00:00:00
Maybe you could tell us a little bit
00:00:01
about how you selected our presenters
00:00:03
and your vision for this. I mean for any
00:00:05
of you guys who've been involved in Ira
00:00:09
this is a gentleman that passed away
00:00:10
from cancer far too young and his family
00:00:13
created this thing called the sone
00:00:14
foundation and they would host this
00:00:16
event and it started in Lincoln Center
00:00:18
and they would ask these managers and so
00:00:21
at the time I was like a young venture
00:00:23
investor and I got this invite and I
00:00:25
showed up in New York at Lincoln Center
00:00:27
in 2015 and I said Amazon's going to be
00:00:30
a trillion dollar company and I was
00:00:32
laughed out of the room. Uh David
00:00:34
Einhorn, who's a friend of mine, but who
00:00:36
was totally wrong, said, "I know
00:00:39
trillion dollar companies. This is not a
00:00:41
trillion dollar company." Wrong.
00:00:43
It turned out to be a great bet. I went
00:00:45
back. I did Tesla in 2016. We picked the
00:00:48
converts. And then in 2017, I was like,
00:00:51
"All right, this is my this is this is
00:00:53
it. This is my magnumopus." And I said,
00:00:57
"AI is the future." And then I picked
00:00:59
box.
00:01:01
I was like, if I had just picked Nvidia,
00:01:04
I would have been an Irish legend legend
00:01:06
and I could have retired. Anyway, so we
00:01:08
wanted to recreate Iris and start to get
00:01:10
these great managers who are making
00:01:12
great picks, making a ton of money for
00:01:13
their LPs. They don't get the
00:01:15
distribution and so it's just a chance
00:01:17
to like get to know some of these names.
00:01:19
You don't have to see them on CNBC.
00:01:21
You'll see them here more and more
00:01:22
often. And we can just get to Opine.
00:01:25
>> Roll the video.
00:01:25
>> Yeah. Ladies and gentlemen, welcome to
00:01:29
the best ideas pitch. Let's meet our
00:01:33
contestants.
00:01:35
>> Anyone should be able to trade any asset
00:01:38
anywhere in the world, anytime, 24/7,
00:01:40
with just an internet connection and a
00:01:42
phone in their pocket.
00:01:42
>> We're building a new financial system
00:01:44
from the ground up here.
00:01:45
>> People are going to want to own
00:01:46
equities, and it's going to be fun. In
00:01:49
the next couple years, companies going
00:01:50
to innovate and create products and
00:01:51
applications, and that's where hopefully
00:01:54
long short managers like us can make a
00:01:56
boatload of money.
00:01:57
>> My fund, Eco R1 Capital, which is based
00:01:59
in San Francisco, thinks of investing in
00:02:00
biotech in a slightly different way.
00:02:02
We're looking for unfollowed, unloved,
00:02:04
misunderstood biotech companies.
00:02:05
>> It's an amazing moment in time for those
00:02:07
types of companies. There's been a
00:02:10
structural and permanent perception
00:02:12
shift where both sides of the aisle are
00:02:16
going to be leaning into nuclear in a
00:02:18
big way.
00:02:18
>> I'm massively optimistic. You know, all
00:02:20
of this leads me to just the maximum
00:02:24
risk on.
00:02:29
>> Thanks the besties for having me. And
00:02:31
this is obviously a fabulous event you
00:02:32
guys have put on. I'm happy to be here.
00:02:34
Um, for those of you who don't know me,
00:02:36
um, I run a $4 billion firm in New York
00:02:38
called Serreta Capital. Um, before
00:02:41
founding my firm, I was, uh, I ran the
00:02:43
equities business for George Soros. Uh,
00:02:45
I was then CIO for Steve Cohen. Uh, and
00:02:48
I've been doing hedge funds now for 29
00:02:50
years. So, um, definitely on the older
00:02:52
edge of my my pure group. Um, so I was
00:02:56
thinking about, you know, I run a
00:02:57
generalist fund. Um, and you know, we
00:03:00
own a bunch of tech stocks, but you
00:03:02
know, given this audience here, for me
00:03:03
to pitch a tech stock would be
00:03:05
absolutely completely stupid. Um, so I
00:03:07
was thinking about what else. And you
00:03:09
know, obviously the theme of this
00:03:11
conference besides tech is poker. So I'm
00:03:15
going to pitch to you MGM. Now most of
00:03:18
you know MGM as uh you think about it as
00:03:21
the Vegas um company. They own 13
00:03:24
properties in Vegas. Um they're one
00:03:26
they're them and Caesars are the two
00:03:28
largest owners of uh casino assets in
00:03:31
Vegas. Um now if you notice um the other
00:03:35
day um Caesars got taken out. Um and so
00:03:40
we think Vegas is actually starting to
00:03:42
improve. Um but I'm not here to pitch
00:03:45
MGM because of Vegas. What I'm
00:03:49
going to tell you is there's a couple of
00:03:50
things we noticed. One is this company's
00:03:54
been very aggressively been stock's been
00:03:56
aggressively acquired by Barry Dillard
00:03:58
lately. Um Barry now owns 26% of the
00:04:01
company. Um now I put this presentation
00:04:04
together two weeks ago. Yesterday he
00:04:07
actually bid for the company. Okay. So
00:04:09
when I put the presentation together the
00:04:11
stock was about $37. It's now high40s.
00:04:14
He bid $48. Okay. I would not sell my
00:04:18
shares to him.
00:04:19
>> When did we get this presentation? Did
00:04:21
we get it early enough to trans?
00:04:23
>> Uh I would not sell his I would not sell
00:04:25
my stock to him for a second. And the
00:04:28
reason is also besides him buying the
00:04:31
stock, the company's also been buying
00:04:33
the stock. Rarely have I ever seen a
00:04:36
company in 6 years buy half their float
00:04:39
back. So you have Barry Diller who's the
00:04:42
legend aggressively buying the stock and
00:04:44
it's also now 80% of his NAV. Okay. So
00:04:48
you most people think of Barry Diller as
00:04:50
the ABC producer. He did I which owned
00:04:53
assets like Expedia and now he's a
00:04:56
casino guy. What is going on here? So we
00:05:00
spent a lot of time
00:05:02
um asking ourselves why um and why is
00:05:08
MGM has two hidden assets. Okay. The
00:05:12
first one
00:05:14
is, and this is sort of our the
00:05:17
punchline of what we think the stock is
00:05:19
worth. So you add the Vegas assets plus
00:05:22
China, you get about little low60s. So
00:05:25
from $48 or 37 when I started this,
00:05:29
great return. What is they what they
00:05:32
have now is a license to open a casino
00:05:36
in Aaka, Japan. Japan a couple years ago
00:05:39
went through a whole referendum around
00:05:41
the country. They have prefixures. The
00:05:43
prefixures voted. The only one that
00:05:46
decided to own open a casino is Osaka.
00:05:50
Now Osaka is and this is what the
00:05:53
asset's going to look like. It's going
00:05:54
to open in 2030. If you go to the
00:05:57
company slide presentations, they sort
00:05:59
of mention this, but they're not really
00:06:01
talking about it. Um, Japan, just for
00:06:05
you people, um, sorry, I don't know,
00:06:08
this is very slow. Um, Japan actually
00:06:10
has a reasonably large gambling market.
00:06:12
They have pachinko parlors and they have
00:06:14
horses. That's about a $40 billion
00:06:16
market. If you look at the market in
00:06:18
Macau, that's $30 billion. And if you
00:06:20
look at Vegas, it's only $10 billion.
00:06:22
So, this could be a massive opportunity.
00:06:26
Um, you know, we're estimating they'll
00:06:28
do about $2 billion of IBIDA. They own
00:06:31
40% of the property. Um, they also get a
00:06:34
management fee for this. Um, if you also
00:06:36
look at where Osaka is located, it's a
00:06:39
great, you know, so the Japanese like to
00:06:41
gamble, but the Chinese really gamble.
00:06:43
Okay. So, if you look at where it is
00:06:46
from Shanghai, it's shorter than Macau
00:06:48
and Singapore, which are the two big
00:06:50
gaming options in Asia. And from and
00:06:53
from Beijing, about the same distance as
00:06:55
Macau, and obviously much shorter than
00:06:57
going to Singapore. So, if you want to
00:06:59
go gambling for a weekend and you live
00:07:01
in Shanghai, live in Beijing, Osaka is
00:07:04
great. It's also a first world nation.
00:07:06
Um, and if you think about as an
00:07:08
investor, where would you want to have
00:07:09
your money? Look, Macau has issues. It's
00:07:13
a low multiple business. This is Japan.
00:07:15
It's a first world country. So, we think
00:07:17
Barry Diller is understands gambling. He
00:07:21
understands casinos. But what he's
00:07:23
really doing is now trying to pick off
00:07:25
the company to get the Japanese
00:07:28
opportunity which we think is worth will
00:07:30
more than double the stock. The final
00:07:32
option and I'm keeping this simple. What
00:07:34
I love about this pitch is it's really
00:07:36
simple. It's not that hard to do the
00:07:37
math. MGM is built somebody they're
00:07:41
they're they're branding they're
00:07:42
building a property in Dubai. Okay. Now
00:07:45
it's going to it's a grand complex. It
00:07:48
has an Arya. It has an MGM and it has a
00:07:50
Bellagio. Gambling is illegal in Dubai
00:07:53
right now. Okay. But they have snuck in
00:07:58
this building 300,000 square ft of cu of
00:08:02
space. Well, one day if Dubai decides to
00:08:06
legalize gambling, guess where it's
00:08:09
going? Right there.
00:08:11
Next year, two, sorry, two years from
00:08:13
now, win is going to open a casino in a
00:08:16
place called Ararjan, which is 45
00:08:19
minutes away from Dubai. Now, any of us
00:08:22
who want to go gambling in Dubai, we
00:08:25
arjan's a bit of a pain in the ass to
00:08:26
get to, we're going to want to go here.
00:08:29
So, we think there's a chance that
00:08:31
especially when win opens. Also look,
00:08:33
there's a possibility of the war, you
00:08:36
know, Dubai wants to reestablish
00:08:37
themselves that they open a casino in um
00:08:42
Dubai and you know what that would be
00:08:44
worth. So when you take the Vegas
00:08:47
assets, which we think are worth about
00:08:48
60, when you take Japan, which we think
00:08:51
is worth about 50 bucks, if Dubai
00:08:53
happens, that's worth another $40 or
00:08:55
$50. So we think the stock is a triple.
00:08:59
Bar remember Barry's bidding for the
00:09:01
company. Okay, he is not a strategic
00:09:04
buyer. He is a financial buyer and he's
00:09:06
doing it to get rich. So therefore, I
00:09:09
think this company is now in play. I
00:09:12
don't know how it's all going to play
00:09:13
out, but if you own shares, don't tend
00:09:15
to them. And the riskreward is
00:09:17
incredible right now because, you know,
00:09:19
I'm telling you, I think the stock could
00:09:20
be easily worth over 100, could be worth
00:09:23
150. And now you have Barry Diller who
00:09:26
is a has a firm bid owns 26% of the
00:09:29
company basically at the same price. So
00:09:32
I think this is a cool idea.
