Moderna's Cancer Vaccine Breakthrough & Why Uber Could Win the Robotaxi War

0:28This episode is brought to you by Accenture. Welcome to Stock Club, the podcast where we find and discuss stocks that anyone can buy, many of which we believe will go on to grow your wealth. Well, as I record and as I sit here opposite Mike in the real world, as this drops, we are in the Market Bar in Dublin, Thursday, 27th of August for Investicon, which is year one of our get together in real life event. as you only know too well folks and in and around now if you're listening to the podcast as it's dropped we are on stage talking about our top three favorite investments so mike you and i thought we'd talk about our fourth favorite investment so rather than stealing value from the very show that we're out to do in the real life we thought we'd kind of say well what stock was just pipped at the post by another three so we're both going to talk about a stock that we really really like but didn't make the top three cut

1:37yeah yeah i kind of viewed it we always talk about desert island stocks the stocks you can invest in and come back in 20 years and there's 10 different names though kind of those kind of stocks the coffee can portfolio the set and forget whatever you want to call it just the one you're very comfortable investing now and not touching and not even thinking about it's not possible to not think about but do you know what i mean to have that kind of comfort i suppose and for me the stock i'm choosing today doesn't really fit into that because while I don't believe it's a binary outcome, there is a kind of a yes or a no outcome down the line of whether this plays out in a certain way or whether it plays out in another way.

2:24And I could be coming home from a stranded island Tom Hanks style with my volleyball under my hand and it went the wrong way. So that's why he didn't make the top three for me, but I think there's a very compelling argument for it. and i don't know what it is because what i told you last night what stock i'm going to discuss you didn't mention to me where you're going and funny as you know mine is the same and that's why i've put it in this hypothetical fourth place there's a long list of stocks i could have put in fourth place and selecting the three and a lot more solid stocks if you know what i mean like yes for sure so for sure while it's fourth in the sense of it didn't make the top three it's also didn't make the top three for specific reasons um likewise likewise in fact the reason it so the stock i'm going to talk about came out of nowhere like it was not in my top 20 one week ago and now it is a contender for what possibly might be seen as one of the greatest breakthroughs in the history of humanity and we all hope it is and you know what i'm on about so who's going to go first we've done enough teasing so you you start us off there because i think um it's the hot hot stock the hot topic at the moment anyone that follow financial markets will have at least read a headline if not much more so you you jump in yes so last wednesday and wednesday of last week moderna's stock went up 177 percent in a single day and well over 100 percent of that was at market open like the entire monster business already multi-billion dollar business doubled in value as the exchange bell rang um and that kind of move never happens to a company as far as i can remember with a 25 billion dollar market no but it is it's still biotech and those moves do happen in biotech even though it's much bigger they do they do and that was exactly what i was thinking when you were saying yours has somewhat a binary outcome because this uh had quite the binary outcome not so so binary that it was a one or a zero uh but i think it's really worth time worth spending some time understanding why this beast jumped 177 because underneath the headline is as i said one of the more exciting moments in recent humanity if in fact what we're being told is true so here's what happened.

4:57Moderna and Merck announced results from a late stage trial of a personalized cancer vaccine called Intismiran, which was built on the mRNA technology with Merck's technology. So in patients with high risk melanoma, which is aka skin cancer, who'd already had surgery, the combination of this drug significantly reduced the chance of the cancer coming back and it also reduced the chance that it would spread to other parts of the body the two big fears i think that someone who's gone through remission or is going through a procedure has like is this stopped and is it going to spread and both goals of the trial were a hit They smashed it out of the park.

5:49And this is the first time an M or an A cancer vaccine has ever succeeded in a phase three trial ever in the history. Even just the words cancer vaccine. I think I think we're getting into the weeds a bit too quickly on this, like how momentous that is. Yeah, yes. Like, you know, yes, you're you're so right. It is like we've all awaited a panacea. And I mean, I'm no expert on cancer, but I do know it's a broad term used to describe something like 400 different forms of a disease that fall under a vast canopy. But anyway, you're right. Before we go deeper, because for the last three years, the story of Moderna has been almost entirely a negative one.

