21 Burst results for "Matt Levine"
"matt levine" Discussed on This Week In Google
"He would have the right to make the decisions even though he's going to make them really badly because he's rejecting all this prior and knowledge. So I don't know. And then I don't know. I want new Twitter. I want all the good people and all the good money to flee immediately and go start something new and better and leave them to this. His floundering thing. And I want that to happen as soon as possible, except I am also really intrigued and back to the corporate law thing. I want to understand this dynamic better because I want to understand how likely it is and on what time scale that this transaction actually closes and what will and let's get the popcorn because I don't know if it's quite as much of a slam dunk as it's being reported. But I don't have the knowledge to wait that out. The time well I was going to ask Kathy that the time frame I've seen quoted is 6 months. I think that was The New York Times. Yes. Do you think why wouldn't it close? He doesn't own any competing social networks. I want to understand that a little bit better. Oh, and Glenn may actually have some answers. Well, I don't know. I have things I can make up. We don't need your hot take here. So let me give you a cooler take is I imagine many people listening to this and on this panel read Matt Levine, who is at Bloomberg, who has a great free newsletter. And he's great because he does all the hard work for you, right? And when you pick apart the deal and also I've been following people on Twitter who have picked apart the deals term and what the agreement was that was signed. And mosque is both highly leveraged and not so much, but I see a scenario in which if Tesla shareholders well, a, there's a weird thing, which is the major shareholders of Tesla. If you look at the ten biggest ones, there is a strong overlap with the top ten shareholders of Twitter. It includes fidelity and Blackstone and Vanguard, most of which they're holding this in mutual funds and index funds and so forth. But still, it's kind of weird that the two companies share so many major shareholders and that the board clearly solicited their opinion before they went ahead. So these major shareholders who then now own stakes in Tesla that drop the significant amount because the market as a whole responded so negatively. So one thing that could happen is that Tesla could keep getting hit, they could have some they've been doing incredibly well. We saw the earnings just was this week. They've done incredibly well. They've executed extremely well. There's lots of complaints about the cars that get circulation. But if they have a bad quarter in the next two quarters or the stock continues to fall because people don't have the trust in it and suddenly he's already got personal guarantees against chunks of his Tesla stock. He'd have to exercise options, the banks could require hydropower margins. He's putting up 20 something $1 billion of his quote unquote own money like cash, but he may syndicate some of that. There's some big question about where that cash is. Where does that come from? Yeah. And so he's guaranteed the way the deal was signed because there's no due diligence. So it's very few conditions apparently under which he can back out without having to pay that, was it about a $1 billion right? So I've got Matt Levine's column here. And by the way, his lead is, I guess it's worth saying, Elon Musk does not own Twitter. He did not buy Twitter. He did sign an agreement to buy Twitter. That's a big step, and he probably, he says, will own it in some amount of time, maybe 6 months. Here is the timeline that he talks about. And I think Levine probably knows better or as well as anybody. What's going to happen? He's been covering this so closely too because it's a great intersection. You have a company with reasonable value, although Twitter's valuation. We're talking a lot about a company worth under $50 billion or valued at that now, where there are multi $1 trillion companies in the world right now. And Twitter somehow manages because media people like us are so interested in it. And because we're going to spend a whole show talking about it. And there's companies that are, I can't do the math 400 times larger that probably get less attention. Microsoft is very boring compared to Twitter. Well, for instance, I guess at some point, we might spend a minute or two on Google's quarterly report, which came out yesterday. This weekend Google. And what are we talking about? Twitter occupies the imagination. So here's the Levine timeline. Twitter most notably Twitter shareholders will have to vote on the deal. Twitter will have to write a proxy statement explaining the deal run it by the SEC, send it to shareholders, give them some time to read it before voting, that alone, those things may take months. Then there are regulatory approvals that they have to get before closing the deal. When the deal closes, you'll have to have the money. You don't have to be able to write a check, right? Just because he's got those agreements, doesn't mean he has the money. Yeah, okay. And as Kathy, someone else come along at any point in this process. I think so. Yeah, absolutely. And I think they had why would anybody as siva says Twitter has been available for some time? Would you buy it right now? No. For the very reasons we're talking about. I don't think if I were a sensible institutional investor, well, I don't want to completely throw Twitter completely under us because I think there is value there. Yeah, but nobody has figured out how to control investment. Nobody's figured out how to make money on Twitter. But I think the people is the next oligarch billionaire who is bored and wants to go toe to toad with Elon Musk. I mean, easily see a play there. And there were tweets from Jeff Bezos..
"matt levine" Discussed on Techmeme Ride Home
"With another 5 joining forces to finalize the 12 and a half $1 billion margin loan. For many, the loan secured against Musk's Tesla shares was the easiest part of the transaction to get on board with, given Musk's wealth and that Tesla stock trades at a furious pace. More importantly, it was the $21 billion of equity that Musk promised to commit personally, that turned the tide and lead banks to scramble for a piece of the action. Everyone did the careful analysis around it, but at the end of the day, it's the equity check. There's never been an equity check like this, one person involved in the sale negotiation said. The board's concerns around financing were allayed and the shareholders decided that it was in their best interest to advocate for this transaction, said a person with direct knowledge of the matter. Several large shareholders called members of Twitter's board on Friday and Saturday to press directors to take Musk's offer seriously, said people briefed on the conversations, although Twitter's share price hit an all time peak of almost $80 during the pandemic as consumers spent more hours on the platform. Many big investors had acquired the stock when it was trading at about $20 a share. On Sunday Musk communicated directly with Twitter's chair Bret Taylor, allowing them to set the tone and guidelines to reach an amicable agreement with protections and guarantees in place to safeguard shareholders. And quoting from Casey Newton one more time. As Matt Levine noted today, once Musk made his offer the whole thing proceeded fairly normally as a negotiating tactic, the board put in place a poison pill to prevent Musk from acquiring any more of the company, that forced Musk to prove that he actually had the financing to get the deal done. He did so, and the board considered its options. Ultimately, the 38% premium that Musk offered over its current stock price struck members as the best deal they could likely get. In the end, it was just business. Twitter has long been an underperformer and former executives I spoke with today were relieved that the company now had a real chance to make radical change. As a private company beholden only to the interests of one man, Twitter may be able to transform itself in ways that it never could while it had to report quarterly earnings. The $44 billion question, though, is transform into what end quote. Fidelity will now let retirement savers put Bitcoin into their 401k accounts, starting later this year. It's the first major retirement plan provider to do this. Quoting The Wall Street Journal. Employees won't be able to start adding cryptocurrencies to their nest eggs ran away, but later this year, the 23,000 companies that use fidelity to administer their retirement plans will have the option to put Bitcoin on the menu. The endorsement of the nation's largest retirement plan provider suggests crypto investing is moving further into the mainstream, but it remains to be seen whether employers will embrace it for their workers. Fidelity's move comes a month after the Labor Department express concerns about including cryptocurrencies and retirement plans. It is also an uneasy time for the stock market with the S&P 500 down almost 10% this year, in part.
