The Liquidity Event Podcast: Episode 58

 

Episode 58: Loans of Power

It’s Lord of the Rings day on the podcast! Elon Musk doesn’t like the portrayal of men in the Rings of Power, well jokes on him, we haven’t even met the race of men in Middle Earth yet. After the first five minutes of this episode, you’ll wish you never even left the Shire. No surprises here but AJ does not agree with Elon Musk’s take on the show. Then we get into some actual finance articles about Mark Cuban’s pharmacy start-up and the withdrawal of the Chobani yogurt IPO. We’ve got a few TikTok influencers trying to take their tiny marketing business public and a neat app that will find a nice private outdoor space for your yuppie dog to play in. Shane’s home state of Mississippi decided to tax Biden’s student loan forgiveness as an assumed F*** You to the democratic administration. This one is twisted.

Read the Full Transcript:

Intro:

This podcast is for informational purposes only and should not be considered tax or investment advice. Welcome to The Liquidity Event. A show about all things, personal finance, with a laser focus on equity compensation, hosted by AJ and Shane of Brooklyn FI, each episode will take you through the week's news on FinTech, IPOs, spacs, founder wins and fails, crypto and whatever else these nerds think is interesting. Learn more and subscribe today at brooklynfi.com.

AJ:

Hello and welcome to The Liquidity Event. We're your hosts, AJ.

Shane:

And I'm Shane.

AJ:

This is episode 58. You are Shane with a raspy ass voice. This is episode 58 being recorded on September 7th, 2022 airing on a podcast app or YouTube channel near you on Friday, September 20, not 20, 9th. Friday, September 9th, 2022. How you doing Shane?

Shane:

Good. What podcast app do you use?

AJ:

Typically I use Overcast, but it's been sluggish for me. So I've actually gone back to Apple Podcasts recently and it's pretty good. I know you use..

Shane:

I use Pocketcast, the paid version. Yeah.

AJ:

Yeah.

Shane:

Big fan of paying for apps.

AJ:

Yeah, I pay for Overcast, but for some reason, it's just been really slow when I'm out and about, not on wifi and I'm searching for a new podcast. It just won't play for me. So I got really frustrated. I went back to Apple.

Shane:

Yeah. Seems like a key component of a podcast app.

AJ:

To be able to find a new podcast and listen to it. Speaking of which, are you watching, reading or listening to anything good these days?

Shane:

Two things that I've been watching. Very uncharacteristic of me, House of Hammer, the Armie Hammer true crime doc. That's funny. That guy's really handsome for a cannibal.

AJ:

Armie Hammer is incredibly handsome.

Shane:

Right. But he wants to eat people, so there's that. I think you would dig it too, it goes back. It's like a lot of old money stuff. It goes back like four generations. I think his grandfather had president Kennedy on his phone.

AJ:

Yeah. The Hammer museum in Los Angeles.

Shane:

Why name your kid Armie? Is that an old name? I don't feel like that's one of those.

AJ:

Because the dad's Armand, right?

Shane:

Chester. Right. The great grandfathers Armand.

AJ:

Right. Right. Great grandfather.

Shane:

It's like naming your son, Jackie.

AJ:

I don't know. I'm not naming my kid Armie.

Shane:

Yeah. Anyway, really annoying.

AJ:

Or Ali?

Shane:

Well, that's not your, well, yeah, that is your legal name. Yeah. What is that? Where does Ali come from?

AJ:

I don't know.

Shane:

Your old friend? I take it back, it's a cool name.

AJ:

Yeah. Anyway.

Shane:

Alexandra. And then Rings of Power of course. Amazon's Tolkien extension of the universe.

AJ:

So the podcast that I was trying to listen to in my podcast app and failed was like, I was listening to a lot of podcast recaps of the Rings of Power, the first two episodes that came out last week. After having watched them a couple times through myself.

Shane:

You're trying to do a BTS on Rings of Power? Behind the scenes?

AJ:

A little bit. Yeah. I mean, I just wanted to talk about it and say that it's so good. And I set my expectations low and they were greatly exceeded. You still haven't seen it. Right?

Shane:

I mean, I was in the room when it was played.

