The Liquidity Event Podcast: Episode 92

 

Episode 92: We have an IPO people!

Get ready for the juiciest news in tech and finance on this week's episode of The Liquidity Event! We're talking about everything from JPMorgan's Silicon Valley takeover to a shocking report that companies are cheating the H-1B visa lottery. Plus, we'll dish on the gender earnings gap, inflation, and why a 37-year-old making over $200K is ready to break up with New York City. And don't miss our updates on J&J's billion-dollar spinoff Kenvue, AI's impact on the job market, and the wild story of the First Republic Bank failure. So tune in, turn up, and let's get into The Liquidity Event!

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Airdate: 05/05/2023

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Presenter:

This podcast is for informational purposes only, and should not be considered tax or investment advice.

Welcome to The Liquidity Event, a show about all things personal finance, with a laser focus on equity compensation. Hosted by AJ and Shane of BrooklynFI, each episode will take you through the week's news on fintech, IPOs, stacks, founder wins and fails, crypto, and whatever else these nerds think is interesting. Learn more and subscribe today at BrooklynFI.com.

Shane:

Welcome, welcome, welcome to episode 92 of The Liquidity Event. Oh my God, we're almost at 100. Today's date is May 3rd. Welcome to May 2023. This will be airing on May 5, 2023. We are your hosts, Shane Mason-

John:

And John Owens, once again pinch-hitting for AJ Ayers on this Cinco de Mayo.

Shane:

[inaudible 00:00:56], listeners. Yeah, what's AJ up to again? She's freedom fighting in the South Sudan?

John:

I forget exactly where she's at. It wouldn't be appropriate for us to disclose her actual whereabouts, for her safety. As a popular co-founder of disruptive wealth management firm, her movements really shouldn't be followed closely. I know there's an AJ Jet Twitter account that's been mapping her actions, but we got that. We can't have her being doxxed.

Shane:

Yeah, I'll Telegram her and ask her where she is. I'm pretty sure it's Naoshima Island in Japan, to be very specific.

John:

I believe she's in Japan, yes. If anybody's trying to track her down, she's in Japan.

Shane:

Anyone trying to assassinate her, she's at the most expensive hotel on that island.

John:

All right.

Shane:

Undoubtedly. Very easy to find her. Where does life find you today, John?

John:

In Lancaster, PA for a few more days, but I'm off to San Diego next week. We're going to be getting together with AJ and going to a conference, doing some presenting, and also getting some time on the beach at La Hoya. I'm excited. I'm excited. What about you?

Shane:

I'm back in Mexico. I'm back in Mexico City getting my... I was in Phoenix at the end of last week and got some sun. This is the tannest I think I've been since I played baseball in middle school.

John:

There you go. There you go.

Shane:

Brown boy.

John:

Summer Shane has arrived.

Shane:

Oh, yeah. I'm hitting it. I played golf.

John:

Yeah?

Shane:

I was a golfer. I was a golf boy. I can actually play golf. I always surprise myself once a year. I hit the ball every once in a while. All right, we got a lot of articles to get through today. We're going to rapid fire again like we did last week. Friendly reminder, we did rapid fire last week because we went two weeks without episodes, so we had to squeeze two in. There is a lot of details on AI, First Republic's acquisition by Chase. We have the Johnson & Johnson spinoff. But first, big IPO of 2023. We have the writers strike, which will be exciting. We also have a Fed funds hike, which isn't actually what we're going to cover. Just a heads-up, the Feds hiked rates. Was that today they announced that?

John:

Yeah, about 10 minutes ago.

Shane:

Is that a breaking news?

John:

We recorded this at about 2:00 Eastern, so yeah 25 basis points and signaled the end of potential rate hikes, potentially. We'll see what happens there, but 25 dips. The market's digesting it as we speak.

Shane:

Are you calling the top?

John:

Of the rate hikes? I think they're going to take a break, unless they want to send some more banks into failure.

