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This podcast is supported by Apollo Global Management. Ensuring a brighter, bolder future means investing in tomorrow, today. That's why Apollo is financing solutions to some of the world's most complex challenges. Apollo's customized capital solutions for businesses help drive innovation and growth, powering a more resilient future. Apollo. Investing in tomorrow, today. Learn more at apollo. Com. Bloomberg Audio Studios.


Podcasts, radio, news.


Hello, and welcome to the MoneyStuff podcast, your weekly podcast, where we talk about stuff related to money. I'm Matt Levie. I write the MoneyStuff column for Bloomberg Opinion.


And I'm Katie Greifeld. I'm a reporter for Bloomberg News and an anchor for Bloomberg television.


It's the best day of our lives.


It is the best day of our lives, which happens every day on Fridays. We have a lot to talk about today. We have to talk about Elon Musk, of course.


We had a whole week without Elon Musk, I I know.


It was weird that we didn't get to it in the first week. So we'll talk about Elon Musk and that pay package, 56 billion dollars, and of course, his issues with Delaware. We're also going to talk about Jane Street versus Millennium. You just published on this.


By the time you heard this podcast, I will have published on it roughly 24 hours ago. We're recording it shortly after I published on it.


It's Thursday right now, and Matt published 20 minutes ago, so this is the one I'm least prepared for. We're also going to talk about Hunterbrook, the hedge fund that's also a newspaper, question mark.




Before we get into this week's Topics, it's our second episode.


It's our second episode. We got a lot of feedback on the first episode.


We got a lot of feedback. A lot of it was about- All of it, almost. Commenting that I made about the Doped Olympics. Surprise, they already exist and they're funded by Peter Thiel.


Well, they don't exist. They're launching.


Yeah, the idea is out there, the enhanced games that would have no drug testing. So if you didn't want do performance-enhancing drugs. You could still enter, you would just lose.


Yes. Or you could do the regular Olympics, which will still have drug testing.


Yeah, and you'll probably still lose.


I wonder if, presumably day one, the best athletes will still do the regular Olympics. I wonder how long it'll take for the enhanced Olympics to have faster times and higher jumps? It's a great question. Because if you're the 10th best track athlete and you do a lot of drugs, are you better than the best?


Probably. Probably, yeah. Probably. There's only one way to find out.


So the- Peter Thiel is going to do it.


These games need to happen. The event roster includes individual sports such as athletics, meaning track and field, aquatics, gymnastics, strength, and combat. I would watch these.


But what we don't have on that list, Katie- Is dressage. Is dressage.


No dope dressage. For the uninitiated, dressage is horse dancing, effectively. Just go on YouTube, look it up. It's a ridiculous sport that for better or worse, I partake in. I'm not sure if when I enter the enhanced games, which I will, whether I take the drugs, the horse takes the drugs, do we both take the drugs?


I think you both take the drugs. Have you or your horse ever been offered drugs? Has there ever been a controversy at your dressage?


We're not that good, maybe in higher levels of the sport. But what we're doing. It's very loosely dressage. Let's talk about the topic.


Moving red along.


Moving gracefully along.




Elon Musk. The big news this week is that Tesla came out with their proxy statement. Two items of interest. They're going to ask shareholders to vote again on that 2018 pay package of 56 billion dollars that was voided by a Delaware judge. And related to that, they're going to vote on whether to move Tesla's state of incorporation from Delaware to Texas. What do you want to start with?


They're interrelated. Yes. He got paid a giant stack of options in 2018. Everyone says they're worth 56 billion dollars. Whatever. They're worth like $40 billion. 56 billion is just like a conventional number that people attach to it because It goes up and down with the stock. But right now, it's worth $40 billion. And a judge took him away in January. He said that was too much to pay him, and it wasn't properly approved by the shareholders. And so they're going back to the shareholders to, one, get it properly approved, and two, never have to deal with the Delaware judge again because they're going to move to Texas.


Like you said, these are two intimately related issues. But sticking with the pay package, which everyone is saying is 56 billion dollars, maybe it's $40 billion, but the vote is in June. Are they going to approve it again, these shareholders?


