Speaker 1: This is Bloomberg Business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news as it happens. Bloomberg
Speaker 1: Business Week with Carol Messier and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. Geopolitical tensions were the story
Speaker 1: of this past week, with Russia's invasion of Ukraine now
Speaker 1: a full scale war, the death toll rising on both sides,
Speaker 1: and the financial fallout rippling through the global economy. That's
Speaker 1: the subject of our cover story, and we're gonna get
Speaker 1: to that in just a moment and a riveting and
Speaker 1: stirring cover image as well. We will also hear from
Speaker 1: the CEOs of Hewlett Packard Enterprise and app Harvest on
Speaker 1: earnings and the head of Plug Power on how Russia's
Speaker 1: war in Ukraine is affecting the supply of key raw materials,
Speaker 1: plus the return of the so called razor blade trade
Speaker 1: on Wall Street. All of that to come. We begin, though,
Speaker 1: with a special report on the war in Ukraine the
Speaker 1: magazine with a deep dive into the tactic of using
Speaker 1: fine dance as a weapon. Bloomberg News Financial Investigation senior
Speaker 1: writer Stephanie Baker part of the team covering all the
Speaker 1: battle raging on Russia's financial front. She joins us from London, Stephanie,
Speaker 1: take us inside the issue here and your personal experience
Speaker 1: watching this in full over the last few years. Right,
Speaker 1: so Um, I went to Ukraine three times in twenty
Speaker 1: nineteen reporting on the whole controversy surrounding Rudy Giuliani, the
Speaker 1: former New York mayor UM and his efforts on behalf
Speaker 1: of Donald Trump, UM to pressure Ukrainian officials into announcing
Speaker 1: an investigation into Joe Biden and his son in Ukraine.
Speaker 1: So and I had gone and done reporting on Paul
Speaker 1: Manafort and his work in Ukraine prior to that. I've
Speaker 1: lived in Russia for a few years and interviewed and
Speaker 1: profiled some of these oligarchs that are now being sanctioned.
Speaker 1: So Um, you know this is this struck me as
Speaker 1: end of an era. This thirty year period after the
Speaker 1: collapse of the Soviet Union, the fall of the Berlin Wall,
Speaker 1: the opening up of Eastern Europe and Russia to the
Speaker 1: global economy. Inward investment from from Western companies building up
Speaker 1: and it just struck me as this is the end
Speaker 1: of that era. Um. Russia is completely isolated. It has
Speaker 1: now been declared a pariah state, and it's hard to
Speaker 1: see how it comes back, um unless Putin is removed
Speaker 1: from the picture. Well, let's let's talk a little bit
Speaker 1: about that, because we have covered through throughout the week
Speaker 1: all the different companies that have ceased operations in Russia
Speaker 1: or put them on pause, or pulled out of Russia completely.
Speaker 1: But for this piece, you spoke to Bill Browder, who
Speaker 1: many of our audiences is familiar with, perhaps having read
Speaker 1: his book or followed his career over the last few decades. UM.
Speaker 1: He says, the key to cutting off Putin at his
Speaker 1: Achilles heel is the olive our talk about that a
Speaker 1: little bit, right. Yeah, I've known Bill ever since I
Speaker 1: was a reporter in Moscow in the nineties. So UM,
Speaker 1: and have you know charted how he was banned by
Speaker 1: uh Putin from entering Russia when he was once the
Speaker 1: biggest portfolio investor in the country. Um. And you know
Speaker 1: his argument is the way to um hit Putin where
Speaker 1: it hurts is to sanction the oligarchs um, some of
Speaker 1: whom he believes are close to Putin and hold his wealth. Uh.
Speaker 1: You know, Putin has amassed wealth. We don't know the
Speaker 1: full extent of it. We believe the intelligence agencies know
Speaker 1: much more, um. And you know, the way to make
Speaker 1: him feel the pain is to isolate Russia and the
Speaker 1: oligarchs UM from every angle, to make him realize that
Speaker 1: the cost of this war is too great to continue.
Speaker 1: Stephanie spent party career in Russia. You also witnessed the
Speaker 1: collapse of the Soviet Union when you were in Prague
Speaker 1: in in n when you had just graduated from from college.
Speaker 1: I'm wondering where the Russian people fall into this, Not
Speaker 1: the oligarchs, but everyday Russians who have seen their currency collapse,
Speaker 1: who are no longer able to get products from Western
Speaker 1: companies that have announced that they will stop selling those
Speaker 1: products there, who perhaps will have their travel industry absolutely
Speaker 1: crippled as Boeing and Airbus refused to service planes that
Speaker 1: are on Russian airlines. Do they have any power in
Speaker 1: bringing an end to Putin? I'm so glad you asked that,
Speaker 1: because it's an absolutely crucial question. Uh. The problem is
Speaker 1: that Putin has shut down independent sources of information. For instance, Um,
Speaker 1: there was a famous radio station called Echo Muskui, which
Speaker 1: he has just closed down. Um. And there's I think
Speaker 1: there's one surviving independent newspaper. He controls the television station,
Speaker 1: and he's still calling this a special operation and not
Speaker 1: a war. So there is an incredible degree of propaganda
Speaker 1: reminiscent of the Soviet Union happening right now that it's
Speaker 1: very hard to see how Russians can rise up or
Speaker 1: understand what's really going on until, of course, some of
Speaker 1: the casualties become clear. And it was extreme, very very
Speaker 1: significant that Russia announced at almost five soldiers had died.
Speaker 1: They don't generally do that, and for Russia to admit
Speaker 1: that is a huge, huge deal. UM. So when that
Speaker 1: starts to filter through to the Russian population, you could
Speaker 1: see some movement, but the price of protesting, either posting
Speaker 1: things online or going out onto the streets to protest,
Speaker 1: is incredibly high. Um. And I think it's it's sad
Speaker 1: that not only on that level, that the level of
Speaker 1: protest is so difficult, but there are tons of Russians
Speaker 1: and I know many of them who are just ordinary
Speaker 1: Russians of all levels working for normal companies, Russian companies,
Speaker 1: just trying to do their best, trying to you know,
Speaker 1: do business in UH an efficient and a westernized way,
Speaker 1: and that has all been destroyed. All that work building
Speaker 1: up UH these companies over the past thirty years has
Speaker 1: been destroyed and it will be very hard to recover. Well,
Speaker 1: it is a must read, and we really appreciate your time,
Speaker 1: and we know what's been a really busy week. Um, Stephanie,
Speaker 1: thank you so much. Are thanks to Bloomberg News Financial
Speaker 1: Investigation Senior writer Stephanie Baker and her work included in
Speaker 1: a special report in this week's issue on the war
Speaker 1: in Ukraine. It is the global cover story. Coming up,
Speaker 1: we're gonna turn our attention to the world of tech
Speaker 1: and a big quarterly earnings, a big beat for the
Speaker 1: team at HP Enterprize. We're gonna check in with the
Speaker 1: company's CEO, Antonio Nary. That is next. This is Bloomberg.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovik from Bloomberg Radio. Earlier this week,
Speaker 1: cland Packard Enterprise boosted and suggested earnings per share forecast
Speaker 1: for the full year. After the company released first quarter
Speaker 1: earnings that blue past analyst estimates, shares of HP rose
Speaker 1: the most nearly two years on Wednesday, after also exceeding
Speaker 1: expectations on gross margin. This despite a tough supply chain environment.
Speaker 1: The president's CEO, Antonio Nary, joined me and Bloomberg News
Speaker 1: Cross asset reporter Katie Graveveld to talk about how his
Speaker 1: team did it. This is driven by customer of the month,
Speaker 1: is driven by our strategy, anything with the customers, and
Speaker 1: honestly a great expecution team because obviously we are balancing
Speaker 1: the revenue and the profitability of the business. Well, I
Speaker 1: want to dig into that demand a little bit more
Speaker 1: because what stuck out to me was that you had
Speaker 1: a growth in orders, which was your third consecutive quarter
Speaker 1: of at least increase. Breakdown that demand a little bit more.
Speaker 1: Where is it coming from? What's driving that? That's actually
Speaker 1: exactly right. So this is the third consecutive quarter of
Speaker 1: twenty plus percent or the growth, and it was across
Speaker 1: all businesses. You know, our compute business, with obviously people
Speaker 1: believe is commoditized um you know, grow our edge business,
Speaker 1: which is all about secure connectivity with a subscription model
Speaker 1: grew an excess of our storage business including data services
Speaker 1: grew an excess of fift and even our high performance
Speaker 1: computing an AI business grew and excess of I will
Speaker 1: say the shining star though, is we bring it all
Speaker 1: together in a platform which we call it HPI Green Lake,
Speaker 1: which you can consumers. A service grew a hundred and
Speaker 1: thirty six percent year of the year, So it's across
Speaker 1: all businesses. But the momentum we have is because we're
Speaker 1: bringing all our solutions in an integrated, unified experience under
Speaker 1: Hi Green like Umbrella. A journio we learned on the
Speaker 1: call yesterday you said that supply and logistics challenges they
Speaker 1: may last through two. It's it's somewhat different than from
Speaker 1: some of the companies we've heard from thus far in
Speaker 1: recent weeks as they've reported earnings. Are you just being conservative?
