The Liquidity Event Podcast: Episode 95

Episode 95: Big Tech, Big Sharks, and Big Boomer Billionaires

It's another episode of The Liquidity Event and AJ is back in the saddle and has a lot of catching up to do. Is trading stocks 24 hours a day a good thing? We think Robinhood's new 24/7 trading promise is bad news. We've got breaking news from the tax world too. Brace yourselves for a new IRS free e-filing system. Oh, and we have a meaty New York Times report on the greatest wealth transfer in history, with the usual wealthy white winners. And don't forget to keep an eye out for the elusive 12-foot 4-inch great white shark off the South Carolina shore. It's Jaws IRL! Get ready for laughs and financial chaos on the Liquidity Event Podcast!

Links

• Brew Another Pot, Robinhood’s 24-Hour Stock Trading Is Here

• Ryuichi Sakamoto’s management has shared the late musician’s “last playlist,” which he had prepared for his own funeral before his death.

• IRS tests free e-filing system that could compete with tax-prep giants

• Big Tech Resumed Hiring Foreign Workers Just Weeks After Layoffs

• The Greatest Wealth Transfer in History Is Here, With Familiar (Rich) Winners

• S&P Sheds $500 Billion from Fake Pentagon Explosion

• Elusive 12-foot 4-inch great white shark Ironbound found swimming off South Carolina shore

• CAVA Group IPO

Airdate: 05/26/2023

Read the Full Transcript:

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 Brooklyn Fi, each episode will take you through the week's news on FinTech, IPOs, SPACs, founder wins and fails, Crypto, and whatever else these nerds think is interesting. Learn more and subscribe today at brooklynfi.com.

Shane:

Hello, and welcome to the Liquidity Event. We are your hosts, Shane Mason.

AJ:

And I'm AJ Ayers.

Shane:

That's right, baby. She's back in the seat. She's back from Japan and she's ready to dissect the news with you, dear listener. This is episode 95 of the Liquidity Event.

AJ:

Oh, you learned to speak Japanese.

Shane:

Ah, see. Hi. And this is being recorded on May 24th. It will be debuting on May 26th. In this week's episode, we will be discussing an IPO. Hey, finally, a little something, something in the liquidity markets as well as how to get a 1% mortgage. You only got to put 1% down to get a mortgage from Rocket Mortgage. We got a bunch of boomers moving into Europe, and finally, some tax updates for you in the state and local income tax space. AJ, how the hell have you been?

AJ:

Oh, I've been great. Thanks for holding down the fort for me while I was gone. I know you had an interesting cast of characters through here. I thought all of your co-hosts did a great job and you did a great job as you always do, but I am happy to be back in the States. Happy to be back on the Liquidity Event. Life is good.

Shane:

Give us an update. Where have you been?

AJ:

Where have you been? I went to Japan for two weeks. I was totally oh, oh, oh, which was awesome. Saw the whole country, was way up in the north in Hokkaido, all the way down to the south in Matsuyama. Lots of quiet reflection and a lot of Rosi food. 10 out of 10 for me. Then I went to San Diego for a financial planning conference, which was lovely. Shout out to NAPFA, and then I spent some time with my business partner in Mexico City last week. And you were there too. It was great.

Shane:

I was there. We were there. Yeah. We ate Kings for four or five days and then I think you were on a flight during that Wednesday, so we didn't record that day. Cody filled in. Yeah, we had a great time while you were gone. Happy to have you back. Thank you to John and Cody for killing it while they were out. What else is going on with you? Anything different? Are you reading anything? I see you're back in Brooklyn. What's up?

AJ:

I'm back in Brooklyn. It's hard for me to concentrate because I'm seeing my favorite band of the moment and my favorite band from eighth grade tonight together in Brooklyn. I'm walking to Barclay Center to see Turnstile open for Blink 182, and life honestly could not be better. I'm very much looking forward to that.

Shane:

All right.

AJ:

And I know you could care less.

Shane:

Yes.

AJ:

You hate pop-punk, right?

Shane:

I don't hate it. I just don't care. It's just like-

AJ:

Yeah, it's all good.

