Risk Reversal OK Computer Sponsor - Current

Risk Reversal OK Computer Sponsor - Masterworks


On this episode of Okay, Computer. Dan talks with Deirdre Bosa, co-anchor of CNBC’s “TechCheck,” about her path to becoming a tech reporter and co-anchoring at CNBC (2:19), what Apple’s Tim Cook, Amazon’s Andy Jassy, and Alphabet’s Sundar Pichai had in common at the Code Conference (4:10), Snap CEO Evan Spiegel’s transparency around the company’s recent challenges (8:55), TikTok’s intensifying pressure on big tech giants (10:34), if BeReal is the next cool social media app (20:10), why more tech CEOs are bringing up “focus” as they navigate an industry downturn (22:28),  and if Uber CEO Dara Khosrowshahi can bring the ridesharing company to profitability (25:49).

Please rate and review and share it with your friends as this will help people find it.

And as always we want to hear your feedback. Please hit us with any comments at contact@riskreversal.com, and follow us at @OkayComputerPod.

Show Transcript:

Dan Nathan: [00:00:38] Current Ad. [00:00:38][0.2]

Dan Nathan: [00:00:38] Welcome to another edition of Okay, Computer. I’m Dan Nathan, I am here with one of my dear friends from CNBC. She’s actually a co-host of CNBC TechCheck. She is Deirdre Bosa. We just call her affectionately D-Bo. D-Bo, welcome to Okay, Computer. [00:00:54][15.5]

Deirdre Bosa: [00:00:54] I’m on the road. I made the cut. I’ve been wanting to be on your podcast forever, Dan, so I am honored and excited. [00:01:00][5.3]

Dan Nathan: [00:01:00] You know what’s really funny? We actually emailed you a couple of times last year and to your your NBCUniversal email you never responded. So we thought you were ghosting us from that. [00:01:10][9.8]

Deirdre Bosa: [00:01:11] Never. Now you’ve got my my Gmail is is the path. [00:01:13][2.7]

Dan Nathan: [00:01:13] I’m not going to dox you. But here’s the deal. You and I saw each other IRL. We were at Kara Swishers code conference her last conference last week in L.A. and you and I sat into a bunch of the sessions and it was pretty fascinating. And I want to kind of go over a little bit of that. I want to go over today. We’re recording this on Tuesday afternoon, the day that the Nasdaq closed down 5%, the worst day in the stock market in over two years. And just a lot of crosscurrents going on. And I know that, you know, again, before you were on the tech beat, you were a reporter for CNBC in Asia, in London. And you have a great grasp of, you know, all things macro, but also markets. And sometimes, you know, I’ve been following tech for a very long time and now you follow both public and private tech markets. Sometimes they just get disconnected from each other and they’re telling different stories. And depending upon who you’re talking to, they might have totally different vibes. So I want to hear all about that, your take on some of that. But first things first, how did you get to be a co-host of CNBC’s Techcheck? You were on the West Coast. When I first saw you you were doing, I think, Squawk Box Asia. This was back in like 2015 and 16 and when we were on the set of fast money you were just getting up in the morning over there and you would come on our show to talk to us a little bit about your trip around the world with CNBC. [00:02:27][74.1]

Deirdre Bosa: [00:02:28] Just a young green reporter. I remember that if you were in Singapore and you had to do the US, no one wanted to do it because it was late in the afternoon. You had to stay way later and we started like we do here very, very early in the morning. But I always put up my hand because ultimately I thought I wanted to come back to North America. I’m Canadian, but U.S. is close to the enough, so I started in Singapore. I was in Beijing for a while. I convinced them to hire me, not on my first time mind you. I remember I went in for my interview and I thought I just had to read the prompter and they were like, No, no, no, no, that’s not how it works here. So I went away. I literally studied for a year to try and be able to come on CNBC. I came back again and they hired me. I went from Singapore to London to I was the original home studio in Vancouver, Canada years ago and then down to San Francisco, where I’ve been ever since. [00:03:18][49.7]

Dan Nathan: [00:03:18] Yeah, well, you do a great job and I not only enjoy your reporting, the sourcing that you do is amazing and you’re just really, really good at it. [00:03:25][6.4]