Speaker 1: What's going to improve first here? Is it going to
Speaker 1: be logistics challenges or is it going to be chip
Speaker 1: components and availability here? Well, my message has been consistent
Speaker 1: enough for several quarters, always said that this supply chain
Speaker 1: and logistics overload situation will continue well into physically or two,
Speaker 1: and we still see it that way, the majority of
Speaker 1: the challenges actually are in what are called low level
Speaker 1: components and not on the high value commodities. And think
Speaker 1: think about it now, stuff that people don't think about,
Speaker 1: a voltage, regulators, capacitors, things that you need to build
Speaker 1: a system at the low level before you can build
Speaker 1: actually the full integrated system. And that has to do
Speaker 1: with the with the fact that the demand is very
Speaker 1: strong and the availability of substrates particularly you know, these
Speaker 1: components are what we call in the old generation of
Speaker 1: technologies like twenty eight meters and stuff, and a lot
Speaker 1: of the fabrication has moved to the newer technologies like
Speaker 1: fourteen and below. So I think, um, you know, the
Speaker 1: supplier of the substrate got called a little bit in
Speaker 1: between because of the huge demand that they are seeing
Speaker 1: and now they need to catch up. And this takes
Speaker 1: time because when you start bringing new capacity is complicated
Speaker 1: systems processes. And we said all along will take well
Speaker 1: under twenty At the end of two however, I will
Speaker 1: say we have never seen any noticeable customer cancelation, which
Speaker 1: again give us the confidence. The demand is there is
Speaker 1: very robust, and it's also driven by the data explosion.
Speaker 1: We see around us above in a personal life and
Speaker 1: in a in a business side well, and even with
Speaker 1: those supply chain and those logistical challenge is you did
Speaker 1: see gross margin increased by thirty or rather gross margin.
Speaker 1: And what I'm curious about is whether that's sustainable. Yes, absolutely,
Speaker 1: it is sustainable, and I think he points to the
Speaker 1: quality of earnings of how we're driving our company forward. Obviously,
Speaker 1: we are driving higher mix of software and services. If
Speaker 1: you look at one particular slide, our CFO Tirek Robiety
Speaker 1: showed the yesterday and commented on it was the fact
Speaker 1: that our green Lake offer drives more software in services
Speaker 1: in fact now is almost two thirds of the offer
Speaker 1: that drives higher gross margins, higher gross operating margins. Obviously,
Speaker 1: the edge business comes with higher gross margins too, also
Speaker 1: because it's driven by a subscription model to software before
Speaker 1: you actually deploy some sort of port and access point
Speaker 1: or or a switching point. So all of that comes
Speaker 1: with higher margin. And remember that we were one of
Speaker 1: the first through the pandemic at the beginning of the
Speaker 1: pandemic to enact what we call our real locational resources
Speaker 1: in through the future areas of growth. That's also paying
Speaker 1: off for us. So the margin are sustainable, and I
Speaker 1: will say really proud of what the team had done
Speaker 1: managing prioritization of orders and margins. And listen, if you
Speaker 1: look at a compute business again in the market is
Speaker 1: being seen as a commoditized business. The operative margins of
Speaker 1: the business was thirteen point eight percent. There is no
Speaker 1: vendor out there and drive the level of profitability in
Speaker 1: a commoditized business. And Antonio, let's talk a little bit
Speaker 1: about intelligent and share because you are going head to
Speaker 1: head with Cisco, but clearly you're growing in this area.
Speaker 1: And I'm curious whether that's a function of you taking
Speaker 1: market share, whether the pie is just getting bigger. Well,
Speaker 1: we've definitely taking market share. Um. At the same time,
Speaker 1: the own ramp to digitize your business is through connectivity.
Speaker 1: You know, we called the edge the next frontier and
Speaker 1: the edges where we live and work. Um. You know,
Speaker 1: that's where the vast majority of the data is created,
Speaker 1: not in a in a cloud of sorts, but really
Speaker 1: what the action is and that first step is to
Speaker 1: be connected in One of the concerns I have, while
Speaker 1: this is all good, is the fact that connectivity is
Speaker 1: an essential service, not different than water and electricity, and
Speaker 1: and that's why it's important as we go forward and
Speaker 1: we deployed this new massive distributed enterprise and this new
Speaker 1: way of working, connectivity needs to be available everywhere. So
Speaker 1: we are taking share, we are creating new opportunities. But
Speaker 1: we have a differentiated strategy is called a Ruba Age
Speaker 1: Services Platform as a part of each pigree lake in
Speaker 1: that cloud oriented approach. In a mobile first approach, you
Speaker 1: can procure, provision and manage any aspect of your connectivity,
Speaker 1: whether it's a Wi Fi connectivity, whether it's a land
Speaker 1: port connectivity or a one connectivity. Remember that a lot
Speaker 1: of the old systems, you know, whether it's a data center,
Speaker 1: campus and branch, we are connected through fixed networks. As
Speaker 1: more and more cloud native applications, particularly your phone gets developed,
Speaker 1: the traffic gets routed through the Internet and the refore
Speaker 1: you have to connect these millions of endpoints in a
Speaker 1: very sustainable way. And HP Aruba Services Platform provide that
Speaker 1: integrated experience for our customers in a subscription model, and
Speaker 1: that's why we're growing so so fast. That was President
Speaker 1: and CEO of Hewlett Packard Enterprise, Antonio Neary. He spoke
Speaker 1: with me and my Bloomberg Quick Take co host Katie
Speaker 1: Greifeld still ahead on Bloomberg Business Week the so called
Speaker 1: razor blade trade. It is back on Wall Street and
Speaker 1: retail investors are leading the way. We'll explain. This is
Speaker 1: Bloomberg Broadcasting from the financial capital of the world, Bloomberg
Speaker 1: eleven Frio in New York to Washington, d C. Bloomberg
Speaker 1: to Boston, Bloomberg one oh six one to San Francisco,
Speaker 1: Bloomberg nine sixty to the country Sirius XM Chado one
Speaker 1: nine team and around the globe the Bloomberg Business app
Speaker 1: and Bloomberg Radio dot Com. This is Bloomberg Business Week. Well,
Speaker 1: this story was among our most read on the Bloomberg
Speaker 1: terminal this past week. Tim it was also a Bloomberg
Speaker 1: Big Take. It was one of the stories that you
Speaker 1: know had to be on your radar, and you can
Speaker 1: find it, of course, also in this week's Finance section
Speaker 1: of Bloomberg Business Week magazine. It's about Wall streets risky
Speaker 1: razor blade trade making a comeback and everyday investors piling
Speaker 1: into exchange traded funds ETFs of course that make it
Speaker 1: easy to use leverage or short the market, and that
Speaker 1: could pose a major problem for lower level traders. Now
Speaker 1: to understand why we caught up with Bloomberg News Cross
Speaker 1: Asset reporter Deniza say Kova and Bloomberg Business Week editor
Speaker 1: Jill Weber. Many retail investors don't really know what they're getting.
Speaker 1: It just sound. It sounds like something that maybe they
Speaker 1: want some exposure to UM. Maybe maybe it promises a
Speaker 1: quick buck uh and and oftentimes that can happen and successfully,
Speaker 1: but the downside is also always a risk of So
Speaker 1: Denita walk us through why we should be caring about
Speaker 1: this and and and reasonably a trade right now? Yeah,
Speaker 1: of course. So, first, I've seen a really historic boom
Speaker 1: in those products. We're talking in terms of total assets,
Speaker 1: in terms of volumes UM. Just as an example for
Speaker 1: total assets, we've seen a fifty five percent growth just
Speaker 1: over a year UM in the US. This of course
Speaker 1: comes as retail traders UM have been entering market more
Speaker 1: and more as voltity has been rising. And some people
Speaker 1: actually say that Vomageddon, which happened in two thousand eighteen
Speaker 1: with one volatility product, was kind of an infliction point
Speaker 1: and a lot of people heard about those products and
Speaker 1: instead of being concious about it, they're like, maybe we
Speaker 1: should give it a try. Um. So definitely retail traders
Speaker 1: love them. They offer big returns quickly, but um, as
Speaker 1: we talk in article, they may be offering big losses
Speaker 1: as well if you don't use them carefully. But in
Speaker 1: terms of regulation UM and experts, a lot of people
Speaker 1: worn about the risk of those products, first because they're
Speaker 1: very complex. A second, they're like very sophisticated vehicles that
Speaker 1: rely on day trading and timing the market, which is
Speaker 1: such a difficult thing. So obviously a lot of people
Speaker 1: are failing at that and in the carry costs, which
Speaker 1: can obviously just either way at everything. So there's some
Speaker 1: interesting tickers and et f s in this space. What
Speaker 1: are some of the biggest, and especially in the era
Speaker 1: of the meme trader, which one is kind of grew
Speaker 1: in popularity the most. Yeah, the biggest one for sure
Speaker 1: are those who bet against the navdack or the performance
Speaker 1: of the navtack, so sqq and q q q uh.