6:39It's just been slapped and beaten down. The COVID vaccine demand collapsed, obviously, and revenue fell from$19 billion at the pandemic peak, you could say, to just under$2 billion. So that is quite the collapse of a financial empire. And the company was burning through cash, absolutely lashing through it, closing in on something like$800 million a quarter in losses as recently as this year's Q2. So what happened and what happens when you see those kind of negative trends, both from a revenue in and a cash burn perspective, is short sellers pile in. and we've done podcasts in the past about what is a short seller but they're basically people who are betting that this stock is going to continue to deteriorate and in this case they were betting the whole m or an a platform was a one-trick pony that had already played its only trick and for example bank of america had a price target of 40 on the share and they this week or rather last week we're recording last week but we're dropping it this week but last week they raised from 40 books to 170 books as a target so there's a change of mind right there from one major institution that that makes a living from predicting these things not very accurately i might say morgan stanley on the other side of wall street um more than double their price target from around 39 bucks to about 89 bucks and short sellers lost an estimated 5.5 billion dollars on paper in a single trading session in other words in a day so what's actually going on here and why should we care why have i suddenly also grabbed hold of the tail of the donkey and brought it up to fourth place in my list of stocks to buy and hold forever so what i've described so far really all comes from a money perspective you know share price goes from x to y price targets go from y to z whatever i've given hit numbers and the amount of cash they made or revenue they made in a year and perhaps falling from 19 to 2 billion dollars but um and that i guess is the main focus of our chats mike we sit here and we talk about businesses because we are irish capitalists we believe in the beauty of capitalist system once human beings are put first and um that's what we do but this but putting that that once human beings come first thing i think knowing you and you knowing me is for us that matters far far more i know our listeners that matters more so if we just park the stock investing thing for a minute and i'll come back to that this is something that's potentially far far far far more important than investing because it is potentially humanity changing.

9:32Potentially. Potentially. And the excitement is that this potential is actually moved up the scale from possible to probable which is quite the total really. The phase three success that's gotten this far. Nothing has gotten this far in terms of applicability and the potential scale for a disease like this. So it's incredible.

10:01advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales, using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify. It is so true. I mean, the core idea behind Moderna was never we make vaccines. That was never the thing. Sorry, Moderna's name comes from, I think it's Modified RNA, M-O-D-E and then RNA.

10:43So their name, at the time, I remember, I think that was quite a good name, Modified RNA. But they were never about we make vaccines. what they were always saying is we've built a platform that can turn any genetic instruction into medicine that old suitably advanced technology is indistinguishable from magic quote from rth c clark springs to mind to say that again they are saying they can turn any genetic instruction into a medicine and once that platform works for one thing it should work for loads of things that was their pitch way back when and they were like oh we've the world has just been hit with a mega problem called coronavirus a superhero was born um and that worked as i said very well and i think a lot of people i don't want to get into a vaccine argument with anyone online but vaccines by moderna were sold and many would argue were effective but the market has started I guess I should say the market had started to assume that it was a one-off and it was a lucky break tied to a pandemic as opposed to this repeatable technology.

11:51I think that's the analysis is the technology used which would probably

12:00I don't want to say took for granted but like there is that aspect of you know these vaccines came about so fast all based around this mRNA technology and obviously it was expedited and the investment there and the support there was like nothing we've ever seen from the global global pandemic and that definitely expedited the entire process and the advancement of mRNA technology in general um so we wouldn't yeah yes ironically we wouldn't be at this point this fast if COVID didn't happen just because of the focus that mRNA technology came about. So it is a weird kind of checks and balances inverse if you're a person of faith or everything happens for a reason and you get a bit philosophical on the whole thing.

12:48Yes, indeed. And you're so right. I mean, when you think about it, there was nothing that caused us in the first world to all think about a subject more, like to think about a vaccine more than the coronavirus. Most of us that had vaccines in Ireland, certainly every child gets three vaccines as they're born, but you don't go through life thinking about it. But now we were all sat at home going, well, I hope there's a vaccine to, sorry, some of us were thinking, I hope there's a vaccine to this. I'm actually using, even couching my language because I know people who I'm close to who are absolutely opposed to vaccines And I'm in the other side of the room, but parking that.

