Yet Another Value Podcast - ICLE's Chief Economist Brian Albrecht evaluates $24.6 billion Kroger-Albertsons transaction

Episode Date: December 8, 2023

Brian Albrecht, Chief Economist of the International Center for Law & Economics (ICLE), joins the podcast today to discuss ICLE's paper on the $24.6 billion Kroger-Albertsons transaction. ICLE Paper on Kroger / Albertson's merger: https://laweconcenter.org/icle-on-kroger-albertsons/ White paper: https://laweconcenter.org/wp-content/uploads/2023/10/Kroger-Albertsons-Merger-Full-Paper.pdf Chapters: [0:00] Introduction + Episode sponsor: Alphasense [1:32] Overview of ICLE (International Center for Law & Economics) and Brian's background [3:12] Kroger / Albertson's merger - how Brian is thinking about this potential merger [6:55] FTC's analytical framework [10:58] Why government hasn't brought more suits in grocery industry [14:34] Should precedent be updated? [24:05] Why shouldn't market shares matter? [28:30] How have delivery services changed the market index & wrap-up on wholesale clubs, competition [33:05] Divestitures [39:26] Specific divestiture package - Haggen's example [46:20] Waterbed effect - why this is or isn't an antitrust concern [51:44] Regional power vs. local power with retail workers [59:01] Final thoughts Today's episode is sponsored by: Alphasense This episode is brought to you by AlphaSense, the AI platform behind the world's biggest investment decisions. The right financial intelligence platform can make or break your quarter. AlphaSense is the #1 rated financial research solution by G2. With AI search technology and a library of premium content, you can stay ahead of key macroeconomic trends and accelerate your investment research efforts. AI capabilities, like Smart Synonyms and Sentiment Analysis, provide even deeper industry and company analysis. AlphaSense gives you the tools you need to provide better analysis for you and your clients. As a Yet Another Value Podcast listener, visit alpha-sense.com/fs today to beat FOMO and move faster than the market.

This episode is brought to you by AlphaSense, the AI platform behind the world's biggest investment decisions. The right financial intelligence platform can make or break your quarter. AlphaSense is the number one rated financial research solution by G2. With AI search technology and a library of premium content, you can stay ahead of key macroeconomic trends and accelerate your investment research efforts. AI capabilities like smart synonyms and sentiment analysis provide even deeper industry and company analysis. Alphasense gives you the tools you need, to provide better analysis for you and your clients. As yet another value podcast listener,

visit alpha-sense.com slash FS today to beat FOMO and move faster than the market. That's alpha-dash-sense.com slash FS. All right, 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, subscribe, review wherever you're watching or listen to it.

Of course, five-star helps. With me today, I'm happy to have the head of ICLE, right? Not quite, not quite. Economist of ICLE. I don't know. It's the most important role. So, you know, the economists are top. So basically, yeah, yeah, that's right.

Certainly the best hair at ICLE. Ryan Albrecht. Ryan, how's it going? I live in the dream. How are you? Doing great. Look, I'm really excited to have you on today. Before we get started for why you're coming on everything,

let me just remind everyone. A quick disclaimer here, nothing on this podcast, investing advice. Please do your own work, consult a financial advisor. We're going to be talking about probably what is going to eventually have become a legal case. Neither of us are lawyers as far as I know. So keep all of that in mind as well. Ryan, I'm having regulatory week.

Obviously, Jeff Blue, you and I are talking December 5th. Jeff Blue and Spirit are closing arguments today. That's setting the merger arbitrage world on fire. There are a few other ones, but the reason we're having you on is Albertsons Kroger. They certified compliance, and we'll talk about that a couple weeks ago. There's probably an FTC case coming on the back end. But you, before we get into that, why don't you say you're the chief economist at ICLE? Why don't you give a little bit of an overview of ICLE, just because it's a little bit of a different background.

than the typical guests on the spot. Yeah, absolutely. I will be a little bit different here. I'm an academic by training. I have a PhD in economics as a professor before joining ICLE. And what we do at the International Center for Law and Economics is law and economics, which is applying the tools from economics to legal and policy questions. The thing that makes us unique as a research center, as a think take, is that our methodology really hammering on the economics and the law and economics, that is the thing that we do. And so we apply that across a variety of fields from First Amendment to torts and other contract stuff.

I tend to work on competition policy, mergers, you know, unilateral action, monopolization cases, things like that, because that's more my training from pure econ. But we're a group of economists and lawyers who come together to kind of use economics to answer, hopefully answer, give some guidance at least if we can't answer on how to think about a range of policy questions. So definitely not, if anyone on this guest, anyone on this podcast gives investing advice, it is definitely not me. I'm an academic and policy person by heart. Don't you put that voodoo on me, Rick and Bob.

I'm not giving any advice, invest in advice either. The reason we're having you on is because Kroger and Albertsons, the ticker for Albertson is ACI. Kroger is Byron Albertsons. This deal got announced in mid-2020, I believe. We're kind of at the end of the process. Krogers and Albertsons, I believe they certified compliance in, mid-November, which is where they tell the government, hey, we think we respond it to all your requests.

We're ready to close this either, you know, poop or get off the pot. Either say, you want to try and block this merger and let's go to court or let's make that's the expression. But the reason I was, you know, getting ready, researching this. Obviously, it's one of the few arbiters out there. Everybody thinks the FTC is going to try to block this. And I stumbled on your great paper. It's called Food Retail Competition, Antitrust Law and the Kroger Albertson's merger. I'll of course include a link to it in the show notes for anyone who wants to go read that.

But it was talking about all the different, you know, the theories of why you should, why the FTC should try to block this merger out there. It went through all these things. It talked about the history of the merger. So I'll just flip it over to you, you know, like kind of give me the overview of the paper, how you're thinking about this potential merger. Yeah. So what we want to do in this paper, there's a shorter, shorter for us, you know, a 20-page paper or so. And then the full, full-length one is the one that you mentioned. Trying to lay out the landscape, provide people with kind of the bigger picture. topics that we think are relevant to the potential challenge. We really think that there's going to be a challenge. Now I'm getting a little bit more hesitant because of the exact timing that you talked about of the FCC needs to move quick if they're going to do something here or don't need to, but it becomes much more difficult if the deal starts to close. And so we thought

there are kind of two important things to kind of give background. One is just the nature of competition in this market. How has it evolved? What's changed in the recent years? Because one thing that's a little bit different about this market, even though there's a lot of antitrust discussion around food retail more generally. Like, most cases just don't get brought. There's lots of, you know, potential challenges, but then the FTC signs off after divestitures. And so we've really only had one challenge that's gone to court in the last 35 years since 1988. And so there's not a lot of, you know, the industry has evolved to tons since 1988. And then we just have wild oats and Whole Foods is the one time that's actually

that's the one challenge that's actually gone to court. And so what has changed, in particular what has changed that is relevant for antitrust? And so we go through that in the paper and we can talk more about those details. Things like the real explosion of organizations like

