Welcome to the world according to Boyer,Welcome to the world according to Boyer, where we bring top investors,where we bring top investors,where we bring top investors, best-selling authors, and businessbest-selling authors, and businessbest-selling authors, and business leaders to show you the smartest ways toleaders to show you the smartest ways toleaders to show you the smartest ways to uncover value in the stock market. I'muncover value in the stock market. I'muncover value in the stock market. I'm your host, Jonathan Boyer.your host, Jonathan Boyer.your host, Jonathan Boyer. The following is provided by Boyer'sThe following is provided by Boyer'sThe following is provided by Boyer's Intrinsic Value Research and is forIntrinsic Value Research and is forIntrinsic Value Research and is for general informational purposes only andgeneral informational purposes only andgeneral informational purposes only and should not be construed as investmentshould not be construed as investmentshould not be construed as investment advice. Any opinions expressed hereinadvice. Any opinions expressed hereinadvice. Any opinions expressed herein represent current opinions of Boyerrepresent current opinions of Boyerrepresent current opinions of Boyer Research only. Boyer Research assumes noResearch only. Boyer Research assumes noResearch only. Boyer Research assumes no obligation to update or revise suchobligation to update or revise suchobligation to update or revise such information. Investing in securitiesinformation. Investing in securitiesinformation. Investing in securities involves risk, including the possibleinvolves risk, including the possibleinvolves risk, including the possible loss of principal. Past performance doesloss of principal. Past performance doesloss of principal. Past performance does not guarantee future results. Employeesnot guarantee future results. Employeesnot guarantee future results. Employees of Boyer Research or clients of anof Boyer Research or clients of anof Boyer Research or clients of an affiliate may own shares in any companyaffiliate may own shares in any companyaffiliate may own shares in any company discussed.Bill Ackman joined The World AccordingBill Ackman joined The World According to Boyer to discuss the Howard Hughesto Boyer to discuss the Howard Hughesto Boyer to discuss the Howard Hughes transaction, but this conversation wenttransaction, but this conversation went
transaction, but this conversation went far beyond just investing. Given hisfar beyond just investing. Given hisfar beyond just investing. Given his reputation as not only one of the mostreputation as not only one of the mostreputation as not only one of the most successful investors of our time, butsuccessful investors of our time, butsuccessful investors of our time, but also a vocal figure on a range ofalso a vocal figure on a range ofalso a vocal figure on a range of controversial issues and a socialcontroversial issues and a socialcontroversial issues and a social activist, I saw this as a greatactivist, I saw this as a greatactivist, I saw this as a great opportunity to not only discuss theopportunity to not only discuss theopportunity to not only discuss the deal, but also explore his broaderdeal, but also explore his broaderdeal, but also explore his broader perspectives.perspectives.perspectives. I'm a firm believer in free speech andI'm a firm believer in free speech andI'm a firm believer in free speech and the value of hearing differentthe value of hearing differentthe value of hearing different viewpoints, whether I agree with them orviewpoints, whether I agree with them orviewpoints, whether I agree with them or not, because that's how real learningnot, because that's how real learningnot, because that's how real learning happens. You may strongly disagree withhappens. You may strongly disagree withhappens. You may strongly disagree with some of Bill's views or you may findsome of Bill's views or you may findsome of Bill's views or you may find them thought-provoking. Either way, Ithem thought-provoking. Either way, Ithem thought-provoking. Either way, I believe understanding differentbelieve understanding differentbelieve understanding different perspectives is essential, especiallyperspectives is essential, especiallyperspectives is essential, especially when dealing with complex andwhen dealing with complex andwhen dealing with complex and emotionally charged topics. With thatemotionally charged topics. With thatemotionally charged topics. With that said, let's get to the episode. I hopesaid, let's get to the episode. I hopesaid, let's get to the episode. I hope you enjoy the conversation.Bill, welcome to the show.Bill, welcome to the show. Thank you so much.Thank you so much.Thank you so much. Thanks for being here. I know you'reThanks for being here. I know you're
Thanks for being here. I know you're here to discuss your proposal tohere to discuss your proposal tohere to discuss your proposal to increase your stake in Howard Hughes.increase your stake in Howard Hughes.increase your stake in Howard Hughes. That's the main part, but I love toThat's the main part, but I love toThat's the main part, but I love to spend some time just talking about somespend some time just talking about somespend some time just talking about some other issues that you've been quiteother issues that you've been quiteother issues that you've been quite vocal on that I think are reallyvocal on that I think are reallyvocal on that I think are really important. Of course, happy to. Let'simportant. Of course, happy to. Let'simportant. Of course, happy to. Let's start with something non-controversial,start with something non-controversial,start with something non-controversial, politics. We're about a month into thepolitics. We're about a month into thepolitics. We're about a month into the Trump administration. At this point, itTrump administration. At this point, itTrump administration. At this point, it feels like a year. What are yourfeels like a year. What are yourfeels like a year. What are your thoughts so far?thoughts so far?thoughts so far? I would say as expected and I think aI would say as expected and I think aI would say as expected and I think a lot has been accomplished very quickly.lot has been accomplished very quickly.lot has been accomplished very quickly. I've not seen more energy, speed ofI've not seen more energy, speed ofI've not seen more energy, speed of execution, and evidence that what heexecution, and evidence that what heexecution, and evidence that what he campaigned on he's going to execute on.campaigned on he's going to execute on.campaigned on he's going to execute on. I think according to plan, maybe even toI think according to plan, maybe even toI think according to plan, maybe even to a greater degree than anyone coulda greater degree than anyone coulda greater degree than anyone could possibly have expected.possibly have expected.possibly have expected. Is there anything that he's done inIs there anything that he's done inIs there anything that he's done in particular that you're this is great,particular that you're this is great,particular that you're this is great, he's gotten it right, he's nailed it?he's gotten it right, he's nailed it?
he's gotten it right, he's nailed it? There's certainly things like gettingThere's certainly things like gettingThere's certainly things like getting hostages home, which began, you know, ahostages home, which began, you know, ahostages home, which began, you know, a week or two before he took office andweek or two before he took office andweek or two before he took office and his approach there, the results speakhis approach there, the results speakhis approach there, the results speak for itself. That's clearly somethingfor itself. That's clearly somethingfor itself. That's clearly something where a lot of time passed and with awhere a lot of time passed and with awhere a lot of time passed and with a few strong words from the president, thefew strong words from the president, thefew strong words from the president, the hostages started coming home. I thinkhostages started coming home. I thinkhostages started coming home. I think that's a major, majorthat's a major, majorthat's a major, major success story. I think sticking with thesuccess story. I think sticking with thesuccess story. I think sticking with the Middle Eastern geopolitics, Iran was onMiddle Eastern geopolitics, Iran was onMiddle Eastern geopolitics, Iran was on the brink of launching a major attack onthe brink of launching a major attack onthe brink of launching a major attack on Israel. They were putting out campaignIsrael. They were putting out campaignIsrael. They were putting out campaign videos showing ballistic missilesvideos showing ballistic missilesvideos showing ballistic missiles soon to be launched against the country.soon to be launched against the country.soon to be launched against the country. Iran went very, very quiet as soon asIran went very, very quiet as soon asIran went very, very quiet as soon as Trump won the election and things haveTrump won the election and things haveTrump won the election and things have beenbeenbeen much, much quieter in the Middle East.much, much quieter in the Middle East.much, much quieter in the Middle East. I think the US has kind of reassertedI think the US has kind of reassertedI think the US has kind of reasserted its authority as a strong powerits authority as a strong powerits authority as a strong power globally. Trump, you know, he said heglobally. Trump, you know, he said heglobally. Trump, you know, he said he would end it, bit of hyperbole, end the
would end it, bit of hyperbole, end thewould end it, bit of hyperbole, end the war in Ukraine in a day, but I thinkwar in Ukraine in a day, but I thinkwar in Ukraine in a day, but I think he's going to end it and I think he'llhe's going to end it and I think he'llhe's going to end it and I think he'll end it on terms that work. I doubt bothend it on terms that work. I doubt bothend it on terms that work. I doubt both parties will be happy. I would certainlyparties will be happy. I would certainlyparties will be happy. I would certainly acknowledge that, but I think it's goingacknowledge that, but I think it's goingacknowledge that, but I think it's going to get resolved in a way that will saveto get resolved in a way that will saveto get resolved in a way that will save lives and enable Ukraine to retain itslives and enable Ukraine to retain itslives and enable Ukraine to retain its sovereignty. So, I'm very bullish onsovereignty. So, I'm very bullish onsovereignty. So, I'm very bullish on that. I think DOJ has been an incrediblethat. I think DOJ has been an incrediblethat. I think DOJ has been an incredible effort. It makes a lot of sense why theeffort. It makes a lot of sense why theeffort. It makes a lot of sense why the deep state is pushing back asdeep state is pushing back asdeep state is pushing back as aggressively as they are, but I thinkaggressively as they are, but I thinkaggressively as they are, but I think it's an absolutely necessary thing thatit's an absolutely necessary thing thatit's an absolutely necessary thing that needs to happen.needs to happen.needs to happen. Just to give you a crazy example, MuskJust to give you a crazy example, MuskJust to give you a crazy example, Musk did his normal, tell me what you've beendid his normal, tell me what you've beendid his normal, tell me what you've been up to for the last week and just send meup to for the last week and just send meup to for the last week and just send me five bullet points.five bullet points.five bullet points. The notion that government workers wouldThe notion that government workers wouldThe notion that government workers would protest that, or at least some subset ofprotest that, or at least some subset ofprotest that, or at least some subset of them, as opposed to just writing athem, as opposed to just writing athem, as opposed to just writing a little note back saying here's what I've
little note back saying here's what I'velittle note back saying here's what I've been up to for the last five days, kindbeen up to for the last five days, kindbeen up to for the last five days, kind of speaks to some of the dysfunction inof speaks to some of the dysfunction inof speaks to some of the dysfunction in Washington. I don't think the AmericanWashington. I don't think the AmericanWashington. I don't think the American peoplepeoplepeople have a lot of tolerance for it. I thinkhave a lot of tolerance for it. I thinkhave a lot of tolerance for it. I think there's enormous support for DOJ. Ithere's enormous support for DOJ. Ithere's enormous support for DOJ. I think everyone knows there's enormousthink everyone knows there's enormousthink everyone knows there's enormous waste and I think DOJ is going to gowaste and I think DOJ is going to gowaste and I think DOJ is going to go beyondbeyondbeyond eliminating waste. It's also going toeliminating waste. It's also going toeliminating waste. It's also going to eliminate a lot of regulations that areeliminate a lot of regulations that areeliminate a lot of regulations that are holding back the economy.holding back the economy.holding back the economy. So, I'm very enthusiastic about what'sSo, I'm very enthusiastic about what'sSo, I'm very enthusiastic about what's been accomplished so far. They'll makebeen accomplished so far. They'll makebeen accomplished so far. They'll make some mistakes working as quickly assome mistakes working as quickly assome mistakes working as quickly as they're working, but dismissing peoplethey're working, but dismissing peoplethey're working, but dismissing people who oversee the nuclear arsenalwho oversee the nuclear arsenalwho oversee the nuclear arsenal accidentally or whatever, they fixedaccidentally or whatever, they fixedaccidentally or whatever, they fixed that pretty quickly. Okay. That's thethat pretty quickly. Okay. That's thethat pretty quickly. Okay. That's the risk of going quickly, but it's aboutrisk of going quickly, but it's aboutrisk of going quickly, but it's about time we fixed our air traffic controltime we fixed our air traffic controltime we fixed our air traffic control technology. I'm very confident ittechnology. I'm very confident ittechnology. I'm very confident it happens with oversight from our CTO andhappens with oversight from our CTO andhappens with oversight from our CTO and chief, Mr. Musk.
chief, Mr. Musk.chief, Mr. Musk. In terms of DOJ, do you think it canIn terms of DOJ, do you think it canIn terms of DOJ, do you think it can actually make a meaningful dent in theactually make a meaningful dent in theactually make a meaningful dent in the deficit? Yes. Enough to affect Treasurydeficit? Yes. Enough to affect Treasurydeficit? Yes. Enough to affect Treasury prices orprices orprices or A big part of it is we've been operatingA big part of it is we've been operatingA big part of it is we've been operating in administrationsin administrationsin administrations where there's been no regard for howwhere there's been no regard for howwhere there's been no regard for how much debt we put on the country. No onemuch debt we put on the country. No onemuch debt we put on the country. No one cares. This is the first time I've evercares. This is the first time I've evercares. This is the first time I've ever seen any kind ofseen any kind ofseen any kind of cost effort of consequence. Actually,cost effort of consequence. Actually,cost effort of consequence. Actually, Clinton made some progress in thisClinton made some progress in thisClinton made some progress in this regard years ago,regard years ago,regard years ago, but this I think is an even betterbut this I think is an even betterbut this I think is an even better effort run by the best probably privateeffort run by the best probably privateeffort run by the best probably private sector person who could possibly run thesector person who could possibly run thesector person who could possibly run the effort and a crack technology team. I'meffort and a crack technology team. I'meffort and a crack technology team. I'm excited about it. At the end of the dayexcited about it. At the end of the dayexcited about it. At the end of the day though, isn't it really just aboutthough, isn't it really just aboutthough, isn't it really just about entitlement reform, otherwise we'reentitlement reform, otherwise we'reentitlement reform, otherwise we're still in the same mess? Look, I thinkstill in the same mess? Look, I thinkstill in the same mess? Look, I think there are intelligent entitlement reformthere are intelligent entitlement reformthere are intelligent entitlement reform things that could get done and shouldthings that could get done and shouldthings that could get done and should get done, but there's also a lot of
get done, but there's also a lot ofget done, but there's also a lot of waste and fraud and abuse. No one iswaste and fraud and abuse. No one iswaste and fraud and abuse. No one is opposed to that. You know, if indeedopposed to that. You know, if indeedopposed to that. You know, if indeed there are people receiving socialthere are people receiving socialthere are people receiving social security checks that are dead, Isecurity checks that are dead, Isecurity checks that are dead, I guarantee her heart that is true andguarantee her heart that is true andguarantee her heart that is true and Medicare, or talk about the health careMedicare, or talk about the health careMedicare, or talk about the health care system, is ripe with fraud, waste, andsystem, is ripe with fraud, waste, andsystem, is ripe with fraud, waste, and abuse and the government is the biggestabuse and the government is the biggestabuse and the government is the biggest buyer of health care, so it's beingbuyer of health care, so it's beingbuyer of health care, so it's being taken advantage of. The Defensetaken advantage of. The Defensetaken advantage of. The Defense Department, I think the new defenseDepartment, I think the new defenseDepartment, I think the new defense secretary is also very focused on thissecretary is also very focused on thissecretary is also very focused on this issue and I'm sure we're not spendingissue and I'm sure we're not spendingissue and I'm sure we're not spending defense money intelligently. A lot ofdefense money intelligently. A lot ofdefense money intelligently. A lot of the way these programs are done, youthe way these programs are done, youthe way these programs are done, you build the F-35 and a portion of thebuild the F-35 and a portion of thebuild the F-35 and a portion of the plane comes from every state in theplane comes from every state in theplane comes from every state in the countrycountrycountry and that's how these things get done andand that's how these things get done andand that's how these things get done and by the way, producing a plane where oneby the way, producing a plane where oneby the way, producing a plane where one part comes from every part of thepart comes from every part of thepart comes from every part of the country is not the most efficient way tocountry is not the most efficient way tocountry is not the most efficient way to produce a plane. And query whether we
produce a plane. And query whether weproduce a plane. And query whether we need as many manned. I'm sure the F-35need as many manned. I'm sure the F-35need as many manned. I'm sure the F-35 is an unbelievable plane and there's ais an unbelievable plane and there's ais an unbelievable plane and there's a place for it, but I think the futureplace for it, but I think the futureplace for it, but I think the future warfare is going to be much more likewarfare is going to be much more likewarfare is going to be much more like unmanned drones.unmanned drones.unmanned drones. Much more Anduril and less LockheedMuch more Anduril and less LockheedMuch more Anduril and less Lockheed Martin.Martin.Martin. If you were a pharmaceutical companyIf you were a pharmaceutical companyIf you were a pharmaceutical company now, would you be scared? The US hasnow, would you be scared? The US hasnow, would you be scared? The US has really been subsidizing the world forreally been subsidizing the world forreally been subsidizing the world for the last 30 years.the last 30 years.the last 30 years. I would be scared if I was doingI would be scared if I was doingI would be scared if I was doing something wrong. I would be prepared tosomething wrong. I would be prepared tosomething wrong. I would be prepared to be agile and nimble in light of thebe agile and nimble in light of thebe agile and nimble in light of the changes that are coming.changes that are coming.changes that are coming. Obviously, he's done a lot of positiveObviously, he's done a lot of positiveObviously, he's done a lot of positive things. Anything he's gotten reallythings. Anything he's gotten reallythings. Anything he's gotten really wrong in your opinion?wrong in your opinion?wrong in your opinion? It's sort of too early to say. Trump isIt's sort of too early to say. Trump isIt's sort of too early to say. Trump is sort of known for saying stuffsort of known for saying stuffsort of known for saying stuff that obviously gets headlines, scaresthat obviously gets headlines, scaresthat obviously gets headlines, scares the out of people, but there'sthe out of people, but there'sthe out of people, but there's generally a method to his madness.generally a method to his madness.generally a method to his madness. Recent comments about Ukraine, I thinkRecent comments about Ukraine, I thinkRecent comments about Ukraine, I think really have scared people, but when the
really have scared people, but when thereally have scared people, but when the United States has invested a few hundredUnited States has invested a few hundredUnited States has invested a few hundred billion dollars in supporting Ukrainebillion dollars in supporting Ukrainebillion dollars in supporting Ukraine and the United States has said, "Hey,and the United States has said, "Hey,and the United States has said, "Hey, you know what? There's a way for Ukraineyou know what? There's a way for Ukraineyou know what? There's a way for Ukraine to pay us back in a way that it's ato pay us back in a way that it's ato pay us back in a way that it's a win-win and it maybe there's a deal towin-win and it maybe there's a deal towin-win and it maybe there's a deal to be made in a joint venture on certainbe made in a joint venture on certainbe made in a joint venture on certain assets that are important to the Unitedassets that are important to the Unitedassets that are important to the United States government." And he gets blownStates government." And he gets blownStates government." And he gets blown off publicly by the president ofoff publicly by the president ofoff publicly by the president of Ukraine. You can expect Trump to beUkraine. You can expect Trump to beUkraine. You can expect Trump to be angry and to say some words that scareangry and to say some words that scareangry and to say some words that scare thethethe daylights out of the Zelenskyy regimedaylights out of the Zelenskyy regimedaylights out of the Zelenskyy regime and, you know, magically you wake up inand, you know, magically you wake up inand, you know, magically you wake up in the morning in the newspaper, there's athe morning in the newspaper, there's athe morning in the newspaper, there's a deal. So, there's a method to thedeal. So, there's a method to thedeal. So, there's a method to the madness as I've figured out over time.madness as I've figured out over time.madness as I've figured out over time. And so, you sort of ultimately judgeAnd so, you sort of ultimately judgeAnd so, you sort of ultimately judge Trump byTrump byTrump by not words so much as actions andnot words so much as actions andnot words so much as actions and outcomes. I think he's made a lot ofoutcomes. I think he's made a lot ofoutcomes. I think he's made a lot of progress. I'm very supportive.progress. I'm very supportive.progress. I'm very supportive. Speaking of support, you've been a
Speaking of support, you've been aSpeaking of support, you've been a supporter with some hesitation of RFKsupporter with some hesitation of RFKsupporter with some hesitation of RFK Jr. I love what he's doing forJr. I love what he's doing forJr. I love what he's doing for nutrition. I think it's long overdue.nutrition. I think it's long overdue.nutrition. I think it's long overdue. That seems skepticism has me a bitThat seems skepticism has me a bitThat seems skepticism has me a bit concerned. How do you square those twoconcerned. How do you square those twoconcerned. How do you square those two things?things?things? I'm an RFK fan. That doesn't mean II'm an RFK fan. That doesn't mean II'm an RFK fan. That doesn't mean I think that everything he believes isthink that everything he believes isthink that everything he believes is true. I'm a person who believes we wouldtrue. I'm a person who believes we wouldtrue. I'm a person who believes we would need to very carefully reassess theneed to very carefully reassess theneed to very carefully reassess the approach that we've taken to vaccines,approach that we've taken to vaccines,approach that we've taken to vaccines, the exemption from liability that we'vethe exemption from liability that we'vethe exemption from liability that we've given to drug makers and what that hasgiven to drug makers and what that hasgiven to drug makers and what that has led to, which is a proliferation of theled to, which is a proliferation of theled to, which is a proliferation of the vaccine schedule for kidsvaccine schedule for kidsvaccine schedule for kids without any study of the cumulativewithout any study of the cumulativewithout any study of the cumulative impact of all of these vaccines, the ageimpact of all of these vaccines, the ageimpact of all of these vaccines, the age at which we give it to kids, combiningat which we give it to kids, combiningat which we give it to kids, combining vaccine shots given to an infant at thevaccine shots given to an infant at thevaccine shots given to an infant at the time of life they receive it, the risktime of life they receive it, the risktime of life they receive it, the risk versus the reward. Having recently goneversus the reward. Having recently goneversus the reward. Having recently gone through this experience with a 5 and 1/4through this experience with a 5 and 1/4through this experience with a 5 and 1/4 year old child, the day of our daughter
year old child, the day of our daughteryear old child, the day of our daughter was born,was born,was born, the nurse injected her with hepatitis Bthe nurse injected her with hepatitis Bthe nurse injected her with hepatitis B vaccine. Hepatitis B, you know, isvaccine. Hepatitis B, you know, isvaccine. Hepatitis B, you know, is transmitted generally sexualtransmitted generally sexualtransmitted generally sexual transmission, intravenous drug users,transmission, intravenous drug users,transmission, intravenous drug users, not something that my daughter wasnot something that my daughter wasnot something that my daughter was likely to be exposed to. Why pick thelikely to be exposed to. Why pick thelikely to be exposed to. Why pick the first day of her lifefirst day of her lifefirst day of her life to administer this vaccine where thereto administer this vaccine where thereto administer this vaccine where there can be side effects? They tested thecan be side effects? They tested thecan be side effects? They tested the mother, they would not have given hermother, they would not have given hermother, they would not have given her this vaccine, but my understanding isthis vaccine, but my understanding isthis vaccine, but my understanding is Merck was not successful when theyMerck was not successful when theyMerck was not successful when they rolled out this drug to the targetedrolled out this drug to the targetedrolled out this drug to the targeted population, so they convinced a bunch ofpopulation, so they convinced a bunch ofpopulation, so they convinced a bunch of regulators to make it a mandated forregulators to make it a mandated forregulators to make it a mandated for children because that would reducechildren because that would reducechildren because that would reduce the impact of hepatitis B and the degreethe impact of hepatitis B and the degreethe impact of hepatitis B and the degree of safety study, the number of kids itof safety study, the number of kids itof safety study, the number of kids it was tried upon. If you read the packagewas tried upon. If you read the packagewas tried upon. If you read the package label, it's frightening. It's somethinglabel, it's frightening. It's somethinglabel, it's frightening. It's something like 184 infants to 10-year-olds werelike 184 infants to 10-year-olds werelike 184 infants to 10-year-olds were tested with the vaccine and they looked
