Prof G Markets - Zohran Mamdani Wins — Why NYC’s Mayor Race Was a Referendum on Inequality

Episode Date: November 5, 2025

Ed Elson is joined by Harley Finkelstein, President of Shopify, to break down the company’s third quarter earnings. Then, Jessica Tarlov, host of the Raging Moderates podcast, joins the show to discuss the economic toll of the longest government shutdown in history. Finally, Ed unpacks what NYC’s mayoral election says about where the city, and country, is headed. Listen to Raging Moderates Check out our latest Prof G Markets newsletter Order "The Algebra of Wealth" out now Subscribe to No Mercy / No Malice Follow Prof G Markets on Instagram Follow Ed on Instagram and X Follow Scott on Instagram Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Support for this show comes from the audible original, the downloaded two ghosts in the machine. Quantum computers, the next great frontier of technology, offering endless possibilities that stretch the human mind. But for Roscoe Cudulian and the Phoenix colony, quantum computing uploads the human. in mind, with life-altering consequences. Audible's hit sci-fi thriller The Downloaded returns with Oscar winner Brendan Frazier,

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Rosco Cudulian and the rest of the Phoenix colony have to re-upload their minds into the quantum computer, but a new threat has arisen that could destroy their stored consciousness forever. Listen to Oscar winner Brendan Fraser reprised his role as Rosco Cudulian in this follow-up to the Audible Original Blockbuster with the Downloaded. It's a thought-provoking sci-fi journey where identity, memory, and morality collide. Robert J. Sawyer does it again with this much-anticipated sequel that leaves you asking, What are you willing to lose to save the ones you love? The Downloaded 2. Ghosts in the Machine.

Available now, only from Audible. Today's number 1,000. That's how many times a hummingbird's heart beats per minute. Only two animals have a faster recorded heart rate. They are the Etruscan Shrew and also Bill Ackman right now. Money markets met. If money is evil, then that building is hell. The show goes up!

Welcome to Property Markets. I'm Ed Elson. It is November 5th. Let's check in on yesterday's market vitals. The major indices declined as AI valuation concerns dragged down tech stocks. Palantier sank 8% after Michael Burry disclosed a $900 million bet against the company. Meanwhile, Bitcoin slid 6% dropping below $100,000 for the first time since June. The dollar hit, it's a $900 million. It's highest level since May. And finally, Tesla fell 5% on news that one of its largest investors voted no to Elon Musk's $1 trillion pay package. Results of the vote will come tomorrow at the company's annual shareholder meeting. Okay, what else is happening? Shopify posted a strong quarter of growth yesterday, but rising costs weighed on investor sentiment. Revenue rose 32% year

over year. Beating estimates, however, net income fell 68% as operating expenses increased significantly. Shares closed down, 7% on the results. Just a reminder, what is Shopify? This is your one-stop shop platform for e-commerce. It helps you set up your website and your payments and your shipping, et cetera. So if you are a small to medium-sized retail business, chances are you're using Shopify, but they are also now expanding to larger companies, too. Companies like Mattel and Luxottica and Estee Lauder, lots of large retailers. So Shopify is a juggernaut at this point, a juggernaut in e-commerce, more than $200 billion in market cap. And I am very pleased to say that we are breaking down these Q3 earnings with the president of Shopify, Harley Finkelstein.

Harley, great to have you on Profite Markets. Great to be here, Ed. Big fan of the show and big fan of ears. So thanks for having me. Wow. Thank you very much. That is very kind coming from you. We want to talk through the earnings here some pretty incredible numbers revenue up 32 percent gross merchandise volume also up 32 percent 92 billion dollars let's just start with like your headline takeaways on this most recent quarter for Shopify yeah um you know i've been uh i've been doing these earnings calls for over 10 years now since the IPO i think this is an earnings call number 42 maybe 43 at this point um the GMV obviously you know 92 billion dollars

is super important because it's a proxy for how well merchants are doing on Shopify. That's up 32%. What I don't think was well understood was that that is our ninth consecutive quarter of GMV above 20%. So that I was really excited about. On the revenue side, $2.8 billion, up 32% as well. That's our 10th consecutive quarter of 25% or greater top line growth. And free cash flow was 18% of revenue or about $507 million. So that's 12 consecutive quarters of positive free cash flow and nine consecutive quarters of double-digit-free cash flow margin. Why does this matter? One of the things that we've been trying to articulate, and I hope I've done a good job

of this, is this idea of like durable, consistent growth. And Shopify will do what we say we're going to do. I talked about, you know, in our last call that we're going to be doing something in agenda commerce. Obviously, I was able to announce a couple weeks ago that we're doing this incredible work with Open AI, but also with perplexity. So ultimately, while the numbers themselves, I think, are incredibly impressive and we're balancing kind of top line and bottom line. What matters to me is Shopify is a well-trusted, publicly traded company.

