SpaceX IPO, Anthropic Fable 5, And Roku | The Brainstorm EP 136

SpaceX is finally public. Fable released unreleased. Elon saying 1 trillion in revenue in 2030. Brett, your estimates are about a third of that. Maybe we'll start there, dive in. What is, what are your thoughts on SpaceX's IPO here and Elon's most recent tweet? About 1 trillion in revenue in 2030 and much more likely in 2031. Yeah, I think that one, the IPO was successful, as in they sold a lot of shares to the public and seem to have listed at something above the IPO price without going totally nuts, which is, I think, where you want to hit. And there's plenty of shares to unlock over the next 180 days and usually listings are volatile. This one could be particularly so because of on a trailing financials basis, this company looks wildly, extraordinarily expensive, even if you take into account the deals they signed for their data center. As a service business with Anthropic and Google, it still looks quite expensive. But if you look forward and say, well, what are they going to do over the next few years? You can understand why it's valued so highly. They're going to take lots of cash, invest in satellites, principally Starlink satellites, loft them into orbit and monetize them. And we think that kind of injecting cash into that particular business is the most efficient use of capital for them in the immediate term and mostly on the strength of that. And with the AI business, basically like burning and churning cash, you get to 300 to $400 billion in revenue by 2030 and growing fairly quickly. And Elon says a trillion. So how do you square that circle? It's pretty clear to me that actually if you inject even more cash into the business, they could accelerate even faster. It could be that we're overestimating kind of like the cost to manufacture the satellites. Or he thinks that they can improve their manufacturing and the capital efficiency of the business more than we're expecting. Or it could be that he's thinking that, hey, if we actually merge with Tesla here, they are going to be throwing a lot of cash flow off of robo taxis and we can invest that cash flow in accelerating starLink, but particularly AI orbital data centers in space. And that would actually bring on a very rough basis some of his forecast into the realm of possibility, as far as I can tell. So I think that's probably a way to explain it, particularly if you're saying a trillion dollars and it's a trillion dollars of space. SpaceX. Plus, by the way, there's this Tesla Business that's also generating a lot of revenue, then, then they could easily get there. Okay, can you Maybe break down SpaceX needs money to accelerate here. Does Tesla not need money to accelerate its Robo Taxi rollout? Robo taxi has not yet fully scaled here. Why can you throw money at the SpaceX flywheel but not necessarily at the Robotaxi flywheel? Yeah, I mean the Robotaxi scale out should be much less capital intense than SpaceX because the assets have already been built, you know, and the assets are being built and basically financed by the customers. So you know, Tesla's Model Y in Austin factory or across the globally Model Y, they can do like 2 million, remind me here, Sam, in production. So you can transform those into robo taxis and they become wildly cash flow generative. You do need to invest in some charging infrastructure and servicing infrastructure as the model scales. But effectively I think it would be almost immediately cash flow positive in a very, very meaningful way. Whereas with Starlink and AI satellites, you have to manufacture the satellites, you have to package them in a rocket that you have built. You have to have multiple rocket sites that are going and then you loft them up and then you know the time to manufacture and all of that is like a big cash drag. So the, the very rough way to think about it is like the 10th Starship rocket launch will cost a half billion dollars cash up front and it will generate more than a billion dollars in revenue per our forecast. So you know, six month return. But if you raise $75 billion, you know, you can do 150 of those and then you have to collect the cash and reinject it. And there's other places they're also deploying cash, including building data centers. And, and so it is a business where you could inject more cash and accelerate. I think Tesla could use cash for Optimus, but I don't think it's cash limited. I think it's just capability limited. You have to have time to work on the software, improve the hardware. Throwing $10 billion more at Optimus would not make the future come faster there. And so then that's why SpaceX is not just SpaceX. A lot of companies I think are in a spot where suddenly it's like, do you know what? We have a great return on capital opportunity here. We could use more cash. That's why Google came to market and raised equity cash. People were like, what are you doing? It's because investing in data centers is a great business right now. And SpaceX can invest in Starlink satellites and data centers and AI satellites in space and build all the solar panels they need for the AI satellites in space. So there's a lot of investment they have to put in to accelerate. So Tesla has spoken about different forms of financing as they roll out Robotaxi. Right. One of the questions is, oh, are they going to keep