00:00:00
You sound smarter when you catastrophize. It sounds scarier and more interesting. And you put some bar
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charts around you talking about the zombie apocalypse in a downward spiral doom loop.
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Hi everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Cara Swisser
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>> and I'm Scott Galloway. >> Why don't you give us an update because
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February is coming to an end. You've had over 20 million views across social
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media and over 1.5 million site visits. obviously has a lot of momentum. People mention it to me all the time. Your
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website touts $242 million loss in market cap. Talk a little bit about how it's gone because we have something to
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announce. But first, give me a little update and then you can do the big announcement. Yeah, look, I'm the honest
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truth is I'm struggling because it's taken a lot of time and a lot of effort
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and it feels as if it's the momentum is actually cumulative and building and
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I've had a lot of different kind of smaller I don't know resistance programs
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reach out and say what are we are going to do in March should March be should we
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met March where we focus on one company or focus on open AI should it >> right so and how do we keep it going
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because it does feel like it's >> it's building momentum and to just shut
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it down at the end of the month feels like a loss of effort and momentum. So, >> I'm quite frankly, Cara, and I want your
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advice. I'm trying to figure out what to do with it going into March. >> Well, as I said, uh first of all, let me
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well, before I say what we're going to do to in March, um is uh I think you should hire someone specifically, not
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part of your team, but hire someone to really keep it going. and someone who wears Birkenstocks, lives in Brooklyn,
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>> a lesbian, >> someone with rich parents putting them putting them through nonprofit.
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>> Whatever it takes, Scott, whatever it takes, but I think it's important to to
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have someone at >> Do you drive a Subaru? >> No, my son does. Um, so
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>> your son would be great at this. What's Louis doing? >> He's in San Francisco working for
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>> Oh, perfect. >> No, you're not. No, >> I don't know if you've heard, but I pay
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really well. >> I know. Well, we have a lot of dick jokes, but I compensate 50 to 100% of
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market. True story. The dick jokes and the compensation. >> Wants to help. You know who you want is
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Alex, but he wouldn't do it. Alex is so like he would engineer this out of >> Michigan. He's taking like organic
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chemistry and computer science. He's working for >> and working out and like lifting lifting
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buildings. And >> this the title that he has for this summer where he's working his advanced
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manufacturing product integration engineering intern. >> That rolls right off the tongue.
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>> I know. I was like, wow. >> Can he just say pole dancer? >> Pole dancer. Advanced manufacturing
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product integration engineering intern. That is what my second son is doing. Did
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I tell you when I was on uh the college tour with my son Alec, the first thing the literally the first thing the first
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impression we got of Michigan was Alex's fraternity and we were both like just
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scared >> scared as he's leaving the floors were sticky >> sticky.
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>> It I I lived in a fraternity and I don't I don't I it like brought back I'm like
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was it this bad? >> Yes. And it smells like beer. Old beer. >> Oh yeah. A beer.
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deer and seaman. Um, yeah, I know. But yeah, it just uh >> Yeah. Yeah. He's he's going to live in
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an apartment for his senior year. But so he's leaving the frat finally. And my
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little boy is >> Yeah. And the house was clearly built like 200 years ago. He looked like
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Guliver roaming around. >> Yeah. Yeah. You want to go back? I feel like you want to go back for a party.
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But speaking of I'm in. >> Okay. All right. >> I'm definitely that pathetic guy that
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shows up at the fraternity party when he's invited. >> Yes. No. That's so sad. um that there
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was there was a shot there was a Seth Rogan movie like that. Anyway, listen, >> we are going back to the Midwest. Let me
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just say this is not ending. I think you should hire someone. I think you should
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keep going. But we are going back to the Midwest. We're not going to Ann Arbor,
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but we um uh Scott and I are coming to Minneapolis. We talked about it on the show and then we made it so along with
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our great team here. And you can see us live. We're going to celebrate, resist,
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and unsubscribe and keep the momentum going. We're going to do a live show at
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the Is it the Pantages Theater? >> Pantageous. I've been >> Pantageous Theater on Sunday, March 8th.
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We will be there. >> I want to meet Roa from Mary Tyler Moore. That's why I'm going. That's And
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you know what? I hope she's wearing a raspberry beret. Get it? Get it, Cara.
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Little local. Little local humor there. >> Talk about the tickets. They're not
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available yet, right? >> They go on sale. I think by the time this airs, they're on sale. Yeah,
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>> we're going to be donating all proceeds to the Minneapolis Immigration Center, I
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believe it's called. >> But we want to do something. Well, a very supportive and we've decided I
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won't say we wait. I've decided I want a fra I want my efforts off the [ __ ]
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keyboard and off my to be a fraction of the virtue signaling and action I claim I claim to, you know, want to have. And
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so I pitched you on this idea and we thought, let's go to Minneapolis. We want to bring some economic activity. We
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want to salute them. We want to basically say over and over that they [ __ ] with the wrong cowboy when they
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came to Minneapolis. It's going to be a nice event. You, of course, are totally
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wellconed. We're going to have a bunch of fun and famous surprise guests. >> Yes.
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>> And we're going to do we're going to do a live show and basically nod to the to
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the incredible Americans known as Minneapolis. >> We love the Minneapolis. and the the if
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you jump straight to the website the the you can find a link to buy them when the
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tickets are available. We think they're going to be available on Friday uh at
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resistandunsubscribe.com. We've got a thousand tickets. Uh again, the money goes straight to charity. We
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will do we're going to run this show on pivot too. So we'll talk about some
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current events, but we're going to focus on what's happening here with Resistant
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Unsubscribe. And we know we have a lot of fans there and we love Minneapolis. We love what the city has done and we
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want to give back in some way. And this is one of the many ways because what happened to you was heinous and at the
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same time tech companies have a lot to do with this like let's be clear. Um and
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so we really what Scott is doing here is giving you guys have resisted and we are
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going to do our little part and it's a little part compared to what Minneapolis
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has done. But tech is not not it's not the only reason obviously but it's
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played a part in where we are today. And so um we're going to resist and unsubscribe and everyone's going to
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unsubscribe. Speaking of unsubscribed, Scott, I unsubscribed from One Medical, which is an Amazon uh product. Um,
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>> did you have the 99 a year or 199 a year? >> 199 a year. >> And were you using it?
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>> I a little bit. Yeah, absolutely. And I love >> I love the service. I just hadn't used
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it in several years. >> Yeah, I I I use it when I get like an ear in every time I get an ear infection
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or something like that or clean out my ears or a cold or a flu. >> That's a little too much information.
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Tell us about the ear cleaning. >> Okay. >> Tell us about the ear. wax in my ears
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and so I've unsubscribed our entire family from it could be less attractive to a heterosexual.
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>> Um >> anyway I'm I'm doing just fine by the way. Anyway, we've got a lot to get to
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today but March 8th Minneapolis tickets will be on sale soon. Please come. Um and we're super excited to see you.
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We've got a lot to get to today. So we're going to dig in. First, President
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Trump delivered the longest State of the Union ever on Tuesday, 1 hour and 48 minutes, where he of course said
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Americans were telling him, "We're winning too much." Uh, did you watch
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Scott thoughts? >> It was on too late. I watched I did what I did with almost all media broadcast on
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traditional cable. And as I watched it in bits and pieces on, you know, Tik Tok and reals the next day, I felt like
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>> for Republicans, I felt as if they were attending their ex-wife's wedding when
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you're still on her health insurance and but he but she controls the military. It
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felt like dear leader in the Duma where they thought I better stand and applaud or I risk execution.