00:09:33
>> Well done.
00:09:36
Okay. Uh anybody let's uh do two
00:09:39
questions and uh yeah we'll put we'll
00:09:41
give you both questions at the same time
00:09:42
for efficiency.
00:09:43
>> How much have you looked at like the
00:09:45
monetization of the assets outside of
00:09:47
gambling? I had heard from someone that
00:09:49
Barry Diller was spending a lot of time
00:09:50
trying to reinvent the entertainment
00:09:52
piece of the properties. he was active
00:09:54
on the board and they were trying to
00:09:56
identify that the entertainment property
00:09:58
is way the entertainment value is way
00:10:00
undermonetized and they could be making
00:10:02
a lot more per
00:10:03
>> Okay, don't answer yet. That's question
00:10:05
one.
00:10:05
>> And then question two is how when you
00:10:07
expand internationally do you scale
00:10:10
customer credit because that tends to be
00:10:13
the thing that drives
00:10:14
>> you know people to come back and
00:10:16
>> well obviously MGM let me start with
00:10:17
your question first. MGM has a massive
00:10:20
database of customers, right? So, you
00:10:22
know, I assume the Vegas properties have
00:10:24
guys that come from China, they come
00:10:26
from um Japan. They'll use that database
00:10:29
to do it. They also have a loyalty
00:10:30
program. Um I unfortunately made a bad
00:10:33
investment in a company called Rio, the
00:10:34
Rio, which was in Vegas. Um which we
00:10:37
bought when they separate when Caesar's
00:10:40
merged with El Dorado. Um they had to
00:10:42
shed an asset. Um that was that was uh
00:10:45
the Rio. We I did an investment with a
00:10:48
couple of friends and we were buying the
00:10:50
thing at $200 per square foot. The thing
00:10:52
we forgot was when you separated from
00:10:55
Caesars, you lost the loyalty program
00:10:57
and that ended up two quick questions
00:10:59
from the audience.
00:11:00
>> Wait, I got to ask Kyle's question.
00:11:02
>> Hold on. Question and then from the
00:11:03
audience.
00:11:04
>> Let me get his first.
00:11:05
>> The entertainment question.
00:11:06
>> I don't know the answer. I don't know
00:11:08
the answer to that. If it's if he can
00:11:10
make them better, it will help.
00:11:13
>> But as I'm saying, this is not really a
00:11:15
Vegas. This is an Asian casino play that
00:11:20
>> the and if if you look at their
00:11:22
presentations which is really cool.
00:11:25
>> They are not they barely mention it. So
00:11:27
what one of the things we happened
00:11:28
besides we were hoping one of the cat so
00:11:30
looked I worked at SACE and one of the
00:11:32
things we focus on is catalyst path.
00:11:34
>> So what was the catalyst path? The
00:11:36
catalyst path was they would have an
00:11:38
investor day blah blah blah. Barry just
00:11:40
showed his cards. So, um, but you know,
00:11:44
>> Aaron, two questions. Caesars left Dubai
00:11:47
waiting for a license. Why would this be
00:11:50
different for MGM? That's question one.
00:11:52
>> And then question two is the Osaka
00:11:54
Casino was approved in 2023.
00:11:57
Why was the market ignoring this hidden
00:11:59
asset until the bid?
00:12:00
>> Sure. Let me answer this. So, what's
00:12:03
also cool about this idea was, so I've
00:12:05
been doing this for 29 years. um win um
00:12:10
they opened Macau. So Win started as a
00:12:12
Vegas property then opened Macau. The
00:12:14
market started caring about it about 3
00:12:17
years before it opened. Um so that the
00:12:20
answer is they should care about it. The
00:12:22
reality is it's tends to be about 3
00:12:24
years before it opens. Well, we're
00:12:26
almost in that time frame, which is why
00:12:28
we think it's opportunistically the
00:12:30
right period of time. Um I, you know,
00:12:32
regarding the question with Caesars,
00:12:34
look, this is an option. As I told you,
00:12:36
somebody built this project for them.
00:12:39
They are running it for them and they
00:12:42
were intelligent enough to leave 300,000
00:12:45
square ft of empty space in case they
00:12:47
get a casino. Well, if that happens,
00:12:49
great. If it doesn't, you know, you're
00:12:52
still going to double more than double
00:12:53
your money. So, you know, you if if it
00:12:55
happens, you triple your money.
00:12:56
>> Free option. You're saying
00:12:58
>> it's free option.
00:12:59
>> Well done. Big round of applause.
00:13:01
>> Thanks, guys. Appreciate it.
00:13:02
>> Nicely done, Aaron.
00:13:04
Next up, Daniel.
00:13:06
>> Long time no see.
00:13:09
So, today we're doing talent energy. Uh,
00:13:12
but first,
00:13:14
the anatomy of a power cycle.
00:13:19
So, a power cycle typically goes like
00:13:22
this. In normal times, power demand
00:13:24
grows about GDP. So, if GDP grows 2%,
00:13:27
power demand grows two. If GDP grows
00:13:29
three, power demand goes three. And
00:13:32
there's moments in time where we get
00:13:33
technological breakthroughs and a lot of
00:13:36
those technological breakthroughs are
00:13:37
very power intensive. So power demand
00:13:40
spikes
00:13:42
and once everybody adopts that
00:13:44
technology
00:13:46
it trends back down to its onal
00:13:48
algorithm
00:13:50
GDP growth and then you go through the
00:13:54
efficiencies phase where we say let's
00:13:56
try to conserve and figure out ways to
00:13:58
consume less power and then the cycle
00:14:01
starts all over again. So, you know, in
00:14:03
history, the big technological boom that
00:14:05
sent power demand skyrocketing was
00:14:08
appliances and air conditioning.
00:14:10
Everybody had to get their kettles and
00:14:12
and the aircon. Then in the 70s and 80s
00:14:16
and 90s, demand normalized again. But
00:14:18
then the 2000s were all about
00:14:20
efficiencies. You know, we had like LED
00:14:22
lighting, smart HVAC, tinted windows,
00:14:24
smart electronics. And at the same time,
00:14:27
as I said earlier, we were like, you
00:14:29
know, ripping down all our power- hungry
00:14:31
infrastructure like aluminum smelters
00:14:33
and moving over China. So, we had two
00:14:35
decades of effectively no power demand.
00:14:38
And now we're just coming out of it and
00:14:40
starting a technological cycle again
00:14:43
where power demand is going to really
00:14:45
start to explode from these sort of high
00:14:47
2% numbers you're seeing on the screen.
00:14:49
Now, I want to say something right now
00:14:52
that is incredibly important.
00:14:57
We do not need AI demand to keep the
00:15:02
power markets incredibly tight for the
00:15:07
next 20 years.
00:15:10
AI demand just turbocharges.
00:15:13
That's all it does. And it creates
00:15:16
shortages. So just remember that. Early
00:15:19
in my career, I was on a panel with Sam
00:15:23
Zel. Interestingly, it was a panel on
00:15:26
opportunities in Mongolia. I was looking
00:15:27
at a copper mine and he was looking at
00:15:29
real estate. There was one thing he said
00:15:31
that stuck with me for the rest of my
00:15:33
career is he said, "If you can buy an
00:15:37
asset, a hard asset at below replacement
00:15:40
cost for an asset that's going to be
00:15:42
needed in the future where we're going
00:15:43
to need to build new capacity of that
00:15:45
asset. Then you buy that asset at the
00:15:48
discount to replacement cost. You hold
00:15:50
it and you sell it at a big premium to
00:15:53
replacement cost when the market wakes
00:15:55
up. That's exactly we did with Equity
00:15:56
Office properties. Sold it at the peak
00:15:58
of the market but bought it at a
00:16:00
discount to replacement value. Talon
00:16:02
Energy is a power producer. They have 2
00:16:05
gawatts of nuclear power and they've got
00:16:07
6 gawatt of natural gas base load power.
00:16:10
Today in the stock market, as a good
00:16:14
speculation, you could purchase this
00:16:16
company at a $25 billion enterprise
00:16:18
value. the replacement cost is 45
00:16:20
billion. And because they've got debt,
00:16:23
it means that the equity value uh just
00:16:25
to get to replacement cost uh is more
00:16:28
than a double uh from where it's trading
00:16:30
today. And if you follow Sam's playbook,
00:16:34
then we ultimately end this cycle at a
00:16:36
big premium to replacement value.
00:16:39
So when I see this,
00:16:42
I say the plan for America
00:16:45
on the power side has to be this. Make
00:16:49
America great again. Copy China.
00:16:54
If you look what China did over the last
00:16:56
20 years, we started out this cycle with
00:17:00
having 2x the power generation that
00:17:02
China had. Fast forward to today, China
00:17:04
has three times the power generation
00:17:06
capacity that we have. Now, if you
00:17:10
believe that artificial intelligence is
00:17:12
going to be responsible for scientific
00:17:14
breakthroughs, you either have it or you
00:17:16
don't have the scientific breakthroughs.
00:17:17
If you believe that artificial
00:17:18
intelligence is going to drive robotics,
00:17:20
you either have it or you don't have
00:17:21
that productivity from the robots. If
00:17:23
you believe that artificial intelligence
00:17:24
is going to be helpful for national
00:17:27
security and military affairs, then you
00:17:29
either have it or you're dead. And so
00:17:32
this is an absolutely mandatory
00:17:36
buildout that we have to do otherwise
00:17:39
we're going to fall behind because at
00:17:40
the end of the day what is a data
00:17:42
center? You know in my world in the
00:17:44
commodities world I look at a data
00:17:45
center as the exact same thing as a
00:17:47
refinery. In a traditional hydrocarbon
00:17:48
refinery you put oil in crude oil in you
00:17:52
refine it into jet fuel or gasoline for
00:17:54
your car. With a data center, you put
00:17:58
electricity in and on the other end
00:18:01
instead of gasoline or jet fuel out
00:18:02
comes photons or tokens or intelligence,
00:18:04
whatever you want to call it, but it's
00:18:05
the same thing. Big capital inensive
00:18:08
asset, $50 billion per gawatt and power
00:18:12
just like electricity, just like oil is
00:18:14
the input to that refinery. So, here's
00:18:18
Jensen
00:18:19
and uh he was just recently quoted that
00:18:23
we need a thousand times more power than
00:18:27
we currently have. Now, if that's
00:18:30
remotely true, we need every single
00:18:33
source of power that you can imagine. We
00:18:35
need hundreds of gigawatts of nuclear,
00:18:37
we need solar, we need orbital, we need
00:18:40
it all, if this is even remotely true.
00:18:44
But the challenge as we spoke about
00:18:46
before is the supply chain, right? All
00:18:48
of these, you know, a data center
00:18:49
competes for the same supply chain of
00:18:50
the critical minerals that space
00:18:52
launches and orbital data centers do.