these on the balance sheet? Are they going to let people buy them? How are they going to do this? Don't you think that will take a similar shape for Starlink satellites or. Yeah, yeah. I mean as we model it back. Yeah, yeah. They debt finance the satellites as we model it. And I think Wall street would be really. If you're generating a predictable cash flow stream off of an asset, then you can get reasonably good terms on basically borrowing against that asset. And so it is the kind of set of assets that. And just like data centers, the data center side people aren't fully equity funding them, they are putting in equity and they're taking debt finance because it's a big capital buildout and you get reasonably predictable cash flow returns. So I think SpaceX would do the same. But even still. So we're looking just at the. They're restricted by the amount of equity they can inject at the pace at which they can do it. Brett and Sam, can you help explain what goes into the Starlink TAM? The one that I think SpaceX gave out was 1.4 1.7 trillion and then how you get to the 300 to 400 billion in revenue off of Starlink? Yeah, so this was higher than the TAM we had before as of a year ago. So Sam, why don't you describe that one and I'll say how it's potentially expanded. And I'll caveat this by saying what SpaceX put in its S. One of these are the TAMs of our markets. It's all good on them to identify those for people. But that's not how we do our modeling. As in we think we have a better, not better our approach to. For instance, they say 26 trillion in AI software TAM, which is basically roughly knowledge work wages, which I can see how you get there. The way we think about AI software Tam is businesses pay 10% the value of the productivity generation they get from software. So 26 trillion AI software TAM would be consistent with AI software gets you a 10x improvement in productivity as knowledge workers and then businesses pay 10% of that. I'm not sure that's how they do it. Um, but you could kind of get to a similar spot on that methodology if you but it really depends on when are you getting that 10x. So you know, but Sam, how did we think about like Starlink's commercial opportunity both before and then, you know, how has it evolved since. Sure. So pretty much when you have a satellite, it's going around the earth. When it's over the United States, it's got United States paying customers who, who in the US Data is extremely expensive and so you're willing to pay much more for that. But then, you know, it goes over Africa and data is extremely cheap in Africa. And so of those households you can only charge a competitive rate. And so we essentially do this modeling for every single country in the world. And you can say this is the clearing price at which Starlink is a competitive offering and for how many households you could address in those areas. And you get a very nice top down curve which is, you know, so far actually quite accurate if you look at Starlink, consumer versus Enterprise. And so our consumer modeling is actually pretty spot on with what they've done in our other model, we did not do enterprise. We were just saying, okay, here's the consumer option opportunity. What's been impressive is the enterprise aspect of it. And I think really to simplify it down to the most pure form here is people are paying for bandwidth. And there, and the cost of that is the rockets and the ground stations and the satellites going up. And so there's actually a very clear rights law cost decline for dollar per bandwidth in orbit. And so that's coming down like this quite dramatically. And then on the other side you've got the addressable market and what people are willing to pay per bandwidth. And that is also a declining shape, but at a much slower rate because you can imagine that as you fully penetrate the market, people are willing to pay less and less for each incremental amount of bandwidth. And then so just to. Sorry, maybe I'll help frame your response here because in thinking about the 3 to $400 billion, like in the way that Sam just explained it, what countries, how many users, like what exactly goes into building up that 3 to $400 billion figure? Like is it inclusive of China and other adversaries that may not want Starlink or how exactly do you get there? Well, as Sam described or. Go on, go on, Tim. I was gonna say when we did it, we excluded China and Russia. Right. So, so, but the general generalized approach, like there's the approach of I'm going to identify each subscriber, I'm going to say this is the price the subscriber is going to pay and, and that ARPU is going to go down as I extend to more subscribers. And I'm going to start out and I'm going to model each household subscriber at the broadband business side and then say these many people are going to do duplicate start like you know, backup Internet and then this is the cellular business. And how many people are going to pay for the cellular business which also you know, you could argue wasn't like. And is it going to be a add on like a dollar a month that T Mobile pays for the user just to attract users like go about it that way or you could just say there's they are lofting bandwidth into space and they can sell that bandwidth across a number of different customer types that it's actually very difficult and intricate to try to