WEBVTT - Dinosaur Bone Treasury Company: A Mailbag Episode 0:00:02.720 --> 0:00:07.200 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.480 --> 0:00:12.600 All right, Matt Pye, Wow, you're back. 0:00:13.080 --> 0:00:17.919 Hello, Hello, and welcome to the same recording session. 0:00:20.079 --> 0:00:21.480 I like it when we spend time. 0:00:22.160 --> 0:00:26.160 Yeah. Yeah, it was impressed the first time. Now it's like, oh, yes, 0:00:26.200 --> 0:00:29.400 we're recording two money stuffs for two separate reads. It 0:00:29.960 --> 0:00:31.240 was not even impressed the first time. 0:00:31.320 --> 0:00:31.480 No. 0:00:31.920 --> 0:00:34.839 Right, other people have also recorded more than one thing 0:00:34.840 --> 0:00:35.280 at a time. 0:00:35.400 --> 0:00:35.600 Yeah. 0:00:35.680 --> 0:00:38.120 I guess you know the fact that we're so charmed 0:00:38.120 --> 0:00:39.599 by this, or at least I am. 0:00:41.360 --> 0:00:44.159 You're like a professional, you know, recorder of media. I 0:00:44.159 --> 0:00:45.040 guess you only do lived. 0:00:45.479 --> 0:00:48.040 I know that's the thing I'm used to. The light 0:00:48.159 --> 0:00:49.720 is red and my heart is racing. 0:00:50.080 --> 0:00:54.480 But this is very chilling, right me me still an 0:00:54.480 --> 0:00:57.280 amateur at all all recorded media. 0:00:57.440 --> 0:00:58.760 Let's do this in twenty minutes. 0:00:59.120 --> 0:01:03.040 Oh wow, Hey, I don't know about that. Hello, and 0:01:03.080 --> 0:01:05.640 welcome to the Money Stuff Podcast, your weekly podcast where 0:01:05.640 --> 0:01:10.520 were talking about stuff related to money. I'm Matt Levine 0:01:10.560 --> 0:01:11.959 and I wrote the Money Stuff column for. 0:01:11.959 --> 0:01:15.399 Bloomberg Opinion, and I'm Katie Greifeld, a reporter for Bloomberg 0:01:15.480 --> 0:01:19.959 News and an anchor for Bloomberg Television, and today is 0:01:20.840 --> 0:01:22.480 mail bag. You didn't sing. 0:01:22.520 --> 0:01:24.960 No, I didn't sing. Come, I cued you to sing it. 0:01:25.120 --> 0:01:25.720 That's all we need. 0:01:25.880 --> 0:01:28.640 That's true. I took it. Okay, so let's get right 0:01:28.680 --> 0:01:29.080 into it. 0:01:29.160 --> 0:01:42.360 Yeah, mail bag, nail bag from Josh. 0:01:42.480 --> 0:01:45.560 I saw this tweet about securities law. As to DoorDash, 0:01:45.600 --> 0:01:48.400 a blooming onion from outback steakhouse, you pay a fixed 0:01:48.400 --> 0:01:51.560 price now and receive it later. It is therefore a 0:01:51.600 --> 0:01:54.600 futures contract and thus illegal under the onion future side 0:01:54.960 --> 0:01:58.200 question our DoorDash orders a futures contract and therefore subject 0:01:58.240 --> 0:02:02.360 to securities law? This question? Okay, So, first of all, 0:02:03.360 --> 0:02:09.160 onion futures are not securities. They're commodities. But famously, basically 0:02:09.200 --> 0:02:12.200 every commodity can be traded on a futures exchange, including 0:02:12.320 --> 0:02:15.720 things that are not commodities like interest rates and sports bets. 0:02:16.120 --> 0:02:18.160 But the only things that cannot be traded on futures 0:02:18.240 --> 0:02:21.560 exchanges are motion picture receipts. 0:02:21.760 --> 0:02:22.120 Oh. 0:02:22.200 --> 0:02:25.600 Yes, part of the Onion Futures Act add onions. Onion 0:02:25.600 --> 0:02:28.000 futures cannot be traded because there's like a famous story 0:02:28.000 --> 0:02:30.320 in like the fifties of someone cornering the market for onions, 0:02:30.360 --> 0:02:33.160 and like Congress got so mad that they banned trading 0:02:33.160 --> 0:02:37.520 of onion futures. So if you doored ash a blooming onion, 0:02:37.720 --> 0:02:40.280 have you violated that that law? Okay, this is a 0:02:40.280 --> 0:02:44.200 great question because the difference between future and spot is 0:02:44.240 --> 0:02:49.880 actually quite legally meaningful and quite vague. The answer is no. 0:02:50.280 --> 