Transcription
All right, everyone. You're in for a treat. Tim Sweeney was nice enough to grace us with his presence. I haven't talked to Tim in a while. Before we do, read the disclaimer. I am not a financial advisor. I don't believe Tim is. He can correct me if I am incorrect. Do not take anything that we say too seriously. We're just two guys are going to have a conversation about SoFi. We have no idea what is going to happen in the future. Everything we say are our own opinions. Please do your own due diligence and remember this is for entertainment and educational purposes only.
With that being said, Tim, how are you? I'm doing fine. How you doing? Doing good. Let's get into it. I haven't talked to you since SoFi's Q1 earnings. What do you think? The I thought they were fine. I mean, I I probably the only person that expected first quarter earnings to be lower and I said it in January because number one, the social security kicks back in for most of their employees cuz their average salary is like 200 something thousand dollars and they have a lot of highly paid people. And then you have the sentiment from the capital raise. You have some the traditional fall off after earnings uh that would affect the stock price also, but you have also have the hedging activity from uh the 2026 uh um convertibles. And there's a lot of things that and and but most importantly, they're going to increase their expenses dramatically when they announce the stable coin and big business banking. And all that investment is going to come in the next 2 years. It's probably in '26 and '27 cuz they want to get ahead of the game. So, I I expected the earnings to be lower and expected the stock to fall off. But I described it after earnings after we talked, I said for the next few weeks, look at for the stock price to fall. It will be could be brutal.
And if I'm not correct, you made some statements that you were buying. Yeah, I bought. I bought all I mean, I I always tell people I buy periodically because if it's 15 or 19 or it's not I I don't try to time it. And I don't buy like go all in like people like the habit of people let's go all in and get 10x. I'm buying it for 5 years from now. If I buy it at 15 or 19 or 20, it doesn't really matter cuz under my thesis is going to be substantially higher. And so, I time it I get the average price. So, I get when it's low I I might double up. And when I was in $4 and $5, I more than doubled up. I That's where I got the majority of my position around four to six. And so, I just buy a little bit every I didn't in April I didn't because I have two companies and all the insurances do that that in April, taxes are due in April, and I would have some other things I was doing. But, I bought a little bit. I I'm I'm I'm not might have bought a couple thousand shares, but I didn't buy anything significant.
This may come as a shock to a lot of people, but I got tempted yesterday at buying around 1570. And look, I I get taken out of context. I'm definitely one of the more critical bulls out there. And I've bought this company everywhere from 18 down to probably 550 or so. I was extremely bullish. I may have been more bullish after Q4 than you were. And after Q1, I felt, you know what? The numbers were great. Management did what they needed to do, but the market has historically sold SoFi off after a triple beat. If they don't raise guidance and they come in line with EPS even after 100% year-over-year, you can't expect the market to take them back up to 30 when they beat on revenue, come in line on EPS, and keep guidance flat for whatever reason. I have my own thoughts on rate cuts. I don't think we're not getting rate cuts. I think we're actually going to get two, but that's predicated on oil falling under 80 before July 4th. Otherwise, I have to revisit my own internal metrics on that. I I was a little I guess annoyed is the correct word with their banking aspect from not the big business bank. I'm very happy that they announced that. That's been something I've been begging for for a long time. I think the next iteration of that is wealth management. That way they can double dip with 401k plans and also put their own proprietary ETFs and mutual funds in there. I was more maybe confused cuz I seem to remember that on previous earnings calls, they said that they were in large-scale RFPs to power other banks. And then now it seems like we haven't heard anything for the past couple of quarters about it. I seem to remember they made a statement Q1 they'd be releasing some information. Maybe what they meant was the 13 deals that they released. I thought it was going to be more around the banking aspects. And now they come out with the rebat brand on SoFi tech. So I was a little confused by that aspect. Did you read anything into that?
No, listen, you said a lot of things there. Let's first talk about guidance. So >> Yeah. A people know Noto is conservative. Very conservative guy, right? More conservative than I am. But when you when he says this, we're going to hit our 60 cents guidance, if you guys you can you could probably use various AIs and if you ask the right questions, you'll get the right, you know, good answers. That's 60 cents. That's going to assume they're going to probably spend 23 or 24 cents extra in expenses, roughly total, but maybe it's maybe 20 cents extra for all these new initiatives, big banking, payments, and stable coins. And there's huge future in that, right? And but if they didn't spend that money, it would be 80 cents. And then they they'd hit 90 cents. And so you wouldn't be that upset about it. So if you think about it like they have all these additional expenditures and they still hit the 60 cents that they planned before even though it was conservative, that's not really a bad thing. He's just being more conservative. Probably most likely could have been 65 or 70 cents and probably get there anyway, but you know, they shut off credit cards and I think that was a wise thing to do because going into an environment of increasing interest rates on, you know, a lot of the people use their credit cards when they run out of money and that's and so that's what that's I think why he kind of shut off the credit cards. And so and they're not, you know, the the credit card they issued a smart card as part of SoFi Plus, they're rethinking that. He's making changes on that and they're I think they're working through what they need their ultimate uh credit card portfolio to look like. But also, you know, regarding the RPU piece, I think people got it I I think they intended to sell their bank software, but like I said in 2023, uh I don't think I know like even back then City Corp needs it, Wells Fargo needs it, but when you're doing um you know, like Oracle implementations back in the day, there's so much risk in that and they're never going to I said at the time, I said, "I don't think any big bank's going to go forward with RPU until SoFi uses the whole stack themselves and show and prove that it works." Cuz nobody wants to take the risk. I I was in a consulting with a company who was going through they had a good system, but Oracle would have been better and I said, "Do you really want to spend 3 years and all this money when you your system actually works uh and you have all this debt you want to pay down and you have you're expanding your business?" And so that's where where a lot of um banks like like Citybank and Wells Fargo where people need it, they're probably not going to um bite on that bite you know bite on the entire software stack until they know it actually works. But I think it's shifted now. I think and I think one of the things is I think they they legitimately um were overconfident in how their ability to sell that software into the big banks and so I think there was some little bit of overstatement in that and and they were encouraged uh when that was not as likely as I thought it would be. So Yeah, I also thought it would be maybe not necessarily the big money centers like City, Wells, or Bank of America, but more the regionals and thrift banks I thought would have because they just don't have as large of technology departments, etc. etc.