model from even though it's tops down a very bottoms up way. And then look at their revenue generation per bandwidth and space and see how that's trended over time. And that's it's actually the more generalizable and simpler way because you know, like yes, you can take well airlines, I need to look at all the airlines in the world and how much they're paying, figure out how much paying and figure out how many there are and then well I should go and do cruise ships. And actually there's with kind of like technologies that offer really orthogonal capabilities, it's very hard to pre identify all the different customer types. And so then even though you feel like you're doing very good modeling, you leave off giant pockets that you didn't realize existed. So think about, you know, what do enterprise, what is Wall street going to pay to get a signal from Japan faster than it can through terrestrial networks? Like maybe quite a lot because there are basis points multiplied by billions to be made from having information 10 milliseconds ahead of somebody else. And this backhaul through Starlink could deliver that. But modeled at the bandwidth level, if you look naively at their monetization so far and their revenue decay curve, you would say they would get to 1.5 trillion ish in kind of like that's the extending the log log line out of their revenue generation which matches their, their TAM that they identify. We in our modeling have it decaying more aggressively than that. We're basically taking the consumer curve that we did work on before and say well okay, that exists and it extends all the way through the enterprise. So it's just like translating it upwards. And oh by the way, like the US Government star shield is in this as well. So what is the government going to pay for uninterruptible bandwidth for all of its military assets? And it's kind of like you could try to figure out, well, this is this contract and that's that contract. I just think this is an easier, more generalizable way to do it. And if there were a weakness in it, it would be, well, maybe you end up with these air pockets where you've like delivered this bandwidth into space, but you have to figure out how to commercialize it. And so the revenue potential is there, but suddenly you're trying to sell into a customer set that has a longer sales cycle or something. So it's not a perfect methodology, but I think it captures the potential in a generalizable way that's actually more robust. So it just assumes 100% utilization of all Starlink satellites? No, no, no. It just assumes that kind of like, I mean they're not 100% utilized today, but they are getting a revenue per bandwidth today that we think is going to get worse over time. Right. And so it's kind of like right now they've put it up, they've sold into the US So really it's like you put bandwidth up and then you're on a penetration curve of each marginal bandwidth you put up as you identify new customers for it. Um, I think the end state, which I've, I've been saying this for many, many years and it's, I'm more confident than ever but they're just going to keep moving to own the relationship with the consumer and it's going to be a bundle. And it's like everyone I live in New York go Nicks, I can, I only have one option for Internet and one option really for, it's like, that's crazy. And so it's like, well, why not just bundle in like an MVNO type model here where I can have Starlink and they'll, you know, serve as my phone carrier as well. They'll probably do other things. X is in there, Grok is in there. I think this is going to become one of the foundational bundles that's just going to be a no brainer for a lot of people. Yeah. And also, I mean, I think once you get direct to cell, which means you can, you have satellites that can provide that bandwidth to very small devices, then suddenly that potentially opens up a lot more form factors that previously, you know, as in like already they're putting them on John Deere tractors, but there's no reason why you wouldn't put these on small drones that are operating in agricultural areas. And, like, I think you can imagine there's potential, like, expansions of how useful this stuff is that that hasn't yet been built. That we'll see. Like, there's the cow collar company. Right. I was just about to say, on cows. Yeah. And, like, electrically fence them, basically. And it's obviously super useful. Like, you can move your cows around without hiring a ranch hand to run around and, like, you know, rope them. Clearly, this is much more manageable, because who knows what cowboys do out there? And so, um. Yeah. Okay, so let's. Nick, any final thoughts, or can we move on to the. No, no, it's helpful. It's helpful. Helpful. Okay. On to Fable. Fable. Mythos. It's Mythos, but with guardrails. And you're paying for those guardrails because tokens are running, and you don't know how many tokens are running to implement those guardrails. But that's not even the issue at hand. Amazon comes in and they said, we've jailbroken these guardrails. And Anthropic, you said, this is the most dangerous thing ever to be released into the public. And so Amazon calls up government, and they say, hey, we jailbroke this. This is bad. Government comes in, and they say, anthropic, you better fix this. Dario, apparently at a wellness retreat, does not answer, and