13:29This melanoma result is the first hard trial evidence in a rigorous late stage trial that the platform generalizes. It's not just we make vaccines for a virus. It's we can build personalized medicine tailored to an individual patient's tumor. And it measurably helps them survive longer without relapse. And that's fundamentally different. and it's a much bigger idea and why I had goosebumps when I read the breaking news story flash on my screen. And it's indeed why it's suddenly the fourth place contender for my stocks to buy and hold forever. And again, it's very, very risky right now. And the price has been hyperinflated through the very conversation that I'm having and has been had across Wall Street for the last week and a half or so.

14:16So this isn't a one-shot bet on melanoma. No, it's across the... No, it's not. Across the gamut, pretty much. Yes. Yes, correct. I mean, this intismirin, which is the name of the drug, is currently running in nine separate phase two and phase three trials across beyond melanoma, but also into non-small cell lung cancer, bladder cancer, renal cell carcinoma. Like, it's a long list of very grisly, awful diseases that humankind has had to face down since, I guess, the beginning of humanity. But what the market is pricing in right now isn't just a melanoma success because that's now suddenly, even though it's been stuck in the bag.

15:01It's the market according to investors, yeah, which is just how the stock market works. You know, it's always a pendulum one way or the other. Yeah. But it's interesting as well. And I suppose there's two things here. We can get into the weeds of like commercial viability and the fact that it's a very personalized medicine. means that its scalability isn't as effective as just a jab in the arm we'll say um but i don't think that's what the focus should be right now i think the focus we've always mentioned how like is and if you are a stock investor you have to be a perennial optimist because you are investing for the future you know you mean you have to see a future that is more positive than now even if it's just on a very micro level you're talking about specific business but like if you expand that out why wouldn't you want to be investing in a stock that is literally out to cure cancer like as we've been using the term cancer vaccine here about five or six times in this podcast in 15 minutes do you know what i mean like that is a yeah the sheer of just wanting something to work out and there are a lot of look there are a lot of businesses that just want to make money and that's fine too and there is an economic aspect to investing it's the entire thing for certain people but why wouldn't you also want to be investing in the companies that are out there trying to cure up until now unsolvable diseases that are changing the world like for truly for a truly better better world in the future so it is like as in we can we can discuss the kind of ins and outs of it too because like as in i know crisper therapeutics is running into these obstacles now where it is it is literally created a cure for sickle cell disease.

16:41Like there is a cure for that. That wasn't there two years ago between it and Vertex Pharmaceuticals, but the stock hasn't reacted to it in the same way because so expensive and it's such an invasive personalized procedure. And like, isn't it cost four or 5 million, I think for each course of treatment, that's not a shot in the arm. And that's the commercial realities of what this could become. I'm not saying it's going to be the same process at all. But what I mean is that, you know, it's not like you go in and you buy, can I get the cancer vaccine from behind the desk of the pharmacy either.

17:19And so with biotechs, with this stuff, there's, it's like we said, you know, once you put that in the back pocket, yeah, oh yeah, there's the cure for melanoma. It's not as simple once it plays out. and the execution is so much different than amazing results and as biotech as an industry in general but but that's less important isn't it do you know what i mean in general if there's this company in 10 years that can stand over a genuine cancer vaccine you know yes we'll get we'll get through that stuff like it's funny so many thoughts flooded into my mind when i read this story one i can't recall if i said it on this podcast or to my family over dinner but it was i I said it to someone where there's a kind of narrative running out there at the moment, which is just survive the next 10 years because in those 10 years, a cure for almost everything will be found.

18:11Whether that's true or not, it's certainly predicated on a foundation of optimism. The other thing I was thinking was that in last week's podcast, I spoke about how David Gardner had selected NVIDIA before it had a 138 ,000 % run up. and I mentioned at that time the only thing he could see was that they made better GPUs for playstations and peripheral devices and screens and the direction of travel was very future relevant and as it happens he I mean at that time David couldn't predict that Nvidia would be central and at the center to the success or the growth or the hyper growth of AI as a technology that touches our lives well i wonder is this like nvidia is moderna the nvidia of the medicine world but you know when you're in a moment it's very hard to see we don't have a crystal ball but we can't seize the direction of travel i mean a lot of the excitement this week completely glosses over something really important which moderna is still today a financially fragile company q2 revenue was 145 million dollars and the net loss was eight sorry 782 million dollars and the core of the business is just bleeding cash every day of the week every single quarter so they're guiding something like 4.7 to 5.2 billion in cash in cash on the balance sheet at the end of this financial year which gives them decent runway but if you're lashing through 800 mil per quarter not that much it's not an infant runway and it was also i'll also i'll also slap you there like the fun fundraising ability goes up a bit now if you're out your cancer there's people queuing up absolutely absolutely if they said we need we need a billion bucks they wouldn't the cfo wouldn't need to get up off her or his chair they would literally have a list of a queue as you say our line of suitors outside the door um and they also had a something like a 950 million dollar litigation settlement this year that ate into the balance sheet but that's a month off and i don't know the details of that but it's water under the bridge nonetheless but it's not a company printing profits uh by any stretch um you know and it is a company that was genuine i don't know what tense to use is or was genuinely under pressure um and and this this lifeline is news it's news but it isn't fake news it's news that scientists and a very rigorous fda process um exerts on on on drug companies for obvious reasons so that combination of the real financial stress plus a genuine platform validating result is a kind of setup that tends to have a dispersion in outcomes.

