Economic Animals

Summary

Money Stuff: The Podcast – “Economic Animals”

Date: April 24, 2026
Host: Matt Levine (Bloomberg Opinion)
Co-host: Katie Greifeld (Bloomberg News & TV)

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Episode Overview

This week’s episode of Money Stuff is a smart and playful dive into the ways financial incentives shape human (and institutional) behavior—tying together tales of market manipulation, meme stocks, the saga of short squeezes, ambitious tech M&A, and the cutthroat hedge fund talent battles. Matt and Katie, true to their signature style, mix technical insight with humor, ask questions about the future of markets, and indulge in a few memorable tangents about robot armies and career milestones.

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Key Discussion Points

1. Market Manipulation in Prediction Markets and Parametric Insurance

• Paris Weather Betting Scandal

  • On platforms like Polymarket, bets hinge on a single temperature sensor at Charles de Gaulle Airport. Manipulation (possibly with a hairdryer!) reportedly made “long-shot bets” pay out tens of thousands of dollars.
  • Matt: “Prediction markets have created a sort of infinite surface for market manipulation... Anything you can think of, there can be a prediction market on and the outcome of anything you can think of might be manipulable.” (04:52)
  • Katie wonders about the logistics: “I want to see photos or a diagram of where this temperature sensor is.” (06:01)

• Bad Bunny and Bespoke Parametric Insurance

  • Story of Bad Bunny’s team installing a custom weather station at a concert venue for hyper-local rain insurance.
  • Matt links this to prediction markets: “Is bespoke parametric insurance the same thing as a prediction market? And it’s like, oh, kind of. Yeah.” (07:49)

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2. The Avis Budget Short Squeeze Saga

• Wild Stock Movements

  • Avis Budget’s stock soared from ~$100 to $713, prompting speculation about short squeezes, swap arrangements, and meme stonk dynamics.
  • Katie: “The consensus is that it’s a short squeeze.” (08:26)
  • Matt describes two hedge funds (SRS and Penwater) “owning 108% of the stock” through both shares and swap positions, and theorizes that swaps between long and short hedge funds may mean “there’s no short squeeze, everything’s easy.” (11:09)

• Self-Fulfilling Squeezes & Media Hype

  • Katie on market psychology: “If enough people think there’s a short squeeze happening, then more people are going to pile in.” (11:18)
  • Matt: “A short squeeze is almost like a magical incantation for a meme stock.” (11:21)

• J.P. Morgan’s Response and Capital Raising

  • JP Morgan downgraded the stock while raising its price target, suggesting management should capitalize: “They downgraded them … saying it has an unsustainable valuation not supported by...” (12:03)
  • Matt discusses the problem with selling new shares during a short squeeze: “When people are really amped for short squeezes ... they get mad if the company talks about issuing stock because that somehow deflates the short squeeze.” (13:02)

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3. SpaceX: IPO Buzz, AI Ambitions, and the “Elon Musk Machine”

• SpaceX Going Public, AI Acquisitions

  • Rumored IPO in June, acquisition of AI company Cursor to shore up “coding tools” capabilities.
  • Matt: “SpaceX is a rocket company, but it’s also an AI company … building data centers ... infrastructure.” (15:29)
  • Logistics problem: integrating M&A before IPO isn’t feasible, so the deal will be finalized after going public.
  • Matt: “You can’t … put the pro forma financials into the prospectus, run it by the SEC, get the auditors to sign off ... if you’re signing that deal in April. So they’re not doing that.” (16:43)

• M&A Skepticism—The ‘Elon Risk’ Premium

  • $10 billion breakup fee is “enormous” (18:07) and reflects Musk’s flaky M&A reputation post-Twitter.
  • Katie: “It is interesting that Musk's ambitions here are bumping up against real human timelines... If he did want to really buy Cursor, he can't do it before the IPO.” (18:44)
  • Matt: “You could imagine him being like, ah, just do it. It's not physically impossible.” (18:56)

• Dual-Class Stock and The Future of Tesla and SpaceX

  • SpaceX will use dual-class shares for Musk to maintain control. Tesla went public without them, so combining companies gives Musk more consolidated power.
  • Matt: “There is an obvious solution to all of these problems, which is you take SpaceX public with dual class stock. Elon Musk controls the votes... and then buys Tesla.” (20:57)
  • The spectacle: “I would like to see that [the two Elon robot armies fight]” – Katie (21:20)

• Investor Implications

  • Will the “Elon Musk premium” shift from Tesla to SpaceX? Matt: “It’s possible the only public Musk company premium goes away, but then the possible merger with SpaceX premium comes in, so nothing happens.” (21:59)
  • Hyped IPO timetable is part of Katie’s pre-baby bucket list: “I have to live through Milken and I have to live through the SpaceX IPO.” (22:40)

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4. “Gazumping” and the Hedge Fund Talent Wars

• Gazumping Comes to Hedge Funds

  • British real estate term appropriated for the hedge fund world: portfolio managers accepting offers, then being lured away (“gazumped”) to even higher offers while on gardening leave.
  • Katie: “I hate the word gazumping.” (24:23)
  • Matt: “The market for portfolio managers at multi-strategy hedge funds is so tight that ... people … are, while on gardening leave, getting poached at still higher offers ... Or to go back to their original hedge fund.” (24:44)
  • “Interception trade”: scooping up a manager as their non-compete expires.