Yeah, and they don't have the growth either and it's it's always an issue with with um uh enterprise software like that. Um how well your current software works and what your needs are and how you're going to expand it. And now now I put in one of my posts I said it's going to be revenge of the tech at some point time. And revenge of the tech means that the stable coins and the potential for stable coins is so large and huge and white labeling stable coins for different banks um all over is is so huge that even taking a small part of that and partnered with MasterCard um we can go through the steps they're actually taking I think to to to gain that advantage in that uh market. If you wouldn't mind that'd be great because what you said to me privately a couple hours ago, I didn't even really think of that. Yeah. It's very interesting. It's kind of changing the way I'm looking at the tech platform at the moment.
Right. So let let me tell you what I thought about stable coins back when he they first announced it and why I wrote that um uh Trojan Horse series. It it is you know wealth management is key. One of the things about wealth management since I was a managing director of a big wealth management company at one time. Um it's more than just investing. I mean, the best thing piece is where you make the money, but it's hand-holding, it's estate planning, it's tax planning, it's tax investment planning. And a lot of that you can't automate. I think they're going to get there, but they're going to have to get there in partnering with like a large wealth management company and and having uh some people that have those qualifications. Because most of the wealth management of people with a large amount of money uh is a lot of hand-holding. It's like arranging for their their cars to be washed. It is There's a buying a condo or they buy real estate and you have to go go through with their lawyers and walk through them all that. And you can't do that on with with any kind of AI play. So, the best best you can do is like moderate incomes like lower wealth management clients like 1 to 10 million, 1 to 15 million dollars is is set up different types of investment scenarios. And they went a long way in this in in in their algorithm trading company that they recently acquired or the assets they acquired. And so, but when you think about this a as um stablecoins, I said this a Trojan horse because big banking like Bank of America makes a huge mo- amount of money off small business banking. But the small business banking, if you started attacking that, what you're going to have is they're just going to go to me and they don't know I don't want to change everything connected to my bank accounts and they'll give me this or they'll give me that and I'll be satisfied. Just like when you you know, direct TV or something, they raise your rates, you call them, I want a lower rate, they give you a lower rate and you don't move. That's what's going to happen. And so, that's not the entry. So, they they instead of entering through small business banking, which is really bread and butter money, they're going to enter and and and I have small business banking for my two businesses and I would uh I'd move in a heartbeat if somebody had no fees. I I get feed to death by Bank of America, but I'm so interconnected with ADP and all their their services that I have to just choke and pay it there's not another alternative. But they chose to attack it through big big business banking. And the way they they can get a foothold in business big business banking, as I said, if you could read between the lines in in all those posts I made about the Trojan horse, is they're going to back into it because the biggest need for stable coins is in Latin America cuz the inflation and the currencies aren't stable. And so two things. They They have Galileo, as much as Galileo and Texas says didn't really come through on the RFP process, they can really come through with their relationships with banks and fintechs in South America and jump-start the stable coins, which I think if you look on and ask the right questions, you'll find they are actually doing that. And once you get the those companies in in South America to use the the Sofi stable coins, even if it's a white-labeled stable coin, number one, you're going to get assets in treasury, and they're going to get some shared some shared uh uh um uh sharing of that revenue that from the 4% or 3% of holding it in treasury. And they're going to give that to their retail providers before the restrictions kick in on the Clarity Act. And so they can jump-start their infrastructure and test it in Latin America. And what happens? Those companies in Latin America that do business in the United States are going to want to pay in stable coins, and the companies that do business with them will want stable coins because of this they get the money a lot quicker and cheaper. And so they'll have to open accounts with Sofi to do that, or they'll have to open stable coin accounts, or have to buy stable coin accounts, because they're going to collect the stable coins. And then when they collect the stable coins, those big businesses and they're using stable coins, eventually that could lead to uh retail people buying stable coins, which they just announced Sofi. So if retail starts using stable coins, they could use that as payments. Now, how does this fit in with everything? Well, uh they get a huge return off their reserves. So, even if they get half a percent off and they share those returns, um they can the big argument of Clarity Act is how you can share the returns, whether you can give interest, or if you can't give interest, can you give rewards and activity-based things. That that's they're going to work a way around it. I mean, when I had I had an account at Citibank that had a ton of money in it. And when I got to a mortgage, you think I got the regular mortgage rate? No, I got a rate that's like quarter half percent 3/4 of a percent lower than market because I had so much money in their account. And that's what people do with wealth management. They lean on you with because I have money in your bank, I'm going to lean on you and get better deals. And now they'll have the money to do those better deals, not only for big businesses, but also for retailers. So, retail um bank holders that hold those accounts and and stablecoin accounts, once you get to like 50 million members, is why I say members is key. Here's what happens. You can sell the data, the data aggregation, and you can check this with AI and BIS right questions like I said again, you'll get an answer like which I showed you that once they get to 50 million dollars, they can make 250 million to 2.5 billion just selling the data. Okay? So, that's up to $2.50 a share. And when does that occur? Well, maybe they get that in 4 years or 5 years, but it's going to occur as soon as they hit like 20 or 30 million, too. They're going to get pieces of that. So, that's not baked in in any analyst. None of the analysts The problem with analysts is they will tell you what they believe the value is based on current income, but they'll also take into consideration those expenses for those businesses like the the stablecoin, the payments, and and big business banking, but there's no revenue in their models for that cuz they don't know what the revenue is. And so, they they're they're literally taught never to include revenue that they can't figure out how to discount and because it's nonexistent. So, it's too speculative. So, when you say all the analysts are at this and that, yeah, they're at that and this, but go back to 2006 and 2008 when Nvidia developed the I think it was the Codia chip. I don't know if I'm pronouncing it right. Yeah, I at the time nobody thought that was worth crap. They thought it was just a scientific basic experiment. They wouldn't saw anything. But, what Nvidia knew is they thought about the metaverse and they were thought of thinking of early thinking about artificial intelligence and what analysts came to meta? None. They didn't pick it up because it was too speculative. They didn't know. So, analysts aren't really good business people. They don't really forecast what the revenue is for big business models. And one of the reasons they don't is they can't put a discount rate to it based on the risk of execution. So, so when you look at this, you could get up to for selling just the data, you could get say say it's mid-range of that. Say it's 1.5 billion. That's a dollar 50 a share. That doesn't include any money they're going to get from their share of the treasure of stable coins. So, if you have like 50 million customers with an average carrying balance of 2,000 in stable coins, that's another 100 billion dollars of of revenue and that's another I mean, that's a 100 billion dollars of uh that they get 4% on and if they get 1%, that's another dollar a share. So, if you don't think of of what the the opportunities are, you're never going to be able to price the stock accurately. And and there's zero in that for that opportunity. Now, does it have execution risk? Yeah, it does. And I think Wall Street knows it and one of the reasons Wall Street is is concerned is they said, well, if you think about it, they really didn't hit on all cylinders on the RFPs for the big bank software. So, are they going to be a stable coin one of the leading stable coin people? Well, who knows? But, it's a bigger opportunity and you got to figure out what that opportunity is. I think it's a good opportunity for them because once you actually once you actually get people to buy stable coins and hold it, and businesses take stable coins, then there's a big incentive for people to use those stable coins. And when they use those stable coins, and then Galileo has that infrastructure, which is not going to be available to any of the regional banks, any of the small banks, and and the big banks are way behind, right? And so, the big banks will try to do it, but the I think SoFi's idea is we'll give them of the 4%, we'll give them 3.8%. We'll take just a cut. That That means SoFi then becomes MasterCard. And that's why they have a partnership with MasterCard. And so, when people start paying their bills with stable coins because of the smart contract aspect, they get all kinds of more data that they can sell. So, in the end, my last uh Trojan horse, which I never explained, MB is member benefits. And so, one of the member benefits you're going to get is data sales from those members. It's going to be huge if they do it right. Plus, another thing is, once you have 50 million members, then people come to you with specialized deals for your members, and you can get a small cut in that, and you can use that as part of your SoFi Plus to really build out uh rewards for your members. Cuz you can always give people rewards, you know, the Clarity Act's never going to they'll stop direct rewards, but you can big holders will still get rewards in different ways, just like I got cheaper loan Citigroup.
