Yet Another Value Podcast - Bireme Capital's Evan Tindell on growth tailwinds for African Telecom - Airtel Africa $AAF.L

Episode Date: July 21, 2023

Evan Tindell, CIO of Bireme Capital, joins Yet Another Value Podcast today to share his thesis on Airtel Africa Plc (LSE: AAF), a leading provider of telecommunications and mobile money services, with a presence in 14 countries in Africa, primarily in East Africa and Central and West Africa. For more information about Bireme Capital, please visit: https://www.biremecapital.com/ Evan's Tweet thread on Airtel Africa: https://twitter.com/evantindell/status/1666503901229580291 Evan's blog post on his Airtel Africa thesis: https://www.biremecapital.com/cio-corner/airtel-africa Chapters: [0:00] Introduction + Episode sponsor: Stream by Alphasense [1:57] What is Airtel Africa $AAF.L and why is it interesting? [5:55] $AAF.L mobile money business [11:17] Spin-off IPO of mobile money business [12:47] $AAF.L risks [15:53] $AAF.L current valuation[20:15] Currency risk [24:04] $AAF.L Political risk / history of nationalization / tax on mobile payments [34:20] $AAF.L business model risk (being the T-Mobile in their markets [37:37] Airtel Africa vs. MTN Group [40:23] $AAF.L controlling shareholder - Bharti Airtel [45:47] Understanding emerging market economies and price sensitivity amongst consumers [48:56] $AAF.L product diversification risk [55:33] $AAF.L "no one cares" valuation risk Today's episode is sponsored by: Stream by Alphasense Are traditional expert calls in the investment world becoming obsolete? According to Stream, they are, and you can access primary research easily and efficiently through their platform. With Stream, you'll have the right insights at your fingertips to make the best investment decisions. They offer a vast library of over 26,000 expert transcripts, powered by AI search technology. Plus, they provide competitive rates on expert call services, and you can even have an experienced buy-side analyst conduct the calls for you. But that's not all. Stream also provides the ability to engage with experts 1-on-1 and get your calls transcribed free-of-charge—all for 40% less than you would pay for 20 calls in a traditional expert network model. So, if you're looking to optimize your research process and increase ROI on investment research spend, Stream has the solution for you. Head over to their website at streamrg.com to learn more. Thanks for listening, and we'll catch you next time. For more information: https://www.streamrg.com/

Are traditional expert calls in the investment world becoming obsolete? According to Stream, they are, and you can access primary research easily and efficiently through their platform. With Stream, you'll have the right insights at your fingertips to make the best investment decisions. They offer a vast library of over 26,000 expert transcripts powered by AI search technology. Plus, they provide competitive rates on expert call services, and you can even have an experienced by-side analysts conduct the calls for you.

But that's not all. Stream also provides the ability to engage with experts one-on-one and get your calls transcribed free of charge, all for 40% less than you would pay for 20 calls and a traditional expert network model. So if you're looking to optimize your research process and increase ROI on investment research spend, Stream has the solution for you.

Head over to their website at streamrg.com to learn more. Thanks for listening and we'll catch you next time. Hello and welcome to yet another value podcast. I'm your host, Andrew Walker. If you like this podcast, it would mean a lot if you could Rate, follow, subscribe, review wherever you're watching or listening to it. With me today, I'm happy to have on for, I think this is the third time. My friend, it says, is it Lena in the Zoom chat, but it is Evan Tindel?

Oh, that's, that's hilarious. Yeah, I'm never, I never do podcasts on my iPad, but I'm traveling. So I have my, I guess, Linnea is my daughter. So, yeah, that's funny. I like, well, look, I appreciate you coming on traveling. I've been really excited, really looking forward to this. I think you could probably tell by all the DMs and notes I was sending you in prep for this podcast. But before we talk about the company we're going to talk about, let's quickly disclaimer.

Nothing on this podcast is investing advice. That's always true. But today we're going to be talking about a London listed stock with basically all of its assets in Africa, which is obviously a developing market all across Africa. But both of those carry a little bit of extra risk versus a lot of the domestic stocks we generally talk about. So people should just please keep that in mind. Not investing advice. Please do your own work. Evan, the company we want to talk about today is Airtel Africa.

you had a great note on your blog about two or three months ago detailing the thesis for Airtel. I kind of came upon them separately and then realized you were in them and I wanted to have you on. But I'll just pause there and say, what is Airtel Africa? Oh, I'll include a link to your blog in the show notes, obviously. But what is Airtle Africa and why are they so interesting? Yes, so it's a African telecom company. It's owned by Barty Airtel, which is a pretty, extremely large telecom company based in India. own, I think 55% of the shares outstanding.

And it's a very interesting asset because, I mean, just the telecom business itself is interesting because the African telecom industry has a number of things that we don't really have in the U.S. One, they have population growth. Two, there's this huge tailwind of, you know, increasing penetration of data use. Like, you know, still a minority of subscribers have data activated. and even just in terms of number of sims per population, SIM cards per population,

it's like less than 50%, whereas in the West it's 100% plus. And so despite the fact that you have these kind of tailwinds to growing the business, in a track record of growth, right? Like they've, you know, I think when they bought the asset, it was like 75 million subscribers,

something like that. And now it's at 140 million subscribers. And so despite that those tail wins, you have something that's trading for seven times free cash flow, something like that, seven or eight times earnings. And so it seems like, to me, it appears to be a really well-managed business in the telecom space in Africa. They're sort of, in a lot of markets, they're kind of like the challenger, like the kind

of T-Mobile-esque type operator where they're super efficient. They have a little bit lower ARPU and lower pricing than MTN in most places. MTAN tends to be the dominant one, although they actually, Airtals in 14 different markets. I think most of them, MTN is not in, actually. But in a lot of markets, they're kind of like the, you know, the growing number two player. And then similar to MTN, they have a very interesting business kind of under the hood, which is this mobile payments business, which I'm sure we'll get into, where I think on a run rate basis, they have over $100 billion transferred on $100 billion U.S. dollars.