And I think the way you do that is just to do what you say you're going to do. From my understanding, Shopify is investing pretty significantly into AI, R&D spend up this quarter. You recently announced this integration with Open AI. Like, what does AI have to do with Shopify? How does it help the business? where does it fit in? Yeah. I was just there's two buckets.

The first is, well, maybe three buckets. The first bucket is how will you Shopify were flexively inside the company. And obviously, you know, there's now, I think, a leaked email out there somewhere that Toby wrote to the entire company talking about that. Shopify has to be a reflex,

has to be AI reflexive meeting. We, every person that works here thinks about how they can use it to make their job better. And in fact, you know, before you asked to hire someone a new person, you have to first substantiate why AI cannot help you do it. That is embedded in the culture of the company. And so, you know, a good example is our support organization, our frontline support organization,

where now they're able to have much more of these high-quality conversations like helping merchants grow their business and less than low-quality conversations like, you know, password reset or domain or C-name configurations. So that is important. The second bucket is probably how merchants, we give these tools to merchants, and that's really where sidekick plays a role. This idea that, you know, I mentioned on the call, but, you know, so far since we launched in 750,000 of our merchants are using Sidekick to effectively as a core part of running their business, whether it's writing reports or analytics, or figuring out which, you know, which products are selling better, where to launch campaigns, things like product photography

or product descriptions or merchandising, this idea of giving merchants these like superpowers through Sidekick, which knows everything about your business and knows everything about Shopify. And maybe the third bucket is really on this agentic side that we believe there may be a new surface area that will be an important surface area beyond just the online service and offline surface and social services whereby merchants can actually find new customers. And so our objective and our model there is really to make sure that we're not only like, we want to be the launch partners there, we want to build the best permutations of what could be. We don't know exactly what agentic's going to look like, but whatever the permutation might be, shop, and our merchants are deeply embedded to it. And, you know, Gentic obviously is getting a lot of attention now. The Open AI announcement did.

But we're also working with Microsoft Co-Pilot, who's already adopted our checkout kit. We're working with perplexity. And so, again, if we do see a shift in consumer behavior whereby more searches and more discovery happens on using an agent in chat, we've now built a set of tools with checkout kit, with Shopify catalog. So we can deliver these things kind of on a silver platter to this agentic application. and they can ingest it and now our merchants have

a brand new place to engage with the consumers. Yeah, I have a couple of slightly less Shopify focused questions. One is, you know, I mentioned $92 billion in gross merchandise volume. You are the president

of one of the largest e-commerce companies in the world. The way I see it, you kind of have like a front row seat to the consumer, or at least how the consumer is doing. Based on what you see in the data, you see at Shopify,

how is the consumer doing right now? You know, we've seen inflation rising, obviously the tariffs. Is that having any effect on consumer behavior right now? Well, look, for us at least, consumer confidence is measured at the checkout. That's what we see. Yeah. On Shopify, what I can tell you is shoppers, they keep buying, they keep returning. Demand has remained resilient across pretty much every channel and every category.

So I can only comment what we see at Shopify, but if you look at Shopify, But if you look at GMV, look at revenue growth, consumers, maybe this is worth mentioning. Consumers are certainly being more selective. They are buying from brands they love. We are very fortunate that the brands and merchants love happen to be on Shopify. And we've baked that into our, you know, our Q4 outlook and it suggests that. But if you look at the Q3 numbers, you know, it was another quarter of consistent GMV growth by our merchant, 32%. And that was up, I think, from we, that was, and it was 31%.

in Q2. So it's nine consecutive quarters of GMV growth above 20%. I think it highlights the resilience of our merchants. I think it actually shows that there is a segment of consumers that are still buying. They're just buying from brands they love and they're being more selective about that. Yeah. And then I have a question about investor relations. Sure. I've been saying for a while that, you know, traditional investor relations is kind of boring. It's outdated. The days of CNBC and and webinars is coming to an end. Now is the time to lean into new media, et cetera. And I often cite you as an example of someone who is doing it right,

someone who's, you know, getting on social media, leaning into short form, going on podcasts. You've been doing it for a while. Indeed, you are now on a relatively young podcast for the first time. I just love to get your views on investor relations in 2025. What is your approach? What is your philosophy? and how should other public company leaders think about it moving forward?

