The Canadian Investor - Anthropic Eyes a $2 Trillion IPO While FICO & First Quantum Crash

Episode Date: October 1, 2026

In this episode of The Canadian Investor Podcast, Simon and Dan break down a packed week of market news, starting with the latest developments at the Cobre Panama mine and what an orderly closure could mean for First Quantum and Franco-Nevada. Pasted text They also dig into the controversial acquisition of Slate Grocery REIT, including the timing of its distribution suspension just days before a takeover was announced. From there, they look at Oracle invoking force majeure on a massive AI data centre project and what growing power, permitting and infrastructure bottlenecks could mean for the broader AI buildout. Finally, they discuss Anthropic’s potential $2 trillion IPO valuation, extended trading hours coming to Canadian markets, and why FICO’s long-standing regulatory moat is suddenly under serious pressure as VantageScore gains traction. Stocks discussed: FM.TO, FNV.TO, SGR.UN.TO, BRX, ORCL, OWL, X.TO, FICO   Subscribe to Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

If you're a DIY investor ready to take control of your portfolio, BMO all-in-one ETFs simplify the process. Whether you're new to investing or looking to streamline your existing holdings, these all-in-one solutions are designed to help you invest smarter. With management fees on popular portfolios now reduced to 0.15%, you get professional diversification at a lower cost. Check out the asset allocation ETFs at BMO-EET. The first thing I did, like I woke up, got a notification that Franco Nevada was down like 10%. And then the first thing I did was obviously check the price of gold and it wasn't down. And immediately I knew it had something to do with this.

Like to me, it looks like the distribution was halted with no news as to an inevitable deal to get the share price lower. Then you turn around and sell the company for a 60 plus percent premium. There's just so much hype around AI right now that it's almost out of the market is just disrequited. and valuing something that is burning through cash at $2 trillion. Like, think about that for a second. $2 trillion and burning billions in cash every single year. The worst part about all of this is management kind of seemed, in my opinion, clueless enough to not only jack the price is 18, 100% over that time frame,

but then they took out a bunch of debt to buyback shares. What's going to end up happening if this comes around is a lot of people are probably going to be burnt on very thinly traded companies issuing market orders during this type of stuff. Welcome to the Canadian investor podcast. I'm Simone Berengen. I'm back with Dan Kent. We have a lot of news. So definitely more news heavy this episode around some breaking news that just came up. So I guess the government of Panama just communicated or released. It's just coming out. There's been some conflicting reports that the Cobre-Panamo mine will be closing. So there's going to be an orderly closure, which, of course, is going to be affecting two Canadian, two Canadian mining company.

So you have first quantum that is being affected the most here, but also Franco Nevada that has a stream on the mine. I'm a Franco Nevada shareholder. You are as well. So there was definitely some optimism here. I think it was in the end of, at the end of 2023, if I remember correctly, that the mine was shut down. that operation stopped. And then in the last year or so, I would say there was some positive developments. There was some more optimism around the potentially of the mine reopening. And this was a significant mine because it produced about 1.5% of the world's copper production when it closed in 2023. So not insignificant.

And on the news, you're seeing First Quantum in Franco Nevada, but more first quantum stock being hit pretty hard today. Yeah, the first thing I did, like I woke up, got a notification that Franco Nevada was down like 10%. And then the first thing I did was obviously check the price of gold and it wasn't down. And immediately I knew it had something to do with this because that's probably the only thing that would send Franco down that much outside of an earnings report or else it may be. but yeah, it's... Yeah, Franco's only down 4.5% now, 5%. So it's nothing compared to 31% of First Quantum. Yeah, because it was 20% of Franco Nevada's EBITA three years ago.

I don't even know what it would be today. But for First Quantum, I think it was a pretty big, big chunk of their earnings. So there was conflicting reports because I was also reading articles. As soon as I looked up the Cobrae mine, I got an article that, that said that it would restart. So I imagine maybe even by the time we published this, that that article's been fixed because it is a bit misleading, because it says it's going to restart,

and then you see a pile of other articles that say it's not restarting. It's getting shut down. Yeah, yeah, exactly. I mean, I think, yeah, like I have on Mining.com, also saw the same kind of thing on BNN Bloomberg, that it was shutting down. So I think I don't know if it's some weird reporting from Rooters, Reuters or if they had different sources, I'm not quite sure.

And this is a commission that is urging the orderly closure. So I guess ultimately it's the president that will decide. There are some obvious economic implications here with closing the mine and not reopening it. But it sounds like after they did their consultation, they said they went on the ground as well, talked to communities. And they said the mine should have never been open in the first. place. So it's interesting to see. We'll see if money talks down the line because they are losing significant government revenues with the closure of this mine. Yeah. So now that article makes sense.

So this is, it just speaks on how a commission will recommend to the president to restart the mine. And it was issued at like three in the morning. So I imagine they went, talked to him and he said, no, we're going to close it down. So yeah, that makes a bit more sense now. So it's, it is closed. I, it's not all that big of an impact for Franco Nevada. I don't think for first quantum, it's obviously a pretty big impact. But if you're a Franco shareholder and you woke up to the news, because at one point it was down 10%,

because I got a trigger alert for a down 10%, but it seems to have recovered quite a bit. Yeah, exactly. And I'm just looking here at their production. And the, yeah, I think the production is almost the level it was pre, pre-Cobre Panama. So it's, you know, from the Franco-Nevada standpoint, so in terms of their gold equivalent ounces.

