Yet Another Value Podcast - Doug O'Laughlin from Fabricated Knowledge on management incentives at $APP

Episode Date: May 8, 2023

Doug O'Laughlin, Founder and Editor of the Fabricated Knowledge and Mule's Musings Newsletter, joins the Yet Another Value Podcast for the 3rd time to discuss AppLovin Corporation (NASDAQ: APP). Doug became excited about the idea and wanted to come on to chat about it because a very aggressive PSU that recently happened at AppLovin, and what these management incentives could mean for the business. For more information about Doug O'Laughlin and his newsletters, please visit: Fabricated Knowledge: https://www.fabricatedknowledge.com/ Mule's Musings: https://mulesmusings.substack.com Chapters: [0:00] Introduction + Episode sponsor: Stream by Alphasense [2:17] Overview of AppLovin $APP [4:50] What does IDFA means and why this is important when looking at $APP, understanding "Mediation" [13:19] $APP's business model and their portfolio of hyper-casual games [20:41] Unity and ironSource deal and how that affected AppLovin $APP [26:22] $APP valuation [29:30] What is the market missing about $APP? [32:52] Share buybacks [36:36] PSU grants and management incentives [39:32] What concerns Doug the most about $APP [40:23] Industry headwinds (ad rates getting crushed throughout 2022) [42:58] $APP corporate governance, acquisition hit rate, incentives [52:37] Strategic optionality of selling the games business and AI lever 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 and 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. All right, hello, and welcome to the yet another value podcast. I'm your host, Andrew Walker. If you like this podcast, would mean a lot if you could follow, subscribe, rate, review it wherever you're watching or listening to it. With me today, I'm happy to have

Doug O'Loughlin. Doug is the founder of two different Mule Podcasts. I'll include a link to both of them in the show notes. But Doug, how's it going? I'm doing really good. I'm really excited to talk about a not semi-hooked idea right now. Just, you know, got really obsessed with an idea and I really wanted to talk about it. I think it's super asymmetric. And yeah, other than that, I'm doing my best grinding out in these choppy markets. It's been a tough tape. But one that I'm trying to continue to work at. So, but yeah, I really, yeah. How quickly did you pull all of your money from Silicon Valley Bank since we last spoke? And were you the number one cause of them going under? No, unfortunately, I was not. I think some people on Twitter were. However, but that's a, that's an aside.

Well, hey, let me start this podcast with a quick disclaimer. Just remind everyone, nothing on this podcast is investing advice. Always true, but maybe a little more true today because we're going to talk about one idea, and I'll go to that idea in a second. But we could, you know, every time we've talked, we kind of go off on tangents and we could run the gamut of a hundred different things, a thousand different situations. So everyone should just remember, please do your own work. This isn't financial advice. Consult a financial advisor, if that makes sense. And that out the way, I guess I'll turn it over. So the company we're going to talk about, you emailed me a couple weeks ago and we're like, hey, I'm working on this company. It's really juicy. It's not a

semiconductor company, but it's like the most exciting thing I'm working on. Can I come on the podcast and talk about it? I was like, hell yeah, man. Come on over. So the company we're going to talk about is App Lovin. And I'll just flip it over to you. What is App Lovin? What's so got you so excited about it? So App Loven is a mobile ad, mobile gaming ad company that consists of two segments in the business, essentially a giant portfolio of hyper casual mobile games. And then this, the software for mobile for mobile game developers that is primarily an ad tech stack.

What makes me so excited about it as a very aggressive PSU that recently happened that looks one I thought it was curiously timed but two the price totals are very impressive. So it's a $16 stock today. The first vesting is $36.

That's like a 3X from when they originally granted the stock, the PSU and up to like, like, I think a four or five X. This is 79. 79 is the very top end of the package, yep. Yeah, 79 is the top end of the package. And this is supposed to be the comp for the next four years.

And hell, a three year, a three, a three X over four years, pretty good. So all this, all this comes together. And you're like, wow, this is either the most delusional grants I've ever seen, or something is happening here. And when the board is deciding to, I mean, I mean, The board is trying to incentivize them, but there has to be some basis in reality. Now, maybe we're totally off base here, and the board is completely out of touch with reality. But the shares of this company have traded a lot higher in the past, and that's, but at that time,

it was kind of in the software bubble phase, and truly it traded at a pretty, pretty insane multiple, and it was like a 2021 IPO. So that cohort of stock is down meaningfully, and the shares are down, I want to say like 85, 90% from all-time highs. But if you look at the company, And so, like, you know, it's a super busted company, kind of recent IPO. It's led by a founder, and they do these super aggressive PSUs. And so I was like, hmm, let's take a look. And when I took a look, I was like, oh, there is definitely things going on here that I think are really interesting and create a lot of options for the company to do well. I think the first part of it that I think is really interesting is like we're kind of really close to the IDFA lap, right?

April 2020, 2023 is the first full year that we had the lapping of IDFA. Doug, let's just pause there because I think most listeners will know what IDFA is, but obviously that's an acronym

and if you're not plugged into ad tech, you might not 100% know, so why don't you just describe IDFA and what they're laughing? Okay, man, honestly, I didn't even remember what the acronym stands for, but essentially the...

I think it's identification. Yeah, I can't remember. It's something else. It's also sometimes referred to as ATT. So essentially what happens is, I'm sure you see this if you are an Apple user, which I'm going to assume most of our, most of the podcast over indexes to that. Whenever you, whenever you go into an app, you can press, ask a app to not track, right?

And that's one of the big things. That's like the huge thing. And so I think like 60, 70% of users say, don't track me. And this really killed a lot of the insight and targetability that ad tech had for users. And so it created like, it created this like huge data wasteland where all of a sudden you used to have, all these metrics that you could target your, your advertise, your potential customers with, but all those kind of got taken away from you. And so that really ruined ad tech in a lot of ways, right? Like the more niche targeted solutions, essentially, why would you spend in a

completely unproven way? So in a lot of different ways, the IDFA thing kind of just ruined the ad tech market for a lot of profit pools. Now, this actually creates a really interesting knock on and that I'll talk about. But at the high level, this is the beginning of the IDFA lap. So that in theory, if they have some, you know, if it's going to stabilize, the comp should get better. That's one way to look at it. If you look at their actual software business, they grew last year meaningfully. So I don't think that that's the only thing that they have going. But I think the thing that got me most excited is that I started to do a lot of work on this. And I was like, why, you know, because you're just like, what do you guys, what could you possibly be seeing?

