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all right everybody welcome back to your
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favorite podcast the Allin podcast it's
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episode 164 I'm down here in Miami with
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me again of course the dictator chairman
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himself J off poly hoaa and the Rainman
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yeah burn baby David saaks
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unfortunately we had a little bit of a
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challenge this week we don't know where
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freedberg is he's somewhere lost in his
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Apple Vision Pros but he'll be back next
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week as you guys know I'm incredibly
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generous with my friend so I sent all
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the besties the Apple Pro goggles and so
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these Apple Pro goggles are amazing but
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uh you bought me a pair of the Apple Pro
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yeah we talked about this yeah they all
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you guys actually you were using them
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you just forgot but uh freiberg's been
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using them nobody can find freedberg
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right now because
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apparently he went to Uranus I recorded
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in all of these sacks what's happening
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inside each of our Apple
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goggles
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God oh my God and so but trath here they
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are we actually took a picture I had Nat
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take a picture of you wearing them you
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want s you want to see what jamat was
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doing in his goggles yeah let's see I
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recorded it oh yeah look at that see he
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he imagined that he did leg day look at
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those
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legs leg day oh my God he's reing he's
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still reving in that uh thirst trap that
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he posted in he I know but you see those
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legs the Apple Vision Pro Tim Cook can I
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sorry look at that can I say something
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funny about this which is that my legs
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are actually darker than my torso and my
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upper body it's the weirdest thing and
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so you have it in reverse but it is true
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that my my legs are a different shade
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than my my trunk and my arms and my body
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okay well Sachs by the way saaks you
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know he loves his goggles CH do you have
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any interest in seeing what sax was
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doing with his goggles oh my God I can't
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imagine there it is s was speed running
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he was doing the speed run on
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DJ absolutely getting in there that's uh
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Saving Private Ryan right yeah that's
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you that's you you were speedr running
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Saving Private Ryan there oh I got them
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too yes I but I didn't record myself I
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didn't record myself I maybe nicked it
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oh I was in there oh look what am I
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doing ohing
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the let your winners
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ride
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[Music]
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Ravid said we open source it to the fans
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and they've just gone crazy with it love
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you queen of Quin
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wait you're telling me that they didn't
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have the third or fourth investor in
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Uber up at ringing the bell with them at
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the original moment I could tell you the
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backstory I was invited by TK to come to
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the the ringing of the Bell
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TK was disinvited so he was there on the
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floor it was very awkward and then they
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didn't have him go up and ring the bell
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or be even there when Dar rang the bell
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it was because it was so controversial
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they didn't they banned him oh that's
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sad it was really it was really sad it
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was super sad U but anyway everybody I
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hope you're enjoying your so you were
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there or not I didn't go because okay he
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was like I'm we're gonna have a party
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but we're not gonna be able to ring the
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bell and it was just all like very did
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you go to the party I didn't I should
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have I regret not going but it was
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unclear if there was even going to be a
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party or if TK was going to go because
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of all the drama I don't know if you
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remember on CNBC they were like TK's in
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the building but he's not on the thing
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and it became a big
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brewhaha but yeah so I missed my window
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I mean if you had known that this was
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going to be the Big Exit in your life
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really the only one then you would have
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made every effort to attend everything
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right absolutely absolutely yeah I mean
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you're still riding on that ymer in
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PayPal I was I was talking to somebody
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about this the other day most people's
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careers you have like you know it's not
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like a smooth up upward trajectory
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there's like maybe a few Pops that you
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get you're lucky actually if you get a
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few because most people only have one or
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maybe two yes it's like a power law it's
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like anything else in Venture right
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abolutely like I'm sure if you think
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back on like the big outcomes in your
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life it's not like there's one every
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year and like some sort of smooth no
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gradient it's basically there's like one
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two or three over the course of your
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entire career that you remember right
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yeah absolutely yeah I mean it's it's
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good it's good to consider that because
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you have to enjoy every sandwich you
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have to enjoy every day what you're
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doing because those pops are out of your
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control you don't know when they're
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going to happen how they're going to
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manifest so but you guys didn't get
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these you didn't get the goggles but
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these goggles came out this week I don't
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know if you saw it what I will say is at
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the poker game three of the guys were
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talking about these goggles huh Sammy
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woke up at 5: in the morning on the
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first day he was he got them and then
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and Robo were telling me that they
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just like bought them randomly in the
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next couple of days and it was civilians
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there was no like waiting in line they
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were able to just order them is what
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they do yes but they're civilians just
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to be clear like in Silicon Valley we're
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kind of like H whatever you know we we
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played with oculus for so long but now
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these are out and there's a bunch of
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demos going around this one I thought
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was interesting I don't know if you saw
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this but watching in a basketball game
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it actually is quite compelling to have
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all the stats on the screen with you and
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you can kind of move them around I maybe
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could see myself doing this I don't know
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do you think you would do this watching
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a game maybe so wait are you watching
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the TV through the goggles like what
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part is real world and what part is
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augmented obviously all the stats are
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augmented reality but the TV itself is
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is that that's a stream that's a stream
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coming into the goggles yeah it's not
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your actual TV so you know I think he's
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just putting it on the TV there but you
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could literally be outside on your deck
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you could be on an airplane and do this
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so that's like but you can see through
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the goggles right is that the idea it's
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you can if you want I think you can
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still see through the goggles yeah is
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the idea yeah you know that you could
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you can see the fact that you live in a
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tattered apartment without a girlfriend
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dressed poorly you can see the dishes in
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your sink you can see the cupboard being
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be bare you can see the spoiled milk in
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your refrigerator your half-used bong
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that you use to soothe yourself to sleep
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at night whatever all of these 20 and 30
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year olds do to cope you'll see all of
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that while still being in an immersive
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environment it's amazing yes I mean it
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is so dystopian I just think like if you
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take out your phone your spouse is like
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what are you doing on your phone I can
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you imagine the audacity of being with
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your spouse or your family and being
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like hey guys I'll be right back and you
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put the goggles on to watch the next
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game with the Warriors I mean I think
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that's a snap divorce I don't know you
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said it very well about the the Oculus
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one which is you had a turn of phrase
