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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Hello and welcome to

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Speaker 1: The Money Stuff Podcast. You're a weekly podcast where we

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Speaker 1: talk about stuff related to money. I'm Matt Levian and

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Speaker 1: I write the Money Stuff column for Bloomberg Opinion.

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Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and

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Speaker 2: an anchor for Bloomberg Television.

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Speaker 1: That's Today. It was an all tariffs episode of The

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Speaker 1: Money suff.

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Speaker 2: I actually would be the most prepared out in any

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Speaker 2: episode that we've ever done.

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Speaker 1: We're talking about tariffs, non fought for forty eight hours.

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Speaker 2: I was actually at my Grandmam's apartment last night, or

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Speaker 2: I guess in the afternoon.

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Speaker 1: Talking about taffs.

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Speaker 2: Well, I was with my dad, and my dad and

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Speaker 2: I both were like, can we turn on the TV?

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Speaker 2: My grandma was like sure, yeah, so we watched it

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Speaker 2: with her. No, yeah, the Rose Garden. Anyway, we're not

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Speaker 2: talking about tariffs. We are talking about a conservative leaning

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Speaker 2: news network.

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Speaker 1: That in public conservative leading. Yeah.

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Speaker 2: Yeah, I don't know what news Max does. I probably should.

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Speaker 1: They're a television channel that I know.

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Speaker 2: I've never watched them.

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Speaker 1: They've take out the vast territory to the far right

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Speaker 1: of Fox News is.

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Speaker 2: My understanding of it, them, you know, and their IPO.

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Speaker 2: At one point they had a market value of over

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Speaker 2: thirty billion dollars, which had them more valuable than Fox

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Speaker 2: for a brief moments of time. The stock has since

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Speaker 2: started to come back to earth.

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Speaker 1: I don't pretend to understand this anymore. Yeah, the meme thing,

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Speaker 1: like the meme ipo thing. I think of this in

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Speaker 1: comparison to Trumpet Media and technology grew up the other

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Speaker 1: let's say, right wing media network. Maybe that also has

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Speaker 1: a very high valuation relative to its fairly low revenue

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Speaker 1: and net loss, and trump Media is owned by people

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Speaker 1: who are like, yeah, great, but like News is probably

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Speaker 1: owned by Thomas Pettif, who, in addition to being a

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Speaker 1: billionaire Republican downer, is also like a trader, you know,

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Speaker 1: Like he's the founder of Attractor Breakers, So like the ft.

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Speaker 1: You got him on the phone and he was like,

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Speaker 1: he said, he was stunned by the price. I think

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Speaker 1: newsbacks is a great company, and it's going to have

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Speaker 1: a very bread feature, but I think that it does

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Speaker 1: not warrant this high price. It was just like, you know,

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Speaker 1: in addition to being a real billionaire, he's like a

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Speaker 1: billion dollars worth of Newsmax stock.

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Speaker 2: Yeah, he owns the second largest steak. It was at

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Speaker 2: one point worth at least five point four billion dollars.

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Speaker 2: I wonder if he's sold.

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Speaker 1: I think he's locked up. Really, I think like to

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Speaker 1: ask him, like, are you going to sell? And you

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Speaker 1: know I can change before the long most big sharelders

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Speaker 1: are locked up in IPOs like that. And it's funny,

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Speaker 1: like for the same reason that the thigh prices, some

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Speaker 1: of the commentary that you'll read from enthusiasts is not

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Speaker 1: always well informed. And I read someone being like, what

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Speaker 1: will Newsmacks do with all of this capital while they

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Speaker 1: use it to become the next big media, Like they're

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Speaker 1: not getting any capital. It's just like the stock is

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Speaker 1: trading in the secondary market. You know, there's like a

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Speaker 1: real move among meme stocks that if your stock is meaning,

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Speaker 1: you should get off at the market stock offering so

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Speaker 1: you can raise money from the people who are buying

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Speaker 1: your stock in the secondary market and pushing out the price.

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Speaker 1: But you can't do that a week after your IPO

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Speaker 1: R three days after your ip Newsmax is not selling

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Speaker 1: any stock. I mean they sold stock at ten dollars

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Speaker 1: before the run in the stock. But they're not making

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Speaker 1: any money from this. This is just secondary training.

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Speaker 2: They're not making money in general. They lost seventy two

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Speaker 2: million dollars.

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Speaker 1: These are separate things. If you're a meme stock, you

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Speaker 1: don't make money in your business. Do you make money

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Speaker 1: selling stock? But they're not even doing that.

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Speaker 2: I'm old fashioned, mad, I like to go back to

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Speaker 2: the That's true. I guess it's hard to predict what

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Speaker 2: will become a meme stock. I would not have guessed

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Speaker 2: that Newsmax was a candidate.

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Speaker 1: No, not really really.

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Speaker 2: Apparently, Chris Ruddy, though the CEO, was going on like

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Speaker 2: cable news and pitching the IPO, which I didn't know.

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Speaker 2: Had I known that, maybe I.

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Speaker 1: Would to a TV channel.

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Speaker 2: Yeah, that's true, but he was going on others, not

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Speaker 2: Bloomberg News. To the best of my knowledge. On the podcast,

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Speaker 2: I that's true, Chris Heiretti, if you're listening, I want

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Speaker 2: to talk a little bit about the mechanics of this IPO.

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Speaker 2: I was chatting with Bailey Lipschultz Bloomberg News about this.

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Speaker 2: He's my go to guy. Yeah, on funky things. He

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Speaker 2: also covers IPOs, which is a really poetic intersection. So

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Speaker 2: this was a regulation A plus it's a mini ipo.

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Speaker 1: Okay, mini ipo?

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Speaker 2: Yeah yeah, I didn't know that. And the reason I

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Speaker 2: found out is because I have another Matt in my

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Speaker 2: professional life. His name is Matt Miller, and he was like, wow,

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Speaker 2: the bank must have really mispriced this. And Billy made

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Speaker 2: the good point that because it's a reggae plus ipo,

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Speaker 2: they can only raise up to seventy five million, So

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Speaker 2: it's not like this was mispriced or anything.

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Speaker 1: I mean, you can solve your shares. Who are the banks?

