The Canadian Investor - Canadian Insider Trading Allegations & the IPO Mania Continues

Episode Date: June 11, 2026

In this episode, we break down a packed week of macro, market and stock-specific news. We start with the Bank of Canada holding rates at 2.25% as inflation pressures remain sticky, then look at the latest U.S. CPI print and why markets are still worried about inflation staying higher for longer. We also discuss the insider tipping allegations surrounding TerraVest and why governance risk can matter, even when the underlying business remains strong. From there, we move to the IPO market, including OpenAI reportedly filing confidentially for an IPO, the latest on SpaceX’s expected public listing, and Wealthsimple’s new IPO access feature for retail investors. Finally, we look at Lululemon’s tough quarter, weak Americas sales, margin pressure, lowered guidance, and whether the company is starting to look more like a turnaround story than a premium compounder. Tickers of stocks discussed:TIH.TO, LULU, ATZ.TO, META, GOOGL, AMZN, MSFT, NVDA, SPY, QQQ 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.

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Investing is simple, but don't confuse that with thinking it's easy. A stock is not just a ticker. At the end of the day, you have to remember that it's a business. Just my reminder to people who own cyclicals, don't be surprised when there's a cycle. If there's uncertainty in the markets, there's going to be some great opportunities for investors. This has to be one of the biggest quarters I've seen from this company in quite some time.

Welcome back to the Canadian investor podcast. I'm Simo Berengen back with Dan Kent. Dan, who's back from a nasty virus. We don't quite know what it is, but definitely you had no voice last week. And now you have a voice a bit off, but you'll be able to power through and record this episode. Yeah, that was, it was ugly last week. I couldn't have even came on here if I wanted to because I couldn't talk, but went through the whole family. I'm probably 80% now, so good enough to record.

Well, I'm sure people are glad that you're back. And today we've got packed episode in both news and earnings. We'll start off with the Bank of Canada that announced just earlier this morning that they held rates at 2.25% and the big takeaways from that and why they decided not to cut or hike rates. Then we'll touch on US CPI, which came in at 4.2%. The first time inflation has been above 4% in more than 3 years in the U.S. With, of course, gas and energy playing a major role here. After that, we'll get into the TerraVest insider tipping allegations, but the details being reported are pretty serious,

and the stock reaction shows investors are taking the government risks pretty seriously. We'll also finish here by talking about, Weld Simple's new IPO access products. Open AI reportedly filing confidentially for an IPO. Another update on the SpaceX IPO that is supposed to happen later this week. And finally, Lul Lemon's tough quarters. So jam-packed episode should be a fun one. And just so that people will know, we are recording this on June 10 at noon.

So just in case information changes because, of course, it changes so quickly. So let's start off with the bank. of Canada holding the rates at 2.25%. Were you able to launch the press conference or didn't have time this morning? I didn't watch it this morning. No. That's okay. It's always thrilling, as you can see, to hear Tiff Macklin and Carolyn Rogers take some questions. I always find it pretty entertaining. And they decided to hold rates like I mentioned to 2.25%. No cut even with a weak Canadian economy because inflation is moving back towards 3%. They're really. stuck between a rock and a hard place and it was clear during the press conference either.

They cut too soon and they risk fueling inflation, hike, and then they risk slowing the economy even more. The inflation language was pretty interesting and became more cautious. And in April, they had a clearer timeline. So in the statement that they release, they were saying was essentially verbatim, inflation would be peaking around 3% and returning to 2% in early 2027. Now they mentioned that the inflation will hover around 3% in the near term and ease gradually towards 2%. So that wording change matters.

It may not sound like a lot, but the takeaway for me is pretty clear from that wording is there's more uncertainty. They're seeing the data is changing and they don't want to panic people, businesses, institutions, investors, but they also don't want to outright lie and say that things are not changing. So what they do and what they typically do, they just change to an even more vague language, which is exactly what it is, essentially what it means, and you can interpret that however you want, and that's a beauty of using that kind of language is gradually, I mean, gradually can go on for a very, very long time, and I think it's very calculated. that they used that language.

I mean, look at the situation in the Middle East right now. They thought it would be over with, well, that was back in March. They said it would last a few weeks. And then it's just a few weeks more, a few weeks more, a few weeks more. As long as that goes on, I would imagine their commentary is going to be, they're not going to outright say they don't know. Like you said, they're just going to use more generic, vague language to kind of say they don't know without telling people because, yeah, you don't want to spook anybody.

I don't even know, even if they had cut, does that do anything really considering the environment? Like, even if they went down a quarter point, I don't really think that would change anything all that much. No, exactly. And for now, they're really looking through higher headline inflation from oil and gas. But they made it clear, though, in the press conference. And they used that term a few times that higher energy prices, they want to avoid turning that, that it turns into generalized information. That generalizing for inflation is really what they're scared about and really want to avoid. If inflation just becomes generalized and the Bank of Canada said it would be forced to hike rates again.

So they did say that. I think they even said they could rate hikes on consecutive decisions. Oh, did they? Yeah. But on the other side, they said if tariffs weaken the economy more than expected, they could still cut rates. So it's really like, you know, we, yeah, we could do both. But for now, they're really, they're staying put. I think they just want to see more data come in.

