Tesla’s Terrible Earnings, the FTC’s Noncompete Ban, and 24/7 Trading at the NYSE | Prof G Markets
Summary
TLDRThis week's episode of Propy Markets dives into a myriad of financial topics, starting with the revelation that Americans discard $68 million in coins annually. The discussion then shifts to Tesla's Q1 earnings, which were below expectations, yet the stock price rose, possibly due to an oversold market and Musk's emphasis on AI and robotics. The analysts also delve into Spotify's revenue increase, Netflix's membership growth, and Meta's revenue surge despite a share price drop after announcing increased AI investment. The show touches on the potential billion-dollar agreement for a new FIFA tournament and the implications of the Biden administration giving TikTok a year to sell to an American company. The conversation also addresses the FTC's ban on non-compete agreements, which is expected to boost wages and create new business opportunities. Finally, they ponder the cultural and financial implications of the potential shift to 24-hour trading at the New York Stock Exchange.
Takeaways
- 💰 Americans discard approximately $68 million worth of coins annually.
- 📈 Spotify reported a 20% year-over-year increase in first-quarter revenue and a record high profit of $180 million, following a challenging year with layoffs and price hikes.
- 📊 Netflix membership rose by 16% in the first quarter from the previous year, but the company plans to stop reporting quarterly subscriber numbers and revenue per user starting next year.
- 📈 Meta's revenue increased by more than 27% from the previous year, surpassing analyst expectations, yet shares fell by more than 15% due to lighter than expected revenue guidance and increased spending on AI.
- 🏆 FIFA and Apple are close to a deal regarding TV rights for a new World Cup-style tournament for club teams, potentially valued at around $1 billion, set to take place in the US in 2025.
- 🛑 President Biden signed a bill giving TikTok until 2025 to arrange a sale to an American company or face a ban in the US, with TikTok's CEO vowing to challenge the law on First Amendment grounds.
- 🚗 Tesla reported a decline in revenue and profits, its first drop since 2020, with the company burning through $2.5 billion in cash. Despite this, Elon Musk committed to launching more affordable vehicles by 2025, leading to a 14% stock rise.
- 🛇 The FTC has banned non-compete agreements, which could increase average annual earnings by over $500, benefiting around 30 million workers.
- 🌐 The New York Stock Exchange is considering a shift to 24-hour trading, seven days a week, potentially increasing trading volume and attracting more global investors.
- 🤔 The discussion suggests that the rise in efficiency and profitability in companies like Spotify and Meta may be due to better economic conditions and consumer spending, despite increased prices.
- 📉 Concerns are raised about the potential negative impacts of 24/7 trading on mental health and work-life balance for financial services employees, as well as the possible increase in market volatility.
Q & A
Why do Americans throw out approximately $68 million worth of coins every year?
-The habit of throwing out coins is likely due to a combination of factors, including the inconvenience of carrying change, the low value of individual coins, and a lack of awareness about the cumulative worth of discarded coins.
What is the significance of the ban on non-compete agreements by the FTC?
-The ban aims to increase workforce mobility, boost competition, and potentially raise wages by allowing around 30 million workers previously bound by non-compete agreements to change jobs more freely.
How did Spotify's first quarter revenue increase impact the company?
-Spotify reported a first quarter revenue increase of 20% from the previous year and a record high profit of $180 million. This came after a challenging year that included layoffs and the first price increase in a decade.
Why did Netflix's stock price fall by 9% after their announcement?
-Netflix's stock price fell due to their decision to stop reporting quarterly subscriber numbers and revenue per user, starting next year, which raised concerns about the transparency and future growth of the company.
What is the potential value of the agreement between FIFA and Apple for a new tournament?
-The agreement could be valued at about $1 billion, with the month-long tournament set to be hosted in the US in 2025, potentially creating a new and lucrative market for football club competitions.
What was the reason behind President Biden signing a bill that gives TikTok up to 12 months to arrange a sale to an American company?
-The bill was signed due to national security concerns over the Chinese-owned social media platform's data collection practices and its potential to be used for foreign influence operations.
Why did Tesla's stock rise by 14% despite reporting worse than expected earnings?
-The stock rise could be attributed to the market's reaction to Elon Musk's emphasis on Tesla's AI initiatives and the announcement of a more affordable vehicle lineup by 2025, which may have overshadowed the company's current financial struggles.
What are the potential implications of the New York Stock Exchange considering 24-hour trading?
-24-hour trading could lead to increased liquidity and attract more global investors, particularly from Asia. However, it may also increase volatility, affect the mental health and work-life balance of traders, and necessitate more reliance on AI for monitoring the market.
What is the potential impact of the ban on non-compete agreements on innovation and the protection of intellectual property?
-While the ban may lead to increased competition and higher wages for workers, there are concerns that it could compromise companies' ability to protect their intellectual property, potentially leading to a decrease in innovation.
Why is the discussion around Meta's increased spending on AI investment causing concern for investors?
-Investors are concerned that Meta's increased spending on AI signals a shift from a focus on profitability to a costly investment phase, similar to the company's previous investment in the metaverse, which did not yield expected returns.
What is the potential cultural impact of 24-hour trading on Wall Street and financial services workers?
-The shift to 24-hour trading could erode the traditional workweek and weekend structure for financial services workers, potentially leading to increased stress and a blurring of work and personal life boundaries.