00:18:54
Power plants need all the same nickel
00:18:57
super alloys that it takes to launch
00:18:59
rockets and the silver that goes into
00:19:01
these photovalttaic cells. And so and so
00:19:04
there's going to be shortages of
00:19:06
everything and delays everywhere. And my
00:19:09
point here is we are just going to need
00:19:13
every solution that we can throw at this
00:19:15
for the foreseeable future.
00:19:18
So here's a little region in the US
00:19:20
called the PJM, Pennsylvania, Jersey,
00:19:22
Maryland. Uh this is a forecast from the
00:19:24
grid operator where they say that over
00:19:27
the next 10 years we're going to need
00:19:29
106 gawatts of new power in the PJM in
00:19:32
just one little area of the US. Now in
00:19:35
10 years in geological time that's like
00:19:37
tomorrow morning right we're all so used
00:19:39
to internet time you press a button and
00:19:40
you get your food delivered to you or
00:19:42
your car picks you up in two seconds you
00:19:44
know building infrastructure happens in
00:19:45
geological time 10 years to build out
00:19:47
106 gawatt is literally a nancond from
00:19:51
now and you know you see that thermal
00:19:54
coal retirements we ain't retiring those
00:19:56
coal plants because there's no world
00:19:58
where we're going to be building 100
00:19:59
gawatt in 10 years that's the size of
00:20:02
what Japan consumes today for one little
00:20:04
part of the US. And you know what I'll
00:20:07
say is those that understand the supply
00:20:10
chain and what goes into building all
00:20:12
this, everybody's in panic mode because
00:20:16
we know that we don't have the raw
00:20:19
materials to meet this level of demand
00:20:22
that's coming our way. So that's going
00:20:24
to keep existing capacity and power
00:20:26
prices very tight. Now the data center
00:20:29
and the hyperscalers are in a panic.
00:20:32
They're trying everything they can to
00:20:34
source as much power as they can under
00:20:36
long-term PPAs power purchase price
00:20:39
agreements at fixed prices for 20 years.
00:20:42
There's a famous example, you know, I
00:20:43
thought Microsoft was a green company,
00:20:46
but they went and convinced
00:20:48
Constellation Energy, which is a company
00:20:50
that owns the 3M island nuclear reactor,
00:20:52
you know, the one that melted down and
00:20:54
created, you know, the nuclear meltdown
00:20:55
that gave nuclear a bad name for 30
00:20:57
years. It was Microsoft that told them
00:21:00
they needed to start it up. And in order
00:21:02
to incentivize to stimulate their hand
00:21:04
to wallet reflex to start this thing up,
00:21:06
they said, "Power prices stay $50 a
00:21:09
megawatt hour. We'll pay you a hundred a
00:21:12
year for 20 years minimum price for you
00:21:15
guys to start this up." And so here we
00:21:19
have it. Uh 3M Island brought to you by
00:21:21
Microsoft Azure. So, you know, it's
00:21:25
getting harder to do these deals because
00:21:26
the regulators are saying, "Wait a
00:21:28
minute. If you're taking all this power
00:21:30
off the grid for your data center, how
00:21:32
are we going to heat the homes of our
00:21:34
customers?" And so, uh, you know, it
00:21:37
we're getting ourselves into the moment
00:21:40
of what I call crunch time. So, just to
00:21:43
finish up, uh, here are the numbers on
00:21:45
Talon. Um, the stock today is sort of in
00:21:48
the high 300s. If they just do
00:21:50
absolutely nothing, just absolutely
00:21:53
nothing, just sit there and run the
00:21:55
business, let their Amazon data center
00:21:58
contract roll up, these guys will be
00:22:01
generating $50 a share of free cash flow
00:22:04
per year. Again, the stock is in the
00:22:06
high 300. So, it's about seven times
00:22:07
free cash flow. Good infrastructure
00:22:09
assets in the US, traded about 15 times.
00:22:12
So, that's pretty good. You get a double
00:22:13
for basically management just sitting
00:22:15
around and doing nothing. But if they
00:22:18
continue to figure out ways to sign
00:22:20
contracts with data centers at premium
00:22:22
prices or if power prices go up. I mean
00:22:25
the amazing thing right now is in the
00:22:26
PJM where these guys operate, the power
00:22:29
price is still too low to stimulate new
00:22:31
capacity. The math still doesn't work,
00:22:33
which is really mindboggling. So if
00:22:35
power prices go up a bit, they do more
00:22:37
deals, you get to $70 a share of
00:22:40
recurring annual free cash flow, put a
00:22:42
15 multiple on that, that's,50.
00:22:45
But then if they get into building power
00:22:47
plants, right? And right now the
00:22:49
regulator is telling these companies to
00:22:50
go sit in a room, power producer, data
00:22:53
center, come in a room, make a deal so
00:22:56
that you build power and get a good
00:22:58
return on it. And the data center gets
00:22:59
their power gets a good return on it.
00:23:01
And Talon is in a pole position to be
00:23:03
able to do this. If they just build like
00:23:05
4 gawatt of the 100 gawatts that we
00:23:07
need, you could get up to, you know,
00:23:09
over $100 a share of free cash flow. The
00:23:11
stocks in the high30s today. So, uh, go
00:23:14
and buy the shares. It's a good
00:23:15
speculation and, um, we can chat.
00:23:18
>> All right. Not financial advice. Gavin,
00:23:20
go.
00:23:21
>> Gav and go.
00:23:22
>> I just, just very curious like how do
00:23:23
you think about regulatory risks here?
00:23:25
Nobody likes their electricity prices
00:23:27
going up. AI is an increasingly
00:23:30
political issue just like how do you
00:23:33
think about that risk?
00:23:35
>> We need AI and we need to figure this
00:23:36
out. And so there's different ways to
00:23:38
skin a cat here, right? My personal view
00:23:41
is during peak hours, right? If you go
00:23:44
drive down a highway at 4 in the
00:23:46
morning, you know, you would sit there
00:23:48
and say, "Why do we have all this
00:23:49
highway capacity? This is crazy." But
00:23:51
then you go on that same highway at rush
00:23:52
hour, you're like, "Oh, we don't have
00:23:54
enough highway capacity. There's not
00:23:55
enough lanes." Power is the same thing.
00:23:57
There's only a few hours a day where you
00:24:00
really stress the system. And so I think
00:24:02
the working solution to get around this
00:24:04
regulatory issue is you do the PPAs with
00:24:08
the data centers. You force the data
00:24:09
centers to throw a ton of battery behind
00:24:11
it and some peakers just to get through
00:24:13
that really intense period. And then uh
00:24:17
that's a good band-aid solution until we
00:24:19
build more power. So there's ways to do
00:24:21
this. Human ingenuity is going to win
00:24:22
here. We're going to get our data
00:24:24
centers and consumer power bills are
00:24:25
going to be, I think, relatively under
00:24:27
control. They're going to go up, but
00:24:28
they're going to be under control. Okay,
00:24:29
Dan, I have three questions from the
00:24:31
audience. Really good ones. Number one,
00:24:33
does your thesis actually need behind
00:24:35
the meter collocation to clear or is it
00:24:38
just a bet that clean firm base load is
00:24:41
scarce enough that it doesn't matter
00:24:43
whether power flows in front of or
00:24:45
behind the meter? It's the latter. And
00:24:46
that's why I gave three scenarios,
00:24:48
right? The $50 a share of earnings per
00:24:51
share. Again, a high $300 stock, right?
00:24:54
$50 a share of earnings. Nothing has to
00:24:56
happen. You just sit, right? And you
00:24:58
double your money. Now, if you get more
00:25:00
behind the meter or even front of the
00:25:01
meter, that's how you get up to that $70
00:25:04
a share of earnings from 50. And then if
00:25:06
you get up to the 70, but start building
00:25:08
new capacity, then you get to the $100
00:25:10
plus.
00:25:11
>> Okay. Question two from Brad. How do you
00:25:13
think about competition for power from
00:25:16
things like fuel cells, gas turbines,
00:25:18
aerodyit turbines, orbital compute, and
00:25:21
other sort of IPs, independent power
00:25:23
producers.
00:25:24
>> We need all of it. We need all of it. We
00:25:26
we you know fuel cells and you know the
00:25:29
Caterpillar solar turbines these are
00:25:32
fantastic bridge solutions but the cost
00:25:34
to run these things the LCOE is like
00:25:36
through the roof but you you know look
00:25:37
to build a $50 billion data center you
00:25:39
don't want it to sit idle for 3 years
00:25:41
waiting for your base load CCGT so you
00:25:43
do whatever it takes you don't give a
00:25:44
crap what you pay for that bridge
00:25:46
solution and so we're finding ways
00:25:48
through fuel cells through uh you know
00:25:50
Caterpillar solar turbines hopefully
00:25:52
through orbital data centers where we
00:25:54
can alleviate this because I want AI to
00:25:57
happen in a really big way and we're
00:25:58
going to need all the above.
00:26:00
>> Okay, question three. By the way, great
00:26:02
questions guys. Thank you for these.
00:26:04
What is the right terminal multiple for
00:26:06
Talon if the business mix shifts from
00:26:08
merchant IP to contracted
00:26:11
infrastructure?
00:26:12
>> Fabulous question
00:26:13
>> and and and the addendum here and what
00:26:15
percentage of EBIDA
00:26:17
needs to be contracted before the market
00:26:19
should rerate it? So, that's a great
00:26:21
question and and I only had six minutes
00:26:23
to do this and I think I blew through my
00:26:24
time so I couldn't get into this kind of
00:26:25
detail, but it's something I would have
00:26:27
really wanted to get into. So, whoever
00:26:28
asked that, thank you. Uh, I just use
00:26:30
the 15 multiple because it's sort of a
00:26:32
blended multiple between the contracted
00:26:34
stuff, which will get a big premium
00:26:36
multiple because, you know, it's a bond
00:26:38
like cash flow stream and bond like cash
00:26:40
flow streams trade at a small spread to
00:26:42
treasuries and so treasuries if they're
00:26:43
at 5% should trade at 20 times plus some
00:26:46
growth or whatever, plus or minus. the
00:26:48
uncontracted stuff, the merchant stuff
00:26:50
that has spot market exposure is more
00:26:51
volatile, less visible, that should
00:26:54
trade at a lower multiple. We can get
00:26:56
into the minutia, but just suffice to
00:26:58
say, the more contracts, the higher the
00:27:01
multiple, the less the lower the
00:27:02
multiple. Use 15 times as a good rule of
00:27:04
thumb, and you'll probably get to the
00:27:06
right answer, which is what I used.
00:27:07
>> That last question from Daniel Sherer.
00:27:09
Thank you for that,
00:27:10
>> Dan. Thank you. That was great.
00:27:12
>> Great. Thanks.
00:27:18
My name is Oleg Nelman. I'm the founder
00:27:20
and managing director of Eco1 Capital, a
00:27:22
San Francisco based valueoriented
00:27:25
biotech fund uh that I started about 13
00:27:28
years ago. Thanks a lot to the besties
00:27:30
for having me here. I'm a huge fan of
00:27:33
the pod like I'm sure all of us are and
00:27:35
I know how challenged Science Corner can
00:27:37
get. So, I wrote this in a way that even
00:27:40
David Saxs would appreciate and pay
00:27:42
attention to if if he were here.
