Half Backronym: PISCES, ACI, MSTR
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Hello, and welcome to the Money Stuff Podcast. Your weekly podcast where we talk about stuff related to money. I'm Matt Levine, and I write the Money Stuff column for Bloomberg Opinion. And I'm Katie Greifeld, a reporter for Bloomberg News and an anchor for Bloomberg Television.

What do we got today, Katie? We're going to talk about insider trading. It's now legal in the UK and only in private markets. Then we're going to talk about drama at the grocery store. And then we're going to talk about microstrategy and Michael Saylor. Sounds great. Let's get into it.

Insider trading. That's great. Yeah. Like I said on this podcast, I love insider trading. And then I walked it back a little bit. Then you qualified it a few different ways. But in the UK, now, in certain circumstances, it's maybe not encouraged, but maybe not allowed. They're launching this thing called Pisces, which stands for Private Intermittent Securities and Capital Exchange System. This is like a thing that everyone talks about. Private companies have become such a big part of the market and are so important that

And the thing about being a private company is you can't trade their stock. And I was like, well, shouldn't you be able to trade their stock? And so there are all sorts of solutions and marketplaces that have sprung up. And the UK is building this regulatory sandbox where basically they're going to have a set of rules for the private market that are different from the rules for public market, require less publicity, but allow for some trading of private market shares. And in setting up those rules, they thought,

should it be legal to insider trade? And they decided, sure, why not? Let's make it legal to insider trade. Which I think like, you know, I'm kind of cautiously optimistic for it because I love insider trading.

So reading this as I was working my way through the column, I was thinking about the fun market. And then you did get there, that you have the nice market and then you have the fun market, which is similar to the doped up Olympics where just see what happens. Yeah, right. It's the doped up Olympics, right? I mean, like I've written about like this idea of having the nice market where like there are rules and like.

Everyone's supposed to be on kind of an informational level playing field. And then there's the idea of the fun market where there are no rules and you can just do whatever you want. And I sort of started thinking about that in terms of crypto because there's a reason in the abstract for crypto to ban market manipulation. And we've talked about the mango markets guy, right? There is this notion in crypto that if you can do it, it's legal, right? And there's no rules. And it turns out that US regulators impose a lot of market manipulation rules even on crypto markets.

to the surprise of some crypto market manipulators. But like, you know, it's just like, it's a set of gambling tokens. So like whatever rules everyone agrees to are fine. In capital markets, it's a little different, right? Like you have rules of capital markets in part because you think they're the right rules to like encourage retirement saving and capital formation. And I think the consensus is that in public markets,

insider trading is bad because people will be less likely to invest their money in the stock market if they think everyone is insider trading against them. And if they think everyone's insider trading against them, then it'll be harder for companies to raise money. And like what you want in a stock market is capital formation, like retirement savings and not so much fun gambling. But like, you know, like a crypto market, you could have fun gambling rules. The private market stuff is from first principles, you would be like, we want to encourage capital formation and investing, but...

So we would want to ban insider trading. But, you know, it's like a higher bar. It's not open to all retail investors. It's open to like sophisticated investors. And so the sophisticated investors can say, we're going to live with some insider trading. And the other reason to allow insider trading in private markets is insider trading rules in the public markets kind of go along with disclosure rules. And so the reason you can't insider trade is because it's like your company is kind of supposed to make everything public anyway. And so if you know something that they haven't made public yet, like wait three days and then you can trade, right? Right.

In private markets, if your company never discloses financial information, then how can you ever trade? And it's like it's, you know, like there are solutions to that. But it seems like a little bit harder to ban insider trading in private markets than it is in public markets because there's just more information that the public doesn't generally have. And so it's a little harder for employees to trade, you know, without knowing something that the public doesn't know. But the U.K. has decided to strike that balance by just letting the employees trade.

I want to talk more about the name a little bit. Pisces? Yeah. It seems like a backronym. Like, do you think that they organically are? I don't think it's a backronym. I don't know. I don't know that they're like. Private Intermittent Securities and Capital Exchange System? I think most financial acronyms are like half backronyms, right? Like, they're like, kind of write down what it is. Yeah. And then you're like, well, that doesn't spell anything.