Deirdre Bosa: [00:03:26] Thank you, I learned from the best, all you guys who I’ve been watchin for years. [00:03:27][1.0]

Dan Nathan: [00:03:30] I’ll tell you this, because sometimes people think if you’re on, you know, like a show or you’re on CNBC, a channel like that, that you’re like a journalist. And I have to be very clear that I am not a journalist. People like you are actually doing journalistic work, reporting, you know, building sources, that sort of thing. I just show up and offer some hot takes. But one thing it’s really funny. Every once in a while when we’re doing a promo or something, they’ll ask us to read prompter. I cannot read prompter. It is a skill. Am I right? [00:03:54][24.2]

Deirdre Bosa: [00:03:55] It is difficult. I will tell you that I’m still not very good at reading prompter and I ask our producers on Techcheck to sort of write as little as possible. And I’ve got Carl and John who are amazing and I feel like we all come from a different perspective so we can talk anything and I get tripped up on the prompter, too it’s not just you Dan [00:04:13][18.3]

Dan Nathan: [00:04:13] It’s hard. All right, let’s get it speaking. We get tripped up. Let’s talk a little bit about what we saw, heard, kind of witnessed, at Code last week. It was a pretty fascinating conference. It was Kara’s 20th. She started doing all things digital with Walt Mossberg again 20 years ago when they were at the Wall Street Journal. It morphed into Code. And, you know, this was a bang up final year. I mean, in 24 hours, Andy Jassy, the CEO of Amazon, spoke, Sundar Pichai, the CEO of Alphabet, Tim Cook, the CEO of Apple. I mean, it was pretty amazing, right? [00:04:42][28.2]

Deirdre Bosa: [00:04:42] Trillions in market value over the of 24 hours the most important companies in the world. It was amazing. [00:04:47][5.4]

Dan Nathan: [00:04:48] It was amazing you know. And I did fast money from there. And I think that night or the second night, I said we had $6 trillion in market cap. Just speak to us to the CEOs, but more dramatically, 1.2 trillion in annual revenue and growing for those three companies. [00:05:03][15.1]

Deirdre Bosa: [00:05:04] Wow. [00:05:04][0.0]

Dan Nathan: [00:05:04] I’m just curious, like, what was your takeaway? You know, for me, it felt like there was three CEOs of three of the largest companies in the world that were managing towards a very difficult macro environment. Managing towards deceleration post-pandemic is specifically Amazon, but generally kinda have their arms around things. That was my take. And we also had a market that was kind of coming off of a two week slide and was rallying a little bit. It just felt like a different vibe. Then throw in today and some of the hardest hit stocks, you know, Apple was down nearly 6% in market cap terms. That’s massive. Microsoft was down five and a half percent. Amazon down 7%. So I’m curious. Like week on week now, two totally different vibes. Any takeaways from from last week into this week? [00:05:48][43.6]

Deirdre Bosa: [00:05:48] That’s exactly how I felt, too. Even though it was just a few days ago last week, it felt like a totally different vibe. But then again, you sort of seen these companies. They’re the cream of the crop, they’re the industry leaders. They have so much cash versus the smaller, unprofitable tech companies that we cover. So they’re in a position of kind of luxury when Sundar Pichai says something like we have to be 20% more efficient you believe him. You believe he can do that while delivering on profitability and revenue growth and all the things that he has. And he said something similar to me when I interviewed him a few months ago. It was on a similar day as today the market had just dropped, I think I was look at the Nasdaq, it was down 4% or something. And I kind of threw out my script and asked if this is happening. I think this was this was in May, you know, the start of the real market turmoil. And he gave me a very similar response. And I think that was my takeaway from hearing from these three CEOs, the steadiness that they’re able to give investors, maybe employees. I think their employees is a different challenge. I know you talked about this before, but a lot of their employees did something that’s Sundar Pichai and told me months ago. A lot of them have never seen a recession or a downturn, a real downturn before. But certainly in terms of investor sentiment, I felt like they reassured they once again reassured last week. [00:07:04][76.0]

