PivotScott Galloway on SpaceX IPO: "The Game Is Rigged" | Pivot
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60 min read · 11,775 words- 0:00 – 0:13
Intro
- SGScott Galloway
No one says at a funeral, "You know, this guy didn't participate in the SpaceX IPO 'cause he had real integrity."
- KSKara Swisher
[upbeat music] As we tape on Thursday, SpaceX is less than 24
- 0:13 – 14:19
SpaceX IPO
- KSKara Swisher
hours out from its stock market debut, and we've got a special guest here to help us break it down. Let's bring in Stephanie Ruhle, anchor of the new MS NOW show, Money, Power, Politics, at 9:00 AM. Welcome, Stephanie.
- SRStephanie Ruhle
Thank you so much for having me.
- KSKara Swisher
Good. Well, well first, um, we're gonna talk about the SpaceX IPO. The company has set its price at $135 a share, valuing the company at 1.77 trillion. SpaceX IPO will likely make Elon Musk the first trillionaire in the world ever, and make over 4,000 current and former SpaceX employees millionaires. Uh, but if all of the IPO-ing isn't enough to keep Elon Musk busy, he's taken to X to involve himself in an- very terrible anti-immigration riots in Northern Ireland, saying, "Only by protesting repeatedly and loudly would there be any change." He's supporting a lot of really hor- heinous people. There, in response to criticism about his support, M- Musk posted, "Murderous migrants beheading innocent people in their hometown is what's making people angry, not social media." So he's m- he's making like terrible trouble acro- And, and the, uh, the, the, uh, the British government is, uh, is, has responded quite a bit to his involvement. Uh, he's been meddling over there for quite a while now. So first let's talk about the IPO. Scott has, has had really great analysis of it, and a lot of people, like Aswath at NYU and others, are like, "This is r- this price is ridiculous," and at the same time it'll probably p- jump up and then jump down essentially. So let, give us your headline.
- SRStephanie Ruhle
People who are in, who are buy- who are investing, people who are participating in the IPO, they're not buying SpaceX. You're betting on Elon Musk. You are buying Elon Musk. The amount of control he has over this company is unprecedented, and I'm not saying people should or they shouldn't, but that's who they're betting on. And it's extraordinary to me because even think about what you just mentioned with where he's taken to X and with regard to the protests in Ireland. We haven't heard one word from the underwriters of like, "Are we okay with this?" Do you remember, it was five or six years ago when, it's sort of like at the height of Me Too, when Goldman had the big proclamation of like, "We're only gonna be doing deals with, you know, with companies that are, have a commitment to diversity," and, you know, that's the most... And I'm like, wh- where, like, do we not have one shred of a moral compass here?
- KSKara Swisher
No.
- SRStephanie Ruhle
And the answer is that we don't.
- KSKara Swisher
Mm-hmm.
- SRStephanie Ruhle
No one is mentioning this, and, and-
- KSKara Swisher
Or bringing them together
- SRStephanie Ruhle
... when you think about how wealthy he's about to become, and I'm not insulting it or complimenting it, I'm just saying I just want people to realize, this is a person who directly impacts what's happening in a war by pulling Starlink. This is a person who wants to control information, so he buys a social media platform. This is a person who realized through Donald Trump, he can invest in candidates, and by investing in candidates, get whatever he wants. Like, the reason I think we're now going t- we are seeing an unprecedented amount of money, uh, going into these elections is because Elon Musk and Donald Trump prove that it works, right? You're not just getting a little bit of influence. One-fifth of SpaceX's revenue, it says it right in the prospectus, comes from government contracts. And so you, we could all say, this is hinky, this isn't how capitalism works, this isn't how democracy should work or free markets, but for the investment community is saying, uh, in my opinion, "If you can't beat them, join them. I'm here for the, I'm here for the money."
- KSKara Swisher
Here for the dough. Scott?
- SGScott Galloway
I like Stephanie's take that it's the boring stuff that moves the needle.
- KSKara Swisher
Sorry, what'd you say? I couldn't hear you. [laughs]
- SGScott Galloway
[laughs] I like Ste- I like my good friend Stephanie's take. And by the way, slip into my DMs if you ever decide that, uh, you know, you've had it.
- KSKara Swisher
Oh my God.
- SGScott Galloway
You've just, you've just had it. You know how to reach me.
- KSKara Swisher
Okay.
- SGScott Galloway
You know how to reach me. Um-
- KSKara Swisher
Gross. [laughs] Gross.
- SGScott Galloway
Anyway, sorry. Um-
- KSKara Swisher
Gross, exactly
- SGScott Galloway
... where are we? [laughs]
- KSKara Swisher
Yes. She's wretching.
- SRStephanie Ruhle
Slide into my DMs.
- KSKara Swisher
She's retching.
