The Canadian Investor - Meme Stock Mania Returns and Private Debt Gets Messy

Episode Date: October 23, 2025

Simon and Dan break down Canada’s latest inflation data, why core CPI remains stubbornly high, and what falling rents might mean for the Bank of Canada’s next move. They also dive into the growing turmoil in private credit, including the First Brands bankruptcy and Tricolor collapse, and what these cases reveal about risk in the shadow banking system. The episode wraps up with Beyond Meat’s shocking meme-stock comeback and a broader discussion about speculation and leverage in today’s markets. Tickers of stocks discussed: BYND, TSM, ARCC, FSK, BN, JEF, UBS, JPM, WMT, AZO, GPC, GME, AMC. Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! 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. is 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. My name is Simon Berrage. I'm here with Dan Kent. We are back for another news and earnings episode. Still a bit quiet on the earnings front, but nonetheless, there is some news, so we're going to unpack the Canadian

CPI that came in earlier this morning. We are recording this on October 21st, if anyone is wondering here. And then we'll be talking about what's happening in the private credit market, specifically first brand groups and what's surrounding that, some of the shenanigans that are being alleged here. Pretty interesting. Took me a couple hours to do that segment just to fully wrap my head around it. So it should be fun. And then we'll also talk about Beyond Meat, which is just skyrocketing as the next meme stock it looks like it'll be fun to listen to you because I haven't really been paying attention to that one and then we should have time to talk about Taiwan Semiconductor so Dan let's get started with CPI and yeah how it's looking in terms of

inflation at least official inflation metrics yeah so it looks like it's creeping back up a bit so the headline number came in at 2.4% excluding gasoline it came in at 2.6%. So I think a lot of declining gas prices are kind of helping out inflation right now. I mean, I even noticed in Calgary like last week, I think we got down to like a dollar seven. It's pretty crazy how cheap fuel is right now. This is around 20 basis points higher than most economists have predicted. I think 2.2% was kind of the consensus. So we're a bit higher there. When we look to the core numbers, however, I mean, it's been sticky now for, I mean, the better part of six months. CPI Common came in at 2.7% CPI median at 3.2 and CPI trim at 3.1. Trim would be they exclude kind of the major components. Yeah, like the outliers on the outside, the most extreme increases and decreases. Median would be the middle middle level number and then and then common. We've never really found a definitive definition for that one. But I mean, the core levels still remain elevated. You can see in the chart here. I mean, we had.

trim was 3.1 in April. It's 3.1 today. Median was 3.2 in April. It's 3.2 today. And Common is actually gone up 2.5 to 2.7%. This is, again, also with gas prices kind of in the gutter. They fell 4.1% year over year. But they said this was a lower decline than it was last month, a lower year over a year decline. Food prices saw their biggest increase since April of 2024. This would be, I believe they mentioned stay at home food, so it's not like restaurants or dining or anything, but that went up 4%. So that's the largest increase in, well, what would that be 18 months now? Shelter seems to have finally normalized a bid. It was only up 2.6%. I remember, I mean, a few years ago, this was through the roof because of those increasing mortgage costs, things like that,

increasing rent. I know they're kind of figuring out, a lot of the supply side here at least in terms of rent in terms of you know houses available to rent so rent prices are coming down quite a bit here but you know despite higher inflation that they mentioned that there's still a 75% chance at the bank of canada cuts rates next meeting which is down from 87% before the meeting so there's a little bit you know people are kind of pricing in the fact that maybe they'll stay the same after this print but i mean the data kind of points towards the fact that, you know, more aggressive cutting might not be the best idea in terms of inflation, but, I mean, from an economic standpoint, I guess they need it. But

really, I mean, we're not anywhere close to that 2% target. I mean, at least, you know, the underlying numbers, which they told us to pay attention to, which is that, you know, the trim, the median and the common. But we're still probably on pace to go, you know, maybe a cut or two lower by the end of the year. Yeah, and looking, I'm sharing here for the Canada's rental market. So data from rentals.ca for October 2025, the rental report. So for the most part, rents seem to be declining. And this is a bit more real time than what's being used, a methodology being used by CPI.

