Can Nvidia Save Intel? Fed Rate Drop Reaction; Zuckerberg’s $600 Billion Bet; $NVDA $INTC $META

Summary

Chit Chat Stocks – September 19, 2025

Episode: Can Nvidia Save Intel? Fed Rate Drop Reaction; Zuckerberg’s $600 Billion Bet; $NVDA $INTC $META
Hosts: Ryan Henderson & Brett Schafer

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Overview

This Power Hour episode of Chit Chat Stocks dives into the rapidly evolving semiconductor landscape, focusing on Nvidia's $5 billion investment in Intel and the broader ramifications for U.S. chip manufacturing. The hosts dissect the U.S. government’s tech strategies, the global reliance on TSMC, and the structural challenges at Intel. The show then pivots to other market-shaping news: Airbnb’s new monetization vectors, Mark Zuckerberg’s headline-grabbing CapEx announcement for Meta, recent Federal Reserve rate changes, and quick takes on emerging small caps and “fraud watch” cases in the market.

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Key Discussion Points

1. Nvidia’s $5 Billion Stake in Intel: A New Era for U.S. Semiconductors?

• [01:30] Brett: Explains Nvidia’s $5B investment in Intel at $23/share, post-announcement stock reaction, and their partnership for data center CPUs.
• [03:08] Ryan: Outlines how the push to break U.S. reliance on TSMC (Taiwan Semiconductor) is the rationale behind these investments:

  “If they cease to exist tomorrow or were cut off... there would be probably a depression, honestly, or at least a massive recession.” ([03:18])

• [05:37] Brett: Suggests Intel split into two entities: chip design and manufacturing. This would create an “ASMC (American Semiconductor Manufacturing Company)” competitor to TSMC.
• [08:39] Brett: Notes Intel burns $10B/year in FCF, needs ~$100B to catch up, and Mag7 firms could easily bankroll this with their a combined $2.2 trillion in cash and $100B in quarterly FCF.
• [10:21] Ryan: Asks if capital alone can make Intel competitive with TSMC, expressing skepticism “Can you just throw money at this for Intel and solve it? I honestly doubt it.”
• [11:04] Brett: Highlights how Intel lags because TSMC bet big on ASML’s EUV lithography, whereas Intel fumbled the opportunity.
• [11:43] Ryan: Concerned that Big Tech may risk TSMC preference if they openly back a U.S. competitor.
• [12:32] Brett: “They gotta try. I mean this is the... There's no—I don't care about any doubts. They have to try this.”
• [13:46] Ryan/Brett: Conclude the U.S. should foster both: TSMC fabs in the U.S. and a revitalized Intel.
• [15:10] A/B: Discuss TSMC’s origins as a national champion and the need for a similar effort in the U.S.
• [16:39] Brett: Intel’s shift post-2022: AI’s preference for GPUs left Intel behind, and its foundry buildout burned cash ($40B+ FCF burnt since 2022).
• [17:23] Ryan/Brett: Financial results for Intel may be overshadowed by these headlines, but the company’s long-term future depends on successful restructuring and outside investment.
• Final Points: Both hosts see a split between Intel’s design and manufacturing as necessary and beneficial, provided new leadership acts boldly.

Notable Quotes

• “TSMC is the supplier and the backbone of most of the big technology players. They can’t supply the chips, then economic growth is going to slow and there will be a stock market crash, I guess.” — Brett [05:37]
• “If you lay with dogs, you might get fleas. When I think pretty much anyone in a business like this where they are day to day operating out of gentleman’s clubs just feels ripe for something illegal to happen, frankly.” — Ryan [60:09]

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2. Airbnb Explores Promoted Listings and New Growth Vectors

• [22:55] Hosts discuss Brian Chesky’s latest conference remarks signaling greater openness to “promoted listings” (ads) on Airbnb.
  • Chesky: “I think promoted listings is really, really interesting… I think with AI, the whole paradigm of an ad has to change.” ([23:12])
• [23:49] Brett: Compares with Expedia/Booking, doubts a negative user experience if done right—sees a path for meaningful ad profits.
• [25:02] A/B: Broader “galaxy brain” ambitions from Chesky: expanding into hotels, experiences, even a social/lifestyle platform, “dozens of verticals.”
• [28:01] Ryan: Skeptical of lack of focus:

  “It felt, honestly, it felt too galaxy brained… If you read it and you just imagined that it was a college kid galaxy-brained and didn’t think it was Brian Chesky, it would read the exact same.” ([26:14])

• [28:01] Chesky’s assertion: “We want to be the first true AI-native application. We'll talk a little bit more about that. ChatGPT is not an AI-native application. It uses AI, but its interface is an interface that would have existed before AI.”
• [29:41] Brett: Cautions patience, compares Chesky’s approach to Amazon’s experiment-heavy model.
• [30:41] Brief portfolio update: Ryan added to Airbnb, both see it as potentially undervalued despite the experiments.

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3. Meta’s $600 Billion Commitment: More Sizzle than Steak?

• [32:16] Zuckerberg’s “$600 billion” investment pledge at a White House dinner sparks confusion.
• [33:10] CFO Susan Lee clarifies this number includes operating expense and CapEx, making it far less dramatic—roughly $60B/year, in line with prior outlays.
• [34:23] Brett:

  “Zuck is learning from Tim Cook, the political master… It's just playing the political game.”

• [35:51] Ryan: Remains neutral on Meta prospects; Meta’s AI plans appear to be progressing, but headline numbers don’t move the investment thesis.

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4. Fed Rate Drop, the Housing Market, and “Bubble Watch”

• [36:30] Hosts reflect on the Fed’s recent rate cut (now just over 4%), muted market response, and macro context.
• [37:26] Ryan: Cites Google Trends showing “help with mortgage” and “credit card help” queries now exceed 2008-crisis levels—a possible stress signal.
• [38:14] Brett: “A little bit. I would not want to be at a point in my life where I'm searching on Google for help with mortgage payment.”
• [39:28] Brett: Mortgage rates dropped slightly (~6.3%), but affordability issues persist; inventory remains a constraint.
• [42:43] Fed policy is increasingly public; minor celebration in market, but both see no fundamental change for long-term investing.

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5. Small Cap of the Week: Freightos Ltd (CRGO)

• [45:10] Ryan: Highlights Freightos, a $160M cap shipping marketplace and data provider:
  • Data subscriptions for global freight benchmarks
  • B2B freight marketplace with rapid volume growth (4x in four years)
  • Gross profit margins improving, business model likened to Booking.com for shipping.
  • Marketplace volume: 89k → ~400k transactions per quarter (2021–2025)
  • Still cash-flow negative but burning less; valuation in the 7x EV/Gross Profit range.
  • On the watchlist for further research.