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>> Yeah, totally. >> So, I found it I don't know. I I quite frankly I thought it was a bit of a
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nothing burger. He didn't he didn't say a hell of a lot. I thought he came
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across as quite robust to be fair. >> He came across as robust, but he moved
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very quickly by the end into very deflated. Like it was really, if you watch the whole thing, he started off
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real like energetic and then he got mean. He was normalish for him and that's a that's a very low bar, but he
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as you as the night progressed, he got super mean calling the Democrats crazy. And then that [ __ ] idiot in the back,
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Jo JD Vance, was like like he looked like such a dope. He has he has no right being to be president. Sorry, I'm going
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to He's just such a dope. Um the Supreme Court went and stonyfaced and every time
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Trump did something like the Democrats are crazy. The Republicans, as you said, jumped up like a bunch of like like
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dancing monkeys essentially. The Supreme Court sat down, the military looked straight ahead, which was really
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interesting. And of course, the Democrats sat down and they wanted the Democrat to have photos of the Democrats
00:08:57
not agreeing with immigrants shouldn't kill American citizens. They wanted photos like that. I thought it was
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mendacious and if you look at any of the lie stuff, there's a lot of it. I thought it was it veered into cruel as
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usual. And then the worst part was it was dull. It was actually dull. And that's to me the worst part. And of
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course the numbers show much less people watch it. 28 million versus 36. It's
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like um doesn't have any staying power and he denied Americans were suffering.
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That's one of the things which I thought was a mistake. So >> I thought from a political standpoint,
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is it Abby Spanberger? Is that her name? >> Yeah, Abigail Spanberger. >> Uh Abigail,
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>> governor of Virginia. >> I thought her rebuttal was outstanding. And I I came up with an idea. I want to
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pitch you and I'm serious now. And I actually called one of our favorite senators and I said, "I have an idea.
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Uh, I think they should hire, if you think about essentially the Democratic response should turn into
00:09:56
what the halftime show is to the Super Bowl. And that is a halftime show had almost no relevance 40 years ago. Now
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it's bigger than the Super Bowl. >> I said, "Hire Jay-Z's Rock Nation."
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>> Oh, >> fill a stadium with 10,000 rabbid Democrats. >> Yeah. And then you get all excited.
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>> Music, cool, cool intro. amazing artists, uh, graphics, visuals, great lighting,
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because the problem is the followup, whether it's Marco Rubio responding, the
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response always comes across as flat because it lacks the sex and the majesty of the
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>> jazzed up. I agree. The lighting wasn't good. >> Let's sex it the [ __ ] up because if you
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listen to what she said, if you read her response, >> yeah, it was good. >> It was outstanding.
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>> The lighting was bad. This the setting was bad. >> It's just they can't compare. It's like
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going from >> the Greek theater to you're, you know, you're watching something on laser disc.
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>> Yeah. >> It reminds me of you, I think you'll appreciate this.
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>> myself for thinking that, but I'm like, the lighting's bad and the setting is
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bad. It's >> um >> away and it was too close. >> When I was renovating a house in the
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Hamptons, let's bring this back to me. Um, I used to go to the g the 7-Eleven
00:11:04
and a bunch of guys uh uh would roll up and I'd say, "Okay, I need some guys to
00:11:09
do stunt studing or something like this in my general contract. I would just sit
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in the passenger seat with a bunch of cash." And I had no less than 12 or 15
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workers at any time at my house doing [ __ ] And at night I'd roll in and they'd all be in the kitchen with a VCR
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and a big like four pizzas and like 24 um it was either a Medelas or something else and they'd have this bad black and
00:11:33
white TV and all these guys would just be sitting around watching porn. >> Oh
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>> yeah. And I remember thinking this is odd. This is odd. >> Story is odd. But go ahead.
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>> This is odd. No, that's it. That's the whole story. >> Okay. Okay.
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>> That's the whole story. >> Don't do that. Democrats do not have
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Medela pizzas in Pol. >> I had a This is what a douchebag I was. >> I had a sand beach volleyball court.
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>> Okay. Okay. You're losing the resistance. >> Optimized for the ladies.
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>> All right. Okay. Let's move. You have progressed to a better person and now
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you're a lesbian going to Minneapolis. I'd like you to wear Birkenstocks, by
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the way. I think that would be great. Anyway, it was a nothing burger and he looked mean and I I thought he got he
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real got and and started doing the blah at the >> he didn't say anything and he didn't
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outline he teased tax cuts which I was interesting to see. Okay. He didn't talk
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about AI much. She didn't do anything forward. >> He didn't really He didn't really talk
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about Iran much. He didn't >> The show is The show is winding down. That's what I thought. It reminded me at
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the end of >> The Apprentice. It wound down. It suddenly wasn't interesting. It was
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macdacious and cruel, but that that's sort of table stakes with him. >> Dull is what I thought. Hi everyone.
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Scott and I just recorded earlier today, but I'm jumping on because a major story
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just broke. After a long battle, Paramount has won the Warner Brothers Discovery Bidding War. or at least for
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now. Netflix has released a statement saying the deal is quote no longer financially attractive. It never was.
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And it was quote always nice to have at the right price, not a mustave at any price. Perman had upped its offer to buy
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all of the company for $31 a share and added all kinds of bells and whistles. And Warner determined the offer was
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superior to Netflix because it was actually. So I'm joined now by Puck's
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Bill Cohen to break this all down. Bill, we you and I have been texting about this for a long time. You thought it
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would be quick and Paramount would get away. I said this was going to go on on and on and it has. It's really been like
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since December I think we've been whenever it sort of broke >> but talk a little bit about your
00:13:30
overarching things and we'll talk about a few other things. >> Oh look, I think this uh Carol is the
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outcome that had to happen. U you know uh whereas Netflix was saying it was nice to have at the right price it was
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getting to be nosebleleed territory. Paramount this is existential. I mean, without this, they're just like an 11
00:13:50
billion company, which once upon a time would be nothing to sneeze at. But now was a pipsqueak in this landscape. If if
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they hadn't done this, then their their original premise for the Parammont deal
00:14:01
wouldn't have made much sense, and their equity wouldn't do anything. So, this
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was kind of existential for them. They had to pay up. They had to win. And kudos to David Zazlov for running one of
00:14:13
the best AMA processes I've seen in a long time. people who forget. Um, yesterday was I had tweeted that Netflix
00:14:20
had to walk away from this because it was just ridiculous. It was an insane price and Warner was at uh was at $10 a
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share recently and it popped to 31. Was there $21 of of excellence that had been
00:14:34
created? Not at all. From nothing, right? It's like whipped cream or something.
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>> Well, it it it actually got as low as $7 a share. And remember, >> right, I do remember um
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>> I was recommending people, you know, buy at that price, but cuz I thought they
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would pay down the debt and make something of it. But, you know, he's, you know, ever since September 11th when
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Paramount first began to hint that it was interested in buying this and it offered $19 a share, uh, we've gone from
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7 to 31 and and it's, uh, and what not not because the companies have, uh, performed, uh, particularly that much
00:15:12
better. I mean, they've performed fine and and Warner Brothers had some hit movies, but it's just because of the
00:15:18
scarcity value. The fact that he ran an Zaz ran an incredible auction process, kept them on both sides on their toes
00:15:25
the whole way. And uh especially this last bit of uh of of jiu-jitsu was just beautiful to watch.
00:15:34
>> Yeah. >> Yeah. I I said he won the Jeff Buucas award for turning chicken [ __ ] into
00:15:37
chicken salad and feeding it to a Nepo billionaire. like >> that's, you know, Jeff Buucis was the
00:15:43
last guy at uh Warner Brothers to, you know, make a fortune selling the company to AT&T and now Zaz has done it again,
00:15:51
>> been sold again. So, let's break it apart a little bit because one of the
00:15:54
things that had begun to dawn on me and you and I I always thought Netflix was the better owner in terms of taking
00:15:59
these assets and doing something significant with them. I felt like the purchase the Paramount is not as good
00:16:05
going to be as good as owner. still too small. Instead of a leaking lumbering media ship, it's a bigger leap, you
00:16:13
know, lumbering ship. I don't see how they're going to just cuz they're
00:16:17
slightly larger, be that much better unless they are run by someone who's more experienced. It's like I think
00:16:25
David Ellison should get out of the way and you know I know they have Jeff Shell
00:16:28
very talented George Cheeks many others but they really they they don't have the
00:16:33
executive fortitude I think to do much with this and Netflix later can come swooping in
00:16:39
and take off parts. How do you look at it? >> Look, I know they're very excited over
00:16:43
at Paramount about winning. I know they're very excited about their business plan and what they think
00:16:48
they're going to do with this. You know, they're going to have to combine CBS and
00:16:52
CNN. I can only imagine what the feelings are over there. Uh yeah, probably not great. Uh you know, there's
00:16:59
a lot of bloat probably on the CNN side that's going to once again come under
00:17:04
the come under the axe. Um you know, as we've discussed many times, G, I think
00:17:10
that, you know, David Ellison has blundered a few times already out of the gate.