- SGScott Galloway
Slide into my DMs. Uh, look, the-
- KSKara Swisher
By the way, she'd slide into my DMs faster than she'd slide into your DMs.
- SRStephanie Ruhle
That is correct. That is 100% correct.
- KSKara Swisher
Thank you.
- SGScott Galloway
I think that's true.
- 14:19 – 15:58
OpenAI Files for IPO
- KSKara Swisher
The company has not yet decided on timing, saying in a statement, "It may be a while because there are things we wanna do that are likely easier for a private company." I don't know what that is. Like, what, orgies? I don't know.
- SRStephanie Ruhle
[laughs]
- KSKara Swisher
OpenAI has last [laughs] was last-
- SRStephanie Ruhle
No, no
- KSKara Swisher
No, I'm teasing
- SRStephanie Ruhle
... in their defense-
- KSKara Swisher
Yeah
- SRStephanie Ruhle
... there's a lot you have to do-
- KSKara Swisher
Yeah
- SRStephanie Ruhle
... explain-
- KSKara Swisher
Yeah
- SRStephanie Ruhle
... account for-
- KSKara Swisher
Yeah
- SRStephanie Ruhle
... when you go public.
- KSKara Swisher
I'm not, I'm just teasing.
- SRStephanie Ruhle
It's not easy.
- KSKara Swisher
Um, OpenAI was last valued at $852 billion. The filing comes shortly after rival Anthropic's. Uh, which of the three are you betting on, and how worried are you about the concentration of so much market value in just a few companies? Does the, does it make the entire... Scott has been talking about how the entire market is fragile.
- SRStephanie Ruhle
The entire market is fragile, and I think the name of the game for all of them, honestly, is to be, you don't wanna be the last one to IPO, right? There is this huge appetite for AI. Everybody's so excited, but there's so much, and there's potentially so much overdevelopment. I think you just don't want to, of all of them, you just don't want to be the last one you've, when you've exhausted the market.
- KSKara Swisher
And it's already exhausted. Okay, Scott-
- SRStephanie Ruhle
Yes
- KSKara Swisher
... anything really briefly?
- SGScott Galloway
No one is rooting for this IPO more than, uh, Elon Musk, other than Sam Altman. This sets the tone for the next couple IPOs. If this comes out really strong, these guys are gonna be able to come out and say, "Look at our numbers versus SpaceX," and you are willing to buy in at 100 times. Uh, OpenAI and Anthropic are gonna look like value stocks compared to SpaceX if SpaceX holds up.
- KSKara Swisher
Yeah. Yeah, if it holds up, if there's enough money.
- SRStephanie Ruhle
And in the case of OpenAI and Anthropic, especially as it relates to a retail investor, those are companies that people actually could say they know-
- KSKara Swisher
It is
- SRStephanie Ruhle
... and they see more-
- SGScott Galloway
They know it 100%
- SRStephanie Ruhle
... than they do SpaceX.
- SGScott Galloway
Yeah.
- KSKara Swisher
That's a good point. All right, one last
- 15:58 – 27:40
Inflation Rising
- KSKara Swisher
thing. Inflation was up 4.2% annually in May, the highest in three years. Much of the surge came from the increase in oil prices, obviously, which have risen 35% in the months since US and Israel attacked Iran. But fear not, President Trump is feeling optimistic about the situation.
- SRStephanie Ruhle
He likes it. [laughs]
- KSKara Swisher
Let's listen to a clip. Are you concerned, Mr. President, about the latest inflation number, which came out this morning? Could that be a headache- No, I love it ... for Republicans- The numbers were great ... who are trying to hold the White House, uh- You know what I really love? I love the inflation number. Okay.
- SGScott Galloway
[laughs]
- KSKara Swisher
How, [laughs] how much does he love inflation? Both of you. First to, first to you, Stephanie. How much would it rise before he started to not love it so much?
- SRStephanie Ruhle
Well, two things. Like, a- as somebody who spent his life deeply in debt, I guess he could say, "Yes, it, inflation works for me." If you put it in full context or when he tried to do a cleanup later, he's basically saying, "Inflation's not bad. Think about where it could have been," right? People thought oil was gonna be $200 a barrel. But the fact of the matter is, a- and he said just this week, like, "Listen, uh, gas prices were really high when Biden was in office," which was the case when Russia first in- invaded Ukraine. But guess what? Those high prices and inflation, I would say, were the fundamental reasons why Joe Biden and subsequently Kamala Harris didn't win the election. Jo- Donald Trump promised to lower prices day one. He obviously hasn't done that. I think when he talks about affordability being nonsense or an old-fashioned term, I think he's telling the truth. Because he is in a gilded cage surrounded by people who have made, who are already super wealthy, and they've made more money in the last two years than is even conceivable. But where it's politically devastating, and not necessarily for him, because he doesn't need to be president again, but for every Republican running, that soundbite of the president saying-
- KSKara Swisher
It's bad, and that's what they'll use
- SRStephanie Ruhle
... "In- uh, inflation's great," that hurts. You and I both have mothers that voted for Donald Trump, and I assure you, she, my mother does not think inflation is great, and she could tell you the price of London broil and the price of gas today.