tested with the vaccine and they lookedtested with the vaccine and they looked they followed them for five days afterthey followed them for five days afterthey followed them for five days after administration and that was the extentadministration and that was the extentadministration and that was the extent of what was required before the FDA gaveof what was required before the FDA gaveof what was required before the FDA gave authorization and the whole thing seemsauthorization and the whole thing seemsauthorization and the whole thing seems crazy to me. So, it's something youcrazy to me. So, it's something youcrazy to me. So, it's something you study carefully. Now, the risk when youstudy carefully. Now, the risk when youstudy carefully. Now, the risk when you raise any questions is that a wholeraise any questions is that a wholeraise any questions is that a whole bunch of people decide they don't wantbunch of people decide they don't wantbunch of people decide they don't want the polio vaccine and measles vaccine.the polio vaccine and measles vaccine.the polio vaccine and measles vaccine. That's just something he's to manageThat's just something he's to manageThat's just something he's to manage very, very carefully.very, very carefully.very, very carefully. In terms of managing, where do theIn terms of managing, where do theIn terms of managing, where do the Democrats go from here? They really putDemocrats go from here? They really putDemocrats go from here? They really put themselves in a hole.themselves in a hole.themselves in a hole. Democratic Party needs a completeDemocratic Party needs a completeDemocratic Party needs a complete reboot. The problem is that leadershipreboot. The problem is that leadershipreboot. The problem is that leadership and people in power generally don't likeand people in power generally don't likeand people in power generally don't like to give up power, but this is a caseto give up power, but this is a caseto give up power, but this is a case where a lot of people need to resign inwhere a lot of people need to resign inwhere a lot of people need to resign in disgrace. Party needs a complete reboot.disgrace. Party needs a complete reboot.disgrace. Party needs a complete reboot. They continue to double down on all ofThey continue to double down on all ofThey continue to double down on all of the mistakes and policies that were made
the mistakes and policies that were madethe mistakes and policies that were made before.before.before. If I remember the Democratic Party, theIf I remember the Democratic Party, theIf I remember the Democratic Party, the leadership, I would be saying, "We loveleadership, I would be saying, "We loveleadership, I would be saying, "We love this effort to eliminate waste, fraud,this effort to eliminate waste, fraud,this effort to eliminate waste, fraud, and abuse in our government. DOJ isand abuse in our government. DOJ isand abuse in our government. DOJ is great. We just want to make sure there'sgreat. We just want to make sure there'sgreat. We just want to make sure there's have checks and balances. Please keep ushave checks and balances. Please keep ushave checks and balances. Please keep us informed as opposed to marching andinformed as opposed to marching andinformed as opposed to marching and opposing and telling staff members notopposing and telling staff members notopposing and telling staff members not to respond to emails, stuff like that.to respond to emails, stuff like that.to respond to emails, stuff like that. That's just sort of one of many. I don'tThat's just sort of one of many. I don'tThat's just sort of one of many. I don't think myself ever as really as a memberthink myself ever as really as a memberthink myself ever as really as a member of a party. I don't think myself as aof a party. I don't think myself as aof a party. I don't think myself as a member of the Republican Party. I havemember of the Republican Party. I havemember of the Republican Party. I have had tohad tohad to check a box in order to vote in New Yorkcheck a box in order to vote in New Yorkcheck a box in order to vote in New York City on occasion. But you know, I'veCity on occasion. But you know, I'veCity on occasion. But you know, I've always been kind of a centrist. I likealways been kind of a centrist. I likealways been kind of a centrist. I like to vote for people I think were the bestto vote for people I think were the bestto vote for people I think were the best candidates regardless of politicalcandidates regardless of politicalcandidates regardless of political affiliation. But the Democratic Partyaffiliation. But the Democratic Partyaffiliation. But the Democratic Party has not done itself a service in thehas not done itself a service in thehas not done itself a service in the last 4 years and probably longer than
last 4 years and probably longer thanlast 4 years and probably longer than that. In terms of the best candidates,that. In terms of the best candidates,that. In terms of the best candidates, do you think the Democrats just misseddo you think the Democrats just misseddo you think the Democrats just missed a golden opportunity after Biden droppeda golden opportunity after Biden droppeda golden opportunity after Biden dropped out? Could they have nominated someoneout? Could they have nominated someoneout? Could they have nominated someone amazing? The best opportunity they hadamazing? The best opportunity they hadamazing? The best opportunity they had was Jamie Dimon. I think wanted to bewas Jamie Dimon. I think wanted to bewas Jamie Dimon. I think wanted to be president but didn't want to go throughpresident but didn't want to go throughpresident but didn't want to go through the rigmarole of running for office. Ithe rigmarole of running for office. Ithe rigmarole of running for office. I don't know if his family would have letdon't know if his family would have letdon't know if his family would have let him, but it was sort of an interestinghim, but it was sort of an interestinghim, but it was sort of an interesting moment where he could have ran a 100-daymoment where he could have ran a 100-daymoment where he could have ran a 100-day campaign. He would have had a real shot.campaign. He would have had a real shot.campaign. He would have had a real shot. Instead, they put up one of the worstInstead, they put up one of the worstInstead, they put up one of the worst candidates we've had. Every decision,candidates we've had. Every decision,candidates we've had. Every decision, lying to the health of the president,lying to the health of the president,lying to the health of the president, cognitive health in particular, of thecognitive health in particular, of thecognitive health in particular, of the president, and then the coup over thepresident, and then the coup over thepresident, and then the coup over the weekend. They should have run a process,weekend. They should have run a process,weekend. They should have run a process, some kind of open primary process, somesome kind of open primary process, somesome kind of open primary process, some kind of debate thing where differentkind of debate thing where differentkind of debate thing where different candidates would have a shot to compete,
candidates would have a shot to compete,candidates would have a shot to compete, but that was not done. When people usedbut that was not done. When people usedbut that was not done. When people used to smoke, they called it smoke-filledto smoke, they called it smoke-filledto smoke, they called it smoke-filled rooms. You can't call the Democraticrooms. You can't call the Democraticrooms. You can't call the Democratic Party anymore. And people now call itParty anymore. And people now call itParty anymore. And people now call it the Democrat Party. I would say I callthe Democrat Party. I would say I callthe Democrat Party. I would say I call it the anti-Democratic Party. That'sit the anti-Democratic Party. That'sit the anti-Democratic Party. That's really what it's become.really what it's become.really what it's become. In terms of politics, you hinted thatIn terms of politics, you hinted thatIn terms of politics, you hinted that you would serve if you were needed. Doesyou would serve if you were needed. Doesyou would serve if you were needed. Does Treasury Secretary Ackman have a goodTreasury Secretary Ackman have a goodTreasury Secretary Ackman have a good run to it orrun to it orrun to it or Not for a very long period of time.Not for a very long period of time.Not for a very long period of time. We'll segue at some point to the HowardWe'll segue at some point to the HowardWe'll segue at some point to the Howard Hughes transaction. My long-termHughes transaction. My long-termHughes transaction. My long-term ambition has always been to have aambition has always been to have aambition has always been to have a better record than Buffett. That's whatbetter record than Buffett. That's whatbetter record than Buffett. That's what I said when I started in this business.I said when I started in this business.I said when I started in this business. He's 94. In order to be competitive, IHe's 94. In order to be competitive, IHe's 94. In order to be competitive, I got to be at this for another 36 years.got to be at this for another 36 years.got to be at this for another 36 years. And I can't get distracted by stint asAnd I can't get distracted by stint asAnd I can't get distracted by stint as Treasury Secretary. The good news isTreasury Secretary. The good news isTreasury Secretary. The good news is there are a lot of other very talentedthere are a lot of other very talented
there are a lot of other very talented candidates.candidates.candidates. We're going to talk about HHH in 1We're going to talk about HHH in 1We're going to talk about HHH in 1 second. I just wanted to go through onesecond. I just wanted to go through onesecond. I just wanted to go through one more category that you've been a leadermore category that you've been a leadermore category that you've been a leader on and something I really appreciate.on and something I really appreciate.on and something I really appreciate. It's a tough subject, but you've beenIt's a tough subject, but you've beenIt's a tough subject, but you've been waging what I think is the mostwaging what I think is the mostwaging what I think is the most important activist campaign that youimportant activist campaign that youimportant activist campaign that you ever done via X on what happened onever done via X on what happened onever done via X on what happened on October 7th and beyond. Jews are losingOctober 7th and beyond. Jews are losingOctober 7th and beyond. Jews are losing the PR war big time. TikTok's full ofthe PR war big time. TikTok's full ofthe PR war big time. TikTok's full of anti-Semitic propaganda. The newspapersanti-Semitic propaganda. The newspapersanti-Semitic propaganda. The newspapers have unfavorablehave unfavorablehave unfavorable coverage. What can be done to turn thecoverage. What can be done to turn thecoverage. What can be done to turn the tide in the PR war? I'm a very big fantide in the PR war? I'm a very big fantide in the PR war? I'm a very big fan of X because it's an open platform. Youof X because it's an open platform. Youof X because it's an open platform. You know, an anti-Semite can make theirknow, an anti-Semite can make theirknow, an anti-Semite can make their case, but so can someone who I think iscase, but so can someone who I think iscase, but so can someone who I think is on the right side of history. I try toon the right side of history. I try toon the right side of history. I try to be objectively on the right side ofbe objectively on the right side ofbe objectively on the right side of truth. You could say I'm biased becausetruth. You could say I'm biased becausetruth. You could say I'm biased because I'm Jewish, but I just look at the factsI'm Jewish, but I just look at the factsI'm Jewish, but I just look at the facts on the ground and try to be as objective
on the ground and try to be as objectiveon the ground and try to be as objective about it as I can be. Andabout it as I can be. Andabout it as I can be. And I think there are other important voicesI think there are other important voicesI think there are other important voices out there. Doug Murray is an extremelyout there. Doug Murray is an extremelyout there. Doug Murray is an extremely important voice. He's not Jewish. Aaronimportant voice. He's not Jewish. Aaronimportant voice. He's not Jewish. Aaron Molin has been a very important voice onMolin has been a very important voice onMolin has been a very important voice on the subject, also not. I think it's muchthe subject, also not. I think it's muchthe subject, also not. I think it's much more powerful when someone is supportingmore powerful when someone is supportingmore powerful when someone is supporting the Jewish people when they're notthe Jewish people when they're notthe Jewish people when they're not Jewish. I have a conflict.Jewish. I have a conflict.Jewish. I have a conflict. The problem with conventional media isThe problem with conventional media isThe problem with conventional media is that the stories you read are the onesthat the stories you read are the onesthat the stories you read are the ones the editors choose and edit.the editors choose and edit.the editors choose and edit. And the editors are hired by people whoAnd the editors are hired by people whoAnd the editors are hired by people who control the publication. And one of thecontrol the publication. And one of thecontrol the publication. And one of the privileges of controlling a mediaprivileges of controlling a mediaprivileges of controlling a media publication is deciding what stories getpublication is deciding what stories getpublication is deciding what stories get printed and how they get printed and howprinted and how they get printed and howprinted and how they get printed and how they get edited and so on and so forth.they get edited and so on and so forth.they get edited and so on and so forth. The result is that what you come toThe result is that what you come toThe result is that what you come to learn over time is the reason why youlearn over time is the reason why youlearn over time is the reason why you thought Biden was cognitively healthy isthought Biden was cognitively healthy isthought Biden was cognitively healthy is because the publications you read told
because the publications you read toldbecause the publications you read told you that even though it wasn't true.you that even though it wasn't true.you that even though it wasn't true. If that's not a moment for people toIf that's not a moment for people toIf that's not a moment for people to reassess how they're getting to thereassess how they're getting to thereassess how they're getting to the truth,truth,truth, I don't know what will be.I don't know what will be.I don't know what will be. My journey on Twitter probably startedMy journey on Twitter probably startedMy journey on Twitter probably started when I signed on 7, maybe 8 years ago. Iwhen I signed on 7, maybe 8 years ago. Iwhen I signed on 7, maybe 8 years ago. I don't remember exactly when, but you candon't remember exactly when, but you candon't remember exactly when, but you can learn a lot by following people wholearn a lot by following people wholearn a lot by following people who agree with you and you can learn a lotagree with you and you can learn a lotagree with you and you can learn a lot by following people who disagree withby following people who disagree withby following people who disagree with you. And I try to do that on pretty muchyou. And I try to do that on pretty muchyou. And I try to do that on pretty much every issue that I'm involved in. Andevery issue that I'm involved in. Andevery issue that I'm involved in. And then you see who's got the bestthen you see who's got the bestthen you see who's got the best evidence, who makes the best arguments,evidence, who makes the best arguments,evidence, who makes the best arguments, and that's how you get to the truth. Andand that's how you get to the truth. Andand that's how you get to the truth. And I think Jewish people are a tinyI think Jewish people are a tinyI think Jewish people are a tiny percentage of the world, 0.2% of thepercentage of the world, 0.2% of thepercentage of the world, 0.2% of the global population. I think Jewish peopleglobal population. I think Jewish peopleglobal population. I think Jewish people have made a major contribution to thehave made a major contribution to thehave made a major contribution to the world, whether you look at theworld, whether you look at theworld, whether you look at the percentage of Nobel laureates or thepercentage of Nobel laureates or thepercentage of Nobel laureates or the many very successful businesses that
many very successful businesses thatmany very successful businesses that comprise the S&P 500 that employcomprise the S&P 500 that employcomprise the S&P 500 that employ millions and millions of people thatmillions and millions of people thatmillions and millions of people that have changed the world. Think of thehave changed the world. Think of thehave changed the world. Think of the founders of Google. Think of thefounders of Google. Think of thefounders of Google. Think of the founders of Home Depot. Think of thefounders of Home Depot. Think of thefounders of Home Depot. Think of the founders of other amazing businessesfounders of other amazing businessesfounders of other amazing businesses that have made important contributions.that have made important contributions.that have made important contributions. So I think Jewish people made anSo I think Jewish people made anSo I think Jewish people made an important contribution. I think Jewishimportant contribution. I think Jewishimportant contribution. I think Jewish people are extremely philanthropicpeople are extremely philanthropicpeople are extremely philanthropic relative to their means versus otherrelative to their means versus otherrelative to their means versus other people. And we're kind of batting abovepeople. And we're kind of batting abovepeople. And we're kind of batting above our weight class. The good news is Iour weight class. The good news is Iour weight class. The good news is I think the majority, vast majority of thethink the majority, vast majority of thethink the majority, vast majority of the country is not anti-Semitic and believescountry is not anti-Semitic and believescountry is not anti-Semitic and believes in respecting people regardless of theirin respecting people regardless of theirin respecting people regardless of their ethnic or religious beliefs. Those areethnic or religious beliefs. Those areethnic or religious beliefs. Those are American values. And I think a lot ofAmerican values. And I think a lot ofAmerican values. And I think a lot of the anti-Semitic stuff actuallythe anti-Semitic stuff actuallythe anti-Semitic stuff actually when you dig deeper is reallywhen you dig deeper is reallywhen you dig deeper is really anti-American stuff. I think peopleanti-American stuff. I think peopleanti-American stuff. I think people realize that. People protesting onrealize that. People protesting on
realize that. People protesting on campus, the pro-Hamas protesters,campus, the pro-Hamas protesters,campus, the pro-Hamas protesters, are not just anti-Israel. They're notare not just anti-Israel. They're notare not just anti-Israel. They're not just anti-Jewish people. They'rejust anti-Jewish people. They'rejust anti-Jewish people. They're anti-American. They're anti-democraticanti-American. They're anti-democraticanti-American. They're anti-democratic system. They're anti- capitalism.system. They're anti- capitalism.system. They're anti- capitalism. They're anti-the values that our countryThey're anti-the values that our countryThey're anti-the values that our country stands for. I view this as a battle forstands for. I view this as a battle forstands for. I view this as a battle for America, the United States, where JewsAmerica, the United States, where JewsAmerica, the United States, where Jews tend to be kind of an early indicator oftend to be kind of an early indicator oftend to be kind of an early indicator of a problem. I mean, in the sense thata problem. I mean, in the sense thata problem. I mean, in the sense that when anti-Semitism blows up in awhen anti-Semitism blows up in awhen anti-Semitism blows up in a country,country,country, it's usually an early indicator ofit's usually an early indicator ofit's usually an early indicator of fundamental problems. And you can lookfundamental problems. And you can lookfundamental problems. And you can look at obviously many examples in historyat obviously many examples in historyat obviously many examples in history beginning in Germany 80 years ago.beginning in Germany 80 years ago.beginning in Germany 80 years ago. There's probably more anti-Semitism thanThere's probably more anti-Semitism thanThere's probably more anti-Semitism than you're giving credit for. I mean, todayyou're giving credit for. I mean, todayyou're giving credit for. I mean, today they buried the the Bas family.they buried the the Bas family.they buried the the Bas family. Obviously, a horrible tragedy. When theObviously, a horrible tragedy. When theObviously, a horrible tragedy. When the world found out they were murdered, theworld found out they were murdered, theworld found out they were murdered, the silence in social media was deafening.silence in social media was deafening.silence in social media was deafening. When Israel does a legitimate military
When Israel does a legitimate militaryWhen Israel does a legitimate military strike in Gaza and civilians are killed,strike in Gaza and civilians are killed,strike in Gaza and civilians are killed, front page news. Does that go back tofront page news. Does that go back tofront page news. Does that go back to what you were saying before about thewhat you were saying before about thewhat you were saying before about the publishers?publishers?publishers? It really relates to who controls whichIt really relates to who controls whichIt really relates to who controls which media publication you're reading. Ourmedia publication you're reading. Ourmedia publication you're reading. Our enemies have been funding protests onenemies have been funding protests onenemies have been funding protests on campus. That is explicitly andcampus. That is explicitly andcampus. That is explicitly and empirically known today. Yes, it's inempirically known today. Yes, it's inempirically known today. Yes, it's in the best interests of our enemies to trythe best interests of our enemies to trythe best interests of our enemies to try to undermine our country. I think itto undermine our country. I think itto undermine our country. I think it should be illegal to pay people toshould be illegal to pay people toshould be illegal to pay people to protest.protest.protest. I've been protested on the DEI issue,I've been protested on the DEI issue,I've been protested on the DEI issue, for example. And there are a bunch offor example. And there are a bunch offor example. And there are a bunch of protesters who come in front of myprotesters who come in front of myprotesters who come in front of my building every Thursday from 12:00 tobuilding every Thursday from 12:00 tobuilding every Thursday from 12:00 to 2:00.2:00.2:00. And they get paid to do it. And look,And they get paid to do it. And look,And they get paid to do it. And look, I'm happy they have jobs. They have noI'm happy they have jobs. They have noI'm happy they have jobs. They have no idea who I am. I've walked through theidea who I am. I've walked through theidea who I am. I've walked through the protest. They have no idea who I am.protest. They have no idea who I am.protest. They have no idea who I am. They're clearly not knowingly protestThey're clearly not knowingly protestThey're clearly not knowingly protest me. There's a quid pro quo. If I want
me. There's a quid pro quo. If I wantme. There's a quid pro quo. If I want them to go away, I got to make a paymentthem to go away, I got to make a paymentthem to go away, I got to make a payment to this nominal NGO for an empty and I'mto this nominal NGO for an empty and I'mto this nominal NGO for an empty and I'm just not going to do it. It's not thejust not going to do it. It's not thejust not going to do it. It's not the way I operate. But there's a lot ofway I operate. But there's a lot ofway I operate. But there's a lot of graft, corruption, propaganda to try tograft, corruption, propaganda to try tograft, corruption, propaganda to try to createcreatecreate a narrative which is funded by peoplea narrative which is funded by peoplea narrative which is funded by people whose interests are not in the bestwhose interests are not in the bestwhose interests are not in the best interests of America. Now, Maiden Event,interests of America. Now, Maiden Event,interests of America. Now, Maiden Event, Howard Hughes, you're proposingHoward Hughes, you're proposingHoward Hughes, you're proposing increasing your stake in the company.increasing your stake in the company.increasing your stake in the company. It's a long involved saga dating back toIt's a long involved saga dating back toIt's a long involved saga dating back to the financial crisis. Can you just givethe financial crisis. Can you just givethe financial crisis. Can you just give us a quick overview of how we got hereus a quick overview of how we got hereus a quick overview of how we got here and what your proposal is? Theand what your proposal is? Theand what your proposal is? The background here is November 2008. We'rebackground here is November 2008. We'rebackground here is November 2008. We're in the middle of financial crisis.in the middle of financial crisis.in the middle of financial crisis. Markets are blowing up.Markets are blowing up.Markets are blowing up. And a company called General GrowthAnd a company called General GrowthAnd a company called General Growth Properties stock declines over a severalProperties stock declines over a severalProperties stock declines over a several month period from $63 a share to 34month period from $63 a share to 34month period from $63 a share to 34 cents. 99 and a half percent or socents. 99 and a half percent or socents. 99 and a half percent or so decline. And this is the second largest
decline. And this is the second largestdecline. And this is the second largest shopping mall company in the country.shopping mall company in the country.shopping mall company in the country. They own class A malls. These are theThey own class A malls. These are theThey own class A malls. These are the best, most beautiful, modern malls. Andbest, most beautiful, modern malls. Andbest, most beautiful, modern malls. And interestingly, the net operating income,interestingly, the net operating income,interestingly, the net operating income, which is kind of a financial measure ofwhich is kind of a financial measure ofwhich is kind of a financial measure of performance for real estate company,performance for real estate company,performance for real estate company, actually grew year on year between 2008actually grew year on year between 2008actually grew year on year between 2008 and 2009.and 2009.and 2009. And the occupancy, percentage occupiedAnd the occupancy, percentage occupiedAnd the occupancy, percentage occupied in the mall, increased over the year.in the mall, increased over the year.in the mall, increased over the year. But the stock price is down 99 and aBut the stock price is down 99 and aBut the stock price is down 99 and a half percent. Well, that's sort of anhalf percent. Well, that's sort of anhalf percent. Well, that's sort of an interesting contradiction.interesting contradiction.interesting contradiction. And the reason why the stock priceAnd the reason why the stock priceAnd the reason why the stock price declined so much is that the company wasdeclined so much is that the company wasdeclined so much is that the company was on the brink of bankruptcy because theyon the brink of bankruptcy because theyon the brink of bankruptcy because they couldn't pay their debts when they werecouldn't pay their debts when they werecouldn't pay their debts when they were coming due. And they had financedcoming due. And they had financedcoming due. And they had financed themselves principally in the CMBSthemselves principally in the CMBSthemselves principally in the CMBS market. These are mortgage-backedmarket. These are mortgage-backedmarket. These are mortgage-backed securities.securities.securities. They had relatively short-term debt,They had relatively short-term debt,They had relatively short-term debt, were very aggressive in the way theywere very aggressive in the way they
