Crypto-Mania Is Back, and Retail REITs Are Too

PayPal Holdings (PYPL 0.64%) recently joined Square (SQ -1.57%) in allowing its users to buy, sell, and hold cryptocurrencies. But this could just be the starting point, as PayPal plans to allow users to pay with digital currencies at its 26 million merchant partners. In today's Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP discuss the latest developments. Then, Matt revisits his "Retail Isn't Dead" basket from earlier in 2020, and the pair take a look at a cryptocurrency-focused bank. You'll hear all this and more on this week's episode.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

This video was recorded on November 30, 2020.

Jason Moser: It's Monday, November 30th. I'm your host Jason Moser, and on this week's Financial show we're going to talk about some recent crypto-related news from some of our payments companies, including PayPal and Square. I'm going to check in on Matt's recent Retail is not Dead basket as we prepare to enter a new year with a vaccine on the horizon. We've got a listener question regarding a small cap bank, and we'll wrap it up with one to watch.

Joining me this week, he's back after taking last week off for some pretty good reasons too, I might add, Mr. Matt Frankel. Matt, good to see you, man, hope you had a nice Thanksgiving.

Matt Frankel: Oh, good to see you. I took some time off last week. It's easier for us to get away on weekdays, because, you know, little kid's in school, so, then whoever is watching them, just drop them off. So, sorry to miss you, but it was a nice much needed rest and now I'm back and ready to go.

Moser: Well, yeah, it sounded like, as I said, a very good reason, so very understandable. Glad that you and your wife were able to get away. And, hey, folks, listen, they celebrated an anniversary, so you know, you get a chance, throw them a little love, tell them happy anniversary. [laughs]

But Matt, let's talk first and foremost this week, PayPal and Square, a couple of companies we always enjoy talking about, members love them, listeners love them for a lot of obvious reasons. PayPal CEO Dan Schulman, Square CEO Jack Dorsey, they've been very clear about their belief that they see cryptocurrencies playing a role in the world to some degree. So, we've seen some news from both companies recently in regards to bitcoin and cryptocurrencies. Let's talk a little bit about the latest, what's the latest with what these companies are doing?

Frankel: Well, so Square isn't exactly new news. They recently bought $50 million of bitcoin for their own balance sheet as more of an investment on their own. But just before we get into PayPal's news just let me give you some context of how important bitcoin is that Square has jumped into it. In the third quarter alone, over $1.6 billion of bitcoin went through Square's network, meaning Cash App customers bought and sold that much. That is 11X as much as it was a year ago. Remember Square has been doing this for two years. So, that's a pretty big surge in popularity. That $1.6 million [$1.6 billion] (sic) made Square $32 million of gross profit, which isn't a great margin, but it's not bad. I mean, that's a needle-mover ...

Moser: ... well, and that's bitcoin trading back-and-forth, right? That's just individuals trading bitcoin back-and-forth, right?

Frankel: Correct. That's Cash App users, to be specific, buying-and-selling. One interesting thing I saw, a hedge fund called Pantera Capital estimates that since Square launched two years ago, they now account for 40% of bitcoin volume in the U.S.; 40% from Square. So, I know I'm much more of a Square fan than a PayPal fan, but being honest, PayPal is the bigger company. So, this is why I wanted to say this first, because PayPal's news [laughs] could be even more significant. On October 21st, I believe it was, PayPal announced that it was going to launch the ability for its users to buy, sell, and hold bitcoin, similar to what Square allows its Cash App users to do. But the real detail that's important is in the same press release they said that they have plans to make bitcoin and cryptocurrency usable as a payment method to PayPal's 26 million merchants. That could be huge for the currency. Right now, you can't go to just any merchant with a Square terminal and pay with bitcoin without doing some, like, an intermediate step, like getting a debit card or something like that. So, this could be a huge needle-mover for, one, mainstream adoption of cryptocurrency. I don't necessarily see it as a mainstream big revenue source for PayPal, but for cryptocurrency as an industry it could be a gamechanger.

