The Deal Room: Blackstone Takes The Hit On Bumble - Why PE Is Taking A Loss On Its Listed Portfolio

Hello and welcome to a brand new show for the Market Maker Podcast, and it's called The Deal Room. And if you're watching this recording on YouTube in a video format, you'll see Piers has magically morphed into a slightly younger, slightly more handsome individual, and I'm joined nonetheless by Stephen. So perhaps, Stephen, before we, um, begin and explain a little bit more about the topics we're going to talk about, in this particular episode. Why don't you just give us a little bit about yourself, your role at Amplify, your background, and then why, why are we doing The Deal Room?

Yeah, sure. Thank you so much, Anthony. That's very kind. I'm glad that you think I'm better looking than Peter. That's fantastic. Yeah. So, you know, my background, I went to, I went to university and I didn't study finance or economics. I did a social science and I came out of it, as many people do, thinking, gosh, what, what do I do with my career? What do I do next? And I joined a bank. In fact, I joined a bank in the M&A advisory team, mergers and acquisitions, helping one company buy another company or get sold to another company. And quite frankly, I did that for a number of years before going on to start my own company and recently last summer joining Amplify. But quite frankly, when I joined the bank, spent all of my time in spreadsheets and in pitch decks and working long hours and working really, really hard. But I never really got the time to zone out and to zoom out and to actually think, what does this all mean? So I have pretty long cell formulas, but relatively short context and strategy and the why. So I think The Deal Room, this podcast that we're introducing today, is really aligned with my deficiencies when I joined the bank. And it's so much fun to start thinking, all right, this is what I do on the desk if you were to join as an intern or if you were to join as a graduate, and this is the context in the wider scheme. So we're going to do quite a lot of stuff in this podcast that overlaps with the Friday podcast that you'll be familiar with, but we're really going to zoom in on transactions, on initial public offerings, on strategy, more focused on companies than on markets. And this is something that we are doing across AmplifyMe as well. We're bringing this financial education across markets, across sales and trading, but also now into what we call the corporate finance space, which of course is a very attractive area for a lot of graduates. So I'm delighted to be chatting to you, Anthony Cheung, and I think we're gonna have a lot of fun.

Yeah, yeah, look, I'm excited because it's definitely, um, an area where I just said to you offline, a lot of these topics I have a relative superficial understanding of, and a lot of it is I see like the stock price reactions to a lot of M&A announcements and breaking news and rumors and hearsay, but actually getting into the deals themselves and the strategy and the why, it's going to be really interesting for sure. So yeah, if you're, if you're new to the channel, or certainly if you've been a subscriber for a while, remember to hit the bell icon to be notified. So Steven's episodes will be going out on a Wednesday, and then Piers and I, absolutely as per normal, wrapping up the week in global markets on a Friday as well. And I know, Steven, you've got a couple of industry speakers in the pipeline as well that hopefully we can get on to the Wednesday show as well.

Well, you know, I'm relatively competitive, so if we can get more listener numbers on Wednesday than Friday, yeah, I'll be pretty happy.

Okay, cool. Well, look, just a quick summary of the 3 topics we're going to cover, and then we'll dive into the first one. So we're going to look at an FT article actually we saw the other day, which was that private equity groups are increasingly selling shares in portfolio companies at a discount to the price in which they went public. And I think the current macro environment, of course, is very key, and we can talk about valuations on the back of that. So that's the first one we'll jump into. But then we'll also look at Microsoft's purchase of Activision. Will they or won't that happen? The EU saying yes, the UK saying no, and what's the next steps and why? And then one of the biggest deals of the week, I know you put a poll out actually, in fact, on the AmplifyMe LinkedIn account, and it was asking about the Chevron acquisition of PDC Energy. It's a $6.3 billion deal, so pretty chunky. Um, and essentially they're going long on oil and gas irrespective of a lot of the critics, obviously, on the ESG side of things. And I know that's definitely fits very nicely into your, your startup background as well in that ESG space. So perhaps kick us off then, tell us a little bit more about this PE situation and, and why they're looking to, to get out and not max out their investment in the, the current climate.

