Zuck's Senate apology, Elon's comp package voided, crony capitalism, Reddit IPO, drone attack
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本篇目录5 章节
§01Bestie intros! The guys try the Apple Vision Pro§02Zuckerberg apologizes to parents in hearing, Section 230 under fire from child safety reforms§03Delaware judge voids Elon's comp package, understanding Fortune 500 country club compensation§04Reddit reportedly targeting $5B valuation in potential March IPO§05Drone attack, risks of greater Middle East conflict, failures of the military industrial complex§01Bestie intros! The guys try the Apple Vision Pro
Alright, everybody. Welcome back to your favorite podcast, the all in podcast. It's episode 164. I'm down here in Miami. With me again, of course, the dictator chairman himself, Tomoff, Polyh Hopatia, and the rain man Yeah.
Burn Baby, David Sachs. Unfortunately, we had a little bit of a challenge this week. We don't know where Friedberg is. He's somewhere lost in his Apple Vision Pros, but he'll be back next week. As you guys know, I'm incredibly generous with my friend.
So I sent all the besties, the Apple Pro goggles, And so these Apple Pro Goggles are amazing, but, Wait.
You David. You bought me a pair of the Apple Pro Yeah.
Yeah. We talked about this. Yeah. I they're all you guys Actually, you were using them. You just forgot.
But, Friedberg been using them. Nobody can find Friedberg right now because, apparently, He went to Uranus. I recorded in all of these Sacks. What's happening inside each of our Apple goggles Jason prep.
Oh my god.
Oh my god. Yeah. And so but, yeah, it's Tremont. Here they are. We actually took a picture.
I had not take a picture of you wearing them.
Do you
want hey.
This is
actually wanna see what Chamath was doing in his goggles?
Yeah. Let's see.
I recorded it.
There he is.
Yeah. Look at that. See, he he imagined that he did leg day. Look at those legs. You know, as we did leg day.
Oh, by the way.
He's still reveling in that, first trap that he posted in the I
know, but you see those legs? The Apple VisionPROACH.
Can
I sorry? Can I
say look
at that?
Can I say something funny about this, which is that my legs are actually darker than might force on my upper body? It's the weirdest thing. And so you have it in reverse, but it is true that my My legs are a different shade than my my trunk and my arms and my
body. Okay. Well, here's Sacks. By the way, Sacks, you know, he loves his goggles. Yeah.
It's about you. I'm in the interest of seeing what Saks was doing with his goggles.
Oh my god. I can't imagine.
There it is. Zach was speedrunning. He was doing the speed run on DJ. Absolutely getting in there.
That's, saving private Ryan. Right?
Yeah. That's you. That's you. You were speedrunning, saving private Ryan there. Oh, I got them too.
Yeah. But I didn't record myself. I didn't record myself. I maybe nicked it. Oh, I what's in there?
Oh, look. What am I doing? Drinking the You cry me off. The weather winner's wide. Rainman, David Sachs.
We open source it to the fans and make discoveries.
Wait. You're telling me that they didn't have the 3rd or 4th investor in Uber up, but ringing the bell with them at the original moment?
I could tell you the backstory. I was invited by TK to come to the the ring of the bell. TK is disinvited So he was there on the floor. It was very awkward. And then they didn't have him go up and ring the bell, or be even there when Dara rang the bell.
It was because it was controversial. They didn't they banned him.
Oh, that's sad.
It was really sad. It was super sad. But anyway, Everybody, I hope you're enjoying your
So I see you were there or not?
I didn't go because
Oh, okay.
He was like, I'm we're gonna have a party. But we're not gonna be able to ring the bell, and it was just all, like, very Did
you go to the party?
I didn't. I should have. I remember right now going, but it was unclear if there was even gonna be a party TK was gonna go because of all the drama. And I don't know if you remember on CBC. They were like, TK's in the building, but he's not on the thing and that it it would became a big Brew.
But, yeah, so I missed my window.
I mean, if you had known that this was gonna be the big exit in your life, really, the only one then you would have made every effort to attend everything. Right?
Absolutely. Absolutely. Yeah. I mean, you're still Friedberg on that yammer in PayPal. You got it.
I was
I was talking to somebody about this the other day. Most people's careers, you have, like, you know, it's not like a smooth upper upper trajectory. There's, like, maybe a few pops that you get. You're lucky, actually, if you get a few because most people only have 1 or maybe 2. Yes.
It's like a power law. It's like anything else in venture. Right? Absolutely. Like, I'm sure if you think back on, like, the big outcomes in your life, it's not like there's one every year and, like, some sort of smooth Now Radiant.
It's basically there's, like, 1, 2, or 3 over the course of your entire career that you remember.
Right. Yeah. Absolutely. Yeah. I mean, it's it's good It's good to consider that, because you have to enjoy every sandwich.
You have to enjoy every day what you're doing because those pop out of your control. You don't know when they're gonna happen, how they're gonna manifest. So but you guys didn't get these. You didn't get the gog but these goggles came out this week. I don't know if you saw it.
What I will say is that the poker game, 3 of the guys, we're talking about these goggles, Sacks woke up at 5 in the morning on the 1st day. He was he got them. And then Koon and Robo were telling me that they just like, bought them randomly in the next couple of days. And it was So those
are civilians.
There was no, like, waiting in line. They were able to just order them as what they do.
Yes. But they're civilians. So just to be clear, like, in Silicon Valley, we're kinda like, whatever. You know, we've we've played with Oculus for so long, but now these are out. And there's a bunch of demos going around.
This one I thought was interesting. I don't know if you saw this, but watching in a basketball game, it actually is quite compelling to have all the stats on the screen with you, and you can kinda move them around. I maybe could see myself doing this. I don't know. Do you think you would do this?
Watching a game, maybe?
So, anyway, are you actually watching the TV through the goggles? Like, what part is real world and what part is augmented? Obviously, all the stats are augmented. Reality. Yeah.
This is all. Itself is is that
That's a stream. That's a stream coming into the book of goggles. Yeah. It's not your actual TV. So, you know, I think he's just putting it on the TV there, but you could literally be outside on your deck.
You could be on an airplane and do this. So that's like But
you can see through the goggles. Right? Is that the idea? It's
You can if you want to.
I think you can still see through the goggles.
Yeah. Is the idea. Yeah.
You know, that you could you can see the fact that you live in a Tatter department without a girlfriend dressed poorly.
You can see the dishes in your sink. You can see the cupboard being bear bear. You can see the spoiled milk in your refrigerator.
You're used bong that you use to soothe yourself to sleep at night. Whatever all of these twenty and thirty year olds do to cope, you'll see all of that while still being in an immersive environment. It's amazing.
I mean, it is so dystopian. I just think, like, if you take out your phone, your spouse is like, what are you doing on your phone? I can you imagine the audacity being with your spouse or your family and be like, ah, hey, guys. I'll be right Sacks. And you put the goggles on to watch the Knicks game with the Warriors?
I mean, I think that's a snap divorce.
I don't know. You said it very well about the the Oculus one, which is you had a turn of phrase, which I really liked, but basically it's like you were very quick to try it. And then there was like a period and then you lost interest. I think That's just going to be the key thing with this. And the fact that it costs $35100, they have to get the price down fast enough for average folks to want and be able to buy it.
Right?
Yeah. I call this experience try the try. Oh my. Goodbye.
You try it. You're like, oh
my god. This is incredible. And then you're like, we put it in your drawer. You never use it again. Chris, there's not an application.
It's really a proof of concept. Look, I think it's a great thing for innovation that they're starting with this, you know, like you said, expensive. Headset that maybe is not that ergonomic, but eventually it'll come down and the form factor will be glasses or sunglasses. Facebook. I don't know if it the product's out yet, but do you see their product where
The Ray Bans?
Yeah. It has the AI built in it and you can ask it questions and it will do computer vision and give you answers based on what it's seeing. It was a phenomenal demo. I don't know if that's actually real yet, but do you see that demo?
Yeah. These are the Facebook Rayband glasses, and I I do think These are meta smart glasses. They work particularly well taking pictures and sharing them on, Instagram. So they're kinda single function. He, you know, how Zuckerberg is he he cribbed what, heaven's people did a couple of years ago with the snapchats package.
But he he put out a demo that was a little different. The demo was, like, he was in his closet. He was wearing this. And he had picked out a shirt or something and that said, give me, you know, tell me what I should match this with.
Yeah. What goes with a gray shirt that I've wonderful for 2 years.
§02Zuckerberg apologizes to parents in hearing, Section 230 under fire from child safety reforms
David you guys see this thing where they all had to testify in front of the senate?
Yeah. We might as well. I guess we'll just jump right to that.
It was like a public flag
Yeah.
Once again, a public public flagging. We'll just jump here real quick since we didn't wanna go too deep on that one, but
Josh Hawley made Zuck turn around and apologize to to people in the audience. It was really intense.
Yeah. So this is the name of this hearing with big tech and online child sexual exploitation crisis. He was questioned along with the CEO of TikTok, Discord X, and Snap. But, obviously, this is all around Kids online safety and also section 230, which I think these senators are this is one of the few bipartisan moments, I think.
They're honing in on it.
Yeah. They they realize this is kinda like a winning take
a run at this.
They're taking a run at it. For sure. They realize it's a winning Take it. But let let's just play the clip, and then I'll get your thoughts, Sacks and Shamoff.
Let me ask you this. There's families of victims here today. Have you apologized to the victims? I would you like to do so now? Well, they're here.
You're on national television. Would you like now to apologize to the victims who Harborger product showing the pictures. Would you like to apologize for what you've done to these good people?
