How to Invest When Nothing Makes Sense

Subscribe to the Prof G Markets Youtube Channel Scott Galloway and Ed Elson break down the biggest unanswered questions in the stock market, from Iran and AI to risks in private credit, and what they mean for investors. They then dive into the SpaceX IPO, with Scott offering his prediction for where the stock could land by year-end. Finally, they unpack what went wrong at Nike and Allbirds, and what Nike needs to do to turn its business around. Subscribe to the Prof G Markets newsletter Order "Notes on Being a Man," out now Note: We may earn revenue from some of the links we provide. Follow the podcast across socials @profgmarkets Follow Scott on Instagram Follow Ed on Instagram, X and Substack Send us your questions or comments by emailing [email protected] Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Speaker 00

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• 1:29Scott Galloway?

  Today's number 12. That's how many tons of Kit Kats someone stole from a truck in Europe last week. That's more than 400,000 candy bars. Ed, I actually identify as chocolate. My pronouns are her and she.

• 1:55Scott Galloway?

  Took a while, right? Actually, Ed, maybe you'll get this one a little faster, although who knows with that Princeton degree in classics I'm at at. Anyway, no, no, sorry. One joke, one joke. Come on. Why do we always have to do three jokes? What does the crowd want? The crowd wants more dog, more dog humor. So I'm at therapy with my partner and my partner starts bitching that I can't even answer the most simple questions. And the therapist looks at me and says, what does she mean? And I said, that's a feminine pronoun.

• 2:27Scott Galloway?

  Think about it. It's coming. There it is. Now he gets it.

• 2:30Ed Elson?

  Got it. Got it. Pretty quickly.

• 2:31Scott Galloway?

  Almost up to Cal State Northridge level IQ from Princeton. CSUN. I feel bad now. That's an insult to CSUN. CSUN is an amazing university. The Cal State system, Ed, is really the crown jewel of California. I used to think it was the University of California. Now it's really the Cal State system. I've gone way off script. How are you, Ed?

• 2:50Ed Elson?

  Well, it's a very exciting day, Scott, because this is officially our first episode on the new Prof G Markets YouTube channel. We wanted to make it easier for everyone to find and subscribe directly to all of our markets content in one place. We thought that the Prof G Pod channel was getting a little bit cluttered. So from now on, if you're watching on YouTube, this is where we will be. We will be posting every day with the stories that are moving the markets. So please hit subscribe so that you don't miss what matters. We would love to have you with us. Scott, how are you feeling about our new channel?

• 3:22Scott Galloway?

  I'm super excited. And if you, if you like what you hear, please just right now do us a favor and hit subscribe. And also, there's really a secondary benefit here because Ed's feeling a little bit, quite frankly, Ed's feeling a little bit insecure because as you probably heard, pretty much every podcast in the portfolio was nominated for a webby. Let me think. No Mercy to Malice was nominated for best newsletter, best thought leadership, Raging Moderates, best news in politics, Pivot, best tech in business. And let me see, Prof G Markets was nominated for, yep. So Ed is feeling a little insecure.

• 4:01Ed Elson?

  So what do you think that's about? What do you think that's about? I mean, you should be feeling insecure too, because it's also your show. But what do you think that's about? Why did we not get nominated? What is that?

• 4:11Scott Galloway?

  I have absolutely no idea how these award shows figure out who gets nominated and why. All I know is there's about 700 million categories and it costs money to enter. It's, it's a total fucking grift. I mean, I can't wait to accept the award. I mean, if we're really going to be honest, I think what's gone on here is pretty transparent. And that is with you turning 27 and Claire turning 28, everyone's just decided you're over the hill and they need to turn to younger nominees.

• 4:40Ed Elson?

  That could be true. I like that.

• 4:41Scott Galloway?

  Kara Swisher, I don't know if you know this, I have another podcast and a co-host in Kara Swisher. She's, she's literally getting every lifetime achievement award in the world right now. And I'm like, you know, that just means everyone thinks you're dying soon. She's getting all these lifetime achievement awards from all these different, you know, German Shepherd owners of Maine lifetime achievement award.

• 5:03Ed Elson?

  She's good at knowing all the people who run these things. That's what I need to get better. I need to show up and meet the people who are on the committees and go rub elbows with the people who run establishment media. I need to up my appearances on the mainstream cable news networks. I need to get really, really in bed with the establishment. And once they know that, and once they know I'm their friend, that's when we'll start winning some awards.

• 5:27Scott Galloway?

  Yeah, I, I think you can pull that off. You're just going to have to become substantially more interesting a person. But I think, I think that that's, you're a cisgender white dude from Princeton who just turned 27. That's not like, God, I want to meet him.

• 5:43Ed Elson?

  Hey, we can be cool too.

• 5:47Scott Galloway?

  Yeah, we don't check very many boxes.

• 5:50Ed Elson?

  May I launch us into this show?

• 5:51Scott Galloway?

  What the hell? Let's do it.

• 5:53Ed Elson?

  Okay. Today we're discussing the biggest unanswered questions in the markets right now. The SpaceX IPO and losers in the sneaker wars. Let's start with our first story.

• 6:06Scott Galloway?

  Now is the time to buy. I hope you have plenty of the where we're at.

• 6:12Ed Elson?

  It feels like one of the most uncertain market environments in years right now. Not because of what we know, but because of how much we don't know. There are a number of huge, open-ended questions with massive implications. From what happens next in Iran to how AI ultimately reshapes the economy. And the challenge is these are the kinds of forces that can materially move markets and no one has clear answers. So Scott, let's walk through some of the biggest questions out there and try to figure out what investors should actually be doing in an environment like this. We probably have to start with. The Iran question, I mean, what we saw on Wednesday when Trump made his speech at nine P M.

• 6:56Ed Elson?

  People were thinking that he was going to say something that made it sound like we were going to get out of Iran in some capacity or that we were winding things down. He kind of said that, but also not really. He also seems to double down and say that we were going to get more aggressive, but that we're going to do it over two to three weeks. It wasn't the kind of speech that markets really wanted to hear. And then what did we see? We saw an immediate drop in S and P futures right when he made that speech. And then we saw oil surging way back up again. And this is just another example of the uncertainty in the markets right now around this Iran question, where we're basically just waiting for what is Trump going to say?

• 7:38Ed Elson?

  We've had many, many instances of this. We had back on March ninth, when Trump said, I think the war is very complete. And then the markets went up and then a few weeks, a few days later, he said more negative things. He said, we don't even know their leaders. We don't know who we're dealing with. Markets went down. Then he says that we're having very good and productive talks with Iran. Markets go up. Then Iran says, no, those talks didn't happen. Markets go down. We are essentially being whip sword back and forth because of the huge, huge weight of this war and what it could do to global markets and to global economies. And no one really knows what to do. So we're just kind of following the president's lead here.

• 8:18Ed Elson?

  What do you make first of the markets reactions to what's been happening on the Iran front?

• 8:24Scott Galloway?

  I think that the president has no fidelity to the lives of servicemen and servicewomen to the markets more broadly. I think that we're in the midst of what will be seen as the greatest financial scandal in history, where we're using the U. S. Military, our geopolitical currency globally.

• 8:43Scott Galloway?