21:09So, like, I was reading one piece last night on Seeking Alpha who regraded it to a hold rating, saying, like, hold on a minute now, folks, this phase three data hasn't even been published yet. And it was an interim readout, and the path of regulatory approval and actual commercial sales is still ahead of them and is a huge mountain to climb, which I don't doubt. I do not doubt. But I do think, having never worked in the industry and the gnarly process of selling a drug, you would think that the sales process, once it's approved, will not be a hard push. You would imagine being pulled hard by those poor people who are looking at this news today and going, I need that.

21:54And the average analyst price target is still well below where the stock is just traded to. You know, most of Wall Street hasn't caught up with what the long-term oncology opportunity might be worth yet. So that gap between, you know, what the market is believing and what's actually being proven is probably where the opportunity and the risk both exist. Because it's a bit of both. but how I would frame it Mike before we move on and talk about your your pick is that you know I think about businesses for Horizon as you know all week long I look for founder-led or mission-driven companies with a genuine technological edge a long runway and above all the willingness which comes from within to be patient throughout periods where the market and other people have completely given up on the stock and you know what horizon is like it carries businesses that are up sixfold and some that are down 60 and moderna you know has spent three years in that kind of wilderness and unfortunately i didn't pitch it like i have oh my goodness i've watched this stock for the longest time um i haven't pitched it yet i might i might i with i I reserve the right to do so.

23:10Revenue down 90 % from the peak, stocked down for years and years and years in a row. It was written off by most of Wall Street as this kind of COVID relic, you could say. But underneath all of that, they just kept funding a pipeline of these nine oncology trials on this platform that they believed in, which we, to varying degrees, benefited from. You know, I don't have the stats here, But I think the development of that vaccine was at lightning speed in comparison to other vaccines over the course of humanity. Like, as far as I know, we still don't have a vaccine for the common cold. Because the burning platform wasn't as hot as that for coronavirus.

23:53Pretty sure some scientists listening will go, ah, yeah, but nonetheless. Would I tell you that Moderna is a sure thing today? A bit like your desert island stock, which I'm looking forward to hearing about. No way. It's still loss-making. It's still burning cash. It has one strong phase three readout, nonetheless historic. And it's not the same as years of proven commercial oncology sales. But what I will say before I shut up is this. The single biggest question hanging over Moderna for the last years was this. Does this technology actually work for anything other than the pandemic vaccine? and this week for the first time that evidence was given to us straight between the eyes and and the answer is more likely a yes than a no so it's it's tilted from a we don't know and therefore it's more likely a no to very very probable and that's not the end of the story if anything it's the first way to prove that um that we we all humans are hopefully on a road that season end to that family of illnesses that just has taken far too many people too soon so for that reason i'm like yep i want to be invested in that i wanted to succeed what i buy it and go to a desert island for 20 years i would yes and what you really hope then as well i suppose is this is it's kind of like you know where uh they thought the four minute mile was impossible until roger bannister did it and then someone did it two weeks later and and it became it became in the rearview almost immediately and there is just that once a milestone has been crossed it's almost like it opens the floodgates and you know who knows we could be here in two three four or five years and this could be and it's the way it goes because you know we're we all humans we we have only we're all acting on approximately the same information with approximately the same technology set so people arriving at the same destination our companies arriving at a similar destination at the same time is not that shocking and when you read about you know how come apple and hewlett-packard were born within a few miles of each other and all the other giants of the digital world how come steve jobs and bill gates were born within a few years of each other there's a book about it I forget what it is what it's called I had a good chat about it once upon a time when we did a section called I read a book but it's just the way it goes as in other words that's just the way it goes so so you may bet there's someone out there who ha who are doing something similar to Moderna and they just aren't on my radar at the moment but Moderna is and over the next 18 months I'm going to be kind of watching for the full phase three data release i'm going to be watching for their fda submission timeline and whether the other eight oncology trials start reading out in the same direction if they do that's kind of like that's where it goes from goosebumps to your jaw falling open because we are looking at the birth of a humanity superhero that's my view i like that for sure uh okay anyway i didn't go i didn't go that direction at all in mine but it's a similar one in the sense of oh tell me give me a clue can i play the guessing game you can if you want or i could just we're about to tell you anyways no i know that's why i stopped you going give me one um i'll try to give you a clue if i can run it away uh so it is threatened by a technology a future technology that hasn't really arrived yet but at the okay the quantum no in that area it's threatened by a moonshot technology and it was originally a disruptor This episode is brought to you by Accenture.

