H3: The Contrarians catchup

• Adam and Adir are back in person for the first time in five weeks. Joel got a dramatic haircut. The pod broke the news.

• Ed Husic went rogue at the Labour Party conference, targeting Albanese and Richard Miles. Adir: “He is prepared to spend his political career in purgatory for as long as Albanese is the Prime Minister. And his views are abhorrent. Like, anyone that says to me there’s genocide in Gaza, I just say what do you mean by genocide? No one can ever answer that question.”

• Victoria’s unemployment rate rose to 5.1% while the national rate held steady at 4.4% with participation surging by 76,000. Adam: “This is clearly the Dan Andrews and Jacinta Allan governments. This is what happens when you run worker-friendly policy. I’m not hiring in Victoria, I’m gonna hire in New South Wales if this WFH policy comes in because it’s just a better place to employ people.”

• The AFR ran a headline on Jacinta Allan’s government: “Allan’s latest policy alienates despairing business community.” The subheading: “A senior government source said Premier Jacinta Allan and her advisors have concluded that conflict with business wins them electoral support.” Adir: “Can you imagine something more cynical than a politician seeking to win votes by destroying the economy of her own state?”

• The richest entertainers of 1998 quiz: Jerry Seinfeld was number one ($267M), Larry David number two ($242M), Spielberg three, Oprah four, James Cameron five. Mike nailed Jerry Seinfeld and Michael Crichton (number eight). Harrison Ford was number nine. The Spice Girls were number 49 at $49M. Tiger Woods came in at 44.

H3: Jacinta Allan: the end is near

Jacinta Allan’s leadership is collapsing, with polling suggesting Labor could lose up to 35 seats at the Victorian election. Victoria is the crime capital of Australia. The paper’s Monday edition reported her downfall was expected within 24 hours of recording. Ben Carroll is the likely successor.

Adir: “My advice to Ben Carroll, who there’s some chance he’s listening to the podcast, is don’t go down with this ship. Like this was not really your mess that was created. It’s hard to see how the Labor Party ends up in power after the Victorian election, hopefully.”

Adam: “Dan Andrews is able to sell the longest lockdowns in Australia. He was able to sell locking up people in their housing commission like a jail for a week. And he got re-elected on a landslide in 2022. That was extraordinary. And Jacinta Allan’s just an average politician. She couldn’t do what he did.”

Adam: “Someone as smart as Thodey who’s been around the traps, who’s worked at Telstra, who should know better, has just fallen for it now. It’s just actually incredible that we haven’t learned our lesson.”

Adir: “The only reason Victoria is not insolvent is because lenders are still prepared to give Victoria money. Victoria has no ability to raise enough tax to repay it. Victoria is very close to insolvent. We exist at the grace of our bankers. Absolutely. That’s Victoria right now, without a doubt.”

H3: The chip that could detonate NVIDIA’s moat

A company called Etched, founded by a team of Thiel fellows, Harvard and MIT maths olympians, ex-Nvidia architects, and the original iPhone supply chain leads, raised $300M last week at a rumoured $3B valuation coming out of stealth. Their product: a chip where transformer architecture is physically encoded into the silicon, making it potentially 200 times faster than an NVIDIA GPU for text-based AI inference, but capable of doing nothing else.

Adir: “What they are building is pretty crazy. They’ve basically said it’s possible to encode the transformer logic onto the chip itself. What it means is all this chip can do is transformer-based calculations, which is mostly text-based stuff. This thing can maybe be 200 times faster than an NVIDIA chip.”

Adir: “Five years time is so unknowable. There’s so many, like the problem, two years time is unknowable. It’s very hard to pick what’s gonna happen. And I think this little glimpse into Etched, whether they’re the winners or not, it just shows how the assumptions that people are making about this industry are changing every week.”

On the broader AI bubble and hidden earnings inflation:

Adam: “In the first quarter just three companies, Google, NVIDIA and Amazon, saw massive gains in their other income category from their private investments in companies like SpaceX and Anthropic. The total of $69B in other income was ten percent of the S&P’s overall net income for the quarter. So we’ve got double the reason why these earnings are just a fraud.”

Adir: “The capital stack in this boom is much more concentrated than it was in the dot-com boom. It’s basically three or four hyperscalers and then some Saudis and a few others, and a few American banks lending debt. And every time someone comes to the market and says we need to raise $100B from AI, there are not many places that you can get there from.”

Adir: “You can’t short AI because you’re gonna go broke waiting. It’s unknowable when this thing is gonna crash, and there are so many vested interests determined to keep this up. And they’re rich and a whole lot of them are the most valuable companies in the world.”

H3: Waymo dumps Uber

The Financial Times reported Waymo is looking to exit its deal with Uber, having already split from the network in Phoenix. Waymo has told Uber it will stop using its app in January 2028. Waymo is now valued at $126B, having 4X’d from its 2020 first raise of around $30B. Uber, meanwhile, is down 34% since September and is only double its 2017 valuation of $68B under Dara Khosrowshahi.

Adir: “I think Uber can still succeed as a ride hailing app for autonomous vehicles, even if they don’t have Waymo. And my guess is if they succeed excluding Waymo, Waymo will actually give them the ability to hail Waymos as well.”

Adam: “I suspect in five years’ time we’re all taking these self-driving cars everywhere. Or certainly in ten years time. The market becomes just so much nicer. The same thing happened with Uber in San Francisco, where people who weren’t taking rideshare something who didn’t take taxis preferred an Uber. I think we get the same situation with self-driving.”

Adir: “It’s very hard to know what this market looks like in five years’ time. Not just because we’re dumb, because there’s too many nodes that you have to multiply at the moment to work out what the likely outcome is going to be.”

H3: Revolut gets an Australian banking licence

APRA granted Revolut, Europe’s most valuable startup, an authorised deposit-taking institution licence in Australia. Revolut is valued at US$115B and has 75 million global customers. Its CEO Nikolay Storonsky holds a 29% stake worth US$33B, making him Britain’s fifth richest person. Revenue was up 46% and profit up 57% to $1.7B. The key surprise: most of its profitability comes not from lending but from subscriptions, ranging from $6 to $100 a month.

Adir: “People used to cry about $2 a month bank fees, and Revolut has said I can get $100 a month and people are going to be happy to pay it. It’s unbelievable.”

Adir: “So we’re entering an era where bank fees are coming back because Revolut’s called them subscriptions, and every other bank has been forced now to charge bank fees by these unnecessary RBA changes. It’s the return of the bank fee era.”

Adam: “The RBA change has given us these three benefits: fewer points, high interest rates, and bank fees.”

Adir: “It doesn’t matter what exists in the world. Ultimately there are just some ways to make money and one of them is retail banking. They’ve just figured out it’s good to charge bank fees and I don’t know why all these idiot other banks didn’t charge bank fees and just call them subscription fees.”

H3: It just keeps getting worse at KPMG

KPMG sacked recently demoted COO Eileen Hoggart from the firm’s partnership after finding she had stored printed copies of confidential Lendlease board documents in her locker, shared them with colleagues bidding on the audit contract, and then repeatedly lied about it. The board had overruled its own legal and HR executives to allow Hoggart to remain as a senior audit partner for two months after being named in parliament. The scandal has now claimed the scalps of the CEO, chairman, and multiple senior audit partners.

Adir: “Most people that do terrible things to other people get away with it. I’ve had personal experience on the receiving end of this. Mostly you can get away with doing terrible stuff. And I just think their view of this was no one is ever going to catch us stealing this stuff. That is pervasive in the corporate world.”

Adam: “I think you can tar every auditor with this brush. This seems to be even within the same firm, these people at the top who you’d expect to be whiter than white were the worst actors of them all.”

Adir: “Every now and again you hook one of these big fish and it looks terrible. But what you don’t realise is there’s tons of this stuff going on below the surface that you’d never even know about. That’s the truth of it.”

H3: The 5% deposit scheme is a timebomb for young buyers

With auction clearance rates cratering and one agent reporting six auctions with not a single registered bidder over the weekend, Adam and Adir spent time dissecting the mechanics of the government’s 5% deposit scheme and what happens to young buyers if property prices fall.

Adam: “The worst area in terms of the people who are most exposed, the most amount of debt, is these first home buyers. These idiots who believed the government, come with us, come roll up to the first 5% empire. They’ve written their own death road.”

Adir: “This country has just massively increased its risk exposure to rising unemployment. The biggest point is that fifteen percent of the country’s economy is linked to property transactions and it’s throttled property transactions. But if unemployment rises and people can’t service their loans and banks say we need to get our money back, we’re gonna flog your property, there’s no buyers.”

Adir: “Can you imagine a better way to get someone to vote against the government than we’ve sold your home out from under you and by the way you still owe $50K to the bank. That is instantly voting against you.”

Adam: “Jim has basically cost them half their revenue. All they’ve got is a bit of gambling and payroll taxes. Imagine how bad Victoria’s going to be in three years’ time with no properties transacting.”

Adir: “Jim Chalmers said his PhD on Paul Keating and he’s managed to create a housing system where every part of the market’s fallen except the one that he was trying to get to move down.”

H3: Five other stories worth following:

1. More than 50 technology companies, including NVIDIA, Microsoft, Hugging Face and OpenAI, are urging Washington to avoid early restrictions on open-weight AI models, arguing they lower costs, expand access and strengthen American innovation globally.

2. A CBS News/YouGov poll found four in 10 Americans are eating less produce amid a Cyclospora outbreak linked to iceberg lettuce, while confidence in the FDA response varies by political affiliation and staffing cuts.

3. OpenAI has launched ChatGPT Health for US users, allowing medical records and health apps to be connected for guidance. OpenAI says its models can outperform clinicians in reasoning, while stressing they should support professionals.

4. Colorado startup Lunar Outpost plans to send NVIDIA AI chips on future Moon missions, enabling rovers to navigate autonomously, communicate faster, create real-time maps, stream high-resolution video and potentially support NASA’s permanent lunar base.

5. Oxford spinout Moa Technology is developing herbicides that target weeds through biological mechanisms, responding to widespread resistance. After identifying more than 80 targets, it raised $30M to advance compounds and enhance existing herbicides.

H3: The Contrarians catchup

• Adam is recording from a private game reserve in South Africa. He witnessed a rare lion attack on a water buffalo, followed by a thundering herd of 30 buffaloes arriving to rescue their mate. The guide said lions succeed only 20% of the time on buffalo.

• England vs Argentina at the World Cup was a case study in not holding a lead. Thomas Tuchel switched to a defensive game at 1-0 up and paid the price. Adam: “Instead of trying to continue to play and potentially getting 2-0 up, they pulled all their attacking players off. And basically from that point, Argentina were always going to get back into it.”

• Adam tested his LuxPlus+ subscription churn data against benchmarks from the streaming industry. Netflix real churn is around 25-30%, Peacock at the other extreme is around 70%. LuxPlus+ churn has dropped to the “high 30s,” which Adam called “surprisingly low given we’re not a high frequency purchase like Amazon or Uber.”

• The pod debated the difference between a social democrat and a democratic socialist, in the context of Jim Chalmers’ budget and New York mayoral candidate Mamdani. Adir: “A social democrat, they are a Democrat, but their flavor of Democrat is socialist. What that means is that they fundamentally believe that society should be capitalist. They just want to apply a whole lot of socialist elements to it. A democratic socialist is a socialist, and their version of socialism is democratic. They want to get to socialism.” His verdict on Chalmers: “He’s not trying to dismantle capitalism. What he’s trying to do is stop wealth compounding for people, which is very bad for capitalism and I think might break the system.”

• Adam’s quiz segment featured his kids testing the pod on collective animal nouns from the safari. Key results: a group of giraffes is a journey, crows are a murder (Mike got it), warthogs are a sounder, and zebras are a dazzle or a harem.

H3: Xero CEO sells every share she has

Xero CEO Sukhinder Singh Cassidy sold her entire holding of 30,000 shares, citing tax obligations, one month after selling more than $4M worth of stock for the same reason. In five weeks she sold $6.2M of shares. Chairman David Thodey is simultaneously trying to rebase her pay package to bring it closer to Silicon Valley benchmarks. Xero shares are down 61% in the past year, back to 2019 levels.

Adam: “What’s most sickening about all this is they’ve called Singh Cassidy some sort of incredible Silicon Valley CEO. This was a really well-run business. They had some incredible Australian leaders. They put this blow-in from Silicon Valley and said, oh we’ve got to pay her Silicon Valley amounts because she’s this incredible leader. There’s no real evidence that she ever has been an incredible leader. They’ve brought in this North American so-called superstar who’s proven to be the exact opposite.”

Adir: “I cannot think of one positive thing to say about this situation. The time to make a call on the strategy is now. We think it sucks, it was a mistake. If that’s your view, make the call and then decide whether to keep or fire the CEO based on that outcome. If the answer is we think the strategy is still good, then keep swimming. Don’t sell your shares. Don’t ask for more. Like, do that.”

Adir: “It feels like the board is asking the market to untether CEO compensation from a strategy they believe in. Those two things cannot be untethered.”

Adir: “One way or the other she’s not going to be in this seat in two years.” Adam: “I’d be shocked.”

Adam: “This business actually makes money. They just didn’t need to be stuffed around with. Just keep making more money and grow incrementally is what they should have done.”

Adir: “The best thing that can happen to them, probably not for shareholders today, is the Atlassian slide, let’s call it. Enough value is lost that the most intelligent thing to do with the business becomes run it as a really great profit machine with some growth. And I think Xero needs to go on the same journey so that they can actually do what’s best for the long term of this business, and that is throwing off big amounts of cash.”

H3: ARN vs SEG: the mouse eyes the elephant

Sports Entertainment Group (SEG), owner of radio station SEN, has reportedly bought 2% of ARN Media and is running the rule over the company. ARN owns 58 radio stations and the iHeart digital platform and was valued at $1.5B a decade ago. Its share price has collapsed to 25 cents, valuing it at just $76M. ARN is still fighting an $82M lawsuit from Jackie O. SEG, meanwhile, has rebounded from 18c in 2023 to 36c, is guiding EBITDA of $16-18M, and on a net profit basis is actually more profitable than ARN.

Adir: “I always wondered whether the attacks on Hutchy a few years ago were based on reality or wishful thinking by media rivals. I think what Hutchy has managed to do is figure out a way to run a very profitable small niche media business. And it’s another example of a founder outperforming hired executives.”

Adam: “Radio is never going to get valuations of mainstream media again. Everything is niche media. There’s kind of no mainstream media business except the main social media players now.”

Adam: “Hutchy is an old school media proprietor who understands his clients and wants his clients to succeed. I find that other radio stations just care about how do we maximise, how do we get the most out of our clients, rather than how do we get our clients a great result.”

On Jackie O’s lawsuit:

Adir: “I would rather be ARN than Jackie O today. I think there’s a lot of question marks over what that contract is. Kyle did not make her life easier, both on air, obviously, but also by settling in the way that he did. A judge is probably gonna be reluctant to bankrupt a company full of employees to enforce her contract.”

Adir: “She thought that she had $100M coming down the pipe over the next 10 years, and she has to emotionally let go of that before she can settle. Sometimes people do things to you that you can’t do anything about. You just have to survive it and go on.”

H3: A $2B medical company doing $6M in revenue

4DMedical, a lung imaging software company that came out of university research dating back to 2005, is currently valued at $2B on the ASX, down from $3B, and is trading at 250-400 times its $6M annual revenue. Adir applied his medical background to do a deep technical critique of its core product, CTVQ, which claims to replace traditional nuclear VQ scans using standard CT imaging.

Adir: “No one’s ever heard of this company that I spoke to in the emergency or respiratory field. And the VQ scanning that’s non-urgent, from what I’ve heard, it’s actually on the decline, not the increase. In a real emergency situation when this is real life and death, sudden death pulmonary embolus, I’m going to take whatever the gold standard is that lets me visualise if there’s a pulmonary embolus, not tells me that there’s a very high probability that there’s a pulmonary embolus, which I think is what this is going to come out as.”

Adir: “This is trading on, depending on what you use, 250 to 400 times revenue on $6M revenue, not the $250M revenue that Pro Medicus is on. And Pro Medicus is like a 20-year-old proven business. I’m very skeptical that in the next five years this business is going to be able to generate the kind of revenue and growth that’s going to justify this kind of valuation.”

Adir: “If part of your portfolio is binary investments that are VC, venture capital-like in character, then sure, you can invest in this. But you should be aware that you’re going to have the hell taxed out of you under the new tax system for any company that generates this kind of return, because the higher the return, the higher the tax rate.”

Adam: “This is a casino, this is a full casino now. It’s not a joke. And it makes a mockery of the entire market when stuff like this gets valued ridiculous amounts like $2B. I think best case this 4D business drops 90%. That’s probably my best case. More likely drops like 99%.”

Adir: “This is like betting on a roulette wheel, picking one number. And if it lands on that number, instead of getting 35 times your money, you get two to one. That’s what this bet is like to me.”

H3: Five other stories worth following:

1. FIFA is set to announce record $15B World Cup revenue, far above its $11B forecast, boosted by dynamic ticket pricing and secondary-market fees, as final tickets reached a median price of $10,835.

2. Christopher Nolan’s The Odyssey grossed $264.1M worldwide in its opening weekend, including $124.5M in the US alone, recouping its $250M budget and strongly validating Universal’s decision to grant the acclaimed director near-total creative autonomy.

3. Beijing startup Moonshot AI unveiled Kimi K3, which reportedly beat leading Anthropic and OpenAI models in independent tests while costing 40% less, sharply intensifying questions about US valuations, infrastructure spending, and global technological leadership.

4. London startup Popsa uses hundreds of AI models to organise existing photo libraries, remove duplicates, write captions, and surface forgotten memories, targeting the estimated 70% of thousands of annual photos that people never revisit.

5. Protein demand is driving startups to create powders from microbes, air, water, and renewable energy. Companies including Air Protein and Solar Foods promise amino acids using less land and water, though scalability remains uncertain.

H3: The Contrarians catchup

• Adam is still in rural UK, recording from a farm with alpacas wandering in the background. London restaurants are packed, but everything is expensive. “A hundred bucks a head before drinks, and this is not fine dining by any stretch.”

• Adam took an EasyJet flight from Luton and, against all expectations, had a good experience. His hack: book row one. “If you’re in row one, there’s two baggage containers just for row one. You have no stress.” Adir’s response: “When you pay more money, they give you better stuff. I can give you a little recap on how capitalism works.”

• Adam booked a pre-reserved Uber at 4:30am in rural UK for a 50% premium, specifically for the guaranteed pickup guarantee. The driver hid his car, waited for the cancellation window to expire, collected the full premium fare, and drove past Adam waving him down. Adam then had to book another Uber at double the original price. “This guy purposely hid the car, waited for the time to expire, got paid the full fare, which is this massive premium fare, and just went off and did another job.”

• Twinkies are having a terrible time. Since 2022, desserts are down almost 25%. Adir: “Nobody wants to eat these snacks anymore because they’re all taking these injections for GLP. And then there’s a second thing going on, which you might call MAHA. Make America Healthy Again.” Meanwhile, the one food category that has surged 104% in a year: products with protein added. “No one’s even gonna know what protein you put in it. And then on the front, just write 15g of protein.”