I think so. The proxy quits a lot of letters from individual shareholders saying how much they love Elon Musk and how they're going to approve it. Also, by the way, letters from T. Rob Price, big shareholders, too. It's interesting. If you were a shareholder in 2021 or even December of last year, I think you would say this pay package was worth it. In 2018, they said, We're going to pay Elon Musk 56 billion dollars if he takes the market cap of Tesla from $60 billion to $650 billion. At the time, that seemed like a real stretch goal. Then he did it really quickly. So all the shareholders got rich. They made a lot of money on Tesla. I think they felt a real sense of gratitude. I think very few shareholders were complaining about his pay package, but one did. There was one, yes. I think the shareholders were happy with it. But now, if you go back to them and say, You want to approve it again? They can be like, We already got whatever he did. He did the stuff that made it a $650 billion company. If we can get those past efforts for free, why shouldn't they They get it for free?


They feel grateful, but do they feel $56 billion dollars grateful? But that said, if you're a Tesla shareholder at this point, you're playing a longer game. Rightly or wrongly, I think Tesla shareholders assume that Elon Musk and his continued affection are essentially to the value of Tesla stock. If they vote down this pay package, will he quit in a huff? Maybe. He's got a lot going on. He's got a lot of distractions. So he could quit in a huff. Although his mercurial stewardship has not been great for the stock price in the last couple of years, he quits in a huff that's going to tank the stock, I think.


Yeah. I mean, the stock's already down 40% year to date.


It's been a rough ride, but still, I think they want him there. It's not like if they vote this down, he'll come back and be like, Okay, fine. Can you give me $2 billion? I think if they vote this down, he's going to be really mad. I guess I have two related points to that.


To what you're saying, what is the key man risk to Tesla? How much does Tesla need Elon Musk at this point is something I think about all the time. This is an established company at this point.


No, I agree with that. It's an established company. It could probably operate on its own. It's not like the stock has been continuing to go out from strength to strength. It's been a rough time. I do think that there's probably still a valuation premium for Elon Musk, and I think it's a somewhat retail-heavy stock. There are a lot of people who like Elon Musk in this stock, and I think if he were to leave, that would be bad. But I'm not sure of that in the way that I might have been in 2021. I also think, by the way, whatever your economic calculation, I do think that some of the shareholders, at are like, We agreed to pay him these options. We voted on it. A court, in a weird technical opinion, struck that down, and we don't think that's fair. We think it's bad for corporate democracy and also bad for fairness to Elon Musk, and so we're going to give him that 56 billion dollars back anyway. I think there's probably some of that going on among some of the shareholders, including some of the institutional shareholders.


Even if this is approved, will it just get voided again? How does this work if they approve it again?


It's a fascinating question. I think, and Tesla thinks, the answer is that if they approve it again, this time it'll stick, right? Because what happened last time is they approved it and the judge found that the shareholders were not fully informed of all the conflicts of interest involved in setting his pay package. Now, they're fully informed, in part because Tesla went back and gave disclosures, but also they just attached the judge's opinion to the proxy statement to be like, Anything that the judge found bad, here, you can read it, right? I think they have to be fully informed. There's no problem with the vote, but the law on this is not super clear. They say in the proxy statement, We're not totally sure what the effect of this will be. I think there's some argument that the disgruntled shareholder can sue again, and the judge again gets to decide if the pay package is fair, and we know she thinks it isn't, so it might get struck down again. But the other thing I want to say is that I don't know what the disgruntled shareholder is. There's a guy named Richard Torneda. I don't know what he thinks.


I don't know if he wants to do this again. But you know who cares? His lawyers who, when they won in the Delaware Court, and they struck down this 56 billion dollar pay package, they went to the court and they said, We want 5.6 billion dollars worth of Tesla stock as a fee for this win. Their theory is, We saved shareholders all this money by clawing back this 56 billion dollars from Elon Musk. If the shareholders give Elon Musk the 56 billion dollars back, they haven't gotten the fee yet. It's still in court. If they give them the money back, what is their argument that they save the shareholders any money? They've got a lot of money riding on the argument that Musk's compensation actually got cloud back, so they care.


