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When will consumers get the streaming cord? · The Financial Exchange Show

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  Speaker 1: Zadath and Mike Armstrong.
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  Speaker 2: Chuck Mike Tucker with you here.
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  Speaker 3: And as we kick things off, we've got markets having
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  Speaker 3: a little bit.
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  Speaker 2: Of a sell off today.
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  Speaker 3: It's nothing crazy, but the S and P is down
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  Speaker 3: about one point one percent, seventy six points, Dow Jones
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  Speaker 3: Industrial Average down three quarters of percent three hundred and
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  Speaker 3: fifty seven points, and the Nasdaq Composite down four hundred
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  Speaker 3: and seventeen points almost two percent. Uh and so you
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  Speaker 3: can tell, yeah, it's the tech stuff that is getting
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  Speaker 3: hit here. And this has kind of been the story
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  Speaker 3: the last month or so, is some renewed concerns in
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  Speaker 3: parts of that tech market that are weighing on it,
• 1:48
  Speaker 3: while in Nvidia and Apple try to do their best
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  Speaker 3: to keep things afloat. So today you look at some
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  Speaker 3: of your stocks that are you know, sinking. You got
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  Speaker 3: Core Weave who reported earnings earlier this week. They're down
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  Speaker 3: another six percent, Broadcom down five percent, in Vidia today
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  Speaker 3: down four percent, Oracle down three Oracle mic by the way,
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  Speaker 3: now about ten percent below where it was prior to
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  Speaker 3: that big forty percent pop. So Oracle stock in the
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  Speaker 3: last call it two months has gone from three forty
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  Speaker 3: five down to two twenty. More than a third of
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  Speaker 3: its value wiped off the map U during that time,
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  Speaker 3: and they're now flirting with numbers that they last saw
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  Speaker 3: back in June. So that's what's going on with them.
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  Speaker 3: Other things moving in markets. US ten year treasury up
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  Speaker 3: two point one basis points to four point one percent.
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  Speaker 3: Not a huge move there, Dollar index despite rates up,
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  Speaker 3: Dollar index selling off down point four to one percent.
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  Speaker 3: Pretty sizable move there to ninety eight ninety seven. We
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  Speaker 3: got gold down ten twenty an ounce again, kind of
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  Speaker 3: things moving in different directions. Normally you get a week dollar,
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  Speaker 3: you get gold popping a little bit. But gold down
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  Speaker 3: to forty two four and twenty cents right now, in
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  Speaker 3: about a quarter percent sell off. Oil up point three
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  Speaker 3: to two and not point three two thirty two cents.
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  Speaker 3: I guess is how humans would say that? Uh So,
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  Speaker 3: oil up to fifty eight eighty one the tripa national
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  Speaker 3: average four. Gas prices up another half a cent per
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  Speaker 3: gallon over night to three oho eight even again, still
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  Speaker 3: no meaningful move a year ago. Mike, do you know
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  Speaker 3: where we were for oil for gas prices a year ago?
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  Speaker 2: Right around where we are now three Oho.
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  Speaker 3: Eight and four ten So we've moved four tenths of
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  Speaker 3: a cent in a year. There just has not been
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  Speaker 3: much movement there for the last twelve months. Thought is
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  Speaker 3: a trick question there for a minute. I would never
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  Speaker 3: do that to you. And that's what we've got moving
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  Speaker 3: in markets today. Anything I missed there that you wanted
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  Speaker 3: to touch.
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  Speaker 2: On, No, not market wise. Talk a little bit.
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  Speaker 3: About Disney earnings quite honestly, Like and and Mike, this
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  Speaker 3: is gonna sound kind of weird, but doesn't Disney feel
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  Speaker 3: kind of irrelevant to the broader market today? Like just
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  Speaker 3: in general, I know.
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  Speaker 2: Brod to the broader market.
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  Speaker 4: Yeah, because I mean having is this company now one
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  Speaker 4: hundred and ninety billion dollars? Yeah, sure, So they're not
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  Speaker 4: going to drive the market one direction or the other.
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  Speaker 4: I think they do have a fairly interesting representation of
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  Speaker 4: pieces of the US economy in terms of discretionary spending.
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  Speaker 4: That's not what's moving their company today, but I do
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  Speaker 4: think they still have you know, I can look at
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  Speaker 4: their parks revenue and it can give me a pretty
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  Speaker 4: good semblance.
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  Speaker 2: Of what's going on with wealthy Americans for example. Yeah,
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  Speaker 2: I'd say that's fair.
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  Speaker 3: The piece that is interesting, though, like just when when
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  Speaker 3: you look at this and again, I just I sometimes
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  Speaker 3: I feel like I get a little bit out of
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  Speaker 3: touch with where things actually are in terms of their importance.
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  Speaker 3: And I had one of those last week where I
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  Speaker 3: said to you, Mike, did you realize that Uber's doing
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  Speaker 3: twice the revenue that McDonald's is? Sure, and both of
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  Speaker 3: us are kind of like wow, Like that's that's pretty amazing.
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  Speaker 3: Here's another one, just along the same lines. Eight years ago, Mike,
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  Speaker 3: Disney was doing about eight times the revenue that Uber was. Today,
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  Speaker 3: Disney's doing about one point eight times the revenue that
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  Speaker 3: Uber is.
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  Speaker 2: Uber's getting to.
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  Speaker 3: A point where it's giving you almost as much signal
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  Speaker 3: about the US economy as Disney. In my opinion, it's close.
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  Speaker 3: It's not there yet, but another four or five years
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  Speaker 3: and it might be there. So when we talk about Disney,
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  Speaker 3: they obviously have their different segments. They got parks, they
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  Speaker 3: got their theaters, they got their legacy cable.
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  Speaker 2: And they've got streaming too. They got streaming as well.
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  Speaker 3: Given the fact that the stock is down nine percent,
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  Speaker 3: I'm guessing at least one of those didn't please investors.
