Yet Another Value Podcast - MDC Financial Research's Michael Cohen "halftime" report on the $JBLU / $SAVE merger trial

Episode Date: November 13, 2023

Michael D. Cohen, CEO & Director of Research at MDC Financial Research, LLC, joins the podcast for the first time to share his thoughts on the JetBlue $JBLU / Spirit Airlines $SAVE merger trial that is now underway. Known for their “Event-Driven Legal” investment-research, Michael Cohen and his team follow significant legal disputes and are closely watching the $JBLU / $SAVE case. For more information about MDC Financial Research, please visit: https://mdcfinancial.com/ For more on the SAVE / JBLU trial, see podcast #197 with Lionel Hutz: https://www.yetanothervalueblog.com/p/lionel-hutz-breaks-down-the-jetblue Chapters: [0:00] Introduction + Episode sponsor: Alphasense [1:38] Michael's overview of the $SAVE / $JBLU trial as the trial has commenced [14:47] How $SAVE / $JBLU case compared to Spectrum Brands trial [16:20] Judge for the $SAVE / $JBLU trial [19:52] Divestitures [22:50] Anti-competitive arguments [26:27] Spirit "Hot Docs" (Hot Documents) [29:02] "Flailing Firm" defense [35:28] Spirit stock performance since the trial started [39:41] Head of Network [42:31] Government "Hot Docs" [45:32] Market Definition [49:55] Additional takeaways from $SAVE / $JBLU case - government's focus on $SAVE's business model and testimonies on the fluidity of this industry [51:32] Odds of DOJ winning vs. $JBLU winning [54:26] What makes Michael think that this case isn't a coin flip in $JBLU's favor 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 mean a lot. If you could rate, subscribe, review, wherever you're watching or listening to it, you know, it would mean a lot because I'm on paternity leave, but I just had to bring you guys the content while I'm gone.

I have a great guest. I'm super excited about it. Today I have Michael Cohen. Mike is from NBC event-driven legal. Mike, how's it going? Going good, and it's a pleasure to be here. I watch your podcast, and now for the first time, I'm on it, and I'm thrilled. Well, look, we've been talking for, well, I'll get there.

Let me do a disclaimer first. Disclamers to remind everyone that nothing on this podcast is investing advice. That's always true, particularly true today. We're going to be talking about a legal situation where I know both Mike and I are certainly not lawyers, and it also has become a rapidly somewhat distressed legal situation. So people should just keep in mind, heightened risk, legal situation, not lawyers, not financial advice, not legal advice, all of that. Mike, let me just do a little quick pitch for you.

The reason we're doing this podcast, the reason I'm taking a break from paternity leave is I, a longtime listener's window, I am super involved in the, super interested in the JetBlue Spirit merger. I had Lionel Hutz on about a month ago to go through the overview of the trial, the case, and everything. So people can listen to that for a refresher on the course. But, you know, the reason I'm excited to have you on is this trial, it is not getting live streamed, right? And unless you're at the law firm, there was a little bit of a hollow blue.

If you work from where one of the law firms, you can't get a stream. But if you don't, the only way to get access to this trial is to go park your butt in person and listen to the court case. So, you know, there aren't many people doing that. And you run NBC event driven legal. Like, this is what you do. This is, I'm a happy subscriber. I've been subscribed for over a year at this point. Like, you literally go to trials, listen to them and write them up.

So not only do you have, in this case, unique knowledge that not a lot of people have, this is kind of the core of what you do. Go and listen to trial. So I'm really excited to go through the JetBlue Spirit trial. We're at about day 10, about halfway through. I'm really excited to go through how it's been going so far. Does all of that make sense or anything you want to add there? It all makes sense, except we're only on day eight. So we're not quite halfway through, but it's a little bit before the normal halftime show. I was rounding a little bit. I hear you. And some of the fireworks are you got to come. I think next week is more normal witnesses. And then expert witnesses probably back half of next week. week or starting the week after that. But, you know, I thought it was good to call it roughly a halftime report. So let's just say, stop, right there. Your job has been going to trials and kind of listening to them reporting, reading the room. High level, roughly halftime, what's your read of the room? How do you think the case is going for both sides? You know, I'm sure a lot of, and I get these questions all the time, everybody wants to know who's winning. I really think

it's premature at this point to know who's winning. I think that the economic experts are probably going to be the ones that probably the most important testimony, I think the single most important thing is going to be market definition. And we really don't yet have a full read on, you know, each side is going different extremes, right? The government wants a single route. JetBlue wants the whole United States. Realistically, we're probably going to end up at metro markets or somewhere where there's more of a natural barrier for substitution. But we're really not going to have a read on what the judge is thinking until we get his questions. things when we get into those economic experts. The way the trials tracking will have fact

experts likely done next week for the government, then the economic experts for the government will be probably the follow, or all experts will be the following week. Right before Thanksgiving, the government should rest its case, and then we're into JetBlue's case. We've had a little bit of a difference in the beginning because both sides have been doing direct with some of the witnesses. And it was ironic because we just recently had a clarification of this in that the judge said, I keep my mouth shut when there was an objection. And he objected, he granted the objection of the government. And they thought that that was unfair because they thought they could enter it on direct. And so now it looks like they'll have to call back experts and

not be kind of doing the side-by-side direct that we've been doing. It's interesting that the government never objected to this point before them going beyond the scope. And all of a sudden, it seems like it's going to be a little different trial going forward than we've had. No. So let me, this is actually one of the, this happened during the John Kirby testimony. This is John Kirby is Spirit's head of revenue management. I think we'll talk more about that was the most interesting testimony to me. But let me ask about that part because it was on my list of things, right? As you said, like the way witnesses normally work, and correct me if I'm wrong, you've been to way more of these. I'm not a lawyer. You know, if it's you versus me, I call up my

witness, I get a direct on them, then you get a cross-examination, and then I have a, I believe, a follow-up. And what happens is my direct is the overarching case. Your cross-examination is kind of supposed to rebut what I did, but you're not supposed to introduce new evidence. And then my kind of rebuttal to yours is just like very small clarifications, right? So it narrows, narrows, narrows down. The way it had been going is the government would call a witness, and JetBlue was basically