And the thing I think that they're seeing is that there has actually been a really subtle thing that has happened to them that has kind of put them in the driver's seat compared to historically. One, there's consolidation. It's pretty much become iron source and unity versus Apple Oven. Those are the two big dogs in a market called mediation. Mediation essentially is, and this is really important to this whole thesis. So we have to talk a lot about this. Mediation is real-time bidding on a per unit of advertisement within an app. So historically, it was called a waterfall method.

And that means, let's say, and we're going to use mobile games because most of their business is mobile games, right? They would serve an ad on a mobile games, and then the ad would come up, and they would sell the ad slot, right, because the publisher is selling the slot, and they would sell it to the exchange that would, on average, offer the highest price. But that actually doesn't really create the best per unit economics, right? Every ad slot should be bid on. And so that's what real-time bidding is. And the thing is, the problem is you have to, if you're a publisher, you have to plug your inventory slot into all these different, all these different bidders

and try to be able to real-time sort all the bids at the same time. That is impossible for one company to do. And so that's where mediation came in. Mediation essentially is a service sold to publishers that helps, it helps, it does all of that for them. So every single time, now you go on a mobile game and an advertisement slot pops up. The advertisement slot, if it's done by mediation, is being done in real-time bidding. So every slot is being bid on. And that creates much higher yields and much better revenue for the publishers. And it just, it's just a more efficient auction dynamic. Let me just pause there to make sure we've got the business and make sure the listeners understand the business. Because I've looked at at Love and Unity and Iron Source several times

over the year. And even today, I'm like, so basically what it is is I am Candy Crush, right? I make Candy Crush and one of the ways Candy Crush monetizes is if you're playing for free, you know, every, I haven't played Candy Crush since came out, but every five levels, they're going to hit you with an ad or something, right? A little ad and you have to press X or if you tap on it, You can go download whatever, normally gain their advertising, right? So that's generally how candy, that's one of the ways Candy Crush is going to monetize. What App Lovin and Unity say is, look, Candy Crush, if you really want, you can go try and build your own ad network.

But similar to what everyone found with search networks and search advertising and everything, that's going to be really inefficient. It's probably going to, you're going to make a lot more money. If you let us handle getting all these advertisers, you know, we have to go connect with 100 different game publishers and get everything in real time, everything. We'll handle the ad. You just say, hey, here's an ad slot. and we'll instantly go run an auction and supply whoever the highest bidder is,

we'll give that ad. So that's what they're doing. They're basically connecting a game with an ad slot to all these bidders, connecting the two of them, and then just taking a fee. Yeah. Perfect. That's a perfect explanation. And sometimes the double explanation is really helpful to, like, actually understand

what's going on. Well, you got all this, you got all the specifics and technicals that I was like, yeah, yeah. Yeah. Yeah. Yeah. So, yeah, giving a really good high level example is really helpful. And so there's actually this really, and this is like,

required reading if you are interested in this thesis is it's by mobile dev memo and it's called why mediation is the primary fund in the mobile advertising wars post-ATT. And this was something that really opened my eyes and maybe understand what's really going on here that I think that the market maybe underappreciates and why there is. And so remember, Iron Source got bought by Unity and that's like, Unity is the game engine. And so they're like, you know, they are the evil empire in terms of this. And then App 11 is just the software side of things. And there's competitive dynamics between them, but it's really consolidated into two, maybe. I think there's up to four players, but it's really two big players and two trail players with consolidation moving to the bigger players.

But the thing that's important is in this world, so the auction house dynamic is maybe the best way to describe this. You're in a big auction house. And in the past, everyone was sitting in an open seating. And so you could see who's bidding on what. You can understand what you're bidding on, but now everyone is a private bidder. So no one has an understanding of the bidding auction dynamics. And the only person who actually understands what is being bid on and the prices for it is the supply side. So the auctioneer now is the only one with the full set of information. Because in the past, you could sit there and there were data sources you could buy that would tell you what type of user this was, how valuable they were. And that was kind of market

information. But since ID IDFA kind of took that ability away, now the most complete set of information is everyone's approximation. So each DSP, demand side platform, like, just think of each bidder is bidding on the value of this ad for this ad slot. And when they bid, they're making an estimate of how valuable that ad slot is and how valuable that user is. Now, there's a lot of different ways they can come at it, right? Contextual, whatever, they're like everyone has their own set. But when you're on the SSP side, when you're on the mediation side, you're sitting there and you're receiving all the bids. And now one of the things that is, and this is like from the piece, one of the things that's been completely cut out of the ecosystem is the ability to understand the average LTV of these players. These cut these, but on the other side, if you're sitting and you're getting all the bids, you can actually create an average bid because you have the full, the most full information set.

So it's created this data advantage that is primarily being accrued to the mediation player. 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 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. Oh, so in our candy crush example, what would happen is app loving, you know,

they serve as the supply side for maybe not Candy Hirsch, but for someone, App Lovin would get, you know, five bids and one's 10 cents for this customer, one, and every other one is two cents to make the numbers really easy, right? So that's interesting on its own, but, you know, the bidder would only know, hey, my bid won with 10 cents, the game person would only know, hey, it was 10 cents, but App Lovin has data and says, oh, look at that. Everyone else thought this customer was worth two cents. These guys thought it was worth 10 cents.

the average comes out to about four cents. Like, they've got that. That's really interesting. And they can start develop, obviously I'm simplifying and using an extreme example where one better's five X everyone else. But they can start using all of that information to tangentialize, especially when you applied over hundreds of thousands of different ads.