• Adir’s verdict on corporate speak after reading the Smucker CFO’s response to the Twinkies writedown: “We did have some internal execution issues that we’ve really right-sized and worked through over the last fiscal year. That is a sentence that is devoid of any content.” On the CFO’s follow-up that “snacking is still important”: “Well it’s certainly important to you because if it stops, you’re gonna go broke. But I’m not sure what it means.”

H3: Telstra outage; due process is dead

Telstra suffered a major national outage that knocked out data, calls, and Melbourne train services for two days. Communications Minister Anika Wells publicly “held their feet to the fire” before any investigation had concluded. Telstra CEO Vicki Brady, on holiday overseas, flew home within 12 hours and managed the crisis. The Telstra share price didn’t fall until Wells spoke.

Adam: “Vicki Brady has been outstanding here. She found out at 4:30am. She jumped on the next plane, within 12 hours was back in Australia. If you look at Scott Galloway’s rules for crisis management, it’s get the top person involved, apologise profusely and overcorrect. I think Telstra did literally everything they could.”

Adir: “The Telstra share price hadn’t fallen at all until Annika Wells came out and said we’re gonna hold your feet to the fire. The idea of governments trying to inflict pain unfairly or prematurely on private enterprise in order to jack up their own ratings, it’s terrible.”

Adir: “Due process, which seems to have been swept aside in the last five to ten years. There is no indication so far that Telstra did anything terrible or Vicky Brady did anything terrible to cause this. And I think the idea of having due process and investigating it properly and giving people the benefit of the doubt before executing them, it would be nice if we went back to these liberal democratic values.”

Adam: “Some random router in Vicky Brady’s job isn’t checked ten million routers in data centers around the world. That’s absolutely not her role. Why would anybody want to lead these businesses? The rush to pile on every time something bad happens and politicians need to get their name in the headlines, I think was terrible.”

H3: The Greens, the NDIS, and a $95M-a-day gambling number

To secure Green votes for the CGT legislation, the government agreed to delay NDIS reform by two months. Separately, the Australia Institute claimed the lack of anti-gambling legislation is costing Australians $95M a day in losses. Adam and Adir both pushed back, but from different directions.

Adam: “What the Greens demanded was ensuring the NDIS can still remain a cesspool of waste, fraud, and corruption. It just delays it, means the fraud continues, means the fraudsters in Western Sydney can rip off taxpayers and run these criminal enterprises.”

Adir: “I’ve got big issues with gambling companies targeting problem gamblers and sending them broke. But I think to target an entire industry that people are using as entertainment with ‘Australians are having $95M a day in gambling losses stolen off them’, I think it’s an unfair way to characterize the industry. Sometimes the winning or losing money aspect of it is actually secondary to the primary enjoyment that people are getting from actually engaging in the activity.”

Adam: “Pokies by far the worst. That’s the one that kills families. It leads to bankruptcy, it’s so insidious, and they’re programmed to steal money from you. Pokies 100% should be banned. That’s what the Greens really should be focusing on.”

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H3: Firmus and IREN: the AI bubble is reaching its epoch

Firmus quietly launched a non-deal roadshow seeking to raise $500M at a $15.5B valuation ahead of its delayed IPO. UniSuper CIO John Pearce publicly said the roadshow was not well received in Australia. Meanwhile, IREN’s two founders were granted another $1B in restricted stock, on top of their existing $1B stake, just for remaining with the company for six years. Adam and Adir argue both stories are signs of a bubble reaching its peak.

Adir: “When I look at Firmus and I look at the economics, it feels to me like there’s this house of cards being built with a really good core, that’s NVIDIA. And then on top of that house of cards, they start building these other houses of cards all over the world. And Firmus hasn’t got any good core. They’re just a house of cards balanced on the house of cards bit of NVIDIA. And when the house of cards collapses, they all collapse down.”

Adam: “I reckon the peak AI bubble is what happened last week. The two IREN founders already have a billion dollars worth of IREN stock. They were granted another billion dollars of IREN stock. All you gotta do is hang around for six years. This is pretty outrageous. To give yourself a billion dollars for simply hanging around, when you’ve got a billion dollars, their excuse was we’re designed to attract, retain, and motivate high-calibre leaders. Well, I’m pretty sure you’re going to retain guys who have a billion dollar stake in the business without having another billion dollars.”

Adir: “The IREN Founders should be looking at ways to liquidate their existing stock, not getting more stock, would be my suggestion to them.”

Adam: “The smart money is now starting to get out. Sailors selling Bitcoin. All this bubble is reaching its epoch and it’s a matter of time now. We always get it too early every time, but it’s starting to feel like we’re starting to get pretty close to the end.”

Adir: “There are still plenty of people that today could go and buy something in the AI world and will still have the time to 10x their money before the crash. I’m not sure what it is you should buy. But that window is closing.”

H3: TEG/Ticketek: the disaster unfolds

TEG, the company founded by Kerry Packer in 1979 to sell World Series Cricket tickets, once grown into Australia’s dominant ticketing business under CEO Jeff Jones, is now hemorrhaging money after being run into the ground in just 13 months by former Woolworths CEO Brad Banducci. It lost $160M in 2025, $100M the year before. The company lost the Venues NSW contract and the Rod Laver Arena deal to AEG, and is now in talks with owner Silverlake to raise hundreds of millions in fresh capital.

Adam: “Banducci never spoke to the Stadiums people and ultimately lost the contracts. What Brad did do was hire a bunch of expensive former Woolworths staff. TEG is at its core a sales business and something former CEO Jeff Jones was the master of these relationships. Banducci is just a consultant, had no idea how to do this.”

Adam: “Even worse, TEG’s now in talks with Silverlake to raise hundreds of millions in fresh capital, which basically implies this business is bankrupt or close to being bankrupt. Private equity firms don’t like putting money back in six years after buying a business. That means they’re only doing it because they think the business is dead otherwise.”

Adir: “I’ve always found ticketing to be a bizarre business. This idea that says if you go to a stadium as an entertainment act, you don’t get to choose who sells the ticket to your entertainment because the stadium has made a deal with some other party. You’re not even buying the rights from the entertainer. The entertainer’s going to come into the thing you bought the rights from.”

Adam: “You really gotta be vertical. That’s why Live Nation is vertical. Live Nation basically said Ticketmaster is just this small cog in this big wheel. We’re gonna own the acts, gonna own the stadiums. The reason Ticketmaster and Live Nation have been successful is they can basically rip off the customers. Whereas Ticketek isn’t vertical enough to do that, which is why they’re struggling more.”

H3: Five other stories worth following:

1. Apple sued OpenAI, alleging a coordinated effort to steal trade secrets through former employees, including hardware chief Tang Tan himself. Apple seeks damages and immediate destruction of proprietary material, while OpenAI firmly denies wrongdoing.

2. A Khosla family-led group will buy the Seattle Seahawks for a reported $9.6B, an NFL record. Neeru Khosla is expected to control the franchise after approval, with sale proceeds ultimately destined for charity.

3. The World Cup reaches its semifinals, with France facing Spain and England playing Argentina before Sunday’s final. Meanwhile, baseball fans get the Home Run Derby and All-Star Game, followed by golf’s British Open tournament.

4. Japan is centralising its long-fragmented intelligence system as Prime Minister Sanae Takaichi expands major defence capabilities, reverses arms-export restrictions and responds to mounting espionage and coordinated disinformation threats directly linked to Russia and China.

5. Australia has become the third-largest importer of Chinese batteries as home installations surge alongside renewable energy growth. Falling prices, unreliable coal power and weak interstate connectivity are accelerating adoption and reshaping national electricity markets.

The Federal Government claimed that its controversial recent budget would tackle intergenerational inequity. Few would disagree that wealth inequality is a massive problem. Most people under the age of 35 struggle to purchase a home and if they do, are burdened with a crippling mortgage debt.

While the Government may have been well-intentioned, the budget completely failed in its claimed goals. A survey by millennial podcast, What the Flux, found that only 4% of respondents expect to be personally better off as a result of the budget, while 60% of millennials said older people were the big winners.

Young people aren’t fools. They know when they’re being played. And played they were.

Virtually all the tax benefits older Australians enjoy remain intact. Superannuation, a stealth transfer of $50b from young to old was untouched. The primary residence, regardless of its value, is never taxed. Older people can continue to negatively gear their investment properties. Young Aussie tradies trying their luck on crypto or someone quitting their corporate job to have a crack at a startup? That will be up to 47% tax, thanks.

The kicker? A complete unwillingness to rein in spending (especially on public servants and healthcare) means that the gross debt, according to the IPA, has already hit $1.6 trillion – that is a debt bomb being passed on from wealthy older people to younger people who have to pay the massive interest bill or have their standard of living further eroded by inflation. Even with all these great new taxes, the budget deficit is still forecast to be around $30b this year.

If the Labor Government wanted to bridge the intergenerational gap they’d be running a balanced budget as well as properly fixing the tax system, not fiddling with a few irrelevant cases like CGT which disproportionately impact younger people (due to grandfathering of existing assets).

So what could be done to fix the inequity? There needs to be serious (and some unpopular) changes.

Let’s go.

Income Tax – Australia is one of the highest income taxing countries in the world, our top tax rate of 47% kicks in at $190,000. In 1983, the top tax rate (of 60%) applied at $35,000 – but back then the median house price was $60,000. So the top tax rate was 58% of the median capital city house price.

The current median house price is $1m, if we kept the top tax level consistent in real terms, the top tax rate wouldn’t kick in until $580,000.

But there’s a better way to solve this. This is reducing the top tax bracket for income tax to 30%. Make no mistake, this is a massive policy shift to take the burden away from middle class income earners and it would cost up to $30b annually in forgone tax revenue. However, the real number would almost certainly be less because companies and individuals would now be aligned and there would be no need to use tax structures and trusts to split and divert income.

CGT - Reducing capital gains tax to 20% on business sales (which is roughly average by international standards) would notionally cost around $2b (this is compared to the 30-47% rate being applied from next year). However, the lower rate would also increase the willingness of investors to sell business assets rather than hoard them, so the actual net budget cost is likely far less. The higher, indexed CGT rate on properties would remain.

Reducing CGT on businesses would increase investment and employment, likely leading to higher income tax receipts. There’s a reason why almost every country in the world taxes capital at a far lower rate than income – it encourages investment in productive assets that grow the economy and employment. Otherwise, that capital will simply create jobs in other countries that don’t punitively punish investment.

These two major structural tax changes will cost up to $32b annually (albeit less in reality). But we also want to start repaying our massive debts, so we really need to find $70b in savings. Sounds like a lot.

How can we do it?

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Superannuation – The greatest rort of them all. Paul Keating introduced superannuation to purportedly ease the burden of the aged pension. It has been a total failure.

Back in 1992, around 77% of retired people drew a pension, now 67% of older Australians receive the pension. This is not a big change. As a result the pension savings are only around $10b annually.

(The Labor Party however benefits from the side effect of booming industry super funds pumping money back into its coffers, but I digress.)

While superannuation saves $10b annually, the cost of forgone tax revenue from superannuation is more than $50b. Economically speaking, superannuation has been a massive disaster, saving rich people money while diverting billions of dollars into index hugging fund managers and super funds.

Super contributions are currently taxed at only 15% when paid by employers or individuals. If we increased that rate to 25% (still below the new 30% income tax level) this would lead to around $15b in savings, less higher amounts needed for the Low Income Super Tax Offset, so let’s say $12b.

If we then increased the tax rate for earnings within super from 15% to 25% (still below income tax level) this would save another $7b. It makes absolutely no sense that wealthier retirees pay a far lower tax rate than 30 year olds who can’t afford to buy a house. The notion that older people should pay less tax simply because they are old, even though they’re also rich, is completely baffling.

These equitable changes save $19b annually while still allowing superannuation to remain slightly concessionary to the (highly reduced) income tax rate.

GST – The Howard Government introduced the GST in 2000 at a rate of 10% but excluded fresh food and education. This was a political folly which still inflicts significant economic pain. A small increase to the GST to 12.5% and finally applying 5% GST on fresh food and education would raise around $20b. This change would mostly be funded by wealthier people who spend more, while the lower income tax rates benefit all Australians. This would also bring Australia more into line with most western countries which run higher VATs and lower income tax levels.

SRL – The absurd train line in Victoria that no one wants is being funded to the tune of $3.8b by the Federal Government this year (and this cash furnace will continue to increase). The SRL, like the rest of the disgraced Victorian Government’s Big Build, is a money laundering scheme for the CFMEU. Easiest. Saving. Ever.

Primary Residence – The primary residence is, strangely, never taxed. Even if you paid $10m for a Point Piper mansion and sold it a decade later for $75m you’d pay nothing (and this does actually happen). This is the greatest uber rich tax break ever. If you imposed a tax of say 5% on homes selling for more than $2m and 10% on homes above $5m you’d raise around $12b in revenue annually. Less than 10% of houses would be taxed under this policy.

This relatively low impost would help fund the reduction in CGT (it’s completely nonsensical that productive assets which employ people are taxed at 47% but unproductive mansions are taxed at 0%).

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Public Service – The public service costs Australia $250b a year – a large chunk of this cost is essential workers, but not all of it. There’s also a bunch of less critical workers. There is roughly 7% churn each year across the public service – let’s say we didn’t replace (non essential) any workers for two years that would reduce the public service by around 10% and save around $12.5b annually.

Note, we’re not firing anyone but instead, just not replacing people who choose to retire or move to the private sector.

NDIS – The $42b NDIS is one of the biggest areas of taxpayer expenditure, ranging from helping genuinely disabled people to being a cesspit of fraud, waste and corruption. It’s basically impossible to fix and needs to be torn down so we can direct funds to those who really need it. Conservatively $10b in savings, but likely far more.

Fixing the Pension Means Test – Another great rort of the tax system is ignoring the value of a home when determining pension eligibility. You can live in a $20m house and qualify for the pension (and cream from hardworking taxpayers $45,000 annually). Around 15% of people receiving the pension fall within the wealthiest 20% of Australians – if we capped the residence exclusion to homes worth less than $750,000, we’d save upwards of $2b.

Offshore Resources – The Federal Government, courtesy of some highly effective lobbying, levies the Petroleum Resource Rent Tax (PRRT) based on profits generated by natural gas producers. The States require mining companies to pay royalties based on revenue (or volume) for their schemes. As a result, the States (mostly WA and Queensland) collect around $20b annually and the Federal Government only $2b from (mostly US owned) offshore gas producers.

If the Federal Government taxed based on revenue it would (very roughly) raise around $5b annually (albeit this amount fluctuates significantly based on gas prices). While PRRT advocates have argued for years that the high upfront capital costs mean that a revenue based tax isn’t workable, that didn’t seem to stop the US from charging a revenue-based tax for offshore gas producers.

First Home Owner Grants – Technically these are paid for by the States, but given the States are mostly funded by the Feds this is fair game. Let’s remove these horrific policies which bid up the cost of housing and act as a payment to home sellers (rather than home buyers) and save another $2b.

AUKUS – A bilateral disgrace, Australia spends upwards of $6b annually (and this massively increases over the next decade) buying nuclear-powered Virginia-class and SSN-AUKUS submarines from the US. We could instead purchase Japanese Taigei-class submarines (equipped with lithium-ion batteries). While not as optimal as nuclear subs (which can stay submerged indefinitely), they are fit for purpose and would be delivered far quicker, saving at least $5b annually.

That’s $72b in savings/higher revenue and $32b in reduced taxes for a net improvement of $40b annually. The current budget deficit is $28.5b based on recent data, so these changes would likely lead to strong surplus of at least $12b.

My numbers are rough but directionally correct with a decent margin of safety. It’s clear that we could massively reduce income tax and capital gains tax on business sales by removing the ingrained rorts and wasteful spending which have become rusted to the core of the Australian economy.

Reducing income and capital gains taxes also abrogates the need to create exotic tax structures, while imposing a small tax on primary residences and slightly increasing the CGT allows for a far broader tax base.

How would this impact house prices? Well the primary residence tax would slightly dampen values, but this would likely be counteracted by the reduction in CGT.

Overnight, the Australian economy, which coincidentally is one of the worst performing globally despite the commodity boom, would be revitalised. We’d go from one of the most unfair tax systems to one which shifts the burden to the richest Australians. Instead of massively taxing regular wages, we’d tax wealth and consumption.

We’d no longer punish young people’s sweat and aspiration, but instead, reduce the tax offsets handed to people who can most afford it.

The Federal Government tried to be Robin Hood but ended up the Sheriff of Nottingham. This is how we can really improve it.

H3: The Contrarians catchup

• Adam is in London visiting Luxury Escapes’ 11-person UK team. His verdict: “London is incredible. The restaurants are full, London’s in its own bubble. The rest of the UK is a bit of a basket case, but London is incredible.” Dinner at Bubala, a favourite Israeli vegetarian restaurant, cost upwards of $100 a head before drinks. Apartment costs, strangely, have barely moved in a decade.

• Victoria’s crime wave has not abated. A friend of the pod relayed a home invasion by three teenagers who found car keys inside the house, used a wheel lock to break in, stole the car, and drove through the fence. The car was found. No one was charged. Adam: “You just got this abomination in Victoria. Crime is still rampant. You’ve got a Labor government that simply doesn’t care about people. It feels like ‘Back to the Future 2’ when Biff was running the place.”

• A What the Flux community survey of over 1,000 respondents found only 4% believe they’ll be better off as a result of the budget. 42% said scrapping the CGT discount was their biggest worry. 57% said the changes will force them to change their investment strategy. Adam: “Young people hate this budget. This is a budget that fraudulently claimed it was for young people. Jim Chalmers went and said, we’re gonna fix this intergenerational inequity. These guys have somehow made it worse.”

• A London School of Economics study of 400M job postings found entry-level hiring has fallen more than 14% since 2019. Adam: “Older people want to work from home. Younger people hate working from home because it just destroys their careers. Less than a quarter of Gen Z want a fully remote workplace.”

• Canva has quietly started preferencing Sydney-based applicants who work from the office, according to Rampart. Adam: “The Atlassian universe. The kings of work from home. Now saying, hold on, this isn’t working for us. Canva’s founders sniff the breeze and they clearly realise that the balance of power has shifted away from employees into businesses.”

H3: Sydney’s housing crisis: battlers banished for billionaires

Two recent Sydney developments illustrate what Adam and Adir argue is the perverse consequence of the budget’s tax settings. In North Bondi, 45 apartments are being demolished to make way for 16 luxury residences. In Bondi, 16 units on Campbell Parade were converted into seven luxury apartments called “The Mayfair,” with the top floor listed at $22-24M. Both qualify for primary residence tax exemptions.

Adir: “If I was writing the headline for The Daily Telegraph, I would say 45 battler tenants evicted to make way for sixteen rich owners who get the best tax treatment in Australia.”

Adam: “My headline would be battlers banished for billionaires.”

Adam: “This feels like the exact opposite of what the government’s been trying to achieve. Primary residence, full zero tax exemption all the time. Whatever these go up to, you’re not paying a cent of tax. This is a massive distortion on the free market. Everything should probably be taxed the same if you want things to be treated as free market.”

