Wall Street Unplugged
February 2, 2022

After 12 years… numbers finally matter

Earnings season is underway… and after more than a decade, the results actually seem to matter to investors. [0:48]

Shares of Netflix (NFLX) are moving higher on strong earnings and huge insider buying. Daniel and I give our take on co-CEO Reed Hastings’ “perfect timing” in scooping up shares… and whether Netflix will be able to maintain its dominant position as competition in the streaming space heats up. [2:14]

UPS (UPS) is also moving to the upside after reporting blowout numbers, despite seeing higher costs in the quarter. I explain why, despite the rise in its stock price, the company is still trading at a reasonable valuation. [10:00]

Daniel takes a small victory lap as his Dollar Stock Club recommendation, ExxonMobil (XOM), trades near 52-week highs following earnings. (It’s up about 30% in the portfolio.) He breaks down how the push to “green energy” will actually drive oil higher… and ExxonMobil will continue to benefit. [13:56]

Joe Rogan is sparking a heated debate over COVID “information” on Spotify, with artists pulling their music from the platform. I give my take on the drama… and whether Spotify (SPOT) is a buy at current levels given the negative press. [21:25]

Turning to crypto, Meta Platforms (FB)—formerly Facebook—is ending its Diem stablecoin efforts… and selling the assets to Silvergate Capital (SI). I highlight why I love this move by Meta… and Daniel shares why it’s great for Silvergate. [31:50]

Inside this episode:
  • Earnings finally matter to investors [0:48]
  • Can NFLX maintain its dominant position in streaming? [2:14]
  • Despite its rise, UPS is trading at a reasonable valuation [10:00]
  • “Green energy” will drive oil higher… and XOM will benefit [13:56]
  • Is SPOT a buy amid Joe Rogan’s COVID drama? [21:25]
  • FB’s move to end the Diem stablecoin is great for SI [31:50]
Transcript

Wall Street Unplugged | 850

After 12 years… numbers finally matter

Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on main street.

Frank Curzio: What’s going on, peeps? It’s February 2nd. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break down the headlines and, Daniel, you want to finish that for me?

Daniel Creech: No.

Frank Curzio: Tell you what’s really moving these markets.

Daniel Creech: When I filled in, I was like, “I got to get away from this. I got to twist this intro a little bit.” That’s you. That’s all you.

Frank Curzio: Oh, that’s funny. What’s going on? We got Daniel here today to talk about the latest news going on in the markets, lots and lots of news. We saw the market really sell off early on, a lot of garbage names are still doing tremendously, but you’re seeing a lot of names bounce back, right Daniel? It is earning season, awesome. Hearing those comments about supply chains, it’s impacting some companies, others, not so much like a UPS. But Daniel, what I get excited so far, because a lot of news come out past couple days on some big name stocks, and you’re going to continue to see that over the next couple weeks. I can’t stress this enough how important it is to listen to these conference calls, not even if you own UPS or FedEx or whatever.

Frank Curzio: It’s listening to the supply chain bottlenecks, are they able to raise prices effectively? They’ll talk about global, they’ll talk about so many different demographics, different markets. You get so many ideas, and it gives just perspective of what I’m seeing right now is, not everyone’s impacted by the supply chain issues.

Frank Curzio: Some of them are getting it done. Apple’s getting it done. You look at semiconductor companies, there’s several that are getting it done. The F5 warned supply chain, GE warned, yet UPS, fantastic. Right?

Frank Curzio: It seems, it’s not across the board. It’s impacted Tesla warned for the first time about supply chain issue, which is amazing, which kind of tell you what the hell’s going to go on with the rest suppliers who are… What is it like 50 EVs expected to be launched this year, and everyone’s like, “Oh, you could buy it in,” taking orders. How the hell are they going to produce this shit? How that many coming out to the point where Tesla just said, “We’re not producing any brand new models this year, because we can’t, because of the chip supply.” What does that say for everyone else who’s producing brand new models? A lot of stuff going on, right Daniel? It’s pretty interesting. I don’t know, where do you want to start? We can’t even start with Netflix if you want, right?

Daniel Creech: Yeah. That would be good. It’s really continued its rally from last week, and I wonder, it’s funny you bring up Netflix. I wonder if the argument in EVs where Reed Hasting, CEO, co-CEO of Netflix, has been saying for years and finally admitted the most previous conference call about… Joked about competition is a good thing. You’re not worried about competition. In the latest quarter, he said, “Hey, we are seeing some market share decline or just more competition from them on market share, which is positive.” It’ll be interesting to see how that equates to the EV market, but Netflix sold off real hard. Got absolutely crushed after its earnings a few weeks ago, but then Bill Ackman, Perishing Square Capital, gobbled up over three million shares followed by an insider by of co-CEO, Reed Hastings bought 20 million worth, $20 million worth.

Daniel Creech: Now, let’s put that in perspective. I don’t want to shrug that off, but you always like to point out, “Hey, when you see insiders like directors or whatever, sometimes those are funds or major players, but CEOs buy great.” 20 million is a huge amount. Even if he’s worth, I mean, I’m sure he’s just a gazillionaire, but you got to be cautious with all the money-

Frank Curzio: It’s a billion dollar position though, right?

Daniel Creech: What’s that?

Frank Curzio: It’s a billion dollar position, right? Could he buy three million shares?

