Speaker 1: Welcome to the Bloomberg Penel podcast. I'm Paul swing you
Speaker 1: along with my co host Lisa Brahma Waits. Each day
Speaker 1: we bring you the most noteworthy and useful interviews for
Speaker 1: you and your money. Whether at the grocery store or
Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple
Speaker 1: podcast or wherever you listen to podcasts, as well as
Speaker 1: at Bloomberg dot com. Let's dive deeper into those headlines.
Speaker 1: When we get the rough transcript of the president's call
Speaker 1: with the Ukraine. We welcome Alex Wayne, Bloomberg News based
Speaker 1: in Washington, d C. Alex, thanks so much for joining us.
Speaker 1: Just give us your kind of initial response to kind
Speaker 1: of what we're seeing here across the tape. Well, this uh,
Speaker 1: this transcript uh really supports the allegations that have been
Speaker 1: made that the President pressured Ukraine to investigate a political rival,
Speaker 1: Joe Biden. The President brought up Biden this phone call,
Speaker 1: mentioned his name repeatedly, and asked to uk for the
Speaker 1: new Ukrainian president to reopen a an investigation that had
Speaker 1: gone dormant um back in or so uh, involving a
Speaker 1: company tied to Joe Biden's son hunter Biden. So, is
Speaker 1: there any sense, Alex that there was a threat of
Speaker 1: withholding aid to Ukraine unless these this investigation did proceed.
Speaker 1: That there's no explicit threat like that in documented in
Speaker 1: this phone call. But but let's back up just a
Speaker 1: step before this call. According to people familiar with the matter,
Speaker 1: the President froze that that military age Ukraine had happened
Speaker 1: at least a week before the call. Uh now now
Speaker 1: that the President of Ukraine gives no indication in the
Speaker 1: call that he's aware the age has been frozen. At
Speaker 1: one point he early in the call, he thanks President
Speaker 1: Trump for US support for Ukraine and says he's uh,
Speaker 1: he's almost ready to buy more Javelin anti tank missile
Speaker 1: systems from the United States. The President responds by saying,
Speaker 1: I would like you to do us a favor, though,
Speaker 1: because our country has been through a lot in Ukraine
Speaker 1: knows a lot about it, and he then asks Zelensky
Speaker 1: to locate this d N the server that was hacked
Speaker 1: during campaign. We're not sure what the President was getting
Speaker 1: at there, um, but that then leads into a conversation
Speaker 1: about other investigations Ukraine could conduct on the President's behalfs
Speaker 1: including uh, including the Joe Biden probe. Yeah. Right now
Speaker 1: we're looking at SMP right now, the SMP trading lower,
Speaker 1: sharply lower on the heels of this transcript release. I'm
Speaker 1: just wondering, based on what we've heard, based on the law,
Speaker 1: is what's in the transcript enough to give further ammunition
Speaker 1: to the Democrats and their impeachment push, or is this
Speaker 1: sort of edifying for President Trump that he didn't necessarily verbatim,
Speaker 1: threatened to withhold aid in return for further investigation. So, so,
Speaker 1: impeachment is more of a political process than a legal process.
Speaker 1: The Constitution says the president can impeach for high crimes
Speaker 1: and misdemeanors, but leaves it to Congress to decide what
Speaker 1: those are. Uh. So, I don't I don't know if
Speaker 1: the President violated a law. Here. We y're told that
Speaker 1: the Department of Justice conducted an investigation um into whether
Speaker 1: the President violated campaign finance law by soliciting the President
Speaker 1: of Ukraine's help investigating Joe Biden, and do o J
Speaker 1: determined that he didn't. Uh. But we're also told that
Speaker 1: at the time d o J conducted this investigation, they
Speaker 1: were not aware that the president had frozen military aid
Speaker 1: to Ukraine head of a call. UM, So I you know,
Speaker 1: I would say this is squarely within the realm of
Speaker 1: things that Congress would scrutinize. Uh. One of the Commerce's
Speaker 1: highest responsibilities is to conduct over stud of the executive branch.
Speaker 1: And UH. I think if any president had having had
Speaker 1: behaved like this in a phone call with a foreign leader, UM,
Speaker 1: it would very well rise the level of investigation by Congress.
Speaker 1: So is it the sense here? You know? The next steps?
Speaker 1: I guess it's probably the question we have the president.