Obviously, it's transferred in local currency, but 100 billion U.S. transferred across their network and they generate about 700 million of revenue and over 300 million of EBITDA on that on that on that business and so you know five billion market cap with a couple billion of of of net debt um for me that just seems insanely cheap uh you know even if we looked only at the mobile even if we looked only at the mobile payments business i mean it's gone from uh you know 100 million in revenue to 700 million u.s it's all it's all one of the nice things about their accounting is it's all done in U.S. dollars. So it's going to 100 million to revenue to 700 million. In some of their, in some of their markets, like 60% of their

subscribers actually use the mobile payments business. And in other ones, it's like 15 to 20%. So I think there's a pretty long runway for growth. And so I just think, I mean, seven times earnings is kind of insane for this business. I mean, yes, it is Africa. You'd have to worry about currency. You have a controlling shareholder. So there's all kinds of. obviously hair on it, but as far as if you, I think if you read the financials, if you just read the financials, you just looked at the, the mobile payments business, you would think that it should trade at 20 times earnings, is my guess. Like, yeah. Look, I will be honest. I love this idea. But as you said, there is a lot of hair on it and a lot

of worries, especially, there are a lot of worries that come with. I guess let's start with, let's start with the sexy stuff first, actually, right? So you mentioned the mobile money business. which has grown quickly, it's doing about $350 million in EBITA over, and again, that's U.S. over the past 12 months, growing rapidly. I think the real sexy part of this, one of the sexy parts of the story is, hey, they might monetize and crystallize value of the mobile money business. So do you want to talk through that? Yeah, so they put out a plan or they put out a goal to IPO the mobile money business by, I think

this at the end of 2024. Was it 2024 or 2025? I actually don't remember. I think it was 2020. From memory, they have sold a stake in the mobile business to TPG and a few people. They have to IPO that. They have to IPO by the end of 25. I think from memory, one of the things I found in the AR is the management team gets like

100% of their salary and a bonus if they IPO Airtel money by the end of their fiscal 2020. I think fiscal 2024. It might be calendar. But yeah, so they're really incentivized to get this. Yeah, so they sold, yeah, they sold, I think, a 25% stake to TPG, I think MasterCard and a couple other, Qatar holding and Camara investments, too. I don't know who Camara is, but yep. And so I think, I think the valuation was $2.5 or $2.6 billion on that, on that transaction,

which honestly, now that it's doing $350 million, and I mean, that was, you know, that was a year or two ago. So, but still, it feels, that actually feels pretty, like they got a pretty good, great deal of those investors on that, on that purchase. I mean, now it's doing 350 million in EBITDA. I mean, if it was at this thing, if you looked at the financials and this thing and the mobile money business trading in the US, it for sure would trade at, you know, five, six, seven, I mean, if they traded at seven billion, it would be 20 times EBITDA. I mean, it's not, it's, it's, let me give one push back there. So I, I actually don't disagree with you, right? You see this thing and it's literally like hockey stick up into the right, growing great

demographics, all this for the mobile payments, right? But one thing that did jump out to me is, Hey, if I just told you, hey, Evan, I know of a company that got a $2 billion. They're a fintech player. They got a $2 billion evaluation in March, 2021. What do you think that company is worth today? You and I would say, oh, well, you know, without looking to finish, it would be like, 600 million, 400 million. Did it file for bankruptcy? Was it a spec?

You know, so I do look at that $2.5, $2.6 billion. And I say, oh, that is like seven times current EBITLL, less on a run rate, given how much they're growing. But then I'll say, oh, well, it's Africa. and March 2020 was a pretty good time for fintech. Like, how should I look at that internal valuation, you know? Yeah, that's a great question. I mean, I think it would, I think that would be a more, probably more relevant comparison if it was like a public market valuation in 2021.

I think my guess is that TPG thought they got a steal. And, you know, obviously when you have MasterCard coming in as well, Airtel probably thought they were, I'm guessing, they thought they were giving them a good price, but it's a minority of the business. And, you know, they can, they can partner with MasterCard to grow the business across Africa. And so they thought they were getting, you know, some add-ons on top of the valuation, I would think. But, yeah, and I mean, I think most of the things we would be comping it to, like I'm just thinking of a random company that we, were short a firm, like the other, like every other fintech had negative EBITDA in 2021, right? I mean, like the vast majority of these businesses were, you know, clawing and scratching to

acquire customers that they could then lend money to at like 7% or whatever, depending on the, or not 7%, but, you know, it's like they basically was like a customer acquisition game of, of like not really prime customers and slapping a sales multiple on top of it. And Hope Square bought you for a huge premium before all the music stops. Yeah, yeah, exactly. And then Hope someone just ignores the underlying economics of the business and just pays an even bigger sales multiple. Whereas here, I mean, you had someone paying 10 times EBITDA and, you know,

the EBITDA is up by 50% since then. So, yeah, although, yeah, so I think it doesn't quite. I don't think it's quite a good comparison, yeah. And now, a quick word from our sponsor. Are traditional expert calls in the investment world becoming obsolete? According to Stream, they are. And you can access primary research easily and efficiently through their platform. With Stream, you'll have the right insights at your fingertips to make the best investment decisions.

They offer a vast library of over 26,000 expert transcripts powered by AI search technology. Plus, they provide competitive rates on expert call services, and you can even have an experienced byside analysts conduct the calls for you. But that's not all. Stream also provides the ability to engage with experts one-on-one and get your calls transcribed free of charge, all for 40% less than you would pay for 20 calls in a traditional expert network model. So if you're looking to optimize your research process and increase ROI on investment research spend, Stream has the solution for you. Head over to their website at streamrg.com to learn more. Thanks for listening and we'll catch you next time. So I guess I think we've heard a lot. So one

the really sexy things that would attract investors to it, the low valuation all this, but you've got this really fast-coring mobile money business, which Airtel owns 74% of after they sold the stakes that, again, I kind of mentioned earlier, the management team, they said they're IPOing, the deal with TPG says they'll IPO it in the next two or three years. The management team's very incentivized IPO it because they get a really nice bonus if they IPO it. So you could have this real crystallization of a sexy growth story value unlock in the next, could be at the end of this year.

It could be next summer. It could be by the end of the next year. But it seems like it's almost certainly coming. Yeah. And I mean, they've definitely, you know, this management team, it is, it is controlled by a foreign, you know, by a Indian company. So you have, and you don't have any control. They own 55%. But, I mean, in terms of, you know, paying dividends and even this whole plan of spinning off the mobile money business.

