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Warner Bros Plans to Reject Paramount Offer Next Week · Bloomberg Intelligence

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  Speaker 2: Warner Brothers Discovery, Here we go again. Folks plans to
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  Speaker 2: once again reject a takeover bid from Paramount Skydance for More.
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  Speaker 3: Rejoined by Luke Stillman.
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  Speaker 2: Luke is a managing director ed Madison and Wall. How's
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  Speaker 2: this thing going to play out here? It feels like
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  Speaker 2: Paramount's got to come in with a higher bid at
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  Speaker 2: some point.
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  Speaker 4: Yeah, it's it's an interesting development. So Warner essentially rejecting
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  Speaker 4: Paramounts barely improved offer same thirty dollars a share, offer
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  Speaker 4: a few extra guarantees. If they want something to move
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  Speaker 4: in this discussion, I think it's going to have to
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  Speaker 4: move up to thirty four to thirty five five dollars
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  Speaker 4: a share. We're in an interesting situation here where it's
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  Speaker 4: hard to tell which of these bids is really the
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  Speaker 4: higher value one, because of course they're going after different assets.
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  Speaker 4: Netflix wants just the studio and streaming assets. Paramount wants everything,
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  Speaker 4: so understandable in that uncertainty that Warner's leaning towards Netflix,
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  Speaker 4: the much larger company. What I think is interesting about
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  Speaker 4: this is not so much the takeover commentary, but really
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  Speaker 4: what it says about the reset that's happening in the
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  Speaker 4: TV space, distribution shifting, monetization under pressure. So all this
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  Speaker 4: consolidation is a symptom of that pressure, not the cause
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  Speaker 4: of it.
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  Speaker 3: What is these strategic reason that Paramount hasn't raised its
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  Speaker 3: offer already? I mean, when I saw that Warner Brothers
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  Speaker 3: was expected to reject the bid, I immediately look to NSS. Right, No, duh,
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  Speaker 3: they're going to reject because they haven't offered any more money.
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  Speaker 3: Just because you say Ellison's good for it, and the
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  Speaker 3: breakup fees a little bit higher, that's not going to
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  Speaker 3: move the needle. Why don't they say, okay, it's thirty
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  Speaker 3: three dollars a share.
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  Speaker 4: Well, I think there's plenty of time here. I looked
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  Speaker 4: at betting markets the other day. There's a decent shot,
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  Speaker 4: according to them, that this drags on into twenty twenty seven.
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  Speaker 4: So I think there's five or ten new developments that
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  Speaker 4: we're going to get over the coming days and months
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  Speaker 4: and plenty of time to potentially raise the.
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  Speaker 3: Oh wait, it's interesting you bring up betting markets and
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  Speaker 3: more and more. That's an indicator that people care about.
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  Speaker 3: And I wonder if it's because does David Zaslov put
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  Speaker 3: down a bet? You know, does Larry Ellison put down
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  Speaker 3: a bet? Does you know? Do people in the know
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  Speaker 3: you think play in these betting markets?
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  Speaker 4: Well, you know, I don't know if people in the
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  Speaker 4: know are playing in the betting markets, but certainly.
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  Speaker 3: The thing is Looke, you know more than everybody else
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  Speaker 3: about this stuff. Right, So when you're looking at the
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  Speaker 3: betting markets, like, why do you care what these chumps
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  Speaker 3: are putting down a how market? That's a question how
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  Speaker 3: deep that market is?
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  Speaker 4: Yeah?
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  Speaker 3: Like how representative are those betting markets? Yeah?
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  Speaker 4: Well, look, there's lots of moving parts in this takeover battle,
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  Speaker 4: regulatory issues, political connections. So again, I don't think the
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  Speaker 4: story's over there when.
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  Speaker 3: The Trump administration would be playing on polymarkets.
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  Speaker 4: Crazy to think.
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  Speaker 3: So, So, Luke, how about this. I'm shocked to hear
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  Speaker 3: that there is gambling going on in this place.
