April 22, 2024 • 40 mins
Bloomberg's Caroline Hyde and Ed Ludlow take a deep dive into TikTok's divest-or-ban legislation as it clears the house and heads to the Senate this week. Plus, chaos erupts internally at Tesla as Elon Musk shifts the company's focus from a cheaper model to the robotaxi.
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Speaker 1 (00:01):
From Marhard.
Speaker 2 (00:02):
We're Innovation of Money and Power Collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hyde and Ed loved Love.
Speaker 3 (00:24):
I'm carolinehide A Bloomberg's World Headquarters in New York, and
I'm Ed Lovelow in San Francisco.
Speaker 4 (00:29):
This is Bloomberg Technology.
Speaker 5 (00:30):
Coming up divest oor ban legislation. It clears the House
and it heads to the Senate. That's this week.
Speaker 3 (00:36):
Tik Target prepares to take this to the courts and
exhaust all legal fights.
Speaker 5 (00:40):
Will have full coverage ahead.
Speaker 4 (00:42):
Plus, we take a deep dive into Tesla as chaos
erupts internally and Elon must shifts the company's focus from
a cheaper model to the ROBOTAX will bring you the
findings from our Bloomberg Big.
Speaker 3 (00:53):
Take and salesforce's talks with Informatica. They fizzle as a
company struggle to agree on terms of a deal, all
according to Sources'll discuss that and so much more throughout
this sabb At.
Speaker 4 (01:02):
First, the other big story we're tracking is the passage
of the ban or divest TikTok bill on the hill.
We passed the House over the weekend. The expectation is
it will pass the Senate in the coming days. Bloomberg
Intelligence and This are in house researchers saying there's a
ninety percent chance it will go through the Senate and
be passed into law. These are the publicly traded social
(01:24):
media names. Some downward pressure on names like Meta and Snap,
alphabet pair and a Google a little higher. But I'm thinking,
of course about YouTube. The landscape for social media in
this country is front and center this week, Caroline.
Speaker 3 (01:35):
And also what's happening abroad, the EU opening a new
investigation into TikTok as well. We're reporting all of this
as you just really focus on what's happening in the US.
Speaker 4 (01:43):
Said.
Speaker 3 (01:43):
In the coming days, the Senate expected to vote on
that legislation requiring TikTok's Chinese parent company, bike Dance to
divest its ownership stake in the app.
Speaker 5 (01:52):
President Joe Biden has said, look, design that legislation pretty promptly.
Speaker 3 (01:55):
If we gets through for more, let's bring in Bloomberg's
Alex Barinka.
Speaker 5 (01:58):
It's been a busy.
Speaker 3 (01:59):
Weekend, so this is kind of a Dondale law.
Speaker 4 (02:02):
It does.
Speaker 6 (02:03):
This bill passing seems almost inevitable. The Senate is expected
to take it up this week. President Joe Biden has
said he will sign it immediately, and TikTok inside is
already scrambling over the weekend.
Speaker 5 (02:13):
After the bill passage.
Speaker 6 (02:15):
On Saturday, we broke the news that the General Council
in the US for TikTok and Byte Dance, Eric Anderson,
who's been in charge of convincing the National Security Interagency
Committee that TikTok is doing enough to prevent any user
data from getting to China, is actually being pushed out
of his role. So the changes are happening internally. The
company is also sending memos to its employees promising that
(02:39):
if this bill passes this week, that will not be
the end of the story. By Dance and TikTok both
intend to fight this to every extent of the legal
battles possible before considering any kind of divestitor or separation
from TikTok Chinese parent company.
Speaker 1 (02:54):
By Dance, I to Alkeds.
Speaker 4 (02:56):
At the beginning of the show about the BI or
Bloomberg Intelligence assessed of whether or not this will pass
through the Senate and be passing to law ninety percent.
There are other piece of analysis is that if there
were to be a legal challenge by TikTok and its
US users, they assign a seventy percent chance that the
US government would be successful in court. Over the weekend,
(03:16):
we also had a lot of kind of internal news
at TikTok. What else have you reported, Alex.
Speaker 6 (03:22):
Well, those pressures on the legal side, you know, it's
interesting to see those numbers. There are a number of
kind of legal avenues that TikTok might take. We saw
them when the state of Montana looked to ban the app.
Stand behind a number of users who actually sued, there
might also be folks like small businesses or other organizations
who feel like they're being harmed. So certainly the pressure
(03:43):
is on here in the US. And then just this
morning ed as Caroline mentioned, the European Union opened a
new probe into whether byte Dance violated the block new
Content law when it launched an app called TikTok lights
app in France and Spain without providing a full risk assessment.
So if you're internal at TikTok right now, you are
not only dealing with this inevitable passage of the bill
(04:05):
that bi Bloodberg Intelligence puts at ninety percent passage. You're
also having to fend off continued pushes for find scrutiny
over privacy, and again just the intense, unprecedented attention that
this move by US Congress has made, and perhaps has
got lawmakers and other geographies thinking, if the US is
(04:26):
doing something like this, should we be taking a closer look?
Speaker 4 (04:29):
Bloomberg Zalx Brinka literally minute by minute reporting on this.
It's been a busy weekend, it will be a busy
week for you. Let's keep a conversation going. Bring in
Rachel Tippograph, the founder and CEO of mick Mac, an
e commerce marketing platform for multi channel brands. You understand
the entire lens here, the user's interest in TikTok, the
potential of TikTok in this country in the e commerce context,
(04:51):
and the competition out there. I talked about the chances
of this bill passing. I believe you see it passing
as well.
Speaker 7 (05:00):
Absolutely, it'll be the big news headline this week that
the band will likely happen. But we at Mickmac don't
believe that this is.
Speaker 5 (05:08):
The end of the story.
Speaker 7 (05:10):
TikTok has become one of the most powerful platforms in
the world. At mickmac on any given day. We now
see TikTok as our second most traffic platform, Meta being
number one, TikTok being number two. We have to remember
TikTok didn't enter the cultural zeitgeist until twenty nineteen, and
fast forward today it is leap frogged YouTube, Snap, Pinterest,
(05:34):
and of course X in terms of brand investment and traffic.
So we don't believe this will be the end of TikTok.
TikTok will absolutely fight this the way that they did
with Trump and twenty twenty and Montana last year. That
will then create some time for a divestiture to really
come to life. And why wouldn't Salesforce or Microsoft or
(05:56):
Adobe or Walmart, Amazon or Meta make a lane and
grab for.
Speaker 5 (06:00):
This because percent of Americans youth TikTok.
Speaker 3 (06:03):
Well, the reason they might not is because China won't
let them.
Speaker 5 (06:06):
We've also got a factory. Of course it might not
sell it, or indeed they wouldn't.
Speaker 3 (06:09):
Let the access to the technology, but let's go with
the fact that maybe they are able to buy it
here in the US. I'm just interested amidst this uncertainty
because they still got a year if this goes past
the Senate, they then got a year to sell themselves.
Do any of your twelve hundred brands that use you,
that come through you start to pull back on their
investment and tiktoks you think at all?
Speaker 7 (06:32):
You know this has been a part of the dialogue
for the past year that a ban could happen, and
for some of the advertisers we've seen a slight pause.
That being said, TikTok traffic at Mickmac has grown forty
percent year every year. So by and large, we continue
to see fortune one thousand brands invest in the platform.
(06:53):
And not only are they investing it from an advertising standpoint,
they're starting to invest in it in terms of a
standalone com channel now with the advent of TikTok shops.
So we're not seeing brands pull back. But the reality
is with advertising it's very easy to turn on and off.
We saw this happen with Meta, with YouTube with x
(07:15):
and so brands have options. If they choose not to
invest in TikTok, they're going to reallocate spend to other
social channels as well as programmatic like the Tride Desk or.
Speaker 1 (07:25):
CTV like Roku.
Speaker 7 (07:27):
So I'm not overly worried in terms of what will
happen in the advertising landscape. There's plenty of options for
brands to drive reach, awareness and conversion.
Speaker 4 (07:38):
There's the advertising side of the equation, there's the eyeballs.
And it was interesting that over the weekend Elon Mosk,
the CEO of X, the platform formerly known as Twitter,
gave his opinion that TikTok should not be banned in
the USA, even though such a band may benefit his
own platform X therein lies the value of it. You
(07:59):
talk to the e commerce side, But for me, the
thing we never talk about that much is fifty percent
or most of all Americans use TikTok. That is scale
that many other platforms don't have.
Speaker 5 (08:11):
Absolutely.
Speaker 7 (08:11):
I mean, it's why TikTok is now our second most
traffic channel at mickback Meta is number one. There's very
few places for you to reach all US American households,
and so to reach fifty percent of them with essentially
one ad by on TikTok is extremely powerful and per Musk,
I mean, we're talking about setting a precedent that really
(08:33):
interferes with the First Amendment, which is why at MCMAC
we believe that if things can play out, a divestiture
is most likely the best outcome for everyone. Bite Dance
might not see it that way, but in terms of
the US government, if I were them.
Speaker 1 (08:49):
I would be pushing for a divestiture.
Speaker 4 (08:52):
I don't think by Dance we would see it that way. No,
a second, guy, I actually misspoke. I said that Elon
Musk was the CEO of X. He's not Lindy acarino is.
But given the last seven days that I've had and
the number of companies that Elon Musk is CEO of,
I think the world will forgive me. Rachel tippograph of
Mick mac Thank you very much for your analysis. Now
coming up internal chaos at Tesla, where Elon Musk is
(09:16):
CEO and he's shifting his focus from a cheaper model
to the ROBOTAXI. We put a really important piece out
last night in the Bloomberg Big Take, and that's coming
up next.
Speaker 5 (09:25):
Karen, so well read brilliant reporting.
Speaker 3 (09:27):
Meanwhile, let's just dig into what was also happening on Friday.
Remember when in Video was down ten percent, it lost
woman to billion dollars in market capitalization. Today it's up,
but only one point three percent. We're actually fading some
of that rally in this big tech in a AI play.
