WEBVTT - Uncatchable Mouse Jigglers: TSLA, PARA, WFC WFH

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News. He's a money stuff guy. Yeah,

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<v Speaker 1>it'll be great.

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<v Speaker 2>Hello, and welcome to the Money Stuff Podcast. Here weekly

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<v Speaker 2>podcast where we talk about stuff related to money and

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<v Speaker 2>Elon Musk. I'm Matt Levian and I are at the

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<v Speaker 2>Moneystuff column for Bloomberg Opens and.

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<v Speaker 1>I'm Katie Greifeld. I'm a reporter for Bloomberg News and

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<v Speaker 1>an anchor for Bloomberg Television.

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<v Speaker 2>What are you talking about today, Katie?

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<v Speaker 1>Okay, we're obviously talking about Elon Musk and the results

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<v Speaker 1>of the shareholder vote, the two prong issues there.

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<v Speaker 3>We're going to talk about.

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<v Speaker 1>An extremely messy deal.

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<v Speaker 3>We're talking about the Paramount.

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<v Speaker 1>Skydance deal, and then we're going to talk about mouse

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<v Speaker 1>jigglers and Wells Fargo and getting fired.

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<v Speaker 2>Sounds great. He is a money stuff guy.

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<v Speaker 3>It's Friday morning in America.

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<v Speaker 2>Elon Musk has gotten his money. He has, I mean

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<v Speaker 2>sort of. He had the vote for his money. Did

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<v Speaker 2>he get his money? Complicated question?

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<v Speaker 3>Yeah, TBD on that point.

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<v Speaker 1>So the shareholder vote happened for for Tesla, and I

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<v Speaker 1>think it was I think this is the most boring

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<v Speaker 1>outcome actually, So they.

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<v Speaker 2>Had to vote on two things right. One is should

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<v Speaker 2>Helen Musk get his money? And the other was should

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<v Speaker 2>they reincorporate to Texas? Right. If they voted against them

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<v Speaker 2>getting his money, that would have been like some real fireworks,

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<v Speaker 2>like amazing if you have quit in a huff last night,

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<v Speaker 2>who knows. But they voted in favor of him getting

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<v Speaker 2>his money, so he's going to stay. And then I

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<v Speaker 2>sort of thought they would vote against moving to Texas

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<v Speaker 2>because my impression was that institutional shareholders like the predictability

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<v Speaker 2>and protections of Delaware law, and that Elon Musk being

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<v Speaker 2>kind of a whimsical dude, they thought it would be

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<v Speaker 2>nice to have a court that would rain him in.

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<v Speaker 2>But no more shareholders voted to move to Texas than

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<v Speaker 2>voted for his pay.

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<v Speaker 1>Yeah, and I mean and seventy two percent voted for

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<v Speaker 1>his pay, So the support for the movie to Texas

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<v Speaker 1>was broad.

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<v Speaker 2>Yeah. So this is all driven by the fact that

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<v Speaker 2>earlier this year a Delaware court struck down that twenty

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<v Speaker 2>eighteen pay package that he got. Right, So in twenty eighteen,

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<v Speaker 2>Tesla gave him a bunch of options that if he

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<v Speaker 2>hit some very ambitious milestones, he'd get you know, fifty

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<v Speaker 2>six billion dollars. He hit all the milestones, he got

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<v Speaker 2>all the options. A shareholder sued, saying that like the

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<v Speaker 2>process of paying him was too conflicted, And earlier this year,

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<v Speaker 2>a Delaware court said, we agree, we're taking back the options.

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<v Speaker 2>And so Tesla is voting to give him back the

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<v Speaker 2>options and to get out of Delaware because they don't

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<v Speaker 2>like that. And I remember when I wrote about the

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<v Speaker 2>court decision earlier this year, I was like, this seems

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<v Speaker 2>kind of wrong, right, Like I'm not like a you know,

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<v Speaker 2>devoted Elon Musk fan here, but like the shareholders voted

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<v Speaker 2>to give him the money. The court decided that the

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<v Speaker 2>vote wasn't fully informed, but it was pretty informed, like

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<v Speaker 2>they knew how much money they were giving him, and

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<v Speaker 2>like what the targets were, and he hit the targets

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<v Speaker 2>and they were happy. So it struck me as kind

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<v Speaker 2>of a weird decision. It might have been in the law,

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<v Speaker 2>but it was protective of shareholders in a way that

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<v Speaker 2>like the shareholders clearly didn't want, right, Like, the shareholders

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<v Speaker 2>got the benefit of their bargain, which was Elon Musk

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<v Speaker 2>took the company to six hundred and fifty billion dollars,

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<v Speaker 2>and this court decision seemed to kind of interfere in

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<v Speaker 2>the relationship between the company and its shareholders. And I

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<v Speaker 2>think that's what the vote last night says, right, like,

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<v Speaker 2>not only did the shareholders vote to bring back the

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<v Speaker 2>pay bagage, but they also said, yeah, we think that,

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<v Speaker 2>like this Delaware decision was wrong and we now reject

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<v Speaker 2>Delaware law, which I think is kind of an interesting outcome, right, Like, Yeah,

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<v Speaker 2>Tessa is a weird company. It's got a weird CEO

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<v Speaker 2>and a weird relationship with him, and it's got a

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<v Speaker 2>lot of retail shareholders who are maybe more inclined to

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<v Speaker 2>vote for like a populace to move to Texas than

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<v Speaker 2>like the average institutional shareholders. But a lot of institutional

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<v Speaker 2>shareholders voted to move to Texas, and like iss the

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<v Speaker 2>proxy advisor said, yeah, you should vote to move to Texas.

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<v Speaker 2>So I'm interested to see going forward, will other companies

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<v Speaker 2>copy this, because like I would have thought that a

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<v Speaker 2>lot of companies would say, I would like to have

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<v Speaker 2>a little bit less shareholder protection and a little bit

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<v Speaker 2>more freehand for the board and the CEO. But if

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<v Speaker 2>I actually try to do that, my shareholders will say no. No,

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<v Speaker 2>we want the protections. We see you trying to get

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<v Speaker 2>away from a sort of strict corporate law, and we're

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<v Speaker 2>going to vote against that. But now the shareolders votedn't

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<v Speaker 2>for it at Tesla. I don't know are other companies

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<v Speaker 2>going to follow along.

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<v Speaker 1>I mean, it'll be interesting to see what this means

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<v Speaker 1>for Texas. Obviously, the business courts in Delaware are extremely

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<v Speaker 1>well established. Comparatively, Texas is not exactly there, so I

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<v Speaker 1>don't know. Maybe we'll get some precedents sent there. But

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<v Speaker 1>I mean, you made the point in your sort of

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<v Speaker 1>walk up column that if you think about the reasons

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<v Speaker 1>why the twenty eighteen pay package was voided by that

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<v Speaker 1>Delaware judge, there was this idea that the conflicts of

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<v Speaker 1>interest in the board and other details weren't properly disclosed

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<v Speaker 1>and well known. And I feel like with this vote,

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<v Speaker 1>obviously everything's out in the open.

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<v Speaker 2>So I think that I read yesterday is that, like,

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<v Speaker 2>so the judge found that in twenty eighteen the board

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<v Speaker 2>was sort of in the pocket of Elon Musk, and

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<v Speaker 2>the proxy didn't fully disclose all of that, right, and

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<v Speaker 2>so this this year, this vote, the proxy just discloses

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<v Speaker 2>the judge's entire opinion, like it's attached to the back.

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<v Speaker 2>So if you're interested to know what conflicts you know,

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<v Speaker 2>were involved in the twenty eighteen decision to pay Elon Musk,

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<v Speaker 2>you can go read the opinion and get like all

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<v Speaker 2>of the like the worst case for the conflicts. But

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<v Speaker 2>I mean the point yesterday that there are new conflicts, right,

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<v Speaker 2>there's all this stuff about Elon doing AI at other companies,

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<v Speaker 2>if at his other companies, if he doesn't get his

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<v Speaker 2>money at Tesla. Earlier this year, Elan Musk asking for

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<v Speaker 2>another pay package. This is back when he still had

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<v Speaker 2>these options before the judge took them away. He asked

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<v Speaker 2>for another big pay package to get his stock ownership

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<v Speaker 2>up at Tesla, and he said, if I don't get

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<v Speaker 2>another big pay package, I won't be able to build

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<v Speaker 2>AI at Tesla. There's that reporting about how there were

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<v Speaker 2>like some in Vidio chips that were ear marked for

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<v Speaker 2>Tesla that he called up in video and said no,

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<v Speaker 2>that sent them to X and said is you know Twitter.