Speaker 1: I believe it's going to have a press Commerce today
Speaker 1: at four pm Eastern. UH. Any expectations here about the
Speaker 1: tax team might take, well, he's been he's been very
Speaker 1: defensive so far about his call with Lensky. He's called
Speaker 1: it a perfect call. So he did nothing wrong. I
Speaker 1: don't know why he calls it a perfect call given
Speaker 1: what is right here on on the page that I'm
Speaker 1: looking at, showing that he he asked a foreign leader
Speaker 1: to investigate a political arrival. That's that's not a normal
Speaker 1: thing for a president to ask of a of a
Speaker 1: foreign a foreign leader. Actually, Alex, that's what I wanted
Speaker 1: to ask you, I mean, is there a president for this?
Speaker 1: I've never heard of one. I've I've never heard of
Speaker 1: something like this happening before. I'm not aware of a
Speaker 1: previous president, at least in modern US history, Uh, asking
Speaker 1: a foreign leader to get involved in a U S election.
Speaker 1: So one of the issues that that Tim O'Brien Bloomberg
Speaker 1: opinion columnists put in a column yesterday was the big
Speaker 1: issue is to focus on the fact that don't focus
Speaker 1: necessarily on whether there was a quid pro quo asked
Speaker 1: by President Trump, focused more on the fact that the
Speaker 1: call was made to ask a foreign government to interfere
Speaker 1: in an election, and that in and of itself, is
Speaker 1: uh an impeachable or could could support an impeachment process.
Speaker 1: Is that the thinking within Washington? Or does the quid
Speaker 1: pro quel really need to be proven? Uh? No, I
Speaker 1: think I think Democrats definitely feel like there doesn't have
Speaker 1: to be a quid per quoil, that that's simply inviting
Speaker 1: or or asking a foreign leader to to get involved
Speaker 1: in in an election. Um is enough on its face,
Speaker 1: but but let's also let's also kind of you know,
Speaker 1: you could almost you can almost say that the quid
Speaker 1: per quota is already established. The Ukraine is dependent on
Speaker 1: American military aid. If the President of the United States
Speaker 1: calls up the president of Ukraine and asked him to
Speaker 1: do something, there is a there is even if he
Speaker 1: doesn't make the threat explicit, there is an implication that
Speaker 1: US aid maybe at risk if the Ukrainian president doesn't
Speaker 1: agree to do whatever the American President is asking me
Speaker 1: to do. So, so the quid pro quo is there.
Speaker 1: It's implied even without the President explicitly threatening the Ukrainian president. So, Alex,
Speaker 1: what's the next step here? Well, the next step is
Speaker 1: that there's there's going to be a lot of work
Speaker 1: on on the on in the House of Representatives by
Speaker 1: multiple committees um to to apparently as symbol a case
Speaker 1: for impeachment of of the president. Any support by Republicans
Speaker 1: there is none so far, but uh, you know, at
Speaker 1: least at least one Republican, Mitt Romney of of Utah
Speaker 1: Senter Mitt Romney of Utah has has raised some concerns
Speaker 1: about what happened in this phone call with the President
Speaker 1: of Ukraine UH and has said he would reserve judgment
Speaker 1: on on any consequences until after the facts had were gathered,
Speaker 1: and so we're we're gathering those facts now. We we
Speaker 1: think that by the end of the week will also
Speaker 1: have uh this whistleblower complaint. Uh. An intelligence community whistle
Speaker 1: whistle blower made a complaint to the Inspector General for
Speaker 1: the Intelligence community based on in part this call between
Speaker 1: Trump and the press of Ukraine as well as other events.
Speaker 1: UH and uh and and that complaint has been demanded
Speaker 1: by by Democrats in Congress. Alex Wayne, thank you so much,
Speaker 1: alex Wayne. White House reporter based in Washington, d C.
Speaker 1: Certainly there is a lot of interest in President Trump's
Speaker 1: phone call with Ukraine, at the transcript of which was released.
Speaker 1: Joining us now to discuss Justin sink Bloomberg News, White
Speaker 1: House reporter, Justin. Have have we gotten any responses yet
Speaker 1: from either the White House Republicans or Democrats? Uh, in
Speaker 1: the wake of the release of this transcript. Yeah. So,
Speaker 1: I think obviously a lot of Democratic lawmakers are expressed
Speaker 1: and outrage over what they see is the President acting
Speaker 1: inappropriately by asking Ukraine to participate in this investigation of
Speaker 1: Joe Biden. The President his allies, though, have kind of
Speaker 1: insisted throughout this process that the President didn't do anything wrong.