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  Speaker 2: Looking at this deal, it feels like it's a nice
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  Speaker 2: to have for Netflix, but it's kind of a must
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  Speaker 2: have for Paramount because if Paramount doesn't get this deal,
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  Speaker 2: I don't know what they do. So how do you
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  Speaker 2: think about that? I mean, if I'm Paramoun, I feel
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  Speaker 2: like I really got a stretch to get this steal.
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  Speaker 4: Part of the problem in the whole TV space is
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  Speaker 4: really the economics don't work anymore. So we're at something
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  Speaker 4: we call the PayTV singularity right now. In four Q
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  Speaker 4: twenty five is when fewer than half of the households
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  Speaker 4: in the US have a PayTV subscription. That's down from
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  Speaker 4: nearly ninety percent in twenty ten, and the economics just
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  Speaker 4: don't work anymore. Consumers want video more than they ever have.
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  Speaker 4: They spend more on video than they ever have, doing
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  Speaker 4: it in a different way, and a lot of the
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  Speaker 4: gains aren't going to the streaming platforms of a Paramount.
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  Speaker 4: They're going to a Netflix or an Amazon or an Apple.
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  Speaker 3: Do consumers care about I go to the movies all
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  Speaker 3: the time, but I'm old, right, and that's because I
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  Speaker 3: want to do something with my wife where I don't
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  Speaker 3: have to talk to her. Do consumers care about going
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  Speaker 3: to the theater? Because if Netflix wins. The worry is that
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  Speaker 3: we're going to see the end of the big screen business.
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  Speaker 4: I mean theater bucks office receipts still haven't really recovered
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  Speaker 4: since COVID. We haven't seen a new high yet, even
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  Speaker 4: though every year we expect everyone forecasts a new high.
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  Speaker 4: I think part of it is that people underestimate how
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  Speaker 4: engaged consumers are with streaming platforms. Every time we see
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  Speaker 4: a price increase or a password crackdown, everyone has a
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  Speaker 4: discussion about is this too much? Is this where consumers
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  Speaker 4: say it's too expensive, But consumers aren't trying to save
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  Speaker 4: money by cutting their cable subscription. We're just moving that
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  Speaker 4: money over and so for a Netflix, HBO or another
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  Speaker 4: combination you know, thirty forty fifty dollars streaming bundles is
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  Speaker 4: there's plenty of runway for price increasing.
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  Speaker 2: What's amazing here is the value being ascribed by various
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  Speaker 2: players in the marketplace for the cable networks business of
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  Speaker 2: Warner Brothers Discovery. Those businesses used to trade a ten
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  Speaker 2: and twelve times IBADA. They're being valued today around three
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  Speaker 2: or four times EBITDA.
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  Speaker 3: Three to four. Is that the Netflix valuation of the
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  Speaker 3: paramount evaluation against the problem is those are pretty far apart.
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  Speaker 2: Yes, somewhere in between Bloomberg Intelligence ETHA values is at
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  Speaker 2: about four dollars per share. That's about four four and
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  Speaker 2: a half five times EBITDA, less than half.
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  Speaker 3: Of what they were, you know, ten years ago.
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  Speaker 4: And part of the problem is the TV ad business
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  Speaker 4: is just in permanent structural decline. So it's this seventy
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  Speaker 4: billion dollar, slowly melting iceberg of value that is not recovering.
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  Speaker 4: As much as broadcasters want to brag about their streaming
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  Speaker 4: ad growth, it's just cannibalizing the linear dollars. It's not
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  Speaker 4: growing the pot.
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  Speaker 3: By the way, can you weigh in on the trade
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  Speaker 3: desk issue. We were just talking with Isabelle Lee about
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  Speaker 3: why is trade desk doing so badly? It's sound seventy
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  Speaker 3: percent year to date, and to my mind, that's an
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  Speaker 3: incredibly value business valuable business model.
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  Speaker 5: Right.
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  Speaker 3: You want to be able to aim your ads at
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  Speaker 3: the correct viewers.