Adir: “The overarching issue that headlines everything else in this country is the increasing disparity between wealthy people and other people and the disappearance of the traditional middle class in Western liberal democracies. And I think this is just a piece of that disaster that’s going on.”

H3: CGT debate is about systems, not values

Adir delivered what he called his definitive framing of why the capital gains tax argument has been lost in a fog of class warfare, and why that framing is wrong.

Adir: “The idea of capital gains tax is in no way a value judgment on who should pay less tax. The problem with this capital gains tax argument is it’s been turned into an argument of morals and values when really it’s an argument of systems. If you don’t play by the rules of the system, the system is not going to work. And one rule is if you don’t give people good treatment for profits they make for investing capital, then they take that capital and they invest it elsewhere. And if that happens, capitalism is going to stop working for all of us.”

Adir: “Socialism is a great idea. We all want things to be fairer for people. But every time you try it in a country, it’s the worst possible system you can imagine. And so we want to live in capitalism because it sucks, but it is the best way for the largest number of people to live the best possible life.”

Adam: “I think we generally prefer whoever’s closer to the centre.”

Adir: “That is a perfect summary of how we feel. I kind of hate you a bit for saying that. I wish I would have said that.”

H3: The AI chip depreciation timebomb

Adam and Adir dug into what they see as the most underappreciated risk in the AI investment cycle: hyperscalers are depreciating their AI chips over five years, but the technology is moving so fast that chips become obsolete far sooner. When that mismatch is forced onto income statements, profitable businesses can turn loss-making overnight.

Adir: “I buy $5,000 worth of AI chips. I put them on my balance sheet, not my income statement. I say these chips are going to last for five years, so every year I take $1,000 of that $5,000 as an expense. I make $2,000 in sales. I record $1,000 of expenses. I make $1,000 of profit. But at year two, I realize these chips are only going to last one more year, not four more years. The remaining $4,000 has to become an expense. I’ve gone from $2,000 revenue, $1,000 expense, $1,000 profit, to $2,000 revenue, $4,000 expense, minus $2,000 profit. Suddenly I turn into a loss-making business simply because I miscalculated or deliberately misrepresented the amount of time that these chips were going to be useful for.”

Adam: “Either we have this massive expense coming up, or companies are going to start pulling back on spending. That starts hitting NVIDIA. Either way, this bubble pops one way or the other. There’s probably no great outcome here.”

Adam: “The Shiller CAPE Index has got this almost perfect record of predicting bubbles and crashes. The highest it ever was was 1999. The second highest point is right now. So either AI really is game changing and we’re all wrong, or what’s going to happen is what happened every time: too much debt, it’s pushed up asset prices too much, and there’s a massive overcorrection.”

Adir: “You can make a ton of money at the end of a bubble cycle. This is the ultimate greed versus fear moment for markets. You know that you might get caught any day, or it might be two years out and you’ll miss two years of incredible gains. You’ve got businesses like Sandisk that have gone up seventeen times in the last year. No one wants to miss that.”

H3: What happens when the founder leaves

PEP Private Equity bought Manshake, a protein drink business built by NRL star Adam McDougall and his wife, scaled it up, bought the manufacturing facilities, and then reportedly sold it back to the founder for next to nothing. The business had struggled after McDougall departed.

Adam: “If you’re gonna transition from founder to manager, you need to have competitive advantages in the business. You can’t just have product market fit. A founder can work with product market fit and continue to hustle and eke out profitability. But if you chuck a manager in there, they’ll probably stuff it up. If you’ve got great competitive advantage, if you’ve got great brand, you’ve got scale, and you just need to keep doing what you’re doing and extract more value, then you can chuck a really smart manager in. But if you haven’t got competitive advantage and an outside owner comes in and gets rid of the founder, almost certainly the business dies.”

Adir: “The brand was inextricably linked to the founder. And once that founder goes, the brand goes. You can’t maintain that without him. And so good night, turn off the lights on your way out. There is always a danger in buying a business whose brand is so inextricably connected to the founder, especially when it has no other powers.”

Adir: “PEP actually came out and said, irrespective of that outcome, we’ll still generate PEP-like returns from this fund because of our other wins. Which might be true, but it’s the closest you ever will hear a private equity business saying we messed up.”

H3: It keeps getting worse at CTM

Corporate Travel Management missed yet another deadline to refile its financial statements, now targeting August, more than a year late. The company announced a further $10-15M revenue restatement affecting its ANZ region, after flatly claiming for months the problem was confined to the UK. It also announced $400M in goodwill write-downs across Europe, ANZ and North America. The amount owed to the British government has grown from $80M to potentially $150M, against free cash of around $60M.

Adam: “This is fraud on fraud. I don’t know how ASIC hasn’t charged anyone here. What are they doing? The auditors have actually given them their rule book. What are they waiting for?”

Adam: “CTM claimed point blank it was just the UK. Now Australia, these liars. So $10-15M in ANZ. Remember they said this is just UK. Australia is fine.”

Adir: “The single biggest risk they face is getting the auditors to sign off on this in this environment. What auditor is going to want to take that risk? They would have to feel very, very confident that standing up in front of a parliamentary inquiry and on the front page of the Financial Review, their actions were watertight.”

Adam: “As businesses roll off, Flight Centre and their other competitors are feasting on them. It’s a slow burn, you’re not gonna lose all your revenue straight away. But this was a business that before this wasn’t profitable. After this, it’s gonna be less profitable. To pay the three hundred million dollars now they need banks to give them money and they need to trade out of it. I don’t think they’re gonna be able to trade out of it.”

H3: Five other stories worth following:

1. Andreessen Horowitz-backed Ornn is building a market where companies can trade and hedge GPU access like commodities, aiming to create financial infrastructure for soaring global AI compute and data-centre spending through 2031.

2. AI-driven demand is sending memory-chip profits and prices soaring, with DRAM and NAND benchmarks up roughly 660% over a year, raising device costs and potentially reviving pressure to ease Chinese chip restrictions.

3. Nigel Farage faces intensified scrutiny over political finances after reports a convicted fraudster funded expenses and an investigation into a £5 million crypto-billionaire donation, though Farage and Reform UK deny wrongdoing.

4. SpaceX will join the Nasdaq 100 less than a month after going public, giving passive funds exposure to the company while exposing investors to volatility after Nasdaq changed rules to fast-track inclusion.

5. Australia may force data centres to deliver direct local financial benefits as public concern grows over AI infrastructure, while Labor also backs worker protections against AI being used to intensify or fragment work.

H3: The Contrarians catchup

• Will Hayward gave a one-month business update for The Contrarians. The pod is growing fast, live events are in planning, and advertising revenue has been “surprisingly strong” from the start. His three asks: subscribe on all platforms, follow on YouTube and Instagram, and reach out if you want to advertise. Adam’s pitch to potential partners: “If you want to hit The Contrarians audience, you’re getting the decision makers, the founders, the CEOs, the CMOs, the CFOs. It’s the most premium audience in the country.”

• Adam described Luxury Escapes’ journey from a sprawling multi-brand e-commerce business to a pure-play travel company. At peak complexity they ran Luxury Escapes, Scoopon, Kudo, Deals.com, a fashion business called Brands Exclusive, and a homewares business competing with Temple & Webster. The rule learned the hard way: every time you merge customer bases, “you lose 50% of the audience literally overnight.”

• Adir on what to say to founders being threatened by a competitor: “If you hear someone on the other side of your deal telling you they’re going to crush you if you don’t sell, you should ask for more. That is a good sign for you.” The Luxury Escapes team heard exactly this from a rival five or six years ago. “This business has just continued to sort of fade away.”

• Adir on Socceroos coach Tony Popovic choosing a different lineup in game two of the FIFA World Cup: “He was up against a team where clearly he felt if he played the game that he played in the first match, they would be able to adapt to it. Everybody judged him based on the output metric. Nobody talked about the input metric.”

• Claude Design is, according to Adir, revolutionary. He used it to rebuild the entire front end of his brand equity analytics tool from a single screenshot and five lines of prompts. “It basically crafted 80% of what I thought I wanted without me even realising that’s precisely how I wanted it to look.” Listen for his verdict on Canva versus Claude Design.

Karl Stefanovic: the genius business move hidden inside a scandal

Karl Stefanovic parted ways with Nine Network after publishing and then retracting an interview with UK firebrand Tommy Robinson. The video was immediately uploaded to Pauline Hanson’s YouTube account and received 167,000 views. Stefanovic’s contract was already in its final year. Adam and Adir argued the whole episode was a win for almost everyone involved.

Adam: “He’s got a podcast business probably worth $20-30M today. Could be worth $100M. This is a genius business move by him. Whether it was intended or not, he’s played it brilliantly. I think Nine have probably gotten away with it pretty well as well. This is to me a great win-win.”

Adir: “This is literally $10-20M of free publicity he’s had. You can’t buy this kind of publicity. Money can buy you talking about your own stuff. It can’t buy other people talking about your own stuff because they think it’s good for them to talk about it.”

Adam: “I think Karl is really smartly picked up on that rightward trend. You can see the One Nation support is off the charts now. It’s the number one most popular party in the country. And Karl’s just, I think it’s just a really savvy guy who’s picked this up and he’s created the number one podcast in Australia in the space of four months.”

Labor is in a secret coalition with the Greens

The CGT legislation passed the Senate last week, pushed through by Labor and the Greens. In the same sitting, the government’s industrial relations bill, the one economic policy area where Adam and Adir gave Labor some credit, was pushed back. The broader political landscape has shifted dramatically in Adam’s view.

Adam: “You’ve got effectively the Greens calling the shots, the far-left, the ultra-far-left Greens, the socialists, potentially communist Greens, calling the shots in a coalition government with Labor.”

Adir: “I think if you would have asked me this six months ago I would have said you can’t compare. Like I might disagree with this government, but there’s still a trustworthy government. I think this government is totally untrustworthy today, and you can’t believe a word that they say.”

Adir: “I want to bring Tony Burke onto the podcast just to ask him one question, which is, will you commit on this podcast to not claiming negative gearing on your six investment properties, given you’ve stopped young people with no properties from ever being able to use it? Because if you believe it’s right to wipe out negative gearing, then walk the talk.”

Adam: “The core of the policy was right, but they executed it so badly that you can’t possibly give them a positive mark for it. They should have removed it for everyone, but they should have given people warning and maybe given a phase-in period of three or four years. And it should have been for everybody, not grandfathering older rich people.”

The CGT carve-outs: fake exemptions to a lie of a policy

Adam did a deep technical breakdown of the two “carve-outs” the government announced alongside the CGT changes. The first raises the small business CGT concession threshold from $2M to $10M turnover but applies a 30% minimum tax rate that was never disclosed. The second, the so-called innovative company carve-out, is more complex and, in Adam’s view, almost entirely unusable.

On the small business carve-out:

Adam: “The 30% minimum tax rate still applies for all this now. So previously you used to be able to stack these two discounts. Now you can index it, but you have this minimum 30% tax rate. This so-called $10M thing really isn’t that generous. The 30% minimum is 30% secret, 30% that they neglect to tell people about.”

Adam: “People that start their own businesses, they have sweat equity by virtue of the work they do and no cost base. That’s the group with no cost base. Self-started, motivated job creators, the backbone of Australian society. If you want your hair cut, if you want your toilet fixed, you need someone like this. So that’s who the 30% minimum tax really smashes.”

On the innovative company carve-out, which requires a company to be under $50M turnover, under 10 years old, unlisted, qualify for the ESIC framework, and employees must hold shares for at least five years:

Adam: “We were a $50M revenue business within two years of our business. We were a valueless business then, with virtually no profit and nobody was valuing us much. So we had really risk-taking early stage employees who would absolutely not qualify. And we’re just one out of thousands and thousands of companies.”

Adam: “If you’re an employee and it’s going to be fully acquired, there is no way the acquirer is going to let you as an employee hold those shares for another two years. Your shares are going to be compulsorily acquired as part of a drag provision, which means the buyer can force me to sell and the buyer will be forcing me to relinquish the tax benefit.”

Adam: “The company that fits into the intersection of all these criteria is a company with all this amazing potential up front, but sold in less than 10 years with a revenue of under $50M. We could call that company a failure. That is the company whose founders get the discount.”

Adir: “I believe this is a Labor government, do they realise how much power they’ve just given the company? If I have an employee and they’re at year four of their holding, do you know how much power I’ve got in firing them? They not only lose their job, but they miss out on the tax benefit.”

Adam: “Nobody has done more to increase the benefit of the wealthy versus the not wealthy than this Labor left government and their latest budget. Unintentionally, but that’s what’s happened.”

Does Canva sell now or be killed by a giant?

Adir’s hands-on experience with Claude Design has significantly sharpened his bear case on Canva.

Adir: “My increasing view is that I was right about this and it’s going to be very hard for Canva to compete. They’ve gone from being the giant killer to being at risk of being killed by a giant. I think it’s sell time. Like that’s my honest view. It’s time to go and find someone.”

Adir: “Canva should not IPO. Canva should basically go to their bankers and say, we want to be bought by Anthropic or OpenAI. It can be an all-stock deal, but the stock has to be non-escrowed and we sell it into their IPO as much as we can.”

Adir: “It’s very hard to build a generational company today with this level of tech change. If you want to build a generational company, build leather handbags, maybe you can build a generational company. But it’s very hard in tech.”

H3: Five other stories worth following:

1. Chinese AI models are narrowing the gap with leading US rivals, raising concerns that American restrictions may backfire by pushing businesses toward cheaper Chinese tools while limiting access to domestic models for trusted users.

2. OpenAI and Anthropic are pushing back against government limits after restricted model releases, while Austria is pitching the EU as a safer home for Anthropic, promising legal certainty, market access, capital, and values.

3. Michael overtook Oppenheimer as the highest-grossing biopic ever, Supergirl underwhelmed despite Krypto’s presence, and Toy Story 5 held the top box office spot, suggesting audiences still have appetite for familiar franchises.

4. Former Apple designer Julian Hoenig launched Amble, a minimalist street-legal electric buggy startup focused on short trips, with 2027 delivery slots already reserved by hospitality customers ordering roughly 40 vehicles worth $1m.

5. Former Starlink engineers launched Eclipse Space to help governments and companies build their own satellite constellations, using a fabless model that designs spacecraft while outsourcing manufacturing to make infrastructure cheaper and faster.

According to the Herald Sun, the only thing that anyone is talking about is the news that Karl Stefanovic has been ejected from Nine following his interview with controversial right wing commentator and campaigner Tommy Robinson.

The consensus view appears to be the following.

Stefanovic has been on a slow rightward trajectory. He has increasingly focused on immigration. He has apologised for his role in encouraging people to get vaccinated. And he interviewed Pauline Hanson and Clive Palmer, before he got round to Robinson. The media in general perceives these as, at best, a slide into senility. At worst, genuine conviction from Karl that Pauline/Clive/Tommy might be worth listening to.

There also seems to be some agreement that this is all some misstep from Stefanovic - he got over his skis, has lost his way, and is now out of a job. If he wants to be “Joe Bogan”, as he has joked, he can’t do so if he excludes half the population.

The Rogan comparison is easy, not least because Karl has made it himself. Rogan is considered by many as the American everyman (despite his fortune). He has at points hosted the biggest podcast in the world and his clips generate millions of views. Karl is building his own Rogan style show which seems similar in format.

But even if the pun works, it is the wrong one. A far better comparison is Tucker Carlson.

Carlson was famously fired from Fox News following the Dominion settlement, where Fox was forced to pay US$787.5M to settle the claim that they defamed the company (something I became fairly familiar with). It isn’t totally clear why he was fired. In pre-trial discovery, various internal messages showed disdain for the President, Fox’s audience and perhaps most importantly, Fox’s management.

Things have turned out fairly well for Carlson since then.

At Fox, Carlson was reportedly earning somewhere between US$15M and US$20M a year, and walked away from a contract with around US$25M still owing. Within months he had launched the Tucker Carlson Network, a US$9-a-month subscription service, raising roughly US$15M from investors at the end of 2023. By June 2025, Axios reported that he and his business partner had bought those investors out entirely: the network had turned profitable faster than anyone expected, and the backers got their money back with a return.

The audience appears real too, at least on the metrics available. The Tucker Carlson Show was Apple’s most popular new podcast of 2024, and for a week that July it knocked Joe Rogan off the top of Spotify’s US chart. His YouTube channel runs at around 1.7 million subscribers and some 30 million views a month. None of this is Fox-sized — he was pulling 3.3 million viewers a night on cable, the biggest audience in American news — but he now owns the whole thing rather than renting an audience from Rupert.

Exactly how much he is making is impossible to verify; the “$30M a year” figures floating around are guesses. But it is almost certainly a wildly profitable enterprise. The cost base of an operation like this is tiny — Megyn Kelly, who built a similar empire after being pushed out of NBC, reportedly does it with six staff — so even a modest subscriber base throws off more profit than a fat network salary ever did.

The secret is taking advantage of three trends at once.

The first is that you can now reach a massive audience without any of the infrastructure. No studio, no satellite trucks, no network. Carlson’s operation is reportedly staffed largely by the people who used to work for him at Fox, publishing straight to YouTube, Spotify and X. Megyn Kelly’s six-person team now out-rates the YouTube channels of NBC News, CBS News and the BBC.

The second is that the old mastheads and networks are in structural decline, shedding the audiences — and the trust — that once made them the only game in town. This year’s Digital News Report once again showed how much the general public distrust mainstream media (but increasingly trust personality based media). Few in the big end of town ever seem prepared to confront this, other than somehow blaming Facebook and Google.

The third is that there is an enormous audience of people who don’t share the hyper-progressive social politics of most newsrooms, and who feel that nothing in the mainstream is serving them. That is the audience Carlson, Kelly, and Glenn Beck before them, have monetised. The simple fact is, many watch videos like the Karl/Tommy interview and find themselves nodding along.

Could a similarly large and profitable future await Karl?

There are reasons to think not.

To state the obvious, Australia is a far smaller country. This business model relies in part on scale; with far fewer people, and (probably) little chance to become an international star, Stefanovic might just never reach the scale required to build something worth the effort.

But what about the point on hyper progressivism? Ask most people in the media, and in my experience they tend to argue that our media is too right wing. The same people think One Nation and the Liberals are unimaginably evil parties, and Labour is not much better. If you worry about any number of social issues, immigration, or what happened during COVID, you are definitionally evil.

But the general public? With One Nation now polling at 29 per cent, it is hard not to think we’re seeing a radical recalibration of politics in Australia as well.

Might we see something similar coming in media? And might Karl be the media star to capitalise on all this?

Watch this space.

You can watch the full episode on YouTube below, listen wherever you get your podcasts, or read on for a summary.

The subject this month: ASX-listed shoe empire Accent Group (AX1), and the hostile takeover bid circling it.