"matt levine" Discussed on Bloomberg Radio New York
"Buy the whole company But yeah they have a poison pill in theory that probably will prevent him from doing a tender offer to buy the whole company although at this point people are kind of wondering if there are ways for him to just sort of blow everything up and get around the pill But the most likely outcome here is that he and the board sit down and the board has some tools They have the poison pill but he has some tools to write He has financing lined up He's offered them a premium price I think what it will come down to is what Twitter's big shareholders think And they can talk they can communicate with the board and with Musk and say what they think And I think if a large majority of shareholders are very in favor of this offer and if Twitter can't find a better offer than I think ultimately the board will probably cave And I think if the opposite is true then the board won't cave and must will go away Vanguard owns 10.3% so far it's a larger shareholder than Musk will Vanguard be okay with this I really have no idea I think that in hostile takeover situations you're job as the offerer and your job as the board is to go to valley forge and sit down at the Vanguard and present the financial case that your offer is better or that declining the offer is better and I don't know what they're going to think It's a strange position for them to be in as a sort of largely index provider to sort of decide what the value of this stock is But that's how hostile takeovers work And I think you're going to be pitching other more value driven investors And you're going to be pitching ISS the big proxy advisers who are going to formulate their own view on whether this is a good deal and whose view is going to have some weight with shareholders Matt Levine very do subscribe to his money stuff column Also if you have thoughts and opinions we'd love to hear them at Bonnie Quinn on Twitter or email VQ at Bloomberg .NET Next we're in Hong Kong with shuli.
"matt levine" Discussed on Techmeme Ride Home
"Of signs of a mixed reality headset in the code of the next version of iOS meta tried and failed to design its own chip, China has decided to let some new games launch, and even if drone delivery is moving forward, is Amazon being left behind. Here's what you missed today in the world of tech. There is this guy who follows me around the Internet, tweeting at me, posting negative reviews on various podcast sites. Every time I do a story on the show about NFTs. Like literally every time he's upset because he believes NFTs are a fad and a scam. And he doesn't want to hear news about them at all. The one time I attempted to interact with him, I was like, that's like being mad at me in 2010 because you think social media is a fad in a scam. And so I should never do stories on Facebook or Twitter. The point I was trying to make was that maybe I don't like doing so many NFT stories, but my job is to tell you what the big tech stories of the day are, and if they are NFTs, then that's what it is. Sometimes, yes, I might decide to highlight some story more than another because I think it's bigger than other people think it is, but most times there are stories that demand to be discussed because they're the big news, whether I think they're silly or not. And so I talk about them because that's my job. Which is all my way of telling you that today my job is to tell you that Elon Musk has decided not to join Twitter's board of directors despite being offered a seat there in. This news was delivered this morning by Twitter CEO Agrawal, who tweeted, well, tweeted via screencap because even the CEO of Twitter can't get around the character limit yet. Quote, Elon Musk has decided not to join our board. Here's what I can share about what happened. The board and I had many discussions about Elon joining the board and with Elon directly. We were excited to collaborate and clear about the risks. We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders was the best path forward. The board offered him a seat. We announced on Tuesday that Elon would be appointed to the board contingent on a background check and formal acceptance. Elon's appointment to the board was to become officially effective for 9 April 9th. But Elon shared that same day that he will no longer be joining the board. I believe this is for the best. We have and will always value input from our shareholders, whether they are on our board or not. Elon is our biggest shareholder, and we will remain open to his input. There will be distractions ahead, but our goals and priorities remain unchanged. The decisions we make and how we execute is in our hands, no one else's. Let's tune out the noise and stay focused on the work and what we're building end quote. I think one of the key words there is fiduciary because again, I'm no Matt Levine, but from where I'm sitting, it sure does look like Elon Musk bought a bunch of Twitter stock because he wants to blow up Twitter. As it exists, currently, or at least change Twitter to some degree. In order to limit what he could do, it certainly seems to me like Twitter tried to bear hug him, bring him quite literally on board because that would mean he would have the fiduciary responsibility not to blow Twitter up. And that whole gambit seems to have failed. Because and this is again me just speculating, Elon sure does look like he wants to blow Twitter up to 1° or another over the weekend. Let's see, he tweeted that all Twitter blue subscribers quote should get an authentication check mark. End quote, and that the service should be ad free for a lower around $2 a month price. So undermining what seems to be Twitter's biggest new feature in years, biggest new product initiative lately. Also, he asked if Twitter should convert its San Francisco headquarters into, quote, a homeless shelter since no one shows up anyway. Obviously taking a swipe at the remote work culture that Twitter has been a pioneer of. And Elon asked, quote, is Twitter dying. Citing a list of the most followed accounts and pointing out that many of them quote tweet rarely and post very little content end quote. Does not seem like Elon enjoys Twitter as it exists right now. That line about there will be distractions ahead, sure seems to be prescient hinting at something additional coming at the very least, Elon doesn't like being told what to tweet, I think we can all agree and funny enough. Maybe it didn't occur to him that he would likely be further unable to tweet negative things about Twitter if he was on the board. And then there's this. Quoting Mike Isaac on Twitter. Worth noting, Elon's standstill agreement not to purchase more than 14.9% of Twitter's outstanding shares or perform a hostile takeover of the company was contingent upon his joining the board. Now all bets are off. We'll see what next week brings end quote. Quoting Alex stamos on Twitter. Having less than 15% and one seat might have been the worst position for.
