Chit Chat Stocks - Micron's Mad Earnings Report; Michael Saylor's "Dumb" Strategy; An Intriguing IPO $MU $MSTR

Episode Date: June 26, 2026

The Investing Power Hour is live-streamed every Thursday on the Chit Chat Stocks Podcast YouTube channel at 5:00 PM EST. This week we discussed: (00:00) Introduction (01:09) Micron Madness: Earnings and Expectations (10:02) The AI Chip War: OpenAI's Custom Chip Announcement (17:32) Meta's New Ventures: Prediction Markets and Glasses (31:49) Meta's Capital Allocation and Market Comparisons (32:08) Lime's IPO and Business Model Insights (36:38) MicroStrategy's Bitcoin Strategy and Market Impact (42:03) The Future of MicroStrategy and Bitcoin's Viability (45:10) Quarterly Reporting vs. Semi-Annual Reporting for Companies (52:41) Researching Industries and Competitors (56:11) Wise's Business Performance and Market Positioning ***************************************************** Subscribe to Emerging Moats Research: emergingmoats.com  ********************************************************************* Chit Chat Stocks is presented by Interactive Brokers. Get professional pricing, global access, and premier technology with the best brokerage for investors today:  https://www.interactivebrokers.com/  Interactive Brokers is a member of SIPC.  ********************************************************************* Fiscal.ai is building the future of financial data. With custom charts, AI-generated research reports, and endless analytical tools, you can get up to speed on any stock around the globe. All for a reasonable price.  Use our LINK and get 15% off any premium plan: ⁠https://fiscal.ai/chitchat  ********************************************************************* Disclosure: Chit Chat Stocks hosts and guests are not financial advisors, and nothing they say on this show is formal advice or a recommendation. Learn more about your ad choices. Visit megaphone.fm/adchoices

For the past three years, IBKR individual clients averaged 24.3% annually, beating the S&P 500's 23.1%. Lower costs and 170-plus global markets matter. Interactive brokers, member SIPC, visit ibkr.com slash performance. Welcome to Chit Chat Stocks, the podcast that helps you find your next great investment. I'm one of your hosts, Ryan Henderson, and I am joined, as always, by the one and only Brett Schaefer. Today, we've got our weekly Investing Power Hour episode. We do these live on Thursdays at 5 p.m. Eastern Time, and we talk all things financial markets on these episodes. So news, headlines, earnings, we've got plenty. We've got a new IPO coming out. We've got custom chips from one of the world's leading AI labs, micron earnings, wild times in memory chip world. and we've got a massive drawdown in none other than micro strategy and plenty more to get to but before we do that please if you enjoy the show give us a review if you're one of those

people that listens all the time please please please do give us a review shouldn't take too long and it really helps the show grow but without further ado let's get to the episode Brett, where do we want to start? I think we should start with Micron, Ryan. The stock is going crazy. I already have the title loaded up in my mind. Micron Madness, something like that. Yeah, go through the numbers while I send out the link to the Substack chat to get some more people in here.

Yeah, Micron Madness, great headline. Uh, they exceeded analyst estimates by a pretty substantial margin. So I wish I could share my screen here, but I'm going to focus on the audio for a second. Analysts were expecting $35 billion in revenue. Keep in mind, this is a company that this time last year was doing, they generated $9 billion in revenue. analysts were expecting 35 billion this quarter they reported 41 billion they beat revenue expectations by six billion dollars which is pretty astounding they were to put it in context

they beat revenue expectations by six billion which is almost as much as the entire company generated this time last year uh naturally this translated to much better than expected earnings as well. So plenty of operating leverage there. And there was one quote that really stood out and obviously the management teams for Micron and any of the memory chip companies are acutely aware of the narrative out there for memory chips that it's cyclical and that this is just a temporary blip. So here was the quote. Yeah, Brett's sharing the screen. They've beat revenue expectations handily uh and they have done so now for i think 12 quarters in a row it looks like big question is those estimate lines though that aren't real is that going to be the case are they going to

be that are they going to miss that i i feel like it's a coin flip maybe a third chance they go right in line there a third chance the ai boom just continues and they have this pricing power and a third chance it totally collapses whoever wants to invest in that i'd say good luck Here's the quote I will read, though, Brett, and I think it's interesting, to say the least. So the CEO of Micron said, With respect to supply, our customers are recognizing that supply shortages in memory and storage will take considerable time to improve. Even as we expect industry supply to improve gradually in 2028, we currently do not have line of sight as to when memory supply will be able to catch up with increasing demand. memory industry supply growth is dependent on significant greenfield fab expansions these

greenfield projects are large complex and time consuming the pace is constrained by several factors including long lead times for fab construction across the world shortage of workers with critical trade skills complex regulations including permitting and the need for enhanced energy infrastructure meanwhile memory process technology which is among the advanced to develop and manufacture in semiconductors is getting more complex with every new node. If you're an investor, that is music to your ears. But I think there's an important line to pull out here. Even as we expect industry supply to improve gradually in 2028, we currently do not have line of sight as to when memory supply will be able to catch up with increasing demand

basically they are saying they do expect supply to increase maybe not this year but next year but they're they expect demand to increase even more i think the concern or the skeptic would be saying that the it's when the demand line starts to come down that or demand maybe isn't doesn't grow exponentially for as long as people think it will that we start to see the supply glut potentially take over but i do think i mean this raises some points which is a lot of people obviously ourselves included just say it's it's memory chips it's cyclical supply will meet demand every company is going to expand capacity microns expanding expanding capacity it's just a matter of time but i think it's going it will

