Prof G Markets: Is Target a Leveraged Buyout Candidate? + Comcast Cuts the Cord

Summary

Prof G Markets: Is Target a Leveraged Buyout Candidate? + Comcast Cuts the Cord

Release Date: November 25, 2024

In this compelling episode of The Prof G Pod with Scott Galloway, hosted by Prof. G and Scott Galloway, the duo delves into several critical topics impacting the business and financial landscapes. From scrutinizing Jaguar's controversial rebranding to evaluating the contrasting performances of Target and Walmart, the discussion is both insightful and provocative. Below is a detailed summary capturing the essence of their conversations, enriched with notable quotes and structured into clear sections for ease of understanding.

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1. Jaguar's Rebranding Controversy

[02:24 - 06:58]

The episode kicks off with a heated debate over Jaguar's new logo. Prof. G prompts Scott to share his thoughts on the rebranding, leading to a candid critique.

Scott Galloway expresses strong disapproval:

“This is more for a modern age and we need to update it… It’s a stupid fucking decision.”

He laments the departure from Jaguar's traditional image:

“He’s out, he’s hunting, he’s prey for his wife and his kids. He’s elegant, he’s sleek, he’s a jungle cat, jaguar. And then they go to this fucking thing that looks like it was created by AI…”

Prof. G concurs, highlighting the tagline "copy nothing" as a failed attempt to differentiate:

“Like, this is the only thing. But I look at that logo and it’s like you copied every single tech startup…”

The duo agrees that the rebranding lacks the powerful visual metaphor that made Jaguar iconic, criticizing it as a misguided move to appear contemporary.

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2. Market Vitals Recap

[06:59 - 08:21]

Prof. G provides a snapshot of the current market environment:

• The S&P 500 exhibited volatility.
• The US dollar strengthened.
• Bitcoin surged to a new record above $98,000.
• The yield on 10-year Treasuries declined.

These movements set the stage for deeper discussions on antitrust actions and corporate strategies.

---

3. DOJ's Antitrust Case Against Google

[08:21 - 13:18]

A major focal point is the Justice Department's (DOJ) proposal to force the sale of Google Chrome as part of its antitrust case against Google.

Scott Galloway champions the breakup:

“It would be good for everybody… someone might come up with a search engine that is not trying to target young people or that screens out misinformation…”

He references a conversation with former Google CEO Eric Schmidt, who emphasized:

“Individuals should have almost limitless free speech, but computers should not have free speech.”

Prof. G remains skeptical about the effectiveness of forcing Google to sell Chrome, viewing it more as punishment than a constructive remedy:

“It just doesn't feel like a remedy… it feels more like a punishment.”

The hosts debate the potential economic and innovation benefits of breaking up Google's dominance in the search engine market, with Scott advocating for increased competition as a positive outcome.

---

4. MicroStrategy's Bitcoin Strategy

[13:18 - 19:22]

The discussion shifts to MicroStrategy, a company helmed by Michael Saylor, which has heavily leveraged its position to purchase Bitcoin.

Scott Galloway admires Saylor's visionary approach but questions the sustainability:

“MicroStrategy has become a levered bet on Bitcoin… There’s just no getting around it.”

He acknowledges Bitcoin's growing credibility as a store of value but remains cautious:

“Even crypto skeptics like myself have to acknowledge that Bitcoin has become a credible, tangible store of value.”

Prof. G notes:

“MicroStrategy's stock is outperforming Bitcoin itself, attributing this to the leveraged position Saylor has taken.”

The hosts express both admiration for the bold strategy and concern over the financial risks associated with such heavy leveraging.

---

5. Nvidia's Stellar Earnings

[19:22 - 31:23]

Nvidia reported outstanding third-quarter earnings, surpassing expectations with revenues over $35 billion—a 94% increase year-over-year.

Scott Galloway highlights Nvidia's unparalleled market influence:

“Nvidia’s market cap is greater than the entire stock market of countries like Germany… This is a phenomenon.”

Prof. G adds that Nvidia has become integral to global supply chains:

“The world relies on Nvidia in so many ways at this point. It has to be covered, whether or not it's interesting.”

They conclude that Nvidia is poised to be remembered as one of the great companies of our time, given its systemic importance and explosive growth.

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6. Target vs. Walmart: A Tale of Two Retailers

[25:13 - 36:01]

A significant portion of the podcast analyzes the contrasting performances of Target and Walmart.

• Walmart reported a 5% increase in sales, raised its fiscal outlook, and saw a 3% rise in stock post-earnings.
• Target experienced a mere 0.3% sales increase, a 12% profit decline, and a 21% drop in stock value.

Scott Galloway suggests that Target is ripe for a leveraged buyout (LBO), given its undervalued stock (PE of 12) and strong brand:

“I think if I were to try and speculate what the problem is…the board should fire the CEO.”

He argues that Target's persistent underperformance makes it an attractive target for private equity firms looking to overhaul its operations.

Prof. G questions whether Target's management will acknowledge internal flaws or continue to blame external factors:

“Target's just done with it. The stock dropped more than 20%. They're just done with it.”

Scott reinforces the need for leadership change, predicting that Target’s board will soon replace the CEO to navigate the company back to profitability:

“After 10 years of really mediocre performance, he absolutely deserves to be terminated… I’d be shocked if that didn’t happen.”

The hosts draw parallels to other duopolies like Uber and Lyft, emphasizing the challenges of maintaining market share and innovation in highly competitive environments.

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7. Comcast’s Strategic Spin-Off of Cable Networks

[43:52 - 55:13]

Comcast announced the spinoff of several cable TV networks into a new public entity, temporarily named Spinco. Assets moving to Spinco include MSNBC, CNBC, USA Network, Oxygen, E! Sci Fi, and the Golf Channel, while key brands like NBC and Peacock remain under Comcast.

Scott Galloway praises the move as a strategic realignment:

“The disposition or clarity around a brand architecture… is a very good move.”

He compares it to previous successful investments in distressed assets, such as Yellow Pages, highlighting how separating mature, cash-flow-generating units can unlock value:

“These companies are going to be making $68,000… these companies can spin a lot of cash flow.”

Prof. G computes the potential value of the spun-off assets, comparing them to similar public companies like Fox Corporation:

“This segment is probably worth ten and a half billion dollars… Wall Street hates cable in the same way that they hated Yellow Pages.”