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  Speaker 4: Yeah, it was really the legacy cable In the movie
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  Speaker 4: businesses that did not please investors a whole lot too
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  Speaker 4: much screen time. So what we have here, You know,
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  Speaker 4: Disney's been dealing with the same cord cutting that all
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  Speaker 4: the traditional cable networks are and has been struggling with it,
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  Speaker 4: just like all of them have been.
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  Speaker 2: They have a replace to it.
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  Speaker 4: That's quite powerful, which is Disney Plus, and their subscriber
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  Speaker 4: growth there is quite good. But they're talking about serious
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  Speaker 4: dollars that are just walking out the door. When Tucker
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  Speaker 4: cuts his Exfinity package finally and you know, doesn't subscribe
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  Speaker 4: to cable anymore. Disney's been in this fight with is
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  Speaker 4: it YouTube TV that they've been battling with over Oh yes, I.
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  Speaker 3: Finally I got my twenty dollars credit a couple days ago,
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  Speaker 3: and I am thrilled.
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  Speaker 4: Congratulations. And so that legacy business of theirs is under pressure,
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  Speaker 4: and I don't know exactly what makes it improve other
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  Speaker 4: than just a plateauing of the traditional cable package, which
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  Speaker 4: we might be getting to based on conversations that I'm
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  Speaker 4: having the other pieces. I see a potential temporary hit,
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  Speaker 4: which is it's really expensive to make the latest Avatar
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  Speaker 4: movie and it had better be a huge box office hit.
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  Speaker 4: There's other movies as well, but that seems to be
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  Speaker 4: weighing on earnings pretty substantially.
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  Speaker 2: Yeah, I think that's the case.
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  Speaker 3: And you know, you look at Disney and what they've again,
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  Speaker 3: I find some of this is also like just thinking
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  Speaker 3: about what Disney has, what they've transformed into over the
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  Speaker 3: last twenty thirty years in terms of what they I'm
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  Speaker 3: trying to think of the right way to phrase this, Like,
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  Speaker 3: here's the example that I'll give when when you and
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  Speaker 3: I were kids, Mike, and we went to Disney. You
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  Speaker 3: would go there and you'd spend the day there, and
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  Speaker 3: you'd have to wait in some lines, and it would
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  Speaker 3: basically be like okay, you'd get on you know, your rides,
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  Speaker 3: and you do this, and you do that, and that
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  Speaker 3: would be the day. It's at the point now where
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  Speaker 3: in order to have a day at Disney, from what
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  Speaker 3: I understand, I haven't been there since I was in
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  Speaker 3: like seventh grade, so it's been it's been a minute,
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  Speaker 3: you know, it's been thirty years or so since I've
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  Speaker 3: been to Disney. My understanding is that you basically have
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  Speaker 3: to pre schedule your day and then pay for the
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  Speaker 3: right to get on rides when you want to get
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  Speaker 3: on them.
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  Speaker 2: Is that accurate?
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  Speaker 4: You don't have to And this is the piece where
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  Speaker 4: I'm not the foremost expert, But you can still have
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  Speaker 4: that experience of sitting in the lines and dealing with that.
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  Speaker 4: I think the lines are probably longer than they were
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  Speaker 4: were more people now, Yeah, but you can still have
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  Speaker 4: that experience. But what Disney has latched onto is the
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  Speaker 4: same thing that airlines and everything else has latched onto,
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  Speaker 4: which is different customers are willing to pay different prices.
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  Speaker 4: And that just wasn't a thing thirty years ago. John
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  Speaker 4: no and Walt Disney like fought against this. He was like,
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  Speaker 4: one of the things was like I want everyone, regardless
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  Speaker 4: of how much they make, to be able to have
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  Speaker 4: the same great experience at Disney.
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  Speaker 2: It was like the core of like the whole Disney thing.
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  Speaker 4: And that's definitely not the case anymore because you have, yeah,
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  Speaker 4: these passes where you can entirely cut the line. They
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  Speaker 4: have two lines, one for those who have reserved their spa,
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  Speaker 4: the others who have not. You have to pay for
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  Speaker 4: the right to reserve it. So yeah, it is a
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  Speaker 4: very very different experience depending on it. And by the way,
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  Speaker 4: if you pay the extra money to stay at a
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  Speaker 4: Walt Disney World resort, which are you know, far.
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  Speaker 2: More expensive than the Hampton in down.
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  Speaker 4: The street, well you get to go into the park
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  Speaker 4: an extra I think, half an hour before everybody else.
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  Speaker 4: So there's there is definitely an exclusivity to these places
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  Speaker 4: now that may not have existed thirty years ago.
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  Speaker 3: So look, obviously that's good for the park's business in
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  Speaker 3: terms of you know, dollars in the short term. Does
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  Speaker 3: it create you know, problems longer term.
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  Speaker 2: I don't know.
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  Speaker 3: I mean, I don't not sure, so they'll figure it out.
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  Speaker 3: The piece that is interesting to me is the streaming
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  Speaker 3: and cable business because it dovetails into the next story
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  Speaker 3: that we're gonna cover, which is from the Wall Street
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  Speaker 3: Journal titled streaming prices are soaring and consumers are still paying.
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  Speaker 3: Let's take a quick break, and when we come back
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  Speaker 3: and want to touch on that. We've also got some
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  Speaker 3: trivia to do. But I got to tell you, Mike,
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  Speaker 3: I'm starting to get a little fed up with the
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  Speaker 3: costs of all this TV that I don't watch.
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  Speaker 2: And that's all I got to tell you people about it.
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  Speaker 3: Yeah, now you're gonna hear about it about it month
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  Speaker 3: in advance of Festivus, So.
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  Speaker 2: Let's take a quick break.
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  Speaker 3: But when we come back, we're going to talk about
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  Speaker 3: why the streaming is just so expensive.
• 10:09
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  Speaker 3: Yeah, of course, Yeah, I'm just yeah, pitballing here again.