  Our allies, relationships with our allies, all as a means of creating volatility such that the president can engage in insider trading. I think a good autocrat not only punishes his enemies, which is more difficult with a court system in the US, you can do it to a certain extent, you can put, you can put Dario Modri's firm on a supply chain risk list and make it very difficult for them to do business, but you can't have them thrown out of a window like Putin does in Russia with people he doesn't like. So what he turns to is more what Putin does on the upside, and that is he carves up US assets and gives them to, gives them to people loyal to him, inspiring a great deal of loyalty. People are sort of like, okay, I sort of buy into many of his policies, but you know,

• 9:28Scott Galloway?

  everyone's getting rich but me, I'm gonna get rich and just kiss his ass and maybe he'll give me a defense contract I don't deserve, a government contract I don't deserve, buy a golden share in my company when I'm failing to compete, intel, whatever it might be, and if I go along, get along, he'll make me much, much richer. And the ultimate example of that, the most corrupt one, where he will be in front of a camera and a jury in three to five years, maybe more like five to seven, pretending to be really old and that he doesn't remember, he is giving so much information to people about what he is about to say, not about to say, about the war in Iran, because every time he says, has anything resembling a cogent date around the end, or even a strategy here,

• 10:13Scott Galloway?

  the markets surge and oil drops. And then when he comes out with this word salad of I'm gonna bomb them to the Stone Age, or it's over when I feel it in my bones, or there's reports of amphibious vehicles and another 2,500 Marines deploying to the region, the markets plummet. And as evidenced by tons of reporting here, there is massive options activity before he makes these announcements. So clearly word is leaking out, he knows it's leaking out, he could have secure phones, he could be 100% in a secure location. Instead, he's obviously leaking this information on purpose to his friends and family, and

• 10:55Scott Galloway?

  we have never seen this kind of, and it's not the insider trading that is so upsetting, it's criminal. What's upsetting is he's using our military, our tax dollars, the death and destruction of other people and US service members' lives. As pawns in what is, I believe, the greatest insider trading scheme in history. And I believe that's going to slowly but surely unfold. I realize I'm at a bit of a rand here, but bear with me. I've said for a while that one of the most dangerous things about America and income inequality, which I think is our biggest problem, is the 0.1% no longer are vested in the success of America. What do I mean by that? The 0.1% have their own transportation. They don't give a shit about four-hour TSA lines.

• 11:39Scott Galloway?

  They go to the, they go to Teterboro, they have their own planes, they don't have security. They have their own police forces. They live in buildings and neighborhoods that are of incredible security and dormant, so you always feel safe. They have their own healthcare. There's no waiting in line. They have, they have concierge healthcare systems, they get whatever they want, they have the best healthcare in the world. So what is their vested interest? If the people have, the 40% of Americans have medical or dental debt they can't relate to, not being able to take care of your parents, they can't relate to it. They have been removed from what it is to be in America, and the same thing is happening on a larger level with America.

• 12:20Scott Galloway?

  And that is, as we break shit, we are actually removed from the global economy in the short run. I believe in the long run, we'll pay a huge price. But if you look at the global markets and some of our allies, their stock markets are down more than ours. Because we are blessed with energy independence, food independence, and when there's a flight to safety, America is sort of a giffen good. And this is something you learn in economics, and that is in Ireland, when potatoes got more expensive, their demand went up because it crowded out expenditure or consumer income you could spend on beef or chicken. So you were poor, so you had to buy more potatoes because you couldn't afford. And I wonder if America has become the ultimate giffen good and removed from the vested interest

• 13:05Scott Galloway?

  of the global well-being of the West. Because quite frankly, for a lot of reasons that aren't our fault, when there's danger, when there's insecurity, there's a flight to US stocks. And we are somewhat immune and don't have the same invested interest in the global health, just the same way the 0.1% are no longer invested in the health of America.

• 13:26Ed Elson?

  Just to your point on, on the inequality problem, the fact that so many of, I mean, the wealthiest Americans don't seem to have a vested interest in America. I think it is reflected in so many of the comments that we've seen from the administration, which has mostly been stacked with a bunch of really rich people, mostly former businessmen who made a ton of money, someone like Scott Besen, who got on stage and talked about how Americans want to buy their, their fourth, fifth and sixth houses. Like that right there is the perfect example of what you're describing. It's hard to create policies that make sense for regular Americans when your entire worldview is shaped by the experiences of the top 0.001%

• 14:11Ed Elson?

  of Americans, and that shapes your entire worldview. And that seems to be the kinds of people who are in office right now, which might explain why some of these policies have been so far skewed in favor of the richest. But just to go back to the market's response and what we've seen with Iran so far. I mean, it's clear that there's no way to understand what Trump's agenda actually is. Like, there's no rule, there's no strategy, there's no framework you can really use. We used to think it was taco, like Trump does something and then the markets tell him off and then he stops doing it. But we've seen a lot of

• 14:55Ed Elson?

  moments where the taco actually hasn't materialized. And so it's starting to get to the point where there might actually be no way to predict or explain what he's going to do, including with this speech. I'm sure this is something that a lot of the people within the administration get very, very upset about and get very annoyed about. They're probably trying to create a strategy, create an agenda, and then he just turns on it. An example would be what is going on in the communications between the CIA and Trump. One thing you didn't mention, which they seemed to not see eye to eye on, and they had no explanation for, the CIA said that Iran was not an imminent threat, and they said that their nuclear capabilities had been eviscerated. That was their statement,

• 15:37Ed Elson?

  that was their position. And then Trump comes out and says, why are we doing this? Because they are an imminent threat, and because their nuclear capabilities are rising, and because we need to neutralize it. That was a fundamental disagreement between the CIA and Trump, which leaves us with basically zero understanding of what the hell is even going on here. And so as an investor, it makes things very, very difficult, because there actually aren't, I mean, the job of the investor is to try to understand what the future might generally look like, and then build a thesis, build an investment thesis around that understanding of the future. The trouble is that there is just no way to predict it at this point, because this guy is so erratic, not even his aides, not

• 16:22Ed Elson?

  even his CIA can predict what he's going to do or say. And the trouble is, he's having influence over some of the most important, significant market-moving events in history. I mean, how he responds to this war, how his thought process and strategy materializes will literally move trillions of dollars, it will reverberate, not just for years, but for decades. It could completely royal the oil markets for a very, very long time. And the job of the investor is to try to figure out, where do I stand on this? I think investors look at what's happening with Iran, they throw their hands up, they say, we have no fucking clue. So what will we do? We'll just kind of follow what he says, see what

• 17:04Ed Elson?

  happens, and then kind of play it by ear. But what compounds onto this problem, and this is why I believe we are in the most uncertain investment environment in many years, probably since COVID, is it's not just Iran that is a big question, but there's also the AI question, which people don't know what to do with. Will AI destroy the labor market, or will it not? Will it be less powerful than people think, i.e. it's bubbled? That's what some people said, or will it be more powerful than people think? I E. It will destroy things like software, and that's why we're seeing software getting crushed. And again, the markets are just responding to little stimuli that they see every now and then,

• 17:45Ed Elson?

  such as Satriani Research, some guy on Twitter posts a viral A I blog post, and then suddenly three hundred billion dollars in market value is erased overnight because investors go, I don't know, maybe he's right, maybe we should sell. And that becomes a problem. And then I'll just keep going here. There are several other giant questions that no one really knows the answer to at all. Another one would be this potential looming crisis in private credit. Are we going to have a private credit meltdown? Has the industry issued too many bad loans, especially in the software industry? And are we about to experience a credit crunch in what is now a two trillion dollar industry? That is another giant question.