I I I'm sorry.
Everything that you have called on through, terrible, no one should have to go through the things that your families have have suffered. And this is why we invest so much and are going to continue doing industry leading efforts to to make sure that No one has to go through the types of things that your families have had to suffer.
Max, another powerful moment. And for Zuckerberg to get up and actually face the parents, he turned around. He faced the president in a very dramatic moment. And he apologized. Ned Ned, you you respect him for for doing that?
And and you think that was like a a powerful moment as well, and and where does this all wind down?
This was a kangaroo court. I mean, this was basically all theatrics This is basically, bipartisan moral panic where all these senators are basically grand standing. And these are the same types of accusations that we've been hearing for years. Remember, this goes back to the whole hogging claims where she says that Facebook wasn't doing enough to prevent various kinds of online harms. And I think that we're gonna regret where this all leads because where it's gonna lead, if they do repeal section 230 is towards greater censorship, all these companies are gonna spend even more resources restricting what we can say and hear online, which is not the right direction.
Jason, do some harms occur online? Yes. Do I believe that Facebook is taking substantial measures to stop them? Yes. I mean, but edge cases are always gonna get through.
When you're operating at that kind of scale, there are gonna be these edge cases of kids who got harassed or content that shouldn't have getting through is just part of the fact that the internet operates at gigantic scale. And these harms have always been out there. I think that these companies do their best to try and stop them, but they're always gonna get through. And you can't make every aspect of our society perfectly safe and harm free. Somehow we have this expectation that we can eliminate a 100% of every harm that occurs.
And I do think that these online companies have been unfairly picked on in a sense. I mean, if you're gonna talk about these types of harms, Aren't you targeting the music industry for all their incendiary lyrics that basically encourage all sorts of violent or sex behavior. Why don't you target the advertising industry for creating unrealistic body image expectations? Why don't you target the Kardashians for setting unrealistic expectations around image. And you could go on down the list.
I mean, why don't you target Hollywood for releasing a show like euphoria, which is a hit? It seems to me that the problem in our culture is not coming from the edge cases is coming from the mainstream entertainment. That is fully allowed and is popular and is our hit shows and hit records and hit products. I mean, that's where the toxic pollution is coming from in our culture. So to turn around and now blame the online companies for creating all of this, I think, is just and I think basically they're being scapegoated.
I mean, again, This is a moral panic.
Shamati, do you think it's some moral panic or, you know, there have been statistics and studies done about What is viral on social media, the algorithms targeting users, the addictive nature of it. You spoke earlier about the addictive nature of just gamification on watches. Social media is a little bit different than music and some of these other things because they have these algorithms to increase watch time and engagement. So think that's what the other side would say. What what do you say?
What do you say, Tremont? Where do you stand on this?
Let me just give a code out to a couple of things that Sacks David. It is true that we've taken turns attacking other forms of media when they were ascending in their popularity. So in the 19 nineties, if you guys remember, politicians and their censorship attempts around gangster rap and NWA and 2 live crew and certain songs
Al Gore's wife. Right? What what was her name? Tipper.
Yeah. Tipper.
Right. She
Tyrate against rap lyrics.
What was the NWA song? You know, the police. That whole thing just sent off a huge fear about people potentially, David, being motivated to kill cops or something. Right?
In the eighties, there is a trial. Judith Pre went on trial. Right. Because if you played one of their records backwards, supposedly promoted
Supposed in a game. Double worship, Sam.
I don't know who's playing records backwards. But if you did, then they promoted David worship. And I think a kid committed suicide, and so they basically prosecuted you to his priest for it.
So that's comment number 1, which is this is not new. And the reason why social media is in the crosser is is because instead of having this really diverse ecosystem of many small players. You have 3 or 4 folks, and so it's easier to bring them up on stage and sort of pilloried them. 2nd is I actually thought that Zuck had a lot of moral clarity because it's like, that's a tough position to be in, and the fact that he had the courage to turn around and actually apologize to those people shows he's trying to do the right thing, but the reality is, and Saks is right. If you apply a very, very small error rate to an incredibly large number, so they have a network of three and a half billion people monthly, right, or daily, or whatever the thing is, Even if you say that there's 1 10th of 1% of an error rate, meaning things that are unintended, Well, that's 3,000,000 unintended consequences.
Right? That's a lot of unintended consequences. And so there's this massive law of large numbers in place. So what what do we do, I guess, is the question. And I think that there is enough knowledge that we have to know that the ability for a thirty five year old to use certain products today is very different than the ability for a twelve year old to use that same product because of where they are physiologically.
Right? I think we we all know that to be scientifically true on the dimension of many products. And I think what we need to decide as a society is whether software and electronic products fall into that categorization. And if so, what does it mean? So in the case of China, they mandate top down what products can be used and how many hours you can use
them for David games you're referring to.
Yeah. And David's right, which is that if we go there and we rewrite the law, then there's gonna be a different set of unintended consequences that's gonna create, I think, a much poorer business landscape, frankly, to innovate and a bunch of other things.
And building on your comments, there's clearly an age at which kids can shouldn't be on these systems in an age where, you know, maybe with some guidance, they can Yeah. You wanted to add something to your mouth? Yeah.
And then I think the third thing is around the section 2:30 thing itself. I think that Sacks, I'll give you a slightly different take. I don't think that the section 230 rewrite is gonna be Broad and sweeping. What I noticed from a bipartisan perspective by both the Democrats and the Republicans is that the one single narrow issue that they all seem to align on is not necessarily about all of the different rules around censorship, but that the lack of liability for these folks should be relieved. And I think that if you were to write a narrow amendment to section 230, that David, that these social media companies or other organizations that had certain characteristics were more liable where today they have no liability.
I'm not saying that it's right. But my read of the temperature in that room was that that is the very narrow change in section 230 that I think they all seem to want to make. And so that seems like a very likely thing that will happen in the next 2 or 3 years.
Unpack that for the audience who who might not know how they would, do that. Section 230 says If you're a publisher, you're a common carrier, you're not responsible for what people post on your your system, blog, web host, or social media company. But where the social media companies move from being just a common carrier, you know, like paper might be or or a website hosting company like WordPress, or Squarespace is when when they flip over and they have an algorithm, and then they start picking and choosing. So once you start doing editorial like the New York Times, and you have editors, then you're liable. If you're CNN, you're liable.
If you're Fox, as we start on the Dominion case, that's where the liability comes in. So I guess the question to use Sacks is, you know, at the end of the day, now that we've seen these things at scale, is there not an argument that when you start editorializing through an algorithm and you start promoting certain content, that you have some level of responsibility like Fox News, CNN, where the New York Times has, where would you stand on that issue? Some liability, if you're picking winners and losers in terms of what gets promoted in the system.
Well, apparently, I'm the last person in America who thinks that section 230 was a good idea and a visionary piece of lead that actually enabled the creation of user generated content platforms just to kind of slightly modify your description of how it Sacks. I would analogize it to a newsstand where there's magazines on the newsstand, their publishers, and then there's the newsstand itself, which is a distributor. If a magazine engages in defamation. They're liable for it, but the newsstand is not. The newsstand can't be sued.
So the question is, when you have these massive user generated content platforms, are they operating as a publisher or as a distributor? And I think what section 230 may clear is, look, if you don't write content. If the content is generated by users, you're a distributor. And that is, I believe, the better analogy to make for these huge UGC platforms. Now at the same time, what section 230 said is that if you take good Samaritan actions, to reduce things like sex and violence on your platforms, then we won't make you liable because what happens in a lot of cases is that you can waive your protection legally by basically
getting involved. And so
the legislation didn't wanna deter these platforms for taking, again, good Samaritan steps. I think it's a pretty good combination of legislation. And that's what you see right now is that Zuckerberg doesn't wanna let these edge cases through. I actually believe that they are taking huge efforts at scale.
They have 40,000 people to give him some credit. There's forty thousand people moderating stuff. That's a big number.
These are edge cases that get through. And by the way, you have to wonder where were the parents when all of this stuff happened? I mean, they're acting like they're victims in the audience, and I'm sorry for their particular Jason, but at the end of the day, we do need the parents to step up here. If we wanna have social media at scale at all, the parents have to play a more active role. But in any event, to go back to section 230, I just think that Republicans in particular are gonna re really regret getting rid of section 230 because it's only gonna lead to more censorship.
I think what they're going to do if I had to bet is that they're going to write a very narrow amendment to that law. And during some budget process or some other thing where you have a big Christmas tree bill, this will get in there And I think it will have bipartisan support that effectively removes the liability protection that these companies have. I That's not
a small change. That's the entirety of section 230.
I think like these companies will not be able to use that.
That's a massive change. Jason. There are plaintiffs lawyers. The the plaintiff's lawyer's bar, you know, the trial lawyer's bar is salivating over the possibility that would happen.
That's why the is gonna happen. You know, the way this is how America works.
Personal injury. Hold on. They have personal injury lawsuits
and court
lawsuits lined up in every jurisdiction in the United States. And here's the thing is because Facebook and all these other sites operate, you know, across the entire nation and across the entire world, they can be sued in every single jurisdiction if you allow these types of lawsuits.
Okay. Chamath, you go, then I'm gonna get my position and we'll we'll move on.
I'm gonna say this in as un opinionated as a way as possible. Whether we like it or not, there's an element of American Calacanis, that takes companies through seasons. And there are seasons where you're growing, and then there are seasons where you're over earning And then there are seasons where if it is possible, the machinery, if you see that you are being, you are over earning for a long time, the machinery of the economy comes and kind of pulls you back down to earth.