Shane:

Yeah, AI's going to delete enough jobs. I think that the unemployment rate could be changing sometime in the near future. Speaking of employment, we have an article here from The Journal about how companies are colluding to cheat H1B visas. According to The Journal, there are a number of companies that have been propped up, or created just to apply for H1B visas. For the listeners that don't know, the H1B visa program is designed for college-educated foreigners to come work in the United States. A lot of them work in tech, and other highly technical fields, and it usually went to college in the United States, and it's one of the few visas that allow for that employee to actually become a permanent resident here in the United States. It's quite hard to become a permanent resident of the US.

Apparently, it used to cost thousands of dollars to put in an application, and then they cut the cost in 2020 down to $10.00, and then you didn't have to pay those thousands of dollars until after you hit the lottery, or your name was pulled out of a hat. Then you had to pay all the fees. So, it created this system where people would just create companies. And also, if multiple companies applied for the same person, it boosted their chances. It's like getting multiple tickets into the box for the raffle.

John:

Got it. Got it.

Shane:

There were at least companies that were propped up. It's not hard to create a company. It costs like $1,000.00, and then you can just-

John:

Yeah, [inaudible 00:04:55] C Corp, another [inaudible 00:04:56] C Corp called H1B Visa, Inc, basically, and you just apply, and apply, and apply. You try to rig the lottery, and all of a sudden all these companies are like Charlie's grandfather in Willy Wonka jumping out of bed and hiring these folks, and then trapping in them in jobs because then they can't leave.

Shane:

What a metaphor there. [inaudible 00:05:18] did you watch that movie the other day?

John:

That dude didn't work for all those years, and he gets the goddamn golden ticket and can jump out of bed. I'm pissed about it. You know what I'm talking about.

Shane:

I see. I see what you're doing now.

John:

Yeah.

Shane:

I forgot to go into... Yes, he won the lottery. Well, Charlie won the lottery and-

John:

Charlie won the lottery. Grandpa just rode on his coattails.

Shane:

... just took along the laziest motherfucker. Is that an American movie, by the way? I feel like it's in Lancaster, Pennsylvania.

John:

It could be. Maybe Hershey, Pennsylvania, which isn't too far from here. But it does seem like it. I have not found the chocolate factory here yet, but I'll keep you posted.

Shane:

This is a digression. But yes, I agree that it is a perfect employee, highly technically skilled from abroad, so you probably don't have to pay them as much as you would a US naturalized employee, I guess. If they leave the job, they have to go back to their home country, and they don't have health insurance, and all that. As somebody that has worked with people who have moved here from abroad and are working on a visa, it's a nightmare. You can't leave. You're like a prisoner.

John:

Imagine you're at a company that doesn't want you to leave, and you're on an H1B visa, from I don't know, Russia. Maybe you're a fighting age male, like "Oh wow, we got this guy. He ain't going anywhere." Are you going to get drafted and go get blown up in Bakhmut? They're getting paid obviously, but there is some degree of... I think there's some ethical qualms to work here as well.

Shane:

I want to see the performance review for Vladimir when he just blows it out of the water and he gets a 1% raise, because his other alternative is to go back to Russia. Yeah, terrible.

John:

And get drafted.

Shane:

Terrible. Anyway, yeah I think we need to open the borders in terms of highly skill college-educated employees that would threaten the technical space. We need some more prompt engineers apparently, because they're paying $300,000.00 a year. We got to bring that cost of propping down. Speaking of work and not working, the writers strike went live two days ago, I believe. Last time this happened was in 2008. There were some interesting developments during the prior strike. It's been 15 years.

John:

I remember the last one. A lot of shows were canceled. You didn't have the late night shows for a while. I was in like high school last time this happened.

Shane:

Yeah, apparently The Daily Show, Kimmel, Colbert, Fallon and SNL are all highly impacted by this. They cover topical news stuff, so that makes sense for the minute that the writers leave the room the jokes are gone. I didn't really know how to think about this. I saw some articles about it. Apparently, in 2013 and '14, the Writers Guild of America... I got their name wrong for sure, but claimed that 33% of all TV series, writers were paid minimum wage. And now, half of them are paid minimum wage. The budgets for these movies and TV series has exploded. We're in the Golden Age of content, and writers are not getting paid.

Apparently, David Zaslav, who is the CEO of I believe Warner, made [inaudible 00:08:18]-

John:

Time Warner and HBO, and all that stuff?