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which I really like but basically it's
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like you were very quick to try it and
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then there was like a period and then
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you lost interest I think that's just
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going to be the key thing with this
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and the fact that it costs $3,500 they
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have to get the price down fast enough
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for average folks to want and be able to
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buy it right yeah I call this experience
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try the try oh my goodbye you try it
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you're like oh my God this is incredible
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and then you're like we put it in your
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draw you never use it again because
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there's not an application it's really a
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proof of concept look I think it's a
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great thing for Innovation that they're
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starting with this you know like you
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said expensive headset that maybe is not
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that ergonomic but eventually it'll come
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down and the form factor will be glasses
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or sunglasses Facebook I don't know if
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the product's out yet but do you see
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their product where the ren yeah it has
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the AI built into it and you can ask it
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questions and it will do computer vision
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and give you answers based on what it's
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seeing it was a phenomenal demo I don't
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know if that's actually real yet but did
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you see that demo yeah these are the
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Facebook Rayband glasses and I I do
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think these are meta smart glasses they
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work particularly well taking pictures
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and sharing them on Instagram so they're
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kind of single function he you know how
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Zuckerberg is he he cribed what Evan
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Spiegel did a couple years ago with the
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Snapchat but he put out a demo that was
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a little different the demo was like he
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was in his closet he was wearing this
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and he had picked out a shirt or
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something and that's like give me you
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know tell me what I should match this
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with yeah what goes with a gray shirt
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that I've worn for the last 14
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years did you guys see this thing where
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they all had to testify in front of the
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Senate yeah we might as well I guess
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could just jump right to that it was
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like a public flogging yeah once again a
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public public flogging we'll just jump
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to it real quick since we didn't want to
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go too deep on that one but Josh Holly
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made Zuck turn around and apologize to
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to people in the audience it was really
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intense yeah so this is the name of this
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hearing was big Tech and online child
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sexual exploitation crisis Zuckerberg he
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was questioned along with the CEO of Tik
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Tok Discord X and
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snap but obviously this is all
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around
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kids online safety and also section 230
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which I think these senators are this is
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one of the few bipartisan moments I
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think they're honing in on it yeah they
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they realize this is kind of like a
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winning they're gonna take a run at this
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they're taking a run at it for sure they
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realize it's a winning ticket but let's
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just play the clip and then I'll get
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your thought saaks and Jamal let me ask
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you this there's families of victims
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here today have you apologized to the
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victims I would you like to do so now
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well they're here you're on National
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Television would you like now to
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apologize to the victims who have been
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harmed by your product show them the
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pictures would you like to apologize for
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what you've done to these good people
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I I I I'm sorry for everything that you
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have all gone through it's terrible no
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one should have to go through the things
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that your families have have suffered
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and this is why we invest so much and
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are going to continue doing industry
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leading efforts to uh to make sure that
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no one has to go through the types of
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things that your families have had to
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suffer um a powerful moment and for
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Zuckerberg to get up and actually face
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the parents he turned around he faces
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par this a very dramatic moment and he
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apologized n n you respect him for for
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doing that and you think that was like a
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a powerful moment as well and and where
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does this all end up this was a kangaroo
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court I mean this was basically all
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theatrics this is basically a bipartisan
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moral Panic where all these senators are
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basically grandstanding and these are
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the same types of accusations that we've
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been hearing for years remember this
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goes back to the whole Francis Hogan
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claims where she says that Facebook
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wasn't doing enough to prevent various
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kinds of online harms and I think that
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we're going to regret where this All
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Leads because where it's going to lead
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if they do repeal section 230 is towards
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greater censorship all these companies
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are going to spend even more resources
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restricting what we can say and here
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online which is not the right direction
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listen do some harms occur online yes do
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I believe that Facebook is taking
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substantial measures to stop them yes I
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mean but edge cases are always going to
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get
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through when you're operating at that
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kind of scale there are going to be
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these edge cases of kids who got
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harassed or content that shouldn't have
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getting through it's just part of the
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fact that the internet operates a
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gigantic scale and these harms have
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always been out there I think that these
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companies do their best to try and stop
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them but they're always going to get
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through and you can't make every aspect
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of our society perfectly safe and
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harm-free somehow we have this
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expectation that we can eliminate 100%
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of every harm that occurs and I do think
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that these online companies have been
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unfairly picked on in a sense I mean if
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you're going to talk about these types
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of harms why aren't you targeting the
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music industry for all their incendiary
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lyrics that basically encourage all
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sorts
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of violent or sexist Behavior why don't
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you target the advertising industry for
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creating
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unrealistic body image expectations why
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don't you target the Kardashians for
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setting unrealistic expectations
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around image and you could go on down
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the list I mean why don't you Target
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Hollywood for releasing a show like
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Euphoria which is a hit it seems to me
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that the problem in our culture is not
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coming from the edge cases it's coming
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from the mainstream
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entertainment that is fully allowed and
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is popular and is our hit shows and hit
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records and hit products I mean that's
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where the toxic pollution is coming from
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in our culture so to turn around and now
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blame the online companies for creating
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all of this I think is just I I think
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basically they're being scape coded I
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mean again this is a moral Panic shath
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do you think it's a moral Panic or you
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know there have been statistics and
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studies done about what is viral on
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social media the algorithms targeting
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users The Addictive nature of it you
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spoke earlier about the addictive nature
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of just gamification on watches social
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media is a little bit different than
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music and some of these other things
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because they have these algorithms to
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increase watch time and engagement so I
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think that's what the other side would
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say where do you say what do you say
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chamat where do you stand on this let me
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just give a Cod out to a couple things
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that sack said it is true that we've
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taken turns attacking other forms of
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media when they were ascending in their
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popularity so in the 1990s if you guys
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remember politicians and their
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censorship attempts around gangster rap
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and NWA and two life crew and certain