I mean, it's and selling a minority stake. I mean, it's kind of designed to, it. appears very well crafted to sort of, you know, crystallize the value and kind of reveal the value of the of the business. And to my knowledge, they've given no indication that they're not like going full fully forward with the plan. So yeah, I mean, I think it seems like a year, year and a half and you're going to have, you should have an event there, which, you know, kind of reveals how undervalue the stock is right now. I want to go to some of the risks because the risks are really important to think about here. But I guess since we've just been talking about mobile money,

maybe you should just quickly highlight the sum of the parts here, right? And the stock is trading for a little above. Is it 100 pence or 100 pounds? I can never remember what it is in London. But it's, it's, well, it's funny. It's pence. I try to put the idea in some zero. And I, and I didn't realize that they were, they were like going to have it be in pounds on some zero. So I put, I put my target as 300 as 300. And so, and so I had a friend be like, or my business partner was like, I don't think a 30,000 percent return target is really that reasonable. I love the idea, but shoot for the stars, bud, shoot for the stars. Yeah, so you buy it in pence, yeah. So trade's about 100 pence. What don't we just quickly talk about how you look at

the sum of the parts here? Yeah, so I will say this. First of all, I, some of the parts get a lot of hate. I'm not big on some of the parts. I think it's really important that you always need to pencil out a an actual like it needs to translate to IRR right and in this case I really think it does because you know you can value some of the parts but you know the mobile money EBITDA is going to

translate to free cash flow you know pretty quickly so that's just my some of the parts caveat but I mean you know let's say so 350 million of EBITDA in the mobile money business I mean it depends what you think it's worth if you think

it's worth if you think that's worth if you think that's worth, you know, five billion dollars. That's basically the, you know, the market cap of the, that's the market cap of the firm right there. And then you have another, you know, two billion, you know, around two billion of EBITDA in the, in the like core telecom business, um, against, uh, you know, against one point something billion of, of debt. And, you know, we could debate how you want to look at at the leases and whatnot. There's, I think, I think one point nine billion of, of lease liabilities, which I don't like to include the enterprise value but you know accounting rules tell me differently um and so uh you know you have

two billion of of telecom you a dollar that i think should trade for i mean if i was i mean it's 50 you know it's like they do like a 50% margin versus Verizon at 35 so it's it's a pretty good business i think it's for at least five times um so that's uh you know that's 10 billion so 10 billion plus 10 billion plus 5 billion is 15 billion less 2 billion a debt is 13 billion is 13 is 13 billion and so you know on 3.8 billion shares outstanding it should be you know trading for over over 300 pence I think I mean easily the the only two differences I have uh is I take out the you can tell me we can live workshop this I take out the 26% that TPG owns so of the mobile money business oh yes yes yes that would not have a billion off but aside from that I was just

using their net debt number when I built a simple thing but when I do both those adjustments, I still get like 250 pence per share. So instead of 3x outside, it's 2.5x or whatever, but it's still quite empty. Let me ask some questions on this. So you mentioned the, I guess just sticking on to some of the parts, and there are some important other questions we have, but you mentioned five times EBIT off for the mobile business. And one thing that jumped out to me, and I was talking about this with a friend yesterday,

is, hey, now, Airtel's not killing their customers with lead as Verizon AT&T and stuff. be doing, I don't know. But, you know, Verizon trades for about six times EB-DOP, right? And you could make an argument, hey, Airtel's not killing their customers with lead. Air tells a real gross story, you know, their customer base is young. A lot of it is still on 3G. They've got a clear gross story. It's a 4G, selling more services. Plenty of room for Arpoo's to grow as as the population gets a little wealthier. There's not a lot of substitution because these are very poor countries. They couldn't afford satellite service. They can't afford Like, there's a great story built in.

But I could also say, hey, Risen has developed market country with no geopolitical risk, macro risk. And it trades for six times EBITDA. Like generally developing market countries trade for lower multiples than developed market country. So like when I look at that, I don't know where, I don't know what the right multiple is, right? But could you talk me into, hey, maybe it should trade for four times giving these risks

of all the developed. I mean, every developed market telecom trades for like six X. So I just don't know. Yeah, you can. And I mean, it's, there's a bunch of puts and takes, right? So on the plus side, I mean, you mentioned this. On the plus side, they have demographic growth. They have penetration within the population growth.

They have the essential nature. I mean, this is people's only access to the internet, right? Like so from a, there's no substitution, like you said. I think EBITDA translates more closely to free cash flow than for Verizon. The EBITDA margins are higher. I think they have a better track record of growing market share within their markets relative to their peers. So in that way, maybe the better comparison is something like T-Bolble, which trades out a higher multiple. So I think everything, almost everything except currency and Africa, which obviously are tied at the hip,

would say that it should trade at a higher valuation. like, you know, I think if you only looked at the numbers, you would be like, this is a way better business than Verizon. Yeah. Like you would be like, there's no, this is, this is so much better than Verizon. This is as, and, and, you know, and the numbers are translated into U.S. dollars. So we can get, there's some, there's some tricks with that, given some of the currency moves we've seen recently. But I think X, everything else besides the fact that it's developing, should mean it's

trade at a higher multiple. And then, you know, so maybe maybe the fact that it is Africa and you have to worry about currency means that it should trade at, you know, the same multiple. I think I'm hard pressed to think it should trade at much lower. Although, you know, arguably like the math that we just went through would say that, you know, the market price says it's trading at like one times EBITDA or half a time, half a turn of EBITDA if you net out the mobile money business. So certainly that seems too low. And, you know, so I think anywhere between, anywhere between three and six times EBITDA, you'll end up making a lot of money. And it could be, it could be higher.

It's also one of those things where it's like, you know, I think with coal companies, like, okay, if a developed market coal company is trading for two times EBDA, and you're like, I want a discount on a developing market country's coal. It's like, I understand where you're coming from, but two times EBIT is like two and a half times cash flow. You can't go much cheaper than that because eventually it's just like, hey, I want to trade this at four days worth of free cash flow or something, you know, like, you just can't get much of it. And I think the the cheaper, the absolute valuation of the business, the more the valuation implies that like there are problems with the or there are issues with the business in terms

of like for Verizon capital intensity, competition, substitution, that will dominate more than like the geographic location of like I think if all the competitors were trading at 20 times Zibata, right? Then I think you have more of an argument of why it should trade for much cheaper. But even here, like those things that I read off, like most of those things are not are actually better in Africa. So I think you're, yeah, you're hard for us to say, say it should trade at two times Zibata, in my opinion. Let's quickly talk currency because you've got to stock that trades denominated in Pence. They report are all of their financials in USD, but obviously the local markets are, you know, have different currencies. So let's talk about currency. So let's talk about

currency risk and how you think about that here. Yeah. So it is, it is substantial. Um, the, the biggest, I mean, just as like a broad view, I mean, most of the currencies that they've, that they operate in, um, I don't know. I forget how many there are in total, but they operate in 14 different countries. And a lot of those, some of those are in like currency blocks. Um, and one or two of which are actually pegged to the euro, which is nice. Um, and then a couple of them, but then most of them are free-floating or semi-free floating. And they've all depreciated against the, against the dollar at sort of a mid to high single-digit rate,

except for one or two, which have been worse than that. You know, over the past, you know, depends on how far you go back, five, 10, 15, 20 years. Like, it's been pretty consistent, kind of high single-digit rates. Now, I think there's a couple factors that help out with that. I mean, the one is the financials are in U.S.