introducing their case in their cross-examination of the witness. And the judge was allowing it until with John Kirby, the government objected to something. And JetBlue said, the judge sustained it. And JetBlue said, hey, you've been letting us do this the whole time. And the judge, as you said, said, yeah, that's because the government never objected. And I was really interested in that because I was wondering, you know, did the government make a tactical mistake? You know, it kind of threw me back to poker where poker was really popular on TV for a while. And when you were watching and if you knew someone had a great hand and they kind of set the trap for someone and you were watching the other person,

and fall into the trap. I wonder if the judge, who is known as a guy who loves trials, I wonder if he was up there kind of feeling like the government didn't realize they were in a trap. All they had to do was object, and they could stop this, but they were giving JetBlue a huge taxable advantage. Or there's a lot of other reads. I'll pause there. What do you think about that? Okay. Well, the objection was he had worked for Air Tran. And so there was an Air Tran Southwest merger. And they wanted to get into, did the DOJ want to stop that merger? And that's where the objection came in and he sustained it and and they thought that they could go forward because that would be consistent with the kind of thing they'd be doing on direct and the parties

it seemed like JetBlue thought he had an agreement with the government that he can do his direct and then with each witness and the government never objected to it tell that point and going forward it's you know he was on your recall list it's just that you can recall him any time. So it does look like at any point they can recall witnesses should they choose to if they'd feel they didn't get enough in on the direct. And there was no objections beyond the scope. And you're absolutely correct. You're supposed to hand cross rebut and only rebut what was on direct, not go beyond the scope. And then there's a redirect and a recross and it can keep going on, but it gets narrow and narrow until nobody has anything left to say. And then

they're done with that witness. I do look at it as a little bit of a tactical mistake because they could have... Can you just clarify for who? Yeah, for the DOJ, because they could have objected at any point to all the stuff that was beyond the scope and they didn't. So that's all in the record, but now it looks like they can also recall any witness should they feel they need to fill that out. So I can't recall ever seeing a trial where they weren't on the same page like that.

I didn't see an agreement in the docket. The DOJ thought there was a verbal agreement with the government, which there must have been because otherwise it wouldn't have gone that way. But since there's no formal agreement, the government, you know, granted the objection and the high level to the government is that they can object beyond the scope at any point this time. That's interesting. It does seem to me because one of the things I had been surprised by was how much of the JetBlue defense. against the DOJ suit has already been introduced so far. And I guess what you're seeing is, look, they, you know, they could have brought it up in the, when JetBlue started calling witnesses

and started presenting their case. So it's not like it's a huge loss for the government or for the DOJ, but at the same time, they've, you know, they've given the DOJ, they've given JetBlue a lot of extra time for their witnesses, a lot of extra time. And they've already introduced a lot of the JetBlue defense into the record, which I think is very interesting. Now, the time is actually not going to hurt the DOJ because the judge is taking very detailed time and your cross is, you know, your DOJ's time and the direct is, sorry, I got the

back word. The cross is the defendant's time and the direct so far has been the government's time. And at the end of every day, he's been saying how many days and hours each side has. So this is not just, you know, this is the DOJ's case. This is their day. He's keeping it very detailed. So there won't be any punishment to the DOJ there but they have the ability of getting things in early which they already did and then they also now have the ability of getting things on their case which can then only be crossed by the government so one thing i'd like to add is so the effect so far has really been like watching two different cases normally there's a pattern and then you know they're presenting their fact pattern and then the other side cross examines them and then the case switches

and the other side presents their fact pattern and it's crossed and i've really been watching it's like two cases passing in the night and they're completely different cases you know um jet jet blue is you know giving a case it's a very fluid industry things change all the time you know roots can change one day to the next um competition can come in uh you know small startups can fill the u lcccc space that they'll exit. And the DOJ's case is, you know, a single route hurting a single passenger is, you know, you got to stop this. It has been weird reading the summaries because I'm with you. Normally, I'm used to trials. And again, no legal expert here, but I'm used to trials where someone presents and then someone tries to rebut them on the cross and it kind of flows.

And in this case, it'll be like, you know, spirit. Isn't it true that in Des Moines to Baden Rouge, like you guys are super competitive with JetBlue and the guy would be like yes and then JetBlue will come and be like, hey, isn't it true that nationwide like your loyalty program is nothing compared to Delta and it's just going back and forth. Let me see. I want to ask more about Kirby before I do. I think there were two big things that have really every Rb I've talked to, every person has really been talking about. The first one is I believe it's when the JetBlue CEO is talking. The judge interjects and he says something. I think he says like four times. Don't read anything into this. Media members who are listening.

don't read anything into this. No one read anything into this. So, of course, we all instantly read as much as we get into it. But he asked, hey, Jepp Lucio. And it was the Jeppe Lucio. I'm sure you know where I'm going. It was the Jet Lucio. Yeah. I'll double check. I know where you're talking about. I'm not remembering of 100% if it was in the testimony or not. You check and I'll do it for the listeners because I think you know where I'm going. But he says, hey, Jeb Lucio or whoever the witness is, if I listen to this case and I say, hey, you know, the government makes some great points. This merger as is would be anti-competitive.

But I think if JetBlue did X, Y, and Z, I could write into a ruling, could I write into a ruling that, hey, JetBlue, the merger is anti-competitive as is. But if you do X, Y, and Z, it will be pro-competitive or it will not be anti-competitive and the merger can go through. And he asked that question. And so I want to ask you two things on that. A, what was your feel when he asked that? Like he said, don't read anything into it.

Please read into it. And B, you know, I've seen everybody report on the question, but I haven't seen any report on kind of the follow-up to the question. I haven't seen the answer reported. I didn't see how it went over in the courtroom with the witnesses with the team. So I want to ask you those two questions. Okay. So the way it happened is he didn't say just don't read into this once.