They can figure out all sorts of other things with that data. Yes. And one of the reasons why this is really important is because this auctioneer is also buying and selling ads, right? In the auctioneers, in the auctioneer example, we're assuming the auctioneer isn't buying. buying and selling ads, but Apple Loving is buying and selling ads. So they have a demand side platform. They have a user acquisition platform. And they also have, you know, and they also have like this

full like supply and demand side platform. It's very, it's very opaque. Welcome to Ad Tech. But they play on both sides of the spectrum. And they also have a closed loop ad exchange as well. So all of a sudden, they have a meaningful data advantage and they have a closed loop ad exchange. this creates a big data information advantage that I think that they're going to be able to exploit going forward. And they're one of the few players with this data, with this data available to them. Iron Source obviously is the other one. And so I think the thing that maybe is lost on public markets is that their business has slightly ever so slightly improved in competitive positioning. Now, to be fair, the business itself, I understand ad tech, this is hard.

the multiples or maybe justifiably where they should be. But you look at it and you're like, okay, there's like, you know, take everything up, the complexity away. You look at it and you're like, this business seems to have consolidated meaningfully into Iron Source and Unity and App Lovin. And they are the, and also App Loving is meaningfully ahead of Iron Source in the mediation game. And, you know, you can go do expert calls on this.

Essentially, App Loven has just has seems seemingly an execution advantage. and they continue to ship faster and kind of take share, and they have always been the leader in mediation. So the heuristic is they're about a 60% market share in mediation. And so all of a sudden, consolidation, relative advantage, all these things are happening. Their software business this entire time, by the way, did not shrink.

Like IDFA, as bad as it was for the open ecosystem of advertising, their business grew meaningfully in 2022. Now, going forward, you know, I understand the problems with some of the comps and how do we know what it can grow. But I think that there is a real chance that the forward-looking numbers are going to be much better than the expectations the market has kind of put there. I think that and what's also important to note in this is that there's also another side of their business that really doesn't matter quite as much as it used to. And they're trying to sell. So they have, so in the process of making this ad tech stack, they were making all these products. And they're like, hey, look, you should try our software because it's so good.

But they couldn't convince anyone to share with them because they're like, why would we share with you? Like, why would we do that? So what they did is they actually bought hundreds and hundreds of games. They scaled their whole supply ad tech network themselves. And then they started to use, you know, they dog fooded their own product. And all of a sudden- I was going to say dog-frewed their own product. Yeah, they dog-fitted their own product. And I mean, it's frankly pretty impressive.

Like they did it kind of backwards, which is really rare to see they were like, okay, we have this product. We think it's good. We're going to acquire hundreds of companies, become one of the largest software, become one of the largest mobile games developers just to be able to bootstrap this software product. And let's say 2021 to now, the software business was much, like 2020, it was about one-third, two-thirds in EBITDA terms, software to mobile games. Now, today, it's more like three-fourths, one-fourth.

And so this, like, when, when they were going public, the whole bull case was predicated on, you know, the software business becoming a lot bigger than becoming more mature. And what happened was the bulk case happened. Like the software business has taken on its life of its own. And now they're actually trying to sell the mobile games. So now that is TBD. I don't, they've been talking about a strategic review and trying to sell the games for a long time. I don't know if they are going to now because they've really, they've really moved the EBITDA margins on these things. So they've really made them more cash flow businesses, even though the revenue has shrunk meaningfully.

So, you know, revenue has in absolute terms decreased year over year, but EBIDA has increased or essentially stayed flat in the mobile game side of the business, which I think is really impressive, but, you know, that's an aside. I just want to note, I'm just laughing. You mentioned the games, and I knew they had the game, but I hadn't thought to look at some of the games. So some of the games, you might have seen, like, ads for Game of War or Mobile Strike. I think Mobile Strikes the one where they had Arnold Schwarzenegger pitching it for a while. But, you know, like, so one of their things is Machine Zone is one of their games. And just the front of it is, we're the destination to kick ass. That's like, oh, no, publicly traded companies.

That's the front of their website. Or they have another one is Lion Studios, which has like a knockoff wordle and all these really, like, silly games that you would definitely get click baited into advertising. But just I was looking at those and I had to laugh because I saw those. So please continue. I didn't mean to cut you off. But you've got to share kick ass when you can, right? Yeah, they actually have, I think, some of the largest match, so essentially other than they Candy Crush, like, Matchington Mansion, there's like a lot of other weird, and like

Word games, they're really strong in. So these hyper-casual games, yeah, yeah, yeah. So these hyper-casual games were probably the poster trout of pandemic success, right? Because all of a sudden, we have a lot of time to burn and we're at home, our screen time quadruples year-over-year. one of the biggest incremental inflows during 2020 and 2021 was hypercassual games. So it created this giant boom market that obviously was unsustainable. And App Levin was valued on boom market valuation with a boom market revenue.

So I understand why, like, you know, it was, I want to say like 20 times, 20, 30 times EBIT on something that was clearly unsustainable. And it was like a one time. But in this process, this gave them all the financial wherewithal and ability to great what they always wanted in the end, which was this software business. And I think the software business is inherently valuable. The take rates there seem to be much higher than a traditional SSP. It's something like 20 to 25%. So they're like, and that isn't the only metric of quality and ad tech, but it is directional to the value that they're giving. And they, they meaningfully have

executed and done a really impressive job. And I actually want to maybe take a second to talk about the iron source versus apple oven dynamics. Because that actually, that's great. Because if I can just jump in. I'll prime you because you're about to take one of the next questions out of my mouth. Look, one of the ways I know App Lovin is from last year, Unity, their big competitor, offers to buy Iron Source, a very big premium deal. And App Lovin steps in with what I think was a really ill thought of acquisition offer from what I can remember. And I can go through the basics, but you know, they offered Unity. It was like barely a premium deal and they offered them part in stock and part in non-voting stock. And they were valuing the non-voting stock, which was a new share of

stock at the same as the vote. It was a very strange deal. And I think a lot of people at the time saw this and said, what's happening is App Lovin thinks that the Unity Iron Source merger is a killer for them and will take a lot of share. And they're just lobbying in a Hail Mary bid to try to break this up, which failed. So I've rambled a little bit. I'll let you pause because it is important to story, right? A, it consolidated the market a lot, which could be good. But B, the way they responded to the merger kind of indicated maybe they thought there were some strategic issues with it. So please, go ahead. Oh, yeah. So this is actually, this is a huge part of the story, right? So whatever the Unity Iron Source deal went through, I think App Loven has taken

essentially a straight line down since. Unity has to a certain extent as well, because the valuation has really come in. But App Lovin was, from memory, was 45 when the deal happened. They made their offer. The stock went down on the offer because it was going to be pretty dilutive. And since then, as you said, it's gone straight down to 16. Now the stock, the whole market's gone down and all that type of stuff, too. but they're down a lot more on a kind of alpha-beta-adjusted metric. Yeah. Yeah, they were essentially, my understanding is their enterprise values were very similar. And the CEO for better for worse is a deal CEO.

