Sam Koppelman (1:39)

That's got to be an end of one situation.

Michael Batnick (1:43)

You're smiling. Unbelievable, right?

Nathaniel Horowitz (1:45)

Unbelievable.

Michael Batnick (1:46)

Fraud scam. What are you thinking?

Sam Koppelman (1:47)

No, I do not think that is a fraud. I. I use Claude every day, so I just switched.

Michael Batnick (1:53)

Yeah, within the last like 10 days from chat.

Sam Koppelman (1:55)

Do you use the desktop Claude, or you're using the login on the.

Michael Batnick (1:58)

I use on my. Oh, okay. So this desktop Claude nonsense, you gotta.

Sam Koppelman (2:04)

Get it on the desktop.

Michael Batnick (2:05)

I had to goog. I had to YouTube the video. I couldn't figure out how to install it.

Sam Koppelman (2:10)

You know the best way to figure it out? You're already in the wrong place. Where? You just ask Claude.

Michael Batnick (2:14)

You just ask Claude. I think I did do that.

Sam Koppelman (2:16)

You ask Claude and Claude will show you the way.

Michael Batnick (2:18)

All right, so here's what I did. I wrote myself a code for, like, how to find the nearest bathroom.

Sam Koppelman (2:22)

How'd that go?

Michael Batnick (2:23)

I couldn't figure out how to launch it. Like it worked? Sort of, I guess. But then, like, it didn't. It didn't work.

Sam Koppelman (2:27)

I have to say, one of the apps you're least likely to use when you're in a business. Not me. No, but I'm saying it's like, it's not one where you really can afford much buffer time. Well, you maybe want to hire a pro to build that app, but Claude code can do a lot of other things.

Michael Batnick (2:37)

So what do you use? Are you coding?

Sam Koppelman (2:40)

I mean, I'm doing whatever it is that people are doing with Claude on the desktop. Okay.

Michael Batnick (2:44)

So that's. That's. So I don't. I'm web based. Like, I'm using it like chatgpt, like, very basic.

Sam Koppelman (2:49)

And how have you been finding.

Michael Batnick (2:50)

You guys are making me feel very old.

Sam Koppelman (2:52)

No, no, no, it's all good.

Michael Batnick (2:53)

No, it's unbelievable.

Sam Koppelman (2:54)

You're not gonna be obsolete. It'll be at least a few months before it takes over this podcast. Thank you.

Michael Batnick (2:57)

I appreciate that.

Sam Koppelman (2:58)

I've actually been building a bot. I've been training on the transcripts of your podcast.

Michael Batnick (3:02)

I feel like I'm so unpredictable. You can't train on it.

Sam Koppelman (3:05)

I know. It's true. It's hard to get the AI to know to call someone for putting their headphones on wrong when it's actually on the wrong.

Michael Batnick (3:09)

You can do that because I always butcher ph. Like, you can't program a bot to recreate me.

Sam Koppelman (3:14)

You know, that is famous last words in basic dystopian movies.

Michael Batnick (3:18)

I can't remember sand or grain of salt. Like, to me, they're interchangeable.

Sam Koppelman (3:21)

You just. You just break the AGI.

Michael Batnick (3:24)

I don't think I can by.

Sam Koppelman (3:25)

By messing up everyday phrases.

Michael Batnick (3:27)

It's a happy accident.

Josh Brown (3:31)

You got my good side? Yes, I do. Do I have one?

Nathaniel Horowitz (3:36)

The left.

Josh Brown (3:37)

All right, so, guys, this is the structure of the show today. Um, we're going to go through your names and your recent stories, but before we do that, we just have to nod toward what's going on in the markets right now, and we want to hear what you think. It's a little bit chaotic out here. There are large cap mega cap stocks dropping 12% based on tweets from, like, venture capitalists. It's, like, completely wild. And my guess is that you guys would look at this sort of thing as an opportunity, but maybe I'm wrong. But I'd love to hear what you think. So we'll go there first, and then we're going to do. These are the. These are the names that. These are the names that we want to get to evolve, which you and I talked about. Great rich tech. You guys mentioned wanting to do Sable.

Sam Koppelman (4:23)

Yeah.

Josh Brown (4:23)

Okay.

Sam Koppelman (4:24)

Sable Offshore.

Josh Brown (4:24)

And then I think we can. We do sphere. Can we do a little sphere stuff?

Sam Koppelman (4:28)

I can mention sphere. Okay. Yeah.

Josh Brown (4:29)

All right.

Sam Koppelman (4:30)

And today it's in the news.

Josh Brown (4:31)

Do you have. Do you have restrictions on any. Any of those?

Sam Koppelman (4:34)

No, the one thing we can't talk about, you know, specific action trades or something.

Josh Brown (4:38)

Fight club. Okay. All right.

Nathaniel Horowitz (4:40)

Got it up.

Josh Brown (4:41)

Yes.

Sam Koppelman (4:42)

Three claps coming in. What happened? And friends, episode 229.

Josh Brown (4:51)

Oh, my God. Episode 229.

Michael Batnick (4:54)

Whoa, whoa, whoa. Stop the clock. Here's a word from our sponsor. Today's show is brought to you by Invesco. Looking to add some stability to your portfolio? Invesco's fixed income solutions are designed to help Invesco's team of 181 fixed income investment professionals manage $519 billion in assets, giving them the scale and expertise to navigate any market condition. Whether you're looking for investment grade or munis or other types of bonds, Invesco's fixed income strategies are designed to help find the stability you may need. Visit invesco.com fixedincome to learn more about their comprehensive fixed income solutions and how they can help strengthen your portfolio's foundation. Invesco, let's rethink possibility. All data from Invesco as of September 30, 2025. Fixed income investments are subject to credit risk of the issuer and the effects of changing interest rates. Before investing, consider the fund's investment objectives, risks, charges, and expenses. Visit Invesco.com for a prospectus containing this information. Read it carefully before investing. Invesco Distributors, Inc.

Josh Brown (6:10)

Welcome to the compound and friends. All opinions expressed by Josh Brown, Michael.

Sam Koppelman (6:15)

Batnik and their cast mates are solely their own opinions and do not reflect the opinion of Redholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.

Josh Brown (6:32)

Can you believe that? We've done this 229 times, guys.

Sam Koppelman (6:36)

Amazing.

Josh Brown (6:37)

All right, well, believe it, because it happened. All right, thank you.

Sam Koppelman (6:41)

We were your 229th call.

Josh Brown (6:43)

I mean, it's unbelievable how the time goes by. All right, guys. Welcome to the Compounded friends number one investing podcast. YouTube show, social media series, whatever you want to call it, pretty much in the world. It's documented. I could back that up if anyone needs me to. So excited to have a very special episode today. You guys are about to hear one of the coolest stories that I have come across in the last couple of years. Probably something happening that you have no idea about. But if you're into investing and you're into markets and you're a news junkie, this story combines all of those things into one very cool one. And I can't wait to tell it to you. So thank you so much for watching. Thank you for listening. My guest today, it's a big buildup, right, guys?

Sam Koppelman (7:31)

Unbelievable. Try to live up to it.

Josh Brown (7:33)

Nathaniel Horowitz is the CEO of Hunter Brook Media and Hunter Brook Capital. He was the youngest that venture partner at RA Capital, a biotechnology and healthcare investment fund, by over a decade. He co founded Hunter Brook after extensive experience in company building and investing in the healthcare sector. Welcome, Nathaniel. Thank you for being here. Excited?

Nathaniel Horowitz (7:57)

Can I take you everywhere I go?

Josh Brown (7:58)

Yeah, yeah, it's great. All right. Sam Koppelman is a publisher at Hunter Brook and a New York Times bestselling authority. He co wrote books with former US Attorney General Eric Holder and former acting US Solicitor General Neil Katyal. He built Fenway Strategies into a leading strategic communications firm and has published in major outlets including the New York Times, Washington Post. Right. Teen Vogue and Time magazine. So good to have you guys here.

Sam Koppelman (8:32)

Honored to be here.

Josh Brown (8:32)

Thank you so much.

Sam Koppelman (8:33)

I want everyone to mention Teen Vogue when you come on their show.

Josh Brown (8:36)

All right, guys, I want to be clear.

Sam Koppelman (8:37)

I've never written for Teen Vogue. They never invited me.

Josh Brown (8:39)

Okay, guys, thank you for correcting the record. This has been a pretty momentous two or three weeks in the stock market. And I know AI isn't like your number one focus in the way that you invest, but surely you look at companies that are being affected by this or you think might be affected both from the long side and the short side at Hunter Brook. And I think just to set the stage, Michael, do we want to do this anthropic chart?

Michael Batnick (9:05)

We did it before you got here, but yes. Reset the table.