He said it like three or four. I think it was four. I think it was four times is what I heard. Yeah. He knew that the room, there's a lot of reporters in the back of the guys. gallery all typing away. And he was afraid of, you know, that being the headline. And the question, though, was if I feel that this doesn't pass muster, can, you know, he was looking for legal precedent, you know, could he essentially say it doesn't pass muster currently,

but if you do this, it would. So what additional remedies, you know, could I just say there's no overlap between any routes. And if you, you know, eliminate all overlap, then I'll bless the merger. That was the takeaway. The reason you hadn't see any answers is he was asking for legal cases, and I do believe it was Mr. Robin Hayes from my memory here. And there was no answer. I didn't hear one from the lawyers, and I didn't hear one from the witness. But he did telegraph that he was thinking, just in case I see some minor issues, do I have the ability of remedying it? And without legal advice and not being a lawyer, I think the answer is yes. If JetBlue, there are bigger investors than me listening to this. If JetBlue's lawyers are

worth their salt in either one of their witnesses they call or in the close, they will point to the many, many precedents of judges ruling, hey, if you do this, this is, uh, this is, this is pro-competitive. So let me ask you two follow-up questions to that. If I remember, you were at the Spectrum Brands trial, weren't you? So Spectrum brands, I didn't attend personally, but with that one, streamed. Yeah, okay, but you guys covered it. You were all over. You know, a lot of people have made the precedence for the Spectrum Brands trial. And one of the things the Spectrum Brands trial I remember very well, because I read it in, I believe, one of your emails, the judge asked, hey, if I think this is very similar. She said, hey, if I think this is

anti-competitive as is, but I want to rule that if you do this, the merger can go through because then it be pro-competitive, could I? And all the parties said, or sorry, not all the parties, but the defendants were really like, yes, absolutely. Like, did that give you this vibe? It, I mean, there's been nothing in the trial other than that question that has given me this vibe. I expected more of that vibe from the trial because I thought it was going to be more focused on divestrators. Yeah. And the government, it's, it's, The divestitures for the way the trials played out has been different than I expected going into it. And I could expand on that a little later.

But per question, that question was definitely spectrum brands like. And that's just one of the many examples. Well, there was a settlement. But it does, I mean, there's many precedents out there, I believe, that showed that he can do that. And now a quick break to remind you that this episode is brought to you exclusively by Alpha Sense, the AI platform behind the world's biggest investment decisions. Alpha Sense 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. I think I asked you before, but to me, this is my theory. I'd be happy to hear otherwise, but the judge is 82 years young, but I believe that this is his first antitrust case, right? And as it's been explained to me, for most judges, unless you're in the D.C. Circuit, you're probably going to get zero or one antitrust cases in your entire career. And I'm wondering if he was honestly wondering, hey, what are my powers in an antitrust case? Because he was unfamiliar with them, despite being a long and story judge with a great track record and a great reputation.

I'm wondering if it was just really interested in that. Do you think there's something to that line of thinking? I absolutely do. I don't personally know whether he's ever had any Truscate case, but per the questioning and a question like that, it does seem like he's very unfamiliar with it. But there's something this judge is very familiar with is he runs a tighter shift than just about any judge I've ever seen. He, you know, the start time, the stop time, he stops at 1 p.m.

He doesn't go, you know, to 5 and 5.30 like other judges. One of the reasons we're having a 20-day trial, they're really like 20-half days. It's really like a 10-day trial. he he's a very entertaining judge to watch the gallery loves him he's very humorous at times the way he asked his questions is entertaining um let me just throw us out something anecdotal that'll give you a little bit of his personality is right before uh i flew back for the weekend here um he went on for maybe about ten minutes about Veterans Day. You know, and he said,

Oh, I was going to ask about this. Yeah. He said, Reagan was right. Every generation has to fight to defend their freedom. And, you know, think about that this Veterans Day. And, you know, think about who's defending our freedom in this generation, you know, and all the ones passed. And you don't get that from every judge. And, you know, he was, I believe, put on the bench by Reagan. That is correct. And, you know, he basically, he's a pure Reagan Republican. But that being said, I wouldn't go and, you know, read into it that he's a pure free marketer. What he is is he's a judge.

He is very into case law. He's not into being an activist. He, you know, he's not going to be taking his personal thing in there. When he said, I learned to keep my mouth shut with regard to the objection. The objection. he said, you know, unless it's gross incompetence or sexual harassment, I love that long. Sexually improper. I learned to keep my mouth shut. So, but, but, you know, it's on, per the rule, it's on your recall list, you can recall them. I'm not going to let you go beyond the scope now.

He's very much into how a courtroom should be run. I'm very glad you mentioned, because all of my background in him said the exact same thing. And I do know that there were several, several of my our friends were ready to shoot fireworks into the sky when, you know, he quoted Ronald Reagan on the way out to Veterans Day. They're like, look, what more do you want when you're going against the EOJ? But I'm with you. I think everything I've heard and seen has said he runs a fair trial. Let me ask you about, did you want to say anything there or I wanted to ask about divests? More than running a free trial, I think he really tries to prevent personal biases affecting his decisions. I think he really tries to be an objective judge without bringing in his personal politics. Let me ask about divestures here because one interesting tidpit that I think has been a little underreported was I believe it was when they were examining the JetBlue Robin Hayes, the Jet Lucio again, but I can't remember for sure. You know, I was surprised because the JetBluecio got up there and said, hey, you know, we thought we'd enter this merger agreement and we'd ask the government would ask us about divestures and we'd have a negotiation and back and forth. That never happened. We basically had to create our divesture package based on what we thought would get this over the competitive, the finish line, what we thought would maintain competition. And I thought that was interesting on a whole host reasons.

Like it shows the DOJ not even engaging in discussions shows a lot about their intent. You know, they obviously they think this is hugely anti-competitive, but we are going to talk about their two market definitions and their theories of the case so far. But again, it reminds me of a little bit of spectrum brands and it reminds it goes back to the question the judge asked where he says, hey, if I want you guys to divest something or I want you to do something, can I order you do that? And Robin Hayes says, yes, until it's a material adverse event for the combined companies, you could order anything and we'd have to do it. I thought that was very interesting and I thought it kind of played into each other if that makes sense. I'm recalling the specific testimony now. There clearly was testimony where they expected the divest, well, back up a little bit, Spirits board required JetBlue to be proactive.

Yep. Part of the conditions. And they did it all the way up to a MAC clause of the combined companies. Combined companies, yep. I've never seen something that broad where it's not just a Mac of, you know, spirit, but it's up to a Mac of the combined company. And they really made a jet blue jump through every regulatory hoop possible. So appearance was all the divestitures was completely proactive. It wasn't within discussions with the government. So, and I think the judge was a little

surprised by this, too, just my own personal opinion in terms of the way his facial expressions and things were on this. And I was surprised. I would have expected. that there would have been a little bit more negotiation, and that came across that there was no negotiation, that they proactively looked at the case, thought what could be a problem, proactively did thy divestitures, and they never seemed to have any discussion or any feedback or what else would you like or any of that from the government. And I think it was a little shocking. And, you know, if we go back to the judge's question of if it doesn't pass muster, you know, what additional things. So far, he's getting no

no input from the government of what more they would like. The case from the government really seems to be if it hurts, you know, one person from having this business model impaired, the ULCC, that we just want to stop this merger. And there's nothing that could satisfy us. There's no additional remedies. You're taking out the largest ULCC competitor, and that's just wrong. And that's the government's case. Let me ask the question.