Daniel Creech: Well, that’s Bill Ackman. I was talking about the CEO.

Frank Curzio: Oh, the CEO.

Daniel Creech: He got 20 million worth.

Frank Curzio: Yeah. Hastings. Yeah.

Daniel Creech: That’s $20 million worth. I mean, even if you got a ton, that’s a lot. Just keep that in perspective. But man, that stock has rallied. And the bigger picture to me, I really don’t have an opinion on Netflix. I’ve never dug into it extensively. I’ve never, it’s great, but it just doesn’t get my attention for whatever reason. What gets my attention is that when you have volatility, Frank, and the narrative changes from just growth. I mean, Netflix is in a new position now, it’s got pricing power, it’s raised pricing. We’ll see how that goes in the future as equates to earnings. But now, instead of just growth and pay for content at all cost, they’re going to manage 10 billion in debt, they’re have earnings, their trading. I think their forward PE is close to 40-ish, which is high, of course, but the narrative is changing.

Daniel Creech: You see these value guys like Ackman come in. It just shows you that, “Hey, volatility, it’s easier said than done.” I’m not acting like I know it all, but when you have major market pullbacks and stocks like this, Frank, and we’re going into the stock pickers market, don’t be afraid to follow the big guys. Use this as an example to go down that rabbit hole if this interests you. It’s just good to see that when you have pullbacks the sky isn’t falling all the time and people are willing to step up in a big way and make some big purchases.

Frank Curzio: You know what amazes me here is, I mean, Netflix oversold, but we’re looking at February 2nd, today. Okay. Let’s go through the timeline here, which is funny, because you saw these guys report on the 21st January, not too long ago. They report horrible quarter, their guidance was terrible, so much, much less ads are expected. They had Reed Hastings goes on there, probably the most negative I’ve ever seen Reed Hastings covering for probably about 15 years on conference calls and stuff saying that competition’s a big deal, we don’t know why he had the acquisitions. It’s a bit slower than pre-COVID levels.

Frank Curzio: The engagement and viewings is up, but the acquisition growing a bit slower than pre-COVID levels, not having fully recovered. But he paints this whole entire picture almost like his tail between his legs. Like I said, he is the most competitive guy in the world. I mean, if there’s any way to really get your stock down, because everyone, after that quarter, Dan was saying, “Does everything need to be reset? Is this industry done growing? We’re seeing it’s getting much, much more difficult to have pricing power. Everybody has streaming, the whole entire whole media platform, everybody has streaming platform right now.” He painted this picture.

Frank Curzio: I’m just saying, “I’m not a conspiracy theorist, and I love Reed Hastings.” I think he’s fantastic, but if I wanted to buy $20 million worth of stock, this is how you do it. You come in on the conference call, the most positive guy in the world, kind of with your tail between his legs, and then boom, what happens? You see Pershing Square is taking a big fricking position in it. Then you see him buy $20 million worth, and now the stock is taking off again.

Frank Curzio: Look, Netflix is the greatest streaming company in the world. There’s nobody even close. There’s not even a second or third. There’s nobody even near them. The content that they have, how they have so many actors, there’s not one actor and actress ever says anything bad. At the top in the world, all want to work for Netflix. They all make a fortune, they all do great. He has it almost on lockdown. People all want to go to Netflix right now. I remember back in the day they were pissed and the online streaming platforms, the actors were freaking going up to the award shows and be like, “Oh, this is bullshit,” and they complain about reality shows first, because people didn’t have to get paid.

Frank Curzio: They didn’t pay these reality shows and all this bullshit and networks were making more money. All this garbage has been through, but to see where he is right now and all these actors and actresses is if you look at, whatever, the biggest draws. You can say, it’s Adam Sandler, that’s Nicole Kidman, that’s Reese Witherspoon, all of them. I mean it’s amazing. I mean, Ozarks just on that platform, which was just fantastic. It’s always new content, they get it, it’s easy to use, people love it. They’ll never cancel it, and you have pricing power.

Frank Curzio: So for me, I think this… Hey look, the stock is doing well. It’s been all over the place. If you have stop losses, you probably stopped out here and there, and I get it and I understand it now, you’re seeing this news on it, but it’s always nice when basically the largest individual shareholder in the sea of the company is really, really buying a ton of this when you would think Reed Hastings might want to sell out of his position, because, “Hey, I’ve been doing it for a while. Let me transition, start selling shares.” For him to buy that much right now, I told you he’s more competitive than ever.

Frank Curzio: It is interesting to see this trend, but those insider buys and Pershing Square coming in at these levels and how much it’s sold off is pretty incredible. It really is pretty incredible. And you use as a buying up to, let’s see where it goes from here, but it’s just interesting. Like, that’s the playbook. You have a publicly traded company and you really want to buy your stock? This is how you do it. All right. It’s already down, you come with this quota, then you wreck it at the bottom. And now, you’re able to buy, which I guess is tough, because a lot of people got killed. But that’s how you do it. Right?

Daniel Creech: It comes to mind and this is frustrating, because we recently stopped out of that in Dollar Stock-

Frank Curzio: It is.

Daniel Creech: Totally unrelated to… I mean, we recommended that a little ways back and we’re bouncing around, but just got caught up in the real massive sell off.