Outlines
📈 Market Vitals and Earnings Reports
The first paragraph discusses various market and corporate updates. It highlights the value of coins discarded by Americans, Tesla's earnings, the ban on non-compete agreements, and 24-hour trading at the New York Stock Exchange. It mentions Spotify's increased revenue and profit despite layoffs and price hikes, Netflix's rise in memberships and their decision to stop reporting certain metrics, Meta's revenue growth and investment in AI, a potential agreement between FIFA and Apple for a new soccer tournament, and the legislation involving TikTok's potential sale to an American company.
📊 Streaming Services and Consumer Behavior
The second paragraph delves into the performance of streaming services, particularly Spotify and Netflix. It discusses the potential reasons behind Spotify's increased revenue, including market consolidation, pricing power, and consumer spending habits. The conversation also touches on Netflix's decision to stop reporting certain subscriber numbers and the implications of this decision for transparency and investor relations.
🤝 Potential FIFA and Apple Tournament
The third paragraph focuses on the potential agreement between FIFA and Apple for a new soccer tournament and its potential impact on the sports and entertainment industry. It discusses the financial and cultural significance of such a tournament, the involvement of multiple European teams, and the possible benefits for Apple TV+.
📉 Tesla's Financial Performance and Future Plans
The fourth paragraph covers Tesla's financial performance, noting a decline in revenue and profits. Despite the poor financial results, Tesla's stock price increased, possibly due to the company's focus on AI and future affordable vehicle launches. The discussion also addresses the skepticism around Tesla's claims and the importance of focusing on the core automobile business.
🛑 End of Non-compete Agreements
The fifth paragraph discusses the Federal Trade Commission's (FTC) ban on non-compete agreements, which will allow millions of workers to change jobs more freely. The speakers argue that non-compete agreements are a transfer of wealth from younger employees to shareholders and that their elimination could increase wages and promote a more competitive business environment.
🕒 Consideration of 24/7 Stock Trading
The sixth paragraph explores the potential shift to 24-hour trading at the New York Stock Exchange. The speakers express concerns about increased volatility, the mental health impact on investors, and the potential erosion of personal time for financial services workers. They also discuss the cultural implications and the need for a balance between accessibility and the well-being of market participants.
🏆 The Impact of Celebrity Endorsements in Politics
The seventh paragraph speculates on the influence of celebrity endorsements in politics, particularly how Robert F. Kennedy Jr.'s political stance could affect the presidential race. The discussion includes a humorous anecdote about a proposed donation to Kennedy's campaign in exchange for choosing Aaron Rodgers as a vice-presidential candidate.
📅 Upcoming Economic Reports and Predictions
The eighth paragraph briefly mentions the upcoming economic events, including earnings reports from major companies like Apple and Amazon, the Federal Reserve's interest rate decision, and unemployment data for April. The speaker also shares a prediction about the political impact of Robert F. Kennedy Jr.'s popularity in the upcoming election.
Mindmap
Keywords
💡Non-compete agreements
💡Spotify
💡Netflix
💡Meta
💡AI (Artificial Intelligence)
💡TikTok
💡Stock Market Trading Hours
💡Earnings Reports
💡Investor Relations
💡FIFA and Apple
💡Tesla
Highlights
Americans throw out approximately $68 million worth of coins each year.
Discussion on Tesla's earnings, the ban on non-compete agreements, and 24-hour trading at the New York Stock Exchange.
Spotify reported a first quarter revenue increase of 20% from the previous year and a record high $180 million profit.
Netflix memberships rose by 16% in the first quarter, substantially higher than predicted.
Meta's revenue increased by more than 27% from last year, beating analyst expectations.
FIFA and Apple are nearing an agreement over the TV rights to a new World Cup style tournament for club teams, potentially valued at about $1 billion.
President Biden signed a bill giving TikTok up to 12 months to arrange a sale to an American company before it gets banned in the US.
The market is consolidating, leading to fewer options and increased pricing power for streamers.
Gross margin for Meta for the quarter was 27.6%, up around 250 basis points from a year ago.
The average US consumer is doing better than perceived, as indicated by increased revenues and costs.
Streaming audio has an advantage over streaming video in terms of lower churn rates.
Netflix's decision to stop reporting quarterly subscriber numbers and revenue may indicate a plateau or decline in US subscriber growth.
The Federal Trade Commission (FTC) has banned non-compete agreements, potentially increasing average annual earnings by more than $500.
The New York Stock Exchange is considering 24-hour trading, seven days a week, to increase liquidity and attract global investors.
The potential downside of 24-hour trading includes increased volatility and negative impacts on the mental health and lifestyle of financial workers.
Earnings from Apple and Amazon, the Fed's next interest rate decision, and April's unemployment data are upcoming economic events to watch.
The influence of RFK Jr. as a political figure and his potential impact on the presidential race is discussed.
