1 00:00:03,120 --> 00:00:10,719 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. Hello and welcome to 2 00:00:10,760 --> 00:00:13,560 Speaker 1: the Money Stuff Podcast. You're a weekly podcast where we 3 00:00:13,640 --> 00:00:17,560 Speaker 1: talk about stuff related to money. I'm Matt Levine and 4 00:00:17,600 --> 00:00:19,799 Speaker 1: I are at the Money Stuff column for Bloomberg Opinion. 5 00:00:20,120 --> 00:00:22,680 Speaker 2: I'm Katie Greifeld, a reporter for Bloomberg News and an 6 00:00:22,720 --> 00:00:24,320 Speaker 2: anchor for Bloomberg Television. 7 00:00:24,880 --> 00:00:27,520 Speaker 1: Hello Katie, Hey, Matt, you're very far away. 8 00:00:27,720 --> 00:00:30,280 Speaker 2: I know this is the first time that we've done 9 00:00:30,280 --> 00:00:32,640 Speaker 2: this podcast where we're in different locations. 10 00:00:33,000 --> 00:00:37,040 Speaker 1: Yes, you're at Bloomberg. I am not at Bloomberg. I'm 11 00:00:37,080 --> 00:00:38,440 Speaker 1: in a secret that I've been in my house. 12 00:00:38,920 --> 00:00:40,760 Speaker 2: You're in your house, and I'm in my house because 13 00:00:40,760 --> 00:00:42,040 Speaker 2: I don't actually leave this building. 14 00:00:44,080 --> 00:00:45,640 Speaker 1: What are you talking about today, Katie. 15 00:00:45,680 --> 00:00:48,400 Speaker 2: We're going to talk about Texas at Potential Stock Exchange 16 00:00:48,440 --> 00:00:51,000 Speaker 2: coming to Dallas. We're going to talk about Bill Lackman, 17 00:00:51,280 --> 00:00:53,840 Speaker 2: of course, and then we're going to talk, of course 18 00:00:54,040 --> 00:00:56,720 Speaker 2: about Roaring Kitty, also known as Keith Gill. 19 00:01:00,040 --> 00:01:01,840 Speaker 1: Let's give into it Equities in Dallas. 20 00:01:02,600 --> 00:01:05,880 Speaker 2: Equities in Dallas, the Texas Stock Exchange. That was a 21 00:01:05,880 --> 00:01:08,440 Speaker 2: big splashy report from the Wall Street Journal this week 22 00:01:08,480 --> 00:01:10,920 Speaker 2: that this company would like to start a new stock 23 00:01:10,920 --> 00:01:12,720 Speaker 2: exchange headquartered in Texas. 24 00:01:13,080 --> 00:01:14,039 Speaker 1: It's very exciting. 25 00:01:14,760 --> 00:01:18,880 Speaker 2: I guess it is. So there's so many ways that 26 00:01:18,920 --> 00:01:21,560 Speaker 2: we can attack this. Let's get on it head on. 27 00:01:21,800 --> 00:01:26,479 Speaker 2: In that there's been a lot of attempts to sort 28 00:01:26,520 --> 00:01:30,760 Speaker 2: of launch exchanges. As you go through in many columns, 29 00:01:30,920 --> 00:01:33,200 Speaker 2: the long term stock exchange, we have the members exchange, 30 00:01:33,200 --> 00:01:37,360 Speaker 2: we have the investors exchange. I feel like it's kind 31 00:01:37,400 --> 00:01:39,800 Speaker 2: of easy to launch an exchange and get to one 32 00:01:39,840 --> 00:01:43,479 Speaker 2: to two percent share. What's interesting about this is that 33 00:01:44,200 --> 00:01:47,840 Speaker 2: this is political. This is a politicized stock exchange, even 34 00:01:47,880 --> 00:01:52,120 Speaker 2: if they're trying not to be. The introduction of Texas 35 00:01:52,680 --> 00:01:54,040 Speaker 2: I feel like makes it political. 36 00:01:54,560 --> 00:01:57,200 Speaker 1: Yeah, I mean there is like this sort of movement 37 00:01:57,480 --> 00:02:02,640 Speaker 1: in American business politics to move stuff to Texas, right, 38 00:02:02,640 --> 00:02:04,320 Speaker 1: I mean you see it with Elon Musk trying to 39 00:02:04,320 --> 00:02:07,520 Speaker 1: move his companies to Texas from Delaware. There's the sense 40 00:02:07,560 --> 00:02:11,560 Speaker 1: that like a lot of corporate rules are set from 41 00:02:11,919 --> 00:02:14,680 Speaker 1: you know, New York and Delaware, and that people who 42 00:02:14,720 --> 00:02:17,760 Speaker 1: don't like those rules might find a more sympathetic audience 43 00:02:17,840 --> 00:02:21,840 Speaker 1: in Texas. I don't know that that's exactly relevant to 44 00:02:21,960 --> 00:02:25,160 Speaker 1: this company, but yeah, they're sort of making noises about 45 00:02:25,160 --> 00:02:28,400 Speaker 1: the listing standards. You know, most companies are listed on 46 00:02:28,440 --> 00:02:31,440 Speaker 1: either the New York Stock Exchange or NASDAC, and there 47 00:02:31,440 --> 00:02:34,680 Speaker 1: are rules about corporate governance that apply to listed companies 48 00:02:34,680 --> 00:02:38,720 Speaker 1: and those stock exchanges. And I think the people starting 49 00:02:38,760 --> 00:02:40,760 Speaker 1: this exchange, or at least hinting that some of those 50 00:02:40,840 --> 00:02:44,239 Speaker 1: rules are either too onerous and expensive or they're too 51 00:02:44,320 --> 00:02:48,560 Speaker 1: like woke and left wing, and so they will offer 52 00:02:48,720 --> 00:02:50,760 Speaker 1: a different set of rules in Texas. 53 00:02:51,160 --> 00:02:54,200 Speaker 2: The SEC still has to approve their listing rules, so 54 00:02:54,200 --> 00:02:56,600 Speaker 2: they can't be like too crazy and out there. 55 00:02:56,720 --> 00:02:58,880 Speaker 1: Yeah, I think like some of what's happening here is 56 00:02:58,919 --> 00:03:01,320 Speaker 1: like there's this notion that Nicia and NASDAK accept the 57 00:03:01,320 --> 00:03:03,799 Speaker 1: listing rules. I'm like, that's not exactly true. They sort 58 00:03:03,800 --> 00:03:07,120 Speaker 1: of do it with pressure and input and approval from 59 00:03:07,160 --> 00:03:10,720 Speaker 1: the SEC. So Nice and nas listing rules don't differ 60 00:03:10,760 --> 00:03:13,040 Speaker 1: from each other all that much because it's not like 61 00:03:13,560 --> 00:03:16,160 Speaker 1: Nicia and NASDAG are out there making crazy decisions. It's 62 00:03:16,160 --> 00:03:19,000 Speaker 1: like kind of done in concert with the SEC. So 63 00:03:19,040 --> 00:03:22,640 Speaker 1: there's only so far that the Texas Stock Exchange can differ. 64 00:03:23,120 --> 00:03:25,760 Speaker 2: So I have a free idea for the Texas Stock Exchange. 65 00:03:28,720 --> 00:03:31,480 Speaker 2: I was waiting for your reaction. 66 00:03:31,800 --> 00:03:34,440 Speaker 1: But I'm sure they'd pay you a lot of money 67 00:03:34,480 --> 00:03:35,360 Speaker 1: for that idea, Katie. 68 00:03:35,440 --> 00:03:38,800 Speaker 2: But well you haven't heard, so let me let me 69 00:03:38,880 --> 00:03:41,920 Speaker 2: lay it on you. So, like I said, you can 70 00:03:41,960 --> 00:03:44,480 Speaker 2: get to one to two percent share. But as we've 71 00:03:44,520 --> 00:03:47,640 Speaker 2: seen with some of these other upstart exchanges, it's really 72 00:03:47,680 --> 00:03:50,800 Speaker 2: hard to attract listings. That is a nut that has 73 00:03:50,880 --> 00:03:53,960 Speaker 2: yet to be cracked. What the Texas Stock Exchange should 74 00:03:53,960 --> 00:03:57,840 Speaker 2: focus its efforts on is getting Musk to switch Tesla 75 00:03:57,880 --> 00:04:01,080 Speaker 2: from Nasdaq to the Test Stock Exchange and be like 76 00:04:01,440 --> 00:04:03,880 Speaker 2: the anchor big name listing. 77 00:04:04,880 --> 00:04:06,640 Speaker 1: That's a really good idea. I think they should pay 78 00:04:06,680 --> 00:04:07,760 Speaker 1: you for that idea. I mean, it is a really 79 00:04:07,760 --> 00:04:10,400 Speaker 1: good idea. Right. It's so hard to get listings because 80 00:04:10,560 --> 00:04:15,520 Speaker 1: most companies don't think that much about their listings anymore. Right, Like, 81 00:04:15,520 --> 00:04:18,000 Speaker 1: if you're listed on the top tier of NASDAC or 82 00:04:18,000 --> 00:04:20,960 Speaker 1: you're listed on the top tier of Nice, it's fine. 83 00:04:21,279 --> 00:04:23,640 Speaker 1: Like you're not getting that many perks from switching from 84 00:04:23,640 --> 00:04:26,480 Speaker 1: one to the other, and it's like an administrative hassle 85 00:04:26,480 --> 00:04:29,159 Speaker 1: and it's confusing, So why would you switch? Right? Most 86 00:04:29,200 --> 00:04:33,120 Speaker 1: companies think about listings only really when they're going public. 87 00:04:33,480 --> 00:04:35,760 Speaker 1: I mean, you're going public. It is such a high 88 00:04:35,760 --> 00:04:38,480 Speaker 1: pressure situation. It is so important to get it right. 89 00:04:38,800 --> 00:04:41,600 Speaker 1: And if you list on some untested exchange and you're 90 00:04:41,640 --> 00:04:44,680 Speaker 1: the first company listing on that exchange, there's that small 91 00:04:45,080 --> 00:04:48,240 Speaker 1: potential for catastrophe, and you really really really don't want 92 00:04:48,279 --> 00:04:51,320 Speaker 1: that when you're going public. So if you are going 93 00:04:51,320 --> 00:04:54,400 Speaker 1: to compete for listings, you do have to start, probably 94 00:04:54,800 --> 00:04:59,120 Speaker 1: with already public companies, and you want companies that are 95 00:04:59,600 --> 00:05:03,320 Speaker 1: interesting it in doing weird stuff and not afraid of 96 00:05:03,360 --> 00:05:06,279 Speaker 1: the like weird stigma of being the only company listed 97 00:05:06,320 --> 00:05:08,760 Speaker 1: on a weird new exchange with lower listing standards. And 98 00:05:08,800 --> 00:05:10,360 Speaker 1: that all does sound like Tesla. 