Yeah, this is, this is a really good one, and it, and, and we're going to give you a little bit of context and we're going to talk about two companies. Um, the first is Blackstone which is a major US-based private equity firm. Private equity firm is, you know, as many of you know, they have funds, investment funds, where the plan is to buy the company, hold it, improve it, and then sell it for more, uh, at the end of it and make a return on their investments. Now, Blackstone back in 2019 bought a majority stake in a company that many of you might have heard of called Bumble. Bumble is a dating app. It was very, uh, well hyped back in 2019. In fact, it got a valuation of about $3 billion off not much revenue, like in 2019 when Blackstone made a majority investment. And now what these private equity firms, uh, are intending to do is hold the company and then seek an exit event. They want to return the capital to their shareholders. They want to recycle the capital that they put in and hopefully receive a return on their investment. And one of the ways that they can get an exit event is by taking a private company public. And this is what happened in February 2021. And 2021, as you know, Ant, was a boom year for IPOs, more than double any other year in history. Everyone was IPOing, you know, everything was being IPOed. So February 2021, Blackstone arranged the IPO of Bumble, the initial public offering, listing it on the New York Stock Exchange, and it absolutely flew. So the share price that the bankers decided was $43 per share, valuing the company at about $8 billion. On the first day of trading, that share price was up at about $80. So think about that, think about that day one pop. You know, we remember 2021, you know, that was, that was us sitting under lockdown getting excited about making money off the stock markets. And a lot of people did on day one, right? So Blackstone likely— well, Blackstone had a lockup period, so they couldn't take advantage of that day one pop because they needed to hold their majority stake for at least 180 days after the initial public offer.

Is that quite common? 180 is like a common duration?

Yeah, 90 or 180. Some, some IPOs don't have that lockup period. Um, Coinbase did a direct listing, which was quite controversial, where the significant holders could sell directly to the public. And that's come under quite a lot of criticism recently. But anyway, so Blackstone, you know, on paper they're making a great deal of money. Remember their initial investment was at $3 billion, it IPO'd at $8 billion, share price rose and it was trading at $14 billion as a market capitalization. Brilliant, right? Everyone's happy on paper. And in fact, 6 months after, They did sell down quite a lot of their stake and started to return that capital. Cycle on 2 years and Blackstone still own upwards of 50% of Bumble, right? You know, but the Bumble share price has gone from, you know, $76 at the end of day 1 to about $20. And it's actually now trading at $16 a share. Think about that. So that's a massive, you know, and we know the story, right? 2021, boom years, lots of money. 2022, market came off. 2023, you know, tech, you know, loss-making, once exciting companies, their share prices are really, really rock bottom. But the problem for a company like Blackstone, for a private equity fund like Blackstone, is they need to recycle their capital. These investors are not what we would call evergreen investors. They don't hold this, you know, this company forever. Their fund cycles are 5 to 7 years. So BlackRock, who made that investment in 2019, looked like— Blackstone, sorry— looked like it was going to be a blockbuster. You know, it's made a little bit of money, but now in 2023, they're like, all right, we've got to sell down, we've got to get some of our money back, and we've got to return it to our fund investors, or we've got to use it again on another investment. And this is really, really interesting because, you know, March 2023, when Blackstone sold this additional stake in Bumble— so, you know, only it made, you know, $300 million of a 10% stake valuing the company at $3 billion, exactly what it valued it at in 2019. So these guys are now starting to have to take haircuts or big losses, at least not gains, on their, you know, on their sell-downs post-IPO. And this is a trend that's happening not just with Blackstone. Blackstone and Bumble is a great example. This is a trend that's happening across private equity. We call these follow-ons. So selling your shares post-IPO in order to receive your return on investment. 2022, barely any follow-ons happened because the market was so depressed. 2023, you know, private equity investors are kind of figuring, all right, we have to sell. The share prices might not be where we want them to be, returns are going to be lower, but we need to recycle that capital. In order to be able to return funds to shareholders. So it's a very interesting dynamic that takes an industry like private equity and frames it against the public markets and what's going on and what you, you know, what you talk about on a Friday morning as well. So it's a fascinating story.