That is so great because the government has two theories. And this is, I've always been dancing around, but as you said that and as I've been thinking about it, it kind of, the government's two cases are, number one, if this is anti-competitive on one route, right? If JetBlue and Spirit have a monopoly flying from Baton Rouge to Des Moines, Iowa, doesn't matter that all across the country, everything's fine. If it's anti-competitive on one route, we can block it under the Clayton Act. That's number one.

And the second theory, which I think is very novel and very interesting, and it would speak to why the government did not want to take any investor talks here is Spirit is the largest ULCC in the country. JetBlue wants to buy them and change them from a ULCC model, right? That is anti-competitive, right? That is the argument. And that is an interesting argument to me because under that scenario, if you and I could, you know, Spirit stock is down 10% every day forever.

At this point, if you can, I could put together 100 or 200 bucks an offer to buy Spirit, even though you and I have 0% market share in the airline industry, under the government's case, it would be anti-competitive if we bought Spirit and you and I turned it into our own personal private jet fleet, right? Like that would be anti-competitive, even though it didn't change any of the market stats, that would be anti-competitive. And obviously, that is a new and novel definition that I feel like the government is testing out, floating, really trying into this trial. So do you agree with me? Am I reading so much into it? Am I thinking about it correctly?

I completely agree with you. I can't think of another antitrust case where we've seen a voluntary business model. that you know spirit could change tomorrow if it just says my our model isn't viable anymore and we want to be the jet blue and compete with jet blue they could do that tomorrow and that there's nothing any competitive about that and yet if jet blue wants to take them out and do that uh you know the government wants to step up here it would be probably very imperialistic of antitrust law if if it starts going there um i expected to come into here and see a little bit more of, you know, market definitions based on, you know,

concentration. But this is the sixth and seventh largest airline merging. And there's any examples of far more concentrated airlines merging. This is really about the ULCC business model. And if they get their market definition of a single route, you know, there is a single route out there that is going to be anti-competitive to a certain type of customer. If you're the kind of customer that's going to be doing all the add-ons with spirit and get up to a JetBlue-like fair, you know, that might not affect you. But if you're the true spirit customer, which only 33% of their customers are, was a testimony that went on the straight bottom fair.

I would think that there is a route out there that that customer would be harmed on. And if they have the definition they want, JetBlue, would be in trouble. And so that's why I really think we got to wait till we see where the market definition is going. And my best guess at this point, just from my own common sense, I kind of think you can't go to a route, but you could go to a metro level. I think that's about as small as you could get. I completely agree you could go to a metro level, right? And this comes back to the Northeast Alliance. I mean, that was more at the Northeast. But look, if you were going to have a completely anti-competitive effect at LaGuardia, and there are no more Slots

about LaGuardia, that's obviously a huge antitrust issue. But to me, me, I mean, I think they're divesting all, I think the divestors they reached on their own kind of solve all of the metro level pairs. Let me, let me ask a few more questions. A big part of this case has been hot docks, right? There are hot docks on both sides. I think most famously when Spirit, you know, the way this case came about was Spirit was trying to merge with Frontier, JetBlue came in over the top. That's why this merger contract is so tight because they were an interlober, they broke it. And when Spirit was trying to merge with Frontier and JetBlue was coming and over the top, Spirit put out a whole bunch of presentations, press releases everything that

said JetBlue plus Spirit is anti-competitive. And the government, they have a ton of hot docs and they have presented in court. JetBlue, they called Spirit's chairman up there to talk about it. They tried to explain away why these hot docs weren't quite as hot as you would think they were. So let's talk about the spirit, the kind of spirit level hot docs. How do you think those went over in court? How do you think the government pressed them? How do you think JetBlue did a good job of kind of cooling those hot docks off a little bit. The first several witnesses were all about hot dogs. The first several days of this trial was all about hot dogs.

It was a seesaw between the direct and cross. The direct is bringing in the hot dogs, them saying yes, yes, yes. And if you would go back several two years ago, they did a very good job of making those hot docks look like, you know, the way they felt. And then on cross, it was always, well, that's how I believe then. And they all had the explanations of why they believe differently now. You know, some of it was the difference of the Northeast alliance of disappearing.

Yep. It was the, you know, the engine issue on the airplanes with Pratt and Whitney and how we can't expand anymore. A big part of the defense case is how impaired spirit is at this you basically have we were the most successful we were growing handover fast until you know 2019 then we had the pandemic and then post-pandemic instead of emerging we've had you know the pilot issues and then the engine issues and with the engine issues specifically this is an airline where things aren't getting better post-pandemic this is an airline where we're not going to hit the apex of the engine issue until 2025 so spirit presented is we were a successful airline, we are not profitable now, and things are going to be getting

worse, and the future is completely uncertain. And that's the way the defense is presenting this case. And the DOJ is trying to make it look like everything's going to be 2019 forever. So this is, there is a failing firm defense, which is if you don't allow us to make this merger, the other companies going away anyway, right? They're going to liquidate. They're done. This is more of flailing firm defense is what I call it, where, you know, Spirit, it's not like the aircraft go anywhere, but Spirit is saying, hey, our business model is broken. As you said, if this merger doesn't go through, we might have to become JetBlue. We might have to sell off airplanes and become smaller. Like, there's a lot of things, but this business model is broken, both because of post-COVID changes, rising fuel prices, and the GTX, the GTF issues are really hitting them as well.

How do you think the flailing firm defense, as I call it, has been going over with the judge? I think it's very believable. I would say two things that I could, you know, strongly feel at this point is I, and a lot of this came from the, I guess it was the chief commercial officer for a vello. Here he doesn't, you know, have a skin in the game on either side. It came across a very good testimony, unbiased. Just to clarify, vello is, if I remember correctly, they're like the fourth or fifth largest ULCC. So this is a much smaller airline. Am I remember that correctly?