So, as a nationally chartered bank, what type of restrictions does SoFi have on being able to sell data? I'm I'm not familiar with any of that. >> They They can't sell private party data, but that's not uh you you it's hard to find because none of the banks disclose it, but they all do it. Uh they can sell aggregated data. All right? And so, it's not anything you're personal, but it's the aggregated data. All these people of 26 years old, male, in this part of the country or that part of the country. That data is totally valuable for for anybody. And it's and you know, everybody realizes that data is really valuable for Facebook, right? But what they don't know is how valuable data is going to be for people who issue stable coins and have all of that data. And even if they didn't issue stable coins, they still have a lot of data that they're capturing. They're only capturing their data. They'll be capturing all the people that use uh uh Galileo for the stable coin issuance. They'll be capturing their data also. And so it's a it's it's it's going to be eventually in the banks a war of data. Now, regarding the Clarity Act, I think big banks are going to be totally against it. I don't I don't think they're going to try to kill it. And the reason they're going to try to kill it is because if SoFi gets these big business accounts, then the next step is small business accounts that want yield on their checking and their savings. And I'm not a big business, but I have $30,000 that get nothing that I have to maintain in my accounts. And if I could get 2 and 1/2% somehow or special benefits, I'd move I'd move just if they got rid of all the fees. And so that that's the vast and that's the big fight. So when you historically when you talk about big business, I've always thought that's the huge fight cuz that's their bread and butter. They can let depositors go here and there and they're not going to pay them any kind of interest on their deposits, savings accounts, and everything. But big business is the core of everything. If big business leaves in the wealth management, you know, people that are have a lot of money own businesses and they do they they that's why they uh um they really target wealth management every bank is cuz they have to keep the businesses. So it it's it's going to be a big battle and the question is who's going to win and who has the head start. And right now SoFi through Latin America has this head start.
Yeah, that's always been my segue into that aspect because I've always said they have the underlying technology, they have the platform, they already have invest for private clients. They need to get into wealth management, they need to become administrators of 401(k)s, 403(b)s, because they already have the SoFi branded ETFs and mutual funds. They can double-dip very quickly, just like an Empower or Vanguard or State Street, whoever's administrating the retirement accounts, because not only do they get the fee for just holding everything, they get the expense ratio on the actual funds. Right, that's exactly right. But that mostly has to do with big business banking rather than wealth management. So, but but but wealth management is it wealth manage everybody chases wealth management because wealth manage good wealth managers make a lot of money. But you know, good wealth managers make like make money because the guys that run the investment port of that portfolio are really really smart. And they make you a lot of money. And so there's high demand. SoFi has Liz Thomas, who's becoming huge on CNBC, that can just head it up. Put her face on there, that would be a big segway in for private clients.
>> I'm going to call her and I said I I need your help. I want you to arrange with my lawyer to buy an apartment building in South LA. How they going to do that? Because that's what wealth managers do, right? And uh uh manage my household, I have five maids and everything. Make sure they get paid. Maybe you you have you know, each of these wealth management family offices is just a a business. They they treat it like a business. I mean, I have a a big a big house and it's it's almost like a business. It's like every day there's something wrong. You know, like uh something's leaking, it needs repainting, needs more roofing, and stuff. When you have a big house, you have a lot of expenses. And these guys have way bigger houses and multiple houses, and they you'll have one wealth manager that will just keep track of people's real estate. And and because they don't want to spend all their time uh managing their business. And so wealth management is actually kind of business management, too. So, but you're right about the business, but that business is hard to get, and and this is the way I think SoFi's going to get it. And and so, you can question whether they can um uh uh obtain that and and execute on that. And and so, there is some execution risk, but you know, if you talk The numbers are so large. I actually didn't really want to tell anybody what the numbers were because it's like there's so many uncertainties on how to get there, but they're big numbers. The data The data is big number. The stable coins are big numbers. And you know, they don't need to get those numbers, they don't need 50% of the market. They can get 5% of the market and get those numbers. And uh so, so I think they're on the right track. I mean, uh people complain sometimes about Noto, but he's going to be conservative. And and I think you need to change your thinking.
Okay. >> Part of your thinking Part of your thinking is well, they're capped because they're a bank. So, they're capped at at at uh tangible book value. But I want you to think about is not it being a cap, but it being a floor. Because all the other stuff they're doing can be exceed that, but in the end, they may not fall below the floor of tangible book value. And this is a different way of looking at it. Uh because you're not really capped with all these business expenses when you're when you're when you're when you when you naturally expand into other businesses, your EPS should take a hit because you're expending tons of money that you're not getting any revenue for 12 to 18 months, or maybe even longer. If you had a restaurant, you expanded I had a restaurant that was cruising a million dollars a year. I used to own a few restaurants. And I Every time I started a new restaurant, it's like my old restaurant wasn't performing as well. Well, it was, but the new restaurant was sucking up expenses, and so, together, it wasn't worth as much as the old restaurant was worth apart. So, that's partially what you're seeing here is is is the uh Wall Street trying to determine what the execution risk is. So, when you look at SoFi, and this is an age-old question that I've debated with Tanner, Teves, Chris before he started working there, Roy, how do you value SoFi? Is it a bank? Is it a financial institution? Is it a hybrid? Is it a tech company? Or does that not even enter into your framework and you look at it more as how much of the market can they capture? What additional businesses can they get in? And you're just looking at it from a straight business standpoint.