Transcripts
this week's number $68 million that's
the value of coins Americans throw out
every year why did Buddha start pulling
coins out of his Butthead because change
comes from
[Music]
within little dad joke thread the needle
there pretty well today on propy markets
we're just discussing Tesla's earnings
the ban on non-compete agreements and
24-hour trading at the New York Stock
Exchange here with the news pulling data
out of his ass is propy Media analyst Ed
ellson Ed what is a good word I'm very
well Scott I enjoyed all photo shoot
yesterday that was fun oh I bet you did
you you little attention I liked
how uncomfortable you were on the camera
that was kind of cute yeah I know I was
but I like when they started telling you
to wear my clothes cuz yours look so bad
that was my favorite part you told me to
wear your clothes which as I think
everyone else wanted me to wear my
clothes yeah which as the boss that
qualifies as them it's Collective we
right yeah apparently what my my clothes
aren't form fitting and yours are right
no yeah mine mine accent my my uh my
human growth hormone at the age of 49
get to the headlines Ed let's start with
our weekly review of Market vitals the
S&P 500 was volatile the dollar fell
Bitcoin dropped and the yield on 10year
treasuries climbed shifting to the Head
headlines Spotify reported a first
quarter Revenue increase of 20% from a
year ago and a record high $180 million
profit these earnings come after a
trying year for Spotify where it laid
off more than a quarter of its Workforce
and raised prices for the first time in
a decade Netflix memberships Rose 16% in
the first quarter from a year earlier
substantially higher than predicted
however the streaming company announced
it will stop reporting quarterly
subscriber numbers and revenue per user
starting next year the stock plunged to
9% on that news that's its worst
performance in 2 years meta's Revenue
increased more than 27% from last year
beating analyst expectations but shares
fell more than 15% after the company
issued lighter than expected Revenue
guidance and also announced that it
would increase spending on AI investment
FIFA and apple are nearing an agreement
over the TV rights to a New World Cup
style tournament for Club teams the deal
could be valued at about $1 billion and
the monthlong tournament will be hosted
in the US in 2025 and finally President
Biden signed a bill into law that gives
Tik Tok up to 12 months to arrange a
sale to an American company before it
gets banned in the US Tik Tok CEO said
it would challenge the law on grounds
that it violates the First Amendment
Scott your thoughts so in order Spotify
first quarter Revenue increase of 20% it
feels like the year of efficiency is
that people are doing more with less
which obviously impacts the bottom line
in a very positive way but also I wonder
if a lot of this can be reverse
engineered to a couple industry Dynamics
the first is that the market is
consolidating and there's fewer options
so people are you know and they're
cracking down on password so it is given
the streamers not only across video but
across music pricing power and they it's
no longer about as much about growth as
it is about profit ability but the tail
the Wags The do here is Netflix and
Netflix has given everyone cloud cover
to raise their prices because they have
pretty aggressively raise their prices
and I wonder if this is I mean Spotify
is really the kind of the it's almost I
would imagine as dominant in their
Medium as Netflix is
in video so good for them my guess is
they're I don't know if they're also
cracking down on password sharing or
what's what's going on but I would
imagine this is they're going to have
some of the same champagne and cocaine
of increased revenues and costs yeah I
think that's exactly right and it's the
same thing we saw with meta a year ago
they increased the revenue which is a
combination of price increases as you
mentioned as well as a jump in usership
plus they reduce costs they're they're
spending Less on content and they've
also brought head count down around 20%
from a year ago so the result is and the
thing that Wall Street is so excited
about is just this
dramatic margin expansion gross margin
for the quarter was 27
.6% that's up around 250 basis points
from a year ago I think the question for
me would be how have they been able to
increase monthly active uses by 20%
despite increasing prices my best guess
would just be that the average US
consumer is doing better than we think I
mean we saw Bank earnings the other week
which showed that consumer spending is
actually accelerating hence the increase
in their credit businesses we've been
seeing similar stories coming out of the
FED data so I think maybe the story
behind the story here is that consumers
are generally doing fine maybe better
than fine and the advantage that
streaming audio has over streaming video
is the churn because pretty much every
streaming video player has I think
between like four and 8% churn which
means every year you have to almost
replace a third of your customer base
except for Netflix because of the
absolute volume of content always seems
to be something you're kind of looking
forward to watch whereas a lot of people
download the entire season at Ted and
then cancel Apple television whereas
with music it's different right there's
something you want to listen to every
day because it has everything so it
seems that after kind of five or seven
years of underperformance Spotify is
finally getting their day in the Sun and
I I'm actually a big fan of Spotify it's
hard to imagine one
app could distill an entire medium down
to an icon so Spotify has done I think a
pretty pretty impressive job Netflix
memberships up 16% I thought that was
amazing I mean that's a huge number the
thing that was most interesting though
was that they their decision to stop
reporting quarterly subscriber numbers
and revenue it's like buying clothes
that accentuates your the positive like
me if I were a womaned I would wear a
lot of miniskirts cuz I for I have
fantastic legs if I were a woman so I
would be like hiking up the skirts I'd
be in a lot of Dad would show up Daddy
has more legs than a bucket of chicken
if Daddy was a mommy I'm sure that's a
hate crime but anyways my point is you
want to accentuate Brunello Cinelli a
size too small that's it right anyways
size too small that hurts that hurts
that's of you said that my clothes are
too big well yeah you look you literally
look like an old man that takes no pride
in your appearance size too small that
hurts my feelings okay anyways they're
all trying to come up with the right
words that will that will make their
company and numbers seem the strongest
so alphabet doesn't break out by
division its numbers because people
would figure out that it's essentially
search in the Seven Dwarves that almost
everything loses money YouTube makes
really good money by most standards but
they have this Juggernaut the world's
largest toll booth ever constructed in
the history of mankind called search so
they'd rather just report one kind of
lumpsum and I'll break it out they also
don't want to give too much information
to their competitors the only thing
that's a little bit scary here is is