• Economics and Ethics of the Chase

  • Notable quote:

    • “You’re talking about a group of people who are economic animals. They'll pay lip service to quality of life … but at the end of the day, one of the reasons the large firms have been so successful is because they can pay more. They can, right?” – Mark Greenberg, ex-Point72 (26:18)

  • Matt frames it as pure, rational optionality: “It would be disappointing if you weren’t doing this.” (26:39)

  • Katie wonders how “vicious price spiral” ends. Matt: “Doesn’t end ... unless the strategy stops working.” (26:55)

• Litigation Over Poaching

  • Schoenfeld sues Adam Grunfeld for $11M after he accepts a job (with liquidated damages clause) but stays at Millennium for a better offer.
  • Katie: “Apparently he held himself out during negotiations as a long-term addition to Schoenfeld...” (27:35)
  • Matt: “Of course he did. What else would you do?” (27:51)
  • Unusual part is the level of litigation and dollar amounts: “It’s not how the world works in most employment situations, but apparently maybe how it works in pawn shops.” (29:11)

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Notable Quotes & Memorable Moments

• Matt (on prediction markets): “Prediction markets have just created this vast new possibility of things to manipulate.” (05:54)
• Matt (on meme stocks): “A short squeeze is almost like a magical incantation for a meme stock.” (11:21)
• Katie (on company incentives): “If enough people think there’s a short squeeze happening, then more people are going to pile in.” (11:18)
• Mark Greenberg, ex-Point72: “You’re talking about a group of people who are economic animals. They’ll pay lip service to quality of life ... at the end of the day, [success] is because they can pay more.” (26:18)

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Timestamps for Important Segments

• Prediction Markets & Paris Weather Scandal: 03:49 – 07:58
• Avis Budget Short Squeeze Discussion: 08:11 – 13:51
• SpaceX IPO, AI M&A, and Dual-Class Stock: 15:11 – 22:53
• Hedge Fund Gazumping and Litigation: 24:23 – 29:29

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Final Thoughts

Matt and Katie bring clarity and wit to the weird and wild corners of modern finance, drawing surprising parallels and never missing the human angle. From weather bets to robot armies, and from meme stocks to hedge fund job-hopping, this episode underscores that in markets, money motivates in strange, fiercely logical, and sometimes laugh-out-loud ways.

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For New Listeners

You don’t need to keep up with every earnings report, IPO rumor, or hedge fund lawsuit to enjoy this episode—the hosts explain enough to keep the conversation clear and engaging. Whether you're puzzling over market mechanics or just want to hear insiders riff on Wall Street's quirks, “Economic Animals” is an entertaining, insight-packed listen.

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All advertisements and sponsor messages have been omitted for clarity and relevance.

Transcript

[Kelly Cavagnaro]

Hi, I'm Kelly Cavagnaro, Managing Director, head of North America Institutional Distribution at Janice Henderson Investors. We believe working together is the way to work better. Like combining your portfolio plans and our in depth strategy. Your valued assets and our valuable insights. Your mission and our vision working in harmony to seek the right investment opportunities. Janice Henderson Investors Investing in a brighter future together.

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[Cincinnati Insurance Narrator]

Bloomberg Audio Studios, podcasts, radio news.

[Matt Levine]

Katie, is it some sort of take your children to Bloomberg television day?

[Katie Greifeld]

Yeah, I feel like that's evidenced by all the children that are walking around.

[Matt Levine]

Yeah, there are a lot of children walking out.

[Katie Greifeld]

Where are your kids?

[Matt Levine]

I have never once been informed in advance or frankly, frankly in real time about a take your child to work day. I just show up and all the kids are here and they're like, oh, yeah, take your child to work day.

[Katie Greifeld]

I'm like, I hear there's a lot.

[Matt Levine]

Why was I not informed?

[Katie Greifeld]

I hear there's a lottery. Not everyone's allowed to bring their children is my understanding.

[Matt Levine]

Okay, I wasn't informed about the lottery. It's fine. My kids have school.

[Katie Greifeld]

It's fine, it's fine, it's fine. I mean, you're not getting anything done that day.

