PivotSpaceX Wipes Out a Trillion in Value. "How Low Can These Shares Go?" | Pivot
EVERY SPOKEN WORD
60 min read · 11,930 words- 0:00 – 0:27
Intro
- SGScott Galloway
I do have another tagline for Facebook.
- KSKara Swisher
[chuckles] Okay.
- SGScott Galloway
Meta: Ignore the smell coming from the basement. [upbeat music]
- KSKara Swisher
Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.
- SGScott Galloway
And I've been doxxed.
- KSKara Swisher
You've been doxxed. What? Tell me.
- SGScott Galloway
Uh, so I don't know if you've heard, but-
- KSKara Swisher
Mm
- SGScott Galloway
... Mayor Mamdani has decided-
- KSKara Swisher
I have
- SGScott Galloway
... to release
- 0:27 – 9:57
Mamdani’s Pied-a-Terre Tax
- SGScott Galloway
a list of the nine hundred and fifty thousand residences with addresses and names that might be eligible for his Pied-a-Terre tax.
- KSKara Swisher
Yeah. Yeah. And? This is from The Wall Street Journal. This is the story. Explain it. Do you want me to explain it?
- SGScott Galloway
Yeah.
- KSKara Swisher
Let me read from The Wall Street Journal. "Mamdani’s administration fired a warning shot last week when it published an online list of property owners that might be subject to a surcharge on luxury second homes. The list includes owners’ names, addresses, and market value of properties. The released list threatens to stir up existing tensions between the mayor and the city’s elite. The city has also been sending out notifications to homeowners they might be subject to the new tax. 'If you have a second home in New York worth more than five million dollars, check your mailbox when you’re back in the five boroughs, because you’ve got mail,' the mayor said in a post on social media." I assume y- I am not-- I have, I have an apartment here, but I don't... I'm well below that number. Um, uh, uh, what do you... I, I don't love this. I can't, I can't say I love this. It feels like a little bit like doxing. Just tax them and get, get on with it is my feeling. That's how I feel.
- SGScott Galloway
Here's the definition of doxing.
- KSKara Swisher
Okay.
- SGScott Galloway
Doxing is publishing private identifying information to expose someone to publicly pressure or harm without their consent, tied to status, the publisher's disapproval. Swap elite for any other disavowed group, and nobody's calling this a tax, uh, roll. This is-- I'm a fan of this tax.
- KSKara Swisher
Yeah, I know.
- SGScott Galloway
I was supportive of it.
- KSKara Swisher
Yep.
- SGScott Galloway
Rich absenteeism should, should subsidize a nurse in the Bronx making forty percent of her income on rent. I, I, I came out in favor of this tax.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
This is the definition. He's taken a legitimate source of tax revenue and he's turning it into a wanted poster. And the question I would have is, other than trying to identify and imply these people have done something wrong, and then eighteen months after a healthcare CEO was executed in the street, and then publish the list, what, what is the upside here? Why is he doing this?
- KSKara Swisher
I, I-- There's two things. Uh, I think he's been largely successful, but there's two things that I think are real misses, and they're both s- well, they're not related. They are related in some way. One is this luxury tax. They should not have s- uh, focused on Ken Griffin. I understand what... If they-- I-- They got it passed. Hochul agreed to do it. Just tax people. That's it. That should be it. It got passed. Uh, the elite are gonna be mad about it. Some are, some aren't, like you. And then just tax them. This was a big mistake to try to put targets on these people. I, I find it really disturbing. The second thing was, even though I agree with, with, uh, with problems with Benjamin Netanyahu, to say you're gonna arrest, wanna arrest him seems ridiculous, 'cause it's not your job, right? It's not... I, I get why you might say, "I don't like him, and I wish I could arrest him," but it was sort of weird. I, I thought it was a weird f- another weird flex about-- which is not his job. And so in this case, I think, uh, he's gonna piss off the elite anyway, or many of them, not all of them, over this tax. I don't know why he would... These records are public, I think, I believe, but why call attention to them, correct? Is that... I, I can look up any, any home if you know the address, essentially. But maybe not who's here as a second home. I don't know. Um, that I don't know.
- SGScott Galloway
Well, I, I'll just touch on the, the him saying he would, he would arrest Benjamin Netanyahu. His legit-- He, he basically, the justification was that he's been convicted in the International Criminal Court.
- KSKara Swisher
Right. Mm-hmm.
- SGScott Galloway
Uh, there are dozens, if not hundreds, of people convicted in the International Criminal Court, but he's decided to announce he's arresting the Jew?
- KSKara Swisher
Hmm. Well, I, I'm not sure. Okay. I, I think that's-
- SGScott Galloway
Okay. Who else has he announced he's arresting that come to-
- KSKara Swisher
Uh, he hasn't. He shouldn't have done this. I said he shouldn't have done it. I just, I think it's-
- SGScott Galloway
Uh, uh, well, so you and I are in violent agreement on this.
- KSKara Swisher
Yeah. Yeah.
- SGScott Galloway
And when he's decided... He's not only playing into the worst fears about him, but he's making it harder for all progressives. I believe in a progressive tax structure. I believe we should raise tax rates. And the Republicans, in order to create deficits and continue to transfer money from the poor to the rich, they argue that progressive tax structures are persecution. And this plays exactly into that entire narrative. And l-let me, of course, I never miss an excuse to talk about myself. I left San Francisco in two thousand 'cause I thought I was gonna be rich. Red Envelope was going public, and I thought, "What do I wanna do with my life?" And I thought, "I wanna teach, and I wanna live in New York." New York is the greatest collision of proximity, humanity, culture, creativity, weirdness, and I'm like, "I want that."