• 18:28Ed Elson?

  And in my my interview with John Maori, something he said off mic, which I think is very true, is he said, if this were any other year, all we would be talking about right now is private credit. That would be the number one issue on every investor's mind. But that's not the number one issue, because we've also got oil. We've got potentially the inflationary effects of Iran. What might that do to interest rates? People thought that we were going into a rate cutting cycle. Now it appears that we're starting to price things a little differently. People think we won't have any rate cuts this year. And in fact, the chances of a rate hike over the next twelve months have exploded, which means, I mean, this is all the same. No one knows what the fuck is going on right now.

• 19:10Ed Elson?

  I mean, no one has any conviction in their positions, because you can't have any conviction. There's no way to really game out the future. And unlike previous questions, where it's maybe been limited to one or two industries, all of these questions affect literally everything, everyone's lives, everyone's business, which is why I believe it's an interesting moment right now. Uncertainty is extremely high. Tail risks are all over the place. And I think that leaves us with an important question. Like, what are you supposed to do in that environment? I'm not entirely sure yet, but that is certainly the question that I'm starting to approach.

• 19:50Scott Galloway?

  I'm fairly confident advising people what to do in an environment like this. And that is simple, nothing. Because when you do something, you're trying to time the market and that is near impossible. And I learned this the hard way. When Trump was elected in 2016, I thought, this guy's such a fucking idiot. We just elected a reality host, a reality show host, who has bankrupted every, almost every company he started. He's a rich kid who's managed to turn whatever it was, three or $500 million of his dad's money into zero a couple of times. And I thought, this guy doesn't understand the economy. He's reckless. Markets are going to just crash. And I sold everything. And I had some gains, so I had to pay capital

• 20:34Scott Galloway?

  gains. And then six months later, the markets were ripping and I had to buy back in at a higher price. I lost 30 or 40% of my net worth by having an emotional reaction to the markets. And the markets have separated from your emotions and to a certain extent from what's going on in the world. Year to date, the Dow is down 5%, but over the past year, it's up 8%. If you didn't know what was going on, you wouldn't know what was going on by looking at the markets. You would know something's going on in oil. But quite frankly, so far, the yawn, you know, the market's response has been a bit of a yawn. March 31st was the best day since May 2025. The S and P rose nearly 3%, the Nasdaq nearly

• 21:15Scott Galloway?

  4%. Then Trump promised to hit Iran extremely hard in his Wednesday night speech. When he said that, futures were down more than 1%. Oil rose 7%. There's just no fucking way this guy, or some of his acolytes, aren't making a ton of money here. He knows what he's doing. That's a whole other thing, yeah. The only thing that's given me any solace here, and I would recommend it to everybody else, I was watching, I was up late, whatever, till two, watching this, this Yahoo, say fucking nothing. And except, it's like, how can I make, how can I say nothing yet create uncertainty in the markets? That's what he told the speechwriter. I want to say nothing, but yet I want to create an environment of- Let's also eliminate off a trillion dollars in value.

• 21:59Scott Galloway?

  I want to create an environment of uncertainty and insecurity. I don't care about my reputation. I don't care about America's reputation abroad. I don't care about you as servicemen. Just create volatility because I wink wink told people this was what was gonna happen. The only thing that like took my blood pressure down to like 300 last night was watching over and over the launch of Artemis 2 that launched four NASA astronauts into space and will slingshot them around the moon. And what's interesting is it's gonna cost, or so far it's cost about $44 billion to develop. And the war in Iran is now past about 38 billion. So so far, you know, pick your, pick your fighter here, Artemis 2, or this escalation in the war.

• 22:41Scott Galloway?

  And NASA estimates that a base on the moon will cost, by the way, $20 billion to develop. But what's happened here with this uncertainty? Calci has now raised the odds of a recession this year from 20% to 30% just over the past month. I'm shocked it's not higher, actually, but the president

• 23:02Scott Galloway?

  is such a terrible parent. And that is, you're kind of everyone's mom and dad is the president or the nation's dad or mom. Let's say dad, there's never been a mom. And it won't be probably for another eight or 12 years. Who the fuck am I kidding?

• 23:18Scott Galloway?

  But as a parent, you need to provide some level of certainty and clarity.

• 23:25Scott Galloway?

  This is what kids need to know what they can expect from their parents. They need guardrails. They need to know that if I do this, I'm gonna get in trouble. They need to know who they're coming home to from school. And the most traumatized kids later in life, it's not, it's not just the ones that are abused. It's the ones who didn't know what to expect every day from their parents. Their parents were inconsistent. It's almost, I mean, and there's some research here. You'd rather have an asshole dad than a dad who is super nice and super mean all in the same fucking day. You just need to develop the coping mechanisms to deal with expectations. And right now,

• 24:07Scott Galloway?

  the world, our allies, our enemies, don't know what the fuck to expect from this guy. And the uncertainty is worse than

• 24:17Scott Galloway?

  You know, people, it's easier to deal with Putin right now and Xi because they at least have their other countries and other leaders have a reasonable idea of what to expect from this person.

• 24:31Ed Elson?

  Yeah, I think that's a really good point, especially the comparison to like Trump as the dad of America. I mean, I just think about what James Sexton told us last week where he was like, hurt people, hurt people. I mean, we, the effects of having an erratic parent and the long lasting traumatic effects on the child are very well documented and studied and we all know what happens there. But it's interesting, like when you draw that parallel, it does make me think like, what are going to be sort of the PTSD post traumatic effects on the American people that will last decades as a result of this ridiculously uncertain and fraught environment that he has brought upon us?

• 25:16Ed Elson?

  I mean, I guess we're getting a little bit therapist here. Maybe that's not our lane, but it does certainly make me a little, little concerned.

• 25:25Scott Galloway?

  But just real quick, I feel as if I can diagnose President Trump fairly well. He's an asshole and he's an obese man with no love in his life and will be dead soon. That's my, that's my diagnosis here.

• 25:41Ed Elson?

  We'll be right back after the break. And if you're enjoying the show so far, send it to a friend and please follow us on YouTube, Spotify, or wherever you get your podcasts.

• 26:25Speaker 01

  Are your ad campaigns lighting up the dashboard? But not the pipeline? That's bull spend. And marketers are calling it out in. Dashboard Confessions.

• 26:35Speaker 02

  My boss asked for results, so I opened my dashboard for the only positive sounding metric I had. Impressions.

• 26:42Speaker 01

  Cut the bull spend. See revenue, not just reach. LinkedIn delivers the highest return on ad spend of major ad networks. Advertise on LinkedIn. Spend $250 on your first campaign and get a $250 credit. Go to LinkedIn.com/campaign. Terms and conditions apply.

• 26:57Speaker 06

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• 27:30Ed Elson?

  We're back with Prof G Markets. SpaceX has officially filed for an IPO, and it could be the biggest one ever. The company has confidentially filed with the SEC with a potential listing coming as soon as June. It's reportedly targeting a valuation of more than $2 trillion and could raise up to $75 billion in the offering. We have known this was coming, but now it is imminent. Scott, there is a ton here to talk about. I mean, just the fact that this is going to be the largest IPO ever. Also, what it says about the space industry, which has been ripping. And of course, everyone's very excited about it right now because of the launch of Optimus 2 and other things as well. We could talk about what this will do for Elon,

• 28:15Ed Elson?

  the fact that he will become a trillionaire. If this happens, if it goes through, he'll be the world's first trillionaire. A lot of different angles here. Where do you want to start?