Yeah. Let's talk about the second part of what happened, Texas. Are they going to run into this problem again in Texas? Moving to Texas, what does that do for Tesla?


They say that moving to Texas makes sense because their big factory is in Texas, their headquarters in Texas, Elon lives in Texas, and so they have to move their incorporation to Texas because that just makes sense. No other company thinks that. That's not really a thing. Every is incorporated in Delaware, and very few are located in Delaware. But it's what they say. The answer is nobody knows. There's a lot of Delaware corporate law, and there's not a lot of corporate law anywhere else because most big companies that have big lawsuits are incorporated in Delaware, and so that's where all the cases are. Tesla says in its proxy that they think the law in Texas is mostly the same as the law in Delaware. I think it's probably true. But everyone assumes that if this had all in Texas and if a shareholder had sued Elon Musk in Texas to get back the $56 billion, a Texas judge would have been like, No, Elon Musk can keep that money. There's no basis for assuming that. Nobody knows. It just seems that way. Clearly, Elon Musk assumes it because as soon as the Deloitte opinion came out, he's like, We're moving to Texas.


By the way, that happened. The opinion came out and he was like, We're moving to Texas right away. He was saying it on Twitter. But Tesla now, in its proxy statement, has to explain why it's moving to Texas. It describes this very thorough process that it did to evaluate moving to Texas. It formed a special committee of independent directors. There's one person on the committee.


Was his name Elon Musk?


No, it's a truly independent director. Her name is Kathleen Wilson Thompson. The special committee met 16 times for more than 26 hours, says the proxy, which is a fun thing to imagine. I first imagined it as I met four hours today with the MoneyStuff Committee. I was typing on my computer and I was like, Oh, there's a meeting. But in fact, she met with her lawyer. Oh, So there were real meetings, but she was the only director at the meetings. But the committee evaluated all 50 states to decide. It was like throwing darts being like, Which state should we move to? It just so happens that the best state turned out to be Texas. Coincidentally, the same thing that Elon Musk was tweeting about two months ago.


It's beautiful. It worked out nicely for him. Yeah, it's good that it turned out that way.


By the way, you asked if the laws move with them. I wrote this before. There's some small chance of a Delaware judge saying, No, you're not allowed to move to Texas because you're only moving to Texas to pay Elon Musk more. Which seems reasonable. That is a violation of your fiduciary deduces to your Delaware shareholder, so we're going to stop you. I wrote that in January. I thought that was some extremely funny theoretical There's a critical chance of that happening. Since then, there's been a Delaware Court decision that makes it less likely. I don't think that's going to happen, but it would be really funny.


I have one point, and I also have a question. I guess I'll start with the point, and that is that there is a human psychology component to this, because I remember when this happened in January, that it was voided, this pay package. My suggestion to Elon Musk would be, why don't you just have Tesla do a dividend? Mark Zuckerberg did that with Metta. Now he's going to make $700 million a year. Mark Zuckerberg obviously owns a lot more Metta share, so it makes more sense there. But you made the point to me that Elon Musk isn't trying to make normal, extremely wealthy man money. He has insane aspirations that he needs all this money for.


He owns a minority of Tesla. He's controlling share all the money. He owns 20% of the stock. So a dividend would go mostly to other people. And they're not so rolling in cash. They could pay out tens of billions of dollars of dividends. Mark Zuckerberg gets a dividend because he likes to go water skiing or whatever it is that he does, right? Hoverboarding.


He has cows, right?


Cows, archery, I don't know, all sorts of hobbies. Normal things. Like, moderately expensive hobbies, some of them. But Elon Musk's hobbies are like brain implants, going to Mars, buying Twitter. I'm forgetting a few, but he's not looking to spend money on a nice vacation. He's looking to have tens of billions of dollars to fund going to Mars. And so he needs these giant pay packages every now and then to pursue his next ambition.


You're not going to get that from your dividend checks. And then my question for you is, what do you think is the most interesting way that this proxy vote could turn out? What would be the most interesting chain of events for you?


