A highlight from And the winner of the Slack-quisition is... Citibanks unicorn hunt. Nasdaq goes woke. Slacks $28B trophy.
Just unveiled over at forbes magazine. The twenty twenty class of thirty out thirty jackie into the first rule of the forbes thirty under thirty list. I doubt what is it. You gotta post lincoln humboldt. That is a mandatory requirement. Guess who stole forbes's thunder like right alexia who stole forbes's thunder spotify. Spotify just came out with their year in review list. It's called wrap twenty twenty of your most listen to songs and podcast. I just learned. Apparently i'm trying to become the fifth son in mumford sons. Jack you've got the beard for it. By the way i stocked us listening to our very own podcast for you know a casual three thousand minutes this year. I'm flattered nick that you stocked spotify moment in the list. Spotlight only lasted like fifteen minutes. Jack you're so right because then apple announced its top absolutist of two thousand twenty congrats disney plus zoom surprise a brat and then inc magazine revealed. Its top ten list of business books for twenty twenty. Everybody's publishing list right now. Because season and the publishers know that you love a good list. Jack lists dr clicks on a t shirt. Nick do you want to see the top five reasons why someone should come up with a top twenty twenty lists list. Well we already listed are three stories list. So why don't we just hit them right now. Let's daily spoke about the rain. Food is candy. They don't reflect. The views of her family is so unlit formation just so get double recommending any securities. It's not a research report or investment advice to offer or sale security by snacks digestible. business news video financial. Llc member favors less happy c. four. I story the slack. Was edition is finally official. If you own slack. This is a huge win for you. The on salesforce it. It's a huge loss. Free mark benef-. Ceo sales stores. He is a prolific texter. Gets back to everyone not us but now he matters now. He owns a messaging company emphasis on the ad here. There's gonna be a lot of adhere here on monday knackers. We told you this was happening. Salesforce buying slack but then three wild things happened in just the last forty eight hours involving those. Two companies salesforce reported their quarterly earnings. Black also reported their curly earnings interesting. And a twenty. Eight billion dollar price tag for the deal was announced. So now that the acquisitions finally official perfect time. Jack and i are thinking to look at what actually comes next because no one talks about what comes next seems as straightforward as buying us out. Its weaker yet. Does someone gets paid but salesforce has acquisition of slack has some fascinating payouts in particular that we want to focus on first we want to announce the winner of this deal. You ready okay. We got the list going here. We got jack where we got. Who's a winner slack snappers if you slack stocks fast it was at a disappointing twenty nine dollars a share just last week. That's where it was hanging out. It was just thirty percent this year. Even though many expected that slack was going to be a pandemic winner like up there with zoom zoom sibling. Everyone thought that that was the thing in may. It's not zoom sibling but now salesforce is going to buy. Every single share there is of slack. Paying with both cash and salesforce stock. So every sheriff slack is gonna receive twenty six dollars and seventy nine cents in cash but wait. There's more yet. No cash on delivery snappers. Plus you're gonna get seven point. Seven percent of share of salesforce and salesforce is two hundred and twenty dollars a share. That seventeen bucks. That's not nothing that seven point. Seven percent of us all right. So if you've been keeping track little whiteboard board over there. We can add this effort so slack. Stock owners are going to get a forty four dollars payout for a stock that was worth just twenty nine dollars. Last week was do a little more math for you. That's a fifty one percent gain for anybody who owns lack over the course of just one week. We gotta talk the into the yang here jack. The loser in this deal well by the process of elimination. It's easy yeah. We're gonna use that. It's going to be salesforce. it's test. I was the loser here now nick. Buying a boat is an awesome thing to do. But it's not awesome if you pay way too much for that boat. That's pretty awkward. And scenarios salesforce is basically doing a total of seventeen billion dollars to slacks millions of shareholders. Right and they're paying another eleven billion dollars a brand new minty sales for stock which dilutes the value of all the existing salesforce stock or of our ward board. Here doing a little more math and this deal results in an immediate fifteen percent loss for people who own salesforce stock so on paper slack shareholders. One this deal. You got a fifty one percent. Gain and sales for shareholders lost this. You've got a fifteen percent loss in life. Salesforce is hoping that this deal makes it a more valuable company in the long term this slack integration. Even if in the short term wall street doesn't agree. So jack what's the takeaway. Our buddies over in the slack. -sition salesforce looks desperate. Desperate to keep growing knackers. Total coincidence here but salesforce in slack