And then you like add letters until it spells something and then you like figure out what those letters should stand for. So like, yeah, they're like the private securities exchange. That's kind of like Pisces. Let's add some letters to get to Pisces, right? I don't think they were like, I don't think they set out from like, let's name this thing after an astrological sign. Maybe they did. I love the word intermittent. You don't really. Right. That one's like there for the acronym. You don't see that word a lot tossed around. Right. Other words they could have considered occasional. Right. The posses. Right.

I don't like that at all, actually. Right. You could have gotten to Pisces, but Pisces is a little more friendly. It's a fish. So this hasn't launched yet, right? Right. That'll be fun. I mean, even if they're saying enter at your own risk sort of thing, I don't really know what the moon music is like over in the UK, but I could still see if this were in the US, this would still lead to lawsuits. I would posit that, in

insider trading and private companies is illegal in the U.S. Mm, brave. You know, there's an SEC case from 2011 about a company doing employee tender offers where they didn't tell the employees that they were, like, negotiating a merger. And so the SEC sued them for fraud, which is, like, kind of what insider trading is in the U.S. And, you know, a lawyer pointed out on LinkedIn that there's actually a California law against insider trading.

That applies to private companies. And that's relevant because, you know, most of the private companies in the U.S., you know, if you think about like they're probably trading in California. So it's pretty illegal in the U.S. But I think I asked ChatGPT, this private company, inside of trading or like, you know, I Googled it and like the results were like, no, it's fine. Go ahead.

I could be wrong about that. I don't want to slander Google. But it's just like it's not like a well-known thing. There's a SEC case from 2011. There's not 20 cases a year. And the reason is it's like private. You know, there's no one suing. No one's like aware of, you know, like there's just like less ability to find out that there was insider trading. Right. But like probably there's some insider trading. It's just like it's not like they announced the bad earnings two days later. Right. It's like they never announced the bad earnings. So you don't know that you were insider trading. Right.

But with the rise of tender offers, which are becoming more regular and just secondary market activity in general in the U.S., do you think that we'll see more cases like this? I think the tender offers are the real... Yeah. I don't know enough about tender offers, and I thought it was the company buying back shares from employees. That's like the normal idea of it. But increasingly, it's now kind of a two-sided trade where the company is sort of brokering a trade where...

some list of new investors are buying back shares from employees and old investors. Interesting. So it's kind of like, you know, the company is like the stock exchange kind of. Yeah, because there's no stock exchange. And like these companies normally have control over the trading of their shares. And so if you want to buy if they're the company, you want to sell if they're the company. And so the company, you know, intermediates the trade. So maybe we'll see more shenanigans. Yeah, because like if you have a tender offer like that, where like they're sort of, you

employees are on the selling side and venture capitalists are on the buying side, or growth funds are on the buying side.

You know, you probably have obligations to disclose material information to both sides. And if you mess that up, as public companies do all the time, you could eventually get lawsuits, right? I mean, it's a smaller base. It's not a ripe field for like securities class action lawyers yet. But like you'll eventually see some lawsuits. You linked to an article from Sarah McBride in your column on this. And I thought it was interesting, like the changing attitudes perspective.

at these companies towards the fact that there is a increasingly vibrant secondary market for their shares. Like it used to be like a bit taboo, I feel like, and companies really didn't like it. But I just feel like it's inevitable now. I think attitudes remain kind of varied. And like you see in Pisces in the UK, there's like

one aspect of the plan is that the companies will have some control over when and how their shares trade, which I think is a big draw of the private markets everywhere, which is just like you don't want activists to be able to buy your stock without telling you, right? Like you want to have some control over who owns your stock and when they can buy it. But yeah, I mean like

In a world where you are private until you're kind of big enough to go public and then you go public, you might really care about preventing your employees from selling until you go public. In a world where the default is kind of to stay private forever, your employees need some liquidity. And yeah, you offer tender offers, but some companies are also like, yeah, we'll live with a secondary market. You can't eat on your net worth alone. You need that liquidity, Matt. You need that liquidity. I've also written this week about it.