• Sell now or wait three years? Scott brought a real founder dilemma to the table — a business owner who could keep growing but is tempted to cash out. Adir’s answer was emphatic: don’t sell the whole thing, do a secondary. “Try and do a secondary sale of a meaningful amount of non-controlling equity… Take that money off the table, put it in your pocket. And then that will dramatically increase your risk appetite to drive the next seventy percent of your equity hard. That’s what I did. I do it with almost every founder I’m involved with… because I always want them to take more risk.”

• Search funds are coming for your dad’s air-con business. The guys nerded out on the US “search fund” model — MBAs raising money to buy an old, boring, profitable business and run it. Adir, channelling the archetype: “I’m a smart person. I’ve done an MBA… I can’t be bothered working my way up in a company and I don’t want to found something new. So just give me cash and bet that I’ll figure out how to run it.” The serious point underneath it: a wall of 70-to-75-year-old founders is about to need an exit, “and the alternative… is shutting it down. That’s plan B. Kill the goodwill.”

• The newspaper game. Adir described an experiment where investors are shown old finance front pages and asked to trade on them — and almost everyone does terribly. The AIs do better, “but it tends to overbet on stuff and then blows itself up. Claude did the best, actually, of all the AIs.”

Accent is a third-party retailer trying very hard to become something better

You may not know Accent Group, but you know its brands: The Athlete’s Foot, Hype DC, Platypus, the soon-to-be-shuttered Glue Store — plus the exclusive Australian distribution of Skechers, Hoka, Vans, Doc Martens and Saucony. Revenue has compounded impressively: $440 million in 2016, $800 million by 2020, $1.46 billion last year. The share price, meanwhile, has been a yo-yo — 65c in 2011, $1.80 in 2016, 68c when COVID hit, a four-bagging peak of $2.94 in 2021 (a $1.5 billion company), and back to 55c last month.

Adir’s framing of that disconnect was the line of the night:

Adir: “If all you got to see in this business over the last fifteen years is their revenue and earnings numbers, I think you would never guess that the share price had been this volatile.”

The strategic story is a slow march away from plain wholesale-and-retail toward owning more of the margin — buying Stylerunner out of trouble and growing it, locking up exclusive brand licences. But Adir was clear-eyed about what it still is today:

Adir: “Predominantly they’re still a third-party retailer selling some of their exclusive brands in Australia. They’ve got a little wholesale business and a little vertically integrated business… it’s not Mecca, but of all the third-party retail businesses, this is definitely one of the better ones.”

Functional beats fashion — and that’s the whole thesis

The most useful idea in the episode came out of Scott’s weekend. Sent to a mall on a shoelace mission, he wandered into The Athlete’s Foot and found it heaving while the fashion stores around it sat empty.

Scott: “Everyone’s in there getting their feet measured, trying to get the right boots… there’s a functional technology here for measuring your foot and getting the best possible shoe. That kind of foot traffic thing matters a lot in this retail world.”

Adir had the data point to back it: roughly 83% of Athlete’s Foot shoppers use the in-store measurement tech. That’s the distinction the whole business turns on — functional versus fashion. The functional end (running, fitting, performance) is sticky and repeatable. The fashion end is a knife-edge:

Scott: “The fashion ones are hard to ride, because you’re either riding a trend and doing really well, or you’re on the other side of it and you’re having to write off your stores and shut them down.”

Where it gets genuinely interesting is the cornered resource — Accent’s exclusive Australian rights to the brand of the moment, Hoka. Adam laid out the flywheel: scale and store count earn you the exclusive licence, and the licence is a toll booth.

Adir: “They’ve got a cornered resource for Hoka in Australia. If you want to stock Hoka, one way or another you’re going to be paying them — you’re going to wholesale buy off them, or you’re a customer that retail buys off them.”

The margin collapse nobody can quite explain

Now the bad news, and the reason the stock got smashed. First-half profit fell from $47 million to $28 million, and gross margin collapsed from roughly 57% to 47%. Management offered three reasons — a high-discount environment, forced inventory clearances, and the AUD/USD. None of them landed.

Adam: “High discount environment means your brand’s weak or you haven’t got any pricing… the US dollar wasn’t even super strong last half, so I’m not sure how that’s an excuse. I feel like they’re just chucking darts at the dartboard.”

Adir translated the “discounting” excuse into what it actually means about the economy:

Adir: “You saw the store was full but all these other stores were not very full — that’s called consumer confidence. That’s: we have to run discounts to get people to buy. That is what’s going on in Australia right now.”

On the “we bought the wrong stock” defence, both were unwilling to crucify a CEO with this track record over one bad buying cycle:

Adir: “Every business that has inventory goes through a period of having to clear out the wrong stuff. If I kept seeing it, I’d say maybe this guy’s lost it” — but not on one half.

The honest conclusion: “There’s been a dramatic drop in gross margin and it’s not well explained in the documentation.” That’s the share price.

A cheap stock — if you trust the numbers

So is it a bargain? The market cap fell about $400 million on the downgrade, putting it on roughly six to seven times earnings. Adam’s read: “A business that’s shown over ten years it can deliver growth — that’s a crazy low multiple.” Scott’s defence of the sector was a neat one for 2026:

Scott: “Unlike some of the other things, it doesn’t have that AI risk attached to it. That’s why I love retail. And that’s why I love GLP” — the weight-loss drugs that should, in theory, put more people in running shoes.

Adir rebuilt the maths from the ground up and landed somewhere more sober. Accent guided to $79–84 million of EBIT for FY26, but the EBIT is eaten by interest and then tax:

Adir: “After interest, that eighty could be fifty-five. Then they pay some tax, maybe they get to thirty-five. And they’re valued at four hundred mil. I think this is more like eleven times net profit” — cheap on EBIT, less heroic on the bottom line.

Daniel Agostinelli and the cloud he didn’t make

A word on the CEO. Daniel Agostinelli is a Brett Blundy protégé and Sanity co-founder, the kind of high-quality operator Adir says he looks for — “this is a special guy.” He’s also under an ASIC insider-trading cloud over a share sale made shortly before an announcement. His defence: the chairman signed off on it. The chairman then left three days later. Adam thought the blame was misallocated:

Adam: “The chairman should have said, no, you can’t sell, Daniel. He stupidly goes, of course, do what you want. And now Daniel’s being blamed for it… the fault really should lie on the chairman here.”

Adir was more cautious — and turned it into a governance lesson:

Adir: “There’s a moment in life where something looks less likely and then it looks more likely… that’s why board minutes are so important. And people neglect board minutes so badly.”

Mike Ashley’s takeover chess

Frasers Group — the UK retail giant run by billionaire Mike Ashley, owner of Sports Direct — has lobbed a hostile, zero-premium bid at 65c. But the bid is the endgame of a decade-long campaign. Frasers has wanted into Australia for years (it had earlier dabbled with MySale and bought Sneakerboy out of administration). The Accent operation unfolded as follows:

Buy the founder out at the top. In July 2024, with Accent above $2, Brett Blundy sold his entire ~$165 million block to Frasers. Adam: “I remember seeing Brett sell and thinking, oh, this can’t be good.” Adir on Blundy’s timing: “He’s good, isn’t he? Doesn’t get much wrong” — he sold at the absolute peak.

Put your own man on the board. Frasers nominated an “independent” director — who happened to have run Sports Direct for Ashley for 35 years.

Adir: “You’re Mike Ashley and you’re saying, I’ve locked up 15% of the company, but how the hell am I going to know what’s going on? So I appoint someone on the board who ran a chunk of my Sports Direct business and that I really trust. I think that will really nail the information flow for me.”

Then sign the JV that does the heavy lifting for you. Accent took on the capital-hungry Sports Direct rollout — which Adam argued is exactly what a patient predator wants:

Adam: “You just go spend a couple hundred million on this, and then — boom — I’m going to take you out when you’re a bit weaker.”

The genius, both agreed, is that Ashley cannot lose. If the Sports Direct partnership soars, his stake re-rates. If it stalls, he buys the lot cheaply. Either way Accent grows more dependent on him.

Adir: “This guy has manoeuvred himself into a great situation.”

So what does it take to win it? The stock is already trading above the 65c offer, and Ashley’s blocking stake means he’s the only buyer in town. The guys think it gets done — but not at 65c.

Adir: “If you offer an investor who five seconds ago was sitting at 55c a buck — and by the way, your dividends are being cut anyway — I think you get this away at a dollar. I’m just not sure Mike actually wants to pay a dollar.”

Adam: “You can’t make six billion US dollars unless you’re a pretty good operator. And Mike clearly is.”

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Nothing highlights the rushed, chaotic nature of this federal budget more than the last-minute reversal of legislation that would have financially ruined grieving widows. The legislative process has been so sloppy that a Labor-Left government committed to a goal of social justice keeps fumbling the ball in ways that disproportionately affect women.

Detail is boring and politics is shrill, but it’s worth understanding what the government almost did.

In the budget, certain negative gearing and CGT benefits will be retained by existing asset owners, a so-called “Grandfathering” clause. The government has decided that an asset jointly owned by spouses would have its grandfathered tax benefits stripped when one owner dies or if the couple divorces.

Beyond the political absurdity of this measure, how did no one in government realise that policy targeting grieving, older widows is deeply unfair, economically unnecessary, ideologically nasty, and exceptionally callous? Whilst the legislation would have applied equally, women would have had it much worse because in the developed world, women outlive men.

According to census data from 2021, there are roughly one million widowed Australians, and widows outnumber widowers by four to one. For someone with even a passing interest in demographics, it is quickly obvious that such policy would impact women four times as often as men. Yet, a frantic Treasurer was about to ensure that newly widowed women with jointly owned investments would have had their financial security instantly and severely worsened.

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This disaster was also slated to apply in divorce, and again it would have excessively hurt women. In a domestic partnership, the highest-value investments are often real estate and when heterosexual relationships end, these more frequently divide in favour of the ex-wife. The instant removal of a negative gearing tax benefit may well mean the loan on that woman’s rental property could no longer be serviced. Jim Chalmers was an inch away from creating policy likely to push a widow or divorcee into the forced sale of her assets.

Whilst the government either missed these disasters or didn’t care, thankfully several astute journalists as well as some crossbenchers made a fuss. And as is not standard practice, by morning the Prime Minister had reversed course. Changing one’s mind when the facts change is admirable, particularly in a politician. But it would have been far more admirable to consult properly and honestly on such dramatic legislation, and avoid this national mess.

There is one specific area in which women still face the potential risk of a more adverse outcome than their male counterparts.

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To go back a step, for several weeks pundits have highlighted that changes to capital gains tax (CGT) and negative gearing would prevent younger Australians from accessing wealth creation opportunities that enriched their older compatriots. To compound this inequality, wealthy Australians will retain their benefits. These and other proposed changes created a political backlash sufficiently large for the government to acquiesce to some so-called carve-outs.

Even with these carve-outs, the wealthy and entrepreneurial have been dealt a harsh blow. But ironically, one of the carve-outs has exacerbated a gender inequality problem.

The government now plans to offer preferential CGT treatment to businesses that fit an “innovation” definition. Whilst the details have not been released, there is precedent in a 2016 concession that established the early stage innovation company (ESIC). It would be logical for the government to utilise this existing classification mechanism for “innovation”. This concession explicitly concerns startups that receive external funding, and the hurdles are skewed towards addressing that case.

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Unfortunately, there is a long and consistent body of evidence demonstrating that women are materially underrepresented as the founders of externally funded technology startups. Whilst the industry has been trying to increase the representation of female founders amongst this funded ecosystem, there are genuine structural obstacles. The challenges are real and ingrained, and they will not be overcome quickly.

Thus, if the “innovation” carve-out for preferential tax treatment is biased towards the funded sub-sector in which women are historically underrepresented, it will financially disadvantage women. And often younger women starting their first business.

This outcome is not a fait accompli, but the risk is real and demands a blank-page assessment. There is danger in rushed, lazy, or sloppy categorisation, and to date this process has been light on precision.

With each passing day, the unintended consequences of this budget appear worse. No doubt, there are more landmines waiting to be discovered, or created as the detail is produced. It is yet another example of what happens when governments rush dramatic, life-altering legislation without proper engagement.

One can only hope this government finds the courage to pause these changes until a proper and transparent consultation has been undertaken. If Albanese does finally take the high road, it is likely a new Treasurer will join him on the journey.

That’s the thing about bubbles, they creep up on you. Bubbles turn usually sensible, risk-averse people into brazen speculators. This is because bubbles are always based on a strand of truth, a thread of sensibility. It’s only in hindsight, after the bubble has popped, that the absurdity becomes obvious.

Every era has a company or thing that best embodies the bubble. During the tulip bubble it was the Semper Augustus bulb (which at one point sold for the price of a grand Amsterdam mansion); the Roaring 20s had RCA, the entertainment business that later created NBC and whose share price would subsequently drop 98%.

The 1960s had the Nifty Fifty and Polaroid which had a near 100 price earnings multiple (before crashing 90%). The Japanese Stock Bubble of the 1980s, which saw its market peak in 1989 before collapsing, took until 2024 to regain its losses (meanwhile the Japanese property market never fully recovered). The star back then was NTT Docomo, which traded on a PE multiple of more than 350 and was worth more than IBM, AT&T, Exxon, General Electric, and General Motors combined (Docomo was eventually delisted in 2020 after being absorbed by its parent, NTT).

While many point to Webvan and Pets.com during the dot-com era, they were largely irrelevant – Cisco was the epoch. It was briefly the world’s most valuable company after its share price surged by over 3,800% in five years. Shortly before the dot-com bubble burst in late March 2000, Cisco snatched the crown from Microsoft, worth more than US$500 billion with a PE multiple of 230. Its share price would soon drop by 80%. It took 25 years to recover those nominal share price losses.

All these bubble epoch companies had genuine reasons for their rise; virtually all survived the crash for decades to come, albeit with far lower market values. RCA was purchased in 1985 by a then-dominant General Electric (itself a key figure in the dot-com bubble based on the now widely discredited Jack Welch’s fraudulent use of GE Capital).

What is the AI era’s poster child for the bubble?

It’s not Nvidia or Apple or Alphabet (hugely profitable businesses albeit all mutually inflated by off balance sheet capex).

No, it’s SpaceX (and when the inevitable Tesla merger happens, Elon Inc).

SpaceX has it all – a genius founder and CEO (now the world’s first and only trillionaire), a plausible bubble story (mining space) and a transformational product (Starlink).

Real bubbles need smart people to join in, not just brazen speculators. The NFT craze wasn’t a real bubble, only a handful of crazed speculators, pop stars and late-to-the-party idiots got involved. The smart money stayed well clear.

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SpaceX is different. Australia’s smartest debt fund manager, Chris Joye, claimed SpaceX’s “equity story was all about the almost unquantifiable optionality and upside associated with the world’s most capable, and important, manufacturing business.” Marc Andreeson, founder of Netscape and one of the most influential VCs in the Valley wrote a fawning profile outlining the upside of SpaceX’s moon shots (while assiduously avoiding any real financial metrics).

Australia’s richest person, Gina Rinehart, invested $1.4 billion in the IPO. More than 20 of Wall Street’s most respected banks worked on the float, which was led by Goldman Sachs and Morgan Stanley.

Even Joye fell into the classic bubble trap, misplacing product genius with positive cash flows: “SpaceX inverted the economics. It used vertical integration, a never-before-seen launch cadence, and reusable rocketry to turn a failed industry into a planetary utility. Starlink now connects households, airlines, ships, emergency services and armies. In Ukraine, access to Starlink materially changed the battlefield.”

To be clear, I’m no Elon hater – I drive a Tesla (my favourite ever car) and love Starlink. We once recorded a podcast from midair using Starlink with the full episode uploaded by the time I landed. The SpaceX rocket business has a clear lead over all-comers which will persist for decades.

The problem? Having a great product and visionary genius doesn’t justify a price to sales multiple of 100 (or a forward P/S multiple of 90). Bearing in mind we shouldn’t even be using the insidious revenue multiple, we just have no choice here because SpaceX not only doesn’t make any money, it won’t make any real money (post capex) for a long time.

The intrinsic value of SpaceX is so far removed from its current valuation (around $2.1 trillion depending on the day) that it’s difficult to take any of this too seriously. But let’s do a quick sum of the parts given that SpaceX is really two (or possibly three) separate businesses.

First the easy one – xAI. Elon’s bastardised social media business turned frontier model turned data centre operator.

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xAI is a cash furnace. Last year it saw US$1.2b in EBITDA losses before its capex of US$12b. Even with the recent deals to rent GPUs to Anthropic and Google, this is a business that is worth essentially nothing and competing against Anthropic and OpenAI (and a host of other models). The Cursor deal (which got significantly cheaper than the US$60b sticker price with SpaceX’s share price gain) is interesting, but the LLM space is becoming commoditised and margins are likely to be starched away through furious competition between frontier labs and lightweight models. (Note, the cash burn of xAI will drop materially following the Anthropic and Google deals but then it becomes more of a GPU rental business than a deep tech decacorn).

Then there’s the good business – Starlink. Starlink has a virtual monopoly on satellite internet globally (Amazon’s Leo is miles behind). It benefits from being able to hitch a ride on SpaceX’s launch capability for essentially a wholesale price.

There are around 10,000 Starlink satellites in orbit out of 15,400 total satellites – Starlink is literally two thirds of all low orbit satellites. That’s a big lead that could take a decade or more to catch. When Starship ramps up the cost per kilogram will drop 90% and that benefit will continue to be mostly capured by Starlink.

But even virtual monpolies have an intrinsic value. For that we need to look at how much real profit (after capex) the business generates, how fast its profit is growing and how big is its addressable market.

According to SpaceX’s S1 Starlink makes around US$8 billion a year in EBITDA. But this isn’t a media or software business with no incremental capital costs – satellites aren’t cheap, even the little ones. The business spent US$4b on capital expenditures – so a better proxy for profit is US$4 billion.

The strange thing is, despite Starlink being such an incredible product, it’s not actually growing that fast, it rose around 86 percent last year. This is very good, but it’s not 100x sales good.

Meanwhile, the average revenue per user for Starlink is dropping – from US$99 per month in 2023 to US$81 per month in 2025. This reflects the shift from high cost users like private jets and super yachts to cheaper consumer satellites. That means to keep up its growth rate, Starlink needs to find lots more customers because incremental customers are less lucrative than earlier ones. This also shows that it lacks real monopoly pricing power – while Starlink is faster than broadband, it’s not that much faster, and in the consumer market isn’t able to command much of a pricing premium.

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Then there’s the addressable market. SpaceX bulls note that every broadband user on earth is a potential Starlink customer. But even if you take the ultimate steel man case and take the ten largest telcos on earth (AT&T, Verizon, Deutsche Telekom, Comcast, China Mobile, NTT, Vodafone etc) their annual profits combined are around US$110b.

It’s inconceivable that Starlink could take even half of that market given the incumbents’ rusted-on customer bases, massive infrastructure and often, diversified businesses. But even if Starlink took every single customer from every major telco on earth, the business would be worth around US$1.4 trillion – a significant discount on SpaceX’s current value.

That leaves the SpaceX rocket business, which notionally makes some EBITDA (US$1.1b in 2024 and US$653m in 2025) but which spends US$3b on capex annually. There’s no doubt SpaceX is best in class, but despite Elon’s Mars fever dreams, remains trapped in a relatively contained market. This year more than 75% of SpaceX’s payloads are shipping Starlink satellites into orbit (this is up from 64% in 2023).