Speaker 8 (09:42):
This is a Bloomberg Technology.
Speaker 4 (09:55):
Bloomberg big take, Tesla consumed by chaos amid CEO Elon
Musk shift of a focus from new cheaper models to
clearly a Robotaxi in Caroline. What we tried to do
is clarify what's going on. And my understanding is this
is Elon Musk. He's come back in and said, yes,
Robotaxi is the focus. A cheaper EV is not completely scrapped,
(10:17):
but it is confusing. You've read the Big Take. I
don't know. Did we give you some clarity and where
we stand you?
Speaker 3 (10:24):
Did you really just highlighted how much perhaps we've seen
a re orientation of Elon Musk back on the Tesla business,
back in demon mode for all the pros and the
cons that gives. I mean, in particular, you articulate so
well some of the negatives that have been felt by people.
Speaker 5 (10:38):
Let go at the company.
Speaker 4 (10:40):
I think one really clear thing is that loads of
executives at Tesla said Elon, please do the twenty five
thousand dollars EV do it cheap. Elon said, no, we
are doing Robotaxi, and there's a difference of philosophy. But
the cheap part is misunderstood. It's not canceled or scrapped.
It just looks different to what we thought. So a
lots to discuss.
Speaker 3 (10:58):
Yeah, the fact that basically it can be wrong. Doubt
this is a cheaper model for other purposes, a more broadly,
more wide reaching company that ultimate investors are trying to
get their hands around, and share prices reflect that. Craig Traudell,
who has been helping edit this beautiful creation that Ed
Ludlow and Anna Halla put together.
Speaker 5 (11:15):
Over this weekend.
Speaker 3 (11:16):
Craig, your key takeaway, and I think for many investors
is right now, what are the priorities?
Speaker 5 (11:22):
And that's it.
Speaker 3 (11:23):
The priority right now is Robotaxi, but for a greater good,
for a broader, cheaper offering.
Speaker 9 (11:29):
Yeah, you know, I was talking with some of our
colleagues at bn F and I think, you know the
idea that maybe what Elon may make the case to
Wall Street tomorrow is we already have a twenty five
thousand dollar car. He will be spinning when he says that.
But when you sort of take into account gas savings
and tax credits and so on and so forth. You know,
the Model three, after the price cuts of the last
(11:52):
year plus, is getting pretty darn close to that and so,
you know, I think that what we'll see from Tesla
in the months to come is this attempt to kind of,
you know, further emphasize the value that they're offering with
the Model three and the Model Y per Ed's reporting,
you know, apply some of the work that's going into
the platform that they want to use to underpin the
(12:15):
robo taxi to bring the Model three and Model Y
costs down even further. I think the real question is
whether or not that's going to cut it for Wall Street,
because they want to see some new product.
Speaker 4 (12:28):
You know, we tried to give some clarity on that.
We try to give some clarity on the layoffs. And
the way that one source put it to me is
deliveries were down twenty percent sequentially in the first quarter.
So must turn around to the other bosses and said,
if deliveries are down twenty percent, let's just cut headcount
twenty percent. Not for any reason to do with cost
saving necessarily, but this is like the Elon Musk playbook,
(12:48):
Craig right, and when you edited the Big take. I
hope that you got the sense that this is Elon
Musk pulling the strings on this.
Speaker 9 (12:56):
Yeah, you know, and it takes me back a little
bit to the Walter Isaacson biography, where you know, I
feel like the word delete was in that book, you know,
at least fifty times in terms of you know, whenever
you know Tesla or SpaceX or these various companies that
he runs, you know, run into trouble. He just comes
in and wants to cut everything and get rid of
(13:16):
everything and question why, you know, companies are doing things,
building things, Why do we need that part or component
or why are we doing this process? I think the
question is, you know, whether he's sort of cut to
the bone here, and you know, we're even sort of
seeing some questioning of whether or not he's effectively doing
that in these price cuts over the weekend, whether there
(13:37):
are going to be any earnings left in China, you know,
in terms of how far they've gone with the Model
three and the Model hy in that market.
Speaker 3 (13:45):
I mean, the key point here, Craig is we all
think about this bigger picture and then look ahead to
the micro Let's a little over twenty four hours and
we get the earnings.
Speaker 4 (13:54):
Yeah, I mean just shout out to Craig and to Donna.
In twenty four hours we will have earnings FINGO again
and we'll find out on what I would say is
probably one of the most important earning statements and calls
in Tesla's history, because investors just want some clarity on
what the strategy is. Craig, in one word or one sentence,
what are you watching for.
Speaker 9 (14:15):
Just as much hype around AI and for self driving
as we can possibly imagine. I think that's the expectation
because there aren't many other cards to play.
Speaker 3 (14:26):
Crochedel brilliant editing throughout this weekend on so much important reporting.
Speaker 5 (14:30):
Thank you.
Speaker 3 (14:31):
Let's get into those earnings and more broadly across the
tech sector.
Speaker 5 (14:34):
Megan Horneman, CIO.
Speaker 3 (14:36):
Verdant's Capital Advisors, I understand Vernin's Capital Advisors does have
some exposure to Tesla, and more broadly, have you feeling
have you felt that the market is priced in some
of the worst here for a business like Tesla, for
some of the less than magnificent magnificent seven.
Speaker 10 (14:52):
I think, from broadly speaking, I still think there's some downside,
specifically because these some of these stacks Tesla included have
been really driven by momentum. It's been a pretty big
decline that we've seen in Tesla, But the clarity's not there.
From a broadly speaking from the Magnificent seven this earning season,
they've got a lot, they have a lot to prove.
Speaker 1 (15:13):
Valuations are very elevated.
Speaker 10 (15:15):
And if we don't see this come through from an
earnings perspective, I think there's more downside and a little
bit more of evaluation correction.
Speaker 3 (15:23):
What I love about your notes your analysis, Megan, is
just how deep you go into sort of ultimately how
powerful and encompassing those Magnificent seven players have been. I'm
reading your note that in fact five with the Magnificent
seven companies, so you're talking in video, Amazon, Meta, Alphabet,
and Microsoft have expected to be the top five contributors to.
Speaker 5 (15:40):
Urin your earnings growth for the S and P.
Speaker 3 (15:42):
Basically, if they don't give us what we need, earnings
more broadly going to fall across the rest of the
S and P.
Speaker 10 (15:48):
They'll definitely be I think a lot weaker than the
anticipation right now, and the anticipation is only for about
er point five percent year of ver year earnings growth,
So there's a lot writing on these Magnificent seven. I
think that's also why you're seeing the markets. They're kind
of moving. They're up a little bit today, but moving sideways.
They're going to wait for They're waiting for earnings. They're
also waiting from an economics standpoint, the PCE that we
(16:11):
get later this week, personal income and spending.
Speaker 1 (16:14):
And then that first read on GDP for the first quarter.
Speaker 4 (16:18):
Megan good Morning is ed in San Francisco. There's a
UBS note this morning doing the rounds. A lot of
people are talking about it, and they've cut their view
on the Big six to neutral from overweight. But they're
basically saying tough comps this quarter. And I think that
they're kind of suggesting that if you go away from
the Big six or mag seven, what if you want
to call it, there is some other technology out there.
(16:39):
There are other corners of the market to play in.
Do you share that thesis?
Speaker 10 (16:44):
Yes, absolutely, And you know these stocks have had a
great run, but they have to now. As we mentioned,
the valuations are very high and people are looking for
outside of that to make money, not just in the
large cap space, but I think if you look in
the small and MiGCAP space. I think there's a little
bit more of value there. They haven't participated in this
rally in the large cap space, and if you look
(17:05):
from a long term perspective, from a valuation standpoint, they're
historically cheap versus the S and P five hundred, they're
in the same both though from an earnings perspective that
there's a lot of uncertainty around earnings in the next
couple quarters. But if you can withstand that volatility and
look longer term, these may be some opportunities in the market.
Speaker 4 (17:24):
Megan, there is quite a lot riding on earnings, I
feel like this season, and lots of people say, well,
if earnings don't deliver for us, particularly on the Big
six mag seven, then tech will fall away and the
market will go with it. We like drama on the show, okay,
but realistically, how worried are you about the stakes in
the coming weeks.
Speaker 1 (17:46):
I'm quite worried.
Speaker 10 (17:47):
We had a little bit more than a five percent
correction in the market over the past couple of weeks.
Speaker 1 (17:51):
That was not enough, in my opinion.
Speaker 10 (17:53):
To really warrant these to look at these elevated evaluations
and then also take all of these mountings that we
have from an economics standpoint, from a geopolitical standpoint, from
a federal reserve standpoint, I think there still is a
little bit too much optimism about what the Federal Reserve
can do.
Speaker 1 (18:11):
And our bigger risk here is what is inflation going
to do?
Speaker 10 (18:14):
Are we really in the midst of a reignition? I
guess you could say of inflation. If that's the case,
these stocks and these earnings expectations and these valuations are
just not sustainable.
Speaker 4 (18:26):
Megan Hornman, Vernet's Capital Advisor, is really appreciate your time
on the show.
Speaker 5 (18:37):
I'm now been talking tech.
Speaker 3 (18:38):
First up, calls are growing for a crackdown on X
in Australia after two knife attacks have occurred in Sydney
over the past ten days alone. Now, graphic content from
the stabbings as well as misinformation spread quickly as both
attacks unfolded, and that's now prompted five government ministers to
consider bringing in.
Speaker 5 (18:55):
Tougher laws for social media companies.
Speaker 3 (18:57):
Plus ten Cent shares well, they've staged big rally since December,
and now we know that China's biggest internet firm has
just nailed down an earlier then anticipated debut of its
mobile game Dungeon and Fighter Mobile. It's a marquee title
expected to refresh and aging pipeline and drawing new users,
so shares, tick tire that much more. And Japan's UNTI
Trust regulator has its eyes on Google this after it
(19:18):
says the tech giant used tactics that limited Yahoo Japan's
ability to compete in targeted search ads. Now, the watchdog
says that Google's parent Alphabet changed its conduct as soon
as they flagged the practice. That will keep on monitoring
this US firm.
