The Prof G Pod with Scott Galloway – Prof G Markets: Arm’s IPO, Instacart’s Valuation, and Salesforce’s Year of Efficiency

Intro

In this episode of “The Prof G Pod with Scott Galloway,” Prof G and ProvG Media Analyst Ed Ellsson discuss the latest news in the market, including Arm’s IPO, Instacart’s S1 filing, and Salesforce’s year of efficiency. They also touch on topics such as the China-US trading war, Lionel Messi’s move to Inter Miami, and the changing landscape of the media industry.

Main Takeaways

China-US Trading War

• China expands ban on government worker use of iPhones due to cybersecurity concerns.
• Montana bans TikTok as a signal to China.
• Both countries getting along could lift more people out of poverty and create jobs, but trade wars are expensive and decrease the standard of living for everyone.

Messi’s Move to Inter Miami

• Lionel Messi’s Inter Miami debut drives 110,000 new signups in one day to MLS season pass.
• Messi’s move to Inter Miami is a win for him, the MLS, and his family.

Changing Landscape of the Media Industry

• Warner Brothers Discovery blames $500 million loss on the writer’s strike and failing ad-supported cable business.
• Netflix benefits from the writer’s strike with its deep content queue and international productions.
• Multi-billionaire behind Five Hour Energy buys regional sports networks and uses AI to produce minimum viable content at a fraction of the cost.
• PropG uses AI to expand to different languages at a lower cost.
• Consolidation expected in the media industry, with cost-cutting strategies and asset acquisitions.
• CNN launches 24/7 live news on MAX streaming app, potentially leading to a fiber CNN that becomes an intel inside.

Arm’s IPO and Instacart’s Valuation

• ARM, specializing in smartphone processor designs, plans to go public at a target valuation of $52 billion.
• SoftBank’s investment strategy and history with ARM.
• Instacart raises $265 million at a $39 billion valuation, but slashes it down to $10 billion due to trouble in 2020.
• Instacart’s growth, profitability, and revenue from advertising.

Salesforce’s Year of Efficiency

• Salesforce’s Q2 earnings report shows a near 20-fold increase in quarterly net income.
• Salesforce raises annual margin guidance to 30% and CEO Mark Benioff calls it a “miracle.”
• Cost-cutting strategies and activist play by Elliot Management at Salesforce.
• SaaS companies pursuing profitability and the impact on revenue growth.

Summary

China-US Trading War

The ongoing trading war between China and the US has led to China expanding the ban on government worker use of iPhones due to cybersecurity concerns. Montana also banned TikTok as a signal to China. Prof G and Ed Ellsson discuss the implications of this trading war, highlighting the potential benefits of both countries getting along and the negative impact of trade wars on the standard of living for everyone.

Messi’s Move to Inter Miami

Lionel Messi’s debut with Inter Miami resulted in 110,000 new signups in one day to the MLS season pass. Prof G and Ed Ellsson analyze Messi’s move to Inter Miami, emphasizing its significance for Messi, the MLS, and his family. They discuss the potential impact of Messi’s presence on the growth and popularity of the MLS.

Changing Landscape of the Media Industry

Prof G and Ed Ellsson delve into the changing landscape of the media industry, starting with Warner Brothers Discovery’s $500 million loss, which they attribute to the writer’s strike and the declining ad-supported cable business. They contrast this with Netflix’s success during the writer’s strike, thanks to its deep content queue and international productions. The discussion also includes the strategies employed by a multi-billionaire who started Five Hour Energy, using AI to produce minimum viable content at a fraction of the cost. PropG’s utilization of AI to expand to different languages is also highlighted, along with the expected consolidation in the media industry and the potential impact of CNN’s launch of 24/7 live news on the MAX streaming app.

Arm’s IPO and Instacart’s Valuation

Prof G and Ed Ellsson analyze Arm’s upcoming IPO, specializing in smartphone processor designs, with a target valuation of $52 billion. They discuss SoftBank’s investment strategy and history with ARM, including SoftBank’s last month valuation of ARM at $64 billion. The discussion then shifts to Instacart, which raised $265 million at a $39 billion valuation but had to slash it down to $10 billion due to trouble in 2020. The profitability and revenue from advertising of Instacart are also explored.

Salesforce’s Year of Efficiency

Salesforce’s Q2 earnings report shows a near 20-fold increase in quarterly net income, leading to the company raising its annual margin guidance to 30%. Prof G and Ed Ellsson discuss the significance of this achievement and CEO Mark Benioff’s characterization of it as a “miracle.” They delve into the cost-cutting strategies implemented at Salesforce, including an activist play by Elliot Management, and the pursuit of profitability by SaaS companies. The potential impact on revenue growth and the need for investment and risk-taking are also explored.

Conclusion

This episode of “The Prof G Pod with Scott Galloway” covers a range of topics, including the China-US trading war, Lionel Messi’s move to Inter Miami, the changing landscape of the media industry, Arm’s IPO, Instacart’s valuation, and Salesforce’s year of efficiency. Prof G and Ed Ellsson provide insightful analysis and discuss the implications of these developments in the market.