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6. Fraud Watch: Nikola & RCI Hospitality Scandals

• [53:53] Trevor Milton (ex-Nikola) sees SEC charges dropped after presidential pardon:
  • Milton donated $1.8M to Trump shortly before the election; lawyer is brother of US Attorney General.
  • “There has got to be a rule that you cannot pardon anyone that donates to you… seems so old school, pay the judge type of behavior.” — Ryan ([55:41])
• [56:45] RCI Hospitality (gentlemen’s club rollup) hits headlines for decade-long tax fraud and auditor bribery scandal:
  • Executives “bribed a former DTF auditor… at least 13 complimentary multi day trips to Florida where he was giving up to $5,000 per day for private dances…” ([58:44])
  • Discusses inherent risks of investing in “sketchy” small-caps. Ryan: “If you lay with dogs, you might get fleas… these businesses feel ripe for something illegal to happen, frankly.” ([60:09])
  • Both agree: avoid as an investment, despite post-scandal cheapness.

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7. Quick Hits: Remitly’s Subscription Push

• [62:02] Remitly rolls out “Remitly One” ($9.99/mo) with “Send Now, Pay Later” and a digital wallet, aiming to become a full-featured product for international remittance customers.
• [63:56] Ryan/Brett “like the approach,” see Remitly advancing into Wise’s turf.

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8. Listener Q&A and Other Mentions

• Questions on TikTok’s required US sale (no deep dive this week; Oracle/Silverlake potential buyers)
• Innovative Food Holdings and High Tide: Not discussed in detail but highlighted as potential topics.
• [44:00] Return of “Small Cap of the Week” segment by listener request.

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Notable Moments & Quotes by Timestamp

• [03:18] Ryan: “If [TSMC] cease to exist tomorrow… there would probably be a depression, honestly, or at least a massive recession.”
• [05:37] Brett: “TSMC is the supplier and the backbone of most of the big technology players.”
• [12:32] Brett: “They gotta try… There’s no—I don't care about any doubts. They have to try this.”
• [23:12] Chesky (quoted): “Promoted listings is really, really interesting…AI, the whole paradigm of an ad has to change.”
• [26:14] Ryan: “If you read it and you just imagined that it was a college kid galaxy-brained… it would read the same.”
• [34:23] Brett: “Zuck is learning from Tim Cook... just playing the political game.”
• [38:14] Brett: “I would not want to be at a point in my life where I’m searching on Google for help with mortgage payment.”
• [55:41] Ryan: “There has got to be a rule that you cannot pardon anyone that donates to you…”
• [60:09] Ryan: “If you lay with dogs, you might get fleas… just feels ripe for something illegal to happen, frankly.”

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Tone & Style

• Candid, critical, and occasionally irreverent, with strong opinions about industry leadership, government policy, and the quirks of market news.
• Hosts mix deep-dive investment analysis with personal anecdotes and dry humor.

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TL;DR

Semis: Nvidia’s $5B Intel investment could mark a turning point for U.S. chip independence, but structural overhauls and Big Tech support are needed for Intel to become a credible rival to TSMC.

Tech: Airbnb’s leadership is “big brained” and experimental, but risk of lost focus looms. Meta’s $600B pledge is less dramatic on closer inspection—just CapEx plus OpEx.

Macro: Fed rate drop has limited portfolio impacts; signs of consumer distress are rising (Google searches for “help with mortgage”).

Fraud: Nikola’s Trevor Milton skates thanks to connections; RCI Hospitality exemplifies sketchy small-cap risk.

Small Cap: Freightos emerges as a potentially compelling logistics marketplace with a long runway, but further vetting needed.

Remitly: Making a foray into subscription services and digital wallets, competing more directly with Wise.

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For more detail, see the full Chit Chat Stocks Power Hour replay or check their newsletter for in-depth analysis.

Transcript

[A]

Welcome to the Chit Chat Stocks podcast, a podcast that helps you discover your next great investment. I am one of your hosts, Ryan Henderson, and I am joined as always by the one and only Brett Schaefer. Today's our weekly Power Hour episode and we've got plenty of topics to discuss. We have a lot of bubble watch topics, some some concerning search statistics. We have Nvidia taking a big stake in another notable semiconductor company, intel. And then we have a number of conferences that had some good dialogue out of it. So meta Airbnb remitly all with some big announcements. So we're going to go through all of that and more. But before we do, I want to mention please if you are listening to this show for the first time, follow us on Spotify or Apple so that you never miss an episode or wherever you get your podcasts. And if you enjoy these episodes, please continue us a review. That's the best way to help out this show. Brett, welcome in what are you most excited to talk about today? We got a full content slate.

[B]

Well, we're going to talk about later how you don't want to take your auditor to the gentleman's club. There are some conflicts of interest there. Interesting story and bit of egg in our face as we did have an executive in that story come on the podcast before, but I'll leave that as a tease. Do you want to talk is Nvidia intel and this growing interconnected semiconductor space?

[A]

Yeah, so I actually I left. I purposely did not read about it. I wanted to let your your take on it inform any of my beliefs. So go ahead, go through the news. What exactly happened? And it's kind of funny that this came at a time when a lot of people were writing about the potential need for a TSMC of America. But anyways, let's go through it. What, what all is happening here?

[B]

Sure, yeah. And I did write a newsletter about this, some more ideas around how this could be funded. And what's weird is that the timing on I had no association with this investment. I had no idea it was going to go down. But it happened right after I published it. So maybe, you know, great minds think alike or I don't know if there's great minds here, but we'll go through it. Let's see the numbers. Let's just go what exactly is happening before we talk about any opinions on what should happen from here. So Nvidia is investing $5 billion into intel at about $23 per share. After the announcement, stock is up 2 and maybe we can check the exact price here, but it was up at $32 as of. I wrote that earlier this morning. I'm sure it's at about the same. Yeah, about $30 as of this recording. Maybe it'll drop a bit. And they're also partnering with intel for data center CPU solutions. And that's it, really. They're investing a bunch of money and get a partner on chip development. First of all, Ryan, for you. Does this deal make sense? What were your initial thoughts seeing this headline?

[A]

So here is what I think appears to be happening. And this has kind of been a take from Mostly Borrowed Ideas and the Liberty newsletter and even your writings this weekend as well. I think there's a clear focus from both our government and major tech companies on one of the biggest risks that's out there, which is Taiwan Semiconductor is critical to basically the entire global economy today. They. If they cease to exist tomorrow or were cut off from the supply chain, supply chain for American companies, there would be probably a depression, honestly, or at least a massive recession. So I think there's a focus from all these companies to get decreased reliance on the production coming out of Taiwan. And it seems like the way that that's happening. And not only companies, but the US Government, because we saw their investment as well. It seems like the way they're doing that is trying to make Intel a formidable competitor. And we saw the investment from the US government. We've now seen a $5 billion investment from Nvidia. Do I think this deal makes sense? Maybe it. I still worry when I think about Intel. I think about frankly, like bloat. It's hard for a large company who. Who's kind of on the wrong side of the innovator's dilemma where they've got the foundry and the chip design all combined into one company. There's just conflicts of interest, potentially improper incentives relative to a pure fabrication facility like tsmc. We've seen that play out over the last two decades. I worry that this is not something we can just throw money at or companies cannot just throw money at. But when I think about the options out there, this might like. If you're comparing this to starting your own foundry from scratch, this might be the right solution. Do. Am I thinking about that right? Or do you think that's kind of maybe extrapolating this too far?

[B]

What, what. What part?