Josh Brown (9:08)

All right, let's reset the table. Put this up. I have one thing to say about this. It's not like the money from the market caps of these stocks is disappearing. It's definitely going somewhere, but it's not exactly going into these companies that are disrupting everyone because none of them are public. Anthropic doesn't have a ticker. Neither does perplexity, neither does OpenAI, neither does Space X, which now owns X AI. So it's unclear whether or not the money will return some of the stocks that are being sold. When people realize, all right, it's probably not the end of the world. These companies just have to adapt and do better using AI. I don't know how long it takes for us to get from here to there, but it's a really interesting situation. Love to hear what you think.

Sam Koppelman (9:51)

It's absolutely fascinating. I mean, every day I am using these platforms. We were just talking about how we use Claude code on the daily and yeah, I mean, you look at this chart and I think a lot of what's being priced in is just uncertainty about the terminal value of anything. I'm uncertain about the terminal value of myself. And I think when everyone's looking at themselves in the mirror and has that first moment where they're playing around with this stuff and they see it, do something that they're expert at, basically as good as they're doing it, if they really let themselves lean in, you do then have to question your priors and first principles about a lot of stuff. And. And it makes sense that in the interim, as people are trying to figure out how to discount long term, there's all kinds of crazy volatility.

Josh Brown (10:36)

What is the terminal value of me? Is a really scary question to have to rhetorically ask out loud.

Sam Koppelman (10:42)

The good news is that in the great expanse of time, the terminal value of all of us is zero.

Josh Brown (10:45)

That's correct. So what do you think?

Nathaniel Horowitz (10:47)

I think that this is a real opportunity for us because in a world where the value of intelligence is in a way, being commoditized for the first time, the value of actual intel, information about what's actually happening in the world, that's increasing exponentially. And that's what we focus on at Hunter.

Josh Brown (11:08)

How do you draw the distinction? Intelligence? Intelligence is becoming commoditized, but intel is becoming more valuable than ever. How do you delineate between those two things?

Nathaniel Horowitz (11:19)

I think of intelligence as our ability to process, synthesize information, draw conclusions from it. Right. And AI is clearly getting way better at that scary fast. The value of real information, intel that's not widely known. That's not widely known.

Josh Brown (11:34)

Okay.

Nathaniel Horowitz (11:34)

That you have to actually go out there in the world and get. You got to talk to people on the ground, you got to synthesize a bunch of different open source intelligence threads. I think there's an increasing significance to that, especially at a Time of historic disinformation. Okay. Where you don't know what to trust.

Josh Brown (11:52)

Okay.

Michael Batnick (11:53)

The market is in a period right now. It's, it's killing anything where there's even any doubt. So Josh and I spoke about this. In our industry, there is an AI tool that we know about that was announced, released into the wild and it took 10% of Schwab's market cap. Now this company, it's a startup, custodian, Altruist, they're doing very well. But the idea that it's going to take 10% of the market cap in a day is, is, is insanity. Buco Capital this morning, I think he.

Josh Brown (12:18)

Put it well, point out Altruist another example. It's not a public company, right? So the money leaves Schwab, LPL, Raymond James. It's like 25 billion in market cap wiped out yesterday in three stocks. Where does it go? Because it can't go into this startup that's disrupting it.

Michael Batnick (12:33)

So Buko tweeted, there's a non zero chance that these SAS names chop. For years, companies have put up results that show zero, literally zero impact from AI. Like I think Adobe is a poster child. Nobody wants to own it. But every quarter it's record revenue and record profits and the stock is getting murdered. He said there is no valuation support and you can't disprove a negative. You're just not dead yet.

Sam Koppelman (12:55)

Right?

Michael Batnick (12:55)

So what I, Josh and I were talking about this, like, at what point does this end? It's got to be like six more quarters of like, hey, we're still wreck at records, but like the market just doesn't give a shit. We saw another tweet today about real estate companies getting disrupted. And just immediately all, John, we have this.

Josh Brown (13:13)

So it's three, there's three stocks. CBRE, Jones, Lang, LaSalle, Cushman and Wakefield. These are commercial real estate brokerages that have also built service arms. So they're not just transactions anymore. They are market intel analytics for the real estate industry. They're managing properties and like they're doing, or they're doing like property management for corporations that have like 50 different office spaces. They have all these different services. But what it all boils down to is these three companies, by virtue of their position in the real estate brokerage world, have a lot of information. What the stock market did today was say, we don't care what information you have. We're just going to go ahead and make the assumption that people aren't going to call you. They're going to go on ChatGPT and get the answer they're looking for and pay you less. And that's what charts like this are. And we're seeing this like in almost every sector of the stock market.

Sam Koppelman (14:09)

Have you guys seen anything like this before?

Michael Batnick (14:11)

So glad you asked. All right, check this out boys.

Josh Brown (14:13)

The year was 1838.

Michael Batnick (14:15)

No, but seriously. All right, so I had Char kid, John, I'll send this. Yeah, I had Char kid make a chart for us. I said, how many stocks are getting just murdered like on an, on a single day basis? All right, so here's what we're looking at. These red circles represent over an eight day period when you've had at least 115 stocks in the S&P 500 fall 7% or more in a single day. Just murdered. Right. That doesn't happen at all time highs. The average drawdown when that happens is 34%. We're within one and a half percent of an all time high. The only other time that this has happened. I'm not drawing comparisons, but it just is a fact. The only other time we've seen this level of you're dead, you, you're dead. You're dead. At all time highs was right before the dot com bubble burst.

Sam Koppelman (15:00)

And you're not drawing comparisons.

Michael Batnick (15:02)

That's just what it is. Well, it's, I'm not suggesting that we're about to fall out like the market, it's coincidental.

Josh Brown (15:07)

So it's coincidental so far, but never before have we been in an environment where the stock market is at all time, give or take all time highs. But like there's a few hundred stocks being nuked every single day.

Michael Batnick (15:22)

The equal weight index had hit an all time high this morning.

Sam Koppelman (15:26)

Wow.

Josh Brown (15:26)

Right. So the way that I phrased it, I talked about it as like a separation in the market between disruptible and not disruptible. So the companies that are not disruptible, Pepsi and Coke, like there's nothing a chatbot can do to manufacture a liter of Coke. It's just not going to happen. But now they're starting to hit some of these stocks that do sort of have this non replicatable physical, the real estate thing is a good example of that. So that tells me, I almost think we need to have like a market wide spasm to clear out the sphere. I don't think it just fades away.

Sam Koppelman (16:01)

You think there has to be real indiscriminate selling first.

Josh Brown (16:04)

I mean we're there with like big chunks of the market but not the whole thing. So long as that Equal weight is holding up. I don't think we could say that this fear is extinguished.

Michael Batnick (16:12)

Last week, 337 stocks in the S and P were up. So yeah, Palantir getting killed. Apple's down 5% today. I don't know why, it just is.

Josh Brown (16:21)

Microsoft's in a 30% drawdown. Oracle's in a 60% drawdown. Like really?

Michael Batnick (16:26)

So you think like the 337 or the 493 or whatever it is, like we need a washout.

Josh Brown (16:31)

I sort of do. I think. I think we need a puke because it's the same. It's people won't feel better until we get it all out sort of thing. Right.

Sam Koppelman (16:40)

Are you judging that based on your hangovers from growing up?

Josh Brown (16:43)

When I was in a suit already puke, I just needed someone to hold my hair and I needed to get it out and then it couldn't be all okay until that moment.

Sam Koppelman (16:51)

You think that the market needs a night after morning after it's like sort of hair held puke and then it'll all be sorted to normal.

Josh Brown (16:58)

It's sort of trending that way.

Michael Batnick (16:59)

So you guys, this is obviously like not what you focus on day to day, but you can't like not, you can't ignore this.

Sam Koppelman (17:05)

I mean, look, what we focus on day to day. For those listening who don't know what Hunter Brook is, is figuring out what's really going on in the world. We have a newsroom staffed by reporters, former intel analysts, and the whole goal every day is to figure out what's people's perception of reality and then what's actually true. And I love a world where there's actually a big spectrum in terms of potential outcomes.

Josh Brown (17:33)

Well, you're in it because it's like an uncertainty binge going on right now.

Sam Koppelman (17:39)

Correct. And we're not using some crazy new tools. We're using one of the most old fashioned tools that exist in the world, which is journalism. A tool that people for a very long time discounted as this terrible business. And it was when you were trying to monetize the eyeballs you reach. Because if you run a newsroom and you're competing with TikTok and Netflix on eyeballs, you're just going to lose every time they have trillion dollar algorithms that are better than you.

Michael Batnick (18:02)

So I'm sure you guys hear this all the time. Are you finish your thought, go ahead.

Sam Koppelman (18:05)

But if you're a newsroom and you're monetizing the information, what's actually going on in the world, figuring out the Truth, we think that is more valuable than ever at a time when people are just indiscriminately selling stocks, trying to discount futures that they don't know how to underwrite. That's really fun.