So there is at least maybe some argument that inflation headline CPI could be a bit lower because rents are overstating it. I think it was around 2% or something. Shelter, yeah, 2.6%. So it is something to keep in mind, but it is still interesting looking at the official data, whether it's headline or core, that the Bank of Canada seems pretty focused on lowering rates. They're clearly more shifted on supporting the economy than getting inflation in check. And it's interesting because their mandate is, in air quote, price stability. I always laugh when I say that 2% increase is not price stability in my opinion, but that's how they define it. But I think it just goes to show that even if their mandate is that, in reality, though, if they have to

step in and support the economy, that's what they'll try to do. Yeah. And I mean, I guess if stability means, you know, consistent pricing increases, I guess, like 3% seems to be, yeah, stable increases. I I mean, 3% seems to be the stable increase, obviously with rents coming down and probably continuing to come down. I mean, in the case of, you know, shelter continuing to decline and say we get a bump in gas prices, they might kind of offset each other. But that is the one concerning thing. And you've mentioned this a few times before, like, what of energy, like, what of oil

goes back up? And I mean, gas prices increase, which effectively hits everything. Like, it'll hit food prices. It'll hit, it can, it'll hit everything you think. of just because of, you know, it's, it's used everywhere. Then you could get a situation where inflation could creep back up to that 4% range from, you know, the 3.2 or whatever it may be that we're seeing now. So that'll be interesting because it's still sticky at 3%.

And, you know, gasoline, at least where I'm at is near a dollar. And, you know, oil is what, it might be sub 60 now or at least around there. No, no, exactly. So interesting to keep an eye on. And yeah, oil prices or energy prices are. definitely something, I think it's a wildcard here. It could take a while, it could take a year or two, but I've said it time and time again, these, ever since 2014, there's been a lack of investment in the space, obviously in Canada. The previous government was not very supportive. The new

Kearney liberal government, I think, is maybe slightly more supportive, but not all that much in terms of the oil and gas sector, energy in general, outside of renewable energy, and even then renewable, there's a lot of red tape to get those deployed. So if these prices start going up, a couple of years down the line, you could really start seeing an inflation problem happening. So we'll have to see. Don't want to send the alarm. In this kind of market, I like having some cash on the sidelines. It gives me the flexibility to jump on opportunities when the right stock goes on sale. But just because the cash is waiting, it doesn't mean it shouldn't be working for me. That's why I use EQ Bank. They offer some of the best interest rate among Canadian banks,

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she went down so easily at bedtime. That gave my wife and I the chance to finally unwind in the hot tub and watch a sunset together. Having a cozy place to come back to made the whole trip feel effortless and special. It also got us thinking about our own place. If someone else's home could be such a perfect fit for us, maybe ours could be for another family too. Hosting our home on Airbnb would let them make their own memories in our beautiful neighborhood while giving us a little extra money to put towards our next trip. And the nice thing is the flexibility hosting provides

so we can decide when it makes sense to host our home. Your home might be worth more than you think. Find out how much at Airbnb.ca slash host. Let's move on here. So I think you weren't really following this situation all that much. I have read it. It's crazy. Yeah, so it's pretty wild.

So I'll try to, I really try to make it as easy as possible to understand here because I know not everyone has either accounting backgrounds or a lot of experience with accounting, whether it's self-thought or learn in school, whatever it is. So you may have seen it in some headlines. I know the mainstream media hasn't really talked about it all that much, CNBC a little bit, but it's been happening in the private credit world. And private credit just means that it's lending that's done outside the traditional banking system. So ever since the 2008 financial crisis, you saw banking regulations, not only in the U.S., but around the world, we get really tightened up. And one of the perverse incentive that created was that there were still companies, institutions that needed financing that may not have qualified under these new rules. because there were higher capital requirements, for example, for banks, so they had more restrictive lending. And when that happens, well, it goes into an alternative system. It's also called

shadow banking. So if you ever hear that, that's what it's called. So it's something, if you've been listening to the podcast for a while, I've been pretty critical of private credit and also private equity because you hear this all the time. And I, like, I think it's a whole lot of BS. You hear this marketing slogan, democratization of investing, a word I really struggle with in the interview that is coming up with Ben Felix. Oh man, I struggle with that one when we talked about that.

I mean, even I would, yeah. Democratization. Yeah, exactly. So anyways, being French, it's even harder for me. But whenever I hear this, people know the term now, so they've heard it.

Whenever I hear this, I honestly alarm bells go off and actually Ben just agree with me. me. So to me, when you start hearing this from Wall Street or Bay Street, it's, they're trying to push something onto retail. And whether it's to get retail to be the bagholders, because they know that this is not, the stuff there is not great or it's coming to the end and there's a lot of lack of better word shit in this space. They're trying to essentially offload that to retail or they're trying to get high fees from retail or a combination of the two. That's usually, like, to me, these are usually the big, the two big things.

