AI’s $400 Billion Test Is About To Begin

When it comes to home improvement, even the most experienced DIYer has a limit. I'm not going to come in here with the blowtorch and get it hot and solder and put the copper pipes to the counter. I'm not doing it. I call it very nice man to handle it. When to call the experts and when to do it yourself. That's this week on Explain It To Me. Find new episodes, Sundays, wherever you get your podcasts. Megan Rapinoe here. This week is our last regular episode of A Touch More before I kick off a limited series A Touch More at the Beautiful Game, a special series for the World Cup featuring in-depth interviews with some of soccer's biggest stars. But for this week, we are closing out the arrow with a special compilation episode featuring our absolute favorite moments and themes from our last 90 episodes of A Touch More. Check out the latest episode of A Touch More wherever you get your podcasts and on YouTube. Line disease is one of the fastest growing threats to human health around the world. It's often difficult to diagnose. It may be difficult to treat. And now we have a vaccine that is safe and effective in preventing it. That is, we had a vaccine back in the early 2000s. But then the line vaccine became a cautionary tale. That's this week on Unexplainable wherever you get your podcasts. Today's number 59. That's the percentage of Americans who say they will not watch any World Cup matches at. What's worse than the US man's national soccer team? What's that? Absolutely nothing, Ed. Are you excited about the US team? No, I'm not excited about the US team. I'm excited about the England team. Team England. Your man, Cole Palmer. Well, he's been left out. You heard that? What? Cole Palmer, I mean, it was just devastating news. Cole Palmer has been left out of the England squad. So a lot of not really much reason for the Chelsea fans to be watching. But I'm still going to be cheering for England anyway. We still got some amazing players on the team. Harry Kane is going to be carrying us to be telling them, you know, team England all the way. But yeah, it's very, very sad about Cole. Cole Palmer did not make the England squad. Because we've just had a bad season. And Cole, I mean, as much as I love him, he hasn't performed. I think this guy is basing his decisions over form versus fame. He also didn't include Phil Foden, who's kind of our other star. Foden, I understand. When I, I, I've been to three World Cup. So I've been to the US, Russia. Last time we did it, whenever it was like 94. And then, and then I was in Russia and then Qatar. And when Cole Palmer was at Ezi, came on the field in the second half. I had lunch with, I forget the name, the guy was the team England coach of the last one. Lovely guy. And of course, I couldn't like stop heckling from the cheap seats. Got a Southgate, right? Yeah, Southgate based on the fact that I've played FIFA once or twice, which makes me a coach. And every time Ezi and Palmer came in, the whole mood, the whole vibe, the whole momentum, the game changed. I mean, why didn't you start them? And of course, he sat there and he was very polite thinking, who the fuck is this guy asking me about football? I didn't even came to imagine how much second guessing that guy, that guy gets. But yeah, I can see, anyways, I'm, I think it's a big mistake not to have, who are the, well, let me put it away. Who are the two or three young stars from team England that everyone's excited about? Ezi's in the squad this tournament and he's been playing incredibly well for Austin. Also, people are very excited about Ezi. Manchester, Saka, of course, everyone's excited about Saka. There's a new defender on Manchester City, Nico O'Reilly, who will be interesting to see. But I mean, the other big star who got left out as well as Trent Alexander Arnold, who's the Real Madrid star. We need to speak to the coach. I am. Let's get him on the phone. Thomas Too Cool. Scott Galloway has some advice for you. You need to stick with your superstars versus, I don't know, whatever this intellectual, I don't know what you would call this. Going for form form over fame. I mean, that's, you know, this show is after an awful start. It's after an awful start. Well, this was, this happens when you go on tour and you have this hangover. I slept 12 hours yesterday and I still feel terrible. This is the problem. I'm not, I'm not sharp right now. Well, imagine doing it when you're like 90 years old and you're with a bunch of children roaming around the nation, trying to figure out what you're going to say tonight that's any different than the night before. I felt like Mick Jagger out with a boy band. Yeah. With, that was in sync when they were still in high school. And what was the highlight for you at the tour? Well, we'll get to that. We're going to do a full review of the tour at the end of the show. So I think I'm just going to launch us into the business stories of the show. What do you think about that? Let's do that. What the hell? What the hell? What the hell? What the hell? Google is making a massive bet on AI and asking investors to help fund it. The company is planning an $85 billion equity offering, which would be the largest stock sale in history. Roughly $10 billion of that investment is expected to come from Berkshire Hathaway, which will reportedly receive a 6.5% discount on their shares. Google's stock fell 4% after the announcement. The fundraising effort highlights the significant cost of competing in the AI race. And Google had already been ramping up spending aggressively in April. It raises projected capex to as much as $190 billion for the year. The timing is notable because anthropic just confidentially filed for an IPO last week. And SpaceX is set to go public this week as well. So some analysts believe that Google is trying to secure the investor capital now, possibly before it has to compete with those other offerings. We've got an absolute whirlwind of huge equity offerings here. We've got SpaceX. We've got anthropic soon to come. We've got open AI. Supposed to come later. Now we've got Google with this $80 to $85 billion equity offering, the largest public equity offering of all time, initial reactions. I just loved reading this. I think it's such a corporate genius. And a tech executive that doesn't get her due is the CFO of Alphabet Ruth Peratt. So first off, this is going to be the largest equity offering in history today. Unless I don't know one of the big three, the other three going out raises more money. And it's kind of the story that or the news story so far has been if Alphabet needs to tap the markets for additional capital with the kind of cash generative chevronaut it is, it's kind of like Warren Buffett taking out a mortgage. It just gives you a sense for how with a how thirsty this cap acts is or how much how much is required to keep up. Now I would argue that's not this. I think they could fund the software balance sheet. My sense is that a CFO's job is to find the cheapest capital possible and use that capital as a weapon to pull ahead of everybody else. That's their job. How do we raise more money less expensively than everybody else? And I think with Ruth Peratt or and what I believe is everyone else, you know, Microsoft and video core we've app are going to maybe the same thing as they're like, okay, look at the valuations they're being paid for supposedly might be paid for, you know, they'll call them to big three and the topic open AI and SpaceX. That is insane. And so what they're saying to the market is, okay, you want some of that upside of incredible infrastructure investment on this brave new world of AI, which has a tam the size of, you know, not ever, but of constellations. Okay, you can get some of that upside with us and there's a whole lot of less downside. If AI doesn't work for alphabet or doesn't live up to the expectations, it's still an amazing business. And so what they're doing is they're cutting the line and saying, okay, if you're, if there's this cheap, IE stupid capital out there that is so dying to get into this business that they'll pay this type of valuation fine. Here you go. We're cutting the line and we're going to take $85 billion off of the table because the cruel truth of capitalism is that every resource is finite. And the amount of new capital willing to go into AI infrastructure bets is finite. And they're about to take $85 billion off the table. So