Speaker 1: These are for sure the biggest one in terms of
Speaker 1: trade trade volume and assets. But for example, interesting one
Speaker 1: is uv x y UM that's a very popular one
Speaker 1: that's also a votility product. So these are kind of
Speaker 1: the most popular one. For example, um our interviewee, she
Speaker 1: bets on small caps. She uses the t c A,
Speaker 1: which is against three times the inverse performance of the
Speaker 1: Russell two thousands. So pretty much you can bet against
Speaker 1: any index UM and you can have a lot of leverage.
Speaker 1: In the US it's only two or three times, but
Speaker 1: in other places of the world you can get up
Speaker 1: to five and even twenty. In that case, yeah, well, uh,
Speaker 1: look good when it goes up or or or you
Speaker 1: know your way on the right side of the bat
Speaker 1: right exactly, uh, DANITZA. Who who are using these products
Speaker 1: and who should be using these products? What our experts say? Yeah, well,
Speaker 1: retail traders are definitely using them a lots like we
Speaker 1: have JP Morgan data showing that the mong ts this
Speaker 1: is UM their most popular choice. As as I said,
Speaker 1: UM big returns really fast, so that's kind of very tempting.
Speaker 1: But in terms of who should be using them, when
Speaker 1: we go to those big providers, whether pre shares or other,
Speaker 1: they all say they're very for very sophisticated investors. They've
Speaker 1: been on the market for a very long time and
Speaker 1: they should know how to use them, um, etcetera. Etcetera.
Speaker 1: But even the sec when they look at their products,
Speaker 1: they say they pose risk even for those investors because
Speaker 1: it's just such a big bet on the market that
Speaker 1: even if you're a sophisticated investor, you can get it wrong.
Speaker 1: All right, So how likely is it that we get
Speaker 1: it wrong and this could lead to some kind of
Speaker 1: financial crisis? Well, what do people think? It really depends
Speaker 1: on on the product. Like with votility, Obviously this this
Speaker 1: is caused system wide risk with betting on an index UM.
Speaker 1: I guess the chances of kind of UH causing a
Speaker 1: system wide risk UM is very small. But if you
Speaker 1: can imagine just the basic number of how many active
Speaker 1: majors UM do better than passive index and I don't
Speaker 1: know what's the number, Maybe just imagine that type of
Speaker 1: leverage three times and getting it right. So the chances
Speaker 1: of being wrong, at least from my reporting, seems to
Speaker 1: be maybe higher than the chances of getting it right.
Speaker 1: That was Bloomberg News cross asset reporter Deniza Skova and
Speaker 1: the editor of Bloomberg Business Week magazine, Jill Webber. You're
Speaker 1: listening to Bloomberg business Week. Coming up next, we're talking
Speaker 1: about app harvest The company has seen at stock and
Speaker 1: steady decline since going public via Spack merger thirteen months ago,
Speaker 1: and yet the company's physical expansion continues on just a
Speaker 1: massive scale. They're definitely thinking longer term. CEO Jonathan Webb
Speaker 1: talks about building his product pipeline and the key innovations
Speaker 1: helping the company overcome the challenges of climate change, which
Speaker 1: was also, as we know courtesy that u N report
Speaker 1: this week, very much in the news. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovich from Bloomberg Radio. Shows of
Speaker 1: the high tech greenhouse and vertical farm company app Harvest
Speaker 1: have not performed well since hitting the public markets. Just
Speaker 1: last February, fourth ward earnings released. Last week's showed adjusted
Speaker 1: EPs with a bigger loss than forecast. Still, app Harvest
Speaker 1: is committed to expanding its footprint and building a product
Speaker 1: pipeline that's tailor made for a future fraud with climate uncertainty,
Speaker 1: And to be fair, we did see the stock jump
Speaker 1: on those earnings results, but certainly it's still way off
Speaker 1: its highs. For look at the business and outlook, we
Speaker 1: caught up with app Harvest founder and CEO Jonathan Webb.
Speaker 1: He maintains the future it is bright as his team
Speaker 1: ramps up in two. We're quadrupling our farm network, diversifying
Speaker 1: crops so we we we had app Harvest are growing
Speaker 1: UH fruits and vegetables in a controlled environment, focused on
Speaker 1: year round production here in the US. Our first facility
Speaker 1: here in more at Kentucky is is growing tomatoes, which
Speaker 1: we were targeting a lot of a lot of the
Speaker 1: imports coming in from south of the border. And then
Speaker 1: later this year we'll be growing leafy green salad, greens,
Speaker 1: strawberries in more variety of tomatoes. So opening more farms,
Speaker 1: getting more crops to market UH and focused on getting
Speaker 1: good quality out to grocers all up and down the
Speaker 1: East Coast and Midwest and southeast. Hey, what does it mean, Jonathan,
Speaker 1: for your growth trajectory in terms of I'm pulling up
Speaker 1: the f a function on the Bloomberg. UH So looking
Speaker 1: at you know, revenue growth, it looks pretty dynamic when
Speaker 1: you look at two or three um like more than
Speaker 1: three year over year growth or year over year growth.
Speaker 1: But give us some idea of the ramp up with this, Yeah,
Speaker 1: so we we've been under construction. UH really really proud
Speaker 1: of our construction team building some of the largest c
Speaker 1: e A facilities in the world in the middle of
Speaker 1: a global pandemic. What does that mean? What does that mean?
Speaker 1: That designation? Uh, Controlled environment agriculture. So you know, I
Speaker 1: try to say the third wave of sustainability twenty years
Speaker 1: ago was renewable energy, ten years ago it was electric vehicles.
Speaker 1: And today, you know, you'll continue to hear the term
Speaker 1: c e A controlled environment agriculture using technology to grow
Speaker 1: fruits and vegetables a year round, uh, not having to
Speaker 1: worry about climate disruption, using far less land, far less water. Um.
Speaker 1: But building those facilities in the middle of of of
Speaker 1: a global pandemic and the supply chain issues is has
Speaker 1: been something our team has been able to navigate. And
Speaker 1: we'll be bringing those facilities online later this year, which
Speaker 1: is which is gonna dramatically increase our our production across
Speaker 1: multiple crop types. So when we see numbers like I
Speaker 1: say on the on the Bloomberg that talks about you know,
Speaker 1: more than revenue growth from that's pretty realistic. Yeah, yeah,
Speaker 1: certainly that more could be even more. UM. Look forward
Speaker 1: to seeing what the back half the year. Hold, but
Speaker 1: uh yeah, we we we uh were pretty bullish and
Speaker 1: optimistic on on where we're headed. And last year was
Speaker 1: our first year of operations, so we had uh no no, no,
Speaker 1: no operating history. Prior we were in over a thousand
Speaker 1: grocery stores from Kroger, Walmart, Costco, Publics. And the reality
Speaker 1: is the grocer demand and the demand from the consumer side,
Speaker 1: you know, well exceeds supply in the US. You have
Speaker 1: this growing demand for control environment. Product quality is much better,
Speaker 1: you don't have the harsh chemicals, uh, much better labor practices,
Speaker 1: you have reliability of crop that you don't have to
Speaker 1: worry about in an open field, and you don't have
Speaker 1: the import issues. Uh. And and you know, we built
Speaker 1: the company with good E. S. G principles as our foundation.
Speaker 1: And and but ultimately the demand from the grocers is
Speaker 1: what's going to drive this industry forward. Well, what are
Speaker 1: shareholders missing here right now? What are investors missing right now?
Speaker 1: Because we we we do have to talk about the
Speaker 1: stock price down significantly from highs last year in UH
Speaker 1: was trading around four back in March of one. Now
Speaker 1: it's at three dollars and fifty three cents roughly. Um,
Speaker 1: what are they missing when it comes to the opp
Speaker 1: harvest story. Yeah, I'm focused on building and growing the company.
Speaker 1: I mean the stock I think when near to forty
Speaker 1: five dollars last year and down to three bucks. I
Speaker 1: mean you all learn the public markets and and probably
Speaker 1: know that better than me. But uh, you know, we
Speaker 1: certainly got caught up in the in the spack craze
Speaker 1: with the downward pressure on SPACs, downward pressure on innovation
Speaker 1: and tech. But you know, I'm bullish on American innovation,
Speaker 1: and those that want to bet against American innovation can uh,
Speaker 1: you know, try to determine what type of world they
Speaker 1: want to live in. But this company here's head down
Speaker 1: on execution between now and the end of the year.