Shane:

Yeah, he made $250 mil, and the Netflix dude made $50 mil. I think they're arguing for just those amounts of money to be spread across the 11,000 members of the Guild. So, you got one guy making what these 11,000 people are asking for, which is the most American thing to come up on this podcast so far. Besides exploiting foreign workers.

John:

Exploiting foreign workers, or getting a chocolate factory.

Shane:

Yeah. All right. Anyway, speaking of smoky rooms and shooting fish in a barrel, JP Morgan apparently has acquired First Republic Bank.

John:

We called it here last week, didn't we? I basically said something's going to happen here.

Shane:

Yeah. The running joke in our internal Slack channel is, I was calling a buy signal on First Republic [inaudible 00:09:11]... Don't shake your head. I was calling a buy signal on First Republic by JP Morgan, not for me personally.

John:

Yeah.

Shane:

Well, [inaudible 00:09:23].

John:

... My other role as Chief Compliance Officer here. Anyway. Somebody bought them. Jamie Diamond bought them.

Shane:

Listen, Jamie Diamond bought them. Jamie and I were in the same camp. Are you going to argue that Jamie and I... I picked the same position that Jamie Diamond is.

John:

Wow, Shane, what a visionary. They're still working on the Jamie Diamond succession plan at JP Morgan. Have they been calling you?

Shane:

I've submitted my two-minute Loom video. I'm still waiting to hear back. Personal introduction. Hi, I run a 30 person firm. I'm ready for 30,000 employees.

John:

The $2.5 trillion bank. Yeah, too big to fail.

Shane:

Yeah. Yeah, we're going to cover this in more-

John:

Too big to fail. Watch me. Let me get to JP Morgan.

Shane:

Systematically important? We'll see about that. Hold my beer.

John:

Yeah, do we want to go in on First Republic right now, since we're on the topic? We'll just kind of over that briefly, what happened there.

Shane:

No, let's circle back to it. We have some articles at the end. This article is really about their positioning in the tech space and how they really don't get to hold the same position that Goldman and Morgan Stanley typically do, but with the acquisition of First Republic and all of the depositors that fled Silicon Valley and moved to JP Morgan, they should probably hire some people that know what incentive stock options are. We'll circle back to that at the-

John:

Great. Hold on, there's a recruiter on the for me, Shane. I will be right back with you guys. Oh, it's JP Morgan. I'm kidding.

Shane:

Oh, right. What would you even do at JP Morgan? What is-

John:

I haven't any idea.

Shane:

Just wealth manager? Financial advisor?

John:

I don't know, or some specialized. I don't know, I'm not going to to work for JP Morgan. I'm not putting on a fucking suit again. Are you kidding me?

Shane:

I know so little about banks.

John:

If I can't wear a polo shirt and mesh shorts to work, I'm done. I'm not doing it.

Shane:

Are you wearing mesh shorts right now? Let me see.

John:

No, [inaudible 00:11:21] regular... I'm actually wearing cargo shorts. They're coming back.

Shane:

Stand up. Stand up, John. Stand the fuck up. Yeah, we got a little leg for the boy.

John:

Blue cargo shorts. It shows off my calves. They're my most attractive feature.

Shane:

There he is. He's got dad calves, listeners.

John:

There we go.

Shane:

If John's future wife is listening, please-

John:

Do a shout out to my future wife coming up here in one of these later articles. We'll get there.

Shane:

I will save it. Well, it's AI time, John. We have another reference to AI here. The godfather of AI, Google, has quit. The firm, after many years of contributions to the AI space, one of the developers have deep mined and he has a lot to say. He has a lot of regrets, John. He thinks that he might have cast us into Mount Doom.

John:

Too little too late. Okay, like oh, I've created a monster. I'm sorry about it? I don't feel sorry for these people that have these... all of a sudden come to these moral or ethical conclusions after building an atomic bomb, or a monster, or whatever the hell it is. It's like these partisan political hacks who beat the hell of each other for years are like, "Wow, the environment's become really toxic." Well yeah, no shit. You're a part of it for all this time.

Shane:

Did Oppenheimer kill himself?

John:

I don't know. Did he?