- KSKara Swisher
Yes, you've said that. Yeah. You love the city.
- SGScott Galloway
And I moved there in two thousand. Uh, [chuckles] I ended up I was not rich, and I worked my ass off in New York, and I decided, "You know what? I can't afford to live here." And I moved to Florida. But I decided I'm gonna start a business intelligence firm called L2, and I started it in New York because, A, it's a, an amazing place to start a business, and B, I always wanted to have a foot in New York. I started L2 in twenty ten. I sold it in twenty seventeen, and I've spent a bunch of time this morning trying to figure out what are the taxes, not the federal taxes, but the state franchise tax, real estate taxes, payroll taxes paid by L2 from two thousand and ten to present to New York City and state, and it's about fifty-one million dollars. The average-- In other words, we, L, L2 is paying for what the, one of the largest firehouses in downtown The budget for one of the largest firehouses in downtown Manhattan is $26 million a year. And the, uh, uh... But quite frankly, what he's saying is, okay... And, and when I sold my company in 2017, I was living in faculty housing. My dean called me and said, "Congratulations. I just saw you sold it for this. You need to move out of [chuckles] faculty housing," which was fair.
- KSKara Swisher
Right, and you bought your apartment. Yes.
- SGScott Galloway
And I bought an apartment. And now, when he starts putting, quite frankly, he-- When he starts putting a tar- I-implying, he's implying we've done something wrong. He's implying that we're guilty of something.
- KSKara Swisher
Yeah. He should just, he should just take the tax. I would agree with you.
- SGScott Galloway
There's no... They, they have the tax rolls. They don't need this for tax reasons. As a matter of fact, if Amazon released a list of a million names-
- KSKara Swisher
Yeah
- 9:57 – 20:06
Zuckerberg’s AI Media Tour
- KSKara Swisher
Mark. But he's still on his AI optimism tour. Um, in an opinion piece in The Wall Street Journal, Zuckerberg asked whether AI will be centralized and restricted to a few institutions or a tool that empowers everyone. His own proposal, he says, is a philosophy based on individual empowerment as a source of prosperity and a balance of power as a foundation of safety. In the piece, which was rather long, uh, and needed, in desperate need of editing, Zuckerberg expresses concern that others creating AI talk about it in a way that is filled with doom. He continues this idea in The New York Times interview, which he also, he's on a, he's on a chatting tour, saying developing AI in a tightly controlled manner is akin to abandoning values and stifling innovation. He was taking aim at OpenAI and, and, uh, Anthropic, who are way ahead of him, actually. Um, I suspect he wouldn't be making this speech if Meta was ahead. Um, uh, uh, it was interesting. They're, they're very, they, they're really doubling down on this we love humanity thing, um, and AI optimism, and rightly so, because they went too far in the other direction in saying how bad it would be for everybody except themselves. And so they're, uh, they're sort of doubling down. What do you make of this? Uh, and no Jeffrey Dahmer jokes today, if you don't mind. [chuckles]
- SGScott Galloway
No, no, it's not like he's buying bottle service after being dumped and trying to pretend-
- KSKara Swisher
Yeah, sure
- SGScott Galloway
... everything's okay. Uh, look-
- KSKara Swisher
Yeah
- SGScott Galloway
... CEOs consistently, consistently try to focus on their reputation, right? And a CEO trying to convince us that AI will empower everyone, it's not marketing, it's preemptive regulation. And I thought it was just so hilarious that he's claimed to be worried about the concentration and power of AI. What he's worried about is it's not concentrating around Meta.
- KSKara Swisher
I would agree with that. Yeah.
- SGScott Galloway
Well, well, when one company controls, I think it's sixty-three percent of all or sixty-eight percent of all social media, he's worried about the concentration of power.
- KSKara Swisher
Yeah.
- SGScott Galloway
So that, that comes across as cynical. The companies with the largest distribution will likely be the most successful, and Meta has three billion users. That's an unfair advantage if you want to talk about concentration of power. History highlights that we consistently overestimate the short-term impact of technology and underestimate the long-term impact.
- KSKara Swisher
Yes
- SGScott Galloway
So AI will likely disappoint this year, but-
- KSKara Swisher
Mm
- SGScott Galloway
... will likely permanently reshape certain parts of our society and economy over the next decade.
- KSKara Swisher
Yes.
- SGScott Galloway
Essentially, it feels like every AI ad right now is an attempt at a reputation management campaign.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
It's not even talking about the products. It's saying, I mean, it, it, it, they're... It, it's really interesting. They're running their ad, ads saying it'll connect everyone.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
And then someone who founded one of these companies will say, "It's a human extinction event" on-
- KSKara Swisher
Right
- SGScott Galloway
... on, on PBS. [laughs] You know, it's just sort of, well, which is it, guys? Is it gonna connect us or is it gonna, is it gonna destroy us?