Speaker 1: And um, we're self sufficient and we're you know, continuing
Speaker 1: to raise and attract capital, uh from from good institutions
Speaker 1: that that will allow us to grow this business. That
Speaker 1: I think will set us apart from some of the
Speaker 1: other stories that have come to market. But uh, you know,
Speaker 1: as far as the stock price itself, it's you know,
Speaker 1: we're we're focused on getting you know, maximum shareholder value
Speaker 1: by doing what we can do. And I'm hopeful that
Speaker 1: the stock front price will reflect that here in the
Speaker 1: years to come. Do you guys regret going public through
Speaker 1: a spack merger because of getting caught in that down draft?
Speaker 1: Just quickly? You know, at this point, we're focused on
Speaker 1: the future and what we're doing here today. Um, and
Speaker 1: you know, we're focused on building the business. So Jonathan,
Speaker 1: for those who are not familiar, Um, because we've had
Speaker 1: your team on before to talk about what you guys
Speaker 1: are doing, remind our audience how it all works. Yeah, so,
Speaker 1: uh at Harvest is building some of the world's largest
Speaker 1: controlled environment agriculture facilities, growing fruits and vegetables year round
Speaker 1: in a controlled environment, using less water than open field agriculture,
Speaker 1: getting roughly thirty times yield for acre um and and
Speaker 1: and offering reliable quality brought to large grocers like Kroger, Walmart, Costco, Publix,
Speaker 1: um And And this last year we were growing tomatoes.
Speaker 1: This year we'll be growing salad, green strawberries, and tomatoes,
Speaker 1: distributing all across the US. And Jonathan, and when it
Speaker 1: comes from to a technology perspective, what is the technology
Speaker 1: that you've developed at Harvest that is patented or not
Speaker 1: necessarily you know, copyable. If somebody goes and sees how
Speaker 1: you do things, they say, wait a second, I can
Speaker 1: I can do this myself. Well, well, part of it's
Speaker 1: just sheer execution at scale. And I'll talk about the
Speaker 1: technology in a moment. But our first facility in more
Speaker 1: Head is nearly three million square feet in size. We're
Speaker 1: bringing about five to six million square feet of additional
Speaker 1: facilities online this year. To put that in perspective, the
Speaker 1: one facility alone, you could put fifty football fields inside
Speaker 1: of it. So aale. But we acquired a robotics company
Speaker 1: that's focused on robotic harvesting UH in in Ai picking
Speaker 1: and order to to better optimized yield production UH and
Speaker 1: then one of the only facilities to run completely on
Speaker 1: recycled rainwater. We you know you were mentioning we're going
Speaker 1: to break about the droughts in California. We're we're in
Speaker 1: a water rich region. That's why we're building in eastern
Speaker 1: Kentucky and area of the country that's getting wetter. People
Speaker 1: have actually joked, well, haliburt and build water pipelines to
Speaker 1: the west, and while they do it from Appalachia to
Speaker 1: the west, but we're taking that rainwater running completely on
Speaker 1: recycled rainwater here, so we're not reliant on city water
Speaker 1: at all, and that is a fairly unique design and
Speaker 1: benefit to to what we're doing uh here here in
Speaker 1: uh the eastern half of the US. I have to say,
Speaker 1: whenever you guys are coming on and I Google and
Speaker 1: look for some of the images, I mean, it's massive
Speaker 1: your facilities. Can you guys do this anywhere? Yeah, we've
Speaker 1: we've definitely, you know, we're we're focused on building our
Speaker 1: headquarters in central Appalachia where we can get to seventy
Speaker 1: of the US in a one day drive. Amazon is
Speaker 1: building the largest prime facility in the world in northern
Speaker 1: Kentucky right now, so they're right up the road. But yeah,
Speaker 1: it's you know, you look at the Middle East, who
Speaker 1: imports most all their fruits and vegetables. We've we've been
Speaker 1: been in deep discussions for several countries there. We we
Speaker 1: invested in a technology red sea farms. Uh. That's out
Speaker 1: of cows some Saudi Arabia. Uh. And then you look
Speaker 1: at Southeast Asia, which is heavy demand, which which India
Speaker 1: and China have ten of the world's fresh water and
Speaker 1: the world's population. We we have to figure out how
Speaker 1: to grow a lot more food with a lot less resources,
Speaker 1: and using technologies is the only way to do it.
Speaker 1: Not to mention tops so all getting a little tired exactly.
Speaker 1: We talked about fossil fuel extraction is being the only
Speaker 1: extractive industry, and I'm sitting in coal country. We're mining
Speaker 1: nutrients out of the soil. We're not replenishing those nutrients
Speaker 1: where you know, Californias is tapping all their freshwater reservoirs
Speaker 1: to the point to where you know, the running low. Uh,
Speaker 1: we don't have a choice. I mean, we're moving again.
Speaker 1: We're in the infancy of controlled environment agriculture in the US. UM.
Speaker 1: But but I think over the coming decade, you'll see,
Speaker 1: you know, just much like you saw evs ten years
Speaker 1: ago and renewal energy twenty years ago, you're going to
Speaker 1: see a lot of c A build all around the US.
Speaker 1: How do you think about expansion not just in the
Speaker 1: United States, but but globally as well to some of
Speaker 1: those countries that you mentioned. Is that something that you
Speaker 1: do at our harvest or do you license the technology
Speaker 1: or let someone else take care of it. Yeah. Again,
Speaker 1: we're focused on getting our national footprint here. Uh, and
Speaker 1: and have have a couple of exciting opportunities we're working
Speaker 1: on that we've talked about that we hope we'll we'll
Speaker 1: get to fruition by the back half of this year
Speaker 1: in the US. But we're very cognizant. I mean, we
Speaker 1: we've had very uh high level discussions in in both
Speaker 1: Middle East and Southeast Asia with countries that that Frankly,
Speaker 1: you know, you look at the chaos happening in our
Speaker 1: world right now. I mean, everybody is trying to figure
Speaker 1: out how do we become resource resilient and self sufficient
Speaker 1: in some way, and part of that is growing food
Speaker 1: at home. And you know, there's no reason we're shipping
Speaker 1: food thousands of miles around the world when every country
Speaker 1: has the opportunity to to build systems, use technology and
Speaker 1: grow food right at home. And we definitely are gonna
Speaker 1: explore how we can be a helpful player in that transition,
Speaker 1: but right now we're focused on our core business here
Speaker 1: in the US. That was app Harvest founder and CEO
Speaker 1: Jonathan Webb, and that wraps up the first hour of
Speaker 1: the weekend edition of Bloomberg Business Week from Bloomberg Radio.
Speaker 1: I'm Carol Masser and I'm Tim Stanovik. Coming up in
Speaker 1: our next hour, the CEO of Plug Power on how
Speaker 1: his company is being impacted by the war in Eastern Europe,
Speaker 1: a region that supplies some of the metals and minerals
Speaker 1: that the firm needs to build hydrogen fuel cell systems.
Speaker 1: Plus Bolton College President Clayton Rose explains how Apple is
Speaker 1: helping students learn to lead in an increasingly digital world
Speaker 1: and shuffle up and deal everybody. We're going to tell
Speaker 1: you why poker. It's all the rage in the metaverse.
Speaker 1: That's what's actually going on, Tim, in the metaverse, Like, well,
Speaker 1: we're not think like you know, meetings in the virtual
Speaker 1: world yet, right, we're planned poker. I guess. So this
Speaker 1: is Bloomberg. This is Bloomberg Business Week inside from the
Speaker 1: reporters and editors who bring you America's most trusted business magazine,
Speaker 1: plus global business, finance and tech news as it happened.
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes
Speaker 1: Tim Stinovic on Bloomberg Radio. Hi, I am Carol Masser
Speaker 1: and I'm Tim st Plenty ahead in our second hour
Speaker 1: of the weekend edition of Bloomberg Business Week. Including a
Speaker 1: look at the world of higher education as a threat
Speaker 1: of COVID nineteen begins to wane, and how Apple is
Speaker 1: spurring the push for digital equity at Bowden College. We're
Speaker 1: taking a trip to the Central Land, so buckle up.
Speaker 1: It's one of the busiest destinations in the nascent metaverse,
Speaker 1: and it's being buoyed by virtual casinos where players can
Speaker 1: gamble for a chance at crypto wealth. Do you need
Speaker 1: ticket to the metaverse now? But you need a little
Speaker 1: crypto at least for this this version of the metaverse.
Speaker 1: I get to know first up this hour that we
Speaker 1: focus on clean energy solutions from Plug Power. The company
Speaker 1: builds hydrogen and fuel cell systems and sells them to
Speaker 1: the likes of Walmart, Amazon, Home Depot, and a lot
Speaker 1: more companies. It also sources many key input materials from
Speaker 1: Eastern Europe, a region as you know, currently in the
Speaker 1: throes of war. My Bloomberg Quick Take Hollie Kitty Grayfield
Speaker 1: and I spoke with President and CEO Andy Marsh after
Speaker 1: the company posted a wider than expected fourth quarter loss
Speaker 1: yet reaffirmed its revenue forecast. When you look at the
Speaker 1: hydrogen market, it's scheduled to be a ten trillion dour
Speaker 1: market if you look at the analysts and like gold
Speaker 1: at Goldman Sachs and with that kind of market, you're
Speaker 1: going to have rapid growth and PLUG is expected to
Speaker 1: double it's revue. A lot will come from the generation
Speaker 1: of hydrogen or electricalizer business, which we expect to grow
Speaker 1: by more than seventy uh over the coming years, as
Speaker 1: well as other opportunities to grow the business in new
Speaker 1: markets like one road vehicles without JV with Renault and Andy.