- KSKara Swisher
Like you said, London broil.
- SRStephanie Ruhle
This will hurt Republicans.
- KSKara Swisher
Yeah.
- SRStephanie Ruhle
I say London broil 'cause, like, that's-
- KSKara Swisher
I know. That's an old term
- SRStephanie Ruhle
... that's, that's the country boys.
- KSKara Swisher
London, would you like some London broil? Scott, really briefly.
- SGScott Galloway
Well, [sighs] people don't, 4.2% doesn't sound like a lot. But w- what you need to, what you need to do is quick math for people, uh, in terms of compounding, and that is at 4.2%, if that holds, that means the tuition to go to NYU at $62,000, if you have a baby today, when the baby's, when the kid is ready for college, tuition is now $125,000. Or bring it back just five years. It's easier for people to wrap their heads around. That means a car that costs $50,000 is gonna cost, um, 64, uh, $61,000. It's not 4.2, it's 4.2 compounding, and the other thing about this inflation print that's so bad is for the first time in several years, uh, inflation is now greater than wages, meaning the quality of everyone's life, their prosperity, is diminished.
- SRStephanie Ruhle
But not for Trump and the people who are around Trump, and he's happy as a clam in that bubble. I think if it wasn't for the war in Iran, he would be on cloud nine.
- SGScott Galloway
And also, it, it just bears mentioning that For the three of us, it really doesn't matter 'cause we own stocks, we own assets. We're, we're hedged against inflation 'cause our house goes up 4.2%, our stocks go up 4.2% 'cause Apple will raise its prices. Who this hurts are earners that don't have assets yet. So, a- and, and let's be clear, revolutions don't start because people are unemployed. They start because people are working two jobs and are still hungry. And this is yet again is another, it's another... There are still-- Argentina's had 120% of inflation. There's a class of people there that have always stayed wealthy 'cause they own land. So the landowners and the stock owners, traditionally older people in the United States, are just fine. Inflation is yet again another transfer of wealth from non-asset owners, who are earners, to the asset owners.
- SRStephanie Ruhle
Kara, when, let me just say, when people say, when wealthy people say they're panic-stricken over Zora Mamdani, uh, coming for capitalism and, and, and the, and, and leading the eat the rich sentiment, he's not leading the eat the rich sentiment. Donald Trump saying, "I like inflation" is fueling the eat the rich-
- KSKara Swisher
That is correct
- SRStephanie Ruhle
... eat the rich sentiment. Not the mayor of New York.
- KSKara Swisher
And, and the, and the, and the tech bros saying all manner of nonsense every day of the week and twice on Sunday is the same thing. It's anger, it's anger inducing, and that's where you feel it, I think. Um, okay, prediction on which of the IPOs coming or is the stock market about to take a deep fall as many people think? So which of the, of all the IPOs, which one would you buy into? And are you worried about the stock market?
- SRStephanie Ruhle
Listen, I've been saying I've been worried about the stock market for quite some time, and if you talk to, and I'll be quick, and if you talk to CEOs that are not The Magnificent Seven or that run companies that are impacted by tariffs or mass deportation, those companies are not booming. They are struggling. They can't walk into the White House and offer Donald Trump a plane or God only knows what.
- KSKara Swisher
Golden statue.
- SRStephanie Ruhle
They're, it's not so easy for them. So I think under the hood, things aren't great for lots of companies, but honestly, I ca- I'm not betting against the stock market because the only way it's been going is up, and the current appetite for AI, to me, it might be fragile, but it's big.
- KSKara Swisher
It's big. All right. Which one would you buy? It's on a plate in front of you.
- SRStephanie Ruhle
If I was hanging my morals out the window, I'd buy all of them.
- KSKara Swisher
Oh, okay. All right, then. There you go. All right. Thank you, Stephanie. And everyone be sure to watch her new MS NOW show. I'm gonna yell it. Money, Power, Politics, weekdays at 9:00 AM. She's gonna be getting up early to give us the, the lowdown on everything, the, the, the hot takes. T- tell us what, what this s- move is about very briefly. What is the situation with MPP?