- KSKara Swisher
Well, I think they're coordinating their talks now. They're like, "Maybe we should slow down on the doomsaying," right? Or, "Maybe we should say open is good," 'cause Dario Amodei also noted that there should be an open, that it, there should be open systems. I think they're... What, what it is, is they've got microphones in front of their faces, and they've said too much, and now they're trying to pull it back. And so Mark is sort of walking into this breach by saying, "I believe it's for everybody." Except he's not handing... He did this in the beginning of the... I remember, uh, very vividly, a, a late-night phone conversation when he did this long essay, another long essay in desperate need of editing, um, where he talked about how it was about c- how social media was about community, and he wanted to lean into people, and that we're all in this together. And I recall asking him, "If we're all in it together, why do you control everything?" Like, "Why are you the monarch of Facebook?" And he never had a good answer for that. Like, you know, he was like, "Well..." I said, "If we're all in it for community, why don't we all share your money? Why don't we all share if we're, if our privacy is being used, why aren't we being paid?"
- SGScott Galloway
[laughs] We're in this together, Mark.
- KSKara Swisher
We're in this together. Like, together, I would like some of the money you're using my privacy to sell. Like, I, uh, and it was... I had the same argument with Steve Case many years, many, many years before that. They all are like, "We're here for you," but except when it comes to divvying up the goodies and, or control. And so I was, I, I, I was... It's the same... If you go back to that essay he wrote about social media, none of which came true, it became a very negative force in society, although there are some definite positive aspects, no question. I, I, I literally can't... It's weird that he's trying this out again, 'cause I think he actually believes he's helping people. What you were right, I have to say, away from all your jokes, which they did not like, um, and I feel like ads are not forthcoming in the future, um, is, is that they should just stick to, "We're making capitalism, and we're gonna, there's gonna be a lot of jobs from the things we make." I think that's wh- or, "Here's vocational training," or, "Here's..." Like, I think they should lean into the stuff that they actually deserve credit for, I suppose.
- SGScott Galloway
This is not only wasteful advertising, which is everyone's worried about. This, this hurts. This brings up... This will just inspire a lot of conversations like this one, showing just how cynical this is, and that, and reminding people that this is a firm that, uh, when social went on mobile, y- we saw the greatest increase in young adult depression that we've registered since we began tracking it. I mean, it just stirs up a lot of things that are not gonna be good for them. Um, so I don't... I think this was a real, uh, own goal. But in just going to the story of, you know, if you will, open, open AI versus closed AI, open, open systems usually win. Linux won the cloud. Android, Android won mobile. The internet beat AOL. You were talking about Steve Case.
- KSKara Swisher
Yeah. Yeah.
- SGScott Galloway
Closed models try to ring-fence and maximize profits. Open models optimize, um, for adoption, right? And you're, you're probably am... And this is, this is how this war is playing out with China. You don't, you don't win or beat China by restricting knowledge. You beat China by commercializing it faster. Now, NVIDIA's incentives are obvious. They sell the picks and shovels. The more AI models that exist, the more GPUs they sell. But s- you know, trying to stop open source AI is like trying to ban calculus. It's just, it's, it's not gonna work, and, uh, but, but for Zuckerberg to talk about it, it's because h- he failed trying to ring-fence his own AI.
- KSKara Swisher
Yeah, I would agree. All right. Let me, let me pu- pull out, do an exercise. Instead of calling Jeffrey Dahmer, what, what... If he was standing in front of you, you obviously aren't gonna insult him, possibly. Maybe you would. What would you say to him? How, how should he be messaging this? What, how should he be marketing this?
- SGScott Galloway
How should he be messaging around AI or Meta?
- 20:06 – 22:54
AI Safety Initiative
- KSKara Swisher
tech companies have launched an AI safety initiative to develop open source tools for AI safety and cybersecurity. The initiative follows a recent cyberattack involving an OpenAI agent that breached Hugging Face during internal testing, raising new concerns about AI security. Notably absent from the alliance are OpenAI, Google, and Anthropic, highlighting the growing divide between supporters of open models and companies building closed systems. This follows Anthropic and O-OpenAI lobbying Washington for some restrictions on the latest open source models coming out of China. However, Anthropic's Dario Amodei, as I noted, emphasized in a letter this week that the company has never advocated for a ban on open weight models. Like you said, we, uh, it's gonna be-- It's-- Open, OpenAI will win, correct? No matter what they do.
- SGScott Galloway
The honest answer is, well, or what I think is gonna happen, and I said this on our last one, I think the market for AI is bifurcating into a series of frontier models that aren't open source, that are better, and, and people will pay a premium for them, and I think they'll still be the largest businesses by a dollar volume level. And then the Toyotas and Hondas and Hyundais of the world will be the open source coming out of Asia.
- KSKara Swisher
Yeah, Corolla is a great way to think about it, Toyota Corolla.
- SGScott Galloway
And, and there'll be a market for both. But I think the more relevant one are the open weight models. They tend to, in technology, they tend to be the ones that kind of win long term. Now, iOS is, I guess, technically a closed system and Android's open. Android has more users. iOS creates more shareholder value.
- KSKara Swisher
Right. No, that's a fair point.
- SGScott Galloway
But I-- But there's a, you know, there, there's huge... I mean, you could argue that Android creates more shareholder value because it informs what is the greatest toll booth in history. You could argue it both ways. I think there's a market for both. I mean, it, it's so funny. Business and technology usually comes down to iOS versus Android.
- KSKara Swisher
Yeah, it does.
- SGScott Galloway
It-- that's what's happening here. It's the frontier models versus the open weight Chinese models.
