Prof G Markets: GameStop Buying Bitcoin, an Activist Play at Lyft, & Gen Z Unemployment

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Speaker 12 Hey, ProfG listeners, it's Ed. If you're hearing this message, it's because you're still listening on the ProfG pod feed, which means you're actually missing half of our episodes on ProfG Markets.

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Speaker 13 Today is number 1461. That's how many beers there are in a Canadian brewery's presidential pack, offering one beer for every day of Trump's presidency.

Speaker 13 Ed, what's the difference between America and Canada?

Speaker 1 What's the difference?

Speaker 13 America has really nice neighbors.

Speaker 13 I'm very pro-I'm feeling very Canadian, feeling super Canadian.

Speaker 13 Actually, I don't know if you know this, but Canada both passed same-sex marriage and now marijuana, which means actually they're they're interpreting the Bible correctly.

Speaker 13 Leviticus 20, 13, if a man lies with another man, he should be stoned.

Speaker 13 That's good, that is good. I like that joke.
That's clever. Historical.
It's time for banter.

Speaker 2 What's going on in your life?

Speaker 1 I'm doing okay. I woke up with a bit of a cold this morning, which isn't ideal, but otherwise doing quite well.

Speaker 13 You sound fine.

Speaker 1 You sound good. Sound fine.
That's good.

Speaker 13 Okay. Okay, enough that back to me.
So last night,

Speaker 13 so I don't know if you've heard, but Chiltern Firehouse has burned down. So daddy needs...
And by the way, I'm pretty sure that I owe...

Speaker 13 I was, I think I told you this. I was borderline hypertensive, which means I almost had high blood pressure.
I was 140 over 80.

Speaker 13 And I uploaded all my results, my urine, my blood, all this shit. And basically everything came back.
And I uploaded it into ChatGBT and it said, okay, dumb shit, drink less.

Speaker 13 And

Speaker 13 so

Speaker 13 I just did my blood pressure last night, and it's 127 over 74 something, which means I'm back to, you know, the fucking rock star superhero I've always been.

Speaker 13 And I was trying to figure out what's changed. And I'm convinced that my blood pressure has come down down 13 points because Chiltern Firehouse has burned down.

Speaker 13 I would go there twice a week. I'd have four to five makers in ginger.
So that's 10 makers and ginger. Four to five

Speaker 13 each trip? Yeah, oh, yeah. Daddy goes deep in the paint.
Oh, wow. I told you, I'm a better version of me.
A little bit fucked up. You see me fucked up.
I'm nice. No, I agree.

Speaker 13 Yeah, and so that's 10 makers and ginger a week. So I'm basically drinking a half a bottle of makers.
So I'm convinced, and I'm glad no one was hurt.

Speaker 13 I'm convinced the reason my blood pressure has come down is because Chiltern Firehouse burned out.

Speaker 1 That makes a lot of sense. Yeah.

Speaker 13 I'm trying to find the new place. Last night I went to Soho Muse.
I told you about this, right?

Speaker 1 Lost I heard you haven't been yet. Is this your first time?

Speaker 13 I went last night. So if fucking Soho House decides, okay, we've let in too many riffraff at Elson and we need a place for the playas.
Scott Galloway. Small cap playa.

Speaker 13 I called them and they're like, no, we're sending out invitations slowly to members. I'm like, what the fuck? I'm a member.
And she said, no, it doesn't matter.

Speaker 13 So anyways, I called someone who knew someone who knew someone. Went last night.
Nice. Not Chiltern, but still pretty nice.

Speaker 13 And definitely, like, you could tell it's sort of a little bit of another level. And tonight I'm going to this place called Kensington Gardens, which is, I guess, also a new hotspot.

Speaker 13 So I'll soon be hypertensive again.

Speaker 1 Interesting.

Speaker 13 What's going on with your drinking?

Speaker 1 Yeah, I'm not drinking that much.

Speaker 1 I drank a little bit last night. My friends took me out to the Grill in New York.

Speaker 1 Have you been to this restaurant? This is like the successor to the famous Four Seasons restaurant. It's in the Seagram building.

Speaker 13 Fancy.

Speaker 1 So they went out and bought me a nice dinner. It was very nice.

Speaker 1 And they forced a martini on me. So I did drink last night.
I didn't really want to.

Speaker 1 But, you know, I got peer-pressured. But beautiful restaurant.
I would highly recommend.

Speaker 13 Yeah. The grill.

Speaker 1 Apparently it's where Bob Iger goes every lunch.

Speaker 13 Oh, really? To acquiesce to the Trump administration?

Speaker 13 Perhaps. Someone from the administration came up to him and say, okay, now put your elbows on the table, you fucking coward.

Speaker 2 Anyways, sorry, go ahead.

Speaker 13 Go ahead.

Speaker 13 That's all I have to tell you. A martini.

Speaker 13 Anyways, get on with the headlines.

Speaker 1 Let's do it. Let's start with our weekly review of market vitals.

Speaker 1 The SP 500 fell ahead of Trump's auto-tariffs announcement and struggled to recover. The dollar climbed.
Bitcoin was relatively stable. And the yield on tenure treasuries rose.

Speaker 1 Shifting to the headlines. Delaware is making big changes to its corporate governance laws, such as restricting shareholder lawsuits against founder-led companies.

Speaker 1 The move aims to prevent businesses from relocating to states with looser regulations. Waymo is launching its Robo-Taxi service in Washington, D.C.
in 2026.

Speaker 1 The company currently operates in San Francisco, Los Angeles, Silicon Valley, and Phoenix. And finally, GameStop is officially adding Bitcoin to its treasury reserves.

Speaker 1 Its stock initially surged on the news, but it eventually fell 23% after the company announced a $1.3 billion convertible bond sale to fund the investment, which is, of course, exactly what MicroStrategy did.

Speaker 1 Scott, let's start with your thoughts on this change coming from Delaware and just some context.

Speaker 1 And I mean, this is coming right after this highly controversial lawsuit against Tesla that we covered, where the Delaware court ruled against Elon Musk. They canceled his $56 billion pay package.

Speaker 1 And in response, Elon decided, fuck you guys.

Speaker 1 I'm leaving Delaware. I'm going to reincorporate Tesla in Texas.
And we've seen other companies either following suit, moving, or they're at least signaling their intention to move.