Frank Curzio: Yeah.

Daniel Creech: What comes to mind when you brought that up? Not that you’re saying he did it on purpose, but that is kind of funny to put two and two together on talking down your stock and then buying it. But remember when Ackman speaking of these two teaming up or not teaming up, not saying that they were doing anything, but remember Ackman going on and the coronavirus lockdowns and almost coming to tears about how everything’s just going to melt down. And then it came out that he had puts. He was on fast money, I think.

Frank Curzio: Yeah.

Daniel Creech: And I mean, he’s taken and he turned around and he cashed that out and bought some huge long position. But anyway, it does point to a playbook like that, Frank you’re right. Sorry, the takeaway there is take everything with a grain of salt. When Ackman was crying on TV, that wasn’t the end of the world. That was a good positioning, repositioning-

Frank Curzio: Yeah.

Daniel Creech: And or money rotation. Let’s put it that way.

Frank Curzio: And just for Bill Ackman circumstance and the tears and everything, whatever it is. But he was right. I mean, he played his position, right. I’m not talking about his position, but he was right in terms of the market, like people could say, “Well, I knew it was a buying opportunity.” You know what? You didn’t know it was a buying opportunity, because I didn’t think it was a buying opportunity either, because I had no idea from government would spend 10 and a half trillion to inflate this market and say, “Okay, we’re giving everybody loans. We’re giving anything, anybody wants, here you go. Free check…” Like, nobody anticipated that. Okay. Maybe a trillion. All right. they went nuts. It was just, okay, this is going to end. It’s going to get better. They’re going to reopen things. And now, you have also quit the market, no surprise that you have inflation here.

Frank Curzio: But if they did not do that, holy cow, I mean, you’re seeing a totally different landscape today. Then, where stocks have rallied over the past couple years… And again, crazy start to the year, it’s coming back a little bit, but man, just the tears and everything. It is a playbook and it’s kind of funny, but let’s go into UPS Daniel, because UPS blew out the numbers. Guidance was good. And you’re looking at the stock really taking off today, yesterday and just a few things here. Okay. So UPS said, and this right, they’ll have direct links. These are the guys that know the most. These guys at railroads at FedEx. They’re going to know the most about supply chain issues, right? Since they’re delivering stuff and knows a ton of this, right.

Frank Curzio: I have a relationship with all trucks. So they said, “JB hunt and Kirby noted that it’s tough to hire people for trucking and labor and stuff like that.” Supply chain issues again, staffing issues, supply chain jams, logistics. Yeah. Union Pacific, come out and say the same thing. But UPS blew out these numbers, blew them out, and they did it telling them that we are still seeing very, very big supply chain issues. What happens if that clears up? Where do you think FedEx and UPS are going to go then?

Daniel Creech: Yeah, absolutely. I mean, you talk about a massive tailwind. This is just, Frank’s talked about this, not talked about you, like you’re not in the room, Frank talking to the audience here. You talked about how this is transitioning into a stock pickers market. When not everything, a rising tide lifts, all boats and things of that nature. The execution on the management side here is amazing. Yeah. Costs rose were about 8%, 9%. I think it was a little eight point something overall, which is significant, right? Your bottom line, your cost going up almost double digits. That’s a lot. But the way they manage that, they’re cutting, not corners, but cutting costs where they can, their margins are staying strong and they have pricing power. I mean, their price per packages is rising and they continue to see that going forward. I’ve never really dug into this stock.

Daniel Creech: I just have to highlight, you got to give credit where credit is due and that management team, along with FedEx, those guys are just amazing. It’s no coincidence, Frank, that you take UPS, FedEx in the United States postal office. And it’s just a coincidence that one of them loses billions while the other two make billions, won’t go there. Just highlighting the importance of management and execution. So, if I had a hat on, I would definitely tip it to them. The stock was up 14%, last time I looked on Tuesday. That’s incredible Frank. So yeah, just great job on management and execution and what investors need to pay attention to.

Frank Curzio: Yeah. And they also hiked a dividend by 50% and have a yield of 2.7%, which is probably about 2.5 now instead of four, whatever it is. But it’s interesting to see where these things are trading. So, you look at UPS clearly growing pricing power, cash flow to the roof, you see margins explode. And this is what happens when you have a company that reduces expenses. And then, business comes back tremendously. Now your expenses are low and business is booming and you guys see it with the next company. We’re going to talk about Exxon in a minute. But if you look at UPS right now, they’re trading at just 18 times forward earnings to below the market, multiple, which is surprising. But if you look at FedEx, FedEx is trading at 12 times forward earnings, doesn’t mean you would go by FedEx, because it’s cheaper, because you UPS to does have a higher yield.

Frank Curzio: And they’ve raised that dividend by 50%. Companies deserve that premium. So a value vest, don’t be like, “Wow, FedEx is better,” but FedEx is also growing. So in this case, when you look at those numbers, FedEx is also growing at 12 times total earnings. Man, that seems pretty cheap for a company. These guys have pricing power. Like you said, “I wish the post office was just a publicly traded company,” because they could create massive problems for these industry leaders, if it was run correctly. But you’re allowed to run it without worrying about checks and balances. And that’s what the government does. So, they don’t care. But man, I mean just, especially now when you do have pricing power and you go to the post offices, says lines out the doors, people use it, but it’s just the government can’t run a business save its life, because there’s no accountability and you have a blank check and it doesn’t matter how much you lose.

