1 00:00:02,759 --> 00:00:10,879 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Wait, tell me about 2 00:00:10,880 --> 00:00:13,040 Speaker 1: the animal communicator. Have we taled about on the podcast 3 00:00:13,080 --> 00:00:14,120 Speaker 1: or just after the podcast? 4 00:00:14,360 --> 00:00:17,119 Speaker 2: Probably just like a real life he. 5 00:00:17,200 --> 00:00:22,000 Speaker 1: Was going to animal communicator, Yes, to explain to her animals. Yes, 6 00:00:22,400 --> 00:00:24,440 Speaker 1: that she's having a child. 7 00:00:24,560 --> 00:00:24,840 Speaker 3: Yes. 8 00:00:25,280 --> 00:00:28,920 Speaker 1: So it was like Katie and this person and her 9 00:00:29,000 --> 00:00:31,040 Speaker 1: horse and her cat sitting around in a circle and 10 00:00:31,080 --> 00:00:33,120 Speaker 1: my husband holding paws and hoofs. 11 00:00:33,880 --> 00:00:38,600 Speaker 2: My very patient husband was also there. It was over FaceTime. 12 00:00:39,040 --> 00:00:42,640 Speaker 2: But I do want to no, I do want to 13 00:00:42,680 --> 00:00:44,839 Speaker 2: point out that this woman has met all of my 14 00:00:44,920 --> 00:00:47,680 Speaker 2: animals so separately. Maybe that makes it a little bit 15 00:00:47,680 --> 00:00:52,680 Speaker 2: more legit. Most interesting headline from the thirty minute session, 16 00:00:52,720 --> 00:00:55,920 Speaker 2: which costs seventy five dollars, which was a great way 17 00:00:56,640 --> 00:00:59,640 Speaker 2: to spend seventy five dollars, I would recommend it. Apparently 18 00:00:59,720 --> 00:01:02,840 Speaker 2: the cat didn't know I was pregnant, okay, and so 19 00:01:03,120 --> 00:01:06,080 Speaker 2: we told him that, and the animal communicator said that 20 00:01:06,560 --> 00:01:10,160 Speaker 2: he was relieved because he thought I was sick, Like 21 00:01:10,240 --> 00:01:10,840 Speaker 2: you thought. 22 00:01:10,600 --> 00:01:11,880 Speaker 4: I'd just on the call. 23 00:01:11,920 --> 00:01:14,520 Speaker 1: You're sitting on zoom with the cat sitting next to you, 24 00:01:14,959 --> 00:01:18,200 Speaker 1: the little headphones on, yeah, and you're like you turn 25 00:01:18,280 --> 00:01:19,959 Speaker 1: to him and you're like, Keatrick. 26 00:01:19,880 --> 00:01:22,600 Speaker 2: Well, you see, she establishes a connection with the cat. 27 00:01:22,840 --> 00:01:25,560 Speaker 2: You know, she sort of goes into the space where 28 00:01:26,200 --> 00:01:30,240 Speaker 2: her and the cat are communicating. So I thought that 29 00:01:30,319 --> 00:01:31,240 Speaker 2: was pretty interesting. 30 00:01:31,560 --> 00:01:34,640 Speaker 1: Okay, so he's really, he's really, he feels good. He 31 00:01:34,959 --> 00:01:36,039 Speaker 1: understands the situation. 32 00:01:36,120 --> 00:01:39,800 Speaker 2: Now. Yes, and the horse, the horse apparently was psyched. 33 00:01:39,800 --> 00:01:40,800 Speaker 2: His name is Gus. 34 00:01:41,360 --> 00:01:42,399 Speaker 4: He wasn't on the zoom call. 35 00:01:42,480 --> 00:01:45,959 Speaker 2: He wasn't on the zoom call. By her telling, Gus 36 00:01:45,959 --> 00:01:48,520 Speaker 2: has known since day one that I was pregnant and. 37 00:01:48,440 --> 00:01:52,360 Speaker 1: She knows that. Did she separately chat with Gus or yes, 38 00:01:52,520 --> 00:01:54,840 Speaker 1: this is just like astral plan can She. 39 00:01:55,000 --> 00:01:57,560 Speaker 2: Like says goodbye to Katrick, and then she goes back 40 00:01:57,560 --> 00:02:02,560 Speaker 2: into the headspace, connects with the horse, but not on zoom. No, 41 00:02:03,120 --> 00:02:05,880 Speaker 2: just yeah, exactly, you've got it. 42 00:02:05,960 --> 00:02:06,600 Speaker 4: You've got it. 43 00:02:07,200 --> 00:02:10,280 Speaker 2: Apparently the horse is psyched, and he's like feeling very proud. 44 00:02:10,919 --> 00:02:12,640 Speaker 1: This is totally reliable information. 45 00:02:13,240 --> 00:02:16,720 Speaker 2: Again, in the same way that we were talking about 46 00:02:16,960 --> 00:02:20,240 Speaker 2: ETFs as performance art. That's sort of how you have 47 00:02:20,280 --> 00:02:24,200 Speaker 2: to go into this, like I'm just here for entertainment. 48 00:02:24,480 --> 00:02:27,200 Speaker 4: You're here, I believe it right of course, full throat. 49 00:02:27,880 --> 00:02:29,400 Speaker 1: Okay, why is the horse proud? 50 00:02:29,600 --> 00:02:34,480 Speaker 2: Apparently he just likes babies. He really likes me, he's. 51 00:02:33,840 --> 00:02:35,520 Speaker 4: Considering invested in your success. 52 00:02:35,600 --> 00:02:37,480 Speaker 2: And let me again say my husband was sitting right 53 00:02:37,560 --> 00:02:39,760 Speaker 2: next to me, my very patient husband. Apparently the horse 54 00:02:39,840 --> 00:02:42,680 Speaker 2: was like, he's approaching this is like, this is our baby, 55 00:02:43,160 --> 00:02:46,480 Speaker 2: and he wants to use a baby as soon as possible, 56 00:02:46,600 --> 00:02:51,400 Speaker 2: Like it's the horse's baby. Some of this we might 57 00:02:51,480 --> 00:02:52,600 Speaker 2: have to God, because. 58 00:02:52,360 --> 00:02:58,840 Speaker 1: It's no, no, no, that we have twenty more minutes 59 00:02:58,880 --> 00:02:59,120 Speaker 1: on this. 60 00:02:59,360 --> 00:03:02,760 Speaker 2: Knowing my two animals, it definitely tracks with both of 61 00:03:02,800 --> 00:03:06,960 Speaker 2: their personalities. Gus is probably much more outwardly friendly than 62 00:03:07,040 --> 00:03:09,320 Speaker 2: my cat. My parent likes two people and that's me 63 00:03:09,360 --> 00:03:09,919 Speaker 2: and my husband. 64 00:03:10,160 --> 00:03:14,000 Speaker 1: Right, this is what we call cold reading. Yeah, the 65 00:03:14,040 --> 00:03:16,600 Speaker 1: animal psychic is like, this is an outgoing horse, This 66 00:03:16,639 --> 00:03:17,440 Speaker 1: is a nervous cat. 67 00:03:17,760 --> 00:03:20,800 Speaker 2: Yeah, yeah, but I did think it was endearing that. 68 00:03:21,400 --> 00:03:24,440 Speaker 2: Apparently the cat just thought I was getting like worse 69 00:03:24,480 --> 00:03:27,360 Speaker 2: and worse as the months were on, like less and 70 00:03:27,440 --> 00:03:29,840 Speaker 2: less mobile, and maybe he didn't have that much longer 71 00:03:29,919 --> 00:03:30,360 Speaker 2: left with me. 72 00:03:31,360 --> 00:03:33,040 Speaker 1: So we're going to check in in like seven months. 73 00:03:33,200 --> 00:03:34,560 Speaker 2: Yeah, we'll bring her on. 74 00:03:34,720 --> 00:03:38,040 Speaker 1: We'll get a sense of like, was the horse proud? 75 00:03:38,440 --> 00:03:39,600 Speaker 1: Proudly look at it. 76 00:03:40,800 --> 00:03:44,760 Speaker 2: Yeah, right, perhaps trot about right, we'll see right. 77 00:03:45,120 --> 00:03:47,280 Speaker 1: Right, Well, we'll get a sense of whether this was 78 00:03:47,640 --> 00:03:50,040 Speaker 1: entirely accurate information that you got from the horse psychic. 79 00:03:50,160 --> 00:03:51,400 Speaker 2: We will amazing. 80 00:03:51,680 --> 00:03:52,760 Speaker 4: Yeah, I really. 