DOJ's Google Breakup Plan, Nvidia's Earnings, and Comcast's Cable Spin-off AI transcript and summary - episode of podcast Pivot
Go to PodExtra AI's episode page (DOJ's Google Breakup Plan, Nvidia's Earnings, and Comcast's Cable Spin-off) to play and view complete AI-processed content: summary, mindmap, topics, takeaways, transcript, keywords and highlights.
Go to PodExtra AI's podcast page (Pivot) to view the AI-processed content of all episodes of this podcast.
View full AI transcripts and summaries of all podcast episodes on the blog: Pivot
Episode: DOJ's Google Breakup Plan, Nvidia's Earnings, and Comcast's Cable Spin-off
Author: New York Magazine
Duration: 01:13:38
Episode Shownotes
Kara and Scott discuss Nvidia's latest blockbuster earnings, the DOJ's proposal that Google sell its Chrome browser, and Comcast's plan to spin off its cable networks into a new company. Plus, the latest additions to the Trump administration, and Elon Musk and Vivek Rameswamy launch a "Dogecast" podcast. Finally, a
listener mail question about CEO compensation. Follow us on Instagram and Threads at @pivotpodcastofficial. Follow us on Bluesky at @pivotpod.bsky.social. Follow us on TikTok at @pivotpodcast. Send us your questions by calling us at 855-51-PIVOT, or at nymag.com/pivot. Learn more about your ad choices. Visit podcastchoices.com/adchoices
Summary
In this episode of the "Pivot" podcast, Kara Swisher and Scott Galloway discuss diverse topics, including Nvidia's impressive earnings growth, the DOJ's proposed breakup of Google over antitrust concerns, and Comcast's strategic spin-off of its cable networks. They also delve into personal anecdotes concerning Formula One and its business model, the evolving media landscape, and recent appointments under the Trump administration, including Dr. Oz's controversial role. The episode closes with a discussion on CEO compensation, highlighting disparities in earnings and the role of corporate governance.
Go to PodExtra AI's episode page (DOJ's Google Breakup Plan, Nvidia's Earnings, and Comcast's Cable Spin-off) to play and view complete AI-processed content: summary, mindmap, topics, takeaways, transcript, keywords and highlights.
Full Transcript
00:00:00 Speaker_01
Support for this show comes from Crucible Moments, a podcast from Sequoia Capital. We've all had turning points in our lives, where the decisions we make end up having lasting consequences.
00:00:11 Speaker_01
No one knows this better than the founders of some of today's most influential companies.
00:00:16 Speaker_01
And Crucible Moments lets listeners in on the make-or-break events that defined major companies like Dropbox, YouTube, Robinhood, and more, told by the founders themselves. Tune in to Season 2 of Crucible Moments today.
00:00:30 Speaker_01
You can listen at cruciblemoments.com or wherever you listen to podcasts.
00:00:38 Speaker_08
Support for this show comes from Arm. There's only one company at the heart of all the technology that makes podcasts like this one possible. It's the same company that powered the smartphone revolution and is helping define the AI revolution.
00:00:49 Speaker_08
The company is called Arm. Arm designs compute platforms for the biggest companies in the world so they can create silicon and solutions to power global technology.
00:00:58 Speaker_08
ARM became a NASDAQ 100 company in less than a year of its IPO and is proudly NASDAQ listed. AI-enabled ARM CPUs are able to provide the compute platform for the global AI revolution in the years to come. Visit arm.com slash discover to learn more.
00:01:18 Speaker_05
Support for Pivot comes from Huntress. Huntress is one of today's fastest-growing cybersecurity companies.
00:01:23 Speaker_05
Its platform is designed from the ground up to work for small to medium-sized businesses and promises enterprise-grade security driven by the technology, services, and expertise you need to defend against today's cyber threats.
00:01:35 Speaker_05
All at a price that makes sense. Today, it seems like even the most sophomoric hackers can still do a ton of damage to your small business.
00:01:42 Speaker_05
That's why Huntress built a fully managed, highly sophisticated security platform for its customers to guard against potentially devastating threats.
00:01:48 Speaker_05
Plus, you can rest assured knowing that the elite human threat hunters running their 24 by 7 security operations center will offer real protection all day, every day.
00:01:58 Speaker_05
If you want cutting-edge cybersecurity backed by experts who monitor, investigate, and respond to threats with unmatched precision, you can visit Huntress.com to learn more and start your free trial.
00:02:21 Speaker_08
Hi, everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.
00:02:25 Speaker_05
And I'm Scott Galloway.
00:02:26 Speaker_08
Where are you? Where are you, Scott?
00:02:27 Speaker_05
I am at my favorite second home. I'm at the Beverly Hills Hotel.
00:02:32 Speaker_08
Yeah, yeah.
00:02:33 Speaker_05
And I was showing, before you showed up, 17 minutes late, I might add.
00:02:36 Speaker_08
Thank you. I know, I know.
00:02:38 Speaker_05
I was showing Taylor, our 14-year-old producer, something called, see this thing? We used to print news on dead trees in the old news. You're reading a newspaper.
00:02:51 Speaker_05
I just want to read everything on the front page from what is arguably the champion of the reflection or the ultimate reflection of Western values. The lead story. Yeah. Wildfire risk only growing for Northeast.
00:03:05 Speaker_05
The next one, debating role of trans rights in Harris's loss. Then we go on to Republicans eye Medicaid slashes and work rules. Oh, better yet, grieving Israeli parents weigh freezing dead soldier's sperm. And finally, just to lighten things up,
00:03:20 Speaker_05
Wicked fans, bag seat mates, shush, please. So, we're freezing dead sperm, we're cutting Medicaid, and we can't even enjoy Wicked. No wonder... You asked me why I eat Xanax like they're fucking Skittles. Look at this.
00:03:34 Speaker_05
How am I supposed to respond after reading this every morning? This is the world, literally? Yeah, it's called the news.
00:03:40 Speaker_08
What do you want, a good newspaper? A plane landed in Chicago today, and everybody got their suitcases.
00:03:47 Speaker_05
The fish tacos at the pool are awesome. F1 is this weekend. Somewhere in the world. It's beautiful out.
00:03:53 Speaker_08
I'm in the Equinox right now here in New York, and I have to say I don't dislike it.
00:03:58 Speaker_05
The Equinox Hotel? Yeah, at Hudson Gardens. That means you're top shelf CNN guest.
00:04:05 Speaker_08
That's correct.
00:04:06 Speaker_05
I found out that you get put up at like the fucking Westin or some Joey bag of donuts.
00:04:10 Speaker_08
No, no, the Sheraton.
00:04:11 Speaker_05
Yeah, but if you're top shelf, you get to stay at the Equinox. That's correct. They gave me a choice. I'm sure the egos at CNN don't even register little things like that.
00:04:18 Speaker_08
Well, no, because I am doing something with CNN. I'm doing several things here. One secret project and the other, I'm going to be on the news show with Roy Wood Jr. and Amber Ruffin.
00:04:26 Speaker_05
Don't know any of them. Don't know any of them. They're comics. I just know they're about to get an 80% pay cut.
00:04:30 Speaker_08
No, no, this show is doing okay. They put me here and I mentioned it to a CNN person and they're like, the Equinox? They like knew. They knew. It was so funny. They're like, oh, you got to the Equinox.
00:04:45 Speaker_05
Interesting. I don't know what the one is like in Hudson Yards, but generally speaking, the most beautiful gay man in the world hang out at Equinox.
00:04:52 Speaker_08
It's beautiful. I'm very loving it. And I slept the whole night. Yeah, it's interesting. I like that you like going to F1 and everything else. You're going to have a good time. You'll have a great time.
00:05:00 Speaker_05
Well, I like that you like it, because I'm going to continue to do it.
00:05:03 Speaker_08
I'm going to Miami on Saturday, my jammy. I'm going to my jammy to do the Miami book fair. You're the one that somehow got me hooked up.
00:05:11 Speaker_05
Oh, yeah. I was going to go, but I don't like that smart stuff.
00:05:14 Speaker_08
I know, I know, I know, but I'm selling some books. I'm selling some books. I'm going to my jammy for a minute. Do you know where you're staying? I'm leaving.
00:05:22 Speaker_08
I'm going down and coming back the same night, because Amanda's going to divorce me if I travel anymore. Yeah, so I'm coming back. I'm coming back.
00:05:30 Speaker_05
Number three, how old will number three be and how new will the Subaru be? That's what I want to know.
00:05:36 Speaker_08
I do not have a Subaru anymore. I had one. I loved my Subaru. Yeah.
00:05:40 Speaker_05
Yeah. You have like a Nissan, which is like a mini Subaru.
00:05:43 Speaker_08
No, I have a Kia. Try to keep it straight. I have a Kia hybrid and I have a Chevy Bolt.
00:05:47 Speaker_05
There's so nothing hybrid about you. Hybrid is sort of in the middle, a little of this, a little of that. That just isn't you. You really shouldn't own a hybrid.
00:05:56 Speaker_08
And yet I do. What cars are you going to see at F1?
00:05:59 Speaker_05
Really fast ones.
00:06:00 Speaker_08
You really love this F1 thing, almost more than the soccer stuff.
00:06:04 Speaker_05
Yeah, it's not about the race. I only go for an hour. It's about being in Vegas with friends and it's fabulous and it's fun. We go to the race just, you know, just an excuse.
00:06:12 Speaker_05
But the thing that's unique about, I'm actually in my newsletter now, Mercy No Mouse, I'm writing about F1. They take over a city and it's an interesting thing. It's typically a franchise model where they license F1 to a city.
00:06:25 Speaker_05
The city pays a lot of money to bring in tourism. And then the teams pay a license. It's a great business model. And for the first time, they decided to go vertical and own a race. And they decided to pick Vegas.
00:06:37 Speaker_05
And you think Vegas F1, it would be just an enormous win. I can see why they've decided to own it themselves.
00:06:43 Speaker_08
So it's like McDonald's, they like have franchises in the cities. They have to be, or Ted's or what?
00:06:48 Speaker_05
No, what it's like is the majority of the hotel companies are no longer hotel owners. They have a flag, a reservation system, standards, branding.