0:02:52.480 So if you order an onion now and it arrives 0:02:52.480 --> 0:02:55.359 in an hour, that is not a futures contract. That's 0:02:55.360 --> 0:02:57.840 a spot delivery. You have just ordered an onion on 0:02:57.880 --> 0:03:02.040 the spot market. Interesting, but there's no clear distinction between 0:03:02.080 --> 0:03:06.200 spot and features. It seems like, you know, the CFTC 0:03:06.360 --> 0:03:08.680 says is that a spot conduct is one that is 0:03:08.720 --> 0:03:12.240 intended to be physically settled within a few days. So 0:03:12.440 --> 0:03:14.760 if you order an onion now to be delivered, you know, 0:03:15.000 --> 0:03:16.919 you like order from a grocery store and like it's 0:03:16.919 --> 0:03:18.760 going to be delivered to you in three days, it's 0:03:18.760 --> 0:03:19.359 probably hard. 0:03:19.560 --> 0:03:20.240 Yeah, yeah, right. 0:03:20.280 --> 0:03:21.920 If you're like set up an instagrat order for like 0:03:22.360 --> 0:03:25.880 next week, it's probably one. There's a retail provision in 0:03:25.919 --> 0:03:29.440 the in the commodities that uses twenty eight days as 0:03:29.440 --> 0:03:32.799 a dividing line, which is sometimes used as a rule 0:03:32.840 --> 0:03:33.200 of thumb. 0:03:33.280 --> 0:03:36.720 That's really interesting because I feel like from Amazon, you 0:03:36.760 --> 0:03:40.040 can subscribe to onions and you can interesting, Yeah, you 0:03:40.080 --> 0:03:42.640 can get onions delivered to you on a schedule. 0:03:43.080 --> 0:03:43.600 Interesting. 0:03:43.960 --> 0:03:46.080 I think that you can do that with cat food. 0:03:47.280 --> 0:03:49.360 This is definitely not legaland and I think probably nobody's 0:03:49.360 --> 0:03:52.120 going to enforce that. I don't think I trut that 0:03:52.120 --> 0:03:54.960 as a futures conduct. That feels very spot. But you're right. 0:03:55.040 --> 0:03:57.560 It's one reason it feels very spot is because I 0:03:57.600 --> 0:04:00.160 believe that Amazon will well, you know, if like the 0:04:00.160 --> 0:04:02.560 price is changed, they'll change the price. Like I think 0:04:02.600 --> 0:04:05.480 that they they don't lock in if you do a 0:04:05.520 --> 0:04:07.960 subscribe and save, you don't lock in the price for 0:04:08.000 --> 0:04:09.040 it until the end of time. 0:04:09.280 --> 0:04:09.760 Interesting. 0:04:09.960 --> 0:04:13.119 So like it's essentially a new series of spot contracts. 0:04:12.560 --> 0:04:15.960 Everything I've never actually done. Subscribe and save, I order 0:04:17.960 --> 0:04:23.440 never never for an onion or yeah, yeah, that'd be interesting, 0:04:23.480 --> 0:04:26.039 and then engineer the onion market so that price has 0:04:26.160 --> 0:04:27.320 changed dramatically. 0:04:28.120 --> 0:04:30.520 So I think about this a lot because in stocks 0:04:30.520 --> 0:04:33.479 it's actually it's the other way around. Like there is 0:04:33.520 --> 0:04:36.479 a very legally sensitive thing in stock trading, which is 0:04:36.640 --> 0:04:41.720 naked short selling. If you promise me that you will 0:04:41.720 --> 0:04:45.920 deliver me Tesla shares, I promise tomorrow, and you don't 0:04:45.960 --> 0:04:49.080 have the Tesla shares, or you don't like have reasonable 0:04:49.120 --> 0:04:51.239 basis to believe that you can borrow those Tesla shares, 0:04:51.480 --> 0:04:53.600 you have committed a naked short selling, and people get 0:04:53.640 --> 0:04:56.040 really really mad about that. But if you promise to 0:04:56.080 --> 0:04:58.240 deliver me Tesla shares in a year, you do not 0:04:58.360 --> 0:05:00.320 have to borrow the shares. That's a future or a 0:05:00.360 --> 0:05:04.680 forward contract, and that doesn't count. And this is extremely 0:05:04.720 --> 0:05:07.480 not legal advice. But no one knows what the dividing 0:05:07.520 --> 0:05:10.359 line between a like spot sale and a future sale 0:05:10.440 --> 0:05:14.640 of stock is. But again, it's like it's in the 