The Canadian Investor - The BoC Is Stuck and These Companies Are Feeling It

Episode Date: March 19, 2026

The Bank of Canada kept rates unchanged, but the bigger story may be just how stuck policymakers are becoming. We discuss weakening growth, stubborn pockets of inflation, higher energy prices, and what the latest CPI data says about the Canadian economy. We also break down Alimentation Couche-Tard’s latest earnings and why the market was underwhelmed despite decent headline growth. Same-store sales, consumer pressure, and slowing organic momentum remain key issues. We then turn to Adobe and The Trade Desk, looking at Adobe’s AI strategy and leadership transition, and why new concerns around Trade Desk are putting added pressure on investor confidence. Tickers discussed: ATD, ADBE, TTD   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 Simone Benjjj and I'm back with Dan Kent for a news and earnings episode. This is actually our take three as I've been having some microphone issues, but now it's fixed. And we had someone on Join TCI or Patreon page asking us to make sure we say timestamp it when we record it because obviously things are changing so quickly right now with essentially a headline-driven market. Let's be honest here. So we are recording this on March 18, around 2 p.m. I don't know if the, do you know if the Fed actually came out just yet? No, because isn't it in like 10 minutes? Let's see here.

No, they actually just came out. Two minutes ago. Breaking news, yeah, a couple minutes ago. The Fed said it is leaving rates unchanged. So don't have much more information than that because I've been running to try and get new cables for my mic. But it should be still a good episode. We'll start off with the Bank of Canada. That was earlier today.

The Bank of Canada left rates unchanged at 2.25%. the Canadian economy is dealing with a lot. They kept saying that quite a bit. And the impact of the Iran War will likely have an inflationary impact in the short term. The full impact won't be known until there's really more clarity on the length of the conflict, but also how widespread it might become. And obviously anyone's guess right now what's going to happen there. And since their last update, the economy is significantly weaker and the inflation has come down. Looking forward, though there are economic growth risk and it looks weaker than expected and they are preoccupied with inflation risk because of those rising energy prices. So in other words, reading between the

line is pretty easy to figure out that they're kind of stuck between a rock and a hard place, which has led to them to keep rates and change and go into wait and see approach. I didn't see the full press conference, but I went into the first couple of questions from reporter. And so far, the inflation risks seem contained, but again, they just, they aren't sure with the broader or with the Iran conflict, depending how long and how broad it gets. So I think they're just not sure exactly what to do. So instead of doing the wrong thing, they figure they'll stand path, which, you know, sometimes inaction is an action in itself and may not be the right action. So we'll have to see, but kind of interesting. I don't know if he said this either in the

press conference a bit later on with the question period. But one thing to keep in mind is because Canada is one of the major oil producers in the world, the fact that we have higher oil prices, I think they're hovering around $100 for WTI here. And of course, the price in Western Canada with the Western Canadian Select is lower, but it still means that we have a stable supply of oil. And yes, there are some distribution constraints, which are well-dust. documented, but it should increase demand for the Canadian dollars. So that could offset some of the inflation because a stronger Canadian dollar versus other currencies means that we will be paying less in effect for goods that we import into Canada. I don't know if he talked about that,

but it is something to consider maybe it will ease inflation a little bit. But that's big picture take away from what they said. Yeah, not really surprising that they left them the same. I mean, I guess you could argue that the Canadian economy probably needs rates lower, but the last thing you want to do is is lower them into, you know, rising inflation. And like you said, I wonder, I guess you'll go over it in the CPI. Like we're seeing food inflation is kind of still through the roof. But I wonder if that higher Canadian dollar would bring that down because I would imagine we import a lot of our food. That's just a guess by me. I mean, yeah, that's just a byproduct of being a Nordic.

