1 00:00:02,720 --> 00:00:10,559 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,600 --> 00:00:14,560 Speaker 1: Bloomberg Intelligence Podcast. Catch us Live weekdays at ten am 3 00:00:14,600 --> 00:00:17,840 Speaker 1: Eastern on Apple, Cocklay and Android Auto with the Bloomberg 4 00:00:17,920 --> 00:00:21,040 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:21,360 --> 00:00:23,480 Speaker 1: or watch US live on YouTube. 6 00:00:23,760 --> 00:00:25,119 Speaker 2: Paramount updating. 7 00:00:25,520 --> 00:00:28,120 Speaker 3: It's bid for Warner Brothers, but it did not increase 8 00:00:28,120 --> 00:00:31,200 Speaker 3: its price. It's sticking to that thirty dollars a share 9 00:00:31,280 --> 00:00:33,960 Speaker 3: offer for Warner Brothers. But what they did do is 10 00:00:34,400 --> 00:00:38,680 Speaker 3: offer some more commitment on financing. Forty one billion dollar 11 00:00:38,800 --> 00:00:40,000 Speaker 3: new equity backstop. 12 00:00:40,400 --> 00:00:40,640 Speaker 2: KEITHA. 13 00:00:40,680 --> 00:00:44,519 Speaker 3: Rongenathen is Bloomberg Intelligence analyst on US Media and she's. 14 00:00:44,280 --> 00:00:47,279 Speaker 2: Here with us. Now does this move the needle at all? Here? 15 00:00:47,440 --> 00:00:54,360 Speaker 3: Gita for Paramount to basically talk about the financing and 16 00:00:54,600 --> 00:00:57,480 Speaker 3: how it's going to backstop it by the Ellison family, 17 00:00:57,520 --> 00:00:59,480 Speaker 3: but not change the actual price. 18 00:01:00,880 --> 00:01:05,520 Speaker 4: Yeah, not completely sure, Scarlett. I do think that they 19 00:01:05,640 --> 00:01:09,400 Speaker 4: need to up the price. You know, Warner Brothers Discovery. 20 00:01:09,440 --> 00:01:11,520 Speaker 4: Of course, the main concern that they raised was financing, 21 00:01:11,520 --> 00:01:15,520 Speaker 4: but they also called the proposal inadequate, inferior to Netflix, 22 00:01:15,560 --> 00:01:18,880 Speaker 4: and illusory. The inadequate really stems from the fact that 23 00:01:19,319 --> 00:01:22,480 Speaker 4: they feel that Paramount Skuid Dance is undervaluing their TV 24 00:01:22,680 --> 00:01:27,120 Speaker 4: network business pretty substantially. Plus they also talk about the 25 00:01:27,240 --> 00:01:30,280 Speaker 4: extra almost two dollars a share that they would need 26 00:01:30,560 --> 00:01:33,000 Speaker 4: from Paramount if they were to walk away from a Netflix. 27 00:01:33,040 --> 00:01:35,800 Speaker 4: This is for this is to cover both the termination 28 00:01:35,920 --> 00:01:39,440 Speaker 4: fee that Warner Brothers Discovery would own would owe Netflix, 29 00:01:39,480 --> 00:01:42,040 Speaker 4: as well as, you know, some of the financing costs. 30 00:01:42,240 --> 00:01:43,120 Speaker 2: So there's all of that. 31 00:01:43,160 --> 00:01:44,720 Speaker 4: You know, you kind of put all of that match 32 00:01:44,720 --> 00:01:47,480 Speaker 4: together and we come up with at least a thirty 33 00:01:47,520 --> 00:01:52,880 Speaker 4: two dollars fifty cent increased bid that Paramount would need 34 00:01:52,880 --> 00:01:55,280 Speaker 4: to present in order to kind of get the Warner 35 00:01:55,320 --> 00:01:57,760 Speaker 4: Brothers Discovery board back to the table. So, yes, the 36 00:01:57,760 --> 00:01:59,760 Speaker 4: financing helps a little bit, but not sure it really 37 00:02:00,080 --> 00:02:00,960 Speaker 4: changes the conversation. 38 00:02:01,360 --> 00:02:03,840 Speaker 5: We haven't heard a whole lot from Netflix recently. Are 39 00:02:03,840 --> 00:02:06,640 Speaker 5: they just quietly sitting on assign lines and confident in 40 00:02:06,680 --> 00:02:07,080 Speaker 5: their bid? 41 00:02:08,600 --> 00:02:10,920 Speaker 4: So they did, you know, put out a letter to 42 00:02:11,000 --> 00:02:15,960 Speaker 4: employees shareholders just kind of reiterating their commitment to the deal. 43 00:02:16,320 --> 00:02:18,280 Speaker 4: They think that it will go through. They don't think 44 00:02:18,320 --> 00:02:21,640 Speaker 4: they will have, you know, huge problems with the regulators. 45 00:02:22,000 --> 00:02:24,239 Speaker 4: And it was interesting today even in the Warner Brothers 46 00:02:24,320 --> 00:02:27,360 Speaker 4: Discovery letter that they put out suggesting that you know, 47 00:02:27,400 --> 00:02:30,440 Speaker 4: they don't see or they rather that they view both 48 00:02:30,480 --> 00:02:35,280 Speaker 4: of the deals as equal from a regulatory perspective. And 49 00:02:35,320 --> 00:02:37,880 Speaker 4: one of the key numbers that they highlighted the Warner 50 00:02:37,880 --> 00:02:41,880 Speaker 4: Brothers Discovery team was the nine billion dollars in synergies. 51 00:02:42,200 --> 00:02:44,880 Speaker 4: So Paramount Skydan's basically talking about three billion dollars in 52 00:02:44,919 --> 00:02:47,680 Speaker 4: centergies from its Skydance deals six billion dollars from the 53 00:02:48,320 --> 00:02:51,239 Speaker 4: you know, Warner Brothers Discovery deals, saying that that will 54 00:02:51,280 --> 00:02:53,760 Speaker 4: actually put a lot of you know that that's bad 55 00:02:53,760 --> 00:02:56,240 Speaker 4: for Hollywood. Sure, it would result in a lot of 56 00:02:56,360 --> 00:02:59,240 Speaker 4: job losses, whereas the Netflix deal might actually be better. 