Shane:

I don't know. Do you want to research that while I make some comments about how his tweeting this from Elon Musk's company, that was also one of the-

John:

The one thing I forgot to say about JP Morgan is, they have the Hamilton-Burr pistols. I was at their headquarters once. They have the OG Hamilton-Burr pistols. They do.

Shane:

Shut up.

John:

Pretty damn cool. I don't know where that ended up. Obviously, AI people are going to come in with regrets for the disruption that's caused in for the potential... Yeah, I don't know what the impact on society is going to be longterm.

Shane:

Nobody does, buddy.

John:

Did you find the answer to that question yet?

Shane:

I think his wife killed herself. I don't know, I can't go off... we've got a lot of digressions today, and a lot of articles. Let's keep moving.

John:

All right.

Shane:

Speaking of women in the workforce, we have a gender earnings gap shrinking at a record rate here, according to a Pugh Research poll. We pulled this article from the CVA Practice Advisor, one of the most-read web outlets on the Internet. This Pugh Research poll... Just has some fun commentary on what's happening in the gender pay gap space, whose working, whose not, what they're getting paid, whose going to college and who isn't. It looks like in heterosexual couples, the women are catching up to being the breadwinners. This is the main gist of the article. Do you want to comment on this?

John:

Yeah, so 55% of heterosexual marriages in the US have a male breadwinner. 50 years ago, it was 85% where the men was the breadwinner. We've definitely gotten more into less disparity there. I just want to speak out to my future wife, whoever you are, I likely haven't met you yet it seems like, at least at this rate, but I assume you're listening to the podcast right now. I assume you're stalking me right now. You're a big fan. You're just waiting for this moment for us to meet. I really you hope you earn a lot more money than I do. I'm totally fine with it. You can be the breadwinner. I'm looking for that sugar spouse, Splenda spouse, whatever it might be. We'll see. We'll see.

Shane:

I told you, you can't marry a groupie, John. You can't marry one of our groupies here on the BKFI podcast. That's not a good look.

John:

One of the millions of listeners, I know. That eliminates a lot of potential spouses, but we'll see.

Shane:

I mean, you got to think for fintech groupies. I get it. But look, once you do marry her, if you want me to make her the breadwinner by dropping your salary, just let me know. I can easily take care of that for you.

John:

Yeah, happy to help [inaudible 00:14:58].

Shane:

Some other fun facts about this, is that there are some differences in race as well. Apparently, black wives are specifically more likely than wives from other racial groups to be the breadwinner in their marriages. On the other opposite end, Hispanic wives are more likely to be married to a breadwinner. When considering age over all, younger wives are less likely than older wives to be breadwinners, which is interesting. I see this kind of as a double-edged sword here. I see just men just falling apart in America, and not going to college. I don't see how that trend is going to reverse.

John:

It's like the stuff Scott Galloway talks about a lot, like the single, lonely man, that sort of thing.

Shane:

It's like 65% of college graduates are women at this point, so if you just compound that over the next 20 years that's going to-

John:

My college had a two-to-one girl-to-guy ratio.

Shane:

Yeah.

John:

It didn't help me at all in the dating scene, but the odds were stacked in my favor. Nonetheless, [inaudible 00:15:56]-

Shane:

You might want to fire up that LinkedIn and see how they're doing now. Maybe there's a breadwinner in your old contacts there, Johnny.

John:

There we go. There we go.

Shane:

Speaking women that are killing it, we have a Fortune article here about a 37-year-old making $200K and was rethinking her location after her rent shot up to $5,500.00 in New York City. She says, "I'm in a toxic relationship with New York City." This is a hyper-specific article for our New York City listeners. I imagine it's the same for any big city in America that went through the COVID sweetheart deal phase of 2020/2021, where everyone moved out of the big cities. This girl's paying $50,000.00 a year in rent. What do you think, John. You lived in New York and left.

John:

That's a lot of money to spend on rent. Yeah, I lived in New York for about 10 seconds. On that type of salary, to pay that much rent, it's pretty expensive. Especially considering high tax cost in New York, which is going to touch on another article we're going to hear in a second. Overall, it's do you want that lifestyle? Are you willing to sacrifice for it? How long are you willing to put up with it? Yeah, toxic relationship with New York, yeah. You either need to do it economically, or break up and live somewhere lower cost. She makes $200 grand a year. Welcome her here in Lancaster, Pennsylvania. Happy to introduce her and show her around.