00:17:16
>> U Sheridan losing that. you know, that was a big big loss, you know, >> bigger than the CBS disasters,
00:17:24
>> which are not nothing either. Uh, you know, overpaying for, you know, UFC or
00:17:30
whatever it is. I mean, uh, you know, so I think there's, you know, they've got a
00:17:35
lot to prove is, but nevertheless, uh, they've got a lot to prove, but they also had, this was existential for them.
00:17:44
They had to, they had to win. And for Larry Ellison, I mean, if if it weren't
00:17:48
for Larry Ellison, we wouldn't be here. We wouldn't be talking about this. We
00:17:51
wouldn't have this discussion. They would never have been taken seriously. They never could have done the deal. So,
00:17:55
it's Larry's unbelievable amount of equity that that he's willing to step
00:18:00
up. is something like $45 billion of equity, 25 billion from Middle Eastern private uh sovereign wealth funds and
00:18:10
the rest from Larry and and you know Jerry Cardell at Redbird Capital uh with most of it coming from Larry. I mean
00:18:18
this is an unbelievable amount of equity, an unbelievable amount of debt. It's probably going to be like the
00:18:22
largest LBO kind of in history except they're not taking the company private.
00:18:26
uh there, you know, was remaining. >> Let me ask you in that regard, you know,
00:18:30
would you compare it to what Elon did at Twitter like that? I don't know. Someone
00:18:34
was like, well, can't they do what Elon did, meaning the the bankers sort of
00:18:37
gave up and he managed to get his money back cuz he squeezed it into a different
00:18:41
company. I don't think they have that choice here. This is they're just have
00:18:45
the media company. Correct. Hey, well, you know, if they want to create P AI and create a AI company and have
00:18:53
everybody go crazy for it and then have the AI company buy the media company and
00:18:58
then, you know, merge it with SpaceX. Okay. I mean, you can do you want to go do all those crazy things. Maybe they
00:19:04
can uh uh pass it off onto somebody else. Maybe Elon will buy it. You know, Elon could buy it out of petty cash.
00:19:10
>> He could. He could. Why did Larry Ellison do this? because he seems to me
00:19:15
he's a smart customer about a lot of things. This seems like buying a yacht or something. Well, he has a yacht. What
00:19:21
am I talking about? But you know what I mean? It seems so unlike him. Perhaps he's old. Perhaps he wants to leave a
00:19:26
legacy for his son who likes to make movies. What What is Cuz from a financial point of view, this is not a
00:19:32
Larry Ellison move to me in my mind. >> No, this is you know they're going to
00:19:36
have 70 plus billion of debt here. Cara, it's a lot of debt. you know, maybe they
00:19:42
have 11 or 12 billion of cash flow. Maybe um it's a lot of debt. Uh they're
00:19:49
going to have to make a lot of cuts. Uh they, you know, they believe they're
00:19:53
going to delever quickly. You know, every buyer, every buyer who puts together a leverage company thinks
00:19:59
they're going to delever quickly. Uh sometimes they do, sometimes they don't.
00:20:04
Maybe Netflix will get another chance at this when the thing flounders. But why did Larry do this? I think it's edible.
00:20:10
I mean, I think he wanted to do this for his son and he started down the path to
00:20:14
do it. It, you know, it went it went from 19 was their first bid to 31. Uh, I think he felt like, you know, this ego
00:20:22
was involved if he didn't do it that that, you know, he'd have egg on his
00:20:26
face kind of thing. And he's got now Trump expecting him to, you know, change
00:20:30
the dynamic of the two companies in terms of the politics. And so, I think he felt like he had to do it. once he'd
00:20:37
started it and you know he basically caved and gave Zaz everything he wanted every little
00:20:42
>> which is so unlike Lariel I was like sort of like what a chump I never called
00:20:46
Larry Ellison a chump before but I feel chump that that Zazov ran circles around
00:20:50
them >> completely got into deal heat and gave Zazlov everything he wanted I mean
00:20:56
they're happy over there >> I know cuz they're like they're like you
00:20:59
know they're pumping fists but honestly I was like oh dear oh oh dear that's
00:21:04
what I there's going to be a hangover for this there's definitely So, two more questions. You mentioned
00:21:09
Trump. One of the things that everyone's worried about, of course, is Larry Ellison owning Tik Tok. He does. And
00:21:13
Oracle owns 15% of Tik Tok, which isn't a huge amount. It's it's a significant
00:21:17
amount, but it's not the most amount. Um, and owning CBS, which I think was a
00:21:22
falling knife. So, I'm not really clear why everyone's they're obsessed with it
00:21:24
because it's a good story, but it's not a I would say, you know, we just did an
00:21:28
analysis of Pivot and we have more people in the demo advertising than see, you know, all of these companies do, all
00:21:34
these cable companies. So, it's not that it's the news organization and CNN has
00:21:39
been declining. Like, let's be clear, like the numbers have been declining. All of cable has, not just CNN. Um, what
00:21:46
do you think it's a political thing or or what? Or or and also lastly, Trump's
00:21:51
running out of time, right? Trump is absolutely running out of time. So, look at address the political issue. And then
00:21:58
secondly, the regulatory issue could still get very ugly with Democrats attacking this if they get back in the
00:22:04
in control of the legislature. Correct. Presumably. >> Well, let's take the regulatory uh you
00:22:10
know, first they uh made a big deal of them getting through Hart Scott Rodino that which meant that there there wasn't
00:22:18
going to be a deep dive into this by the DOJ. Although they could still come back
00:22:24
and take another look at this now that it's a kind of a different deal, a new
00:22:27
deal. They could. They probably won't, but they could. They got the EU. They
00:22:31
were definitely working the EU. You know, David and Jerry Cardell were over there working the EU. They think they're
00:22:37
in good shape with the EU. So they think between uh the DOJ, the EU, and Trump being on their side because he's going
00:22:45
to you know give them the political uh you know format that he wants and be supportive of him which you know
00:22:55
whatever. Uh it's ridiculous if you ask me but um um you know that they they
00:23:00
think they've got the regulatory situation in hand. Um, you know, politicians make a lot of noise about
00:23:07
these mergers, but they have no say in the approval of them. Um, so even if the Democrats take the House in uh uh uh you
00:23:16
know, November, I'm not sure what what this you know, this is going to be this
00:23:21
could very well be over by then. You know, they put in the so-called ticking fee. if it's not over by the end of
00:23:26
September, which is obviously before the elections, they're going to owe uh uh
00:23:32
Warner Brothers shareholders another 50 cents a share or $650 million. So, um they think
00:23:39
>> the impetus is to do something quick to get it quickly done. >> They some things they can't control, but
00:23:44
I mean, uh they obviously are very con they're highly confident, Cara, they're
00:23:48
going to get this through the regulators and uh you know, they'll give Trump what
00:23:53
he wants. And I'm not sure the Democrats, even if they take the House, can do anything about what CBS and CNN
00:23:59
broadcast >> at all. >> It's up to the FCC and that's still in
00:24:04
Trump's pocket. And, you know, Trump blithering away, you know, asking for them to give him favors and get rid of
00:24:11
Jake Tapper or whoever they want, whoever he's mad at might be part of it. When you think about where Netflix goes
00:24:17
from here, I think it was the smartest move. The stock is going to soar. They have plenty of money to do things.
00:24:22
They're so innovative. They're such great operators, right? They're sort of
00:24:26
It's not a bad thing. They could do a distribution deal for some of this content and then later just wait until
00:24:31
the knife falls, right? Presumably, what would you do if you were I thought this
00:24:36
is exactly what he was going to do? >> Right. And this is what I wrote that
00:24:39
exactly he should do yesterday and then I don't know whether he reads it or listens to me or whatever, but he he did
00:24:44
exactly the right thing. >> Um he he he looks smart. Stock is going to move up after moving down like 30%.