they now have pulled Fable from release. Brett, what do you make of all of this? I think that. Well, one. I mean, I think that Anthropic had a corporate strategy, and. And Dario has a consistent pattern of saying this thing is too dangerous to release as a way to kind of gin up interest and kind of, like, give himself more negotiating leverage against partners, in this case, try to scare up the compute resources he will need to actually serve customers who are trying to use it. And it kind of blew up in his face in this instance because the government took him at his word. A year from now, I can say with a fair amount of certainty that everybody in the world is going to have some mechanism by which to. To access something that's close to Mythos. And within two years, probably everybody will have something that's Mythos, like, available to them. And so I think that the power of AI Is so profound that if you hold back an individual actor from, like, no, you can't do this thing, then you are just going to, one, allow their competitors to reach their level of capability, and two, allow everybody who's turning around trying to do it in an open source way get a little closer to that set of capabilities. And so it seems a bit silly to me to say oh, because somebody persuaded the model to actually tell it the structure of a certain biological molecule, that these things are profoundly dangerous. It's like they can be jailbroken all the time, just like you can persuade a scientist who's a nuclear scientist to give you some insight by buying him a nice steak dinner. And so I don't and like net net, however, it could be that we're headed to a stage where you have to KYC in to use AI, which would be I would think an unfortunate development. But it would not surprise me if that's the direction things head. I agree, I agree with what you said where this seems like an important but poorly framed discussion in that who cares, things are going to get better. But is this the tipping point where the government says okay, yeah, this is a wake up call, we actually need to do something now to determine future releases. Right? It's like now is every future release going to need guardrails of a certain standard? Like that doesn't seem like a sustainable future here. So what do you think? I think so I think, I think Amazon stepped in because they are trying to position themselves in infrastructure as a service providers, as the kind of actors that validate and verify people that use these things. So if you imagine that there's going to be KYC inserted somewhere in the process, if Amazon can say well we are, you know, trusted intermediate, you can't trust these AI labs to kind of like make sure only the right guys are using it. So you, the government should force all of the traffic to move upwind through us and we gate kind of like who's good versus who's bad to be delivered. These models serving as effectively like the deposit taking banks in this system. Whereas then you know, the model providers become more like the security issuers or something. And so, you know, then it's a way for Amazon and by proxy Google and Microsoft to become like these trusted gatekeepers for access and give themselves more negotiating power or more power over the model providers. And so the counter move from anthropic and OpenAI will be to say we are going to for access to the best models we're layering in the you know, privacy preserving ID protocol like world ID to say we're making sure we know kind of like that this person is of this geography and of this age and you know, and make them sign some attestations about not trying to jailbreak it and because then you have proof of unique human. You really could, like, cut somebody off from access to the models if you give them, like, two strikes or three strikes and you're out for having tried to kind of like persuade the model to give you information that was really offsides. So I think that's the direction that it will move. Do you think that Amazon knew what it was doing when it reported this up the chain? Well, I asked. No. I asked that because I have seen takes out there where people are like, this was a malicious act by Amazon to throttle Anthropic. But that doesn't make sense because they do have an investment in Anthropic. They also have a major investment in open AI now. But I'm just trying to understand. Maybe they thought, like, nothing would come of this or Anthropic would take care of it behind the scenes and they would just patch the fix and. Or, Nick, what if they just trusted Anthropic in terms of wanting to fix it? Anthropic does project glasswing and all of this. This is so dangerous. Yada, yada, yada. Anthropic's fully aligned with. Or Amazon's fully aligned with Anthropic. And they say, oh, my goodness, this isn't as safe as they said, right? And they say, anthropic, it's not as safe as you said. Anthropic says, no, it's fine. And they're like, wait, why? But, yeah, but that's why I'm like, I'm trying to understand the dynamic better. Because that's what I would think, right? Like, I would think Amazon went about this and they said, you know, here's this problem. Anthropic will fix it, right? And then Anthropic, it's not that big of a deal. Everyone faces the same jailbreak. Because I think they're pointing the finger at OpenAI, saying, oh, you can do the same thing to