The Canadian Investor - Rogers Bets Big on Sports as Ottawa Invests $400M in Teck Resources

Episode Date: July 9, 2026

In this episode of The Canadian Investor Podcast, we break down Rogers’ move to take full control of MLSE and what the rising valuation of professional sports franchises says about scarcity, live sports, and media rights. We also look at the federal government’s investment agreement with Teck Resources and why critical minerals are becoming a national security priority. We then discuss Microsoft’s latest round of layoffs, the paradox of AI-driven growth alongside continued job cuts, and whether big tech is reallocating too aggressively toward AI infrastructure. We also explain the mini-tender offer involving Sun Life, why these offers can be problematic for retail investors, and what shareholders should watch for. Finally, we cover Strategy’s decision to sell Bitcoin despite Michael Saylor’s long-standing stance, and Nike’s latest earnings, where the headline numbers looked better than the underlying turnaround story. Tickers discussed: RCI.B.TO, BCE.TO, TECK-B.TO, MSFT, SLF.TO, MSTR, NKE 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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Welcome back to the Canadian Investor Podcast. I'm back with Dan Kent. We are back from vacation, even though may not have noticed because we did a lot of content beforehand. But it's been a bit slower on the news and earnings front. I think it'll start picking up next week. But we still have some fun stuff to talk about. So the first on the Slade Rogers to essentially own 100% of MLSC, so they'll be buying the rest of the stake that they did not have into that. We'll talk about the Canadian government investing in tech resources.

That's an interesting twist and kind of follows what, uh, we've been saying for quite some time about the Canadian government and the Canada Strong Fund and there's also the Canada Critical Mineral Accelerator. All of these things kind of working together for more emphasis and on national security. So we'll talk a little bit about this. We'll talk about some layoffs that were announced by Microsoft. Then a mini tender offer and solicited mini tender offer for Sunlife. So make sure you listen to that if you are a Sunlight.

shareholder, although I think it'll be helpful for a lot of Canadian investor because these are more common than people might think. Micro Strategy selling Bitcoin, a little bit of trouble with micro strategy. We'll talk about that. And we'll finish with Nike earnings. So should be a fun one ahead. So Dan, let's get started here with Rogers to own 100% of MLSC. So this is a big piece of news for a Toronto sports fan, but I'd say like sports fans in Canada just as a whole. It kind of continues to what they had built on quite, I think a couple of years ago when they bought the BCE stake. So back then, Rogers agreed to buy BCE's 37.5% stake for 4.7 billion, which valued the team at 12.5 billion. Well, on Monday, July 6th, Roger announced it.

will be buying the remaining 25 steak it did not own in MLSC from Kilmer Sports, which is by, I think it's owned by Tannenbaum, right? So Kilmer Sports for 4.35 billion Canadian. These are all numbers in Canadian dollars. That implies a 17.4 billion valuation for MLSC. So that includes the leaves, the Marleys, the Raptors, Toronto FC, the Argonauts. So definitely a good, a really strong portfolio of well Toronto based team but obviously Toronto being the largest city of Canada these are

pretty highly valued assets and the price that they are paying represents a 39% increase in the value of MLSC in less than two years versus the price that they paid for BCE because what they agreed to pay for

BC's stake was in September 2024. The transaction closed a bit later but still So you have less than two-year time frame, 39% increase pretty well. And I remember at the time we talked about it and some BCE Bulls said that BCE B.C. Bowles said that it was smart because MLSC wasn't really producing cash flow and was just sitting as an investment on their balance sheet. And since it was a minority investment, that's not exactly wrong.

But I think what they were missing is just a scarcity of professional sports league. These leagues are close clubs. and even though they do not tend to, they tend to expand, so do some expansions over time, they don't happen very often, and these teams also do not come up for sale very often. So there's scarce resources, and make sure you tune in for our Monday episode, because we actually have a full segment. We'll look, and since 2012, the price increases between essentially for the big four leagues in North America, so NHL, MLB, NBA, and NFL.

and just see whether they're good investments or not. So make sure you tune in for that. But before I continue, Dan, any thoughts on this? I know you are a sports fan, especially Oilers fan. So I'm curious what you have to say. Yeah, I mean, Rogers getting big into sports. I mean, they have the naming rights. I'm pretty sure to Vancouver's Arena as well.

I think it's called Rogers Place. Yeah, I think you're right. Yeah. Or is that the Edmonton one? I can't remember. But they have, they have Edmontons. No, you're an Edmonton fan. Rogers Place is Edmonton.

Okay, take back what I said. Dan is not a hardcore Oilers fan. Yeah. I had season tickets for a few years, too, so that's pretty embarrassing. But I can't remember the name of the Vancouver one, but they have naming rights on a couple stadiums. Now they are going all in on MLSC. I think it's a pretty good buy. Rogers Place is in Edmonton.