Dan Nathan: [00:07:04] Yeah, it’s funny. At a conference like that, you know, it seems like a lot of the people speaking onstage are public market executives. And it seems a lot of people in the stands, in the in the crowd are private by there’s a lot of these Cs there. And so let’s talk a little bit about that disconnect because on Okay, Computer and I know a lot of the guests that we’ve had and a lot of my co-host, you know, and you speak to that sort of thing. And one of the very common themes is that usually the private tech markets lag public markets by, let’s call it, you know, 6 to 12 months or something like that. And you just mentioned unprofitable tech. And, you know, Evan Spiegel, that was although that is not a big company anymore by any means, $5 billion in revenues and less than $20 billion in market cap, that 80% from its all time highs. Big news broke while we were there that they were cutting 20% of their workforce. That came out the prior week. But then it was an internal memo that suggested that by the end of next year or 2023, that they’re going to have 20% revenue growth and 30% subscriber or user growth, which was like kind of eye popping a little. Wait, what was your take from that? And again, you know, the stock market or at least investors rewarded the company for that guidance. The stock rallied ten, 15%. But again, this, a very unprofitable company, noticed they didn’t say anything about profitability. [00:08:19][74.5]

Deirdre Bosa: [00:08:20] Yeah, one thing I like about Evan Spiegel is that he’s very transparent and a lot of the CEOs we hear from actually on tech check because they actually come on when their stock is down, when they’re going through challenges that I always go back to as an example of this, too, an Airbnb. You remember when the pandemic hit, you thought, this is the company that is going to get killed. They are on the path to an IPO. They took a haircut. I think they were valued at $33 billion, down to $18 billion. They raised debt. They didn’t get very good rates to do so. And then they came roaring back and I mean, like roaring back. Just what was it like six months later? So I think good CEOs, they talk, they’re transparent, they come through. I think Evan Spiegel has a lot more challenges. There’s something about what Apple is doing that is upending the entire ad landscape. What TikTok is doing is upending the entire social media landscape. But I think that he is someone who investors at least you can count on hearing from him. He’s not going to back away if they don’t live up to the expectations that he talks to investor communities and shareholders so often that I put a lot of weight into that. [00:09:28][68.1]

Dan Nathan: [00:09:28] Yeah, well, you could tell that Kara Swisher really likes Evan and what was shocking to me and you forget sometimes that because he’s been in our lives as the CEO, founder of a company, that it has a service that almost every other person, you know, in America is using in some way, shape or form. He’s 32 years old. And Kara, I think, really respects exactly what you just said, the transparency, which, you know, as a journalist, because, again, he’s not only out there touting great new products when they’re at Con and whatever, but he also shows up when they have to do a meaningful guy down and cut 20% of their workforce. [00:10:01][33.2]

Deirdre Bosa: [00:10:02] Can I also say one thing about him? You brought up a really important point. You didn’t hear much about profitability. I appreciate that. Don’t tell me you’re going to be profitable for some obscure metric like adjusted EBITDA or even free cash flow that is less than your stock based compensation. So I appreciate that he kind of puts it out there and lets you decide. [00:10:19][17.6]

Dan Nathan: [00:10:20] All right. We’re going to talk about those two points that you just made because you are also on the ride share and delivery beat. And that is a theme. [00:10:27][7.0]

Deirdre Bosa: [00:10:28] Can you tell I was thinking of something. [00:10:29][1.4]

Dan Nathan: [00:10:29] Yeah, I definitely could. And we’re going to get to your interview with Dara, because you had a number of really good ones, but you just spoke to him in the past week. But I want to one thing, and I thought was pretty fascinating that while TikTok was not at this conference, TikTok was on the tips of everybody’s tongue, if you will. And I think they’ve turned into a really easy scapegoat, if you will, for a lot of like US social media or like ad based models. Because, again, I think a lot of these CEOs know that they’re squarely in not only the sites of U.S. regulators, but also Bytedance’s partner in China. Right. We know what’s happened over there. Talk to me a little bit about some of the conversations that you had. Was it really just lip service that a lot of these companies, it was very easy for them to blame some of the the woes. And again, you know, you just mentioned Apple’s, you know, the app tracking and everything like that. There’s a whole host of headwinds that are hitting these companies. But let’s talk about tick tock a little bit and just your thoughts and some of the reporting they’re doing and just some of the stuff that you’re hearing from investors. [00:11:26][56.9]