00:13:27
songs Al gor's wife right what was her
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name
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TI tiate against rap lyrics what was the
00:13:33
NWA song you know the police that whole
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thing just sent off a huge fur about
00:13:39
people potentially David being motivated
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to kill cops or something right in the
00:13:43
80s there was a trial Judas Priest went
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on trial right because if you played one
00:13:48
of their records backwards supposedly it
00:13:50
promoted devil devil worship I don't
00:13:52
know who's playing records backwards but
00:13:54
if you did then it promoted devil
00:13:56
worship and I think a kid committed
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suicide and so they basic prosecuted
00:13:59
Judas Priest for it so that's comment
00:14:01
number one which is this is not new and
00:14:06
the reason why social media is in the
00:14:07
crosshairs is because instead of having
00:14:10
this really
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diverse ecosystem of many small players
00:14:15
you have three or four folks and so it's
00:14:17
easier to bring them up on stage and
00:14:20
sort of Piller them second is I actually
00:14:22
thought that Zuck had a lot of moral
00:14:23
Clarity because it's like that's a tough
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position to be in and the fact that he
00:14:27
had the courage to turn around and
00:14:28
actually apologize to those people shows
00:14:31
he's trying to do the right thing but
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the reality is and saxs is right if you
00:14:35
apply a very very small error rate to an
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incredibly large number so they have a
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network of three and a half billion
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people monthly right or daily or
00:14:43
whatever the thing is even if you say
00:14:45
that there's one tenth of
00:14:48
1% of an error rate meaning things that
00:14:51
are unintended well that's three million
00:14:54
unintended consequences right that's a
00:14:56
lot of unintended consequences and so
00:14:59
there's this massive law of large
00:15:00
numbers at place so what what do we do I
00:15:03
guess is the
00:15:05
question and I think that there is
00:15:09
enough knowledge that we have to know
00:15:12
that the ability for a 35y old to use
00:15:17
certain products today is very different
00:15:20
than the ability for a 12-year-old to
00:15:22
use that same product because of where
00:15:23
they are
00:15:25
physiologically right I think we we all
00:15:26
know that to be scientifically true on
00:15:29
the dimension of many products and I
00:15:30
think what we need to decide as a
00:15:32
society is whether software and
00:15:35
electronic products fall into that
00:15:36
categorization and if so what does it
00:15:39
mean so in the case of china they
00:15:41
mandate top down what products can be
00:15:44
used and how many hours you can use
00:15:47
specifically video games you're
00:15:48
referring to yeah yeah and David's right
00:15:50
which is that if we go there and we
00:15:53
rewrite the law then there's going to be
00:15:55
a different set of unintended
00:15:57
consequences that's going to create
00:15:58
create I
00:15:59
think a much poorer business landscape
00:16:04
frankly to innovate and a bunch of other
00:16:05
things and building on your comments
00:16:07
there's clearly an age at which kids can
00:16:11
shouldn't be on these systems and an age
00:16:13
where you know maybe with some guidance
00:16:15
they can yeah you want to add something
00:16:18
J yeah and then I think the third thing
00:16:20
is around the section 230 thing
00:16:22
itself I think that Sak I'll give you a
00:16:25
slightly different take I don't think
00:16:27
that the section to 30 rewrite is going
00:16:30
to be Broad and sweeping what I noticed
00:16:33
from a bipartisan perspective by both
00:16:36
the Democrats and the Republicans is
00:16:38
that the one single narrow issue that
00:16:41
they all seem to align on is not
00:16:45
necessarily about all of the different
00:16:48
rules around censorship but that the
00:16:51
lack of liability for these folks should
00:16:55
be relieved and I think that if you were
00:16:57
to write a narrow amendment to section
00:17:00
230 that said that these social media
00:17:02
companies or other organizations that
00:17:04
had certain characteristics were more
00:17:06
liable where today they have no
00:17:08
liability I'm not saying that it's right
00:17:11
but my read of the temperature in that
00:17:13
room was that that is the very narrow
00:17:16
change in section 230 that I think they
00:17:18
all seem to want to make and so that
00:17:21
seems like a very likely thing that will
00:17:23
happen in the next two or three years
00:17:25
unpack that for the audience who who
00:17:26
might not know how they would do that
00:17:28
section 230 says if you're a publisher
00:17:31
you're a common carrier you're not
00:17:32
responsible for what people post on your
00:17:34
your system blog web host or social
00:17:37
media company but where these social
00:17:39
media companies move from being just a
00:17:41
common carrier you know like paper might
00:17:44
be or or a website hosting company like
00:17:46
WordPress or Squarespace is when when
00:17:49
they flip over and they have an
00:17:51
algorithm and then they start picking
00:17:52
and choosing so once you start doing
00:17:54
editorial like the New York Times and
00:17:56
you have editors then you're liable if
00:17:58
you're CNN you're liable if you're Fox
00:18:00
as we start in the Dominion case that's
00:18:01
where the liability comes in so I guess
00:18:03
the question to USX is you know at the
00:18:06
end of the day now that we've seen these
00:18:07
things that scale is there not an
00:18:09
argument that when you start
00:18:11
editorializing through an algorithm and
00:18:13
you start promoting certain content that
00:18:15
you have some level of responsibility
00:18:17
like Fox News CNN or the New York Times
00:18:19
has where would you stand on that issue
00:18:21
some liability if you're picking winners
00:18:23
and losers in terms of what gets
00:18:25
promoted in the system well apparently
00:18:27
I'm the last person in America who
00:18:29
thinks that section 230 was a good idea
00:18:31
and a Visionary piece of legislation
00:18:32
that actually enabled the creation of
00:18:35
user generated content platforms just to
00:18:38
kind of slightly modify your description
00:18:40
of how it works I would analogize it to
00:18:42
a news stand where there's magazines on
00:18:44
the new stand they're Publishers and
00:18:46
then there's the news stand itself which
00:18:47
is a distributor if a a magazine engages
00:18:52
in defamation they're liable for it but
00:18:55
the new stand is not the new stand can't
00:18:57
be sued so the question is when you have
00:18:59
these massive user generated content
00:19:01
platforms are they operating as a
00:19:03
publisher or as a distributor and I
00:19:05
think what section 230 made clear is
00:19:07
look if you don't write the content if
00:19:09
the content is generated by users you're
00:19:12
a distributor and that is I believe the
00:19:15
better analogy to make for these huge
00:19:17
ugc platforms now at the same time what
00:19:20
section 230 said is that if you take
00:19:23
Good Samaritan actions to reduce things
00:19:26
like sex and violence on your platform
00:19:28
forms then we won't make you liable
00:19:30
because what happens in a lot of cases
00:19:32
is that you can wave your protection
00:19:35
legally by basically getting involved
00:19:38
and so the legislation didn't want to
00:19:39
deter these platforms for taking again
00:19:42
Good Samaritan steps I think it's a
00:19:44
pretty good combination of legislation
00:19:47
and that's what you see right now is
00:19:49
that Zuckerberg doesn't want to let
00:19:50
these edge cases through I actually
00:19:52
believe that they are taking huge
00:19:54
efforts at scale they have 40,000 people
00:19:56
to to give him some credit 40,000 people
00:19:58
moderating stuff that's a big number
00:20:00
yeah these are edge cases that get
00:20:01
through and by the way you have to
00:20:02
wonder where were the parents when all
00:20:04
this stuff happened I mean they're
00:20:06
acting like they're victims in the
00:20:07
audience and I'm sorry for their
00:20:08
particular cases but at the end of the
00:20:10
day we do need the parents to step up
00:20:12
here if we want to have social media at
00:20:14
scale at all the parents have to play a
00:20:16
more active role but in any event to go
00:20:18
back to section 230 I just think that
00:20:20
Republicans in particular are going to
00:20:22
really regret getting rid of section 230
00:20:25
because it's only going to lead to more
00:20:27
censorship I think what they're going to
00:20:29
do if I had to bet is that they're going
00:20:32
to write a very narrow amendment to that
00:20:35
law and during some budget process or
00:20:39
some other thing where you have a big
00:20:40
Christmas tree bill this will get in
00:20:42
there and I think it will have
00:20:44
bipartisan support that effectively
00:20:46
removes the liability protection that
00:20:49
these companies have I I have that's not
00:20:51
a small change that's the entirety of
00:20:53
section 230 I think like these companies
00:20:55
will not be able to use that a massive
00:20:58
change listen there are plaintiff's
00:21:00
lawyers the the plaintiff's lawyers bar
00:21:03
you know the trial lawyers bar is
00:21:05
salivating over the possibility that
00:21:07
would happen that's why this is going to
00:21:09
happen you know the way this is how
00:21:10
America Works personal injury hold on
00:21:12
they have personal injury lawsuits and
00:21:14
lawsuits lined up in every jurisdiction
00:21:16
of the United States and here's the
00:21:17
thing is because Facebook and all these
00:21:20
other sites operate you know across the
00:21:23
entire nation and across the entire
00:21:25
world they can be sued in every single
00:21:28
jurisdiction if you allow these types of
00:21:30
lawsuits okay Cham you go then I'm going
00:21:32
to get my position and'll move on I'm
00:21:34
going to say this in as unopinionated as
00:21:36
a way as possible whether we like it or
00:21:39
not there's an element of American
00:21:42
capitalism that takes companies through
00:21:45
seasons and there are seasons where
00:21:47
you're growing and then there are
00:21:49
seasons where you're ere earning and
00:21:51
then there are seasons where if it is
00:21:53
possible the Machinery if you see that
00:21:56
you are being you are over earning for a
00:21:59
long time the Machinery of the economy
00:22:01
comes and kind of pulls you back down to
00:22:03
earth You've Won too much and you're
00:22:06
perceived as too powerful yeah and I'm
00:22:08
not saying this whether or not it's
00:22:11
right I'm just saying it if you look
00:22:12
back in history these chapters have been
00:22:15
written times and I and I think David
00:22:18
what you said is the absolute single
00:22:21
most important thing if you had to
00:22:23
figure out where this was going to go is
00:22:26
exactly that the plaintiff's lawyers the
00:22:29
class action lawsuits the amount of
00:22:32
money that they think they can
00:22:35
extract and they compare it to the
00:22:37
amount of money that they were able to
00:22:38
extract in two different kinds of cases
00:22:42
one was tobacco and then the second was
00:22:45
Pharma and I think that they look at
00:22:47
this class of
00:22:49
app and the lack of empathy or the lack
00:22:52
of popularity that the leaders of these
00:22:55
companies have in Washington as a reason
00:22:59
why they will probably be able to get
00:23:00
this done to create this again I'm not
00:23:03
saying I think that's good I'm saying
00:23:05
that I think it's likely and I think
00:23:07
when that does happen you will see a
00:23:09
replay again it'll be slightly different
00:23:12
in terms of how it plays out but exactly
00:23:14
the kinds of plaintiff's lawsuits that
00:23:16
we saw in Pharma and in tobacco and I
00:23:18
think it's going to play out here and
00:23:20
David you're right that hearing to me
00:23:23
was a setup for that yeah and if you if
00:23:26
you look at this through that lens there
00:23:28
will be some sort of negotiation and it
00:23:31
might be age because when you look at
00:23:33
this really what Americans are upset
00:23:35
about is the impact this is having on
00:23:37
kids we have a limit for the age of
00:23:39
smoking vaping Etc and when these things
00:23:41
happen I think an easy concession that
00:23:43
Zuckerberg and others will make is hey
00:23:45
these products will be for 16 years old
00:23:47
and up that's my that's the age I think
00:23:50
it's appropriate 15 or 16 seems to be
00:23:52
well he also said by the way Jason to to
00:23:54
your point Lindsey Graham was the one
00:23:56
that brought this up and Lindsey Graham
00:23:57
made the connection to tobacco and also
00:23:59
to Firearms yeah and then Mark at some
00:24:02
point in there basically said well
00:24:03
listen like let's look at Apple and
00:24:05
Google we should expect them to do the
00:24:08
actual age verification not us right
00:24:10
because they have the devices and they
00:24:12
have the credit cards Etc that that's
00:24:13
actually a very reasonable thing for for
00:24:15
Americans to come to the only thing that
00:24:16
breaks down a little bit saxs in your
00:24:18
argument and listen there's no perfect
00:24:20
analogies here but if there was a
00:24:22
repeated offense of a magazine on a news
00:24:25
for example if there was some magazine
00:24:28
that had underage you know an adult
00:24:30
magazine that had underage kids in it
00:24:32
and people knew that and a new continued
00:24:35
to publish it they would have liability
00:24:37
for trafficking in child pornography or
00:24:39
whatever it happens to be and so the new
00:24:41
St does get some liability so there's
00:24:43
again no perfect analogies here but I
00:24:45
think but Facebook and all these other
00:24:47
sites are trying to remove the child
00:24:48
porn or whatever I don't think much of
00:24:49
that gets through at
00:24:51
all you know I think maybe you have a
00:24:53
better argument and and there is the
00:24:54
argument that people make is that
00:24:56
because of the feed they're making
00:24:58
editorial judgments and that's
00:24:59
publishing not Distributing however my
00:25:01
counterargument to that is that the fee
00:25:03
just gives you more what you want I mean
00:25:04
it just looks at what you're clicking on
00:25:05
what you're viewing the time you're
00:25:06
spending and they just give you more of
00:25:08
that I don't think it's editorializing
00:25:10
now back to Chamas point about this is
00:25:12
the way things are headed that may well
00:25:14
be right but I think we're going to
00:25:16
regret it I mean first of all the
00:25:17
democrat's interest one of their biggest
00:25:19
donors is the trial lawyers bar and they
00:25:22
generally will support any legislation
00:25:25
that opens up the causes of actions and
00:25:27
that's where this has had it and what's
00:25:29
going to happen is if they get rid of
00:25:30
section 230 is that every time there's
00:25:33
an alleged harm that occurs every time a
00:25:36
kid gets bullied or beat up in school
00:25:39
every time something goes wrong in their
00:25:41
life they're going to try and pin it on
00:25:43
social media and try to show that they
00:25:47
embibe something on social media that
00:25:48
led them down this dark path and these
00:25:51
types of companies are going to get sued
00:25:53
in every jurisdiction in America
00:25:55
recently we've seen huge huge judgments
00:25:58
related to defamation where if you have
00:26:01
say a red politically red defendant in a
00:26:04
blue jurisdiction huge Awards I think we
00:26:07
could probably see the opposite as well
00:26:09
that basically you'll start seeing blue
00:26:11
defendants taken on in red jurisdictions
00:26:13
we've seen completely disproportionate
00:26:15