country, right? Yeah, exactly. You have to import a lot of that. So, yeah, let's talk about CPI exactly what happened, how it looked there. So the headline number came in lower than expectation at 1.8% year over a year. I think expectations were around 2%. And that follows a 2.3% print in January. Still, keep in mind, there are some base effects in place because February 2025, there was that GST, HST Trudeau holiday on some items. So that stopped in, mid-February and i think it's important to look at the over-month-over-month change as well here so you don't have those base effects so the month-over-month change was 0.5 percent food was up 5.4 percent while it was flat versus a january gasoline was down 14 percent year but up 3.2 percent and if we look at

energy as a whole so that was up nine that was down 9.3 percent you over year and up 2.3 percent so it is definitely something to keep in mind, right? As the Bank of Canada said, if you start thinking about energy prices, and they have been relatively low for the past year before, obviously, the Iranian conflict that we're seeing with the U.S. and Israel launching Epic Fury, I think they call it. So it is something to keep in mind. I can understand why the Bank of Canada is a bit concerned and maybe skid us about lowering rates, even though growth clearly is weakening. And I think there's a good case to be made that we are actually in a recession right now. I think we had Q4 of 2025 with a negative print.

And I think it's going to probably be hard to avoid one in Q1 of 2026 as well. Well, the jobs report too was bad. Like what were the 80K loss? Yeah, yeah, 80-something loss, which was the biggest loss outside of COVID since 2009. So dating to the GFC, so not not looking good at all. And they, uh, they had expected, I believe like 10 or 20,000 jobs. But yeah, it's like the Canadian economy is, I mean, some would probably say that we are already in a recession. Energy is kind of the one thing that's holding inflation back right now from being that high because obviously shelter a bit too.

But I mean, food is out of control. Shelters kind of maintained. but I have noticed, I usually don't notice because I don't drive a lot, like the hit at the pump. Yeah. But I just filled the SUV a few days ago. And yeah, it is like, yeah, it can't really, this is not good. Do you have to put premium in there? No, it's just regular. But like, I just notice it's like 20 plus bucks more a fill.

And obviously that hits everything. Yeah. Like, if energy prices go up, food prices go up, uh, shelter prices go up, like to build a home, you know, if you have high energy prices. it costs more to do everything. So it's not really all that good. It's probably good for Alberta in a way, but it's not really good right now. Like the, we can't,

the US and Canada don't really need a $100 barrel of oil right now. It's not really a major benefit. Yeah. Well, the other impact too is for a lot of people, it's an essential expense, right? If they're commuting to work and sometimes you just don't have the luxury to be taking public transportation. So if you have to pay more for gas, oftentimes you end up cutting elsewhere.

So that impacts the economy as well. So these are just all things to consider when it comes to inflation. I know looking also at services, that is easing a little bit, but month over month, it was a bit higher. And then if we look at core metrics, so those are becoming definitely looking better. It's getting pretty close to the Bank of Canada target of 2%. And obviously it's a 1 to 3% bracket. But if you're looking at CPI medium, CPI trim as well. And for those not sure what they mean,

essentially you're just taking for CPI medium the middle number of all the items in the basket and what that increase was. And trim, you're trimming of the extremities. So the biggest increases and the biggest decreases. And then you come up with that number. Oftentimes it'll be the most volatile item as energy and you'll have also food there. So those are 2.3 and they were all the way back to September. They were 3.1 for each of them.

So you can really see that there has been a decline on that front. And these are the ones that the Bank of Canada looks at the most. So it'll be interesting to see what they do. Again, they're in between a rock and a hard place right now. Damned if you do, damned if you don't. And again, they don't have a dual mandate. It's really price stability their mandate. But clearly, I know some people will push back on that.

At the end of the day, I think they do have a dual mandate. Like, they essentially are trying to make sure they have maximum growth with the lowest or closest to their inflation target. It may not be in legislatively their mandate, but it is what they try to do in practice. You can hear what they talk. That's essentially what they're looking at. Yeah, definitely. I'd be curious, like, they don't list the trim, like what they actually trim, do they? I don't think they do.

Maybe they do in, like, the super long. list of like if you dig into the reports. So maybe they do. Because if you're if you're trimming gasoline to the downside and food to the upside, you're really taking out a portion of inflation that hits the two key points that hit like 99.9% of the population. But yeah, the numbers are looking better. Yeah. And I think it's important for investors and everyone to be aware of this. It may not reflect your own personal inflation rate. It might be higher. If you're lucky it's lower. I assume for most people it's higher than the overall CPI basket because obviously your consumption will not be the same that the CPI basket. But it is important because it also, depending on how the economy does, it will impact a lot of businesses that you might be invested in, especially those domestic businesses.