00:27:45
>> Well, paradoxically, he's taking a nap,
00:27:47
which is what he normally does during
00:27:48
science corners.
00:27:49
>> Exactly.
00:27:51
>> Generally speaking, investing in biotech
00:27:53
companies is a horrible idea sandwiched
00:27:56
somewhere between movies, wineries, and
00:27:59
spaxs. In fact, our sector often feels a
00:28:03
lot more like a casino than an actual
00:28:05
financial market. And most of the
00:28:07
tourists who are investing are playing
00:28:08
the slots.
00:28:12
Of course, at Eco1, we consider
00:28:14
ourselves poker players in a sector
00:28:16
where virtually everyone else is a
00:28:17
momentum investor betting on science. We
00:28:20
focus on margin of safety. We're one of
00:28:22
the few funds not managed by PhDs or
00:28:24
MDs, and that's by design because we
00:28:27
don't want to fall in love with the
00:28:28
science. We fall in love with the
00:28:30
riskreward. And like the slide says, we
00:28:32
want to monetize other kids science
00:28:34
projects.
00:28:36
This is my 25th year investing in
00:28:38
biotech. I started my career with an
00:28:40
11-year stint at another fund and
00:28:42
launched Eco R1 in 2013, humble
00:28:45
beginnings with 13 million. Since
00:28:47
inception, we've 10xed to our investors
00:28:49
and annualized at 20%. And today we have
00:28:51
about two and a half billion under
00:28:53
management.
00:28:55
We're lucky to have long-term partners,
00:28:57
many of whom are biotech entrepreneurs
00:28:58
themselves, and have been with us since
00:29:00
day one. And we recently reopened for
00:29:03
the first time in four years.
00:29:08
Today I'm going to tell you about a
00:29:10
company that's on the front lines of the
00:29:11
war on cancer. Military terminology has
00:29:14
been used when descri describing
00:29:16
treatments for the disease since the
00:29:17
early 70s when President Nixon signed
00:29:19
the National Cancer Act.
00:29:23
The warfare analogy is actually perfect.
00:29:28
The warfare actually is actually perfect
00:29:29
for cancer because both domains are
00:29:31
trying to accomplish the exact same
00:29:32
thing. find the enemy, figure out the
00:29:35
best weapon to kill them, and have
00:29:37
minimal unwanted casualties along the
00:29:39
way.
00:29:42
First, a quick history of how this war
00:29:44
has evolved.
00:29:47
Early surgical cancer treatment and
00:29:48
radiation was akin to a medieval siege.
00:29:51
Level the entire castle, burn the
00:29:53
surrounding village, and hope the enemy
00:29:55
was left somewhere in the rubble.
00:29:59
Chemo actually evolved from an
00:30:00
accidental observation during World War
00:30:02
I that mustard gas killed rapidly
00:30:05
dividing tissue. Tumor cells divide
00:30:07
fast, so doctors would flood a patient's
00:30:09
body with chemo and hoped it killed the
00:30:11
enemy faster than it killed allies.
00:30:13
Unfortunately, hair, skin, gut, and
00:30:16
marrow cells also divide quickly, and
00:30:18
the poison doesn't discriminate.
00:30:20
First generation targeted therapies were
00:30:22
next, like a GPS guided munition.
00:30:25
Instead of carpet bombing every dividing
00:30:27
cell, you identify the enemy's command
00:30:29
and control center and destroy it. The
00:30:32
problem, like with any weapon, is that
00:30:33
the enemy adapts and hides. And in
00:30:36
cancer, these are called resistant
00:30:37
mutations.
00:30:42
Imunotherapy was first introduced to
00:30:44
patients a decade ago. With IIO, you
00:30:46
don't send in your own troops. You
00:30:48
recruit local allies, also known as T-
00:30:50
cells, and let them do the fighting for
00:30:52
you. Spectacular when it works, but
00:30:54
highly dependent on the terrain or the
00:30:56
tumor micro environment. This brings me
00:30:58
to the reason we're here today.
00:31:00
Modern-day radio pharmaceuticals. Like a
00:31:02
swarm of micro drones small enough to
00:31:04
navigate the bloodstream and find their
00:31:06
target by molecular recognition, then
00:31:08
detonate a precisely sized warhead with
00:31:10
a blast radius of 100 microns or the
00:31:13
diameter of a single cell. An autonomous
00:31:15
assassination with the force of a bunker
00:31:17
buster and minimum collateral damage.
00:31:20
The company I'm going to tell you about
00:31:22
today is Actis Oncology. The ticker is
00:31:24
AKTS. The company has a billion dollar
00:31:27
market cap, a $500 million enterprise
00:31:30
value, and a stockpile of cash, which
00:31:32
should last them over 3 years. Long past
00:31:35
critical milestones that are coming next
00:31:37
year. Actis was started five years ago,
00:31:40
but recently went public with a $300
00:31:42
million IPO that was 18 times
00:31:43
oversubscribed and backstopped with a
00:31:46
hund00 million order by Eli Liy, the
00:31:48
folks who bring you all the weight loss
00:31:50
drugs. The company has designed a
00:31:52
platform that can carry any radioactive
00:31:54
payload, is complex enough to go after a
00:31:56
variety of targets, and small enough to
00:31:58
clear your body with minimal side
00:31:59
effects. The beautiful thing about this
00:32:01
approach is that physicians can verify
00:32:03
target engagement in early clinical
00:32:05
trials with imaging. This significantly
00:32:08
derisks clinical development because you
00:32:10
know the drug is getting to the tumor.
00:32:12
Another de-risking strategy for their
00:32:14
first few programs Actis chose known
00:32:16
valid targets like nectin 4 and B7H3.
00:32:20
Nectin 4 is critical in bladder cancer
00:32:22
and the company's second program
00:32:24
targeting B7H3 is even more ambitious
00:32:27
expressed on every major solid tumor
00:32:29
including the big three prostate,
00:32:31
colurectyl and lung. Actis started
00:32:34
clinical trials last year
00:32:37
and is publicly guided to initial
00:32:39
clinical data in both of these lead
00:32:41
programs in 2027 with Nectton 4 coming
00:32:44
as early as Q1. So you won't have to
00:32:46
wait long. If either program shows a
00:32:48
signal, the company is likely to get
00:32:50
value not only for those programs but
00:32:52
the entire mini protein platform. This
00:32:55
is the holy grail in biotech, getting
00:32:58
value simply for the promise of what
00:33:00
might come.
00:33:04
What's even more compelling is there's
00:33:06
an amazing amount of interest in
00:33:08
radiotherapies from pharma. The big ones
00:33:10
including Bristol, Novartis, Bayer, and
00:33:13
Lily who backs stop the Actis IPO have
00:33:15
been building radiotherapy capabilities
00:33:17
and they're hungry for assets to add to
00:33:19
their pipelines. There's been 15 billion
00:33:22
in M&A and dealmaking in radiotherapy in
00:33:23
the last few years and we're very much
00:33:25
in the early innings. The neatest thing
00:33:28
about this modality is that it's very
00:33:29
hard to replicate. Generics generally
00:33:31
don't traffic in radioarma and because
00:33:34
the class involves radioisotopes it's
00:33:36
off limits to China. So unlike most of
00:33:38
biotech there's a real moat
00:33:42
and now the obligatory safety warning.
00:33:44
Axis is not for everyone. You should
00:33:45
consult your biotech analyst before
00:33:47
purchasing access. Initiating a position
00:33:48
may cause increased anxiety reduced
00:33:49
sleep through the night. Serious
00:33:50
sometimes drops in stock rates occur in
00:33:52
biotech. Immediately after investing may
00:33:53
experience sudden volatility due to lang
00:33:55
competitors. If stock declines are
00:33:56
experienced no fun reason. Call your
00:33:57
broker immediately to increase your
00:33:58
position. Remember serious safety
00:33:59
concerns have risen in other companies
00:34:00
local development programs. While no
00:34:01
safety concerns occur with any access
00:34:03
program date, they may in the future.
00:34:04
The use of many proteins delivered for
00:34:05
sales has not been proven. Access is no
00:34:07
market products and thus no referring
00:34:08
revenue solution for equity offerings
00:34:10
may occur. In the event of a secondary
00:34:11
offering, immediately schedule a call
00:34:12
with access management team to discuss
00:34:13
placing an order.
00:34:22
It's notoriously challenging to value
00:34:24
biotech companies because when you risk
00:34:26
adjust and discount back, you pretty
00:34:28
quickly get to zero. For earlier stage
00:34:31
opportunities like this, we like to
00:34:32
triangulate. We think Actis could be
00:34:34
worth 10 billion or $200 per share if
00:34:36
even one of their programs makes it to
00:34:38
market. And in this case, you have a lot
00:34:40
of outs.
00:34:41
>> I'm not familiar with why radioisotopes
00:34:43
are off limits to China. So in this
00:34:47
particular case um Actis' radioisotope
00:34:51
payload is actinium and actinium is
00:34:54
manufactured from radium 233 which was
00:34:58
used in our own nuclear programs in the
00:35:01
US in the in the 50s and 60s. So it's a
00:35:03
waste product from there. So actinum is
00:35:06
not even available in other countries
00:35:08
like China because they had a completely
00:35:09
different uh their own program was
00:35:11
completely different with enriched
00:35:13
uranium and plutonium. But the but the
00:35:14
the risk for a lot of biotech and China
00:35:17
replication came about that Amgen Sophi
00:35:20
Supreme Court case, didn't it? Where
00:35:22
they could you could make a small
00:35:23
because it basically said all patents
00:35:25
are composition of matter patents. So
00:35:27
you could change one amino acid get
00:35:29
around the patent and China's basically
00:35:31
done that with a lot of biologics that
00:35:33
are patented in the US and Europe. They
00:35:35
just rip them off and then you attach
00:35:37
the radio emmitting
00:35:38
>> uh radioisotope to the molecule and you
00:35:41
can kind of chase it. That's kind of why
00:35:42
a lot of biotech's been depressed. Is
00:35:44
that not true?
00:35:45
>> Yeah. So with with with radioisotopes
00:35:47
again because you have to you have to
00:35:48
have a a manufacturing supply that you
00:35:51
have to source locally in the US. Um
00:35:56
we haven't seen any competition coming
00:35:57
from China at all.
00:35:58
>> And if if they have a successful readout
00:36:00
though, would it not be like the case
00:36:04
that someone in China would say, "Hey,
00:36:05
let's go get some of the necessary
00:36:07
radioisotopes." And
00:36:09
>> they're they're I'm sure they can do it
00:36:11
for the Chinese market, but in terms of
00:36:13
then transfer transferring that over
00:36:15
here, we we haven't we haven't seen it
00:36:17
or kind of any wind of it at all.
00:36:19
>> And so then my last question, I'm sorry
00:36:20
for monopolizing. Why do you think the
00:36:21
markets discounted the value so much
00:36:23
since the IPO?