judgments and again around defamation
00:26:18
disproportionate relative to the harm
00:26:20
that would actually took place you're
00:26:21
going to see that on steroids if we get
00:26:23
rid of section 230 now historically it
00:26:25
was the job of Republicans
00:26:28
to oppose Democrats on this stuff
00:26:30
because they knew that Democrats were
00:26:31
Shilling for the plaintiff's
00:26:33
bar Republicans have not done that
00:26:36
because they're so mad at these social
00:26:37
media companies for censorship so
00:26:39
remember when I talked about Good
00:26:40
Samaritan
00:26:41
liability these companies created
00:26:44
content moderation to basically try and
00:26:46
remove the violent material the
00:26:49
pornographic material the sexual
00:26:50
material the harassing material but in
00:26:54
the process of doing that they started
00:26:56
making political judgments and and they
00:26:58
started engaging in political censorship
00:27:00
and that has made the Republicans so
00:27:02
angry that they have now turned against
00:27:04
these companies and they are willing to
00:27:06
remove section 230 my point is I think
00:27:08
Republicans at the end of day are going
00:27:09
to regret that because if you remove
00:27:11
section 230 it's going to open up this
00:27:13
flood of litigation it'll be a
00:27:15
free-for-all it'll be a free-for-all and
00:27:17
what's going to happen is that these
00:27:19
companies just driven by simple
00:27:22
corporate risk aversion are going to
00:27:24
clamp down even more I mean the content
00:27:26
moderation is going to be even stricter
00:27:29
and because the content moderators of
00:27:30
these companies basically are are
00:27:32
liberals if you Empower them to take
00:27:34
down even more content they're going to
00:27:36
take down Republican stuff even more and
00:27:39
it'll be very e it'll be very easy for
00:27:40
the plaintiffs to Target that type of
00:27:43
content they'll say that oh that you
00:27:46
know all of that Republican or
00:27:47
conservative content that influenced
00:27:49
people in a very negative direction that
00:27:51
created all of these harms there'll be
00:27:52
lawsuits targeting that sort of content
00:27:55
and Facebook and others will respond in
00:27:57
the economically rational way which is
00:27:59
to shut it down completely so I think
00:28:01
Senators like Josh Holly are not going
00:28:03
to get what they want they're not
00:28:04
thinking straight yeah chath it's gonna
00:28:06
backfire it's GNA backfire cham the
00:28:07
reason why this is going to happen if it
00:28:10
does happen and and you wanted to try to
00:28:12
be probabilistic about it is because
00:28:15
when you look back at the tobacco
00:28:16
settlement the original settlement in
00:28:18
today's dollars is about $370
00:28:20
billion if you if you were the trial
00:28:23
lawyers and you're looking at a
00:28:25
combination of Facebook and T to and all
00:28:29
of the all of that
00:28:31
money I suspect that they probably think
00:28:34
that the potential that they can extract
00:28:36
from these companies is going to be
00:28:38
multiples of that number and then as a
00:28:41
result their fees will be between 20 and
00:28:44
50% of that so you're talking about
00:28:47
hundreds of billions of
00:28:50
dollars of Revenue
00:28:54
potential that will motivate I think
00:28:56
these folks FKS to
00:28:59
get the law changed and then the
00:29:04
byproduct will not be framed in terms of
00:29:06
dollars it's these are highly kinetic
00:29:08
issues when you're talking about sexual
00:29:11
exploitation and young people and mental
00:29:13
health and suicide and bullying the
00:29:16
these are very kinetic issues right and
00:29:17
so bringing these to jury trials all
00:29:19
across the United States I think that
00:29:22
they probably think that they're on the
00:29:25
right side of history and winning those
00:29:27
things
00:29:27
so you know again I'm not saying it's
00:29:30
right highly emotional I mean listen
00:29:33
it's win is to win you bring a case of
00:29:37
say teen suicide okay horrible that it
00:29:41
happens but there's gonna every time
00:29:43
something like that happens there's
00:29:44
going to be a huge Temptation I'm sure
00:29:46
there'll be trial lawyers who specialize
00:29:48
in this to bring a case against Facebook
00:29:51
or some other social media company and
00:29:52
they're going to scour through the these
00:29:55
accounts and try to point to
00:29:58
examples that could have led to this
00:30:00
result and the truth of the matter is
00:30:02
that maybe social media contributed a
00:30:04
little but what about popular culture
00:30:06
and popular entertainment what about all
00:30:08
the messages I'm not debating any of
00:30:10
know I'm just I'm pointing out what's
00:30:11
going to happen what about all the
00:30:12
messages they received not not through
00:30:15
the edge cases I got through on social
00:30:17
media but through the mainstream
00:30:18
entertainment I mean all the shows
00:30:19
they're watching on television all the
00:30:21
music they're listening to the things
00:30:22
that happened in their schools and
00:30:24
day-to-day conversations with other kids
00:30:26
but you can't really Sue any of those
00:30:28
other things but you can sue social
00:30:30
media the the crazy thing about all of
00:30:32
this is that all of these lawsuits are
00:30:34
funded in part by these hedge funds who
00:30:37
will do litigation finance and part of
00:30:39
putting together a well performing
00:30:42
litigation Finance fund is underwriting
00:30:44
the probability of success and I think
00:30:46
when you flow through the probabilities
00:30:49
and you apply it to these companies
00:30:51
largely because of their profitability
00:30:53
and their ability to over earn and
00:30:56
generate profits
00:30:57
I suspect that Wall Street is probably
00:31:00
already involved if and if not they'll
00:31:03
probably get involved in due
00:31:05
course but it's it's an unfortunate
00:31:07
thing David I agree because this is sort
00:31:09
of like hey the rules on the field were
00:31:12
X and folks operated by those and they
00:31:14
are clear they are trying to do their
00:31:16
best but again this is where capitalism
00:31:18
the part of capitalism that can be
00:31:19
awkward and uncomfortable is when
00:31:22
Industries over earn for long periods of
00:31:24
time other folks say I am going to
00:31:26
compete away the returns somehow and I
00:31:28
want a share of those profits and I
00:31:29
think that that's going to be the large
00:31:31
motivator and it's just going to result
00:31:33
in I think these things changing and a
00:31:35
plethora of lawsuits and at the end of
00:31:37
the day this is about children and
00:31:40
protecting children so the obvious
00:31:42
solution here is society has to come up
00:31:44
with a number well sadly I think that
00:31:45
could be a veneer Jason you know what I
00:31:47
mean hold on let me finish my thought
00:31:49
here the the key thing is there's some
00:31:51
age in which we all agree it's
00:31:53
reasonable for kids to be using social
00:31:54
media and there's a certain age when we
00:31:55
think it's not reasonable and back to
00:31:58
capitalism I think a very good point you
00:31:59
made shth these companies are going to
00:32:01
have to saywell if we lose the 12 to 15
00:32:04
year olds is that better for society and
00:32:07
better for our business and we just all
00:32:08
agree that social media should start at
00:32:10
15 or 16 and then the handset
00:32:12
manufacturers and the and the social
00:32:15
sites all have you have to get
00:32:16
permission from your parents to use them
00:32:18
period full stop and that's it and that
00:32:20
may be where this all winds up I think
00:32:21
and then also explaining the algorithms
00:32:23
I think is the next thing that's going
00:32:24
to happen people are going to have to
00:32:26
disclose how these work I think you're
00:32:28
making a very good point which is that
00:32:29
is the right conversation to have my
00:32:31
point was that instead of having that
00:32:33
conversation which is more societal it
00:32:36
involves David's right parental
00:32:37
responsibility what is our role
00:32:39
absolutely when being actively involved
00:32:41
and by the way the trends around family
00:32:44
formation and the fact that there's way
00:32:46
more single parent families make this
00:32:48
problem even harder because now there's
00:32:49
only one person to check in and not two
00:32:51
people to check in so all these things
00:32:54
societally build on itself Jason that is
00:32:56
the absolute
00:32:57
right conversation to have my point is
00:32:59
that's not going to be why the the rules
00:33:02
need to get Rewritten the rules will get
00:33:04
Rewritten because there's an economic
00:33:06
argument by a different sector of the
00:33:08
economy in this case the trial lawyers
00:33:09
and other folks that say there's a
00:33:11
trillion dollars to be had if we get
00:33:13
this law changed they are motivated
00:33:15
enough to do that yeah a parasitic
00:33:17
sector so there is a bill right now
00:33:18
working its way through the California
00:33:20
Assembly that would go to Gavin Nome
00:33:22
that would prohibit the use of social
00:33:24
media by under 16y olds so that is
00:33:27
actually happening yeah I agree with you
00:33:30
that's a better debate to have than
00:33:32
changing section 230 in a way that's
00:33:33
going to lead to more censorship by the
00:33:34
way just just on that point I think
00:33:37
Republicans need to understand this in
00:33:39
particular is that the anger towards
00:33:42
these companies is bipartisan the the
00:33:44
outrage is bipartisan the moral Panic is
00:33:46
bipartisan you saw it on in that hearing
00:33:48
you couldn't really tell the difference
00:33:49
between Republicans and Democrats okay
00:33:52
so full display I wouldn't be surprised
00:33:54
if they agreed like jamas said on some
00:33:57
sort of change to section 230 but here's
00:33:59
the catch is that Republicans and
00:34:01
Democrats have fundamentally different
00:34:03
objectives fundamentally Democrats want
00:34:06
there to be more censorship they say
00:34:07
this all the time we want you taking
00:34:08
down more content not less Republicans
00:34:10
want there to be less censorship okay so
00:34:13
if they agree on the same piece of
00:34:15
legislation only one of them can be
00:34:17
right okay and the question is who's
00:34:20
going to be right my guess is that if
00:34:22
Democrats and Republicans agree on a
00:34:24
section 230 modification the Democrats
00:34:26
know what they're doing and the
00:34:27
Republicans generally being the stupid
00:34:29
party who get outsmarted all the time by
00:34:31
democrats are going to agree to
00:34:32
something that they later regret so at
00:34:34
the end of the day I don't think that
00:34:36
bipartisan legislation should be
00:34:38
possible the anger is bipartisan but the
00:34:41
objectives are not and if something gets
00:34:43
through it's going to be because
00:34:44
Republicans make a huge mistake and just
00:34:46
to give a tangible example of this okay
00:34:48
take the Second Amendment okay do you
00:34:51
think that in this world where there's
00:34:53
no section 230 that Republicans are
00:34:55
still going to be have conversations
00:34:56
online about say gun enthusiasm no way
00:35:00
because every time some harm happens
00:35:03
every time there's a shooting of some
00:35:05
kind a plainist lawyer a planus lawyer
00:35:08
is going to Su not the person who posted
00:35:10
the content talking about how much they
00:35:12
love their guns and you know and it look
00:35:14
it could be totally innocuous okay it
00:35:17
could be a a forum on Facebook or Reddit
00:35:20
where people are just having
00:35:22
conversations about reviews or could be
00:35:25
totally innocuous conversations okay
00:35:28
people having the right kind of
00:35:29
conversations about guns okay but you
00:35:32
know that every one of those websites
00:35:35
that host those conversations will be
00:35:38
targeted in relation to any harm that
00:35:40
occurs in the real world and very soon
00:35:42
Reddit and Facebook and all the rest
00:35:44
will feel compelled to ban any
00:35:47
conversation related to even second
00:35:49
amendment rights okay y this is where it
00:35:52
will lead if Republicans get rid of
00:35:54
section 230 you will be the ones
00:35:56
targeted not not liberals all right
00:35:59
great discussion you know it's important
00:36:01
to have the right discussion this
00:36:02
reminds me of the abortion discussion
00:36:04
where nobody would ever talk about the
00:36:05
number of weeks like that's at the core
00:36:07
of the issue we could agree on the
00:36:08
number of weeks we can agree on the age
00:36:10
here you know for for kids to to use
00:36:13
these things maybe we could move forward
00:36:15
let's move forward on the docket here we
00:36:16
got so much to talk about and I think
00:36:19
the number one story of the week was
00:36:21
elon's pay package and this ruling that
00:36:24
occurred in Delaware let me just te this
00:36:27
up here many of you probably know about
00:36:29
this already but in 2018 Tesla's board
00:36:31
approved a performance-based
00:36:33
compensation package for Elon was
00:36:35
approved by 73% of shareholders Elon and
00:36:39
his brother Kimble would have put that
00:36:41
at 80% but they were excluded obviously
00:36:43
this is lower than maybe some other
00:36:46
support levels according to Reuters you
00:36:48
typically see 95% for a executive
00:36:52
compensation packet but this one was
00:36:54
very unique it was all stock there's no
00:36:55
cash bonus no salary 12 tunes of stock
00:36:58
was very creative in how this was put
00:37:00
together because Elon got nothing if he
00:37:02
doubled the value of Tesla but then if
00:37:05
he you know increased the value of the
00:37:08
Topline revenue and the market cap
00:37:10
increased by $50 billion he got 1% more
00:37:13
of the outstanding shares which is an
00:37:16
amazing deal for shareholders obviously
00:37:18
because the market cap of the company
00:37:19
wenton up 50 billion the initial plan
00:37:22
was only worth about 2.6 billion but
00:37:25
since Tesla crushed it from 2018 to 2023
00:37:27
we'll throw up a chart here it's one of
00:37:28
the great runs in the history of
00:37:30
capitalism how revenue and sales grew at
00:37:33
this company so it made it the largest
00:37:35
comp package in the history of public
00:37:36
markets and if you compare Tesla to
00:37:39
Apple the second highest increasing
00:37:41
stock price during that same time period
00:37:43
Apple went up 345 per. Tesla went up
00:37:46
800% in 2018 a Tesla shareholder suit
00:37:49
Elon and Tesla's board claiming the pay
00:37:51
package was unfair the guy had nine
00:37:53
shares a full nine shares not 10 nine
00:37:56
where $2,500 his stake went 10x in those
00:37:59
six years so he made a fortune on that
00:38:01
bet and then on Tuesday a Delaware judge
00:38:03
voided Elon spay package siding with the
00:38:05
investor Elon can appeal it to the
00:38:10
Delaware Supreme Court Sachs your
00:38:13
thoughts on this ruling I teed it up I
00:38:15
think I got all the details in there if
00:38:16
I missed any please add them well I
00:38:19
think in order to reach this ruling the
00:38:21
judge had to find three things and all
00:38:23
of them had to be the case in in her
00:38:26
opinion number one that the pay package
00:38:28
was excessive number two that the
00:38:30
process by which they came up with the
00:38:32
pay package was not fair meaning it was
00:38:35
not sufficiently adversarial enough that
00:38:37
the directors in her opinion had too
00:38:39
many ties to Elon and didn't again take
00:38:43
enough of a
00:38:45
antagonistic role in negotiating that
00:38:48
package and number three and I think
00:38:51
most importantly that the shareholder
00:38:53
vote was invalid because even if the
00:38:55
first two had been true the shareholders
00:38:56
approved it and that would have been
00:38:58
good enough but she said that the
00:38:59
shareholders weren't sufficiently
00:39:02
informed and specifically I think this
00:39:04
argument hung on a few internal emails
00:39:06
where people said that they thought that
00:39:08
they could hit the numbers I think that
00:39:10
of the three legs of this well all three
00:39:14
have been challenged by opponents of