Like, he really is. I'm sure. So essentially, I think what he saw at the time was like, hey, there is, UND is kind of the same size as us. Like, let's be the fish that ate the whale kind of vibe. Because UND is one of the most valuable things in the entire gaming ecosystem. And you can talk, like, for better for worse, they're pretty bad at ads and really good at the gaming the gaming side of things.

And so they thought, hey, Iron Source will shore us up. What's actually happened is kind of a little interesting because Iron Source was always the number two player. And they continued to kind of be the number two player. It's really one of the big things that, you know, expert networks will talk to you about this. But essentially, Iron Source just doesn't have the plug-in to the Google network at all, actually.

And so if you're bidding on Google, on the Google side, demand side, for mobile games, your bids will just not go through to IronSource. So right now, they're mostly done with app, with App Loven. And so for whatever reason, and whatever reason, they still haven't got this together. So every quarter this goes along, you're like, what is happening? And so this is one of these really slight things where I think market share is made, if that makes sense. The historical overweight of Google will probably be good for them going forward. And also, Google's ecosystem had a huge inflow of money because of how bad the Apple

ecosystem got hit. So there is this kind of interesting dynamic where you're like, wait, can you explain to me why Iron Source hasn't been given a bidding right to the Google network? It's still, the last time I checked it at least, it's still not that way. And Google actually did a press release today talking about how Max essentially talking about how Google bidding is now available to all Macs developers. And essentially it talks about improving. being, and they actually, it's an open beta available to all of the mediation platforms. We know that historically Google bidding is strongest, and the beta was probably first done to App Loven. So there's this interesting dynamic here of Iron Source has actually lost share

this entire time on a relative basis. And one of the things that, like I highlight this in the write-up is they actually, they actually launched something called Axon. Axon is their machine learning model or whatever. And in the course of like two or three quarters, their revenue went from like 90% year every year to like 300% year of year. There was this. I was just, they launched Axon several years ago. And I think you're driving Axon 2.0 is coming out. But just so people know it's not like a recent thing. They actually launched several years ago. And then Axon 2.0, I think is actually the cherry on top. Yeah. Yeah. Axon. And the thing that's interesting is now they're launching Axon 2. And so the competitor dynamic seems to be that even after the unity iron source

deal. App Loving is still beat the crap out of Iron Source. And also, I thought it was really interesting and maybe missed by the investor community, there's like a giant scandal during the Iron Source acquisition because Unity has announced the layoff, then bought

Iron Source the next week. And there was also an interview with the CEO. The CEO is the former EA games CEO when everyone hated EA. I love this line in the right up. It's so freaking funny because he literally, he goes on this he goes on this um that the actual interview has been deleted since by the way um but everyone has the quotes to it but he essentially calls um all game developers who don't want to monetize their their product

uh fucking idiots like that is that is a direct quote and so um at the time everyone's really pissed off they fire you know all the game developers are like you guys aren't really even working on the game engine you're just calling us fucking idiots and you're firing people and then you're buying iron source so they this created like this level of maybe and this was in june this level of distraction that I think that is maybe underappreciated because right now I would guess Unity is mostly trying to put out fires

and obviously integrate Iron Source I was going to say they're doing a big integration and guess what integrations mergers are distracting and I mean App Lovin did just buy MoPub so they and they are a deal roll-up in themselves but you've got that big integration that that's risk but that's also opportunity for your competitors

yeah yeah and so and for context And I want to put like the differences here because I think this is this is maybe like like kind of like and this is soft stuff. Right. So they did the Mopop acquisition. They shut it down in five months. So they had it like, you know, they bought it. And five months are like, okay, good to go. We moved everyone over to App Lovin, to the App Loven network. We're good to go. Five months all done, tidied up. And it's like truly impressive levels of execution and time. So I think App Loven actually has at least historically and with all the things that we're available to look at has really good execution. And so, like, this is, this is all to say. I think App Loven is not quite as busted as people think. And if you look at the software business, I think that it can easily grow, let's say, a 15 to 20% revenue keager, right? That is usually pretty valid. And it seems to be the leader in its space.

That's usually pretty valuable in ad tech. But if you look at the company, it trades for like seven and a half times EBITDA. Now, free cash flow is a little bit messier, but it looks really easy to pencil in a lot of upside. If you believe that this thing can continue to grow, and that as software continues to become a larger part of the business, which is pretty easy to underwrite, their EBITDA margin will start to approach the software margin. So the software business made 70% EBITDA last year. They expected to be something like 65%. Going forward, I expect 65 eventually, maybe 70. And so I think that there's this really interesting dynamic here where the app-loven software business, I don't think is worth six to seven times EB-D-on.

let me ask oh go ahead yeah I mean for and like it's not a trade desk because comping anything to trade desk will make any company really expensive but like for context I think trade desk is like one and a half time one and a half billion dollars of revenue and the app level in business is something like the the software business in 2023 is going to be 1.4. I mean I think I so it's like one one one is like one billion in 2022 versus trade desk 1.4 billion in 2022. I think and and and you know the difference here. is like trade desk is 40 billion dollars and apple oven is like six six billion dollars in market cap so there's this ace there's just and and should it trade a trade desk i don't know but it clearly isn't a total dog of a property it trades for but it trades like a total dog in fact it's like one of the cheapest companies in like a comp set right um even companies like magnite plate platica which is a pure play games developer trades at a higher ebidon margin uh EBDA multiple than they do so um and and And there seems to be levers to be pulled, mostly the Axon launch that is coming up soon that I think is really exciting because last time they launched Axon, they took a lot of share.

