Welcome back everyone. Today on the Joseph Carlson
Show, investors just got to see some of the latest and greatest
in technology with Nvidias new presentation at CES.
CES is where they go to Vegas and they share what they've been
working on and that's what Jensen Wong did.
He revealed some incredible technology.
The new GeForce GPU's are insane.
The 5070 for example, one of their graphics cards, it's only
$500 is more powerful than the 4090, which was $2000.
The leap in technology is incredible and all of this is
being driven by artificial intelligence.
Jensen Wong mentioned some things that are very important
in this presentation. He mentions how not only are the
calculations faster, but also they're doing an entirely new
way of doing graphics cards in general.
Instead of just doing raw calculations, they're now doing
predictive calculations, which are driven by artificial
intelligence. What he showed off in this
presentation was incredible. But regardless of that, the
stock price is down. It's down big today, 5%.
And Nvidia's not the only AI stock that's dropping today.
We also have Palantir, the AI stock itself, down 6%.
We also have Tesla in similar fashion, down 4% more than the
rest of the market. So what is going on with these
AI companies? Is the AI trade already over?
The short answer, of course, is no, but we're going to be
looking at it in more detail today.
Now, we also have news that one of the companies I've been
buying into this is in the passive income portfolio.
It's one of the most significant trades I've made over the past
three months and that is buying into ASMLASML is in the tech
category. Here we go into this, we see it
right there. It is now a $22,000 position.
I bought another $11,000 of ASML on the 3rd.
But what happened after those two buys and making a video
presentation on this is this stock jumped.
Yesterday, ASML stock was up 9%. On the year, it's up 8.72%.
So why did ASML stock price jump right after I bought the
company? Is it just because I'm really
good at timing dips and I know right when to buy into the
bottom? Is it because I made a video
about it and that video got a lot of views?
It convinced a bunch of people to buy the stock?
Or is there an entirely unrelated reason to the stock
going up? We're going to be looking at the
specific instance of ASML and the real reason the stock went
up, as well as the whole idea of timing the bottom and companies
and what I truly use as a measurement of my success in the
thesis of a stock. We'll be going over all of that
in this episode. Now, of course, we have some
other related news that Uber's teaming up with NVIDIA, Meta is
joining the Trump train. We're seeing a lot of
indications that Mark Zuckerberg is expertly pivoting his company
to get on the new administration's good side, and
we have Disney squeezing out yet another company.
This time it's Fubo. We're going to, we'll be taking
a look at the past, at how Disney made this acquisition of
Fubo and what they did to twist the rest of this company.
So obviously we have a lot to get doing this episode.
Let's go ahead and jump into the main story here, which is
Nvidia's new CES presentation where they unveiled all the
things they've been working on, showing off the incredible
progress Nvidia's made. Now of course, with this type of
presentation with Jensen Wong leading it, it wouldn't be a a
true tech presentation with Jensen without some type of kind
of nerdy, awkward, funny bits to it.
This is one of the things he did.
Let's just go ahead and take a listen here.
Wait for it, wait for it. I thought I was worthy.
Apparently Yoner didn't think I was worthy.
All right, there you go. That's the type of thing that
you missed if you weren't at CES.
Is Jensen Wong pretending like he was Captain America there?
I think trying to to act like he's going to catch Thor's
hammer, but really what he has there is the most advanced chips
in the world. So you might make fun of him for
being a bit of a nerd. That's OK because he's worth
hundreds of billions of dollars and he's making the most
advanced technology in the world.
Nvidia's presentation overall was impressive.
There's no other way to say it. They're creating stuff that no
one else is right now. Their newest line of G Force
GPU's, for example, they're commonly used in gaming setups
and for Bitcoin mining, all different applications.
They're also used heavily for artificial intelligence.
But these new GPUs, the level of progress is incredible.
For example, he now says that the 5070, which is the lower end
of this new line, is performing better than the 4090, which is
the very highest end of the previous line.