99 00:05:10,600 --> 00:05:13,239 Speaker 2: Yeah, and I feel like the risk of catastrophe isn't 100 00:05:13,279 --> 00:05:15,599 Speaker 2: necessarily going to deter Elon musk Away. 101 00:05:15,839 --> 00:05:17,920 Speaker 1: Oh yeah, I think the rest of the catastrophe is much 102 00:05:17,920 --> 00:05:20,320 Speaker 1: lower for an already public company, right, Like the rest 103 00:05:20,400 --> 00:05:22,920 Speaker 1: of catastrophe is mainly for an IPO. Right If you're 104 00:05:22,920 --> 00:05:25,840 Speaker 1: already public, it can only go so wrong on your 105 00:05:25,839 --> 00:05:27,719 Speaker 1: first day of trading, Like the worst thing that happens 106 00:05:27,720 --> 00:05:29,200 Speaker 1: is like takes a little extra time to open you 107 00:05:29,200 --> 00:05:31,520 Speaker 1: for trading. But yes, also I agree that even if 108 00:05:31,560 --> 00:05:34,560 Speaker 1: there were a risk of catastrophe. Elon Musk would say, great, 109 00:05:34,640 --> 00:05:37,560 Speaker 1: sign me up. So I think it's a good idea, Yeah, 110 00:05:37,640 --> 00:05:39,920 Speaker 1: not to step on your territory. But like, I don't 111 00:05:39,920 --> 00:05:43,560 Speaker 1: think that the other listings that they would want to 112 00:05:43,600 --> 00:05:47,680 Speaker 1: compete for are for ETFs, right, because I assume that, 113 00:05:47,800 --> 00:05:49,560 Speaker 1: you know, if you're an ETF is sure you have 114 00:05:49,560 --> 00:05:51,920 Speaker 1: a lot of ETFs. It's a little bit less higher 115 00:05:51,960 --> 00:05:54,800 Speaker 1: stakes each time to like pick a listing exchange and 116 00:05:55,120 --> 00:05:58,600 Speaker 1: I assume they're angling for that product. I don't know. 117 00:05:58,960 --> 00:06:00,760 Speaker 2: Yeah, if you take a look, I mean at their 118 00:06:01,120 --> 00:06:03,880 Speaker 2: various press releases that's in there that they do plan 119 00:06:03,960 --> 00:06:08,160 Speaker 2: to compete on exchange traded product listings through lower fees 120 00:06:08,720 --> 00:06:11,880 Speaker 2: ETF listings. This is, you know, something that I'm actually 121 00:06:11,960 --> 00:06:16,839 Speaker 2: reporting out right now. But I am curious how much 122 00:06:17,520 --> 00:06:20,000 Speaker 2: of a business and how bigger of a business that 123 00:06:20,120 --> 00:06:22,760 Speaker 2: might become for exchanges because you think about the current 124 00:06:23,200 --> 00:06:27,279 Speaker 2: IPO market and there's very little going on relative to 125 00:06:27,360 --> 00:06:30,800 Speaker 2: you know, the halcyon days of like twenty twenty one 126 00:06:31,040 --> 00:06:33,600 Speaker 2: or whenever the last big rush was. But I mean 127 00:06:33,600 --> 00:06:36,600 Speaker 2: there are hundreds of ETFs that launch and list every 128 00:06:36,640 --> 00:06:40,200 Speaker 2: single year, and I mean those ETFs. They pay an 129 00:06:40,200 --> 00:06:43,040 Speaker 2: initial listing fee and then they pay annual listing fees, 130 00:06:43,600 --> 00:06:47,000 Speaker 2: so I mean that continues to hum along. It was 131 00:06:47,400 --> 00:06:49,640 Speaker 2: just so fascinating to see that press release that that 132 00:06:49,800 --> 00:06:52,280 Speaker 2: specifically is an area that they want to target, because 133 00:06:52,360 --> 00:06:55,680 Speaker 2: right now it's NASI, it's NASDAC, it's also Cibo, and 134 00:06:55,960 --> 00:06:57,839 Speaker 2: Cibo for example, has. 135 00:06:57,680 --> 00:07:01,200 Speaker 1: Been taking bath Exchange is not a major listening venue 136 00:07:01,240 --> 00:07:03,760 Speaker 1: for public companies, but it is for ets right. Yeah, 137 00:07:03,800 --> 00:07:05,440 Speaker 1: it's the easiest space to compete in. 138 00:07:05,760 --> 00:07:10,120 Speaker 2: It's the second biggest venue, so we'll see. But aside 139 00:07:10,120 --> 00:07:12,600 Speaker 2: from just listing fees, which I mean, who knows. But 140 00:07:12,760 --> 00:07:15,880 Speaker 2: when it comes to transaction volume, you think about black 141 00:07:15,960 --> 00:07:20,440 Speaker 2: Rocks Bitcoin ETF, which is now, since it launched in January, 142 00:07:20,880 --> 00:07:23,640 Speaker 2: the biggest bitcoin ETF in the world. It does a 143 00:07:23,680 --> 00:07:27,080 Speaker 2: lot in trading volume, it's listed on Nasdaq. I mean, 144 00:07:27,080 --> 00:07:30,120 Speaker 2: it's done much better than some of the recent IPOs 145 00:07:30,160 --> 00:07:33,680 Speaker 2: from this year. So you have to imagine the ETF business, 146 00:07:33,760 --> 00:07:37,239 Speaker 2: the ETP business for these exchanges. It's a nice cushion 147 00:07:37,280 --> 00:07:38,840 Speaker 2: from what's going on in IPO land. 148 00:07:39,920 --> 00:07:42,440 Speaker 1: Yeah, and if you're starting from scratch, it does seem 149 00:07:42,440 --> 00:07:44,560 Speaker 1: like an easier thing to pursue. Now do you think 150 00:07:44,600 --> 00:07:47,320 Speaker 1: that you know, as you said, it's like a lot 151 00:07:47,360 --> 00:07:49,320 Speaker 1: of exchanges have started and gotten to like one to 152 00:07:49,320 --> 00:07:51,840 Speaker 1: two percent of market share and then kind of plateau there. 153 00:07:53,360 --> 00:07:55,960 Speaker 1: My impression is that's not the worst business, because the 154 00:07:55,960 --> 00:08:00,600 Speaker 1: economics of exchanges are very weird. And one thing that 155 00:08:00,680 --> 00:08:03,240 Speaker 1: sort of happens is that if you are a big 156 00:08:03,280 --> 00:08:06,480 Speaker 1: broker or a big electronic market maker, you're sort of 157 00:08:06,520 --> 00:08:09,840 Speaker 1: obligated to connect to every exchange because you have obligations 158 00:08:09,880 --> 00:08:12,600 Speaker 1: to get your clients the best execution, and so you 159 00:08:12,680 --> 00:08:15,160 Speaker 1: have to know whatever exchange is doing. So even if 160 00:08:15,200 --> 00:08:18,400 Speaker 1: you sort of say, I don't think the Texas Stock 161 00:08:18,440 --> 00:08:20,600 Speaker 1: Exchange is ever going to have almost ever going to 162 00:08:20,600 --> 00:08:22,520 Speaker 1: have the best price on any stock, you can't be 163 00:08:22,520 --> 00:08:24,760 Speaker 1: sure of that. So you have to like connect and 164 00:08:24,880 --> 00:08:28,160 Speaker 1: check their prices before you trade somewhere else. And so 165 00:08:28,280 --> 00:08:31,040 Speaker 1: you're paying them for like connections and for data fees, 166 00:08:31,520 --> 00:08:34,880 Speaker 1: and so anyone who's like a certified official national stock 167 00:08:34,960 --> 00:08:37,880 Speaker 1: exchange can get some revenue from just like charging for data. 168 00:08:38,360 --> 00:08:43,160 Speaker 1: So it's this interestingly regulatorily protected business model that when 169 00:08:43,200 --> 00:08:45,280 Speaker 1: you start an exchange and you go out and pitch investors, 170 00:08:45,280 --> 00:08:47,080 Speaker 1: you have to like tell a story about how you 171 00:08:47,120 --> 00:08:48,920 Speaker 1: know we're going to be the anti woke exchange. But 172 00:08:48,960 --> 00:08:50,880 Speaker 1: like some exime, once you have the exchange, that doesn't 173 00:08:50,880 --> 00:08:52,600 Speaker 1: matter what you do. You can just collect the data fees. 174 00:08:52,840 --> 00:08:53,560 Speaker 2: Sounds pretty good, so. 175 00:08:53,600 --> 00:08:56,600 Speaker 1: As you actually intend to like displays nice and Nasdaq 176 00:08:56,640 --> 00:08:58,199 Speaker 1: as like one of the major listening venues, which I 177 00:08:58,200 --> 00:09:00,200 Speaker 1: think is much much much harder to do. 178 00:09:00,679 --> 00:09:04,080 Speaker 2: Yeah, I mean, I feel like I've done a good 179 00:09:04,160 --> 00:09:06,439 Speaker 2: job of not exposing my bias thus far. 180 00:09:06,520 --> 00:09:11,120 Speaker 1: So I wouldn't say one other thing about the Texas 181 00:09:11,120 --> 00:09:13,400 Speaker 1: Stock Exchange. Two other things. When is the phrase equities 182 00:09:13,400 --> 00:09:15,840 Speaker 1: in Dallas, which of course comes from liars poker, where 183 00:09:15,840 --> 00:09:18,520 Speaker 1: it is used as an insult because the worst trainees 184 00:09:18,559 --> 00:09:21,400 Speaker 1: in the solive and training program were sent to trade equities, And. 185 00:09:21,520 --> 00:09:23,480 Speaker 2: Yeah, I missed that reference is. 186 00:09:23,360 --> 00:09:23,920 Speaker 1: Oh did you? 187 00:09:24,120 --> 00:09:25,280 Speaker 2: Oh? Yeah, let me tell you. 188 00:09:25,280 --> 00:09:27,640 Speaker 1: I had a reader email me literally. I wrote the 189 00:09:27,640 --> 00:09:30,600 Speaker 1: newsletter about the stock Exchange and the section header was 190 00:09:30,880 --> 00:09:34,960 Speaker 1: equities in Dallas and someone replied saying, I can't believe 191 00:09:35,240 --> 00:09:38,160 Speaker 1: the section header for the Texas Stock Exchange wasn't equities 192 00:09:38,160 --> 00:09:40,600 Speaker 1: in Dallas. I was like, wait, it was just read it. 193 00:09:40,920 --> 00:09:43,480 Speaker 1: People were so keen to come up with that joke 194 00:09:43,520 --> 00:09:45,400 Speaker 1: on their own, that they were like emailing me that 195 00:09:45,480 --> 00:09:47,320 Speaker 1: joke after I already read it. I didn't come up 196 00:09:47,320 --> 00:09:49,680 Speaker 1: with my own either, but someone else told me. But anyway, 197 00:09:49,760 --> 00:09:52,640 Speaker 1: Equities in Dallas like a Great Wall Street insult, which 198 00:09:52,679 --> 00:09:55,679 Speaker 1: is now like the actual business model of the Texas 199 00:09:55,679 --> 00:09:56,360 Speaker 1: Stock Exchange. 200 00:09:56,400 --> 00:09:58,400 Speaker 2: Maybe it will soon be a compliment. Perhaps. 201 00:09:58,720 --> 00:10:01,199 Speaker 1: I think Dallas has sort of self consciously reclaimed its 202 00:10:01,200 --> 00:10:03,319 Speaker 1: statue as a financial center and been like, no, no, 203 00:10:03,520 --> 00:10:05,880 Speaker 1: it's not Equities in Dallas anymore. Now it's good. But 204 00:10:05,920 --> 00:10:07,480 Speaker 1: the other thing I want to say about this exchange 205 00:10:07,520 --> 00:10:09,840 Speaker 1: is that I wrote that, you know, it's all electronic, right, 206 00:10:10,080 --> 00:10:11,920 Speaker 1: No one really stands on the floor of stock exchange 207 00:10:11,960 --> 00:10:14,920 Speaker 1: except like TV reporters now. But you know, I wrote 208 00:10:14,960 --> 00:10:17,079 Speaker 1: that their computer for trading stocks would be in Texas, 209 00:10:17,320 --> 00:10:18,720 Speaker 1: and they actually told me no, they will have a 210 00:10:18,760 --> 00:10:21,040 Speaker 1: data center and somewhere in Dallas. But they also have 211 00:10:21,040 --> 00:10:21,880 Speaker 1: a data center. 