I was just kind of thinking about the atmosphere if I was the owner of Bumble, and it was like day one, a couple months in, everyone's patting you on the back. It's like, go on, do your thing. And then I can imagine how volatile those relationships must be, because in the pursuit of profit, which is quite focused and concentrated at a PE firm, I mean, that must be a double-edged sword— the access to capital, but then the consequence of when this situation might unfold.

Yeah, it's a really interesting one. And just a little bit of a background on the, on the founder of Bumble. So Whitney Wolfe Herd, on IPO, she was the wealthiest self-made female founder in the country, in the US, because her 12% stake was worth well over $1 billion just like that. But we had a lockup period as well. You know, she was suddenly feeling very, very wealthy. She had a lockup period as well. And in this recent discounted share sale, this follow-on that happened in March, which Blackstone took a bit of a haircut on, she also sold some shares. And oh yeah, you know, we're not, you know, she's not going to be, you know, struggling financially, but that sudden, you know, you're only a billionaire on paper when your company IPOs. And because that share price has come off from $76 down to $16 today, suddenly, you know, she's a lot, you know, she's maybe not in the headlines quite so much as being this amazing, you know, female founder. Yeah.

And then interesting on the market side that I remember when I used to work on an equity desk, we used to track the filings of when the CEO, the CFO, or any board member starts selling down shares. Alarm bells would go off, and that day they'd get hit because they'd be, even though, like you say, sensible perhaps to realize some of that wealth, but it's got to be done in such an engineered way as to manage it now stock price.

Yeah, and you, and this has been a real, a really common tale in the kind of 2021 tech IPO bubble, you know. So I mentioned Coinbase and the direct listing. That is basically the early investors of Coinbase, you know, getting out at the top of a frothy market on IPO and selling to, you know, retail investors that are a bit hyped about Coinbase because they know what it is. You know, Peloton did a very, very similar thing. And, you know, there's a lot of criticism for the CEO, you know, cashing out basically, um, on the expectation that the tech bubble can't last forever. As an individual, maybe it makes sense. But as a, as a story, you know, you know, sitting on the other side of the desk, it doesn't look great when the founder starts to basically exit the company that they're running. Lack of faith, lack of confidence.

I wonder if there's some sort of data study where you could go back and look over economic kind of macro cycles and then look at deal kind of, uh, from a PE perspective, the exit timings that they have when they try to do that. So what I mean is, if you're an investor, for example, and you're trying to time different things, any flags that you could look for to determine when, you know, movement is going to happen in terms of the ownership of the company?

And yeah, like you said, that's a really, really good— it's a really good thing to think about. And it also comes back to the kind of fundamental logic of private equity, you know, the way that the way that you're going to make money, the way that you look at, the way that private equity firms look at companies that they might want to acquire, you've got, you can increase your bottom line, your profit by maximizing your revenue, a kind of growth story, or by controlling and cutting costs, which has been the kind of heartland of private equity for so many years. Private equity hasn't historically been chasing after growth stories. you might have heard the phrase growth investor, you know, that they're not chasing after these kind of fast-growing tech names, they're chasing after relatively boring, quite badly run, often industrial companies which they think that they can turn around and exit at a premium. So this move from the likes of Blackstone into cyclical, frothy names that might well align with what you were just saying is quite new. Uh, and there's a suggestion that it doesn't necessarily fit with the business model, the traditional private equity, which just likes to kind of nail cost, find synergies, boost your top line, boost your bottom line, lever up.