So now the the low end of the new chips outperforms the very
highest end of the old chips. And of course, the highest end
of the new chips has double the performance of the highest end
of the old chips. So the performance leaps are
doubling and tripling and quadrupling in performance in
just a two year period. It's really incredible to see.
In the presentation, he also talked a lot about specific
chips for different purposes. These purpose built chips are
for all different industries that NVIDIA personally believes
are going to grow substantially in the future.
So they're basically picking out different industries and then
creating chips specific to those industries that they believe
will have rapid growth that's dependent on the chips they're
building. For example, Nvidia's launching
an update to its GeForce GPU's, short for Graphics Processing
units, which were created with the same Blackwell design that
the company uses for its AI accelerators.
So now the AI accelerator GPU's are being used for gaming.
This is a whole new way of doing gaming, and they explain it
further here. New GE Force 50 series cards
will take advantage of Blackwell's capabilities to
create even more realistic experiences for computer gamers.
While traditional graphics chips build an image by calculating
the shade of each pixel in a picture, the new technology will
learn more heavily on AI to anticipate what the next frame
should look like. So what they're doing here in
the way that they explain this is actually incredible.
They're basically changing the entire way that GPUs work.
The old GPUs, like the 4090 for example, just does raw
calculations super fast. So it's doing a ton of math and
it calculates everything frame by frame.
So every pixel you see, all of that's calculated frame by
frame. The new chips in this fifty line
instead use artificial intelligence, the type of LLM
way of doing things where it takes all this information and
then it redicts what's going to happen next and only calculates
that O it can kind of narrow the scoe of what it's working on
because it's now predictive. That's an entirely new way of
redesigning how these chips work.
So they're not just making them faster, but they're also just
changing the way they work all together.
And that new way of doing things is a lot faster.
G force allowed AI to reach the masses.
Now AI is coming home to G force.
So these are truly AI LED G force chips.
Now you get into the numbers here and again they highlight
that their flagship, the 5090 model is the highest end of
their chip and that's going to be available for $2000, which is
the price of the 4090 just like a year ago.
So the price is not really going up for these, but the demand is
is crazy because these are so much more powerful.
The RTX 5070 is going to cost less than $600.00 and it's going
to have better performance than the prior ranges top end model.
So the RTX 5070 being faster than the 4090 is truly a feat
that's astonishing. Now these GPUs of course, are
focused primarily on gaming, which is becoming a smaller and
smaller portion of Nvidia's business.
For example, Bloomberg highlights that gaming now is
only an $11 billion revenue portion of the company.
The other parts, which are like cars and different things are
3.8 billion, but the data centers are now $113 billion.
So gaming is about 10%, maybe a little bit less than 10% of
their total revenue. When we break this down, we can
see it clear on Qualtrim. This just shows you the
evolution of of NVIDIA overall. If we look at just the revenue,
you can't really see it here. You just see everything growing
all at once. We break it down by revenue
lines. We see this more clearly when we
cross out the very small segments like the professional
visualization and automotive. We get to the two main ones,
gaming and data centers. That's what forms NVIDIA now.
Again, right now, gaming is a very small portion, around 10%
of the total revenue. But if you go back to just 2022,
so we're going back two years, 2 1/2 years IN2022Q1, gaming was
bigger than data centers. So it was around 60% of revenue
at the time. And that highlights the
incredible growth of the data center business, going from $15
billion in revenue up to $100 billion.
The fact that NVIDIA went from having their gaming be 50% of
their revenue to now 10% shows the incredible growth of their
data center business. Bloomberg is correct in saying
that Nvidia's data center business now dominates its
overall business. It is basically the company at
this point. And although that's a great
thing, when you look at that, of course NVIDIA and everyone has
to be thrilled that they've grown this data center business
to exponential size in only a couple years.
But it also kind of creates an issue.
It's not good for a company to be heavily reliant on one niche
revenue stream. That could change in the future,
even though it doesn't look like it's changing anytime soon.