So I think they've recovered. I think, yeah, it's almost to that point, not quite, but pretty close. I think right now their gold equivalent ounces sold is nearing 400,000, where it was at around, like, it peaked around like 400,000, low 400,000 with the Kobe Panama mine. So, yeah, so we'll have to see, but some pretty breaking news here. Anything else you want to add before? And we didn't have time to do notes because it just came out here. I mean, good thing that they got all that.

I know they got a bunch of copper out of there a few quarters ago. They probably would have got it out anyway, but you never know. I think it was just a stockpile, right? So I think it was just, yeah, just a stockpile that they started getting out. But yeah, let's move on here. There's some news on the acquisition front with shareholders, is probably, I don't know, being taken advantage of you tell me how what your interpretation of this is with the slate grocery reed being acquired.

I think there's a lot of people who have probably been very soured by the reet space over the last while because I think I can't remember the name of the company that got acquired. I think it was HR REIT. Yeah, I think it was HR REIT. And I even mentioned as well, like that was an awful deal in my opinion. And this one just seems, I don't even know how to describe it. It just seems very sketchy. So Slate Grocery Reet is being purchased by Bricksmoor Property Group,

which trades under the ticker BRX in the states. And the payout is for $13 US a unit or around 1833, I think Canadian a share it is. And as I'm writing this, or as I was writing my notes yesterday, Slate traded for around 1750. I don't know what it is now, 1759. So there is a bit of a discount. And the interesting thing here is not the acquisition itself, but kind of what led up to it and how sketchy it all seems. So for the structure of Slate Grocery Reat, they have no management.

They don't have any employees, anything like that. It's run by Slate asset management. So they charge a 0.4% fee a year to run it. I think they had a, I want to say, an office reet as well. that I think was under the same structure. So it's managed by them and then they get paid a annual fee to run it. So on May 2nd of this year, the company signed a non-disclosure agreement with Brixmore, the same company that acquired it, but the thing is, is they didn't tell anybody about it.

So there was a non-disclosure. Bricksmore was interested in acquiring them. They didn't tell anybody about it. On May 21st, they announced a strategic review, but what it said the review was stemming. from was a proposal from slate asset management. It never mentioned anything about what they're proposing, anything about anybody being interested in acquiring the, the REIT. So the stock popped on this news thinking it was probably going to be acquisition news. I think it got up to around 18 bucks a share and then it kind of faded back to 15. And then this is where it gets very weird

because I think it was, well, it was last week. They just abruptly cut the distribution. Actually, they just suspended it outright. So you can see on the chart here where they suspended it, the stock literally falls off a cliff. They just suspended it. Again, the strategic review was mentioned, but they also mentioned that there was no assurances of any sort of deal or acquisition. So the stock went from $15 to, I think at the absolute low as it was $9.50-ish. And this was all in a matter of a week. So over the two days where they cut the distribution, they had 7.5 million units trade and normal trading activity would be around 200,000 units a day. So I would imagine a mountain of retail investors sold this at a substantial loss.

So the distribution was suspended September 23rd and the acquisition was announced September 27th. So it's just the difficult, the whole situation is just fishy as hell really. because Slate had a buyer under an NDA for nearly five months. They would have known, like when they cut the distribution, obviously, this is speculation by me. I could not guarantee that they knew the deal was going to happen. But, I mean, the reasoning. Yeah, there's a lot of smoke here.

Well, and the reason I think that they knew the deal was going to happen is because the buyer's agreement, so Bricksmore or whatever the company was, the buyer's agreement was that distributions had, to be suspended. So they suspended it on the 23rd. They didn't mention anything about an acquisition. People sell the stock and then like four or five days later they get acquired for, I mean,

if you sold at the bottoms like 950, almost double the price. So apparently in the deal, the reason why the distribution needed to be suspended was because the distribution was not covered. So there was about apparently a $5 million short. on a on a 20 million dollar distribution but you didn't really need to cut all of it you could have just cut it you could have just limited it until it was covered and then suspend it moving forward so that money is probably in slate's pocket and in addition to this slates contract like the asset manager says if a deal is done they are entitled to an entire year's worth of fees so they get an

entire year's worth of fees on the deal being done in addition to this slates plate owned a pretty good chunk of the REIT's actual core properties, ones that it's sold above book value. Like to me, it looks like the distribution was halted with no news as to an inevitable deal to get the share price lower. Then you turn around and sell the company for a 60 plus percent premium. Yeah, I mean, they definitely use language. So there can be no assurance that the special committees review will result in a

transaction that any transaction will be approved or consummated or that any other strategic alternative will be pursued. So they, I think they use that language to protect themselves, I would say. But yeah, yeah. Because the difficulty here is if slate grocery came out and suspended the distribution and said it was because they had a potential buyer that requires distributions to be suspended, the stock probably doesn't fall at all. It probably goes up.