Yeah, money's too good to turn, turn away on the growth story in 2021. You remember, everyone was just going, going—

well, that's it. And, you know, another fundamental part of private equity is this concept of leverage. You know, you borrow, you know, you, you buy a company with debt, um, in order for your equity check to be lower, um, and then upon exit you can receive a bigger, you know, a bigger multiple of your money. But with these growth stories, I was just looking at the Bumble Financials, you know, they're still losing $120 million a year. No bank is going to lend against that. So the check that Blackstone wrote would have been a 100% equity check back in 2019. So they're not using the secret source of leverage that has been the heartland of the business model of private equity. So it does, you know, and yeah, as you said, we're all kind of chasing the money, and even private equity was chasing the money and chasing the growth stories in 2019, 2018, 2020.

Just on the careers aspect of this, So part of that transition, then listing to be a public company involving then an investment bank on the advisory side for the IPO. What— having you worked in that environment, obviously going— it's been almost accelerated because of COVID but going from like absolutely boom time to then interest rates rising at the steepest incline almost in the history of US markets. And the consequence that's had on dealmaking, the environment, like, and then the big job cuts that we've seen in investment banking divisions. What does it actually feel like working as a relative junior member, like an analyst or associate, when you're in that good time and then shifting within like an 18-month window almost to the other time?

So yeah, it's a really good question. And I think that you are insulated from the downside when you're young. So I remember the first job I got, my team was fired within 6 months and I saw the directors of that team walk out with their stuff as you would do, you know, kind of Lehman Brothers style because that team wasn't making enough money and it was post-2008 crisis, you know, cost controls, etc. I just got funneled to a different— I'm an 80— I got funneled to a different desk and I kind of thought nothing of it. But if you are, if you're a rainmaker, if you're a, you know, a director or a managing director, you're quite an expensive employee that's used to a decent bonus. When things start to tail off, like we saw in 2008, 2009, and 2021, 2022, then you are going to be, you're going to be worried, A, for your job, and B, the ability to get another job, because you're not cheap. Uh, and it's likely that other firms are going to be cutting back as well. So this is actually why, you know, and you talk about it a lot on, on, on the other podcast, this is why the likes of, you know, the major banks kind of prefer more stable revenue streams, the wealth management, the asset management, the retail banking, etc., because this stuff is super volatile. Um, and when there's volatility, there are job cuts.

Okay, well, let's move, let's move on and talk. I know we've got two other areas to touch on. So Microsoft's $69 billion purchase of Activision, it's been in the headlines quite a lot, and I know it's something that you're engaging a group of students that we had just last week about asking them for some of the deal rationale around it. But yeah, explain to me what's, what's the latest going on there.

Yeah, so this is, this is a fascinating story. So back in January 2020, it feels like a long time ago. Back in January 2020, Microsoft announced blockbuster acquisition of Activision Blizzard, famous for Call of Duty, not that I would know, for $69 billion, which is, you know, a very punchy valuation on a premium asset that wasn't, you know, that's not generating a great deal of profit, but it was seen as kind of a relatively logical move for a company that wanted to focus more on high-margin gaming, online gaming activities. And obviously there's complementarity there, you know, Microsoft has Xbox, they have the Xbox Game Pass, you know, you know, slip in the Activision suite of games and you've got a pretty nice potential revenue synergy on your hands. So the market was kind of, you know, feeling pretty good about it. Microsoft share price wobbled around and Activision shot up because it was a nice premium. Fast forward a year and the deal hasn't completed. So one thing to note is when a deal is announced, that's not when the deal is completed. So, so there's often years between announcement and completion. We're still right in the thick of it at the moment. And it all centers— I'm really fascinated by this story— because it all centers on 3 female regulators. Sarah Cardell, the head of the UK Competition and Markets Authority. Linda Kahn, head of the US FTC, Federal Trade Commission. And Margrethe— probably pronouncing it wrong— Vestager, the EU Competition Commissioner. And these 3 incredibly powerful people are in charge of making sure that markets operate in a way that is beneficial to the end consumer. So they are all about restricting monopoly power, all about making sure that there is significant competition to avoid pricing power and price gouging and all of these kind of things. And the story goes that in the last 10 to 15 years, these organizations have been pretty limp and they've let a few things go through that maybe they should have taken a closer look at. And now Microsoft and Activision, this deal has become the kind of the central focal point of this tightening or increased focus or increased scrutiny on the regulatory environment relating to these types of mega deals. So the first blow came out a few weeks ago from Sarah Cardell, the UK CMA, blocking the deal. Okay, it's quite a big thing. $69 billion deal. You know, Microsoft, one of the biggest companies in the world, blocked the deal based on the threat of monopoly power within online cloud computing into the— in the future. So not at the moment. It's not as if by buying Activision Microsoft suddenly have an 80% market share in a particular market. It's what happens in the future if there's this incredibly well-capitalized, well-funded mega company like Microsoft getting involved in a relatively nascent industry. So they blocked it based on forward-looking concerns, right?