[Matt Levine]

Right. Someone at Bloomberg Opinion had his kids

[Katie Greifeld]

here and you're like, scram, kids.

[Matt Levine]

No, no, I was like a bad influence. I was like, my daughter like, first tried root beer here, but I saw two kids recording, like on the camera in the lobby. That's what I was looking behind them and I could see the prompter. And it was like, at Bloomberg News for kids?

[Katie Greifeld]

Yeah.

[Matt Levine]

It's like, are they. Is that going to be aired?

[Katie Greifeld]

It's cute that they do that. Certainly not on my show. No.

[Matt Levine]

Kids were killing it. Man, you're competitive.

[Katie Greifeld]

Yeah. I don't know why I want to go tackle those children. Get away from my prompter.

[Matt Levine]

Coming for your job in approximately 20 years.

[Katie Greifeld]

I thought I was having to worry about AI.

[Matt Levine]

Hello. Welcome to the Money Stuff podcast, your weekly podcast where we talk about stuff related to money. I'm Matt Levine and I write the Money Stuff column for Bloomberg Opinion.

[Katie Greifeld]

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

[Matt Levine]

Should we talk about the weather? I feel like we talked about the weather last week and now we're talking about the weather again. There's a very economically important local climatic zone, which is that apparently somewhere within Charles de Gaulle Airport in Paris, there's a sensor that tells you the temperature for like, Paris.

[Katie Greifeld]

Yeah.

[Matt Levine]

And so polymarket takes quite a lot of bets on the weather in Paris. And at two points this month, it's been reported the temperature in Paris, by which I mean the temperature at this one sensor in the airport spiked by like 4 or 5 degrees Celsius in the space of a few minutes, causing very long shot bets on this temperature to pay off to the tune of tens of thousands of dollars. And so the French, like, meteorological service is investigating and there are tweets about someone took a hairdryer to Charles de Gaulle and made thousands of dollars trading these weather derivatives.

[Katie Greifeld]

So good.

[Matt Levine]

Yeah.

[Katie Greifeld]

I have to imagine there's going to be so many more cases like this.

[Matt Levine]

Right. I tried to write about it.

[Katie Greifeld]

I feel like you did successfully.

[Matt Levine]

Well, yeah, I wrote words about it. There's market manipulation in the world. Right. There's some stuff, it's happening right now, underlying stuff, and there are derivatives on the underlying stuff. And people can manipulate the stuff to cause the derivatives to go up. And I've written about dozens of cases over the years. But what prediction markets have done is they've created a sort of infinite surface for market manipulation. Like anything you can think of, there can be a prediction market on and the outcome of anything you can think of might be manipulable. And so if you are buying, like, grain futures, the weather in the Midwestern United States is an input to the price of those grain futures. But, like, a liter of air in the Midwestern United States is not a material input. But if you're buying the poly market, like, bet on the weather in Paris, one tiny little spot causes the bets to pay off or not. There's always going to be market manipulation. But, like, the prediction markets have just created this vast new possibility of things to manipulate.

[Katie Greifeld]

It's exciting, right?

[Matt Levine]

It kind of is, yeah. I mean, I don't know. I feel stupid every time I write about it, but I keep writing about it.

[Katie Greifeld]

I mean, it's clever, and some of them are clever and fun. I guess I feel like I want to see photos or a diagram of, like, where this temperature sensor is.

[Matt Levine]

Yeah, I do, too.

[Katie Greifeld]

I feel like they could fix this by just placing it higher.

[Matt Levine]

Right.

[Katie Greifeld]

Part of me thinks it's near a

[Matt Levine]

drinking fountain, like at the gate, you know, but it's probably not. It's probably like on a Runway. Yeah, right. Because, like, you know, the weather in the actual airport is climate controlled. So.

[Katie Greifeld]

Yeah, I think.

[Matt Levine]

I don't.

[Katie Greifeld]

I don't actually know if it's 68 degrees again or it would be in Celsius.

[Matt Levine]

Europe is less committed to air conditioning than the United States is. But still. Still. I bet it's outside.

[Katie Greifeld]

Yeah, but still. Still. Yeah.

[Matt Levine]

I also wrote this week about bespoke parametric insurance.

[Katie Greifeld]

Yeah.

[Matt Levine]

So basically there's a great Bloomberg article about Bad Bunny.

[Katie Greifeld]

I think it's Bad Bunny.

[Matt Levine]

Yeah. He had a concert scheduled in, like, Colombia, and he worried about it being canceled for torrential rain. And he went to insurance companies to, like, get cancellation insurance. And they're like, well, we can sell you a policy that pays off if it rains. But, like, the rain sensor is a mile away and it's like a very different microclimate where you are. And he was like, what if we built a weather station and this is not him, this is his, like, insurance adjusters, for sure. They built a weather station inside the venue so that they could get paid out if it rained in the venue. The story was great because among other things, it was like they could have built just like a rain collector.