I'm thinking like a Canadian tire that's obviously heavy in Canada. I don't even know if they have much presence like with some of their subsidiaries in the U.S. I don't think they do. I don't think they have any. It just can't. Maybe like Heli Hanson and stuff like that, but I'm not sure. That would be one example. Yeah, it could be.

Yeah. I thought they might have sold Heli Hanson. But yeah, anyway. Yeah, I think you might be right. Yeah. But regardless, if you're thinking about other businesses and some of the habits, think about the grocers, obviously, dollarama, you have people trying to cut back, save money, a Costco if you're trying to buy in bulk.

But it also impacts some businesses more negatively. Like a Kustal would be one, for example, with Gatt. stations across Canada, the U.S. and Europe, but obviously Canada is still a key market here. And if people are feeling more squeezed at the pump where they actually go to Kustal to fill in their car, they probably won't be buying a whole lot of overpriced merchandise. So it's interesting to see how you'll see the different impacts here. And speaking of Kustah, they reported earnings. So let's see if they're actually being impacted here. Yeah, so the market did not like Kustard's quarter. It's down around 5%.

Pretty much the same thing as this morning. It seemed like a solid quarter from a rebound perspective. Like they've had quite a few rough quarters. So they're kind of working from a lower base, I guess you could say. So revenue increased 11.3%, earnings by 24.6 and EBTA by 18.4. But they did miss expectations, I think by not very much, but they did miss earnings expectations, which is always going to be an issue in terms of the headlines and the one thing is the main focus of this business right now, in my opinion,

is the merchandise. It kind of continues to struggle and this is actually one of the main reasons that I didn't necessarily turn bearish on this company, but I'm not as bullish anymore. This is a company that I covered for many years and actually ended up stopping the coverage on it for this year. They, revenue and merchandise increased 5.7 percent, but there's kind of a, There's an issue here because organic growth is still pretty much flatlining. Like, there's really nothing there. So they're having to. While you're seeing in here for joint.

Oh, yeah. Actually showing the same store sales growth or same store merchandise revenue. It's just not good. There's nothing. Canada, actually, it looked better than the U.S. for a few quarters, but now it's dropped to 0.3% for the latest quarter and then negative 4% of 0.4% for the U.S. And that's one's been actually negative for better part of almost three years. Yeah, two years and a half where it's been negative for the U.S.

And that's not good because I don't know the business whole well. But my educated guess is they do much better margins on merchandise. Merchandise. Yeah. Yeah. Yeah. Like that was kind of the model. You know, people come fill up for fuel and then they come in and get whatever a hot dog bag of chips.

But the U.S. is their biggest market as well. Like they're pretty well diversified like Canada, UK, US, but the US would be its largest chunk of the overall business. So you definitely do not want to see that declining. And just what they mean by same store sales, like it's comparing the same amount of stores to the year prior. So if they go and acquire a company or they go and build a bunch of stores, that's not factored into this until the next year. Because that's a much more capital intensive process. You don't want to be growing solely by building new stores or by acquiring. You want to see that same store sales growth.

And in the U.S., this is just on the quarter, that 0.4%. Yeah, it's just on the quarter. I had the wrong KPIs. So in the U.S., it's a little better than I said, but it's essentially been flat for a better part of like two years now. And the most recent quarter, same store sales in the U.S. was 2.8%. So that's the best quarter in several years. Yeah. It's they declined in Canada as well by 1.6%. They grew by 1.4% in Europe. But again, the US is kind of, you want to see this area growing and it's just not here. And as we had mentioned, we just went over inflation. Like my main concern with Kustard is the fact that inflation is hit enough over the years that this is kind of, it's become less of a, you know, convenience option and more of a just not worth it option. So what they mentioned is that the reason, the reason. So what they mentioned is that the reason. The reason is that the reason. It's become. It's become less of a, you know, it's become less of a, you know,

you know, convenience option and more of a just not worth it option. So what they mentioned is that the reason why merchandise is struggling is because budget constraint consumers that are reducing basket sizes. But honestly, like for me, when it's like $9, it's like $7, $8, $9 for a bag of Doritos from the store. Like at that point, it's not even budget constraint people who are avoiding it. It's probably just people in general. Yeah.