00:39:15
this verdict I mean number one yes the
00:39:17
pay package ended up being a gargant
00:39:19
amount but you have to look at an ex Ane
00:39:22
not expost nobody thought Elon could hit
00:39:24
all these numbers back at the time this
00:39:27
package was negotiated let's be frank it
00:39:29
was absurd the idea that he would 10x it
00:39:32
was a great clip with Andrew Ross sorin
00:39:34
where they're all laughing at the idea
00:39:35
that he's going to hit these numbers
00:39:37
remember this was at a time when Elon
00:39:38
was going through what was called
00:39:39
production hell where he was sleeping on
00:39:41
the floor Factory yeah the model 3
00:39:43
hadn't come out yet and nobody nobody
00:39:45
believed that the model 3 was going to
00:39:46
be the hit that it was in fact all the
00:39:48
stories were poo pooing that idea and
00:39:51
basically saying that Tesla is basically
00:39:52
screwed because they can't get the
00:39:53
production line working correctly yep
00:39:56
you want to play this Tesla now
00:39:57
announcing a radical new Compensation
00:40:00
Plan it could be perhaps the most
00:40:02
radical Compensation Plan uh in history
00:40:04
the executive will receive no guaranteed
00:40:06
compensation of any time of any kind at
00:40:09
all he gets no salary cash bonus Equity
00:40:11
uh he only gets Equity that that vests
00:40:13
over time but only if he reaches uh
00:40:16
these hurdle rates which are dare I say
00:40:18
crazy the only part of it that I think
00:40:20
is really relevant is where sorin says
00:40:23
that the Milestones are crazy meaning
00:40:26
that everyone thought it was a pipe
00:40:28
dream that the company would ever hit
00:40:30
these numbers okay so that's Point
00:40:31
number one on on magnitude on the second
00:40:34
part of the ruling about the process it
00:40:37
is true that like in most Venture back
00:40:41
startups there's a long-standing
00:40:43
relationship between the founder and the
00:40:45
investors because they work
00:40:46
collaboratively to try and make the
00:40:48
company a success there were emails that
00:40:51
came out where Elon shows that I'm not
00:40:54
trying to go for the maximum here so you
00:40:56
know did did the investors go in with a
00:40:58
hostile antagonistic attitude that we're
00:40:59
going to try and pay you the least no
00:41:01
but did Elon go in with the attitude
00:41:02
that I'm going to try and take the most
00:41:04
no the the email showed that what they
00:41:07
tried to do was come up with something
00:41:09
that they thought was fair that would
00:41:11
fairly reward him for outsized
00:41:13
performance and if he had merely
00:41:16
increased the the value of Tesla from 59
00:41:19
billion to a 100 billion he would have
00:41:21
gotten nothing let's just keep that in
00:41:22
mind so they tried to come up with
00:41:24
something that would reward him for
00:41:25
outside performance and give him
00:41:27
absolutely nothing for merely decent or
00:41:30
good performance the third point about
00:41:33
the shareholder vote I don't think that
00:41:37
there was anything about the shareholder
00:41:38
vote that the shareholders didn't know I
00:41:40
don't think that the company didn't
00:41:41
release Elon always said yeah we're
00:41:43
going to do this we're going to be one
00:41:44
of the most valuable companies in the
00:41:45
world he's always been super optimistic
00:41:48
about their ability to reach these
00:41:49
targets but if you looked at all the
00:41:51
Wall Street analysts including sorin
00:41:53
there they thought that these targets
00:41:57
were unreachable well also to add to
00:41:59
that sax this had the largest short
00:42:02
position I believe at that time of any
00:42:04
company ever people were betting with
00:42:06
their dollars that this company was
00:42:07
going to zero there were a ton of people
00:42:10
who the narrative was this they'll never
00:42:12
delivered the model 3 it was two years
00:42:14
late right or something in that range it
00:42:15
was they they kept trying to get the
00:42:17
model 3 out it was taking forever so
00:42:19
yeah it's it's absurd also in that case
00:42:22
sorin said in that same clip there's
00:42:23
been a lot of speculation of Elon
00:42:24
stepping down after the model 3
00:42:27
is in production in the judge's ruling
00:42:28
she said the exact opposite there is no
00:42:29
reason to believe Elon would leave
00:42:32
except that he was running like two or
00:42:33
three other companies so it was actually
00:42:35
quite possible that he would leave he
00:42:36
never wanted to be CEO of Tesla people
00:42:39
forget that too he had tried three CEOs
00:42:40
of Tesla and he only took over Tesla and
00:42:43
I remember it was because he said Jason
00:42:46
this thing's gonna fail if I don't take
00:42:47
it over he he tried three different C
00:42:50
CEOs in the beginning people forget that
00:42:52
fact and there was scuttlebutt that he
00:42:54
would hire somebody I remember there was
00:42:56
like rumors about cherl Samberg maybe
00:42:57
getting off for the job or something
00:42:59
like that I remember he was he was going
00:43:01
through production Hill he was sleeping
00:43:02
on the factory floor yeah and he was
00:43:05
talking in interviews about how
00:43:06
miserable his life was at that time I
00:43:07
mean can confirm yeah exactly so look
00:43:09
did he have leverage to basically say
00:43:11
you know what let's just hire a CEO yeah
00:43:14
absolutely okay shth any uh Steelman you
00:43:16
can do of the other side here like as an
00:43:18
investor Public Market investor
00:43:21
sometimes when you saw that pay package
00:43:23
what did you think and I I don't know if
00:43:25
you were sure holder of Tesla at the
00:43:26
time or not in the mid teens I started
00:43:31
investing in public stocks as well as
00:43:34
private tech companies and I got invited
00:43:37
to give a presentation at the iris own
00:43:40
conference which is like the most pre
00:43:42
prestigious Conference of public market
00:43:44
investors you in may you show up at um
00:43:47
Lincoln Center and everybody in the
00:43:49
audience is paying like 10,000 bucks a
00:43:51
ticket or something and all the proceeds
00:43:52
go to a uh a foundation in support of
00:43:55
this this gentleman irone who passed
00:43:57
away but in any event it's like Amman
00:44:01
Tepper Einhorn and I picked Tesla and I
00:44:05
was a very big supporter in many ways
00:44:07
and still
00:44:10
am and I think that I knew the company
00:44:12
frankly better than most people except
00:44:15
for him obviously but I think that I
00:44:17
studied this company quite deeply when I
00:44:20
and I'm just setting the context when I
00:44:21
saw the pay package I thought he's
00:44:24
making a mistake
00:44:26
this is
00:44:28
unachievable I thought the probabilities
00:44:30
were in the low single
00:44:33
digits and then he did it which just
00:44:36
kinds of shows how incredibly Adept he
00:44:39
is as a CEO and a manager
00:44:43
and an
00:44:45
Executor so then you know to go back
00:44:48
five or six years later after he
00:44:50
actually does
00:44:51
something that so massively
00:44:54
disproportionately positively impacted
00:44:58
investors and then to just resend it and
00:45:01
unwind it I think is really unamerican
00:45:03
and unfair and I think it sets a very
00:45:07
poor standard for why anybody should
00:45:09
actually build a company governed in
00:45:11
Delaware it makes no sense anymore and
00:45:14
just to give you that example he he and
00:45:16
I have both now done this but like these
00:45:18
incremental companies that I've started
00:45:20
are in Nevada they're in different
00:45:22
places because I find the Delaware Court
00:45:25
slightly and increasingly
00:45:28
unpredictable and acting with other
00:45:30
mandates that they weren't ever given so
00:45:33
you what do you think that mandate is
00:45:35
you had a place where there was highly
00:45:38
predictable governance and they had very
00:45:41
narrow ways in which they would act and
00:45:44
opine and I think in a situation like
00:45:47
this where you had every opportunity to
00:45:51
actually vote this thing down and what
00:45:54
little of the document that I saw about
00:45:56
the communication back and forth doesn't
00:45:59
seem to support this theory that he
00:46:01
rammed it through nobody Rams anything
00:46:03
through over nine months where he takes
00:46:06
month-long breaks and he tells the GC
00:46:08
this is actually more than I wanted
00:46:10
Nobody Does that if you're ra it's the
00:46:12
opposite of grabing something through it
00:46:15
was and and I suspect if you really
00:46:17
asked him and I haven't but I would he
00:46:20
probably thought it was like largely
00:46:22
crazy and so I think a lot of people
00:46:25
thought that we that we were as
00:46:26
shareholders and I'll tell you that I
00:46:28
felt this way getting his hard work and
00:46:32
that he may have just mathematically
00:46:33
been mistaken so yes he got 55 or that
00:46:37
package is worth 55.8 billion but you're
00:46:40
missing the point where every other
00:46:42
investor made $500 billion
00:46:44
do right and the investors investors did
00:46:47
approve it it will have a chilling
00:46:49
effect I think and how people think
00:46:50
about compensation it will cause
00:46:53
companies to be even more constipated
00:46:56
and sclerotic and
00:46:58
unimaginative as a result of this
00:47:01
because the most talented individual
00:47:04
entrepreneurs now have even more of an
00:47:06
incentive for incorporating in other
00:47:08
places and also staying private and I
00:47:12
think what that
00:47:13
deprives is the broader shareholders
00:47:16
including this gentleman look we live in
00:47:18
America he had the right to sue he had
00:47:21
nine shares and he was able to bring
00:47:23
this lawsuit nine shares
00:47:26
I mean David goath yeah I mean the idea
00:47:28
that nine Shar who 10x their
00:47:31
money unimag I I don't know if he
00:47:34
remained a shareholder through this
00:47:35
whole period but even those nine shares
00:47:38
10x in value yes yes but he would now be
00:47:42
deprived of that in this next iteration
00:47:45
of Elon musk's because why would they
00:47:47
ever go through this to put that
00:47:50
much work into something to be so at
00:47:53
risk personally your own mental and phys
00:47:55
physical health we saw him in those
00:47:57
periods and then to have it taken away I
00:48:00
think is deeply deeply unfair sex you're
00:48:03
right this this deal was a win-win I
00:48:05
mean if Elon could achieve these numbers
00:48:08
it was good for him and it was great for
00:48:10
shareholders and that's why I think the
00:48:12
key point is that 73 or 80% depending on
00:48:15
how you want to count it approved this
00:48:17
deal I think they knew everything
00:48:19
relevant that they needed to know when
00:48:21
they approved it this is the deal that
00:48:24
most shareholders and most comp would
00:48:26
want for the
00:48:27
CEO the deal is you get nothing unless
00:48:30
you deliver an outsized return for
00:48:33
shareholders most CEOs won't sign up for
00:48:35
this deal most CEOs work their way up
00:48:38
through the corporate ladder they get
00:48:39
into the CEO chair and then they pay
00:48:41
themselves huge amounts of money regards
00:48:42
of whether the company succeeds or fails
00:48:45
and that's the deal they want because
00:48:46
they don't really have confidence in
00:48:49
themselves to deliver what sorcin called
00:48:52
the crazy outcome Elon had the
00:48:54
confidence in self to deliver the crazy
00:48:56
outcome and nobody was really
00:48:58
complaining about this until like you
00:49:00
said this small shareholder who's really
00:49:03
basically just you know a name plan of
00:49:06
for the trial lawyers bar or somebody
00:49:08
who wants to get Elon to bring the
00:49:11
suit 6% to create 600 billion in value I
00:49:15
mean it's quite a bargain folks and I
00:49:18
think if you went to Ford or GM and said
00:49:20
hey would you like Elon to be your CEO I
00:49:22
think that'd often half the company Mary
00:49:24
Barett doesn't want this deal yeah no
00:49:25
jcal Sac said something really important
00:49:28
that you just mentioned as well which is
00:49:29
that if you actually look at the average
00:49:31
Compensation Plan of most public company
00:49:34
CEOs it actually is very much counter to
00:49:38
shareholder value I'll give you one
00:49:39
simple example if you look at the number
00:49:42
of of CEO comp packages that are tied to
00:49:44
earnings per share growth but then if
00:49:47
you actually look at how these CEOs
00:49:49
achieve their EPS targets yeah they do
00:49:52
it by raising debt so indebting the
00:49:54
company right increasing the Enterprise
00:49:55
Value by by loading the company up with
00:49:58
debt and then driving repurchase plans
00:50:01
and what what do those do I mean look if
00:50:03
you look at Disney where do their
00:50:04
repurchases come from from debt so does
00:50:07
debt help an equity shareholder it
00:50:09
categorically does not under no world
00:50:11
does it do that however for the CEO and
00:50:15
for the handful of investors that that
00:50:17
can hold on for a long periods of time
00:50:19
what have you they benefit from a lower
00:50:21
share count they benefit from increased
00:50:23
EPs and then the CEO gets compensated
00:50:25
and so to say that tacitly what you
00:50:28
disapprove of are performance incentives
00:50:31
and what you are actually approving of
00:50:35
are mechanics that saddle a company with
00:50:38
debt and allow basically gaming of
00:50:41
numbers is what you've implicitly also
00:50:45
said and this is where I think the
00:50:47
Delaware Court used to be known for a
00:50:51
level of intellectual Clarity that would
00:50:53
have prevented that implicit assumption
00:50:56
but that's now what's left on the table
00:50:57
and I think it will have a ripple effect
00:51:00
across how so many other companies
00:51:02
design design their compensation plans
00:51:04
how CEOs think about risk no CEO as sack
00:51:08
said will ever want an incentive Laden
00:51:10
plan like this ever they will want
00:51:13
because 10 years later you could do all
00:51:14
the work and then it gets cancelled
00:51:16
canell so why would take risk they will
00:51:18
want something that is totally
00:51:21
gameable right where you'll have 90
00:51:24
plus% support and approval because of
00:51:27
how vanilla and benign it is on the
00:51:29
surface but it will actually be quite a
00:51:32
terrible plan underneath the surface and
00:51:34
what I mean specifically are these EPS
00:51:36
targets for CEOs so Elon did the one
00:51:39
thing that was crazy which was I'm just
00:51:41
going to do it based on pure
00:51:42
profitability and
00:51:44
performance and he gets punished and all
00:51:47
these CEOs in this other class who were
00:51:48
like let me Saddle these companies with
00:51:50
debt that actually undermine
00:51:52
shareholders have been rewarded there is
00:51:54
already a mechanism for somebody who
00:51:56
disagrees with the comp package this
00:51:58
person who owned the nine shares could
00:51:59
have sold their shares it's a liquid
00:52:01
Market at any point in time that person
00:52:02
could say I don't agree with this I'm
00:52:04
taking my nine shares and $2500 I'm
00:52:06
gonna put it in apple I'm gonna put it
00:52:08
into I like Tim Cook's pay package
00:52:10
better I like Benny off package better
00:52:12
and I'll make my bet there person had
00:52:14
Choice yes
00:52:15
SX this person was not a victim he's not
00:52:18
a victim because he could have sold the
00:52:19
shares and bought other shares and he's
00:52:20
not a victim because he 10x his shares
00:52:21
and beat the market yeah I mean look I I
00:52:23
don't place the blame on the shareholder
00:52:27
per se because this is really about a
00:52:30
judge's interpretation of Delaware law
00:52:32
and what companies are allowed to do so
00:52:35
whether the shareholder was harmed or
00:52:37
not or had one share or million shares
00:52:39
that's just the way that this case gets
00:52:41
into court the question is the
00:52:43
interpretation of Delaware law and again
00:52:45
the part of this that I would go back to
00:52:46
that that I think was the mistake is
00:52:48
that I think the shareholder vote was
00:52:50
valid um I think the process was valid
00:52:53
as well I don't know that the process