00:36:24
>> Oh gosh. Given the return in biotech
00:36:26
>> valuation, it's pretty classic biotech.
00:36:28
So it's traded flat since the IPO. uh
00:36:31
biotech investors are so insanely
00:36:32
short-term oriented that even though
00:36:34
we're now call it eight or nine months
00:36:37
from data that's still way too long and
00:36:39
so our expectation is the folks will
00:36:41
start accumulating this in the second
00:36:42
half in anticipation of the data coming
00:36:44
in the first quarter
00:36:46
>> Gavin you had a question
00:36:47
>> yeah sure so I in in in the distant past
00:36:51
I ran a biioharmaceutical fund uh and
00:36:54
you know it's a very hard job
00:36:55
congratulations on those numbers but I
00:36:58
ran that fund right after the human g
00:36:59
genome had been sequenced and there was
00:37:01
an expectation that the sequencing of
00:37:03
the genome was going to lead to this
00:37:05
explosion in therapies personalized
00:37:07
medicines etc etc and I don't think
00:37:10
broadly speaking we've made as much
00:37:12
progress over the last 25 years as maybe
00:37:15
people thought in the early 2000s and my
00:37:18
hypothesis is that the genome is too big
00:37:21
of a problem space for the human mind or
00:37:24
software written by humans and AI is
00:37:27
going to unlock a lot of kind of
00:37:29
revolution utionary therapies. So my
00:37:31
question to you, I will just admit it's
00:37:32
a selfish question. It is not about your
00:37:34
stock pitch, which is great. It's what
00:37:36
do you think the odds are that in the
00:37:39
lifetimes of everyone in this room, the
00:37:42
average human lifespan in a developed
00:37:44
country extends well past 100 to 125,
00:37:48
150. I would take the over on that uh in
00:37:53
no small part because we already have
00:37:54
one of the best longevity drugs out
00:37:56
there and folks don't even realize it in
00:37:58
the glip ones and the obesity drugs. So
00:38:00
one of the only things that's ever been
00:38:01
shown in act with actual data to extend
00:38:03
life is caloric restriction and that's
00:38:05
literally what all the obesity drugs do.
00:38:07
So I'm sure half the people in this room
00:38:08
are on one of them. Uh and that's just
00:38:10
the beginning because it's trained
00:38:12
people that you can inject yourself with
00:38:15
something and have healthy living
00:38:16
through pharmaceuticals. So I I think
00:38:18
that's only going to continue.
00:38:19
>> Oh, I got two questions from the
00:38:20
audience. First one, as the launch costs
00:38:22
per kilogram continue to fall, is there
00:38:25
a credible pathway to use space and
00:38:27
microgravity as a therapeutic variable
00:38:30
given that cancer cells appear to behave
00:38:32
differently in lowgravity environments?
00:38:35
>> That is a great question that's probably
00:38:36
not applicable to this.
00:38:38
>> Okay. And then the second question, what
00:38:41
would be a technological breakthrough
00:38:43
that could disrupt precision
00:38:45
radiotherapy as a result of AI at scale
00:38:48
to drug development and precancerous
00:38:50
screen?
00:38:50
>> Yeah, another awesome question. There's
00:38:52
a a small skunks work project within
00:38:55
Actis AI project. So with all these
00:38:58
biotech companies, they have their
00:38:59
little proprietary data sets that they
00:39:00
hope to leverage with various insights.
00:39:03
So a company like this with their many
00:39:04
proteins and everything else they're
00:39:05
trying to accomplish, they have their
00:39:07
own little tiny group of PhD data
00:39:10
scientist nerds who are seeing if they
00:39:12
can leverage that in a pretty decent
00:39:13
way. Is it so it's been really hard to
00:39:17
get CARTT in solid tumors? Um is it the
00:39:21
case that these kind of personalized
00:39:24
uh uh peptide based imunotherap uh
00:39:26
therapies are showing some efficacy in
00:39:28
some solid tumors and is that uh a space
00:39:31
that's going to expand and kind of
00:39:32
intersect here?
00:39:33
>> What's most promising that I think a lot
00:39:35
of folks have probably heard of is uh uh
00:39:38
a new drug for pancreatic cancer from a
00:39:40
company called Revmed was just another
00:39:41
targeted therapy. So for now there's not
00:39:45
a huge amount of progress from from
00:39:46
peptides. And have you looked at Droins
00:39:48
before? These kind of right-handed
00:39:50
proteins that seem to be able to
00:39:51
penetrate solid tumors.
00:39:53
>> Well, so one of the one of the neat
00:39:54
things about these mini proteins is
00:39:56
they're hopefully of the right size to
00:39:59
be able to deliver their payload inside
00:40:00
of the tumors.
00:40:01
>> Incredible. Oleg, thank you.
00:40:03
>> Thank you.
00:40:09
>> By the way, by the way, somebody just
00:40:11
yoloed into the stocks while Oleg was on
00:40:13
stage. It's up 6%. like the L. Don't do
00:40:16
that while we're all trying to buy as
00:40:18
well. Please come on.
00:40:19
>> Morning everyone. My name is Kyle
00:40:21
Samani. Uh thank you for being with us
00:40:22
at the all liquidity today. Thanks to
00:40:24
the besties for organizing. Today we're
00:40:26
going to be talking about a little known
00:40:27
asset, a little crypto asset called
00:40:29
Geonet. Uh which is building the rails
00:40:32
for AI. So let's jump in. Quick bit
00:40:35
about me. Uh I founded a firm called
00:40:36
Multicoin Capital about eight and a half
00:40:38
years ago. I stepped down a few months
00:40:39
ago. Um, and in my time there, I was
00:40:42
probably most well known for, uh,
00:40:43
leading all three rounds of investment
00:40:44
in Salana prior to Salana's network
00:40:47
launch, uh, in 2020. Um, I've been deep
00:40:50
in the crypto space for a very long
00:40:51
time. Uh, and I thought this would be a
00:40:53
very natural forum to talk about a very
00:40:55
interesting investment at the
00:40:56
intersection of crypto and AI. Uh, also
00:40:59
big shout out to David Sax.
00:41:00
Unfortunately, he's not here, but, uh,
00:41:02
David did seed multicoin uh, back in the
00:41:04
day. So, thank you, David, for believing
00:41:05
in me very early. All right, let's get
00:41:07
into geoet. So the way to understand
00:41:10
Geonet first is to look at GPS um
00:41:13
probably everyone in this room has been
00:41:15
in the situation on the left where
00:41:17
you're using your phone and your phone
00:41:19
is in the wrong spot facing the wrong
00:41:21
way. Right here you can see this guy
00:41:23
looks like he's facing a wall according
00:41:24
to his phone. Um, Geonet it
00:41:27
fundamentally is a new is it uses a
00:41:30
technology called RTK or real-time
00:41:32
kinematics where you can localize your
00:41:34
location down to about 2 centimeters for
00:41:36
context. GPS roughly the the precision
00:41:38
is about 2 m. So you're getting about
00:41:40
100x accuracy for very precise
00:41:43
geoloccation. Uh, as you can imagine any
00:41:45
form of kind of robotics can make use of
00:41:48
RTK drones being the very obvious
00:41:50
example. I'll touch on a few more just
00:41:52
in a couple minutes here.
00:41:55
Um, today Geonet is the world's largest
00:41:57
RTK network in the world and it's also
00:41:59
the fastest growing. Um, the three
00:42:01
companies you see on the left here,
00:42:02
Trimble, Hexagon, and Topcon, have all
00:42:04
been building RTK networks in some form
00:42:06
or fashion for call it 20 to 30 years.
00:42:09
Um, all of them combined have roughly
00:42:10
12,000 base stations deployed around the
00:42:13
world. GeoNet was founded in 2021. Uh,
00:42:16
began building out the network in 2022.
00:42:18
Uh, and today they are roughly twice the
00:42:19
size of the next three guys combined. Uh
00:42:22
today's geoet is live in 150 countries
00:42:24
around the world, more than 11,000
00:42:26
cities and covers roughly 80% of the
00:42:28
global population excluding some
00:42:30
sanctioned countries. Um so this thing
00:42:32
is really growing quickly. Uh you might
00:42:34
say, how did these guys build this
00:42:35
network so fast? Uh and the key is
00:42:36
really this decentralized crypto model.
00:42:38
Um so here we're looking at literally a
00:42:40
photo of a geoet base station on the
00:42:42
roof of someone's house. The the global
00:42:45
geoet network, those 22,000 nodes are
00:42:47
not being built and deployed by some one
00:42:49
that looks like AT&T or Verizon. Those
00:42:51
base stations are being deployed by any
00:42:53
random guy or hobbyist or professional
00:42:56
or small business owner who wants to
00:42:57
make some extra money. You can go on the
00:42:59
Geonodes website today. You can buy one
00:43:01
of these base stations. They're a few
00:43:02
hundred bucks. You put it on your roof
00:43:04
of your house or your small business. It
00:43:06
broadcasts radio waves. You make money.
00:43:08
Uh you actually get paid in geode
00:43:10
tokens, which is the really cool part
00:43:12
about this incentive system to bootstrap
00:43:13
this thing to get it off the ground. So
00:43:15
the Geonet network started about 4 years
00:43:17
ago doing this. Today it's now the
00:43:19
largest fastest growing in the world by
00:43:20
a pretty wide margin. If you want a
00:43:22
sense of scale, uh here we're looking at
00:43:24
their coverage in United States.
00:43:25
Obviously, every single major metro is
00:43:27
covered, but even if you look at most of
00:43:28
the rural parts of the country, you're
00:43:30
covering actually the vast majority of
00:43:31
even the rural areas. Um let's talk
00:43:34
about some of the customers and use
00:43:35
cases for this. We'll start with
00:43:36
agriculture first. Um the USDA actually
00:43:39
launched a couple years ago a program to
00:43:41
encourage farmers and ranchers to use uh
00:43:43
precise a technologies including RTK
00:43:45
networks. Um today actually geo the USDA
00:43:48
is now actually subsidizing uh many
00:43:50
farmers and ranchers all over the
00:43:51
country uh to adopt high precision a
00:43:53
most of which is powered by geodet.
00:43:56
Um getting into some specific examples
00:43:57
of that here we're looking at what's
00:43:59
called a robotic mule. Um this is made
00:44:01
by a company called Burrow. Uh obviously
00:44:03
this is transporting some grapes. You
00:44:04
could put anything on this. Has pretty
00:44:06
obvious application for bas almost any
00:44:08
farm or ranch you can imagine. With the
00:44:10
advent in computer vision, CPUs,
00:44:12
batteries, all the other AI stuff, these
00:44:14
things are growing like hotcakes, all of
00:44:16
them are going to be powered by Geonet
00:44:17
or something like it. Um, here we're
00:44:20
looking at John Deere. They have a new
00:44:22
service uh that they rolled out recently
00:44:24
called Global Unmanned Spraying Systems
00:44:26
or Gus. Um, these things drive around.