So any currency effects are obviously, for the most part, well incorporated in the financial statements. And they've still been able to grow on a US dollar, on a US dollar basis despite that. Two, I mean, from a purchasing power parity standpoint, I mean, you would expect them to be able to, I mean, the reason why, the reason why a huge component of currency moves is you have local currency inflation, which means. prices go up in local currency and then uh you know and then but you know roughly in dollars purchasing power parity would would dictate that they should be roughly the same um so you have that factor where they should be able to grow pricing in local currency if there's that much inflation and finally i mean you have this major tailwind of people using more data using more minutes and again it's priced by minute and price per per gigabyte um so that is also a tailwind although

So I actually make the argument that, like, it's very important that they have that because purchasing power parity is nice, but in a lot of these countries, the prices for telecom services are actually regulated. So it's a more sticky. I mean, they have gotten through some price increases in places, but it's more, it's stickier than, you know, it's stickier than, you know, it's stickier than, like, some random commodity that's not regulated by the, by the government. I really like that point in your write-up that, hey, you know, because data is inherently

deflationary as you get more services and you go from 3G to 4G. Like if you've got a lot of these are, and correct me if I'm wrong on any of this, a lot of these are regulated on price, right? The local government says, hey, you can't charge more than a dollar per gig. It's like, great. Our prices are actually deflating. So it's a nice hedge against regulation. It's a nice hedge against inflation as you're saying. It's just a nice hedge in general. Not that is perfect, but it's nice. Yeah. And I mean, if you look at any developed market, And what you've seen is prices deflate massively per gigabyte. So if they're even allowed to just hold it flat, then that's basically like inflationary pricing that they're able to take advantage of.

Let me go to related to the currency risk, right? So the big headline risk here is, hey, this is Africa. A lot of these are developed markets. A lot of these are poorer. You know, the governments are less stable. And some of that actually is a benefit. Like I think one person asks, hey, what about Starlink? And the answer to Starlink is, hey, a Starlink receiver costs $1,000 to send.

And these people are paying $2 per month for their mobile service. You know, if Starlink wanted to subsidize them, they could subsidize them for a cool 20 years worth of mobile revenue or something. So it's nice and that. But just going to the political risk, right? I was talking to a friend and he said, hey, if you're going to invest in these, I understand you're looking at and you're saying, look at the growth here. I was looking at Helios Towers, which is another, said, hey, this could be American Towers, AMT, 20, 25 years. ago, which went on to be like a hundred backer. This could be huge. And he said, look, I understand you're putting your business analysts hat on. But what you need to do is you need to go put on

your historian and geopolitical hat on and say, hey, why is the government not going to seize all of these from me? Why is this economy not going to collapse into civil war and all this sort of stuff? So how would you respond to that type of risk? Yeah, I think, I think there, this was something that we thought about a lot. And I think there's a number of reasons why I think it's it's unlikely that a government would would seize the assets. And the first is, the first is that these are super critical infrastructure for just the operating of the entire economy. And I mean, I don't think the government really wants to risk some type of,

the government doesn't, most governments don't want to risk the telecom system malfunctioning after they took it over. I mean, of course, you could just, I mean, you could concoct all sorts of scenarios where the government just like, you know, steals it but keeps the people operating it and then sells it to the highest bidder or something. But I think even that risks, you know, it risks disruption to service that I don't think politically is is very tenable, especially considering how vital these systems are to the development of the African economy. Two, they already, the government already has huge hooks into these things in terms of like economic experience.

exposure to the development of these assets. And those are, A, is just profits taxation. I mean, part of the valuation is that these companies pay roughly 40% income tax rates across the business. I mean, that's what Airtel ends up paying. You also have spectrum payments that companies have made. I think last year they paid, you know, $300 million for spectrum in Nigeria and one or two other countries and so governments are able to to monetize it that way um i think you can uh you can

theorize that at some point down the road um the you know maybe the the spectrum rules will become so punitive that um you know that it'll take increasing amounts of of of their profit to kind of to kind of deal with that but i don't know it just doesn't it doesn't seem it doesn't seem likely to me for them to want to risk disrupting the functioning of these assets, given how vital they are. And also in a few cases, you actually have some subsidiaries trading on local exchanges. I don't know if you saw that, but I think it's maybe like Malawi and Tanzania. They have minority stakes that trade on local exchanges. And so the government, I don't fully know the reason.

I think the government basically put in rules with respect to local ownership in an effort to kind of spread the wealth around in terms of, you know, making sure local investors profit from the, you know, the growth of these businesses. And so I think in those cases, that will also kind of, you know, that will tie the hands of the government a little bit. You know, they're already, their investors are already participating. And so they would kind of, they would be hurting their own citizens if they, you know, if they overly burdened these businesses with, with taxes. One friend who, when I told him you were coming on for Airtel and we were talking about it, he said, hey, I told him I was worried about nationalization,

said, go look at the history of nationalizations. Very much what you're saying, but go look. The history of nationalizations of telecom companies are a disaster. And when your telecom nationalization is a disaster, it's very obvious to your residents. And that's the type of thing that, you know, get people out on the street, especially now, if I can't watch my Netflix on streaming, like, that is the type of thing. Well, there's two hours in my free time gone. I guess I can go ride in the street.

Like, it's something that is very obvious. And if you look recently, people, even the most socialist countries now, generally don't nationalize the telecom company for exactly all the reasons you're laying out. Yeah, and I mean, like, if I can only imagine, like, in, in, in Kenya, um, Safaricom's M-Pesa network is, like, does more than the GDP of Kenya in like peer-to-peer transactions, similar to Airtel money. And I mean, if that went down for a week in, in Kenya, I mean, the entire economy would basically, or like huge swaths of the economy would just see, cease to function basically. And I doubt that that's, you know, something that even the most hardened dictator would want to risk. I mean, they actually had a, I think it was, I think it was, I forget which country,

maybe it was Uganda or one of the countries put a mobile, a tax on, like a one or two percent tax on mobile money transfers a couple years ago. And then there was such an uproar that they actually ended up, they ended up removing it. And I think it just goes to show, I have sort of remembered which country that was, but it just goes to show that, like, you know, if you mess with people's, don't mess with people's phones, you know, I think that's probably a pretty good rule. What about, so you mentioned the tax and the mobile payments, but I, I guess there's tax on mobile payments is one thing, like that's shutting a whole economy down.