81 00:03:54,880 --> 00:03:56,960 Speaker 2: That is this podcast. It was so good. 82 00:03:57,240 --> 00:03:58,960 Speaker 1: Yeah, it's all that hell from here. 83 00:03:59,120 --> 00:04:00,320 Speaker 2: Yeah. 84 00:04:00,720 --> 00:04:03,080 Speaker 1: Hello, and welcome to the Money Stuff Podcast. You're a 85 00:04:03,120 --> 00:04:07,160 Speaker 1: weekly podcast where we talk about stuff related to money. 86 00:04:08,040 --> 00:04:10,040 Speaker 1: I'm Matt Levine and I write the Money Stuff column 87 00:04:10,040 --> 00:04:10,960 Speaker 1: for Bloomberg Opinion. 88 00:04:11,720 --> 00:04:14,160 Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and 89 00:04:14,200 --> 00:04:15,640 Speaker 2: an anchor for Bloomberg Television. 90 00:04:25,640 --> 00:04:27,520 Speaker 1: I guess we have to just get right into the 91 00:04:27,520 --> 00:04:28,680 Speaker 1: sportscambling ETF. 92 00:04:28,839 --> 00:04:31,400 Speaker 4: Yeah, which is like my right, Well, I. 93 00:04:31,360 --> 00:04:33,560 Speaker 2: Just want the audience to know I think they do that. 94 00:04:33,640 --> 00:04:36,159 Speaker 2: This is your idea. You want to start off strong 95 00:04:36,200 --> 00:04:36,960 Speaker 2: with ETFs. 96 00:04:37,160 --> 00:04:40,800 Speaker 1: You're misunderstanding, Okay, I don't care about ETFs. I do 97 00:04:40,839 --> 00:04:44,280 Speaker 1: care about it. I've said this before, like the ETF 98 00:04:44,320 --> 00:04:47,400 Speaker 1: is the modern way to like package any sort of bet. 99 00:04:47,640 --> 00:04:50,040 Speaker 1: So it's like yeah, sure, Like in the olden days, 100 00:04:50,080 --> 00:04:52,120 Speaker 1: it was like the bet that they were pitching to 101 00:04:52,120 --> 00:04:53,919 Speaker 1: you is like by the S and P five hundred, 102 00:04:53,960 --> 00:04:55,839 Speaker 1: so like their S and P five hundred nextense. But 103 00:04:55,920 --> 00:04:58,120 Speaker 1: now there's like anything you can think of, like by 104 00:04:58,240 --> 00:05:02,640 Speaker 1: right strategies and like long tesla short forward all these things. 105 00:05:02,800 --> 00:05:04,200 Speaker 2: Any fleeting emotion you might. 106 00:05:04,080 --> 00:05:07,120 Speaker 1: Have, anything, any idea you might have is packaged into 107 00:05:07,120 --> 00:05:11,560 Speaker 1: a bet that is called an ETF. Because an ETF 108 00:05:11,800 --> 00:05:14,440 Speaker 1: has some good properties which I will now enumerate for you. 109 00:05:14,520 --> 00:05:18,120 Speaker 1: One you can buy in your brokerage account. You can 110 00:05:18,160 --> 00:05:20,480 Speaker 1: buy in your retirement account, like if you have like 111 00:05:20,520 --> 00:05:23,719 Speaker 1: an IR kind of yeah, kind of. It's like it's 112 00:05:23,760 --> 00:05:27,200 Speaker 1: just like a very good package to sell the retail investors. 113 00:05:27,200 --> 00:05:28,960 Speaker 1: There are other ways to package these ideas, I mean 114 00:05:29,000 --> 00:05:32,120 Speaker 1: self structured notes, but like the most general use retail 115 00:05:32,160 --> 00:05:40,960 Speaker 1: investor package is an ETF. And obviously now sports bets 116 00:05:41,000 --> 00:05:43,600 Speaker 1: have come to financial markets, right Calshy and polymarket are 117 00:05:43,720 --> 00:05:49,000 Speaker 1: sports betting sites that everyone pretends their financial institutions. And 118 00:05:49,040 --> 00:05:51,960 Speaker 1: so now there's going to be a sports gambling ETF. 119 00:05:52,360 --> 00:05:55,440 Speaker 1: It's called the Subversive All Seasons Sports ETF. They will 120 00:05:55,520 --> 00:05:58,800 Speaker 1: hire a professional gambler who will make sports bets on 121 00:05:58,960 --> 00:06:01,600 Speaker 1: calci and only wrapped into an ETF, and you can 122 00:06:01,600 --> 00:06:02,640 Speaker 1: buy shares in the ETF. 123 00:06:03,160 --> 00:06:04,240 Speaker 2: It's just a filing. 124 00:06:04,360 --> 00:06:06,760 Speaker 1: So we've talked about this. The SEC are meditating on. 125 00:06:07,640 --> 00:06:09,600 Speaker 1: I think they've called this something like novel ETFs. 126 00:06:09,680 --> 00:06:10,440 Speaker 4: Yeah you mean sports. 127 00:06:11,040 --> 00:06:14,200 Speaker 1: Yeah, like weird like leverage, single style, all the all 128 00:06:14,240 --> 00:06:16,000 Speaker 1: the ETFs that are not as some people have hundred 129 00:06:16,040 --> 00:06:18,680 Speaker 1: funds that they're like, how should we handle these things? 130 00:06:19,120 --> 00:06:22,520 Speaker 1: And obviously one big aspect of that is prediction markets, 131 00:06:22,880 --> 00:06:25,960 Speaker 1: by which I mean sports gamdling ETFs. And so they did, 132 00:06:26,000 --> 00:06:28,120 Speaker 1: and we've talked about this. They opened it up for comments, 133 00:06:28,720 --> 00:06:33,440 Speaker 1: and I wrote a column about the sports gambling ETF 134 00:06:34,120 --> 00:06:36,640 Speaker 1: in which I said, consider this my comment for the 135 00:06:36,640 --> 00:06:39,159 Speaker 1: ETF's comment file. Someone actually filed it with the SEC, 136 00:06:39,320 --> 00:06:42,520 Speaker 1: so it's now on the SEC's comment file, like a 137 00:06:42,680 --> 00:06:45,080 Speaker 1: comment from Matt Levine. I didn't file it, but congratu. 138 00:06:45,880 --> 00:06:49,479 Speaker 2: Yeah, so we have seen prediction markets. 139 00:06:49,520 --> 00:06:51,560 Speaker 1: I'm probably going to be cited in the decision they. 140 00:06:53,120 --> 00:06:53,400 Speaker 3: I don't know. 141 00:06:54,440 --> 00:06:56,840 Speaker 2: I would love that for you. There's been prediction market 142 00:06:56,880 --> 00:06:59,080 Speaker 2: ETF filings, like for elections and stuff. This is the 143 00:06:59,080 --> 00:07:01,360 Speaker 2: first sports specific. 144 00:07:01,800 --> 00:07:03,560 Speaker 1: It's also a little different from the other ones. The 145 00:07:03,560 --> 00:07:04,440 Speaker 1: election ones. 146 00:07:04,240 --> 00:07:06,360 Speaker 2: Are those are more binary. 147 00:07:06,480 --> 00:07:09,120 Speaker 1: Yeah, they're time limited, so their binary they're like you 148 00:07:09,200 --> 00:07:12,000 Speaker 1: buy shares in the like Republicans win ETF, and then 149 00:07:12,000 --> 00:07:14,080 Speaker 1: if the Republicans win, you like double your money or whatever. 150 00:07:14,120 --> 00:07:16,040 Speaker 1: And if the Republicans lose, you like got a zero, right, 151 00:07:16,080 --> 00:07:19,160 Speaker 1: So the ETF has a finite life and then it ends, right. 