Being so reliant on just data centers is probably something
that NVIDIA wants to change, and it looks like they're starting
to do that. They recognize that they have
all of this revenue concentrated into one segment and they're
trying to diversify out of it, and they outline different ways
they're doing this, primarily through robotics and cars.
Wang announced that Toyota, the world's biggest vehicle maker,
is now a customer of Nvidia's autonomous driving AI products
and will use it's drive chips for software.
They said that extending AI into more of the physical world will
transform the industry 50 trillion.
But the move will also bring challenges.
Robotics and cars will require software that can handle real
life complexities in a Safeway. The company has created NVIDIA
Cosmos to help make a robot smarter and produce fully
autonomous vehicles. So now NVIDIA is trying to get
into the software game. They don't just want to be a
hardware seller and a hardware vendor.
They want to create the accompanying software that's
more similar to Apple. This is the best decision that
NVIDIA can do is continually diversify away from their data
center business by going into other territories and matching
that with software. Cosmos technology is able to
create video from input such as text.
The video then becomes the basis for virtual training, helping
reduce dependency on expensive and time consuming real life
experimentation. For example, the generated video
can be searched and honed so the important but infrequent events
such as a cars encounter with an emergency vehicle can be tested
repeatedly. So basically what they're doing
is right now you have, Tesla is basically the only big full self
driving company that sees millions and millions of these
outlier events. Tesla has so many vehicles on
the road that they have data for running into an emergency
vehicle or different unique edge cases.
But Nvidia's saying, hey, with our chip, you don't need to have
the millions of vehicles on the road.
We can virtually recreate these instances over and over again so
that you can train your data just running into them a few
times. So they're virtually creating
these edge cases to train the AI faster.
NVIDIA is now also partnering with Uber to develop self
driving technology. We see that new story here.
Uber has an entire press release going over this relationship.
The Uber CEO is incredibly smart.
He knows the challenges the company's facing.
He knows that full self driving and robo taxi is going to be a
real thing in the near future and by partnering with NVIDIA,
he's making moves to pre empt this challenge.
By working with NVIDIA, we are confident that we can help super
charge the timeline for safe and scalable autonomous driving
solutions for the industry. Now of course he's not saying
this here, but implied in this is that Uber is going to have
this technology integrated with their application.
They want to have their app be the go to hybrid of both human
drivers and robotaxis. By partnering with NVIDIA,
making the technology more integrated with their company,
they increase their chances of success.
Jensen and NVIDIA have predictions on how this robotaxi
system and selfdriving will roll out.
They say that mass market car makers are going to shift
towards using one computer, an operating system for their
entire model lineup rather than segment systems by class of
vehicle. So they are predicting that
there's going to be a huge operating system for robo taxis
that basically manages everything.
That transition will set the table for a wider use of the
chip designers comprehensive offerings.
To speed that up, NVIDIA has had its products certified by the
government Transportation Safety organizations.
So Nvidia's on top of this, they're getting into these new
evolving revenue streams, trying to diversify away from data
center. Cars are the most specific thing
on the road map right now. It's the thing they're actively
developing. But they also have a longer road
map where they believe after autonomous vehicles, there's
going to be robotics with just humanoid robotics.
And they had an entire line of a different humanoid robotics,
which they believe again, that they can be the go to chip
provider for and the operating system for running these robots.
Now, after hearing all of those exciting plans, seeing that
NVIDIA is making huge progress, they're coming out with real
devices, real technology. They're positioned for all these
secular trends. The stock is still down the day
after this event. And that leaves a lot of
investors confused of what to expect.
Why is the company trading down? And I think a lot of this comes
down to simply expectations. Everyone already knows that
NVIDIA is an incredibly good company.
Everyone is very excited about what they're doing.
So the fact that they're creating incredible stuff is
exciting, but it's a problem of what's already priced into the
company. When I look at NVIDIA right now,
or I look at Palantir, or I look at Tesla, the most exciting
companies in the market today, all of them have a common theme.
They trade at really high valuations.
Tesla's at an almost 100 PE ratio.