The 25% of SpaceX flights that weren’t dedicated Starlink missions were shared among commercial telecom satellites, U.S. space force spy satellites and NASA astronaut/cargo runs to the ISS.

This means SpaceX can’t really be considered a separate operating business; it’s really part of Starlink, so it’s hard to give it much value.

So we have two very cool, but mostly valueless, businesses (in xAI and SpaceX) and one fantastic business (Starlink). The problem is Starlink is only a US$4b profit business (and that’s being generous) growing at 86% annually with shrinking ARPU. Even allowing for a significant Elon premium, this is maybe a US$300b business – if you just saw the financials and nothing else, you’d be closer to US$150b (or even less). That’s around 90% below the current market price. (None of this is investment advice and I don’t have a position in SpaceX stock.)

So how did this SpaceX bubble become so frothy? Partly there’s the Elon magic – Tesla has been similarly overvalued for almost a decade. But there were other reasons.

Most notably, the float raised only US$75b – this is tiny when compared to SpaceX’s total market value. So a small number of shares is acting as a false proxy. Then there was the controversial decision by the NASDAQ to alter its index rules to fast-track SpaceX into its flagship Nasdaq-100 index. This meant that SpaceX will join the index in just 15 days (rather than 3 months), forcing index funds and ETFs to buy the stock.

When you mix the Elon magic with a fast growing and much loved product and sprinkle on some financial alchemy, you get a business that is not only one of the most valuable ever, but could also drop 90%.

If you’re thinking this all feels like 1999 all over again, you’d be right.

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The Contrarians catchup

• Adir’s Howard Stern/David Letterman clip got four likes on LinkedIn. His more combative posts about the budget went viral but attracted personal abuse. “I find that if someone I have had an interaction with writes personally mean stuff to me on LinkedIn, I find that quite hurtful. But like even random people that I don’t know, anonymity is worse, clearly.”

• The episode kicked off with a quiz: the world’s top startup ecosystems by value. The answer: 1. Silicon Valley, 2. New York, 3. London, 4. Tel Aviv, 5. Austin. Sydney is 26, Melbourne is 30. Adir’s take on Tel Aviv: “There’s been a war in Tel Aviv, incredible. Like all of these founders, literally they’re going to the army. But foreigners are scared to invest VC money in the country and yet it’s recent number four with no population.”

• Adir used Claude to compare his electricity bill against competing providers after the government comparison tool gave him completely wrong results: “I uploaded screenshots of prices from different providers into Claude and my bill and I said can you just work this out? I double-checked the end result.” He also discovered he was taking longer and more frequent showers than anyone else.

• The ASX has returned just 32% since 2006, compounding at 1.4% per year over 20 years before dividends and inflation cancel each other out. Adam: “The ASX has been just a quagmire for two decades. What a disastrous state of affairs.”

• Adam wrote a 2,000-word piece on Luke Sayers for The Contrarians newsletter and says it was the best reaction he’s had to anything he’s ever written: “It went into the real background of pre-Dick Pic Day. Luke was a controversial character at PWC. He was fined for having alleged relationships with staff. There’s a lot of stuff that hasn’t really been reported much.”

Albanese accidentally admits he doesn’t believe in capitalism

The government announced a partial retreat from its most controversial CGT changes, creating a 50% discount for innovative businesses meeting strict criteria, and lifting the small business concession threshold from $2M to $10M in turnover. But a $10M lifetime cap applies, and the new rules are near-impossibly complex to qualify for.

Adir: “I sincerely apologise for calling you a shill because they wouldn’t say backdown. But I don’t think this is a backdown. This is basically, you know, like I call this, you know the Simpsons episode where Homer and Chief Wiggum are in a hole and they say, how are we gonna get out? And Chief Wiggum yells no, dig up stupid. Like this feels like that moment to me.”

Adir: “It’s like you’re trying to do a puzzle, but people have poured in pieces from eight different puzzles. And now make the picture. It doesn’t fit together. You can’t make this picture.”

Adam: “What Albanese and Chalmers don’t seem to get is the fact that the CGT reforms will change the cost of capital and push investors towards higher yielding, more mature companies to pay big dividends. They have no understanding of that concept whatsoever.”

On Albanese’s claim that the aspiration of a small business owner is the same as for every worker:

Adam: “There in one barely comprehensible sentence is a treatise where he is saying I do not believe in the principles of capitalism, because in capitalism, capital and labour do not get treated the same, for better or for worse. And Albanese has just, I do not believe in the fundamental cornerstone of capitalism.”

Adir: “A politician who is paid from the public purse is as aspirational as someone that opens a hairdressing business and doesn’t pay themselves for four years. We are the same aspirational. Now, you might be the same ambitious, but he’s not as aspirational. And we should not compare the taxpayer-funded salary that a politician gets with the hairdresser and the sweat equity they’ve built up and the risks they’ve taken. And if you do compare those things then frankly you no longer believe in capitalism.”

Adam: “He is not lying about his core ideology. His core ideology is I do not believe in capitalism. And there are not really democracies that have managed to exist anywhere around the world in history for extended periods of time that have not been based on capitalist economies. This is a slippery slope to democratic disaster if we start eroding capitalism.”

On who is actually paying for it all:

Adir: “The biggest travesty is we’re all fighting about CGT, and Chalmers’ comment was basically, how many young people even are affected by CGT? And that triggered a thought in my mind, which is we shouldn’t be arguing whether 10 or 20% are affected by CGT. We should be saying, how come 70% of young people are not affected by CGT? And the answer is, because if you earn $45,000 to $135,000, you’re paying an extra 30% in income tax. If you’re earning $100,000, the average wage in Australia, it’s usurious levels of tax. And somehow the entire tax debate has been completely deviated towards CGT.”

KPMG is worse than PWC, and barely reported

A Senate inquiry revealed that KPMG had systematically shared confidential client board papers, including those of 70-year client Lendlease, to win new audit work. The firm’s former CEO Andrew Yates, who publicly condemned PWC’s behaviour in 2023 while this conduct was ongoing inside his own firm, has been ousted. He was paid $3M in salary last year and is receiving a $1.7M termination payment. A former KPMG partner who is now chairman of Westpac’s audit committee stayed at chairman Martin Shepherd’s house while KPMG was pitching for Westpac’s $32M audit. A separate KPMG partner left the firm and within months joined the Macquarie board, chairing its audit committee. KPMG subsequently won Macquarie’s $75M audit.

Adam: “Not only did he basically try to steal clients from PwC, he also lied about the whole process in front of Parliament. This guy said this is why the PwC issue is so disturbing. Based on the findings of the Tax Practitioners Board, the conduct of PwC was clearly unethical and unacceptable. Yates even emphasised that KPMG did not use legal personal privilege improperly. He then went and claimed it.”

Adam: “They’ve got this law firm to investigate. They’re using this internal investigation to avoid giving it to a real investigator. The whistleblower is being exposed internally throughout the organisation. He got fired. They certainly dismissed the claims. And ASIC has conceded that they have inadequate powers to protect the whistleblower because something about these types of partnerships don’t exactly fall under ASIC. This whistleblower who has now said I wouldn’t do this again. This country can’t even protect the whistleblowers that are doing the right thing.”

Adir: “One of the things that I’ll generally say to players is exactly what I feel like should be said to this board and this CEO. You should never do anything that you would be embarrassed about on the front page of the Financial Review. All of this would not have been hard to understand was going to look terrible on the front page of the Financial Review. They just didn’t think it was going to. And they came to stop it getting there. But welcome to the reality.”

Adam: “This is horrifying. How many column inches were devoted to PWC? This is so much worse. It’s not just the crime, not just the stealing the documents and using it for your own money-making schemes, but to effectively victimise this poor whistleblower. And God knows the mental state of this heroic whistleblower who tried and tried and tried.”

Ferrari’s EV problem

Ferrari’s new electric car, the Luce (meaning “light” in Italian), has drawn criticism for its looks, which don’t carry the instantly recognisable Ferrari silhouette. Yet Ferrari’s brand machinery has ensured that loyal clients feel they need to buy it to maintain good standing and preserve their access to limited edition supercars. The Ferrari F-80 sells for US$3.9M and trades for $5M on secondary markets. The FXXK (this isn’t us avoiding saying “fuck”, that’s its name), a track-only car, sells for $3M and $4M on the collector market.

Adir: “Even if you don’t see the badge, you know it’s a Ferrari. You couldn’t say that about this car. I think that’s the difference.”

Adam: “This is better than brand forgiveness. Forgiveness would usually mean, don’t worry that we made a mistake, when we make the next thing we’ll be fine. This is, we made a mistake, but our brand is so strong and our customers are so desperate to be a part of it that they will buy this thing that no one maybe wants in the same way, just to show us that they’re there for us in hard times as well as good times. This is absolutely remarkable.”

Adir: “They’ve got this unique characteristic, or I don’t want to say unique because that would mean only one has it, but very, very uncommon brand characteristic, which is people will buy things from us that they don’t even really want in order to have standing to buy the stuff that they do want because it’s so unattainable and inaccessible. That is like a very, very tough game to play that almost no one pulls off.”

Adore Beauty: the IRE Index claims another victim

Adore Beauty, which IPO’d at a $600M valuation, rejected a $1.20 per share ($130M) acquisition approach roughly a year ago. The shares now trade at 30c, implying a market cap of around $25M. Insiders including founders and private equity backer Quadrant sold down a combined $250M across the IPO and thereafter, giving an IR (Insider Relative Exit) Index ratio of approximately 10, making it a strong contender for number one on the all-time leaderboard.

Adir: “The problem they’ve got is the problem that we foresaw they were going to have. You’re selling third-party retail stuff against an enormous, very well-run competitor in Mecca, who also has exclusive brands that bring people in. You can’t compete with them.”

Adir: “And when they opened stores, which I generally favour, you know, I hate third-party retail, but they’re opening stores three doors away from Mecca. That is not a road to victory.”

Adam: “If David Jones stays solvent, that will be a dramatic achievement in my view. Like that has big problems. But if you’re Myer, how would you not launch a takeover bid for Adore Beauty now? For $20M, very cheap. There is a brand that has a loyal customer base that will respond to offers from Adore Beauty, and there’s a real brand there.”

Five other stories worth following:

1. US and Iranian negotiators met in Switzerland overnight after talks turned tense, while Trump threatened harder strikes unless Tehran reined in Hezbollah. Qatar and Pakistan reported encouraging progress, with negotiations continuing through the week.

2. Keir Starmer said he will resign as UK prime minister, promising an orderly transition after Labour lost confidence amid an Epstein-linked ambassador scandal and Andy Burnham’s rise. A successor is expected by September recess.

3. Serena Williams will return to Wimbledon singles next week after accepting a wild card, nearly four years after stepping away at the 2022 US Open. She will also play doubles with sister Venus.

4. Nipsea researchers in Singapore developed an ultra-black paint absorbing 99.9% of visible light, creating optical illusions and potential luxury vehicle uses. It recalls Vantablack, used by BMW concepts, satellites and submarines.

5. Snap unveiled Specs, chunky AR glasses costing about $2,200, after a decade in development. Shares fell over 5%, though Evan Spiegel compared the device’s all-in-one computing power to a premium computer.

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The Contrarians catchup

• The Socceroos beat Turkey 2-0 at the World Cup, in what Adir called a genuinely shocking result. “It was pretty obvious from the way they set up the structure that they were gonna try to play this game, which is we’re just gonna defend the hell out of it and try and kick a ball forward and counterattack. It’s a perfect counter positioning, right? And it worked.”

• Adir spent a full Sunday touring Melbourne’s furniture strips to take the temperature of consumer spending. His read: north of the Yarra, young people were busy in cafes and fashion stores. South of the Yarra, almost every furniture store was dead except Coco Republic, which had been heavily discounted since being bought by private equity. “I think we might be at the low point right now for consumer durable goods discretionary spend. Although there is a pretty high chance we go into a recession after this budget.”

• Adam’s Melbourne Airport taxi machine experience: three machines, none working. His verdict on the incompetent roll-out: “The best laid plans, we’re gonna stop this roading, we’re gonna put these machines in, and they couldn’t even get the machines to work. One didn’t attach to the credit card reading machine. And the other one just didn’t even get that far.”

• Adir took an Uber driven by a man who spent 25 minutes delivering a dissertation on why Hezbollah is not a terrorist organisation. Adir now books his Uber under a different name: “If I use my name, how many times I’ve been lectured about Palestine. I’m not interested in that. It’s so terrifying.”

• A Fair Work Commissioner previously employed by the CFMEU and TCFU ruled that Uber could not remove a driver from its platform despite multiple safety complaints including photographic evidence of him driving at 119km/h in a 100 zone. Adam: “We’re not looking after our 17-year-old girls, we’re looking after these rapists.”

The R&D tax rort: Atlassian’s $150M windfall

Hidden inside the federal budget was a change to the R&D tax incentive, lifting the maximum annual claim from around $100M to $150M. Only two Australian companies claim anywhere near that level: Atlassian and Fortescue.

Adir: “The previous chair of the Tech Council was Robyn Denholm. The current chair is Scott Farquhar. Robyn Denholm went to be the government innovation advisor and wrote the R&D tax incentive recommendation, which said lift it to $150M, of which one of the two companies that benefits is Atlassian, of which Scott Farquhar is a co-founder. So there are links everywhere here. It smells fishy and I don’t think that’s a good look.”

Adir: “You’ve got a situation where they’ve also raised the threshold on which you can make an R&D claim to $250K. And so all of these small startups in their first one or two years of starting, they now lose access. What makes me angry is that these small startups that should be supported, they’ve just lost the ability to claim.”

Adam: “Robyn’s quote was, ‘in Silicon Valley, nobody’s sitting around a table going, oh I wonder what the government’s going to do to help us get this startup off the ground’. She’s never worked in a startup in her life. She started at Tesla when it was a trillion-dollar business. Who is she to be telling startup founders what they can and can’t be doing? She’s a billionaire. How dare she lecture founders with no money in the bank who are living off ramen?”

Adir: “When she says I’ve never heard a founder think about tax before starting a startup, I would say listen harder. The reason you’ve never met a founder that cares about tax is you’ve never tried to charge them 47% before. Go charge them 47%. And you just did. And now they’re all talking about it.”

The budget hits young cheerleaders, not Scott Farquhar

Adam told the story of two founders in their mid-twenties who built a cheerleading club from scratch, filling a warehouse in Port Melbourne with 1,000 kids. The business makes millions in revenue. If they sell in a few years for $10M, they will pay 47% CGT on their gains.

Adam: “This is the sweat equity. This is a young 25-year-old who’s about to build a significant business, doing a great thing for the economy, about to be absolutely smashed from the politics of envy and incompetence. It’s not the Scott Farquhars and Mike Cannon-Brookses. We’re fine. We get grandfathered.”

Adam: “They trusted Labor not to lie to us on economic policy. They’ve lied, they’ve killed the trust of this 5% of aspirational voters that call it Howard’s Battlers. And we’ve seen that’s why Albanese is now less popular than Pauline Hanson.”

Adir: “The higher the return of an asset, the higher the tax rate on that asset. It’s one of the singularly dumbest ideas you could possibly have if you fundamentally believe in capitalism. And that’s what this system does.”

The New Zealand Finance Minister, Nicola Willis, responded to the Australian budget changes with: “Australians looking to start or grow a business have an epic opportunity. And that opportunity is to do it in New Zealand.”

Adir: “She’s right. It’s sad to say, but she’s right.”

Xero chairman falls in love with the CEO

Xero chairman David Thodey has begun privately meeting institutional shareholders to try to rebase CEO Sukhinder Singh Cassidy’s pay package. Xero shares are down 62% this year. The acquisition of loss-making Midland Milo was signed off by the board and the CEO together.

Adam: “Singh Cassidy has the unique honour of being both the highest paid and possibly the worst-performing CEO in Australia. The worst chairman is the chairman that falls in love with the CEO. Richard Goyder with Alan Joyce was probably the classic. And this is David Thodey’s falling for the same trap. He’s fallen in love with his CEO while the CEO has completely underperformed.”

Adir: “If you start and you say I’ve got this great strategy, we’re going to drive the share price up with my incredible decision making and execution, and then as CEO the share price goes into reverse dramatically, you need to own it. You can’t turn around and say, well, there’s no incentive for me anymore to keep doing it. Either you believe it or you don’t. If you believe it, stick with it because you’re gonna make lots of money in the future when it rockets back up. If you don’t believe in it, quit. But this idea that says I had this strategy, investors don’t like it, it’s run the share price into the ground, and now I don’t feel motivated anymore, I can’t support that.”

Adam: “I think both CEO and chairman have to go. I called this with DroneShield and this is the same. Chairman, CEO gone. They have to go.”

Elon becomes the world’s first trillionaire

SpaceX completed what it says is the world’s largest ever IPO last week, raising US$75B. Shares were priced at $135, traded up to $173, and settled back to $161, a 19% pop. Only 5% of equity was sold. Famous short seller Jim Chanos called it a “hopes and dreams IPO.”

Adam: “The IPO was perfectly priced. You want a bit of good sort of goodwill publicity. And obviously only selling 5% of the equity, so you can afford a bit of dilution. This is a perfectly priced IPO.”

Adir: “It’s hard for me to communicate how much this feels like the dot-com boom. It’s almost identical. The reason I say that bit of background is it’s easier to mistake this as being unlike the dot-com boom because the businesses are making revenue. But what is the same is that the valuation and the economics of the businesses are completely disconnected.”

Adam: “It never made any sense that a couple of dudes from Australia, where one ran a lingerie business and one was just a finance guy, how these guys could be better at tech than real genius technologists out of Silicon Valley.”

Adir: “I think very smart people are now saying very dumb things, drinking the Kool-Aid. I remember that from the dot-com boom and I was young and I remember thinking, hang on, am I really dumb? And so if you’re skeptical and cynical about what’s going on, do not second-guess yourself based on smart people agreeing with those valuation. And if you’re not cynical and you think you’re right, don’t draw any succour from smart people agreeing with you. I saw almost every smart person being wrong in the dot-com.”

Special guest: Tim Wilson, Shadow Treasurer

Tim Wilson, the member for Goldstein and the Liberal Party’s Shadow Treasurer, joined the pod. Wilson famously lost his seat to Teal candidate Zoe Daniel in 2022 and then became the only person to win a seat back from a Teal at the 2025 election. He is a heartbeat and an election away from the treasurership.

On winning back his seat:

Tim: “If you ask me on 23 May 2022, I thought I was done. If you asked me in the year leading up, I was absolutely convinced I was going to win. But as it got closer and closer to election day I felt it slipping. And then on election day when the numbers were coming in and my opponent was celebrating her victory, we were looking at the numbers and saying, this doesn’t look right. We can see a path to victory. I wouldn’t be calling it this early. And so basically from election night onwards, I absolutely believed I was going to win.”