Speaker 11 (19:40):
Apple's next big thing is a push into on device
large language models. Apple's been working on several major projects
for years, including home robots, foldable iPads, and augmented reality glasses,
but the biggest and most important project coming this year
is a push into generative AI. Apple's approach will be
a little bit different than the competition like Google, OpenAI
(20:03):
and Meta. Instead of powering Jenai on cloud based servers,
the functions will work on the iPhone itself, using the
on device software processors and other chips. That makes it quicker,
more secure, and Apple believes more functional and more accurate.
With iOS eighteen coming in September after being introduced in
(20:23):
June at the Worldwide Developers Conference, Apple plans to include
a slew of new AI features that will help users
in their daily lives.
Speaker 4 (20:32):
I'm Mark German. This is power on. Okay, let's get
a check in on the market and one asset I
guess we haven't to us much about is bitcoin. We
sent the headline five pm Pacific on eight point nineteen.
The halving has occurred and as such it cuts in
half the rewards. The paid to mine is twenty four
to seven. We trade in bitcoin, so we're at sixty
(20:54):
five thousand, sixty six thousand US dots partocon right now.
Where we're seeing a more pronounced, delayed suppose reaction to
the harving is in those assets that do not trade
twenty four to seven. In other words, the US traded
equities or stocks to the crypto links coinbases off its
session highs but have been up seven percent. Riot another
block chambered platform up nine percent. Some names moving to
(21:16):
the downside Marathon Digital Holdings down three point nine percent.
There was a headline on the term or Caroline that
the harving was a bit of a limp, but as
you know, I think we should be excited about it.
I think there's still a lot to discuss there.
Speaker 5 (21:29):
We're still parties virtual or in real life.
Speaker 3 (21:32):
I want to know how many of those invites you
went to ed But one person hosting one of those
halving parties was Chris Klein, Bitcoin Ira COO and co founder.
For this and so much more so, you watched it
happen when it occurred on Friday night. But now the
reality and what's interesting is, you know, maybe there are
some players miners out there now that don't get rewarded
(21:54):
as much.
Speaker 5 (21:54):
Maybe we've see an impact on the shared price.
Speaker 3 (21:56):
But ultimately this is meant to drive the increase of bitcoins.
Speaker 5 (22:00):
Will it?
Speaker 4 (22:01):
Yes?
Speaker 12 (22:02):
Absolutely, thanks for having me, and yeah, we had some
good parties last week for the having You're right, it
does punish the producers of the asset class.
Speaker 4 (22:11):
You will see.
Speaker 12 (22:12):
Salce headlines this morning that it came off with a whimper.
That's pretty typical for having events. It's usually three to
six months where you start seeing some impacts of that
supply constraint that takes place.
Speaker 4 (22:26):
Supply constraint has not yet taken place. I actually want
to focus on that for a minute, because I think
you guys had a pretty good quarter, and actually since
the start of the year, whether you are focused on
the underlying technology or you're participant in the marketplace for
crypto related assets, things have been quite cheery. Put that
(22:46):
into context for us, as everyone was bracing for the harving,
they were also doing business and carrying on with it.
Speaker 12 (22:51):
Yes, absolutely, it's kind of interesting. You expect this like
big time square event where everything changes, like the year
has turned over, and in reality it's just we've hit
another block, the next two hundred and ten thousandth block
in which it's in our code, it's in our DNA
to cut or cut the rewards and then limit that supply.
This is not happening in a vacuum either, so you've
got ets that are taking a line line's share of
(23:13):
those of these things. Right now, we have a few
billion dollars of assets clients or client assets under custody
inside of our platform, and there'll be more and more
when less and less is available, which is really in
contrast to the Almighty dollar and the way the US
dollar works today. We actually reward producers of currency every
four years with things called reelections, right.
Speaker 4 (23:34):
That I get the parallel of we have a big
part of our audience that are focused on largely the blockchain, right,
they probably don't care about any given direction of the
movement in bitcoin or or its current price. But there
is now a big market of people that does. And
many of them argue because of the finite supply, and
I'm repeating myself to audience. We always talk about this,
(23:55):
but bitcoin can only ever go up in price because
of that limited because that's actually yeah. The other story
of the first quarter was liquidity. This is quite a
liquid market, yes, where a lot of sounds. How do
we square those two?
Speaker 12 (24:07):
How do you square that with liquidity is a difficult question.
Probably bigger nerds that can handle that for you. But
don't forget the divisibility of bitcoin. It you don't trade
in one bitcoin. It goes down to the eleventh decimal point,
which is known as the satoshi. And as we get
further and further down that scarcity, you're going to start
seeing the impact where people will be, Wow, you're a
one bitcoiner, and that.
Speaker 4 (24:26):
Will be a huge deal. I think it.
Speaker 12 (24:28):
Also, you can't have this conversation about bitcoin having without
talking about inflation.
Speaker 4 (24:32):
They're very intertwined. Today.
Speaker 12 (24:33):
I was reading a study this morning Northwest Musical came out.
Average Americans think they need one and a half million
dollars in order to retire comfortably, which is.
Speaker 4 (24:41):
A pretty large number.
Speaker 12 (24:42):
However, what's really staggering is that just three years ago
the same report was at nine hundred and fifty thousand.
So in just three years, Americans feel like they need
fifty three percent more money to retire comfortably. And that's
part of why folks are looking at diversification of currency,
and bitcoin is a opportunity for that.
Speaker 3 (25:00):
But you're looking at what we're saving for our pensions
and for our retirement a little bit more. Because you've
got in your name bitcoin, IRA, you don't just offer bitcoin,
you offer us some other cryptocurrencies. But more broadly, at
the moment, this coming of an ETF was meant to
tempt in the so called boomers to get them back
into allocating to an attempted to illocate into bitcoin. But
(25:23):
what about the rest of the old coins? And how
you seeing interest pick up as we start to talk
more of an ATHTF two.
Speaker 12 (25:29):
Yeah, the ETHTF is starting to get some build up.
We should maybe expect that later this year. I don't
get excited because I waited seven years for the Bitcoin
ETF to get approved, But there are a slew of coins,
thousands of them on our platform. There's about sixty five
different coins that are available or currencies available today, and
they're all served different utilities. Ethereum is really the backbone
(25:50):
of the future of the web or Internet as we
can think of it, which is designed for smart contracts. Actually,
I wish my ten year old daughter was here. She
was on a podcast I think last week, and she
has one associations for these Bigcoin is money a theory
as contracts ripples banks, and like coin is her favorite shopping.
Speaker 4 (26:06):
I actually think that the huge body of our audience
get that they appreciate just simplifying things a little bit.
Chris Klein, Bigcoin, I ra Aco and co found. It's
great to have you on the program here in San Francisco.
Thank you. Let's talk about the entertainment industry. I chatted
(26:28):
with Kevin May, a former CEO of TikTok and former
Disney chairman, and we talked about you Guessed It, TikTok's troubles,
but also Disney's leadership, two big stories in that world
of late. He's also the co CEO of Candle Media,
which owns Coco Melon creator Moonbug Entertainment, So I had
to ask him if we should expect more coming from
the company. Smash hit children's series listen to this.
Speaker 2 (26:51):
We are planning and movies hasn't been I don't think
of officially announcement actually, but there was a movie coming up,
hopefully that will be either theatrically released or beyond on
a streaming service. I'm thinking it could be theatrically released
and that would be great. That's probably in two years
we'll have a Cocomelon movie. And you're right about licensing
and merchandising when you have the reach and depth of
engagement that we have with our properties with kids and
(27:14):
their parents. By the way, there's a huge amount of
co viewing of Cocomelon or other properties. Something like forty
percent of all views are also seen by a parent,
and we've done the work to know that for sure.
That does lend itself to developing a whole set of
licensed properties that are based on that character. Toys, t shirts,
(27:34):
soft lines, bedroom who trends, all the stuff that you'd expect.
Speaker 4 (27:38):
We're in all of it, Kevin, You've mentioned it several times.
Over the course of the conversation. I'm sure it's come
up at Jeffreys and it's a big part of your
history and your present. It's Disney. Who do you think
should be the next CEO of Disney? And I'll jump
in and ask if you'd throw your own hat into
that ring.
Speaker 2 (27:59):
Well, I have pretty busy I have a tech funder
that i've I've that i'm working that, I'm working with them,
a co founder of I have Candle Media, I'm doing
some other stuff. And Disney has a very very solid
set of leaders below Bob, so there they have a
great bench. They have people that have been there a
long time that really understand the Disney culture, that just
(28:20):
be value and prominence and dynamism of brands. And I
think most likely they'll go internal and fine, and they
have candidates that I think are are wonderful. So that's
where I think it's going to go.
Speaker 4 (28:30):
And my hat.
Speaker 2 (28:31):
I have not tossed my hat in the ring actually,
so you know I'm doing my thing at this point.
Speaker 4 (28:36):
There are many streaming platforms to choose from. You kind
of summed it there. One of the names you didn't mention,
for example, was Paramount Plus and then and Peacock is
one that I think about a lot. Is there a
world in which all of these survive independently or do
you see some consolidation? And I know you must get
(28:57):
asked that all the time by the financial press, or
find mental networks like ours, But again I point to
the idea, you're sat on the other side of the table,
the content creator, and you've got some power and interest
in where it's distributed.
Speaker 2 (29:11):
Like I don't, I can't. I don't know what the
future of Paramount Plus and Peacock are. Obviously I don't
have a crystal ball. I do think that there's a
scale issue with them. I do believe not every single
studio can have an associated streaming service that has the
same prospects as a Disney or as a Max or
as a Netflix or Amazon for that matter, And I
(29:32):
left those out, but that's obviously even a huge player
as as Apple TV plus. I do think consolidation is inevitable.