Moser: Well, yeah, and to your point, we talk a lot about needle-movers and how companies may introduce some sort of functionality or capability, maybe it's not a big needle-mover, but ultimately what it does is it creates engagement, right, it keeps people within that universe using their products and services. And, I mean, I can certainly see where that would be maybe the point-of-focus in the near-term for companies, like, Square and PayPal, getting that functionality in there, to me, it feels like a very easy bet, doesn't feel like there's really any downside as long as you understand the space. But it also feels like there are challenges for crypto, at least in the near-term. And you mentioned it in regard to mainstream adoption.

Now, maybe that clears up, maybe as time passes, maybe that adoption as a medium of exchange, maybe that becomes a little bit more commonplace. I don't see a big reason today why I need to go to the store and pay for something with bitcoin. It doesn't seem like there's any real advantage. But given what we know today, given the small steps these companies are taking, it feels like maybe that mainstream adoption, right now doesn't even matter.

Frankel: Well, as far as mainstream adoption as a currency, there's two use cases, there's adoption as a currency and, kind of, as a store of value. So, as a currency, I see three main obstacles to really mainstream adoption of bitcoin. One, it's very volatile. You don't want to buy a type of currency that could be worse twice or half as much in a week. And if you don't think bitcoin could do that, look at some of the charts from the past few years, bitcoin can go up or down by a few thousand dollars in a week. So, that's another thing, the volatility scares people away.

No. 2, there are too many cryptocurrencies [laughs] and it's easy to make a new one. So, when I was checking just before we were on the show, there are over 4,100 active cryptocurrencies right now. I mean, most of them aren't big, but there are a lot of big ones. There's over 10 that have a $1 billion market cap or higher. There's a lot of cryptocurrencies out there, and it's pretty easy to, for institutions if they want to, to make their own. So, the idea of bitcoin at first was one central currency, but if there are 4,000 of them [laughs] floating around, it's not really that... it defeats the purpose.

And No. 3, as you mentioned, there are some really easy ways to pay with [laughs] U.S. dollars right now with a lot of these fintech innovations. I mean, I tap my wallet on a card reader at some places now and I could make a payment. I mean, U.S. dollars aren't that tough to use anymore. So, in my mind, for bitcoin to get mainstream acceptance, it needs to do something that you can't do with dollars, which I get that there's a lot of use cases for international money transfer and stuff like that, but between volatility and the fact that there's literally thousands of them. And the innovations in dollar-based fintech, I really can't make the mainstream use case myself.

But apparently a lot of people disagree, because there's $359 billion worth of bitcoin out there right now, and it's now over $19,000 a piece, so apparently some people agree and are buying it but.

Moser: Well, yeah. I mean, it could be argued, certainly, that there's a lot of speculation in that market. I'd be willing to bet that a lot of people that are speculating in that market, don't really understand exactly how it works. I mean, I can't sit there and say that I fully understand how it all works. My basic understanding is though, that there's a fixed amount of bitcoins. So, if you have something that is limited in supply, that obviously will make a difference. And something [laughs] like dollars, for example, as we've seen, not limited in supply, Matt, [laughs] they can kind of just print them off of the ...

Frankel: ... that's the big argument for bitcoin being a store of value, in that, it's essentially inflation proof in that sense. You know, U.S. dollars, the government could always print more of them, [laughs] which they do pretty regularly, and with bitcoin that's not the case, there's a finite amount. So, as a store of value it could make sense. But if that's the big use case, then who cares if you can use it at PayPal's merchants, if it's just a store of value. So, bitcoin really needs to, in my mind, decide which way it's going to go.

And like I said, I can't make a use case for owning bitcoin as a store of value over gold right now, and I can't make a case of using it as a payment over U.S. dollars, so ...

Moser: Yeah, fascinating, fascinating market, and we'll talk a little bit more about digital currency later on the show as we jump into the listener question, but first let's talk a little bit about something we've talked about a lot this year, and something specifically we've talked about in regard to an article that you've written, some companies that you've really been focused on here, we've been talking a lot about the retail space, particularly the physical retail space, bricks-and-mortar places where people have to actually go physically.