their models. And it's like, it just seems like there was some wires crossed in terms of the communication. Now it's blown up into this whole story, and it's putting a damper on the progress of AI. And to me, it just seems like, largely overblown. Well, I think, yes, in that the. The. We have laws in place that make it illegal to do certain things. It's illegal to do it with, like, you know, no matter what tool you use. And I think that's the way this should be approached, like hacking. It's not like there's a dearth of opportunities to hack into systems if you could cleanly, legally make money off of hacking into systems, a lot more hacking would happen. Most hacking doesn't happen because the people who are capable of hacking can make a lot better clean money doing other more productive things. And so the general idea that kind of like, oh, being able to arm, twist this tool into doing something kind of needs to be layered with actually an interesting and untested idea, which is who owns the liability of what an AI agent does. If I ask an AI agent, hey, I need some money. Can you get me some money? Get me as much money as you can in a month. And then I'm like, and then. And it goes off and robs a bank or, you know, digitally robs a bank and comes back. It's like, here's your money. It's like, is that my responsibility or is that the AI model lab's responsibility for not sufficiently, you know, protecting the model from doing things that are outside the bounds of the law? I would argue probably the model company's liability there. But it. Right, well, I don't know. Here's what I would say. I think there's. Okay, what is freedom in the United States and how is almost all progress been made? It's like the whole way the US Works is that you are allowed to break laws. And if you break laws, you face the consequences. In a world where you are not allowed to break those laws, you. That's actually, that's like removing freedom. Right. And so it's like, think about civil rights. Any progress like that. It's like you had to be allowed to break laws in order to progress. But Anthropic is trying to prevent you from even being allowed to break laws. And that is actually bad for democracy as a whole. And you should be. It's like the whole point, it's like you need to be allowed to break laws and face those consequences. That's like, that's like the freedom of. I don't know that this is a tape you should, you should be putting out there, Sam. I don't know. That is all, all progress has been, has come essentially through breaking of some law. You're now opening up norms. But yeah, yeah, someone's going to go break the law and be like, well, Sam, chorus on the brainstorm told me to go and do this because it's good for innovation. I, I have a question. So if I told my AI model to make me as much money as possible and it went off and, and digitally robbed a bank and brought the money back, then you're like, I having, having just been like, oh, you should have known better to tell that AI model to not break any laws along the way to robbing a bank. And so I should be liable for that action. That seems, I mean, if I say it that simply, obviously I shouldn't. I have to have, like, been like, do anything you can, including breaking laws, in order to get this money or something. So there's. You gotta. This is why all future prompts are going to come with the hashtag, don't break any laws. I think the biggest, the most important piece, and Brett, you said this in the beginning, which is if this, this is making a huge assumption that open source will never catch up to Mythos capability. And beyond which I don't think anyone would bet on. Right. Open source is behind, but they should be able to get to where the frontier models are two years, a year from now. And so when that moment happens, there's no putting the genie back in the bottle. You can't stop that. That's like trying to shut down the Bitcoin network. Just not going to work. So you can stop this now, but it's not going to stop the train that's coming, which is when the Chinese unleash this into the world through open source models. Yeah. And from the government strategic side, you can understand why the government would say, well, this is really powerful tooling here, and we would like to restrict access to the frontier to those people who are US Citizens against which we can collect taxes and, you know, who we think are more likely to be operating in our interests. And that'll definitely serve to accelerate China's actions. And it, you know, I mean, it might be. But it might be the narrowly positive strategic direction from the government. But if they press too hard on the labs, the labs will move. You know, they'll, like, go to floating data centers, or they'll go offshore, or they'll go to Australia, or they'll go to, like, Abu Dhabi or, you know, I, I think that there is a. These are fixed capital businesses, but their ability to put capital in different sovereignties actually gives them a lot of strategic flexibility. We strayed, we strayed from Nick's question. And I want to circle back because there's also Sacha's X post, which is, okay, so why did Amazon do this? Sacha also coming out. Any, any player now who is not a frontier model provider is coming out and saying, oh, maybe we should wrestle some power away from these frontier models. Yeah. Do you