Costco as a competitor in the space. And the other is just kind of background on antitrust, potential challenges, potential theories of harm that people have thrown out, at least in the popular media, and then what are the likelihoods that those would get some traction in the courts? And so we talk about things like, oh,

labor monopsony, instead of this being a case about the end consumer and harm against the purchaser of groceries, let's say, actually maybe the concern is the effect on workers or the effect on suppliers. And we go through some of those theories of harm. What is the evidence? What are things related to that? And then just try to, yeah, provide over. all context. We have five sections. Now I'm blanking on the exact, exactly all the five of them, but really trying to be that someone like yourself, someone who's, you know, in the media, maybe isn't so much in the antitrust world, try to give a little bit of background of how we should think about these things. You know, it comes out before any challenge. We see any challenge

now if there's a challenge, we'll try to grapple with the exact arguments made, you know, by the FTC if they do that. All I heard when you close that up is I heard, hey, if and when there's a challenge. We're going to have a great follow-up podcast as we're going to go through the FTC. So let me start right at the front of your paper. And again, I'm going to include a link to the show notes, go read the paper or at least, you know, there's a overview that's like five pages that really hits on the key points. If you're feeling really lazy, just five pages, all I'm asking. But right at the start, you say, hey, if the FTC tries to block this, the direct quote, I believe is this would go against the analytical framework that the FTC has been using, as you said,

for the past 35 years. So could you maybe talk about that analytical, analytical framework? And that might step on some future questions, but I think that's the most important questions to start with. Yeah. So an important part about our paper is we're not trying to argue that, like, hey, the way that we think that antitrust work. We're free market libertarians. Let it all go through. Let it rip. No, it's like, let's go on what the FTC has done. The precedent both in the courts when that has happened and these consent orders, consent decrees that they sign. You know, the way that FTC has historically looked at these types of mergers, historically meaning also in the last few years, also under Cher Khan, you know, there hasn't been a, a grocery store merger that's gone

through under Khan, but there's been related ones in, like, uh, like gas stations and super, uh, gas stations and convenience stores, that's a word up with seven 11 speedway, I think. Yeah, yeah. Yeah. Yeah. Yeah. Yeah. And so these are, you know, it's not a complete analog, but they've, they've gone through with divestiture. So the usual way that these. are approached by the FTC is they look at the merger overall, lots of stores maybe involve lots of overlapping markets.

They have concerns maybe, but those concerns are really somewhat local, that there's a particular city, there's a particular region, a county here or there, on which we have concerns. And all these have been couched in the language of consumers, final consumers. We're worried

if this merger goes through, consumer prices will rise in Minneapolis. for example, where I'm at. Okay. Well, in order to allow it through, the FTC says, okay, we're going to, we can allow it through if you divest stores in these particular markets.

And they list out 20 of them, 30 them, whatever is 100 of them, whatever it is, that these are the markets we're concerned about. And then they allow it to go through. Because usually what you have, it's the same thing you have in the Kroger-Alberson's case, is two companies that don't overlap that much, like most of their stores are completely separate. If they're completely separate, there's hard to make an antitrust case that there's a real concern, right? If Kroger has a bunch of stores down in Georgia and Albertsons has a bunch of stores up in Massachusetts or whatever, okay, yes, they're big companies nationally,

but they're not competing with each other, at least from the consumer front. Oh, but actually, they overlap in a few districts. Let's worry about those. And that's the way that the FTC has proceeded. We go through a bunch of cases in which that's true, and we say, okay, we're going to divest, you know, we're going to find the market this way. Given this market definition, we have concerns in these 20 markets. You got to get rid of some of the stores, sell them to a third party in those stores. And that's how the FTC has historically looked at these, these kind of retail, food retail cases. And if our argument, kind of, our overarching argument is if that's the approach that's going to happen, that the FTC is going to continue to take. And we argue, now

here's where we argue they should continue to take. We shouldn't break from precedent to drastically at any one point. You know, people need to know what the government's going to do. They need to understand what the government's going to do. Given this precedent, and we think it should stay towards that, something like this should happen in the Kroger-Alberson's case, where the Kroger and Albersons don't overlap too much, the place that they do out west, some place in Colorado, Alaska,

you know, these places have a divestiture. And we've already seen a proposed divestiture. I'm not saying it's perfect. We go through in the paper some of the benefits of it, but, you know, in those areas that we're concerned, sell one of the stores off and then that should be enough to alleviate the standard competitive concerns of, you know, harming consumers through elevated prices. And you mentioned in the past 35 years there's only been one grocery store merger challenge.

That was Whole Foods, Wild Oats, which was kind of unique in a few ways. I mean, I'm not crazy familiar with the case, but it's kind of unique in a bunch of different ways. To me, I'm leading the witness here, but tell me, if I'm wrong, the reason only one of them has been challenges because it's pretty simple, right? The government comes and they say, hey, you two would have too much concentration in Baton Rouge, Louisiana, St. Louis, Missouri, and two other markets, divest those markets and we're good or don't divest those markets. And this is a pretty easy block because we go to court and we say, hey, they're going to be a monopoly in Baden Rouge.

If you have a monopoly in one market, that's enough for us to block. Now, you know, maybe you could argue Baden Rouge future competition, build in there and stuff. But it's much easier to just the best. Like, tell me if I'm wrong, or is there other reasons why the government hasn't brought suits in this industry. You have to remember, you know, no one's going to bring a merger that they know is going to be blocked, right? So we're never going to see Walmart and Target trying to merge because in an instance, the government's going to block that. The courts are going to go along. It's never going to be proposed. So we're only going to see proposals that have some probability of getting through. Okay. And then the ones that get extra media attention are the ones that are

kind of on the borderline. Will they be challenged? And then once they're challenged, you know, will it go through or not. So given that we're only going to see proposed mergers that have some shot of going through, then the question is how many kind of, how many companies are going to be too overly optimistic and bring things that they can't or that are not eventually going to go through. And here, again, you have another stage of back and forth. Well, some people at proposed mergers and then they think that if it goes to court,

they'll get blocked. And so then they drop it in so it never gets to court. So that's an important context. And what we observe is only those kind of in the narrow ban of the companies think it should go through and think it could go through and then the FTC wants to challenge it. And so especially in something like food retail or related retail markets, like there's pretty clear understanding of what the challenges would be. They'd be that bad in Rouge market. They'd be focused down to that. So there's not really like complete disagreement about what's going to happen.