You've won too much, and you're you're perceived as too powerful. Yeah.
And I'm saying this whether or not it's right. I'm just saying that if you look back in history, these chapters have been written teen times. And I and I think, David, what you said is the absolute single most important thing. If you had to figure out where this was gonna go is exactly that. The plaintiff's lawyers, the class action lawsuits, the amount of money that they think they can extract.
And they compare it to the amount of money that they were able to extract in 2 different kinds of cases. 1 was tobacco. And then the second was pharma. And I think that they look at this class of app, and the lack of empathy or the lack of popularity that the leaders of these companies have in Washington as a reason why they will probably be able to get this done to create this. Again, I'm not saying I think that's good.
I'm saying that I think it's likely. And I think when that does happen, you will see a replay. Again, it'll be slightly different in terms of how it plays out, but exactly the kinds of plaintiff's lawsuits that we saw in pharma and in tobacco. And I think it's gonna play out here. And David, you are right.
That hearing to me was a setup for that.
Yeah. And that if you if you look at this through that lens, there will be some sort of negotiation, and and it might be age. Cause when you look at this, really, what Americans are upset about is the impact this is having on kids. We have a limit for the age of smoking, vaping, etcetera. And when these things happen, I think a an easy concession that Zuckerberg and others will make is, hey.
These products will be for sixteen years old and up. That's my that's the age. I think it's appropriate. 15 or 16 seems to be
Well,
he also said, by the way, Jason, to to your point, Lindsey Graham was the one that brought this up. And Graham made the connection to tobacco and also to firearms.
Yep.
And then Mark at some point in there basically said, well, Jason, like, Let's look at Apple and Google, we should expect them to do the actual age verification on
us. Right. Cause they have the devices and they have the credit cards and etcetera. That that's a very reasonable thing for for Americans to come to. The only thing that breaks down a little bit, Sacks, your argument, and, Jason, there's no perfect analogies here.
But if there was a repeated offense of a magazine on a newsstand, for example, if there was some magazine that had underage know, an adult magazine that had underage kids in it, and people knew that, and a newsstand continued to publish it. They would have liability for traffic in child pornography or or whatever it happens to be. And so the the new stain does get some liability. So there's, again, no perfect analogies here. But I think
But Facebook and all these other sites are trying to remove the child porn or whatever. I don't think much that gets through at all. You know, I think maybe you have a better argument, and and there is the argument that people make is that because of the feed that they're making editorial judgments, and that's obviously not disturbing. However, account arguments to that is that the feed just gives you more of what you want. I mean, it just looks at what you're clicking on, what you're viewing, the time you're spending, and they just give you more of that.
I don't think it's editorializing. Now back to Thomas's point about this is the way things are headed. That may well be right, but I think we're gonna regret it. I mean, first of all, the democrats interest that one of their biggest donors is the trial lawyers bar, and they generally will support any legislation that opens up the causes of actions, and that's where this is headed. And what's gonna happen is if they get rid of section 230, is that every time there's an alleged harm that occurs every time a kid gets bullied or beat up in school every time Something goes wrong in their life, they're gonna try and pin it on social media and and try and show that they imbibe something on social media that led them down this dark path.
And these types of companies are gonna get sued in every jurisdiction in America. Recently, we've seen huge judgments related to defamation where if you have, say, a red politically red defendant, in a blue jurisdiction, huge awards. I think we could probably see the opposite as well that basically you'll start seeing blue defendants taken on in bread jurisdictions. We've seen completely disproportionate judgments in, again, around defamation, disproportionate relative to the harm that would actually took place. You're gonna see that on steroids if we get rid of section 230.
Now historically was the job of Republicans to oppose Democrats on this stuff because they knew that Democrats were shilling for the plaintiffs bar. Republicans have not done that because they're so mad at these social media companies for censorship, remember when I talked about Good Samaritan liability, these companies created content moderation to basically try and remove the violent material, the pornographic material, the sexual material, the harassing material. But in the process of doing that, they started making political judgments. Jason they started engaging in political censorship. And that has made the republicans so angry that they have now turned against these companies, and they are willing to remove section 230.
My point is I think Republicans at the end, they are gonna regret that because if you remove section 230, is gonna open up this flood of litigation.
Maybe a free for all.
It'll be a free for all. And what's gonna happen is that these companies just driven by simple corporate risk aversion are gonna clamp down even more. I mean, the content moderation is gonna be even stricter And because the content moderators these companies basically are are liberals, if you empower them to take down even more content, they're gonna take down Republican stuff even more.
It'll be
very it'll be very easy for the plaintiffs to target that type of content. They'll say that, oh, that you know, all of that, republican or conservative content that influenced people in a very negative direction that created all of these harms. They'll be lawsuits targeting that sort of content and Facebook and others will respond in the economically rational way, which is to shut it down completely. So I think senators like Josh Hawley are not gonna get what they want.
Not thinking straight. Yeah. Shamak is
gonna back it's gonna backfire. Shamak?
The reason why this is gonna happen, if it does happen, And and you wanted to try to be probabilistic about it is because when you look back at the tobacco settlement, the original settlement in today's dollar is about $370,000,000,000. If you if you were the trial lawyers and you're looking at a combination of Facebook and TikTok and all of the all of that money, I suspect that they probably think that the potential that they can extract from these companies is going to be multiples of that number. And then as a result, their fees will be between 20 50 percent of that. So you're talking about 100 of 1,000,000,000 of dollars of revenue potential that will motivate, I think, these folks to get the law changed, and then the byproduct will not be framed in terms of dollars if these are highly kinetic issues when you're talking about sexual exploitation in young people and mental health and suicide and bullying. These are very kinetic issues, right?
And so bringing these to jury trials all across the United States I think that they probably think that they're on the right side of history in winning those things. So, you know, again, I'm not saying it's right.
I'm not saying Chamath. And I'm a say highly motion. I mean, listen.
It's gonna win. People's kids. Is gonna win. You bring a case
of, say, teen suicide. Okay. Harbor that it happens, but there's gonna every time something like that happens, there's gonna be a huge temptation. I'm sure there'll be trial lawyers who specialize in this. To bring a case against Facebook or some other social media company, and they're gonna scour through the these accounts and try to point to examples that could have led to this result.
And the truth of the matter is that maybe social media contributed a little bit. What about popular culture and popular entertainment? What about all the messages?
I'm not debating any
of that.
I'm just I'm pointing out what's gonna happen. What about all the messages they received? Not not through the edge cases that got through on social media, but through the mainstream entertainment. I mean, all the shows they're watching on television, all the music they're listening to, the things that happened in their schools, and day to day conversations with other kids, but you can't really sue any of those other things, but you can sue social media.
The the crazy thing about all of this is that All of these lawsuits are funded in part by these hedge funds who will do litigation finance and part of putting together A well performing litigation finance fund is underwriting the probability of Sacks. And I think when you flow through the probabilities and you apply it to these companies, largely because of their profitability and their ability to over earn and generate profits, I suspect that Wall Street is probably already involved. If and if not, they'll probably get involved in due course. But it's it's an unfortunate thing, David. I agree because this is sort of like, hey.
The rules on the field were x. And folks operated by those, and they are clear they are trying to do their best. But again, this is where capitalism the part of capitalism that can be awkward and uncomfortable is when industries over earn for long periods of time, other folks say, I am gonna compete the way those returns come out, and I want a share of those profits. And I think that that's gonna be the large motivator And it's just gonna result in, I think, these things changing and a plethora of lawsuits.
And at the end of the day, this is about children and protecting children. So the obvious solution here is society has to come up with a number.
Well, sadly, I think that could be a good year too. Know what I mean?
Hold on. Let me finish my thought here. It it the the key thing is there's some age in which we all agree it's reasonable for kids to be using social media. And there's a certain age when we think it's not reasonable, and back to capitalism, I think a very good point you made from off, these companies are gonna have to say, well, if we lose the twelve to fifteen year olds, is that better for society and better for our business. And we just all agree that social media should start at 15 or 16 and then the handset manufacturers and the and the Social Sacks, all have you have to get permission from your parents to use them, period full stop.
And that's it. And That may be where this all winds up, I think. And then also explaining the algorithms, I think, is the next thing that's gonna happen. People are gonna have to disclose how these algorithms work.
I think you're making a very good point, which is that is the right conversation to have. My point was that instead of having that conversation, which is more societal, it involves David right parental responsibility.
What is our role? Absolutely.
On being actively involved. And by the way, the trends around family formation and the fact that there's way more single parent families make this problem even harder because now there's only one person to check-in and not two people to check-in. So all these things societally build on itself. Jason, that is the absolute right conversation to have. My point is that's not gonna be why the rules need to get rewritten.
The rules will get rewritten because there's an economic argument by a different sector of the economy. In this case, the trial lawyers and other Sacks, that say there's a $1,000,000,000,000 to be had. If we get this law change, they are motivated enough to do that.
Yeah. Parasitic sector. So there is a bill right now working its way through the California assembly that would go to Gavin Newsom that would prohibit the use of social media by under sixteen year olds. So that is actually happening.
Yeah.
I agree with you. That's a better debate to have than changing section 230 in a way lead to more censorship. By the way, just just on that point, I think Republicans need to understand this in particular is that the anger towards these companies is bipartisan. The the outrage is bipartisan. The moral panic is bipartisan.
You saw it on in that hearing, you couldn't really tell the difference between Republicans and Democrats. Okay?
So Full display.