Speaker 1 One of those companies is Facebook. And so this is Delaware's response to that immigration out of their

Speaker 1 corporation system. They're loosening their governance laws in favor of founders.
They're making it harder for shareholders to sue. They're also narrowing the definition of a conflict of interest.

Speaker 1 These are all the very conditions that made that Tesla lawsuit possible in the first place. And so this is basically their reaction to what happened with Tesla.
They're now acquiescing.

Speaker 1 Scott, your reactions.

Speaker 13 So two-thirds of Fortune 500 companies, 67%, are incorporated in Delaware.

Speaker 13 And that generates, get this, $2.2 billion in corporate franchise taxes annually. That's almost a third of the state's budget.
And I would imagine it's really high margin revenue.

Speaker 13 And as you mentioned, Musk, they basically denied or voided Elon Musk's $56 billion Tesla compensation package despite shareholder approval. And

Speaker 13 you can go back on the tape. We said, whenever this happened, six or 12 months ago, bad decision, bad board, but they get to make this decision.

Speaker 13 And that for the courts to overturn it was a judgment call on what is quote-unquote fair compensation.

Speaker 13 And if you want to talk about compensation in America around CEOs, you just shouldn't use the word fair.

Speaker 14 And in capitalism, the owner of the asset or the majority of the assets get to nominate directors who get to decide correctly or incorrectly the compensation of the CEO.

Speaker 14 And the moment someone weighs in and starts using words like fair or unfair and overrides the decisions of the people voted in by the owners of the company to make these decisions, in my view, you have government overreach.

Speaker 13 So I think they screwed up here. I think intrastate competition is a good thing.
I think other states, in this instance, Texas,

Speaker 13 saying, okay,

Speaker 13 we want to compete with Delaware for companies to list here and offer them lower fees. The problem is there is a social good

Speaker 13 to some of this around the disclosure requirements. and how a board behaves.
It is a social good.

Speaker 13 And I worry that there's a race to the the bottom around governance that ultimately hurts retail investors. What are your thoughts?

Speaker 1 The most important stat you mentioned there is the fact that a third of Delaware's tax revenue comes from these incorporation fees.

Speaker 1 I mean, people ask, you know, why, why do all these companies incorporate in Delaware? The answer is that historically, Delaware has been a very pro-business state.

Speaker 1 You have tax benefits, you know, strong privacy laws. This is generally speaking throughout history, throughout corporate history, this has been a good place to incorporate your company.

Speaker 1 And now we're seeing a reversal of that trend. People are now deciding, due to what happened with Elon, that Delaware is actually anti-business.

Speaker 1 And so I think to an extent, they don't really have a choice but to loosen up on these laws right now, because if they don't, and if they just let companies leave the state, they're going to lose out on a ton of tax revenue.

Speaker 1 And when you look at the state, this entire state is really reliant on these relationships with these corporations. I don't like it.

Speaker 1 You know, I don't like that we're seeing, once again, regulators bending the knee to billionaires. Critics are calling this the billionaires bill,

Speaker 1 this decision to loosen the laws.

Speaker 1 And they're right, because this is specifically designed to appease the billionaires, specifically designed to make the founders of these giant companies which hold all of the shares and all of the voting power.

Speaker 1 Companies like Facebook, where you've got Mark Zuckerberg and all of his interests, and then, of course, companies like Tesla. This is all to make them feel happier about being in Delaware.

Speaker 1 And it's a trend that we keep on seeing, where regulators recognize the power of billionaires. They recognize how much, you know, we need them in terms of taxes.

Speaker 1 We're so reliant on these rich people and their ability to contribute to government revenue. And so they have to do it.
So I don't blame them for doing it. But is this a good thing?

Speaker 1 No, I don't think it's a very good thing.

Speaker 1 I don't think it's good that we are seeing a state basically rewriting their laws and rewriting their rules of equity to make the richest people in the world happy. Let's talk about Waymo.

Speaker 1 Waymo is currently operational in San Francisco and LA and Phoenix, but next year it will be in D.C.

Speaker 1 So they are scaling very quickly. Scott, your thoughts on Waymo.

Speaker 13 I bet if you surveyed Americans,

Speaker 13 if you said, what comes to mind when you say autonomous driving, the most common answer would be Tesla. And the reality is, and you brought this to my attention, Waymo is just miles ahead of Tesla.

Speaker 13 Tesla doesn't look very close to a competent self-driving or autonomous vehicle. And I took a Waymo six months ago in L.A., and I was kind of blown away by it.
I mean, they're up and running.

Speaker 13 They have 200,000 paid rides weekly across Phoenix, San Francisco, Los Angeles, and Austin. I love the idea of autonomous driving.
I don't,

Speaker 13 I'm trying to think how elitist this is gonna sound. I don't like the drivers.
I don't, I don't want a conversation.

Speaker 13 I assume they are gonna take me the wrong way, which is probably not very nice. I get mad at them.
What do you get angry about?

Speaker 13 I tend to get drivers who think they know the back roads, and I'm like, it drives me fucking crazy. I don't want them to ask me about the temperature, if I want to stream my radio.

Speaker 13 I'm an awful person.

Speaker 13 I don't want to talk to anybody.

Speaker 1 Does anyone ever recognize you when you get in the Uber? They're like, oh, you're the guy, Scott Galloway, and trying to spark a conversation.

Speaker 13 That has never happened to me in an Uber.

Speaker 1 So clearly, they're not the target audience. So you can rag on them as much as you want.

Speaker 13 Yeah, I'm wondering what my star rating is.

Speaker 13 My general approach to service is I'm not easy to deal with, but I tip big. That's my approach.

Speaker 13 Which that's pretty obnoxious.

Speaker 13 I'm rich. I don't need to be kind.

Speaker 1 I'm pretty sure that's, yeah, that's definitionally a douchebag.

Speaker 13 Yeah. No, first word douche, last name bag.
Should I write children's books?

Speaker 1 By the way, I kind of agree with you, but I'm trying to work on that. I think I need to be better and more amenable to small talk.

Speaker 13 You're young. You're still in your mating years.
Yeah, exactly.

Speaker 1 But just to focus on Waymo as opposed to being antisocial,

Speaker 1 just some data. So Waymo completed more than 4 million paid rides last year.
That's more than 11,000 autonomous taxi rides every single day.

Speaker 1 And I just want to compare that to the competitors of Waymo. You mentioned Tesla, which I agree.
I think when people say they hear the word robo-taxi, they think of Tesla.

