How the Snake Dies: ICE, AMD, ARKK

Hi, I'm Kelly Cavanaro, Managing Director, Head of North America Institutional Distribution.

At Janice Henderson Investors, we believe working together is the way to work better, like combining your portfolio plans and our in-depth strategy, your valued assets, and our valuable insights, your mission, and our vision.

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bloomberg audio studios podcasts radio news

one day we're gonna touch on the thoughts of situation jesus but

not today no i'm too fragile um we can have a possum update yeah tell us about the possum you cleaned it up i cleaned it up that's that's really the update I don't want to say that this show is my therapy because it is truly not that.

This show is what you talk about in therapy.

But it is the case that like as I was talking about the possum last week, I knew that editors were not going to cut it out and that I was using it as a commitment device to finally make myself just go out there and shovel up the dead possum in my yard.

Imagine if you didn't listen to last week's episode.

Yeah, wow, this would be horrifying.

Go back, listen to that, or don't.

This isn't that interesting.

This is just a little bit interesting.

This is the like skip ahead banter but anyway yeah i cleaned up the possum and then uh then my wife was like i listened to your podcast i learned about the possum that's a good test to find out if your spouse listens i didn't test

i don't i don't think joe listens because he didn't call me out on the fact that i just wait for him to notice the vomit from the cat assume he knew that yeah

yeah this is like densely packed with references yeah a lot of callbacks yeah he probably also knows that because sometimes I'll say, hey, the cat vomited again.

Could you go get that?

Right.

And he does.

And other times, you'll be sitting pointedly facing away from the cat vomit, and he'll be like, I know that you know there's cat vomit there.

And you're like, what?

We have a cat?

Psychological warfare.

Hello, and welcome to the Money Stuff Podcast, your Herculee podcast, where we talk about stuff related to money.

I'm Matt Levine, and I write the Money Stuff column for Bloomberg Opinion.

And I'm Katie Greifeld, a reporter for Bloomberg News and an anchor for Bloomberg Television.

Polymarket?

Yeah.

So Bloomberg News had a story this week that Shane Coplin, the founder of Polymarket, is now the world's youngest self-made billionaire, which is cool for him.

Definitely.

Shane Coplin

lives or used to live next door to a guy who throws a lot of book parties for finance books.

Oh.

So you could see him at like all the finance book parties?

That's your kind of hangout.

Sadly, yes.

And so, yeah, I've seen Shane Coplin at book parties.

You've rubbed elbows.

I've rubbed elbows.

And when I saw that article, I thought, youngest self-made billionaire?

I realized that Shane Coplin is the second world's youngest self-made billionaire to be in my phone context.

It's not like an entirely positive development.

No, it is for now.

For right now, it is a positive development for Shane.

We'll continue to watch this space.

It is also.

He did it in the right order, though.

First, he was investigated by the government, and now he's a self-made billionaire.

I was going to say, I forgot that it was less than a year ago that his apartment was raided by the FBI.

Worm has turned.

Yeah.

Fast forward to October 2025.

He's super rich.

ICE, of course, the news from this week was that they invested.

Intercontinental Exchange.

We're using government names

ice can mean a number of things anyway go on anyway ice uh the intercontinental exchange investing $2 billion in polymarket that gives it an $8 billion valuation pretty stunning and it was just last week that we were talking about how prediction markets are eating everything and here we are keep going yeah

right it's funny like I think of Calci as a sports gambling site polymarket

I don't know Polymarket

feels a little purer.

You know, the Bloomberg story about Shane Copland's

founding of Polymarket.

You know, he was reading economics papers about prediction markets and thinking this is too good an idea to just exist in white papers.

And I think he's

fully committed to the notion of prediction markets.

Yeah.

But like, you know, they did get into sports gambling.

Yeah.

And I think that, I'm not sure.

But my sense is that it is hard to justify an $8 billion valuation for a prediction market that is just elections and, you know, who will be the time man of the person of the year?

And,

you know, like just fun predictions.

And not, you know, for addicted sports gamblers.

I will say that

if you had told me that ICE had outright bought Polymarket for $2 billion, I still would have been like, wow, that's a lot of money.

The fact that it does have this $8 billion valuation also stuck out to me.

Right.

I just think that that valuation

discounts a lot of growth in sports and a lot of margins in sports and not the other thing.

But I'm intrigued, right?

When you read the announcement,

and again, when you read Shane Copland's public statements,

they're not leaning on the sports.