"matt levine" Discussed on The Breakdown with NLW
"Thanks to coin telly for joining as a sponsor of the breakdown this week. All right, so to today's main discussion and our article that we'll be reading. As anyone who's been following the show will know, one of the main considerations, as people have been thinking about the geopolitical implications of these sanctions, isn't just whether they'll be effective in bringing Russia to heal with regard to the specific war in Ukraine. It's also about whether it will push not only Russia, but other nations around the world to reduce their dependence on the dollar as the world's reserve currency. The idea here, of course, is that if we can weaponize the U.S. dollar and the U.S. dollar is the currency the world runs on, does that make people fear what we might do to them later on? Well, for context on this discussion, let's turn to David Morris today who wrote bitcoiners were right. Weaponized finance just created a post dollar planet. A wave of sanctions hitting Russia, highlights the complex web of connections that make up contemporary global society and its ultimate fragility. Vladimir Putin's Russia is facing a wave of truly unprecedented financial sanctions in retaliation for its widely scorned invasion of Ukraine. The sanctions have suddenly revealed the massive power that lay dormant in the unified global banking system for decades. But it likely also marks the beginning of that powers end, and the dawn of something more fragmented. Russia's dependence on systems like swift bank messaging, correspondent banking, and Apple Pay is a product of the global dominance of a unified market capitalist status quo. The status quo represents the neoliberal end of history that was widely presumed to have arrived with the fall of the Soviet Union. But there may be no better sign of the end of the end of history than the weaponization of finance happening right now. The scope of sanctions hitting Russia over the last week has showcased the incredible web of nested cross border interdependencies that make up the fabric of essentially every contemporary society and their ultimate fragility. Some Russian banks have been disconnected from the swift messaging system crucial to international transfers. Shares in one of Russia's largest banks collapsed 95% on the London stock exchange. The ruble has declined by roughly 50% against the dollar in just a week. A body blow to the Russian economy that would have long-lasting effects even. If it is a short term dip, which it won't be. Trade restrictions are looking just as devastating. Taiwan has said it will halt semiconductor exports to Russia. Industry observers believe the Russian commercial air fleet made up largely of Boeing and Airbus planes is two to three weeks away from complete shutdown because of an embargo on parts. Apple Pay and other consumer payment services have been cut off for some customers, reportedly causing disruptions including slowdowns in Moscow subway system. The total impact reaches down into the very guts of Russian society. It was seemingly not much of an exaggeration then when France's finance minister promised on Tuesday March 1st that, quote, we are going to cause the collapse of the Russian economy. All of this should be considered in a longer historical context. Until recently, such opportunities for disruption simply didn't exist. Swift was not created until 1978, as recently as the middle of the 20th century, international banking still regularly involved shipping large amounts of gold around on boats. The most frankly insane element of the sanctions, though, is the freezing of the global foreign exchange reserves of Russia's Central Bank. This is possible because, as London school of economics visiting fellow us many mundane explained to the Financial Times, foreign exchange reserves are not held by central banks, but instead by other banks around the world. Quote securities and money never move. Everything is external. This is believed to have affected fully half of the reserve holdings of Russia's Central Bank, which recently totaled more than $630 billion. These sizable reserves, according to national public radio, were part of a long-term plan to make Russia sanction proof. The strongly suggests that Putin has made a massive geopolitical miscalculation about the nature of the global financial system. Russia has behaved as if trusted European and American central banks would continue honoring its reserves even after an invasion of Ukraine. This would have allowed Russia to continue propping up the value of the ruble, among other things for months, even in the face of sanctions. Russia has refused to recognize the sovereignty and property rights of Ukraine, so it has few legs to stand on while complaining about having its lunch money stolen. But the sanctions will also permanently undermine the widespread assumption that global banking is a merely neutral and rules based system. Adam twos writing in chart book argues that to do this reserves freeze to a fellow Central Bank involves breaking the assumption of sovereign equality and the common interest in upholding the rights to property. As Matt Levine points out with predictable brilliance at Bloomberg, the sanctions have driven home that the global banking system, like most monetary systems, amounts to quote a way to keep track of what society thinks you deserve. This is an excellent way to think about the yen for hard money that motivates many bitcoiners. While there are ways for nation states to restrict the movement of Bitcoin, such as enjoining its sales via exchanges, Bitcoin stored in an on chain wallet can not be seized or frozen by the kind of decrees that have cut Russia off at its knees. Bitcoin can be described as a digital bearer instrument and can be moved bought and held without third parties or intermediaries outside of its own network. This gives new resonance to characterizations of Bitcoin as digital gold. Gold has always been a particularly useful instrument during wartime and other disruptions, because its value is considered inherent to the object. Gold rose nearly 10% in February amid rumors of war. Bitcoin is far more mobile than gold, but also has some disadvantages. In particular, gold has no memory while the transaction history of each Bitcoin is preserved on the blockchain. That presents real potential problems for the trade and formerly dirty coins, which could wind up blacklisted by mainstream exchanges, even after they're no longer owned by a global pariah. Still, what we're seeing is a significant vindication of the underlying skepticism of traditional banking that drives many in crypto and particularly those committed to Bitcoin specifically. It is arguably the exclamation point after years of smaller examples of financial sanctions against groups ranging from sex workers to Canadian truckers. That doesn't mean bitcoiners are dancing in the streets, though, anymore that someone warning about the U.S. infrastructure deficit should celebrate when a bridge collapses. While Bitcoin is a useful object lesson and model for what a neutral global payment system could look like, it is unlikely that the near future will see huge states using Bitcoin or other cryptocurrencies to depart the banking status quo. Instead, there is considerable speculation among finance professionals that Russia could begin conducting trade using China's R&B and banking infrastructure. Though the dollar is currently surging as a safe haven, a Russian move to R&B could significantly accelerate the ongoing decline of the dollar's global dominance. That would be a major step towards the repolarization of a world we once thought of as geopolitically.
"matt levine" Discussed on The Tim Ferriss Show
"And he said, oh, hi, I'm James clear. And I said, what do you do? And he said, I'm an author. I'm writing a book right now. I said, what's it called? He said, it's called atomic habits. And I didn't say this at the time. I was like, that sounds like a dumb name. I don't know. Of course I didn't say that to him, but in my head, I'm like atomic habits. That sounds cheesy. But he explained it. He was a really nice guy. I like talking to him, but for those who don't know, I think atomic habits has now sold 5 or 6 million copies. It's probably the bestselling book of the last 5 years. Blockbuster. So yeah, Ryan also, I'll just speak to Ryan since I know Ryan quite well and I've known it for a very long time. He really walks the walk and makes every effort to walk the walk. So I have tremendous respect. For Ryan, also, because there's such congruency at the very least incredible effort put into congruency between the words and deeds, if that makes sense, because that is not always the case. You know who comes to mind for me also is Matt Levine. I have to guess Levine, I don't know if it's Levine, but Matt Levine of Bloomberg. I have no idea how he manages to put out the volume with a density of insight in humor that he does. He has some hilarious hilarious hilarious stuff. And he writes every day. He puts out a letter 5 days a week and they're long posts and every one of them is great. There's almost never a dud. He gave an interview last week where he talks about his process. And he said his process is like, he wakes up at 6 a.m. and panics until there's something written, which I think that's a great thing to admit that like writing is hard. It's not even for the people that make it look easy. It's almost always like a daily panic attack of like, oh shit, what am I going to do now? What am I going to write about now? The other observation I make about all these people, Matt Levine, James clear, Ryan holiday, all those people, is that their skill is very universal and their observations could be applied to other fields. If Ryan holiday wanted to become a writer of astronomy or like soccer games or like a medical writer, he would be one of the best medical writers. If James clear wanted to write about like early childhood education, he would be the best childhood education writer. They're just great observers of how the world works and great communicators of putting those observations onto paper. What's your Hall of Fame personal Hall of Fame? Just for you. Favorite books on investing finance behavioral finance, any of that kind of stuff. Decision making. One that's not that well known, but I wish was. And it's not a behavioral finance book per se, but it's a behavioral book, is a book by a guy named Dan Gardner who wrote a book called the science of fear. The title is basically self explanatory. And it's not a deep science book. I would say it's more of a pop science book, but I don't mean that in a derogatory way. It's very digestible. You can understand it. But that book really changed how I think about fear and just observing fear in a pretty profound way. I've read that several times. What else? I mean, obviously, the word from Jason's wife, so let's bookmark Jason's wife. How did it change how you think about early to fear? I think what that book really showed me and put into words in a way that really stuck with me is the difference between your slow thoughtful process of thinking about future risks and the oh shit like heat of the moment, how am I actually going to react in the book it's framed as head versus gut years later, Daniel kahneman, the great psychologist framed it a system one system two. I think that's really important. And particularly in investing where we've talked about in this podcast, it's so easy to sit back in your armchair and be like, oh, if the market fell 20%, I would do X Y and Z and then what it actually happens, you don't, you think something totally different. It's a very different experience. The difference between what you think and what you actually do can be ten miles apart, and that book really explains that quite well. Now how does that affect your, you said you've read it several times. How does that affect your planning or behavior? Hey, I think a big part of me of just taking this off the table for me that relieves a lot of pressure. I was like, I have no desire to become the world's greatest investor. And I respect people who do, but I'm not one of that. So if I can just compound my money passively for 50 years, I'm going to achieve every goal that I have and then some. So for me, the idea of, well, how can I take the greatest advantage over the next market crash? How can I maximize more portfolio? I'm just not playing that game. And once I become more introspective about my own personality about what I want and how I react, how I think, how I interpret stress, how prone I am to stress that kind of thing, it's like, once you become more introspective about yourself, I just took that pressure off my.