Deirdre Bosa: [00:11:27] I mean, the Holy Grail for advertising is engagement. And that’s what all social media companies are trying to figure out. And Dan have you ever been on do you use TikTok? [00:11:35][7.6]

Dan Nathan: [00:11:35] You know, it’s really interesting. And I think you know this I have daughters that are now 17 and 19. And, you know, during the pandemic, it was something that just obviously exploded. And people had a lot of time and they went from not only consuming but creating a lot of TikToks. It was like an activity that they could do and they were tracking different dances and they were doing a lot of stuff. And I will tell you now, they’re still spending a lot of time on it, but they’re only consuming. They are not making anything anymore. And that could be purely anecdotal, but whatever the behavior or the user behavior has really shifted. And you just said the Holy Grail is engagement. I don’t think power scrolling through videos is like a really upper end engagement unless you get your arms around what the algo looks like. Right. Because that that really is it. [00:12:20][44.7]

Deirdre Bosa: [00:12:20] Right. So you’re saying maybe there was more engagement at the beginning of it when they were participating and posting their own content? I just want to I will tell you, an hour will pass on TikTok and you sit up and you’re like, whoa, what just happened? It is so addictive and so easy for the other social media companies, like a Meta or someone or anyone really to say that it is addictive and it has some of these qualities that we don’t like about tech, but that is sort of the brilliance of it, too, right, is this algorithm. And that’s the fear is that it’s at the end of the day, in the back end, a Chinese company that is consuming this, that knows what’s capturing your attention, but leaves you on the app for an hour. You don’t even know where the time has gone. But I also feel like it’s a little silly to talk about banning TikTok for its privacy issues. When we have such poor privacy protections here in the United States. We like to say that on TikTok that it’s not the lawmakers that are regulating privacy. It’s Tim Cook and Apple. They’ve done more on this front than anyone has. And, you know, it’s easy because TikTok is that elephant in the room. We spoke to Jim Breyer as well, a brilliant investor who was an early Facebook investor, was on the board. I’m not sure if he still is, but he came on. He said, yes, the TikTok threat is so real. And we interviewed Bill Reddy from Pinterest this morning, too, and we asked him, What are you doing about video? Because even TikTok looms large for him. John, my co-anchor, was saying, you know, the Kardashians should be on Pinterest, not on Instagram. And it’s true. It’s kind of every social media network, every e-commerce platform is trying to in some way get that TikTok audience. [00:13:53][92.8]

Dan Nathan: [00:13:53] Well, it’s funny when you think about what Trump did with truth social. I think the Kardashians, if they came together with private equity backing and wanted to create their own version of whatever they’re unhappy with, with Instagram’s reels or whatever, it would probably take off like wildfire. So. Hey, Kim, give me a ring if you’re into it. [00:14:09][15.7]

Deirdre Bosa: [00:14:10] She’s a VC now. [00:14:10][0.2]

Dan Nathan: [00:14:10] I know well D-Bo you could be like. You could do some big things there. I’ll put the cast together, but let me take a step back. As you just mentioned, Meta and well, two things about the banning. Okay. I will just say this. My view has less to do with privacy because I agree with everything what you said about privacy here. Okay. My view is more if we are going to be in this tit for tat economic war with China and many of our large tech champions, if you will, don’t have access to their markets, which, again, Twitter, Facebook, most of our digital companies do not social media companies, that sort of thing, than why should one of their largest companies have access to our market? So now we might have a civil war, teenage girls versus regulators here in America. We may have another Capitol riot here. But my point very simply is that I think ultimately you saw what just happened with Nvidia this proposed export ban of certain chips or something. This is not going to get better before it’s going to get worse before it gets better, if you will. [00:15:09][58.3]