I think they're clearly, I think they see risks on both ends. And they want more data before they decide to either cut stand path once more or increase rates. Yeah, I mean, it makes sense. Like I had mentioned before, I kind of guess I said what I wanted to say before is they, they just don't know and they don't really want to spook anybody either. because you don't necessarily want to talk about inflation escalating because that's probably going to pull back spending. It's going to, you know, scare people.

So again, they need that situation in the Middle East to be resolved. Should have been, well, apparently should have been resolved months ago, but it's just dragging on. Like, what is oil at now? It's got to be high 90s. I think it's around 90. Yeah, it's been kind of up and down just around that price and looking at it. Now it's like trickling up.

Yeah, it was like closer to 90 earlier this morning. Now it's around 92, 93, depending on which benchmark you're looking at. Again, I think a big part of what's keeping oil still relatively low when you consider what's happening and the supply impact that it's having is that really the job owning that Trump has been doing, the fact that there has been an imminent deal for a better part of three months now with Iran. But of course now you're seeing some hopefully nod, but it doesn't look like the conflict is going to be resolved anytime soon with some of the recent developments.

But I think a lot of traders for oil specifically, they're afraid of being along because you never know what Trump could be tweeting that could impact the price of oil. So it's really, it's a very strange dynamic. But there's always a risk that as the markets has this continues for a prolonged period of time, that the markets start realizing, okay, we're starting to see really the impacts. And I suspect that if this goes on once we start seeing companies reporting like Q2 and saying, well, you know what? We're starting to see increased costs across the board. We have to pass that on to consumers.

I think that could shock markets a little bit, but we're probably a month and a half, two months away from companies reporting Q2 anyways. Yeah, we've seen that with Walmart, was it? They said they didn't do it this quarter, but they might have to start doing it moving forward and even that caused the stock to drop a bit. So, yeah, I mean, they have to eventually. Yeah, Lowe's Home Depot as well, seeing pressures there too, so we'll have to see. But a quick note here, the US CPI also came out.

So it hit 4.2%. That's following a 3.8% print in April. And that's the first time it hits 4% in more than 3%. three years. So it's definitely noteworthy if you combine that with the Bank of Canada and what they said. And clearly, they're seeing inflation staying higher for longer. And of course, this was mainly attributed to gas and energy prices being higher. So something to keep an eye on. The Canadian CPI data for me, I think won't be out for another 10 days or so. I think it's around the 20th. So we'll have to wait on that front. But still something to keep in mind. And just to me, I always

kind of retie this to investing, but it's a reminder that when you have inflation starting to pick up, it's much easier to cope with it when you have assets. Yeah. Oh, definitely. I've seen a few tweets this morning about how core CPI wasn't all that bad, and that's, they exclude energy and food, which over certain periods of time is probably a logical thing to do because they are volatile, but when you have it trending upwards for months and months and months, it starts to become, you know, the headline number is very relevant. I mean, both numbers are relevant, but yeah, 4.2% is not very good. I would have a feeling that's why the markets are dipping a bit this morning. Well, yeah, I think the markets are definitely worried about inflation amongst other things. And we saw on Friday the markets, the NASDAQ,

I think, down close to 4% on the good jobs report numbers. And I think that some of the fear is that if the economy is stronger than expected, inflation will also be higher than expected. So I think it's this kind of good news, bad news type of deal with the market. So we'll have to see. 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.

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time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends. And there's other stuff like learning duolingo style education lessons that are completely free. You can search up Blossom Social in the app store and join the community today. I'm on there. I encourage you go on there and follow me. Search me. up some of the YouTubers and influencers and podcasters that you might know, I bet you they're already

on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead, blossom social in the app store and I'll see you there. There is an old saying in investing. It's not about timing the market, but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom. They're the ones who spend the most time in the market. I've been a question. West trade user for over five years, and the reason I stick with them is that they remove the friction of regular investing. With no commissions on stock and ETF trades, you don't have to wait until you have thousands of dollars saved up to make a move. You can contribute

small amounts regularly and keep your portfolio growing consistently, removing the stress of trying to time the market. And they keep making it easier to build a well-rounded portfolio. Soon, you'll be able to trade precious metals through Questrade, giving you even more ways to diversify. Questrade makes the whole process seamless, allow you to focus on what really matters your investment strategy, not trying to avoid fees. Ready to invest, head over to Questrade.com, open and fund your account with code TCI and receive $50. Conditions apply. Enough of this macro stuff. Let's move on to, we had a few people ask for this. And of course, we had to talk about it because it's the TerraVess insider, I don't know, trading or insider tipping. You want to call it. And of course, just as a mention here, these are allegations. I think it started with an article or report from the Journal de Morial, if I have this correct, right? Yeah, and it was released late.

It was released at like midnight, I think, the night before. So it was a very late article kind of before the market's open. Yeah, like that's the thing. Whenever we mention anything in here, it's allegations, not confirmations of anything actually happening. I think like regulators in Quebec are looking into it, but there's been, I don't think there's been a... So in this situation, if the article that was released is accurate in any way, there's

there's some pretty damning evidence, but again, it's all allegations. So Charles Pellerin, who is the executive chair of Terevests, he's also the largest shareholder at around 15% of the company, has been accused of tipping off his family and friends about the N-Trans acquisition. So that's why we say insider tipping. It wasn't, but a lot of people are going to associate this because insider trading is like it's just kind of what you say, but he wasn't insider trading this acquisition. he was apparently tipping off his friends and family about a potential acquisition.