Scott elaborates on the benefits of such spin-offs, including increased operational clarity and the ability to better manage declining assets without dragging down the overall company’s valuation.

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8. Predictions and Future Outlook

[55:13 - 57:11]

In closing, Scott Galloway forecasts that the largest leveraged buyout (LBO) in history is imminent, potentially targeting giants like Intel or Target. He emphasizes the abundance of capital ready to deploy and the attractiveness of iconic companies currently trading at lower valuations:

“The biggest LBO in history is going to happen in 2025 and there’s a ton of capital on the sidelines.”

Prof. G echoes the anticipation of significant market movements, anticipating continued transformative deals in the near future.

The hosts wrap up by announcing an upcoming "Ask Me Anything" episode, inviting listeners to submit their questions for future discussions.

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Notable Quotes with Timestamps

• [02:31] Scott Galloway: “This is a stupid fucking decision. This is the equivalent of putting shareholder money in the middle of the road and running over it in an XJR.”

• [13:03] Scott Galloway: “All of the innovation has been how to turn advertisers up by their heels and shake more money from them. It hasn’t been around consumer innovation.”

• [25:19] Scott Galloway: “The board should fire the CEO.… He absolutely deserves to be terminated… The last five years have not been strong.”

• [43:52] Scott Galloway: “This is a good move. It will be used potentially as a shell company to go and acquire other declining but high cash flow assets.”

• [55:33] Scott Galloway: “The biggest LBO in history is going to happen in 2025 and there’s a ton of capital on the sidelines. Some stuff is getting cheap. Great iconic companies, it’s getting cheap.”

---

Conclusion

This episode of The Prof G Pod offers a rich and engaging exploration of current market dynamics and strategic corporate maneuvers. Scott Galloway's incisive analysis, paired with Prof. G's thoughtful commentary, provides listeners with a nuanced understanding of the forces shaping today's business environment. Whether it's the potential LBO of Target, Comcast's strategic spin-offs, or the enduring dominance of Nvidia, the insights shared are invaluable for investors, business professionals, and anyone keen on staying informed about the evolving economic landscape.

Listeners are encouraged to stay tuned for upcoming episodes and participate in the forthcoming "Ask Me Anything" session by submitting their questions to deepen their understanding and engagement with Prof. G and Scott Galloway's expert perspectives.

Transcript

[IBM Watson]

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[Scott Galloway]

Create support for the show comes from the new season of Crucible Moments, a podcast from Sequoia Capital. What is a Crucible Moment? It's a turning point where we face a tough decision and our response can shape the rest of our lives. These decisions happen in business, too, and Sequoia Capital's podcast Crucible Moments gives you a behind the scenes look, asking founders of some of the world's most important tech companies, like YouTube, DoorDash, Reddit, and more, to reflect on those critical junctures that defined who they are today. Tune in to season two of Crucible Moments today. You can also catch up on season one at cruciblemoments.com or wherever you listen to podcasts. Today's number, 243,000. That's about how many views Jaguars commercial for its rebranded logo got in 24 hours on YouTube. Ed, I was trying to find a joke that would bring together necrophilia, bestiality and masturbation. But it's. At this point it just feels like I'd be beating a dead horse. That's why the people come here. Ed, what's going on today? We're discussing an earnings crisis at Target. Why Comcast is shedding its cable business. Good bank, bad bank.

[Prof. G]

First off, did you see the new Jaguar logo?

[Scott Galloway]

Jaguar. Listen to you. Listen to you. Little saucy bitch. You were just dying to say Jaguar.

[Prof. G]

No, I wasn't. That's how I say it, because I'm from a different country.

[Scott Galloway]

If you ask for another raise, we'll find you dead in the boot. I just made that up. That was pretty good. Have I seen. I'm sorry, have I seen what?

[Prof. G]

Have you seen Jaguars? That's how it's pronounced.

[Scott Galloway]

Yeah.

[Prof. G]

Have you seen their new logo?

[Scott Galloway]

No, but they pasted in Our producers pasted it in.

[Prof. G]

Okay, so please check it out because everyone's talking about this and you are the marketing professor. We need your reaction.

[Scott Galloway]

Oh, no. This is the new logo. No, no, no, no, no, no, no, no, no, no, no, no, no, no. Come on. Hold on. I actually use this logo in my class. Look at this thing. He's out, he's hunting, he's prey for his wife and his kids. He's elegant, he's sleek, he's a jungle cat, jaguar. And then they go to this fucking thing that looks like it was created by AI, right? We can process images 50 to 60 times faster going against our instincts as it relates to marketing. If you are blessed with a logo like they used to have, that visual metaphor of that incredibly strong, yet elegant, yet powerful Jag. Jaguars are the only animal that when hunted. This is a true story. The only animal that went hunted will perceive they're being hunted and then sprint, circle around and then hunt the hunter. You want to talk about snatching defeat from the jaws of victory? That is one of the greatest visual metaphors in automobile history. And instead they went to this fucking Westworld, dystopic, weird, it's awful, terrible decision.

[Prof. G]

So what do you think happened in the Jaguar boardroom? Why do you think they signed off on this? What do you think is the strategy here? Everyone agrees this is the worst rebrand of all time. Why do you think they went ahead with it?

[Scott Galloway]

Because they spent a lot of money in a design agency that's populated with very good looking young people who wear black, who seem to understand more about design. And they came in and used a bunch of fancy terms like elegant and progressive. And this is more for a modern age and we need to update it. And you need to pay us $30 million to redesign all the logos outside the conference rooms and all the shit and all the dealerships. By the way, Ed, just a quick tip. When you're shopping for a car, don't eat the clam chowder at the Lexus September to Remember event I would love.

[Prof. G]

But I've heard this joke already.

[Scott Galloway]

It never gets old. You got to recycle the good stuff. You gotta recycle the good stuff.

[Prof. G]

Well, I guess I did laugh anyway.

[Scott Galloway]

So I can tell you I know what happened here without knowing what happened. It's a new CMO who's decided to put his or her footprint or imprint on the company and it's convinced them they needed a new fucking logo because actual work around things like customer acquisition and figuring out digital platforms, you know, that's real work. Instead I hire Interbrand or my old firm Profit to come in and have very compelling, very articulate, very attractive people tell you why this logo connotes something that foots to a modern age. This is a stupid fucking decision. This is the equivalent of putting shareholder money in the middle of the road and running over it in an xjs. Was it the X or the xjr?