0:05:15.400 --> 0:05:17.120 like I think I used to use a rule of 0:05:17.160 --> 0:05:19.760 thumb of ten days. It's something like that. It's like, 0:05:19.760 --> 0:05:21.360 if you say you're gonna deliver me tell the stock 0:05:21.400 --> 0:05:24.400 tomorrow or in a week, that's probably a spot sale 0:05:24.440 --> 0:05:25.799 and you need to have a low kate to borrow 0:05:25.839 --> 0:05:28.000 the stock, or else you're committing naked short selling and 0:05:28.000 --> 0:05:31.120 you're in trouble. But if you say two weeks or 0:05:31.160 --> 0:05:33.120 a month or a year, then it's a forward contract 0:05:33.160 --> 0:05:35.320 and it's legal. So it's the opposite like an onion's 0:05:35.839 --> 0:05:40.200 a forward contract is illegal and stocks naked spot contract 0:05:40.279 --> 0:05:40.760 is illegal. 0:05:41.680 --> 0:05:43.559 We spent seven minutes on this question. 0:05:43.600 --> 0:05:45.600 Okay, you're really you're really going to hold me to 0:05:45.680 --> 0:05:47.080 twenty minutes of this episode? All right? 0:05:48.800 --> 0:05:52.039 Mail mail bag from Daniel. 0:05:52.120 --> 0:05:54.560 Why don't the underwriters for IPA seem to factor in 0:05:54.640 --> 0:05:56.920 retail menia? It seems like something you could do as 0:05:56.920 --> 0:05:59.320 an underwriter is have an analyst through the due diligence, 0:05:59.680 --> 0:06:02.120 spend thousands of hours in Excel cunching the numbers, get 0:06:02.120 --> 0:06:03.960 a fair valuation for the stock, and then when you 0:06:03.960 --> 0:06:06.880 have the final number, the managing product can just multiply 0:06:06.920 --> 0:06:08.880 it by two because a bunch of retail traders will 0:06:08.880 --> 0:06:10.520 buy it anyway. But they don't seem to do that, 0:06:10.520 --> 0:06:12.760 even though it seems like it would make sense. Also, 0:06:12.800 --> 0:06:14.960 who gets fired when a company trades on its first 0:06:15.000 --> 0:06:17.359 day at two hundred percent above the IPO press and 0:06:17.400 --> 0:06:19.760 who gets to retire and buy a yacht? So this 0:06:19.839 --> 0:06:20.520 is about Figma. 0:06:20.600 --> 0:06:24.240 I think yes, I was about to bring up Figma, 0:06:24.360 --> 0:06:25.800 because that's exactly what happens. 0:06:26.040 --> 0:06:29.120 Right. So Figma, by the time this areas will have 0:06:29.160 --> 0:06:31.919 done an IPO about two weeks ago. But Figma did 0:06:31.960 --> 0:06:34.279 an IPO where it's sold stock at thirty three dollars 0:06:34.320 --> 0:06:36.440 a share and like it bounced to like one hundred 0:06:36.440 --> 0:06:39.479 and twelve or something in the firstance. And every time 0:06:39.480 --> 0:06:42.520 that happens, people and make people, I mean Bill Gurley 0:06:42.600 --> 0:06:46.800 specifically go on Twitter to complain about IPO Pops and 0:06:46.800 --> 0:06:50.000 how the company left money on the table, right, And 0:06:50.440 --> 0:06:52.680 people who work in capital markets and people who work 0:06:52.680 --> 0:06:55.440 at Figma do not think that way. Right, Like Figma 0:06:55.440 --> 0:06:58.240 and it's venture capitalists, we're very happy to leave money 0:06:58.240 --> 0:06:58.719 on the table. 0:06:58.839 --> 0:07:02.119 Yeah, talk more because this is inevitably going to happen again. 0:07:02.960 --> 0:07:05.920 It's happened for decades. Yeah, people who have Bill Curley 0:07:06.000 --> 0:07:08.560 is complained about for decades. It's it's just like so 0:07:08.640 --> 0:07:13.200 from Figma's perspective, they are a company with a shareholder base, 0:07:13.320 --> 0:07:15.800 and they're shifting their shareholder base quite dramatically, right, They're 0:07:15.800 --> 0:07:18.000 going from these venture capitalists who own them in the 0:07:18.000 --> 0:07:20.800 private markets to public investors who own them in the 0:07:20.800 --> 0:07:24.280 public markets. And if your pigmacy you have a relationship 0:07:24.280 --> 0:07:26.880 with your investors, I'm getting a whole new set of investors. 