Logic has, maybe the next time they launch Axon, the improvement, they will take more share. And this time they have more data from the mediation side that I think will give them a better data advantage than they had last time. So anyway, sorry. No, no, let me ask a few questions here. First, number one, I just realized I grabbed the wrong hat off the rack when I was putting my hat on for the podcast. Did you get the add another value podcast?

I do. I have it. Either of us are wearing our hats. This is insanity. This is insanity. If you want, we can pause it and both come back with the hats. No, we're professionals. We're just going to have to power through with the wrong hats.

But let me ask you. So, hey, I really like the way you framed it in your write-up. You know, like I think people could get, if they've just been listening here, and let's say they've been listening while they're cooking dinner or something. So this is on in the background. Like people could probably grab a few things here, right? Like we started out by we were talking founder-led who just took a crazy aggressive of PSU grant, right? The stock literally needs to more than double in the next four to five years

in order for him to it the lowest end of this. And guess what? If a stock doubles over four to five years, you're going to be pretty happy, right? And that's, again, the lowest end. So a founders took a very aggressive stock. We've talked about multiple different levers to pool in a consolidating industry that should be at, you know, post IDFA. Like, I don't think anybody thinks people are going to spend less times on their smartphones. I don't think anybody thinks people are going to spend less time of the game. So you've got consolidation, weak comps lap and a growing industry and a doopoly and we've got a reasonable multiple. I think that should have signed through for every, sign through for everyone. I've got a bunch of other questions I want, but I just want to

start with one question. What is the market missing? Every single person I know, two years ago, Unity was literally the hottest stock on earth. This is the, this is a comp. Everybody has looked at Apploven. It is big enough that anyone can cover it. It's a sexy growth industry. Like, anyone can look at this. What is the market missing that it's kind of smacking, that you've got this thing that it's trading out of value multiple despite all these different growth lovers. So I do think that this is a left for dead stock. And as time went on, people started to realize there was cracks in the castle, right? Like one of the big ones is that the games business was unsustainable, right? The games business started to go down 30, 40 percent a year, still continue

to shrink. I think by some sensor tower data, you think it looks like it might have troughed in Q4. I think that it looks like that market is starting to stabilize out hyper casual, which is where most of the games businesses, is the most left for dead, most screwed up business in the entire mobile games industry, or actually entire gaming industry, right? It really is probably the worst property. And so high level, hyper casual sucks, app love and dead, right? Like, that's like the one way to put it. And let's say in 2021, that would be a fair assumption to make, right? That was the majority of revenue. In fact, that was like, you know, I would say like not just the majority of revenue. That was like 75% of the revenue. But you fast forward a few years and all of a sudden it's 50-50 revenue software and games. And the software business has a lot more EBITDA. And so I think the thought process here is that people haven't really updated what the business shift. Because the entire time when people were, you know, revenue was going down or actually revenue was flat in 2022, which is mind boggling to me. Like that's just crazy because, you know, their big segment goes down 18% or small segment goes up 50%. Revenue is flat, essentially. Is that adjusted for the Mopop acquisition? Actually, I don't know. I don't know if that has those numbers in there. I think, I think no. I think that is not adjusted for the. So, no. Because there was also some complication where they had to give payments to get people to transfer from Mopub to the, yeah, yeah. Yeah. So,

and that hurt in your term profitability as well. So this thing has a lot of, like, there is a lot of hair on this, to be clear. But I think the price is maybe a place, finally in a place where I think there's a lot of safety in it, if it makes sense. You know, prices your margin of safety. The company makes free cash flow. The company is buying back shares right now as well. Let me jump on the share by back, because that actually was my next question. So anyone can go through the 10K, right? They buy back just shy of $340 million of stock throughout 2022. And their average prices in the high 30s. And in Q4, they don't buy a single share back despite having plenty of cash. And an analyst even asked them on the call, hey, like, you guys didn't buy any shares back

in Q4. You guys are cash flow generative. You've got a billion dollars of cash on the balance sheet. I believe management even said, hey, our bar for M&A right now is really high because we see value in the stock. And I think analysts, perhaps probably rightly, we're looking at and saying, okay, the bar is high, your stock is down and you're not buying back shares. You were buying it, you know, 120, higher a couple months ago, what gets? Yeah, I think that's really interesting because the comment that they push back is that they want to increase their cash balance, which that is a typical deal response, right? I don't know why.

Maybe part of it is that they have a, like, because at the same time that this is also happening, the games businesses is in strategic review. So if that happens, if they sell the games business, then they would have a huge chunk of cash. Maybe the thought process then is like a hyper lep, like a tender or something. I don't know. And that's, that's actually something that I've been thinking quite a bit about because I'm like, you know, if it is so cheap, which I think it is, why no repurchases in Q4? Because they did repurchase $300 million throughout the year, but not in Q4. I don't know. This might be where price, frankly, might dictate sentiment if that makes sense, unfortunately. Maybe they continue

to see the share price in free fall and they're like screw it we just need more cash um i don't know because i'm really i think because like if you think you can they're going to sell their games business then all of a sudden they're sitting on i think the games business is worth like a billion or something that's another incremental billion in cash um but they do have some debt maturities like they are a little different in in most companies in terms of the fact that they have a lot of debt on the on uh relative to most companies their size or their growth profile or their historic or, you know, let's say a traditional Silicon Valley company that hypergrowth, you know, the hypergrowth cohort usually has cash, not very much debt, and the shares have gone down

a ton because the, you know, because the multiple has come in. They had debt the entire time. And not only they have debt, they like to do these acquisitions. So maybe the thought process there is there some kind of war chest for the debt, the maturity is coming up. But I don't think it is quite, you're right, because I'm like, I was kind of, of frustrated by that as well because you're like, um, why are you doing this while also giving giving just insane PSU grants? Like, it's like a million shares per per tranche. So it's like a,

you know, like just the two, just the two of them, I think, get something, get like some insane number. Like, you know, it's, it's 12 million shares total. That would dilute the entire cap structure by like, I don't, I need to see how many shares are outstanding. But like, there's only, yeah. So, I mean, just with what they do, what they have, that is like a 3% dilution in just PSUs, right? Yep. In just this PSU package. That's not too bad, though, because they did say, hey, this is your PSU grant.