that if I tried to read into the te
Leeves here what they probably realized
is that they're going to have pricing
power in international growth but that
everyone in America is already signed up
and they may in fact have a few quarters
where they have flat or negative
subscriber growth in the US and that'll
be the lead in every headline in NE
Netflix could report great Revenue
growth great profitability growth but if
their largest market begins to Plateau
or even decline in terms of subscriber
growth that'll be the lead and investors
will take it down so imagine they've
said our numbers are going to be um fine
we'll have good growth but that growth
will be an international which will
likely have lower Revenue because you
can't you don't have the same pricing
power in markets where they don't have
the same disposable income this is me
guessing but the choice of words is
surprisingly deliberate and strategic in
earnings calls and the way they report
data doesn't that just annoy you I mean
one because you know one of the central
issu ues of these Hollywood strikes was
transparency around data and viewership
and what Netflix promised sag aftera and
then delivered on for a second was you
know we're going to be more transparent
we're going to start reporting these
detailed statistics about subscriptions
and so the idea that they would now walk
back that
transparency to me is just a betrayal of
of what they agreed on and then the
other reason that I don't like this is
just as an analyst I want more data I
want a better
you know more comprehensive accurate
understanding of the company and this is
a subscription business I want to know
how many subscribers they have Netflix
is saying actually we don't we don't
want you to see our business in full we
don't want you to have a comprehensive
understanding likely because they think
you know we we don't think you'll like
what you see but doesn't this just kind
of annoy you as as an analyst and and as
an investor well Ed there's a lot of
things that annoy me um
look the question is should a company in
a certain sector be required to have
certain
disclosure around certain top if you're
a subscription business you are
described as a media company with a
subscription component should they say
you have to report average revenue per
user churn you know should there be
recording requirements just as they have
a definition of iub the bottom line is
companies have kind of been just musling
around analysts and the investor public
for a while and my friend Richard
creamer calls it most analysts sick of
Fant and stenographers they the only
analysts that get access to the company
and the CEO are people who are willing
to basically you know smear smear
Vaseline over the lens and make them
look good no matter what I I agree they
should be um there should be some sort
of I don't know standard metrics meta
Revenue increase more than 27 from last
year that's incredible a company of this
size up this much shares falling 15%
similar to Netflix I think a lot of that
the market will always look for excuses
around why the stock got taken down I
think a lot of times it's just it's kind
of aams Razor I think it's just that the
the stocks got out a little bit over
their skis I mean these stocks have had
such incredible growth I think the
market was just looking to let a little
air out and also the AI investment thing
it basically kind of connotes that we're
entering a new arms race called AI which
is exceptionally
expensive and I wonder if if investors
thought okay the year of efficiencies
that we really loved is coming to a
close and we're going back into this
investment phase in Ai and while AI
holds great promise the the one thing
that's guaranteed the reality is it just
costs a ton of money and so they
took the stock down any thoughts I would
bet that a lot of investors were having
flashbacks to a few years ago when the
company decided that they were going to
spend 10 billion a year on the metaverse
and as we've discussed and as you
predicted many years ago that was a
terrible idea that's been proven as
measured by VR headset sales or or lack
thereof the difference to me here is AI
is not the metaverse and unlike the
metaverse which had basically no
relation to meta's underlying business
which is advertising AI can do a lot for
meta's ad ad business it can optimize
the algorithm it can boost engagement
it'll improve targeting which will
increase increase usage by advertises
it'll also allow meta to increase prices
on their ad sales I mean the upside on
AI for meta to me is huge and it's right
there for the taking so when I look at
this my initial reaction is that
investors have probably unfairly
punished meta here and I think it's
because they're conflating spending on a
terrible business which is metav with
spending on a great business which is AI
yeah no AI AIO um
like uh I really hope this AI think pays
off because you amount of money and hype
around this is just or that it
destroys Humanity I mean our
expectations are just so big one way or
the other uh yeah yeah we'll see I think
everyone's
wondering at some point we're going to
have to get to the show me part of the
show where the just the Staggering
amount of money that's going into this
thing is going to they're going to have
to show signals or start reporting hard
metrics around how this starts to pay
off I think they'll get another sort of
year of leeway but at some point people
might go is there a lot of jazz hands
and cuz the the the Investments they're
making here are pretty are pretty
extraordinary FIFA and apple are nearing
an agreement basically FIFA and apple
want to recreate the World Cup I'm super
excited about this I wonder how many
games these young men can play and they
are young men um because between the FA
Cup the the you know the Euros the
whatever you call the thing I'm going to
in Germany the domestic leagues La Liga
the Prem
Etc how many how many tournaments can
they support but when you have apple and
FIFA behind
you it's pretty valuable and FIFA has I
mean apple has a reputation for doing
things in a very high quality way FIFA
has a reputation for being corrupt
hiding in between the
nether Netherland of international law
or what or the lack thereof but Apple SD
pockets they need something to really
kind of ignite Apple TV plus so to speak
I think it's a great idea go what do you
think I think it's a really good idea I
mean I I find it strange that the the
headlines are reporting it as a new
tournament there's it's it's a reframing
of a tournament that already exists
which is the club World Cup and that's a
competition that basically takes the
best team from each continent and has
them play and then we find out who the
best team in the world is what's
interesting is that it's not a very big
deal among football fans compared to say
champions league and I think the reason
for that is because it includes all
these teams from outside of Europe and
those teams just aren't any good like
last year the final was between Man City
and this no-name Brazilian team flu man
now what's different about this
tournament is that it's now going to
take multiple teams from each continent
which crucially means it's going to take
multiple teams from Europe so now you're