Look, I love the idea of a Delaware Court preventing Musk from leaving for Texas. I think that would be extremely funny. But I actually think the simpler answer is funnier, which is if the shareholders vote this down, that's wild. He'll quit it off on Twitter that day. It'll be an amazing thread of tweets, and it will be an amazing corporate debacle. Whatever time he's devoting to Tesla, he'll go and devote to some other wild thing, and that'll be wild. And Tesla will find its way. It'll get back that $50 billion and find its way as a company not controlled by It would be a wild sequence of events.


That, in my mind, would be the most interesting scenario as well. Then we could truly find out what the Elon Musk premium is.


The thing about Elon Musk companies is that if you're an investor in Elon Musk companies, you like Elon Musk. That's just how it goes. You're not there because you like the assets but think they're mismanaged. You're there because you like Elon Musk. It would be really shocking for the investors in an Elon Musk company to vote against them in such a striking way.


Do you want to talk about Elon Musk for 25 more minutes, or do you think we should move on?


I saw your look of like, I have wrapped this up so nicely, and then Matt comes in with more stuff. I have some more stuff, but I'm going to wrap it up. Never mind.


Stay tuned.


Stay tuned. There's always more Elon.


This podcast is supported by Apollo Global Management. When it comes to building and financing stronger businesses, Apollo turns some of the world's most complex next challenges into growth opportunities. Apollo's customized capital solutions help drive innovation and growth, turning the great businesses of today into leaders of tomorrow. As one of the world's largest alternative asset managers, Apollo is helping to fuel the real economy by generating investment-grade credit, helping to fill gaps in America's financial ecosystem, and providing greater access to more resilient and diverse pools of capital. By providing companies with access to flexible financing solutions and partnering with management teams to help grow their businesses, Apollo is there every step of the way to drive positive outcomes for companies and power economic growth. Apollo. Investing in tomorrow, today. Learn more at apollo. Com/privateinvestmentgrade.


Katie, you were so impatient to get to James Street.


James Street, yeah. I don't really know why. Not that it's not super interesting, on your string. Set the scene for us. What's going on?


I wanted to talk about this because Jane Street sued Millennium. Two Jane Street traders left Jane Street. They went to Millenium, and Jane Street thinks they took a complicated secret trade with them and are now making money for a millennium at the expense of Jane Street, and so they sued. I wanted to talk about it because the complaint is public, but it's heavily redacted because Jane Street is like, We have this secret trading strategy that's being ruined by someone else copying it. They don't want to say what the the G is, right? But they have to say what it is. They just have to black it out in the publicly filed version. So I want to read the complaint and all the peeps.


Go for it. Okay.


I'm not really going to read the whole complaint. But they did a trading investigation. They had this idea and they tested it out. And the results confirmed Jane Street's initial findings, notwithstanding their facial improbability, and revealed that the market was beep for certain classes of trades in the presence of specific market signals in underlying conditions. Probably we could have a podcast producer put a real beep over that, but I think I think I did a pretty good beep.


Yeah, no, that definitely was a beep.


Anyway, so yeah, they have this trade.


We don't know what it is. I want to know what it is.


But what we know about it is one, it makes money, like reliably for some number of months, at least. Two, it's weird. They really emphasize that it's weird. It's facial improbability. They say that it was counterintuitive, unexpected, and initially met with significant skepticism and incredulity internally at Jane Street. It's really tantalizing. They're like, We found this trade that you would not believe. It's so crazy. They discovered it in the data, and they all sat around and being like, This can't be real. And then they tested it for a year. And like, Oh, wow, it's real.


This is silly, but reading about it and reading that line specifically made me think of Rudolf the red-nosed Reindier, how everyone made fun of him. And then his nose actually lit up and illuminated the night sky. And they were like, Wow, this works. It's a similar situation. Something else. In the In the Bloomberg news article, apparently, Jain Street saw evidence that one of the traders who left in February, he was using the strategy. They figured it out because Jain Street said that its profits from using the strategy fell by 50% in March. A drop, it said, could only be attributable to, the entrance of a competitor using the same strategy. What is this trade?


It's apparently a trade where there's capacity to make, I don't know, I'm going to make up a number, make a million dollars a day. And Jane Street was doing it, making a million dollars a day. And then Millennium starts doing it. Now, they each make half a million dollars a day, right?