Yeah. Rogers Stadium is in Vancouver. I can't remember the Vancouver one. But, yeah, I mean, they're going hard on sports. Arena. Arena. There we go. There you go.

But I mean, I thought this was a good buy when they bought it from BCE. I actually kind of thought it was a good sell by B.C. when they initially sold it and said they were going to kind of try to repair the balance sheet, kind of pay off debt. I thought that was a pretty good move. But then they kind of flipped it into a U.S. fiber expansion, which I would imagine has not done as well as, you know, how much these sports franchises have accelerated over the last.

few years. I do, as you had mentioned, I think a few kind of BCE people who thought this was a positive was the fact that these sports franchises had accelerated in value so much that BCE was kind of selling high. But I kind of disagreed. I mean, as you had mentioned, the scarcity of this, like there's only ever going to be one Toronto Maple Leafs. Like, there's no replacement there, just such an iconic franchise that I think will just continue to accelerate in value.

They aren't the biggest cash. cow assets, but I mean, the brand there, all that type of stuff. So yeah, they, they ended up buying it. They ended up axing a bunch of low end profitability, you know, radio station type stuff that, you know, I don't know exactly. I imagine they're getting rid of them because they're not making much money for them, but they did it quick to like they were on and off the air just outright canceled. So probably some more changes coming here, but I think, I think goodbye from Rogers. Now, the, the alternative there is it's heavily leveraged. I mean, all of this stuff is...

Yeah, heavy debt from Rogers to take on a lot of this, but... And heavy debt for, you know, an acquisition that doesn't really generate a ton of cash, but I think personally will no doubt just continue to increase in value. Yeah, exactly. And it's hard, like, even if it blows up in their face down the line, you can definitely recoup some money off of those assets. And I'm just showing here the difference in returns since the deal was announced with BCE. Rogers is down 8% total returns.

And then you have BCE that's down 29% total returns. Obviously BC announced the dividend cut. I think it was early 2025 after what a year or two of us like pounding the table that they should have been cutting the dividend and they finally did. But I think, yeah, we were critical, but we are also realizing that look, BCE's that was kind of out of control would have been smart to do that. but then they doubled down in the fiber optic business in the northwestern U.S., which is a bit of a head scratcher because, sure, you know, it may be the best technology

out there, but the reality is there is more and more competition happening if you just think about SpaceX, right? And, you know, their internet, what's it called? Starlink. Starlink, there you go. I was missing the word, but Starlink. Yes, I think Starlink is not quite as fast and there's a bit of latency, but there's still, like for most people, it's more than good enough.

So you're getting a lot of different competition here. Is it the smartest move? We'll have to see. But the reality is sports franchises tend to retain their value, the value quite well. And so the value of the asset just tends to go up over time. And at least that's what we've seen over the last, what, 15 years or so, if not more than that. And for Rogers, I mean, from a business perspective, life sports. is just that one thing people must watch live.

So it's extremely compelling to have those assets. I mean, the number of times I've subscribed and canceled to Sportsnet for a month, just because I wanted to watch like one event or something like that because it was live, it's happened more than once. So I think it's really compelling and it makes it even easier to sell subscription because, again, who wants to watch a playoff game the day after when everyone will be talking about the results on social media while it's happening. And the one thing that isn't great for these kind of businesses, it is the lumpiness and

profits and revenues, depending how good the teams perform and if they make it into the playoffs or not. But just to give you a sense as a preview of what we'll be talking about on the Monday episode, so in 2016, the NHL approved a 500 million USD expansion fee for the Vegas Golden Knights. The Golden Knights, I think, came into the leak in 2017, if I remember correctly. but the expense Yeah, the expansion fee has to be approved before that, of course. In 2018, the NHL approved a $650 million U.S.

expansion fee for the Seattle Cracken. And in June, so just a few weeks ago, Gary Bettman, the NHL commissioner recently made comments about a Texas expansion opportunity. He said the NHL said that it would be a $3.5 billion investment from the Freitkin family. The Freakin family has entered into an agreement with the NHL to explore the feasibility. So that's what they announced. And based on that, it sounds like the expansion fee would be at least $2 billion now.

So went from $500, $650, and then $2 billion at least because of 3.5, of course, they'll have to commit some money to build. I think it's building an arena there. So that's the extra, you know, the change over there of $1.5 billion. But, you know, these obviously the expansion fees, do not include the venue, but there's a reason the NHL is charging that much, just because they're a market for it. Billionaires or companies that want to diversify or institutions,

there's just, there's 32 or 33 teams, how many in the NHL right now is the same for the other big sports league around 30. They either don't come up very often for sell or expansions just don't come up very often. So even if there's not that much demand for it or people or entities that can't afford it, there's still the demand outweighs the supply and that's just the reality of it and I just don't see that going away anytime soon and what's really interesting is the value of the golden nights so the 500 million USD expansion fee so they're valued according to Forbes at 2.2 billion and if you strip out the stadium it would be 1.6 billion roughly so not bad for a 500 million dollar

investment 10 years ago not bad at all I'd be the NHI I think is one of the only ones expanding right now, but even then it's pretty scarce. The MLB, I can't remember the last time there was an expansion from another pro sports league. So, wasn't there,

I guess a lot of them were moved, right? They were moved. The Vegas. Yeah. Yeah, I guess you're on. Like Oakland moved to Vegas. Yeah. San Francisco moved to, or the Rams. Where did they move to? They moved to L.A.

