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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.

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Speaker 3: I'm Jill Wisenthal, and I'm Tracy all the way Tracy.

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Speaker 2: I think I've mentioned it before, but an idea that

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Speaker 2: I've had for podcasts in general, maybe this one one day,

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Speaker 2: other podcasts, I want to do everything in two parts.

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Speaker 2: So yes, yeah, interview the guests because sometimes it's like

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Speaker 2: all of the questions I want to ask are only

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Speaker 2: after I've talked to a guest for an hour and

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Speaker 2: have some better understanding of the situation. So I want

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Speaker 2: to interview the guests, think about it for a few days,

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Speaker 2: let the listeners listen to it and have their questions,

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Speaker 2: and then it's like, Okay, you know, we've thought about

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Speaker 2: it for a few days. Come back. Also, our listeners

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Speaker 2: want to know about this and then have the second

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Speaker 2: part of the conversation, just like a follow up. I

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Speaker 2: want to form a lot. I want to do that one.

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Speaker 3: I think it's a good idea. It's also just a

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Speaker 3: flywheel of content. It will be never ending that way.

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Speaker 2: Yeah, I think that's a good job.

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Speaker 3: Security.

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Speaker 2: Anyway, we did an episode last year that was great,

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Speaker 2: but it also provoked a lot of questions. I'd just

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Speaker 2: like jump right into it. So we did an episode

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Speaker 2: last year with Lautenant, the co founder and CEO of Robinhood,

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Speaker 2: and that was about the company's tokenization efforts, so basically

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Speaker 2: his ability to create instruments that would allow users to

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Speaker 2: actually trade shares not shares, I guess, but you know,

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Speaker 2: quasi equity or equity linked instruments in private companies like

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Speaker 2: an open AI or something like that. And then after

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Speaker 2: that came out a bunch of people, including the companies,

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Speaker 2: a lot of reaction either like what the heck we did?

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Speaker 2: Since when did these private companies they are like, since

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Speaker 2: when the heck did like we authorize our equity to

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Speaker 2: be traded like this or all kinds of stuff. I

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Speaker 2: didn't even like really think about that aspect of the time.

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Speaker 2: So it's like I wanted to know more.

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Speaker 3: I think there's a lot to talk about here. So

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Speaker 3: I mean, it does feel like the I guess the

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Speaker 3: trajectory history right now is marching towards tokenizing everything and

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Speaker 3: just allowing markets in everything and every format, from like

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Speaker 3: kind of quasi derivatives to one off event bets like

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Speaker 3: that just feels like the trend at the moment, but

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Speaker 3: at the same time, there are so many interesting questions

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Speaker 3: that this actually raises, not least of which is the

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Speaker 3: safety aspect of how much of our lives are just

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Speaker 3: going to be watching lines going up or down and

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Speaker 3: making bets on.

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Speaker 2: Them, absolutely right, you know, like with the prediction markets.

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Speaker 2: And you know something I've been thinking about with prediction

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Speaker 2: markets is you can replicate equity through that, right, because

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Speaker 2: you could just have like prediction markets on will Tesla

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Speaker 2: go up one percent today, we'll go up two percent.

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Speaker 2: You could just go up or down. Yeah, you can

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Speaker 2: recreate all of these instruments in all these different formats.

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Speaker 2: So it definitely feels like a jump ball, especially with

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Speaker 2: a very sort of liberal regulatory environment. Anyway, very excited

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Speaker 2: to say we're going to get a chance to do

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Speaker 2: the second half of that conversation that came out last July.

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Speaker 2: So we are rejoined once again by ten of, co

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Speaker 2: founder and CEO of Robin Hoods of Lot. Thanks for

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Speaker 2: coming back on a lot.

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Speaker 4: I'm happy to be here again. And I think from

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Speaker 4: the guest perspective, i'd also like this if there was

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Speaker 4: an opportunity to replace any of my answers from part

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Speaker 4: one with better.

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Speaker 2: Necessary now that I know the question to replace them,

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Speaker 2: that's going to the first one is going to live

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Speaker 2: out forever, but.

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Speaker 4: A very interviewer friendly formats that we've created. That's right,

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Speaker 4: of course we did.

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Speaker 2: Well, let's talk about that, because like we did that

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Speaker 2: episode where you talk about these tokenization efforts, and I was,

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Speaker 2: I don't know. I didn't even think, like, the companies

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Speaker 2: whose private shares are being tokenized, are they cool with this?

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Speaker 2: But apparently they weren't. What's going on with that? What

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Speaker 2: happened with that? Because it does seem weird to be

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Speaker 2: able to offer instruments of privately traded companies when the

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Speaker 2: companies themselves like, just to be clear, this is not us.

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Speaker 4: I think there was various degrees of disavowal. I think

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Speaker 4: a lot of these companies are very concerned about their reputations,

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Speaker 4: and if they don't understand something, they don't have time

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Speaker 4: to dig into it. They'll just say we had nothing

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Speaker 4: to do with this, which I think is fair. I

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Speaker 4: think you talk to these AI companies and they all

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Speaker 4: kind of say the same thing, which is, yeah, we'd

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Speaker 4: love our company to allow retail investors exposure right, and

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Speaker 4: we think that would be better for the world. Everyone

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Speaker 4: generally agrees with us, but when you get down to

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Speaker 4: the details of what that entails, and it is a

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Speaker 4: new thing, not a lot of companies are doing it.

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Speaker 4: Nobody really wants to be the first, and no one

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Speaker 4: wants to mess with the status quo, and from their perspective,

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Speaker 4: they want to focus on running their business, increasing their revenues,

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Speaker 4: and this is sort of ancillary, but for us, it

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Speaker 4: is our business. Our business is all about helping the

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Speaker 4: retail investor making sure they have all the advantages that

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Speaker 4: institutions have, and so it's very, very important. We've continued

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Speaker 4: on this journey. Obviously, the open AI and SpaceX stock

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Speaker 4: token giveaways in Europe were kind of step one, but

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Speaker 4: it's evolved like we're continuing to pursue that over but

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Speaker 4: of course we want to find a US solution for

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Speaker 4: US customers as well. And actually this week we are

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Speaker 4: taking public Robinhood Ventures Fund one RVII on the NICY,

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Speaker 4: which is a closed end fund, so you can think

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Speaker 4: of it as a venture capital firm that we're taking public.

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Speaker 4: We raise capital from retail investors in some institutional as well,

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Speaker 4: and we use that capital to invest in private companies,

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Speaker 4: which we've already invested in quite a few.

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Speaker 3: These are things that traditionally would be limited to a

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Speaker 3: credit investors.

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Speaker 4: But it's not a credited vehicle and also no carry.

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Speaker 4: So actually, one of the things we've been hearing is

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Speaker 4: from a perspective of an LP that invests in venture

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Speaker 4: capital firms and has to give up that performance fee

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Speaker 4: to the manager. This is a disruptive vehicle. And for

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Speaker 4: all of the Robinhood Ventures portfolio companies, and these are

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Speaker 4: companies like Data Breaks or a Revolute, I think I

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Speaker 4: have to go through all of them because I don't

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Speaker 4: want to pick out a particular Boom Hypersonic.

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Speaker 2: Oh yeah, we had their CEE you on.

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Speaker 4: Yeah, Mercore and Stripe which we've signed and not closed,

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Speaker 4: and I'm probably forgetting some, but yeah, these are all

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Speaker 4: companies that are excited to have Robinhood and retail be

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Speaker 4: a part of the picture. And they filmed videos explaining

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Speaker 4: why they chose to be part of this. So there

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Speaker 4: are people that want to be the first And of

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Speaker 4: course this is a different product than tokenization of an

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Speaker 4: individual name, and so it's like a little bit more

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Speaker 4: palatable to most of these companies, But I think it

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Speaker 4: ends up in the same place. I think there's going

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Speaker 4: to be a gradual acclimatization to retail access to these companies,

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Speaker 4: and you know, Robinhood is going to be leading the

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Speaker 4: way across all aspects of this journey. But you know,

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Speaker 4: our approach to it has evolved a little bit. You know,

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Speaker 4: now we're at the point where we're actually surprised how

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Speaker 4: many companies are interested in it and are engaging and

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Speaker 4: view it as a differentiator. So I think, at least

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Speaker 4: for a bit, we're going to be less aggressive than

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Speaker 4: we've been in the past and just get into these

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Speaker 4: companies and make sure they want to be part of

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Speaker 4: what we're doing willingly and openly.

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Speaker 3: I definitely have a lot of questions on the venture

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Speaker 3: fund in particular, and you promised to answer all of

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Speaker 3: our geekiest questions about like the technical structure of how

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Speaker 3: it works. But before we go any further, I have

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Speaker 3: one conceptual question, which is, when you think about the

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Speaker 3: difference between I guess investing, trading, and gambling, how would

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Speaker 3: you differentiate those three activities, Because I think a lot

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Speaker 3: of the tension that arises from something like tokenizing stocks.

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Speaker 3: Is this idea that like, well, you know, when you

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Speaker 3: buy a stock, you're buying equity. The clues in the name, right,

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Speaker 3: You're buying equity in the company that's supposed to come

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Speaker 3: with certain rights. It's supposed to lead to a virtuous

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Speaker 3: circle of you know, the investors putting capital in the

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Speaker 3: company and the company talking back to its investors. And

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Speaker 3: so I think if we just step back for a

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Speaker 3: second and talk about how you see the differences between

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Speaker 3: those three activities, that would be really helpful.

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Speaker 4: Yeah. I think that the difference between investing and trading

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Speaker 4: is really one of velocity. I think the mindset of someone.

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Speaker 4: And by the way, it's not always different people. It

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Speaker 4: could also be different activities within one person. So in fact,

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Speaker 4: we have a lot of customers who have multiple accounts

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Speaker 4: that they have for different purposes. So investing, to me

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Speaker 4: is the mental model is I'm buying something and I

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Speaker 4: never intend to sell it, right, So it's sort of

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Speaker 4: like accumulating assets and you intend to have them only grow,

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Speaker 4: and of course maybe you'll sell it if you actually

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Speaker 4: need the money, but the intent is always I'm holding

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Speaker 4: onto this and I'm building like a monotonically increasing portfolio

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Speaker 4: trading is I'm going to move in and out because

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Speaker 4: I see an opportunity, and that opportunity might not exist

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Speaker 4: in one day or three months. But there's like a

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Speaker 4: very particular thesis that I have that's time bound and systematic.