Yeah, because it's not like they lost money because someone else started doing it. They're not the only person in this market anymore, whatever this market is.


It's some options market, it seems clear. It's like some options trade. Rumor is that it's not in the United States, but I don't know where it is.


How does this work? Are we ever going to find out what the trade is or is it just a secret?


I'm going to keep asking people. One of my favorite things about this complaint is that one of these traders leaves Jane Street for millennium, and the complaint mentions how much money he's getting. Because they're making the point He's getting paid so much money. It can't be just because... He's like, Whatever experience, whatever skill. He wouldn't be making that much money. He's getting paid that much money because he's bringing this Jane Street trade to millennium.


So he told people how much he's making. Yeah.


The complaint says, Based on conversations between Shadrwold and his colleagues at Jane Street, his compensation for Millenium,. They don't know. He told his friends at Jane Street, and then Jane Street asked his friends how much he was making. They're like, Oh, man, he's getting. And then they put that thing complaint.


I can't I can't imagine telling people so casually what I make, especially if it's a lot of money.


I can. Really? He's leaving a financial firm for another financial firm, and he goes out to drinks with his friends, and they're like, Oh, man, what are they giving you? And he's like, Beep. That's why he's leaving, right? This is a very mercenary business. I don't know.


He should have just bought a huge apartment and let that speak for itself. That is how much I'm making.


Oh, he hadn't made it yet. I feel like the day up, he's like, Oh, my, look at how much money I'm making. I also love the best possible amount of money to make is beep, right? A number so big that they can't publicize it.


That is pretty amazing. I guess, yeah, the two things I want to know, what the trade are, how much this guy was making. Also, is this an unforester error by Jane Street, which doesn't have non-competes? Could this all have been avoided had they had a non-compet?


There are really two different things, right? There's a non-compet, which usually it's time limited. You can't go to another firm for six months, a year, two years. Yes, I I think that would avoid that here because what's it going to be like in a year? It seems unlikely. I don't know what the strategy is, but it seems unlikely Jane Street will still be making a lot of money on the strategy in a year because someone will notice it somehow. Alpha gets competed away all over the place. Whatever this weird counterintuitive strategy is, probably it'll decay.


I have an idea.




Maybe it's... This is half a joke. This is a joke, actually. Closed-end fund arbitrage.


Oh, man, you love closed-end fund arbitrage. I'm thinking it's not that. But right, so if you have a non-compet, and the guy goes and sits on a beach for a year, and then he When he comes back, whatever he knew a year ago is just not valuable anymore. It's not as valuable. That solves the problem. Now, it doesn't always solve every problem because you have a confidentiality agreement about IP because there's some stuff that has value longer term. If you really know how Jain Street systems work, there's some chance that two years from now you could sell that to someone and it would be valuable to them. Jain Street does not have non-competes, but they have confidentiality agreements that say you can't use what you learn here somewhere else. They say in the complaint, well, it's typical for people to take some time off between firms. This guy didn't. It's not typical. It's not like people just feel like taking some time off. Tired. Yeah, I would, but a lot of people don't. It's typical because usually firms have non-competes that require them to take time off. And he didn't. And so the impression from the complaint is that he had a real time-sensitive trade.


And he's like, I got to start the next day to make as much money as I can from this trade.


And that's what he did.


Allegedly. I don't know. I think it's interesting because the non-competes is a really good solution because it's clear. You know that whatever the time period is, let's say it's a year, you know you can't go work for a competing firm for a year, and then after that, you can. What's interesting here is Jane Street is arguing that these guys stole their intellectual property. As of Thursday, Thursday, we don't have Milandium's response, but I assume their response will be something like, No, we didn't. We didn't steal their intellectual property. But there's this wide overlap where if you work at a financial firm doing closed-end fund arbitrage, and then you leave, and you go to another financial firm, and you're like, I'm going to do closed-end fund arbitration.


I'm going to find closed-end funds with huge discounts.