152 00:07:19,440 --> 00:07:24,000 Speaker 1: This one is I think designed to solve the problem 153 00:07:24,080 --> 00:07:26,040 Speaker 1: of like, if you're an ETF manager, you don't want 154 00:07:26,040 --> 00:07:28,160 Speaker 1: it to end. So this is like it's rolling, like 155 00:07:28,200 --> 00:07:30,480 Speaker 1: they make bets and if they win, they make more 156 00:07:30,480 --> 00:07:33,720 Speaker 1: bets and they hopefully make more money than they lose, 157 00:07:33,720 --> 00:07:36,120 Speaker 1: and they keep the ETF around forever. Yeah, or that's 158 00:07:36,160 --> 00:07:40,200 Speaker 1: the idea. And when I first heard that, I was like, oh, yeah, 159 00:07:40,200 --> 00:07:41,520 Speaker 1: that makes sense, like you want to keep the ETF 160 00:07:41,520 --> 00:07:43,480 Speaker 1: around forever. But now I'm not so sure. Like I 161 00:07:43,520 --> 00:07:46,800 Speaker 1: wrote about this, like they should offer like the weekly 162 00:07:46,960 --> 00:07:48,960 Speaker 1: like chats win ETF. 163 00:07:48,680 --> 00:07:50,880 Speaker 2: Like what's the hot game of the week, right, and 164 00:07:50,960 --> 00:07:51,680 Speaker 2: like if it. 165 00:07:51,640 --> 00:07:53,320 Speaker 1: Goes to zero, it goes to zero, and you want 166 00:07:53,400 --> 00:07:55,760 Speaker 1: you your ETF the next day, and if it wins 167 00:07:55,760 --> 00:07:57,360 Speaker 1: then like yeah, people take their money up. 168 00:07:57,520 --> 00:08:01,280 Speaker 2: Yeah, So you wrote about this also, Athanasio, Sarah Fagas 169 00:08:01,280 --> 00:08:04,040 Speaker 2: from Bloomberg Intelligence art about this and the title of 170 00:08:04,080 --> 00:08:06,400 Speaker 2: his note was just what's the fun in a prediction 171 00:08:06,480 --> 00:08:09,240 Speaker 2: market ETF? And he's basically making the same point that 172 00:08:09,280 --> 00:08:12,440 Speaker 2: I think you did that if someone else is placing 173 00:08:12,480 --> 00:08:16,000 Speaker 2: the bets, it's less fun, like you're missing the points. 174 00:08:16,040 --> 00:08:18,240 Speaker 1: Its very fun for me as a person who has 175 00:08:18,240 --> 00:08:20,320 Speaker 1: been predicting sports gambling ETFs. It's not that fun for 176 00:08:20,360 --> 00:08:21,160 Speaker 1: sports gamblers. 177 00:08:21,240 --> 00:08:24,760 Speaker 2: No, you're buying like a diversified portfolio of bets placed 178 00:08:24,760 --> 00:08:25,480 Speaker 2: by someone else. 179 00:08:25,840 --> 00:08:27,880 Speaker 1: One thing I'm not really clear on is like I 180 00:08:28,160 --> 00:08:30,760 Speaker 1: like actively managed ETFs have a range of like how 181 00:08:30,800 --> 00:08:36,120 Speaker 1: they disclose their positions, but like, clearly, as a marketing matter, 182 00:08:36,559 --> 00:08:41,040 Speaker 1: you would want to disclose and hype your positions in 183 00:08:41,040 --> 00:08:43,320 Speaker 1: the CTF like you'd want to send your shareholders like 184 00:08:43,360 --> 00:08:45,600 Speaker 1: a daily like here are the games you should be watching, 185 00:08:45,640 --> 00:08:47,680 Speaker 1: and here's how we're betting right, just so they like 186 00:08:48,800 --> 00:08:50,920 Speaker 1: have an emotional investment in the bets that you have 187 00:08:51,000 --> 00:08:51,920 Speaker 1: made without their input. 188 00:08:52,480 --> 00:08:55,360 Speaker 2: I think you can do that to an extend, can 189 00:08:55,440 --> 00:08:57,040 Speaker 2: do it have to be clever. 190 00:08:58,080 --> 00:09:03,240 Speaker 1: I think some active ETF managers would prefer to not 191 00:09:03,360 --> 00:09:06,319 Speaker 1: disclose their positions in real time because then they shouldn't 192 00:09:06,559 --> 00:09:09,120 Speaker 1: like stock traders. But like these people are not stock traders. 193 00:09:09,200 --> 00:09:12,120 Speaker 1: These people are wells. 194 00:09:12,600 --> 00:09:16,000 Speaker 2: On the topic of active ETFs, I was thinking about this, like, again, 195 00:09:16,040 --> 00:09:21,000 Speaker 2: you're outsourcing your picks to someone else, a professional gambler, right, which. 196 00:09:20,840 --> 00:09:22,840 Speaker 1: Is a financial decision. It's probably you know, you probably 197 00:09:22,880 --> 00:09:24,840 Speaker 1: do better with a professional gambler than with your own 198 00:09:24,960 --> 00:09:28,240 Speaker 1: like erectional biases, but that's not why you're a sports. 199 00:09:27,920 --> 00:09:30,800 Speaker 2: But but you think about like active management within the 200 00:09:30,840 --> 00:09:33,480 Speaker 2: ETF world. I mean, you do have some old school 201 00:09:33,520 --> 00:09:36,360 Speaker 2: stock pickers, but that is very much not in fashion 202 00:09:36,440 --> 00:09:40,200 Speaker 2: right now, all of me. But like the active boom 203 00:09:40,240 --> 00:09:42,560 Speaker 2: within the ETF rapper, it's like, okay, either it's like 204 00:09:43,120 --> 00:09:47,480 Speaker 2: systematic and defined outcome strategies or it's the exact other end, 205 00:09:47,520 --> 00:09:50,600 Speaker 2: it's leverage single stock bets. Like there's not a lot 206 00:09:50,640 --> 00:09:53,600 Speaker 2: of money to go around for someone else to like 207 00:09:54,040 --> 00:09:56,679 Speaker 2: put together a portfolio for you. And I feel like 208 00:09:56,800 --> 00:10:01,480 Speaker 2: these this ETF and things like it probably run the 209 00:10:01,559 --> 00:10:04,120 Speaker 2: risk of also struggling to find an audience. 210 00:10:04,520 --> 00:10:06,120 Speaker 1: Yeah, I agree. I think that there's a good chance 211 00:10:06,120 --> 00:10:07,800 Speaker 1: that all of this is just fake and I have 212 00:10:07,880 --> 00:10:10,400 Speaker 1: willed it into existence by joking bet sports gambling ETFs, 213 00:10:10,440 --> 00:10:12,200 Speaker 1: and they will never actually be a sports gambling ETF 214 00:10:12,240 --> 00:10:14,959 Speaker 1: and the sacals I know or like investors will say know. 215 00:10:15,520 --> 00:10:18,319 Speaker 1: But like, if you imagined in five years there was 216 00:10:18,320 --> 00:10:20,800 Speaker 1: a flourishing sports gambling ETF industry, I think it would 217 00:10:20,840 --> 00:10:25,079 Speaker 1: look like what you just said. There would be systematic strategies, 218 00:10:25,080 --> 00:10:26,559 Speaker 1: which I don't know quite what that looks like, but 219 00:10:26,600 --> 00:10:28,640 Speaker 1: I think we've talked about one on this podcast, which 220 00:10:28,679 --> 00:10:32,559 Speaker 1: is like if you bet heavy favorites in college football 221 00:10:32,600 --> 00:10:35,760 Speaker 1: that appears to have positive expected returns, Yeah, because nobody 222 00:10:35,800 --> 00:10:37,959 Speaker 1: likes the best heavy favorites and so you get some 223 00:10:38,120 --> 00:10:41,400 Speaker 1: good odds. This is not gambling advice. And then on 224 00:10:41,400 --> 00:10:43,440 Speaker 1: the other end, you'll have like leverage single stock, which 225 00:10:43,480 --> 00:10:47,200 Speaker 1: is like just like the Mets win ATF where if 226 00:10:47,400 --> 00:10:49,599 Speaker 1: every day at either doubles or goes to zero, and 227 00:10:49,640 --> 00:10:51,480 Speaker 1: then you put your money in the next day, this. 228 00:10:51,360 --> 00:10:54,640 Speaker 2: Will exist for a very finite moment in time. The 229 00:10:54,720 --> 00:10:56,520 Speaker 2: CTF or like it. 230 00:10:56,559 --> 00:10:58,880 Speaker 1: Exists the next day they bet ninety nine percent of 231 00:10:58,920 --> 00:11:00,679 Speaker 1: the money and then like you know, if they lose, 232 00:11:00,720 --> 00:11:02,240 Speaker 1: like there's a little bit of money in the pot, 233 00:11:02,240 --> 00:11:05,080 Speaker 1: but like, yeah, you basically have to reapt to to 234 00:11:05,120 --> 00:11:09,199 Speaker 1: bet again. Yeah, I think the single sports bet ETF, 235 00:11:09,520 --> 00:11:11,400 Speaker 1: the leverage single sports bett EF. 236 00:11:11,760 --> 00:11:14,040 Speaker 2: I'm getting like a little bit excited. 