They're the less than 1% of the market and they're the world's newest ULCC. Yes. Okay, perfect. Chris started, and in two years, they have 16 planes. They're expanding crazy. And he had a great confidence of his ability, his company's ability to expand in the ULCC space. It was started by, I think, the ex-CFO of United. I think that's right.

Really good management. They started out of Birmingham, California. That and then all the other testimony really shows a very dynamic industry, where roots can change one week to the next. the government's cases nobody can do what spirit can do because spirit is so successful in it and they're trying to make it look like there's all these barriers that nobody can fill the void should spirit be taken out i don't think that's what the evidence is showing i think the evidence is showing that these are it's a very competitive industry all these baby startup uLCCs are all looking for opportunity if they could be the new spirit by filling the spirit model

I'm not seeing the barriers to do that. And I think that was a big part of the government's case. And I don't think that's going well for the government right now. There was, so again, I believe this was John Kirby, the Spirit Revenue Management offer. But you could see Spirit stock has dropped like 5% or 10% every day over the past two weeks. And I'll ask you about that in a second. But there was a noticeable drop when the revenue manager said, hey, we're forecasting. I think it's something like 12 planes are going to be out of service at the beginning of 2020.

45 planes out of service at the end of 2024 and up to 72 planes out of service at the peak in 2025, I believe, is what he said. Something along those lines, you don't have to get the numbers exact. But this is because of the Pratt and Whitney GTF issues. Stock dropped like crazy on that because that is, Spirit has just over 200 planes. How many 75 out of service at the same time is a huge number with incredible air?

I want to ask, was this reported correctly? Because I had some people push back and they were like, look, I think Spirit's going to have like, I think Spirit has about 80 engines that are. affected by the GTF issues, for them to have 75 out of service at the same time basically implies all of them are going out of service and never coming back in. And I think like the repairs can take up to 300 days so it didn't make sense to a lot of people. Was that reported correctly? Or do you think that 75 was a cumulative number? So a little bit of correction is Kirby's title

is he's vice president and network planning for spirit. That's great. I'm sorry about that. It's the JetBlue guy who's the chief revenue officer. And he's all focused on, you know, the network. And a big part of his testimony was we compete with our network, which goes to JetBlue's testimony as we want the merger because we can better compete against the legacies with this new expanded network. I didn't remember the numbers. So he basically said we have 12 on the ground now. Yep. We're going to have 20 by the end of this year. It was his, and the forward was his estimates.

And I also heard a lot of people give pushback on these numbers have to be inflated. And, you know, they're just his estimates. And he definitely has an interest in inflating them. So whether his testimony in reality will jive, I'm not sure. But his testimony was 20 by year end. And then the other witnesses were saying it would kind of peak at 40. And it looked like it'd be like 40 by the end of 20, 2024. Yep.

He was at 45 by the end of 2024. And then he said an apex in 2025 of 72 aircraft. so it looks like and his testimony is it just keeps getting worse and worse and he was the one who's most in communication with pratt and whitney so he of all the witnesses he seems to be the guy who would know um and it came across this late breaking um news that uh you know this issue is getting worse and worse and it's going to keep getting worse and worse and we have no idea how bad it is going to be but the current appearance is it's going to hit an apex of 72 in 2020 And for JetBlue, a big part of the reason they want the merger, as, you know, testified by them is it's a bulk aircraft purchase. Largely because of the engine issue, taking delivery of nuclear aircraft is constrained. And they said, we can't get them from Airbus until 2029, 2030. Yep.

You know, and we want to grow. and the best way to expand their network fast is doing this merger. And all the testimony made me believe that JetBlue is genuinely really, really wanting this merger. I'm hearing a lot of investors thinking, are they looking for a way out? Are they intentionally throwing the game? You know, when I see the CEO of the company out there being a real pitchman, I mean, he was a sales. He came across very salesy. on the stand, as most CEOs do.

And he was a good witness. They really want this merger. I'm believing they want this merger. I'm with the MAC clause of being of the combined company, I don't think they could get out if they wanted to. And I really don't think they want to. And I don't think they want to renegotiate. I think they just want to get this past regulatory hurdles.

I will look. People go look. The trial started October 30th, I believe. The spirit stock has dropped 5% to 10% basically every day since the trial started, in large part because the Q3 earnings they reported were a disaster. The GTF issues are huge. And every day I get people saying, hey, is the GTF issues? Is it a Mac?

Is JetBlue going to try to recut? I mean, I'm sure the answer is yes. JetBlue would love to recut if they could, right? You're overpaying for something. Everybody would love to recut. But this is a very tight merger contract. everything I have seen in the trial suggests to me that no Mac

they're going to go through it if they win and they're trying their darndest to win I don't know if you want to add anything there but that's that's my gut you know obviously things could change I'm sure we're taping this on Saturday November what's the day November 11th I'm sure Monday November 13th

they're going to come out and say Mac and we're breaking just to the gods spiting me but that's my read of it I don't know how you feel yeah so happy Veterans Day because it is November 11 and it started it on October 31st on Halloween. There was a, like, a pretrial conference the afternoon on the 30th, but the real trial and the opening statements was Halloween.

It, I definitely feel that, you know, JetBlue clearly wants this deal to go through. They're trying their hardest. They feel very confident, you know, break, I mean, the CEO on the stand, the people they're bringing, they believe they can get this past regulatory hurdles. The market does not. I mean, when we look at the spread, it's a complete disconnect. It's almost as if there's, the stock's trading as if there's not a merger agreement in play at all.

Well, I think Speard stock would be around three or four if there was no merger agreement. So there is some merger agreement. But look, this, the stock is at nine. If this deal goes through, you'll get about $30 per share. So, you know, your talk, even if you assume Spirit was an instant. zero the moment the steel breaks, which it's not. It's not an instant zero. There's at least equity optionality value there. You're talking about a 27% if I'm doing that math in my head chance of this deal going through. And that's assuming pretty draconian stuff. It doesn't seem like

any of that to me, but that's where the market is. I think there's, you know, a lot of people are thinking, hey, maybe there's a recut. I don't see a path for a recut, but that would impact the math. But yeah, you're right. Let me ask a few more questions. No, go ahead. Any comments you have there. Back on that. I absolutely agree. I'm seeing in the court more of a 50-50 and I'm seeing the market pricing in a less of that and I think your calculation of the odds is probably pretty accurate about the market's thinking you know maybe 25 27 percent probability going through and it it seems to me that because it's factoring in so little probability of it happening what we're seeing moving the stock is not what's going on on

courtroom because quite frankly we haven't seen that much really dramatic testimony that should move the stock yet from the courtroom. What we're seeing is it's trading on fundamentals. I mean, if it was really praised on the merger, the near-term revenue doesn't matter. The plane issue, it doesn't matter. We saw it go down really hard following Kirby's testimony. It went down really hard because I agree with you. It's a little bit the fundamentals, but Kirby's testimony, that 70 number was so big. I think people started to price in. At some point, when does this start creeping closer and closer to spirit itself has suffered an MAE versus kind of industry. I don't think we're close to that, to be honest, but obviously the results have been so bad.

