In this episode of Market Foolery, Chris Hill chats with Motley Fool analyst Bill Barker about the latest news from Wall Street. They discuss the cash infusion from the U.S. government for potential vaccine development and a new acquisition in the entertainment space. Finally, they take a stroll down memory lane for an important investing anniversary.

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This video was recorded on July 7, 2020.

Chris Hill: It's Tuesday, July 7. Welcome to Market Foolery. I'm Chris Hill. With me: the one and only Bill Barker. Good to see you.

Bill Barker: Good to be here.

Hill: We have another acquisition in the entertainment industry. We have a very important investing anniversary that is coming up and we're going to talk about that, but we're going to start with, well, essentially, COVID-19 stocks, and in particular, Novavax (NASDAQ:NVAX) and Regeneron (NASDAQ:REGN). Shares of Regeneron up about 3.4%, because Regeneron has got a $450 million grant from Uncle Sam to make and supply a double antibody cocktail that's being tested against COVID-19. And that's a nice bump for shares of Regeneron. That pales in comparison to Novavax, because those shares are up about 30%, because Uncle Sam gave Novavax -- which is a biotech firm I had never heard of until today -- $1.6 billion to develop a potential vaccine for COVID-19. This is the environment that we're in right now, where these types of things happen, maybe not a daily basis, but certainly on a weekly basis.

Barker: Well, in your defense as to never having heard of Novavax before, one of the reasons might be that it's never had a drug approved or sold on the market. And this was a company that had a stock for $3 or $4 at the end of last year, going for $100 and change today. So 25X this year, pretty good for a company that does now have a $1.6 billion pile of cash, or supposedly does. I think the announcement included the information that Novavax isn't quite sure what department this money is coming from, you know.

So there's real work being done; I don't want to diminish at all what could be an excellent opportunity to confront COVID, but for a company that has really next to no sales, and this is still more on the long shot with a high return if everything works out well then, you know, the kind of thing that you would want to bet heavily on if it were your only bet.

Hill: And we talk all the time about the importance of diversification, and it seems like, if you're looking to invest into a vaccine for COVID-19, you absolutely don't want to bet on one horse, [laughs] you actually want to buy shares of several businesses that you think have a shot at this. Because presumably, there's going to be a pot of gold at the end of this vaccine rainbow.

Barker: Well, the pot of gold is an interesting concept, because of course, if you talk to what people want and what they think, it is probably that companies are hopefully working very hard on this, and that then it should be made readily available for free to everybody. I mean, somebody has to pick up the bill, whether it's individuals, whether it's their healthcare plans, whether it's the government, whether it's a combination of all of that. And so the pile of gold that seems obvious for whoever provides the best solution here becomes more complicated.

But you've got Regeneron as well today. This is a more established company, a several-billion-dollar-a-year revenue company, and sort of, consistent increases in its business, and it's not a one-shot wonder. They're working on a treatment and preventive cocktail of drugs, which hopefully will continue to show effective results, as I believe they have so far in trial. They're not on the vaccine side. Both, of course, are very important, and both are celebrated today by the market.

Hill: Well, and for context on Regeneron, only up about 3% today. But up somewhere in the neighborhood of 75% year to date. So if you're a Regeneron shareholder, you're doing fine.

Barker: Yeah, well, today's news is not coming out of nowhere. They've had published results of the trials they've done. And so yes, it's had a number of days where good news has gone out into the market. Novavax already was up. As I said, it was a $3 or $4 stock at the end of last year and was going into today at $70-whatever a share. So there was already, obviously, their work on the vaccine was known.

This support, which is $1.6 billion, for a company of this size is extremely meaningful. Perhaps their proximity, their offices being here in the Washington, DC, area gave them some advantages in negotiating this deal. They're also in Sweden, so it's not all Rockville, Gaithersburg, U.S. offices, but I think location, location, location may have worked at least not to their disadvantage.

Hill: SiriusXM (NASDAQ:LSXM.B) (NASDAQ:LSXM.K) is nearing a deal to buy Stitcher, which is the podcast division currently owned by E.W. Scripps. SiriusXM is going to pay a reported $300 million to E.W. Scripps for Stitcher. And Stitcher has networks with shows like Freakonomics Radio, Conan O'Brien Needs a Friend; they also own the Midroll ad network, which works with hundreds of shows, some of them among the most popular podcasts out there: WTF with Marc Maron, My Favorite Murder. This continues another trend that we've seen in 2020, which is large entertainment companies making pretty sizable investments in the podcasting space.