Speaker 1: If you look at the balance of risks of the
Speaker 1: year ahead, I feel like we have to talk about
Speaker 1: the situation in Russia and Ukraine because Russia, I mean,
Speaker 1: it's one of the world's biggest suppliers of platinum and aridium,
Speaker 1: and your fuel cells and your electrializers obviously use both
Speaker 1: of those materials. Are those supplies at risks right now?
Speaker 1: Do you do you get platinum and a radium from
Speaker 1: Russia or Ukraine? Really good question, and we've we've established
Speaker 1: supply change with some of our partners. We have a
Speaker 1: close partnership with Johnson Matthew which have access to titanium
Speaker 1: in a rhydium all over the world. This past weekend
Speaker 1: we opened a joint venture facility, broke around a joint
Speaker 1: venture facility with Fortescue, one of the largest mining companies
Speaker 1: in Australia. UH spent a lot of time actually today
Speaker 1: making sure there was by chains were sound. We do
Speaker 1: not believe that will impact our delivery this year. So
Speaker 1: do you get do you get plantinum in a ridiu
Speaker 1: from Russia or Ukraine? Their global markets, So you know,
Speaker 1: we're not specifically buying it from UH, from Ukraine or Russia,
Speaker 1: but as you know, all these commodities are global. How
Speaker 1: do you control for that? Well, I think what's important
Speaker 1: is we have relationships with some of the largest largest
Speaker 1: suppliers of role role materials, people like Bortescue in Australia,
Speaker 1: which is one of the largest mining companies in Australia.
Speaker 1: So do you anticipate any any hiccups given that it's
Speaker 1: a global market and given that Russia is one of
Speaker 1: the world's biggest suppliers, do you anticipate any trouble actually
Speaker 1: acquiring those commodities plantum in a ridium. I believe that
Speaker 1: we you know, I think what we were able to
Speaker 1: do during the pandemic, being able to double our revenue
Speaker 1: during the pandemic over the past two years. I think
Speaker 1: when you look at what's going on in Ukraine, the
Speaker 1: horrible events there, it also really helps a business like
Speaker 1: Plug Power because Plug will be able to you know,
Speaker 1: the energy transition will happen faster. We provide green hydrogen,
Speaker 1: we provide fuel cells. I've been spending a lot of
Speaker 1: time with natural gas producers, producers and natural great gas
Speaker 1: pipeline companies in Europe about how they can transition to
Speaker 1: hydrogen and fuel cells more rapidly. Well, Andy, that's something
Speaker 1: I've been thinking about this week. I mean, it's well
Speaker 1: known by now that Russia it's such a key supplier
Speaker 1: for energy, for natural gas, for oil to to Europe
Speaker 1: and uh, I mean that's really emerged as sort of
Speaker 1: a crisis when it comes to European energy security. So
Speaker 1: you see this, this situation that's unfolding is helping to
Speaker 1: accelerate some of the adoption when it comes to things
Speaker 1: like green hydrogen. When I look at it, we have
Speaker 1: been promoting green hydrogen to help reduce the carbon footprint
Speaker 1: so that folks have meet the one point five degrees goal.
Speaker 1: Now it's pretty clear the work we're doing in green
Speaker 1: hydrogen is a national security issue for both the United
Speaker 1: States and Europe. And plug Power is probably as the
Speaker 1: largest fuel selling hydrogen company in the world, is in
Speaker 1: a better position than anyone else to take advantage of
Speaker 1: the this turbop this opportunity in this turbal situation. So
Speaker 1: can you talk a little bit about how you're moving
Speaker 1: beyond your core market right now, you do, according to
Speaker 1: the Bloomberg Terminal, get a large portion of your revenue
Speaker 1: from just a couple of different companies. Those companies include Walmart, Amazon,
Speaker 1: Home Depot, Procter, Gamble, and more. I talked about the
Speaker 1: transformation that you're doing at plug Power to try to
Speaker 1: diversify those sources of revenue. Sure, great question. I'm gonna
Speaker 1: give you two examples. One is with Fortescue Medals in Australia,
Speaker 1: we have an opportunit unity, you know, for over the
Speaker 1: next eighteen months to deliver two hundred million dollars worth
Speaker 1: of revenue to that worth of products to Fortescue for
Speaker 1: generation of green peumonia in Australia. With the within Roscom
Speaker 1: in Egypt, we're actually working with them to build electoralizer
Speaker 1: plant a hundred megawide electricizer plant which will generate hundreds
Speaker 1: of millions of dollars. So you know this market opportunities
Speaker 1: are with global players around the world, and obviously our
Speaker 1: JB for on road vehicles with Renault is another huge
Speaker 1: opportunities for plug Power to diversify our customer base. That
Speaker 1: was Andy Marsh She's president CEO over at plug Power.
Speaker 1: You're listening to Bloomberg Business Week coming up. A new
Speaker 1: England college is making a commitment to what it's calling
Speaker 1: digital excellence, and it's enlisting a big tech powerhouse to
Speaker 1: ensure every student has a fair shot at achievement. This
Speaker 1: is Bloomberg. This is Bloomberg Business Week with Carol Masser
Speaker 1: and Bloomberg Quick Takes Tim Stenovik from Bloomberg Radio. Mains
Speaker 1: Boden is an elite liberal arts college accounts and a
Speaker 1: ray of influential figures among its alumni from Netflix founder
Speaker 1: Read Hastings and poet Henry Wadsworth Longfellow. Now, the nearly
Speaker 1: two d thirty year old institution for higher learning is
Speaker 1: looking toward the future with the help of the world's
Speaker 1: most valuable company, Apple. Late last month, the school announced
Speaker 1: what it's calling its Digital excellence commitment. So for more
Speaker 1: on Boden's mission to create digital equity across the student
Speaker 1: body and on its push to get back to some
Speaker 1: degree of normalcy in the wake of the COVID pandemic,
Speaker 1: we caught up with Boden College President Clayton Rose. We
Speaker 1: began working with Apple in in Earnest a few years
Speaker 1: ago before the pandemic UM with respect to technology campus
Speaker 1: and how to think about the future of the use
Speaker 1: of technology and higher education. During the pandemic, we made
Speaker 1: the decision to provide every one of our students and
Speaker 1: any faculty member that wanted one with an iPad pro
Speaker 1: and a pencil UH. And we did that UM during
Speaker 1: the academic year when a number of our students were
Speaker 1: operating remotely and many of our classes were operating remotely,
Speaker 1: so that every single student would have access to precisely
Speaker 1: the same hardware and be able to experience software in
Speaker 1: exactly the same way UM, and that faculty would be
Speaker 1: able to rely on very good technology to be able
Speaker 1: to deliver their classes and to work with their students
Speaker 1: in real time, and for the students to work with
Speaker 1: each other in study groups and offline and so forth.
Speaker 1: And that that proved to be a very powerful tool
Speaker 1: for making sure that we were able to deliver a
Speaker 1: great education during the pandemic. Last the sash well, I
Speaker 1: want to jump in, UM, but I'm wondering why Apple
Speaker 1: and rather than a less expensive provider of PCs, because
Speaker 1: when we talk Apple, we're talking premium products here. I
Speaker 1: guess I would turn to the old phrase that you
Speaker 1: get what you pay for. It's Apple has built fantastic
Speaker 1: products both in the notebook version and in the iPad version,
Speaker 1: and they do different things, which is why we're providing
Speaker 1: our students with both of those tools UH and the
Speaker 1: pencil as well. UH. Also the ability to provide the
Speaker 1: kind of software that we need to offer our students
Speaker 1: to be able to have the educational experience they have
Speaker 1: both general UM productivity software but also very core specific
Speaker 1: software across the range of disciplines really drove us to Apple.
Speaker 1: I would also say that UM the UH in addition
Speaker 1: to the quality of the product, the service relationship that
Speaker 1: we have with Apple was also very important to us
Speaker 1: to make sure that students would have little if any downtime.
Speaker 1: If UM they know something got broken, they needed to
Speaker 1: get something repaired, and so forth. Well, and this really
Speaker 1: gets into something we talked about here UM Clayton a
Speaker 1: lot at Bloomberg about inequity of access or just inequalities
Speaker 1: that are out there as well. What were you seeing
Speaker 1: that was potentially holding back some students because they did
Speaker 1: not have that same access. Yeah, thanks for that, Carol. UH.
