Motley Fool Money - Out for Blood in Silicon Valley

Episode Date: March 15, 2019

Boeing’s 737 Max gets grounded. Facebook makes some changes at the top. And Ulta Beauty reports stylish earnings. Motley Fool analysts Ron Gross and Jason Moser, and 1623 Capital Portfolio Manager Jeff Fischer, discuss those stories and dig into the latest from Adobe Systems, MongoDB, Oracle, Stitch Fix, and Uber. Plus, Academy Award-winning director Alex Gibney talks Theranos and his new HBO documentary, The Inventor: Out for Blood in Silicon Valley.    Learn more about your ad choices. Visit megaphone.fm/adchoices

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The best thing they're alive. From Fool Global Headquarters, this is Motley Fool Money. It's a Motley Full Money radio show. I'm Chris Hill, joining me in studio this week, senior analyst Jason Moser and Ron Gross. And from 1623 Capital, Jeff Fisher. Good to see you, as always, gentlemen. Hey, hello. We've got the latest headlines from Wall Street.

Academy Award winning director Alex Gibney is our guest, and as always, we'll give you an inside look at the stocks on our radar. But we begin this week with Boeing. Two deadly crashes in the past six months, both of which involved Boeing's 737 Max 8, the latest model of its best-selling plane. And in the wake of the latest crash, the 737 has been grounded, basically by every country on the planet, Ron. Shares of Boeing falling 10% in the past week. Obviously, there's a human cost to this story, so our hearts go out to the families involved. This seems like a story that really has a number of pages to play out here.

For sure. I think this is a big deal. I think it's a short-term big deal, though. It's not the end of Boeing. I've seen some estimates from, for example, Ken Herbert, who's an aerospace analyst, who thinks it would be a $500 million fix to the software. Could take six to eight weeks. There could be additional hits down the road if airlines start to change. charge Boeing for downtime and for planes just sitting around. It also remains to be seen if the production schedule of Boeing will be impact. As of now, they're not changing their production schedule. They're going to keep rolling planes off the manufacturing line. But if orders start to slow or orders start to shift to other planes, it obviously could impact production. And that would have a longer-term impact. But barring that this is a problem that can be fixed, $500 million,

perhaps a bit more, and then we move on. And that could happen, Ron, of course, the order's going to Airbus. There are at risk, according to Bloomberg, about $600 billion in standing orders of the 737 max. And reportedly, it's still a rumor Lionair is looking to remove $22 billion worth of orders and just go all to Airbus. So I think there's a lot of long-term revenue risk at stake here for Boeing, and a lot of management missteps it appears to. six months ago or so after the Lionair disaster, Boeing promised to have a software update by the end of this year, or by the end of 2018, and it hasn't happened yet, for one example. Meanwhile, the stock is not cheap. It's gone from under $100 billion market value in 2016 to $216 billion today, so it's more than doubled in a couple of years, a very big resurgence in the share price,

and it trades at about 20 times earning. So it's priced. to keep performing, and this could be a real headwind against it. Well, but as you said, Jeff, there are a lot of industries that have a lot of different players in them. If you're looking for cloud computing, there are a lot of places you can go. If you're looking for airplanes, there are basically two names on the list, and it's Boeing and Airbus. I mean, Boeing shares down Airbus shares have risen in the past week. I'm wondering if the long-term effect for the stock ends up being a bigger deal for Boeing than it is for the actual underlying business. I'm going to have to see how that plays out.

There's too many unknowns here. Interestingly, though, commercial aviation is 60% of Boeing's business. So they do have 40% that come from government contracts and other things. Interestingly, recently, the Air Force has come out and said, you better get your act together because we're seeing some problems with that program. So that doesn't bode well when it rains it pours. But we'll have to see how the stock plays out. It's really about, as Jeff and you just said, what happens with the competition, what happens with the production schedule, does it really lead to a loss of revenue or not? And surprisingly, the shares are above the price they traded at in January still, even now.