• 28:24Scott Galloway?

  A decent definition of intelligence, the ability to hold two thoughts in your head at once, being able to understand nuance. And there's nuance here, and that is People have a tendency to go, is this an amazing company? Buy the stock. Or is it not an amazing company? Don't buy the stock. And what they fail to realize is that they also have to set all of this against the valuation that it's being priced at. So first off, let's talk about SpaceX. It has moats the size of the Amazon. I think it has greater barriers of entry right now than any company in the world. It's responsible for 85% of all space launches in the US last year, and its launch costs are a fifth of its closest competitor. And that's basically, when you're talking about launch, it's like talking about, you know, a semiconductor.

• 29:09Scott Galloway?

  It's pretty much how fast and how cheap it is. They're not, it doesn't matter how quickly you get shit into low Earth orbit. It matters how inexpensively, and they can do it for five times less. They can shoot up five of the same, five satellites for the same cost as their closest competitor cost to send one satellite into space. It's got incredible adjacent products. I'm going to be using Starlink on my flight home. I will now choose an airline or a means of transportation based on whether it has Starlink or not. So you're talking about airlines that are flying the same goddamn tin can at the same price to the same area. The only thing they can differentiate on is service, the configuration internally, which is getting harder and harder because you can't maintain differentiation there.

• 29:54Scott Galloway?

  But Starlink, for a brief moment, is a point of differentiation. It's sweeping the maritime market. It comes in with a better product at like a quarter of the price. So in sum, is this an amazing company? Or is it ridiculously overvalued? The answer is yes. And also, this, this man of the people bullshit where he's saying he's reserving 30% of the shares for the retail investors? He's, he's doing that because retail investors are the only ones stupid enough to pay this price. Institutions weren't going to, institutions weren't going to cover the allotment here.

• 30:35Scott Galloway?

  So he gets to say, oh, I'm a man of the people and I'm allocating it to retail as if they're getting in on something. So anyways, just a bit of a prediction here.

• 30:46Scott Galloway?

  If you get allocation in the IPO, great. And within two minutes, you want out of this thing. There might be a pop, they'll probably, the bankers and Musk will price it such that there is a pop out of the gates. But you do not, in six months, if this thing gets out anywhere near 1.8 trillion or 1.7 trillion valuation, you do not want to be in this stock three, six months in when people start to rationalize. Even Musk and his jazz hands can't figure out a way to justify anything resembling this valuation.

• 31:18Ed Elson?

  The point you make there, holding two things in your head at the same time. Another aspect on this IPO is that there is both a lot of BS and a lot of jazz hands here, and also a lot of actual material business substance. So, I mean, let's just look at like what SpaceX is. I mean, as you mentioned, they are the leader, the world leader in getting stuff out into space, responsible for more than half of all orbital launches globally last year. So they're launching more than the entire world combined. If you look at the US, they account for 85% of launches. So they've got that business. We've called it space hauling in the past.

• 31:59Ed Elson?

  And that, in that sense, they are the market leader by a huge, huge margin, and also they're doing it at the cheapest price. Also, the satellite business, Starlink, they control over 10,000 satellites in orbit as of last month. That's more than two thirds of the entire world's total. So they've got this telecommunications business as well, which is also very exciting and also ripping, and there's a lot of reason to be excited about that. And then also, they've got XAI, which has merged into SpaceX as of last year. It's very unclear how that actually played out and to what extent they are actually properly merged at this point. And I guess we'll start to find that out when they start to release the filings as

• 32:43Ed Elson?

  they file for IPO, which will be very interesting to see, like what is going on there. But also, like, consider the fact that XAI is one of the leading frontier model companies in the world. I mean, they are. Competing, yes, they're behind, but they are competing with OpenAI and Anthropic. And so in a lot of ways, there's also a big AI play here that is separate from the from the space business that you should also consider. And then also consider the fact that XAI is now an owner of X, formerly known as Twitter. So then, at the same time, it's also a social media company. And then the question becomes, are you bullish on X as a as a as a social media platform? Is that something that you're excited about?

• 33:26Ed Elson?

  All of these businesses are getting melded into one. And I do think that that is by design because Elon, I mean, he's such a magician of commanding these extraordinary multiples because he promises all of these complex and interesting things that you can only really think about way far out into the future, which leaves investors with no choice but to basically just say, you know, screw it. The TAM is going to be massive because they're doing space and they're doing AI and also telecommunications and digital media. They're doing all of these different things. So it would be stupid to put a normal multiple on the revenues here. So whatever, let's just say that the market cap is, call it $2 trillion. We'll make it the largest IPO in history.

• 34:09Ed Elson?

  We'll cross our fingers and wait and see. And that is kind of the approach here. It has been his approach before, especially in the in the case of Tesla, where he just wraps the taxis and the robot, the humanoid robots all into one thing. And it's going to be the same thing with SpaceX.

• 34:26Scott Galloway?

  Yeah, like I think that he's conglomerating. And I think what he's trying to do is SpaceX is the lipstick. It's an amazing company with an amazing product. And XAI and Twitter are the pig.

• 34:41Scott Galloway?

  Okay, XAI is growing within the Twitter community. But the reality is people are coming to grips with the fact that the winners and losers in AI in terms of LLMs, it's all about one thing. It's about the enterprise market and that is consumers have access to a ton of free product and there's some revenue there. Nothing, nothing in the consumer market is going to justify these types of valuations when they have access to a ton of free open weight LLMs. So this is all about the enterprise market and let's talk about the enterprise market. You have. Anthropic is now 40% of enterprise spend and I read yesterday that they're getting 70%

• 35:25Scott Galloway?

  share on new spending in the enterprise market. It's evidenced by the fact that OpenAI is focusing because they are clearly freaked out. OpenAI has about 27% share, Google 21. XAI is negligible, like barely even registers. So I'm not sure I buy that XAI is a better LLM. Now, what's interesting is can the superior connectivity of SpaceX slash whatever there is doing with Starlink going to give XAI an advantage? I think what he's effectively doing here is he's saying, okay, I have one amazing company in space. There's nothing cooler. I can talk about it and have

• 36:09Scott Galloway?

  videos of launches. It's going to be really dramatic, really cool. It's perfect for him. It's like the ultimate carnival barker. And then I can vary this other shit in it, which will give it an AI and a media spin. And then I think eventually he'll roll in Tesla, which is also starting to collapse and talk about autonomous connectivity that's unrivaled, all flowing through LLMs, which inform these incredible products. So it's going to be a story. There's going to be so much spin here, but it's perfect for him because he was able to artificially elevate Tesla for a decade. There's just no fucking way to rationalize Tesla's valuation, other than him saying, oh,

• 36:49Scott Galloway?

  rebovin, or autonomous driving. It's coming, a million autonomous taxis on the, Tesla taxis on the road within 12 months. I think he said that in 2017. So what is he? He's bored of that now. Now it's humanoid robots. I mean, now that the taxis- Look over here, humanoid robot. We haven't heard much about those humanoid robots lately. So this is the ultimate, he's got an amazing company that'll be sort of the lead, the lipstick on these different pigs. This is going to be an incredible act of showmanship, an amazing company, maybe worth- Three hundred billion? I don't know, maybe worth four hundred billion.