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  Speaker 2: Sure, didn't mean to offend anyone.
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  Speaker 3: Uh, Let's talk a little bit about the streaming business, Mike,
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  Speaker 3: because here's the deal. For the last five to seven years,
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  Speaker 3: the streaming business for pretty much everyone other than Netflix
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  Speaker 3: has been bad. Everyone's been like trying to figure out
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  Speaker 3: how to make money off of it.
• 12:23
  Speaker 2: And as I say, I don't know that it's been bad,
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  Speaker 2: it's just been unprofitable.
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  Speaker 3: Well that's bad. A business that's not profitable. It's a
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  Speaker 3: bad business. Uber was unprofitable for a decade and now
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  Speaker 3: they're and it was a bad business then, Yeah, like
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  Speaker 3: they figured out how to make it profitable.
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  Speaker 2: You know.
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  Speaker 3: Like there's plenty of businesses that stay unprofitable and then
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  Speaker 3: go out of business, which makes them bad businesses. So
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  Speaker 3: the solution to an unprofitable streaming business is simple, raise
• 12:48
  Speaker 3: the price for your subscribers. So over the last six
• 12:52
  Speaker 3: years now, the cost of HBO Max, which has gone
• 12:55
  Speaker 3: through like eight different names, but it's HBO Max now,
• 12:58
  Speaker 3: is up twenty three percent. Not too bad actually, given
• 13:01
  Speaker 3: like the overall inflation during that time is north of it.
• 13:03
  Speaker 3: HBO Max has actually gone up at a slower pace
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  Speaker 3: than inflation.
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  Speaker 2: It's fine.
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  Speaker 3: Netflix up thirty eight percent, pretty much in line with
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  Speaker 3: inflation over that time, maybe a touch hotter paramount plus,
• 13:14
  Speaker 3: which I didn't know existed back in twenty nineteen, but
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  Speaker 3: this piece from the Journal tells me he did up
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  Speaker 3: forty percent.
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  Speaker 2: Hulu I'm fifty eight.
• 13:22
  Speaker 3: And then you get into the egregious ones Peacock up
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  Speaker 3: one hundred and twenty percent, Apple TVA one hundred and sixty,
• 13:27
  Speaker 3: Disney Plus up one seventy Two, the question that I ask,
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  Speaker 3: are we getting close to the point where people are
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  Speaker 3: going to start trimming on these because to this point,
• 13:38
  Speaker 3: with these price increases, we haven't seen that, and I'm
• 13:41
  Speaker 3: wondering if there is a point we get to where
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  Speaker 3: people just say no, Like the aggregate pie of you know,
• 13:51
  Speaker 3: the aggregate pie that I have to allocate towards watching
• 13:55
  Speaker 3: video at home isn't big enough to cover all these costs,
• 13:59
  Speaker 3: and I gotta start cut some of these out.
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  Speaker 4: Yeah, I think a few things about this are new. One,
• 14:04
  Speaker 4: the price increases are relatively new. The password sharing crackdowns
• 14:09
  Speaker 4: also relatively new.
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  Speaker 2: To all of this.
• 14:13
  Speaker 4: There's a few features that are new to right like
• 14:16
  Speaker 4: Netflix rolled out gaming apples, rolling out live sports as
• 14:19
  Speaker 4: is HBO, the bundles where you can put this all together,
• 14:23
  Speaker 4: and kind of I wouldn't say, get a cheaper price,
• 14:26
  Speaker 4: but get a more confusing price where you can't really
• 14:29
  Speaker 4: precisely tell what you're paying for. What are getting more popular,
• 14:33
  Speaker 4: But I would say, yes, chuck during they're in the
• 14:35
  Speaker 4: first downturn, I would expect that this is one of
• 14:37
  Speaker 4: the early things that does get cut. The other piece
• 14:40
  Speaker 4: of the cord cutting and streaming that I'm hearing more
• 14:43
  Speaker 4: and more people, you know, rebel against is the cord
• 14:49
  Speaker 4: cutting options for traditional cable, because Disney Plus is not
• 14:52
  Speaker 4: a cord cutting option for traditional cable. If you want
• 14:55
  Speaker 4: to watch some of those things. But you know, we've
• 14:59
  Speaker 4: both done it. YouTube TV, I have Fubo. I was
• 15:02
  Speaker 4: talking to a bunch of people my age in the
• 15:04
  Speaker 4: hockey locker room last week about this, and they're like,
• 15:08
  Speaker 4: you know, I hate paying Exfinity, but hearing you guys
• 15:11
  Speaker 4: complain about, Okay, how am I gonna watch Nessen this week?
• 15:15
  Speaker 4: How am I going to watch TNT that next week?
• 15:17
  Speaker 4: The games keep switching between these channels. It sounds like
• 15:20
  Speaker 4: nobody's terribly happy with their non cable scream U streaming package.
• 15:25
  Speaker 2: It's not a lot.
• 15:26
  Speaker 4: Cheaper, and the only real benefit that you seem to
• 15:31
  Speaker 4: be touting is that I don't need to pay for
• 15:33
  Speaker 4: all of these set top boxes, which the traditional cable
• 15:36
  Speaker 4: companies are starting to deal with that too. Exfinity, for example,
• 15:41
  Speaker 4: is now offering a you know, quote unquote cable package
• 15:44
  Speaker 4: that's all just streamed over the internet. And so as
• 15:48
  Speaker 4: we suspected, I think we're getting back, I wouldn't be
• 15:51
  Speaker 4: surprised if we reach have already reached peak cord cutting.
• 15:55
  Speaker 4: I don't know where we get these figures on that statistic,
• 15:57
  Speaker 4: but it doesn't seem like the same deal that it
• 16:01
  Speaker 4: was five years ago.