Speaker 1: They say, uh, that it's normal operating procedure or within
Speaker 1: the bounds of acceptability for the president to um push
Speaker 1: for an investigation when there's possible wrongdoing. And they make
Speaker 1: the argument that the five page transcript shows that the
Speaker 1: President didn't necessarily link his freezing of foreign aid or
Speaker 1: even foreign aide generally with the buying investigation, although he
Speaker 1: does discuss both topics on the on the call and
Speaker 1: Justin's isn't you know, isn't simply the fact that the
Speaker 1: president asked the President Trump asked the leader of a
Speaker 1: foreign nation to potentially interfere in a U S election.
Speaker 1: Isn't that in and of itself? Uh problematic and maybe
Speaker 1: even enough to support impeachment. I mean, that's certainly the
Speaker 1: argument that the critics of the president are making today
Speaker 1: and that uh, you know, Democrats, including Hillary Clinton, have
Speaker 1: set our grounds for impeachment. Now, the President says and
Speaker 1: has defended himself by arguing that there was possible misconduct
Speaker 1: by by Joe Biden that hasn't been sort of substantiated.
Speaker 1: All of our reporting indicates that, uh, Joe Biden made
Speaker 1: the call to to get rid of a prosecutor in Ukraine. Uh,
Speaker 1: not based on his son's financial interests, but based on
Speaker 1: the policy within the Obama administration. But but the White
Speaker 1: House is going to make the argument that that this
Speaker 1: was just sort of, uh an attempt by this White
Speaker 1: House to to address possible corruption. Have we already think
Speaker 1: from Republican leaders. Republican leaders so far have have sort
Speaker 1: of downplayed the police this and are are making the
Speaker 1: argument that Democrats are sort of singularly focused on impeaching
Speaker 1: the president. It's it's a very similar um approach to
Speaker 1: what we heard in the aftermath of the Mala report
Speaker 1: coming out, where again the President engaged in some conduct
Speaker 1: that um was certainly outside the sort of norms that
Speaker 1: we we expect, but didn't rise the level of illegality.
Speaker 1: And so they're making the areament that Democrats are uh
Speaker 1: pushing too hard for this impeachment issue. So justin many
Speaker 1: observers have suggested that the more damning piece of evidence
Speaker 1: maybe the whistleblowers report per se, is there sense of
Speaker 1: when if that will be released and will be releasing
Speaker 1: its entirety, Yeah, so we're not entirely sure when the
Speaker 1: public will get a chance to look at or if
Speaker 1: the politic will get a chance to look at this
Speaker 1: whistle blower report. But there is an expectation that the Congress,
Speaker 1: which is holding hearings tomorrow on this issue, will will
Speaker 1: at least in a classified setting, be able to review
Speaker 1: uh some if not all, of the whistle blower report.
Speaker 1: So we we may get additional details that can help
Speaker 1: give a bigger picture of what the Trump White House
Speaker 1: was up to and what the president was up to
Speaker 1: beyond this this specific called transcript as soon as tomorrow.
Speaker 1: Just and is there any precedent that we can look
Speaker 1: to in terms of how the president's phone call went
Speaker 1: or didn't go according to the way it should have
Speaker 1: I mean, in other words, uh, does the law or
Speaker 1: precedent offer any guidance for us. So another interesting kind
Speaker 1: of piece of information that came out today is that
Speaker 1: the Justice Department, because of this whistleblower um flagging concern
Speaker 1: over the call, did do a legal review of it
Speaker 1: to see if if President Trump had violated campaign finance law,
Speaker 1: as as he encouraged them to look into into Joe Biden.
Speaker 1: The Justice Department ultimately concluded that there was not um
Speaker 1: that the president didn't break the law. That they didn't
Speaker 1: see anything necessarily improper, but um senior administration who official
Speaker 1: told us that that that that did not include a
Speaker 1: consideration of the freezing of Youkran's aid. And so I
Speaker 1: think a lot of critics of the White House are
Speaker 1: also going to pot not that the Justice foreman is,
Speaker 1: of course um run by Attorney General Barr, who has
Speaker 1: mentioned in this transcript and who is a close political
Speaker 1: ally of the president. Justin what's the sense of next
Speaker 1: steps here? Yeah, So I think we're looking at two
Speaker 1: big kind of events on the very short term horizon.