[A]

Big Tech basically using this as like the alternative to Taiwan Semiconductor.

[B]

Oh, yeah, for sure. I mean, they're supposed to be using them. They already are customers of them. And just to simplify things. TSMC is the supplier and the backbone of most of the big technology players. If you go through the largest companies by market cap, even the meg7, and then you add in Oracle, Broadcom and then even some of their suppliers like asml, Applied Materials, Lam Research, there's other parts of the supply chain, the other direction, they are the backbone of those businesses. They can't supply the chips, then economic growth is going to slow and there will be a stock market crash, I guess. But on its whole, like in a vacuum, you don't want to have one supplier of advanced chips. But the fact that it's also in Taiwan means that there is and should be an urgency to get some diversification out there. And the problem is over the last five years, intel has just fallen further and further behind. So I like this investment. It doesn't really make sense from the fact that Nvidia and Intel are technically competing with each other to sell chips to people. So what I think makes sense is going even further. I laid out this in detail in the newsletter. You can check it out. It's for free. It's called, I think what is or what would American Semiconductor Manufacturing Company look Like? Just playing off of the Taiwan semiconductor name. Here's what I think should happen. Intel should split out its chip design business and chip manufacturing business as two different publicly traded stocks. This would eliminate conflict of interest and make them a direct competitor of tsmc so they wouldn't be competing with their customers, with the manufacturing foundry. And then they'd also be able to separate the chip design, separate the factory and maybe run a little bit leaner, a little bit quicker. Now, most of their current $150 billion in market value and market capitalization would probably go to the chip design firm. I think shareholders would do just fine here. I mean, AMD does the same amount as gross profit as intel and trades at a $250 billion market cap. I know that's not a perfect apples to apples comparison, but I think that just to show there is some value still there in Intel's chip business and the manufacturing split would be funded by investments like Nvidia and like these other Mag7 customers that are reliant on TSMC and would want one more supplier or even more out there. We call it asmc American Semiconductor Manufacturing Company. I had some fun making some crazy charts from our friends at Fiscal AI to illustrate how easy it would be to spin off this without government intervention. I think what's best is again, no government meddling here, no government taking a stake it's much better to have the actual companies investing in this, to be economically incentivized, to have, you know, a win, win, win scenario for everyone at play here. If we look at Intel's free cash flow and the charts, maybe I can share them, but they're going to be hard to see. I would check out the newsletter to look at them. Exactly.

[A]

I just shared them.

[B]

It'll be hard to see here if I share them. Excuse me, Ryan.

[A]

I just shared the charts.

[B]

Yeah, it's just hard to see. So if anyone can't see that, which I doubt, they can just check them out in the newsletter. So intel burns $10 billion in free cash flow a year. They're likely going to have to burn probably $100 billion or more to catch up to TSMC. Their current balance sheet does not have the capacity to deal with this. So they're gonna have to raise money and from someone. I hope it's not just the US government. If we look at MEG7 plus any semiconductor players, I included a list of Apple, Alphabet, Microsoft, Nvidia, Amazon, Meta Platforms, Broadcom, Tesla, Oracle and asml. And you can probably include some others in there if you want. They have as of this writing and excluding marketable securities, 2,200 billion dollars in cash on their balance sheets. And combined they do close to $100 billion in free cash flow. Not yearly, every quarter. And this is while they're in a capex super cycle to build out their AI data center. So funding a quote ASMC, American semiconductor manufacturing company spin from intel with $100 billion in debt, equity, whatever financing you'd want to do would be easy for them. My only question is why aren't they doing this? I hope. Well, I don't think anyone at meg7 is listening to us. Maybe there are a few, but I know there are some listening to stratetury reading that you know the flagship technology and business newsletter out there, or at least I would call it the flagship technology and business newsletter. They've talked about this plenty of times. Hopefully there's inspiration here and the companies can come together and make this happen.

[A]

Here's my question to you. Does so say you do get a big investment from all of big tech? Say you get them splitting off the foundry business and the design firm intel does. Maybe you even get government subsidies, whatever it is, you get some sort of government tax incentive. Is that enough? Can, can that allow them to catch up to Taiwan Semiconductor? Is it is the problem?

[B]

Why not?

[A]

I don't know, honestly. Is there a logistical advantage Is there, you know, two decades of being ahead of the curve for Taiwan Semiconductor?

[B]

Is that an advantage that they've been ahead of the curve for two decades? One decade, five years really the problem is that TSMC bet on EUV from asml. Intel doubted EUV even though they actually did this whole thing with ASML back in the day and invested into ASML to make sure they could fund EUV and have the research pipeline and basically the Runway to spend all this money. They doubted euv. They TSMC got them first, they mastered the machines and now they're ahead. So they realized their mistake. Intel's been far behind and they've been slow moving because they were cocky with their dominant position in data centers.

[A]

So two things. First off, why. Why doesn't Big Tech do this? Well, I think one reason is they don't want to lose their position or their relationship with Taiwan Semiconductor at the moment. And if they think that doing this would compromise that in any way, the might be some reluctance there. Second, what I'm saying is, okay, let's say it's been five years they of of a lead and they have been iterating on that lead and making changes throughout their manufacturing facilities in Taiwan to continuously optimize. Can that just disappear by throwing money at the problem? Can you just throw money at this for intel and solve it? I honestly doubt it.

[B]

Oh, they got to try. I mean this is the.

[A]

Sure.

[B]

There's no. I don't care about any doubts. They have to try this. And people talk about me in the comments here. Creating a TSMC US subsidiary. They're basically doing that already. But the key is diversified supply chains not centered on Taiwan, the geopolitical football. Yet TSMC can build factories in the United States. And regards to the customer base, Apple and Nvidia can do what they want. TSMC will still take their orders. They're not gonna just exclude them.

[A]

No, but I think they get preference over other customers, which they maybe wouldn't.

[B]

If I still think they would. I mean who's gonna replace them? Samsung? They make their own chips. Google Pixel maybe? Maybe Google Pixel plus TPUs? Eh, possibly. But who's gonna that? Nvidia and Apple maybe Broadcom. Nvidia and Apple are a huge percentage of TSMC's business. Nvidia is a huge and growing percentage of TSMC's business. They have the power here to do what they want.

[A]

Would it make more sense for.

[B]

Us.

[A]

To take or us as in the United States and Big Tech as a whole? I'm kind of lumping all that in the U.S. economy. Would it be more beneficial to have Taiwan Semiconductor try to basically replicate themselves in the States or to try to build Taiwan Semiconductor through Intel?

[B]

Do both. Do both. It's clearly. This is clearly the answer. We've been. We being the media investor base, technology people, the government have been talking about this for years now. Just do it. Stop talking and do it. It's very frustrating to just see nothing happen and then the US government taking a. Basically a fake investment because they just took back the CHIPS Grant act and then diluted shareholders. Not sure the exact details on the shareholder dilution on that yet, but seemed pretty stark. Um, and it's never great to have to have the government take a stake in something. It would be so much simpler to have the magnificent seven companies just invest. Maybe not all of them can invest $10 billion. Maybe some can go larger, some can go smaller, but funding this would be a blip on their cash flow. It compares. It's nothing in comparison to what they're funding. OpenAI and anthropic.

