Welcome to another riveting episode of Risk and Return. I'm Charlie Gasparino with my partner, the great Bob Sloan of S3 Partners, one of many partners, but the lead partner there, the guru of data.
Bob, since we're on a data kick these days and you're just knocking it out of the park with everything, all your S3 calls, let's get to some of your actionable ideas right off the top. I don't want anybody to wait.
Charlie, always great. We've been on a tear recently and we said last week on the show Oracle, very bullish on that. They come out yesterday, the stock is up 15%. Now that's not 15% over a year. That's 15% in a day. That was amazing. Amazing. And we've had just a lot of really fantastic calls recently. We also dropped on our S3 handle OnX a call on GameStop, which I know is near and dear to you.
Oh, I love this stuff. You know, one of the great things about doing this show with you is I get equally trolled by the same people. So, it's fantastic. Now you're my friend. So, there's no end to the trolling, dude.
You've been exposed. They know. You know, but we like you, we call them like we see them and we're the umpire. That's we're here to call balls and strikes. And a good day for us is when 50% of the people love us and 50% of the people hate us because it's accurate. That's Wall Street. We understand that. We said that, you know, a drop in short interest actually was going to be bearish for the stock. The stock has been down, I think it's down 20 to 25% since then. So we had two fantastic picks last week.
Let me ask you this. Just stop there with GameStop because this is fascinating. How did that call, just for my stupid journalistic mind, unravel it for me, how did that data point kind of foresee the fact that, you know, Ryan Cohen, who's running GameStop, you know, obviously a smart guy, he's going into crypto. He's trying to do a little bit of a Michael Saylor move with GameStop. How did it sort of know that the stock was going to tank after they announced that they were going to do a convertible that would finance their Bitcoin purchase? I mean, because like what was interesting about all that is that people kind of knew he was going to do a convertible. It's been out there, he's talked about it. Stocks still traded somewhat higher and then on the news it blows out, but your data suggested that the news was going to be a negative essentially.
Because it's really very simple with this stock. If the short interest increases, people buy. If it decreases, they get out. Independent of any capital structure, any hedging activity, anything that they're changing business strategy, it's very simple. There's one indicator that drives price action. We happen to be the world's best at it. And we understand when we see covering in that particular stock, it's a bearish signal.
So it was covering ahead of the short interest down. And then when short interest goes down, and we do publish it every once in a while on OnX, people understand that, okay, I guess that means that short sellers aren't going to lose as much money. And, you know, the general public probably does not understand that people short the stock versus the convert and the company's raising money and, you know, the whole ape thing where you had that crazy thing where, you know, people were getting diluted and they didn't quite understand that they were getting diluted. It doesn't matter. It's a very, very simple, it's a very simple way of looking at one data point and applying it to the price action of the stock.
And let's just, in a short sale, right? You're not purely short. You hold some of the stock as well.
No, that's exactly right. You may cover your short and then knowing that the shit's going to hit the fan in a day or two, you sell your stock. So remember that, you know, people think that there are just white hats and black hats out there in trading. You know, there is no none of that. These people are, you know, traders are just all, what's the way to put it? They're up and down the capital structure and they're agnostic.
Agnostic and they're opportunistic.
And they're opportunistic. But the narrative, and we were just talking about, you know, Elon Musk and X and the Twitter deal. There's a lot of reasons for people to sell stock and part of that is to finance something that is more senior than stock. So maybe a convertible bond, maybe straight debt, etc. There's all sorts of reasons why people short a stock and that's generally to hedge themselves against another instrument and/or a negative view on the stock. But that gets lost in the mix with GME. People look at short interest, they say it's going down. Okay, I'm out. And you've seen this precipitous fall in the stock in the last three or four days. So we had that right call and it was a great call.
Amazing. Next week we have one more. Okay. Jabil Industries, the ticker is JBL. You know, it's a high-tech services company. It'll publish on the 17th. And, you know, what we've seen is the stock is up slightly going into earnings, but short interest is down about 10%. So there's every reason to believe that this stock will pop after it announces earnings on Tuesday. That's our call for the week.
I'm going to hold you to that. I'm only kidding.
Yeah. Well, listen, you know, that's why we, by the way, this is a really interesting thing. You know, we do at the start of every show, we put up our scorecard because we want the accountability. Of course, we want the viewer to understand that this is now free. And we were right. Maybe we should put it behind a paywall, Charlie.
We will. You know, that's what I'm saying. Get while the getting's good because it's not going to be free for a long time. I promise you. And this is what we're doing. Okay, we got it. To get us some more freebies. That probably shouldn't be freebies, but, you know, we love you, our viewers, all three of you. Only kidding. Only kidding.
Well, you got 60, 70,000 views on your X account, so it's not two or three.