00:44:28
They literally spray plants with
00:44:29
pesticides and other things of that like
00:44:31
that. I did actually confirm this
00:44:33
morning there are wineries here in Napa
00:44:34
that are actually using John Deere Gus
00:44:37
uh uh vehicles. That was pretty cool. So
00:44:39
if you have some wine tonight, maybe it
00:44:40
was powered by by Gus, which powered by
00:44:43
Geonet. Um, obviously autonomous
00:44:45
vehicles has a pretty obvious
00:44:47
application for this. Um, TomTom is one
00:44:49
of Geonet's customers. TomTom is a
00:44:51
supplier to basically every every AV
00:44:53
program in the world, uh, excluding
00:44:55
maybe a couple. And today, TomTom is
00:44:57
using Geonet's data to update their maps
00:44:59
to get them more accurate and precise as
00:45:01
they need to cover every square inch
00:45:02
basically around the planet.
00:45:05
Um, one of my favorite use cases are
00:45:07
kind of the next wave of consumer
00:45:09
robotics, which are getting a lot of
00:45:10
hype these days. I think the most
00:45:11
obvious one are robotic lawnmowers. I
00:45:13
don't think anyone loves to mow their
00:45:15
lawn. Um, robotic lawnmowers are now
00:45:17
actually rolling out at pretty good
00:45:18
scale. They're estimated they're going
00:45:20
to sell 1 million robotic lawnmowers
00:45:21
this year, made by companies like Yarbo,
00:45:23
Sunseeker, and others. Um, all of those
00:45:26
these guys are all powered by Geonet.
00:45:28
Um,
00:45:30
next up, let's get to drones. Um the
00:45:32
world's largest drone manufacturer DJI
00:45:33
is a Geonet customer. Uh it's not in all
00:45:36
of their models, but it is in a lot of
00:45:37
their models. Uh and so obviously DJI is
00:45:39
sending a ton of traffic now over
00:45:40
Geonet. Uh in the coming uh you know
00:45:43
months and years as DJI wounds down in
00:45:45
the US and you have new a wave of
00:45:47
American drone manufacturers pop up. I'm
00:45:49
going to venture to guess that most if
00:45:50
not all of them are going to end up on
00:45:52
the GeoNet network as well. Uh the
00:45:54
Geonet team is based in the US has deep
00:45:55
roots here. What I love about Geonet is
00:45:57
it's a very obvious network effect
00:45:59
networks effect network effects
00:46:01
business. Um this thing looks like a
00:46:03
natural telecom, right? You have base
00:46:04
stations kind of all over the world. You
00:46:06
got to cover the whole planet. Um
00:46:08
telecoms naturally form monopolies
00:46:10
historically. I think the same is likely
00:46:11
to be true here. Today, Geonet is the
00:46:13
world's largest and fastest growing
00:46:15
network with also the lowest cost
00:46:16
structure by a very wide margin because
00:46:18
of this decentralized nature where
00:46:20
people just put these things on top of
00:46:22
their house.
00:46:24
In terms of where the business at, the
00:46:25
business just crossed about $1 million
00:46:27
in annualized run rate a few days ago.
00:46:29
Uh, and it's growing more than 3x
00:46:30
year-over-year. I think it's going to
00:46:32
probably more than triple over the next
00:46:33
12 months. Um, what's really cool about
00:46:35
GeoNet is how capital efficient it is
00:46:37
and how they're actually returning
00:46:38
capital to token holders. So today, uh,
00:46:41
the Geonet network is taking of that 11
00:46:43
million in revenue roughly, uh, excuse
00:46:46
me, 80% of it is being used to make open
00:46:48
market purchases of Geo tokens. Uh, and
00:46:50
this is all visible on the Salana
00:46:52
blockchain. they have all the addresses
00:46:53
are published and stuff. So, it's all
00:46:54
verifiable in real time. Uh that means
00:46:57
$8.8 million right now per year is going
00:46:59
into buying, you know, Geonet tokens on
00:47:01
the open market. Uh what's amazing is
00:47:04
that last 20% is they're they're
00:47:05
covering all their R&D costs and scaling
00:47:07
out now their business development team.
00:47:09
With a business like this, of course,
00:47:10
like it's a pretty small network of
00:47:12
customers. The guys who work at John
00:47:13
Deere know the guys who work at DJI, who
00:47:15
know the guys who work at TomTom. And
00:47:16
so, this thing is now growing virally
00:47:18
amongst this kind of core community of
00:47:20
of customers. Um, and as you can imagine
00:47:23
with customers who sign up for a service
00:47:24
like this, they tend to ramp up their
00:47:26
usage of that service over time. So once
00:47:28
someone starts rolling out GeoNet in the
00:47:30
first year, they're usually spending
00:47:31
about $60,000 per year. After two years
00:47:33
though, they're usually spending about
00:47:34
$170,000 per year. So the average Geonet
00:47:37
customer is growing their their revenue
00:47:38
with GeoNet about 3x in that second
00:47:40
year. Um, obviously then we look at
00:47:42
their just their customers. They've
00:47:44
signed up in the last two years. You can
00:47:45
see they 5x their customer base last
00:47:47
year. Those are that net new customers.
00:47:49
So applying some pretty simple math
00:47:50
here, you can see they have a very clear
00:47:52
path to more than 3x this year as this
00:47:54
thing ramps up. Just to wrap things up
00:47:56
summary, um Jonet is the world's largest
00:47:58
RTK network, growing the fastest. It has
00:48:00
really obvious network effects and is is
00:48:02
likely to be a very natural monopoly
00:48:04
growing 3x year over year with a bunch
00:48:05
of flagship customers and brands that
00:48:07
you all know. Obviously, we have this
00:48:08
huge physical AI tailwind behind us now,
00:48:10
robotics and all the other amazing stuff
00:48:12
happening. Uh and they're returning
00:48:14
capital to shareholders. Uh the token
00:48:16
does trade on the Salana blockchain. Uh
00:48:18
if you want to buy, it trades 247. The
00:48:20
ticker is geode geo d. Um so if you want
00:48:23
to actually get some geo tokens, I
00:48:25
encourage you to sign up for a crypto
00:48:27
wallet, a salon wallet, and you can go
00:48:28
ahead and buy geode tokens from there.
00:48:31
And with that, I think we are ready for
00:48:33
some Q&A.
00:48:36
>> Awesome. Um what's the market cap?
00:48:39
>> Oh, sorry. It's trading about 150
00:48:40
million on a fully diluted basis. If you
00:48:42
were to go look at any of the crypto
00:48:44
price websites like coin.go require
00:48:45
market cap. They're going to show you
00:48:46
something like 60 or 70 million. That's
00:48:48
because not all of the tokens are
00:48:49
floating yet, but the fully diluted
00:48:51
number is about 1 million.
00:48:51
>> Is there a corporation behind it or is
00:48:54
this just like a project in the Cayman
00:48:56
Islands in Panama with a board that
00:48:59
nobody knows who's on it? Tell us about
00:49:02
governance.
00:49:03
>> Uh so the Geonet team is uh US-based
00:49:05
corporation. There four teams in San
00:49:07
Francisco. The CEO's name is Mike
00:49:08
Horton. Uh really, really good guy. He's
00:49:10
been building in this kind of IoT smart,
00:49:13
you know, device space for a while. the
00:49:15
relationship between the corporate
00:49:16
entity and the token and which one
00:49:19
should we own?
00:49:20
>> Uh you should own the token because I
00:49:22
own a lot of the token uh as as you
00:49:24
might imagine. I don't own any of the
00:49:25
equity. Um the relationship is geoet the
00:49:28
c you know the company is facing John
00:49:30
Deere DJI all these companies and they
00:49:33
have a contractual relationship with the
00:49:34
Geonet Foundation to use 80% of their
00:49:36
revenues to buy tokens off the open
00:49:38
market. And that's
00:49:39
>> that corporation raised venture capital
00:49:41
or anything? Uh yes uh my prior company
00:49:44
Multicoin actually led around in Geonet
00:49:46
previously.
00:49:47
>> Okay Kyle I have I have many questions
00:49:49
from the audience so bear with me.
00:49:50
Question one do you like Helium as much
00:49:53
which is Geonet for 5G signal.
00:49:56
>> Uh yes I actually led multicoins
00:49:58
investment in Helium six or seven years
00:49:59
ago uh and continue to be a very big
00:50:02
long-term believer. They actually had
00:50:03
big news go out this morning. Uh but
00:50:05
yeah I'm a big Helium fan.
00:50:06
>> Question two. There's a long list of
00:50:09
deepin projects that have failed because
00:50:11
people just don't value the token
00:50:13
rewards. Why is this any different?
00:50:15
>> I mean, they're returning capital to
00:50:16
shareholders. This thing is, you know,
00:50:18
returning $8.8 million to shareholders.
00:50:19
It's trading at $150 million valuation
00:50:22
and it's going to grow 3x this year.
00:50:24
It's an unbelievably cheap asset. It's
00:50:26
just people aren't paying attention
00:50:27
because it's crypto bare market right
00:50:28
now.
00:50:29
>> Okay. Uh from Sam,
00:50:30
>> sorry, let it's a securitized interest
00:50:33
in the cash flows from the customers
00:50:35
>> effectively. Yes. It is a revenue. It is
00:50:38
a
00:50:38
>> It's a revenue share token.
00:50:39
>> Correct. 80%.
00:50:41
>> Okay. So, the more John Deere pays
00:50:43
Geodet the company, the more you
00:50:46
basically deprecate the tokens, which
00:50:48
should cause the token,
00:50:50
>> they're buying tokens to open the
00:50:51
market. Correct.
00:50:52
>> Yes.
00:50:52
>> Okay. From Sam, what acres value the
00:50:54
equity or the token? Similar to
00:50:56
question, how does the value acrruel
00:50:58
mechanisms square or not with current
00:51:00
securities laws or what's contemplated
00:51:02
in the Clarity Act?
00:51:03
>> Uh, yeah. Um, so the one answer to your
00:51:05
question is the the tokens are the ones
00:51:07
acrewing value because they're taking
00:51:08
80% and buying. The other 20% is
00:51:10
obviously funding operations. They have
00:51:11
engineers, salespeople, all that stuff.
00:51:13
Um, so that's all there and being
00:51:15
funded. In terms of securities laws, uh,
00:51:17
the Clarity Act, uh, passing is
00:51:19
certainly very good for Geonet. Uh, I'm
00:51:20
not a lawyer, so I'm not going to tell
00:51:22
you that, you know, it it passes the
00:51:23
bars set in the Clarity Act, but I can
00:51:25
tell you I'm an optimist and I've been
00:51:26
very involved in the Clarity Act, uh,
00:51:28
and I'm not too worried about it.
00:51:30
>> Okay. Can I can I ask about the business
00:51:32
just real quick? So John Deere, I know
00:51:34
this space somewhat well. I used to
00:51:36
manage a company called Precision
00:51:38
Planting in Agriculture and um there was
00:51:41
John Deere makes their own RTK systems.
