Ben Gilbert: belief

Transcript context

…All right, there it is. Ben? Because David is theoretically winning, I will go next. I did what Packy did. I made a list of things that I was contemplating and I thought I'd share some of those just because I think they're interesting things you could buy with your pick right now. Literally, anything because everything is on sale. I thought about Google again, which was I think the best pick any of us made except Solana. It is still an amazing business, still cheap by valuation. Any way you want to slice it, price-earnings, price to sales, whatever, not my pick. I kind of like the thesis that's going around Fintwit right now where people are saying Amazon has gone so low that they're basically valuing the retail business at zero and it's only AWS contributing to its market cap. I think you can build some models to sort of show that. Would I take Amazon's retail business as a free option? Absolutely, I would. Again, not my pick, just like Packy. There's a Twitter one that I had to which is to buy Twitter right now because there are free $5 bills attached to every single share. For folks that don't get that joke, there's basically an arbitrage you can run. If you think that Elon is actually going to close this deal and payout every single Twitter shareholder at $54.20 per share, you can go buy a Twitter share right now for $49 or $50. I don't know what market closed out today. That's free money if you think Elon is actually going to complete the deal. Not my pick. What I'm going with is one that I know David and I have discussed at length. I can't remember if we've done it on air, but I looked back at our idea dinner picks and we haven't actually picked it on the idea dinner, and that's Coinbase. This is a value investment and I'll explain myself, but this is a crypto value investment. Let's set the anchor point that we should all think about this business. In the last 12 months, they've done $10 billion in free cash flow. It's astonishing. That is money piled up in their bank account based on the profits of the business that they're operating. They're printing money. The market cap at close today was $34 billion. Wow. If I was running a business that was generating $100 of cash per year—just to make the math easy—would you buy that business from me at $340? That seems like a pretty good pick-up, especially one that has network effects, the leading brand in the space, growing incredibly fast in a gigantic wave. Now people can think crypto is going to crash or the bubbles are going to pop. They're the most established company in this space and it is still the first inning of all of crypto. You have the opportunity to do—and here's where it gets kind of interesting—a Berkshire Hathaway–style investment into a crypto company that is the leading crypto brand in the world. It seems pretty safe to me. Famous last words. To me, you're very cheaply valuing the unbelievable business they have today. I'm sure there's going to be margin compression and sure the take rates are going to go down over time. I think you have a lot of resilience based on the price, not to mention all the free options that come stapled to that business, which are the NFT business and every other venture that they're going into. On top of all of this, I think a great way to play crypto in Web 3.0 is to look at the companies that have centralized all the activity and are able to run Web 2.0–style businesses or Web 2.0 business models using the heat and light that's all shown on Web 3.0. Coinbase is literally the best example of that. Not only that but Coinbase and FTX. They make money whether crypto goes up or down, as long as it's moving.…

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