going to see Man City versus you know
Arsenal Chelsea Barcelona Real Madrid
those are the games that make all of the
money so I think this is a huge deal for
Apple if it goes through because it's
possible that this new reframing of an
existing tournament could become the
most culturally relevant competition in
all of football besides the
international World Cup so I think if
this works it would be hugely profitable
I was also wondering just as a brand guy
if it represented a seating or a
transfer of brand equity and passion
from National Brands to Club brands in
other words do you have more people more
passionate about Liverpool Man City and
Chelsea than you do about team England
yeah I think that's a great that's a
great point and I I'll bet there's
there's a lot more money in it plus
they'll be doing it every year I mean
the World Cup's only every four years
same with the Euros Champions League
generates more than $2 billion do per
year if this is the ultimate
tournament I don't know maybe it'll be
generating double this Deal's worth a
billion also just I think about it the
cost to put it on is probably less
because it can't be inexpensive both
from a capital and a human capital
standpoint to pull you know bukay Saka
from Arsenal and have him train with the
team England and get to know the Players
new uniforms new coach like a new kind
of operating dynamic as opposed to all
right Arsenal just head to Atlanta for
the game so this to me feels like a
winner Ed yeah tick Tok hello ladies I I
look you nailed it I said on billah two
years ago I like to name drop uh did I
tell you I'm going on B Mar tomorrow by
the time this say you'll have already
been on it that's right get get this get
this back to me I'm going on with Don
Lemon and wait hold on RFK Jr RFK what
should I ask RFK or we're going to be in
the overtime panel discussion together
what should what should what would you
say to RFK Jr on the overtime panel on
Bill Maher what's your workout routine
he's in good shape he's 7 years old and
he's in really good shape yeah yeah no
I'm gonna ask him that you and RFK yeah
me and RFK junr do you have a plan for
what you're gonna ask him I guess I
would ask him like
is your radical
narcissism and Reckless views on um
vaccines a uh going to accidentally
elect a fascist and um create tremendous
unwarranted death disease and disability
among children MH there's that that's
probably where I would kick it off
I don't know and then Don Lemon me and
dmon the Very handsome Don Lemon um
anyways I'm excited about that oh any
I'm sorry Tik Tok Tik Tok like I'm
thrilled about this I think people get
it wrong I think that this they're not
going to lose their Tik Tok I think this
is smart I think we're going to look
back and across a bunch of things we uh
regret about big teac one of them will
be letting the ultimate propaganda tool
in to create a frame through which our
youth views America and the rest of the
world I think it's stupid I think
Americans are easier to fool than
convinced they've been fooled and I
think that's what's going on here we do
need systemic wide privacy legislation
but there's no reason why we can't walk
and Sho gum at the same time and the
thing that I think the media people Miss
is that it's framed as a ban and you
know it's all or nothing and I just
don't think that's accurate I think
we're probably going to see an actual
divestment once they're forced to divest
they got 12 months to negotiate with the
White House to figure out some sort of
accommodation and figure out is there a
way we could make you comfortable and
continue to operate here Saturday was
literally the be one of the best days
this is how old I'm getting I couldn't
break away from C-SPAN and I started
calling people saying this bill might go
through and what the are you
calling me for uh but in one Fell Swoop
we passed a bill for Aid to Ukraine Aid
to Israel and uh forc divestment with
any year of Tik Tok and I was just I
thought all three of those things are
really important I think speaker Johnson
deserves credit so but yeah I've wanted
this for a couple years or and I thought
it was going to happen I'm glad it is
but again I don't think anyone's going
to lose their Tik Tok we'll be right
back after the break with a look at
Tesla's
earnings we're back with profy markets
Tesla reported worse than expected
earnings for the first quarter with
Revenue falling for the first time since
2020 and profits dropping more than 50%
year-over-year the company also burned
through $2.5 billion do that's its
largest free cash outflow ever however
Elon Musk also vowed to launch their
more affordable Vehicles as soon as 2025
and the stock Rose
14% Scott this was by almost every
metric a pretty awful quarter why do you
think the stock Rose I don't know maybe
it was the opposite to date it's been
the worst performing stock in the S&P so
maybe there's some people who felt it
was oversold and came in musk has
you know obviously reputation is someone
who just has a incredible insight into
how to leverage technology or new
technologies so right now the company is
playing a serious game of jazz hands and
they're like let's talk about our energy
revenues and the margins there let's
talk about AI let's talk about
autonomous robot taxis let's do anything
but talk about our Core Business which
is an automobile business which is like
any other automobile business getting
increasingly shitty and hard to maintain
profits in and you're seeing that at
Tesla and the market seem to really like
the conversation around going all in on
AI I think it's sort of a couple things
that people felt maybe the stock was
oversold although I don't think that's
the truth at all I think it's when you
look at it relative to other big tech
companies it trades at a higher multiple
than big Tech and if you look at it
relative to auto companies it trades in
an
insane multiple so they want to pretend
they're anything but an automobile
company and it seems like he emphasized
in the call that he wants to really
highlight or pimp out the fact that
they're buying so many of these gpus
and says they're going to buy more it's
like don't look at don't look at the
automobile side of the company we're AI
right so he's also talking about a new
more affordable EV I just think that's
crazy I don't think he's going to win a
war in affordability against China uh
with byd I mean byd is trading it an
eeve to eitaa of get this of six and
Tesla trades at 35 I mean Google meta
and Microsoft are 2021 26 so Tesla which
whose business appears to be in
structural
decline uh trades at a higher multiple
than these amazing companies with IP and
you know yeah the real AI companies yeah
meta is growing at 27% And Trades at 21
so I just think I think the market on
this day at least seemed to think that a
was either oversold or that uh musk plus
massive investment in AI is chocolate
and peanut butter yeah Elon said I mean
his his quote was if you value Tesla
just as an company you fundamentally
have the wrong framework and he also
said we should be thought of as an AI or
robotics company the auto business as
we've said did terribly deliveries down
8% also seen price cut so revenues down
13% gross margins down from 19 to 16%
