EVERY SPOKEN WORD
15 min read · 3,259 words- 0:00 – 0:56
Truth Social briefly tops X in valuation amid extreme stock swings
- KSKara Swisher
Former president's, uh, Trump's Truth Social was briefly worth more than Elon Musk's X, which has been declining in value as we've talked about before. Truth Social parent company was shortly valued over $10 billion, while X Holdings is valued at $9.4 billion, and that's probably being generous. Uh, the Trump media stock was briefly halted several times this week for moving so sharply. It's gone up and down, really is interesting. I, there's a lot of weird movement in this stock. I'd love to really actually see the transactions. Meanwhile, the parent company lost more than $16 million in the quarter ending June, and, uh, doesn't have very many, uh, people on it, which of course this is not about, it's, it's fundamental business issues. However, on Wednesday, Trump, this, the shares, Trump Social lost 1.3, Trump himself lost $1.3 billion in net worth after the worst trading day ever, for the, uh, for the company. We do disagree on why this is happening. I think there's a lot of gaming going on here, and I would love to see the logs (overlapping conversation)
- SGScott Galloway
But, say more about what you mean by that.
- 0:56 – 1:49
Is DJT price action “gamed”? Kara’s manipulation hypothesis
- KSKara Swisher
Well, if you're someone who wants to support Trump, like, th- these poli markets, everyone's like, "Oh, Peter Thiel owns it." Like, people... and it turned out there was one trade in France from one guy, uh, you know, that made, made it go up. So, we're all like, "Oh, Trump's winning," but he's not because one guy did it, right? And so, I worry this stock is being manipulated by, uh, uh, Trump-adjacent people, and who knows who they could be, to make it go up and down. I don't think this is a bunch of, like, uh, maybe it's Wall Street gaming the situation? Um, it feels very gamed, like, on some level the way it's gone up, because, uh, uh, getting away from the fundamentals of this company, which both of us absolutely agree is a piece of shit, right? It's a shit sandwich inside a shit, you know, pie, whatever. Um, it s- it seems unusual that this is happening. I don't think it's popular sentiment. It's some other sentiment. And you think differently. You think differently.
- 1:49 – 2:24
Scott’s counter-theory: signals, momentum, and even reverse-psych manipulation
- SGScott Galloway
It's an interesting thesis, and that is that if, if a stock or a poll indicates that Trump is likely to win, that it gives people confidence or incentive or momentum on the Trump side. And then I've also heard a counter theory, and that is it's being manipulated by a Dem- a wealthy Democrat who wants to give Republican voters a sense it's in the bag such that people stay on the couch.
- KSKara Swisher
Oh, interesting.
- SGScott Galloway
I can see-
- KSKara Swisher
Oh, I didn't hear that one. That's fascinating.
- SGScott Galloway
Yeah, that was my friend Whitney Tilson who sends out a really thoughtful email almost every day.
- KSKara Swisher
Hmm.
- 2:24 – 2:54
What election betting markets are—and what Polymarket is currently pricing
- SGScott Galloway
Um, I can see someone manipulating... Well, let me back up. This is what I think is going on. Poli Market, uh, Calsha is that what it's called? Cal- uh, anyways, there's a bunch of 'em, um, that are basically wagering sites where you can bet on, amongst other things, every state, you can bet on margin of victory, and you can bet on the election. And right now on Poli Market, it has, uh, Trump at 62, approximately 62 or 63,
- 2:54 – 3:20
Demographics drive odds: who uses betting sites skews the market
- SGScott Galloway
and Harris at 37 or 38%. That is, that is a wide margin. And I think the logical thesis, or the most obvious one and kind of Occam's razor, I think the one that probably is correct, is that the kind of person that goes to a site and bets on an election is probably younger, probably more male, and those people skew heavily Trump. I mean, the majority of the data across the A+ list polling sites says that it's pretty much a toss-up.
- KSKara Swisher
Mm-hmm. Right.
- 3:20 – 4:18
Asymmetric upside: why betting on the underpriced candidate can be rational
- SGScott Galloway
And so, if you are a betting person, uh, I mean, I'm actually thinking of doing this just for fun, uh, I might put some money on Harris on, uh, uh, Poli Market because this is what it means. If you bet $100 on Harris and she wins, you get approximately $287 or almost triple your money. And if someone said to you, "Kara, bet on this coin flip," and you don't know, and I would describe the election right now as, uh, from just the data I see, trying to be un- as unemotional as possible, as a coin flip, but if someone said to you, "Kara, you bet $100," and you pick-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
...heads or tails, and if you win, you get $287, you would do that because it's asymmetric upside.
- KSKara Swisher
Absolutely.
- SGScott Galloway
So...
- KSKara Swisher
In fact, let's do it. Let's do it.
- SGScott Galloway
Well, that's-
- KSKara Swisher
This makes sense.
- SGScott Galloway
... actually what I'm thinking because not that I'm-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
I'm hopeful, but I'm not that confident. I think it's literally a coin flip, but if on a coin flip you're getting, you're getting-
- KSKara Swisher
Three times.
- SGScott Galloway
...$287-
- KSKara Swisher
Yeah.
- SGScott Galloway
...then again, you have disproportionate upside. So-
- KSKara Swisher
Mm-hmm.