it's just, it's way too expensive at those places now. And I think, you know, inflation kind of hit it hard over that time frame. We've seen the same thing with a company like Pepsi. They,

you know, inflation hit them hard and they were raising prices. And they kind of hit a breaking point to where people just weren't buying it anymore. And I think that's what's kind of happening here. Will a shift in the economy help? I mean, I guess it probably will,

but I just don't think you'll see activity like we did pre-pandemic. I mean, look at places like Lobla and Dollarama for pretty much confirmation of this. Like people are going out of their way to spend less. They're not looking to spend more just for convenience. And I mean, these prices are never coming down. You just kind of hope that they don't continue to accelerate as fast. When we look to the to fuel, they're kind of taking a hit as well.

So revenue growth of 13%. But that was primarily due to rising fuels. So same store sales. volumes on the fuel side fell across the board 1.4% in the U.S., 4% in Canada, 2.4% in Europe. Margin stayed strong, which kind of somewhat offset the decline in volumes, but it is no doubt an issue. And the company is continuing to grow pretty well via acquisition, as I had mentioned. Like, they have tons of cash flow, they're low leverage. However, you know, the organic growth being at a standstill is something that needs to turn around.

you can't have like double digit revenue growth while same store sales are declining like eventually that's going to run out the majority of this growth from this quarter was from acquisitions in Europe but yeah i don't know i i have a 7-11 right by my place and i used to go there all the time like just for yeah like say a bag of chips when you have people over something i would not go there now i make the extra a couple minute drive because it's like a $40 bill once you come out of there with like three bags of chips and chips it's going up but maybe it'll say start going there again. Who knows? Yeah. It's nuts. And just looking, Kuchat has not done very well over the last couple of years. No, like ever since that inflation hit, it started to really struggle.

Yeah, it's positive, but it's not, I think it's underperforming the market a little bit. So just looking on that, oh yeah, buy quite a bit, especially the SMP. Yeah, especially the SMP 500. I mean, I think it's important to just look at these companies before we move over to Adobe here. Just be, objective because I know there's a lot of people that are like there's a fan club like lack of better words for edmont ascente oh for sure there's some people who really love this business and they'll almost bring into their grave and i mean they it's been a phenomenal performer don't get me wrong if you've held this for 10 plus years for example like you've done quite well like no you've you've done actually i thought you would have done better but you've done close to the the market for the

Canadian market. You've outperform a little bit. Yeah, I mean, when you get it's been dead returns for three years. So it probably lost quite a bit. And then obviously in those three years, the TSX also went through. Yeah, trailing actually a little bit to TSX over the last decade. Actually, for whatever reason, I thought it had done better than that looking that far out. But if you're looking at the max, then you've crushed it. Yeah. If you've owned it for 15, 20 years, you're just laughing. If you bought it when, uh, when the internet came out, you're doing quite well. Yeah. I guess my point is just being like a little bit like Go Easy, right? And this is a much better business than Go Easy. You don't get me wrong. But it's just important to be critical about investments that you might own because there is like some serious headwind. We've been talking about this for some time now for Kustar. And I just don't know how quickly this will turn around. And you just can acquisitions are nice. But at the end of the day, like at some point you have to grow organically at a decent clip because you. You just, you run out of acquisitions to be able to make the needle move.

And then oftentimes you start seeing regulators that will mix those bigger transaction because of competitive reasons. So you get into a whole lot of different kind of roadblocks when you try to just keep growing by acquisition and you're already quite large. Well, and another thing with the acquisition is like it's a lot cheaper to grow organically than it is to roll out. I don't even know what it would be. If we're not talking about acquisition, say we're talking about building a new facility, like millions and millions of dollars to put that up. Like, you don't want that to be your, your only method of growth. You need same store sales growth. And they're really just not seeing it right now.