The bird numbers they're talking about have been so bad and the planes ground have been so great. I do think people are starting to talk about, hey, when does JetBlue just have to claim an MAE? Again, I think this is scared ARBs. I just not seen it, but I think that's what's happening. And I disagree slightly. I think that more we're seeing the stock trading on fundamentals. and less on, you know, the percentage of ARB situation.

You know what? Actually, you and I are both right because if the stock's trading on fundamentals, the fundamentals are indicating closing in on an MAA. So I say that a little facetiously. Don't put that into the record, JetBlue on a Mac, but yeah. Let me ask, so we talked about this. Actually, before we go to this hot talks, I do want to ask one more thing about the head of network.

The head of network indicated, they asked about, hey, you know, you had this initial 2027 plan. you were going to go to all these new airports. And he said, based on the GTF issues, those are out the window. We're probably not, I think he basically said, we're not going to enter any new airports. That's fine, whatever. I don't think that has bearing for the flailing firm defense, but I don't think that has huge bearing for the trial because it's not anti-competitive you buy them and preclude them

for the future probably. The interesting thing to me was they talked to, he talked about, hey, we're exiting the Denver airport. And he talked about a few other airports that they're exiting. And I thought that was interesting because one of JetBlue's defense is, hey, the government can point to, I think it was 60 routes that they say are anti-competitive, right? The old Baton Rouge, Des Moines route where only JetBlue and Spirit fly. And what of JetBlue's defenses to that was, and I'm using rough numbers, it was like,

hey, in 19 of those routes, one of us or the other have already left those routes, right? The airline industry is very fluid. Routes are changing all the time. Airplanes famously move. They can fly different routes pretty quickly. And I thought it was interesting when he said, hey, we're pulling back for markets because doesn't that kind of speak to a fluid industry? Did you read anything he said?

Did you think the government, did you think Jeff Blue scored any points there? Did the judge pick up on that at all? So with regard to Kirby's testimony, everybody's testimony has been a fluid industry. He was just additive. But I think what was probably more important with Kirby's testimony is here's the guy who's got the network plan. He's the one who did the five-year plan. He introduced five-year plans to the company. And he has, you know, the five-year plan that we're currently in and the next one.

and his testimony even on direct is he said that that's what we believed in may of this year when the board approved it and with the engine issue since then and how it's been it and that's almost how he introduced the engine issue as going up to 72 planes um i no longer believe that so here he's got his own five-year plan May is not that long ago and just since May I no longer believe that you know that that plan is viable and then the future plan beyond that

is a complete redo and and he he was very very believable witness he was but for the one comment that he interjected of you know no longer believing

it since May he was a really good witness for the DOJ until the cross. And in the cross, he became an amazingly good witness for the defendants. But the overall appearance is he was not trying to, you know, spin or be biased. He came across credible. The, let me go back to hot docks. So we already talked about the hot docs on the spirit side, but there are hot docs on the

government side, right? The government, and people can go listen to the Lionel Hutz podcast, but the government sued JetBlue had an alliance, the Northeast Alliance, the government sued, and ultimately won. And a big piece of the government case, and there were lots of pieces. This was not the only pieces. But, you know, like page three of the case talks about the JetBlue effect has saved Americans billions of dollars since JetBlue. When JetBlue enters markets, they are the ones who really lower prices. They're the only ones who compete with the legacy carriers, all this. They were really hammering home the JetBlue effect in the Northeast Alliance. And now

they're suing JetBlue for trying to get bigger. And one of JetBlue's defense has been like, government, we're doing exactly what you guys wanted us to do in the Northeast. We're getting bigger. We're bringing the jet blue effect to millions more of Americans. So we talked about the spirit hot talks. I want to ask about those government-sided hot talks. Have those been scoring any points so far?

They've been less in number, but they've been very impactful. And, you know, we actually had PowerPoint presentations by the government, you know, highlighting the jet blue effect. from the Northeast Alliance case. And then that's, you know, being presented and the witnesses are being questioned on it. The best evidence of the power of the general effect has actually been from the government.

Yeah, I just, that was one of the reasons, you know, that's one of the things I've really liked with this. Northeast Alliance, I wanted to mention that. At one point, I can't remember whose testimony it was, but the Northeast Alliance came up and the judge interjected and he said, I read that decision. And that was interesting to me because I that decision as well. I'm not surprised. This is a thorough judge. It's a well-respected judge.

I'm not surprised he would go read the most recent precedent in the airline industry for mergers that happened in the district that he is in. Not surprised at all. But, you know, if you read that opinion, a lot of it, multiple times the judge says JetBlue presented in a expert witness who was not credible. A direct quote was they're not credible or what they're presenting does not pass. I think it was the rational test or the smell test logic test or something like that. So when he said that, I don't think he gave anything off. But, you know, if I was sitting in the defendant's chair and the judge said, yeah, I read that case and that case had a lot of things talking about how I'm not credible and it went against me, I would be sweating a little bit.

Did you read anything into that? Well, first off, I have not, I'm embarrassed to say. I haven't read the decision yet. It's on my reading. But the judge clearly came in, you know, indicated that he read it. there wasn't a lot of read from it because it was really just a one-off comment. So it's up to, you know, the, we know that everything that's in the decision is something that's, you know, for him, top of mind. I don't think there's really a read-through into it beyond that. Perfect, perfect.

Let's see. I'm just looking at my questions. We've hit most of my questions. Last thing, a big argument here is going to be market definition, as we've mentioned. Do you define the market as every city pair, right? Des Moines to Baden Rouge, New York to Fort Lauderdale. Do you define it every city pair? Do you define it the metro area?