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  Speaker 3: No, And like I here's the other thing that's interesting,
• 16:07
  Speaker 3: just from again, my kids are not old enough for
• 16:09
  Speaker 3: most of this to matter yet. But like, I have
• 16:11
  Speaker 3: a number of friends who have kids that are now
• 16:14
  Speaker 3: in their teens, you know, like anywhere from like well
• 16:18
  Speaker 3: I guess they're they're teens, you.
• 16:19
  Speaker 5: Know, like got it anywhere in the teen range.
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  Speaker 2: Yeah.
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  Speaker 3: And the interesting thing so, like one of them was
• 16:26
  Speaker 3: talking to their kid, who I think turned to like
• 16:28
  Speaker 3: thirteen or fourteen in the last month or two, and
• 16:30
  Speaker 3: was like, hey, like, do you want a TV in
• 16:34
  Speaker 3: your room? Which, again, like every family's different, I'm not
• 16:36
  Speaker 3: saying this is good or bad, but what I am
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  Speaker 3: saying is the kid was like, no, I don't see
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  Speaker 3: any use for that because he doesn't watch anything that's
• 16:46
  Speaker 3: on you know, normal TV. And he's perfectly content, you
• 16:48
  Speaker 3: know with you know, whether it's his tablet or whatever
• 16:51
  Speaker 3: it might be like watching you know, the stuff that
• 16:53
  Speaker 3: he does on that.
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  Speaker 4: Yeah, I was gonna say if I cut a bunch
• 16:56
  Speaker 4: of my streaming packages and allowed my kids to watch
• 16:58
  Speaker 4: more YouTube, they would be perfectly content. I'm not going
• 17:02
  Speaker 4: to do that because the content that's put onto YouTube
• 17:04
  Speaker 4: I find.
• 17:05
  Speaker 2: Terry really dumb, really dumb. I really limit some kids
• 17:09
  Speaker 2: stuff out there is just like all right.
• 17:11
  Speaker 4: Yeah, I really limit the amount of time my kids
• 17:13
  Speaker 4: can spend on there.
• 17:14
  Speaker 2: So I wouldn't do that.
• 17:15
  Speaker 4: But again, to your point, plenty of families are different,
• 17:17
  Speaker 4: and when the penny's getting pinched, I wouldn't be surprised
• 17:20
  Speaker 4: to say, see a bunch of kids say, yeah, I'll
• 17:23
  Speaker 4: be fine with just watching YouTube videos. I can go
• 17:26
  Speaker 4: watch another kid play a video game that I don't
• 17:30
  Speaker 4: know the name of anymore for an hour. Like that
• 17:33
  Speaker 4: is the type of stupid stuff that kids consume these days.
• 17:36
  Speaker 4: And by the way, to your point, they're usually doing
• 17:38
  Speaker 4: it on a cell phone or on an iPad.
• 17:42
  Speaker 3: And so like, I have the thoughts, quite honestly, do
• 17:46
  Speaker 3: I cancel like that, you know, cable replacement streaming service
• 17:50
  Speaker 3: and just not replace it with anything.
• 17:53
  Speaker 2: Yes, I lose live sports, quite.
• 17:56
  Speaker 3: Honestly, I don't know how much many of them I
• 17:58
  Speaker 3: watch at this point, like it's and again like twenty
• 18:02
  Speaker 3: three year old me would be like, don't you ever
• 18:04
  Speaker 3: do that, You're gonna lose your soul.
• 18:05
  Speaker 2: But like, I don't know.
• 18:07
  Speaker 3: My soul's like okay ish, And I just don't know
• 18:12
  Speaker 3: if it's worth paying the eighty bucks a month for
• 18:16
  Speaker 3: YouTube TV, because.
• 18:18
  Speaker 2: What do I really get out of it.
• 18:21
  Speaker 4: Yeah, I think most families are going to continue to
• 18:24
  Speaker 4: pay for some form of a basic cable package.
• 18:27
  Speaker 2: I think that that's.
• 18:28
  Speaker 4: Ingrained enough into or equivalent or equivalent right either from
• 18:33
  Speaker 4: Inxfinity or from YouTube TV or Fubo or Sling or
• 18:36
  Speaker 4: one of these competitors. I don't think the actual cord
• 18:40
  Speaker 4: cutting is going to continue at these paces. And other
• 18:43
  Speaker 4: than Netflix, I would consider pretty much all of those
• 18:47
  Speaker 4: other streaming packages to be on the table for cost
• 18:51
  Speaker 4: cutting in the event of somebody losing their job. Netflix
• 18:55
  Speaker 4: somehow has this like dominant position where you might trade
• 18:58
  Speaker 4: down and get the ad supported to you. But I
• 19:00
  Speaker 4: just don't see much evidence of people cutting it.
• 19:03
  Speaker 3: Interesting stat in here that in the last ten years,
• 19:07
  Speaker 3: the average household has gone from about one and a
• 19:09
  Speaker 3: half streaming services up to almost four and a half. Wow,
• 19:12
  Speaker 3: And I'm trying to think. I think we have three
• 19:16
  Speaker 3: maybe four, so like we're in the same boat. I'm
• 19:18
  Speaker 3: including like YouTube TV in that puzzle, but I do
• 19:22
  Speaker 3: think like that's that's kind of the norm. Right now,
• 19:25
  Speaker 3: just take a quick break. When we come back, we
• 19:26
  Speaker 3: have the Trivia Answer and.
• 19:28
  Speaker 6: Wall Street Launch, bringing the latest financial news straight to
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• 20:16
  Speaker 1: For all you've done. Time now for Wall Street. Watch
• 20:22
  Speaker 1: a complete look at what's moving markets so far today
• 20:25
  Speaker 1: right here on the Financial Exchange Radio Network.
• 20:31
  Speaker 5: Hey, the longest government shutdown in US history has ended.
• 20:37
  Speaker 5: In markets are now seeing a broad based sell off
• 20:41
  Speaker 5: by midday Right now, the dows down by three quarters
• 20:44
  Speaker 5: of a percent or three hundred and fifty three points.