were very aggressive in the way they financed themselves, and that debt wasfinanced themselves, and that debt wasfinanced themselves, and that debt was coming due within 18 months. Andcoming due within 18 months. Andcoming due within 18 months. And something like 2/3 of the $27 billionsomething like 2/3 of the $27 billionsomething like 2/3 of the $27 billion worth of debt was coming due in a coupleworth of debt was coming due in a coupleworth of debt was coming due in a couple within 2 years.within 2 years.within 2 years. And the world knew they couldn'tAnd the world knew they couldn'tAnd the world knew they couldn't refinance it because that market hadrefinance it because that market hadrefinance it because that market had shut down.shut down.shut down. So people assumed they were going to goSo people assumed they were going to goSo people assumed they were going to go bankrupt. Every other company wentbankrupt. Every other company wentbankrupt. Every other company went bankrupt. The shareholders lostbankrupt. The shareholders lostbankrupt. The shareholders lost everything. And as a result, the stockeverything. And as a result, the stockeverything. And as a result, the stock traded where it did. What we did was wetraded where it did. What we did was wetraded where it did. What we did was we started the bankruptcy code just to makestarted the bankruptcy code just to makestarted the bankruptcy code just to make sure. I said, "Well, why can't there besure. I said, "Well, why can't there besure. I said, "Well, why can't there be a recovery in a bankruptcy fora recovery in a bankruptcy fora recovery in a bankruptcy for shareholders? The assets are worth moreshareholders? The assets are worth moreshareholders? The assets are worth more than the liabilities. Isn't thethan the liabilities. Isn't thethan the liabilities. Isn't the hierarchy of claims in bankruptcyhierarchy of claims in bankruptcyhierarchy of claims in bankruptcy supposed to work that way?" Even thoughsupposed to work that way?" Even thoughsupposed to work that way?" Even though it hadn't in the public markets before.it hadn't in the public markets before.it hadn't in the public markets before. I thought this was a perfect test case.I thought this was a perfect test case.I thought this was a perfect test case. And with advice from some good lawyersAnd with advice from some good lawyersAnd with advice from some good lawyers who kind of agreed with our
who kind of agreed with ourwho kind of agreed with our understanding of the law, we bought 25%understanding of the law, we bought 25%understanding of the law, we bought 25% of the company in the open market.of the company in the open market.of the company in the open market. Started at 34 cents a share, probablyStarted at 34 cents a share, probablyStarted at 34 cents a share, probably paid up to a dollar. Average cost waspaid up to a dollar. Average cost waspaid up to a dollar. Average cost was something like 60 cents. We paid 60something like 60 cents. We paid 60something like 60 cents. We paid 60 million for 25%, so 240 million for themillion for 25%, so 240 million for themillion for 25%, so 240 million for the equity of the company. It had 27 billionequity of the company. It had 27 billionequity of the company. It had 27 billion of debt, so 99% debt, 1% equity.of debt, so 99% debt, 1% equity.of debt, so 99% debt, 1% equity. That's the kind of leverage, if itThat's the kind of leverage, if itThat's the kind of leverage, if it works, it works. And then I lobbied onworks, it works. And then I lobbied onworks, it works. And then I lobbied on the board, eventually got on the boardthe board, eventually got on the boardthe board, eventually got on the board of directors after the company filed forof directors after the company filed forof directors after the company filed for bankruptcy. And then I led abankruptcy. And then I led abankruptcy. And then I led a restructuring for the benefit of notrestructuring for the benefit of notrestructuring for the benefit of not just the creditors, but thejust the creditors, but thejust the creditors, but the shareholders, which just never happensshareholders, which just never happensshareholders, which just never happens because the distressed funds buy thebecause the distressed funds buy thebecause the distressed funds buy the debt that was trading at pennies on thedebt that was trading at pennies on thedebt that was trading at pennies on the dollar, 30 cents for the unsecured debt,dollar, 30 cents for the unsecured debt,dollar, 30 cents for the unsecured debt, 10 cents for the converts.10 cents for the converts.10 cents for the converts. And there was plenty of value to goAnd there was plenty of value to goAnd there was plenty of value to go around.around.around. Part of the way we unearth value is onePart of the way we unearth value is one
Part of the way we unearth value is one of the things that took General Growthof the things that took General Growthof the things that took General Growth down was they had this master planneddown was they had this master planneddown was they had this master planned community business where they relied oncommunity business where they relied oncommunity business where they relied on cash from lot salescash from lot salescash from lot sales in part to cover their debt service. Andin part to cover their debt service. Andin part to cover their debt service. And when the financial crisis happened,when the financial crisis happened,when the financial crisis happened, people stopped buying. Home builderspeople stopped buying. Home builderspeople stopped buying. Home builders stopped buying lots because they didn'tstopped buying lots because they didn'tstopped buying lots because they didn't have any money. People were stoppedhave any money. People were stoppedhave any money. People were stopped buying homes. The result of all of thebuying homes. The result of all of thebuying homes. The result of all of the above was I said, "Hey, we're going toabove was I said, "Hey, we're going toabove was I said, "Hey, we're going to make this company emerge. It will trademake this company emerge. It will trademake this company emerge. It will trade a lot better if we get rid of all thea lot better if we get rid of all thea lot better if we get rid of all the ancillary stuff." We took all theancillary stuff." We took all theancillary stuff." We took all the ancillary stuff. We stuffed it in a newancillary stuff. We stuffed it in a newancillary stuff. We stuffed it in a new corporation. General Growth hadcorporation. General Growth hadcorporation. General Growth had purchased the Howard Hughes Corporationpurchased the Howard Hughes Corporationpurchased the Howard Hughes Corporation from the Rouse company. Or they hadfrom the Rouse company. Or they hadfrom the Rouse company. Or they had purchased the Rouse company, which inpurchased the Rouse company, which inpurchased the Rouse company, which in turn owned Howard Hughes, which in turnturn owned Howard Hughes, which in turnturn owned Howard Hughes, which in turn owned Downtown Summerlin in Las Vegas.owned Downtown Summerlin in Las Vegas.owned Downtown Summerlin in Las Vegas. Howard Hughes was a noted real estateHoward Hughes was a noted real estate
Howard Hughes was a noted real estate investor owner. This was sort of a sideinvestor owner. This was sort of a sideinvestor owner. This was sort of a side show to our General Growth Investment.show to our General Growth Investment.show to our General Growth Investment. General Growth stock, if you would heldGeneral Growth stock, if you would heldGeneral Growth stock, if you would held it from the time we bought to the peakit from the time we bought to the peakit from the time we bought to the peak when we spun off Howard Hughes, it waswhen we spun off Howard Hughes, it waswhen we spun off Howard Hughes, it was almost a hundredfold return. Howardalmost a hundredfold return. Howardalmost a hundredfold return. Howard Hughes became sort of this work inHughes became sort of this work inHughes became sort of this work in progress. We hired a veryprogress. We hired a veryprogress. We hired a very entrepreneurial management team and weentrepreneurial management team and weentrepreneurial management team and we owned a jumble of assets. Took us yearsowned a jumble of assets. Took us yearsowned a jumble of assets. Took us years to figure out the right strategy. Weto figure out the right strategy. Weto figure out the right strategy. We bought out the Hughes heirs that ownedbought out the Hughes heirs that ownedbought out the Hughes heirs that owned half of the Summerlin asset. We boughthalf of the Summerlin asset. We boughthalf of the Summerlin asset. We bought out Morgan Stanley real estate fund thatout Morgan Stanley real estate fund thatout Morgan Stanley real estate fund that owned half of the Woodlands. We boughtowned half of the Woodlands. We boughtowned half of the Woodlands. We bought out Blackstone, Brookfield, and Fairout Blackstone, Brookfield, and Fairout Blackstone, Brookfield, and Fair Home that were initial investors withHome that were initial investors withHome that were initial investors with less in the company. But again, it was aless in the company. But again, it was aless in the company. But again, it was a side show. We did this transaction andside show. We did this transaction andside show. We did this transaction and we made a ton on General Growth. But inwe made a ton on General Growth. But inwe made a ton on General Growth. But in order to do that, we had to spin off theorder to do that, we had to spin off theorder to do that, we had to spin off the stuff. In the early days, people got
stuff. In the early days, people gotstuff. In the early days, people got excited about Howard Hughes stock. Stockexcited about Howard Hughes stock. Stockexcited about Howard Hughes stock. Stock went from $47 to like $150 a share. Thewent from $47 to like $150 a share. Thewent from $47 to like $150 a share. The story on the street was we're going tostory on the street was we're going tostory on the street was we're going to turn it into the next Berkshireturn it into the next Berkshireturn it into the next Berkshire Hathaway. And then when that didn'tHathaway. And then when that didn'tHathaway. And then when that didn't happen, the stock went back down.happen, the stock went back down.happen, the stock went back down. It's always seemed to trade based on theIt's always seemed to trade based on theIt's always seemed to trade based on the worst performing asset we own. What'sworst performing asset we own. What'sworst performing asset we own. What's unusual about Howard Hughes is it ownsunusual about Howard Hughes is it ownsunusual about Howard Hughes is it owns open air retail. It owns officeopen air retail. It owns officeopen air retail. It owns office buildings. It owns apartments. It ownsbuildings. It owns apartments. It ownsbuildings. It owns apartments. It owns storage assets. But most significantly,storage assets. But most significantly,storage assets. But most significantly, it owns land. 2/3, 70% of the value ofit owns land. 2/3, 70% of the value ofit owns land. 2/3, 70% of the value of the company, at least the way thatthe company, at least the way thatthe company, at least the way that calculated by the management team, iscalculated by the management team, iscalculated by the management team, is land. Commercial landland. Commercial landland. Commercial land and residential land. And this land isand residential land. And this land isand residential land. And this land is not just scattered around the country.not just scattered around the country.not just scattered around the country. It's in we call master plan communities.It's in we call master plan communities.It's in we call master plan communities. I call them at this point, the big ones,I call them at this point, the big ones,I call them at this point, the big ones, master plan cities cuz they havemaster plan cities cuz they havemaster plan cities cuz they have high-rise office buildings and they look
high-rise office buildings and they lookhigh-rise office buildings and they look like real cities. And the business oflike real cities. And the business oflike real cities. And the business of the company is being the benign managerthe company is being the benign managerthe company is being the benign manager of these small cities and buildingof these small cities and buildingof these small cities and building office buildings when you need tenantsoffice buildings when you need tenantsoffice buildings when you need tenants need space and building apartments whenneed space and building apartments whenneed space and building apartments when people move in, selling lots to homepeople move in, selling lots to homepeople move in, selling lots to home builders. It's a very interestingbuilders. It's a very interestingbuilders. It's a very interesting business.business.business. But it's like a 50-year story.But it's like a 50-year story.But it's like a 50-year story. And a public market that wants to knowAnd a public market that wants to knowAnd a public market that wants to know how you're going to do next quarter.how you're going to do next quarter.how you're going to do next quarter. Actually, the company's announcingActually, the company's announcingActually, the company's announcing earnings tonight. I think the earningsearnings tonight. I think the earningsearnings tonight. I think the earnings call is tomorrow. But the earnings forcall is tomorrow. But the earnings forcall is tomorrow. But the earnings for the quarter never really matter for thisthe quarter never really matter for thisthe quarter never really matter for this company. For the year, they don't reallycompany. For the year, they don't reallycompany. For the year, they don't really matter. There isn't like an earnings permatter. There isn't like an earnings permatter. There isn't like an earnings per share metric that you can really rely onshare metric that you can really rely onshare metric that you can really rely on and think about the value of theand think about the value of theand think about the value of the business.business. So, the company's really struggled toSo, the company's really struggled toSo, the company's really struggled to find a long-term shareholderfind a long-term shareholderfind a long-term shareholder constituency. The stock has alwaysconstituency. The stock has alwaysconstituency. The stock has always traded at a very deep discount to
traded at a very deep discount totraded at a very deep discount to management's estimate of net assetmanagement's estimate of net assetmanagement's estimate of net asset value.value.value. 40% or so discount. It's sort of been a40% or so discount. It's sort of been a40% or so discount. It's sort of been a bit of an outlier in our portfoliobit of an outlier in our portfoliobit of an outlier in our portfolio because we own, for the most part, megabecause we own, for the most part, megabecause we own, for the most part, mega cap and large cap companies. We'recap and large cap companies. We'recap and large cap companies. We're minority shareholder, an influentialminority shareholder, an influentialminority shareholder, an influential minority. Then we sort of had thisminority. Then we sort of had thisminority. Then we sort of had this Howard Hughes thing and for years weHoward Hughes thing and for years weHoward Hughes thing and for years we tried to figure out what to do with it.tried to figure out what to do with it.tried to figure out what to do with it. And finally, we said, "Look, no one'sAnd finally, we said, "Look, no one'sAnd finally, we said, "Look, no one's going to care." We spun off the Southgoing to care." We spun off the Southgoing to care." We spun off the South Street Seaport assets. We did the sameStreet Seaport assets. We did the sameStreet Seaport assets. We did the same thing to Howard Hughes that we did tothing to Howard Hughes that we did tothing to Howard Hughes that we did to General Growth. We're like, "Okay, theGeneral Growth. We're like, "Okay, theGeneral Growth. We're like, "Okay, the overhang is we own this loss-making partoverhang is we own this loss-making partoverhang is we own this loss-making part of New York City downtown. We own aof New York City downtown. We own aof New York City downtown. We own a baseball team, minor league team. We ownbaseball team, minor league team. We ownbaseball team, minor league team. We own a baseball stadium. We own some aira baseball stadium. We own some aira baseball stadium. We own some air rights. No one's giving us value forrights. No one's giving us value forrights. No one's giving us value for this stuff. Let's spin it off in a newthis stuff. Let's spin it off in a newthis stuff. Let's spin it off in a new company. But as importantly, let'scompany. But as importantly, let'scompany. But as importantly, let's recruit a management team
recruit a management teamrecruit a management team that's well served to maximize value ofthat's well served to maximize value ofthat's well served to maximize value of these assets." And we hired a guy namedthese assets." And we hired a guy namedthese assets." And we hired a guy named Anton Nicodemus, really from those LasAnton Nicodemus, really from those LasAnton Nicodemus, really from those Las VegasVegasVegas casino world, entertainment world,casino world, entertainment world,casino world, entertainment world, gaming world. And we think he's thegaming world. And we think he's thegaming world. And we think he's the right guy to fix our little company. Butright guy to fix our little company. Butright guy to fix our little company. But our assumption was when we spun it off,our assumption was when we spun it off,our assumption was when we spun it off, magically, this would be the last thingmagically, this would be the last thingmagically, this would be the last thing we needed to do to get people to focuswe needed to do to get people to focuswe needed to do to get people to focus on the Howard Hughes story. Howardon the Howard Hughes story. Howardon the Howard Hughes story. Howard Hughes stock went downHughes stock went downHughes stock went down after we spun it off. Why? Becauseafter we spun it off. Why? Becauseafter we spun it off. Why? Because interest rates have gone up. Mortgageinterest rates have gone up. Mortgageinterest rates have gone up. Mortgage rates have gone up. People are concernedrates have gone up. People are concernedrates have gone up. People are concerned about what's going on, you know, homeabout what's going on, you know, homeabout what's going on, you know, home builders in a higher interest ratebuilders in a higher interest ratebuilders in a higher interest rate environment. There is some concern thatenvironment. There is some concern thatenvironment. There is some concern that some combination of tariffs,some combination of tariffs,some combination of tariffs, the volatility of the Trumpthe volatility of the Trumpthe volatility of the Trump administration, will lead to an economicadministration, will lead to an economicadministration, will lead to an economic downturn and people worry about lotdownturn and people worry about lotdownturn and people worry about lot sales in environment like that.sales in environment like that.sales in environment like that. The company also has its biggest
The company also has its biggestThe company also has its biggest income-producing asset is office spaceincome-producing asset is office spaceincome-producing asset is office space or office assets. And the work-from-homeor office assets. And the work-from-homeor office assets. And the work-from-home movement, you know, hopefully it'smovement, you know, hopefully it'smovement, you know, hopefully it's starting to head bearish on work fromstarting to head bearish on work fromstarting to head bearish on work from home now. But still, office assets arehome now. But still, office assets arehome now. But still, office assets are not the favored asset class. And thenot the favored asset class. And thenot the favored asset class. And the stock has kind of like languished wasstock has kind of like languished wasstock has kind of like languished was languishing in the low 60s. And we said,languishing in the low 60s. And we said,languishing in the low 60s. And we said, "Look, maybe we should just take it"Look, maybe we should just take it"Look, maybe we should just take it private and own it for that very longprivate and own it for that very longprivate and own it for that very long term."term."term." And that's what started this journey.And that's what started this journey.And that's what started this journey. That was August 6th when we filed ourThat was August 6th when we filed ourThat was August 6th when we filed our 13D.13D.13D. And we hired Jefferies. And we ran aAnd we hired Jefferies. And we ran aAnd we hired Jefferies. And we ran a process to raise enough capital to takeprocess to raise enough capital to takeprocess to raise enough capital to take the business private. Ultimately, afterthe business private. Ultimately, afterthe business private. Ultimately, after a several month process, we did not havea several month process, we did not havea several month process, we did not have anyone come forward to say, "Okay, Ianyone come forward to say, "Okay, Ianyone come forward to say, "Okay, I want to lead this thing." We had somewant to lead this thing." We had somewant to lead this thing." We had some people expressed interest in possiblypeople expressed interest in possiblypeople expressed interest in possibly participating depending on the terms. Weparticipating depending on the terms. Weparticipating depending on the terms. We struggled to raise the money we needed
struggled to raise the money we neededstruggled to raise the money we needed to do this transaction. And we went toto do this transaction. And we went toto do this transaction. And we went to plan B.plan B.plan B. Plan B was, "Okay, well, maybe we leavePlan B was, "Okay, well, maybe we leavePlan B was, "Okay, well, maybe we leave the company public. We buy a biggerthe company public. We buy a biggerthe company public. We buy a bigger stake. It's not going to make it as astake. It's not going to make it as astake. It's not going to make it as a pure real estate company. I've alwayspure real estate company. I've alwayspure real estate company. I've always had this ambition to build a rival, ifhad this ambition to build a rival, ifhad this ambition to build a rival, if you will, to Berkshire Hathaway. Let'syou will, to Berkshire Hathaway. Let'syou will, to Berkshire Hathaway. Let's create our own modern-day version ofcreate our own modern-day version ofcreate our own modern-day version of Berkshire Hathaway and we'll make HowardBerkshire Hathaway and we'll make HowardBerkshire Hathaway and we'll make Howard Hughes the real estate assets the baseHughes the real estate assets the baseHughes the real estate assets the base and we'll build off there." And ourand we'll build off there." And ourand we'll build off there." And our transaction that we proposed, which is atransaction that we proposed, which is atransaction that we proposed, which is a simpler version of the first one, issimpler version of the first one, issimpler version of the first one, is simply we'll just buy more stock in thesimply we'll just buy more stock in thesimply we'll just buy more stock in the company. We'll buy another 10 millioncompany. We'll buy another 10 millioncompany. We'll buy another 10 million shares. That will take us from 18.9 toshares. That will take us from 18.9 toshares. That will take us from 18.9 to 29.9.29.9.29.9. That will give us 48% of the shares.That will give us 48% of the shares.That will give us 48% of the shares. I'll take an executive role along withI'll take an executive role along withI'll take an executive role along with Ryan Israel and Ben Hakim, kind of threeRyan Israel and Ben Hakim, kind of threeRyan Israel and Ben Hakim, kind of three of the key principles, three members ofof the key principles, three members ofof the key principles, three members of the Pershing Square investment team. And
the Pershing Square investment team. Andthe Pershing Square investment team. And we'll use the cash that we put into thewe'll use the cash that we put into thewe'll use the cash that we put into the company to start acquiring non-realcompany to start acquiring non-realcompany to start acquiring non-real estate related operating companies andestate related operating companies andestate related operating companies and businesses that meet our criteria. Andbusinesses that meet our criteria. Andbusinesses that meet our criteria. And that's the basic idea.that's the basic idea.that's the basic idea. Are you planning on buying minorityAre you planning on buying minorityAre you planning on buying minority stakes the way Buffett does where he'llstakes the way Buffett does where he'llstakes the way Buffett does where he'll buy X amount of Coke and just sit there?buy X amount of Coke and just sit there?buy X amount of Coke and just sit there? Or do you want to buy controllingOr do you want to buy controllingOr do you want to buy controlling interests? Or both? The nature of a US Cinterests? Or both? The nature of a US Cinterests? Or both? The nature of a US C corporation operating company, in ordercorporation operating company, in ordercorporation operating company, in order to maintain that status and not beto maintain that status and not beto maintain that status and not be investment company, the substantialinvestment company, the substantialinvestment company, the substantial majority of your assets have to be inmajority of your assets have to be inmajority of your assets have to be in controlling stakes or 100% stakes incontrolling stakes or 100% stakes incontrolling stakes or 100% stakes in public and private companies. So, thatpublic and private companies. So, thatpublic and private companies. So, that is our business plan. On the margin,is our business plan. On the margin,is our business plan. On the margin, could we own a minority stake incould we own a minority stake incould we own a minority stake in something? It's possible, but it wouldsomething? It's possible, but it wouldsomething? It's possible, but it would more likely be a minority stake on amore likely be a minority stake on amore likely be a minority stake on a path to control. So, Pershing Squarepath to control. So, Pershing Squarepath to control. So, Pershing Square today has one strategy, which is we have
today has one strategy, which is we havetoday has one strategy, which is we have a number of funds that all invest in thea number of funds that all invest in thea number of funds that all invest in the same companies, which is we buy minoritysame companies, which is we buy minoritysame companies, which is we buy minority stakes in a Google, let's say, or anstakes in a Google, let's say, or anstakes in a Google, let's say, or an Uber. We're an important influentialUber. We're an important influentialUber. We're an important influential shareholder. We're not controllingshareholder. We're not controllingshareholder. We're not controlling shareholder. And we own the stakes forshareholder. And we own the stakes forshareholder. And we own the stakes for the long term. But, you know, liquidthe long term. But, you know, liquidthe long term. But, you know, liquid public stakes companies. The strategy ofpublic stakes companies. The strategy ofpublic stakes companies. The strategy of Howard Hughes, if this transaction goesHoward Hughes, if this transaction goesHoward Hughes, if this transaction goes forward, is for us to buy smaller,forward, is for us to buy smaller,forward, is for us to buy smaller, principally private companies orprincipally private companies orprincipally private companies or controlling interests in small capcontrolling interests in small capcontrolling interests in small cap companies. Certainly, that's how we'llcompanies. Certainly, that's how we'llcompanies. Certainly, that's how we'll start.start.start. So, you can buy controlling interests inSo, you can buy controlling interests inSo, you can buy controlling interests in private businesses. One of the problemsprivate businesses. One of the problemsprivate businesses. One of the problems that HHH has now is people don't knowthat HHH has now is people don't knowthat HHH has now is people don't know how to value it. It's complicated. Theyhow to value it. It's complicated. Theyhow to value it. It's complicated. They have to do a ton of due diligence.have to do a ton of due diligence.have to do a ton of due diligence. Why is this time going to be differentWhy is this time going to be differentWhy is this time going to be different if you own a bunch of stakes in prettyif you own a bunch of stakes in prettyif you own a bunch of stakes in pretty much privately held businesses?much privately held businesses?