It's not like Robin Hood saying sports gambling is an embridging asset class.

They're like, yeah, we're trying to find ways to understand and price the future.

And I think that's like a noble goal.

prediction markets, like he's not wrong that like economists have talked about them for years.

Like the idea of prediction markets like providing a set of probabilities about the future does seem really socially useful.

And

my sense was always that no one had cracked the nut, not of like creating trading infrastructure or making it legal, but the nut of like

making people want to trade it such that there was like a big market, a big liquid market for it, such that professionals would have incentives to make prediction market prices correct, right?

Yeah.

Because like no one's like, oh, let's gamble on whether like, you know, the Ukraine war will end.

Like, I mean, people are, but like, it's not like a fun gambling product.

And so there's not a lot of money to be made if you have good insight into it.

And so just the whole thing has never quite worked, right?

And like there's U.S.

presidential elections where there's a lot of money, but otherwise it never feels like it quite works.

And sports are, you know, sports solve that problem.

Yeah.

People really want to gamble on sports, and there's a lot of dumb money.

And so there's a lot of value for smart money to bet against.

And so you have incentives to build good sports prediction models and trade on polymarket and all kind of works.

And then, you know, the question is, does that spill over into

the New York City mayor race or, you know, macroeconomic variables or like, you know, the Grammys or whatever.

Yeah.

Well, I do like that you brought up, again, the Grossman-Stiglitz paradox in your column on this specific item.

You were calling back to another column that, you know, maybe the way that we get to that societal, useful information is through

the avenue of sports betting and a lot of people making a lot of noise.

Trevor Burrus, Jr.: Right.

Like, the Grossman-Siglitz paradox is the idea that you can't have efficient markets because then no one would have incentives to trade and make the markets efficient.

Yeah.

So

Leslie Peterson says that you need efficiently inefficient markets.

You need just the right level of inefficiency to incentivize people to make them more efficient.

And

the economist view of prediction markets is

people who have particular insight into whether there'll be a war will trade their insights.

But who will trade against them?

Who's just randomly wandering around being like, ooh, I bet there won't be a war?

And then get suckered by the policy experts.

And in the stock market, like the answers to those questions are super easy, right?

The answer to like who will trade against the hedge fund is an index fund who is just blindly managing retirement money and needs to invest it in stocks.

And so the hedge fund has like someone they know they'll trade against.

Or the answer is like, you know, a retail investor.

Or like there's a lot of straightforward answers to like who is on the other side of this trade that allow people with a lot of information to make money by trading and incorporating that information into prices.

In prediction markets, it was never clear who those people were, right?

Like it's not a savings product, right?

Like people don't put aside $100 a month in retirement savings in prediction markets, right?

So there's no uninformed flow to trade against there.

And it has historically not been a super fun gambling market, with the exception of presidential elections and a few other high-profile things.

But when you add sports, it becomes a fun gambling market.

And then that just opens everything up, right?

It allows people to make money making informed predictions, at least on sports.

And then maybe it moves to something else.

Yeah.

I mean, does that assume that the people who are betting on sports on the prediction market go into other markets, such as, I don't know, elections or weather or whatever else?

Well, it's both, right?

So it's like, on the one hand, like, do you attract dumb money, recreational gamblers to the platform?

And then they're like, well, I'm here anyway.

I might as well bet on elections.

Like, that seems plausible.

And then the other thing is like, you know, if you are a quantitative trading firm and you have historically traded like stocks and options,

a lot of those people are now getting sports curious, right?

Like they're building sports trading desks.

They're like building models to prize sports events because it's like kind of the same skill set, right?

It's like taking machine learning and applying it to a bunch of data and like using it to predict the future.

And it's like, well, we can do that with stocks, we can do it with sports.

And there's a lot of money to be made.

And so some quant trading firms are either getting into the sports market making business or

their traders are leaving to start sports market making businesses.

And if those people

who are trading on traditional sports books or who are like market making on Calci,

if those people start market making on polymarket in sports, it's like a relatively easy lift for them to add a auction column, right?

Like it's a whole new set of data analysis, but they're already plugged in.

You know, they already like know how the market structure works.

So

maybe if you're making money trading against recreational gamblers on sports and you see election prices that you think are out of line, you're like, well, I'll put a few million dollars on that election too.

While I'm here,

I might as well.

It's just right.

It's convenient.

You're already there.

Yeah.

So what does ICE get out of this?