00:06:56 Speaker_05
That way a guy like Michael Dell, who wants to have a four seasons hotel in Hawaii, underwrites all the capital costs. And then they just take 8% to 12% and they have standards.
00:07:06 Speaker_05
So the hotel flags now got out of the business of taking capital risk, because one bad hotel can sink everything. And they're just in the business of the flag, and the reservations, and the standards, and the HR, and the marketing.
00:07:17 Speaker_05
And F1 was effectively the same way. They made the money no matter what, whether the thing was successful in a city. And last year was the first F1 in Vegas. And a couple of things happened. One, they vastly overestimated demand.
00:07:31 Speaker_05
The F1 customer in the US is not the same kind of fabulous, wealthy F1 customer in Europe and all over the world. And they overestimated, they were able to sell about 40% of the tickets they initially planned.
00:07:45 Speaker_05
So you had entire grandstands empty because supposedly they just priced it too high. And they just underestimated how difficult it is to fill Las Vegas. Las Vegas has just so many hotel rooms.
00:07:56 Speaker_05
And if you aren't coming for F1, you're not going to come that weekend because One of the cool things about the race is it's it's it's the race is done at night and it's on on the streets Yeah, it's on the strip.
00:08:06 Speaker_05
And so there's great parties and it's fun to watch the race But in terms of an actual economic model, it's been a bit of a disaster so therefore I just thought I'd provide a little insight.
00:08:17 Speaker_08
I understand, but it's growing, correct? I can't tell. I don't know. I wouldn't ever go to an F1 thing.
00:08:22 Speaker_05
I don't think. F1 has hit, I don't want to say it's hit a wall, but it had a huge surge because of the, what's it called, Drive to Survive Netflix show.
00:08:30 Speaker_08
Right, yeah, the shows, yeah.
00:08:31 Speaker_05
But there's a lot of competition and it's sort of, it's hit a bit of a speed bump this year. It's not growing the way it used to and it's the one driver, it's kind of always like a race for second now because the one driver wins every time.
00:08:40 Speaker_05
It's like when Pete Sampras was dominating tennis and we tried to pretend it wasn't really fucking boring and that he wasn't boring. So, but yeah, I'm excited. It's Vegas. It'll be a ton of fun. I have friends coming in from New York.
00:08:51 Speaker_05
So you're just going to parties with cars? Oh, 100%. Okay. They start too late, though. That's the problem.
00:08:55 Speaker_08
Yeah, yeah.
00:08:56 Speaker_05
They start too late. I need to get home and get my colonic and take my edible, watch Murder, She Wrote, and go to sleep.
00:09:02 Speaker_08
I love that scene. That's a beautiful scene to think about. We're going to move to something else.
00:09:05 Speaker_05
Good segue. Outstanding segue.
00:09:08 Speaker_08
I have to think about it.
00:09:10 Speaker_05
That's why they put you up at the Equinox. I'm at the Equinox.
00:09:15 Speaker_08
I think I'll go down to SoulCycle and take a spin. You know, the same owner owns all those things. The guy, that developer who developed Hudson Yards. Hudson Yards, by the way, is like lively. It was lively last night.
00:09:28 Speaker_08
It seemed like everyone thought it was sort of a wasteland, but I gotta say, I don't know. It's hard to get to. It seems very lively over here. Lots of restaurants and everything. I kind of like it.
00:09:36 Speaker_05
That place freaks me out. It is so modern. It feels like one of those places where if a supercomputer gets something wrong and you end up in the wrong elevator, you get off and you wake up without your liver.
00:09:46 Speaker_05
And it gets sold to some wealthy Indian businessman and they're like, but wait, I'm a podcaster.
00:09:52 Speaker_08
It feels like a mall in Hong Kong or Dubai. That's what it feels like.
00:09:56 Speaker_05
My favorite. The two anchor tenants over there when they opened were Neiman Marcus and Brooks Brothers, which both went chapter 11 within a year.
00:10:02 Speaker_08
But they seem to have- I can't figure out if it works over there. I can't either, but I have to say there's a lot more people. Because I think a lot more people are coming back to work and there's a lot of law firms here.
00:10:11 Speaker_08
It felt very lively when I got here, felt very lively when I went out last night.
00:10:15 Speaker_05
CNN's there, KKR is there, Tapestry, the owners of Coach and there's quite a few companies over there. And they have Milos, that kind of cool Greek fabulous restaurant.
00:10:25 Speaker_08
Yes, I like Milos. You know who I went to that with many years ago? Ariana Huffington.
00:10:31 Speaker_05
Are you in love?
00:10:33 Speaker_08
Yes, when you go to Milos with Ariana, it's really fun because they freak out on you.
00:10:38 Speaker_05
Joanna Coles had a party, invited me over and they introduced me to Ariana. She's like, Scott, are you in love? And I'm like, what? What? She immediately went there. Are you in love? I'm like, come on.
00:10:50 Speaker_08
That would be an awkward question for Scott Calloway. It's a little too warm. It's a little too hot-blooded.
00:10:56 Speaker_05
Who are you, Greek lady? Who are you? Greek lady with a website?
00:11:00 Speaker_08
Hey, I have a new person to join your posse. I have a new famous guy to join your posse.
00:11:05 Speaker_05
I met him. I was looking for new friends. First off, do they drink?
00:11:08 Speaker_08
Um, I think so.
00:11:10 Speaker_05
Never mind. It's like when I'm looking, when I'm talking, when I'm hitting on a girl at a bar, one question, what's your relationship like with your father? Anything remotely positive, move along.
00:11:20 Speaker_08
Well, I went to dinner with him last night. Do they drink? Yes, I think so. Yes, I believe so.
00:11:24 Speaker_05
Are they better looking than me? Much, much, both of them. Are they famous?
00:11:28 Speaker_08
Yes. Yes. Check, check, check.
00:11:30 Speaker_05
Check, check, check. We're in. Come to F1. Wheels up 440 on Friday.
00:11:33 Speaker_08
He's going to kill me for mentioning it, but I went to dinner last night with Tim Daly and Taya Leone, who I love from Madame Secretary. Ooh, I like both of them. I know. And they're both Pivot fans. And wonderful. They're so lovely as people.
00:11:46 Speaker_08
And he was like, can I meet Scott? When we were leaving the restaurant.
00:11:49 Speaker_05
I was going to say, they're using you to get to me. I get it. That's correct. Well, I don't know.
00:11:53 Speaker_08
I doubt that. But he's like, Can I meet Scott sometime? And so I volunteered your apartment for a dinner party at some point. So just FYI.
00:11:59 Speaker_05
You mean what you do every week when I'm not there?
00:12:02 Speaker_08
That's correct. That's correct. But he wants, I think he wants to be part of your posse. I get the sense. I get the sense.
00:12:08 Speaker_05
He's a great guy.
00:12:09 Speaker_08
Tim is great.
00:12:09 Speaker_05
Tim, F1, we're rolling.
00:12:11 Speaker_08
Okay. Tim, you're in. And Tay is amazing. They're just lovely people. And I feel like they make a good, yes. You're going to be very intimidated.
00:12:19 Speaker_05
Very good looking, very talented.
00:12:20 Speaker_08
But again, it's a low bar when it comes. Oh, did I just say that out loud? I want you to have a posse of friends that you roam the urban landscape with.
00:12:31 Speaker_08
You've got a lot to get to, Jay, including Comcast's spinoff plans and Trump's reality show administration gets some new cast members. First, NVIDIA's domination continues with another blockbuster earnings report.
00:12:42 Speaker_08
The company reported on Wednesday that revenue jumped 94% from a year ago, a profit increase by 106% from the last quarter. NVIDIA also projected revenue in the current quarter would rise by 70% from a year ago with sales of its new Blackwell chip.
00:12:56 Speaker_08
Despite all the good news, Nvidia shares slipped after hours trading, signaling the results were not quite as spectacular as investors had hoped. This is still going, but people have a little bit of hmm. And then there's the tariff issue.
00:13:09 Speaker_08
with Trump, which is going to, I think, hang over everything because the stock market is starting to really see worries about that. The continued focus of Trump on picking a tariff-loving Treasury Secretary or head of commerce like he just picked.
00:13:26 Speaker_08
Thoughts on NVIDIA?
00:13:28 Speaker_05
Well, I mean, similar to a media that says people are freezing dead soldiers sperm and there's wildfires. This is not a glass half empty kind of story. It's actually, the stock is basically flat today. It was down a little bit.
00:13:43 Speaker_05
But here you have a company, I mean, Its profit doubled in the last quarter, quarter on quarter. Its stock is up. I mean, it's insane how much the stock is up over the last several years. It now accounts for one-fifth of the S&P 500 gains.
00:14:03 Speaker_05
That's more than the rest of the Magnificent Seven combined. I mean, think about that, 20% of the gains. driven by one company, and the stock over the last 24 months is up over ninefold. I mean, Jesus.
00:14:16 Speaker_05
I mean, the expectations now are that you blow away expectations, but this company, you know, and it says it's sold out of Blackwell for the next several quarters. Yeah, you know, this thing is nothing short of remarkable, and Nvidia itself,
00:14:32 Speaker_05
is worth more than the entire German, French, UK stock markets.
00:14:38 Speaker_08
Right, and you assume it will keep up.
00:14:42 Speaker_05
So that's a request for stock advice, and what I would tell anyone is the following. And one of the most frequent emails I get is asking me, is it too late to buy NVIDIA? And what I say is, I don't know. I can see it doubling.
00:14:54 Speaker_05
I can see it getting cut by 50, 60, 70 percent. So what you do is you don't try and buy the needle in the haystack. You buy the whole haystack. Go buy everything. Go buy an index fund.
00:15:06 Speaker_05
I mean, the difference here versus people often equate it to Cisco in 1999 is that the company's earnings and revenues are exploding. And so while its P.E.
00:15:16 Speaker_05
has gone up, its valuation has gone up relative to its earnings, it hasn't gone up nearly as much as, say, Cisco did.
00:15:22 Speaker_05
Cisco's stock price tripled, but its earnings didn't triple, whereas this company's quintupled, and its earnings have only tripled, but its earnings have tripled.
00:15:31 Speaker_05
I believe, and unfortunately, I think it warrants scrutiny, because effectively what you have is, just as we had the Wintel duopoly, you definitely have the formation of a new duopoly, OpenVIDEO.