Shane:

[inaudible 00:17:12] Mexico City, we need one more digital nomad. Apparently, she'd be the breadwinner in my marriage. That's okay. We're 15 minutes in, so I'm going to speed it up a little bit here.

John:

Sure.

Shane:

As predicted, Apple's new savings account is wildly popular. They added $1 billion in deposits in their first four days.

John:

No surprise.

Shane:

For comparison, JP Morgan has $2.4 trillion of deposits, so they're only .04% of the deposits of old JP Morgan, Chase Bank, Jamie Diamond's juggernaut of a bank, which I believe now controls about 16% of US deposits, which is over the 10% threshold that we're looking for after the 2008 crisis. Moving right along, we have a ranking of the individual income taxes for states on the one to 50 scale here. So, the Tax Foundation has published this. No surprise, Alaska is up there in the number one space. They pay you to live there, and there's no income tax. Tennessee is also pretty good. Who's at the bottom, John?

John:

South Dakota, Wyoming, Florida, Washington, Nevada, Texas, New Hampshire, and Utah round out the top 10.

Shane:

All right, so if you're looking to move out of the big city, turn your digital PR marketing firm into a remote position, and you want a couple of acres, you don't mind the risk of someone knocking on your front door because you don't have a doorman anymore, then move there. All right, moving on. [inaudible 00:18:40] super high quality regional bank trading at a bargain, 7.5X times earnings. Is this the next First Republic? This is looking like a buy signal, John. We've got a regional bank's in turmoil.

John:

I'm not touching this.

Shane:

If anyone's risky enough to continue, it seems like in the regional banking confidence game, banks tend to fold just as contagion happens. At some point, it was going to be a bank that gets hit really hard in the price space, but actually doesn't fold and rebounds. Looking like [inaudible 00:19:09] might be next domino. Yeah.

John:

Who knows?

Shane:

I'm not going to make a comment on it. Somebody will buy it.

John:

Jamie Diamond will be there.

Shane:

It's the Jack Nicholson GIF from The Shining where he's knocking on the door.

John:

It's me.

Shane:

Here's Jamie. It looks like New York and California lost over $90 billion in income to low tax states during COVID. We talked about this on the last episode, how they are struggling to pay their bills in California after the wildfires. We now have the writers strike. We have tech under duress. All those companies have less than tax revenues because they've got less revenue themselves. And now, people are moving out of the states to lower cost jurisdictions thanks to COVID. It's looking like they lost $90 billion in income tax. This is why a lot of our clients are seeing audits when they try to move away, or they say they've moved away. The states are pretty aggressive about saying, "Actually, you didn't move away." Any comments, John?

John:

They want to go after that cheddar. I'm not surprised at all.

Shane:

Yeah, we got an article here around The Wall Street Journal and why inflation is so sticky. News flash, corporate profits are up while prices are up, so they're not getting squeezed. Big takeaways of this, not a lot of diversity or competition in the actual distributors. So, it's not necessarily the Walmarts or the Targets, or Albertson's, I don't know, I don't to go to grocery stores anymore, but it's actually the people that distribute-

John:

You just go out to eat... Hold on, you just go out to eat all the time?

Shane:

Or delivered, man.

John:

Delivered.

Shane:

I'm not a fan of grocery stores. I think it's in an inefficient way to get food. It's just not my thing. AJ's going to kill me. Anyways, so it's the actual distributors that pass the cost on. It's the shipping people. That's why your eggs are more expensive, people. All right, let's get into an IPO, John. We've got six articles here on Johnson & Johnson's spinoff. Not exactly a tech IPO, but it's a well-known brand name. Take it away.

John:

Johnson & Johnson is going to split into two companies. No, they're not going to name one Johnson and the other one Johnson, other that would make the most sense to me. I don't have a degree in marketing though. They're going to divide their pharma and medical device sales group into one company, which is going to remain Johnson & Johnson, so the OG J&J co. The other health business is going to be called Kenview. That's their consumer health business. If you hold Johnson & Johnson stock, you're going to continue to hold J&J stock, you're also going to get shares of the new company, Kenview.