Speaker 1 How many paid robo-taxi rides did Tesla complete last year? Zero. You look at the other competitor, Zeux, which is owned by Amazon.
Last year they completed Wait for It, zero paid rides.

Speaker 1 Cruise, which is owned by General Motors, they also completed zero rides last year. By the way, they also ended up shutting down that business entirely.
In other words,

Speaker 1 this is one of the most important technologies of our time, or so a lot of people say, and Waymo is the only company in America that has figured it out. Tess has been talking about it for 10 years.

Speaker 1 They've shipped nothing. Meanwhile, Waymo is fully operational in three major metro areas.
It's expanding across four more. I think they're even testing in Japan right now.

Speaker 1 So I think if you had to identify a sector where there is the greatest disparity between the market leader and the the runner-up, I think you would have to say that sector is autonomous vehicles and robot taxis, and you'd have to pick Waymo.

Speaker 1 And, you know, you mentioned the branding point. I don't think Waymo gets enough credit for this.
I mean, this is an incredible company. They're absolutely killing it right now.

Speaker 1 And when you look at the competition, it just proves how difficult it is, both from a technological perspective and also from a regulatory perspective.

Speaker 1 This is the only autonomous company which is actually supported by regulators because they recognize, yeah, this thing is safe.

Speaker 13 They've tested it.

Speaker 1 They've proven that it works. And now they can expand.

Speaker 13 The question I would put to you is they just raised 5.6 billion or last year. They raised 5.6 billion, I think at a pre of 40 and a post of 45.

Speaker 13 So at 50, revenues of 50 to 75 million, that means they're trading somewhere between, I don't know, 70 and 90 times revenues. Would you invest in Waymo at 70 to 90 times revenues right now?

Speaker 1 I haven't done the analysis on Waymo individually, individually, but if the robo-taxi market is as big as people say it is, if it warrants the multiples that we're seeing in Tesla, I mean, how else could you justify the valuation of Tesla right now if it isn't autonomous driving?

Speaker 1 Fair point. If we're comparing it with that, then yeah,

Speaker 1 I'd invest for sure.

Speaker 13 This feels like if they can maintain this, this feels like a 2027 IPO that'll be pretty big.

Speaker 1 Let's talk about GameStop. GameStop is deciding to purchase Bitcoin.
They're adopting the same strategy that we saw with Michael Saylor at MicroStrategy.

Speaker 1 I'll just start off by pointing out that this is

Speaker 1 this really worries me

Speaker 1 because GameStop isn't the first to do this.

Speaker 1 There are other companies that are following suit. We've been over some of those companies in our episode with Josh Brown.

Speaker 1 So this is becoming a thing now. A lot of these companies are buying Bitcoin and doing the same thing that Michael Saylor did.
And why is that a problem?

Speaker 1 You know, we've been friendly with Michael. I know you're friends with him.
I think we've been kind of nice, or at least we've gone a little bit easy on MicroStrategy.

Speaker 1 But I think it's getting to a point where this is becoming so popular among companies, you know, not just GameStop, but dozens of other companies.

Speaker 1 I think we now need to be more candid about what MicroStrategy is doing. I think what they're doing is a Ponzi scheme.

Speaker 1 They're buying up Bitcoin and then they're using the Bitcoin as collateral to sell bonds.

Speaker 1 And then they're using the proceeds from the bonds that they sell to buy even more Bitcoin, which they again use to sell even more bonds by using collateral again.

Speaker 1 So it's just rinse and repeat, rinse and repeat. You buy more Bitcoin, you sell more bonds.
You buy more Bitcoin, you sell more bonds. That is a Ponzi scheme.

Speaker 1 You're using existing investors' money to pay out new investors. And it would be different if the bonds were secured by

Speaker 1 a productive asset, an asset that generates actual cash. But they're not.
They're secured by an asset whose value is entirely dependent on more investors entering the ecosystem.

Speaker 1 And that, to me, is definitionally a Ponzi scheme. But I just think that we've been so distracted by the astronomical returns that we've been seeing on these stocks.

Speaker 1 I mean, we just pointed out GameStop is way up this year, and it increased even more when they announced this treasury strategy. MicroStrategy increased 600% in one year.

Speaker 1 It's so numerically compelling that I think what is happening is what so often happens with Ponzi schemes that we're so excited by it, we turn a blind eye to what's really going on.

Speaker 1 And I think a lot of other companies are now doing this. You got GameStop, this company, Semla, MetaPlanet, Cooler.
They're all public companies.

Speaker 1 And you even now have the Nasdaq including MicroStrategy in the index fund, meaning we now have millions of dollars of retirement account money and pension fund money going into these things. And

Speaker 1 I think it's a Ponzi. And, you know, all it would take for the whole thing to come crashing down is for the price of Bitcoin to drop.
And you made that point to Michael.

Speaker 1 You know, you said, what happens if Bitcoin goes to, say, you know, $40,000, I think? And his response was, well, what happens if a meteor hits us tomorrow?

Speaker 1 Which is clearly a false comparison because the chances of a meteor striking the earth are are infinitely lower than the chances of the price of Bitcoin going down.

Speaker 1 So, you know, I've been, you know, a little reticent to talk about this aggressively

Speaker 1 because, you know,

Speaker 1 I don't want to make an enemy out of anyone. But it's getting to a point now, we're seeing so much adoption of this.

Speaker 1 GameStop, which is owned by so many retail investors. It is the retail stock.

Speaker 1 And now they're adopting this strategy. And as I just mentioned, they say, we're going to buy the Bitcoin, but first we're going to sell the bonds to do it.
So it's the same strategy that we've seen.

Speaker 1 And to me, this is really concerning, but perhaps you have a different view.

Speaker 13 When I was, I moved to New York in 2000 and I didn't know anybody. And almost right away, I made good friends with a couple of guys and they said, oh, you got to come to St.
Parts for the holidays.

Speaker 13 I'm like, yeah, I'm down.

Speaker 13 And we knew enough people that knew enough people that had, were billionaires that own boats, and they would always have these crazy parties.

Speaker 13 And this one guy who was always on the boat, kind of, he was this really handsome guy with great fashion and like always had like the hottest women around him. His name was Andrew.

Speaker 13 And Andrew was rolling with all these billionaires. I remember seeing him or I had dinner with him in LA once and he rolled up in this like electric blue Ferrari and he was pitching me.