From St. Louis. Yeah. Yeah. So there's a lot of shuffling, but there hasn't been a lot of expansion in those markets. And that adds to the scarcity, which is why these sports franchises hold so much of their value as well. And you see, it's really cool what Forbes has on their website. So they break it down between evaluation breakdowns. I'm showing the Vegas gold and nights, 2.2 billion. So it's broken down between the actual sports. I guess the value of the NHL, the market. So the value of that kind of Las Vegas market, the stadium. I guess they are partial owners

of the state. I don't exactly know what, yeah, the ownership looks like there. And then the actual brand. You know, it'd be interesting to see what the other teams, like the value of the brand for the Maple Leafs or something like that. But yeah, I tried to find another link. Couldn't find it. But all that to say, I think it's a pretty good move for Rogers.

And honestly, if I had to own one telco in Canada, I think because of the sports assets, I'd probably go with Rogers just because I think there's so much value in those assets, even though they may not be generating as much cash flow as the other part of the business. Yeah, it's interesting. You see Tellus and BCE, which kind of went the dividend growth route. And now you have BCE that cut it. Tellus is, I mean, I was 6040 when we discussed it. I can't remember when we discussed that probably a month ago now. I'm probably 75, 25 now on a cut. Whereas Rogers kind of went the flip side. They don't really raise the dividend. I think they probably last grew it. They might have grown it recently.

But they don't really care about growing the dividend a lot. They're more so capital investments like this. I think they're also one of the heaviest leverage telecoms overall because I think most of this was acquired through debt. But, yeah, it should be pretty interesting. I mean, I imagine you look back on these franchises in even five years. They're going to be worth more than what Rogers has paid today. Yeah, yeah. And I mean, it's hard.

And when you look at valuations, it's always estimates, right? because there's not that many transactions. And yeah, because I think Forbes does just a good job at breaking down the sport, the market. Obviously, in hockey, the Toronto market is going to be much higher value on just that market segment than Las Vegas or Columbus or whatever it is. So it's very hard to even establish what the value of a franchise would be based on transactions and they're few and far between. So I agree with you. I think they're probably not going down anytime soon because even if we get into downturn, most there's still going to be a bunch of billionaires out there that will be looking

to, you know, I think a lot of them they see that a bit as their toy. But yeah. Yeah, I mean, I think I really, I don't mind it. And I was just looking at the leverage. I mean, it's pretty similar for all of them. I think Rogers as the most BC is a bit about the same and then tell us as the least amount of leverage, but it's still quite significant. So yeah, that's what you're signing up for.

But personally, I take those sports assets and a bit more leverage every day of the week. Because if worse comes to worse, I know they have solid assets to sell. Those other telco assets, I'm sure they could get something out of them. But as I said, there is more and more competition. I just don't know how well those assets will hold in value. So that's just my view of it. Yeah, that's all I got on the Rogers. We've booked a cottage for early July, and I'm already picturing the kind of trip where the days are pretty simple.

Mornings outside with coffee, my daughter running around with our new puppy, afternoons by the lake, and those quiet evenings with my wife watching the sunset with a glass of wine after everyone else has gone to bed. And while we're away enjoying that time together, the timing also made me think about our own home back in Ottawa. Early July is such a busy time in this city, with Canada Day and Blues Fest bringing so many people in. That got me thinking about how our home could be put to good use while I were out of town as it's just sitting empty. Listing our home on Airbnb could create some extra income to help cover part of the trip while also letting another family enjoy our neighborhood during one of the best time to visit Ottawa. They could walk over to a local coffee shop, spend the afternoon at a nearby beach,

and use our place as a comfortable home base after taking in everything happening downtown. Your home might be worth more than you think. Find out how much at Airbnb.ca slash host. If you're a DIY investor ready to take control of your portfolio, BMO All In One ETFs simplify the process. Whether you're new to investing or looking to streamline your existing holdings, these all-in-one solutions are designed to help you invest smarter. With management fees on popular portfolios now reduced to 0.15%, you get professional diversification at a lower cost. Check out the asset allocation ETFs at bemoetifs.com. 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. Do you want to head in, redoing the tech resources? Yeah, let's do it. So, you know, Carney and the liberals, you know, they're delivering on what they're saying for. Yeah. So Canada announced a first agreement under the new Critical Minerals Accelerator. That was announced, I think, in the 2025 budget.