take time honestly it's going to take time to build these manufacturing facilities and for one year or two years they will have outrageous cash flow the big question is when now for anyone that was not around a few years ago at least paying attention to economic stuff i have a chart here the containerized freight index i believe this is a good proxy for the cost to ship goods around the world in the pandemic it collapsed and you can see remember when all of the ports had a supply restriction do you remember when there was 60 uh not lng tankers i'm thinking of energy but the shipping container giant ships i don't know what they're called they were outside of the long beach terminal seattle new york where have you yeah yeah i remember okay and remember at the time

everyone said we don't know if this will get fixed and then it got fixed next year yeah it's not it's pretty similar i'd say yeah i think it's always it's always easy to say this time is different well the experts are they just they know the industry so well they're like oh we got to solve all these issues well they're really all the people in the industry are pretty damn smart and i think it almost always happens like this it just depends if it's this year next year or three years from now who knows how big this cycle will be yeah i think the optimist would say that construction to increase supply will take longer than a year or two and during that time demand will still increase but again that's yeah i

i think it's a matter of when not if so and the thing about that chart which again that happened basically a year after which the container ship thing for anyone that's just listening the price to ship something in a standardized freight container went from five i believe it's in us dollars say a five thousand dollar index to a thousand once the supply glut happened this will eventually happen to memory chips we are already probably seeing uh things that are going to restrict demand the nintendo raised their prices uh the other video game players are going to raise their prices but importantly apple just raised the price on their uh i believe ipads and computers and that's going to flow through and decrease demand for them again

supply is going to eventually meet demand and it's going to normalize when it happens we don't know i think maybe we can talk about open ai here uh as another relation to this because they're talking about again memory i think is a little different than what open ai is building but it feels like a lot of companies wherever you are in the supply chain are trying to bring chips to market yes here's my thing is like what what do you do how do you invest in in a cyclical in a memory chip company before the cycle starts or right yeah but you gotta have that knowledge that say that there's going to be a memory chip bottleneck i'm not smart enough to do that i know it just feels like i just have to say no and i've missed out on returns because of it but

when things are going poorly it looks outrageously expensive right when the cycles at a trough earnings are decimated and it looks like it trades at 100 times pe or whatever like that right now it looks like it trades at whatever 10 times forward earnings and all of a sudden it looks more attractive but it might be 10 times 2027 earnings and 50 times 2030 earnings right yeah it's yeah i it just goes in the too hard pile for me do you want to talk about this open ai announcement yeah i think it relates to this question we have from tyler that says why do you guys think investors love the end of the ai supply chain memory asml tsmc but hate the companies which deliver ai hyperscalers and meta despite those businesses being high returns on

invested capital follow-up if hyperscalers get bad returns they will stop buying chips so isn't this ultimately the same investing question yet one group is up 100% while the hyperscalers are down 30% i think maybe this relates to everything because there's uncertainty about where the data center demand is going to go to you have spacex about to pour a ton of money into this but open ai just announced um not it's not in manufacturing yet but a new custom chip they're calling it jalapeno jalapeno want to say that correctly that's pretty good name for a chip honestly i like it uh this has been flying under the radar this week for whatever reason here's a quote from the press release open ai designed the chip from scratch around its deep understanding

of lom fundamentals formed by its roadmap and models kernels serving systems and product needs of partners Broadcom and Solistica, helping industrialize the platform through chip implementation, board rack system integration, high performance networking and scalable production systems, blah, blah, blah, blah, blah. Apparently, it's coming out in the next year or so and it will have a better performance per watt compared to existing use cases. Quote, Jalapeno was co-developed from initial design to manufacturing tape out in just nine months and the custom AI accelerator program represents what we believe to be the fastest ASIC development cycle ever achieved in high-performance advanced semiconductors. I think investors maybe are nervous about

this custom chip war versus NVIDIA. And I look at it, and again, there's the cyclicality with this company as well. But why wouldn't you just want to own TSMC, ASML, maybe some other semiconductor equipment providers, instead of trying to bet on who wins this cloud war, AI neocloud war, the vertical integration play from OpenAI and Anthropic, that's tough. And yeah, OpenAI said they're going to be pouring these into data centers with Microsoft. But what about that Stargate project? What about what SpaceX is planning to do? Not in orbit, But on earth, yeah, I think I understand that point there. But I agree again a little bit with Tyler that if the hyperscalers stop buying, the demand has probably fallen off a cliff.

But honestly, if the hyperscalers stop buying, the hyperscalers might be – the stock might be a buy, right? Because they're done with the bad ROIC investments. well i mean we first of all we don't really know if they're bad roic investments today like for the hype okay let me potentially bad roic right the stock could go up honestly if they stopped buying purely because cash flow will go up but i think to tyler's question why do people prefer the tsmcs the asmls of the world it's because they are not the ones bearing the cost necessarily they're the ones benefiting today so you look at the hyperscalers and obviously they're delivering more cloud services etc and they're selling some chips but largely the increase

in memory chips or the increase in price in memory chips gpus all that is has hurt cash flow probably all lsql for the hyperscaler so i just think it's probably short termism maybe a bit i i don't want to touch anything involved in the chips anything that is extremely extremely reliant on chip prices or the depreciable or the depreciation schedules of chips i i'm straying away from my portfolio and if you have a time horizon longer than the next quarter if you're not chasing like the index over the next quarter i just think right now there are so many opportunities if you have a three to five year time horizon and you're not worried about ai And I don't care if AI boom is going to create this whole utopia world.