- SRStephanie Ruhle
Uh, I think we need a great big, uh, uh, morning show. I think that especially, obviously we cover politics, we cover current events, but the economy is the number one thing that people vote on. Tomorrow, as we talk about the SpaceX IPO, we're gonna have a newly minted trillionaire. We are 16 years out from Citizens United and have more money going into politics than ever, and not just politics 'cause, hey, I like this candidate. Politics because it's directly impacting policy, not to mention the gargantuan grift and corruption under our nose right now. I couldn't cover all that in one hour. I thought it was important that we covered it in, and we covered it in the morning, uh, for two hours and in a way that we're sort of setting the tone for what we cover here, because it's not just about following Trump and the crazy thing he's saying today. We're fundamentally changing potentially the way our economy works, the way capitalism works, and I think we need to cover it i- in a comprehensive way. And you guys know this as well as I do. The way that business news has traditionally been covered, it's business news covered for an audience that, that invest in the markets. And when CEOs go on TV, they're not necessarily giving their worldview. They're talking about specific information about their companies that's gonna impact their earnings report-
- KSKara Swisher
No, they wanna-
- 27:40 – 36:25
WH Epstein Freakout
- KSKara Swisher
Trump administration cannot escape the Epstein files, nor should they be able to-
- SGScott Galloway
Right
- KSKara Swisher
... no matter how hard they try. And we're now getting more details about the internal panic about Epstein over the last year. Maggie Haberman and Jonathan Swan shared an excerpt from their upcoming book, "Regime Change," with The New York Times. Here are some high-- Both are New York Times writers, by the way. So here are some highlights. The Situation Room became an Epstein war room where strategy meetings took place. J.D. Vance suggested having Tucker Carlson interview Ghislaine Maxwell in prison. There was talk of then-Deputy, uh, AG Todd Blanche going on Joe Rogan, but Vance wanted to go on instead of Blanche. Don-Dan Bongino warned, um, there would be, uh, President-- this would be President Trump's Iran-Contra. There was talk of nipples and President Trump's disrespect for nipples in the room. And as funny as that sounds, it was pretty grotesque of his, uh, his, his abuse of a young woman. Um, but this is what they're, this is what the v- this entire leadership is talking about, is whether, and, and whether he'll be able to handle the nipple stuff getting out. Um, it's not just the White House and has nothing to do with nipples here. Bill Gates was on Capitol Hill this week testifying behind closed doors about his connection to Epstein. Gates said Epstein tried to use information about his extramarital affairs as leverage after the two had cut ties. Well, obviously he did. He's an evil villain. Uh, he also acknowledged that meeting with Epstein was a grave error in judgment, which he said before, and put his philanthropy work at risk, and it certainly did, including his own reputation. Um, talk a little bit about what-- Did anything surprise you about how the White House dealt with the Epstein stuff? They sound like fucking amateurs. Every time I was reading it, I was like, "What a bunch of amateurs." Big fights between Bongino and Patel and Bondi and Susie Wiles just sitting over it like a demented mother who doesn't know how to control idiot children. Um, will this be a major issue in, in, in terms... And I will say, as you know, I was very much in early on saying, "This is a real problem." Reuters is out with a new poll. Seventy-five percent of people think the government is hiding information on Epstein's clients, and a lot of it is falling, as much as Trump has tried to push it off onto other people, on the president himself. Thoughts?
- SGScott Galloway
So I think we agree that it should be an issue. I don't think it will be. Um, there's recent data showing, there's these March focus groups ranked Epstein sixth amongst voter concerns ahead, you know. It, it-- So it's well in the back of the bus here. Um, I think it is, it... Again, I, I, unfortunately, I just don't think it's that big an issue. I think, I think, uh, the American public is so numb to this kind of stuff, especially in the Trump administration. What I th- What I actually found more interesting was the whole Gates testimony. So when you call someone to come testify in front of a special committee-
- KSKara Swisher
Yep
- SGScott Galloway
... or whoever he testified, you have some say in it. They made-- They got it behind closed doors, and they got it during the NBA Finals, during Iran, during the SpaceX IPO. This is the bi- this is what you do. You know this business better than I do.
- KSKara Swisher
Mm-hmm. That's what you do.
- SGScott Galloway
When you have shitty news-
- KSKara Swisher
Yeah
- SGScott Galloway
... you bury it on a big news day, right?
- KSKara Swisher
Yep.
- SGScott Galloway
Behind closed doors during a very, very heavy business news week. This story's gonna come and go.
- KSKara Swisher
Well, I still think it's a... I, I'm gonna disagree with you because I think I was actually completely accurate at the beginning of the Epstein thing, that it's a big deal. I think among the base of people, it remains an illuminating and, and, and a thing that gets them going. I don't think it goes away. And what was interesting was Dan Bongino, during this whole thing, kept saying that to the Trump people, that this is not a... They kept minimizing it, saying, "It's not a big deal. It's not a big deal." It was a big fucking deal. And this is something I knew from reading all these QAnon boards. I-- This is, this is at the center. I think it's still at the center. I think it creates a, an atmosphere among people like Rogan and others of these fucking liars. And I, to me-
- SGScott Galloway
I think Iran's a bigger deal for them than Epstein.