And essentially, it was yesterday. They made that announcement. So we're recording this on July 8. So it would have been July 7. And as part of the launch, they announced a strategic investment agreement with tech resources. the investment would be part of the Canada Growth Fund and the agreement supports expanding production capacity at Tech's Trails Operation in BC,

one of the world's largest fully integrated polymetallic smelting and refining complexes. So when I first read that, I'm like, what the hell does that mean? So this essentially produces critical minerals used in areas like defense, semiconductors, and other defense industry uses. So it's very critical from a national security perspective for Canada and the potential investment would be up to $400 million and would include rights for the federal government for potential future productions on certain critical minerals. So they're trying, I guess, to secure some supply by doing that.

For me, I mean, it definitely shows that the federal government wants to put its balance sheet at work, which I don't think is surprising. That's what they've been saying now for, I mean, since the start of the year at least. They've been saying it for a bit now. And they see it as essential from national security perspective. And I think you'll see this more and more from governments around the world. I think you're seeing in the U.S. with some strategic investments they've made already, where one that comes to mind is Intel.

But they've also, I think, invested in a rare mineral company as well. I think a steel company in the U.S. Steel, if I remember correctly. So you're seeing more and more governments trying to get some stakes into that. and secure those kind of critical resources because I think you just can't assume going forward that if you're getting supplies from country X, Z, X, Y, Z, that that country will continue supplying you next year, three years, five years, six years down the line.

So you need alternative sources of supplies and ideally sources that are within your own jurisdiction and that's the case for tech resources. Yeah, I think the U.S. government has taken, I think one of them was trilogy metals, I want to say, and then the other one was lithium Americas that they've taken kind of stakes in. So, yeah, I think we did the mailbag episode on like what investment they would make first. And I'm not really surprised to see that it's tech. Yeah, it just made sense.

We kind of went down the critical mineral side and how, you know, these companies or sorry, these governments are going to want sovereignty, I guess, especially when it comes to stuff like this. So yeah, not overly surprised. I would imagine it's going to be the first of quite a few. I didn't expect it, like for it to happen this quickly, though. I would imagine it would take it a bit longer. But yeah. No, exactly. Same. But I guess we'll move on here to the next piece of news. So Microsoft layoffs. Yeah. So Microsoft is cutting around 40. 800 jobs works out to be around 2% of its global workforce.

The bulk of the layoffs are coming from the gaming side of things around 3,200, and 1,600 of them will be right away from the gaming segment, and then the rest of them will kind of be trickled off throughout the year. Gaming is one of the lower margin segments for Microsoft, so my idea of it is when they need capital to kind of build out the AI infrastructure, which a lot of these hyperscalers are reaching for. It's really not all that surprising that they go to this side of the business to kind of trim some of it.

Historically, layoffs have always been, I guess you could say a bit of a bearer sign. However, they're a bit unique these days that businesses are currently booming but still dumping staff. I mean, in Microsoft case, it seems to be a bit of a reorganization. The boom they're currently seeing in AI infrastructure buildos are leading to layoffs. It's a bit of a paradox, really,

a kind of a jobless boom, I guess you could say. The layoffs are really not exactly a surprise. They've been an annual event from Microsoft for the last, I don't know what it is now, probably three, four years. I think they cut 7% of the staff last year. They cut over 10,000 employees in 2023. So it's kind of been an annual event. And they're saying that Microsoft is saying that AI is writing 30% of their coding these days.

Yet they also mention that AI is not. replacing jobs. And I get that this set of, I get that this set of layoffs isn't likely related to AI. They came from the gaming segment, which. Yeah, yeah. I would imagine as some, some AI exposure,

but not as much. It's just kind of a low margin segment of the company being trimmed to feed, you know, the absolute cash burning monster that they have going on. But it's kind of hard to imagine AI isn't having an impact here when you're entering your third consecutive year. of layoffs, you're speaking about how efficient AI is at writing code, all this type of stuff. And I mean, I guess the one thing I tend to get a bit worried about in situations like this is,

are they trimming out these profitable yet lower margin segments to dump capital into AI? Well, the AI segment hasn't really been generating any significant levels of returns yet. So what happens when you empty all of the cupboards, you know, kind of strip down the other aspects of your business and you're not generating adequate returns from that strategy. I'm not exactly sure. This was a relatively small drop in the bucket in terms of layoffs. Like I would imagine if we had had more to talk about today,

we probably wouldn't have even brought it up. But I mean, it certainly is a trend from Microsoft. And the other thing here is based on what Microsoft is spending. I mean, these layoffs are probably, in terms of cost savings are probably a rounding error. I mean, you could see $100 plus billion in spend. So laying off $40,000. 800 employees to kind of reallocate that capital.