212 00:10:21,679 --> 00:10:23,120 Speaker 2: In Secaucus, as they should. 213 00:10:23,280 --> 00:10:27,320 Speaker 1: As they should because all US stock exchanges sort of 214 00:10:27,400 --> 00:10:31,080 Speaker 1: have to be in northern New Jersey because it is 215 00:10:31,160 --> 00:10:35,480 Speaker 1: all this interlinked web of trading venues where like everyone 216 00:10:35,600 --> 00:10:38,440 Speaker 1: trades on every venue and you sometimes have to do 217 00:10:38,559 --> 00:10:42,079 Speaker 1: arbitrage trades where like a stock is trading at one 218 00:10:42,080 --> 00:10:44,520 Speaker 1: price on BATS and another price on NASDAIK, and so 219 00:10:44,600 --> 00:10:46,800 Speaker 1: you want to do the trade between them. To do that, 220 00:10:46,840 --> 00:10:49,719 Speaker 1: you have to move data. And it takes longer to 221 00:10:49,760 --> 00:10:52,440 Speaker 1: move data over long distances than it does over short distances. 222 00:10:52,559 --> 00:10:56,040 Speaker 1: And this business is so like competitive and so focused 223 00:10:56,120 --> 00:10:59,240 Speaker 1: on speed that people locate their computers in the data 224 00:10:59,240 --> 00:11:01,720 Speaker 1: center with the extan computers. And the idea of sending 225 00:11:01,720 --> 00:11:03,480 Speaker 1: your data all the way to Dallas would be weird. 226 00:11:03,480 --> 00:11:05,040 Speaker 1: It would be so far away, it would takes so 227 00:11:05,080 --> 00:11:06,800 Speaker 1: long for your data to get there. So of course 228 00:11:06,800 --> 00:11:10,200 Speaker 1: the Texas Stock Exchange will actually have computers in secaucas 229 00:11:10,320 --> 00:11:12,640 Speaker 1: next to all the other stock exchanges computers. 230 00:11:13,360 --> 00:11:17,000 Speaker 2: I love that that the beating heart that's a financial 231 00:11:17,000 --> 00:11:18,600 Speaker 2: world is in northern New Jersey. 232 00:11:18,720 --> 00:11:21,079 Speaker 1: Incas right, It's like suburban Northern New Jersey is like 233 00:11:21,120 --> 00:11:37,679 Speaker 1: where everything is. 234 00:11:38,920 --> 00:11:42,719 Speaker 2: I just my brain like is cooked. I can I 235 00:11:42,760 --> 00:11:44,760 Speaker 2: can feel it like sizzling and frying. 236 00:11:45,280 --> 00:11:50,200 Speaker 1: That's okay, because now we're going to talk about Bill Lackman. 237 00:11:50,880 --> 00:11:54,240 Speaker 2: Bill Lackman, Bill Ackman, There's a lot to talk about 238 00:11:54,240 --> 00:11:54,840 Speaker 2: with Bill Lackman. 239 00:11:55,360 --> 00:11:58,640 Speaker 1: There usually is, but now we're talking about his closed 240 00:11:58,760 --> 00:12:01,440 Speaker 1: end fund. We're among other things. 241 00:12:01,800 --> 00:12:04,240 Speaker 2: That's the only thing I was referring to. I am 242 00:12:04,280 --> 00:12:06,920 Speaker 2: so excited to talk about his closed down fund plans, 243 00:12:07,080 --> 00:12:09,520 Speaker 2: specifically in the US. And then there's also the IPO. 244 00:12:10,040 --> 00:12:13,559 Speaker 1: Yeah right, they go together, right, Yeah, he's got a 245 00:12:13,600 --> 00:12:14,480 Speaker 1: lot of stuff gone up. 246 00:12:14,679 --> 00:12:17,840 Speaker 2: Where do you want to start? Perhaps the IPO, I 247 00:12:17,840 --> 00:12:18,200 Speaker 2: don't know. 248 00:12:18,320 --> 00:12:20,960 Speaker 1: Yeah, So they're link so basically starting last week of 249 00:12:21,000 --> 00:12:23,040 Speaker 1: the Welsher Journal reported and then there's been some good 250 00:12:23,040 --> 00:12:26,080 Speaker 1: Plomberg flo up. There's this package of Bill Lackman news. 251 00:12:26,120 --> 00:12:29,079 Speaker 1: So Bill Lackman runs Pershing Square Capital Management, which is 252 00:12:29,120 --> 00:12:32,120 Speaker 1: a hedge fund firm, has been a hedgehund firm. Now 253 00:12:32,160 --> 00:12:33,720 Speaker 1: most of its money is in the form of a 254 00:12:33,800 --> 00:12:37,240 Speaker 1: closed end fund in Europe called Pushing Square Holdings runs 255 00:12:37,240 --> 00:12:39,120 Speaker 1: like eighteen billion dollars, not all of which, most of 256 00:12:39,160 --> 00:12:42,480 Speaker 1: which is in Persian car holdings. US investors they kind 257 00:12:42,520 --> 00:12:44,760 Speaker 1: of can buy Pershing Square Holdings, but not really. It's 258 00:12:44,760 --> 00:12:46,720 Speaker 1: like bad for taxes and they can't market it. So 259 00:12:47,000 --> 00:12:50,160 Speaker 1: it's mostly European investors. But Bill Lackman is in New 260 00:12:50,200 --> 00:12:52,680 Speaker 1: York and the fund mostly invests in the US. Companies, 261 00:12:53,120 --> 00:12:57,720 Speaker 1: and so he wants to open a closed end fund 262 00:12:57,840 --> 00:13:00,439 Speaker 1: in the US that would do the same thing. It 263 00:13:00,480 --> 00:13:03,560 Speaker 1: would buy US companies, but it would be much more 264 00:13:03,559 --> 00:13:05,760 Speaker 1: convenient for US investors and he could market it to 265 00:13:05,840 --> 00:13:08,839 Speaker 1: US investors. But then last week the journal reported that 266 00:13:09,600 --> 00:13:12,600 Speaker 1: he's also planning an IPO of the management company of 267 00:13:12,600 --> 00:13:16,400 Speaker 1: Pushing Square, so the management company itself would go public, 268 00:13:16,640 --> 00:13:18,280 Speaker 1: probably like at the end of next year or something. 269 00:13:18,600 --> 00:13:20,720 Speaker 1: And in the lead up to that, he sold the stake. 270 00:13:21,080 --> 00:13:23,080 Speaker 1: He sold like ten percent of the management company to 271 00:13:23,800 --> 00:13:27,079 Speaker 1: some private investors for a billion dollars, so valuing the 272 00:13:27,160 --> 00:13:30,040 Speaker 1: management company at ten billion dollars, which is really quite 273 00:13:30,160 --> 00:13:33,920 Speaker 1: rich for a hedgehome firm that manages eighteen billion dollars. 274 00:13:33,920 --> 00:13:36,400 Speaker 1: To value the management company at ten billion is pretty rich. 275 00:13:36,480 --> 00:13:39,360 Speaker 1: But then also Bloomberg reported that he's planning to raise 276 00:13:39,800 --> 00:13:43,120 Speaker 1: twenty five billion dollars for the US closed und fund, 277 00:13:43,320 --> 00:13:45,800 Speaker 1: which helps explain the valuation of the management company. He's like, oh, 278 00:13:45,840 --> 00:13:47,760 Speaker 1: he's going to run like a lot more money. But 279 00:13:47,880 --> 00:13:50,000 Speaker 1: on the other hand, that's a sort of ambitious target 280 00:13:50,040 --> 00:13:52,400 Speaker 1: to raise. So that's kind of where the news is. 281 00:13:52,720 --> 00:13:54,520 Speaker 2: Yeah, I mean, starting with the ten and a half 282 00:13:54,559 --> 00:13:58,800 Speaker 2: billion dollar valuation. That's something close to sixty percent of 283 00:13:58,800 --> 00:14:02,199 Speaker 2: its assets. And according to the Wall Street Journal, they 284 00:14:02,240 --> 00:14:06,400 Speaker 2: reported that Acman told investors to compare Pershing Square to 285 00:14:07,000 --> 00:14:10,520 Speaker 2: Brookfield Asset Management, Blue Oul, et cetera. But then you 286 00:14:10,559 --> 00:14:13,760 Speaker 2: take a look at how they're valued. And this is 287 00:14:13,760 --> 00:14:16,920 Speaker 2: something that Aaron Brown pointed out in Bloomberg Opinion that 288 00:14:17,559 --> 00:14:21,560 Speaker 2: typically they have market capitalizations that are like fifteen to 289 00:14:21,640 --> 00:14:24,920 Speaker 2: eighteen percent of their assets. So I mean, comparing them 290 00:14:24,960 --> 00:14:27,680 Speaker 2: to that peer group, it's still quite rich. But I 291 00:14:27,680 --> 00:14:30,960 Speaker 2: guess if you are planning to quadruple assets or something, 292 00:14:31,480 --> 00:14:32,640 Speaker 2: it makes a little bit more sense. 293 00:14:32,760 --> 00:14:35,200 Speaker 1: I mean, like my doneb math is like you can 294 00:14:35,240 --> 00:14:37,880 Speaker 1: charge some fees on your assets, right, and like what 295 00:14:37,960 --> 00:14:39,800 Speaker 1: kind of fees can you charge your Blue Ol or 296 00:14:39,880 --> 00:14:42,920 Speaker 1: Pushing Square or somebody like that. You can charge you 297 00:14:43,000 --> 00:14:45,320 Speaker 1: do one or two percent of assets, right, you know, 298 00:14:45,360 --> 00:14:47,320 Speaker 1: maybe a little more if you're making big performance fees. 299 00:14:47,440 --> 00:14:49,560 Speaker 1: And so if you're charging one or two percent of assets, 300 00:14:49,720 --> 00:14:52,240 Speaker 1: you capitalize that at like ten times, then the value 301 00:14:52,240 --> 00:14:53,920 Speaker 1: of the managing company is ten to twenty percent of 302 00:14:53,960 --> 00:14:57,040 Speaker 1: assets under management. So sixty percent is really big, right, 303 00:14:57,040 --> 00:14:59,760 Speaker 1: Like if you're charging six percent of assets per year, 304 00:15:00,160 --> 00:15:02,920 Speaker 1: then you can get that kind of valuation. But then 305 00:15:03,040 --> 00:15:05,480 Speaker 1: you know, if you're judging six percent of who would 306 00:15:05,480 --> 00:15:07,520 Speaker 1: pay you six percent of ethsets to run their money? 