I can't tell any other public company what to do. I can tell you the way that we look at it, the way that I look at it is this is a storytelling opportunity. Yeah. It is the quarterly earnings are just, it is a bookmark every three months, and it allows us to go out and talk to, obviously, investors, but also talk to our merchants, talk to our partners, talk to the media, talk to the general public about how Shopify is doing. it's a check-in and I think the traditional way of doing it which is you do your earnings call

in some cases you don't even take Q&A which I think is ridiculous we spend about half the earnings call talking about the quarter then opening up for Q&A and then kind of doing the media tour I mean look the reason I'm on your show now

is because I believe that there are more people than simply just the investors of Shopify who are interested in learning how we are doing if you are building if you are Stefan you're the CEO of Esté Lauder and you have carriage

and the response of a 40 or 50 billion dollar company and you've just selected Shopify, I think you care a lot about Shopify's performance, not just on one quarter, but quarter after quarter. If you're a Shopify partner, if you're a great company like a Clavio, for example, or another company like a firm, for example, which is deeply embedded in Shopify, I think you're very interested in how Shopify is performing quarter after quarter. If you're simply just someone who is in tech, and I think you've done a great job, the guys from TVPN have done a great job of this, we effectively are consumerizing some extent, this, the traditional IR function. I mean, the companies that get it, you notice it.

You notice that the way they are speaking is simply different. And I think, you know, this is not necessarily across the board, but I think the companies that do it better typically are founder-led companies. The founder-led companies call it founder-led energy, whatever you want to call it, founder-mode. The founder-led companies tend to be better at that because they're just, like, they just care more. There's a, I don't know if I can say this on the show, but there's There's a give a shit factor that I think is above those where you have a professionally managed company where the executive team are a bunch of, you know, suits and they're hired to do a job. But like Shopify is a mission driven company. Shopify may be, you know, a $200 billion market cap company

or the entrepreneurship company. We care deeply about entrepreneurship. We care deeply about, you know, retail and commerce and where it's going. And I think the earnings call is an opportunity for that. And also from recruiting perspective, the people that want to come to. come to Shopify, if you were looking to come work at Shopify or any company, it behooves you to listen to the earnings call to know what is exciting about this company. What are they talking about? So I think you were early also in sort of the analysis that this industry is changing and not everyone is keeping up.

But the ones that do, there is alpha opportunity in that. 100%. Thank you very much. Holly Finkelstein, president of Shopify. I really appreciate your time, Holly. Thanks, Ed. After the break, the economic impact of the longest government shutdown in history. If you're enjoying the show, give Profitue markets a follow.

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Ghosts in the machine. The Earth only has a few days left. Rosco Cudulian and the rest of the Phoenix colony have to re-upload their minds into the quantum computer, but a new threat has arisen that could destroy their stored consciousness forever. Listen to Oscar winner Brendan Fraser reprise his role as Rosco Cudulian in this follow-up to the audible original blockbuster, The Downloaded. It's a thought-provoking sci-fi journey where identity, memory, and morality,

Robert J. Sawyer does it again with this much-anticipated sequel that leaves you asking, what are you willing to lose to save the ones you love? The downloaded two, Ghosts in the Machine, available now only from Audible. We're back with Profty Markets. It's official. We are experiencing the long, government shutdown in U.S. history. Today marks the 36th day of the shutdown, passing the 35-day record that was set in 2018. So far, one in every eight Americans has gone without food assistance, 1.4 million federal workers have missed paychecks, and key economic data has gone dark. The Congressional Budget Office estimates that at least $7 billion in economic output has been

permanently lost, and if the shutdown lasts another week, that loss may reach $11 billion. So, here to help us unpack this shutdown, what it means, how it is affecting our economy. We are speaking with Prof G Media's very own Jessica Tolloff, host of the Raging Moderates podcast, Jesse. Great to have you on. Yeah, it's fabulous to be here. Thank you for the invitation. Absolutely. I love a crossover.