57 00:02:59,480 --> 00:03:02,400 Speaker 3: So who knows, And I mean, this is something that's 58 00:03:02,400 --> 00:03:03,720 Speaker 3: going to play out over the next year and a 59 00:03:03,760 --> 00:03:07,320 Speaker 3: half to two years. Githa. We know that Jared Kushner, 60 00:03:07,440 --> 00:03:11,240 Speaker 3: the President's son in law, his private aquity firm, Affinity Partners, 61 00:03:11,440 --> 00:03:14,040 Speaker 3: was involved in the Paramount Skuydance deal. It was supposed 62 00:03:14,040 --> 00:03:16,640 Speaker 3: to contribute two hundred million dollars to the financing, but 63 00:03:16,760 --> 00:03:19,640 Speaker 3: it has since pulled out of this bid, perhaps because 64 00:03:19,680 --> 00:03:24,080 Speaker 3: of potential conflicts of interest. Does this change the scope 65 00:03:24,080 --> 00:03:26,840 Speaker 3: of Paramount Suiddances offer, Does it make it more attractive, 66 00:03:26,880 --> 00:03:28,800 Speaker 3: less attractive, or does it not really do much? 67 00:03:29,919 --> 00:03:32,600 Speaker 4: I think yes, you're right, Scarlett. The optics were definitely 68 00:03:32,639 --> 00:03:34,600 Speaker 4: bad and it kind of, you know, looked a little 69 00:03:34,639 --> 00:03:37,120 Speaker 4: bit questionable. So now they're kind of removing that, which 70 00:03:37,160 --> 00:03:40,080 Speaker 4: is which is definitely good. I think it's more positive 71 00:03:40,080 --> 00:03:43,040 Speaker 4: for the Paramount Skydance deal. That said, though, I think 72 00:03:43,040 --> 00:03:46,440 Speaker 4: they really really need to deliver a knockout bid, and 73 00:03:46,560 --> 00:03:48,720 Speaker 4: the knockout bid that we're kind of looking for is 74 00:03:48,760 --> 00:03:51,760 Speaker 4: something like thirty five dollars. I think that really then 75 00:03:51,880 --> 00:03:54,280 Speaker 4: gets Netflix thinking about, Okay, do we need to re 76 00:03:54,400 --> 00:03:57,040 Speaker 4: up our offer, and everybody gets excited at the Warner 77 00:03:57,040 --> 00:04:00,520 Speaker 4: Brothers Discovery board again until they do some thing really 78 00:04:00,560 --> 00:04:03,760 Speaker 4: significant on the pricing front. I don't think the Warner 79 00:04:03,800 --> 00:04:06,520 Speaker 4: Brothers Discovery board is going to want to come back 80 00:04:06,520 --> 00:04:08,640 Speaker 4: to the table to re engage Keith. 81 00:04:08,640 --> 00:04:11,160 Speaker 5: Have one of the comparable deals out there for a 82 00:04:11,200 --> 00:04:14,280 Speaker 5: spin off of Warner Brothers. Cable Networks is what Comcast 83 00:04:14,520 --> 00:04:17,000 Speaker 5: is spinning out. It's cable Networks and a company called 84 00:04:17,120 --> 00:04:19,720 Speaker 5: Versant is that publicly traded yet have they done that? 85 00:04:19,720 --> 00:04:20,239 Speaker 6: Spin out. 86 00:04:21,200 --> 00:04:24,560 Speaker 4: Yeah, they did. You know, they have a when issued trading. 87 00:04:24,600 --> 00:04:28,480 Speaker 4: The actual the complete distribution will will happen sometime in 88 00:04:28,960 --> 00:04:31,640 Speaker 4: January when it will start trading, but we do you 89 00:04:31,640 --> 00:04:34,600 Speaker 4: know they with the when issue trading, we do have 90 00:04:34,640 --> 00:04:36,640 Speaker 4: some price discovery for that stock. So right now, if 91 00:04:36,680 --> 00:04:39,920 Speaker 4: you kind of look at where versus just trading, we 92 00:04:40,040 --> 00:04:43,679 Speaker 4: get a d or a forward EBIDOM multiple of about 93 00:04:43,720 --> 00:04:47,240 Speaker 4: five point two times, which is higher than what paramount 94 00:04:47,760 --> 00:04:50,240 Speaker 4: Skydance had suggested for the valuation of the Warner Brothers 95 00:04:50,240 --> 00:04:53,280 Speaker 4: Discovery at four point five x. So already there we're 96 00:04:53,360 --> 00:04:56,599 Speaker 4: kind of seeing some signs that the valuation of the 97 00:04:56,600 --> 00:04:59,000 Speaker 4: global networks business should be slightly higher. 98 00:05:00,000 --> 00:05:01,680 Speaker 3: Do you see any other m and A taking place 99 00:05:01,720 --> 00:05:03,880 Speaker 3: in media? I know we're all fixated on the bidding 100 00:05:03,920 --> 00:05:07,080 Speaker 3: war for Warner Brothers Discovery, but at one point Comcast 101 00:05:07,120 --> 00:05:09,640 Speaker 3: was a potential bidder and it dropped out fairly early. 102 00:05:09,680 --> 00:05:12,000 Speaker 3: But are there any other deals kind of percolating in 103 00:05:12,000 --> 00:05:13,520 Speaker 3: the background that you would keep your eye on. 104 00:05:14,839 --> 00:05:17,760 Speaker 4: I think there's just a lot of consolidation that's waiting 105 00:05:17,760 --> 00:05:20,120 Speaker 4: to happen. Scarlett. I think people first want to wait 106 00:05:20,120 --> 00:05:22,680 Speaker 4: and watch a little bit see what happens with the 107 00:05:22,720 --> 00:05:26,400 Speaker 4: Warner Brothers Discovery situation kind of test out what's happening 108 00:05:26,440 --> 00:05:29,480 Speaker 4: with the regulators. But yeah, there are absolutely a lot 109 00:05:29,480 --> 00:05:33,479 Speaker 4: of smaller players, and you know, Netflix becoming bigger or 110 00:05:33,520 --> 00:05:36,560 Speaker 4: Paramount becoming bigger really kind of forces everybody to take 111 00:05:36,600 --> 00:05:39,160 Speaker 4: a hard look at their portfolios and see what they 112 00:05:39,200 --> 00:05:43,000 Speaker 4: should do next. As you rightly mentioned, NBC is the 113 00:05:43,000 --> 00:05:45,479 Speaker 4: one name that definitely comes up to mind. Comcasts NBC 114 00:05:46,040 --> 00:05:49,279 Speaker 4: they need something. Their Peacock platform is really subscale, so 115 00:05:49,640 --> 00:05:52,040 Speaker 4: it's really going to depend on whether they want to 116 00:05:52,080 --> 00:05:53,880 Speaker 4: do some kind of partnership or they actually need to 117 00:05:53,920 --> 00:05:57,480 Speaker 4: go out and acquire some other smaller networks, maybe AMC networks, 118 00:05:57,720 --> 00:06:00,880 Speaker 4: maybe some other kind of you know, streaming business. So 119 00:06:01,200 --> 00:06:03,000 Speaker 4: a lot of deals waiting to happen, but I think 120 00:06:03,080 --> 00:06:05,080 Speaker 4: this is really the big one that everybody's focused on 121 00:06:05,120 --> 00:06:05,599 Speaker 4: at the moment. 