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<v Speaker 2>So there's all this stuff about his conflicts of interest,

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<v Speaker 2>his threats, his like you know, demands for new compensation.

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<v Speaker 2>All this stuff is not really addressed in the in

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<v Speaker 2>the current Tesla proxy and like, I don't know. If

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<v Speaker 2>I were a disgruntled shareholder, I'd be writing another lot

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<v Speaker 2>suit being like, well there's more stuff you didn't disclose.

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<v Speaker 2>But that said, like you know, as I said, like,

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<v Speaker 2>I think that the meaning of last night's vote is

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<v Speaker 2>that Delaware's interference here is wrong and not what shareholders

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<v Speaker 2>want and not what is good for shareholders.

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<v Speaker 1>So I do wonder what was on the mind of

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<v Speaker 1>the large retail shareholder base. Not to speak of them

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<v Speaker 1>all as a monolist, but I mean, in many ways,

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<v Speaker 1>this was just seen as a referendum on Musk and

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<v Speaker 1>his leadership of the company.

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<v Speaker 3>And the point has been made.

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<v Speaker 1>It's very well known that the retail shareholders of Tesla

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<v Speaker 1>love Elon Musk. They're there because they love Elon Musk.

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<v Speaker 2>Tesla has a much more retail shareholder based than a

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<v Speaker 2>lot of companies, but like almost half institutional, and those

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<v Speaker 2>people voted pretty strongly in favor of moving to Texas

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<v Speaker 2>and also in favor of the pay more for Texas

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<v Speaker 2>than for the pey. It's an impressive outcome for him.

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<v Speaker 2>A month ago, like he was clearly focused on his

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<v Speaker 2>AI stuff at other companies, and five months ago he

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<v Speaker 2>was asking for more money from Tesla. I wonder if

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<v Speaker 2>this traumatic experience has brought them closer together so that

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<v Speaker 2>now he will spend more time on Tesla and not

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<v Speaker 2>demand more money, or if it's like after winning the

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<v Speaker 2>vote this week, he will go back to messing around

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<v Speaker 2>with Xai and ignoring Tesla. I don't know. I don't know.

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<v Speaker 1>I kind of lean towards the ladder, but what do

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<v Speaker 1>I know?

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<v Speaker 3>But I will say.

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<v Speaker 2>Too, he's a short attention spatter. I think he's going

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<v Speaker 2>to go do something else next week.

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<v Speaker 1>Yeah, that's a very strong bare case like that doesn't

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<v Speaker 1>even though we're past the vote, seventy two percent voted

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<v Speaker 1>for the pay package, it doesn't fix the problem of

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<v Speaker 1>Musk is distracted. It seems like he has more fun

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<v Speaker 1>things going on than Tesla struggles right now, and you've

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<v Speaker 1>seen all of these big.

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<v Speaker 3>Tesla bulls come out.

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<v Speaker 1>I'm thinking about Dan Ives at Webbush saying this removes

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<v Speaker 1>a huge overhang for the stock, Tesla market cap to

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<v Speaker 1>a trillion dollars. I don't necessarily know if that's the case.

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<v Speaker 2>I don't think Elon being distracted is necessarily a bare case.

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<v Speaker 2>I think the counter argument is space Ax, where he

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<v Speaker 2>doesn't seem to have a ton of day to day involvement.

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<v Speaker 2>There's a professional team running it and it's very successful.

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<v Speaker 2>But also it's got the Elon Musk halo, which helps

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<v Speaker 2>it like raise money and sort of be high profile.

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<v Speaker 2>You could tell a similar story about a Tesla where

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<v Speaker 2>like some team of managers run it as a competent

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<v Speaker 2>car company without doing weird stuff, and Elon Musk remains

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<v Speaker 2>the CEO and biggest shareholder and sort of figurehead, such

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<v Speaker 2>that it has a high stock market valuation and can

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<v Speaker 2>raise money from retail investors and it's just like always

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<v Speaker 2>in the news. That's not the worst outcome for Tesla.

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<v Speaker 2>I don't think. I don't know that having him in

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<v Speaker 2>the day to day design process for the cars is

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<v Speaker 2>super additive. Like I don't know, everyone seems to think

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<v Speaker 2>the cyber truck is really ugly and that's clearly his baby,

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<v Speaker 2>So maybe like a distracted but happy Elon is the

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<v Speaker 2>kind of best outcome for Tesla.

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<v Speaker 1>Maybe I'm just thinking about again, like the fundamentals of

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<v Speaker 1>the EV industry right now, it feels like every single

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<v Speaker 1>automaker has I'm exaggerating, but has skilled back EV production.

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<v Speaker 1>There's this big leading into high where it seems like

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<v Speaker 1>the American driver is also going. Tesla's never going to

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<v Speaker 1>make a hybrid. Maybe I'll be proven wrong.

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<v Speaker 2>But it's not. With Elon paying more attention to it

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<v Speaker 2>is not going to make it make a hybrid.

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<v Speaker 1>True, true, I don't know. I mean SpaceX is a

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<v Speaker 1>good example, a good counterweight, because it seems like cracking

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<v Speaker 1>the private space industry would be harder than cracking the

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<v Speaker 1>EV industry. So and SpaceX did that, so maybe maybe

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<v Speaker 1>things will.

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<v Speaker 3>Be fine at Tesla.

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<v Speaker 1>I guess the point that I'm making is that I've

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<v Speaker 1>interviewed all of these automaker chief executives.

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<v Speaker 3>I'm talking to the Kia.

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<v Speaker 1>COO in like two hours. Like the EV market is

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<v Speaker 1>in a storm right now.

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<v Speaker 2>Yeah, Like the governance is sort of like unrelated to

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<v Speaker 2>that much. Elon Musk is not going to fix the

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<v Speaker 2>EV market. And I don't know. I mean, like you

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<v Speaker 2>can tell the story that like the EV market is

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<v Speaker 2>in America is partly politicized, and like that slows down

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<v Speaker 2>adoption and Elon Musk could help you know deeput it

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<v Speaker 2>hiss has EV adoption or politicize it the other way.

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<v Speaker 2>But I don't know, I don't really see that, Like

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<v Speaker 2>I just I think that at this point, Tesla the

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<v Speaker 2>company faces the same headwinds as every other you know,

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<v Speaker 2>EV manufacturer, except that it is only an EV manufacturer,

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<v Speaker 2>And Tesla the stock has just the sort of vague

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<v Speaker 2>halo effect of like it's the one public way to

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<v Speaker 2>invest in Elon Musk, and so it trades at a

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<v Speaker 2>premium because if you like Elon Musk's whole stick, and

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<v Speaker 2>you don't care much about EV's, but you're just like,

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<v Speaker 2>how do I buy like the Elon Musk thing? The

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<v Speaker 2>only way to do it as a public investor is

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<v Speaker 2>to buy Tesla stock, And so it trades on that.

0:10:33.400 --> 0:10:37.360
<v Speaker 2>And you know what particular parts of the Elon Musk

0:10:37.400 --> 0:10:40.319
<v Speaker 2>empire are conducted in Tesla as opposed to at his

0:10:40.400 --> 0:10:43.880
<v Speaker 2>private companies, Like doesn't necessarily matter that much for the

0:10:44.080 --> 0:10:45.160
<v Speaker 2>for the price of the stock.