I love going on your show. So thank you for having me on R.M. Yeah, no, it was great. And Scott was thrilled, too. Like his kids were playing nice or something out in the backyard. Exactly. Yeah. Maybe a little jealous, perhaps.

Always a little jealous. It keeps him going, though. Exactly. Even on book release week, he can find it in himself. He's like, I'm number one on Amazon, but you're hanging out with Ed without me. And that kind of burns me. So it's a good thing. Exactly.

We love the fomo. Well, we want to get your reaction to this shutdown, this record-breaking shutdown. I guess let's just start with your initial reactions. What do you make of this? Well, I think that it is incredibly sad for the United States. Obviously, people are feeling this deeply. And you called out the loss of SNAP benefits to 42 million Americans, which amounts to one in eight, which is a disheartening number, to say the least. And people, you know, you don't feel anything more intensely than when you don't have a meal to look forward to. And the heartbreaking stories. that are pouring in of people waiting on food pantry lines was usually people that are on SNAP. It's a misconception that SNAP covers the entirety of their meal provisions. But it's usually that they have to be on SNAP and then also work with local food pantries to make sure that their families have enough to eat. So you're just hearing absolute heartbreak from around the

country as the Trump administration so far looks like they're saying that they're going to comply with a court order, according to the press secretary, but Donald Trump is posting himself on truth social that they are not going to. So you just have people really left in limbo. So sad day for the United States, it also doesn't feel like this is going to end anytime soon. The betting markets have it at over 50 percent odds that it goes into the back half of November. There are people who are talking about, you know, 60 days, 90 days. That feels inconceivable to me based on the level of pain that it's, causing, but Democrats are also very dug in on this. And I was, I don't want to say skeptical,

but based on what happened in the funding fight back in March the first time that we did this during the second Trump administration, the Democrats folded pretty quickly. Like, it was about 20 minutes before Chuck Schumer was like, actually, you know what, let's keep the government open. Let's see what it looks like, how they're actually going to run the government in Trump 2.0. And now the answer is very clear about how Trump 2.0 is going to run the government. And it's simply not good enough, not for my party and not for the American public. And poll after poll after poll shows that this is a fight that the Democrats should have taken on because people can't have their ACA premiums going up an average of 114%. Some people have already seen because the ACA exchange is opened up to 400% increases. And you still have millions of people that are going to be thrown off Medicaid because of the big beautiful bill. So they're blaming the Republicans any 10 to 15 points depending on the poll. And so Democrats feel pretty secure.

For those who haven't been following that closely, could you just like, I mean, you mentioned the ACA premiums going up. Can you just spell out for us like, what exactly is the disagreement here? And why hasn't this been resolved? So this hasn't been resolved because Washington doesn't work, which I feel like is the answer to every question that you could possibly give to a political. strategist. I'm probably putting myself out of business, but if you programmed someone who looks loosely like me in these kinds of glasses, so me or Rachel Maddow and said, what's wrong?

They'd say Washington doesn't work. The Republicans have been claiming that they are putting forward a clean CR, so a clean continuing resolution to keep the government open. And that would be true if the big beautiful bill hadn't happened. But it did happen. And that passed in May. And that totally changed the calculus of how Americans are thinking about their lives and certainly how the Democratic Party is thinking about a resolution to keep the government open. And there were so many massive cuts that came in through the big, beautiful bill. Democrats took a step back and they thought we're in the minority, right, of absolutely no institutional control.

How can we possibly leverage what little power we have to affect the most change? And so they zeroed in on health care, which is typically. been the issue that Democrats have done better on. We lost a lot of ground over the years in terms of who's better trusted on the economy, immigration, crime and policing, all these very important issues, but always remained ahead on health care due in part to having passed the Affordable Care Act under Obama, but also the Republicans' refusal to even put forward a bill themselves. You know, they're still in the, quote, concepts of a plan phase. So Democrats basically dug in and they said, if you are not even going to have a conversation,

with us that would mean that we would include restoring the Medicaid cuts, which happened in the big beautiful bill, and making sure that we do something about these ACA premium increases, which are going to go up astronomically in a matter of months, then we can, in good conscience, fund the government. I think that Republicans thought that Democrats would balk a la March. And I think that they also thought that the American public wouldn't be so animated about it. But that has not been the case. So while the shutdown has been going on, Democrats have creeped up in their advantage on the generic ballot.