00:15:42 Speaker_05
About 88% of all traffic to AI goes through OpenAI and is queried on a processor that has been sold into them by NVIDIA. So I don't even think Microsoft or Intel had this dominance.
00:15:58 Speaker_08
Yeah. For now. For now. For now. I think that's what people are worried about and that's probably what they're... I think don't know is a really disturbing thing for a lot of people. I think you were sort of hitting the nail on the head on that.
00:16:10 Speaker_08
Speaking of things people we do know about, the DOJ is asking a judge in the Google search monopoly case to force the company to sell its Chrome browser as part of the remedy.
00:16:18 Speaker_08
Chrome has about 67% of the global market and could go for as much as $20 billion, according to some estimates.
00:16:23 Speaker_08
The government also wants to stop Google from getting into paid agreements with Apple and others to be the default search engine on phones and browsers. The DOJ stopped short of requesting a full divestiture of Android.
00:16:33 Speaker_08
Google called the DOJ proposal extreme and is set to file its own suggestions. By December 20th, remedy hearings will be held in April, and the judge is expected to rule over the summer.
00:16:43 Speaker_08
I know, you know, all these agencies are sort of waiting for what happens with Trump, although you just never know, because he's had some anti-Google statements and everything else, and there'll be a new head of antitrust at the Justice Department.
00:16:58 Speaker_08
It's not clear who that's going to be. What do you think of this remedy? It seems like an unusual thing. Tech writer John Gruber noted Chrome and Android are not standalone businesses. They're appendages to Google.
00:17:09 Speaker_08
It's like saying, I have to sell my left foot. It's very valuable to me, but of no value to anyone else. And if a buyer of Chrome is a company like OpenAI or Microsoft, could they be accused of creating another monopoly with this purchase?
00:17:23 Speaker_05
So, I like this. The potential remedies were a fine. You can't come up with fines big enough.
00:17:29 Speaker_05
Some sort of administrator from the government, bureaucrat, that got to go into any meeting and tell them why they shouldn't do something, which they basically can ignore. Stick the fat, ugly, weird kid in the corner. And then finally, a breakup.
00:17:44 Speaker_05
So, I was happy to see this. Now, whether it holds or not, but I'm not sure I agree with the writer because... Because Chrome, you know, has about two-thirds global share, I think, of the browser market. That's so much attention.
00:17:57 Speaker_05
That's so much attention that a lot of different people could monetize that. So it would have no shortage of bidders. It would immediately stop this default, you know, steering everyone towards their search engine. It'd be more of a competition.
00:18:14 Speaker_05
So, I like this. I generally find that the FTC and the DOJ, and this is because they bring in a lot of my colleagues from business schools, are pretty smart about trying to come up with solutions that grow the total market. So, I like this.
00:18:29 Speaker_05
I hope it goes through. I don't know if it'll hold.
00:18:31 Speaker_08
You know, there's so much uncertainty because, as I said, Cantor will be leaving, John Cantor, and Lena Kahn's tenure may be over, or maybe not. It's very unclear.
00:18:40 Speaker_08
You might get someone like Brandon Carr, who's making a grab for power at the FCC, which it didn't have, but maybe trying to do so.
00:18:47 Speaker_08
There's all kinds of uncertainty on who's going to be able to run this, and then who is going to be the antitrust head. And it is all in the hands of a single judge, which then can be appealed, etc. And the government can stop trying, right?
00:18:59 Speaker_08
The government can go a different direction. depending. You know, it'll be interesting because Sundar Pichai, the head of Google, Alphabet, was on the phone with Trump. And of course, guess who was on the phone with him? There's the whole Elon element.
00:19:13 Speaker_08
Elon was on a phone call with the CEO of Alphabet with Trump. I mean, there's all these different competing power centers happening here. So, I agree with you. I think something should be cleaved off of these companies.
00:19:28 Speaker_05
That's, to me, the only... The key question is, where was Omarosa? I want her back. I know. She actually seems quite credible now.
00:19:35 Speaker_08
No, she does. I can't believe it, but she is. You're right.
00:19:37 Speaker_08
I mean, it'll be interesting to see what the remedy is, but I think the only remedy is the start to breaking up parts of their businesses and then creating whole new vibrant businesses from them, right?
00:19:47 Speaker_00
A hundred percent. Agreed.
00:19:47 Speaker_08
It just seems healthier. In so many ways, a fine's not gonna work, threatening with prison's not gonna work. They should just cut them up and create new businesses and see what could be made.
00:19:58 Speaker_08
I mean, having 67% of the global market, and it does help their other businesses. I can't tell you how many times I open Chrome and it says, don't you want to make this your default browser, right?
00:20:07 Speaker_08
I unsign out from Google because it's constantly trying to get me sucked into their system for no good reason. It seems that I would rather it be owned by more people.
00:20:16 Speaker_05
That's my feeling. I bet on a gross dollar volume basis, Search may be the biggest business in the world. I think it's like a quarter of a trillion dollar business, but I bet it's got gross margins of 80 or 90 points.
00:20:30 Speaker_05
That makes even the iPhone look like a distant, not a great business. Essentially, all of this, accretes to one player.
00:20:39 Speaker_05
And if you didn't have this incredible data advantage of looking what everyone is doing on the internet two-thirds of the time and then be able to steer them towards your search engine and then extract all sorts of payments to be the default, you would just have a lot more.
00:20:53 Speaker_05
All of a sudden, the biggest market in the world wouldn't be a monopoly, which would ultimately lower rents on everyone that has to pay the toll rates.
00:21:01 Speaker_08
And search would be better as a product.
00:21:04 Speaker_05
100%, and they'd be forced to innovate. Who knows? Someone might pop up and say, this is search that is not gonna give this information more reach. We're not gonna let computers create content.
00:21:18 Speaker_05
I had Eric Schmidt on, and he said something I thought was really insightful.
00:21:22 Speaker_08
This is the former, just for people who don't know, the former Google head.
00:21:24 Speaker_05
Former CEO of Alphabet.
00:21:25 Speaker_08
I think he never was Alphabet but Google, but go ahead.
00:21:29 Speaker_05
Oh, you're right. Excuse me. But he said something really interesting. He said humans should have absolutely very strong First Amendment free speech rights. But he said computers should not.
00:21:40 Speaker_05
And that really struck me as insightful because I think a lot of the misinformation, a lot of the incendiary content that polarizes us is not generated by a human. And I thought that was really an interesting place to start around all of this.
00:21:52 Speaker_05
But back to breakups and antitrust, ask any economist or ask any lawyer trying to fight against this, what breakup in US history did not end up being a good idea?
00:22:06 Speaker_05
Every time we have broken up companies, you end up with more powerful, more valuable companies, you end up with more choice, you end up with lower rents, you end up with more innovation. The only person that loses
00:22:17 Speaker_05
is the person who has the controlling shareholders or the super voting majority shares who wants to sit on the iron throne of not just Westeros, but all seven realms.
00:22:26 Speaker_05
But everybody else, every other stakeholder, the community, the tax base, employees, they then have more companies vying to rent their labor.
00:22:34 Speaker_08
It's always better. It's always better. Look at what's happening even over in social media. Blue sky, that's that choice. That's, you know, whether you like threads or not, that's that choice.
00:22:42 Speaker_05
It feels so much fresher. People keep texting me blue sky stuff.
00:22:47 Speaker_08
Yeah, everyone's moving over there, but it's different. They have a different, like, this is how our place is going to be. It's not going to be mean. And it's not, like, that's the whole point of different things. is you get to choose what you want.
00:22:58 Speaker_08
And that's the true free speech. That's my feeling. Is you get to, you know, everyone's like, you have to be, you know, Elon and his gang are pushing like, you have to be on Twitter. Like, no, I don't. I can do whatever I fucking want.
00:23:08 Speaker_08
And if I want to be in a bubble, great. If I don't, great. Like the ability to make and choose your own adventure to me is freedom. That's my feeling. Anyway, speaking of shifts going on, Comcast is spinning off its cable networks.
00:23:23 Speaker_08
We've discussed this before, including MSNBC and CNBC into a separate company. Comcast said the new company, dubbed SpinCo, how original, for now will be better positioned to achieve long-term growth and create value for stakeholders.
00:23:35 Speaker_08
The transaction will be structured as a tax-free spin to shareholders and will take a year to complete. Mark Lazarus, I know him a little bit, he's very smart, the current chairman of NBCUniversal's media group, will be SpinCo's CEO.
00:23:49 Speaker_08
The NBC broadcast network, NBC News, Sports, Bravo, Peacock, and the Universal theme parks remain part of Comcast. That means the entertainment stuff, all the entertainment and the main news. NBC News staying there is interesting.
00:24:04 Speaker_05
I don't understand that one.
00:24:05 Speaker_08
I don't because they share, MSNBC and NBC, they share a lot of people. I get all the others and Peacock and everything else.
00:24:14 Speaker_08
And then you may have to rename MSNBC, by the way, for people that don't know, it's Microsoft NBC, when they did, people don't, no one remembers that.
00:24:22 Speaker_08
And so anyway, thoughts, you would call this good bank, bad bank, but what do you imagine is going to happen here? And what's the plus for the bad bank, which is the cable assets?
00:24:36 Speaker_05
So we've been predicting this for a long time. That is when you have businesses that have a different business model or different life stages of maturity.
00:24:43 Speaker_05
So you could argue that still that Peacock, for example, and the theme parks are still growing businesses and they get a certain valuation because they're seen as more strategic and they're growing and they're about the future.
00:24:56 Speaker_05
USA Network, CNBC, MSNBC are not the future, they're the past. And that is they're flat to declining and mostly declining. And so these companies get an entirely different multiple, a much lower multiple. They're still very profitable.
00:25:11 Speaker_05
They're good businesses, but they're shrinking so they might get a multiple on EBITDA of five to seven, whereas the Bravo or the Peacock or the theme park's getting much higher multiple because there's a lot more potential for growth there.
00:25:26 Speaker_05
The problem is when you shove companies and businesses of different points in the life cycle together, investors go, generally speaking, the market goes, I'm confused. I don't like this.
00:25:37 Speaker_05
So I'm going to find the shittiest business in your portfolio, CMBC, and I'm going to assign the same multiple to the entire business. So what you do, and this makes sense, is you go good bank, bad bank. Simon Properties did this.