I don't know.

That's the thing.

I mean, one answer is an investment, right?

Yeah.

I mean, there's two things, right?

It's like, if it's the future of sports gambling, that's valuable.

And then, like, if like the way you trade your

insights into like whether there will be inflation

changes from like trading treasuries to like buying the inflation contract on polymarket, like that's a big deal, right?

Yes.

And I don't know that that is

a near-term likely outcome.

Yeah.

One, it's a possibility.

And two, it becomes more likely when you partner with a big exchange firm, you know?

Like ICE now, when they're thinking about like what kind of like macroeconomic products should we offer, now in addition to like

interest rate futures and bond futures, they can offer

predictions of inflation, right?

Yeah.

So that's one thing they get is like the

I don't think that's like currently in the cards, right?

Like the current situation is like they're going to distribute polymarket data, right?

Yeah.

Which is of interest to people who trade on ICE products.

Optimization initially.

And the other thing is tokenization, which who knows, right?

Yeah.

That can mean a lot of things.

Yeah.

It could mean like

technological infrastructure for like trading ICE products where like instead of buying rate futures, you buy rate futures tokens, right?

But it could also mean like everyone talks a big game about stock tokenization.

Everyone talks a big game about tokenizing private companies, right?

There's a lot of stuff in that space.

And like

it is possible that Polymarket, which is

crypto native and kind of fun, is better positioned to do some of those initiatives than like the New York Stock Exchange, right?

Which is the New York Stock Exchange.

Right.

And which has like

if you're the New York Stock Exchange, you're like, we're going to make everything tokenized.

Like everyone who's already trading on the stock exchange is going to be very annoyed.

Yeah.

Polymarket can tokenize whatever they want.

Tokenization has been on my list of things to actually think about for a while.

See,

but I haven't gotten there, Matt.

I've written about it.

It's funny.

It's like

to me, tokenization means two things.

Like, one, there's like some amount of trading in traditional financial markets.

You could change the back end of the market structure and make it so that instead of being on some company's ledgers, it's on a blockchain and you can call it tokenized.

And it's all a little bit different.

Some people will like that.

Yeah, it's the sort of thing that like 10 years ago, you'd be like, oh, there'll be a different database for your interest rate features.

You'd be like, I don't care about that.

But now it's like, oh, it's tokenized, right?

So that's like one thing is like the actual technological stuff.

And like, it's stuff about how things work together and how if you're a hedge fund, you can

move your tokens from one platform to another.

And you can live in the same blockchain environment for different kinds of trades, right?

Like you can trade crypto against futures.

I don't know.

There's that technological market structure stuff.

And then to me, it always seems like when people talk about tokenization, what they're always talking about is getting around securities loss.

And that's not always,

always true.

I don't know that that's what ICE and Polymarket are talking about.

It's what Robinhood is talking about every time we're talking about tokenization.

And it's like, you see, if you're like, we should tokenize private companies so that you can buy shares of private companies without having them have to go public.

It's like, well, that's not how the securities laws work.

But if we call a share a token, then they don't have to follow the law.

Yeah.

So it always struck me as wrong, but it might turn out to be empirically correct.

But anyway, so there's two kinds of tokenization.

I've written a lot about the bad regulatory arbitrage kind, but it's possible the technological kind is important, meaningful, will do something.

Well, hopefully these initiatives will bear fruit and we can actually figure out what ICE and Polymarket are talking about.

Yeah, I will say that

I have spent 10 years writing about financial infrastructure firms saying, we're doing a blockchain initiative.

It's all about the tech.

And then five years later, they're like, we have stopped our blockchain initiative.

Stop asking about it.

We don't want to talk about it.

Right.

So it's fazzlotenization as that.

It's fazzling tokenization.

It's like, we're putting the futures on the blockchain.

And then five years later, we'll stop talking about it.

But

so, yes, I agree with you.

I've thought a lot about tokenization, but I don't have any, I don't know what it means either.

Hi, I'm Kelly Cavanaro, Managing Director, Head of North America Institutional Distribution.

At Janice Henderson Investors, we believe working together is the way to work better, like combining your portfolio plans and our in-depth strategy, your valued assets and our valuable insights, your mission, and our vision.

Working in harmony to seek the right investment opportunities.

Janice Henderson Investors, Investing in a Brighter Future, Together.

How many vendors does it take to meet all your organization's food needs?

Just one.