Deirdre Bosa: [00:15:09] Well, okay. So I don’t think you would have teenage girls versus the regulators. You would have an explosion of VPNs. That’s what I that’s what all the youth does in China, by the way, everyone actually does access the American apps if they want to. But I actually don’t know that they really want to because they have their own apps like WeChat over there that are hugely popular. [00:15:27][17.8]

Dan Nathan: [00:15:28] But they’re censored. Right. And so the issue is. [00:15:30][2.1]

Deirdre Bosa: [00:15:30] They are censorced you need to get past the Great Firewall. [00:15:32][1.4]

Dan Nathan: [00:15:32] If you if you use a VPN and you’re in China, though, and you get found out. You get in some serious trouble, you know? And so, I mean, again, I mean, we don’t have that issue here. And, you know, I know how lazy teenagers are in America. The idea of like setting up a VPN, while it’s pretty easy, I just don’t see it happening, so who knows? [00:15:50][17.6]

Deirdre Bosa: [00:15:50] Well, and I think that’s why what we’ve done with chips, what the US government has done with chips is so interesting because years ago leadership in Beijing said we’re going to pour billions and billions of dollars into our own chip ambitions and we’re going to create the next cutting edge chip. And they’ve really been unable to do so. It turns out that this is really, really hard to do on the lower end. Yes, they’ve been able to. But you need the Nvidia’s is you need these high end chips to create technology. The next generation of technologies, I think that’s more interesting and probably a lot more powerful than banning TikTok here. But they’re communist government, right? They can ban things left, right and center. Not even have to give a reason for it. Yeah. Do we want to get into that fight? I don’t know. Should we find a legal reason to ban TikTok? [00:16:34][44.3]

Dan Nathan: [00:16:35] Well, I think this could get pretty simple for us here is like especially if as our major manufacturers are looking to reshore manufacturing that is dependent on China and Taiwan. I mean, this might just kind of escalate in a manner where we have like a bipolar tech world. I mean, you just mentioned the Great Firewall. We already have that. So we might just see more and more reason why to kind of meet force with force. Current Ad. Masterworks Ad. Taboola Ad. You mentioned Meta here. And this is interesting. There was a Wall Street Journal article yesterday talking. It was an Instagram stumbles and pushed to mimic TikTok internal documents show this quote was pretty shocking and got a lot of play here. Instagram users cumulatively are spending 17.6 million hours a day watching reels, less than 1/10 of the 197.8 billion hours TikTok users spend each day on that platform. So this is really an issue, as Zuckerberg a year ago wanted to reposition this company towards whatever his vision of the metaverse is, and they went off on a huge spending spree to do that. The stock has been more than cut in half since then. It was down nearly 10% today, making new 52 week lows. Talk to me about that, because here’s a company that has over 3 billion monthly active users. Just think of that like a third of the planet. Now, the engagement is kind of lessening. Their ability to buy the ties them is lessening. They still have average revenue per user, far greater than any other social media platform on the planet that ever has. But when you think about the importance of Instagram right now, I mean, those numbers are staggering and it doesn’t seem like there’s any way in hell they’re ever going to be able to catch up to TikTok. [00:20:34][239.1]

Deirdre Bosa: [00:20:34] I come back this seems very basic and a basic thing to say, but Facebook, Instagram, it’s just not cool anymore. Have you noticed too, with your own social media network, like every ten years or so you want to kind of flush it out, but you can’t. And you have all of these people first it was Facebook, but you kind of were like, I feel weird knowing so much about their lives. And then you have Instagram and you have people who’ve had on your Instagram for five plus years and you want to kind of flush that out. And somewhere along the way it’s just lost its cool factor. That’s when Snap came along and now you’ve got TikTok and you’ve got new app Be Real, which I love. I’ve got like five people on it. The five people I really want to see what they’re doing. [00:21:11][36.9]

Dan Nathan: [00:21:12] Yeah, it’s funny. I mean, over the last to call it ten plus years, I don’t use a lot of those things. I try and I tinker. I’m just because I want to see what’s going on, like something that threatens an incumbent, that sort of thing. Be Real to me it seems exactly what goes on in SNAP. It’s just a different functionality. I see my kids, they take selfies and just send like a picture. That’s exactly what’s going on with Be Real, but it’s like two sided. So I get it. It doesn’t seem particularly innovative to me and I don’t expect it to be something that is like a powerhouse. [00:21:39][26.8]