Speaker 1: The the issue of access and opportunity is a central
Speaker 1: part of our mission, and we can spend some time
Speaker 1: if you want, talking about our financial aid program. But
Speaker 1: to the to the question you asked, what we were
Speaker 1: seeing is that students would come to campus with a
Speaker 1: wide variety of hardware. Everyone would arrive pretty much everyone
Speaker 1: would arrive with some kind of a laptop or tablet.
Speaker 1: But the wide variety of laptops and tablets, the wide
Speaker 1: variety of the quality of the age, the power of
Speaker 1: the memory UH was making it increasingly difficult for our
Speaker 1: faculty to be able to rely on the ability for
Speaker 1: our students to be able to do the work UH
Speaker 1: in a way that UM was going to provide them
Speaker 1: with an excellent education. And many of our students who
Speaker 1: had UH lower quality and older products were not able
Speaker 1: to do the same kind of things in the same
Speaker 1: way as students who had the very best products for us.
Speaker 1: We really came to realize, and this was driven home
Speaker 1: during the pandemic that to be able to deliver the
Speaker 1: education that we want and action and to prepare our
Speaker 1: students for the digital world that we're going into, they
Speaker 1: all need to be working off of an excellent hardware
Speaker 1: platform and have access to excellent software and to be
Speaker 1: and to and to have a kind of homogeneous experience
Speaker 1: to be able to to all be working with the
Speaker 1: same tool UH. And that that that drove us. Otherwise,
Speaker 1: you've got students who are who are operating in a
Speaker 1: very different, lower quality environment, and we were seeing that
Speaker 1: and this is for us table stakes for a great education.
Speaker 1: The cost of this to you guys, and where the
Speaker 1: money specifically is coming from it was it a gift
Speaker 1: from a donor, like how are you doing this? So
Speaker 1: this UH, the funding for this GARL will come from
Speaker 1: our operating budget. We concluded that it was so important
Speaker 1: that we do this that we needed to make room
Speaker 1: in our normal operating budget UM to cover the cost
Speaker 1: of doing this. So it's not a specific gift, it's
Speaker 1: not a limited time UM. My guess is that we'll
Speaker 1: have UH donors who find this interesting and we'll be
Speaker 1: able to help us over time. But um, out of
Speaker 1: the box here we're covering out of our operating budget. Well, okay,
Speaker 1: will it? Will it lead to an increase in tuition
Speaker 1: costs going forward? No, We're very disciplined about our our
Speaker 1: our budget, so we make choices about what's important and
Speaker 1: this is very much at the top of the list.
Speaker 1: And some of the other things that we might not
Speaker 1: have done we'll get too later. But um, but work
Speaker 1: their way into the budget later. Can you give us
Speaker 1: an idea of how much it costs it's costing for student? Sure,
Speaker 1: it's it's been reported that this is a web per student.
Speaker 1: I have to do the math. But total program on
Speaker 1: an annual basis is at about a million and a
Speaker 1: half dollars. So if we divide that by the two
Speaker 1: thousand students, I don't know my calculator, and it's higher math,
Speaker 1: So I'm going to miss something. I mean, in the
Speaker 1: greater scheme of operating expenses, it's it's it's not really
Speaker 1: really significant right now. A million and a half is
Speaker 1: real money, But that's that's correct. Our our operating budget
Speaker 1: is about a hundred and eighty million dollars in a
Speaker 1: given year. Um and uh, and again this is such
Speaker 1: an important part of ensuring that all of our students
Speaker 1: receive a great mode and education that you know, it's
Speaker 1: it's it's hard to argue that we shouldn't be doing
Speaker 1: it so real money but um, but manageable in the
Speaker 1: context of the budget that we have an incredibly important
Speaker 1: in terms of our priorities. We did the math calculator,
Speaker 1: Thank you so much for app seven fifty dollars per
Speaker 1: per student. UM. I get it though, because we don't
Speaker 1: do an interview Clayton where somehow it doesn't matter what
Speaker 1: industry you're talking about, what leader you were talking to,
Speaker 1: that's somehow the conversation gets back to technology in some ways.
Speaker 1: And so um, I get it. I get it where
Speaker 1: you come from. Yeah, And the combination of the of
Speaker 1: the notebook and the iPad is really quite powerful and
Speaker 1: it's very interesting. When we first started, we were thinking
Speaker 1: about either or and we came to the conclusion that
Speaker 1: what you really need is to put both of these
Speaker 1: tools into our students hands. They do different things, they
Speaker 1: complement each other in very powerful ways, and turning in
Speaker 1: terms of the teaching and the learning that we do here,
Speaker 1: and it doesn't matter what discipline, right, you're saying, every
Speaker 1: student gets this. If that's exactly right. That was Boden
Speaker 1: College President Clayton Rose. Still to come. On Bloomberg Business Week,
Speaker 1: the poker boom is experiencing a second coming, except this
Speaker 1: time it is taking place in the Da Da DA
Speaker 1: the metaverse. Why an online casino is one of the
Speaker 1: most popular places to visit in a far off place
Speaker 1: called the Central Land. This is Bloomberg frontcasting from the
Speaker 1: financial capital of the world, Bloomberg eleven Frio in New
Speaker 1: York to Washington, d C. Bloomberg to Boston, Bloomberg one
Speaker 1: oh six one to San Francisco, Bloomberg nine sixty to
Speaker 1: the country Sirius XM Chado one nine team, and around
Speaker 1: the globe the Bloomberg Business app and Bloomberg Radio dot Com.
Speaker 1: This is Bloomberg Business Week. As the world opens up
Speaker 1: with the threat of the latest COVID variant receding. Where
Speaker 1: are people going for some excitement? Well, it turns out
Speaker 1: right back to their computers and a corner of the
Speaker 1: metaverse it's known as do Central Land. In the text
Speaker 1: section of the magazine, this week Bloomberg News video game
Speaker 1: reporter Cecilia Donastasio writes that it's not unusual for gambling
Speaker 1: to kind of act as this bridge to bring emerging
Speaker 1: technology to the masses. It's happened before, Cecilia joining us
Speaker 1: along with the Bloomberg Business Week editor Joe Weber. I
Speaker 1: love it that, you know, we're all talking about the
Speaker 1: metaverse and what it's going to be and how it's
Speaker 1: gonna up in tech and fortunes are going to be
Speaker 1: made and companies are going to be and die on
Speaker 1: this thing. And the first place that we get to
Speaker 1: see what it looks like, what are people doing there?
Speaker 1: It's sin right kind of so, so, cecilianlet's bring you in. Um,
Speaker 1: why why why is it that we could have these
Speaker 1: grand ambitions for the future and yet we just end
Speaker 1: up gaming. Yeah, it's not unusual. A lot of new
Speaker 1: technologies have been ushered in by gambling, by you know,
Speaker 1: nine Nandy one. The year that the first PCs were introduced,
Speaker 1: video poker was already very popular. The Internet was in
Speaker 1: part ushered in by casinos. Even cryptocurrency bitcoins. Some of
Speaker 1: the first applications were gambling. And now at the what
Speaker 1: people say is the dawn of the metaverse. We have poker.
Speaker 1: So tell us what the central end like if you
Speaker 1: go there? I mean, do I Am I really going
Speaker 1: to see a picture of Jamie Diamond? You can if
Speaker 1: you'd like, Um, so tell us about you go in.
Speaker 1: What's the experience? It's a funny experience if you're someone
Speaker 1: who's played video games, because what does Sunderland look like
Speaker 1: is a virtual world in the kind of virtual world
Speaker 1: you might see, you know, on a random web browser
Speaker 1: in like the early to mid two thousand. Thank you.
Speaker 1: I was reading this story earlier today and I said
Speaker 1: to some colleagues sitting next to me, I'm like, what,
Speaker 1: how is this not Second Life all over again? It
Speaker 1: kind of is. And actually, you know, there are a
Speaker 1: lot of things that Second Life does that to Central
Speaker 1: Land can't do. But to Central Lands big pole is
Speaker 1: the fact that it is to Central lines. It runs
Speaker 1: on the ethereum technology and um they're selling real estate
Speaker 1: for a lot of money, millions of dollars even what
Speaker 1: do you mean? What do you mean they're selling real
Speaker 1: estate so you can buy a plot of land in
Speaker 1: the virtual world like um to Central Games has done
Speaker 1: with their ice poker casinos and you can bring people
Speaker 1: in and do business there typically using cryptocurrency. Is that
Speaker 1: number negotiable? Maybe I ask them and find out. So
Speaker 1: what else can you do there other than you know,
Speaker 1: play a little poker. Sure, So into Central and there
Speaker 1: are a lot of things that you can do. So
Speaker 1: you can tour, you know, a Southby's art gallery. You can, um,
Speaker 1: come on, Paris Hilton, you're bearing the lead. Paris Hilton
Speaker 1: performed a conference a uh concert there. I think Dead
Speaker 1: Mouse did to the electronic musician. Um. The there's like
Speaker 1: going to be a Barbatos embassy there soon apparently. So
Speaker 1: people are doing all kinds of things, sort of speculating
Speaker 1: on the metaverse into Central Land. How do you Let's
Speaker 1: go to poker though and talk a little bit about
Speaker 1: what people are doing. As you mentioned, it has historically
Speaker 1: helped usher in you know, gaming has helped us or
Speaker 1: in new technologies. Um, the legality of this, it's kind
Speaker 1: of like a little bit you know, wishy washy with
Speaker 1: what's what you're allowed to do, what you're not allowed
Speaker 1: to do. I think the timing is really interesting because
Speaker 1: we're talking about sports betting on sort of a wide
Speaker 1: scale at least through your phones now being available in
Speaker 1: many different states, are people allowed to just kind of
Speaker 1: gamble with real money in the metaverse, It's really complicated.