00:52:56
has to be this extremely adversarial
00:52:58
process where one side's pulling for the
00:53:00
most and one side's pulling for the
00:53:01
least I don't think either side operated
00:53:03
that way but again I think shareholders
00:53:05
knew what they needed to know and the
00:53:06
evidence of that is in all of the public
00:53:09
coverage at that time nobody thought
00:53:11
Elon was getting a good
00:53:13
deal right no one thought he was getting
00:53:15
sucessfully good they thought he was
00:53:16
getting a delusional deal meaning
00:53:19
delusional for him and everybody seemed
00:53:23
to be okay with the idea that if somehow
00:53:26
Elon could pull off this miracle that he
00:53:28
would be entitled to this compensation
00:53:30
and he would get nothing if he didn't
00:53:33
now again I would go back to do you
00:53:35
think Mary Bara would have wanted this
00:53:37
deal while Elon was spending the last
00:53:40
five six years making Tesla go 10x let's
00:53:44
look at GM GM stock price was trading
00:53:46
more or less in a flat
00:53:50
range I don't even think the share price
00:53:52
doubled yeah compare it to see the
00:53:55
compare two button there put compare two
00:53:57
and then put Tesla in there right so if
00:53:58
Mary Bara GM had signed up for that comp
00:54:00
package she would have gotten absolutely
00:54:01
nothing which is why I'm sure that the
00:54:04
thought in everyone crossed their mind
00:54:05
of having an all incentive based comp
00:54:08
package that doesn't even start until
00:54:10
you at least double the value of the
00:54:11
company by the way on those
00:54:13
Milestones it wasn't just the share
00:54:16
price it was share price and revenue or
00:54:19
profit targets being met so in other
00:54:21
words if the stock just rallied because
00:54:23
of macroeconomic condition
00:54:26
like for example interest rates go down
00:54:27
and then all of a sudden the whole stock
00:54:29
market goes up that was not good enough
00:54:31
it was also tied to the combination of
00:54:34
stock value increases with revenue and
00:54:38
profit targets being met it was a comp
00:54:40
package that couldn't be gamed I mean
00:54:42
you have to hit the numbers in order to
00:54:44
get the the comp package that's what she
00:54:46
got and I don't want to pick too much on
00:54:48
Mary Barry here I guess I'm picking her
00:54:50
out because Joe Biden said that she
00:54:52
created the EV Revolution yeah well done
00:54:55
they've sold 17 cars and I think they
00:54:57
canceled the car yeah congratulations by
00:55:00
the way there was there was a remarkable
00:55:02
article in the Wall Street Journal just
00:55:03
in December where they finally admitted
00:55:06
that this whole idea that GM had been
00:55:09
leading any kind of Revolution or had
00:55:11
been a transformational company was
00:55:12
revealed as basically a
00:55:14
ruse but look you you have to wonder how
00:55:17
much of this is political I mean
00:55:19
Delaware is Joe Biden's State he's the
00:55:22
senator there were articles
00:55:25
describing how this judge was connected
00:55:28
to a law firm that had helped Joe Biden
00:55:31
get elected and you just kind of wonder
00:55:33
whether Biden's directive from the White
00:55:37
House Podium that we got to get this guy
00:55:38
or we got to look into this guy that
00:55:40
he's an enemy which has been reflected
00:55:43
through all these different
00:55:44
administrative agencies sudden actions
00:55:46
against elon's companies for The Glass
00:55:49
House starlink in the FCC yeah there's
00:55:52
been a whole bunch of these issues and
00:55:54
you just wonder is is this another
00:55:56
manifestation of that yeah I mean the
00:56:00
the conspiracy theories are quickly
00:56:03
becoming closer to reality and we
00:56:06
definitely need to investigate that for
00:56:08
sure because the FCC thing is crazy
00:56:10
spending $15,000 putting fiber into
00:56:13
people's homes when you could spend
00:56:14
$1,500 giving them starlink makes no
00:56:16
sense and those same people who have to
00:56:17
wait for fiber this on our previous
00:56:20
episode they're just get starlink anyway
00:56:22
they're gonna buy starlink while they're
00:56:23
waiting for the government fiber for 10
00:56:25
years it's absurd I do want to uplevel
00:56:28
this just back to what I was saying and
00:56:29
and I'll try to I'll try to make the
00:56:31
point better I think I think it's really
00:56:33
really
00:56:34
unfair what's happening to Elon but I
00:56:37
want to take a step back and think about
00:56:40
just the bigger picture if we want an
00:56:44
economy of vibrant companies that do
00:56:47
great things we're going to need to
00:56:49
reward people to work at those companies
00:56:52
and in order for the United States to
00:56:56
sort of continue to
00:56:57
exert some amount of dominance in the
00:57:00
areas that we think are important we
00:57:02
need to be economically vibrant right
00:57:04
and fair and fair and the problem is
00:57:06
that this really perverts incentives and
00:57:08
it's going to exacerbate a trend that I
00:57:11
think has actually held a bunch of our
00:57:13
companies back so the first thing I just
00:57:15
wanted to show you guys was just this
00:57:16
little thing that it's just a pie chart
00:57:19
that shows okay how do CEOs get paid
00:57:22
right so we want CEOs go and run really
00:57:26
important
00:57:27
companies right we want those companies
00:57:29
to do great things in the world we want
00:57:31
these CEOs to be deeply motivated to go
00:57:33
and push the boundaries of what's
00:57:35
possible right we want all that and so
00:57:37
we want to compensate them to do those
00:57:39
things this is just a representation of
00:57:41
how CEOs have structured their pay
00:57:43
packages and you'd say wow all of these
00:57:46
numbers seem reasonable return on
00:57:48
Capital total shareholder return
00:57:49
earnings per share so what you need to
00:57:52
do then is double click into this right
00:57:54
so this is how CEO pay packages are made
00:57:58
but the problem is and Jason this is my
00:58:00
problem with a bunch of these companies
00:58:02
that all the returns all that
00:58:04
shareholder return that you saw the
00:58:06
return it's all driven by share BuyBacks
00:58:09
Yep this is an artificial gamesmanship
00:58:12
of performance this is not companies
00:58:14
pushing the boundaries you know this is
00:58:16
not Disney figuring out it's not
00:58:18
Innovation this is this isney this is
00:58:21
Disney creating foot faults and falling
00:58:23
into potholes of their own making
00:58:25
but you can drive great compensation
00:58:27
because you can game the way that you
00:58:29
are paid this doesn't make America great
00:58:34
it doesn't create American
00:58:35
exceptionalism in fact it just creates a
00:58:38
bunch of financial engineering that
00:58:41
results in marginal companies and David
00:58:44
just gave an example of one that could
00:58:46
be considered that so the point is that
00:58:48
when you have one person that tries to
00:58:50
Buck this
00:58:52
trend I just think it has a huge
00:58:55
impact by basically saying hey play the
00:58:58
game like everybody else just game it
00:59:01
just dial it in from your country club
00:59:04
make sure that you become a member of
00:59:05
Augusta that's more important to us than
00:59:08
actually sleeping on the factory floor
00:59:10
and don't take risk I mean if you think
00:59:12
about what do you do if you're Apple
00:59:14
you're Google you're Microsoft you're
00:59:15
sitting on tons of cash is the safe
00:59:18
thing to do you see what they do you
00:59:19
just buy back the shares buy back the
00:59:21
shares you can't do m&a you issue debt
00:59:24
yeah and then you buy back the shares
00:59:26
Arbitrage you encumber the shareholders
00:59:29
with debt and then you artificially
00:59:32
inflate total shareholder return and
00:59:34
earnings per share and the return on
00:59:36
invested Capital because of how we can
00:59:38
play these games in America so right now
00:59:41
what we are doing is we are not
00:59:42
motivating
00:59:44
CEOs to run great companies we're
00:59:46
motivating CEOs to understand Financial
00:59:49
Arbitrage the result will be crappier
00:59:52
companies that dimin American
00:59:55
exceptionalism that is the only outcome
00:59:57
perfectly said and and there really are
00:59:59
two caveats there number one we have to
01:00:01
let m&a occur as well because that's a
01:00:03
better thing to do in some cases with
01:00:04
this with this excess Capital profits
01:00:07
people have sitting there and the only
01:00:08
time really to buy shares back is when
01:00:10
you think they're undervalued you would
01:00:11
agree well to your point I actually
01:00:13
think you're absolutely right if you
01:00:14
have a bunch of CEOs that don't know
01:00:15
what they're doing which is what these
01:00:17
charts kind of show let them buy
01:00:18
whatever they want because they're going
01:00:19
to screw it up and that's fine for us
01:00:21
anyways great for fluid Marketplace the
01:00:25
CEO that you don't want to have be able
01:00:27
to buy companies is the actually
01:00:29
motivated one to get paid when things go
01:00:32
really well and to be you know to be
01:00:33
more profitable so that would be the CEO
01:00:36
where you would be scared oh my gosh
01:00:37
more m&a for that person may be bad but
01:00:40
more m&a for these CEOs is who cares
01:00:42
yeah Microsoft starts buying a bunch of
01:00:44
stuff Google starts buying stuff at
01:00:45
their primes man that's scary right when
01:00:47
Bill Gates went on a heat or he bought I
01:00:49
think he
01:00:50
bought PowerPoint a bunch of the sweet
01:00:53
was bought not created and then Google
01:00:55
and Facebook man they went on heaters
01:00:57
YouTube Instagram WhatsApp and that was
01:00:59
the Golden Age of m&a all right we got a
01:01:01
couple more things on the docket I want
01:01:03
I just found these stats go ahead sex
01:01:05
great conversation so just while we were
01:01:06
talking I just looked up what Mary
01:01:08
Bear's compensation was over the past
01:01:11
several years and according to this
01:01:14
Source she was paid $167 million for
01:01:18
four years so while Elon got zero thanks
01:01:20
to the judge's decision Mary Barett
01:01:23
basically if you add in probably the
01:01:24
fifth year let's call it roughly $200
01:01:26
million of compensation over the last
01:01:29
five years now look at the stock chart
01:01:31
of GM literally this it is the same
01:01:34
price today as it was five years ago
01:01:37
it's $38 a share today it was $38 a
01:01:40
share five years ago no but it's worse
01:01:42
it's probably worse because they've
01:01:43
issued options since then so there's
01:01:44
dilution you have to take in so it's
01:01:46
it's worse than that actually but at
01:01:48
best the stock price is flat and the
01:01:51
stock basically fluctuated in line with
01:01:54
market trends so when there was an asset
01:01:56
bubble in 2021 the the share price went
01:01:59
up about 50% and she got even more stock
01:02:02
and options during that time but it was
01:02:05
it was a no loose proposition basically
01:02:07
she got paided regardless of how the
01:02:08
stock did and then when there was simply
01:02:10
Market volatility she did even better
01:02:13
one of the nice things about elon's
01:02:14
package is that unless Tesla at least
01:02:17
doubled in value he would get nothing
01:02:20
and it was tied to Milestones around
01:02:22
revenue and profit so he couldn't just
01:02:24
Market volatility no to getting more
01:02:27
comp if you gave this executive the same
01:02:29
deal as Elon she would have had to
01:02:31
double 38 so you know she would have had
01:02:34
to get to
01:02:36
76 rough 80 bucks a share she have to
01:02:38
get to 80 bucks a share before she got
01:02:40
anything I bet you if she got zero she
01:02:42
got paid $1 in her healthare and she had
01:02:44
to get to $80 a share I bet you that
01:02:46
would be an80 stock price well I don't I
01:02:48
don't know if she has the ability to
01:02:51
engineer that outcome but I doubt I oh
01:02:54
so she's saying she's
01:02:56
unqualified no well the Wall Street
01:02:57
Journal said it The Wall Street Journal
01:02:59
just had this tenure no that's my where
01:03:01
they said that she failed they they're
01:03:04
they're hiding the incence then yeah
01:03:06
well look I mean I don't want to say
01:03:08
she's incompetent I just want to say
01:03:09
that the stock price is the same The
01:03:10
Wall Street Journal had an article
01:03:11
talking about all her trans all of her
01:03:14
transformation initiatives have failed
01:03:15
she swept roughly 200 million over just
01:03:17
the last five years I think she's been
01:03:19
there 10 so how is she in charge she's
01:03:21
probably made several hundred million
01:03:23
dollars and and the company hasn't
01:03:25
created any value for shareholders so
01:03:27
how is she still in charge because Jason
01:03:29
this is the way the Fortune 500 works
01:03:31
it's a country club okay who gets
01:03:34
appointed to these companies these
01:03:37
companies are not run by Founders
01:03:39
they're not even run by VCS who have
01:03:40
serious skin of the game the kind of
01:03:42
directors that this judge didn't like
01:03:44
okay it's run by people who play the
01:03:46
game they basically are on other boards
01:03:50
and it's basically a backs scratching
01:03:51
club and they choose the CEO they choose
01:03:55
someone who's politically Savvy who's
01:03:57
worked their way up through the system
01:03:58
who donates to the right people who can
01:04:00
get Joe Biden to come to a factory and
01:04:02
talk about how great they are and and
01:04:04
hold an EV Summit at the White House and
01:04:06
invent this this fiction that they were
01:04:09
responsible for this Innovation this is
01:04:11
basically how the system works so
01:04:13
corrupt I'm glad that women have been
01:04:15
admitted to this country club it is
01:04:17
still a country club it is still a backs
01:04:19
scratching Club it is basically a
01:04:22
collection of people who don't create
01:04:23
any value but pay themselves enormous
01:04:25
amounts of money hob out with the right
01:04:26
people and work their way in with the
01:04:29
powers that be at the White House who
01:04:30
then talk about how great they are while
01:04:33
actually accomplishing nothing nothing
01:04:35
0.0 I think the common through line in
01:04:38
these two conversations we've had this
01:04:40
morning is about just how capitalism can
01:04:45
be perverted if you will by a small
01:04:48
group of actors in the first example I
01:04:51
think what we were talking about is the
01:04:54
Trial Lawyers Association and their
01:04:55
ability to impact and influence what is
01:04:58
going to happen around section 230 and
01:05:01
in this example I think what it speaks
01:05:03
to is the influence that a small group
01:05:05
of Consultants can have in having built
01:05:08
a very thriving business in designing
01:05:10
these compensation plans for CEOs and it
01:05:12
reminds me of a of a clip of Buffett and
01:05:16
Munger and Nick if you just want to play
01:05:18
it I think they say it in very clear
01:05:20
plain English and not to debate their
01:05:22
opinion just to State it but Nick if you
01:05:23
want to we do not bring in compensation
01:05:26
Consultants we don't have a human
01:05:27
relations department that we don't have
01:05:29
we don't the headquarters as you could
01:05:31
see we don't have any human relations
01:05:32
department we don't have a legal
01:05:33
department we don't have a public
01:05:34
relations department we don't have an
01:05:36
investor relations department we don't
01:05:37
have those things uh because they make
01:05:40
life way more complicated and everybody
01:05:42
gets a vested interest in going to
01:05:44
conferences and calling another
01:05:45
consultants and it takes on a life of
01:05:47
its own well I would rather throw a
01:05:50
Viper down my shirt front than hire a
01:05:53
compensation consern consultant
01:05:55
[Laughter]
01:05:59
um tell me which kind of Consultants you
01:06:01
actually
01:06:03
like oh man wal darford Statler you know
01:06:06
from uh the Muppet sacks remind me of
01:06:10
Statler or waldor wellar yeah well you
01:06:13
mentioned grumpy you mentioned this is a
01:06:15
problem in capitalism I think there's