AJ:

Oh my God. You were giving me so much shit last week. You're like who's not a real fan folks because I didn't watch it on Thursday night when it came out because I had-

Shane:

Oh right, yeah.

AJ:

A previous engagement anyways.

Shane:

How was your party?

AJ:

It was great. It was me and Josie and Michelle hanging out and Josie passed out on the first 10 minutes.

AJ:

Nice.

AJ:

And Michelle and I nerded out until about 2:00 AM and it was wonderful.

Shane:

Speaking of nerding out, you have a...

AJ:

Oh yeah. I did [inaudible 00:03:51]

Shane:

Legit full spreadsheet about a microcap IPO that you're going to go through right now. Is that what's happening?

AJ:

That's what's going to happen. So folks, I do have an IPO deep dive this week. The size of the IPO is not terribly exciting. They're trying to raise $17 million, but I was very interested in what's going on here. So the company is called Asset Entities and I gave this an 11 out of 10 on this snake oil scale because I couldn't actually figure out what they do there from their S-1. So we pulled their S-1, which is the document that they have. So they're filing to register securities because they want to go public and be listed on the NASDAQ and they just filed last week. And so from their perspective, they say Asset Entities is a technology company providing social media marketing and content delivery services across Discord, TikTok, and other social media platforms. We also design develop and manage servers for communities on Discord. So it's a boutique marketing firm for Discord.

AJ:

What is that? But when you dive into the S-1 a little bit, basically they keep talking about a lot of their IP, a lot of their value is in the followings that their founders have, that they're hugely influential on social media. They're very active in the TikTok investors forum, but I went to look up their follower accounts and I don't know so much about TikTok, but I feel like you have to have millions of followers on TikTok and across the three founders that are mentioned as the big influencers, they have less than a million and a half fault. They barely break a million. So that was the first sus, what's going on here?

AJ:

What else there? They made less than a million dollars last year. And yeah, this big warning was the company's independent, registered public accounting firm has expressed substantial doubt to the company's abilities to continue as a growing concern. So the accounting firm that they had to hire this third party auditor basically says they have doubt that the company can actually function anymore because of the way that they're spending money at this time. So that's a bit of a red flag for a company that's trying to go public and trying to deliver value to in investors here. Shane, you said you're familiar with these guys. You've seen videos of them before.

Shane:

Oh yeah. I mean, have just seen some of their videos pop up, which are very funny. And it's like, I probably saw it on Twitter or Instagram. Probably on Instagram where it was originally posted on TikTok because I'm in my mid thirties so that's how I watched TikTok. So this just a video of an incredibly young kid holding a sure microphone. And just speaking with such what's the confidently incorrect or such sincere confidence about a topic though, that he surely doesn't know much about. He's talking about real estate investing and he is very much a six in the morning conversation that you would have with your friends over drugs. Listen here, bro. You just get one. You get this one house.

AJ:

One might have this conversation.

Shane:

It's like you get this one house-

AJ:

Get a house and it multiplies and you put all your equity in it. You lever it the fuck up over and over again, you multiply and you're printing money.

Shane:

Do it again. You do it again. You get another loan, you go out there, the equity in the first house, it's going to go up in value. So you can take out a line of credit because of the equity on that house, you go buy another one. It's like, yeah, dog. We understand how mortgages work and how equity works and how being over leveraged is. I guess when 2008 happened, you were six years old. So that makes a lot of sense for that not to be a part of your mentality.

AJ:

Understanding. Yeah. Of cycles.

Shane:

Yeah. This is the first recession. Right? Right, right, right. This is the first recession. The last recession that this person's been through, elementary school. So yeah.

AJ:

Yeah. And look, we're young. I don't like to knock people. I don't like to knock young people for trying. And at the end of the day, maybe they started this company with the, we're going to bring investment advice to the masses. Why should there be gatekeepers? I'm on board with that. But essentially they're making money off of getting referral fees from crypto platforms. And the business model appears to be very thin. This is a no from me, dog.

Shane:

I don't know. Whatever.

AJ:

Oh, you're into it?

Shane:

I don't give a shit. What are they going to do? They have an advertising company for TikTok and discord and they're going public. They're trying to raise $15 million.