It's not because they're doing it and the goodness of their hearts because they think it's a phenomenal investment for retail investors. I mean, there's a reason they're pushing that. It's because in a lot of cases, especially private equity when you think about it, they're trying, they're having trouble exiting these investments that these funds made. And institutional investors are getting less and less interested in these kind of investments. So they have to find someone else that's interested into buying these. It sucks, but that's just a reality. That's what it is. Yeah, they need some exit liquidity.

I mean, obviously, if there's big money to be made here, they're going to make it themselves, you know, like when it's being pushed out to retail, I mean, they're either finding there's not as much money in it as there was previously. So they need to soak retail for fees in order to get money or as you had mentioned, like, you know, they're looking for ways to. exit because obviously private equity there's not a lot of liquidity in that space and i mean now we have like brokerages here in canada coming up with these you know private credit or private equity situations for the most part people are just buying them they have no idea what they're actually oh yeah i know like absolutely no idea and they're locked up yeah like you have no idea what you're putting your money into when it comes to these funds i mean especially you know it's not to criticize like say a well simple or anything because I mean they're just offering the product and people are buying it but when you when you buy that I mean you really don't know what you're getting you're just oh exactly yeah it's it's crazy and right now there's a lot like people can do some research about private equity like liquidity right now is very difficult for these funds it is very difficult it's you know it's starting to come out more and more it's something we've talked about for the last couple of years that there were all

signs of this happening and now private credit which is a pretty vast market now there are some little signs that there may be stuff happening there that could be a worrying i don't want to send the alarm bells because obviously it's just going to be two examples here but the first one and the one will focus mostly on and there is another one that made the news here is first brands group which is a u.s auto parts company they sell auto parts the companies like walmart auto zone napa auto parts over time they grew by acquisition using a lot of debt to do so things became so dire that furs brand grew so fg ended up filing for bankruptcy in late september so what happened and what led to this well like i said first brand grew a lot by acquisitions and to do so it finance a lot with

debt in this case that high debt level created a need for liquidity because you know you have high debt you have to you know pay interest on that debt or the loans come due you have to pay those loans back or refinance them if you can refinance them and as an auto parts company they sell parts their client but get paid later i don't know the exact terms so but you know it's pretty standard right when you have a business even for us right for the advertising for sponsors like usually we'll do you know payment within 30 days so usually you you render a service and you don't receive or you sell an item or items, you don't receive the payments right away. So I just wanted to explain that for those who are not as familiar with just how that side of businesses work. I don't know the

exact term, but let's say, and I'll use Walmart as an example here, let's say Walmart had 60 days to pay for his brands after the parts were received. The problem is first brand needed the cash now, not in 60 days. So he needed the liquidity. It just couldn't wait 60 days. So first brand then turns around, goes to a private credit lender and says, hey, we got these accounts receivable from reputable companies like Walmart. Can you give us cash now in exchange for the rights to those accounts receivable from Walmart? And the private lender says, okay, that sounds like a pretty good deal to me, right? If I'll give you, but I am taking some risk and I'm waiting 60 days, so I'm giving you the money up front. So what I'll do is, let's say you have a million

dollars in accounts receivable, let's say FERS Brand has that. And in a million dollars accounts receivable from Walmart, it gives that one million accounts receivable to the private credit lender in exchange for 950k in cash right now. And then the credit lender takes on the risk, but in exchange it collects the $1 million in 60 days and obviously pockets the difference in profit. So pretty, you know, relatively straightforward, right? I mean, it's a pay. It's a pay. It's a payday loan effectively. Like, you know those places where you go and take your check in like three days early and they'll give you your check up front, but they take like a third of it. Yeah, that's pretty much what this is. Yeah. The difference is that it's hundreds of millions

of dollars. So it's not a $1,200 paycheck. It's millions of dollars. Yeah. Exactly. And I'll keep it just an easy example. And at the end, I will mention the extent of the numbers here. So in this case, there were a few private credit entities that said, sure, we'll do that. Now, there are two ways to do this. You can do it on the balance sheet, which is more transparent, of course, or of the balance sheet, which is not illegal, just to be clear, but is not as transparent. So going back to that $1 million example, if you do it on the balance sheet, you keep the accounts receivable as an asset. You get that $950K from that lender in cash as well, but you also now have a lot of the liability of $950K on your balance sheet as secured debt,

secured against your accounts receivable. The liability is short term since it will be repaid once the accounts receivable payments are made by the customers and, in this case, in the example, Walmart. The 50K is written off as a loss for Furs Brands. Furs Brands did this off balance sheet, however. So again, it's not as transparent. And going back to the $1 million. example in this situation, First Brand actually sells the $1 million accounts receivable to the