Compare this to, let's say the recent DOJ case. It just had the trial of DOJ case against Google. That's much more a unique case that the DOJ is trying to bring against Google. Two retail companies merging. We've seen that a hundred times, a thousand times. There's a little bit better understanding of what's allowed and what's not. And so, yes, we tend to see the FTC and these companies coming to an agreement through these consent orders about what, you know, how to fix the main problems.

Now, if the FTC wants to bring some of these more, let's say, more speculative cases, then it'll be more in that DOJ Google land where maybe we'll have more room for disputes on what will come through. But to the extent if they want to keep it to its standard, hey, look, these companies are going to have too much market power over consumers in a local market. There, we kind of know how to hammer out the details. And now a quick break to remind you that this episode is brought to

exclusively by AlphaSense, the AI platform behind the world's biggest investment decisions. AlphaSense gives you the tools you need to provide better analysis for you and your clients. As yet another value podcast listener, visit Alpha-dashcense.com slash FS today to beat FOMO and move faster than the market. That's alpha-dash-sense.com slash FS. You know, so we'll get there in some of the labor monopsony discussion and the waterbed effect discussion against suppliers. But I do think like this administration, this antitrust regime, they do want to explore some of those things. You know, Amazon I robot is another one. I think you guys wrote something on it, if I remember correctly. That's another one where I think

most administrations, even though Amazon's big, would not have brought something, but Amazon's very big and this ministry wanted to bring it. Before we get there, I do. The two main things that I found, I found everything in the paper interesting, but the two main things I wanted to discuss were obviously the divestures. But before, let's start with you are you. Hey, his story. historically, over the past 35 years, they've only looked at kind of grocery stores when they've judged these antitrust. And I think the grocery store, the standard is someplace the once a week shopper can go shop at. And you say, hey, A, the once a week shopper is no longer than norm and you give some stats there. But B, you argue you, and this was the really interesting

thing to me, something like Costco historically would not have been included in kind of the competitive set, right? You say, hey, look, you know, with Costco, with Instacard delivery services, the competitive set is actually a lot larger than historically the FTC has used. And because of that, this merger probably should go, like, if it was already going through, it should go through even more.

But I guess that is a, that is divergent for precedent. It makes logical sense to me. I'm not sure if the FTC is going to agree, but I just wanted you walk through that. I think you were saying, hey, it's not necessary, but it probably should be considered.

So why don't you walk through that? And if you think kind of precedent can get updated or how that would play out in this case. yeah a great point it's kind of a weird part of the paper because we're saying you should go with precedent but actually here I think things are going to go up now the thing about these consent orders that we've seen a ton of them over the years where the FTC and the companies come to an agreement is they don't really need to hammer out these details they come to an agreement you know the company says the market should be bigger the FTC says the market should be smaller whatever they don't really need to come to an agreement once they say everything is good if we if we divest in these 22 districts. So we haven't seen a real challenge on the market definition for people who know much about antitrust. That's like a crucial part of almost any case.

At least any case, that's not a per se violation, like a collusion argument. The people who listen to this podcast are familiar with Jet and there is a big, hey, is it route to route? Is it nationwide? There's a big market definition argument there. So I think a lot of the podcast listeners will be familiar. Yeah, exactly. And so we argue that, okay, you know, all these consent orders,

go back to the market definition of a supermarket, which is slightly different than a grocery store because it also includes a bunch of non-grocery items where, in the FTC's world, you can get, in the FTC's wording, they can get most of your, almost all, I forget the exact wording,

almost all of your household items. The direct quote is enable a consumer to get all weekly food and a single shopping visit is, I believe. Yeah, yeah. Okay, yeah. So, so it's about this idea, basically big enough, not a corner store, you know, trying to rule out, uh, things like, uh, you know, smaller markets, maybe some oriental markets or ethnic markets of different types, maybe ruling out the smaller,

you know, uh, super America near me as a bunch of food, but it's not, it's not all the food. You're right. I'm not getting that much protein. Ruling out the 7.11 where you're only going to get your diet, Dr. Pebb and some Reese's can't get the full. Yeah. So, so those things are relevant, we think, but I think they're never going to make it into any reasonable market definition. It's the way antitrust works. But there are things that don't, by historic standards, qualify for that, that we think are relevant competitors for this merger. And that's the biggest one is these warehouse club stores.

Let's just say Costco. Costco is the big player here. So in 1988, it was something like they were a few percentage. And so in 1988, whether you left them in the market or not, it doesn't really matter. now you're talking something in the like 30% of grocery sales at a place like Costco. Now it matters if you are going to include them in the market. Market shares go down a lot and market shares, even though I don't think they're that important, tend to be important in antitrust cases.

And so we argue that they really will need to now in today's world, if they go to court, they're going to have to argue over this. And the FTC is, I think, is going to lose on this point that the Costco's of the world are relevant players, and that matters because then that moves, you know, that, as I said, the market share down, but introduces a wide range, sorry about that, a wide range of other characteristics that are relevant here. For example, we know we have good data on this, that these warehouses have a much larger customer base in terms of geographic region, okay, whereas a local grocery store tends to get most of its consumers from like a two mile radius,

a Costco gets most of its consumers from like a 20-mile radius, which is very different. Okay, so now when you're thinking about a 20-mile geographic radius, now you're thinking like, you know, across a major metropolitan area. And so now it's not just like, you know, neighborhood by neighborhood or city by city. Now you're covering a big area. And so these are things that if it goes to court, they're going to be challenged on. I think the, the Kroger-Albison lawyers, economists are going to be right to say that, you know, Costco should be included in the market definition. and once you do that, it's harder and harder to make the case that this is going to be some merge to monopoly that we should be concerned about.