I wouldn't be surprised if we see Amazon, all of a sudden announced a new equity offering. I think this is genius cutting the line and taking $85 billion of cheap capital off the table and saying, hey, folks, look over here. We're we're we're hot. We're in the hot space. And there's less downside with us. I think it's I think it's brilliant because AI has become the railroad boom of the 21st century. And that is everyone agrees it's transformative. But it's more difficult. The harder question is whether or not the people laying the tracks will earn a return on that capital. And every time we've had this kind of cat backs in the past, whether it's the highways, the global telco build out in the late 90s or railroads twice, there ends up with the electric grid. And it's usually a bit of a crash following it as people realize the ROI is just not just not there. But I I love this story. We talked about it yesterday on the editorial call. I just think it's hilarious. These guys are stepping in. front of the little kids. And basically the two for here is Gemini wants to kick and thropic and open AI and the nuts. And they're doing this by stepping on the crud at our artery of their capital raising plants. Yeah, I think that's exactly right. And the thing that you mentioned yesterday is, you know, maybe the pitch to investor is maybe there's less upside for the Google IPO versus the space X IPO, but at least you're protected on the downside. My argument is I think you could argue that there's actually a lot more upside in the Google offering because you've got space X going out more than a hundred times earnings or a more than a hundred times sales, excuse me. I mean, if we were to price Google, which is already an incredibly successful business, at the same multiple of SpaceX, Google would be worth 45 trillion dollars. And so this is, I mean, this is a company that is actually priced quite reasonably when you compare it to the other offerings out there. So I would argue that when you look at it on a risk adjusted basis, actually, there's a lot of upside here. And so they're almost just rebranding themselves as the hot new AI company by making this equity offering. And I think I think it's really fair game. Now, you mentioned this idea that they're going to extract the capital out of the ecosystem, which I think is very true. And I think it does pose a problem to anthropic and to open AI and potentially to SpaceX, although SpaceX is set to go out pretty soon. And it does seem that there is a little bit of a concern here that whoever goes out first is going to suck up all of the energy and all the capital out of the room. And Google is creating a problem there. So that's one point that those new AI companies need to be aware of. But I just want to go through the size of these offerings here and add it all up. So you've got SpaceX, which is going to raise 75 billion dollars in its IPO, largest IPO of all time. I mean, the largest amount that was ever raised was Saudi around coin 2019 with around $29 billion. SpaceX is going to raise 75 billion. So that's one. Then you got an anthropic and the topic just raised a private round. It's series H. They raised 65 billion dollars in their private round. Just for context, that is more than double the size of the largest IPO of all time. And this is a private round. Now this, this company's going to go public. It's going to IPO later this year. So presumably, they're going to raise more money at the IPO. Let's call it say $100 billion or somewhere in that ballpark. It seems reasonable that that's what they're going to do. Now let's look at open AI also going to go public. Their last private round, they raised $122 billion more than triple the largest IPO of all time. So let's just assume that they're also going to raise, I mean, we're going to be conservative here somewhere in the ballpark of $100 billion. And then you've got Google, which is raising 80 to 85 billion dollars. The largest public equity offering of all time. So add it all up. These companies alone are about to ask investors for $360 billion dollars ish of fresh capital. And that's in addition to the $30 billion that have already been raised so far from IPO this year. So this is $400 billion of new equity issuance that is about to be flooded into the market. I just want to go back to Econ 101. What is Econ 101 all about? It's all about supply and demand. This is the fundamental thing that we all learn when we take economics. And the rule of supply and demand is what happens to prices when there is an oversupply of a product when the supply outstrips demand, the answer is prices go down. And I think what we might be about to see in the stock market is the same thing. And that is for years, what we have seen in the public markets is a scarcity of new equity supply. There's been very few amounts of IPOs that have been happening, very, very little new equity issuance. The IPO market's practically been dead since 2021. But what we're about to see is $400 billion worth of new supply flooding the market all in one go. And so the question is, is the demand going to keep up with the supply? Or is the supply going to outstripped the demand? It's a very simple question. And I think to me, when I look at those numbers, when I look at the fact that the largest IPO year ever was 2021 where $140 billion was raised, we're about to see triple that. We're about to see 10 times more the amount of money that was raised in the IPO markets last year. It was around three, four billion dollars. We're about to see $400 billion. Probably more than that. My view supply is about to flood this market. It is going to outstripped them on. The only answer after that is that prices go down. I do think that the once these companies go public, that's going to signal the top. And we're going to see a very significant pullback, specifically in the AI trade because there simply isn't enough capital to go around to keep prices propped up. The other thing that hasn't gotten the reporting that I think it deserves is that Berkshire Hathaway is getting a 6.5% discount. So when arguably the richest company in the world needs to sell stock at a discount, they're telling you that even the capital has become scarce, even for them at these levels. That's struck me that they needed. I don't know if they wanted the credibility or an anchor for the deal or the diligence or brand halo, the Berkshire Hathaway brings. But why on earth do they need to offer Berkshire Hathaway a 6.5% discount to what retail investors are going to pay? Do you have any thoughts there? I think that's part of the problem here. Why is there a concern? I think there is a very reasonable concern. We're now getting to a point where people are asking, is there actually enough dry powder left to go around? I mean, the fundamental question you have to ask yourself, if we're about to see all of these IPOs and it's going to total somewhere close to $400 billion. The question is, do investors have $400 billion laying around in cash right now? Does that actually exist? Or, and so that's the first question. It sounds like Google at least maybe is a little bit concerned or maybe there's like a shred of doubt that that actually does exist right now. So they'll give some shares to Berkshire Hathaway because they said, we'll lock it in and we'll do it at the 6.5% discount. So does that exist? Or are investors going to have to sell something in order to buy these IPOs? I think that is the question. If the cash exists then great, no problem. The markets continue to rip as they have done for a long time. I mean, later down the line, we're going to see that investors are a little bit more strapped for cash and there might be problems later on. But if the money's there, then okay, good. My, I doubt that all of that money is there or that investors are willing to shell out like that. I would think that people are going to have to sell something in order to buy these. And then the question becomes, what are they going to sell? Are they going to sell their homes to buy the SpaceX IPO? I don't think so. Are they going to sell their defensive positions like their industrials and healthcare and utilities? I don't think so because I don't think you want to switch from those defensive positions and then go into these highly risky AI positions. I think if you are selling something to buy SpaceX or to buy anthropical to buy open AI, realistically, you're trimming