 3: Can you talking about competition for QQQ?
Speaker 2: And Katy's like, yes, obviously, that's the fastest I've ever
Speaker 2: answered an email.
Speaker 3: I know.
Speaker 2: So this is interesting, So I promise. So the ques QQQ,
Speaker 2: it's investos, NAZAQ one hundred ETF, it's been around since
Speaker 2: nineteen ninety nine, is everywhere.
Speaker 3: Yes, we've talked about why they advertised every which is
Speaker 3: they have too much money.
Speaker 2: But yeah, my eyes just lit up. They might not
Speaker 2: advertise everywhere going forward because their proxy vote passed at
Speaker 2: the end of twenty twenty five, so now they don't
Speaker 2: have to spend as much on marketing.
Speaker 3: I feel like I still see them on the trend, but.
Speaker 2: Well, they probably made commitments for twenty twenty six. You know.
Speaker 3: Anyway I'm getting anyway, we're.
Speaker 2: Still talking about the cues anyway. So NASAC and the
Speaker 2: Cues have had this long standing relationship. NASAK has been
Speaker 2: historically very selective about who they license out the NASAQ
Speaker 2: one hundred two and at least in the US as
Speaker 2: of right now, there's only two ETFs that purely track
Speaker 2: the NASAQ one hundred. You can there's other ETFs that
Speaker 2: like add derivative income options overlay stuff to it, But
Speaker 2: in terms of the pure NASAQ one hundred, there's just
Speaker 2: two Invesco ETFs in the US. Outside in a Mia
Speaker 2: there are NASTAQ one hundred ETFs. But anyway, Matt is
Speaker 2: slowly inching towards the DOR. What's interesting is that Black
Speaker 2: Rocks six am on Monday filed for a Nasdaq one
Speaker 2: hundred ETF. Mat what is going on, h you know,
Speaker 2: it's crazier. Tuesday in the morning, State Street filed for
Speaker 2: NASAQ one hundred ETF. I know, it's nuts. So apparently
Speaker 2: Nasdaq is feeling a little bit, you know, more open,
Speaker 2: and Invesco shares, I mean, at least on Monday they
Speaker 2: went straight down. I think they closed five percent lower
Speaker 2: or something, because they might have some serious competition here.
Speaker 2: I mean, then cues have been a cash cow and
Speaker 2: Invesco just figured out how to open the piggybank and
Speaker 2: actually get some of that windfall since they have to
Speaker 2: spend less on marketing now. But to have black rocks
Speaker 2: show up months later. Traders reacted appropriately here.
Speaker 3: So I really love that index licensing is such a thing. Yeah,
Speaker 3: because if I in my personal account wanted to track
Speaker 3: the NASAK one hundred index without buying any ETF that
Speaker 3: licenses that index, it could probably do okay, Like it's
Speaker 3: kind of a public knowledge.
Speaker 2: But if you went out and launched a product.
Speaker 3: If I launched a product, right and I called it
Speaker 3: the like one hundred and three tech stock index, that
Speaker 3: would get less traction than the Nasdaq one hundred, We'll
Speaker 3: call it.
Speaker 2: The matt Levine At least.
Speaker 3: It is kind of weird to me that, like the
Speaker 3: licensing of the actual official indexes is so valuable because
Speaker 3: like you can recreate much of that performance, and there
Speaker 3: are some pan cardial role that's on indexes sometimes. Yeah,
Speaker 3: but least the nas like one hundred has enough like
Speaker 3: cachet that you really do need to license it.
Speaker 2: It's funny to talk about this because as I was
Speaker 2: writing this article, I was talking to my husband about
Speaker 2: it very excitedly, because this is huge. He's a he's
Speaker 2: a very nice man, but he raised the same question.
Speaker 2: He was like, why Googles you like a sleep mask,
Speaker 2: but he was like, why can't I just go and
Speaker 2: buy all the stocks he can? I was like, you
Speaker 2: just you can't, Joe, Okay, you can't. And probably the
Speaker 2: answer is that NASAC would sue you no, if you
Speaker 2: launched a product, fine, right, right, I'd sue you.
Speaker 3: Right. You'd have to be very careful to not use
Speaker 3: words like Nasdaq or one hundred of the product.
Speaker 2: It is interesting and fun to think about why now
Speaker 2: you know, why is NASDAK Now.
Speaker 3: The answer SpaceX? I don't know.