Well, I've handled valuation cases for companies and real estate, hundreds hundreds of cases, right? And it all money's fungible. So, when you say uh it doesn't deserve a tech multiple or Wall Street says it doesn't deserve a tech multiple, that that's that's like a framework that they put on the stock, but you really need to value stuff based on how much money it brings in. So, if I said, I have this great software company, it it it's not selling much software, and its its margins are really small, you wouldn't give it a tech multiple just because it's a tech company. So, you wouldn't give it a bank multiple if it was just a bank company unless it was just a mature bank. And it's not a mature bank. Even I wrote a post a long time ago when Bank of America came out, I go, "The guy's stupid in how he does it, but if you take his numbers and give the proper tangible book value multiple based on growth, it was about four." So, four to 4.5. So, I still think it's about four, but book value is 750. So, what Noto did as part of these raises is he was setting up helped set helping the establish a higher floor for his stock. So, you can't really people don't understand that because people want I want my 10x this year, I want my 12x this year. They're not thinking long-term business, but he has to think of what's in the interest of shareholders and and his employees for the long term, not just what they can do this earnings to boost earnings. If he did that, he just used his 1.8 billion to start buying back stock, but that's not that's you you then missed this whole stablecoin opportunity. You missed the Nvidia when nobody thought that chip was worth anything in 2008 and I had I I think about 10 or 15,000 dollars of stock back then. And I it turned into a million dollars.
I hope you held it the whole way. Yeah, I I wrote it all the way to a couple of years ago and then I bought a place at the beach with it. So now it's my Nvidia beach house. It does not suck at all. No, and and it's because I always tell people they go, "Well, well, you could have wrote it with Did you think it was going to drop?" I go, "No, I didn't think it was going to drop, but at some point you you just don't want to count numbers on a sheet until you're dead, right?" Yeah, I hear you. It It was Nobody ever got hurt taking a profit. Right. So, it's like uh but um I think there's a lot of opportunity at SoFi. I don't like any of the banks I've ever done business with. I continue not to like them when I do business with them. And when you have people that don't like businesses and new business, I like SoFi. I'd bring my business banking over there. I've never had problems with SoFi. I like being able to uh go on use their app. Their app is doesn't have to be that complex. It doesn't have to be Robinhood for me. Um uh I did a lot of I did a lot of transactions earlier. I mean, people are jumping into memory stocks and I started to laugh. I go when when I saw the title that that he that that Tanner put on it was like, "Do you sell SoFi to get Micron?" I don't know if you know it, but have you ever heard of a company called Iomega? Is that the company from like 20 years ago that had the bigger hard disk that with the external drive that you pop in? Right. They had the Zip They had the Zip drive. It's called the Zip drive. And when it used to be like you get 512 K and people were developing the 124 K floppy disks and and they came along and they had like, I don't know, 10 megabyte or 20 megabyte disk. And I bought [clears throat] it at I bought it $10. I kept buying it in like that year all the way up to $90. At a $120, I calculated that I said I said, "You know, they got to sell like one of these to like everybody in the world to maintain this valuation. And I so I sold it all and one of the reason I sold all of it is because thumb drives were starting to come out and flash drives and I go, "That's going to kill their business cuz you get a flash drive with 2 megabytes, you don't have to have this big disk and carry them like it's like VHS versus like having it online." And so then then I bought Sandisk. And then I wrote Sandisk up in in 2006, I sold it because I wanted to do something else with it. I sold it right before Sandisk, the memory, fell 70 to 80%. So, memory stocks are great and they make tons of money until some technological advance makes them worthless. And Sandisk I'm surprised Tanner used that title because I never said I was exiting something to acquire something else. I was actually live and what I said was after going over the analyst expectations and running my own numbers about where I think the AI buildout starts to slow down, I think they're wrong on the 2028 projections and I know I can't call tops and bottoms. So, I decided I was going to buy Micron at 709 and if it fell to 600, double down, fell to 500, double down because I think the the several year thesis is intact, but that's a story for another day.
Somebody reached out to me. It was not you, not going to say who it was, and it was specifically about SoFi's multiple. And I'm going to paraphrase what was said. They said to me I should consider looking at companies like American Express because they trade at a higher multiple. They're also I didn't even realize American Express was a bank. That you can get checking cash. I actually did not realize that. And said, "Most trade at a price to three year uh normalized EPS growth of 1.2x. SoFi grows at roughly 40% and it's expected to grow to 40% over 3 years and 40x at a 1.2 becomes 48x 2027 EPS of 80 cents roughly 38 bucks a year from now. And I started doing the math and I'm like, you know what? That kind of makes sense in a way. It's all how you look at it. It it If you're looking at just the numbers, you're never going to How much how much in that analysis for SoFi included any money for stablecoins, any money for big business, any money for payments because they have none right now? So, when you're projecting stuff out and you say, "Oh, it it could could increase 10%. I think it's going to be $38." You're you're you're just like an analyst. You you know, and and I've done evaluations court cross examines and I've done it both ways. I said like, "Oh, how can you even expect you don't have any numbers? This could be zero, could be that zero." And you just try to convince the jury or the judge that it would be zero and they don't have any evidence and then their valuation's terrible. On the other hand, I've been in evaluations where I say, "Look, if we can we captured this, we've done this and we do this, we could get this." And then I convinced juries and judges that the future business is worth a lot of money. Um you got to figure out like, if I if you're going to go buy a business, would you care about the multiples or would you care about what the income was and how you could use that income and grow that income? I mean, I think I think Wall Street carries talks about multiples, they talk about everything. They're overlays to everything so they can compare companies and I get it. But that's not how I'd buy a business. I mean, and I I I view buying SoFi stock as buying a piece of a business. And so, uh I don't really care if it goes down. I mean, if I had a restaurant I was expanding and I'm not selling, uh do I care if nobody wants to offer me money for my restaurant? No, I'm going to make sure I do the right business. Uh and I know people don't think that way and I know there's people that are more of trader than I am, but I used to be a trader and trust me, you have to watch that stuff every day. I used to do a lot of options. I was like three times my income I was betting on options like every month or every couple months and I was like going to my job at at 6:00 in the morning and I didn't really start my job till like 11:00 or noon when the market was starting to close cuz I was on that back in the day I was on with my broker like every 20 minutes talking about what I need to do because the fluctuations are pretty great. And you're not going to be as good as Wall Street. So you're going to you're going to have to take less or get screwed cuz that's like part of the reason SoFi stock fall is the hedging of the transactions, the delta hedging of the convertible where they sold short and when the and when it rises in price even though they're protected, there is some portion of them that will buy the stock to cover that short because they think it's not going to go down to where they don't need the short anymore. And then the cap call transaction people when the price goes up, they have to buy more shares because it was so underwater. They might have sold shares and I don't know exactly how that plays out, but it's part of the process. And that's why when you do when you enter a convert, it drops 10 or 12%. That's why in 2024 when I said it's going to stay $6 for the next several months, I pretty much knew that the 2024 when they engaged in the 2029 uh um convert that that was going to hold it down because of the hedging. It's It's just It It It happens.