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Speaker 2: Oh, I'm so excited. Do you ask Digital Offering LLC? Oh? Yeah, yeah,

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Speaker 2: Business Insider. I don't think you've seen this yet. Business Insider,

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Speaker 2: just as we're talking about this on a Thursday, published

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Speaker 2: a story titled Meet the tiny investment bank behind Newsmax's

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Speaker 2: rip roaring stock debut. Laguna Beach, California based Digital Offering

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Speaker 2: LLC was the bank behind this. Can I tell you

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Speaker 2: more facts about them?

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Speaker 1: I want to hear all of the facts about them.

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Speaker 2: I'll tell you at least three. They have ten full

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Speaker 2: time registered banker, three of whom act as principal investment bankers.

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Speaker 2: They typically advise companies valued at a billion dollars or less.

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Speaker 2: Those are actually all the facts I have. But I

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Speaker 2: have a quote from Mark Alenowitz. I hope I'm saying

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Speaker 2: his name correctly. He's a managing director there. He said,

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Speaker 2: the Newsmax, as you might predict, has been huge for them.

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Speaker 2: The small cap community knows who we are, but the

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Speaker 2: rest of Wall Street didn't. But now they're on the map.

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Speaker 1: So I'm still highly open the idea that the bank's

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Speaker 1: miss priced today because like I used to be an

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Speaker 1: equity capital markets banker, I think of like, well you

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Speaker 1: do an IPO is you go out to institutional accounts

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Speaker 1: and you build a book of institutional accounts and you

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Speaker 1: put some stuff with retail. But you go to an

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Speaker 1: institution and you're like, well we lost seventy million dollars

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Speaker 1: one hundred seventy million over revenue. There's some cap to

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Speaker 1: the valuation you're going to get, right, And if you

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Speaker 1: trade on the secondary market to retail, there is not

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Speaker 1: that cap or any cap right, Like you can be

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Speaker 1: a thirty billion dollar company for briefly if you have

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Speaker 1: those kind of numbers. And so if you go to

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Speaker 1: institutional investors and say this is going to be a

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Speaker 1: memes talks that are prising it at two hundred dollars,

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Speaker 1: they will laugh at you. By the way, I don't

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Speaker 1: want to say black Ben tried that, but like.

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Speaker 2: A little bit, a little bit friend of the show.

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Speaker 1: Front of the show, Black they did it. But I

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Speaker 1: don't think that's the case here because the Reggae plus

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Speaker 1: offering done by a small bank might have been you know,

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Speaker 1: it was for the small cap community. It's not like

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Speaker 1: they're selling this to fidelity necessarily. Yeah, so maybe they

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Speaker 1: did misprice it as a meme matter. I don't know.

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Speaker 2: I don't know. Well, it'll be interesting to see their

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Speaker 2: follow up to the newsmac's debut digital offering LLC.

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Speaker 1: It does feel like a real golden age for like

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Speaker 1: a certain sort of like banker who is happy to

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Speaker 1: work with memestock companies. Right, stuff going on? Does it

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Speaker 1: going on that, like, you know, not necessarily everything wants

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Speaker 1: to be doing.

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Speaker 2: I don't know, I feel like the golden age might

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Speaker 2: have been twenty twenty one, like these are like the

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Speaker 2: kind of thing or yeah, obviously you're still having some

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Speaker 2: memes stock IPOs, but there's just not a lot of

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Speaker 2: IPOs and I don't know.

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Speaker 1: A lot of that's right, looking at a relative golden

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Speaker 1: age for the yeah memes stock bankers compared to the

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Speaker 1: you know, large cap it's true tech bankers.

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Speaker 2: Everyone else could talk about circle you know what to

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Speaker 2: also in IPOs, this one hasn't happened yet, but it's

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Speaker 2: going to theoretically circle of stable coin fame has filed

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Speaker 2: for an IPO.

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Speaker 1: Yeah, they filed like a long time ago, but their

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Speaker 1: filing became public this day. They filed like under yeah,

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Speaker 1: another special IPO rule, which is you can file confidentially,

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Speaker 1: but now they're unconfidential, so you can read their filings.

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Speaker 2: Got some numbers. One hundred and fifty six million dollars,

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Speaker 2: that's their net in. That's on revenue of one point

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Speaker 2: six eight billion dollars in twenty twenty four. My only

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Speaker 2: simple question for you is how does the stable coin

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Speaker 2: make money? Is that just because they're backed.

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Speaker 1: By how they're making Yeah, that's it. So oh yeah,

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Speaker 1: it's the best business in the world. And it's actually like,

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Speaker 1: it was surprising to me that their margins are so low,

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Speaker 1: and it's it's a little interesting why their margins aren't

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Speaker 1: one hundred percent. Yeah, but no they make money by

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Speaker 1: like they take tens of billions of dollars of deposits

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Speaker 1: from customers. You know, I read about this. They don't

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Speaker 1: directly put it in T bills because I think my

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Speaker 1: explanation would be like that is too much of like

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Speaker 1: a banking function or a financial services function, and they're

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Speaker 1: like a fintech. So what they do is they take

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Speaker 1: all the money and they put it in a black

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Speaker 1: Rock money market fund that puts it in T bills.

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Speaker 2: That's amazing.

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Speaker 1: Effectively, they put it in T bills and they pay

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Speaker 1: black Rock to be a sort of like adults custodian

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Speaker 1: in their T bills. Yeah, they put someone in bank accounts,

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Speaker 1: but it's like eighty five percent T bills. They say

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Speaker 1: they make a discount to sover, but they kind of

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Speaker 1: make T bill rits and then they pay as a

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Speaker 1: first cut zero percent interest to their customers. Now it's

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Speaker 1: like quite right, it's basically right. So they're making you know,

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Speaker 1: four percent or so on tens of billions of dollars,

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Speaker 1: and that might be a slight exaggeration, but it's like,

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Speaker 1: you know, they're making a lot of money, and then

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Speaker 1: where does it go? I mean some of it is

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Speaker 1: like they have expenses because they are a tech company.

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Speaker 1: They're building for sure, technological infrastructure to transfer stable coins

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Speaker 1: on the blockchain, et cetera, outside et cetera. Another big

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Speaker 1: part of it is like everyone knows this is a

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Speaker 1: good business model. It's not quite it's quite a business

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Speaker 1: a winner take all business model, but it's a little

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Speaker 1: bit like you want to be the most liquid stable coin,

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Speaker 1: and so they are paying platforms to be like a

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Speaker 1: preferred stable coin, so like they're the stable coin of coinbase,

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Speaker 1: and like there's a partnership with coinbase, and if their

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Speaker 1: coins are held on coin Base, like they're paying Coinbase

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Speaker 1: a lot of the interest. Right, They're paying fees to

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Speaker 1: buyance to be on binance, So there's some amount of like,

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Speaker 1: you know, this is a good business, and so the

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Speaker 1: customer acquisition cost is kind of they're paying something.