01:06:17
two kinds of capitalism broadly speaking
01:06:19
there's crony capitalism and there's
01:06:20
risk capitalism risk capitalism is the
01:06:23
founder who starts with nothing but an
01:06:25
idea along with the investors who are
01:06:29
willing to write a check knowing that
01:06:31
n9ine times out of 10 it's going to be a
01:06:33
zero but maybe in that one out of 10
01:06:36
chance it's going to be an outsize
01:06:38
return that is true risk capitalism
01:06:39
everyone has skin in the game they work
01:06:41
together entrepreneur board members to
01:06:44
try and create a great outcome and they
01:06:46
work out an arrangement where everyone
01:06:49
benefits it's a win-win situation okay
01:06:52
that is risk capitalism that's the part
01:06:54
of our economy that drives all the
01:06:56
Innovation all of the progress all of
01:06:58
the job creation then you got crony
01:07:00
capitalism you got these companies that
01:07:01
have been around for a hundred years the
01:07:03
value was created by people long dead
01:07:06
and it is now managed by both directors
01:07:09
and professional managers who work their
01:07:11
way up through they go to like the right
01:07:13
business schools and they join the right
01:07:15
organizations they donate the right
01:07:17
politicians and they somehow engineer a
01:07:21
situation where they get in control and
01:07:23
then they pay them eles as much comp as
01:07:24
they can possibly justify whether or not
01:07:28
they create any value for the
01:07:29
shareholder that's what we saw at GM and
01:07:32
that's crony capitalism and you know
01:07:34
while they're doing it the president's
01:07:36
son is probably going to figure out a
01:07:37
way to take a nice big chunk out of it
01:07:39
too okay that's that's the system that
01:07:42
we have K Co with the great here we go
01:07:45
now which of these two systems receives
01:07:49
the brunt of the criticism by the
01:07:51
mainstream media who is attacked
01:07:54
and who is
01:07:56
celebrated okay here we go there's your
01:07:59
rant a great Point I've seen a zillion
01:08:01
attacks on Elon Musk I saw one article
01:08:04
pointing out that all of Mary Bear's
01:08:06
transformation in General Motors was a
01:08:07
failure created no value for
01:08:09
shareholders and the whole thing was
01:08:11
basically a fraud well how's the union
01:08:13
doing and how did the Union One article
01:08:15
and I'm frankly shocked that the Wall
01:08:17
Street Journal even ran that article
01:08:19
yeah okay yeah and how did the Union do
01:08:21
and and who did the Union get behind and
01:08:23
vote for yeah let's maybe double click
01:08:24
on a couple items there we'll see all
01:08:26
right listen I want to go over one more
01:08:27
thing we're cooking with oil here and I
01:08:29
just wanted to talk a little bit about
01:08:31
IPOs possibly coming back I just
01:08:33
interviewed Alexis Ohan and the founder
01:08:35
of Reddit which according to
01:08:37
Bloomberg they've been advised by
01:08:39
potential IPO investors to Target a $5
01:08:42
billion valuation they're going to go
01:08:43
public possibly in March which is wild
01:08:46
that's only a couple weeks away in Peak
01:08:48
Zer Reddit had raised at a $10 billion
01:08:51
valuation that was back in 2021 they
01:08:53
were valued in 15 billion in the
01:08:55
secondary Market that's where people
01:08:57
like previous employees Angel Investors
01:08:58
Etc might trade their
01:09:00
shares and so if it goes out of five
01:09:04
it's going to be between a 50% two3
01:09:07
haircut and it is trading at 4.5 billion
01:09:10
jamat we talked about this a bunch uh
01:09:12
the down run IPOs instacart I think
01:09:15
being the best example they got out but
01:09:18
they've been hovering at a really low
01:09:20
number for a long time and people have
01:09:22
been talking about them possibly being a
01:09:23
out candidate by door Dash or Amazon or
01:09:26
Uber so your thoughts on the the Reddit
01:09:29
IPO news I think that if I had to price
01:09:31
the
01:09:33
IPO I would be modeling two important
01:09:37
levers in the business the first is what
01:09:40
is the actual attainable revenue from my
01:09:44
audience and so what is the arpo of the
01:09:49
average Reddit user and you can model it
01:09:53
as a distribution and I think Facebook
01:09:55
has the best data because they've been
01:09:56
publishing it in their quarterly returns
01:09:58
for a very long time now for over a
01:10:00
decade which is there is a distribution
01:10:03
of value of a Facebook user economically
01:10:06
right at the upper end you have the
01:10:08
folks that are on Facebook proper in
01:10:11
America in a certain age band in certain
01:10:13
states that are probably like 3040 $50
01:10:16
arpus all the way down to in developing
01:10:19
countries those users are worth low
01:10:22
singled digigit dollars economically
01:10:25
and I think that people will have to
01:10:27
very much understand what is the average
01:10:29
Reddit user and what is the distribution
01:10:32
of economic value that they represent
01:10:35
that's the first thing and I think that
01:10:36
that's really the thing that will
01:10:38
determine whether it's worth 5 billion
01:10:39
or 10 billion or frankly two
01:10:41
billion and then the second key lever it
01:10:44
will be the risk
01:10:46
factors in the IPO because where the
01:10:49
shareholder lawsuits will come
01:10:51
from which will really dictate if if the
01:10:55
how the hedge fund Community buys this
01:10:57
thing is going to be the potential for
01:11:00
my ad ran against content that is deeply
01:11:03
offensive to me that whole construct and
01:11:07
I think that they are going to have to
01:11:09
very carefully ring fence that liability
01:11:12
to get this IPO to be successful but
01:11:14
also for them to execute a scaled ad
01:11:18
Revenue
01:11:19
business and not spending enough time on
01:11:22
Reddit don't know how bad of a problem
01:11:25
this is I don't think it's 4chan or
01:11:27
8chan as an example but I also don't
01:11:30
think it's Facebook and Instagram and so
01:11:32
it's kind of somewhere in the middle and
01:11:33
I think that those risks are really
01:11:35
what's going to determine its terminal
01:11:37
valuation you naed it they they've
01:11:38
always been under monetized $800 million
01:11:42
in Revenue reportedly and 400 million
01:11:45
monthly active user so two bucks a user
01:11:47
compared to you know 2030 40 for the
01:11:51
prime users in
01:11:54
yeah on Facebook's Network so it's
01:11:55
totally underutilized part of it is it's
01:11:57
a little bit of spicy content part of it
01:11:59
is that that's the number including all
01:12:00
the international users of course sax
01:12:04
there is this concept that Reddit has
01:12:05
the greatest pool of data for large
01:12:09
language models and um you know with
01:12:12
something like say Kora Maybe YouTube
01:12:14
amongst the great pools of data so you
01:12:17
think there's a play here with that they
01:12:19
have talked about they want to get paid
01:12:20
for licensing and that if you want to
01:12:21
use their data for your language mod you
01:12:23
gotta get
01:12:24
your thoughts a sure I mean that's going
01:12:25
to be an incremental Revenue source for
01:12:27
sure it's hard to know exactly how
01:12:28
valuable that is because we're still in
01:12:29
the early Innings but um I mean they can
01:12:31
definitely do something with that data
01:12:33
grock's whole competitive Advantage is
01:12:34
having exclusive access to Twitter's
01:12:37
data which is updated in real time
01:12:39
basically by hundreds of millions of
01:12:41
users so yeah look that data is valuable
01:12:43
we don't know how much I guess the
01:12:45
numbers I saw were that they're doing
01:12:47
about 800 million of Revenue growing
01:12:49
about 20% a
01:12:50
year the $5 billion valuation seems I
01:12:54
think pretty good I mean is it down from
01:12:56
10 at the peak in 2021 sure but
01:12:59
everything is down since that Peak I
01:13:01
mean that was definitely a bubble I mean
01:13:02
I can tell you we we bought some shares
01:13:05
as a late stage investment I think in
01:13:07
2018 at a $2 billion
01:13:09
valuation so you know a 2 and a half X
01:13:12
in five years I mean it's not setting
01:13:13
the world on fire but it's not a bad
01:13:15
outcome yeah and you know the investment
01:13:18
bankers will know how to price this to
01:13:20
take it out and make it successful yeah
01:13:21
and if it had a if it was a becomes a
01:13:23
billion dollars in revenue and they have
01:13:25
a 20% profit margin 200 million you you
01:13:29
can you can start doing your back of the
01:13:30
envelope math there for 25 EA you know
01:13:33
20 times price earnings ratio so it it
01:13:36
doesn't seem outrageous it does seem
01:13:38
like such valuable and own under
01:13:39
monetized uh asset do you think there's
01:13:42
a likely acquirer here if you were to
01:13:44
think about somebody who might want to
01:13:45
own this do you think it's a Microsoft
01:13:47
for the data Google for the data yeah I
01:13:49
think there's probably people who' like
01:13:51
to own this but the problem is that well
01:13:53
two problems one is they just can't get
01:13:54
it through we've talked about this
01:13:56
before the m&a window is even more
01:14:00
closed than the IPO window I would say
01:14:02
yeah and the other thing is just because
01:14:04
of the runchy content and all of the
01:14:08
brand issues that come with that it's
01:14:10
not clear to me that let's say a
01:14:12
Microsoft would want to own that
01:14:13
headache you know they might not want to
01:14:15
be hauled up in front of these
01:14:16
Congressional hearings that we talked
01:14:17
about these kangaroo courts where it's
01:14:20
very easy to go on Reddit and pick out
01:14:22
well what about this post what what
01:14:23
about that post why you let that one
01:14:24
through why' you let that one through
01:14:26
well because it's a it's a platform of
01:14:28
user generated content where hundreds of
01:14:29
millions of people post what billions of
01:14:32
items and you can have the best content
01:14:34
moderation policy in the world there's
01:14:35
always going to be edge cases that get
01:14:37
through I think that Reddit is the
01:14:38
Honeypot of of edge cases it is the
01:14:40
place you go when you're just so
01:14:43
disaffected that you can just let loose
01:14:45
anonymously it's not right I mean at a
01:14:47
certain point you have to you have to
01:14:48
realize that when people cherry-pick
01:14:50
those edge cases what they're really
01:14:52
saying is a platform like this shouldn't
01:14:54
exist yeah right because there's no way
01:14:57
to eliminate every single one or which
01:15:00
is basically like saying if you just
01:15:01
take platform you just say conversation
01:15:03
you're saying this conversation
01:15:04
shouldn't be allowed to exist they don't
01:15:06
want user generated content to exist
01:15:08
they don't want un what remember what
01:15:09
the New York Times called unfettered
01:15:11
conversations unfettered conversations
01:15:13
they want controlled conversations yeah
01:15:17
yeah pretty dangerous it just reminds me
01:15:19
of remember that Bob Iger for like 10
01:15:22
seconds was actually considering Disney
01:15:24
buying Twitter can you imagine if they
01:15:27
actually bought it what would have
01:15:29
happened I mean it would have been chaos
01:15:32
well it would have been it would have
01:15:33
been content moderation on steroids
01:15:35
where yeah they would have massively
01:15:37
empowered and scaled up content
01:15:38
moderation even more than what Jack
01:15:41
dorsey's Twitter was doing so I think
01:15:42
Jack actually he was unable to
01:15:44
operationalize his principles but he did
01:15:45
have principles in favor of free speech
01:15:47
to some degree whereas Disney I don't
01:15:50
even think has those principles so
01:15:54
they would have censored everything yeah
01:15:56
you know it's paradoxically the most
01:15:58
censored social media platform is Tik
01:16:01
Tock like my Tik Tok is bulldogs and
01:16:04
sandwiches like you chamath and then
01:16:06
Soprano's clips and every time there's a
01:16:08
Sopranos Clips when somebody gets
01:16:09
whacked they have to blur it out or they
01:16:11
the person who's uploading it takes that
01:16:13
clip and and cuts out the actual person
01:16:15
being whacked it's crazy all right I got
01:16:17
to give saaks his red meat we're going
01:16:19
to now go to our war correspondent David
01:16:21
saaks but in all serious
01:16:24
tragically we had a terrorist
01:16:26
attack and the response from some of our
01:16:32
Republican Senators was absolutely
01:16:34
insane they want to bomb Tran and go
01:16:37
after Iran and start World War I saak I
01:16:40
know you have some strong feelings on
01:16:41
this and you're always about diplomacy
01:16:44
and pursuing peace what's your reaction
01:16:46
to Lindsey Graham and the
01:16:48
neocons well you had several Republican
01:16:50
Senators try to go Biden into striking
01:16:53
Iran immediately it was you know not
01:16:55
just Lindsey Graham who's in favor of
01:16:57
every war but it was Mitch McConnell the
01:17:00
Senate repan leader John Corin and there
01:17:03
are some other ones who were you know
01:17:04
demanding immediate retaliatory strikes
01:17:07
it's very unfortunate that we had three
01:17:10
of our troops get killed and another
01:17:12
dozen or so get injured this was at a a
01:17:15
base on the border between Syria and
01:17:19
Jordan some of us have been saying that
01:17:22
we have no business being in Syria I
01:17:24
mean I tweeted 10 months ago that all we
01:17:26
were doing was putting our troops In
01:17:28
Harm's Way and risking getting drawn
01:17:32
into a larger configration and that's
01:17:35
exactly where we are right now I mean
01:17:37
you had to know and many commentators
01:17:40
pointed out that these bases are very
01:17:42
exposed they're very vulnerable they
01:17:44
don't have good enough air defense
01:17:46
against they don't really have a good
01:17:47
answer to the Swarms of drones that
01:17:51
these local militias
01:17:53
have and based on the intelligence we
01:17:55
have right now our this base is Tower 22
01:17:59
was attacked by an Iraqi militia that's
01:18:02
operating that
01:18:03
there why did they get attacked well
01:18:06
these militias want the United States
01:18:08
out of their countries they want them
01:18:10
out of Iraq the government of Iraq has
01:18:12
said we want the us out of Iraq the
01:18:14
government of Syria says we want you out
01:18:16
of Syria we are there without a
01:18:19
congressional
01:18:20
authorization for milit Force I mean
01:18:24
what are we doing in Syria we're just
01:18:26
occupying that country without again
01:18:29
without a war being ever declared
01:18:31
against the Assad regime so some of us
01:18:34
have been saying we need to get out of
01:18:35
there for some time and if we don't it's
01:18:37
inevitable that something like this
01:18:38
going to happen and sure enough it did
01:18:40
and when it does happen you get this
01:18:42
lunatic friends who unfortunately are
01:18:44
some of the leaders of the Republican
01:18:45
Party calling for a larger war against
01:18:48
Iran and I think Biden to his credit is
01:18:51
so far held back and he has not lot of
01:18:53
restraint lot of rest has shown some
01:18:55
restraint however they've been actively
01:18:58
talking about this and all the reports
01:18:59
are they're gaming this out and there is
01:19:02
going to be some sort of retaliatory
01:19:03
strike it might be focused on these
01:19:06
militias in Syria and Iraq it could be
01:19:10
attacking Iranian assets we don't know
01:19:12
if they do attack Iranian assets Iran
01:19:15
has promised a response so I think the
01:19:18
Biden presidency is at a little bit of a
01:19:19
Crossroads here depending on the action
01:19:21
they choose we could very rapidly find
01:19:23
ourselves engaged in a wider Regional
01:19:26
war on five different fronts I mean a
01:19:28
war with Iran would in involve Us in
01:19:32
Iran Iraq Syria Lebanon and Yemen where
01:19:36
we're already bombing so this could turn
01:19:38
into a huge congration in the Middle
01:19:41
East I don't think should be drawn into
01:19:44
this yeah no the answers here and yeah
01:19:47
the the craziness to me chath is like
01:19:49
these people want to go bomb Tran