0:10:45.240 --> 0:10:47.920
<v Speaker 1>I'm more thinking of, like not him making good decisions

0:10:48.000 --> 0:10:50.560
<v Speaker 1>for Tesla, but him stopping good decisions that could be

0:10:50.600 --> 0:10:53.520
<v Speaker 1>made at Tesla. Like you think about him, what firing

0:10:53.559 --> 0:10:56.280
<v Speaker 1>the Supercharger team and then rehiring a bunch of them

0:10:56.520 --> 0:11:00.800
<v Speaker 1>that wasn't great, Like wavering on plans for a much

0:11:00.880 --> 0:11:04.200
<v Speaker 1>cheaper ev model that wasn't great. That did shake a

0:11:04.240 --> 0:11:07.480
<v Speaker 1>lot of even the biggest Tesla bowls conviction in the stock.

0:11:07.559 --> 0:11:10.720
<v Speaker 1>And then I don't know, the Robotaxi dreams seemed to

0:11:10.760 --> 0:11:13.800
<v Speaker 1>be and the cyber truck too seemed to be like

0:11:13.840 --> 0:11:15.320
<v Speaker 1>an expensive waste of money.

0:11:15.559 --> 0:11:18.040
<v Speaker 2>We could have done this on yesterday, is the.

0:11:18.000 --> 0:11:20.080
<v Speaker 3>Thing, like, yeah, we probably should have.

0:11:20.520 --> 0:11:22.839
<v Speaker 2>We thought that there would be like late breaking news,

0:11:22.880 --> 0:11:24.640
<v Speaker 2>but in fact there was early breaking news, and then

0:11:24.679 --> 0:11:26.079
<v Speaker 2>it turned out to be true. By the way, I

0:11:26.120 --> 0:11:28.160
<v Speaker 2>would have been so excited, like the outcome, I was

0:11:28.160 --> 0:11:31.960
<v Speaker 2>really rooting for it. Once he tweeted yesterday Thursday. Once

0:11:32.000 --> 0:11:34.800
<v Speaker 2>he tweeted on Thursday that that he had won the vote,

0:11:34.840 --> 0:11:36.439
<v Speaker 2>obviously the outcome I was reading for is that he

0:11:36.440 --> 0:11:38.480
<v Speaker 2>had lost the vote. I was gonna get sued, but

0:11:39.120 --> 0:11:41.040
<v Speaker 2>didn't come to pass. The tweet was true.

0:11:41.240 --> 0:11:54.040
<v Speaker 4>That would have fit delicious.

0:11:54.960 --> 0:11:57.160
<v Speaker 1>And now we're back from the ad break we heard

0:11:57.200 --> 0:11:59.760
<v Speaker 1>from our future selves. I think I said last week

0:12:00.080 --> 0:12:02.120
<v Speaker 1>that we're really learning that time is a concept, and

0:12:02.160 --> 0:12:04.040
<v Speaker 1>we're doing that again because now it's you and I

0:12:04.120 --> 0:12:05.520
<v Speaker 1>talking on a Thursday afternoon.

0:12:05.760 --> 0:12:08.920
<v Speaker 2>We have traveled back in time to Thursday afternoon. It

0:12:08.960 --> 0:12:12.120
<v Speaker 2>was nice Thursday after Again, here we.

0:12:12.040 --> 0:12:13.800
<v Speaker 3>Are and we traveled back in time.

0:12:14.160 --> 0:12:16.880
<v Speaker 1>Yeah, why live in a Friday when you can live

0:12:16.920 --> 0:12:18.400
<v Speaker 1>in a perpetual Thursday.

0:12:18.559 --> 0:12:20.480
<v Speaker 2>So it's the this podcast.

0:12:20.840 --> 0:12:24.960
<v Speaker 1>Absolutely let's talk about sky Dance and Paramount and the

0:12:25.040 --> 0:12:26.720
<v Speaker 1>deal that will never.

0:12:26.640 --> 0:12:27.680
<v Speaker 3>Be question Mark.

0:12:28.040 --> 0:12:29.040
<v Speaker 2>It's pretty wild.

0:12:29.480 --> 0:12:33.760
<v Speaker 1>Yeah, we have talked about it once on this I

0:12:34.000 --> 0:12:37.120
<v Speaker 1>forget what we said, but now we're sort of talking

0:12:37.120 --> 0:12:42.480
<v Speaker 1>about we're talking about it's obituary because no, not yet,

0:12:42.880 --> 0:12:46.880
<v Speaker 1>at least, this deal's obituary because National Amusement read Sherry

0:12:46.920 --> 0:12:48.959
<v Speaker 1>Redstone stopped the deal.

0:12:49.679 --> 0:12:51.640
<v Speaker 3>It's not going to happen with sky Dance at least.

0:12:52.040 --> 0:12:54.080
<v Speaker 2>Yeah. I love it. I love it. It's such a

0:12:54.120 --> 0:12:58.240
<v Speaker 2>complicated deal because of a very simple thing, which is

0:12:58.240 --> 0:13:03.320
<v Speaker 2>that so jarriets that Amusements. National Amusements owns some movie

0:13:03.360 --> 0:13:07.319
<v Speaker 2>theaters and also a block of Paramount stock. Paramount is

0:13:07.360 --> 0:13:09.360
<v Speaker 2>like an eight billion dollar public company has a lot

0:13:09.360 --> 0:13:12.720
<v Speaker 2>of interesting, you know, TV and movie assets, and people

0:13:12.760 --> 0:13:15.320
<v Speaker 2>want to buy it, and Shari Redstone, who inherited it

0:13:15.360 --> 0:13:18.280
<v Speaker 2>from her father, seems to want to sell it. Although

0:13:18.280 --> 0:13:22.559
<v Speaker 2>no one's really sure. And the thing about National Amusements

0:13:22.640 --> 0:13:26.000
<v Speaker 2>is that it owns around five percent of Paramount's stock,

0:13:26.480 --> 0:13:28.839
<v Speaker 2>but it owns most of the voting stock. Most of

0:13:28.840 --> 0:13:31.319
<v Speaker 2>the Paramount stock doesn't vote, so Shary Redstone, although she

0:13:31.360 --> 0:13:34.480
<v Speaker 2>has like a fairly small economic interest in Paramount, has

0:13:34.800 --> 0:13:37.480
<v Speaker 2>voting control of her Paramount. So that means anyone who

0:13:37.480 --> 0:13:41.240
<v Speaker 2>wants to buy Paramount has to get her approval because

0:13:41.240 --> 0:13:43.720
<v Speaker 2>she controls the vote even though she doesn't have that

0:13:43.800 --> 0:13:47.120
<v Speaker 2>much stock. But it also means that like anyone who

0:13:47.120 --> 0:13:49.320
<v Speaker 2>wants to deal with her, you know, has to pay

0:13:49.360 --> 0:13:52.160
<v Speaker 2>her off at a premium. And then the rest of

0:13:52.200 --> 0:13:55.080
<v Speaker 2>the Paramount shareholders, if they don't get the same deal,

0:13:55.160 --> 0:13:57.320
<v Speaker 2>are going to complain. And that's the problem with doing

0:13:57.360 --> 0:13:59.839
<v Speaker 2>a deal here. And it sort of looked like some

0:14:00.000 --> 0:14:01.959
<v Speaker 2>I wanted to find a way to overcome that problem,

0:14:02.120 --> 0:14:04.200
<v Speaker 2>and nobody did, and the di'll just fell apart.

0:14:04.400 --> 0:14:08.120
<v Speaker 1>It fell apart really quickly too, And it is an

0:14:08.160 --> 0:14:10.920
<v Speaker 1>incredible end because, first of all, this is something that

0:14:10.960 --> 0:14:16.160
<v Speaker 1>Cherry Redstone originally was campaigning for for months, and Ellison

0:14:16.200 --> 0:14:19.240
<v Speaker 1>and sky Dance did switch it around a lot and

0:14:19.400 --> 0:14:22.120
<v Speaker 1>tried to make this work and revise their offer a

0:14:22.160 --> 0:14:25.160
<v Speaker 1>bunch of times, and then just this week it fell apart,

0:14:25.200 --> 0:14:29.160
<v Speaker 1>and there's been a lot of different reporting as to why.