[A]

How was Taiwan Semiconductor started? It was started, wasn't it? Sort of a coalition of investments from companies in Taiwan.

[B]

Plus the government is backed by the Taiwanese government. Yeah, it was planned to be the national champion. It.

[A]

How would you feel if you're an intel shareholder today? Optimistic.

[B]

I feel good. Yeah.

[A]

Would it make more sense to just use American defense military to help Taiwan if.

[B]

I mean, we've spent hundreds of billions of dollars doing that? That's a different question.

[A]

Safety valve to have the production here in the States.

[B]

But I mean, that's a whole different question. Yeah, the.

[A]

You're saying do all of it?

[B]

Well, they've been protecting Taiwan for decades. I mean that's, that's not a. That's an entirely different topic.

[A]

So why now? Why, why is everyone talking about this now?

[B]

Because China says they're going to invade Taiwan.

[A]

But haven't they been saying that for five years?

[B]

Yeah, well, they could do it.

[A]

It seems like it was kind of out of the blue that not only the government took a stake this year, Nvidia took a stake this year. And everyone seems to be backing intel now. As we need you, we need you. Like, where was this two years ago?

[B]

Well, two. Okay, two things has happened. One, intel was on the wrong path for AI. AI was. It's a GPU thing, not a CPU thing. That's why Nvidia's dominated and Intel's fallen further behind and losing rapidly their data center market share. Second is the fact that they're trying to build their own foundry and if we look at that free cash flow chart maybe I can just read out the numbers. I don't know if we can get probably can't do the mental math cumulatively here but negative 9 billion probably negative 12 billion the number's not showing up. And then negative 16 billion and then negative 7 billion over the last 12 months. That's the last. That's since 2022. That's what's changed.

[A]

Do Intel's financials matter at all over the next year? Honestly?

[B]

Yeah, sure.

[A]

Like for the stock. Do you think the stock will trade based on financial results over the next year?

[B]

Yeah, probably. Yeah. Yeah.

[A]

I feel like it's just trading on headlines. The sure, sure.

[B]

I mean this is more important than the financials next quarter but we they haven't secured any funding so they do need to still keep working on this turnaround. They have the new CEO there that seems really sharp. I think he's from Broadcom. It might be Qualcomm. I get those two confused every time I look at them. But it is the right move I think. And let's see even if they get split up here at a today $143 billion market cap they get heavily diluted by new investments or debt gets added to the balance sheet. I think they win over the long term especially because you get both the design firm that could do its own thing they could even go to Taiwan Semiconductor or Samsung or other players and then you could also get the manufacturing company.

[A]

The focus for everyone is the manufacturing side though, right? Like I mean they could just spin off the design firm and no one's going to care about the design firm the focus from everyone else.

[B]

Well from geopolitically sure, but the design firm this the same thing happened with AMD don't know how long ago but they split off their manufacturing company and it's now global foundries and all the value is in their design firm. I think that's more the fact that tsmc, Samsung and Intel were dominating the manufacturing space and then you know, intel has fallen behind. But.

[A]

So what's hold up Honestly, here's what I don't understand. It seems like a no brainer in my opinion and I think geopolitically as well to split the two. Everyone that has done that has succeeded. Right. AMD was a spin off of whatever they were the design Taiwan Semiconductor went full focus on fabs. Huge success. My concern would be that the executives at intel are too afraid to make that decision or feel that they don't actually have the authority to do it or that they can somehow get removed for doing it. Whatever it is. It seems like it's been a no brainer for a while and no one has made that decision.

[B]

Maybe the new CEO will do it. I, I'm not in these meetings. I don't know what's going on but perhaps they're talking about it right now. The old CEO didn't seem to want to do it but they just got this new guy in here. He could be the one that, that makes it happen.

[A]

We did say that if we, if we went back to the old, well maybe specifically this, but if we went back to our old episodes when they intel hired their last CEO. I remember us saying this could be the right guy.

[B]

Yeah, we don't know. We don't know that. I think that was before the AI stuff and I, I think today their hand is getting forced because they're just burning money. You can do what you want when, I mean look at that chart. Before they were just printing money before, let's see. Yeah, I mean 10 to 20 billion dollars in free cash flow a year. True. Now they're burning $10 billion in free cash flow a year. That beggars can't be choosers. That is true in that situation. Yeah.

[A]

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[B]

Yeah, he loves talking about a new age. It's ads, dude.

[A]

I Yes. I so three years ago, two years ago, Cesky was like, yeah, we could do promoted listings if we want, but we're not gonna. That's too easy to do. Now he's a little more open minded to. First question for you is, do you think there's any decline in a user experience by having promoted listings.

[B]

On Airbnb? If they do it the right way? No, I know they have those on Expedia and booking. I don't think that's what's limiting the user experience versus Airbnb, where Airbnb is a much better app to use. And that's just my anecdotal evidence. But I don't. And booking and Expedia do have those and I don't know if that's the issue. What I kind of think about is they lock in the users, they lock in the host, the hosts are relying on them for the product. Will they announce ads tomorrow, a year from now, or five years from now? I'm not sure. But I know that embedded pricing power is there and the bigger their payment volume that flows through the platform is which I think today is closing it on. $100 billion. There's probably room for about 1 to 5% that turn into advertising revenue. That could be pure profit going to the bottom line.

[A]

Yeah, it's for me, I've never felt a huge decline in the user experience because a marketplace rolls out promoted listings. I still use Amazon, I still use Google, which is technically sort of promoted listings.

[B]

That's the thing.

[A]

Yeah, it doesn't bother me that much.

[B]

Yeah, you just have to do it the right way, not be spamm. I mean, think of what type of advertisements annoy you. I bet this the same as me. It's when you are researching for your work or this podcast and you put up a news article and it just spams you with four ads and the website won't work.

[A]

Yeah, when Google Adsense that the ones where it's actual display ads, those bother me. When it's promoted listings, I think that's one of the most natural fits for an actual promotion. But I do want to talk about this conference overall. I don't know if you got a chance to read it, but Cesky called out a ton of growth vectors. He talked about Airbnb introducing hotels. He talked about the international expansion. He talked about Airbnb for experiences, Airbnb for services, Airbnb for there was even like a social media type of thing.

[B]

Did you mention hotels?

[A]

Yes, I mentioned hotels. He said that. He was basically saying that Airbnb, the core infrastructure, is like extensible to everything in a way. He said there's dozens of verticals that we're looking at.

[B]

Oh boy.

[A]

And I just, it felt, honestly, it felt too galaxy brained for me. It felt like a lack of focus. And if there are parts, there are parts of this conference call where if you read it and you just imagined that it was like a college kid galaxy brained and didn't think it was Brian Chesky, it would read the exact same. It felt very, I don't know, too far fetched. And I think you'll see what I mean if you haven't read it already. But he just there. Even as a shareholder, my biggest worry here is, is just a lack of focus.