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  Speaker 4: Yeah, we just launched a programmatic ad forecast and it
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  Speaker 4: is a growing space. The problem for the trade desk
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  Speaker 4: is their take rate is really high and there's new competitions,
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  Speaker 4: so potentially some challenges there. Not to mention the open Internet,
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  Speaker 4: like the TV marketplace is struggling at least compared to
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  Speaker 4: big search platforms and big social media platforms.
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  Speaker 2: What's the AI impact on advertising, you guys think these days?
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  Speaker 4: We think the AI impact is not much for search.
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  Speaker 4: We don't think it erodes the search business.
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  Speaker 2: Well as I could have made an argument that's the
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  Speaker 2: death knell of search, but it hasn't been the case.
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  Speaker 4: It hasn't been the case, and half of search comes
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  Speaker 4: from small businesses. They're never going to move to a
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  Speaker 4: chat GPT surge for years, They're going to stick with Google.
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  Speaker 4: It's not the death knell for social What we're worried
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  Speaker 4: about is the open Internet long tail of publishers, where
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  Speaker 4: we think this completely undermines their business. And what they
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  Speaker 4: should do is they should license their content as fast
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  Speaker 4: and as often as possible with these AI platforms and
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  Speaker 4: take that money and pivot to event businesses, to subscription
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  Speaker 4: businesses and move away from advertising.
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  Speaker 3: What about on the provider side. My buddy Mark Douglass
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  Speaker 3: runs a company called Mountain Right. They got together with
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  Speaker 3: Ryan Reynolds on the creative side, and now they have
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  Speaker 3: an AI program that allows small businesses to create their
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  Speaker 3: own advertisement and then aim it at the right people
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  Speaker 3: in their region. Yes, seems like it should be a
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  Speaker 3: slam dunk.
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  Speaker 4: Small business CTV B to B CTV. These are a
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  Speaker 4: lot of spaces that didn't really exist a few years ago,
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  Speaker 4: and now because of some of those AI tools, the
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  Speaker 4: creative barrier has dropped much lower. And everybody wants targeted advertising.
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  Speaker 4: Everyone wants targeted on TV. And so those are definitely
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  Speaker 4: some growth areas. But overall, if you zoom out to
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  Speaker 4: the total TV landscape, it's not growing. It's not growing
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  Speaker 4: the pie. And that's why we're seeing consolidation because when
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  Speaker 4: the pie stops growing, everyone starts battling over taking share.
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  Speaker 2: You know who gets paid here, David Zaslov, the CEO
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  Speaker 2: of Warner Brothers Discovery.
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  Speaker 3: Yeah, he looks like a genius right now, does it? Does?
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  Speaker 3: I mean? And he looks like a defender of the
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  Speaker 3: creative community, Like he's starting to look like a man
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  Speaker 3: of the people.
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  Speaker 2: You know, the best trades in media over the last
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  Speaker 2: fifteen years have been sales. I mean, Larry May's in
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  Speaker 2: the radio business, Rupert Murdock and the big diversified you
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  Speaker 2: know media empire. Now maybe you know the Zaslov and
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  Speaker 2: John Malone, all those guys Boom they said had enough.
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  Speaker 2: Now it's up for some of the new technologies. When
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  Speaker 2: does Google spin out YouTube?
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  Speaker 3: Would that be great?
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  Speaker 4: The thing about YouTube, I mean yeah, I mean YouTube
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  Speaker 4: is I think YouTube is core to their business. The
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  Speaker 4: thing is, though, you know, advertisers don't think of YouTube
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  Speaker 4: as TV, but consumers think of YouTube as TV. Consumers
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  Speaker 4: even think of social video as TV more and more so.
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  Speaker 4: If you look at how TV broadcasters are positioning themselves,
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  Speaker 4: they're still going after the old story. We have brand safe,
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  Speaker 4: the most premium content, the live sports you want. Digital
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  Speaker 4: platforms have that. Thursday Night football is on Amazon. The
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  Speaker 4: oscars is going to YouTube. You know, the landscape is shifting,
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  Speaker 4: and we're not seeing the kind of investments in content
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  Speaker 4: or investments in global solutions that we think will need
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  Speaker 4: to see for those to turn the business around.