Now, of course, PE ratios are short term by nature.
They're not the only way that I would do analysis on a company.
It's not a true form of full valuation, but it does just
signify what you're paying over at least the full 12 months
future. And 93 Ford PE ratio is rather
expensive. It's a very high multiple.
The expectations for Tesla are huge.
We have Palantir, a company trading out of 130 PE ratio.
You can even look at the price to revenue, which is 61 times.
I have a difficult time finding any company in the entire market
that's at a more expensive multiple than Palantir.
So NVIDIA shorthand valuations are not outrageous, but they are
pricing in a very bright future for the company.
And the big thing this company needs to do in order to justify
its current valuation is exceed investors expectations by a wide
margin. And there's some analysts that
believe they can accomplish that.
And Dan Ives is one of them. He believes that NVIDIA once
again will exceed investors expectations.
Yeah. I mean, look, to me, I think
Jenton laid out the strategic vision for the coming years when
we look at robotics, autonomous. I mean, I believe ultimately
those are going to be some of the biggest use cases of AI.
And I think what you saw from NVIDIA last night is they're
they're not just sort of going to be a provider that they're
going to. Play a huge role.
In this sort of vision and obviously tests on the
autonomous side continues to be front and center.
I think this is the next step. I think this is a snapshot of
the future and you you look at it incrementally, you go out in
the next few years. I think St's underestimating
growth by by 2530% which is why I think not just 4 trillion, you
could be looking at 5 trillion mark cap under.
He mentions that he believes the Street, the Wall Street analyst
consensus is off by 20 or 30% over the next year.
If that happened, his prediction is that NVIDIA will go from a $3
trillion company. Now it's 3.47.
So it's a massive company. I believe it's now officially
bigger than Apple once again, or at least it's going back and
forth with Apple. But he thinks it's going to go
to 5 or $6 trillion O the company could essentially double
again a market cap from this point.
That's a very bullish stance on this company.
And to come to these conclusions, you have to have
the same type of stars align that caused NVIDIA to go U in
the first place. So if you believe this company
can continue with its trend of just dominating all the
technology, all the processing, and have all these different
things work together to boost NVIDIA stock, then this could
work out for me. There's just a bit too much that
has to work out to justify the valuation.
Now moving on, we get to the news of ASML.
This stock had a big day yesterday.
The stock was up 9%. I posted about it on Twitter and
this is also a company that I just recently bought into.
About a week or so ago, I bought $10,000 of the stock.
I announced it on my YouTube channel.
In fact, I made a video going over ASML in my bowl case,
Sonnet, observing what I think is going to happen and why I
think it's a good buy. That video got a lot of views,
around 200,000 views. So a lot of attention on that
video on ASML, which I think is great because this is a, a great
company, but I also bought more of the stock a few days later on
the 3rd of this month, I also bought another $11,000 of it,
bringing my total position size to $22,000.
If I look at it now, I go into My Portfolio, we look at the
tech category here. SML is right here, $22,000 and
it's already up 9.3 percent, $1700 in the green.
So after owning it for only a week, this company's up almost
$1700. Now a lot of people commented
that I timed the stock perfectly, that this was buying
the dip at the perfect time. And I must know how to do that
because I did this with ASML and I recently did it again with
Google. That was another one that I
bought and it rocketed up right after buying it.
So people are saying, Joseph, you must know how to time the
dip on these companies or, or you're, you're pumping these
companies, right? I make the video and they do get
a lot of views and that must cause the stock price to go up
10%. But the truth is that neither of
those are correct and I'm sorry to disappoint, but I just want
to come clean here. I want to diffuse some rumors.
I'm not an expert bottom dipping stock timer, and I don't make
quite enough noise to make a company that said $300 billion
market cap surge up 10%. Neither of those are really the
case and I want to explain why. When you do good value
investing, in many cases it looks and appears like you're an
expert at buying the dip or timing a stock when really all
it is is value investing. In the case of Google, this is
one where it was similar to FML. I bought into the company and
almost immediately afterwards, the stock just rocketed up.