• 20:46
  Speaker 5: S and P five hundred now down over one percent,
• 20:50
  Speaker 5: Nasdaq down one point six percent or three hundred and
• 20:53
  Speaker 5: eighty nine points, Russell two thousand, down one point seven percent.
• 20:57
  Speaker 5: Tenure Treasure reeled up two basis points at four point
• 21:01
  Speaker 5: one zero six percent. In crude oil up three quarters
• 21:05
  Speaker 5: of a percent, rating just below fifty nine dollars a barrel.
• 21:09
  Speaker 5: Cisco rising four percent after the network equipment company lifted
• 21:13
  Speaker 5: its earnings outlook, driven by demand for AI products. Meanwhile,
• 21:17
  Speaker 5: Disney offered mixed quarterly results where beat earnings expectations, bill
• 21:21
  Speaker 5: fell short of revenue forecasts. The media in entertainment giants
• 21:25
  Speaker 5: TV networks in movie business declined, offsetting gains in parks
• 21:30
  Speaker 5: and streaming, Disney stock falling nine percent now Elsewhere, fandual
• 21:35
  Speaker 5: parent company Flutter Entertainment cut its annual outlook that stocked
• 21:39
  Speaker 5: down by twelve percent and breaking news involving Verizon this
• 21:43
  Speaker 5: hour after The Wall Street Journal reported the company's planning
• 21:47
  Speaker 5: to cut about fifteen thousand jobs, looking to reduce costs
• 21:51
  Speaker 5: as it contends with increase competition for wireless service and
• 21:55
  Speaker 5: home internet. The cuts, the largest ever for Verizon, are
• 21:59
  Speaker 5: set to take place in the next week. That again,
• 22:02
  Speaker 5: according to the Wall Street Journal, Verizen stock now up
• 22:06
  Speaker 5: over one percent. I'm Tucker Silva and that is Wall
• 22:09
  Speaker 5: Street Watching. In the previous segment, we asked you the
• 22:11
  Speaker 5: tribute question, what is the highest grossing movie of Steven
• 22:15
  Speaker 5: Spielberg's career. That would be Jurassic Park. Chris from Pocasset
• 22:20
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• 22:24
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• 22:27
  Speaker 5: every day here in the Financial Exchange See complete contest
• 22:29
  Speaker 5: rules at Financial Exchange Show dot com.
• 22:32
  Speaker 2: Mike, are you familiar with the Nasdaq whale? What kind
• 22:37
  Speaker 2: of whale is it? H Well, it's it's a killer whale.
• 22:41
  Speaker 2: J Looking at whale, it's a baby wheel. Uh. I
• 22:47
  Speaker 2: think it's hurt, Jay. The Nasdaq whales hurt.
• 22:50
  Speaker 3: So apparently masios Son, who runs soft Bank, is referred
• 22:55
  Speaker 3: to as the Nasdaq whale, which you gotta tell you.
• 22:57
  Speaker 3: I've known mas not personally, but I've known masiosra Sun
• 23:01
  Speaker 3: has existed for you know, the better part of twenty years.
• 23:04
  Speaker 3: I don't think I've ever heard of him referred to
• 23:06
  Speaker 3: as the Nasdaq whale before this piece. And so here's
• 23:10
  Speaker 3: the deal. So he runs soft Bank, and soft Bank
• 23:14
  Speaker 3: announced earlier this week that they sold their entire stake
• 23:17
  Speaker 3: in in Vidia for five point eight billion dollars. Now Here,
• 23:21
  Speaker 3: here's where things get kind of funny in all this, Mike, So,
• 23:24
  Speaker 3: soft Banks sold five point eight billion.
• 23:26
  Speaker 2: Dollars in in Vidia stock.
• 23:27
  Speaker 3: Okay, because Sun said that he wanted to go and
• 23:32
  Speaker 3: buy more open Ai. Not I mean it's not it's
• 23:37
  Speaker 3: technically stock, but you can't like buy open Ai in
• 23:39
  Speaker 3: the open market. He wanted to make, you know, a
• 23:41
  Speaker 3: private investment into open Ai, which buys in video products.
• 23:47
  Speaker 3: So like, just think of the weird circularity. Yeah, I'm
• 23:50
  Speaker 3: selling in Vidia stock to go buy the company that
• 23:52
  Speaker 3: buys in Vidia products.
• 23:53
  Speaker 4: Okay, whatever, I was trying to think of what kind
• 23:56
  Speaker 4: of signal this actually is? Here's the sim answer. Sone
• 24:00
  Speaker 4: has no liquidity. He's gotta sell whatever is liquid, and
• 24:03
  Speaker 4: Nvidia's liquid, and so he can sell it, whereas he
• 24:06
  Speaker 4: can't sell the other stuff in his portfolio. Yeah, but
• 24:09
  Speaker 4: in terms of broader signals about anything other than soft
• 24:12
  Speaker 4: Bank does it tell me anything.
• 24:15
  Speaker 3: Generally, Sone has been a pretty inopportune investor over the
• 24:22
  Speaker 3: last decade. Yes, in that when he has been making
• 24:26
  Speaker 3: these moves, they've generally been in opportune times. See his
• 24:32
  Speaker 3: investment in we Work and other similar companies in that
• 24:35
  Speaker 3: vintage he basically rode the rollercoaster up and then down
• 24:39
  Speaker 3: from twenty twenty to twenty twenty two. I don't know
• 24:43
  Speaker 3: that there's like a ton of signal he loves to make,
• 24:45
  Speaker 3: you know, crazy slides that just show things that are
• 24:48
  Speaker 3: detached from reality and PowerPoint. I like it's that I'm
• 24:54
  Speaker 3: in case you can't tell, I'm not particularly impressed with
• 24:56
  Speaker 3: like what he does because I don't think he does
• 24:59
  Speaker 3: anything particularly impressive.