I wouldn't be surprised if they agreed, like Shamas said, on some sort of change to section 230, but here's the catch is that Republicans Democrats have fundamentally different objectives. Fundamentally Democrats want there to be more censorship. They say this all the time. We want you taking down more content, not less. Republicans want there to be less censorship.
Okay? So if they agree on the same piece of legislation, only one of them can be right. Okay? And the question is who's gonna be right? My guess is that if Democrats and Republicans agree on a section 230 modification, the Democrats know what they're doing, and the Republicans generally being the stupid party who get outsmarted all the time by Democrats are gonna agree to something that they later regret.
So at the end of the day, I don't think that bipartisan legislation should be possible. The anger is bipartisan, but the objectives are not. And if something gets through, it's gonna be because Republicans make a huge mistake. And just to give a tangible example of this, okay, take the second amendment. Okay?
Do you think that in this world where there's no section 230, that Republicans are still gonna be of conversations online about, say, gun enthusiasm. No way because every time some harm happens every time there's a shooting of some kind, a plaintiff's lawyer.
Yeah.
A plaintiff's lawyer is giving us to not the person who posted the content talking about how much they love their guns and, you know, and it look. It could be totally innocuous. Okay? It could be a a forum on Facebook or Reddit where people are just having conversations about
gun reviews or gun reviews. Yeah.
Could be totally innocuous conversations. Okay? People having the right kind of conversations about guns. Okay? But you know that every one of those websites that hosts those conversations will be targeted in relation to any harm that occurs in the real world.
And very soon, Reddit and Facebook and all the rest will feel compelled to ban any conversation related to even second amendment rights. Okay? Yep. This is where it will lead if Republicans get rid of section 230. You will be the ones targeted, not not liberals.
Alright. A great discussion. You know, it's important to have the right discussion. At this reminds me of the abortion discussion where nobody would ever talk about the number of weeks. Like, that's at the core of the issue.
We could agree on the number of weeks. We can agree on the age here. You know, for for kids to to use these things, maybe we can move forward. Let's move forward on the docket here. We got so much to talk about.
And I think the number one story of the week was Elon's pay package and this ruling that occurred in Delaware Let me just tee this up here. Many of you probably know about this already, but in 2018, Tesla's board approved a performance based compensation package for Elon was approved by 73% of shareholders. Elon and his brother Kimbell would have put that at 80%, but they were excluded, obviously. This is lower than maybe some other support levels. According to Reuters, you typically see 95% for a executive compensation packet.
§03Delaware judge voids Elon's comp package, understanding Fortune 500 country club compensation
But this one was very unique. It was all stock. There's no cash bonus, no salary. 12 trenches of stock was very creative in in how this was put together because Elon got nothing if he doubled the value of Tesla, but then if he, you know, increased the value of the top line revenue and the market cap increased by $50,000,000,000. He got 1% more of the outstanding shares, which is an amazing deal for shareholders obviously, because the market capital in the company went up 50,000,000,000.
The initial plan was only worth about 2,600,000,000, but since Tesla rushed it from 2018 to 2023 with our open chart here. Some of the great runs in the history of capitalism, how revenue and sales grew at this company. So it made it the largest comp package in the history of public markets. And if you compare Tesla to Apple, the 2nd highest increasing stock price during that same time period, Apple went up 345%. Tesla went up 800%.
In 2018, a Tesla shareholder suede Elon and Tesla's board claiming the pay package was unfair. The guy had 9 chairs, a full 9 chairs, not 10, 9, worth 25100 his stake with 10 x in those 6 years. So he made a fortune on that bet. And then on Tuesday, a Delaware judge voided Elon's pay package signing with the investor. Elon can appeal it to the Delaware Supreme Court.
Sacks your thoughts on this ruling. I teed it up. I think I got all the details in there. If I missed any, please add them.
Well, I think in order to reach this ruling, the judge had to find 3 things, and all of them had to be the case in in her opinion. Number 1, that the pay package was excessive. Number 2, that the process by which they came up with the pay package was not fair, meaning it was not sufficiently adversarial enough that the directors in her opinion had too many ties to Elon and didn't again take enough of a antagonistic role in negotiating that package. And number 3, and I think most importantly, that the shareholder vote was invalid because even if the first two had been true, the shareholders approved it. And that would have been good enough, but she said that the shareholders weren't sufficiently informed.
And specifically, I think this argument hung on a few internal emails where people said that they thought that they could hit the numbers. I think that of the three legs of this, well, all three have been challenged by opponents of this verdict. I mean, number 1, yes, the PayPal ended up being a gargantian amount, but you have to look at an ex ante, not expost. Nobody thought Elon could hit all these numbers. Back at the time this package was negotiated.
Let's be frank. It was absurd. The idea that he would 10 x, it was
crazy clip with Andrew Raw Sorkin where they're all laughing at the idea that he's gonna hit these numbers. Remember, this was at a time when Elon was going through what was called production hell. Where you're sleeping before the factory. Yeah. I was there.
Come out yet, and nobody nobody believed that the model through is gonna be the hit that it was. In fact, all the stories We're poo pooing that idea and basically saying that Tesla is basically screwed because they can't get the production line working correctly. Yep. You wanna play this?
Testing now announcing. A radical new compensation plan. It could be perhaps the most radical compensation plan, in history. The executive will receive no guaranteed compensation of any time. If any kinds at all, he gets some salary, cash bonus, equity, he only gets equity that that vest over time, but only if he reaches, these hurdle rates, which are Dare, I say crazy.
The only part of it that I think is really relevant is where Sorkin says that the milestones are crazy, meaning that everyone thought it was a pipe dream that the company would ever hit these numbers. Okay. So that's point number 1 on on magnitude. On the second part of the ruling about the process, it is true that like in most venture backed startups, there's a longstanding relationship between the founder and the investors because they work collaboratively to try and make the company a Sacks. There were emails that came out where Elon shows that I'm not trying to go for the maximum here.
So, you know, did did the investors go in with hostile antagonistic attitude that we're gonna try and pay you the least? No. But did the Elon go in with the attitude that I'm gonna try and take the most? No. The the email showed that.
What they tried to do was come up with something that they thought was fair that would fairly reward him for outsized performance. And if he had merely increased the the value of Tesla from 59,000,000,000 to a 100,000,000,000, he would have gotten nothing. Let's just keep that in mind. So they tried to come up with something that would reward him for outsized performance and give him absolutely nothing for merely decent or good performance. The third point about the shareholder vote.
I don't think that there was anything about the shareholder vote that the shareholders didn't know. I don't think that the company didn't release it. Elon always said, yeah. We're gonna do this. We're gonna be one of the most valuable companies in the world.
He's always been super optimistic about their ability to reach these targets. But if you looked at all the Wall Street analysts, including Sorkin there, they thought that these targets were unreachable.
Well, also to add to that, Sacks, this had the largest short position, I believe, at that time of any company ever. People were betting with their dollars that this company was going to 0. There were a ton of people who the narrative was. This they'll never deliver the model 3. It was 2 years late, right, or something in that range.
It was They they kept trying to get the model 3 out. It was taking forever. So, yeah, it's it's absurd. Also, in that case, Sorkin said in that same clip, there's been a lot of speculation of you going stepping down after the model is in production in the charges ruling, she said the exact opposite. There is no reason to believe Elon and Leaf, except that he was running, like, 2 or 3 other companies.
There it was actually quite possible that he would leave. He'd never wanted to be CEO of Tesla. People will forget that too. He had tried 3 CEOs of Tesla, and he only took over Tesla And I remember it was because he David, I Jason, this thing's gonna fail if I don't take it over. He he tried 3 different c l e CEOs in the beginning.
People forget that fact.
And there was scuttlebutt that he would hire somebody. I remember there was, like, rumors about Cheryl, Friedberg, maybe getting off of the job, or something like that. I remember he was he was going through production hell. He was sleeping on the factory floor.
Yeah.
And he was talking in interviews about how miserable his life was at that time. I mean Can't confirm. Yeah. Exactly. So, look, did he have leverage to basically say, you know what?
Let's just hire a CEO. Yeah. Absolutely.
Okay. Shamoff, any, steel man you can do at the other side here. Like, as an investor, public market investor sometimes. When you saw that pay package, what did you think? I I don't know if you were a shareholder, if that's what the time or not.
In the midteens, I started investing in public Sacks as well as private tech companies. And I got invited to give a presentation at the irisone conference, which is like the most pre prestigious conference of public market investors. You, in May, you show up at, Lincoln Center, and everybody in the audience is paying like 10,000 bucks a ticket or something. And all the proceeds go to, a foundation in support of this gentleman, irisone, who passed away. But in any event, it's like Ackmon, tapper, Einhorn and I picked Tesla.
And I was a very big supporter in many ways and still Chamath I think that I knew the company frankly better than most people, except for him, obviously, but I think that I studied this company quite deeply. When I and I'm I'm just setting the context. When I saw the pay package, I thought he's making a mistake. This is unachievable. I thought the probabilities were in the low single digits.
And then he did it, which just kinds of shows how incredibly adept he is as a CEO and a manager and an executor. So then, you know, to go back 5 or 6 years later, after he actually does something that so massively disproportionately positively impacted investors And then to just rescind it and unwind it, I think is really un American and unfair. And I think it sets a very poor standard for why anybody should actually build a company governed in Delaware. It makes no sense anymore. And just to give you that example, He he and I have both now done this, but like these incremental companies that I've started are in Nevada, they're in different places because I find the Delaware Court slightly and increasingly unpredictable and acting with other mandates that they weren't ever given.