Yeah. I feel like they're going to have to face some litigation here. I feel like there's just... Oh, there's absolutely no question. Yeah, it just, if they knew that a deal was going to come and the distribution had to be suspended, if they had said this, I honestly think the share price would go up

on potential news of an acquisition. You definitely wouldn't get... Like, if you're a retail investor and you sold this one, which would be perfectly reasonable to do, like you own reits because of the income. If a reet suspends its distribution, it's useless. Most of the

the value of the properties. From a re- comes from the distribution, yeah. So you would not be out of line to sell this thing when they cut the distribution and then they announce an acquisition for double the price off the lows.

Yeah. The interesting thing here would be is if any, this is where we get really ugly as if any Slate insiders bought any shares when it went down to, that is when it would get,

I mean, you would have to be moronic in my opinion to do so because you will get caught because there's no way that this doesn't have some sort of investigation into it. Yeah, it's a weird deal. Like if I, if I own this and sold it on the distribution cut and then this news came out like less than a week later, I would be absolutely enraged because again, this is just my opinion, but I don't know. They would have, they would have known that deal was going to come a week before. Like when they cut the distribution,

I would imagine they were doing it because of the potential deal, yet they didn't tell anybody. Yeah, I guess maybe something food for thought for anyone that would have caught into this is sometimes even if you're mainly owned it for a dividend distribution, maybe waiting and giving it a few weeks just to see like how the stock settles, how the market reaction is, or maybe until the next quarter, until they actually come out and give a more pronouncing, like, explanation. that could be something to consider in the future when you're looking at dividend cuts. Because look, especially when it's a bit unexpected like this, I don't know to read all that well. I don't know if there were signs that it was coming. Obviously, if it wasn't covered, that's definitely a sign that it may have been coming. But when the dividend is cut, I mean, the damage is done. So oftentimes if you wait an extra few weeks or a month, you wait until the next conference call before

you make your decision. Usually there won't be too much movement in the stock. This is probably kind of unique. So obviously you might see this kind of dividend cut happen a hundred times and this kind of thing only happened once. But that could be a lesson for those that may have been affected by this. Yeah, this one, like if I held this, it would have been very weird to me because you'd probably be able to tell that the distribution was not covered by funds, but for them to just, yeah.

Yeah, for them to just outright suspend it, that would be a little weird in my eyes because, say, there was a $5 million shortfall, then, you know, if it was a distribution issue, maybe you cut it by 50%. Yeah, that's usually what they'll do, right? Yeah. That's usually what they'll do is they'll actually just do a massive cut, but they'll keep it for, you know, they might cut it for 80, 70%, just to give them self more leeway. Having cash on hand is essential for. any business. Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations. That was our experience too, until we switched to the new EQ Bank business account. Now, every dollar earns high interest

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and burn that energy in a beautiful park. Then at night, we'd all meet back up, go out for dinner, and make it a family trip. And while we're doing that, our home in Ottawa would just be sitting empty. That's when it hit me. Listing our home on Airbnb just makes sense. Someone else could enjoy our place while we're away, whether they're here for a summer weekend, visiting family or coming in for a big event in this city. They could explore the Rideau Canal, take the kids to the water park,

catch a CFL game downtown, or just use our place as a home base to experience Ottawa like a local. The extra income could go right back toward our own trip, and we can choose to host only when it works for us. Your home might be worth more than you think. Find out how much at Airbnb.ca.com slash host. Okay, so let's move on here to the next one. So Oracle, Oracle getting into some more trouble, I guess lack of better words. So they had, they declared force major on force major, I guess, or I don't know if we.

Force major if we're using the English term on one of its largest, if not the largest project. So the AI Data Center campus in New Mexico, it's Project Jupiter. And essentially, this is one of the projects when we last did the earnings on Oracle that they mentioned, yes, they answered some questions that, yes, they had faced some issues there. But they were not putting everything all their eggs in that one basket. And they had like several projects around. So the campus is designed for roughly 2.5 gigawatts of power. and that's the amount of power that could power about 1.8 million homes at any moment, so it is quite massive here. Yeah, and the key issue is power availability, so not really a collapse in demand or compute capacity.

And the site is expected to rely heavily on Bloom Energy fuel cells powered by natural gas. And the problem is a pipeline being built to supply that natural gas has been reportedly delayed by six months. I think there are some permitting issues that are happening, regulatory issues, lack of better words. With completion now targeted for February 1st, 2027, and regulators had rejected permits for the pipeline forcing changes for the proposed route. And Reuters reported that securing power is Oracle's contractual responsibility here. So essentially what Oracle did is they invoke force majeure to. protect itself and its external permanent infrastructure problems prevented from fulfilling that obligation on schedule.

And companies will typically invoke force majeure to free themselves from contractual obligations when problems arise beyond their controls. So Oracle is not really trying to cancel the lease or walk away from the data center. The notice could just allow Oracle to delay certain contractual payments. the facility fails to come online in 2028 as planned. So essentially while the facility is being constructed, the rent that Oracle has to pay is lower than when it will be operational. So essentially by doing this,

they're trying to get that lower rent because they won't have it operational. And of course, if it's not operational, then they don't really get much revenue out of it. And Oracle is actually, well, blue out. actually Blue Owl Capital owns the stack infrastructure. That's the project developer and reportedly has about $3 billion of equity invested in the Jupiter project. And the project is also backed by roughly $18 billion in various loans. Blue Owl said that the force major notice does not change the financial commitments to the project.