Again, as some kind of overall block the deal. Local markets, it absolutely still could be the case, and this is where divestures come in. But if you're going to say, what FTC is going to say is we're going to try to block the merger outright, they need to make a much stronger case at kind of an overall level that this is going to be harmful for competition. Now, we also mentioned Instacart. again this is one of we go to can we go to a second because I just want to follow up on two things you said there and then I definitely do want to talk so one thing you use let's just start with historically the FTC these companies have not including them in market definitions do you think Costco the warehouses should get included in the market definitions that's like an updating of the market I completely agree with you I think it's obvious all my friends have Costco cards I live in New York City there's not a Costco I wish I had a Costco card like I think it's completely obvious that Costco should be included and as you said that's great because a Costco pulls

for 20 miles, grocery store pulls for two miles. So that really expands, creates a lot of competition. Is there precedent for adding? And now, obviously, there's not a market definition

set in stone where, like, you know, the airline industry is this, the grocery, but is there precedent for a, you know, if this case was more on the border for a judge saying,

hey, 30 years ago, the market was this, but this new group of competitors has entered the market. Has there been precedent for that? Yeah, I don't think, it's a great question. I don't have something out of the top of my head,

But these market definitions are disputed every time. So I can't imagine we can really think of them as precedent in the same way, some other aspect. Yeah. The only one I could think of off the top of my head is Office Depot, Office Max, I believe, had the merger and got blocked. And then 10 years later it was okay. Or like, you know, everybody thinks DISH direct TV that got blocked 20 years ago. But it would probably, it would probably, not definitely, but because there are still actually some rural areas where satellite TV is important. It would probably get through today.

But that's more increasing companies. But I just think, you know, I haven't seen it before. And yeah, in the airline context, I mean, different cases have brought up, well, do you include the, I forget the exact labels, the low cost, the low cost carriers versus the ultra low cost carriers, you know, and that comes up in the spirit jet blue. It came up in the American Airlines, JetBlue Northeast Alliance. So there, I don't know if there's this secular trend of like including more and more of these competitors over time, but each new case, there's a new dispute over which of these. should be included, which are like the comparable airlines. There it's a little bit different because, you know, we're often talking mostly about the major players.

And so we only have like 12 companies that we're really thinking about. And so it's like, oh, do we include eight of the 12 or do we include six of the 12? Or, you know, so it's a little bit different in that context. It's disputed every time. But it's definitely up for grabs in any debate. Courts will, an important thing I keep bringing up in like every conversation I have about antitrust is an important thing to realize is that the average judge in the course of her career only sees two antitrust cases. So, you know, these aren't expert antitrust judges.

They're generalist judges. And they're going to rely on rules of thumb precedent from the FTC and from other courts. And so they're going to have some deference, regardless of whether they're kind of have an inclination for, you know, be pro antitrust, anti-inter trusts. They're going to have some deference for precedents here. Not to bring everything back to the Blue Spirit trial, but the Jet Blue Spirit judge, who I think is absolutely sharp. I've heard incredible things about in the courtroom. I think they're very sharp, but they're 82 years old, and they asked some questions, hey, if I think this is on its face anti-competitive, but, you know, with this, the best year, this tweet would be pro-competitive, could I, could I order that?

And me and everybody who's done antitrust for a while, I'm like, absolutely you can, you know, but the judge was honestly asking. And, you know, it's because he's 82 years old. He's one of the most respected judges out there. And this is his first antitrust trial after like 40 years on the bench. So, yep, there's one other thing you said in that Costco thing that I wanted to ask you before we went to delivery service. You said, in my opinion, market shares couldn't matter. Why shouldn't market shares matter? Because obviously, a lot of antitrust is H.H.I. You know, so I just wanted to ask you that. Yeah. So I think one thing about antitrust that is so from a purely, like if I was, if I was teaching, you know, economics 101 like I used to,

or intermediate microeconomics or something like that, I would make a big deal about the fact that concentration measures don't tell us a lot about the competitive nature of markets. Some markets can be fairly concentrated, have a big player, but if there's ease of entry, there's close substitute ability, it looks very close to a quote-unquote competitive market. And so these are kind of bad proxies, and they're kind of arbitrary proxies because, you know,

at the end of the day, whether we define the market, to include Costco or not, like, that shouldn't change whether we think that prices are going to rise for consumers or not. Like, that's just arbitrary whether we, you know, it's just a matter of basic math that if you add one more company in, everyone's market share is going to drop. Okay. And so that's kind of a, it's something that's not super relevant. If we can say otherwise, you know, prices are going to rise or not.

Now, in antitrust cases, it turns out to actually be very common to stress over this, to stress over the market definition, to stress over the exact market shares. Some of that is precedent-based. Different cases throughout time have really hung on to a 30% number, a 50% number, things like that. Some of it is just in the absence of really good data, it's just kind of a simple proxy that people use to get an intuition of whether things are going to be anti-competitive or not. I think we rely too heavily on that. I think that their market, we have a large literature within economics, and I've written about this fairly extensively on our ICLE blog, truth on the market and on my own newsletter economic forces. You can check those out.

But lots of places where we see high concentration are places that are super competitive. And we see this when like trade barriers fall. Okay. Trade barriers fall. What I mean by that, like we signed a free trade agreement, let's say in Europe, a bunch of European countries signed a free trade agreement. Okay, it's easier to trade. Basic theory says what should happen? These markets should be more competitive because now you can more easily ship from Germany to France

without these international borders getting in the way. In that, when we observe those types of agreements, you know, maybe more subtle than the, you know, the European Union and things like that, when we observe decreases in trade barriers, concentration rises because the best company gets more of the market. Okay, put it another way. Think about the rollout of Walmart. Okay. So Walmart, before Walmart, this is very simplified story, obviously, but before Walmart, there's a bunch of

little independent grocery stores throughout the country. No, no company has that much market share at the national level because, you know, there's a few stores in Minnesota, there's a few stores in Louisiana, there's a few stores in New York. Okay. Now, Walmart comes in, is more efficient, there's lower prices, captures a larger percentage of market share. But what do we see overall? Price is dropping, quality, improving. Okay. The reason we see concentration was because there's competition for the market. And so we can't just look at things and say, oh, it's concentrated, therefore it's not competitive. It's not concentrated, therefore it is competitive. These are very imprecise proxies. And I think we should, I'm not going to say do away with them entirely.

again, I get the heuristic role they play, and it is, as a matter of fact, courts do care about it. Okay. But many economists, myself included, push that we should probably put a little less emphasis on it. Hey, I'm with you. And, you know, just to me, Kroger's Albers going through, it's like, hey, Kroger's, we'll talk about the vestry in a second. Crogers was trying to give these stores away and nobody wanted them. Like, if that's not the sign of these stores are not great, like the businesses trade for five times. Even like, these are not good business. businesses and Kroger's Albersons coming together resulting in an increase in price to, now maybe in one or two markets, as you said, maybe sure, whatever, but it resulted in

increase in prices to consumers is so laughable to me. And last thing I wanted to ask about delivery services. And these have really risen over the past five years since COVID, you know, like before, before COVID, if you tried to launch a delivery service, you know, the, I can't remember what the delivery service in the dot-com bubble was, but outside of New York City itself, which is the debt, probably the dentist's place in America, you tried to launch a delivery service, it was a disaster because you know what? Consumers just didn't want to, it actually cost you time to go in your car, go to the grocery store, shop, come back. When you presented that price

of consumers, consumers were just revolting to say nothing of. They like to pick their apples and all this sort of stuff. But delivery service have rives in. So I'm rambling. I'll turn over here. How did delivery services kind of changed the market index? And why do you think they should be included here? Yeah. So I don't know exactly what it means to include them, but we think it's definitely something that you should think about and the FTC needs to think about what are the impacts of it. There are a few reasons why. One is that opens up and expands the market to the extent that people use delivery services, whether there's a third-party app like Instacard or whether it's like I have a subscription to, what's it called, Walmart's one. I forget what it's called.