237 00:11:13,800 --> 00:11:16,640 Speaker 1: Don't you, like, like, like what else is there? 238 00:11:17,160 --> 00:11:19,320 Speaker 2: Well, now I'm about to like again clock out for 239 00:11:19,360 --> 00:11:22,000 Speaker 2: six months. We've talked about this before. I'm so excited 240 00:11:22,040 --> 00:11:24,120 Speaker 2: to see what the world looks like when I come back, 241 00:11:24,160 --> 00:11:26,160 Speaker 2: and maybe we'll be further along that timeline. 242 00:11:26,200 --> 00:11:27,920 Speaker 1: I'm a little worried. I feel like the column that 243 00:11:27,960 --> 00:11:31,640 Speaker 1: I wrote was not explicitly anti sports scandling ETF, but 244 00:11:31,920 --> 00:11:34,280 Speaker 1: was like a little bit implicitly anti sports scandling et. 245 00:11:34,520 --> 00:11:38,240 Speaker 1: I'd be sad if like my column and the SEC 246 00:11:38,280 --> 00:11:43,000 Speaker 1: comment file is what kills sports gamling et comment to 247 00:11:43,080 --> 00:11:48,120 Speaker 1: be clear, well, because like they're bad as like you know, 248 00:11:48,280 --> 00:11:52,080 Speaker 1: for the world, but like for me, yeah, for comedy, 249 00:11:52,600 --> 00:11:53,959 Speaker 1: for this podcast. 250 00:11:53,559 --> 00:11:55,760 Speaker 2: It's like, do you think about yourself for the greater good? 251 00:11:56,080 --> 00:12:00,640 Speaker 1: The problem is that like my SEC comment sort of 252 00:12:00,679 --> 00:12:03,920 Speaker 1: directing towards of the greater good and like for me 253 00:12:04,000 --> 00:12:05,760 Speaker 1: to file an additional comment being like, but I think 254 00:12:05,760 --> 00:12:09,719 Speaker 1: it would be funny if you approve these Wait wait, 255 00:12:26,160 --> 00:12:27,320 Speaker 1: I'm talking about the other. 256 00:12:29,559 --> 00:12:29,880 Speaker 2: Career. 257 00:12:30,320 --> 00:12:30,960 Speaker 1: It's exciting. 258 00:12:31,120 --> 00:12:34,480 Speaker 2: Yeah, I feel like I proposed this topic a few 259 00:12:34,520 --> 00:12:37,880 Speaker 2: weeks ago, and you said that's boring because here we 260 00:12:37,960 --> 00:12:39,000 Speaker 2: are you propose. 261 00:12:38,800 --> 00:12:44,440 Speaker 1: Like the South Korean like regulators are sad about levers ets. Okay, 262 00:12:44,480 --> 00:12:47,839 Speaker 1: but now they have expressed their sadness by like sort 263 00:12:47,840 --> 00:12:48,560 Speaker 1: of banning them. 264 00:12:48,679 --> 00:12:52,880 Speaker 2: They actually did something which is cool. So late in June, 265 00:12:53,280 --> 00:12:57,600 Speaker 2: South Korean regulators, as Matt said, we're enumerting their regrets. 266 00:12:57,640 --> 00:13:01,000 Speaker 2: They were also considering whether they should take action to 267 00:13:01,040 --> 00:13:05,400 Speaker 2: basically intervene in the leverage single stock craze ETF craze 268 00:13:05,440 --> 00:13:07,920 Speaker 2: that's been happening in South Korea. And they have. 269 00:13:08,280 --> 00:13:10,840 Speaker 1: South Korea has a leverage single stock ETF. 270 00:13:10,559 --> 00:13:13,480 Speaker 2: Craze, right, yes, they only recently launched. 271 00:13:13,720 --> 00:13:15,880 Speaker 1: There's a boomer radical saying that like seventy percent of 272 00:13:15,920 --> 00:13:19,200 Speaker 1: the stock market is it's just Samsung X, s k 273 00:13:19,320 --> 00:13:22,720 Speaker 1: Heinex and leveraged single stock ETFs on Samsung and K Hunting. 274 00:13:22,920 --> 00:13:26,600 Speaker 2: Yeah, it's nuts. It's a very interesting petri dish. But 275 00:13:26,800 --> 00:13:30,080 Speaker 2: the news from this week is that now South Korean 276 00:13:30,200 --> 00:13:34,280 Speaker 2: regulators are going to temporarily halt new listings of new 277 00:13:34,360 --> 00:13:38,040 Speaker 2: single stock leverage gtfs. But that's not all. Stay with 278 00:13:38,080 --> 00:13:40,960 Speaker 2: me here. They're going to lift the minimum deposit requirement 279 00:13:41,000 --> 00:13:44,040 Speaker 2: for leverage GTF trading. They're going to increase the mandatory 280 00:13:44,080 --> 00:13:48,720 Speaker 2: training requirement for leverage GTF investors to three hours from two. 281 00:13:49,200 --> 00:13:51,120 Speaker 2: And they're also going to bump up the minimum trading 282 00:13:51,160 --> 00:13:55,000 Speaker 2: lot size to twenty units from one. So that's a lot, 283 00:13:55,160 --> 00:13:56,160 Speaker 2: that's a lot of things to do. 284 00:13:56,400 --> 00:13:58,560 Speaker 1: Yeah, so they're like trying to crack down on these 285 00:13:58,600 --> 00:14:03,920 Speaker 1: because they're bad. I mean, I mean incredibly volatility announcing. 286 00:14:04,080 --> 00:14:07,280 Speaker 2: Yeah, they're just eating the South Korean stock market. 287 00:14:07,440 --> 00:14:09,439 Speaker 1: I've seen you at this. I wrote about this on Thursday. 288 00:14:09,840 --> 00:14:14,920 Speaker 1: Everyone understands that margin debt leads to like exacerbates booming 289 00:14:14,920 --> 00:14:18,080 Speaker 1: bus cycles. Right, Like stocks are going up, you borrow 290 00:14:18,080 --> 00:14:20,240 Speaker 1: money to buy more stocks. That pushes stocks up more 291 00:14:20,600 --> 00:14:23,400 Speaker 1: than stocks go down. And like people get margin calls 292 00:14:23,400 --> 00:14:25,360 Speaker 1: and that they have to sell stock and that pushes 293 00:14:25,360 --> 00:14:29,520 Speaker 1: stocks down some more. And like that's a phenomenon that 294 00:14:29,560 --> 00:14:33,440 Speaker 1: people understand. But it's like there's like friction to that 295 00:14:33,480 --> 00:14:37,200 Speaker 1: phenomenon because it's not like every time stocks go up, 296 00:14:37,240 --> 00:14:39,720 Speaker 1: everyone who in stocks barrows more money to buy stocks, right, 297 00:14:40,120 --> 00:14:42,640 Speaker 1: It's like it's like a more approximate thing, like more 298 00:14:42,680 --> 00:14:44,880 Speaker 1: stocks go down ten percent, Most people don't get margin 299 00:14:44,920 --> 00:14:47,080 Speaker 1: calls because like they have you know, fifty percent margin. 300 00:14:48,080 --> 00:14:53,680 Speaker 1: A leverage single stock ETF is like perfect distilled margin 301 00:14:53,720 --> 00:14:56,040 Speaker 1: debt because every day, if the stock goes up, it 302 00:14:56,040 --> 00:14:57,960 Speaker 1: borrows more money to buy more and every day if 303 00:14:57,960 --> 00:14:59,920 Speaker 1: the stock goes down even a little bit, it's so 304 00:15:00,120 --> 00:15:02,880 Speaker 1: stock to pay back some leans. So it like really 305 00:15:03,440 --> 00:15:08,960 Speaker 1: concentrates the volatility effect of margin lending. So in some sense, 306 00:15:09,720 --> 00:15:11,760 Speaker 1: a leverg GTF is like a better way for a 307 00:15:11,760 --> 00:15:14,200 Speaker 1: retail investor to get margin debt. But like from a 308 00:15:14,240 --> 00:15:17,760 Speaker 1: regulator's perspective, it's just much worse because it's just super 309 00:15:17,960 --> 00:15:21,120 Speaker 1: volatility announcing yeah, and they seem very unhappy about it. 310 00:15:21,320 --> 00:15:26,240 Speaker 2: Yeah, and they're actually taking steps to damp in this enthusiasm, 311 00:15:26,560 --> 00:15:28,760 Speaker 2: which I think is interesting because you know, I'm a 312 00:15:28,840 --> 00:15:32,080 Speaker 2: dumb American, so I approach everything from the US perspective, 313 00:15:32,440 --> 00:15:34,600 Speaker 2: and it's hard to imagine a world where the SEC 314 00:15:34,800 --> 00:15:37,600 Speaker 2: would take such steps. 