0:07:26.920 --> 0:07:29.280 I want a relationship with them. I want good investors. 0:07:29.320 --> 0:07:32.280 I want investors who I think are in it for 0:07:32.320 --> 0:07:34.600 the long term and will be supportive of me, and 0:07:34.680 --> 0:07:37.720 will be like good advisors and will be you know, 0:07:37.840 --> 0:07:41.080 not flighty, and not get mad at me if like 0:07:41.120 --> 0:07:43.040 the stock goes down one day, and who believe in 0:07:43.080 --> 0:07:44.800 my long term vision? And so you go out and 0:07:44.800 --> 0:07:46.520 meet with a bunch of investors and there's some that 0:07:46.560 --> 0:07:48.800 you like, and then they say, I'll buy the stock 0:07:48.840 --> 0:07:50.600 at this price. You know, okay, great, here have a 0:07:50.600 --> 0:07:53.160 lot of the stock. And then some other people at 0:07:53.200 --> 0:07:55.160 like Citadel will buy it at a higher price. And 0:07:55.320 --> 0:07:57.040 I don't want those guys. I don't want the long 0:07:57.120 --> 0:07:59.560 term guys. And so you pick and like the Bloomberg 0:07:59.560 --> 0:08:02.239 had in this, like there were specific long term investors 0:08:02.280 --> 0:08:04.880 they wanted in the stock, and if they raised the price, 0:08:05.120 --> 0:08:07.200 they could easily get the deal done, but they would 0:08:07.240 --> 0:08:09.280 lose those people. And they're like, no, I'd rather have 0:08:09.320 --> 0:08:11.800 those people and the stock they're selling in this deal 0:08:11.880 --> 0:08:13.640 just doesn't matter in the long term. What matters in 0:08:13.680 --> 0:08:15.440 the long term is like their long term relationship with 0:08:15.480 --> 0:08:18.400 their investor base and with the capital markets, and giving 0:08:18.440 --> 0:08:20.960 everyone a pop on the first day makes investors love you, 0:08:21.240 --> 0:08:23.080 and so it's just better for like the long term 0:08:23.120 --> 0:08:25.920 business and similarly, you know, speaking about it was the 0:08:25.960 --> 0:08:28.440 company sold some stock and then sheraldon you know, the 0:08:28.520 --> 0:08:33.080 venture capitalists and like executives sold some stock and those 0:08:33.080 --> 0:08:36.600 people you know did fine, like they made money, and 0:08:36.640 --> 0:08:39.560 then the rest of their stock because they didn't sell 0:08:39.559 --> 0:08:42.280 all their stock, The rest of their stock is now 0:08:42.320 --> 0:08:46.400 worth a lot because the stock traded up, and having 0:08:46.400 --> 0:08:48.400 the stock trade up makes it easier for them to 0:08:48.440 --> 0:08:50.000 sell stock in the future, and they're happy with that. 0:08:50.440 --> 0:08:52.640 This is why you know, everyone is happy with an 0:08:52.640 --> 0:08:56.240 IPO pot because like they didn't need that money that much, right, Like, yeah, 0:08:56.360 --> 0:08:57.880 the amount of money they left on the table is 0:08:57.960 --> 0:09:00.160 not that important compared to like setting up the long 0:09:00.240 --> 0:09:02.920 term relationship. That's like the short answer to like the 0:09:02.920 --> 0:09:05.120 who gets fired question, the answer, no one gets fired. 0:09:05.600 --> 0:09:08.679 And particularly like what would be bad is if the 0:09:08.720 --> 0:09:12.680 bankers and this does happen, honestly, if the bankers went 0:09:12.760 --> 0:09:15.000 to Figma and we're like, you cannot price as a 0:09:15.000 --> 0:09:18.680 penny above thirty three. The book is really weak right here, 0:09:19.240 --> 0:09:22.240 and we don't think it'll trade well at thirty three, 0:09:23.320 --> 0:09:25.560 and Figmas like, we really wanted thirty five. But if 0:09:25.600 --> 0:09:28.040 you insist, and then it traded up to one hundred 0:09:28.040 --> 0:09:30.360 and twelve, Like the bankers look really stupid. That's what 0:09:30.440 --> 0:09:32.079 happened here. Like what happened here is they're like we're 0:09:32.080 --> 0:09:35.360 forty times covered, like there's a ton of demand, but 0:09:35.559 --> 0:09:38.600 these investors will be out above thirty three and figumas, 0:09:38.640 --> 0:09:40.839 Like I'd rather have those investors like they were fully 0:09:40.880 --> 0:09:44.000 informed here, reasonably, fully important. The other thing I want 0:09:44.000 --> 0:09:46.120 talking about is Daniel's original question is why don't they 0:09:46.200 --> 0:09:51.200 factor in retail mania? They do, but it is an 0:09:51.240 --> 0:09:53.600 interesting question. Like my impression is that when I was 0:09:53.640 --> 0:09:56.440 an ECM banker, you know, a decade ago, retail was 0:09:56.960 --> 0:10:01.040 a pretty small part of the experience of doing an IPO, 0:10:01.640 --> 0:10:04.960 and you thought of institutions as price letters. And then 0:10:04.960 --> 0:10:06.920 you get like you expected a little bump from retail 0:10:06.960 --> 0:10:09.840 because like the day after the deal prices, all the 0:10:09.840 --> 0:10:11.839 retail people who couldn't get into the dealer will want 0:10:11.840 --> 0:10:14.200 to buy, and so they'll be like a nice lift there. 0:10:14.200 --> 0:10:18.800 But it's not. It's not a mania. And now I 0:10:18.840 --> 0:10:22.400 think e CM bankers equity couple of markets bankers are 0:10:22.920 --> 0:10:26.079 having to figure out how to think about meme stocks 0:10:26.200 --> 0:10:29.360 and retail mania. Yeah, it's not so much in the 0:10:29.400 --> 0:10:32.240 IPO business. It's in the like going to companies that 0:10:32.320 --> 0:10:34.040 might be meme stocks and saying you should really haven't 0:10:34.040 --> 0:10:36.640 at the market stock offering setup, because if if a 0:10:36.679 --> 0:10:38.120 meme hits, you want to be able to sell us 0:10:38.120 --> 0:10:40.640 talking to it. And so I've talked to ESM bankers 0:10:40.640 --> 0:10:45.040 and like there are thinking about how to capitalize on 0:10:45.280 --> 0:10:48.280 retail insanity. It's not natural to them, like they you know, 0:10:48.280 --> 0:10:51.840 they spend all day talking to big institutional managers and 0:10:53.080 --> 0:10:55.520 to then also lurk on Reddit boards is a bit 0:10:55.559 --> 0:10:56.080 of a shift. 0:10:56.200 --> 0:10:58.680 It's funny, but that's just a fact of life. Now. 0:10:59.200 --> 0:11:01.400 Yeah, I haven't noticed, so they aren't thinking about it. 0:11:01.400 --> 0:11:02.840 It's just like it's a mentality shift. 0:11:03.040 --> 0:11:24.960 Yeah, mail mail bag, I really like this question from Tony. 0:11:25.080 --> 0:11:25.760 Okay, yeah, me too. 0:11:25.800 --> 0:11:26.920 Okay, I'm going to try to read it. 0:11:27.000 --> 0:11:27.280 Do it. 0:11:28.520 --> 0:11:33.360 If bitcoin treasury companies are priced irrationally as alternatives to ETFs, 0:11:33.679 --> 0:11:37.839 does that suggest a publicly traded company with a treasury strategy. 0:11:38.120 --> 0:11:41.680 It's a good alternative for alternatives that don't easily fit 0:11:41.720 --> 0:11:45.600 into an ETF. Fine art treasury company, diamonds and gems 0:11:45.600 --> 0:11:50.120 treasury company. Not actually Onion's futures treasury company, et cetera. 0:11:50.400 --> 0:11:53.120 This is a really interesting idea. 0:11:53.240 --> 0:11:56.199 So there is a gold treasure company. You wrote about it. 0:11:56.200 --> 0:11:58.840 It's called biosig because it's like a biotech company that 0:11:58.920 --> 0:12:00.680 you know, they got bored of being a aotech company 0:12:00.800 --> 0:12:01.720 and they're like, we're gonna. 0:12:01.480 --> 0:12:03.600 Buy a lot of gold, yeah, which is not the 0:12:03.640 --> 0:12:06.000 trade that a lot of people are making. I feel 0:12:06.000 --> 0:12:07.840 like biotech is more interesting than gold. 0:12:07.880 --> 0:12:10.800 But anyway, they're not like pivoting to being a gold miner. 