"matt levine" Discussed on Bitches on Comics
"Pious to know how best to execute that and never ever ever disappointed in the outcome. Yeah it's one of those books where you can just see a lot of synergy between the creative team which is always. I've been reading comics. My entire life as longtime listeners will know because i talk about it constantly basically league. I always think a whenever there's conflict between creators you get an even story you know and so whenever there's people are just kind of taking the baton you know and lake moving on and doing their own thing with the story. I think that it just brings a lot to the background of the book and comics might be one of the mediums. Where that's the most evident right. Yeah and i feel. I feel so fortunate. That when original matt levine was talking to different illustrators he thought of pious ngo said i think that the pious style is going to work perfectly with what you're trying to communicate in your writing and like i trust you like a lot of this process for me has been about trusting my team. Mateen has carried me. So are just because i work with such competent people that i can say. I trust you to know what you're doing. Which is my favorite way to work. I hate having to know how things are done. I love being able to just be like you have all the expertise. You have all the knowledge. I'm not gonna try to meddle in that. Yeah for sure. I think that things work out a lot better that way to you. It seems like in your novels as well. Even if it's like a sci fi novel which i think is maybe what the echo wife would fit into there still are a lot of horror themes on it and i re read in an interview. That bonilla was the first book that got released. I love nicholas. So i'm happy to talk about that. You know for like the rest of the interview. If that's definitely my horror route and then there was like the second book which was even scarier right where they were taken to the hotel but i was just curious kind of on the same level of how you got into comics. How did you get into horror. Was that something. That was a big thing for you. Or are there certain. Kinds of horror that you've gravitated towards or i've been thinking about this a lot because for a while i would have said that i wasn't that into her. And then i look back all my creative works for throughout my entire life. And i'm like oh yeah you are. That's also kind of may sneaky. Secret is that everything. I write that. The exception of the student universe is hard. everything. I read as far and the sales of marketing teams at my publishers. Are responsible for saying what sonera in the bookstore. A book is gonna go right where you go when you walk into the last of noble honor and try to find my books. That's not to. But when. I'm writing everything i'm writing is hard because life is so goddamn scary. The benicia thing. I love that book so much. It is the book that made my partner wanna learn how to read when they were a kid. They were so upset because they couldn't read the book with the vampire. Bunny on the cover. The dance having how to read and i also got to write a piece on the history of nikola or be an end dot com. They're sci-fi fantasy blog arrest and the history of that book is incredibly beautiful in sad. When i think..
"matt levine" Discussed on The Tech Guy
"Suspicious about the cable and the reason i am is because that's the one thing you did when you put the the mac and you disconnected that modern now. You've reconnected it. I think that cable and that would also explain why the external monitor only suffering this problem. Interesting tech podcast brought to you by quite literally by cash fly. We've been Brought to you by cachefly for more than a decade now. When i first started the podcast. Big challenge for me was. How do we get people Get the audio and then later video to people without slowdowns waiting crashes that kind of thing we tried all sorts of stuff. And then matt levine. Founder cachefly called me said leo. Let us help you. And we've been happy cachefly customers ever since cash has been around for a long time. They're what we call a content delivery network innovating since nineteen ninety nine. Fat cachefly was first any cast. Cdn back in two thousand and two. They have what they call their best hop technology which automatically finds the fastest route to and from the customer across their global network appoints at present so there over fifty servers all over the world. Which means that you're close to them because when you create content podcast or web website whatever you want to serve to customers it automatically caches on the server. That's nearest them. That's where they get it from at means it's faster up to five times faster than other cd and and they have been innovating in this space for more than almost twenty years. Now one of the things. I love about cachefly because they are there so many servers. They are the most reliable. Cdn in a hundred percent sa they never go down which means i never get a call at three in the morning saying hey. The servers are down..
"matt levine" Discussed on Odd Lots
"Me as well. Thank you guys. Thank scott. Well joe i. I enjoyed that conversation. It was nice to catch up with sam as always and i am very curious to see what he does with. Nine hundred million dollars One thing that struck me was his sort of vision for the ultimate end state of the exchange. Like this idea of centralizing. All your money in one place not just as not just for your investment so you're investing in stocks and crypto but also for payments. That was pretty intriguing. Yeah i thought that was really interesting. And i you know it really does speak to the scope of the ambition but again you know. Here's someone or here's an exchange that literally almost nobody had heard of a year ago and now it's one of the most powerful players and the entire world so it's like i like kinda skeptical like betting against it and wouldn't shock me if a bunch of americans had lake there you know. Sby etf -til tea and all that and Fbi us one day Based on the trajectory not like a really good episode just because like a lot of these crypto conversations like it was just nice to like sort of like strip away or get past some of the whole conversation about what this is all four which is again another but also just like how it really works and i think learning a little bit about just like this idea of like how crypto like collapse as a lot of this stuff like whether it's the clearinghouse and the exchange and the broker it's all sort of flattened into one and thinking about the implications. That was a very interesting to hear men. Sam sort of refund breath on these topics but also just weird to hear. Matt levine of all people refer to the financial industry is tried fi. Like i was not. I was not ready for that But that kinda shows how how far we've come The one other thing. I would say is i still think there's an open question around tether and we're certainly not done discussing it on on the podcast so we're going to have to ruin have to dig into that one a little bit more. I think yeah. I mean it's like it's interesting that i was surprised because just having followed Sam and his colleagues. Even last time. I got some answers to questions but now i have more questions. Yeah so another yeah. We'll collect all our questions and and get back to to the listeners. Shall we leave it there. Let's leave it there all right. This has been another episode of the lots podcast. I'm tracy alloway. You can follow me on twitter at tracy alloway and i'm joe weisenthal. You can follow me on twitter at the stalwart. Follow our guests on twitter sam bateman.