307 00:15:07,760 --> 00:15:09,320 Speaker 1: But yeah, I mean I think that the idea is 308 00:15:09,360 --> 00:15:12,880 Speaker 1: that you're comparing them to these other asset managers, but 309 00:15:13,480 --> 00:15:15,760 Speaker 1: you're baking in a lot of growth in the very 310 00:15:15,800 --> 00:15:19,400 Speaker 1: near future, which is ambitious, right, Blue Owl and Brookfield 311 00:15:19,400 --> 00:15:22,680 Speaker 1: also want to grow assets under management, but like Pushing 312 00:15:22,720 --> 00:15:26,080 Speaker 1: Square is gonna double assets under management in like six months. Okay, 313 00:15:26,280 --> 00:15:28,160 Speaker 1: maybe I do think I think that's like a little 314 00:15:28,200 --> 00:15:31,400 Speaker 1: bit fascinating about Pushing Square's business model, and like why 315 00:15:31,480 --> 00:15:33,920 Speaker 1: they think they can get a premium valuation is it's 316 00:15:33,960 --> 00:15:37,880 Speaker 1: so simple, right, Like they have one investing team, they 317 00:15:37,880 --> 00:15:40,480 Speaker 1: buy like twelve stocks, they hold them for the long term. 318 00:15:40,520 --> 00:15:43,160 Speaker 1: They're all like liquid public US stocks, so that there's 319 00:15:43,200 --> 00:15:46,560 Speaker 1: plenty of capacity. And so like Blue Owl, you're paying 320 00:15:46,560 --> 00:15:47,920 Speaker 1: a lot for a lot of people that go out 321 00:15:47,920 --> 00:15:49,840 Speaker 1: on the road and like find companies and try to 322 00:15:49,880 --> 00:15:52,480 Speaker 1: make direct loans to them, manage the credit risk, and 323 00:15:52,560 --> 00:15:55,200 Speaker 1: like the loans are constantly like maturing. You have to 324 00:15:55,200 --> 00:15:57,720 Speaker 1: find new loans. Your money is in funds that have 325 00:15:57,760 --> 00:15:59,000 Speaker 1: a limited life, and so you have to like go 326 00:15:59,080 --> 00:16:01,440 Speaker 1: raise new funds and all this stuff. And Bill Ackman 327 00:16:01,520 --> 00:16:03,080 Speaker 1: is like, I just have like this one permanent fund 328 00:16:03,200 --> 00:16:06,560 Speaker 1: or two permanent funds now, and I buy twelve stocks 329 00:16:06,560 --> 00:16:08,160 Speaker 1: and like that's it. That's the whole business. 330 00:16:08,240 --> 00:16:10,920 Speaker 2: So it's really I love that. I'm fascinated with this 331 00:16:11,040 --> 00:16:13,360 Speaker 2: investing style just because it is so simple. 332 00:16:13,520 --> 00:16:16,160 Speaker 1: Say I'm exaggerating a little bit. He has made a 333 00:16:16,160 --> 00:16:19,240 Speaker 1: lot of money doing like asymmetric derivative trades, where like 334 00:16:19,240 --> 00:16:21,920 Speaker 1: he'll pay like a little bit of money for CDX 335 00:16:22,040 --> 00:16:25,560 Speaker 1: indexes like just before COVID hits, and like make one 336 00:16:25,640 --> 00:16:28,160 Speaker 1: hundred times his money on these derivative trades. So he's 337 00:16:28,200 --> 00:16:30,040 Speaker 1: like putting some of that into the product too. So 338 00:16:30,080 --> 00:16:31,800 Speaker 1: it's a little hedge funny, but from day to day 339 00:16:31,840 --> 00:16:33,400 Speaker 1: it kind of looks like buying twelve stocks. 340 00:16:33,720 --> 00:16:36,440 Speaker 2: Yeah, I mean, I tend to think of those as 341 00:16:36,480 --> 00:16:38,800 Speaker 2: just hedges and thus don't think of them very much, 342 00:16:38,840 --> 00:16:41,320 Speaker 2: but maybe I should be thinking about them more. 343 00:16:41,520 --> 00:16:43,160 Speaker 1: Well, they are hedges, but like you know, if you 344 00:16:43,240 --> 00:16:45,640 Speaker 1: buy the S and P five hundred, you're not getting 345 00:16:45,640 --> 00:16:48,000 Speaker 1: those hedges, right, This is true. What you're getting here 346 00:16:48,080 --> 00:16:51,960 Speaker 1: is exposure to large cab us stocks plus some hedging 347 00:16:52,000 --> 00:16:53,960 Speaker 1: for bad situations, which is like you know, which is 348 00:16:53,960 --> 00:16:54,800 Speaker 1: a hedgehun product. 349 00:16:55,200 --> 00:16:58,960 Speaker 2: I do really just find the simplicity, though, really appealing, 350 00:16:58,960 --> 00:17:01,680 Speaker 2: and it's something that's coming a little bit back in vogue. 351 00:17:02,000 --> 00:17:04,040 Speaker 2: If you think about what's really hot in the ETF 352 00:17:04,080 --> 00:17:06,560 Speaker 2: world where I live, you have all these income products, 353 00:17:06,640 --> 00:17:10,040 Speaker 2: these very options overlay products, and then you have just 354 00:17:10,880 --> 00:17:15,040 Speaker 2: super concentrated equity ETFs that are launching with greater and 355 00:17:15,080 --> 00:17:17,720 Speaker 2: greater frequency because I don't know, it feels like a 356 00:17:17,720 --> 00:17:20,320 Speaker 2: while we swung into at least in the ETF world, 357 00:17:20,520 --> 00:17:24,840 Speaker 2: like these basically closet indexing type active funds. Now people 358 00:17:24,840 --> 00:17:27,720 Speaker 2: are just going super active because they found out that's 359 00:17:27,720 --> 00:17:30,520 Speaker 2: actually a really hard way to beat the benchmark. But 360 00:17:30,800 --> 00:17:34,119 Speaker 2: I mean it kind of always mixes my brain up 361 00:17:34,160 --> 00:17:36,120 Speaker 2: a little bit that, like, you have a hedge fund 362 00:17:36,600 --> 00:17:39,320 Speaker 2: that is going public, and I know there's a few 363 00:17:39,359 --> 00:17:45,000 Speaker 2: examples of that, but if you're an equity investor in pershing, 364 00:17:45,320 --> 00:17:48,479 Speaker 2: I feel like you're just buying a stock with a 365 00:17:48,560 --> 00:17:51,199 Speaker 2: ton of key Man risk and that doesn't make a 366 00:17:51,200 --> 00:17:52,000 Speaker 2: ton of sense to me. 367 00:17:52,600 --> 00:17:54,760 Speaker 1: You definitely are. I mean, it's interesting because like you're 368 00:17:54,760 --> 00:17:57,080 Speaker 1: making two baths, right, What is the business model of 369 00:17:57,080 --> 00:18:00,000 Speaker 1: Pershing compared to other hedgehunt firms? Is very appealing because 370 00:18:00,560 --> 00:18:02,280 Speaker 1: all their money is really locked up, you know. It's 371 00:18:02,280 --> 00:18:04,560 Speaker 1: the Pershing Squareholdings closed on fund in Europe and then 372 00:18:04,600 --> 00:18:08,840 Speaker 1: this anticipated fund in the US, which are permanent capital vehicles, 373 00:18:08,960 --> 00:18:12,000 Speaker 1: like the money can't go away and their revenue comes 374 00:18:12,040 --> 00:18:15,080 Speaker 1: mostly from management fees. Right, So, like investors are very 375 00:18:15,119 --> 00:18:17,760 Speaker 1: nervous about paying for incentive fees for hedge funds because 376 00:18:17,800 --> 00:18:19,840 Speaker 1: like the fund has a bad year, it doesn't earn 377 00:18:19,840 --> 00:18:21,879 Speaker 1: any incentive fees, right. Like, if you're buying a management 378 00:18:21,880 --> 00:18:23,680 Speaker 1: company that makes a lot of money on incentive fees, 379 00:18:23,880 --> 00:18:26,000 Speaker 1: you value those at kind of a low multiple because 380 00:18:26,160 --> 00:18:27,960 Speaker 1: you can't be sure they're going to be consistent from 381 00:18:28,000 --> 00:18:30,080 Speaker 1: your dear Krishan Square is like you're gonna make all 382 00:18:30,080 --> 00:18:32,200 Speaker 1: its money on like two percent management fees. So it's 383 00:18:32,320 --> 00:18:35,159 Speaker 1: very consistent revenue on very locked up money. So on 384 00:18:35,200 --> 00:18:36,880 Speaker 1: the one hand, it's like a very safe bet, right. 385 00:18:37,200 --> 00:18:39,080 Speaker 1: But the other thing you're buying is like Bill Ackman 386 00:18:39,119 --> 00:18:41,680 Speaker 1: as a person, right, and you're buying like his ability 387 00:18:41,720 --> 00:18:43,800 Speaker 1: to go raise twenty five million dollars, which again, is 388 00:18:43,840 --> 00:18:46,800 Speaker 1: like really ambitious. Right again, Like every other investment firm 389 00:18:46,800 --> 00:18:48,760 Speaker 1: would love to double their assets next year, but like 390 00:18:49,240 --> 00:18:52,040 Speaker 1: Bill Ackman is selling his ability to double his assets 391 00:18:52,200 --> 00:18:54,399 Speaker 1: to investors, right, And I agree, it's a lot of 392 00:18:54,480 --> 00:18:57,280 Speaker 1: keymand risk. It's like there's like kind of a memestock 393 00:18:57,400 --> 00:18:59,680 Speaker 1: vibe to it, where like you're buying this guy who 394 00:18:59,760 --> 00:19:03,640 Speaker 1: is like a financial celebrity, who's on Twitter, who's on television, 395 00:19:03,960 --> 00:19:06,240 Speaker 1: his personal life is in the news, you know, like 396 00:19:06,280 --> 00:19:08,359 Speaker 1: a guy who has a lot of retail appeal and 397 00:19:08,400 --> 00:19:10,720 Speaker 1: who's like very explicitly marketing that as part of the 398 00:19:10,720 --> 00:19:13,760 Speaker 1: business proposition. So yeah, like that's what people are investing in, 399 00:19:13,840 --> 00:19:15,920 Speaker 1: is like his ability to like monetize that celebrity to 400 00:19:16,000 --> 00:19:18,080 Speaker 1: raise a lot of money. But yeah, like what if 401 00:19:18,080 --> 00:19:21,280 Speaker 1: he gets bored? His number two is not the same celebrity. 402 00:19:21,320 --> 00:19:25,200 Speaker 1: If you're not getting like a super institutional asset manager, 403 00:19:25,240 --> 00:19:28,320 Speaker 1: you're getting like kind of one guy, yeah, which again 404 00:19:28,400 --> 00:19:31,080 Speaker 1: is cheap compared to like you know, you're picking twelve stocks. 