private lender and gets $950k in cash. The private lenders now owns the $1 million in accounts receivable as an asset, and First Brand now has the cash on its balance sheet. Fursbrand no longer has the accounts receivable as an asset since they now belong to the private lender. Fursbrand will take $50K hit on the loss on sale and the deal is done. so relatively straightforward off balance sheet unless there is unless here that's a but there's a big but and that's where things get interesting here the servicing continues to be done by first brand so the servicing means that first brand would continue collecting the money the accounts receivable from Walmart that one million dollar example even though they sold off the accounts receivable to

the private lender, and the private lender now owns them. So you think, of course, if you're a smart creditor, you do the servicing yourself because why would you want to take the extra risk of trusting Fursbrand to essentially collect the money and remit it to you afterwards? Because you're essentially doing that. It's your asset, so now you take on the ownership and collecting it. But that's not what happened, it appears that Fursbrand continued to service the accounts receivable they had sold to the private lenders under the agreement. They were supposed to send that money as soon as it was collected to the private lenders. However, the allegations against them now, and they filed for bankruptcy in late September, and now there's some investigations being done, but the allegation

is that they would have done that but stopped remitting the payments at some point. And now that's really risky for private lenders, of course, and it's taking on additional layer of risk by trusting them to first brands to actually, you know, collect the money and remit it to them. Why that they're taking on that additional layers of risk? I think that's pretty reckless. There may have been reasons to do it. I mean, the private credit world has really grown massively. There were a lot of new players. There may have been competition involved. or may have been multiple private credit lenders willing to do this kind of arrangement with them. I'm not sure, but I find it quite risky, especially since some of these private lenders are, you know,

they portray themselves as being super sophisticated to me that. I don't know. It's an additional layer. You're taking third party risk by doing that. And now the allegation against first rent is that they stop making those payments, but also sold other private. credit to other private credit lenders, the same accounts receivable. So remember that $1 million example. Let's say I'm FERS Brands and Dan is a private credit lender and let's say

Braden's another one. So I would have taken that $1 million and sold it to you and the other one but told you both that I'll do the servicing and just send you the money. So they would have sold the same accounts receivable off the books to multiple private Lenders, which I'm no expert, but I believe that would be considered fraud if they did that. So that, that to me does, does smell like fraud. And if it smells like fraud and quacks like fraud, then it's probably fraud. Yeah, I mean, I are allegation.

Oh, so it's not. Yeah, because like, to me, I didn't even know that you could do this type of stuff off the balance sheet. Because if it's on the balance sheet, it's very easy to know that they sold the receivables. So I didn't even think you could do this. So the reason why these allegations are, my inkling, there's a good chance they're true, is that the scale of this. So over $11 billion in total liabilities were disclosed in court documents when they filed for bankruptcy. Of that, it's been reported that roughly $6.1 billion was traditional on balance sheet debt, but about $2.3 billion was tied to off balance sheet receivables financing now under. investigation for potential irregularities.

So that's where, you know, that's where the allegation I'm saying, like, there's definitely smoke somewhere there because, yeah, there seems like I've read a lot of articles about it and there seems to be some credible, like, suspicion that they would have done some kind, like, these kind of shenanigans off balance sheets. And it's not the fact that they sold the accounts receivable. It's selling the same accounts receivable to multiple. parties. And keeping the, you know, maintaining, getting the payments yourself instead of of, you know, deferring the servicing. Like they effectively got all these private credit

companies to fall for this numerous times, which is crazy. I mean, how would you, if you have a company that's coming to you and they don't have the liquidity to even wait on a net 60 payment and you have to loan the money and you leave the responsibility. You're probably getting a good inch. Like, you're probably getting a good spread on it. So I think that's where these private credit lenders probably got a pretty good spread on it. So that one million example, again, the one million is just an example to make it easier. Maybe they were paying 800K up front because they were that desperate or something like that. So they're taking more risk, sure, but they're take on that. And obviously, that was probably legal contracts behind that. But if the company goes bankrupt,

like a legal contract is not really worth that much anymore. Anyway, so investigators and creditors believe that some invoices may have been pledged or sold more than once, like I mentioned, creating a massive hole in expected cash flows. There are some major private credit players that are exposed, not to a major extent, so they're usually funds, so Jeffrey's Financial Group, apparently has about $750 million of exposure, UBS O'Connor's Fund, around $500 million, and the U.S. Department of Justice, bankruptcy, Wajog, has called for an independent existence. examiner to probe for potential fraud. And now that's not the only case in private credit. There's also the case of TriColor. Are you familiar with that one then? No.