both in third quarter earnings just yesterday when all this was going down despite the pandemic slacks revenue growth slowed last quarter all. And it's still not making a profit and wall street's not impressed. That salesforce is paying so much for an unprofitable slack. On the other side of the cloud server sales forces revenue growth would have slowed in two thousand twenty. If not for a bunch of acquisitions that made the company bigger. And honestly jack. I checked it out. It looks like salesforce is growth would have slowed more in twenty twenty one if not for this slack was yesterday mark. Benef- co salesforce refuses to let his company's growth slowdown. But that comes at a high big huge cost for our second story. Mattress matches mattress. Citibank is not just a back check exotic secretly as one of the most successful venture capital arms outside of silicon valley. Zachary's jack and i've been thinking this for a while so we're just gonna we're going to put this out there and say it. Corporate venture capital arms are the sweatpants of venture capital. Used to be boring now. Everyone's doing everyone's doing it. They're everywhere in fact corporate venture capital arms. Which are just the vcr company. They've invested in one quarter of all venture capital deals in the last year. For example kellogg the cereal company they have a venture capital arm. It's called eight thousand ninety four because that's when the company was founded it's clever and they've invested in purely elizabeth by the way fantastic renault. If there's not a local granola baked down the road then. I do get purely elizabeth delicious and crunch it. It feels localish now. They've also invested in beyond meat. Which is one of their big venture capital success stories. Let citibank the new york city wall street firm. They've also got some employees wearing all birds in patagonia vests. They got their own corporate venture capital arm. And they've been incredibly busy. Jack and i just noticed about ten investments a year to start ups giving them about twenty million dollars each which is one of the fastest paces of investment. You see out of any corporate venture capital arm and their track record is strong. They've invested in nine unicorn. Companies worth over a billion dollars. Six of whom have exited getting citibank. A nice lucrative. Financial return is a citibank. Snatches planning millions a seat. They're reaping multi-million dollar harvest here in bountiful harvest rolls up into the parent company citigroup and their quarterly earnings. So jacqueline i jumped in snack style. And we noticed there. There's a really interesting strategy to citibank's venture capital investments and we're gonna illustrate that strategy by imagining together that we're going to buy a standing desk online. Why not you know. Actually full disclosure here. Jack and i record this pod standing. We're always standing. I only record the pod. Those dating nick. I do everything else. Eat it because i'm not like dwight trying to prove a point hit twenty two hours of the day and then two hours were standing on his standing desk. You go to jet dot com which is now owned by warmer. And then you're gonna check out so you use honey the plug in honey to get a discount code seeking that standing desk then you wanted to split the standing desk because you and your roommate at both using it so you use squares cash apt to pay him back then once you get that cash and your cash app you're going to transfer it to your bank account using a service platt and then you might move that money to your betterment account so you can investigate but all those companies we just mentioned in that transaction chain they all were investments by cities venture capital and each of those represent juicy profitable returns because city invested early in all of those booming companies. And some of them. Ipo seven of them have been acquired. Ironically one of those companies they invested in square is now nearly as valuable as cd group itself. Just eight years after citigroup's investments. So jack what's the takeaway. Our buddies over at city doesn't matter what kind of investor you are invest in the things you know snacker cities venture capital arm didn't just invest in startups because they were just related to finance get this two-thirds of the companies that city has invested in they are vendors of citibank like docu sign for example. A company city has invested and is using on a daily basis so citibank works with companies before investing it uses the products and so new the products it dated basically before poppy investment question. This strategy works for corporate venture capital non corporate venture capital even regular old buddies like you and a regular investors. You can invest in what you know best which may be just what you've used the most for our third and final story. The nasdaq stock exchange wants way. More diversity on corporate boards asap so they're trying to force companies to do so or else they can pack up all their stock and go home pretty much the deal here now snacks. Here's the funny thing about nasdaq. It's a publicly traded company in the business of trading publicly traded stocks ticker symbol end dak. They're listed on their own nasdaq stock exchange. Jack ticker symbols should be a good call. they also manage. The famous nasdaq composite index which tracks the stock