So this acquisition happened in March of 2025. Which does not look much better. It's almost like purposely trying to circumvent insider trading, making it more difficult to track because it's a friend or family member. Oh, and sometimes it was like the friend's wife bought the shares instead of the friend. But it's wild. The acquisition happened in March of 2025, but Pellern was aware of it in December of 2024. So text messages were sent and positions were taken in the company within minutes after the text messages were sent.

So that's what this article is saying. So he texts them, told them about the acquisition, and they bought shares within minutes after. So it is estimated that the family and friends ended up making just under 7 million on the transactions. I don't know. I can't remember if that was US dollars or Canadian. If it was US dollars, you're talking about over 10 million. So this should be fairly obvious to anybody new to investing even, but you're not allowed to do this. If you are in a position where you know material information that is not available to the public,

you cannot share it with anybody. It's illegal. The board is open a review of the incident and it's being invested. by that regulatory body in Quebec. And the stock ended up bombing on the day. At one point, it was down 35%. It recovered to be down around the mid-teens during the day, but then settled back down again at 31% I think it lost on the day.

It's recovered. It's probably made 10 or 15% back over the next few days. But the initial reaction for a lot of people was, who cares? It's not like this impacts the business. And in general, I do agree, like, operationally, I don't think it hits the business at all, which is actually why I did consider taking a position, but there are some bad things that could come of this. So for one, there's kind of that theory of, you know, there's never really one cockroach. You know, you have one

person doing stuff. You don't know if there's other people doing the exact same thing. And you said these are the largest shareholder, too. Fifteen percent. Yeah. Yeah. Yeah. Yeah. Yeah, he's... Yeah, exactly. He's the biggest shareholder of the company. And it's, I've had a bunch of replies on X when I made the tweet about how, you know, there could be other things happening here. And they kind of said that TerraVest came out and said that they mentioned that it was only him.

But the company is not just going to come out and say a release and say like, oh, yes, it's widespread across the business. Yeah, exactly. Like, they're going to say it's just specific to him. Before there's any sort of investigation, they're going to give you the most bold. boilerplate reply imaginable. So that's the potential issue. I would say that's very little chance.

I would imagine it is an isolated incident, but there is a non-zero chance that it's not an isolated incident. So that probably impacted a bit. And the second would be their borrowing capacity. So governance issues impact your ability to borrow. So when these banks loan money, like their main focus is to get their money back. So a higher guarantee of that happening is a strong management team. As soon as they feel anything funky is going on, they could charge more to borrow.

And TerraVest is very acquisition heavy. So, you know, that's kind of an issue because even a quarter point, half point increase on your lines of credit, whatever it may be could impact your bottom line. It would go directly, you know, it would go directly to the bottom line. And I know they have a pretty large line of credit. that is renewing at the end of this year or early next year. I'm not exactly sure of the timeline, but that is definitely probably the biggest potential impact is that, you know, the situation of governance and, you know, our bank's going to be comfortable lending at the same rates, considering, you know, management is allegedly doing, well, I guess I should say for now,

a single person in management largest shareholder is kind of doing some, some funky things. So the third would be governments and legal costs. You'd have to imagine there would be an investigation here where they probably open up the company books. Every director is, I would imagine they're going to be thoroughly investigated. If they weren't, that would seem a bit odd to me if they didn't look into this. Again, you know, they're being looked into it to a certain degree. But it could potentially tie up some liquidity, kind of hard to say.

Like, Terevests doesn't have a lot of cash. They only have, I think the last time I looked, they only have around 27 million in cash on the balance sheet. So could that tie up some capital impact acquisitions, hard to say? And then finally, there's just reputation. Retail investors do not want to own companies that they feel insiders are using as launch pads to give their buddies more money. Like this is just, it's a bad look.

And there was actually a study on that that highlighted how companies who are involved in this type of stuff tend to have very sporadic returns over the coming years. And it also does historically increase their. cost of capital. I mean, all that said, if you want my opinion on, I think for him, if true, it was an absolutely moronic move. The counter argument to this would be that this type of stuff happens all the time, which I would tend to agree. Like, you would have to think this happens all the time with management teams, but obviously getting caught is, is worse. Texting your family and friends' privilege information, and then they immediately hop on their brokerages and buy shares

within minutes of getting the text message. It's just bad. I do think this is an isolated incident to one person. I think if you're planning to hold the business long term here, it probably will all come out in the wash, obviously if it is that isolated situation. If there's more issues here, we see some pretty big volatility.

But the stock will probably face some overhang while the investigations are going on. It might trade sideways, who knows, really. Much like, you know, the information that he supposedly fed family and friends, the information we would need to make a definitive decision as to whether or not this is an opportunity or not, you're never really going to know until it gets investigated and things come out. But I have contemplated buying here. I haven't, but because it's a good company.

It's just, I thought a 35% drop was, was pretty rapid. But there's also the other situation where if it comes out to be true and he's kicked off the board, you have a 15% shareholder that's not on the board. Like, is he going to dive? shares, that's a huge chunk to get rid of. It's kind of a weird situation. Yeah, but even with this drop, it's still trading at 36 trailing 12 of months earnings and then 23 if you're looking at forward earnings.