And I think it is an element of how expensive it is there. I think that's it. I might be wrong. Maybe the economy turns around and this growth goes back up to like mid single digit organic growth. But I really think you hit. that breaking point where people will just not pay those prices unless they absolutely have to. No, no, I think you're right. There is an old saying in investing.

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Check out the asset allocation ETFs at bemoetifs.com. So let's move on here to Adobe. So this one definitely been to poster child a little bit for Sassmagedda, the software that could get disrupted by AI. So I know there's some people that are very passionate about the name, but I mean, it's been a rough go. I'm trying to look it up here in terms of how it's been. 60% since the highs in 2024. Wow.

Okay. So that's quite a good. And if you go back to, if you go back to 2021, 67%. percent. So yeah, that's, that's not good, huh? That's, uh, it's been rough. Yeah, I guess we'll start off here. The big news was that CEO Shintanu and Iran will be stepping down after 18 years.

He will stay on as chair of the board to support the successor that's named after him. So I think the stock got hit a little bit. I think they were not expecting that. I don't know if investors see this as him maybe like just, you know what? I'm leaving while things are still pretty good. then I don't want to embark in that. I mean, when you've been a seal for 18 years too, you may just,

maybe you just don't have the mental capacity to want to go. I get what you're saying. Yeah, it's like, especially when your stock price is down. Yeah. 70 some percent. You might just want somebody else to kind of. Yeah, because I'm just kind of,

he's born in 63. So it would be, yeah, like, okay. In early 60s. So it's not, I think there's a lot of, you know, people that are still CEOs for several years at that age. But I mean, still, when you get at that point, I'm sure he's very wealthy. Sometimes people are like, I would not blame him if he's like, okay, I still believe in the company, like internally, right, without saying this to people.

But do I really want to be at the head for another five years and have to deal with all this change? I mean, he's done phenomenal for 18 years. So let's give him credit. Like, even though we've seen a decline recently, he's been, Adobe has been a really great performer. So he will, Like I said, he'll stay on as chair of the board. Revenue grew 11% for the quarter to 6.4 billion. Annual recurring revenue grew, so ARR by 11% to 26 billion. AI first applications like Firefly with our now have AR exceeding 250 million. So still relatively small though compared to the actual size of the business.

The monthly active users grew to 17% to 850 million. The bulls point to this That look, how can this company And I've seen tweets about it They'll say, well, there's 850 million active users Again, a lot of these users Are using like Acrobat Free for example So you have to take that amount

With a grain of salt Because it's very possible that these users will never convert While they have numbers that look better Creative Freemium that they call which saw monthly active user grow to 80 million up 50% you over a year. So freemium for those not familiar. I'm sure you've seen apps, for example, on your phone, where it's free for the app,

but then for certain accesses or certain features, you have to pay something. So that's essentially the model of the freemium. Again, it sounds good, but they need to see conversions. So essentially they're trying to get people into their ecosystem and with limited features, and then you have to pay if you want the more advanced features. I wanted to mention that because this is great, but it is something they mentioned on the call that they are basically taking a little bit of a hit short term to have kind of more users long term.

They think that users will be buying more credits or paying for those premium features. They said they are seeing good traction already, but again, I think you have to be very careful there because there's more and more of these options coming up. And the fact that they're focusing so much on freemium users leads me to both. These are not enterprise users. I'm going to go on the limb and say these are not enterprise users. And when you have non-enterprise users that are using a software for free, I don't think it takes much for them to start using another one for free. if really cost is a barrier for them. This is like pretty much dualingo,

same thing. Yeah. Focusing on monthly active users, like it's a complete vanity metric. Like it does not mean business success whatsoever. It could work. Like I'm just, could work for both of them.