We can talk about seizure of that asset in a second, but what about tax on the networks, right? Like I worry about not necessarily men and with guns going and seizing all the towers and seizing the telecom. But I do worry, like, almost the frog that boils slowly where, hey, nice telecom company you got there. You know, it's really important. We need to fund the deficit. Last year, it was 10% taxes on telecom. This year is 12. Next year is 14. And then suddenly you and I are talking, you know, eight years from now, it's like, oh, well, Airtel pays 40% of revenues and taxes in all these countries because it's not that they're seizing them. They're just taxing all the economic profitability out of them. Yeah, I mean, I suppose something like,

that is, is I think possible. I mean, I feel like that would also involve pretty large political risks just because, I mean, you need, you need these companies to invest in the future, right? Like, they're, these companies are like some of the, um, the most important, uh, technology businesses in, in Africa in terms of, uh, you know, just like bringing Africa into the 21st century, 22nd century. One of the century, some century. into the into the current century in terms of you know in terms of digitizing the economy you need them to have capital to um you know to to to to lead to build the towers to lease the towers to invest

invest in r and d and build the next generation of infrastructure i mean you have airtel um is also working on uh i mean air hotel has 40 sorry 70 70 000 kilometers of um of of fiber that they've that they've built i think um and so uh no, maybe seven, no, seven, maybe seven, I think it was 75 for, for memory, but yeah, something. Okay. It's a lot of, it's a lot of fiber. And so, you know, I think these, I think they want, I think they're, I think they want these businesses to be able to invest. And so the only way to do that is to, you know, is to let them make profits. You know, I'm of two minds there, because I do agree with you just that you think domestically, right? The most powerful lobbies

tend to be the telecom lobbies, among the most powerful, because they employ so many people and they invest so much money. You go to the representatives like, hey, we're a top three employer in your district, and we also make the largest capital investments consistently in your district. The lobbying arms tend to be very, very powerful when you get that. It's going to be the same here, right? These might be one of the five largest employers in every country. They make hundreds of millions of dollars investments. They need to buy spectrum. But at the same time, there is a little bit of a difference of, hey, we nationalize the telecom company and all the phone service shutdown versus, hey, we're taxing the bejesus out of them. So they kind of stop, stop laying fiber

and we're never going to get upgrade from 3G to 4G. Like, there is a difference. But I do think you're right where if you employ 3% of the country's workforce and you've got that powerful, it's going to be very difficult to tax you into oblivion. I don't know if you want to say I also think, I mean, you know, these businesses have been operating in Africa for, I don't know, what, like 15, 20 years now. And we haven't really seen, there's many countries in Africa. I mean, we haven't really seen any of the countries. I mean, multiply 20 years by whatever, 50 countries in Africa or whatever. And, I mean, you know, I don't think we've seen any large-scale taxation on the, on the, on the,

the scale that you're talking about, where it would just crush the business. I mean, it's been much more around the edges and reasonable, it seems. I mean, obviously, that can change at any time. But I think the history would indicate that that seems pretty unlikely. What about nationalization of the mobile payments business, right? Because that is something that's much easier to nationalize. And we have seen that. I think we've seen that or seen attempts at that elsewhere. We're, hey, it's very easy. The codes in the cloud. You just say, it was your code. now it's our code. Not taxation there because that shuts the thing down, but just nationalization or lots of political influence. Hey, why don't you stop allowing payments to our political

opponents or it's a business we don't like? I think we've seen that in some kind of Russian vassal states and that type of thing. Yeah, it feels like a risk. I think most of the most of the comments would still apply. I mean, yeah, you don't, it's not like, it's not going to involve like operating towers, but it's still, I mean, it's, uh, you know, the code is, is in the cloud, but there's data centers and there's customer data and there's, I mean, it's just, I don't know, I, I, I think it's much, it seems to me much more likely. Like, if I'm, if I'm putting a dictator at my dictator hat on, it just seems much more likely that I'm going to want to, that I'm going to want to tax it. Um, but yeah, yeah, a different business risk.

You mentioned that Airtel tends to be kind of the T-Mobile in their markets, right? Which sound they're the second player they tend to be kind of the disrupt maybe not the disruptor is not the right turn because team mobile was so unique but they tend not to be the largest player and until team mobile came along like it tended to be hey being the largest player is the best right you advertise your spectrum costs over more customers you advertise your fixed cost over more customers like it in a lot of business it's the best to be the largest especially in a heavily fixed cost business does the fact that they tend to be the second place player again they're very cheap so a lot of it is built into the multiple but could

Could that limit your returns over time or could that hurt them in other ways? Yeah, I mean, I know, I know a very smart person that I was talking to who has a larger position in MTN. He actually does own Airtel as well, but he was saying that he likes MTN more because he thinks that the, especially the mobile money business is likely to be sort of a winner take most type thing where the largest player, you know, the largest player just has the best business. I don't think that the data bears that out so far in the mobile money business in Africa. I mean, they've been growing their mobile money business and subscriber base faster than MTN over the past five years. They're number two in a lot of places, but they've also gained market share and closed the gap in some others. And I think I think in Uganda now, they're now about to cross. and become the largest player.

And if there's a couple other countries like that where they're kind of encroaching. And to me, that indicates that, and this is where I think there's a similarity with T-Mobile, they just are a little bit better operationally and with customer acquisition, branding, cost-wise, like design of the network, just overall. And actually, that was kind of, in India,

Airtel was known to basically, They outsourced everything from the very beginning in a very unique and contrarian way, like, you know, 30 years ago, whatever, when they were starting. Like everyone said, oh, you have to own the technology and blah, blah, blah. And they just said, listen, we're bringing in Erickson. We're bringing in Nokia. We're going to, like, have someone else do this. We're going to focus on what we know best, which is marketing, acquisition costs and, you know, pricing and designing, you know, just everything except the core technology. and what they ended up with was a lower priced service and eventually, you know, 300 whatever

million, 350 million or whatever it is, subscribers in India. And so I think there's, you know, there is plenty of evidence that they're extremely shrewd operators and that they've been able to grow market share despite being the number two, the number two player. And so I don't particularly worry that that's going to cause them any long-term harm. And if anything, it just shows their shrewdness that they've been able to overcome that to date. So that actually, that transitions Leslie. So by the way, the investor of yours who mentioned NTN, I have a feeling I had lunch with him yesterday.