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28:15uh is it it's uber ah yeah so we could we could kind of pussyfoot around and talk about like new markets and so self-driving is the is the disruptor is that and i think that's the crux of the entire investment thesis like is and we can talk about like entering new markets and growing cash flows and yada yada yada but if we're talking about a long-term investment thesis on uber it all comes down to autonomous driving and i implore everyone listening yeah who is an investor in uber or considering being one to go back and find the interview between stratechery's ben thompson and uber ceo dara kosar shahi um so i've always admired kosar shahi he came in from expedia and he cleaned up travis the mess travis kalanick left behind he took the company public he survived through covid um and while the returns haven't been amazing since ipo i think the business itself has developed into something that is so much more solid it's gone from this almost irresponsibly it was especially under california irresponsible disruptor move fast and break things um yeah to the clear market leader in ride hailing it staved off an awful lot of competition again kind of almost irresponsible competition in the sense of you know they were like yes they were like they're threatened by lyft in particular in the u.s who was losing money hand over foot and in a sense was not running a sustainable business at all and Uber was able to outlast them.

29:45And obviously there are other competitions around and there's localized competition, but in general, globally, clear leader in ride hailing, diversified heavily into delivery as well. And it is a market leader there. It's a much more competitive market than ride hailing. And that's all turned this company, this huge loss-making company, into something that's been incredibly profitable in the last few years probably hasn't been adequately rewarded for that turnaround in terms of stock market returns yet and i think that's where the opportunity lies with uber um yeah go back to uh koster shahi and the interview with ben thompson last year so it's a big long-ranging interview on autonomous driving for the most part and and the threat and the opportunity that lies within there for uber and he obviously he says the things you'd expect and to say it's a huge opportunity it's a long way from reaching any type of meaningful scale just yet and that you know it really needs to prove like the superhuman level of safety the local regulation is obviously going to be an obstacle there's nothing new there and it's very kind of top level stuff and it's almost like you have to check the box if you're having a conversation about the future autonomous driving let's get this out of the way but then what i really like to see from him is that he gets into the weeds of the actual logistics around what running a robot taxi fleet from city to city would look like so he talks about like city by city depots cleaning charging everything you need on the day-to-day basis of it because so much of this is pie in sky stuff massively massively operational you know robots robot cars going in to be cleaned hoovered out washed maintained i mean even that alone in itself is a logistical mind-boggling feat when you think of every city and 100 and then what i found really interesting is he he wedges in to the crux of how uber fits and all this and it's the high utilization network so that you were able to manage demand for this fleet of taxis because this you know this is the this is the aggregator argument really so each individual yeah a.b autonomous vehicle is incredibly expensive to make so you need to make as much money out of that as possible as much utilization as possible now eventually maybe waymo's app might have that kind of demand it could be integrated into google maps integrated into your google account whatever else maybe tesla if it eventually comes online in any real scale just because of the kind of following that tesla has as a company and elon musk's influence and and maybe he integrates that into twitter too i you know there is potential there but there is going to be a wide market of av players tens if not hundreds of global players who need to recoup the cost of building out their fleets by essentially milking as much cash out of each car as possible having on on the road in a paid trip or on the way to a paid trip as much as is physically possible for one car to do like you know imagine i made this analogy imagine if you deployed like the humanoid tesla robots into your factory and