• 37:26Ed Elson?

  I think that segues us well into this retail investor element. I mean, the stat that is important for people to know is that SpaceX is allocating more than thirty percent of the IPO shares to retail investors. Most IPOs will save ten percent for retail. So there is clearly, I mean, you could read this as, oh, this is, this is nice of them because they're opening up to retail investors and they're giving retail investors a shot. Or you read it as they need the retail investor to prop up this very, very ridiculous valuation because perhaps it will be the retail investors, maybe they view it quite cynically, maybe they see that the retail investors might be the dumb money. And they say retail investors will be the ones who are

• 38:11Ed Elson?

  most susceptible to our kind of ridiculous narrative laundering story here about a future of AI combined with space. By the way, we should mention that he's also talking about building data centers in space. That's like one of his big themes for SpaceX, which many people, many experts have said is completely ridiculous and doesn't make any sense whatsoever. The idea that we're gonna, I mean, we have, we have land on Earth. Why are you gonna go build a data center on a space station in space? It just doesn't really make sense. But it might be the kind of story that retail is particularly susceptible to. And then some people would say that we're being patronizing to retail investors perhaps. But I mean, let's

• 38:53Ed Elson?

  also consider the fact that forty-three percent of Tesla is owned by retail investors. Like, retail is the thing that is supporting that extraordinary valuation. And it does appear that they believe that that is what is going to support this valuation too. I'm maybe just cynical, but I view it as them sort of taking advantage of retail as opposed to offering them an opportunity.

• 39:15Scott Galloway?

  Probably the most, you would argue, the most innovative company in the last five or 10 years has been.

• 39:22Scott Galloway?

  Nvidia and Nvidia is trading at a forward P E of somewhere between seventeen and twenty. That's a price to earnings.

• 39:29Ed Elson?

  I mean, you made the Google comparison earlier, which I think is a good one because when Google IPO'd, the company was trading at ten times trailing revenue. The revenue growth was two hundred forty percent. You look at SpaceX, which is going public at more than one hundred and twenty five times trailing revenue, the growth is twenty percent. So when you think about it, SpaceX's revenue growth is ten times lower than Google's was when Google IPO'd, and yet the valuation is more than ten times higher than Google's was when Google went public. So the whole thing is kind of flipped on its head here. And the only thing that could justify the valuation is if you believe that there's this very, very special future of space and A I and data centers that all comes together in the perfect way.

• 40:14Ed Elson?

  And it's all, I mean, you really, it's just hoping. You have to hope that this is going to be a massively successful business. Maybe it will be, but that's a lot of hope in there. You're putting a lot of faith in his ability to to grow these revenues tremendously. Sixteen billion dollars in revenue last year. That's not that big. That's not that impressive. Eight billion dollars in profit. Okay, whatever. The valuation's just, it's just too high.

• 40:40Scott Galloway?

  When I hear that, that type of striking insight from you, the only thought that kind of runs through my mind is that it's hard to believe that I was nominated for three Webby's and you were nominated for zero. Hello, ladies. Watch his shoulders. Watch his shoulders. Hello. I'm sorry. Yeah, that's fascinating insight.

• 40:59Ed Elson?

  Yeah, you're going to trigger me again, and then I'm going to start, and then I'm going to start getting salty and upset.

• 41:04Scott Galloway?

  You still have time, my brother. When I was twenty seven, I knew, I knew every line from the Planet of the Apes and could make a bong out of any household item. That was really my accomplishments to that point. You're doing just fine, Ed.

• 41:16Ed Elson?

  But, you know, I'm getting to that age where you started actually to do some cool stuff. I mean, I'm twenty seven now. I'm pretty sure that's when you were starting your first company. Like, we're rubbing up against your glow up period here. So I take your point.

• 41:31Scott Galloway?

  Company's doing a lot of work there. It was me, it was me working out of a two hundred and eighty dollar apartment in Rockridge, Oakland, calling the alumni of Haas, saying, I'm a brand strategist. Will you hire me?

• 41:43Ed Elson?

  That's not what you told investors. They liked it. They liked you. The final angle here on this SpaceX point. If this goes public at $2 trillion, and it probably will, Elon will become a trillionaire. He owns more than 40% of SpaceX. So this would make his stake worth roughly $860 billion. And now, if you look at the odds on Kalshi that Elon becomes a trillionaire this year, those odds have risen to 75%. That's this year. So basically, he's going to be a trillionaire. Some people will say, oh, well, you know, that's not a big deal because of inflation. Like, what's the inflation adjusted number? I'll just give you some context.

• 42:28Ed Elson?

  During the Gilded Age, John Rockefeller was worth 1.5% of US GDP. As a share of GDP, if this goes, if this IPO goes as expected, Elon will be worth more than double that as a share of GDP. So Elon will be the richest guy in history by far on a relative basis, as well as being the world's first trillionaire. This is going to make him incredibly rich. What do you make of it?

• 42:57Scott Galloway?

  I think it's important that we have what feels like outrageous wealth in the United States. I think that one of the reasons people come here is that they think there's no ceiling on me. I can, in Germany, you're supposed to stay within your class. You're, there's a certain sort of, what do they call it? Trimming the daisies or whatever. In the US, the notion is that anyone can be magnificently wealthy and having, you can be a billionaire in the United States. I think that's a wonderful thing. And I don't believe in these kind of class wars of assuming that all billionaires are bad people. I think that's unhealthy. What's happened, though, is that because of a tax policy that's been weaponized by the incumbents,

• 43:42Scott Galloway?

  billionaires have been able to pull away and garner disproportionate amount so much of the proceeds and prosperity that it's creating an anxious and depressed youth. And that is, we talked about this in the last episode, people's mood and feeling about their situation isn't about how they're doing relative to people. Fifty or a hundred years ago, they do it relative to how they're doing to everybody else. So when you're not accelerating as quickly as the top 10%, you feel as if you're falling behind, even if you're doing better. And when your Instagram feed is just full of constant reminders of how the 0.1% are doing, or the 20% with a ring light, and how to use Instagram pretending to be the 0.1%, you just feel like you're not keeping up, and you feel bad about yourself, and you feel bad about the country, as evidenced

• 44:26Scott Galloway?

  by only one in 10 young Americans feel good or very good about America, whereas it's one in two people my age. And part of that problem is that when you have 26 people who are worth more, no, I'm sorry, now it's six people who are worth more than the bottom half of America, and he may be close, worth more than the bottom 40% of America, it creates a sense that the system is rigged. A vibe. A vibe, a certainty, of an observable pattern. Also, the people in the Gilded Age, they couldn't turn off battlefield technology in Ukraine or on and switch the trajectory of a global conflict. They didn't have that sort of power and access to technology. And

• 45:08Scott Galloway?

  what's really frightening about this, quite frankly, is that we have essentially wars, and the global order can be massively influenced. There's a decent argument that Musk, with $250 million, swung the presidential election. I actually think Trump would have won without him, because we had a fairly mediocre candidate, but he definitely had a big impact with a quarter of a billion dollars, and with a quarter of a billion dollars and weaponizing his platform. Now, what could he do in the next presidential election if he decides, I want X or Y? And he said, I know, I'm worth a trillion dollars, I'll take 2% of my net

• 45:49Scott Galloway?

  worth. 2%, that's $20 billion. That's 80 times more than he spent in the last election. And with Citizens United, $2 billion surgically delivered over a platform that, you know, 40% of America's on, or something like that, he could have, and then targeted, and the fact that our electoral system basically has made it such that there are a small number of counties and a small number of states that decide the election. He could just overwhelm them with messaging and money and swing the election. And so you have essentially the most powerful person in the world is decided by one man. And battlefield technology can be decided by one man's blood sugar level.