Shane:

It's just so on the sleeve. It's just basic to me, but that's cool. I don't hate it. Good for you.

AJ:

Wait, I want to plug my travel hacking webinar, which is happening next week on May 31st at 5:00 PM. We'll have a link in the show notes to register. I'm going to talk about all the things we've learned over the past five years about what works with credit card hacking, how not to make yourself crazy, and how to actually travel for free. Always use Delta. That's our vibe. What's going on with you, man?

Shane:

Ah, man. Yeah, I feel like I haven't learned anything about travel hacking. Actually, every time I travel, something goes wrong. I just got back from Puerto Escondido this morning, and I don't know, I just feel like you're, you never get it right. You never really stick the landing. You don't get the perfect hotel or you leave something, but that's my thing. I always lose something every time I go, like why did I bring my favorite hat to the beach?

AJ:

Sounds like you need to attend my webinar. I can't save your hat, but I can't save you 500 bucks on hotels.

Shane:

Right, yeah. I'm not a hotel points person still to this day, funny enough. But no, I'm sure that webinar's going to be great. I need to figure out how to use my points as well. I think I've got like $25,000 in points for any single ladies out there listening. Speaking of single people, looks like Robinhood now allows you to trade 24 hours a day. I just haven't run into the articles here. Glad to have you back, AJ.

AJ:

Let's go for it.

Shane:

Let's do it. Okay, cool. So episode 95, breaking news. Apparently Robinhood is opening up trading windows so that if you wanted to, you can now trade stocks with other psychos that are trading after the market is closed. Robinhood now allows for 24-hour stock trading. Is this the beginning of the end, AJ?

AJ:

Yes. I mean, I'm excited for the decline of the male race because this is going to lead to early death by stress, and premature heart attacks.

Shane:

Excited for the decline of the male race. What other races are there out there? We got men.

AJ:

The age of men is over. To quote, one of my favorite orks.

Shane:

The age of orks. What's his name again?

AJ:

Orank?

Shane:

He's not in the books, so it's like it's a tough one.

AJ:

Yeah. He's the one who looks like Weinstein, right? That's the one that I'm thinking of. The ork-

Shane:

That looks like Weinstein. Yeah. So what is your take on the 24-hour trading window for Robinhood investors?

AJ:

I don't think it's a good idea. I think markets already have trading windows for a reason, and that we kind of need to give the market a little bit of a rest? Crypto trades 24 hours a day, and we've kind of seen how volatile that can be. So I don't think this is a great idea to give Robin Hood's customer base, as we know, is typically younger men and to give them more reason to be stressful, and as we've seen, touching your portfolio more and making trades often leads to diminished returns. So I don't think this is a good idea. I'm anti this. What about you?

Shane:

I think if that you are professional enough trader to actually know what the hell you're doing you're not using Robinhood. This is my take on this. As we all know, the more screens you have to trade with, the better a trader you are. So trading from your iPhone-

AJ:

It's directly correlated. Yeah.

Shane:

Yeah. We all see the studies on it.

AJ:

What are you up to? 24?

Shane:

Well, I'm not a trader. So now that I've finished trading, I'm just down to my two screens.

AJ:

Wait, speaking of screens and breaking news, this didn't make it in, but I got an Instagram, I don't know if it was an ad or a advertorial or whatever yesterday for basically like a Minority Report style, virtual monitor system. So you could actually have your 17 screens in virtual reality with some dorky looking glasses, which is great.

Shane:

Augmented reality.

AJ:

Augmented reality. Thank you. Yeah, thank you. So yeah, the Minority Report, like Tom Cruise, moving the screens around. That future is close it seems. I'm super down with that because we both travel a ton and I bring my little travel monitor, which isn't that great and is pretty bulky when you're trying to do carry-on only, which always carry-on only. Anyway, I would love to see... I would pay a lot of money for a augmented reality, multiple screen glass to laptop situation.

Shane:

Yeah. Strap me in, baby. I'm ready for a Philip K. Dick style future. Which Philip K. Dick would you want to live in?

AJ:

I am not. I haven't gone deep. I've only done Hitchhikers.