It didn't seem like 2020 was setting up to be all that good of a year for a lot of these retail concepts. Things have started to maybe turn a corner a little bit, we've got some interesting data here over the weekend in regard to Black Friday. Traffic at stores on Black Friday fell by 52.1% compared with last year. Now that is coupled with online spending on Black Friday surging 21.6% to reach a record high. And I think actually we're going to see today, you know, Cyber Monday I think is going to turn out to be the biggest digital sales day ever. We'll have to wait and see how those numbers actually shake out. But given everything that we know, we've seen at least some signs of life here in the retail space. And Retail isn't Dead, let's talk a little bit about the Retail isn't Dead basket and the specific companies that you've been talking about here this past year.

Frankel: Yeah. And the thing to mention first is that none of these are e-commerce. The whole point is that, one, in a post-pandemic world people are going to shop in stores again. There's going to be demand for going out. E-commerce even right now, even in the pandemic, makes up about 16% of all retail sales -- this according to the Census Bureau. So, most retail sales take place in-person still. That's going to be the case after the pandemic. The percentage of e-commerce will continue to tick up, but physical retail is not going anywhere despite what people may think. So, there's going to be room for quality retailers after this is over. So, I made this basket and we did a show about it, we called it the Retail isn't Dead basket. Jason has all these baskets, so I wanted one. [laughs]

So, these are five Real Estate Investment Trusts that all are somewhat involved in retail that I personally own all five of them. I feel like I can never chime in on Jason's War on Cash basket because I don't own all four. This is a basket that I'm putting my money where my mouth is.

Moser: You don't own PayPal, right, that's the only one of the four?

Frankel: I don't own Visa or MasterCard.

Moser: Oh! Matt, you're killing me. We got to change this ...

Frankel: ... see, there you go, down out of that conversation forever. [laughs]

Moser: [laughs] Now, I'm going to reel you further into the conversation so that you just feel compelled to buy them, but that's for another week, let's continue talking about REITs ...

Frankel: ... well, let me ask you, do you own any of my retail REITs?

Moser: I don't own any of them unfortunately, just it's not a space that I tend to look for a whole heck of a lot of exposure. Now with that said, I tell you, you make a very compelling argument. So, I want you to continue on please, because I know our listeners will love it.

Frankel: Okay. So, there's five companies in the basket, and I'll go through them and briefly give you, like, a one sentence description of what they do. You have Simon Property Group, ticker symbol is SPG. They are the largest mall REIT in the country. They own seven of the 10 most valuable malls in America. They're invested in the Class A malls, they're big-time malls; these are the high-end properties.

You have Tanger Factory Outlet, which is ticker symbol SKT. They are the only pureplay outlet shopping REIT in the market. The big open-air outlet shopping attractions. They're mainly in touristy areas. I know Jason is from South Carolina, there's one in Myrtle Beach that I know of, and Charleston has one, so.

Then No. 3 is the Realty Income Corporation, which I'd call that, kind of, the backbone of the basket. The ticker symbol is O. They do well in pretty much any type of economic environment. Even in the pandemic, most of their tenants are essential businesses, so they've held up really well.

Fourth is EPR Properties. They call themselves the experiential REIT. I know a lot of people will roll their eyes when I say this, but about almost half of their properties are movie theaters. They also own Topgolf, a big tenant of theirs. They have waterparks in their portfolio. They have ski resorts. Vail Resorts is a big tenant of theirs. So, they are experiential properties. Service businesses are a form of retail. You know, restaurants are a type of retail business. Anything that sells a service is usually a type of retail.

The fifth, last but not least, in my mind, is Seritage Growth Properties, which is a REIT that Warren Buffett wholeheartedly believes in. He's actually their biggest individual shareholder; him himself, not Berkshire Hathaway.

Moser: He knows a few things.