The lawyers would have a field day trying to, uh, disprove that forecasting, surely.

Yeah. And, and, you know, Microsoft were incredibly upset with it, with this. They called it highly speculative. Um, and then my favorite one was Bobby Kotick. He's the, uh, he's the CEO of Activision who obviously wants this deal to go through. He said that, you know, the UK thinks it's going to be the new Silicon Valley, but it's actually Death Valley. You know, this is the least competitive thing that could possibly have happened. And then he said, we will reassess our growth plans for the UK. Despite all its rhetoric, the UK is clearly closed for business. Pretty hard words. He's pretty upset. But then fast forward a couple of months. And the EU Competition Commissioner, who's usually pretty hard on this kind of stuff, passed the deal, said, 'Give it the green light.' This is really, really interesting about turn, you know, kind of flying in the face of the UK CMA.

Yeah, I thought post-Brexit that's supposed to be the opposite, the opposite way around.

You're absolutely right. And it actually showed, you know, I mean, the UK CMA is an important body because there's a lot of business that goes on, you know, in the UK. But the EU is where it's really at in Europe. So the fact that the EU commissioner said, all right, we're going to greenlight it. And the reason why they greenlighted it was because of a 10-year commitment by Microsoft and Activision that they will sell their titles to rival consoles, rival online cloud computing companies. Sarah Cardell at the UK CMA didn't like it, didn't think that that was good enough. But the EU Competition Commissioner said, okay, that's fine, we're going to greenlight it. So far, 39 countries have greenlighted it, including China. The UK is the only company that hasn't. It is likely that Linda Khan at the FTC is going to try and block it. She's taking a really kind of severe stance. And I think is probably reeling, she's only been commissioner for 18 months, but from past mistakes relating to Facebook acquiring Instagram and then WhatsApp and the FTC not really doing enough. So they're being very, very harsh on tech companies. That's not to say, by the way, that if the FTC rejects this acquisition, their rejection can still be blocked and the acquisition can still go through. As you said, there's a lot of legal battles that can be done. It can be overturned, um, from a legislative perspective in the US government. So it's not like the FTC has got ultimate power, but they certainly have a pretty, you know, significant stick that they can wield.

So maybe I've been watching too much Succession, but could I come in as, as a Microsoft person, blow up the deal, is there a set period of time? So presumably the Activision share price has come down from its initial announcement highs for the reasons that the deal's in jeopardy to some degree. So is there a time limit where I'm kind of committed, but then I'm no longer committed, the deal is off, but then I could resubmit a bid at a lower price?

Yeah, it's a really interesting one. So there are certainly kind of exclusivity periods and tie-up periods subject to regulatory clearance, and that would be a, you know, maybe a 24-month window, regulatory clearance would seek with a potential extension due to different circumstances. One way that you could potentially pull out and start again is if there is a material change in the circumstances of the target business. So if the target business suddenly says, all right, by the way, our numbers are phony, you know, we've had a bit of an accounting issue over here, you know, those are the types of things that may get Microsoft to reassess their position, come back to the table with a lower deal. You know, it's super messy. You wouldn't want to do it. And you'd hope that Microsoft would have done all of its due diligence. You're absolutely right. You know, As things drag on, you know, if this goes on any longer, you know, Microsoft have got a pretty stable company with a pretty stable strategy and they still want this asset, but things change and strategy changes and markets change. So yeah, totally.