AJ:

Brooklyn FI has more cash reserves of this company, by the way.

Shane:

Is that right?

AJ:

Yeah that's correct.

Shane:

Whatever. They're trying to raise $15 million to do what? What are they going to use the money for? What's the purpose of the money? Did you find that in the S-1?

AJ:

Didn't get that far, no. No. I mean, it's very thin. There's not a lot of... It's building out. What did they say here?

Shane:

Our future performance depends on the ability of our co-founders and leading social media influencers, Arshia, Kyle and Jackson and Arman... There we go. There's another Arman, Armie. To retain and grow their social media followings and fanbase by creating quality content. So they're trying to raise $17 million to get famous-

AJ:

To create, yeah.

Shane:

On TikTok?

AJ:

TikTok. Yeah.

Shane:

I mean, yeah, fuck that. I hate that. That sounds terrible. But I don't know. I mean, I would bet the rest of my future income that all these kids' parents are rich and they are just taking their shot because you can when you've got rich parents. You can just shoot a shot when you're in your early twenties. And if you miss it doesn't matter because you've got the safety of retreating to your family's money.

AJ:

And I would imagine, yeah, someone's helping out with, oh you got, oh you should talk to Billy, our friend next door. He's a securities lawyer. He'll help you get the registration done. Why not?

Shane:

Right. I'm sure there's a lot of family money wrapped up in limited partnerships and the family probably needs tax write offs. So let's throw a 1% of our family's net worth at the kids. I mean, I've seen other kids also start crypto startups that were clients of ours. And I say kids, I just mean anyone in their twenties and have two or three commas behind their names at this point. I don't know, actually since the crypto crash, I don't know if that's still the case or if those specific spacs ended up going through. I need to check in on that actually, but shoot your shot while you can. I don't know.

AJ:

Speaking of shooting your shot while you can, Elon Musk.

Shane:

Oh. Are done with this IPO deep dive? Okay.

AJ:

Yeah. Yeah. Yeah. Elon Musk disagreed with me and thinks the Rings of Power is garbage. On Sunday, he tweeted Tolkien is turning in his grave. Almost every male character is such so far a coward, a jerk or both only Galadriel is brave, smart and nice. Welcome to the real world, Elon. So Elon hates the Rings of Power because there are not enough strong male characters.

Shane:

Yeah. I mean-

AJ:

If you had seen it, you'd be able to weigh in on this.

Shane:

I've seen the show. Leave me alone. Yeah. I mean, no surprise that Elon has a next beard opinion about the show. Yeah. I mean he is going to have-

AJ:

Do you have the same hair.... Sorry. Side note. Are you having the same hairdo today?

Shane:

Don't distract me for my take on the Rings of Power. Please no.

AJ:

Show me the back of your head. If you're listening on the pod, you should check out the YouTube.

Shane:

You got to speak into the mic when you're going to make fun of my hairdo.

AJ:

Got a good Legolas situation going. I would take a snow troll over this troll any day. Anyways.

Shane:

I saw the snow troll scene. It's a great scene. Yeah.

AJ:

Okay. I should have said spoiler alert, but there's a snow troll.

Shane:

What is your, oh, I mean snow... What is your take on the content of the show since you have some behind the scenes on what can and can't be included?

AJ:

Oh yeah. So I didn't know this going into the show, but this in the about six hours of content, I watched four people who did all the research.

Shane:

Oh, you did a cocktail party conversation research podcast and behind the scenes. Gotcha. Gotcha.

AJ:

Thousand percent. Thousand percent. Yeah. I have not read Silmarillion in many years. And I think I probably read the first 50 pages and I will admit that depth is not, that's not my love of Lord of the Rings. My love is the movies and the Lord of the Rings books, which fits well with the series because that's the rights they have. So they don't even have rights to the Silmarillion. So the Silmarillion is sort of the historical telling of the first age of Lord of the Rings of the world of Middle Earth. So we don't have any rights to that. So they're kind of limited. So you're going to see... So for those of you who are not huge Lord of the Rings fans, the series will feel very familiar because it's all tied to the movies. Those are the rights they have. They're trying to make the people happy, which I think is a good thing. That's what Peter Jackson did. He took this unfilmable thing and made it into three pretty long, but succinct movies.