0:14:29.880 --> 0:14:32.280
<v Speaker 1>A lot of people familiar with the matter have commented

0:14:32.440 --> 0:14:36.200
<v Speaker 1>on this to different outlets. The Wall Street Journal I

0:14:36.240 --> 0:14:40.640
<v Speaker 1>found this explanation satisfying that basically they reported that she

0:14:40.720 --> 0:14:43.960
<v Speaker 1>feared potential shareholder litigation over a deal that her critics

0:14:44.080 --> 0:14:47.760
<v Speaker 1>said would disadvantage ordinary investors in Paramount. And this seems

0:14:47.840 --> 0:14:51.000
<v Speaker 1>key legal fees that might eat into her family's fortune.

0:14:51.080 --> 0:14:52.480
<v Speaker 1>That would make sense when you.

0:14:52.440 --> 0:14:54.280
<v Speaker 2>Say she was advocating for this deal and then it

0:14:54.280 --> 0:14:57.240
<v Speaker 2>fell apart really rapidly. I think that what happened is

0:14:57.280 --> 0:15:01.520
<v Speaker 2>that originally Skydance to a shi Redstone and said, we

0:15:01.560 --> 0:15:03.720
<v Speaker 2>want to do a deal with you where we give

0:15:03.720 --> 0:15:08.520
<v Speaker 2>you money for National Amusements, and then we simultaneously negotiate

0:15:08.560 --> 0:15:10.600
<v Speaker 2>a deal with Paramount so that like when we acquire

0:15:10.720 --> 0:15:12.800
<v Speaker 2>National Amusements, we end up in control of Paramount and

0:15:12.800 --> 0:15:15.160
<v Speaker 2>we can sort of do the merger that we want

0:15:15.200 --> 0:15:17.640
<v Speaker 2>with Paramount. And Shah Redstone is, oh, yeah, it sounds good,

0:15:18.000 --> 0:15:19.920
<v Speaker 2>and they offered to pay her a lot of money

0:15:20.120 --> 0:15:22.440
<v Speaker 2>for her National Amusements take. But then over time, as

0:15:22.480 --> 0:15:26.120
<v Speaker 2>they negotiated with the board. The Board of Paramount wanted

0:15:26.320 --> 0:15:29.440
<v Speaker 2>more stuff for the regular public shareholders. Like they said,

0:15:29.440 --> 0:15:31.280
<v Speaker 2>if you just give Shay Redstone all this money and

0:15:31.320 --> 0:15:34.520
<v Speaker 2>don't give anything to the regular shaholders, one, that's going

0:15:34.600 --> 0:15:36.080
<v Speaker 2>to look bad. It's going to be bad for our

0:15:36.160 --> 0:15:39.000
<v Speaker 2>fiduciary duties as a board to protect the public shareolders.

0:15:39.120 --> 0:15:41.440
<v Speaker 2>But then also like, we'll get sued. You'll get sued.

0:15:41.440 --> 0:15:43.720
<v Speaker 2>Everyone gets sued. So what we need to do is

0:15:43.760 --> 0:15:46.640
<v Speaker 2>strike a better deal for the public shareholders, and sky

0:15:46.720 --> 0:15:48.920
<v Speaker 2>Dances like, sure, yeah, we can do that. We can

0:15:48.920 --> 0:15:50.160
<v Speaker 2>take some of the money we're gonna give to the

0:15:50.160 --> 0:15:52.760
<v Speaker 2>Shay Redstone and give it to the public shareholders instead,

0:15:52.920 --> 0:15:55.040
<v Speaker 2>and then everyone will be happier, except that then Shah

0:15:55.160 --> 0:15:57.160
<v Speaker 2>Redstone wasn't happier because they're taking money from her and

0:15:57.200 --> 0:15:59.000
<v Speaker 2>giving it to the shareolders. So I think part of

0:15:59.000 --> 0:16:03.240
<v Speaker 2>why the deal fell apart is because it's almost impossible

0:16:03.520 --> 0:16:06.280
<v Speaker 2>to like just accomplish this, to like do a deal

0:16:06.280 --> 0:16:08.800
<v Speaker 2>that is good for Shih Edstone and also doesn't get

0:16:08.800 --> 0:16:11.400
<v Speaker 2>you sued by shareholders. And I think she eventually concluded

0:16:11.640 --> 0:16:13.360
<v Speaker 2>that she was going to get sued by shaholders and

0:16:13.360 --> 0:16:16.040
<v Speaker 2>it wasn't worth it. But also they did try to

0:16:16.080 --> 0:16:18.640
<v Speaker 2>accomplish it, but that meant taking money away from her

0:16:18.680 --> 0:16:21.040
<v Speaker 2>part of the deal, and that made her less inclined

0:16:21.040 --> 0:16:22.720
<v Speaker 2>to do it. Right, if she was getting all the money,

0:16:22.720 --> 0:16:24.560
<v Speaker 2>she could pay the legal fees. But if she's getting

0:16:24.600 --> 0:16:26.160
<v Speaker 2>less of the money, then like ah, she's thills us

0:16:26.160 --> 0:16:27.440
<v Speaker 2>to pay the legal fees. She doesn't want to do

0:16:27.520 --> 0:16:27.800
<v Speaker 2>the deal.

0:16:27.960 --> 0:16:30.800
<v Speaker 1>It almost feels like a Golden Shar's situation, which doesn't

0:16:30.840 --> 0:16:33.880
<v Speaker 1>really exist in America, but it exists more formally in

0:16:33.920 --> 0:16:36.640
<v Speaker 1>the UK and increasingly in China.

0:16:36.960 --> 0:16:37.800
<v Speaker 4>And it just.

0:16:37.800 --> 0:16:41.840
<v Speaker 1>Seems impossible to have good governance in this type of situation.

0:16:42.200 --> 0:16:44.320
<v Speaker 2>This company has always sort of had famously bad governance.

0:16:44.640 --> 0:16:46.800
<v Speaker 2>I mean, like, the situation is just bad governance, right,

0:16:46.800 --> 0:16:49.680
<v Speaker 2>I mean, someone who inherited the company and has like

0:16:49.720 --> 0:16:53.040
<v Speaker 2>a fairly small minority economic interest in it, but who

0:16:53.560 --> 0:16:56.400
<v Speaker 2>has complete voting control and can can sort of block

0:16:56.400 --> 0:16:59.720
<v Speaker 2>any deal she doesn't like is an unusual situation. And

0:17:00.000 --> 0:17:01.920
<v Speaker 2>because it is a big public media company, it has

0:17:01.960 --> 0:17:05.280
<v Speaker 2>like a fairly independent board of directors, or it has

0:17:05.320 --> 0:17:08.520
<v Speaker 2>had fairly dependent board of directors sometimes who have gotten

0:17:08.520 --> 0:17:10.280
<v Speaker 2>in fights with shire Redstone and have tried to like

0:17:10.320 --> 0:17:12.840
<v Speaker 2>take away her voting control. And even now, you know,

0:17:12.920 --> 0:17:15.600
<v Speaker 2>like I think the impression is that some members of

0:17:15.640 --> 0:17:19.159
<v Speaker 2>the board were the ones sort of saying to Shay, like,

0:17:19.400 --> 0:17:21.320
<v Speaker 2>this deal is not going to work. You're gonna get sued.

0:17:21.880 --> 0:17:25.520
<v Speaker 2>It's not sufficiently you know, detective of minority shoulders. The

0:17:25.560 --> 0:17:28.439
<v Speaker 2>other thing is like shire Redstone is worried about getting sued.

0:17:28.720 --> 0:17:32.040
<v Speaker 2>One thing that could potentially help is like asking the

0:17:32.119 --> 0:17:34.800
<v Speaker 2>other shareholders to vote to approve the deal. So most

0:17:34.800 --> 0:17:38.320
<v Speaker 2>apparent Stock doesn't have any voting rights, and so it's

0:17:38.359 --> 0:17:41.040
<v Speaker 2>just like, what if the board agrees to share, I

0:17:41.080 --> 0:17:43.919
<v Speaker 2>can just share Redstone can just ratify. But she was

0:17:43.960 --> 0:17:47.560
<v Speaker 2>thinking about conditioning the merger on the majority of the

0:17:48.280 --> 0:17:51.040
<v Speaker 2>non voting shareholders, you know, holding a vote and having

0:17:51.119 --> 0:17:53.479
<v Speaker 2>them vote to approve it, because then if they if

0:17:53.560 --> 0:17:55.520
<v Speaker 2>they approve, that she'd be less likely to get sued.