Yeah, you said something important that and a lot people do not look at buying stock as buying ownership in a company and they don't think about it as long term. So many people see the memory companies or AMD and Broadcom jumping as much as they did and they look at SoFi going the different direction. They look at opportunity cost. They don't look at growing the business and what it can be in four or five years from now. So if I go from 33 to 16, yeah, okay, you for me I don't see as big of a number on that line item in my account, but it doesn't impact me. And other than going forward, I still think it's a great business. Still think it's going to do good things. I just get annoyed at very specific subsets, but the members are what matters. 4.7 million members. They continue to grow. They continue to siphon off of everybody else. If the product wasn't good, they would not be scaling to an S curve of their members. That's the most important thing of the SoFi story because it shows, at least me, what is attainable in the future and branching out onto the business side, what they can potentially replicate, also.
Right. So, what So, if a couple things. Number one, everybody mentions opportunity cost. I see it in acts all the time, but the opportunity cost. Yeah, if you're a great picker, if you're going to pick the next one, I mean, these are these are companies I told the people to sell their highs. Uh PayPal, what was that opportunity cost? What about Hims? What was that opportunity cost? What about Hood? What was that opportunity cost? What about BMR? What was that opportunity cost? You got to be able to be a picker, right? You can't just assume that you're going to pick the next 10X. I mean, I mean, you guys and Tanner and Tevis and Roy and all these guys, you guys pick some great stocks. I go, you know what? If I had more money, I'd be interested, but I don't want to watch all these things. I just watch SoFi and it takes enough of my time at night when I'm taking care of my son that I Like last night, I posted something at 3:30 in the morning. It was like cuz that's the time that he decided he wanted to go to sleep. So, then I had to go to sleep. And, I do a lot of other things. I do music. I do other things, but opportunity cost Yeah, if you're that great, go for it. I mean, if you think you can pick the next 10X next year, sell all your SoFi stock and pick it. Go with it. I've been here And, I say it all the time, my crystal ball must be broken because I don't know where they ordered their crystal balls from cuz I certainly didn't get one.
Well, it's because you hear things, right? Like I'll give an example. When I was an I was associate in the law firm, I was a third-year associate, and I was making more money in the stock market than most partners made. And, so the partners were like, "What are you doing?" And, I go, "I'm not going to tell you what I'm doing." And then I go, "You don't pay me for advice." They go, "Well, you work here." And I go, so I give them advice and I'm going to buy this. They go, "Well, I talked to my broker. He thinks that's stupid." Right? I bought TCI options. 30 20 20,000 shares, 30,000 shares, 50,000 shares at different points. And uh uh they're like, "My broker said that's a mature company. It's screwed up. Da da da da da da." And then I go then when I made like a couple hundred thousand dollars in one day because they got bought out then they came and said, "Why didn't you tell me to do this? Why didn't you tell me it was going to be bought out?" I go, "I didn't know it was going to be bought out." You think I I mean I got contacted by the SEC cuz I tried to sell them the day before. They I mean the the they expired on on Tuesday and I or Friday and on Tuesday I tried to sell them for a 16th. And then I I I put in the order and before the order was was before I then I called back and said, "Cancel the order. I don't want the 16th." They go, "Why don't you want it? It's like a lot of money. It's two or three or four thousand dollars a 16th." I go, "Yeah, but I when I TCI got bought out, I had options. I sold them prematurely. I could have made a lot of money and I've already made a lot of money in the stock trading the the the the options for like the last two years. I don't really care." And the next day uh these these were 30s. I had 25s and 30 calls $30 calls and they I was in Shave and I remember it turns out they go, "Oh, and they just just got bought out for $34 a share." And I go, "God, why can't that be my Why can't it be TCI?" And they're like, "And it's TCI." I go, "Holy I'm >> [laughter] >> I'm rich." And I I was only like 27 years old at the time and it was, you know, basically three times my salary in one day and I was like uh um but a lot of stress. And I don't want to that much stress anymore and watch that stuff and and and you know, I've had Here Here's the thing I tell people. Why don't you do that? I said, "You know, when I did that, I made hundreds of thousands of dollars." You know, like I traded Microsoft. I traded Apple. I made hundreds of thousands of dollars. I'm like, go back and see if I would have just bought their stock periodically and held on, I wouldn't be 100,000, I'd be 100 million dollars. And so, I've learned that lesson. And I think people that are new to investing haven't learned that lesson. Just like they don't learn diversification. They say, "Well, you have a lot of SoFi stock. You don't have a lot of other stock." Well, I have a trust that has some other stock. You have a number of other holdings. Other holdings. But I also I also have 90% of my money in very expensive real estate. And so, I don't really need the money. And I have income from my business. I don't need the money. So, so uh I view it differently. I view it as a long-term play. I think there's a lot of opportunity. I don't like big banks. I like Noto a lot. I like their management team a lot. Uh you know, I've been pretty ad- advo- I've been an advocate for them challenging the short reports, which is just kind of almost all BS. I mean, I found hundreds of thousands We should If you want, I mean, I'm not going to put you on the spot. I'll say what I think. I think that they just didn't do their research and the price happening to fall is just coincidental. Cuz I
I went through that short report several times. And I really did not find anything that seemed like it was researched that well. Especially the net charge-off part where SoFi clearly states what it would be in all the different scenarios. Yeah, they they used a My my best guess is they used AI for it. Because when I put in what they said in AI, AI agreed with it. And I started arguing with AI. I go, "That's not the accounting treatment." They go, "Oh, oops. They're right. That's not the accounting treatment." Oops, you're right. And then AI does, "I'm sorry." And And so, I think they didn't And they didn't know the business. It's just like It's just like the UCC forms that they're relying on. It's It happens in every every every type of security type transaction, loan transaction. It happens all the time. It's meaningless. Um and And they held their hat on it. but but you know, you can see it didn't do anything.