405 00:19:31,119 --> 00:19:33,000 Speaker 1: That sort of cost structure is fairly lean, but like 406 00:19:33,040 --> 00:19:34,919 Speaker 1: you are relying a lot on him continuing to do 407 00:19:34,960 --> 00:19:36,639 Speaker 1: it and his celebrity continuing to work. 408 00:19:37,280 --> 00:19:39,199 Speaker 2: Let's talk a little bit more about close end funds, 409 00:19:39,400 --> 00:19:43,119 Speaker 2: the close end funds specifically, you mentioned the European one. 410 00:19:43,280 --> 00:19:46,720 Speaker 2: The European one is really interesting because it's actually done 411 00:19:46,880 --> 00:19:50,840 Speaker 2: super well. It's returned fifty percent over the past year. 412 00:19:51,320 --> 00:19:54,520 Speaker 2: But the discount, it's trading a twenty five percent discount, 413 00:19:54,520 --> 00:19:57,399 Speaker 2: and I have to say, I don't super understand why. 414 00:19:57,640 --> 00:19:59,320 Speaker 2: I mean, if you look at some of these UNI 415 00:19:59,720 --> 00:20:03,440 Speaker 2: ceas and other ones, I sort of get it with 416 00:20:03,720 --> 00:20:06,520 Speaker 2: performance like this, I don't quite understand why it's trading 417 00:20:06,560 --> 00:20:07,600 Speaker 2: it's such a big discount. 418 00:20:08,280 --> 00:20:11,720 Speaker 1: I don't fully understand the European tax situation. I've been 419 00:20:11,760 --> 00:20:14,520 Speaker 1: told there is some tax overhang and that's part of 420 00:20:14,560 --> 00:20:17,040 Speaker 1: the discount. I'm not sure if that's true. I think 421 00:20:17,040 --> 00:20:19,680 Speaker 1: that the traditional explanation for closed them fund discounts is 422 00:20:19,720 --> 00:20:21,840 Speaker 1: often fees. Right, Like you know again, it has like 423 00:20:21,880 --> 00:20:25,000 Speaker 1: a fairly small portfolio of fairly long term holdings and 424 00:20:25,040 --> 00:20:28,239 Speaker 1: fairly liquid stocks. If you look at that portfolio, you 425 00:20:28,240 --> 00:20:31,359 Speaker 1: could replicate it. You just buy the twelve stocks. You 426 00:20:31,359 --> 00:20:33,600 Speaker 1: would get the discount buying those twelve stocks, but you 427 00:20:33,640 --> 00:20:36,720 Speaker 1: also wouldn't pay Pershing Square any fees for owning the 428 00:20:36,720 --> 00:20:38,880 Speaker 1: twelve stocks, right, you just own the twelve stocks directly, 429 00:20:39,119 --> 00:20:41,960 Speaker 1: So the fees eat into the value of the fund 430 00:20:42,280 --> 00:20:44,720 Speaker 1: and explain part of the discount. The other thing that 431 00:20:44,800 --> 00:20:48,240 Speaker 1: I think sort of explains the discount is just investors inventation. Like, 432 00:20:48,280 --> 00:20:52,720 Speaker 1: as I said, it is hard to buy Pershing Square 433 00:20:52,760 --> 00:20:55,720 Speaker 1: holdings if you're a US retail investor. It's got some 434 00:20:55,760 --> 00:20:58,640 Speaker 1: weird tax attributes and they can't market it, and it's 435 00:20:58,640 --> 00:20:59,959 Speaker 1: just like you know, you can like find on your own, 436 00:21:00,240 --> 00:21:01,400 Speaker 1: but it's not a thing that a lot of US 437 00:21:01,440 --> 00:21:05,360 Speaker 1: investors buy, and it's otherwise like very US centric, Right, 438 00:21:05,359 --> 00:21:07,640 Speaker 1: It's like a guy who's a celebrity in the US, 439 00:21:07,640 --> 00:21:10,800 Speaker 1: who tweets in the US and who invests in US companies, 440 00:21:11,000 --> 00:21:14,960 Speaker 1: So like who's going to buy Pershing Square holdings in Europe? 441 00:21:15,160 --> 00:21:17,439 Speaker 1: It's like open to European investors, but it's otherwise targeted 442 00:21:17,520 --> 00:21:19,480 Speaker 1: very much to the US. So I think that's part 443 00:21:19,480 --> 00:21:21,960 Speaker 1: of it, is like it's just not the most attractive product. 444 00:21:22,240 --> 00:21:25,520 Speaker 1: And clearly pushing squares hope is that when they do, 445 00:21:26,040 --> 00:21:28,400 Speaker 1: you know, kind of the same product. Pushing square US 446 00:21:28,440 --> 00:21:30,960 Speaker 1: is not that different from pushing scare holdings, but when 447 00:21:30,960 --> 00:21:33,119 Speaker 1: they do that product in the US, and like market 448 00:21:33,160 --> 00:21:36,080 Speaker 1: it very heavily to US investors. They will get a 449 00:21:36,080 --> 00:21:38,280 Speaker 1: lot of US investors, and it will not trade at a discount. 450 00:21:38,400 --> 00:21:40,080 Speaker 1: If you ask them, I think they will hope that 451 00:21:40,119 --> 00:21:41,960 Speaker 1: it will trade it a premium because people will be 452 00:21:42,000 --> 00:21:44,600 Speaker 1: so excited to Bill Ackman manage their money that they'll 453 00:21:44,600 --> 00:21:46,880 Speaker 1: pay more than the net ass and value for the fund. 454 00:21:46,880 --> 00:21:49,399 Speaker 2: But we'll see, it'd be great to ask Bill Ackman that. 455 00:21:49,840 --> 00:21:53,439 Speaker 2: But to that point, I do wonder once the US 456 00:21:53,480 --> 00:21:56,439 Speaker 2: fund launches, who would buy the European fund other than 457 00:21:56,480 --> 00:21:58,520 Speaker 2: Europeans of course. I mean, if you think about the 458 00:21:58,520 --> 00:22:01,680 Speaker 2: difference in the fees. Right now, the European one charges 459 00:22:01,880 --> 00:22:04,280 Speaker 2: a one point five percent management fee and a sixteen 460 00:22:04,320 --> 00:22:07,280 Speaker 2: percent performance fee. You think about what the US one 461 00:22:07,359 --> 00:22:09,480 Speaker 2: is going to charge, and it's just a two percent 462 00:22:09,520 --> 00:22:12,960 Speaker 2: management fee. So it's free for the first year. Yeah, 463 00:22:13,000 --> 00:22:15,000 Speaker 2: so it's clear what the better product is. 464 00:22:15,440 --> 00:22:17,639 Speaker 1: Yeah. I mean, like, part of the reason I think 465 00:22:17,720 --> 00:22:20,879 Speaker 1: that they originally did this fund in Europe is that 466 00:22:21,040 --> 00:22:23,840 Speaker 1: you can't really charge performance fees on a publicly listed 467 00:22:23,960 --> 00:22:26,560 Speaker 1: goes on fund in the US, and so that's why 468 00:22:26,600 --> 00:22:28,840 Speaker 1: this will not charge performance fees. But also like you 469 00:22:28,880 --> 00:22:32,080 Speaker 1: think about it with the IPO, like, performance fees are 470 00:22:32,200 --> 00:22:34,840 Speaker 1: bad for public investors in the management company, right, Like 471 00:22:35,040 --> 00:22:36,840 Speaker 1: they don't describe a lout of value to those performance 472 00:22:36,840 --> 00:22:39,880 Speaker 1: fees because they fluctuate. So if you're thinking about taking 473 00:22:39,880 --> 00:22:43,000 Speaker 1: your management company public, you're less excited about the performance 474 00:22:43,000 --> 00:22:44,720 Speaker 1: fees and you're more willing to just sort of do 475 00:22:44,800 --> 00:22:47,240 Speaker 1: it for a flat two percent because that's what investors 476 00:22:47,240 --> 00:22:47,719 Speaker 1: will pay for. 477 00:22:48,440 --> 00:22:51,200 Speaker 2: So if you think about the actual Pershing Square IPO, 478 00:22:51,320 --> 00:22:53,800 Speaker 2: I mean that's not happening for a while, but the 479 00:22:53,880 --> 00:22:57,080 Speaker 2: US closed fund could become a reality pretty soon, like 480 00:22:57,119 --> 00:22:58,920 Speaker 2: in the next couple months or so. 481 00:22:59,000 --> 00:23:01,280 Speaker 1: Let me ask you, as a kind of seroquas and funds, 482 00:23:01,280 --> 00:23:04,000 Speaker 1: do you think they will raise twenty five billion dollars? 483 00:23:04,320 --> 00:23:07,560 Speaker 2: I don't know. Actually, there was an interesting lot of money. 484 00:23:07,800 --> 00:23:11,640 Speaker 2: It's a lot of money. But I mean Bloombery Intelligence 485 00:23:11,640 --> 00:23:14,960 Speaker 2: had to report out this week and didn't downplay that 486 00:23:15,040 --> 00:23:16,719 Speaker 2: number at all. I mean, you think about the size 487 00:23:16,720 --> 00:23:21,440 Speaker 2: of some of the most retail friendly ETFs, and I 488 00:23:21,520 --> 00:23:24,720 Speaker 2: think twenty five billion could be possible. Yeah, I mean 489 00:23:24,760 --> 00:23:27,159 Speaker 2: think about Kathy Wood for example. She doesn't manage that 490 00:23:27,280 --> 00:23:29,959 Speaker 2: much money now, but I mean she got in the 491 00:23:30,000 --> 00:23:33,560 Speaker 2: forty billion dollar range. Also, for all the shade that 492 00:23:33,560 --> 00:23:36,639 Speaker 2: we just threw on the European Clothes End Fund, it 493 00:23:36,720 --> 00:23:40,439 Speaker 2: has fifteen point three billion dollars in Europe, so I 494 00:23:40,440 --> 00:23:42,639 Speaker 2: guess twenty five billion dollars in the US. Putting it 495 00:23:42,640 --> 00:23:44,840 Speaker 2: through that lens looks very realistic. 496 00:23:45,359 --> 00:23:47,600 Speaker 1: Yeah, I mean I think that's right. I mean, manage 497 00:23:47,600 --> 00:23:49,120 Speaker 1: a lot of money, and he has a good track record, 498 00:23:49,200 --> 00:23:50,800 Speaker 1: and so yeah, why I shouldn't be able to raise 499 00:23:50,800 --> 00:24:10,920 Speaker 1: twenty five billion dollars? So I want to do a 500 00:24:10,960 --> 00:24:14,840 Speaker 1: weird transition here, Yeah, do it. At some point in 501 00:24:14,880 --> 00:24:19,440 Speaker 1: the last few months, people started sending me Instagram ads 502 00:24:19,920 --> 00:24:24,520 Speaker 1: for Bill Ackman's investing masterclass or his investing newsletter or 503 00:24:24,520 --> 00:24:27,119 Speaker 1: something where you'd sign up and it's like, I'm Bill Ackman. 