the list goes on and it makes up 80% of
the total
business do you buy this Tesla is more
than a car company argument no and I
want to identify as a giraffe I mean it
just look it's an amazing automobile
company it deserves to trade at the
upper range of what automobile companies
trade at but this is what they do they
wrap steel around a battery and four
tires and they do an amazing job of it I
think it's an amazing car but he wants
you to believe it's anything but what it
is he actually his track record in AI is
pretty I don't know pretty disastrous he
was involved to his credit he had he's a
Visionary on AI got involved very early
in open AI but he doesn't know how to
manage it or turn it I mean arguably the
stupidest decision in business over the
last 10 years from a well standpoint not
that he needs it was Elon Musk leaving
in a huff from open Ai and I I get the
feeling Hees goes home every day and
twists the legs off his Barbie doll or
kicks a dog and thinks I could have
owned 20 or 30% of open AI if I just
wasn't such an he playing
catchup in Ai and there's just no doubt
about it so I
don't again you know look over here
don't look at my core business because I
want to pretend I'm something I'm not
we've also been hearing a lot about Robo
taxis um you earlier this month Elon
tweeted that the robot taxi would be
unveiled in August August 8th was his
date and then he also said on the
earnings call that this Robo taxi Fleet
could be quote the biggest asset value
appreciation in
history but the report gave us no
details on the roll out it gave us no
details on any regulatory approval it
didn't really give us details on
anything so as it stands if you were an
investor would you be taking the
robotaxi business seriously at all I
think he's lost a ton of credibility we
he said in
2017 I think within two years there'd be
a million autonomous Teslas on the road
well 2019 kind of came and went let me
think five years ago and I can prove
that I mean I think you wearing Bruno
Kelli will result in the largest asset
appreciation in history that has about
as much
credibility yeah okay big words big
words how and
[Music]
why the FDC has banned non-compete
agreements which prevent employees from
working for or founding their own
competing companies after they leave
their job according to the FDC one in
five American workers are subject to
non-compete agreements so once the
ruling goes into effect 30 million
people will be free to change their jobs
at will The Only Exception will be made
for existing non-competes with senior
Executives but all told it's estimated
this will increase average annual
earnings by more than
$500 Scott you've been advocating for
this for for a while you've actually
wrote A A No Mercy No Malice blog post
about it why do you think this is a good
idea it's simple the more people bidding
on your labor the more potential people
who want to rent your labor the higher
the rents you can charge and non
competes do nothing but reduce the
number of biders on your labor this is a
straightforward transfer of wealth from
employees who tend to be younger to
shareholders who tend to be older yet
again another transfer of wealth from
young and middle class earners to
wealthy senior Executives who have
reason I mean if if el2 is purchased but
for $160 million and they don't want me
to compete with them or they for
whatever 6 or 12 months and they can
Define what the competition is I I don't
even think you can justify that but at
least I can empathize with it but
telling a hairdresser that they can't
walk ACR they're non-competes in
hairdressers now and in chefs what's
next non-competes for baby
sitters again this is just this is just
so wrong and let me just say Lena Khan
is could potentially replace Margaret
best year as my new Brain Crush I like
that she's doing this I think it's great
and what do we have in America do we
have a a dirth of corporate profits no
they're at all-time highs what we have
is as a percentage of the economy wages
continue to not be not outpace inflation
they did the last quarter but look for
the last 30 or 40 years the tension
between capital and labor capital is
beating the out of Labor which
means we need more laws that that
transfer back some of that capital from
shareholders to employees and this is
one of those things I love this what do
you think well I just think the startat
that really supports your point about
hair stylists and cashiers and security
guards Etc is that onethird of minimum
wage jobs are subject to non-compete
agreements a third which is kind of
insane but you know the US Chamber of
Commerce and all these other big
business lobbying groups are suing the
FDC to block this they believe it is
quote unnecessary and unlawful and their
big complaint is that this is going to
compromise their ability to protect
their IP could you take us through what
that means exactly why they're concerned
about that and why Banning non-competes
might affect intellectual property and
and the protection of that IP yeah
you're the AI team the like deep BS AI
team at Snowflake and there's 18 of you
and you all walk across the street to a
competitor that's the fear that those
people take that IP now there are laws
that are distinct from non-competes that
say if you use our IP and people have
been fired and arrested and some even
gone to jail if you take a disc with the
code that's illegal I don't think you
can I don't think you can basically make
employees and dentur servants I think
they should go where they should go and
your job is to create compensation and
IP that people decide to stay with you
out of you know personal decision you
could argue that at a senior level
because trade secrets are so important
that you might have Garden leave
policies or you might have some sort of
non-compete for a certain amount of time
not very long but when you have
non-competes at every other level it's
just simply put I mean the data that
struck me it's estimated that this that
this law or this change would increase
average annual earnings by more than 500
bucks how the can you be against
that how are people saying oh Labor's
making too much money the average the
average earner is making too much money
and corporations aren't doing well
enough I mean come on this is this feels
like a no-brainer I'm really I'm really
happy about this I trust it'll hold up
in the courts I think God I just it just
is so shocking and exciting to me that
America keeps getting it right lately
yeah just some statistics about what a
good thing it is I mean it's in 2008
Oregon decided to ban non-competes for
hourly workers and that increased
average wages by
3% Hawaii made a similar move back in
2012 for Tech workers and that increased
wages 4% and then I think the biggest
piece of evidence for me that this is a
good idea is that California has banned
non-competes basically forever I mean
since the 19th century they've banned
them and despite that it remains the
largest state economy in the US it
contributes $4 trillion do in GDP every
year it's home to the largest companies
in the world and in fact a lot of people
and scholars believe that it's because
of the non-compete ban that Silicon
Valley ever happened in the first place
because you know it promoted competition