- KSKara Swisher
It is now.
- SGScott Galloway
Yeah.
- KSKara Swisher
But I'm saying it does... This is like one more, you know, another brick in the wall-
- SGScott Galloway
Mm-hmm
- KSKara Swisher
... like that kind of thing. And so I think Epstein remains a bearing wall of this presidency, and w- he cannot get away from it. And when you... I, I get the nipple thing and everything else. And as much as I think he's kind of like an oaf, Dan Bongino had it right. And so, by the way, did Vance, although Wiles was sort of accusing him of being a conspiracy theorist. But I think Vance had his finger on the pulse of bringing it out, like, as much as possible, even if it hurt the president, um, slightly because the, the m- transparency was more important than what's in it. Um, unless, of course, there's very clear and incontrovertible evidence that he slept with a, with a underage girl, which may still not Proven. Um, i- it's, there's been a lot of allegations of it, certainly. Um, so I think it's still there. I think it sits there like mold. It just sits there, and it sits in the minds of a lot of people, like Massey, and even though he's zeroed them, he has not zeroed them, I don't think by any means, and I think Vance knows it, and Bongino certainly knows it. With Gates, look, it is... You're right. He, this was a good time to ha- do his, and he kept going, "I'm here voluntarily." Did you see that? Which was kind of interesting. Um, I think this has hurt his reputation-
- SGScott Galloway
Oh, yeah, no doubt
- KSKara Swisher
... for th- for a long, long, long time.
- SGScott Galloway
No doubt.
- KSKara Swisher
I think he is... This is, he is gonna suffer. This is gonna... He has done some amazing works. I think his wife is looking fan- his ex-wife is looking fantastic with all these different financial things she's putting out and handling her image quite well throughout this whole thing. Um, but I think he is permanently tarnished, and I'm not sure how any conversation he has going forward does not include this topic. So I think he has done enormous damage to himself by affiliating himself with Epstein, and, um, and it was a grave error in judgment, and it did put his philanthropy at work. So that's, I think it's there. I think it's still there.
- SGScott Galloway
Yeah, hard argument.
- KSKara Swisher
Anyway. All right. Uh, let's go on a quick break. When we come back, Paramount lashes out against Netflix. [upbeat music]
- SGScott Galloway
This is advertiser content from Harvey AI. We have a choice over who we work with and who we don't, specifically who we allow to advertise and who we don't. And for those of you who watch my content, I am not an AI catastrophist, and I'm an AI optimist, and I think it's gonna create more jobs than it destroys. And I think our job as professionals is to figure out how to leverage these, these tools. AI, uh, more than almost anything I do in terms of what I could point to for real economic leverage and savings, is 100% in the legal field. Harvey is the AI designed specifically for legal work, trusted by leading law firms and enterprise legal teams. All right, so now I'm looking at their demo. It plugs into tools that lawyers already work with, LexisNexis, Microsoft. And this is a key, and I do this internally with my LLMs. With permissions, it lets you look at the firm's own files and databases. So here it's answering a question, reads the complaint, pulls the relevant terms, checks the web, weighs the evidence, and drafts a response, but it also can do this in a shared workspace between the firm and the client, so they both have visibility into the work being done and can both add value to it. I, I think this space is clearly sort of hand in glove for AI, right? So there's no doubt about it. This, I think, is, uh, is gonna be super helpful, not only for law firms themselves, but internally for general counsels at companies. Harvey is AI tailored for law. You can learn more at harvey.ai. [upbeat music]
- KSKara Swisher
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- 36:25 – 42:01
Paramount/WB Deal Hurdles
- KSKara Swisher
their claims absurd. Um, it's not the only thing Paramount is doing to get the deal across the finish line. The company reportedly submitted a list of concessions to head off antitrust lawsuit by California and several other states. That'll include New York and possibly Massachusetts, I'm hearing. Um, uh, uh, I, recently, actually, I've gotten notes from people in Hollywood saying this thing's a little shakier than it looks. I'm, I'm not so sure about that, but I'm surprised I'm getting them. The EU is also currently reviewing the merger in light of backing of those, um, in light of the backing of those middle, uh, Middle Eastern wealth funds. Um, thoughts anywhere?
- SGScott Galloway
Of, of all the media CEOs, the one I know best, which isn't very well, is Ted Sarandos, and any campaign to try and undermine, to undermine this would have to have Ted's blessing, and this just isn't Ted's style. He, he's not-
- KSKara Swisher
He's just gonna wait and buy it when they fuck it up with their $80 billion-
- SGScott Galloway
I, I, and I don't see-
- KSKara Swisher
... debt
- SGScott Galloway
... I, I don't see any exterior lobbying of people who are clearly in, you know, Netflix's back pocket. I don't see a bunch of Democratic senators getting all jonesed up about this. So I just, it doesn't, it doesn't ring true for me. What does ring true is that some blue state AGs are starting to look into it and may file their own-
- KSKara Swisher
Oh, they are.