Frankel: And he knows a thing or two. This is a REIT that was created specifically to buy a portfolio of old Sears properties to renovate and turn them into things other than Sears, because you know, even Sears didn't want to own Sears, that's why they created Seritage. So, they are gradually developing this portfolio to premier retail centers. Because if you remember, when Sears were built, back in the day they were some of the most premier shopping destinations in town. They're in great locations for the most part. Rundown buildings, but in great locations. So, the theory is, that if you turn those into great retail assets then you'll have premier assets in premier locations, and it's a winning combination.

So, those are the five. Since I put out that article in June, a lot has happened, obviously. [laughs] When we first started the Retail isn't Dead basket, it looked like we were going to reopen with no problems in June, that's when that big second wave hit. So, the big second wave hit right after I put out this article, it made me look like an idiot.

Moser: [laughs] Just bad timing, that's all.

Frankel: [laughs] It was bad timing. But since then we've had the, you know, the vaccine news has come out as positive. People are starting to realize that these companies aren't going bankrupt, they're all in good financial positions now. Since that time, the S&P is up by 22%. So, put that in context, so the market has done pretty well, so that's been a driving force too.

Just running through some of these numbers. Simon is up by 44% since that time. On the heels of good vaccine news, they've modified their merger agreement with Taubman Centers, if you remember, at a cheaper price than they were originally going to get. So, they acquired one of their biggest competitors for a pandemic price; which is a good thing.

Tanger Outlets is up by 47%. They recently said that traffic through their properties, not necessarily sales at the retailers, but traffic through their properties is 99% of last year's levels. That's pretty impressive for a retail REIT right now. And the holiday shopping season is a great time for outlets, historically. And Tanger is in a good position, because their properties are outdoors for the most part. They're very conducive to social distancing, you know, it's not the crowded mall atmosphere, you can get your own space, you have ventilation, things like that, so people are more comfortable going, and the numbers are showing that. They also have a ton of cash-on-hand to not only make it through the tough times, but to pursue opportunities as they come up, which outlet shopping is still a pretty small industry, so they have some room to grow.

Realty Income, which is, if you're going to buy one of them, that would be the one I would say, just because, like I said, they own mostly essential businesses. Dollar stores are a big part of their portfolio, drugstores, like, CVS and Walgreens are big tenants of theirs. Convenience stores, warehouse clubs -- anyone who's been to a Costco lately knows that they're not hurting.

Moser: [laughs] Nope.

Frankel: In Columbia, anyway, that's the only place you can find toilet paper right now, by the way.

Moser: Oh, no! Are we getting back to the days of hoarding toilet paper?

Frankel: Oh, Mr. Moser hasn't been to a store lately. Yeah, they're all out.

Moser: [laughs] Well, I mean, tell you what, I started thinking about that maybe a couple of months ago. You know, I mentioned something to my wife and I said, I'm going to go ahead and order two big boxes from Amazon, because I just don't trust that people won't start freaking out again and just taking all that stuff off the shelves.

Frankel: See, that's why the stores are out, because it's all at Jason's house. [laughs]

Moser: Yeah, now I'm going to resell it; what is that war profiteering? [laughs]

Frankel: [laughs] So, Costco has done a great job of keeping items like that in stock, which is why they've been doing great. Realty Income is only up by 8% since I wrote that, just because they weren't beaten down that much in the first place.

Moser: Probably a little bit of a stronger competitive position, it sounds like, from the very get-go.

Frankel: Right. So, they were in a good position going into this. They do have some movie theaters, but not a ton. For the most part their properties are doing really well. EPR Properties, their properties are not doing well, but that stock is up 20% since I wrote that. They successfully modified their lease with AMC, their biggest tenant, in a mutually beneficial way. It gives AMC a much-needed break on rent and locks them into longer lease terms. So, the properties will stay occupied longer. So, you know, that's mutually beneficial for both.