[B]

Yeah, I haven't, I haven't read it. You covered it. Other people have covered it. I'd say Mostly Borrowed Ideas is a good newsletter that did a summary on it. So I kind of felt like he was going to cover it well enough. So I kind of just relied on him. Didn't want to. Didn't want to read it all. I agree that he's big brain, but I think the magic of the company, at least over the Long term has been the fact that he has these crazy ideas and then he has a team around him that reigns it in and optimizes for products that are actually going to work. And sometimes you need that. Right?

[A]

Yeah, I'm looking, I'm trying to find. There was one quote where I was just like, someone needs to cut him off the. Because there was the. Even the host, you know, they're kind of at a loss for words when they just say okay and then they ask their next question.

[B]

Yeah, it's true. They go, okay, moving on.

[A]

The other thing he kept saying is we want to be the first true AI native application.

[B]

Yeah, yeah.

[A]

See, look, what does that mean? And he, he, he also was like chachi. Okay, here's a quote. I found it. Our vision is to go from a short term rental platform to a platform for everything you, everything you need to travel and live around the world. Not just travel, but travel and live. I think this could involve dozens of businesses that we can expand to. We want to be the first true AI native application. We'll talk a little bit more about that. ChatGPT is not an AI native application. It uses AI, but its interface is an interface that would have existed before AI. What we're doing is putting we've created the jet engine, we haven't created the airplane yet. We want to create one of the first true AI native interfaces built to support these strong models. It's. It feels like such a lack of focus.

[B]

Yeah, well, the numbers are good.

[A]

Like their business is great.

[B]

Sure. Yeah.

[A]

But these things, these ventures do cost money.

[B]

I think they said they spent $200 million building them. There's a blip now. It's going to be a waste if they don't execute. But the beauty of the marketplace business model is you just have to scale up both sides and your unit economics should be profitable right away.

[A]

A little different if you have to approve every listing. But yeah, the sort of but it should. It, it's just there are still network effects there. It. Yeah, I guess we'll see. We should timestamp this though and two years from now ask where our experiences and services at.

[B]

Services. Yeah. Hey look, they're going to throw some stuff at the wall. Some of it might work, some of my not. But their track record of taking share is really high. And we had a question here that says what do you think of the current Airbnb valuation? As I talked about on our Wednesday show, which was our portfolio update, we went through a whole each of our personal portfolios and talked about our Best Buys now. I had Airbnb on the Best buys now list and I did add today as of this recording on Thursday. So I do think the valuation is fairly cheap. Given their margin potential expansion, I'd rather. What. What did. What do we learn from David Gardner? Top dog, first mover, been away in the past. They dominate their industry and they have a rule breaker CEO. I'm going to keep holding. Yeah.

[A]

There's a couple comments here in the chat. He says in quotes, we have a thousand software engineers and we need them to do something. Simon says this could so easily be a margin expansion story and Chesky doesn't want to reel it in. It does.

[B]

Stay patient. Stay patient. Are you trying to earn your returns tomorrow? Just stay patient.

[A]

Yes, I agree, but I think I would rather have them instead of lofting money at experiences and services and the social media thing and hotels all at the same time, I'd rather have them focus some of that money or more of that money on international marketing. They talk about international like, I feel like they can tackle fewer markets at once and be better off in the long run, but I guess we'll see. I'm timestamping this so two years. We can look back two years?

[B]

20. Yeah, let's. Let's do it. I think if I had to make a bet, I would say that experiences and services aren't going to work, but they're experimental company. Look, the comparisons to Amazon. People compare stuff to Amazon and it's usually unfair. But Amazon has a lot of experiments, makes a lot of mistakes. It's burned a ton of money and it's still up a thousand X in the last 25 years.

[A]

For 20, 30 years, Airbnb's core marketplace earns them the right and affords them the luxury to take chances. Let's talk about this. This is really isn't that long of a segment, but mark Zuckerberg's $600 billion bet. So.

[B]

The awkward moment at the White House dinner slash chamath was there slash praising the president. Weird thing.

[A]

Yeah. So a couple weeks ago at a dinner with US President Donald Trump, Mark Zuckerberg announced that Meadow would be investing $600 billion in the US by 2028. That sounded insane to pretty much everyone listening. There was actually sort of a hot mic situation where Zuckerberg asked Trump, which number do you want me to say? Like, he wasn't really sure what to say and he said 600 billion. Well, at a conference this week, CFO Susan Lee, who seems very pragmatic and it feels like she often has to walk back Zuckerberg's comments.

[B]

This is what Chesky has. Remember, Zuckerberg's just crazy, but keep going.

[A]

And so she added some additional context that that $600 billion figure includes all the CapEx and operating expenses in the US which makes things far more palatable. So mostly broad ideas backed into some assumptions here that basically given the current expectations for operating expenses, this basically comes out to $60 billion a year in CapEx between 2025 and 2028, which right now they've spent over 52 billion in the last 12 months. So really not that crazy at all. Actually seems almost light given that they've talked so much about their capex plans. And Susan Lee also mentioned that META remains committed to operating profit growth over the long run. So I guess my question to you is, has Zuckerberg just got really good at playing the attention game or does this does contextualizing it with operating expenses are included in that investment range give you any more interest in investing in Meta?

[B]

Now increased, even the operating expensing, increased capital expenditures does not make me more interested in investing in Meta when I think we are getting to a risky period on AI monetization outside of OpenAI and Alphabet. But that's a different story in regards to Zuck. He is learning from our friends at Apple, Tim Cook, the political master who came out with a press release a month ago, I think actually I just had it loaded up. August 6, 2025. Here's the headline. Apple increases US investment commitment to $600 billion and announces the American Manufacturing program. And what do you know, it's just adding up their operating expenses plan and capital expenditures plan. So this is the same thing as Tim Cook. I think he's just going to that point. Zuckerberg just wanted to give out the biggest number as possible to go with that Tim Cook playing field. Because if Amazon did this or Microsoft or probably Alphabet as well, they get their odd an even larger number. It's just playing the political game. Tim Cook has been extremely good at that and I think Zuckerberg's just trying to level the playing field here. Although since he seems to hate Apple, I wish he would have said like $601 billion just so. Just so he is a little bit bigger.

[A]

Yeah, I'm not any more or less interested in investing in Meta. I do think they've done a phenomenal job. From everything that I've seen on that, they had a good AI like internal report that was released about some of the monetization efforts that they do with advertising and how businesses are. They make it honestly like a seamless experience to go from I need new customers to what's it take? And usually Facebook kind of well, Meta holds their hand in the process. I think I want to shift gears a little bit here and talk about the mortgage payment searches.

[B]

Did you that to the Fed too? The Fed, the interest rates as well?

[A]

Yeah, yeah. Maybe this is what the Fed saw. This is Jerome Powell saw that tweet this morning.

[B]

We had a question on the TikTok sale. We didn't research that this week. So if there's anything regarding that, we'll probably hit it next week.

[A]

But Ryan, hasn't that been going on for like three years?

[B]

I think there's a quote unquote new development. Technically the president is in violation of the law by not ban, by not shutting it down. It's supposed to be shut down yesterday. So we're really in legal gray areas here. But I guess Oracle, from what I've read, Oracle, Silverlake, Andersen, Horowitz and others are going to purchase 90% of it for the listeners. We don't have the research this week. If there's something on that, we'll talk about it next week. But what is this bubble watch you found for me?