Frank Curzio: That’s just the way it is. So, you give billions, that’s okay. But just both of these names seem pretty cheap here, blowing out the numbers. And both of them have talked about supply chain issues, still getting a little bit easier and easing up a little bit, but not to the point where things are back to normal. But to put up these numbers and saying that we’re still seeing supply chain issues is pretty freaking impressive. Now, we go to ExxonMobil, great earnings. You have to get credit for Exxon and you about-

Daniel Creech: Yeah, speaking of cutting cost and everything else. Absolutely. Go on.

Frank Curzio: No, I was just going to say, Dan, it’s about the time you got one, right man. So, I’m proud of you. That takes-

Daniel Creech: Yeah. Boy, did I need this? Yeah. Thank you for that. Kick me while I’m down. Yes, we need a soundboard, and we need to get Garrett to get us some music or intros, because we can take a victory lap here. This is great, because this proves even greenies those environmentalists and lovable little people that want to get rid of oil and gas like to make money. Because I highlighted and pointed out ExxonMobil, we’ve been bullish on energy for a while. Not caught the biggest move like we should have, you could argue. So, I don’t want to put us up too high, but I did recommend ExxonMobil in The Dollar Stock Club. Granted, you can call me and point me out right here. Drop 10% to 15% right after I recommended it, of course. And this was last June, so it’s a longer trade, but I mentioned that. But Engine Number 1 got board seats and they were going to… They were the activist, the new activist management style that weren’t just after the money and greed like the old days.

Daniel Creech: But no, they were after saving the world and they initiated, and I’ve got to give them credit. So, I like to have some fun here and point at the greenies and things of that nature because overall, they’re responsible for higher oil prices, which Exxon is cashing in on. Frank, take a guess at what they’re lowering their break even on oil to right now, oil’s at $90-ish, a barrel, their breakeven’s around 41.

Frank Curzio: That’s incredible.

Daniel Creech: And it’s going to 35 by 2027.

Frank Curzio: Yeah, that’s incredible.

Daniel Creech: That’s amazing. They’re cutting costs, billions of dollars, three to five billion dollars in cutting costs. They’ve announced. So, where the shares are now, they’re announcing a 10 billion buyback.

Frank Curzio: Mm-hmm.

Daniel Creech: Okay. They are projected and Wall Street consensus, oil is going well over a hundred dollars. JP Morgan has $125 target or potential target on it, later this year. Goldman, a lot of people are over a hundred, because you have this paradigm shift.

Daniel Creech: We’ve been talking a lot about narratives. When you have a political headwind and new rules and implementations going into place about less production overall and higher cost. That’s going to keep the price of oil sustainable. And I know that they’re increasing production in certain areas, but the narrative is, “Hey, we are going to be cleaner and greener and that’s okay, because it’s equating right to the bottom line.” So yeah, it sucks for all you average people like me. Thanks, Joe. I just filled up a half a tank of gas and cost me 30 some. Gas is $3.50 here on the island. Okay. I don’t even know what that’s up over the last couple years. It’s significant.

Frank Curzio: Yep.

Daniel Creech: But my point is that don’t just get upset if don’t like hearing me talk about politics or anything else, but make money off of it. So, the new narrative is higher oil prices, or sustained higher oil prices. You have demand coming back. Southwest just said that leisure travel is back to pre-COVID levels. Although, business travel remains below about 50%. That’s huge for margins on that, but it shows you demand domestically and things like that are coming back. And we’re already at about the same amount of oil demand globally as we were pre-COVID. That is significant when you have in… I could go on and on. Stop me, Frank. This is good.

Frank Curzio: I like it. I like when you take it and-

Daniel Creech: And it cracked $80, right. I think it’s over 80.

Frank Curzio: When Daniel’s wrong, he’s like, “Yeah, I was wrong. Let’s move on.”

Daniel Creech: Yeah.

Frank Curzio: And when you’re right, this is what’s going on. I got this happen. And like I said, nowadays-

Daniel Creech: Hey, I love politics. And I like making money off politics even better. So, that’s why I’m excited about this one.

Frank Curzio: No, that’s fine.

Daniel Creech: Watch it crashed out. Investigations are about to break.

Frank Curzio: A couple of things. Like you said, “This did blow up in the face of the climate change crazies,” which again, however you are in that. I mean, just the fact that this tiny company who has a very, very, I don’t even know, is it $20 million?

Daniel Creech: No, it was more than that, but they’re friends with BlackRock.

Frank Curzio: Yeah. Basically they BlackRock and the trillion dollar companies to all vote, because Exxon is really no insiders that don’t own big positions, they had such a big stock. It’s been around forever that these guys control, right. They have control and voting rights and stuff like that. And they able to change the board, but you want all… Listen, you want alternatives, you want to save deployment. Okay. But you know what? It would be nice if you had those alternatives on standby before making that announcement to stop drilling. And you’re looking at oil, natural gas prices hurting every single American, right. Crushing a lot of people, it’s insane. It really is insane. I will say this about Exxon, what a difference. Right? Compared to 18 months ago, when you’re looking at oil, absolutely crashed through COVID, is one of the most hurt industries, and they got wrecked.