Margin loans and Tesla stock, which is another way to get that liquidity. But that's a different story. We don't need to talk about that.

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podcast and specify where you heard this ad. Make sure they know that you heard about GiveWell from this podcast. Let's glide gracefully along, shall we? Let's glide along. Right into the grocery aisle. Kroger and Albertsons. Man, are they in a tiff. They're in a tiff. Yeah, it was...

A long engagement and a messy breakup. I have to say, I have a soft spot for Albertsons because when I was very briefly an M&A lawyer, I did a deal for Albertsons. They sold themselves to two separate buyers. One was essentially Cerberus. The thing called Albertsons today is like the Cerberus entity. And then they sold a lot of stores to a company called Super Value, this nice Midwestern grocery store chain. And I was...

the junior lawyer for Super Value. It was fun. I thought you were going to say you grew up going to an Albertsons, which didn't quite track. No, but in college, I went to Shaw and Star Market, which I learned for Albertsons brands. I was pleased with that. I went to King's, so I can't relate to this in any way. I'm not good at knowing which grocery brands are owned by which companies. For all I know, that's an Albertsons brand. I don't think it is. I don't think it is either. I love King's. Anyway, so...

There's all this enthusiasm over the regulatory landscape, how we're going to get this big boom and M&A. There's some deals that are still dying on the vine. Kroger and Albertsons, their proposed merger is one of them. And Albertsons suing Kroger's saying that they, in fact, didn't do everything that they could have to satisfy the FTC here. Yeah. So you sign this deal and you know the main problem is antitrust, right? Because it's your big grocery store. Yeah.

chains combining. And in particular, it's chains with a lot of geographical overlaps. We have a lot of places where the Kroger's supermarket competes with the Albertson supermarket. And if they combine, then there'll be less competition. And the FTC for the next month doesn't like that. Who knows after that, right? But they signed this deal in 2022. And so they were dealing with the current FTC. And they

signed the deal hoping to combine, but they knew that there would be FTC impediments and the deal required them to sort of do everything in their power to get the deal done. And particularly, like, Kroger is the buyer. Albertsons is much more at risk in that situation, right? Because, like, if the deal falls apart, it's bad for Albertsons. It's less bad for the larger, more stable buyer. Yeah.

And so the deal agreement was like, it's called a hell or high water clause. They have to do anything come hell or high water to get the deal closed, except they don't have to sell more than 650 stores. And, you know, the thing that everyone knew they would have to do to get the deal closed would be to divest some of their stores. And like all those places where Albertsons and Kroger's compete, you put one of those competing stores into a new company or you sell it to a company so that it continues to compete with the combined Kroger Albertsons.

And Albertson says that Kroger, like, dragged its feet and didn't propose enough divestitures and didn't listen to the FTC when they asked for more divestitures. And so the FTC eventually sued. And their divestiture proposals were so bad that the FTC won in court. And so now the deal is dead. And Albertson wants billions of dollars of damages from Kroger for not getting the deal done. Yeah.

Yeah. I mean, Albertsons had two specific gripes with the divestitures, that they weren't divesting the good stores, and also that they didn't like the buyer that they picked, CNS Wholesalers, I believe it was. Yeah. Because CNS is like a grocery wholesaler that doesn't own a lot of grocery stores, and so there was some question in the mind of the FTC and the court about whether they could successfully compete with combined Kroger. Yeah. And apparently, Kroger...

had some sort of auction for these divestitures and got 60 potential bidders, but they didn't consult Albertsons on the bidders and they just picked CNS. And so Albertsons is now mad that they

Could have possibly found a better buyer and they didn't, so the deal got killed. They have a lot to prove when it comes to this lawsuit. Yeah, it seems hard. It does seem hard. Because, like, essentially you're trying to prove a counterfactual. You're trying to prove they could have proposed a different set of stores to divest. They could have found a better buyer. And if they had done that, the FTC would have been happy with it. And it's like, well, you know, like, the FTC is, like, it's, like, pretty skeptical of big mergers, right? And, like...