So you what do you think that mandate is? You had a place where there was highly predictable governance. And they had very narrow ways in which they would act and opine. And I think in a situation like this where you had every opportunity to actually vote this thing down. And what little of the documentation that I saw about the communication back and forth doesn't seem to support this theory that he rammed it through.
Nobody rams anything through over 9 months where he takes month long breaks and He tells the GC, this is actually more than I wanted. Nobody does that. If you're rapping, it's the opposite of raving something through. It was and and I suspect if you really asked him and I haven't, but I would, he probably thought it was, like, largely crazy. And so I think a lot of people thought that we that we were as shareholders, and I'll tell you that I felt this way, getting his hard work and that he may have just mathematically been mistaken.
So yes, he got 55, or he that package is worth 55,800,000,000 but you're missing the point where every other investor made $500,000,000,000.
Right? Yeah.
And the investors the investors did approve it.
It will have a chilling effect, I think, and how people think about compensation. It will cause companies to be even more constipated and sclerotic and unimaginative as a result of this because the most talented individual entrepreneurs now have even more of an incentive for incorporating in other places and also staying private. And I think what that deprives is the broader shareholders, including this gentleman. Look, we live in America. He had the right to sue.
He had 9 shares and he was able to bring this lawsuit. 9 shares.
I mean, David and Elias. Yeah. I'm the idea that so at 9 to 10 x their money.
But what he doesn't but, you know, and imagine, I
I don't
I don't know if he'd remained a shareholder through this whole period, but even those 9 shares 10x in value.
Yes. Yes.
But he would now be deprived of that in this next iteration of Elon Musk's because why would they ever go through this to put that much work into something to be so at risk personally, your own mental and physical health, we saw him in those periods. And then to have it taken away, I think, is deeply, deeply
unfair. Sacks.
You're right. This this deal was a win win. I mean, if Elon could achieve these numbers, it was good for him, and it was great for our shareholders. And that's why I think the key point is that 73 or 80% depending on how you wanna count it approved this deal. I think they knew everything relevant that they needed to know when they approved it.
This is the deal that most shareholders and most companies would want for the CEO. The deal is you get nothing unless you deliver an outsized return for shareholders. Most CEOs won't sign up for this deal. Most CEOs work their way up through the corporate ladder. They get into the CEO chair, and then they pay themselves huge amounts of money regards to whether the company succeeds or fails.
And that's the deal they want because they don't really have confidence in themselves to deliver what's Sorkin called the crazy outcome. Elon had the confidence in himself to deliver the crazy outcome, and nobody was really complaining about this until, like you said, this small shareholder who's really basically just, you know, a name plaintiff for the trial lawyer's bar, somebody who wants to get you on Brit to bring the suit.
6% to create 600,000,000,000 in value. I mean, it's quite a bargain Sacks. And I think if you went to Ford or GM and said, hey. Would you like Elon to be your CEO? I think that off on half the company.
Mary Barrett doesn't want this deal.
Yeah. No. Jake Al Sacks said something really important that you just mentioned as well, which is that if you actually look at the average compensation plan of most public company CEOs, it actually is very much counter to shareholder value. I'll give you one simple example. If you look at the number of, of CEO comp packages that are tied to earnings per share growth, but then if you actually look at how these CEOs achieve their EPS targets,
Yeah.
They do it by raising debt. So in debting the company, right, increasing the enterprise value by by loading the company up with debt and then driving repurchase plans. And what what do those do? I mean, look, if you look at Disney, where do their repurchases come from? From debt.
So does debt help an equity shareholder it categorically does not. Under no world, does it do that. However, for the CEO and for the handful of investors that that can hold on for long periods of time, or it'll have you, they benefit from a lower share count, they benefit from increased EPS, and then the CEO gets compensated. And so to say that passively, what you disapprove of are performance incentives and what you are actually approving of are mechanics that saddle a company with debt and allow basically gaming of numbers is what you've implicitly also said. And this is where I think the Delaware Court used to be known for a level of intellectual clarity that would have prevented that implicit assumption.
But that's now what's left on the table, and I think it will have a ripple effect across how so many other companies design design their compensation plans, how CEOs think about risk. No CEO, as Sacks said, will ever want an incentive laden plan like this ever. They will want
to get it. Right? Because 10
years later, you could do all the work and then it gets canceled.
Canceled. So why are
they completely unfair? They will
want something that is totally gameable, right? Where you'll have 90 plus percent support and approval because of how vanilla and benign it is on the surface, but it will actually be quite a terrible plant underneath the surface. And what I mean specifically are these EPS targets for CEOs. So Elon did the one thing that was crazy, which was I'm just gonna do it based on pure profitability and performance. Jason he gets punished.
And all these CEOs in this other class were like, let me saddle these companies with debt that actually undermine shareholders have been reward.
There is already a mechanism for somebody who disagrees with the comp package. This person who owned the man's shares could have sold their shares. It's a liquid market. At any point in time, that person could say, I don't agree with this. I'm taking my nine shares of $25100.
I'm gonna put it in apple. I'm gonna put it into I like Tim Cook's pay package better. I like betting off package better, and I'll make my bet there. The Jason had choice. Yes, shares, anything affecting because he 10x his shares and beat the market.
Yeah. I mean, look, I I don't place the blame on the shareholder per se. Because this is really about a judge's interpretation of Delaware law and what companies are allowed to do. So whether the shareholder was harmed or not or had 1 share, a 1,000,000 shares. That's just the way that this case gets into court.
The question is the interpretation of Delaware law. And again, the part of this that I would go back to that that I think was the mistake is that I think the shareholder vote was valid. I think the process was valid as well. I don't know that the process has to be this extremely adversarial process where one side's pulling for the most one side's pulling for the least. I don't think either side operated that way.
But again, I think shareholders knew what they needed to know, and the evidence of that is in all of the public coverage at that time, nobody thought Elon was getting a good deal. Right? No one thought he was getting excessively good. They thought that he was getting a delusional deal, meaning delusional for him. And everybody seemed to be okay with the idea that if somehow Elon could pull off this miracle that he would be entitled to this compensation, and he would get nothing if he didn't.
Now, again, I would go back to do you think Mary Barrett would have wanted this deal while Elon was spending the last 5, 6 years making Tesla Go 10x, let's look at GM. GM's stock price was trading more or less in a flat range. I don't even think the share price doubled.
Yeah. Compare it to. You see the compare 2 button there. Put compare 2 and then put Tesla in there.
Right. So if Mary Barrett had signed up for that comp package, she would have gotten absolutely nothing, which is why I'm sure that the thought and everything crossed her mind of having an all incentive based comp package that doesn't even start until you at least double the value of the company. By the way, on those milestones, it wasn't just the share price. It was share price and revenue or profit targets being met. So in other words, if the stock just rallied because of macroeconomic conditions, like, for example, interest rates go down and then all of a sudden, the whole stock market goes up, that was not good enough.
It was also tied to the combination of stock value increases with revenue and profit targets being met. It was a comp package that couldn't be gained. I mean, you have to hit the numbers in order to get the the comp package. That's what she got. And I don't wanna pick too much on Mary Berry here.
I guess I'm picking her out because Joe Biden said that she created the EV revolution.
Yeah. Well done. They've sold 17 cars, and I think they canceled the car. Yeah. Congratulations.
There was there was a remarkable article in the Wall Street Journal just in December where they finally admitted that this whole idea that GM had been leading any kind of revolution or had been a transformational company was revealed as basically a ruse. But, look, you you have to wonder how much of this is political. I mean, Delaware is Joe Biden's state. He's the senator. There were articles describing how this judge was connected to a law firm that had helped Joe Biden get elected.
And you just kinda wonder whether Biden's directive from the White House podium that we gotta get this guy or we gotta look into the sky that he's an enemy which has been reflected through all these different administrative agencies, sudden actions against Elon's companies for the glass house,
Starlink and the FCC.
Yeah. There's been a whole bunch of these issues, and you just wonder, is this another manifestation of that?
Yeah. I I mean, the the the conspiracy theories are quickly shopping closer to reality. And we definitely need to investigate that. I for sure because the FCC thing is is he spending $15,000 putting fiber into people's phones when you could spend $1500 giving them star makes no sense. And those same people will have to wait for fiber.
They're just gonna create Starlink anyway. They're gonna buy Starlink while they're waiting for the government fiber. For 10 years. It's absurd.
I do wanna uplevel this just back to what I was saying. And I'll try to I'll try to make the point better. I think I think it's really, really unfair. What's happening to Elon, but I want
to take a step back and think about just the
bigger picture. If we want an economy of vibrant companies that do great things, we're gonna need to reward people to work at those companies. And in order for the United States to sort of continue to exert some amount of dominance in the areas that we think are important, We need to be economically vibrant, right,
and fair
and fair. And the problem is that this really perverts incentives, and it's gonna exacerbate a trend that I think has actually held a bunch of our companies back. So the first thing I just wanted to show you guys was just this little thing that It's just a pie chart that shows, okay. How do CEOs get paid? Right?
So we want CEOs to go and run really important companies. Right? We want those companies to do great things in the world. We want these CEOs to be deeply motivated to go and push the boundaries of what's possible, right? We want all that.
And so we wanna compensate them to do those things. This is just a representation of how CEOs have structured their pay packages. Jason you'd say, wow, all of these numbers seem reasonable. Return on capital, total shareholder return, earnings per share. So what you need to do then is double click into this, right?