Deirdre Bosa: [00:21:40] Okay. Well, here’s my question. Does it represent something to a younger demographic? And we’ve talked a lot about the mental health issues that social media networks have helped create or amplify. I don’t know, just maybe amplify. And this is what I asked Evan Spiegel too last week at code. I said, Does the rise of an app like Be Real? What kind of opportunity does that represent to you? It’s not curated. It’s more, quote unquote real. And that’s, I think probably Snapchat’s sticking power. They haven’t figured out how to monetize it, but the user growth has been really strong. [00:22:11][31.5]

Dan Nathan: [00:22:12] Yeah, well, I mean, in a different regulatory environment, Facebook would have just snatched that right up. And so when you think about it, I mean, they did a series B round, this is Be Real. It’s a French company at $600 million. And back in the day, I mean, when you think about that, that would have just been snapped up for a billion. That was like the nice round number, that Instagram and everything like that. So Evan Spiegel maybe should be doing that. When you think about their ability to buy things, I think some of their massive competitors, you know, obviously Alphabet and Meta would have a hard time, I think much less so when you think about the troubles that a company like SNAP is having, if they want to go out and buy some innovative things, the problem is again, on a gap basis, this is an unprofitable company. So, I mean, you and I could go back and forth on the things that they should do. My biggest takeaway from that conversation with Evan and I know that you had time with him on Tech Check, was that they really want to get focused right now. They really want to kind of get down to what the core of that product is and figure out how to better monetize the users that they have. But then also, I mean, they’re laying down the gauntlet because you said you’re happy that they didn’t come up with some sort of profitability metric that they will hit, but gaining 30% of their users over the next year and change. That’s a lot. [00:23:24][71.8]

Deirdre Bosa: [00:23:24] It is a lot. You bring up that word focus. I’ve been hearing that more and more recently and I spoke also this morning. We had Bill Ready from Pinterest and I asked him, okay, what’s your strategy? How are you going to turn around that social media network? And he just kept coming back to this focus. They’re going to focus on getting growing the merchant base and intend to buy there, talk to Chesky a few hours later and I asked him, okay, where are you going to go? Like vertical, you know, you’re this platform and that’s great. But now you got cash and you can do something like build hotels again or manage hotels. And he said, no. Something I learned during the pandemic is that I have to focus. And so that’s what some of these CEOs are taking this time, this downturn, with their stock falling so much from their peaks to just focusing on the things that they do best, while Dan you and I may have all these ideas, okay, you could go out there and do this acquisition. Wouldn’t that be interesting? But it feels like a hunkering down moment for. Especially those unprofitable tech companies. [00:24:23][59.2]

Dan Nathan: [00:24:23] Yeah, and I worry. Even like a Twitter, you know, again, about $5 billion in revenue is the same for SNAP. Pinterest is half that. I mean, I just don’t know how those companies kind of go it alone. I mean, Pinterest is, you know, marginally profitable on an adjusted basis and is expected to be next year. But I just don’t know how they get the scale. And so if SNAP is only worth $18 billion as an enterprise value, there’s no way that if a Delaware court makes Elon Musk close on Twitter at 44 billion, that snap is only worth 18 billion in my in my opinion. And so I think the best thing, again, I think Twitter shareholders make out if he is forced to close, I just don’t think he will close. I think he will continue to stretch it out and move it around. But if you’re a shareholder, you have every opportunity in the world to sell your stock. You know what I mean, right? You see the stock that moment. Yeah. I mean, like. Right. You could sell it right now if you just don’t think it’s trading at near $42 and the price is supposed to be 54. But I guess my point is, is that if that doesn’t happen, the management is out, the board is out, the stock is a 2 handle on it. Maybe it’s like somewhere in the twenties or something like that. And in that scenario, I think that you would maybe see and I know that they’re not similar products, but SNAP and Twitter and you just mention this they should combine. But you just mentioned this. Is that really important audience, that teen audience? Well, let me tell you something, okay? Like teens are not really spending you know, they may like just an interesting thing and you almost want to upsell them to different platforms and different opportunities. Talk to me about that. [00:25:55][92.2]

