Now. Did you participate? Are you picking out long and a short for this game? Hundred percent. What are they? Well, I'm not the shorts people are allowed to keep confidential, and I'm going to keep mine confidential. But I'm going to pick Palatine, which is the stock that I pitched yesterday at the Robin Meade Conference. Now, talk a little more about that, because from what I understand, you came dressed in full gear to make this pitch to the audience there. What is it about Peloton that you like right now? I understand that you said that it's undervalued, but what's the catalyst? Is it M&A or something else that you're looking at? Well, I think there's a lot to like with Peloton. They have a large customer base that pays $44 a month and is extremely engaged, rides an average of 13 times a month and has very, very low attrition.

So most subscription-type models like this trade at really high valuations. Peloton has suffered over the last number of years because they thought they were going to be a much bigger company than they've turned out to be. Maturity has hit them a little bit sooner than they expected, and they had a cost base which was entirely based on, Hey, the only thing that matters to us is revenues, because Wall Street values us on price to sales and stuff like that. And so, as I said at the conference yesterday, there's a lot of cost-cutting for Peloton to do. Peloton probably needs to spend more time on the peloton, and if they do that, the margins will improve a lot, and the stock is relatively inexpensive relative to other types of subscription model-type companies. Besides, they're going to get a new CEO who should be announced, you know, sometime relatively soon. And in the worst case, if they're not

really able to turn around. This is certainly the type of company that there's a number of larger companies, I think, that would be very interested in owning this epic if it came down to there. David, I also want you to weigh in over here. It's interesting as we speak right now. Tesla had come out with earnings over the last 24 hours. The stock is up more than 19% at the moment. It's been a stock that you have been short before. Wondering what you think about the stock at this valuation here and whether you would ever go short again. Yeah, we don't really comment on our short positions anymore. We stopped doing that a few years ago. And so whether Tesla is a short or a potential short, it's not something that I'm going to discuss. Can you speak to the valuation as it stands now and how it fits into the broader story around stock market valuations right now?

No, I'm really not going to go anywhere near that. So let's talk about valuations more generally, because, of course, the A.I. trade in general has been a very hot one. I'm wondering if you think that if some of these stocks have gone too far and how you're playing the air trade. Well, you know, the thing is, is we don't have to, you know, bet against things that seem like they're expensive when there's so much excitement around them. So these stocks are very high. There's a lot of enthusiasm. There's been enthusiasm for a long time. I think the market as a whole is really quite expensive, considering we're in a strong part of the economic cycle and we're about 23 times earnings. So it's hard to one up for me as a somebody who actually pays a lot of attention to what I pay for, things to want to taste those things. We do have a couple of companies that,

you know, maybe have options on a I coming our direction. So, for example, we own HP, which makes PCs, and PCs are due for a regular replacement cycle because a lot were bought after COVID in 2020-2021. We could have a better-than-normal cycle if HP sees turn out to be a thing, but it only takes about ten times earnings, pays a three-and-something percent dividend, or spending 100% of the free cash flow returning it to shareholders. So, you get about 7% buyback. So, we can see, you know, mid-teens high-teens growth for the next couple of years just as you book your cycle share count reduction. And so, this, you're paying just ten times earnings, which is, you know, very reasonable from our perspective.

Einhorn Says There Is a Lot to Like About Peloton

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