122 00:06:07,080 --> 00:06:10,159 Speaker 6: Stay with us. More from Bloomberg Intelligence coming up after this. 123 00:06:13,800 --> 00:06:17,480 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 124 00:06:17,560 --> 00:06:20,960 Speaker 1: weekdays at ten am Eastern on Applecarcklay and Android Auto 125 00:06:21,080 --> 00:06:24,120 Speaker 1: with the Bloomberg Business app. Listen on demand wherever you 126 00:06:24,160 --> 00:06:28,440 Speaker 1: get your podcasts, or watch us live on YouTube. 127 00:06:28,160 --> 00:06:32,680 Speaker 5: Let's switch gears to the airline business. Bankrupt Spirit Aviation Holdings, 128 00:06:32,680 --> 00:06:35,200 Speaker 5: you remember them, is in revived discussions to merge with 129 00:06:35,279 --> 00:06:38,279 Speaker 5: front Tier Group Holdings in a deal that could rescue 130 00:06:38,320 --> 00:06:42,280 Speaker 5: the deep discount airline from insolvency. Let's break this potential 131 00:06:42,320 --> 00:06:45,240 Speaker 5: deal down. But George Ferguson, senior airspace, defense and airlines 132 00:06:45,240 --> 00:06:49,520 Speaker 5: analysts for Bloomberg Intelligence, George, does it make sense putting 133 00:06:49,880 --> 00:06:53,400 Speaker 5: these two I'm going to call them struggling regional airlines 134 00:06:53,480 --> 00:06:55,559 Speaker 5: or discount airlines? Does it make sense to put that together? 135 00:06:57,360 --> 00:06:57,720 Speaker 4: You know what? 136 00:06:57,760 --> 00:07:01,120 Speaker 7: I think it might actually so this is you know, 137 00:07:01,200 --> 00:07:04,560 Speaker 7: back to the future. Originally sort of I think, you 138 00:07:04,600 --> 00:07:07,520 Speaker 7: know what we saw sort of set off a little 139 00:07:07,520 --> 00:07:11,640 Speaker 7: fight for Spirit Airlines was the initial uh you know 140 00:07:11,760 --> 00:07:15,680 Speaker 7: merger purchase from Frontier. Frontier taking the Spirit, jet Blue 141 00:07:15,720 --> 00:07:20,280 Speaker 7: decided they didn't want to let that those two you 142 00:07:20,320 --> 00:07:24,600 Speaker 7: know coalesce, you know, merge together and become a major 143 00:07:24,640 --> 00:07:27,400 Speaker 7: competitor to them, So they stepped in the middle, tried 144 00:07:27,440 --> 00:07:32,240 Speaker 7: to grab Spirit and after that everyone Spirit Frontier jet 145 00:07:32,240 --> 00:07:34,480 Speaker 7: Blue just went through some pretty rough times as fairs 146 00:07:35,760 --> 00:07:38,680 Speaker 7: weakened in the market. I think, you know, the economy 147 00:07:39,200 --> 00:07:43,920 Speaker 7: Flyer kind of faded out a little bit on higher 148 00:07:43,960 --> 00:07:48,280 Speaker 7: inflation and other problems, and so, you know, I think 149 00:07:48,400 --> 00:07:52,160 Speaker 7: where we're back to, though, is that Spirit and Frontier 150 00:07:52,200 --> 00:07:58,320 Speaker 7: had very similar business, uh you know, types, similar cultures. 151 00:07:58,760 --> 00:08:01,000 Speaker 7: I think if you put the two airplace airlines together, 152 00:08:01,120 --> 00:08:03,320 Speaker 7: now you have an airline that have something like three 153 00:08:03,400 --> 00:08:06,480 Speaker 7: hundred and fifty seats, I think there's enough other markets 154 00:08:06,480 --> 00:08:10,240 Speaker 7: they could go after. I mean, in comparison, you know Southwest, 155 00:08:10,240 --> 00:08:14,360 Speaker 7: which is is a domestic and sort of near to 156 00:08:14,440 --> 00:08:18,520 Speaker 7: the US kind of market airline, they have seven hundred airplanes. 157 00:08:18,520 --> 00:08:20,480 Speaker 7: They find a place to put all those airplanes. So 158 00:08:20,840 --> 00:08:24,040 Speaker 7: I think it could sort of charge growth up pretty 159 00:08:24,080 --> 00:08:27,040 Speaker 7: quickly for Frontier, sort of help them lay in an 160 00:08:27,040 --> 00:08:29,720 Speaker 7: extra hundred airplanes might not be a bad idea, and 161 00:08:29,760 --> 00:08:31,680 Speaker 7: they might get a really nice price on it. 162 00:08:31,800 --> 00:08:34,280 Speaker 3: But do two week airlines make a strong airline. 163 00:08:35,679 --> 00:08:40,240 Speaker 7: I mean, look, right now, I think the economy portion 164 00:08:40,320 --> 00:08:43,520 Speaker 7: of the business is reeling. It has too much capacity. 