If that's what they plan to do with it is kind of a drop in the bucket. So I would imagine this is a trend we're going to see from a lot of the hyperscalers. I think meta is cutting as well. But I think you also have to go back to the start of the pandemic when they overhired like massively. I think they were hiring substantially more people than they needed. So maybe this is kind of just a leveling out of that element. But yeah, more people getting cut from Microsoft.

Yeah, and if you're looking at, I was just pulling here the gaming revenue. And it's not looking great, huh? It's definitely worse than I thought because they got a big jump in 24, but I'm assuming that was on the heels of the Blizzard Activision, yeah, acquisition. And I can't remember. I was reading that apparently, yeah, they really doubled down on the streaming kind of subscription model and invest in a lot of money in big games titles and the takeup was simply just not there.

So it's just bleeding some money. Yeah, it's definitely, I would say probably the worst performing segment of the business. So to see them slash staff is really not that surprising, especially as you can look at the chart, revenue is declining on a, what would that be a trailing 12 month basis? So I don't really know all that much about Microsoft gaming side. like what they exactly do there. I would imagine a lot of it is Xbox related. You know,

so they lost 64 cents for every dollar invested in the Xbox, I guess, or gaming segment. Yeah. Yeah. Yeah, it's not looking good there. So it's really not all that surprising. They'll probably just send this capital right to where they're spending heavily right now, which is,

yeah, it's not surprising, but eventually you're going to have to see some, some bottom line impact from all of this, because, I mean, if you're cutting this staff, you probably expect the gaming side of things to struggle more in the future. But, yeah, I think we're going to see it across the board. It's not just Microsoft. It just so happens that Microsoft laid them off this week. So we're talking about it. But yeah, that's all I got on that. We've booked a cottage for early July, and I'm already picturing the kind of trip where the days are pretty simple. Mornings outside with coffee, my daughter running around with our new puppy,

afternoons by the lake, and those quiet evenings with my wife watching the sunset with a glass of wine after everyone else has gone to bed. And while we're away enjoying that time together, the timing also made me think about our own home back in Ottawa. Early July is such a busy time in this city, with Canada Day and Blues Fest bringing so many people in. That got me thinking about how our home could be put to good use while we're out of town as it's just sitting empty. Listing our home on Airbnb could create some extra income to help cover part of the trip while also letting another family enjoy our neighborhood during one of the best time to visit Ottawa. They could walk over to a local coffee shop, spend the afternoon at a nearby beach, and use our place as a comfortable home base after taking in everything happening downtown.

Your home might be worth more than you think. Find out how much at Airbnb.ca slash host. If you're a DIY investor ready to take control of your portfolio, BMO all-in-one ETFs simplify the process. Whether you're new to investing or looking to streamline your existing holdings, these all-in-one solutions are designed to help you invest smarter. With management fees on popular portfolios now reduced to 0.15%. you get professional diversification at a lower cost. Check out the asset allocation ETFs at bemoetifs.com. 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 fricter. 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 questray.com, open and fund your account with code TCI and receive $50. Conditions apply. Okay, let's move on here to the next one on the slide. So Holshean LLC sending an unsolicited mini tender offer to Sunlife share holder. So that's something I wasn't super familiar with, but as we were getting ready here, you were telling me that it does happen more often than people think, especially for Canadian listed companies. So I'll just say what a tender offer is. And just interesting to

hear your take on that. So it really happens when a person or company makes an offer to buy shares from shareholders. The tender offer must result in less of the less than 5% of the shares. The idea behind it is a bit predatory because the 5% threshold allows them to not have to comply with a bunch of different investor protections that are in place for larger tender offers. And it's a common practice here to make an offer that is well below market value with the goal of catching investors off guard. Since regular tender offers will typically be over the market price, investors could see the offer and just assume that the market price, that it's above the market price, that it's above the market price and opt-in not realizing they could get more by simply selling their shares on

the open market. And the SEC actually warns investors on its website to exercise caution with these mini tender offers. And in the case of Sun Life, if the shareholders accepted, it cannot be reversed. And I think that's pretty much how they worked. And on July 3rd, Sun Life sent out a press release saying that the offer represented a significant discount to the shares, just based on the dates that they give in, they gave it. It's around a 25% discount versus the May 22nd price when the mini tender offer started. So at the time, so that would have been around a, you know, $75 a share. So it's much

lower than even the 113 that the shares are currently trading with. So yeah, significant lower and, yeah, seems definitely predatory in terms of practice. Yeah, so these have happened. Well, I don't want to say quite a bit. They're still pretty rare, but they're more common than one would think. It's happened to quite a few companies. I even think the big banks were exposed to this for quite a few times. I know just because I follow them quite a bit, I know Loblaw was behind one of them. Well, not behind one of them, but there was an issue on them, dollarama.