And strategy changes. And you said this last week to me, generative AI buzz is so piping hot right now and that business is just booming and people are, it's kind of like It was— it's AI now, it was the metaverse, it was crypto. It's like we go through these like bubble cycles, it feels like. So could they redeploy $70 billion into something where they could absolutely get multiple times more?

Yeah, it's a chunky number. And what, what, what I find so fascinating about these types of transactions is most, as a rule, if both companies are listed on the stock market the big company that acquires a small company, once they announced the acquisition, big company share price drops and the small company share prices— price rise. Sure, the small company's share price rises because the acquirer is paying a premium, and therefore if the deal goes through, they get premium to the share price that they've got at the moment. So Activision share price when the EU cleared the deal, Activision share price shot up by almost 10%. Microsoft went down by a couple of percent. Not big moves. That might be because, look, you know, what do investors want? Investors want return on their investment, return on their capital. They want to see dividends, they want to see share buybacks, they want to see cash cow businesses that they're going to churn through, that are going create loads of cash flow, and they're also going to want the hype, and the hype is AI. So you're, you're absolutely right, I don't see this deal going away, but it's interesting strategically.

I love the way that, um, Microsoft is so big that they can announce— I think it was $70 billion, was it, in their repurchase, um, plan in the last quarterly earnings. So they're, they're doing $70 billion to of share repurchases whilst still pursuing a $70 billion acquisition whilst parking, what, $10-odd billion in OpenAI.

Yeah, these are, these are, these are mind-blowing numbers. And just, you know, the big, the big tech companies are just unbelievable in terms of the amount of cash that they, they generate and the growth rates. And obviously that's something that you tend to talk about on Friday. Yeah.

All right, well, let's, let's take on to the final one, which is a bit different, I guess, because we've kind of talked PE, we talked tech, um, talk good old-fashioned resource names, which being Chevron to acquire PDC Energy in a $6.3 billion deal. So perhaps a little bit about the deal rationale first, um, why Chevron would be pursuing something of that nature, and then, and then a little bit about the ESG critics and how they play into this, this story.

Yeah, so, so just as I was Taking a look at this transaction, I just jumped into Chevron's financials. And he's— I don't know if the last time you looked at an oil and gas major company's financials, it is staggering. So I'm just going to give you a few stats here which might kind of lead you to the deal rationale. So in 2022, they generated $35 billion of net income, 6th most profitable company in the US. That's up from $15 billion the year before, basically due to oil prices, right? Oil and gas prices. So from that $35 billion, they declared $11 billion of dividends, $11.3 billion of share repurchases, and their cash on their balance sheet grew from $5 billion to $18 billion, all in one year. If that's not a bumper year, I don't know what is. You know, usually revenue growth, and revenue growth was over 50%. So, you know, these are, you know, type revenue growth numbers. We all know why it's happened, but suddenly Chevron sitting on a pile of cash and it is thinking to itself, all right, what do I do with it? You know, I've got my dividend plan which I've announced to the market. I've got my share repurchase plan which I've announced to the market. What else can I do? So this acquisition in part is fueled by desire to utilize cash in, in a different way. Now Chevron, just in terms of the deal rationale beyond the cash, Chevron has been, and US oil majors in general, have been slightly taken to task by the US government and by Biden to basically continue to invest in US shale gas and oil production. You know, there were dips in 2022, slightly concerning drop-off in investments in 2022, and, you know, the US wants to be and is energy self-sufficient. So Chevron, as a— not as a direct result, but Chevron has been looking for assets in the US for a long time, and quite frankly, buying PDC, acquiring it at a 14% premium. It's a super complementary business. It increases their reserves, it increases their barrels of production a day in a market, the US, that they really, really want to stay and grow in. And in fact, they've been selling assets from different countries, so slightly more risky, slightly more geopolitically sensitive countries, and they're funneling this money back into the US, which kind of makes sense. Although I caveat that by saying again, Chevron share price on the announcement of the transaction went down, PBC's went up. So it's really interesting. It's not like this is a bumper deal where the market are just thinking, gosh, Chevron, here we go, we love it, stock prices are going to go up. But sensible deal. It feels like a good use of cash. But it's not going to blow anyone away.