But really what the big takeaway here is is that the demand. side of compute and AI infrastructure can be extremely strong, but the buildout can be affected by more than just chip availability or memory availability. So now we're starting to see more like real life constraints like power, natural gas, transmission, permitting, financing, you name it, not in my backyard. So you're getting kind of local people not wanting these in their backyard, the potential issues it can have to water supplies. Like you're seeing all these things kind of show up and it is something to take note for the AI buildout because if you start seeing more and more constraints, physical constraints

other than just the availability of chips and semiconductor, there definitely could be some more bottlenecks and potentially create some problems for the IPA scalers, right? the companies that are building this out. Yeah, I think like a company, I don't know, it's tough to say. I don't know this completely, but it seems like a company that, you know, a six-month delay for a company that is not, you know, in such a dire situation as Oracle in terms of cash flows would probably just eat it, I guess. Like it seems a bit extreme.

I mean, I worked in the energy industry for a long time. Like six-month delays were common practice. Yeah. Yeah. So I guess like the difficulty is as Oracle's burned through all of its free cash flow and is riding these massive losses. So like a six month delay in the opening of this is probably going to cost them a massive amount of money. So necessarily surprised that they would do this because obviously like force majeure, it effectively gets you out of a contract if something extreme happens that couldn't have ever been predicted. That's got of my take from it. And it just seems like a six month. delay on an energy supply is really not that wild. Like, that stuff happens all the time. But yeah, but keep in mind, it can still be contested, right? Like, they can declare that, but they can still, you know, a blue owl could still decide to bring them to court and say, no, you have some obligations here.

And the project is also, also involves open AI and soft banks. SoftBank seems to love to throw money at stuff that's really uncertain. Because if we remember, they are, they were the ones that were, I guess, yes, neck deep into the whole we work debacle. So it's not like they have the most pristine track record here, but it's really interesting to see. And is this like just an example of things to come for a bunch of different projects in the States?

And that's a legitimate question. Because you start seeing those hypers. And I think now they're almost projecting like one trillion in AI infrastructure spend next year. Well, if you start getting these like physical bottlenecks, like what happens to these Nvidia chips, these memory chips, these semiconductors

like do they just sit and in storage and take dust and just wait until they can actually deploy it? And that creates another problem because the longer, the more these are being pushed back while there's newer chips

going to be available. So you're seeing on inventory that depreciates extremely rapidly and you're not even using it. So that's the problem that you can start seeing to. Yeah, that's a big difficulty when you have these buildings that have equipment in it that does not have a very long shelf life. A six-month or a one-year delay is huge. Especially like I said, if these companies weren't stretching their spending to the absolute limit, you might see them like shrug something off like this, but

not in this case, because Oracle's burning through $30, $40 billion or whatever it may be. or 30, I think it is over the next year. So yeah. Yeah, I think that the biggest takeaway here is more, not this one-off, I would say, just if you start seeing this happening more and more and with larger projects, whether it's specific to Oracle or some other projects,

I think that will be the thing to keep an eye on. And we're not even discussing the profitability of these large language models like OpenAI or Entropic. And we might as well talk about the Entropic IPO now. Let's just say, yeah, it seems like it fits well here. So Reuters, again, so we're quoting Werders quite a bit. So they essentially, they were able to view the Entropic IPO prospectus earlier this week. So keep this in mind that this is based on their reporting.

So apparently, Antropic could seek a valuation as high as $2 trillion for the IPO. And for those not aware, Antropic is the maker of Claude. So if you're losing Claude, this is Antropic. And Dario has been the pushing the wagon on the whole doomsday AI doomsday. Definitely has been talking about that for quite some times. If you're interested in that or want to hear more about that specifically, make sure you tune in for the live show. Breeden will be coming on.

Dan and I will be there. Dan Fosha and I to discuss, like more specifically AI, get Breedon's take on it who's, you know, in the trenches building products based on AI. And to get back to. To Anthropic here, a quarter of its revenues came from only two customers last year. They also said, as a Riz, that many of its top customers were not locked into long-term contracts and could cut or stop spending. So that's always not surprising, but that's always a bit of a worry. Last year, they spent $7.33 billion in AI compute and AI infrastructure, which was three times the spend that they did a year before in 2024.

They had a $42 billion loss last year. However, $34 billion of that is actually accounting charges from financing that could convert into antropic share. So it was in cash going out, but still does not look great. They also plan to spend in excess of $500 billion in cloud computing and infrastructure in the coming years. And essentially, that's the gist. Those are the big numbers, the big takeaways from the Reuters articles.