"matt levine" Discussed on Odd Lots
"Where like they sort of like make probably basically correct claims but one's in which they're not going to as he said like they don't feel comfortable elaborating maybe for like just sort of like you know ethical reasons. Maybe because like the truth is like a little bit messier than they'd like to say. But for reasons that i make these claims refused back them up. And that's like never good luck although i think it is not that like the. There's no relationship between the that reality that you're just like might be an unfair question. But i'd be interested in your answer like if if the worst of the conspiracy theories were true about tether like i don't know say it's investing it's investing in commercial paper but it's investing in like chinese commercial paper and rand commercial pretty. Yeah exactly and it all goes bottom up which which is a rumor that's out there of course And tether collapses what would that mean for. Bitcoin and the wider crypto space yet. So i'm jami keith. A fantastic version if that were covered goes to zero or germany. Try and take like what i think. The most proximal like vaguely How both both so many first althogh plausible version. So what if they to a third of the money that they had and put it in life to be tears commercial paper from china beach here for commercial paper and and then you know. There's there's a run on the bank. China as looks like for that that could have and ensured that life this beach. Your marshall paper like forty percents to folded on average or something and so you ended up with like a twelve percent loss of the treasury rate. You know the forty percent of thirty percents something like that like. Let's say that's where you ended up which of these like you know very negative but like not completely implausible. Come what happens. Then tethers are in some. Some mystical is worth eighty. Eight cents for it at least eight cents right like redeem it. Sort of beef radiate cents you know. What's the loss loss. Ten billion or something. One possibility obviously is like nothing happens. Right unless people try to redeem almost all assistance like they could keep processing. Even come out maybe comes for what if rougerie purdue. His doesn't safety eric on any plausible answer. Freight is just like weirdly. Things continue on as if that didn't happen on but also maybe there's a little bit of a run on tether on the the banking partners is to get nervous redeeming. It becomes very difficult. Maybe they don't give a dollar. The dollar for adoptions maybe the dimmed them stay say look at the world can only redeem one billion dollars per week total tether maximum wasser. Fifteen billion and. so there's like a race to redeem your tethers and most people are not getting built on those redemptions. Tethered crashes down. you know. Eighty five cents on the dollar in markets. There is a lot of people. Were stockpiling tyler. Have losses of fifteen percent. And then i think sort of like you know there's some regulatory crackdowns on stable points and these boost continue on as they were before except that like ten billion dollars total was lost between tucker holders on. Maybe the recover that eventually right like if he the other is effectively backed by the combined equity of phoenix and tether then like navy. That's a bike. Maybe it all ends up five okay..
"matt levine" Discussed on Odd Lots
"We see like real which admit inflows into other from a lot of places like nassif ones that lead to market maker selling in creating and sending a real billions of dollars to bank account you to create it and like you know have have relationships with other in the banks in and everything else involved like everything sort checks out in a in a messy way and then you consider gives to the question of like all right well. What's this is small. Probably get yield on the dollars. Are they doing that. I know you know like some commercial paper lights stuff and you know. I think it's like one of these things. Where like if you wanna try and argue whether tethers were like ninety nine cents or a dollar in any reasonable argument and like i don't want to get strong stance on that like i i. I certainly don't want like strongly. Are you against any any stance there. But i think that like when the argument gets like is it worth about a dollar or like about thirty cents like any dancers about a dollar and the reasons that is fundamentally basically backed by like about the right number a little more than the right number of like on dollar like assets just like a system which is like a little bit messy in every possible place so they made stretch for yield but like buying like slightly commercial paper where they might break the buck but go to like ninety nine rather that that's my like and so i say this without knowing like exactly what their commercial papers these like that. That's the twist on it which g serve inferring the details of that last piece based on like all the other interactions at we have with them putting it onto bitcoin. But that would just be sort of a strange move on their part because like they have like a good business putting it into commercial Got lots of profitable good businesses. They don't need to do that. Also is unclear why they would do that. Like like incredibly risky any other things like you get to know the people involved here. They're not like the the really really aren't scares like he's really not like income wage. Dylan's on your like they're selling the oil ally lately lie about everything and life. I'm pretty sure that like nothing. That's not at all serve like the attractions at that. People have with them to do once the cnbc interview. Yeah there is that the one with With the legal counsel. I think they backed themselves into a lot of positions..
"matt levine" Discussed on Odd Lots
"They can't buy leads us. Run out dollar spy and they might have another three hundred million dollars in their bank account or in other exchanges. That didn't help them by that offer. Anybody take a day to get the dollars over there. If there's new marching that that also makes it way harder for marketers. Fried deep liquidity is again like it's the capitol efficient for them to eat. Seventeen billion dollars of reserves of every plausible currency on every possible exchange. Right because in the us you have to in like us acuras. You need to put orders on every exchange put in crypto to do this. You need to like actually capitalized like your maximum order. Exactly and this is the flip side. This is a drawback today. The crypto system work. I served described the vehicle earlier of life one integrated product. And so you did so much efficiency out of like you know you just have your funds there and do anything you on the exchange and like they're no intermediaries. Everyone can do it. You've like there's no like stock loan business. Being completely dislike separate in a separate company is ever timescale from like the trades. He needs to be doing you. Get a ton of efficiency of this but the flipside is you don't have one central prime broker. That's capitalizing simultaneously all exchanges for you with the same. Topical separately capitalize each one which is super super expensive. Especially if they don't allow margin successively one issue that you run into which isn't an issue with overall crypto market like if you're looking like the blended average bitcoin race thought a huge deal but if you're looking at like blowouts of one particular venue that like okay short but like like your that like let's see she's average. Bitcoin races across all major changes. Do not worry too much about like yes. If there's like divergence generally wants to. Bitcoin i like you know. How much is that diverge it. You know it's better than it was three years ago. The markers are massively. That are licensed than they were three years ago on to. I think something you saw on this draw in may from like sixty to thirty k. It was like very very orderly At fifty percent drop in like a one day period but like there's laws liquid nations like there there weren't massive illiquid france markets remain liquid and in in wurley more or less impressive extent given the volatility contrast that with a year ago in march twenty. Twenty when stricter dropped from nine to four k. And like today period people freaking out there that like they're gonna be systematic failures in the industry and like you think about it wasn't like r. k. Goes people worried about it. Was two thousand eight it was a chain of liquidations of businesses started by a few in thoroughly people going around saying we have no idea. Who's underwater care like through the every. Watch the boston. Businesses.
"matt levine" Discussed on Odd Lots
"Yeah so i guess maybe on your last point we talk about changing the the march Promising we've talked about margin leverage we usually think of them is basically the same thing like one is just one divided by the other one and yes. There's like initial versus maintenance like how big position you're allowed to put on versus at what point your account actually starts getting liquidated by Serve those on. Nc young you have to post five percent margin now on all positions and least in inmate is much more that i would serve equivalent to saying twenty x leverage. You've thought process behind it. The first thing is that it's actually not that big of a change for the safe. Less than one percent of the volume was trading with leverage higher than that before. And the reason is that basically your Go up as your position sized goes up so if you want to put on a big position you need way way more the claudel anyway and you're able to really tiny positions with very high leverage answers served by definition not where moose volume or open interest or users were. Were coming from answers. It wasn't like a big part of the exchange it wasn't super relevant to to us or mussa or their experience. It's also not super economically useful. Frankly like when we talk about hedging something or having on spread or one of the many reasons that you might want to arjun trade if you get down to one percent clutter left. You can't really use that to hedge something. You'd be liquidated in like a print like ian like fifteen seconds. Markets could move enough that you're out of margin and so it serves doesn't make sense for any like long or even medium-term position that you're saying hold for any reason you sort of like almost definitely opening yourself up to serious liquidation risks if you get anywhere close out amounts of leverage and like most of the things i think frankly could just is like the more economically useful parts liking don't require high like super high leverage anyway and the last is frankly.