So clearly Wall Street still believes in the story. You can add leadership drain to the list of challenges facing Mark Zuckerberg these days. The chief product officer at Facebook is leaving the company. Also leaving is Chris Daniels, the vice president of WhatsApp. And, Jason, this is not a great look at a time when increasingly the questions around Facebook have to do with messaging products and platforms. Yeah, if I were an investor in Facebook, and I'm not, I mean, this actually would have me a little concern because really it looks like these resignations are based on Mark Zuckerberg.

a decision to pivot towards this private messaging platform that he ultimately wants Facebook and WhatsApp and Instagram to become. So, essentially, much like Amazon is an investment in Jeff Bezos. Facebook is an investment in Mark Zuckerberg. You're buying into him and his vision. And I think it's just shaping up to be a very uncertain time. I think we expressed some skepticism last week regarding this pivot. It has to be something done very.

thoughtfully, slowly. I'm still not convinced they can pull it off. I mean, just not for nothing, but I mean, I sent out a poll last week asking just folks on Twitter. You know, if you had the opportunity to move your payments behavior over to a Facebook platform, would you? And more than 3,000 votes. And 95% of them said no. And I think if I added hell no as an option, that probably would have been the one that won based on the comments I received. Now, that is all to say, it doesn't mean they can't make that pivot. But what it does. mean is they have a real brand problem right now. They've lost a lot of trust, and they're going to have to get a lot of that trust back before they can make this move to this next

level that Zuckerberg wants to make. So I mean, these resignations definitely do not help the cause. Jason's right. And to me, what this says big picture-wise is that social media business models have to evolve more quickly than I think many of us probably assumed. Your customer, your users' interests dissipate if you don't keep them engaged. in new ways. So the news feed that we've all used for years or that Facebook users have used for years is becoming less engaging, and they have to change the whole model, basically. So what that tells me is Facebook should, it's not as stable as an alphabet or a Google, for example, or let alone Amazon. They're going to have to work all the time to keep people engaged.

Yeah, I'm really glad you brought up the Google example, because we talk about that a lot. I am an investor in Google, and I think one of the main reasons is, you know, Google doesn't have to make the user experience worse in order to make money. Essentially, search is a far more resilient function than social. And I think that's where Facebook's problems really are going to live for the coming years is they have to figure out a way to move beyond this social dynamic of the business. It's still an ad business at the end of the day. It's just not going to be easy to do. Oracle's third quarter revenue fell 1%. That may not sound like a lot, but it is the second straight quarter of declining revenue for the software giant. You tell me, Jeff, how nervous

should investors be? I like it, Chris. I like your leading, because I think it's the story that Oracle has fought against for many years, revenue flat or declining. And yet, the stock has done well. The stock, generally speaking, it's up 100% the last seven years, 275% the last 10 years, beating the market by 35 points. The headlines are that they're struggling to grow in the cloud, but beneath the service, they did grow their cloud revenue by double-digit, That's all they shared. So more than 10%. Robust double digits, they said.

So maybe that means 15%. In all regions, their cloud is growing, and it's now nearly 70% of revenue. Software as a whole grew 3% grew revenue 3% in constant currency. So I think although Gorgle is not growing strongly, it's stable and showing resilience and it's inexpensive

compared to the market itself, Meanwhile, they bought back 16% of shares in the last year, so EPS is growing nicely and should grow 15% to 19% this year. Double digits is a wide range. Unlike you, I don't think 15% growth is robust double digits. 85%. That's double digits and that's robust. Another strong report from Alta Beauty. Fourth quarter profits came in higher than expected.

And Ron, same store sales, nearly 10%. This is one I never would have imagined. They could continue to put up this growth for this long. I quite frankly called it quite wrong. It's very impressive 9% cost of growth based on 7.1% transaction growth, 2.3% growth in the average ticket. Their e-commerce comparable sales were up 25%. The company is really doing a great job. Net sales, if you adjust for the fact that there were 53 weeks last year, do a little adjusting there.

Net sales were up 16%. margins were up. There were some accounting changes in there, but they were also up because of operating leverage. And you've got a great increase in earnings per share of 31% if you exclude the benefits from the tax reform related items in fiscal 2017. Mary Dillon has been CEO for about five and a half years, and Alta Beauty shares have more than tripled under her leadership. It's fantastic. And they're doing a great job actually buying back stock, which we don't see all the time. During fiscal 2018, they bought back $600 million of stock at $250 a share. Stock now stands at $3.40. Coming up, a document database business isn't sexy.