• 25:01
  Speaker 2: How's that for circularity right there? That's all I got is.
• 25:06
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• 26:09
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• 26:20
  Speaker 3: Past and Bloomberg. Mike soon de Pratchai is Google's AI
• 26:24
  Speaker 3: wartime CEO.
• 26:26
  Speaker 2: After all, I'm gonna I feel like you're gonna be
• 26:31
  Speaker 2: doubtful of this.
• 26:31
  Speaker 4: I'm gonna take the side of let's talk about where
• 26:35
  Speaker 4: Google what a Google occupied a year ago in terms
• 26:38
  Speaker 4: of their positioning, Because what I was hearing about Google
• 26:40
  Speaker 4: a year ago was they're a monopoly that's about to
• 26:43
  Speaker 4: be broken up. They are way behind on artificial intelligence,
• 26:47
  Speaker 4: and they're gonna be dead in the water because of
• 26:49
  Speaker 4: those two factors. And all three of those have been
• 26:51
  Speaker 4: proven false dramatically. So now, is it all because of
• 26:55
  Speaker 4: sunder patchaie?
• 26:55
  Speaker 2: I don't know.
• 26:56
  Speaker 4: I think you can still argue that he was timid
• 26:59
  Speaker 4: when it came to artifian intelligence and worried about what
• 27:02
  Speaker 4: it might do to their business, but has since kind
• 27:05
  Speaker 4: of reverse course on that and managed to roll out
• 27:08
  Speaker 4: their own artificial intelligence program not lose customers of their
• 27:13
  Speaker 4: cloud computing businesses, right, I mean, they're not being talked
• 27:17
  Speaker 4: about for open AI in the same way that Amazon
• 27:22
  Speaker 4: and Microsoft are because they more directly compete in that space,
• 27:25
  Speaker 4: but sure still picking up plenty of cloud business and
• 27:28
  Speaker 4: not seeing any meaningful deterioration in their traditional search plus
• 27:33
  Speaker 4: very successfully, whether you agree or disagree, I happen to disagree,
• 27:36
  Speaker 4: but very successfully argued that they are not to be
• 27:39
  Speaker 4: broken up because of monopolistic concerns.
• 27:42
  Speaker 3: Yeah, there's no doubt that the last couple of years
• 27:44
  Speaker 3: has been good for PITCHAI and for Google. I think
• 27:49
  Speaker 3: it's a question as to, you know, hey, can you
• 27:53
  Speaker 3: expect this to continue? Like is this going to be
• 27:56
  Speaker 3: what we continue to see as the AI battly vow
• 28:00
  Speaker 3: as we see what comes of that over the next
• 28:02
  Speaker 3: three to five years. But I think it's absolutely true
• 28:07
  Speaker 3: that for the last couple of years, as much as like,
• 28:10
  Speaker 3: I can personally look at Google and be like, yep,
• 28:13
  Speaker 3: I don't love how monopolistic you are, and I don't
• 28:16
  Speaker 3: think you've had like a ton of innovation in your
• 28:18
  Speaker 3: core products, and I feel basically trapped by your YouTube
• 28:22
  Speaker 3: TV subscription service. Other than like, you know, again, those
• 28:26
  Speaker 3: are like my my personal things. But there's no doubt
• 28:29
  Speaker 3: that from an execution perspective, he's done what's needed in
• 28:34
  Speaker 3: order to keep the stock moving where he wants to
• 28:38
  Speaker 3: and from a investors wanted to.
• 28:40
  Speaker 2: Yeah, and just you know, thinking about the future for
• 28:43
  Speaker 2: Google for a moment here.
• 28:45
  Speaker 4: From a positioning standpoint, right, if if Apple is on
• 28:50
  Speaker 4: the cusp of spending a whole boatload of money to
• 28:54
  Speaker 4: onboard some sort of artificial intelligence system onto their platform,
• 29:00
  Speaker 4: doesn't Google seem pretty well positioned to benefit from that.
• 29:02
  Speaker 2: Well, didn't they have an announcement to that effect like
• 29:04
  Speaker 2: a week or two? Yeah, I think they had some.
• 29:07
  Speaker 4: And I just think about the deep ties that these
• 29:09
  Speaker 4: two companies already have, the integrations that they already have
• 29:11
  Speaker 4: in terms of Google having paid Apple for years now
• 29:14
  Speaker 4: to be the default search engine.
• 29:16
  Speaker 2: Yeah, they know each other fairly well.
• 29:19
  Speaker 4: And you know, Apple's whole positioning to this has been
• 29:22
  Speaker 4: will wait and see, And I think they're getting sorry,
• 29:25
  Speaker 4: go ahead with the announcement.
• 29:27
  Speaker 3: It was last week on the fifth Apple nears deal
• 29:30
  Speaker 3: to pay Google billion dollars annually for Gemini to help
• 29:33
  Speaker 3: power their new sery.
• 29:34
  Speaker 2: Right.
• 29:35
  Speaker 4: So, yeah, I don't know both of those companies. Apple
• 29:40
  Speaker 4: is an interesting case, right, Like you know, they're play
• 29:44
  Speaker 4: they're taking the page from their old playbook of we're
• 29:46
  Speaker 4: not going to be first, but we're going to develop
• 29:48
  Speaker 4: something super user friendly. I'm not sure they'll be able
• 29:50
  Speaker 4: to execute on it. But man, Google has really, I guess,
• 29:57
  Speaker 4: shaken off any of the big looming can cerns about
• 30:00
  Speaker 4: their business so far.
• 30:02
  Speaker 2: Yeah, I'd say that's fair. Just take a quick break
• 30:04
  Speaker 2: here when we return, time for a little bit of
• 30:07
  Speaker 2: stack root.
• 30:08
  Speaker 1: Let's here the Financial Exchange every day from eleven to
• 30:12
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• 30:58
  Speaker 2: Mark, What do you got for stack Roulex?