So it's not trading cheaply. So I can definitely see an argument being like, okay, it's going to be ranged bound for a little bit just because investors are not as willing to pay for a premium for this company now that these kind of allegations happen. And what you said for the governance risk is real because some might be listening to say, okay, well, what does it matter if you don't have great governance as you're trying to borrow money? The reality is just it increases risk. And banks, lenders want to be compensated. If there's more risk, they might still lend to you. They'll just demand a higher interest on it. Yeah. And when you're talking about hundreds of millions

of dollars in debt, you know, fluctuations in, like I said, even a quarter point, half point, whatever it may be, that, yeah, that impacts the company. It's an interesting situation. I know, I think the acquisition element comes into play here. Like, they don't, I think in their last quarter, I don't think a lot of people liked it because I think organically revenue actually declined. I might be wrong here, but I'm pretty sure I've seen like revenue declined, like low single digits. It was all acquisitions that kind of drove that growth. So if that is impacted,

that's definitely an issue here because this one kind of trades at that like premium compounder multiple we've seen because they kind of do. They make a ton of acquisitions. The other thing I guess I'll mention is they did make three acquisitions over the last month. So I mean, would they have really done this if they thought that this would escalate into larger issues, hard to say? And there was another another thing I guess I'll kind of. like put to bed is there was his home got rated in yeah it was gonna say yeah so his home got rated in early february because of these issues and within i think it was like a week after he ended up selling shares so at first it doesn't look good but then i kind of looked at the

insider transactions he's been a net seller of shares for like three plus years so i don't really know you look into it that much yeah but it's still from a judge judgment perspective. I don't care whether you've been selling or not. Just not a great look. Not a great time. He should have known that. Yeah, but he should have known if the allegations are true that you shouldn't be tipping. But even despite that, this is apparently, you know, this is confirmed this part of it where he sold shares. Like, once your home has been rated, maybe hold off on selling the shares. Like maybe that's a, that's probably a good idea. But I think, no, it's something to keep an eye on. For me, I know, Braden, I think, I said the, Double his position. Yeah, he added to his position. I personally, I think I'll wait and see. I do like the type of business that it is in terms of the industries it's in,

but a kind of acquisition heavy business that relies a whole lot on that. And then you have this kind of governance stuff. I'm more of the wait and see type of deal. But I could be wrong, but especially someone highly placed at the company who has an east part of other. boards as well, right? I think he's pretty... Yes, and he founded... I can't even remember what he found it back in 2014, but he's been around for quite a while. He's a very prominent business person. I mean, I'm kind of shocked that this happened, but... Yeah. Again, I think it happens all the time. You just don't see it. And here they just got caught.

Yeah, I mean, we saw, you know, I know it's a different level, but essentially, you know, even with Trump and his posts on the Iran conflict and the oil trades related and how some people profited from it. Obviously, it's a much higher level, much larger sums of money, but I think it's probably right. This kind of stuff happens all the time. 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 switch 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 interackey 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.

Calling all DIY, do-it-yourself investors, Blossom is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are using the app. Every time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends.

And there's other stuff like learning duolingo style education lessons that are completely free. You can search up Blossom Social in the app. App Store and join the community today. I'm on there. I encourage you go on there and follow me, search me up, some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there talking, sharing their investment ideas, and using the analytics tools. So go ahead, blossom social in the app store and I'll see you there. There is an old saying in investing. It's not about timing the market, but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom.

They're the ones who spend the most time in the market. I've been a quest trade user for over five years, and the reason I stick with them is that they remove the friction of regular investing. With no commissions on stock and ETF trades, you don't have to wait until you have thousands of dollars saved up to make a move. You can contribute small amounts regularly and keep your portfolio growing consistently, removing the stress of trying to time the market.

And they keep making it easier to build a well-rounded portfolio. Soon, you'll be able to trade precious metals through Questrade, giving you even more ways to diversify. Questrade makes the whole process seamless, allow you to focus on what really matters your investment strategy, not trying to avoid fees. Ready to invest? Head over to Questrade.com,

open and fund your account with code TCI, and receive $50. Conditions apply. Okay, let's move on here. Some more news on the IPO front. So OpenAI news came out that it's filing confidentially for an IPO. So there's no official timing on or the terms that have been disclosed. But the reported valuation expectation is that it's probably a B around $1 trillion, less than what's being speculated for Antropic.

I think Anthropic would be beyond $1 trillion, possibly even like $1.5, depending. Again, this is just speculation and things I've read. And, you know, the $1 trillion makes sense because the latest funding round from OpenAI was $852 billion valuation. The IPO could happen as early as September. And it follows, of course, defiling by Anthropic, again, confidentially filing an IPO with the SEC. see, I talked about it last week when you were recovering from that nasty virus. And the bigger story I think here is capital intensity because open AI needs enormous amounts of money of capital for AI infrastructure. I don't think I'm, you know, breaking any news here when you're thinking about compute, model, training, product development, and even talent, acquiring the best talent.