Shane:

What is Hitchhikers? Hitchhikers Guide To The Galaxy?

AJ:

Yeah.

Shane:

No, Philip K. Dick, Scanner Darkly.

AJ:

Right. Didn't he write Hitchhiker's Guide to the Galaxy?

Shane:

No, no, that's a different-

AJ:

Oh, that's my bad.

Shane:

Forget his name. All right. We'll have to circle back on that one next week's episode. I won't call you out for that. I think that guy only wrote Hitchhiker's Guide, but he wrote all those books and the killed it. Phillip K. Dick was Scanner Darkly, Blade Runner, essentially.

AJ:

Oh, Douglas Adams, yeah.

Shane:

Yeah.

AJ:

Right.

Shane:

If you had augmented-

AJ:

Yeah. No, I'm not familiar.

Shane:

Reality headset in front of you. You could have quickly Googled that off to the side with just your eyes. Philip K. Dick also wrote Minority Report, right?

AJ:

Did he?

Shane:

Did he?

AJ:

I don't know. I think we might need to roll this back.

Shane:

I think we might want to go to the next article here before we display anymore lackiness.

AJ:

Yep.

Shane:

This is a bit of a left turn. I'm down to discuss this article, not sure where this came from, but Ryuichi Sakamoto's management has shared the late musician's last playlist, which he had prepared for his own funeral before his death. I guess there's an estate planning angle in here from Pitchfork around choosing your own playlist for your own funeral. What are your thoughts?

AJ:

I put this in here. Yeah. Sakamoto like Japanese, just legend who I don't know, when he died, he who was very intentional and thoughtful about his death and kind of the soundtrack to it, and I was just thinking about my own death and remembered that I actually put my funeral wishes in my will, so my will actually states that when I die, I'll be cremated and that a particular song will be played at my funeral. Those were my last wishes, and I was just curious if you thought about that at all.

Shane:

Yeah, I'm pulling up my funeral playlist here. Let's see. It's got three songs on it, Paper Thin Walls by Modest Mouse, Rolling with the Flow, Charlie Rich, Clean Elvis by Dan Reader. I figured I'd have some more time to build this out, but every once in a while.

AJ:

Well, it's memorialized here on the Liquidity.

Shane:

I do add something, yes. In case it gets deleted when I get deleted.

AJ:

Even though your will is not notarized.

Shane:

But no, yeah, I started thinking about this when I created my dad's playlist, which was interesting because which was 10 years ago after he died. I put together and I have the CD and all that fun stuff. Him and I had a musical relationship. He introduced me to Marshall Tucker, Pink Floyd, et cetera, everything when I was 15, that got me started. So we had a very musical relationship and I put together his playlist just based on my relationship with him and knowing what he liked, but he didn't have any wishes. He didn't have a Spotify most highly played, which I think is even dangerous because I doubt people's most highly played songs are the ones that they want played at their funeral. Mine would be a lot of Future and Three 6 Mafia, and I know yours would be...

AJ:

It's like Led Zeppelin, Taylor Swift, and then-

Shane:

Would it be Taylor? I feel like it would be Conor Oberst or some like that. It would be very embarrassing.

AJ:

Ooh, that's not embarrassing. There's nothing wrong with emo.

Shane:

Yes, it is.

AJ:

Emo is not embarrassing. It's thoughtful. Anyway, speaking of thoughtful-

Shane:

Speaking of thoughtful.

AJ:

The IRS test free e-filing system that could compete with tax prep giants. I love the Washington Post article. Basically there's been a "free file program," so if you're just filing your federal return, you can sort of file for free. It's kind of buried. ProPublica has written great pieces about how it's not actually free and it's hard to find, but it seems like we're making a step forward to actually having a true free file system. I think this is great. It's the perfect look. The private sector has been trying to solve the tax problem with more money than the IRS has for the past 15 years. So they've got the tech, so hopefully the IRS can get it together with their new budget to use and explore the market to see what is the best UX and UI design for the taxpayer to actually get their taxes paid. Thoughts?