EasyCater, the workplace food platform that lets teams order from a huge variety of restaurants, over 100,000 nationwide, all through a single vendor.

In addition to all that variety, EasyCater also gives you full visibility of your organization's food spend with invoicing, centralized reporting, and seamless integration with expense management systems, all on one platform, EasyCater, your business tool for food.

To learn more, visit easycater.com slash podcast.

You're thoughtful about where your money goes.

You've got your core holdings, some recurring crypto buys, maybe even a few strategic options plays on the side.

The point is, you're engaged with your investments, and Public gets that.

That's why they built an investing platform for those who take it seriously.

On Public, you can put together a multi-asset portfolio for the long haul.

Stocks, bonds, options, crypto, it's all there.

Plus an industry-leading 3.8% APY high-yield cash account.

Switch to the platform built for those who take investing seriously.

Go to public.com and earn an uncapped 1% bonus when you transfer your portfolio.

That's public.com.

Paid for by Public Investing.

All investing involves the risk of loss, including loss of principal.

Brokerage services for U.S.-listed registered securities, options, and bonds in a self-directed account are offered by Public Investing Inc., member Finrun SIPC.

Crypto trading provided by Backed Crypto Solutions LLC.

Complete disclosures available at public.com/slash disclosure.

I feel like I talked about

Ouroboros on this show before.

Oh, yeah.

Yeah.

I forget why.

The snake eating itself.

Snake eating its tail.

Well, another way of saying that is, you know, all these big tech companies are just spending money in a circle.

And this week, I feel like that idea was really on display.

When you think about OpenAI and AMD and the deal that they inked.

Yeah.

It's great.

Yeah.

I love it.

Yeah.

So my understanding basically is that

specifically with AMD, so they agreed to deploy a bunch of AMD chips.

And as part of that, they're also getting a bunch of warrants for AMD shares as well.

Yeah.

There's kind of two wild aspects of it.

I mean, there's at least 17, but like two wild aspects of it.

One is that OpenAI has committed to spend

I don't know the number, but it's like it's six gigawatts of chips.

Yeah.

And they've said it's like tens of billions of dollars per gigawatt.

So OpenAI is committed to spend something on the order of $100 billion buying chips from AMD.

And OpenAI doesn't have $100 billion.

No.

Like one thing that is happening here is that the market has ascribed a value to OpenAI of like, you know, half a trillion dollars.

And that value is sufficiently real that OpenAI can like make financial commitments based on it.

They can be like, yeah, we'll give you $100 billion for your chips.

And they're great.

And it's like, everyone's like, yeah, that'll work out.

Right.

But like, there's no, like, it's not in the bank.

Like, that's like, yeah, it's a $500 billion company.

They'll find the money.

And I don't think that's a wrong bet.

It's just an interesting bet.

Yeah.

They're able to commit cash based not on the cash they have, but on their valuation.

And then the other thing that's happening is that, like, when OpenAI says anything about anyone, the stock goes up.

Right.

And so when OpenAI announces a deal of like, we're going to spend $100 billion on AMD chips, AMD stock very predictably goes up.

And so

knowing that, as they negotiated the deal, they're like, what we should do is

we should take your very predictable stock price rise and use that to pay for the chips.

Yeah.

Like essentially, like AMD shareholders will get excited about AMD having this deal.

And so we'll let the AMD shareholders pay for the chips.

And so that's kind of what happened, which is that

AMD's stock, we're recording this on Wednesday.

AMD's stock is up roughly $100 billion from where it was last Friday before they announced the deal.

And,

you know, that'll cover the cost of the chips.

And OpenAI, which, as far as we know, has plans to pay cash for these chips.

Yeah.

Yeah.

Like, I don't think the deal is like we won't pay for the chips.

The deal is we will pay for the chips.

But OpenAI is getting warrants for roughly 10% of AMD with like vesting conditions, but they're like penny warrants.

And so right now, if you just assume they'll get all of the warrants, that's like a $37 billion-ish

value transfer to OpenAI,

which,

one, will help pay for the cost of this contract.

And two, it's only fair because they created all that extra value in AMD, right?

Like they're the ones who, by sprinkling their magic dust on AMD, were able to make AMD more valuable.

And so, yeah, they get back half that value in warrants.

Yeah.

Well, two things.

So to your point that, you know, OpenAI mentions some sort of whatever with another company, a public company, their share price goes up.

Makes me think about what we keep talking about in terms of the private and public markets converging.