Barker: And Sirius continues to, sort of, try to be everywhere where people might be listening to other music or voice audio. So I think, you know, this is an area where I feel very comfortable asking you all the questions about what you think about this deal, since this is right in your wheelhouse.

Hill: I think it's a good deal for both parties. I'm a little surprised that E.W. Scripps shares aren't higher, because, boy! Did they turn a tidy profit. I think they spent a combined $34 million to buy Stitcher and Midroll. And now they're turning around and selling it for $300 million. And maybe it's a sign of what people think about the state of the newspaper business, which is arguably the larger part of E.W. Scripps, but I think it's a smart investment by SiriusXM. I mean, they're getting access to some of the most popular shows, and certainly some of the most well-established networks out there. So in the same way that some people looked at Spotify's acquisition of The Ringer as, among other things, a talent grab, I think when you look at some of the networks that are underneath the Stitcher umbrella, I think it's a similar type of move by SiriusXM. You know, if they have someone really smart who's running this acquisition, then some really, really good fruit could be borne out of all of this, above and beyond some of the shows I already mentioned.

Barker: Well, and you can explain perhaps, you know... so Stitcher is a platform, they've got some of their own content, but also, just a platform. Like, many people might be listening to this as a podcast, people are watching it right now, Motley Fool Live, but as a podcast -- but, you know, Stitcher does not own The Motley Fool podcast.

Hill: No. Our podcasts are on their platform, just like we're on Apple Podcast or Google Play [Alphabet] or Spotify or any of the other platforms that are out there.

Barker: I guess, they've got a good number, a growing number for ad sales there. And you know, what do you see happening next in this space? Who's next for sale after everything we've seen already this year?

Hill: It's going to be interesting to see if any other large shows -- I mean, to me, it'll be interesting to see if any other really popular shows, sort of, follow the move that Joe Rogan did. Joe Rogan owns his own show, but he's going to have this exclusivity deal with Spotify. So I'm sure people have approached Marc Maron and Conan O'Brien about similar types of deals, and maybe they're just, like, "No, I'm good where I am." But it will be interesting to see the extent to -- in the same way that we see with streaming video, where Amazon Prime, Netflix, Hulu, Disney+, they're making this grab for exclusive content. And at The Motley Fool, we're platform agnostic, we're happy being everywhere; we're not looking to lock up exclusivity. But I think that that'll be one more thing to watch. Because I think that in terms of major platforms, I don't know that there are any other, sort of, $300 million, $400 million deals out there unless it's for exclusive content.

Barker: So for those that are interested in the advantages and disadvantages for exclusivity, Joe Rogan is, sort of, in almost a category of one, not quite a category of one, with his show. But you know, you're at conferences, or you used to be at conferences, maybe now you still...

Hill: ...back when conferences were a thing that people went to.

Barker: [laughs] Back in the late teens, back when we had these conferences. And this would have been, you know, the various business models that are out there, and how would you say that it's an easy decision for you, for The Motley Fool, to be platform agnostic. But for others, what are they balancing between the ads, between having to condition some of the content of the podcast so that they don't lose advertisers, who is it they can get direct pay? And the platform, what are the pros and cons for Joe Average, good, but not top-five out there, podcast.

Hill: I think, for the overwhelming majority of people who do podcasts, they're just looking to grow their audience and they are also platform agnostic, because they don't really have the audience and sort of the leverage to create those types of exclusive deals. Because you're right, I mean, Joe Rogan is basically in a category of one. Now, there is a price at which any podcaster would say, "Oh, OK, yeah, I will give up my multiplatform approach for that amount of money just to be on that one platform." But there has to be something in it for the platform too. Like, Spotify, presumably, wouldn't have done that deal with Rogan unless they felt good about the return they were going to get. SiriusXM probably feels pretty good about the amount of money they just spent or are about to spend to get Stitcher, and the ad network and the associated shows.

Barker: Well, they're known for throwing some big figures around, I can't remember what the Howard Stern deal was, or the re-up on that was, but they know the value of having content that you can't get anywhere else.

Hill: Thank you for mentioning Howard Stern, because that's probably the next domino to fall in, sort of, the audio entertainment space, because I believe his contract is up at the end of 2020. And to this point, SiriusXM has said all the right things in terms of "We would love to continue working with Howard Stern" and all that sort of thing. We'll see where that goes. So yeah, that's probably the next big shoe with millions of dollars [laughs] attached to it that's about to drop.