Walmart Plus, yeah. Where they deliver, that expands the market. I get delivery from a Walmart that's about 10 miles away that I would never go to if I'm driving, okay, but I get delivery from it. Now, if that's a real option, and that's a real percentage of the market that are people that are exercising that option, okay, that changes the geographic nature of it. And along with that, makes, induces more competition. To take the extreme example on Instacart, you pull up Instacart where I'm in, I'm in the suburbs of the Twin Cities, okay, realistically driving to get groceries, there are like two spots I would go to. There's an Aldi and a local spot. but Instacard I counted something like 17 grocery stores

not the food stuff not the not sorry not the pet food stuff not getting delivery from CVS like 17 grocery stores that I can get delivered from that's got to be relevant to thinking about the nature of competition if let's say even like 5% of consumers use that if 5% of consumers can open up their phone

and almost instantaneously get quotes for prices from 17 different stores. That's intense competition right there. And it matters for how we think about the market power that Kroger and Albertsons would have. And as you said, if a Kroger, you know, if their market definition was two miles, right? And for some reason this closed and they'd have market power on that two miles. Well, with Instacart, you know, if Kroger tries to boost their prices up, I do it all the time. Like, for some reason, I love bell peppers. And bell peppers have been wildly expensive. And a lot of times when I'm getting my Instagram order, I'll just look at the three

grocery stores nearest me, and I'll see which one has the cheapest bell peppers. And like, that would be a check on them. That bell peppers is silly. But, you know, it would be a check. If the Kroger next to you tried to raise prices and eggs all of a sudden were $12 for a dozen, you would just go to the next thing and be like, oh, yeah, those are normal. So that is a check. It absolutely expands the market definitions. I am completely with you. But it is, it is interesting because that is very new. And I could see, you know, judges tend to be older. I could see a judge, Costco's absolutely going to be in their mind. I could see a judge having a little bit of problem with the delivery services just because they're skewed younger.

And antitrust is one person. It is one person's decision. And you, even if you're the most unbiased person, your personal things come in. I could see them kind of dismissing it, but I'm with you, delivery services. I want to ask about let's go to investors next. But before we get there, just wrap ups on wholesale clubs, delivery service competition that you think we should talk about here. Yeah, just that, you know, it's all about trying to make the argue. it's all about whether after the merger

Kroger and Albertsons will have the power to raise price on consumers and all of these things are, they don't settle the, you know, they don't completely decide the case, but these are things on the margin that to me seem like they're putting

more and more competitive pressure on this industry, which is, you know, historically it's been a low margin industry. Absolutely. It's been, it's gone through ups and downs. And so there's lots of, you know,

it's not an industry just said like first glance, strikes of market power because you don't see this kind of control. Put aside arguments about inflation, which have a food inflation, which has a whole different cause. It has nothing to do with antitrust. You know, this is a market that seems pretty competitive. And so I think the FTC is going to have a hard case on this front. So, and there are the labor monopsy and waterbed effects, which are next in the paper, which I do want to discuss. But before we get there, let's talk to best trips. And I'll just, again, I'll give a little background. Investures. Everyone is terrified. Devestures are normally how you solve, right? You and I want to merge. We're going to have a market problem in Hawaii. Well, we divest my Hawaiian assets and now we're good. Everyone is terrified of DeVestors in retail in general because there was the 2014, I think. Albertsons in Safeway merged. They got rid of some of the Safeway stores that were going to be anti-competitive. I think they got rid of them to hog in. It was a disaster. You walk through the disaster. I'll turn over to you in one second. But everybody's so scared of DeVestors because every time I talk to anyone, I say, hey,

could you the best to get fixed here? And they say, oh, my God, the Albertsons Hagen's thing, like it was such a disaster. I think regulators are terrified of it. Everyone's just scared of it. So I'll flip over to you. What do the divestures to? We can talk about the divestager package they have in place here. But I do kind of want to address that because even before this deal came out, every time I would talk to anyone on antitrust, people were just terrified of the divestors to fix the antitrust problem. Yeah, absolutely. And it's something that courts and the FTC and the companies actually absolutely have to take into account that divestures don't always work as planned. There was a rental car issue, if I remember as well. There was a rental car. A few, I haven't kept

up with all the rental car mergers, but some of those have had issues, absolutely. Yeah, it's a problem. It's not super easy to, you can't wave your hands and act like it doesn't happen. It's a real, if, for example, 50% of the time these divestitures ended up like the Hagen's, however you say it, and the company goes under, that's really, you know, lowers the value of these divestitures. But that's not what we see. The FTC has, for the last few decades, it's been a few years since they've done it. But for the last few decades, they've systematically gone through and looked at these

divestager packages. And they find overwhelming success of them. Okay. But success defined by the standard of completely restoring or increasing the amount of competition in the market. Okay, and the over 80% of these divestitures that the FTC is signed off on have completely or more than restored competition in these markets, okay? And so we shouldn't get, we should be absolutely aware of the possibility that these things don't always work out. But if we're kind of taking a step back and even looking at retail more generally, these expenditures seem to work on average.

And so you need to, again, it's a cost benefit analysis type of thing where we need to take these years. Now, obviously, in this case, because of, you know, the close nature of the Hagen's divestiture, you definitely should put a little bit more weight on that than you should on some divestiture in cars, for example, in the rental market, right? But we shouldn't be scared by it kind of as a categorical option. Anyone who's telling you that these things have been proven to be a failure are picking out a few select cases. The, you know, the FTC's own studies are showing very heavily that these things tend to. to be successful. And so, yeah, go ahead.

Just so on what you're saying there, and we can talk about this specific divester, but so you are quoting from the FTC's own finding, not your own independent finding. This is the FTC published something that said, hey, over 80% of time we find that these are very successful. Was that, is that correct? Correct, correct. Yeah, and it's in the paper. We have another, we call them TLDRs on divestitures that is exactly on this topic.