315 00:15:38,120 --> 00:15:40,960 Speaker 1: I hear you. I mean, it's not that hard to 316 00:15:40,960 --> 00:15:42,880 Speaker 1: imagine a world. Is hard to imagine a world where 317 00:15:42,960 --> 00:15:45,000 Speaker 1: the current ath you see would take those up. I 318 00:15:45,040 --> 00:15:49,440 Speaker 1: will say that there's a difference between seventy percent of 319 00:15:49,480 --> 00:15:52,560 Speaker 1: the stock market and like whatever presentage. You know US 320 00:15:52,760 --> 00:15:55,480 Speaker 1: leverage is represent now right, that's like your whole stock 321 00:15:55,520 --> 00:15:56,560 Speaker 1: market becomes. 322 00:15:56,200 --> 00:16:00,440 Speaker 2: A that's fair if we were in that situation, perhaps 323 00:16:00,440 --> 00:16:05,120 Speaker 2: sometimes will be taken. I did speak to Gary Gensler 324 00:16:05,400 --> 00:16:12,200 Speaker 2: on television last Friday, so before South Korea's right, if 325 00:16:12,200 --> 00:16:15,240 Speaker 2: you don't know friend of the pod, Gary Gensler goes 326 00:16:15,240 --> 00:16:18,880 Speaker 2: without introduction. I did ask him, you know, because we 327 00:16:18,920 --> 00:16:22,480 Speaker 2: operate in a disclosure based system, an issuer has to 328 00:16:22,480 --> 00:16:25,560 Speaker 2: outline the potential risks and then it's on you if 329 00:16:25,560 --> 00:16:27,920 Speaker 2: you want to lose all your money. For the most part, 330 00:16:27,960 --> 00:16:31,040 Speaker 2: at least when it comes to ETFs, he was vocally 331 00:16:31,160 --> 00:16:35,240 Speaker 2: against leverage single stock ETFs when they launched, which is 332 00:16:35,280 --> 00:16:37,520 Speaker 2: funny because he was the chair of the SEC. But 333 00:16:38,400 --> 00:16:42,200 Speaker 2: he said he had some line that they present particular risk, 334 00:16:42,360 --> 00:16:46,840 Speaker 2: like he was in public against these products. And I 335 00:16:46,880 --> 00:16:49,600 Speaker 2: asked him about does the current system go far enough 336 00:16:49,600 --> 00:16:53,480 Speaker 2: in the US to product investors and he said, if 337 00:16:53,520 --> 00:16:57,960 Speaker 2: there's proper disclosure material disclosure, the basic bargain is the 338 00:16:58,000 --> 00:17:00,280 Speaker 2: American public gets to say what they want on vest 339 00:17:00,400 --> 00:17:05,000 Speaker 2: in or even bad one. I think that's the right way. 340 00:17:05,080 --> 00:17:06,160 Speaker 2: Still doesn't like them. 341 00:17:06,000 --> 00:17:07,680 Speaker 1: But by the way, you say, it's hard to imagine 342 00:17:07,680 --> 00:17:09,400 Speaker 1: the sec doing anything a right it, But like it's 343 00:17:09,680 --> 00:17:12,119 Speaker 1: put out a request for comment, right, Like we just 344 00:17:12,119 --> 00:17:14,399 Speaker 1: talked about it, right, It's it's like I call it 345 00:17:14,440 --> 00:17:17,359 Speaker 1: sports camping, but it's it's all weird ETFs, including levels. 346 00:17:18,200 --> 00:17:21,960 Speaker 2: So you're right, they've requested comment. In the meantime, you 347 00:17:22,000 --> 00:17:27,320 Speaker 2: have things like the prediction market ETFs in purgatory right now. 348 00:17:27,480 --> 00:17:33,600 Speaker 2: But I don't know, it's hard to imagine training. 349 00:17:32,960 --> 00:17:35,840 Speaker 1: Although there is like trading options, you have to get 350 00:17:35,840 --> 00:17:38,639 Speaker 1: some options disclosure, and like there's some notion that you 351 00:17:38,720 --> 00:17:42,680 Speaker 1: have to like inquire if your customers are sophisticated enough 352 00:17:42,680 --> 00:17:46,119 Speaker 1: to trade options. You can imagine a sophistication inquiry. 353 00:17:46,320 --> 00:17:46,800 Speaker 2: I don't know. 354 00:17:46,960 --> 00:17:48,840 Speaker 1: I don't know either. We have that in the US 355 00:17:48,920 --> 00:17:51,640 Speaker 1: with like you know, the accredited and investor standard. People 356 00:17:51,640 --> 00:17:54,320 Speaker 1: are always trying to make that. You know, right now, 357 00:17:54,440 --> 00:17:56,600 Speaker 1: if you want to buy private stuff, you have to 358 00:17:56,600 --> 00:18:00,280 Speaker 1: be accredited, which like largely means you have a certain 359 00:18:00,280 --> 00:18:05,000 Speaker 1: amount of money. But they've like over time, like qualifications 360 00:18:05,000 --> 00:18:06,760 Speaker 1: have leaked in where like if you've like you know, 361 00:18:06,840 --> 00:18:10,160 Speaker 1: passed the securities licensing exams, like that's good enough. There's 362 00:18:10,200 --> 00:18:11,240 Speaker 1: some of that in the US. 363 00:18:12,160 --> 00:18:14,919 Speaker 2: Also, I think it was four years ago. Findra was 364 00:18:15,040 --> 00:18:17,679 Speaker 2: considering whether or not there should be knowledge checks on 365 00:18:17,840 --> 00:18:20,440 Speaker 2: complex products, which at the time just meant leverage single 366 00:18:20,480 --> 00:18:24,960 Speaker 2: sock ETFs and they got a lot of passionate letters 367 00:18:25,000 --> 00:18:26,679 Speaker 2: and ultimately dropped that, a lot. 368 00:18:26,520 --> 00:18:29,560 Speaker 1: Of passionate letters saying I don't have to know anything 369 00:18:29,560 --> 00:18:29,880 Speaker 1: to buy. 370 00:18:30,160 --> 00:18:47,240 Speaker 3: Yeah, so you emailed me on Monday. 371 00:18:47,359 --> 00:18:48,480 Speaker 4: On Monday, yeah, to. 372 00:18:48,440 --> 00:18:51,760 Speaker 1: Be like, I'm talking to the strategy CEO that is 373 00:18:51,840 --> 00:18:55,600 Speaker 1: wrongly the chief executive officer of the company called Strategy 374 00:18:55,640 --> 00:18:59,199 Speaker 1: formulated called micro Strategy, that is a bitcoin treasury company. 375 00:18:59,680 --> 00:19:02,000 Speaker 1: And we discussed what you might ask and we agreed 376 00:19:02,040 --> 00:19:06,560 Speaker 1: that you would conduct the entire interview about strategies software 377 00:19:06,600 --> 00:19:09,320 Speaker 1: business which exists and plus hundreds of people. 378 00:19:09,440 --> 00:19:10,040 Speaker 2: That's the thing. 379 00:19:10,200 --> 00:19:11,040 Speaker 4: And you didn't do that. 380 00:19:11,119 --> 00:19:12,880 Speaker 2: Well, I did ask him a question. 381 00:19:12,600 --> 00:19:15,600 Speaker 1: About it, like we have a software business. 382 00:19:15,760 --> 00:19:19,639 Speaker 2: Well, I said, why did not you have fifteen hundred employees? 383 00:19:20,200 --> 00:19:22,159 Speaker 2: What did they do it? I didn't say that, but 384 00:19:23,040 --> 00:19:24,320 Speaker 2: now I mean, how is You're right? 