00:25:50 Speaker_05
Simon Properties has a ton of malls. The best malls probably in America are probably Simon, but they also have a lot of B-class malls that are dying. So they took all the shit that was still profitable and stuck it into a different company, a Spinco.
00:26:05 Speaker_05
And that way you get to decide if you want the growth high-end stuff or if you want Spinco is we'll trade at a much lower valuation, but it'll still attract investors.
00:26:16 Speaker_05
And in addition, the cultural shift is dramatic because what you have with the Spenco is the following.
00:26:23 Speaker_05
They're gonna go to ABC or Disney and say, hey, ABC, or hey, ESPN, or hey, even maybe CNN, you're like us, you're these shitty assets, but there's a good business model and distressed assets, and that is the following.
00:26:36 Speaker_05
We take on ABC, we take on CNN, and your business is declining 10 to 12 percent a year, but through consolidation, we're going to cut costs 14 percent a year because we only need one CFO.
00:26:48 Speaker_05
And we're going to clear out all the salespeople except for the top 10 percent. We're going to clear out all the back office and we're going to consolidate and cut costs. And as long as we recognize that this is no longer a teenager,
00:27:00 Speaker_05
But an aging senior, and we can cut costs faster than the revenues decline, you make more money, and these are good businesses. They're just in different points of the life cycle. And the market likes that. The market wants companies of similar growth.
00:27:12 Speaker_05
Yeah.
00:27:12 Speaker_08
People also come up with good things, too. Separate in a way, you could figure new things out for your business, presumably. They don't just have to be, you're describing AOL dial up here, right?
00:27:22 Speaker_05
It's still a good business, even if it's- I've said this before, probably the second best investment I ever made was in a Yellow Pages company.
00:27:31 Speaker_05
And the guy, a guy named Joe Walsh, really outstanding operator, and it was Paulson in there, and my buddy Jason Mudrick from Mudrick Capital put me on the board, and basically the strategy was very simple.
00:27:42 Speaker_05
Businesses, we all know Yellow Pages are going out of business, except these businesses typically go out of business more slowly than you think. And so we projected the company was going to decline.
00:27:53 Speaker_05
There are still a ton of rural households that want that big fat fucking book on their porch every year. to call a lawyer or someone to put up their fence or something like that.
00:28:03 Speaker_05
There are still a lot of people, you referenced a decent analogy, AOL dial up, and there are a lot of different Yellow Pages companies.
00:28:09 Speaker_05
So what you do, quite frankly, is you go buy them at two to three times profits, because everybody knows it's a declining business, and then you consolidate the back end. And you print money.
00:28:20 Speaker_05
And every year, our EBITDA went up because we went to the biggest Yellow Pages company in the Southeast and said, hey,
00:28:26 Speaker_05
And we know it sucks, but we can make this easier for everybody and consolidate the back end and save a lot of money and increase profits. Bad bank.
00:28:34 Speaker_05
Of all the different asset classes, whether it's angel, which is the worst part of the asset class, venture, which is very difficult, small number of VCs and a small number of partners at those small number of VCs get all the deal flow.
00:28:48 Speaker_05
IPOs, growth companies, mature companies, distressed. In my view, the best asset class is distressed because it's like the best small business in the world with a 90 plus percent success rate.
00:29:01 Speaker_08
I'm going to give you another challenge, though. How could they grow? You just assume they're old and going to die someday and we're going to keep Grampy, who has the wallet, good or make it more efficient or feed him less or whatever. Could they grow?
00:29:16 Speaker_08
Could this bad bank become a not a bad bank kind of thing?
00:29:21 Speaker_05
Well, OK, a couple of things. One, the way they grow, they will. The way they grow the top line is by going and finding the other cable orphans that are also fucking up the valuation for the for the larger enterprise.
00:29:32 Speaker_05
Disney Plus would trade at an enormous valuation, multiple on revenues. ABC does not. Right. So at some point, Bob's going to give up and just throw his assets into this company who can pay stock for these other declining cable assets.
00:29:47 Speaker_05
Warner Discovery or Warner Brothers Discovery, excuse me, they'll do the same thing. They'll put their shitty cable assets into this new code. So they'll grow the top line, but they will dramatically cut costs.
00:29:57 Speaker_05
And what's dangerous in the gestalt in these companies, it kind of fucks them up, is they always bring in someone with fresh legs who has visions of growth and rejuvenation. And the reality is what they should do
00:30:09 Speaker_05
is do a good job operating, present a good product, but quite frankly, their job is to cut costs and manage the company efficiently through acquisition and consolidation and cutting costs on the back end.
00:30:23 Speaker_05
And what they usually do, private equity will usually bring in a player that knows how to do that. And that's okay, they make money.
00:30:29 Speaker_05
But to believe that they can pump this thing up with Botox and they start looking freakish again, believing that, oh no, CNN's going to grow again. Now, CNN might, they might be able to staunch or cauterize the bleeding.
00:30:41 Speaker_05
They might be able to come up with some sort of interesting, but be clear, these companies are not going to be growth companies again, or I find it unlikely. And that's not the right strategy for shareholder growth.
00:30:51 Speaker_05
There's a ton of little assets that need a home and need one back end.
00:30:56 Speaker_08
Right, right, right, interesting. And so they could all be one, they could all be one bunch of cable assets together.
00:31:02 Speaker_08
Would there be any pushback from the government if say you combined, cuz there's all the talk of what Paramount's gonna throw in here, what Warner's gonna throw in here, that it could be a problem if you decide to merge.
00:31:13 Speaker_08
There's all these talks, you're gonna merge this with Warner Brothers, or David Zaslav's gonna do this, or Paramount's gonna do this. Can they all be in one, can all the networks be in one company, for example?
00:31:24 Speaker_05
So I would be shocked if it didn't fall under DOJ review, but here's the data the lawyers trying to get through the acquisitions would argue, and that is in 2017, 73% of three and four households had cable television.
00:31:39 Speaker_05
Okay, just to scan seven years later, it's down to 42%. They could rightfully get in front and say, this isn't about dominance, this is about survival.
00:31:50 Speaker_05
And everyone's watching, none of these assets get nearly the viewership of Netflix or YouTube or name your digital growth property or Instagram, and you want to block us? Folks, we're just trying to survive.
00:32:04 Speaker_05
Now, you could argue some sort of a security risk because it's so important what people see or news, but I don't even think they'll be able to I don't think the government would be able to make that risk.
00:32:16 Speaker_05
And also with the Trump administration, the general view is that they're going to let these guys start acquiring and cutting costs. And you want to talk about a Department of Government efficiency.
00:32:26 Speaker_05
you know, let the guys who are getting the shit kicked out of them by TikTok and Meta and Alphabet consolidate and bulk up. These guys, CNN, Yellow Pages, all of these companies are great businesses, they just need to be smaller with lower costs.
00:32:45 Speaker_05
I don't think they wanna buy another newspaper. Based on what you've told me, that culture is, what's the term? A clusterfuck. I don't think the New York Times should get near it.
00:32:54 Speaker_08
I'm just trying to think of different things you could put together.
00:32:56 Speaker_05
You could roll up. Well, Gannett, for example, Gannett rolled up every local newspaper. Yeah. But there's a lot of instances where you can make really good money doing this.
00:33:06 Speaker_08
And sometimes it doesn't work, and then it's just bad bank all the way down, essentially. But yeah, you're right, it's efficiencies. Roll-ups are a very interesting thing, so I find I'm studying them lately. Anyway, let's go on a quick break.
00:33:17 Speaker_08
When we come back, we'll talk about the latest TV personality added to the Trump administration and more. Support for this show comes from Arm. Have you ever thought about the technology that makes this podcast possible?
00:33:32 Speaker_08
Whether you're listening on your phone, in your car, or via a laptop, there's also the data centers that make it all work. One company is at the heart of it all.
00:33:40 Speaker_08
It's the same company that powered the smartphone revolution and is helping define the AI revolution. That company is called Arm.
00:33:46 Speaker_08
Arm designs compute platforms for the biggest companies in the world so they can create silicon solutions to power global technology. Arm became a NASDAQ 100 company in less than a year of its IPO and is proudly NASDAQ listed.
00:33:58 Speaker_08
Arm touches nearly 100% of the globally connected population. 99% of smartphones are built on Arm. Major clouds run on Arm, as well as all major mobile and PC apps.
00:34:10 Speaker_08
Now their engineers are tackling the insatiable demand for compute and power efficiency that AI is creating. AI-enabled ARM CPUs are able to provide the compute platform for the global AI revolution in the years to come.
00:34:22 Speaker_08
But for now, relax and enjoy this podcast. It's very likely running on your very own ARM-powered device. Visit arm.com slash discover to learn more.
00:34:37 Speaker_05
Support for Pivot comes from Solidime. The opportunity of AI brings a multitude of challenges associated with rapid growth and expansion. Solidime makes sure your data storage can keep up with your AI ambitions.
00:34:48 Speaker_05
Energy usage challenges and physical space limits are only going to increase as AI scales. Outdated storage infrastructure based on spinning disks, also known as hard drives, which are decades-old technology, simply can't keep up.
00:35:01 Speaker_05
Solidime offers power-efficient solid-state storage spanning from the highest capacities to the highest performance. It's storage optimized for the AI era, meaning you can finally scale your AI with fewer limitations.
00:35:13 Speaker_05
Growing AI ambitions requires a different approach to storage. Solidime's solid-state storage can help you bring your AI ambitions to life. Learn more at StorageForAI.com Support for the show comes from Smartsheet, attention project managers.
00:35:36 Speaker_05
Are you in the brink of burnout? Is your company going through a transformational change and expecting you to somehow figure out how to execute new programs and processes and guide everyone to success? It's not easy.
00:35:47 Speaker_05
So why don't you do yourself a favor and try out Smartsheet. Smartsheet is an enterprise work management platform that empowers project and portfolio managers to connect strategy with execution.
00:35:58 Speaker_05
Used by 90% of Fortune 100 companies, Smartsheet is the platform of choice for big names including Iron Mountain, Autodesk, HP, and more.