504 00:24:27,200 --> 00:24:29,440 Speaker 1: I picked all these great stocks, and I can teach 505 00:24:29,520 --> 00:24:31,480 Speaker 1: you how to pick all these great stacks. People kept 506 00:24:31,480 --> 00:24:33,240 Speaker 1: sending me these being like, look at what Bill Ackman 507 00:24:33,280 --> 00:24:35,960 Speaker 1: is saying. These are obviously fake, Like these are completely 508 00:24:35,960 --> 00:24:37,320 Speaker 1: obviously fake, Like. 509 00:24:37,359 --> 00:24:39,000 Speaker 2: His eyes were yees. 510 00:24:40,359 --> 00:24:43,160 Speaker 1: No, no, they were real pictures of Bill Ackman taken 511 00:24:43,240 --> 00:24:46,640 Speaker 1: from the Internet and used to market a fake Bill 512 00:24:46,680 --> 00:24:48,600 Speaker 1: Ackman newsletter product. I didn't click on them, so I 513 00:24:48,640 --> 00:24:50,000 Speaker 1: don't know what the product is. I don't know like 514 00:24:50,040 --> 00:24:52,359 Speaker 1: what the scam is exactly. But someone is like, I'm 515 00:24:52,400 --> 00:24:54,639 Speaker 1: going to like pretend that Bill Ackman is starting an 516 00:24:54,680 --> 00:24:56,560 Speaker 1: investing newsletter. I'm gonna get people to send me their 517 00:24:56,560 --> 00:24:58,520 Speaker 1: credit card to like sign up for this newsletter. And 518 00:24:58,640 --> 00:25:01,240 Speaker 1: they bought Instagram ads, saying I always thought these were 519 00:25:01,280 --> 00:25:03,480 Speaker 1: like super obvious fakes. I think I actually saw it 520 00:25:03,520 --> 00:25:05,080 Speaker 1: like they were served to me on Instagram. But then 521 00:25:05,080 --> 00:25:06,840 Speaker 1: people send them to me, but they're just they're fake. 522 00:25:07,320 --> 00:25:11,560 Speaker 1: This week I have gotten several people sending me Instagram 523 00:25:11,600 --> 00:25:16,840 Speaker 1: ads for Keith Gill oh right kiddy starting an investing 524 00:25:16,880 --> 00:25:20,159 Speaker 1: masterclass or newsletter or what have you. I'm also fairly 525 00:25:20,160 --> 00:25:23,000 Speaker 1: confident those are a fake. And the reason I'm confident 526 00:25:23,080 --> 00:25:27,720 Speaker 1: those are fake is that anyone, almost anyone, not literally anyone, 527 00:25:27,720 --> 00:25:31,719 Speaker 1: but almost anyone who's selling you an investing class or 528 00:25:31,760 --> 00:25:34,439 Speaker 1: like a stock picking newsletter, you should ask the question, 529 00:25:35,200 --> 00:25:37,800 Speaker 1: if they're so good at picking stocks, why aren't they 530 00:25:37,880 --> 00:25:40,359 Speaker 1: just making a lot of money picking stocks? Why do 531 00:25:40,400 --> 00:25:43,840 Speaker 1: they need my forty nine ninety five for this investing newsletter? 532 00:25:44,040 --> 00:25:46,240 Speaker 1: And like Bill Ackman, Yeah, it's like a billionaire running 533 00:25:46,240 --> 00:25:48,239 Speaker 1: a hedge funt. He doesn't need your forty nine ninety five. 534 00:25:48,280 --> 00:25:50,800 Speaker 1: That's why you know that Bill Ackman investing ads are fake. 535 00:25:51,080 --> 00:25:55,320 Speaker 1: But Keith gil he has like three hundred million dollars 536 00:25:55,720 --> 00:25:58,520 Speaker 1: trading game stop stock. He does not need your money. 537 00:25:58,600 --> 00:26:01,560 Speaker 1: He is not starting an investing newsletter. He is, however, 538 00:26:02,880 --> 00:26:05,280 Speaker 1: going on YouTube to do a live stream to talk 539 00:26:05,320 --> 00:26:10,119 Speaker 1: about Gamstop at noon on Friday, June seventh, which is 540 00:26:11,080 --> 00:26:15,200 Speaker 1: unfortunately after we record this podcast, before we release this podcast. 541 00:26:15,280 --> 00:26:17,760 Speaker 1: So for the time you hear this, Keith gill will 542 00:26:17,800 --> 00:26:20,200 Speaker 1: have said something newsworthy that we haven't talked about. 543 00:26:20,240 --> 00:26:24,000 Speaker 2: So here's an instance where time just really becomes a concept. 544 00:26:24,240 --> 00:26:26,680 Speaker 1: You know, I know, right this podcast is meant to 545 00:26:26,720 --> 00:26:29,960 Speaker 1: feel timeless and unchanging, but in fact we're recording it 546 00:26:29,960 --> 00:26:32,320 Speaker 1: before Keith gill s has some stuff on YouTube and 547 00:26:32,400 --> 00:26:33,280 Speaker 1: releasing it afterwards. 548 00:26:33,359 --> 00:26:36,560 Speaker 2: Sorry, all we can definitively say about the. 549 00:26:37,040 --> 00:26:38,840 Speaker 1: That was a transition. Now we're talking about Keith kill. 550 00:26:39,520 --> 00:26:41,840 Speaker 2: That was actually I throwd at that needle quite while 551 00:26:41,880 --> 00:26:42,679 Speaker 2: I was a little nervous. 552 00:26:43,080 --> 00:26:45,000 Speaker 1: I think it's interesting, like there's the two that I've seen, 553 00:26:45,119 --> 00:26:48,920 Speaker 1: like fake investing newsletters have been Blackman and Keith kill. 554 00:26:49,000 --> 00:26:50,639 Speaker 1: Maybe there was one for Warren Buffett years ago and 555 00:26:50,680 --> 00:26:52,040 Speaker 1: I just missed it. But those are the guys. 556 00:26:52,320 --> 00:26:55,080 Speaker 2: Yeah, those are the guys to do it. I'm really 557 00:26:55,119 --> 00:26:57,720 Speaker 2: interested to see the Keith Gill live stream at twelve pm. 558 00:26:57,760 --> 00:27:00,159 Speaker 2: All we can totally say about it right now is 559 00:27:00,160 --> 00:27:03,720 Speaker 2: that it will put to bed whether or not the 560 00:27:03,800 --> 00:27:06,280 Speaker 2: posts that we've been getting from Roaring Kitty have actually 561 00:27:06,320 --> 00:27:10,160 Speaker 2: been Keith Gill, whether it truly has been him posting, can. 562 00:27:09,960 --> 00:27:11,760 Speaker 1: You think a step back? So I don't know, Keith 563 00:27:11,760 --> 00:27:14,920 Speaker 1: Gill should be interested. Yeah, we've said one it before, 564 00:27:14,960 --> 00:27:18,080 Speaker 1: but he's the guy who started the GameStop frenzy in 565 00:27:18,119 --> 00:27:20,520 Speaker 1: like January twenty twenty one. He was like a guy 566 00:27:20,560 --> 00:27:22,920 Speaker 1: who got long game stop and said I like the stock, 567 00:27:23,200 --> 00:27:25,880 Speaker 1: and he would do these like four hour YouTube videos 568 00:27:25,880 --> 00:27:28,719 Speaker 1: about why he thought GameStop was an undervalued business. And 569 00:27:28,760 --> 00:27:31,320 Speaker 1: then when GameStop had a huge rally in January twenty 570 00:27:31,320 --> 00:27:33,200 Speaker 1: twenty one, he was like the sort of patron saint 571 00:27:33,240 --> 00:27:36,040 Speaker 1: of that and got a lot of media attention. And 572 00:27:36,080 --> 00:27:38,919 Speaker 1: then last month he tweeted some weird stuff he treated 573 00:27:38,960 --> 00:27:41,879 Speaker 1: like a cartoon, and then he treated some video clips 574 00:27:42,359 --> 00:27:46,760 Speaker 1: and GameStop stock came just roaring back a huge rally. 575 00:27:47,320 --> 00:27:52,080 Speaker 1: Then he like posted on Redda his trade account back 576 00:27:52,080 --> 00:27:54,320 Speaker 1: in twenty twenty one. He would like periodically post his 577 00:27:54,400 --> 00:27:56,560 Speaker 1: game stop positions and how much money he had made 578 00:27:56,720 --> 00:27:58,760 Speaker 1: and how he was holding them. And he posted that 579 00:27:58,920 --> 00:28:01,760 Speaker 1: last week, and it was hundreds of millions of dollars 580 00:28:01,760 --> 00:28:04,720 Speaker 1: of game stop stocking options. And at one point Bloomberg 581 00:28:04,760 --> 00:28:07,240 Speaker 1: calculated that he had a portfolio worth like three hundred 582 00:28:07,240 --> 00:28:10,800 Speaker 1: million dollars of game Stop And so he's back, as 583 00:28:10,840 --> 00:28:14,960 Speaker 1: you say, he's gonna do a video thing where we'll 584 00:28:15,000 --> 00:28:20,240 Speaker 1: see him, and unless AI has advanced tremendously, we will 585 00:28:20,280 --> 00:28:21,960 Speaker 1: know if Keith Gill has actually been on this account, 586 00:28:21,960 --> 00:28:23,679 Speaker 1: which I think we already do. Like I think there 587 00:28:23,680 --> 00:28:26,639 Speaker 1: were a lot of rumors when he came back, because 588 00:28:26,640 --> 00:28:29,560 Speaker 1: he was just tweeting inscrutable stuff. They were rumors that 589 00:28:29,640 --> 00:28:31,879 Speaker 1: like someone had like bought or hacked his account and 590 00:28:32,000 --> 00:28:34,320 Speaker 1: someone else was doing this and it wasn't really him, 591 00:28:34,720 --> 00:28:36,680 Speaker 1: and this was all like some sort of weird fake out. 592 00:28:37,040 --> 00:28:39,520 Speaker 1: And I think that now we know that's not true. 593 00:28:40,240 --> 00:28:43,320 Speaker 1: Because there was a Wall Street Journal story about e 594 00:28:43,520 --> 00:28:47,880 Speaker 1: Trade getting increasingly nervous about his trading because they worry 595 00:28:47,880 --> 00:28:51,000 Speaker 1: that it's market manipulation. And if he trade is worried 596 00:28:51,040 --> 00:28:53,280 Speaker 1: A had his trading, they do KYC. They know who 597 00:28:53,360 --> 00:28:55,640 Speaker 1: is trading it, right, And so if they know what 598 00:28:55,640 --> 00:28:57,880 Speaker 1: his portfolio looks like and he's posting that portfolio, then 599 00:28:57,920 --> 00:28:59,760 Speaker 1: like that means this is all real, this is actually 600 00:28:59,800 --> 00:29:02,280 Speaker 1: his Twitter actually has read it, and now we'll see 601 00:29:02,320 --> 00:29:03,200 Speaker 1: him tomorrow on YouTube. 602 00:29:03,320 --> 00:29:05,720 Speaker 2: Can I tell you how tired I was when I 603 00:29:05,760 --> 00:29:08,640 Speaker 2: saw those headlines that you Trade might kick him off. 604 00:29:09,360 --> 00:29:14,360 Speaker 2: I know it's just conspiracy theory fodder. It's reasonable that 605 00:29:14,400 --> 00:29:17,000 Speaker 2: people would make conspiracy theories out of that, Like didn't 606 00:29:17,040 --> 00:29:19,240 Speaker 2: anyone at e Trade watch dumb money? 