00:24:51
He takes this 2.8 $.8 billion breakup fee and uh builds out his new movie studio in New Jersey and gets content
00:24:59
deals and you know looks smart and disciplined and that's what investors like.
00:25:04
>> Looks like the good guy. >> He does. He looks like the He looks like
00:25:07
the good guy and he can move on from this. It was going to be a headache for him if he got this. Sometimes the
00:25:14
smartest thing you can do in a deal car is to walk away and he did the smartest thing. So he's going to get plottits all
00:25:20
around. He, you know, he could read the tea leaves. He wasn't, it was going to
00:25:23
be a regulatory nightmare for him to get this through. Trump was not going to make it easy for him. He already
00:25:29
>> bloiated about firing Susan Rice and >> Ted didn't do it. And so, you know, who
00:25:34
knows what was going to be in store for Ted, but uh he he did the smart thing here.
00:25:38
>> So, very last question. When you think about what happens next for for consolidation, this is it's obviously
00:25:44
Comcast has got to be like going what do we do? Disney's got to go, what do we
00:25:47
do? Netflix now looks like it's willing to play at least because it wasn't an
00:25:51
acquire very much like Apple but it is they're very opportunistic now um and in
00:25:57
good now they've had this they've never done this before now they know right
00:26:00
they've done they've worked on a big deal what do you see next if you could
00:26:04
make a prediction >> well I mean it's it's quite you know a lot of people have been thinking that um
00:26:10
Comcast would you know uh spin-off NBCU and maybe you know Netflix and NBCU get together. Um, but you know, I don't
00:26:20
really think Netflix needs to do any of that. You know, now they got a little taste of it. Maybe they thought, well,
00:26:25
they walked around the, you know, the Warner Brothers lot. That was kind of fun. And now I guess maybe they could
00:26:31
walk around the Universal lot. They're building their own lot. I'm not sure
00:26:35
they need to do it, but if they want to do it, I think there would be opportunities. You know, there's Amazon
00:26:40
Prime. There's uh I'm not going to do anything with Disney, I don't think. But
00:26:44
NBCU, there are some smaller studios they could, you know, get their hands on. They, you know, AMC and things like
00:26:50
that. I I I don't really see that they have to. I think Ted sort of had fun here. He showed his medal. He showed he
00:26:58
can be a dealmaker. He got a merger agreement. Uh and he showed himself to be disciplined. And he comes out is he's
00:27:04
the big winner in all this. And him and Zaz, of course, >> right? Absolutely.
00:27:07
>> Zaz is the $600 million winner. I swear this guy this guy Mr. Discovery.
00:27:13
>> Yeah. >> Mr. Mr. Diner. >> He ran the M&A deal of the century.
00:27:18
>> I I got to give it to him. I got to give it to him. I always run him down when I
00:27:22
see him. I joke with him. I say he looks like a lesbian. But he I have to say he
00:27:27
he did a great job here for his shareholders, right? For the I mean literally seven.
00:27:33
>> Amazing amazing deal. And good luck Ellison's good luck on catching the car.
00:27:39
Good luck. >> We'll wait for the sequel. >> All right. The other winner here um is
00:27:43
you. You've done an amazing job in covering this and I like debating with you and uh it's really helpful because
00:27:49
it's smart and it's clear and uh and you're you're non-romantic about any of
00:27:54
this. Anyway, uh I appreciate it. Go to Puck to check out Bill Cohen's reporting
00:27:59
and we'll take a quick break and Scott and I will be back with Nvidia's earnings.
00:28:04
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the right way with Indeed. Scott, we're back with more news. Nvidia reported better than expected fourth
00:29:10
quarter earnings with a profit hitting 120 billion. Only a handful theirs was revenue. Only a handful of other
00:29:17
companies including Alphabet, Microsoft, and Apple have made over hundred billion
00:29:20
in profit in a in a year. Uh net income for the company doubled to $43 billion. Revenue in the data center business rose
00:29:29
75%. um uh talk about that because Wall Street was also rattled this week by a viral memo from market an analysis firm
00:29:38
Citrini Research very good research group the memo laid out a scenario where the AI systems trigger mass white collar
00:29:44
layoffs push unemployment above 10% and ultimately lead to a stock market crashi
00:29:48
said the post was designed to prepare investors for potential uh left tailed risks as AI makes the economy
00:29:54
increasingly weird stressing that it's a scenario not a prediction even so the
00:29:59
S&P drops up 1% on Monday, though some of it was over concerns about tariffs.
00:30:04
But companies specifically named in the memo included Uber, Door Dash, American Express, IBM, all saw steep declines.
00:30:10
Um, it was an interesting memo, a thought, it was a thought experience, and the markets were already rattled by
00:30:16
Blue Owl Capital, a major private credit lender, announced its halting of quarterly redemption for one of its
00:30:21
funds and selling uh $1.4 billion in loan ads as the company's stock fell. We'll get to that in a second. And I'll
00:30:27
talk a little bit about more but stick with the first the first with with the Catrini and um and the Nvidia earns.
00:30:35
>> Well, I'll talk about Nvidia before I talk about Catrini. Revenue uh 68
00:30:40
billion versus 66 expected up 73% yearonear up 20% quarteron quarter. Non-GAAP earnings buck 62 versus A$153
00:30:51
up 82% year-on-year. Data center revenue 62 billion up 75% yearon year. The gross
00:30:58
margins 75%. >> Yeah, >> their fiscal 2026 revenues >> margins were crazy.
00:31:04
>> 216 billion up 65%. I think that's that may be more revenue than like every streaming media company
00:31:12
and movie studio combined. Yeah. Since the launch of Chat GBT, Nvidia has grown its data center business roughly 13fold.
00:31:20
And this quarter marked the best revenue growth rate of the entire fiscal year. So, it's revenue growth on the law of
00:31:25
big numbers. It seems to be more like network effects. It keeps getting better at scaling. Q4 73% year-on-year growth.
00:31:33
Beat Q3 at 62, Q2 at 56, and Q1. As they get bigger, they're growing faster.
00:31:39
They're literally defying, you know, gravity. Uh, notably they're leaving out China from its future
00:31:47
guidance. According to the CFO, while small amounts of H200 products for China based customers were approved by the US
00:31:52
government, we have yet to generate any revenue, and we do not know whether any imports will be allowed into China.
00:31:57
China was previously 20 almost a quarter of Nvidia's data center revenue, but
00:32:02
that's now gone. It doesn't seem to have hurt them. And the thing is, it's still
00:32:06
not expensive. It trades at roughly 24 times forward earnings, which is only slightly higher than the S&P. So you
00:32:12
have a company that's the most do arguably the most dominant company in history at at that moment is trading
00:32:18
what the S&P is trading at and because of the fears around AI and maybe because
00:32:24
of the stock acceleration it's only up it's basically flat it's up 4% this year
00:32:28
>> that >> and then you have all these companies announcing they're spending 2/3 or 3/4
00:32:34
of a trillion dollars on capex this year and most of it's or a lot of it is going
00:32:39
to Nvidia Alphabet is flat Amazon's down 7% year-to date. Meta is flat. Microsoft
00:32:45
is down 15% year to date. But big tech is getting punished uh for spending money and Nvidia is
00:32:53
getting punished uh for collecting it or Nvidia's on the right side of that capex. So, one of those one of those
00:33:01
must be wrong. Either these companies are making good investments um or I guess maybe the thesis is they're
00:33:06
overspending and it'll slow down. >> Yeah. >> Should we talk about Catrini? Yeah,
00:33:10
Catrini was interesting. I I you know, there was the other one a couple weeks ago that was another thing like
00:33:14
everything's going to change. That one Schumer, Matt Schumer, whatever his name
00:33:18
is. Um there's been a couple of these that have actually had real impact um as
00:33:23
they've been written. So because they're thought experiments in many ways, um but
00:33:28
they're interesting, but go ahead, Satrini. >> Well, essentially, I would describe it
00:33:32
as an A+ creative writing project from a super bright high school student. And it
00:33:38
is really it's written in the past tense. It says, "Okay, this is how we
00:33:41
hit this massive recession and the market lost a third of its value." And I
00:33:45
think it's a really interesting thought experiment. What what they're essentially saying is that AI is going
00:33:50
to create this negative feedback loop where it makes white collar workers so much more productive so quickly that
00:33:56
companies can do layoffs and hire fewer workers which results in an unemployment
00:34:01
spike less consumer spending and because companies fall under revenue pressure they're forced to cut costs and how do
00:34:08
they cut costs more AI and it creates this downward doom loop. Now you could make the same argument for any
00:34:15
technology right at one point 90% of us working in agriculture. Now it's less
00:34:18
than 2%. But that happened over 200 years. These guys are saying this is going to happen over over two year uh
00:34:25
over 24 months. >> Yeah. >> And what's happened is it's really cut.