[Prof. G]

Just my, my one little comment on the Jaguar thing. Their new tagline is copy nothing. Like this is sort of their bold rebrand and they keep on saying, you know, copy nothing. This is the only thing. But I look at that logo and it's like you copied every single tech startup that we've seen over the past, like five to 10 years. Like, this literally is just like classic dystopian metaverse type 2D font where it's all spaced out and clean, looking like it's just. It looks like a tech company.

[Scott Galloway]

This is the final nail in the coffin of British culture.

[Prof. G]

Yeah, good point.

[Scott Galloway]

When Americans. Obsession, fetish, masturbatory fantasies of AI. Bastard. I'm shocked they don't have. I'm shocked it's not Jaguar AI and they're trying to pretend to be a tech company, but this is. This is a scent. Look at how beautiful their old logo is. I want to be that guy out in the jungle, just sleek and strong. Don't fuck with me. Don't F me. Oh God. That shit is. That shit is money. The next, like, if I see a super attractive gar gal at F1, I'm going to come up after a few cocktails, a lot of cocktails, and I'm going like, nah, dude, that's how you lose your virginity at 19.

[IBM Watson]

Boom, boom.

[Prof. G]

And that's how we open the show. Let's start with our weekly review of market vitals. The S&P 500 was volatile. The dollar climbed. Bitcoin hit a fresh record above $98,000. I wouldn't be surprised it hits 100 by the time this airs. And the yield on 10 year treasuries slumped. Shifting to the headlines, the Justice Department proposed a forced sale of Chrome as a potential remedy in the Google antitrust case. The browser, which has approximately 3 billion monthly active users, could be valued at up to $20 billion. MicroStrategy sold $2.6 billion worth of convertible bonds to fund its bitcoin buying spree. The business intelligence firm already owns nearly $31 billion worth of the cryptocurrency and plans to buy more over the next three years rose to a record high after the sale and it's up more than six fold year to date. And finally, Nvidia's third quarter earnings beat analyst expectations with revenue topping $35 billion. That is up 94% from a year earlier. The company also projected revenue for the current quarter will jump to 37 and a half billion dollars. While that forecast was slightly above analysts expectations, the stock still fell more than 2% after hours. Scott, your thoughts starting with the DOJ's proposed forced sale of Google Chrome.

[Scott Galloway]

Look, I love this. If you go back in economic history, it would be very difficult to find an instance where the breakup was not good for the economy, was not good for the tax base, was not good for shareholders, was not good for the employees who now have more companies bidding to rent their labor. The only stakeholder that loses in a breakup throughout economic history is the individual who wants to sit on the iron throne of all realms, not just Westeros. I mean, search is essentially, I think it's the biggest gross margin dollar business in the world and there's one company that dominates it. And if you took away the data set in the interface of two thirds or three and a half million people who use Chrome, and it was now a competitor that could offer data and opportunities for other potential search engines, I think that would be good for everybody. I mean, who knows, someone might come up with a search engine that is not trying to target young people or that screens out misinformation or doesn't bring sunlight to conspiracy theory greater than its organic reach. I had a really interesting conversation with Eric Schmidt, or we did. I don't know if it's on this pod or one of my other 45.

[Prof. G]

Joey Bagadona's podcast, I was not there for it.

[Scott Galloway]

There you go. Well, actually, you know, it's funny, you did an outstanding job. Anyways, but Eric, the former CEO not of AlphaBeta, but of Google, he said something really that really struck me. He said that individuals should have almost limitless free speech, but computers should not have free speech. And that really struck me as an elegant way to approach the problem. Because when I look at the majority of really vile shit that's trying to polarize people or spread conspiracy theory, whenever I've kind of clicked on it and tried to figure out who this person is, I find out it's not a person. It's clearly a bottle that's using, being used to amplify either conspiracy theory or a certain ideology. Or simply put, it's a bad actor trying to get us shitposting each other and arguing with each other. So more competition. You might find people say, well, I want a family safe search company. I want a search company that doesn't have, doesn't add supported such that it takes you to the best answer, not to the answer they can further monetize.

[Prof. G]

Well, I'm going to disagree with you on your take here. I think you've brought up a lot of important issues, but they're all kind of disparate issues that you're talking about here. Like there's the monopoly issue and then there's, you know, the free speech issue and there's the conspiracies issue. Like there are just all these things that we dislike about big tech and about Google. But I mean, let's just focus on what did Google actually do wrong here. And if you read through the judge's case, the big thing that the judge identified was the fact that Google was paying billions of dollars to other companies, particularly Apple, to be the default search engine on those devices. There's a very easy way to address that, and that's just break up their relationship with Apple. Just tell them you're not allowed to keep paying Apple to be your default browser. And now that is something the DOJ is supposedly going to recommend as a remedy. But to add on top of that, the forced sale of this asset that is in many ways integral to Google's business, it just doesn't feel like a remedy to me. It feels more like a punishment. And in my view, if you're going to focus on punishing Google, I personally think punishments should come in the form of fines. But the idea of forcing them to sell Chrome, which would just dramatically transform one of the most important businesses in America, the online search market, that to me just feels like a step too far from government.

[Scott Galloway]

I just had this horrific image that I finally get the call from the White House asking me to be Secretary of Education or Commerce Secretary. And the call is actually for you and they're just trying to get your name. I think that's a really solid take. I would argue though that the data around traffic patterns and behavior captured on the front end of the true access point to the digital world is the browser. And so the amount of data they get around, where people are going, their trends that they can then feed into their search algorithms to better provide better targeting for clients who advertise on Google, I would think that gives them almost an unassailable advantage. That results in a 90 plus percent share of search.

[Prof. G]

It's huge, but it's also why the product is so good. Right? I mean, the data is all part of the business.

[Scott Galloway]

What you don't realize with a monopoly is you don't know what you're missing. So, for example, do you think Google Search has really innovated in the last decade?

[Prof. G]

No.

[Scott Galloway]

All of the innovation has been how to turn advertisers up by their heels and shake more money from them. It hasn't been around consumer innovation. So I would push back and say the monopoly power here, we don't know the innovation we're missing.

[Prof. G]

I just don't buy it as a means to breaking them up. And my prediction would be that this won't hold off in court. But I agree with you that perhaps the world would be a better place if Google were broken up. Should we move on to MicroStrategy, which is absolutely tearing right now? And you're actually friends with the founder and CEO Michael Saylor, who's been on this podcast before. What are your initial reactions to MicroStrategy, which is performing even better than Bitcoin right now, somehow?