607 00:29:19,720 --> 00:29:22,280 Speaker 1: Well, I mean to be clear, Like that's the debate 608 00:29:22,320 --> 00:29:24,680 Speaker 1: they're having. They're like, on the one hand, we worried 609 00:29:24,720 --> 00:29:27,600 Speaker 1: that he's committing market untilation. On the other hand, we're 610 00:29:27,640 --> 00:29:29,600 Speaker 1: going to get so much flak if we kick him 611 00:29:29,600 --> 00:29:32,200 Speaker 1: off for a platform. So I mean like, ordinarily, if 612 00:29:32,200 --> 00:29:35,360 Speaker 1: you're like some guy, some retail trader might be committing 613 00:29:35,360 --> 00:29:37,840 Speaker 1: market reutilation, but we're not sure that the charges would stick, 614 00:29:37,960 --> 00:29:39,800 Speaker 1: You're like, yeah, who cares kick him off? What does 615 00:29:39,840 --> 00:29:41,320 Speaker 1: it hurt you? But you don't want to skate too 616 00:29:41,320 --> 00:29:43,520 Speaker 1: close to the regulatory line if you're a big broker dealer. 617 00:29:43,520 --> 00:29:45,200 Speaker 1: But with Keith Gill, if you kick him off, it's 618 00:29:45,240 --> 00:29:47,040 Speaker 1: going to be a real firestarman. So I think you 619 00:29:47,080 --> 00:29:49,600 Speaker 1: know so far they haven't. By the way, the controversy 620 00:29:49,600 --> 00:29:52,160 Speaker 1: about him being a market manipulator, I find it's a 621 00:29:52,200 --> 00:29:53,160 Speaker 1: little strange. 622 00:29:53,440 --> 00:29:55,720 Speaker 2: Yeah. Well, I was just going to say, I'm so 623 00:29:55,920 --> 00:29:58,120 Speaker 2: drilled and grateful to be doing this podcast with you, 624 00:29:58,160 --> 00:30:02,040 Speaker 2: because on Twitter after he posted some of those screenshots, 625 00:30:02,240 --> 00:30:04,600 Speaker 2: I saw a few different tweets to the effect of 626 00:30:05,080 --> 00:30:08,040 Speaker 2: I won't be saying how I feel about this until 627 00:30:08,120 --> 00:30:10,920 Speaker 2: Matt Levin tells me how to feel. So tell us 628 00:30:10,920 --> 00:30:13,280 Speaker 2: how you feel about market manipulation and whether Keith Gill 629 00:30:13,560 --> 00:30:15,040 Speaker 2: is manipulating markets. 630 00:30:15,600 --> 00:30:18,760 Speaker 1: I mean, I love him, like how many I said. 631 00:30:20,520 --> 00:30:21,440 Speaker 2: I love it? 632 00:30:21,480 --> 00:30:24,760 Speaker 1: So I wonder I want to quote a few things. 633 00:30:24,960 --> 00:30:27,760 Speaker 1: There's another journal article about like the gist of it 634 00:30:27,840 --> 00:30:30,120 Speaker 1: is like everyone is running around like chickens with their 635 00:30:30,160 --> 00:30:31,720 Speaker 1: heads cut off because they don't know if this is 636 00:30:31,720 --> 00:30:34,000 Speaker 1: market maniplation and they don't know like what the rules are. 637 00:30:34,280 --> 00:30:36,800 Speaker 1: So they quote Matt Staller, who's a sort of left 638 00:30:36,880 --> 00:30:41,360 Speaker 1: wing journalist and market analyst, saying this is obviously market manipulation. 639 00:30:41,480 --> 00:30:44,120 Speaker 1: I can't believe we're even having this conversation. If market 640 00:30:44,160 --> 00:30:46,720 Speaker 1: manipulation law doesn't handle this, then what's it for? 641 00:30:47,200 --> 00:30:48,840 Speaker 2: Which is like, what is it for? 642 00:30:49,760 --> 00:30:52,680 Speaker 1: I mean, like to me, like market inguilation is like 643 00:30:53,160 --> 00:30:55,760 Speaker 1: if you move a stock by doing something deceptive. And 644 00:30:55,800 --> 00:30:58,120 Speaker 1: the thing about Keith kill is that he's definitely moving stock. 645 00:30:58,160 --> 00:31:00,760 Speaker 1: He's definitely like when he tweets, the price of game 646 00:31:00,760 --> 00:31:03,400 Speaker 1: slop stock goes up, and it's definitely like not for 647 00:31:03,400 --> 00:31:06,520 Speaker 1: any fundamental reason, you know, it's definitely like his fans 648 00:31:06,560 --> 00:31:08,880 Speaker 1: and his followers are buying the stock because he's tweeting 649 00:31:08,920 --> 00:31:11,160 Speaker 1: about it. But none of them were deceived, right, none 650 00:31:11,200 --> 00:31:13,880 Speaker 1: of them are being lied to. There's no deception guy on. 651 00:31:14,000 --> 00:31:15,600 Speaker 1: So I don't think it's manipulation. I think it's just 652 00:31:15,640 --> 00:31:18,720 Speaker 1: this mysterious new thing. It's like coordination, right, Like people 653 00:31:18,760 --> 00:31:20,560 Speaker 1: are having fun with their friends. There's like the social 654 00:31:20,600 --> 00:31:24,160 Speaker 1: elements to like all buying game Stop together, and when 655 00:31:24,800 --> 00:31:27,800 Speaker 1: Keith Gill tweets, that's the thing that makes everyone like 656 00:31:27,960 --> 00:31:32,160 Speaker 1: go buy the game Stop together. It is strange. It 657 00:31:32,280 --> 00:31:34,720 Speaker 1: is a way of moving stock prices that has nothing 658 00:31:34,760 --> 00:31:37,320 Speaker 1: to do with the fundamental value of the cash flows. 659 00:31:37,760 --> 00:31:41,280 Speaker 1: But marketmunification laws about using deceptive devices, and there's no 660 00:31:41,360 --> 00:31:44,160 Speaker 1: deception going on here. It's weird if you're like a 661 00:31:44,200 --> 00:31:47,560 Speaker 1: fundamental investor who wants to buy game Stop at a 662 00:31:47,560 --> 00:31:49,840 Speaker 1: reasonable price or wants to be able to short game 663 00:31:49,880 --> 00:31:51,400 Speaker 1: Stop if he gets too high and or worried about 664 00:31:51,440 --> 00:31:54,360 Speaker 1: being blown up, you know, it's like bad for market efficiency. 665 00:31:54,680 --> 00:31:57,360 Speaker 1: But the stock market rules are not about market efficiency. 666 00:31:57,400 --> 00:32:00,000 Speaker 1: They're about honesty, and like usually those things kind of 667 00:32:00,080 --> 00:32:02,800 Speaker 1: work together, and so if you're not lying about a stock, 668 00:32:02,840 --> 00:32:04,720 Speaker 1: the stock will probably come to the correct price. But 669 00:32:04,840 --> 00:32:07,120 Speaker 1: Keith Gill has discovered this mysterious new thing where like 670 00:32:07,360 --> 00:32:09,320 Speaker 1: you cannot lie about a stock but still make the 671 00:32:09,360 --> 00:32:12,920 Speaker 1: price not be correct. So I don't know. I don't 672 00:32:12,920 --> 00:32:15,160 Speaker 1: think it's market mutilation, but I understand why people get 673 00:32:15,160 --> 00:32:15,680 Speaker 1: mad about it. 674 00:32:16,040 --> 00:32:16,400 Speaker 2: Yeah. 675 00:32:16,560 --> 00:32:18,520 Speaker 1: I also from that same article, I want to quote 676 00:32:18,520 --> 00:32:21,080 Speaker 1: another complaint. So Jake Clayton, who's through the chairman of 677 00:32:21,080 --> 00:32:23,560 Speaker 1: the sec the Journal, says that he suggested in an 678 00:32:23,600 --> 00:32:26,760 Speaker 1: interview that Gil should publicly answer questions about his trading. 679 00:32:27,000 --> 00:32:30,240 Speaker 1: Such questions include is he working with anyone else? How 680 00:32:30,280 --> 00:32:33,240 Speaker 1: did Gil an individual investor finance his purchases of game 681 00:32:33,280 --> 00:32:35,480 Speaker 1: Stop shares? Has he hedged any of his bets on 682 00:32:35,560 --> 00:32:39,200 Speaker 1: game Stop? And what are his ultimate intentions? And it's like, yeah, 683 00:32:39,200 --> 00:32:40,920 Speaker 1: I understand why you want to hear all that, but 684 00:32:41,000 --> 00:32:43,200 Speaker 1: he actually doesn't have any obligation to do that. There 685 00:32:43,240 --> 00:32:45,960 Speaker 1: are actual disclosure rules about who has to disclose what 686 00:32:46,040 --> 00:32:48,160 Speaker 1: about a stock, and he hasn't triggered any of those 687 00:32:48,160 --> 00:32:51,000 Speaker 1: disclosure rules. He's not an institutional investor, he's not above 688 00:32:51,000 --> 00:32:53,360 Speaker 1: five percent of the stock. He's like getting there, you know, 689 00:32:53,440 --> 00:32:55,640 Speaker 1: He's just like a guy buying stock. There's no rule 690 00:32:55,640 --> 00:32:58,200 Speaker 1: that says he has to answer your questions about his intentions. 691 00:32:58,400 --> 00:33:00,920 Speaker 1: It's like driving people crazy because it is not covered 692 00:33:00,920 --> 00:33:03,040 Speaker 1: by the rules, and everyone has this intuition that there's 693 00:33:03,040 --> 00:33:05,920 Speaker 1: something wrong about it. But it's technically fun boy. Is 694 00:33:05,920 --> 00:33:06,840 Speaker 1: that not legal advice? 695 00:33:06,880 --> 00:33:10,480 Speaker 2: But I mean, in his own words, he just likes 696 00:33:10,520 --> 00:33:10,880 Speaker 2: the stock. 697 00:33:11,160 --> 00:33:13,040 Speaker 1: Well, he hasn't said maybe he'll say that on this 698 00:33:13,120 --> 00:33:15,720 Speaker 1: YouTube lave Ship. Yeah he said that like two years ago, 699 00:33:16,000 --> 00:33:18,120 Speaker 1: but we don't know if he likes the stock now, if. 700 00:33:18,040 --> 00:33:23,160 Speaker 2: His intentions have changed. I'm curious to see how many 701 00:33:23,200 --> 00:33:26,520 Speaker 2: more headlines like this week get because after he posted 702 00:33:26,520 --> 00:33:29,840 Speaker 2: on Reddit that screenshot that showed his stake, Bloomberg News 703 00:33:29,840 --> 00:33:33,320 Speaker 2: reported that Andrew Left, the founder of sitch On Research, 704 00:33:33,480 --> 00:33:37,560 Speaker 2: pleased a new short bet against Game Stop, immediately just 705 00:33:37,600 --> 00:33:39,680 Speaker 2: went back and shorted it. I have to imagine he's 706 00:33:39,720 --> 00:33:41,440 Speaker 2: having a pretty lousy end to his week. 707 00:33:42,120 --> 00:33:45,800 Speaker 1: Yeah, I mean, I'll tell you, if you're shorting game Stop, now, 708 00:33:46,200 --> 00:33:48,640 Speaker 1: that's not like a fundamental bet, that's not like, oh, 709 00:33:48,760 --> 00:33:50,920 Speaker 1: like I've looked at the you know, business model, and 710 00:33:50,960 --> 00:33:53,800 Speaker 1: I think that this is overpriced, right, if you're shooting 711 00:33:53,840 --> 00:33:57,120 Speaker 1: game Stop fundamentally, what you're betting on, I think is 712 00:33:57,160 --> 00:34:00,560 Speaker 1: that Keith Gill will get diminishing marginal returns for his tweet, right, 713 00:34:00,640 --> 00:34:02,400 Speaker 1: Like what you're betting is like oh yeah, like when 714 00:34:02,400 --> 00:34:04,320 Speaker 1: he first treated that, everyone's like, oh excited he's back. 715 00:34:04,360 --> 00:34:06,360 Speaker 1: When he treated his profits, everyone's like, oh he's excited. 