And he helped me prep a lot of these questions. But let me just quickly ask on MTM. Why Airtel over MTN, right? MTN's larger. They've got the mobile payments business. I think they might trade a little bit cheaper than Airtel. They're both trading quite cheaply, obviously. But why did you use Airtel?

Uh, so a couple of reasons. One is I, I, if you just look, if you look back at the track record over, over, you know, the past five years, I, I think the numbers, the numbers tell me that Airtel has just executed better in terms of subscriber growth, profitability, and even growth of the, of the mobile money business. So that's like, that's the main thing. Um, the valuation is interesting because I actually didn't, um, I think our, our, our common friend, one of the things he pointed out to me was that MTN has a bunch of sort of hidden

assets that don't necessarily aren't obvious in terms of enterprise value in terms of like stakes in other businesses and, you know, non-telecom businesses that are interesting. And so I thought Airtel looked cheaper just on the pure sort of EB-to-Ebit and like price to free cash flow metrics that I was looking at. So it may be, it may be that my second point, which is that it's cheaper valuation may actually not be true. But I just think, I think if you look at the, I think if you look at the results over the past, you know, five years or so, they've just executed better. And it just seemed like a, you know, therefore a cleaner story. Like to be able to grow U.S. dollar EBITDA and revenue in the way that they have, despite all the

currency moves, is just really impressive to me. That's interesting. I don't disagree or I haven't dove into MTN, so I can't like disagree or agree with anything strongly, though. I think everything you laid out makes sense. I am surprised you did not mention the IPO of mobile money, because I know you and I are both. Oh, yes. We do like a catalyst. And you can tell me if you were just overlooking it, but MTN does not have a plant's like crystallized value and Airtel does. I thought that might have been a real differentiating. No, that's, that's actually a good point, something that I had thought of in the past, but just completely forgot in the last two minutes when I was talking about it. Yeah, I mean, I think.

They've shown with their willingness to sell the minority stake and then plan for the IPO. They've sort of shown, and I think it's actually almost more important than the catalyst of that specific catalyst is just that they're kind of showing themselves to kind of care about shareholder value and kind of revealing, not just letting the share price languish at this super cheap, some of the parts multiple, but like actively doing something to sort of release the value in terms of, in terms of. with IPO. That just sort of demonstrates that they're going to be good stewards of capital, I think, which is important. Let's talk to care about shareholder value. So there's obviously a shareholder who owns 55% here. You know, anytime I just threw out, hey, we've got a African, we've got a company that operates completely in Africa, all this sort of stuff, that raises. And they say, oh, yeah, and by the way, they're a controlled company. You say, oh, my God, like I can't, I feel like I can get my face ripped off. So do you want to talk about the controlling

shareholder a little bit? Uh, yes. So, uh, so, so the control and sharehold is, is, is, is Bartieritel. Um, they were, uh, they're, they're, they're an Indian telecom company. Like I said, 500 million subscribers. Um, and they're just, uh, what, what I generally know about their, their business is they're thought to be very, um, efficient operators in, in, in India. And, you know, they, they bought this asset in, I think, um, there was a couple of transactions. Um, um, um, The Kuwaiti telecom company bought it in 2010, I believe, from a Sudanese company, I think is what happens. And then sometime between then and 2017, Barti Airtel, I don't know if you remember the exact date of when they purchased it. So yeah, five or six years later, they bought it. And yeah, I think I've been pretty impressed with how they've run their business so far. They give me no indication. I mean, anytime you have a controlling shareholder, you're kind of like reading the tea leaves in terms of what they intend to do or whether they intend to do anything shady or whether you, like you said, you're going to get your face ripped off somehow.

And just in the way they talk, bringing in the Western investors as minority shareholders promising the IPO, they pay roughly $200 million of dividends every year. They don't try to like get the money out in some kind of shady, you know, corporate party, yeah. related party transaction, they're just paying the dividends out to all the shareholders. So in that sense, it just makes me a lot more comfortable. And the fact that they're publicly traded in India, I think also is probably better than it being a private company that doesn't have to answer to anyone. It's also probably nice. And I haven't done a ton of work on them, but I did look at the stock chart, like adjusted

for U.S. dollar and stuff of the control shareholder. And it is a stock chart that I would not mind, I would not mind owning that stock chart. The IPO the mobile money business, right? It could be, it depends on the valuation and how much they IPO and everything, but it could easily be hundreds and hundreds of millions of dollars coming into the company. Do you have an idea for what they would do with that money? And would they eventually look to spin out the mobile money business? What would the use of proceeds to be there? Yeah, that's a great question. I don't know. I mean, the first, I mean, the simplest thing would just be to pay out of dividends, you know, that would obviously go back into the coffers

of, you know, both shareholders such as myself and, you know, the parent company in India. That would be very simple. They've been paying down debt over the years and also trying to move debt from the holding company down into the operating companies, which helps them, you know, that helps them hedge some of their currency risk if it's like local currency debt. It also, it also, you know, makes the risk of any one country kind of going rogue, you know, less for the, you know, the holding company itself. If you have the debt, you know, down closer to any to the operating companies. And so potentially they could just pay off all the holding company debt.

I mean, that would be nice. You know, that would save them a significant amount of interest expense. You know, right now it's like a couple hundred million dollars, I think, of interest expense that they pay. And so, yeah, I think there's a number of interesting things. I mean, I love for them to buy back the stock, although I don't know if it's definitely not liquid enough for them to put a, you know, a billion dollars for work. Well, your control shareholder is in 55%. I wonder if they would start taking down.

Like, do you know if Barty is going to try to reduce their stake over time or what do you think happens there? That, that I have not heard them say anything about. I mean, you know, if I was them, I would want the price to be much higher. before I started doing that because, you know. That's how I feel about all my stocks. I want them to be a lot higher. Right.