[Scott Galloway]

So I've known Michael for the better part of 20 years. The guy's like, crazy fucking smart. And every time I meet with him, I think I really should buy MicroStrategy stock or Bitcoin. And I have bought none of either. And so I want to find a time machine, go back, find me, kill me, and then kill myself. I mean, I knew this guy was so bright, but the thing that got in the way for me was, you know, I'm an old dog. I believe in corporate governance and the idea of a CEO taking a publicly traded company that does business intelligence and borrowing, levering up like crazy to buy another. It would be like Tim Cook saying, I just believe in gold, and I'm going to put $100 billion in debt on this company and go buy, become the largest single owner of gold in the world. And it just felt so strange to me. But there's just no getting around it. The guy is a fucking visionary. When I had him on the pod two, three years ago, Bitcoin was at 18,000 and it had spiked from 5,000. Am I going to wait till it goes down to five again? He's like, trust me on this, just by a little bit. This thing is. This thing is bulletproof over the long term. It's up, what, fivefold since then? And what is MicroStrategy at since then?

[Prof. G]

I'm not sure. It's up sixfold in the past year.

[Scott Galloway]

It's up 123% in the last 30 days. And because he takes debt, it's basically MicroStrategy has become a levered bet on Bitcoin. It's like buying an ETF on China that's 3x, that's levered up. So look, there's just no getting around it. Even crypto skeptics like myself have to acknowledge that. I believe that Bitcoin has become a credible, tangible store of value. You know, it's a speculative asset, no doubt about it. But Michael is, you know, from an IQ standpoint, he's flying at a different altitude and he saw this and my gosh, you want to talk about balls the size of really big balls. I mean, this guy, this guy basically said business intelligence, missionist intelligence. We're levering up and we're buying Bitcoin.

[Prof. G]

I think the question a lot of people are asking is like, why is MicroStrategy up so much more than Bitcoin? I think part of it is what you said, which is this is like a levered, a levered up bitcoin play because they're borrowing money and then using that money to buy more bitcoin. So it's just going to be a more volatile version of Bitcoin right now. But I think there is a second story here, a second reason why people are so obsessed with MicroStrategy right now. And that is the bitcoin holdings are worth a quarter of the company's entire market cap. And they don't have cash, which is why they're borrowing money to just go buy more bitcoin. And if you look at their earnings reports, they now identify not as a business intelligence firm, which is what this company has always been. They call themselves a, quote, Bitcoin treasury company. And that is the through line of the entire earnings report. It's like, here's our plan to buy more bitcoin. Here's our plan to build out a bitcoin ID network. Here are the list of conferences, these bitcoin conferences that we will be hosting and attending. Meanwhile, the actual business, the way they make money is practically treated like a footnote, like it doesn't seem to matter that much to them. So when I look at what's happening here, I think there are two people buying this stock. It's one, the people making the levered play, but then it's two the people who believe that if bitcoin is the future, Microstrategy is the leader of that future. This is going to be the official bitcoin company. They believe that MicroStrategy is somehow going to pioneer this new space. My only question would be, in what way will they pioneer the bitcoin space? What does that actually look like? It's not very clear to me. The strategy is very vague. It's very hand wavy, which is why personally, I don't really buy it.

[Scott Galloway]

If I had been on his board five years ago and he said, we're levering up to buy bitcoin, you would.

[Prof. G]

Have been a nightmare.

[Scott Galloway]

No, very simple. I would have either been kicked off the board or I would have resigned. Because everything I know about corporate governance, I would have said, michael, you're a billionaire. If you want to sell your stock and go start a bitcoin company, have at it. But don't, don't take your fiduciary. For our shareholders who think they're investing in a business intelligence company, and I would have been wrong. His shareholders have done extraordinarily well.

[Prof. G]

We'll see. We'll see. I'm still with you on that take. I think this could end very badly, personally. And by the way, our producer is messaging me, Citroen Research just shorted the stock and the shares are off around 9% as we are speaking right now. So clearly, I am not the only one who's skeptical about this company.

[Scott Galloway]

I'm with you. And the things I don't like about bitcoin are I actually believe in transparency. And I understand that people feel like they should have privacy as it relates to their money, but this asset class has been used in some pretty frightening ways. But maybe you could argue that's the government's job and people have a right to privacy. This is a longer conversation, but the reality is he's winning and there's just no getting around it. The guy is a visionary. I keep waiting for it to come down so I can buy a little bit of bitcoin, but it's not cooperating with me. And then every time I see it go up every day. Oh, my God. Jesus. Here we go.

[Prof. G]

It's going to be a big day when Profg finally buys some bitcoin. We're going to have to have a celebration.

[Scott Galloway]

Yeah, that means sell everything.

[Prof. G]

Yeah, exactly. Let's just quickly move on to Nvidia here. I personally don't have much to say about these earnings because it's kind of the same story. We've seen quarter after quarter. I mean, revenue doubled, profits grew, estimates were beat, and then the stock kind of stumbled, but then hummed along. And this is what we've come to expect. I mean, every single quarter, Nvidia just absolutely destroys. And the market says, okay, that's sort of what we expected. The only thing that I would say that struck me, and this is more of a media observation than an investing observation, is that last night before the earnings, I was just thinking, you know, it actually doesn't matter what happens in this earnings report because you and I are going to cover this either way. Because this company is just so important at this point. It makes up 7% of the entire S and P. It's in practically every American's retirement account. It's just gotten to this point where it's like it's systemic to everything. You can't ignore it. It has to be covered, whether or not it's interesting. And then I think the thing Jensen Huang, that really summed it up on the earnings call, he said, every company in the world seems to be involved in our supply chain. And I think he's right. This is just. The world relies on Nvidia in so many ways at this point. I think it'll probably go down as one of the great companies of our time.

[Scott Galloway]

I mean, if you talk about it's really hard for people to get their head around the value creation here, and that is if you took the entire German stock market, every company from Daimler Benz to Siemens, the entire German stock market, the entire French stock market, all of the best companies in these respective economies, all of them, Nvidia's market cap is greater than the entire stock market of these countries. And if you really think about that, if you think about the amount of human capital investment, government support, people who spend their lives at these companies, the ip, the co customer bases, the global customer bases, take every one of them, every one of them, and add them all together, they're not worth as much as Nvidia. So this is a phenomena. We don't know how long it can last. Yet another fucking amazing asset class that I am not in. I am not in this ad. I keep waiting for it to get cheaper.