Going public could give it access to a much larger pool of funding. It would also create liquidity for employees and early investors. That tends to also be the goal of IPOs. It would also force more disclosure and also the economics around it and also the economics around Microsoft, the margins, the revenue losses, CAPEX need, and customer concentration, something that I think they've alluded to and we can kind of piece to pieces, but we don't know for sure, especially if you're talking about Nvidia has been one of those, but also for them, there might be some

large customer concentration. Open AI posted in March that it had revenues of $2 billion a month, which was a pretty significant increase over the $1 billion a month they were doing at the end of 2024. I think it's still lower than what Anthropic is doing. I think Anthropic is accelerating faster, but the problem here is that they're also losing a whole lot of money. And there's also a bit of situation and it is making me a little nervous to when you start seeing SpaceX that wants to IPO. I think they're set to IPO what Thursday or Friday this week. I think it's this Friday. Yeah, this week you have SpaceX, you have Anthropic, you have OpenAI now. You also have Google raising capital, 80 billion at first, but now they upped it from 5 billion. I think

there's some rumors that meta might also be raising some equity for capital. Amazon as well. So So you have these companies that are also generating a whole lot of free cash flow of cash flow in terms of, you know, meta, Google, and you said Amazon that are tapping that cash flow for CAPX. They're also raising debt and now they're raising equity. Like it's clear that they need all the money they can get. But at some point, I mean, you run out of capital. Yeah, exactly. Or like, it has to rotate from other. sectors of the economy of the stock market or I mean there's new liquidity injected into the system like

I'm not quite sure but at some point something's got to give and to me this is what it's starting to make me a little bit nervous is these entities could suck a whole lot of capital from the markets and if they don't deliver as much as investors expect especially in the first like couple years and I would say even the first year because I came across a really interesting article from NASDAQ that was posted in 2021, but they looked at from 2020-10 to 2020 in terms of the returns of an IPO from the first day up to three years. And for the most part, there's more and more companies that end up lagging the market the longer time frame you look at. So shorter term, I mean, it looks not too bad, but still you can look at some pretty short term losses and then it just increases over time. And a year out, you're looking at more around 60% of companies that have underperformed the index, have underperformed the market. Yeah, it's a pretty common.

There's a lot of historical data that backs the fact that most IPOs, at least over the first three years or whatever it may be, are very. poor investments. I mean, even like high quality companies like Facebook, I think when Facebook IPOed, and I know that because I actually bought the Facebook IPO and panicked when it dropped, I think it was something like 50,

60% post IPO. So when was that like 2015 or something? No, 2012. Yeah, 2011, 2012. Yeah, 2011, 2012, the IPO. It was a very long time ago. I was very fresh at that point.

But yeah, it's another thing, too, is like right now, like these companies don't have to like you kind of know what they make and how much they're losing but this is going to be a quarterly event where you're going to see the cash burn you're going to see yeah I mean at what point does the top line growth you know kind of fade away and people are kind of looking now at the amount of money they're burning but it'll be an interesting situation the fact they're all coming to market probably in 2026 is wild because yes I would

imagine a lot of people are going to be sending capital into these investments. I will not be, but it almost feels like they know there's a limited amount of capital and they don't want to wait too long until the well run dries runs dry. So I think that's, I don't know, that's kind of the feeling I get again. This is not, this is just my intuition. I could be very well wrong. And we had some more updates on the SpaceX IPO and the fact that it won't be added to the SNP 500 index because it does not meet the requirements and standards and pores will not modify the requirements. One of these is that the company has to be profitable, which is not. Nasdaq on the other hand will be making rule changes to allow SpaceX to be listed into the index pretty quickly.

They have a fast entry rule that now allows company like SpaceX to enter the index within 15 days. Without it, it could take upwards of three months. And they change how they calculate market cap eligibility as well. So since SpaceX only has about 5% of the shares that will be on the public float, so publicly traded, the calculations included the non-trading shares to make sure that it could fit in into the index. And essentially by doing so, it will allow NASDAQ to add it more rapidly to the index as it would qualify as a top 40 constituent by market cap when you include the non-floating chairs. If not, I think it would still be against its rules. So it is being more flexible, but the SMP 500, they're saying no for now because profitability is

one of their rules. Yeah, it's, I mean, it makes it, I don't understand why these companies are modifying the rules to get SpaceX in there. It seems a bit odd, but, because if you want to own it, you can just buy the IPO. Like, if I own the S&P 500 and they just stuff SpaceX it, in there because what is the market cap going to be like 1.75 trillion? Yeah. Yeah. So I mean, it's going to be.

That's right about it. Like, would that be a top 10 company in the S&P 500 by market cap? It'd be pretty close. Yeah, I think it'll be in the, probably in the top 10. Yeah.

Yeah. And I would imagine a lot of people who own a SP 500 index fund probably don't want a, what would it be probably mid single digit waiting to SpaceX. Yeah, it's kind of crazy that we're saying like, will it be in the top 10? and we're talking about 1.75 trillion, which is just crazy,

just shows how large these companies have been getting. But on the IPO front, there's been some more news. So Weld Simple is coming out with a new IPO access feature for retail investors. Yeah, so this was released, I think it was early last week, but it might have been the week before.