Speaker 1: One is the President is actually meeting with the Ukrainian
Speaker 1: president later this afternoon, so I'm sure he's going to
Speaker 1: feel questions and talk about this then, and especially at
Speaker 1: a press conference schedule for four pm at the end
Speaker 1: of the United Nations later this afternoon. So we're going
Speaker 1: to hear a lot from the President later today as
Speaker 1: he tries to explain his actions. And then, of course
Speaker 1: we've got these congressional hearings going forward on the next
Speaker 1: couple of days, where we're more information, particularly from the
Speaker 1: mouth of the whistleblower, may might start to come out.
Speaker 1: Justin if we look at the market response. Initially, there
Speaker 1: was a leg lower in the SMP and NASDAC that
Speaker 1: has bounced back since. So basically, people in the market
Speaker 1: seem to be suggesting this is not that big of
Speaker 1: a deal, or at least it doesn't move the needle
Speaker 1: materially more toward impeachment. Does that cohere with what people
Speaker 1: who you speak with seem to think. Yeah, I mean,
Speaker 1: I think that there's obviously a lot of political attention
Speaker 1: on this entire controversy, but the basic math hasn't changed
Speaker 1: here in Washington, which is the Republicans continue to control, uh,
Speaker 1: the United States Senate, and that there's nowhere near the
Speaker 1: votes that you would need to actually remove Donald Trump
Speaker 1: from office. So while Democrats might want to sort of
Speaker 1: send a political message that they find this behavior to
Speaker 1: be unacceptable, uh, something that would actually remove the president
Speaker 1: from office and thereby potentially change policy and impact markets
Speaker 1: is not something that that seems likely at this point,
Speaker 1: Justine think thanks so much for joining us. Justin sink
Speaker 1: as a Bloomberg News White House reporter giving us the
Speaker 1: latest reporting on the call summary that was made public
Speaker 1: between the of the call between President Trump and the
Speaker 1: President of the Ukraine. We are broadcasting Alive from the
Speaker 1: Bloomberg Global Business Forum here in New York City at
Speaker 1: the Plaza Hotel, hob nobbing with the world's leaders, frankly
Speaker 1: as well as the leaders of the major corporations as
Speaker 1: well as the largest asset management and managers in the world.
Speaker 1: Among them Dylan Play a chief executive officer of Temasek International,
Speaker 1: which manages two thirty five billion dollars, and we actually
Speaker 1: had an opportunity to sit down and speak with him.
Speaker 1: Let's take a listen. We want to start with the
Speaker 1: theme of the Global Business Forum, which is sustainability. And
Speaker 1: I'm wondering how much you have shifted your investments with
Speaker 1: E s G sorts of parameters to sustainability in mind.
Speaker 1: So this is a journey that we've started. We started
Speaker 1: about three years ago and now we're looking at it
Speaker 1: in a very listic manner. There are three parts to it.
Speaker 1: I would say first is, uh, we're put in place
Speaker 1: at E s G framework for each of the investments
Speaker 1: that we're looking at right now from the time that
Speaker 1: we it first come to the pipeline to evaluation to
Speaker 1: eventual execution. And it's very clear in our minds. Unless
Speaker 1: it passes in the e s G framework. Where either
Speaker 1: we've identified problems that can be resolved or the company
Speaker 1: is largely in line with the framework, we won't proceed
Speaker 1: with investment. Now we have six hundred investments intomastic, so
Speaker 1: we're now extending the framework into our existing investments so
Speaker 1: that we see improvement and whatever we can do with
Speaker 1: respect to e s G factors. The third element has
Speaker 1: to do with what we're trying to do for sustainable
Speaker 1: investments that include sustainable living for example, alternative proteins, anything
Speaker 1: to do with water efficiency, to look at resource efficiency.
Speaker 1: The second is to consider the issue of the carbonization.
Speaker 1: How we can go about reducing the cuboon footprints of
Speaker 1: the companies that we control, reduce our own cuboon footprint,
Speaker 1: trying to see how we can influence companies in which
Speaker 1: we are minority shareholdings to think about reducing their carbon footprint.