[Prof. G]

We'll be right back after the break with a look at target zoning. If you're enjoying the show so far and you haven't subscribed, be sure to give Prof. Gmarkets a follow wherever you get your podcasts.

[Scott Galloway]

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[Prof. G]

We're back with profit markets. Target and Walmart both reported third quarter earnings and once again it was a tale of two retailers. Walmart sales rose over 5%, solidifying a position as the top performing retailer in the S&P 500, while Target's only rose 0.3%. Walmart also raised its fiscal year guidance for the third time and Target lowered its outlook. So the market's response highlighted that contrast. After the earnings call, Walmart stock rose 3%. Meanwhile, Target stock fell more than 21%, its worst day since 2022. The first thing I will note, Scott, is that we have basically told this exact same story before on this podcast. I'm pretty sure we called it the tale of Two Retailers. We've seen this before. Target slumping and Walmart doing really, really well. So what are your reactions to the fact that we're sort of in a deja vu position in third quarter 2024?

[Scott Galloway]

So let me start off by saying I love Target. I go to the Super Target in Boca Raton and I think they do a great job. I have not worked with senior management at Target. Actually I had some interaction with the CMO there, but I've at one point I had a decent amount of interaction with everyone, including the board and the CEO at Walmart. And it's an exceptionally well run company. And what was interesting about this is that they are going after Target's white meat. And that is Target was always a cooler, hipper, better merchandise, more aspirational version of Walmart that you can have value, but you can have a little bit of, a little bit of sizzle, a little bit of salsa on that chip, if you will. And they had their own brands, kind of a better branding campaign. It was a positioning that worked really well. But Walmart's coming for their core, I mean really coming for their heart and their lungs. And that is the point of differentiation that a lot of wealthy people who wanted value shopped at Target. Now they're just going straight to Walmart. Automation played a big role here. Walmart is now automating two times their fulfillment center volume year on year, while Target's is only 25% more automated. So Walmart has the capital and the vision to make huge investments in digital. Some of them didn't pay off. They paid, I think, I think they overpaid for Jet and they bought Bonobos, which was a stupid acquisition. Nice guys, but it was just like a cute little concept that they. Anyways, those guys got incredibly lucky in my view. But about 75% of Walmart's increase in market share this quarter came from households earning over $100,000, which is the demographic typically associated with people shopping at Target. So people want convenience and affordability. Walmart, the unlimited deliveries for $12.95 a month and people are focused on spending Smart. Groceries were 60% of Walmart's US sales while the category accounts for less than 25% of target sales. I would imagine that groceries is while a low margin business, it's a more consistent business. If you look at the two companies, Walmart's trading at 36 times earnings. Target is trading at 12. And the analogy here that you brought up, which is a really interesting one, is the analogy between a dominant number one and a very distant two. And that is Uber and Lyft and they're eerily similar. Uber's up 157% over the last five years while Lyft is down 62%. Actually I think both have outstanding CEOs. Dara Kasashai and the CEO of Lyft are both impressive people by comparison. Similarly, if you will, Walmart's up 120% over the last five years while Target is down about 4%. So this is what I think is going to happen and I'll come back to this. I think Target's beginning to look like a juicy LBO Target or at a minimum they're going to have an activist in there. This thing is now cheap enough, it still has a strong brand and a great real estate. I think if I were to try and speculate what the problem is, it's the following. When you're dealing with a CPG company or a retailer in a duopoly, Coke, Pepsi, everyone's compensation mojo DNA is focused on one thing and that is share you do not give. If you're, you know, if you're Pepsi, you do not and you've got 17.8% share. If it goes to 17.6 as the brand manager, you might get fired. So you become so obsessed with share that and the market also is very focused on your share, that you can't make the hard decisions that I think you need to make. And I would argue the Target just needs to be a dramatically smaller company that's more profitable. They have 1900 stores. It should probably be 1000 or 1200 and cut costs and make this a more profitable smaller business. And I think that would best be done outside of the scrutiny of a publicly traded company. And when you look at the fact that PE firms have a quarter of a trillion dollars on their balance sheet ready to deploy, when you look at the fact this thing is getting pretty cheap, one or two things is going to happen. We're either going to see an activist or we're going to see a potential club deal and take private here.

[Prof. G]

Very interesting. So Target's market cap is 56 billion. Its enterprise value is around 72 billion. If you account for the debt. Who's got that money?

[Scott Galloway]

Oh, it would have to be a club deal, but you got it. Like I said, PE has $250 billion in dry capital and they could finance a lot of it with debt. It's still. If it's trading at a PE of 12, that means it's got 5 billion in earnings. So they could probably borrow 10 to 20 billion of it and they get a club deal. Get a bunch of the biggest players to each come up with 10 billion. Yeah, they could get this deal done. But I think what you're going to have in. I mean, the three biggest deals, I think in LBO history were hca, rgr, but none of them have happened in the last several years. But all the moons are lining up for what I think will be probably the biggest LBO in history in 2025. I think it's either going to be intel or this company, Target. People say they know Walmart's bigger, but oftentimes people will mention Target in the same breath as Walmart.

[Prof. G]

Absolutely.

[Scott Galloway]

Target has a $56 billion market cap. Walmart's is 700 billion.

[Prof. G]

It's crazy.

[Scott Galloway]

I can tell you a lot of PE guys are sharpening their pencils and looking at this thing and they're calling their buddies and say, saying, if the CEO's down with this and we think we can make this happen, are you in for 1, 5, 10 billion in equity? Talking to banks, how much could we finance on this thing? This is. There's a lot of people, I would imagine a lot of very smart people looking at this company right now.

