E164: Zuck's Senate apology, Elon's comp package voided, crony capitalism, Reddit IPO, drone attack

I think that if you were to write a narrow amendment to Section 230 that said that these social media companies or other organizations that had certain characteristics were more liable, where today they have no liability, I'm not saying that it's right, but my read of the temperature in that room was that that is the very narrow change in Section 230 that I think they all seem to want to make. And so that seems like a very likely thing that will happen in the next two or three years.

every time there's an alleged harm that occurs, every time a kid gets bullied or beat up in school, every time something goes wrong in their life, they're going to try and pin it on social media and try and show that they imbibe something on social media that led them down this dark path. And these types of companies are going to get sued in every jurisdiction in America.

And then also explaining the algorithms, I think, is the next thing that's going to happen. People are going to have to disclose how these algorithms work.

So right now what we are doing is we are not motivating CEOs to run great companies. We're motivating CEOs to understand financial arbitrage. The result will be crappier companies that diminish American exceptionalism. That is the only outcome.

I bet you if she got paid $1 in her health care and she had to get to $80 a share, I bet you that would be an $80 stock price.

Then you got crony capitalism. You got these companies that have been around for a hundred years. The value was created by people long dead. ... they pay themselves as much comp as they can possibly justify. Whether or not they create any value for the shareholder. That's what we saw at GM.

It will have a chilling effect, I think, in how people think about compensation. It will cause companies to be even more constipated and sclerotic and unimaginative as a result of this because the most talented individual entrepreneurs now have even more of an incentive for incorporating in other places and also staying private.

Right, because 10 years later, you could do all the work and then it gets canceled.

And so if it goes out at $5, it's going to be between a 50% and two-thirds haircut. ... we talked about this a bunch, the downrod IPOs, Instacart, I think, being the best example.

And I think that that's really the thing that will determine whether it's worth 5 billion or 10 billion or frankly 2 billion.

The $5 billion valuation seems, I think, pretty good. I mean, is it down from 10 at the peak in 2021? Sure, but everything is down since that peak.

Does debt help an equity shareholder? It categorically does not. Under no world does it do that.

And the only time really to buy shares back is when you think they're undervalued.

there is this concept that Reddit has the greatest pool of data for large language models ... They have talked about they want to get paid for licensing and that if you want to use their data for your language money, you got to get permission.

It's hard to know exactly how valuable that is because we're still in the early innings, but I mean, they can definitely do something with that data. Grok's whole competitive advantage is having exclusive access to Twitter's data

But look, you have to wonder how much of this is political. I mean, Delaware is Joe Biden's state. He's the senator. There were describing how this judge was connected to a law firm that had helped Joe Biden get elected.

I mean, the conspiracy theories are quickly coming closer to reality. ... And we definitely need to investigate that, for sure. Because the FCC thing is crazy.

Depending on the action they choose, we could very rapidly find ourselves engaged in a wider regional war on five different fronts. I mean, a war with Iran would involve us in Iran, Iraq, Syria, Lebanon and Yemen where we're already bombing. So this could turn into a huge conflagration in the Middle East.

the fact that it costs thirty five hundred dollars, they have to get the price down fast enough for average folks to want and be able to buy it

You try it. You're like, oh, my God, this is incredible. And then you're like, we put it in your drawer. You never use it again because there's not an application.

It's really a proof of concept. Look, I think it's a great thing for innovation that they're starting with this, like you said, expensive headset that maybe is not that ergonomic, but eventually it'll come down and the form factor will be glasses or sunglasses.

And when it does happen, you get this lunatic fringe who unfortunately are some of the leaders of the Republican Party calling for a larger war against Iran.

Our most sophisticated industries are not showing their best in this movement. ... This is like CS 101 type stuff, guys. Door plugs. Put the plugs in the door.

One is they just can't get it through. We've talked about this before. The M&A window is even more closed than the IPO window, I would say.

There's no competition and they're charging cost plus. They're not innovating anymore. And they need competition, right? Just like SpaceX was massive competition for all of the governmental agencies around doing space travel.

there's no question that we need to shake up the military industrial complex. We need to get a lot more startups in there. There's a lot of VCs now who are funding defense startups. ... this is going to be a huge area of innovation. And I think that because of the Ukraine war, the Pentagon must now realize the urgency of being able to mass produce effective drones, as well as create effective drone air defense.

we led the Series A in a company called SailDrone about seven years ago. ... it is incredibly hard for startups, no matter how innovative we've been to break through this logjam.