between Engineers between companies
which led to this highly productive and
highly competitive business environment
I guess the only thing I would ask you
is you know is there anything we're
missing is there any downside that we're
not factoring in here the
catastrophizing will be that there will
be chaos and that you have you'll have
full
teams right before product's about to
launch go to the highest bidder and take
all of their human capital and their IP
over to the competitor next door and
it'll create a lack of innovation and
Chaos across companies that just is not
born out as a matter of fact the FTC
estimates that an additional 8,500 new
businesses will be created each year and
we have the case study and you just
brought it up but a bear is repeating
just AI alone in the Bay Area has
recreated by value the entire Global
automobile industry in just several
weeks or increase the market the market
cap creation of these companies it
Rivals the entire market cap of the
entire Auto industry and guess what
they've been operating with this with
this Banning of not beete so are are the
other 49 states for some reason more
susceptible and I mean it's just this is
an easy one this is an easy one yeah
does it make it a little bit harder for
companies are they going to have to pay
employees more might it hit their
bottomline earnings when they can
basically sequester an individual from
the rest of the market in terms of
renting out his or her labor yeah
probably and guess what that's a good
idea we need we need to give restore
more leverage to workers from from
employers we'll be right back after the
break with a look at 24-hour Trading
we're back with Prof G markets since the
1870s the New York Stock Exchange has
kept regular trading hours allowing
stocks to trade from morning to
afternoon schedules have shifted through
the years for example the exchange was
open for business on Saturdays until
1951 but today trading hours are Monday
through Friday 9:30 to 4: however that
might change
the New York Stock Exchange is now
considering 24-hour trading 7 days a
week this move could legitimize Round
the Clock trading a trend that's grown
alongside cryptocurrencies and platforms
like Robin Hood Scott what do you make
of this news well you could argue this
is an attempt to keep up in terms of
innovation you know I would argue it's
probably the exchange is wanting more
money because it would it's hard to
imagine there won't be more trading if
it's 24 by7 versus what is just what 35
hours a week right now and this what
this potentially does is it opens to a
stock market to more Asian investors the
thing I don't like about this is that I
like the idea of having a cooling off
period and that if something happens on
a Friday the stock goes crazy if it goes
too crazy they have circuit breakers
they shut it down until people can kind
of take a breath but what we also have
is something happens on a Friday you
have the weekend to take a beat and wrap
your head around it and one of the
reasons we had this run on Silicon
Valley Bank
is that there was a lack of friction
around transferring your deposits
because everyone can now transfer
deposits off their phone and I just
wonder if it creates more volatility
when at 300 in the morning there's some
sort of bad news or a strike in Iran and
people can go on and start selling like
crazy and then people feel like they
can't go to sleep or they need alerts on
their phone and the other thing I don't
like about this is I do not think it is
good for people's mental health I have
paired my Holdings in publicly traded
stocks to probably 15 or 20% of my n
worth because I just hate checking my
phone and what's crazy is because I have
a
scorecard the the number I get every day
from my stocks has a a
disproportionate impact on my psyche you
know because the other stuff doesn't
have a a number on it so I don't I don't
know it just feels like the
financialization of everything I think
it was coming it's hard to argue against
it but I don't personally I don't like
it well I wanted to get your thoughts on
sort of the cultural implications of a
move like this I mean I know my friends
who work on Wall Street and you know
sales and trading and even guys who work
in hedge funds the only thing that
protects their weekend really is the
fact that they can only make their
trades from 9:30 to 400 P p.m. Monday
through Friday and then they get to take
the weekend off so I'm wondering what
what you believe this might do to the
culture of Wall Street and how it how it
could impact the lifestyle of basically
any Financial Services worker who might
be listening to the podcast right now I
mean the bottom line is this just going
to be harder just going to be I remember
um I have a close friend of mine worked
for a hedge fund and he would have to
wake up really early to like look at the
European markets you know it's just it's
just like that the markets never rest
means that a lot of these people are
never going to get the rest themselves I
also wonder if it's going to
expedite the incorporation of AI that
will kind of ser as Bots going out there
and monitoring everything and looking
for
you know keeping tabs around okay if
there's this level of volatility you
need to wake me up or I don't know it
just feels like a lot of this is going
to I wonder how much of this additional
human coverage that's needed is going to
be accomplished with Bots and I think
one of the things that prompted this was
crypto which is you know can be traded
24 by7 but also there's this startup
that's backed by Steve Cohen of of
point72 and it's this startup called 24
exchange and they recently applied for
SEC approval to launch the very first
247 Stock Exchange so I think this is
also kind of a reactionary move maybe to
fend off competition from crypto and
also from this new proposed Stock
Exchange but just a thought
experiment you know if it were up to the
market and the 24x7 exchange and the
current 930 to 4m exchange both had were
at a similar position in terms of
liquidity
who do you think would win what do you
think the market would decide it prefers
because there's you know the mental
health benefits of the current framework
but then there's also the possibility of
just increased liquidity and as as you
mentioned increased interest from
investors around the world like in Asia
so what do you think the market would
say is the best system you mean Will the
Market opt for increased
financialization and liquidity and
additional trading volume fees or a
concern for the mental well-being of
Americans let me think let me think I
Ponder I Ponder we're going to 24 by7
and it's not going to go back you know
and Traders will like it if Traders are
consumers it's like probably
having I mean there was probably some
benefit to having linear TV where if you
didn't watch channel 7 at 8:00 pm on
Friday nights and 1972 you missed the
Brady Munch that might have been better
for us than having it accessible all the
time
this is the equivalent of streaming
video versus linear right it says you
can have ond demand trading at any time
and you can binge trade if I mean I just
think like what happens when Traders
start getting ridiculously high
and they can trade at 2
a.m.