prices of a bunch of tech companies. But then as actress came in and said you know what companies are two white and their two males so they proposed a new rule to the sec. Here's where it gets creative. Ya gotta have at least one woman on your directors and one person who identifies as either underrepresented minority or lgbtq plus and if you don't you must explain why which is which is awkward but the nasdaq is actually gonna make you publicly. Explain wa very very strange letter to put on paper and then they're going to give you like one or two or three years to change your ways and comply with the new rule if you don't get delisted from the nasdaq and then you go to the new york stock exchange which is gonna feel awkward for the new york stock exchange and we wonder if the new york stock exchange is going to pass a similar rule. If this comes in act all right so jack. I'm just threw out some ideas here. You ready food critic pro hockey player. Pf tm board member. We're talking hashtag job goals because board members nick they can get paid like a few hundred thousand dollars per year to attend like ten meetings to fly these things you zoom two years ago. You could zoomed into these meetings. Here's the thing. Though about board of directors in america's corporations they are overwhelmingly white an overwhelmingly male so jackson. This next out of the top thirty five hundred publicly traded companies only twenty percent of the board members are female and only ten percent of those board members are non white so nasdaq than sites. Like two dozen other studies that are showing better diversity leading to better financial results on top of all that one specific example boston consulting group did a study last year showing that diverse management teams have nineteen percent better innovation than non diverse management. All right so add it all up. We know what you're thinking. So what's like the current situation with all of nasdaq's companies right now. According to nasdaq's were view which they announced yesterday with his new proposed rule. Three quarters of the company's listed on nasdaq would fail if the rule was in effect today. That's right if three quarters of the companies on nasdaq. Don't make this change. If this becomes a rule they would technically have to delist from nasdaq. Now it's up to the to decide if this rule is okay before it becomes reality so jack what's the takeaway for buddies over nasdaq. Big corporations have become defacto. Lawmakers in america snack pop on over to germany. Any board with over three people on it must have at least one woman. That's the law in california passed a similar law for companies based in california at the state level. But nationwide here in the us. Congress hasn't done anything like this but nasdaq has the power as the gatekeeper to stock markets. They're like a bouncer. Who can check your id before leading you into the stock market. And then if you don't get it on nasdaq stock market. The only other bar in town is the new york stock exchange. You're kinda stuck. Yeah it's pretty much to major stock mark. So if nasdaq things company should have more diversity on their boards. It can require that. Oh and it can make that happen. That's kind of the role of congress because it sounds like a legislative policy kind of thing but congress hasn't done anything all right so when we look at it a little bigger picture here. Apple's taken stance with online privacy amazon's taken some stands with sustainability and now nasdaq is taken stance with diversity. We're seeing companies. That are big enough to act as gatekeepers. They're setting defacto laws in america. Jack in your whip up the takeaways force over there. Salesforce just got the company at wanted to get. It came a big cost and wall street. Judge that decision negatively by fifteen percent for a second story citibank does banking and venture capital. They invest in what they know and what they use and it's working for for a and nasdaq is taking leadership. In the fight to diversify corporate america the corporate gatekeepers right in their own laws. Now time for our snack factor today. This one sent in by angela shannon lovely vancouver canada and bradley freeman from fantastic los angeles. When you're auditioning for a show nick. Someone might tell you before your audition breakaway. Yeah we've all heard break a leg break like you've been saying this for years and it's it's disconcerting it's awkward but you say there's a reason though they are hoping that you end up getting in the cast let it sink in. It took us a minute of a cast. One word meanings. That's called a homonym perfect. You're heading it's like the takeaway snack fantastic smackers. You guys look fantastic today jack. I love the schambori designated asked about his age. Why did you had your snacks daily. You can i'll see you tomorrow. Can't wait you know and before. Go snappers big. Happy birthday to julia. Augusta nucci over and wrong and happy birthday to back to your asimov in tashkent. Who's becca stanton. Alex ellison and shreveport louisiana and corey ireland in indiana pennsylvania and happy birthday to meredith hair in atlanta. Jared san diego and clear higgins and bend oregon and a poor the ati poly in hyderabad india and congrats to david. Molly just had their anniversary intervene. California and congrats to michael calman and erica diddy combs who just