Michael Batnick (18:21)

Well, you probably just answered this, you guys, you said you're monetizing this. Are you, are you a newsroom with a hedge fund or are you a hedge fund with a newsroom?

Sam Koppelman (18:30)

We're a media company and our goal is to publish stories that matter to people and readers. We monetize it like a normal media company does with ads or paywalls. With our fund, Hunter Brook Capital, that takes positions in the market and that we disclose. And with our legal business that turns our stories into lawsuits. But it's kind of like asking, is the New York Times a games business, a wordle business, or is it a newspaper? No, it's a newspaper. And they monetize great recipes and great games. And I think it's amazing that with those profits they're able to fund incredible investigative reporting. That's the same aspiration we have just using new tools that people hadn't used before.

Josh Brown (19:08)

So here's an example of the indiscriminate logistics stocks got killed today. And then the stalwart turned this up. Joe Weisenthal, the company that announced this new AI freight product.

Sam Koppelman (19:23)

Karaoke.

Josh Brown (19:24)

Yeah, it's not an AI lab. It's a Florida based penny stock that sells karaoke machines. It's called Algorithm Holdings. And they announced that their semi cab platform in live customer deployments is helping its customers internal operations to scale freight volumes by 300 to 400% without a corresponding increase in operational headcount. The stock went up 26%. It's a penny stock and that knocked billions in market cap off of like.

Sam Koppelman (19:54)

Tens of billions today off of like.

Josh Brown (19:56)

Robinson and J.B. hunt. And so it's completely stupid, but people are paying attention to it.

Sam Koppelman (20:03)

Guys, this is what happens. There's all these headlines that hit the tape, these tape bombs, and a lot of them aren't true. One of my favorite little stories we worked on, normally we do these big months long investigations was there was this rumor that Papa John's was about to get acquired and it hit Bloomberg, Barron's, they wrote full articles about it because some outlet called ABC Money had broken the news that Papa John's was getting acquired at like a 40% premium. The stock spikes up. Our newsroom immediately goes, wait a second, what the is ABC Money?

Josh Brown (20:32)

And no one else did. And no one else did that.

Sam Koppelman (20:34)

And so we start Digging in and we realize that ABC Money is a fake outlet, obviously.

Michael Batnick (20:39)

So do you short that? So I'll tell you.

Sam Koppelman (20:41)

Yeah. So we figured out in the newsroom pretty quickly that this was bs and then we figured out, all right, who runs this thing? Cuz this is kind of an amazing scam, right? It showed up on hundreds of outlets. It's red headline on Bloomberg. People are taking that seriously, right? Turns out it's these guys in Dubai. And the guys in Dubai can be hired. And we wrote a whole piece on this. You can figure out who they are to send these articles to hundreds of outlets. Because media companies are so desperate for content now, right? And then that becomes the narrative. And so we published by the next morning our article about how the Papa John's acquisition rumor was a scam showing the fake ABC Money logo and the real ABC logo. We disclosed that Hunter Brook Capital had taken a short position. It opened down 12%. It just gave back up the gains that it had the prior day. And there's stuff like this happening all the time. And there are not journalists anymore around to scrutinize.

Michael Batnick (21:33)

That's where Nathaniel's bio. Sorry, Nathaniel's biotech skills came into play.

Josh Brown (21:38)

So how did you guys hit upon the idea of we're going to be a combination investigative journalism publisher and we're going to trade on our will, fully disclose. But we're not gonna like, we're not gonna hide in any weird way that our intention is to make money. We're just not doing banner ads. We're doing this. How'd you come up with the idea? And other than me, how many other people did you talk to that said you guys are crazy, Cuz I was definitely scared for you?

Sam Koppelman (22:09)

It is one of those ideas that feels like a bong RIP idea. Like what if you could just fund journalism with the impact of the reporting.

Josh Brown (22:16)

So tell us the story of how you tell us the story of how you came up with it.

Sam Koppelman (22:18)

So look, Nathaniel and I met in at the Crimson, the newspaper.

Josh Brown (22:23)

And we're both the kinds of HBs not to brag. Come on.

Sam Koppelman (22:26)

Undergrad.

Josh Brown (22:27)

All right, Undergrad.

Sam Koppelman (22:29)

And we meet at the newspaper and we're both the kind of guys who would have just become journalists normally. Nathaniel's parents were war correspondents, my parents both writers. And we both looked out at the journalism industry and didn't really see a plausible career. So we go on different paths. I read a couple books. Nathaniel works in biotech. But we had this nagging suspicion that the people we grew up around the Avid truth seekers, the reporters, the curious people, artists, writers, that they actually were secularly undervalued, that that skill set would become more and more and more valuable. And the bong rip idea, unfortunately, neither of us was ever cool enough to really rip bongs. But in the spirit of things, was all right. There's all these industries free riding off of journalism. The investment industry literally trades tens of billions of dollars a day based on headlines this week. Probably, you know, hundreds of billions of dollars a day based on headlines. How much of that value goes back to the organizations that produce the journalism? Bloomberg. That's one. Bloomberg captures a bunch of value.

Josh Brown (23:25)

Yeah. None. We pay as little as possible, like everyone else.

Sam Koppelman (23:28)

As little as possible. And people are scraping websites. And none of that goes back to the journalism industry.

Josh Brown (23:31)

Right.

Sam Koppelman (23:32)

The other industry we saw doing this, and that's not as relevant to your audience, is litigation, where plaintiff side litigation is 2% of GDP. It's huge.

Michael Batnick (23:38)

Whoa.

Sam Koppelman (23:39)

And a lot of that is actually some great investigative reporting. ProPublica does a story on a sleep machine that's poisoning people. It's a billion dollar case. Some firm makes $300 million. Plaintiffs makes $700 million. ProPublica has to go to a billionaire the next year. Exactly. And they have to go to a donor and ask for more money to produce more of that reporting. And that's a common good, that journalism that's creating billions of dollars in value for the economy. It's helping us understand what's going on in the world, and it's in complete decline. And so the idea of Hunter Brook, the thing that got me to convince Nathaniel to quit biotech and go back into journalism, was this idea that we're finally ready for an organization that Josh might think, you know, this is kind of crazy. A lot of people we spoke to might think this is crazy.

Josh Brown (24:20)

Well, I was, like, scared for you. I was worried. I didn't think that it was a bad idea. I thought it was a very risky idea.

Sam Koppelman (24:27)

It's a very scary idea. And a lot of people were like, what are people gonna say about this? And then we launched and we told everyone what we were about, especially at a time when people are skeptical as a default about the news they read, they think, who's benefiting from this? What's the motive of the outlet? That's everyone's default. We were like, what if we're just super transparent? We tell you what we know, we tell you how we know it, and we tell you exactly how we stand to make money from it. And the Only way we're gonna prove to you that this is legit outlet is by being right again and again and again, publishing super rigorous reporting that speaks for itself. And I think that what's amazing is a year and a half into this thing, we've got the best reporters coming to us, asking to work here. We have people taking our stories extremely seriously. Our investigation into the health care industry we released last month was entered into the Congressional Record and cited by both Republican and Democratic members of Congress at a hearing to insurance CEOs. Thank you, thank you, thank you. I'm bringing bipartisan shooter back and. And now we're able to have a flywheel of great inbound stories. We're able to publish them with real credibility. And last year we were profitable in our second year as a media startup, and we're scaling.

Josh Brown (25:36)

That is very rare.

Sam Koppelman (25:36)

And hiring reporters. And we're not hiring them to go aggregate headlines about Papa Johns being acquired that came from some Dubai bullshit outlet.

Josh Brown (25:43)

No, you're telling them, go do what you do to do the best. Find out what's going on.

Sam Koppelman (25:48)

The kind that Nathaniel's parents did. That's how we ended up doing this.

Josh Brown (25:50)

Okay, so what were some of the things that you heard from people when you first were launching or you were like, socializing the idea? Tell me some of the things that people on Wall street said or people in journalism said.

Nathaniel Horowitz (26:04)

A lot of people on Wall street say, well, you know, I'm invested in a hedge fund that's hired a journalist. They help out with the due diligence. What's the difference? And we'd say, that's a former journalist. The best journalists, the people who are really going to get to the truth, they're not willing to give up the byline. They're not willing to give up the public service mission that took them into journalism in the first place.

Josh Brown (26:29)

Oh, they don't want to be just behind the scenes.

Nathaniel Horowitz (26:31)

They don't want to be behind the scenes. They want to be Bob Woodward. And we are able to give them a platform, whereas Sam said they can come and do the highest caliber of business journalism. We're up there with the best business outlets in the world in terms of the caliber of the reporting. And you can read that reporting for yourself across the social media, the news.

Josh Brown (26:52)

So was it that obvious to journalists that you talked to?

Nathaniel Horowitz (26:55)

Totally.

Josh Brown (26:55)

They got it immediately.