your tech positions. Like you're probably trimming down on Tesla, for example, to get into SpaceX or Nvidia or Broadcom. Or maybe you had some investments in these ridiculously high performing chip companies like Sandisk and all the rest of the chip companies. And you're going to take some of your profits from those positions and then put them into these other IPOs. Either way, the point is there is now a significant justification to pull back from these standard equity positions in AI, which is going to put pressure on prices moving forward. So this is really the real test of AI. Can you keep these prices up when you suck out this degree, this amount of capital out of the markets? And is that going to be sustainable for the long term? And I would just finish here by pointing out some research from BCA research, where they looked at some of the largest IPOs going back to the 30s. They looked at the Xerox IPO in 1936 and the Ford IPO and the McDonald's IPO. And what they found is that the S&P tends to underperform right after these major blockbuster IPOs. Because what always happens is that there's so much excitement when the IPO happens, the IPO sucks all the capital out of the ecosystem and then it leads to a period of time where there simply isn't enough capital to prop up that demand. And so it's hard to believe that that isn't going to happen at this point. I don't think it necessarily means that we enter like a structural bear market. But I do think that it means that this is, I mean, we're in kind of crazy town right now. These companies know it, which is why they're going out to the markets now, raising at the largest valuations that are humanly possible. And then we're going to enter sort of the sobriety phase where we realize, okay, I mean, what more can we buy? What more can we prop up? And so I think that's the thing to keep track of right now. I mean, remember when Andrew said software is eating the world. Now it's transition to AI is eating balance sheets. Yeah. It's just, it's just coming in and soaking up and I just got off a webinar for a section, the AI adoption company and a disclosure, I'm an investor. The, I mean, the thing that fascinates me, they were asking me what are my advising companies around and and I'm so happy not to be in those and companies anymore. Anyways, the, the, the, the, your advising, garage, Southgate, a lot more fun. Seriously, the amount of golf I had to fucking play Ed with people I didn't enjoy that much. I just cannot pick you playing golf. Oh, I played. I got to like a eight handed cap. I was playing golf every week. I like twice a week. If you were, if you ran a strategy firm in the 90s in San Francisco, you either played golf or you didn't have new clients. It was, it was absolutely how you got to know your clients was golf. I promised myself when I moved to New York, I was going to pour all of that time into fitness and I have played golf maybe three times in the last 20 years and I do not miss it. Anyways, one of the things everyone's talking about, token maxing and the wrong incentives, you should be focused on productivity versus how many tokens you use. But something that struck me is I finally got one of those prompts. I love Claude. I play with it. I play with it a lot. I think one of my biggest unlocks in terms of a hack was connecting my Gmail and it's such incredible, it's such incredible optimization for your search because if I'm trying to figure out, "What is the, you know, a box gets acquired by James Murdock." I'm like, "Okay, what does that mean for us?" So I say, "Please go into my email and look at the agreement I have with boxes or change a control provision." You can't ask the web that. But there's so much information that's germane to you and your communications with everyone. It goes through and it says, "Here's a thread from 2023 that explains and the agreement that you both party signed in the exact paragraph." But just such, anyways, I'm fascinated with Claude. I love it. I'm purposely don't ask it for personal advice because I just, I don't ever want to have anything that gets in the way of my relationships or inspiration or motivation or incentive to ask people and friends for advice versus asking something that's just going to take me to a regression of the mean. But anyways, I got one of those prompts finally that said, "You're out of tokens and we need you to upgrade to Claude Pro Max for $200 a month." And at first, I'm like, $200 a month. I'm like, "Wow." And then I thought, "That's a lot." And then I read that Claude Pro Max costs, if I sign up, it costs anthropic $5,000 a month and compute an inference to surface you. And so, quite frankly, what I'm saying to people now is like, all right, create incentives around or try and attach productivity regardless of the technology you use. And I have workshops and lunch and learns that are optional. This is how you connect different things. This is what it's good for. I have found that AI is really disappointing as it relates to imagery. Everybody thought it would come up with great videos or Instagram posts or imagery. I find it's really disappointing there. I find it's terrible at original writing, but it's amazing for distillation, editing and finding interesting data that are analogies that you might insert into your writing. The writing itself has to start with a human. At least that's what I found. But what I tell people is, if you had a business tool that right now costs you 20 cents, but the provider was spending five bucks on it, you might want to adopt and experiment at the outer edge because you are getting, it's never been cheaper. At some point, they're going to have to, well, I think there'll be a war and the costs will come down. It's pretty inexpensive right now. Well, it actually may get cheaper with these Chinese open-way models. But let me summarize this word salad. There has never been a moment in history where despite the unparalleled revenue growth, which Mark Mahaney reminded us of the RBC analyst in San Francisco. There's never been revenue growth like this. There has never been a time when you've had this type of percentage of GDP invested in infrastructure that hasn't resulted in a subsequent crash. The railroads proved to be transformative. The internet proved to be transformative as did the highways. But part of getting there was a froth and a market that crushed early investors. They're not early investors, but investors buying it what was, I don't know what you call it, the first peak, if you will. Yeah, the IPO. Yeah, Amazon and Cisco lost 90 plus percent of their value from 99 to 2001. Obviously, Amazon came back and then some. Cisco did not. But this is these capital wars are just extraordinary. We've never seen anything like it. And I got to think that in the next 12 to 24 months, one or two of these three companies is off 60 or 80 percent. I just don't see how they maintain this momentum. Just to that point, I mean, this is the question everyone's, all every investor is asking themselves, should I buy the IPO? I just want to point you to an analysis that was done by Truist where they looked at the 30 of these big blockbuster IPOs. They looked at everything from Facebook to Uber to Roblox to DoorDash. They looked at the 12 month returns of those companies after the IPO. And what they found was that the average drawdown that was experienced by these companies within a year of going public, the average maximum drawdown was 55 percent. Negative 55 percent. So in other words, you could expect based on history with a relative degree of certainty that at some point within a year of going public, the stock is going to get cut in half. Now that doesn't mean that the stock is not going to come roaring back later and go way up over the long term. But it does mean that when these companies go public, that is the peak hype. That is peak demand. That's when everyone wants to buy the stock. And usually what happens is once the demand fades and the hype kind of deflates, you see that the stock starts to fall over the 12 month average, usually they get cut in half. So I think the question for the investor is, do you want to buy right at the IPO when the stock is most in demand, when it's at its sexiest, when everyone's talking about it, when everyone's talking about it in the news and social media and on podcasts, or do you want to wait for the hype to likely come down and then find your entry point when greed