You're not going to forget everything you learned at the first firm. There's some amount of just general skills and knowledge building and just market experience that everyone understands is portable and goes with you. If you download the code from your first firm, that's bad. But a lot of stuff, it's like the general experiences that you have at one firm are going to inform what you do at the next firm. It's, I think, hard to tease out, which is which sometimes, which is why gardening leave is such a good solution because it's like you do nothing for a year. Then after that, it's like we don't have to worry about it. Here, Jain Street makes it sound like this is a very complicated, very counterintuitive and weird trade that is their secret sauce. But what if it's just noticing that the prices of some options are too low and clicking on them? Then it's weird to say you have to forget that you noticed that when you moved to another firm.


My heart always hurts when I'm in a conversation about gardening leave because I've never been on gardening leave. I will never be on gardening leave. It sounds idyllic.


When I left investment banking for Dealbreaker, the great Wall Street Comedy blog, I had, I want to say, three months of gardening leave. Sounds great. What did you do? I sat on my couch being terrified. I regret it so much. I really wasted my gardening leave because I was like, I have made this huge career change. I'm getting paid so much less money. This is around the time that Goldman had that programmer who stole code. They had him prosecuted for stealing code, and he went to jail for a while. I spent some of my time thinking, Goldman's going to kill me. Eventually, my last week of gardening leave, I talked to a Goldman PR person. He's like, No, this is great. We're excited for you. Nice. I was like, Why was I so worried? But in any case, I spent my gardening leave being nervous and not partying.


Oh, I hate that. Yeah.


It's really a shame. I did get to experience gardening leave once, but I didn't get to really enjoy it.


Gardening leave wasn't that great?


This podcast is supported by Apollo Global Management. When it comes to building and financing stronger businesses, Apollo turns some of the world's most complex challenges into growth opportunities. Apollo's customized capital solutions help drive innovation and growth, turning the great businesses of today into leaders of tomorrow. As one of the world's largest alternative asset managers, Apollo is helping to fuel the real economy by generating investment-grade credit, helping to fill gaps in America's financial ecosystem, and providing greater access to more resilient and diverse pools of capital. By providing companies with access to flexible financing solutions and partnering with management teams to help grow their businesses, Apollo is there every step of the way to drive positive outcomes for companies and power economic growth. Apollo. Investing in tomorrow, today. Learn more apollo. Com/privateinvestmentgrade.


Take a big sip of water. Let's get into Hunterbrook. This is a meaty one.


Hunterbrook? It's a hedge fund. That's a newspaper. That's also a newspaper.


Yeah. This is something you and I have talked about a lot.


Yes, in our private conversations.


In our private conversations. Maybe explain what Hunterbrook is, and we're pronouncing it with vowels.


Yes. The thing is called Hunterbrook. Their website is Hunterbrook. That's H-N-T-R-B-R-K. Hunterbrook is... I don't know how to describe it. I say it's a hedge fund that's also a newspaper. Sometimes I think it's a activist short hedge fund that is very good at getting me to pay attention to it.


I don't know if I've seen it anywhere else, but maybe I'm just not looking at the right places.


Who's in the FTE? No, Hunterbrook is a media organization that It is like investigative reporting around the world to find interesting news. It funds its reporters by... They take their scoops and they give them to its affiliate a hedge fund. If the hedge fund is like, This is a market moving scoop, then they trade on it, and then they publish the scoop, and then the stock goes up or down or whatever it's about, the market moves. Then the hedge fund makes money, and it gives some of the money to the reporters to pay for the continued reporting. It's not a typical journalistic business model. True. All journalistic business models involve some conflicts of interest. True. Possibly. It maybe involves a little bit more conflict of interest. Because your incentive is to make your story as market moving as possible. If you find some bad stuff about a company, and then also you find some good stuff about the company, and also it's not that bad, and there's some mitigating factors, you're tempted to just be like, This is the This is the worst company in the world, or this is the best company in the world because you want to move the stock price as much as possible.


It is a conflict in that regard.


I guess the part that feels strange to me is that the hedge fund sees it first before it's published.


That's the whole part. I know. There's no other part. That's how they make money.


Well, in terms of how they report things out, they don't talk to insiders. They can't talk to insiders.