It's eight points now in the NBC poll. It was only one point in March. So that could spell a quote unquote blue wave is what you call it. But on top of it, you would see even today there was reporting that in the Senate GOP lunch that members were saying very loudly to Senator Thune, the majority leader, that they want to at least have a GOP bill on funding the Obamacare subsidies. so they can at least show the American public that they're trying to do something without being forced to either take on a democratic written bill or even a bipartisan bill. So they are hearing it at home. If they do town halls, they're hearing it there. They're also seeing it in public opinion.

How do you think this will all shake out in the end? I mean, I looked back at like 2018 and reminded myself that actually Trump capitulated when we had the 35 day shut down. you know, it was a loss for him. And so part of me says, oh, maybe the same thing will happen. But I don't know, maybe 2025 is different. Maybe he's going to continue to dig in. And maybe the Democrats will continue to dig in as well. How do you think it all shakes out? How does this end? Well, my hope is, and there have been signals from senators on both sides of the aisle, so Senator Thune and then also Dick Durbin on the Democratic side that they could be nearing some short-term. term proposal that would include a deal on the Obamacare subsidies. If you really got people, you know, off the record, they would say undoing the Medicaid cuts from the big beautiful bill is really off the table. But we should do something about these Obamacare premiums because they

affect Republican voters more than Democratic voters. So 21 million of the 24 million people that are going to be affected are in red states. So I think that a mini deal, like a stopgap solution that involves negotiation over that is the most feasible way out of this. But, you know, the pressure is really going to be stepped up because I don't know if you saw ABC is reporting that the Transportation Department is saying that they might have to close some of U.S. airspace

because of air traffic control shortages of the 1.4 million workers that are furloughed, that's everything from our national parks to our veterans affairs. Snap benefits not coming through. Also money for Head Start programs. Like, these are all things that really touch people's daily lives, and that drumbeat will get louder and louder and become unsustainable. Yeah.

So I would say we're approaching it being unsustainable, but not quite there yet. I think a lot of Americans, if you're not on Snap, for example, you're probably not really feeling this. But eventually we'll get there if this goes on, I mean, you said back of November. Ultimately, who is going to be to blame? I mean, this is sort of the classic question. If you're experiencing air traffic control shortages so you can't make your flight to get to your business meeting or whatever it is, do you blame the Democrats or do you blame the Republicans? What is the consensus, do you think? I think the consensus is that you blame the people who are in charge.

And that's the blessing in the curse of actually winning elections, right? You get to effectuate your agenda, but also when something bad happens, the buck stops with you. And the reality is, is that the Big Beautiful Bill cuts $186 billion out of the SNAP program. And in 2018, with the 35-day shutdown, Trump made sure that people got their SNAP benefits. So they're not being honest in terms of what they can do with funds that have already been appropriated that actually wouldn't be affected by a government shutdown. And I think the American public is smart enough to know these things. I also think that there are two plot line or subplot lines that are going on that are sending. a really bad signal to the American public about how Trump is running this government and what he

thinks of the average American. The first is the continued construction of the ballroom, the 90,000 square foot ballroom that's replacing the East Wing. So, you know, we could talk about history and how ridiculous this is and that it's not like a basketball court or it's nothing like, you know, building the West Wing or whatever. But the point is, is that while American workers are furloughed going without food, he can pay a construction crew to do this. And I know a lot of that is coming in from his donors and things like that, but it's still very bad optics. The visual stands, yeah. Terrible. And then it's even worse to see the Great Gatsby themed party at Mar-a-Lago from over the weekend, which even had, you know, a girl in a martini glass. And it's a, you know, a very on-the-nose

encapsulation of let them eat cake. And I know that Trump is yoloing him, you know, through the second administration, basically. But I think it's a pretty big middle finger to the people, especially his own voters that are waiting in food pantry lines to say, like, not only do I not care, I'm going to party while this was going on. I thought it was even suspect to go to Asia while the government was shut down. All right. Well, we will be monitoring this closely. Jessica Tollov, co-host of the Raging Moderates podcast, really appreciate your time. Thanks very much, Jessus. Thank you. We're recording this on Tuesday night, and at the time of this recording, the results of the New York