"matt levine" Discussed on Odd Lots
"System from scratch and you kinda went in design the system from scratch right like you started like a big exchange in a in a product universe. That is not really beholden to any traditional like rules or customs. And i'm wondering like are there places where you like like what we do here at janus reader what we do in the stock market has really dumb. Like if i were doing it. I do it differently. Were you actually went and did that at at fte x. Totally and. I do think the answer is really serve. You look at each place near like. Who's doing it right. You know sort of like the crypto dorm crack food strange dorm or like the traditional exchange. Sometimes it was wanted sometimes. It was the other suli some examples of places where i crypto highs. Like at least in argument for doing it right now. I personally think they've probably are one of these is moving funds around is obviously one of the first things that comes up with crypto but i at least just assumed it was easy to get your money wherever he wanted a before. It ever tried to do that but as soon as i. I tried to ever move money around. I realized how difficult was anyone who sent an insurance in leg. International wire transfers immediately regrets having to do it and then you look like ach and credit card payments they take months to finalise and so either these all these limits huge zaandam so many plots system. Because like there's two months of fraud race. They're just doing things like funding your account or what he would that even needs to find your account on traditional exchanges is like very messy and can take a while whereas entrepreneur like the goals to make. It is clean as possible when you're sending cryptocurrencies and that's obviously basically On of you know the the wire transfer timescale like even with with the emphasis is like anyone whether you're you've two hundred dollars. Surname were here. The world's second-biggest shift firm you can go to the website. Kyc info crete count directly with the exchange. And then there's like the deposit but and it has like as many options as possible for how you can find your account as usually get massively easier process and you know when when you serve incorrect. Do what you quickly realized that you never want. Npr hardest thing to do and like everything gets some stable. If you get away with it another thing. I'll bring up is the different nature of the products. So we think of what he's like. Niger seeing the or something like they're mostly matching outfits like they they serve batch bids and offers from a few institutions against each other. But they don't do anything else. The trade faucets right. There's like separate companies that do custody clearing anal. Kyc customer on boarding branding advertising mobile app website. Api all of.
"matt levine" Discussed on Odd Lots
"I'm joe weisenthal. So joe it's been I mean. I think it's been a kind of a tough couple weeks for crypto. We had the price of bitcoin. Go down below. Thirty thousand At one point. But it's shot up since. I think it's closer to forty thousand. But on the other hand we had some interesting developments around the sort of crypto ecosystem around the market structure aspect of crypto. Well it's interesting because we did get this sort of bear market. And i don't know if it's still in one because as you mentioned it's bounced back but unlike say you know the sell off in two thousand eighteen or at the end of two thousand seventeen. It doesn't feel like there's any slowdown at all in the pace of investment into this space like whereas at the end of twenty eight teams. Like all right. Well maybe this whole thing was a bubble or a fad. This time it feels like no one's thinking that is like full steam ahead on various business plans and so forth at least in these early months since the peak back April or may yes indeed and as a sign of that investment interest we just had the crypto exchange ft x. which we've talked about on the show before it completed i think it was a series b. fundraising of nine hundred million that valued the company at eighteen billion. So to your point i mean. The crypto ecosystem itself is clearly being valued by investors as a future investment eighteen billions. Pretty big right and of course We talked To the to the founder was not that long ago i think it was either maybe like march or april and it feels like his star. His significance within crypto has only probably gone up like ten x Since like literally like the last three or four months yeah. I think that's fair. So we're going to be talking to the fbi founder of sam bateman freed again on this episode. But we wanted to do it a little bit differently this time. We've also brought on a bloomberg columnist matt levin one of the best probably the best financial writer out there if we're being honest and he's going to join the conversation and we're just gonna talk about what. Ti has been doing and where it might go from here. Wait let's do it all right Sam and matt thank you so much for coming on the show. Yeah so nine. Hundred nine hundred million dollars is a lot of money would. Are you going to be doing with that. Yeah so it's I think we're we're looking good on the front don't need any warfare acquisitions to serve the based answer and you know i think especially as producers to bleed into the rest of the financial system. There's more and more points of overlap and potential.
Musk's Tesla says it invested $1.5 billion in bitcoin
"It was just about twenty three hours ago. That a tesla regulatory filing revealed that the company bought one and a half billion dollars in bitcoin and said that'd explained to accept bitcoin as payment in the future for cars since then. The price of bitcoin has soared setting a new high at around forty. Seven thousand. five hundred dollars. That's right forty. Seven thousand five hundred dollars even after the gains. We saw yesterday up by about another five point three percent today. We're also watching. The price of does coin shot higher after supportive tweets by elon. Musk rapper snoop dogg and kiss rocker. Gene simmons but android guests that. The biggie here is really elon. Musk matt levine. A columnist wrote a really interesting column. About how in the market these days it's not fundamentals that are driving things but proximity to elon. Musk and i thought that was pretty accurate. Given some of the swings we have seen recently oddly enough. He is not automatic right but oddly enough he is right in this case. Oh evan just proximity proximity
"matt levine" Discussed on Bloomberg Radio New York
"Emirates are musical anything in Dubai and I managed to any right alongside you said Tesler. Literally super charges Bitcoin. The $1.5 billion trade that went through the market night seems to be focused on the supply off Bitcoins use of relative to let's say, for example, Tessa and the MicroStrategy's CEO, says Bitcoin officer breaking $47,000 for the first time. This is the scarcest. Asset in the world. It's Bigfoot is digital gold. I mean, what really caught my eye. Here is what Matt Levine talks about. He talked about how evil must gets to pick the money. Now we saw that a bit with Gamestop and now with Bitcoin and basically no longer values things on the basis of cash flow, But you value them on the proximity that they have to along Must so that could be a better gig for an anthropologist is what he goes on to write. Corn is treated as a cash equivalent with volatility eight times often. Ultra long maturity bond. How does that make any sense where there is a limit to the amount of Bitcoins that can be produced 21 million Bitcoins and we will hit that limit. In about 20 years time. So it is a discussion about liquidity. Let's move it onto the market. The markets are questioning where we are with years where we are with equities. Can the rally endure? The old market is on fire. We've made up our pre virus hides. Now that's Brent's but on the wt, I can tell you where previous highs and read a sense says you can know. Potentially look, she had a target. For example, in 2022 of $80, that could be $100. Now she does say You're gonna get some compliance is she's coming in. The dollar is dying. 2/10 of 1% Day three of the decline Don't forget, people are cutting the short The market was very short going into the start of the year. Eyes what we had yesterday from Rabobank, But what you've got is a risk on in the other assets. And so the dollar declines C B A say stimulus equals a current account deficit. And that's dollar. Negative. Yeah, let's get to some of the other assets, including 10 year bonds. I mean, Yeah, Bones haven't had it this bad in a long while. The pain train may not be over the swamps since traders of pricing and more than 45% chance of yields, adjusted for swap spreads exceed 1.25% over 12 months. We have a $58 billion sail off three year bonds, 10 and 30 year follow after that, In terms of stocks futures again, we are just looking for a little direction here after the Astonishing rally that we've had over the last six training sessions, really just below the flat line as we try and get their heads around a potential great equity party that is beginning that takes shape but also brings with it its fair share off risks. Twitter is going to be on the earnings calendar in the coming hours. Yep. Let's get into the rest Those markets Nigeria's understanding by in Singapore, so Jules, everybody's a little bit nervous about this spike in the years. How's it playing out in the Asian session? Certainly that momentum he was saying in the oil market that you're touching on their manners is lifting the energy sector is the best performing here in Asia. And we do have Asian stocks higher for a third decision on back to records on the M S E. Asia Pacific Index, with most of the markets tracking higher, although a little bit off nerves coming through in the latter part of the trick day's trade, dedicate 2 to 5 certainly off Highs off the session that hangs in coming back after the lunch break and firmer by around half of 1%. We've been seeing weakness, though, in Australia's market today, even though we had a pretty good consumer confidence read for the month of January on then, of course, his momentum that you're seeing in Bitcoin that 47,000 level that was breached in early Asian trade, really just lifting any Stock in Asia that is even remotely linked to crypto currencies. We're looking at Monix, they're jumping the most since November. This is a company that owns the crypto currency exchange coin check. It. Shares have doubled since the beginning of the year. Just riding on the back off this crypto currency frenzy, Yusef Well, thanks for that. That's Juliette Sally there. Let's also taking on the first word headlines from around the world starting off with the World.