If you're a regular journalist at a regular journalistic publication, you can call an insider at a company and be like, Hey, is it doing fraud? If the insider is like, Yes, it's doing fraud. Here are some secret documents proving it. You're like, Oh, my God, this is a great scoop, right? But if you're Hunter Book and you do that, then you're like, Oh, no, this is inside information. We can't trade on it. They try to stay away from inside information and rely on published sources.


Let's talk about what Hunter Book has done so far. They officially début in early April, I believe. Their first article was on United Wholesale Mortgage. Now they've come out with another splashy report that you wrote about. I'm impressed, honestly, by the volume so far because there's a lot of work that goes into investigative journalism of this degree.


Also into activist short selling, the well-known activist short selling funds. Every so often, they'll put up a short report, but it's not like a daily news meeting to figure out what's going to go on the website. A editorial meeting. Hunter Week is somewhere in between. My question when they launched was, what's it going to look like on the second day? Because the first day, it launches this big investigation. The second day, is that bumped down the feed so they can do more local news? The answer was no. It It looks like a short seller's website where it's like that big report is on top for a week or so. But now it looks a little bit more like a news organization where they've had two big stories in the sense of short investigations this week, but there's a spinoff story for one of them. It's like, There's a lot of stuff. One of the One of their stories this week was an oil company that has been telling investors it's going to reopen a drilling platform and Hunterbrook thinks they're not. It's just a very straightforward small short bet. It's like this company is going to have a little bit worse news than the market expects.


They traded on that. I don't know. That almost feels like something a hedge fund analyst would come up with and trade on and not bother to publish because it's just not that interesting a news story. But the other one they had was about Pasca, the big Korean steel company and conglomerate, doing a lot of work with very unpleasant military junta in Myanmar. That one, they didn't trade on. They said, They did this big investigation, and they said, We're not trading on this. I was curious why, and I think the two leading answers are, one, that it might that market moving, which is like, you can think of that as being a depressing story of complicity and human rights abuses actually doesn't matter to shareholders.


Cold embrace of capitalism.


Or you can be like, one reader emailed me to be like, Pasca's involvement in Myanmar has actually been known for a long time. It's been on an ESG exclusion list. It might not be market moving because it's news to you, it's news to many people, it's news to many of your general interest readers, but it may not be news to the market. The other explanation for why they didn't short Pasco that I find much funnier is that South Korea has banned short selling.


That could be it. That sounds maybe like the winner there.


It could honestly be either because it's not like it's huge in market moving news.


I don't know. It just seems like a hard business.




Yes. It's bone crushingly hard. But also short selling is super hard, too, especially in this market. But also there's the question of even if you are right, your thesis is right, there's no guarantee that the stock is going to do what you think it's going to I think that's happened to a lot of short sellers in recent history.


People hate short sellers. Yeah. Is part of it. And in particular, when you talk about recent history, since the meme stock era, if it gets out that you are short of stock, that stock could go to the moon just because people are mad at you. To the point that some number of activist short sellers have gotten out of the business or said they'd get out of the business.


Or just have gone underground.


Gone underground. Because it used to be that if you found a company that you thought was a fraud and you published a report saying a fraud, people would read it. If you were right and convincing, then the stock would go down. Now, if you think a company is a fraud and you publish that report, people on Reddit might say, We have to make that stock go up to punish the evil short seller. So it's just not as worth it. One possible advantage of the Hunter Break business model is to the extent they convince people that they're a media company and not a short seller, you somewhat avoid that instead of being like, Oh, this hedge fund is shorting this stock. Let's make it go up. You're like, Oh, this media company published a report about human rights abuses. That's bad, right? There's some chance of you getting a little bit more of a sympathetic audience.


Well, we'll see if they do take a shot at a stock that has any- It would be amazing if they were like, GameStop, not a very good company. That's what I was going to say. If they come after a company that has any chance of becoming a meme stock, I think about United Wholesale Mortgage, I don't even think Wall Street Bets could get excited about that one. It doesn't have that curb appeal.


That's right. The oil company they went after this week is just because it's a $600 million market cap. You're now playing in territory where Wall Street Bets could have some fun.


Do you want to talk about Elon Musk more?


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I'm Katie Greifel.


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