you see one of them on a smoke break that's the equivalent of seeing that's the equivalent of seeing a parked waymo car for google buses do you know what i mean so i'm going to read out some direct quotes from the interview because i think it encapsulates the argument for uber in this autonomous race and why it is the opportunity so is the direct code at some point you need economics to work in order to scale and in a world where certainly if the cost of capital is high and these cars are relatively expensive the player that's able to drive the highest utilization of these vehicles is going to have the lowest cost of capital the player who works with us is going to be able to expand into every single market very very quickly will be first to market and being first to market matters and i think those two elements which is lowest cost of capital ability to scale fastest and going are going to play to the advantage that we bring in terms of being the best partner for av in the world so we're pretty confident of our position who cares if you lose 20 bucks on a ride on a small number of rides but if you're doing 33 million rides a day losing 20 bucks a problem 20 bucks a ride is a problem you've got to start making money and that's what it boils down to i think he's really really nailed the argument of you see waymos and this is very city by city basis but like san francisco is kind of the hub we'll say for now and you know austin and vegas and everything else but you see waymos and you see autonomous driving there and you're like oh no uber is effed but that's such a small subset and it also doesn't take into account economics at all and what costor shall is saying is that wait let's zoom out and look at big picture here because this is all fine and dandy to prove you know demand to prove uh your concept to prove it actually works to build up a safety record when it went when it gets down to brass tax which won't be for five ten years you know he's talking about 33 million rides a day which is equivalent to what uber is doing when it gets up to that scale you really need cannot lose 20 a ride which is i i assume a rough uh number of what waymo is losing i'm using waymo because it is by far the most advanced in this race so far for sure yeah so yeah he goes on and i'm going to quote again because i think he is and it's very strong that's a super strong quote because part of there's a lot of psychology in what he just said there because it is in essence a threat as well and it's a joy join us to join us to grow or watch us or wipe you out you could say is what he said but it's a completely biased opinion too like he obviously has to say of course it is what he believes is going to happen in favor of him and he's not going to lay out you know waymo takes over the world and you know we're f like which which i feel and i talked about the minor option i'll get into it more later but i feel like that's kind of the black and white view of this waymo go up yeah um but sorry i'm going to read one more quote from you because i think he's he's really really intelligent and it's the best uh it's the best analysis i've seen so far on autonomous driving as a whole, especially the robo-taxi aspect, obviously.

36:08And obviously it has to do with how Uber fits into all of it. But I'm just going to finish off with one more quote. He says, talking about an aggregator in the AV market, ultimately we think there are going to be multiple players. Waymo is absolutely in the lead. They're a great brand. They are setting the safety standard for everybody. But what we're seeing is many players are solving this issue. And ultimately there's going to be a choice of taking a Waymo, taking a Neuro, taking a WeRide, or taking a Baidu robot taxi as well. That choice is going to come in for consumers. And I do think the aggregator model certainly would be helpful for all of those companies to succeed.

36:40Now that interview was in early 2025, I believe. So I'm just going to read you out a list of headlines from Uber's IR page this summer. So since April 30th, let's just listen to the amount of deals and partnerships here. And it really makes a strong argument for this aggregator model. So on April 30th, Herbs and Uber partner to power autonomous robotaxi and driver-led fleet operations. June 1st, Autobrains and Uber launch Agentic AI Robotaxi program in Munich. June 2nd, We Ride, Uber and Avomo bring robotaxis to Madrid. June 17th, Uber, Nuru and Lucid bring robotaxi service to Houston. June 17th again, We Ride and Uber plan to launch commercial robotaxi service in Zurich.