It's also in the car space. This one is in the used car dealership space. And I'll keep this one short, but it's, TriColor was a used car dealership that also lent money to buyers with poor credit. I think a lot of them were also even undocumented immigrants that couldn't get loans anywhere else and they bundled those loans into investment products that has some recollection of the GFC with those really bad mortgage loans like those subprime loans but anyways car loans car loans exactly and as the economy slowed and the borrowing cost rose molar customers stopped

making payments and the company's finances fell apart and on top of that there are allegation it pledged the same loans to multiple lenders again so again these kind of shenanigans or, like, you know, potential fraud happening here. I know there are, like, two companies. I don't know to the extent here, like the sheer side, but Tricolor ended up filing for bankruptcy. And some big lenders, including J.P. Morgan, took some losses linked to it. Obviously, J.P. Morgan is massive.

But those two examples are showing that there might be some weird stuff happening in the private credit space. And the private credit space, just to give people an idea, it's hard. to know exactly how big it is. Again, it's very opaque. But the estimation is that's probably around $2 trillion, give or take a few hundred billion dollars, you know, just a few hundred billion here and there. And what this is showing, in my view, and then I'll be interested to hear what you have to say, but there could be more stress beneath the surface. This could be just kind of the tip of the iceberg. And it's very opaque, like I said, compared to traditional bank lending. So it's possible these are just kind of two-offs and they're just related they're just kind of in the car industry

both of them and not much but we have seen this kind of sub the gfc at the beginning was just like okay more insulated you saw obviously you saw the fed you saw like the big bank saying oh not everything's fine there's no like it's just a small pocket of subprime mortgage it shouldn't have any issues and then obviously we saw what happened with the great financial crisis. I'm not saying that this is the case here. I'm just saying that what else are they going to say that it's nothing major? They don't want to panic people. Whether it is or isn't, I guess it's something time will tell. But I mean, if it is just a tip of the iceberg, I mean, it could definitely be a systemic risk here. If a lot, if a decent portion doesn't have to be the majority,

but a decent portion of these private credit loans are just actually, they're seeing really rising default rates. It could create some big issues here. And you're also already seeing that in the public markets with BDC, so business development companies. So these companies are publicly listed and use their capital to provide private credit to small and medium businesses. Some examples here are ERIS Capital, ticker ARCCC, FSKKKR Capital, FSK,

so it's a division or I think it's a joint vesture between KKR and another private company. But essentially you're seeing these companies, these BDC that are definitely trending down. So there's some pressure on these companies right now in terms of their stock price. So it could be a sign of stress. It's hard to know. But I mean, at the end of the day, I think I'll just finish to say like what I said earlier is just be very careful when these new type of investments that are like alternative investments and it's making these type of investment more accessible to retail investors compared to the past where it was always institution.

Something, I don't know, something doesn't smell right here, whether it's more isolated or not, we'll have to see, but it's pretty wild that this is happening. Well, yeah, and look at Brookfield and Oak Tree. Yeah, yeah, that's what we were talking about. And I'm like, man, like, so Oak Tree has, you know, and Brookfield, they definitely have a hand in private credit. Yeah. Like they, they do private credit and private equity. And that timing, when I started digging into this, I'm like, that timing is interesting to say the least.

Well, and keep of mind, it wasn't Brookfield who even wanted to do it. It was Oak Tree, they had put options that they could sell, like they could effectively sell the rest of their steak. and back it was either in 2022 or 2023 Brookfield like they're like yeah we're partners like I highly doubt they'll ever exercise those options and sell their remaining stake

and then this comes around and yeah they're cashing out so I mean yeah I don't know I don't know and the timing yeah it's hard to say but that is curious timing I just say that I mean Brookfield is diverse enough that yeah it's not like it would cause a no material impact but

I mean, it's, it's weird that, you know, you see that and then you see all of this. And it's, yeah, I mean, I, I don't touch that market outside of, you know, publicly traded equities that I own that are involved in the space. But, yeah. Like, and they would know, like an old tree and Brookfield, like, if there is starting to be signs of stress and private credit, like they would be seeing that. They would say it. I don't. They would never say it. They would never say it.