165 00:08:44,240 --> 00:08:46,880 Speaker 7: Spirit is shedding. Some of those airplanes are going to 166 00:08:46,880 --> 00:08:49,120 Speaker 7: go elsewhere. So we're you know, we're talking about an 167 00:08:49,120 --> 00:08:51,960 Speaker 7: airline that only has one hundred and I think if 168 00:08:52,000 --> 00:08:54,120 Speaker 7: you want to be competitive in the market. You have 169 00:08:54,160 --> 00:08:56,800 Speaker 7: to be able to fly sort of coast to coast 170 00:08:56,880 --> 00:09:00,160 Speaker 7: off of your customers, you know, a full comple men 171 00:09:00,200 --> 00:09:03,960 Speaker 7: of destinations. I think you need more half for those 172 00:09:04,040 --> 00:09:09,240 Speaker 7: loyalty programs that helped drive some better results as you 173 00:09:09,280 --> 00:09:11,839 Speaker 7: sell them, you know, credit cards and they buy their 174 00:09:11,880 --> 00:09:15,520 Speaker 7: groceries and things like that that on it. So I 175 00:09:15,520 --> 00:09:17,920 Speaker 7: don't think it hurts for Frontier to try to get 176 00:09:18,000 --> 00:09:21,000 Speaker 7: larger and to do it, to supercharge it through taking 177 00:09:21,000 --> 00:09:23,480 Speaker 7: one hundred airplanes out of Spirit. I don't think it's 178 00:09:23,520 --> 00:09:25,679 Speaker 7: a I don't think it's a bad idea. 179 00:09:26,520 --> 00:09:28,960 Speaker 6: Will the regulators allow this church, I. 180 00:09:28,960 --> 00:09:30,400 Speaker 7: Don't think it's going to be a problem, right. I 181 00:09:30,440 --> 00:09:33,880 Speaker 7: don't think it was originally a problem when when Jet 182 00:09:33,880 --> 00:09:36,840 Speaker 7: Blue was looking at Spirit and when Frontier was looking 183 00:09:36,880 --> 00:09:40,000 Speaker 7: at Spirit. But now Spirit's even smaller. We kind of 184 00:09:40,000 --> 00:09:43,840 Speaker 7: put them together today, looking at available seat miles in 185 00:09:44,000 --> 00:09:47,280 Speaker 7: one queue, a combined airline looked to us to be 186 00:09:47,400 --> 00:09:49,320 Speaker 7: the sixth largest in the country. 187 00:09:49,800 --> 00:09:50,600 Speaker 2: It was just. 188 00:09:50,600 --> 00:09:53,000 Speaker 7: Ahead of Jet Blue. If it adds I don't know. 189 00:09:53,000 --> 00:09:55,880 Speaker 7: If it adds you know, some premium seating and knock 190 00:09:55,960 --> 00:09:59,080 Speaker 7: some seating out of some of those airplanes, it might 191 00:09:59,120 --> 00:10:01,520 Speaker 7: not even beat Jet Blue. I don't think this is 192 00:10:01,520 --> 00:10:02,960 Speaker 7: a big issue for the US market. 193 00:10:03,080 --> 00:10:06,080 Speaker 3: What would this mean for jobs? Jobs at Spirit, jobs 194 00:10:06,080 --> 00:10:06,640 Speaker 3: at Frontier. 195 00:10:07,520 --> 00:10:09,920 Speaker 7: I mean, I think it could probably preserve some jobs, 196 00:10:09,960 --> 00:10:12,480 Speaker 7: because I don't think they're going to want to shrink 197 00:10:12,520 --> 00:10:16,400 Speaker 7: the airline operations. But I do think if Spirit doesn't 198 00:10:16,480 --> 00:10:21,079 Speaker 7: find someone to go with soon, that they may cease 199 00:10:21,120 --> 00:10:23,080 Speaker 7: to exist, and that obviously hurts jobs. 200 00:10:23,880 --> 00:10:27,000 Speaker 6: Stay with us. More from Bloomberg Intelligence coming up after this. 201 00:10:30,880 --> 00:10:34,560 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 202 00:10:34,640 --> 00:10:37,760 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 203 00:10:37,760 --> 00:10:41,079 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 204 00:10:41,120 --> 00:10:44,199 Speaker 1: you get your podcasts, or watch us live on YouTube. 205 00:10:44,960 --> 00:10:47,319 Speaker 5: Marry Scarthoompaul Sweeney live here in our Bloomberg and Director 206 00:10:47,320 --> 00:10:49,440 Speaker 5: Brooker Studio in New York City streaming live on. 207 00:10:49,360 --> 00:10:50,360 Speaker 6: YouTube as well. 208 00:10:50,360 --> 00:10:53,760 Speaker 5: Well. Home Builder Leonar reported some earnings today, A little 209 00:10:53,760 --> 00:10:58,200 Speaker 5: bit disappointing here on stock down five percent today, down 210 00:10:58,280 --> 00:11:00,760 Speaker 5: eighteen percent year to date. It's a big company, it's 211 00:11:00,800 --> 00:11:02,840 Speaker 5: kind of market capped for like twenty eight billion dollars. 212 00:11:03,360 --> 00:11:04,880 Speaker 5: But I'm looking at some of the homebuilders, a lot 213 00:11:04,880 --> 00:11:06,640 Speaker 5: of them are down double digits on a a year 214 00:11:06,640 --> 00:11:07,320 Speaker 5: to date basis. 215 00:11:07,360 --> 00:11:07,520 Speaker 8: Yere. 216 00:11:07,800 --> 00:11:10,800 Speaker 5: Let's break it down with Drew redding Hope, building analyst 217 00:11:10,920 --> 00:11:14,400 Speaker 5: for Bloomberg Intelligence. Drew talk to us about Leonar. What 218 00:11:14,440 --> 00:11:17,000 Speaker 5: did they say to the street here with their latest earnings? 219 00:11:18,200 --> 00:11:20,120 Speaker 8: Yeah, this was a This was a tough print for 220 00:11:20,240 --> 00:11:22,440 Speaker 8: Leonard at this cord. They came into the quarter with 221 00:11:22,840 --> 00:11:26,000 Speaker 8: a pretty low bar. Investor expectations had been coming down, 222 00:11:26,440 --> 00:11:30,520 Speaker 8: but they still disappointed on both orders and margins. And 223 00:11:30,880 --> 00:11:33,280 Speaker 8: even more concerning was the guidance they issued for the 224 00:11:33,280 --> 00:11:37,800 Speaker 8: first quarter, which was short on orders, closings, and margins. 225 00:11:37,800 --> 00:11:40,640 Speaker 8: So we think that consensus needs to come down pretty 226 00:11:40,640 --> 00:11:43,960 Speaker 8: sharply here. You know, what this tells us is that 227 00:11:44,559 --> 00:11:46,480 Speaker 8: even though rates have fallen to kind of that low 228 00:11:46,559 --> 00:11:49,360 Speaker 8: six percent range, I think we're about six point three now, 229 00:11:49,480 --> 00:11:55,960 Speaker 8: it doesn't appear that they're significantly catalyzing demand, which was 230 00:11:56,080 --> 00:11:57,920 Speaker 8: what a lot of people had been expecting. So I 231 00:11:57,960 --> 00:12:00,280 Speaker 8: think that points out that, you know, there's other things 232 00:12:00,320 --> 00:12:02,440 Speaker 8: going on. It's you know, we've we've said in the 233 00:12:02,480 --> 00:12:05,480 Speaker 8: past it's not just rates, but its prices and overall affordability. 