Deirdre Bosa: [00:25:56] Look at Roblox. I mean, they came out it used to be exactly what you’re saying is to say they say, look, our user base is young. They’re under 13 years old. They’re eventually going to spend money. And now you hear the CEO saying that, okay, now the majority of their users are over 13 years old as that is an asset because they’re going to have more money to spend. So it is moving up the value chain, but it feels like such a shift from the last few years. We talked about the Coinbase and the Robinhood’s and the Snap’s having this active young user base that they can capitalize on. The problem is that it’s been really, as you say, really difficult to capitalize on that always going to be the case. I mean, they have to keep them on the platform and make sure they don’t go somewhere else as they get older. [00:26:37][40.8]

Dan Nathan: [00:26:37] Yeah, and that’s it. And they need to have more offerings other than just like like VR glasses or something like that. So I’m with you. All right, let’s talk. We only have a few more minutes. You spoke to Dara this morning, the CEO of Uber. You’ve had a lot of interviews with him since he took over a few years ago from Expedia here. Talk to me a little bit about that business because they have come roaring back. Both Uber and Lyft have actually given some pretty upbeat guidance, right, about their businesses going forward. And these two companies are famous for guiding to some sort of like profitability metrics that, like most people think is a total Fugazi. But again, talk to me a little bit about like what you think the vibes going there because Uber has had a huge rally. It got to about 20 over the course of the summer and it was just trading I think around 33. And even today it really outperformed the broad market was only down three and a half percent versus the Nasdaq that was down five and change percent. [00:27:29][52.2]

Deirdre Bosa: [00:27:31] Relative outperform but when you say come roaring back, come roaring back from what? I mean, they didn’t do anything during the pandemic, didn’t really do much after. Uber went public at $45 a share. And remember I remember so well covering that IPO and there was talk that, oh, could this company go public at $120 Billion valuation as the investment bankers were fighting over who got to represent them? And it just hasn’t lived up to that potential because I know the reason I love covering Uber so much is I feel like it was my baby when I got to San Francisco as a tech reporter, didn’t really know what I was doing. The first company I looked into was Uber. It seemed like this exciting disruptor that had become a household name, a verb with this really controversial CEO, Travis Kalanick, who would go on to do all the wrong things, including that video of him chewing out a driver when he was in the backseat. So Dara came in and, you know, it’s really admirable what he’s done in terms of taking on this challenge. This is a Wall Street guy, though, right. And he’s very good at telling investors what they want to hear. So I wonder, this is a stock with an overwhelming buy rating. I don’t know exactly what it is, but it seems to me like Wall Street loves the stock. [00:28:42][71.2]

Dan Nathan: [00:28:42] Well, they were all on the deal. Okay. And there’s 43 buys, four holds and one sell. And I mean, that is astounding for a stock that is down 25% of the year. So it has outperformed many of its peers. But to your point, they were all in on the IPO and they’ve all stuck it out. And it’s been a dead bang loser because the stock’s 31 bucks. It traded 20, went public at 45, didn’t spend a whole heck of a lot of time above that. But here’s this. The astounding thing is that they’re expected to have $31 billion in sales this year. But on a gap basis, net income loss of 9 billion plus, which is crazy. [00:29:19][37.4]

Deirdre Bosa: [00:29:21] It’s wild. And then look at their valuation. This is not a tech company. This is valued like a valued company. Right. But that’s kind of what Dara Khosrowshahi has been doing. He has sold off all the most interesting parts of this business, like autonomous driving that its founder, Travis Kalanick, said was existential for the company. That is how they grow to become worth hundreds of billions of dollars. They don’t have that anymore. They don’t have scooters and bikes. They have done a bunch of acquisitions like Postmates. But Postmates was sort of tossed around by everyone in the gig economy. And the result of the M&A activity has been extremely dilutive to shareholders as well, along with the stock based compensation. So again, I appreciate how we moved on from adjusted EBITDA, that metric to drive me crazy, but now it’s free cash flow and it feels like sort of the new crutch for unprofitable tech companies. They can say, look, we have free cash flow, but then you look a little deeper and if you put back in stock based compensation, which, you know, Warren Buffett and others think, you know, the real expense, the real cost that you need to take into account, they’re still unprofitable. [00:30:29][67.7]