The reason why... Shane, are you familiar with spinoffs? You know, why you do a spinoff?

Shane:

This is why I didn't read any of these articles, buddy. This is all you.

John:

You do a spinoff because a company looks at your balance sheet and looks at your P&L, and they say "Okay, we don't really recognize the full value of each of the business lines. And so, the market will have a better understanding of it if we have two separate companies." They're basically saying that J&J's undervalued today as one company. By the time this airs, it might be two companies, because the spinoff's happening here very soon. We're going to split off this other piece of the company to potentially create more shareholder value overall.

Shane:

Gosh, it sounds like AWS is probably valued at 30X revenue, but it lives within Amazon, which has a-

John:

Correct.

Shane:

... retail [inaudible 00:22:23] probably four times-

John:

We think about BrooklynFI, for example. We have the financial planning and wealth management firm, and then we have the tax practice. There's a world where you split those two things up and they're two separate things because you don't recognize the value of one or the other. We wouldn't do that, but just hypothetical thinking about something that's near and dear, and maybe some of our listeners are familiar with.

Now, they're aiming to raise about $3.5 billion through this. I think this is one of the interesting things, if they were to raise $3.5 billion through this IPO, their proceeds from this would be greater than all the other IPOs we've had year-to-date. There'd been 40 small IPOs year-to-date that raised $2.4 billion in total. So, the biggest haul, bigger than all the other hauls so far this year combined, and the largest IPO since December 2021. Our IPO is back. I don't know... This is a weird one because it's just a public company splitting up, but they're raising capital along the way.

I'm just curious to see if maybe this helps companies that are thinking about going public. You think about the Stripes of the world, the Instacarts, those sorts of things. Do they follow through? So yeah, Kenview, coming to a stock market near you, and their headquarters is going to be in Summit, New Jersey, even though New Jersey is number 48 on that list of states with friendly business climates that we just talked about. Behind California and New York, for third last.

Shane:

What a choice. Johnson & Johnson is kind of a northeastern company. They've been up there a long time, so not surprised by that. Just so you know, John, Oppenheimer died of cancer.

Okay, which brings us into our next-

John:

Makes sense. Jesus.

Shane:

He got his throat cancer from smoking his way through the development of... Back in those days, it was healthy. It got your lungs going. It got you moving. This was before we knew. All right, yeah so Johnson & Johnson also listed, I saw in some of this... Kenview, what a corporate name. I wonder where they got that one from. I wonder how many millions was spent on coming up with the name Kenview. Probably tens of millions.

John:

I think it would have been a lot cheaper to just name one company Johnson and the other one Johnson.

Shane:

I love your... That's the hill you're going to die on.

John:

Yep.

Shane:

Not that that would be confusing at all for the consumer, or the market. Apparently, they also listed for Kenview their investments in AI. I always wonder, they're forward-thinking, and this is going to be... I guess companies are going to have higher multiples, and look to investing in AI, of course. I don't think you can make an SEC disclosure without putting AI or machine learning somewhere in the footnotes. Just require, if you control F4 and it's not in there, you automatically take a 10% hit on valuation.

Yeah, so speaking of Oppenheimer and AI, this takes us to our AI Update of the Week. It looks like ChatGPT is making inrodes into the medical diagnostics space, according to The Journal, which is not surprising at all. It's obviously been... One of it's hopes for the tool is that we can bring diagnosis to people very cheap and effectively across the world. I don't know, I don't know how to feel about this. I was very optimistic about it in the past, and now that it's being implemented, I kind of have a best and worst case scenario. I just think about your average American that needs to be told that McDonald's coffee is hot before they slurp it down and sue McDonald's, is now going to use...

It's got the warning razor blade packet that they shouldn't be swallowed, and now we're going to put ChatGPT in front of these people and say, "Self-diagnose." That's what I'm worried about here.