Nathaniel Horowitz (26:57)

They would see the way that they would do really important reporting, and then other people would run with that and make the money, drive the impact. And they were chasing clicks or their Work was behind a subscriber paywall. Even their cousins and their friends couldn't read any of the work. So I want to be really clear about how it works in the newsroom at Hunter Brook Media. It's ad free and free to read for everybody. There's no incentive to go out there and chase eyeballs. It's not walled off from access. It doesn't rely on donors or government funding. It relies on the truth. Because I'm an investor, I run the fund. I want accurate information about what's going on out there. We get that from Hunter Book Media at Hunter Brook Capital. And then I can make better investments knowing that this is actually the truth and not some clickbait headline that flashed on the Bloomberg terminal.

Michael Batnick (27:54)

When you guys raised money from legendary investor Mark Lasry early on, credit to you was that, did he invest in the fund? Did he invest in the business? Like how. What funds the media?

Sam Koppelman (28:04)

Part of it, I can speak high level, which is that we raise around publicly to get ourselves started. We raised 10 million bucks, and we did that from Emerson Collective, from Nathaniel's former boss, Peter Kalchinsky at RA Capital, from David Fialco, our founder of General Catalyst and our close friend. A bunch of people who bet on this idea.

Michael Batnick (28:26)

And that's. And they're investing in the company.

Josh Brown (28:29)

Are they investors in the fund or was that general purposes? So spin up the media part.

Nathaniel Horowitz (28:34)

We got the company started first with that capital. Then we went out and raised 100 million as our launch fund, which was harder. I think that as soon as people really scrutinize the logic of why this actually makes sense, both of them were actually pretty easy from a fundraising perspective. And that logic, I think, is pretty clear once you strip away all the novelty of it. It's the same thing that people have been trying to do in this business for a really long time, which is just get an informational edge. Fair game, but through dedicated work, a differentiated perspective. In our case, the type of people you can recruit to an organization like this, who wouldn't go work at a traditional hedge fund or due diligence firm.

Josh Brown (29:24)

So that was my next question. There are people that would look at this and they would say, all right, obviously this makes perfect sense. You get the best reporters, you put them on a story, and once you learn what the truth is, you trade on it. What hedge fund doesn't use their analysts this way? But why do you have to publish? Because there's two things in this industry that regulators don't like, and people can point to something and say that it's one of those two things. Short and distort is one, pump and dump is the other. And I would imagine that was probably a point of hesitancy. You pitch this idea to people, people probably like, all right, but do you have to publish? Can you just find out the truth and let's trade on it like everybody else? But you made the point. Yes, we have to publish. That's how we get Bethany maclean and amazing real journalists to want to be part of this. They don't want to be in the back room cranking out articles that 10 people read.

Sam Koppelman (30:25)

And there's also a reason that Nathaniel and I didn't leave college and go work at a hedge fund. The reason we started this thing was to build.

Josh Brown (30:31)

You guys actually care about. You guys actually care about the journalism. It's not just a means to an end.

Nathaniel Horowitz (30:36)

The house I was growing up in, my parents went into war zones across the world for the Wall Street Journal to get the. To get the truth. It was a core component of the identity I grew up with. And that I then.

Sam Koppelman (30:49)

I know in this room, it might not be a popular thing to say, but in this house, they also really didn't like hedge funds. Right. Okay. This was not a house that was, you know, super capitalist or anything. And I think what people realize.

Josh Brown (30:59)

Well, now you're in a metaphorical war zone. It's not quite what your parents experienced.

Sam Koppelman (31:03)

An information war zone.

Josh Brown (31:05)

An information war zone.

Sam Koppelman (31:06)

But what I think people got from us is we're people with pretty good lives. We weren't going to be the kind of people trying to find some quick edge. We're trying to build a real institution here. It is a startup institute.

Josh Brown (31:16)

You're not going to shortcut by being like, all right, let's write a hit piece on this and try to scalp it for three points, because you can only do that two or three times before people realize what you're doing.

Sam Koppelman (31:27)

Exactly. You have to basically build a reputation for being right as the atomic substructure of everything else.

Michael Batnick (31:34)

So let me ask you guys a dumb question. What is the difference in your eyes, between the work Joshua says and it's like the work that the analysts do at a traditional hedge fund, which is like reportive ish versus like, actual journalism.

Sam Koppelman (31:47)

It's a great question. And this all obviously exists on a spectrum. Like, a lot of the people who work at plaintiffs law firms are incredible investigators, and they know how to get people to talk and tell a story of how a company poisoned a river or poisoned the air. Aaron Brockovich, I think is a journalist. And there's obviously people at the top of the best hedge funds in the world who operate like journalists. They go try to figure out base reality and are able to tune out the noise. For us, the big difference is just this obsession with not being biased by your priors and figuring out how to identify new facts about a situation that people previously didn't understand. There's obviously a lot of overlap. I think if you read our stories and you see the way that we attack various problems, I know we're going to get into a couple of of examples. It'll become clear that what we're doing is sort of categorically different. And then the other cool thing about being a publication is as I mentioned, you then also get a bunch of inbound. One of the things that happens obviously on the street is people do talk their books and try to get other people to cover things. Josh, I'm sure people ask you to talk about names on CNBC all the time, but they also are often kind of possessive about their information and don't want to share it with other people. People really want to give the best information that they've got to us because they don't want their long blown up, they don't want their short squeezed, they don't want their options to expire worthless. And often they want the world to find out about something. You know how frustrating it was to be a wirecard short before anyone wrote about that?

Josh Brown (33:20)

Yeah.

Sam Koppelman (33:20)

You're just in this name and it's going up and up and up and up. And by the way, after that was written about, it kept going up and up and up and up and up and remained very far.

Josh Brown (33:27)

The FT finally picked up the story. Exactly.

Sam Koppelman (33:30)

But it still took years before the fame.

Michael Batnick (33:32)

Are you guys watching industry?

Sam Koppelman (33:33)

No.

Michael Batnick (33:34)

So in this season, Harper runs a hedge fund and she's short a name and she's using the newspapers to publish about her thesis and they're publishing.

Josh Brown (33:42)

If only she worked at Hunter Brook.

Sam Koppelman (33:44)

That's right.

Michael Batnick (33:44)

And it's funny. Oh, Harper. Yeah, I was hunted. Okay, so she's. So anyway, the thesis is published by the newspaper and the market doesn't care and it's going up in her face anyway. And I sort of wonder how that works with you guys, because this is sort of a post shame world. Nobody cares about anything. Nobody has the attention span for more than 30 seconds. You might lay out an incredible thesis. Maybe there's momentum traders in there. You guys are idiots. Like, how do I'm sure you've got.

Josh Brown (34:10)

You got people that like, documented multiple trips to Epstein Island. They're like on Dancing with the Stars, like, we're completely post shame.

Sam Koppelman (34:19)

Look, this is a really important question and it's one we spend a ton of time on. We think this is the time in recent history where if you're a bad actor, you did something really bad, you go to sleep the easiest. You've gone to sleep in a very long time. You don't think there's going to be some journalists calling in the morning, and if they do, you think you're going to be able to shrug it off. You don't think your stock's going to be impacted. You don't think you're going to get sued over it. You definitely don't think the government's coming if you're a bad actor. And we think that that is a great opportunity in this golden age of grift and graft to buy the diploma on integrity, to buy the dip on doing business the right way.

Josh Brown (34:58)

Right. Like the wheel will turn and those things will come back into vogue, hopefully.

Sam Koppelman (35:03)

Just don't know when gravity has always existed. And I do think that what we found is, yes, on the order of a week or a month or three months, we can publish a story. And if the shareholder base is not good faith, like nobody actually owns this thing because they believe in it, then it's very hard to convince them in one way or another. That's not our mission. Our mission is to just inform people and then over time be proven right. Because eventually, when hundred brooks existed for 10 years, when we publish, the discount that's taking place over a long period of time before the market necessarily understands that we're going to be right, collapses because people know how the story ends.

Michael Batnick (35:39)

How good does that feel when you're right? I mean, you've been smiling this whole episode. I love your energy. You just got a big smile on your face. How good does it feel when the market agrees with you?

Nathaniel Horowitz (35:47)

It's extremely gratifying. It's also informative when it doesn't. Right. It's a great feedback loop. You can get educated really quickly on how people perceive what you're saying about the world. And yeah, there have been times where we have not been cynical enough.

Josh Brown (36:08)

Yeah, okay.

Nathaniel Horowitz (36:10)

But there have also been times where we've been too cynical. You know, there's been a couple of times where Hunter Brook Media has sent over to the fund really compelling investigative journalism about a company that they're planning to publish. And I Read it and think. God, that's great journalism. Like my dad, he passed away a few years ago. My dad would have loved that. That was exactly his kind of thing. I'm not going to trade on that. I'm not going to short that name because I don't think these shareholders are good faith. I don't think people care about this.