Frank Curzio: But here you look at Exxon where they got kicked out of Dow Jones, they ended its 10 years longest running component listed on that index. They were going to cut the dividend, which I still think they should cut the dividend. They should cut the dividend right now. They’re paying, what is it? A four and a half percent yield. And the dividend is $15 billion. Exxon is a growth company. Cut that in half, make it a 2% yield, use that 7 billion to purchase assets. There’s a lot of, and I said that too, even back a year and a half ago, that they should cut their dividend, cut it. I like what AT&T’s doing. They’re now a growth company with Discovery, and they’re putting more money into content, and their platforms, that’s how they’re going to make money. Yes. It hurts a little bit at the beginning and people like, “Holy shit, you basically a cut and dividend in a half,” but Exxon in this position to purchase assets, they were very, very, very, very late to the share revolution, very late.

Frank Curzio: And it allowed the pioneers EOG Resources to really catch up to these guys, did a ton of research hopped on rigs when all the major share areas and a great video and just learned so much about that industry 2010 and ’11, ’12, but sitting on that war chest and being able to… Yeah, you could use your stock and everything and issue more debt. Even though they’re paying off debt, lots of debt. I think $9 billion in debt is going to be paid off at just this quarter. But I would look to cut that dividend, but they were close to cutting it, because they were getting wrecked. And I think that dividend got as high as like 8%, 9% at one time or 8%. And look, they still pay it. They said, “We’re committed to it.”

Frank Curzio: They’re also implementing a $10 billion stock repurchase program. I mean, the cash coming in 48 billion in cash from operations this year and in fiscal 21-

Daniel Creech: Believe that was the highest since 2012.

Frank Curzio: Yeah. It’s incredible.

Daniel Creech: Yeah.

Frank Curzio: Highest since 2012, and okay, you have the money to pay a dividend. But for me, man, you use 7 billion of that to really, I don’t know. But again, investors might want that dividend. They want that yield and I get it. But man, you’re looking at a growth company with a really, really high yield that could easily pay it, could paid it when getting that cash show number was negative basically two years ago. And these guys are operating on also, it’s a clear, it’s a different landscape. That’s forcing oil prices go nowhere else but higher. As we cut back on drilling, even though we have more oil here where we could become…

Frank Curzio: And we did for a little while, the largest producer in the world, we could be energy independent and now we’re going away from that and going into alternatives. Not that I disagree with alternatives, maybe as much as Daniel here or whatever, but it would be nice to have those alternatives on standby instead of just saying, “This is what we’re going to do,” and you don’t have them and now look, what’s going on. And oil price out of control, gas price are out of control, but Exxon look clear benefit. You get more aggressive in some of the other names, when oil goes higher, commodity goes higher guys. The crappiest names and the most risky names are going to go the highest. And just like on the way down the crappiest names, the shittiest names are going to go much, much lower than the big guys. This is a really nice staple for your portfolio.

Frank Curzio: Good job, Daniel. Picking this was really, really good. So yeah. And talk about oil. It’s great. So, I wanted to talk a little bit more about politics and COVID, and what’s going on right now, because there’s a lot going on with Joe Rogan. And I want to talk about it a little bit, because it is in relation to stocks and how we view the markets and stuff like that. But Joe Rogan had a couple of guys on his podcast and depending on if you’re a Democratic, Republican, you’re like these guys are absolutely morons and crazy, and they’re killing people and spreading misinformation. If y’all on the other side, you’re like these guys have got it, right. Whatever. Right. That’s what they want. Right. They want us to fight and argue. But I think there’s a bigger point here, right? Because you’re seeing artists come off Spotify, Neil Young and others, and say, because we don’t like Joe Rogan on Spotify and spreading false information.

Frank Curzio: He’s talking about Rob Malone and McCall who got kicked off at Twitter and banning these guys for saying that their early opinions, that mass don’t work, which massive amount of stories out right now, that’s even being reported by liberals. Right? Liberal stations. The fire search originated in a Chinese lab. No one’s allowed to say that he got kicked off. Right. We know that’s pretty much a hundred percent of fact. I mean, you knew a hundred percent fact back then when China said, “No, no, you’re not coming into our country. I don’t care.” All you leading scientists know, “Well, we want to help be China, because we never seen anything like…” “Nope, no one’s allowed to come in.” Absolutely not. You can’t come in. You can’t come to Wuhan. Right. Didn’t let anyone in. Ultimate red flag. And if you get vaccinated, and this is when we first got to vaccinations.

Frank Curzio: If you get vaccinated, you don’t have to worry about catching COVID again. You don’t have to worry about anything, you’ll be fine. You don’t have to wear mask anymore. And we know that’s true today. Right? But they got kicked off. Maybe some of their opinions may be a little bit more wild than that, but these are two renowned scientists. But more to the point here, why I bring it up is the fact that Neil Young and a lot of these guys are coming off the platform, because of someone interviewing someone to try to find more information out, to try to get this right, to learn more and to have an opinion, right? I hate a lot of people in our industry that kill the freaking retail investors, and they don’t give a shit about you, and they’ll make money, and tell you they’re great.