Right. And if you owns two billion of one of them, it probably would, yeah, it would probably would put it each time. It's also in your control, though, right? Because if you own two billion, you can start pulling levers to crystallize as much value as possible as you need to get the stock higher. I unfortunately cannot do that with any of my companies currently. Switch stuff that we've kind of touched on a little bit, but that I want to make sure

we go, we hit before fully. Number one. we said Africa. I mean, right now, you know, inflation is roaring. And for U.S. consumers, it sucks, but it's not the end of the world. But, you know, you hear all the time, hey, the people who get hardest by the Ukraine war is the people in Africa, right? I think Airtel said in one of their things in a lot of our countries, 40% of our consumers' income goes to food. And, you know, a decent bit on top of that is going to go to energy. When food prices go up 10 or 15%, because Ukraine is not exporting wheat or gas and oil prices go up, like that that can cause.

a serious, really rapid recession, depression, that sort of stuff. That would probably be in the numbers already a little bit, but that doesn't look great. I guess I'm asking consumers, incredibly economically fragile, sensitive inflation, like, how do you think about that? Yeah, I mean, obviously, historically, we've seen, you know, emerging market economy is like the last 20, 30 years generally do worse. anytime there's some sort of negative, do worse than developed markets, anytime there's some sort of negative thing that occurs in the world,

whether it's inflation or financial crisis or what have you. Although, you know, a lot of the African economies are still heavily based on commodities. So, you know, to the extent that inflation comes with higher commodity prices, it could be not as bad as maybe you would expect, just in terms of, you know, the overall effect on GDP and that, you know, hopefully trickling down to the, to the common person. But, yeah, I mean, certainly I worry about, you know, the impact of currency on the business and, you know, the potential for any one currency or a group of currencies to do very poorly. I mean, we just saw in Nigeria, the exchange rate get, basically, it was essentially a fixed exchange rate at, you know, 400 something, Naira to the dollar. for a long time and the black market rate was in the 700s.

So what I actually did when I was valuing the company is I just assumed that Nigeria was going to go to 700 something. Yeah, I assume the black market rates for a lot. I mean, just, you know, like I'm, I'm a pretty free market person. I think that the free market's going to be able to set a better exchange rate than the government. So, but it was a little bit weird because they were able to expatriate some money, like a couple hundred million dollars a year from Nigeria at the old rate.

But, yeah, it turned out that they caved on that pretty quickly. So, I mean, I think you, I mean, it's always hard to predict how any, you know, broader economic event is going to affect, you know, any particular country. But I think in this case, it's, you're pretty well protected by the valuation as well as just kind of the fundamental nature of their service to the African economies. I mean, I think like post-2014, you had a really bad time. for the African economy as a whole after the oil busts, right, or just the commodities bust in general post-2014. And you saw very little, I mean, you go back to the numbers, there wasn't a ton of impact to their business

to telecoms in general in Africa because it's still, I mean, it's even at the much lower GDP per capita of Africa, the telecom pricing is still a minority of that. And it's so essential that, you know, the increased desire for access to the internet just swamped any, like, even large cyclical factors. One of the tough things about doing this podcast is it's an hour and you think you can get through a lot in an hour. But when you've got a business with two different segments and 14 countries and stuff, it's tough. So I want to be conscious of time, but I do, there are a few last questions I want to make sure I ask. We talked about mobile money a lot, right?

And my history with telecon companies, I do know, like, there's M-Pesa, has a fan. famous case study. That's the Kenyan one that was like African telecom launching a mobile money. I know that the African companies has had success, but maybe I'm too biased by the domestic companies. But like the domestic telecom companies, anything they launch is just absolutely terrible. And it tends to get run over by a, you know, small, scrappy startup that invests one, one thousandths of the resource because they're focused and they respond really quickly, they can do it. And so far, these businesses have done great in Africa. But I guess the question is, like, as the economy grows a little bit more and consumers get more access to data and

like it becomes a little bit more entrepreneurial, what's the stop that my history of, hey, telecom companies get crushed whenever they try to do anything that's not telecom, what's to stop that from happening to mobile money, you know, either a Facebook or a square or, you know, Jack Dorsey spends half his time in Africa now, what's to stop them, PayPal from launching something that comes and really tax this or them just bungling it in some way, shape, or form, or a startup taking it from them, you know, an African-based startup. That'd be great. I think the difference is in the West, anything the telecom companies did that was sort of

outside of their core business, they were basically starting from square one against, you know, well-funded competition. And there was really no synergies between kind of their core business and the other stuff that they were that they would try to do, whether that's like Verizon going into the advertising business or the TV streaming business or whatever. I mean, yeah, they already have subscribers and maybe they can cross sell to them. But there was no like, you know, there was, they had no advantage, I think, in those. And so, yeah, they got crushed by other companies. I mean, I think here what we've seen is because the mobile payments business, I mean, really,

the mobile payments business worldwide pretty much started in Africa, like with M-Pesa in 2007. And their advantage was they were, you know, they were one of the only, you know, M-Pesa rollover minutes

were one of the only, like, digital assets that, they were people's only connection to the digital world, and they were the only digital assets that people already had. And so like you said, there's case study, I mean, it's not even the case study just kind of describes what happened, but, like, you know, they were able to turn those digital assets into a fundamental first mover advantage in terms of subscribers.

I don't even think it was them, like, intentionally doing it. I think it was consumers. This was just the only thing and people did it. And wisely, it was Vodafone's group, I think, that controlled it. But wisely, they said, hey, everybody's doing it. We might as well start supporting this. And it's turned into a massive business that's beneficial for everyone. yeah i mean what people realized was i mean you know when when there's no bank accounts um you know

obviously currency is nice and it's it's it's a it's a it's you know something that kind of everyone can agree on the value on and you know it's um you know everyone everyone accepts it blah blah but what people realized pretty quickly was um you know mobile phone minutes had all all the same benefits, except you could transfer them digitally from phone to phone. And like you said, yeah, it wasn't M-Pesa just noticed that this was already happening and then kind of built a system around facilitating it, facilitating it further. But I think what they've shown is they've, you know, I think arguably, you know, one of the one of the only advantages in technology that it really exists in technology is

is network effects like network effects and first mover advantage is uh you know that that result from that um and i think you know the fact that uh air till money already has 30 million subscribers and and like they're um they have 30 million sorry 30 million users um and they have this base of 140 million user 140 million telecom subscribers that will most likely be using airtel money um at at some point in the future and i think that's just really hard for startups to go after now. I mean, I think, so the interesting counterpoint, or maybe it's the exception that proves the rule is Nigeria.

So in Nigeria, the banks basically lobbied, I mean, this is what, this is the story that most people have taken away, is that the financial institutions lobbied to kind of slow down the telecom companies from introducing mobile money for years. And so it wasn't until last year that. MTN and Airtel finally got approval to operate mobile money businesses in Nigeria. And by then, you did have strong competition and, you know, other nimble providers that were able to, you know, they were able to hit the ground running when that got, you know, when that got, you know, when that got approved. And it's been much harder in Nigeria because they don't have, yes, they already have subscribers, but everyone are, everyone knows what mobile money is, and there isn't already this, like, network effect of people having a couple

hundred dollars on Airtow and, you know, wanting to use it. It's a great story because it shows the difficulty of it. And as you said, like, it's not like the telecom companies are guaranteed to win. What happens is, as you said, first move or advantage, and they can take it. And now, a quick word from our sponsor. Are traditional expert calls in the investment world becoming obsolete? According to Stream, they are. And you can access primary research easily and efficiently through their platform. With Stream, you'll have the right insights at your fingertips to make the best investment decisions. They offer a vast library of over 26,000 expert transcripts powered by AI search

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Last question and then maybe we'll wrap it up. If I just, you've got investment here, hopefully we get the mobile money IPO in the next couple months or next year or so. If we just played this forward three or five years from now, like one of the things I do worry about is an African telecom company that's traded in London and reports in U.S. yes, it'll be nice to get dividends back, and yes, the cash flow should grow and hopefully, but I do wonder, I do worry like, hey, do you just have a situation where no one cares? You know, just no one cares.