Josh Brown (36:40)

Oh, you think, like it'll just go over everyone's head and people won't get it.

Nathaniel Horowitz (36:44)

I'll give you an example. We have incredible journalist Sam recruited from the Crimson, who went to Danville, Illinois, factory town and revealed that the factory of a multinational conglomerate was poisoning people in that town. And we'd had a bunch of reporting like this. We recruited a great reporter from the Wall Street Journal last year who's. Who's been running our beat on environmental reporting. Scoop after scoop about just some terrible stuff that's happening with the collapse of the EPA regulation around health and well being. And some of those stocks hadn't budged on that reporting. So this looked similar, Pat, this was.

Sam Koppelman (37:25)

A literal how the sausage is made story was about a sausage casing factory, okay.

Nathaniel Horowitz (37:29)

Over 100 years after Sinclair. Exactly the same thing. Exactly, exactly the same thing going down. That stock absolutely collapsed upon publication. I didn't have a short on. It turned out that it's basically Spain.

Sam Koppelman (37:47)

Where people still care about shit.

Nathaniel Horowitz (37:48)

You're not allowed to poison people in Spain, I guess.

Josh Brown (37:51)

Oh, it was. The company was domiciled in Spain and the Spanish investors really added to that journalism by selling.

Nathaniel Horowitz (37:58)

And within 48 hours.

Josh Brown (38:00)

Yeah.

Nathaniel Horowitz (38:00)

Local Spanish news outlets had found out the company was doing similar stuff in other places. The company itself had to engage in good faith with shareholders and regulators and clean up their act. They put out multiple press releases about their commitment to doubling down on safety and wellbeing at this factory. And across their whole operation, real accountability driven quickly because the share price moved. But I was too cynical as an investor because I thought, wow, you thought.

Josh Brown (38:26)

They'Ll just get away with it. There's no trade here.

Sam Koppelman (38:28)

Exactly.

Josh Brown (38:29)

Do you guys worry about people who are long a stock where you burst the bubble? And by the way, for the listener, we're going to get into some specific cases that Hunter Brook Media has been involved with. And they're not all shorts. I just want to put this out here, but do you guys.

Nathaniel Horowitz (38:46)

That's a really important point. We ran NetLong book in 2020.

Josh Brown (38:48)

Yeah, yeah. So I want. I don't want people to think that you guys are just like out there looking to destroy Companies.

Nathaniel Horowitz (38:53)

No, A lot of the time you're digging into a company that sounds too good to be true.

Sam Koppelman (38:57)

Yeah.

Nathaniel Horowitz (38:57)

Turns out it actually is as good as it sounds. Or you find, you know, one company is doing shady stuff, but another company is really high, high quality and that scammy company has been taking all the oxygen out of the room. But there's a real.

Josh Brown (39:07)

So this is important because I do think that there is a, a popular image of the activist short seller, which is somebody that's out for blood and somebody that wants to right wrongs in the world and make people pay and then jump up and down on the corpse of a company that they deem to be morally inferior to what their own standards are. There is that. And I know that's not the truth because I do know people that are in the short selling world. But like, that is sort of like what the popular perception is. But you guys are coming at it from the point of view where if this company needs to be exposed, we will expose them. But sometimes we will think one thing and then the other thing will be true. And that might be just as profitable. And that is, I think, where you guys might differ from traditional journalism. In real journalism, if there's no story there, then that's it, let's move on.

Nathaniel Horowitz (40:02)

There's nothing there. If it bleeds, it leads.

Josh Brown (40:03)

And if it doesn't bleed, then why are we talking about it? Whereas you guys might say, hey, this is actually a bullish story and we thought it might be bearish, or we didn't think anything, we just wanted to learn about it. So I think that's a really important distinction.

Sam Koppelman (40:16)

That's exactly right. It's part of what makes it journalism too is it's just curiosity. Like you're just trying to actually understand something. And by the way, some stories start as leads and they don't become stories at all. It's like this company is basically what people think. I think at anyone's fund there's a lot of ideas that get circled around.

Josh Brown (40:33)

Do you worry about the impact that you have on a stock price though, where there are a lot of investors and then you publish something that turns the market off to a stock? People, like real people do lose money. I would imagine you might think of that as like, well, the truth is the truth. What do you want from us? But the people that are on the receiving end of that sort of street justice, they may not feel the same way about you.

Nathaniel Horowitz (40:57)

I actually think a lot of people save money. I'll give you a great example Hunter Brook Media has been reporting for almost a couple years now on this pipeline off Santa Barbara, California, which we can talk about a bit more. But you know, if folks had read the early reporting and realized how shady the company trying to relaunch this pipeline actually was, and they had sold their shares based on that reporting, they would have saved a ton of money, right? Because it did turn out that these guys were sketchy.

Josh Brown (41:31)

You were the first people to point it out and then everyone figures it out after.

Sam Koppelman (41:34)

And look, I think this is one of the masterstrokes of the market that I have to give it credit for is that they make it seem like if a short seller writes a story about a company, let alone a journalistic outlet like Hunter Brook, it's their fault. When it turns out that the company's claims weren't true, it's your fault. Whereas when a company does pump after pump after pump, BS press release after BS press release after BS press release, does a guide that's super ambitious, cozies up with shareholders, does a meeting that's a little bit sketchy, where they're telling people next quarter is going to be pretty good, they're sandbagging their guide, whatever it is. When a company's trying to pump its stock and then it collapses, people don't blame those companies in the same way they think those companies were trying their best. They had an ambitious idea, they were super excited about it themselves. And I think that the wrongdoing there is the people putting froth and misinformation and BS into the market. And in a world where there's basically no journalists to even scrutinize whether companies claims are real, It's a very useful counterbalance to have a couple people who are actually digging into companies claims. Particularly when the sell side, as you all know, is basically happy to gobble.

Michael Batnick (42:51)

Up whatever tells them the Mark Twain quote. It's easier to fool someone than to convince them that they've been fooled. People do not like being embarrassed that they fell for the bullshit, even if it's a lie. So I'm wondering, where do you see the lies? Like where do the stories come from? Is it you're looking at the financials and you say that's weird and then you go digging? Or is it tips like where do these stories come from?

Sam Koppelman (43:12)

It really does run the gamut. A lot of stories come from someone telling us this doesn't seem right. Other stories come from systematic identification of various flags. So for some of the environmental stories, that's us systematically figuring out what Factories are emitting a lot of toxic chemicals and then using health data to figure out, are there cancer clusters near there that's systematic and emergent. And you can build those kinds of signals all the time. But a lot of this stuff just comes to us as ideas where people are like, can this possibly be true? Because it doesn't seem like it.

Josh Brown (43:43)

You must look at, like. Or maybe you don't, like, look at the leaderboard for the day in the stock market and see a $200 million company go up like 3x in a day, Right? Like, like. And just look at that. Like, what the hell is going on here?

Sam Koppelman (44:02)

You know, it's funny, those aren't usually necessarily the good shorts, at least not right away.

Josh Brown (44:06)

Not. Not the first day.

Sam Koppelman (44:07)

The first couple of days with those. You never know how long a pump is going to go. But that is often when we start scrutinizing a company because we're trying to understand if what they're saying is true. And the market was mispricing this by 200%. Right. Because it should be updated. Well, that's a really interesting news story. And if it's bs, that's also pretty.

Josh Brown (44:25)

All right, so let's get into some of the case store case studies or the actual stories that you've done that worked out or were trades or. Okay, so the first one we're going to talk about Evolve. You guys note this is a company people thought was a fraud, but you realized it was a good business last year when its numbers were suspended. It was. Sorry, it was out of compliance with the sec. So what is. What is the story behind Evolve and what can our listeners take away from a situation like this?

Nathaniel Horowitz (44:56)

Have you guys spent any time with.

Josh Brown (44:57)

Eric Adams, the mayor? Only at Zero Bond, which I think was his office while he was the mayor.

Sam Koppelman (45:04)

It was also his home, I believe.

Josh Brown (45:06)

Because his real home was in New Jersey. So he loved the private clubs. Like, he was really into, like, any. Anywhere there was a membership.

Sam Koppelman (45:12)

I will say, at least for the first couple years, I don't think anyone ever had as much fun as mayor.

Josh Brown (45:16)

Probably not.

Sam Koppelman (45:16)

Okay, so that's a funny question Nathaniel asks because Nathaniel had one meal with Eric Adams that we'll get into shortly.

Josh Brown (45:24)

Was he a vegetarian?

Nathaniel Horowitz (45:25)

Allegedly.

Josh Brown (45:26)

Allegedly. But you saw it. So that was red flag number one.

Sam Koppelman (45:29)

He ordered the meatballs. Listen to this. So weird. Listen to this. Listen to this. So we see that this company Evolve. You've probably walked through one of their metal detectors at a sports game. Those are the metal detectors. You can just Walk through, and they can tell if you've got a knife or if it's just your wallet.