No, I'm only kidding. I'm being facetious here. But let me get to some of my headlines, Bob, because, you know, we do have a great guest coming up, and we'll talk about that in a second. Number one, Jamie Dimon leaving friends and colleagues confused on his Oval Office aspirations. Now, Jamie Dimon's dance with being president, you know, does he want to, does he, doesn't he? You know, let's face it, this has been going on forever, right? I mean, how long have we been talking about this? The fascinating thing is that he kind of fuels it now. Behind the scenes, he's telling people, 'Oh, no, I'm never going to do it. Can't do it. Not going to win.' But every time he's in public, he keeps saying that he might do it. He was at some conference called Databricks. I don't know if you ever heard about this. It's a San Francisco-based AI powerhouse, Databricks.
Oh, 100%. Great company. Great company, right? I don't know much. No, great company.
And he was interviewed by the CEO and he said, you know, he says, 'Would you run for president?' And by the way, Dimon was dressed very techy, you know, with a black T-shirt and jeans. And he looked to the audience. There's like a thousand people in the audience, by the way. 'How many of you would vote for me?' Just about everybody raised their hands. And he throws out, he goes, 'Well, I'm a banker.' No, no, this is what he said. He goes, 'Oh, look, there's all white people here. That's why they said yes.' I mean, it was just a funny thing, right? Then he goes, 'Listen, I'm a banker. I'm 69. I always said I would love to be president, but you'd have to anoint me. I have never run for president. I think there's a skill in it. I also think the answer is no. I will do anything to help the country, though.' That's what everybody started to talk about because he keeps hedging. And, you know, two weeks ago he was at something else. I think he was at the Reagan Library where he was asked point blank, 'Do you ever want to go into politics?' It was another sort of sit-down and he said, 'If I thought I could win, which I don't think I could.'
You know, it's literally he wants to be president. I don't think there's any doubt. And, you know, he is the world's greatest banker. And don't be surprised if he finds his way onto a ticket as a vice president. That's what I'm told. You know, could be the vice president. That's a way of getting there. You know, he doesn't like to, he thinks he's too centrist to run solo. So it might be a problem. But, man, this is a guy that accomplished just about everything. Running a great bank, staying out of the financial crisis, running it very smoothly, scandal-free. And, you know, that's a good, you know, I could see him doing this. He's had some health issues, but he looks pretty healthy now, and he's still whip-smart as always.
Well, health issues as compared to what? So, I mean, you know, everybody's got health issues, right? I get you. Everybody has health issues. So, that would be an incredible thing.
Kind of interesting talk about Musk and Trump, you know, the war of words, which we're going to get into with our next guest, Bill Cohan, the great William Cohan, reporter, writer, author of all things business. You remember, you know, they've been at it for a day, a couple days last week. It got pretty nasty. One of the casualties of this is not just Musk's own business interests, which remember Trump threatened to throttle amid the whole thing. People think that maybe this ends any sort of chance that Musk might buy Truth Social. You know, one of the reasons why the stock hasn't totally cratered despite losing $400 million last year. They make a paltry amount of revenues. Everybody thinks Truth Social, because Donald Trump's on it, is doing so great. I mean, this barely scratches the surface, but one of the reasons why it's still trading at about $20 a share is because there's a notion that Elon's going to buy it. A lot of people say that's off the table now. Now, as you know, Musk came back and said, you know, he basically gave a kind of a semi-apology, right?
So maybe it's back on. Maybe one way to kiss up to Trump is to buy his company. But anyway, that's some of the stuff I've been following. And then one thing, and we're going to get into this big time with Bill Cohan because Bill covers media, is people are trying to figure out what's going on with the Skydance-Paramount deal. I mean, reading every tea leaf. One tea leaf, David Ellison is at a UFC fight with Trump, you know, whether that shows that Trump, who David Ellison, as you know, runs Skydance. Skydance wants to buy Paramount. You know, it's the only way the thing gets done is if it gets approved by Trump's regulatory people. On top of that, Trump is suing Paramount subsidiary CBS. So people are saying, well, maybe Trump is warming up to the deal. He's going to tell his regulators to approve it because he was at this fight with David Ellison a few weeks ago.
I hear not going to happen. I heard that. I say I heard do not draw much of a conclusion from that tea leaf.
The other tea leaf is that Paramount last week laid off like 3% of its workforce. Obviously, if you're on the verge of doing a big merger, you generally don't lay off people. You leave it to the other guys. I heard again this layoff has to happen because this deal is taking so long. Skydance would have done it as well. Again, don't take too much from this. We are going to get into with Bill, Bob, Bill Cohan, the real sort of ethical issues, business issues involving how this deal is being throttled by these concerns by the FCC about liberal bias, which the FCC has power over local broadcasting and that's what CBS does, on top of this layer of a lawsuit that Trump has about CBS, which seems to be all combined in this sort of noxious stew that's almost unprecedented. And we're going to get into that in just a few moments with Bill. I'll let Bill, he has some interesting takes on that.
