Ed opens the show by discussing Shein’s potential valuation cut, South Korea’s crackdown on DeepSeek, and the controversy surrounding Javier Milei’s promotion of a memecoin. Then Kyla Scanlon, author of “In This Economy? How Money and Markets Really Work”, returns to the show to unpack the concept of “FAFOnomics” and explore Gen Z’s growing concerns about the U.S. economy. Finally, Kyla offers advice for Gen Z on navigating today’s labor market and emphasizes why adaptability is essential for career success. Meet us at SXSW Subscribe to the Prof G Markets newsletter Order "The Algebra of Wealth," out now Subscribe to No Mercy / No Malice Follow the podcast across socials @profgpod: Instagram Threads X Reddit Follow Scott on Instagram Follow Ed on Instagram and X Learn more about your ad choices. Visit podcastchoices.com/adchoices
Chapter 1: What is happening with Shein's valuation?
Korean shareholders are urging the company to slash its valuation to around $30 billion. That's down significantly from its peak of $100 billion in 2022. According to those familiar with the matter, some shareholders believe the valuation cut is necessary to get the IPO over the finish line. South Korea has temporarily blocked new downloads of DeepSeek over privacy concerns.
Regulators said the app will be reinstated on Apple and Google app stores once DeepSeat complies with the country's personal data protection laws. And finally, Argentina's president, Javier Millay, is facing lawsuits and potential impeachment after promoting a meme coin on X. The coin briefly soared to a $4 billion market value only to crash within hours of its launch.
The coin's creators are accused of a rug pull scheme where developers launch and promote a token and then cash out as its value peaks. Okay, so let's start with Shein. Shein is down to $30 billion reportedly valuation. The first thing I can tell you about this, Scott Galloway is not gonna be happy. As many of you probably know, Scott is an investor in Shein.
I actually don't know how much he invested. I also don't know what the terms were on his investment. I don't know what the valuation was. And we will find out. We'll make sure we ask him when he comes back. What I do know, though, is that the last time Shein was valued, it was worth $66 billion. And the year before that, it was worth $100 billion. So we're now looking at a $30 billion IPO.
That is a 70% decline in less than three years. This is not good news for Sheehan. Now, why is this actually happening? We've had a lot of people say that it's market conditions, there's supply chain issues, there's issues with the logistics on the IPO. Maybe that's true. But I think most of this is a distraction from the real issue, which is Donald Trump.
And more specifically, Trump's suspension of this tax law that we've talked about known as the de minimis provision.
American consumers will soon see the effects of President Trump's new tariffs on Chinese goods, especially if they shop online at discount stores like Taimou and Shein.
So what is the de minimis provision? This is a rule that we have in the US for any shipments that come into the US, if they're worth less than $800, then you don't have to pay taxes. And this was originally designed so that Americans could go on vacation and go and buy souvenirs and bring them back and it would be duty-free.
But instead what happened is we had all these foreign e-commerce companies who realized, okay, if we can make our products really cheap, if we can make sure that every order is below $800, then we can access the U.S. economy, we can access the American consumer, and not have to pay taxes. And so that is why in the past decade, the total value of de minimis shipments in the U.S.
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Chapter 2: Why is South Korea cracking down on DeepSeek?
has gone from $40 million to $40 billion. And more than 30% of those shipments come from two companies, and those companies are Timu, which you've probably heard of, and yes, Shein. So in other words, this tax law is the backbone of Xi'an's business model. So Trump has threatened to end this. He knows how important this tax exemption is to China. He knows how important it is to Chinese companies.
And if he does end it, it would likely ruin Xi'an's business. So this has always been one of my problems with Xi'an as an investment, is that their key differentiator isn't any form of technological innovation. Their differentiator is their willingness to exploit a loophole in the US tax code.
Now, as we know, exploiting tax loopholes is a great business model until it isn't, until something in the tax code changes. And that's exactly what's happened here. This loophole on which this entire business was built is now under threat.