is low and fear is high. I think that's what you need to think about here. SpaceX is going to go public, and it's always going to go public, open hours are going to go public. Maybe they'll have a pop, maybe they'll just have this explosive entry into the public markets. But realistically given history, they're also going to enter a downturn and they're probably going to dip below the amount or the valuation that they went public at, that's when you want to think about buying, that's when you want to find your entry point. Because doing it now when hype is like at an all time high and there, I mean, these valuations are just ridiculous. We'll see what actually happens with anthropic and open AI. But if SpaceX is sort of a signal of what's to come, that's not the time that you should be buying. You should be waiting for these stocks to come back down and realistically they all will. So that would be my advice. Don't buy it. The IPO, give it some time, wait for the hype to fade, then you can find your entry point. What you're doing is what we say a little bit not to do, but I'll engage in it. And that is you're trying to time the market. And I understand that these valuations, you may want to stay away from it. I agree with that. But typically investment bank does. One of the reasons to go public is it's a branding event and you only get to go public once and you want to manufacture scarcity and hype such that you get a pop. And I've even said advice companies that are going public price well below the demand because if you're up 40, 60, 80 circle when public it, you know, 200 percent pop, the additional five or seven percent delusion, which isn't the case here because they're raising so much money. But the additional five or seven percent delusion from or two or three percent from leaving money on the table because technically you're raising money. You could raise a lot more money at a lower delusion, but the branding you get when you're seen as wow, this IPO, even if you can raise money to cheaper cost, to be able to have a CNBC analyst fawning over the fact that your first trade was 30% up, that's almost worth the delusion because it creates a certain momentum and halo. Wow, this must be a great company. No, the bankers manufactured the pop. Sometimes they misestimated the pop is more, but the last thing you want is a broken IPO because that'll be the story of SpaceX were to price at 1.8 and go out on the first trade at 1.5. That would be an extraordinary victory for everyone, including SpaceX. Obviously, not the first trade, the people who bought into the IPO got allocation, but every story would be SpaceX broken IPO. That's SpaceX raises money at 80 times revenues, but SpaceX have broken IPO. The banks are smart at estimating demand. They'll look at the number of times over subscribed it is and they'll say price lower, price lower, whatever it is, and such that we can manufacture a pop. If you're fortunate enough, 99.9% of people aren't to get into your allocation in the IPO, then fine. Have outed, take the bet on the trade and the first trade. Beyond that, I would say look out below. If we're going to have fun here, I think the company that most likely has the biggest pop is anthropic because loosely speaking, the story, the overall halo is that there's a lot of noise out there that SpaceX is overvalued. That's just sort of becoming the little bit of the narrative, right? And in this case, it's true. The narrative is actually true. And then if you look at OpenAI and Anthropic, we've never seen a more vicious trading places or freaky Friday of the market leader in the number two happen in 90 days. And OpenAI is on the wrong side of that and Anthropic is on the right side of that. I think and Thropic probably they have quite frankly. Anthropic has more momentum in Riz right now than either of those two companies. The story of SpaceX is its overvalued, the story of OpenAI is it's no longer number one, it's number two, and the story of Anthropic is that it's just kind of firing on all 12 million cylinders if you will. - We'll be right back off to the break, and if you're enjoying the show so far, send it to a friend and please follow us on YouTube, Spotify, or wherever you get your podcasts. (soft music) - Hey, what's up guys, it's Andrew Ray, aka Babish, and I'm so excited to be hosting a new podcast with Vox Media called In The Booth With Babish. In every episode, I'll be sitting down with celebrities, chefs, and other fascinating folks to make a meal out of conversation. New episodes of In The Booth With Babish drop every other Tuesday, and you can watch on YouTube or listen wherever you get your podcasts. Cheers. - Support for the show comes from Vanta. What's the one thing moving through business faster than AI? AI risk. Every new platform, your team adopts, every vendor rolling out AI features, every added integration can create new exposure for your company, and most security programs weren't built to move at AI speed. That's where Vanta comes in. Vanta is the leading agentic trust platform trusted by more than 16,000 fast growing companies, including Ramp, Curcer, and Harvey, just a continuously audit ready. And now, Vanta helps companies like yours track the risks that appear between audits, across vendors, AI tools, and your broader environment. The Vanta agent works like a 24/7 GRC engineer behind the scenes, identifying issues, suggesting fixes, and cutting vendor assessment time by up to 50%. With your fast growing startup or a global enterprise, Vanta is here to help you automate your security and compliance and earn and prove trust. Get started today at vanta.com/market. That's v-a-n-t-a.com/market. 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Just go to LinkedIn.com/scot. That's LinkedIn.com/scot, terms and conditions apply. We're back with Profty Markets. It's been a rough year for fast food franchise operators. So far, we have seen bankruptcy filings from operators for subway, Applebee's, Popeyes and calls, Jr. And some are blaming the franchise model itself. One McDonald's franchise, he said that operators, quote, "cannot absorb all these costs, do all this discounting and still pay to remodel our landlords building." This issue is especially relevant for McDonald's. It's franchised and affiliated locations account for more than 95% of restaurants and roughly 62% of total sales. Because of that exposure, the company has rolled out a new initiative called McDonald's Next, which is designed to make its restaurants, quote, "easier to run and more enjoyable to visit." What stands out is how explicitly the strategy focuses on operators not just customers, the message is clear. Improving the experience for franchisees is key to improving the business overall. So, Scott, fast food franchises are struggling right now. Plenty of bankruptcies, Burger King operators, filing chapter 11, Popeyes operators, calls Jr. There was a Domino's franchisee, which also just worked bankrupt this year. And apparently there are concerns about the franchise model. Apparently it doesn't really work anymore there. That is at least what these franchise operators are saying or complaining about to the larger corporations. And when you look at all of these fast food closures, do you think it's that or do you think it might be something else? - So, the franchise model is like the licensing model. It's the ultimate business model. They come with a good concept that people love. And then rather than scale the company and use your own capital, you find local entrepreneurs that want to open. I was on the board of Panera and the largest Panera. There was a franchise that had 40 stores in Southern Florida. And you have a talented on the ground, you have talented on the ground management. The key to retail is that the owner is there. So for example, the most successful franchise model, I would argue, arguably, so Panera, Starbucks and Chipotle, always had NPS scores of like 62 or 63. And NPS is basically considered kind of the holy grail of consumer metrics. And that is the number of people that would recommend it, strongly recommend it versus people that wouldn't recommend it. So it's sort of passion, consumer passion. Chipotle, Panera and Starbucks always around the same thing. And then 10 points above that was Chipotle. I mean, just striking. And in Chipotle's secret sauce, yeah, the chicken's fine. It's a great product, but the other ones have a great product