• 46:32Scott Galloway?

  And this individual, while being a genius, is someone who is addicted to ketamine. According to the Wall Street Journal, sleeps with a loaded gun next to his bed and is being sued concurrently by two women for sole custody of that child because he hasn't seen that child. And by the way, I just don't think any one person, regardless of how wonderful you may think they are. One of the universal axioms of our species is that power corrupts and absolute power absolutely corrupts. And in a capitalist society, money translates to power and a connected global economy with connectivity through technology. That's also controlled by this one person who is not subject to any regulation, is not bound by the law, but protected by it, can buy off any politician.

• 47:16Scott Galloway?

  If shit gets really real from here, can piece out to a country with no extradition strategies, but likely wouldn't even need to do that because he can buy so many politicians or delay and obfuscate any sort of civil or criminal prosecution. You effectively have the new leader of the world because presidents are term limited. Notice how Trump is such an asshole. Musk said Trump is in the Epstein files before any of the files, before they came out. And Trump didn't say anything mean back. I mean, Trump, Trump is so scared of this guy. And he should be because this is the individual now who has greater influence in the medium and the long term. President Trump, the President of the United States, has greater influence than anyone in the short run. He can deploy the most successful organization in history.

• 48:01Scott Galloway?

  And that is the organization that can provide or deliver more lethality globally than any organization in history, and that's US military. But over the medium and the long term, it's a guy with no term limits, who controls connectivity, who's worth the GDP of a small nation and can deploy it strategically for his own desires, blood sugar level or ketamine hallucination. So at some point, as a total capitalist who believes in people should have the opportunity to get exceptionally wealthy, this level of income inequality really has become an existential threat, especially when a small group of people have this much power.

• 48:38Ed Elson?

  We'll be right back and for even more markets content, sign up for our newsletter at profgmarkets.com.

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• 50:24Ed Elson?

  We're back with Prof G Markets. Two sneaker brands at opposite ends of the market are both running into trouble. Those brands are Nike and All Boats. Nike's shares dropped 16% after warning that sales will decline for the rest of the year, including an unexpected 20% hit in China this quarter. And internally, the frustration is showing. CEO Elliot Hill told employees he's, quote, "so..." Tired of talking about fixing the business and wants to shift the focus to driving growth. Then there's Allbirds, the once buzzy shoe brand that peaked at a $4 billion valuation. Last week, it sold off its IP for $39 million after never turning a profit since going public in 2021.

• 51:07Ed Elson?

  So it's got two different companies in the same space, suffering different problems, but maybe also similar. Just to go through what happened with Nike here, Nike beat on earnings, stock plummeted 16%. The big problem was the guidance analysts were expecting that sales would grow next quarter. Nike said that sales would actually decline by up to 4%. And as I mentioned in that intro there, the big problem is China. They expect China sales are going to fall 20% next quarter. And this has just been a horrible few years for Nike. The stock has fallen nearly 70% since 2021. Revenue has fallen every quarter for more than a year.

• 51:49Ed Elson?

  And the stock is now sitting at a nine-year low. The valuation is also extremely low at this point, trading at 1.4x sales. Compared to our conversation about SpaceX, more than 100x sales. That valuation on a price-to-sales multiple, it's the lowest we've seen for Nike since 2009. So really bad year, several years for Nike. And then also really bad for Allbirds, which everyone was very excited about back in 2021.

• 52:14Scott Galloway?

  Not everyone. You don't remember our CNN Plus show?

• 52:17Ed Elson?

  Not everyone, not everyone. Yes, we'll get to that. Valuation hit $4 billion and the stock collapses. It's down 99% and they sell basically what's left of the company, which is the IP, for $39 million, literal peanuts compared to what people expected. So maybe we'll start with Allbirds because you mentioned not everyone was excited and that's true. You were not excited. Let's start with your reactions to both of these companies.

• 52:47Scott Galloway?

  So just a walk down memory lane, Jeff Stocker called me and said, would you like to do a show on, we're doing a subscription streaming platform, CNN Plus? Would you like to do a show? And I said, yes. And he said, do you want to get our agents involved or do you just want to do the deal directly? And I said to him, I trust you. I think you're generous. You're obviously very good with talent. Just put an offer on the table and I'm not going to even respond. I'm just going to accept. So send me the paperwork. And he did that and he was generous and I've got a one year contract. I should have, he offered me two, two, but I, you know, I said, no, I don't want to commit to anything for longer than a year and I wish I had. But anyways, he gave me a one year contract and we started, what was it called again? I don't remember what it was called. Was it called the Prof G Show?

• 53:31Scott Galloway?

  I don't remember what it was called. You worked on it. Do you remember what it was called? I think it was called No Mercy No Malice. Oh, No Mercy No Malice. That's right. And anyways, we did it, just a brief history, we did it for five or six shows and Monday night, my producer called me and said, good news, we're now the highest rated hourly show on CNN plus. We were beating out Jake Tapper's book club and, and Anderson's show on, you know, you know, who's died in your life? Anyways, that's not funny. That's not funny. But high fives all around. Do you remember? I, I think I sent a message to everyone saying we're the number one hourly show on CNN plus. Not sure how excited we all were about that.

• 54:14Scott Galloway?

  Yeah. Which might have meant 14 people. We don't know what that meant. Anyways, and then I'm in San Diego. I went down to the bar, you know, as I often do, and I woke up the next morning not feeling great as I often do. And, and I get from Kara, I'm like, are you all right? And I'm like, what? I'm like, what's wrong? And she goes, oh, you know, and then she forwarded me the New York Times article, CNN plus being unplugged by the new owners who were angry by Zaslav, who wanted to show Jeff he was on top. So anyways, but the first episode, we did a rundown of these consumer IPOs and there were three. Warby Parker, Rent the Runway and Allbirds. And I said, the only one I liked was Warby

• 54:56Scott Galloway?

  Parker. I thought, I think Warby Parker is incredible. I think I'm wearing Warby Parker glasses right now. I think they are an absolute breakthrough unlock in terms of vertical integration, great stores, great manufacturing. And they took a category that was controlled by a monopoly. I forget what it was called. Lux, Luxottica. That was every year raising prices faster than inflation. And with guys like me who wear glasses, you end up getting a six or 700 pair of glasses. And this happened to me. And then right after you pick them up, leaving them in the cabin the way home. And Warby said, we can give you 80 or 90% of a Tom Ford or an Oliver Peoples class, glasses, pair of glasses for.

• 55:36Scott Galloway?

  20% of the price, 100 bucks. And so now I go into Warby Parker and I pick up three or four pairs. They're almost like disposable for me. It's been a huge game changer for me. I love what they do. I love the IPO. And by the way, it hasn't performed that well since the IPO. It's flat to down. It's probably been cut in half.

• 55:51Ed Elson?

  Flat to down, flat to down or cut in half. It's been cut in half. It's not been great.

• 55:56Scott Galloway?