Speaker 13 He said, I have a fund. I try and find value stocks or something.
I was barely listening. And he said, and I'm giving like 22% 22% returns last year.
And

Speaker 13 my bullshit me, A, I didn't have much money back then, but I'm sort of like, yeah, this is way too exotic for me. But he had raised, and he listed all these billionaires in St.

Speaker 13 Bart's he had raised money from. And I knew most of these guys by name.

Speaker 13 And it ends up that what he was doing was taking money and then...

Speaker 13 and giving money back to previous investors on redemption, claiming they got 20% returns when he was using the money as his own personal kiddie. That is a Ponzi scheme.

Speaker 13 Taking investors' money to pretend you're giving returns back to older investors, hoping new investors will see these false returns and put in more money. And that's what Madoff did.

Speaker 13 I don't think it's fair to call this a Ponzi scheme. What I think this is, is a massively levered bet because at some point,

Speaker 13 so they're buying Bitcoin. And then they're borrowing against that Bitcoin.
So they're levering up, and then they're borrowing as much as they can on that. They're just massively levering.

Speaker 1 I'd agree with you if if the underlying asset generate had any any sort of cash yield,

Speaker 1 maybe it's Ponzi's scheme doesn't feel right because he's not actively defrauding people and going and saying, Hey, I'm going to take your money and then we're going to put it over here.

Speaker 1 But what is happening is that the value of the asset is dependent on other investors entering the ecosystem.

Speaker 1 And the difference is that those investors are anonymous because it's just people who buy Bitcoin.

Speaker 1 The whole thing is predicated on in the same way that your friend was taking other people's money and then paying it out to someone else. This is the same system.

Speaker 1 It just has more people in the chain, is what I would say. More points of contact, basically.

Speaker 13 He's making a hugely levered bet on an asset, and people have decided it's a legitimate asset class because people think it's a store of value.

Speaker 13 What you're saying is ultimately over time, I think an asset really isn't an asset unless it's producing some sort of underlying cash flows, that it's not a security.

Speaker 1 I think we can call it an asset.

Speaker 1 I don't think it's a security.

Speaker 1 But I think we can call it an asset. But that dynamic that I describe, this thing no longer works if people don't keep coming in.
The whole thing is predicated on that.

Speaker 1 So as soon as that stops, as soon as new investors don't enter, the whole thing collapses.

Speaker 13 My sense of this is pretty simple.

Speaker 13 You're going to get huge returns if Bitcoin goes up because he's levered the shit out of the Bitcoin he's bought, and it's going to go way down because he's levered the shit out of Bitcoin. But

Speaker 13 he's not taking money and falsely claiming returns.

Speaker 1 But he makes the argument that

Speaker 1 the whole thing is protected because it's a bond.

Speaker 1 But I think he picks and chooses

Speaker 1 different parts of this financial play such that he can say things like, well, what if a meteor strikes us tomorrow? And

Speaker 1 by saying, oh, it's a bond, you're protected, but then in certain occasions, not pointing out that actually it's a convertible and this is going to convert to equity.

Speaker 1 And you could very well lose all your money. If Bitcoin goes up tomorrow, but then crashes the next day, yeah, you're equity now.
You're wiped out.

Speaker 1 Some people are now owning it in their portfolios and they didn't even sign up for it because it's now part of the NASDAQ. And this is why I'm being aggressive now and not before.

Speaker 1 It reminds me of 2008 in a lot of ways, where so many more companies and institutions are buying into it. I think because they're look at the numbers, look how much it's gone up.

Speaker 1 And that's the part that concerns me, which is why I want to flag it.

Speaker 13 The notion that people are diving too aggressively into the deep end of a pool in a market that is overvalued and then massively levering up, leverages how smart people go broke. Right.

Speaker 13 And

Speaker 13 as we've discussed on this show, we're big believers that the U.S. market has become too expensive and it makes sense to delever or perhaps exit.
And also,

Speaker 13 to be fair, everyone thought Bitcoin was a hedge against markets. It's not.
It's ended up being much more correlated to the markets than anyone had anticipated.

Speaker 13 And the Bitcoin maximalist or whatever the term is would claim that, oh, this is the perfect hedge

Speaker 13 against other assets. Well, actually, no, it's pretty tightly correlated.

Speaker 13 If the market pukes tomorrow, there's, you know, a 70, 80, 90% chance that Bitcoin goes down.

Speaker 13 So I think your argument is buyer beware because this is a levered bet that's levered to a market that's already bubbleishious. This is like the pop here could be really, really loud.
And

Speaker 13 Michael did say that you have to be able to survive this volatility. This volatility is massive.

Speaker 13 The one thing you said that I really liked was you said,

Speaker 13 you know, fire is dangerous, but if you put fire in a car, you can move the car. I thought that was very sexy the way he said that.

Speaker 1 It was very sexy. He's really, he's an amazing salesman.
He has great analogies, but at one moment he compares...

Speaker 1 he compares it to real estate and he says this is like buying real estate in Manhattan and the next moment he's comparing it to commodities and the next moment he's comparing it to Henry Ford and the fire that fueled the car.

Speaker 1 I mean, these are all very different arguments that he's picking and choosing.

Speaker 13 I think you're a little jelly. I think you're a little jelly.

Speaker 1 Okay, what I can guarantee, the comments are going to say Ed is jealous of him for sure.

Speaker 13 I will meet you in the comment section. We'll see what people say.

Speaker 1 Yeah, we'll meet in the comment section.

Speaker 13 And

Speaker 13 I can tell you what the comments will say based on who owns Bitcoin and who doesn't.

Speaker 1 Yeah, exactly. Are you just going to be 50-50?

Speaker 1 We'll be right back after the break with a look at an activist play at Lyft.

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Speaker 1 We're back with Profit Markets. Activist investor Engine Capital has taken a 1% stake in Lyft and is calling for a strategic review of the company.

Speaker 1 They've raised concerns about Lyft's stock performance, their strategic direction and governance, and they're also calling for the removal of Lyft's dual-class share structure.

Speaker 1 And they've proposed new candidates for the board. The stock rose more than 2% on that news, but it is still down more than a third over the past year.

Speaker 1 I would first like to point out, Scott, which is what an unserious activist play this is, because

Speaker 1 they're asking to reorganize the shareholder structure and get rid of the dual-class shares.