• 31:00
  Speaker 4: I want to talk a little bit about Toyota. I
• 31:02
  Speaker 4: know we brought this company up several times, but this
• 31:07
  Speaker 4: was a pretty quick turn in terms of a company
• 31:11
  Speaker 4: that had been so heavily criticized generally sticking to their guns.
• 31:16
  Speaker 4: Did they replace their CEO during all of this? I
• 31:19
  Speaker 4: feel like there might have been some capitulation by Toyota
• 31:22
  Speaker 4: at some point from the pressure of I don't think
• 31:25
  Speaker 4: it was because of EV's I think it happened to
• 31:27
  Speaker 4: coincide at the same time, so I think it was
• 31:30
  Speaker 4: read as you know, maybe a capitulation on the EV push.
• 31:34
  Speaker 4: But there was immense pressure on this company in particular
• 31:37
  Speaker 4: to roll out electric vehicles and abandon their hybrids, abandon
• 31:41
  Speaker 4: their hybrid twenty things that they had made.
• 31:43
  Speaker 2: And it was not that long ago.
• 31:45
  Speaker 4: It was yeah, twenty twenty three that changed the CEOs,
• 31:47
  Speaker 4: But this was pressure that was mounting in twenty twenty
• 31:49
  Speaker 4: one and twenty twenty two, twenty twenty five rolls around.
• 31:52
  Speaker 4: Every other car maker out there is abandoning their electric
• 31:56
  Speaker 4: vehicle plans, trying to focus on hybrid technologology, which is
• 32:01
  Speaker 4: not the most complicated thing to get right. But if
• 32:05
  Speaker 4: you have only been making internal combustion engine cars, my
• 32:08
  Speaker 4: guess is you're not going to be perfect at at
• 32:10
  Speaker 4: the first time around. Whereas Toyota has been dominating the
• 32:12
  Speaker 4: space with the Prius for twenty some odd years, and
• 32:16
  Speaker 4: I don't know, I see I see a lot of
• 32:18
  Speaker 4: growth potential for them. I think the only area where
• 32:21
  Speaker 4: they where I have some lingering concerns would be the
• 32:25
  Speaker 4: technology in their vehicles falls a little bit flat. Compared
• 32:29
  Speaker 4: to what the Korean car makers are doing.
• 32:33
  Speaker 2: The technology like like like AV systems and stuff like that.
• 32:37
  Speaker 4: Yeah, I would say the AV systems, the connectibility of
• 32:40
  Speaker 4: you know, Apple car Play, Google car Play or whatever
• 32:43
  Speaker 4: Google calls their version of that, as well as some
• 32:47
  Speaker 4: of the autopilot features that existing the new newer vehicles
• 32:51
  Speaker 4: that people look for Toyota. Again, I have a Toyota
• 32:54
  Speaker 4: in a Honda, and I just compare the two frequently,
• 32:57
  Speaker 4: and my Toyota is three years newer, but the Honda
• 33:00
  Speaker 4: is better with lane keep assistan things along those lines. So,
• 33:03
  Speaker 4: but they've been catching up on that stuff pretty rapidly,
• 33:06
  Speaker 4: and so I don't know, I see a pretty good
• 33:09
  Speaker 4: path forward for Toyota here when it comes to the
• 33:11
  Speaker 4: US auto market, at least. I don't know about foreign
• 33:14
  Speaker 4: auto markets quite as well. There they face a lot
• 33:16
  Speaker 4: more competition from China. But here in the US, man,
• 33:20
  Speaker 4: I don't see a lot of other companies doing what
• 33:22
  Speaker 4: they're doing.
• 33:22
  Speaker 1: No.
• 33:23
  Speaker 3: I mean again, they're two best selling models now, the
• 33:25
  Speaker 3: Rev four and the Camera are both gonna be hybrid
• 33:28
  Speaker 3: only as of next year, and they're gonna just they're
• 33:31
  Speaker 3: gonna crank through sales because again, you look at it,
• 33:34
  Speaker 3: and again, they're not your grandfather's prius. Sure you know,
• 33:39
  Speaker 3: it's like, okay, these are still like mainstream vehicles in
• 33:44
  Speaker 3: normal shapes and configurations that can get forty to fifty
• 33:48
  Speaker 3: five miles a gallon and still do all the stuff
• 33:51
  Speaker 3: that people want to do in them. And so that's like,
• 33:53
  Speaker 3: that's it's like the whole thing. And they're doing it
• 33:56
  Speaker 3: in a way now because they're against streamlining their production capacity,
• 34:01
  Speaker 3: they're doing it in a way where the additional cost
• 34:03
  Speaker 3: is not significant relative to what it would have been
• 34:06
  Speaker 3: for just an internal combustion engine vehicle because it's just, hey,
• 34:11
  Speaker 3: we're only producing hybrids and so we don't have as
• 34:14
  Speaker 3: much additional cost for the new configuration because we're making.
• 34:18
  Speaker 2: Four hundred thousand a year of this, not just one
• 34:20
  Speaker 2: hundred thousand.
• 34:21
  Speaker 4: But I'll tell you, I think American car company CEOs
• 34:24
  Speaker 4: have some tough questions to answer about why they.
• 34:29
  Speaker 3: Really they're not tough questions in my opinion, Like they
• 34:33
  Speaker 3: they saw all the excitement about EV's and what was
• 34:35
  Speaker 3: going on with Tesla's stock price, and they wanted to
• 34:38
  Speaker 3: be part of it. Like I understand the incentives at
• 34:40
  Speaker 3: the time, Yeah, and I think it makes sense, Like
• 34:42
  Speaker 3: I understand why they did what they did. It doesn't
• 34:45
  Speaker 3: mean it was a good decision, but yeah, I think
• 34:47
  Speaker 3: and I mean why like they got to that point?
• 34:50
  Speaker 2: What was it?