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Speaker 2: But it feels like it's only a good business when

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Speaker 2: rates are high.

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Speaker 1: So, right, it's such an interesting business because it's stumbled

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Speaker 1: into being a good business. It started. The stable coin

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Speaker 1: business started when rates were low, and everyone was like, well,

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Speaker 1: it's fine if we don't get paid interest, because it

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Speaker 1: was interested. You know, you don't get interest on our

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Speaker 1: savings accounts, on our money market account. So it's fine. Yeah,

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Speaker 1: And now the rates are high and you do get

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Speaker 1: interest on your money market account, and the stablegin issuers

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Speaker 1: are raking in money, and there are reasons that you

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Speaker 1: can't just easily natively get that interest on your stable coin. Yeah.

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Speaker 1: Think one reason is, like you know, that's like historically

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Speaker 1: not how it developed, and like you know, the biggest

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Speaker 1: stablekind issuers have ever liquidity advantage and they don't want

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Speaker 1: to pay interest. But another reason is, like there's securities,

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Speaker 1: a lot problems with doing it. If you were paying

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Speaker 1: interest on a stable clin it's not in like the

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Speaker 1: sort of crypto e gray area where it's probably fine.

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Speaker 1: It's a money market fund and it's security. And I

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Speaker 1: mean this is at least the sec theory as of

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Speaker 1: four months ago. And one thing that I have written

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Speaker 1: for a long time is that clearly people are going

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Speaker 1: to just start issuing interest sparing stable coins that are

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Speaker 1: you know, registered money market funds that trade on a blockchain.

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Speaker 1: And if you look at the Circle IPO documents, like

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Speaker 1: they talk about that, like they have an issuer that

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Speaker 1: does that that has like a small money market fund

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Speaker 1: and they are doing essentially an intersparing stable coin that

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Speaker 1: you can convert into like their regular coin. And they

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Speaker 1: kind of hint and I'm sure that there will be

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Speaker 1: more of that and like ultimately some of this, like

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Speaker 1: free money, will be returned to customers.

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Speaker 2: Why am I thinking of black Rock and Securitized don't

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Speaker 2: they have something everyone has?

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Speaker 1: Yeah, has a tokenized market fund circle I think owns

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Speaker 1: a company that does it in addition to like having

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Speaker 1: their stablegoin money out of black Rock fund. Yeah, everyone's

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Speaker 1: doing it. Franklin Templeton did it, like in twenty nineteen.

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Speaker 1: I watched their Recognize one remember that, Yeah, And I

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Speaker 1: was like, why is it not called the Benjamin And

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Speaker 1: no one had a good answer.

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Speaker 2: I am excited to see how this is received when

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Speaker 2: it eventually does become public, because I know, you know,

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Speaker 2: you think about all the other like crypto equities. I

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Speaker 2: imagine this is going to trade similarly to the price

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Speaker 2: of bitcoin, even though maybe it shouldn't if it's I mean,

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Speaker 2: it's really just a money market fund with a lot

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Speaker 2: of I mean, like you know, as a first cut.

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Speaker 1: Their business is kind of like what is the market

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Speaker 1: cap of like their coins outstanding and like the market

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Speaker 1: cap of stable coins outstanding does have a lot to

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Speaker 1: do with like demand for crypto.

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Speaker 2: Yeah, that's true. It's not as direct though, as like

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Speaker 2: no micro strategy owns a ton of points, so it's

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Speaker 2: not exactly a proxy. It's obviously not.

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Speaker 1: A pricy for bitcoin. I always think about like Golden

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Speaker 1: used to say that, like their business is at on

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Speaker 1: global GDP, and like the stable grend business is a

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Speaker 1: bet on like crypto GDP. Right, like if if crypto

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Speaker 1: is booming, like there will be more demand for stable

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Speaker 1: clins Now they're separately like a competitive dynamic and table

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Speaker 1: coins where like they might lose out to other stable coins.

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Speaker 1: And there's like the business model of like we get

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Speaker 1: interest and don't pay. Interest might be compressed and they

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Speaker 1: might have to pay more interest, like you know probably

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Speaker 1: speaking like the more crypto there is, the more people

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Speaker 1: will want their stable colin.

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Speaker 2: I wonder like what the pitch to buy circle shares is,

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Speaker 2: especially if we have billions.

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Speaker 1: Of dollars we get paid interest.

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Speaker 2: That we don't pay, interest rates go down, Like what's

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Speaker 2: the point.

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Speaker 1: The pitch is? Like we are building the future of

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Speaker 1: financial infrastructure, Like there's like the real upside case is

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Speaker 1: like five years, the way that you normally pay for

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Speaker 1: stuff will be with a regulated US stable clin instead

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Speaker 1: of venmo or credit cards or checks or whatever. You

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Speaker 1: will boop some circle coins to someone, right, Like, that's

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Speaker 1: the upside case.

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Speaker 2: It's kind of coin to think we'll still be here

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Speaker 2: in five years. Yeah, right, man. You know we were

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Speaker 2: talking about right leaning like social media networks boy x X,

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Speaker 2: Twitter x X now part of x a I holdings. Yes, man,

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Speaker 2: so I obviously immediately thought of you on.

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Speaker 1: The chronic layer of Elon Musk's mergers and this technically.

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Speaker 2: Yeah, I thought about texting you, but I was it

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Speaker 2: was done.

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Speaker 1: You spared me, right. I remember saying that it seems like.

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Speaker 2: This though, isn't like that huge of a deal, Like

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Speaker 2: this didn't rock your world as much as some might

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Speaker 2: have expected it to.

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Speaker 1: It's the biggest mn A deal this year. Yeah, and

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Speaker 1: the second biggest, actually maybe the first biggest is Elon

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Speaker 1: Musk's very biggest I mean like from like the Bloomberg table,

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Speaker 1: which counts announced deals including announced hostile deals. And the

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Speaker 1: biggest deal this year is Elon's deal to BioPen Ai,

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Speaker 1: which is not a deal. It's just a bid, and

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Speaker 1: it's not it's not really a bit, it's a piece

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Speaker 1: of warm. It's hard. But the second biggest is this deal,

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Speaker 1: which is a let's say forty five billion dollar acquisition

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Speaker 1: or like a you know, one hundred and twenty five

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Speaker 1: billion dollar total enterprise value of the all stock merger.