00:36:06 Speaker_05
That's because whatever your aim, whether it's department initiatives or organization-wide goals, Smartsheet can streamline processes and unite teams to deliver more impactful work.
00:36:15 Speaker_05
You can track projects, prioritize tasks, and visualize data, all on a flexible, scalable platform.
00:36:21 Speaker_05
Smartsheet powers the shift from reactive to proactive by helping organizations plan, capture, automate, and report all in one place, which ultimately means teams can move faster, drive innovation, and achieve more.
00:36:32 Speaker_05
Learn how Smartsheet can help your business at smartsheet.com slash pivot. That's smartsheet.com slash pivot. Smartsheet, work better at scale.
00:36:50 Speaker_08
Scott, we're back with more news. Well, Trump has named some more people, including someone you know well, Dr. Oz, to run the Centers for Medicare and Medicaid Services.
00:36:58 Speaker_08
Oz is a former heart surgeon, but has no experience running a government bureaucracy and has repeatedly drawn criticism from some medical professionals. That said, he looks good compared to some of the choices.
00:37:08 Speaker_08
As a reminder, Oz lost to John Fetterman in the 2022 Pennsylvania Senate race. In a statement, Trump said Oz would cut waste and fraud within our country's most expensive government agency. There is a lot of waste and fraud in those areas, for sure.
00:37:22 Speaker_08
Confirmed by the Senate, RFK Jr., both were confirmed, would be Oz's boss, which seems, should be flipped, honestly, if I had to pick.
00:37:30 Speaker_08
In other Trump picks, former professional wrestling executive Linda McMahon has been chosen to serve as the Secretary of Education. McMahon is a longtime Trump ally and ran the Small Business Administration for much of his first term.
00:37:42 Speaker_08
In fact, I think I interviewed her when she was that. That seemed more appropriate for her as a job. Trump has said he wants to dismantle the Department of Education, which would require congressional approval.
00:37:52 Speaker_08
I'm really not clear what's going on there. And last but not least, Cantor Fitzgerald CEO Howard Lutnick is Trump's pick for Commerce Secretary. He wanted to be Treasury Secretary and he instead got Commerce.
00:38:03 Speaker_08
Trump said Lutnick, who was the co-chair of his transition team, will lead on tariffs and trade. That seems more appropriate, I guess, for him.
00:38:10 Speaker_08
But, you know, he engendered a lot of dislike in that, you know, in that climb up the greasy pole of Trump world. People thought he was a little too thirsty for that job. What do you think about that?
00:38:24 Speaker_05
So I think Linda, Dr. Oz, and Howard Lutnick are fucking Henry Kissinger compared to Tulsi Gabbard and Matt Gage. I think all three of these people, like the winner gets to pick their friends or gets to pick who they want.
00:38:38 Speaker_05
Sometimes people surprise you. I think all three of these folks you could argue are credible, reasonable picks. And then you have an apologist for Assad, who went over there and didn't disclose it.
00:38:52 Speaker_05
And by the way, is everyone's favorite pick for this job in Russia. Can you imagine how demoralized you would be if you're an asset who has spent your life risking your life to protect us against enemies?
00:39:06 Speaker_05
And then you have someone show up who seems to have more empathy for the enemy than for the risks and the commitment you've made to your own country. So...
00:39:17 Speaker_05
You know, even I have a really, a lot of us have a real issue around RFK in terms of, in terms of vaccines, but he's also very good on some issues. What issues is Gabbard good on? Literally, what issue do you think they get right?
00:39:31 Speaker_05
That being an apologist for a guy who killed 400,000 of his own citizens? Being an apologist for Putin? Anyway, I am totally down with these three picks. Well done. They got my vote.
00:39:45 Speaker_08
I thought the most interesting thing was Nikki Haley, who's now decided again to get back to her, what I think is her real personality, honestly.
00:39:53 Speaker_08
She went after Gabbard, saying she opposed ending the Iran nuclear deal, she opposed sanctions on Iran, she opposed designating the Iran military as terrorists who say death to America every single day.
00:40:03 Speaker_08
She said that Donald Trump turned the US into a Saudi Arabia's prostitute. This is going to be a future head of national intelligence. She added that it was disgusting that Gabbard went for a photo-op with Bashar al-Assad.
00:40:17 Speaker_08
Now, here's what she said about Kennedy, which I would agree with. She says, he's not a health guy despite having years of stuff. She should face hard questions.
00:40:25 Speaker_08
He's a liberal Democrat environmental attorney lawyer who's now overseeing 25% of our federal budget and has no background in health care.
00:40:32 Speaker_08
Now, some of you, and this is you, Scott, may think RFK is cool with some of the things you may like that he questions what's in our food and what's in our vaccines, but we don't know when he's given reins to the agency what decisions he's going to make behind the scenes.
00:40:44 Speaker_08
I think she's right. If you like a couple, like we can all agree we need healthier food. That doesn't mean his crazy conspiracy theories should qualify.
00:40:52 Speaker_08
You should get someone who says that and doesn't have crazy conspiracy theories on a bunch of other things. Like, who doesn't, who can, like, I'm for oxygen. Like, okay, like that kind of thing.
00:41:03 Speaker_08
So it's interesting, there's a lot of inter-fighting going on in the right in many ways. Karl Rove wrote quite a piece about saying this is a fucking clown show. He had all this opportunity.
00:41:16 Speaker_08
The first week was all these very qualified and reasonable enough people, depending on whether you liked Republicans or not, right? And he said, and then it degenerated into a clown show.
00:41:26 Speaker_08
that Trump is frittering away all his political advantage by doing it, and that he's actually a lame-duck president, as you have noted, and that he will, that he's, when you're in your second term, you don't have as much political power.
00:41:40 Speaker_08
So, he doesn't know why he's using up this political capital that he has built up. And he also noted, again, that the win wasn't so big that it gives him the right to behave like this. So, anyway, it's interesting.
00:41:54 Speaker_05
Yeah.
00:41:54 Speaker_08
In fighting. In fighting. I like when they fight with each other over there. It leaves us not to fight with them. Anyway, we'll see what happens.
00:42:01 Speaker_05
Maybe they should freeze their semen or go to the Wicked Show. Jesus Christ, no wonder everyone's so depressed.
00:42:07 Speaker_08
You seem to be upset by reading a paper newspaper. A paper newspaper has triggered you. By the way, go to the Wicked show. It's great. I took Clara this week. She loved it.
00:42:15 Speaker_06
Oh, you did? That's nice.
00:42:16 Speaker_08
She loved it. I saw it the second time. It's wonderful. It's very long. Everybody let me be clear. It's a super long movie. But it is wonderful. The second time is the first time.
00:42:26 Speaker_05
Yeah, I won't see it. I won't see it. I know you won't, but you should.
00:42:30 Speaker_08
It's better than Barbie. How about that? Better than Barbie.
00:42:33 Speaker_05
There's a lot I don't do that I should care about. That's a long list.
00:42:36 Speaker_08
You know what? I think you would tear up at the end.
00:42:38 Speaker_05
I mean, who wants to defy gravity?
00:42:40 Speaker_08
You're like, I want to defy gravity. Scott Galloway wants to defy gravity. Anyway, one quick thing, podcast alert.
00:42:47 Speaker_08
Elon Musk and Vivek Ramaswamy, who never met a microphone they didn't want to chatter into, are starting a podcast or dogecast to document their work with the Department of Government Officials. It's like Beavis and Butthead as far as I can tell.
00:43:01 Speaker_08
The pair detailed their plans to cut spending in the Wall Street Journal op-ed, which will be focused on three types of reform, regulatory cuts, administration reductions, and cost savings.
00:43:10 Speaker_08
They also plan to recommend a return to office and early retirement policies, and will take aim at funding things like public media and Planned Parenthood. Should we have them to promote the new show?
00:43:23 Speaker_05
have them on, yeah. Yeah, yeah, that's what we need to do. I gotta be honest with you, Cara, there's a part of me that likes this. I don't.
00:43:31 Speaker_08
What, the return to work? Or what, just the noise?
00:43:33 Speaker_05
No, just the whole try and shake things up. I don't think they're gonna get anywhere. I mean, it's just hilarious to have a Department of Government Efficiency that has absolutely no power.
00:43:43 Speaker_05
Most of the cuts they wanna make would require congressional approval. And the thing that kinda says it all is that there are two heads of the Department of Government Efficiency. Right.
00:43:53 Speaker_05
But I do like the idea of a little bit of shock therapy every once in a while. I mean, the problem with the government is that they're not subject to market dynamics the same way the private sector is.
00:44:01 Speaker_05
So you can imagine there's a lot of fatty deposits to build up. Sure.
00:44:04 Speaker_08
I get it. So are the companies they run had those things. Fine. I get it. Here's the thing.
00:44:09 Speaker_05
There's a lot more scrutiny on the companies they run. I would agree.
00:44:11 Speaker_08
I would agree. But the way they're doing it is cruel and it's not in good faith. It's not in good faith. And that's what it is. They don't care. They wanna have a podcast. They wanna make their stupid jokes. They wanna say, look at me.
00:44:24 Speaker_08
They're offended, especially Ramaswamy. He's like, this whole thing has to go. I'm like, are you fucking kidding me? Like, really? It's just, it's all, it's all.
00:44:34 Speaker_05
Head start and school lunches.
00:44:37 Speaker_08
It's all hat and no fucking cattle. And it's on another, it's on a serious topic. And the same thing with RFK. Yes, we need healthier foods. But what the fuck are you doing over here?
00:44:47 Speaker_08
Like, it's just, this is all, this is a look at me administration staffed by people who didn't get hugged enough as children. And that's my issue with them. And they don't, they're not in good faith doing things that matter to people.
00:45:00 Speaker_08
And they're not, like, they just, let's cut, and that's Elon's way, let's fire everyone and sort out the rest. And I just don't think, I get the shock to the system, but this is not a, you know, this is not a frat.
00:45:11 Speaker_08
This is not a, I don't know, it has this feel.
00:45:14 Speaker_05
Oh, I think it is, Cara.
00:45:15 Speaker_08
It is, you're right, it is a frat.
00:45:16 Speaker_05
I think it is. It's a very rapey frat. I'm sorry, dropping dead bears in the park, wrestling.