think. I mean, I, I mean, you can also. I, I could reasonably expect that Jassy made a comment not knowing it would result in the entire elimination of the product category for as long as the US Government said that it was eliminated. But generally kind of like people operating at one layer of the, you know, stack are definitely going to try to cut back those that are others and Anthropic coming out here and basically begging for regulation. Their problem now is it's like, well, we got stopped. You got to stop all these other guys. They would have preferred that all progress got stopped because they're in the lead. It's like I had a friend who would watch basketball games. He'd be like, I just need a button where I can just stop it when I want to. You know, it's like, game's over. My team's ahead by two. You know, and so Anthropic is actually in a fairly treacherous strategic position where they have the leading, at least enterprise product, but they don't have the R and D resources that OpenAI does or the future probable access to compute that XAI does. And so really, they need everybody to stop doing R and D right now. And they'd be in very good shape. But the fact is, I think that there's a reasonable probability that OpenAI is ahead of them by the end of the year. And xai, who knows when they'll stack up the compute to be at the frontier, but at that time, there's a reasonable probability that they'll be moving more quickly. So from Anthropic's perspective, if they could incinerate all the R and D budgets by mucking it up and you have to get a government approval for doing a marginal computation, that would be their strategically advantaged position. And everybody, no matter whether or not it was intentional from Amazon's perspective or it's, it does seem to be in their interest. And I think that's how people kind of operate. It's like, well, you know, I'm biasing things in this direction because I can see how that will play in my favor. And the world is hugely chaotic, so you don't know kind of downstream exactly how that plays out, but I think that's how they're operating. All right, last topic, I didn't mention up front, but it happened. Fox putting in a acquisition bid for Roku. Nick Roku, one of the stocks that we got asked the most questions about, and why is it so valuable, you know, digital advertising on a tv. I feel like no one really understood the story. But you, you were out there, you know, explaining it to all and how powerful this platform was, how watched it was and how under monetized it was. And now Fox, the exciting company of Fox, is taking it over. Yeah. What are we to make of this? What's going on in this landscape? Yeah, I think so. Just to give an understanding to those that might not be familiar with the story. Roku is the largest CTV company in the world. It has connected television streaming everything you're accustomed to if you're watching television today. So forget your cable box. Everything is OTT over the top. So it's all delivered through broadband, WI fi, no need for a box, it's just delivered straight to your television. Roku operates the operating system that powers their TV and other third party televisions. So they're basically the platform for television. Connected television. Right. So all of your streaming services, Netflix, Disney plus Fox, one, Tubi, the Roku Channel, the list goes on and on. Right. All of them have to work with robots, Roku as the platform. They have to essentially in the same way that Apple has an iPhone or the iOS and Apple has their app store, Roku has their own app store. You have to build an app for Roku, then Roku, depending on, you know, your advertising or premium SKU will get a cut of either the subscriptions that they help sign up for you or your advertising. And then they also have their own first party advertising, Roku. If you look at their Footprint in the U.S. they're in over 100 million households, so roughly 50% of households in the U.S. so in terms of footprint, the reason the story has been, I think, largely overlooked and what we've been trying to communicate, there's actually never been another company. If you were to compare what Roku is to the cable era that's ever had as big of a footprint in the U.S. right. It took laying cable around the country to try and get into people's homes. This is completely different. You just have to purchase Roku's television and and boom, their operating system is live in your bedroom or living room. So from a footprint and distribution standpoint, it's a massive asset that I think Fox is recognizing and probably getting a steal here. At $22 billion, they're paying 60% cash, 40% Fox stock. And they're believing that there is synergy between the Fox content library that they have and media rights that they have across sports news. And then with Tubi, which is another freem offering that is kind of relevant to the Roku Channel story. So they're believing that their synergies taking all of that content and now having this distribution powerhouse in Roku, right? Imagine you take all this content, you immediately get better visibility across 100 plus million households in the US. I mean, there could be a ton of synergies here. I think what we're trying to understand is this story is essentially breaking in real time. You know, who's going to be in charge of this new company? It's