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Speaker 4: And I think gambling is like mostly emotional driven, Like

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Speaker 4: maybe I really like this team, right and they're my

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Speaker 4: local team, so I'll just you know, put some for

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Speaker 4: entertainment purpose behind it.

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Speaker 2: On tokenization specifically, just to go back to this question,

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Speaker 2: you mentioned that you're through the regulatory environment or you're

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Speaker 2: able to move a little bit more aggressively in Europe

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Speaker 2: in the US. But setting aside Europe or US, if

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Speaker 2: someone buys something that on the robin Hood platform is

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Speaker 2: called an open Aye token, Yeah, what are they getting?

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Speaker 2: Do you have equity that has been like backing it?

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Speaker 2: Is it a sort of swap where the only thing

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Speaker 2: backing it is your promise to like redeem the token

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Speaker 2: at some price, Like what is the token?

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Speaker 4: Yeah? So all of the tokens that we have offered

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Speaker 4: in Europe, including the SpaceX and open Ai giveaway, so

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Speaker 4: those haven't been unlocked for trading. It's basically just we

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Speaker 4: gave our customers a gift that they hold in their accounts,

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Speaker 4: and that's because or actually private markets even in Europe

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Speaker 4: for tokenization or sort of like working through Since we're

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Speaker 4: the first to do this at least that I'm aware of,

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Speaker 4: we're working with the regulators to make sure that when

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Speaker 4: we unlock those for trading, the product is safe and

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Speaker 4: is sort of like answers all the questions and meets

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Speaker 4: all of the requirements for making sure customers are clear

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Speaker 4: on how it works. So the intent is for that

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Speaker 4: to happen later this year. So we're working on it.

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Speaker 4: But as of now, private stock tokens aren't tradable, they're

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Speaker 4: just gifts, and all stock tokens are backed by underlying

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Speaker 4: equity or like equity equivalent position in for example, open

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Speaker 4: ai doesn't have traditional equity because.

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Speaker 2: Okay, but there is just to be clear, someone acquired

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Speaker 2: some equity at some point in a VC round or

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Speaker 2: whatever it is, and when someone buys an open ai token,

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Speaker 2: that link exists to an actual asset that someone has.

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Speaker 4: With the caveat that nobody's buying the open ai token

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Speaker 4: through robinhood. Currently it's just been gifted.

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Speaker 2: So someone holds those they've been gifted, but those are the.

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Speaker 3: Token holder doesn't have the equity. It's in the like

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Speaker 3: special purpose vehicle, I assume.

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Speaker 4: So yeah, technically, the way this works is it's kind

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Speaker 4: of similar to a stable coin. So you have your

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Speaker 4: bag of traditional assets that are governed by traditional rules

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Speaker 4: and legal covenants and whatnot here, and then you mint

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Speaker 4: and burn tokens against that. But yeah, as of now

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Speaker 4: in Europe, it's a derivative product, and that's also subject

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Speaker 4: to change. You can think of this as kind of

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Speaker 4: the paperwork around the technology. The technology is the same,

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Speaker 4: but we have been hearing from customers that they're a

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Speaker 4: little bit concerned, you know, with traditional stocks. In the

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Speaker 4: event of bankruptcy of Robinhood or something, it's very clear

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Speaker 4: what happens. Yeah, and so in V one, I think

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Speaker 4: a lot of those questions were ambiguous. But since then

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Speaker 4: we've continued working and we're going to have a V

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Speaker 4: two and eventually a phase three of this offering where

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Speaker 4: we believe we'll have a path to actually addressing all

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Speaker 4: those concerns. So now you're at the point where if

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Speaker 4: you buy something that's tokenized, maybe it's a little clunky,

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Speaker 4: and it is slightly worse as a product than if

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Speaker 4: you have the traditional equity right, if you have access

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Speaker 4: to that, some people don't have access to it, so

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Speaker 4: it's actually much better for them. But I think you're

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Speaker 4: going to get to the point within the next year

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Speaker 4: where it's superior in all practical ways, and I think

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Speaker 4: that's where things really start to get interesting.

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Speaker 3: And just on the ventures fund, I know you said

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Speaker 3: it was a closed end fund, but is that like

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Speaker 3: a forty act thing or a act? Okay, Yeah, I

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Speaker 3: find financial engineering interesting and it certainly gives us a

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Speaker 3: lot to talk about. But on the other hand, it

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Speaker 3: seems like so much work. Would it not just be

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Speaker 3: simpler to try to lobby for the accredited investor rules

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Speaker 3: to actually be changed, Like, how are you making the

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Speaker 3: decisions too? We're going to create all these new products,

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Speaker 3: which I assume are a lot of work for you guys,

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Speaker 3: take a lot of discussion with the regulators versus just

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Speaker 3: lobbying for these old rules to actually get overhauled.

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Speaker 4: Yeah, I think we're doing that as well. I think

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Speaker 4: the accredited investor rule needs to go. Frankly, it doesn't

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Speaker 4: make any sense, But I don't think that answers all

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Speaker 4: of the problems that people have with private market investing.

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Speaker 4: The other problem is just liquidity, Like I don't even myself,

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Speaker 4: right who has access to these things. I don't want

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Speaker 4: to have my capital locked up for ten years possibly

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Speaker 4: more for these companies to go public, and some of

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Speaker 4: them might never go public, right, So there's a liquidity,

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Speaker 4: there's also just access and I mean, Robinhood. Part of

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Speaker 4: what we're doing here is we're out there hustling getting

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Speaker 4: into these deals because I'm in Silicon Valley, our team

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Speaker 4: is there, unlike most of these financial companies that are

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Speaker 4: here in New York. So we happen to kind of

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Speaker 4: be in the epicenter where the deals are getting done,

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Speaker 4: where the companies are based. The no carry obviously, and

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Speaker 4: the accreditation. You know, if we could solve that through

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Speaker 4: other ways, that will become interesting. But Chairman Atkins of

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Speaker 4: the SEC actually specifically called out close down funds as

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Speaker 4: the preferred vehicle for having access to privates. So you know,

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Speaker 4: we're we're doing our part working with the regulators to

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Speaker 4: try to open this up. I think they agree that

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Speaker 4: it's a problem, and you know, I don't think that

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Speaker 4: it's going to be the end state necessarily. I think

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Speaker 4: this thing will evolve, but we want to serve customers

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Speaker 4: and work with regulators at all stages of it. So

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Speaker 4: and you know, you do this once. The fact that

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Speaker 4: it's hard is also kind of attractive because it makes

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Speaker 4: it so that we're unique, Like we figure it out.

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Speaker 4: We have qualities that we can bring to bear that

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Speaker 4: not all of our competitors can. For example, you really

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Speaker 4: need to have both sides. You need retail to actually

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Speaker 4: be on the platform and to be serving customers who

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Speaker 4: are interesting in these products. You also need to get

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Speaker 4: the supply, and I think Robinhood is somewhat unique in

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Speaker 4: being able to actually do both of these things simultaneously.

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Speaker 4: And then we figure it out once and then we

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Speaker 4: turned the crank. So you know, you notice we named

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Speaker 4: it our VII Robinhood Fund one. We do anticipate there

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Speaker 4: will be other funds. We already have lots of ideas

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Speaker 4: of unique products we can offer, so it's really just

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Speaker 4: the first step.

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Speaker 3: So you mentioned being in Silicon Valley and being able

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Speaker 3: to source these deals, and this is the other thing

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Speaker 3: I wanted to ask you, because getting into a hot

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Speaker 3: price tech company at the moment seems incredibly competitive. And

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Speaker 3: Joe and I we go out when we talk to

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Speaker 3: a lot of venture capital funds and they always give

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Speaker 3: us the same pitch, which is, well, we're different. We

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Speaker 3: build long term relationships with our investments. How is Robinhood

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Speaker 3: actually competing in that space? And what I guess differentiates

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Speaker 3: you from a sort of classic VC.

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Speaker 4: Yeah. I mean a big one is we can say

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Speaker 4: that there's no carry on these funds, and what that

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Speaker 4: means is it's just the more we believe a more

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Speaker 4: investor friendly vehicle. Right, typical venture capital firm will charge

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Speaker 4: the management fee. There's also a carry on top, which

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Speaker 4: means every dollar past a hurdle rate, twenty percent of

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Speaker 4: that goes back to the fund manager. So it's more

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Speaker 4: investor friendly product. The other thing is, I think a

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Speaker 4: lot of these companies are interested in retail, and no

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Speaker 4: other venture capital firm can say, hey, actually urlp's de

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Speaker 4: facto not technically LPs, but the people investing in your

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Speaker 4: company and who will get the underlying exposure through this

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Speaker 4: fund are normal people, mom and pop, and I think

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Speaker 4: that's something that nobody else is offering. So that's a

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Speaker 4: unique differentiator, and some people don't like that, to be fair,

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Speaker 4: but other people really really like it and for those people,

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Speaker 4: and I think in the future less people will not

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Speaker 4: like it because of the uncertainty, and that'll just make

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Speaker 4: it more attractive. So the headwinds are receding headwinds. Right,

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Speaker 4: It's never going to be as difficult as it is

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Speaker 4: right now to get companies interested in it, and I

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Speaker 4: think it'll actually get substantially easier. We kind of went

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Speaker 4: through this with IPO access actually, so we have the

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Speaker 4: largest retail platform for access to IPOs where we function

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Speaker 4: as a selling group member. And you know, we first

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Speaker 4: rolled this out slightly before our IPO. The intent was

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Speaker 4: Robinood's IPO would be a big retail offering and I

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Speaker 4: think at the time it was the largest for its size.

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Speaker 4: It was a north of twenty percent retail allocation. And

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Speaker 4: the other companies that allowed us access to their IPOs

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Speaker 4: that year, I mean they were early adopters. They saw

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Speaker 4: the vision. We also just had to like scratch and

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Speaker 4: claw and bang on a lot of doors and ask

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Speaker 4: a lot of favors. Right, there was some skepticism. Then

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Speaker 4: the IPO market shut in twenty twenty two, and then

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Speaker 4: when we reopened, an interesting thing happened. Now everyone's coming

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Speaker 4: to us and asking us about retail strategy. Pretty much

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Speaker 4: all of the ipoing names are coming to us to

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Speaker 4: talk about retail, and so we saw that shift in

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Speaker 4: just a few years. I think this will be even

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Speaker 4: faster for privates.

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Speaker 2: I want to ask, so, okay, you mentioned the advantages,

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Speaker 2: is okay, there's no carry, there's things like that that

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Speaker 2: all sounds nice. I first see a potential conflict of

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Speaker 2: interest that I'd like you to talk to me about.