Frank Curzio: And the performance been absolutely horrible and terrible. They have every right in America to go on these platforms and say what they want. I mean, not really on the platforms so you can get kicked off, but that’s First Amendment. I mean, here’s with freedom of speech. This is what our country was founded on. This allowed people like Neil Young to express themselves and create their brand and not be held back. And it’s just ironic to me that you’re ragging on someone where you could just disagree with it and say, “Listen, I don’t like these guys,” but saying you’re spreading false information when they clearly weren’t a year, year and a half ago. To me, again, whether you agree with them or not. I mean, you can look at every major platform, Daniel, that has been spreading misinformation on both fucking sides.

Frank Curzio: You know what I mean? We’ve seen it, but I just think that this is incredible going down a very crazy road here. We’ll see how this turns out. But I want to see the fight here. I’m interested it in the fight, because a lot of people starting to fight back and say, “F you,” we start with Chick-fil-A’s. We start with what was that, Goya Beans or whatever that company where, again, world crowd attack these people. I think it’s a really big deal, because now Spotify just got their target raise. And a lot of these people who are coming out and saying these things realize they going to lose a of people listening, because you’re either on the right or left, or conservative, whatever. But when you really come out that strong on one side, the other side’s going to hate you and you’re going to lose subscribers and everything.

Frank Curzio: But I want to see how this plays out, because I really think Spotify’s a buy here. And I think it’s going to result more and more people listening to this. This is freedom of speech. Even if you hate it, just like I hate things you hate things, someone has to write to burn a flag. That’s what our country was founded on. This is way I’m able to do this podcast. And express my feelings, which a lot of these were stuff that I heard from doctors all over, who just treat people thousands and thousands of people, who’s sending to me this information and people were ragging on me saying, “You’re an asshole,” but it turns out it wasn’t misinformation. You just were only being fed one side of the story, and there was narrative with election going on. So, I think it’s important for you to understand, it’s important for everyone to understand, get the facts, because this is about our families.

Frank Curzio: And I say this to you all time. I just didn’t think when it came to COVID, I get money, I get Wall Street. It trump’s everything. I just didn’t think it would trump like the health of your kids and just helping your kids, and it’s crazy. So, just how does this relate to stocks? I want to see how this plays up, because you have that world crowd that attacks everybody. And I don’t like the fact that Joe Rogan came in and apologized, even though he apologized and said, “This is why I did it,” but I get it. I just, I hate the fact that everybody apologizes for saying their true feelings. I’m just not a big fan of that. If that’s what you believe, you believe. If you’re in the KKK and you’re racist and you say it, that’s you believe, that’s what you believe.

Frank Curzio: I hate it. Everybody hates it. But you know what, for me, it’s be yourself, that’s you. And to say something where I didn’t think Joe Rogan did anything wrong here. And a lot of people didn’t do a lot of things wrong. They apologize… I hate the apology factor, but I am interested to see how this turns out, because Spotify’s is starting to go higher. I think it’s going to result in a stronger brand, because people are just pissed off of canceling, whatever they want to cancel. If they just simply disagree with you, which is the values that our country has founded on.

Daniel Creech: Yeah, I agree. Okay. I read a few. I read a few headlines about this. I watched he’s got a nine or 10 minute video. I believe it first posted on Instagram, where he just held up his phone and talked to it and explained this, one of the headline, couple of the headlines that stuck out to me. There was one about Joe Rogan, apologizing, which is a little out of context in a sense, but you’re right. Two, is thank you to the haters, because he does say thank you to all the haters. It’s good to have haters. There’s a lot of different angles. You can snag for click bait there. His apology in his defense was more to, “Hey, sorry for Spotify to have to deal with all this.” He did say he was going to try to balance it out and maybe come up with, “Hey, if you have this guy, which is way over here on this opinion, then sooner than later, I’m going to have somebody that counters that on the podcast, more options.”

Daniel Creech: So yeah, it was an apology. I know you’re not taking a punch at him there, but I think that needs some context. This is the oldest play in the book. I mean, cancel culture is nothing new. People screaming at the top of their lungs so that somebody else can have a platform. I believe it was CBS this morning said, “You have a right to freedom of speech, but you don’t have the right to freedom of speech on a platform like this,” which is just hilarious.

Daniel Creech: So, I don’t know how many viewers CNBC in the warning gets, but it’s probably not anywhere near Joe Rogan and his audience, but the concept, it is just the old playbook. It’s, “Hey, we don’t agree with this. So, we want to control everything. We want to control the narrative.” To your point about Spotify, they’re not profitable yet. I don’t know if they’re going to be, but it would be a good trade. I mean, it’s down almost 40% over the last year. I’m on Seeking Alpha for looking at it, as much as it is, I don’t know. It’s hard to go after some… Are you talking about a trade or an investment here, Frank?

Frank Curzio: I think as an investment here. I guess one is, there’s a reason why that when it comes to why they backing and Joe Rogan, it’s not that he just has so many more subscribers. And I think it’s like 11 million or something like that. Just watching it there, YouTube it’s like in hundreds of millions, but when you’re looking at the podcast model compared to the other model and yes, it’s 11 million on Spotify. But if you take a lot of these artists, you can get to 20 million, 30 million, that may come off the platform, who knows?

Daniel Creech: No, they’re not going to do that. Neil Young needed some more publicity and stuff. Nobody of any merit’s going to have to walk.