It could. But when, you know, when you're swapping to this and like telling people to be patient and you're going to monetize like down the line like that, it's not going to fly very much and and you know it's yeah I I don't look at like monthly active users whatsoever as any sort of indication that anything is doing well yeah it's different right when you have a like ad base business then MEUs are super

important if you're a Facebook you'll want eyeballs oh yeah how you monetize so it's very different and I just wanted to mention that because MAUs may be a super good metric for some businesses for them I will take it with a grain of salt maybe they will be able to to monetize that down the line. But I think one of the issues that they may be seeing, and I'm a prime example of that, a while back I started learning a little bit Adobe Premier Pro, and it's a pretty steep learning curve to the point that eventually I, Dan Foch from the Canadian real estate investor who was using Acrobat Pro, but at one point it had like, there was a glitch or something or an update that was

required anyways. It wasn't working for him. so he went to use the script and he never went back to using Acrobat after that because it did 80, 90%, you name the percentage of what Acrobat did. Of course, Acrobat, there was more feature. Yeah, sorry, Premier. I keep saying Acrobat. But Premier Pro, there's a lot more features.

And if you're really, really good with it, you can probably do something extremely nice. But for a lot of user, the Descript alternative is much simpler to learn. The learning curve is much lower, and you can produce some high quality content with it as well. So I think that's, I think for me, the trouble that they might start getting into. And then you get other competitors like obviously Photoshop, I'm going to assume that a Canva is a pretty big competitor for them. Yeah. Yeah. So you get all these different competitors that, I don't know, it does become a little bit of an issue because I think where Adobe is really good is for those who already use it.

And you're a prime example of that where sure Firefly is awesome, probably better than Descript, but you don't have that learning curve. I don't even use the Firefly because it's really, it's really not that good. I use Firecut. Oh, Firecut. Okay. It's like an add-on to Premier Pro. Like if I didn't have that, I would leave Premier Pro for sure.

Yeah. It's not, there's a ton of other options. Like on the small-time creator side, that's an issue. And then obviously on the on the enterprise side, you have the seat-based issue. We've talked about on a ton of episodes where AI might cut workloads by 60, 70%, and these companies rely a lot on charging for seats. Yeah, exactly. So I think I just wanted to bring that perspective, obviously, just make sure you when you listen, you just zone out when I see Acrobat and should be a Premier Pro. But you know what I was talking about.

And then the last thing that's surprise market is their stock business. So remember for those wondering what the stock business is, it's those stock pictures and videos that you could use without paying a royalty. So you could get a subscription for that. You'd get a full library. Well, they said that the client is faster than expected because people are just using AI. Oh, what's the point? Yeah, exactly.

So what's the point? I mean, if you can create a picture with AI, why the hell? And then some and more things and use it for other things. What's the point of having that? So that's a business that was bringing $450 million in ARR per year out of their $26 billion. Not a huge business, but the decline is much faster than they expected. So I think that surprised markets a little bit. In terms of guidance revenue to grow around 10% for midpoint, which would be a little bit of a deceleration, not a huge one,

because they've been growing more around 11%. Something to keep an eye on. These are the first signs, right? Like this could just be an off quarter and if the MAU strategy works well, and they're able to convert a lot of those free users to premium users with the premium model that they have. Maybe it's just a couple quarters where there's deceleration and then it re-accelerated. That would be the best case scenario. But keep an eye out on that if you're a shareholder or you're looking to start a position.

And EPS is projected to increase at about 11%. So overall, I mean, just kind of a mix bag, I see, with Adobe. I did tweet something that at some point it just becomes too cheap that you almost have to buy it even for the next three, four years of relatively stable cash flow that it could offer you. I don't know if it's at this point for me just yet. But if you start, I don't know if it becomes at one point, it's so hated that it's like in single digit P. And price of free cash flow, I mean, it's going to be tempting to nibble a little bit just, yeah. I mean, it seems like to me, like a lot of people, are kind of looking to past prices, but like Adobe was growing at like double the pace that they are now.

Like they're definitely slowing down. If you don't think they're slowing down, like it's very, very obvious that the growth is slowing down. So the valuation is, it's probably going to come with it. I mean, they're, they're going to grow earnings by 9% but they bought back, I think five and a half percent of their shares last year. So how much of that growth is through buybacks? Like, it just kind of seems like it's potentially slower maturing company, I guess, that could eventually convert a lot of these active users to paying subscribers. But I mean, I would imagine most of the monthly active users are, I mean, I guess some of them would be on that enterprise level.