00:45:21 Speaker_08
Yeah, it's a very rapey, it's a very rapey group of people, you're right. It's like, you know, grabby, you know, brush the boob, make obnoxious things. Brush the boob. Brush the rube. There's levels of raping.
00:45:34 Speaker_08
Just so you know, my trainer was mad at you about your comments about Pete. I got several of that.
00:45:40 Speaker_05
About who? About what?
00:45:41 Speaker_08
Pete Hegseth. That you were saying he was on a different scale than Matt Gaetz. You know, I'm just saying. I got a lot of pushbacks.
00:45:47 Speaker_05
Let me guess. So you're... No, this is a man. This is a manly man who pushed back. Next thing I know, you're going to be telling me I shouldn't refer to my assistant as Jiggles. Oh, come on. Come on.
00:46:00 Speaker_08
He was. Shall I read you the text I got? No.
00:46:03 Speaker_05
Yeah, that's what we need. That's that's usually you don't read them to me. You send them to me at night and say, Cheryl says you're being unfair.
00:46:10 Speaker_08
And this these were straight men that came to me. I'm just telling you, I would. Yeah. Yeah. I'm just saying that's what he wrote.
00:46:18 Speaker_05
I'm dying to know. Kara, I like to dictate my thoughts around what your trainer and your DJ think. Go ahead.
00:46:24 Speaker_08
I'm just telling you, he's a very smart guy. Why do you have to pull him down? He's just as smart as you are. Pull him down. He goes, I feel like Scott would compliment Dahmer on his fashion choices.
00:46:37 Speaker_08
He treats everyone like they're completely genuine in their statements. I was enjoying it.
00:46:42 Speaker_05
Dahmer on his fashion choices, that's good. I just think he's funny.
00:46:45 Speaker_08
He says, the glorious middle we need to reach, kinda rapey. We should call this show Estrogen and Scott and Scott and Feedback.
00:47:10 Speaker_09
It's true.
00:47:11 Speaker_05
Come on, take that back. I need to learn to take feedback. We could call this podcast Feedback for Scott.
00:47:22 Speaker_08
Feedback for Scott. But that's why it's brilliant.
00:47:25 Speaker_05
That's why it's brilliant.
00:47:26 Speaker_08
It's Scott's journey. It should be called Scott's journey. Maybe we'll change it to that. It's Pivot! It's called pivot. You're pivoting, Scott. We're getting you to pivot.
00:47:36 Speaker_05
And then you unpivot.
00:47:38 Speaker_08
And then he's really smart. I'm going to have to meet him. He gave you some recommendations in London for your show. So you can do pull-ups also. I'll send you that. Yeah, yeah, he was worried that you can't... Isn't that called a pull-up bar?
00:47:50 Speaker_05
Crazy.
00:47:51 Speaker_08
No, you said you wanted to do pull-ups. He gave me a recommendation in London of some really good, and she's a very comely woman trainer there. I think you would like it.
00:48:00 Speaker_05
I'm in. You have to do pull-ups. Okay, that's what I thought. You had me at comely.
00:48:02 Speaker_08
There are pluses and minuses of insults from trainers. Anyway, let's... Jay, you're wonderful, by the way, Jay. I appreciate your text to me. Anyway, let's pivot, speaking of which, to a listener mail. This one comes from BJ. Ooh, I love that name.
00:48:23 Speaker_08
Let's listen.
00:48:24 Speaker_02
Hi, Scott and Cara. Whenever the topic of huge CEO salaries comes up, we're told that CEOs deserve their pay because of the huge time commitment and tremendous responsibility of the position.
00:48:35 Speaker_02
Elon is the CEO of two companies and CEO in all but title of a third, yet he has time to shitpost on Twitter, appear at political rallies, father, but admittedly not parent, kids. show up at raves, do drugs, and so on.
00:48:51 Speaker_02
Doesn't this give lie to the concept that CEOs earn their pay? And do other CEOs ever think or tell you that they wished Elon would cut this shit out because he makes them all look bad? Thanks for all the content, BJ Wick.
00:49:06 Speaker_08
Hmm, BJ. Well, Elon has created value in the companies. I think he's a sort of a different unicorn situation. I think he has created value at SpaceX and Tesla and etc.
00:49:17 Speaker_08
Some of it's meme-y and it's certainly not in line with the economics of some of the companies like Tesla, for example. But he has created, he's a different kind of CEO. He's a founder CEO in that regard. So he may be worth the money he's paid.
00:49:31 Speaker_08
I think it's a mixed bet on that. I think CEOs actually are split that I talk to. They wish they could behave like that, actually. They prefer, they would like to be assholes. They just can't pull it off.
00:49:44 Speaker_08
It's sort of like a lot of politicians sort of want to behave like Trump, and they can't. They fall on hard times when they behave like Trump, and only Trump can behave like Trump. And they're very comparable in that regard.
00:49:56 Speaker_08
Other CEOs really don't like it. They are like, this is making us all look bad and eventually karma will fall into place here with this particular person. I do think CEOs get paid too much.
00:50:08 Speaker_08
I just think other people should be paid more and value should be more evenly distributed across companies. But we have the CEO, love the CEO culture, and as Scott says, the obsession with innovators. So I don't think that's going to change. Scott?
00:50:25 Speaker_05
So I'll talk a little bit about CEO compensation and not specific to Musk. We live and we've decided in terms of wages, it's supply and demand. And at some point we realized supply and demand isn't healthy. So we have federal minimum wage.
00:50:39 Speaker_05
And if it had only kept up with productivity and inflation would be 23 bucks an hour, not 7.25. So that's a problem.
00:50:45 Speaker_05
At the other end, you're talking about CEO compensation, where it's gone from about 40 years, 40 times the average compensation of the worker at that company to three or 400 times. And this is how it's happened.
00:50:56 Speaker_05
The person or the group that decides CEO compensation is the compensation committee of the board. And it's three or four people.
00:51:03 Speaker_05
Generally speaking, the CEO will figure out a way to get his golfing buddies on that committee because they get to decide how much he or she makes. And this is what happens. We don't like to do actual work on boards.
00:51:13 Speaker_05
We want to get paid a quarter to a half million dollars a year to show up for free lunch or free dinner every three months and think big thoughts and then go back to our formerly important person life.
00:51:22 Speaker_05
And what we decide on the compensation committee is that we hire Towers Perrin, we pay them 100 or 300 grand to come back with a CEO compensation survey. And it's the following.
00:51:33 Speaker_05
It looks at the size of the company and the performance of the company, and it says the lowest paid at zero made this, and the highest paid at 100 made this.
00:51:40 Speaker_05
And generally speaking, what you do is you say, well, Bob and Lisa, who are always the former sorority or fraternity rush chairman and are exceptionally likable, they're doing their level best. They're good people.
00:51:51 Speaker_05
Maybe the company's not doing great, but it's doing okay, all things considered. So we're not gonna pay them at a five, the average. We're gonna pay them just above at a six.
00:51:59 Speaker_05
So slightly above average for a company in that sector of that size and that performance. And you might think, well, that's innocuous. The problem is,
00:52:06 Speaker_05
When you are raising someone's compensation, the CEO, at 10% a year, which sounds reasonable, that's not bad. Give Bob 10% more this year. That means every 21 years, the compensation of the CEO goes up eightfold relative to other employees.
00:52:21 Speaker_05
And so what we have is CEO compensation that has gotten just totally fucking out of control. And the CEO says, OK,
00:52:28 Speaker_05
Whether it's out of control or not, if you don't pay me market, which is out of control, I'm going to go next door and get more out of control compensation. So we agree to do it. Now, the next question is what can you do about it?
00:52:40 Speaker_05
And I don't think there's anything you can do about it on the compensation side. What you need to do is have an alternative minimum tax, such that if a CEO is making 60 million bucks a year,
00:52:49 Speaker_05
They don't pay a lower tax rate than their assistant because there are all sorts of goodies and loopholes, how folks that exercise options get long-term capital gains, how they can defer their compensation, all sorts of shit.
00:53:02 Speaker_05
They can go beg for a bailout after paying themselves $120 million over five years. The CEO is the biggest airlines. There's all sorts of ways that the top guy or gal can avoid paying their fair share.
00:53:14 Speaker_05
So my feeling is there is nothing you can do or should do. I don't like the idea of a socialist contract around limiting compensation.
00:53:20 Speaker_05
What you can do is say, all right, if you make over a million bucks a year, we have an alternative minimum tax, and that is take advantage of every loophole. But if you go below 20%, we're rounding up to 20%.
00:53:33 Speaker_08
All right. And? And get to the other part of his question.
00:53:36 Speaker_05
What was the other part?
00:53:37 Speaker_08
It's that, you know, do people want to be like this from your perspective?
00:53:42 Speaker_05
Be like Elon?
00:53:43 Speaker_08
Yeah. Oh, yeah. Some of them do. Not all.
00:53:47 Speaker_05
Oh, I don't know. I think the majority of people in business who are on this hamster wheel and see the kind of love
00:53:53 Speaker_05
and generosity America affords you if you have a lot of money, if they finally get to that point of CEO compensation, they all want to be the overpaid guy or gal.
00:54:01 Speaker_08
No one at your funeral says, you know... No, no, not that, that they want to behave. I'm talking about, like, doing whatever you feel like, right?
00:54:07 Speaker_05
Oh, Elon has channeled and actualized his inner eight-year-old, and there's a healthy market that seems to appreciate it because CEOs have been told the decorum is to act like an adult and a grown man or a grown woman, and then he comes in
00:54:22 Speaker_05
and just scratches everybody's it. No one can look away. And in an attention economy, as long as you're famous, that's a success story in itself. Not only do most CEOs not want to be this guy, they couldn't be this guy.
00:54:37 Speaker_05
Their decorum, the way they were raised, they could never do it. They would refuse to. They can't equip themselves.
00:54:45 Speaker_08
So what I get is either, well it's kind of cool he gets to say what he wants, this is what I get. And then the others give a face, you can see a face before they say anything, they're like, ugh. But at the same time, they can't believe it's happening.
00:54:58 Speaker_08
I think he's a very Trump-like figure. He's unusual, there won't be another one like him for a long time. I guess the equivalent before was Steve Jobs, but Steve Jobs looks like the best behaved boy in America.
00:55:09 Speaker_05
See above Henry Kissinger.