Frank Curzio: But they’re trying to really like even what is it? Rolling Stone push narrative. Like you got to come off the platform. You got to come off the… Like this whole misinformation thing. When you’re looking at this model, guys, it’s important to realize this. When you have a royalty streaming model for music, it’s not a huge earnings model, right? And yes you say, “Well, it’s royalties,” but you have to pay a lot out. Podcast is a different model. This is why Spotify is the largest podcast platform in the world and became a large platform in the world. Now, they’re getting more and more subscribers, podcasts, but they’re going all on a podcast, because the margins are much greater. And that’s that expression of speech, there’s no way they were going to say, “Hey Joe, you’re gone, no way. Absolutely. That’s their business model.

Frank Curzio: If they did that, the company would go down. I think 50% from here, at least it’d be great short, that’s their model going forward. Like, this is their model. This is like, “Hey podcast, we want to hear people’s opinion. We want to have this open,” and again, they got to control it and you can’t just go, you are on a platform. So, you can’t just say, “Hey, you know what? I think women should make less money than men and, and their inferior to or whatever.” You can’t say whatever you want on these platforms. Right? You’re going to get nailed. But expressing your opinion and just having these people on and trying to learn from having a different… I love having a different opinion, especially if I’m bullish on something, I want to listen to the person that doesn’t like it. What am I getting wrong?

Frank Curzio: That makes us all better. You could disagree and you could be angry, but that makes you better by hearing both sides of the story and in the media and everything. We’re not hearing both sides of the story. We hear one narrative. This is how you have to believe it. That’s it. And you could see now if you go back and see how much has changed, if you get the vaccine, you’re be fine. No masks, no nothing. And forcing this shit on us and masks reduce the spread of COVID. It’s not statistically true. You look at Israel, the countries that got vaccinated, the quickest and mostly their population wearing masks and everything. I mean, you saw from Delta and Omicron numbers soar, which by the way, numbers across the board, almost across the board are going much, much lower now. Right?

Frank Curzio: We’re seeing it ease, which was expected, which is cool. And numbers are definitely going the right direction now. I think a month, two months from now, this is going to be a thing in the past where we’ve seen numbers come down dramatically, because it just spreads so fast, that’s the model from South Africa. That’s the model from Israel. So, getting back to Spotify here, listen, their business model, Daniel has to do with podcasts and that’s a great business model for them. And I just think this is going to strengthen their brand. Yeah. Look, we stuck by this guy and you should. I think he’s very fair and people have their opinion. They don’t like it. They like it, whatever. But either way, I think he’s fair. I love his interviews, and I love watching the guy, I do. I just think he’s fair. I think he’s cool. And I enjoy, it’s very entertaining. I just think the reason why it’s number one podcast in the world.

Daniel Creech: Yeah. Absolutely. I mean, good for him. I don’t listen to it all the time, but I try to catch a lot of them. I think what he’s done is great and yeah, I like how he does it back down and hey, it’s good for the haters. Like he said, “All publicity is good, publicity,” Frank. And like I said, people just threaten to take their and go home. It’s nothing new. It doesn’t interest me.

Frank Curzio: No. And one last story here, trying to keep the 30 minutes just to which I thought was pretty cool is the Facebook right? Selling their theme assets to Silvergate, which is a company we’re very familiar with, we recommended very, very early. Yes, it got hit with crypto was still tremendously on this name. We’ve in very, very early, just crypto focused, and they sold it to Silvergate for 182 million, but it’s just showing how like just going for Facebook, launching Libra and then turning into, what is it, Diems, is that how you pronounce it?

Daniel Creech: I don’t know, you’re asking me.

Frank Curzio: D-I-E-M, but just trying to do this blockchain and payment base network just designed for commerce and their own crypto and launching and having so many people on board and the government was like, “No way.”

Frank Curzio: And then getting out of it. Now you see how much they’re in a Metaverse. But just to see what I love about Facebook is a transition here. Listen, they’re one of the most innovative companies. They buy shit really early, where people yell at them and think they’re fucking crazy. But this is two years ago that they were going this direction talking about two, three years ago. Like, this is the greatest. And immediately when they see that’s not working, they’re out of it and they’re getting money off of this. And they probably spend a lot more than that to build this, but then they realize regulation’s not going to allow us and look at the Metaverse open up. And now, you change it. You as a corporation it’s… And I know Facebook and I hate the fact, because my daughter not so much on Facebook, but man, some of this shit, especially Snapchat, Instagram, took her off of it.

Frank Curzio: Like you have to, it just depresses them. It’s the worst thing ever with these fricking social media companies do to these young girls and to see how Facebook transitions is a model for every company. And even for us, we’re in a financial publishing business, but if something changes and we see a massive growth market that we’re going to test, that’s how you really… Wise, Amazon and Facebook, Amazon and Microsoft two of the biggest companies in the world, is because they transition into Cloud, right?

Frank Curzio: So, they transition into Cloud, and that incorporates into everything that they do now. But you have to be willing to change. I love what Facebook did, just showing how this was amazing. And everyone was on board. Then they saw the regulation. They’re out of it. Now, they’re selling assets. And now, they’re all Meta. Who knows? Maybe the Metaverse that changes too in three years. And maybe they’ll go a different direction than not, because the Metaverse is huge. You seeing the land sales and now it’s here, and it’s going to be really, really big. But for me, that was the biggest highlight of that, just showing how a good big company is able to innovate. And not only that just change on a dime if something’s not working and they don’t see that as a growth market anymore.