Well, only here would you get Bill Cohan and Charlie Gasparino on the same stage talking about Paramount. And that's what makes this place the place to be and listen to because everybody gets to express their opinion and it's done in a civil way to make it understandable. So rather than yelling and screaming and cursing at each other, it's just, this is my view and we'll respect it and we'll debate it and we'll talk about it. And that's what makes it compelling and actionable. And, you know, the two leading reporters on this, if I do say so myself.
Well, it's true. It ain't bragging if you can back it up, right? I mean, it's true. And now we bring in William Cohan, author of many books about Wall Street and many other topics, including the Duke Lacrosse scandal. He is published in so many different newspapers, magazines, formerly worked at Vanity Fair. He's a founding partner at Puck News. William, welcome to Risk and Return. It's great to have you.
Great to be here, Bob and Charlie. Thank you for having me.
Our pleasure. Absolutely. Just one quick question to get started. You were a banker. You worked in finance deeply in M&A at Lazard, at JPMorgan. What made you go from doing that work to covering the events and happenings of what's going on in banking generally?
Well, if we can step back from that 17-year banking career, I actually started as a journalist. So I'm a graduate of Columbia Journalism School, class of 1983. And then I was a reporter at the Raleigh Times in Raleigh, North Carolina for two years covering public schools in Wake County, North Carolina, which was ironic because I'd never gone to a public school in my life. But after that, I then got my MBA back at Columbia and then, you know, went to Wall Street. So it's not quite as crazy as it sounds, Bob.
But, you know, after nearly 20 years as a banker, I think it was a mutual decision that the best thing for me was to do something else. And I decided, I don't know what went through my head, but I really wanted to sort of get more control of my life and be my own boss and not have some crazy group head, you know, calling me on a Sunday night, you know, telling me the presentation that I'd worked on for several weeks was, you know, trash and needed to be done completely over again for some meeting the next day. So I decided I would write a book about Lazard, where I had worked, as you mentioned. And it was this crazy idea that I had. I thought I could write a book about the firm, which really had been, you know, so secretive and a private partnership. And I had this crazy idea I could do it, and I did it. It became a bestseller. It won the FT Goldman Sachs Business Book of the Year award in 2007. You know, and then I get a call from Graydon Carter, you know, did I want to come to Vanity Fair? Got a call from The New York Times, I want to be a columnist at The New York Times. So that sort of is how it all came around. And I would say, you know, my wife, who is in publishing, was like, you know, who are you? Like, what kind of dumb luck is this? I've never seen anything quite like this. So that really is how that all became full circle back to journalism.
See, my wife, who's got an MBA, would have said, 'Are you crazy going into journalism? You're making X and you're...'
I mean, your wife is much more practical than mine, Charlie. I was the practical one in our family, but I had done the Wall Street thing and it was time for something else. So, yes, I did take a 99% pay cut to become a writer, but things have gotten a little bit better from that.
And you made money. Let's face it. You did.
I did. And I'm a good investor. Been a smart investor, not good. And so, yeah, basically my banking career has subsidized my journalism career.
So, like, you and I came up differently. I mean, I studied journalism. I took a lot of econ. I've always wanted to be a journalism writer. I got out of University of Missouri J School in, I want to say, '89, '90, let's say 1990. That's when I started working various places, got to the Journal. But, you know, one of the interesting things is that when I was going through, journalism was always a tough road and there were always less jobs than people that wanted them. But, you know, there was sort of, if you were good, you could make a living and a decent living. I just kind of don't see that now for the young kids. I mean, you and I are okay. We're on the back nine. We're established. You know, we can make a few bucks. We could do different things. But, you know, kids coming up today face a lot of different things. I mean, Puck is new. I mean, it's an entrepreneurial venture. Who knows what's going to happen. Same with Semaphore. You know, The New York Times is not what it once was. I mean, take a look at, if you ever heard the salaries at The New York Times, you would freak. They're not very high. The Journal cuts. I mean, there's all sorts of, TV is imploding. I mean, you know, what do we tell kids?
All that is so true. I have plenty of friends at The New York Times who shocked me with, you know, and these are, we're talking Pulitzer Prize winners, Charlie, who just get completely underpaid. It's kind of outrageous. And that's The New York Times, which is doing much better now than it used to. But, you know, when I got out of Columbia J School in 1983, you know, the newspaper business was quite flush. You know, EBITDA margins were 60%. They were making money hand over fist. There was obviously no internet, so they were filled with classified ads and advertising of all types. But you know what? We still got paid like shit, if I can use that word.