- SGScott Galloway
Yeah.
- KSKara Swisher
I've met with them. [laughs] I'm telling you.
- SGScott Galloway
Yeah. And-
- KSKara Swisher
They absolutely are
- SGScott Galloway
... and may file, may file suit, but I don't see... It just, when I read that, it doesn't... W- what, what I do, what I know about Ted, he's, Ted is kind of, you know, when Ted retires, he's, he, he'll probably be like a diplomat because he's just not the kind of person to shit post or go on the offensive against people.
- KSKara Swisher
I think they're trash talking it behind the scenes. Like, because of the obvious situation, this has enormous amounts of debt on it.
- SGScott Galloway
But, but I in- I interviewed him on stage in LA, and I gave him a, a, you know, an opening. I said, "Isn't the creative community gonna scream out in horror when this When this acquisition closes and because of the AI and, you know, get trying to find efficiencies for overpaying, I gave him... I set him up to, and he just, he immediately pivoted to something else and said he hopes they do well. I, I just don't-- He's just not that a- he's not of that ilk.
- KSKara Swisher
No. No, I think they're shooting themselves in their own feet, and they wanna blame other people. They're, they-- This has been really-
- SGScott Galloway
That sounds more accurate to me
- KSKara Swisher
... cloddish. Uh, every step of the way, this, this acquisition feels cloddish. And, and the, and the debt is the debt. That's what it is. And one of the things I want people to focus on is there's a huge amount of debt. They're gonna-- The ugliness is not now, even though there's a lot of ugly right now. It's gonna happen once the deal is, is struck because these people cannot ma- keep the promises they've made. They're not very good promise keepers. Some might call them mendacious at times. Um, uh, but they will not be able to keep up their, um, what they are saying they're gonna do, and that's when the ugliness will truly start, when they have to make these cuts, which have to be significant. No matter what they say, unless Ar- Larry Ellison decides to just take his money and bankroll the whole thing, which I don't think he will, um, this is gonna be tough for, for Hollywood, and they know it. Um, and I think they're gonna, they're gonna have real troubles. And Ne- and then Net- that's when Netflix comes in and sucks up all the pretty parts, would be my guess.
- SGScott Galloway
I do. I actually think it probably closes, though, 'cause-
- KSKara Swisher
Yeah
- SGScott Galloway
... I talked to an economist this weekend, and he said it doesn't really fit-
- KSKara Swisher
No, yeah
- SGScott Galloway
... the Hurdle rate for a monopoly.
- KSKara Swisher
Yeah.
- SGScott Galloway
In terms of streaming, um, if you factor in linear content from their flagship channels, CBS, HBO, and HGTV, the hypothetical combined platform gets roughly twenty percent of total US hours streamed, and Netflix is at sixty. In terms of total TV viewing time, a combined Warner Brothers, Paramount, um, streaming and TV all-in would represent about twelve point two percent of total US viewing TV watch time, and that's less than YouTube currently has at about thirteen percent. In terms of box office sales, Paramount and Warner Brothers represent roughly twenty-five percent of the domestic box office, so... And they're just so well connected with Trump. They'll end up selling off, like, SpongeBob SquarePants so some regulator can feel like they've got a win or something or divesting of some stupid children's program. But I think this goes through. Kalshi has it at seventy-five percent. I think it's actually higher than that.
- KSKara Swisher
Yeah, I think it's-- I just, I've just noticed a lot of Hollywood people, and, and the smart ones, I'm not talking about the dumb ones, um, have been like, "Hmm, this feels bad. Something feels bad." But I think it's largely the, all the noise around CBS and the disaster they're perpetrating there. But, um, but I think it's more, um, uh, I, I just think they're... The pain is gonna come once the deal is done. That is where it's gonna happen, and you're gonna see, like, how are they gonna get out of this box? And they're, none of them are Houdini in that gang. So, um, that's, that's the problem. Um, we'll see. We'll see where it's going. But definitely, the state attorney generals are involved. They're gonna try to ex-- They will get them to sell something up there. I am still very concerned about the backing of these Middle Eastern wealth funds owning this much of our m-media. But, you know, no one else seems to care. Um, but I find that really... And I, and EU will, will... They'll have to, they'll have to do a lot of favors for people going forward. And later, Ted Sarandos and YouTube will take it all over. Uh, that's my [chuckles] feeling. Like, it's really, it-- the- these people are, like, not, don't count compared to those two, and the, where you should watch is YouTube and Netflix. That's pretty much how I feel, and Disney to a lesser extent. Anyway, last thing. Canada is the latest country to crack down on social media for teens. The government proposed a bill this week to ban kids under sixteen from using social media, though most companies can get exemptions if they prove their platforms adequately protect young users. It's not just Canada, as we said. Across the pond, UK Prime Minister Ke- uh, Starmer is weighing a similar ban. It's, I think Australia has one. It's, it's comping, it's, it's across the
- 42:01 – 51:19
Social Media Bans
- KSKara Swisher
world, but don't expect this to happen in the US. Our embassy in London posted about the potential UK ban, writing, "The United States favors parental empowerment over government mandates," whatever. Also worth noting, uh, though, Australia's social media ban is struggling. Seventy percent of teens are still using social media apps according to a recent report 'cause they can get around this stuff. So I, I think it's more, uh, uh, teens continue to smoke after we put stuff on packs and made it harder to buy them. I don't really think that should be the goal there. But I think a society has to say, "This stuff sucks and is dangerous." So I don't mind just the saying of it. So how do you, how do you think about UK and, and, and Canada doing this?