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Speaker 1: It's pretty big deal, except it's like, you know, it's

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Speaker 1: two companies he owns, or now one company that owns.

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Speaker 2: I want to talk about valuations a little bit sure,

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Speaker 2: because it kind of feels like the Xai valuation. You

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Speaker 2: could poke a lot of holes in it.

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Speaker 1: So a couple of things. So XAI, the Ai company,

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Speaker 1: bought x the Twitter company, in an all stock deal.

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Speaker 1: So xa I assumed let's say twelve million dollars of

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Speaker 1: Twitter debt, and it paid let's say thirty three billion

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Speaker 1: dollars of stock for x What is thirty three billion

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Speaker 1: dollars worth of stock?

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Speaker 2: Mean?

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Speaker 1: Well, it means if you value Xai at eighty billion dollars,

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Speaker 1: then you give Twitter, you know, thirty three eightieths of that,

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Speaker 1: and that's thirty three billion dollars worth of stock. You

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Speaker 1: don't have to believe eitheraluation. What actually happened was that, like,

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Speaker 1: they merged at a ratio, right, the people who owned

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Speaker 1: Xai got eighty one hundred and thirteen so of the company,

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Speaker 1: and the people who owned Twitter got thirty three hundred

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Speaker 1: and thirteens of the company. And that was the ratio

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Speaker 1: that happened. They could have been worth eighty dollars and

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Speaker 1: thirty three dollars right, or they could have been worth

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Speaker 1: eighty billion dollars and thirty three billion dollars or any

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Speaker 1: other number in that ratio. So you don't have to

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Speaker 1: believe the valuations. And it's interesting, like the last round

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Speaker 1: where Xai raised cash, it was like, I think at

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Speaker 1: a fifty one billion.

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Speaker 2: It was fifty one billion in December. You did point

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Speaker 2: out that in mid February, Bloomberg reported that Xai was

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Speaker 2: canvassing potential investors for a ten billion dollar funding round

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Speaker 2: that would value it at seventy five billion dollars. But

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Speaker 2: I think that happened.

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Speaker 1: X raised money recently at a you know, I've been

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Speaker 1: saying thirty three and forty five thirty three million dollar

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Speaker 1: equity evaluation, forty five billion dollars enterprise eye, Like that

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Speaker 1: was a weird round. And one thing about it is

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Speaker 1: like Elon Musk put in some money, and in hindsight,

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Speaker 1: you could sort of be like, well, they were doing

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Speaker 1: that to like print a trade at that price, so

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Speaker 1: they could justify doing the merger at that price, because

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Speaker 1: like you know, there was like talk of like X

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Speaker 1: being down fifty percent from where he bought it, and

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Speaker 1: I think it's nice for him to close it out

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Speaker 1: at the price that he paid for it. Yeah, but

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Speaker 1: like you know, you don't have to believe any of

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Speaker 1: those valuations because in a rough sense, like what happened

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Speaker 1: here was that Elon Musk owns two companies and he's

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Speaker 1: mushed them into one company. It doesn't matter what the

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Speaker 1: valuation was. Now that's not quite true because there are

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Speaker 1: minority shareolders in both companies, but like they're like along

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Speaker 1: for the ride. They don't they don't get us say

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Speaker 1: that they're not going to complain about the valuations of

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Speaker 1: any of these things.

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Speaker 2: So I mean, are there any anti trust concerns here

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Speaker 2: at all?

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Speaker 1: Like ABC anything I mentioned, Like you know, usually you

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Speaker 1: have some delay between signing and closing because you have

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Speaker 1: to like fill out anti trust forms. But someone pointed

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Speaker 1: out they're both owned by the same guy. Anyway, So

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Speaker 1: there's really no antigie concerns in many respects. The thing

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Speaker 1: to say I had this deal is those companies were

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Speaker 1: already the same company, So it doesn't really matter for antitrust,

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Speaker 1: or for fiduciary duties, or for valuation or for anything

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Speaker 1: else that they're emerging, Right, It's just like, yeah, sure,

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Speaker 1: it's like he's reshuffling the paperwork for his own companies. Yeah.

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Speaker 1: The one thing I'll say is, like why did he

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Speaker 1: merge them? One possible answer is that these are kind

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Speaker 1: of the same business and so like one reason that

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Speaker 1: I think Elon Musk has a bunch of separate companies

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Speaker 1: for all of the different ideas is like you want

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Speaker 1: to have like the companies have some focus and have

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Speaker 1: the employees of these companies have shares or options in

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Speaker 1: like their one companies. They're really motivated to do a

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Speaker 1: good job for that one company. And so like Tesla

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Speaker 1: and SpaceX are doing different things, so like move people

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Speaker 1: between them, but like you want to pay the Tesla

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Speaker 1: people in Tesla options and the SpaceX people and SpaceX options.

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Speaker 1: And I think that like there was a reason to

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Speaker 1: separate x and XAI because like AI was really hot

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Speaker 1: and he wanted to like raise money and like get

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Speaker 1: employees and pressed doing AI. But like increasingly I think

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Speaker 1: that they're the same business, which is that you collect

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Speaker 1: a lot of data like natural language of data and

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Speaker 1: information from the Twitter user corpus, right, and then you

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Speaker 1: feed that into models that are built by AI engineers

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Speaker 1: who work at XAI, and then you produce a large

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Speaker 1: language model you distribute through Twitter, right, Like their model

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Speaker 1: is distributed. It's like a.

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Speaker 2: I know what GROC is is because of Twitter obviously,

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Speaker 2: but that's like that's not weird.

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Speaker 1: Like every AA company is different, like trying to figure

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Speaker 1: out business models, but like a lot of stuff is

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Speaker 1: like there's a consumer distribution right where like open ai

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Speaker 1: among other products, sells access to you know, you could

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Speaker 1: like subscribe and have chat GPT, right and you pay

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Speaker 1: the fee every month to have like the consumer version

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Speaker 1: of Chat GPT and GROC is like that, and like

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Speaker 1: their distribution is through X and so it's increasing and

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Speaker 1: it's like this is the same business. It's like the

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Speaker 1: inputs and like the outputs are through X and like

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Speaker 1: the model in the middle has done through so like

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Speaker 1: everyone should be kind of working for the same goals.