I love the, um, the crossover here with politics because you mentioned Biden there, and I remember when Biden was campaigning, a lot of it was about this green policy agenda, um, and then, you know, coming on the back of Trump where it was like shale boom, US superpower, we're back in business. And then so the obvious, um, stance to take that as opposition at Biden at that time is like, talk about green, Then here we are now, like you said, you've a lack of investment because of the macro conditions. That's then become concerning because there's a lot of employment as well as the, the idea about self-sufficiency and production and the loss of power given the size of Russian oil and Saudi oil. And here we are making it favorable as possible to make the US great again.

Yeah, energy and barrels of oil still control. Yeah, so much geopolitically from a market's perspective and from a company perspective, we, we still can't get beyond that. And from a— if I was an investor into Chevron, I'd be investing based on cash flow and based on, you know, a regular dividend stream, because you've got this, you know, you've got this product that, you know, is going to run out at some point, is going to be transitions. And therefore, as an investor, I want to see more that, more cash flow. Actually, investments, you know, so it bought a company last year called the Renewable Energy Group, £3.1 billion. It's interesting how markets react to that because, you know, this seems like a, you know, an aligned transaction to green agendas and to ESG, environment, social governance ratings and things like that. But often these uses of capital are seen as quite speculative, you know, often loss-making in the first instance, and a kind of punt on the unknown future when investors in these types of companies like dividend streams. So it's a really interesting dynamic, you know, what percentage of Chevron's cash budget should it be aligning to renewable energy product, uh, projects which kind of will be the future, but they're not the today. And what percentage should be, all right, I want to, I want to get more shale oil out of the ground in the Permian Basin.

Just final question, putting you a little bit on the spot, but I know that ESG is your area. Is there any of the super majors, so your Exxon Chevron type, but including Europeans, so let's throw TotalEnergies and Shell Is there any of those from an ESG perspective that is the front runner at the moment from that would fit within that category better? They're better positioned at this point in time.

It's a really good, it's a really good question. I haven't looked at the latest ESG ratings. It's always been considered that Shell has been a kind of a leader in terms of investments and strategic thoughts from an oil major perspective. As you might have guessed, the US companies are laggards. Exxon and Chevron do not invest nearly as much as the other, as BP and Shell. The other way of thinking about it is which one is the biggest greenwasher, you know. So the relationship between what they talk about and what they do, you know, BP's been very famous for talking an extremely good game but doing next to nothing. So, you know, you would almost rather be a a Chevron where you're like, we know what we do, we know it's digging oil out of the ground, we know it's declaring dividends. We, you know, we might put a nice advert out every so often, but we know what we're all about relative to, uh, you know, to a BP that, you know, that pulls itself beyond petroleum but still generates 90-plus percent of its revenue from oil and gas. So it's a really interesting area.

Yeah. Cool. Well, look, let, let's wrap it up there for this first kind of Deal Room episode. But look, hopefully everyone found that, um, super insightful. Certainly I did. And there's going to be lots more of these conversations. We'll try and pick 3 topics around the corporate finance space. But where I share this podcast is a few different places, uh, one of which is on the AmplifyMe LinkedIn page. If you just drop a comment on there Definitely, if there's any questions on anything that Stephen and I talk about, or if there's anything you want to hear more about, and you can definitely incorporate some of the career elements into this as well as talking about the deals in themselves, for sure, uh, just drop a comment. Absolutely more than happy to bring the community in as much as possible. We're not yet quite at the, uh, O2 level where we can do live podcasts with an audience just yet. Well, we'll shoot for that. For next year. But yeah, thanks very much, Stephen. Thanks everyone for listening and see you next week.

Thanks, Anthony Cheung.