- SGScott Galloway
I think it's great, and I think it's overdue. I don't, I don't think there's any reason why anyone under the age of sixteen should be on a social media platform. I think one of the greatest threats to our society is that we're evolving a new species of asocial, asexual males, and that forty percent of the S&P is now tied to trying to convince these people to sequester from their relationships and be online. And part of the problem is just as their brain is getting wired through puberty, you're teaching them to have constant visual stimulation and, and be staring at a str- I mean, there's even, there's even evidence now that their posture is changing. So-
- KSKara Swisher
Oh, leaning over?
- SGScott Galloway
Yeah. Unless you have, like, a-
- KSKara Swisher
They're back to, back to Neanderthal, right?
- SGScott Galloway
Unless you have collective action... And I do think these bans, uh, you know, peop- schools aren't gonna allow you to have a phone. If you're, if you're a preschool or middle school, you're not allowed to have a phone. Or, I mean... Anyways, I, I think this is, it took us thirty years to figure out tobacco or regulate it. It took us twenty years with opiates. It looks like social went on mobile in twenty thirteen. It looks like it's gonna take us exactly about twenty years. But I, I think this is a great thing.
- KSKara Swisher
Me too.
- SGScott Galloway
Europe is leading on this. It's weird to describe Europe as an innovator on regulation. But, uh, as somebody who has grown up with kids in the kill zone, exactly the wrong age at exactly the wrong time-
- KSKara Swisher
Right time
- SGScott Galloway
... a lot of people will say to me, "Uh, I'm really worried. I have a five and eight-year-old." I'm like, "No, no, no, you're fine. We'll have this figured out by the time they're thirteen and fourteen." But if you went through COVID as a teenager and grew up with social media, I really think you face some significant headwinds, uh, uh, in terms of-
- KSKara Swisher
I do-
- SGScott Galloway
... emotional regulation
- KSKara Swisher
Can I make another... First of all, as I said-
- SGScott Galloway
Sure
- KSKara Swisher
... it's, it's s- it's a sign that society thinks it's important, just like we did with cigarettes-
- SGScott Galloway
Right
- KSKara Swisher
... or seat belts. Not everyone wears seat belts. Not, lots of teens smoke. Guess what? Lots of teens drink, even though we have rules. It's the society saying to its citizens, "We think this is bad." You can cheat, and they will, no question. I think that argument is so false, like, "Oh, teens will get it anyway." I'm like, "Okay, they'll get liquor anyway. They'll get everything." So I think that's number one. It says something about your society that you care enough, and it isn't mandating. It's just saying, like as with cigarettes, as with drinking We shall, our teens shall not do this. And I think that's perfectly fine, and, you know, the people that say it's not, they're, they're not paying attention to everything else. The second thing is, I do think social media's on the decline among young people, not among our people, who are s- addicted, fatally addicted to these things. Um, but I do think... I, I watch a lot of young people, and I know a lot of them are on there, but I think the age is a little higher
- SGScott Galloway
I put an asterisk on that. I think it's declining among wealthy, informed young people who have strong parental influences and the money and the resources-
- KSKara Swisher
Yep, fair point
- SGScott Galloway
... to get engaged in other things.
- KSKara Swisher
Fair point.
- SGScott Galloway
I think if you're s- if you're the child of a single mother, home alone a lot, I don't know. I, I-
- KSKara Swisher
Yeah
- SGScott Galloway
... you know, I mean, even among young men, do you know supposedly men ages 20 to 30 are spending more time in, less time outdoors than prison inmates? They're on a fucking screen. And just to, just to go to s- what-
- KSKara Swisher
Gaming. Uh, no, I think, it, uh, I'm, I'm talking about social media itself.