much privately held businesses? So, one, we'll have very good disclosureSo, one, we'll have very good disclosureSo, one, we'll have very good disclosure and I think we'll do a good job ofand I think we'll do a good job ofand I think we'll do a good job of explaining what we're up to.explaining what we're up to.explaining what we're up to. Two, I think our track record is public,Two, I think our track record is public,Two, I think our track record is public, but we've had an excellent track recordbut we've had an excellent track recordbut we've had an excellent track record in doing so. And most importantly, wein doing so. And most importantly, wein doing so. And most importantly, we think there's a large base of investorsthink there's a large base of investorsthink there's a large base of investors who want to invest alongside us and willwho want to invest alongside us and willwho want to invest alongside us and will trust our judgment. They'll trust buttrust our judgment. They'll trust buttrust our judgment. They'll trust but verify and they'll understand theverify and they'll understand theverify and they'll understand the strategy as we explain it to them. Thestrategy as we explain it to them. Thestrategy as we explain it to them. The problem with a pure play master planproblem with a pure play master planproblem with a pure play master plan community company, it has enormouscommunity company, it has enormouscommunity company, it has enormous exposure economically to interest rates,exposure economically to interest rates,exposure economically to interest rates, home building. And also, it's not anhome building. And also, it's not anhome building. And also, it's not an investment grade company that hasinvestment grade company that hasinvestment grade company that has continuous access to low-cost capital.continuous access to low-cost capital.continuous access to low-cost capital. I think Howard Hughes is an amazingI think Howard Hughes is an amazingI think Howard Hughes is an amazing business, but it should be part of abusiness, but it should be part of abusiness, but it should be part of a portfolio of businesses. And again,portfolio of businesses. And again,portfolio of businesses. And again, there's precedent for what we want to dothere's precedent for what we want to dothere's precedent for what we want to do here.here.here. I said a modern-day Berkshire Hathaway,
I said a modern-day Berkshire Hathaway,I said a modern-day Berkshire Hathaway, but we could also throw in Leucadiabut we could also throw in Leucadiabut we could also throw in Leucadia National Corp into the mix. I'm a bigNational Corp into the mix. I'm a bigNational Corp into the mix. I'm a big Joe Steinberg fan and the incoming fanJoe Steinberg fan and the incoming fanJoe Steinberg fan and the incoming fan of, blessed memory, Joe is still withof, blessed memory, Joe is still withof, blessed memory, Joe is still with us. Active, he's now chairs Jefferies.us. Active, he's now chairs Jefferies.us. Active, he's now chairs Jefferies. They do a good job explaining theirThey do a good job explaining theirThey do a good job explaining their business to shareholders or they didbusiness to shareholders or they didbusiness to shareholders or they did when they ran it as Leucadia Nationalwhen they ran it as Leucadia Nationalwhen they ran it as Leucadia National and the stock did very well over a veryand the stock did very well over a veryand the stock did very well over a very long period of time. The key islong period of time. The key islong period of time. The key is compounding intrinsic value of thecompounding intrinsic value of thecompounding intrinsic value of the business. And the stock will trade plusbusiness. And the stock will trade plusbusiness. And the stock will trade plus or minus to that intrinsic value overor minus to that intrinsic value overor minus to that intrinsic value over time. And as the manager of thattime. And as the manager of thattime. And as the manager of that business, my job as chief capitalbusiness, my job as chief capitalbusiness, my job as chief capital allocator would be to make sure that weallocator would be to make sure that weallocator would be to make sure that we take advantage of opportunities thattake advantage of opportunities thattake advantage of opportunities that present themselves.present themselves.present themselves. I do think there's a lot more hope for aI do think there's a lot more hope for aI do think there's a lot more hope for a diversified holding company that we justdiversified holding company that we justdiversified holding company that we just invest where a management team has comeinvest where a management team has comeinvest where a management team has come in and invested 900 million of their ownin and invested 900 million of their own
in and invested 900 million of their own capitalcapitalcapital and put a stake in the ground that we'reand put a stake in the ground that we'reand put a stake in the ground that we're going to build this into somethinggoing to build this into somethinggoing to build this into something interesting and have a good track recordinteresting and have a good track recordinteresting and have a good track record for doing so. We have an amazing teamfor doing so. We have an amazing teamfor doing so. We have an amazing team whose background is actually doingwhose background is actually doingwhose background is actually doing precisely this, private equity. Now, ifprecisely this, private equity. Now, ifprecisely this, private equity. Now, if you look at the Pershing Square team,you look at the Pershing Square team,you look at the Pershing Square team, it's Blackstone, KKR University, Hellmanit's Blackstone, KKR University, Hellmanit's Blackstone, KKR University, Hellman & Friedman, Warburg Pincus,& Friedman, Warburg Pincus,& Friedman, Warburg Pincus, Apollo. It's a team that was trained inApollo. It's a team that was trained inApollo. It's a team that was trained in private equity. We haven't been able toprivate equity. We haven't been able toprivate equity. We haven't been able to use those resources and now we will haveuse those resources and now we will haveuse those resources and now we will have a platform to do that.a platform to do that.a platform to do that. So, you're going to diversify it awaySo, you're going to diversify it awaySo, you're going to diversify it away from the master plan community business.from the master plan community business.from the master plan community business. Let's say 3, 5, 10 years from now, whatLet's say 3, 5, 10 years from now, whatLet's say 3, 5, 10 years from now, what percent of the value of the companypercent of the value of the companypercent of the value of the company would you envision being MPCs versuswould you envision being MPCs versuswould you envision being MPCs versus whatever it is you buy? Well, I expectwhatever it is you buy? Well, I expectwhatever it is you buy? Well, I expect the MPC business to continue to compoundthe MPC business to continue to compoundthe MPC business to continue to compound at a nice rate over time, you know,at a nice rate over time, you know,at a nice rate over time, you know, double-digit rate over time. Our plan is
double-digit rate over time. Our plan isdouble-digit rate over time. Our plan is to continue. The team there isto continue. The team there isto continue. The team there is excellent. David O'Reilly,excellent. David O'Reilly,excellent. David O'Reilly, Carlos, run that operation. And asCarlos, run that operation. And asCarlos, run that operation. And as importantly, the presidents of ourimportantly, the presidents of ourimportantly, the presidents of our various MPCs have done a fabulous job asvarious MPCs have done a fabulous job asvarious MPCs have done a fabulous job as kind of chief developers. We love thatkind of chief developers. We love thatkind of chief developers. We love that business and that business is going tobusiness and that business is going tobusiness and that business is going to continue. So, we're not like talkingcontinue. So, we're not like talkingcontinue. So, we're not like talking about liquidating that business andabout liquidating that business andabout liquidating that business and repurposing the capital elsewhere. So,repurposing the capital elsewhere. So,repurposing the capital elsewhere. So, that business is going to grow. Andthat business is going to grow. Andthat business is going to grow. And then, we have 900 million of capitalthen, we have 900 million of capitalthen, we have 900 million of capital that we're going to use as equity tothat we're going to use as equity tothat we're going to use as equity to invest in businesses that are probablyinvest in businesses that are probablyinvest in businesses that are probably more likely to grow at a faster ratemore likely to grow at a faster ratemore likely to grow at a faster rate than a real estate MPC business can growthan a real estate MPC business can growthan a real estate MPC business can grow at. And depending on how quickly weat. And depending on how quickly weat. And depending on how quickly we deploy that capital and what kind ofdeploy that capital and what kind ofdeploy that capital and what kind of businesses, that will affect the mix. 10businesses, that will affect the mix. 10businesses, that will affect the mix. 10 years from now, majority of the assetsyears from now, majority of the assetsyears from now, majority of the assets will probably be other than at the core,will probably be other than at the core,will probably be other than at the core, the current MPC business. That's not to
the current MPC business. That's not tothe current MPC business. That's not to say we won't do other really interestingsay we won't do other really interestingsay we won't do other really interesting real estate transactions if they comereal estate transactions if they comereal estate transactions if they come around. But I do think the focus here isaround. But I do think the focus here isaround. But I do think the focus here is going to be on operating companies thatgoing to be on operating companies thatgoing to be on operating companies that generate recurring and growing cash flowgenerate recurring and growing cash flowgenerate recurring and growing cash flow streams that meet the Pershing Squarestreams that meet the Pershing Squarestreams that meet the Pershing Square standards. We put out our investmentstandards. We put out our investmentstandards. We put out our investment principles pretty publicly. They kind ofprinciples pretty publicly. They kind ofprinciples pretty publicly. They kind of meet our investment principles.meet our investment principles.meet our investment principles. And you're going to be the CEO. Do youAnd you're going to be the CEO. Do youAnd you're going to be the CEO. Do you imagine yourself more Buffett or Gregimagine yourself more Buffett or Gregimagine yourself more Buffett or Greg Abel in terms of getting involved in theAbel in terms of getting involved in theAbel in terms of getting involved in the individual businesses?individual businesses?individual businesses? The way we've approached investing inThe way we've approached investing inThe way we've approached investing in companies today is we don't want to becompanies today is we don't want to becompanies today is we don't want to be in a position to have to run thein a position to have to run thein a position to have to run the day-to-day operations of any companyday-to-day operations of any companyday-to-day operations of any company much we invest, what we want to do ismuch we invest, what we want to do ismuch we invest, what we want to do is make sure that the right person'smake sure that the right person'smake sure that the right person's running it. So, Chipotle, Steve Ellsrunning it. So, Chipotle, Steve Ellsrunning it. So, Chipotle, Steve Ells needed help, we bought 10% of the stock,needed help, we bought 10% of the stock,needed help, we bought 10% of the stock, we joined that board, we recruited Brian
we joined that board, we recruited Brianwe joined that board, we recruited Brian Niccol to run that business. We broughtNiccol to run that business. We broughtNiccol to run that business. We brought Hunter Harrison to Canadian Pacific, weHunter Harrison to Canadian Pacific, weHunter Harrison to Canadian Pacific, we brought Safra Catz tobrought Safra Catz tobrought Safra Catz to Air Products. And I would say moreAir Products. And I would say moreAir Products. And I would say more recently we found companies that alreadyrecently we found companies that alreadyrecently we found companies that already had excellent management. We're big Darahad excellent management. We're big Darahad excellent management. We're big Dara fans at Uber. We really like really thefans at Uber. We really like really thefans at Uber. We really like really the management teams of all the companiesmanagement teams of all the companiesmanagement teams of all the companies that we are shareholders of today. Thethat we are shareholders of today. Thethat we are shareholders of today. The key for us is finding someone who cankey for us is finding someone who cankey for us is finding someone who can run the business. Our job is to overseerun the business. Our job is to overseerun the business. Our job is to oversee how's management doing, make sure theyhow's management doing, make sure theyhow's management doing, make sure they have the right incentives, make surehave the right incentives, make surehave the right incentives, make sure they make the right capital allocationthey make the right capital allocationthey make the right capital allocation decisions. But we do view our job asdecisions. But we do view our job asdecisions. But we do view our job as more chief capital allocator. Maybe wemore chief capital allocator. Maybe wemore chief capital allocator. Maybe we focus on designingfocus on designingfocus on designing compensation incentives, and then makingcompensation incentives, and then makingcompensation incentives, and then making the hard decision sometimes to replace athe hard decision sometimes to replace athe hard decision sometimes to replace a leader. But we don't run the businessesleader. But we don't run the businessesleader. But we don't run the businesses day-to-day. So, Greg Abel, I think itday-to-day. So, Greg Abel, I think itday-to-day. So, Greg Abel, I think it was more of an operator. Now you're
was more of an operator. Now you'rewas more of an operator. Now you're going to have more of an operator ingoing to have more of an operator ingoing to have more of an operator in charge of Berkshire, and I think there'scharge of Berkshire, and I think there'scharge of Berkshire, and I think there's a lot of value that can be created ata lot of value that can be created ata lot of value that can be created at Berkshire with better operations. IBerkshire with better operations. IBerkshire with better operations. I mean, Burlington Northern, for example,mean, Burlington Northern, for example,mean, Burlington Northern, for example, is the biggest railroad, but it'sis the biggest railroad, but it'sis the biggest railroad, but it's probably the least efficiently operatedprobably the least efficiently operatedprobably the least efficiently operated of all the railroads. I think Buffett isof all the railroads. I think Buffett isof all the railroads. I think Buffett is very reluctant to in any way getvery reluctant to in any way getvery reluctant to in any way get involved in fixing companies, and he hasinvolved in fixing companies, and he hasinvolved in fixing companies, and he has CEOs that he probably should haveCEOs that he probably should haveCEOs that he probably should have replaced years ago. I think the nextreplaced years ago. I think the nextreplaced years ago. I think the next generation of leadership will be ageneration of leadership will be ageneration of leadership will be a little more disciplined about makinglittle more disciplined about makinglittle more disciplined about making sure the right people run the companies.sure the right people run the companies.sure the right people run the companies. But we view our role as capitalBut we view our role as capitalBut we view our role as capital allocation, certainly beginning of lifeallocation, certainly beginning of lifeallocation, certainly beginning of life of this company, identifyingof this company, identifyingof this company, identifying transactions, executing on them after wetransactions, executing on them after wetransactions, executing on them after we do proper due diligence, making sure thedo proper due diligence, making sure thedo proper due diligence, making sure the right person's running them, giving themright person's running them, giving themright person's running them, giving them the right incentives, and letting them
the right incentives, and letting themthe right incentives, and letting them do their thing.do their thing.do their thing. We'll be back with more in just aWe'll be back with more in just aWe'll be back with more in just a moment. But first, a quick break to tellmoment. But first, a quick break to tellmoment. But first, a quick break to tell you about the Boyer Value Group.you about the Boyer Value Group.you about the Boyer Value Group. Since 1975,Since 1975,Since 1975, the Boyer Value Group has beenthe Boyer Value Group has beenthe Boyer Value Group has been uncovering investment opportunities inuncovering investment opportunities inuncovering investment opportunities in the US stock market utilizing a privatethe US stock market utilizing a privatethe US stock market utilizing a private equity approach to public markets.equity approach to public markets.equity approach to public markets. Whether it's through our institutionalWhether it's through our institutionalWhether it's through our institutional research product or money managementresearch product or money managementresearch product or money management services, our goal remains the same,services, our goal remains the same,services, our goal remains the same, finding value where others aren'tfinding value where others aren'tfinding value where others aren't looking.looking.looking. Want to learn more? VisitWant to learn more? VisitWant to learn more? Visit boyervaluegroup.com,boyervaluegroup.com,boyervaluegroup.com, check out our Substack, or follow us oncheck out our Substack, or follow us oncheck out our Substack, or follow us on Twitter @boyervalue.Twitter @boyervalue.Twitter @boyervalue. Now back to the show.Now back to the show.Now back to the show. Going back in terms of the discount thatGoing back in terms of the discount thatGoing back in terms of the discount that we were talking about in conglomerateswe were talking about in conglomerateswe were talking about in conglomerates trading at a discount, you have atrading at a discount, you have atrading at a discount, you have a European listed fund that's done quiteEuropean listed fund that's done quiteEuropean listed fund that's done quite well over time, but it trades at awell over time, but it trades at awell over time, but it trades at a perpetual discount. I mean, aperpetual discount. I mean, aperpetual discount. I mean, a significant. I mean, if you really
significant. I mean, if you reallysignificant. I mean, if you really wanted to buy Howard Hughes cheaply now,wanted to buy Howard Hughes cheaply now,wanted to buy Howard Hughes cheaply now, you just buy part of your fund there andyou just buy part of your fund there andyou just buy part of your fund there and get it at a 30% discount. You have aget it at a 30% discount. You have aget it at a 30% discount. You have a huge following on Twitter, X, whateverhuge following on Twitter, X, whateverhuge following on Twitter, X, whatever you want to call it. How come youyou want to call it. How come youyou want to call it. How come you haven't been able to close that gap, andhaven't been able to close that gap, andhaven't been able to close that gap, and why is it going to be different thiswhy is it going to be different thiswhy is it going to be different this time?time?time? Imagine, theoretically, there's aImagine, theoretically, there's aImagine, theoretically, there's a closed-end fund that trades in Europeclosed-end fund that trades in Europeclosed-end fund that trades in Europe that's managed by a US investor thatthat's managed by a US investor thatthat's managed by a US investor that invests in US securities, and thereforeinvests in US securities, and thereforeinvests in US securities, and therefore the principal market for that, you wouldthe principal market for that, you wouldthe principal market for that, you would think,think,think, absent it being offshore, would be USabsent it being offshore, would be USabsent it being offshore, would be US investors. But for regulatory reasons,investors. But for regulatory reasons,investors. But for regulatory reasons, that entity can't be in the Unitedthat entity can't be in the Unitedthat entity can't be in the United States, it has to be offshore. So,States, it has to be offshore. So,States, it has to be offshore. So, that's one problem. But the bigger issuethat's one problem. But the bigger issuethat's one problem. But the bigger issue is that the tax consequences for a USis that the tax consequences for a USis that the tax consequences for a US investor investing in an offshoreinvestor investing in an offshoreinvestor investing in an offshore closed-end fund, in fact, one that hasclosed-end fund, in fact, one that hasclosed-end fund, in fact, one that has very low tax basis and its assets arevery low tax basis and its assets are
very low tax basis and its assets are very negative. For example, if anvery negative. For example, if anvery negative. For example, if an investor invests in an offshoreinvestor invests in an offshoreinvestor invests in an offshore closed-end fund and its basis in companyclosed-end fund and its basis in companyclosed-end fund and its basis in company ABC is $10 a share, and the stock todayABC is $10 a share, and the stock todayABC is $10 a share, and the stock today is 100, and they buyis 100, and they buyis 100, and they buy today, and that stock ends up being soldtoday, and that stock ends up being soldtoday, and that stock ends up being sold by the manager of that closed-end fund,by the manager of that closed-end fund,by the manager of that closed-end fund, the new investor gets $90 of gain, eventhe new investor gets $90 of gain, eventhe new investor gets $90 of gain, even though they didn't experience any of thethough they didn't experience any of thethough they didn't experience any of the appreciation in the stock. So, imagineappreciation in the stock. So, imagineappreciation in the stock. So, imagine there's a closed-end fund with a basisthere's a closed-end fund with a basisthere's a closed-end fund with a basis in the underlying assets is a fractionin the underlying assets is a fractionin the underlying assets is a fraction of where the stock trades. On that issueof where the stock trades. On that issueof where the stock trades. On that issue alone, it makes it impossible for a USalone, it makes it impossible for a USalone, it makes it impossible for a US investor to own it. And then imagine theinvestor to own it. And then imagine theinvestor to own it. And then imagine the US regulator says, "I don't likeUS regulator says, "I don't likeUS regulator says, "I don't like American investors, particularly retail,American investors, particularly retail,American investors, particularly retail, to invest in offshore hedge funds." Andto invest in offshore hedge funds." Andto invest in offshore hedge funds." And so the regulator makes it very difficultso the regulator makes it very difficultso the regulator makes it very difficult for brokerage firms to allow theirfor brokerage firms to allow theirfor brokerage firms to allow their clients to buy it. And then imagine thatclients to buy it. And then imagine thatclients to buy it. And then imagine that entity does extremely well the last 7
entity does extremely well the last 7entity does extremely well the last 7 years and compounds at mid-20s, and ityears and compounds at mid-20s, and ityears and compounds at mid-20s, and it grows to become the second largestgrows to become the second largestgrows to become the second largest closed-end fund in the world. So, theclosed-end fund in the world. So, theclosed-end fund in the world. So, the supply has increased massively, but thesupply has increased massively, but thesupply has increased massively, but the principal source of demand has beenprincipal source of demand has beenprincipal source of demand has been eliminated due to tax and regulatoryeliminated due to tax and regulatoryeliminated due to tax and regulatory reasons. You would expect a discount toreasons. You would expect a discount toreasons. You would expect a discount to emerge, and a wide one at that period.emerge, and a wide one at that period.emerge, and a wide one at that period. Compare that to a US C corp, whereCompare that to a US C corp, whereCompare that to a US C corp, where anyone can own it, you can buy oneanyone can own it, you can buy oneanyone can own it, you can buy one share, or you can buy a fractional shareshare, or you can buy a fractional shareshare, or you can buy a fractional share through Robinhood or one of the otherthrough Robinhood or one of the otherthrough Robinhood or one of the other sites, but one share for $74, and anyonesites, but one share for $74, and anyonesites, but one share for $74, and anyone can own it really without restrictioncan own it really without restrictioncan own it really without restriction globally. The universe of investors thatglobally. The universe of investors thatglobally. The universe of investors that would like to find another Berkshire iswould like to find another Berkshire iswould like to find another Berkshire is much broader. Ryan and I gave a talk atmuch broader. Ryan and I gave a talk atmuch broader. Ryan and I gave a talk at Berkshire Hathaway meeting last year,Berkshire Hathaway meeting last year,Berkshire Hathaway meeting last year, we're going to go back this year, and wewe're going to go back this year, and wewe're going to go back this year, and we opened it up. It was sponsored by UBS,opened it up. It was sponsored by UBS,opened it up. It was sponsored by UBS, we had 300 seats in the room,we had 300 seats in the room,