Yeah, I I was not a fan of it and I always like seeing the other side of it because I'm a super bullish on SoFi regardless of how annoyed I get at the tech side of the business or disagreeing with people about the valuation, I think Noto and the management team does not get enough credit. They managed their way out of a situation that I would argue 95% of management teams would fail on because they had a grow a business adjacently when their main business line was capped. And not many management teams would be able to do that. This is a phenomenal team.
Yeah, you you have to you have to You have to look at it like this. It's like remodeling a house or or you know, buy a house and you're going to add on to it. Uh, you make one mistake in the foundation and it's going to cost you your whole house. Or like a business, you you expand your business too fast, it costs you money. Nobody ever lost their whole business by expanding too slowly. They lose it by expanding too rapidly and because the cost, you know, like this. So people like going, "Oh, why are they putting more money off the loan business platform and putting it on their books?" Well, they're putting them more on their books because they make more money over the three-year period substantially because the returns on those are higher and if you take the cream of the crop and put them on your books, now you've helped fund your your growing business expenses. It's a natural thing to do if you're restructuring a company, a restructuring person would recommend move stuff over there and think about this. Had they not done the capital raise and they were forced to do that because of the macro, their cap ratio would be going down to 13, 12% if they tried to do this and they would have no room to do this. And they could have been struggling for that. But the fact that they made that second capital raise put them in the position that's now at 22% or 23% capital ratio. And if they pay off this debt in cash in October, they're still going to be about 20%. So, they have a lot of safety, a lot of margin. And that's where conservative Noto being conservative actually rewards you. And I I people don't understand that. And I don't blame for not understanding it because most people aren't that sophisticated with, you know, what businesses do or the capital structuring of businesses, etc. So.
How do you feel about the acquisitions that they made? Uh I they're not material to me. I mean, they're good add-ons or bolt-ons. Uh I think I think the algorithm trading and stuff is going to be, uh, you know, important uh for people cuz if it if it works, you need to get a foothold in there. And the other business, what was the other one about? Um I forget. Orion's. I forget what the other one was. But but they're but but I I saw them as as as additive but not material. I mean, they're not material acquisitions. Otherwise, you couldn't have bought the stock. So. Uh uh their lawyers would say it's not material. It's either a multi-billion dollar company making $20 million acquisition is not something you're going to You know, I I I I will I'll I'll say this. I think there's some criticism warranted about their PR. Uh and I think being conservative, they don't want to issue PR statements right and left. And so, they're very conservative about PR, too. And I'd like them to be a little less conservative about PR. Cuz I think that would You know, just like, you know, I always advocated that that Noto should go on uh, you know, Tanner and your guys' shows. And I I said that would be a good thing to do. And so, they did that. And I think their PR will pick up, too. Just like their investor relations department's picking up.
Yeah, I would like to see them do a full investor day. I don't believe they've done an actual investor day since 2019. Right. Am I mistaken? Maybe early 2020. No, 2019, I believe. Right before they went public. I think they should do one every year. I I they're really good. I think they will, but I don't think they will in the next year or 12 months 18 months until they get big business in stable coins because that's a they're spending a lot of money. I mean, look if you're spending a couple hundred million dollars on a business, and this is what other people don't realize. They're building out the infrastructure, they're getting the engineers, they're getting the people down in Latin America, they're hiring big down there, and they're spending 200 to 250 million dollars is my best guess. Uh, you know, people can try to track that down. Um uh they're going to be spending it probably next year, too. But the year after that that's going to drop significantly. And so, if you're not you know, people think what's your revenue? Well, not spending money is the same as revenue, right? So, if you not spend 250 million, that's 25 cents of revenue or 20 cents or whatever it is based on the share count. So, uh, you know, money's fungible. You're going to ramp up expenses, and at some point in time they're going to level off or drop just like their op expense ratio has been dropping consistently. And that'll become readily a credible to the bottom line, which will have EPS jump.
Yeah, I mean I mean, if you had if you sold Look, if you sold your data for a billion and a half dollars in 1 year, and uh and you know, you saw the thing I sent you that that that's that's the AI estimate uh from two or three different AIs. And uh what's the expenses related to that? 10 million? 20 million? I mean, it almost all goes to your bottom line. Yeah, if that. I mean, a lot of that can probably just be automated from SoFi's technology. So, the expenses >> Yeah. Right. It's It's It's like the big battle is stable coins and data. That's the big battle. And you know what stable coins? You know, the deficit is so high and Bessant knows this. They need stable coins. They need stable coins to lower their base interest expenses so they can do something about the deficit. If not you know, I'm going to be glad that it's a bank that has a floor of tangible book value, put it that way. And and five-year period.
Yeah, so how are you looking at this going forward? I know that at least yourself, myself, and Roy, I believe had We were on the higher range after Q4 what we thought the potential for this year would be. And I don't necessarily look at things on a one-year basis, but we always do the one-year look. Are you looking at this as we probably have to revise what we think for this year, but long-term thesis is still intact?