[Katie Greifeld]

Yeah.

[Matt Levine]

But then you could manipulate that and you could just get a watering can and pour water on it. It's like they had to build out a whole weather station because that you have all the confirmatory readings, and if they just pour water into the weather onto the rain sensor. Then they'll know.

[Katie Greifeld]

He should have just.

[Matt Levine]

Apparently the French Meteorological Service has this problem.

[Katie Greifeld]

Yeah. Bad bunny should have just created a market on Polymarket or Kalshi.

[Matt Levine]

Well, that's the thing, right? I wrote about this and I was like, oh, bespoke parametric insurance. And someone was like, is bespoke parametric insurance the same thing as a prediction market? And it's like, oh, kind of. Yeah.

[Katie Greifeld]

In the future for sure.

[Matt Levine]

I'm glad we talked about the weather sensor. It's going to be all we talk about. Famously boring topic of conversation, but coming

[Katie Greifeld]

up more and more often, it'll come up again.

[Matt Levine]

She talked about Avis.

[Katie Greifeld]

Yeah.

[Matt Levine]

Do you know anything about Avis?

[Katie Greifeld]

No.

[Matt Levine]

Avis Budget is what it's called. It's two or more replicas.

[Katie Greifeld]

I think people have often used Hertz. So I don't know much about Avis. I do know that the stock has been going insane.

[Matt Levine]

Yeah. Ripped.

[Katie Greifeld]

And the consensus is that it's a short squeeze.

[Matt Levine]

It's interesting. So the stock was at like $100 about a month ago. $100 a share. And it is a. It got to 713 on Tuesday.

[Katie Greifeld]

Wow. It must have been a great earnings report.

[Matt Levine]

Right. I was going to say the consensus is that it's not earnings driven.

[Katie Greifeld]

Right.

[Matt Levine]

It's not a fundamen.

[Katie Greifeld]

They report on the 29th of April.

[Matt Levine]

Maybe people have an inside view on this, but I don't think so. The phrase that is normally thrown out is short squeeze. And a couple of good reasons for it. One is that it's a heavily shorted stock. Short interest is a somewhat mysterious thing to report and you often get it on a delay. But something like 60% of the shares have been shorted, which is a lot. But the other reason that people talk about a short squeeze, and I wrote about this last week, is, is that two hedge funds own 108% of the stock, which if you do some simple math, like if you own 108% of the stock and you call in all of your borrow, then there's no borrow to be found. Now, that's not exactly what happened here. One thing that has happened is I've gotten several emails from people being like, is there actually a short squeeze? Because there's no reports of hedge funds being like, carried out. Like, you know, like in GameStop where like, you know, yeah, a big hedge fund closed because of the GameStop short squeeze. Yeah, there's not really any reports of that here. Bloomberg has been reporting that people were adding Short positions as the stock was going up and have now made billions of dollars more than offsetting the billions of dollars they lost on the way up. Yeah, it's interesting. So these two hedge funds own 108% of the stock, but they don't really. They own like 69% of the stock.

[Katie Greifeld]

Right.

[Matt Levine]

And then they have big swap positions. Where traditionally the way a swap works is a bank writes the hedge fund a contract saying, we'll give you the upside in the stock and you'll lose the downside. And the bank hedges it by buying stock, but it doesn't have to hedge it by buying stock. One thing I was thinking about is that if short sellers want to be short a lot of this stock, and if these two hedge funds are called SRS and Penwater want to be long a lot of this stock, they can just do a bet with each other. The hedge fund says, if the stock goes up, I'll pay you, and if the stock goes down, you'll pay me. Right. That's a swap. And what might be happening here is that that might be happening. What might be happening is that the short sellers are short the stock on swap. SRS and Penwater are along the stock on swap. The bank is sitting between them and basically brokering a bet between the short hedge funds and the long hedge funds. And then there's no short squeeze. Everything's easy. I mean, there's a little bit of short squeeze. You have collateral calls, but basically you can just sit there until the world returns to reality.

[Katie Greifeld]

I do also like the psychological maybe theory that if enough people think there's a short squeeze happening, then more people are going to pile in.

[Matt Levine]

Right.

[Katie Greifeld]

Regardless of whether it's truly happening at scale.

[Matt Levine]

Yeah, because a short squeeze is almost like a magical incantation for a meme stock. Right. You can have a stock go up 7x without a short squeeze just because retail investors think there's a short squeeze. Right. I mean, that's, you know, that's Gamestop. Although there was one, probably, but. Right. And the setup here with the huge amount shorted and the huge amount long really encourages someone to think, ooh, a short squeeze. And then pile into it. So occurs to me that my writing about it last week.