I think I actually read that one as well. But let me just say over 80% of the time. Was the FTC in their study, were they happy with that number? Yeah. So this is, do they want to find a good number or not because it's, you know, makes them look good because it makes them look good because it's their divestitures? I think there's enough division of power and responsibility within the FTC that I wouldn't put too much weight on that. Right. This is, these are, these are kind of, I forget which office, but let's say it's the office of competition.

the Bureau of Competition that's doing these studies. Okay, they thought that this was a success. We can go happy, I don't know. This is an FTC document. It doesn't read like there's a bunch of joy in it. It's not the most lively thing in the world. But yeah, I think there's overall the documents. The two most recent ones are the ones that I've gone through

are positive about this finding. Yeah, it's great for them. Yeah, no, I was just because the over 80% in general, that does strike me as well. But if I came to you, I was like, hey, over, you know, over 80% of the time I'm successful in my, my child, like, making it alive to the weekend. I'd be like, well, you know, you probably wanted to be 100% of the time there. So I just wonder, because I could say, hey, 85% of the time we keep competition in store. But, you know, the other 15% price is going up to consumers, lack of competition, that you could argue that's a real issue, right?

Like, if we just rejected everything. Yes, but, you know, this is more like, you know, 80% in basketball or in baseball, especially would be a crazy eye number. I completely get your point. But this is a market where, or this is a world in which we don't tend to see 100% success in anything, right? So this isn't like keeping your kids alive or the default is that we're going to get these things right. The default here is there's a lot of uncertainty, both, you know, for the FTC and against the FTC to depending on how you're thinking about it. And things that are, you know, more likely than not, that's a language that comes up fairly

regularly in antitrust, you know, reasonable probability. These are things that are more like a 50% chance to have been interpreted. Like 50% or more is like, is a good number in antitrust cases. That's just the nature of the markets of uncertainty. Correct me if I'm wrong. If I went to the court and I said, hey, you know, based on precedent and we think this, this the best year follows precedent, there's an 80 to 85% chance that this maintains or increases competition, I think the court would have would have to let that through, right? It's kind of like,

yeah, yeah, for sure. That's that's beyond the kind of level of confidence that the court expects in these things. Absolutely. If you got the FTC to agree that this had an 80% chance of restoring competition every market, you know, in market by market, I think the court would have to let it through. Absolutely. And look, I could be right. I think again, Kroger's and Alpersons versus Costco, Walmart, Amazon, all these guys. I really don't see outside of specific markets any chance competitive farm. But again, biased, bias. Let me ask, so we've talked about the historical issues with debesters. Let's ask about this specific divester package, because it's interesting, right? Like, the issue with the hog in precedent, and people can read the paper for the president.

That was like a grocery store that had 10 stores that bought 150 divestures. Like, they were just overwhelmed. They were not ready to buy this. And this divesture package, the buyer here is interesting. So I will just, instead of recounting the story myself, turn it over to you. yeah so who knows to what extent this package is a reaction to the other one it's a very different purchaser so or proposed uh purchaser so the proposed buyer is cns wholesale grocer which is a huge privately owned company that uh mostly is it's in the name wholesale it's mostly host sale but they also run some grocery stores as well so unlike you know the small i think 18 was the haggins number of stores you know Instead of an, you know, 18 store company, this is the third largest, second largest privately held company in the U.S., something like that. It's a massive, massive company. And so this is not on par with the Hagen's example for that reason alone.

And that matters for a variety of reasons because one concern is that the company goes under. That's the extreme example, that the company goes under and then they sell it back, then the stores go under and then, you know, worst. case scenario, then the stores get purchased by Kroger and Albertsons again. That's the worst case scenario. And now, CNS is that people have brought up that they don't have, you know, the best credit rate in the world. And so there's no guarantee that they'll be around in five years. But it's a lot more, I think it's fair to be a lot more confident about that than, than you are with a smaller company. So that's, that's an interesting. Just the pure size of CNS

changes it relative to the Hagan's example. The other thing, go ahead. Oh, I just say, so Spirit Chip, you buy Spirit. You eliminate, like, all their back office, all their routes, all their loyalty programs, everything. Like, there is, that's really hard to, they, then the, the best your buyer goes under, whatever. That is really hard to unscramble and recreate. Albertson's Kroger's, like, to me, the bar should be a little lower because, okay, the buyer goes under. Yes, not great. But it's not like the grocery store.

Like, the grocery store is a physical plant, right? The grocery store can go to a new person. You can sell it even cheaper to Walmart, safe, whoever the competitor is. Like, I'm not seeing it's perfect. But to me, when you're talking about something like this, the bar should be a little lower just because, you know, there are industries with intellectual property with a lot of human capital that goes away once the merger happens. That can't be unscramble. But you give this to kind of like, you mentioned shaky, like, okay, they buy this and they go bankrupt. Like, it's probably a chapter 11 where they're restructuring, not that they're liquidating to all the C or so.

To me, like, I do understand those concerns, but they're not, they don't weigh quite as heavy to me. And again, I understand that's my opinion as a little bit more. remarked, probably like, financially sophisticated, I don't want to put too much, then versus the courts and the FTC, which have a reputation, but yeah. Yeah, yeah, yeah. No, it's absolutely fair and something to think about how much weight it gets in. Probably zero. That's what I say.

Probably zero weight. Understand that's not a legal precedent, but I, yeah, and it's a, it's an important thing, because there's a lot of subtleties in this proposed divesture. So some of it is the physical stores, which sometimes the company's own, sometimes they don't. I don't know all the details on this, right? So sometimes you're divesting literally the property, you know, the store that you own. Sometimes you're, you're passing over like long-term leases, things like that. You know, there's a lot of things here. So if it goes under, what do you lose? If it's literally the store can then just be recycled, well, that's, that's great. It's

not kind of the destruction that we think of with some sorts of bankruptcy. It's more of a reshuffling. But from an antitrust perspective, the fact that then could go back to Kroger and Albertsin's it's a possibility, you know, it didn't accomplish its goal. It might not from the overall structure of the economy and thinking about wasted resources in bankruptcy, maybe it was very small, but in terms of, you know, restoring competition, there's still the same effects that it hasn't restored it in the way that was initially thought with the divesture. So absolutely true.