That would be fantastic. But that's if he goes crazy because of it. I'm just looking for solid returns in my own portfolio, and I feel like there's just a plethora of opportunities out there. Yeah. I mean if you look at – we recorded an episode this morning and it will be out next week of basically a whole bunch of stocks down more than 50 percent. I don't know if I've ever felt like there are this many high-quality businesses trading at least down 50 percent or down 40 percent in tandem. Like usually you'll get one or two that were considered market darlings that drop for whatever reason. It's almost difficult because you have a lot of companies that were perceived as high quality all dropping at the same time and I honestly can't make my mind up. You have to decide on all these – or maybe you just take a basket approach.

But I came away from our conversation this morning, Brett. But I would be comfortable owning any of the stocks we talked about on that episode, which is – Maybe not any, but most. Maybe not any, but most of them. There's like 20 stocks in the S&P 500 down more than 40% year-to-date that are up until this year considered high-quality businesses. It just – yeah, I think there's a lot of options elsewhere. You don't need to be invested in the semiconductor space. Yeah, and I have an update for the newsletter coming out on Airbnb tomorrow, which if you're listening to this on your podcast player, it will be today.

And it's a tough choice where I think that now that's not one large drawdown, but I think there's – you can get pretty good – pretty decent forward returns owning that thing, owning that stock. But you have to weigh that versus the existing holdings in your portfolio or other stocks on your watch list, and I feel like it's just a really great problem to have deciding to being two different stocks you feel like can deliver those 15% IRRs. Now, maybe we're just naive and the AI wall is going to kill everything, but when you look at something like a Copart, why is that? Is that down? I don't get it. There could be. Claude will disrupt junkyards. I guess we'll have so many junkyards maybe um so maybe that's actually self-driving risk now

that I think about it but we've I've been told that we don't understand Copart's business model I don't I just know it's considered high quality and I haven't looked at it and it's down a lot but yeah that's an example and there's I think plenty dozens and dozens of others for whatever people are comfortable with should we talk meta related to the hyperscalers and go to something else before we do you mentioned Airbnb there and I don't know if we ever talked about it but But what did you think of Brian Chesky launching a new AI venture? I did look into this as a part of the update. It's not as bad as the headlines seem because he is just putting his stamp on it to kind of get funding.

It's more of like he's just going to be on the board. So it's not as bad as people think. I'd maybe like that to be within Airbnb, but I understand if it's going to be a separate kind of design, internet design, interface, AI lab, maybe you would have that as another company. Airbnb would use its products, but there's a slight concern that he would chase something else. I gave it maybe a yellow flag, but the headline suggested worse than what was under the hood. you research your investments you analyze markets you manage risk but did you research your broker for the past three years ibkr individual clients averaged an annual return of 24.3 percent compared to 23.1 percent on the s&p 500 ibkr's lower trading cost competitive rates efficient execution

and access to more than 170 global markets helped investors keep more of what they earn and put more capital to work over time the broker you choose matters interactive brokers member sipc if you care about performance find out why the best informed investors choose interactive brokers at ibkr.com slash performance yeah just i don't know being when you're in founder mode so to speak Like I don't want you in board member mode. He's on the OpenAI board. People can be on boards. I know, but is Zuck on any boards?

I honestly don't know. The Zuck Chan Initiative. He's definitely on that board. That's a distraction. I guess. It just feels – I don't know. It feels like Airbnb has an incredible opportunity right in front of it. It just feels like a distraction.

like if it's just using your name to get funding for someone else to do this i don't hate it but yeah i get that as slight concern we'll see what happens it could be something that he chases or it could be a nothing burger let's talk meta uh first i will say uh i said this in the subsect chat before recording i'm closing out my psychological short it's off 31 from highs thank you for your attention to this matter and i think the stock is definitely back to a reasonable price did i make any money on that no but the the hate you get for being bearish on meta uh at any point is strong i don't know why it turns into a cold stock but uh i just wanted to toot my own horn there first thing before we go to the products kyle kuzma was speaking to

meta did you see this yeah now he seems like a smart guy but this is a basketball player speaking to who i assume are some of the smartest ai scientists in the world uh quote had an amazing time at meta speaking about the future of ai what i look for in companies leadership and how to best serve this new modern world for good through philanthropy thank you meta i would like to meet kyle kuzma but is that kind of just show where meta's at and kind of an all show mentality versus open AI, anthropic, stealing all of the best scientists from these businesses? I will say there were no pictures of the crowd there. So it's very possible all the seats were empty.

Like from the pictures I saw, it was only of Kyle Kuzma. That's possible. Maybe there's people at – and I will – also, if you're only taking pictures of the speaker, typically it's because the crowd is not large. the if there was a crowd meta deserves a below market multiple it really does because you don't know you don't need you are they are the experts like they don't need the the insight from from kyle kuzma look it's he's word offices like him i'm not saying that this he does seem like he likes this stuff a lot but if i was a famous person i wouldn't want to speak at meta i'd say

hey i'd like to meet you come by for a lunch or something and meet one of the executives i would i would feel like such an imposter speaking about ai to a bunch of ai folks at meta it would now i get that like for him people maybe just want to meet him and and he was probably thrown into this and asked to do it would be my guess. I don't think he was, like, begging Meta to let him talk about AI. They're not doing this at Anthropic. That's all I know. Well, I hope not.