So this is how CEO pay packages are made, but the problem is, and Jason, this is my problem with a bunch of these companies that all the returns, all that shareholder return that you saw the return, it's all driven by share Sacks. Yep. This is an artificial gamesmanship of performance. This is not companies pushing the boundaries. You know, this is not Disney figuring out.
It's not innovation.
This is this is not
M and A.
This is Disney creating foot faults and falling into potholes of their own making, but you can drive great compensation because you can in Sacks, it just creates a bunch of financial engineering that results in marginal companies in David just gave an example of one that could be considered that. So the point is that when you have one person that tries to buck this trend, I just think it has a huge impact by basically saying, hey, play the game like everybody else. Just game it. Just dial it in from your country club. Make sure that you become a member of Augusta.
That's more important to us than actually sleeping on the factory floor.
And don't take risk. I mean, if you think about what do you do if you're Apple, you're Google, you're Microsoft. You're sitting on tons of cash. It's a safe thing to do.
You see what they do.
You just buy back the shares.
You just buy back the shares.
You can't do M and A.
You issue debt. Yes. And then you buy back the shoes. Arbitrage. You encumber the shareholders with debt, and then you artificially inflate total shareholder return.
And earnings per share and the return on invested capital because of how we can play these games in America. So right now what we are doing is we are not motivating CEOs to run great companies. We're motivated CEOs to understand financial arbitrage. The result will be crappier companies that diminish American exceptionalism. That is the only outcome.
Perfect. We said, and and there really are 2 caveats there. Number 1, We have to let M and A occur as well because that's a better thing to do in some cases with this some with this excess capital profits people have sitting there. And the only time really to buy shares back is when you think they're undervalued. You would agree.
Well, to your point,
I actually think you're absolutely right. If you have a bunch of CEOs that don't know what they're doing, which is what these charts kind of show, them buy whatever they want because they're gonna screw it up. And that's fine for us anyways. So
we refer fluid marketplace.
The CEO that you don't wanna have be able to buy companies is the actually motivated one to get paid when things go really well and to be, you know, to be more profitable. So That would be the CEO where you would be scared. Oh my gosh. More m and a for that person may be best. But more m and a for these CEOs is who cares?
Yeah. Microsoft starts buying a bunch of stuff. Google starts buying stuff at their primes. Man, that's scary. Right?
When Bill Gates went on a heater, he bought I think he bought PowerPoint, a bunch of the suite was bought not created. And then Google and Facebook, man, they went on heaters, YouTube, Instagram, WhatsApp. And that was the golden age of M and A. Alright. We got a couple more things on the document.
I wanted to touch them.
I just found these stats.
Go ahead, Sacks. Great conversation.
So just while we were talking, I just looked up what Mary Barrett's compensation was over the last several years. And according to this source, she was paid a $167,000,000 for 4 years. So while Elon got 0, thanks to the judge's decision, Mary Barrett, basically, if you add in probably the 5th year, let's call it roughly $200,000,000 of compensation over the last 5 years. Now look at the stock chart of GM. Literally this it is the same price today as it was 5 years ago.
It's $38 a share today, it was $38 a share 5 years ago.
No. But it's worse. It's probably worse because they've issued options since then. So there's dilution. You have to take in.
So it's it's worse than that, actually.
But at best, the stock price is flat. And the stock basically fluctuated in line with market trends when there was an asset bubble in 2021, the the share price went up about 50% and she got even more stock in options during that time, but it was It was a no lose proposition, basically. She got paid in regards to how the stock did. And then when there was simply market volatility, she did even better. One of the nice things about Elon's package is that unless Tesla at least doubled in value, he would get nothing.
And it was tied to milestones around revenue and profit. So he couldn't just ride market volatility No. To getting more comp
If you gave this executive the same deal as Elon, she would have had to double 38. So, you know, she would have had to get to seventy six dollars.
Or roughly
80 bucks a share.
She she had to get 80 bucks a share before she got anything. I bet you if she got 0 she gotta pay $1 and her health care, and she had to get the $80 to share. I bet you that would be an $80 stock price.
Well, I don't I don't know if she has the ability to engineer that outcome, but I doubt I doubt
So she's saying she's unqualified? No.
Well, the Wall Street Journal David it. The Wall Street Journal just had this tenure of
No. That's why point is
where they said that she failed.
They they're they're hiding in front of us then. Yeah.
Well, look. I mean, I don't wanna say that she's incompetent. I just wanna say that the stock price is the same. The Wall Street Journal had an article talking about all her
She swept 200,000,000.
Transfer all of her transformation issues have failed. She swept roughly 200,000,000 over just the last 5 years. I think she's been there 10.
So how
is she insured?
She's probably made several $100,000,000. And the company hasn't created any value for shareholders.
So how is she still in charge?
Just Jason, this is the way the Fortune 500 works. It's a country club. Okay? Who gets appointed to these companies? These companies are not run by founders.
They're not even run by VCs or serious skin of the game. The kind of directors that this judge didn't like. Okay? It's run by people who play the game. They basically are on other boards and it's basically a back scratching club.
And they choose the CEO. They choose someone who's politically Sacks. Who's worked their way up through the system, who donates to the right people, who can get Joe Biden to come to a factory and talk about how great they are and and hold an EV summit at the White House and invent this this fiction that they were responsible for this innovation. This is basically how the system works.
So corrupt.
I'm glad that women have been admitted to this country club. It is still a country club. It is still a back scratching club. It is basically a collection of people who don't create any value, but pay themselves enormous amounts of money, hobnob at the right people, and work their way in with the powers that be at the White House. Who then talk about how great they are while actually accomplishing nothing.
Nothing. 0.0.
I think the common furlong in these two conversations we've had this morning is about just how capitalism can be perverted, if you will, by a small group of actors. In the first example, I think what we were talking about is the trial lawyers association and their ability to impact and influence what is going to happen around section 230. And in this example, I think what it speaks to is the influence that a small group of consultants can have in having built a very thriving business in designing these compensation plans for CEOs. And it reminds me of a of a clip of Buffet and Munger. And Nick, if you just want to play it, I think they say it in very clear plain English and not to debate their opinion just to state it, but Nick, if you wanna
do not bring in compensation consultants. We don't have a human relations department, and we don't have a we don't the headquarters, as you could see, we don't have any human department.
We don't have a
legal department. We don't have a public relations department.
We don't have an investor relations department. We don't have those things, because they make life way more complicated and everybody gets a vested interest in going to conferences and calling another consultants, and it takes on a life of its own. Well, I would rather throw a viper down my shirt front. Than hire a compensation consultant.
Tell me which kind
of consultants you actually like, Charlie.
Oh, man. Waldorf and Staller, you know, from, the month at Sacks. They remind me of style or Waldorf. Well Larris.
Yeah. Well, you mentioned
Grumpy.
You mentioned this is a problem in capitalism. I think there's 2 kinds of Calacanis, broadly speaking. There's crony capitalism and there's risk capitalism. Risk Capitalism is the founder who starts with nothing but an idea along with the investors who are willing to write a check knowing that 9 times out of 10, it's gonna be a 0, but maybe in that 1 out of 10 chance, it's gonna be an outsized return. That is true risk Capitalism.
Everyone has skin in the game. They work together, entrepreneur, board members to try and create a great outcome. And they work out an arrangement where everyone benefits. It's a win win situation. Okay?
That is risk Capitalism That's the part of our economy that drives all the innovation, all of the progress, all of the job creation. Then you got crony Calacanis. You got these companies that have been around for a 100 years. The value was created by people long dead, and it is now managed by both directors and professional managers who work their way up through they go to, like, the right business schools and they join the right organizations Jason they donate the right politicians. And they somehow engineer a situation where they get in control, and then they pay themselves as much comp as they can possibly justify whether or not they create any value for the shareholder.
That's what we saw at GM. And that's crony capitalism. And, you know, while they're doing it, the president's son is probably gonna figure out a way to take a nice big chunk out of it too. Okay? Oh.
That's that's the system that we have.
Chanko with the grade. Here we go.
Now which of these two
systems receives the brunt of the criticism
by the mainstream media? Who is attacked? And who is celebrated. Okay?
Here we go. There's your rant.
It's a great point.
I've seen a zillion attacks on Elon Musk. I saw one article pointing out that all of Mary Barrett's transformation general motors was a failure, created no value for shareholders, and the whole thing was basically a fraud.
Well, how's the union doing and how did the union go?
And I'm frankly shocked that the Wall Street Journal even ran that article.
Yeah. Okay. Yeah. And how did the union do? And and who did the union get behind and vote for?
Yeah. Let's maybe double click on a couple items there. We'll see. At least I wanna go over one more thing where we're cooking with oil here. And, I just wanted to talk a little bit about IPOs possibly coming back.
§04Reddit reportedly targeting $5B valuation in potential March IPO
I just interviewed, Alexis O'Haney and the founder of Reddit which according to Bloomberg, they've been advised by potential IPO investors to target a $5,000,000,000 valuation. They're gonna go public possibly in March. Which is wild. That's only a couple of weeks away. In peak, ZERP, Reddit had raised that a $10,000,000,000 valuation.
That was back in 2021. They were valued in 15,000,000,000 in the secondary market. That's where people like previous employees, angel investors, etcetera, might trade their shares. And so if it goes out at 5, it's gonna be between a 50% to their tear cut. And it is trading at 4,500,000,000.
Shamal, we talked about this a bunch, the down run IPOs, Instacart, I think, being the best example. They got out, but they've been hovering at a really low number for a long time and people have been talking about them possibly being a takeout candidate by door or Amazon or Uber. So your thoughts on the the Reddit IPO news?