They were targeted, I guess. Yeah, they were targeted. And yeah, this, it seems mind-blowing to me that this would ever work, but they tried. it. They, yeah, you're effectively going to get a notice that there's a tender offer a lot of people. Well, I guess not a lot of people, but people who aren't paying attention might be like, okay, and they click except sell their shares at a massive discount, assuming that, whatever, the company's getting acquired or somebody's buying a big chunk of shares and they're going to sell them for a premium. Yeah, I can't imagine how many people they actually catch off guard

with this type of stuff. And it only tends to happen, you know, once every couple of years. So I would imagine not very much. This is a different company that usually does it. It's usually always TRC capital for the most part that I've seen for most of them. I've never even heard of this company. So yeah, I mean, just reject it really. Like if you have shares of this company, it makes no sense to sell them at a 25, 30% discount. So just don't get caught off guard when situations like this happen. And again, as you had mentioned, the company's almost immediately come out with a press release and just tell their shareholders to reject. the offer. So yeah, it seems like an odd strategy, but it seems to happen often enough that I

imagine they catch some people off guard. Yeah, no, exactly. So I wasn't very familiar with them. So I definitely would never, my first instinct to seeing that would just be checking the price. But maybe they also target people that have been longer term shareholders, maybe retirees that are not as tech savvy, maybe like people more in their 80s and 90s that would kind of see that, that, you know, they're not as familiar with technology and using the various sites to get, like, instantaneous quotes. So maybe that's how they try to target people because I feel like younger generations are always on their phone and probably would just check the price. Check the price. Yeah. Yeah, it seems wild to me, but I don't know. Okay. Let's move on here to the next on the slate. So interesting one in the Bitcoin world.

So we haven't, you know, we've talked, we do talk about Bitcoin. from time to time on the podcast, but this is definitely an interesting one. So micro strategy, or I guess strategy formally known as micro strategy, ticker MSTR. On Monday's strategy disclosed that it had sold 3,58 Bitcoin for proceeds of 260 million. That was pretty big news on Monday because Saylor said Michael Saylor, who is the chairman of micro strategy, said that he would essentially just huddle, right? So hold on to dear life and never sell this Bitcoin. And Strategy was the original Bitcoin Treasury Company.

And what they were doing was essentially issuing shares of strategy, preferred shares and debt, and then turn around and purchase Bitcoin with the proceeds. So since Strategy was trading at a premium to the value of the Bitcoin that held on this balance sheet for a good period of time, they would issue shares and then buy Bitcoin at a air quote discount. Not a bad strategy, no pun intended, if you want to grow your Bitcoin. On the debt and preferred shares side of things, the reasoning was that the USDA will inevitably continue to devalue against Bitcoin, so the liabilities will become smaller and smaller over time in Bitcoin terms as the value of the dollars will decline.

That worked for a period of time when the price of Bitcoin just kept going up or was on the upswing, but if it doesn't starts going sideways or starts declining and we're quite in a bit of downturn right now, more than 50% compared to the latest highs, then you're starting to run into problems. And what happened recently is that strategy has had dividends to pay on its preferred shares and needed cash to replenish their USD reserves on the balance sheet. They had enough cash to pay it, but they sold Bitcoin to make sure that, you know, they have a good enough bucket of cash on the balance sheet, exactly, to be able to pay those obligations. So the debt obligations, but also the dividends for the preferred share.

And their framework requires them to have enough USD to pay for a year worth of dividends plus interest payments on its debt. So they had to sell Bitcoins to replenish their cash reserve. Now, to be fair, this is an extremely small. portion of their Bitcoin on their balance sheet. I didn't calculate the exact one, but they have a lot. I'm trying to find here. I think they have something like 400,000 Bitcoin or something like that. So it is quite a small amount here, but still, this is probably more of a last resort for them, or at least selling that much because this was probably not what Michael Saylor intended. And again, officially the company has always stated that it could.

would sell Bitcoin from time to time. But I think the marketing around it was a bit different. And the problem is the face of the company, Michael Saylor, said he would never sell the Bitcoin. So that's, and he's been a big advocate for Bitcoin, sometimes saying stuff that that is a bit out there. But a very smart man, nonetheless, whether you agree or not with his philosophy, he does sometimes, you know, have some really interesting stuff to say.

Sometimes I find it a bit of a head scratcher. But the optics is still not great because they sold that. an average of $60,000 per Bitcoin when their average purchase prices above $75,000. So clearly, if they could have sold less at the very least, I think they would have, you know, been happy doing that or at a higher price to, yeah, sell less Bitcoin. But definitely, you know, noteworthy because they were seen as the kind of big player that really just wanted to hold Bitcoin no matter what. Yeah, I think just a quick, this is like a Google AI overview.