00:51:43
So when you like run a a piece of
00:51:46
equipment that relies on RTK, you're
00:51:47
buying in the construction industry,
00:51:49
Topcon or Leica or Trimble or John Deere
00:51:52
and you install the RTK base stations
00:51:54
and you run your equipment. Why would
00:51:57
John Deere and others want to rely on
00:52:00
this system as a different like why is
00:52:02
it better than like the systems that
00:52:04
they're already using? It wasn't quite
00:52:06
clear to me.
00:52:07
>> I mean capex versus opex, right? Like
00:52:09
right these networks are all over the
00:52:10
world now. They're running at very low
00:52:12
cost. GeoNet is is probably a third to
00:52:14
half sorry a third to a quarter the
00:52:16
price um than buying up your own capex
00:52:19
and doing it. And it's just available
00:52:20
everywhere. So now it just reduces the
00:52:22
sales cycle time for John Deere when
00:52:24
they just say buy the tractor. It's
00:52:26
good.
00:52:26
>> There's another big push right now for
00:52:28
microats to be an alternative to GPS in
00:52:31
a way that they can actually provide
00:52:33
subcm resolution effectively replacing
00:52:36
both GPS and RTK using a a mesh network
00:52:40
from SpaceX launched or actually SpaceX.
00:52:43
I don't know if SpaceX has looked at
00:52:44
doing this, but um I know that there is
00:52:46
a very wellunded company that is trying
00:52:48
to put up microats to basically replace
00:52:52
GPS and RTK. Doesn't that ultimately
00:52:55
kind of wash out the need to have all
00:52:56
these earth-based base stations?
00:52:58
>> I there's no chance they can compete on
00:53:00
cost because just sending things to
00:53:02
space with satellites that's so I mean
00:53:03
these geoet uh base stations are a few
00:53:06
hundred bucks. Like you're just not
00:53:07
going to compete on cost with with
00:53:08
geoet.
00:53:10
>> Do you think that this is a viable
00:53:11
replacement at scale and saturation for
00:53:14
GPS itself?
00:53:15
>> No. GPS is definitely very different. Uh
00:53:18
and the SLA is different.
00:53:20
>> You've got to you've got to have
00:53:20
ubiquity for
00:53:21
>> Yeah. for GPS um for GPS alternative
00:53:25
which is why you have to have the
00:53:26
satellites everywhere. You got to have
00:53:27
enough but if you get enough satellites
00:53:29
you can actually get to RTK precision
00:53:31
and you don't need to have the big
00:53:32
expensive GPS.
00:53:33
>> You'd have a hybrid situation where you
00:53:35
have a bunch of GEO and LEO plus a bunch
00:53:37
of base stations all over the place.
00:53:40
That hybrid situation probably
00:53:41
>> you could actually the Leo the LEO alone
00:53:44
can replace all of the the geo stuff.
00:53:46
That's the goal. And then um if you get
00:53:48
enough of them which SpaceX unlocks.
00:53:51
Yeah.
00:53:51
>> And um Kyle, what what about like other
00:53:54
tokens when you think about other
00:53:57
compute tasks like work to be done for
00:53:59
example? There's a bunch of tokens that
00:54:01
have emerged in distributed training.
00:54:03
How did you hone in on this and exclude
00:54:05
the others?
00:54:06
>> I mean, not meaning prefer this over
00:54:08
that.
00:54:08
>> I mean, I met the GeoNet founder years
00:54:10
ago. He pitched us and I've gotten to
00:54:11
know him and followed it. The
00:54:12
distributed training stuff, there's a
00:54:14
whole bunch of people trying it. I I'm
00:54:16
pretty skeptical. I don't think any of
00:54:17
it's going to work. Um the distributed
00:54:19
inference stuff is is possible although
00:54:21
it has not worked as well as we would
00:54:22
have hoped. I did put some money behind
00:54:23
that a few years ago. It's it's working
00:54:25
but not not A+. Um one last thing
00:54:28
actually David on on your prior question
00:54:29
I want to highlight is also energy use.
00:54:31
Going to space just consumes way more
00:54:33
energy than going to a base station
00:54:35
that's you know on the ground. Um and so
00:54:38
yeah for a tractor maybe that doesn't
00:54:39
matter but for a drone or for any other
00:54:40
battery sensitive application ground is
00:54:43
always going to be uh the preferred
00:54:45
solution.
00:54:45
>> Super interesting. Well done. Thank you.
00:54:47
Thank you so much.
00:54:49
>> All right, guys.
00:54:51
>> Before we vote, Timoth, give your
00:54:53
feedback.
00:54:53
>> Here's what I like. I I I apply the Stan
00:54:56
Ducken Miller school of invest
00:54:58
investigate. I really believe in it.
00:54:59
>> Yes.
00:55:00
>> Um if you don't have any skin in the
00:55:01
game, you don't care. And this is the
00:55:03
kind of stuff that I love. I love
00:55:04
hearing ideas like this.
00:55:05
>> I love all four. My my difference is in
00:55:08
sizing. So, you know, there's there's
00:55:12
certain asymmetric alpha that each one
00:55:14
of these exhibits and then there's very
00:55:16
different downside risk for each of
00:55:18
them.
00:55:19
>> Uh, and then there's also liquidity
00:55:20
issues. So, for example, like I love
00:55:22
Kyle's idea. The problem is I I could
00:55:24
not get enough working for me where so
00:55:27
you I don't even think I could get a
00:55:28
million dollars in today. It would to
00:55:30
scale in it would move the market. Um,
00:55:33
so I would have to I'd have to probably
00:55:34
I'd be like 10 20 30,000 and then maybe
00:55:37
start to buy into it. talent. I think
00:55:39
they could absorb tens of millions and
00:55:41
people wouldn't bite an eyelash. Um
00:55:45
the biotech company the issue there is
00:55:47
that I think that there is as you said
00:55:49
Freberg this discontinuous
00:55:52
illi liquidity zero risk but then
00:55:54
there's the 10x upside. So there's just
00:55:56
like huge
00:55:58
>> Lily will bid for it
00:55:59
>> and then MGM I think is just so I think
00:56:00
MGM and Talon are the ones you could
00:56:02
have huge sizing in
00:56:03
>> and then the other ones I think you have
00:56:05
a piece because they're like lottery
00:56:06
tickets. I think your point on MGM.
00:56:09
>> Okay. Wait, hold on. Let me just review.
00:56:10
So, company number one
00:56:13
was MGM
00:56:14
>> and that was
00:56:15
>> Resorts. Okay.
00:56:17
>> Company number two,
00:56:19
>> Talon.
00:56:20
>> Talon Energy.
00:56:21
>> Company number three,
00:56:22
>> Actis
00:56:23
>> Therapeutics. Yeah.
00:56:24
>> And then
00:56:25
>> Geodet.
00:56:26
>> Geodet. Not company, but I guess token.
00:56:29
>> Yeah.
00:56:29
>> Company number four, Geodet.
00:56:31
>> And you're buying the token, not the
00:56:32
company. Do you think the um maybe for
00:56:36
you too, Gavin, like the
00:56:38
>> Gavin, you rank them.
00:56:39
>> Well, no, even before you rank, just
00:56:42
tell us what you think of the format and
00:56:44
then assess the companies. We'll do
00:56:46
ranking at the end. We're going to do 4
00:56:47
32. We're going to do 4 3 2 1 on stage,
00:56:50
but give me your general ideas about the
00:56:53
pitches, what you liked, what you did.
00:56:54
>> I thought the pitches were great. Um I
00:56:57
thought the format was amazing. I would
00:56:58
for sure expand it next year. There are
00:57:00
platforms that you guys could have a all
00:57:03
all-in basket or ETF that people could
00:57:07
trade in. So like maybe that's
00:57:08
something.
00:57:08
>> Will you do it next year?
00:57:10
>> Will I pitch next year?
00:57:11
>> Yeah.
00:57:12
>> Jake, I'll do anything. He's locked.
00:57:15
He's locked.
00:57:16
>> Actually, here's what I would ask Gavin
00:57:17
to put you on the spot. Next year I
00:57:19
would we I think we would all learn and
00:57:21
benefit if you would do
00:57:23
>> um silicon and memory super cycle.
00:57:28
>> Sure. Would you be willing to do that
00:57:29
for us?
00:57:29
>> I'll do it.
00:57:31
>> Sign me up.
00:57:32
>> Perfect. Great. Sign me up. Oh, thank
00:57:33
you. So, keep going.
00:57:34
>> Well, no. As far as the pitches, I do
00:57:36
think um I think it's important to
00:57:38
disagregate like what was a really great
00:57:41
entertaining pitch versus what I think
00:57:42
is is a really good riskreward. Um I
00:57:46
thought Oleg and Kyle did a great job
00:57:48
with the pitches, but I'm I'm not a
00:57:51
healthcare investor, nor am I a crypto
00:57:53
investor. I thoroughly enjoyed the
00:57:55
presentations. I actually thought GET
00:57:57
was very interesting. Um I'm happy to
00:57:59
learn from Oleg that I might lift well
00:58:01
into my 100s. That was good news for me
00:58:03
and everybody in the room. I enjoyed all
00:58:05
the um the military um terminology and
00:58:08
analogies.
00:58:09
>> Yeah, that was really great. Huh.
00:58:10
>> That was great.
00:58:11
>> Really great.
00:58:12
>> I do think um from a pure riskreward
00:58:15
perspective, I thought MGM was the best.
00:58:18
um your downside is really capped
00:58:19
because of the Barry Diller bid and then
00:58:21
you have uh Japan and Dubai as I think
00:58:24
very valuable future sources of value.
00:58:27
Uh and and I do think talent is also a
00:58:29
very compelling risk. I just think
00:58:32
everything in AI is going to need to
00:58:35
grapple with increasing regulatory risk
00:58:37
which we talked about last time um that
00:58:40
that I was on the pod with you guys and
00:58:42
I don't know how to dimensionalize that
00:58:45
and um you know I've been
00:58:48
>> like the big negative externality for
00:58:50
talent is nothing to do with talent.
00:58:52
>> Nothing to do with talent.
00:58:53
>> It's like something over the top from
00:58:54
the US government caps prices something
00:58:56
something.
00:58:57
>> Yeah. You have nationalizes the lab.
00:58:59
>> You have a change in administration. You
00:59:00
have a change in Congress. There's laws
00:59:02
that are passed that I think it
00:59:05
terrestrial computes the utility supply
00:59:08
demand. But I actually think outside of
00:59:10
that, Talon was super compelling. And
00:59:12
>> so you got MGM, you got Talent. Now the
00:59:14
other two.
00:59:15
>> I I I I thought they were both great
00:59:17
pitches. I can I tie them for third just
00:59:20
>> Well, no, don't even give the score.
00:59:21
just any feedback on those two ideas or
00:59:24
those are just a little bit lottery
00:59:26
ticket for you or
00:59:28
>> No, I thought Actis was was very
00:59:30
compelling. They're trying to trying to
00:59:32
do something different as Oleg said if
00:59:34
you ever get a biotech company that be
00:59:36
can become a platform and they have a
00:59:39
mechanism whether it's of drugging
00:59:42
whether it's targeting or if you have
00:59:45
something that is broadly applicable
00:59:47
that is when you can get these really
00:59:49
really big hundred billion dollar plus
00:59:51
outcomes in biotech which are rare so I
00:59:53
thought that part of um activis was
00:59:56
super compelling
00:59:57
>> and um
00:59:58
>> you don't play crypto
01:00:00
>> I don't play crypto, but I thought the
01:00:02
entire go Geonet discussion was
01:00:04
fascinating and I'm happy.