It's possible that they couldn't have gotten a deal done or they couldn't have gotten a deal done without divesting more than 650 stores. So they'll definitely be able to find places where they're like, oh, they could have done a better job. But will they be able to prove that they would have gotten the deal and therefore deserve billions of dollars of damages? Yeah. Yeah.

I was reading the Bloomberg Intelligence take on this. So they basically agreed with you saying that it's going to be difficult to prove all this. But they did say that they could prove that they're entitled to the $600 million breakup fee. So maybe they won't get billions of dollars in damages. But $600 million is not nothing. But it's not $6 billion. You can definitely argue, oh, I think Kroger's going to say Albertson's breached its agreements and so it's not entitled to it. But that breakup fee is essentially there as like...

If you can't get through it for antitrust, like the seller gets a consolation prize. So you would expect them to get the breakup fee. You touched on this a bit, like the reason why this has antitrust concerns. And OK, maybe you eliminate some local competition and Kroger prices go higher as a result. But then you think about this like dystopian future where Walmart controls everything. Like they're protecting local competition, but that local competition doesn't.

could just be steamrolled by Walmart in the future. I think in general, if you're like a pretty activist FTC and like you want to prevent companies from getting, like you, you, you're like give careful scrutiny to mergers. Everyone who's doing a merger is going to come and say, no, we're actually, this is better for competition because we'll be able to take on 90% of the time that the word that goes there is Amazon, right? Like we will take on Amazon, right? And so you have to let us merge because then we'll be big enough to take on Amazon. And the FTC, I think, is skeptical of that.

In part because everyone says it. In part because, like, they don't get to stop Walmart or Amazon, right? They get to stop mergers, right? Yeah. And so if someone comes to you with a merger, you're like, I want to, you know, improve competition and, like, reduce the concentration of corporate power. So I'm going to say no to this merger. And they're like, no, no, we're actually doing it to compete against Walmart. Like, they can't do anything about Walmart. That's true. I do find myself more...

sympathetic to that narrative when you consider what happened with JetBlue and Spirit. Oh, yeah. For example, like... Same story, right? Yeah, they wouldn't let them merge. Right, it's like there's low-cost carriers, and they're like, we need to be bigger to compete with the legacy carriers and continue to provide price competition. Yeah. And the FTC's like, no, if you merge, there'll be less competition between the two of you, and the prices will go higher. And then Spirit filed for bankruptcy a couple years later. Right. I don't know enough about, like,

the economics of grocery stores to know how true a broker's complaint is. You weren't like a grocery store banker in your past life. I feel like every story somehow. It's the grocery store lawyer. But I'm sympathetic to the idea that it is hard as a grocery store operator these days to compete with Walmart, Costco, Target, which is not part of the market from the FTC's point of view. But no, I mean, the Spirit JetBlue stuff has just played out immediately that probably letting them merge would have been better for competition.

I'm not saying that Albertsons is going to die necessarily. It is interesting to look at the stock price, though. Since the start of October 2022, when this deal was first announced, Kroger's is up 48% since then. Albertsons, I had to check this a few times because they're up 8% on a total return basis. Their share price alone is down like 20-something percent, but 8% on a total return basis. On a total return basis is like...

When they signed the deal, they planned to pay out a big dividend? Yeah. Sort of like a down payment on the deal? Well, it's showing up. I love it when share price performance doesn't match total return in a very dramatic way. And normally that's not because you're paying a two-cent dividend every quarter. No. Here it's because they paid out a big dividend as part of the deal. Yeah. So the stock price is not really apples to apples. I do wonder where Albertson's goes from here. I don't expect you to have that answer, Matt. So...

So let's move on. It does?