Let's take a look at when it was.
So it's three months ago. I bought into it, I think right
here at like 17177. It was right around here.
And then I think it was the next day or a couple days later, I
can't quite remember, the stock went up like 10%, went from 170
up to 196. Lot of people saying that that
was expert timing. Now, the reason why in this case
was because Google had a spree of announcements, the first one
being that they invented a supercomputer or they made a
huge breakthrough with a supercomputer, got investors
very excited. So the stock rocketed up right
after my purchase with ASML. Very similar type of event
occurred. I bought into the company just a
week ago. I made a big video on it.
I bought more of it and then just a bit after.
If we look at it over the past week, it went from $714.00 up to
768. So went up 9%.
Now, the reason the smell jumped was because of a combination of
news. There was a report that Foxconn,
the chip maker, was doing much better than expected.
They have much more demand than expected since ASML works with
the lithography chip making that caused the stock to surge
upwards. And there's the news that
Microsoft announced that they were going to spend $80 billion
on AI data centers next year, or rather, in 2025.
So the combination of this really bullish news on chip
making caused ASML stock to jump.
So in both cases, it appears as though I timed the stock
perfectly with each of these buys.
But that's really not the case at all.
I didn't know when I bought Google that they were going to
announce they had a supercomputer breakthrough.
That wasn't knowledge that I had.
The reason that I bought Google on that dip was because Google
is a great company trading at a low valuation with a very bright
future, and it had negative sentiment.
The fact that there was some good news afterwards that caused
the stock to jump up, although was fortunate timing.
It shouldn't have been unexpected.
And this is the case in point that I want to make with buying
the dips and timing the bottom of stocks.
The way that I look at it is it's not so much timing the
bottom or trying to time exactly when the stock is going to jump
up in the future. It's more so identifying high
quality companies and buying them when there's negative
sentiment, when there's temporary issues.
When you buy companies that are incredibly high quality, that
generate immense amount of cash flows, that have very bright
futures with secular positive trends and they're trading with
a lot of negative sentiment, it's only a matter of time until
some news comes along and bumps up the stock price.
That news coming along and bumping up the stock price is
eventually what makes it look like you time the dip when in
reality you just bought good companies on a dip and waited.
That's all I'm doing in these situations.
So whether I'm buying Salesforce or Booking or FML or Google, I'm
buying these companies specifically when they have
negative sentiment, when investors aren't focused on
them, when they believe that these companies for one reason
or another are not the buy today.
That's when you buy into these companies.
When the valuation is low, the sentiment is negative, but the
true fundamentals of the company are very strong.
I load up on a position during those time periods and then I
just wait. In some cases, the stock will go
down a little bit further and that's fine, but eventually if
you buy a high quality company at a depressed price point, it's
only a matter of time until there's some catalyst that comes
along. The combination of low valuation
and high quality creates an environment where any positive
news whatsoever will result in a big stock price jump.
And that's the case with Google depressed stock price.
So any positive news caused the lift.
That's the case with FML. It was at a depressed stock
price. It's been trending down for the
past six months. Any positive news is going to
cause a big boost. So these are instances with
these companies where what appears like market timing or
timing the dip in these companies is really just value
investing, buying the highest quality assets when opportunity
presents, and then waiting patiently for different
catalysts to breathe new light and new sentiment into the
stock. If you do this with any company
and you can literally name off any high quality company, if you
did it with Meta, you made huge gains.
If you did it with Netflix, you made huge gains.
If you did it with Amazon, you made huge gains.
Buying the best companies during negative sentiment is a winning
strategy. So I'm sorry to those that think
that I can perfectly time the dip and I can time the bottom of
stocks. I can't.
And I'm also sorry to those that think that I can move the market
cap of a $300 billion company. That's very difficult to do.
I don't think that my videos are really moving the market cap of
these companies in any meaningful way.
And in fact, even with stocks going up soon after buying, I
don't consider that investment success.