But it does shed to lie that we've been. seeing a lot of stuff leak out in terms of revenues exploding. And it's not, it's true, like it seems to be true based on this. So revenues grew 12 acts in 2025 to nearly 4.6 billion. So it is not nothing. But what we had not been hearing of a lot is the losses part. So the expenses part. And now we're starting to get a little bit of a glimpse that, yes, it's true that the reports that were few and far betweens that they are losing a lot of money definitely seems like it's accurate. Yeah, and I would imagine if they expect to spend 500 billion plus in the coming years, the losses are are going to widen. Two trillion dollars. What was SpaceX? That was like

two and a half, wasn't it? Was one. Five or something, one point five, something like that. Yeah. Yeah, I don't know. It just revenues grew 12x in 2025. but there was a lot of people who adopted this stuff in 2020. Like, are you really going to continue growing at a 1,200% annual pace? I guess you better, if you're only earning $4.6 billion a year and you're going to IPO for $2 trillion. You better be 12xing your revenue every year. But I just, yeah, I don't know, these LLMs, I just don't, we've kind of discussed this. Like, I kind of went over and used Astra for a bit.

And I use Claude all the time. But at this point, it's just whoever offers me. the best price. The models are, yeah, the models are like I've used both. They're the, they're the exact same thing. And maybe I don't know, people who use this a lot might think I'm an idiot for saying that, but I do quite a bit on these platforms in terms of coding and things like that. And I haven't noticed anything.

So at this point, that would just be whoever offers me the best price. So like, what's the, what's the edge for a lot of these companies? I don't know. It's difficult to say. Like, if this becomes commoditized and, And, you know, they have to just keep undercutting each other for price. It's not a good, good thing. Yeah.

Like Jerry Maguire said, show me the money, right? Like, how do you make money? How do you become profitable? And there's just so much eye around AI right now that it's almost as of the market is just disregarding and valuing something that is burning through cash at $2 trillion. Like, think about that for a second. $2 trillion and burning billions in cash every single year. But enough on that, I agree with you.

I think it's extremely risky. I would not touch this with a 10-foot pole. The same thing with SpaceX. I'm going to give it some time. It just seems like there's just too much risk that's not being recognized by the market if it does go to that much of evaluation. So we'll have to see what's next on the slate now? So extended trading. Yeah, coming to Canada.

So, yeah, what's going on there? Yeah. So this came out yesterday. I think there was an article on the on the global mail. And normally Canadian stocks trade 930 to 4. There's now regulatory approval for a venue called C IX to extend it from 7 a.m. to 8 p.m. Eastern time. So you'd be getting four hours in the aftermarket and two and a half in the pre-market.

So right now apparently this exists on TSX Alpha from 8 a.m. to 5 p.m. which is kind of an alternative exchange ran by TMX group. I think like in my opinion, it's largely a dud. I think they mentioned that it's like 0.012% of total volume. So not very much activity there. The 7am to 8 p.m. sessions by this are are likely to start in the fourth quarter of this year. And the venture and the CSE will apparently be excluded.

So you'll be able to trade. pre and post on TSX stocks. Adoption is apparently voluntary. No brokerage has said that they will do this yet until your brokerage actually connected to this. If you put a, if you put an order in after a pre-market, it just wouldn't fill. Scotiabank mentioned that fewer than 5% of stocks had a two-sided quote on the after hours. And spreads were four times wider than the daytime. And total volume was like a fraction of daily volume. So TMX also mentioned that this after market or pre-market is a no halt zone. So there's no circuit breakers.

So you could have stocks. I mean, when you're talking about that thin of volume, it would be absolutely wild the swings you could get. And apparently Korea tried to do this a few weeks ago. And they had over 5,000 volatility halts in the first week. They had a small cap that went up. Yeah. They had a small cap that went up.

Like circuit triggers basically? Yeah. I don't know. I would imagine so. They just called them volatility halts. I was just reading an article on it. I would imagine this would be, yeah, circuit breaker type stuff. They had a small cap stock spike 31% on 1,400 total shares traded. And then the next morning, it, the next morning, apparently, it opened in the red. So I've had a lot of people, the reason I got asked about this is I've had a lot of people,

it asked me if it's a threat to TMX group because I do cover that company quite a bit. And I don't really, I don't think it's a threat at all. I don't think we have enough interest in our companies to facilitate any sort of reasonable pre or post market trading, except for some rare, very rare circumstances like earnings reports on the large cap stocks. Equity's trading is only like 10% of TMX's revenue. So even in the worst case, they were losing volume to this. it would be a drop in the bucket.

And there's the other situation where it's actually probably a higher likelihood if this succeeds that TMX would just buy it. That's kind of what they've done. They bought, yeah, they've made numerous acquisitions over the last while. Anything that tends to succeed in this area, they just acquire. But yeah, I just don't think we really have the market to justify this. I think that's what's going to end up happening if this comes around is a lot of people are probably going to be burnt on very thinly traded companies.

