The Prof G Pod with Scott Galloway
Prof G Markets: Has Apple Lost Its Mojo? + BlackRock’s $23B Bet on the Panama Canal
Mon, 10 Mar 2025
Still listening on the Prof G Pod Feed? Head over to the Prof G Markets feed and hit follow: Apple Podcasts Spotify Scott and Ed open the show by discussing Disney’s latest round of layoffs, why a private equity firm is taking Walgreens private, and Ontario’s decision to cancel its Starlink contract. They then analyze BlackRock’s decision to buy the ports on either side of the Panama Canal, breaking down why it could be a highly profitable move. They also discuss what Apple’s newest product launches reveal about the state of the company. Scott explains why he’s begun offloading his Apple stock, while Ed makes a prediction about where shares are headed in the next six months. Subscribe to the Prof G Markets newsletter Join us for a live recording at SXSW Order "The Algebra of Wealth," out now 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: Why is Aspiration in the news for fraud?
You're right. I'm setting you up for failure. How about let's set you up for success here and just talk about this aspiration situation. Because you wrote about this first. four years ago.
This is, by the way, one of my first jobs at Prof G Media, was you were talking about this company, Aspiration, and it was my job to go in and do the research because you had this feeling that this company, which was selling credit cards, but also positioned itself as helping with climate change, you said, this is definitely a bullshit company. You had the team look into it.
I looked into it and we determined, yes, this company is fake. We have a clip from what you said about this company on the Prof G pod.
One example, one example of reaching too far into the barrel, Aspiration, a finance firm that claims its products can, open quote, change climate change, end quote. In August, the company announced it was going public via SPAC at a $2.3 billion valuation. Change climate change. That would be awesome. Except there's a catch. This is a fucking debit card. He's so good.
Banger. And now the guy's been arrested for fraud. By the way, it never went public because I think investors eventually caught on to this. But he's now been arrested. You called it.
It was such an attempt to drape yourself in social justice while offering something pretty borderline fraudulent. They were saying that we take a portion of your credit card fees and invest in sustainable companies.
And if you read their website, and we got some financial information, we dug in, this was a shitty little credit card company charging onerous fees, claiming to do something they weren't doing and saying, oh, but we're a new economy company. And they had famous investors, they had actors.
A friend of mine, it ends up, was an investor and called me and sort of, I don't want to say put pressure on me, that said, do you want to speak to management? I think you got this wrong. I said to him, I said, we'll just call him Bob. I'm like, Bob, this is a fucking fraud. This is WeWork with a climate change veneer smeared over it.
I thought that was going to get more attention than the WeWork post because I thought it was even more obvious a fraud.
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Chapter 2: What is happening with Disney's latest layoffs?
And finally, Ontario canceled a Starlink contract worth 100 million Canadian dollars after US tariffs on Canadian imports took effect. Scott, let's get your thoughts, starting with Disney deciding to lay off 200 employees, nearly 6% of the workforce, at ABC and their entertainment networks.
It just makes sense. This is part of capitalism, and that is they need to consolidate, bulk up, and then cut costs. These companies should have one back end as far as news, and if they have different front-facing... brands that appeal to different audiences, that's fine. But last year, Disney's linear networks revenue declined 9% and operating income was down 16%. They're not alone here. U.S.
linear TV advertising will decrease an estimated 4% annually through 2030, which doesn't seem like a lot. But when it's going for another Five years, 4%, it means it's going to lose a quarter of its revenue or a fifth. And that means, you know, that's just real pain because some of those costs are fixed.
So you're talking probably, they're probably going to shed another 20 or 30% of their workforce over the next five years. I just had lunch with a fairly famous news anchor who is fantastic at what she does. And she's one of the lucky ones. She's still making a lot of money, but I think her salary got cut by 30%. And you're seeing cuts across the most famous anchors of like 20% to 80%.
Joy Reid, Chuck Todd, Jim Acosta, and Lester Holt, all fantastic at what they do or did, all too expensive. And George Stephanopoulos, his contract's been renewed, though he had to take a pay cut from his previous $20 million deal. He's lucky he got his deal a few months ago. I think it'd even be less now. Rachel Maddow renegotiated. She is the friends or the anchor of MSNBC.
She had to reduce her pay from $30 to $25 million. Yeah, cry me a river. That's not too much. Anyway, so look, the market is doing what it's supposed to do. It's reshaping. the winners and the losers. You're going to see, I think, private equity come in here. You're going to see a lot of consolidation.
I think Disney is a survivor because of this unique singular positioning around family and just the incredible IP they have. I also wonder if this is an interesting take private opportunity. But anyways, what are your thoughts?