Regulation Fair Disclosure: Not something that is particularly sexy in terms of a topic, but I think for -- I know, for everyone listening to this podcast, for everyone watching us on Fool Live, for every investor out there, Regulation Fair Disclosure has made their lives better. And the reason I mention this is because our good friend and longtime colleague, Uncle Joe Magyer down in Australia tweeted last week a little something about, it was July 2, and it was, sort of, the anniversary of a Wall Street Journal article from July 2, 2001, with Arthur Levitt, Chairman of the SEC at the time, where Arthur Levitt was giving a huge amount of credit -- and rightly so in my opinion -- to The Motley Fool for the passage of Regulation Fair Disclosure. You had a role in helping make that happen. It actually -- the anniversary comes up next month, I believe it's August 15, we're going to celebrate a little early, because you know what, we had a hand in this and we get to celebrate a little early. But as I said, every investor benefits from Regulation Fair Disclosure.

Let me see if I can set this up for folks listening and who are we wondering if they should keep listening, because what I've said so far probably sounds pretty boring. Right up until, well, the late 1990s, companies could disclose information material to their business to a very small number of investors. That was just the way Wall Street operated. And by the way, that's how it operated forever, that a company could have material news, they could say, "Hey, our earnings are coming out in three weeks, but we're going to do a conference call with analysts from the eight biggest firms on Wall Street and tip them off that we're about to put in a really big quarter, it's going to beat expectations, they can tip off their clients." That was how business was done on Wall Street until Reg FD was proposed. And as the name suggests, Fair Disclosure was simply a rule that said, "You know what, all investors are the same, we're going to treat all investors the same in terms of information from public companies."

So mom-and-pop individual investors like you and me, and everyone listening and everyone watching on Fool Live, they get information the same time that Goldman Sachs gets the information, that's how it's going to be. And maybe we shouldn't be surprised, but I know that anytime I talk to a younger person at our company and talk about Reg FD, they're surprised when I explain to them that there was significant pushback. There were smart, established people with good reputations in the financial world who were saying, "Whoa! whoa! whoa! Are you kidding? Everyone's going to get the information. No, that's a bad idea. That's a bad idea." When did Reg FD first come into your field of vision as an employee of The Motley Fool in 1999?

Barker: Well, I think the proposal was sometime in early mid-December, and there was a couple -- maybe there was a 30-day, maybe there was a 60-day proposed comment period. And I, having a legal background, saw that and thought I would write about it. And we were just in the right time and the right place for this. We had established a relationship with our audience of individual investors. It was December 1999, the market was doing gangbusters, and everybody was happy with us, with anybody who was talking stocks, because everybody was making money. But it was still the case that Wall Street owned the communications channel with companies. And so this rule, which was Arthur Levitt, then head of the SEC, put a lot of work into, and put out for comments and I saw that, and wrote an article.

And, you know, looking back on it, the title of the article was "SEC Levels Playing Field." This is a boring title, there were no companies mentioned in the article, this was not, as sometimes you need to do in the job of internet writing, have a sexy title or have tickers of companies, and that gets distributed through various channels. It had no mention of a company, it had the most boring title in the world, but it was in a place in The Motley Fool editorial which was prominent, was a column called "Fool on the Hill," it came out once a day, and it was sort of the --

Hill: Yeah, I was going to say, back when The Motley Fool -- unlike today, when there are hundreds of articles being published on Fool.com -- this is late 1999, when, I believe, somewhere in the neighborhood of three to five articles will be published [laughs] on the site.

Barker: Thereabouts. There was high single digits to low double digits, maybe it's 11. We had a bunch of portfolios that had daily updates, a couple of news articles, but it was -- the various articles were, sort of, appointment viewing in a way that it's hard to do now, to get people to come to your site on purpose and then go to a specific thing that you want to talk to them about. And I wrote it. It turned out, my oldest daughter was almost born the night that I was on deadline for this. And long, boring story, but she wasn't, and so I ended up having the time to write the article that I was obliged to write. Had she been born that night, I might well not have gotten my article in, and somebody else would have taken that slot and written about something else, and we might not have had the role we ended up having.

There were about three articles and maybe an interview with Arthur Levitt, who noticed what we were doing and wanted to support it. Total of 6,000 comments, which was, at the time, unheard of for a government agency to receive 6,000 comments about a rule. You know, nowadays, 6,000 comments is the response to a mediocre tweet. But at the time, it was a volume and it was a surge of individual attention to something that had never been seen before.