[Katie Greifeld]

Is this your fault?

[Matt Levine]

Not a lot of meme stops are born in money stuff, but who knows?

[Katie Greifeld]

There was an interesting JP Morgan note

[Matt Levine]

downgrading the fundamentals don't justify this.

[Katie Greifeld]

Yeah, exactly. They downgraded them to underweight from neutral, saying it has an unsustainable valuation not

[Matt Levine]

supported by did they raise their price target?

[Katie Greifeld]

Yes, because their price target is like

[Matt Levine]

100 bucks or whatever and then it goes to 700 and they're like, okay, well now it's a sell at 200.

[Katie Greifeld]

Well, they boosted the price target to account for capital markets opportunity. And this is what I wanted to bring to your attention, that they wrote, we view the recent extraordinary quote, short squeeze driven rally in Avis Budget shares as a potentially significant opportunity for management to create lasting value via opportunistic capital market transactions.

[Matt Levine]

I was thinking about that. When you're a meme stock and you say, okay, we're going to rip off an atm, like that works, right? That's become like a standard piece of the playbook. Now you do at the market stock offering to take advantage of your meme stock status. It's tougher when you are like nominally purely a short squeeze because the thing about a stock offering is it alleviates the short squeeze problem. You can sell the shares to the shorts or whatever. So when people are really amped for short squeezes, they get mad if the company talks about issuing stock because that somehow deflates the short squeeze. But sure, right? I mean, if Your stock's at 700, sell some stock. But I was wondering if they would do some sort of at the market offering. And it's trickier in this situation.

[Katie Greifeld]

Has the moment passed?

[Matt Levine]

The stock was down. Tuesday was the peak. And it's, you know, we're recording this on Thursday. It's up $230 or something, which is, you know, like, has the moment passed? It's doubled in the last month for no reason. It's still a good deal, but it's not 700.

[Katie Greifeld]

Well, at least J.P. morgan thinks that.

[Matt Levine]

What's their price target now?

[Katie Greifeld]

Their price target is $165. Okay, okay, it was $123. We'll see. I don't know. Earnings are next week.

[Matt Levine]

You can be a buy at 123 when the stock's at 100 and then you're a sell at 165 when the stock is at 700.

[Katie Greifeld]

There you go.

[Kelly Cavagnaro]

Hi, I'm Kelly Cavaignaro, Managing director, head of North America Institutional Distribution at Janice Henderson Investors. We believe working together is the way to work better. Like combining your portfolio plans and our in depth strategy. Your valued assets and our valuable insights. Your mission and our vision working in harmony to seek the right investment opportunities. Janice Henderson Investors investing in a brighter future together. Get the news you need in just 15 minutes.

[Matt Levine]

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[Kelly Cavagnaro]

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[Matt Levine]

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[Kelly Cavagnaro]

Subscribe to Bloomberg Daybreak for a precise, thoughtful take on the stories that matter.

[Matt Levine]

Listen to Bloomberg Daybreak each morning on Apple, Spotify, or anywhere you listen. Speaking of meme stocks, should we talk about SpaceX?

[Katie Greifeld]

Yeah, probably.

[Matt Levine]

It's going public.

[Katie Greifeld]

I can't wait.

[Matt Levine]

You'll have to wait. It's supposedly going public in June.

[Katie Greifeld]

I know.

[Matt Levine]

There's no real guarantee of that.

[Katie Greifeld]

That's true. Especially if they want to do some interesting M and A. I love it so much.

[Matt Levine]

They decided to buy Cursor for reasons.

[Katie Greifeld]

Fundamental reasons.

[Matt Levine]

Yeah. Ben Thomson at Stratecury has a nice piece about why this makes sense. Right. I mean, SpaceX has. SpaceX is a rocket company, but it's also an AI company. And as an AI company, it's, like, quite good at getting chips and building data centers and just sort of like infrastructure.

[Katie Greifeld]

Yes.

[Matt Levine]

But, you know, it's a hot mess in terms of building a model. And so it seems a little bit like they're importing a AI lab into the, you know, use their AI infrastructure, which, like, makes sense. Right? Like, turns out, like, the big use case for AI right now is coding tools. And Xai fell behind in the coding tools race, and CUR had a lead in the coding tools race, and, you know, maybe giving them lots of chips will help with that. So it makes sense. But the problem with it is that theoretically, SpaceX is going public in June

[Katie Greifeld]

and it's April, and not for much longer either.

[Matt Levine]

No. And traditionally, when you go public, you disclose information about your business, and SpaceX's business is changing from week to week, as you can tell from the fact that it's called SpaceX and we're talking about its AI business.

[Katie Greifeld]

Yeah, well, data centers in space. Sure.

[Matt Levine]

Data centers in space, absolutely.

[Katie Greifeld]

It's real, Matt.