This is like five years. Four years. Yeah. Hold into one. So say, hey, you know, top exec at this growthy tech company diluting by 3% over, over multiple years. That doesn't seem too crazy. And like, you know, if we get that dilution, the stock will have at least doubled.

Again, not absolutely crazy. Maybe not the best. But at the same time, when they're sitting on cash, why not buy back shares? If you're so amped up. Let me morph that into my next question. So we started talking PSUs and grants. I do think there is, you could look at this company and make an argument, hey, the PSU grant is great. It really incentivized them.

These guys already owned hundreds of and hundreds of millions of shares. But I do kind of worry if it's like heads for them, they win, tails for them, they break even or something. Because, you know, they are adjusted even about positive, right? a billion dollars in adjusted EBDA in 2012. And guess what? Everybody, people have started including stock comp and taking out of adjusted EBDA. Stock comp was 200 million-ish in 2022. So take it out of the billion, still $800 million in EBIT. There are some publisher bonuses that I think you need to think about. But this is a free cash in general business. But I do think people might look and say, hey, you know, one way to game the kind of stock comp ad deck thing would be to grant

all your options once every five years, kind of try to time it around the stock price and then say, oh, once every five years, we add that back. But for the next couple years, investors won't go look at that because our stock comp will be low. So you just kind of bulk it all into one thing. And I wonder investors say, hey, you know, they tried to time this. This is as they win, tells they lose. And two or three years, if the stock hasn't gone up, guess what? They'll just adjust it a grant another one. And by the way, they won't have reported any stock comp in the meantime because they did it all once and people, you know, they won't add back. So I just wonder if there's like that type of game.

And again, these guys, they're very incentivized. They own hundreds of millions. KKR still owns 20%. I think this is the biggest win KKR ever had, if I remember. Yes. It is the biggest win they've ever had. Yeah. So it's not like these guys aren't incentivized, but I just, I just kind of wonder if you're, you know,

you're playing a game where the deck is really stacked for someone else. Yeah. Yeah. I think that's actually part. So part of the analysis here is that actually if you look at the grants, he gifted almost the entire, like as much shares as he could into a few revoke a few trusts, essentially. And within the trust, he sold them down. I think one of the reasons why the board would be upset is because he really does not own that much shares compared to what he used to own. And now with this PSU package, he's required to hold it, if that makes sense. So thought process here is maybe the CEO doesn't really have the skin in the game that he used to. And this is a way to, to increase the skin in the game for the first, essentially after cashing out. That was another question I was going to ask. If you look through 2022, I mean, these guys are just hammering the stock all the way

down insider sales. And it goes even as far as, you know, they start 2022 in like the 80 range. Even in December when the stock is in the 11s, you see the CEO selling $25 million worth of share. You see the CTO selling $25 million worth of shares. And like, yeah, they still own a lot. And yeah, it looks like these were just, you know, 10b-5-1 sales. They're selling huge amounts.

So you kind of look at them, wonder, hey, they're just getting gifted upside where they're cashing out. Yeah, that's probably the biggest thing I'm concerned about with this right-up, right? I think in a lot of ways this is very asymmetric, right? And like in many ways, it's tilted against you. The valuation really does feel at the low end. the you you can see where there's levers to pull that you think that their their business can get stronger there's a lot of ways that um and in so if your stock is an option why don't you write your management team options as well right like that's kind of that's kind of like I guess

the concern here um and that's where that's where this gets really hard to be honest with you I'm I am pretty cognizant of that but I do think that um in terms of like things that are bombed out where I think the future might not be as dim as people think it is. This is probably a pretty good place to look. I think ad tech in general hits that. So the one other thing we haven't even mentioned, well, we haven't talked about the connected TV opportunity, which we can a second bit. The one other thing, like ad rates got crushed throughout 2022. They're still like, they're way down from a couple years ago. And, you know, obviously 2021 was a really hot market. But if you just think about like, hey, once we lap Silicon Valley Bank and like everything stabilizes

and maybe we're in recession, maybe you're not. But like once you get to kind of, I would guess, normalized rates are higher than they were running in Q4 and Q1. And like, once you get to normalize ad rates, their earnings should go up on that too. So not only do you get all those tailwinds we talked about, you probably have like some just normalization of the ad market not being the worst it's been in six years. Yeah. Yeah, I think that's also part of the reason why this is timed and sized the way it is as well. And so if you think about this way, the board is definitely thinking, this is bottom calling.

And for better for worse, when you see these kind of packages, there's two, there's two. two worlds of these kind of packages. And so for context, I do a lot of governance things with a lot of people. I talk with non-gap, talk with a few other of my friends. Like, this is not a completely solely sourced idea. There's definitely like a little bit of a teamwork effort really looking over the governance universe. And I've looked at a lot of these. And there's kind of two two types of these. True Hail Marys. And where you look at the business and you're like, I don't see a single way out of this. Like, like, you look at it. The stock is just going down. They're super levered. You're like, what is it? A debt refi? Like, you just look at it and you're like, I, like, the most

creative thinking possible cannot find me away to the other side of this. And those guys will grant all the way into the hole. And it's a, it's a zero, right? Or, or just like a totally terrible outcome. I think the reason why this is so attractive to me is because it has the extremely asymmetric price vesting. But, but unlike the other, you know, and this is like, maybe a context that I can't really give on a podcast really well, but like, unlike some of the other Hail Mary grants, there are levers, there's clear levers, there's clear normalization, there's clear, like the stock itself is justified, like arguably cheap, one that you can maybe underwrite with like, you know, I did a DCF for this one. And like, you know, the fair value on this

thing, assuming some very uneromic, like the price is implied is around like a 25% discount rate. So you're like, there's a lot of things going right here. You know, sometimes you're like, you do all this work on looking at these Hail Mary grants and you're like, I just don't see it. This is a Hail Mary. I think that this is, there are levers to poll, and clearly they want to incentivize them so that if they pull the correct levers, they get paid. And so I think that's why, yeah. Oh, and you pointed out, yes, they get paid, but if you look, the chair of the Compensation Committee is, I believe, the last nominee from KKR who owns 20% of this. Obviously, private equity is very, and this is one thing, Nongap has always highlighted, private.

equity is very familiar with using the nominating committee to reward people, reward key employees and that sort of stuff at the right time, grant awards, you know, private equity is not in the business, especially when they have the most successful exit in firm history. They're not in the business of pissing those executives off. You would have to think that if they're granting these, yes, they want the alignment, yes, but you would have to think they're granting this super aggressive thing with some view that at least the low side of it's attainable. And, you know, another person on the compensation committee is the lead independent director who is the CEO of Wynn. And if I remember correctly, Wynn has also been known to play these types of granting games.