Do you define it nationally? Do you define it nationally? JetBlue clearly wins, right? JetBlue plus Spirit would have middling market share compared to the Big Four. If you define it Metro with the divestures, JetBlue and Spirit probably win. If you define it city pair, maybe you could divest a way. maybe you believe the fluid defense, but the government's got a real shot there. Do you have any indication for, obviously, it's early, there's a lot to go.

Based on your read of the thing so far, what do you think is the most likely market definition here? Or it's probably too early, but just tell me which way you would be leaning. Without seeing the experts coming in with theirs, my thinking just from a common sense of me as a traveler, I kind of think metro level. I live in, I'm 30 miles east of Sacramento. Sacramento is my main airport, but if the prices are too high in Sacramento, I will try, I'll go to the Bay Area. So all those airports in the Bay are in my substitution range. I won't drive to L.A. to fly to Boston, but I will drive to San Francisco. Yep.

So I think if it goes by, you know, where the substituteability round is, you know, people in Philadelphia will fly out of Wilmington. People out of Fort Lauderdale will go to Miami. the metro area makes a little sense. I think that specific root pairs to me make no sense because how dynamic they are and that it's to be just not the right definition of the market with consumer behavior. If we get to the metro level, I do think we'd have to still probably have a little bit more divestiture still. What do you think needs to be divested? I don't have that off the top of my head, but they're clearly were some metro markets that seem to potentially be an issue beyond that they divested in the most egregious ones already. But I could see a kind

of order, you know, wanting a couple adjustments in different metro areas if that became the market definition. I wonder if the judge would order a couple of plain divestures as well, just because I do remember there was some discussion of the judge. I believe one, one of his questions was, hey, doesn't matter if you give these slots away. You know, they're, again, JetBlue selling spirit slots in LaGuardia to another airline so that they can land in LaGuardia and compete. And he asked, hey, does it matter if they, if you give these away, if they don't have the planes to fly them or, you know, if they have to pull planes from other markets.

So yes, it creates competition in LaGuardia, but it might take competition away from somewhere else. And again, my argument would be, I think this is a very fluid market. I think aside from a few very constricted airports, which are few and far between, I think This is probably pro-competitive, but I do wonder if the judge has, hey, okay, divest the market you've agreed to. Maybe Mike's right. Maybe one or two more airports. Maybe Austin. Maybe a few others got mentioned. Maybe you need to divest some slots there. And maybe toss in five planes to Allegiant and three planes to Sun County while you're at it, which again, it has to be a, he can order

a investor up to a Mac for the combined company. And Jeff Lewis ticket. I wonder if divesting planes is kind of on the radar there. I don't think that would be in the remedy. There was clearly a question of that, you know, can they expand realistically if they don't have planes and pilots? The pilot issue seems to be abating. The plane issue seems to be increasing. But if we go back to the commercial officer of Avello, here's somebody who's rapidly wanting to expand. They're no problem with getting planes because they're going after older aircrafts. They're out there. And there's leases that are out there. The only thing that's impaired is if you want brand new, you know, A320s from Airbus. That's what's impaired. And there's many ways to serve an air,

you know, in the ULCM model, there's many ways to serve it beyond that. And here the newest startup is not going after new aircraft directly from Airbus. I don't think you'd need to divest aircraft. Okay. No, that's great. I was spitballing. I could see it, but again, I was mainly just spitballing. But last, anything else, I've got two last questions I want to wrap up with, But anything else that you're picking up on, you think I should have been asking that they kind of caused the hairs on the back of your neck to stand up? To me, the main, you know, is kind of surprising takeaways is how focused the government is on a business model that essentially is a choice. And that their case is really, they think nobody can do the ULCC business model like spirit. and they think if you take out spirit, that nobody's going to fill this business model.

My other takeaway is the testimony has been very strong on the fluidity of this industry. I think that the barriers to filling the void, and Judge Young asked the question, wouldn't they just fill the void created by, you know, the vacuum spirit? And the evidence seems to be, yes, I see a dynamic industry. I don't see that only Spirit can do this. Spirit has some unique things. They have the lowest cost in the industry, and they've done that. Well, they're also losing a billion dollars a year,

when you're willing to lose a billion dollars a year. I say that facetiously because they were profitable for COVID, but yeah. But the reason the other ULCCs have had a different model is they're trying to avoid head-to-head competition in the markets. If they go into it, they're going to adopt the same kind of stance that Spirit did. There's no, there's no barriers to anybody reinventing the spirit method. And they would be the ones with the spirit effect. So this actually blends like nicely to my last question.

I know I'm putting you on the spot, but if I, if I ask you, hey, we're halfway in. Your service is providing emails to investors. And again, I can't recommend it highly enough. You can include this in a quote if you want. It's some of the best research dollars that we spend, you know, just on the podcast. Laquidia and Burford have been two things on better. I've presented on the podcast, and you guys have been all over those two. There's a lot of other ones. You can use that a quote. Anybody, I'll have you give your contact information

then. But what you do is you provide investors insights into what's going on the trial. If I ask you right now, as we sit here, almost halfway through the trial, what do you think the odds are of DOJ winning, JetBlue winning? What would you assign? I would be a coin flip. And throughout the trial, I've been leaning this way, then I've been leaning that way. And I've literally been seesawing back and forth. I think it's too early to call. And I, if I, my best subjective odds at this point is about a 50-50. And when I'm looking at the price, it's not a 50-50, right? The market is thinking it's more like a 25%.

So let me push you on two points there. First, first, it's too early to call 50-50. Is that good for JetBlue? Because again, the way this trial works is the government presents their case first. And then, you know, after I think it's 14 days, JetBlue will go present their case. we're in the government's presentation of the case. If you're saying it's 50-50 while the government's presenting their case, isn't JetBlue going to come up there?

And obviously, we've got expert witnesses. We've got a lot to go. But isn't JetBlue going to come up there and present their case? And they'll be, oh, my God. Like, you know, the government could only break even when they were presenting. JetBlue presented and it's over. Like, is that a fair comparison? Are you kind of building that into your odds?

Well, I'm building that into my odds. And as we mentioned before, we have seen a lot of the direct case. Yes, yes, yes. Blue with the previous witnesses. it was just in their cross-examination that was beyond the scope. I got a pretty good feel at this point of what JetBlue's direct is going to be. I'm not expecting a bunch of surprises when I finally see their case and their testimony. I think that the trouble in handicapping it now is we haven't seen the experts.