716 00:34:06,400 --> 00:34:10,000 Speaker 1: He's back. And if this YouTube video does even better 717 00:34:10,040 --> 00:34:11,959 Speaker 1: than the treats, then like, yeah, Drew Left is gonna 718 00:34:11,960 --> 00:34:13,680 Speaker 1: get blown up. Although I think he's said that he's 719 00:34:14,080 --> 00:34:16,719 Speaker 1: scaling back his short bets on Campstop, he's going to count. 720 00:34:17,239 --> 00:34:20,000 Speaker 1: But yeah, like you know, if Keith Gill continues to 721 00:34:20,080 --> 00:34:23,040 Speaker 1: have this wild power to move the stock every time 722 00:34:23,120 --> 00:34:25,120 Speaker 1: he does some stuff. He'll keep doing more stuff, and 723 00:34:25,120 --> 00:34:26,680 Speaker 1: the stock will keep going up and the short sellers 724 00:34:26,680 --> 00:34:28,480 Speaker 1: will lose a lot of money. But I think there 725 00:34:28,560 --> 00:34:30,520 Speaker 1: has to be some sort of bet on fatigue here 726 00:34:30,560 --> 00:34:32,799 Speaker 1: where it's like, well, you know, like eventually people will 727 00:34:32,800 --> 00:34:33,600 Speaker 1: stop doing this. 728 00:34:34,000 --> 00:34:35,640 Speaker 2: I don't know if that's right, but I mean so 729 00:34:35,719 --> 00:34:38,600 Speaker 2: at two points there, the first one on diminishing returns, 730 00:34:38,800 --> 00:34:40,600 Speaker 2: that makes a lot of sense to me. And yet 731 00:34:40,840 --> 00:34:44,080 Speaker 2: I still keep getting surprised, and it still keeps popping 732 00:34:44,120 --> 00:34:46,080 Speaker 2: double digits out of nowhere. And I probably would have 733 00:34:46,080 --> 00:34:48,759 Speaker 2: said that in like twenty twenty one as well. And 734 00:34:49,200 --> 00:34:50,919 Speaker 2: here we are in the Year of our Lord twenty 735 00:34:50,960 --> 00:34:54,520 Speaker 2: twenty four. To your point, yeah, go on, no, you 736 00:34:54,640 --> 00:34:56,440 Speaker 2: go no, I won't know. 737 00:34:56,680 --> 00:34:58,719 Speaker 1: He's doning a great job. I don't want to use 738 00:34:58,719 --> 00:35:00,960 Speaker 1: the word manipulate because I just it's not recopilation. But 739 00:35:01,000 --> 00:35:03,239 Speaker 1: he's did a great job of slow rolling this out 740 00:35:03,480 --> 00:35:06,360 Speaker 1: to like maximize impact. He like did that weird treat 741 00:35:06,400 --> 00:35:08,400 Speaker 1: and the stock jumped, and then like he waited a 742 00:35:08,400 --> 00:35:11,080 Speaker 1: while doing other weird tweets where you're like, is it 743 00:35:11,120 --> 00:35:12,600 Speaker 1: is it? What is he saying, what does it mean? 744 00:35:12,960 --> 00:35:16,520 Speaker 1: And then he revealed his position, which is enormous and 745 00:35:16,560 --> 00:35:19,600 Speaker 1: people were very excited about that and that moveless talk, 746 00:35:19,640 --> 00:35:20,960 Speaker 1: and now he's going to go on YouTube and like 747 00:35:21,000 --> 00:35:23,239 Speaker 1: he was originally like more than anything else, like a 748 00:35:23,280 --> 00:35:25,600 Speaker 1: YouTube guy, like he would do these long, in depth 749 00:35:25,960 --> 00:35:28,400 Speaker 1: discussions of game stop and so he'd come back in 750 00:35:28,480 --> 00:35:30,880 Speaker 1: other formats, and now he's finally rolling out that. You're like, 751 00:35:31,520 --> 00:35:35,280 Speaker 1: if he were you know, designing this to maximize his impact, 752 00:35:35,320 --> 00:35:37,040 Speaker 1: he's done a nice job of tripping it out and 753 00:35:37,120 --> 00:35:39,680 Speaker 1: also like it's maximized as impact, but also like kind 754 00:35:39,680 --> 00:35:42,399 Speaker 1: of maximizing pain for short sellers because I like Keith 755 00:35:42,440 --> 00:35:44,800 Speaker 1: gilld tweets and the stock gaps up and you're a 756 00:35:44,800 --> 00:35:46,840 Speaker 1: short seller and you're like, ah, this can't last, and 757 00:35:46,920 --> 00:35:48,319 Speaker 1: you short it and then like the next day he 758 00:35:48,320 --> 00:35:51,160 Speaker 1: does like another thing. He's done a nice job of 759 00:35:51,200 --> 00:35:53,840 Speaker 1: making life hard for short sellers. I don't know, you 760 00:35:53,880 --> 00:35:56,640 Speaker 1: want to take a step back to appreciate like he 761 00:35:56,719 --> 00:36:00,239 Speaker 1: made almost three hundred million dollars basically trading one stock. 762 00:36:01,480 --> 00:36:04,080 Speaker 1: You know, it's not in video, like the company hasn't 763 00:36:04,080 --> 00:36:06,200 Speaker 1: done anything in the last three years, but in the 764 00:36:06,280 --> 00:36:08,520 Speaker 1: last like three years, he went from kind of like zero, 765 00:36:08,640 --> 00:36:11,320 Speaker 1: from like regular kind of middle class person amount of 766 00:36:11,360 --> 00:36:13,720 Speaker 1: money in the stock market to three hundred million dollars 767 00:36:13,960 --> 00:36:17,560 Speaker 1: on one stock through some combination of being really media 768 00:36:17,600 --> 00:36:20,960 Speaker 1: savvy and being really like stock market savvy and kind 769 00:36:21,000 --> 00:36:24,280 Speaker 1: of being legally savvy. And it's just amazing, No wonder, 770 00:36:24,320 --> 00:36:26,640 Speaker 1: he has a fan base. Our friend Mary Child said 771 00:36:26,640 --> 00:36:28,759 Speaker 1: to me that he's the first self made person in 772 00:36:28,800 --> 00:36:30,920 Speaker 1: the history of the world. Like that's kind of true. 773 00:36:30,960 --> 00:36:33,520 Speaker 1: Like he's really kind of gone from nothing to like 774 00:36:34,000 --> 00:36:38,680 Speaker 1: immense wealth through a very odd in particular set of skills, 775 00:36:38,960 --> 00:36:41,080 Speaker 1: and like, you know, no wonder people are interested in 776 00:36:41,120 --> 00:36:41,920 Speaker 1: seeing what it's trading. 777 00:36:42,000 --> 00:36:45,720 Speaker 2: Does you know? Again, we're recording all of this before 778 00:36:46,160 --> 00:36:48,240 Speaker 2: the live stream, So I hope that he doesn't reveal 779 00:36:48,280 --> 00:36:51,120 Speaker 2: himself to just be a villain and in the pocket 780 00:36:51,160 --> 00:36:54,040 Speaker 2: of someone tomorrow on the live stream after you said 781 00:36:54,040 --> 00:36:54,799 Speaker 2: all those nice things. 782 00:36:55,680 --> 00:36:58,440 Speaker 1: Look, there's all sorts of ways this could end a dability, right, 783 00:36:58,560 --> 00:37:00,520 Speaker 1: Like how could you go to this kind of the 784 00:37:00,600 --> 00:37:03,440 Speaker 1: case that his three hundred million dollar wealth has been 785 00:37:03,480 --> 00:37:08,640 Speaker 1: extracted from you know, his fans the stock market, like 786 00:37:08,719 --> 00:37:10,640 Speaker 1: someone's on the other side of those trades and like 787 00:37:11,280 --> 00:37:13,799 Speaker 1: where does this ultimately end up? Right? I mean, like 788 00:37:14,000 --> 00:37:15,879 Speaker 1: the last Game Stop rally, a lot of people lost 789 00:37:15,920 --> 00:37:17,279 Speaker 1: a lot of money, a lot of people made a 790 00:37:17,280 --> 00:37:20,959 Speaker 1: lot of money, including Keith Kill. If you piled into 791 00:37:20,960 --> 00:37:23,160 Speaker 1: Game Stop stock at the top and then lost a 792 00:37:23,160 --> 00:37:26,239 Speaker 1: lot of money, Like, maybe it's not completely irrational for 793 00:37:26,280 --> 00:37:28,799 Speaker 1: you to blame Keith Kill for that. Maybe, like in 794 00:37:28,840 --> 00:37:30,560 Speaker 1: some people's eyes he is a villain, but like, I 795 00:37:30,560 --> 00:37:32,440 Speaker 1: don't know, man, he's made a lot of money Amazon 796 00:37:32,520 --> 00:37:38,040 Speaker 1: and Cleverness, I think. And that was The Money Stuff Podcast. 797 00:37:38,280 --> 00:37:40,320 Speaker 2: I'm Matt Levian and I'm Katie Greifeld. 798 00:37:40,719 --> 00:37:42,719 Speaker 1: You can find my work by subscribing to the Money 799 00:37:42,760 --> 00:37:45,319 Speaker 1: Stuff newsletter on Bloomberg dot com, and. 800 00:37:45,239 --> 00:37:48,000 Speaker 2: You can find me on Bloomberg TV every day between 801 00:37:48,040 --> 00:37:49,480 Speaker 2: ten to eleven am Eastern. 802 00:37:50,040 --> 00:37:51,719 Speaker 1: We'd love to hear from you. You can send an 803 00:37:51,760 --> 00:37:54,400 Speaker 1: email to money Pod at Bloomberg dot net ask us 804 00:37:54,440 --> 00:37:56,160 Speaker 1: a question. We might answer it on the air. 805 00:37:56,680 --> 00:37:59,120 Speaker 2: You can also subscribe to our show wherever you're listening 806 00:37:59,239 --> 00:38:01,440 Speaker 2: right now and leave us a review. It helps more 807 00:38:01,480 --> 00:38:02,319 Speaker 2: people find the show. 808 00:38:02,719 --> 00:38:05,400 Speaker 1: The Money Stuff Podcast is produced by Ana Maserakus and 809 00:38:05,520 --> 00:38:07,400 Speaker 1: Moses Adam. 810 00:38:06,719 --> 00:38:08,840 Speaker 2: Our theme music was composed by Blake Maples. 811 00:38:09,040 --> 00:38:11,800 Speaker 1: Brandon. Francis Nenham is our executive producer. 812 00:38:11,719 --> 00:38:14,040 Speaker 2: And Sage Bauman is Bloomberg's head of podcasts. 813 00:38:14,320 --> 00:38:16,520 Speaker 1: Thanks for listening to the Money Stuff Podcast. We'll be 814 00:38:16,560 --> 00:38:18,160 Speaker 1: back next week with more stuff