Yeah, I find this interesting because I visited the ABC studio last week. One of the producers on ABC News took me around and it was really cool. And I was just kind of struck by how impressive this operation was. Like the office looks like a cross between like NASA... airspace control, and also like the trading floor of Goldman Sachs.
And it's filled with people like gaffers and technicians and coordinate. I was asking him like, what do all of these people do? He's like, oh, this guy's on this team, this guy's on this team. I mean, it's thousands of people, literally. It's actually 3,300 people.
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Chapter 3: Why is Walgreens being taken private?
Agreed. Captain fucking obvious.
Let's talk about Walgreens, which is going private, being bought out by this private equity firm, Sycamore Partners. This is kind of a big moment for this organization. Very iconic American company. This company has been around for 120 years. It's been a public stock for almost 100 years. It's been public since 1927.
And now you have this icon of American consumerism, and it's being bought out by a PE firm for a tenth of what it used to be. Ten years ago, this company was worth $100 billion. The price tag today is $10 billion today. Your reactions to this news, Scott?
I think they're just overstored. I think they're doing the right thing. Again, capitalism in the markets at work. I can't believe this thing was ever worth $100 billion. What I'd be curious, I don't know if you have any information on this, is that my go-to as well, this is Amazon, another victim of Amazon. But I don't really know. Do you have any thoughts on what's actually going on here?
I think it's a whole confluence of things. And the way I would summarize it is just bad management. I think probably one of their worst mistakes is just their inability to modernize their pharmacy business, which they really depend on. I mean, those Walgreens pharmacies were incredibly traditional when you compare it to the pharmacies at somewhere like CVS.
And I think they woke up one day and telehealth had taken off and reimbursement rates had come way down and they just got crushed, especially against CVS, which was establishing itself in the pharmacy benefit manager business too. They also bought VillageMD, which was a disaster. They were just too late to the party. They bought that company after COVID. It didn't work.
They ended up taking a $6 billion impairment charge. And then I think the final thing were these lawsuits. They just got a ton of lawsuits, and most of them they settled on. And just this year, a couple months ago, they got sued by the DOJ for essentially selling opioids illegally. So I think just, it's kind of simple. From a management perspective, it's been a disaster.
I think the question is, what does Sycamore do with this company? Where do they go from here? It's expected they're going to split it up into three units, where you have Walgreens Pharmacy. They also own Boots in the UK, which I'm sure you're very familiar with now, which is their UK pharmacy. And their healthcare unit, which is called Shields Health.
And Sycamore did a similar thing to Staples, which they bought back in 2017. One interesting stat from the team that I'd like to get your reaction to, one in five private equity-owned companies go bankrupt within 10 years of acquisition, and that is 10 times higher than the rate of publicly-owned companies. So I guess the question I would pose to you is, what does Sycamore do with this company?
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Chapter 4: Why did Ontario cancel its Starlink contract?
It is incredibly disappointing that we aren't showing a fraction of leadership that this guy is showing.
But I think you say, I mean, the domino theory of cowardice. I think this is basically showing that we're about to see the domino theory of revolt. I mean, this guy's the first one to do it, and it's only $100 million, which is not a big deal for Starlink, which did $8 billion in revenue last year. But Canada overall is Starlink's second largest market behind the US.
They've got half a million Starlink subscribers in Canada. And I think what this shows is, you know, this guy's the first to do it, but we're going to see a domino effect. And I think all of these other provinces follow suit. I don't think you want to be a leader in Canada who looks weak up against Donald Trump.
And what we're seeing is that the entire nation is sort of coming together and rallying against a common enemy. And there's just this one stat I found fascinating from YouGov. 82% of Americans say they consider Canada to be an ally. In Canada, that number is now 33%.
I think this is what is going to probably push Musk out of government or he's going to decide he's going to try and declare victory and leave. Because if you look at Starlink customer base, I mean, Tesla is already crashing. It's literally imploding.
I don't know if you saw this video of Mardi Gras and someone, a Tesla truck or whatever you call it, was rolling down and everyone started throwing shit at it. Starlink was his growth vehicle. And there's one and a half million customers of Starlink in the US. You referenced that there's 530,000 in Canada, its second largest market. That's real.
And then the number three market, Mexico, at 435,000. And then the number four is Brazil, who probably doesn't feel that great about Musk, who was threatening, was fucking with their internal politics. So You know, Starlink's value in the private markets, it's the most valuable company – one of the most valuable private companies and the most traded in the secondary market.
And I think it's a third of a trillion dollars. I think it's trading at $3 or $350 billion. That number is going to come way down because if they can't show the kind of growth that they've been showing – Also, you are seeing a lot of... You want to talk about Greenland's going. If I'm Telesat or Explore, the competitors, they have no trouble raising a shit ton of money right now.
And because there is about to be a big gap in the marketplace for this type of broadband provider.
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