- 4:18 – 5:34
Analogy to sports betting: public bias can create mispriced lines
- SGScott Galloway
I think the thesis that these markets are driven by who bets which way or the other, the most obvious explanation is that the people... It's like, I, uh, do you remember when Floyd Mayweather fought Conor McGregor, the, uh, the-
- KSKara Swisher
I do not.
- SGScott Galloway
Anyways, this UFC fighter, this whiter than white guy, red hair-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
...Irish guy, who's actually not that great an MMA fighter, he's just very-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
...loud and obnoxious, fought-
- KSKara Swisher
Oh, that guy. He was in the movie with, with, uh, he, he did the Swayze, anyway, yes, I know who he is, yeah.
- SGScott Galloway
Well, anyways, and he fought Floyd Mayweather, who arguably has the fastest hands in the history of boxing, but the odds were much tighter because I think, uh, I think people still like the idea. I think there's some unconscious races- racism where people like the idea of the white guy beating up or, or winning the, uh, you know, the, oh, beating the Black guy. There's always, throughout the history of boxing, there's always a little bit of a bias for the white guy, the great white hope, so to speak. And the best bet or the easiest bet was on Floyd Mayweather fighting an okay MMA fighter (laughs) that had never boxed before. Anyway-
- KSKara Swisher
Did he lose?
- SGScott Galloway
My point is-
- KSKara Swisher
Did he-
- SGScott Galloway
...you're getting asymmetric upside. To the notion of-
- KSKara Swisher
Who won that thing? I don't even know.
- SGScott Galloway
Oh, Floyd-
- KSKara Swisher
Floyd Mayweather.
- SGScott Galloway
To Conor McGregor's credit, he fought-
- KSKara Swisher
Yeah.
- SGScott Galloway
...a competent fight, but Floyd Mayweather-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
...abs- dominated-
- KSKara Swisher
Yeah.
- 5:34 – 5:54
Stock vs betting markets: Scott doubts DJT stock is a meaningful election signal
- SGScott Galloway
...and, and, and won as he should have. But the thing that I don't think is being manipulated for Trump's favor is the stock, because the stock has, the stock was almost at 100-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
...a couple years ago. It's been as low as 12. So I don't know if that's sending signals into the marketplace.
- KSKara Swisher
Why not? Why couldn't one or 10... L- listen to this. This is an interesting-
- SGScott Galloway
Right.
- 5:54 – 6:24
Kara cites investigation alleging wash trading in Polymarket volumes
- KSKara Swisher
Fortune had a really interesting investigation. "In separate investigations completed by the blockchain firms Chaos Labs and Inca Digital, and shared exclusively with Fortune, analysts found that poly market activity exhibited signs of wash trading, a form of market manipulation where shares are bought and sold often simultaneously and repeatedly to create a false impression of volume of activity. Chaos Labs found that wash trading consisted, constituted around one-third of trading volume in Poli Market's presidential market, while Inca Digital found that a significant portion of the volume on the market could be attributed to potential wash trading."
- 6:24 – 8:04
Practical takeaways: making a small bet, shorting risks, and the unresolved stock-manipulation question
- KSKara Swisher
Um, uh, the, the other ones, um-... you know, they're looking at those too. I think you could do the same thing with this, with this stuff. Very little needs to trade to make it go up, and if you wanted... I, I was intrigued by the Democratic thing, make them feel confident and then, you know... Put $100 for each of us on that. Will you do that? Will you do that, and I'll, I'll owe ya?
- SGScott Galloway
Uh, uh, hun- uh, 100%.
- KSKara Swisher
Okay.
- SGScott Galloway
I might, I might do a little bit more than that. But anyways, I buy the thesis around the polls because... around the, the betting sites, 'cause a lot of media reports on the betting sites. And when the media reports that according to Polymarket or Kalshie (phonetic) that Trump is almost two-to-one favored, that sends a signal that's probably, on the whole, good for the Trump campa- campaign. Where the stock is, I don't think does much around a signal or confidence or lack thereof. I don't, I don't think it creates much of a echo effect in favor of one candidate or the other. I-
- KSKara Swisher
I would short that stock like nobody's business. Does it... Well, you wouldn't, like... Well, it could just rise. Yeah, you could... No, it could rise.
- SGScott Galloway
You gotta be very careful shorting a-
- KSKara Swisher
Careful.
- SGScott Galloway
... stock like that because-
- KSKara Swisher
Yeah.
- SGScott Galloway
... if he wins-
- KSKara Swisher
It's a meme stock. It's a meme stock.
- SGScott Galloway
Well, if, if... there's a scenario where it goes to 100 bucks on November the 6th.
- KSKara Swisher
Yeah, yeah.
- SGScott Galloway
And you, you know, the, the dangerous thing about short selling is your, your losses-
- KSKara Swisher
Yeah.
- SGScott Galloway
... are unlimited.
- KSKara Swisher
Yeah. Yeah, that's true.
- SGScott Galloway
Um, anyways, but I, I guess what I'm saying is I absolutely buy your thesis around manipulating and the incentive around manipulating the betting markets.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
I'm not sure I see the connection to the incentive-
- KSKara Swisher
Oh, I do.
- SGScott Galloway
... around manipulating the stock.
- KSKara Swisher
One, two. It doesn't need that many. I'd at least love to see it. I'd like to actually see the trading. Anyway, we'll see what happens, uh, when we go forward.
Episode duration: 8:04
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