If a company just goes up because of positive news, that's
fun and it's exciting to celebrate.
But ultimately the way that I determine success of any of my
investments is the free cash flow per share growth.
I want to buy companies that can meaningfully grow their free
cash flow per share over long periods of time, that can grow
their earnings per share over long periods of time.
For example, if I look at Texas Roadhouse, if this stock just
went up because investors bought it and the multiples expanded, I
would not consider that a successful investment even
though I've made gains. The reason that I consider Texas
Roadhouse a successful investment is because I bought a
company that grew its earnings per share dramatically, creating
real value fundamentally for investors.
I bought it here and it's doubled in its earnings per
share. That is investing success.
So with ASML, I'm not going to be looking for quick stock price
jumps as a measurement of my success.
I'll be looking at the free cash flow per share of this company
over the next three years and seeing how much it grows.
If it stays flat or if it goes down, that's going to be a
failed investment. But if the free cash flow per
share grows dramatically above 20% per year, I'll consider this
a successful investment regardless of the stock price.
Now moving on, we get to some breaking news that Mark
Zuckerberg and Meta seem to be fully joining the Trump train.
They're now realigning their business to be more in line with
the new administration. This headline from the Wall
Street Journal highlights just a part of it.
Meta is ending their fact checking on Facebook, Instagram,
in a free speech pitch. So they're no longer going to be
the arbiters of truth where Meta designated this group of people
that can determine what stays on the platform and what doesn't.
Now, this was a point of criticism for the past couple of
years. In fact, Donald Trump said that
it was election interference because it was under the guise
of fact checking. But in many cases, it seemed as
though they were just censoring different pieces of information.
For example, criticisms towards the medical field during COVID
in 2020 or different political discussions that had right
leanings. In fact, the most critical part
of the criticism was the acknowledgement from Mark
Zuckerberg a year ago that they were pressured from the Biden
administration to delete specific posts.
So they're doing the bidding of the central government.
Now we're seeing a transition here.
We're seeing Meta realign themselves, and Mark Zuckerberg
himself explains the change here.
Hey everyone, I want to talk about something important today
because it's time to get back to our roots around free
expression. On Facebook and Instagram, I
started building social media to give people a voice.
I gave a speech at Georgetown five years ago about the
importance of protecting free expression, and I still believe
this today. But a lot has happened over the
last several years. There's been widespread debate
about potential harms from online content.
Governments and legacy media have pushed to censor more and
more. A lot of this is clearly
political, but there's also a lot of legitimately bad stuff
out there. Drugs, terrorism, Child
Exploitation. These are things that we take
very seriously, and I want to make sure that we handle
responsibly. So we built a lot of complex
systems to moderate content. But the problem with complex
systems is they make mistakes. Even if they accidentally censor
just 1% of posts, that's millions of people, and we've
reached a point where it's just too many mistakes and too much
censorship. The recent elections also feel
like a cultural tipping point towards once again prioritizing
speech. So we're going to get back to
our roots and focus on reducing mistakes, simplifying our
policies, and restoring free expression on our platforms.
You'll notice that he references the elections in A Tipping point
on free speech, and I'll have more to say on that in just a
minute. More specifically, here's what
we're going to do. First, we're going to get rid of
fact checkers and replace them with community notes similar to
X, starting in the US. After Trump first got elected in
2016, the legacy media wrote non-stop about how
misinformation was a threat to democracy.
We tried in good faith to address those concerns without
becoming the arbiters of truth, but the fact checkers have just
been too politically biased and have destroyed more trust than
they've created, especially in the US.
So over the next couple of months, we're going to phase in
a more comprehensive community notes system.
Now Zuck continues on explaining all the different ways they're
improving the content moderation in favor of free speech,
modeling it after Elon Musk's Twitter or X.
But what is Mark Zuckerberg really doing here?
What changes is he really making?
What he's doing is he's turning a powerful enemy into a friend,
a powerful adversary into an advocate.