we had 300 seats in the room, and the seats disappeared,and the seats disappeared,and the seats disappeared, embarrassingly to say, like a Taylorembarrassingly to say, like a Taylorembarrassingly to say, like a Taylor Swift concert.Swift concert.Swift concert. We had to have security keeping peopleWe had to have security keeping peopleWe had to have security keeping people from banging on the door. So, Pershingfrom banging on the door. So, Pershingfrom banging on the door. So, Pershing Square has an unusual following amongSquare has an unusual following amongSquare has an unusual following among investors, among retail investors, amonginvestors, among retail investors, amonginvestors, among retail investors, among institutional investors, and I thinkinstitutional investors, and I thinkinstitutional investors, and I think that group would love the opportunity tothat group would love the opportunity tothat group would love the opportunity to invest alongside us, not in a hedge fundinvest alongside us, not in a hedge fundinvest alongside us, not in a hedge fund where they're restricted to invest orwhere they're restricted to invest orwhere they're restricted to invest or it's illiquid, i.e., you have to lockit's illiquid, i.e., you have to lockit's illiquid, i.e., you have to lock your money up, but in a public vehicleyour money up, but in a public vehicleyour money up, but in a public vehicle where we offer a bargain arrangementwhere we offer a bargain arrangementwhere we offer a bargain arrangement from compensation perspective. For thefrom compensation perspective. For thefrom compensation perspective. For the first time, we don't charge at 20 or 16%first time, we don't charge at 20 or 16%first time, we don't charge at 20 or 16% incentive fee. We did a spaces, whichincentive fee. We did a spaces, whichincentive fee. We did a spaces, which I'm sure you listened to,I'm sure you listened to,I'm sure you listened to, about this transaction, and we had 2,500about this transaction, and we had 2,500about this transaction, and we had 2,500 or so, principally retail, uh thereor so, principally retail, uh thereor so, principally retail, uh there probably some institutions, hopefullyprobably some institutions, hopefullyprobably some institutions, hopefully many, asking questions and makingmany, asking questions and makingmany, asking questions and making comments, and it was like a Berkshire
comments, and it was like a Berkshirecomments, and it was like a Berkshire meeting in a way. And I think that is ameeting in a way. And I think that is ameeting in a way. And I think that is a likely base of shareholder demand forlikely base of shareholder demand forlikely base of shareholder demand for this entity, and I think it's the basethis entity, and I think it's the basethis entity, and I think it's the base of that shareholder group, retail, isof that shareholder group, retail, isof that shareholder group, retail, is the largest base of demand for anythe largest base of demand for anythe largest base of demand for any company ultimately. Vastly overwhelmscompany ultimately. Vastly overwhelmscompany ultimately. Vastly overwhelms the very niche market of people who wantthe very niche market of people who wantthe very niche market of people who want to invest in a pure-play master planto invest in a pure-play master planto invest in a pure-play master plan community company that has a very smallcommunity company that has a very smallcommunity company that has a very small market cap and public float.market cap and public float.market cap and public float. Have you ever done an analysis of, let'sHave you ever done an analysis of, let'sHave you ever done an analysis of, let's say, your Twitter followers or whatnotsay, your Twitter followers or whatnotsay, your Twitter followers or whatnot to see can they really buy a meaningfulto see can they really buy a meaningfulto see can they really buy a meaningful amount of shares? I don't know what kindamount of shares? I don't know what kindamount of shares? I don't know what kind of information Twitter would give you. Iof information Twitter would give you. Iof information Twitter would give you. I think it's something need to work on. Ithink it's something need to work on. Ithink it's something need to work on. I would love to know more about mywould love to know more about mywould love to know more about my followers. Clearly, 1.6 million, some offollowers. Clearly, 1.6 million, some offollowers. Clearly, 1.6 million, some of them will be able to buy lots, othersthem will be able to buy lots, othersthem will be able to buy lots, others maybe to share. I think all of them canmaybe to share. I think all of them canmaybe to share. I think all of them can own it, so to speak. Here's my fun wayown it, so to speak. Here's my fun way
own it, so to speak. Here's my fun way to look at it. The public float ofto look at it. The public float ofto look at it. The public float of Howard Hughes, we own 18.9 million outHoward Hughes, we own 18.9 million outHoward Hughes, we own 18.9 million out of called 50 million shares, or 31of called 50 million shares, or 31of called 50 million shares, or 31 million shares. So, if each of mymillion shares. So, if each of mymillion shares. So, if each of my followers buys 20 shares, that accountsfollowers buys 20 shares, that accountsfollowers buys 20 shares, that accounts for the entire public float. Last year,for the entire public float. Last year,for the entire public float. Last year, Pershing Square Capital Management,Pershing Square Capital Management,Pershing Square Capital Management, which is different than Pershing Squarewhich is different than Pershing Squarewhich is different than Pershing Square Holdings, you announced a sale for aboutHoldings, you announced a sale for aboutHoldings, you announced a sale for about 10% for a little over a billion dollars.10% for a little over a billion dollars.10% for a little over a billion dollars. Yeah, at the time you announced theYeah, at the time you announced theYeah, at the time you announced the proceeds were to be used for anchorproceeds were to be used for anchorproceeds were to be used for anchor investments, fund launches. Did you haveinvestments, fund launches. Did you haveinvestments, fund launches. Did you have HHH in the back of your mind when youHHH in the back of your mind when youHHH in the back of your mind when you sold these shares?sold these shares?sold these shares? We thought of it after that transactionWe thought of it after that transactionWe thought of it after that transaction closed.closed.closed. You don't seem like someone who wouldYou don't seem like someone who wouldYou don't seem like someone who would have trouble raising money. I know youhave trouble raising money. I know youhave trouble raising money. I know you had difficulties with the closed-endhad difficulties with the closed-endhad difficulties with the closed-end fund, but that's for other reasons. Whyfund, but that's for other reasons. Whyfund, but that's for other reasons. Why would you need to sell shares in yourwould you need to sell shares in yourwould you need to sell shares in your company in order to have anchorcompany in order to have anchor
company in order to have anchor investors? It seems like you would haveinvestors? It seems like you would haveinvestors? It seems like you would have no problem attracting people on theirno problem attracting people on theirno problem attracting people on their own.own.own. There were several reasons why I sold anThere were several reasons why I sold anThere were several reasons why I sold an interest in the management company. Theinterest in the management company. Theinterest in the management company. The principal one was in the world whereprincipal one was in the world whereprincipal one was in the world where Bill Gates gets hit by a pie truck.Bill Gates gets hit by a pie truck.Bill Gates gets hit by a pie truck. Number one, I want Pershing Square toNumber one, I want Pershing Square toNumber one, I want Pershing Square to survive. And two, I didn't want my wifesurvive. And two, I didn't want my wifesurvive. And two, I didn't want my wife to own an interest in a private hedgeto own an interest in a private hedgeto own an interest in a private hedge fund as her principal asset. I thoughtfund as her principal asset. I thoughtfund as her principal asset. I thought the biggest proof point that Pershingthe biggest proof point that Pershingthe biggest proof point that Pershing Square can survive Bill getting hit by aSquare can survive Bill getting hit by aSquare can survive Bill getting hit by a pie truck, if I can convince a group ofpie truck, if I can convince a group ofpie truck, if I can convince a group of sophisticated investors that there wassophisticated investors that there wassophisticated investors that there was enormous depth to the Pershing Squareenormous depth to the Pershing Squareenormous depth to the Pershing Square organization, that Ryan is a superb CIO,organization, that Ryan is a superb CIO,organization, that Ryan is a superb CIO, that business functions very differentlythat business functions very differentlythat business functions very differently today than it did 10, 15, 20 years ago.today than it did 10, 15, 20 years ago.today than it did 10, 15, 20 years ago. So, I achieved that objective bySo, I achieved that objective bySo, I achieved that objective by bringing in a group of sophisticatedbringing in a group of sophisticatedbringing in a group of sophisticated investors, 20-odd family offices, six orinvestors, 20-odd family offices, six or
investors, 20-odd family offices, six or so institutions, and from the momentso institutions, and from the momentso institutions, and from the moment they came in, I've been running it as ifthey came in, I've been running it as ifthey came in, I've been running it as if it were a public company in terms of theit were a public company in terms of theit were a public company in terms of the nature of the disclosure. We'renature of the disclosure. We'renature of the disclosure. We're operating with an independent board ofoperating with an independent board ofoperating with an independent board of directors. Again, I'm hoping to live adirectors. Again, I'm hoping to live adirectors. Again, I'm hoping to live a very long time, but it's that kind of avery long time, but it's that kind of avery long time, but it's that kind of a plan. We didn't really want to takeplan. We didn't really want to takeplan. We didn't really want to take money off the table, or we're notmoney off the table, or we're notmoney off the table, or we're not looking to cash out. I run a moneylooking to cash out. I run a moneylooking to cash out. I run a money management firm and a research firm, andmanagement firm and a research firm, andmanagement firm and a research firm, and I speak to a lot of managers, and we'veI speak to a lot of managers, and we'veI speak to a lot of managers, and we've written favorably about Howard Hugheswritten favorably about Howard Hugheswritten favorably about Howard Hughes for too long. You, too, huh?for too long. You, too, huh?for too long. You, too, huh? Hasn't been one of our better calls.Hasn't been one of our better calls.Hasn't been one of our better calls. Howard Hughes is like Waiting for Godot,Howard Hughes is like Waiting for Godot,Howard Hughes is like Waiting for Godot, if you saw the play. Yes.if you saw the play. Yes.if you saw the play. Yes. In terms of two complaints I'm hearing,In terms of two complaints I'm hearing,In terms of two complaints I'm hearing, and I'm not part of any group for any ofand I'm not part of any group for any ofand I'm not part of any group for any of that kind of stuff from my complaintsthat kind of stuff from my complaintsthat kind of stuff from my complaints people, but it's pricepeople, but it's pricepeople, but it's price and the management fee. And actually aand the management fee. And actually aand the management fee. And actually a third that emerged. I wrote a letter, I
third that emerged. I wrote a letter, Ithird that emerged. I wrote a letter, I thought I did it in a respectful way. Ithought I did it in a respectful way. Ithought I did it in a respectful way. I guess I did, because you appeared on theguess I did, because you appeared on theguess I did, because you appeared on the podcast voicing my displeasure on thepodcast voicing my displeasure on thepodcast voicing my displeasure on the deal. So, there's two things, it's thedeal. So, there's two things, it's thedeal. So, there's two things, it's the price, it's the management fee, and nowprice, it's the management fee, and nowprice, it's the management fee, and now lack of a shareholder vote, which peoplelack of a shareholder vote, which peoplelack of a shareholder vote, which people are really upset with. I mean, if youare really upset with. I mean, if youare really upset with. I mean, if you were in my shoes, how would you viewwere in my shoes, how would you viewwere in my shoes, how would you view them?them?them? The good news is the same three issuesThe good news is the same three issuesThe good news is the same three issues you've identified we've heard. These areyou've identified we've heard. These areyou've identified we've heard. These are not new to you. The reason I was latenot new to you. The reason I was latenot new to you. The reason I was late for your podcast is I was writing afor your podcast is I was writing afor your podcast is I was writing a letter to the special committee onletter to the special committee onletter to the special committee on exactly those three issues, which Iexactly those three issues, which Iexactly those three issues, which I should just post on your show. Let'sshould just post on your show. Let'sshould just post on your show. Let's talk about price. Number one, we're nottalk about price. Number one, we're nottalk about price. Number one, we're not taking the company private at $90 ataking the company private at $90 ataking the company private at $90 a share, to be really clear. We're buyingshare, to be really clear. We're buyingshare, to be really clear. We're buying an additional interest in the company atan additional interest in the company atan additional interest in the company at $90 a share. And what people say is,$90 a share. And what people say is,$90 a share. And what people say is, "Oh, well, management's estimate of net
"Oh, well, management's estimate of net"Oh, well, management's estimate of net asset value is 118. Why should theasset value is 118. Why should theasset value is 118. Why should the company sell stock at 90?" That's thecompany sell stock at 90?" That's thecompany sell stock at 90?" That's the question. The answer is really severalquestion. The answer is really severalquestion. The answer is really several fold. So, number one, let's talk aboutfold. So, number one, let's talk aboutfold. So, number one, let's talk about the management's estimate of NAV. So, Ithe management's estimate of NAV. So, Ithe management's estimate of NAV. So, I think it's useful to track management'sthink it's useful to track management'sthink it's useful to track management's estimate of NAV for Howard Hughes, cuzestimate of NAV for Howard Hughes, cuzestimate of NAV for Howard Hughes, cuz it's a measure. It's kind of a yardstickit's a measure. It's kind of a yardstickit's a measure. It's kind of a yardstick of measurement. I don't think it's everof measurement. I don't think it's everof measurement. I don't think it's ever been a yardstick of measurement wherebeen a yardstick of measurement wherebeen a yardstick of measurement where the stock's going to trade. It's been athe stock's going to trade. It's been athe stock's going to trade. It's been a yardstick of measurement from where theyardstick of measurement from where theyardstick of measurement from where the stock has traded at a very significantstock has traded at a very significantstock has traded at a very significant discount. And the discount's been aboutdiscount. And the discount's been aboutdiscount. And the discount's been about 40%. Management puts out an estimate,40%. Management puts out an estimate,40%. Management puts out an estimate, the stock's been around 38 to 40%the stock's been around 38 to 40%the stock's been around 38 to 40% discount to that measure. And I thinkdiscount to that measure. And I thinkdiscount to that measure. And I think what people are doing is they'rewhat people are doing is they'rewhat people are doing is they're conflating that measure of NAV forconflating that measure of NAV forconflating that measure of NAV for Howard Hughes with the same measure ofHoward Hughes with the same measure ofHoward Hughes with the same measure of NAV they use for all the other publicNAV they use for all the other public
NAV they use for all the other public real estate companies, which arereal estate companies, which arereal estate companies, which are basically real estate investment trust.basically real estate investment trust.basically real estate investment trust. And in the case of the real estateAnd in the case of the real estateAnd in the case of the real estate investment trust, NAV is a very goodinvestment trust, NAV is a very goodinvestment trust, NAV is a very good measure of intrinsic value. Why? Themeasure of intrinsic value. Why? Themeasure of intrinsic value. Why? The evidence. If you look at Green Street isevidence. If you look at Green Street isevidence. If you look at Green Street is probably the certainly the mostprobably the certainly the mostprobably the certainly the most respected analyst in the real estaterespected analyst in the real estaterespected analyst in the real estate space. And if you look at theirspace. And if you look at theirspace. And if you look at their estimates of NAV for whether office orestimates of NAV for whether office orestimates of NAV for whether office or retail or apartments, and you look at itretail or apartments, and you look at itretail or apartments, and you look at it over time, the Green Street estimateover time, the Green Street estimateover time, the Green Street estimate versus stock prices,versus stock prices,versus stock prices, and the estimates, you know, it's kindand the estimates, you know, it's kindand the estimates, you know, it's kind of moved around over time. And there wasof moved around over time. And there wasof moved around over time. And there was sort of a band, sometimes the REITssort of a band, sometimes the REITssort of a band, sometimes the REITs trade above, sometimes the REITs tradetrade above, sometimes the REITs tradetrade above, sometimes the REITs trade below. In fact, we did a chart in ourbelow. In fact, we did a chart in ourbelow. In fact, we did a chart in our presentation that showed how REITs havepresentation that showed how REITs havepresentation that showed how REITs have traded relative to Green Street NAVstraded relative to Green Street NAVstraded relative to Green Street NAVs over time. And it's almost like theover time. And it's almost like theover time. And it's almost like the value is tethered to NAV.value is tethered to NAV.value is tethered to NAV. And the reason why that happens in the
And the reason why that happens in theAnd the reason why that happens in the REIT space and with apartments andREIT space and with apartments andREIT space and with apartments and office and apartments is because if theoffice and apartments is because if theoffice and apartments is because if the discount gets wide enough, there'sdiscount gets wide enough, there'sdiscount gets wide enough, there's things you can do about it. Blackstone,things you can do about it. Blackstone,things you can do about it. Blackstone, years ago, but certainly occasionallyyears ago, but certainly occasionallyyears ago, but certainly occasionally even now, has been a big buyer of REITseven now, has been a big buyer of REITseven now, has been a big buyer of REITs when they traded at deep dis- countswhen they traded at deep dis- countswhen they traded at deep dis- counts NAV. There's a value unlocking thingNAV. There's a value unlocking thingNAV. There's a value unlocking thing that can happen. Why? Because ifthat can happen. Why? Because ifthat can happen. Why? Because if Blackstone can buy a REIT, they canBlackstone can buy a REIT, they canBlackstone can buy a REIT, they can liquidate it, they can sell offliquidate it, they can sell offliquidate it, they can sell off apartment complex by apartment complexapartment complex by apartment complexapartment complex by apartment complex and get back NAV minus some transactionand get back NAV minus some transactionand get back NAV minus some transaction costs, which are relatively small unlesscosts, which are relatively small unlesscosts, which are relatively small unless there's a lot of debt at a bad price. Orthere's a lot of debt at a bad price. Orthere's a lot of debt at a bad price. Or an activist will come in. Or aan activist will come in. Or aan activist will come in. Or a unsolicited buyer can come in if theunsolicited buyer can come in if theunsolicited buyer can come in if the discount is wide enough. There's also nodiscount is wide enough. There's also nodiscount is wide enough. There's also no underlying tax in a REIT. When youunderlying tax in a REIT. When youunderlying tax in a REIT. When you liquidate, there's no corporate tax thatliquidate, there's no corporate tax thatliquidate, there's no corporate tax that needs to be paid. So, let's compare withneeds to be paid. So, let's compare withneeds to be paid. So, let's compare with Howard Hughes. So, as you mentioned,
Howard Hughes. So, as you mentioned,Howard Hughes. So, as you mentioned, Howard Hughes is not a simple entity. ItHoward Hughes is not a simple entity. ItHoward Hughes is not a simple entity. It owns every property type. And it's a Cowns every property type. And it's a Cowns every property type. And it's a C corp. And by the way, we have very lowcorp. And by the way, we have very lowcorp. And by the way, we have very low basis in the vast majority of our assetsbasis in the vast majority of our assetsbasis in the vast majority of our assets relative to what those assets are worthrelative to what those assets are worthrelative to what those assets are worth if we were to sell them on the openif we were to sell them on the openif we were to sell them on the open market, which means that the taxmarket, which means that the taxmarket, which means that the tax friction herefriction herefriction here alone is a huge number.alone is a huge number.alone is a huge number. On your Howard Hughes investment piecesOn your Howard Hughes investment piecesOn your Howard Hughes investment pieces of general growth property spin-out, isof general growth property spin-out, isof general growth property spin-out, is your basis around 43 or is ityour basis around 43 or is ityour basis around 43 or is it significantly below that? I don't know,significantly below that? I don't know,significantly below that? I don't know, Bart, what the precise tax basis of theBart, what the precise tax basis of theBart, what the precise tax basis of the underlying assets is, but real estateunderlying assets is, but real estateunderlying assets is, but real estate assets you depreciate over time. But Iassets you depreciate over time. But Iassets you depreciate over time. But I mean, your cost basis. I don't knowmean, your cost basis. I don't knowmean, your cost basis. I don't know precisely what our cost basis is, but weprecisely what our cost basis is, but weprecisely what our cost basis is, but we did buy stock most of the stock wedid buy stock most of the stock wedid buy stock most of the stock we purchased we bought in a rights offeringpurchased we bought in a rights offeringpurchased we bought in a rights offering at 47 25 per share. We sold some stockat 47 25 per share. We sold some stockat 47 25 per share. We sold some stock over time, we bought some stock overover time, we bought some stock over