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  Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch US Live
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  Speaker 3: I obviously the driver of last year, of the year
• 10:02
  Speaker 3: before and really the year before that, driving demand for
• 10:07
  Speaker 3: cybersecurity as well as more industries adopt the technology, and
• 10:11
  Speaker 3: Bloomberg Intelligence says expect more cyber spending and consolidation in
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  Speaker 3: the sector. Let's discuss that with Teresa Payton. She's the
• 10:19
  Speaker 3: CEO of Fortalist Solution. She was the White House Chief
• 10:23
  Speaker 3: Information Officer, the CIO of the White House under George W. Bush. Teresa,
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  Speaker 3: thanks so much for joining us. How important do you
• 10:33
  Speaker 3: think cybersecurity will be in twenty twenty six. I feel
• 10:36
  Speaker 3: like I just can't overstate the importance of cybersecurity in
• 10:40
  Speaker 3: AI world.
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  Speaker 6: Yeah, thanks for having me here on a happy New
• 10:44
  Speaker 6: Year's Eve, and yes, I'm predicting everyone needs to get
• 10:48
  Speaker 6: ready for a new wave of attax that we have
• 10:51
  Speaker 6: never seen before, because cyber criminals. As we get better
• 10:54
  Speaker 6: at cybersecurity, they don't give up and suddenly say, gosh,
• 10:58
  Speaker 6: maybe I should be a good.
• 10:59
  Speaker 7: Person because they've made it harder for me.
• 11:01
  Speaker 6: Now they just up their game, and so be prepared
• 11:05
  Speaker 6: with AI with I think quantum computing could be available
• 11:09
  Speaker 6: by the end of twenty twenty six and quantum computing
• 11:13
  Speaker 6: is going to be incredible for solving the previously unsolvable problems.
• 11:18
  Speaker 6: But that also means for cyber criminals breaking encryption.
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  Speaker 3: So is AI is quantum computing.
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  Speaker 2: I'm not sure if it's friend or foe here in
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  Speaker 2: your world of cyber just you know, technical security.
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  Speaker 4: How do you think about it?
• 11:33
  Speaker 6: Well as sort of you know, for mankind, quantum computing,
• 11:37
  Speaker 6: if we do it right and get it right on
• 11:39
  Speaker 6: sort of the environmental impacts and issues, is going to
• 11:42
  Speaker 6: be incredible. It's going to allow us to solve problems
• 11:44
  Speaker 6: that we haven't solved before because massive amounts of data
• 11:47
  Speaker 6: volumes mathematical problems, and we truly will see breakthroughs I
• 11:52
  Speaker 6: believe in healthcare, protecting the environment, and a lot of
• 11:56
  Speaker 6: other issues on everybody's minds.
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  Speaker 7: However, in the wrong hands, you know, it's.
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  Speaker 6: A tool, and so the tool is neither good nor bad,
• 12:04
  Speaker 6: it's just how is it wielded. And in the wrong hands,
• 12:07
  Speaker 6: this quantum computing tool could be used to sort of
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  Speaker 6: do decryption on previously stolen data that has been encrypted
• 12:18
  Speaker 6: based on yesterday's and today's standards, But with quantum computing,
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  Speaker 6: it's no longer safe So if you think about nation
• 12:25
  Speaker 6: states and cyber criminal syndicates who have been stealing data
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  Speaker 6: for the last ten to twenty years, and people have said, gosh, they're.
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  Speaker 7: Just sitting on it. They haven't done anything with it.
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  Speaker 6: When quantum computing comes, they may actually be able to
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  Speaker 6: weaponize it.
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  Speaker 3: What is that? A lot of people talking about quantum
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  Speaker 3: computing these days. I'm watching the stocks. Most of them
• 12:44
  Speaker 3: have not done well this year, but it's coming, right.
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  Speaker 3: I remember when Jensen Wong said it's fifteen years out,
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  Speaker 3: and now he was like, well, maybe more like five
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  Speaker 3: to ten. Yeah.