You know what is? A document database stock hitting an all-time high. Details next. You're listening to Motley Full Money. Welcome back to Motley Full Money. Chris Hill here in studio with Jason Moser, Jeff Fisher, and Ron Gross. Shares of MongoDB up more than 30% this week after the company lost money in the fourth quarter. So, Jason, as long as that top line revenue continues to skyrocket, who cares if they're not profitable?

Yeah, well, we'll get to that in a second. I think the ongoing concern with this business has always been Amazon. Competing in a world with Amazon, the behemoth and cloud and database management, there's just no way they could do it. But I tell you, Mongo like data, and they seem to be doing it just fine. They've built a good offering in a post-SQL world where data is just far more rich than the legacy systems were built to run. around. And I mean, listen, double-digit, robust. Growth, 71 percent, Chris. How about that? That's robust. That's robust. I mean, listen, these guys have a very attractive subscription model. That makes most of their

money. And it reminds me a little bit of L.E. May in that regard. But the total number of downloads now over 60 million, they have 1.2 million developers in their MongoDB University, which is for training and certification. Now, to your point there, all of this said, I think there are a lot of risks involved with this stock at this level, because we talk about prices that are not based on any fundamentals. And this is a price that is not based on any fundamentals really at all. It's not profitable. It's not cash flow positive.

And it's going to be a while until they get there. With that said, I mean, when you have that robust top line growth, the stock is just going to keep on doing what it's doing because the market assumes at some point or another they are going to be profitable. And they're right. It will eventually be profitable. It's a matter of when. I do think there is a bright future here.

I just think you have to understand the risks that come along with a stock priced at these levels today. Yeah, Jason, the estimate is for a non-gap profit in 2022 of 9 cents per share, but with a gap loss of 250 per share. I talked about this. I talk about this all the time. It seems like we live in this non-gap world now, where you can just adjust for anything, and the market seems to accept it. I mean, I guess that's fine, but at some point or another, another shoe's going to fall. And that non-gap perspective, I think, is just not going to hold the same value that it does today. But, I mean, the stock itself, it's trading it 26 times sales.

And, I mean, that's just an unbelievably sky-high valuation. It has to be a rule breaker that just keeps on winning big to justify that. It is a good business. There's no question about it. Sometimes feels like 1999 all over again. So when you start hearing investors and analysts, making too many adjustments, be careful. Wouldn't it be nice if we could apply the non-GAP principles to handsomeness? It's like, you know, in GAAP, handsomeness, I'm me.

But non-GAP, I'm Brad Pitt. First quarter results for Adobe Systems look good, but shares of the software company falling this week after management's guidance was not what Wall Street was hoping for. Jeff, this really seems like short-term thinking. Non-gap guidance. Yeah, it was short-term thinking, Chris, especially because their full-year guidance is right on track, and it's just the next quarter where they're off by about 11 cents per share on guidance, but right near the mark on revenue. Adobe, as we know, is a great cloud story

the past several years. Growing robustly, 25 percent, is that robust? Revenue growth year over year to 2.6 billion. It'll top 11 billion in revenue this year. And the stock, it kind of reflects that growth rate. It trades about 33 times expected earnings this year. But overall, Chris, numbers look great. Adobe is making, creating and managing your digital media world better. Shares of Stitch Fix up more than 20% this week after second quarter results came in better than expected. You tell me, Ron, how good was this quarter? I don't know.

This is a company I'm not sure I get. It's really, first of all, the stock really volatile. One public at 15 back in October 2017 rose to a high of 49 in September of 2018. now we're back at 30. The stock has been shredded due to concerns over user growth, and that's really what this story is about. So now we see the stock getting nice pop because active clients grew 18% in the quarter, ending the quarter with 2.96 million active customers. Better than expected. Investors like to see that. Stock goes up. But it was the slowest pace of growth for that metric since the company went public. So, still need to be careful. Revenue up 25%. The stock, the company is profitable. It's not one of those high flyers. It isn't profitable, but $12 million was the profit for the quarter. So, you know, you see the earnings triple, but from a very, very low base. So I've heard this company referred to before as a data company at the end of the day. I mean, it sounds a little odd because they're selling you clothes, but do you buy that? Is this a data company? Can they really do that much with that data that they have?