our understanding that Anthony Wood, who's the CEO of Roku, who we, you know, know very well, is going to be joining the Fox board. But it's not clear what his direct role will be in the future of the company itself in terms of the day to day operations. There's also a number of other management team members at Roku that we're still trying to understand what their role will be. Because, you know, we think the Roku, like Roku, is the gem, the asset here, Fox with their content. You can look at the growth rates of Fox versus Roku. Roku has been outpacing them just from a platform perspective and then even on the first party side. So, you know, happening in real time. This is a pretty large merger in the media space. It definitely shakes things up. There were potentially other bidders, we're not entirely sure, but I would imagine a number of companies were probably interested in Roku given what they mean to the television media landscape. Does this catch anyone out? If I were to say, you know, one other company that probably needs to get their foot into the new world, it would be Comcast. Right. If you think about what they have represented to the old TV world, you know, they haven't really been able to move into this new CTV space. I think, you know, they could have potentially been a suitor. Right. I'm just, I have no knowledge of who was bidding here, but if you were to look at some of the notes that analysts wrote over the weekend, because this story really broke on Friday that Roku is up for for sale. And then Monday today we had the news that it was Fox. But I think the list of potential suitors was Fox, Comcast, Netflix, Amazon and I think those and then Disney were really like the companies that have the balance sheet that have, you know, would want to operate in this space. Amazon would, you know, that would probably go through antitrust because they have the second largest CTV platform and Amazon Fire. So if they took over Roku, they would have 75 plus percent of households in the US so they'd be a pure monopoly from that standpoint. Netflix, the story there is Roku was actually Started at Netflix. Netflix spun it out because they didn't believe at the time, you know, this goes back to 2010 and earlier. They didn't believe at the time that you could build this platform and also own the number one streaming services because it would be too hard to bring on other potential streaming services. So they spun Roku out, sold off and divested their ownership. So Netflix could have come back in now that the CTV space is a bit more mature. But again, it would probably rub Disney, Warner, all of these other companies that want their streaming distribution the wrong way. Your Roku remote slowly loses the other. Yeah, the other. The other three buttons on it that take you directly to another streaming service. Yeah, so I would have said, you know, maybe Comcast or Disney would have had. Because I think, you know, the real unlock here and something that if you were to point to Roku and say, what is potentially holding the story back? A lot of the ad dollars in linear TV are still locked in sports. Being competitive in sports rights, you have to be one of the mega tech companies at this point. Fox is an amazing deal with the NFL for distribution rights. So this does unlock some of the sports access that Roku hasn't really been able to get because their balance sheet's just not big enough to be competitive in this space. So that's one thing that you could look to this and say, well, now they're getting this at like Roku in return is now getting access and unlock to this advertising inventory that would have probably been largely, you know, unattainable just given how large Roku has historically been and their balance sheet versus, you know, Amazon, who's bidding on the NFL, NBA, mlb, apples in there, you know, it's the behemoths. Behemoths. Is there going to be a second bidder? Would you guess? As in. I don't think so. Warner went for sale and then suddenly it was like a two horse ra, which then drove the price to very high. But here Fox seems to have swooped in and been like, yeah, sure, we'll take this. And it was probably shopped. Yeah, I'd be surprised. You know, when I first saw the headlines breaking, I thought, okay, maybe there could, you know, I didn't understand the magnitude and how far this deal had come. But if you, if you read through the transcript of the meeting they held, the joint meeting they held between Fox and Roku this morning, it does seem that they went through a pretty long process to find a suitor. And you know, they said they chose the Fox offer. So if you want to read into what that means, it's probably there were other offers on the table and they thought the Fox offer was better than the blank other offer. So I don't know at this point that there will be another bidder. I do think if you were to look at this asset and say, okay, they did, you know, roughly 4.7 billion last year. So this is, you know, getting taken out at roughly 4 and a half, 4.6 price to sales on 2025. To me that seems pretty cheap given what this will ultimately represent to the CTV landscape. Assuming that, you know, the joint company doesn't go astray. All right, okay. Exciting week. Changing leaderboards across the front. We'll see everyone next week. 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