Speaker 1: Would review towards seeing how our corvered footprint for the
Speaker 1: entire portfolio can be halved by twenty And the final
Speaker 1: thing is to look at sustainable solutions. That includes things
Speaker 1: like environmental entering. Solutions which are relevant in the context
Speaker 1: of Asia, include sustainable finance because so much what Asia
Speaker 1: needs infrastructure and the and there's always a tension between
Speaker 1: affordability and what you need to do for climate change.
Speaker 1: And so we think that the key part of this
Speaker 1: is to make sure that there is a form of
Speaker 1: blended finance. It's brought to to the needs of the region.
Speaker 1: And we are looking now to see how we can
Speaker 1: plate that. So the companies that you've invested in, how
Speaker 1: typically how receptive other management teams and the boards to
Speaker 1: some of the your sustainability and and e s g
Speaker 1: in initiatives. Increasingly so because I think they see the
Speaker 1: winds of change. Uh their customers are asking for it.
Speaker 1: They have to look at their production methods to see
Speaker 1: whether it's in line with what their customers will expect
Speaker 1: them to do. Uh. So most of them realize that
Speaker 1: they have to start their journey, some of them further
Speaker 1: along the process. Some are of obviously thinking about how
Speaker 1: best approach it. So I think these days we find
Speaker 1: it as we talked to him about this, as much
Speaker 1: as you talked to about you know, their business strategies
Speaker 1: and so on, We're getting a more receptive audience with
Speaker 1: these companies right now. UM, I want to shift gears
Speaker 1: a little bit, because we've heard a lot about the
Speaker 1: groundswell of cash just pouring into a lot of markets
Speaker 1: and particularly private markets around the world in time. Second,
Speaker 1: I know has been involved in that. I mean you
Speaker 1: have to be as you seek out bigger returns. How
Speaker 1: concerned are you about some of the evaluations that you're
Speaker 1: seeing in markets today? So I think the first thing
Speaker 1: we have to bear in mind we're in a low inflation,
Speaker 1: lower interest rate, lower growth, lower return environment. So your
Speaker 1: traditional instruments for returns, for example, fixed income and so on,
Speaker 1: I'm not going to give you the same returns that
Speaker 1: you're you're used to. So more and more money is
Speaker 1: going to alternatives. Sopping wealth funds are shifting more of
Speaker 1: all of the capital in terms of as an allocation
Speaker 1: to alternatives. So there is a lot of capital looking
Speaker 1: for real and two returns. Now there may be too
Speaker 1: much capital out there looking at the same range of
Speaker 1: investments that we're looking at um And are we going
Speaker 1: to reduce our investment return framework? Monswers No. Uh, does
Speaker 1: that mean there's gonna be very difficult for us to
Speaker 1: source investments that we need to see to get a
Speaker 1: better returned answers Yes, so valuations are a key part
Speaker 1: to that, and we're more than prepared to walk away.
Speaker 1: We feel it doesn't mean a return fessial for the
Speaker 1: long term. So give us the sense of kind of
Speaker 1: the environment out there. I know you you guys are
Speaker 1: invested very aggressively around the Asia. Given the trade tensions
Speaker 1: that we continue to see between the US and China.
Speaker 1: What are you seeing in in your part of the world,
Speaker 1: in some of the opportunities that you're looking at. So
Speaker 1: the number one destination for our capital in the last
Speaker 1: five years has been United States. Number two destinations China.
Speaker 1: So the US China issue, it's not exactly a friendly
Speaker 1: one to US um but look, we have to take
Speaker 1: the wall as it is. You know, we have to
Speaker 1: find our way through the difficulties that that the current
Speaker 1: relationship puts forward to all of us as investors, and
Speaker 1: we have to find a way in which we can
Speaker 1: continue to look for good investments in the areas that
Speaker 1: we are focused on, whether they be in the United
Speaker 1: States or where do they be in China? All for
Speaker 1: that ment, in Europe and India and elsewhere. What's the
Speaker 1: one area that you've been adding your adding to your
Speaker 1: allocation The most technology. So maybe I'll put it this way.