I hope not. I hope not. All right. Well, here's what the actual products were released this week or reported on. Meta plans to release its own prediction markets app. First, it's going to be no money until they get approvals from regulators. But what do you think? one of the first standalone apps they're going to do in a long time i don't necessarily count

threads because it just connects directly to instagram and it's just force feeding that on users but that has been semi-successful can prediction markets work for meta if they use their ai to i don't even know i'm talking hocus pocus now like feed feed the live odds to people i i don't know what are your thoughts yeah i think it can work honestly it there's probably some form of a social component to prediction markets would be my guess there could be looped in and you know they've done this before with standalone apps that have gained traction and maybe they rework it and integrate it in a way i mean instagram was originally a standalone app right and i guess it is a standalone app but they test stuff they they built uh now

they acquired instagram but they they put teams on this i don't see any harm for them going after this you're lukewarm lukewarm on it could work it yeah it put it put a team of 50 people on this Why not? Sure. Yeah. It seems interesting. I think more of these, like the Robinhoods, IBKRs, all these companies are going to do fine with this stuff. That's where I feel like the money is going to get made because if you're trading, you already have the bank account.

You have everything connected. I don't like CalShear Polymarket because they have, one, it's hard to deposit, at least when I checked, and then you have these insanely high fees. Yeah. yeah i didn't maybe meta makes it easy too but i didn't put all the pieces together until recently i was uh watching a game with a friend and he's like oh i've got i've got money on this and i'm like oh these things might need to be regulated away it's pretty bad yeah i was like how do you have money on it he said oh i just in my robin hood account and i i hit the realization that that is the biggest they shouldn't have done that honestly like i know robin hood is already

like ethics kind of went out the window a while ago with them but it to me this is egregious like you went from it's a totally different ethos like save money invest money here like save invest and piss away like that could be your mantra it just doesn't make any sense there it's like options trades a lot of people look just like what are they the just buying call options or what have you a lot of people lose money the stats are undeniable let me uh let me pull this up real quick i remember looking at the average account value of a robin hood account compared to schwab and let's see if I can... It's not great.

It's not great. Did you make this as a custom one? Yeah. With our friends at Fiscal AI? Let me just say, while you're putting it up, I could read our advertisement for our friends at Fiscal AI, Ryan's employer, and our longtime sponsor that a lot of people have used the link to sign up for.

It's fiscal.ai slash chitchat. Get 15% off any paid plan. You can use all of the KPIs and many, many other tools for just the standard data, or you can make custom KPIs like Ryan is building right now. This is one that Ryan likes to tweet out through the Fiscal AI account.

Have you gotten 100,000 followers on there yet on Twitter? Do you get a bonus for that? No, not yet. That should be in your contract. I don't know about a bonus, but... It'll help at the end of the year. Yeah, man, it helps the business, right? Okay, speaking of Fiscal AI, pulled it up.

Actually, let me just share my screen. This is the average account value at Robinhood versus Schwab. On the top here, you can see Schwab. Average account value is $309,000. I think IBK is like 500K too, something like that. But either way, yeah. Robinhood compared to everyone else. Yeah.

Robinhood, average account value is $12,000. $12,000? And with this launch of prediction markets, it could get lower. yeah honestly they might be hurting themselves here like they collect all the fee revenue but take all their clients money away too much fee revenue and your whole business goes away yeah uh we got other topics but we don't need to do stated prediction markets just it's yucky i think it's at risk of being regulated away all right here's the other product that is a little more relevant to meta's business in the near term because it kind of combines the video content

of instagram the reels juggernaut all that good stuff i've seen a lot of investors hyped up about these new meta glasses that are launched and were i think designed and sponsored by kylie jenner the number one i think instagram model in the world uh the combo of glasses plus instagram could drive maybe a good content flywheel in the real world i'll say i hate these again we've talked about this before i think there's going to be a societal backlash from this i've seen those those videos of uh what like a callie's uh i don't know like grungy looking guy with a flannel jacket trying to just forcefully take him off this person's head that was videotaping him i don't that's i think a lot of people don't want to be unwillingly filmed in public and maybe people

don't have a backbone but i think that is just a huge barrier to this business regardless of if everyone's happy about it it's a nice vertical integration but i'm not trying to get pranked public by random people with meta ray bans is that is that that logical i i do think it's a bit of a privacy concern for a lot of people look customer fit wise i don't think people are going like these are the creeper glasses no i don't think they will land with well now they look like the glasses that women wear now do you remember a long a while ago zuckerberg went on joe rogan podcast and they and joe rogan asked him this exact same question like what's to stop people from just like creepily video recording people and zuckerberg was like well there'll be

there'll be a light when you record he's like what if people just put tape over it it's like they hadn't thought that through it's like these are creepy oh they've thought this through they just go what are people gonna put up with so we can make money yeah i don't know if this even drives the flywheel for instagram reels because i've watched other people's feeds um quite a bit of his fake ai stuff so like that's probably the true growth avenue for our wally future i also just don't think people want stuff on their face like but it has to look good that's why they're getting these beautiful women to to wear them it's classic you know the contact industry exists and is successful for reasons because people want less stuff on their face