Shane:

Yeah. I love the background on how Peter Jackson couldn't sell it. Ended up at-

AJ:

11 studios, ended up at Newline.

Shane:

Well, no, he went to Weinstein first at Miramax and he tried to make him make it into two movies. And then he is like, all right, well I'll make it in two movies. Can you imagine how bad that would've sucked. And then he went back and he said, actually, I think I need you to make it into one movie. And then that wasn't going to work. And Newline sent him a save them and the orc from the second movie is made to resemble Weinstein as the ugliest orc captain from the second movie. So little fun detail. Oh anyway, that's enough Lord of the Rings for wind up of The Liquidity Event.

AJ:

Do you want to watch... Do you want to start a Rings of Power watch party podcast with me?

Shane:

Yeah. I'm sure there's not enough of those on Apple Music.

AJ:

There's only six. There's only six.

Shane:

OK. We'll just add financial planning takes, how can they afford all those bows and arrows or what's the interest rate?

AJ:

Yeah. I mean basically elves must have some kind of social security administration going on, but it has to last for thousands of years, not hundreds of years.

Shane:

Right? Well, we got to switch from the gold standard to the myth row standard, but that didn't happen until the third age where-

AJ:

Right. Well, the wizard showed up and raised all the interest rates and then it all went to shit.

AJ:

Anyways, speaking of wizards showing up and saving the world, Mark Cuban, you may know him as the owner of the sports team that I'm going to forget cause I don't know anything about sports and very successful investor. All around philanthropist, co-host of Shark Tank, he's got a new pharmacy startup called Cost Plus Drugs and he is trying to cut out the middleman for generic drugs. So if you have a drug that has a patent, a drug company's patents expire after 20 years. So that's the point at which we start to get those cheaper generic versions, but even so those have a big markup. So he's trying to take those generic drugs directly to the people at prices they can afford. Brand new, launched this year. But so far, the jury seems to think it's pretty successful. Thoughts here?

Shane:

Yeah. It's making waves. Essentially, it takes the exact cost of generic drugs and adds a what $5 shipping fee and then a $3 handling fee and then a 15% profit margin on top of it.

AJ:

Love transparency. Yeah.

Shane:

I think it cuts down a lot on the administration of the company when it comes to figuring out prices. The article that we have here from CNBC points out that it's only currently working with generic drugs and not brand name drugs. So these are drugs that have passed their 20 year of intellectual property or trademarking or what have you so that other people can make the drugs. Generically, there still will remain a brand name that will probably have a lot more market share. And then generics don't have the name and the brand that the brand names will. So it's really just a drop in the bucket when you compare it to brand name drugs.

Shane:

And what really makes me think about this, supposedly 80% of the costs of the drug expenditures go to the brand name drugs that are within their 20 years. I always think about the American system that we have. Yes, pharmaceuticals are very expensive because we create brand name drugs here. If there was no incentive, I worry about incentives a lot when people come in for pharmaceutical policy changes. Okay. So the brand name drugs, where most of the money's going because its the brand new drugs that solve all the problems, is that the case? Are people spending all this money on all these drugs because they're the new drugs that have been recently invented to solve problems, right?

AJ:

Yes. But I mean it's like you-

Shane:

That's a good side effect of our system. The bad side effect is that it's super expensive, but is it super expensive because you really need those-

AJ:

Because there's the incentive.

Shane:

Drugs cause of the new stuff. Yeah.

AJ:

Right. It's like, we haven't fixed cancer, but every time a new cancer drug comes out, it costs thousands and thousands of dollars because it's the first time it's ever been done before. And it's been tested and tested testing is so expensive, getting FDA approval so expensive, but at what point? But I agree with you, I think-

Shane:

The drugs wouldn't exist without the profit-

AJ:

Without the incentives on the pharmaceutical executives, making millions and millions of dollars. Otherwise, I mean that was the failure of communism is lack of innovation. So if we take away the incentives for innovation, what are we left with?

Shane:

Yeah.

AJ:

I still think drugs should be cheaper. This is opposite of Martin Scarley.

