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i have about a million questions and and we've we've now gone through the the pros i want to go through some of the cons um and and some of the the big issues with this company let's just call a spade a spade right now this is a money losing company it does not make money today correct it's still losing money on a per unit basis on an operating margin basis uh it is almost at breakeven and profitability by 2023 we will have overall profitability okay so we still have to wait four years though uh or three years rather for profitability um big issue in terms of being able to compete with the big guys i'm talking about humana united health um the the the metric that investors look at in terms of success is mlr medical loss ratio what is the medical loss ratio for clover versus the degree great question great question out of the box they're already meaningfully better and what's great is their gross margins start better because they're a technology business and we think it's going to get better and better over time and the reason why is because they create transparency they don't play games they don't motivate doctors to up code or do all kinds of things in order to get paid they've created an extremely transparent and efficient business so their gross margins out of the box are better and we think they're going to continue to only get better relative to the companies like united and humana okay and then we have to talk about the issue we always talk about which is fees and i know we went back and forth on this uh a couple weeks ago uh with your last back and uh jay clayton the head of the sec has spoken out and said that he wants to bring much more transparency to fees given that you want to democratize the ipo process and allow more retail investors and others to get in let's just walk through it i want you to walk through in a very granular way how much money you as the sponsor and are getting what percentage of the company you're getting as a result of this so uh in the case of ipoc i think we invested 16 million dollars to get it off the ground now that the deal has come together we've invested another 160 odd million dollars uh in a pipe the total investment by myself and my partners is about 171 million dollars um the post money valuation of this business um is sort of five odd billion dollars and so we'll own um about five or six percent of the business you'll own five or six percent of the business that's it now from my perspective i think that that's a wonderful good good no i just think i think there's nothing there's no warrants there's no warrants or other preferreds that would that would get you to a higher percentage of the company again this is all on a fully loaded basis so i want to make sure that you're not confusing fees with investment fees i don't make any right and just to remember how a spac works a spac is not dissimilar to many other investment products so for example if you take a private equity fund or a venture fund or a hedge fund we all operate very similarly there is a principle we raise money from investors we allocate that capital typically funds take a two percent fee every year we do not and all organizations typically take 20 percent of profits if it work incrementally what we do is we reinvest more money from our own so that we are aligned with the company the employees and all shareholders so just to give you an example andrew across all three spac so far ipo a ipob and ipoc we've invested more than 450 million dollars of our own money typically we are 15 of every single dollar invested and the reason we think it's important to be this meaningfully at risk is that i think it creates better diligence it does create better disclosures in fact when you look at the s4s that we file when we merge with businesses they have enormous amounts of detail and it creates uh the right alignment there is no way that i can win unless the stock goes up right for example in virgin for the first few months you know when the stock went down to 725 i look like an idiot now when the stock is 18 obviously you're 20 everybody can say wow great deal same thing with open door there is risk in all of these things but the reality is that i'm putting my own money and what i'm trying to do is put my people we're going to promote and say you're getting no pro but what you just suggested was that you're getting no promote no that's not what i'm suggesting what i'm suggesting is that you have 16 million dollars initially plus 160 million dollars on the back total total total i've just told you what we own so you're saying now that's going up to about 250 million dollars right now automatically yeah for example in open door the position that we have invested so we put i think 12 million dollars initially up front another 155 million dollars i think that was 169 million we invested total um that's a two point x on our invested capital so what i'm trying to tell you andrew is like this is not some get rich quick scheme at least for me there is there are different space where you can take a very different form of compensation you can put a very little amount of money you don't have to invest on the back end and you can have much higher multiples of return i've chosen to take a different path and hopefully over time what people see is there are high quality businesses a high quality sponsor and we're trying to do a thoughtful job so that when employees and shareholders win we can win as well and we think that that's reasonable shepard smith here thanks for watching cnbc on youtube
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