too. It was at that this really unique model where they have 25,000 people applied to be one of the 80 or 120 franchisees. And they call from former military veterans to, and they have this really sophisticated means of trying to find somebody who they think is just passionate about the brand and will be on site every minute of every day. There's all this data showing that a restaurant does not work if the owner isn't there a lot, whether it's shrinkage, making sure the bathrooms are clean, saying hi to consumers. And so Chipotle, where I'm headed with this, this isn't about a business model. This isn't even about them competing with each other. Newspapers made the same mistake. The New York Times thought it was competing against the LA Times or the Boston Globe or the Chicago Tribune. No, they were competing against the structural shift in consumer behavior. And I wanna acknowledge I'm a hammer and everything I see is a nail, but I think this is all about, I think this has nothing to do with a franchise model. I think this is about GLP1. And that is one in eight, 30 million Americans are on GLP1s. The population of Texas is on GLP1s now. And you don't go into a Wendy's and eat a double wopper, whatever the fuck they serve is and then leave and think, wow, that was a good idea. Wow, that made all kinds of sense, supersizing my McDonald's meal at Newark Airport. By the way, that's an amazing meal. Newark Airport McDonald's shout out. It's like, supposedly one in three times a pack of cigarettes is sold. The person buying it is swearing to themselves it's gonna be their last pack ever. You typically don't walk out of fast food thinking great idea. Great idea. You need cheap calories because it's gotten so ex-met, we subsidize beef, we subsidize water, and people are so time-starved and working so fucking hard that if you're single mother, I used to eat fast food all the time when I was growing up with my mom because quite frankly, with the most affordable means of getting cheap calories. And it was convenient, it was fast and was easy. Unfortunately, it is really bad for you because they're engineered to addict you with salty, sugary, and fatty food that we couldn't find on the savanna several thousand years ago. And it's just really bad for you. And what do you know, GLP wants to come, there's something like a 20% of America eats at McDonald's once or twice a day. And I gotta think GLP wants are starting to kick in here. The economics of a franchise model are somewhat a play here. And that is the labor model worked, or the franchise model worked on labor was cheap, interest rates were low, and consumers were on cany calories. All of that is broken, but more than anything, people are having an easier time driving by a jack in the box and driving by it. And just saying, I'm gonna go home in E.K.L. I'm gonna go home and have a bowl of, you know, whatever it is, a bowl of cereal, or I'm just not that hungry. And I think this is, I think GLP, I've said this before, I think GLP wants a bigger than AI. So I think that this is, sure I'm sure it's something about the franchise model, interest rates, all that labor and inflation, I'm sure all their concerns are real. But if everybody was eating more, that would roll over the anomalies in the franchise model. This is the oxygen is being sucked out of the room. And there's just, it's like when a company is shrinking, everybody starts blaming each other and they're questioning the business model. It's like, no, people just aren't buying newspapers any longer. They're getting news from different sources. So I'm open to push back here, but I think this is more a story of GLP1 as opposed to the franchise model doesn't work. - I think that makes a lot of sense. And I think the comparison to the newspapers is a great one because it's easier to, if your business is declining and if your competitors is to go in bankrupt and then you're struggling as well, It's it's an easier pill to swallow to say that there's something that you need to do organizationally or management-wise to sort of restructure your business. Maybe we need to sort of start changing the way that we present our menu. Maybe we need to upscale our locations. Those are easier problems. But it's a different thing to say that our entire industry is structurally undergoing a shift, which is going to eat away our bottom line. And that is exactly what happened with the newspapers. And it does seem like a similar thing is happening here. Like a lot of people are saying, "Oh, it's inflation. Oh, it's the fact that prices are going up. People are downscaling." Historically speaking, false food is recession proof. I mean, you look at most major recessions. You look at 2008. False food traffic was stable because it is one of the cheapest options. I mean, that's kind of what you do. You go get a really cheap option over at McDonald's if you're struggling economically. But so I don't see that as a very viable argument, but it is true. Foot traffic to false food restaurants is going down. Last quarter, it fell more than 1%. They called it before that. It fell around 2%. And you have to think that crucial statistic there that I'm sure a lot of these franchisees aren't really thinking about because it probably seems to out there, which is, as you said, one in eight US adults are now using GLP1 drugs. That is 30 million people and that number is only going up over time. And so if you look at the, I mean, that's the GLP1 penetration. Let's look at the false food penetration. Four and five Americans are eating false food at least once a month and around two and five Americans are eating it weekly or more. So if you just count that up among the adult population, that's around 110 million people, 110 million adults who are eating false food weekly. If you've got 30 million on GLP1s, you can just do the napkin math. You're essentially reducing the total addressable market by about 27 to 30%. And that's assuming that the people who are taking GLP1 drugs aren't going to McDonald's. They aren't going to Wendy's. They're not going to Popeye's Burger King calls June a you name it. And I think that is a completely fair assumption to make. If you're on GLP1s, I doubt that you're feeling very good or even excusing the fact of or the idea of going to McDonald's once a week or even more than that. I just don't think that that is really happening. So I think that this is definitely true. I think that this is something that these companies need to start taking really seriously. And I think when these companies report their earnings, it seems that so far they've kind of brushed these concerns aside and said, no, we're not really worried about that. At a certain point, I think they need to take it a lot more seriously and recognize that this is something that Wall Street and investors are genuinely concerned about because it has way larger implications than you're not running your business right. This is a structural secular issue that they need to start taking seriously. So I'm with you. I'm in agreement. You know who's probably adopted the franchise model at a greater scale than fast food restaurants as hotels. Very few hotels are owned by the flag. Four seasons owns one of its property. It's flagship property. It's headquarters in Toronto. Every other four seasons is owned by a rich guy. The things I'd like to I'd like to own the local four seasons. And then they come in. It's a much better model. They plant the flag. They let them tap into the reservation systems. They have a very owner's owner agreement around you have to have someone 24 hours a day at the check-in desk. You have to clean the rooms twice. You know, whatever it is. And they take eight to 12% of top line proceeds. And the owner of the four seasons in New York, I think, had to give it back to the bank because they had to maintain these owner's standards when no one was checking in. But it's an amazing model. And by the way, in the hotel business, it's still working because people love the idea of owning the six senses. But all of almost all of these companies, almost all of the big brands now in hotels, Starwood, Hyatt, a lot of them are basically a franchise model. And it's working. So again, but GLP1 as far as I can tell, one of the few industries I've been able to reverse engineer disruption from GLP1. This isn't a model here. This is beef and these shitty foods need to be priced to their real costs. We bury the central