Daniel Creech: Yeah. And one person’s trash is another’s treasure. This is another great example from a macro perspective to me, what caught my interest there is to your point on, “Hey, we got to shift gears. This isn’t going to work.” Facebook Meta platforms, they’re not the most favorite company of regulators. They’re constantly pulled in front of committees. They’re constantly in headlines about taxes over in Europe and in different situations like that. But you got to love them, again, to repeat myself. They are the example of all publicity as good publicity, to a certain extent, they made a lot of good headway’s with the Stablecoin and what they were doing. Silvergate was already a partner with them. So, this is an easy transition. They copped up some cash in a lot of stock. This is great because it shows you, okay, so they’re getting out of the Stablecoin, but Silvergate is now going to use that as this blockchain based payments, cross-border payments.

Daniel Creech: We’ve already talked about their SEN, the Silvergate Exchange Network, which is transaction billions and billions of dollars. They were already a profitable old school, just regular bank that has an amazing CEO with vision who got into crypto in a big way, that stock has exploded higher. I like both of these moves, because Facebook’s just going to continue on and Silvergate… Why wouldn’t you use your… You’ve talked about this a lot lately. Why wouldn’t you use their stock as a currency? And the cool thing about Silvergate, again, volatility sucks.

Daniel Creech: It’s hard when you see your holdings go down, but you got to understand, you always should have some cash available and you’ve got to be able to act, because Silvergate reported weaker than expecting earnings. Of course, it was run up with higher crypto prices in general, it got smacked down over 20%. Goldman came out, recommended it after that major pullback. Now this deal, this was announced on Tuesday. Shares popped 10% on that. Yeah. Just easy to be bullish on this. Facebook is pulled back to… I took a victory lap on Exxon. I’ve been on Facebook for a long time. It’s definitely pulled back. I’m still bullish on it. If you’ve been waiting and yelling at me, because I was patting myself on the back with this, I would still buy it here. Yes.

Frank Curzio: Yeah. And Silvergate, what sort of cost base is around Silvergate?

Daniel Creech: It’s low. It’s a huge winner for crypto’s or-

Frank Curzio: 12 or 13 stock is-

Daniel Creech: I was going to say it’s not single digits, but it’s under 20.

Frank Curzio: Yeah. I think it’s like 12, 13, and it’s 111 now, but just put perspective. It was over $200, and we did take profits higher than this. And to be fair, even with our Crypto Intelligence portfolio, it’s gotten wrecked along with all cryptos and the massive sell off that we’ve seen over the past four weeks, which is, again, we took small positions, and a lot of these things that we’re starting to add to them and that issue is coming out later today for you guys. So, definitely take a look at it. But really good stuff, Dan, thanks for stopping by. I mean, we just covered a lot of stuff, a lot of names and stuff and let us know what you think about this format, the podcast, we just like to cover different ideas, different opinions and okay.

Frank Curzio: You don’t always have to agree with us, but if you don’t agree with us, tell us why. Yeah. You can call us idiots or assholes, and that’s okay. We’re cool. We’ve got thick skin, but seriously, if there’s things that you see, that’s what the network’s about. That’s why this podcast so amazing. That’s why you’re able to get out a lot of the stocks before COVID crash and everything. Just having great contacts and great people and network. That’s what this thing is for man. That’s what it’s for. We got great interview coming up tomorrow too. And the last thing here and Dan, thanks again. But the last thing here is our Curzio Equity token. I covered that yesterday. It’s going to be trading on the tZERO platform next week. I’ll let you know the exact date, but it’s a way that you get a direct equity stake, in Curzio Research.

Frank Curzio: Long time coming. Very, very exciting, but next week’s going to be trading. If you have any questions, if you are a current shareholder that was on MERJ. Now, you should being transferred over to tZERO. Let me know, frank@curzioresearch.com. If you interested in learning more about it, go to our website, curzioresearch.com, but I’m here for you guys. If you any questions, there is a learning curve here. Not much, but I get it. Something new that I think is, I covered it yesterday. It’s going to be one of the biggest, biggest trends that you’ll see.

Frank Curzio: I think hundreds of thousands of apps are going to be tokenized in the next three to five years, and you’re seeing it now, lots of platforms are starting to open up and it’s really, really exciting times. So yeah. Questions, comments again, I’m here for you, frank@curzioresearch.com. That’s it for me. Great interview for tomorrow, listen up, which we will get into crypto with that person. Who’s a big name in crypto, he’s really, really cool. Definitely tune in. I’ll see you tomorrow. Take care.

Announcer: Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decision solely on this broadcast. Remember, it’s your money and your responsibility.

Frank Curzio
Frank Curzio, founder and CEO of Curzio Research, is one of America’s most respected stock experts. His research is regularly featured on media outlets like CNBC’s Kudlow Report, The Call, CNN Radio, ABC News, and Fox Business News. His Wall Street Unplugged podcast—ranked the No. 1 “most listened-to” financial podcast on iTunes—has been downloaded over 11 million times.

Editor’s note:

The Dollar Stock Club portfolio is filled with fully vetted assets from Frank’s Rolodex of Wall Street insiders…

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