Moser: I got a question for you on EPR real quick. Just a question for listeners too, I know EPR pays or paid a monthly dividend and they suspended that dividend for the time being, still paying the preferred dividend, I see. Now, when a REIT, in any position, when a REIT suspends their dividend, what does that do. Is there a timeframe in which they have to reinstitute that dividend in order to be able to keep that REIT status or is it something where if they maintain the preferred then they still maintain that REIT status?

Frankel: Well, the preferred dividends, they generally have to maintain or they accumulate and have to be paid in arrears at the end. With your common dividend, it depends on your profits, specifically, REITs have to pay out 90% of their taxable net income. So, if a REIT doesn't have taxable net income, which EPR doesn't right now -- surprisingly, EPR was profitable in the [laughs] third quarter. That came as a shock to me, and I follow the company pretty closely. But a company that's half movie theaters was profitable. But I think they made, like, $0.04/share. The dividends they paid out in, like, January and February will cover their obligation for the year.

But in 2021, let's say they have $1/share of taxable income for the year, they would have to pay out at least $0.90/share in dividends. So, it has to do with if they're profitable. There's no time limit if they're not profitable. Seritage, the next one I'm going to talk about, they stopped paying their dividend well before the pandemic and they're not a profitable REIT right now, because they're focused on development. So, they don't have to pay a dividend until they are profitable. So, an interesting arrangement.

So, EPR is up 20%, favorable arrangements with their movie theaters. I know when they first reopened a lot of their properties, they said Topgolf traffic was actually up year-over-year, because people just wanted to get the heck out of their house. When the lockdown ended, I should say, and things were allowed to reopen in early Summer, you know, people just wanted to get out. And those were the type of places they wanted to go. [laughs]

Moser: The driving range right down the street from our house here, it is constantly, constantly slammed. Two stories. It's owned by Fairfax County. But it is very, very busy at all times of the day.

Frankel: Right. I mean, their properties are getting affected now with the new surge of COVID cases, you know, some places are doing lockdowns again, things like that, but a lot of their properties are -- this is their slow time anyway, like, waterparks, no one is going to go to a waterpark right now. The ski resorts are doing fine, because they're conducive to socially distancing and things like that. You know, Topgolf, they are pretty much an outdoor golf attraction, they're not going to get that much business right now anyway.

So, as long as their movie theater clients or tenants are able to make it through the tough times, they'll be fine. And they have over $1 billion in cash, it's worth mentioning too, and they're not burning through much at all, like I said, they're profitable now. So, they're doing pretty well. I mean, that's, in my mind, one of the best bargains in real state at the moment.

And then finally, Seritage. Seritage has more than doubled off the lows. Like I said, up 65% since -- it was already up in June for the reopening. Seritage, the biggest question is, do they have money to make it through? Unlike all the other ones I mentioned, they do not have billions of dollars on their -- you know, big credit facilities or things like that. They rely on their rental income and income from some asset sales to fund their operations.

And in the start of the pandemic everyone thought, oh, no one is going to buy any retail properties anymore, so they won't be able to sell anything, their tenants aren't paying rent. But now, it turns out, that wasn't the case and they have a nice little buffer, so that's why they're nicely up. As long as they have the money to redevelop their properties, there's a ton of value creation potential. But like I said, they're the least liquid of any of the five REITs I mentioned.

But overall, you know, looking at the returns, three out of the five are over 40% up since I made the basket. I'm satisfied with that, it's not the War on Cash basket by any means yet, I'm not claiming the title.

Moser: [laughs] There is no title, there is no title, you know, we're just doing our thing, man. We're just doing our thing. Well, Matt, thanks for the update on that, I really do appreciate it, I know our listeners do too.

Moving on, we got a question from a listener recently, Matt. Ben on Twitter asks, "Hi, Jason, any chance for an Industry Focus episode on Silvergate Capital. It's a bank that has a platform for cryptocurrency called the Silvergate Exchange Network, the SEN, with a lot of institutional transactions. Thanks. You and Matt make financial discussion interesting."