valley and cattle ranchers in water. And we subsidize the shit out of beef that in bad beef that's not good for you. So I don't feel for, and also the fast-food industry, you could argue employees people, but a decent number of employees. But I don't think this is an industry we're going to miss a lot. I don't, I don't, my feeling is this is a healthy part. It's like, I don't think we need more CVSs or bank branches in Manhattan. I'm ready for a lot of those to go out of business. And I don't think we need nearly as much fast food. Now some people would argue you're being an elitist. There's food deserts. It's cheap calories. And eating healthy is really expensive. But I can't imagine it. And we've talked about this before. A more, I just think GLP1s are going to be so massively accretive. And I had the head of Lily. I had the CEO of Lily, which is probably the most important company in the Midwest right now, a trillion dollar company located in headquartered in guest. Do you know where it's headquartered? No, I don't. Indianapolis. I love that. The latest trillion dollar company is in San Francisco, New York, or wherever London. It's in Indianapolis. Yeah, it's great. And GLP1 drugs have gone from a thousand dollars a month to somewhere between two fifteen five hundred. I think they're going to be sub a hundred dollars. And if you can do a GLP1, it's sub a hundred dollars a month. I would argue you're probably going to save money because these costs, these indulgences, shitty food, alcohol, whatever it is, it adds up pretty fast in terms of an expense. So I'm, I mean, I hate to say it. I'm sort of, I'm sort of excited to see Jack in the box, just fewer of them. Now I would like to see a lot more in and out burgers. I will say that. But I do want to, you know, if there's fewer McDonald's, I'm not sure that's a bad thing for the economy. Yeah, I think I agree with that. By the way, just before we end on this point, you know, you use a few, I think it was a few years ago, we were talking about GLP ones. I mean, we've been excited about this for a long time. We're trying to think about all of the sort of the off-draft facts and sort of who would be the downstream winners and losers. We're talking about maybe fitness companies. And I think I believe we said lingerie companies. Here's just some interesting news. Victoria's Secret Stock rose 40% last week. Why? Because of an incredible earnings report where they posted massive revenues up 15% to $1.56 billion. They raise their full-year revenue guidance to more than $7 billion. They saw sales increases across every single income group. And a lot of people are asking, okay, why is it why suddenly everyone super excited about buying lingerie and buying underwear? I think you could make the case that a lot of it has to do with GLP ones. That people feel sexier. They feel more fit. They're in shape. And now they want to go. And they want to buy more more sexy lingerie. So, I mean, we can't quite prove causation yet. But I think you can make a case that this is one of the winners. What do you think? 100%. When you lose weight and you feel good about yourself, what do you know? You want to go out and buy a new wardrobe. So, I think, look, urban outfitters, coming up on the board of their stock is doubled in the last five years. You feel sexier? I think it's going to have a bit of a baby boomer. Maybe. Because supposedly lowering obesity rates increases the fertility of somebody. And I think that's a fancy way of saying people are more down to fuck when they feel good about themselves. It's true, right? You feel good about yourself. You look better naked, which, I mean, all of this hides up to a bunch of wonderful things. New wardrobe. I think gyms are going to boom, because you want to keep the weight off. It does seem that this entire country is taking fitness a lot more seriously. And then we've just been given a literal drug that is speedbullying that process and that transformation. I also think it's going to, in a weird way. I think the pharma companies who have doubled down on GLP1 are going to boom. I wonder if we're going to see decline in any depressants because there's a link between obesity and depression. So, I'm just so excited about this technology. But yeah, I don't. We asked, me, one of the moments I loved at a property was me. I went downstream and looked at the supply chain of GLP1 about three years ago and said there's a publicly traded company that manufactures the syringes. And we talked about it and the stock doubled in the next three or six months. But now I think it's, I think it's no funortous because it's just come out with pill form. And what I think you're going to see here is a giant decline in the cost of these drugs, which I think is amazing. But meanwhile, I think the profits and the total revenues are going to, I think we're about to get the mother of all lessons and elasticity that the prices go down, total revenues will go up because it'll start penetrating into the community just that need it. We'll be right back. And for even more markets, content, sign up for our newsletter at proftumarchets.com. Support for the show comes from an upward. When you run a business, one of the biggest hacks is realizing you don't have to do everything all by yourself. Which is especially good news if you're feeling underwater, it might be looking to hire someone. Upwork makes it easy for you to bring in the right freelancers so you can stay focused on running your business. Upwork is a one-stop platform to find higher and pay expert freelancers. Find specialized talent across the Web and Software development. data and analytics, marketing, business operations and more. You can browse profiles, review past work, and you can get help scoping the roles you can hire with confidence. Upwork also has Business Plus, which gives you access to the top 1% of talent on their platform. With AI Power Shortlisting, you'll get matched to the right freelancer in under 6 hours. Skip the endless searching. And when it comes down to contracts and payments, don't sweat it. Upwork has all the operational stuff covered. It's free to sign up and posting a job is easy. Visit Upwork.com/Markets right now and post your job for free. That's Upwork.com/Markets connect with top talent ready to help your business grow. That's UPORK.com/Markets. Upwork.com/Markets. Hi, I'm Maria Sharepova, host of the Pretty Tough Podcast. Each episode I sit down with high achieving women to discuss the pursuit of excellence without apology. This week, model sports-illustrated cover girl and entrepreneur Ashley Graham talks about the time she almost quit. I called my mom and I said, "Mom, I just, I'm not going to do this anymore." And she told me, "No, you are going to stick this out. Your body is going to change someone's life. Every decade you're going to go through something different." So be really happy with who you are right now, because things change. Check out Pretty Tough, new episodes on Wednesdays. You can watch it on YouTube or listen in your favorite podcast app. Big news this week for all my Gordon Geckos, my Robin Hooders, my Claude Squad, and Thropic, which is newly the most valuable AI company in Seville announced it would be going public. That news follows reporting that open AI plans to go public as soon as September, and that that news follows reporting that SpaceX, which also considers itself an AI company, will be going public in maybe just a few weeks from now. Welcome to the era of the Omega IPO. We are about to see millionaires, billionaires, and yes, probably even the world's first trillionaire created overnight. And yes, it's that guy. This is the chainsaw for bureaucracy. Thirdsaw. But all the tech bros who are going to make all the money, they need our money way more than we need their products. And we're going to remind you why on today's explain from Vox. We're back with Prof. Markets. We are back in the studio after the first ever Prof. Markets tour. Over the past week and a half, we traveled to five cities San Francisco, Los Angeles, Miami, Chicago, and New York. We met listeners. We talked about markets and we got a first hand look at how people around the country are thinking about the economy and investing. Now that the tour is behind us, Scott, it is time to debrief. Let's discuss our learnings from the tour. Let's also get into the numbers here. I'll just give you a little bit of data around how this tour