- SGScott Galloway
Some of it's gaming, I agree. But just, uh, the, the big tech's excuse has always been, "We can't find, it would be impossible for us to detect underage, underage users." Guess what? When Australia passed an act, the platforms deactivated nearly 5 million teen accounts in just one month. They were able to figure it out. And meanwhile, that very same detection is being withheld from Americans because our federal government has no interest in protecting children from the harms of social media. The Kids Online Safety Act passed the Senate 91 to three, and then died when House GOP leadership refused a floor vote. So, uh, the, the r- the bill's been reintroduced and has stalled again. A March House markup was pulled amid partisan fights over preemption, and 40 bipartisan state attorney generals are begging Congress to act, warning the House version would gut state child safety laws. So this is a-
- KSKara Swisher
I like you bringing the data, Scott.
- SGScott Galloway
Well, the last federal law protecting kids-
- KSKara Swisher
I know
- SGScott Galloway
... online was COPPA, and it was in 1998.
- 51:19 – 56:50
Predictions
- SGScott Galloway
is about to get a great deal of money, and so is every other big podcast to be the, quote-unquote, "The exclusive."
- KSKara Swisher
They've already come knocking.
- SGScott Galloway
[laughs] I don't care if it's Yahoo, Scout, or Gemini. These guys are all gonna-
- KSKara Swisher
Yahoo
- SGScott Galloway
... W- we're about to, some of that cheap-
- KSKara Swisher
Yahoo, Claude
- SGScott Galloway
... Remember all that cheap, cheap money that was being thrown around in '99? [laughs]
- KSKara Swisher
That was mattresses. That was mattresses.
- SGScott Galloway
I mean, you're about to see-
- KSKara Swisher
Yeah, it's already happening
- SGScott Galloway
... the podcast universe have this tsunami of money-
- KSKara Swisher
It is
- SGScott Galloway
... just to say-
- KSKara Swisher
I've noticed that
- SGScott Galloway
... "Hey, Joe, we'll give you 10 million bucks if you decide that you only use, uh, OpenAI."
- KSKara Swisher
Right.
- SGScott Galloway
Uh, anyways, that's my stupid simple one, but-
- KSKara Swisher
Mm-hmm. So true
- SGScott Galloway
... the more specific one is that, I mean, uh, look, the fix is in, and I just think it's so fucking obvious. Uh, Musk called Trump after doing a lot of analysis with his bankers and said, "You know, uh, I spent $250 million to get you elected." And he probably said, "No, you didn't get me elected." And he said, "Well, can you acknowledge that I helped?" And he said, "Yeah." And he's like, "I'm considering putting two and a half billion into the midterms. How would you like that, President Trump?" "Well, I'd like it a lot." "Well, if you can get Paul Atkins over at the SEC to waive that stupid rule that, that doesn't allow retail investors from participating in great companies like SpaceX, I just have this hankering to put in-
- KSKara Swisher
Hankering
- SGScott Galloway
... two, three, maybe $5 billion into the midterms."
- KSKara Swisher
Yankering, hankering, yes.
- SGScott Galloway
And again, what does that do? It sends $30 to $50 billion in incremental dollars hunting for 100 billion in available, uh, shares of SpaceX. This is, all of a sudden, there's 50% more people looking for homes in San Francisco than there was, there was, uh, with any other previous IPO, and let's just do the math. Say that takes the price of SpaceX up just, let's be conservative, 10%. At 2 trillion, that's 200 billion. He owns 40%, so he gets $80 billion. Why wouldn't he promise the president 10 billion in the midterms? Citizens United, he can do whatever the fuck he wants. So if he called the president and said, "Hey, call Paul and tell them to do away with this stupid rule such that retail good Americans can't invest in the best companies, and I got a hankering to put $10 billion to work in the midterms," I mean, quite frankly, wouldn't he be stupid not to do that?
- KSKara Swisher
Yes, absolutely. That's how it works. That's how it works.
- SGScott Galloway
Anyways, my prediction is the fix is in. What people aren't focused on is this, the wave, the waiving of the NASDAQ 100 rules that you gotta wait a year and let price settles is gonna create-
- KSKara Swisher
They tried to do that, right. Yeah
- SGScott Galloway
... is gonna create the ultimate false flag signal of pricing on the day of this IPO.
- KSKara Swisher
Right. That's what they're doing. Oh, they're all talking it up, and you're like, "Oh, you people." And Stephanie's right, morality has nothing to do with it. Look, I could never be an investment banker. I couldn't be a lawyer either. I wouldn't, I'd be like, "You're guilty. You should go to jail. I'm gonna turn you in." I just couldn't do it. I just couldn't do it. Same with invest. I, you suck. I'm not gonna take you public. I just couldn't do it. I just couldn't do it. I don't know. Well, whatever. Someone has to. Anyway, uh, uh, that was a great prediction. I think you're absolutely right. Um, and, and about the podcast thing, yay, yay.
- SGScott Galloway
Yeah, yay for us.
- KSKara Swisher
Although, I have to say, how fucked do you think I am?
Episode duration: 56:50
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