00:34:29
Obviously, we talked about last week it's gone after the SAS companies, the software companies who they believe
00:34:34
you'll be able to replace uh Adobe, Figma or Salesforce just with thoughtful
00:34:39
internal prompts. >> And they it's really well written and it's got great branding. They coined the
00:34:45
term ghost GDP and that is economic output can grow while the benefits of that growth never actually reach most
00:34:51
people. And then the other the surprising the other surprising victims here and this will uh come back to my
00:35:00
prediction is a lot of publicly traded PE or private credit companies whether it's Apollo or TPG or Blackstone have
00:35:08
been their stocks are down 20 30% because they own a lot of software companies and there's a fear that as
00:35:16
private credit lenders basically they act like banks to companies who are non-traditional borrowers
00:35:22
that a lot of those companies might not be able to make good on the money they borrowed.
00:35:26
>> Let me just throw in some stats for the this is you're talking about Blue Owl,
00:35:30
which is a major private credit lender. The company stock fell 10% on the news last week because of the these these
00:35:35
sell-offs. Shares are at a 52- week low. The selloff did then rippled across the
00:35:40
whole private credit sector, which probably wasn't fair. Apollo, Aries, Blackstone, and others sliding. Blue Owl
00:35:45
said it is not halting investor liquidity. It's accelerating the return of capital. I love how they do that. Um,
00:35:52
Mohamad and it's uh El Aryan, former CEO of Kimco, suggested this could be a
00:35:57
canary in a coal mine moment, comparing it to the early warning signs for the 20
00:36:01
2008 financial crisis. Um, so there this is all linked together. This this idea of worries worry for all of these these
00:36:10
things, especially private credit lenders. Um, some are not as concerned, some are more concerned. Um it it we've
00:36:17
got a lot of letters from people saying what should they be concerned of and what's going on here but they are defin
00:36:22
as you're noting they're linked correct all this is linked to this spending this
00:36:26
massive spending by the tech companies >> the way I would try and describe the
00:36:30
dynamic here and to understand if you're at risk and where you want to think
00:36:33
about investing your own human capital your own financial capital is the following my mom used to run the
00:36:40
secretarial poll at Southwestern University uh school of law in downtown Los Angeles where I actually worked in
00:36:46
the mail room in high school. And she oversaw 20 secretaries who would write up the exams and the the legal research
00:36:52
of all the professors. That's gone. Word processing has taken that away. At the same time, my mom then
00:37:00
became an executive assistant because she has good EQ and she's smart and reliable and can write well. If you look
00:37:06
at truckers, the AI will be a substitute for truckers. Truck drivers via autonomous
00:37:14
are in real trouble. At the same time, accountants, you're going to see a lot
00:37:20
of their wrote accounting work go away, but they there are now more accountants than ever because they move upstream
00:37:27
into things like tax, wealth planning, and estate planning. >> So the question is,
00:37:31
>> which presumably AI eventually be able to help you with that. I don't have to.
00:37:35
I call my accountant my amazing all the time for little and big things, right? So presumably at someday I won't be
00:37:42
talking to anybody but >> yeah I don't >> seem very artisal on my part. It seems
00:37:47
like a lot of work by Caros. It's like pumping gas. I kind of like >> that's the right example. I use a lot of
00:37:52
lawyers >> right. >> I used to send every agreement I did you know advertising contract whatever it
00:37:59
was a employment contract I sent to our lawyers. They charge me a,000$2,000 $3,000 to have an associate review it.
00:38:06
Now I said to now I say to our chief growth officer, no use AI, review it and you do it. I trust you more than with AI
00:38:13
you're smart as a as a low-level lawyer. At the same time, I'm spending dramatically more on a very talented
00:38:22
lawyer at a firm that's actually called Citroen, uh, on this incredibly smart
00:38:28
woman named Lucy Lee who figures out everything from immigration to tax strategies to my estate plan because
00:38:35
that [ __ ] is complicated >> because you want her to be using AI for on your behalf, right? because
00:38:40
presumably she's also >> Yeah. But she can call me and say, "Scott, have you thought about turning
00:38:45
this company into an escore?" So you so you can in 5 years qualify for 1202.
00:38:51
She's incredibly strategic and smart and charges 1,500 bucks an hour. So the
00:38:57
bottom line is wherever you are in the world, do you have an opportunity to use AI to go upstream or is AI basically
00:39:02
going to take everything you're doing and you have nowhere to go upstream? But
00:39:07
the story of technology disruption is the same and I don't think it's any
00:39:12
different here in that is it will take out the boring row work and you either take that additional margin and go
00:39:19
upstream and invent new jobs new higher paying jobs or you get outsourced. The V
00:39:24
here or the correction might be more severe and America is bad at taking at at taking care of those people. Again,
00:39:30
we spend 02% on retraining. Denmark spends 2% of GDP on retaining. >> We don't do it well when we try to do
00:39:36
it. It doesn't quite work right. >> But look at what we're in the business.
00:39:40
I would have thought, so for example, I've been writing books and I thought in
00:39:44
my latest book, I'm starting my newest book. I thought, oh, AI is going to play
00:39:47
a huge role. It plays a role in research, in improving, and in fact, >> but the writing is still
00:39:55
>> Yeah, I agree. You know, >> I've been trying to make it this fetch
00:39:59
is not happening for me on AI and writing. It's not. It just isn't. >> But even look at our business. I would
00:40:03
have thought, okay, AI can produce the scripts. AI could edit >> edit and it doesn't. We we're hiring I
00:40:11
know you are at Profit Media. We're hiring more people. >> So I don't And we use AI. What we might
00:40:18
do, we might launch two podcasts instead of one because AI will help us produce more produce more data sets that we can
00:40:26
talk about. >> We got to we've got to figure out one of the things I was talking about this
00:40:29
morning. We got to figure out how to make fetch happen with it, right? And that's sort of a slower process as you
00:40:34
know. One of the things someone was like, oh, is it all going to be over? I'm like, imagine at 2000 I went to see
00:40:40
a Hollywood executive, big name, and when the thing crash happened, he goes, I'm glad that's over. And I'm like,
00:40:47
what? You have no idea what's coming, right? So, I think we're in the It
00:40:51
doesn't mean that all of them are going to survive, but several will. And it is
00:40:56
a significant change. And the question is, was it fair for Apollo to get dragged down in this blue owl thing?
00:41:02
Probably not. But that's how Wall Street reacts. So, you may see an enormous decline in Nvidia or any
00:41:09
of these tech companies, but are they really going away? Are they is this really going to decimate them? What it's
00:41:16
going to do is have every company refigure where this cost structure is. That's what it's doing. You're going, do
00:41:22
I need all these lower level lawyers? And that is a significant problem. And one of the things that it creates is if
00:41:30
we throw all these people out of work, they're going to be mad. And there's all
00:41:35
kinds of social issues there and political issues. And the question is, what do we do about it? And that's
00:41:40
that's hard because we've tried retraining and it hasn't listen, it hasn't always worked. Then we spent a
00:41:46
lot of money on retraining. It can get sucked up into political [ __ ] which is let's give everybody jobs. Then it
00:41:52
other times it works like during the depression. We have wonderful things that they did during um highspeed rail
00:41:59
up and down the west and eastern seabboard. There's a lot of infrastructure. But both Andrew Ross
00:42:05
Orin and and Josh Brown who I've had on property markets a lot said something
00:42:10
that really impacted the way I I process and how I approach markets and it's the
00:42:15
following and they're right. The optimists have beaten the [ __ ] out of the pessimists. So the key question you
00:42:23
got to ask yourself in something like this with respect to the markets is ask yourself
00:42:28
>> what could go right >> because there's a temptation by academics and thought leaders to
00:42:33
catastrophize because you sound too >> well you sound smarter when you catastrophize.
