1 00:00:02,279 --> 00:00:05,600 Speaker 1: From the heart of where innovation, money and power collive 2 00:00:06,360 --> 00:00:10,920 Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with 3 00:00:10,960 --> 00:00:27,320 Speaker 1: Emily jay I'm Emily Jang in San Francisco, and this 4 00:00:27,400 --> 00:00:30,240 Speaker 1: is Bloomberg Technology. Coming up in the next hour, Twitter's 5 00:00:30,280 --> 00:00:34,080 Speaker 1: board mounts a poison pill defense against Elon Musk, while 6 00:00:34,159 --> 00:00:38,200 Speaker 1: Musk continues to chaunt them, pointing out that without Jack Dorsey, 7 00:00:38,240 --> 00:00:42,200 Speaker 1: Twitter's board members collectively own almost no shares and if 8 00:00:42,200 --> 00:00:45,279 Speaker 1: his bid succeeds, they won't get a salary. Will have 9 00:00:45,320 --> 00:00:49,520 Speaker 1: all the details as he hints at a hostile takeover. Plus, 10 00:00:49,520 --> 00:00:52,199 Speaker 1: we'll get an inside look at Rivan's factory in Illinois 11 00:00:52,280 --> 00:00:54,360 Speaker 1: and see how the ev maker is trying to combat 12 00:00:54,360 --> 00:00:57,920 Speaker 1: the chip crisis. Later this hour, and it's expected to 13 00:00:57,960 --> 00:01:01,560 Speaker 1: be the busiest wedding season in decades, we'll chat with 14 00:01:01,600 --> 00:01:04,320 Speaker 1: the CEO of Rent the Runway about how all those 15 00:01:04,360 --> 00:01:09,319 Speaker 1: IDUs could mean big business for the fashion platform. Now 16 00:01:09,400 --> 00:01:11,880 Speaker 1: to our top story over the weekend, he sent just 17 00:01:11,959 --> 00:01:15,640 Speaker 1: a tweet with three words love me tender. He could 18 00:01:15,640 --> 00:01:18,240 Speaker 1: have been listening to the iconic Elvis Presley song, or 19 00:01:18,400 --> 00:01:21,280 Speaker 1: could it be a cryptic reference to a potential tender 20 00:01:21,319 --> 00:01:24,760 Speaker 1: offer to Twitter shareholders for control of the company. Friday, 21 00:01:24,760 --> 00:01:27,800 Speaker 1: Twitter's board chose the poison pill defense, adopting a provision 22 00:01:27,800 --> 00:01:30,600 Speaker 1: that would make it harder for Musk to acquire more 23 00:01:30,680 --> 00:01:35,119 Speaker 1: shares and ultimately dilute his steak. Bloomberg's at Ludlow here 24 00:01:35,160 --> 00:01:36,959 Speaker 1: to break it all down. At a lot going on here? 25 00:01:37,400 --> 00:01:40,000 Speaker 1: What's the late twists and turns. It's interesting because the 26 00:01:40,080 --> 00:01:41,960 Speaker 1: seven and a half percent game we saw on Twitter 27 00:01:42,000 --> 00:01:45,080 Speaker 1: shares Monday is the biggest jumps in Tabril fourth, when 28 00:01:45,120 --> 00:01:48,480 Speaker 1: Elon Musk's steak in Twitter was first disclosed. You remember 29 00:01:48,480 --> 00:01:52,920 Speaker 1: it jump on that occasion. The broad psychology around this 30 00:01:53,040 --> 00:01:55,800 Speaker 1: is that we're moving towards an outcome that would be 31 00:01:55,840 --> 00:01:58,080 Speaker 1: more favorable for shareholders. See you talk about the poison 32 00:01:58,080 --> 00:02:01,960 Speaker 1: pill defense. Twitter can issue you shares that investors can 33 00:02:02,000 --> 00:02:05,280 Speaker 1: buy at a discount apart from Musk, anyone trying to 34 00:02:05,360 --> 00:02:08,760 Speaker 1: acquire a state greater than fifteen percent in the company. 