over time, we bought some stock over time. I would say today's basis,time. I would say today's basis,time. I would say today's basis, ignoring time value of money,ignoring time value of money,ignoring time value of money, is not materially lower than the currentis not materially lower than the currentis not materially lower than the current share price. So, you're not gettingshare price. So, you're not gettingshare price. So, you're not getting general growth at 33 cents attributed togeneral growth at 33 cents attributed togeneral growth at 33 cents attributed to that. No. I'm not talking about the taxthat. No. I'm not talking about the taxthat. No. I'm not talking about the tax basis of the shareholders in this case.basis of the shareholders in this case.basis of the shareholders in this case. I'm talking about the tax basis of theI'm talking about the tax basis of theI'm talking about the tax basis of the company in the underlying assets. So, ifcompany in the underlying assets. So, ifcompany in the underlying assets. So, if you were to adjust the management's 118you were to adjust the management's 118you were to adjust the management's 118 for NAV, you have to take off taxes.for NAV, you have to take off taxes.for NAV, you have to take off taxes. That would take the NAV number downThat would take the NAV number downThat would take the NAV number down materially.materially.materially. But more important than that, as IBut more important than that, as IBut more important than that, as I mentioned earlier, 2/3 of the assetsmentioned earlier, 2/3 of the assetsmentioned earlier, 2/3 of the assets here are residential land, developed andhere are residential land, developed andhere are residential land, developed and undeveloped lots,undeveloped lots,undeveloped lots, and mostly undeveloped, and commercialand mostly undeveloped, and commercialand mostly undeveloped, and commercial land.land.land. There is no market. You can't buy HowardThere is no market. You can't buy HowardThere is no market. You can't buy Howard HughesHughesHughes and then turn around and sell the vacantand then turn around and sell the vacantand then turn around and sell the vacant land in Summerlin for anything close toland in Summerlin for anything close toland in Summerlin for anything close to where we sold lots last quarter. Therewhere we sold lots last quarter. Therewhere we sold lots last quarter. There are buyers in a carefully managed
are buyers in a carefully managedare buyers in a carefully managed auction every few months by Howardauction every few months by Howardauction every few months by Howard Hughes for lots to homebuilders. If youHughes for lots to homebuilders. If youHughes for lots to homebuilders. If you said to the homebuilders, we're going tosaid to the homebuilders, we're going tosaid to the homebuilders, we're going to put 2,000 acres on the market, okay,put 2,000 acres on the market, okay,put 2,000 acres on the market, okay, instead of 50, there's no bid.instead of 50, there's no bid.instead of 50, there's no bid. Homebuilders don't want toHomebuilders don't want toHomebuilders don't want to hold thousands of acres on balancehold thousands of acres on balancehold thousands of acres on balance sheet, and the discount rates I don'tsheet, and the discount rates I don'tsheet, and the discount rates I don't know that there actually is a buyer forknow that there actually is a buyer forknow that there actually is a buyer for bulk purchases of this kind of land, andbulk purchases of this kind of land, andbulk purchases of this kind of land, and if there is one, it's a fraction of whatif there is one, it's a fraction of whatif there is one, it's a fraction of what the company's using as the net assetthe company's using as the net assetthe company's using as the net asset value. You can't follow the same pathvalue. You can't follow the same pathvalue. You can't follow the same path you can in the REIT world. It's ayou can in the REIT world. It's ayou can in the REIT world. It's a reasonable yardstick to judge over time,reasonable yardstick to judge over time,reasonable yardstick to judge over time, but it's not like intrinsic value thatbut it's not like intrinsic value thatbut it's not like intrinsic value that can be realized 90 days after someonecan be realized 90 days after someonecan be realized 90 days after someone buys the company. And the company triedbuys the company. And the company triedbuys the company. And the company tried to sell itself in 2019, and effectivelyto sell itself in 2019, and effectivelyto sell itself in 2019, and effectively the company tried to sell itself bythe company tried to sell itself bythe company tried to sell itself by virtue of the process we ran. And as youvirtue of the process we ran. And as youvirtue of the process we ran. And as you say, we're pretty good at raising money,
say, we're pretty good at raising money,say, we're pretty good at raising money, and we had a lot of people interested,and we had a lot of people interested,and we had a lot of people interested, but everyone wanted to know how theybut everyone wanted to know how theybut everyone wanted to know how they could get liquidity in five or seven orcould get liquidity in five or seven orcould get liquidity in five or seven or 10 years. And there isn't a path to10 years. And there isn't a path to10 years. And there isn't a path to liquidity for this company. You have toliquidity for this company. You have toliquidity for this company. You have to find someone prepared to own it for 50find someone prepared to own it for 50find someone prepared to own it for 50 years. And that really deterred the vastyears. And that really deterred the vastyears. And that really deterred the vast majority of investors. Did you approachmajority of investors. Did you approachmajority of investors. Did you approach sovereign wealthsovereign wealthsovereign wealth Trust me, 240 people contacted. EveryTrust me, 240 people contacted. EveryTrust me, 240 people contacted. Every sovereign wealth fund, every mega familysovereign wealth fund, every mega familysovereign wealth fund, every mega family office, every REIT, private equity,office, every REIT, private equity,office, every REIT, private equity, Blackstone, Brookfield, Starwood, makeBlackstone, Brookfield, Starwood, makeBlackstone, Brookfield, Starwood, make your list of who you would logicallyyour list of who you would logicallyyour list of who you would logically talk to. We talked to them. Or Jefferiestalk to. We talked to them. Or Jefferiestalk to. We talked to them. Or Jefferies did.did.did. Very few investors today want illiquid.Very few investors today want illiquid.Very few investors today want illiquid. Today everyone's stuck with all theirToday everyone's stuck with all theirToday everyone's stuck with all their private equity illiquid investments.private equity illiquid investments.private equity illiquid investments. So, on NAV, I don't think it's aSo, on NAV, I don't think it's aSo, on NAV, I don't think it's a reasonable measurereasonable measurereasonable measure for where someone buys a minority stakefor where someone buys a minority stakefor where someone buys a minority stake in the company as they become thein the company as they become the
in the company as they become the management of the company. In fact, I'vemanagement of the company. In fact, I'vemanagement of the company. In fact, I've never seen a new CEO of a company comenever seen a new CEO of a company comenever seen a new CEO of a company come in and say, "I'm going to buy stock at ain and say, "I'm going to buy stock at ain and say, "I'm going to buy stock at a 46% premium to the last trade, let alone46% premium to the last trade, let alone46% premium to the last trade, let alone 900 million of that stock compared to900 million of that stock compared to900 million of that stock compared to where the stock was trading before wewhere the stock was trading before wewhere the stock was trading before we announced that we were considering aannounced that we were considering aannounced that we were considering a transaction." So, I think we're paying atransaction." So, I think we're paying atransaction." So, I think we're paying a massive price relative to where anymassive price relative to where anymassive price relative to where any third party would buy stock. The easythird party would buy stock. The easythird party would buy stock. The easy way to solve this problem if peopleway to solve this problem if peopleway to solve this problem if people think we're getting a special dealthink we're getting a special dealthink we're getting a special deal buying stock at 90 is with a rightsbuying stock at 90 is with a rightsbuying stock at 90 is with a rights offering.offering.offering. We'll backstop the rights offering.We'll backstop the rights offering.We'll backstop the rights offering. We'll charge nothing to backstop theWe'll charge nothing to backstop theWe'll charge nothing to backstop the rights offering. We'll give everyone therights offering. We'll give everyone therights offering. We'll give everyone the right to buy their pro rata share ofright to buy their pro rata share ofright to buy their pro rata share of stock in the company, and we'll just buystock in the company, and we'll just buystock in the company, and we'll just buy what's left. We'll buy our pro rata,what's left. We'll buy our pro rata,what's left. We'll buy our pro rata, obviously, and we'll buy the balance ofobviously, and we'll buy the balance ofobviously, and we'll buy the balance of shares that are not taken up by othershares that are not taken up by othershares that are not taken up by other shareholders. And that's how you solve
shareholders. And that's how you solveshareholders. And that's how you solve that problem. Because we need to putthat problem. Because we need to putthat problem. Because we need to put capital into the company to change thecapital into the company to change thecapital into the company to change the strategy. So, then the question is, whatstrategy. So, then the question is, whatstrategy. So, then the question is, what price? I would argue the price should beprice? I would argue the price should beprice? I would argue the price should be market. Market was 61.market. Market was 61.market. Market was 61. Now market's 75, but you know what?Now market's 75, but you know what?Now market's 75, but you know what? We're going to set a high bar, and we'reWe're going to set a high bar, and we'reWe're going to set a high bar, and we're going to build from that bar. So, we'llgoing to build from that bar. So, we'llgoing to build from that bar. So, we'll pay 90. When a company sells stock, it'spay 90. When a company sells stock, it'spay 90. When a company sells stock, it's about what do you get for what you give?about what do you get for what you give?about what do you get for what you give? The company's getting 900 million ofThe company's getting 900 million ofThe company's getting 900 million of cash and is giving away 10 millioncash and is giving away 10 millioncash and is giving away 10 million shares of stock in exchange. What reallyshares of stock in exchange. What reallyshares of stock in exchange. What really matters is what's going to happen to thematters is what's going to happen to thematters is what's going to happen to the company the day after. Will the stockcompany the day after. Will the stockcompany the day after. Will the stock trade better? Will people assign atrade better? Will people assign atrade better? Will people assign a higher value to the company? And will wehigher value to the company? And will wehigher value to the company? And will we deploy the capital in a way that willdeploy the capital in a way that willdeploy the capital in a way that will create more value over time? I think thecreate more value over time? I think thecreate more value over time? I think the answer to those questions are yes in allanswer to those questions are yes in allanswer to those questions are yes in all cases. And here's a simple way to thinkcases. And here's a simple way to think
cases. And here's a simple way to think about it. First, I would say I probablyabout it. First, I would say I probablyabout it. First, I would say I probably made a mistake calling it a managementmade a mistake calling it a managementmade a mistake calling it a management fee because no one likes managementfee because no one likes managementfee because no one likes management fees. Particularly institutional moneyfees. Particularly institutional moneyfees. Particularly institutional money managers. Well, they like managementmanagers. Well, they like managementmanagers. Well, they like management fees, but they don't like to befees, but they don't like to befees, but they don't like to be perceived by their clients of chargingperceived by their clients of chargingperceived by their clients of charging two layers of management fees. So, Itwo layers of management fees. So, Itwo layers of management fees. So, I think I made a mistake calling it athink I made a mistake calling it athink I made a mistake calling it a management fee. But what we're trying tomanagement fee. But what we're trying tomanagement fee. But what we're trying to accomplish here is not to make someaccomplish here is not to make someaccomplish here is not to make some windfall off of a management fee. Whatwindfall off of a management fee. Whatwindfall off of a management fee. What we're trying to accomplish is to coverwe're trying to accomplish is to coverwe're trying to accomplish is to cover some of the costs associated withsome of the costs associated withsome of the costs associated with overseeing this entity. This is not aoverseeing this entity. This is not aoverseeing this entity. This is not a case where Bill's working in a garagecase where Bill's working in a garagecase where Bill's working in a garage picking stocks for Howard Hughes.picking stocks for Howard Hughes.picking stocks for Howard Hughes. It's a case where we're trying toIt's a case where we're trying toIt's a case where we're trying to transform a business by making a seriestransform a business by making a seriestransform a business by making a series of acquisitions and overseeing privateof acquisitions and overseeing privateof acquisitions and overseeing private businesses, which is a time-consumingbusinesses, which is a time-consumingbusinesses, which is a time-consuming exercise. It's going to require a lot ofexercise. It's going to require a lot of
exercise. It's going to require a lot of organizational time to identifyorganizational time to identifyorganizational time to identify transactions, to do diligence ontransactions, to do diligence ontransactions, to do diligence on transactions, to ultimately execute andtransactions, to ultimately execute andtransactions, to ultimately execute and acquire companies. It's work. Howardacquire companies. It's work. Howardacquire companies. It's work. Howard Hughes is going to represent aHughes is going to represent aHughes is going to represent a meaningful percentage of our assets.meaningful percentage of our assets.meaningful percentage of our assets. Today at whatever 16 billion of assets,Today at whatever 16 billion of assets,Today at whatever 16 billion of assets, this is adding another 10 billion ofthis is adding another 10 billion ofthis is adding another 10 billion of assets. You know, it would be 40% ofassets. You know, it would be 40% ofassets. You know, it would be 40% of assets. With the management fee weassets. With the management fee weassets. With the management fee we proposed, it will be about 5% of ourproposed, it will be about 5% of ourproposed, it will be about 5% of our revenues. Why? Because we charge ourrevenues. Why? Because we charge ourrevenues. Why? Because we charge our other funds incentive fees, which areother funds incentive fees, which areother funds incentive fees, which are the bulk of our earnings.the bulk of our earnings.the bulk of our earnings. And we charge 1 and 1/2% management fee.And we charge 1 and 1/2% management fee.And we charge 1 and 1/2% management fee. Here with only a management fee, we'reHere with only a management fee, we'reHere with only a management fee, we're not going to come close to recouping thenot going to come close to recouping thenot going to come close to recouping the allocable share of costs.allocable share of costs.allocable share of costs. So, it's not quite Warren BuffettSo, it's not quite Warren BuffettSo, it's not quite Warren Buffett working for $100,000 beginning in 1962,working for $100,000 beginning in 1962,working for $100,000 beginning in 1962, although we have to got to future valuealthough we have to got to future valuealthough we have to got to future value that at with all the inflation we'vethat at with all the inflation we'vethat at with all the inflation we've had.had.had. It's probably 20 million today. But the
It's probably 20 million today. But theIt's probably 20 million today. But the $100,000 was a lot of money in 1962. I$100,000 was a lot of money in 1962. I$100,000 was a lot of money in 1962. I guess the point here is I think if weguess the point here is I think if weguess the point here is I think if we showed up and we had base salaries andshowed up and we had base salaries andshowed up and we had base salaries and bonuses and options, no one wouldbonuses and options, no one wouldbonuses and options, no one would complain because that's what theycomplain because that's what theycomplain because that's what they normally see. That's obviouslynormally see. That's obviouslynormally see. That's obviously impractical when you've got 40 peopleimpractical when you've got 40 peopleimpractical when you've got 40 people that you want to bring on in a companythat you want to bring on in a companythat you want to bring on in a company that's not of a scale that it couldthat's not of a scale that it couldthat's not of a scale that it could afford to hire us. And that's where weafford to hire us. And that's where weafford to hire us. And that's where we came up with the management feecame up with the management feecame up with the management fee construct. We need to think about thisconstruct. We need to think about thisconstruct. We need to think about this order of magnitude. First of all, we'reorder of magnitude. First of all, we'reorder of magnitude. First of all, we're rebating to our investors any managementrebating to our investors any managementrebating to our investors any management fees on the Howard Hughes stock thatfees on the Howard Hughes stock thatfees on the Howard Hughes stock that they own, so they're not, if you will,they own, so they're not, if you will,they own, so they're not, if you will, paying twice. We're not collecting anypaying twice. We're not collecting anypaying twice. We're not collecting any management fees on effectively themanagement fees on effectively themanagement fees on effectively the capital we're investing cuz we'recapital we're investing cuz we'recapital we're investing cuz we're earning a fee on your own capital isn'tearning a fee on your own capital isn'tearning a fee on your own capital isn't really generating any real revenue.really generating any real revenue.really generating any real revenue. So, we're only ultimately netting 52
So, we're only ultimately netting 52So, we're only ultimately netting 52 cents on the dollar of whatever fees wecents on the dollar of whatever fees wecents on the dollar of whatever fees we collect. So, if the company today has acollect. So, if the company today has acollect. So, if the company today has a market cap of post-transaction at 4market cap of post-transaction at 4market cap of post-transaction at 4 billion or something like this,billion or something like this,billion or something like this, it will be about 60 million ofit will be about 60 million ofit will be about 60 million of management fee income,management fee income,management fee income, of which we get 30 million of it. Weof which we get 30 million of it. Weof which we get 30 million of it. We have basically 30 million shareshave basically 30 million shareshave basically 30 million shares post-transaction. So, it's about apost-transaction. So, it's about apost-transaction. So, it's about a dollar a share of incremental fees todollar a share of incremental fees todollar a share of incremental fees to us. That's a way to think about it orderus. That's a way to think about it orderus. That's a way to think about it order of magnitude. You know, if the stockof magnitude. You know, if the stockof magnitude. You know, if the stock drops 10 bucks under our leadership,drops 10 bucks under our leadership,drops 10 bucks under our leadership, it's a disaster for us. And if it goesit's a disaster for us. And if it goesit's a disaster for us. And if it goes up $10, management fee doesn't move theup $10, management fee doesn't move theup $10, management fee doesn't move the needle. So, it's really about allocableneedle. So, it's really about allocableneedle. So, it's really about allocable share of costs. Now, we're sensitive toshare of costs. Now, we're sensitive toshare of costs. Now, we're sensitive to what we've heard about the managementwhat we've heard about the managementwhat we've heard about the management fee. We've told the board we're open tofee. We've told the board we're open tofee. We've told the board we're open to a different construct in how we're ablea different construct in how we're ablea different construct in how we're able to cover our costs, and people haveto cover our costs, and people haveto cover our costs, and people have said, "Look, we'd like it to be moresaid, "Look, we'd like it to be more
said, "Look, we'd like it to be more incentive- based." We have some ideasincentive- based." We have some ideasincentive- based." We have some ideas there, but we need the board to come tothere, but we need the board to come tothere, but we need the board to come to us and sit down and engage on thatus and sit down and engage on thatus and sit down and engage on that topic. But we're very,topic. But we're very,topic. But we're very, I would say, respectful and andI would say, respectful and andI would say, respectful and and sensitive to this concern. We're notsensitive to this concern. We're notsensitive to this concern. We're not trying to make a lot of money here on atrying to make a lot of money here on atrying to make a lot of money here on a management fee. We're trying to buildmanagement fee. We're trying to buildmanagement fee. We're trying to build something of very significant long-termsomething of very significant long-termsomething of very significant long-term value. And by the way, we want it to bevalue. And by the way, we want it to bevalue. And by the way, we want it to be appealing. The retail community hasappealing. The retail community hasappealing. The retail community has received actually handwritten,received actually handwritten,received actually handwritten, typewritten letters, many emails, tweetstypewritten letters, many emails, tweetstypewritten letters, many emails, tweets of support. And they're like, "Bill isof support. And they're like, "Bill isof support. And they're like, "Bill is cheap. It's a bargain. It's a sideshow.cheap. It's a bargain. It's a sideshow.cheap. It's a bargain. It's a sideshow. I'm excited to be your investor." AndI'm excited to be your investor." AndI'm excited to be your investor." And the retail community doesn't really seemthe retail community doesn't really seemthe retail community doesn't really seem to be particularly concerned. But yes,to be particularly concerned. But yes,to be particularly concerned. But yes, I've heard specifically from oneI've heard specifically from oneI've heard specifically from one institution who I spent an hour on theinstitution who I spent an hour on theinstitution who I spent an hour on the phone with yesterday. This was a primaryphone with yesterday. This was a primaryphone with yesterday. This was a primary concern of theirs. And so, I think weconcern of theirs. And so, I think we
concern of theirs. And so, I think we can adjust this. Maybe it's some form ofcan adjust this. Maybe it's some form ofcan adjust this. Maybe it's some form of expense reimbursement plus some kind ofexpense reimbursement plus some kind ofexpense reimbursement plus some kind of incentive- based compensation. There's aincentive- based compensation. There's aincentive- based compensation. There's a way to resolve this so it's not an issueway to resolve this so it's not an issueway to resolve this so it's not an issue that people focus on. But we need tothat people focus on. But we need tothat people focus on. But we need to engage with the company.engage with the company.engage with the company. Let me just run a couple of suggestionsLet me just run a couple of suggestionsLet me just run a couple of suggestions proposals just to get your take on them.proposals just to get your take on them.proposals just to get your take on them. One of the things I'm worried about isOne of the things I'm worried about isOne of the things I'm worried about is HHH stock flat over the next 10 years,HHH stock flat over the next 10 years,HHH stock flat over the next 10 years, you'd be sending purging the thing aboutyou'd be sending purging the thing aboutyou'd be sending purging the thing about 700 million over that time. Would you be700 million over that time. Would you be700 million over that time. Would you be open to a clawback?open to a clawback?open to a clawback? I think there are better ways to solveI think there are better ways to solveI think there are better ways to solve that problem. I get the problem. If wethat problem. I get the problem. If wethat problem. I get the problem. If we don't create value here, we shouldn't bedon't create value here, we shouldn't bedon't create value here, we shouldn't be collecting hundreds of millions of fees,collecting hundreds of millions of fees,collecting hundreds of millions of fees, but I think there's a better way tobut I think there's a better way tobut I think there's a better way to solve that problem than what yousolve that problem than what yousolve that problem than what you describe.describe.describe. To me, I have no problem Pershing SquareTo me, I have no problem Pershing SquareTo me, I have no problem Pershing Square profiting from this. I just want it toprofiting from this. I just want it toprofiting from this. I just want it to be ethical. I really think you should do