Supposedly, the thesis hinges on the algorithm that they're using behind the scenes to pick, recommend clothing to its users. I'll buy that, but it's really all about giving the users what they want in the end and being a great value for those customers. Otherwise, you'll just see that active user base just continue to trail off. I feel like we're in a situation now. You've got disruptors like Stitch Fix. You've got Amazon Wardrobe, which is starting to spend money on television advertising.

So clearly they're making a push. Earlier this week, we had tailored brands, which is the parent company of Justfay Bank and Men's Warehouse. That stock just got crushed and rightfully so. It feels like we're in an environment now where there's going to be some consolidation in the apparel space. Because the overall model of, oh, I don't have to go to a store, you can just sense it feels like that can work.

On the flip sign, it also feels like, Joseph A Bank, it's not worth nothing. Like, there is some brand equity there. I'm just not sure, but apparel seems like it's going to be an interesting space to watch. Very competitive environment. That's why actually Stitch Fix just warned that marketing spend would go up. Profitability would be impacted as a result. They're also spending money to move into the UK to maybe buy some expansion there if the US perhaps slows in terms of growth.

So you're right on the money there, very competitive. Yeah, it's tough to know who will win long term. You have competitive risk, you have fashion risk, you have pricing risk. It's a tough place to invest. Old Navy. Old Navy, the one. Reports this week that Uber is planning its IPO for April and that the company will be seeking a valuation of $120 billion. For context, guys, that would make Uber larger than Costco, Amgen, Invidia, and 3M, just to name a few. Who's in on opening a few? Who's in on opening a day. So I feel like the low-hanging fruit maybe is already been picked and we're not really going to get a chance at it. I guess maybe I'm just going to stick with my exposure to grab, which is

covering the southeastern Asia market by virtue of investment on booking.com's part. So I'll stick with that. I'll leave Uber to the smarter people. Ron? The companies you mentioned, for the most part, are largely profitable cash-flowing companies. Correct me if I'm wrong, but I don't think Uber is even profitable at this point. No, it's losing billions. A few billion dollars of losses on $11 billion in revenue. I mean, as far as a product, I'm a user as much as much as the next guy and love it, but that is very rich. I think if I had to choose one, Uber or Lyft, and Lyft is probably seeking a valuation of $20 to $25 billion, so one-fifth of Uber, I'd go with the smaller one. Now, I'm saying that without seeing the financials, et cetera,

but they're both similar business. If I had to choose. I want to show you those lists. Similar businesses. I think Lyft is actually better run and has a long runway. They both do if they succeed. So I'd go with the smaller one. Let's go to our man behind a glass, Steve Broido. Steve, you're an active investor. Any interest in either Lyft or Uber as IPOs? I don't think so. I do like the product. I think as an end user, it's great. But I just think the risk, something bad's going to happen. I mean, accidents, something, it just doesn't seem good.

All right, Ron Gross, Jeff Fisher, Jason Moser. Guys, thanks for being here. Thanks, Chris. Up next, a conversation with Academy Award-winning director Alex Gibney about his latest documentary. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Full Money. I'm Chris Hill. When she wasn't being compared to Thomas Edison, Elizabeth Holmes was being hailed as the next Steve Jobs. After dropping out of Stanford at the age of 19, Holmes started Theranos, a company touting a breakthrough blood testing technology. And maybe it was no surprise that the device that Theranos was building was coming.

called the Edison. At its peak, the company was valued at $9 billion, aided by a board of directors featuring such well-known political leaders as Henry Kissinger and George Schultz. In March of 2018, Elizabeth Holmes was charged with fraud by the SEC, and the company's value dropped to zero. The rise and fall of Theranos is the subject of Alex Gibney's new HBO documentary, The Inventor, Out for Blood in Silicon Valley. I caught up with Gibney, earlier this week. Maybe I should start here, because you're at a point in your career where I'm assuming you have a lot of options in terms of what you want to pursue. So I'm curious to know what intrigued you about Theranos and Elizabeth Holmes to the point where you said

that's going to be the next movie I direct. It was the psychology of deception and fraud. I mean, I've been interested in that for a long time. time. And also, in a way, an extension of, you know, something I did in Scientology, which is the prison of belief. So it's kind of getting into the psychological component of how a fraud like this can happen. That's what really interested me. Both from the fraudster side and the investor side. And the journalist side, I should add. I definitely want to get to the investing side and the journalism side. But let's stick with the belief side, because one of the people you interviewed in the documentary is Dan.