35 00:02:08,840 --> 00:02:11,040 Speaker 1: Here's the thing coming me ins my Bloomberg terminal. This 36 00:02:11,120 --> 00:02:13,880 Speaker 1: is the other side of the debate. We're trading at 37 00:02:13,960 --> 00:02:17,239 Speaker 1: around forty five dollars a share. That's the blue line, 38 00:02:17,800 --> 00:02:19,919 Speaker 1: or forty dollars to share I say that's the white line, 39 00:02:19,919 --> 00:02:21,880 Speaker 1: the blue line is the average, and this twelve month 40 00:02:21,919 --> 00:02:25,120 Speaker 1: price target, which is even lower, and that green dot 41 00:02:25,200 --> 00:02:26,880 Speaker 1: on the right hand side of the screen is the 42 00:02:26,919 --> 00:02:29,840 Speaker 1: fifty four dollars twenty cents per share offer that Musk 43 00:02:29,880 --> 00:02:32,520 Speaker 1: currently has on the table, and the thinking is this 44 00:02:32,560 --> 00:02:35,400 Speaker 1: could be lobal. Musk has been tweeting for three days 45 00:02:35,680 --> 00:02:38,440 Speaker 1: about how Twitter's board has a duty to the shareholders 46 00:02:38,600 --> 00:02:41,840 Speaker 1: to consider his bid a f juiciery duty. But the 47 00:02:41,840 --> 00:02:43,520 Speaker 1: other side of that debate is they have a fiduciary 48 00:02:43,600 --> 00:02:46,359 Speaker 1: duty to get the best possible offer for them. We're 49 00:02:46,440 --> 00:02:48,520 Speaker 1: so far away from seventy three dollars a share, which 50 00:02:48,600 --> 00:02:50,480 Speaker 1: is the fifty two week high on the stock, so 51 00:02:50,720 --> 00:02:54,679 Speaker 1: some consideration. Final point two names top of the list 52 00:02:54,760 --> 00:02:58,320 Speaker 1: for fidelity platform right now. Retail investors are buying into 53 00:02:58,400 --> 00:03:01,280 Speaker 1: Tesla and Twitter, and it's in tressing because how many 54 00:03:01,280 --> 00:03:03,440 Speaker 1: tweets has must send in the last few days. And 55 00:03:03,480 --> 00:03:05,200 Speaker 1: some of the school to thow out there is that 56 00:03:05,400 --> 00:03:07,880 Speaker 1: he's trying to get momentum behind a movement, just like 57 00:03:07,919 --> 00:03:11,760 Speaker 1: he's on Tesla getting retail investors on board. Is he 58 00:03:11,760 --> 00:03:13,640 Speaker 1: trying to get those retail investors on board with Twitter 59 00:03:13,680 --> 00:03:17,359 Speaker 1: as well, and all right, thank you. The question now becomes, 60 00:03:17,440 --> 00:03:19,840 Speaker 1: could Musk team up with someone else to make this 61 00:03:19,880 --> 00:03:23,800 Speaker 1: Twitter dream a reality? Bloomberg Intelligence suggests Musk could partner 62 00:03:23,840 --> 00:03:26,960 Speaker 1: with Oracle, for example, in a private equity consourtium that 63 00:03:27,000 --> 00:03:30,240 Speaker 1: includes Toma Bravo to combat Twitter's poison pill, while raising 64 00:03:30,280 --> 00:03:34,480 Speaker 1: the bid ten to fift to about fifty billion dollars. 