that's fair but they're like sunglasses i'm trying to play devil's advocate i can understand i want these to fail i really want them to fail it doesn't well i think the fact that they have to spend a bunch of money and get a bunch of attractive instagram people to wear them shows that you need a bunch of you know pavlov dogging to the to people to get them to wear right no one wants to wear these until there's like a social thing to do it yeah i guess i don't but does it make meta a buy that's a molly fool that's a molly fool article right there it's so meta it i almost want to like you know how you hate watch certain games like you hate watch certain teams i almost want the dr congo no i almost want to hate invest in meta like own it

just a because it's cheap but like every time it upsets me or they do something that i think is stop just be like well you know what if the stock goes up uh there's my emotional hedge yeah yeah i if we could just get the pure play instagram and i'm and i guess uh facebook and whatsapp please that's printing money it's going to continue to print money divest family of apps that would be your activist campaign yeah i don't know if they could raise money for uh it's a little bit messy a lot of it connects together but the wearables it's it's still money because okay you have to look at it like this they spent what a hundred billion dollars on uh what is it reality labs doing interesting things but to get an roi people are going well

they're gonna sell 10 million of these kylie jenner glasses probably at a loss like they're gonna sell them at a loss it's yeah i don't think any of this will stick like they have to have a huge hit here with the glasses and frankly i just don't think they will the way of common that says ryan would prefer the snap glasses which i showed last week those are lovely those are even worse if you want to feel good about meta's capital allocation check out snap uh relatively speaking They look like – makes Zuckerberg look like Buffett. Okay. But talking about it too long frustrates me.

So let's shift gears. Maybe something positive? Positive Lime IPO? Interesting business? Sure. Yeah. I see a micro strategy here. We don't want to get too pessimistic when everyone's stocks are going down.

Lime filed their S1, I think. Yeah, yeah. I read this. Skim the S1. I can't read all 100 pages. before the power hour. But here's the numbers. And again, this is Lime, the scooters that you may have seen around cities. Some people hate these. I understand why. Some people go crazy for adding them. But they're seeking a valuation of just $1.66 billion. So right away, that kind

of goes, all right, nothing crazy. The company is actually called Neutron Holdings, which of course it is. But just for anyone reading about it, that's what the company might be listed at. they operate in 230 cities and they've had 19 million total unique riders they have 3.8 million monthly active users that have steadily grown their uber partnership which also has an investment in the company drives 15 percent of demand 345 million dollars in gross profit slight net loss in 2025 positive free cash for the last two years they're growing at a decent rate i think it's like 20 year over year um regardless of price any interest in this business model because i think there's some potential i like using the term that i coined emerging boat characteristics

if you can get scale in a city what are your thoughts right yeah at at six times five times gross profit probably not i don't think but i do think as much as i hate how some people ride these things uh i do think there's validity to this business model it is it's a fine in between if you don't want to uber and you don't have a car and you have a car in a city that's not super walkable or has transport if it's too far to walk you know maybe the scooter makes sense I see these all over Austin, honestly, and that's – there's times when it's a good fit. So I'm not against the business model. I wonder how much maintenance CapEx is required.

Yeah, I was thinking a diabolical short could be is you just pay a bunch of homeless people to throw them into bodies of water and then you short the stock. Yeah, that's – I mean these things are thrown around. Like they are treated very poorly by customers. So I just wonder – Well, they've been around for a decade and they're generating positive free cash flow now. So I would think they're proving that a bit. But it's part of the business model. But let's say – OK.

So do you have the numbers? I'm curious how much they spend in CapEx. My guess is that they have to spend a lot of money to fix up these things. Let's use our good old friends, the search function. Neutron Holdings. What do you call capital purchases of property and equipment, right? Whoops, I'm misspelling. Purchases of property and equipment.

Let's see. Investing activities. You find it? Well, look. You got to keep talking. It's okay. We have some questions about microstrategy, strategy now. Talk about that in a second.

Someone says, with the amount of injuries those scooters have caused, they better have a great legal team. Yeah, that's probably – honestly, that's a real cost for them. Okay, I have net cash used in investing activities. i can't find the actual statement right now but 2025 111 million on 345 million in gross profit revenue is like 800 something million so it's not terrible what's their cost of sales paying people to bring these things back to their chargers yeah well cost of revenue boom wow speak of the devil i was right scrolling on it cost of revenue is depreciation um okay they just said it grew because it grew because they're all

it's a cost of revenue grew because revenue grew so all right well well we don't need to dive into everything left let's uh yeah i'll be interested to see what that comes out as wasn't there one of these that uh spacked that wasn't there like a was it all uh bird or something i thought bird was a spec it went to zero yeah i like that they have their relationship with uber uber probably professionalized them get the dara stamp it's nice and this business model like i think these have value there should be regulations there should be speed regulations probably uh you should be able to ticket people if they're gone crazy in the middle of roads but it's like a car right it's safer than a car yeah uh speaking

of mobility i had a run-in with a self-driving tesla i don't know the other day a good run-in or a bad run-in uh it just parked itself in the middle of like an intersection basically like it didn't know it was so bad running yeah yeah i mean it didn't hit anybody but so we're not going across the u.s anytime soon it's just like yeah it made it halfway through the intersection stopped and then just backed out of it uh anecdotal evidence for waymo then that it's still ahead still out of the back yeah long ways away it's kind of it's feels like this is like the testing ground austin seems like the epicenter for testing every self-driving car but let's talk micro MicroStrategy, well, formerly MicroStrategy, strategy is down more than 80% from its 2025 highs.