I can't remember for sure, but something's tickling the back in my head that they can have. So, you know, there, not only do you have the KKR who definitely knows this play, but you've got another member of the Compensation Committee who, I think, has played this type of games before as well in his own personal life. So suggests you that they're probably stacking the deck a little bit. You, you, you, when you stack the deck like this, you want to, um, like, it's not in KKR's interest to just, um, pit piss a Hail Mary Grant away, right? Like, where it's like, hey, this is extremely upside. Like, you know, we're going to, we're going to massively reward insiders here while I sit on the compensation committee chair, uh, the comp chair.

I think that there, um, there is at least a path to get better. Um, another, another opportunity that we really haven't talked about is whirl, the CTV, um, the CTV call option, truly. Um, but I mean, they hit, in the proxy, it looks like they hit their 2022 estimates of like $75 million. So like, it's clear that that is another little engine that is cranking away too. And I also want to maybe take a step back and point out that Adam is a deal CEO. And he's actually pulled off a lot of really good deals. Max, I thought was internal. No, Max was acquired in 2017.

So their hit rate of these acquisitions have been surprisingly good, like truly surprisingly good. acquiring their way all the way with the games. Even most of the software acquisitions have been money good. I think that there are levers to pull. And I think that they understand compensation, too, within these companies. You should maybe read on the call for the acquisition for Whirl. It was really interesting because it was like, it was very dark artsy in that same way as well, because you're on the call and they're like, well, if they hit $500 million in revenue in 2025,

but with a certain EBITDA, we're going to give them a $600 million payout total. And you're like, wait, what the, like, that's, that's, like, essentially half the economics of this business. But, but, but at the, so, so at the same time, I also understand because, um, if you make a $500 million CTV business over the course of, you know, three or four years, that may be rightfully deserves some compensation. So I think that at 11th seems, hmm? Yeah, if you make a 500 million CTV business, you probably created what, between five billion to a $10 billion business. So if you pay them 300 million, that's actually money really well spent. Yeah, but, but, you know, it's within this, like, it's in the same kind of payout metric of what, what would have, like they, I feel like the risk reward for the world founders is kind of similar to what would happen if they were to do this standalone, right? Now, they have the, they're getting the crazy outcome option with the same, but within the big portfolio with a little bit more stability and someplace to land and expand.

And so I think that that the guys here know what they're doing, at least to incentivize and create these, these opportunities that, that seems. to be money good, if it makes sense. Max was truly from nowhere and obviously a leader in its space when it got acquired. But when it got acquired, most of the people stayed around and continue to execute and created this opportunity, created the business that it is today. And so I think that it's all part of the secret sauce of Apple Oven might be, honestly, a lot of thoughtfulness about compensation. That's, and that's, that's something that I think about a lot is that these guys are not, these guys are not unaware of how this works, that if you put a big carrot in front of them, the donkey runs a little faster, right?

Like, just one more thing on the PSU grant, which I think is the thing that interests you in this. I've seen these types of PSU grants before. I've written them up. I know you've seen them. You've written them up. Something interesting. And off the top of my head, I can't remember someone else doing it. You can tell me if I'm wrong here.

But, you know, so the, the CEO and the other key guy get about seven in the CTO, get 6.9 million shares each, right? And again, $36 is the strike price at the very lowest end. But as part of it, the board also authorizes another rounded up to 3.5 million shares and says, hey, CEO, you can give these 3.5 million PSUs to any of your other key execs that you want at your own discretion. And in general, with these PSU type deals, I've generally seen them go to the top one to three people. I haven't seen them go to like multiple people at the senior executive level. Like it seems like they're setting this up to do. And again, that would just be one more thing. Look, 3.4 million shares at $36 per share, which is the low end, that's $100 million of shares to gift if I'm doing that math in my head right. I hope I'm doing the math in my head right. Yeah, I think the math is in there. Yeah. So the 3.4 million, they have to hit 79's hit. So it would actually be a lot higher. It would be $700,000 at 36, but that's still a significant chunk of change. But, you know, I just, the fact that they're giving, to stop my ramblings, the fact that they're

giving them to more than just the top two doesn't suggest to me this is Hail Mary. It suggests me, hey, we think now's an attractive time to put that carrot in front of people. This is an execution business, right? We have to execute. We have to grow. We have to keep delivering. If we don't, we will get crushed. But we see an attractive opportunity. We see an attractive price. Let's incentivize all of our top guys to kind of run out and get that carrot. Yeah. Yeah. I think they want to unbreak the broken IPO, right? And that's the way you do it. And I think the incentive, the incentivization to like re-level when things are down is really important. And I think that right now, for the first time in a while, you can look, you know, like the incentives are obviously a lot higher from here.

But, you know, the stock also traded a lot higher relatively recently, right? Middle of last year, it's a $35, it's a $36 stock. So that's the lower, that's the lower end of the besting. And I think that some of the other interesting things is the four-year, the four-year hurdle might actually be a little bit in their favor if they think they can hit it sooner, right? And you have a sell signal, by the way. Because it says until this is done, this comp plan is done, whenever we restrike the comp package, that's, you know, we're going to, you know, if they, I think they can restrike before four years, but it's intended to be the payment for the next four years. The restrike to me probably means that, hey, our work here is done if that makes sense. We pulled all the levers that the board saw, and I think that's really important.

And I've seen this actually happened before. The first restrike after an aggressive PSU comes in two ways. An extremely dog between the tails, RSU heavy, time vesting, just like you can tell that they're just like, whatever, we screw that up. Or it comes in the way of more vanilla because they hit the price hurdle. And it's like, okay, we're going to. So I think that's also a very interesting signal on how this works out because the compensation committee is part of the board.