0:12:10.840 --> 0:12:12.720 They're just buying a lot of gold and they're a 0:12:12.720 --> 0:12:15.199 treasury company. So yes, it's like an ETF. And right, 0:12:15.280 --> 0:12:17.880 the thought process that Tony had is the thought process 0:12:17.920 --> 0:12:20.680 that a lot of CEO's of small biotech companies have had, 0:12:20.920 --> 0:12:23.880 which is that if you're a bitcoin treasury company, your 0:12:23.920 --> 0:12:27.160 stock trades that two times give or take, you're a 0:12:27.200 --> 0:12:29.960 NAV yeah, and that's much better than being an ETF, 0:12:29.960 --> 0:12:32.480 where you trade pretty rigorously at one time you're an AV. 0:12:33.320 --> 0:12:38.440 And so every crypto person has started a crypto treasury 0:12:38.480 --> 0:12:40.880 company because you can, you know, double the value of 0:12:40.880 --> 0:12:43.160 your crypto. And then people look around they're like what 0:12:43.200 --> 0:12:45.240 else can we do that too? And gold seems to 0:12:45.280 --> 0:12:46.959 be part of the answer. This company, it's like the 0:12:47.080 --> 0:12:49.199 fundraise is weird, so it's hard to tell what their 0:12:49.200 --> 0:12:50.800 premium is, but they do seem to be trading at 0:12:50.840 --> 0:12:52.439 a premium to the value of the gold. 0:12:52.640 --> 0:12:57.880 Yeah, didn't games Stop by diamond like some sort of miners. 0:12:58.040 --> 0:13:00.079 Oh no, no, amc about a gold mine. But that 0:13:00.200 --> 0:13:02.120 was that was long before the treasury company. 0:13:02.160 --> 0:13:03.240 That was something that was just. 0:13:03.200 --> 0:13:06.080 The comedy thing. But no, actually some company bought Game Stop. 0:13:06.080 --> 0:13:10.160 Stock is a treasury right, which you can't really Stock 0:13:10.240 --> 0:13:12.000 is one thing you can't really do because if you're 0:13:12.000 --> 0:13:14.640 one hundred percent of stock treasury company, you're an investment company. 0:13:14.679 --> 0:13:18.200 And this doesn't work. Yeah, but Tony is right that, 0:13:18.400 --> 0:13:21.480 like bio saying, is zones gold but it like wants 0:13:21.559 --> 0:13:24.080 to be a commodity treasury company. But like other the 0:13:24.120 --> 0:13:26.200 world is your oyster. Anything that you can think of 0:13:27.040 --> 0:13:28.920 that you want to be a treasury company of, you 0:13:28.960 --> 0:13:29.520 can try it. 0:13:29.600 --> 0:13:31.760 This is so exciting, right, So there's two. 0:13:31.679 --> 0:13:33.679 Problems with it, maybe one of the two problems. One 0:13:33.679 --> 0:13:35.559 problem is you have to sell it to retail, right, 0:13:35.720 --> 0:13:39.280 like crypto, this is like a known playbook and it's 0:13:39.360 --> 0:13:41.480 kind of a little thin, right, Everyone says the same things, 0:13:41.520 --> 0:13:43.760 like we're gonna, you know, do investor education and like 0:13:43.920 --> 0:13:47.240 modernize the payment system, and like eventually people stop believing it, 0:13:47.280 --> 0:13:51.280 and so like the premium and crypto is like slowly eroding. Yeah, 0:13:51.320 --> 0:13:52.640 but you have to tell a new story with a 0:13:52.679 --> 0:13:55.520 new thing, and gold is like a crypto adjacent story. 0:13:55.600 --> 0:13:57.439 Right, I'm not excited about gold. 0:13:57.720 --> 0:13:59.959 No, I understand, but you're not excited about bitcoin. Try 0:14:00.160 --> 0:14:01.359 companies necessarily. 0:14:01.000 --> 0:14:03.160 Either, maybe, well, but I'm more excited by the idea 0:14:03.200 --> 0:14:05.600 of you could have a treasury company for fine art 0:14:05.600 --> 0:14:06.280 for example. 0:14:06.440 --> 0:14:08.439 Right, So you need a story and the story needs 0:14:08.440 --> 0:14:09.920 to appeal to a lot of people, and those people 0:14:09.960 --> 0:14:13.040 ideally or like retail weirdos on Reddit, but like there's 0:14:13.040 --> 0:14:14.559 a lot of stories you can tell, yeah on or 0:14:14.600 --> 0:14:15.160 it's a great. 0:14:14.960 --> 0:14:17.000 Song dinosaur bones, dinosaur bones. 