On One Nation:

Tim: “If you’re earning $60K, $120K combined household income and you’re trying to pay thousands and thousands of dollars a month in mortgage and it just keeps going up and up and up, you get shitty. There’s no point pretending otherwise. People are feeling the pinch much harder. They’re going to the supermarket, they’re getting less in their red basket and they’re saying something has to change. But at the moment they’re just looking for a sense of almost exasperation for an alternative. And she’s come along and said I’m a bright, in one sense, a bright new shiny thing.”

Tim: “I don’t believe in being One Nation lite and I don’t believe in being Labor lite. I believe in being big Liberal, which means we’re pro-enterprise, pro-family, pro-community, and pro small business getting ahead.”

On the budget and young Australians:

Tim: “There was a study by the e61 Institute that looked at which companies were most likely to be productive and they were those in the first five years. Which ones were most disproportionately likely to employ people? Companies in their first two years. And the ones that were most likely to be productive were also those that had employee share ownership schemes because you get interest in alignment. I want interests in alignment to grow the future of the economy. And instead they’re being targeted.”

Tim: “Labour has divided the country, particularly through this budget. They literally led up to the budget trying to encourage families to have fights around the kitchen table. They’ve pitted people who’ve invested and saved against young Australians on a false promise that it’s going to achieve greater home ownership. We’ve got to be the solution which unites the country, talks about a way forward and gets people to put their energy towards growth and opportunity again.”

On housing:

Tim: “We’ve said that we’re not going to allow migration to continue to overshoot while we haven’t got the volume of housing stock. You can’t if you keep overshooting migration, which is what we’ve been doing, while not building new housing stock, you only get one impact.”

On what he wants for young Australians:

Tim: “I don’t want to run your life. How you live your life is up to you and I respect that. And I also don’t want it in return. I want whatever generation of Australians you’re in to be in a position to get ahead and to be able to work hard and that hard work actually pays off. And then I’m interested in how you design a tax system that empowers you.”

Five other stories worth following:

1. G7 gathered in Évian-les-Bains as Macron sought to ease tensions, boosted by Trump’s Iran deal news but strained by US positions on climate, NATO and Greenland, plus a Versailles dinner to keep him engaged.

2. After Amazon’s Andy Jassy reportedly warned Fable could be jailbroken, the White House allegedly ordered Anthropic to pull models offline, then imposed export controls. Anthropic says no universal jailbreak exists as talks continue.

3. Trump marked his 80th birthday with UFC Freedom 250 on the White House South Lawn, joining Dana White cage-side before 4,300 invitees, including Mark Zuckerberg, David Ellison and Joe Rogan, despite storm threats.

4. The Knicks ended a 53-year title drought while generating huge economic upside for New York, from packed bars and merchandise sales to $90M home games, million-dollar finals ads and late-night TV ratings boosts.

5. New Dawn Bio raised $2.4M to grow cultured wood 10,000 times faster than forestry, using tree stem cells and bioreactors to create shaped timber that could reduce waste, deforestation and carbon emissions.

It is a story that has captivated Melbourne’s establishment: a delicious mix of immense wealth, high society, the AFL (the closest thing Melbourne has to a state religion), and a reportedly very unattractive, somewhat shrivelled, penis.

In May 2025, just one year ago, Luke Sayers was riding high. The seemingly Teflon-coated accountant had avoided sanction in the PwC tax leaks scandal and had been fully exonerated by the AFL’s integrity arm in the “dick pic” episode. Rather than keep a low profile, Sayers booked out French diner France-Soir in Melbourne’s glitzy South Yarra to throw a private lunch celebrating his return to Melbourne high society.

Caroline Wilson reported that the lunch was attended by former AFL chief turned Tabcorp boss Gillon McLachlan, embattled St Kilda president and Sayers’ good friend Andrew Bassat (who also bankrolled Sayers’ now near-worthless consultancy business), and Sayers’ own media advisor, Sharon McCrohan (the only female in the room). The loathed former Premier, Daniel Andrews, made a rare public appearance to support his good friend, as did Eddie McGuire and even disgraced former Qantas boss Alan Joyce.

But just when he thought he’d escaped, seven months later, Cate Sayers, Luke’s estranged wife launched legal action that would shock and titillate Melbourne society. Cate accused Luke of deliberately defaming her in legal statements—most notably, a statutory declaration he voluntarily provided to the AFL.

Before he became the defendant in the most keenly followed defamation case in Melbourne society history, Luke Sayers was a high-flying accountant.

Sayers’ background gave no indication of the heights he would soon reach. Born in 1970 in rural Victoria, Sayers studied commerce at Monash University before landing a graduate auditor role at Price Waterhouse in 1991.

Sayers didn’t stay a junior auditor for long. At 25, he moved to the United States and built a consulting practice within PwC’s Washington office—an impressive feat for a kid from country Victoria whose background was as a junior auditor. While in the US, Sayers became a partner at PwC at only 28, which was an exceptionally young age for a partnership even then.

Sayers returned to Australia in 2001, aged 31, and led PwC’s tax division. Seven years later, he was remarkably in the running to lead PwC’s entire Australian business, supported by Paul Brasher, the former PwC Australia chair who had risen to become global Chairman of PwC. (Brasher himself would have a short and unsuccessful stint as Chairman of the Essendon Football Club between 2020 and 2022). Being in the running to run a 6,000-person firm at that age was unprecedented.

Sayers’ initial CEO pitch was cruelled by wiser heads, with Mark Johnson appointed to replace Tony Harrington as CEO. Rob Ward, who had been PwC’s Australian managing partner (before moving to a global role), noted that “Luke was a talented guy, but in a hurry.”

However, as the AFR reported, even back then, Sayers’ behaviour was becoming a problem. Edmund Tadros noted that “in 2012, Sayers was personally fined by PwC for behavioural breaches and pre-emptively apologised to a group of female partners for unspecified past behaviour. He was also personally fined during his tenure as CEO over a conflict-of-interest issue.”

The fine was believed to be in the “five to six figures” and related to excessive spending on entertaining clients and staff, including trips to events and dinners at pricey restaurants.

Worse were the more tawdry allegations that were later reported by the AFR which noted that in 2010, PwC partners had been privately raising concerns about an “inappropriate relationship” (consulting speak for an affair) between Sayers and a junior PwC employee. There were concerns about how closely Sayers and the woman worked together, and how quickly she had progressed within the firm. She was in a part of the business under Sayers’ remit as COO and received roles and responsibilities at a pace that seemed at odds with her experience. Sayers denied the allegations.

Despite these controversies, at 42, Sayers was appointed CEO of the $1.4b PwC (reportedly it was a field of one). Tadros reported that in eight years atop the Australian giant, Sayers almost doubled revenue—a feat that, while sounding impressive, was a relatively pedestrian eight percent annual growth.

Sayers was well-compensated for this relative mediocrity, collecting more than $30m in remuneration. (It would later be revealed that during Sayers’ tenure, PwC partners shared confidential Australian Government tax information with clients—this would cripple the firm and force the divestment of its highly profitable government consulting business).

During his tenure as CEO, Sayers was again fined by PwC, this time for secretly participating in a bid to privatise a visa processing business. He was later forced to sell his stake after an internal investigation. The CEO of a blue-chip accounting firm being fined by his own firm while acting as CEO explains Luke almost better than anything.

In 2020, Sayers made his own big leap, creating the eponymous Sayers Group. While $4m a year is nice, Luke knew the real money was made owning the capital, not being the hired help. He funded the firm through money raised from Melbourne’s millionaire Fox family, alongside Andrew Bassat and Andrew Byrnes.

Sayers had a secret weapon: his very close relationship with powerful Victorian Premier, Daniel Andrews. It was speculated that Andrews directed ministers and public servants to send lucrative consulting business to Sayers’ fledgling firm. Andrews himself would not deny the link, with the Herald Sun reporting that Andrews claimed, “I would say he is a friend, yes... but that doesn’t cut across any of the professional dealings I have with him…I very rarely deal with him on professional terms.”

It was alleged that Sayers played a key role in Victoria’s maligned $100b Suburban Rail Loop. The Age reported that Sayers prepared the very first confidential business case for the heavily criticised project in 2017 while still at PwC.

Sayers Group lost its key inside man in 2023 when Andrews surprisingly quit as Victorian Premier, but the tax leaks scandal proved far more damaging. While Sayers escaped without personal sanction, his business was less lucky. Humiliatingly, Sayers’ name was removed from the door, the group was renamed Tenet Advisory, and Sayers moved from Executive Chairman to a largely ceremonial role.

The dick pic scandal erupted into this temporary peace in January 2025, when Sayers’ Twitter account tagged a female Bupa executive in a post featuring his unattractive appendage (the post was deleted thirteen minutes later). This was a major problem for Luke, who claimed his Twitter account had been “hacked.”

There were three feasible explanations for how the now-infamous image appeared:

1. Someone stole an image of Luke’s penis, hacked his account, and posted it tagging a random person;

2. Someone who Luke knew, apparently motivated by revenge, accessed the photo of Luke’s penis, then, perhaps suspecting a relationship with the executive, logged into Luke’s Twitter account through a known password and tagged the executive in a public post; or

3. Luke intended to slip into the DMs of the executive, but being technologically illiterate, mistakenly created a public post.

No one ever seriously believed scenario one was possible.

That leaves scenarios two or three. Scenario three would have been temporarily embarrassing, but in hindsight, far less damaging. (Sayers wouldn’t be the first, nor the last, powerful man caught with his pants down).

Sayers, alongside his trusted advisor (now senior AFL executive, Sharon McCrohan, more on her later), appears to have worked with the AFL Integrity department to ensure that scenario two was accepted and became lore.

What we didn’t know at the time but do now, thanks to Cate Sayers’ defamation application, is that Luke didn’t merely blame a random person for the image; he actually alleged the hacker was his then-wife.

Luke proceeded to allegedly demolish Cate’s reputation (while telling her the opposite, privately). Under the advice of one of Australia’s best-known litigators, Leon Zwier, Luke allegedly accused Cate of suffering from mental illness—including bipolar and multiple personality disorder—and stated that Cate refused to take her medication, implying she was in some sort of psychosis when she made the post. Luke even made the shocking claim that Cate was raped as a school student by her teacher and his wife—an incredible breach of privacy and trust that, even worse, was totally irrelevant.

If the reports regarding the content of the statutory declaration are accurate, Luke not only accused his wife of being crazy but also threw in unnecessary details of her highly private sexual history for good measure. If they gave gold medals for being an all-time flog, Luke would be our generation’s Usain Bolt.

The AFL’s sham inquiry, which appeared to intentionally avoid checking with Cate (presumably because it wouldn’t exonerate Luke), concluded that “on the available evidence” Luke’s Twitter account had been “compromised.” The only evidence the AFL appeared to avail itself of was Luke’s claims. For all its wokeness, when it really comes to protecting women, the AFL’s boys club couldn’t care less.

It has now become apparent that Luke’s statutory declaration (upon which Cate is taking the defamation action) was received by AFL integrity unit boss Tony Keane on January 15—six days before his sworn statement was formally submitted.

This appears to be what happened.

Back in January 2025, when Luke was trying to prove he had nothing to do with the image being posted, the matter was effectively being adjudicated by the AFL (Melbourne’s de facto court of law). To exonerate a club president and pillar of society, the AFL needed evidence. So, Luke provided the stat dec accusing Cate of being mentally ill and posting the image.

Luke’s media advisor, McCrohan, appeared to work in concert with the AFL’s integrity department to fine-tune the document. Joe Aston put it perfectly: “there is a prima facie case to answer that Luke and his advisers co-opted the AFL Integrity Unit in a conspiracy to destroy his wife’s reputation as a necessary by-product of saving his own.”

Even more shockingly, despite being Luke’s closest advisor through this process—Sharon McCrohan—was later appointed by the AFL as its Executive Manager of Corporate Affairs. You couldn’t make this stuff up. McCrohan remains one of the most senior executives at AFL House, reporting directly to CEO Andrew Dillon. That McCrohan remains in this role while the AFL is balls deep (pun intended) in this scandal is remarkable.

As for Luke, his legal response to Cate’s claims raised eyebrows. The most commonly used defence against defamation is that the allegations were true (the ‘truth defence’). If the horrific claims Luke made about Cate are true, the obvious legal move would be simply to rely on the truth defence. But Luke is not doing that; he is defending the action on the basis of qualified privilege—that is, the statements were made in good faith while serving a legitimate duty.

Qualified privilege is a far harder defence to succeed on, especially given Luke voluntarily made the stat dec to clear his own name. The obvious implication here is that Luke’s legal team, led by Leon Zwier, doesn’t believe a truth defence will succeed.

This leads us to Luke’s biggest problem. If the parties don’t settle and Cate wins, it is likely the Supreme Court will have found, on the balance of probabilities, that Luke’s statutory declaration is untrue. Luke is Melbourne’s very own Richard Nixon; his cover-up may end up being far worse than the original act. Lying on a stat dec is a serious offence, with a penalty of up to five years imprisonment.

There is still a possibility the matter settles before it gets to the Victorian Supreme Court later this year (Leon Zwier is the king of settlements) and the police ignore the potential perjury. But Cate is reportedly demanding an apology, which would mean Luke would have to contradict his statutory declaration and expose himself to criminal liability.

One suspects that France-Soir lunch was scheduled far too early.

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The Contrarians catchup

• The government spent $20M on a radio ad campaign telling Australians to pump up their tyres and remove heavy items from their boot to reduce fuel consumption. Adir did the maths: “If 2% of cars on the road pumped up their tyres from 28 to 32 psi and removed 50 kilos from their boot, it saves one million litres a week. Australia consumes a billion litres - 15M litres over 15 weeks. In the grand scheme of government wastage, it’s actually not too bad. They’re effectively buying petrol at a dollar a litre.”

• Glen Ira City Council wrapped one of its electric vehicles in about $10,000 of vinyl livery announcing it was “reducing emissions.” Adir: “I think that’s just indicative of the wasted money. There would be a million better things to spend that ten thousand dollars on.”

• Adam on removing the fuel excise: “Removing the fuel excise has the exact opposite effect. It obviously makes petrol cheaper so more people use it. They should actually be increasing the excise if they really want to reduce fuel use. But this is a government that cares much more about votes than actual economic policies.”

• Adir’s take on why centrist politics is impossible right now: “No one feels passionate about calmness and reasonableness. In an era where everything is extremely emotional, centrism and reasonableness and rational argument is super weak compared to one line emotional fighting. I think we’re leaving the age of reason. And if we’re going back to the age of emotion, which by the way caused both world wars, then being a centrist party today is fundamentally the problem.”

• SiteMinder is up 30% in a few months after both Adam and Adir flagged it as a buy. Adam: “SiteMinder’s been on a tear since we spoke about it. It was actually on a tear before we spoke about it, but it’s been on a real tear.”

The Victorian government: 35 seats and a crime wave

The latest polling suggests Labor could lose up to 35 seats at the next Victorian election. Victoria has entrenched itself as the crime capital of Australia, with insurance claims for car thefts surging 25% this year while every other state fell: WA down 15%, SA down 14%, Queensland down 12%. Victoria’s car theft bill exceeds every other state combined.

Adir: “People hate this government now. Enough people hate it. The question is who are they going to vote for? That’s the bigger issue. Historically the two most left-wing states in Australia are South Australia and Victoria. South Australia gave One Nation a big hug in their election. And if Victoria does the same, despite One Nation’s inability to have coherent policy amongst their leaders, people are becoming so upset with the far left they’re swinging far right, because they’re skipping over the top of the coalition.”

Adir: “The Victorian election will be a super interesting barometer federally. I think politically, electorally, at the federal level, the more interesting part of it is what becomes the relationship between the coalition and One Nation in Victoria after the election.”

Adam: “Dan Andrews has been the key proponent, but Jim Chalmers and Albo have jumped on it as well. We’re going to just massively increase the size of the public service. Who do public servants vote for? They vote for us. So we’re going to stay in power.”

The budget: hidden powers and a sleeper clause

The AFR revealed hidden provisions in the Federal Budget Tax Bill that give Treasurer Jim Chalmers massive powers to create additional CGT and negative gearing rules outside the legislation, bypassing parliamentary scrutiny. A separate “sleeper clause” could inflate tax bills by stripping the right to cherry-pick how capital losses are offset against gains.

Adir: “Albo just decided he’s not going to be swayed by pressure that he perceives is being pushed by interests aligned with the conservatives and the right. One of the things that’s incredibly similar between Albo and Trump, other than being populists, is they view concession of any errors as being a weakness. He will only flip if there’s a way that he can say, yeah, I meant to do this all along.”

Adir: “The primary driver of jobs creation in Australia in the last half decade has been public service jobs. Jobs where the money that people are paid depends on taxing wage earners in order to have the money to pay them. That is where jobs growth is coming from in Australia and in Western countries, and that enshrines this culture of entitlement.”

Adam: “We’ve got too much spending, whether it’s the NDIS frauds costing real disabled people the ability to get money, all the public servants, the ridiculous infrastructure like SRL that nobody wants. Then you’ve got a really inefficient tax system that effectively taxes income, not wealth. So that’s inherently unfair. And we’ve got so many younger people carrying the can for older people through the greatest tax rort of them all that nobody ever talks about, which is superannuation. Nobody talks about it because Paul Keating’s done such an incredible branding job on super, and you’ve got all the super funds who have their snouts at the trough and all the fund managers who get paid billions of dollars.”

Adir: “No taxation without justification. Every time the government is going to take your money, they should make an argument for why it’s better for society to take your money and put it elsewhere than to leave you alone with your money. The thing that’s horrified me about this debate is there are so many people whose starting point ignores this idea of taking half of someone’s money that they’ve earned, and they say, why should you get better treatment for your capital than we get for our wages?”

A deep dive into SkinKandy

SkinKandy, a 15-year-old body piercing and jewellery chain, listed on the ASX last month at a market cap of $245M, raising a upsized $160M at $2.20 a share. The company has 100 stores, does 650,000 piercings a year, and will do close to $90M in revenue this year. Gross margins sit at around 90%. CEO Dane Freeze previously ran Lovisa’s global rollout. Board member Trent Peterson was also involved in Lovisa, Adairs, Dusk, Universal Store, and Shaver Shop.

Adir: “I love this business. Like I think there are so many things to love about this business. This business basically says we’ll pierce your ears and make a ton of money. And by the way, we don’t have to employ extra people to pierce your ears, because we have to employ that person anyway. We’ll sell you jewellery and make a ninety percent margin on that. What does it mean? We buy something for two dollars and sell it for twenty on a piece of cardboard.”

Adir: “This is a business that’s basically running on ninety percent gross margins overall as a business. Like I’ve almost never seen that before. From FY24 to FY25, it grew 39% and grew its gross profit 1% more than that. It’s actually still getting margin expansion at the gross profit line. God knows how they’re doing that.”

Adam: “New stores cost an average $278,000 to open and generate $240,000 in EBITDA in the first year, making for a quick 13.9 month payback. I’ve got stores making $800K EBITDA and it costs them $300K, so you’ve got your payback period of four months for the best stores. These guys don’t need franchisees, they can do it themselves. It’s hard to think while these guys aren’t rolling out quicker. All they need to do is just rinse and repeat. Not just in Australia. You’ve got UK, you’ve got US, you’ve got other countries. Nobody’s done this really anywhere well that I know of.”