There's no catalyst. It doesn't seem like there's a natural acquire for them. Like, yeah, we'll probably do fine because the dividends keep coming in and the cash flow keeps going up. But what if this just trades at four times, even off forever? Because just nobody cares. Yeah, I mean, I think that's kind of my thesis around why the opportunity exists in the in the first place is just kind of like no one cares because it's this weird like thing that

trades in London, but it's in Africa, but it's in dollars, but it's in 14 countries, like what's going on? And so I think that's, um, I think, I think if my, I tend to like to build portfolios of things where the valuation kind of implies no one cares right now. And if no one cares in the future, then you kind of do okay. But if someone ends up caring, then you can do really well. So I think that's, you know, a positive optionality that this, that it has at this valuation. And if it, if no, if interest trades at four times, you bet off forever, then you just get, you just end up getting the free cash flow yields, uh, or, you know, or the dividend yields paid out and you end up being fine with like a probably still double digit return.

No, that makes sense. Do you think the dividends weird? It just strikes me, you've got this fast growing African, uh, African telecom with the control shareholder. I mean, obviously they spit off tons of free cash. so they can pay the dividend, but it also strikes me, hey, should they be, I don't know, the history of cross-border telecom M&A is not great, but they've successfully done it, MTN successfully done it, should they be trying to go roll up some more markets or like maybe

it's probably too early for 5G, but upgrade faster. It's just, it is weird to have a dividend paying fast-growing company like this, you know, and maybe it's just because I'm so scared of my own shadow when it comes to a controlled African company, but in a weird way, almost that dividend makes me like, hey, am I missing something Like, are they trying to lure me in with the dividend and then it's all going to turn out to be a giant fraud Ponzi scheme run by Sam Brachman-Fried? I mean, I think, I think maybe the way to think of it is just them upstreaming cash to the parent company. Yeah. I mean, they're also, the parent company is also growing in India, right?

So they have, they have probably multiple good uses for that, for that cash flow. And, like, you know, if you have, you know, 700 million or something of free cash flow or more, in the business paying you know using 600 to kind of pay down debt and grow the business and maybe do tuck in acquisitions um and then pay out 200 million to the to the parent company doesn't seem like a very big um you know it seems seems seems seems quite reasonable um and i think it's just that it's just that it ends up being a substantial dividend yield because the valuation is so cheap but it's only like it's only like less than a third of free cash flow so well look i think we've gone our maybe a little more again as i said at the start i i just

I love this idea. It is just, you said it at the start, hey, this is a sum of the parts idea, but it's not the sum of the parts where you've got two publicly traded subs and you're buying it for a discount. It's a publicly traded part where, hey, I think they're going to, everything says, including management and incentives, they're going to IPO Airtel money and we're going to have some value crystallization in the near future. And then hopefully we get that cash back or something.

But I just love this idea. But the African telecom controlled company, it just screams at you, but it's so obvious. It's so cheap. It's really interesting. Anyway, Evan, really appreciate you coming on. I'll include a link to, this is your third appearance. I'll include a link to your Airtall write-up for people who want to do a little more. But Evan, really looking forward to the next one.

What we really need is we need Twitters to get bought out again so we can just be DM each other five times a day. And that was a lot of fun. I was going to, I was going to say our, our, I think the last one I came on and did, the YouTube title was Evan Tendell thinks that Elon Musk will close the Twitter deal. or something like that. I think that's what you titled the video. And so I just hope that I wish you luck

that all of your video titles can be as prescient as that one. Do you have any regrets of the Twitter process just because I think you and I, we were very bullish in public, but in private, I think you and I were even more bullish. Like there's no way this man can get out.

Do you regret not, you know, I would always say, Kelly said you should sell your kidney and put all of your money, plus your kidney's money, plus sell your dog and put it in Twitter. Do you regret not selling your kidneys to invest in Twitter?

I mean, we had over a 20% position in it. So, like, I mean, yes, I do. I do think it was the great, the, the, the, the best risk reward that we will ever see in the, definitely in the arbitrage world, 100% chance. I would be shocked if there's a better risk reward. Do you regret not doing more of it with options? And obviously, yes, we regret not to have it, but. Yeah, that I do because it, I mean, I remember some of the things you sent me, like, and they were just, like, I just agreed that they looked so obvious,

but, like, I still couldn't get my mind around having, like, a higher allocation to the, to the, to the, to the, to the story. I did a little bit,

yeah, I did a little bit with options, but I really regret, because I, I think you and I both said, hey, the downside is a lot higher than the market thinks here,

but this is 99.9% going to close unless, like, you get a literal government intervention or something, which there was Sipfias worry for a while, but when you think the downside's higher and the likelihood to close is lower, that just screams, play it with options. And honestly, I was just too scared.

I don't do crazy amounts with options. I was just too scared. And I was also a little bit worried, what if I do the November's and it closes in December? What if I do January and he appeals to Supreme Court and closes March? I was worried about timing, but that's my one regret with it. And the problem with the timing situation

is there would be nothing more annoying and more embarrassing to be right on your analysis that he was. not going to buy that you're sorry to be correct in your analysis that he was going to lose in court and then somehow be wrong on the timing and have that like impair the profits of of like that would have been so frustrating for me i think in a way it was almost like a regret minimization thing from that standpoint where i just couldn't have mentally taken it if if we were right on everything about the timing and that screwed us over i do hear you but

again it is the benefit of hindsight but when i think about it rationally that that was kind of where you wanted to come. Anyway, it was fun reminiscing the Twitter. Those were truly the glory days. I still owe you a drink, I think, at some point. Next time you're in New York, I would love to do it. That'd be great. Once you come back from this scenic Massachusetts. There you go. There you go. Well, Evan, I appreciate you coming on and we will chat to anybody. All right, thanks, Andrew. A quick disclaimer. Nothing on this podcast should be considered an investment advice. Guests or the host may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advice.

Pfizer. Thanks.