It's down, I think, 78% this year versus the S&P 500, which is up 24%. It is down, well, it might have changed now, but it was down 20% today. Maybe you can check me there, Brett, but I believe it is. That might have been yesterday, but we're down 10%. The stock price is $85. It changes really rapidly. Let's look at where Bitcoin is trading. I haven't thought about that in a long time.

Wow, below 60. Yeah. Tough times. Tough times. Bitcoin is down 40% over the last year, which seeing as strategy is a lever Bitcoin play, no surprise that strategy is down more than 80%. They now have $10.6 billion in paper losses on their recent Bitcoin purchases despite saying that they are never sell. They have started to sell some Bitcoin to cover their preferred dividend. It is estimated that around 15% of Bitcoin in circulation is forever lost.

So MicroStrategy or Strategy owns just under a million Bitcoin, which accounts for nearly 5% of all Bitcoin out there and only a small chunk of that Bitcoin actually trades hands regularly. So they are a sizable piece of the Bitcoin pie. Isn't the amount of Bitcoin that's going to get lost increase? Isn't that going to increase steadily? Well, I don't see how it could go down. So it seems like the only option is for it to get lost. Yeah. What a currency.

Beautiful. Here's a quote from a Medium post that I found informative. So it says, while Bitcoin has high daily trading volume, a massive portion of that volume consists of high-frequency trading bots and derivatives rather than raw spot market depth. If MicroStrategy attempted to liquidate even 10% of its stash, roughly 84,000 Bitcoin, worth over more than $5 billion, as that writing, it would completely overwhelm the available buy orders on order books, causing a severe price cascade. A sharp drop caused by MicroStrategy sales would trigger automatic liquidations of leveraged long positions on crypto exchanges. This creates a domino effect, forced liquidations, caused more selling, pushing the price lower, which triggers even more liquidations. Don't get me too excited. I know that sounds like a bit of a doomsday scenario.

That sounds very nice to me. If we could just take out Bitcoin and MicroStrategy and Michael Saylor at the same time. Gosh. Well, they're all tied at the hip now. it okay before we take victory laps because this has happened before it's dropped 50 percent and whenever the price of bitcoin drops sharply it seems to attract more interest so it's i think this gradual just decline over the last six months is what's partly caused it to keep going is people have just gotten bored of it capital has probably flown

elsewhere to memory chip stocks, AI companies, all that stuff, I do think there were a lot of reputable investors that capitulated on this purely for optics. They didn't want to be – For just Bitcoin in general. Yeah. Yeah, that's fair. They didn't want to be the – didn't want to receive the criticism of being anti-Bitcoin and just flipped on it and so it i don't know yeah i for one i agree with you there there's

also the people that were highlighted in that famous wall street journal piece about micro strategy those investors but those weren't reputable to begin with the the difference for me is that's what i'm saying those are who that's the micro strategy shareholders level lower yeah it's it's strange that sailor walked into a gold mine with this and and credit to him he made a whole bunch of money initially he had no reason that he needed to push the risk this far out like he could have just had a business with a ton of bitcoin and a ton of capital gains on it and he doubled down on leverage and he's gonna have and he has the preferred dividend he's gonna get liquidated if you didn't go into something rationally you just

go in you just keep going until you blow up it's like the roulette table options trading right all that stuff you you need like someone to pull back i know someone that in the bought spacex after the ipo when i'm 30 i go you should probably dump it and then they the money starts talking in your head they go no there's still time for you to get in a week later like egg on the face yeah if you're looking from an objective third-party perspective without your money at play you can go look you're acting a little crazy but when you got the money rolling you're thinking you got the dollar signs in your eyes it's very hard to act rationally i think that's what happened here we have a comment here that says, do you guys think MicroStrategy

fully collapses into bankruptcy and becomes a for-seller of Bitcoin and potentially finally collapses crypto? As Ryan mentioned, a man can dream. Right? That would be hilarious. But it's a possibility.

I don't know if it's going to happen. Maybe Bitcoin goes up even farther from here. We also have a comment that says, having a preferred dividend for a company that is levered to a non-cash producing asset is wild. That sums it up perfectly. yeah it makes absolutely no sense from a capital allocation perspective it's a dumb strategy uh no pun intended the if they you know if the price of bitcoin does

continue to go down yeah the strategy is going to have to sell and it like that quote i mentioned it's going to create even more pricing pressure which it's a serious domino effect so So yeah, my guess would be if they go bankrupt, there will be a massive crypto collapse. I don't think I'm very – I don't think I'm going out on a ledge saying that. It seems pretty likely. So – and I don't think there's probably any whole lot of Bitcoin holders that listen to this podcast regularly anyways. But it's – it still is a waste of energy. like there's no need to it doesn't produce any value to society there's nothing there

yeah it's like the excess gold mining other than facilitating crime yeah that's true there's another wall street one about uh iran doing that all right should we get a couple listener questions a lot of sub stack chat uh people put an effort for that so we would like to reciprocate answer them on the show. First one, not sure if this is in your sphere, but Pizza Hut being sold by Yum, does this mean that Domino's may have won the pizza war? Say first, yes, and they have won it for the last decade or so, and they've kind of just kept increasing their lead. Or are the Uber Eats and the DoorDashes of the world making takeout so much easier that Friday night pizza and movie is morphing into tie and binge watch? That's an interesting thesis, how Uber Eats and

DoorDash can make pizza a little bit, it'd be a headwind to any pizza chains. I kind of like it. I don't think it indicates that, like, Domino's has officially won. I think they officially won a long time ago. But I don't like restaurants in general, the GLP-1 and customer wallets. Risk with just the prices in the United States, I can't touch it. I made that mistake, an expensive one, with Portillo's. and I don't plan on making it again.