- KSKara Swisher
It's weird they're having this weird beef. It sort of happens all the time, doesn't it? Well, there was so much pushback when Linux and the others came around, and it al- it's always the same. It's always the same.
- SGScott Galloway
Ma-Mark Zuckerberg right now is using basically this, you know, c-corporate Vaseline as Axe body spray. He thinks if he sprays enough on himself, he'll no longer stink. Mark, you fucking reek. You have terrible BO.
- KSKara Swisher
[laughs] There he goes. There he goes.
- SGScott Galloway
I just got you another call.
- KSKara Swisher
Don't. Oh.
- SGScott Galloway
I just got you another call, Kara.
- KSKara Swisher
Oh, I tried. I tried. I tried.
- SGScott Galloway
I smell the Axe, but there's something else I smell here.
- KSKara Swisher
Oh, no. Okay, we're gonna stop.
- SGScott Galloway
Oh, it's teen depression and self-cutting.
- KSKara Swisher
Oh. All right, and we're out. Okay, I tried. Okay, well-
- SGScott Galloway
It's polarization of our elections.
- KSKara Swisher
I, I think they have a lot to answer for.
- SGScott Galloway
It's a coarsening of our discourse.
- KSKara Swisher
I think they have a lot to answer for. [laughs] Don't say he has BO. Anyway, w-while we're on the to-- BO, I-- There was a lot of BO on the subway this morning, by the way. While we're on the topic
- 22:54 – 28:45
Data Center Impacts
- KSKara Swisher
of AI, we've been hearing feedback from some of you who have been impacted by data centers in your communities, so we wanted to bring an expert voice. Let's listen to a clip from Evan Halper, a business reporter at The Washington Post, who's been covering data center build-outs and their impacts about how tangible these issues are.
- SPSpeaker
This is not propaganda. This is not media misinformation. The backlash is driven by very real concerns in these communities, many of which I've been to. They, they're, they get all kinds of promises made to them by tech companies, that things are gonna be run on clean energy, they're gonna bring all kinds of jobs into the community, they're not gonna have impact on the water, et cetera, et cetera. But what we're seeing on the ground is the impacts are very real. Suddenly, a community that wasn't expecting it, that was rural, has been, has seen a large amount of land rezoned, big power plants getting built. The power plant is big enough to serve a medium-sized American city, all to serve just one data center. It's run on gas. Gas creates public health problems. It creates climate problems. There's backup diesel generators on top of the data center. Those backup diesel generators are major polluters that are supposed to run very infrequently. But now, because there's not enough power on the grid, because the data centers need so much, these emergencies get declared, and the backup diesel generators get to ... function even more, often on the lowest air quality days, creating an even bigger air quality problem. So these problems are real. This is not just an imagined thing. This is not political opportunism. These communities are suffering real impacts from these data centers.
- KSKara Swisher
Yeah, I think, uh, I th- you know, as you said, some of them should be fine if they're done correctly, but they aren't being done. They're getting, they're running over these areas, and people, real people are very concerned. They really are. And this is, this is a message that I have been trying to get through to these tech companies. They really do think it's fake. They think it's the media being negative. I've heard this over and over again. By the way, Willie Nelson just spoke out about data centers, saying an AI data center is the last thing his Texas hometown needs. So again, one of the things is it's the same theme that we're talking about. They have painted themselves into villains, and then they wonder why we think they're villains, and we don't trust them. And you know, you can talk all you want about trust the media. I agree. People have never trusted the media, but they really don't trust tech companies at this point, and it's a real problem. And doing these ads about humanity is not... You're right. Actions speak louder than words. And these data centers, we are gonna suffer as a country if we don't stay ahead in this area. But the way they're introducing data centers is so overwhelmingly feels corrupt, feels like, feels bad to the citizens of this country, and I like that they speak up. I do, even if, even if some of them are, are necessary. Your thoughts?
- SGScott Galloway
Look, I, I think his comments are powerful, and our nation has a terrible legacy of outsourcing the externalities of progress, whether it's the factory, the, the, the, the, the, the coal plant, a chicken processing plant, or, or, uh, a plant that contaminates the water table. We have a habit of putting these in the most vulnerable communities who have the least resources to push back on it. That is nothing new. Um, so I think it is up to local civic officials, and I think it's great that when the populace speaks up and asks their fiduciaries, elected representatives to make sure that the upsides, and I do think there's an upside around tax revenue and growth-
- KSKara Swisher
Mm-hmm. Yep
- SGScott Galloway
... um, to a data center that's well-planned and well-regulated. I do think there's an upside. It's up to the local civic official to say, "Is the upside greater than the downside here, or is this a function of me getting money from Meta for my next campaign or ma- or just making a stupid decision?" I do think it has become... I think a lot of people talking about this are having a knee-jerk reaction around what has become an empty vessel being filled around rage, around income inequality, and because these individuals have not acquitted themselves. And I think what could fix this is, um, essentially, um, a, a, a Facebook ad that says, "Facebook, where your parents go to get catfished by AI Jesus." I think that would solve everything.
- KSKara Swisher
[laughs] You should stop.
- SGScott Galloway
Seriously, Meta putting out fucking ads right now is like trying to put lipstick on a landfill.
- KSKara Swisher
Okay, lipstick on [laughs]
- SGScott Galloway
Should I stop?
- KSKara Swisher
I love angry-
- SGScott Galloway
At what point should I stop?