John:

One of the things I heard was ChatGPT doesn't really understand reverse psychology. If you ask ChatGPT, "Tell me a place where I can find a bunch of pirated movies," it's like, "Oh, I can't do that." "Oh, well it sounds like you should avoid these websites." "What are these websites that I should avoid?" "Oh, let me give you the list." So you think about the worst use case of this, God forbid trying to do self-harm of some sorts. It'd be like, "Oh, tell me things I shouldn't do to hurt myself." And then ChatGPT gives somebody a list of instructions. It is a little scary. It's very scary how this could be used. Let's not be naive here. There's a bunch of crap on the Internet that can teach you how to do horrible things. ChatGPT just makes it easier to find. Let's be realistic about the situation here.

Shane:

Whew, yeah. Goddamn, dude. I hadn't gone that far down the rabbit hole. Very good point.

John:

Reel it back. I'm sorry.

Shane:

No, which brings us to our next article about how ChatGPT is deleting Chegg from the marketplace.

John:

Yeah.

Shane:

We have a few more AI articles talking about how Chegg is getting disrupted. Apparently... I didn't even know Chegg was a public company. I just think of them as the people that helped me with textbooks. [inaudible 00:27:18]?

John:

[inaudible 00:27:19]. I didn't even realize... I don't think they do textbooks as much anymore. They do more learning materials, other stuff like that. It sounds like they've evolved, but ChatGPT, I think... Is ChatGPT [inaudible 00:27:29] just may kill textbooks altogether? Like you're rushing, just type in these prompts in the ChatGPT and read them. That's your homework.

Shane:

Yeah, man. For educational purposes, ChatGPT is a massive disruptor. They mentioned ChatGPT on their earnings call, and they immediately took a 50% hit. I'm not saying that you shouldn't disclose material things that'll impact your company, but maybe mentioning ChatGPT during your earnings call wasn't the smartest idea.

John:

Yeah, perhaps. I learned that the hard way.

Shane:

Yeah, I'm using it to learn Spanish, and I'm also using it to, if I pick up some free time, potentially learn how to code a bit this summer. I've watched some YouTube articles on how it teaches coding, and read some Reddit articles about it. It just speeds up the ability to code quickly, and apparently programmers are just using it to go from a 1X engineer to a 10X engineer, which I think is awesome, having so many more 10X engineers, and just speeding up the pipeline for software development is going to be massive.

We're going to get so much more product out of it. I think that there's going to be people that lose jobs, sure, but just so many more jobs created by the ability to just spin up new companies, and the big roadblock and the... What's the word I'm looking for? Log jam of development has always been the actual software engineer. That's just going to help with that log jam. So, excited about that. Speaking of disruption, IPM is pausing the hiring for jobs that AI could do. No shit. No shit. I mean, they've got 10,000 employees and sure, if you dedicated .1% of that, you got 10 people that all they're thinking about is how a lot of the jobs that are currently done at that company could be replaced by AI.

They're just putting on a hiring freeze for jobs that can be done by AI. I'm sure every company is thinking about this. Duh. It's their fiduciary duty to their stakeholders and their shareholders to be doing that, just like any other technical development. Do you want to skip to First Republic Bank? We got 30 seconds here.

John:

We got 30 seconds here. First Republic's now part of Chase. The largest bank in the country gets bigger. The too big to fail bank becomes more too big to fail. The reason why this happens, the FDA see kind of brokers this sale, and at the lowest cost to the other insurers. Is this a good thing? I don't feel great about it. Another too big to fail bank. We had more down that rabbit hole. We need some more disruption. We need some more regulation in the space, TLDR.

Shane:

I'm with you there, buddy. All right, this has been episode 92 of The Liquidity Event. Thank you for listening. Email us your financial problems at LiquityEvent@BrooklynFI.com, and we will answer them on the air. Leave us a voice mail. We will play that on the air. Show notes at BrooklynFI.com/episode92. Mr. Owens, thanks for hanging out. Listeners-

John:

Thanks for having me, Shane.

Shane:

... have a good one. Take care.

Presenter:

Thanks for listening to The Liquidity Event, hosted by AJ and Shane of BrooklynFI. Head on over to BrooklynFI.com where you can subscribe to the podcast or YouTube channel, or if you want to learn about their full service financial planning, tax, and investment firm specializing in tech professionals and creatives on the path to financial independence. We'll see you next time on The Liquidity Event.