Yeah, I'm looking at the Pizza Hut numbers here. Revenue has been flat for five years. Operating income is down 2% over the last five years. I don't think this affects Domino's too much. I mean, it's still going to operate. I think it's being sort of half acquired by a private equity group, half acquired by Yum Brands China. So Yum! Brands China is absorbing the Pizza Hut China business.

I do think – I remember Jason Moser having this take like six or seven years ago and he said the food delivery providers, DoorDash, Instacart, Uber Eats, that kind of stuff is going to present competition for the pizza companies that used to be like the – he was right here in the space it is funny the way people look at doordash and they get absolutely outraged that people pay for food delivery but pizza delivery they never had an issue yeah everyone everyone does that it always makes again value investors i think that's just our circle they don't like it they don't like the splurging on anything it's got to make sense mathematically but pizza is definitely a little bit cheaper all right uh we don't have too much time, maybe the next one, which I added in because I want to talk about this campaign that The Motley Fool is doing. How bad of an idea is it to reduce reporting requirements for publicly

traded companies from every quarter to every six months? I admit, if this happens, I may just stop owning individual stocks and index. I don't know if that might be extreme to just index there because of that, because you're owning these companies. If there's like fraud risk or what have you, you're exposed to that either way. I want to talk about this campaign that David Gardner has spearheaded at The Motley Fool to basically, and I'll put a link in the live chat, and also maybe I'll put it in the show notes as well. It's essentially a whole campaign to just have as many investors as possible tell the SEC that they need to keep quarterly 10Qs. That's it because individuals like ourselves and the Motley Fool spirit is that of individual investors.

They want more information for the individual person, listeners to our show, readers of the Motley Fool, as opposed to not, and that just gives advantages to the big guys. Yeah, it does, 100 percent. If you don't have the $1,000 a month to spend on alt data or if you're one of the quads or whatever that puts a satellite up and tracks foot traffic for certain places, all of a sudden the time between reporting gives an even bigger advantage to the massive asset managers as opposed to the little guy. Obviously, we're a little biased because I like to be able to talk about earnings every quarter. But the other part that I was thinking about here is, okay, Remitly is 20% of my portfolio. Let's imagine just for fun, it was 50% of my portfolio and I owned the whole thing. Like if I owned the whole business, how much would I – Brett, you're typing and it's too loud. Oh, sorry.

Sorry. If I owned the whole business, how often would I want updates on it? So if it were 50% of my portfolio, how often would I want to know what's going on? If I owned it outright, like if it was my business, I would want an update weekly. I would want to know what's going on as often as possible. Quarterly would almost feel too long, which I think that sort of an ownership attitude is what I think is kind of the right thing to bring to stocks even though you're obviously you don't own the whole thing but having that attitude makes you act like a rational owner

in my opinion so I would hate it if I owned an entire business and I got a press release once every six months about how it's doing that would be that'd be terrible I agree yeah we have a question here what if you got more information less frequently and companies didn't have to focus on such a short time frame they're going to focus on shorter long term if they want to release press releases uh if they want like that's not stopping them right now i think for investors if you don't get information from a company for every forever long there's these narratives that can build up you can have all these things taking hold for example like oh this company is an ai loser over a three month period and then boom they just report earnings if it was over like

The less information is worse. More information, the better at a reasonable time spent for these companies. It's a tough balance. Conceptually, it makes sense to say, well, if they don't have to spend time reporting to their owners or their investors what the results were, it allows them to focus on the business more. But the UK tried this. A lot of countries in the EU have tried this. there is zero proof zero evidence that it results in more investment in the business yeah and there's not doesn't really i hate i'm sorry i hate european reporting it it bothers me it's

it's a nightmare uh the trading updates the versus the like just have a standardized quarterly report they can't even get working websites to to be honest so has it like the united states has been a pioneer for capital markets and they've they've been at the forefront of a lot of technological investment and they have not been the they have not lacked innovation because they have to file a 10q every three three months no and if that's too much go private sorry go private But this does get me worked up. But yes, please, if you're an investor, you want my information. Sign the thing.

Sign the thing. Yeah. The Motley Fool is promoting it on their homepage too. So if you can't find it in our show notes, go on there. All right. One more. Maybe we can talk. Some other notes we have.

We had, yeah, wise earnings. I guess maybe, Ryan, we can talk about that at the end too. And I had a funny bubble watch that will be very short. Here's one that I think is interesting we can talk about for a couple minutes. You might have talked about this in the past, but I'd love to hear your process on researching an industry. When you're looking at some company in a particular business model, how do you think about competitors and unit economics? Take payments where there's a million companies. How do you try to find the real strength and compare different focuses?