Josh Brown (45:45)

Now they really can't tell anything. Right. Well, do they actually work?

Sam Koppelman (45:48)

This was our initial question as a newsroom.

Nathaniel Horowitz (45:50)

It sounded too good to be true.

Sam Koppelman (45:52)

So we got this. They got this contract with New York. Eric Adams came out, showed Evolve, and he said, we're going to put Evolve in the subway. And I thought this was weird because as a newsroom, we dug up that Evolve CEO said in an interview that his devices don't work underground.

Josh Brown (46:12)

Wait, why?

Nathaniel Horowitz (46:13)

So why would he be paying to put these things on the subway?

Sam Koppelman (46:18)

And so that's when Nathaniel's one experience with Eric Adams set off some red flags. Because. Nathaniel, do you want to answer the vegetarian question?

Josh Brown (46:26)

Wait, how did you get in front of Eric Adams to even.

Nathaniel Horowitz (46:28)

That's a longer story. But basically, we figured that keyed us off that maybe the mayor wasn't on the up and up, maybe the. This company wasn't on the up and up. Two things I've only done once is lunch with Eric Adams and lunch at Nobu. It's not exactly known as a vegetarian establishment.

Michael Batnick (46:45)

Yeah, yeah.

Nathaniel Horowitz (46:46)

So Sam in the newsroom start really digging into this company. And at first, I was really disappointed because the company sort of blew up before I even had an opportunity to trade on it.

Sam Koppelman (46:56)

So we start digging in. Nathaniel tells me he went to a meal with Eric Adams. Eric Adams ate meat. And we saw that these guys claimed that their device worked underground. They had a deal with the subways. And we had the CEO saying it doesn't work underground. So we started out thinking this is a fraud. That was our baseline. And then as we're digging into our reporting after I did, like, a quick little TikTok video being like, this thing doesn't work underground. What the hell? They suspend their financials. They're out of.

Nathaniel Horowitz (47:18)

CEO is fired. CFO is fired. It looks like they're going to be delisted. Stock plummets.

Josh Brown (47:23)

Is this. So this is a NASDAQ ev.

Nathaniel Horowitz (47:26)

Lv.

Josh Brown (47:27)

Evlv.

Nathaniel Horowitz (47:28)

That's right.

Josh Brown (47:28)

And it's nasdaq. Okay. And they just say, we're not going to. We can't stand by our quarterly or existing financials.

Sam Koppelman (47:35)

There's some fraud in the system. So we start looking into this as a newsroom halt.

Josh Brown (47:38)

The Stock opens down 45%. Yeah, yeah, yeah.

Nathaniel Horowitz (47:41)

But what the reporters start figuring out is they're digging into the story, is, sure, maybe it turns out the numbers need some corrections. The management team was A mess. But people love this technology. It's the best in class by far.

Sam Koppelman (47:55)

And we interviewed people who ran stadiums and they said it used to be that in the first quarter there were people out in line and now they're butts in seats, beer in hands. They're like, okay, sounds pretty good. Can't wait to go interview people from schools. That's one of Evolve's big markets. Because we live in a crazy country where they have to make sure that people aren't bringing guns into schools. And we would interview the superintendents who would start crying on the phone. This thing makes me know my kids are safe. I'm like, there's Evolve paying these guys, like, what's going on?

Josh Brown (48:24)

Wow.

Sam Koppelman (48:25)

But it turns out the kids were.

Nathaniel Horowitz (48:26)

Getting to class on time instead of getting held up at the entrance to.

Josh Brown (48:29)

The school, so that way they could read good.

Sam Koppelman (48:32)

And by the way, Evolve not to. I know this isn't necessarily the wokest audience, but it's pretty cool that Evolve's technology means you don't have to go pat down all these kids like they have in metal detectors around the country. So anyway, we start digging into this. People love the technology.

Josh Brown (48:46)

Time out, though. Are you in contact with anyone at the company yet?

Sam Koppelman (48:49)

No. Or you don't do that? No, no, no. We're just digging in. We don't wanna get biased by what the company's telling people.

Josh Brown (48:54)

You don't want to like the CEO, and then it's like, gosh.

Nathaniel Horowitz (48:56)

And look, anyone on Wall street with a few bucks to invest can get on a call with a management team. There's no differentiation.

Sam Koppelman (49:01)

But by the way, here they were also in a long, long quiet period because their financials were out of date. So anyway, we figure out that Evolve actually has amazing tech. And despite being investigated by the sec, the ftc, all these other people, these customers are not leaving. In fact, Evolve is a growing business penetrating these huge markets from schools to hospitals, you can see it all across New York to sporting events. And we're like, okay, this is a pretty interesting story. So we end up publishing a story that this very sketchy seeming company, Evolve, actually has this amazing product and this growing business, and I don't know what.

Josh Brown (49:34)

The exact bullish article about a company that hadn't reported earnings in a while, Correct?

Sam Koppelman (49:38)

In a really long time. And then to be clear, these guys are crazy.

Nathaniel Horowitz (49:41)

I told you, the kind of company sell side doesn't even write about. They just suspend coverage.

Sam Koppelman (49:46)

Yeah, yeah, so. So there's an information vacuum. And we realized, oh, Shit, this is a real business and the thing goes down to like 2 bucks 220 or something. And we also tried to figure out when they would restate earnings. And that involves a guy with a bald spot who you could see from a garage across the street, which is kind of neither here nor there. But it became clear that they were working on weekends and that seemed like a good sign.

Josh Brown (50:09)

You saw like an accountant coming and going from their headquarters.

Sam Koppelman (50:12)

Correct. I don't want to creep anybody out.

Josh Brown (50:13)

It's like a stakeout though.

Sam Koppelman (50:14)

I don't want to. Yeah, I don't want to creep anybody out. But that's reporting. We were trying to figure out what, what's actually going on with this company. They restated.

Nathaniel Horowitz (50:19)

We were also doing open source intelligence about where these devices were all over the country, tracking each time people signed up and put some new ones that.

Michael Batnick (50:27)

They bought the stock.

Nathaniel Horowitz (50:29)

So the story disclosed that Hunter Brook Capital was long the stock. They restate their financials. Turns out that they did have an accounting error, but it was de minimis, like $4 million stock had lost hundreds of millions of dollars.

Michael Batnick (50:41)

They.

Sam Koppelman (50:41)

Over the actual.

Nathaniel Horowitz (50:43)

No, they needed to clean house. They had accounting issues, they had management issues. They had this great technology, great business that was not being properly appreciated. They did need to do a turnaround. Okay. But they restate their financials, they release these growth numbers, which are incredible. They settle with the ftc, the SEC wraps up its investigation and Evolve thrives from there.

Josh Brown (51:04)

Okay, so they get in compliance, they're reporting numbers again, sell side resumes, coverage. What does the stock, what did the stock do?

Nathaniel Horowitz (51:12)

Just, it went up to something like eight and a half bucks last year.

Josh Brown (51:15)

So two to eight.

Michael Batnick (51:16)

Amazing story.

Sam Koppelman (51:17)

Yeah. And then by the way, Evolve, now that was a while ago, you could.

Nathaniel Horowitz (51:23)

Have read the article on the website.

Sam Koppelman (51:25)

But listen to this. This is kind of fun because just it ties into everything you're talking about. Yeah, Evolve's pretty interesting again as a story to me and can't comment on ongoing reporting obviously, but it's gotten caught up in this software sell off because Axon, you know, the big security company has sold off. And Evolve just has a lot of flows with Axon and is down a.

Nathaniel Horowitz (51:43)

Bunch, even though there's totally different businesses.

Sam Koppelman (51:46)

Axon does tasers and it does body cams and all that stuff.

Josh Brown (51:50)

Right.

Sam Koppelman (51:51)

Anyway, Evolve is obviously not a software company. It's hardware in the world in these security systems, but it's in all of these same baskets. Right.

Josh Brown (51:58)

How would AI disrupt a physical metal.

Nathaniel Horowitz (52:02)

Detector in Fact, they use AI to make it better. Right.

Sam Koppelman (52:05)

Which is just a fun situation because the market's, again, sort of indiscriminately selling this name. And I think a lot of what's going to happen over time is it's going to become clear to people.

Josh Brown (52:14)

Hold on a second.

Sam Koppelman (52:14)

This selling is audible.

Nathaniel Horowitz (52:16)

No, don't do it.

Josh Brown (52:17)

Bob is in play.

Sam Koppelman (52:20)

No, no, no, no, no. But it's pretty funny.

Josh Brown (52:21)

All right, let's. So what. What's. I don't want to say.

Michael Batnick (52:24)

Let's talk about film.

Josh Brown (52:24)

Eric. So what was the. Eric Adams. He's just made a dumb deal for the city, or he made a good deal.