[Prof. G]

I would like to just focus on Target and the earnings themselves. And then we'll compare it to Walmart, but just to highlight what happened to Target. So revenue rose just 1%, which is way below expectations. Profits fell 12%, also way below expectations. And they said, Target, that there were two main issues they were dealing with. The first issue was the longshoreman strike, which we've discussed before. There were all these strikes at many of our largest ports in America back in October, and that was a problem. And Target said that as a result, their freight costs and their supply chain costs were a lot higher. The second issue that they highlighted was consumer demand. So the average ticket size for Target customers was down 2%. They also saw a decline, a pretty significant decline in their discretionary spending. And the way Target positioned that problem is that there is this macro issue in America happening among consumers. Consumers in America are tight on cash, and so they're just more cautious about spending right now. Okay, now let's compare that to Walmart. Sales rose more than 5%. Profits higher than expected. Average ticket size grew more than 2%. And so the story over at Walmart that they are telling shareholders, and mind you, these earnings calls happen in the same week. So we're looking at what happened to Target and then immediately following that with what happened to Walmart. The story is that customers are going to Walmart more frequently and when they do, they're also spending more. So this macro boogeyman that Target seems to be talking about when it comes to consumer demand that is supposedly hurting Target, for whatever reason, it isn't touching Walmart. Walmart's doing just fine. And then, you know, the longshoreman strike. Walmart is the second largest importer. Of the affected ports from that strike, the only one ahead of it is LG Electronics. It should have been hit way harder by this strike than Target. But Walmart said that, yes, it was a slight issue, but they managed the inventory well. They only saw a 0.6% decline in their inventory levels. So in other words, Walmart just figured it out. The consumer issue wasn't a problem. And neither was the longshoreman strike. So this again is a story we've told before. This is the fourth straight quarter in which Target has blamed their underperformance on something else, whether it's inflation or demand or strikes or in some cases even shoplifting. And meanwhile, Walmart is overperforming. They're doing just fine. So I think the question you have to ask Target now is at what point will you publicly recognize that maybe this is your fault, maybe this isn't America. And the consumer's doing something wrong. Maybe this is you doing something wrong and maybe you need a drastic change because Wall street just isn't buying this narrative anymore. There's a reason the stock dropped more than 20%. They're just done with it. So I guess my question to you would be what does the boardroom do now? I think the activist point was a good one. It seems like. I'm sure a lot of activists are coming in here and looking to shake things up. But what do you think the conversations in the boardroom of Target are looking like right now?

[Scott Galloway]

What is probably going to happen and what the board should do is simple. They should fire the CEO. And that is your analysis is correct. At some point it's about you, boss. You know all the problems you're claiming that are these macro systemic issues Walmart seems to have figured out. So it's simple here. Doug McMillan gets a raise and Brian Cornell gets fired. He's been the CEO for the last 10 years. This company has underperformed dramatically. It's peer group and maybe it's not his fault, but at a minimum they need a fresh change. And the way I look with CEOs, people say fire em. CEOs make so much fucking money, they should be held to a higher standard.

[Prof. G]

Yeah, he's fine.

[Scott Galloway]

And this is what's gonna happen. The chairman of the board, I would bet in the next couple weeks.

[Prof. G]

Really?

[Scott Galloway]

Okay, well, I got the timing wrong. This guy's on the Green Mile. He just is. Gets a call from the chairman and says, Brian, yeah, you know, love you but we're going to make a change and they're going to give him a golden parachute or they'll give him the Ford vest, his options. But no, he should be. This is an easy one. He is, in my opinion, after 10 years of really mediocre performance, he absolutely deserves to be terminated in my view or let go. And I'd be shocked if that didn't happen. And if it doesn't happen, that'll be the first thing on an activist's PowerPoint deck is that management has vastly underperformed. He hasn't, I want to be clear, he hasn't been a disaster, but these jobs are fairly kind of what have you done for me lately? And the last five years have not. Have not been strong.

[Prof. G]

Absolutely. Let's just take one moment before we wrap it up here to talk about what Walmart has done. Right? Because I mean the Stock is up 120% in the past five years and I feel like no one saw that coming. Like, Walmart has generally been viewed as kind of a dinosaur and more importantly a shitty competitor to Amazon. I mean, I think the story that most people believed was that Amazon was going to kick the shit out of Walmart, but they've done really, really well. I think the question is, you know, what have they gotten right specifically? And just two things really jump out to me that are worth highlighting. The first is how they invested in E Com. So they made more than $7 billion investment in 2022 to just revitalize all of their technological infrastructure. And the business is. The E commerce business is tearing. It's up 27% year over year. And you compare that to Target, which is up just 10%. And you mentioned the fact that they have doubled their automated fulfillment volume. I think that's really important. So one part of this is their embrace of technology, their embrace of the Internet, which has really paid off. The second one is pricing. I don't know if you remember, but earlier this year Walmart came out with massive discounts when inflation was ripping. And our response was, one, we commended Walmart and two, everyone's going to follow suit now. And that is exactly what happened. Target eventually decided to follow up and they offered their own discounts, but it looks like it was too late. And you almost have to give credit to Walmart for being so bold on pricing and recognizing that the most important thing is the foot traffic and the trust of their customers. And so they said, fuck it, we're going to reduce prices before anyone else does. And it seems to have really paid off in this quarter at least. So those are my two standouts in terms of Walmart's performance. Perhaps you have some other observations on what they've done.

[Scott Galloway]

Well, this guy, Bruce Buchanan, an economist at Stern, taught me a framework that has just kind of changed the way I look at shareholder value. And that is all shareholder value comes down to the relationship or the geometry between three lines. The top line is perceived value, the middle line is the price you charge, and the bottom line is the cost. And there's only two ways to create shareholder value. You either increase perceived value, better merchandising, better branding, association of innovation. And then if perceived value goes up, you can have a lot of fun. You can either raise the price you're charging, which creates greater margins, because the delta between your costs and the price go up, or you can leave the price the same and you should expand market share because the delta between the price you're charging and the perceived value goes up, increasing the value to the consumer and your market share goes up. Now, the majority of shareholder value, I would argue, is around pushing the top line, the perceived value up right? A great spokesperson, Tiger Williams, or a great ad campaign or we are the best. We are tightly associated with this brave new future of AI. So we get a ton of traffic, open AI and we can raise our price. What Walmart has done is they brought in this gestalt that every day we're trying to push down the cost line and then immediately, as soon as we're able to pull it down, we pull down the price line that we charge consumers. We pass on those cost savings to the consumer immediately, thereby increasing the delta between our prices and our perceived value, which should expand share, which is exactly what happened here. And the problem is, I've always told kids coming out of business school, you want to have a bias towards a company doing this increasing perceived value. Because when you're in the business of pushing down the line, it's purely a business of operations and scale. Doug McMillan can make multibillion dollar investments in technology that may or may not pay off. To try and get cost down 10bps. He can make staggering investments. You see the same dynamic at Uber and Lyft. The number one player has the scale where they can just make more bets. And in this instance, when you're in the business of pushing the line down, whether you're Dell, whether you're Home Depot, whether you're Walmart, it's a business of scale and operations. And right now, both of those things go to the market leader and the number two. Quite frankly, it's just feeling the pain of how much it hurts. 1/15th of the market cap to be the number two.