Speaker 2: I mean, that's one of the big theories out there
Speaker 2: is that if SpaceX does go with Nasdaq as the
Speaker 2: change that they list on, and if they fast track
Speaker 2: SpaceX into the NASAQ one hundred, NASAK is going to
Speaker 2: have a huge competitive advantage here over other.
Speaker 3: Big period where you know, the NAZA one hundred is
Speaker 3: a big deal, but like S ANDB five hundred is
Speaker 3: the main like indix that people index.
Speaker 2: Two, but they're not mutually exclusive.
Speaker 3: Well they are in product terms, like I.
Speaker 2: Know, but I'm saying, like.
Speaker 3: Right, you can be in both indexes, but like crucially, yeah,
Speaker 3: for some period of months, it seems like SpaceX will
Speaker 3: be in the NAZAK one hundred and not in the SMP.
Speaker 4: Right.
Speaker 3: Yes, it seems like NASDAC has changed its rules to
Speaker 3: fast track listing SpaceX, So that's shortly, you know, weeks
Speaker 3: after it goes public, it'll be in the NAZAK one hundred,
Speaker 3: and the SMP moves more slowly, So there will be
Speaker 3: some period of months where, yes, if you want space
Speaker 3: X and your index fund because you're buying index funds
Speaker 3: that like deep down you're an active stock picker or
Speaker 3: at least like that name, then you have to buy
Speaker 3: the NAZAQ one hundred one.
Speaker 2: Yeah, that could be a theory.
Speaker 3: I think it's break it theory. And then it's you know,
Speaker 3: it's like also open AI and all of the big
Speaker 3: tech companies. You know, the NAZAC rules will allow them
Speaker 3: to fast track into the Nasdaq index and SMP might
Speaker 3: move more slowly, and so you have this period where
Speaker 3: like the big tech IPOs that everyone is most interested
Speaker 3: in will come first to the NAZAK one hundred if
Speaker 3: all breaks now the next way, I.
Speaker 2: Was also wondering if it connects to the proxy vote somehow.
Speaker 2: I mean, under the new fee revenue breakdown of the queues,
Speaker 2: NASAC is still getting paid and I think that they're
Speaker 2: getting paid the same amount, So maybe that doesn't quite connect.
Speaker 2: But obviously Invesco is going to theoretically be marketing the
Speaker 2: cues less. Yeah, so maybe that could be it as well.
Speaker 2: But maybe it's some delightful combination. You know. See, who
Speaker 2: wasn't this fun? Yeah? What I'm waiting for. What I
Speaker 2: can't wait to see is that we haven't had fees
Speaker 2: listed on any of these filings yet. They're very preliminary
Speaker 2: filings from both What do people pay.
Speaker 3: For neke licensing like a basis punt?
Speaker 2: It left depends on the index you know, the cues
Speaker 2: right now, they were charging twenty basis points. Then post
Speaker 2: privacy charging yes, yes, now that fee is eighteen basis points.
Speaker 2: They have qqq M, which is fifteen basis points. And
Speaker 2: we're talking about an index, like an index tracking ETF.
Speaker 2: That's pretty it's pretty expensive. So very curious to see
Speaker 2: if Blackrock comes out with a three basis point productor I.
Speaker 3: Assume how much of that fifteen or twenty basis prints
Speaker 3: is is that's not kidding.
Speaker 2: I believe when it was twenty basis points, it was
Speaker 2: something close to like seven or eight basis points.
Speaker 3: That's a lot.
Speaker 2: It is a lot, I know. So we'll say they
Speaker 2: could do something. This is something that black Rock does occasionally,
Speaker 2: is you know, the way of fees for the first
Speaker 2: year or something, just accumulate a bunch of scale and.
Speaker 3: Then they go, do you think they're paying now seven
Speaker 3: basics points?
Speaker 2: That's what I'm so curious to find out. I want
Speaker 2: to know what if their fee is like ten basis points,
Speaker 2: then you have to assume that, okay, And as I
Speaker 2: still yeah, I'm also interested to see, like if a
Speaker 2: Vanguard files for Nazaq one hundred ETF that would be
Speaker 2: fun for me and.
Speaker 3: Or for like a big tech ninety eighty ts.
Speaker 2: Yeah, yeah, man, Thank you to everyone who's still listening.
Speaker 2: This is really great for me.
Speaker 3: I feel we need to have like a reward.
Speaker 2: Tell us right.
Speaker 3: And that was the Money Stuff Podcast.
Speaker 2: I'm Matt Levine and I'm Katie Greifeld.
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Speaker 3: The Money Stuff Podcast is produced by Anamasarakis, Moses Onam
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