0:17:55.880 --> 0:17:58.040
<v Speaker 2>But my understanding is that Skidance didn't like that idea

0:17:58.080 --> 0:17:59.800
<v Speaker 2>because they're like, you know, we're giving you this money,

0:18:00.040 --> 0:18:01.720
<v Speaker 2>want to actually have a deal. We don't want to

0:18:01.760 --> 0:18:04.640
<v Speaker 2>have to worry about the non voting shareholders turning it down.

0:18:04.920 --> 0:18:06.199
<v Speaker 3>Well, they have to do something.

0:18:06.280 --> 0:18:09.680
<v Speaker 1>This is a company in a struggling industry with enormous

0:18:09.720 --> 0:18:12.520
<v Speaker 1>amounts of debt. But Matt, I have good news. The

0:18:12.560 --> 0:18:15.040
<v Speaker 1>good news is that in a moment like this, when

0:18:15.080 --> 0:18:18.400
<v Speaker 1>your searching eyes are looking for the CEO, the good

0:18:18.400 --> 0:18:21.560
<v Speaker 1>news is that there's not one CEO. There's three CEOs

0:18:21.680 --> 0:18:22.480
<v Speaker 1>in this situation.

0:18:23.000 --> 0:18:25.640
<v Speaker 2>I think when we last talked about this situation said

0:18:25.720 --> 0:18:28.119
<v Speaker 2>something like having three CEOs is really a sign that

0:18:28.160 --> 0:18:30.000
<v Speaker 2>you're going to do a deal really soon, because you

0:18:30.040 --> 0:18:32.240
<v Speaker 2>can't just run the company with three cos. But now

0:18:32.280 --> 0:18:34.479
<v Speaker 2>here they are. I've got three CEOs.

0:18:34.000 --> 0:18:35.880
<v Speaker 1>And I know I love it.

0:18:36.000 --> 0:18:37.760
<v Speaker 2>There are some rivers that are going to replace those

0:18:37.760 --> 0:18:40.360
<v Speaker 2>three CEOs with a fourth, different CEO, but he knows.

0:18:40.640 --> 0:18:43.360
<v Speaker 1>Yeah, there's sort of this monolith just called the Office

0:18:43.359 --> 0:18:46.159
<v Speaker 1>of the CEO, which is incredible and definitely at the

0:18:46.240 --> 0:18:48.360
<v Speaker 1>time it was like, Okay, this is just a band aid,

0:18:48.400 --> 0:18:51.440
<v Speaker 1>weird situation, holding pattern until a deal is done, and

0:18:51.520 --> 0:18:54.840
<v Speaker 1>maybe it'll go back to being a more typical structure.

0:18:54.840 --> 0:18:58.240
<v Speaker 1>But for right now, they have three CEOs and apparently

0:18:58.240 --> 0:19:00.840
<v Speaker 1>it has a plan for going forward. The Office of

0:19:00.880 --> 0:19:05.440
<v Speaker 1>the CEO. CNBC obtained a memo that they released on Wednesday,

0:19:06.240 --> 0:19:08.880
<v Speaker 1>saying that they're going to remain open to exploring strategic

0:19:08.960 --> 0:19:11.960
<v Speaker 1>alternatives that create value for shareholders. They also said that

0:19:11.960 --> 0:19:15.000
<v Speaker 1>they're going to continue to focus on executing the strategic

0:19:15.080 --> 0:19:19.119
<v Speaker 1>plan that they unveiled in the last couple weeks, so

0:19:19.280 --> 0:19:19.960
<v Speaker 1>we'll see.

0:19:20.160 --> 0:19:22.280
<v Speaker 2>I love them, they're fighting for their jobs.

0:19:23.040 --> 0:19:26.119
<v Speaker 1>They're really fighting, but again, they need to do something.

0:19:26.280 --> 0:19:28.720
<v Speaker 1>In one of the reports, there's just been so much

0:19:28.800 --> 0:19:32.560
<v Speaker 1>on this, but apparently a special committee of directors recommended

0:19:32.600 --> 0:19:36.560
<v Speaker 1>that Paramount could not continue as a standalone business. So

0:19:36.600 --> 0:19:38.359
<v Speaker 1>something needs to get done here. And then Moody's was

0:19:38.359 --> 0:19:40.960
<v Speaker 1>out this week warning and this was prior to the

0:19:41.000 --> 0:19:45.080
<v Speaker 1>collapse that unless there's some sort of strategic transaction that

0:19:45.720 --> 0:19:48.520
<v Speaker 1>comes along with cost cutting opportunities, basically they're going to

0:19:48.520 --> 0:19:49.600
<v Speaker 1>get downgraded as well.

0:19:49.880 --> 0:19:52.119
<v Speaker 2>Yeah, it's not a good situation. The impression I get

0:19:52.200 --> 0:19:55.320
<v Speaker 2>is that this deal is pretty dead. There was another suitor,

0:19:55.400 --> 0:19:57.560
<v Speaker 2>right Sony and Apollo. We're looking at the company, and

0:19:57.600 --> 0:19:59.960
<v Speaker 2>the deal seems to have faded away because in part,

0:20:00.119 --> 0:20:03.000
<v Speaker 2>I think because they were never really in with Sherry

0:20:03.000 --> 0:20:05.800
<v Speaker 2>Redstone and she, you know, has the controlling vote. So

0:20:05.840 --> 0:20:07.440
<v Speaker 2>it's a little unclear what happens next.

0:20:07.680 --> 0:20:10.560
<v Speaker 1>And also in deal talk there's Edgar.

0:20:12.600 --> 0:20:16.240
<v Speaker 2>Edgar who's like talking about buying National Amusements.

0:20:16.280 --> 0:20:17.080
<v Speaker 4>I think, yeah.

0:20:17.240 --> 0:20:20.120
<v Speaker 2>The impression that I get is that as this deal collapses,

0:20:20.440 --> 0:20:24.399
<v Speaker 2>the next plan, besides like finding out who the CEO is,

0:20:24.720 --> 0:20:27.160
<v Speaker 2>the next plan is for Shari Redstone to think about

0:20:27.200 --> 0:20:30.240
<v Speaker 2>selling National Amusements is just like a single thing. So

0:20:30.280 --> 0:20:33.119
<v Speaker 2>she would just sell National Amusements and then whoever buys

0:20:33.160 --> 0:20:35.520
<v Speaker 2>it it would be their problem to deal with like

0:20:35.560 --> 0:20:38.159
<v Speaker 2>the weird governance structure at Paramount and to try to

0:20:38.200 --> 0:20:41.840
<v Speaker 2>find a way to impose their will on Paramount, and

0:20:41.920 --> 0:20:43.600
<v Speaker 2>like you know, appointed your CEO to take control of

0:20:43.640 --> 0:20:46.240
<v Speaker 2>Paramount and deal with the minority shareholders and everything else.

0:20:46.520 --> 0:20:48.160
<v Speaker 2>That just wouldn't be her problem. She would just sell

0:20:48.240 --> 0:20:50.600
<v Speaker 2>National Amusements and then the new person would step into

0:20:50.640 --> 0:20:53.440
<v Speaker 2>her shoes and figure it all out. One reader email

0:20:53.720 --> 0:20:55.840
<v Speaker 2>to suggest a really good trade, which is that she

0:20:55.880 --> 0:21:00.600
<v Speaker 2>should sell National Amusements to AMC, which one's a movie

0:21:00.640 --> 0:21:04.760
<v Speaker 2>theater chain and two keeps raising money from Memestock investments,

0:21:05.240 --> 0:21:08.160
<v Speaker 2>and then AMC could sell the Paramounts shares to sky

0:21:08.280 --> 0:21:10.960
<v Speaker 2>Dance and everyone could be better off. I don't know

0:21:10.960 --> 0:21:12.679
<v Speaker 2>if that's a viable altern that's.

0:21:12.520 --> 0:21:13.320
<v Speaker 3>A pretty good idea.