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Speaker 2: In a traditional VC fund, it's pretty obvious, like the

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Speaker 2: goal is to make a lot of money, right, You

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Speaker 2: make investments and you want them to go up. It

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Speaker 2: strikes me and especially when hearing the names of the

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Speaker 2: companies in RVII, it's like they're very sexy names, right.

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Speaker 2: They're the kind of household names to the extent that

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Speaker 2: that exists within private companies and boom and data bricks,

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Speaker 2: et cetera. It seems to me like the traditional VC fund,

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Speaker 2: like you're going to optimize for making the most money

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Speaker 2: the best returns, including names that no one has ever

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Speaker 2: heard of. Why should I not think that Robin Hood's

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Speaker 2: portfolio has been optimized for retail awareness, not for the

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Speaker 2: best returns, but for the collection of companies that will

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Speaker 2: spark the most triggers in people's heads to get them

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Speaker 2: invests because they've heard of them and they're sexy and

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Speaker 2: not necessarily the best options out there in terms of investing.

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Speaker 4: Well, I mean, first of all, we are incentive to

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Speaker 4: make this firm perform well. Right, everyone will see it.

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Speaker 4: It's going to be highly public. The returns will just

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Speaker 4: be out there, and you know, we have a fiduciary obligation.

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Speaker 4: We've got a great fund manager that we've hired, and

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Speaker 4: we're underwriting all of these deals extremely rigorously.

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Speaker 2: Think Think.

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Speaker 4: The biggest worry that you have with things like this

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Speaker 4: is actually adverse selection, right, is are you just going

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Speaker 4: to get into the deals of the companies that need

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Speaker 4: the money and are desperate for it. This is what

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Speaker 4: you run into with like new things. Typically, it's like,

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Speaker 4: when am I going to start?

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Speaker 2: This seems like what I think because I've got Like

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Speaker 2: I mentioned this another episode, someone was like, Joe, someone

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Speaker 2: is selling some anthropic shares with this. Interesting. I'm not

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Speaker 2: investing in companies I cover in the private market, so

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Speaker 2: I'm not gonna do it. But like I always have

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Speaker 2: the thought, like, you know, if someone's offering to sell

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Speaker 2: it to me, they must really want to.

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Speaker 3: When they're asking us.

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Speaker 2: When they're like offering the equity to Joe, like that's

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Speaker 2: like a bad sign. Not necessarily a bad sign, but

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Speaker 2: that adverse selection of like by the time it's getting

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Speaker 2: allocated to retail, like a bunch of people have decided

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Speaker 2: to part with it.

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Speaker 4: We have to flip that on its head. And actually

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Speaker 4: all of the deals that we've gotten into have been

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Speaker 4: competitive deals, Like we've had to work for these allocations.

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Speaker 4: You know, I've had I have a lot of friends

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Speaker 4: that are venture capitalists, and I think some of them

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Speaker 4: like I've been talking about this for a while, this

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Speaker 4: general idea of we want to get in and actually

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Speaker 4: start competing with you guys, you know, and they never

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Speaker 4: took me seriously. But then we started, you know, getting

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Speaker 4: allocations and deals that they wanted allocations in, and I've

402
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Speaker 4: started getting calls and they've been telling me, Hey, this

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Speaker 4: Robinhood venture is real thing. I have to contend with

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Speaker 4: you now. So I think we're very proud of the

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Speaker 4: companies that we've gotten thus far. I think you made.

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Speaker 2: The point that one of the drawbacks is liquidity, which

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Speaker 2: is always going to be a phenomenon in private markets.

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Speaker 2: Another drawback to this is that the investor doesn't know anything.

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Speaker 2: There's no ten queues, there's no earnings calls or anything

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Speaker 2: like that, and you know, you don't know, Okay, you

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Speaker 2: own some tiny slice of a private company, whether via

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Speaker 2: a token or whether via RVII, you don't really know

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Speaker 2: what the share count is. You don't know like how

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Speaker 2: much have they like allocated to employees this quarter? Because

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Speaker 2: they're there no obligation to think that are we heading

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Speaker 2: towards the world do you think in which the rade

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Speaker 2: off It's like, okay, investors can get access to almost

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Speaker 2: everything via some instrument. What are we heading to a

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Speaker 2: world where the flip side is and they're going to

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Speaker 2: know a lot less about the companies that they've invested in.

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Speaker 4: I don't think so. I don't worry about that. And

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Speaker 4: in fact, one of the innovations that we've were putting

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Speaker 4: out there with the launch of this offering is private

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Speaker 4: company detail pages, so you'll actually be able to search

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Speaker 4: for the private companies themselves in robinhood and see all

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Speaker 4: of the information.

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Speaker 2: But they're not going to like they're like revenues like earning,

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Speaker 2: like all the traditional met like they're not.

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Speaker 4: It's publicly available information what they've chosen to share, but

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Speaker 4: it's all in one place, and you get a lot

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Speaker 4: of useful stuff in there. You see the valuation history,

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Speaker 4: so you can see like you know, the chart of

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Speaker 4: companies like data breaks for example. Yeah, and I think

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00:22:48,280 --> 00:22:50,840
Speaker 4: there's just a lot of information out there. I mean,

435
00:22:50,840 --> 00:22:54,280
Speaker 4: if you think about investing in a private company today

436
00:22:54,880 --> 00:22:58,720
Speaker 4: versus a retail investor investing in a public company, say

437
00:22:58,720 --> 00:23:01,639
Speaker 4: in the eighties, I venture to say, there's more information

438
00:23:02,240 --> 00:23:05,920
Speaker 4: you have like app store, analytics data for consumer products.

439
00:23:06,200 --> 00:23:08,840
Speaker 4: They're out there. A lot of these late stage privates

440
00:23:09,160 --> 00:23:12,639
Speaker 4: are doing public company like disclosures and audits on a

441
00:23:12,680 --> 00:23:16,240
Speaker 4: regular basis, because this isn't you know, these aren't hundred

442
00:23:16,240 --> 00:23:19,960
Speaker 4: million dollar companies. These are you know, some of them

443
00:23:19,960 --> 00:23:22,600
Speaker 4: are in the hundreds of billions of valuations, tens of

444
00:23:22,640 --> 00:23:26,640
Speaker 4: billions probably fifteen years ago. These would have gone public

445
00:23:26,840 --> 00:23:29,919
Speaker 4: a while ago. So I mean we've generally started with

446
00:23:30,040 --> 00:23:36,040
Speaker 4: household names with some exceptions that are already established at

447
00:23:36,040 --> 00:23:39,560
Speaker 4: the frontiers of the industries. And these are like the

448
00:23:39,600 --> 00:23:42,520
Speaker 4: companies that would be closest to being public. So if

449
00:23:42,520 --> 00:23:45,920
Speaker 4: you think about you know, public company IPO access candidate,

450
00:23:46,160 --> 00:23:52,719
Speaker 4: robinhood Ventures, Robinhood Ventures is filling. It's like gradually extending backward. Actually,

451
00:23:52,760 --> 00:23:55,240
Speaker 4: the thing I'm most excited about, if I had to

452
00:23:55,840 --> 00:23:59,840
Speaker 4: point to something, it's eventually getting to the earliest possible stages.

453
00:24:00,359 --> 00:24:03,320
Speaker 4: Like I think retail should be funding seed rounds, Like

454
00:24:03,359 --> 00:24:07,640
Speaker 4: the first capital in a company should have a retail participation.

455
00:24:08,400 --> 00:24:12,080
Speaker 4: And I think we hear from the customers. One of

456
00:24:12,080 --> 00:24:15,679
Speaker 4: the concerns is, well, these companies are fairly late stage.

457
00:24:16,119 --> 00:24:18,879
Speaker 4: How do I get exposure to something that's earlier so

458
00:24:18,920 --> 00:24:20,840
Speaker 4: I can get in on the ground floor. And I

459
00:24:20,880 --> 00:24:23,879
Speaker 4: think that's something we're excited to dig into and work on.

460
00:24:24,240 --> 00:24:27,440
Speaker 3: Would that be like a GoFundMe competitor or something, because

461
00:24:27,440 --> 00:24:29,520
Speaker 3: there are some good at starters.

462
00:24:30,920 --> 00:24:33,520
Speaker 4: Well, the difference is with those products you don't actually

463
00:24:33,560 --> 00:24:36,840
Speaker 4: get any ownership. You're giving you're making a get.

464
00:24:36,720 --> 00:24:38,520
Speaker 3: Early products, I guess, but that's about it.

465
00:24:38,640 --> 00:24:40,920
Speaker 4: Yeah, But what they want is ownership. They want to

466
00:24:40,960 --> 00:24:43,960
Speaker 4: invest in something when it's at a valuation of say

467
00:24:44,040 --> 00:24:47,280
Speaker 4: ten million, and if it gets to ten billion, that's.

468
00:24:47,119 --> 00:24:49,080
Speaker 2: A and then they'll learn that ninety nine percent of

469
00:24:49,080 --> 00:24:51,000
Speaker 2: those companies go to zero, but they have to learn

470
00:24:51,040 --> 00:24:51,960
Speaker 2: that lesson for themselves.

471
00:24:51,960 --> 00:24:54,000
Speaker 4: It sounds like, well, you know, that's where we come in, right,

472
00:24:54,040 --> 00:24:56,920
Speaker 4: and we think that we can, like we can figure

473
00:24:56,960 --> 00:25:00,280
Speaker 4: out what what the right deals are and what what

474
00:25:00,320 --> 00:25:04,840
Speaker 4: we intend to do is offer great companies to customers.

475
00:25:05,160 --> 00:25:07,320
Speaker 3: Well, on this note, and just going back to the

476
00:25:07,400 --> 00:25:10,359
Speaker 3: Ventures fund as well. I mean, one other issue I

477
00:25:10,480 --> 00:25:13,760
Speaker 3: foresee is that you see a lot of flow and

478
00:25:13,840 --> 00:25:16,800
Speaker 3: information in the market, and you can imagine some of

479
00:25:16,880 --> 00:25:20,199
Speaker 3: your competitors potentially thinking that, you know, maybe some of

480
00:25:20,200 --> 00:25:23,200
Speaker 3: that flow would inform how the fund is actually managed.