00:42:38
>> It sounds scarier and more interesting and you put some bar charts around you
00:42:41
talking about the zombie apocalypse and a downward spiral doom loop. Well okay the doom loop around moving from
00:42:48
agricultural to manufacturing to service. It wasn't a doom loop. who was a job creator. So, let's talk about what
00:42:53
could go right here. And this is from a guy named uh uh I think his name is Ze Mashowitz in open quote. Actually, the
00:43:02
scenario does involve massive job creation. Starting a new business, creating a new product or providing a
00:43:08
service is now a turnkey thing you can launch with an agent. All sorts of barriers and costs involved are gone.
00:43:14
Marketing costs drop almost to zero because their agent finds you. Logistic costs are almost zero. Transaction costs
00:43:20
are almost zero. Wages for anyone you hire are down and their productivity is way up. The cost of living is weighed
00:43:26
down, which creates more margin, more opportunities for new businesses. When I got out of business school in 1992,
00:43:33
there were two people that started a business and the other was my business partner. There was only two of us. Now,
00:43:40
I would bet a third of the grads from Stern are going to try and start some sort of AI company.
00:43:46
>> Same with the media people. Same thing with the media people. I started off
00:43:49
having to work for a big firm. I don't need to. Anyway, we have to move on. But
00:43:53
it's it's a really we should keep this discussion going because it's very
00:43:56
important because I I think you're right. It's easy to catastrophize and
00:43:59
you should be thinking about those things. It's just a question of what's
00:44:03
the other side of that? What's the where are the opportunities? Just like we were
00:44:06
talking about Netflix. Um we do have to go though. Um we're going to go to creek
00:44:10
break. When we come back, we have to talk about Pete Heg as threatening anthropic. We'll do that briefly. and
00:44:14
also of course the Epstein files. Support for this show comes from Rubric. A lot of companies are deploying AI
00:44:22
agents now. They're automating tasks, handling workflows, and making decisions. But here's the thing.
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00:45:12
That's rubber ik.com. rubric.com. Scott, we're back. Anthropic has rejected the Pentagon's demands for
00:45:24
unfettered access to claw as we thought they might. Defense Secretary Pete Hegath had given the company a deadline
00:45:30
to roll back certain safeguards or risk losing a $200 million Pentagon contract.
00:45:35
Anthropic CEO Daario Emodi said in a blog post that the quote threats do not change our position and that the company
00:45:41
quote cannot in good conscious aced to the request. Good for you Daario. Not to a [ __ ] On the other hand, the AI
00:45:50
company that's been all about safety is dropping his core safety pledge too. It
00:45:54
announced this week that it won't stop training uh potentially dangerous AI models if a competitor releases
00:46:00
something terrible or more advanced. They're doing other things, but they they say the move reflects the speed of
00:46:05
AI progress and the lack of federal regulation, not of political pressure. Thoughts?
00:46:11
>> The best performing organization in history is the US military at close
00:46:14
second is the US corporation. It's created more wealth in the last in the last 17 years, US corporations
00:46:22
have created more shareholder value than all of Europe um since probably the 60s. Well, one
00:46:30
company, Nvidia, is worth more than every publicly traded company in Germany and Spain. Now, why is that? One, we
00:46:36
have incredible research universities. We have a very risk aggressive culture. And we have the deepest pools of capital
00:46:42
in the world. We have $5 million per startup versus 1 million per startup in Europe. And why do we have such deep
00:46:50
pools of capital? Because when people invest here, they know the rules that that company will have to play by. And
00:46:57
when governments start interfering and picking winners and losers and saying, "Oh, the rules have changed, you're
00:47:02
going to have an absence or a flight of capital, which by the way has happened."
00:47:05
and this [ __ ] sclerotic blood sugar level socialism where the government is deciding who should get to acquire
00:47:13
Warner Brothers or that we should own a share a golden share in a steel company or which microchip companies the
00:47:19
government's going to invest in because a failed casino owner and talk show or
00:47:24
reality show host seems to believe he understands business better than the private sector. And we are already this
00:47:31
isn't this isn't a theoretical lesson in why I hate Trump reflecting my biases. This has already happened. They
00:47:39
point to year over the last year the S&P is up 14%. But it's not on a dollar
00:47:45
adjusted basis. The dollar has weakened so much it's more up mid single digits.
00:47:50
And by the way every single >> is up more as you noted. Every single major market from South Korea to Germany
00:48:00
to the Footsie to the Cosby in South Korea has massively outperformed the S&P. And one of the reasons is when you
00:48:10
now invest in a US company, there's unnecessary risk from the government if you for whatever reason the Pentagon
00:48:18
decides that we don't like you. And guess what? Andel and and Palanteer are working very closely with the government
00:48:28
to help them track down spies to maybe even track down immigrants using social media. A lot of people would say that's
00:48:34
a violation of privacy rights. A lot of people don't want to work for a weapons
00:48:38
company. Well, guess what? I love your saying. You don't like Chick Chick Chick
00:48:42
Chick Chick Chick Chick Chick Chick Chick Chick Chick Chick Chick Chick Chick Chick Chick Chick Chick Chick
00:48:42
Chick Chick-fil-A. You don't have to eat at Chick-fil-A. Maybe you don't work
00:48:44
there. Maybe you don't invest there. But guess what? They get to do what they
00:48:49
want. regulated competition >> and and you get to decide what business you're in or not in. Just as Anthropic
00:48:59
might decide that we are not comfortable working and providing data and computing
00:49:05
power to help surveil US citizens. They get to make that decision. >> That's right. And they get to make, by
00:49:11
the way, I think they'll do better. Like everyone's like, "Oh, they're going to
00:49:13
get like blacklisted." I'm like, "I think this is good for them."
00:49:16
>> It might be good branding. >> It might be good branding. It might be
00:49:18
good. by the way that they can do what they want and decide what they want to do on everything and then you the
00:49:24
consumer as we know decide what you want to do and one of the things that Hicks is always like he's either doing like
00:49:30
pull-ups or this nonsense another person never run a successful business just so
00:49:36
you know a lot of these these people in the Trump administration never run a successful business including the
00:49:41
president himself really really has driven so many businesses into the ground let Dario Modi do what he wants
00:49:47
and if but to like threaten him. >> It's called the private regulated competition and everyone has to play by
00:49:53
everyone gets to and has to play by the same rules. >> Elon will take it for you. Just go to
00:49:58
Elon. And by the way, the reason why it's a problem is because most of the people in the defense department think
00:50:03
Claude is better, right? That's the issue. They don't want to give their
00:50:06
better product to do what they want. This to me is ridiculous. And by the way, on the safety thing, you know, all
00:50:12
these people are going to do whatever it takes and they may be more safe anthropic, but they will do whatever it
00:50:17
takes to compete, right? Correct. >> Look, I I think the reality is, and this
00:50:22
is the danger, and this has been my one of my core thesis all along, is that we have fallen under the assumption that
00:50:29
every breakthrough in technology results in a small number of companies that are
00:50:32
able to ring fence distribution, capital, or IP and create trillions of dollars for their shareholders. I wonder
00:50:39
if AI is more like jet manufacturers or vaccines. And that is it will be an enormous innovation that'll change
00:50:47
society for the better. I'd like to think, but there aren't going to be a
00:50:50
small number of companies that capture a ton of value. That the real winners will
00:50:53
be stakeholders, but those stakeholders will be citizens. I think we have massively benefited from vaccines. Mona
00:51:00
is now 90 down 90%. There's no one company that's made hundreds of billions
00:51:03
of dollars from vaccines. If you added up all of the sh all of the profits and losses of all airlines and
00:51:09
Boeing and Amber and Airbus, it's barely even at break even. And yet skirting
00:51:14
along the atmosphere at 710 the speed of sound is in my view for my life the greatest greatest breakthrough in
00:51:19
history. Now I my general impression is people ask me all the time which LLM do you like? I have favorites but it only
00:51:26
lasts for two weeks. I think AI is putting AI out of business. And that is if you look at the data,
00:51:32
>> they're all getting to technical parody. It is so hard to maintain.