Gamestop, Reddit, and Robin Hood: How r/WallStreetBets gamed the stock of GameStop
"Is what is game. Stop so the game stop. I'm most familiar with is in this terrible strip mall in iowa city but as a place of physical place usually located in a mall of some kind strip mall or otherwise that you physically go to buy physical copies of video games and now as i think everyone is aware it is totally possible to buy video games online now right and what that means is that the physical businesses at malls have been in trouble for a minute and then the pandemic happened and that made things worse because people are staying home now. Game stop has been shorted pretty consistently for quite some time. Because a lot of people think it's going to fail for the reasons i just outlined every time someone says a stock has been shorted. I nod my head of Yes i have heard the explanation shorting stock means it is. It is a complicated thing. Where you you buy the stock and then you lend it to somebody and then they they hang onto it and then you buy it back and if the stock goes down the new win and yes i i do understand this no i don't i don't get i don't understand. Hope works so the t. l. d. r. explanation is that shorting stock is betting that it will go down and the mechanical way that you do. This is you. You locate somebody who owns a stock and this is usually an institutional investor because they tend to be pretty by hold. They don't do a ton of traits. And when you do this you are paying that holder fee in order to borrow okay and so what you do is you pay them the fee and you borrow their stock and then you sell it and then you wait for it to come down and you buy it back and you give it back to the original people and the difference between the top and the bottom is basically what you get minus your fee right. So yes i understand. I understand that yes i mean this is. Let me put this in a physical way because it might be easier okay. Let's say that. I borrow your iphone. Okay it's a brand new iphone. And i from you and i say i'll give this back to you in two weeks and during that time apple has just a fire sale on that specific kind of iphone. And so what i do is i. I sell your iphone at the original price. And then i go buy the cheaper iphone and give it back to you. Okay okay. I understand the difference between those things is my money. Got it right. So that's what they're doing but with stocks so everyone has been doing this two game. Stop because you know it's it's it must be failing business so there's a bunch of investors shorting the stock and i just want to. I wanna stop right there. Yeah i want to ask two questions threshold questions wine. Do we actually think. Game stop is a good business right like we're now completely untethered from that question on this thursday afternoon like we share. It has nothing to do with game. Stop as a business anymore. But i don't like all of us are bound by the virgins ethics policy. We cannot trade in stocks in companies. We cover we don't index funds. Which is its own. If you read matt levine's newsletter bloomberg comes with its own weird problems like that's basically what we were allowed to own broad mass market index funds. If you listen to show you know are always disclosing things. That's your disclosure for the day. But if i was to be sort of person who could buy stock. And i was like betting on the market. I'd clinton gain stop. I haven't heard that name in a while. I bet that sox going to go down. I shouldn't buy it just like i buy all my games. Digitally i'm getting a. Ps five like the only one who bought a digital edition. That's just who i am us. Only by two games a year. so it's not videos. Is it a good business. Lists like is there. Is there case games to get better. Yeah i mean there is a case. I don't know enough about the space to be able to tell you whether it's a good case but there is one and the cases that game stop also has an online way of selling games and it's been growing a lot and a couple of weeks ago. This guy who used to be the ceo of chewy. They're bored with two other people and so the the bull case the case that this is going to be a good stock is that these people are going to turn it around and they're going to create this wonderful online business for game stop and then you know they'll close. Maybe some of the mall stores in the turnaround will let game stop. Be good again.
WeWork: Unicorn Cowboy
"He's speaking here in January of last year at a conference of mayors at the time we work was worth more than twenty billion dollars an extraordinary amount of money for an eight year old company that had never made a profit and was in the business of renting out office space by the month but newman never really talked about. We work as a company that rented out office space. Here's I would he told the mayor's if you bring us in for ten locations we will create one hundred thousand jobs over the next ten years and it can go go bigger and bigger and we wanted just bring your jobs. We'll bring the place to live. We'll bring education and this is important will bring corporate America we will redesign their space build it deployer technology which is called we always and took okay longtime to create and then put our community where you do that for a city hall. I would love to see the whole this is the way newman talked about. We work and we work talked about itself not as a company that rented out office space but as something much bigger we kept opening more offices and more cities and kept losing money and investors kept giving the company more money at higher and higher valuations by the beginning of this year we work was worth almost fifty billion dollars because it wasn't just an office company it. It was a technology company that was going to figure out how to profit from offices and apartments schools in City Hall and basically everything we were like. We're going to be a universal. They don't know what the word is. Universal Place Company Matt Levine used to be an investment banker now he writes for Bloomberg opinion my favorite of his recent headlines it's not you. It's it's we anywhere. There is a place we were going to be taking money out of it. That's why they could raise money at forty seven billion dollars evaluation. They weren't like an office landlord company. They were this flakes everywhere all encompassing master of space at least that was the story we were told up until this summer until to put up finer point on it just after seven. Am Eastern time on August fourteenth we work was preparing to sell stock to the public for the first time they have an IPO and they published a document for prospective active investors. The document is called S. One Thursday really quite extraordinary turning point like everything was one way and then the as one hits and immediately everything is the opposite way in like shockingly rapid fashion that whole story that we were had used for years to raise more than ten billion million dollars from some of the richest most experienced tack investors in the world The story that made it the most highly valued startup in America back collapsed instantly instantly. How did we work raise so much money? How did it go so bad so quickly? What tell us about the way money works in the world today hello and welcome to plant money? I'm Jacob Goldstein. The story of we were long rise and almost instant fall largely goes back to one guy not Adam Newman not even anybody at we were. It's a guy named Masayoshi sun today on the show. We Work Masayoshi Sun.