481
00:25:23,440 --> 00:25:25,199
Speaker 3: I mean in some respects like you're starting to get

482
00:25:25,240 --> 00:25:28,560
Speaker 3: a little bit investment banky where you have this huge

483
00:25:28,600 --> 00:25:31,200
Speaker 3: flow business that you can glean market insights from, and

484
00:25:31,240 --> 00:25:34,680
Speaker 3: then you also have managed funds. How are you sort

485
00:25:34,680 --> 00:25:38,199
Speaker 3: of hiving off those two activities or how are you

486
00:25:38,240 --> 00:25:40,760
Speaker 3: thinking about how like the data and the flow data

487
00:25:40,800 --> 00:25:43,560
Speaker 3: that you see, how will that actually inform management?

488
00:25:43,960 --> 00:25:47,479
Speaker 4: Yeah, I mean certainly one of the advantages is we

489
00:25:47,520 --> 00:25:49,439
Speaker 4: know what retail investors are interested in.

490
00:25:49,520 --> 00:25:50,600
Speaker 2: Yeah, And by and.

491
00:25:50,640 --> 00:25:54,400
Speaker 4: Large, what we try to do is give people things

492
00:25:54,400 --> 00:25:56,600
Speaker 4: they're interested in. You know, if they're not interested in it,

493
00:25:56,600 --> 00:25:59,000
Speaker 4: it's not going to be a successful product. So I

494
00:25:59,000 --> 00:26:02,000
Speaker 4: think that's a big differentiator as we think about this

495
00:26:02,119 --> 00:26:05,280
Speaker 4: product in terms of how the fund is managed. It

496
00:26:05,320 --> 00:26:09,280
Speaker 4: has a separate board with great board members, separate you know,

497
00:26:09,359 --> 00:26:13,960
Speaker 4: everything auditing, compliance, So it's like a company within robin Hood,

498
00:26:14,080 --> 00:26:15,080
Speaker 4: the management company.

499
00:26:15,040 --> 00:26:16,959
Speaker 3: Yeah, so there's a Chinese wall effectively.

500
00:26:17,320 --> 00:26:21,679
Speaker 4: Well, you know, you get into legal questions that I

501
00:26:21,680 --> 00:26:23,280
Speaker 4: don't even know if that word is appropriate.

502
00:26:23,320 --> 00:26:25,159
Speaker 3: I was going to say, I don't think we're supposed

503
00:26:25,160 --> 00:26:27,080
Speaker 3: to use that anymore, so I'm sorry.

504
00:26:26,800 --> 00:26:29,800
Speaker 4: But yeah, of course you can imagine everything that we

505
00:26:29,920 --> 00:26:34,920
Speaker 4: do is highly regulated and scrutinized by armies of professionals.

506
00:26:35,080 --> 00:26:37,919
Speaker 4: So yeah, that's that's the one thing. We were so

507
00:26:39,119 --> 00:26:42,200
Speaker 4: established at this point that we have to play everything

508
00:26:42,240 --> 00:26:42,840
Speaker 4: by the books.

509
00:26:58,600 --> 00:27:00,880
Speaker 2: Can we talk about prediction mark, Yeah for a little bit,

510
00:27:01,200 --> 00:27:03,479
Speaker 2: have a lot, we have a lot of questions about this.

511
00:27:03,760 --> 00:27:06,720
Speaker 2: You have a relationship with Kelshy, so people can actually

512
00:27:06,760 --> 00:27:12,399
Speaker 2: access Kelshi's markets through the robin Hood platform. When trying

513
00:27:12,400 --> 00:27:16,040
Speaker 2: to understand who is going to make money in prediction markets,

514
00:27:16,200 --> 00:27:21,080
Speaker 2: which is more valuable the liquidity pool and activity that's

515
00:27:21,160 --> 00:27:26,600
Speaker 2: emerged on Kelshi or the distribution that you have through

516
00:27:26,920 --> 00:27:30,320
Speaker 2: Robinhood and like, which is the harder thing to replicate here.

517
00:27:30,640 --> 00:27:34,080
Speaker 4: Yeah, I mean it's fundamentally too different businesses. Right. You

518
00:27:34,119 --> 00:27:37,800
Speaker 4: can think of Calshi in this case playing a role

519
00:27:37,880 --> 00:27:42,720
Speaker 4: similar to an exchange in the equities and options markets. Yeah,

520
00:27:42,760 --> 00:27:48,520
Speaker 4: so it's like institutional business predominantly, although in CFTC Land

521
00:27:48,880 --> 00:27:51,520
Speaker 4: it's interesting that the exchanges also have the ability to

522
00:27:51,560 --> 00:27:54,840
Speaker 4: go direct to consumer, which you don't see in in

523
00:27:54,920 --> 00:27:59,439
Speaker 4: traditional equities. And it's a business where you're matching orders,

524
00:28:00,320 --> 00:28:03,680
Speaker 4: so you're working with market makers, you're working with professional traders.

525
00:28:03,840 --> 00:28:07,280
Speaker 4: You have retail as well, and to win there you

526
00:28:07,359 --> 00:28:10,639
Speaker 4: have to have great technology, low latency, you have to

527
00:28:11,119 --> 00:28:17,200
Speaker 4: be good about listing products, maintaining market integrity. And it's

528
00:28:17,320 --> 00:28:21,280
Speaker 4: like a complex business, right, And that's why the businesses

529
00:28:21,320 --> 00:28:24,960
Speaker 4: that have gotten scale and traditional assets are worth tens

530
00:28:24,960 --> 00:28:29,720
Speaker 4: of billions of dollars sometimes more. We have a slightly

531
00:28:29,800 --> 00:28:33,600
Speaker 4: different business model. The way to think about Robinhood is

532
00:28:33,640 --> 00:28:36,000
Speaker 4: where a financial super app we should be the best

533
00:28:36,040 --> 00:28:39,880
Speaker 4: place to keep your money and your assets, and we're

534
00:28:39,920 --> 00:28:42,000
Speaker 4: building products to make sure more and more of your

535
00:28:42,040 --> 00:28:45,239
Speaker 4: financial life. Ideally, all of it is on Robinhood. So

536
00:28:45,560 --> 00:28:48,840
Speaker 4: if you want to trade prediction markets, options futures, you're

537
00:28:48,840 --> 00:28:51,720
Speaker 4: an active trader, we should get one hundred percent of

538
00:28:51,760 --> 00:28:54,560
Speaker 4: your active trading activity, and we compete for that. We

539
00:28:54,600 --> 00:28:58,680
Speaker 4: also want your retirement account, your kids, custodial accounts, your trusts,

540
00:28:59,000 --> 00:29:02,760
Speaker 4: all of your mutual fund. Eventually, you're spending activity through

541
00:29:02,760 --> 00:29:06,560
Speaker 4: our card product, you're banking through checking and savings. So

542
00:29:06,680 --> 00:29:10,600
Speaker 4: it's really about how do we own the entire financial

543
00:29:10,680 --> 00:29:14,800
Speaker 4: relationship and we vertically integrate where it makes sense, where

544
00:29:14,800 --> 00:29:17,560
Speaker 4: we think we have a unique advantage. But it's not

545
00:29:17,680 --> 00:29:22,880
Speaker 4: like a focused exchange business, although you know, I should

546
00:29:22,920 --> 00:29:27,040
Speaker 4: say we entered into an agreement. We've acquired a stake

547
00:29:27,440 --> 00:29:31,000
Speaker 4: in rather Era, which is formerly ledger x, which is

548
00:29:31,160 --> 00:29:35,120
Speaker 4: a DCM, So we do intend to actually vertically integrate

549
00:29:35,160 --> 00:29:36,960
Speaker 4: the prediction market side of the business.

550
00:29:37,920 --> 00:29:40,320
Speaker 3: So one of the things we often hear in defense

551
00:29:40,360 --> 00:29:43,000
Speaker 3: of prediction markets is this idea that like, well, actually,

552
00:29:43,160 --> 00:29:45,760
Speaker 3: if you're an institutional investor, this could be a way

553
00:29:45,880 --> 00:29:49,000
Speaker 3: to hedge some exposure that you have. So I don't know,

554
00:29:49,000 --> 00:29:51,320
Speaker 3: if you're an airline and a huge part of your

555
00:29:51,320 --> 00:29:53,880
Speaker 3: expense account is oil, maybe you would take a position

556
00:29:54,000 --> 00:29:56,960
Speaker 3: on what's happening in Iran or something like that. Yeah,

557
00:29:57,000 --> 00:29:59,280
Speaker 3: I know that. Or if you're a retail investor, well,

558
00:29:59,320 --> 00:30:00,720
Speaker 3: this was going to be my next question. I know

559
00:30:00,800 --> 00:30:03,760
Speaker 3: that you see mostly how retail investors are behaving, But

560
00:30:03,760 --> 00:30:06,000
Speaker 3: do you see any evidence that people are like thinking

561
00:30:06,080 --> 00:30:10,120
Speaker 3: through it that systemically versus just like placing a bet

562
00:30:10,280 --> 00:30:13,320
Speaker 3: on whatever particular contract kind of catches their eye.

563
00:30:13,520 --> 00:30:15,920
Speaker 4: Yeah, I mean, I think there's lots of stories out

564
00:30:15,920 --> 00:30:20,080
Speaker 4: there that have been covered about people being incredibly scientific

565
00:30:20,360 --> 00:30:24,640
Speaker 4: about all their trading and prediction. Markets gives you a

566
00:30:24,720 --> 00:30:27,680
Speaker 4: wide surface area to do that under. I mean you

567
00:30:27,760 --> 00:30:30,840
Speaker 4: have obviously the sports contracts, which everyone likes to talk about,

568
00:30:30,880 --> 00:30:35,920
Speaker 4: but economics, you've got a contract on alien disclosure, which

569
00:30:36,040 --> 00:30:39,040
Speaker 4: I really that's one of my favorite ones. Last I

570
00:30:39,120 --> 00:30:42,160
Speaker 4: tracked twenty two percent chance that there will be alien

571
00:30:42,200 --> 00:30:44,560
Speaker 4: disclosure by the US government this year.

572
00:30:44,600 --> 00:30:47,000
Speaker 3: At rising I think rising recently after all the WHI.

573
00:30:47,000 --> 00:30:50,400
Speaker 4: Well, there's been some chatter about it for sure, But yeah,

574
00:30:50,520 --> 00:30:53,600
Speaker 4: I mean I think that, like there's people out there

575
00:30:53,640 --> 00:30:57,360
Speaker 4: that are studying these things in detail. They're building models,

576
00:30:57,840 --> 00:31:01,120
Speaker 4: and what you find is with any nascent market, before

577
00:31:01,160 --> 00:31:06,080
Speaker 4: you get like full institutional participation, there's more opportunities, and

578
00:31:06,120 --> 00:31:10,160
Speaker 4: I think now we're before the point where these opportunities

579
00:31:10,200 --> 00:31:12,800
Speaker 4: are arbitraged by the big players.