I think it is an important one to go over because we did that half episode discussing how you can get exposure to these companies pre-IPO. That would only be like two or three weeks ago and then Well Simple came out like this with this. Which is very different from what we had discussed, reading more about it. Yeah. So with the amount of new products they're launching, like Well Simple is launching, I'm really not surprised whatsoever to see them at the forefront of this. And I'm not 100% certain, but I'm pretty sure you could get access to this with Questrade. I think they've done it

for quite a while, but there was a large minimum. So with Well Simple, there's no minimums. So you can buy one share realistically if you want to. So if you have an account at Well Simple, you'll now be able to get access to major IPOs at their IPO pricing. So for retail investors, a process is, I guess you could say it's unfair when it comes to IPOs. Institutional investors get the shares at IPO pricing, which is almost never the price the company will open at on the first day of trading. Retail then if they want to buy it the first day of trading, take. Typically, they'll pay higher prices.

Not every IPO is green on day one, but if it is, you'll be able to, you'll have to pay more. And they kind of end up, you know, retail ends up holding the bag on a lot of these IPOs. And we talked about this before. There's a lot of data to suggest they underperform. So 64% of IPOs underperform the broader market over a three-year time span. So three years after their IPO, they're underperforming. And 57% of IPOs are actually negative. in terms of returns four years later.

So generally, you have not done very well buying these at IPOs. With this new setup, I mean, it's kind of like they're, they're from a marketing perspective, they're letting the little guy in effectively at IPO prices. Yeah, I mean, it's fantastic marketing because everything that they're doing, whether you think about private equity, private credit, and now you have this, I may be missing a few other initiatives that they have, but I think their market. it as were the platform that's democratizing investing for the retail investor. That's how they're selling it. Whether these are all good things or retail investors have a higher chance of getting

burnt using them is another question altogether. But I think that's their branding. Yeah, don't associate them bringing this to retail as if you're going to make money. That's never a guarantee. So they will make money. They will make money. Yes. I'm sure there is fees associated with that, right? There's no fees. No fees, really? I think it's kind of, it's just, I mean, if you think about it, if you want access to the SpaceX IPO, I mean, your easiest path now is to open an account with Well Simple. Easiest by far, if you want it at IPO prices, because there is no fees.

So they're probably doing this to just get accounts, I would imagine. Yeah, I guess so. The process, the system is not as simple. You can't just open a Well, simple account, say, hey, I want. 10 grand of SpaceX and you get it. And what I would imagine is well, simple only as access to a particular amount of shares. So there is fees.

Is there? Yeah, the classic hidden fees of foreign exchange. Oh, yeah. So there's a lot of four. Ex exchange, yeah, exactly, which is probably going to make them a pretty penny just because most of these large IPOs that will be in most demand will be in USD. So you have the CAD converting.

won't be in CAD. Yeah. Yeah, they will make some money, that's for sure. Okay, yeah, I didn't, that does make sense. If an IPO is, so the process, you can't just go on there and say, I want 10 grand of this and you'll get it. You could if the IPO is not very popular, but if an IPO is oversubscribed,

it looks like they'll be running some sort of lottery style system. So right, this is kind of right from their page. If demand exceeds the shares that Well Simple has available, allocations to clients will be chosen through a transparent process, which is kind of that lottery I talked about that is disclosed in advance of each IPO and may differ between IPOs. So you could realistically go on, say, I want 10 grand

of SpaceX. You could end up with $1,000,000, or you could get very bad luck and just end up with nothing. So I think ultimately the banks decide what to give Well Simple in terms of shares and then well simple distributes. And if too many people want it, then they're going to kind of do that lottery system, I would almost guarantee that SpaceX will be that lottery style system. I would bet very good money that it will be oversubscribed because it is very popular. The other catch here and is a very, it kind of, it's kind of to me what makes this not really all that good of a functionality is you can sell whenever you want. So you can get your allocation of shares of SpaceX.

you can sell it on day one, whatever it may be, make your money, lose your money, whatever it may be. But if you sell within 90 days, you are banned from participating in any further IPOs. So you could do it once,

make money once maybe, but then you won't be able to participate in any other IPOs. So. Yeah, even if you do it once, you're really just gambling essentially on the fact that you're hoping it'll pop above the IPO price, but like I quoted that study and we'll do an episode a bit deeper dive on IPOs and there's I found a

really thorough paper that was updated recently. I think it's like 30 page. It seems to be cited for everything that looks on looks at I think multiple decades of IPO returns and data. So I'll definitely look at like read that and we can do a podcast segment or a full episode on it because I think it's it's very appropriate with what we're seeing. But just the, NASDAQ information. Like essentially you have a 50-50 chance of the stock popping versus not. And clearly SpaceX has, there's a lot of demand behind it. There's Elon.

He has a big following. So I would not be surprised if it pops. But to me still, it's just, why not just wait and buy it the day of and then at least have the flexibility to sell it if you want to in the following 89 days? Yeah, I guess the situation there is you don't get it at pre-IPO price, but... But you could get it cheaper. Yeah, you very well could get it cheaper. If I were to bed, I would imagine it's green on the day, but who knows?

Yeah. But with this, so yeah, you're not locked in, but you kind of are locked in if you want to buy anything else. Like if you're sitting here thinking you want to do the SpaceX IPO and then, you know, you want to wait until Anthropic goes public and you want to buy that later, you effectively have a 90-day lock-in on your SpaceX shares, because if you sell them, you're not allowed to do it anymore. And I'm kind of speculating a bit as to why here, but I do believe it's because wealth simple is not the underwriter of the actual shares. They're just getting the shares from the issuing bank.