[Prof. G]

We'll be right back after the break with a look at Comcast Spin off. If you're enjoying the show so far, hit follow and leave us a review on profg markets.

[IBM Watson]

Think scaling AI is hard? Think again. With Watson X, you can deploy AI across any environment. Above the clouds, helping pilots navigate flights and on lots of clouds, helping employees automate tasks on prem so designers can access proprietary data. And on the edge so remote bank tellers can assist customers. WatsonX works anywhere so you can scale AI everywhere. Learn more@ IBM.com WatsonX IBM let's create support for the show comes from Polestar. Innovation is at the heart of every Polestar car and their SUV. Polestar 3 is no different from the intuitive infotainment system to its head turning design. Polestar 3 is for drivers unwilling to compromise. That means merging a spacious, comfortable interior with the torque and handling of a sports car. Now you can go from 0 to 60 in as little as 4.8 seconds and get an EPA estimated range of up to 315 miles per charge. Polestar 3 even allows the driver to optimize the powertrain between performance and range mode, depending on your drive's needs. Experience an uncluttered dashboard showing you everything you want to know and nothing you don't. The innovation doesn't stop there because you can just have Google turn on your favorite podcast and be immersed in 3D sound by Bowers and Wilkins. Polestar has put in the time designing and refining Polestar 3, and that means the time you spend in it will be the best time of your day. Book a Test [e-mail] Think scaling AI is hard? Think again. With Watson X, you can deploy AI across any environment, above the clouds, helping pilots navigate flights and on lots of clouds, helping employees automate tasks on prem so designers can access proprietary data and on the edge so remote bank tellers can assist customers. Watson X works anywhere, so you can scale AI everywhere. Learn more at IBM.com Watson x IBM let's create.

[Prof. G]

We'Re back with Profit Markets. It's official Comcast is finally cutting the cord. The company is spinning off several of its cable TV networks into a new public entity temporarily named Spinco. This new company will include msnbc, cnbc, usa, Oxygen, E. Sci Fi and the Golf Channel. However, key assets like NBC, Bravo and streaming platform Peacock will remain under the Comcast umbrella. So Scott, you predicted this. This is a clip from September of 2023. Let's play it.

[Scott Galloway]

There needs to be recognition that cable TV assets are no longer teenagers that are going to keep growing, that they're in fact nana and pop up and need to be made comfortable. These things are dying and they need to be managed for cash flow, not starved of investment. But stop the hallucination that these things are ever going to reignite growth again. So my prediction is you're going to see one or more players shed their assets into a different hold code to clean up their story and also for consolidation and scale. There needs to be a bunch of these things wrapped together so there's one sales rep and Czechoslovakia selling ads on the Cartoon Network or what have you and un muck or you know, unfuck the story that is media companies now that have growth but also have declining assets in the same portfolio.

[Prof. G]

I say I can. I can feel you smiling on the other side of the screen.

[Scott Galloway]

Let's be honest I'm touching my nipples. This is the most turned on I have been. I mean, granted, I don't own a single fucking coin and I keep waiting for Nvidia to go back to 10 bucks a share. But let's be honest, the dog is howling on this one. The dog is howling. Yeah, this was, look, this was obvious. And effectively what you have is when you mismatch families of different generations under one stock ticker, you have good assets that are growing in the market values as growth or as consumers, not on cash flow. And then you have shitty businesses that are declining but still produce cash flow. Investors in the market don't know what to do. So what they do is they find the shittiest assets trading at the lowest multiple and they assign that entire multiple to the whole thing. So the divestiture of assets in different sort of stages of the life cycle here creates more clarity and ultimately creates a whole that's greater than the sum of its parts. So the disposition or clarity around a brand architecture that spends these low performing or declining but high cash flow assets into a separate company is a very good idea. And then they will have their own currency to go buy ABC or Bravo 5 or CNN. Because everyone, whether it's Eiger or Zaslav, is in the same position. And that is they have some amazing assets that would be valued at X and they have other assets that are valued at 0.3x. The market assigns that 0.3 to their entire portfolio. This is a good move. It will be used potentially as a shell company to go and acquire other declining but high cash flow assets. I remind people that the second best investment I ever made was in a yellow pages company. It was very simple. We knew these things were going away. They were declining at 7 to 12% a year. But there's still a lot of people that want that big fat fucking book delivered to their home in rural wherever in case they need a plumber. And they still have a dial up phone. And these businesses still spun a lot of cash flow. And what we would do is go buy the biggest yellow pages company in the Southeast and say, okay, you're fucked, we're fucked. Let's be fucked together. And the way we'll do this is we'll take your 10% of your best salespeople, we're going to lay off your entire administrative staff, we're going to close your headquarters down. And as long as we can cut costs faster than the revenue declines based on consolidation and the fact we can pick these assets up on the cheap Every year this company increased its cash flow, and this specific company then took a lot of that cash flow and started trying to transition to a CRM software company and actually did it quite well. But consolidation of mature or declining assets can be a great business because typically these businesses don't go away as quickly as you think they're going to. And as long as you take sort of a private equity cost cutting approach and stop trying to inject Botox and filler into this thing such that under the illusion it's going to look young again, it's not going to.

[Prof. G]

So just on your point about depressed valuations, so if we look at how much revenue these assets actually generated for Comcast, it comes out to around $7 billion. Now, we don't know what the profitability is exactly. I think we can assume it is quite profitable. But there are public companies out there that are quite similar to this business. And the example we could use is Fox Corporation, which has a price to sales multiple of one and a half. So if we were to apply the same multiple, this segment is probably worth ten and a half billion dollars. And you compare that to the overall market cap of Comcast, which is more than 160 billion. So Wall street hates cable in the same way that they hated Yellow Pages. My question to you, though, from an investing perspective, you said that Yellow Pages was one of your best investments. What made it so good? Did you sell your stake at some point at a higher price? Or was it the fact that cash flows were high and you were receiving direct income? What made it such a good investment?