[A]

So Poly market, which is I think a lot of people know this by now, but it's like a betting it's the world's largest predictions market had a post this week that searches for the term help with mortgage have surpassed the 2008 crisis according to Google Search Trends. There was some other ones as well. Like credit card help was car payment help. I didn't see the car payment one, but there was credit card help that surpassed 2008 as well. So on the one hand this is just Google search trend interest. But does this worry you at all?

[B]

A little bit. I would not want to be at a point in my life where I'm searching on Google help with mortgage payment. Sorry for anyone that has that, but I think that probably means you're in a tougher financial situation than you would like to be. Maybe we can use this to talk about our as Peter lynch should say, the 10 minutes. Too much of economic and macroeconomic talk that just wastes your time. Famous quote that he had. Mortgage rates are coming down. It hit 6.3%.

[A]

Wait, mortgage rates are not that low.

[B]

Like the affordability is still off the charts. It needs to go down to like 4% and have some price depreciation to make things affordable for people, right?

[A]

Yes. But I think the likelihood of getting mortgage rate declines and price declines seem in, in conjunction with one another seems low. Unless you get inventory unlock.

[B]

Inventory unlock. That could be it, sure.

[A]

Yes. But I suspect some of that needs to come from an increase in new builds as well, right?

[B]

Yeah, exactly, exactly. But either way those mortgages didn't fall that much. If we look at the Fed stuff, they dropped the fed funds rate to a little over 4%. It's like a range. So we've gone from 0%, 2021, 5.33%, 2020, late 2022, early 2023, held it there for a while. Now we're going back down to 4%. What does this mean? Well, the stock market's just gone up the whole time. No, actually there was that bear, the, the bear market in 2022. But I don't think that was really to do with interest rates. It was because of inflation. Now at the same time inflation has re accelerated to 3% which I think is being under discussed. We're not at the 2% level. There is risk from tariffs there and some other things including commodity prices. Unemployment rate has ticked higher to just over 4%. But we're really not at an abnormal figure here. So inflation is growing, unemployment probably not at a bad spot. It's right where it was around 2014 and 2018. And what's interesting is that the treasury bond market seems to price in the fed funds rate drop way before it happens because the 10 year treasury bond actually rose slightly to 4.1% on the news. What were your thoughts on this and does this affect your investing at all?

[A]

This does not affect my investing at all. I was a little surprised that there wasn't a better reaction from some of the companies in my portfolio. Dr. Horton is one of the largest home builders in America. There was not a big jump in the price. It sounds like maybe this was underwhelming to some investors expectations they were expecting maybe a larger drop. But no, it doesn't change much for me. I do. A while back I read that book Trillion Dollar Triage. I can't remember his name, the author, but one of the nick some Greek last name but he's a Wall Street Journal author I believe or journalist. And it was basically about how Jerome Powell navigated the COVID pandemic environment with all the political pressure that was going on as well. And at one point in there he did mention that Jerome Powell had an anonymous Twitter account. So I do picture Powell scrolling Fintwit and seeing the poly market help with mortgage search interest at an all time high, before he goes out there for these Fed meetings, I just, I. It's got to be hilarious for him when he goes, when he sees data like that.

[B]

Sure, yeah. They probably have just, they probably have just as good as data or better for sure. If you're him though, you just want to get out of there. You got all these people on the, I think it's called the board of Governors. The people that work with him are basically making these. They're saying they want, you know, lowered interest rates. They're saying I voted for this. Or my projection is 4 more lowered interest rates this year, which would be quite an aggressive drop. But they're just doing that because they want to be the next nominee. So it's a whole thing. I feel like he just wants to wait out the clock here, get out in March and retire and move to the Cayman Islands or something. What else do we want to talk about, Ryan? Because I thought this, the Fed funds thing was a nothing burger. The only thing I'm kind of worried about would be an inflation reacceleration which could affect a lot of basically everyone's portfolio.

[A]

Yeah. Question for you. Do you think Jerome Powell is the most public Fed chair of all time? Like the most forced into the limelight Fed chair of all time?

[B]

Forced. Maybe. There's been a multi decade trend and again, I wasn't there. This is just from reading the history. There's been a multi decade trend of the Fed becoming more public, doing media appearances, doing press conferences, trying to be more open with the public as opposed to just dropping interest rates. And then everyone in the whole world can react. But I don't know if he's the most, I would say Greenspan was the biggest media celebrity kind of during the late 90s, early 2000s.

[A]

Yeah, yeah, I guess wasn't really around for that. But that is a more recognizable name, I imagine, to a lot of people, at least that were investing around that time. Do we want to do our small cap of the week?

[B]

Sure. Bringing back a new segment. You have a company here, interesting name. Fredos. Fredos limited.

[A]

Yeah.

[B]

What do they do? All right, folks, before we move on, we need to tell you where we get our financial data. Fiscal AI. Fiscal AI is the complete stock research platform for fundamental investors. I, I use the platform pretty much every single day. You'll see the charts on our podcast and you'll see it in our newsletter. This is our one stop shop for stock research. They've got up to 20 years of financial data on all companies globally, including company specific segment and KPI data. That means Amazon AWS revenue, SoFi's total members, Google's paid clicks, growth and literally millions of more data points. They've also got earnings call transcripts, ownership data, company specific research reports and much more. If you want complete financial data at your fingertips, then you need to check out fiscal AI. And if you use our link fiscal AI chitchat, you will get 15% off any paid plan. Again, that is fiscal AI chitchat. The link will be in the show notes.

[A]

So I haven't done a small cap of the week in a long time. So I apologize to people that like that segment and tune in for it. But I've got one this week because someone reached out and asked me to start doing them again and I think I actually found a pretty compelling one. So the company, as Brett mentioned, is Freightos Ltd. Ticker is CRGO, decent ticker cargo. You'll see what they do here in a second. It's a $160 million market cap company that went public through a de SPAC in early 2023. Now early 2023, let's go back to our market history here. That was not a good time to be a de SPAC. That was actually interest, was terrible interest in de SPACs and really new offerings in general. Shipping had also just gone through a major struggle if we remember lapping Covid, there was difficult times for the shipping industry so freightos was also losing a ton of money and then the SPAC bubble had burst as well. So no one really cared about them. But they were able to raise about $50 million through the transaction which helped them stay afloat. And what do they do? Freightos is this is a quote from a Vic write up. It says freightos is best known as a data solution provider offering live pricing data for key trading lanes globally. They're most famous for the freightos Baltic Index fbx, a key benchmark for global freight pricing. So there's basically two elements to the business here. They have a subscription segment where companies like importers, exporters, like industry participants, so carriers, stuff like that will pay for access to their data, that that freightos Baltic Index type of thing and other data as well. Or there's big investment firms as you might imagine, that like to track the shipping market and they subscribe as well. The second part of their business is a freight marketplace. This is a B2B platform that connects airlines, ocean liners and trucking companies with freight forwarders and shippers. The reason I Think this might actually be interesting is it seems like. Well for one the data subscription business seems easy to manage and if you're just primarily offering data as access to data, that's a pretty simple business to run and should be able to grow if you have relevant data points. But the marketplace seems to be growing and there could be a legitimate network effect here. So transactions across the marketplace have grown from. In 2021 there is 89,000 roughly transactions per quarter.