Speaker 1: We have five focus areas. Technology is one life sciences, biotech,
Speaker 1: the second financial services, non bankings, The third to insurance, fintech, payments,
Speaker 1: asset management, consumer because it's such a big thing with
Speaker 1: rising affluence is the fourth and the fifth actually which
Speaker 1: is the most recent and the most exciting. First is
Speaker 1: agribios Sciences. Gives an example of agri bios sciences. So
Speaker 1: for example, you know we're investing in possible foods, you know,
Speaker 1: so alternative proteins. I think you all know about it
Speaker 1: beyond me. Well, we chose impossible foods of a beyond
Speaker 1: time will tell. We'll probably that we be be two witness
Speaker 1: maybe more. Um that we looking at ways in which
Speaker 1: we look at vertical farming, uban farming, look at ways
Speaker 1: in which that could be substitutes for hubicides pesticides where
Speaker 1: less chemicals can be used. So just real quick, here,
Speaker 1: is there any area completely avoiding right now? Well, I
Speaker 1: don't think we're going to be investing fossil fuels as
Speaker 1: you continue path to sustainability. Yeah, and ergo, that's why
Speaker 1: I'm sure you're at this conference. Delon Pila, Thank you
Speaker 1: so much, for joining us CEO of Timasak International, giving
Speaker 1: his thoughts on his the global investment of Tamasak and
Speaker 1: some of the investments and sustainability and E s G
Speaker 1: and and how that factors into their investments. Indeed, thank
Speaker 1: you so much, thank you for having me. That was
Speaker 1: delon Play. We spoke to him earlier this morning, CEO
Speaker 1: of Timasak International, some very interesting commentary here as we're
Speaker 1: here at the Bloomberg Global Business Form Conference here in
Speaker 1: New York. Right now, it's shift focus to We Work.
Speaker 1: It lost its chief executive officer and co founder Adam Newman.
Speaker 1: It's bonds, it does not have stocks because it has
Speaker 1: not been able to do it's initial public offering at
Speaker 1: the value that it would like to do it or
Speaker 1: anywhere close. Bonds trading down significantly as we look ahead
Speaker 1: to the future share of Ada. Bloomberg opinion columnist joining
Speaker 1: us in our interactive broker studios, Shira, how much does
Speaker 1: the departure of Adam Newman really change the landscape for
Speaker 1: We Work? I mean it doesn't. Look it does change things, right,
Speaker 1: because he was one element, a significant element of both
Speaker 1: We Work success and ultimately it's um kind of self
Speaker 1: dealing and bad management, oversight and business model. So changing
Speaker 1: horses does matter. But at the same time, everybody who
Speaker 1: enabled We Work to get to the point where it
Speaker 1: is today is still there. That includes Newman himself. He
Speaker 1: is a significant shareholder, remains a significant shareholder. He's going
Speaker 1: to be on the board, right He's a non executive chairman.
Speaker 1: All the investors are still there, the bankers, the lawyers,
Speaker 1: all the executives. The company is now being run by
Speaker 1: these two insiders. So We Work has a lot of
Speaker 1: questions to answer about both its business model and the
Speaker 1: structure of the company, and that's being those decisions are
Speaker 1: being made by more or less the same people who
Speaker 1: were there all along. So sure, one of the key
Speaker 1: figures for me is Masa Yoshi san of soft Bank.
Speaker 1: Um is there any sense of how committed he and
Speaker 1: the fund is to this company given some of the
Speaker 1: term ra what we've seen. I think that's a key question,
Speaker 1: and I think we still don't really have a good
Speaker 1: answer as to what made sown and soft Bank apparently
Speaker 1: turned against We Work literally at the last minute, right
Speaker 1: in the last few days, it seems, and I at
Speaker 1: least noticed that in We Work statement yesterday about Adam
Speaker 1: Newman's departure and the changes in the management team there.
Speaker 1: Soft Bank was not mentioned. They were not quoted, so
Speaker 1: soft Bank has not said anything, but look, this company
Speaker 1: needs money urgently, and soft Bank is certainly one of
Speaker 1: the more obvious candidates to provide that financing. And there
Speaker 1: was some reporting today from Bloomberg and others that soft
Speaker 1: Bank is looking at potentially additional UM loans and an
Speaker 1: equity infusion, either from soft Bank or from real Estate.
Speaker 1: And how much a shift in leadership hurt potentially we work.