Shane:

Yeah. This has been a problem for 10, 15 years for the history on what's going on here. The IRS doesn't have any money or didn't have any money for a super long time, so in an effort to create a system to allow people to file their complicated taxes for cheap, we went into a private-public partnership with H&R Block and into it, and they fucked it up and steered people towards their paid platforms for years. And there was a lawsuit that we discussed on, I don't know, two or three episodes ago that they've lost and they now owe a couple hundred million dollars to citizens, and finally, the IRS has money now and they're rolling out their own version of it.

So yeah, this is the private-public partnership that we deserve. I think as a country defunding the IRS, leads to class action lawsuits and abuses by big tax and big accounting, Intuit, et cetera, and yeah, let's finally turn this corner and make it a lot easier for people to actually file their taxes without Intuit pushing some poor people towards a platform that they have to pay for unnecessarily.

Lets finally in 2023 have some tech run by the government that works. Yeah.

AJ:

I was trying to think of tech by the government that works. I don't know, a lot of the border, like at the airports-

Shane:

I was just thinking that. Yeah.

AJ:

Biometric scanners, that's starting to work. Global entry works. You get off the plane, you roll, it scans your eyes and you're through. I was like, whoa, that was cool.

Shane:

Yeah, that just happened to me too.

AJ:

Yeah.

Shane:

Because I bitched about this with you for a year where my global entry expired during COVID and then it took a year to refresh. That's a bad example of government working, but then it finally worked and it came back and you don't even have to fill anything out anymore. They just scan your eyes and move along. Yeah. That's freaky.

AJ:

That's pretty freaky.

Shane:

You going to talk about that during your travel hacking webinar?

AJ:

I am indeed.

Shane:

I see you adding it to the slides off this.

AJ:

Google add my slides. Yeah, I am. I'm going to talk about the programs that are worth it and the programs that are not. Most of them are worth it. Spoiler alert.

Shane:

Give a program that's not worth it. Live on the podcast.

AJ:

Ooh, I was just thinking about this. I think I'm over priority pass. I think priority pass is not worth it if you don't have a credit card that already has it.

Shane:

Disagree. Have me on your webinar.

AJ:

Okay.

Shane:

It's saved my ass in some corners of the world that don't... The lounges are-

AJ:

Fair enough.

Shane:

Yeah.

AJ:

Fair enough. Well, the webinar's going to have this whole matrix about how much you travel versus how much you should spend on a credit card, so it's not just going to be like... I feel like the problem with travel hacking not to derail everything is like, travel hacking's like do these a hundred things and you'll save all this money. Well, yeah. The first thing we need to know is how much money you're spending on your credit card each year, and that determines what kind of travel awards credit card and what kind you need. If you're traveling twice a year. Yeah. Don't spend 500 bucks for lounge access. That's not worth it. Well, this might be, depending on how long you're stuck in the lounge.

Shane:

It depends. Yes, for sure.

AJ:

Anyways, yeah, we could do a whole podcast on travel of what we learned in the past year in travel tech. Maybe I'll do that when we're at a conference one of these times.

Shane:

Speaking of international travel.

AJ:

The segues are pretty good today. I would say.

Shane:

Leefang.com reports that big tech has resumed hiring foreign workers just weeks after their big layoffs. Apparently H-1B visas, which we've talked about extensively here on the podcast, the applications by big tech companies ticked up despite laying off double digit percentages of their workforce and all this talk about not meeting or having too much capacity is not reflected in the applications to bring in overseas workers. AJ, your thoughts?

AJ:

I don't know. I think this was a little overblown. You have the data, you lay off 12,000 workers. We don't know how many visa applications are actually filed, and the New York Post did a little bit of a deeper dive and actually talked to Google and Google's statement was, these jobs are not replacing the roles impacted by our workforce reduction, or a lot of these are just renewals for skilled workers that we already have, so this feels a little bit like crying wolf to me.

Shane:

Disingenuous?

AJ:

A little bit like drawing conclusions based on some nice data points, but yeah, I mean, they made some decisions about cuts that needed to be made based on their P&L and then they might have realized like, oh shit, actually we need some more skilled engineers and these people are going to be cheaper, so I don't know. I could see it both ways.