And until we have clarity on what will happen to the de minimis provision, I don't think this company can go public because we simply can't know what the business is going to look like. So Scott, if you're listening to this right now, I think it's going to be a long time until this company actually IPOs. It was supposed to IPO this April. That was the goal.
It's now looking like it's going to be delayed a lot longer. And if I had to put my money on it, my bet would be that an IPO is probably going to come in 2026. But maybe I'm wrong. And let me know if you think so. And you can always hold me to account.
Now let's talk about what's happening with DeepSeek in South Korea.
So South Korea has temporarily blocked new downloads of DeepSeek. We don't know if this ban is going to last longer. I think this is the right move from South Korea. And I'm honestly surprised it didn't happen sooner. The reality with DeepSeek is, yes, it's cheap. Yes, it uses fewer chips. Yes, its reasoning capabilities are highly advanced. But it is also unbelievably insecure. as a technology.
It's one of the most compromised technologies we've ever seen. Its encryption is the weakest in the industry. It is, according to research, four times more vulnerable to hacks than ChatGPT. We've already had multiple data leaks, and Wiz has published some pretty concerning research on this too.
And on top of all of that, their data is stored in the servers of the Chinese government, and DeepSeek has openly said this. So if you're a nation like South Korea that has even a slightly frosty relationship with China, there's practically no reason you shouldn't ban this. It really isn't worth the risk.
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Chapter 3: What controversy surrounds Argentina's Javier Milei and memecoin?
And so did Glenn Youngkin in Virginia. So to me, This is sort of a no-brainer. I cannot see any meaningful upside in keeping this app around. But perhaps I'm missing something. And if I am, let me know in the comments and we can have that debate. But as of now, the stance for me is quite simple. DeepSeek is not worth this risk. South Korea has got this right. DeepSeek should be banned.
And finally, let's talk about what happened with President Javier Millet, the president of Argentina. This story is honestly insane to me. Let's just start with the timeline of what actually happened. So, on Friday...
a website was launched promoting this project called the Viva La Libertad project. And the mission was, quote, to boost the Argentine economy by funding small projects and local businesses. Now, exactly how this would be accomplished was not clear. It wasn't really mentioned anywhere. And in conjunction with that project, there was a cryptocurrency that launched called Libra or LibraCoin.
And just a side note, It was launched on this platform called FixFloat, which notably does not ask for any personal identification. Everyone is anonymous, and it is most commonly used for scamming and rug pulling. So it's a very shady start to begin with. None of this really mattered, though, until half an hour later,
The president of Argentina, Javier Millay, tweeted out the news of Libra and LibraCoin, and he directed his 4 million followers on where they could go online and buy the token. And within 45 minutes, the market cap of Libra went from virtually nothing to four and a half billion dollars.
Now to put that in context, that would make Libra, this cryptocurrency, the ninth most valuable company in Argentina. Within an hour, one and a half billion dollars worth of Libra coin was transacted between buyers and sellers. Then, all of a sudden, the early investors started to sell, and the value of Libra plummeted.
And after one hour, Libra had lost 70% of its value, until eventually President Milley deleted his tweets, and he apologized for what happened. He said, quote, I was not informed of the fine details of the project, and after learning, I decided not to continue spreading it. But by that time, the damage had already been done. 75% of the investors lost money.
And according to the on-chain data, many lost up to $10,000, some lost up to $100,000. So the financial damage here is once again, just enormous. And the winners, of course, there are always winners with these crypto tokens. The winners were the developers of Libra, who sold at exactly the right time. Many of them made millions, and one of them netted almost $9 million in profit.
So I think what we have here is the same dynamic we had with Trump coin, where the power of a presidency, in this case Argentina's presidency, was abused. to essentially trick people into wiring their money to a handful of anonymous individuals with no financial protection, no recourse, and it's unlikely that these people will ever see their money back. I doubt it will ever happen.
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Chapter 4: What is 'FAFOnomics' and how is it impacting the economy?