Speaker 1: I mean, we're talking about Adam Newman as being a
Speaker 1: highly flawed leader. Certainly he was, but he also led
Speaker 1: the expansion of the company and had the vision and
Speaker 1: there was a certain cult of personality. Is it a
Speaker 1: liability that he's leaving at all? I think right now
Speaker 1: that we work as we know it is over, and
Speaker 1: whatever emerges is going to be a very different kind
Speaker 1: of company top to bottom. Right, I don't think they're
Speaker 1: going to be able to continue in you this kind
Speaker 1: of breakneck office office expansion they've had for the last
Speaker 1: few years under Newman, this kind of sprawl of the
Speaker 1: company into all these ancillary Uh, we related activities right
Speaker 1: as a kids school, a coding academy, a m communal
Speaker 1: living apartment complexes that may no longer be viable. And
Speaker 1: those were things that were part of Newman's vision for
Speaker 1: the company, and I don't think they're viable anymore. And
Speaker 1: so that means that Newman may not be the right leader.
Speaker 1: If we were going forward, is going to be less
Speaker 1: ambitious and less we worky. So here I know there's
Speaker 1: some financial issues here in the relatively near term. I
Speaker 1: think they were going to get some big funding round
Speaker 1: a debt round, a credit facility from a bunch of banks,
Speaker 1: but that was continguent upon an I p O. Now
Speaker 1: it looks like the IPO was shelved, at least for
Speaker 1: the near term. So what's the sense of the near
Speaker 1: term liquidity of this company? Yes, we Work needs money,
Speaker 1: it needs it soon. It is on roughly a three
Speaker 1: billion dollar annual burn rate this year cash burn rate
Speaker 1: this year, and that meant it was going to need
Speaker 1: money by next year. And as you said, the plan
Speaker 1: was to sell several billions of dollars in stock in
Speaker 1: the I p O. And there were loans, loan agreements
Speaker 1: in place for six billion dollars that was tied in
Speaker 1: part to the completion of the I p O. And
Speaker 1: you're right that right now it doesn't look like that
Speaker 1: an I p O is is going to happen, at
Speaker 1: least not in the next few months. So yeah, the
Speaker 1: company is going to need cash. Again, there's been reporting
Speaker 1: that the company may significantly pairback expenses and cut its workforce.
Speaker 1: That will certainly ease the cash burn, although that would
Speaker 1: be a significant blow to the company and those employees
Speaker 1: as well. And again there's been reporting of the company
Speaker 1: is talking about additional loans and and equity sales to
Speaker 1: kind of keep the company going. Shia. I think this
Speaker 1: takes us to a broader conversation about valuations because we
Speaker 1: work sort of comes after the Uber issues and as
Speaker 1: a ton of money pours into tech startups pretty broadly,
Speaker 1: and I'm just wondering what are we hearing from people
Speaker 1: in terms of how much venture capitalists are sort of
Speaker 1: gut checking themselves and what they're willing to accept in
Speaker 1: terms of private valuations for some of what they're investing in.
Speaker 1: You know, the venture capital industry has been in a
Speaker 1: really weird place the last few years. I think almost
Speaker 1: everybody who's in the business of backing technology startups will
Speaker 1: say that there's too much money slashing around chasing too
Speaker 1: few good companies, and that has made valuations get too
Speaker 1: big and companies get funded excessively, But no one is
Speaker 1: No one is willing to say that they're part of
Speaker 1: the problem, right that it's always the other guy. And
Speaker 1: the other guy recently has been soft Bank with this
Speaker 1: hundred billion dollar Vision Fund that they've poured into companies
Speaker 1: like we Work in Uber and others. So there is
Speaker 1: definitely too much money slashing around chasing too few good
Speaker 1: companies and um. And yet I don't know that anything
Speaker 1: is going to change in the near term because of
Speaker 1: what's happened at We Work, because there's always this tendency
Speaker 1: to say, well, we Work is kind of a one off.
Speaker 1: That was a soft Bank thing, they overinflated this company,
Speaker 1: or Uber was a one off thing. Everything is a
Speaker 1: one off thing. That's somebody else's fault. I certainly hope
Speaker 1: that in the corners of Silicon Valley, where that your
Speaker 1: capitalists live and work, that there's been some rethinking about
Speaker 1: what they personally need to do to prevent companies like
Speaker 1: We Work from happening again, whether that's over capitalization or
Speaker 1: entrenching too much, too much power in these founders without oversight,
Speaker 1: sure of a day. Thanks so much for joining us
Speaker 1: talking to us about what is the latest on we work.
Speaker 1: Here is a Bloomberg Opinion technology columnists for Bloomberg Opinion.
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