I think that if I had to price the IPO, I would be modeling 2 important levers in the business. The first is what is the actual attainable revenue from my audience. And so what is the ARPU of the average Reddit user. And you can model it as a distribution, and I think Facebook has the best data because they've been publishing it within their quarterly returns for a very long time now for over a decade, which is there is a distribution of value of a Facebook user economically. Right, at the upper end, you have the folks that are on Facebook proper in America in a certain age band in certain states that are probably like 30, 40, $50 ARPUs.
All the way down to in de in developing countries, those users are worth low single digit dollars economically. And I think that people will have to very much understand what is the average reddit user and what is the distribution of economic value they represent. That's the first thing. And I think that that's really the thing that will determine whether it's worth 5,000,000,000 or 10,000,000,000 or frankly 2,000,000,000. And then the second key lever, it will be the risk factors in the IPO because where the shareholder lawsuits will come from, which will really dictate if if the how the hedge fund community buys this thing is gonna be the potential for my ad ran against content that is deeply offensive to me, that whole construct.
And I think that they are going to have to very carefully ring fence that liability to get this IPO to be successful, but also for them to execute a scaled add revenue business. And not spending enough time on Reddit, I don't know how bad of a problem this is, I don't think it's 4 Chan or 8 Chan as an example, but I also don't think it's Facebook and Instagram. And so it's kind of somewhere in the middle. And I think that those risks So, really, what's gonna determine its terminal valuation?
Here now that they they have always been under monetized. $800,000,000 in revenue reportedly and 400,000,000 monthly active users. So 2 bucks a user compared to, you know, 2030, 48 for the prime users in, yeah, on Facebook's network. So it's totally underutilized. Part of it is it's a little bit of spicy content.
Part of it is that that's the number including all the international users. Of course, Sacks, there is this concept that credit has the greatest pool of data for large language models. And, you know, with something like say Quora, maybe YouTube amongst the great pools of data. So you think there's a play here with that? They have talked about they wanna get paid for licensing and that if you wanna use their data for your language money, you gotta get permission to Sacks.
Sure. I mean, that's gonna be an incremental revenue source for sure. It's hard to know exactly how valuable that is because we're still in the early innings, but, I mean, they can definitely do something with that data. Grock's whole competitive advantage is having exclusive access to Twitter's data, which is updated in real time, basically, by 100 of 1,000,000 for users. So Yeah.
Look, that data is is valuable. We don't know how much. I guess the numbers I saw were that they're doing about 800,000,000 of revenue growing about 20% a year. The $5,000,000,000 valuation seems, I think, pretty good. I mean, is it down from 10 at the peak in 2021?
Sure. But everything's down. Since that peak. I mean, that was definitely a bubble. I mean, I can tell you we we bought some shares as a late stage investment.
I think in 2018 at a $2,000,000,000 valuation, So, you know, a two and a half x in 5 years. I mean, it's not saying the world on fire, but it's not a bad outcome. Yeah. And, you know, the investment bankers will know how to price this to take it out and make it successful.
Yeah. And if it had a if it was a if it becomes a $1,000,000,000 in revenue and have a 20% profit margin, 200,000,000 You know, you can you can start doing your Sacks of the envelope math there for a 25 EBITDA, you know, 20 times price earnings ratio. So It it doesn't seem outrageous. It does seem like such valuable and under under monetized, asset. Do you think there's a, likely acquirer here if you were to think about somebody who might wanna own this.
Do you think it's a Microsoft for the data, Google for the data?
Yeah. I think there's probably people who'd like to own this, but the problem is that about 2 problems. One is they just can't get it through. We've talked about this before. The M and A window is even more closed than the IPO window, I would say.
Yeah.
And the other thing is just because of the Raunchy content, and all of the brand issues that come with that, it's not clear to me that, let's say a Microsoft would wanna own that headache. You know, they might not wanna be hold up in front of these congressional hearings that we talked about, these kangaroo courts where it's very easy to go on Reddit and pick out, well, what about this post? What about that post.
Why'd you
let that one through?
Why'd you let that one through? Well, because it's a it's a platform of user generated content where hundreds of millions of people post what billions of items, and you can have the best content moderation policy in the world. There's always gonna be edge cases that get through.
I think that reddit is the honeypot of edge cases. It is the place you go Perfect. When you're just so disaffected that you can just let loose anonymously. It's not.
I mean, at a certain point, you have to you have to realize So when people cherry pick those edge cases, what they're really saying is a platform like this shouldn't exist. Yeah. Right? Because there's no way to eliminate every single one.
Which is basically like saying, if you just take platform or you say conversation, you're saying this conversation shouldn't be allowed to exist.
And I was like want user generated content to exist. They don't want an what member within New York Times called unfettered conversations.
Unfeder conversations.
They
was controlled conversations.
Yeah. Yeah. Pretty dangerous. I I it just reminds me of, remember that Bob Eiger for, like, 10 seconds was actually considering Disney Pine Twitter Can you imagine if they actually bought it? What would have happened?
I mean, it would have been chaos.
Well, it would have been it would have been content moderation on steroids where
Yeah.
They would have massively empowered and scaled up content moderation even more. What Jack Dorsey's Twitter was doing because I think Jack actually he was unable to operationalize his principles, but he did have principles in favor of free speech to some degree. Whereas Disney, I don't even think has those principles. So and so they would've they would've censored everything.
Yeah. You know, it's paradoxically the most censored social media platform is TikTok. Like, I my TikTok is bulldogs and sandwiches like Guichamov and then Soprano's clips. And every time there's a Sopranos clip, when somebody gets whacked, they have to blur it out or they the person who's uploading, it takes that clip and and cuts out the actual person being whacked. It's crazy.
§05Drone attack, risks of greater Middle East conflict, failures of the military industrial complex
Alright. I gotta give Sacks his red meat. We're gonna now go to our war correspondent, David Sacks. But in all seriousness tragically, we had a terrorist attack and the response from Some of our Republican senators was absolutely insane. They wanna bomb Tehran and go after Iran and start World War 3.
Sacks, I know you have some strong feelings on this and you're always about diplomacy and pursuing peace. What's your reaction to Lindsey Graham? And the neo cons.
Well, you had several Republican senators try to go Biden into striking Iran immediately. It was, you know, not just Lindsey Graham. It was in favor of every war, but it was Mitch McConnell. It was the senate Republican leader. John Cornan, and there are some other ones who are, you know, demanding immediate retaliatory strikes.
It's very unfortunate that we had 3 of our troops get killed. Another dozen or so get injured. This was at a a base on the border between Syria and Jordan. Some of us have been saying that we have no business being in Syria. I mean, I tweeted 10 months ago that all we were doing was putting our troops in harm's way and risking getting drawn into a larger conflagration.
And that's exactly where we are right now. I mean, you had to know, and many commentators pointed out that these bases are very exposed. They're very vulnerable. They don't have good enough air defense against. They don't really have a good answer to the swarms of drones that these local militias have.
And, based on the intelligence we have right now, our, this base is tower 22 is attacked by an Iraqi militia. That's operating the there. Why David they get attacked? Well, these militias want the United States out of their countries. They want them out of Iraq the government of Iraq has said we want the US out of Iraq.
The government of Syria says we want you out of Syria. We are there without a congressional authorization. For military force? I mean, what are we doing in Syria? We're just occupying that country without, again, without a war being ever declared against the Assad regime.
So some of us have been saying we need to get out there for some time. And if we don't, it's inevitable that something gonna happen. And sure enough, it did. And when it does happen, you get this lunatic fringe, unfortunately, or some of the leaders of the Republican party calling for a larger war against Iran. And I think Biden to his credit is so far held Sacks, and he has not A lot of restraint.
A lot of restraint.
Has shown some restraint. However, they've been actually talking about this and all the reports are they're gaming this out, and there is gonna be some sort of retaliatory strike. It might be focused on these militias in Syria and Iraq. It could be attacking Iranian assets. We don't know.
If they do attack Iranian assets, Iran has promised a response. So I think the Biden presences are a little bit of a crossroads here. Depending on the action they choose, we could very rapidly find ourselves engaged in a wider regional war on 5 different fronts. I mean, a war with Iran would involve us in Iran, Iraq, Syria, Lebanon, and Yemen where we're already bombing. So this could turn into a huge Conflagration in the Middle East.
Yeah. I don't think mine should be drawn into this.
Yeah. No big answers here. And and, yeah, the the the craziness to meet you, Jonathan, is, like, These people wanna go bomb to run because you have, you know, some militias doing these activities. I mean, this, like, would be you know, some terrorist, who's French, and we're gonna just blow up Paris and and a bunch of civilians are gonna die. It's there's no proportionality here, and there's and there's there's no direct relationship here.
It's like 2 or 3 steps removed. What do you have thoughts from us?
I think the thing that we've lost in this whole issue is How is it possible that a multi decabillion dollar drone system was designed by the industrial complex in a way where when one of our drones is coming back and there's an inbound drone, that doesn't seem like a weird edge case where we couldn't handle it. Because at the at the root cause of what happened was a pretty faulty way in which we were dealing with Confusion about what was our drone and what was the enemy drone. And I think that that's also worth talking about before we talk about bombing another country is We're the most sophisticated technological country in the world. Our weapon systems are the most sophisticated weapon systems in the world. Am I supposed to believe that if Palmer Lucky and Andrew were building the system that this is what would have happened?
Absolutely not. No.