Shane:

I really,

AJ:

Yeah. Hot take you guys.

Shane:

You're going to get a lot of votes with that one.

AJ:

Hot take.

Shane:

Lower taxes. Same amount of spending. We're going to be good.

AJ:

Student loans forgiven. Free healthcare. Yeah. This is the opposite of what Martin Scarley did. First of all, it's like side note. Are you using Capsule by the way, for your prescription drugs?

Shane:

I do not have any prescription drugs.

AJ:

You've never needed to get a prescription filled in the past two years?

Shane:

Voluntarily, I got some ADHD meds that I take sometimes.

AJ:

Okay.

Shane:

But no, that's it. Yeah. I'm very fortunate healthwise. Yes.

AJ:

Lucky you. Anyway, for those of us with underlying conditions, Capsule is an incredible, if you're not using it, this is not an ad. I just love the service so much. You sign up when you go to your doctor, you tell them your pharmacy is Capsule. It's in New York City. It's in many big cities. It's not just specific to New York and Capsule-

Shane:

The branding was done by our clients.

AJ:

Really? Awesome. I love the branding. The branding's great. The app is great. You literally get a text that says your prescription is ready. When do you want it? And you say, I want it in two hours, four hours or tomorrow. And somebody shows up at your house and you sign for your drug. And it comes in a cute little bag and the cost. I haven't done like a cost comparison, but I don't think it's terribly disrupt. I don't think it's that much different from just like your CVS around the corner. It doesn't seem like there's that much of a markup for the level of service. Somebody literally showing up at your house.

Shane:

Sorry, there's an ambulance in my house. I'm going to let you keep rocking here.

AJ:

Oh, oh. I thought you were like, hurry the fuck up. I thought that's what that meant. Oh you meant keep talking. Speaking of talking, while we wait for Shane's ambulance to pass, I've got a really boring update here. Is that the SCC issues its first fee rate advisory for the fiscal year 2023. So what the hell does that mean? Earlier, we were talking about this company going public and they are filing to go public on NASDAQ and they will have to register securities. So in order to do that, they have to pay the SCC a fee because there's a lot of administrative costs involved in taking your company public. And for the first time in a long time, we have that fee being raised from $92 and 70 cents per million dollars of securities to $110 and 20 cents per million dollars of securities. So I think my math's right here. If you're registering a billion dollars of securities, you'll have to pay $1,700 or sorry, $17,000 more. So I'm not sure how much this matters at all.

Shane:

It matters if you care about inflation AJ in this country, this administration continues to ignore what impacts your everyday citizens.

AJ:

Sarcasm.

Shane:

Thanks again Brandon for yet another jab in the eye to your everyday walking around fella in this country. Okay.

AJ:

That was sarcasm folks.

Shane:

Did you see him freak out on the Trump... Yeah. As he gets older and older, he's starting to become, what do they call him? A dark Biden or something. That's like, he just doesn't give a shit anymore.

AJ:

Oh, when he goes off. Yeah.

Shane:

Yeah. When he loses his cool and freaks out, he said everybody has the right to be an idiot at a-

AJ:

Oh, so good

Shane:

At a rally today. Yeah.

AJ:

What a great line. I'm going to get that tattooed. That's my next tattoo.

Shane:

I wish he would open up a little bit more.

AJ:

You wish Biden would?

Shane:

I mean, I wish every politician would. As long as they aren't lying to their constituents or harming them like so many do.

AJ:

But we can never run for office because of this podcast. So we're good to go. Don't worry. We've opened up.

Shane:

Everyone can run for every office at this point. We're good.

AJ:

I did put this article in-

Shane:

Speaking of running around. Yeah. We have the Sniff Spot article about dogs that need some exercise. Yeah. AJ popped in this GeekWire article about a start up.

AJ:

I did not put this in here for you. My sister put this in here and wanted me to tell you about it. Cause my sister just got a puppy.

Shane:

Oh cute. Yeah. This website geek wire has the most ads I've ever seen on a website ever. It's like Angelfire from 2016 over here, 2012. It's like you click anywhere and it opens up 14 websites. Anyway, so yeah, this guy has got a little startup, which is cute.

AJ:

Sniff Spot. Cute. Yeah.