Ariely behavioral economist. And one of the things he talks about is how story is more important than data. Story has emotion. Data does not. And the power of a good story really seems like a thread through this entire documentary. It's really behind a lot of what went on here, isn't it? I agree. I think in a way, the film is all about storytelling. And how much we like a good story. and how powerful good storytellers can be. I mean, I think in that sense, Elizabeth was in the tradition of good storytellers, like Edison, you know, who constructed a narrative around himself as the main character. And Steve Jobs, who did something very similar,

but also was able to weave magnificent presentations and dramatic stories about products. And Elizabeth was really good at that, too. She didn't have a product. It was a, that was a problem. Well, and she has a good story about herself and her reasons for starting Theranos. But I have to say the device itself was a good story. I mean, about a third of the way into your movie, I found myself rooting for the device to work. And I know how this whole thing's going to end.

But as a consumer of health care and just as a human being, you know, it's like one of the employees says in the movie, you want it to be true so badly. That's right. Tyler Schultz says that. And that, I think, is the key to how something like this works. You want it to be true so badly so that you invest all of this hope in something that clearly isn't working. And there's a kind of willful denial, both on the part of Elizabeth and part, to some extent, of people who work for until, you know, the divide between reality and fiction just became too great. But I think for Elizabeth over time, you know, she on the one hand knew how badly the machine was operating.

And yet at the moments when she needed to pitch the dream, she pretended or deceived herself into believing that it was just weeks away from being perfected. And a key example of that would be when they're all dancing to, you can't touch this. You know, after they achieve a kind of pitiful milestone. It was as if they had discovered penicillin or something like that. As I was watching this, I was reminded of the smartest guys in the room, the documentary you did about Enron, particularly how the companies deal with scrutiny from business media. Because, you know, Canoletta from the New Yorker, Roger Parloff from Fortune magazine, these are smart, experienced, award-winning journalists. And when they start pressing her for details and data, she stonewalls them. and by the time the Wall Street Journal starts asking tough question,

they bring in the lawyers. And the intimidation tactics used by Sarenos reminded me of what Enron was doing back when they were pulling off their fraud. Very similar. I mean, Enron would go after analysts. I mean, literally go after analysts and force firms to fire them. And then they clamp down hard on journalists too. sometimes with a stick and sometimes with a carrot.

They did a magnificent job of bluffing people. Sort of like if you're not smart enough to understand what we're doing here, then I can't be bothered to tell you. But interestingly about Enron, and I think ultimately what happened in that meeting with the Wall Street Journal, Enron was brought down by journalist Bethany McLean asking a very simple question. How does Enron make its money? And the Wall Street Journal, I mean, John Carrier, in a way, asked the same question. Like, how does the machine work?

And, you know, they kept hiding behind trade secrets when, in fact, there was another secret that was really at work here. Well, and speaking of Carriero, that was one of the surprising parts of the documentary. from me. Again, even though I know the story, you know, even if Elizabeth Holmes didn't start this whole thing to defraud people right from the start, you know, part of what makes it easy to believe in the promise of this blood testing technology is the idea that you'd be crazy to lie about something involving human lives like this. And what surprised me was as things begin to unravel for Theranos, she digs in and becomes even more committed to the point. where Carrie Rue says, looking back, I underestimated her willingness to lie in public.