0:21:13.400 --> 0:21:15.920
<v Speaker 2>It's pretty good. We've had an anti trust with with AMC.

0:21:16.040 --> 0:21:16.320
<v Speaker 2>I don't know.

0:21:16.480 --> 0:21:19.320
<v Speaker 1>There was one selsid note that suggested this was from

0:21:19.400 --> 0:21:22.919
<v Speaker 1>Luke Capital, that Warner Brothers Discovery should buy it. This

0:21:23.000 --> 0:21:26.000
<v Speaker 1>hasn't been proposed, they haven't shown any interest. But then

0:21:26.000 --> 0:21:27.840
<v Speaker 1>they also said that that's probably not going to happen

0:21:27.960 --> 0:21:30.280
<v Speaker 1>under the current administration. And also you need to see

0:21:30.280 --> 0:21:33.960
<v Speaker 1>Paramount shares go down much more more than they already

0:21:34.000 --> 0:21:36.800
<v Speaker 1>have for it to even be palatable. I just want

0:21:36.840 --> 0:21:39.719
<v Speaker 1>to read this from Walls Fargo. I mean, first of all,

0:21:39.720 --> 0:21:42.400
<v Speaker 1>Bloomberg Intelligence was out with a note saying that Paramount

0:21:42.440 --> 0:21:45.359
<v Speaker 1>is probably in a weaker position than it was six

0:21:45.400 --> 0:21:47.880
<v Speaker 1>months ago before this dragged out M and a process.

0:21:48.119 --> 0:21:50.040
<v Speaker 2>That's always true. It's always bad to do an M

0:21:50.040 --> 0:21:52.200
<v Speaker 2>and a process that hope people walk away. Although here

0:21:52.240 --> 0:21:54.080
<v Speaker 2>it's not like it fell apart in due diligence. It's

0:21:54.119 --> 0:21:55.640
<v Speaker 2>like it fell apart in weird governance.

0:21:55.880 --> 0:21:59.240
<v Speaker 1>Yeah, weird governance. But Will's Fargo. Then said the analyst

0:21:59.280 --> 0:22:02.760
<v Speaker 1>Stephen K. Hill, Miss Redstone has created a legacy of

0:22:02.840 --> 0:22:07.480
<v Speaker 1>equity value destruction and this should overhang Paramount's valuation. Given

0:22:07.520 --> 0:22:11.720
<v Speaker 1>her unpredictability, this will add to the long shadow over

0:22:11.760 --> 0:22:14.600
<v Speaker 1>Paramount as yet another misstep. The last six months have

0:22:14.640 --> 0:22:17.400
<v Speaker 1>seen governance weekend, the CEO fired in favor of management

0:22:17.440 --> 0:22:21.119
<v Speaker 1>by committee, likely internal disruption to rank and file morale,

0:22:21.440 --> 0:22:24.320
<v Speaker 1>massive golden parachutes, and probably a lot of deal related

0:22:24.359 --> 0:22:28.120
<v Speaker 1>expensive So Stephen Cahill from Wells Fargo not holding back.

0:22:28.480 --> 0:22:32.800
<v Speaker 2>A lot of companies in recent years have gone public

0:22:33.240 --> 0:22:37.399
<v Speaker 2>with supervoting stock, and there's always this rationale of like,

0:22:38.119 --> 0:22:42.560
<v Speaker 2>there's this brilliant visionary founder who runs the company for

0:22:43.080 --> 0:22:45.879
<v Speaker 2>a sort of like long term social purpose and has

0:22:45.960 --> 0:22:48.040
<v Speaker 2>not just beholden to the whims of the short term

0:22:48.080 --> 0:22:51.320
<v Speaker 2>equity markets, and we want to preserve that, and so

0:22:52.000 --> 0:22:55.760
<v Speaker 2>the founder shares need to have supervoting rights, and that's

0:22:56.040 --> 0:22:59.080
<v Speaker 2>really better governance and better like value creation for the

0:22:59.119 --> 0:23:02.000
<v Speaker 2>long term for public shaolders then letting every share have

0:23:02.040 --> 0:23:04.720
<v Speaker 2>one vote. And like this is the sort of degenerate

0:23:04.760 --> 0:23:07.119
<v Speaker 2>final case of that, right, Like this is a person

0:23:07.119 --> 0:23:09.959
<v Speaker 2>who's not this visionary, but who just inherited the shares

0:23:09.960 --> 0:23:12.119
<v Speaker 2>from the from like the visionary put the company together,

0:23:12.680 --> 0:23:16.399
<v Speaker 2>and she doesn't own forty percent of the company shows

0:23:16.440 --> 0:23:19.119
<v Speaker 2>five percent of the economics, and her incentives are just

0:23:19.200 --> 0:23:22.560
<v Speaker 2>very different from those of other shareholders, and she seems

0:23:22.600 --> 0:23:25.080
<v Speaker 2>to be making choices that are not great for other shareolders.

0:23:25.119 --> 0:23:27.480
<v Speaker 2>And it's just hard for anyone to kind of come

0:23:27.520 --> 0:23:42.160
<v Speaker 2>in and fix it because she controls all the votes.

0:23:46.119 --> 0:23:47.280
<v Speaker 3>Do you want to talk about some later?

0:23:47.320 --> 0:23:49.159
<v Speaker 2>Fare well Spargo, man, This was.

0:23:49.160 --> 0:23:53.400
<v Speaker 1>An incredible scoot by a Bloomberg News's handle of it.

0:23:53.400 --> 0:23:55.280
<v Speaker 2>It's so good. It's so good.

0:23:55.480 --> 0:24:00.199
<v Speaker 1>Wells Fargo fires over a dozen for quote simulation of

0:24:00.320 --> 0:24:01.560
<v Speaker 1>keyboard activity.

0:24:01.600 --> 0:24:03.840
<v Speaker 2>Matt, I assume they were working from home. Well, it's

0:24:03.880 --> 0:24:05.960
<v Speaker 2>untirely clear, like she reported this space on like a

0:24:06.040 --> 0:24:08.560
<v Speaker 2>FINRA filing that Wells Fargo did. What it sounds like

0:24:08.720 --> 0:24:11.240
<v Speaker 2>is that they were working from home. And so these

0:24:11.240 --> 0:24:13.879
<v Speaker 2>are like people in wealth management and investment management. They

0:24:13.880 --> 0:24:16.480
<v Speaker 2>were working from home, and Wells Fargo was monitoring them

0:24:16.640 --> 0:24:18.720
<v Speaker 2>and making sure that they weren't just like going to

0:24:18.760 --> 0:24:21.600
<v Speaker 2>the pool all day by installing some sort of tracking

0:24:21.640 --> 0:24:23.560
<v Speaker 2>software in their computer that made sure that they were

0:24:23.560 --> 0:24:25.920
<v Speaker 2>like typing at least once every five minutes, or moving

0:24:25.960 --> 0:24:30.240
<v Speaker 2>their mouse or whatever. And these people acquired devices apparently

0:24:30.280 --> 0:24:33.520
<v Speaker 2>called mouse jigglers. I picture like the you know, like

0:24:33.560 --> 0:24:35.520
<v Speaker 2>the bird with water in it that like bobs up

0:24:35.560 --> 0:24:36.000
<v Speaker 2>and down and.

0:24:35.960 --> 0:24:37.760
<v Speaker 1>Pecks the keys like the Homer Simpson.

0:24:37.880 --> 0:24:40.719
<v Speaker 2>Yeah, the Homer Simpson bird, exactly right. And so like

0:24:41.160 --> 0:24:44.400
<v Speaker 2>someone is hitting a key every four minutes so that

0:24:44.680 --> 0:24:47.120
<v Speaker 2>the system keeps them lied on while they go off

0:24:47.160 --> 0:24:50.639
<v Speaker 2>and run errands or whatever. And Wills Fargo somehow found

0:24:50.680 --> 0:24:54.159
<v Speaker 2>out and fired them all saying we don't, you know,

0:24:54.240 --> 0:24:55.720
<v Speaker 2>accept any unethical behavior.