We've got to look at growth rates, margins. That can tell you a lot right off the bat. Like the best companies are the ones taking market share. So if you look at that, that can tell you a lot of things. Peter Lynch always said, I want market share takers that shows that they're a better business. And then you have to just look at, I think, qualitative stuff, like why does this business model succeed? For example, in Amazon, why did they dominate e-commerce is because of the vertical integration

and fast delivery with a wide selection. If you look at payments, why Legadian is the best in class execution that people have failed to replicate. You kind of got to look at it that way. Now, it takes a look at the rest of the industry, but one, adding some market share taker, adding some faster grower, they have better margins, and then qualitatively, you look at that business model, and I think it's better. Every industry I can't get that simple on, and maybe they put those in the too hard pile, but for the ones that you look at, that's where I'm trying to find some sort of angle of differentiation. Yeah. Payments specifically is kind of a tough one just because there's so many sub-industries within payments. But for me, I'd love to say I have like a standard approach for diving into a new industry. But unless I find like a really good write-up that breaks down the industry overall, I typically kind of go at it with a one-company approach, like one company at a time, get to know the business, who's their biggest competitor, get to know that business, just kind of go competitor after competitor.

My general principle or my general rule that I try to follow is at least take a look or study whatever that requires on your end, whether it's reading transcripts, reading reports, anything like that. Each – the company you're looking at is the biggest competitor because usually in a duopoly, oligopoly, you can get a pretty good sense of how the industry is growing, who the important players are, how they differentiate based on product. by just a few company-specific deep dives. Is there – I mean I can't think of other than great sub-stacks that maybe break down an industry. I can't think of any real standard way that I would go top-down. He is the absolute basics from an AI deep research report. But yeah, reading some of the company 10Ks can help and it's just over time. You can't develop any sort of knowledge on an industry.

We have a comment here from Tyler saying Prague Holdings has been on a run. Yeah, we kind of disregarded that. But a nice run there. So, yeah, shout out to those returns on that one. What about Ryan? Do you want to look at Wise live? They're supposed to get out of trading. I'm speaking of European companies with nonsense standards.

They are transitioning, I believe, to the United States, right? Let's get them out of that European stuff. Speaking of – this is one of the things I like the most about Fiscal.ai. I went to the Wise investor relations page. It takes me so long to find their latest report. It said, look at our latest trading update. It was from 2025. So – and that was right on the main screen of their investor relations page.

They reported today – I'm pulling this up on Fiscal right now. Yeah, that's – the one I just clicked on is from – yeah, a year ago. Yeah, these IR pages are horrendous. Anyway, here's – let's go through some of the headlines. Their business highlights, they increased their competitive advantage through infrastructure with two new direct connections to domestic payment systems in Brazil and Japan, helping drive down costs, increase speeds. OK, yeah, good bunch of partnerships there. 21% increase in active customers in 2026, driving a 31% increase in cross-border volume. More customers continue to use Wise for their daily financial needs.

Customers are now holding $39 billion through their accounts with Wise, and last year spent $44 billion on their Wise cards. Both those numbers are growing more than 30% year-over-year. income before taxes 660 million dollars on revenue of two and a half billion for the full year everything looks good honestly uh it seems like progress there wasn't any standout financials that i've saw or i've seen so far pe is 22 what do you think still still buying still buying every every quarter when you deposit? Holding.

Holding. Opportunity costs right now. I just think there's other stuff that I like more. But yeah, I wouldn't fault anyone for buying. I think I've said this before, but this to me is kind of up there in terms of the emerging moats. Feels like they continue to drive down cross-border fees

and they are increasing the functionality or the value they provide to customers in their app with the card and the save. I mean, you really can do, you can save money, you can spend money, you can send money. It really is a convenient app for anyone that does a lot of work across borders, whether you're traveling and you want to spend,

whether you work with anyone across borders. The stock's pretty much in a five-year drawdown, so I think there's some frustration out there, but they continue to compound and the stock's getting a little bit cheaper. Before we get out of here, I want one fun bubble watch of the week. I hope you didn't click on this so I can just read what they said. Allbirds is now Smartbirds, and its AI-focused CEO says, quote, people won't even remember the shoes. well i think they're not going to remember the shoes in 10 years because those have fallen out

of style but another weekly update on kind of some of the ai nonsense you were saying in san francisco yeah if they didn't rebrand people still wouldn't remember the shoes in 10 years it's oh my gosh that's funny stuff dude this is so it's just throwing any reputation out the window for the company and my maybe i should this should be my hate portfolio the you know the i was talking about it earlier in the show companies you hate invest in maybe this will be it it could get stocked this could work i hope not but it could the yeah let's see did they redo their ticket Where are we trading at?

I don't know. SmartBird, $4. It meaned – well, it went down before they rebranded to $2.50. Then it meaned to $15 and now we're back to $4. So not much. Not much there. Did you know shares of Remitly are up 66% this year? I'm well aware.

Nice. Yeah, it's been a good recovery this year. Yeah, I did not realize that until I checked today. I also saw a headline. This is slightly old news that Microsoft is considering spinning off Xbox. Yeah, that would be, I guess, kind of meaningless for Microsoft because it's such a big business. But I'd be curious to see the financials and what it's like as a publicly traded business. um i think it's probably much worse business than nintendo but i'd like my theory confirmed

yeah i i would guess it's probably more cyclical than people think like you kind of think the xbox ecosystem's all digital now for the most part but i bet there's still a lot of revenue tied to the hardware cycle there i probably would not have much of an interest i mean activision would get lumped in there and acquisition may activision blizzard may have been one of the worst acquisitions of all time yep it's it's got to be up there i agree but i agree all right i think we're running up on time thank you to everyone for tuning in thank you for all the comments in the chat we want to remind listeners that brett and i are not financial advisors anything we say or discuss here on chit chat stocks is not formal advice or

recommendation. We may buy, sell, or hold any of the securities discussed in this podcast. Thank you all again for tuning in. We'll see you next time.