be ethical. I really think you should dobe ethical. I really think you should do an Elon type of situation. Obviously,an Elon type of situation. Obviously,an Elon type of situation. Obviously, have better lawyers, put it together.have better lawyers, put it together.have better lawyers, put it together. That hasn't gone so well. The onlyThat hasn't gone so well. The onlyThat hasn't gone so well. The only people that so far have been awardedpeople that so far have been awardedpeople that so far have been awarded anything are like the the lawyers areanything are like the the lawyers areanything are like the the lawyers are hundreds of millions dollars. As I said,hundreds of millions dollars. As I said,hundreds of millions dollars. As I said, yeah, better drafting, but set hugeyeah, better drafting, but set hugeyeah, better drafting, but set huge targets and if we win, you win and vicetargets and if we win, you win and vicetargets and if we win, you win and vice versa. But as you said, it's a sideshow.versa. But as you said, it's a sideshow.versa. But as you said, it's a sideshow. To me, it's price. I think you made yourTo me, it's price. I think you made yourTo me, it's price. I think you made your bid at an somewhat opportune time.bid at an somewhat opportune time.bid at an somewhat opportune time. Let me make the argument against it.Let me make the argument against it.Let me make the argument against it. Look at what the home builder stocks,Look at what the home builder stocks,Look at what the home builder stocks, real estate stocks have done since wereal estate stocks have done since wereal estate stocks have done since we made our bid for the company. Thatmade our bid for the company. Thatmade our bid for the company. That collective group, last I checked, wascollective group, last I checked, wascollective group, last I checked, was down versus the $61 share price. And ifdown versus the $61 share price. And ifdown versus the $61 share price. And if you look at how Howard Hughes has tradedyou look at how Howard Hughes has tradedyou look at how Howard Hughes has traded over time, it's traded in a range withover time, it's traded in a range withover time, it's traded in a range with that group. So, the index is down,that group. So, the index is down,that group. So, the index is down, Howard Hughes is up and the only reasonHoward Hughes is up and the only reason
Howard Hughes is up and the only reason Howard Hughes is up is because there'sHoward Hughes is up is because there'sHoward Hughes is up is because there's our proposal outstanding and people areour proposal outstanding and people areour proposal outstanding and people are expecting us to do something. So, if weexpecting us to do something. So, if weexpecting us to do something. So, if we disappear tomorrow, I think the stock isdisappear tomorrow, I think the stock isdisappear tomorrow, I think the stock is at best in the low 60s and at worst,at best in the low 60s and at worst,at best in the low 60s and at worst, it's in the 50s. If this strategicit's in the 50s. If this strategicit's in the 50s. If this strategic transaction fails, people are going totransaction fails, people are going totransaction fails, people are going to view our stake, rightly or wrongly, asview our stake, rightly or wrongly, asview our stake, rightly or wrongly, as an overhang in stock. It's not a corean overhang in stock. It's not a corean overhang in stock. It's not a core position for usposition for usposition for us today. It's a small cap, relativelytoday. It's a small cap, relativelytoday. It's a small cap, relatively illiquid, large stake in a companyilliquid, large stake in a companyilliquid, large stake in a company that's not really consistent, if youthat's not really consistent, if youthat's not really consistent, if you look at the rest of the portfolio. We'relook at the rest of the portfolio. We'relook at the rest of the portfolio. We're trying to make it into an investment.trying to make it into an investment.trying to make it into an investment. You know, what do we do for a living atYou know, what do we do for a living atYou know, what do we do for a living at Pershing Square?Pershing Square?Pershing Square? We find companies that have eitherWe find companies that have eitherWe find companies that have either underperformed their potential and thenunderperformed their potential and thenunderperformed their potential and then we come in and we help make changes towe come in and we help make changes towe come in and we help make changes to governance and management. Or we findgovernance and management. Or we findgovernance and management. Or we find companies that are under appreciated bycompanies that are under appreciated bycompanies that are under appreciated by the market and then we do something
the market and then we do somethingthe market and then we do something similar. And that's what we're doingsimilar. And that's what we're doingsimilar. And that's what we're doing here. This is a company that we thinkhere. This is a company that we thinkhere. This is a company that we think has been under appreciated by the markethas been under appreciated by the markethas been under appreciated by the market as isas isas is and we think with a change in strategyand we think with a change in strategyand we think with a change in strategy for the company, we can create a lot offor the company, we can create a lot offor the company, we can create a lot of value here.value here.value here. A lot more that can be created as aA lot more that can be created as aA lot more that can be created as a standalone MPC company and much morestandalone MPC company and much morestandalone MPC company and much more rapidly, I think, could be attract arapidly, I think, could be attract arapidly, I think, could be attract a shareholder base that's excited to ownshareholder base that's excited to ownshareholder base that's excited to own it for the very long term.it for the very long term.it for the very long term. And there's been enormous turnover inAnd there's been enormous turnover inAnd there's been enormous turnover in the shareholder base over the lastthe shareholder base over the lastthe shareholder base over the last really few weeks since our January 13threally few weeks since our January 13threally few weeks since our January 13th proposal to the company, 17 millionproposal to the company, 17 millionproposal to the company, 17 million shares have traded. That's a third ofshares have traded. That's a third ofshares have traded. That's a third of the shares outstanding. When you take usthe shares outstanding. When you take usthe shares outstanding. When you take us out of the float, there are 31 millionout of the float, there are 31 millionout of the float, there are 31 million shares. Index funds own, I don't know,shares. Index funds own, I don't know,shares. Index funds own, I don't know, we should check what the number is, butwe should check what the number is, butwe should check what the number is, but even if you ignore the index funds, 55%even if you ignore the index funds, 55%even if you ignore the index funds, 55% of the float has traded in a month orof the float has traded in a month or
of the float has traded in a month or five or six weeks. And I think thefive or six weeks. And I think thefive or six weeks. And I think the buyers, you know, we had Jefferiesbuyers, you know, we had Jefferiesbuyers, you know, we had Jefferies looking atlooking atlooking at are people buying under a thousand shareare people buying under a thousand shareare people buying under a thousand share lots, which they would describe as kindlots, which they would describe as kindlots, which they would describe as kind of retail, and the sellers have beenof retail, and the sellers have beenof retail, and the sellers have been mostly dedicated real estate funds ormostly dedicated real estate funds ormostly dedicated real estate funds or people whose mandate does not include apeople whose mandate does not include apeople whose mandate does not include a diversified holding company. So, thediversified holding company. So, thediversified holding company. So, the shareholder base of the company isshareholder base of the company isshareholder base of the company is changing pretty dramatically. I talkedchanging pretty dramatically. I talkedchanging pretty dramatically. I talked to one of the analysts who told me thatto one of the analysts who told me thatto one of the analysts who told me that nearly all of his clients had soldnearly all of his clients had soldnearly all of his clients had sold stock. And this is sort of a dedicatedstock. And this is sort of a dedicatedstock. And this is sort of a dedicated real estate investor.real estate investor.real estate investor. The good news is the sellers, which areThe good news is the sellers, which areThe good news is the sellers, which are finite, the people principally who don'tfinite, the people principally who don'tfinite, the people principally who don't want to invest in a diversified holdingwant to invest in a diversified holdingwant to invest in a diversified holding company. Actually, we got a lot of verycompany. Actually, we got a lot of verycompany. Actually, we got a lot of very nice complimentary words from this onenice complimentary words from this onenice complimentary words from this one asset manager we spoke to yesterday, butasset manager we spoke to yesterday, butasset manager we spoke to yesterday, but he said, "Look, you know, I signed onhe said, "Look, you know, I signed onhe said, "Look, you know, I signed on for an MPC company and this is going to
for an MPC company and this is going tofor an MPC company and this is going to become something else. And you guys havebecome something else. And you guys havebecome something else. And you guys have a great track record, but I signed upa great track record, but I signed upa great track record, but I signed up for an MPC company." Which gets to yourfor an MPC company." Which gets to yourfor an MPC company." Which gets to your second part of your question, which issecond part of your question, which issecond part of your question, which is should there be a shareholder vote? So,should there be a shareholder vote? So,should there be a shareholder vote? So, one, this is a transaction does notone, this is a transaction does notone, this is a transaction does not require a shareholder vote.require a shareholder vote.require a shareholder vote. And the way the rules work is if you'reAnd the way the rules work is if you'reAnd the way the rules work is if you're going to do something reallygoing to do something reallygoing to do something really transformational to a business, thetransformational to a business, thetransformational to a business, the measure of that is how much of themeasure of that is how much of themeasure of that is how much of the capital of the enterprise you're goingcapital of the enterprise you're goingcapital of the enterprise you're going to use to do that transformational. Sortto use to do that transformational. Sortto use to do that transformational. Sort of like a hardline test. And so, theof like a hardline test. And so, theof like a hardline test. And so, the rules say that if you sell the companyrules say that if you sell the companyrules say that if you sell the company uses or sells in a transaction or seriesuses or sells in a transaction or seriesuses or sells in a transaction or series of steps that are part of oneof steps that are part of oneof steps that are part of one transaction,transaction,transaction, 20% or more of its stock, then you need20% or more of its stock, then you need20% or more of its stock, then you need a shareholder vote for a transaction.a shareholder vote for a transaction.a shareholder vote for a transaction. This transaction, we're buying less thanThis transaction, we're buying less thanThis transaction, we're buying less than 20% of the stock of the company, so20% of the stock of the company, so20% of the stock of the company, so we're squarely in the space where we
we're squarely in the space where wewe're squarely in the space where we don't need a shareholder vote. It soundsdon't need a shareholder vote. It soundsdon't need a shareholder vote. It sounds very democratic to have a shareholdervery democratic to have a shareholdervery democratic to have a shareholder vote, so why not have a shareholdervote, so why not have a shareholdervote, so why not have a shareholder vote? The answer isvote? The answer isvote? The answer is number one, it takes time. It'snumber one, it takes time. It'snumber one, it takes time. It's expensive.expensive.expensive. And it increases litigation risk,And it increases litigation risk,And it increases litigation risk, interestingly. What people get sued forinterestingly. What people get sued forinterestingly. What people get sued for in transactions is what you say in thein transactions is what you say in thein transactions is what you say in the proxy. When you put out a tens ofproxy. When you put out a tens ofproxy. When you put out a tens of thousands of word document, there's athousands of word document, there's athousands of word document, there's a whole industry of lawyers that lookwhole industry of lawyers that lookwhole industry of lawyers that look through that and they try to come upthrough that and they try to come upthrough that and they try to come up with something that will appeal to awith something that will appeal to awith something that will appeal to a judge. Oh, your honor, they didn't sayjudge. Oh, your honor, they didn't sayjudge. Oh, your honor, they didn't say this, they didn't say that. Let's justthis, they didn't say that. Let's justthis, they didn't say that. Let's just shareholder suing who owns nine shares,shareholder suing who owns nine shares,shareholder suing who owns nine shares, just like that Tesla thing. It's notjust like that Tesla thing. It's notjust like that Tesla thing. It's not really a real shareholder, often. Why?really a real shareholder, often. Why?really a real shareholder, often. Why? Because the costs are absorbed by theBecause the costs are absorbed by theBecause the costs are absorbed by the company. It's an overhang of thecompany. It's an overhang of thecompany. It's an overhang of the company. It can delay for months acompany. It can delay for months acompany. It can delay for months a shareholder meeting and that's months onshareholder meeting and that's months on
shareholder meeting and that's months on a present value basis where not puttinga present value basis where not puttinga present value basis where not putting capital to work and it's legal fees andcapital to work and it's legal fees andcapital to work and it's legal fees and expense. So, that's I would say theexpense. So, that's I would say theexpense. So, that's I would say the first point. The second point I wouldfirst point. The second point I wouldfirst point. The second point I would say is we own 38% of the company. Thosesay is we own 38% of the company. Thosesay is we own 38% of the company. Those shares are held by our clients, inshares are held by our clients, inshares are held by our clients, in effect, our investors in our funds. Andeffect, our investors in our funds. Andeffect, our investors in our funds. And we believe that this transaction is inwe believe that this transaction is inwe believe that this transaction is in the best interests of our shareholders.the best interests of our shareholders.the best interests of our shareholders. So, it's our obligation to get thisSo, it's our obligation to get thisSo, it's our obligation to get this transaction done as promptly astransaction done as promptly astransaction done as promptly as possible. So, we're going to vote thosepossible. So, we're going to vote thosepossible. So, we're going to vote those shares in the transaction. We're goingshares in the transaction. We're goingshares in the transaction. We're going to have support from, I hope, a largeto have support from, I hope, a largeto have support from, I hope, a large percentage of the shareholders.percentage of the shareholders.percentage of the shareholders. But the probability that we get aBut the probability that we get aBut the probability that we get a majority of the shares that show up atmajority of the shares that show up atmajority of the shares that show up at the meeting, that vote in favor of us,the meeting, that vote in favor of us,the meeting, that vote in favor of us, approaches 100%. It's just the math whenapproaches 100%. It's just the math whenapproaches 100%. It's just the math when someone shows up at 38%. The typicalsomeone shows up at 38%. The typicalsomeone shows up at 38%. The typical quorum for a special meeting of thisquorum for a special meeting of thisquorum for a special meeting of this kind is 75 to 80% of the shares
kind is 75 to 80% of the shareskind is 75 to 80% of the shares outstanding. If someone owns 37.8%outstanding. If someone owns 37.8%outstanding. If someone owns 37.8% on our vote alone, we're likely to geton our vote alone, we're likely to geton our vote alone, we're likely to get the transaction approved. The vote, Ithe transaction approved. The vote, Ithe transaction approved. The vote, I would say, is performative, to use awould say, is performative, to use awould say, is performative, to use a word that has become very common. Iword that has become very common. Iword that has become very common. I never heard the word performative, butnever heard the word performative, butnever heard the word performative, but in like the last, I don't know how manyin like the last, I don't know how manyin like the last, I don't know how many years, it's like every other day peopleyears, it's like every other day peopleyears, it's like every other day people call things performative. We should makecall things performative. We should makecall things performative. We should make a list of all these sort of new words.a list of all these sort of new words.a list of all these sort of new words. And the other point I would make, someAnd the other point I would make, someAnd the other point I would make, some people say, "Okay, well, you'repeople say, "Okay, well, you'repeople say, "Okay, well, you're conflicted on this deal. We should justconflicted on this deal. We should justconflicted on this deal. We should just do a so-called majority of the minoritydo a so-called majority of the minoritydo a so-called majority of the minority vote," which you sometimes see in avote," which you sometimes see in avote," which you sometimes see in a going private transaction, because itgoing private transaction, because itgoing private transaction, because it can cleanse the affiliate nature of thecan cleanse the affiliate nature of thecan cleanse the affiliate nature of the transaction and reduce litigation risk.transaction and reduce litigation risk.transaction and reduce litigation risk. The problem here is when you haveThe problem here is when you haveThe problem here is when you have someone who owns 38% of a company andsomeone who owns 38% of a company andsomeone who owns 38% of a company and you compound that problem by having ayou compound that problem by having ayou compound that problem by having a large turnover in the shareholder base
large turnover in the shareholder baselarge turnover in the shareholder base to retail investorsto retail investorsto retail investors and you consider the fact that retailand you consider the fact that retailand you consider the fact that retail investors, unfortunately, very rarelyinvestors, unfortunately, very rarelyinvestors, unfortunately, very rarely vote their shares. What it means isvote their shares. What it means isvote their shares. What it means is that, just again, the math. 50 millionthat, just again, the math. 50 millionthat, just again, the math. 50 million shares, we own 19. So, there are 31shares, we own 19. So, there are 31shares, we own 19. So, there are 31 million shares that would be consideredmillion shares that would be consideredmillion shares that would be considered a majority of the minority, buta majority of the minority, buta majority of the minority, but typically only 75 to 80% of the sharestypically only 75 to 80% of the sharestypically only 75 to 80% of the shares show up at a meeting. So, in this case,show up at a meeting. So, in this case,show up at a meeting. So, in this case, that would mean 50 million shares, 10 tothat would mean 50 million shares, 10 tothat would mean 50 million shares, 10 to 12 and 1/2 million shares are not going12 and 1/2 million shares are not going12 and 1/2 million shares are not going to vote. So, you take 31, let's take theto vote. So, you take 31, let's take theto vote. So, you take 31, let's take the midpoint of the range, 11 and 1/4. So,midpoint of the range, 11 and 1/4. So,midpoint of the range, 11 and 1/4. So, you have 31 million shares, you subtractyou have 31 million shares, you subtractyou have 31 million shares, you subtract 11 and 1/4, there are only 20 million11 and 1/4, there are only 20 million11 and 1/4, there are only 20 million sharessharesshares that are going to vote to determine thethat are going to vote to determine thethat are going to vote to determine the outcome here. Which means that 10outcome here. Which means that 10outcome here. Which means that 10 million shares plus one is a majority.million shares plus one is a majority.million shares plus one is a majority. And if you look at the shareholderAnd if you look at the shareholderAnd if you look at the shareholder registry, ignore us, the top threeregistry, ignore us, the top threeregistry, ignore us, the top three shareholders own 10 million shares. So,
shareholders own 10 million shares. So,shareholders own 10 million shares. So, three shareholders who own less than 20%three shareholders who own less than 20%three shareholders who own less than 20% of the stock of the overall company willof the stock of the overall company willof the stock of the overall company will be deciding on behalf of all of thebe deciding on behalf of all of thebe deciding on behalf of all of the shareholders. And to me, that is vastlyshareholders. And to me, that is vastlyshareholders. And to me, that is vastly less democratic than letting all theless democratic than letting all theless democratic than letting all the shareholders vote. And why should myshareholders vote. And why should myshareholders vote. And why should my shareholders, my investors, be deprivedshareholders, my investors, be deprivedshareholders, my investors, be deprived of their vote in the deal? I think itof their vote in the deal? I think itof their vote in the deal? I think it sounds nice in practice. It soundssounds nice in practice. It soundssounds nice in practice. It sounds democratic in practice, but I think itdemocratic in practice, but I think itdemocratic in practice, but I think it creates litigation risk,creates litigation risk,creates litigation risk, takes time, and if we took the majoritytakes time, and if we took the majoritytakes time, and if we took the majority of the minority approach, you're handingof the minority approach, you're handingof the minority approach, you're handing control to the people who own less thancontrol to the people who own less thancontrol to the people who own less than 20% of the company, which I think is not20% of the company, which I think is not20% of the company, which I think is not good governance.good governance.good governance. So, you'll end up owning 48%.So, you'll end up owning 48%.So, you'll end up owning 48%. I'm a big fan of the outsiders. I thinkI'm a big fan of the outsiders. I thinkI'm a big fan of the outsiders. I think havinghavinghaving big buybacks, I know, wouldn't be yourbig buybacks, I know, wouldn't be yourbig buybacks, I know, wouldn't be your first use of capital, but over time itfirst use of capital, but over time itfirst use of capital, but over time it could be extremely effective. But if youcould be extremely effective. But if youcould be extremely effective. But if you do a big buyback, then you're over 50.