Obviously, OpenAI famously is not public, but has been making a ton of waves in the public stock market.

The other thing is, you know, what we saw with OpenAI and AMD this week isn't a one-off.

They have something similar with NVIDIA, which of course is a direct rival of AMD.

Yeah, it's like very, it's like very different, but it's like from at a high level, it's the same thing, right?

It's like we have a partnership where I think in that case nvidia is investing in open ai and then yeah nvidia agreed to invest as much as 100 billion dollars in open ai to help open ai fund a data center build out in exchange open ai committed to filling those data centers with millions of nvidia chips This is a little bit old, but I was reading this piece from Michael Sembelest over at JPMorgan, and he wrote this at the end of September.

But it spiritually can apply to all of these deals that Oracle's stock jumped by 25% after being promised $60 billion a year from OpenAI in amount of money OpenAI doesn't earn yet to provide cloud computing facilities that Oracle hasn't built yet and which will require 4.5 gigawatts of power, which is the equivalent of several Hoover dams.

So it's easy if you wanted

to get scared and flustered to build a case that there's a bubble being inflated right now.

I don't disagree.

It's unusually unusually easy to visualize the future, right?

It's unusually easy to be like, AI is going to be huge.

It's going to transform every aspect of life.

It's going to require a lot of power and like that requirement is going to be so obvious that we'll build the power plants.

It's going to require a lot of data centers and that requirement is going to be so obvious we'll build the data centers.

And it's going to...

rake in oceans of money.

And that is so obvious that the people who will be raking in the money, OpenAI, can just spend that money now.

They can just be like, yeah, $60 billion a year, no problem.

We'll get that.

We'll figure that out.

Carts, horses, whatever.

Yeah.

Like, this is what capital markets are supposed to do, which is like discount the future.

And here, there's like

unusually widespread consensus on like how big and transformative this future will be and like what the steps are to get there.

And so it's all being discounted right now into,

you know, the price of Open AI, but also like these enormous long-term, incredibly capital-intensive deals where everyone's like, yeah, of course that's going to get financed.

Like, that's no problem.

Slow down.

Don't worry about it.

And, like,

one,

like, that is the consensus view, right?

Like, that is what people think, right?

Very strong.

Very much so.

It's not like a priori crazy to be like, yes, we can see how this is going to go.

And so we're putting our money into it now.

On the other hand, too, like, yeah, if you want to take the contrarian view, like, that sounds like a bubble.

That does sound like a bubble.

Of course, it sounds like a bubble.

Yeah, because there is a risk that we are

overbuilding here.

For sure, AI is going to change the future.

I feel like it's hard to argue with that, but do we need this many gigawatts?

Do we need this many data centers?

I don't know how many gigawatts we need.

Come on, all because of you, and like, you know, what he says kind of goes.

But, like, I don't think it would be crazy to think that the current consensus is rung in either direction by a factor of two, right?

And if it's like low by a factor of two, then like everyone's going to get rich, right?

And if it's high, then, like, all of these deals will look a little bubbly.

But, like, still, you know,

in like 10 years, like AI will have been transformative, and we'll be glad we have many of those data centers.

Yeah, for sure.

Internet comparisons, et cetera.

You can make them here.

But instead, I'm going to say that there was an interesting crack that seemed to form this week.

Did you see that report by the information on Oracle?

Yes.

Basically, its cloud margins are super thin to give you the details.

According to the information, so Oracle's cloud business has narrower margins that many analysts anticipated.

They generated about $900 million in sales by renting servers powered by NVIDIA chips, but its gross profit came in at 14 cents for every $1 in sale.

Again, this is according to the information, which is like retailer margins, which is pretty crazy.

Not that.

I mean, this is a huge business, right?

And so one question is like, who are going to be the like monopoly players in this business and who are going to be the like

in the fiercely competitive business of selling to those monopolists, right?

And like, right, it's very possible that Oracle is in a commodity business.

And my sense is that people think that NVIDIA is very much not in a commodity business, right?

That could be wrong, right?

And my sense is that people think OpenAI is not in a commodity business, that OpenAI has something special.

And so

when it name checks a public company, that company goes up, right?

And like NVIDIA has the same power, right?

Like the NVIDIA will sign a partnership with someone and their stock will go up.

Yeah.

But like, it's not clear that the people people who run the data centers have the same pricing power.

Just wonder how the snake dies in the end.

You know, is it because it chokes or because it's being eaten?