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Speaker 1: And like motivated the same way. So we should merge

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Speaker 1: it so that like the employees are getting incentivized, yeah,

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Speaker 1: to help the whole system.

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Speaker 2: Well, it's a nice reminder that like nothing truly matters.

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Speaker 2: And I guess that my experience on X as a

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Speaker 2: user won't change, So I'm not particularly fussed about this.

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Speaker 2: I do want to go to the second element in your.

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Speaker 1: People were like, you know, like I wrote about this,

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Speaker 1: I got a lot of people have been like, but

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Speaker 1: now they're going to like steal all your data. They

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Speaker 1: are It's like they already were, like they all like

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Speaker 1: the commercial relationship like already existed X. I was already

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Speaker 1: paying X for like data and distribution, and like it

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Speaker 1: was already standing all your data sort of using all

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Speaker 1: of your data for sure. So there's no there's no

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Speaker 1: real change, I don't think.

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Speaker 2: I do want to go to the second element in

435
00:20:43,840 --> 00:20:47,760
Speaker 2: the Musk Mars conglomerate that you penned. You're right, nothing

436
00:20:47,840 --> 00:20:50,000
Speaker 2: is permanent, and if one of the company succeeds while

437
00:20:50,119 --> 00:20:53,919
Speaker 2: another one has some temporary struggles, the winner can subsidize

438
00:20:54,000 --> 00:20:58,760
Speaker 2: or buy the loser. Talking about Musk's portfolio of different companies, this.

439
00:20:58,880 --> 00:21:02,320
Speaker 1: Is like Tesla acquired Solar City years ago and a

440
00:21:02,400 --> 00:21:04,600
Speaker 1: deal that people suit over and they kind of kind

441
00:21:04,640 --> 00:21:06,560
Speaker 1: of looked like a ballout of some Yeah.

442
00:21:06,520 --> 00:21:09,720
Speaker 2: Well you could see the reverse logic and like Tesla

443
00:21:09,960 --> 00:21:13,280
Speaker 2: buying Xai in a distant reality because Tesla is really

444
00:21:13,760 --> 00:21:16,200
Speaker 2: in the hurt locker. But I don't think Xai could

445
00:21:16,200 --> 00:21:19,480
Speaker 2: buy Tesla. It still has a market cap of something.

446
00:21:19,560 --> 00:21:21,920
Speaker 1: They're saying buying it would be a merger. Merger, would

447
00:21:21,920 --> 00:21:25,280
Speaker 1: be a stock merger, and I think it would be

448
00:21:25,640 --> 00:21:28,280
Speaker 1: hard for a number of reasons, one of which is,

449
00:21:28,320 --> 00:21:30,160
Speaker 1: like I just made the case that x and xaire

450
00:21:30,240 --> 00:21:32,399
Speaker 1: the same business. Yes, this is a different business.

451
00:21:32,600 --> 00:21:33,240
Speaker 2: Yes that's true.

452
00:21:33,359 --> 00:21:35,480
Speaker 1: He's overlap or you're doing AI stuff to make the

453
00:21:35,560 --> 00:21:37,639
Speaker 1: self driving cars, but it's a pretty different business.

454
00:21:37,840 --> 00:21:39,439
Speaker 2: Hasn't he said that he wants Tesla to be an

455
00:21:39,480 --> 00:21:40,119
Speaker 2: AI company.

456
00:21:40,760 --> 00:21:43,359
Speaker 1: I might, Well, it is an AI self driving car

457
00:21:43,400 --> 00:21:46,080
Speaker 1: comp company, but it's very different, you know, but the

458
00:21:46,400 --> 00:21:49,040
Speaker 1: way there's some overlap, but it's not the same business

459
00:21:49,080 --> 00:21:52,280
Speaker 1: model or distribution. But then also like this deal is

460
00:21:52,320 --> 00:21:56,119
Speaker 1: so easy because they're private companies. M M. There are

461
00:21:56,200 --> 00:21:58,359
Speaker 1: shoulders other than him and both of these companies, but

462
00:21:58,480 --> 00:22:01,359
Speaker 1: like they're there because they him. They're not going to complain.

463
00:22:01,880 --> 00:22:04,920
Speaker 1: Dessa is a different situation, right, Like, every shareholder in

464
00:22:05,600 --> 00:22:08,840
Speaker 1: XAI or x is there because they like trust Elon

465
00:22:08,960 --> 00:22:11,760
Speaker 1: Musk and they want him to do stuff right, and

466
00:22:11,880 --> 00:22:14,159
Speaker 1: they will give him a lot of leeway to do

467
00:22:14,200 --> 00:22:18,080
Speaker 1: the stuff he thinks is good. Many vocal retail investors

468
00:22:18,680 --> 00:22:21,119
Speaker 1: vocal institutional investors too, and Tesla are like that, but

469
00:22:21,240 --> 00:22:23,600
Speaker 1: not all of them. No, Like, the one thing that

470
00:22:23,720 --> 00:22:26,400
Speaker 1: exists in Tesla is there are people who like really

471
00:22:26,480 --> 00:22:29,520
Speaker 1: don't like Elon Musk who will buy Tesla stock in

472
00:22:29,720 --> 00:22:31,959
Speaker 1: order to be able to complain about Elon Musk. Right,

473
00:22:32,119 --> 00:22:34,040
Speaker 1: Like I read this week about the controller of the

474
00:22:34,080 --> 00:22:37,679
Speaker 1: City of New York, Right, Like New York Pension funds

475
00:22:37,920 --> 00:22:41,080
Speaker 1: own a lot of Tesla stock. This is not because

476
00:22:41,080 --> 00:22:43,000
Speaker 1: they're huge Elon Musk fans, right, Some of it is

477
00:22:43,000 --> 00:22:46,119
Speaker 1: because they're like sort of indexy. Yeah, but also you

478
00:22:46,400 --> 00:22:48,320
Speaker 1: just do it to be like, I'll keep an eye

479
00:22:48,359 --> 00:22:50,840
Speaker 1: on that Elon Musk character. All own some of his stock,

480
00:22:51,200 --> 00:22:53,240
Speaker 1: and so like the controllers sent a letter to like

481
00:22:53,320 --> 00:22:56,320
Speaker 1: the legal department of the pension fund saying we should

482
00:22:56,359 --> 00:23:01,520
Speaker 1: sue Elon Musk because he is distracted by his role

483
00:23:01,840 --> 00:23:05,800
Speaker 1: in the government, and he is advocating policies that are

484
00:23:05,840 --> 00:23:08,520
Speaker 1: bad for Tesla, and like you know, they're like you say,

485
00:23:08,560 --> 00:23:10,600
Speaker 1: Tesla's in the hard locker. It's because like you know,

486
00:23:10,720 --> 00:23:13,040
Speaker 1: there's like boycotts and and stuff because people don't like.