But they definitely would see it. And a company as big as Brookfield, they probably would see. that more as an opportunity, though they'd probably try to grow their portfolio and just pick up like loans on the cheap. Yeah. Because at some point, even if it's not a great loan, you can probably, if it's just, you know, 20, 30 cents on the dollar, you can still make some profits by picking up what's kind of seen as a bad loan.

But if you have enough expected recovery, even if you pay 20 cents on the dollar for it, but you expect to recover 40 cents, it's a pretty good investment. Yeah. I mean, I guess the final question I would have with this is which one, which company gets the receivables? Would they split it evenly or? I have no idea, yeah. Like, I mean, I think I remember reading and this is just on memories.

So I think some of these funds that had exposure have been selling their stakes like pennies on the dollar at a huge discount. Because when you start going into bankruptcy, it's essentially like vultures, right? Like are just pecking at the carcass trying to. It's true, right? They're just trying to get whatever is less. I think don't like quote me on that specifically. But I remember reading that a lot of these larger companies that had some exposure through their funds.

And obviously they're quite large companies that they started selling off some of those assets for pennies on the dollars to try and recoup something out of them. because they know they probably won't get much out of the bankruptcy proceedings. Crazy. Yeah, I mean, this industry is so, like, there's just not a lot of, I guess you could say, visibility. I mean, when you buy, you know, like I said, when you go on a brokerage and, you know, buy a private equity fund, like, you're not seeing any of this. You don't know, you don't really know what you're buying, which is why I don't really get

involved with it too much. Yeah. And it's, it was always funny to me because you'd have supporters of private credit saying, like all these companies are so smart like they're the smartest people in the room and blah blah blah like okay like i'm sure there's some really good ones there don't get me wrong but when the space has grown so much and you get so many you entrance in there's going to be some that are not that good at it and there's going to be just more entities fighting for the same thing yeah so clearly they may get like less attractive term to provide these like in some

cases like we were seeing it, these like really risky loans to, to other companies. So that's why I'm always a bit skeptical when I hear that argument because also, I mean, we saw what happened they're in the great financial crisis. You know, you got had the companies that were supposedly the smartest people running them that just went under. So because they over exposed themselves, they got overconfident, whatever it is. So it is, anyway, something will keep an eye on for, for you listeners as there's more development on it. In this kind of market, I like having some cash on the sidelines. It gives me the flexibility to jump on opportunities when the right stock goes on sale.

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Yeah. Beyond meat soaring. Yeah. Oh, the rise of the meme stocks of all companies beyond meat, of course. Yeah. I mean, if you ever wanted, like, you know, we had spoke a lot about like the market speculation. I mean, this is 2021-esque.

I mean, you can think of like AMC and GameStop that were effectively, like just poorly managed companies that, you know, retail investors just, I mean, launched effectively. I mean, at one point, Beyond Meat, and I didn't actually know this because I didn't follow Beyond Meat very much, but it was, at one point, it was a $14 billion company and it's now, it's crazy. And they've, yeah, remember, it was, it was a $14 billion company and they have never reported positive operating cash flow since they, it was, it was trading at the peak around $200 and, yeah, 234 a share. I'm sure there's been share dilution since. Well, there's a whole lot more now. Yeah, and there's a whole lot more now. But man, it's trading at $2.46 and it's up 67% today.

And it was up 133% yesterday. So, I mean, yeah, I was saying like the companies, like it's market cap when I check yesterday was $115 million. So it's probably like $150 some now. Oh, yeah, $167 million. So it's gone up quite a bit. And I mean, you. hop on a lot of social media groups and you're kind of seeing similar commentary, as you heard in

2021 with companies like GameStop. I mean, how they're not bad companies, shorts are kind of keeping, you know, these companies down. And I mean, beyond me does have heavy, heavy short interest. I think it's nearly 70%. So you're seeing massive short squeezes here. And I mean, this is just a company that is in horrific shape, which is effectively, interestingly enough, it's in such terrible shape that this is what it's launching the share price. So they have around 300 million in revenue and around $100 million in losses in terms of operating cash flow. And as I had mentioned, like this company has never reported positive operating cash flow in any fiscal year. So how they got to $14 billion is just beyond me. I mean, their revenue has been declining

every year since 2021. Losses in addition to debt just keep on mounting. And so what ended up happening was a few days ago the company exchanged some of its i believe it was a few days ago it was early october maybe even but they exchanged a bunch of their 2027 notes debt effectively for 20 30 notes so exchangeable notes so like really the debtors like the the people loaning them this money can exchange some of that debt for shares so effectively it had a bunch of convertible notes maturing this year at zero percent and it had to reissue reissue those by extending the maturity and offering interest on the notes. So instead of all that money coming to this year, they went to the lenders and said, hey, you know, we'll give you some shares right