You know?

Do you ever think about that?

Constantly.

Yeah.

Hi, I'm Kelly Cavaniaro, Managing Director, Head of North America Institutional Distribution.

At Janice Henderson Investors, we believe working together is the way to work better, like combining your portfolio plans and our in-depth strategy, your valued assets and our valuable insights, your mission and our vision.

Working in harmony to seek the right investment opportunities.

Janice Henderson Investors, investing in a brighter future together.

How many vendors does it take to meet all your organization's food needs?

Just one.

EasyCater, the workplace food platform that lets lets teams order from a huge variety of restaurants, over 100,000 nationwide, all through a single vendor.

In addition to all that variety, EasyCater also gives you full visibility of your organization's food spend with invoicing, centralized reporting, and seamless integration with expense management systems, all on one platform.

EasyCater, your business tool for food.

To learn more, visit easycater.com/slash podcast.

You're thoughtful about where your money goes.

You've got your core holdings, some recurring crypto buys, maybe even a few strategic options plays on the side.

The point is, you're engaged with your investments, and public gets that.

That's why they built an investing platform for those who take it seriously.

On Public, you can put together a multi-asset portfolio for the long haul.

Stocks, bonds, options, crypto, it's all there.

Plus an industry-leading 3.8% APY high-yield cash account.

Switch to the platform built for those who take investing seriously.

Go to public.com and earn an uncapped 1% bonus when you transfer your portfolio.

That's public.com.

Paid for by Public Investing.

All investing involves the risk of loss, including loss of principal.

Brokerage services for U.S.-listed registered securities, options, and bonds in a self-directed account are offered by Public Investing Inc., member FINRA and SIPC.

Crypto Trading provided by Backed Crypto Solutions LLC.

Complete disclosures available at public.com/slash disclosure.

I want to talk about two miscellaneous things.

I do want to talk about you had Kathy Wood on your show.

Yeah, I did.

And you talked about

your other.

Sorry.

Yeah, thank you.

Swimming in Show.

It's not your show.

This is your show.

The other show, the ETFIQ show.

ETFIQ weekly Mondays at noon.

But you can catch me on the clothes every day, 3 to 5 p.m.

Anyway, go on.

Good plug.

And you asked her about the ETF IPO heartbeat trade we talked about a couple weeks ago.

There was no way I could not ask her about it.

Absolutely.

Yeah.

So this is the trade where like someone pumps like a billion dollars into an ARC ETF and they do it right before some hot IPO and they're betting that the ETF is going to get an allocation of the IPO and the IPO is going to pop and then they will heartbeat out of the ETF.

And so they will have like borrowed shares of all the underlying companies, put it into the ETF, taken it right back out again, and they've done nothing.

Like there's no trade there.

Like they've reversed everything, except that they've extracted their portion of the IPO pop and monetized that.

So if like the ETF gets a $20 million IPO allocation and it goes up 50%,

then like there's $10 million of profits.

And if you own half of the ETF for like a day, then you get like $5 million of profits with no risk.

Yeah.

And so it seems like someone did that a couple of times.

Yeah.

And you asked Kathy what about it?

I did.

So first of all, asked her who.

She said, as have I.

Doesn't know, probably a market maker.

And she pointed out that this takes a lot of guesswork on the part of whoever is behind it, the theoretical market maker in this scenario.

Yeah, people got it wrong.

Like, there's one of the big ETFs had one of these big heartbeats before a big IPO, but they didn't get an allocation.

Yeah, this is according to the FTA reporting that it was the Arc Innovation ETF.

That's their biggest ETF.

Basically, before the Klarna IPO, there was that huge heartbeat surge, but ARC didn't actually get an allocation in that fund to Klarna.

So it was kind of a worthless experience.

Whereas they had someone successfully did it with Circle, I believe.

And ARK was a backer of Circle.

I think like the FT had mentioned that ARC's website had mentioned Klarna in some capacity.

So, you know, maybe it wasn't a terrible guess.

But I also asked her

how she felt about it.

Actually, my co-anchor Scarlet Fu asked her how she felt about it.

Like, was she okay with the fact that her funds are just being used as vehicles to facilitate these trades?

And her answer was, she's not upset.

This is what makes a market.

And if they guess right, great.

If they don't, well, then they have nothing.

They've incurred some costs.

I was interested in that answer because when we talked about this, that's kind of what I said.

I was like, ETFs, like, on the one hand, her ETFs are like her investment vehicles.