And I think that the judge is really going to have to rely on you know, what remedies he can do, what remedies he need to do, you know, where the market definition should be, there's a fair, you know, we're only eight days in of 20. There's a lot still to come. And now a quick break to remind you that this episode is brought to you exclusively by Alpha Sense, the AI platform behind the world's biggest investment decisions. Alpha Sense 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. So let me ask my closing case. I don't disagree with anything you just said, right? We've got a lot more to come. The expert witnesses are probably going to be the key. But one of the things you said in the answer previous was, hey, I think that it's been pretty well established that this is a fluid industry, right?

You mentioned the judge asking, why does it the void get filled? And I think once you start saying fluid industry, and we can divest at the metro level to make sure that all these these anti-competitive gates get divested, right? That to me screams, hey, nationwide market share

is going to be below the big, way below each of the big four. We're divesting the competitive gates and we've got a fluid industry. You've got a novel DOJ case against a ULCC business model. All of that to me says JetBlue should be favored, right? So what am I, when I throw all of that out at you, And again, you do this all the time.

What are you seeing that I didn't lay out there that makes you think this is a coin flip, not favored for JetBlue? It came out more in the opening statements. And the opening statements is, you know, the market definition is a route. There is a customer out there. And there's been no testimony to date that refutes that there is a customer that will be hurt by this. And I would go as far to say that's been an admission by JetBlue. there is a customer that will be hurt by this. It's just not many people, and it's not in many markets.

And so if Section 7 of the Clayton Act is looking at a totality, you know, then that's good for JetBlue. If it's significant enough that the definition is a significant area or significance of a, you know, competitive area comes down to a route and a specific customer, there's a customer that seems to be harmed. I'd like to add to that. JetBlue's testimony is we did these divesters, is proactive. That wasn't even based on input.

We're totally willing to do more. Tell us what to do. We'll do anything. We want to be cooperative. We did all that proactive. They're making a good situation where if there's something that can be remedied, it will be remedied.

if the judge believes that there's a customer that's going to be harmed for me the testimony is that customer is only going to be reasonably harmed for about a two-year period because there will be somebody coming in that then offers that service back to him if that service you know would ultimately be profitable so should that be enough harm that he's only temporarily harm I'm just laughing because, again, the scope of the merger agreement says JetBlue has to divest or do anything up to an M.A. for the combined firms. And you said, hey, there is probably a consumer harmed. It's just there aren't a lot of them and they're in very small markets. And I'm imagining some of the most creative remedies could be the judge saying, look, JetBlue, this is good. But you guys need to fly. I'll use my Des Moines to Baden Rouge example. You guys need to offer private jet service from Des Moines to Baton Rouge every Tuesday and Thursday so that these specific and aren't harmed. Like, you could imagine. Obviously, that's crazy. I'm laughing, but that is a very

creative remedy that would be well within the scope that could solve this. The other thing I was laughing at is used the term significantly. And I had a very smart friend who I'm sure is going to listen to this. And one of the questions he logged in that I had on here that I wasn't going to is, hey, look, the DOJ has the burden of proof. They need to win on market. They certainly need to win on market, probably because I just don't think the foreclosing on ULCC business model is going to fly. I could be wrong. It's just a bridge too far. It would really open up a lot of Pandora's box for antitrust going forward that might get overturned on appeal. We could talk about appeal. I don't think we need to. But one of our friends said, hey, even if the DOJ merges, the burden is on them and they

need to prove that competition is significantly harmed, right? I believe that Clayneck specifically says significantly. And it's just hard to see how you get to significantly here and use that term too. Do you think you can get to that significantly bridge, or am I kind of reading too much into that? Is that a fast and loose interpretation? I think you're right. right, that the word is significant. And I think that comes down to the market definition. Because if you're that one consumer, it's significant. And that is what's going to be defined by the court in terms of it's really based on the market, whether you get to the level of significance.

If you're at a national market, that individual consumer versus all the other ones that wouldn't be a benefit, it's insignificant. If it's down to a specific route, that's 33% of the people flying spirit. That would be significant. Well, Mike, you have been too generous with your time. I'll give you a quote. Everyone, if you are an institutional investor doing event-driven, doing, I mean, a lot of it does fall into the patent stuff, but the patent stuff can be very interesting. You know, liquidity is one.

Again, I believe I did a podcast with Lionel Hutz on that one as well. I can't remember for sure, but that's when you guys have been all over. Burford, Argentina, YPF. You guys have been great unearthing that. If you're interested in Spear-Jip-Lew, having a man in the courthouse, how can people reach you, Mike, if they're interested in that? Well, you can go to our website, which is MDCfinancial.com, and you can also email me directly. It's Mike at MDC Financial.com.

And our service is typically for institutional people. We're not looking specifically for retail clients. We actually believe what we do, which is event-driven legal, and we call it the event-driven legal service, it's probably really not suitable for typical retail investors. The best way to, there's a lot of catalysts that happened from legal. I've been doing this. We started the event driven legal service in February of 2009. There's a lot of catalysts that come from legal events.

But what you want to be is you want to be the smart money. You want to be the smartest, you know, person on every situation. And that, you know, entails reading the documents, attending the court, known exactly what's going on in the space. So Tara, you guys are great on the Sotera trial now that they're, you know what? What I love is I think I subscribe, again, this is something, we really cut back on a lot of our research services. This is some of the best money we did. when you and I were first talking, I remember because I was walking my dog and I was like,

hey, I don't know, a institute, I'm trying to cut back into the institution. You're like, look, we charge and I'm not going to say rates or anything, but we charge, but it is cancelable like on the day, right? You tell us, we're not providing the value. Like every day we're trying to provide the value. We're not providing the value. Boom, there are no strings attached, nothing. Do it.

Again, I think everybody who's listening to this is probably interested in Spirit Jeff Liu. If you're an institutional investor and listening to it, you probably do need to be hitting my cup and getting the daily recaps. but they've been great. Mike, this has been great. Maybe we'll do a follow-up kind of once the trial settled to follow-up on this, but this has been great. Thanks again for coming on. We'll include a link to how to contact Mike in the show notes, if anybody has any questions or wants to follow up there, and we'll go over there. Mike, have a good Veterans Day. Thank you very much, and we appreciate all the kind words. 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.