0:14:17.480 --> 0:14:19.160 The other thing you need to do, Like a treasury 0:14:19.160 --> 0:14:24.440 company is not really about the thing crypto or gold 0:14:24.520 --> 0:14:27.720 or fine art or whatever. What a treasury company is. 0:14:28.640 --> 0:14:33.120 What micro strategy is is a company that has stock 0:14:33.200 --> 0:14:36.080 that trades above it's net asset value, and it sells 0:14:36.120 --> 0:14:38.120 stock and above the net asset value, and it buys 0:14:38.120 --> 0:14:40.600 more assets and it's just a flywheel. I read some 0:14:40.640 --> 0:14:43.120 paper that called it a creative dilution. The more stock 0:14:43.160 --> 0:14:47.320 you sell, the more value you create for your shareholders, 0:14:47.360 --> 0:14:50.080 because like you're selling stock for two hundred dollars and 0:14:50.120 --> 0:14:51.640 then buying two undred dollars s worth of stuff than 0:14:51.640 --> 0:14:54.200 your stock has gone up by four hundred dollars. That's 0:14:54.240 --> 0:14:57.200 a great trade. Yeah, it has nothing to do with 0:14:57.240 --> 0:14:59.720 the underlying thing. It has to do with the amount 0:14:59.720 --> 0:15:03.000 of high you can get and then like with investors 0:15:03.000 --> 0:15:07.640 buying into that you know, repeated process. So if you 0:15:07.680 --> 0:15:10.880 can do that, like that's the first step is can 0:15:10.920 --> 0:15:13.440 you get people to pay one hundred percent premium to 0:15:13.440 --> 0:15:16.400 an asset value? If you can, anything you buy, it's 0:15:16.400 --> 0:15:18.280 going to be a good strategy. It's going to work, right, Like, 0:15:18.320 --> 0:15:21.080 it's going to be a good trade for shareolders. But 0:15:21.120 --> 0:15:24.080 that relies on you know, the original shareholders buying for 0:15:24.240 --> 0:15:28.000 two times an av Yeah, and the question is can 0:15:28.040 --> 0:15:30.760 you sell that story? And I do think that Tony 0:15:30.880 --> 0:15:33.200 is right that you can sell that story for things 0:15:33.240 --> 0:15:37.600 other than crypto. I think gold seems to kind of work. 0:15:37.800 --> 0:15:39.960 I think so m should definitely do a Diamond's one 0:15:40.040 --> 0:15:42.600 fine art whatever. But like onions, probably not, but like 0:15:43.360 --> 0:15:44.440 I don't know, probably not. 0:15:44.440 --> 0:15:47.720 On onions. I am excited because you can put gold 0:15:47.760 --> 0:15:49.160 in an ETF. You can also put crypt. 0:15:49.680 --> 0:15:51.520 You can't sell it at two percent of NAV. 0:15:51.840 --> 0:15:53.880 I know that's really important. No, I want to see 0:15:53.880 --> 0:15:55.920 them put an asset that you can't put into an 0:15:55.920 --> 0:15:58.560 ETF into a treasury company such as fine. 0:15:58.440 --> 0:16:02.080 Art, but I think the private credit treasure company. 0:16:02.280 --> 0:16:07.720 There you go, mail bag, mail bag Duncan. 0:16:07.840 --> 0:16:11.160 Duncan has a multiple part aer here. No it's not, 0:16:11.600 --> 0:16:12.480 it's got two parts. 0:16:12.880 --> 0:16:15.760 Well, why aren't there formalized hedging markets for sports outcomes? 0:16:16.160 --> 0:16:18.520 I must imagine there are chains of bars and restaurants 0:16:18.880 --> 0:16:23.160 concentrated in areas associated with sports venues. Those locations position 0:16:23.280 --> 0:16:26.280 them to benefit from additional home games incremental spending associated 0:16:26.280 --> 0:16:29.680 with large victories, but only in positive outcomes. Bars around 0:16:29.680 --> 0:16:32.600 Wrigleyfield in Chicago be interested in hedging the risk associated 0:16:32.640 --> 0:16:35.000 with potentially ten plus more home outings in a season 0:16:35.040 --> 0:16:37.080 if they make the playoffs. So this is a question. 