- KSKara Swisher
No, it's, uh, uh... It's, it's just funny. It's just funny. It's... I'm gonna get another call. In any case, uh, it, it's, I, I... It is a real issue here, and I think Evan is speaking exactly. Willie Nelson is speaking to it. You better listen to these people, uh, all you tech companies. You really better. And, and, and your actions-
- SGScott Galloway
It'll become an issue in the next electoral cycle
- KSKara Swisher
... 100%.
- SGScott Galloway
Yeah.
- KSKara Swisher
Anyway, let's go on a quick break. When we come back, uh, SpaceX's trillion-dollar, uh, wipeout. [upbeat music]
- SGScott Galloway
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- KSKara Swisher
[upbeat music] Scott, we're back. The SpaceX rollercoaster
- 28:45 – 35:02
SpaceX Wipeout
- KSKara Swisher
continues. The stock plunged more than 20% below its IPO price this week, wiping out more than $1.2 trillion in market value, roughly the market cap of Tesla. Tesla's also suffering. The stock has bounced back somewhat, uh, as of this recording. It's down, but it's down 3%. Next week could be another wild ride, with SpaceX reporting earnings on Tuesday and the first insider lockup expiring two days later. How low can these shares go? They look like they're headed to... They look like they're headed to 100. I feel like they, I feel like they're going down, but I don't know. I'm not, again, I'm not a stock picker, and m- again, Elon has enormous power. But it seems like, especially after that interview, he seems insane. Like, it seems people are not memeing him as much. Just me.
- SGScott Galloway
Well, price is what you pay, value is what you own. And the price that people paid after what was arguably, I think, one of the greatest engineering feats in history between Goldman and J.P. Morgan and Elon Musk and the NASDAQ 100 and President Trump and the head of the SEC to get this thing at, out at 120 times revenues. There's a... My son told me this, and it just fascinated me. No basketball, no, no basketball player has ever been able to be in the air longer than a second. It's really weird. For some reason, the, the unit of measurement of a second, no one can stay in the air for a second. Gravity eventually pulls them down. Valuation is gravity. Eventually, I don't care if it's GameStop. Uh, no one has been able to defy gravity. No one gets closer to that one-second limit than Elon Musk. "Hey, look over here. Oh, we're autonomous. Oh, we're robots. Uh, don't value me like a car company." Let's talk about being an interplanetary species. Let's not talk about-
- KSKara Swisher
Right
- SGScott Galloway
... the fact that it's, you know, it's an interesting company, and one great company and then a bunch of money-losing companies. The lockup expiration here matters more than earnings, and that is supply, I think any reasonable math shows that supply is gonna overwhelm the fundamentals in the short run. And retail investors, and this is what happened at the IPO, retail investors consistently confuse a great company with a great stock. And, uh, at some point, the best company in the world is overvalued, and at some point, the worst company in the world, unless it's going to zero, is undervalued. But where's... I mean, I, I, I'd rather than making a recommendation, I tell people what I'm doing. I'm not getting near this thing because Elon's not afraid to come out and say, "I- I've have funding secured at $450 on Twitter and not get punished and run up the stock." He's also... His stocks tend to be meme stocks that totally disassociate-
- KSKara Swisher
From value
- SGScott Galloway
... from, from actual values, so stay the fuck away from this thing. But if you're looking for a bottoms-up valuation in terms of comparing this to its competitors and saying it's the best in that space, that bottoms-up valuation would put it at, like, 20 to 30 bucks a share, which by the way, would still make it one of the most valuable companies in tech.
- KSKara Swisher
Yeah. It's down for, it's down 30%. It was at 201 when it, when it deb- The highest has been 201, uh, or 202. 202 really, and now it's at 113. Um, i- if it crosses that $100 barrier, I would worry. You know what I mean? I think I would worry o- of where it was going, 100%. And I would... And same thing with Tesla. They seem like they're... That, right, to this today, it's on a real decline. Um, but over the past six months, it's dropped. If you look at anything the past month, it's dropped like a, like a, like it's incredibly. It's down to 302. It probably will pass the $300 barrier. Um, and those are, those are mental things for people. You know, I think they're mental things for people. And, and again, valuation may be making a, making a very strong return here, and Elon's various, you know, jazz hands is not seeming to work here. I, I don't know what he can do to... Well, he could have results, right?
- SGScott Galloway
Well, he's... Okay. But even to, to look at the glass as half empty, the fact they were able to engineer-
- KSKara Swisher
Yeah
- SGScott Galloway
... such an incredible valuation out of the gates gives some people the impression that it's cheap now. If it went public at this valuation, we'd all be like, "Jesus Christ, can you believe this?"
- KSKara Swisher
Yeah, you're right.
- SGScott Galloway
So-
- KSKara Swisher
Trillions
- SGScott Galloway
... it, it's, uh, so it, it-
- KSKara Swisher
Don't go near them
- SGScott Galloway
... the IPO was a win for him, even if no matter what you say, even if it's down and it's a bro- technically a broken IPO now, the fact that he was able to put that number on this, this set of assets is nothing short of remarkable. And also, a lot of the people who he has said finance a $44 billion purchase of a, of a microblogging platform that I signed the paperwork under probably some sort of drug-infused haze that by most measures is worth 3 to 5 billion, he said to his investors, "Just hold on. Trust me. I always, I always make you whole." And you know what? He did.
- KSKara Swisher
He did. Yeah. Okay.