Yeah, well, I like I said, I said in a post is like So So let's say if they have $0.60, but now That was actually before fourth quarter ended that we had those predictions. It was like around December 1st. And I predicted $60. And the way I thought about it is I think they're going to get $0.90 and $1.20 and for going forward, if you put it at a 50 you know, multiple of 50 on forward earnings, which was the current price of the stock at that time, you'd get $60. Now, you you have a war, you have inflation, you have a lot of these things that kicked up, and you have now also the announcement and all the spending in business big business banking. So if they're at 60 and you didn't do business bank big business banking and all this infrastructure for say $0.20 a share, you're getting the 80 and that they get the 90, they would get to 90 and they would they would hit some of the those numbers. And so maybe they only hit 50, but but now it's like the restaurant example. You're expanding your restaurant, you're not going to have the same EPS, and so you're That does two things. One is you're not going to have enough earnings to multiply, and your multiple will be lower because your earnings aren't growing as much. And so And so it's a double-edged sword. So So how that how that happens here, I don't know because if there's a catalyst the flip of this delta hedging will cause a huge like rally too. So, I don't know where it's going to end because I don't know what happens with the with the the October. Do they pay it if they pay it off in October with cash? I think the stock jumps in October because they have a lot less debt and a lot a lot less overhang of you know, they issued I don't know how how many shares did they issue? 50 50 or 50 some 50 some million but they just they they if they pay this off in cash they've avoided 19 million share dilution by paying it off. So, um uh it's kind of an anti-dilutive effect of paying it off and so I don't know what's going to happen in October. I hope they don't do another um convert because I they they really they shouldn't need it. And if but if they do need it you know, they they they should be able to show us numbers on on why they need it for business banking and stable coins and why it's going to actually ramp up the the revenue pretty substantially and in that case I'm not that concerned about it but another issuance would drop the stock 10 or 12% in October. So, um uh but I think I think any catalyst interest rate catalyst, war ending catalyst. I think the war is about a $4 charge. I think it wouldn't have fallen below 20 if it wasn't for the war and and potential interest rates. And so, I I think from 32 was built up because of some of the hedging adjustments and and and and and pretty much the stock does the same thing every earnings. It it it ramps before earnings and drops off afterwards. It's happened for like every quarter for like I don't know, 3 years. It's as consistent as triple beats. So, maybe now that they didn't have a triple beat it won't happen next time. But it it's likely to happen because traders follow the same methodology until it stops working. So, you're going to have the ups and downs. I don't really pay attention to them as much. I mean, I look and say, "Oh, I'm I lost X hundred thousand dollars today." >> [laughter] >> It was like I don't know but I I don't really look at it that way because I look at it what what the stablecoin business is going to be like, what's the big business banking going to be like, are they going to be successful? How are the big banks going to deal with it? The Clarity What happens if the Clarity Act gets stalled? Cuz I think big banks aren't ready for it and they're they're afraid of losing their big you know My personal viewpoint is they're stalling stablecoins cuz they're not ready and they're afraid of losing their business business their big business accounts because and their small business accounts because they don't pay them anything on their deposits really. And what if the Clarity >> Act go through? Cuz I know that they voted it in. The Clar- The Clarity Act was approved by the Senate, but it still has to be approved. I mean I know it was approved by the Senate It was It was It was voted out of committee along party lines, but you know, Congress doesn't do things for the good of the country. Congress does things for the good of their politics and so that's what I and I think banks will add fire to the politics to to stop the Clarity Act for another year because I think they need time. That is my personal view. But I I think I think they I think SoFi can still expand that in Latin America because there's no real restrictions that the Clarity Act would would have other restrictions about cross-border transactions and stuff and they can pretty much build their base in Latin America for a longer and then have people buy stablecoins under the Genius Act and work under that those parameters and get a get a big head start. I think the banks should do less complaining and more working. So even though the US Senate Committee advanced it, you think it takes another year? Uh it could because I think big banks are opposed to it and and unless they unless they change it cuz cuz look, the big banks said, "Oh, all we need is this." And then when they said they got that, they go, "Well, that still will lose us deposits, so we all we need is this." It's like don't underestimate the greed of big banks. That's my quote of the day. I quote for the day. Uh They they want a non-level playing field. And and I think SoFi wants a level playing field. I think Coinbase wants kind of a slanted playing field for them. And but I think SoFi can in either environment, whether it's just giving whether it's giving direct yield or or or activity based yield, they can work it with within their SoFi Plus account. The key thing is is if I'm making a ton of money on all my clients, I'm going to find a way to get those money back to those clients. And it's not if it doesn't have to be directly, it'll be indirectly. And so uh that still bodes not too well for big banks who don't have the money to give those clients. And they want the money for themselves. Because they still have all these they still have all the branches, they still have all their overhead. They they still have a lot of uh um legacy stuff to deal with. And they haven't moved fast enough. And you know, it's like it's like Borders and Amazon. I mean, it's just they it's the same kind of analysis. It's like we we think they don't think they have to change. I mean, the only bank I'd ever buy is JP Morgan. I mean, just because they're so well run. And he's and Jamie Dimon is so slick on how he does stuff and and and grows his bank through acquisition of other failed banks. And he's he's kind of a capital genius. So uh the other bank um I represented a number of those banks at certain times and dealt with them at certain times. And I was never really impressed with their the intellectual capabilities of their leadership.
All right. So SoFi. Nothing to be scared about. This quarter was probably what we should have expected given that the macro changed dramatically from when they reported Q4. EPS up 100% year-over-year. They did not do a triple beat. Everybody kind of freaked out a little bit, maybe not you, but most people probably freaked out a little bit. And there's a lot of chatter going on. I I mean, I've said it very publicly that I am annoyed at certain aspects, but the underlying numbers were incredible. The long-term thesis is intact. It's just a matter of where that fee-based revenue comes from, and right now it's coming from the banking side, and I think that they are being classified as a financial institution and trading at a very specific multiple because they are a very quick-growing financial institution, but they need to really step up the tech plat- tech platform if they want to be looked at differently. That doesn't mean that they can't grow at an incredibly quicker pace. It's just it's going to be on the financial side.