580
00:31:13,120 --> 00:31:16,960
Speaker 2: I asked this question recently to CFTC Chairman Michael Seelig,

581
00:31:17,080 --> 00:31:19,760
Speaker 2: and I think we kind of got a no answer,

582
00:31:19,800 --> 00:31:21,800
Speaker 2: if I'm being honest, So maybe I'll try it with

583
00:31:21,880 --> 00:31:26,320
Speaker 2: you as you understand it today. Would there be any

584
00:31:26,600 --> 00:31:30,720
Speaker 2: limitation legally on Robin Hood setting up a live stream

585
00:31:30,880 --> 00:31:34,760
Speaker 2: of a giant roulette wheel and having people make futures

586
00:31:34,840 --> 00:31:37,000
Speaker 2: event contracts on whether it's red or black?

587
00:31:37,520 --> 00:31:41,880
Speaker 4: Yeah, I mean currently our policy has been to have

588
00:31:42,000 --> 00:31:45,640
Speaker 4: them be backed by real events, So we don't want

589
00:31:45,680 --> 00:31:50,360
Speaker 4: to do like derivative. We haven't done any derivative prediction markets.

590
00:31:50,440 --> 00:31:54,160
Speaker 4: And there's different forms of that as well, Like you

591
00:31:54,280 --> 00:31:56,920
Speaker 4: have like prediction markets, and then you have a prediction

592
00:31:57,040 --> 00:32:00,400
Speaker 4: market on how this prediction market is to go.

593
00:32:00,800 --> 00:32:04,479
Speaker 2: So like, for example, polymarket had a market where it

594
00:32:04,520 --> 00:32:06,160
Speaker 2: was the coin toss at the Super Bowl you could

595
00:32:06,160 --> 00:32:08,280
Speaker 2: bet on heads or tails and was trading a fifty

596
00:32:08,320 --> 00:32:10,280
Speaker 2: percent yeah for the toss. Then it went to it.

597
00:32:10,400 --> 00:32:12,440
Speaker 3: Yeah, it seems very much like gambling, right.

598
00:32:12,320 --> 00:32:14,920
Speaker 2: Well, like why even bother having the Super Bowl. At

599
00:32:14,920 --> 00:32:17,160
Speaker 2: that point, if people are willing to like bet money

600
00:32:17,240 --> 00:32:19,640
Speaker 2: on a coin toss why not just have a continuous

601
00:32:19,680 --> 00:32:21,680
Speaker 2: coin tok Well, I just forget the Super Bowl. Just

602
00:32:21,680 --> 00:32:24,760
Speaker 2: have a coin tossing machine and let people trade on it.

603
00:32:24,800 --> 00:32:27,520
Speaker 2: Is there, like, is there anything actually like stopping you

604
00:32:27,600 --> 00:32:28,120
Speaker 2: from doing that?

605
00:32:28,560 --> 00:32:31,960
Speaker 4: I'm not sure. Yeah, I mean I'd have to look

606
00:32:32,000 --> 00:32:35,920
Speaker 4: into that. We don't offer any of those contracts. I personally,

607
00:32:36,280 --> 00:32:39,760
Speaker 4: you know, I'm a former trader, probably wouldn't trade those.

608
00:32:39,880 --> 00:32:43,600
Speaker 4: I think the purposes for people trading them is probably

609
00:32:43,640 --> 00:32:47,240
Speaker 4: more entertainment. But yeah, that's not to say that all

610
00:32:47,320 --> 00:32:50,680
Speaker 4: prediction markets are like that. And I'm not against people

611
00:32:50,840 --> 00:32:56,040
Speaker 4: innovating because that's how we discover things. Right Like, generally speaking,

612
00:32:56,240 --> 00:32:58,520
Speaker 4: I'm in favor of people trying new things and seeing

613
00:32:58,520 --> 00:33:01,000
Speaker 4: what happens, as long as nobody is getting heart and

614
00:33:01,160 --> 00:33:04,280
Speaker 4: you know, market integrity and investor protection, all of that

615
00:33:04,400 --> 00:33:05,120
Speaker 4: is being upheld.

616
00:33:05,360 --> 00:33:08,000
Speaker 2: Just on the relationship with kel, she like, you want

617
00:33:08,040 --> 00:33:11,400
Speaker 2: to be this one stop shop for all money. Presumably

618
00:33:11,440 --> 00:33:14,520
Speaker 2: they're polymarket is going to build out its US version.

619
00:33:15,280 --> 00:33:18,480
Speaker 2: I don't know exactly what's dated that. There's my other competitors.

620
00:33:18,960 --> 00:33:20,960
Speaker 2: Is that going to be an exclusive thing or will

621
00:33:21,000 --> 00:33:23,600
Speaker 2: you will is the goal, so that a user of

622
00:33:23,680 --> 00:33:26,120
Speaker 2: Robinhood can trade predictions on any platform.

623
00:33:26,280 --> 00:33:30,320
Speaker 4: Yeah, so even currently our relationship, we connect to multiple

624
00:33:30,520 --> 00:33:35,959
Speaker 4: prediction market back end exchanges. Calshie obviously is the larger

625
00:33:36,400 --> 00:33:40,640
Speaker 4: because they have the vibrant sports contracts and they've been

626
00:33:40,640 --> 00:33:43,800
Speaker 4: moving fast. We also have forecast Decks, which is the

627
00:33:43,960 --> 00:33:49,240
Speaker 4: prediction markets subsidiary of Interactive Brokers, and as I mentioned before,

628
00:33:49,360 --> 00:33:52,560
Speaker 4: we've got rother Thera, which is which is ours. And

629
00:33:52,720 --> 00:33:56,360
Speaker 4: also we're continuing to talk to these guys. Everyone's interested in,

630
00:33:56,960 --> 00:34:00,640
Speaker 4: you know, having access to Robinhood customers sending our or there.

631
00:34:01,040 --> 00:34:03,080
Speaker 4: And I think the way this plays out is similar

632
00:34:03,120 --> 00:34:07,080
Speaker 4: to our other asset classes, where we prioritize for where

633
00:34:07,080 --> 00:34:09,600
Speaker 4: the customer is going to get the best execution and

634
00:34:09,680 --> 00:34:14,440
Speaker 4: also contract variety, and we'll send our orders there. And

635
00:34:14,480 --> 00:34:17,240
Speaker 4: I think where this ends up is you'll have lots

636
00:34:17,239 --> 00:34:21,120
Speaker 4: and lots of destinations, you'll have smart order routing, and

637
00:34:21,680 --> 00:34:25,160
Speaker 4: the contracts I think will be increasingly fungible. So at

638
00:34:25,200 --> 00:34:28,360
Speaker 4: some point there's going to be a way to cross

639
00:34:28,400 --> 00:34:31,560
Speaker 4: books and actually offload risk. And you know, you'll have

640
00:34:31,680 --> 00:34:36,080
Speaker 4: the election contract here an election contract there and there

641
00:34:36,120 --> 00:34:39,640
Speaker 4: will be a layer where you can actually like even

642
00:34:39,680 --> 00:34:43,000
Speaker 4: though there's technically on different exchanges, exchange one for the other.

643
00:34:43,280 --> 00:34:45,200
Speaker 3: I'd say more about this because this was actually going

644
00:34:45,239 --> 00:34:47,720
Speaker 3: to be my next question. But when you think about

645
00:34:47,719 --> 00:34:51,359
Speaker 3: what makes a good prediction market, the complaint that we

646
00:34:51,400 --> 00:34:53,680
Speaker 3: often hear is, well, there's just not enough size, there's

647
00:34:53,680 --> 00:34:56,640
Speaker 3: not enough liquidity in the contract. So I imagine a

648
00:34:56,640 --> 00:34:59,279
Speaker 3: big component of who you're partnering with is just like

649
00:34:59,680 --> 00:35:03,040
Speaker 3: the law largest platform that's out there, like a CALCI.

650
00:35:03,640 --> 00:35:07,360
Speaker 3: But can you describe, like actually what you think makes

651
00:35:07,480 --> 00:35:10,279
Speaker 3: a good prediction market for investors, Like what are the

652
00:35:10,320 --> 00:35:11,480
Speaker 3: pros and cons of each one?

653
00:35:11,760 --> 00:35:15,239
Speaker 4: Yeah? I mean I think volume and liquidity and contract

654
00:35:15,280 --> 00:35:20,040
Speaker 4: selection are the big things. Contract selection. Customers want selection,

655
00:35:20,120 --> 00:35:22,320
Speaker 4: they want variety, they want to be able to explore,

656
00:35:22,719 --> 00:35:26,440
Speaker 4: and both traders value this because they can trade more things,

657
00:35:26,719 --> 00:35:29,839
Speaker 4: but also the casual use case of just looking at

658
00:35:29,840 --> 00:35:33,319
Speaker 4: the markets and figuring out what the odds of events are.

659
00:35:34,000 --> 00:35:38,920
Speaker 4: Liquidity obviously improves things. It improves the prices and also

660
00:35:39,280 --> 00:35:42,680
Speaker 4: improves the odds of getting filled if you bring in

661
00:35:42,719 --> 00:35:47,480
Speaker 4: an order with size and costs transaction costs. Yeah, yeah,

662
00:35:47,480 --> 00:35:50,680
Speaker 4: I mean, I think those are basically the main things.

663
00:35:51,000 --> 00:35:55,880
Speaker 2: It's very easy with prediction markets to replicate things that

664
00:35:55,920 --> 00:35:57,960
Speaker 2: we don't think of his event contracts. So you can

665
00:35:58,239 --> 00:36:02,600
Speaker 2: recreate a line that like equity or futures on a

666
00:36:02,640 --> 00:36:05,560
Speaker 2: prediction market, you could you know, you could have and

667
00:36:05,680 --> 00:36:06,680
Speaker 2: I'm curious, like.

668
00:36:06,800 --> 00:36:08,680
Speaker 4: And I think some of those products are very useful.