385 00:19:24,359 --> 00:19:25,840 Speaker 1: Well, what are those people doing all day? 386 00:19:25,880 --> 00:19:28,720 Speaker 2: I said, how much of your time do you spend 387 00:19:29,080 --> 00:19:33,040 Speaker 2: with the bitcoin treasury component of your business versus the 388 00:19:33,080 --> 00:19:37,600 Speaker 2: actual underlying software business and one hundred zero. He was like, 389 00:19:37,640 --> 00:19:41,240 Speaker 2: you know some days at sixty forty some days really yeah, wow, Wow, 390 00:19:41,280 --> 00:19:42,320 Speaker 2: you didn't watch the interview. 391 00:19:42,400 --> 00:19:43,359 Speaker 1: I did watch the interview. 392 00:19:43,400 --> 00:19:43,760 Speaker 2: I get it. 393 00:19:43,880 --> 00:19:44,440 Speaker 1: That's that part. 394 00:19:44,640 --> 00:19:48,439 Speaker 2: He did say that the fact that they are a 395 00:19:48,520 --> 00:19:51,879 Speaker 2: twenty five year public company gives them a little bit 396 00:19:51,880 --> 00:19:54,000 Speaker 2: more maturity than maybe some of the other dats that 397 00:19:54,040 --> 00:19:55,080 Speaker 2: have listed publicly. 398 00:19:55,359 --> 00:19:59,000 Speaker 1: Sure, you know, I did watch the interview, and I 399 00:19:59,040 --> 00:20:02,199 Speaker 1: found it somewhat crazy. 400 00:20:03,800 --> 00:20:05,359 Speaker 2: That's a pregnant plaus. 401 00:20:05,480 --> 00:20:11,040 Speaker 1: Uh, it's wild. I know, you're a wild company. 402 00:20:11,119 --> 00:20:13,439 Speaker 2: They really are. And it's so interesting too. It's not 403 00:20:13,480 --> 00:20:14,720 Speaker 2: just Michael Saylor. 404 00:20:14,800 --> 00:20:18,080 Speaker 1: No, it's more of the entire philosophy of the thing. 405 00:20:18,160 --> 00:20:20,320 Speaker 1: I mean, like, you know, they like their Their philosophy 406 00:20:20,359 --> 00:20:22,760 Speaker 1: is like we're going to issue stock at a premium 407 00:20:22,800 --> 00:20:26,520 Speaker 1: to buy bitcoin, and we're gonna then borrow against bitcoin 408 00:20:26,600 --> 00:20:30,480 Speaker 1: at very high floating rates. And this will be great 409 00:20:30,800 --> 00:20:32,639 Speaker 1: because Bitcoin keeps going up and as long as we 410 00:20:32,680 --> 00:20:34,560 Speaker 1: can keep doing it, and now they can now it 411 00:20:34,600 --> 00:20:36,760 Speaker 1: stops right like bitcoin has gone down. Also, like they 412 00:20:36,760 --> 00:20:39,320 Speaker 1: no longer can issue stock at really any premium, like 413 00:20:39,960 --> 00:20:42,280 Speaker 1: Candisty stock at a material premium to buy bitcoin, and 414 00:20:42,320 --> 00:20:48,359 Speaker 1: so like the whole trade ended. Yeah, and so you 415 00:20:48,880 --> 00:20:53,920 Speaker 1: were like, so what now, And I found the answers strange. 416 00:20:54,080 --> 00:20:56,080 Speaker 2: I did ask him, I mean, do you have a 417 00:20:56,119 --> 00:21:00,240 Speaker 2: break glass plan, Like what if bitcoin goes down to 418 00:21:00,280 --> 00:21:02,880 Speaker 2: thirty thousand or twenty thousand, you know, just picking numbers, 419 00:21:03,280 --> 00:21:08,879 Speaker 2: and he said, actually, when bitcoin gets down close to 420 00:21:08,920 --> 00:21:10,840 Speaker 2: eight thousand or ten thousand, that is when we have 421 00:21:10,880 --> 00:21:13,240 Speaker 2: to consider the risks associated with our debt. Until that 422 00:21:13,280 --> 00:21:16,119 Speaker 2: point in time, we feel secure about our balance sheets. 423 00:21:16,119 --> 00:21:17,520 Speaker 2: So circle that on your charge. 424 00:21:17,520 --> 00:21:20,640 Speaker 1: That's like their actual debt. So like their capital structure 425 00:21:20,680 --> 00:21:22,399 Speaker 1: is like they have a lot of stock. They have 426 00:21:22,400 --> 00:21:24,880 Speaker 1: a lot of preferred stock, which I think of as debt, 427 00:21:24,880 --> 00:21:26,480 Speaker 1: but it's perpetual that they don't have to pay back, 428 00:21:26,640 --> 00:21:29,119 Speaker 1: and they have a certain amount of like senior and 429 00:21:29,200 --> 00:21:32,560 Speaker 1: secure convertible bonds where like they have to pay them back, right, Yeah, 430 00:21:32,640 --> 00:21:34,840 Speaker 1: And so if the bitcoin goes down to like eight thousand, 431 00:21:35,280 --> 00:21:38,320 Speaker 1: then they don't have enough money in their bitcoin account 432 00:21:38,359 --> 00:21:41,359 Speaker 1: to pay back their debt, but they are. That's the 433 00:21:41,400 --> 00:21:43,600 Speaker 1: whole experiment stops working well before you get to that point. 434 00:21:43,680 --> 00:21:45,520 Speaker 4: Yeah, there's a lot of the preferred stock. 435 00:21:45,400 --> 00:21:46,920 Speaker 2: A lot of stuff that will happen on the way 436 00:21:46,920 --> 00:21:47,600 Speaker 2: to eight thousand. 437 00:21:47,760 --> 00:21:49,840 Speaker 1: It's such a wild company. Like one of their wild 438 00:21:49,880 --> 00:21:52,520 Speaker 1: things is Stretch, their preferred stock that is a floating rate, 439 00:21:52,880 --> 00:21:55,520 Speaker 1: and when they issued it led like one year ago, 440 00:21:55,720 --> 00:21:57,399 Speaker 1: they were like, we're going to float the rate so 441 00:21:57,440 --> 00:22:00,760 Speaker 1: that it always trades at par because the idea of 442 00:22:00,760 --> 00:22:05,200 Speaker 1: it is it's like a zero duration bitcoin credit instrument. 443 00:22:05,240 --> 00:22:07,720 Speaker 1: It's like a bank deposit or a money market fund 444 00:22:08,080 --> 00:22:11,280 Speaker 1: backed by bitcoin. And then the rate I think they 445 00:22:11,320 --> 00:22:14,080 Speaker 1: issued it like like nine percent or something, and the 446 00:22:14,200 --> 00:22:16,840 Speaker 1: rate has now gone out to twelve percent and it 447 00:22:16,840 --> 00:22:20,840 Speaker 1: does not trade it par like, and they've abandoned defending par. 448 00:22:21,520 --> 00:22:24,000 Speaker 1: They're like, we can't raise the rate that high, so 449 00:22:24,040 --> 00:22:26,679 Speaker 1: we're just gonna pay you twelve percent on this preferred 450 00:22:26,720 --> 00:22:30,080 Speaker 1: stock and it'll trade it like eighty five. And in 451 00:22:30,119 --> 00:22:31,760 Speaker 1: the interview that you had with him, you were like, 452 00:22:31,840 --> 00:22:34,080 Speaker 1: what are you gonna do about Stretch, And they're like, 453 00:22:34,080 --> 00:22:35,520 Speaker 1: we're gonna try to get it back to par, not 454 00:22:35,560 --> 00:22:39,479 Speaker 1: by raising the rate, but by basically improving our credit. 