And underwriters, the ones issuing the shares, their main job is to kind of ensure price stability, successful day for the IPO. And if a bunch of people are looking to dump the IPO on the first day, it would probably drive the prices downward. So they tend to allocate shares, and this is just kind of what I was reading. If you're like a major institution that's flipping these, the next time you want an issue, they're going to give you less shares.

So Well Simple doesn't want this to happen because then it kind of nerfs this feature. So because I think that would limit Well Simple's ability to acquire shares for IPOs in, you know, from those same banks in the future. So that's why they don't like you flipping them. So I do like the idea of the product. I don't really like the idea of buying IPOs. I have bought pretty much one IPO in my life. That was the Facebook one, and I ended up selling it.

Not necessarily directly at the bottom, but I mean, if I had held, obviously a very, very good investment, if I had just bought it back then and held. But I think a lot of people here will just panic and dump them if it falls. That's the reality of the situation. And the valuation for SpaceX is definitely stretch, right? I think it's probably around 70 that we had talked on the podcast approximately based on the numbers coming out and the valuation. So I think it's right around 70 times sales. It's not cheap. Can SpaceX be a much larger company in 10, 15 years from now? Absolutely. I mean, I would not bet against Elon. Like, people that bet against Elon for the most part got wrecked with Tesla. So I think whether, no matter what your

views are on Elon and I know he's a very polarizing figure. You can't really argue that the guy, the man's not a visionary. Like he essentially like brought electric vehicles, you know, in the mainstream and almost went bankrupt doing so. And he's got some big, big ambitions with SpaceX. And I would not be surprised if he, you know, he executes on it in 10, 15, 20 years from now. And we're starting to see travel to Mars happening more frequently. And I think having some, I think Saturday, like more and more, some of the data centers being, I think, outside of Earth. I had, yeah.

Data centers. I had read correctly. I mean, all that to say, he's got a whole lot of ambition. And it's very possible that, you know, in 10, 15 years, it'll grow into its valuation. But at that same point, there's a lot of hype around this company, but AI and general and I would not be surprised that you can get in on SpaceX at a much better price if you're just Spatian for the next year or two and you open a position opportunistically. Yeah, like odds have been on your side that this will happen.

And yeah, we're not saying that SpaceX won't turn out to be a solid company, but if you look to the data, there's a better than coin flip chance that it is much lower one, two, three, four years later. So, yeah, I think the ironic thing here is the money to be made in terms of short term over these IPOs and where retail kind of felt left out was the initial pop and price. So the 90 day holding period, unless you're just sitting there thinking, I'm going to buy the SpaceX one, I'm going to see if it pops, I'm going to sell my shares. I don't care about future ones.

But if you want to participate in future ones, you have to hold your shares for longer than 90 days. So yeah, and maybe my last closing point here before we finish off with Lou Lemon is that, look, the added bonus of waiting like a year, two years, three years is you get a whole lot more clarity on the business. Yeah. Because you see are the loss getting worse? Are they spending more and more money on AI? What exactly is happening? What's going on with Starlink? Is that really continuing to gain traction? is the launching business, the shuttle launching business,

is that actually doing better, increasing, losing less money, or is it losing more money? You'll get more clarity the longer you wait and the longer it is public. So something to keep in mind there. Yeah, I think, like right now, a lot of people are just going to want to buy this for the potential pop, like initially. I think that's kind of the main situation here.

There's probably a lot of people who want to buy it and are never going to sell it as well, which is in this situation, it's a genius product, in my opinion. But I mean, will this, will this product lead to strong returns if you participate in a bunch of them? Like, history says no, it won't. No, it'll definitely help with FOMO. So I think that's about it.

Okay, let's move on here. Just finish off Lou Lemon. Pretty disastrous quarter, must say, not good. I think the stock has recovered a little bit since they report. I'm just, yeah, it's definitely picked up a little bit. Not too much, but it went up probably around like 6, 7% since the bad quarter. So it was really a tough quarter. They saw really what people focused on. There's two things. Guidance wasn't good. And then the Americas, which includes the U.S., of course, the largest market from Lou Lemon, saw revenues drop by 3%. It was even worse

when you look at comparable sales, which saw sales decrease 5%. And I'm not used to, you know, using constant currency. I'm just using just regular currency here. And of course, constant currency factors and inflation. I'm not with these numbers. I just wanted to mention that because they do provide both. International revenue keeps being the bright spot here with 22% increase and comparable sales increasing 13%. They expect China to grow at a 20% clip in Q2 as well. So China is definitely one of the bright spot, if not the brightest spot for the company. Gross margins were down 410 basis point while operating marches were down 700 basis point, actually more than that. And that's tough because one of the stories for Lou Lemon was always that they didn't have to

discount all that much and they had really good margins, especially compared to peers in the fashion industry. And then you start looking at earnings per share. That was down 35%. Another silver lining is they bought back share is 358 million. worth of shares and who knows maybe it might be a good thing in Einstein at least they look like they're doing it at the press price so that is the good news and they open five new stores before continue anything you want to add here no i mean i guess the only thing i'll add is that there

was a brief time where erytsia actually eclipsed it in size so it was they're about the same size now which is absolutely wild to say i didn't think they would ever get there but yeah it's at Ritzie is actually pretty close to being a bigger company than Lulu Lemon right now. And that kind of, like, Ritzi has gone up in price, but that also just shows you the massive downfall because I think at one point, Lillu Lemon was like a $60 billion company, wasn't it? It was pretty close. I think so. Yeah, and now it's trading.