do a big buyback, then you're over 50.do a big buyback, then you're over 50. What kind of protections do shareholdersWhat kind of protections do shareholdersWhat kind of protections do shareholders have on that?have on that?have on that? Number one, we said that this will be anNumber one, we said that this will be anNumber one, we said that this will be an independent board that will govern theindependent board that will govern theindependent board that will govern the company. And by the way, when you owncompany. And by the way, when you owncompany. And by the way, when you own 48% or even if you own 38%, you can have48% or even if you own 38%, you can have48% or even if you own 38%, you can have effective control of the company.effective control of the company.effective control of the company. Howard Hughes, it's a company with veryHoward Hughes, it's a company with veryHoward Hughes, it's a company with very large major shareholder and whether welarge major shareholder and whether welarge major shareholder and whether we own 38 or 48% or even 52%, I don't knowown 38 or 48% or even 52%, I don't knowown 38 or 48% or even 52%, I don't know that it matters that much. We're anthat it matters that much. We're anthat it matters that much. We're an important voice. We would contractuallyimportant voice. We would contractuallyimportant voice. We would contractually agree that for the company to have anagree that for the company to have anagree that for the company to have an independent board. We believe in goodindependent board. We believe in goodindependent board. We believe in good governance. We believe in independentgovernance. We believe in independentgovernance. We believe in independent boards of directors. As we said in ourboards of directors. As we said in ourboards of directors. As we said in our proposal, we'd commit to all theproposal, we'd commit to all theproposal, we'd commit to all the relevant committees would be controlledrelevant committees would be controlledrelevant committees would be controlled by independent directors. While we'dby independent directors. While we'dby independent directors. While we'd have the right to run the companyhave the right to run the companyhave the right to run the company without these protections, becausewithout these protections, becausewithout these protections, because controlled companies don't have to havecontrolled companies don't have to have
controlled companies don't have to have these protections under the exchangethese protections under the exchangethese protections under the exchange rules, we would agree to them. In somerules, we would agree to them. In somerules, we would agree to them. In some sense, HHH seemed like the wrong vehiclesense, HHH seemed like the wrong vehiclesense, HHH seemed like the wrong vehicle to do this. Public markets don't do ato do this. Public markets don't do ato do this. Public markets don't do a good job of valuing real estate as yougood job of valuing real estate as yougood job of valuing real estate as you have seen over the last decade or so.have seen over the last decade or so.have seen over the last decade or so. Have you thought of perhaps doing thisHave you thought of perhaps doing thisHave you thought of perhaps doing this with like an insurance company?with like an insurance company?with like an insurance company? Markel is a name we own. Seems prettyMarkel is a name we own. Seems prettyMarkel is a name we own. Seems pretty cheap and generates a ton of cash andcheap and generates a ton of cash andcheap and generates a ton of cash and easy for investors to understand. Iseasy for investors to understand. Iseasy for investors to understand. Is that something that you considered?that something that you considered?that something that you considered? We haven't considered acquiring anotherWe haven't considered acquiring anotherWe haven't considered acquiring another insurance company, but we've absolutelyinsurance company, but we've absolutelyinsurance company, but we've absolutely considered and in fact have likelyconsidered and in fact have likelyconsidered and in fact have likely identified a leader who our plan wouldidentified a leader who our plan wouldidentified a leader who our plan would be to recruit into Howard Hughes, behindbe to recruit into Howard Hughes, behindbe to recruit into Howard Hughes, behind which we would build an insurancewhich we would build an insurancewhich we would build an insurance operation. There's a reason why Buffettoperation. There's a reason why Buffettoperation. There's a reason why Buffett has used insurance to generate low-costhas used insurance to generate low-costhas used insurance to generate low-cost float and as an investment vehicle. Andfloat and as an investment vehicle. Andfloat and as an investment vehicle. And that's certainly in the cards for this
that's certainly in the cards for thisthat's certainly in the cards for this company. So, what type of insurance likecompany. So, what type of insurance likecompany. So, what type of insurance like would you do? We haven't yet made a dealwould you do? We haven't yet made a dealwould you do? We haven't yet made a deal with this particular individual and it'swith this particular individual and it'swith this particular individual and it's an unknown individual. I'd rather notan unknown individual. I'd rather notan unknown individual. I'd rather not narrow the case even further to talknarrow the case even further to talknarrow the case even further to talk about what kind of insurance we'd likelyabout what kind of insurance we'd likelyabout what kind of insurance we'd likely pursue, but it is something that we'repursue, but it is something that we'repursue, but it is something that we're seriously considering.seriously considering.seriously considering. No, I look forward to hearing more aboutNo, I look forward to hearing more aboutNo, I look forward to hearing more about it. I think the bottom line, obviously,it. I think the bottom line, obviously,it. I think the bottom line, obviously, we can disagree. It seemed like you'rewe can disagree. It seemed like you'rewe can disagree. It seemed like you're open to negotiation for a different typeopen to negotiation for a different typeopen to negotiation for a different type of incentive structure, but theof incentive structure, but theof incentive structure, but the sideshow. To me, at the end of the day,sideshow. To me, at the end of the day,sideshow. To me, at the end of the day, I don't think they would be thrilled. II don't think they would be thrilled. II don't think they would be thrilled. I think minority shareholders, though, ifthink minority shareholders, though, ifthink minority shareholders, though, if you did something in the low hundreds,you did something in the low hundreds,you did something in the low hundreds, if you knew for certain it would goif you knew for certain it would goif you knew for certain it would go through and you could just have somethrough and you could just have somethrough and you could just have some sort of carry based on how the stocksort of carry based on how the stocksort of carry based on how the stock does for a long period of time, woulddoes for a long period of time, would
does for a long period of time, would that be something you consider?that be something you consider?that be something you consider? I think we should save the negotiationI think we should save the negotiationI think we should save the negotiation for us and the board and the specialfor us and the board and the specialfor us and the board and the special committee. I had to try. Okay. As Icommittee. I had to try. Okay. As Icommittee. I had to try. Okay. As I said, we're open to having a discussion.said, we're open to having a discussion.said, we're open to having a discussion. I think we're paying extraordinary priceI think we're paying extraordinary priceI think we're paying extraordinary price to buy not control of the company. Ourto buy not control of the company. Ourto buy not control of the company. Our influence in the company is not changinginfluence in the company is not changinginfluence in the company is not changing materially if you go from 38 to 48%.materially if you go from 38 to 48%.materially if you go from 38 to 48%. Tomorrow we could run a proxy contestTomorrow we could run a proxy contestTomorrow we could run a proxy contest and we've replaced boards of directors.and we've replaced boards of directors.and we've replaced boards of directors. Canadian Pacific we had 12% of the stockCanadian Pacific we had 12% of the stockCanadian Pacific we had 12% of the stock replaced the entire board and put in ourreplaced the entire board and put in ourreplaced the entire board and put in our candidate. Going from 38 to 48 is not acandidate. Going from 38 to 48 is not acandidate. Going from 38 to 48 is not a change of control transaction here.change of control transaction here.change of control transaction here. I think we're buying stock at a bigI think we're buying stock at a bigI think we're buying stock at a big premium. I think that's accretive to thepremium. I think that's accretive to thepremium. I think that's accretive to the current shareholders. I think it sends acurrent shareholders. I think it sends acurrent shareholders. I think it sends a very powerful message that we think wevery powerful message that we think wevery powerful message that we think we can create value beginning 46% abovecan create value beginning 46% abovecan create value beginning 46% above where the stock was before we proposed awhere the stock was before we proposed awhere the stock was before we proposed a transaction. The other thing that you
transaction. The other thing that youtransaction. The other thing that you should think about on behalf of theshould think about on behalf of theshould think about on behalf of the shareholders here is what happens ifshareholders here is what happens ifshareholders here is what happens if tomorrow, let's say the board wastomorrow, let's say the board wastomorrow, let's say the board was intransigent or whatever and we couldn'tintransigent or whatever and we couldn'tintransigent or whatever and we couldn't do this deal, where does the stockdo this deal, where does the stockdo this deal, where does the stock trade? It's not going to trade in a goodtrade? It's not going to trade in a goodtrade? It's not going to trade in a good place.place.place. The world is going to say, "Okay,The world is going to say, "Okay,The world is going to say, "Okay, Pershing tried everything. Company triedPershing tried everything. Company triedPershing tried everything. Company tried to sell itself in 2019. Pershing triedto sell itself in 2019. Pershing triedto sell itself in 2019. Pershing tried to take it private in the fall of lastto take it private in the fall of lastto take it private in the fall of last year and now Pershing proposed ayear and now Pershing proposed ayear and now Pershing proposed a relatively straightforward deal whererelatively straightforward deal whererelatively straightforward deal where they would simply invest capital in thethey would simply invest capital in thethey would simply invest capital in the company. Didn't require shareholdercompany. Didn't require shareholdercompany. Didn't require shareholder vote. They were putting up 900 millionvote. They were putting up 900 millionvote. They were putting up 900 million in capital. They were open toin capital. They were open toin capital. They were open to negotiating, making their costnegotiating, making their costnegotiating, making their cost reimbursement charge morereimbursement charge morereimbursement charge more incentive-based." And that didn't getincentive-based." And that didn't getincentive-based." And that didn't get done either. I mean, where's the stockdone either. I mean, where's the stockdone either. I mean, where's the stock going to trade? It's going to trade intogoing to trade? It's going to trade intogoing to trade? It's going to trade into the 60s for sure and it could tradethe 60s for sure and it could trade
the 60s for sure and it could trade lower. I don't know where it closedlower. I don't know where it closedlower. I don't know where it closed today. Why is the stock trading at 75 iftoday. Why is the stock trading at 75 iftoday. Why is the stock trading at 75 if you're willing to put money in at 90?you're willing to put money in at 90?you're willing to put money in at 90? Like what's the market telling us? It'sLike what's the market telling us? It'sLike what's the market telling us? It's never precisely possible to tell younever precisely possible to tell younever precisely possible to tell you what the market is telling you. Numberwhat the market is telling you. Numberwhat the market is telling you. Number one, the sellers are people who don'tone, the sellers are people who don'tone, the sellers are people who don't want to invest in a diversified holdingwant to invest in a diversified holding company because it's not their mandatecompany because it's not their mandatecompany because it's not their mandate or they're nervous about the clients notor they're nervous about the clients notor they're nervous about the clients not liking two layers of management fees andliking two layers of management fees andliking two layers of management fees and they're not hopeful that gets resolvedthey're not hopeful that gets resolvedthey're not hopeful that gets resolved in some other way. The buyers, I wouldin some other way. The buyers, I wouldin some other way. The buyers, I would say, are retail who want to bet withsay, are retail who want to bet withsay, are retail who want to bet with Pershing Square and alike the idea of aPershing Square and alike the idea of aPershing Square and alike the idea of a modern-day Berkshire Hathaway. That'smodern-day Berkshire Hathaway. That'smodern-day Berkshire Hathaway. That's the buy-sell universe. And then thethe buy-sell universe. And then thethe buy-sell universe. And then the sideline people, which is I think a verysideline people, which is I think a verysideline people, which is I think a very significant base of demand, aresignificant base of demand, aresignificant base of demand, are institutions that want to investinstitutions that want to investinstitutions that want to invest alongside Pershing Square. Oh, by thealongside Pershing Square. Oh, by thealongside Pershing Square. Oh, by the way, we know many institutions. Theway, we know many institutions. The
way, we know many institutions. The nature of our business is we've beennature of our business is we've beennature of our business is we've been managing money for sovereign wealthmanaging money for sovereign wealthmanaging money for sovereign wealth funds and family offices and people whofunds and family offices and people whofunds and family offices and people who invest in hedge funds, etc. for a veryinvest in hedge funds, etc. for a veryinvest in hedge funds, etc. for a very long time. But these are investors thatlong time. But these are investors thatlong time. But these are investors that don't take what I would describe as riskdon't take what I would describe as riskdon't take what I would describe as risk arbitrage risk. And the risk arbitragearbitrage risk. And the risk arbitragearbitrage risk. And the risk arbitrage risk here is real. What the stock isrisk here is real. What the stock isrisk here is real. What the stock is telling you is if this deal doesn'ttelling you is if this deal doesn'ttelling you is if this deal doesn't happen, the stock goes into the 60s.happen, the stock goes into the 60s.happen, the stock goes into the 60s. That's reflected somewhere in theThat's reflected somewhere in theThat's reflected somewhere in the expected value of 73. And actually theexpected value of 73. And actually theexpected value of 73. And actually the more time that goes by without a dealmore time that goes by without a dealmore time that goes by without a deal happening, the more people are going tohappening, the more people are going tohappening, the more people are going to be nervous about that. In fact, thebe nervous about that. In fact, thebe nervous about that. In fact, the stock traded as high as in the mid-80sstock traded as high as in the mid-80sstock traded as high as in the mid-80s when we first announced the deal andwhen we first announced the deal andwhen we first announced the deal and when a lot of time went by without anwhen a lot of time went by without anwhen a lot of time went by without an announcement, the stock was as low asannouncement, the stock was as low asannouncement, the stock was as low as 71. We filed our 13D, got as high as 86.71. We filed our 13D, got as high as 86.71. We filed our 13D, got as high as 86. But when people got concerned that theBut when people got concerned that theBut when people got concerned that the deal might not happen, it was 71 the
deal might not happen, it was 71 thedeal might not happen, it was 71 the year when we announced our firstyear when we announced our firstyear when we announced our first proposal to the company. The more timeproposal to the company. The more timeproposal to the company. The more time that goes by without a transactionthat goes by without a transactionthat goes by without a transaction announced, the more people think thereannounced, the more people think thereannounced, the more people think there isn't a deal here and it's heading backisn't a deal here and it's heading backisn't a deal here and it's heading back into the 60s because the group hasinto the 60s because the group hasinto the 60s because the group has traded. The group of which this is atraded. The group of which this is atraded. The group of which this is a part, although there's no perfectpart, although there's no perfectpart, although there's no perfect comparable, has traded lower and this atcomparable, has traded lower and this atcomparable, has traded lower and this at a minimum is going to go back to wherea minimum is going to go back to wherea minimum is going to go back to where it was. The offset to that are peopleit was. The offset to that are peopleit was. The offset to that are people who think the transaction is going towho think the transaction is going towho think the transaction is going to happen. But until a deal is done, we'rehappen. But until a deal is done, we'rehappen. But until a deal is done, we're not going to really see where the stocknot going to really see where the stocknot going to really see where the stock is going to trade.is going to trade.is going to trade. Listen, I'd love for a deal to happen.Listen, I'd love for a deal to happen.Listen, I'd love for a deal to happen. This is obviously what I had termed thatThis is obviously what I had termed thatThis is obviously what I had termed that our shareholders and my research clientsour shareholders and my research clientsour shareholders and my research clients expect and I get what you're trying toexpect and I get what you're trying toexpect and I get what you're trying to do and hopefully they can come to somedo and hopefully they can come to somedo and hopefully they can come to some sort of resolution.sort of resolution.sort of resolution. Excellent. Well, hopefully thisExcellent. Well, hopefully thisExcellent. Well, hopefully this long-form conversation will inform them
long-form conversation will inform themlong-form conversation will inform them in a way that gets us there and we lookin a way that gets us there and we lookin a way that gets us there and we look forward to the opportunity to sit downforward to the opportunity to sit downforward to the opportunity to sit down with the special committee and the boardwith the special committee and the boardwith the special committee and the board and get this done. You're clearly aand get this done. You're clearly aand get this done. You're clearly a passionate person, an activist in everypassionate person, an activist in everypassionate person, an activist in every sense of the word. However, you reallysense of the word. However, you reallysense of the word. However, you really seem dispassionate when it comes toseem dispassionate when it comes toseem dispassionate when it comes to investing decisionsinvesting decisionsinvesting decisions or entirely economically rational.or entirely economically rational.or entirely economically rational. First, is is it my observation correct?First, is is it my observation correct?First, is is it my observation correct? Yes. How do you get to that?Yes. How do you get to that?Yes. How do you get to that? Because it's really important. I'mBecause it's really important. I'mBecause it's really important. I'm passionate about the business. I lovepassionate about the business. I lovepassionate about the business. I love the business. I like companies andthe business. I like companies andthe business. I like companies and helping companies succeed and makinghelping companies succeed and makinghelping companies succeed and making investments. But if you are justinvestments. But if you are justinvestments. But if you are just passionate about buying stuff, you'repassionate about buying stuff, you'repassionate about buying stuff, you're going to make a lot more mistakes. Whatgoing to make a lot more mistakes. Whatgoing to make a lot more mistakes. What requires the dispassion is where yourequires the dispassion is where yourequires the dispassion is where you want to be in analyzing companies andwant to be in analyzing companies andwant to be in analyzing companies and making investment decisions.making investment decisions.making investment decisions. One other thing on Berkshire andOne other thing on Berkshire andOne other thing on Berkshire and Buffett. You owned Berkshire for a very
Buffett. You owned Berkshire for a veryBuffett. You owned Berkshire for a very short period of time near the fund. Ishort period of time near the fund. Ishort period of time near the fund. I don't know if you owned it personallydon't know if you owned it personallydon't know if you owned it personally and sold it. Any particular reason? Weand sold it. Any particular reason? Weand sold it. Any particular reason? We bought Berkshire because we thought itbought Berkshire because we thought itbought Berkshire because we thought it was very cheap and we're both Buffettwas very cheap and we're both Buffettwas very cheap and we're both Buffett fans and even after Buffett passes, andfans and even after Buffett passes, andfans and even after Buffett passes, and I hope he continues to live forever, andI hope he continues to live forever, andI hope he continues to live forever, and he's doing a pretty good job on thehe's doing a pretty good job on thehe's doing a pretty good job on the forever part. I think the nextforever part. I think the nextforever part. I think the next generation leadership is very good and Igeneration leadership is very good and Igeneration leadership is very good and I think they'll be that much morethink they'll be that much morethink they'll be that much more disciplined. There's a lot of value todisciplined. There's a lot of value todisciplined. There's a lot of value to be extracted in running the businessesbe extracted in running the businessesbe extracted in running the businesses that Berkshire owns better. So thatthat Berkshire owns better. So thatthat Berkshire owns better. So that itself is a pretty good story. Iitself is a pretty good story. Iitself is a pretty good story. I actually reached out to Buffett inactually reached out to Buffett inactually reached out to Buffett in February of 2020 expressing my concernFebruary of 2020 expressing my concernFebruary of 2020 expressing my concern about COVID. He dismissed my concerns.about COVID. He dismissed my concerns.about COVID. He dismissed my concerns. And when the proverbial hit theAnd when the proverbial hit theAnd when the proverbial hit the fan,fan,fan, I thought Buffett would be takingI thought Buffett would be takingI thought Buffett would be taking advantage of this amazing opportunity toadvantage of this amazing opportunity toadvantage of this amazing opportunity to buy stocks and he was frozen. The
buy stocks and he was frozen. Thebuy stocks and he was frozen. The opportunities had expanded dramaticallyopportunities had expanded dramaticallyopportunities had expanded dramatically in March of 2020. And we said, "You knowin March of 2020. And we said, "You knowin March of 2020. And we said, "You know what? We can sell Berkshire at a loss,what? We can sell Berkshire at a loss,what? We can sell Berkshire at a loss, which we did. We probably lost morewhich we did. We probably lost morewhich we did. We probably lost more money on Berkshire Hathaway, ironically,money on Berkshire Hathaway, ironically,money on Berkshire Hathaway, ironically, than almost anyone else because of thethan almost anyone else because of thethan almost anyone else because of the scale of our investment." And we soldscale of our investment." And we soldscale of our investment." And we sold part of the stake back to Warren, by thepart of the stake back to Warren, by thepart of the stake back to Warren, by the way. We wanted to at least contribute toway. We wanted to at least contribute toway. We wanted to at least contribute to Berkshire's intrinsic value. We couldBerkshire's intrinsic value. We couldBerkshire's intrinsic value. We could redeploy the capital in Hilton at $55 aredeploy the capital in Hilton at $55 aredeploy the capital in Hilton at $55 a share and Lowe's at 70 and othershare and Lowe's at 70 and othershare and Lowe's at 70 and other businesses and that turned into a verybusinesses and that turned into a verybusinesses and that turned into a very good decision. So the benefit of owninggood decision. So the benefit of owninggood decision. So the benefit of owning liquid securities is you can sell a 70liquid securities is you can sell a 70liquid securities is you can sell a 70 cent dollar to buy 40 cent dollar andcent dollar to buy 40 cent dollar andcent dollar to buy 40 cent dollar and that's what we did. And maybe some 30that's what we did. And maybe some 30that's what we did. And maybe some 30 cent dollars.cent dollars.cent dollars. That's what I was going to follow up on.That's what I was going to follow up on.That's what I was going to follow up on. Buffett's been unusually inactive sinceBuffett's been unusually inactive sinceBuffett's been unusually inactive since COVID and as a Buffett admirer, is thatCOVID and as a Buffett admirer, is thatCOVID and as a Buffett admirer, is that disappointing? Do you think it's a
disappointing? Do you think it's adisappointing? Do you think it's a function of age or I don't know exactly.function of age or I don't know exactly.function of age or I don't know exactly. I mean, if you look, someone wrote aI mean, if you look, someone wrote aI mean, if you look, someone wrote a tweet where they looked at last 10 dealstweet where they looked at last 10 dealstweet where they looked at last 10 deals that Berkshire has done and other thanthat Berkshire has done and other thanthat Berkshire has done and other than Apple, it's been a pretty dry well inApple, it's been a pretty dry well inApple, it's been a pretty dry well in terms of private companies thatterms of private companies thatterms of private companies that Berkshire has purchased. Love the man.Berkshire has purchased. Love the man.Berkshire has purchased. Love the man. He's been an amazing inspiration. IHe's been an amazing inspiration. IHe's been an amazing inspiration. I think Berkshire owns some incrediblethink Berkshire owns some incrediblethink Berkshire owns some incredible businesses. Buffett probably doesn'tbusinesses. Buffett probably doesn'tbusinesses. Buffett probably doesn't like the overall level of stock market.like the overall level of stock market.like the overall level of stock market. They're also at a huge scale. I pitchedThey're also at a huge scale. I pitchedThey're also at a huge scale. I pitched Warren on a couple of what I thoughtWarren on a couple of what I thoughtWarren on a couple of what I thought amazing businesses and he passed and aamazing businesses and he passed and aamazing businesses and he passed and a big part of it is I was right on thebig part of it is I was right on thebig part of it is I was right on the business quality. I tried to convincebusiness quality. I tried to convincebusiness quality. I tried to convince Buffett to buy Hilton from Blackstone. IBuffett to buy Hilton from Blackstone. IBuffett to buy Hilton from Blackstone. I got permission from John Gray to offergot permission from John Gray to offergot permission from John Gray to offer it when Blackstone was the controllingit when Blackstone was the controllingit when Blackstone was the controlling shareholder. Warren turned it down.shareholder. Warren turned it down.shareholder. Warren turned it down. Would have been an incredible home runWould have been an incredible home runWould have been an incredible home run for Berkshire, but Warren sort of has
for Berkshire, but Warren sort of hasfor Berkshire, but Warren sort of has this price discipline where if it tradesthis price discipline where if it tradesthis price discipline where if it trades for more than 10 times operating income,for more than 10 times operating income,for more than 10 times operating income, no matter how good the business, heno matter how good the business, heno matter how good the business, he won't buy it. And that's worked reallywon't buy it. And that's worked reallywon't buy it. And that's worked really well for him for 60, 70 years. Whywell for him for 60, 70 years. Whywell for him for 60, 70 years. Why should he change?should he change?should he change? But we're in a world where there's someBut we're in a world where there's someBut we're in a world where there's some amazing businesses that have veryamazing businesses that have veryamazing businesses that have very long-term growth trajectories. We havelong-term growth trajectories. We havelong-term growth trajectories. We have to pay more than 10 times operatingto pay more than 10 times operatingto pay more than 10 times operating income to succeed in buying a stock orincome to succeed in buying a stock orincome to succeed in buying a stock or buying a business and I think the marketbuying a business and I think the marketbuying a business and I think the market has gotten overpriced relative to whathas gotten overpriced relative to whathas gotten overpriced relative to what he's prepared to pay. Bill, you've beenhe's prepared to pay. Bill, you've beenhe's prepared to pay. Bill, you've been unbelievably generous with your time. Iunbelievably generous with your time. Iunbelievably generous with your time. I look forward to seeing what happens withlook forward to seeing what happens withlook forward to seeing what happens with the special committee. Hopefully you canthe special committee. Hopefully you canthe special committee. Hopefully you can come to a mutually agreeable conclusioncome to a mutually agreeable conclusioncome to a mutually agreeable conclusion with them and thank you so much forwith them and thank you so much forwith them and thank you so much for being on the show. I really enjoyed itbeing on the show. I really enjoyed itbeing on the show. I really enjoyed it and I appreciate the questions. Thankand I appreciate the questions. Thankand I appreciate the questions. Thank you. Thank you. I hope you enjoyed the you. Thank you. I hope you enjoyed theyou. Thank you. I hope you enjoyed the show. To be sure you never miss anothershow. To be sure you never miss anothershow. To be sure you never miss another World According to Boyer episode, pleaseWorld According to Boyer episode, pleaseWorld According to Boyer episode, please follow us on Twitter @BoyerValue.follow us on Twitter @BoyerValue.follow us on Twitter @BoyerValue. Until next time.