• 34:50
  Speaker 4: Was it general motors that invested in like the Panasonic
• 34:53
  Speaker 4: battery factory that they had to sell off a couple
• 34:55
  Speaker 4: of years that there were some serious dollars at play
• 34:58
  Speaker 4: here and they really be kind of bought into a
• 35:02
  Speaker 4: bunch of investor and you know, public enthusiasm that I
• 35:07
  Speaker 4: think they should have taken a much harder look at
• 35:10
  Speaker 4: in hindsight.
• 35:11
  Speaker 3: Yeah, I would. Uh, I would agree. Let's see, so
• 35:15
  Speaker 3: we covered Toyota. Uh, let's see build a bearn No,
• 35:20
  Speaker 3: I want to talk about Michael Burry. Yeah, because everyone
• 35:22
  Speaker 3: loves to talk about Michael Burry because they've seen the
• 35:24
  Speaker 3: big short and so like people just like, for whatever reason,
• 35:29
  Speaker 3: it's just like something about him, Like everyone just loves
• 35:32
  Speaker 3: to follow his investment moves, like he's never been wrong.
• 35:35
  Speaker 3: And granted, he's way smarter than I ever will be.
• 35:38
  Speaker 3: He's made more money in the investing world than I
• 35:40
  Speaker 3: ever will and so I'm not poopooing him, but it's
• 35:42
  Speaker 3: just like, okay, like he's still just a guy. It's
• 35:45
  Speaker 3: it's just he's you know, he's human. He's not perfect.
• 35:49
  Speaker 2: Uh.
• 35:49
  Speaker 3: He is shutting his hedge fund down. He's deregistered his
• 35:52
  Speaker 3: hedge fund and sent a letter out basically saying that
• 35:56
  Speaker 3: he is moving on. And I I think when when
• 36:01
  Speaker 3: looking at this, the comparison that I've seen, you know,
• 36:07
  Speaker 3: tossed about, just because again Burry's hedge fund, by all accounts,
• 36:10
  Speaker 3: has not done great over the last few years, just
• 36:13
  Speaker 3: because he's kind of seen like things looking a little bubbly,
• 36:16
  Speaker 3: and he's made some big out bets on the other
• 36:18
  Speaker 3: side of that that haven't paid off. And the thing
• 36:23
  Speaker 3: I've seen like bandied about in terms of what this
• 36:25
  Speaker 3: could signal, and again it's gonna depend on where markets
• 36:28
  Speaker 3: go the next several years. But Julian Robertson who founded
• 36:34
  Speaker 3: Tiger Investment whatever the heck was called back in back
• 36:38
  Speaker 3: in the eighties, like again probably like the basically the
• 36:42
  Speaker 3: hedge fund of hedge funds for the eighties and nineties,
• 36:44
  Speaker 3: Tiger Management was the official name of it. They returned
• 36:48
  Speaker 3: to like thirty percent a year net of fees for
• 36:51
  Speaker 3: a twenty year period. It was insane, like the only
• 36:54
  Speaker 3: hedge fund that comes close is Renaissance Macro, Renaissance Capital,
• 36:58
  Speaker 3: Renaissance Technology, and like it's just insane, Like what a
• 37:03
  Speaker 3: couple of these guys have done. But Robertson closed down
• 37:05
  Speaker 3: Tiger in two thousand was basically like, I've gotten bludgeoned
• 37:09
  Speaker 3: betting against the tech bubble in ninety nine and early
• 37:12
  Speaker 3: two thousand.
• 37:12
  Speaker 2: I can't do it anymore.
• 37:14
  Speaker 3: And basically like right after he called it quits, the
• 37:17
  Speaker 3: tech bubble popped. And so the question that like it
• 37:21
  Speaker 3: has been raised and that I wonder is okay, So
• 37:24
  Speaker 3: Burry's doing the same thing here. And granted Burry does
• 37:26
  Speaker 3: not have the track record that Robertson does. Again, Robertson
• 37:29
  Speaker 3: I look at as probably one of the two or
• 37:32
  Speaker 3: three best hedge fund managers in history. And that's just
• 37:35
  Speaker 3: not Burry. Burry had you know, one great trade that
• 37:37
  Speaker 3: made an awful lot of money, and the rest of
• 37:39
  Speaker 3: his career has been fine but not you know, amazing.
• 37:44
  Speaker 3: But you look at this, you do kind of get
• 37:45
  Speaker 3: that echo and you wonder, ah, like he's gotten beaten
• 37:49
  Speaker 3: up for the last couple of years, same way that
• 37:51
  Speaker 3: Robertson did.
• 37:52
  Speaker 2: What if like his exit is basically, you know, he
• 37:55
  Speaker 2: just he just.
• 37:56
  Speaker 3: Couldn't hold on long enough Mark, you know, so it's
• 38:00
  Speaker 3: might find that interesting an interesting comparison. Yeah, other stories
• 38:03
  Speaker 3: why Americans are giving up on Sweet Green because it's
• 38:06
  Speaker 3: about to salad. It's really highly priced salad, and there's
• 38:09
  Speaker 3: more competition coming into the space in the form of companies.
• 38:12
  Speaker 2: Like just Salad Done. Okay, glad we covered Thatt what
• 38:16
  Speaker 2: else we got?
• 38:18
  Speaker 4: Markets are in strongly negative territories or close out the show.
• 38:21
  Speaker 4: The Dow is off four hundred and eighty one points,
• 38:23
  Speaker 4: a full percentage point SMP off about eighty eight points,
• 38:26
  Speaker 4: more than one and a quarter than NASDAC leading the
• 38:28
  Speaker 4: way down. As we close out the show today on
• 38:31
  Speaker 4: the day of the government reopening, four hundred and fifty
• 38:33
  Speaker 4: points one point nine percent. We will have a full
• 38:36
  Speaker 4: recap and more for you tomorrow a Friday here on
• 38:39
  Speaker 4: the Financial Exchange