Adir: “The reason is it is such an impulse purchase that the more foot traffic in their target demographic they have walking past the store, the more sales they make. And so a big mall, you might not walk past one of their stores. It’s okay, we’ll have two of them to make sure you do walk past.”

Adam: “The CEO spent three years as COO during Lovisa global rollout. So he is the perfect guy to be running this business. I think there’s one where you buy and put in the drawer. You trust Trent and the team to execute again, because they have. I actually didn’t expect to like it as much as I did. I don’t think it’s expensive at 30 times PE at all.”

Adir: “This is my favourite kind of business. It is founder involved, it’s got good management, you can see a great long-term path. I believe in the business, I believe in the leadership, and I believe in the TAM. This to me is a business where you can potentially invest and say ring me in five years and then ring me again in 10 and tell me how the investment’s gone.”

Five other stories worth following:

1. University of North Dakota researchers are testing mobile wastewater treatment for NASA that turns astronaut waste into plant food. With three bioreactors handling toilet, shower, laundry and food waste, it beats Apollo’s moon bags.

2. Quilty says its AI can predict whether scripts will become hits, charging $50 per analysis. But after backing Sydney Sweeney’s Christy over Sinners, its box office crystal ball still looks pretty cloudy for now.

3. Apple is expected to show off a smarter, Gemini-powered Siri at WWDC after years of delays and AI stumbles. For Tim Cook, it’s a last chance to close the biggest gap in his legacy.

4. Pope Leo began a weeklong Spain visit with Mass for 1.2M people in Madrid, the first papal visit there in 15 years, as young Spaniards increasingly return to Catholicism despite Bad Bunny competition.

5. SpaceX is reportedly preparing a blockbuster Nasdaq debut that could value the rocket company at $1.77T, dwarfing previous IPO records and potentially making Elon Musk the world’s first trillionaire this week.

This week’s special drops a deep dive with Matt Heine — the CEO who has spent 25 years turning a bedroom startup into one of Australia’s most remarkable listed tech companies.

• Matt’s father Michael started Netwealth in 1999 from his bedroom. “It was a classic startup story — my old man started it in his bedroom. It was just that the bedroom happened to be in Toorak.” Before Netwealth: frozen dinners for Marks & Spencer in the UK, the Eon FM to Triple M radio roll-up, a listed property company, and an early investment in Seek.

• Matt joined as employee number five, pre-product. His first job: straighten the dropped “e” in the logo. His second: design banner ads in MS Paint for 9MSN. “You’d go on 9MSN and there’d be all these fancy agency ads and then there’d be my banner ads down the side in Times New Roman.” Adam’s note: every other business advertising on 9MSN is now dead.

• Matt bought his first shares at seven — a gold miner. His son has just bought his first shares too. Adir: “Now would be a good time to find gold.”

• IPO’d December 2017 at $3.70 a share. Came close to $10 billion at the pre-SaaS-pocalypse peak. Currently worth around $5.7 billion.

• Adir found the SiteMinder comparison worthwhile: Netwealth went after the 20% of advisors not captured by the big banks — just as SiteMinder went after independent hotels the big chains didn’t bother with. The Royal Commission then turned the entire market into their TAM.

From a bedroom in Toorak to $6 billion — the startup nobody would have backed

In 2001, with fewer than 20 staff and no external capital, Netwealth was competing against Commonwealth Bank, Westpac, AMP and Macquarie — each of them running platform businesses with $80–100 billion under management, and employing thousands of financial advisors who also distributed their platforms.

Matt: “We had never actually raised any external capital. The only money in the business was our family’s. Dad used to sit around the boardroom table, and for a long time people used to call it investing. He would just call it losses.”

The early business was a discount online broker — the cheapest in Australia for years at $9.99. When that channel proved too hard to scale, they pivoted in 2003 to servicing financial advisors — specifically the 20% not employed by banks.

Matt: “We worked really hard. Customers would say, ‘We love what you built, but you don’t have a super fund.’ So we’d go build a super fund. ‘You don’t have insurance.’ So we’d build insurance. For that first five years we really had to pedal very quickly.”

It took 63 months — just over five years — to reach $1 billion under management. That was also, to the month, the point at which the business first broke even.

Adir: “You don’t ask the next question, which is: how much cash do you need to pour into a loss-making business to get to month sixty-three? That’s the question.”

Matt: “We had invested more than we had under management.”

Michael Heine’s motivation for starting again at fifty? He retired for two weeks, tried to be a passive investor for fifteen seconds and hated it. He doesn’t play golf.

It’s a Wrap

Netwealth is a “Wrap” — a layer that sits across all of an investor’s assets and lets a financial advisor manage everything from one place.

Adir: “It’s like a wrapper that goes across the top of everything and lets people, instead of going and finding individual assets, access them all through a single platform.”

The product today lets advisors manage super fund accounts (Netwealth as trustee), SMSFs, trusts, companies and investment accounts. They can buy domestic and international shares across 16 exchanges, managed funds, bonds, term deposits, private markets. Netwealth handles reporting, tax reporting and client access.

On the GFC tailwind nobody expected:

Matt: “There was a shift from advisors leaving the banks and institutions to go independent. And having left the banks, there weren’t actually many independent options for them. Our product was very broad — it was more about ‘we can work with you’ rather than telling you how to do your business, and that was resonating really strongly.”

The Royal Commission finished what the GFC started: it shredded the bank-owned advice model and sent tens of thousands of advisors independent. What had been 20% of the market became essentially all of it.

Why this is nearly impossible to beat

Adam ran through the Hamilton Helmer 7 Powers framework. The verdict: Netwealth has almost all of them.

Scale — obvious. Counterpositioning against the bank-owned model — the original thesis. Brand — built over 25 years with the advisor community. Process power — embedded in 4,000-plus advisor relationships built one at a time.

On regulation as the real moat:

Matt: “It is almost impossible for a new entrant to come into this market now. APRA is not handing out new trustee licenses — if anything they’re trying to consolidate the number of licenses in Australia.

On the flywheel (Matt prefers this to “network effect”):

Matt: “The more customers, the more advisors, the more we can invest into the tech — which creates better outcomes for customers. So you scale and network almost always cross over.”

Adam: “We’ve got almost every power, which is why investors love you guys so much. Almost impossible to beat.”

Matt: “I should come on the pod more often.”

The $1.8 trillion tailwind

Netwealth’s stated TAM is the $1.2 trillion platform market, where it holds 9.7%. But Matt argues that’s the wrong denominator.

Matt: “We’re probably sub-1% when we really look at our actual market share. What a great opportunity to be investing in growth — for what is one of the greatest opportunities I think we’re gonna see in a lifetime.”

The real prize: $1.8 trillion sitting in industry superannuation funds is moving from accumulation into decumulation. Large balances — which Matt said represent 4% of industry fund membership — are actively seeking financial advisors and, when they find one, moving to adviser platforms like Netwealth.

Matt: “All but UniSuper are now in net outflow — and all of the retail platforms are accelerating. That trend has dramatically shifted and it’s accelerating in our favour.”

The model: Netwealth earns 32 basis points on average across all accounts. Every new dollar coming off the industry fund conveyor belt is a potential basis point. Rule of 40 sits close to 70 — among the highest on the ASX.

Adir: “A profitable business with growth potential north of twenty percent — you’d always skew more heavily towards growth. If you play out the numbers, you can’t compare the trajectories over the long term.”

Matt: “Is our margin 50% or 49% or 48%? It doesn’t actually matter in the long term when you’re growing at 20% plus.”

30% more engineers without hiring a single one

Netwealth has around 1,000 staff, 400 of them in tech and product. Matt is targeting 30% efficiency gains across the team within 12–18 months — the equivalent of adding 100 engineers without adding a headcount.

Matt: “It’s not about cost out. This is about how we flatten the growth of headcount — so we’re not having to hire however many people every year. The point at which we can automate a process or find efficiency through AI, we move those people onto the next thing.”

On token costs

Matt: “I’m still getting over the shock of just our bills, and how quickly they’re growing. I’ve started hiring junior developers again because my token count’s too much. We’re doing this full circle.”

Adam: Luxury Escapes is spending $3 million annualised on AI — and they’re a much smaller team. Matt declined to confirm a number for Netwealth.

Matt: “There are different ways to code that use one-fiftieth of the tokens. That’s really where the focus needs to be.”

The destination: open-source model retraining, hybrid on-premise infrastructure, and a reversal of the ‘everything to cloud’ orthodoxy that defined the last decade.

Adir: “AI costs drive cloud costs. It’s a vicious cycle.”

Matt: “Microsoft’s the winner.”

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The Contrarians catchup

• Adam and Adir debated the OpenAI comeback narrative after Codex launched as a competitive developer tool. Adam: “I’m far more bullish on OpenAI now than I was a few months ago. Could it be a $500B business? Like if Anthropic’s making $500M now and the way it’s scaling, Anthropic could be making $20B a year pretty soon.” Adir: “I wrote them off. I’ve written them off.”

• Adir discovered that Coles resets Curtis Stone loyalty credits between promotions, wiping his 30 leftover fry-pan credits when glassware launched. “Don’t you think that is a bad customer loyalty move? How could they not retain the credits and give you some feeling that you’re invested in portfolio?”

• The guys dissected Sexyland, a private retailer with 17 stores doing $36M in revenue and $4.5M EBITDA. Adam: “Usually great margins with adult stuff.” Adir: “It’s much less profitable than I expected.”

• Richard Goyder is stepping down from Woodside. Adam: “This should have happened a couple of years ago. But no one goes forever.”

• Lime bikes network effects debate, continued from last episode. Adir brought in outside confirmation from his friend Tel Aviv: “Way more people using Lime means the person that uses it and lives a bit further north, they go and leave it further north. And then when I want to get the bike further north, I can. That is a network effect.”

The budget: the housing minister undercuts her own government

Housing Minister Clare O’Neil gave an interview in which she appeared to directly contradict the government’s stated rationale for the CGT and negative gearing changes. The guys argued she inadvertently dismantled the entire policy in a single sitting.

Adir: “She said the tax system should not create and drive investment decisions for people. At one point I thought it is possible that these Labour politicians periodically visit planet Earth, at least for a coffee. But that demonstrates that she hasn’t been here for a very long time. Because tax treatment is a huge driver of capital, of profitability.”

Adir: “Her argument is basically that, contrary to Anthony Albanese and Jim Chalmers’ pitch that this is designed to make the asset class of housing less attractive to investors, her pitch is no, no, no, no. It’s not. This tax will not make any asset class more or less attractive than any other asset class. It’s a complete undermining of the whole argument. And the journalist did not ask her a single question about this.”

Adir: “You’ve got a situation now where not only can they not explain the tax, but you’ve got a senior minister, a minister for housing, undermining the housing fundamentals that are stated as being the core idea of the policy.”

Adir: “Treasury Secretary Jenny Wilkinson came out and said there is no clear evidence that these tax changes will be detrimental to capital investment and capital flows in Australia. That is not a lie, but that is a political statement. The truthful statement is this: there is no clear evidence either way. However, there is strong evidence that these type of tax changes reduce the amount of intellectual property and patents registered by countries and significantly reduce venture capital investment. That’s the honest answer.”

Adam: “She should be a non-politicised neutral. Disgraceful. I think she should be fired, but she’s doing the bidding of the people who should be firing her.”

Special guest: Frank Greeff on the ALBO meme and the SMH hatchet job

Frank Greeff co-founded Realbase with his brothers, growing it from a four million dollar services business to a $180M exit. He created the viral “ALBO co-founder” meme after the budget and was then targeted by a Sydney Morning Herald piece that implied he had not shared equity with his team.

On first hearing the budget:

Frank: “We had been having this incremental momentum in the right direction. The VC markets in Australia had been growing. More and more young people that I’d been meeting were keen to get into the world of founding businesses.”

On the meme going viral:

Frank: “I started getting messages about like how this is ricocheting in the politicians’ world. Getting reached out to by so many media establishments. Hearing from politicians going, oh my gosh, this thing is going crazy in the four walls of Canberra. And that was like a little bit weird and wonderful. But let’s be honest, a lot of media is trying to cling on, trying to hold on to their once glory days. And so something that’s going off on social media, they’ll certainly jump onto and grab.”

On the SMH article:

Frank: “I received maybe on Wednesday last week a list of questions from the journo and immediately I was like, okay, there is a hit piece coming for me. Because the questions were all related specifically to me and the context of the business. It felt very different to the rest of the questions that any other journalists had sent me that week. Those were all like, what’s your view on this thing? These were all about me.”

Frank: “We started the business when we were 20 years old. I was a chef. My brothers had never had jobs or bosses and we had no idea what it was like. People have asked, how come you didn’t have a sophisticated ESOP? It’s like, we didn’t even know what an ESOP was. So when we gave out shares, it would just be straight equity and you just transfer shares to that person. The key is, okay, you learn a bunch of lessons and then you go, what do I take from those lessons to apply to the next? And that’s why the critical piece for me was in our new business, I know about an ESOP. Ten out of eleven people have ESOP and all the right structures.”

Adam: “A quarter of Frank’s staff had equity, which is a very high ratio. More would have been offered. Probably half would have been offered and a quarter took. That’s up there with anyone in Australia. So the whole framing that Frank and his brothers were villains for not giving equity is just a complete stuff up.”

Adir: “I really encourage you not to be dissuaded by this and to keep speaking. Because I think your voice is measured and it’s smart and it comes from a place of personal experience. It is every citizen’s right to be able to speak freely about things that the government is doing. And you were not even abusive or insulting.”

Anthropic: the fastest growing business in history

Anthropic raised $65B at a valuation of $965B, led by Altimeter Capital and joined by Dragoneer, Sequoia, D1, Bailey Gifford, Blackstone, Brookfield, and Fidelity. Revenue is reportedly doubling to $10.9B in Q2, having gone from $100M ARR in late 2023, to $1B a year later, to $4B six months after that, to roughly $10B now.

Adam: “10x, 10x, 8x. That is just unbelievable. In the first quarter this year, Anthropic spent 71 cents on computing power for every dollar. It’s down to 56 cents. That’s some real scale. That’s obviously why they’ve turned profitable. I’ve never seen a business grow like this.”

Adir: “I don’t think a business ever has grown like this. That’s why. Yeah, this is the first time ever. The question is, what would make it worth a trillion dollars? If a business was growing at 30% and making $20-30B in NPAT, you could probably say, that feels like a trillion dollar valuation.”

Adam: “If you want an LLM exposure, it’s gotta be Anthropic, which is why all these smart funds are doing it. They can’t afford to miss out because it could 2-3x. Anthropic’s now more valuable than OpenAI. Anthropic was like a tenth the valuation of OpenAI a year ago. It is now more. I’ve never seen a business grow like this.”

Adir: “A trillion dollar valuation is not ridiculous for this business in the way it is for Elon’s businesses. You can see how this could be worth that. There’s not many of these to get into, maybe at the moment there are two. And if you want to get into one of them, you pay the price.”

SpaceX IPO: $80B raise, $2T valuation, and mostly hot air

SpaceX lodged its prospectus with the SEC to raise $80B in June, eclipsing Saudi Aramco’s $26B as the largest IPO in history. Revenue was $19B in 2025, up 33%, but the company lost $4.94B, kept alive by $26B in financing. Starlink, responsible for $11B of the $19B in revenue, is the only profitable segment. XAI consumed $5.6B in capex.

Adam: “SpaceX is essentially an internet service provider that also explores space. The company’s extraordinary ambitions are fuelled by a much more ordinary product. The only way they can keep going is by doing this IPO. Clearly out of cash.”

Adam: “Starlink’s a great business. Two to three hundred billion dollar business? Because there’s so much TAM. Every plane will have it, every boat will have it. Anyone in rural areas. Caught three, four hundred billion combined with SpaceX. But xAI is burning seven, eight, nine billion dollars a year.”

Adam: “The kernel of truth here is Elon is a generationally incredible entrepreneur. He’s responsible for bringing electric cars into the mainstream. He’s responsible for Starlink. SpaceX is unbelievable. That doesn’t mean his companies should be worth 3.5 trillion. That’s where the brilliance of Musk has completely detached from any kind of financial reality.”

Adir: “The era we’re living in is kings have been replaced by corporate tyrants. All of the capturing of countries, unless you’re Vladimir Putin, that inclination in human beings hasn’t disappeared, it’s just been replaced by corporate activity. And you’ve got large percentages of the population in Western countries that see no linear way to make any amount of money that lets them buy a house, but they see Elon, and these are like their own kind of savior. Someone who can bring self-financial salvation to people who otherwise couldn’t get there.”

Adam: “We’ve got an Elon premium of 600% here. This is at best a $500B business being valued at $3.6T.”

CTM: the car has driven off the bridge

Corporate Travel Management entered safe harbour, with directors refusing to sign a declaration that the company is solvent. Lenders including HSBC, CommBank, and Westpac are being asked for access to an additional $35M, without which CTM cannot pay the UK government’s $178M. The AFR obtained a confidential presentation to lenders described by attendees as “deeply uncomfortable.”

Adam: “Apparently the stumbling block is that lenders are demanding directors sign a declaration that the company is solvent, which the board is unwilling to do. Which kind of says it all really. The board’s unwilling to stand by the solvency of this business.”

Adir: “We’re watching a huge car accident in slow motion. All we’re seeing now is bits of the car flying in every direction as we watch the crash. What we don’t know is whether it’s a fatal crash or not.”

Adam: “My view is the car’s driven off the bridge and landed a hundred meters below in the river and you think, oh, this guy could still be alive. Pretty sure the guy’s dead.”

Five other stories worth following:

1. Typical CEO pay rose 5.9% to $17.7M in 2025, with median workers needing 200 years to match one year of CEO earnings. Welltower’s Shankh Mitra topped the list at $821.1M annually, an enormous gap.

2. Pop Mart’s website traffic has fallen since the holidays, suggesting the Labubu craze may be cooling, though some shoppers may have shifted in-store. Retailers say adult-focused blind-box toys remain influential across the category overall.

3. Chinese startup LinkerBot shipped 10,000 robot hands in 2025, meeting 80% of global demand. Its dexterous hands start at $600, but founder Zhou Yong expects prices to hit $200 within five years.

4. Berkshire Hathaway will buy Taylor Morrison Home for $6.8B in cash, adding site-built housing alongside Clayton Homes. Incoming CEO Greg Abel says the deal could expand homeownership and eventually combine operations.

5. The Trump administration may require USMCA-covered vehicles to contain 50% US-made components to access lower tariffs. Tesla appears best placed to qualify, with its cars already averaging 84% US content.

The Contrarians catchup

This week’s drop is a special bonus deep dive, replacing the usual Saturday Ask Us Anything. Adam and Adir are joined by their good friend Scott Middleton from Terem Capital — the software and tech-services fund that Scott has been building into one of The Contrarians’ favourites.

• Scott rolled in fresh off a huge win. “This past month we locked in our first 10 bagger. So we’re pretty happy with that one, and that’s a really active investment, not a passive one.”