Yeah, part of that is that, but part of it is you look through and they're spending so much money on these new businesses that it affects their EPS, and that's I mean, if they if they weren't spending this much money on big business or they only concentrate on stable coins, that it's kind of a package. The paint People don't realize that the payments thing they're doing, with the stable coin things they're doing, and the um big business thing they're doing are all related, right? They're all related. And and and it starts with Latin America, and they can build from there. Now, you know, should you be freaked out? I mean, anybody's going to be freaked out if the stock goes from 30 to 15 for most part. I mean, cuz people are like going, "Oh my god, I lost this money." Man, I must not be normal [clears throat] because I was not freaked out at all. Yeah, I I wasn't freaked out. I wasn't happy, you know. But you being freaked out and not being happy are two different things. Yeah, yeah, I know, but but you see the people on X, they're freaked out, right? I mean, people on your They're like, "Oh my god, da da da da. So Noto didn't do this, and they need to buy back the stock, and they need to do this, and you know, now would be the time to buy it back. They sold at 27, and they bought at 15." They don't know the business parameters. Like, you can't buy it back at 15 and and screw your capital ratios and now you can't hold any loans because if if interest rates do go up, they're going to need capital ratio space cuz they're going to have to hold some of those loans. They're not going to have as as much demand Well, they'll initially have demand uh in in in loans at originations because people when interest rates start to like especially like mortgage rates and things when they start to to look like they're going to go up, people jump in and borrow money before the rates go up. So, you're going to have this like uh increase in a short term, but then later on it's going to affect their loan platform business cuz the demand from insurance companies everything will will stay steady, but you're they're going to have to get better quality to them and now they're siphoning off that better quality for their own book. And so, you'll you'll have a uh a difference in in um percentages of of how those businesses grow. So, the loan platform business might not grow as fast as the the on the balance sheet business, but you know, in 2008, all these personal loans that were of that high quality, they didn't move hardly at all compared to other loans and credit cards. And so, by staying out of credit cards, they take he's taking away a risk. Um number one, you have to hold the credit card balances on your balance sheet, right? So, that affects your capital ratios. So, which one would you rather do? Would you rather hold the personal loans or the or or the or the credit cards? Would you rather hold mortgages if they spike? If you get a spike in that or would you rather hold credit cards? And so, I understand that and they're not they're not where they need to be on credit cards. I mean, with pro- from a product perspective. >> [snorts] >> Credit cards is a difficult business. Yeah, it's a difficult, but it's very I mean, they could make a dollar a share just on credit cards if they had the right credit card framework, but but you can only concentrate on so many businesses at a time. I mean, if I told you said, "Hey, I'm your lawyer and I got five 500 cases going right now." You you'd better like I could be the best lawyer in the world, but if I don't give you your attention to your case, you you can have actually have problems. And I think that's where they're at now with credit cards. So, it's it's not a priority when um credit cards can make you if you do it perfectly a dollar a dollar maybe 5 years from now where stable coins and data and big business is going to make you three or four dollars is not as you're not concentrating on credit cards at this point. And I'm a big advocate of credit cards. I mean, I'm I I I think they could have done a lot better with the credit cards. I mean, I think the whole system with stable coins and everything is is is going to the my focus was all credit cards for people that have great credit scores are going to be end up being secured. You can secure it by your um brokerage and and uh you can have charge a lower interest rate and then you can defeat a lot of the banks and their credit cards. That's I've beaten that horse literally in the memes for like years, but but I think that's a possibility, but I think I think they need the capital ratio space especially if if uh being a conservative person if you think rates could go up, you need cap ratio space.
So, let's end on two things. What would you like to see out of SoFi next and when is your album going to drop?
Uh I had my album drop last year. It's already got 500,000 streams. Doing very well on on on um on uh uh Spotify. But, I'll tell you with all this AI stuff on Spotify, I mean, your albums can get buried pretty easily uh because like there's one AI person who's released 18 albums this year and 250 songs. They all sound alike and they're all decent songs, but they don't have the soul of the songs. But, I have five songs that I just recorded there and I'm going to release one which is called the American Way and it's uh going to be released uh probably in June 1st. I was going to release it around CMA Fest. Um and I have another song that I'm releasing probably in you get you have to stair-step the releases to get like a lot of uh to maximize your your your um uh streams on Spotify and other you know, YouTube and and Apple Music and everything like that. But, it's like it's a fun thing to do. I I I love doing it. I mean I used to I I stopped in 2014 right when I was an artist to watch by CMA alongside of uh you know Old Dominion Bell and a bunch of other top people and I was going to go on like be a uh an opening act for some major people potentially and I I had to drop it because I got like I told you I got in this lawsuit with my son against the state of California for four or five years and about the care they give to autistic people and that was more important to me. So I you know sometimes you got to sacrifice what you want to do for other people. So that's what I kind of did. But now I'm kind of re- re- doing it and um they're good songs. I had a a discussion with a guy that you could do this and you you're better in rock songs better than this. I go I go you know what the thing about it is is what a guy told me in radio when I was on radio interviews in 2014. He says you know Tim off the ca- off the radio he goes he goes some people like you some people don't like you. He goes music is the only business where 5% people like you and 95% of people hate you you're a star. >> [laughter] >> And that's true. But it but I I feel like something has to be done with the AI music cuz the musicians that I worked for in my in my last five songs I mean two of them are touring members of of of Tim McGraw's band. They're like top musicians. I mean and I had access to them because back in the two 2014 2015 era I had I was doing so well with radio that uh I had access not everybody has access but they're they're paid well but they're underpaid based on their talent. And where does that talent go if AI gets used all the time? And who's going to be the next talent? That's the same thing I say with lawyers or doctors or something like you can use AI to write things but you know a good lawyer has to argue to the jury. You going to AI is going to argue to the jury? Unless it's an AI judge I guess you know then you're just throwing up your hands in the air. And with music the musicians need to get paid more and uh Spotify has taken like like give an example on I sold about 25,000 albums in in that time period back then and about roughly from $5 to $10 and that paid for all my production costs, it paid for all my giveaways, it paid for all my uh performances, everything else. I I kind of broke even maybe maybe made a little bit money. But if some if somebody plays an album, they kind of get killed after like listening it to it 200 times and so you get like $10 for 200 listens, you know, you're getting like 5 cents a listen. And on a stream when you stream on Spotify, you get listens, you get 3/10 of a penny. Spotify has basically stolen money that musicians could have otherwise earned by selling product and so the only way to make money in music now is to tour. It's really tough for me to tour because of my son, but um and selling merchandise and even selling merchandise gets kind of expensive because you have to have an inventory inventory and most most people unless you're a major label act, you're not making money in the music industry. You're you're not. >> [snorts] >> But thanks for asking. That's uh I Well, we'll have a link. If you send me over a link, I'll put it in the show notes. Everybody can find it on Spotify. Okay. Yeah, I'll I'll do that. I'll send it to you in um X DMs. Yeah, send it there. I'll throw it in the link so everybody can go find Tim's music by going to the show notes. If 100 million people go, I'm set. There you go. [laughter] I'm would say you're set already. Yeah.
All right. So, the last question, what do you want to see out of So Fi for this year? I'd like to see and I think I'm going to see it. I'd like to see progress on stable coins especially in South America by August and uh and I think that will then set up big business business banking to be more successful by the end of the year or early next year. That's kind of what I think. Love it. All right. Well, Tim, thank you so much for taking the time out of your day to come on. Really >> Oh, thanks for having me on. Yeah, I appreciate you man. Please go follow Tim on X. I'll put a link down there. When he posts, you better be paying attention. Thank you, everybody. Have a great day.