And I will say, he also, he concluded that, "you and Matt make financial discussion interesting," with the laugh face, right, with the little tears of laughter. So, I mean, you know, maybe that's an LOL. Listen, it was a very, very thoughtful sentiment, and it sounds like we're at least doing our job well [laughs] enough, so let's keep on doing what we're doing, Matt. But, Ben, really thank you for the question.

It is not a company that -- I've never really dug into Silvergate before. I had heard of it. I mean, very small, small bank, of course, but not too small. I mean, it's just a small cap bank, but an interesting one nonetheless. And looking a little bit more into the Silvergate Exchange Network, particularly in this age of digital currency, it seems like this is a bank that might become a little bit more relevant as time goes on.

What do you think about Silvergate, Matt?

Frankel: So, like you said, they're not a very big bank. They're big enough that we're allowed to talk about them, [laughs] but I'm not much sure than that ...

Moser: Sure. Yeah, and around a $600 million market cap, right, something like that.

Frankel: Yeah. So, the Silvergate Exchange Network, which is the most interesting part of the business right now, I was reading that it's an intermediary that, kind of, facilitates the transfer of money from one cryptocurrency player to another. That sounded interesting enough, but then I started reading their list of customers, and Coinbase is one of their customers, Gemini is one of their customers. So, the use case is that normally if a customer buys bitcoin in U.S. dollars, because when you buy bitcoin you use money. The exchange would have to transfer that somewhere, then it takes a couple of days, then it would get transferred to another exchange to buy crypto or something like that.

So, what the Silvergate Exchange does is it facilitates this, kind of, a 24/7 real-time money transfers between cryptocurrency exchanges and major hedge funds and other digital currency players. You know, there's mining operations that are customers of the bank. So, it's an interesting case. They have over $2 billion of cryptocurrency deposits. So, most of their deposits are in cryptocurrency, not in U.S. dollars, which is an interesting case.

Moser: Yeah, and you square that up to Square's balance sheet with $50 million in bitcoin. I mean, that can give you at least some context there as to how big of a role crypto is playing for a company like this.

Frankel: You know, this wasn't always a crypto bank, on their website it says, they've been profitable for 21 years, so they've been around for at least that long. They pivoted to crypto -- I mean, their CEO has been there since 2008. They pivoted to crypto in 2013, which, good timing, they were, you know, first to the party it sounds like, that's why they were -- I mean, Coinbase, Gemini, those are some of the biggest players in the industry that are their customers that they use for their money transfers.

So, it's an interesting industry right now. It's worth mentioning that as a bank, there are two sides to the business, there are deposits and lending. So, pretty much the exchange network and the crypto deposits, that's the deposit side. On the lending side, [laughs] they're a mortgage lender. So, that's kind of interesting.

It looks like most of their assets are either mortgage-backed securities or what are called warehouse mortgage, meaning lines-of-credit to mortgage brokers. They are mortgage lenders, so their loan portfolio is actually pretty high quality. I saw that their nonperforming loan rate is 0.16% right now, which is really low if you look at some of the other banks right now. So, it's interesting. That's how they make their money, a combination of income from their lending portfolio, which is mostly mortgages of a commercial nature. So, commercial mortgages, and they make fee income from their cryptocurrency activity.

An interesting bank, this is not investing in Bank of America or even one of the smaller, more tech-focused banks like we've talked about on the show, this is kind of a -- you know, it's a play on the cryptocurrency industry. The more money that flows through cryptocurrency exchanges, the more they're going to make.

Moser: And I think you summed it up nicely there, I mean, if you look at the way the stock has performed here year-to-date, it was more or less tracking the market up toward October, but starting in October, shortly after they had released their quarterly results, the stock just went, as they like to say, parabolic, Matt, [laughs] just went straight up. And year-to-date the stock has returned about 125% versus the market's close to 12% or something, so clearly Silvergate is having a very good year.