You know that is just natural economics one on one
and an industry start off and everything's about growth and
cost of capital was very inexpensive back when Netflix started
the ball rolling, I think that there was very free
(29:53):
access to capital and a lot of patients by on
behalf of investors. And I think as the industry is mature,
and as you're starting to kind of trade more household
and as natural growth starts to level off, always consolidation
happens and people then you have to start focusing on
costs and cost synergies, and the synergy is inherent and
possibly and mergers and the like. And I think that
(30:13):
is a natural course for any any growth sector to
evolve into. And I think that's what you're saying in streaming.
It will happen there too.
Speaker 4 (30:22):
Kevin, I'm pushing my luck here. I'm being told we
got to go. But I would be remiss if I
didn't ask you about TikTok, just your assessment, having been
inside and now on the outside, of what you think
will happen. I know you don't have a crystal ball,
but you know the political will is to divestiture of
US ops, and TikTok seems to think that domiciling US
(30:42):
user data in US based servers is the answer. It's
hard for me to call.
Speaker 2 (30:49):
I haven't been in TikTok for several years now, so
I'm just observing it the way everyone else is observing
it at this point, I will say this about TikTok.
It's a great team. It's an independent company, although it Chinese,
it is not, you know, as far as I know,
run by the government in China or anything else. I
don't know. I'm not familiar with all the different security
concerns that our government may or may not have. But
(31:11):
I do know that the folks that the folks that
I dealt with at TikTok or high quality people. The
product is obviously super impressive and engaging and has taken
over larger parts of the media and social media landscapes already.
I don't know what's going to happen. It does seem
to be bipartisan, more so than most issues these days,
(31:34):
so it's going to be interesting. I hope that I
hope the right thing happens there.
Speaker 4 (31:39):
That was Candle Media co CEO Kevin Mayer Caroline.
Speaker 3 (31:43):
What a wide ranging conversation, brilliant ed. Meanwhile, though, look,
we've got to switch gears because it's Earth Day.
Speaker 5 (31:48):
Happy Earth Day.
Speaker 3 (31:49):
Let's take this opportunity to look at the latest world
of climate tech. In bench Capital, I'm very pleased to
bring in sim Capital founder and managing partner Sita Chandremon
Class three on today's vcpol sustainability as a service?
Speaker 5 (32:03):
What is that?
Speaker 3 (32:03):
That as your ethos, that is your underpinning. What does
sustainability as a service look like?
Speaker 5 (32:08):
It's a great question.
Speaker 13 (32:09):
I think I'd probably first dissect the question around sustainability
because there's so much public rhetoric right now on what
it actually means. So we are trying to tackle how
do we produce more or the same with less? And
there's new technologies that are trying to combat this. But
the way that we think about it is like, how
can we invest in consumption infrastructure, in the picks and shovels,
(32:31):
in supply chain software, in new data platforms that really
allows us to be much more sustainable in an economic way.
So that's sort of why we landed on this coined term,
if you will, the new SaaS or sustainability as a service.
Speaker 3 (32:44):
You've been raising money and for as someone who's leading
it as GP, still a lot of money from the
fund to allocate, So tell me fifty million where the
priorities to be putting money to you? Where you can
make the most impact from how I basically interact with
the climate as a capital It's.
Speaker 5 (33:00):
A great question.
Speaker 13 (33:01):
I you know, we're still investing out of our first fund,
but we're actually really focused on our second fund right now.
Speaker 5 (33:07):
And the ethos has been happening is that second fund.
Speaker 13 (33:10):
Our second fund target is eighty And you know, the
thing that I think a lot of consumers struggle with
is like, how can you really capitalize on your individual
purchases or your activities if you will. And one of
the things we always come back to is that sustainable
solutions are not really long term sustainable if they're not
(33:30):
cost effective and if they don't really if they don't
really inhibit the consumer's life that drastically on a day
to day because at the end of the day, I mean,
we're sitting in a Bloomberg office. We live in a
capitalist society, so we need to focus on investments, and
we need to focus on solutions that don't totally change
the way that we behave at least not so drastically.
Speaker 5 (33:49):
I'm going to kind of a flight still for example, exactly.
Speaker 13 (33:52):
And it's a lot of the times as an investor,
we're thinking about how do we evaluate businesses that are
a lot more practical, that aren't necessarily from the echo
chambers of you need to be net zero tomorrow. So
that's really where we're sort of leaning our biases these days.
Speaker 4 (34:08):
CITA. We've done a lot of reporting on the program
about funds new funds that are focused on manufacturing industrial funds,
but they have the same thesis, just very specifically, what's
the opportunity for you. Is it on something tangible hardware
or are you also looking at software application as well.
Speaker 13 (34:28):
We're definitely looking across both areas, but our personal biases
towards the latter, I mean, to be very frank, the
genesis of the fund really started because we felt like, wow,
there was a lot of capital being deployed into the
broad climate crisis or the sustainability transition. From a sheer
volume standpoint, the vast majority of this capital was going
into hard assets, long duration if you will, slightly risk
(34:52):
your bets. And while that's a super noble ambition, if
you will, and I'm so happy to know funding is
out there for those initiatives, at the end of the day,
this transition is not going to happen just because we
have these decade defining technologies. We also need the picks
and shovels. Sort of the point I was making earlier
around really software that will actually connect the dots between
(35:15):
the new technologies that exist and the end user, be
it the consumer businesses. So we have a strong bias
towards really investing in these slightly more scalable, slightly more
asset light, much more software focused opportunities.
Speaker 4 (35:28):
What is the pitch then to LPs very quickly, just
how do you sell it to them?
Speaker 13 (35:32):
The vision I'm probably I'm probably going to say away
from that, just because we know we try to keep
those conversations in private, but also more so, it really
depends on what your perspective is on the transition. But
our stance is very much that you know, over our lifetime,
one of the greatest transitions, or one of the greatest problems,
(35:54):
if you will, is this sustainability transition. But as a
function of that, it's also one of the greatest wealth
creation opportunit unities, and we need to be able to
find ways in which we can invest in that transition
in a much more asset light way, in a way
that is a little bit more tangible. Sort of to
go back to her thesis a little bit, or to
answer Caroline's first question as well around consumers. You know,
(36:16):
in the US where we sit, and this is also
pretty akin to a lot of developed countries, the biggest
shareholder of the economy or the biggest stakeholders or consumers,
we hold over seventy percent of the GDP so on aggregate.
This is a massive moving power mechanism and consumers. If
we're forced to change every facet of our lives, what
we do, how we spend our time, how we move,
(36:38):
it forces businesses to also change the way they do business.
And that really is the essence of how we think
about the space.
Speaker 3 (36:44):
I'm talking about, how you move, That's why you're in
companies like Cowboy, Tomorrow Farms, How we eat, how we consume?
Speaker 5 (36:49):
Sime Capital, founder and managing Ponda. Great to have you
with us. Thank you so much, Seeta s Tremun classroy Ed.
Speaker 4 (36:55):
If you got coming up another big story and they
keep coming. Salesforce talks with Informatica fizzle out. In fact,
there ain't no talks at all. We'll talk about those
details next. This is Bloomberg Technology Data management company. Informatica
(37:25):
said it's not engaged in takeover talks following reports that
discussions with sales Force had call let's get the analysis
with Anna rag Rana of Bloomberg Intelligence. So that was
the chronology, right. Bloomberger reported there were talks. Then Bloomberger
reported that they had called specifically over price. It's the
sticking point. And now Informatica has been forced I guess
(37:46):
to come out and say no talks, but I don't
think many people really understood the deal anyway, Ana rag Yeah,
I don't know.
Speaker 14 (37:53):
We are happy that there's no deal for salesforce sake.
I mean, Informatica is not growing at that seam readers salesforces,
and you know, we're happy with the way what Salesforce
has down over the last twelve to twenty four months,
stayed away from deals, focused on margins, focus on organic
growth rate, and I hope for their sake they stick
to that at least for the near term, because as
(38:13):
as you remember, this was the biggest criticism for Salesforce
for several years, that they move into slightly profitable territory
and then they'll go out and buy something big and
then you know, shareholders don't get the benefit of the
leverage that comes from a SaaS model.
Speaker 5 (38:27):
To that end.
Speaker 3 (38:28):
Well, this was going to be the biggest deal since
all the way back to Slack being bought for twenty.
Speaker 5 (38:33):
Seven billion dollars.
Speaker 3 (38:35):
I'm interested there for what is it that they just
wanted to add and what would you like them to
add organically if not inorganically.
Speaker 4 (38:43):
Yeah.
Speaker 14 (38:43):
See, one of the things is Salesforce has no shortage
of i would say opportunities in the long run. They
have a massive customer base on sales, automation and customer
service a lot of that. What they have to do
is make sure these products work well. Now, when they
were looking at buying Informatica, they actually bought a company
called Mutsoft a few years ago that does some stuff
(39:03):
that's very similar to Informatica. Informatica is slightly larger than
mule Soft when it comes to that. But honestly, they
just reported Salesforce reported that MuleSoft grew twenty two percent
the last time we had their numbers. That's a massive
growth rate for a company internally what they're doing on
data management. Informatica, on the other hand, if you look
at Consensus is growing at six seven percent. So from
(39:26):
our side, I was surprised that they are even you know,
considering at this point, given all the opportunities they have
organically and.
Speaker 3 (39:34):
RAG so great to always get your perspective and why
perhaps you like the idea that EM and A isn't
going thick and fast over over at CRM and Ran
Ran and we thank you.
Speaker 5 (39:42):
Bloomberg Intelligence, all.
Speaker 3 (39:43):
Things Salesforce, all things well, busy, busy Monday day. We're
talking TikTok, We're talking legal regulatorations, We're talking your big Take,
which is a mastery.
Speaker 4 (39:52):
To d Yeah, and it's all happening at once. I
think it's gonna be a massive week, you know, earning
start in Earnest Tesla massive obviously with the show, it
was an important way to start the week. So recap
on the podcast. Really grateful. So many of you are
listening to the show as a podcast and your way
to work your way home wherever you are in the world.