669
00:36:08,800 --> 00:36:12,200
Speaker 2: Yeah, that's exactly what, guest. Do you see era a

670
00:36:12,320 --> 00:36:17,040
Speaker 2: point where, particularly from the perspective of a trader, where

671
00:36:17,160 --> 00:36:21,799
Speaker 2: essentially the exchange itself can be disrupted or sort of

672
00:36:22,120 --> 00:36:25,839
Speaker 2: napsterized or something like that because they have the instruments

673
00:36:25,840 --> 00:36:29,240
Speaker 2: to get the price exposure that they want without having

674
00:36:29,320 --> 00:36:32,200
Speaker 2: to interact with the traditional equity layer.

675
00:36:33,040 --> 00:36:36,799
Speaker 4: I think it's different. You know, I think that obviously

676
00:36:37,000 --> 00:36:43,239
Speaker 4: equity exposure is extremely low cost right now, Yeah, in

677
00:36:43,360 --> 00:36:45,680
Speaker 4: large part due to our efforts in the space. But

678
00:36:45,800 --> 00:36:48,680
Speaker 4: if you want to buy an equity, I mean, it's

679
00:36:48,719 --> 00:36:53,480
Speaker 4: just never been cheaper. Are all in monetization on equities

680
00:36:53,520 --> 00:36:57,920
Speaker 4: business is like two basis points, So I don't really

681
00:36:57,960 --> 00:37:01,480
Speaker 4: think it's competitive with that product. The other thing is

682
00:37:01,520 --> 00:37:05,200
Speaker 4: you have leverage, which again Robinhood for our active traders

683
00:37:05,400 --> 00:37:09,440
Speaker 4: great margin rates. I mean I think the most competitive

684
00:37:09,440 --> 00:37:11,920
Speaker 4: margin rates in the industry, at least that I'm aware of.

685
00:37:12,440 --> 00:37:14,640
Speaker 2: Will you provide leverage to prediction market traders?

686
00:37:14,920 --> 00:37:18,239
Speaker 4: Right now, leverage is not permissible at prediction markets, but

687
00:37:18,280 --> 00:37:20,279
Speaker 4: that's something a lot of people are talking about and

688
00:37:20,440 --> 00:37:24,160
Speaker 4: that you're about, Well, it's I guess we're working on

689
00:37:24,160 --> 00:37:27,400
Speaker 4: it to some degree, which is just driving towards clarity.

690
00:37:27,600 --> 00:37:30,920
Speaker 4: But since that would have to be an exchange product,

691
00:37:31,400 --> 00:37:34,240
Speaker 4: the exchanges would actually have to have to get clarity.

692
00:37:34,719 --> 00:37:36,680
Speaker 4: But I think it's coming. Look, I mean, I don't

693
00:37:36,719 --> 00:37:40,560
Speaker 4: think you could. You can imagine the market's still in

694
00:37:40,600 --> 00:37:44,200
Speaker 4: its infancy, so you'll get all of these things introduced.

695
00:37:44,640 --> 00:37:46,840
Speaker 4: And when you look at the options markets for traders,

696
00:37:47,200 --> 00:37:51,359
Speaker 4: the leverage is actually a very attractive element of it,

697
00:37:51,440 --> 00:37:54,520
Speaker 4: being able to put in a relatively small amount of

698
00:37:54,520 --> 00:37:57,920
Speaker 4: money and get large exposure. So I think there's a

699
00:37:57,960 --> 00:38:02,360
Speaker 4: lot that prediction markets. There's a lot of growth and

700
00:38:02,480 --> 00:38:05,279
Speaker 4: a lot of evolution that's needed before it becomes like

701
00:38:05,440 --> 00:38:09,880
Speaker 4: a full institutional grade asset. But it's underway, and we

702
00:38:09,880 --> 00:38:12,319
Speaker 4: should assume that it's going to happen, and it's going

703
00:38:12,360 --> 00:38:15,160
Speaker 4: to happen quickly. And I think there's all sorts of

704
00:38:15,920 --> 00:38:19,240
Speaker 4: we view this and we have early insight because we're actually,

705
00:38:19,440 --> 00:38:21,920
Speaker 4: I think one of the only places where you can

706
00:38:22,120 --> 00:38:24,640
Speaker 4: have all these assets in one place. We don't see

707
00:38:24,680 --> 00:38:28,120
Speaker 4: any cannibalization. Traders love it, and I think we see

708
00:38:28,120 --> 00:38:31,919
Speaker 4: an opportunity in combining all of these assets into one

709
00:38:32,280 --> 00:38:35,840
Speaker 4: cohesive picture. For example, you can imagine you have a

710
00:38:35,880 --> 00:38:39,640
Speaker 4: particular equity. In that equity detail page, say it's a

711
00:38:39,719 --> 00:38:43,560
Speaker 4: Tesla or another company, you see prediction markets related to

712
00:38:44,280 --> 00:38:47,080
Speaker 4: that company, and then that gives you a comprehensive view

713
00:38:47,080 --> 00:38:50,040
Speaker 4: and you can trade very specific things. We think there's

714
00:38:50,040 --> 00:38:52,719
Speaker 4: a big opportunity in earnings as well. A lot of

715
00:38:52,800 --> 00:38:55,040
Speaker 4: people have thoughts on how companies are going to do

716
00:38:55,080 --> 00:38:58,560
Speaker 4: with earnings. They have models. Stock price is an imperfect

717
00:38:58,600 --> 00:39:03,120
Speaker 4: proxy for that. So the EPs and revenue contract directly

718
00:39:03,160 --> 00:39:05,920
Speaker 4: would be would be very attractive. And right now, that's

719
00:39:05,960 --> 00:39:08,720
Speaker 4: in a little bit of a limbo because it meets

720
00:39:08,760 --> 00:39:12,239
Speaker 4: the criteria of a securities based swap, which would be

721
00:39:12,280 --> 00:39:17,440
Speaker 4: an sec product. Right so harmonization is needed to clear

722
00:39:17,480 --> 00:39:20,400
Speaker 4: the path for listing products like that, which we're working

723
00:39:20,440 --> 00:39:23,879
Speaker 4: with the regulators and collaborating to try to figure out.

724
00:39:24,560 --> 00:39:27,080
Speaker 4: But yeah, it's it's it's exciting from like a market

725
00:39:27,200 --> 00:39:30,000
Speaker 4: node standpoint because we're in the early innings and you

726
00:39:30,000 --> 00:39:31,799
Speaker 4: can kind of see the future of how it's going

727
00:39:31,880 --> 00:39:34,120
Speaker 4: to evolve. It's going to be a much bigger asset class,

728
00:39:34,200 --> 00:39:38,280
Speaker 4: much more institutional. It's evolved similar I think it'll evolve

729
00:39:38,360 --> 00:39:41,640
Speaker 4: similarly but more quickly to other asset classes that have

730
00:39:41,719 --> 00:39:42,840
Speaker 4: come in in the past.

731
00:39:43,080 --> 00:39:45,480
Speaker 3: Just going back to token nice stocks for a second,

732
00:39:46,000 --> 00:39:50,080
Speaker 3: does consent matter at all? That sounded more like epsteinish

733
00:39:50,120 --> 00:39:52,680
Speaker 3: than intended it to sound like. But like, if an

734
00:39:52,719 --> 00:39:54,920
Speaker 3: open aye comes out and says like, we have some

735
00:39:55,000 --> 00:39:58,719
Speaker 3: reservations about this, we have some concerns, would that give

736
00:39:58,760 --> 00:40:02,799
Speaker 3: you pause for providing token in that particular company? And

737
00:40:02,840 --> 00:40:05,080
Speaker 3: then you know, your role in the market is expanding

738
00:40:05,200 --> 00:40:08,000
Speaker 3: as you start these new venture funds and things like that.

739
00:40:08,480 --> 00:40:12,160
Speaker 3: You might not want to annoy a bunch of private

740
00:40:12,200 --> 00:40:16,240
Speaker 3: companies at this stage. So how are you balancing those considerations?

741
00:40:16,400 --> 00:40:20,200
Speaker 4: Yeah, these are all considerations that we're thinking through. Obviously

742
00:40:20,480 --> 00:40:23,440
Speaker 4: right now. The policy that we have is we'd like

743
00:40:23,480 --> 00:40:26,080
Speaker 4: to get the consent of the companies. We want them

744
00:40:26,080 --> 00:40:28,719
Speaker 4: to be on board. I think that if you think

745
00:40:28,760 --> 00:40:32,640
Speaker 4: about it from now now here's the nuance. Let's say

746
00:40:32,719 --> 00:40:37,760
Speaker 4: you're an accredited high net worth individual. There are ways

747
00:40:37,800 --> 00:40:42,520
Speaker 4: to get exposure to these companies without the company consenting. Right,

748
00:40:42,960 --> 00:40:45,600
Speaker 4: they just don't care. But legally you have a mechan

749
00:40:45,680 --> 00:40:50,040
Speaker 4: you could become LP and an SPV that exists. There's

750
00:40:50,080 --> 00:40:54,600
Speaker 4: these ways where companies have already lost control of who

751
00:40:54,600 --> 00:40:57,080
Speaker 4: their shareholder base is, and not to mention, when they

752
00:40:57,080 --> 00:41:00,839
Speaker 4: go public, you've completely lost control of your shareholder base.

753
00:41:01,680 --> 00:41:05,799
Speaker 4: So I think, since it's early, obviously our approaches we

754
00:41:05,880 --> 00:41:09,680
Speaker 4: want to make sure everything is. We don't want anyone

755
00:41:09,719 --> 00:41:12,600
Speaker 4: saying they don't want Robin Hood Ventures invest in their

756
00:41:12,600 --> 00:41:15,520
Speaker 4: company and throwing ice water over it. Not to say

757
00:41:15,520 --> 00:41:18,680
Speaker 4: that that's going to be the policy forever, but that's

758
00:41:18,760 --> 00:41:21,560
Speaker 4: kind of the that's the approach where we're taking.

759
00:41:21,600 --> 00:41:23,680
Speaker 2: Now, do you want to just drop your new card

760
00:41:23,719 --> 00:41:26,319
Speaker 2: on the table? I know, my god, so you have.

761
00:41:26,800 --> 00:41:28,680
Speaker 2: We could just we don't need to do a big

762
00:41:28,719 --> 00:41:30,640
Speaker 2: like ad for like all the great people can look

763
00:41:30,680 --> 00:41:32,319
Speaker 2: that up. But you have this new platinum card.

764
00:41:32,600 --> 00:41:34,840
Speaker 3: It is really bad, op seck. If he's like dropping

765
00:41:34,840 --> 00:41:36,880
Speaker 3: his credit no, just want to hear how it sounds.