00:55:10 Speaker_08
Right. Yeah, exactly. And he actually, he would have hated this. This is not, he did everything to sell phones. This was not about personal, like putting his personal life in front of everybody.
00:55:22 Speaker_05
It was to sell more iPhones. There are 500 CEOs in the S&P 500. 499 of them, if they put out a tweet saying that I'm taking the company private at a massive premium, the funding is secured, they would have been fired within a week.
00:55:33 Speaker_05
The board would have said, I either need to see direct evidence of this right now, or we're doing an emergency board call and we're firing you. I mean, CEOs of the S&P 500 are fired every day for much less, or at least demoted them or something.
00:55:49 Speaker_05
The fault here is not Elon Musk. The fault is the board of these companies. And I can see how they've decided this, because they've said, okay, or at least they rationalized it. This guy's singular.
00:55:59 Speaker_05
I mean, he's just accomplishing shit no other individual seems to be accomplishing, and we're all making a shit ton of money. Do you know how much money the people on the board Yeah, well, I read it.
00:56:10 Speaker_08
There's a great Wall Street Journal story about this. It makes perfect. Everything's, let me just explain to you, everything comes down to the money. If you make a lot of money, you can act like a douche nozzle. That's pretty much the situation.
00:56:22 Speaker_08
What do you think we could do to get fired? What would we do? How far could we push it?
00:56:27 Speaker_05
I wonder. Oh, I don't, geez, I feel like I'm well on the way.
00:56:32 Speaker_08
Honestly, no, I don't think so. I think you have a great latitude.
00:56:36 Speaker_05
Oh, thanks for saying that. I'm just saying. You're a protected class. I am? Why? You don't think you're a protected class? Because why? Because you're a lesbian journalist, Kara.
00:56:46 Speaker_08
No, that's not at all. I've never trotted that thing out, ever. I've never used it.
00:56:52 Speaker_05
You don't need to trot it out. Everyone knows you. You're powerful. You're a leader and advocate in your community.
00:56:57 Speaker_08
I don't think it's because of lesbians.
00:56:59 Speaker_05
People got to think twice about Canceling you, you're also very good at what you do, which helps.
00:57:05 Speaker_08
I think that's really it. Thank you for saying that. But I think the gay card is a lot less strong than you think. I just, I think it's not that. I think it's, I think we have an, I think both of us have an attitude of, we'll go somewhere else.
00:57:16 Speaker_08
We don't care, right? I think that's more, and we're good at what we do. And that's what, it's very hard to attack us because we don't care as much.
00:57:26 Speaker_05
I had dinner with one of my role models last night, Sam Harris, and he said something profound to me about 10 years ago. He said, if you have economic security and people who love you unconditionally, you have a moral obligation to speak your mind.
00:57:38 Speaker_05
Because in a society where everyone has a narrative and pressure to go up, to sign up for the narrative, which a lot of people need to do because they want to put food on the table.
00:57:47 Speaker_05
When we all start barking up the same tree, as my colleague Jonathan Haidt said, we get stupid. And so that's something I try to remember.
00:57:55 Speaker_05
And also, you know, we say, or I say, I should say, a lot of borderline inappropriate things that some people, a lot of people might find offensive. And there's, I just want you to know, and I've said this before, there's a strategy here.
00:58:07 Speaker_05
And that is I want to see progressives take back power of our government. I refuse to normalize the notion that sexual abuse inciting an insurrection or a convicted felon should be present. I don't care if you got 49 or 99 percent of the vote.
00:58:22 Speaker_05
And one of the ways progressives take back power is we prove to the world that we are not fucking humorless.
00:58:30 Speaker_05
And if you look back in history, the people, the comedians who really made social change, they were progressives and they were incredibly profane. Carlin, Richard Pryor, Lenny Bruce.
00:58:39 Speaker_05
So when I go out there and we go out there and I make off-color jokes about your sexuality or I say inappropriate things or things that might trigger people,
00:58:50 Speaker_05
A, it's me, I think it's funny, I think a lot of people think this way, but also, I think part of progress will be when we get to a post, I don't know, bigoted era where we appreciate and rib and a little bit of mockery of each other's differences, but it's okay, we recognize we're different, that's okay, that's what makes us beautiful and we can have a sense of humor about these things.
00:59:15 Speaker_08
I would utterly agree with you. Actually Jon Stewart had a good riff on this this week on the Daily Show in his Monday appearance. It was along these lines.
00:59:23 Speaker_08
The only place I'm going to draw the line is the attacks on trans people right now are getting really ugly and it's not funny. And there's no, like Nancy Mace, and let me tell you Nancy Mace, you're a heinous heinous person.
00:59:36 Speaker_05
That's really vile.
00:59:36 Speaker_08
It's vile. You can have a debate about bathrooms.
00:59:39 Speaker_05
You mean the legislation that's targeted at one person?
00:59:42 Speaker_08
One person. And this woman, can I just tell you, Sarah McBride is handling herself with such class and grace. She goes, I'm here to work for the constituents of my district in Delaware about prices and the economy and helping them have a better life.
00:59:58 Speaker_08
Where I go to the bathroom doesn't matter. She had so much class, and Nancy Mace, Honestly, what is wrong with you? You are an attention- And by the way, her staff talks about this.
01:00:11 Speaker_08
She wanted apparently to get punched in the face during the insurrection so she could get attention. You are an attention-seeking, heinous, cruel person.
01:00:20 Speaker_05
And it's working. Look what we're talking about.
01:00:22 Speaker_08
I get it. I know we're talking about it, but not in a good way. And Sarah McBride, good for you for rising above it. But that's the one place where it's gotten, it's turned in a very ugly direction. And it's not funny, but I agree with you.
01:00:36 Speaker_08
I would recommend watching Jon Stewart had the same exact idea of like, Let's start playing the loophole game like they do, and the rule-breaking, and you shouldn't behave like, you know, the class monitor so much. And maybe we can make some change.
01:00:50 Speaker_05
So, I was at a urinal yesterday, and this guy came up to the urinal next to me and said, he said, looked over and he said, circumcised? I'm like, nope, that's just the wear and tear.
01:01:01 Speaker_09
I don't even understand that. I don't understand why it's funny. I don't understand it.
01:01:06 Speaker_05
So just so you know, anytime if someone asks if you know a guy, do the following. Go, wait, 5'10", dark hair, circumcised? That's a great conversation starter.
01:01:15 Speaker_09
I think I won't. I feel like I'm not going to do that.
01:01:17 Speaker_05
And two, my favorite is that Republican senator who was soliciting blowjobs in the men's room at Minneapolis Airport. And he was a total homophobe in the Senate. Of course. Wide stance.
01:01:30 Speaker_05
I'm starting a boy's band called... And he just said, I just have a wide stance.
01:01:33 Speaker_08
Wide stance. Wide stance.
01:01:35 Speaker_05
I'm starting a boy band called Wide Stance.
01:01:37 Speaker_08
Anyone who is so anti-gay, you know what's happening. Let me just give you that piece of information.
01:01:41 Speaker_05
I think there's a lot of truth to that. Oh my God. A lot of truth to that.
01:01:45 Speaker_08
It's like, calm the fuck down. What do you care? This is my last story. I was at a dinner party with all these VCs a couple of years ago, and this guy, and he's a well-known venture capitalist,
01:01:55 Speaker_08
starts going, he goes, first he made the typical lesbian jokes. There was a law about gay marriage, and he said, I don't like gay sex. I like a lesbian sex. Ha, ha, ha, did that one, which is like, oh, good God.
01:02:10 Speaker_08
And I knew it was coming next, and he goes, but I don't like this gay sex thing. And so the room didn't know what to do, and I said, you know what? If you don't like gay sex, you have to stop having it. And he goes, what?
01:02:22 Speaker_08
And I said, well, if you don't like gay sex, you just said you don't like it. Don't have it. I don't like this zucchini and I put it over to the side of the plate here because I don't like it and I'm not going to eat it.
01:02:30 Speaker_08
And he's like, I'm not having gay sex. I said, why did you say you don't like it? Because you just said you don't like it. Are you lying about having gay sex? That's weird. It was the most wonderful moment of my life.
01:02:39 Speaker_08
I have to say this guy doesn't like me anymore.
01:02:42 Speaker_05
Well, you know how many LGBTQ supporters it takes to change a light bulb.
01:02:46 Speaker_08
Oh, no.
01:02:48 Speaker_05
The light bulb is fine, Cara, the way it is. It's society that needs to change the way it looks at the light bulb.
01:02:54 Speaker_08
You know what? We're not all woke, by the way. We contain multitudes. We have plenty of conservatives. I agree.
01:02:59 Speaker_05
I don't get that though. I don't understand.
01:03:01 Speaker_08
I'm just saying there's plenty of different gays of all kinds now. Same thing with everybody. Anyway, I agree. Identity politics can get a little tiresome, but we're not all the same in any group.
01:03:11 Speaker_08
Anyway, if you've got a question of your own that you'd like answered, send it our way. Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT.
01:03:21 Speaker_08
By the way, Pivot is now on Blue Sky, because everybody else is, and we're a thirsty group of people. So send us a message there. We're going to be on all the platforms.
01:03:30 Speaker_08
We're not really engaged on Twitter that much, because it's, again, a Nazi porn bar, and it doesn't really help us. That's really the point. All right, Scott, one more quick break. We'll be back for predictions.
01:03:47 Speaker_04
Amazon Q Business is the new generative AI assistant from AWS. Because many tasks can make business slow, like wading through the mud. Luckily, there's a faster, easier, less messy choice.
01:04:03 Speaker_04
Amazon Q can securely understand your business data and use that knowledge to streamline tasks. Now you can summarize quarterly results or do complex analyses in no time. Q got this.
01:04:15 Speaker_04
Learn what Amazon Q Business can do for you at aws.com slash learn more. That's aws.com slash learn more.
01:04:28 Speaker_08
Support for Pivot comes from Lingo by Abbott. When it comes to healthy habits, you can spend a lifetime cycling through wellness trends, diets, and workouts, but the hard part is figuring out what actually works for you and sticking to it.
01:04:39 Speaker_08
That's where Lingo comes in. Lingo is a bio-wearable and app that tracks your glucose in real time. That means you can get personal insights and recommendations that help you learn how to eat in a way that works for you.