Shane:

Yeah, I mean, I would love for the H-1B program, which is I think very successful to just be doubled or tripled. Honestly, I think the roadblock or the log jam for most tech moving forward is in the engineering department, and there is worldwide so many brains that we could drain by bringing them over here to the United States according to this program, and I think it would help a lot, not only with unemployment. We have unemployment, high inflation and the lack of skilled workers here in the United States. I guess we have very low unemployment actually, so I'm looking at this from the perspective of the companies actually, having very low unemployment means it's very expensive to hire, so it would help keeping expenses of corporate America down by adding more engineers, help with a log jam.

AJ:

Does this lead to job creation? If you hire more skilled workers to develop better tech, does that create more unskilled jobs? Trickle down brain drain?

Shane:

I guess these tech companies are... Trickle down brain drain? I guess these tech companies have created AI, which people think is going to delete jobs, but as we know, technology usually just creates new types of jobs.

AJ:

Exactly.

Shane:

Yeah, I think that this would pull the future forward, some people like to say, expanding H-1B program.

AJ:

Side note, I looked up the H-1B program, and it's defined skilled workers and all the legislation kind of defines what it means, but there's a specific carve out for fashion models. The H-1B program applies to employers seeking to hire non-immigrant aliens workers in specialty occupations or as fashion models of distinguished merit and ability.

Shane:

In that case, quadruple the program. Yeah, tuple the program. Get those Nigerians over here.

AJ:

Christ. Okay. Anyway.

Shane:

What was that a Freudian slip? Okay. Moving on. Speaking of slips, there's going to be a lot of slips here in the near future, and the greatest wealth transfer in history is here with familiar rich winners. You like that one? Looks like-

AJ:

We're back, folks.

Shane:

We're back. I don't even know if I nailed that for the listener, but they don't know that we're talking about if baby boomers and the silent generation die via slips, there's going to be a great wealth transfer. There's a huge New York Times article about something that all financial planners know about, which is the inheritance of wealth from baby boomers, and we talk about this a lot in the industry.

We know that the baby boomers essentially born between like '46 and '70. There's about a 20 year span. The youngest ones are 60 years old now. The oldest ones are around 80, and once you tick over that 80 year old mark, then your mortality rate goes up quite a bit. So we're going to start to see the beginning of this great wealth transfer that economists have been speaking about for years, and this article has touchpoints on taxes as well as inequality. Apparently baby boomers have half, oh, not like, they have half of all of the wealth in the United States and surprise, surprise, white baby boomers and those in the top 1% have the majority of that half of the wealth, so looking really grim. A lot of inequality discussed here. AJ, why don't you dive in?

AJ:

Whew. Yeah, I mean, this article says a lot about what we already know, but displays it in a very well thought out way with excellent charts. So if we could throw up a chart to show the actual split between the generations. It's like how much of wealth is owned by baby boomers, the silent generation, gen X, millennials, and Zoomers, so check that out. What I find interesting, this just says more of what we already know, which is that boomers benefited from extremely low housing costs and also investing kind of at the right time. Basically.

They had one working spouse which could support another spouse and some kids, they could buy a house that costs a year or two years worth of salary. They had leftover cash to invest in the market, and then we saw 60 years of pretty fantastic growth in that stock market, so kind of right place, right time thing, very different situation than our Gen Xers faced, and that us as millennials have faced, so it's time to inherit that wealth. Let's take it over. Let's make sure we're in a good position to not pay taxes on it via our wonderful, generous estate tax system here, and let's take it over and buy the houses that we've not been able to afford. That's my take.

Also, there's a group in here called the Patriotic Millionaires, which is a non-profit group of Americans who want the wealthy to pay more taxes. They appear to be nonpartisan, but I need to investigate that further.

Shane:

Yeah, there's a fun old rich white dude that they interview that talks about how they need to raise taxes on themselves. I'm not talking about Warren Buffet, I forget the guy's name, but I think he's worth a-

AJ:

I was like Stu or something.