actually went down. We sold 5,239 tickets in our five cities. Our biggest city was New York, where we sold out the town hall. Almost 1,400 people showed up for that show. Our second biggest show was San Francisco, where we sold more than 1,100 tickets. Scott, takeaways, success, financially, personally, emotionally. So just to be honest, I found it very stressful. If someone gives up, it's one thing. If this pod sucks, they go back to walking their dog. They just turn it off. I think when you have 1,200 people show up for an event and they've spent a hundred bucks or more. Otherwise, stuff up our tickets in New York, we're going for 500 bucks. You have to bring it. You have to. That'd be good. Yeah, you want them to really enjoy themselves. Also, I felt more responsibility because when I did this with pivot, Kara is so experienced with live events. I just kind of show up, tell it, Dick joke, maybe occasionally stumble on some insight and the whole thing works. She manages the whole thing. In this one, you're outstanding, but I felt more pressure to kind of be the MC, if you will, and keep it on track. I was just quite frankly, I was anxious. So I was super relieved, but we had, what are some observations? I think that live events are booming because people want to get out and touch grass. I think getting your every brand needs a certain number of evangelists. Evangelists are key to a brand. And that is people who just, when they hear the brand name, they say to their people, "Oh, profiting markets." Someone hopefully goes, "I love that show." And I saw it and it was a ton of fun. That is just so important to a brand. So getting out there and trying to find your evangelist, and also when it works and this tour did work, it's really rewarding. And also it was a nice moment for us. I think when Hillary, when Secretary Clinton came out on stage, it felt like sort of the show was validated. The fact that someone that interesting and important, and although it's not really markets related, would show up life in one of our events, it was just a nice moment of validation. I enjoy flying around with the team. I felt like Mick Jagger flying around with in sync while they were in high school. I'm like, "Jesus Christ." Everyone is just so, I'm like, "All right, everybody needs to be in bed by 11 p.m. It's like literally I'm with children." And what you're finding is you can, the ticket, what's interesting about live events, the ticket sales, the cover your cost, maybe a little bit more, but where you make money is on the sponsorship. That's where the big money is. And that is our sponsorships range from like a hundred grand to five hundred grand we try and get for the tour. We try and get three of them because the power branding and in-person show is really powerful. And those events are just, economically I'm not sure they make sense. It's a lot of work. I was in seven cities and six days and five stops and through a speaking gig in there. And then anyways, but so I found it exhausting, very rewarding. The trend is towards in-person events. People are recognizing one of the biggest trends in the consumer economy right now. And that's the reason why FlexJet is doing well and LVMH is not. And LVMH just took a mistake in FlexJet and why Disney parks are up. People buying shit is down. Is it people realize as they get older and coming through COVID that we overestimate the pleasure and happiness we're going to get from things and we underestimate the pleasure and happiness we're going to get from experiences. And unfortunately with live nation, which is a monopoly, it means the Taylor Swift tickets go for $2,800. People are upset about that with our tour tour. I mean, what I can say is it's not really much we can do about it. This is the ecosystem. Like, if we kind of have to play Bollywood then. And we're charging what I think was $100 or $200. I want to coachella. My God. VIP tickets that you don't like have to be in a teepee and have like a 19 year old running over you trying to see Justin Bieber. It's $2,500. Which is by the way, that's about what it costs for like a nosebleed and for the next game right now. I think if you want to go see the next, it's just like $2,500, $3,000. Well, I don't know if you heard, but I'm going to get really crazy. The tickets, tier one tickets to the finals for World Cup are $38,000. Someone sponsor us, someone take us, please. Yeah. Yeah. By the way, I think FIFA is the most corrupt organization with the best product in the world. I was just going to give some observations as well on this tour. I mean, I think it's a really interesting point and it's an important point for my business perspective that this doesn't make that much sense for us financially. Like this event is profitable, but we could do other things that are a lot more profitable, specifically continuing to do this podcast and charging way higher than average CPMs because we have a good brand and because we have a good aspirational audience. I mean, that's really how we make money. It's not from going and doing live tours. That's kind of how like comedians go make their money because they don't make as much money charging for the CPMs on their podcasts. They make more money getting people to pay large prices for live events. But I think there are some really important things that are rewarding for us down the line, which is what makes it worth it for us. One, it's fun. That was, I mean, just a world when rollercoaster over time traveling around the world, around the world, around the nation with the team. We went and we partied at the Fiena and then the rest of the team, we went out to club space and we stayed out partying and it was our research assistant Dan's birthday and we got him a 12th birthday. 23rd birthday and we celebrated, which is fun and it's also great for team morale, which is actually important when you're running a very high intensity organization where you're making podcasts and videos literally every single day. So that was really important. And then also it's really important for us to understand who the audience is, to connect with the audience and to deliver some sort of a payoff for our super fans. Like I was so, one thing that we did at the end of every show is we like stuck around and we talked with everyone because that was meaningful to us and I want to make sure that if you're listening to the show, that you're getting some real reward from this and that you're being, feeling that you are part of a community, which is exactly what we delivered for these shows. So that's really important from the audience perspective. And then finally, in terms of making money for the long term, when you're in the business of advertising, there are two things that you want to do. One is you want to get as many downloads and clicks as possible. We all know that. But too, you want to demonstrate to advertisers that the relationship with the audience, that there is a depth to that relationship and there is a strength in that relationship, that the audience has a level of loyalty to you. And so if you can go out there and show the world, hey, we have a show and 1,300 people in New York took time out of their day, they showed up on a Tuesday night and they paid hundreds of dollars for a ticket to show up and watch this show. That says something very meaningful to the audience or to the advertisers. That tells the advertisers that the audience is listening and the audience cares. So I'm just sort of laying out why this all makes sense from a financial business perspective for profit market, despite the fact that these things aren't that profitable compared to other things that we can be doing over the long term, it really pays off. And that's sort of the business case for why we're doing it. The final point I will make on why it makes sense to do this is the content that we get for social media. I mean, we've got a lot of clips from the tour. What I said to the team is we want to make sure that we inspire a massive sense of FOMO among anyone who isn't showing up to these live events. I want you to be seeing how much fun we're having. I want to be posting it all over Instagram, all over X, all over LinkedIn, all over threads. I want everyone who isn't at this show to think, God dammit, I need to show up to the next live tour. I hope that we did that. I had an incredibly good time. It was genuinely so fun meeting everyone who listens to this show. I couldn't believe it