  Hasn't been cut in half. But compared to the other two, it's the, it's Nvidia. Because Rent the Runway, I remember looking at that. Rent the Runway was a stupid business. A nice idea, but for every dress they rented, they were losing money. So it was kind of the WeWork of the dress or the clothing rental business. And I was on the board of Urban Outfitters and we all sat in a board meeting. And I don't think I'm, this isn't inside baseball. At some point, you know, everything gets sunshine. And our viewpoint was wait till they go out of business and we're going to buy them for scrap. They just don't have the scale. They don't have the sourcing, the merchandising. They don't have the scale. And every member they signed up for, whatever it was, 200 bucks a year was going to cost them.

• 56:39Scott Galloway?

  Or if you signed up a member for, I forget, I forget what they were charging for X dollars, you were going to lose 2X. It was WeWork. It was negative gross margins that got no leverage on scale. And then finally, Allbirds was a stupid company. It was a very fashionable product, which meant it was like this kind of mohair, kind of cool. And it had absolutely the worst spokespeople in the world. And that is the VC community embraced it. Oh, fuck, that's what I want to be. I want to be a 58 year old guy that's slightly overweight, who went to Stanford and is now washing out founders and thinks that his character and grit are responsible for the American success story. Yeah, that's who I want to be.

• 57:20Scott Galloway?

  And it just, and then they went out, they took their, I followed the company pretty closely. It was kind of like what Restoration Hardware did in the first version. They went out, signed a bunch of expensive leases that they could never sustain on four wall unit economics. And slowly but surely, it was pretty clear the thing was going to go to zero. It didn't go to zero as quickly as Rent the Runway, but there's no IP here. I'm shocked anyone paid anything for this. Maybe it's an e-commerce site from people who want to, I don't know, remember the good old days of. I don't know, investing, getting in the series E of Tesla, or whatever it is, the people who are wearing those shoes are doing five years ago. But I will say this, they have really good underwear. I do like their underwear. But it never, this company never made any

• 58:02Scott Galloway?

  sense. It never had the following and the depth of the following or the loyalty. It just was a shitty business, shitty idea. Should have never been public, should have been way more measured. Should we talk about Nike?

• 58:14Ed Elson?

  Yeah, but I just want to read you one quote from Nomad, Nomad is from October of 2021. Also, just note that I was your lead analyst on this, on this article. I'm going to pat myself on the back too. But here is the quote, it's very good. Our view, October 2021, our view, quote, "All birds organic growth is spluttering and management is buying transitory growth to support the stock price until management can sell." That is essentially what happened here. We were not very excited about this company, especially compared to the other companies that were going public. And yeah, it has been a disaster and $39 million for the IP. I mean, they have essentially, they've essentially shut the business down. And perhaps there are some learnings there on what they got right,

• 58:56Ed Elson?

  what they got wrong. I mean, as you point out, they invested pretty heavily in, in direct consumer, which I think was kind of exciting at the time. People were kind of pro direct consumer. But then there was the shift where people realized we're kind of underrating wholesale and the value of wholesale. They didn't really invest anything into those wholesale relationships. They couldn't maintain these stores. And so they cut the number of storefronts in half. And it just ended up being a giant disaster, which is a good transition into what's happened with Nike, because obviously, the Nike story, Elliot Hill's story, has been all about, let's revive our wholesale business. Let's shift a little bit away from the D to C story, which we were really leaning into under the previous

• 59:39Ed Elson?

  CEO, John Donahoe. But it appears even that isn't really working. So yeah, let's get, let's hear your views on what Nike is maybe getting right, but also what it's getting wrong.

• 59:50Scott Galloway?

  Look, this is arguably one of the, still one of the greatest consumer brands in the world. I don't care if you're watching a football game and Ghana or badminton in the UK, the Nike brand just has resonance and it means American competitive, you didn't win silver, you lost gold, like win at any cost. It's just, it's incredible. They have great products. I think they have great distribution. When we sold L2, I gave a list of the top 12 people to Gartner and said, whatever you do, hold on to these people. Within, I don't know, 24 months, all of them were gone. And three of the most talented people, Maureen Mullin, Ashley Tolbert and Daniel Bailey,

• 1:00:31Scott Galloway?

  who was also my graduate student instructor way back when, went to Nike and Nike was one of our biggest clients. And they went when I think the stock was at, I don't know, 80 and it went to 120. So good for them. And now it's back to what 45 or something? The stock is where it was, it's in 2014. Yeah, I think 2017. The stock has been decimated on any, and it looks cheap. I thought it looked cheap a month ago. What struck me as strange was Elliot Hill. I've, I've only, I've been in a room, I, I know Elliot a little bit, not really. He strikes me as a very talented guy and I think he was good for morale to bring an insider back. John Donahue will

• 1:01:12Scott Galloway?

  go down as one of the great disasters, bringing in a tech guy to run a, a, a brand driven company. But Elliot told employees, and you said this, he's quote, "So tired of talking about fixing the business." I feel like that's when with my ex-wife, if I would have said to her, "I'm so sick of talking about valid reasons for my shortcomings as a man and a husband." It's like, well, okay bitch. Yeah, I bet your board is sick of you talking about it, fixing the business and wants to see some, because he's now been there. It's a little unfair. He's only been there, I think 15 or 16 months. He should be given three years. This is, you know, you're not turning around a speedboat, you're turning around a tanker here. But I think he's got the wrong strategy. I, I think that, I saw the motor and said something that always struck me and that is,

• 1:01:58Scott Galloway?

  We're obsessed with youth and growth companies never want to accept that they're aging and they're now mature companies. And really talented CFOs will say, this is a low-growth mature company. We need to start returning money to shareholders and managing the cost side more effectively. And Nike is still pumping Botox and fillers into its face trying to be young again and not recognizing it's a mature, low-growth company. And the data that struck me was their employment is actually up since 2020. I, quite frankly, if I were on this board, I'd be saying, okay, Elliot, I get the rah-rah speech for the all hands, but the reality is we need to cut costs by 20% over the next three years here because

• 1:02:42Scott Galloway?

  this is a low-growth business. We need to obviously reinvigorate the product, try and find pockets of growth. But be clear, we are now a mature company. We are wearing diapers on the wrong end of the age spectrum. We're not a growth company. We are a mature company that needs to manage this company more responsibly. What do I mean by that? And no one likes to say this. I think there's going to be 5,000 to 20,000 layoffs in the next 24 months because I believe an activist is going to come in here and say, great brand, still amazing sales. I mean, the last time their stock was trading at this level, they were doing 25 or 30 billion in sales. Now they're doing 45 billion in sales, but they

• 1:03:22Scott Galloway?

  have margin compression and they aren't growing. And the market hates that. So bottom line, they need to be who they are. They need to acknowledge, they need to do away with the trucker hat and the bell-bottom jeans and trying to pretend they're younger than they are, as I sit here dressed like an aging skateboarder, and acknowledge they're a mature, low-growth company and cut costs. And for Elliot to pretend that this is a growth company and they need to reinvigorate growth, okay, shore up the business, shore up the brand, fine. But this is now a business about operations and discipline and being the adult in the room and cutting costs dramatically.

• 1:04:01Ed Elson?

  It's so interesting you say, this isn't a growth company. But one thing that has always struck me, on Nike's investor relations homepage, the first thing you see

• 1:04:13Ed Elson?

