Ross Gerber, Gerber Kawasaki Wealth & Investment Management CEO, joins Yahoo Finance Live to break down Coinbase’s first earnings report as a public company, assess what’s next for crypto and discuss the future of automaker Tesla.
Video Transcript
ZACK GUZMAN: Coinbase reporting earnings during what has possibly been, if not ever, the most interesting week for crypto this year, at least-- the very least-- in 2021, after Elon Musk opened Pandora's box by highlighting Bitcoin's sustainability concerns and pulling a 180 on Tesla, accepting the crypto for transactions that obviously didn't impact Coinbase's first quarter results, which are mostly pre-reported, as it moved forward with its direct listing earlier in the year. But yesterday made the numbers official, the largest exchange here.
Final numbers came in mostly in line with expectations. But this week's volatility prompted a reminder even for Coinbase that its business is inherently volatile. And on the earnings call, CEO Brian Armstrong also said that it will be listing Dogecoin in six to eight weeks. And Elon Musk also tweeted he's in touch with Dogecoin devs to work on efficiencies when it comes to that blockchain. A very interesting time for Coinbase to be reporting, but here for more on that, I want to welcome back into the show Ross Gerber, Gerber Kawasaki Wealth Investment Management CEO with us again.
And Ross, I know you've gotten pretty active in the crypto space. Obviously, you rode for Tesla. Years-- for years, you rode that wave higher. But does it feel like you got your two kids turning on each other, when you're looking at Elon taking on Bitcoin here? Talk to me about your take here, as it looks like the kids are fighting.
ROSS GERBER: Well, I think Elon is wading into an area that's maybe not the best set of statements to make. Because the fact of the matter is Bitcoin is the future of digital currencies. It's the root of it. And I think there's a reason to address the energy use. And it's certainly to Tesla's benefit for Bitcoin miners to use solar power, for example. But many Bitcoin miners already are using renewable energy. From the beginning, they knew that this was going to be a big expense for them. So they've been very smart in building their networks around areas with very low costs and mostly renewable energy.
So I think, you know, this whole Dogecoin thing is a big distraction for Tesla and Elon. And I don't really get it, other than it's a byproduct of Tesla's success. Elon starts doing stuff to piss people off. And that's what he does. But, you know, I ignore all that noise. I'm an investor. And if you want to play that game, you can. But, you know, whatever.
AKIKO FUJITA: Ross, what do you think that announcement really was about, when we're talking about Tesla saying they're no longer going to accept Bitcoin? I mean, I'm not sure anybody really believes that this is a sudden revelation about the climate impact. Is there a larger issue, you think, behind the scenes about maybe there wasn't as widespread adoption as he had anticipated or the volatility that's attached to Bitcoin? I mean, what do you think this was really about?
ROSS GERBER: Well, I think the truth is nobody's using Bitcoin to buy anything because it keeps going up. I mean, you don't use a Bitcoin to buy something because it keeps going up. So, like, you would use $1 to buy a car. That's a depreciating asset in theory. So, you know, I think it's just marketing to say that you take Bitcoin. I don't think people are buying stuff with Bitcoin. Obviously, if I bought a lot of Dogecoin at, like, a half a cent, and now it's at $0.50, I would probably buy a Tesla immediately with Dogecoin.
So, you know, there's no value in Dogecoin. So if you can get value out of it today, I think that that's a great thing. But, you know, I think it's a very dangerous area for Elon to get in when he's causing people losses, like he did the other day. And it turns people against him and, ultimately, Tesla. And I think that's what kind of hit Tesla's stock a little bit the other day.
But that being said, cryptocurrencies are here to stay. He is an innovator. He created PayPal. He was one of the creators. And so this is an area he actually does have an expertise in. And I personally wish he would focus on making EVs because that's-- you know, I'm still waiting for my Tesla Model S Plat. And that's all that I care about, to be honest.
ZACK GUZMAN: You know, interestingly, as we've been talking on the show, there are more boost months now, the extended family here in my own lineage dipping a toe into Teslas here with some purchases. So, intriguing. But Ross, when we dig into the Dogecoin thing, I think that that one-- I called [AUDIO OUT] adding it to the platform. That one, it seems like, really, Elon Musk on Twitter is positioning Tesla to be accepting that. I don't know if that's what's going to come from this. But it seems like that way-- as you point out, kind of a depreciating asset.
When we look at some of the other earnings updates we got, though, of course, I have to ask you about Disney since you won our Stock Madness environment with the pitch on Disney. We got the update there and earnings mostly coming in line, but investors focusing on the miss when it comes to Disney Plus subscriber numbers, 104 million versus the 109 million expected. Talk to me about the thesis around Disney now as it kind of pulls back today and what you made of the earnings.
ROSS GERBER: Well, it's a buying opportunity for long-term investors. I mean, anybody who's focused on Disney Plus, instead of what's actually happening to Disney, the company, is missing the whole boat. I mean, Disney Plus is at 100 million plus subscribers. This is way ahead of anybody's expectation because of the pandemic. And now we're getting the benefit of the parks opening. And masks are now being-- mask requirements are being removed. We've already seen this in Vegas. Mask requirements are already removed. I think we're going to see this in the theme parks.
There's no reason-- I was at a live event this week. There's no reason that these places can't be 50% full or greater. It's perfectly safe. California is being overly protective of our success, which I'm all for, but it's time to accept that we've been successful with it and open up Disneyland fully. So Disney is about to embark on a very, very profitable future over the next several years. For a long-term investor, this is a great opportunity for a stock like Disney.
AKIKO FUJITA: Does the base case for Disney shift now that you've got the parks back in play? If you think about how far Disney has gone over the last year, it's all been trading on the streaming side. How do you think investors should be thinking about the stock now?
ROSS GERBER: Well, you've got, let's say, 150 million subscribers. And if you look at Netflix, they've got 200 million. So if you just do a 10 times multiple of their revenue, it's 16 billion on the streaming, annualized. So you've got $160 billion valuation in Disney Plus, based off what I consider reasonable metrics.
And then you've got this wonderful business that's been shut down called theaters, cruises, hotels, you know, the plays, the theme parks. These are cash cows for Disney. And they've been completely shut. Now imagine what's going to happen over the next two years, as all this reopens and, really, by summer 2022, all of this hitting full stride. So if you're, once again, a long-term investor and you see a pullback like this in Disney, it's a great opportunity to buy. Because they're going to have the streaming business on the other end, which is, obviously, going to slow now. And but they're going to have all these other really cash flow positive businesses coming online now.
ZACK GUZMAN: All right, Ross Gerber--
ROSS GERBER: And earnings were above expectations, on top of that.
ZACK GUZMAN: No, that's a fair point. Earnings were the standout there in that report, top line less so. But Ross Gerber, Gerber Kawasaki Wealth Investment Management CEO, always love having you back on. Be well, and have a great weekend.