[B]

So they're almost like, it's like almost like a stock exchange. Now the analogy would fit there trying to figure out the business model.

[A]

Yes, I think they, they compare it more to like a booking dot com.

[B]

Okay, yeah, okay so marketplace but yeah, yeah.

[A]

And it's grown at basically from 89,000 transactions on the marketplace to near 400,000 this quarter. So I don't know what the CAGR is there but it's basically 4x over the last four years. So quote, quote from that Vic write up. He says most competitors focus on specific verticals. This is talking about the marketplace offering. Most competitors focus on specific verticals. So you'll have like airline freight marketplace type of thing or they offer a service as a supplementary edition rather than as their primary focus. Freightos main advantage is its horizontal model. It enables the delivery of highly accurate data to customers through the network effects generated by its marketplace. Additionally, the data it compiles and sells enhances the network effect, encouraging customers to stay within the ecosystem. I need to do a lot more research on this honestly, but they seem to have hit sort of a growth inflection point and cash flow has improved. They were, they had like negative 150% free cash flow margins at one point. They've gotten now to I think around negative 30. They're burning about $10 million over the last 12 months on 27 million in revenue and they've got 50 million in cash or 30 or something on the balance sheet. So valuation they've got a 12. Sorry, they've got a $127 million enterprise value. They did $27 million in last 12 month revenue. 18 million of gross profit. So EV to gross profit of around 7 times. Not crazy cheap. But if the marketplace can actually grow and continue to grow at a 30, 40 Geiger and there's some uniqueness to the data side of things that allows them to be a unique provider as opposed to just like some commoditized offering. I still need to do research there. I think this could be a much bigger business in the future. So I've added like every small cap just to a watch list and seem to have not bought any of them. That has been a mistake for a few of them. But this will be added to the watch list. Hopefully do a little more research on it and you will know if I do more research on it because I'll probably end up doing an actual dedicated episode for it.

[B]

Sounds interesting. Had a comment here that said great find Ryan. So hey, I think it's interesting as well that growth is nice, reasonable valuation, small cap. Yeah, definitely need to research it more though to understand the business model other stocks the listeners recommended we had one. We have some other topics I want to get to so I don't think I'm going to get to it today. It's ivfh. Do you remember Whit Hugly, Ryan?

[A]

Yes I do. Great guest.

[B]

So apparently he just wrote up in his letter about innovative Food Holdings. We may have discussed this company. It's an OTC stock 50 million dollar market cap and it's in a 60% drawdown. Seems like it could be potentially cheap. Don't know if we have time to talk about it today, but I know a listener wanted us to. Maybe we can do it next week. Also wanted people to talk us about the Core Weave short report from Kerasdale Capital. I read it not hey, look, it's a business that's extremely risky and the short could probably work out. And then we had another person wanted us to ask the Cash Flow Kings guys wanted us to talk about High Tide because I looked up that stock price. You remember I did a stock report show on them and it is up from basically $2 at the beginning of August to $4 now. So been a good run for that company.

[A]

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[B]

When did making plans get this complicated? It's time to streamline with WhatsApp, the secure messaging app that brings the whole group together. Use polls to settle dinner plans, send event invites and pin messages so no one forgets mom 60th and never miss a meme or milestone. All protected with end to end encryption. It's time for WhatsApp message privately with everyone.

[A]

Learn [e-mail] let's talk fraud Watch. We've got some incredible. One of these topics is frankly a little hilarious. So which one do you want to start with? Trevor Milton or Rick?

[B]

Yeah, someone got put off Fraud Watch, I think should, should. I'm keeping them on fraud watch. The other company committed some tax fraud. Let's talk about Trevor Milton. This is a deeply disappointing story. Sorry, I'm trying to write in the comments here about the real brokerage to someone, but I can't multitask. So let me. Let's just go to the topic. Trevor Milton. He, for anyone that doesn't know, was the founder of Nikola, if you remember 2020, the huge story rolling the truck down the hill.

[A]

A fraud, just to be clear.

[B]

Yeah, yeah, they did a lot of fraud at Nickel Motors and well, the SEC just dismissed its case against Trevor Milton. He received a pardon earlier this year. In the letter he sent out on Twitter, which a lot of interesting responses and quote tweets to that, he said, and here's a quote out of this. Thankful to my God for one more day in this life for such a wonderful family and wife who never backed down against the evil men behind this. Would you consider yourself one of the evil men behind this, Ryan? Because I certainly do. In this, he is accusing somehow the short sellers, I think mostly Hindenburg research, which exposed his company for somehow using short selling to bring down the stock, even though short selling doesn't actually affect anything going on at the actual underlying operations. Here are two things I'm going to present without comment. One, the brother, sorry, Trevor Milton's lawyer in this case is the brother of the current US Attorney General. I'm going to read out this quote. Milton, 42, and his wife donated more than $1.8 million to a Trump reelection campaign fund less than a month before the November election, according to the Federal Election Commission. But two and two together, that. So I said no comment. No comment. People can figure out what I'm implying there.

[A]

There has got to be a rule that you cannot pardon anyone that donates to you because it's just.

[B]

That's a good law. I like that.

[A]

Yeah, that seems so old school, pay the judge type of behavior, like it's ripe for bribery. That's just, that's insane to me. These are the kind of headlines that are just so sad.

[B]

I know because I was very sad to see this. He should read about it. You should be in jail.

[A]

You read about it in like history. Who is that famous character who used to bribe all the judges. He's like, there's a lot. There was one that was like a notable guy in New York way back when. I can't remember his name. He had a funny name. Anyway, you read about it and you think, oh, that would have been such a. Such a crappy time to be, you know, hoping for fair policy. This is. It feels like we haven't strayed too far sometimes when I, when I read headlines like this.

[B]

That's why laws are important. Let's talk about. You want to talk about RCI Hospitality?

[A]

A slightly more lightly hearted topic, I guess.

[B]

Yeah. Well, we have a little egg on our face here. We did interview the CEO. CEO of this company a while back. Hands up. We had no idea that this tax fraud was going on, but thought it was an interesting show. I guess we never. I didn't own the stock ever. Did you ever own the stock, Ryan?

[A]

I did not proudly give a company in general.

[B]

If you look at that, for anyone that doesn't know, RCI Hospitality was a basically a gentleman's club roll up as well as more of Hooters styles restaurants. That type of stuff would be what they were targeting and trying to purchase. Is that a good summary of what they did?

[A]

That's exactly what it was. Yes. It was gentlemen's clubs and scandalous restaurants.