You can get it on Apples, Spotify, and iHeart. We
do have a big week, So from New York City
(40:13):
and San Francisco join us for the next four days.
This is Bloomberg Technology
From Marhard.
Speaker 2 (00:02):
We're Innovation of Money and Power Collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hyde and Ed loved Love.
Speaker 3 (00:24):
I'm carolinehide A Bloomberg's World Headquarters in New York, and
I'm Ed Lovelow in San Francisco.
Speaker 4 (00:29):
This is Bloomberg Technology.
Speaker 5 (00:30):
Coming up divest oor ban legislation. It clears the House
and it heads to the Senate. That's this week.
Speaker 3 (00:36):
Tik Target prepares to take this to the courts and
exhaust all legal fights.
Speaker 5 (00:40):
Will have full coverage ahead.
Speaker 4 (00:42):
Plus, we take a deep dive into Tesla as chaos
erupts internally and Elon must shifts the company's focus from
a cheaper model to the ROBOTAX will bring you the
findings from our Bloomberg Big.
Speaker 3 (00:53):
Take and salesforce's talks with Informatica. They fizzle as a
company struggle to agree on terms of a deal, all
according to Sources'll discuss that and so much more throughout
this sabb At.
Speaker 4 (01:02):
First, the other big story we're tracking is the passage
of the ban or divest TikTok bill on the hill.
We passed the House over the weekend. The expectation is
it will pass the Senate in the coming days. Bloomberg
Intelligence and This are in house researchers saying there's a
ninety percent chance it will go through the Senate and
be passed into law. These are the publicly traded social
(01:24):
media names. Some downward pressure on names like Meta and Snap,
alphabet pair and a Google a little higher. But I'm thinking,
of course about YouTube. The landscape for social media in
this country is front and center this week, Caroline.
Speaker 3 (01:35):
And also what's happening abroad, the EU opening a new
investigation into TikTok as well. We're reporting all of this
as you just really focus on what's happening in the US.
Speaker 4 (01:43):
Said.
Speaker 3 (01:43):
In the coming days, the Senate expected to vote on
that legislation requiring TikTok's Chinese parent company, bike Dance to
divest its ownership stake in the app.
Speaker 5 (01:52):
President Joe Biden has said, look, design that legislation pretty promptly.
Speaker 3 (01:55):
If we gets through for more, let's bring in Bloomberg's
Alex Barinka.
Speaker 5 (01:58):
It's been a busy.
Speaker 3 (01:59):
Weekend, so this is kind of a Dondale law.
Speaker 4 (02:02):
It does.
Speaker 6 (02:03):
This bill passing seems almost inevitable. The Senate is expected
to take it up this week. President Joe Biden has
said he will sign it immediately, and TikTok inside is
already scrambling over the weekend.
Speaker 5 (02:13):
After the bill passage.
Speaker 6 (02:15):
On Saturday, we broke the news that the General Council
in the US for TikTok and Byte Dance, Eric Anderson,
who's been in charge of convincing the National Security Interagency
Committee that TikTok is doing enough to prevent any user
data from getting to China, is actually being pushed out
of his role. So the changes are happening internally. The
company is also sending memos to its employees promising that
(02:39):
if this bill passes this week, that will not be
the end of the story. By Dance and TikTok both
intend to fight this to every extent of the legal
battles possible before considering any kind of divestitor or separation
from TikTok Chinese parent company.
Speaker 1 (02:54):
By Dance, I to Alkeds.
Speaker 4 (02:56):
At the beginning of the show about the BI or
Bloomberg Intelligence assessed of whether or not this will pass
through the Senate and be passing to law ninety percent.
There are other piece of analysis is that if there
were to be a legal challenge by TikTok and its
US users, they assign a seventy percent chance that the
US government would be successful in court. Over the weekend,
(03:16):
we also had a lot of kind of internal news
at TikTok. What else have you reported, Alex.
Speaker 6 (03:22):
Well, those pressures on the legal side, you know, it's
interesting to see those numbers. There are a number of
kind of legal avenues that TikTok might take. We saw
them when the state of Montana looked to ban the app.
Stand behind a number of users who actually sued, there
might also be folks like small businesses or other organizations
who feel like they're being harmed. So certainly the pressure
(03:43):
is on here in the US. And then just this
morning ed as Caroline mentioned, the European Union opened a
new probe into whether byte Dance violated the block new
Content law when it launched an app called TikTok lights
app in France and Spain without providing a full risk assessment.
So if you're internal at TikTok right now, you are
not only dealing with this inevitable passage of the bill
(04:05):
that bi Bloodberg Intelligence puts at ninety percent passage. You're
also having to fend off continued pushes for find scrutiny
over privacy, and again just the intense, unprecedented attention that
this move by US Congress has made, and perhaps has
got lawmakers and other geographies thinking, if the US is
(04:26):
doing something like this, should we be taking a closer look?
Speaker 4 (04:29):
Bloomberg Zalx Brinka literally minute by minute reporting on this.
It's been a busy weekend, it will be a busy
week for you. Let's keep a conversation going. Bring in
Rachel Tippograph, the founder and CEO of mick Mac, an
e commerce marketing platform for multi channel brands. You understand
the entire lens here, the user's interest in TikTok, the
potential of TikTok in this country in the e commerce context,
(04:51):
and the competition out there. I talked about the chances
of this bill passing. I believe you see it passing
as well.
Speaker 7 (05:00):
Absolutely, it'll be the big news headline this week that
the band will likely happen. But we at Mickmac don't
believe that this is.
Speaker 5 (05:08):
The end of the story.
Speaker 7 (05:10):
TikTok has become one of the most powerful platforms in
the world. At mickmac on any given day. We now
see TikTok as our second most traffic platform, Meta being
number one, TikTok being number two. We have to remember
TikTok didn't enter the cultural zeitgeist until twenty nineteen, and
fast forward today it is leap frogged YouTube, Snap, Pinterest,
(05:34):
and of course X in terms of brand investment and traffic.
So we don't believe this will be the end of TikTok.
TikTok will absolutely fight this the way that they did
with Trump and twenty twenty and Montana last year. That
will then create some time for a divestiture to really
come to life. And why wouldn't Salesforce or Microsoft or
(05:56):
Adobe or Walmart, Amazon or Meta make a lane and
grab for.
Speaker 5 (06:00):
This because percent of Americans youth TikTok.
Speaker 3 (06:03):
Well, the reason they might not is because China won't
let them.
Speaker 5 (06:06):
We've also got a factory. Of course it might not
sell it, or indeed they wouldn't.
Speaker 3 (06:09):
Let the access to the technology, but let's go with
the fact that maybe they are able to buy it
here in the US. I'm just interested amidst this uncertainty
because they still got a year if this goes past
the Senate, they then got a year to sell themselves.
Do any of your twelve hundred brands that use you,
that come through you start to pull back on their
investment and tiktoks you think at all?
Speaker 7 (06:32):
You know this has been a part of the dialogue
for the past year that a ban could happen, and
for some of the advertisers we've seen a slight pause.
That being said, TikTok traffic at Mickmac has grown forty
percent year every year. So by and large, we continue
to see fortune one thousand brands invest in the platform.
(06:53):
And not only are they investing it from an advertising standpoint,
they're starting to invest in it in terms of a
standalone com channel now with the advent of TikTok shops.
So we're not seeing brands pull back. But the reality
is with advertising it's very easy to turn on and off.
We saw this happen with Meta, with YouTube with x
(07:15):
and so brands have options. If they choose not to
invest in TikTok, they're going to reallocate spend to other
social channels as well as programmatic like the Tride Desk or.
Speaker 1 (07:25):
CTV like Roku.
Speaker 7 (07:27):
So I'm not overly worried in terms of what will
happen in the advertising landscape. There's plenty of options for
brands to drive reach, awareness and conversion.
Speaker 4 (07:38):
There's the advertising side of the equation, there's the eyeballs.
And it was interesting that over the weekend Elon Mosk,
the CEO of X, the platform formerly known as Twitter,
gave his opinion that TikTok should not be banned in
the USA, even though such a band may benefit his
own platform X therein lies the value of it. You
(07:59):
talk to the e commerce side, But for me, the
thing we never talk about that much is fifty percent
or most of all Americans use TikTok. That is scale
that many other platforms don't have.
Speaker 5 (08:11):
Absolutely.
Speaker 7 (08:11):
I mean, it's why TikTok is now our second most
traffic channel at mickback Meta is number one. There's very
few places for you to reach all US American households,
and so to reach fifty percent of them with essentially
one ad by on TikTok is extremely powerful and per Musk,
I mean, we're talking about setting a precedent that really
(08:33):
interferes with the First Amendment, which is why at MCMAC
we believe that if things can play out, a divestiture
is most likely the best outcome for everyone. Bite Dance
might not see it that way, but in terms of
the US government, if I were them.
Speaker 1 (08:49):
I would be pushing for a divestiture.
Speaker 4 (08:52):
I don't think by Dance we would see it that way. No,
a second, guy, I actually misspoke. I said that Elon
Musk was the CEO of X. He's not Lindy acarino is.
But given the last seven days that I've had and
the number of companies that Elon Musk is CEO of,
I think the world will forgive me. Rachel tippograph of
Mick mac Thank you very much for your analysis. Now
coming up internal chaos at Tesla, where Elon Musk is
(09:16):
CEO and he's shifting his focus from a cheaper model
to the ROBOTAXI. We put a really important piece out
last night in the Bloomberg Big Take, and that's coming
up next.
Speaker 5 (09:25):
Karen, so well read brilliant reporting.
Speaker 3 (09:27):
Meanwhile, let's just dig into what was also happening on Friday.
Remember when in Video was down ten percent, it lost
woman to billion dollars in market capitalization. Today it's up,
but only one point three percent. We're actually fading some
of that rally in this big tech in a AI play.
Speaker 8 (09:42):
This is a Bloomberg Technology.