issuing market orders during this type of stuff. And if I was doing it, it's, it's limit order for sure. If it ever does come to brokerages, I would imagine you'd have to think companies like Quest Trader or WellSimple or even the major brokerages will be all over this if it's offered because it's only, it's just another additional feature you can give people to to trade in the pre and the post market. But a lot of our companies, at least the largest ones, are listed on the U.S. anyway. So if you own the U.S. tickers, you could trade them before and aftermarket, I'm fairly

certain. So I just think it's kind of one step towards inevitable 24-hour trading anyways. I think that's where we're going. I think Robin Hood's already doing it, not on an exchange basis. I think you have to buy like tokens on the blockchain and stuff for that, their 24-hour trading. But yeah, it's, yeah, I think they announced that just a few weeks ago. There's 24-hour trading on that regard on the companies have to approve it but if they approve it you're allowed but yeah just i don't know it seems like as a long-term investor really what does trading in the pre or the post-market really do for you anyways it's better for traders for sure like if you're more like traders it's definitely something interesting but yeah there's a lot the liquidity will be much thinner

and there's going to be a lot of volatility which you can benefit or get wrecked uh get hurt or direct buy. So you just have to keep that in mind. But I think, you know, at the end of the day, expended hours, I think this is where eventually it's going. I think, like, especially with the blockchain, I think you might see eventually like just 24-7 trading. I think, you know, five, 10 years from now, I think that will probably be the norm, but we'll have to see. So they're probably just going into that direction. Having cash on hand is essential for any business. Traditional business accounts, hit you with high fees while paying little to no interest on the cash you need for day-to-day operations.

That was our experience, too, until we switched to the new EQ Bank business account. Now, every dollar earns high interest with no monthly fees and no minimum balance. You also get free everyday transactions like EFTs, bill payments, mobile check deposits, and 50 outgoing and 100 incoming free interrackie transfers. And to sign up, quick and fully online, no branch visits because, let's be honest, no business owner has time for that. We use it for our own business and it's the first account that actually helps our money work harder while keeping operations simple. Check it out today at EQBank.ca slash business. I've been thinking about doing a Quebec City trip where I bring my mountain bike and the family tags along.

I could spend part of the day riding while my wife and my daughter explore the city, walk around the old streets, stop for ice cream, and burn that energy in a beautiful park. Then at night, we'd all meet back up, go out for dinner, and make it a family trip. And while we're doing that, our home in Ottawa would just be sitting empty. That's when it hit me. Listing our home on Airbnb just makes sense. Someone else could enjoy our place while we're away, whether they're here for a summer weekend, visiting family, or coming in for a big event in this city. They could explore the Rideau Canal, take the kids to the water park,

catch a CFL game downtown, or just use our place as a home base to experience Ottawa like a local. The extra income could go right back toward our own trip, and we can choose to host only when it works for us. Your home might be worth more than you think. Find out how much at Airbnb.ca.com. slash host. Let's move on here, finish by talking about FICO. So Fair Isaac Corporation. Fico was down about what, like 28, 29% yesterday on the news. Do you want to go over that? We'll finish the episode with this. I think we have some interesting comments towards that

and why, obviously you'll explain why it's down, but also being careful when you have a mode that is very dependent on regulators. Yeah, so I'll go over my thoughts here, and I think you wrote your own too, because this is a very interesting situation. But yeah, it's down over 75% from the highs. And I did have this one on my watch list for quite a while, but I ended up taking it off at the start of September when Vantage scores started getting opened up to every lender. There was a tweet in early September.

I can't remember the guy's name. He's like the director of like housing. Yeah. Polte. Yeah. I don't know the first name. Yeah. I don't know the first name, but he's the director of the federal housing and the US.

Yeah. So he came out and this would have been early September and pretty much directly attacked FICO. Like said, you know, they've had a monopoly for a very long time. You know, they raise prices too much. And then he said no more. Like that's pretty much how he ended it. And I mean, really, in my eyes, that tweet would have been a signal. And that's kind of when I was like, oh, I don't really like where this is going.

So I ended up, I wasn't really all that interested in the company. And I think it only fell eight or nine percent on that news. And it kind of, the nail in the coffin was issued what was that yesterday when, well, anyways, I'll explain. So the FICO's moat primarily revolved around the fact that FICO scores are used for nearly every U.S. mortgage. Like, I think you had to use them, didn't you? Like, you needed a, like, a FICO score. I think you had to for Freddie Mac and or Fannie Mae and Freddie Mac, which is their

kind of, it's U.S. government own and is their equivalent, I guess, a little bit of like CMHC, but in the U.S. So I think that's, so they, they, I think they back or they insure mortgages. I may be wrong. I don't know, but that's my understanding of it. Yeah. And these mortgages were literally priced off of a grid that used FICO scores to gauge credit quality for the most part. So that was the mode.

You want to issue a mortgage. You probably need a FICO score for the most part. And the issue with regulatory moats, especially like thin ones where, you know, something like this can occur, they're the worst ones. I mean, we've seen it with the telecoms in Canada. As soon as there was regulatory changes on immigration, it just absolutely crippled them in terms of their overall growth. So back in July of last year, Vantage score, which is a cheaper alternative to FICO, was enabled at lenders. But considering the pricing grid still ran on FICO, apparently nobody really used it. And kind of skipping most of the stuff along the way, the true devastating announcement was that early September one when they opened it up to every single lender.

and they did this having separate grids. So you had like the FICO score and then you had the Vantage score. And the Vantage score, the FICO score lower than the Vantage one, which I would imagine, I don't know if you read into this, would probably be, if you're getting a lower FICO score, you're probably getting a better price. Like the lender would get a higher price on the mortgage. I'm not 100% sure on that.