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  Speaker 6: Based on what I'm seeing, there's been some incredible breakthroughs
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  Speaker 6: and several labs around the world, and this is a
• 13:03
  Speaker 6: global race as to who's.
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  Speaker 7: Going to figure out quantum computing first.
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  Speaker 6: And based on what I'm seeing, I really do believe
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  Speaker 6: it will be commercially available by the end of twenty
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  Speaker 6: twenty six. We've been saying in the next two to
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  Speaker 6: three years for over three years now, so I really
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  Speaker 6: do believe, based on what I'm seeing coming out out
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  Speaker 6: of the lab reports, it will be available, probably only
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  Speaker 6: to those with the deepest pockets.
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  Speaker 7: We'll be able to afford.
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  Speaker 6: Quantum computing at the end of twenty twenty six, and
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  Speaker 6: then we'll see it become more commercially available twenty twenty seven,
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  Speaker 6: twenty twenty eight.
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  Speaker 3: I should amend my issue with surveillance correction. Okay, I'm
• 13:37
  Speaker 3: looking at the Defiance quantum ETF and it actually is
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  Speaker 3: up thirty seven and a half percent eight in terms
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  Speaker 3: of total return, so it has done quite.
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  Speaker 2: Well, Teresa, As we think, here, what are the risks
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  Speaker 2: that we're not even thinking about yet? I mean, it
• 13:51
  Speaker 2: just seems like every time I see a hacking story,
• 13:53
  Speaker 2: it's like I never even would have thought of that,
• 13:55
  Speaker 2: but there it is.
• 13:56
  Speaker 3: Here.
• 13:56
  Speaker 2: Are there some things that are really worrying in the
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  Speaker 2: back of your mind?
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  Speaker 6: Yeah, I think if you sort of look at my
• 14:03
  Speaker 6: top five list of things I'm worried about going into
• 14:05
  Speaker 6: twenty twenty six, one is around the various AI implementations
• 14:10
  Speaker 6: that have been happening. The lack of governance and guardrails
• 14:14
  Speaker 6: also means that things are going to market and it
• 14:17
  Speaker 6: may not be secure by design, and we're going to
• 14:19
  Speaker 6: find out the hard way where those security is lacking
• 14:24
  Speaker 6: in these different platforms. I think the second thing that
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  Speaker 6: I'm concerned about is again AI is going to be
• 14:29
  Speaker 6: an incredible tool, a great productivity enhancement for a lot
• 14:33
  Speaker 6: of businesses. It's going to democratize data so you no
• 14:36
  Speaker 6: longer have to be the largest company with the best
• 14:38
  Speaker 6: data scientists now to be able to actually leverage and
• 14:42
  Speaker 6: monetize your own data. But with that powerful tool comes responsibilities,
• 14:49
  Speaker 6: and it could end up in the hands We've already
• 14:51
  Speaker 6: seen this year of cyber criminal syndicates trying to use
• 14:54
  Speaker 6: it to create malware, to create ransomware, to create different
• 14:59
  Speaker 6: types of tack vectors, and take advantage of where we've
• 15:03
  Speaker 6: missed out on secure by design in our software stack.
• 15:06
  Speaker 3: Hey, you serve Teresa in a Republican administration as CIO
• 15:10
  Speaker 3: under President George W. Bush. What do you think of
• 15:14
  Speaker 3: this Republican administration and it's uh and its effects on cybersecurity?
• 15:23
  Speaker 6: Well, you know, I'd like to think that regardless of party,
• 15:27
  Speaker 6: that the United States has dedicated public servants and all
• 15:30
  Speaker 6: the departments and agencies.
• 15:32
  Speaker 7: Who are very focused on security by design.
• 15:34
  Speaker 3: Sometimes we fire all those dedicated public servants and replace
• 15:37
  Speaker 3: them with Fox News hosts. So what do you think there?
• 15:39
  Speaker 3: How do you how would you grade them?
• 15:42
  Speaker 6: Well, what I would say is I would focus on
• 15:46
  Speaker 6: the cybersecurity.
• 15:47
  Speaker 7: Strategy for the administration.