766
00:41:37,200 --> 00:41:39,040
Speaker 4: This is the most secure credit card on the market.

767
00:41:39,080 --> 00:41:40,160
Speaker 4: Your number is not on it.

768
00:41:40,320 --> 00:41:43,320
Speaker 2: Oh, oh that is legit.

769
00:41:43,400 --> 00:41:44,600
Speaker 4: Would you like to hold it?

770
00:41:44,760 --> 00:41:49,160
Speaker 3: I would yes, So this is nice. This is really nice.

771
00:41:49,239 --> 00:41:51,920
Speaker 4: I got the heaviest card on the market, beats out

772
00:41:51,920 --> 00:41:52,960
Speaker 4: the Robin Hood Gold. Yeah.

773
00:41:53,000 --> 00:41:55,400
Speaker 2: Wait, actually drop the gold card. Now, let's hear the difference.

774
00:41:56,719 --> 00:41:57,280
Speaker 4: Very different.

775
00:41:57,960 --> 00:41:59,279
Speaker 2: No one watched that puny gold.

776
00:41:59,520 --> 00:42:00,640
Speaker 3: Here, here's the pointing.

777
00:42:00,680 --> 00:42:03,000
Speaker 2: Here's the platinum. Let me drop the platinum.

778
00:42:03,040 --> 00:42:05,040
Speaker 4: So let me tell you. I can tell you the

779
00:42:05,040 --> 00:42:08,319
Speaker 4: thesis behind this card, if it makes sense. We want

780
00:42:08,360 --> 00:42:12,560
Speaker 4: this to be like the James Bond card. If you

781
00:42:12,640 --> 00:42:15,279
Speaker 4: are James Bond, this is the card for you. If

782
00:42:15,360 --> 00:42:18,399
Speaker 4: James Bond, Sean Connery himself were to have a credit card,

783
00:42:18,440 --> 00:42:21,879
Speaker 4: he would have this card. And I think we tried

784
00:42:21,880 --> 00:42:24,000
Speaker 4: to evoke that feeling, not just in the design of

785
00:42:24,000 --> 00:42:26,239
Speaker 4: the card, but if you look at the website, we

786
00:42:26,280 --> 00:42:29,520
Speaker 4: have a scuba diver, we have like these nice planes.

787
00:42:29,880 --> 00:42:31,680
Speaker 4: So yeah, we we.

788
00:42:31,719 --> 00:42:34,000
Speaker 2: Really tried to say if I pulled that out, my

789
00:42:34,000 --> 00:42:35,000
Speaker 2: friends won't make fun of me.

790
00:42:36,719 --> 00:42:40,239
Speaker 4: You'rey, Actually I really like it. Well, actually it's got

791
00:42:40,320 --> 00:42:44,120
Speaker 4: five percent dining credit. That's probably that's nobody offers that

792
00:42:44,280 --> 00:42:47,600
Speaker 4: with the high limit. So it's actually intended for you

793
00:42:47,680 --> 00:42:50,000
Speaker 4: to treat your friends, okay, and take it out.

794
00:42:50,040 --> 00:42:51,680
Speaker 2: I'm not going to complain. They're not going to make

795
00:42:51,680 --> 00:42:52,960
Speaker 2: fun of me when I'm paying for dinner.

796
00:42:53,200 --> 00:42:55,360
Speaker 4: And what we found was with the Gold card, a

797
00:42:55,360 --> 00:42:57,479
Speaker 4: lot of people, a lot of people don't really use

798
00:42:57,560 --> 00:43:01,600
Speaker 4: physical cards. It's Apple pay, but the moments when you

799
00:43:01,719 --> 00:43:05,280
Speaker 4: use your physical card, it's less of a payment instrument.

800
00:43:05,400 --> 00:43:08,160
Speaker 4: It's more like a state Let me show you my watch, right,

801
00:43:08,160 --> 00:43:11,200
Speaker 4: it's a it's a fashion accessory. It's a luxury good.

802
00:43:11,400 --> 00:43:13,680
Speaker 4: And I don't know if the credit card industry is

803
00:43:13,719 --> 00:43:17,240
Speaker 4: really has really evolved. I think to the same degree iPhone.

804
00:43:17,680 --> 00:43:20,359
Speaker 4: You know you have the orange iPhones. Now it's it's

805
00:43:20,360 --> 00:43:23,520
Speaker 4: a fashion accessory, less of a utilitarian good. And I

806
00:43:23,600 --> 00:43:26,040
Speaker 4: think physical cards the same way It used to be

807
00:43:26,080 --> 00:43:28,560
Speaker 4: that people wanted physical cards that were as light as

808
00:43:28,600 --> 00:43:32,040
Speaker 4: possible because it's served a utilitarian purpose. You want to

809
00:43:32,080 --> 00:43:33,680
Speaker 4: keep it in your wallet, and you want your wallet

810
00:43:33,719 --> 00:43:36,879
Speaker 4: to be light so that you're not hunched over. Now

811
00:43:36,920 --> 00:43:38,920
Speaker 4: I think it's a little bit different. It's an extension

812
00:43:38,960 --> 00:43:39,959
Speaker 4: of your personality.

813
00:43:40,080 --> 00:43:44,200
Speaker 3: So I'm a big fan of physicality in everyday products

814
00:43:44,280 --> 00:43:48,520
Speaker 3: like remember the queue the tungsten cue. Yeah, like that

815
00:43:48,640 --> 00:43:52,800
Speaker 3: was a direct response to like the ephemerality ephemerals crypto

816
00:43:53,040 --> 00:43:55,920
Speaker 3: of crypto, right, Like you want something that's tangible and

817
00:43:56,000 --> 00:43:57,040
Speaker 3: like feels heavy in your head.

818
00:43:57,080 --> 00:44:00,560
Speaker 4: I keep telling Deepak that a tungsten card of crypto

819
00:44:00,600 --> 00:44:01,439
Speaker 4: people would be cool.

820
00:44:01,560 --> 00:44:02,319
Speaker 2: Yeah, get on that.

821
00:44:03,440 --> 00:44:04,040
Speaker 3: You should do that.

822
00:44:04,080 --> 00:44:05,680
Speaker 4: It's not a bad idea Blood.

823
00:44:05,440 --> 00:44:07,800
Speaker 2: Tendant, thank you so much for coming back on oblock.

824
00:44:07,840 --> 00:44:09,960
Speaker 4: Great adding Yeah, always a pleasure. Thank you.

825
00:44:10,000 --> 00:44:24,880
Speaker 2: Gad to me, Trichy. I love catching up with Flood.

826
00:44:24,960 --> 00:44:28,200
Speaker 2: I mean, robin Hood is a company that is like

827
00:44:28,840 --> 00:44:31,560
Speaker 2: so far ahead of the curve in basically everything that's

828
00:44:31,560 --> 00:44:36,400
Speaker 2: happened with like the retailization of every market, the complete

829
00:44:36,480 --> 00:44:39,799
Speaker 2: breaking down of every distinction between what's a stock, what's

830
00:44:39,800 --> 00:44:42,680
Speaker 2: the future, what's a token, et cetera. Like they're right

831
00:44:42,680 --> 00:44:43,480
Speaker 2: in the middle of all of it.

832
00:44:43,680 --> 00:44:47,360
Speaker 3: Absolutely, And also there's a reflexivity here, right, because the

833
00:44:47,400 --> 00:44:51,239
Speaker 3: bigger Robinhood gets, the more its offerings kind of matter

834
00:44:51,320 --> 00:44:53,719
Speaker 3: for the way the market itself behaves. So I think

835
00:44:53,719 --> 00:44:56,600
Speaker 3: it's definitely a worthwhile discussion. I gotta say, though, like

836
00:44:56,719 --> 00:45:01,799
Speaker 3: the financialization of everything, do you find a little bit dystopian?

837
00:45:02,160 --> 00:45:06,160
Speaker 3: I remember like, I went to Macaw once and I've

838
00:45:06,360 --> 00:45:08,279
Speaker 3: been there. I was really looking forward to it because

839
00:45:08,280 --> 00:45:11,240
Speaker 3: I was thinking, you know, the Las Vegas of the East.

840
00:45:11,440 --> 00:45:13,400
Speaker 3: But a lot of the gambling I found like pretty

841
00:45:13,400 --> 00:45:16,759
Speaker 3: depressing because some of it was as basic as like

842
00:45:16,840 --> 00:45:18,800
Speaker 3: let's roll the dice and if it's a high number,

843
00:45:19,120 --> 00:45:20,880
Speaker 3: you win, and if it's a low number, you lose,

844
00:45:20,960 --> 00:45:25,000
Speaker 3: and taking like those kind of very simplistic binary bets. Yeah,

845
00:45:25,000 --> 00:45:28,000
Speaker 3: and I feel like I feel like a lot of

846
00:45:28,040 --> 00:45:30,080
Speaker 3: that is sort of creeping into the financial system.

847
00:45:30,280 --> 00:45:30,480
Speaker 1: Yeah.

848
00:45:30,480 --> 00:45:31,640
Speaker 3: I mean, look our daily lives.

849
00:45:31,719 --> 00:45:33,960
Speaker 2: People bet on the coin flip of the super Bowl. Yeah,

850
00:45:34,000 --> 00:45:36,040
Speaker 2: I know, why even have the super Bowl at that

851
00:45:36,120 --> 00:45:38,240
Speaker 2: point if people are they're just betting out a coin flip.

852
00:45:38,239 --> 00:45:40,839
Speaker 2: The super Bowl is kind of an irrelevancy where if

853
00:45:40,840 --> 00:45:43,000
Speaker 2: people are inclined to bet on the coin flip, I

854
00:45:43,040 --> 00:45:45,640
Speaker 2: don't know if like people will bet on a coin flip,

855
00:45:45,640 --> 00:45:48,680
Speaker 2: but it's not like that much. It's basically like betting

856
00:45:48,760 --> 00:45:51,560
Speaker 2: on red or black, which people do, which people do online,

857
00:45:51,760 --> 00:45:54,040
Speaker 2: which is really depressing. Actually, the most depressing thing I've

858
00:45:54,080 --> 00:45:57,600
Speaker 2: ever seen on the gambling front was I was in

859
00:45:57,680 --> 00:45:59,840
Speaker 2: Iceland and I think.

860
00:45:59,719 --> 00:46:01,560
Speaker 3: They have this do you think of Iceland as like

861
00:46:01,560 --> 00:46:02,440
Speaker 3: a hub of gambling.