0:16:37.840 --> 0:16:41.800 This comes up a lot weirdly, like there are now, 0:16:42.080 --> 0:16:45.760 as I mentioned, futures exchanges where you can trade futures 0:16:45.800 --> 0:16:50.400 on things like will the Cubs win tonight, and in 0:16:50.440 --> 0:16:53.160 the ordinary course you would say, oh, yes, that's sports gambling, 0:16:53.360 --> 0:16:55.520 but it's very important to a lot of people, including 0:16:55.560 --> 0:16:59.080 it Robinhood and also Calshie and also other prediction markets. 0:16:59.120 --> 0:17:00.920 It's very important to a lot of people to say no, no, no, 0:17:01.000 --> 0:17:03.880 that's not sports gampling. That's a futures market. And what 0:17:03.960 --> 0:17:07.320 makes a thing a futures market rather than a sports book. 0:17:07.920 --> 0:17:09.879 Part of the answer is, like in theory, in a 0:17:09.880 --> 0:17:14.280 futures market, you are trading or betting against other participants 0:17:14.280 --> 0:17:16.919 in the market rather than against the book. This is 0:17:16.960 --> 0:17:21.040 not actually important like actual sports books, like you can 0:17:21.080 --> 0:17:23.600 have a sports book website where like the people taking 0:17:23.600 --> 0:17:25.640 the other side of the bet are market makers, and 0:17:25.720 --> 0:17:27.800 like on a futures exchange, the people taking the other 0:17:27.800 --> 0:17:29.320 side of the bet are probably market makers. So it's 0:17:29.320 --> 0:17:32.119 not as different as it seems. Like technically, yeah, if 0:17:32.119 --> 0:17:33.600 you go to a sports book, you're betting against the 0:17:33.640 --> 0:17:35.880 sports book. If you're going to a futures exchange, you're 0:17:35.880 --> 0:17:38.280 betting against other participants in the futures exchange. But the 0:17:38.359 --> 0:17:41.159 other thing that makes it different is there's this sense 0:17:41.240 --> 0:17:47.080 that futures exchanges offer like some sort of real economic 0:17:47.119 --> 0:17:53.240 benefit other than gambling. And when you think about sports futures, like, 0:17:53.280 --> 0:17:57.960 what is that benefit, Well, hedging is the best answer. 0:17:58.440 --> 0:18:00.960 And so you will regularly see people say, oh, yeah, 0:18:01.240 --> 0:18:03.320 of course we should have a sports prediction market on 0:18:03.400 --> 0:18:06.720 a regulated futures exchange because bars near Wrigley Field needs 0:18:06.720 --> 0:18:08.680 to heads to the risk of not making the playoffs 0:18:08.720 --> 0:18:10.760 and you know, not having ten more home games to 0:18:10.800 --> 0:18:13.440 sell beer at. And this always struck me as absurd, 0:18:13.480 --> 0:18:15.159 but it is true that, like, you know, there's like 0:18:15.200 --> 0:18:20.000 some tiny marginal hedging benefit, and that tiny marginal hedging benefit, 0:18:21.400 --> 0:18:25.879 theoretical hedging benefit is the wedge that people use to 0:18:26.040 --> 0:18:30.640 justify futures markets as sports scambling platforms. I once hurt, 0:18:30.680 --> 0:18:32.880 like I won't start to a person at who works 0:18:32.880 --> 0:18:35.840 in the sports features business who said, well, you know, 0:18:35.840 --> 0:18:39.240 there's like big brands that sign multimillion dollar marketing deals 0:18:39.240 --> 0:18:42.440 with you know, tennis stars, and like their performance in 0:18:42.520 --> 0:18:46.000 tennis tournaments is economically material to like Nike or whatever, 0:18:46.280 --> 0:18:48.280 so they should be able to hedge that in the 0:18:48.320 --> 0:18:51.600 sports futures market, right, So sure, why not? So that's 0:18:51.600 --> 0:18:53.800 why that's why this is all happening, right, Like the 0:18:53.880 --> 0:18:59.040 reason that there are increasingly legal and popular sports futures 0:18:59.560 --> 0:19:03.240 exchange is because they can be like, no, it's not gambling, 0:19:03.280 --> 0:19:04.520 it's for bars to hedge. 0:19:04.720 --> 0:19:12.480 Yeah, totally innocent. Great question. Duncan mail Bag nail Bag 0:19:13.240 --> 0:19:16.440 Leo also has a question, and his question is that 0:19:16.560 --> 0:19:19.200 I just opened a no penalty CD at my bank 0:19:19.560 --> 0:19:22.200