Our producer is telling us that Albertsons does in fact own Kings. Oh my God. Yeah. Now I'm personally invested in this story. Sure. Sure. Now, yeah. I love Kings. I don't know. Is it local? Are you sure? Is it a regional? If it's on the internet, I'm inclined to believe it. One of Kroger's brands. I didn't recognize like any of Kroger's brands, but one of them is King Supers, but like S-O-O-P-E-R. Oh. Yeah. I didn't know that. Whole world out there. Have you never been to a Kings? No.

I've been to a King Cullen. That's not what I'm talking about. The King's near my parents' house. This is not interesting. Anyway, so they had a relaunch party. Oh, what? What could be more interesting? They renovated the store a couple years back. I think I was in grad school and I went... To the party? Yeah, I went with my boyfriend, now husband, and it was...

Wait, sorry, can you set the scene? So you're like in grad school in New York. Yeah, for sure. And you're like, Joe? Yeah. There's a supermarket launch in New Jersey. Yeah.

I'm clear now. I don't understand the confusion. I love a good quirky, quirky outing and supermarket launch party is exactly my sort of scene. And it was awesome. I have a photo of it on my desk. I'll show you after. I do want to see that. Yeah. Cause they had like a photo booth at the supermarket and they had all these samples. This was pre pandemic. So samples were still cool.

Oh, God, it was so fun. So anyway, man, now I'm rooting for Albertsons because King's is a great grocery store and you can find them in New Jersey. My local store is a food town. And the soundtrack is like, you know, whatever, it's like supermarket music, but it's also frequently interrupted by this recorded voice very enthusiastically saying,

spice up your dinner with sushi. It's like this truly loving description, loving, enthusiastic description of what sushi is. It's amazing. God. Yeah. I've never bought sushi. But they're trying. I just think supermarkets and grocery stores, they really bring a community together. They do.

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podcast and specify where you heard this ad. Make sure they know that you heard about GiveWell from this podcast. MicroStrategy. MicroStrategy. What do you got? How do we get into MicroStrategy? MicroStrategy. You put this on the list. I know. I want to talk about MicroStrategy. They...

obviously buy Bitcoin. They're not only a software company, so much so that they're being added to the NASDAQ 100. I think I've written this, but when you and I talked to John, I think I maybe even said it on the podcast, but you and I talked to John Collison, and he said something like, if you run a great business, all the capital market stuff takes care of itself. A company that spends too much time focusing on its stock and doing stuff with its stock is parking up the wrong tree. MicroStrategy is the opposite attitude. We found the foil.

I, like temperamentally, am much closer to MicroStrategy. Like I like a company that's doing financial engineering. That's fun for me. This is your perfect company. Yeah, I love it. It's great. So MicroStrategy has always been buying a lot of Bitcoin. They're particularly buying a lot of Bitcoin right now. I think for six consecutive Mondays, they've announced more Bitcoin purchases. In October, they announced plans to raise $42 billion over three years. Three years. Yeah, they're doing it like all now.

Exactly. Through a combination of at-the-market stock sales and through convertible debt offerings. But at this rate, they're going to fulfill that target by January. Wait, is that true? I don't think they're going to do that much convert. No, no, no. I think they're going to do the $21 billion ATM. But it is 21-21. They call it the 21-21 plan. But they've burned through...

A lot of it already. Of the ATM, the stock. Yes. Not the convert. The convert is harder because the convert is like, first of all, like a convert, like you do an offering, you're like, I'm going to do $5 billion or whatever. And you go to a bank and you underwrite an offering and you don't do it just tripling out week to week.

Secondly, actually, their converts, someone told me they have a lockup in their converts that say you can't do another convert for another few months or whatever. I saw that as well. I also saw it on Twitter. Yeah. I don't know about that. About what? I don't know if that's for realsies. No, I think it's for realsies. Okay.