now, we'll pay some interest on those convertible notes and we'll kind of kick the can down to 2030. So this buys them a bit of time and this is kind of what launched the share price. I mean, so effectively what they're doing, they're extending their debt to make it as lucrative as possible for lenders to keep the debt all while destroying shareholder value because I think they're going to issue something like 300 million plus shares. And I mean, imagine holding some of Beyondmeat's debt now. You're likely not going to get paid because the company has no money to pay you. You don't want shares of a useless company. So now you can kind of kick that can down to 2030, get 7% interest on the debt, maybe recoup some money, get some shares and the potential to,

you know convert them maybe to some shares in 2030 but I mean there's no reason for the for the I guess the the debt holders to say no so I mean it was kind of a no brainer to say yes because they probably weren't getting paid if you know yeah if those notes game mature today so this is kind of what's launching the stock I think this morning it went up another 70% because they signed some like deal with Walmart but I mean this is pure meme stock just game stock stop type situation. Yeah, I mean, it's, it changed a little bit, so it's up 75%. Oh, so it keeps going up.

80%. Yeah. Yeah, I mean, like I had said, I had, I had been looking at some options on this stock, like last week, and I was going to buy a bunch, but I just, I can't do it. I just, I couldn't do it. And now it's, yeah, it's up. I mean, these are just, they're pure gambling. Like, I mean, it just, like, I mostly wanted to bring it up just because, again, it's just, a lot of this stuff was happening in, in 2021.

Yeah, and you told me the amounts you were considering, and I know it's just a tiny portion for you, but the, that's what dangerous with this is, like, people will see this. And then the stock has gone up, what, like in five days? I don't know how much. It's trying to, yeah, 236% roughly in five days. Yeah. So they see that. And then they're like, oh, my God, I just got a, you know. FOMO kicks in.

I got to get on. Like you saw a lot of GME people or GME. Well, people are investor or not investors like gamblers pretty much that hopped on on the bandwagon for GME and they gone on pretty late. And then they just ended up like just sitting on massive losses after that. And they put way too much money. Yeah. And they could afford to lose in the hopes that they could just make it big.

again, I guess be set for life. Like, I'm not sure, but you just have to be careful. Like for this kind of stuff, if you want to gamble, you know, a little bit with a tiny portion of your money and you can afford to lose it, have at it. I mean, it's your money, your adults, right? Like, you can do whatever you want. But where it gets really dangerous is when you get people that put money that they cannot afford to lose. And I think, unfortunately, I think that's the reality of our markets today is a lot of people feel behind and they feel a bit desperate that they'll never get ahead in life. And that's, I guess, the way that, the only way they see that they can get ahead is taking these massive gambles.

And I guess, you know, a few for a few, it'll work. And the rest will just get wrecked. Yeah. Like I was, I was kind of debating, toying around with like a couple thousand. on some call options, whereas a lot of people are betting the farm on this effectively. Like, you can, you can kind of see it on social media networks like Reddit, things like that. I mean, there's a lot of popularity. And there's, there's kind of like a narrative that this company is really not as bad as it seems. And it's kind of the same situation as

before. I mean, this company is in horrible, horrible financial shape. I mean, they've, they've yet to, they've yet to post a profit for a very, very long time. And the stock's up 420% since October 16th. So like it's just pure gambling. They ever post a profit? No, like I looked, well, as I mentioned like they've had negative negative cash flow for pretty much I think white charts had data back to 2017. They've never.

I mean, I think their best year they did like negative 20 million and in operating cash flow. Yeah, negative 33 day in back in 2017. Yeah. So, uh, yeah, that's a great business. Yeah. That's a great. Yeah. I mean, it's, yeah, it's, this is just D-Gen gambling.

I mean, the stock, you could see the stock go back to 50 cents in a day, like stuff like this does happen. Yeah, no, exactly. And I guess it's a good point to wrap it up here. We had a few other segments, but I guess mine went a bit long with private credit. I get pretty passionate when I see Wall Street and Bay Street do kind of push these shitty products on retail investors and so that took a little longer but there was it's not only beyond me right we texted what was it like a week and a half two weeks ago when bitcoin had like a pretty