Shane:

Yeah, worth a couple mill. Did you know there's like 200,000 millionaires in New York City? It's kind wild to me. Like being a millionaire nowadays isn't really that wild anymore, so going to need some kind of new metric. Yeah. Some of the other fun things from the article is they interviewed somebody that runs this website called the Realtime Inequality Tracker. Shout out to whoever created that website, but there's not a lot of... They try to discuss some of the answers or some of the problems around inequality. They talk about a wealth tax in this article. I think a wealth tax as described by the French economists in the book, Capital is the only way to really redistribute this wealth.

I think one of the other cool ways that we could redistribute wealth is a guillotine. I'd be open to that. That'd be really fun to explore. Just starting to throw guillotines up in town squares, but hopefully we can figure something out before we get to that. They did interview somebody from JP Morgan in the private wealth space, and he did try to distract. I love his line that he gives. He's like, I don't want to talk about why the rich are rich, I want to talk about why the poor are poor. It's like, bro, do you think-

AJ:

Bro, they're related.

Shane:

Did you think about this or did you write that down in an email or did they catch you off guard-

AJ:

That's amazing.

Shane:

...when you gave that quote? Do you work for Ron DeSantis? That was a cute one. Like a real distraction.

AJ:

Yes.

Shane:

I didn't want to talk about a wealth tax, didn't want to talk about Nimbyism or how the fact that appreciation on homes is largely due to the lack of housing, which would decrease the value of other people's homes that already exist because we would increase supply and the whole baby boomer retirement relies on not building more houses because their house values would go down and they wouldn't have enough money to support themselves, but I don't want to dive into that too much. It does talk a little bit about the racial segregation that was happening, the red tape that happened around Detroit over the past 30 years, and how that kept those of color from building the same type of wealth that white people did.

It also talks about, which I thought was very interesting, something that we actually do for our clients as well. If you are wealthy, you can have a very low tax rate because you only experience realized gains on capital that you sell. If most of your wealth is made up of stocks instead of your home, then you would've to sell it, and you don't need to sell it to get the cash out of those securities. You can come up with a securities backed line of credit, and I just saw an easy answer to that problem is to put a tax, an excise tax on securities backed lines of credit. Just make the whatever interest rate you have to pay on that securities back line of credit, double it, and half of that goes to the government. Right. It's ridiculous that there's no...

AJ:

Yeah,

Shane:

There's so many ways to avoid tax. This is a tax article, really.

AJ:

I agree with you. Yeah, I agree with you. Except that I think with a lot of this, when we talk about wealth tax, I think we need to put a hurdle in place. Sure. I like your idea of taxing a security based line of credit, but not on portfolios under, I don't know, $20 million. We got to start taxing the ultra rich because what's happening is if we start taxing the newly rich, we're just going to stifle that generational wealth that's been created. If we start taxing a $5 million securities based line of credit portfolio, that's a lot of our clients. That's a lot of our clients who have experienced a liquidity event or have sold their businesses. Let's like put a bit of a higher threshold on that so we can actually tax the ultra-rich where it's going to matter and not stifle another generation.

Shane:

No, I don't like complication in tax. I think it leads us to where we are today. We have the most complex tax system in the world and the biggest inequality, so they do talk a little bit about estate taxes as well, and that's a place that's very complicated because if you hire enough attorneys, you can avoid... Even if you have more than the $24 million limit, anything above $24 million is where the tax starts. If you have enough attorneys and enough time, you can exclude hundreds of millions from taxation due to complexity.

AJ:

Yeah, I love this statistic here, which is individuals could inherit more than 30 trillion by 2045. Right? So that's the transfer we're talking about. So we have 30 trillion, but perspective estimates of that estate tax paid would be about 4.2 trillion, so less than 15% estate tax on trillions and trillions of dollars.

Shane:

Even though the estate tax is 40% just at the federal level.

AJ:

Exactly. So how does that work?

How does that math work?

Shane:

Right, exactly. Well, speaking of-

AJ:

I just-

Shane:

Go on wrap it up, land the plane.

AJ:

I was going to say, taking a big bite out of the estate tax. They found a 12 foot four inch great white shark named Ironbound, who they've been tracking for years. He was spotted off the coast of South Carolina near Hilton Head. So we are about to have a real life jaws this Memorial Memorial Day weekend, folks, so be careful in those waters near South Carolina.