Now, one of the interesting things about CNS, particularly as the purchaser here, is that because they specialize in wholesale and they have a more complicated relationship where they fran i think it's even maybe franchise isn't the right word but they they franchise some brands so then allow stores to have them that they don't actually operate and that they do operate some i i should know more of these details but i don't but they have this more complicated relationship with the actual physical stores but again their specialty is the wholesale and one of the things that we've seen in the in the food retail market overall the grocery store market overall is a growing integration of the wholesale and the storefront together to get those

efficiencies of the vertical consolidation there. And okay, sorry, no, that if we can bring more stuffing house, we can get more efficient at shipping and distribution. And so much of the market is the distribution versus just the storefront. The storefront is obviously important, but it's moving away from that as kind of the key example. I mean, an extreme example of this, the storefront not mattering, I think is it Kroger, Albers says one of them has started to take stores and close them as stores, I'm not saying a ton of it, but a few of them, close them as stores and basically make them like many distribution centers in the more residential areas that the grocery stores were at. Because they're doing so much delivery.

And so you just have this, you basically have like the Amazon prime now location, which is right in the heart of the cities, then you can then distribute. So the storefront is becoming less important in getting the whole supply chain, getting more of the supply chain in-house, getting efficiencies from that when possible is becoming a bigger deal. And so by selling off to CNS, selling off some of these stores of CNS, there's reason to believe that you would gain some of the efficiencies of integrating the storefront with the wholesale without kind of the loss of competition that you would expect if they could never sell off these stores to. to Walmart, right? Because that would be selling off to the big guy here, the big storefront. But here it's beneficial because it's not giving more market power to anyone who has market power.

All the stores that CNS runs don't have market power. Maybe there's some spot in Alaska that has, I don't know. But, you know, as a whole, CNS is not a big-up player in the final distribution to be able to have market power. But so instead of giving market power to someone, you're actually gaining efficiencies by integrating the... It's not selling to you and me who would have no ability to operate these stores. It's selling to a credible player who has a business case for this, who has the sophisticated back office suit I hear.

There's two arguments that I think some people have made that the, if the FTC does bring cases that are likely to make, that are novel. They're almost approaching the hipster antitrust level. And you address them, so I just want to talk about them. The first one would be, let's start with the one that's more interesting to me. This is what you coined the water bed effect, where, hey, Kroger's and Albertsons merge, you know, One plus one equals two. Now, instead of Kroger is going to craft and saying, hey, we'd like to buy Kraft mac and cheese from you, we're going to buy a thousand boxes. Kroger and Albertsons go together and they say, we're going to buy 2,000 boxes.

But because of that, you know, we want 98% of the price we would bought as a standalone and they could exercise larger power over their suppliers. Obviously, I've laid out the waterbed effect. It's market power over suppliers. Why don't you talk about that and why this is or isn't an antitrust concern? yeah so it's it's a it's a thing that's been brought up in a few cases it hasn't been successfully argued in any case it's been rejected in a case in the u.s and two cases in the u.k uh but the which case of the u.s was a rejected end do you know uh it's in the paper i i can't remember i'm sure yeah yeah yeah it was it was not the central argument in the case

but a but a but a judge basically pooed um so the the the argument before we argue before I'll try to argue that this is not a good argument. The argument is by me pushing down prices, okay, argue, you know, bargaining harder, pushing down prices on some input seller. The input seller then has to raise prices on my competitors, okay? And therefore, because their prices are higher, overall consumers are harmed. Yes, I get lower prices. With my lower prices, I'm able to charge lower prices to my consumers.

my consumers are better off. There's never an argument about harm to my consumers. It's always the consumers at the other stores. That's the water pet argument. I push down my prices that needs to come up somewhere else. Someone else's prices have to rise in response. We go into the paper some of the theoretical reasons why this is a little bit iffy, just based on, like, this is getting in the weeds of the economic models that kind of try to justify this.

but the basic idea is that it's almost an improvable claim like arguing anytime you get a better price you could argue that someone is getting hurt along the way you have to really come with more evidence and so far outside of a few pieces in the New York Times it just hasn't been credibly argued

so you know piece in the New York Times and this is the reason that we talk about in the paper they'll say oh yes Walmart comes in and bargains really hard for these lower prices but you know who gets screwed over the little rural mom and pop store. Well, that's a nice story, but there's basically no evidence for it because there's lots of other reasons why these stores have higher prices. They're less efficient in the terms of distribution.

They purchase smaller numbers. Okay. And so we basically have no way to differentiate the reason I'm getting lower prices is because I'm somehow like extracting it at the harm of other people. hand I've just easier to sell to. It would be observationally equivalent. We'd see the exact same thing if I am just easier to sell to. And so instead of going to me in order to be convinced to move away from me and sell to the little mom and pop store in rural, rural Tennessee, they have to get a higher price. That's just a compensating price for dealing with this small store. And so there's no,

that alleged harm is a much more speculative thing. And so you need, I think in order to make that jump, you need much stronger evidence I think we will find and certainly much stronger evidence than will be, that's been presented so far. But the FTC can collect a lot more evidence than, you know, these New York Times reporters can. So maybe they can make it. I think it's a crazy claim, right? But to me, it is one that you know, under this administration, again, I actually, I don't agree with her a lot, but I think she's very thoughtful. I like Lynn Khan. I like a lot of this administration. I don't agree with them on a lot of the antistrust, but I think they are very thoughtful. I could see why they might want to try this, because it's,

If you win on waterbed effect and this, well, you want to go break up Walmart because they're too big. You want to go break up Amazon because they're too big. Guess what? Even if they got too big organically, you've got water bed effect now, right? They're getting lower prices from their suppliers. It's got to go somewhere. I'm with you. It seems crazy to me.

It's like, hey, Walmart negotiates for 500,000 boxes instead of my local mom and pop gets 50. So they get lower prices that causes the local mom and pop to have to pay more. It seems crazy to me. Everybody knows you get benefits with scale, and then you can vote with your feet. You can go buy the higher price from the mom pop, or you want the lower prices, go buy the Walmart. And you know what? The FTC just made sure that Walmart didn't have too much geographic concentration. So that's what a great effect.

And now a quick break to remind you that this episode is brought to you exclusively by AlphaSense, the AI platform behind the world's biggest investment decisions. AlphaSense gives you the tools you need to provide better analysis for you and your clients. As yet another value podcast listener, visit Alpha-Sense.com slash FS today to beat FOMO and move faster than the market. That's alpha-dash-sense.com slash FS. Last one, and then we'll just do a wrap up because I realize we're kind of running at the end, labor monopsy. This is, hey, Cogers and Albertsons combined, they're going to have too much regional power with local power with retail workers. And that is an antitrust issue.