sharp correction and people levered up and just got wiped out with shit coins or bitcoin using too much leverage and look i mean at the end of the day when you take on risk like that like leverage goes both ways right it's not this it gets a little different than this where people just bet on this going up with or without leverage and it's it's a meme stock but at the end of the day to me it's still gambling and it's still playing with fire and people can look it up look up reddit people lost all their savings 50 100k 150k i think i remember one we were talking about where this guy had had bitcoin since like 2020 or something like that 27 so he bought in i guess at the Bullmark in 2017, peaked at 17,000 USD, but obviously was doing quite well, even if he bought

at the peak back then, but decided to use leverage. And I think he had like probably 150K or something like that, decided to use leverage and got pretty much wiped out. Even though he knew better, he knew that I've worked out for him to just hold and not do anything crazy, just dollar cost average and this one moment of getting too greedy and got wiped out. Yeah, because I think there's no margin calls in that 10x like crypto leverage. Like as soon as you hit your point, you just get liquidated. Yeah, whereas I'm not sure. I think you can probably, I have a buddy of mine who's dabbled a lot in margin.

He's done quite well over time just because he got like he bought Ethereum when it was, I think like $2530 each US so yeah so he bought like you loaded up on that I think it must have been like 23 14 something like that 15 and so he's always done a little bit of leverage tradings and stuff and I think I remember him telling me that usually what he would do is he would have stable coins in US dollars and he would be able to top up his account if it fell too quickly but he had to stay on top of it really like so if happens like overnight you're sleeping and you're not doing it then you can get wiped out if the platform has a glitch you can get wiped out you can do it like in a decentralized fashion too

but again there could be i guess some glitches it's not something i'm super familiar with so i'm just kind of going on what he he told me but that's the essence is like he would pair use leverage pair stable coins with another crypto and that's how like i don't know don't fully understand it it was just it's not something i could fully understand so i just i figured i would never touch dad yeah because yeah it was beyond my i mean i mean i probably could have understood it if i really wanted to it just said i'd rather spend my energy learning other stuff yeah i mean just to give you an idea or maybe the list there's an idea how how crazy something like 10x leverage is i mean if you have a hundred dollars they'll give you let's say nine hundred dollars you have a thousand

invested, but if whatever you own drops 10%, I mean, your stake is 100% gone and and they just, they take their $900 back and you're clean. So, I mean, you've lost 100% on a 10% drop. I mean, obviously on the flip side, you know, you're earning much more, but I mean, it's, it's crazy. There's a reason why like brokerages, like equity brokerages, they will only leverage you what? It's like two to one max.

Whereas in the crypto space, you can go. 10, 20, like, it's crazy. Yeah, well, during the last crypto market, I think you could do like, like, basically like 99. Oh. So 1% drop and crypto, and that's why like crypto is really volatile. So even a 10% drop is not like, you know, it's not that significant. I can happen in 15 minutes. Especially when you're looking at alternative coins that are not Bitcoin, like they're

even more volatile and Bitcoin is volatile to begin with. Maybe it's just a caution, obviously, everyone listening. You know, obviously if you're investing in stuff, your adults, it's, you know, do your own due diligence. It's not investment advice. If you want to gamble on some of these things, that's fine. Personally, if I want to gamble, I'll go to the casino for the most part. I gamble and put some money on a sports game. Maybe I'll put some money on the Blue Jays.

Who knows? But, yeah, that's kind of how I see it. And I just, I always gamble within my means. But I think it's a good place to wrap it up. Thanks, everyone for listening. We appreciate all the support for those interest in, join TCI.com. We've been posting a short clip on YouTube every week. So if you want to see us talking, it's like kind of a condensed, cleaned up version of a segment

where we clean up our filler words and stuff like that. It's usually five to ten minutes. So if you're interested, we'll put one on YouTube. Bear with us. We figured out how to improve the resolution. It was something tied to both of our camera. There's some limiters that are built in. We have some really good cameras, and we couldn't figure out why it was not letting us record in 1080p or greater.

And so we figured that out, but we have some pre-recorded content for the next few weeks. But probably by mid-November, you'll start seeing some 1080p and probably some 4K content on YouTube. So even better resolution. So just follow us. You have our YouTube page in the description. But if not, we will be back next Monday. actually next Monday it will be the episode with Ben Felix and I where I interview him. So our schedule, we might not be doing as much news and earnings. Keep that in mind because Dan is

on Baby's Watch right now. So I think we will. And I'm also traveling next week. So don't be surprised if either we don't do the news and earnings and there's just regular episodes in that place, some pre-recorded content or the news and earnings maybe are on a Monday instead of a Thursday. Things might switch a little bit for the next month or so, but it will still be fresh new content. So hopefully you enjoy it. Thanks again for listening, and we will be back 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.