Donald Trump so far has been incredibly critical of Meta,
even saying that some of the things that they've done and
some of the things that Mark Zuckerberg has done should lead
him in jail if he does again, because he calls it election
interference. But now Trump is becoming more
complimentary of Meta and the changes that they've made.
And Mark Zuckerberg has successfully made this pivot
from getting his company out of criticism from the central
government. And one of the most impressive
ways that I've seen, another thing that he's done to make
friends with Donald Trump and the new administration to get
his companies out of the crosshairs is to bring Dana
White from the UFC onto the board of directors from Meta.
So now Dana White from the Ultimate Fighting Championship
joins Meta's board. This is such a smart move.
He's befriended Dana White to the point where now he's willing
to accept this executive board seat.
Dana White is one of Donald Trump's biggest supporters.
He spoke at his convention rally.
And Dana White is also a uniquely great pick for the
board seat because unlike many people in these positions that
are influenced by money, Dana White is not.
He's at a point where he cannot be bought.
I truly believe that he's not someone that's going to be
influenced by money to compromise his principles.
He will tell anyone and he sponsor anything in very harsh
terms to go away before he's influenced by them.
So he's someone that sticks firmly to his principles.
Now, he's a key figure in being on the board of Meta and being a
close ally with Trump. So Meta investors should be very
happy with how Mark Zuckerberg was able to expertly pull off
this political pivot. Now, next we get to news that
Disney has bought yet another TV media asset and this time it's a
beaten down company called Fubo. Fubo is an Internet TV provider
that focuses on sports. They have a lot of sports
statistics as you're watching the games.
And it's been a struggling company.
In fact, the stock is down like 90% from its highs.
It's really gone through a lot. And part of the reason it's down
so much is Disney. But now Disney will become the
majority owner of Fubo with a 70% ownership stake.
Fubo shareholders will own the remaining 30% of the company.
The deal is expected to close in the next 12 to 18 months.
Now, big companies buying smaller struggling companies is
nothing new. But how did Disney get into this
position? How are they able to pick up
Fubo for a really cheap price? 10 months ago, the Fubo CEO went
on to CNBC to explain what Disney was doing to their
company. You know it's.
It's pretty simple. 10 years ago, or roughly 10 years ago, we
set off on a path to create an affordable alternative to cable,
a skinny bundle around sports. And for the last nine years,
we've been blocked from doing so.
This sports cartel has used different tactics.
They use their marketing power, market power to impose bundling
of channels that obviously don't fit, you know, the bundle that
we were looking to build. And that has led to, you know,
hundreds of millions of dollars of, of costs related to that,
which has been become a tax, a heavy tax and burden on
customers. They have forced us to pay
egregious licensing fees in the order of 30 to 50% plus above
market. They force us to include all
channels in our basic bundle. We call that penetration rates
and our penetration rate is around 100% for most of the
content and then they also have. You know what I would.
Describe as tyrannical contractual terms that really
limit our ability to create, you know, different packages and
product features that are in line with, you know, some of
their offerings such as Hulu. So all in this has really
created a difficult situation not only for us but for
customers at large. I mean, this makes you know,
junk fees look like a walk in the park, so.
Ten months ago, the Fubo CEO referred to Disney and other
cable TV companies as the cartel that imposed tyrannical
contracts on them, forcing them to bundle a huge tax on their
customers. That's the way that they were
describing the company. But Disney continued to beat
down Fubo, causing the stock price to decline and decline by
forcing them with these huge bundles until Disney could
consume them. And that's what you're seeing
happen here. Now, Disney owns 70% of the
company. After this latest agreement,
Fubo's getting a little stock surge up to around $5 per share.
But ultimately, this is going to be Disney taking over one of
their competitors through the ways that they know how.
But ultimately, I don't believe this is going to have much of an
impact on Disney or the media landscape.
These bundles and acquisitions and consolidation have been
happening for years, and this one likely doesn't move the
needle. That's going to be it for this
episode. Hope you enjoyed.
See you in the next one.