The board knows what's happening. have some kind of plan view of the outcome here. And I think that that's a really good way to read into how valuable they view their own options in the business, not the company, not the actual stuff. 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

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The other thing I was just going to, you know, if you think about this, we mentioned the world earn out, right? Where the world founders can earn. I think it's up to 600 million in equity if they hit a bunch of performance targets between 23, 24, and 25, if I'm remembering you're right up correctly. If you think about these units, they're struck with a four or five year vest. They're struck this year, so they'll vest in 27, right? By 27, Whirl alone will have paid out, right?

And Whirl, if it does $500 million in revenue and close in, it's going to be worth all of the market cap today, basically, right? Maybe I'm rounding too aggressively. Maybe I'm being a little too conservative, but it'll be worth all the market cap. And then you'll get all the rest of the businesses. Like, these guys struck this right before the options really start paying off. And by the time these realized, you're going to know if the options play off or right. And, you know, I think they struck them.

Again, options are not guaranteed, but I think they struck them. and they saw advantageous timing, advantageous price, all these things that they think are going well are about to start kicking in. It just all makes sense. Doug, I think we have gone through a lot of stuff here. You know, this is the tough thing with, we spent almost an hour on an ad tech business.

We could probably spend, I'm no ad tech expert, but we could probably spend the next an hour a day for the next month going over the ad tech business. But anything else you think we didn't cover that you think we should have hit on or anything we kind of gloss over. You think we should have hit on harder? I just think, I think, oh, I think maybe something that we might not have talked about that much is the strategic optionality of selling the games business, because that's been for sale, possibly.

I think it's not likely at this point because it's been, you know, you slap to five X EBITA multiple on it. And to me, it's just like, hey, why sell something for five X EBDA when it's really cash flow generative? It probably has synergies with your core business. As you said, you dog fooded this business. You can dog food new products and new stuff. I get like probably the bottom of it too. And I think it's been, I think the article you released where they said they were reviewing selling the game's business was from March 2020, if I remember correctly. It's been over a year.

And I would just guess, I guess it's not happening if it's been over a year. But I do hear you on that. I think that's an option that I don't think we talked about if that makes sense. And also for context, they did shut down some of the games too. So like part of it is they did pull back some of the levers. They, you know, they actually had, I think they even had like a manager buyout for some of these games. So they really wanted, they did the right size it to a certain extent. But I think that there might be more rabbits to pull out of that hat, if that makes sense.

Something I don't think we talked much about that. I think maybe the Axon 2 thing, I think is, and you can see in the write-up, they just took like, they took like 50 bits of, no, like 25 bit points of share within like two years, essentially after launching it. It really is, you know, they're like, hey, we launched this new product called Axon. And, you know, at, you know, the next quarter, they grow like, you know, they move from 90 to 200% revenue year every year. And they're like, we gain share because of our new product launch called Axon. And they did this for like a few quarters and they're like, all of our revenue growth is mostly because because of our new products called Axon.

And on this, on the earnings calls right now, they're like, we plan to launch Axon 2 in 2023. So that's, and I mean, maybe that's the only, that's like the real big lever that we're thinking that they're thinking. but there's clearly, there's clearly some levers to pull. And I think that between axon, between where all, between like ad tech lapping, there's, there's a lot of positive ways for them to pull off the PSU grants. And evaluation that is just really undemanding, right? Like seven times forward EBITOM, making cash flow, growing. I think that all these things together kind of put, and the PSU kind of, you know, investing is really hard. But I would like, you know, if you give me, you know, 20 of these, I will swing at these because there's a lot of things in your favor. We're not,

we don't have perfect information. But I think that with the information given to us and the price as some kind of margin to safety, I think that all these things together really do create something that's really interesting, super asymmetric and seems a lot more company-driven specific levers to pull than, let's just say, the broader market. And I mean, with a stock that is beaten up like this, I think that there's a lot of ways to win. So that's like the high level how I think about it. You know the other lever they could pull that we didn't even talk about. Axon 2. Axon was using machine learning to improve their bidding. They have not come out and start to screaming, we're using AI, we're using AI, give us an AI multiple. There's the lever.

They need to be like chat GPT is also part of our, I mean, I don't know. Actually, the AI stuff that they're using apparently was relatively simplistic and it like crushed it. So it really shows like, I guess the value of it, you know, well done simple things really crush it. I mean, it took a lot of share. And I think that, you know, they talk about this on the calls. AI as a, you know, as a discipline has improved meaningfully sense. So I'm going to guess that those shares that were given to, you know, to add them to incentivize whoever. I'm going to get some of those are definitely going to be to the AI people to figure it out and create an algorithm that I think is really powerful and using their mediation thing. So, so once again, another lover to pull and it clearly is a place where

it's a lot better than it has been. So I just think it's interesting. But yeah, I just, I really wanted to talk about this idea because I just think it's like, it's really creative. It's really different. It's super beaten up. People have a lot of PTSD on this name. And I think that it's compelling.

Perfect. Well, hey, I am going to, for people who want to learn more, I'm going to include a link to your write-up. It's behind paywall. It's on the new Mules Musings substack, which is different than the fabricated knowledge substack. But I'll include a link to that. I appreciate you coming on for the third time.

For the fourth time, we're both going to remember to wear the top hats. Yeah. Also, I will probably be releasing it out of paywall after a few months. I think that's like, that's kind of the thought process I'm going to have going forward, I think, with some of these, especially the long write-ups. You know, I want to, you know, and I thought about most of the most of it today, honestly. What's what's in front, what's behind the paywall. But I think that just for, you know, the people who people support me. And I mean, and to be clear, fashion project, love governance. I think they're good ideas, but it's a, it's a research service. So we're taping this May 3rd. I think they report earnings next week.

So this could quickly look very smart, very slowly. Or very stupid. It's somewhere between, right? And I feel like the odds are, it's going one way or the other. Or it could say it could stay flat. Who knows? That's how stocks work. That's the tough thing about the stock word.

Who knows? But Doug, I appreciate you coming on. Looking forward to the fourth time with proper ads. And we will chat soon. Yeah. Cool. Thank you. A quick disclaimer.

Nothing on this podcast should be considered an investment advice. Guess or the hosts may have positions in any of the stocks mentioned. during this podcast. Please do your own work and consult a financial advisor. Thanks.