City mayoral election are not out yet. However, by the time this is published in the morning, the results likely will be. And according to most polls, as well as the prediction markets, the winner will be Zoran Mamdani. Now, this is a markets podcast. It's not a politics podcast. Our job is to talk about money in stocks and finance and economics, but it would be completely obtuse not to acknowledge the myriad ways

in which all of these topics are influenced by politics, whether we're talking about inflation or big tech or housing. All of these things are inherently interconnected with what is happening in the political world. politics drives policy, policy drives economics, and economics drive politics. You cannot divorce these things from one another. And no, you cannot talk about markets without talking about Trump. You can pretend he doesn't exist. You can pretend Wall Street has nothing to do with Washington, but we're not in the business of pretension. We are here to tell it like it is.

And I'm sorry, but the reality is if you care about markets, well, by definition, you must care about politics too. So this brings us back to the new mayor of New York City or the new likely mayor of New York City, Zoran Mamdani. Will his mayoralty move markets? Probably not. Remember, New York City is a city, the extent to which one mayor can impact an economy and even a market is very limited. His job is confined to New York. It's to keep New York's trains running on time. it's to help with New York's housing, New York's public schools. This is not a market-moving level of executive power. What could move markets, however, is what this election says.

Because as everyone is acutely aware of at this point, Zoran Mamdani is a democratic socialist. And regardless of how you even define that term, the point is, this is something different from capitalism, which is important, because what it tells you is that what this represents isn't just a change to the system, but actually a total and structural overhaul of the system. What Mamdani correctly identified about New York and about America is that the system in its current form actually isn't working for people. The people reject it, and they're calling for something else entirely.

Now, the big question is, why do they reject it? Well, let's just start locally with New York, where the bottom 40% of earners are receiving about 8% of the total income, where the average resident is spending almost 60% of their income on rent, where the poorest residents die on average 17 years earlier than the richest residents, where income inequality is low. greater than in any other city in America. That's New York. But then you think broader, you think beyond New York at the national level, where the top 10%, as we've discussed, now make up for 50% of the spending, where productivity is growing three times faster than wages, where in the past 40 years, the top 19 households have almost 20xed their share of wealth, and they

now control roughly as much as the bottom 65 million households. And when you think about all of this, you start to realize that actually New York isn't an exception to the rule. New York actually is the rule. It is the purest and starkest representation of where we are at as a nation. And someone came along and said, number one, I recognize the problem. And number two, I'm going to do something about the problem, and it's going to be something big. That's what this is all about. Now, do I believe that Mamdani is actually going to fix the issues? My personal perspective, no, I don't. I think he is an incredible voice, and I think he is a generational symbol of the most important issues in America right now. But no, I do not believe in many of his solutions,

some of which I think may actually worsen the affordability crisis. Rent freeze as being the most important example, and we can have the rent freeze debate another time. But the most important message from the Mamdani campaign and the message that will reverberate around the nation for years to come is the following. Inequality in America is no longer acceptable. It has run rampant for decades.

It has only gotten worse. and we have only enacted policies that have actively made it worse. And now we are reaching a breaking point. It is indisputable. It is untenable, whether it's the fact that Americans' belief in capitalism is at an all-time low, or the fact that Americans' belief in America is at an all-time low, or even the fact that public company CEOs are being shot dead in the streets. Pick your headline or your survey or your data,

point, the signs are all pointing in the same direction. We cannot continue down this path. Now, I don't believe in socialism and I don't believe in communism. I believe in capitalism. But the people of New York told us loud and clear, whatever this version of capitalism is, it isn't working. And now the question has been posed to leaders around America. And that question is, what are you going to do about it? Okay, that's it for today. This episode was produced by Claire Miller, edited by Joel Patterson, and engineered by Benjamin Spencer.

Our associate producer is Alison Weiss. Our research team is Dan Shillan, Isabella Kinsel, Chris Nodonohue, and Mia Silverio, and our technical director is Drew Burroughs. Thank you for listening to Prof G Markets from ProfG Media. If you liked what you heard, give us a follow. I'm Ed Elson. I will see you tomorrow. Thank you.