[Matt Levine]

It's something. It's really going to be a part of the pitch. But the point is, you can't acquire Cursor, generate pro forma financials, put the pro forma financials into the prospectus, run it by the sec, get the auditors to sign off, educate the research analysts about it, and go public in June if you're signing that deal in April. So they're not doing that. They're like, we're going to buy Cursor, but We got to do it after the ipo. So just put a pin in that. Telling everyone we're planning it now, but no promises. No promises that are certain enough to require us to revise the IPO prospectus.

[Katie Greifeld]

I wonder if, in the meantime, you see another bidder emerge.

[Matt Levine]

It's an interesting question. I was thinking the opposite, which is like, Elon Musk has some track record of changing his mind about M and A, particularly here. Like, it seems apparent that this is not like they're signing a deal and then meeting once a week in a conference room to negotiate integration. It's pretty clear that those guys are going to work at SpaceX tomorrow. So they have a lot of time to fall out of love with Elon Musk or for him to fall out of love with them. And if he changes his mind, he has to pay a $10 billion breakup fee. Breakup fees traditionally are on the order of 2% of deal value, and this one is 17% of deal value.

[Katie Greifeld]

I was going to say, even compared to the Warner Brothers Discovery breakup, it's

[Matt Levine]

an enormous breakup fee.

[Katie Greifeld]

Yeah.

[Matt Levine]

And here's why. One, because it's not like a signed deal. It's a little bit weirder. So it's like buying an option rather than, like, really signing a deal with a breakup fee. And two, he has a track record,

[Katie Greifeld]

you know, Twitter, which is part of sai, which is part of.

[Matt Levine]

When Musk was, like, trying to get out of the Twitter deal. I had so many people email me, and I kept thinking about it, like, is this going to affect his ability to do M and A in the future? Will people be hesitant to sign M and A deals with Elon Musk in the future after he flaked on this one? And here's the answer. Yeah, you got to pay a lot of money because you might not pass the deal.

[Katie Greifeld]

It is interesting that Musk's ambitions here are bumping up against real human timelines. If he did want to really buy Cursor, he can't do it before the ipo. It just physically can't happen.

[Matt Levine]

You say physically. The joke is always that Elon Musk is constrained only by the laws of physics and not by the laws of Prince of the sec. And you could imagine, you know, him yelling at the lawyers who were like, please don't close another deal between now and the ipo. You could imagine him being like, ah, just do it. It's not physically impossible.

[Katie Greifeld]

Come on.

[Matt Levine]

For whatever reason, they didn't do it. They decided to hold off.

[Katie Greifeld]

It pours cold water also on some of the speculation of SpaceX combining with Tesla because does it kind of.

[Matt Levine]

Oh, I don't think so.

[Katie Greifeld]

Before the ipo. It does.

[Matt Levine]

Oh yeah, it's not going to come out before the IPO.

[Katie Greifeld]

Yeah.

[Matt Levine]

So the other thing that I wrote about SpaceX this week is that SpaceX is going public with dual class stock. So I don't know, the prospectus is not public and like it's in there blanks anyway. But I don't know how much Elon Musk owns. But like you will have 10 times voting stock shares with 10 votes per share. So he will control Space X. Probably. Which makes sense because one, if you're investing in Space X, you are clearly buying into the Elon Musk machine. And two, from his perspective, you know, like he said about Tesla, I don't want to build a robot army at Tesla if I don't control it. And all the more so when he's building an intergalactic robot army to colonize Mars and data centers, all this stuff, he needs to control it. So I get it. He's going to control SpaceX, it's going to go public with dual class stock. Tesla did not go public with dual class stock. You can't really add it afterwards, even if you get the shareholders to vote to approve it. The stock exchange rules, they don't like it. He can't really add dual class stock and Tesla. And so there's these weird things where every few years he gets a trillion dollar pay package and we talk about whether that's legal. It wouldn't be a trillion dollar paybackage if they were just like you get 10 times as many votes anyway. There is an obvious solution to all of these problems, which is you take SpaceX public with dual class stock. Elon Musk controls the votes.

[Katie Greifeld]

Done.

[Matt Levine]

And then two weeks later, maybe two weeks is optimistic, two months later, buys Tesla. And then the combined company has dual class stock and Elon Musk controls both of them. And they both, you know, there's some overlap in like they're both building robot armies.

[Katie Greifeld]

Yes. Like, you know, you only need one company building robot army.

[Matt Levine]

Only one robot army. Well, that you wouldn't want the robot armies to fight.

[Katie Greifeld]

I mean, I would like to see that.

[Matt Levine]

Yes, actually that would be probably, probably

[Katie Greifeld]

like give them guns.