- SGScott Galloway
He probably gave those same, same people... Those are probably many of the same people who have invested along the way in SpaceX, and quite frankly, they didn't, they're not subject to lockups.
- KSKara Swisher
You got in at 20, it sounds great. Like, 100 is great. 200's better, but 100's great, too.
- SGScott Galloway
Yeah, but I, I had lunch with a guy here in LA who's, who's, who's this really charming, smart, intelligent guy who's what I would call totally agnostic about all this stuff, and he's known Elon for a long time, and he's invest in everything Elon does. And so when he started investing in SpaceX like 10, 12 years ago, someone just told me he's made $5 billion. And regardless of what you think of, of Elon's paranoid white nationalist rant on, uh, with the head of The Economist and calling her a traitor because she asks him tough questions, if someone makes you that wealthy, and if someone is able to create that kind of value, you just put money into anything they do.
- KSKara Swisher
Right. Right.
- SGScott Galloway
And so-
- KSKara Swisher
Yeah. Yeah. I guess
- SGScott Galloway
... that, that, you know, his, his ability to do that, I mean, there's a lot of positives. It's a huge win for him. I do think there's positives for the economy. But in terms of any bottoms of valuation, forget that it was a two... 204. Just look at it now, and you would, in the absence of any history, you would go, "This thing is the most overvalued stock in America right now."
- KSKara Swisher
Right. Yeah. Absolutely. Well, speaking of a very valuable stock,
- 35:02 – 45:34
Apple’s Leasing Program
- KSKara Swisher
Al- Apple briefly hit a $5 trillion market cap for the first time a day after passing Nvidia to become the most valuable public company. It's a busy week for Apple. The company is launching a new program for customers to lease iPhones, iPads, Macs, and Apple Watches instead of buying them outright. This was interesting. The program called Apple Upgrade uses buy now, pay later company Klarna to let people make monthly payments on the device, then upgrade, buy, or return when the lease ends. The cheapest iPhone option is $1799 a month. Apple's move comes a month after the company raised prices on iPads and Macs, citing skyrocketing chip costs. iPhone prices are expected to ra- rise later, uh, this year. Do you like this idea? I didn't know what you would think of it. And also note we're recording ahead of Apple's reporting the Q3 earnings, Tim Cook's final earnings as a CEO. And whatever we think of his stupid golden statue, he has done an astonishing job here as CEO in the, in the years after, uh, Steve Jobs died. What a, what a impressive CEO he's been except for the golden statue, which will follow him the rest of his days and going to the Melania premiere, but go ahead.
- SGScott Galloway
I don't know who the head of strategy is at Apple, but I think this group of people, this man or woman, are literally some of the brightest people in the history of business. And wh- whether it was taking $6 billion out of broadcast advertising and moving it into 550 temples of the brand in a market, one of the biggest markets in the world, technology, that had just shitty distribution. Remember where you used to go to buy computers?
- KSKara Swisher
Yes. Ugh.
- SGScott Galloway
Egghead Comp USA.
- KSKara Swisher
Egghead Compu- oh, Comp USA.
- SGScott Galloway
You, you, you literally walked in-
- KSKara Swisher
Oh, worst
- SGScott Galloway
... and, or-
- KSKara Swisher
The worst
- SGScott Galloway
... or you go to get your computer fixed, there'd be some guy-
- KSKara Swisher
Yeah, creepy guy
- SGScott Galloway
... in a Harley Davidson shirt, and he'd give you a number and put it on a steel rack and tell you to come back in two weeks so he could tell you it's, it doesn't work and you need to buy-
- KSKara Swisher
Yeah
- SGScott Galloway
... a new computer. And then they built these place... I'd like to live in an Apple Store. I think if Apple owned a- opened a coffee counter in their stores, it'd be the most successful retail in the world per square foot.
- KSKara Swisher
Oh, that's probably true.
- SGScott Galloway
And it already su- surpassed Tiffany when they opened their stores.
- KSKara Swisher
Yeah.
- SGScott Galloway
The most successful retailer in history is a tech company. In addition, their stock... [laughs] Okay, you wanna talk about genius? Genius is not only what to do, it's what not to do. Who has invested the least in big tech in AI?
- KSKara Swisher
Uh, I don't know. Uh, well, Warren Buffett? I don't know. Who?
- SGScott Galloway
Apple.
- KSKara Swisher
Apple, yeah.
- SGScott Galloway
Apple, Apple's decided, "Okay. Kids, you go play in traffic. We'll wait till this all gets sorted out after trillions of dollars in CapEx, and then we'll move in with an elegant interface and ownership of the consumer, and we'll, we'll monetize it. Or if we, or we'll just rent it from you and give you access to the billion wealthiest consumers in the world." Apple's stock, it's no accident that the company, the one company that's decided not to get into these AI wars is up 61% over the last 12 months. The most valuable company in the world is up 61% over the last 12 months.
- KSKara Swisher
Yeah. It's amazing.
- SGScott Galloway
These guys, these guys... And this is, this is the, this is what separates the truly, the great CEOs from the iconic CEOs. It's not what they do, it's what they don't do. And the-
- KSKara Swisher
So what do you think of this upgrade, then? What do, what do you think of this? I think it's actually a good idea, I have to say.