234 00:12:06,360 --> 00:12:09,400 Speaker 8: But something we've heard pretty consistently from the builders is 235 00:12:09,920 --> 00:12:13,120 Speaker 8: that consumer confidence is really holding the market back. There's 236 00:12:13,160 --> 00:12:16,280 Speaker 8: concerns over the direction of the economy and concerns about 237 00:12:16,280 --> 00:12:18,280 Speaker 8: the labor market. If look, if you don't have a job, 238 00:12:18,440 --> 00:12:21,440 Speaker 8: you're you're certainly not buying a house. So we expect 239 00:12:21,480 --> 00:12:24,360 Speaker 8: in this environment the use of sales incentives to remain 240 00:12:24,400 --> 00:12:26,760 Speaker 8: elevate it and that's going to continue to pressure margins. 241 00:12:27,080 --> 00:12:29,199 Speaker 3: Yeah, I mean, they get volume, but they don't get 242 00:12:29,200 --> 00:12:33,440 Speaker 3: the profitability. So home builders are facing a lot of challenges. 243 00:12:33,480 --> 00:12:36,720 Speaker 3: They also face competition from the resale market. Talk a 244 00:12:36,720 --> 00:12:39,040 Speaker 3: little bit about the numbers involved here in terms of 245 00:12:39,080 --> 00:12:41,360 Speaker 3: new construction versus existing homes. 246 00:12:42,800 --> 00:12:45,720 Speaker 8: Yeah, that's a that's a great point. You know, the 247 00:12:45,840 --> 00:12:48,960 Speaker 8: lack of force sale inventory in the resale market was 248 00:12:49,000 --> 00:12:52,160 Speaker 8: a huge benefit to the builders over the last couple 249 00:12:52,160 --> 00:12:55,120 Speaker 8: of years. There weren't a lot of options with funneled 250 00:12:55,160 --> 00:12:57,600 Speaker 8: buyers into the new home market, where you know, builders 251 00:12:57,640 --> 00:13:00,320 Speaker 8: have been able to make monthly payments more attractive for 252 00:13:00,400 --> 00:13:03,360 Speaker 8: their use of buydowns. That dynamic has shifted over the 253 00:13:03,440 --> 00:13:06,319 Speaker 8: last year where we're starting to see pretty significant increases 254 00:13:06,880 --> 00:13:10,040 Speaker 8: in for sale listings in the resale market, particularly in 255 00:13:10,440 --> 00:13:16,120 Speaker 8: the most important markets for the builders. You know, think Florida, Texas, California. 256 00:13:16,200 --> 00:13:18,640 Speaker 8: So all of a sudden, there's this new competition for them, 257 00:13:18,720 --> 00:13:20,560 Speaker 8: and in order to get a sale, they're having to 258 00:13:20,559 --> 00:13:24,680 Speaker 8: fight harder for each one, which means higher incentives, more 259 00:13:24,760 --> 00:13:27,400 Speaker 8: pressure on pricing. Drue. 260 00:13:27,400 --> 00:13:30,400 Speaker 5: I'm looking at the existing home sales in the United States. 261 00:13:30,400 --> 00:13:32,480 Speaker 5: It has been been running at about a four million 262 00:13:33,160 --> 00:13:36,520 Speaker 5: home rate for the last few years, but historically that's 263 00:13:36,520 --> 00:13:39,160 Speaker 5: been a lot higher, hasn't it. So there just there's 264 00:13:39,160 --> 00:13:41,080 Speaker 5: just not a lot of supply of existing homes out 265 00:13:41,120 --> 00:13:41,920 Speaker 5: there in the marketplace. 266 00:13:42,080 --> 00:13:45,880 Speaker 6: And is that an interest rate story? 267 00:13:46,800 --> 00:13:50,320 Speaker 8: Yeah, it's partly an interest rate story. You know. The 268 00:13:50,360 --> 00:13:52,640 Speaker 8: one thing that we've consistently pointed out is that if 269 00:13:52,679 --> 00:13:55,160 Speaker 8: you look at the composition of outstanding mortgages, you have 270 00:13:55,200 --> 00:13:58,839 Speaker 8: a majority of current mortgage holders who have something well 271 00:13:58,880 --> 00:14:02,560 Speaker 8: below the prevailing mortgage rate, which is around six percent. Now, 272 00:14:03,120 --> 00:14:04,920 Speaker 8: a lot of people during the pandemic, we're able to 273 00:14:04,920 --> 00:14:07,120 Speaker 8: lock in rates in the fours and even you know, 274 00:14:07,200 --> 00:14:10,840 Speaker 8: the high threes, some perhaps in the twos. So, you know, 275 00:14:10,920 --> 00:14:13,680 Speaker 8: the existing home market has really been frozen if you 276 00:14:13,720 --> 00:14:16,800 Speaker 8: look at total volumes, you know, you mentioned we've been 277 00:14:16,880 --> 00:14:19,800 Speaker 8: hovering around this four million annualized rate for about three 278 00:14:19,880 --> 00:14:23,480 Speaker 8: years now, that's that's about twenty percent below what a 279 00:14:23,560 --> 00:14:27,680 Speaker 8: normalized market would look like. So you know, I think 280 00:14:27,920 --> 00:14:30,240 Speaker 8: rates coming in will certainly help. As we look out 281 00:14:30,240 --> 00:14:31,800 Speaker 8: to next year, we do think that you're going to 282 00:14:31,840 --> 00:14:34,560 Speaker 8: see perhaps mid to highest single digit growth in the 283 00:14:34,600 --> 00:14:37,080 Speaker 8: existing home market. But keep in mind we're coming off 284 00:14:37,400 --> 00:14:40,520 Speaker 8: you know, historically low levels, so some improvement, but I 285 00:14:40,560 --> 00:14:43,320 Speaker 8: think context is certainly key there well. 286 00:14:43,280 --> 00:14:46,640 Speaker 3: And are certainly not the only builder facing these these challenges. 