But I don't know, it just kind of just seems like a company to me that's, that's slowing down. Like I remember Adobe three, four years ago was growing at a 20% plus clip, I think. And now it's, it's 10%. So the decline in share price isn't really all that surprising to me. But I think the AI disruption level is is a bit overblown as well. But I also think that the stock price is not down solely due to that. It's kind of down a little bit just because it's not growing as fast.

Yeah. It'll be interesting to see. Maybe it's a fantastic opportunity and they will turn it around in terms of re-accelerating growth. We'll have to see now. 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.

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We didn't expect that. and just a couple of things that threw up a curveball. But yeah, let's go and talk about what's happening with the trade desk ticker TTD. Yeah, so there's a big, I guess it's like a big client of trade desk that I guess you could say like blew the whistle on the company. So it looks to be trade desk largest client. It was accounting for a double digit percentage of bookings. They like came out and apparently straight up said they do not suggest using. Trade Desk. So I don't really follow Trade Desk too much, but just by reading a few articles,

like these companies were deeply intertwined. So what ended up happening was the company, and I'm trying to find the name of it right there. I have a publicist. I'm pretty sure they're called. So they got a third party client to- Do you want to explain a little bit what Trade Desk does, or I can explain. Yeah, they're like an ad network, like they'll kind of buy advertising space. And these companies like... It's programmatic, I think. Yeah. Yeah.

So if I were to kind of explain it, this publicus company, so you have the front-end company, let's just say a Samsung, and they want to run advertisements. They'll go to a company like this publicus, and then publicus will go to Trade Desk. And Trade Desk kind of charges a fee for the advertising, things like that. And actually, I'll get to why, like what this company is accusing Trade Desk up, which is not good. if true, but I have my reasons to believe it might not be true. It's basically a middleman for advertising. Yeah.

Publicus would probably be the middleman. Trade desk would be like the, yeah. So they gave this publicist company got a third party client to review the operations of Trade Desk. I kind of came back with some ugly results. They accused Trade Desk of applying fees and additional charges improperly. And the audit also found that Trade Desk was. pretty much automatically opting companies into extra tools and billing them on a recurring basis for it. So yeah.

Yeah. And probably one of the most damning things about the audit was that Trade Desk is being accused of refusing to provide data to verify they were not marking up ad space and third party data. So like I said, like Trade Desk, publicists will get the advertisers. they go to Trade Desk. Trade Desk will supply the ad space, things like that, the third party data, all that type of stuff. But they don't mark it up. Or at least they say they don't mark it up. So it sounds like they're both middle people. They just kind of interact with each other. They are both kind of middlemen. Yeah. Okay. Yeah. So Trade Desk will charge a fee, but they should not be marking up the ad space. And they refuse to kind of mention or sorry, they refuse to release the data that. kind of proves that they're not doing this. So if an ad agency buys ad space for $1, so if this publicist company buys ad space for $1, then Trade Desk shouldn't be marking up that ad space and charging the company a buck 10 for it, so to speak, and kind of tucking it under. They should just be charging their fees. So, and I believe I don't know trade desks all that well,

but from what I looked into, like that's kind of their whole thing is they don't do this. But again, the auditor mentioned that when they went to verify this, trade desk just kind of refuse to provide the data that says they don't. Yeah. And they say, they mention that they do this because it would violate privacy agreements and also give away the secret sauce to their bidding algorithms. But I mean, I wonder is the secret. To the auditor? What's that? So they wouldn't release it to the auditor and that would Yeah. Well, it's not, yeah, they would not release that information to the auditor who probably would keep it confidential. Yeah, that's a pretty stupid reason. Yeah. That's not good.