Speaker 1: It's gray area, so UM. In order to gamble in
Speaker 1: US states mostly UM, you will need a gambling license
Speaker 1: UM in the states that do happen to allow gambling
Speaker 1: UM ice Poker, which is the game we're talking about
Speaker 1: that exists into Central Land. It is great because you're
Speaker 1: not necessarily gambling with chips that you then cash out
Speaker 1: for money. There are a number of different currency systems
Speaker 1: and digital assets that each have varying values that people
Speaker 1: are kind of playing with. In order in order to
Speaker 1: actually access UM the gameplay, you do have to be
Speaker 1: either in you have to either buy or be in
Speaker 1: possession of an n f T that sells for you know,
Speaker 1: five thousand and seven thousand dollars or more UM. But
Speaker 1: gambling experts aren't sure whether that qualifies as consideration, which
Speaker 1: is something that someone would put up in order to
Speaker 1: gamble in real life. That's a lot of money. Yeah,
Speaker 1: it's an say, I feel like all of our browser
Speaker 1: for it a little bit. So a glimpse of the
Speaker 1: future here, tell us, is there a greater meaning in
Speaker 1: all of this way, what's your what's your reading of
Speaker 1: what what does this mean for for the metaverse and
Speaker 1: and the companies that are going to be doing business there.
Speaker 1: That's a great question. I think it's really interesting that
Speaker 1: there's been a lot of speculation on the metaverse and
Speaker 1: its prospects. Um Morgan Stanley for example, said that it
Speaker 1: could be a trillion dollar opportunity in the future. But
Speaker 1: what we're seeing right now is that the metaverse is
Speaker 1: a a lot less populated than top video games be
Speaker 1: you know, looks like maybe an older video game, and
Speaker 1: see one of the big draws there right now is
Speaker 1: doing something that looks a lot like gambling. So I
Speaker 1: think it's to be seen exactly what the staying value
Speaker 1: add is of the metaverse. That was Bloomberg News video
Speaker 1: game reporters Cecilia Donastasio along with the editor of the magazine,
Speaker 1: Joel Weber. You're listening to Bloomberg Business Week coming out
Speaker 1: from gaming in the metaverse to cummies gummies? Yeah, you
Speaker 1: heard me right in real life are Bloomberg Pursuits team
Speaker 1: takes a bite out of the multibillion dollar edible wellness
Speaker 1: boom See what I did there. I see what you
Speaker 1: did there. You didn't bring me any gummies though, well
Speaker 1: maybe later. This is Bloomberg. You're listening to Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes Tim Stinovich
Speaker 1: from Bloomberg Radio. Gummies no longer just a way to
Speaker 1: ingest empty calories. More and more adults are turning to
Speaker 1: gelatine based chewable suites for treating and preventing a variety
Speaker 1: of elements and boosting their immune systems. And they're just
Speaker 1: apparently not for kids anymore. Yeah, well, especially CBD gummies, right,
Speaker 1: It's a non psychoactive ingredient in marijuana that's found in
Speaker 1: some of these products. But there are also gummies for
Speaker 1: retinal to improve the quality of your parents skin, or
Speaker 1: at least that's what they're supposed to do, and others
Speaker 1: that can help with everything from mental fog to mentro cramps.
Speaker 1: Are Bloomberg Pursuits team set out to separate fact from
Speaker 1: fiction and figure out which gummies on the market really
Speaker 1: do live up to the height. Let's bring in Bloomberg
Speaker 1: Pursuits editor Chris Rouser and Business Week contributor Asia mangum So.
Speaker 1: Chris let's start with you. How did this topic grab
Speaker 1: your attention? Did Asia call you up and said, I
Speaker 1: got a story for you, Chris, Well, you know, we'd
Speaker 1: all on the team been observing the rise of gummies,
Speaker 1: which has been happening for a few years. And um,
Speaker 1: you know, I've certainly tested some for sleep, CBD gummies
Speaker 1: for stress, and so is the team. And Asia said,
Speaker 1: you know what, let's look at how big this has
Speaker 1: gotten and how broad because the global edible wellness market
Speaker 1: is three point three billion now and it's expected to
Speaker 1: read eight point three billion and twenty thirty. So people
Speaker 1: are eating their wellness. Um. And as you said, there's
Speaker 1: gummies for seemingly everything now, so um, Asia was on
Speaker 1: the case. She tested a bunch of them. She talked
Speaker 1: to a bunch of experts, and we learned kind of
Speaker 1: like what you should look for, what's good, and what
Speaker 1: people are trying to do. Okay, So let's start with
Speaker 1: with what's out there right now, Asia, because as Chris mentioned,
Speaker 1: there are all these different things, and I think a
Speaker 1: lot of people might be familiar with gummies. Is a
Speaker 1: delivery for vitamins perhaps or even in the last couple
Speaker 1: of years, CBD but but what does the market landscape
Speaker 1: look like? What kind of you know, attracted me to gummies?
Speaker 1: Like Chris said, like this has been trending for a while. Um,
Speaker 1: there really are gummies for everything. There's gummies to help
Speaker 1: you sleep, there's gummies if you need to pick me up,
Speaker 1: you know, at three o'clapping afternoon, instead of having a
Speaker 1: cup of coffee, you get a gummy. There's you know,
Speaker 1: gummies a claim you know, to help you know, clear
Speaker 1: out your urinary track, you know system. Um, they're mushrooms
Speaker 1: that are now in gummy forms. So you know, for me,
Speaker 1: it was just kind of like, you know, whatever you have,
Speaker 1: whatever is ailing you, there's a gummy for it. Um,
Speaker 1: If you have is it, there's a gummy for it.
Speaker 1: Your hair it's thin, if your hair is dolped, there's
Speaker 1: a gummy for that too. Your nails are breaking, there's
Speaker 1: a gummy. So the market is that. But I think
Speaker 1: you know the problem with these gummies, and you know
Speaker 1: what we mentioned in the piece, it's just the amount
Speaker 1: of sugar. Um because a lot of these you know supplements,
Speaker 1: they actually don't taste good on their own. Let's say apple,
Speaker 1: you know, side or vinegar, which people you know normally
Speaker 1: take to help, you know, with digestion, but it's growth. Um.
Speaker 1: You need a lot of sugar sometimes to you know,
Speaker 1: just mask up, you know, the the grossness. Really. So
Speaker 1: one of the funny things about these gummies is the
Speaker 1: dosage is one or two gummies um, and for me,
Speaker 1: at least one gum. It's like trying to eat one dorrito.
Speaker 1: You know. A few years ago, somebody got me some
Speaker 1: Sebete gummies and I just they tasted so good that
Speaker 1: I ate an entire bottle or three days. And it
Speaker 1: wasn't the right move for me, but it was really
Speaker 1: hard to eat just one. Yeah, And Martha Stewart just
Speaker 1: Sugar Coated Company, and she's like, I ate like seven
Speaker 1: to ten of these every day, but you're really only
Speaker 1: so let's eat one or two. And that's why Martha's
Speaker 1: so chill. But you know, so okay. So it's hard
Speaker 1: to eat just the one or two. But maybe you're
Speaker 1: getting a lot of different things, um from a bunch
Speaker 1: of different gummies. So maybe you eat like, I don't know,
Speaker 1: six or seven that's a little more satisfying different kinds,
Speaker 1: but then you're eating your entire day's allowance of sugar
Speaker 1: in some cases. Um, and essentially eating a box of chocolate. UM.
Speaker 1: I had a moment and you know, working on this story,
Speaker 1: and I saw myself in my holy crap I had.
Speaker 1: I just had ten gummies. And it was around Valentine's
Speaker 1: Day and I have, you know, two small kids, and
Speaker 1: there's celebrations at school, and there was a little box
Speaker 1: of chocolate on the kitchen table and I looked at
Speaker 1: how many grams of sugar is in the box of chocolate,
Speaker 1: and there's twenty three grams of sugar which I consumed
Speaker 1: just in you know, the healthy nutritional supplement. So I
Speaker 1: think it's something that easily can get out of control.