We did. We did get paid. Listen, I remember my first job at the Tampa Tribune in 1990. I think I was paid $23,000 a year, and I was supposed to be happy with that. Now, I was living in Tampa. Trust me, I wasn't starving by any stretch of the imagination.
Well, my version of that is when I started in Raleigh, I was getting $13,000 a year, right? But you know what? I was a single guy living in Raleigh.
But you had a blast. I bet.
I did. I had a great job. But I will tell you one thing that always stuck in my craw is that I always thought that, you know, I was the content creator. I was the one that people were reading, you know, one of the ones, obviously my colleagues and I were the ones that were producing the content that people were reading the paper for, that the advertisers were advertising around, classified ads were around. And so the people who owned the paper, the Daniels family, lovely family, you know, 60% EBITDA margins and I was getting paid $13,000 a year. They sold the paper for $300 million to McClatchy. And so one of the reasons I decided to leave Vanity Fair and start Puck and be part of Puck is because I always wanted equity.
Charlie, and you wanted what you created, which may be the model going forward for the kids. Before we get into some news today, I just want to give you one metric. I don't want to say exactly how much I was making, but when I left the newspaper business at Newsweek, I was Newsweek magazine. When I went to CNBC, I was making close to $200,000 a year, right? Senior reporter, kind of top, you know, that's kind of at the top. I bet you right now if you're at The New York Times and you're at the top, except for some very few people, that's kind of what you make. I kind of just based on what I hear, it's that 200K, which think about that in terms of inflation, living in New York City, the whole thing, that's how bad the industry is. The real question is, is there a model of being a creator, a business model for owning your own stuff and being a creator, and can you eke out a living on that?
Well, obviously there are people on Substack who are able to make a lot more than that if they're at the very, very top. I think at Puck we do better than that and we also have equity. So, you know, look, who knows what that equity is worth, but I mean, I know what it's worth, you know, but it hasn't been monetized. Politico was sold for a billion dollars. You know, Axios was sold for what, 500 or something. I mean, so there is sort of a light at the end of the tunnel there a little bit. And if in fact we keep going with Puck and it gets monetized anything like that, then we all will be pretty happy and that will be a very satisfactory model, I think, going forward to reward, you know, the journalists who are creating the content. You know, Charlie, you should be getting equity for what you do at the New York Post, but that's not the way those places work. And so, you know, I decided to take this leap into the great unknown, you know, leaving a cushy job at Vanity Fair, although Graydon had left, so it wasn't quite as much fun as it had been, to go and start Puck and see if we could make this work. And now, four years later, you know, knock wood, we keep plugging away.
I'm having that equity conversation after the podcast today with Bob Sloan. But that's now that we teed it up. But that's, you know, Bill brings up a really interesting point, right, which is what do you do when the landlord wants to sell the building, right? And so you all, you know, at Puck said, well, I guess we have to leave the building and we have to go find our own real estate and build our own. You know, that was always the dream of every reporter back in the day to start their own newspaper. And now I guess, you know, you could say based on what Bill's doing and other people that, you know, the sort of technology is there where you had, and so maybe that's right, this is the model. You couldn't have owned a printing press back in the day, right? Right. But I want to switch to topic since we're on media and old media, what the hell's going on at Paramount? Is this Skydance deal? I mean, I could give you my two cents. Let's hear what... well, you're the guest, tell me what you think is going to happen.
Look, I think, and again, you may know this, you and Bob may know this better than I. But clearly President Trump wants his pound of flesh here for reasons I do not understand because obviously the 60 Minutes piece had nothing to do with him. It was about his political opponent.
Yeah. He won and there's no damages. He won. Yeah. What are the damages? So if they did the worst that he said, which is totally edit out her word salad and make her sound like Winston Churchill, he still won. He won every battleground state. He won all seven battleground states. I don't know how in the world he's damaged, but he's a powerful guy. And I assure you they would be opposing this case with all guns blazing if they weren't at the same time trying to get this Skydance deal through the FCC.
I'm told that the chairman of the FCC cannot even consider this case, approving transferring the licenses to Skydance, until this business with Trump and 60 Minutes is resolved.
So, question, and by the way, the drop, you know, the second extension on the merger, on the recap agreement, is October 7th. So, I mean, it seems like a relatively far way away, but it's not that far away. October 7th is going to be here pretty soon, and this deal has not even begun to be considered by the FCC yet because obviously the 60 Minutes business hasn't been resolved.
Yeah. And by the way, it'll take a second to consider it. From what I understand, as soon as this other thing is done, shouldn't be hard.
