"Unsurprisingly, neither Roku nor Quibi announced the terms of this acquisition deal, but Deadline cites trusted insiders who peg the deal at a value of "less than $100M," or at best, 5.7% of Quibi's original $1.75B valuation." arstechnica.com/gaming/2021/01… $1 is one number < $100M.
"The deal revolves entirely around "content distribution rights," Roku will not be acquiring anything in Quibi's technology portfolio."

Quibi didn't own the content.
Owning the direct relationship with the customers and the data produced by those relationships is powerful. That was the core of the dispute between Roku and AT&T over HBO Max. theverge.com/2021/1/8/22220…
"One person said it was “significantly less” than $100M... exclusive to Roku for the time left in Quibi’s exclusive two-year window with content creators. After that exclusivity window closes, Roku will retain the right to show the content until 2027." wsj.com/articles/roku-…

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More from @trengriffin

9 Jan
1/ Charlie Munger: “We have the same problem as everyone else: It's very hard to predict the future...”

"It's highly likely that the people who confidently think they know the consequences – none of whom predicted this – now they know what’s going to happen next?" Image
2/ Charlie Munger: “Stocks partly sell like bonds, based on expectations of future cash streams" This is investing.

Munger: "Stocks partly sell like Rembrandts, based on the fact that they’ve gone up in the past and are fashionable." This is speculation. Image
3/ Munger: "If stocks trade more like Rembrandts in the future then stocks will rise. But they will have no anchor. In this case, it’s hard to predict how far, how high and how long it will last.”

Munger puts speculation in the "too hard pile." Margin of safety needs an anchor.
Read 6 tweets
4 Jan
1/ Rafiki: "I'm having trouble teaching Simba about price elasticity of demand"

Mufasa: "It's how sensitive the quantity demanded is to its price."

Zazu: "Ask Simba what will happen to demand as Starship builds a Starship every week and price drops?" arstechnica.com/science/2021/0…
2/ Rafiki: "Simba has a hard time with the difference between inelastic demand and elastic demand."

Mufasa: "Inelastic demand means there is only a slight or no change in the quantity demanded."

Zazu: "New supply Starship will bring to launch markets is a teachable moment."
3/ Mufasa: "A SpaceX Falcon 9 can launch 60 Starlink satellites at a time. Starship's ability to launch 400 satellites per trip is a big game change."

Rafiki: "We don't know what will happen to demand when that happens. It has never happened before"

Zazu: "That's the fun part."
Read 4 tweets
3 Jan
1/ Simba: "Have we asked Disney for a cut of Lion King revenues?

Mufasa: "Disney has all the pricing power. They can use erasers to make us disappear any time."

Simba: "Pricing power?"

Mufasa: "The critically important ability to set higher prices without losing customers."
2/ Simba: "During my internship at Liberty people quoted John Malone saying things like 'It may be that Disney captures the profit but for now cable's got enough pricing power in broadband to make up for that.'”

Mufasa: "Malone rolled up cable with scale-based pricing power."
3/ Simba: "What creates pricing power?"

Mufasa: “It’s your alternatives that matter. Every business is constantly scanning the world trying to get its opportunity cost as high as possible. Opportunity cost is a huge filter."

Simba: "You're quoting Munger!"

Mufasa: "Exactly."
Read 8 tweets
1 Jan
1/ Simba: "I'm raising a VC fund."

Mufasa: "Et tu Simba?"

Simba: "Investing in public companies is too hard. Doing what the top VCs do is easy. Even hedge fund managers are raising VC funds."

Mufasa: "VC returns aren't evenly distributed. VC fund returns are a power law."
2/ Simba: “Everyone knows you need to invest in a portfolio of businesses due to the power law distribution.”

Mufasa: “The returns of VC firm themselves reflect a power law outcome - power law outcomes don’t just happen inside the portfolio.

Simba: “I’ve seen data from…”
3/ Mufasa: “VCs like Benchmark and Sequoia don’t reveal performance data to sellers of these reports that otherwise just scrape public filings.“

Simba: “I have a proprietary strategy to attract deal flow.”

Mufasa: “Which is?

Simba: “Social media. Tik Tok mostly.”
Read 5 tweets
31 Dec 20
"If you've got the power to raise prices without losing business to a competitor, you've got a very good business. And if you have to have a prayer session before raising the price by a tenth of a cent, then you've got a terrible business."

Warren Buffett variety.com/2020/digital/n…
2/ Charlie Munger: “There are actually businesses you will find a few times in a lifetime where any manager could raise return enormously just by raising prices—and yet they haven’t done it. They have huge untapped pricing power they’re not using. That's the ultimate no-brainer."
3/ Charlie Munger: "Disney found that it could raise prices a lot and the attendance stayed right up. A lot of the great record of Eisner and Wells came from just raising prices at Disneyland and Disneyworld and through video cassette sales of classic animated movies."
Read 7 tweets
31 Dec 20
1/ "I’ve been in the top 5% of my age cohort all my adult life in understanding the power of incentives and yet I’ve always underestimated that power.” Charlie Munger

Are incentives properly structured to create what he calls "incentive superpower"?

2/ "Federal Express had one hell of a time getting the [central package shifting system to work]. Finally somebody got the happy thought that maybe if they paid them by the shift, the system would work better. And lo and behold, that solution worked." jamesclear.com/great-speeches…
3/ What incentives would be created if people were given $50 vouchers for a Covid vaccine as some people have suggested?

"If the incentives are wrong, the behavior will be wrong. I guarantee it." Charlie Munger
Read 5 tweets

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