Speaker 1: And also, if you're taking you know, gummy supplement to
Speaker 1: help with your skin, consuming so much sugar is actually
Speaker 1: doing more to your skin. So it's kind of like,
Speaker 1: you know, you really need to balance out your intake
Speaker 1: because if you're taking a gummy from metabolism, but then
Speaker 1: you're taking ten while it can cause you to gain weight,
Speaker 1: you know how its say, like you know, consuming too
Speaker 1: much sugar. You know, you can go to your waistline
Speaker 1: as you bring up a really good point and that's
Speaker 1: about the delivery mechanism in gummies, right, is is this
Speaker 1: actually the right way that you know, health professionals recommend
Speaker 1: getting all these products, like you know, a pill could
Speaker 1: be better something that's perhaps transdermal. As far as the
Speaker 1: delivery system, No, they don't. They don't recommend it, like
Speaker 1: you know, all the doctors and I spoke to everyone. Um, No,
Speaker 1: they're not going to recommend a gummy. However, it is
Speaker 1: helpful for people that really have a hard time taking pills.
Speaker 1: I'm I'm one of them. I am toodramatic scene. There
Speaker 1: are a lot of theatrics and reflect exactly and when
Speaker 1: I'm like yagging all over the kitchen and it can
Speaker 1: take me ten minutes to take one self. So you know,
Speaker 1: it is helpful um for people like myself. Um, but yes,
Speaker 1: it's no. There are better delivery systems you know, out
Speaker 1: there than than a gummy. Um, as one of our
Speaker 1: experts said, like melatonin. I mean that's you know, you
Speaker 1: can chew a gummy and you know fall asleep, Like
Speaker 1: that's fine, but if you want to you know, if
Speaker 1: you're tackling other problems, um, a multi vitamin that's fine
Speaker 1: and gummy form, but if you want to tackle like
Speaker 1: a variety of issues. No, there are better delivery systems
Speaker 1: out there than than a gummy. So age, I'm thinking
Speaker 1: people who are listening to this and they're like, oh, yeah,
Speaker 1: I take a bunch of gummies. So what's what's some
Speaker 1: guiding rules that you think, based on your reporting, that
Speaker 1: people should do, you know, what what should they take
Speaker 1: in gummy form? You have to you have to read
Speaker 1: the labels. Um, if if you're seeing eight grams of
Speaker 1: added sugar, that may not be the best gummy for you.
Speaker 1: If well, maybe if you're just taking you know, one
Speaker 1: or two and you're comfortable with that, you know, that's fine.
Speaker 1: But if you're taking multiple gummies, you should you know,
Speaker 1: look for a gummy that maybe have two, you know,
Speaker 1: grams of added sugar, three grams of paddock sugar. Like,
Speaker 1: once you start getting into five, six, seven, and eight
Speaker 1: and you're taking multiple gummies, you may want to pare
Speaker 1: it down. Also, know, you have to really think about
Speaker 1: the issues you want to address. Um, if you want
Speaker 1: to go to sleep, yeah, melotonin is fine. Um, but
Speaker 1: if you're like, oh, you know, I need vitamin d
Speaker 1: OH and I also need vitamin c OH and I
Speaker 1: also need some immunity boosting this, that and the other.
Speaker 1: I would actually maybe recommend another delivery system, maybe maybe
Speaker 1: do a smaller like sometimes I cut my tablets. Yeah. Um,
Speaker 1: I know that sounds like very juvenile, but it works
Speaker 1: for me. Yeah no, And it's some really good advice. Asia.
Speaker 1: Thank you, Asia man gun there um joining us and
Speaker 1: she's a Business Week contributor. To check out her reporting. Um,
Speaker 1: we want to get back to the rest of the
Speaker 1: pursuits uh section this week, and uh, they're talking about gummies.
Speaker 1: We know that, but you also talked about some of
Speaker 1: the best books of spring Chris. Yeah. Every year James
Speaker 1: Tarmy looks ahead at spring and fall and talks about
Speaker 1: the most interesting books. And so he has a roundup
Speaker 1: of ten uh this week, and some of the ones
Speaker 1: that I'm most excited about our Amy O'Dell, who's us
Speaker 1: styal writer. Uh and like so much fun to pull
Speaker 1: off a real coup and do a biography of Anna
Speaker 1: Wintour where she got the participation of all of her
Speaker 1: inner circle and all the major designers. So that's going
Speaker 1: to be full of juice. Grant Ginder, one of my
Speaker 1: favorite writers, has a really zippy, funny novel called Let's
Speaker 1: Not Do That Again. It's like a political farce. Um.
Speaker 1: And there's a book called The Last Days of Roger Federer,
Speaker 1: which looks at athletes and performers and artists as they
Speaker 1: get older and what happens in their second and third
Speaker 1: and fourth chapters and the messages. You know, it may
Speaker 1: not be your greatest chapter, but there's still a lot
Speaker 1: of good to come. Okay, well, we're not out of
Speaker 1: the pandemic yet, but Bill Gates already has a book
Speaker 1: out how to Prevent the Next Pandemic. That's also on
Speaker 1: the list here. It's something that we talk a lot
Speaker 1: about with how experts who come on the show. Um,
Speaker 1: what is Bill Gates writing about here? You know, he's
Speaker 1: learned a lot about this, Like not only has he
Speaker 1: an expert in global healthcare because of his foundation, but
Speaker 1: he also did a lot of work at the beginning
Speaker 1: of the pandemic and throughout and so you know, he's
Speaker 1: learned a lot about how how countries can prepare hair
Speaker 1: and how communities can prepare Okay, go ahead, Carol, I
Speaker 1: just want to go to Cancoon. Can we just go there?
Speaker 1: I'm sorry, I'm like, let's go to Cancoon. Nikki Exstein
Speaker 1: writing about Cancoon's new luxury it's not just for spring
Speaker 1: break right and cool parties. There's some really great luxury
Speaker 1: resorts going on. Yeah, So Mexico in general and Caribbean
Speaker 1: Mexico in particular is having like the moment of moment,
Speaker 1: the months of months, the year of years, because it's
Speaker 1: pretty easy to come in and out of Mexico with
Speaker 1: COVID requirements. I feel like there was no pandemic in
Speaker 1: Mexico because everybody kept going there. But you know, and
Speaker 1: so Cancoon is easy to get to from the East
Speaker 1: coast um and Cancun itself. The city has a huge
Speaker 1: resorts um. There's plenty of rooms, but if you want
Speaker 1: a more fancy, like less spring breaking place, there's actually
Speaker 1: not a lot of options in the area, and the
Speaker 1: ones that are there, like like in Myacoba, are very expensive.
Speaker 1: So there's a new development south of Cancoon Um and
Speaker 1: the first hotel there is called a Tario. It's built
Speaker 1: over the mangrove forests. It's on the water. It's totally incredible,
Speaker 1: and there's just a lot there's more opportunities to have
Speaker 1: a luxurious vacation. Now, Okay, well, if you want to
Speaker 1: go on vacation play some golf. It's just in the
Speaker 1: last thirty seconds that we have with you, Chris, how
Speaker 1: is remote learning taking over when it comes to golf instruction.
Speaker 1: This is a really big trend in golf right now
Speaker 1: because a lot of instructors couldn't get to their audiences
Speaker 1: because of COVID, and you know, people just really started
Speaker 1: learning everything at home, and so particularly golf swing lessons
Speaker 1: and golf training and golf videos have gotten really huge.
Speaker 1: The big companies are getting into its tailor made golf Digest,
Speaker 1: and people are really finding that it's a very efficient
Speaker 1: way to learn and get better. Our thanks to Bloomberg
Speaker 1: Pursuits editor Chris Rouser into Business Week contributor Asia man
Speaker 1: Gum for guiding us through this week's Pursuit section. I
Speaker 1: kind of knew that after this week. It's just, you know,
Speaker 1: it's been pretty heavy, all right. That wraps up the
Speaker 1: weekend edition of Bloomberg Business Week from Bloomberg Radio. Thanks
Speaker 1: so much for joining us. I'm Carol Masser and I'm
Speaker 1: Tim Stick. Be sure to tune into Bloomberg Business Week
Speaker 1: Monday through Friday, starting at UPM Wall Street. Time on
Speaker 1: Bloomberg Radio. You can also watch our daily broadcast on YouTube.
Speaker 1: Just search Bloomberg Global News and check out our Bloomberg
Speaker 1: Business Week podcast. You can find it at Bloomberg dot com, Apple,
Speaker 1: or wherever you get your podcast. Bloomberg Business Week is
Speaker 1: available on newsstands now, at Bloomberg dot com and always
Speaker 1: on the Bloomberg Terminal. You can also see me on
Speaker 1: Bloomberg Quick Take. It's available at Bloomberg dot com, slash qt,
Speaker 1: and watch on streaming platforms like Roku, Apple TV, Samsung TV,
Speaker 1: and more. Have a great weekend everyone, and stays safe.
Speaker 1: This is Bloomberg