But they had the two grids. one with Vantage and one with FICO and Vantage gave you a different score so a lot of these lenders still preferred FICO but you come to Monday they said they will just be going to one pricing grid and that running two pricing grids makes zero sense so that would be effectively Vantage score

and FICO score equal on that pricing grid so you had Rocket Mortgage came out I think it was the same day this is one of the biggest mortgage lenders in the US saying that they will use Vantage score for all eligible mortgages and TransUnion also locked in agreement with Vantage Score for, I think, 99 cents a pull through to 2028. So.

Yeah, and just to like clarify, so Fannie Mae and Freddie Mac, essentially they provide liquidity to the U.S. market. So they will buy mortgages from issuing banks. And they provide roughly, they guarantee, like in that form, about 50% of U.S. mortgages. So it's not something. small and I guess in the past they because if they're buying mortgages I'm assuming that the mortgages must be properly documented proper credit scores and stuff like that so now because they're using two types of credit score FICO and also Vantage score then of course when you're looking at 50% of mortgages if you're an issuing bank then that gives you a lot more flexibility when you're

dealing with Fannie Mae or Freddie Mac. Yeah, and it's the, oh, you have the tweet up here. So yeah, he said since 2020, and I'll get to this right now, FICO has increased the price per person's credit score to pull somebody's credit score by 18, 100%. FICO has enjoyed a monopoly no more. And this was almost a month ago now, but this, this tweet was, it had to be an indication. That's something like that this was not going to end here.

So they went back in 2020, you could pull a FICO score for 60 cents. then it went to $3.50 in 2024, $4.95 in 2025 and then $10 in 20206. I mean, if you look at it, this might be one of the most brain dead pricing escalations you could witness. Because when you know you have a monopoly, what is a clear cut way to get regulators all over you? Like raise your prices, 1,800% in five years. And a lot of people, and we discussed this, I think back, I don't know if we come, covered FICO's earnings or not, but we had mentioned like a lot of people, the, the kind of the thesis to owning this was, oh, well, it's a, it's, you know, who these banks don't care about $9 versus

$1, $10 versus $1. It's really, it's the smallest portion of, of getting these mortgages. But if you look at rock. Yeah. Yeah. If you look at, if you look at something like rocket mortgage mortgage, which is like hundreds of thousands of mortgages a year, they can now pay $100,000 per hundred, $100. thousand mortgages versus one million like that's that's a cost that they're gonna trim like they're not yeah don't don't forget either they may issue like let's say 200 000 mortgages i'm just grabbing a random number here same with me but they may have inquired for credit scores 10x that amount

because a lot of the times what would happen is they still get charged for inquiring for that credit score even if the mortgage doesn't get funded and it falls through. So yeah, I didn't even think about that. Yeah, yeah. So it's just, and there were different pricing. I think one thing that Fico was trying to do is essentially offering a lower price, but then a higher kind of price if you fund the mortgage. So you get a cheaper price, but then once you fund the mortgage, then they, like it kind

that shoots up. So they were offering these kind of different types of price grids for the lenders using their service. Yeah, it kind of seems absurd to me that people would think these companies wouldn't trim back a very easy thing to trim back for like 90% savings. Like $10 versus $1. It just, it seems like a no-brainer to me, especially like obviously when FICO had, you know, kind of the point where it had to be them, but that that's not. not necessarily the case anymore. And I think the worst part about all of this is management kind of seemed in my opinion, clueless enough to not only jack the price is 18, 100% over that time frame, but then they took out a bunch of debt to buy back shares. So in June of this year,

it borrowed more than $1.5 billion to buy back stock at around $1,150 a share. So the shares are, what, worth half of that now? Yeah, just a little over half of that. It just kind of seems like a like a complete mess, but I know you have some thoughts on it. Yeah. So Vantage Score is the main competitor here. So Vantage Score was creating in 2006 by Equifax Experience and TransUnion. So these are the big credit reporting agencies. And that's important because essentially as I was digging into this, I went into Rabbitol and probably read like a good hour and a half on it.

And essentially what FICO did is it had like an algorithm that provided a score based on the data that these credit bureaus have. But when you think about it and you step back a second, you're like, okay, so they have their methodology. It's been used for decades. You have lenders that are underwriting based on that. So they have their underwriting processes. So it has, it had a bit of a flywheel because it was like the main option available.

There was some regulatory safety nets in there for them as well. but when you're competing with the ones who actually own the data, they can build their own algorithm because they have historical data in terms of certain patterns. They might see if people stop paying their mortgage, if they default. So essentially that's what they did with VantageCore is over time they use their own data to build this product. And of course, like you said, and a lot of the bulls would say, well, I mean it was such a small problem. price small portion, you know, lenders probably won't care. But I think the issue is, yes, they got greedy recently. And I think that really triggered the U.S. government, but also more

specifically the Trump administration. But this started back in 2014. So back in 2014, the FHS, FHFA, so the federal housing agency in the U.S. and Fannie and Freddie Mac began formally looking and modernizing the credit score requirements. And essentially classic FICO, which is Fair Isaac Corporation, had been a required standard for roughly two decades. And then you had a bunch of changes, kind of slow changes happening. But probably the first big alarm bell happened. I believe it was in July of this year or July 2025.