• 15:49
  Speaker 6: If I were advising them, I would tell them, you
• 15:52
  Speaker 6: need to give a clear and consistent message. You need
• 15:55
  Speaker 6: to let people know who's going to be in charge.
• 15:57
  Speaker 6: We still, you know, have an acting situation over at
• 16:01
  Speaker 6: DHS with cybersecurity, and I would say, the things that
• 16:04
  Speaker 6: you are keeping that are good, and then the things
• 16:06
  Speaker 6: that you are changing to reflect the changes in our
• 16:09
  Speaker 6: modern technology infrastructure. A lot of the things that we
• 16:13
  Speaker 6: are doing the last ten to fifteen years are not necessarily.
• 16:17
  Speaker 7: Going to serve us.
• 16:18
  Speaker 6: So it has been a very challenging time for many
• 16:20
  Speaker 6: of the people that have been impacted by the layoffs
• 16:23
  Speaker 6: and government. But we need to look at an opportunity
• 16:26
  Speaker 6: to say who wants to do public service and what
• 16:29
  Speaker 6: do we need to do next with all of this
• 16:31
  Speaker 6: new technology that's being implemented, not just in the departments
• 16:35
  Speaker 6: and agencies, but also in our critical infrastructure, which really
• 16:39
  Speaker 6: needs attention.
• 16:41
  Speaker 3: Stay with us or from Bloomberg Intelligence Coming up after.
• 16:44
  Speaker 1: This, you're listening to the Bloomberg Intelligence podcast. Catch us
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• 17:02
  Speaker 2: This week marks the end of an era for the
• 17:05
  Speaker 2: man that many regard as the world's greatest investor. Greg Abel,
• 17:09
  Speaker 2: will succeed Warren Buffett Bershire Hathaway in the new year,
• 17:13
  Speaker 2: taking control of a one trillion dollar conglomerate with more
• 17:16
  Speaker 2: than three hundred and fifty billion dollars in cash on hand.
• 17:19
  Speaker 3: I don't know what you do with that.
• 17:20
  Speaker 2: Let's discuss with CFR, a research analys Kathy Seaffort. Kathy,
• 17:24
  Speaker 2: let's start with that big slug of cash that's on
• 17:26
  Speaker 2: the balance sheet. It's been there for a long time.
• 17:29
  Speaker 2: They've shown an inability to put that to work here.
• 17:33
  Speaker 2: What do you think the plan might be under mister Abel.
• 17:37
  Speaker 5: Well, I think this year is going to be a
• 17:41
  Speaker 5: transitional year for the company under Greg Abel, and I
• 17:44
  Speaker 5: think some of the steps he's recently taken have sort
• 17:47
  Speaker 5: of shown that with regard to the cash pile, you know,
• 17:51
  Speaker 5: some of that cash is being held to support insurance liability.
• 17:57
  Speaker 5: So I don't think investors should think that that cash
• 18:01
  Speaker 5: is all going to be deployed into ask you know,
• 18:03
  Speaker 5: into acquisitions or what have you, you know, I know,
• 18:07
  Speaker 5: given Warren's investment style and value oriented approach, he the
• 18:13
  Speaker 5: sense that I had was he was sort of frustrated
• 18:16
  Speaker 5: with valuations. He was having a hard time finding, you know,
• 18:20
  Speaker 5: good uses for that cash. My senses, as we head
• 18:24
  Speaker 5: into twenty twenty six, there may be some pressure on
• 18:28
  Speaker 5: greg Able to potentially pay a cash dividend with that
• 18:32
  Speaker 5: or possibly put forth a more structured share buyback program.
• 18:40
  Speaker 5: If they're not going to deploy it into.
• 18:42
  Speaker 3: Acquisitions, Well, what could they buy with that much cash?
• 18:48
  Speaker 3: Is there anything that you could think of if if
• 18:51
  Speaker 3: you were in charge, that you would try and pick up.
• 18:54
  Speaker 5: I don't think my compliance folks would like me to speculate.
• 18:57
  Speaker 5: I know who they I know who they might buy.