487
00:23:14,359 --> 00:23:15,119
Speaker 2: That's one part of it.

488
00:23:15,200 --> 00:23:16,760
Speaker 1: But yeah, yeah, sure, right right.

489
00:23:16,800 --> 00:23:20,199
Speaker 2: The ha'd some pretty ugly delivery numbers, which I think some.

490
00:23:20,280 --> 00:23:23,080
Speaker 1: People, including the control of this city of New York,

491
00:23:23,119 --> 00:23:26,240
Speaker 1: would say is in part due to slackening demand because

492
00:23:26,840 --> 00:23:28,720
Speaker 1: people are mad at Elon Musk's politics.

493
00:23:28,800 --> 00:23:32,000
Speaker 2: Right, I'm also anti EV, and I think that I

494
00:23:32,000 --> 00:23:34,359
Speaker 2: don't know they've reached their addressable market on the.

495
00:23:34,720 --> 00:23:37,159
Speaker 1: Side, all right, But like if you think about the

496
00:23:37,200 --> 00:23:39,000
Speaker 1: people who are like in the addressable market or like

497
00:23:39,040 --> 00:23:40,840
Speaker 1: people are like I love an EV and the people

498
00:23:40,880 --> 00:23:44,240
Speaker 1: who are like I also love far right politics, like

499
00:23:44,680 --> 00:23:47,440
Speaker 1: you know, there's some disjunction there anyway, though, So like

500
00:23:47,560 --> 00:23:51,240
Speaker 1: the New York might sue for like securities fraud for doage,

501
00:23:51,359 --> 00:23:54,439
Speaker 1: which is you know, a real everything is security. But anyway,

502
00:23:54,520 --> 00:23:57,840
Speaker 1: my point is only that Tesla, if it were to

503
00:23:58,000 --> 00:24:01,320
Speaker 1: merge with XAI, would be all SARTs of lawsuits that

504
00:24:01,359 --> 00:24:03,200
Speaker 1: you don't have when it's all private companies.

505
00:24:03,880 --> 00:24:07,080
Speaker 2: That's true. Well, I guess it would make more sense

506
00:24:07,119 --> 00:24:09,399
Speaker 2: with SpaceX since they both make things that go fast.

507
00:24:09,520 --> 00:24:12,240
Speaker 2: But that's a gross over simplification.

508
00:24:12,440 --> 00:24:14,240
Speaker 1: There was that time I think all the time that

509
00:24:14,480 --> 00:24:17,640
Speaker 1: Elion must treated that the next Tess the model would

510
00:24:17,640 --> 00:24:20,399
Speaker 1: have rocket posters and be able to fly, And like

511
00:24:20,680 --> 00:24:22,920
Speaker 1: there were articles that were like, how feasible? Is this

512
00:24:23,560 --> 00:24:30,040
Speaker 1: just a public company saying this stuff? And you know

513
00:24:30,440 --> 00:24:31,920
Speaker 1: this is like seven years ago?

514
00:24:32,280 --> 00:24:34,960
Speaker 2: Did he mean it back when it happened things mattered

515
00:24:35,040 --> 00:24:35,359
Speaker 2: back then?

516
00:24:36,600 --> 00:24:36,719
Speaker 1: Well?

517
00:24:36,800 --> 00:24:39,200
Speaker 2: No, no, a little bit seven years ago.

518
00:24:40,760 --> 00:24:43,520
Speaker 1: I actually don't know, might be any number of years ago.

519
00:24:43,640 --> 00:24:44,639
Speaker 1: It's more than three in.

520
00:24:44,720 --> 00:24:49,640
Speaker 2: Less than fifteen pre pandemic. That's why I think about things.

521
00:25:03,119 --> 00:25:04,919
Speaker 1: Should we talk about substitute teachers?

522
00:25:05,240 --> 00:25:08,879
Speaker 2: We absolutely should. Have you seen lately what substituted teachers

523
00:25:08,920 --> 00:25:09,760
Speaker 2: in Maryland are making?

524
00:25:11,560 --> 00:25:12,520
Speaker 1: Seven million dollar.

525
00:25:14,160 --> 00:25:16,359
Speaker 2: Louise? What are we doing?

526
00:25:16,760 --> 00:25:19,440
Speaker 1: Yeah, So there's a story about like a Maryland state

527
00:25:19,480 --> 00:25:22,040
Speaker 1: audit of like the Prince George's County school system that

528
00:25:22,160 --> 00:25:28,000
Speaker 1: found various administrative errors, sloppiness, And the one that I

529
00:25:28,200 --> 00:25:31,600
Speaker 1: was drawn to is that a substitute teacher taught for

530
00:25:31,680 --> 00:25:35,480
Speaker 1: like three days, and they entered this teacher's information into

531
00:25:35,520 --> 00:25:38,040
Speaker 1: the system to some them like a you know, check

532
00:25:38,119 --> 00:25:40,560
Speaker 1: for their few days of work. And they put the

533
00:25:40,640 --> 00:25:44,280
Speaker 1: teacher's ID number into the hours worked field, and the

534
00:25:44,400 --> 00:25:46,240
Speaker 1: ID number had more digits than you want in the

535
00:25:46,280 --> 00:25:48,280
Speaker 1: hours work field. And so they sent the person a

536
00:25:48,400 --> 00:25:52,159
Speaker 1: check for seven million dollars. And they noticed that fifty

537
00:25:52,280 --> 00:25:56,639
Speaker 1: days later and asked for it back, and the teacher

538
00:25:56,680 --> 00:25:59,920
Speaker 1: gave it back. And I just like to do it.