287 00:14:47,280 --> 00:14:51,280 Speaker 3: How is the company specifically saying or explaining to investors 288 00:14:51,280 --> 00:14:54,920 Speaker 3: how it's adapting to this new normal of persistent affordability 289 00:14:54,960 --> 00:14:59,840 Speaker 3: concerns due to softening consumer confidence and a weakening job 290 00:14:59,840 --> 00:15:03,320 Speaker 3: mar get all these macro headwinds that it has no 291 00:15:03,360 --> 00:15:03,920 Speaker 3: control over. 292 00:15:05,320 --> 00:15:09,360 Speaker 8: Yeah, Lenar has been a pretty interesting example. Remember they're 293 00:15:09,400 --> 00:15:12,440 Speaker 8: the second largest builder by volume in the country, and 294 00:15:12,480 --> 00:15:16,680 Speaker 8: they run a production first business, which means their goal 295 00:15:16,840 --> 00:15:18,760 Speaker 8: is to push volumes, and over the last couple of 296 00:15:18,880 --> 00:15:23,240 Speaker 8: years they've been willing to sacrifice margin to get volume. 297 00:15:23,360 --> 00:15:25,040 Speaker 8: So you know, they'll tell you they're bringing a more 298 00:15:25,080 --> 00:15:28,440 Speaker 8: affordable product to the market, But what we've seen is 299 00:15:28,480 --> 00:15:31,400 Speaker 8: a dramatic drop in their gross margins. In just three years, 300 00:15:31,480 --> 00:15:33,720 Speaker 8: they've gone from you know, a gross margin in the 301 00:15:33,800 --> 00:15:36,440 Speaker 8: high twenty percent to something in the high teens percent 302 00:15:37,600 --> 00:15:40,200 Speaker 8: in twenty twenty five, so a very sharp ball. And 303 00:15:40,240 --> 00:15:43,520 Speaker 8: what they told us last quarter is that, you know, 304 00:15:43,640 --> 00:15:47,000 Speaker 8: they can only push so hard on this market. The 305 00:15:47,320 --> 00:15:49,320 Speaker 8: demand just simply isn't there. So in order to get 306 00:15:49,320 --> 00:15:52,200 Speaker 8: more sales, the incentives have to keep ratcheting up. So 307 00:15:52,600 --> 00:15:55,400 Speaker 8: what they told us is that they're they're making some 308 00:15:55,440 --> 00:15:58,160 Speaker 8: sort of a pivot into where they're looking to sustain 309 00:15:58,200 --> 00:16:00,480 Speaker 8: their gross margin. So what we want to hear from 310 00:16:00,520 --> 00:16:02,480 Speaker 8: them on the call is, you know, where do we 311 00:16:02,560 --> 00:16:06,600 Speaker 8: think that gross margin floor ultimately lands and is the 312 00:16:06,640 --> 00:16:10,120 Speaker 8: pullback in production that we've started to see it has 313 00:16:10,120 --> 00:16:10,920 Speaker 8: it normalized? 314 00:16:11,720 --> 00:16:14,880 Speaker 6: Stay with us more from Bloomberg Intelligence coming up after this. 315 00:16:18,760 --> 00:16:22,440 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 316 00:16:22,520 --> 00:16:25,920 Speaker 1: weekdays at ten am Eastern on Applecarclay, and Android Auto 317 00:16:26,000 --> 00:16:29,080 Speaker 1: with the Bloomberg Business App. Listen on demand wherever you 318 00:16:29,120 --> 00:16:32,120 Speaker 1: get your podcasts, or watch us live on YouTube. 319 00:16:32,760 --> 00:16:35,840 Speaker 5: The biggest IPO of the year priced last night, Medline. 320 00:16:36,080 --> 00:16:38,440 Speaker 5: It's not really sexy. It's like a medical device company. 321 00:16:38,880 --> 00:16:42,120 Speaker 5: But it's like a six plus billion dollar IPO. It's 322 00:16:42,160 --> 00:16:45,160 Speaker 5: just extraordin. It got some blue chip private equity of 323 00:16:45,160 --> 00:16:48,040 Speaker 5: folks behind it. I have no idea what this company does, 324 00:16:48,080 --> 00:16:50,880 Speaker 5: but I know who does, and that's Jonathan Palmer. He's 325 00:16:50,880 --> 00:16:54,200 Speaker 5: an analyst at Bloomberg Intelligence. He covers all the healthcare 326 00:16:54,560 --> 00:16:56,880 Speaker 5: device companies and things like that. And the good thing 327 00:16:56,880 --> 00:16:59,480 Speaker 5: about Bloomberg Intelligence, We're not an underwriter, we're not a 328 00:16:59,480 --> 00:17:02,600 Speaker 5: broker dealer. We could write on private companies. We can 329 00:17:02,640 --> 00:17:05,440 Speaker 5: write research on private companies, we can write research on 330 00:17:05,720 --> 00:17:06,560 Speaker 5: IPO companies. 331 00:17:06,600 --> 00:17:08,000 Speaker 6: And that's exactly what Jonathan did. 332 00:17:08,200 --> 00:17:10,359 Speaker 5: So he's out there with a definitive view on this 333 00:17:10,400 --> 00:17:14,240 Speaker 5: company for investors. Jonathan, what does Mendline do here and 334 00:17:14,240 --> 00:17:15,199 Speaker 5: why are they coming public? 335 00:17:15,840 --> 00:17:16,760 Speaker 9: Thanks Paul for having me. 336 00:17:16,840 --> 00:17:16,919 Speaker 5: So. 337 00:17:17,040 --> 00:17:20,320 Speaker 9: Medline is what's traditionally thought of as a distributor, but 338 00:17:20,400 --> 00:17:23,399 Speaker 9: I'd argue it's more than that. So really, this company's 339 00:17:23,440 --> 00:17:25,800 Speaker 9: been around for decades. It's started by the Mills family 340 00:17:25,880 --> 00:17:29,080 Speaker 9: in the sixties. In twenty twenty one, they sold to 341 00:17:29,119 --> 00:17:31,600 Speaker 9: private equity and now they're coming back to the public markets. 342 00:17:32,920 --> 00:17:35,720 Speaker 9: You know, what they traditionally did was provide distribution and 343 00:17:35,840 --> 00:17:37,199 Speaker 9: logistics to hospitals. 