It says 843,000-ish Bitcoin. Okay. Yeah, so it was off. I thought it was closer to 400. So, yeah. I mean, these things, the Google AI overviews tend to be, you know, quite out there sometimes, but it says 843,000. So in terms of the overall sale, I think a drop in the bucket, really.

Yeah. But I just think it is the, because the only thing I know I don't follow. all micro strategy very much, but even, you know, I don't follow crypto all that much, but the one thing I did know is that he had mentioned numerous times that he would never sell. So to see them sell, it's not a good look, I guess, but it's also, I don't think it's anything to panic over. He didn't really sell all that much, but I mean, if Bitcoin continues to go down, I'm guessing it could get a bit uglier, but I don't know enough about the company to ever state anything definitively there. Yeah, and I guess at the end of the day, like, look, Bitcoin's one still one of my largest positions, and my cost basis is well below the current price.

So, you know, for me, it's still been an incredible investment. But then again, I started buying like back in 2018. So a lot of people are not my situation. A lot of people are underwater, probably average cause basis above $100,000 US. But even despite the news that came out, I think it was on Monday. So July 6th, Bitcoin is still at 62,000, and the markets have been struggling as a whole today because of the U.S. essentially resuming strikes on Iran and just all the uncertainty around the Middle East kind of picking back up despite the ceasefire agreements. So it is interesting that Bitcoin is actually at $62,000 despite the news because it could have been a bigger hit to the market in terms of the confidence in Bitcoin when you have one of your biggest bulls, if not the biggest bowls, maybe not the biggest bowl, but the most outspoken, well-known bulls for Bitcoin since 2020 having to sell. That could have sent a much worse signal here for Bitcoin.

So for me, I'm not, you know, not touching my Bitcoin. I sold some when it kind of climbed back up to around 82K a couple months ago. Just sold a little bit just to, just for allocation purposes. I felt like my Bitcoin allocation was just too large. So trimmed a bit that. Not because I don't believe in the asset, more just to risk management type of deal. But there'll be interesting what happens going forward if it's just one offer strategy or not. But having said that, let's move on to the next one.

here. So not much on the earnings front, but we did get, you know, some some fashion. Yeah, coming out with earnings. So Nike. Yeah. So headline numbers for Nike will kind of show a big increase in terms of earnings, but a large chunk of that increase was due to a tariff refund. Earning still came ahead of estimates, but it's not, it wasn't as meaningful as it looked just on the headline numbers. If you look at adjusted earnings, they came in well ahead, but it's not, it looked like a huge number on a, on a gap. But revenue came in ahead of estimates as well, but by a pretty small amount. And if you look to actual revenue, it declined around 1% year over year.

Gross margins came in fairly flat, declining 0.1%. This is actually pretty good because Nike has been taking a lot of margin hits over the last while due to markdowns, all that type of stuff. They've had tariffs, I guess, another impact there. They've had, you know, a ton of issues when it comes to maintaining margins. For the full year, revenue was flat. Earnings declined by 3%. If we go constant currency on the revenue side, it actually declined by 2%. North America seems to be improving a bit.

Sales were up 3%. However, everywhere else is kind of dragging it down. EMEA, which would be Europe, Middle East, and Asia was flat. China was down double digits. Wholesale revenue was up 4% while Nike Direct declined by 7%. But this is intentional. We spoke about this last quarter because we tend to talk about Nike every single time because it's kind of one of those outliers in terms of reporting. Yeah, when it's slow.

So they're ditching that older strategy they had about going to direct to consumer and instead they're kind of getting more back into wholesale selling. So you're seeing a pretty good improvement there while the direct is going down. But the direct is going down because it's not like they intentionally want to make it go down. But obviously they're just directing their efforts elsewhere. the one thing that's crazy to me right now is converse is just continuing to get crushed. So just going through fiscal, it looks like this is their lowest trailing 12-month revenue dating all the way back to 2013. And it does seem like this is a bit, a bit of this is intentional as well.

I don't know Nike a lot, but it seems to me like they're pulling back a ton on converse just from their conversations in the conference call, things like that. They're pulling back a ton on converse and running lower inventory. to kind of try to get scarcity up a bit, kind of spark the brand back a bit. Converse doesn't really have the fallbacks that Nike as an overall business does. Nike has a ton of products.

Converse is really just one shoe. The shoe? Yeah. It's just Converse shoes, which have... The shoe people are thinking about? Yeah. Yeah, that's it. That's Converse.

And if you look to the chart here, people are not thinking about it as much anymore. So, yeah, that's hurting. They're kind of trying to turn it around. And my kind of take from just the chatter from management is they're doing this by scaling back a bit. So obviously revenue falling is not really all that surprising. It does look like there is a bit of a turnaround starting with Nike as an overall business. However, the results are still kind of fairly ugly.