[Matt Levine]

Good for humanity. If Elon Musk's robot armies fight and annihilate each other like somewhere off the shoulders of Orion, you know, like just

[Katie Greifeld]

a theory I want to get your take on is Tesla reported earnings on Wednesday broke those on live tv. But right now, Tesla is the only public option to get into the Elon Musk machine, as you call it. I do wonder if SpaceX going public takes the shine off of Tesla and sort of collapses the Elon Musk premium there.

[Matt Levine]

I think it's very possible. I think it's so interesting to me that Tesla spends so much time talking about AI and robots and it's like you got to sprinkle a little of the AI dust on both of them. You can't just do all the AI stuff in the AI company because then you don't have the AI stuff in the other company. It's possible that the only public Musk company premium goes away, but then the possible merger with SpaceX Premium comes in, so nothing happens. Right on in.

[Katie Greifeld]

Yeah, there's a passing of the baton there, right?

[Matt Levine]

I don't know.

[Katie Greifeld]

I don't know. Yeah, Tesla is trading at something like 183 times forward earnings, by the way. Yeah.

[Matt Levine]

SpaceX is allegedly going public at 100 times forward revenue.

[Katie Greifeld]

It's gonna be so fun. I keep thinking about what I need to do between now and the time I give birth. Like the events I have to live through. I have to live through Milken and I have to live through the SpaceX IPO.

[Matt Levine]

Yeah.

[Katie Greifeld]

I just. I have to see them.

[Matt Levine]

Right? Right.

[Katie Greifeld]

And then I can have a child.

[Matt Levine]

Right.

[Katie Greifeld]

So please go public in June.

[Matt Levine]

Life highlights in the coming year. SpaceX IPO Birth of your first child.

[Katie Greifeld]

I can't tell my child about this,

[Matt Levine]

Mommy. Where Were you when SpaceX went public?

[Katie Greifeld]

Let me tell you.

[Kelly Cavagnaro]

Hi, I'm Kelly Cavagnaro, Managing Director, Head of North America Institutional Distribution at Janice Henderson Investors. We believe working together is the way to work better. Like combining your portfolio plans and our in depth strategy. Your valued assets and our valuable insights. Your mission and our vision working in harmony to seek the right investment opportunities. Janice Henderson Investors investing in a brighter Future.

[Bloomberg Invest Narrator]

Together on June 10, Bloomberg Invest is back in Hong Kong. We look at the role Hong Kong plays between China and the world as major powers compete and markets realign. As global investors investors rethink risk, we'll explore the forces driving Asian demand and the future of private capital. Catch exclusive interviews with top newsmakers, plus a live recording of Bloomberg's Odd lots podcast. Visit BloombergLive.com investhongkong to learn more. Supporting sponsor Deutsche Bank.

[Katie Greifeld]

I hate the word gazumping.

[Matt Levine]

Oh yeah, I was talking in my group chat about how much we all hate the word gazumping.

[IBM AI Narrator]

Gross.

[Katie Greifeld]

Okay, this Is America.

[Matt Levine]

Right. I did not realize it's like a British real estate term. And so I'm less offended by it now because it, like, it makes me like it less. Sure, fair. But no, it's a, it's the term for like when you have a deal to buy a house and then someone else offers a higher price and you lose your deal to buy a house. And so there was a Bloomberg story this week about that happened to hedge fund portfolio managers.

[Katie Greifeld]

Yes.

[Matt Levine]

Because the market for portfolio managers at multi strategy hedge funds is so tight that people who have quit their jobs and accepted new offers to go to other hedge funds are while on gardening leave getting poached at still higher offers to go to still other hedge funds or often to go back to their original hedge fund. And what I read about it is there's a time value of hedge fund portfolio managers where ordinarily, if you hire a hedge fund manager, if you hire a portfolio manager, you should expect to have to wait about a year for them to serve out their gardening leave. And that's a long time to wait. And you've got big plans. And so if you can find someone who's already served out 11 months of their gardening leave, they can start next month. And so the hedge fund managers who are currently sitting out on gardening leave are in some sense the most desirable candidates. And so of course, people bid them up.

[Katie Greifeld]

Yeah. A different term which I like is interception trade, which is good American football term. Just you have to get the timing just right, which is cool.

[Matt Levine]

It's not that hard.

[Katie Greifeld]

Well, yeah, but it's made easier if you are a recruiter and you have a list of who you've placed and rendered.

[Matt Levine]

You get someone a nice deal at a new hedge fund and you set a calendar reminder for like 11 and a half months to check in with them and see if you can get them a higher offer. It is pretty evil. The thing that I most endorse is like, people get in that bag by negotiating up their offers. Like, I'm all for it.

[Katie Greifeld]

Well, I love this quote. It's from Mark Greenberg, who is a former managing director at point 72 who now trains traders. You're talking about a group of people who are economic animals. They'll pay lip service to quality of life and where they live and the type of people that they're working for. But at the end of the day, one of the reasons the large firms have been so successful is because they can pay more. They can, right?