344 00:17:37,640 --> 00:17:38,800 Speaker 6: But over the years they. 345 00:17:38,680 --> 00:17:43,000 Speaker 9: Actually started making their own products, so things like masks, strape, sutures, 346 00:17:43,119 --> 00:17:45,520 Speaker 9: all the stuff that kind of you need into surgery 347 00:17:45,680 --> 00:17:47,800 Speaker 9: or to take care of patients. It's not too sexy, 348 00:17:48,160 --> 00:17:51,119 Speaker 9: but it has a much better margin than logistics. So 349 00:17:51,520 --> 00:17:54,240 Speaker 9: half the company today is their own medline brand products. 350 00:17:54,280 --> 00:17:57,680 Speaker 9: Half of it is distribution services. The secret sauce here 351 00:17:57,920 --> 00:17:59,920 Speaker 9: is that they basically give They don't give it all, 352 00:18:00,240 --> 00:18:02,840 Speaker 9: but they can essentially give away the distribution and logistics 353 00:18:02,920 --> 00:18:05,840 Speaker 9: piece while capturing all the margin on the product side. 354 00:18:06,160 --> 00:18:07,600 Speaker 2: How much market share do they have? 355 00:18:07,680 --> 00:18:10,199 Speaker 3: I mean, I've gone to hospitals before and seen the 356 00:18:10,240 --> 00:18:12,960 Speaker 3: midline name attached to I don't know, like a bed 357 00:18:12,960 --> 00:18:16,200 Speaker 3: for instance, or you know the canister on the wall 358 00:18:16,280 --> 00:18:17,800 Speaker 3: where you get your ro gloves. 359 00:18:17,920 --> 00:18:19,280 Speaker 9: Yeah, that's a good question. I mean I think it 360 00:18:19,560 --> 00:18:22,040 Speaker 9: would depend on the product category. I mean, from the 361 00:18:22,040 --> 00:18:25,120 Speaker 9: distribution side, they're just a little bit bigger than their 362 00:18:25,119 --> 00:18:28,159 Speaker 9: peers like Cardinal Health and what was Owen's and Minor. 363 00:18:28,440 --> 00:18:31,200 Speaker 9: It's kind of a a oligopoly where those big three 364 00:18:31,200 --> 00:18:34,800 Speaker 9: players are distributing to all the healthcare facilities. You know, 365 00:18:35,040 --> 00:18:38,160 Speaker 9: in terms of products, you know, it's about half of revenue, 366 00:18:38,240 --> 00:18:41,240 Speaker 9: so roughly twelve fifteen billion right here. 367 00:18:42,440 --> 00:18:44,760 Speaker 2: What about tariffs? How affected by tariffs are there? 368 00:18:44,800 --> 00:18:48,040 Speaker 3: Because I can't imagine that these items gloves, masks, swaps, 369 00:18:48,119 --> 00:18:49,240 Speaker 3: ranges are made in the US. 370 00:18:49,600 --> 00:18:52,000 Speaker 9: Well, they do have a fair amount of manufacturing in 371 00:18:52,520 --> 00:18:55,640 Speaker 9: the United States. They have talked about tariffs a couple 372 00:18:55,760 --> 00:18:58,760 Speaker 9: hundred million impact this year and next year. I mean 373 00:18:58,800 --> 00:19:00,840 Speaker 9: to be honest with you, For a be this size 374 00:19:00,840 --> 00:19:04,639 Speaker 9: and this scale, that that's a pretty surmountable hurdle. You know, 375 00:19:04,640 --> 00:19:06,880 Speaker 9: it'll get priced in in the next round of contract 376 00:19:06,880 --> 00:19:09,840 Speaker 9: negotiations and it'll be you know, business as usual going off, 377 00:19:09,840 --> 00:19:10,399 Speaker 9: going forward. 378 00:19:10,520 --> 00:19:12,800 Speaker 5: As a former banker, I just look at the deal 379 00:19:13,040 --> 00:19:19,400 Speaker 5: dynamics here, upsized offering offering finished north to ten times oversubscribed. 380 00:19:19,800 --> 00:19:22,720 Speaker 5: Top ten investors in this allocation took more than fifty 381 00:19:22,760 --> 00:19:25,200 Speaker 5: percent of the shares. Top twenty five investors took about 382 00:19:25,200 --> 00:19:28,440 Speaker 5: eighty percent of the deal. Here are the private equity guys, 383 00:19:28,440 --> 00:19:30,359 Speaker 5: are they selling here or is this just company shares? 384 00:19:31,119 --> 00:19:34,080 Speaker 9: It's a combination of both. And then the Mills family 385 00:19:34,160 --> 00:19:36,480 Speaker 9: still owns about twenty percent of the company and they're 386 00:19:36,520 --> 00:19:38,400 Speaker 9: not selling any shares good. 387 00:19:38,480 --> 00:19:40,159 Speaker 6: So what what what are you suppose each here? 388 00:19:40,200 --> 00:19:40,560 Speaker 8: Do you think? 389 00:19:41,160 --> 00:19:41,560 Speaker 2: I'm sorry? 390 00:19:41,600 --> 00:19:42,639 Speaker 6: What what are the U s of proce each here? 391 00:19:42,680 --> 00:19:43,640 Speaker 6: What are they going to use the money. 392 00:19:43,480 --> 00:19:46,360 Speaker 9: For primary to pay down debt? They had about sixteen 393 00:19:46,359 --> 00:19:48,719 Speaker 9: billion dollars of debt. You know that they levered up 394 00:19:48,720 --> 00:19:50,720 Speaker 9: on the private equity transaction, and they're paying down a 395 00:19:50,720 --> 00:19:53,120 Speaker 9: pretty healthy slug of that right here. 396 00:19:54,080 --> 00:19:55,400 Speaker 6: Stock hasn't even opened yet. 397 00:19:55,560 --> 00:19:58,320 Speaker 3: I mean, Jesus, well, when I was doing this, then 398 00:19:58,400 --> 00:19:59,160 Speaker 3: is the ticker to watch? 399 00:19:59,320 --> 00:20:01,480 Speaker 5: I was doing this if I didn't have it open 400 00:20:01,560 --> 00:20:04,560 Speaker 5: by ten third, not till the noon hour. Now, I 401 00:20:04,600 --> 00:20:06,159 Speaker 5: know my boss would come over and smack me with 402 00:20:06,200 --> 00:20:07,840 Speaker 5: this tennis record. That's happened many times. 