65 00:03:34,600 --> 00:03:38,480 Speaker 1: The Wall Street Journal is reporting Apollo Globals also considering 66 00:03:38,560 --> 00:03:42,800 Speaker 1: joining in. Bloomberg's Max Chafkin joins us. Now, Max, if 67 00:03:42,800 --> 00:03:44,920 Speaker 1: Ela Musk really wants to do this, what does he 68 00:03:45,000 --> 00:03:46,720 Speaker 1: have to pull off? What does he have to pull 69 00:03:46,800 --> 00:03:51,640 Speaker 1: together in this moment? Well, you have a couple of issues, 70 00:03:51,720 --> 00:03:54,280 Speaker 1: one of which is that, you know, Elon Musk because 71 00:03:54,320 --> 00:03:57,560 Speaker 1: this huge Twitter following, obviously he's able to move markets. 72 00:03:57,720 --> 00:03:59,680 Speaker 1: On the other hand, in order to kind of pull 73 00:03:59,720 --> 00:04:02,640 Speaker 1: together some sort of consortium, you're gonna have to convince 74 00:04:02,880 --> 00:04:05,200 Speaker 1: a bunch of other rich guys, whether it's uh, you know, 75 00:04:05,320 --> 00:04:08,240 Speaker 1: Larry Ellison or whoever, that they want to sign up 76 00:04:08,240 --> 00:04:11,000 Speaker 1: for this wild ride. And pretty much, you know. One 77 00:04:11,040 --> 00:04:13,440 Speaker 1: of the ways that Elon Musk has distinguished himself, of course, 78 00:04:13,520 --> 00:04:16,919 Speaker 1: is by by being the most risk happy of anyone. 79 00:04:17,040 --> 00:04:19,719 Speaker 1: So it's it's a little bit hard to imagine who 80 00:04:19,760 --> 00:04:22,440 Speaker 1: comes together in that consortium and if they're really willing 81 00:04:22,480 --> 00:04:25,360 Speaker 1: to go for it. Now, As someone who's interviewed Elon 82 00:04:25,440 --> 00:04:28,480 Speaker 1: Musk many times over the last couple of decades, masks, 83 00:04:28,600 --> 00:04:31,880 Speaker 1: what's your sense of how serious he is about this 84 00:04:32,000 --> 00:04:34,240 Speaker 1: and marshaling the amount of capital that he would need 85 00:04:34,520 --> 00:04:37,640 Speaker 1: to pull this off? And or do you think he's 86 00:04:37,680 --> 00:04:42,480 Speaker 1: just messing with investors? Well? I think with Musk, you know, 87 00:04:42,760 --> 00:04:45,480 Speaker 1: it's always a little bit of both. Right. If anyone 88 00:04:45,520 --> 00:04:48,040 Speaker 1: watched this, uh, the interview that he did last week 89 00:04:48,080 --> 00:04:50,240 Speaker 1: at the TED conference, you know, you saw that he 90 00:04:50,279 --> 00:04:53,120 Speaker 1: hadn't really thought through a bunch of the kind of 91 00:04:53,160 --> 00:04:56,760 Speaker 1: crucial aspects of what this transaction would be. On the 92 00:04:56,800 --> 00:05:00,360 Speaker 1: other hand, Elon Musk is an incredible marketer. He somebody 93 00:05:00,360 --> 00:05:02,360 Speaker 1: who likes to kind of go where the trends are 94 00:05:02,360 --> 00:05:04,880 Speaker 1: pushing him. So you could sort of see a situation 95 00:05:04,920 --> 00:05:07,680 Speaker 1: where he almost, I don't want to say accidentally, you know, 96 00:05:08,040 --> 00:05:10,680 Speaker 1: winds up owning Twitter, but but where he kind of 97 00:05:10,720 --> 00:05:13,960 Speaker 1: gets carried away by events. And I think, you know, 98 00:05:14,160 --> 00:05:16,719 Speaker 1: if you're a Testlas shareholder, probably the best thing that 99 00:05:16,760 --> 00:05:19,440 Speaker 1: could happen here would be for Musk to not be 100 00:05:19,480 --> 00:05:21,479 Speaker 1: able to buy Twitter, but be able to have just 101 00:05:21,600 --> 00:05:24,719 Speaker 1: a huge, you know, cultural, you know moment, and and 102 00:05:24,800 --> 00:05:28,040 Speaker 1: not get blamed when the deal falls apart elon Musk 103 00:05:28,080 --> 00:05:32,239 Speaker 1: potentially ending up owning Twitter by accident, that's an interesting thought. 