Do you just want to address that one? Yeah. And so this FTA. and the DOJ along with it are trying to make a bigger push towards bringing more worker also tying to buyers sellers more generally more cases on kind of

not final consumer but the people upstream so the workers or input sellers in the water bed effect case so they're trying to push on workers in particular as an example of instead of monopoly power monopsony power the buyer power by purchaser

of labor service services. Okay, very reasonable thing to bring. The DOJ had success in blocking the Penguin Random House Simon Schuster merger based on the effects on not the readers of books, but the authors of top selling books, books with large advances. Okay. Basic principles of competition policy of antitrust should apply to workers as well. That, you know, if they lose bargaining power and they're harmed, therefore you should block this type of merger. There's a few reasons why we think in this case, things are going to be different. So the DOJ was very strategic in how they define their market. They defined it only for authors who are making over a $250,000 advance. The Stephen King testified. These are the big names, $250,000, big names. In that very small market, the two big players merging could, was successfully argued that it would harm those authors.

It wasn't even argue that they would harm authors overall because that's a much harder market to try to allege market power on. Lots of people are competing for smaller authors. The grocery store workers are much more like the, and even beyond, the small authors. Because even if Kroger and Albertsons are the big employers somewhere, okay, lots of these people are going to other, lots of workers. in this industry are moving between industries and you need to think about that when you think about their labor options and what would happen. So there's just a lot less threat to be able to merge in lower wages because these workers can go anywhere else. So you're not just thinking about them going to Walmart or Costco. Most of these workers transfer outside of the food retail industry.

And so any kind of claim you have about having market power goes out the window if, you know, the moment you try to drive down wages, they hop over to another. industry. And so our argument, go ahead. No, no, no, please go ahead. Finish your argument. So our argument is this could be true in some towns. But if it's true in those towns, it's probably much more likely that we're going to observe the output market effects more, like that that's really, so why try to push a more extravagant theory that courts aren't as familiar with? If like there's a small town, not, if there's a medium-sized town in Colorado that has only a Kroger and Albertsons,

just do the standard output market case, and then you have the case. There's no reason to try to stretch it to labor markets. The other difficulty of bringing the labor market argument is that both of these companies are heavily unionized, and so any market power that now the increased market power that the now merged company would have is counteracted by unions. And the reason, one of the main reasons to have unions, to bargain for better wages, it's kind of, it's not trivial to say, oh, well, now those unions are not as effective because there's what? I don't get where the argument is going to go.

So I think it's a stretch. Let me take on that. So I'm with you. It's crazy to me to think that there's a town where, you know, Kroger and Albertson's merging and you wouldn't have to the best in that town, but it would because of consumer problems, but you would create a laboranopsie problem. Like, it's obvious to me that there's more options for workers to go work all throughout retail than consumers concurrency. So I'm with you there. But let me just ask that one point, the union point, right? Yeah.

If I'm working at a Kroger and I have a union job, it's not like I can go and hop over to a foot locker in retail, right? So could you argue, hey, you know, Kroger and Albertsons are the only unionized retail force in town. And by them merging, you go from two unionized labor forces to one unionized labor force. So that is anti-competitive on the union lines. And I understand I'm stretching there. But I do think they're, you know, I thought the DOJ saying, hey,

Stephen King's going to make a little less from his next blockbuster. I was very skeptical of that and they won. So what do you think about that argument on the union side? Well, in some sense they're already one union because they're already mostly represented by the same

union. But you go from two competitors negotiating to one right? Yeah, yeah. So that's a fair point. I hadn't heard that. I hadn't thought about that. Yeah, I'm not aware of any situation in which I think the classification for the job market would be union workers. I think that would be a hard thing to press on antitrust point, but I think it's an interesting

one. I haven't thought of that. Yeah, it makes argument a little bit more interesting. And this is one of the reasons there's a little bit weird disconnect. This is the type of stuff that the antitrust geeks like thinking through and in wanting to work out. But I don't think the FTC is going to bring this case because we're going to bring it on pure monopsony grounds. They might throw that in there because why not? What's the harm in throwing in more complaints? But that's not going to be the bulk of the case. But to your point, it's interesting.

It's plausible. I need to think more about it. I'll grant you that one. It's a clever idea. Hey, you know, that's the advantage of having merger arms come on because, you know, we'll come and the judge will be at a trial and the judge will sneeze halfway through and be like, oh, my God, they sneezed after the defense asked the question. This case is up in flames.

You know, people put their tinfoil hat on for, everything. So, you know, coming up with the most random tale events that could break a merger thing, that's part of what we do. I was a little bit, I was pretty interested in your discussion as JetBlue, Spirit JetBlue, because getting more into the weeds of the actual, like, trial and the back and forth

of the cross-examination and stuff. I should know more about that stuff, but I tend to not follow the case too closely, like, in the courtroom. It's just not the type of thing that interests me as much. I like the summaries and the opinions that are written, kind of the culmination. I like the summaries and opinions, because you could

read them, you can think about them. But it is fun. And especially, you know, when you're betting on, and that's what you're doing when you buy a stock and you think it's going through or not going through. And again, not financial advice. I'm just saying that's what it is. When you're ready, it is fun in the moment. And you have to be thinking about that, right? Like I remember Twitter, Twitter versus Elon, the judge, there were a few things where she said to Elon's team where it was clear the judge was like, and I would talk to lawyers to be like, oh my God, that wasn't like a slap on the wrist. That was her lighting them throwing gasoline and throwing a match. And the stock market wouldn't really respond. And I'd be like, oh, my God, this is

the judge tipping her hand. So you do have to read into those things because judges try to be reserved, but they can tip their hand and you can see all the trials going. So anyway, Brian, this has been absolutely fantastic. I've really enjoyed this. I just want to give you the floor for anything. I think we hit on everything in the paper. Again, I'll include a link in the show notes. People can read it. But anything you think we glossed over, should it harder, kind of skipped over or anything. I mean, I think we should spend another two hours on this. But, but in where we're at, I think we can end it here. There's lots of interesting stuff. We might too fall apart if we get a trial. Yeah, I might not, I could talk about this for another 30 minutes, I think, but if you wanted to six of hours, we'd roll right into IRobot Amazon and we'd start talking about horizontal and too big and that case. But yeah, Brian, look, real good. Great, great conversation. Yeah, it's fun to get a different perspective coming from, you know, the more academic side talking with you. I've really enjoyed this conversation in our other interaction, so really thankful for everyone. I read, I was researching the Kruger's, I saw your paper, and I instantly started sending you curious to,

saying, I love this. I really would love to have you on. So I've really enjoyed this. I really appreciate you coming on. And look, people all include a link again in the show notes. You can find Brian on on Twitter. And looking forward to having you on for a second time, Brian. Absolutely. A quick disclaimer. Nothing on this podcast should be considered an investment advice. Guests 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.