Shane:

Love how the non-sequitur make it into the podcast.

AJ:

I like to keep things interesting around here.

Shane:

I like to think that one of our listeners, this article, they get eaten on Thursday by Ironbound here, because podcast hasn't dropped for two.

AJ:

I just saved lives.

Shane:

Okay, got it. My only comment here is this is how I want to die being eaten by a great white shark, and then I already gave you my funeral playlist. So a lot of estate planning on today's.

AJ:

Is that in your will? Do you actually want to be like... I think I'm your executor. Do you need me to find Ironbound? If you're sick and dying, do we need to throw you in the waters as chum for him to come grab you? You know what I mean? Do we need to engineer this for you?

Shane:

Yeah, like a healthcare proxy style. Like, oh, he's not going to make it, time to get the sharks involved.

AJ:

Exactly.

Shane:

Okay. Yeah. I got to, hold on. I'll be right back. I need five minutes.

AJ:

All right.

Shane:

Can you imagine you're on the boat and need the stretcher going up the water's chummed.

AJ:

Or holding it, and-

Shane:

Then right before I go, I'm like, wait.

AJ:

Speaking of Douglas Adams. So long and thanks for all the fish.

Shane:

Nice. All right, glad to have you back. Should we touch on this S&P AI article or should we just not believe, I don't know, that's kind of spicy.

AJ:

Oh, yeah, sure go ahead.

Shane:

Well, apparently the street.com reported an AI generated, it was talking about this... Apparently the S&P 500 shed $500 billion of value. They always use big numbers like that instead of a percentage for these articles because it gets clicks. I think $500 billion of value from the S&P 500 might be like 1 or 2%. I don't know. But anyway, so there was a blip in the market thanks to an AI generated image. I think it was the Pentagon getting hit. There was an explosion of the Pentagon.

AJ:

Fake basically a fake image of terrorist attack caused market sells offs.

Shane:

Yeah. Essentially a boomer clicked on a PDF and a virus happened, and then it caused 1%...

AJ:

I was going to say, there was a group was a text with Jamie Diamond that got way out of hand.

Shane:

All right, let's keep it moving. We have an IPO here, according to IPO Renaissance, Cava Group has an IPO announced. Oh wait, I read a little bit about this. Apparently it's a fast casual Mediterranean restaurant. You want to hit us with some numbers?

AJ:

You've never been to Cava before? Yeah, Cava's great.

Shane:

Oh no.

AJ:

It's like, yeah, it's like Mediterranean, Chipotle. It's everywhere. It's like that perfect line of, it's kind of healthy, but it's actually delicious and people go to it. But I just wanted to talk about restaurant IPOs and how they've performed. So I just took a look at five of the restaurant IPOs from 2021, not doing so well. We had Krispy Kreme, Dutch Bros. Coffee, Portillo's, First Watch Restaurant group, which is a coffee chain and Sweet Green, which I would say Sweetgreen is analogous to Cava in terms of the type of business. Sweetgreen is 80% down from its IPO price in 2021. Dutch Bros. Coffee is down 22% Krispy Kreme down 30%.

If we compare that to the market, market's down about 5% since then. So restaurant IPOs not been doing so well, so I don't see Cava going too well, but it's delicious. Another thing, I looked at their S-1 and they're basically saying, we're getting more profitable each quarter, and to me, this is a strike while the iron's hot. This is their moment to go public and they're taking advantage of it, and I wish them the best.

Shane:

Trending towards profitability is a good idea for an IPO for sure.

AJ:

Yep. Yeah, before the bottom drops out and speaking of the bottom dropping out, this has been the Liquidity Event. Thank you for listening. You can email your financial problems to us at liquidityevent@brooklynfi.com. You can leave us a voicemail at memo.fm/liquidityevent, and of course, the show notes can be found at brooklynfi.com/episode95. It's great to be back, folks. See you next week.

Presenter:

Thanks for listening to the Liquidity Event, hosted by AJ and Shane of Brooklyn Fi. 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.