37:29uh august 5th wave and uber move a step closer to autonomous rides in london august 13th uber partners with hinamaru katsu for robo taxi pilot deployment in tokyo august 13th pony.ai and uber expand partnership to deploy over 2 000 robo taxis in europe august 19th uber launches autonomous rides in europe august 20th uber launches baidu's fully driverless apollo go in dubai so that's the space of what four months and you've got 12 different partners named in that list can you imagine what's going on in hq as you're listing that out i thought the the brain power the human power behind those deals is something else because each one of those has a team of thinkers behind it negotiators contract writers readers logistics i mean that is some serious and look there's a huge pr element to this as well like uber knows that it's uh investment thesis lies around driving and they have to be shown to be doing as much as possible um but just just 12 names there i think i've heard of maybe three or four of them yes do you know what i mean actually i was gonna on that when you're reading out the the statement from 2025 you said the second name you said was uru is that right uh nuru there was the nuro i never even heard of those guys and this is what i mean so like obviously there are the most advanced players you have waymo uh amazon zooks yeah tesla i'm not sure where to put tesla in this whole thing i there needs to be a bit that's there needs to be a bit more proof in the pudding there uh i think um but but they're not really part of the conversation obviously i think if Waymo becomes incredibly dominant, that's a different question.

39:21And we're talking about Roger Bannister and the four-minute mile. From looking at that, it looks like this technology is going to be eventually commoditized in some shape or form. There might be a clear market leader. I think probably Waymo is going to be that clear market leader. But there still will be an awful lot of players. And when technology gets commoditized, it turns into a race to a bottom in terms of price. in that case you have uber sitting here sitting on the sidelines with an asset light business model not spending billions and billions of dollars on hardware uh you know they could benefit pretty much everyone in the market in terms of this utilization that's so important to get their roi and the money they've spent and that for me makes a very intriguing investment thesis so we go back to the binary issue of you know way more good means uber bad and it's just so much more nuanced than that like it doesn't it does this is why it doesn't fit cleanly into the mold of a desert island stock because i think there is this like pivot of sorts in the future of whether it plays out the aggregate model wins out which i do believe so but there is a chance that it doesn't and just these all kind of internalize their own apps their own demand network whatever else which i would find hard to believe that 15 20 30 companies would go and do that themselves especially when they spent a s load of money already on building out this really really expensive fleet of taxis with lidar and all the rest so so that's that's that's the thesis really i'm not going to go into uber like you know talk about delivery talk about new markets you wrote a great you wrote a great piece on on uber for stock a month not too long ago it was such an analysis but I'm going to bring it back to Lady Bird, childlike level for our listeners now, because they love when I describe a graph.

41:17You know I love describing graphs. I used to have a degree in graphs. So for our listeners, Uber floated in and around summer of 2019, and then it went up a bit. It went up about 45 % by the summer of 2021. so about two years or slightly the springtime of 2021 it had gone up 45 but then from that springtime it fell right back down and it was way down it fell about 65 to way below its IPO price it was kind of at that lowest point ever ever it's about 20 bucks a share and by the way it's nearly 80 bucks a share now but then from that low point of about 20 21 bucks a share in summer of 2022 it grew grew grew all the way up uh to an all-time high of around september 2025 so just last year it hit an all-time high of nearly 100 books a share and now and then it fell a bit so in summary it went up a bit then it fell a good bit then it went up a lot a bit and now it's fallen back a bit so it's fallen from 100 books a share to about 78 books a share so it's kind of a you would say if you're an economic nerd which i absolutely am not it's a secular ball up a bit down a bit up up up up a bit down down down a bit and now it looks like it's going up a bit i think it's going to go up what do you reckon mike well it's funny like isn't when it was at those all-time highs uh this time last year that was very much based on improving profitability expanding markets and all the rest and then it kind of got this shock of waymo's expansion i think it was in san francisco where waymo's growth in san francisco was nuts and it was eating out proper market share from uber and that spooked everyone yeah and in the short term rightfully so you're losing market share to a competitor that has this fancy new technology and waymo is was originally partnered with uber in certain cities and is moving away and trying to do it himself, which is, you know, the reality is, I suppose, I imagine Waymo probably won't end up on Uber's network, but I think everyone else will.

43:32And I think it's crazy. We just mentioned that list of whatever it was, 12 players. That's so much. Do you know what I mean? This is just evidence that this technology isn't, you know, under lock and key from one big company. And there isn't as much barriers to entry bar, pure cash, as would be expected for such an advanced technology. So with that, guys, I think there is a very appealing argument to be made for Uber as a stock. I own a couple of shares, not that many. I probably will own more by the end of the year. So yeah, that's where I stand on it. I wouldn't be comfortable to not be able to monitor the investment thesis for 20 years.