• 19:00
  Speaker 5: But you know, I think if you look at the
• 19:02
  Speaker 5: Berkshare operating model and you look at the framework, the
• 19:06
  Speaker 5: investment portfolio is sort of barbelled between financial services and technology,
• 19:11
  Speaker 5: and those are names that they like to own as
• 19:14
  Speaker 5: an equity investor, not necessarily as an operator. So, you know,
• 19:19
  Speaker 5: I think if we look at greg Abel's background in
• 19:22
  Speaker 5: energy and industrials, my senses that he may tilt in
• 19:26
  Speaker 5: favor of those businesses, which makes sense, given what's going
• 19:31
  Speaker 5: on with some of the industrial and energy build out
• 19:35
  Speaker 5: to support AI. And then I think the other area
• 19:38
  Speaker 5: that probably makes sense to look at as the insurance space.
• 19:42
  Speaker 5: It's a significant business segment for berkshare, and insurance pricing
• 19:48
  Speaker 5: is softening, and when that happens, typically you see an
• 19:53
  Speaker 5: increase in m and a activity. They have in the
• 19:56
  Speaker 5: past added to their stable of companies through acquisitions. I
• 20:00
  Speaker 5: wouldn't be surprised if they do that going forward.
• 20:03
  Speaker 2: As a non Warren Buffett Accolyte, my first question would
• 20:07
  Speaker 2: be he can't find any investments, that's clear. Why does
• 20:12
  Speaker 2: a company not return that cash to shareholders via that
• 20:15
  Speaker 2: dividends and or buybacks.
• 20:18
  Speaker 5: That's a good question, and my sense is that Warren
• 20:21
  Speaker 5: Buffett was given a certain level of grace and leeway
• 20:26
  Speaker 5: that Greg may not be given, and there may be
• 20:30
  Speaker 5: a cohort of investors who do agitate for a return
• 20:35
  Speaker 5: of some of that capital. I would not be surprised
• 20:39
  Speaker 5: to see.
• 20:39
  Speaker 3: That you're getting some blowback in the live chat now, Paul,
• 20:42
  Speaker 3: I know, and you're a dividend guy, I get it.
• 20:45
  Speaker 3: But these investors on that are watching us on YouTube
• 20:49
  Speaker 3: say they better not create a dividend completely wipes out
• 20:51
  Speaker 3: a segment of investors. We do not hold Berkshire looking
• 20:55
  Speaker 3: for a dividend. I invest in Berkshire because they're better
• 20:57
  Speaker 3: with money than I am, and they make some good
• 21:00
  Speaker 3: points here. So, Kathy, you know, I guess a buyback
• 21:06
  Speaker 3: makes more sense if you're going to try and return cash, right,
• 21:08
  Speaker 3: if you think Berkshire shares are undervalued, well, but.
• 21:11
  Speaker 5: That's the interesting thing is that they haven't bought back
• 21:14
  Speaker 5: any shares in over a year.
• 21:15
  Speaker 3: They didn't buy back.
• 21:16
  Speaker 5: Any shares this year, and so not buying back shares,
• 21:21
  Speaker 5: you have a situation where I believe the Warren Buffett
• 21:25
  Speaker 5: premium is being extracted from the stock. There is not
• 21:32
  Speaker 5: necessarily a significant acquisition plan out there. And then the
• 21:36
  Speaker 5: other pressure is a lot of that cash has invested
• 21:39
  Speaker 5: in treasury securities, and if treasury yields continue their current trend,
• 21:44
  Speaker 5: we would likely see investment income coming under some pressure. So,
• 21:48
  Speaker 5: you know, there may be I mean, maybe not the
• 21:50
  Speaker 5: people on the Bloomberg chat room, but there may be
• 21:53
  Speaker 5: some large pension funds holding who are not on the
• 21:57
  Speaker 5: Bloomberg chat room who may have a different feeling, you know,
• 22:00
  Speaker 5: where the company is given the position of the company
• 22:03
  Speaker 5: and given its growth prospects, which have not been particularly stellar,
• 22:08
  Speaker 5: particularly on the top line.
• 22:11
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