01:19:52
because you
01:19:54
have you know some militias doing these
01:19:56
activities I mean this like would be you
01:19:59
know some terrorist uh who's French
01:20:01
we're going to just blow up Paris and a
01:20:03
bunch of civilians are going to die it's
01:20:04
there's no proportionality here and
01:20:06
there's and there's there's no direct
01:20:08
relationship here it's like two or three
01:20:10
steps removed what are your thoughts
01:20:11
Shaman I think the thing that we've lost
01:20:14
in this whole issue is how is it
01:20:18
possible that a multi- decillion dollar
01:20:21
drone system
01:20:23
was designed by the military-industrial
01:20:26
complex in a way where when one of our
01:20:28
drones is coming back and there's an
01:20:30
inbound drone that doesn't seem like a
01:20:32
weird Edge case where we couldn't handle
01:20:35
it because at the at the root cause of
01:20:37
what happened was a pretty faulty way in
01:20:40
which we were dealing
01:20:42
with confusion about what was our drone
01:20:45
and what was the enemy
01:20:47
drone and I think that that's also worth
01:20:49
talking about before we talk about
01:20:51
bombing another country is
01:20:53
we're the most sophisticated
01:20:54
technological country in the world our
01:20:56
weapon systems are the most
01:20:57
sophisticated weapon systems in the
01:20:58
world am I supposed to believe that if
01:21:01
Palmer lucky and andril were building
01:21:04
this system that this is what would have
01:21:05
happened absolutely not yeah that
01:21:07
there's no beaconing system on these
01:21:09
drones that you can turn on remotely
01:21:10
that there's no way when you see the
01:21:13
number of drones in an aerospace that
01:21:14
are yours so that you can quickly
01:21:16
triangulate which ones are not yours and
01:21:18
all of this to me I think is also worth
01:21:20
exploring because if it's really again
01:21:24
faulty
01:21:25
engineering because of this Monopoly
01:21:29
oligopoly in certain sectors of our
01:21:31
economy that then cause us to go and
01:21:33
make a foreign relations decision about
01:21:35
going to war and we don't even talk
01:21:37
about this thing as a root cause it's
01:21:39
worth talking about a different example
01:21:41
on the same vein of this is like it
01:21:43
turned out that in that Alaska Airlines
01:21:46
issue they actually ship the plane
01:21:49
without the door
01:21:50
plugs oops we are are the most
01:21:53
sophisticated country in the world
01:21:55
guys our our most sophisticated
01:21:59
Industries are not showing their best in
01:22:02
this moment and I think that this is yet
01:22:04
another example before we make totally
01:22:06
separate decisions about war and
01:22:09
implicating our children's
01:22:11
safety we can also just ask wait we
01:22:13
spent billions of dollars on this thing
01:22:16
how is it possible that this that this
01:22:18
like honestly like this is exception
01:22:20
handling this is like CS 101 type stuff
01:22:25
guys door plugs put the plugs in the
01:22:28
door it's it's regulatory captures the
01:22:30
answer this is crazy there's no
01:22:33
competition and they're they're charging
01:22:34
Cost Plus they're not innovating anymore
01:22:37
and they need competition right just
01:22:38
like SpaceX was massive competition for
01:22:42
all of the governmental agencies around
01:22:44
doing space extion in our industrial
01:22:49
complex and now the way to answer that
01:22:52
turns out to be a foreign policy
01:22:54
decision to go to war and I think that
01:22:56
those two things need to be decoupled
01:22:58
for a second so that we can deescalate
01:22:59
and say hold on a second this thing
01:23:02
happened but why did it happen meaning
01:23:05
of course people are going to attack us
01:23:07
we are the bright shining beacon on a
01:23:09
hill people should hate us and want to
01:23:11
attack us that's just the nature of
01:23:12
being a winner to be fair they're not
01:23:14
attacking us because we're The Shining
01:23:16
city on a hill over here just minding
01:23:18
our own business they're attacking us
01:23:20
cuz we're I Iraq
01:23:24
expect that we should expect that these
01:23:25
things work we should expect it so
01:23:28
there's a few things happening here with
01:23:30
our military-industrial complex so the
01:23:32
first one is that drones have been a
01:23:33
huge game changer we've seen this in the
01:23:35
Ukraine war the one really new
01:23:38
technological element has been drones
01:23:40
has completely changed the face of war
01:23:42
and one of the things it does it's a
01:23:44
huge leveler because these cheap drones
01:23:48
give these militias in Syria and Iraq or
01:23:50
it gives the houis in Yemen a capability
01:23:53
to strike at us that they didn't have
01:23:55
before and we saw that our air defenses
01:23:58
are just not really cut out to deal with
01:24:01
this there was that article describing
01:24:03
how it was costing us $2 million to use
01:24:06
an air defense missile to shoot down a
01:24:08
drone or a cheap rocket that costs just
01:24:11
a few thousand dollars so you have this
01:24:14
asymmetric Warfare now where we simply
01:24:18
cannot afford over a sustained period to
01:24:20
shoot down all these drones but wait
01:24:23
sorry can I ask a question yeah our most
01:24:26
important partner in that region is
01:24:29
Israel Israel has what we have thought
01:24:32
to up until now an impregnable system
01:24:35
right the Iron Dome and which is meant
01:24:37
to deal with all of these edge cases
01:24:40
right projectiles of All Sorts shapes
01:24:42
and sizes coming in every direction yeah
01:24:45
I've never heard of when the Iron Dome
01:24:46
has failed and we are sending Israel
01:24:50
billions of dollars why couldn't we
01:24:51
actually just buy the Iron Dome system
01:24:53
for them and say you know what we're
01:24:54
going to secure our bases in Syria and
01:24:57
in all of these other places yeah well
01:24:59
I'll tell you so there's a a military
01:25:00
analyst named Steven Bryan who I follow
01:25:02
he's a former under Secretary of Defense
01:25:05
and he talked about this he has been
01:25:07
calling now for before this attack
01:25:09
happened to send two iron Don systems to
01:25:12
Syria to Iraq to basically the Middle
01:25:14
East to protect our troops sense he says
01:25:16
he said in his article that the reason
01:25:18
why the US Army hasn't done that is
01:25:19
because they didn't want to buy the
01:25:21
Israeli system they favoring some
01:25:23
homegrown system that hasn't corrup
01:25:26
corruption so there's a there's a big
01:25:27
problem there that we should be
01:25:28
deploying Iron Dome there look I would
01:25:30
just get out of that area I don't think
01:25:32
we should be there but at a minimum if
01:25:33
we are going to stay there we have to
01:25:35
protect our troops so yes we should be
01:25:36
deploying Iron Dome but the problem is
01:25:39
that again just these drones are a
01:25:42
GameChanger and they can overwhelm a
01:25:45
system even Iron Dome can be overwhelmed
01:25:48
if uh Israel gets into a war with hisbah
01:25:50
which supposedly has drone it's n equals
01:25:53
1 we were overwhelmed by n equals
01:25:57
1 well I mean I'm just I'm saying like
01:25:59
it's true right we were overwhelmed when
01:26:02
n equals one there was a report just the
01:26:04
other day that one of our ships in the
01:26:07
uh red SE it was fired on by a a missile
01:26:11
from Yemen and it made it through the
01:26:14
Aegis system and they they took it down
01:26:17
with their last line of defense these
01:26:18
like close in
01:26:20
guns that was kind of scary because the
01:26:23
hoochies have missiles that are capable
01:26:25
of making it through our main air
01:26:26
defense system for ships so I'm just
01:26:29
saying like these what's happening with
01:26:30
these cheap rockets and these drones is
01:26:32
it's giving our opponents capabilities
01:26:35
that level the playing field a little
01:26:37
bit but this is what I'm saying I
01:26:38
understand that concept but I also
01:26:40
understand that we have people on the
01:26:41
ground that work for Team America again
01:26:44
I'll just I'll take Palmer lucky as the
01:26:46
example who frankly I would bet on a
01:26:48
thousand times over a hooti rebel he'll
01:26:50
outsmart and outow these guys why aren't
01:26:53
our best and brightest people in a
01:26:54
position to make these things because
01:26:56
you're right the defense industry is
01:26:58
dominated by five of these Prime defense
01:27:00
contractors who work on Cost Plus or
01:27:03
basically an oligopoly they're not
01:27:04
particularly Innovative but they just
01:27:06
keep charging more every year for the
01:27:08
same product so we're getting less for
01:27:10
more money and they're led by a
01:27:12
leadership who are motivated in a way
01:27:15
where the returns that they generate and
01:27:17
the success and the progress they make
01:27:18
is not really coupled to progress right
01:27:20
it's not really coupled to building an
01:27:23
even better version of Iron Dome it's
01:27:25
about as you said having a job that
01:27:28
you've earned over many years of fty and
01:27:31
then getting paid an enormous amount of
01:27:33
money to just keep it going in the same
01:27:35
direction even if that direction means
01:27:37
you've been a drift for decades that's
01:27:39
the shame of it and then you're seeing
01:27:40
every day like isn't it incredible
01:27:42
Lindsey Graham is saying hit Iran and I
01:27:45
bet you Lindsey Graham is to getting
01:27:46
donations from those five companies I
01:27:48
don't I don't know but look there's no
01:27:50
question that we we need to shake up the
01:27:52
military-industrial complex we need to
01:27:54
get a lot more startups in there there's
01:27:56
a lot of VCS now who are funding defense
01:28:00
startups so it is a big area andrel
01:28:02
obviously is kind of the leader of the
01:28:03
pack but there's a bunch of others
01:28:05
getting funded I saw that Eric Schmidt
01:28:06
even created a drone company so this is
01:28:09
going to be a huge area of innovation
01:28:12
and I think that because of the Ukraine
01:28:15
war the Pentagon must now realize the
01:28:18
urgency of being able to mass produce
01:28:21
effective drones as well as create
01:28:24
effective drone air def counter measures
01:28:27
yeah counter measures yeah just to give
01:28:28
you a sense of this like
01:28:31
we led the series a in a company called
01:28:33
sa drone about seven years ago and they
01:28:36
make drones for the Seas right and what
01:28:39
we did was we put these massive sensor
01:28:41
arrays in these drones and because of
01:28:45
because of these sensors it has perfect
01:28:48
visibility into what's going on in any
01:28:51
condition of weather right day night it
01:28:53
doesn't matter and so these drones in
01:28:55
the Middle East all over the waterways
01:28:58
allows us to have perfect understanding
01:29:00
of what's going on but despite that it
01:29:03
has taken years for us to be in a
01:29:05
position to generate enough revenue and
01:29:07
now we're finally at that scale with the
01:29:09
Navy and and
01:29:10
whatnot but David to your point it is
01:29:13
incredibly hard for startups no matter
01:29:16
how in Innovative we've been to break
01:29:18
through this log Gem and it and the
01:29:20
reason is because what we are at is not
01:29:22
what's rewarded we are good at
01:29:24
engineering and execution but what is
01:29:26
rewarded to your point is this very
01:29:29
lobbying specific form of relationship
01:29:32
management right and cultivating certain
01:29:36
pockets of influence it's a very
01:29:38
difficult game to play if what we come
01:29:40
as brigh eyed bushy tailed from
01:29:42
California with a product that we think
01:29:44
is superior that actually helps Advance
01:29:46
American
01:29:47
exceptionalism it still doesn't always
01:29:49
land it takes a lot longer than it needs
01:29:51
to in some cas cases yeah I mean so the
01:29:53
Pentagon and the military industrial
01:29:55
complex are is going to to be a lot more
01:29:57
permeable to this type of innovation I I
01:30:00
think that they're going to be
01:30:00
incentivized to do it now because they
01:30:02
have to see what's happening in Ukraine
01:30:05
what's happening in the Middle East and
01:30:06
they realize that the Gap is closed and
01:30:09
we had three innocent people that were
01:30:10
killed these people didn't deserve to
01:30:12
die they didn't deserve to die in an N
01:30:14
of one it's not an edge case n of one
01:30:16
there was a
01:30:17
drone come on guys we're better than
01:30:20
that and so what do you think's going to
01:30:21
happen if we get into a war with Iran
01:30:23
every single one of our bases in Syria
01:30:26
and Iraq and we have a lot are going to
01:30:27
be sitting ducks to your point you're
01:30:29
forcasting you're you're orchestrating a
01:30:31
game plan for them because it's like if
01:30:33
you if you were going to enter a war
01:30:35
does it take a brilliant strategist to
01:30:37
sit in the room and say wait a minute if
01:30:38
they can't defend against one what
01:30:40
happens when we send 12 yeah what
01:30:42
happens when we send 12 to every single
01:30:43
place and and to your point Jason it's
01:30:46
this is like the unnecessary escalation
01:30:48
that then happens because then we have
01:30:50
to respond with more
01:30:53
Force energy it it was a certainty look
01:30:56
we I've been talking on the show about
01:30:59
how our bases in Syria and Iraq have
01:31:01
been under attack by these militias for
01:31:03
months I think the last time we talked
01:31:05
about it there had been something like
01:31:06
80 attacks and it was just a matter of
01:31:09
time before Americans servicemen were
01:31:12
were killed unfortunately and so like
01:31:14
you said jamat this was predictable
01:31:16
what's also predictable is that if we
01:31:19
get in a war with Iran every single one
01:31:20
of our bases will be attack act if we
01:31:22
strike on their soil they will strike
01:31:24
back and they have Hypersonic missiles
01:31:26
they have Precision missiles they can
01:31:30
destroy every one of these bases unless
01:31:31
those bases have the top-of-the line air
01:31:33
defense which most of them don't but if
01:31:36
you go to someone like Lindsey Graham
01:31:37
and say listen our troops are vulnerable
01:31:40
we need to basically either pull out of
01:31:43
Syria and Iraq or we need to consolidate
01:31:45
down to a few bases that have Iron Dome
01:31:47
or the best systems these neocons will
01:31:49
say absolutely not we're not conceding
01:31:51
anything
01:31:52
yeah so and they would they would never
01:31:54
pick up a gun theyd never wear a uniform
01:31:56
hypoc they want us to strike Iran so
01:31:59
these these strategies don't line up if
01:32:02
you wanted to attack Iran the first
01:32:04
thing you would do is basically get all
01:32:06
of our troops out of harms way who are
01:32:08
currently sitting ducks for Iranian
01:32:10
retaliation by the way I think that'd be
01:32:12
a terrible idea but that's what You' do
01:32:14
so they have these strategies that don't
01:32:16
make any sense all right everybody this
01:32:18
has been an amazing show for the
01:32:21
dictator chairman himself sham poaa the
01:32:24
Rainman yeah David Sachs I am the
01:32:27
world's greatest moderator we miss you
01:32:29
uh sultant of science David freberg
01:32:31
could have make the show and uh we'll
01:32:33
see he's still in the if anybody gets
01:32:35
into the Apple Pro Vision Vision Pro and
01:32:39
is somewhere out in the universe by
01:32:41
Uranus and you see him bring him back
01:32:43
for next week somebody go find him we
01:32:44
got to send out a search party to your
01:32:45
Uranus love you boys byebye
01:32:50
byebye to let your winners
01:32:53
ride Rainman
01:32:57
David and in said we open source it to
01:33:00
the fans and they've just gone crazy
01:33:02
with it love queen
01:33:07
[Music]
01:33:10
of Besties
01:33:13
are my dog taking your
01:33:16
driveways man oh man my habiter will
01:33:21
meet me at we should all just get a room
01:33:23
and just have one big huge orgy cuz
01:33:24
they're all this useless it's like this
01:33:26
like sexual tension that they just need
01:33:27
to release
01:33:28
[Music]
01:33:34
somehow we need to get
01:33:39
[Music]
01:33:43
mer I'm
01:33:46
[Music]
01:33:48
doing