Nathaniel Horowitz (52:30)

That was the prior management team. They had all kinds of weird things going on.

Josh Brown (52:33)

All right.

Nathaniel Horowitz (52:33)

But the new management team seems solid.

Michael Batnick (52:35)

All right, let's do why Phil Mickelson pump again, energy stock.

Sam Koppelman (52:38)

It's such a good question, isn't it? I still haven't figured out the exact answer to that question. I will say that Phil Mickelson did tweet that he was on the board of a different company with the CEO of the energy stock. Then he deleted that tweet because I think.

Josh Brown (52:52)

Well, start from the beginning.

Sam Koppelman (52:54)

I'll start from the beginning.

Josh Brown (52:54)

Sable Offshore. What is this?

Sam Koppelman (52:56)

I'll tell you about Sable Offshore.

Josh Brown (52:57)

Okay.

Sam Koppelman (52:57)

Nathaniel alluded to it earlier. Sable Offshore is kind of a very exciting and crazy premise for a company. Here's what it is. There was a pipeline in California, and it led to one of the biggest oil spills in American history. And Exxon took over that pipeline and spent seven years trying to get it online. And Exxon ran into the gauntlet of California politics in oil and gas. Trying to restart a pipeline in a place that's obviously very hostile to oil and gas in general, and particularly if your pipeline led to this giant was.

Josh Brown (53:29)

Already a problematic piece of infrastructure.

Sam Koppelman (53:32)

So then there's this guy named Jim Flores, better known as Big Jim Flores, on account of his size. He makes a deal with Exxon. Exxon doesn't want to have to retire. This pipeline cost billions and billions of dollars to get rid of the project. So Big Jim says, give me a huge loan. He gets a massive loan from Exxon. I'll take it over and let's restart this thing.

Josh Brown (53:52)

And if it works, what does Exxon get out of this?

Sam Koppelman (53:54)

Exxon doesn't have to retire the pipeline. They probably get bought out of the loan.

Josh Brown (53:58)

Okay.

Sam Koppelman (53:59)

And so they get to walk away without having to retire.

Josh Brown (54:01)

Who is Big Jim Flores, though, to even have the ability to get Exxon.

Sam Koppelman (54:05)

Say he's had kind of a wild up and down career in oil and gas. Worked at Freeport.

Josh Brown (54:10)

You've been on the Hellraiser.

Sam Koppelman (54:11)

There were some wins, some losses. All right. You know, I think he probably watches There will be blood aspirationally.

Josh Brown (54:17)

Okay, got it. Got it.

Nathaniel Horowitz (54:18)

And his past oil and gas company went bankrupt. Also Sable in the name. He's always been trying to do basically the same scheme.

Sam Koppelman (54:27)

And so it's this big sort of quixotic mission to restart this project. And Phil Mickelson gets really excited about it. And we wrote about the company in 2024 when they said they were going to be online in October of 2024 after having originally when they were spacing, saying they were going to be online at the beginning of 2024. And we wrote a story about all of the various regulatory hurdles and we were like, everyone should know.

Josh Brown (54:48)

Red flags. A celebrity B former spac.

Sam Koppelman (54:51)

Correct, correct. Though at that time, Phil Mickelson wasn't involved. And so they said, we're going to be live in October. And we said, there's no way you're going to be live in October. Anyway, the delay it from October to November, November to the new year 2025, they start getting excitement and then Phil Mickelson starts tweeting about this company and everyone's saying, if this thing's live, it's going to just print money. It's going to print oil. It's going to be this incredible, incredible story. Pump oil, print money. Anyway, we keep digging in and it becomes clear to us that the company is still not telling the truth to anybody. And eventually sabol hit $30 and they kept hitting these California regulatory hurdles. So then it fall to 25, then it'd fall to 18, and then eventually it falls to like 10 bucks. And at this point, people are pretty mad at Phil Mickelson.

Nathaniel Horowitz (55:43)

Right?

Sam Koppelman (55:43)

That makes sense.

Josh Brown (55:43)

He became the face of this. He was the face of this thing.

Sam Koppelman (55:46)

Telling everyone that they should buy it. And so that's when people started leaking me their chats with Phil Mickelson, including a group chat that Phil Mickelson was in where everyone was pumping the stock. But they were also saying things like, Phil said this in one of the messages. Just got off the phone with Jim, the CEO. There's gonna be an announcement later today.

Josh Brown (56:04)

Oh, that's a no, no. They don't like that. Regulators don't like that.

Sam Koppelman (56:07)

You're not really supposed to be saying that. I'm not a lawyer. I'm not casting Aspersions. On anybody. But we had those group chat messages and then we had this audio recording of the CEO of the company talking to investors. By the way, Sable called this audio recording AI in its first response to it, and then it became clear it was true. But you can imagine that becoming a better excuse going forward. Kind of scary from a journalistic perspective. And in the call, Sable basically admits it needs to do a big capital raise, which it hadn't told the market it needed to do anyway. We published that story on Phil Mickelson's messages and on the fact that Sable needed to do a raise. And pretty quickly, everything starts spiraling for Sable. And last week they just disclosed publicly that they received subpoenas from both the SEC and SDNY related to Hunter Brooks articles.

Michael Batnick (56:54)

So amazing.

Sam Koppelman (56:54)

We'll see how the story turns out.

Josh Brown (56:56)

Now, will your, will your journalist get called in as like a witness potentially? Like, who knows?

Nathaniel Horowitz (57:02)

You have to imagine how bad you have to mess up as an oil and gas company in a fight with California for the current DOJ to send you a subpoena.

Sam Koppelman (57:12)

Especially given that the guy doing the. I will just call it positive information sharing about the company was a golfer. I mean, I didn't have the Trump administration subpoenaing a golfer who's trying to help out an oil and gas company. That's how bad the facts were here.

Josh Brown (57:29)

So, guys, what would you say to the listeners who are picking their own stocks building? Because these are like very off the beaten path types of stocks, so I would imagine they're not widely held by retail until they start to pump. Right. And I think people, retail investors, intuitively understand a stock that goes from like 5 to 30. Either they have done something technologically remarkable or there is some bullshit. Like, I think people get it, but they still want to sort of be involved and be along for the ride. What would you tell people about just the current climate and how careful they need to be about being involved in those types of situations?

Sam Koppelman (58:13)

I wouldn't want to give anyone.

Josh Brown (58:15)

You're not giving advice.

Nathaniel Horowitz (58:17)

I'll be clear. You know, not providing investment advice, not providing legal advice. We hope people do their own research and we hope that do the level of research.

Sam Koppelman (58:29)

Here's what I say. On just a very human level, if you're looking to your left and your right and the guy you're playing your basketball game with is checking his crypto app.

Josh Brown (58:36)

Yeah.

Sam Koppelman (58:36)

Which happens to me all the time.

Josh Brown (58:37)

Yeah.

Sam Koppelman (58:38)

Or you start hearing from your cousin that it's really time to buy silver. Yeah, my cousin's actually a very smart investor. I want to be clear. This was one.

Josh Brown (58:44)

No, this is the other cousin.

Sam Koppelman (58:45)

This is, this is the other cousin. All of them wanted to buy silver.

Josh Brown (58:48)

That's right.

Sam Koppelman (58:49)

But if you start hearing those things, people in your life and it seems like shit. It's so easy. Everyone's making so much money buying this stuff. I would just say take a breath.

Josh Brown (58:57)

Yeah.

Sam Koppelman (58:58)

And think it's probably not that easy.

Michael Batnick (58:59)

My brother in law asked me about Oklo right there.

Sam Koppelman (59:01)

Perfect. Yes. It's very helpful if you have some people in your life.

Michael Batnick (59:04)

Michael said, I said them all in.

Josh Brown (59:07)

You didn't hear this from me, but I got the nod.

Sam Koppelman (59:10)

You said that was your cell signal.

Josh Brown (59:12)

I got the nod.

Michael Batnick (59:13)

Oh, of course. I gave him sober advice like you gentlemen would.

Sam Koppelman (59:16)

Totally, totally. What's your, what's your number one? Contra. Like you see something happening and you're like, oh, oh. So gotta go the other way.

Michael Batnick (59:23)

I am of the opinion right now that almost everybody knows almost everything. So there's nothing that I would see publicly. But when my brother in law is asking me about a stock and he's a, he's a musician, he's an artist.

Josh Brown (59:34)

Like, it just means that it's already gone up a lot.

Sam Koppelman (59:37)

No, it means that doesn't mean that.

Josh Brown (59:38)

It'S a bad investment.

Michael Batnick (59:39)

He's the last person to know.

Josh Brown (59:40)

Right. Right.

Michael Batnick (59:42)

And we all have something like that.

Sam Koppelman (59:43)

In our life for sure.

Josh Brown (59:45)

So where are we going next with the media company, the fund or both?