That there's no beaconing system on these drones that you could turn on remotely that there's no way when you see the number of drones in an air that are yours so that you can quickly triangulate which ones are not yours. And all of this to me, I think is also worth exploring because if it's really, again, faulty engineering because of this monopoly oligopoly in certain sectors of our economy, that then cause us to go and make a foreign relations decision about going to war. And we don't even talk about this thing as a root cause. It's worth talking about. A different example on the same vein of this is like it turned out that in that Alaska Airlines issue, they actually shipped the plane without the door plugs.
Oops. We are the most sophisticated country in the world, guys. Our our most sophisticated industries are not showing their best in this moment. And I think that this is yet another example of before we make totally separate decisions about war and implicating our children's safety, we can also just ask, wait, we spent 1,000,000,000 of dollars on this thing. How is it possible that this that this like, honestly, like, this is exception handling.
This is like CS101 type stuff, guys. Well, the the put the plugs in the door.
And it's it's regulatory captures the answer.
This is crazy.
There's no competition, and they're they're charging cost plus. They're not innovating anymore, and they need competition, right, just like SpaceX was massive competition for all of the governmental agencies around. We have
to explain stress. Remi execution in our industrial complex. And now the way to answer that turns out to be a foreign policy decision to go to war. And I think that those two things need to be decoupled a second so that we can deescalate and say, hold on a second. This thing happened, but why did it happen?
Meaning, of course, people are gonna attack us. We are the bright shining beacon on a hill. People should hate us in want to attack us. That's just the nature of being a winner.
To be fair, they're not attacking us. Because we're the shining city on a hill over here, just minding our own business, they're attacking us because we're
No.
I know that people are in Iraq. But, yes, you're saying the minute that we share
that. Yes.
We should expect that these things work.
We should expect it. So there's a few things happening here with our military industrial complex. So the first one is that drones have been a huge game changer. We've seen this in the Ukraine war. The one really new technological element has been drones has completely changed the face of war.
And one of the things it does, it's a huge leveller because these cheap drones give these militias in Syria and Iraq or it gives the Houthis and Yemen a capability to strike at us that they didn't have before. And we saw that our air defenses are just not really cut out to deal with this. There was that article describing how it was costing us $2,000,000 to use an air defense missile to shoot down the drone or a cheap rocket that costs just a few $1000. So you have this asymmetric warfare now where we simply cannot afford over sustained period to shoot down all these drones.
Wait. Sorry. Can I ask you a question?
Yep.
Our most important partner in that region is Israel. Israel has what we have thought to up until now, an impregnable system, right, the iron dome, and which is meant to deal with all of these edge cases, right? Projectiles of all sorts, shapes, and sizes coming in every direction. Yeah. I've never heard of when the iron dome has failed.
And we are sending Israel 1,000,000,000 of dollars. Why couldn't we actually just buy the iron dome system for them and say, you know what? We're gonna secure our Jason in Syria And in all of these other places, yeah.
Well, I'll tell you. So there's a a military analyst named Steven Brian, who I follow, is a former under secretary of defense, and he talked about this. He has been calling now for before this attack happened to send 2 iron zones systems to Syria to Iraq to basically the Middle East to protect our
troops. Sense.
He says he said in his article that the reason why the US army hasn't done that is because They didn't wanna buy the Israeli system. They've been favoring some homegrown system that has improved morale.
So
there's a there's a big problem there that we should be deploying Iron Dome there. Look, I would just get out of that area. I don't think we should be there, but at a minimum, if we are gonna stay there, we have to protect our troops. So, yes, we should be deploying Iron Dome. But the problem is that, again, just these drones are a game changer, and they can overwhelm a system, even Iron Dome, can be overwhelmed.
If, Israel gets an award with Hezbollah, which supposedly has,
like one drone. It's n equals 1. We were overwhelmed by n equals 1.
Well, I mean, they got
the same. I'm saying, like, it's true. Right? We were overwhelmed when n equals 1.
There was a report to see other day that one of our ships in the, Red Sea it was fired on by a a missile from Yemen. And it made it through the aegis system, and they they took it down with their last line defense. These close in guns. That was kind of scary because the Houthis have missiles that are capable of making it through our main air defense system for ships. So I'm just saying, like, these what's happening with these cheaper rockets and these drones is it's giving our opponents capabilities that level the playing field a little
But this is what I'm saying. I understand that concept, but I also understand that we have people on the ground that work for team America. Again, I'll just, I'll take Palmer Lucky as the example. Who frankly, I would bet on a thousand times over a Houthi rebel, heal outsmart and out power these guys. Why aren't our best and brightest people in a position to make these things?
Well, because you're you're right. The defense industry is dominated by 5 of these prime defense contractors who work on cost plus are basically an oligopoly. They're not particularly innovative, but they just keep charging more every year for the same product. So we're getting less for more money.
And they're led by a leadership who are motivated in a way where the returns that they generate and the success and the progress they make is not really coupled to progress, right? It's not really coupled to building an even better version of Iron Dome. It's about, as you said, having a job that you've earned over many years of fealty and then getting paid an enormous amount of money to just keep it going in the same direction, even if that direction means you've been a drift for decades. That's the shame of it. And then you're seeing every day.
Like, isn't it incredible?
And Lindsey Graham is saying hit Iran, and I bet you, Lindsey Graham, is to getting donations from those five companies.
I don't I don't know.
But
Look, there's no question that we need to shake up the military industrial complex. We need to get a lot more startups in there. There's a lot of VCs now who are funding defense startups. So it is a big area.
Take time.
Andrew obviously is kind of the leader of the pack, but there's a bunch of others getting funded I saw that Eric Schmidt even created a drone company. So I this is gonna be a huge area of innovation, and I think that because of the Ukraine war, the Pentagon must now realize the urgency of being able to mass produce effective drones as well as create effective drone air defense.
Measures. Yeah. Counter measures.
Yeah.
Just to give you a sense of this, like, we led the series A in a company called cell drone about 7 years ago. And they make drones for the seas, right? And what we did was we put these massive sensor arrays in these drones. And because of because of the sensors, it has perfect visibility into what's going on. In any condition of whether, right, day night, it doesn't matter.
And so these drones in the Middle East all over the waterways allows us to have perfect understanding of what's going on. But despite that, it has taken years for us to be in a position to generate enough revenue. And now we're finally at that scale with the navy and and whatnot. But, David, to your point, it is incredibly hard for startups no matter how innovative we've been to break through this logjam. And it's and the reason is because what we are good at is not what's rewarded.
We are good at engineering and execution, but what is rewarded to your point is this very lobbying specific form of relationship management right? And cultivating certain pockets of influence, it's a very difficult game to play if what we come as bright eyed bushy tailed from California with a product that we think is superior that actually helps advance American exceptionalism it still doesn't always land. It takes a lot longer than it needs to, in some cases.
Yeah. I mean, so the Pentagon and the military industrial complex, there's gonna be a lot more permeable to this type of innovation. I I think that they're gonna be incentivized to do it now because they have to see what's happening in Ukraine, what's happening in the Middle East, and they realize that the gap is closed.
And we have 3 innocent people that were killed. These people didn't deserve to die. They didn't deserve to die in an end of 1. It's not an edge Jason of one. There was a drone.
Come on, guys. We're better than that.
And so what do you think is gonna happen if we get an award, Iran? Every single one of our bases in Syria and Iraq, and we have a lot are gonna be sitting ducks.
To your point, you're forecasting your your orchestrating a game plan for them because it's like, if you if you were going to enter war, does it take a brilliant strategist to sit in a room and say, wait a minute. If they can't defend against 1,
what happens when we send 12?
What happens when we send 12 to every single place? And and to your point, Jason. It's this is like the unnecessary escalation that then happens because then we have to respond with more force and with more kinetic energy.
It it was a certainty. Look, we I've been talking on the show about how our bases in Syria and Iraq have been under attack by these militias for months think the last time we talked about it, there had been something like idiot Sacks, and it was just a matter of time before Americans servicemen were were killed, unfortunately. And so like you said, Jamal, this was predictable. What's also predictable is that if we get a war with Iran, every single one of our bases will be attacked. If we strike on their soil.
They will strike Sacks, and they have hypersonic missiles. They have precision missiles. They can destroy every one of these bases unless those bases have the top of the line air defense, which most of them don't. But if you go to someone like Lindsey Graham and say, Jason, Our troops are vulnerable. We need to basically either pull out of Syria and Iraq or we need to consolidate down to a few bases that have Iron Dome or the best systems.
These neo cons will say absolutely not. We're not conceding anything.
So they would they would never pick up a gun. They never were uniform. Right. But they want
us to strike Iran So these these strategies don't line up. If you wanted to attack Iran, the first thing you would do is basically get all of our troops out of harms way who are currently sitting ducks for Iranian retaliation. By the way, I think it'd be a terrible idea, but that's what you would do. So they have these strategies that don't make any sense.
Alright. Everybody has been an amazing show for the dictator chairman himself, Shamoff, Polyhapatiya, the rainman, yeah, David Sacks, I am the world's greatest moderator. We missed you, Sultan of Science. David Friedberg couldn't make the show. And, we'll see.
He's still in the if anybody gets into the Apple Pro Vision VisionPro, and is somewhere out in the universe by, Uranus, and you see him bring him back for next week. So I'm gonna go find him. Gotta send out a search party to Uranus.
Love you, boys.
Bye bye. Bye bye. Your winter's ride. Rainman, David Sacks. And it
said we open sits to the fans and they've just gone crazy with it.
Uh-huh.
I'm
have one big huge, George, because they're all just useless. It's like this, like, sexual tension that they just need to release somehow.
Let's hear a fee.
We need to get Mercies are back.