455 00:22:39,600 --> 00:22:41,879 Speaker 1: Like basically we're gonna like build up a cash reserve 456 00:22:41,960 --> 00:22:43,920 Speaker 1: so people will know that we can pay the dividend 457 00:22:44,240 --> 00:22:46,280 Speaker 1: and that will improve their credit enough that it'll go 458 00:22:46,320 --> 00:22:46,760 Speaker 1: back to par. 459 00:22:47,920 --> 00:22:50,560 Speaker 4: It's just like yeah, it's. 460 00:22:50,359 --> 00:22:52,720 Speaker 1: Just like it's not a part like you built this 461 00:22:52,800 --> 00:22:55,600 Speaker 1: capital structure and like we're gonna sell these like par 462 00:22:56,600 --> 00:22:59,199 Speaker 1: zero duration securities and like no we're not. 463 00:22:59,600 --> 00:22:59,920 Speaker 3: It's fun. 464 00:23:00,040 --> 00:23:01,080 Speaker 1: It'll come back that it'll be. 465 00:23:01,359 --> 00:23:05,520 Speaker 2: Yeah, I've been thinking of it like scaffolding the different 466 00:23:05,720 --> 00:23:07,320 Speaker 2: like vehicles that they've built up. 467 00:23:07,280 --> 00:23:10,560 Speaker 1: I guess, but like they've sort of like kicked away 468 00:23:10,560 --> 00:23:14,280 Speaker 1: the scaffolding. That's true, it like mid construction. I don't know, 469 00:23:15,440 --> 00:23:18,800 Speaker 1: it's so weird. Yeah, I'm really I feel like we 470 00:23:18,880 --> 00:23:20,199 Speaker 1: talked about this like a week or two ago and 471 00:23:20,240 --> 00:23:23,600 Speaker 1: you're like what is the And I feel like I 472 00:23:23,680 --> 00:23:26,520 Speaker 1: know less now after watching that interview than I did before. 473 00:23:26,560 --> 00:23:29,280 Speaker 1: Like one doesn't get the sense they know it's gonna happen. 474 00:23:29,680 --> 00:23:32,520 Speaker 2: I don't know they are raising that cashers or they 475 00:23:32,640 --> 00:23:33,720 Speaker 2: sold the. 476 00:23:33,760 --> 00:23:37,560 Speaker 1: Selling stock, which is like now not the accreative selling's 477 00:23:37,600 --> 00:23:39,400 Speaker 1: not going to premium that they were doing for years, 478 00:23:39,400 --> 00:23:42,399 Speaker 1: the whole the whole trade just like yeah, it was 479 00:23:42,480 --> 00:23:46,440 Speaker 1: such a like virtuous cycle trade for so long and 480 00:23:46,880 --> 00:23:50,320 Speaker 1: if anyone was like this doesn't make sense as you know, 481 00:23:51,440 --> 00:23:55,720 Speaker 1: Jim chaneos Wlaser, I was like, this doesn't make sense. 482 00:23:55,720 --> 00:23:57,400 Speaker 1: You could be like, wow, but it's a virtual cycle. 483 00:23:57,440 --> 00:23:58,879 Speaker 1: You know, you saw out a premium always goes up. 484 00:23:58,880 --> 00:24:00,480 Speaker 1: It's fine, It's like no problem, and like. 485 00:24:00,560 --> 00:24:07,800 Speaker 2: Now, well at least their stated intention is to issue 486 00:24:07,800 --> 00:24:09,120 Speaker 2: more stretch. When it gets back to. 487 00:24:09,040 --> 00:24:11,720 Speaker 1: Part, your stated intention was to pay a dividend that 488 00:24:11,720 --> 00:24:13,560 Speaker 1: would keep it apart, but that's not anymore. 489 00:24:13,680 --> 00:24:17,960 Speaker 2: Also, to return to buying bitcoin, they've famously started selling bitcoin. 490 00:24:18,760 --> 00:24:22,720 Speaker 1: Right, it is true that like, on the one hand, 491 00:24:23,160 --> 00:24:24,680 Speaker 1: like this is a trade where like if the stock 492 00:24:24,720 --> 00:24:26,520 Speaker 1: is an a premium, issues stocked by bitcoin. If the 493 00:24:26,520 --> 00:24:29,159 Speaker 1: stock is not at a premium, you sell bitcoin to 494 00:24:29,160 --> 00:24:32,119 Speaker 1: buy back stock. As a like corporate finance matter, that 495 00:24:32,119 --> 00:24:34,040 Speaker 1: sort of makes sense. But as a like keeping this 496 00:24:34,080 --> 00:24:36,240 Speaker 1: whole thing afloat matter, the only thing you can do 497 00:24:36,359 --> 00:24:40,560 Speaker 1: is sell stocked by bitcoin. Yeah, well it's just one way. 498 00:24:40,800 --> 00:24:44,040 Speaker 2: We'll see. Apparently they have enough cash now to cover 499 00:24:44,080 --> 00:24:49,080 Speaker 2: dividend payments for two years, So okay, circle, you know 500 00:24:49,280 --> 00:24:53,120 Speaker 2: eight ten thousand on your chart and also will check 501 00:24:53,160 --> 00:24:53,960 Speaker 2: in in two years. 502 00:24:54,080 --> 00:24:57,080 Speaker 1: Yeah, this is another one where like you're going to 503 00:24:57,160 --> 00:24:58,280 Speaker 1: be watching with interest on. 504 00:24:58,240 --> 00:24:59,880 Speaker 4: Your oh yes, rental leave. 505 00:25:00,160 --> 00:25:02,800 Speaker 2: I will. I feel like in some ways it'll be 506 00:25:02,920 --> 00:25:05,160 Speaker 2: more exciting because I'll probably only remember to do it 507 00:25:05,480 --> 00:25:07,920 Speaker 2: a few times, right, you know, like what's the strategy? 508 00:25:07,960 --> 00:25:12,560 Speaker 1: What's that to that? All right, let's talking about SpaceX, 509 00:25:12,600 --> 00:25:16,119 Speaker 1: speaking of speaking of trades that stopped working. When we 510 00:25:16,200 --> 00:25:19,240 Speaker 1: came in here on Thursday afternoon, SpaceX was like one 511 00:25:19,359 --> 00:25:23,720 Speaker 1: thirty two. Yeah, is below the IPO price. 512 00:25:23,520 --> 00:25:29,280 Speaker 2: Which was one thirty five. Yeah. It got there pretty quickly, 513 00:25:29,400 --> 00:25:31,640 Speaker 2: like it round tripped pretty quickly because it wanted. 514 00:25:31,680 --> 00:25:32,560 Speaker 1: It was a couple of weeks. 515 00:25:32,760 --> 00:25:34,360 Speaker 2: Yeah, I don't know, it feels kind of quick. 516 00:25:34,359 --> 00:25:35,000 Speaker 1: It's kind of quick. 517 00:25:35,000 --> 00:25:38,000 Speaker 2: I guess, Yeah, I guess I'm just more patient, you know. 518 00:25:38,280 --> 00:25:39,960 Speaker 1: I think when we talked about it, like like the 519 00:25:39,960 --> 00:25:41,719 Speaker 1: week after the IPI was like it had a perfect 520 00:25:41,800 --> 00:25:44,160 Speaker 1: ipeo pop. They priced the IPO at one thirty five, 521 00:25:44,160 --> 00:25:47,800 Speaker 1: which is not a price that was come to during 522 00:25:48,680 --> 00:25:51,160 Speaker 1: IPO marketing, but just the price that Elon Musk made 523 00:25:51,200 --> 00:25:54,240 Speaker 1: up apparently, And they priced it one thirty five, and 524 00:25:54,280 --> 00:25:57,080 Speaker 1: the stock immediately traded up like exactly twenty percent, which 525 00:25:57,119 --> 00:25:59,240 Speaker 1: is exactly what you want in an IPO. And then 526 00:25:59,240 --> 00:26:00,800 Speaker 1: it traded up from there and it was like great, 527 00:26:00,880 --> 00:26:04,040 Speaker 1: great IPI and now it is below the IPI price, 528 00:26:04,080 --> 00:26:07,440 Speaker 1: which is a traditional source of shame and failure. 529 00:26:07,920 --> 00:26:10,600 Speaker 2: Yeah, I don't know. I don't know much, and I 530 00:26:10,680 --> 00:26:12,840 Speaker 2: wonder what happens from here because you know, as we've 531 00:26:12,880 --> 00:26:15,440 Speaker 2: discussed on this podcast, we are going to get those 532 00:26:15,480 --> 00:26:18,960 Speaker 2: lock up experies, yeah, pretty soon, so there's going to 533 00:26:19,000 --> 00:26:21,560 Speaker 2: be like an interesting waterfall potentially of selling. 534 00:26:21,720 --> 00:26:23,320 Speaker 1: Yeah, I was. I was writing about this a bit 535 00:26:23,320 --> 00:26:26,600 Speaker 1: this week. The lockups start releasing after earnings, which is 536 00:26:26,640 --> 00:26:28,960 Speaker 1: like they haven't said their earnings day, but it's like 537 00:26:29,040 --> 00:26:29,879 Speaker 1: early to mid August. 538 00:26:29,920 --> 00:26:33,000 Speaker 2: It's so bummed. I'm going to miss it. I'm so bummed. 