• Terem’s hunting ground: $1–10M revenue software and technology services companies, mostly Australian, mostly active rather than passive.

• Adam: a 10x in this market for asset sales is “pretty incredible… it is stiff, tough out there.”

• Adir attempted to claim partial credit for the Kangaroos’ tear-jerking weekend win. Adam was unmoved.

• The real reason for the special: Adam, Adir and Scott wanted to deep dive SiteMinder (ASX: SDR) — a stock the three of them think the market has fundamentally misread.

The below is NOT investment advice.

What SiteMinder actually does

SiteMinder is a channel manager. If you’ve ever booked a hotel through Booking.com, Expedia, Trip.com or Luxury Escapes, you’ve used a SiteMinder-style middleware without knowing it. It sits between a hotel’s property management system (PMS) and the dozens of online travel agents that want to sell its rooms.

Adam: “Effectively it acts as a traffic controller between the hotel systems — what’s called a PMS — and travel booking websites like Booking.com.”

Adir: “I own a hotel and some people are gonna book. So I’ve got software inside my hotel that runs my hotel — that’s the PMS. But now I need people to book my hotel. If I’m a boutique hotel, probably most people are not gonna come and book directly… I need plumbing that pumps it all in there and a smart system that keeps it right. That’s what this business does.”

Where it sits in the market:

The enterprise tier (Marriott, Hilton, Accor, IHG, Hyatt) uses DerbySoft, which is a different beast. The mid-market (Shangri-La, Peninsula) tends to use SynXis or TravelClick. SiteMinder sits below all of that — boutique and independent hotels, B&Bs, anything roughly under 200 keys. About 650 integrations, ~53,000 customers, and the smaller boutiques use the Hotelier product, which Scott described as “the Shopify of hotels.”

Why this is hard to vibe code your way around:

Scott: “There’s a great framework I came across from a venture capitalist in the States — the eight moats around AI. Workflow, data, scale, ecosystem, regulation, distribution, network, and physical. When I look at this business, the ecosystem that it has with those 650 integrations — none of the large language models can do that, because you’ve got to go and sit down with someone from Hyatt, you’ve got to go sit down with someone from there. You’ve got to get access to the API.”

Adam: “You can’t just rock up to Hyatt or Hilton or Marriott or Accor and say, give me a connection. They’ll laugh at you. Wait in line, wait ten years.”

Two businesses, one go-to-market

SiteMinder used to be a pure subscription channel manager. Over the last five years it has bolted on a transaction business — payments, a hotel-side website builder, a mini-PMS for very small operators, and “Smart Pay” sitting underneath the whole thing. The transaction business is now growing 39% half-on-half; the subscription business 18%; revenue per user up 23%; revenue on platform up 12%; churn around 1% per month.

On COVID and stickiness:

Adir: “The crazy thing we experienced at Catapult — people stopped playing professional sport. Stopped. Who could ever imagine that? For years I used to say Catapult’s essential. I didn’t know if that was true — it was a good narrative. And then COVID came, no one was playing sport, and nobody cancelled their subscriptions. They fired staff. They didn’t cancel the subscription. I’m like, oh my god — I was telling the truth.”

Scott: “If there’s a piece of software you subscribe to that is essential to your organisation running and bringing revenue in the door, you’re not turning it off.”

The numbers nobody is reading

H1 FY26 results: revenue from $104M to $131M, statutory loss reduced from -$13.3M to -$4M. Cumulative reported losses since inception of $662M.

Adir: “Those retained losses — some shares have a massive $400M reserve on the balance sheet. I think they had convertible notes, and as the value of the company rose, the value of those convertible notes rises. Like employee equity. So I think they’ve more likely lost 200 or 250 mil. My point is more — it’s lost all that money, and now it’s basically at breakeven.”

Scott: “If growth kind of continues the way it’s going, they could be posting a profit this half.”

On reporting honesty — the bit Scott picked apart:

Scott: “I got a bit excited reading this one. Finally there’s some decent SaaS metrics in the opening. The LTV to CAC ratio was nice to see. Not everyone puts it in.”

Scott: “But then I got upset when I came to the way they talk about annual recurring revenue. And then under that, they have transaction revenue. That is not ARR. Even in their own definition, it says this only occurs when a transaction takes place. There was an ASX company two or three years ago that treated it like this — and when COVID happened, everyone stopped sending SMS, and their ‘recurring’ revenue fell off a cliff.”

Adir: “ARR is an unnecessary metric for this business. They have subscription revenue. They have usage-based revenue. The dream business is a subscription business that jacks up its revenue also with usage-based. That’s a great combination — they don’t need ARR as a metric.”

What’s the EBITDA tho?

SiteMinder claimed adjusted EBITDA of $11M for the half. Strip out roughly $15M of capitalised R&D (i.e. the cost of the people who built the software, parked on the balance sheet as an intangible) and the honest number is negative $3M.

Adir’s case:

Adir: “EBITDA — earnings before interest, that’s loans. Tax, money you pay the government to get no services. Depreciation — reducing value of tangible assets. Amortisation — reducing value of intangible assets. One of those intangibles is the tech developers you employ. They build software. You can’t just expense it, because it lasts a while, so it goes on the balance sheet. And then it hits the P&L as amortisation. But EBITDA excludes amortisation. So if you’re going to trumpet EBITDA, fine — but if you’re going to really factor in what it took to run the business, you’ve got to put in all the money you paid those staff this year.”

Adam’s pushback:

Adam: “Xero does exactly the same thing. WiseTech does it. SaaS does it. Just because other people are doing it I’ll put it in a good article — but I don’t see why these guys are any different. When you’re making $100M and you’ve got $20M in those extra costs, people kind of just look at the net profit.”

Scott referees:

Scott: “It’s not that Adam’s wrong. It’s common. Everyone does this. It comes down to R&D and the way R&D is treated. R&D being included above the line as income, getting money from the government — that’s a handout. This should be a tax offset, not revenue.”

Adir: “Basically, you’re right. It should be in the line. Like a tax. It shouldn’t be in revenue — it should be a reduction in expenses.”

The takeaway: ignore the adjusted EBITDA number. SiteMinder also publishes cash EBITDA, which leaves the R&D spend in. That’s the honest number, that’s the one to anchor to, and it’s the one Adir is comfortable with for FY26.

The bull case at $750M

SiteMinder IPO’d in November 2021 at $5.06, hit $7.10 days later (market cap ~$2.2B), fell to $2.96, rallied to $7.68 in October 2025, and has now been smashed in the broader “SaaS-pocalypse” to a market cap of $796M — an all-time low as a listed entity.

Adir: “This is why you can’t let the stock market shape your sense of self-worth.”

On what insiders did at IPO:

Adir: “There was, like, $500M plus taken off the table at the IPO by insiders. If you add Les Szekely’s sell-down to that, they’re almost at one times their current market cap on insider sell-down alone.”

On the SaaS-pocalypse mispricing:

Adam: “The actual SaaS part of this has almost no churn. You’re not gonna vibe-code something that costs you $200 a month, and you can’t vibe-code it because it’s actually too complex. The other part is transactional revenue, which isn’t really SaaS at all — it’s like a credit card processor. Visa and Mastercard haven’t been hit. So SaaS-pocalypse should not have impacted this business.”

What it could earn

Roll forward the H1 numbers and you get a plausible FY26 cash EBITDA of around $20M and an FY27 NPAT in the $20–30M range.

Adir: “If you had the same valuation as today, by the end of FY26 you’re looking at probably 30 times forward NPAT. That’s not crazy for a business like this at all.”

Scott: “I go straight to margin of safety. I don’t think it’s cheap today — you’re paying a forward multiple.”

Adir: “If they produce results at the end of this fiscal year that are just consistent with consensus, the market will remember — hang on a second, what the hell were we selling this off in the SaaS-pocalypse for?”

The verdict

Three buyers in the room.

Adam: “I’m actually a buyer of this business at this price.”

Adir: “I’m a buyer. At this price. I would buy this twice. Not investment advice.”

Scott: “Yeah. Buyer.”

The risks they could find: a deepening Middle East conflict that suppresses global travel, a US tourism slowdown (already happening — APAC has now been overtaken by EMEA, and US growth is decelerating “mostly the Trump effect”), and the cyclicality risk that grows as the business leans further into transactions. Nothing that would obviously halve the share price from here.

So we end with a rarity - not only something The Contrarians agree on - but a stock they’d all buy as well.

Not investment advice.

There can be no better example of how our tax system damages young people’s financial future than the argument this week between Treasurer Jim Chalmers and The Daily Aus podcast.

That argument centred on the percentage of young Aussies who currently own shares. Chalmers’ quoted Treasury numbers that report 10%, The Daily Aus used survey numbers that are closer to 20%.

To be fair, Chalmers is probably right. But the debate is a sideshow because the real question is this: why are aren’t all young Aussies able to invest in shares or other assets to grow their wealth?

And the answer is very simple. They have no money left to invest after the government extortionately taxes their wages. The tax rates on income in this country leave young people, and older middle-class earners, without any spare money to invest.

It is our ridiculously high income tax rates that cause the most damage to wage earners in Australia.

The top tax rate in Australia is 47 cents in every dollar once the Medicare tax is included, and it kicks in at $190,000. That may sound high to many Australian wage earners, especially younger ones. But it is less than twice the average full-time adult salary. Not that long ago, the top bracket started at three times the average.

Let’s compare it to some other countries. In the UK the top rate is 45c and it starts at more than three-times the average wage. In the US it’s 37c (although there can be some state taxes) and it starts at over US$600,000 which is over ten times the average. In Singapore it’s a maximum of 24c but you need to be making one million Singapore dollars! Even in NZ caps their rate at 39c and while it commences in at NZ$180,000 that’s still 2.6-times the average salary.

So, Australia has a higher top income tax rate that starts at a lower relative salary. As a result, Australia is much more reliant on income taxes than the average across the Organisation for Economic Cooperation and Development (OECD). In fact, Australia is close to twice as reliant! It feels confiscatory to work so hard and keep so little.

Consider that around ten percent of all workers are sitting at the 39c or more bracket, which is about 1.5 million Australians. That is far too many and most are certainly not wealthy.

Even worse, a person earning $60,000 is deep into a tax bracket taking 32 percent of every dollar they earn. This wage is significantly below the average, and in other countries people earning this relative equivalent would be in much lower brackets: UK at 20%, NZ at 17.5%, US at 12% (federal taxes), and Singapore at 7%.

The CGT debate is a huge straw man because the fundamental problem crushing young and middle class wage earners in Australia today is not the capital gains benefits. It is not even the negative gearing benefits that are distorting and elevating Australian house prices.

It is the inordinately high income tax rates that have been exacerbated by a lack of inflation indexing. And this in turn is further worsened by the increasing government spending that drives inflation even higher.

Inflation is a global problem, but the combo of excessive government spending and high income tax is a major cause of the current cost-of-living crisis amongst wage earners right now.

Increasing the quality of life of young Australians whilst also increasing productivity can both be simultaneously achieved via a significant reduction in income tax. Leave more money in the average wage earner’s pocket.

Of course, there will also need to be spending cuts to facilitate an income tax reduction. Other parts of the tax system will also need to be modified. Our GST is about half the average of the OECD, which is also why state-based payroll taxes still exist. But that is a discussion for another time.

Reducing income tax rates will leave young Australians with enough money to buy capital assets, hopefully including a primary residence as well as shares and other investments.

We should not be debating capital gains tax by arguing about whether 10% or 20% of young Australians will be impacted by it.

Rather, we want that debate to include the vast majority of young people, who will have the funds available to invest more purposefully for their own financial future. That requires income tax reform.

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The Contrarians catchup

• Big news: Will Hayward has come on board as co-founder and CEO of The Contrarians Co. Will brings a career spanning The Wall Street Journal, The Economist, and BuzzFeed UK, and most recently helped save Private Media from near-collapse.

  • Adir: “I said to you, it feels like this pod is reaching quite a large number of people, but I feel like it could be something much bigger. And we should get the best person in media to come in and build this out as a media business.”

  • Will: “I look at The Contrarians and I think, could I imagine this being a much bigger thing? Could I imagine this being something that’s got hundreds of thousands of listeners and we take it on the road and it’s got a great subscription product? Do I think that the way you two talk about business is something that a lot of people get value from? Like, absolutely.”

• Adir went to see physicist Brian Cox at the Melbourne Convention Centre. His take on the economics: “He’s got 500,000 people on this tour. Let’s just say $100 USD. He’s making 50 million. And he’s got to be keeping half. It turns out that’s how he makes like a hundred million dollars by being a physicist. It’s actually an incredible bit of physics.”

• Luxury Escapes held its first live event at the Melbourne Exhibition Building, attracting over 13,000 people against an aspirational target of 10,000. Adam: “I think we can do 20,000 next year.” The event was followed 24 hours later by Luxury Escapes’ first Maldives charter flight, which was essentially full.

• Australia Post has a billboard in Albert Park that just reads “Delivering for 3206.” Adir: “Basically the question is, what happened that they needed to implement this? Does the ambulance advertise saying when you have a heart attack, we’ll come and get you? No, because there’s not a lot of competition. This is how they’re spending their money when they’re cutting services.”

• Will’s take on the future of media: “The central unit would not be a website and a masthead. No one’s going out and setting up a thing and saying, look, this is the new version of The New York Times. The central unit would be a pod. What people want to hear is things that they wouldn’t be able to hear elsewhere. The hosts need to be opinionated, which obviously is pretty tough for Adam, but we’re doing our best to kind of encourage them.”

The budget: six days later, it’s still a disaster

A full debrief on the Albanese budget. Both Adam and Adir remained scathing, widening their analysis beyond founders to the full picture of intergenerational inequity embedded in the changes.

On who the real winners are:

Adam: “If you look at all these advantages, the primary residence exemption remains. The negative gearing remains if you own the assets, which of course you have to be old to own already. And people get their CGT value grandfathered. Every single thing has been tilted. We already had the most unfair tax system you could imagine for older people. And they just made it worse.”

Adir: “Retirees have long structured their financial affairs to qualify for an aged pension and get access to a lucrative pension concession card. This provides discounted doctor visits, medication, utility bills. Bear in mind, 63% of Australians over 67 get the pension. So it’s not like it’s a few people, it’s the majority of old people get it.”

On the super loophole:

Adir: “Super all of a sudden has a totally changed risk profile because of these tax changes. If you want to go and invest in riskier assets that are more likely to generate higher growth, but also might lose your money, the only logical place left to make that investment is inside super. Any asset that grows substantially over a period will be taxed at a higher rate of tax than a poorly performing asset. It’s pretty absurd really.”

On how much it will actually raise:

Adir: “Thirty-five percent of capital gains tax in Australia is paid by 1% of transactions. Whatever the government has forecast it is going to collect from these new taxes, it will be collecting much less than that. Because people will rearrange their tax affairs and not pay. People just won’t sell. They’ll just borrow off their holdings.”

On the path to recession:

Adir: “Australia has 1.1% GDP growth at the moment. It’s going backwards in real terms. Inflation is 5%. There’s increased spending. Unemployment’s just gone up. Property prices are going to go down. Rent is going to go up. What I suspect is going to happen in two years’ time at election time is there’ll be a massive cost of living crisis with people not finding places to rent and possibly a recession.”

On what they should have done instead:

Adam: “If you’re gonna tackle intergenerational inequality, do it properly. Put some tax on the primary residence, not 50%. Get rid of negative gearing completely, not the grandfather garbage they’re doing. Actually make it fair so older people don’t have these benefits. There’s so many things they could have done that actually would have been brave, harsh moves that may you or I may not have liked, in terms of personally, but were the right thing to do. This is the wrong thing to do and it targets the wrong people. Targets the young, not the old.”

GYG is a masterclass in knowing when to quit

Guzman Y Gomez co-founder Stephen Marks announced the closure of its US operation, just months after claiming it was on the verge of a breakthrough. Investors sent shares up 26% in days, with the market cap back above $2B. RBC analyst Michael Toner had noted the US business was not expected to break even until 2037.

Adir: “I will say something very positive about Stephen Marks. CEOs often fall in love with their own ideas, and the more that people disagree with them, the more enamoured they become. He accepted the reality. That’s very hard to do. He’s been very honest about it. He’s done this mea culpa that said we’ve made lots of mistakes, this is one of the mistakes, I’m shutting it down. Founders can look at the way he’s handled this for some lessons.”

Adam: “He gave it a real shot, which is great. He copped the personal fallout, and then eventually it became so obvious he had to pull out. The short-term vicissitudes of the market shouldn’t be determining your business strategy. I think he gave it a real shot.”

Adir: “GYG is more profitable for franchisees than McDonald’s in many cases. As long as your franchisees are making money, you’ve got plenty of TAM because you just pop up new stores. If your franchisees are making two and a half, three million bucks at a GYG store, that’s unbelievable.”

Adir: “If you really believe in this business, you think it might 5x plus off the IPO price, maybe more. Form a view, have a thesis, invest in it. And unless something changes with the thesis, like the founders leave or they do something crazy, I think you should just form a thesis on the business and the founder.”

EY parental leave clawback: sensible policy, woke outrage

EY announced it would require employees to repay two months of their six-month parental leave if they resign within a year of returning. The move was immediately condemned by commentators including Carol Schwartz, who called it “a conditional loan.” Adam and Adir had a different read.

Adir: “I play this game with my kids, we find funny signs and we have to say, what happened for them to need this sign? There’s no sign without some disaster that preceded it. Basically the question is, what happened that they needed to implement this policy? Like it didn’t come out of nowhere. Obviously this was some kind of problem.”

Adam: “Carol Schwartz claimed that if people are walking out within a year of returning from parental leave, something’s broken. That may be the case, but much more likely is someone’s gone, show me the incentive. I can get my six months pay. I can get a bigger pay rise at PWC across the road. I’m just going to get paid double. That’s what that does.”

Adam: “We have a clawback by the way, hundred percent. I’ve only used it once. But do you have a return-to-work bonus? Because I actually like supporting working women. I don’t give people a payment not to work, a payment to work. So you come back to work, we’ll give you a bonus.”

Five other stories worth following:

1. Oil slid and global stocks rose as investors bet the US and Iran are edging toward a deal to end the war, reopen Hormuz, and ease energy-driven inflation pressure across markets in recent days.

2. The UN cut its 2026 global growth forecast as the Middle East energy shock drives oil, gas and inflation higher, with developing economies most exposed and Europe facing especially weak growth through 2026 overall.

3. Kevin Warsh has taken over the US Federal Reserve as inflation, gasoline prices and Treasury yields climb, tying Trump’s economic credibility to a divided central bank with limited room to cut rates decisively anytime soon.

4. Pope Leo XIV used his first encyclical to demand tougher AI regulation, warning autonomous weapons and corporate concentration could destabilise society, while Anthropic’s Chris Olah said oversight must extend well beyond Big Tech itself.

5. Russia and Ukraine traded fresh missile and drone strikes after one of Moscow’s heaviest attacks on Kyiv, killing civilians, damaging infrastructure and showing US mediation has failed to meaningfully reduce battlefield escalation this week.