Speaker 4 (09:55):
Bloomberg big take, Tesla consumed by chaos amid CEO Elon
Musk shift of a focus from new cheaper models to
clearly a Robotaxi in Caroline. What we tried to do
is clarify what's going on. And my understanding is this
is Elon Musk. He's come back in and said, yes,
Robotaxi is the focus. A cheaper EV is not completely scrapped,
(10:17):
but it is confusing. You've read the Big Take. I
don't know. Did we give you some clarity and where
we stand you?
Speaker 3 (10:24):
Did you really just highlighted how much perhaps we've seen
a re orientation of Elon Musk back on the Tesla business,
back in demon mode for all the pros and the
cons that gives. I mean, in particular, you articulate so
well some of the negatives that have been felt by people.
Speaker 5 (10:38):
Let go at the company.
Speaker 4 (10:40):
I think one really clear thing is that loads of
executives at Tesla said Elon, please do the twenty five
thousand dollars EV do it cheap. Elon said, no, we
are doing Robotaxi, and there's a difference of philosophy. But
the cheap part is misunderstood. It's not canceled or scrapped.
It just looks different to what we thought. So a
lots to discuss.
Speaker 3 (10:58):
Yeah, the fact that basically it can be wrong. Doubt
this is a cheaper model for other purposes, a more broadly,
more wide reaching company that ultimate investors are trying to
get their hands around, and share prices reflect that. Craig Traudell,
who has been helping edit this beautiful creation that Ed
Ludlow and Anna Halla put together.
Speaker 5 (11:15):
Over this weekend.
Speaker 3 (11:16):
Craig, your key takeaway, and I think for many investors
is right now, what are the priorities?
Speaker 5 (11:22):
And that's it.
Speaker 3 (11:23):
The priority right now is Robotaxi, but for a greater good,
for a broader, cheaper offering.
Speaker 9 (11:29):
Yeah, you know, I was talking with some of our
colleagues at bn F and I think, you know the
idea that maybe what Elon may make the case to
Wall Street tomorrow is we already have a twenty five
thousand dollar car. He will be spinning when he says that.
But when you sort of take into account gas savings
and tax credits and so on and so forth. You know,
the Model three, after the price cuts of the last
(11:52):
year plus, is getting pretty darn close to that and so,
you know, I think that what we'll see from Tesla
in the months to come is this attempt to kind of,
you know, further emphasize the value that they're offering with
the Model three and the Model Y per Ed's reporting,
you know, apply some of the work that's going into
the platform that they want to use to underpin the
(12:15):
robo taxi to bring the Model three and Model Y
costs down even further. I think the real question is
whether or not that's going to cut it for Wall Street,
because they want to see some new product.
Speaker 4 (12:28):
You know, we tried to give some clarity on that.
We try to give some clarity on the layoffs. And
the way that one source put it to me is
deliveries were down twenty percent sequentially in the first quarter.
So must turn around to the other bosses and said,
if deliveries are down twenty percent, let's just cut headcount
twenty percent. Not for any reason to do with cost
saving necessarily, but this is like the Elon Musk playbook,
(12:48):
Craig right, and when you edited the Big take. I
hope that you got the sense that this is Elon
Musk pulling the strings on this.
Speaker 9 (12:56):
Yeah, you know, and it takes me back a little
bit to the Walter Isaacson biography, where you know, I
feel like the word delete was in that book, you know,
at least fifty times in terms of you know, whenever
you know Tesla or SpaceX or these various companies that
he runs, you know, run into trouble. He just comes
in and wants to cut everything and get rid of
(13:16):
everything and question why, you know, companies are doing things,
building things, Why do we need that part or component
or why are we doing this process? I think the
question is, you know, whether he's sort of cut to
the bone here, and you know, we're even sort of
seeing some questioning of whether or not he's effectively doing
that in these price cuts over the weekend, whether there
(13:37):
are going to be any earnings left in China, you know,
in terms of how far they've gone with the Model
three and the Model hy in that market.
Speaker 3 (13:45):
I mean, the key point here, Craig is we all
think about this bigger picture and then look ahead to
the micro Let's a little over twenty four hours and
we get the earnings.
Speaker 4 (13:54):
Yeah, I mean just shout out to Craig and to Donna.
In twenty four hours we will have earnings FINGO again
and we'll find out on what I would say is
probably one of the most important earning statements and calls
in Tesla's history, because investors just want some clarity on
what the strategy is. Craig, in one word or one sentence,
what are you watching for.
Speaker 9 (14:15):
Just as much hype around AI and for self driving
as we can possibly imagine. I think that's the expectation
because there aren't many other cards to play.
Speaker 3 (14:26):
Crochedel brilliant editing throughout this weekend on so much important reporting.
Speaker 5 (14:30):
Thank you.
Speaker 3 (14:31):
Let's get into those earnings and more broadly across the
tech sector.
Speaker 5 (14:34):
Megan Horneman, CIO.
Speaker 3 (14:36):
Verdant's Capital Advisors, I understand Vernin's Capital Advisors does have
some exposure to Tesla, and more broadly, have you feeling
have you felt that the market is priced in some
of the worst here for a business like Tesla, for
some of the less than magnificent magnificent seven.
Speaker 10 (14:52):
I think, from broadly speaking, I still think there's some downside,
specifically because these some of these stacks Tesla included have
been really driven by momentum. It's been a pretty big
decline that we've seen in Tesla, But the clarity's not there.
From a broadly speaking from the Magnificent seven this earning season,
they've got a lot, they have a lot to prove.
Speaker 1 (15:13):
Valuations are very elevated.
Speaker 10 (15:15):
And if we don't see this come through from an
earnings perspective, I think there's more downside and a little
bit more of evaluation correction.
Speaker 3 (15:23):
What I love about your notes your analysis, Megan, is
just how deep you go into sort of ultimately how
powerful and encompassing those Magnificent seven players have been. I'm
reading your note that in fact five with the Magnificent
seven companies, so you're talking in video, Amazon, Meta, Alphabet,
and Microsoft have expected to be the top five contributors to.
Speaker 5 (15:40):
Urin your earnings growth for the S and P.
Speaker 3 (15:42):
Basically, if they don't give us what we need, earnings
more broadly going to fall across the rest of the
S and P.
Speaker 10 (15:48):
They'll definitely be I think a lot weaker than the
anticipation right now, and the anticipation is only for about
er point five percent year of ver year earnings growth,
So there's a lot writing on these Magnificent seven. I
think that's also why you're seeing the markets. They're kind
of moving. They're up a little bit today, but moving sideways.
They're going to wait for They're waiting for earnings. They're
also waiting from an economics standpoint, the PCE that we
(16:11):
get later this week, personal income and spending.
Speaker 1 (16:14):
And then that first read on GDP for the first quarter.
Speaker 4 (16:18):
Megan good Morning is ed in San Francisco. There's a
UBS note this morning doing the rounds. A lot of
people are talking about it, and they've cut their view
on the Big six to neutral from overweight. But they're
basically saying tough comps this quarter. And I think that
they're kind of suggesting that if you go away from
the Big six or mag seven, what if you want
to call it, there is some other technology out there.
(16:39):
There are other corners of the market to play in.
Do you share that thesis?
Speaker 10 (16:44):
Yes, absolutely, And you know these stocks have had a
great run, but they have to now. As we mentioned,
the valuations are very high and people are looking for
outside of that to make money, not just in the
large cap space, but I think if you look in
the small and MiGCAP space. I think there's a little
bit more of value there. They haven't participated in this
rally in the large cap space, and if you look
(17:05):
from a long term perspective, from a valuation standpoint, they're
historically cheap versus the S and P five hundred, they're
in the same both though from an earnings perspective that
there's a lot of uncertainty around earnings in the next
couple quarters. But if you can withstand that volatility and
look longer term, these may be some opportunities in the market.
Speaker 4 (17:24):
Megan, there is quite a lot riding on earnings, I
feel like this season, and lots of people say, well,
if earnings don't deliver for us, particularly on the Big
six mag seven, then tech will fall away and the
market will go with it. We like drama on the show, okay,
but realistically, how worried are you about the stakes in
the coming weeks.
Speaker 1 (17:46):
I'm quite worried.
Speaker 10 (17:47):
We had a little bit more than a five percent
correction in the market over the past couple of weeks.
Speaker 1 (17:51):
That was not enough, in my opinion.
Speaker 10 (17:53):
To really warrant these to look at these elevated evaluations
and then also take all of these mountings that we
have from an economics standpoint, from a geopolitical standpoint, from
a federal reserve standpoint, I think there still is a
little bit too much optimism about what the Federal Reserve
can do.
Speaker 1 (18:11):
And our bigger risk here is what is inflation going
to do?
Speaker 10 (18:14):
Are we really in the midst of a reignition? I
guess you could say of inflation. If that's the case,
these stocks and these earnings expectations and these valuations are
just not sustainable.
Speaker 4 (18:26):
Megan Hornman, Vernet's Capital Advisor, is really appreciate your time
on the show.
Speaker 5 (18:37):
I'm now been talking tech.
Speaker 3 (18:38):
First up, calls are growing for a crackdown on X
in Australia after two knife attacks have occurred in Sydney
over the past ten days alone. Now, graphic content from
the stabbings as well as misinformation spread quickly as both
attacks unfolded, and that's now prompted five government ministers to
consider bringing in.
Speaker 5 (18:55):
Tougher laws for social media companies.
Speaker 3 (18:57):
Plus ten Cent shares well, they've staged big rally since December,
and now we know that China's biggest internet firm has
just nailed down an earlier then anticipated debut of its
mobile game Dungeon and Fighter Mobile. It's a marquee title
expected to refresh and aging pipeline and drawing new users,
so shares, tick tire that much more. And Japan's UNTI
Trust regulator has its eyes on Google this after it
(19:18):
says the tech giant used tactics that limited Yahoo Japan's
ability to compete in targeted search ads. Now, the watchdog
says that Google's parent Alphabet changed its conduct as soon
as they flagged the practice. That will keep on monitoring
this US firm.