because who knows they might do better
they might outperform the
market some of the trades I've made have
definitely been feel like they're
inspired by Meth we will look back on
the 9:30 to4 trading day with nostalgia
we'll look back on it think oh you know
Florence Henderson we're just going to
feel good about it and not know why like
how we ever put up with it let's take a
look at the week ahead we'll see
earnings from Apple and Amazon we'll
also hear the fed's next interest rate
decision as well as the unemployment
data for April do you have any
predictions for us well my predictions
as I started thinking about RFK Jr
because U as I said I'm going to be on
with him on on Bill Mah and my
prediction is the following we talk
about so many things that impact the
presidential rate
whether it's immigration or bodily
autonomy or the Middle East what we're
not talking about is I think the thing
that's going to decide the who wi's
president is RFK Jr he's already pulling
significantly into the double digits and
what people forget is the reason why
Bill Clinton won an unknown Governor
from Arkansas was because of Ross perau
Ross perau I think got about I don't
know 15 or 18 points and 2third of it or
60% of it came from Bush which was
enough to put Clinton over the top Ralph
nater handed the presidency to George
Bush over Al Gore everyone that voted
for nater would have gone to gore the
majority of them and RFK Jr now has a
big enough base and if he stays in the
race and I think he will because I think
he's a total narcissist he'll stay in
the race and with those sorts of numbers
it really just comes down to who he
pulls from and so far it looks like he's
pulling more
from Trump then then I don't know if I
told you this I actually talked to a
friend of mine and we actually got not
fairly down far down the road but we got
the money together and I said let's
offer the RFK campaign a million bucks
if they pick Aaron Rogers is the VP or
at least say a million dollars don't
even say why we love Aaron
Rogers and we'll give you a million
bucks in the campaign because he needs
money to get on all these ballots we
need a million bucks we'll give you a
million bucks if you put Aaron Rogers
cuz I thought you put Aaron roggers on
the campaign
he's this big broy stupid great like
conspiracy guy who believes in that you
know vaccines were were human guinea
pigs right I think that would help pull
from Trump yeah and I thought this is
how we get Biden in office let's just
give a bunch of money to RFK if he gives
if he picks Aaron Rogers instead he
picked a so's wife ex-wife yeah he
picked an his Serge's ex-wife who
believes that you can solve infertility
by getting more Sunshine well you know
why I picked her well 15 million reasons
why isn't she going to give isn't she
going to give him money she's got the
money she's got the money yeah exactly
it wasn't for her understanding of uh
geopolitical issues and her deep
understanding of the six Fleet in the
Indian Ocean Jesus how stupid is
that I mean really really maybe that's
what you should ask him yeah what the
are you thinking tell us about your
running M that's yeah anyways uh but
what happen what happened to the Aaron
Rogers fund we circled the money it was
pretty easy and and we thought okay
what's the best Outreach to the campaign
and then he announced that he was going
I thought when the rumor was he was
going to pick this ex-wife of Sergey
who's sounds like a you know a modestly
talented lawyer I thought I I didn't
think that was real I thought he's crazy
but he's not stupid ends up he's both
anyways I'd save me a million bucks but
look it on November the 5th or whenever
the day is after the election what we're
going to realize is that RFK J
specifically who voted for him
determined who won president thank you
for watching this version of propy
markets check out our pod feed for
office hours on Wednesday and we'll be
back with a fresh take on markets every
Monday
[Music]
تصفح المزيد من مقاطع الفيديو ذات الصلة
Has the Nvidia (NVDA) and SMCI Bubble Burst?
Nayax (NYAX) CEO on E.V. Exposure
Nvidia 财报分析! 下一个增长点在哪? 风险在增加?【美股分析】
How Netflix Makes Money: The Secrets Behind Its Business Model
Palantir Eliminates Doubters on Earnings Blowout (Q2-2024) | PLTR Stock
Billionaire investor Ron Baron: Expect Tesla's stock to go up 'huge' now
5.0 / 5 (0 votes)