Nathaniel Horowitz (59:49)

Well, we're always on the hunt for news stories, so I won't share any advice with the audience, but we would certainly love to hear from the audience.

Sam Koppelman (59:56)

Yeah. Ideas@Hunterbrook.com the website is with no vowels. H, N, T, R, B, R, K.

Josh Brown (60:00)

Let's not gloss over that. So ideasunterbrook.com Correct.

Sam Koppelman (60:05)

Whoever. And if you own the domain name hunterbrookspelledout.com Please call me back. I've been trying for like two years, but ideas on Hunter Brook.com Anything you think is just off about the world. Like you think there's some idea you're really excited about, you think people don't understand it, or there's something that you think seems too good to be.

Michael Batnick (60:21)

John's going to email you guys four times a week.

Josh Brown (60:23)

Be clear, just so you know, the reach of the show is really big. To be clear, you guys are not looking for such and such stock is overvalued on next year's earnings.

Sam Koppelman (60:33)

Definitely not. It has to be a real story, by the way, to be Clear compliance reads through all of our emails.

Josh Brown (60:38)

Right.

Sam Koppelman (60:38)

So, Fitz, our general counsel is gonna have a very long day. If you send me bad ideas, send me your good ideas.

Michael Batnick (60:44)

You guys should look for bullshit like this. This. There's something going on here.

Nathaniel Horowitz (60:47)

Correct or uncovered gems. I think every.

Sam Koppelman (60:50)

No, but on this podcast, we're gonna get 10,000. No, that's such.

Michael Batnick (60:53)

But. So I love.

Sam Koppelman (60:54)

I thought Josh is gonna cut this out of there.

Josh Brown (60:56)

I'm actually scared for you. The volume of email.

Sam Koppelman (60:59)

We're gonna have Claude code read all.

Michael Batnick (61:00)

The story about the. The technology with the booths is such a. Such a cool one. What gets you guys more excited is it ideas like that where people have discarded the company for illegitimate reasons or for reasons that are overblown or. This is total bullshit.

Sam Koppelman (61:16)

I'd love to tell you that I feel equally excited about bullshit.

Michael Batnick (61:19)

It's the bullshit. Right?

Sam Koppelman (61:20)

The truth is, it's really fun to call out bullshit. And it does feel like a big part of the mission for journalism. But really, the excitement around a story is almost always measured in the delta between other people's understanding of it and mine. Like that feeling of like, you have a secret. Yeah, that's the best feeling. So I figured something out about the world people didn't understand.

Michael Batnick (61:41)

Let's talk about another long that you guys had. I don't know how much you could say, but the sphere. So I remember, like a year ago, people somebody find them. I was like, do you see how much money they're losing? So how do you look at a story like that and look past the current financials?

Sam Koppelman (61:54)

So I'll say we didn't get to.

Josh Brown (61:55)

Publish that story because fear is up, like 4x in the last year or something.

Sam Koppelman (61:59)

So here's. Here's the issue with fear. I hate James Dolan. I'm a huge Knicks fan. I remember the Eddie trick.

Josh Brown (62:06)

No, no, no, he's doing good now.

Michael Batnick (62:08)

Now you love James Dolan. You want to be like the game.

Sam Koppelman (62:11)

I definitely don't want to alienate James Dolan. If he's a listener to this podcast, you hate him.

Josh Brown (62:16)

You will never be.

Sam Koppelman (62:20)

A trauma. It was a childhood trauma.

Nathaniel Horowitz (62:22)

He's clearly over.

Sam Koppelman (62:24)

And so, anyway, we start figuring out. We have some data. People sent us that the wizard of Oz show just worked. It's kind of like a clinical trial. Like, we weren't sure if this IP thing was going to work. And then everybody started coming to Sphere for it, and they were making so much money on the down days, the days where there weren't concerts.

Nathaniel Horowitz (62:44)

Anyway, a Newsroom source had come up with a really clever way to figure out, based on online information, basically exactly what Sphere's sales were before maybe even the company itself really knew what those sales were. And that was clearly a huge edge. And that's the kind of thing folks often will just send to the newsroom because they think it's really interesting.

Josh Brown (63:04)

Okay, so in year one, the Sphere, basically, they have like Dead and co, they have U2 and they have the Eagles, but it's unclear, like, okay, what do you do the other 250 nights a year? And then they have this sort of futuristic science documentary which I went and saw too. I'm so, I'm so into this fear, by the way. So I saw that one too, and I liked it. But then it's like, all right, it's a novelty. You went, you saw, you too. Are you going back? And then the wizard of Oz thing, it's a revelation. It's like, wait a minute, they could take an 80 year old movie, they could do some magic with the sound and the, the environment and the Sphere, put it back out and sell more tickets than a brand new blockbuster film. And that's.

Sam Koppelman (63:48)

And they can do it day after day after day.

Josh Brown (63:50)

And think of all of the possibilities. Think of your hundred favorite movies ever. How much would you love to go see it at the Sphere Reimagined?

Sam Koppelman (63:59)

It's unbelievable. It's crazy. And by the way, I just want to be clear, the reason I mentioned the Knicks was not personal. It was that I put it as kind of a low priority in the newsroom. We didn't rush out the story because I was like just dispositionally disinclined to believe that Jim Dolan had figured out how to get people to a live event in a way nobody else had.

Josh Brown (64:15)

Yeah.

Sam Koppelman (64:16)

So anyway, Hunter Capital, thankfully had built a bit of a position based on this, but Bloomberg ended up scooping us on that story. They published the story about the blockbuster.

Josh Brown (64:24)

But you made the money. So you didn't get the credit for the story, but you made the money.

Sam Koppelman (64:27)

Yeah, I want to credit Bloomberg for that particular story.

Josh Brown (64:30)

Okay.

Sam Koppelman (64:30)

They did have it.

Josh Brown (64:31)

All right, guys, you have fun on the show today.

Sam Koppelman (64:32)

This is the best.

Nathaniel Horowitz (64:33)

Thank you guys for having us.

Josh Brown (64:34)

All right, so we're going to have a brief intermission and then we come back and do another hour and a half.

Michael Batnick (64:39)

I love what you guys are doing.

Josh Brown (64:41)

I think it's one of the stories. Thanks for having listening to you and I'm not afraid for you anymore. I actually think that people are going to now start to imitate what you're doing, because it works. It's explicable. It's. It seems like you're having fun.

Sam Koppelman (64:54)

Oh, my God. Having the most fun.

Josh Brown (64:56)

And people. Journalists are getting paid. And I. I mean, who doesn't.

Sam Koppelman (65:00)

Who has to say, I wouldn't promise this every year, but journalists got bonuses last year. All right. That's not a thing that even exists. So thank you, guys.

Nathaniel Horowitz (65:08)

I'm flattered. Do you think people are gonna.

Josh Brown (65:10)

I think they're gonna imitate you.

Nathaniel Horowitz (65:11)

I think they're gonna try.

Josh Brown (65:12)

All right. I'm saying they can.

Sam Koppelman (65:15)

I have to say, I actually hope that they do, because there's a lot more talented journalists out there than there are jobs for them. And so if there were 10 Hunter Brooks, what an amazing thing that would be.

Josh Brown (65:23)

Can I ask you one last thing?

Sam Koppelman (65:24)

Sure.

Josh Brown (65:24)

Who is, like, the coolest, most unexpected inbound phone call? Somebody saying, like, I see what you guys are doing, and I wanted to let you know, like, did you have one of those yet?

Sam Koppelman (65:36)

I have to say it was pretty fun that after healthcare investigation, Mark Cuban started sharing our stories far and wide. Came on our podcast and thought that we told a story in the healthcare industry that most people had overlooked.

Josh Brown (65:48)

That's cool.

Sam Koppelman (65:48)

That was pretty fun. Talk about someone who knows how to own a basketball team.

Josh Brown (65:51)

Yes. Shout out to cubes. All right. We want to tell people. So we gave them the email address. What's the. What is the URL? Where can people go to learn more and read your stories?

Sam Koppelman (66:00)

People should go to newsletter.h, n t.

Josh Brown (66:03)

R b r k.com newsletter hntr, br k. So the vowels cost extra or.

Sam Koppelman (66:12)

I'm telling you, I can't get this guy to respond to my email.

Josh Brown (66:15)

We'll put the link in the description.

Sam Koppelman (66:16)

Of the show, but please subscribe to the newsletter. You can also obviously check out our website, hunterbrook.com, follow us on social media. All the stuff people are supposed to say at the end of podcast.

Josh Brown (66:23)

That's right.

Sam Koppelman (66:23)

Thank you, guys.

Josh Brown (66:24)

All right, follow Nathaniel and Sam and read about Hunter Brooks. Guys, thank you so much for listening. We appreciate you. We will see you. We'll see you next time. Thank you. Feel good about that or you want to do it one more time?

Michael Batnick (66:40)

Good.