Dan Nathan: [00:30:30] Yeah, well, I get that. And again, that’s why we like to look at the gap and some of these names that you mentioned, the gig. I mean, Airbnb has a $79 Billion market cap. When you think about DoorDash, also like a 25 billion. We just talked about Uber at north of 60. I mean, so these guys, the unit economics of these companies have not gotten a whole heck of a lot better. [00:30:50][19.7]

Deirdre Bosa: [00:30:51] Except for Airbnb. Airbnb has gap profitability and they just did. They just announced a $2 billion buyback. So it’s interesting to see actually how. [00:31:00][9.0]

Dan Nathan: [00:31:00] Yeah but I don’t want to see that, do you? If you are a shareholder of that company, why are they buying back their own stock? Yeah, they want to be focused. They got rid of experiences, they got rid of, you know, hotel. You want to go do some cool shit man you know what I mean? Like, so to me, I don’t know. All right. [00:31:13][12.6]

Deirdre Bosa: [00:31:14] Like what? Yeah, I hear you. [00:31:15][0.3]

Dan Nathan: [00:31:15] No, I mean, again, it’s the kiss of death when you see, like, Twitter. You know what? Right before in February, they announced the stock buyback. Okay. The stock was in the shitter back then and Elon was buying it. Maybe they knew Elon was like buying stock out there. They thought it was a good time. And I remember seeing Ned Siegel, the CFO out in L.A. This was in early February. Before that thing I said, Dude, when you guys announced that stock buyback, I was like, I almost fell off my chair. And I said to him to his face, I don’t know the guy. I went up to him at a party somewhere and I probably ruined his night. Sorry, that nice guy. And I was like, Listen, just wait. I said, That is literally like, you just wave the flag for the activists and they’re coming and we know. [00:31:55][40.2]

Deirdre Bosa: [00:31:55] You’re a real party treat. [00:31:57][1.3]

Dan Nathan: [00:31:58] Well, you know, I was I’m sorry. I try to be real as they do. [00:32:01][3.4]

Deirdre Bosa: [00:32:01] I like that I would do the same thing because I’m such a nerd. I love I mean, come talk to me about buybacks at a party. I’m all in. [00:32:07][5.9]

Dan Nathan: [00:32:07] Well let’s let’s let’s be in you. We got to get together we got to talk about buybacks. We got to talk about like kind of funky profitability in the gig economy space. But listen, D-Bo, I know you got to go. I really wanted to catch up with you after code because you and I had some of the same thoughts after hearing some of those conversations. And I really hope that you will come back on okay, Computer will come on on the tape with Danny Guy and me, because I know that they’re jealous that I had you to myself today. [00:32:34][26.6]

Deirdre Bosa: [00:32:34] I would love to. And I will sort through my NBC email to make sure I never miss it again. [00:32:39][4.9]

Dan Nathan: [00:32:40] All right. Fair enough. All right, D-Bo thanks for joining us on Okay Computer [00:32:42][2.8]

Deirdre Bosa: [00:32:43] Thank you so much for having me. [00:32:44][0.7]

Dan Nathan: [00:32:44] All right. See you on Tech Check. Bye. Thanks. [00:32:46][1.6]

Dan Nathan: [00:32:46] Thanks again to our presenting sponsor Current and our supporters Masterworks and Taboola for bringing you this episode of okay Computer. If you like what you heard, make sure you hit, follow and leave us a review. It helps people find our show and we want to hear from you. Email us at contact at risk reversal, WorldCom, follow and connect with us on Twitter at okay computer pod. We’ll see you next time. [00:32:46][0.0]

Learn more about how Current improves its members’ lives at current.com/okay

Check out Masterworks, the world’s premier art investing platform masterworks.art/okaycomputer