She runs it.

She's making decisions.

Like,

you know, it's her fund.

But on the other hand, ETFs are kind of a piece of market plumbing and like that means they can be used by other people mechanically without being her decision and so i think that's like an interesting like her take on this is like yeah we're kind of market plumbing and so if that's what people do that's what people do that's not everyone's take no i heard from one person in like etf world that like one first of all etfs can turn down creation and redemption trades she said no to that okay i did ask for that depends on like the authorized participant agreements but like

their sense was like the norm is that you you can turn them down.

And then two, this is rude

and not nice.

And

because

on the one hand, these ARC ETFs are market plumbing that anyone can kind of trade against.

But on the other hand,

they are a

retail investment product.

And if you are an authorized participant, if you're a market maker trading against these ETFs,

it's kind of your job to be a nice participant in the ecosystem and make them a friendly investment product for people.

And if you're extracting the IPO premium from the ETF, that's that's not nice to the end investors.

And it's like not a constructive thing to do in the ecosystem.

Yeah.

I mean, I was also a little bit surprised and interested in her answer.

It's very emotionally mature because if I put myself into her shoes and, okay, my fund is a piece of market plumbing.

I accept that.

But if I have a sink and someone turns on the faucet, I would hope they're washing their hands.

Washing their hands in this scenario is investing in the fund because they believe in, my stock picking prowess, not that they're just turning on the faucet and then doing something else.

I guess my emotional reaction would be if I woke up one day and someone had invested an extra billion dollars in my fund, I'd be like, sweet.

And then three days later, if they were like, they took it out again, I'd be like, oh,

it would be a real emotional roller coaster.

I'd be like, you made my chart so ugly.

Yeah.

Got it.

But Kathy Wood, you know, she's not like us.

She is built different.

Yeah.

One more thing we have to talk about is that.

So we had Ryan Patch and John Seale on the podcast in May to talk about puzzle hunts generally and the Midnight Madness Wall Street puzzle hunt that they run in particular.

Midnight Madness was this past weekend.

Did you participate?

I did not because

for two good

reasons.

One is that you were taking care of the possum.

One is that to be like an entry in Midnight Madness costs, I believe, $42,000 for a team of six people.

You've got that.

Which is a little steep.

Two, the team that I've done puzzle hunts with before, like people had other things, and so like we didn't get the team together.

And

three, I am an old man, and it runs from like noon to like 4 a.m.

And the idea of shopping to

apparently started in Coney Island and like, you know, it goes all over the city.

And it just

seemed like a little too much for me.

It's a young man's gender game.

It's a young man's game.

Yeah.

Sounds super fun.

It's not only a man's game, but

there's a gender divide.

I don't know if that phrase works as well.

It's a young person's game.

Yeah.

But anyway, it was this weekend.

19 teams played.

They raised $818,000 for charity for Good Shepherd services.

And I do want to shout out the winners.

The winner-winner, the first-place team, was Reagan Voke 3000,

which was like the press release says it's a privately funded team.

There's like a little interesting thing here, which is that, you know, it's $42,000 for a team.

A lot of financial firms sponsor one or more teams from the firm.

A lot of other financial firms have their

well-paid employees just privately sponsor themselves.

And so Reagan Voke 3000, the winning team, was privately funded, so it wasn't officially sponsored by a firm, but I've heard it was some number of Jane Street people.

Interesting.

Second place team was sponsored by Citadel Securities and was called Citadel Insecurities, which is a great team name.

And then the third place team, Midnight Marauders, another privately funded team.

Anyway, congratulations on all your success.

You did it.

And that was the Money Stuff Podcast.

I'm Matt Levine.

And I'm Katie Greifeld.

You can find my work by subscribing to the Money Stuff newsletter on Bloomberg.com.

And you can find me on Bloomberg TV every day on the close between 3 and 5 p.m.

Eastern.

We'd love to hear from you.

You can send an email to moneypod at bloomberg.net.

Ask us a question, and we might answer it on the air.

You can also subscribe to our show wherever you're listening right now and leave us a review.

It helps more more people find the show.

The Money's Thuff Podcast is produced by Anna Mazarakis and Moses Andam.

Our theme music was composed by Blake Maples.

Amy Keene is our executive producer.

And Sage Bauman is Bloomberg's head of podcasts.

Thanks for listening to the Money Stuff Podcast.

We'll be back next week with more stuff.

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