  And this has been the case for years and I just checked and it still is the case. The first thing you see on the Investor Relations homepage is giant letters Nike is a growth company. That's like their main pitch to investors. We're saying we're a growth company. And to your point, it's like, well, definitionally you're not because your revenue has fallen every quarter for more than a year at this point. So definitely you are not a growth company. But it is an interesting thing and I've always wondered what companies are really supposed to do about this. Because Aswath's point about the corporate life cycle is a very good one, which is, you know, the companies age over time and as you age, you need to try to figure out how to act more your age.

• 1:04:53Ed Elson?

  And you don't want to try to pretend that you're a young company like Nike seems to be doing, saying that we're a growth company. But at the same time, it's like, well, you also want to grow. And you also want, especially in a consumer driven business like Nike, you want to look young. You want to look cool. You want to look like the next big thing. And so it's a very difficult thing to balance. And I guess as the brand strategy professor, how would you be balancing that? Like maybe on the corporate level, it's a different thing, but like they still need to look cool.

• 1:05:28Scott Galloway?

  This isn't about brand strategy. I think Elliot and his team are outstanding a brand and I think that I assume they're still working with Wyden Kennedy. They have some of the brightest brand builders in the world. Their direct to consumer strategy maybe need a refresh, but I know some of the people running their DTC and they're incredibly talented. This is about, okay, they lost touch with the quote unquote street community. The product needs an upgrade. This is a business issue. This is, this is going through the company and unfortunately saying, all right, we have, I think it's 55,000 employees. We need to do 90% of the revenue with 30,000. And I think they could get there. I think there's probably, this is what happens when you're a growth company. You keep eating, you keep eating, and you build up fatty cells

• 1:06:12Scott Galloway?

  all around the company, all around the corpus. And I think that's what's happened here. And it's not romantic. But I think what they should be telling investors is we're going to grow EBITDA 12 to 15% a year for the next five years. And this is how we're going to do it through a combination of efficiencies, which is Latin for cost cutting, which is Latin for layoffs, and, and having solid if unremarkable growth. And that would be, quite frankly, that's going to be, I mean, the good news is that's going to be easier than trying to find new pockets of growth for a company that doesn't have the same cachet as some of these smaller niche brands like a Hoka or, or, or an on running. So this is entirely the wrong strategy from a shareholder standpoint. I'll use Tom Selleck

• 1:06:56Scott Galloway?

  as an example. Do you know who Tom Selleck is?

• 1:06:58Ed Elson?

  No.

• 1:06:59Scott Galloway?

  This is one of the most handsome men of the last millennium. Tom Selleck, Magnum P I. This guy, and by the way, a quick fact, I'm the exact same height and weight as Tom Selleck, except at his prime, except he looks much better in shorts than I do.

• 1:07:16Ed Elson?

  How do you know his weight?

• 1:07:17Scott Galloway?

  I was obsessed with Tom Selleck. This guy is the baller dude. He was the honorary captain of the US volleyball team in like 1988 or 92. Great actor, handsome, nice man. I, I just, I think married once. I think this guy's a great role model for masculinity. Anyway, um, uh, drove a Ferrari around Hawaii as a private detective. Not a great TV show, but.

• 1:07:43Ed Elson?

  Okay, okay.

• 1:07:44Scott Galloway?

  Anyways, anyways, at some point.

• 1:07:47Ed Elson?

  You like him.

• 1:07:48Scott Galloway?

  At some point, even Tom Selleck has to stop wearing shorts. At some point, Nike, you have to stop wearing shorts. You're not a growth company. You aren't. And if you keep, it, it, take your lips off the fucking crack pipe. Elliot, you are a fiduciary for shareholders and for your employees. And 10,000 or 20,000 people at Nike have been laid off. They just don't know it yet. So what you want to do is figure out where there are efficiencies in this company, be as generous as possible with those people who probably don't need to work at a company that's going to go sideways for the next 10 fucking years, pretending to pump a bunch

• 1:08:28Scott Galloway?

  of Botox in its face and pretend we're young again, and start cutting costs and rationalizing this business and waking up to the notion that you are a now, you are no longer a teenager, you are a baby boomer. And this can be, this can be a great investment. This can, and whether you want to do that or not, someone's going to force you to do it because this thing is becoming obviously overweight and needs to cut costs and have, and look in the mirror and go, oh, wait, I'm not 18 any longer. So I have, Elliot is the right guy, I think, for probably the brand and product.

• 1:09:09Scott Galloway?

  Someone on the board and Elliot need to get together and say, we're paid to be adults. It is time to, we should be, the front of our investor page should say, growing EBITDA, growing earnings, growing shareholder value. And in about, fuck, in about four hours with AI and some information, I could put together an investment deck that would take the stock up 10% by talking about how we're going to increase EBITDA 10 to 15% a year for the next three to five years through by keeping revenues flat, but dramatically cutting expenses. And by the way, for every dollar in expenses you cut, it's kind of the same as getting

• 1:09:52Scott Galloway?

  $6 or $7 in incremental revenue. Because if you have operating margins, or say you have operating margins of 15 or 20%, cutting expenses by a dollar is the same, has the same impact on the bottom line as $5 in incremental growth. Which do you think is easier in a company like this? I bet there is fat fucking everywhere at Nike right now. They may not feel like it. They've, they've gone through some layoffs and they feel like it's hard. They have no idea, the employees in Portland, what's coming. Because an activist is going to show up and say, I can get this thing to 70 bucks by just telling the CEO, if he doesn't start acting like a fucking grown up, I'm going to boot him and the board. I'm going to come after him and the board.

• 1:10:35Scott Galloway?

  I haven't looked at the class structure of the shares yet. I don't know if it's a two class share company or if Phil Knight still controls it. But this is a 70, this is a 70 to $80 stock if there's just an adult in the room.

• 1:10:47Ed Elson?

  Time to get our activist hats on, time to launch a takeover, a hostile takeover. Gateway computer, that's what I'll, that's what I'll say to you as we end this.

• 1:10:56Scott Galloway?

  Gateway, my, my weakest flex in history. Well, I was on the board of Gateway Computer.

• 1:11:03Ed Elson?

  And, and you were the number one show on CNN plus for the few weeks that it existed. So that's the other.

• 1:11:09Scott Galloway?

  That's right.

• 1:11:09Ed Elson?

  That's the other brag. Okay. Let's take a look at the week ahead. We will see the minutes from the Federal Reserve's last meeting. We'll also see inflation data from the personal consumption expenditures index for February, and also the consumer price index for March. Scott, any predictions?

• 1:11:25Scott Galloway?

  I've already made it and I've made it over and over. Activist Nike, adult in the room.

• 1:11:30Ed Elson?

  80 bucks. We're at 45. What do you say? 70, 80? What's your target?

• 1:11:35Scott Galloway?

  It depends if, you know, when they put the crack pipe down and acknowledge and they look in the mirror and go, oh, wow. Sucks to be a grown up. I need to be a grown up. I'm going to keep revenues flat. I'm going to cut costs. Four to 6% a year for the next, um, three years. I'm going to increase EBITDA easy, double, low double digits every year.

• 1:12:00Ed Elson?

  This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our video editor is Jorge Carty. Our research team is Dan Shlon, Isabel Kinsel, Chris Nudonhu and Mia Silverio. Jake McPherson is our social producer. Drew Burrows is our technical director and Catherine Dillon is our executive producer. Thank you for listening to Property Markets from Property Media. If you like. That's what you heard. Give us a follow and tune in tomorrow for a fresh take on markets.

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