Speaker 1 Dual-class shares exist so that this doesn't happen. They exist so that founders can protect themselves from these activists coming in and trying to change the company.

Speaker 1 So I don't think this is going to go through. I don't think they're going to get what they want here.
Maybe you have a different view.

Speaker 1 But it does raise an important question, which is what can Lyft do to revive itself? It is performing very poorly. It's down around 85% since and went public.
And you were once an activist investor.

Speaker 1 And from my understanding, you also know the CEO of Lyft as well. You're friendly with him.
So what is your reaction to this activist play?

Speaker 1 And perhaps if you were the activist yourself, how would you approach this company strategically?

Speaker 13 so your first point's the right one it's almost comical that they've called for them to declassify their share structure good luck with that now i think what they'd want to do is show up and say we have a huge stake here and we want to help you the the thing about activism that i learned is that typically when you go into a board of a company you find out that you're not as smart as you think and they're not as dumb as you'd hoped.

Speaker 13 And I don't do hostile plays anymore because what I find you want to do is you want to show up with a big stake and say, we're here to help, we're smart people, and we want to be assets and help you brainstorm and maybe provide more capital, provide introductions, brainstorm strategically.

Speaker 13 I find that's just a much more effective way to try and build shareholder value.

Speaker 13 And activism, and one of the reasons I was drawn to it because it's due to my personality, it just attracts a disproportionate number of assholes because, and they come out guns blazing.

Speaker 13 And what they fail to realize is that the people they're trying to embarrass publicly with their poison pen letters, unless it's really egregious, are humans and will circle the wagons and defend it even if your points are right.

Speaker 13 So, my approach around this stuff evolved to, okay, we're big shareholders. We want to work with you.
Our default kind of operating system is to be great shareholders and great partners.

Speaker 13 But if in a year or two years, you're either stonewalling us or just making stupid decisions, we're going to go gangster on you.

Speaker 13 But we're here to help. We're going to try and get along.
I find that's a more effective, what I call forceful yet dignified approach to this.

Speaker 13 Now, Lyft is an example of a number two that has not been able to establish differentiation.

Speaker 13 And it has been a shitty place because Dara has made some really deft moves around acquisition of food delivery. He's just done a really good job.
And they've kind of run run away with it.

Speaker 13 And since the IPO, Lyft has lost 85% of its value, while Uber's shares are up nearly 80%.

Speaker 13 Year-to-date, Lyft is down 11%, Uber's up 18%.

Speaker 13 Uber trades at 3.6 times sales, and Lyft trades just at 0.9,

Speaker 13 half its historical average. So this company is struggling.
It doesn't have the scale, and it doesn't really have a niche to kind of focus on and

Speaker 13 sort of send a brand identity. And the example I would use is a car pulls up and and has an Uber light, and then I see it turn off its Uber light and it's a Lyft light.

Speaker 13 So, okay, if there's no differentiation in driver or equipment,

Speaker 13 that means, okay, and Uber's got scale, that means the only thing Lyft can do is compete on price. And if you're hiring the same driver in the same cars, how do you compete on price?

Speaker 13 That's just a downward spiral. You don't have the scale.
So

Speaker 13 Lyft needs to find a strategy.

Speaker 13 What should they do?

Speaker 13 I would not circle the wagons. I would invite these guys in.

Speaker 13 I don't know how much of the company they bought, but I find the best thing to do on a commit board is to say, the best way to shut up an activist is just to put them on your board.

Speaker 13 Just say, come on in, the water's fine.

Speaker 13 And put them on your board.

Speaker 13 If they purchased a lot of shares and then they have to shut up because of Breg Deere, you know, insider disclosure rules, see if they have good ideas, listen to them, and get them kind of on your side, if you will.

Speaker 13 So that's how I would handle the activists. The tougher problem is what the fuck does Lyft do?

Speaker 13 And my view is they have really two choices choices here. The first is to pursue a sale.

Speaker 13 And I could see a big automobile company thinking, all right, we want to go vertical and we want to have an offering that we're Tata Motors.

Speaker 13 We want to have Range Rovers and Jaguars everywhere or we feel like we're going to take our production cars that aren't selling. Maybe that'd be bad for the brand.
I'd have to think about it.

Speaker 13 But we want to go vertical and have, you know, have be in ride hailing. The other thing, I mean, they either got to do a sale or they've got to find a niche.
So for example, I love Wheelie.

Speaker 13 That's a ride hailing service here in London. And it's basically, there's Uber, Uber Black, and then there's Uber Lux.
And Wheelie is Uber, super Luxe.

Speaker 13 Beautiful, brand new S-Classes, suited driver, super clean. Other cars look brand new.
It's just a different level. And they've gone after that niche.

Speaker 13 And I'm sure they charge more, and it's worth it, and it's aspirational. And I hardly ever use Uber in London now.

Speaker 13 I use Wheelie.

Speaker 13 And I thought, okay, what does Lyft offer? And Lyft does have a luxury offering that looks better than Uber.

Speaker 13 And that might not be the niche, but Lyft has to find a niche and be known as the ride-hailing company that has a certain type of car, or the ride-hailing company that specializes in, you know, I don't know, helping people with special needs, or I don't know what it is or the dog-friendly ride-haling.

Speaker 13 They are going to have to find a niche and own it and build out from there because all they are now is the sub-scale number two. And every day they are losing share.

Speaker 1 Yeah, exactly. I mean, Lyft did $6 billion in revenue, a little less last year.
Uber did $44 billion. They had almost $800 million in free cash flow.
Uber had almost $7 billion.

Speaker 1 This is a true David and Goliath situation that has only been getting worse. But to your point, you know, Lyft trading at 0.9 times sales,

Speaker 1 its market cap is lower than its revenue. It's around $5 billion in market cap.
It used to be around $25 billion in market cap. It certainly feels cheap from an acquisition perspective.

Speaker 1 You know, you make the point that they should be listening to offers.

Speaker 1 I just wonder if people are or companies are making offers and if there are any companies you think would be best suited to make an offer to Lyft, because it certainly looks like a really, really good acquisition target right now.

Speaker 13 The team put together some ideas. Merge with DoorDash.
That would be a merger. That would be a sale because DoorDash has an $80 billion market cap, so they would buy them.