0:24:56.040 --> 0:24:57.600
<v Speaker 3>Yeah, I mean, it's just amazing.

0:24:57.680 --> 0:25:01.960
<v Speaker 1>Reading directly from the filing, apparently the staffers, all of

0:25:02.000 --> 0:25:04.840
<v Speaker 1>whom are in the firm's wealth and Investment management unit,

0:25:04.880 --> 0:25:08.399
<v Speaker 1>were quote discharged after review of allegations involving simulation of

0:25:08.440 --> 0:25:13.320
<v Speaker 1>keyboard activity creating impression of active work. My first reaction was,

0:25:13.359 --> 0:25:15.000
<v Speaker 1>if we're talking about wealth managers, I feel like they

0:25:15.040 --> 0:25:18.520
<v Speaker 1>should be alcolfing anyway. And then also, the term mouse

0:25:18.560 --> 0:25:21.399
<v Speaker 1>jiggler really sounds like an insult, but it is a

0:25:21.440 --> 0:25:24.000
<v Speaker 1>real device and you can buy it for twenty dollars

0:25:24.080 --> 0:25:24.720
<v Speaker 1>from Amazon.

0:25:25.080 --> 0:25:27.399
<v Speaker 2>Yeah, I agree with you that. Like, so one, if

0:25:27.400 --> 0:25:29.560
<v Speaker 2>they're wealth managers, they should be out on the golf course,

0:25:30.040 --> 0:25:33.639
<v Speaker 2>not at the keyboard. But two, like just in general,

0:25:33.840 --> 0:25:35.760
<v Speaker 2>making sure that you're typing all the time is like

0:25:35.800 --> 0:25:39.800
<v Speaker 2>the worst way to measure productivity and contributions of like

0:25:39.840 --> 0:25:43.280
<v Speaker 2>a financial professional. Right. It's like that can't be what

0:25:43.320 --> 0:25:45.560
<v Speaker 2>the job is about. Right. The job can't be like

0:25:45.600 --> 0:25:47.440
<v Speaker 2>how many keys do you hit in a minute? Right?

0:25:47.520 --> 0:25:49.760
<v Speaker 2>There has to be some other form of value add there,

0:25:50.119 --> 0:25:54.040
<v Speaker 2>and Wellsvarrio is measuring like the sort of like lowest

0:25:54.040 --> 0:25:55.720
<v Speaker 2>thing that could measure, which is just are you hitting

0:25:55.760 --> 0:25:58.360
<v Speaker 2>the keys? I mean, what I find most amazing about

0:25:58.440 --> 0:26:01.840
<v Speaker 2>this whole situation is that like Wells Fargo has been

0:26:01.880 --> 0:26:05.879
<v Speaker 2>here before in like much more egregious ways, which is

0:26:05.920 --> 0:26:08.400
<v Speaker 2>that they had like a famous scandal in twenty sixteen

0:26:08.800 --> 0:26:11.679
<v Speaker 2>where they set up millions of fake accounts because like

0:26:11.760 --> 0:26:15.960
<v Speaker 2>they had all the like branch employees were basically held

0:26:15.960 --> 0:26:17.960
<v Speaker 2>to a standard of like that to open like eight

0:26:18.200 --> 0:26:20.320
<v Speaker 2>different products today, Right, So if you came in to

0:26:20.320 --> 0:26:22.800
<v Speaker 2>open a check on account, they'd be like, hey, do

0:26:22.840 --> 0:26:24.720
<v Speaker 2>you want to add online checking? Do you want to

0:26:24.720 --> 0:26:27.080
<v Speaker 2>add a credit card? Do you want to add a mortgage?

0:26:27.119 --> 0:26:28.800
<v Speaker 2>Do you want to add a saving Because you know,

0:26:28.880 --> 0:26:31.360
<v Speaker 2>if they wanted to open eight different products every day,

0:26:31.840 --> 0:26:35.560
<v Speaker 2>and so a lot of people realizing how hard that was. Instead,

0:26:35.560 --> 0:26:38.480
<v Speaker 2>we're just doing it like illicitly. By they'd open a

0:26:38.560 --> 0:26:40.440
<v Speaker 2>checking out for someone and just slipped them a credit

0:26:40.440 --> 0:26:43.320
<v Speaker 2>card without them knowing about it, And I love that.

0:26:43.359 --> 0:26:46.240
<v Speaker 2>It's like eight years later, Wells Fargo still seems to

0:26:46.280 --> 0:26:49.120
<v Speaker 2>have this culture of like one using these very crude

0:26:49.200 --> 0:26:51.960
<v Speaker 2>metrics to manage its employees' performance, and two having the

0:26:51.960 --> 0:26:54.000
<v Speaker 2>employees like game them in egregious ways.

0:26:54.119 --> 0:26:55.520
<v Speaker 3>Yeah, it's pretty painful.

0:26:55.600 --> 0:26:57.920
<v Speaker 1>I mean you think about specifically the wealth management unit,

0:26:57.920 --> 0:27:00.760
<v Speaker 1>and this has been a focus for the bank, trying

0:27:00.760 --> 0:27:02.840
<v Speaker 1>to beef up their wealth management is it feels like

0:27:02.840 --> 0:27:05.399
<v Speaker 1>a lot of the big banks are and this probably

0:27:05.400 --> 0:27:07.600
<v Speaker 1>doesn't hurt them, but it is just embarrassing and it

0:27:07.600 --> 0:27:12.160
<v Speaker 1>feels like they haven't quite recovered from that twenty sixteen episode.

0:27:12.320 --> 0:27:14.879
<v Speaker 2>People talk about like bank culture, and it really like

0:27:14.960 --> 0:27:17.119
<v Speaker 2>all of these stories paying such a bad picture of

0:27:17.359 --> 0:27:21.160
<v Speaker 2>Wells Fargo's culture. There's another story a few years ago

0:27:21.880 --> 0:27:25.240
<v Speaker 2>where Wells fire fired a bunch of investment bankers for

0:27:25.760 --> 0:27:29.520
<v Speaker 2>expensing seamless too early. Yeah, you know, like you could

0:27:29.600 --> 0:27:31.560
<v Speaker 2>order dinner if you stay past eight or whatever, and

0:27:31.600 --> 0:27:33.560
<v Speaker 2>people were ordering dinner at like six point fifteen and

0:27:33.600 --> 0:27:36.480
<v Speaker 2>then like altering the receipts so that it looked like

0:27:36.520 --> 0:27:37.280
<v Speaker 2>they stayed later.

0:27:37.600 --> 0:27:38.640
<v Speaker 3>It's like, that's pretty bad.

0:27:38.680 --> 0:27:40.840
<v Speaker 2>All of this stuff. It's like the most petty micro

0:27:40.960 --> 0:27:44.639
<v Speaker 2>management of their people and the most like cynical gaming

0:27:44.680 --> 0:27:45.680
<v Speaker 2>of that micro management.

0:27:45.920 --> 0:27:48.719
<v Speaker 1>Yeah, I feel in some ways like a naive, innocent

0:27:48.800 --> 0:27:51.000
<v Speaker 1>person because I hear that and I'm like, oh my god,

0:27:51.040 --> 0:27:52.720
<v Speaker 1>you can get fired for that, And I think about

0:27:52.720 --> 0:27:54.919
<v Speaker 1>my own life. I get a card to the office

0:27:54.960 --> 0:27:57.280
<v Speaker 1>because I get in at six am, but sometimes I

0:27:57.320 --> 0:28:00.280
<v Speaker 1>get in at six oh six am and not six am,

0:28:00.560 --> 0:28:02.199
<v Speaker 1>and I wonder if I'm going to get fired for

0:28:02.240 --> 0:28:05.119
<v Speaker 1>expensing my uber But altering your receipts is a different

0:28:05.200 --> 0:28:07.040
<v Speaker 1>level that I wouldn't do.

0:28:07.640 --> 0:28:09.520
<v Speaker 2>Right, Like, the thing is, you're not going to get

0:28:09.560 --> 0:28:13.520
<v Speaker 2>fired because like, well I shouldn't say that, Like.

0:28:13.600 --> 0:28:15.399
<v Speaker 3>No, say it. Put it in the record.