539 00:26:33,320 --> 00:26:35,280 Speaker 2: I would have loved to be on television for that, 540 00:26:35,480 --> 00:26:36,480 Speaker 2: for SpaceX. 541 00:26:36,080 --> 00:26:41,160 Speaker 1: Earnings, for the earnings like susspunthole, like it's fun. 542 00:26:41,200 --> 00:26:43,040 Speaker 2: You have to break the numbers and then talk about them. 543 00:26:43,080 --> 00:26:45,399 Speaker 1: The lockups, you know, they have like six months and 544 00:26:45,440 --> 00:26:48,680 Speaker 1: one year lockups, but like they release early over time, 545 00:26:48,800 --> 00:26:52,159 Speaker 1: and the shares that will be released after earnings and 546 00:26:52,280 --> 00:26:55,080 Speaker 1: like August is more than the shares they sold in 547 00:26:55,119 --> 00:26:57,199 Speaker 1: the IPI. It's like they're more more than doubling the 548 00:26:57,200 --> 00:27:00,600 Speaker 1: supply of the stock, and I don't know, but like 549 00:27:00,640 --> 00:27:02,880 Speaker 1: I assume that's part of why the stock is down. 550 00:27:03,040 --> 00:27:05,120 Speaker 2: Like you know, like in anticipation. 551 00:27:05,600 --> 00:27:07,800 Speaker 1: Everything happens in anticipation, right, So, like I think the 552 00:27:07,840 --> 00:27:10,280 Speaker 1: stock was up until a couple of weeks ago in 553 00:27:10,320 --> 00:27:13,159 Speaker 1: part because everyone knew that index demand was coming. So 554 00:27:13,200 --> 00:27:15,120 Speaker 1: you're like, oh, you can like pencil out how many 555 00:27:15,160 --> 00:27:16,760 Speaker 1: shares the NASDAQ funds are going to buy, and so 556 00:27:16,840 --> 00:27:20,120 Speaker 1: like there's both like psychologically but also just like hedge 557 00:27:20,119 --> 00:27:22,600 Speaker 1: funds are buying those shares to deliver to the NASDAK funds, 558 00:27:22,600 --> 00:27:24,560 Speaker 1: and so like there's a lot of towes for the 559 00:27:24,600 --> 00:27:27,359 Speaker 1: stock from everyone knowing that the index ones are going 560 00:27:27,400 --> 00:27:30,720 Speaker 1: to buy. Now that's over, and the next thing that's 561 00:27:30,760 --> 00:27:33,720 Speaker 1: going to happen besides earnings and rocket launches, but like 562 00:27:33,800 --> 00:27:35,600 Speaker 1: the next like you know, supply demand thing that's going 563 00:27:35,640 --> 00:27:38,960 Speaker 1: to happen is hundreds of millions of shares are going 564 00:27:39,040 --> 00:27:40,040 Speaker 1: to become available to trade. 565 00:27:40,119 --> 00:27:42,760 Speaker 2: Yeah, unless I mean the insiders don't sell. 566 00:27:42,920 --> 00:27:44,359 Speaker 1: I've seen that this, like they were going to become 567 00:27:44,440 --> 00:27:46,600 Speaker 1: available to trade, right, well, they sell, I don't know, 568 00:27:46,680 --> 00:27:49,000 Speaker 1: it depends on the price, right, Like at one thirty, 569 00:27:49,000 --> 00:27:51,879 Speaker 1: will the insiders want to sell. Like, I think a 570 00:27:51,880 --> 00:27:54,880 Speaker 1: lot of people are true believers and will not want 571 00:27:54,920 --> 00:27:57,479 Speaker 1: to sell. I think a lot of I don't know, 572 00:27:57,560 --> 00:28:00,480 Speaker 1: Like I don't have a really good psychological model of 573 00:28:00,520 --> 00:28:04,399 Speaker 1: the average like current or former early SpaceX and. 574 00:28:04,359 --> 00:28:06,120 Speaker 2: Employees whale and space lectures. 575 00:28:06,200 --> 00:28:08,760 Speaker 1: Yeah, it's a big whale. It's employee, right, And like 576 00:28:08,840 --> 00:28:13,399 Speaker 1: if I were a rocket engineer who was sitting on 577 00:28:13,960 --> 00:28:17,200 Speaker 1: thirty million dollars of SpaceX stock, would I take money 578 00:28:17,200 --> 00:28:21,280 Speaker 1: off the table at my first opportunity? Like, yes, like 579 00:28:21,760 --> 00:28:23,760 Speaker 1: at any price, I would take money off the table. 580 00:28:23,760 --> 00:28:25,720 Speaker 1: But I'm not. I'm not a SpaceX engineer, and I 581 00:28:25,720 --> 00:28:29,240 Speaker 1: think those people have different risk preferences from me. Yea, 582 00:28:29,400 --> 00:28:31,080 Speaker 1: But I don't know, Like I think some stock is 583 00:28:31,119 --> 00:28:32,040 Speaker 1: going to become available. 584 00:28:32,400 --> 00:28:33,000 Speaker 2: Yeah. 585 00:28:33,160 --> 00:28:36,560 Speaker 1: The other thing that I don't understand is that SpaceX 586 00:28:36,560 --> 00:28:38,520 Speaker 1: has said and its IPO filing is like, you know, 587 00:28:38,560 --> 00:28:40,800 Speaker 1: they sold five percent of the stock and the rest 588 00:28:40,840 --> 00:28:42,560 Speaker 1: of it is like one hundred percent of the other 589 00:28:42,640 --> 00:28:46,400 Speaker 1: stock is subject to lockups. I don't know if that's true. 590 00:28:46,720 --> 00:28:48,240 Speaker 1: I don't know if people like find some ways to 591 00:28:48,280 --> 00:28:51,400 Speaker 1: sell stock between the IPO and the lock up release. 592 00:28:51,400 --> 00:28:53,440 Speaker 1: I don't know if like only the IPO shares are 593 00:28:53,440 --> 00:28:56,440 Speaker 1: actually available in the market, but this is all speculative. 594 00:28:56,800 --> 00:29:00,760 Speaker 2: Yeah, anyway, that's why it's fun. So that's something to 595 00:29:01,120 --> 00:29:01,840 Speaker 2: keep an eye out for. 596 00:29:01,840 --> 00:29:07,800 Speaker 1: It also going to happen. I know, we're really just 597 00:29:07,840 --> 00:29:10,800 Speaker 1: getting into stuff that like you're not going to see true. 598 00:29:11,080 --> 00:29:12,680 Speaker 4: I know, I'll text you. 599 00:29:12,800 --> 00:29:16,160 Speaker 2: I'm so excited strategy. That would be so sweet, and 600 00:29:16,200 --> 00:29:18,800 Speaker 2: I'd be like, Matt, I don't know my name. 601 00:29:19,000 --> 00:29:20,640 Speaker 4: I'm busy. 602 00:29:20,680 --> 00:29:23,160 Speaker 2: Even if I just put my hand over the chart 603 00:29:23,240 --> 00:29:26,480 Speaker 2: of like the six months where I'm out, I'm interested 604 00:29:26,520 --> 00:29:29,400 Speaker 2: to see where it is six months, you know, even 605 00:29:29,440 --> 00:29:32,080 Speaker 2: without the details of like all the ways the line moved. 606 00:29:32,840 --> 00:29:35,000 Speaker 2: I'm excited to see. 607 00:29:35,560 --> 00:29:39,479 Speaker 1: Yeah, a lot to a lot to talk about when 608 00:29:39,480 --> 00:29:42,160 Speaker 1: you get back, mostly of course psychic. 609 00:29:42,280 --> 00:29:44,160 Speaker 2: If I come back, I'm just gonna. 610 00:29:50,320 --> 00:29:51,880 Speaker 1: And that was The Money Stuff Podcast. 611 00:29:52,200 --> 00:29:54,320 Speaker 2: I'm Matt Levine and I'm Katie Greifeld. 612 00:29:54,680 --> 00:29:57,680 Speaker 1: I'm world subscribing to The Money Stuff new letter on. 613 00:29:57,760 --> 00:30:00,600 Speaker 2: Bloomberg dot com and you can find me on Bloomberg 614 00:30:00,640 --> 00:30:03,680 Speaker 2: TV every day on the close between three and five 615 00:30:03,800 --> 00:30:04,440 Speaker 2: pm Eastern. 616 00:30:05,160 --> 00:30:06,640 Speaker 1: We'd love to hear from you of it. 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