- SGScott Galloway
Oh, Kara, I'm sorry. A long-winded, long-winded preamble. This is fucking genius because the reason why hardware companies and services companies don't trade at the same multiple of services re- of, of software companies is not because software is just, quote unquote, "A, a better product." It's because it's a better business model because it's recurring revenue.
- KSKara Swisher
Right.
- SGScott Galloway
Adobe changed everything. Adobe used to s- used to sell, I forget what it was called.
- KSKara Swisher
Big box. Box.
- SGScott Galloway
Director whatever for 20-
- 45:34 – 54:17
McConnell Gets an Ultimatum
- KSKara Swisher
Kentucky Governor Andy Beshear is giving Senator Mitch McConnell an ultimatum: prove you can still serve or resign. Beshear sent McConnell a letter this week demanding he directly and verbally address the people of Kentucky to prove his capacity to serve. If that doesn't happen, Beshear is urging Senate Majority Leader John Thune to investigate McConnell's condition. This comes as McConnell's office released another photo that again sparked conspiracy theories 'cause of the shirt or something, with a statement that the senator is not medically cleared to leave his rehab facility. It was very... I have to say, the, um, the, the note was very... What it left out, speaking of omission, it didn't talk about cognitive issues. It just talked about physical issues, which was interesting. Um, but it's not enough. It, the doctor tried his best to tell the truth [laughs] is what I f- when I looked at it. But it's not enough, uh, for Beshear. Let's listen to what he told reporters on Tuesday.
- SPSpeaker
If he can have a 17 minutes conversation with his protege, he can call into any of your news stations for three. All we're asking is just a little bit of proof. And I get that everybody wants a certain level of privacy, but when you run for these jobs, you know you're giving, uh, some of that up. Uh, we have seen rampant speculation across social media and elsewhere. It could all be fully avoided, and it's all within Senator McConnell's power.
- KSKara Swisher
So under Kentucky law, Senate vacancies are filled by a special election. Beshear is not allowed to appoint a temporary replacement. Um, it's also important for his presidential run for him to look strong here. Uh, it's, it's, that, that's what it's playing into. Um, is this a strongly worded letter gonna do anything [laughs] here? 'Cause that's what it is. It's a s- "I, I urge you to say something." Um, or will they just ignore it? I would assume McConnell, who is, you know, has always been sort of [clears throat] taking the lowest road he could in many ways, um, although Trump has managed to get on lower roads than he is. Um, I, I think he'll, they'll do nothing. They'll just, they'll just ignore this.
- SGScott Galloway
I don't know. I, I think the pressure will, will mount. Uh, I mean, I feel like Mitch McConnell has become the modern day equivalent of Bigfoot. Like, "Oh, wait, we saw him. It's not real." I, I, it's... And look, this is... Am- America has mandatory retirement ages for airline pilots, but not for people making decisions about nuclear weapons and fiscal policy, which is just insane, and this is an example of it. This is... This story really isn't about Senator McConnell. It's about a, a political system that has no graceful exit for aging leaders. And every institution, especially democracy, needs succession planning. And politicians are some of the few people that are allowed to ignore mortality and biology. And just to, another shout-out to Apple and Tim Cook, uh, again, one of the hardest things in leadership-
- KSKara Swisher
To leave
- SGScott Galloway
... isn't knowing when to take over. It's knowing when to leave. And it's insane that these people... When you get older, we purposefully have a difficult time believing that we're ever gonna die. We know it, but we don't believe it. And that is we think, "Oh, I'll figure it out, and I'm still adding value." And also, to be blunt, for a lot of these people who have devoted their lives to work, them leaving is them acknowledging they're about to die, and so they don't wanna leave, and they keep coming up with reasons why they should stay. The political system rewards incumbency, and so we need mandatory retirement ages and term limits.
- KSKara Swisher
Well, can I... One of the things that's been interesting about, besides the social media stuff, which some of it is very funny, some of the fake things, it's, it's been a very, it's been a very amusing, uh, people doing things around McConnell. And actually, um, I was with Joanna Coles and, uh, Ben Sherwood last night at dinner, and they were saying the McConnell stuff really is popular. [chuckles] Like, and I was surprised. I thought it would be all Trump or whatever, but McConnell stuff is really popular on this, on The Daily Beast. Um, but what's interesting is some things that I think are more serious, where people are going, "Okay, I had a cesarean, and I had to get back to work in five seconds." Like, you know, "I had, I was out for a medical thing, and my work didn't let me." And I think even if it's, like, kind of, like, that to me is actually very resonant, is like, he gets to be quiet. He has a, one of the most important jobs in the country, and he gets as much time off as he wants, and he doesn't have to explain himself. I have, like, a minor me- a thing that requires a lot of medical attention, and I've gotta get back to work. There is something brewing. It's like the data centers. I feel like there's sort of this anger, like, "Why does this guy get to be, get, get the, get the, get to be, have privacy when I have to get back to work immediately?" I've seen a ton of that lately.
- SGScott Galloway
Mitch McConnell is, is another empty vessel for, for rage, and it's, it... People look-- I think the most secretive thing in the world right now would be if, if all of a sudden everyone over the age of 70 had, had to announce their retirement. Would the world be a better place? Benjamin Netanyahu and Donald Trump are too old to be serving. They're too old. And yeah, you, you, you need wisdom, but more than that, you need rigorous critical thinking and energy, and also you need a fresh, creative dynamism. The, the best thing, in my opinion, that the s- the far left that we talk a lot about, they are bringing the creativity and the dynamism. You need that. You need turnover. And i-i-it's the same-- This is, this is why I think we're gonna win the, the, the seat in Maine. Uh, or when I say "we," Democrats. I think people see, are gonna see... At some point, Susan Mc- Susan McConnell seems to be, like, hiding in Mitch McConnell's-
- KSKara Swisher
Susan McConnell [chuckles]
- SGScott Galloway
... hospital bathroom.