Speaker 13 DoorDash, the stock is up 36%, so they kind of have cheap stock to go shopping with. And they're trading at eight-time sales.

Speaker 13 So I don't know if it'd be accretive because I don't know how profitable or unprofitable Lyft is.

Speaker 13 Be acquired by Amazon, be acquired by Google or Waymo. I'm not sure.
I would bet, quite frankly, a lot of these potential acquirers. I don't doubt there's some people who think we'll buy Lyft,

Speaker 13 but we'll call us when it gets down to $2 billion.

Speaker 13 You know, because

Speaker 13 this company just is, it just continues to go down.

Speaker 13 And I think the only way they're going to prompt someone into buying is it gets so damn cheap, or the banker calls and says, we do have a credible offer. Speak now or forever, hold your peace.

Speaker 13 Because

Speaker 13 when a company is just consistently going down, there's no penalty to waiting because you believe, okay,

Speaker 13 and this isn't cheap.

Speaker 13 What's the market cap? About $5 billion?

Speaker 13 So they would claim we need a premium. So

Speaker 13 you got to come up with $7 or $8 billion here. And if you're, you know, let's say

Speaker 13 you're GM, right? And you think, oh, I'm going to get into this. Market cap of $47 billion,

Speaker 13 Do you really want to take like a 15%

Speaker 13 dilution

Speaker 13 to acquire a money-losing number two ride-hailing company? I mean, that's the kind of thing that...

Speaker 1 They are now profitable now, but only just, yeah.

Speaker 13 So break-even. So Ford, Ford has a 39 billion.
I mean, those guys can't do it. I used to think that was probably a good idea.
I don't think they can do it.

Speaker 13 It would have to be.

Speaker 13 I know what's going on here. They have a banker.
They've reached out to all of these people. They're not dumb.

Speaker 13 They know how challenging this is for them. They're ready.

Speaker 13 They've got their best dress on and

Speaker 13 they want to get someone to take them home from the dance or put a ring on it. And my guess is everyone's like, why wouldn't we wait another six months when it goes down another 15%?

Speaker 13 So he has to find a strategy. He has to find some type of growth, even if it's a smaller acquisition of 100 million to a billion, to say,

Speaker 13 we have something that differentiates us or gives us a pulse here

Speaker 1 we'll be right back after the break with a look at gen z unemployment if you're enjoying the show so far hit follow and leave us a review on property markets

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Speaker 1 We're back with Profit Markets. Recent data from the Federal Reserve Bank of New York reveals a concerning trend for college graduates.
Securing a job is becoming increasingly difficult.

Speaker 1 Since September 2022, the unemployment rate for college grads has surged by 30%,

Speaker 1 outpacing the overall unemployment rate increase of 18% for all other workers.

Speaker 1 Not only are more graduates struggling to find work, but hiring rates for jobs requiring a college degree have also slowed more than those for other roles.

Speaker 1 So, Scott, what do you make of this shift? And what advice would you give to college graduates who are trying to navigate this?

Speaker 13 To a certain extent, what came out of COVID was

Speaker 13 the jobs that had a little bit more purchase were either,

Speaker 13 you know, you understand AI or you slipstream

Speaker 13 into the right parts of the growth economy, or you're a plumber.

Speaker 13 You know,

Speaker 13 I think vocational jobs are actually doing quite well, right? You can't, AI can't give you a massage or install energy-efficient HVAC heaters. Supply is outpacing demand for computer scientists.

Speaker 13 Jobs posted for software development roles are down 30% from pre-pandemic levels. Meanwhile, the number of students majoring in computer science has jumped 40% in the past five years.

Speaker 13 There was this, whenever something becomes conventional wisdom, it's no longer wisdom. And the conventional wisdom is just go into computer science and you're going to be fine.

Speaker 13 It does appear that this is

Speaker 13 kind of AI is sort of claiming its first victims, and it's sort of information age workers that are expensive, but not that experienced yet. And the macro data kind of glosses over these struggles.

Speaker 13 U.S. job openings remain historically strong, 7.7 million open roles as of January 2025, led by education and health services, business and trade.

Speaker 13 And overall unemployment is at 4.1%.

Speaker 13 Spain's unemployment rate is 11%. Canada is nearly 7%.
So our unemployment is still at historic lows. But the reason this gets a lot of attention is that we've spent 20 or 30 years just reporting on,

Speaker 13 I mean, literally for the last 20 or 30 years almost, except for some moments around recession. But in non-recessionary times, which you're in right now, if if you got a college degree, you got a job.

Speaker 13 You might have to not take the job you wanted. You might have to take a job for less, but you got a job.
Now, there are generally, it appears to be people who are having real trouble finding anything.

Speaker 13 And so that makes the news. But if you pull back the lens,

Speaker 13 the job market is still pretty strong. I think there's pockets.
I wouldn't want to be coming out of school right now looking to go into work in consulting.

Speaker 13 I got to think consultants are thinking, do we really need new people when we can make every person here 10, 20, 40% more productive in the next three years using AI.

Speaker 13 So I think a lot of the traditional roles that undergrads from good institutions or even MBAs thought they could just slipstream into are those are the jobs that are being hurt the most.

Speaker 13 But I wouldn't be surprised if they reconfigure, reestablish different curriculum tools and these kids are fine. Or put another way, I still think it's a good idea.
to go to college. What I hope,

Speaker 13 you know, and this is my rant about college is that they start putting schools on the hook for some of that bad student debt such that they don't aren't as promiscuous and intoxicated around issuing debt to a kid who's going to get a philosophy degree and not be able to find work.

Speaker 13 So, you know, the kid you really feel for is the kid who borrowed $100,000 to get through school and gets out. I mean, some of the majors at my school at NYU are just so fucking ridiculous.

Speaker 13 You know, gender studies and the,

Speaker 13 you know, the important discussion of the politics of styrofoam. It's just they get to make up their own majors.
And I'm like, who would hire you at that?

Speaker 13 Anyway, so cheap credit, I think, is really hurt. And the promiscuity of issuing debt to some of these kids, I think, is setting them up for failure.

Speaker 13 But I still think these kids are going to be much better off than non-college educated kids.

Speaker 1 I think we should be clear on the scale of the problem. So, I mean, yes, the unemployment rate has increased by 30%.

Speaker 1 from the previous number, but the actual number

Speaker 1 among college educated people is still not that high. It's 2.6%.
So like this, you know, college grads are fine right now. But I think what is more important is the trend.