[B]

Yeah. Yeah. So I think this is what we're going to learn. I'm going to read out this quote, which is funny but also I think interesting and kind of is a good example of one. What type of companies can be risky, especially as an individual investor. But here's what we learned. If you commit fraud for hydrogen fuel trucks, that's fine. But if you take clients to the gentleman's club and bribe your auditors, that's bad. And apparently we'll talk about this. The RCI executives will go through. They got so bored that they were bribing their auditors at the strip club because they essentially said, why would you ever take this type of person, an accounting person, to the gentleman's club? They weren't having any fun whatsoever. And as a fake reality show, I thought it'd be hilarious if you would have a bunch of accountants going to a strip club and filming that. They'd be like, is that. Are you taxing that correctly? Can we talk about that? But here's the quote. New York Attorney General Leticia James announced the indictments of top executives of RCI Hospitality Holdings, a company that owns and operates strip clubs throughout the country, for their roles in a major Multimillion dollar criminal tax fraud and bribery scheme. The OAG's investigation revealed that RCI and its top executives bribed a former DTF auditor and supervisor in exchange for favorable treatment during at least six different sales tax audits spanning over a decade. The auditor received at least 13 complimentary multi day trips to Florida where he was giving up to $5,000 per day for private dances at RCI. Owned strip clubs, including Tootsies and some others. Rick's Cabaret, Vivid Cabaret, Hoops Cabaret and sports bar. 5,000 a day. Now that's a spendy auditor. Wow. Multi day trips. I mean this guy's really juicing that bribe.

[A]

This is a bit of a hilarious headline. I saw the tax fraud stuff. I didn't read this. And this part that the auditor was going to strip clubs. That is in general a bad sign if an auditor is going to a strip club for any reason. The now, okay, this isn't fair because we didn't call it out at the time and we had the CEO on the podcast and we gave him a voice, a platform.

[B]

Yeah, talk about an outsider CEO. Now this is an outsider move, but.

[A]

This is one of those where there's obviously a little bit of ascent of something could be off here because no matter what. Yeah, yeah. What's the expression? Like if you lay with dogs, you might get fleas kind of thing. Like when I think pretty much anyone in a business like this where they are day. Day to day operating out of gentleman's clubs just feels ripe for something illegal to happen, frankly. Yeah.

[B]

And you also just have the actual clubs facilitating either money laundering or criminal groups and stuff like that. That's where a lot of stuff. Yeah, those type of groups can hang out. So.

[A]

Well, we took down the episode.

[B]

Yeah. Hey, look, the stock now I think is trading at a very. Is now the time to bottom feed and no, try to go after this.

[A]

There's no value play here because what if they end up eating the cost of whatever this fraud was?

[B]

Hey, 8 million bucks. Not bad. Not too bad. They are trading in an EV to EBITDA of 9. Now the taxes might go up. The EBITDA part was.

[A]

Is that EBITDA with the T in there or is that they're trading at.

[B]

2 times gross profit? If you care about that. 6.7 times free cash flow price to free cash flow. I mean, obviously it's cheap. They just got indicted.

[A]

It's EV to EBITAF that there's interest, taxes, depreciation, amortization and fines. So if you strip out the incoming fines, they, they might look cheap.

[B]

That's small Cap land draw down 71%.

[A]

Anywhere near this, I will be avoiding this stock like the plague. Any other topics worth touching on before we depart here?

[B]

Well, you have a remitly on here. Want to talk about them?

[A]

Yeah. So they were at the same Goldman Sachs communicopia type of conference. They always have funny names for those things. But they're launching a product called, well, it's Remitly one which is going to be a membership and it's going to be $9.99 a month and sort of the core, I guess anchor product here. And the Remitly CEO Matt Oppenheimer sort of compared this to Amazon prime, which might have been a little audacious.

[B]

But I think everyone compare, everyone makes the Amazon comparison.

[A]

I think the reason that he chose that reference was because he said there's going to be sort of an anchor benefit within the subscription the way Amazon Prime's anchor benefit is free delivery. So the anchor benefit here is Remitly Flex. Now I own this stock and these words kind of scared me. But they are offering Send now pay later functionality to their customers. That is basically they will sort of a micro loan. They'll send the money for you. Like let's say the example they had was you're a daughter, you live in California, you have a family back in Mexico or son, whatever, whoever. You're an immigrant in California, live in Mexico. Someone needs $250. That's the max you can send back on Remitly Flex at the moment. You can send $250 even if you don't have it using Remitly basically micro loan interest free. And you have to pay that back over 90 days. But in order to access that basically credit line, you have to pay $9.99 a month to be a Remitly One member. There's also Remitly Wallet which is actually interesting. It's basically going to allow you to hold cash.

[B]

Right, right.

[A]

There's almost like a bank cash back stuff. But I think the important part here is if you live in a place like Turkey and you're afraid to hold Turkish lira as a currency, you can basically convert that money to USDC or convert it to US Dollars even and just hold it until you're ready to send it wherever. Which might be a nice little feature for people that hold a lot of money in remitly. But yeah, there's also Remitly card. They're exploring Remitly cards. We'll See, it just, they do feel like they're trying to go after more of being a holistic wallet for their customers, which are historically underserved by traditional neobanks. So I, I like it. This, to me feels like a little more of a straightforward forward focus. Then I read this conference or this call and Airbnb's back to back and I'm like, am I just giving preference to remitly here because I own more of them, or do you have a lack of focus?

[B]

They could be as crazy behind closed doors. That's the Seattle mindset versus the San Francisco mindset. Seattle ruthless efficiency like Microsoft, Amazon, San Francisco Bay Area, Google, Apple. Oh, we're all in the magic realm.

[A]

Yeah, yeah, I like it though. It was encouraging.

[B]

Send, spend, save. That's the three things.

[A]

Yeah, they seem to be encroaching more and more on Wise's turf as well, so could be a little more of a battle going on there as the corridors also converge. They're. They're starting to grow into a lot of the same send corridors. So yeah, we'll see.

[B]

And there's plenty of plenty of room for both to win since there's $20 trillion in money spent by businesses, sent by businesses cross borders every year. All right, Ram, we went long. Anything for the listeners before we get out of here.

[A]

I think that's going to do it. I hope you enjoyed learning about RCI hospitality and maybe some of the small cap of the week. You got to get your veggies first.

[B]

Yeah. Shout out to Valley after hours. I actually heard that there was a pitch about Portillo's on there, so I'm going to listen to that. Anyone that's interested in that, go listen as well. But yes, eat your veggies as well. As you know, we have a little fun. We'll have some educational stuff with the Airbnb, Nvidia and Intel, but we like to look at the sometimes ludicrous stuff in the financial world as well. Next week I'll have a stock research report on Kraken Robotics, which is a finesse, fascinating company. And then we're going to have some fun stuff coming down the pipe. Got to finish at out the schedule here, but thank you everyone for listening. We do these live Thursdays, 2pm Pacific, 5pm Eastern Time on the Chitchat Stocks YouTube page. But you can listen or watch the replays Friday mornings, Spotify, Apple Podcasts, YouTube, wherever you get your podcast. As a disclosure, we are not financial advisors. Anything we say on the show is not formal advice or a recommendation. Ryan I or any podcast guests may hold securities discussed in this podcast, may have held them in the past, and they buy, sell, or hold them in the future. Thank you, everyone, once again, and we'll see you next week.

[A]

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[B]

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Uh, Limu is that guy with the binoculars watching us?

[B]

Cut the camera. They see us.

[A]

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Liberty.

[A]

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