at times, but it was so rewarding. I hope for those who showed up. I hope you had a good time too. Yeah, other than the relevance, validation, narcissism and money, for me, it's all about the fans. Yeah. This is what we're all about. We are transparent. Seriously, one of the things I found interesting was that I've done a bunch of live events and a bunch of speaking gigs for years. There's been a transition in Q&A. The Q&A is the most fascinating thing. Anytime I speak somewhere, I demand Q&A. I think that's the most interesting part. We had Q&A for a good 20, sometimes 30 minutes in every event. The shift in questions is dramatic. That is a few years ago, people wanted stock tips. It was greed. They wanted to know what do you think is the big tech stock pick for the next year. Now they want career insurance. That is the things that it was less about greed and more about anxiety. People are talking about AI, housing and quite frankly, weather. We had a lot of questions from parents really basically saying, "Are my kids going to do as well or better than me?" We had over looked at the data, 800 audience questions. If you were to summarize them in one sense, it would be that people are worried about the economy. They're worried about their place and their children's place in it. It's gone from greed to anxiety. It's moving towards the greatest luxury in America is moving from wealth to certainty. It just reminds me of happiness studies. That is every year they rank the nations on who are the happiest. Every year, six of the 10 happiest places in the world are in Northern Europe. I'm going to Stockholm next week. Whenever you go there in the summer, you understand why they're so happy. Then you go back in the winter and can't figure out why they're happy. It's not the beautiful weather or the beautiful people. What it is is that happiness is not only a function of what you have, but an absence from the fear of things being taken from you. It's great to have a lot of money, but what's even more important to happiness is not worrying that if your wife gets lung cancer, you're also going to go bankrupt. In the US now, we've decided to optimize the happiness for people who have a lot of money at the expense of the anxiety for people who are in the lower 90s, especially the upper middle class who have more economic anxiety than they've ever had. You could just feel that in the questions. People asking what should their kids do? What skill would you give your kids? What is the likelihood my industry gets disrupted here? In a certain way, I don't want to say disheartening, but people are really. People are just worried. All of the catastrophizing coming out of the AI community, which I think is basically fundraising, you can feel it. It's quote unquote, "it's working." People are really, really worried. What about any optimistic notes to end our show? What did you feel good about coming out of that tool? The most rewarding thing is a chance to spend time with the team. You guys have a great team. They're nice people. They've really enjoyed it. Everything was bonding for all of us. Hands down to the most. The nicest thing about the whole tour was that in every city we had parents who brought their teenage kids. That's just very rewarding to see parents hanging out with their kids at our event. The most. I went to see Taylor Swift because I want to understand the phenomena and I wanted to go to SoFi. Yeah, me to Taylor Swift. Does that make sense? I just love how you have to qualify. I don't like her. I'm not interested in how music. I just wanted to go see what's happening. So, it's silently in culture. Yeah, it's true. But the thing that was worth it was when I was leaving, there's this gigantic platform, cement platform, or deck, or terrace at SoFi. The driver, who I was with, who takes people to and from the Swift concerts all the time, like, you looked to your left when we got out here, you're going to see about 800 dads and cargo pants. And I looked to the left and there's this gigantic terrace full of flight guys in their 30s and 40s, all on their phones and cargo pants. And he goes, it's dads waiting for their daughters. They didn't want to spend the money. You know, it's too expensive. So they buy ticket. I thought it was so nice. It's too expensive. I'm like, people don't. I thought to myself, all these guys are such good men. They come to the concert. They bring their 13 year old daughter, but they don't want to spend the money on a ticket. So they wait outside for three hours. And listen to, you know, the talking heads in R.E.M. or do whatever it is they do. And then wait for their daughter to come out because they don't want to spend that kind of money on a ticket. Anyway, I found the most rewarding thing hands down was when people brought their young adult children. I thought that was really affirming. The Taylor Swift of business. That's what we are. Yeah, that's what we are. Yeah. So everyone who came out was so much fun. I mean, honestly, just surreal from like the size of the crowds and seeing those lines and just seeing the fact that we started this thing like three or four years ago and we didn't really know what we were doing or at least I certainly didn't know what we were doing. I mean, even just having Hillary Clinton come out on the stage with us and talking with her about the future of the economy, the future of America. Speaking with Governor Pritzker, speaking with Ted Cerrandos, the CEO of Netflix about Hollywood, like, we've come a long way and it was, it was, it's nice to have moments where you just observe that and you recognize that and you celebrate that and that's what that was for us. So again, everyone who came out to the show, I'm so grateful. Thank you so much. And I can't wait to do it again next year. We're going to have to do it again next year. We're going to have to figure out where else to go. I know a lot of people in Denver strangely were upset that we didn't go to go there saying with Boston. We probably have to hit DC next time. I will note the Chicago audience, I wasn't sure if we'd have much of an audience there. That was arguably the best audience. I mean, they went, they went nuts. It was awesome. So long story short, that was a great time and I can't wait. I can't wait for the next one. I'm glad. Let's take a look at the week ahead, Scott. We will see earnings from Oracle. We will see inflation data from the consumer price index and producer price index for May. And then finally, SpaceX is set to price its IPO Thursday night and go public on Friday. Scott, do you have any predictions? Well, I sort of made it. I think the big three coming up, I'll be interested to see if they're, I don't, this isn't prediction. I wouldn't be surprised if their pricing has to come down a bit. But I think the biggest first day pop or the biggest initial pop on the first trade is going to be on Throbic. I think the momentum, the risk is so much about an IPO is the narrative versus the numbers. And the narrative is just strongest around Anthropic and weakest among open AI and somewhere in the middle of SpaceX because you have Elon, he's a meme, he's graded, he's great. You know, it is an exciting company. This got kind of just, it's every eight year old stream, you know, space and rockets and technology. And I think some of those animal spirits will come in around SpaceX. But if I were to rank them, I think that Anthropic has the biggest first day pop. All right. My prediction is that these IPOs will mark the top. As I said, I think the amount of capital that they are demanding in these fundraising events is just going to be too much. And I think that there's too much supply that's going to outstrip the demand. I think that that's going to be the top. These companies going public and then we'll see a period of relative underperformance over the next several months. That would be my prediction. This episode was produced by Claire Miller, an awesome wife and engineered by Benjamin Spencer or video editor is Jorge Carty or research team is Daniela and Isabella Kintzel. Chris, no don't hear you and me, so very old, Jake McPherson is our social producer. Drew Burrows is our technical director and Catherine Dillon is our executive producer. Thank you for listening to Prof. E. Markets from Prof. E. Media. If you liked what you heard, give us a follow and tune in tomorrow for a fresh take on the markets. In time we're yours as the one times.