Yes. And that, I think, testifies to a kind of psychological dimension of the story, which is what interested me to begin with. Because you'll recall when Bernie Madoff got caught, he basically threw up his hands and said, you got me. But I think Elizabeth had such an investment in the dream that even though she knew how badly things were working, she relentlessly relied on either outright lying or the weirdest kind of stretching of the truth that she could boldly proclaim. Because it was a refutation of what John was accusing her of. Because I think that they thought long and hard, and Enron did this too. You know, they would come up with phrases. There were tortured phrases that if you really parse them, you could say we're maybe close

to being accurate, you know, when she's dissembling about whether or not they were using proprietary technology. I mean, I think they thought that the proprietary technology was hacking into the Siemens machines so that they could, you know, handle small samples. That's like, you know, taking apart a car and putting a new rubber band on the flywheel or something. I mean, it's just crazy. Startup companies in Silicon Valley often take aim at industries that are ripe for disruption. I don't think that's going to change anytime soon, but I'm curious if you think that this entire episode with Theranos and Elizabeth Holmes, has in any way given pause to how investors and VCs invest?

Do you think it's going to make them be a little bit more cautious? Or is there just too much money involved at this point? Well, I guess it depends at which point. I mean, there's an awful, as you say, there's an awful lot of money in Silicon Valley. So what's a million here or a million there. You know, if you're betting on a 50-to-one shot, you know, that million dollars, you've bet on 10 of those, and one of them comes in, your bet is more than covered. But later on, you know, when the money gets serious, like Rupert Vernock invested $125 million, you'd hope that investors would kick the tires, or you'd hope that companies like Walgreens would demand to look inside the box. But they didn't. Which, teach you.

you something kind of scary about human nature. And I think they won't get it right until we understand how flawed we all are and how susceptible we are, as you say, to Dan Ariely's notion that, you know, stories prey on emotions. You've done a lot of investigating in the area of fraud. I mean, when I look through your IMDB page, it shows up both in your work as a director and as a producer. I'm curious if you have now gotten to the point where you've seen certain traits or commonalities among individuals that people can use to pinpoint as early warning signs. Like, is there something going on in the world of business right now that you see and you think, you know what, it really wouldn't shock me if that company or that person was committing fraud on some level?

It's usually the kind of messianic, almost religious sermonizing that takes place from CEOs. Whenever I see that, I think, you know, maybe, or maybe, you know, they're covering up for something really big. That they, the more you see somebody who promises outlandish things, the more you suspect that underneath that might be a fraud. Just the way you see with politicians, for example, in a darker realm, you know, politicians who rail against homosexuality. or ministers who rail against homosexuality, you know, in extreme ways are likely to be the ones who are caught in a bathroom stall with somebody of their own sex, right? So it's an extreme version of part of our psychological makeup. Did anything surprise you when you were making this documentary? What surprised me really was how effective she was, how many people.

people fell for it. And how often, when it came to a tipping point, all Elizabeth had to do was to talk to them, and people would be convinced. Tyler Schultz himself talks about it. Like he knew how bad things were in the lab, what he called the tiled world. And then he would go up to the carpeted world and have a conversation with Elizabeth, and she would just convince him. And she had convinced his grandfather to basically doubt his own grandson. So you realize the power of storytelling, how effective it can be despite all the evidence. How do you think they were able to get Walgreens as a customer? I mean, there are various points in this story where if you didn't know anything about it,

you might think to yourself, okay, well, now she's going to be discovered. And I think one of those points is when an established business like Walgreens comes to the table. Well, I think that Walgreens, you know, panicked and panicked in this sense. They desperately wanted to be part of some new tech, right? That they felt they were an old-fashioned company and they needed some glitter, and they were going to be left behind if their competitors were embracing some kind of new tech, and they weren't. And so Theranos comes along, and that seems to fit the bill for something exciting, some dazzling new 21st century solution to old problems, that they can tout as being very hip and modern. So I think they were susceptible to that pitch.

But then you realize that the top executives of the company were conned by Elizabeth in the most fundamental way. I mean, they had an investigator who's just dying to rip apart the Theranos-Edison machine and look inside it and to see what was going on. But Elizabeth convinced the executives not to let him. How does that work, right? So you're right. But I think also Elizabeth was very clever about gathering around her step by step people who would testify to her establishment credentials, you know, that, and, and you realize you

rely on others. And by the way, this happens in journalism all the time, you know, you rely on past clips as if those clips are all true. And they may be or they may not be. Well, you know, George Schultz, you know, Henry Kissinger probably relied on George Schultz. And then Jim Mattis probably relied on George Schultz and Henry Kissinger. And then you have the snowball. And investors, oh, Larry Ellison put some money in. And, you know, once Fortune, and I think that's why Roger Parloff felt so bad, once Fortune put Elizabeth on their cover, it was like, well, fortune did it? It's good to go.