539
00:26:00,040 --> 00:26:04,000
Speaker 1: Imagine what this person did. You've seen this person on

540
00:26:04,240 --> 00:26:06,879
Speaker 1: the gender of the teacher. I imagine what the teacher

541
00:26:07,000 --> 00:26:09,840
Speaker 1: did in those fifty days, and so do my readers.

542
00:26:10,240 --> 00:26:12,960
Speaker 1: There's a lot of emails about this. Most of them

543
00:26:13,480 --> 00:26:15,760
Speaker 1: were to the effect of, you take that money, you

544
00:26:15,840 --> 00:26:18,560
Speaker 1: put it in a money market fund. Fifty days later,

545
00:26:18,640 --> 00:26:20,640
Speaker 1: when they ask for the money back, you give it back,

546
00:26:21,359 --> 00:26:24,960
Speaker 1: and you keep the thirty to fifty thousand dollars spending

547
00:26:25,000 --> 00:26:28,000
Speaker 1: exactly how you count the tens of thousand dollars of

548
00:26:28,080 --> 00:26:31,080
Speaker 1: interest is yours to keep. You're briefly the owner of

549
00:26:31,119 --> 00:26:33,439
Speaker 1: seven million dollars. But you you know, you can collect

550
00:26:33,480 --> 00:26:35,920
Speaker 1: interest on seven million dollars, and it's a meaningful amount

551
00:26:35,920 --> 00:26:36,160
Speaker 1: of money.

552
00:26:36,240 --> 00:26:37,600
Speaker 2: Absolutely, that's like.

553
00:26:37,640 --> 00:26:40,240
Speaker 1: The most reasonable thing that you can do with it.

554
00:26:40,480 --> 00:26:42,040
Speaker 1: The other thing that someone sent me was like, you

555
00:26:42,080 --> 00:26:43,760
Speaker 1: should go to a trading firm. This is someone who

556
00:26:43,800 --> 00:26:46,399
Speaker 1: works like a trading firm. He's like, you should go

557
00:26:46,440 --> 00:26:48,800
Speaker 1: to like an insurance company or trading firm and buy

558
00:26:49,000 --> 00:26:51,120
Speaker 1: insurance on this. You should be like, I will give

559
00:26:51,160 --> 00:26:53,200
Speaker 1: you this person's had like three and a half million dollars,

560
00:26:53,600 --> 00:26:55,720
Speaker 1: three and a half million dollars, and if they come

561
00:26:55,960 --> 00:26:57,920
Speaker 1: to me for the money back, you give them seven

562
00:26:57,960 --> 00:27:00,119
Speaker 1: million dollars, and if they don't, you keep the three

563
00:27:00,119 --> 00:27:01,879
Speaker 1: and a half million dollars. So you're paying an insurance

564
00:27:01,960 --> 00:27:03,240
Speaker 1: rooom for. Are they going to ask you for the

565
00:27:03,280 --> 00:27:05,880
Speaker 1: money back? Now? I don't think any trading firm would

566
00:27:05,880 --> 00:27:08,640
Speaker 1: do that at fifty percent odds, But you could give

567
00:27:08,640 --> 00:27:12,359
Speaker 1: them like six point eight million dollars and someone might

568
00:27:12,400 --> 00:27:14,160
Speaker 1: take that trade and then you keep the two hundred thousand.

569
00:27:14,200 --> 00:27:16,159
Speaker 1: You know, the trade you can do.

570
00:27:16,359 --> 00:27:19,399
Speaker 2: Maybe I would love to know what this person actually did,

571
00:27:19,480 --> 00:27:21,840
Speaker 2: though I don't think that we can get this person

572
00:27:21,920 --> 00:27:22,879
Speaker 2: on the podcast out.

573
00:27:22,760 --> 00:27:25,600
Speaker 1: On their checking account for Are you sure? No, that's sure?

574
00:27:26,040 --> 00:27:28,280
Speaker 2: I mean, this is the whole point of what we're reading.

575
00:27:28,320 --> 00:27:31,280
Speaker 2: But you are magic seven million dollars, You're just an

576
00:27:31,359 --> 00:27:33,560
Speaker 2: ordinary person. You just leave it in your checking account.

577
00:27:34,080 --> 00:27:38,119
Speaker 1: You weren't magic, you were mistakenly paid it. Yeah, Now

578
00:27:38,520 --> 00:27:40,320
Speaker 1: there's a range of things you can do. You can

579
00:27:40,440 --> 00:27:42,760
Speaker 1: call the school system and be like, you mistakenly paid

580
00:27:42,800 --> 00:27:46,200
Speaker 1: me seven million dollars. Teachers seems not to have done that.

581
00:27:46,800 --> 00:27:48,720
Speaker 1: There's a number where I would do that. You know,

582
00:27:48,880 --> 00:27:51,760
Speaker 1: if I was accidentally paid, you know, an extra two

583
00:27:51,880 --> 00:27:54,480
Speaker 1: hundred dollars, I would probably call. Really I don't know,

584
00:27:54,680 --> 00:27:55,439
Speaker 1: I mean, but.

585
00:27:55,480 --> 00:27:57,040
Speaker 2: Yeah, I don't think I would have noticed.

586
00:27:58,359 --> 00:28:00,439
Speaker 1: If I were accidentally paid an amount that I noticed,

587
00:28:00,800 --> 00:28:03,760
Speaker 1: but that would not materially change my life, like really

588
00:28:03,800 --> 00:28:05,880
Speaker 1: materially change my life. I would probably call and be like, hey,

589
00:28:06,160 --> 00:28:08,840
Speaker 1: I'm a nice person, let's sort this error out. But

590
00:28:08,960 --> 00:28:11,159
Speaker 1: it's not really does like, let's see where.

591
00:28:11,040 --> 00:28:13,639
Speaker 2: This goes, right, See, I'm the exact opposite of you.

592
00:28:13,880 --> 00:28:15,920
Speaker 2: If it was it's hard to do this without talking

593
00:28:15,960 --> 00:28:19,240
Speaker 2: about numbers. If it was seven million dollars, I would

594
00:28:19,240 --> 00:28:21,720
Speaker 2: probably call because that is so egregiously an error. There's

595
00:28:21,760 --> 00:28:23,600
Speaker 2: like no way I'm going to be able to keep this.

596
00:28:23,760 --> 00:28:26,960
Speaker 2: If it was far less than that, like not enough

597
00:28:27,000 --> 00:28:29,239
Speaker 2: to change my life, but enough that I could might.