Shane:

Sniff Spot.

AJ:

This was an article about a startup, but it felt like it was an article about Jimmy's Home Goods store that opened. It felt like it was small stakes. I had an idea. I made an app and it's working in my city. A good old fashioned, I don't know, business story. It was so wholesome. Right? It's like it's Airbnb for puppy play. That's the app idea. You're in a metropolitan city. Maybe you have a little dog and you don't want to go to the big dog park with all the big scary dogs. You can actually rent space and have a meetup with some other dogs who your dog who might get along with it a little bit better than the big scary dogs at the dog park.

Shane:

Well, no, I think it's-

AJ:

Thoughts?

Shane:

No. It's like you get private space for your dog, like a private backyard. So just you. Yeah. So I mean, my thoughts are cool. Sure. Another app. But I also, I don't think this could exist in New York city by the way, because there's like no yards at all. No private yards. Makes sense for Seattle, but it makes me wonder about-

AJ:

Yeah my sister-

Shane:

The nature of

AJ:

Sorry, go.

Shane:

Go. No, why don't you get sister's idea out? Cause I'm going to ramble for a little bit.

AJ:

All right. No, she was just saying she used it because she got a specific kind of dog and wanted to meet up with other dogs of that same breed. So they could all hang out together and they all met up and they had a great experience with Sniff Spot.

Shane:

Oh. So they got a bunch of [inaudible 00:22:54] together, whatever in some backyard and they rented the backyard.

AJ:

Correct. It's not a [inaudible 00:23:00] but yeah.

Shane:

You know what I mean.

AJ:

Silken Windhound.

Shane:

Nobody cares. Anyway. So nobody cares about your sister's dog breed. Sorry Maddie. Anyway. So it makes me think about now we got to take up all this time. Well that was a good [inaudible 00:23:21] about the nature. It's not a genius. I'm just curious how many little apps can there be? There's obviously tens of thousands of apps for all these little things. It reminds me of the swimming pool app. You can rent the swimming pool of-

AJ:

Oh Swimply? Hell yeah.

Shane:

Swimply yes. Whatever. Do all these apps get to continue to exist in perpetuity or do they have to scale up and go public or do they have to get acquired or can these little businesses just sit and operate and have developers and admin people and sales and marketing people just kind of be cool small businesses where you can rent out space.

AJ:

Yeah, that's what I mean. This article feels like it's like, oh this is a good idea. And he hired someone. Maybe he raised a little bit of money. You don't need $10 million to run this app. You need a few developers, a salary, a little bit of overhead for servers. Maybe some support, but you can probably have someone part-time. Like you could run this app forever.

Shane:

Yeah. Maybe I don't know what the expenses are. It reminds me of Turro too where you can rent out your car. And it makes me think about the sharing economy. Airbnb supposedly had a terrible impact on a lot of cities, but in reality it probably helped people with excess inventory and makes me think about private versus public space. If we're just never going to trust the government to run shared spaces in America, do we have to rely on these little sharing apps so that people can actually-

AJ:

Yeah. I mean parking every little parking in New York City or it's not just New York. Have you seen those apps where it'll like tell you which parking spaces are open?

Shane:

I have not. No.

AJ:

It's crazy. Yeah. It'll like say, oh, by the way, like five blocks away. There's an open spot and it's a city. It has all the data on the parking meters or it's like, oh you can go to that garage, which has 10 spots available. You should probably know this as a car owner.

Shane:

Nah. I'll take my tickets on the chin, like a real man. Speaking of real men.

AJ:

Speaking of real men, Mississippi confirms.

Shane:

Whoa. Whoa. I was going to make a yogurt reference. It was a real-

AJ:

Don't shit on my Chobani IPO. If you're about to shit on this.

Shane:

I was going to say real men eat Chobani. Okay.

AJ:

Oh, okay. All right.

Shane:

There we go.

AJ:

I love Chobani.

Shane:

All right. Well shoot your shot then.

AJ:

There's no shot here. The shot was shot and failed. They're withdrawing their IPO. So we talked about this in an early episode, we were very excited about the Chobani IPO. I think it was filed last November, but they have now withdrawn the IPO citing market conditions in a statement of the reason why they have withdrawn. So that's sad. Yeah. It was going to be a big windfall for employees. The equity was pretty, was nicely distributed, but that's on pause right now because no one's going public except those real estate bros and their parents.