0:28:15.800 --> 0:28:21.400
<v Speaker 2>Both you and our employer take more intelligent, long term

0:28:21.480 --> 0:28:24.320
<v Speaker 2>view of what's going on, and like everyone understands that

0:28:24.359 --> 0:28:27.320
<v Speaker 2>you're acting in good faith and that the program exists

0:28:27.480 --> 0:28:30.880
<v Speaker 2>to encourage you to do the good work that you do. Right,

0:28:31.160 --> 0:28:33.480
<v Speaker 2>And then there's the other thing where it's like nickel

0:28:33.480 --> 0:28:36.000
<v Speaker 2>and diming people and like everyone is kind of doing

0:28:36.000 --> 0:28:38.760
<v Speaker 2>the minimum and like trying to check the boxes. Yeah,

0:28:38.800 --> 0:28:40.200
<v Speaker 2>that leads to bad outcomes.

0:28:40.320 --> 0:28:43.239
<v Speaker 1>Well, speaking of things that made me nervous, I was

0:28:43.760 --> 0:28:46.480
<v Speaker 1>searching on Amazon for some of these mouse jigglers on

0:28:46.520 --> 0:28:50.520
<v Speaker 1>my work desk stot and let me let me say

0:28:50.680 --> 0:28:53.440
<v Speaker 1>for the company right now. It was for research for

0:28:53.760 --> 0:28:57.719
<v Speaker 1>this podcast specifically, but I found one cost twenty two

0:28:57.760 --> 0:29:00.240
<v Speaker 1>dollars and ninety nine cents. That price is actually down

0:29:00.360 --> 0:29:04.160
<v Speaker 1>twenty three percent, but more than a thousand of them

0:29:04.160 --> 0:29:06.560
<v Speaker 1>have been bought in the last month, at least according

0:29:06.560 --> 0:29:10.280
<v Speaker 1>to Amazon bills, itself is undetectable. And again, being an

0:29:10.400 --> 0:29:12.400
<v Speaker 1>innocent person, I thought that not a lot of people

0:29:12.400 --> 0:29:14.800
<v Speaker 1>did this, But just looking at how frequently people are

0:29:14.840 --> 0:29:18.000
<v Speaker 1>buying mouse jigglers on Amazon, apparently it's still hot. People

0:29:18.040 --> 0:29:18.800
<v Speaker 1>are still doing this.

0:29:19.440 --> 0:29:21.800
<v Speaker 2>I am very interested in the cat and mouse game,

0:29:21.920 --> 0:29:24.760
<v Speaker 2>no pun intended, uh oo, how people are catching these

0:29:24.840 --> 0:29:28.360
<v Speaker 2>uncatchable mass jigglers right, Like someone is like building the

0:29:28.400 --> 0:29:33.280
<v Speaker 2>algorithms that like detect suspiciously regular mass jigling and like

0:29:33.320 --> 0:29:34.440
<v Speaker 2>report it to HR.

0:29:34.680 --> 0:29:37.320
<v Speaker 1>Or do you know, well to that point, can I

0:29:37.320 --> 0:29:39.160
<v Speaker 1>read you some of the reviews? I thought these were

0:29:39.200 --> 0:29:42.200
<v Speaker 1>really illuminating. Oh yeah, this is a five star review

0:29:42.200 --> 0:29:45.640
<v Speaker 1>from June one so recently. They said that it was

0:29:45.680 --> 0:29:48.800
<v Speaker 1>a great little device. But if you're being monitored by

0:29:48.840 --> 0:29:51.760
<v Speaker 1>your employer, it only moves back and forth. So if

0:29:51.800 --> 0:29:54.040
<v Speaker 1>they can see your screen and you want to use

0:29:54.080 --> 0:29:56.160
<v Speaker 1>this to be able to walk away, I would be careful.

0:29:56.240 --> 0:29:58.560
<v Speaker 1>They would clearly be able to see you're not there.

0:29:59.120 --> 0:30:02.120
<v Speaker 1>And then here's a four star review from March. This

0:30:02.160 --> 0:30:04.560
<v Speaker 1>person wrote, at least with my mouse, it moves the

0:30:04.600 --> 0:30:07.560
<v Speaker 1>cursor all the way across the screen. So if you're

0:30:07.600 --> 0:30:11.040
<v Speaker 1>being monitored by management, this would not look at all natural.

0:30:11.200 --> 0:30:14.120
<v Speaker 1>These are all Wells Fargo employees, by the way, just kidding,

0:30:14.200 --> 0:30:14.480
<v Speaker 1>that's a.

0:30:14.520 --> 0:30:16.640
<v Speaker 2>Joke, right. I sort of assumed that there was some

0:30:16.680 --> 0:30:19.120
<v Speaker 2>sort of like algorithmic tracking of like there's some like

0:30:19.160 --> 0:30:21.680
<v Speaker 2>a computer system make sure that you're typing every at least,

0:30:21.800 --> 0:30:23.600
<v Speaker 2>you know, every once in a while. But like the

0:30:23.640 --> 0:30:25.640
<v Speaker 2>idea that the managers just have like a screen up

0:30:25.680 --> 0:30:28.560
<v Speaker 2>with like six of their employees' screens and they just

0:30:28.720 --> 0:30:30.600
<v Speaker 2>watch it all day to make sure that workers are

0:30:30.640 --> 0:30:33.440
<v Speaker 2>working is like even more dystopian than what I thought.

0:30:33.560 --> 0:30:36.640
<v Speaker 2>Like that's really grim, Like what why ken't the manager

0:30:36.680 --> 0:30:39.560
<v Speaker 2>do some work instead of just monitoring their employees screens.

0:30:39.640 --> 0:30:42.360
<v Speaker 1>Maybe that's someone's whole job, you know, in this bright

0:30:42.360 --> 0:30:45.160
<v Speaker 1>new world that we live in. You're the vice president

0:30:45.320 --> 0:30:48.040
<v Speaker 1>of screen monitoring at.

0:30:47.880 --> 0:30:49.680
<v Speaker 2>Wellston right, and then like you get like a big

0:30:49.720 --> 0:30:52.560
<v Speaker 2>win when you fired twelve people for installing mat streets.

0:30:52.560 --> 0:30:55.480
<v Speaker 2>You're like, look, I've added so much value as the

0:30:55.520 --> 0:30:58.560
<v Speaker 2>screen monitoring vice president because I've caught the people who

0:30:58.640 --> 0:31:02.160
<v Speaker 2>were just master vision instead of really moving their mass.

0:31:02.640 --> 0:31:06.920
<v Speaker 1>I wonder if that works from home? Do you need

0:31:06.960 --> 0:31:08.160
<v Speaker 1>to be in the office to do that.

0:31:08.920 --> 0:31:14.000
<v Speaker 2>We're going to command center of like eight screens. And

0:31:14.080 --> 0:31:15.480
<v Speaker 2>that was the Money Stuff Podcast.

0:31:15.760 --> 0:31:17.920
<v Speaker 3>I'm Matt Levian and I'm Katie Greifeld.

0:31:18.160 --> 0:31:20.160
<v Speaker 2>You can find my work by subscribing to the Money

0:31:20.200 --> 0:31:22.640
<v Speaker 2>Stuff newsletter on Bloomberg dot com.

0:31:22.640 --> 0:31:25.120
<v Speaker 1>And you can find me on Bloomberg TV every day

0:31:25.160 --> 0:31:27.040
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0:31:40.000 --> 0:31:42.720
<v Speaker 2>The Money Stuff Podcast is produced by Anna Maserakis and

0:31:42.800 --> 0:31:43.560
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0:31:44.120 --> 0:31:46.320
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0:31:46.520 --> 0:31:48.880
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0:31:48.400 --> 0:31:51.200
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0:31:50.760 --> 0:31:51.600
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0:31:51.760 --> 0:31:53.960
<v Speaker 2>Thanks for listening to The Money Stuff Podcast. We'll be

0:31:54.000 --> 0:31:55.600
<v Speaker 2>back next week with more stuff.

0:32:00.080 --> 0:32:01.280
<v Speaker 4>The Pal