Unhedged Podcast: "We Take Some Questions"

Date: December 23, 2025
Hosts: Katie Martin & Robert Armstrong (Financial Times, Pushkin Industries)

Episode Overview

In this festive, end-of-year episode, hosts Katie Martin and Robert Armstrong tackle a mailbag of listener questions, ranging from why companies care about their stock prices, the limits (or not) of financial speculation, Swiss banking, shareholder rights, and the effects of geopolitics on markets. The tone is light-hearted and conversational, with the pair mixing insightful takes with holiday banter as they reflect on the state of finance in 2025.

Key Discussion Points & Insights

1. Do Companies Really Care About Share Prices?

Listener Question: "Why do companies care about their share price?"

• Executive Compensation:
  • Armstrong: "The CEO's pay is often linked to it." (04:05)
  • Incentive structures (stock options) aim to align executives’ interests with shareholders. But, because pay is tied to share performance, CEOs may avoid bold moves if they fear short-term stock dips.
• Access to Capital & Borrowing:
  • Martin: "It's easier for you as a company to borrow money cheap if you're able to demonstrate that you're worth a kajillion dollars." (05:17)
  • High valuations make raising debt/equity easier—a ‘virtuous circle’: healthy share price, better financing terms, greater ability to acquire other companies.
• Acquisitions & Defensibility:
  • Armstrong: "If you have a high stock price, you have a valuable currency with which to do things." (05:54)
  • High prices fend off hostile takeovers; facilitate acquisitions using shares as 'currency'.
• Going Private:
  • Wild market swings inspire some firms to exit public markets entirely: "There is an entire industry known as private equity... you don't have to worry about the risk lemmings anymore." (05:54)

2. Should We Be Able to Speculate on Everything (like Burrito Prices)?

Listener Question: "Should we be able to speculate on a broader range of commodities, for example, the price of a burrito?"

• Prediction Markets & Gamification:
  • Armstrong: "To an extent this is happening. This is what these prediction market companies are doing." (07:59)
  • Likes the idea for intellectual accountability: "Being able to bet on a lot of stuff allows you to kind of hold yourself accountable." (08:50)
• Downsides & Risks:
  • Martin: Strongly opposed, calling it the "financialization of everything," warning of regulatory headaches and perverse outcomes.
    • Memorable: "I'm just saying, like, in financial markets, that's why there's so much very tedious regulation, because there will be in the reg around if, if burritos were a regulated financial asset, there would be like a booklet like as, as thick as my hand that says what is a burrito?" (12:01)
  • Armstrong: Acknowledges the danger of gaming insiders, especially if sensitive information (e.g., Fed chair appointments) can be bet on.
  • Both agree: Sports betting—a close cousin—is problematic: "It's like carrying a little liquor store in your pocket." (10:22)
• Unregulated ‘Lollification’:
  • Martin: "I just think that sort of lollification of, of financial markets, the financialization of everything for me bad, do not like." (12:52)

3. Will UBS Move to the US?

Listener Question: "Will UBS, the massive Swiss bank, move to the US?"

• Saber Rattling, Not Reality:
  • Armstrong: "It's saber rattling, Katie." (13:41)
• European Regulation Issues:
  • Both hosts discuss inefficiencies in European banking regulation and how threats to relocate are a way to pressure Swiss/European officials.
  • Armstrong: "There has to be regulation across all European countries that makes financial services very transportable across borders." (15:00)
  • Martin: Skeptical that the situation will change quickly: "I see very little prospect that you can convince people to get this done, Rob." (15:30)

4. Shareholder Rights & Corporate Governance

Listener Question: "Why are shareholders so relaxed about the erosion of shareholder rights?"

• Human Nature & Short-termism:
  • Armstrong: "Corporate governance is one of those things that people only worry about once it has already gone terribly wrong." (16:15)
  • Gives Silicon Valley as a classic case (Google, Meta): "As long as the stock price is going up, people are like multiple shareholder classes. Who cares? Let's party, right?" (16:49)
• When It Fails:
  • Only after disaster strikes (e.g., poor project spending, loss of value) do shareholders revolt.
  • Amusing: Meta “renamed the company for this project, so they can’t just shoot it in the head.” (17:24)

5. Do Geopolitical Shocks Still Shake Global Markets? (Venezuela Example)

Listener Question: "What are the implications for global markets on the US taking an increasingly active stance in attacking the Maduro regime?"

• Minimal Market Impact:
  • Martin: "We just keep learning over and over again is... Markets don't care about this stuff. They need a really good reason to care about this stuff." (18:16)
  • Both agree: Modern markets, especially oil, are diversified. Disruptions in one country barely impact global trading, thanks to fracking and new supply sources.
    • Armstrong: "The sources of oil globally are much more diversified than they used to be." (18:57)
• Broader Reflection:
  • Armstrong: "Markets overall indifference to quite big geopolitical shakeups... is that a good thing or a bad thing? ...My instinct is that it's a good thing in as much as somebody can't hold the whole world hostage." (20:03)
  • But also, it can mean markets ignore significant humanitarian or political upheaval.

Notable Quotes & Memorable Moments

• On speculative absurdity:
  • Martin: "I'm just saying, like, in financial markets, that's why there's so much very tedious regulation, because... what is a burrito? How are we determining what the price is?" (12:01)
• On executive incentives:
  • Armstrong: "Solving the so-called principal agent problem of corporate finance. This works sort of well, I guess." (04:05)
• On corporate governance:
  • Armstrong: "Corporate governance is one of those things that people only worry about once it has already gone terribly wrong." (16:15)
• On market indifference to global crises:
  • Martin: "Markets don't care about this stuff. They need a really good reason to care about this stuff." (18:16)

Timestamps for Key Segments

• Intro & Festive Banter: 00:36–02:26
• Share Price Question: 03:06–06:56
• Speculation/Prediction Markets: 07:32–12:52
• UBS Relocation & European Banking: 12:52–15:43
• Shareholder Rights: 15:43–17:57
• Geopolitics & Market Impact: 17:57–20:55
• Closing Reflection: 20:55–21:22

Long/Short Segment (Fun Closing)

Rob’s Short:

• Gift cards — "I am short the informal infernal wickedness of the gift card... it's all a nasty not Christmassy grinchy trick by corporate America. And I hate it." (22:01) Katie’s Limited Long:
• Story about "the bitcoin investor who wants to take over a bit of Saint Nevis." (23:08) — Enjoying tales of crypto maximalists isolating themselves on faraway islands.

Tone & Style

Playful, irreverent, yet full of sharp insights. The hosts blend clear explanations with wit and a touch of holiday cynicism, making complex finance topics both accessible and engaging.

Summary Takeaway

In a world where finance seems to creep into every corner of life and markets grow indifferent to drama—even war—the Unhedged crew provides a witty, critical, and illuminating look at what really moves (or doesn’t move) the markets. And this season, maybe just skip the gift card and hand out cash instead.