Speaker 11 (19:40):
Apple's next big thing is a push into on device
large language models. Apple's been working on several major projects
for years, including home robots, foldable iPads, and augmented reality glasses,
but the biggest and most important project coming this year
is a push into generative AI. Apple's approach will be
a little bit different than the competition like Google, OpenAI
(20:03):
and Meta. Instead of powering Jenai on cloud based servers,
the functions will work on the iPhone itself, using the
on device software processors and other chips. That makes it quicker,
more secure, and Apple believes more functional and more accurate.
With iOS eighteen coming in September after being introduced in
(20:23):
June at the Worldwide Developers Conference, Apple plans to include
a slew of new AI features that will help users
in their daily lives.
Speaker 4 (20:32):
I'm Mark German. This is power on. Okay, let's get
a check in on the market and one asset I
guess we haven't to us much about is bitcoin. We
sent the headline five pm Pacific on eight point nineteen.
The halving has occurred and as such it cuts in
half the rewards. The paid to mine is twenty four
to seven. We trade in bitcoin, so we're at sixty
(20:54):
five thousand, sixty six thousand US dots partocon right now.
Where we're seeing a more pronounced, delayed suppose reaction to
the harving is in those assets that do not trade
twenty four to seven. In other words, the US traded
equities or stocks to the crypto links coinbases off its
session highs but have been up seven percent. Riot another
block chambered platform up nine percent. Some names moving to
(21:16):
the downside Marathon Digital Holdings down three point nine percent.
There was a headline on the term or Caroline that
the harving was a bit of a limp, but as
you know, I think we should be excited about it.
I think there's still a lot to discuss there.
Speaker 5 (21:29):
We're still parties virtual or in real life.
Speaker 3 (21:32):
I want to know how many of those invites you
went to ed But one person hosting one of those
halving parties was Chris Klein, Bitcoin Ira COO and co founder.
For this and so much more so, you watched it
happen when it occurred on Friday night. But now the
reality and what's interesting is, you know, maybe there are
some players miners out there now that don't get rewarded
(21:54):
as much.
Speaker 5 (21:54):
Maybe we've see an impact on the shared price.
Speaker 3 (21:56):
But ultimately this is meant to drive the increase of bitcoins.
Speaker 5 (22:00):
Will it?
Speaker 4 (22:01):
Yes?
Speaker 12 (22:02):
Absolutely, thanks for having me, and yeah, we had some
good parties last week for the having You're right, it
does punish the producers of the asset class.
Speaker 4 (22:11):
You will see.
Speaker 12 (22:12):
Salce headlines this morning that it came off with a whimper.
That's pretty typical for having events. It's usually three to
six months where you start seeing some impacts of that
supply constraint that takes place.
Speaker 4 (22:26):
Supply constraint has not yet taken place. I actually want
to focus on that for a minute, because I think
you guys had a pretty good quarter, and actually since
the start of the year, whether you are focused on
the underlying technology or you're participant in the marketplace for
crypto related assets, things have been quite cheery. Put that
(22:46):
into context for us, as everyone was bracing for the harving,
they were also doing business and carrying on with it.
Speaker 12 (22:51):
Yes, absolutely, it's kind of interesting. You expect this like
big time square event where everything changes, like the year
has turned over, and in reality it's just we've hit
another block, the next two hundred and ten thousandth block
in which it's in our code, it's in our DNA
to cut or cut the rewards and then limit that supply.
This is not happening in a vacuum either, so you've
got ets that are taking a line line's share of
(23:13):
those of these things. Right now, we have a few
billion dollars of assets clients or client assets under custody
inside of our platform, and there'll be more and more
when less and less is available, which is really in
contrast to the Almighty dollar and the way the US
dollar works today. We actually reward producers of currency every
four years with things called reelections, right.
Speaker 4 (23:34):
That I get the parallel of we have a big
part of our audience that are focused on largely the blockchain, right,
they probably don't care about any given direction of the
movement in bitcoin or or its current price. But there
is now a big market of people that does. And
many of them argue because of the finite supply, and
I'm repeating myself to audience. We always talk about this,
(23:55):
but bitcoin can only ever go up in price because
of that limited because that's actually yeah. The other story
of the first quarter was liquidity. This is quite a
liquid market, yes, where a lot of sounds. How do
we square those two?
Speaker 12 (24:07):
How do you square that with liquidity is a difficult question.
Probably bigger nerds that can handle that for you. But
don't forget the divisibility of bitcoin. It you don't trade
in one bitcoin. It goes down to the eleventh decimal point,
which is known as the satoshi. And as we get
further and further down that scarcity, you're going to start
seeing the impact where people will be, Wow, you're a
one bitcoiner, and that.
Speaker 4 (24:26):
Will be a huge deal. I think it.
Speaker 12 (24:28):
Also, you can't have this conversation about bitcoin having without
talking about inflation.
Speaker 4 (24:32):
They're very intertwined. Today.
Speaker 12 (24:33):
I was reading a study this morning Northwest Musical came out.
Average Americans think they need one and a half million
dollars in order to retire comfortably, which is.
Speaker 4 (24:41):
A pretty large number.
Speaker 12 (24:42):
However, what's really staggering is that just three years ago
the same report was at nine hundred and fifty thousand.
So in just three years, Americans feel like they need
fifty three percent more money to retire comfortably. And that's
part of why folks are looking at diversification of currency,
and bitcoin is a opportunity for that.
Speaker 3 (25:00):
But you're looking at what we're saving for our pensions
and for our retirement a little bit more. Because you've
got in your name bitcoin, IRA, you don't just offer bitcoin,
you offer us some other cryptocurrencies. But more broadly, at
the moment, this coming of an ETF was meant to
tempt in the so called boomers to get them back
into allocating to an attempted to illocate into bitcoin. But
(25:23):
what about the rest of the old coins? And how
you seeing interest pick up as we start to talk
more of an ATHTF two.
Speaker 12 (25:29):
Yeah, the ETHTF is starting to get some build up.
We should maybe expect that later this year. I don't
get excited because I waited seven years for the Bitcoin
ETF to get approved, But there are a slew of coins,
thousands of them on our platform. There's about sixty five
different coins that are available or currencies available today, and
they're all served different utilities. Ethereum is really the backbone
(25:50):
of the future of the web or Internet as we
can think of it, which is designed for smart contracts. Actually,
I wish my ten year old daughter was here. She
was on a podcast I think last week, and she
has one associations for these Bigcoin is money a theory
as contracts ripples banks, and like coin is her favorite shopping.
Speaker 4 (26:06):
I actually think that the huge body of our audience
get that they appreciate just simplifying things a little bit.
Chris Klein, Bigcoin, I ra Aco and co found. It's
great to have you on the program here in San Francisco.
Thank you. Let's talk about the entertainment industry. I chatted
(26:28):
with Kevin May, a former CEO of TikTok and former
Disney chairman, and we talked about you Guessed It, TikTok's troubles,
but also Disney's leadership, two big stories in that world
of late. He's also the co CEO of Candle Media,
which owns Coco Melon creator Moonbug Entertainment, So I had
to ask him if we should expect more coming from
the company. Smash hit children's series listen to this.
Speaker 2 (26:51):
We are planning and movies hasn't been I don't think
of officially announcement actually, but there was a movie coming up,
hopefully that will be either theatrically released or beyond on
a streaming service. I'm thinking it could be theatrically released
and that would be great. That's probably in two years
we'll have a Cocomelon movie. And you're right about licensing
and merchandising when you have the reach and depth of
engagement that we have with our properties with kids and
(27:14):
their parents. By the way, there's a huge amount of
co viewing of Cocomelon or other properties. Something like forty
percent of all views are also seen by a parent,
and we've done the work to know that for sure.
That does lend itself to developing a whole set of
licensed properties that are based on that character. Toys, t shirts,
(27:34):
soft lines, bedroom who trends, all the stuff that you'd expect.
Speaker 4 (27:38):
We're in all of it, Kevin, You've mentioned it several times.
Over the course of the conversation. I'm sure it's come
up at Jeffreys and it's a big part of your
history and your present. It's Disney. Who do you think
should be the next CEO of Disney? And I'll jump
in and ask if you'd throw your own hat into
that ring.
Speaker 2 (27:59):
Well, I have pretty busy I have a tech funder
that i've I've that i'm working that, I'm working with them,
a co founder of I have Candle Media, I'm doing
some other stuff. And Disney has a very very solid
set of leaders below Bob, so there they have a
great bench. They have people that have been there a
long time that really understand the Disney culture, that just
(28:20):
be value and prominence and dynamism of brands. And I
think most likely they'll go internal and fine, and they
have candidates that I think are are wonderful. So that's
where I think it's going to go.
Speaker 4 (28:30):
And my hat.
Speaker 2 (28:31):
I have not tossed my hat in the ring actually,
so you know I'm doing my thing at this point.
Speaker 4 (28:36):
There are many streaming platforms to choose from. You kind
of summed it there. One of the names you didn't mention,
for example, was Paramount Plus and then and Peacock is
one that I think about a lot. Is there a
world in which all of these survive independently or do
you see some consolidation? And I know you must get
(28:57):
asked that all the time by the financial press, or
find mental networks like ours, But again I point to
the idea, you're sat on the other side of the table,
the content creator, and you've got some power and interest
in where it's distributed.
Speaker 2 (29:11):
Like I don't, I can't. I don't know what the
future of Paramount Plus and Peacock are. Obviously I don't
have a crystal ball. I do think that there's a
scale issue with them. I do believe not every single
studio can have an associated streaming service that has the
same prospects as a Disney or as a Max or
as a Netflix or Amazon for that matter, And I
(29:32):
left those out, but that's obviously even a huge player
as as Apple TV plus. I do think consolidation is inevitable.