862
00:46:02,480 --> 00:46:05,600
Speaker 2: But go on, like I was looking for stuff to

863
00:46:06,120 --> 00:46:08,960
Speaker 2: watch on TV in my hotel room, and they had

864
00:46:09,080 --> 00:46:11,920
Speaker 2: a stream or they had a video of like this

865
00:46:12,120 --> 00:46:15,480
Speaker 2: like video casino where they had like an attractive woman

866
00:46:15,560 --> 00:46:18,680
Speaker 2: dealer dealing cards and that people could phone in their bets,

867
00:46:19,280 --> 00:46:23,080
Speaker 2: so like recreate kind of this casino ish thing. But

868
00:46:23,280 --> 00:46:25,200
Speaker 2: like it seems like that's we're going. And then the

869
00:46:25,200 --> 00:46:28,760
Speaker 2: other thing too, is that, as I mentioned, like whether

870
00:46:28,800 --> 00:46:32,880
Speaker 2: it's like technological arbitrage or regulatory arbitrage, every type of

871
00:46:32,920 --> 00:46:36,600
Speaker 2: bet can be turned into done with any type of instrument.

872
00:46:36,719 --> 00:46:39,399
Speaker 2: You can replicate stock and options with futures. You can

873
00:46:39,480 --> 00:46:42,960
Speaker 2: do sports betting in the form of prediction markets. You

874
00:46:43,000 --> 00:46:45,520
Speaker 2: can then take prediction markets who've already seen this. You

875
00:46:45,520 --> 00:46:48,840
Speaker 2: could take prediction markets and bundle them into ETFs, and

876
00:46:48,920 --> 00:46:51,640
Speaker 2: so you could have buy an ETF that is a

877
00:46:51,680 --> 00:46:55,360
Speaker 2: series of long democrat in the senate markets, et cetera.

878
00:46:55,600 --> 00:46:58,080
Speaker 2: And so everything could be wrapped in every other sort

879
00:46:58,080 --> 00:47:01,600
Speaker 2: of wrapper, and every thing is just sort of seemingly

880
00:47:01,680 --> 00:47:05,120
Speaker 2: once you find the right rapper kind of allowed within

881
00:47:05,239 --> 00:47:09,000
Speaker 2: our current sort of like regulatory framework and honestly, even

882
00:47:09,040 --> 00:47:11,160
Speaker 2: if it's not allowed, you do it offshore with crypto

883
00:47:11,160 --> 00:47:13,239
Speaker 2: et cetera. And so there's almost no way to sort

884
00:47:13,280 --> 00:47:15,440
Speaker 2: of stop this, stop this progression.

885
00:47:15,640 --> 00:47:17,520
Speaker 3: But the other thing I've been thinking of is, you know,

886
00:47:17,560 --> 00:47:20,360
Speaker 3: we used to hear markets described as you know, there

887
00:47:20,400 --> 00:47:24,040
Speaker 3: were upsides to capitalism, right, like you're supposed to be

888
00:47:24,400 --> 00:47:27,239
Speaker 3: efficiently allocating money. I don't think there's some pretty good

889
00:47:27,239 --> 00:47:29,680
Speaker 3: epete of course, of course, but like that used to

890
00:47:29,760 --> 00:47:32,920
Speaker 3: be the thing, right, And now you see more and

891
00:47:32,920 --> 00:47:35,839
Speaker 3: more money that's kind of being diverted away from like well,

892
00:47:35,840 --> 00:47:38,439
Speaker 3: this is just going to fund company. Yeah, well we're

893
00:47:38,480 --> 00:47:41,160
Speaker 3: just going to bet on the line in the company

894
00:47:41,400 --> 00:47:44,800
Speaker 3: going up, or you know, some other real world outcome

895
00:47:44,960 --> 00:47:47,840
Speaker 3: or whatever. Here's what it is. We were talking about

896
00:47:47,840 --> 00:47:49,640
Speaker 3: this the other day. But like it actually feels like

897
00:47:49,640 --> 00:47:51,440
Speaker 3: if you think about the nineteen eighties, you had that

898
00:47:51,520 --> 00:47:54,839
Speaker 3: greed as good shift, right, right, and even that was controversial,

899
00:47:55,200 --> 00:47:57,279
Speaker 3: And now you fast forward to twenty twenty six, and

900
00:47:57,320 --> 00:48:01,279
Speaker 3: it feels like morality doesn't even like necesscessarily enter into it.

901
00:48:01,320 --> 00:48:05,200
Speaker 3: Everyone is just like so resigned to this idea that like, well,

902
00:48:05,200 --> 00:48:06,959
Speaker 3: of course people are going to try to make money

903
00:48:06,960 --> 00:48:09,400
Speaker 3: of course we're going to just bet on random things

904
00:48:09,440 --> 00:48:10,080
Speaker 3: to try to win.

905
00:48:10,480 --> 00:48:14,759
Speaker 2: Everyone just accepts that, like securing the bag is the thing.

906
00:48:15,040 --> 00:48:17,440
Speaker 2: One other thing I do worry about is like I

907
00:48:17,480 --> 00:48:21,200
Speaker 2: think American capital markets are good in part because we

908
00:48:21,280 --> 00:48:25,040
Speaker 2: really do have excellent disclosure, and you know, from time

909
00:48:25,080 --> 00:48:27,680
Speaker 2: to time you hear about it's like an accounting scandal. Yeah,

910
00:48:27,680 --> 00:48:29,759
Speaker 2: but they're rare, like and they're a lot rare. I

911
00:48:29,760 --> 00:48:32,319
Speaker 2: think anyone who looks in any other market around the

912
00:48:32,360 --> 00:48:37,360
Speaker 2: world would find them way more frequent, and market manipulation

913
00:48:37,480 --> 00:48:39,880
Speaker 2: would find it way more frequent in other markets outside

914
00:48:39,880 --> 00:48:42,480
Speaker 2: the US, because we have this very good regulatory regime

915
00:48:42,640 --> 00:48:46,120
Speaker 2: and expectations and the SEC mostly does this job very well,

916
00:48:46,200 --> 00:48:49,720
Speaker 2: and it's going to increasingly sort of like be taken

917
00:48:49,800 --> 00:48:53,440
Speaker 2: over by tradable instruments for which investors really do not

918
00:48:53,480 --> 00:48:55,600
Speaker 2: have the same level of information at all. And the

919
00:48:55,640 --> 00:48:58,040
Speaker 2: expectation that an investor would like to be able to

920
00:48:58,080 --> 00:49:00,279
Speaker 2: know the share count of a thing they're buying, be

921
00:49:00,280 --> 00:49:02,080
Speaker 2: able to know the earnings of the margins of the

922
00:49:02,080 --> 00:49:04,759
Speaker 2: thing they're buying, like that's going away, and we might

923
00:49:04,880 --> 00:49:09,680
Speaker 2: regret like having so much traded without as much transparency

924
00:49:09,880 --> 00:49:10,919
Speaker 2: at some point down the line.

925
00:49:10,960 --> 00:49:13,160
Speaker 3: No. Absolutely, Actually, this is a good reminder. I wanted

926
00:49:13,200 --> 00:49:15,720
Speaker 3: to call back to two episodes. So on that note,

927
00:49:15,760 --> 00:49:18,880
Speaker 3: we did that really good episode about private credit in

928
00:49:18,920 --> 00:49:22,160
Speaker 3: particular kind of turning the economy into a black hole. Yeah,

929
00:49:23,120 --> 00:49:25,600
Speaker 3: I think that's really good. You know, obviously it's focused

930
00:49:25,600 --> 00:49:27,879
Speaker 3: on credit, but you can extrapolate to more and more

931
00:49:27,920 --> 00:49:31,560
Speaker 3: companies just going private in general. And then secondly, Vlad

932
00:49:31,560 --> 00:49:34,279
Speaker 3: mentioned he's really into aliens. We got to get Paul

933
00:49:34,360 --> 00:49:37,080
Speaker 3: Krugman back on to talk about aliens.

934
00:49:37,120 --> 00:49:37,520
Speaker 2: Let's do it.

935
00:49:37,560 --> 00:49:39,840
Speaker 3: But in the meantime, there is an existing episode that

936
00:49:39,880 --> 00:49:42,359
Speaker 3: people should check out anyway. Shall we leave it there?

937
00:49:42,440 --> 00:49:43,080
Speaker 2: Let's leave it there.

938
00:49:43,160 --> 00:49:45,400
Speaker 3: This has been another episode of the Odd Lots podcast.

939
00:49:45,440 --> 00:49:48,480
Speaker 3: I'm Tracy Alloway. You can follow me at Tracy Alloway.

940
00:49:48,200 --> 00:49:50,880
Speaker 2: And I'm Jill Wisenthal. You can follow me at the Stalwart.

941
00:49:51,000 --> 00:49:53,799
Speaker 2: Follow our guest Blood Teneve at Vlood Teneve, follow our

942
00:49:53,840 --> 00:49:57,600
Speaker 2: producers Kermen Rodriguez at Carmen Arman, dash Ol Bennett at Dashbot,

943
00:49:57,600 --> 00:49:59,759
Speaker 2: and kill Brooks at Kile Brooks. And for more odd

944
00:49:59,800 --> 00:50:02,239
Speaker 2: law content, go to Bloomberg dot com slash odd Lots

945
00:50:02,280 --> 00:50:04,640
Speaker 2: with a daily newsletter and all of our episodes and

946
00:50:04,680 --> 00:50:06,560
Speaker 2: you can shout about all these topics twenty four to

947
00:50:06,560 --> 00:50:10,239
Speaker 2: seven in our discord Discord dot gg slash odd Lots And.

948
00:50:10,200 --> 00:50:12,080
Speaker 3: If you enjoy odd Lots, if you want us to

949
00:50:12,120 --> 00:50:15,560
Speaker 3: bring back Flat on a quarterly basis to follow up

950
00:50:15,560 --> 00:50:18,080
Speaker 3: on our previous questions, then please leave us a positive

951
00:50:18,080 --> 00:50:20,960
Speaker 3: review on your favorite podcast platform. And remember, if you

952
00:50:21,000 --> 00:50:23,520
Speaker 3: are a Bloomberg subscriber, you can listen to all of

953
00:50:23,560 --> 00:50:26,399
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954
00:50:26,520 --> 00:50:29,240
Speaker 3: is find the Bloomberg channel on Apple Podcasts and follow

955
00:50:29,280 --> 00:50:31,400
Speaker 3: the instructions there. Thanks for listening