Hill: Yeah. And to go back to the tweet from Joe Magyer, where he cites Levitt's comments, two-thirds of our comments came from Fools. Without them Reg FD would not have happened, because again, there were smart, established people saying, "No, this is a bad idea." And Levitt, I would argue, needed, sort of, to be able to point to an unprecedented amount of comments on an SEC website, because usually, you know, when they opened up for public comments, back then it was, you know, people within the industry, sort of, commenting on behalf of their company or their shareholders, that sort of thing. In terms of sheer volume, they had never seen anything like what they had seen with Reg FD.

Jim Cramer, at the time, was against this; publicly so. He has since said publicly on numerous occasions, when the topic has come up, "I was wrong. I was arguing that Reg FD should not be passed, and when I look back on that, I realize I was wrong." But at the time, he was against it. And when it came down to a vote, it was 3 to 2. I mean, it was not a slam dunk, but it did pass.

I want to get to at least one other thing before we wrap up, which is something you reminded me of this morning. I'm sure you told me before, and I just forgot, like most things you tell me. But you ended up going to a meeting after it had passed. So Reg FD passes, it gets finalized -- you can go to the SEC website see August 15, 2000, the rule is passed. It's going to be implemented in late October of 2000, but you ended up going to a meeting. What was the meeting?

Barker: Well, it was a closed meeting. SEC hosted, I guess, mostly industry people, but we were invited to send somebody, and I got to be the person to go and to sort of work through the next steps now that the vote had been taken and the rule had been approved, what happens next. And there was the head, I guess, of the SIA, the Securities Industry Association, now part of SIFMA, who, I thought this was brave, it certainly gave me a few laughs.

But he, sort of, took the position to open up the meeting that, OK, we had this vote, whatever, but really what we now need to do is to have -- and he used the term -- a blue chip panel, blue chip commission, look at the issues and help comment on what a better rule would be, and just pretend this hasn't happened. But out of the goodness of our hearts, we will now consider taking a first step down this, sort of, road. And the representative from the SEC just -- it was one of those things where I think he just, kind of, blinked and said, "No, the vote has been taken, this is a done deal, there's -- no. Let's get back to the agenda."

And, you know, that individual had a job to do and a role to play and all that. Before the meeting started, he was going around handing out cards, handed out one to me. I handed him my Motley Fool card, and, wow! Was that a cold moment, because, you know, we were the bad guys to him, to him and his industry of analysts that had a great, great setup. I mean, they got market-moving information. There's no question that, you know, there's market-moving information that is distributed by companies at conference calls and in private meetings other than conference calls, and Wall Street got as much of that as they could. It was a great, great setup for them. And I don't blame them for trying to keep it, but you know, I don't celebrate them for trying to keep it either.

Hill: No, no, no, they had a great run. I understand [laughs] why they fought to keep the cushy setup that they had, but that's wonderful that you handed him our business card.

Barker: They've got mouths to feed over there, they've got mortgages to pay, they've got second and third mortgages to pay. How are they going to pay that third mortgage without this kind of [laughs] access to information that nobody else has?

Hill: And, again, just put a bow on this. I know this is a business news show, but I did feel like this little bit of financial history that, again, benefits all investors, less so, the well-heeled ones on Wall Street, but more so, everyday investors like us and those listening and watching --

Barker: I know we've gone over time, I just got to say that the only way to find the original article is to go back to the Wayback Machine on Archive.org. I tried to look for Cramer's response, but that was not available on the Wayback Machine. But in reference to a tweet I made yesterday that we would be talking about Rocky and Bullwinkle, that's what the reference is. The Wayback Machine a critical part of Rocky and Bullwinkle, I feel.

Hill: Oh, absolutely! Yeah, I mean, you learned history when they got in the Wayback Machine, didn't you?

Barker: Oh, yeah! Well, they made a full-length movie, and someday they'll do a live-action version of Sherman & Peabody, no doubt.

Hill: The Wayback Machine; someone needs to come out with something else and call it the Wayback Machine, because that's a pretty good brand.

Bill Barker, thanks for this walk down memory lane; always good talking to you.

Barker: Thank you.

Hill: As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.

That's going to do it for this edition of Market Foolery. The show is mixed by Dan Boyd. I'm Chris Hill. Thanks for listening, and we'll see you tomorrow.