You know that is just natural economics one on one
and an industry start off and everything's about growth and
cost of capital was very inexpensive back when Netflix started
the ball rolling, I think that there was very free
(29:53):
access to capital and a lot of patients by on
behalf of investors. And I think as the industry is mature,
and as you're starting to kind of trade more household
and as natural growth starts to level off, always consolidation
happens and people then you have to start focusing on
costs and cost synergies, and the synergy is inherent and
possibly and mergers and the like. And I think that
(30:13):
is a natural course for any any growth sector to
evolve into. And I think that's what you're saying in streaming.
It will happen there too.
Speaker 4 (30:22):
Kevin, I'm pushing my luck here. I'm being told we
got to go. But I would be remiss if I
didn't ask you about TikTok, just your assessment, having been
inside and now on the outside, of what you think
will happen. I know you don't have a crystal ball,
but you know the political will is to divestiture of
US ops, and TikTok seems to think that domiciling US
(30:42):
user data in US based servers is the answer. It's
hard for me to call.
Speaker 2 (30:49):
I haven't been in TikTok for several years now, so
I'm just observing it the way everyone else is observing
it at this point, I will say this about TikTok.
It's a great team. It's an independent company, although it Chinese,
it is not, you know, as far as I know,
run by the government in China or anything else. I
don't know. I'm not familiar with all the different security
concerns that our government may or may not have. But
(31:11):
I do know that the folks that the folks that
I dealt with at TikTok or high quality people. The
product is obviously super impressive and engaging and has taken
over larger parts of the media and social media landscapes already.
I don't know what's going to happen. It does seem
to be bipartisan, more so than most issues these days,
(31:34):
so it's going to be interesting. I hope that I
hope the right thing happens there.
Speaker 4 (31:39):
That was Candle Media co CEO Kevin Mayer Caroline.
Speaker 3 (31:43):
What a wide ranging conversation, brilliant ed. Meanwhile, though, look,
we've got to switch gears because it's Earth Day.
Speaker 5 (31:48):
Happy Earth Day.
Speaker 3 (31:49):
Let's take this opportunity to look at the latest world
of climate tech. In bench Capital, I'm very pleased to
bring in sim Capital founder and managing partner Sita Chandremon
Class three on today's vcpol sustainability as a service?
Speaker 5 (32:03):
What is that?
Speaker 3 (32:03):
That as your ethos, that is your underpinning. What does
sustainability as a service look like?
Speaker 5 (32:08):
It's a great question.
Speaker 13 (32:09):
I think I'd probably first dissect the question around sustainability
because there's so much public rhetoric right now on what
it actually means. So we are trying to tackle how
do we produce more or the same with less? And
there's new technologies that are trying to combat this. But
the way that we think about it is like, how
can we invest in consumption infrastructure, in the picks and shovels,
(32:31):
in supply chain software, in new data platforms that really
allows us to be much more sustainable in an economic way.
So that's sort of why we landed on this coined term,
if you will, the new SaaS or sustainability as a service.
Speaker 3 (32:44):
You've been raising money and for as someone who's leading
it as GP, still a lot of money from the
fund to allocate, So tell me fifty million where the
priorities to be putting money to you? Where you can
make the most impact from how I basically interact with
the climate as a capital It's.
Speaker 5 (33:00):
A great question.
Speaker 13 (33:01):
I you know, we're still investing out of our first fund,
but we're actually really focused on our second fund right now.
Speaker 5 (33:07):
And the ethos has been happening is that second fund.
Speaker 13 (33:10):
Our second fund target is eighty And you know, the
thing that I think a lot of consumers struggle with
is like, how can you really capitalize on your individual
purchases or your activities if you will. And one of
the things we always come back to is that sustainable
solutions are not really long term sustainable if they're not
(33:30):
cost effective and if they don't really if they don't
really inhibit the consumer's life that drastically on a day
to day because at the end of the day, I mean,
we're sitting in a Bloomberg office. We live in a
capitalist society, so we need to focus on investments, and
we need to focus on solutions that don't totally change
the way that we behave at least not so drastically.
Speaker 5 (33:49):
I'm going to kind of a flight still for example, exactly.
Speaker 13 (33:52):
And it's a lot of the times as an investor,
we're thinking about how do we evaluate businesses that are
a lot more practical, that aren't necessarily from the echo
chambers of you need to be net zero tomorrow. So
that's really where we're sort of leaning our biases these days.
Speaker 4 (34:08):
CITA. We've done a lot of reporting on the program
about funds new funds that are focused on manufacturing industrial funds,
but they have the same thesis, just very specifically, what's
the opportunity for you. Is it on something tangible hardware
or are you also looking at software application as well.
Speaker 13 (34:28):
We're definitely looking across both areas, but our personal biases
towards the latter, I mean, to be very frank, the
genesis of the fund really started because we felt like, wow,
there was a lot of capital being deployed into the
broad climate crisis or the sustainability transition. From a sheer
volume standpoint, the vast majority of this capital was going
into hard assets, long duration if you will, slightly risk
(34:52):
your bets. And while that's a super noble ambition, if
you will, and I'm so happy to know funding is
out there for those initiatives, at the end of the day,
this transition is not going to happen just because we
have these decade defining technologies. We also need the picks
and shovels. Sort of the point I was making earlier
around really software that will actually connect the dots between
(35:15):
the new technologies that exist and the end user, be
it the consumer businesses. So we have a strong bias
towards really investing in these slightly more scalable, slightly more
asset light, much more software focused opportunities.
Speaker 4 (35:28):
What is the pitch then to LPs very quickly, just
how do you sell it to them?
Speaker 13 (35:32):
The vision I'm probably I'm probably going to say away
from that, just because we know we try to keep
those conversations in private, but also more so, it really
depends on what your perspective is on the transition. But
our stance is very much that you know, over our lifetime,
one of the greatest transitions, or one of the greatest problems,
(35:54):
if you will, is this sustainability transition. But as a
function of that, it's also one of the greatest wealth
creation opportunit unities, and we need to be able to
find ways in which we can invest in that transition
in a much more asset light way, in a way
that is a little bit more tangible. Sort of to
go back to her thesis a little bit, or to
answer Caroline's first question as well around consumers. You know,
(36:16):
in the US where we sit, and this is also
pretty akin to a lot of developed countries, the biggest
shareholder of the economy or the biggest stakeholders or consumers,
we hold over seventy percent of the GDP so on aggregate.
This is a massive moving power mechanism and consumers. If
we're forced to change every facet of our lives, what
we do, how we spend our time, how we move,
(36:38):
it forces businesses to also change the way they do business.
And that really is the essence of how we think
about the space.
Speaker 3 (36:44):
I'm talking about, how you move, That's why you're in
companies like Cowboy, Tomorrow Farms, How we eat, how we consume?
Speaker 5 (36:49):
Sime Capital, founder and managing Ponda. Great to have you
with us. Thank you so much, Seeta s Tremun classroy Ed.
Speaker 4 (36:55):
If you got coming up another big story and they
keep coming. Salesforce talks with Informatica fizzle out. In fact,
there ain't no talks at all. We'll talk about those
details next. This is Bloomberg Technology Data management company. Informatica
(37:25):
said it's not engaged in takeover talks following reports that
discussions with sales Force had call let's get the analysis
with Anna rag Rana of Bloomberg Intelligence. So that was
the chronology, right. Bloomberger reported there were talks. Then Bloomberger
reported that they had called specifically over price. It's the
sticking point. And now Informatica has been forced I guess
(37:46):
to come out and say no talks, but I don't
think many people really understood the deal anyway, Ana rag Yeah,
I don't know.
Speaker 14 (37:53):
We are happy that there's no deal for salesforce sake.
I mean, Informatica is not growing at that seam readers salesforces,
and you know, we're happy with the way what Salesforce
has down over the last twelve to twenty four months,
stayed away from deals, focused on margins, focus on organic
growth rate, and I hope for their sake they stick
to that at least for the near term, because as
(38:13):
as you remember, this was the biggest criticism for Salesforce
for several years, that they move into slightly profitable territory
and then they'll go out and buy something big and
then you know, shareholders don't get the benefit of the
leverage that comes from a SaaS model.
Speaker 5 (38:27):
To that end.
Speaker 3 (38:28):
Well, this was going to be the biggest deal since
all the way back to Slack being bought for twenty.
Speaker 5 (38:33):
Seven billion dollars.
Speaker 3 (38:35):
I'm interested there for what is it that they just
wanted to add and what would you like them to
add organically if not inorganically.
Speaker 4 (38:43):
Yeah.
Speaker 14 (38:43):
See, one of the things is Salesforce has no shortage
of i would say opportunities in the long run. They
have a massive customer base on sales, automation and customer
service a lot of that. What they have to do
is make sure these products work well. Now, when they
were looking at buying Informatica, they actually bought a company
called Mutsoft a few years ago that does some stuff
(39:03):
that's very similar to Informatica. Informatica is slightly larger than
mule Soft when it comes to that. But honestly, they
just reported Salesforce reported that MuleSoft grew twenty two percent
the last time we had their numbers. That's a massive
growth rate for a company internally what they're doing on
data management. Informatica, on the other hand, if you look
at Consensus is growing at six seven percent. So from
(39:26):
our side, I was surprised that they are even you know,
considering at this point, given all the opportunities they have
organically and.
Speaker 3 (39:34):
RAG so great to always get your perspective and why
perhaps you like the idea that EM and A isn't
going thick and fast over over at CRM and Ran
Ran and we thank you.
Speaker 5 (39:42):
Bloomberg Intelligence, all.
Speaker 3 (39:43):
Things Salesforce, all things well, busy, busy Monday day. We're
talking TikTok, We're talking legal regulatorations, We're talking your big Take,
which is a mastery.
Speaker 4 (39:52):
To d Yeah, and it's all happening at once. I
think it's gonna be a massive week, you know, earning
start in Earnest Tesla massive obviously with the show, it
was an important way to start the week. So recap
on the podcast. Really grateful. So many of you are
listening to the show as a podcast and your way
to work your way home wherever you are in the world.
You can get it on Apples, Spotify, and iHeart. We
do have a big week, So from New York City
(40:13):
and San Francisco join us for the next four days.
This is Bloomberg Technology
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