Okay, so let's assume that's for realsies. And you can see why, which is like convert investors like don't want, they're like one of the biggest issuers if not the biggest issuer in the convert market. And like, you know, there's some limit on how much size you can buy. And so convert investors say, I don't want to have, you know, the market flooded with MicroStrategy paper. But that's not the point. The point is that the stock investors love it. They don't care. They would love to have the market flooded with more MicroStrategy stock. And like, if you're MicroStrategy, you announced a $21 billion at the market offering over the course of three years and your stock is,

continues to trade at like 150% premium to the value of your Bitcoin, like you do it all now. Like, why would you wait? Yeah. There's no reason to wait. I asked Michael Saylor about it. I interviewed him on the television. Oh, the television. Yeah, on Thursday. And I asked him about that. Like, why all now? Are you going to like lift the ceiling once you get there? And he said that basically they went through it faster than they thought because they announced it in October and then Trump won the presidential election. We had that in November. Yeah.

And then he was like, it's off to the races, basically. To me, the micro strategy trade is like micro strategy is essentially a pot of Bitcoin. It trades at a huge premium to the value of that pot of Bitcoin. If you're anyone, you should say, well, we're going to sell the stock, which is high and buy Bitcoin, which is low. And eventually they'll converge. Right. And it's a risky trade to do if you're a short seller or whatever. But it's an easy trade to do if you're micro strategy. Right. Because you have the stock. You can print more stock.

And so I think MicroStrategy is very clearly doing that trade. And like, if you announce that you're going to do $21 billion of that trade, you think, well, okay, that'll converge pretty quickly, right? And like, we'll keep doing the trade until it converges, right? And if it converges next week, and like, we're selling stock for like, less than the value of the Bitcoin we can buy, then we'll stop doing it, right? But instead, the premium has compressed a little bit, but it stayed really, really big. And so if you're MicroStrategy, you're

You're like, well, we can keep doing this arbitrage for free. Like, we better do it, right? Yeah. Why would you stop? Yeah. Or would you slow down? I mean, it's free money. Yeah. The reception has been insane, at least on the equity side. I did ask him about the debt side because they have been using the equity issuance much more than the convertible issuance. And he said he expects that mix will shift more heavily to fixed income in the second quarter. But I want to get your thoughts on this. You say fixed income?

Yeah, that's what he said. That's a direct quote. I feel like they do converts. And their converts are all immediately hugely in the money. This is what he said. Let me read it. He expects the mix will shift more heavily to fixed income, his words, in Q2 because right now we're getting too delevered and we'd like to get more leverage. We have about $7.2 billion of converts left.

$4 billion are already equity through the strike price, etc., so they're looking like equity. We'd like to go back and build more intelligent leverage for the benefit of our common stock shareholders. Yeah, I think that makes sense, right? I mean, I do think that if your stock is trading at such a huge premium to your net asset value, it seems a little crazy to watch your debt. The convert's like, he's right that

they're effectively equity, right? If the stock keeps going up, they're effectively equity and so you're not really getting a ton of leverage value.

But the other thing about the converts is, and I read about this, a convert is like you're selling volatility, right? Like your convert investors are buying the convert because it's an equity option. And the option is more valuable the more volatile your stock is. And MicroStrategy stock is incredibly volatile in part because it's a crazy proposition. But like in large part because of – and we've talked about this too – like the double-levered ETFs, they're like –

single-stock levered ETFs on MicroStrategy. They own billions of dollars of stock. And I think you've said this on the show, they add to the volatility. Because every time the stock goes up, at the end of the day, they have to buy more stock to remain the proper level of leverage. Every time the stock goes down, they have to sell stock to get back to the proper level of leverage. And so they're adding enormously to the volatility. They buy when it's up and they sell when it's down. And so they make the stock as more than 100% annual volatility.

which is great for convert investors because convert investors are doing the opposite trade and they're basically getting like free volatility from these ETFs. And so like,

I've always been skeptical of the idea that it's a leveraged Bitcoin fund because, yes, it has leverage, but the premium and the equity price is so much greater than the leverage. If you put a dollar into MicroStrategy stock, you're getting less than a dollar worth of Bitcoins. It's not really leveraged, right? But they are selling volatility because people want to buy their volatility. So selling overpriced stock and selling incredible volatility to convert investors are both like, yeah, those are great trades. You should do that. Well,

Well, there's more of it coming. Sure. You've got to do it until it stops, right? Yeah. It's like irrational not to. If the music is playing, you're going to dance. And they're so far from it stopping.