Speaker 1 And the trend is that jobs that generally require a college degree are compared to other jobs in decline. So these are jobs like...

Speaker 1 sales managers and administrators and analysts and programmers, the jobs that require, generally speaking, some level of skill and knowledge and experience and an understanding of how to organize and manage other people.

Speaker 1 Those are the jobs in decline.

Speaker 1 Why is that happening?

Speaker 1 I think you said it. It's technology.

Speaker 1 I mean, there's AI, there's generative AI, but even just the more primitive technologies like CRM management and data analytics platforms, the reality is that today, most cognitive tasks that we used to delegate to college-educated kids can now be delegated to a computer.

Speaker 1 And that does leave young people with a very important question, which I would like to pose to you, which is what should we try to be good at? I mean, you brought up computer science exactly right.

Speaker 1 10 years ago, everyone was telling us computers are taking over, so you need to understand how to program a computer. Half of us became coders, and what do you know?

Speaker 1 coding jobs are now down 30% since before the pandemic.

Speaker 1 I mean, it's almost as if the computer science science degree has turned into that gender studies philosophy degree you just made the comparison.

Speaker 1 It's like people are going out there, they learned how to become a software engineer and they're realizing, oh, wait, AI can do the job for me.

Speaker 13 So

Speaker 1 we're left with that question once again.

Speaker 1 What are we supposed to be good at? What are the kinds of skills that we should be learning?

Speaker 1 What should we be focusing on if we want to be productive and we want to get rich and we want to provide real economic value in this country. And so I would pose that question to you, Scott.

Speaker 1 What would be your advice in 2025?

Speaker 13 It's a really thoughtful question. I'm not sure I have a silver bullet here.
What I would say is

Speaker 13 I would divide it or segment it into two cohorts, and that is 10 to maybe 20%, although half of kids think they know what they want to do, but they're just reading headlines.

Speaker 13 A minority, but a significant group of kids are like, I am passionate about computer science, or I'm just really good at it. I understand it.
I'm good at it. I pick up on it.
I get A's in this course.

Speaker 13 I'm into it.

Speaker 13 Doesn't matter what the trends are, you go into that. Because

Speaker 13 if you're great at computer science, you're going to get a job.

Speaker 13 If you're just a standout programmer, even if they're firing computer systems engineers, if you're great at it, you'll figure out a way to stand out and find work.

Speaker 13 If you think, oh, I'm just fantastic at biology, boom, go,

Speaker 13 I could be great at this, go into it and ignore what the trends are because you don't know where the world is going to go.

Speaker 13 Now, for the rest who are thinking, I just want to be an economic animal, I think sort of the universal of the most athletic degrees are take a decent amount of, if you can,

Speaker 13 I think you really benefit from finance and economics courses.

Speaker 13 I think you absolutely benefit from the sciences courses because if you have an understanding, a preliminary understanding of chemistry or biology, you kind of understand a a little bit of everything.

Speaker 13 That is the building blocks of life. Business mimics biology.
I mean, even the little kind of courses I took on astronomy or astrophysics, you start to go, wow,

Speaker 13 you see that in everything.

Speaker 13 Also, I wish I had taken more English.

Speaker 13 Communication is the gangster skill that I think will endure. So your ability to write well, if you can develop that skill, you can more easily develop a skill around all communications mediums.

Speaker 13 I think that one of the reasons I write so much is I want to be a great speaker. I want to be great on podcasts.
And I think it all starts with your ability to write well.

Speaker 13 So I would wish I'd taken more English, more biology,

Speaker 13 an understanding of history, I think is really important.

Speaker 13 And also

Speaker 13 try and be,

Speaker 13 and this isn't a class, try and be as social as possible.

Speaker 13 Because A, it's an unbelievable opportunity to develop friendships and relationships. And at Google, when they put out a job opening, they get 200 C Vs in minutes and they shut it down.

Speaker 13 And then they invite in 20 people. And 70% of the time, the person who gets the job is someone who has a friend at the firm that is advocating for them.
And so

Speaker 13 what is the easiest way or the likely, the way you're going to improve your odds the most of having, getting a job? is having a lot of friends. How did you get a job, Ed?

Speaker 13 You had a best friend whose mom knew me and they love you.

Speaker 13 Literally, Joanna Coles called me and said, you'd be stupid not to hire this kid. That's what she said.
She'd be like,

Speaker 13 I think her words were, I am not getting off this phone until you commit, until you promise.

Speaker 1 I really owe my life to Joanna Coles.

Speaker 13 That you are hiring my son's friend, Ed Elson. I'm like, and I said, well, what does he want to do? She's like, it doesn't matter, you fool.

Speaker 1 What a legend. Yeah, but it works, right?

Speaker 13 So I get the sense.

Speaker 13 You know, I mean, you've got a lot of flaws, but I get the sense.

Speaker 13 I get the sense you have really good relationships. You take your friendships seriously.

Speaker 13 And that's how you got this job is you got someone in your life who just really cares for you and basically told his mom, help Ed get a job. Or Ed, Ed said he knows this guy or likes this guy.

Speaker 13 Can you call him? I heard you know him. You want to get a job? You got to be good.
Learn the basics. I like the sciences.
I like communication and storytelling.

Speaker 13 But the way you get a great job and the way you change the trajectory of your professional career is relationships.

Speaker 13 And while you're in college, it is a great opportunity to establish a lot of really like great, deep, meaningful relationships.

Speaker 1 It's so interesting because a lot of the skills that you mentioned there are kind of the skills that you're supposed to be accumulating from a liberal arts education.

Speaker 13 100%.

Speaker 1 And this is the, I mean, liberal arts degrees have been in decline and people have been saying, you know, what's the point of these liberal arts degrees?

Speaker 1 But it is, it does, it's starting to feel that now that we've almost over-indexed so hard on the hard sciences and on the computer sciences, that suddenly the economy is seeming to kind of reshift.

Speaker 1 And we're starting to see more emphasis on the soft skills, the ability to communicate, to tell a story, to, you know, have a strong sense of history.

Speaker 1 I mean, maybe I'm being biased because I got a liberal arts education, but there was this interesting

Speaker 1 quote by this guy, Amjad Masad, who is the CEO of Replit, which is this big software company. And he was talking about this new trend of vibe coding.