- KSKara Swisher
It's not Susan McConnell. [laughs]
- SGScott Galloway
I'm sorry.
- KSKara Swisher
Susan Collins.
- SGScott Galloway
Susan Collins.
- KSKara Swisher
You can call her Susan McConnell. [laughs]
- SGScott Galloway
Might as well, might as well be Susan McConnell. I get the sense she's in the room next door.
- KSKara Swisher
Yeah.
- SGScott Galloway
I mean, she's not-
- KSKara Swisher
Yeah.
- SGScott Galloway
She's an old lady.
- KSKara Swisher
Yeah, she's an old lady.
- SGScott Galloway
And she presents as even older.
- KSKara Swisher
Yeah.
- SGScott Galloway
And aging comes for all of us.
- KSKara Swisher
Yeah, I agree.
- SGScott Galloway
It comes for all of us.
- KSKara Swisher
I agree.
- SGScott Galloway
That's not, it's not an indictment, it's a reality, and I think that's why we're gonna win the seat. We found a guy with chest hair who doesn't appear to be a rapist, and he's not 105.
- KSKara Swisher
Yeah. [laughs]
- SGScott Galloway
Ding, ding, ding, ding, ding. And-
- 54:17 – 59:20
Predictions
- KSKara Swisher
[swish] Okay, Scott, let's hear a prediction and try not to [chuckles] make an insult to Mark Zuckerberg if you can. [chuckles]
- SGScott Galloway
It's really... Yeah, no, this, it's totally inappropriate what I've been saying. My prediction is that this ridiculous notion that, uh, one of the most corrupt organizations is gonna get financing from a crime family, the Trump family, to take FIFA private And or turn it into a public company. This won't happen, or it's gonna get watered down-
- KSKara Swisher
Oh?
- SGScott Galloway
... beyond recognition, and here's why.
- KSKara Swisher
Okay.
- SGScott Galloway
UEFA, which is-
- KSKara Swisher
It's a $20 billion dollar, it's a t- i-i-it's $20 billion company.
- SGScott Galloway
UEFA's already fi-fired an opening shot, and they have, and they effectively have veto power. I'm not, I'm, I'm not just saying this because of what I wanna see happening. I think just if you look at the industrial logic here or the mechanics, this isn't gonna happen. The bottom line is the World Cup is not FIFA's to sell. And, and UEFA, the governing body, has already said, "None of us are, are the owners of football." That's not a press release. That's the body that controls the Champions League, FIFA's most credible commercial threat, declaring war on day one. And there's also a precedent. In 2018, Infantino tried the exact move with SoftBank's Saudi money at $25 billion, uh, and UEFA killed it because they saw it as a threat to their own prize assets. So this is the same playbook, same opponent, and same likely outcome. He's, you know, he's already tried this, and he's O for one in the exact same context.
- KSKara Swisher
Right.
- SGScott Galloway
And 211 members have to say yes.
- KSKara Swisher
Yeah.
- SGScott Galloway
And FIFA's already trying to buy their votes with cash, not consensus. Uh, you know, uh, uh, the, the-- and also the Kushner connection makes this whole thing radioactive, just not, you know, not just controversial. Kushner is even less popular. Have you seen what's happened at this Albanian island that Ivanka decided was just magical?
- KSKara Swisher
Yep, yep.
- SGScott Galloway
Um-
- KSKara Swisher
Yes, I did
- SGScott Galloway
... so Trump's s-
- KSKara Swisher
Yeah, the Albanians are not having it.
- SGScott Galloway
Trump's-
- KSKara Swisher
They're not having it
- SGScott Galloway
... son-in-law running the money side of the World Cup right after Trump and Infantino stood together at the final after Infantino gave him a peace prize. It's a conflict of interest story that writes itself for every journalist and every rival federation looking for a reason to vote no. Um, anyways, this isn't, uh, uh, FIFA doesn't need the money. This gets re- this gets rebranded-
- KSKara Swisher
By the way, it's Josh Ku-Kushner's investment vehicle.
- SGScott Galloway
Right.
- KSKara Swisher
It's Josh's-
- SGScott Galloway
If someone's gonna finance it. Uh, look.
- KSKara Swisher
Yeah.
- SGScott Galloway
They're trying to monetize what is this global asset of goodwill.
- KSKara Swisher
They are separate, just so you're aware. They're separate. But go ahead.
- SGScott Galloway
So anyways, my prediction, this thing gets rebranded or negotiated or shrunk to a much smaller Kushner optic scrub version before September 19th because Infantino keeps proposing commercialization deals that die the moment a rival, um, confederation smells a threat to its own assets. There are competing assets here. Uh, so he'll probably get some increased member payouts. He won't get kind of a privatized World Cup. The soccer-- You wanna talk about an asset that the world believes they have a vested ownership in?
- KSKara Swisher
Everybody does, yeah.
- SGScott Galloway
So I just-
Episode duration: 59:20
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Transcript of episode 0cDd5tPdTJ4