[Scott Galloway]

So I invested in the company probably the better part of 10 years ago, and you could, for a dollar in cash flow, you had to spend two and a half dollars on a company. And so we knew these companies were going out of business, but they weren't going out of business in 30 months. So within three years, the company, just in cash flow, could return all of the initial investment to the investors. Wow. And this is what it comes right down to. It's very similar. Everything replicates nature or human interaction. And that is if you have the chance. I'm going to F1 because I want to hang out with hot young people or hot successful people. I am not going to, I don't know, the Golden Girls reunion. I don't want to hang out with old people. And we are attracted to youth and vigor and growth. And so these young, vigorous, growing companies get an enormous multiple because we all want to hang out with them. Right. So they trade at much higher multiples. And if you look at the most successful businesses in terms of likelihood of success from startup, the average is 14%. Only one out of seven companies survives, but 90 plus percent is senior care homes. If you're willing to go into the business of taking care of seniors, 9 out of 10 of these businesses work. But there's an absence of capital because they're not as fun or sexy, they're not growing. People don't like to be around old people. It's the same with distressed assets. Everybody wants to hang out with OpenAI, everybody wants to hang out with Nvidia, they don't want to be in distressed assets. So if you go up and down the stack, from angel to venture, to IPOs to growth to mature to declining to distressed, hands down, the most successful, greatest likelihood of success I found in the stack in terms of a capital or an asset around the lifestyle, it's distressed because you can pick up shit at pennies on the dollar.

[Prof. G]

I guess it's interesting to me. I mean, I consider, I think that I think like a value investor. I think I'm a value investor. And I guess the thing that I've always felt with distressed assets is it feels as though what you have to do is you're getting a really good price and you're buying at a really good price, but then what do you do with it? You're sitting with this pile of shit that you could make look a little bit less like a pile of shit. And my assumption has always been, okay, well, you just gotta flip it at some point. But what's interesting about what you described with the yellow pages is actually it was a good long term investment because of how profitable it was and because you could use those profits to then revitalize the company and turn it into a CRM, which is far more sustainable over the long term than what it was before. And so I want to continue with this Yellow pages analogy because I think it's a good one. What do you think the makeover looks like for MSNBC and CNBC and Sci Fi and all of these channels? What does the CRM ification of this SpinCo, how will that play out, do you think?

[Scott Galloway]

I don't have a vision for a new business that they could pour their cash flow into to turn this, to pivot this company. And also you don't need to do that because these companies, there's just going to be a lot of people watching CNBC and Andrew Ross Sorkin, who is an extraordinary journalist, and Joe Kiernan who is not, they are going to be watching these things for a long time and they're still going to be advertisers that want to reach people who are 70. Right? Average age of an MSNBC viewer. The conversations. And I know this firsthand happening with all of these anchors is the following. Chris Wallace, we love you. You're iconic, you're fantastic. Last year, when we're trying to convince ourselves we could inject Botox and filler into our face and we had this idea for CNN and we wanted to take you from Fox, we offered you a four or five year deal at 8 million a year. That's what I've read. I would bet they said, we love you, you're great. We're willing to pay you a million bucks a year. The salary cuts, the cost cutting. We did an analysis of how many people we need at this podcast. We're getting like triple or quadruple the number of viewers per person than these big firms. These firms, all roads lead to the same place. The anchors here are pilots for Pan am in the 70s. They're banging stewardesses, they're high prestige, but they know the writing's on the wall. They're going to be making $68,000 working for Spirit Airlines going from Louisiana to Asheville pretty soon. Even if they don't find another thing. These companies, as long as they keep acquiring and consolidating and cutting costs, which they will do, they will figure out a way to return all of that capital to shareholders really quickly because the share price will be low to buy in and they'll make really good money. I would actually rather, I think I'd rather invest in the SpinCo than in the core Comcast because it'll be at a lower valuation. There's a lot of properties. Hey, Bob, are you ready to finally sell your shit to us? We'll take it. We'll take it off your hands. We'll pay you an awful price, but your stock price will go up because the market will be focused on your parks and on Disney, which are great businesses. Instead of constantly asking you about ESPN and ABC and you having to apologize for it every three months. I love it.

[Prof. G]

Let's put a consortium together, take a majority stake and let's call it Dog Co. Let's call it Dog Dog. Let's take a look at the week ahead. We'll see earnings from Dell, CrowdStrike and HP. And we'll also see the Personal Consumption Expenditures Index for October. Sounds like a fascinating week. Scott, any predictions?

[Scott Galloway]

The biggest LBO in history is going to happen in 2025 and there's a ton of capital on the sidelines. Some stuff is getting cheap. Great iconic companies, it's getting cheap. And my bets, two of my favorite candidates are now intel and Target.

[Prof. G]

And just before we go, we'll be recording an ask me anything episode at the end of the year. So please send in your questions for me and Scott to officehoursrofgmedia.com or you can tag us on social media Profg pod or you can leave us a comment on our YouTube channel. Anything is fair game. Send us your questions. This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our associate producer is Alison Weiss. Mia Silverio is our research lead. Jessica Lang is our research associate. Drew Burrows is our technical director and Katherine Dillon is our executive producer. Thank you for listening to Profg Markets from the Vox Media Podcast network. If you liked what you heard, give us a follow and join us for a fresh take on markets on Monday.

[IBM Watson]

Lifetime.

[Scott Galloway]

And I think what's happened with Target. Hold on. Yeah. Hello. Hola. Hola. Por favor. Okay. Gracias. Oh, a little cosmopolitan skill from Elpeto. That's right. That's right. Anyways, okay, where were we? Otage support for this podcast comes from Stripe. Stripe is a payments and billing platform supporting millions of businesses around the world, including companies like Uber, BMW and Doordash. Stripe has helped countless startups and established companies alike reach their growth targets, make progress on their missions, and reach more customers global. The platform offers a suite of specialized features and tools to fast track growth like Stripe Billing, which makes it easy to handle subscription based charges, invoicing and all recurring revenue management needs. You can learn how Stripe helps companies of all sizes make [e-mail] that's stripe.com to learn more. Stripe make progress. Food insecurity still affects millions of individuals around the globe. And Nestle, a global leader in nutrition, health and wellness, understands the importance of working together to create lasting change. Nestle's partnerships extend beyond just financial support. From building urban hoop houses to producing custom seasoning for food banks, Nestle and their partners actively engage with local communities, listening to their needs and working together to find innovative solutions. Nestle is committed to helping support thriving, resilient communities today and for generations, generations to come. Together, we can help to build stronger, healthier communities. Learn [e-mail].