[Matt Levine]

This is all so pure. Like, it's just like you're good at profiting from optionality and spotting opportunities. It would be disappointing if you weren't doing this.

[Katie Greifeld]

Yeah. It does seem like a vicious price spiral though, you know.

[Matt Levine]

Yeah, sure.

[Katie Greifeld]

When does it end?

[Matt Levine]

Doesn't end. You know, it ends if the strategy's not working. I don't know. I should mention there's a lawsuit.

[Katie Greifeld]

Yeah.

[Matt Levine]

Schoenfeld sued a guy who worked at Millennium. Schoenfeld did long, painful, rigorous negotiations to hire him. They signed an employment agreement with him. They signed a confidentiality agreement. And of course, of course, once he has that, he goes to his bosses at Millennium and is like, so, and Millennium, what do you think? Matched. And he stayed.

[Katie Greifeld]

Yeah.

[Matt Levine]

Which like, you know, more power to him. Schoenfeld sued him for $11 million.

[Katie Greifeld]

His name is Adam Grunfeld, which is sort of like Greifeld. But yeah, apparently he held himself out during negotiations as a long term addition to Schoenfeld, capable not only of generating returns through his own trad, but also of contributing to the firm's intellectual capital.

[Matt Levine]

Of course he did.

[Katie Greifeld]

Of course.

[Matt Levine]

What else would you do?

[Katie Greifeld]

That's the thing. It doesn't seem, it doesn't seem that different of a playbook than any other industry. You know, you sort of interview and chop yourself around and then you bring it back.

[Matt Levine]

The unusual thing is getting sued.

[Katie Greifeld]

Yeah, yeah. Also $11 million is quite enough. But to that point, apparently Schoenfeld said that it had contemplated the possibility that Grunfeld might renege on the door.

[Matt Levine]

Of course they did. This is every job in the world.

[Katie Greifeld]

Yeah, but I guess we're talking about a lot more dollar signs and like you said, lawsuits.

[Matt Levine]

Yeah, it's very striking. One thing I was thinking about when I first read about the interception trade was the reason the interception trade works is that someone who is 11 months into their 12 month gardening leave is more valuable than someone who's just at their current job and has 12 months of gardening leave to serve up. And one way to prevent that would be if your new job gave you a non compete before starting at your new job. But I don't think you can, I don't think you can sign a new non compete while you're still on the non compete from your old job. Right? Yeah, but that kind of happened here, right where he signed the employment agreement. And so they're like, no, no, no, you can't leave to your original job because you already signed our employment agreement. It's almost like he has a non compete with his original job.

[Katie Greifeld]

Damn.

[Matt Levine]

Not really?

[Katie Greifeld]

Couldn't millennium foot the $11 million?

[Matt Levine]

If you're leaving a job that has restricted stock, it's fairly traditional for your new employer to make you whole, right? Could millennium foot the $11 million bill? Sure, but I'd rather not if no one has to. I don't know. I mean, like, the argument is that he signed a binding employment agreement with an $11 million liquidated damages clause saying if you don't show up for any reason, you have to pay US $11 million to compensate for our lost opportunity here. Which is not crazy. Like, it's just, you know, it's not how, it's not how the world works in most employment situations, but apparently maybe how it works in pawn shops. And that was the Money Stuff Podcast. I'm Matt Levine.

[Katie Greifeld]

And I'm Katie Greifeld.

[Matt Levine]

You can find my work by subscribing to the Money stuff newsletter on bloomberg.com

[Katie Greifeld]

and you can find me on Bloomberg TV every day on the close between between 3 and 5pm Eastern.

[Matt Levine]

We'd love to hear from you. You can send an email to moneypodlumberg.net Ask us a question and we might answer it on the air.

[Katie Greifeld]

You can also subscribe to our show wherever you're listening right now and leave us a review. It helps more people find the show.

[Matt Levine]

The Money Stuff podcast is produced by Anna Mazarakis, Moses Andam and Alexis Haut.

[Katie Greifeld]

Our theme music was composed by Blake Maples.

[Matt Levine]

Amy Kean is our executive producer. Thanks for listening to the Money Stuff podcast. We'll be back next week with more stuff.

[Cincinnati Insurance Narrator]

On June 10th. Bloomberg Invest is back in Hong Kong. We look at the role Hong Kong plays between China and the world as major powers compete and markets realign. As global investors rethink risk, we'll explore the forces driving Asia demand and the future of private capital. Catch exclusive interviews with top newsmakers, plus a live recording of Bloomberg's Odd lots podcast. Visit BloombergLive.com investhongkong to learn more.

[Matt Levine]

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