The Prof G Pod with Scott Galloway – Prof G Markets: The Broken IPO Market, Disney’s Parks Investment, and Buying FTX Bankruptcy Claims

Intro

In this episode of “The Prof G Pod with Scott Galloway,” Prof G discusses various topics including the broken IPO market, Disney’s investments in its parks, and the buying of FTX bankruptcy claims. He also provides insights on market vitals, the Federal Reserve’s interest rate plans, Rupert Murdoch stepping down as chairman of Fox, and more.

Main Takeaways

Market Analysis:

• The S&P 500 fell, the dollar rose, Bitcoin dropped, and Treasury yields hit 15-year highs.
• The Federal Reserve paused its interest rate hiking campaign, but a majority of the board is prepared for one more increase this year.
• UK inflation has decreased but remains at 6.7%, while the US has the lowest inflation among G7 economies at 3.7%.

Rupert Murdoch and Fox:

• Rupert Murdoch stepped down as chairman of Fox at 92 years old, raising questions about his ability to participate or his health.
• The corporate governance of Fox may lead to the company being sold or assets being disposed of.
• Murdoch created one of the most powerful and profitable news franchises in history, but also spread conspiracy theories and engaged in anti-American activities.
• The Dominion lawsuit cost Fox more than expected and highlights the problem of deterrence in media.

The Broken IPO Market:

• Recent tech IPOs, including Clavio, Instacart, and Chipmaker arm, experienced a short-term pop followed by a retreat.
• IPO markets may be losing relevance as private markets offer more appealing valuations and liquidity.
• Private markets generate income inequality and are soaking up opportunities that used to be available for the public market.
• Lower floats create a mismatch of demand and supply, and the stock price becomes a signal for companies that don’t need the capital.

Disney’s Parks Investment:

• Disney plans to invest $60 billion in its parks and cruises business over the next 10 years, focusing on growth and adding three more ships to the Disney cruise line.
• CEO Bob Iger sees the parks division as Disney’s key growth engine.
• Investing in opportunities, not problems, is key, and Disney’s parks business offers high margins and limited competition.
• Disney’s stock declined after the parks investment news, possibly due to concerns about the company’s reliance on existing IP.

Buying FTX Bankruptcy Claims:

• FTX, a collapsed crypto exchange, is suing the parents of its founder, Sam Bankman Freed, for fraudulently transferring and misappropriating company funds.
• Investors have the opportunity to buy FTX bankruptcy claims, which can provide potential returns in the assets of bankrupt companies.
• FTX has assets including cash, coins, and investments, with $16 billion worth of customer claims filed so far.
• The bankruptcy case has recovered $7 billion worth of assets, including cash, real estate, and crypto.

Summary

Market Analysis and IPO Market:

In this episode, Prof G discusses the recent market trends, including the fall of the S&P 500, the rise of the dollar, the drop in Bitcoin, and the high Treasury yields. He also highlights the Federal Reserve’s interest rate plans and the inflation rates in the UK and the US. Additionally, Prof G explores the broken IPO market, where recent tech IPOs experienced a short-term pop followed by a retreat. He explains how private markets are becoming more appealing for companies, leading to a decrease in the number of IPOs and potential income inequality. Prof G emphasizes the importance of valuations and liquidity in the IPO market.

Rupert Murdoch and Fox:

Prof G discusses Rupert Murdoch stepping down as chairman of Fox at the age of 92 and the potential implications for the company. He explores the corporate governance of Fox and the possibility of the company being sold or assets being disposed of. Prof G acknowledges Murdoch’s achievements in building a powerful news franchise but also highlights his involvement in spreading conspiracy theories and engaging in anti-American activities. He discusses the Dominion lawsuit and its impact on Fox, highlighting the issue of deterrence in the media industry.

Disney’s Parks Investment:

Prof G delves into Disney’s plans to invest $60 billion in its parks and cruises business over the next decade. He explains how CEO Bob Iger sees the parks division as Disney’s key growth engine and the strategic move to focus on opportunities rather than problems. Prof G highlights the high margins and limited competition in Disney’s parks business. However, he also mentions concerns about the company’s reliance on existing intellectual property and the decline in Disney’s stock following the investment announcement.

Buying FTX Bankruptcy Claims:

Prof G explores the opportunity for investors to buy FTX bankruptcy claims, which can provide potential returns in the assets of bankrupt companies. He explains the lawsuit against the parents of FTX’s founder for fraudulently transferring and misappropriating company funds. Prof G discusses the assets of FTX, including cash, coins, and investments, and the $16 billion worth of customer claims filed so far. He highlights the recovery of $7 billion worth of assets in the bankruptcy case, including cash, real estate, and crypto. Prof G emphasizes the active market for buying and selling claims against bankrupt companies.

Conclusion

In this episode, Prof G provides insights into various topics, including the market analysis, the broken IPO market, Disney’s parks investment, and buying FTX bankruptcy claims. He discusses the challenges and opportunities in these areas, offering valuable perspectives on the current financial landscape. Listeners gain a deeper understanding of market trends, corporate governance, investment strategies, and the dynamics of the media industry.