Hooters has now filed for bankruptcy, but they say they are not going anywhere.
Last year, Hooters closed dozens of restaurants because of rising food and labor costs.
Hooters is shifting away from its iconic skimpy waitress outfits and bikini days, instead opting for a family-friendly vibe. They're vowing to improve the food and ingredients, and staff is now being urged to greet women first when groups arrive.
Maybe in April of 2025, you're thinking, good riddance. Does the world still really need this chain of restaurants? But then we were surprised to learn of who exactly was mourning the potential loss of Hooters. Straight guys who like chicken, sure. But also a bunch of gay guys who like chicken. Check out Today Explained to find out why exactly that is, won't you?
So we want to introduce you to another show from our network and your next favorite money podcast, for ours, of course, Net Worth and Chill. Host Vivian Tu is a former Wall Street trader turned finance expert and entrepreneur. She shares common financial struggles and gives actionable tips and advice on how to make the most of your money.
Past guests include Nicole Yoder, a leading fertility doctor who breaks down the complex world of reproductive medicine and the financial costs of those treatments, and divorce attorney Jackie Combs, who talks about love and divorce and why everyone should have a prenup.
episodes of Net Worth and Chill are released every Wednesday listen wherever you get your podcasts or watch full episodes on YouTube by the way I absolutely love Vivian too I think she does a great job
Welcome back. Here's our conversation with Kyla Scanlon, financial writer, video creator, podcaster, and author of In This Economy, How Money and Markets Really Work. Kyla, thank you very much for joining us once again on Profiteer Markets. Thanks for having me. So we're exactly one month into the Trump presidency. A lot has happened. We've had tariffs. Doge, we've had drama with Greenland.
I mean, the list kind of goes on. I guess what has stood out to you so far and what have been kind of your main takeaways from this presidency so far?
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Chapter 5: How can Gen Z navigate today's labor market?
Yeah, chaos as a strategy sounds about right to me. Why do you think we have reached that point? Why do you think people are attracted to this chaos as a strategy system that we seem to be reverting to right now?
I think that there's a lot of distrust in institutions. And so you see things like the spring 2024 Harvard Youth Public Opinion Poll where they asked young people, you know, what institutions do you trust in? And trust in all institutions except for the United Nations was down by double digit percents. you know, trust in the media, trust in the White House, trust in Congress.
And so I think you have this base of people who just don't trust in the possibility of things getting done. And so that drives, you know, actions like Doge is able to take, like people support that because it's like, well, nothing else seems like it's working. And so you have that lack of trust. And then you have
The echo chambers that can be created by social media where people are hearing that, you know, this sort of strategy is the best way to approach it. There's a lot of misinformation flying around right now, like with social security payments and an understanding of what nuclear safety workers do.
So I think it's that like there's this this lack of belief and that's all compounded by the systems that we engage in every single day. You know, the algorithms perhaps perpetuating that even more.
One of the big themes you talk a lot about is this idea of the vibe session. A lot of people love that term. And basically what that means is this disconnect between the reality of the economy versus the way people feel about the economy. And it was very relevant last year when you had low consumer sentiment, but at the same time, the economic data was actually quite strong.
I'd just be interested to hear what you think about where we are today. Do you think we are still in a vibe session? Is there still a disconnect between how people feel about the economy versus how the economy actually is going right now? Or do you think we've kind of come to our senses?
I mean, I think the big thing with the vibe session is we did see and I wrote about this in my newsletter. Like we did see aspects of the vibe session show up in the electoral data. Like part of the reason that people voted for Trump is because they were like, I'm sick of this economy. I'm really tired. I just wish somebody would make it easier to afford a house. And that's so valid.
Part of the vibe session is the data might not be telling the whole story. Aspects of structural affordability like housing and child care and elder care are very important and they impact people's lives and they're extraordinarily expensive. And so with the Bob session itself, at least right now, those things are still extraordinarily expensive.
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