Speaker 1 And this is this trend that is becoming very big in Silicon Valley, where engineers are basically just prompting AI to build the code for them.

Speaker 1 And you now have very reputable, even computer science professors who are teaching people how to vibe code because they recognize this might be the future of coding.

Speaker 1 You don't need to have a really perfect understanding of computer science. You can basically use AI to just push the ball down the line.

Speaker 1 And he was making the case for vibe coding, this guy, Andrad Massad. And he even said that he doesn't think people should be learning to code anymore.

Speaker 21 In the upcase, like what Dario just said recently, all code will be AI generated.

Speaker 21 I assume this optimization path we're on where agents are going to get better and better and better.

Speaker 21 The answer would be different. The answer would be no.
It would be a waste of time to learn how to code. I would say learn how to think, learn how to break down problems,

Speaker 21 learn how to

Speaker 21 communicate clearly

Speaker 21 as you would with humans, but also with machines.

Speaker 1 That to me is like a glowing endorsement of liberal arts. But I'm curious to get your take.

Speaker 13 The best programmers understand logic, and they're almost like internal construction managers.

Speaker 13 They're great project managers. And also, someone's going to have to give these LLM prompts

Speaker 13 and build the system. So there's still going to be a need for them.
It's just like anything else

Speaker 13 that gets digitized when technology comes into a sector. It usually takes the top 10%

Speaker 13 and they earn three times as much, and the bottom 90 make less

Speaker 13 or aren't there. And I think that's happening in that field.

Speaker 13 The correlate or the

Speaker 13 resonance here is on the day after tomorrow, I'm headed to the U.S. with my oldest son for a college tour.
And we've been thinking about, you know,

Speaker 13 there's an opportunity set of 100 colleges, and we're going to seven of them in five days. And we've been thinking a lot about it.
And I said, all right, what are your criteria?

Speaker 13 And he's like, you know, I want a place with a great biology department.

Speaker 13 That's what he came up with because he's really interested in biology and he has some real aptitude for it. And he said, what are your criteria?

Speaker 13 I'm like, I just want, you know, a small number of things. I want you to go somewhere where I think you're just going to have an amazing time because I had an amazing time in college.

Speaker 13 And if I could give my kids anything,

Speaker 13 I just want them to have the same amazing time I had.

Speaker 13 I want you to learn about yourself. I want you to learn about others.
I would love for you to acquire some skills, specifically some skills around storytelling and communication.

Speaker 13 But more than anything, more than anything, what I would hope for you is that you experience,

Speaker 13 enjoy, endure a ton of relationships. I just want you at basketball games and classes with 400 people on campus all day long, tutoring people, getting tutored, hanging out, drinking with friends.

Speaker 13 playing ultimate frisbee, playing intramural sports. I just want you bumping off people all day long and creating just a raft of relationships and friendships.
That's what I'm looking for.

Speaker 13 And so we're going to all these kind of land-grant schools that are big public schools with football teams and intramurals and fraternities and sororities.

Speaker 13 I don't know if we'll do that, but tons of student clubs where they just feel like, quite frankly, like college. And I think a lot of parents feel this way.

Speaker 13 I think a lot of, if you've looked at the applications trends, the southern schools are booming.

Speaker 13 And quite frankly, it's like, how college-y and how fun do they sound? We want our kid to go have fun. Like schools like Wake Forest are booming.
Their applications are booming.

Speaker 13 SMU, Vanderbilt is now more difficult to get into than many Ivy League colleges because a lot of parents and kids have said, I want my kid to have a college experience, full stop.

Speaker 1 I mean, if I were to summarize your advice there, it's to get as good an understanding as possible of other people.

Speaker 13 And yourself. Right.

Speaker 1 right and the only way that you could do that is through meeting other people and establishing relationships with them and i do think that is actually great advice because it it makes you nimble in any situation economically i mean the the biggest realization for me coming out of college was i thought these these companies that i heard about were these big sort of amorphous conglomerate brands that have all these rules and definitions for, you know, this is what, these are the skills that you must learn and these are the type of person you must be.

Speaker 1 In fact, it's all just groups of people. And your ability to get hired is, as you say, a function of whether the person in charge of the hiring decision likes you and wants to work with you.

Speaker 1 And that was honestly a really eye-opening experience for me is realizing that life and work is literally just interacting with people.

Speaker 1 So if you can be really good at that, then I think you'll be fine.

Speaker 13 That's the key. It's like anything else.

Speaker 13 You got to be good. Being intelligent, being hardworking, that's table stakes in this economy.
The differentiator is the depth and number of relationships you have.

Speaker 1 Let's take a look at the week ahead. We'll see the unemployment rate for March and U.S.
reciprocal tariffs are set to go into effect Tuesday on what Trump is calling Liberation Day.

Speaker 1 Scott, any predictions from you?

Speaker 13 It's not so much as a prediction, but an observation.

Speaker 13 We have this clown car called

Speaker 13 the Cabinet right now, and I just think this is going to start to hit the economy. Strategy is two questions or one key question.
What can we do that's really hard?

Speaker 13 And the biggest mistake people make in strategy is that they think they're punching a speed bag and people aren't going to punch back.

Speaker 13 And every nation we have levied tariffs against, they have levied reciprocal tariffs. They have punched back.
And some are getting really smart.

Speaker 13 EU and Canada, I love this, have decided to pick products where they're going to put especially onerous disproportionate tariffs on products that originate from red states.

Speaker 13 And the whole world is sort of deciding now, including our allies, that they have this common enemy called this clown fucking car called the United States.

Speaker 13 And there's just no way that that doesn't begin to hit our economy. So I, and it's dangerous to make predictions about the economy.

Speaker 13 I just don't see there's any way that this doesn't impact us in the back half of the year. I don't, I think he has dug himself too deep.

Speaker 13 And even if he were to say, tariffs are off, just kidding, nations are reconfiguring their supply chain and it's going to start to show up in Q3 and Q4 numbers.

Speaker 13 In some, well, I'll just say, I think we're headed for a recession in the back half of the year.

Speaker 1 This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our associate producer is Alison Weiss.
Mia Silverio is our research lead. Isabella Kinsel is our research associate.

Speaker 1 Drew Burrows is our technical director. And Catherine Dylan is our executive producer.
Thank you for listening to Profit Markets from the Vox Media Podcast Network.

Speaker 1 Join us for a fresh take on markets on Thursday.

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