I can't remember. I forgot to put that in my notes. But it was pretty recently where you had Fannie Mae. and Freddie Mac share with lenders about three years of the, it was 2025. Yeah, I think so. Yeah. So that was the first warning sign. So essentially, they took three years of data and they shared that with lenders using Vantage

score. And so that, and they also shared the FICO data so that lenders could actually look at the different outcomes, a different type of credit score, what it meant for borrowers that were, you know, in those different credit score. And the goal for that, it was to essentially allow lenders to start building processes and underwriting processes based on Vantage score. Because if you have a process that it's in place, I mean, FICO becomes very sticky because you're like, okay, this new option is there. But are we really going to be using it if we're not quite sure how to create some new underwriting processes here? So that was definitely the big,

warning shot and of course then you got September. There were a few more developments between last year, July 2025 and then September of this year. But I think as you said, the biggest warning shot was the tweet from Pulte or I don't know what. Yeah, I don't know how to pronounce it either. How to pronounce his name, but essentially saying like this is going to end. And the reality is now, I think FICO will probably be fine for the short to medium term because, again, you have this established moat where it's in the process of lenders. But if lenders start saying, okay, you know what, it's not that hard for us. It's going to take us sometime, but we'll build some new processes because we can save a whole lot of money because we do originate. We query a whole

lot of mortgages, then you can definitely start seeing FICO's moat erode over time. And that's the danger of relying on a regulatory moat is that regulators, politicians change and they can decide to have something in their crossair. And this is an easy win for the Trump administration. Say, look, mortgages are high. Obviously, you know, mortgage costs are high right now because a lot of the stuff that the Trump administration did because the yields going up in big part, as we saw with the start of the war in Iran, it's been going up since. But for them, it's an easy win to say, you know what, this company was gouging you or bringing in more competition. And this is what you're doing. At the end of the day, it probably won't make a huge difference for borrowers,

but it is an easy win to show, you know, they've jacked up prices and we're not letting that happen anymore. Yeah, if you look to the company in 2020, so since 2020, they've effectively tripled their free cash flow and their operating margins have gone from 22% to 51. So if you're operating in a monopoly, you, like, there's virtually no competition and you see all this expansion in terms of margins in terms of profits. It's just a, it's a no-brainer sign for regulators to kind of look. look at this and say, hey, can we bring competition into this space?

Because clearly, I don't know FICO all the well, so I don't know if this was purely from the price increases on the, on the credit scores. But I mean, it's kind of convenient because it's at the exact same time. No, I mean, it was, yeah, it's been long in the making, like I mentioned, like this dates back to 2014, but you're making it easy for regulator. You're making it like, you're putting a target on your bag. by doing that kind of stuff. I think that's just what it is.

If they had kept the pricing increase more reasonable, sure, it may have, it may have happened eventually, but it wouldn't have been like such a target for regulators. Yeah. And I think on the Monday episode, we're going to go over kind of companies that have done this.

And I have a very good one who's affected, who did the exact same thing in a different industry. And again, like regulators looked into it and eventually kind of turfed it. And I think that was kind of the situation, here because if you look at the company's results, yeah, like look at that, look at the margins, look at the free cash flow, look at free cash flow per share is like straight line into the right. Yeah. And it's, you know, it was like a gradual up into the right leading up until 2020.

And then it was just, yeah, free cash flow per share, what, nearly quadrupled. It went from 1146 a share in 2020 to $42 a share today. So yeah. Yeah. Yeah. I'm not surprised. I know they do, like they would still be, they do more than mortgages. Like they do credit cards. Yeah, yeah, they do more than that. FICO score is used for other stuff, but definitely mortgage is, it's an important part of the business. And they also have, I think they have just looking here. So they have different like revenue types too. So it's not just like scores. They have like professional services. Yeah. They have like software analytics. So it's not just FICO score, but it's definitely a big part of their business. Yeah. Yeah. Yeah. That's all I got on that one. Yeah. No,

I think it's a good point to finish it. So if you wanted to see the screen shares, so it's available for our Joint TCI subscribers. The Monday episodes are available on YouTube. So make sure you subscribe there. JoinTCI.com. If you're interested in subscribing, you also get our monthly portfolio updates, which are coming up today. If you're listening to this, tomorrow as we're recording, and I also do my parents' retirement portfolio updates at 15th of every month and pretty active there. So if people have questions, we also have our Discord channel for people to send questions over that Dan and I monitor pretty regularly. So all different kind of things. You also get the podcast ad free feed on there as well.

So that's if you're interested, it's $15 a month. I encourage you to try it. We post our updates, like I said, every single month. But aside from that, I hope you enjoy this episode. On Monday, we have a fun one coming. Again, we'll be looking at four companies to each, companies that were once at the height of their powers. And for various reasons, oftentimes self-inflicted, taking some bad decisions. I have one Canadian and one historical internet company.

I'll just leave it at that that the younger people are probably not familiar with, but fun to discuss. So we have four in total. Make sure you tune in, whether it's on the podcast feed or YouTube. It'll be a fun one. But I appreciate the support. If you have a moment, give us a five-star review on whichever platform you're listening. Give us a subscribe on YouTube. We appreciate it.

And we'll be back with our regular Monday episode on Monday. The Canadian Investor Podcast should not be construed as investment or financial advice. The host and guests featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.