Lyft Going Public: The Dual-Class Share Dilemma
"Lift the company is busy filing all kinds of papers. And as part of that they announced that they are planning to issue to kinds of common stock class. An Cosby Matt LeVine is a columnist at Bloomberg opinion off of my worst cost really. Yeah. Well, it's like the normal one. And then class b is the weird one the stall key by on your e-trade account class-a stock? It's your plain vanilla stock class b stock. Well, no difference really on the face of it usually worth the same price part of the same company, but one key difference class as talk has one vote per share and Cosby's talk has twenty per share in the case of lift one share of class as stock get you one vote and one share of class b stock gets you twenty votes twenty votes, and that is today's indicator twenty that is the number of votes as single share of lift class b stock will get you would get a B class stock founders in the case of lift cO, finders Logan green and John Zimmer and nobody else. So what is up with these class b shares? Why would the founder of a company do this? Used to be that way us hope sock was like you had to give up voting control your company, but that's not what he wants. He wants to keep control of his company, and it turns out because is willing to give him money, you know, for stock without demanding control of his company. And so he takes it takes so back in the day. You took your company public you sold shares to the public, and there was this tradeoff on the one hand, you all this money on the other hand, you give up some control of your company. So if the shareholders did not like what you were doing they could vote you out you could be out on your ear. Also, if you wanted to do something fancy with the stock they could stop you so CEO's, especially Texas started using these class b shares to create stalk with the super voting par giving themselves a ton of votes. So that they can maintain control of the company they get all the money, and they keep all the power a win win. And then the situation the power never trickles down to the people. If the finders sell their class, b shares the buyer of those shares. Does not get that twenty vote deal. The shares usually convert to class eight years a crummy single vote. So why would investors put up with this? I asked Matt living this question. And he said there were a couple of main reasons the first is that these companies were just so hot people wanted a piece of them so badly and investor said, okay, and they surrendered their usual rights. But there was another reason a lot of investors started to see it as a plus when Facebook went public CEO, Mark Zuckerberg, a tiny group of insiders got a ton of these class b superhero shares which essentially meant the Mark Zuckerberg had complete control of Facebook. And when the company went public the Wimpy class A-Shares traded really really, well, it was super popular. But Mark zuckerberg's outsized power. Also, ended up paying off for investors because good example of the successes. Mark Zuckerberg did a lot of move that were kind of look like weird corporate. Governance like, you just went and bought, you know, whatever it's like little oversight sort of felt like a sort of a company that was not like run by best principles of corporate, governance, necessarily, and it turned out to be wildly successful for shareholders. And they put loads of money, right? Because he actually was good at it says a lot of investors, especially investors in tech companies with these celebrity genius, inventor of CEO types, actually started to really like the fact that shares of stock came with no voting muscle became kind of like a selling point like don't worry. No, slutty small-minded investors going to step in and Swart, you know, the geniuses vision. Which is this is actually as you. It's protecting your investment in no way. Because like what you're really signing up for is Mark Zuckerberg and the only way to make sure that you're getting works to all the votes. Dougal Lincoln groupon. They old it. But when Snapchat went public Matt says that was kind of the peak for class b shares not. As a even weirder version, where public shareholders have no votes at all. And only the have any votes. Hey, why not let the suckers by the shares and not get any voting rights Snapchat? This moment, though, is when the markets kind of struck back at the whole class, b shares idea the keepers of some of these big indexes like the S and P five hundred decided enough was enough said, we're not going to list companies that have so called dual class shares and the excluded Snapchat. Now, this was a big deal because of index funds. Now, those are funds that are pegged to an entire index. For instance, the S and P five hundred so with the S and P five hundred goes up the index fund goes up, and if you have money in a 4._0._1._K a lot of that is probably in index funds. We are talking trillions of dollars and these index funds will not invest in your company if it's not listed on the index. So getting excluded from an index like the S and P five hundred means that you are. Leaving a lot of money on the table. But the index is like, okay, listen, we turn to blind eye to Facebook and Google, but Snapchat, you've gone too, far you want the money, you cannot keep all the power to. This is a breakdown of the whole system you wanna take people's money. You have to answer to them. And we're Matt LeVine heard this. He thought will is it jewel class. Shares are over the time has come to an end year ago. I would have said well, the fact that the indexes are down as early about fine for the continuing viability this, but no turns out. Along comes lift at the sides, no index funds for us. But so be it. This probably means that lift won't ever make it onto the S and P five hundred index, but they did this. Anyway, they said we want control so much the will willing to give up this a lot of money a lot of money the jewel share model class. A and class b shares not dead yet, extremely popular and becoming more popular among tech extremely unpopular and becoming more popular among big public investor's attention. That's why the indexes are dying because the public because behind more popular public investors like every comes to market once I do class stock, and it's terrible. And we hate it. And we got to do something about it was like one or two when it was like Facebook. It's like fine whatever, but every company has its come frustrating for investors. If your stock is hot enough, and if you are enough of a cult of genius techie type, you might just be able to have your. Go public and control it too. And in fact, there has been such crazy demand for shares of lift even though they're not available yet making money, and the companies actually losing money inspect it doesn't make anything that there's speculation that when the company goes public. It will actually exceed the twenty three billion dollar valuation that put on himself twenty three billion dollars. This is cold having your cake and eating it too.
"matt levine" Discussed on Front End Happy Hour
"Is about moving resources from the future back into the present stock prices reflect catch flow into an infinite future. Like, I mean, it's just poetry. But it's about some something really boring, but he just like illuminates financial matters. Like, so well, if you ever see his name on article it's worth reading like absolutely say his name again. Matt LeVine, Bloomberg Michael Woody have fair listeners. So I came in unprepared for the so-called picks topic sick, you know, as my wife always said says, it sucks to suck. Let's see. So as far as scale I'd say that something that I have thoroughly enjoyed as of recent is being on the other side of fatherhood. I know that's kind of a weird thing to pick. But. We've all we all grew up with or without a father. But we had a father at some point like you unless crazy sciences recently happened, which I don't think it has you pretty much have to have a dad at some point. And so growing up personally without a present dad and being able to be on the other side like that's just something that I've been diving more and more into in realizing things that I will never understand from one side. But I can understand from another perspective and just something really awesome about that. So few have obviously a kid in your life. It's a good choice to invest more time than you think it's worth like the time doesn't feel good now. But it does feel good retrospectively. And then the second thing is I really enjoy investing time into live stuff. Gems laughing. But if you ever I I'd say, especially since we're this is a large engineering or primarily engineering audience is that a lot of people don't take the time to sharpen their speaking ability. Not just simply performing in front of a group of people, which is giving a presentation of presentation you prepare for you say it over and over again, you make all these slides whether they're good or bad doesn't really matter. But you give a performance you were an actor on stage. And you may be bad. You may be good. That's different than attempting to practice the art speaking. And so taking the time to have more of those in your life will benefit you long-term much more than you realize at the moment. And so talking like, I knew someone that every single day they would wait in a parking lot. And wait till the next person came and would actually get out of the car at the same time and just speak with that person on the way to just simply to get better at talking to strangers because they said that the number one fear they had. Talking to strangers. And by the end of the semester, they were very comfortable talking to strangers like finding ways to exercise that live interaction and speaking, and so that's my other pick is investing into the future via it via conversational arts. Also, stocking people in parking lots of pair. That's called stock in most. Yes, guilty that don't don't actually wait for the same person that soggy if it's a repeat person than. Oh, yeah. It's all this is all right. All right jock. What do you have for us Jim stole mind? The talks I was going to just pick kiss talk. Yeah. Okay. Well, I will I'll plug this of them. We did them as a trio. And it was I think actually a pretty good lineup. We head. I think I went first then Michael then gem, the I think the set of them actually speaks a lot. The set of those talks speaks a lot to what we were talking about today and goes a little bit more into into depth in some of the more specific cases. So they're they're worth a watch one point five x speed them. If you are short on time, but they're they're a lot of fun. We had a lot of fun putting together and putting it on. And if you're in the area in the in the bay area, definitely check out the Netflix tech talks there. Well worth coming down all the way to Los Gatos for which is a long haul..