The guidance for 2027 is low to mid, low to mid single digit declines in revenue. But they do expect margins to improve in the first quarter, which is kind of a huge step forward as the margins have been getting hit very hard over the last while. I think that's why we've seen, I think they reported about a week ago now. The stock, I think, ended up popping six or seven percent. And the revenue guidance wasn't all that good, but I think the margin guidance is what a lot of investors wanted to see because you just need earnings to just stop bleeding. Inventories look to have stabilized, which is a good thing. They're flat year over year.

Again, you never want rising inventories with these types of retailers, especially if it's not due to excessive demand they're seeing. And that's why they're building up. If inventories are building up because you're just not selling all that much, you eventually just need to move that product out at huge discounts. And that's why your margins take a hit because your costs of goods sold kind of stay the same. So this is what Nike's been going through quite a bit. We've seen this a lot with Eritzia. We've seen this a lot with BRP. you know, a lot of excess inventory buildup is never good for these companies and it seems to

have stabilized. And Elliott Hill, the CEO said the company just isn't really where it needs to be right now. They're not living up to their full potentially, he mentioned. But he also mentioned that he's confident. They're building it the right way. So they're not looking to impress anybody. These are my words. But just my view of it is they're not looking to impress anybody over the short term.

But more so looking to build out something over the next decade, management of these companies when they're struggling quite a bit, tend to say this too to to kind of keep shareholders hanging on. We've seen them with Starbucks a lot. You know, the turnaround kept coming, kept coming and,

you know, eventually if things aren't turning around, they'll try to keep you on board with always pitching the long term. And again, kind of seems like there's a bit of a glimpse of a recovery here. North America's improving,

margin stabilizing, expected to improve, but long ways to go for Nike for sure. Yeah. Yeah, I mean, I think it's, it's probably a good proxy

for a little lemon too. So depending on how they, Yeah, they keep going. And I think Eritzia is just not having a good day today too. I'm not sure if it's tied to anything. Yeah, it's not too bad. I guess it's just the markets in general. But yeah, I mean, I think Lou Lemon can probably learn a few things from Nike.

And I think their new CEO is from there. So we'll have to see. Yeah, we'll have to see how things go forward. But yeah, I mean, it's not a company personally. I touch. I definitely, I think it's the kind of company that personally I'd wait until things start turning around than dumpster diving. Yeah.

So I think it's more of that. Like, I'd rather be a, you know, a bit too late than too early on this. Yeah. Well, because when we've seen Lulu Lemon in 2023 to 2024 just collapsed, I think they felt almost 50, 60%. A lot of people might have thought right there, it's, it's, you know, too good to be true for a company like Lulu Lemon to be sitting at that price. And we're down another 50% from that low.

back in 2024. So yeah, when these companies struggle, the market absolutely dumps them off. Like I think Lulu Lemon is trading at something like 8x earnings or 9x earnings because, you know, who knows if the brand is going to turn around. It's very hard for these companies to regain momentum once they've lost it. But some do. But again, as we had mentioned quite a few times,

it's hard to find one of these companies that is simply a buy and hold. often a lot of them end up going through situations like this and tend to never recover. Not saying Nike is not going to recover, but it is difficult for them to kind of write the ship after a large amount of struggles because there's just another brand that's coming in that everybody likes at that time. And right now, I wouldn't compare Nike to Eritzzi at all. I wouldn't even compare really Lulu Lemon to Eritzia at all. Maybe a bit similar, but you got one company with a massive amount of moment. momentum and the other two with next and none. No, no, I think totally right.

I think this is a good point to, yeah, to wrap things up. So I think it was a really good episode despite things going, being a bit more quiet on the earnings front. It was still a fun one. It's nice to see you again, Dan, after a couple of weeks of recording. Hopefully everyone enjoyed it. Again, just a reminder, we will be posting more content on YouTube. And we still have some exclusive content on Join TCI.

So make sure you check that out. It's $15 a month. I also created a new Discord dance on there as well. So I'm going to be looking to post probably some daily things kind of in some of the Discord chat. So if you're interested in that, make sure you go there. But if not, we're trying to grow our YouTube channel because a lot of discovery for podcast now is not done on podcast platforms.

It's actually done on YouTube. So we're doing a bit of a push. So you'll start seeing some full episodes on there probably once a week. and the other one will be on Joint TCI, so still giving some exclusiveness. And whenever we post content, we'll try to make it for episodes. We'll do an early release on Joint TCI.

But just a little bit of housekeeping items, but we appreciate all the support. Hopefully everyone had a nice Canada days and joined the summer. And we'll be back for another episode on Monday. Make sure you don't miss it for the sports team dive that we're doing. I think it's a fun one. And then our macro discussion, Dan Foch and I that is on Saturday on the feed or you can find it as the live podcast around noon

on Friday so make sure you don't miss that. So yeah, thanks for listening. We'll be back soon. 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.