This is fantastic. It's got to be real. Not to give away the ending of your movie, but Elizabeth Holmes has been indicted on multiple counts of wire fraud. There's no trial date set at the moment, but when this trial eventually happens, she's going to be facing up to 20 years in jail. She is a young woman. Do you think Elizabeth Holmes has a second act? A line about from Fitzgerald, there are no second acts in American life, is maybe the stupidest thing he ever said. So I think she probably does.

have a second act. But how that second act manifests itself will see. She still has defenders, people who feel that she's the maligned entrepreneur. Tim Draper famously came out for her the other day and said the criticism of Elizabeth is akin to, you know, an assault on humanity or something like that. You could look it up. So yeah, I do. I think she does have a second act, but it remains to be seen whether that second act will be before or after prison. HBO's new documentary, The Inventor, out for blood in Silicon Valley, premieres on Monday, March 18th. Up next, we've got a few stocks on our radar, so stay right here.

You're listening to Motley Fool Money. As always, people on the program may have interest in the stocks they talk about on the Motley Fool may have formal recommendations for or against, so don't buy yourself stocks based solely on what you hear. Welcome back to Motley Full Money, Chris Hill here in studio once again with Jason Moser, Jeff Fisher, and Ron Gross. Time to get to the stocks on our radar this week and our man behind the glass. Steve Brito. He's going to hit you with a question. You're a first, Ron. What are you looking at? I'm looking at Rollins, ROL, Pest and Termite Control Company, really steady performer. Delivered

51 straight quarters of increased revenue and earnings. Largely a recession-proof business. More than 80% of sales are recurring. Now, there are an acquirer, a serial acquire of companies. They acquired 38 companies in 2018. But they've got a rock. Rock solid balance sheet with no debt, constantly increase their dividends. 17th straight year that Rollins has raised its dividend by at least 12%. Yield is only up, yield is only 1%, but the stock is up over 200% over the last five years. Steve, question about Rollins? Who's the money pest?

Is it termites? Are we going after? I think termites are a nice recurring revenue stream because you do not want your house infested by termites. Jason Mozer, what are you looking at? Yeah, taking a look at LivePerson, ticker LPSN. This is a company seems like it's kind of getting its second wind here. Business is focused on building out its AI power platform to enable what they like to call conversational commerce, essentially brands partner with LivePerson to then reach out to their customers via places like their own websites, WhatsApp, SMS, text, and whatnot.

And as a little extra here on Monday's industry focus, we've got another fun between two fools interview with founder and CEO of the company Rob LoC, Cassio. We talked about what the future holds for the company and a lot more. So, tune in on Monday. Steve, question about live person. Are there any universal findings? This company is finding from their engagements with customers? It's interesting in the interview I had with Rob. I mean, it seems that we've really hit this peak with social media, and he's calling a lot of those folks out. They've kind of got to get their ducks in a row working on things like privacy and the influence that they have over the world. Jeff Fisher. Z. Z. Scalar. Do you all know that company?

Never heard of it. All right, good. ZS. I've heard of it. I've never heard of it. ZS is the ticker. 8.5 billion dollar companies selling security as in the cloud. You know, right now companies have a stack of security security for internal software,

for accessing the internet, et cetera. This blankets your whole enterprise with security that you can get through the cloud from them. The stock came public one year ago, almost to the day, and it has doubled since. then. Steve? Can companies like this afford any failures? It seems like if you're a security company, just one mess up, and you're done. You know, I would think that, but companies, they bounce back from it if they handle it right, Steve. Three very different businesses. Steve, you got one you want to add to your watch list? I hate termites, but I love Rollins Pass. All right, Ryan Gross, Jeff Fisher, Jason Moser, guys. Thanks for being a big. Thanks, Chris.

That's going to do it for this week's edition of Motley Fool Money. The show is mixed by Dan Boyd. Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.