01:04:50 Speaker_08
I'm about to try Outlingo myself and I'm very interested to see what happens when I eat something in the morning and what it really means. Is that oatmeal actually good for you? Or should you try eating an egg?
01:05:00 Speaker_08
It'll be interesting to track my unique glucose patterns, optimizing my nutrition, and understanding the impact of that cookie at 11 p.m. at night. It's water-resistant. No more chasing wellness trends.
01:05:11 Speaker_08
When you use Lingo, your body can tell you what works for you. The Lingo glucose system is for users 18 years of age and older, not on insulin. It is not intended for diagnosis of diseases, including diabetes.
01:05:24 Speaker_08
For more information, please visit hellolingo.com.
01:05:30 Speaker_05
Support for Pivot comes from AWS. Amazon Q Business is the new generative AI assistant from AWS. Because many tasks can make business slow, like wading through mud. Luckily, there's a faster, easier, less messy choice.
01:05:44 Speaker_05
Amazon Q can securely understand your business data and use that knowledge to streamline tasks. Now you can summarize quarterly results or do complex analyses in no time. Q got this. Learn what Amazon Q Business can do for you at aws.com.
01:05:58 Speaker_05
That's aws.com slash learn more.
01:06:13 Speaker_08
Okay, Scott, we're going to do a prediction. I'm going to give one very quickly. I predict the Christmas rom-com Hot Frosty, which is already number one movie on Netflix, will continue to dominate this weekend.
01:06:24 Speaker_08
The movie stars Lacey Chabert as a widow who falls in love with a snowman she brought to life who's really hot. He's hot, frosty. It's so sick. It is so sick for those who've seen Frosty the Snowman thing to think about a fuckable Frosty.
01:06:39 Speaker_08
But that's what it's about. It's about a fuckable Frosty. And she falls in love with him. And he has a really nice set of abs. I think you'll appreciate them, Scott. So that's my prediction.
01:06:49 Speaker_05
What does your trainer think?
01:06:50 Speaker_08
He's going to beat you up. That's what's going to happen. Anyway, that's your prediction now.
01:06:58 Speaker_05
I think that so with the antitrust scrutiny probably being dialed down and the election over, I think private equity is getting its jets kind of fired up again. And we're going to see in 2025 a lot of M&A and take private activity.
01:07:14 Speaker_05
There's like a quarter of a trillion dollars in dry powder on the line. Or the private equity is a master race and needs to deploy. And I think a decent target, if you will, right now is now Target.
01:07:26 Speaker_05
Walmart reported great earnings, Target terrible earnings. Walmart's now trading at I think 33 or 34 times earnings and Target is trading at like 12. It's not doing really well.
01:07:36 Speaker_06
No, I had a bad quarter.
01:07:38 Speaker_05
60% of Walmart's US sales were in grocery, and it was less than 25% for Target. And that kind of essential business is more, if you will, more consistent.
01:07:48 Speaker_05
Target's business model relies on consumers who are willing to spend on non-essentials, such as clothing and beauty, and it's lost a little bit of that differentiation and panache.
01:07:56 Speaker_05
Even if Target could match or beat Walmart's prices, experts believe that Target would still be perceived as more expensive. And generally what happens in these kinds of business everyone is compensated or focused on share.
01:08:07 Speaker_05
And I think Target is an example of a business that needs to shrink to become much more profitable. And that's just so counter to the DNA of every manager there.
01:08:16 Speaker_05
But I think Target is now at a price level and would benefit from making difficult, hard, cost-cutting changes outside of the public eye. This strikes me that there's probably quite a few PE folks sharpening their pencils and looking
01:08:31 Speaker_05
at Target, because it still has a great brand. It still has, I think, really outstanding real estate. I love the Super Target in Boca Raton. I think it's a wonderful experience.
01:08:41 Speaker_08
Brian Cornell is the CEO. I know him pretty well.
01:08:44 Speaker_05
Really?
01:08:44 Speaker_08
Yeah, he's had a tough, this is, the stock fell, what, 21%? I mean, yeah. Well, Target operates 1,900 stores and generates sales of $107 billion.
01:08:56 Speaker_05
And their current debt is 19 billion on a market cap of 56. So it's got about a $75 billion. I think you're going to see some of the biggest LBOs in history.
01:09:09 Speaker_05
And I think Target is probably getting eyed right now because this is a company that probably at 1,500 stores versus 1,900 get rid of the 400 least profitable. bring in a new, you know, freshen up the merchandise, if you will.
01:09:23 Speaker_05
I think this is the kind of deal that PE loves. And these guys have so much capital they've got to put to work, this would be a club deal. But it's a great brand, it's ubiquitous.
01:09:34 Speaker_08
AMT – You hope it doesn't go the way of, I'm trying to think of another. It was not trendy, and then it got really trendy. Target got really kind of fun to shop at, and now it's really struggling.
01:09:47 Speaker_08
The issue is inflation-weary shoppers, and the CEO said that shoppers are stretched and waiting until the last minute to buy items. So, I think it's gotten a little not fresh, I would say.
01:10:00 Speaker_05
Well, exactly. But this would be so what I'm predicting and these deals are hard to pull off, but I believe this would be the biggest LBO in history. TXU now Energy Future Holdings was 45 billion in 2007. HCA Healthcare was 33 billion in 06.
01:10:15 Speaker_05
RJR Nabisco was 31 billion all the way back in 1989. So maybe a better prediction because it's more likely to happen is we're going to have the biggest LBO in history in 2025. And I think a decent idea. Interesting.
01:10:26 Speaker_05
Two decent ideas we've mentioned over the last three weeks. One is Intel and one now I'm adding to the list, Target.
01:10:32 Speaker_08
Are you involved? May I ask?
01:10:36 Speaker_05
I'm not, I'm choosing my words carefully here. I talk to a lot of PE guys all the time. I'll say that.
01:10:42 Speaker_08
AMT – Yeah, interesting. Yeah, that's actually a great idea. It's a great idea, an excellent one. But I feel my frost hot frosty prediction was better.
01:10:50 Speaker_06
JS – Hosty.
01:10:52 Speaker_08
Hosty. AMT – Hosty. What are they going to do next? They're going to take a cartoon and make them fuckable. I don't like this. I just don't like this term. But I did watch it and I liked it.
01:11:00 Speaker_08
Anyway, by the way, watch The Diplomat also, second season, amazing.
01:11:05 Speaker_05
People love it.
01:11:06 Speaker_08
Love it, fantastic. So smart. It's like West Wing-y kind of, but it's really smart and the two main stars are fantastic.
01:11:14 Speaker_08
Elsewhere in the Kara and Scott universe, as you mentioned, you spoke with Google's former CEO Eric Schmidt on the Prof G podcast, by the way, running up the charts, Mr. Podcast. Maybe the Dogecash will catch you, but probably not.
01:11:27 Speaker_08
and discuss the threats and opportunities of artificial intelligence. Let's listen to what Eric Schmidt is most worried about if we don't get a grip on this technology.
01:11:36 Speaker_03
Remember that it was the horror of nuclear war that got people to the table and it still took 15 years.
01:11:43 Speaker_03
I don't want us to go through an analogous bad incident involving an evil actor, North Korea, again, I'm just using them as bad examples, or even Russia today, we obviously don't trust.
01:11:56 Speaker_03
I don't want to run that experiment and have all that harm and then say, hey, we should have foreseen this.
01:12:02 Speaker_08
Oh, Eric is being very careful, that's interesting. He's an interesting guy, very smart. I covered when he got that job, I think I broke that story, when he got that job at Google many moons ago. He was way out in Utah.
01:12:13 Speaker_08
He was running Oracle or something? No, no, he was running Novel. So Eric was at, before that he was at Sun, where he got famous, then he went to Novel, and then of course got that Google job where he did pretty well.
01:12:30 Speaker_08
But he's a very thoughtful person, I'm glad you talked to him.
01:12:32 Speaker_05
PhD from Berkeley, no?
01:12:33 Speaker_08
Yeah. I don't know. He's just really smart. Great, great moment of talk about getting the best job in history. That was when he went to Google and he kind of cleaned it up. But please listen to Prof G and listen to Scott's discussion with Eric Schmidt.
01:12:46 Speaker_08
It's quite good. All right, Scott, that's the show. We'll be back on Tuesday with more Pivot. Why don't you read us out?
01:12:53 Speaker_05
Today's show was produced by Lara Nehme and Zoe Marcus, Taylor Griffin, and Christine Driscoll. Ernie and her time to engineer this episode. Thanks also to Drew Burrows, Mia Saverio, and Dan Shulan.
01:13:03 Speaker_05
Nishat Kerouac is Vox Media's executive producer of audio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media.
01:13:12 Speaker_05
You can subscribe to the magazine at nymag.com slash pod. We'll be back next week for another breakdown of all things tech and business. Have a great rest of the week and weekend, Kara.
01:13:32 Speaker_08
Support for Pivot comes from Lingo by Abbott. Lingo is a new science-backed system that powers healthy habit change. It's bio-wearable and has an app that tracks your glucose in real time. And you don't just get data, you get a plan too.
01:13:45 Speaker_08
It gives personal insights and science-backed recommendations so you can learn how your body responds to your habits and learn to eat what works for you. The Lingo glucose system is for users 18 years of age and older, not on insulin.
01:13:58 Speaker_08
It is not intended for diagnosis of diseases, including diabetes. For more information, please visit hellolingo.com.
01:14:09 Speaker_00
Support for the show comes from AT&T. What does it feel like to get the new iPhone 16 Pro with AT&T NextUp anytime? It's like when you first light up the grill and think of all the mouth-watering possibilities.
01:14:23 Speaker_00
Learn how to get the new iPhone 16 Pro with Apple Intelligence on AT&T and the latest iPhone every year with AT&T Next Up Anytime. AT&T, connecting changes everything.
01:14:35 Speaker_00
Apple Intelligence coming fall 2024 with Siri and device language set to US English. Some features and languages will be coming over the next year. $0 offer may not be available on future iPhones. Next Up Anytime feature may be discontinued at any time.
01:14:49 Speaker_00
Subject to change. Additional fees, terms, and restrictions apply. See att.com slash iphone for details.