00:51:36
>> You know, Yan Lun said this exactly. He says they're all the same. They're
00:51:39
commodities. They're commodities. >> I I I use both Chad GPT and Claude. And
00:51:45
then for like 72 hours, I'll be like, "Oh, Chad GBT is better. It's less
00:51:48
politically correct." And then I go, "Wait, Claude is better at editing." And
00:51:53
then I go back and forth. And here's the thing. I think AI is reverse engineering
00:51:56
every other LLM. >> So, it's going to be about things like UI. It's going to be margin compression.
00:52:01
And I wonder if we're going to be the big winners. >> And these companies are are these
00:52:06
companies are going to spend a massive amount of time. >> We're getting a lot of free. We're
00:52:09
getting a lot of free%. >> All right. We do have to move on. We'll see what happens here. But Pete Hegth,
00:52:13
you're a [ __ ] Um, okay. This is a story I just want to say again. I knew this had legs. Dozens of of FBI witness
00:52:21
interview summaries appear to be missing from the DOJ's latest Epstein files
00:52:25
released. Some of those are missing interviews that are tied to a woman who accused Donald Trump of sexually
00:52:29
assaulting her decades ago. The DOJ said in a statement that the only materials we have been withheld were either
00:52:34
privileged or duplicates. This is nonsense. Democrats in the House Oversight Committee are now
00:52:38
investigating whether D purposely withheld materials. The New York Times followed this. So did NPR broke it and
00:52:45
and independent journalists broke it. New York Times has followed. This is really a bad cover up. What they've done
00:52:52
here is kept uh they should just put it out there or investigate Donald Trump. One of the others. He's certainly not
00:52:57
exonerated. By the way, other people are taking a lot of fallout from Epstein this week. This is not stopping folks
00:53:03
until it it's not over till it's over. Bill Gates apologized to the Gates
00:53:07
Foundation for his ties to Epste and also two affairs he had. He talked about them publicly finally. Um he kept
00:53:13
stressing they were older. Uh just old enough at least. Um, Larry Summers is resigning from Harvard over his Epstein
00:53:19
connection. The World Economic Forum president is also resigning. Peter Mandel, former UK ambassador to the US,
00:53:25
was arrested over allegations that he shared confidential government information. The former Norwegian, I
00:53:30
think, prime minister was hospitalized with suspicion of suicide over it. There's a Colombia professor who's who's
00:53:37
who prominent um neurologist, I think. Uh all these people are paying the price. Let's just say either related or
00:53:46
nearby. Um Trump obviously didn't say anything in the Epstein files and this
00:53:49
lengthy state of the union. I don't think he can ignore this. I think this is not going away. It is chasing him and
00:53:56
it will not happen until they do. As you say, they have to deal with the the perpetrators. And if he is one of them,
00:54:03
he he is he has the right to be investigated and he should be investigated. So should all of these
00:54:09
people. There's still going to be repercussions for everybody in this world. It's just there just is whether
00:54:14
your judgment was bad or whatever. Very quick thought. >> You know how I feel about this and it's
00:54:19
an unpopular take. I don't think the file should have been released. I think
00:54:23
the agency that aggregated the information should have reviewed it with the help of outside
00:54:29
uh litigation council and they should have communicated in one way to the general public and that is with grand
00:54:34
jury indictments and announcements. >> The administration wasn't going to do
00:54:37
that because their own president was >> and so what have they done? They've
00:54:41
created weapons of mass distraction. >> I don't know. I think there's
00:54:44
repercussions here. I I'm not I'm going to go through >> because you're focused on it there. The
00:54:49
the reality is the following. There appears to be enough evidence that the that warrant an investigation by and
00:54:55
again to your to to your point, unfortunately, we don't have the institutions to do this correctly. But
00:55:01
the way this should play out is the following. The attorney general should be announcing or the department of
00:55:07
justice that they are forming a special counsel because there are credible accusations of rape against several
00:55:14
people including the president of the United States and all this other [ __ ] Larry Sumner sending stupid
00:55:21
[ __ ] emails cuz he's pathetic to Jeffrey Epste Epstein. I think that's a
00:55:26
distraction. Cara >> again. I I know. I know you do. I don't I think it shows about judgment and we
00:55:32
can decide who we want to affiliate with. I think it's fine. >> Okay. So, and and if if I had AI go
00:55:37
through every one of your texts and emails, I couldn't reflect you as having
00:55:40
poor >> judgement. Not to the extent of what look Jeffrey Epstein's a unique figure
00:55:44
here. You know that. And he represents something bigger, which is >> did they commit crimes?
00:55:48
>> I get it. But >> by going after everyone that hasn't committed a crime because America loves
00:55:52
to shame people, we are losing focus on the people who raped children. >> Yeah. But, you know, all kinds of people
00:56:00
got in trouble because of shaming things and some people got in trouble because of of whatever. We've have a history of
00:56:06
this like a actors back in the 50s lost their jobs. Like, >> but that's fine. But that wasn't the FBI
00:56:12
investigating going on a fishing expedition for real crimes and then shaming. This is what's going to happen.
00:56:17
This is TMZ's wet dream. And unfortunately, we're not creating the incentive such that if you're a single
00:56:22
mother and your daughter ends up on an island that there's le there's there's
00:56:26
less chance she'll be raped. women. That is >> we're not protecting children and women.
00:56:30
>> Protecting women and children. You're absolutely right. I think it's hard.
00:56:34
>> Instead, every celebrity is just going to start using signal now. >> No. Uh I don't know. I don't know about
00:56:39
that. I don't know about that. I think it it is linked to the feeling that the
00:56:42
rich are have no impunity. You talk about and that's part of a trend. And it's okay to have these other things,
00:56:49
but they should do I agree. I've said special counsel over and over again, but
00:56:53
they were forced into it by Thomas Massie and Ro Connor because they wouldn't do their job and they they
00:56:59
didn't do their job because they're under the thumb of Donald Trump. And so
00:57:02
if they're not going to do their job, this is the only way. This is my >> I get it. But this is what's happened
00:57:06
unfortunately because our institutions no longer have any independence or credibility. They have released nude
00:57:13
photos of underage girls. They have doxed them, listed their names and their addresses without their permission and
00:57:21
redacted and confused information around the actual people who have evidence that
00:57:26
they're pedophiles. I mean, this just couldn't be. >> But they're not getting away with it. As
00:57:30
you can see, they got caught. >> I think See, I disagree. I think they're
00:57:32
mostly getting away with it. I think the wrong people are being prosecuted and shamed in and voted off the island, and
00:57:38
the criminals are loving it because there's a ton of confusion and distraction.
00:57:43
>> I think they're going to get the The one thing and you'll agree with this. I was
00:57:46
thinking about it the other day is if we asked the general public to name five billionaires.
00:57:51
>> Mhm. >> I think three of them would be the first one would probably be Elon Musk. The
00:57:56
second would probably be >> Jeff Bezos. >> See, I think it would be I think it
00:58:01
would be Bill Gates. He was sort of the original billionaire and then the third would be the president who calls himself
00:58:06
the billionaire president. >> Yeah. So three I bet I bet those three would be the three of the first five
00:58:12
that people said who are billionaires they're all in the [ __ ] Epstein files. So anyways the my point is you
00:58:19
can understand that the public has decided that once you get to a certain point of wealth you engage in a level of
00:58:27
depravity and feel that again I love this saying you're you're protected by
00:58:32
the law but not bound by it versus the rest of us are bound by the law but not protected by it. So you can see that
00:58:39
there is a real populist uprising here. But again, I I think the Department of Justice is there to serve justice.