It's around $13 billion. Yeah. So, yeah. Significantly smaller. Wild. Yeah. The other thing, like I mentioned, that hit their price or investor confidence is they reduce their guidance by 3% for the full year. They will now have sales that will either be flat

or a slightly negative compared to 2026 as compared to 2025 for 2026. They attributed the bad quarter with two spikes of negative commentary in the media and social media on some of their production launches and some of their production launches not meeting their expectation. They're focusing on events, including a yoga event that just happened on. on the Great Wall of China. I think it had a couple of thousand people, improve efficiency and bringing products quicker to market, especially products that are resonating well with customers.

So they are looking to make that jump to market 20% faster or so, which is not a bad thing. They're also trying to offer less markdowns in order to lead customers to their full price, newer products. So hopefully that will help margins, but it may hurt the top line. We'll have to see an out. On the good side, again, on the silver lining, they still have no debt.

They have $1.5 billion in cash, and they generated $1.84 billion in free cash over the last 12 months. So it's still a very profitable business, but clearly they are in a need of turnaround, and it's trading like a turnaround play right now, trading at a forward price to earnings of $11 and price to free cash with $13. So, yeah, I mean, if you believe in the turnaround with the new management, the new CEO coming in and some of the initiatives that they've done, they do have some leeway. So it's not like they're on life support here, far from it. Like, they do have time to see this through. You just have to be betting and confident that management will be able to turn that around.

Yeah, this is a very tough industry to invest in. especially when you get to the situation where inventory builds up and again like they had mentioned like you have to mark you have to mark products down that hits your margins hard and then when people go into the stores they go to the clearance rack buy a couple year old items that are you've been forced to mark down because you don't want to carry the inventory anymore and then you you know people don't pay as much attention to the new launches and then they're not as good so yeah it i don't think there's ever been a single company in this industry that is like a buy and hold forever. Because even like I own, I own Eritzia and I know at one point this day will come for Eritzia because there's very few brands like this

that ever stand the test of time. Yeah, the only ones that really truly do and even they go through ups and downs are like the high luxury brands, I would say, yeah, high end, like really luxury type of offerings where it's almost like an

exclusive kind of thing. I think those are the only ones that can come to mind if you think of something like almost like a Rolex for example and I know there's like other fashion brands from Italy and Europe that are in that group as well so I think those are the only ones that come to mind but even those tend to get a bit cyclical because you know they're so expensive there's some cyclicality to it but if you have stuff that's more open to the masses and little lemon or Ritzie are definitely that yeah I mean it's If you ask me, like, in five years, is Eritzia still, like, in growing that quickly, in that good of a shape? Are their products resonating as much with their demographic, their target demographic?

I don't know. In 10 years, I probably, like, say, let's flip it, like a coin flip in terms of that being. Like, that's just a reality of fashion. Yeah, that's kind of the trend of it. Like, Lulu Lemon went on a pretty good run from what? it probably would have been 2016 leading up till 2023 and then it all just fell apart. And it falls apart quick as well. Because once consumers decide they don't like a brand anymore, they just don't like it.

They go shop elsewhere, which is, yeah, it's, it's nearly impossible to find a company that is just, the chart is up and to the right. It's always cliffs, mountains, in terms of, of the chart. Yeah. Yeah, I think it's almost, if you want to invest in fashion, you almost have to stay on top of the trends. Oh, yeah. And then when you start seeing signs that it's resonating not as well, the company may still, might still be having some pretty good results. But if you start seeing those signs, that's almost like, okay, even if the stock's still doing relatively well, that's usually the signal where you're like, okay, I can see on social media, it's not as present.

you know, the target demographic is just not buying this as much. Sure, the results are still doing pretty well, but I think oftentimes that's the signal. And I think Lou Lemon, I think that started happening, yeah, about like two and a half, three years ago at this point. So, yeah, right around the time of the stock was peaking is when you could have seen, like, started to see signs that the product wasn't doing as well with kind of, the millennials and younger generation. Yeah, that's, I've said my piece on the fashion industry.

That's all I got. Okay. So if you have fashion questions, go see Dan. Yeah, don't, he just makes a whole lot of money in fashion. So different things.

But this was a fun episode. Appreciate everyone listening, supporting the podcast. It was great to have you back, Dan, and we'll be back with a regular, actually a special episode on Monday. So Monday,

Make sure you tune in. So we are, we'll be unveiling the TCI podcast index. So something we did in partnership with QuestRade. And we also had Braden come in. So we'll go through the index, give a description of all the names. So make sure you tune in on Monday. And yeah, we'll be back with our regular schedule. I guess it's part of our regular schedule.

And last housekeeping here, Dan Foch and I may or may not be doing the live on Friday. We want to be doing it. But given our schedule, he should. traveling. My daughter is off from daycare. Maybe a bit difficult for us to get it done, even though there's a whole lot of macro to be discussed. So if you don't see anything on the Saturday feed, don't panic. We will be back the following week. It's just a scheduled thing that is going to be hard. We might be able to make it work. But if not, we'll just be back the following week. So thanks again for listening. And we'll be back again on Monday.

The Canadian investor podcast should not be construed as investment or financial advice. The host and guest 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.