01:00:05
>> Is there anything that would get you off
01:00:06
the bench and make you jump into the
01:00:10
crypto game or it's just you're why are
01:00:12
you not playing the crypto game?
01:00:14
>> I feel about crypto exactly the way I do
01:00:17
about snowboarding. Okay. I'm I'm not a
01:00:21
very good athlete. I've spent a lifetime
01:00:24
learning how to ski and I'm okay. Um,
01:00:28
and just the idea of getting on a
01:00:29
snowboard, having, you know, thousands
01:00:31
of hours of ski instruction,
01:00:33
>> you don't want the pain for the game.
01:00:35
>> Yes. And I have 25 years of lessons,
01:00:39
learnings, pain, scars from from
01:00:43
investing in equities and public
01:00:44
securities and just crypto. It's a
01:00:47
little bit like snowboarding for me, but
01:00:48
like, you know, everybody who wants to
01:00:51
snowboard, that's great.
01:00:52
>> Everybody wants to do crypto, that's
01:00:54
great. Just please don't go sideways
01:00:55
down the mountain and ruin the powder.
01:00:57
David,
01:00:58
>> I think your assessment of MGM Talon,
01:01:01
>> I think I think MGM uh I look at the
01:01:03
kind of return upside, the downside and
01:01:07
the timeline. MGM's like probably a 3x.
01:01:10
I think it's also missing this point
01:01:12
that I've heard a lot about on you can
01:01:14
actually upgrade the monetization on
01:01:15
these Vegas properties. We were talking
01:01:16
to a friend of ours in Vegas. They're
01:01:19
they're making a million bucks a day in
01:01:20
incremental ibita every day that they
01:01:23
have a show at the sphere um at the uh
01:01:26
at the Venetian hotel which is an
01:01:28
unbelievable statistic which tells you
01:01:30
that when you have the entertainment
01:01:31
draw the gambling revenue just flies
01:01:34
>> flies
01:01:35
>> and so Barry Diller I have heard
01:01:37
separately has been spending a lot of
01:01:39
time on trying to reinvent the
01:01:40
entertainment at these properties and
01:01:42
thinks he has an idea on how to do it
01:01:43
which will cause the gambling revenue to
01:01:45
fly. So, I think even if you discount
01:01:47
the upside on these new locations,
01:01:49
there's probably a lot of work to be
01:01:50
done. And I do like the floor on the bid
01:01:53
and then you got call it 3x in 2 years
01:01:56
even if this bid goes nowhere and they
01:01:58
keep the thing running and they're like
01:01:59
we're going to reject the bid and keep
01:02:01
running independently. Talon is maybe 3x
01:02:05
upside, 5x upside, but it's eight years
01:02:07
out. And I think one of the other
01:02:08
challenges with Talon that I would kind
01:02:10
of use as a valuation metric is I think
01:02:12
it's more interest rate sensitive than
01:02:14
MGM is um because the power purchase
01:02:17
agreements really are where a lot of the
01:02:18
revenue comes from. So you're going to
01:02:20
get a discount rate that's a multip
01:02:21
that's a function of where interest
01:02:23
rates are sitting. So I think if
01:02:25
interest rates shoot up which some might
01:02:27
argue there's there's risk there you
01:02:29
actually get margin compression from
01:02:31
that 15x outlook that he has for Talon.
01:02:34
So that would be my kind of downside
01:02:35
scenario on Talon. um in the in the time
01:02:38
ahead and Actis I do worry because I'm
01:02:40
an investor in a company that's got a D
01:02:41
protein conjugate that shows really
01:02:44
strong efficacy in getting solid tumors.
01:02:46
I think that there are new modalities
01:02:47
for therapeutics for solid tumors that
01:02:49
are being discussed that that may kind
01:02:51
of put this at risk. I think the China
01:02:53
risk is legit because I've seen it
01:02:54
across the board in biotech. Everything
01:02:56
gets ripped off and people go to China,
01:02:58
but they could have a hit and Lily could
01:03:00
bid on it in 6 months if they actually
01:03:01
get a good readout. So there's certainly
01:03:03
upside, but the downside's probably 50
01:03:05
75% if they get a bad readout or China
01:03:08
or some new modality comes out. So I
01:03:11
think the ranking is probably MGM Talon
01:03:12
Actis and then the for me the geodet
01:03:15
piece uh I I just think the space thing
01:03:17
is is likely the path. It's going to
01:03:19
replace all RTK and all GPS in the next
01:03:22
decade. Um it's an inevitable piggyback
01:03:24
on systems that are already going up.
01:03:26
>> All right, great. So I think I've got
01:03:27
everybody. Uh for me, I put them into
01:03:29
two buckets. Um I think uh AKTS and GOD
01:03:35
those are like lottery tickets could be
01:03:37
crazy returns but you know there's a
01:03:38
there's a big probability of a zero
01:03:40
there if they don't you know uh actually
01:03:44
work and then MGM and Talon obviously
01:03:46
got the downside protection and those
01:03:49
feel like um people will always gamble
01:03:52
and leave the lights on. So I kind of
01:03:54
like both of those. I put 200k into each
01:03:56
in real time.
01:03:57
>> Gamble and leave the lights. Uh, so
01:03:59
that's just like my I don't have a
01:04:00
public vehicle.
01:04:00
>> Did you actually buy?
01:04:01
>> I'm just day trading.
01:04:02
>> I I bought half of his action
01:04:06
and I don't have a Robin Hood account. I
01:04:08
have to call my office. So I was like
01:04:10
just I'll take
01:04:10
>> you lose, buddy.
01:04:11
>> I'll take half your I didn't see you
01:04:14
with your thumbs.
01:04:14
>> I'm up 7% across the portfolio. So I
01:04:17
don't think I can include you here.
01:04:18
>> Steps to buy.
01:04:19
>> I did. I I waited the three in the order
01:04:21
I said on my So anyway, I I'll just give
01:04:24
mine really quick. I I will go MGM,
01:04:26
Talon, uh, G, AKTS.
01:04:31
>> Gavin's only gonna make trillion.
01:04:32
>> Let's bring the Let's bring our four
01:04:34
pictures out.
01:04:35
>> We have $1,000.
01:04:36
Please get the
01:04:38
>> two men hugging statue. Wait, wait, no.
01:04:40
Before you announce it, I need the
01:04:43
extremely alpha male heterosexual
01:04:45
trophy. The all-in heterosexual alpha
01:04:49
male trophy, please. And I need our four
01:04:51
pitchers to come on stage. It makes it
01:04:54
more exciting. It's like makes it
01:04:55
uncomfortable when like they show the
01:04:58
five people for best actor.
01:05:02
>> Yeah.
01:05:04
>> Yes.
01:05:09
>> You put those on the table.
01:05:11
>> But wait, where's my award doing? The
01:05:13
award. You guys have the award.
01:05:14
>> Please bring me the extremely
01:05:15
heterosexual alpha male award.
01:05:19
>> You'll see why when I show you the
01:05:20
award. Pass me this.
01:05:21
>> Over a little more.
01:05:22
>> All right.
01:05:23
>> Bring me that award. Let me show you how
01:05:25
we 3D modeled this.
01:05:26
>> No one wants to see this.
01:05:27
>> Look at this. This is two men
01:05:30
>> uncomfortably hugging. And the way we
01:05:32
did this, it's the best. Come here,
01:05:33
Freeberg. I'll show you. I'm not doing
01:05:34
it with you.
01:05:35
>> Come on, Freeberg.
01:05:36
>> You do it tomorrow.
01:05:36
>> Free. Okay, fine. He's extremely
01:05:38
comfortable.
01:05:39
>> That's David and I.
01:05:40
>> It's David and you. But let's show them
01:05:41
how we modeled this. We just did a long
01:05:43
>> This is uncomfortable. And we hold it
01:05:45
for five extra seconds.
01:05:47
>> At 2 minutes, you get the release of
01:05:48
oxytocin. There it is.
01:05:50
>> Okay. So, gentlemen, this is it. Do you
01:05:53
guys have the results? Go ahead.
01:05:54
Audience award.
01:05:55
>> Audience award.
01:05:57
>> So,
01:05:58
based on 150 votes from the audience,
01:06:02
uh, do I just go four to one?
01:06:03
>> Four to one.
01:06:04
>> Four to one is more exciting.
01:06:05
>> Okay. Fourth place, uh, with 5% of the
01:06:08
vote was Kyle Sani.
01:06:09
>> Okay. Well done on the board.
01:06:13
>> A very close
01:06:15
second place.
01:06:16
>> No, third. Third.
01:06:17
>> Third place with 21% of the vote. Oleg
01:06:21
rock
01:06:22
>> leg. Oh boy, we're closing in here,
01:06:23
guys. Very dramatic.
01:06:26
>> And with 50 50%
01:06:30
who's number two.
01:06:30
>> I'm going to go to you. No, you say
01:06:32
number one now.
01:06:33
>> Okay. Okay.
01:06:33
>> No. Okay. Well, sorry. Yeah, you're
01:06:35
right. With 24% of the vote
01:06:38
>> in second place,
01:06:42
>> Aaron Cowan for MGM. NUMBER ONE WITH 50%
01:06:45
of the vote. Dan Drafus.
01:06:47
>> Wow. Unbelievable. Give it up. Nicely
01:06:51
done. Now the bestie though.
01:06:52
>> Wait, hold on before we do the bestie.
01:06:54
How do you feel right now having won
01:06:56
this? Pass him the award. You guys look
01:06:58
so uncomfortable.
01:07:00
>> You guys are really It's very
01:07:03
>> But pass him his award for a second and
01:07:04
let him hold it.
01:07:05
>> Give it academy award.
01:07:07
>> Thank everybody how you got to this
01:07:09
place.
01:07:09
>> Say a few words. I got my award. I got
01:07:13
my tequila.
01:07:14
>> Thank you.
01:07:14
>> There you go. All right. Well done.
01:07:16
>> Okay. Now Okay.
01:07:18
>> That's the award. 4 3 2 1. It's uh
01:07:21
relatively similar here. Uh fourth place
01:07:24
was Kyle Simmani. Okay.
01:07:25
>> Third place was Oleg.
01:07:27
>> Second place Dan Drafus. First place
01:07:31
Aaron Cowen. Big upset. Flip the
01:07:33
audience vote.
01:07:34
>> There you go.
01:07:34
>> All right. So MGM wins.
01:07:36
>> All right.
01:07:37
>> Thanks guys.
01:07:37
>> This was amazing.
01:07:39
>> All right. Thank you all for
01:07:40
participating.
01:07:41
>> Thank you very much.
01:07:42
>> Thank you so much for coming and we'll
01:07:44
see you next
01:07:53
I'm going all in.