403 00:20:07,960 --> 00:20:08,639 Speaker 2: You're not allout to do that. 404 00:20:09,200 --> 00:20:11,119 Speaker 6: We're opening up this kid, Let's go, let's go. 405 00:20:12,880 --> 00:20:15,840 Speaker 3: You had mentioned that some of its traditional competitors, like 406 00:20:15,960 --> 00:20:17,560 Speaker 3: Cardinal Health, for instance. 407 00:20:17,560 --> 00:20:19,280 Speaker 2: Is that still a competitor in that? 408 00:20:19,880 --> 00:20:22,840 Speaker 3: Does Cardinal Health also make its own products and sell 409 00:20:22,880 --> 00:20:23,680 Speaker 3: it under its own name? 410 00:20:23,840 --> 00:20:26,720 Speaker 9: They do, but not at the same scale as Medline. 411 00:20:26,720 --> 00:20:28,800 Speaker 9: And that's, like I mentioned before, really been their secret 412 00:20:28,800 --> 00:20:32,320 Speaker 9: sauce and how they've outcompeted their peers. The other thing 413 00:20:32,359 --> 00:20:35,360 Speaker 9: that's interesting is Cardinal. You know, Cardinal is much more 414 00:20:35,359 --> 00:20:38,600 Speaker 9: of a drug distributor with this medical division. I don't 415 00:20:38,600 --> 00:20:40,600 Speaker 9: think they want to be in that business long term. 416 00:20:40,640 --> 00:20:43,159 Speaker 9: Owns and Minor actually just sold their business for a 417 00:20:43,160 --> 00:20:47,040 Speaker 9: couple hundred million to private equity. So Medline's the queer 418 00:20:47,119 --> 00:20:49,119 Speaker 9: number one gold standard player in this space. 419 00:20:49,800 --> 00:20:53,639 Speaker 5: Fifteen to seventeen times ford EBITDA Are you kidding me? 420 00:20:53,720 --> 00:20:56,719 Speaker 5: This isn't a technology company, it's a healthcare company. 421 00:20:56,960 --> 00:21:00,040 Speaker 9: Well, to put it into context, though, product companies, you know, 422 00:21:00,119 --> 00:21:05,520 Speaker 9: the Medtronics, the Becton, Dickinson's, the Abbot Labs, they're all 423 00:21:05,560 --> 00:21:08,439 Speaker 9: trading twenty times. So really it's getting a discount relative 424 00:21:08,440 --> 00:21:11,000 Speaker 9: to product companies, and it's kind of priced in line 425 00:21:11,080 --> 00:21:14,399 Speaker 9: with the healthcare distribution companies like the Cardinal Health, the 426 00:21:14,520 --> 00:21:15,680 Speaker 9: McKesson and so forth. 427 00:21:16,880 --> 00:21:19,560 Speaker 3: I'm looking at the Cornerstone investors. There is at least 428 00:21:19,600 --> 00:21:21,760 Speaker 3: eight of them. They lined up more than two point 429 00:21:21,760 --> 00:21:24,040 Speaker 3: three billion dollars in commitments. What does that tell you 430 00:21:24,080 --> 00:21:27,240 Speaker 3: about the investor base of Medline. 431 00:21:27,400 --> 00:21:29,720 Speaker 9: Well, to me, it says that this is a very 432 00:21:29,760 --> 00:21:33,160 Speaker 9: stable business. I mean, they've talked about growing the top 433 00:21:33,160 --> 00:21:36,040 Speaker 9: line high single digits and adjusted EBITA by the same 434 00:21:36,160 --> 00:21:38,399 Speaker 9: or better. I mean, I think this is a story 435 00:21:38,400 --> 00:21:40,919 Speaker 9: that's going to unfold over multiple years where you know, 436 00:21:40,920 --> 00:21:42,119 Speaker 9: they're going to come out of the gate, they're going 437 00:21:42,160 --> 00:21:44,800 Speaker 9: to hit their numbers, they'll pay down debt so their 438 00:21:44,880 --> 00:21:47,800 Speaker 9: leverage goes down, you know, post this private equity era, 439 00:21:48,280 --> 00:21:51,119 Speaker 9: and then we'll probably see some more our shareholder friendly 440 00:21:52,040 --> 00:21:55,120 Speaker 9: capital deployment, whether it's buybacks. You know, this would seem 441 00:21:55,160 --> 00:21:56,479 Speaker 9: like a good business to have a divid end. 442 00:21:56,600 --> 00:21:59,920 Speaker 5: Ultimately, there's a healthcare industry broadly defined that they like 443 00:22:00,119 --> 00:22:02,560 Speaker 5: this administration or they concern that maybe some o regulatory 444 00:22:02,680 --> 00:22:03,520 Speaker 5: riskcty out there. 445 00:22:04,040 --> 00:22:05,800 Speaker 9: I think it depends on who you ask, Okay, I 446 00:22:05,800 --> 00:22:08,399 Speaker 9: mean I think uncertain Nobody likes uncertainty in the business world, right, 447 00:22:08,400 --> 00:22:11,359 Speaker 9: and there's been a lot of uncertainty around healthcare in particular. 448 00:22:11,840 --> 00:22:14,000 Speaker 9: I mean, these companies in the service industry have been 449 00:22:14,040 --> 00:22:16,680 Speaker 9: a lady a little less in the spotlight than let's 450 00:22:16,680 --> 00:22:19,640 Speaker 9: say the drug and pharmaceutical industry. But you know, at 451 00:22:19,640 --> 00:22:21,760 Speaker 9: the end of the day, people get sick, they need 452 00:22:21,760 --> 00:22:23,680 Speaker 9: to go to the hospital, they need operations, they need 453 00:22:23,680 --> 00:22:25,800 Speaker 9: to see doctors. It's business as usual. 454 00:22:26,840 --> 00:22:31,520 Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, 455 00:22:31,720 --> 00:22:35,680 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 456 00:22:35,880 --> 00:22:39,159 Speaker 1: ten am to noon Eastern on Bloomberg dot com, the 457 00:22:39,240 --> 00:22:43,119 Speaker 1: iHeartRadio app tune In, and the Bloomberg Business app. You 458 00:22:43,160 --> 00:22:46,479 Speaker 1: can also watch us live every weekday on YouTube and 459 00:22:46,680 --> 00:22:49,440 Speaker 1: always on the Bloomberg terminal