An auditor is not there, like, just giving the information to everyone. I feel like, yeah, there was confidentiality issues, like, if they would do that. Well, they said it was, like, a third-party client. Like, this public has got a third-party client to do it. I would imagine it was an official audit. But, yeah, they wouldn't give, they wouldn't give the data away. So, I don't know, like, is their secret sauce, you know, charging that 20% fee and marking up the ad space wouldn't be good if they did.

And then Trade Desk accuses publicists of doing this because it is developing products that would eliminate the need for the middleman and advertising. So instead of Samsung going to publicists, they would just go straight to Trade Desk. Trade Desk is kind of saying that they're just doing this because, you know, Trade Desk is trying to make them obsolete. But I mean, as if the stock needed any more punishment, it's in the gutter yet again after this came out. It's down. I mean, it's crazy. I don't even know what it's down. When did this come out?

Yeah. This would have been yesterday, maybe yesterday evening. Yeah, it's down. Like, let's say five days it's down about 14% yesterday. Yeah, I would say around 15 if we have 15, 20%, just because it was up a little bit. And then, yeah, lost, lost some ground. So let's just say about 20%. Yeah.

Yeah. And I mean, even if you factor in, like, let's just say that this public is doing this because they're going obsolete. Like, Trade Desk is going to take a beating here. because they're going to lose that client. And they're actually like, there's probably a lot of people or a lot of agencies have to listen to this company when they say don't use trade desk because you don't know if they're marking up the space, selling ad space for marked up levels now.

And they won't disclose whether or not they are. There wasn't a lot of reply from the company. But yeah, they. No, it's not a good look. And they might be doing nothing wrong and it might not be a good look. Like you should just kind of be releasing that data. unless you're doing it. If you're doing it, you will lose a massive chunk of your client base and it will get even

more ugly. So I mean, I guess if you're doing it, it's best to keep it hidden. But they're already slashing revenue targets. And yeah, now that the company that's kind of lived off the new gate. Well, your reputation. Yeah. So big hit, right, by doing that. And, you know, especially we've talked about AI.

Like, I can't imagine that what they offer can't, you know, be replicated eventually by another company that says, okay, they smell blood in the water and people have lost trust in them. Why don't we start an alternative to the trade desk? Like this would be a company that would be just ripe for the taking for sure. Yeah. And I mean, it's down 85% from 2024 highs. So it's obviously, uh, it's an issue all around. But yeah, I don't know the company all that well, but you don't need to know a company all

that well to know when it doesn't disclose this stuff. it's usually not going to be good for the stock price. And I just don't, I don't see why they didn't show that they don't do this unless they do it. It seems weird. No, that's a good point. Yeah. No, I, I wasn't a lot. If it's a, if it's like a private audit, the auditor would just say, yeah, they don't do this.

They don't need to release any sort of confidential client data. It's weird. No, exactly. So, no, I wasn't aware of that one. So, uh, definitely interesting. I'll keep an eye on it to see what happens. But I think this is a good point to call it a podcast. We have to record a second one in a row.

And after a few misfires, I want to still have a lot of energy for our Monday episode coming up. Make sure you stay tuned. We'll be talking about the Canadian banks. So it should be fun here, some fun topics to talk about relating a little bit to go easy, the fallout, but just how it could impact some of the Canadian banks. So stay tuned. I know, make sure you tune it because I know a lot of people. own the big banks and you might want to hear like what we have to say.

I think it definitely not not anything panic or anything like that, but just some good food for thought. So make sure you tune in on Monday. Thank you a lot for listening. If you'd like more content for us, you can go on join tCI.com. We've also been posting more YouTube videos. I recently posted a GoEasy video that kind of goes over exactly what happened

and the timeline in history behind GoEasy. So if you'd like to see my beautiful face a bit too up close, I will give myself a little bit more room for the camera next time around. So I've learned my lesson for that one. But with some visuals and so on, make sure you tune in. Surprised by the amount of views so far given the size of our channel. It's a hot stop. So not you just yet. But make sure you do that.

If you haven't done it or did it a while back, giving us a review on your favorite podcast platform, definitely helps new people find the podcast. So thanks a lot for listening. We will be back on Monday. The Canadian Investor Podcast should not be construed as investment or financial advice. The host and guest featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.