Episode 87: Live Ep! REA v Domain, are Private Markets the new Public Markets, Biggest Clothing Companies and Live Audience Questions
The guys head to Sydney for their sold out live show and discuss the Domain sale and impact on REA, private share markets, the world's largest clothing businesses and the guys answer live questions.
The Contrarians catchup
Adam and Adir recorded episode 87 in front of a live audience at SmartCompany’s Growth Summit in Sydney last week, with Adam showing off his freshly-broken leg, which Adir said was “very melodramatic”.
Adir was scoping out the retail environment at Bondi Junction in Sydney (where there “may or may not be a Luxury Escapes store coming soon”) and was delighted to see Australian direct-to-consumer brands thriving with their own storefronts.
The latest Adam quiz: ‘Largest clothing companies by market cap’. The top 10: LVMH, Hermes, Inditex, TJX Companies, Dior, Fast Retailing, Nike, Cintas, Ross Stores, Adidas.
Are Private Markets the new Public Markets?
The Fin Review reported on the revolution of the “private-public” sharemarket, which allows investors to buy and sell some of the world’s hottest unlisted private companies on US-based trading platforms, for a little under $8000 a trade.
From the AFR: “All you need to do is go to Yahoo Finance and ask for pricing information on a big enough unlisted company, and voila, you will see a share price graph showing trades, a price per share and a valuation – provided by sites such as Forge Global, Notice and EquityZen. But the sites are not regulated sharemarkets like the ASX or the Nasdaq; they are trading sites that operate in the secondary market of shares in unlisted companies. Forge Global’s tagline? “Unicorn liquidity has arrived.””
Adir: “What's interesting about this is that there's this situation where you're a private company, where you have a shareholders agreement where you can stop people transacting shares. And I think the biggest impediment to this is really a discussion about that part of being a private company. Is it good to prevent people from trading shares openly and will that be the impediment to this?”
REA v Domain
Domain’s board, including Nine CEO Matt Stanton, have backed a $2.8B sale to CoStar, a US provider of information, analytics, and marketing services to the commercial property industry.
The real estate sales platform confirmed its directors would support the bid if there were no other offers and an independent expert said it was in the best interest of investors.
Adam and Adir compare REA and Domain to determine which is a better business.
Adir: “I would characterise realestate.com.au as a good company with a great business. They’re growing 20-25% a year and anyone who has sold a house in the last year will know a lot of that growth is from yield improvements - i.e. charging more money for listings, which get passed on to the seller.”
Adam: “The beauty of this business is that the REA agent places the ad and the poor vendor pays for it. It’s the ultimate model - you’re dealing with a person who’s not paying.”
Adir: “They bought the distant number two in Australia but good luck to them and hopefully they succeed. But my God, they would have to succeed for this price. Someone quite close to this world said to me, this feels like the ultimate private equity funded business that turns American pension money into payments to global advertising business.”
Adam: “You know I like to compare stuff to nightclubs. Nightclubs are really cool. And they get like all the great looking people go there and then eventually they're not cool anymore. I just think REA’s continued growth is based on this insane hot property price and eventually that has to pop.”
Listener questions
What do you do for your kids around technology? It's sort of the zeitgeist of parenting - what do you do about these bloody phones?
Adir: “I felt like I don't really mind my kids actually having time on iPads and phones, etc. I mean, a three year old having outsourced parenting to an iPad is not good. But I was actually quite relaxed depending on what they were looking at. But I did say to them that I don't want them on social media. I think YouTube long-form was the exception for me.”
Adam: “We've said no smartphones till year seven, which is 13. They have a Nokia 3110 or whatever it is, but I'm highly anti-social media. Especially after watching Adolescence.”
How are you using AI to grow your companies?
Adir: “We’re not overcommitting to it yet, especially for front-facing client stuff. But internally, there's lots of opportunity for workflow improvement. I'm proud to say nobody's been fired in any of my businesses through AI based workflow improvements. It's essentially taken junk grunt work of human beings so they can do more productive work with their time.”
Adam: “The area where I use it the most is in customer service, and we have a very high-touch customer service team, 24/7, 365 days a year. But there's a bunch of stuff that is fairly low-level customer service, stuff that people actually often prefer not to speak to somebody but they can't find it themselves.”
You seem to use the words ‘brand’ and ‘company’ interchangeably. Do you think they’re different, and if yes, how?
Adir: “I don't think companies and brands are the same at all, and the way we use them interchangeably is probably just colloquial. When we talked about REA, I said it's a good company, but a great business. And maybe we would say a tremendous brand in Australia.”
To what extent has the perception of tattoos in professional settings evolved in recent years? And where do potential stigmas still persist?
Adir: “If somebody was customer facing in a professional services role and their entire face and neck was tattooed, it might be problematic because I would be worried about the judgments made on the other side of the table. But in general, I think if you're going to employ people that are under 30, they're probably going to have tattoos and piercings.”
Adam: “For non customer facing roles, I think it actually can be a can be a benefit. You can get a better employee than you otherwise might be able to get because other people don't hire them because of prejudice.”
You've mentioned how DTC businesses are going offline, but the stores seem empty. What's your take on the future of DTC businesses, investment, scaling, etc.?
Adir: “My experience with it is they have the same traffic, if not more than most other retail businesses. So I probably disagree with that contention.”
Adam: “Our retail store has been a far better performer than anyone expected internally. I was probably the most bullish going into retail and it's probably doubled my expectations in terms of profitability and brand recognition and all that kind of stuff.”
Which social media platform do you think contributes best to society or has the most potential for good?
Adir: “I could do my list of what do I think the worst platforms are. TikTok is the worst, in my view, because of the Chinese having everything to do with it. I don't know where the data is going. I don't know what's being done to the algorithms behind the scenes.”
Adam: “LinkedIn. You put your whole work history on there. Anonymity is the absolute worst.”
Five other stories worth following:
‘A Minecraft Movie’, starring Jack Black and Jason Momoa, crafted $157M at the domestic box office in its opening weekend after analysts predicted an $80M haul. That’s the best debut ever for a video game adaptation and any movie released in 2025.
President Trump’s “reciprocal” tariffs will go into effect on virtually every region of the world, even those without human inhabitants. This week’s consumer price index reading will show inflation rates for March, setting a baseline ahead of expected price hikes from the trade war.
Meta released two new Llama 4 models: the smaller Scout, which can be used for tasks like summarising documents, and Maverick, intended as a chatbot and assistant. The more robust Behemoth, which Mark Zuckerberg called the world’s “highest performing base model,” is forthcoming.
A recruiting lead at digital studio letsmake.com said she received an obviously AI-generated message from an applicant, but still booked an interview with them. During the video interview, the candidate appeared on screen using an AI filter which they refused to remove before leaving the call. Google also flagged the candidate as a potential imposter since they weren’t signed in.
Researchers from India’s Graz University of Technology and Vellore Institute of Technology are working on artificial skin made from 3D-printed hydrogel layers and living human cells. If successful, the fake skin could one day replace animals in testing experiments while also letting companies ensure their products are safe for humans. Next will be replacing lost toenails for distance runners.