44:18That's why I probably won't be talking about it today at Investicon, but there is definitely a compelling argument.

44:50or at Accenture.com slash Spotify. I read about many moons ago, and I've spoken about less many moons ago on the Stock Club podcast about this thing called the Economic Rule of Three, which is, it's not a rule, actually. It's a hypothesis that in every mature industry, there's only real three big players and then a whole load of boutique, smaller niche local players. If you think of like baked beans or the motor industry or aviation, or there's just a giant consolidation phase where eventually there's three giants, as I said, and smaller ones. And you've got to imagine that if self-driving, quote-unquote, continues, and it is the de facto standard in 20 years from now, that Uber is one of those three that dominate the landscape.

45:50So when I think of the economic rule of three, I don't know if it's called the rule of three, but if you stick it into Wiki, I'm sure you'll see all about it, read all about it. But their history, commerce is littered with examples in mature industries where there's only three giants. And when it comes to this particular industry, self-driving, I put money on the fact that it will be one of the three. i also was thinking as you're talking about travis kalanick who um once upon a time i decided i'm never going to buy shares in uber because this man has said things that are fundamentally fully at odds with my values and then it's funny how time erases the the pain and i'm like i can't remember what he said but i know i was pretty upset at the time bad guy by all accounts i think yeah well i have a good i have a good memory for good things and a bad memory for bad things and And I definitely can remember the feeling going, never will I invest in that.

46:45And now I'm like, I like it. And that sounds like a great investment. And then time is the healer. I think it was he, Travis Kalanick, who said in one of the earlier conference calls that I used to listen to that Uber would never be profitable until there are flying cars. There you go. Yeah. Yeah. Yeah. Well, that didn't age very well. oh yes mike it's time for following profit where i are you no it's always me so i can't even bring rope you into this it's following profit folks where i spotlight one or in today's case four of profit's current 10 stocks this is our just tell me what to do service which is getting better and better it always holds 10 stocks it rebalances every four weeks on a friday don't ask quite it's Friday.

47:38There's a reason. And as usual, I knew to caveat following profit in with the words to say that I am talking about a company in the knowledge that profit may sell it in a couple of weeks. We just don't know what profit's going to do till it's done because it is done by the machine in the sky. As I record, which is actually last week, don't tell anyone, a profit's performance in 2026 is it's up 35.66 % this year so far. In the last 12 months, it's up 47.23%. And its performance in the last five years is it's up 159%. Its performance over the last 10 years is it's up 641%. Now we're starting to talk business.

48:28And its performance since inception, which is december 2009 is it's up 2332 which is a 24 bagger if you never even added cash so profit has the weight of time on its side as in it's proven with time so the profit portfolio rebalanced on the 14th of august less than two weeks ago and it was a big one because it sold four stocks it sold coca-cola and locked in a 7.74 percent gain it sold dicom industries and locked in nearly three percent gain it sold jabil and it locked in a 76 percent gain and it sold ross stores incorporated and locked in a five percent gain so it sold four stocks all very nicely profitable especially jabeel which was up 70 up 76 and it replaced them with four because that's how it works and i'm going to tell you two of the four it was replaced uh that it replaced and they're flying already um they're doing great so it bought ati incorporated whoever heard of ati nobody not even the people who work there and it's up one percent there you go you're welcome and the other stock it bought which everybody knows one of the other four that it bought that we all know is caterpillar makers of muck movers and it's up marginally it's up about 0.4 percent so um if you want profit and you go geez that's a great thing i want that and then you go but it's too expensive here's what you do you chip in with your best friend and your brother or your mommy or your daddy or your stepbrother or someone else and you chip in and you're going to love it and while it's still only 2 ,000 bucks on useprofit.com if you want a deal just email frank at mywallstreet.com okay that was following profit how did I do Mike?

50:39Spectacular as normal thank you, thank you my friend thank you alright so look next week we'll We'll talk, what are we going to talk about next week? We'll decide after investing. Perfect. All right. Thank you very much for joining me and thank you everyone for listening. We'll talk to you next week. Hi, Ryan Reynolds here for Mint Mobile. Are you looking for a beach read this summer? May I suggest your big wireless bill? It's got suspense, mystery, a slightly flat emotional arc and a shocking twist where you realize you've been overpaying the entire time. Fortunately though, Mint's story is better.

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