And I can understand, at least, when you're looking through the transcript from the most recent quarter. Customers completed over $36 billion in Silvergate Exchange Network transfers during the third quarter alone. Now, that exceeded $32 billion that was done all throughout 2019 together. So, clearly, that Silvergate Exchange Network is gaining a lot of traction, and maybe that's the enthusiasm there. I mean, I can certainly understand it, based on your description of how the company makes its money.

You know, I will reiterate, this is a small bank, I mean, $600 million market cap roundabout. Also worth noting that it has a very low float. I mean, there's a low number of shares outstanding, just under 19 million, it looks like. Half of that essentially is the float on the open market. So, my point is, anytime you see a small cap bank like that with a low float, you're typically going to see some hefty bid and ask spreads, right, and you're going to see some pretty volatile movement from time-to-time.

It's all to say, if it's a bank that you're interested in, this is the kind of bank where I think a limit order probably makes a lot more sense if you're interested in owning it.

Frankel: Yeah, for sure. I mean, I would tiptoe into this one if you were interested in it. I prefer owning actual bitcoin as an investment, just because, like that mortgage side of the business should provide nice, steady income. And then the fee income side of the business is the growth avenue. So, you know, it's like a nice combination of steady, predictable recurring revenue and growth potential.

But like I said, I like it better than investing in actual cryptocurrency, but like I said, this is not Bank of America or JPMorgan Chase, so I'd be tiptoeing cautiously.

Moser: Makes sense. Well, Ben, thanks for the question, we appreciate it. Matt, before we wrap things up this week, let's give our listeners one to watch. What's a stock that you'll be watching this coming week?

Frankel: I am watching Slack Technologies. I just slacked with Jason before this broadcast. Slack is -- it's not that certainly confirmed yet, but it's essentially reported that they are going to be bought out by Salesforce. The latest rumblings is that it's going to be about half cash, half stock. I'm curious to see the exact terms. The unnamed source that spoke this morning said that it would be higher than the current price, which I'm wondering, if that means now or before the merger rumblings, because I'm a Slack shareholder, so.

And then once the actual terms are announced, you have to decide whether you want to be a Salesforce shareholder or if you want to head for the exits. So, it's going to be an interesting dynamic. I think an acquisition by Salesforce would do wonders for Slack as a platform and make it a much more valuable platform, it'll help it compete with Microsoft a lot more on that workplace collaboration front.

So, that's what I'm watching this week. What do you have your eye on?

Moser: Yeah. I'm going to be keeping my eye on LivePerson, ticker LPSN. And LivePerson is something, you may remember, the technology enables consumers and businesses to connect through mobile messaging and it ultimately helps integrate chat and messaging functions into a seamless experience. So, whether you're using Facebook or Amazon or WhatsApp or whatever it may be, they're really helping consumers and businesses connect in a more seamless fashion from start to finish.

But we're going to have, actually next week, Matt, I know you know this, we'll be having the Founder and CEO of LivePerson, Rob Locascio back on the show next Monday, and he's going to talk about an interesting new relationship that LivePerson has formed with BELLA. This is a new digital banking start-up which actually launches today, and LivePerson has partnered with BELLA to use its technology to connect with consumers. And so, if you look at the general idea of what BELLA is based on. And bringing LivePerson's technology into the fold there, I think it's going to be a really fun conversation to have. Looking forward to speaking with Rob next week, and that'll be the interview for next Monday's show. And so, definitely looking forward to having Rob back on, talking more about what they're doing at LivePerson, what he sees the future as with BELLA and in the future of banking, in general.

That'll be my one to watch for the coming week.

But Matt, I think that's going to do it for us this week. Listen, man, I'm glad that you're able take last week off, get a little time out with your wife and relax, but hey, I'm really glad to have you back too. Thanks for spending the time with us this week.

Frankel: Of course, I guess I will see you in two weeks.

Moser: Yes, you will. And remember, folks, you can always reach out to us on Twitter @MFIndustryFocus or drop us an email at [email protected].

As always, people on the program may have interest 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.

Thanks, as always, to Tim Sparks for putting the show together for us. For Matt Frankel, I'm Jason Moser, thanks for listening and we'll see you next week.