00:58:47
>> It's not this Department of Justice. If there was any other Department of
00:58:50
Justice, you might expect a little bit. This is not This is the only >> You know what we should have, and I was
00:58:57
going to do this, but maybe we do it on pivot. I wanted to get P bar on to talk about the process of document
00:59:03
collection, investigation, collection, and then how that information is properly disseminated to the public and
00:59:09
in what format >> because that's what we're talking about here. >> You're right. You're right. You're
00:59:13
right. It's it gets pur but at the same time it's the only way given Pam Bondi
00:59:18
is the most another [ __ ] is >> but Cara the Dow is at $50,000. >> $50,000. She'll never live that one
00:59:24
down. Anyway, let's get take a quick break and we'll be back for predictions.
00:59:28
We're going to make it tight. Okay, Scott, let's hear a prediction. I I wrap
00:59:32
my predictions in what I'm doing personally in terms of my own finances and this is not financial ad advice. I'm
00:59:38
just telling what I'm doing. I think that just as SAS companies have been oversold
00:59:43
uh some of these PE or what they call business development or private credit companies have been oversold. So just
00:59:49
some of the ones again I'm going to create a basket because I'm about diversification at this at this point
00:59:54
but for example Apollo which has taken a huge hit is trading at 14 to 17 times earnings. So, a company with
01:00:00
double-digit earnings growth and double-digit uh assets under management growth, which is the capital they deploy
01:00:06
and how they make money. Uh the S&P is trading at a P of 20 and Apollo's
01:00:11
trading at 14 to 17 times. TPG is trading at about a one-/ird discount, but u to fair value estimates, it's got
01:00:20
unbelievable fundraising, and it's expanding their fee earnings. And again, the price reflects pessimism
01:00:27
uh more than growth trajectory. And by the way, there's absolutely no evidence
01:00:30
other than creative writing that any of these companies are experienc I work or co-invest with some of these companies.
01:00:37
They're [ __ ] juggernauts. They're raising more money than ever. >> But it's public feeling about it.
01:00:41
Investor nervous sentiment. Yeah. >> But I there's narrative in their numbers
01:00:46
and I believe over the medium and long term the numbers >> opportunity. It's an opportunity is what
01:00:50
it is. These companies have shed between 20 and 40% of their value in the last 12
01:00:55
months while continuing to grow their AUM and their fees. Blue Owl >> um it's got a 7 to8% dividend yield and
01:01:04
you know this because of market discounting private credit fears. So there's a growth versus valuation in my
01:01:10
view mismatch in that all of these companies are growing their assets under management and their fees which is what
01:01:16
essentially is their revenues and the sector has had multiple contraction or compression due to private credit
01:01:22
liquidity fears because of some of these creative writing projects and the in my
01:01:27
view the market pricing risks are more the market is pricing risk more aggressively than current earnings
01:01:32
trends justify. That's my >> that's my thesis. So, let me >> I'll just wrap it up. My oneline thesis
01:01:39
is the following. >> Compressed multiples and and durable fee growth plus strong fundraising. And I
01:01:47
know these companies, they're they're really wellrun. >> Yeah. >> In my view, all adds up to potential
01:01:52
relative undervaluation versus the broader market. >> All right. I like it. That's a it's the
01:01:56
same thing you were talking about last week. Okay. Look for opportunities. Just so you know, next week we'll we'll be
01:02:01
talking about Hillary Clinton's testifying for about Epste. By the way, Bill Clinton will testify on Friday.
01:02:05
Anyway, we'll we'll be talking about that, but I want to actually get our our
01:02:08
listeners to write us in. Jeff Bezos and Lauren San give their own prediction. Jeff Bezos and Lauren Sanchez have been
01:02:14
named honorary chairs of the year's MetGal. They essentially are paying for it and that's how that happened. The
01:02:19
dress code is fashion is art. Uh I want to know what you think Lauren and Jeff will dress up as. What art thing will
01:02:27
they dress up as? There's only two things I'm certain about their wardrobe.
01:02:33
>> Boobs. >> 100%. Whatever she's wearing. Both of them. >> She's not wearing an outfit. Her breasts
01:02:40
are and I'm here for it. I think she's I think she's a beautiful woman.
01:02:44
>> Yeah. >> And uh how about it? But let me be clear. >> Let's be fair. He's he's been improving
01:02:49
his boobs, too. But go ahead. >> Let's Let's be clear. There is Look, Vogue and Condast, they're smart
01:02:57
people. They invested in cable companies. >> Those assets, the magazines have
01:03:01
literally been just like a slow burn to irrelevance. >> Hurst has invested in all these
01:03:06
incredible data companies like Fitch and this airline data company. They've actually grown their revenues. Condast
01:03:12
has not. >> But the reporting I want to see >> Mhm. >> The only thing I know is that is that
01:03:19
Lauren's going to have her girls in the window and I'm here for it. And two,
01:03:23
somehow indirectly, there is an exchange of money here. >> There is. They're paying for it. Oh,
01:03:30
yeah. No, they're pay they they're they're like backing. They're paying for
01:03:33
it. >> Yeah. Anna Winter chucked them down. They turned them upside down, got their
01:03:36
wallet, put them on the cover. They're paying for the whole thing. >> Put them upside down and certain things
01:03:41
moved and certain things didn't. Um, >> that's correct. The money moved out of
01:03:44
their pockets and now they get the king and queen. Good for them. We would like,
01:03:48
you know, I feel good about this. >> I'm here for his midlife prices. I like
01:03:52
I can't help it. I like what they dress I want listeners right in and we'll read
01:03:55
them. What what what art will they dress up as? We need specifics. Sexy moment. >> I hope we get invited. I'd like to go to
01:04:02
that. Do you think they'll invite us? >> No, I don't think they will. All right.
01:04:05
We want to hear from you. Uh send us your questions about business tech or whatever's on your mind and whatever you
01:04:10
think Lauren and Jeff are going to wear. Go to nymag.com/pivot to submit a question for the show or
01:04:14
call 85551 pivot. Before we go, uh, as we said, Scott and I also, besides Minneapolis, uh, were both returning to
01:04:24
South by Southwest in Austin for three shows on the Vox uh, media podcast stage. It's a total South by Southwest
01:04:31
takeover because we are the king and queen. Speaking of which, we Scott will have his boobs out, just so you know, on
01:04:37
a platter in the windows. Um, uh, Scott, tell them what you're doing. First, I'll
01:04:42
be doing a live taping of PropG Markets with Edson on March 14th where every person over the age of 40 will come up
01:04:48
and go, "I love your pocket." Is Ed single? I have a daughter. Literally,
01:04:51
I'm so sick of people trying to set Ed up. >> Well, he's more handsome than you are.
01:04:55
>> He's very handsome. He's a nice kid, too. >> I mean, it's a low bar, but um and then
01:04:58
on March 15th at 10:00 a.m., I'll be doing a live taping of On with two special guests I'm really excited about.
01:05:04
Finally, we'll take the stage together on March 15th at 11:30 for a live taping
01:05:09
of Pivot. You can touch Scott's You can touch Scott's body parts. Scott Bear.
01:05:15
>> Scott Bear. Yeah. Anyway, last year's pivot taping at South by Southwest
01:05:18
featured whiskey shots, partial nudity, IPO predictions, and some smart questions from our audience. So, we will
01:05:25
we're going to double the [ __ ] down on it on that. And and you don't want to
01:05:29
miss it. Um uh Scott read. >> I love Southwest. Aren't you excited? >> Yeah, I'm excited. I'm excited to hang
01:05:34
out with you. I'm I'm excited. We're doing a lot of traveling together this
01:05:37
year. >> We are. Scott, please read who is presenting it. >> Part of the Vox Media podcast stage
01:05:42
presented by ODU. >> The stage also features sessions from Bnee Brown and Adam Grant. Everyone's
01:05:47
going to be there. We've got like a gang of fantastic people. Marcus, >> as long as there is there to tell me
01:05:52
that I'm okay. >> I don't know if she's going to be there, but nonetheless, learn more and get a
01:05:56
special discount on your innovation badge at voxmedia.comsxsw. That's voxmedia.comsxsw.
01:06:05
We will see you there. Okay, that's the show. Thanks for listening to Pivot and
01:06:10
be sure to like and subscribe to our YouTube channel. We'll be back next week.