Yeah. I think the premium is compressed a little bit, but it's still a great trade for them. The other thing I want to say is, I read about this a little bit, other companies are like, oh, this is a great trade. We should do this, right? Yeah. And the way you do it is not shorting MicroStrategy, which is like a widow maker. Death wish. Right. The way you do it is you sell your own stock. You're a company. You're not having that much fun as a company. You just buy all the Bitcoin that you can buy. You say, oh, we're MicroStrategy. And then you sell your stock to fund more Bitcoin buying. And it has worked for some companies where they traded a premium to their Bitcoin holdings

And they also have other businesses, so it's hard to exactly calculate that. But, you know, they can raise money from investors to, you know, they can do at-the-market offerings to buy Bitcoin. The other thing I wanted to talk about is the index inclusion a little bit more. It was announced last Friday that they will get added to the NASDAQ 100. And people think of the NASDAQ 100 as a big tech benchmark. It's not actually a tech benchmark, but it's specifically non-financial companies. Yeah, right.

MicroStrategy was controversial because, okay, they have a software business. They have a software business that's obviously not the main focus, obviously. And I did ask Saylor. I was like, do you think of yourself as a software business? He founded it, co-founded it in 1989 as a software business. And he said, I think of ourselves primarily as a Bitcoin treasury company now. I mean, that's like their official name. Yeah.

You heard that from the horse's mouth. Should it be going? Like part of what the arbitrage is in MicroStrategy is like a lot of people want to buy Bitcoin.

Some people can't buy Bitcoin, like physically buying Bitcoin. And so they were like, well, buy ETFs or whatever. Some people can't buy ETFs, right? Like if you're an equity fund manager, it's a little weird for you to buy like, you know, an ETF, like a Bitcoin ETF. It's fine for you to buy a software company, right? True. If you're an index fund, you know, you don't buy ETFs because the ETFs aren't in the index. But you can buy a microstrategy because it's in the index. That's true. So it's a real, it's like an ARB on like who is allowed to buy ETFs.

There is speculation that they could be eligible for the S&P 500 next year because there's going to be new accounting rules that go into effect, which I know not enough about. But under those new accounting rules, I believe that MicroStrategy is it's thought that they will then meet the profitability requirements to be included in the S&P 500, which is...

If you thought like the NASDAQ 100 inclusion was controversial, MicroStrategy getting added to the S&P 500 will cause so much pearl clutching because...

That's what, like, retirement funds track, you know? Yeah, right. I don't... It's a great arbitrage. We're a Bitcoin treasury company. It's almost saying we're a Bitcoin investment fund, but it's not quite, right? You can be in the index and still be like, no, we're just a regular company. All we do is own Bitcoin. But I'm just thinking about, like, my 401k, you know? 401k. It's going to get so much more volatile. Right. Because, like, your 401k at that point will own some Bitcoin. Yeah. But mostly it'll...

A lot of it will own MicroStrategy premium, right? Yeah. If it continues to trade at a huge premium to the Bitcoin, it'll just be like, you know, like just a slice of premium that you're for on Kewlion. There's so much to look forward to in 2025. I wasn't expecting your eyes to go dark at that. The light just went out in Matt's eyes. I take it back. I take it back. No, you're right. There's so much to look forward to in 2025.

Speaking of... I know, I was going to say, it reminds me that I just wrote the last Money Stuff of 2024. And... Programming note. We're taking next week off. And then we'll be back with an entire episode of Questions From Our... It says here, mailbag. For our first episode of 2025. Happy holidays, Katie. Happy holidays, Matt. We'll be back next year with more stuff. Oh, God. That was so good. Bye.

And that was the Money Stuff Podcast. I'm Matt Levine. And I'm Katie Greifeld. You can find my work by subscribing to the Money Stuff newsletter on Bloomberg.com. And you can find me on Bloomberg TV every day on open interest between 9 to 11 a.m. Eastern. We'd love to hear from you. You can send an email to moneypod at Bloomberg.net.

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