Shane:

All right. And their parents. Yeah. I wonder if this was a smart move for the employees. 'Cause as you and I know like double trigger RSUs means that all the RSUs will not be taxable income to the employees until they go public. If they go public at a low valuation, the taxable income will be lower. But also the value of the stock, the vest will be lower. If they wait until later, then they don't have the liquidity event until later, the value of the stock will potentially be higher. But the taxable income will also be higher. So I don't know. I guess they're trying to avoid low valuations, but also a lower tax bill right now. I don't know if it's probably driven, not by employee considerations.

AJ:

They're going to get acquired and employees are going to get nothing is probably what's going to happen. [inaudible 00:26:57].

Shane:

You have vested stock, you have vested stock.

AJ:

No, but this was a specific plan for in the event that they do go public. It was stock grants at once they were public. It wasn't existing employee grants.

Shane:

So they're going to... They have what, phantom equity that only happens in the case of an IPO and not have an acquisition?

AJ:

No, it was a plan for an equity plan once they were public. They don't have a current RSU plan.

Shane:

Oh. So they were going to start an ESBP, employee stock budget plan, once they got public. Oh yeah. Well that sucks. Sorry guys. Sorry yogurt heads.

AJ:

Speaking of that sucks. Sorry guys. This is to be confirms. It will tax forgiven student loan debt.

Shane:

First of all, this article is not supposed to be about Mississippi. I was just highlighting I'm from Mississippi. So AJ's really leading into the Mississippi part of this article.

AJ:

No one cares.

Shane:

If you can't dish it... If you can't take it, don't dish it. Anyway. So this article is about the $10,000.

AJ:

I'm so glad we discovered the mute button by the way, this episode. 58 episodes in, we both discovered the mute button for when we cough.

Shane:

And the chat function. Yes. All right. We got two minutes left. Let's stick the landing here. Let's land the plane. So Mississippi confirmed-

AJ:

Just don't land there in the swamp.

Shane:

Well, oh my God. Can I get one sentence out?

AJ:

No.

Shane:

Jesus. It will tax forgiven student loan debt. Okay. So we all know about Biden. Leave me alone. Let me finish the commentary. So Mississippi-

AJ:

I blame this on you mostly.

Shane:

Oh my god. No editing.

AJ:

18 years.

Shane:

Stick the landing. Mississippi is... Biden is forgiving $10,000 of student loans for people that are lower income, 20,000, for those with Pell grants.

AJ:

Which are very low income.

Shane:

Super low income to even qualify for. So if you owe $20,000, now you only owe 10,000 or maybe even $0. Now in the tax world, if you owe somebody money and then that person says you no longer owe me money, that is taxable typically because what's preventing me from giving you $20,000 and then saying you don't owe that to me anymore and that not being taxable income. That's how everyone would pay each other to avoid taxation. Anyway. So at the federal level, they said that they're not going to tax it on your 1040, but states have a decision to make of whether or not they're going to tax that forgiveness. And I bet you all the red states as in we pay our debts back when we take out loans down here are going to tax everyone's student loan forgiveness, and the blue states will probably not tax it.

AJ:

Yeah. There was an article from mississippitoday.org, which is-

Shane:

Oh, happy reader.

AJ:

Interesting. But they were saying that... Completely lost my train of thought anyways.

Shane:

Right. You've got six seconds to stick it.

AJ:

Train of thought has left to station. You've been a great audience. Thanks for listening to The Liquidity Event. You can find us online at www.brooklynfi.com/episode58.

Shane:

Y'all come back now, you hear?

AJ:

Losers.

Shane:

Losers.

Intro:

Thanks for listening to The Liquidity Event, hosted by AJ and Shane of Brooklyn FI. Head on over to brooklynfi.com where you can subscribe to the podcast or YouTube channel, or if you want to learn about their full service, financial planning, tax, and investment firm, specializing in tech professionals and creatives on the path to financial independence. We'll see you next time on The Liquidity Event.