598
00:28:31,359 --> 00:28:36,359
Speaker 2: If it was enough to buy worth a young Greenborough horse,

599
00:28:36,640 --> 00:28:38,880
Speaker 2: I would probably not call about it.

600
00:28:39,520 --> 00:28:42,680
Speaker 1: But like that, when you spend it on the horse,

601
00:28:43,600 --> 00:28:45,040
Speaker 1: you would like the next day go out and buy

602
00:28:45,080 --> 00:28:45,440
Speaker 1: a horse.

603
00:28:45,760 --> 00:28:47,760
Speaker 2: Well, I'd have to find the horse first, you know, Okay,

604
00:28:49,240 --> 00:28:50,320
Speaker 2: like while you're.

605
00:28:50,280 --> 00:28:52,280
Speaker 1: Test riding, there's a good chance that the last for

606
00:28:52,320 --> 00:28:52,840
Speaker 1: the money bag.

607
00:28:53,360 --> 00:28:57,080
Speaker 2: That's true. That's true. I wouldn't spend it immediately, but

608
00:28:57,120 --> 00:28:58,200
Speaker 2: I would start the process.

609
00:28:58,480 --> 00:29:01,320
Speaker 1: The choice is not like you call and say, hey,

610
00:29:01,360 --> 00:29:03,760
Speaker 1: there's an error here, or you keep the money forever. Yeah,

611
00:29:03,880 --> 00:29:06,080
Speaker 1: Like there's the vast middle ground if you don't call

612
00:29:06,200 --> 00:29:08,360
Speaker 1: and you worry, right, which is what this person did, right,

613
00:29:08,520 --> 00:29:09,640
Speaker 1: that's not keeping that money.

614
00:29:09,680 --> 00:29:13,000
Speaker 2: I probably would not spend it immediately, like in any situation,

615
00:29:13,160 --> 00:29:15,720
Speaker 2: but I'm not really an impulse sure.

616
00:29:15,960 --> 00:29:19,040
Speaker 1: My favorite reader email about this, yeah, came from someone

617
00:29:19,040 --> 00:29:22,360
Speaker 1: who worked at a bank and got overpaid. He was

618
00:29:22,480 --> 00:29:24,920
Speaker 1: mistakenly paid like a bonus or something, and it was

619
00:29:24,960 --> 00:29:26,840
Speaker 1: like not seven million dollars, but it was. I think

620
00:29:26,880 --> 00:29:28,120
Speaker 1: he was like a young person. I don't know. It

621
00:29:28,240 --> 00:29:31,800
Speaker 1: was tens of thousands of dollars, and he says he

622
00:29:31,920 --> 00:29:36,360
Speaker 1: consulted an employment layer and learned about the time period

623
00:29:36,400 --> 00:29:39,520
Speaker 1: for letches, which is a legal concept of like basically,

624
00:29:40,360 --> 00:29:42,240
Speaker 1: how long do you have to wait before you don't

625
00:29:42,240 --> 00:29:43,720
Speaker 1: have to worry about anymore. It's like a statute of

626
00:29:43,720 --> 00:29:46,520
Speaker 1: limitations for stuff like this. And the lawyer told him

627
00:29:46,560 --> 00:29:52,400
Speaker 1: it was six years. Wow. He waited out the six years.

628
00:29:52,560 --> 00:29:52,840
Speaker 2: Wow.

629
00:29:53,240 --> 00:29:55,360
Speaker 1: And he's like at the end, I threw a claim

630
00:29:55,400 --> 00:29:58,720
Speaker 1: has lapsed party. That's awesome because they didn't ask.

631
00:29:58,600 --> 00:30:01,760
Speaker 2: The money bag man. That is a great email. But

632
00:30:01,920 --> 00:30:02,560
Speaker 2: like I just.

633
00:30:02,640 --> 00:30:07,040
Speaker 1: Imagine like the mindset of like this money has been

634
00:30:07,080 --> 00:30:11,080
Speaker 1: mistakenly deposited my account. Let me ask a lawyer, like

635
00:30:11,200 --> 00:30:15,800
Speaker 1: I reade one's about the city group error and one, yeah,

636
00:30:15,840 --> 00:30:17,960
Speaker 1: I know when they send the nine hundred million dollars

637
00:30:17,960 --> 00:30:19,680
Speaker 1: to Hedgehunds that were mad at them, and the Hedgehts

638
00:30:19,760 --> 00:30:22,440
Speaker 1: kept it. I wrote about the Hedgehunds consulting finders keepers

639
00:30:22,520 --> 00:30:24,520
Speaker 1: lawyers because like they did actually like bring a claim,

640
00:30:24,600 --> 00:30:26,440
Speaker 1: being like no, we're allowed to keep the money. But

641
00:30:26,560 --> 00:30:28,880
Speaker 1: like there are finders keepers layers out there in the world,

642
00:30:28,880 --> 00:30:31,040
Speaker 1: and you can consult one and be like you have

643
00:30:31,240 --> 00:30:33,239
Speaker 1: six years. If you get through six years, you can

644
00:30:33,320 --> 00:30:34,640
Speaker 1: keep the money. And he did.

645
00:30:34,920 --> 00:30:36,640
Speaker 2: I would love to have gone to that party.

646
00:30:36,800 --> 00:30:38,160
Speaker 1: That sounds like a party.

647
00:30:38,240 --> 00:30:40,160
Speaker 2: Yeah, that's a good theme. I love a theme. That's

648
00:30:40,200 --> 00:30:41,760
Speaker 2: a good one. It's a good man.

649
00:30:42,400 --> 00:30:47,360
Speaker 1: It's not I got a mistaken bonus. It's six years later.

650
00:30:47,400 --> 00:30:49,680
Speaker 1: They haven't asked for my mistaken bonus back. It's so good.

651
00:30:50,320 --> 00:30:52,440
Speaker 2: I wonder if you told the bank, oh, it's not.

652
00:30:52,920 --> 00:30:55,200
Speaker 1: That's a good point. Probably not, but now they know

653
00:30:55,480 --> 00:30:56,960
Speaker 1: I should say this is not legally pace.

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Speaker 2: I have no idea what the city group.

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Speaker 1: I know that would be too perfect. Hi. Yeah, yeah,

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Speaker 1: siting here. Check. And that was the Money Stuff Podcast.

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