104 00:05:32,279 --> 00:05:36,120 Speaker 1: Bloomberg's Max Chafkin as always good to have you. Many 105 00:05:36,200 --> 00:05:40,360 Speaker 1: questions remain about how exactly Musk wants to change Twitter 106 00:05:40,680 --> 00:05:42,800 Speaker 1: if he acquires it, but he's made it clear he 107 00:05:42,880 --> 00:05:45,320 Speaker 1: wants it to look it sound more like a free 108 00:05:45,360 --> 00:05:48,120 Speaker 1: speech town square. Here's what he had to say during 109 00:05:48,120 --> 00:05:52,799 Speaker 1: a Ted talk last week. I think it's very important 110 00:05:52,839 --> 00:05:59,320 Speaker 1: for that would be an inclusive arena for free speech 111 00:06:00,040 --> 00:06:07,280 Speaker 1: where well, yeah, so yeah, um, Twitter has become kind 112 00:06:07,279 --> 00:06:12,800 Speaker 1: of the de facto town square. Um so uh. It's 113 00:06:12,839 --> 00:06:16,240 Speaker 1: just really important that people have the both, uh, the 114 00:06:16,320 --> 00:06:20,599 Speaker 1: reality and the perception, uh, that they are able to 115 00:06:20,680 --> 00:06:24,600 Speaker 1: speak freely within the bounds of the low. To discuss, 116 00:06:24,680 --> 00:06:27,359 Speaker 1: we're joined by Teddy Goff, co founder and partner at Precision, 117 00:06:27,440 --> 00:06:31,120 Speaker 1: a leading strategy and marketing agency, also the former digital 118 00:06:31,160 --> 00:06:34,920 Speaker 1: campaign manager for President Obama. So, Teddy, do you think 119 00:06:34,920 --> 00:06:36,560 Speaker 1: this is a fight over free speech or is it 120 00:06:36,680 --> 00:06:41,560 Speaker 1: something else. Well, I think it's largely a fight over power. 121 00:06:41,880 --> 00:06:45,360 Speaker 1: What I mean by that is, you know, everybody understands 122 00:06:45,440 --> 00:06:47,719 Speaker 1: this is not exactly a matter of free speech in 123 00:06:47,720 --> 00:06:50,080 Speaker 1: the sense that nobody's being thrown into prison for anything 124 00:06:50,080 --> 00:06:52,400 Speaker 1: that they tweet. You know. The important thing I think 125 00:06:52,440 --> 00:06:55,040 Speaker 1: to keep in mind is Twitter and all the social 126 00:06:55,720 --> 00:07:01,320 Speaker 1: platforms are driven by algorithms that determine the likelihood of 127 00:07:01,320 --> 00:07:03,320 Speaker 1: of U seeing this or that post when you log in. 128 00:07:03,720 --> 00:07:07,800 Speaker 1: And the question of who control who writes those algorithms, um, 129 00:07:07,839 --> 00:07:10,240 Speaker 1: you know, is really consequential. So it's not a matter 130 00:07:10,280 --> 00:07:14,120 Speaker 1: so much of um, you know, free speech. Most people 131 00:07:14,240 --> 00:07:16,600 Speaker 1: have the right to tweet whatever it is that they want. 132 00:07:16,840 --> 00:07:19,760 Speaker 1: It's a question of, um, you know, which which tweets 133 00:07:19,760 --> 00:07:22,120 Speaker 1: and posts get out algorithmic promotion and wind up in 134 00:07:22,160 --> 00:07:23,960 Speaker 1: the feeds of millions of people, and which one s don't. 135 00:07:24,160 --> 00:07:26,800 Speaker 1: And I think the view of Musk and obviously this 136 00:07:26,840 --> 00:07:28,400 Speaker 1: is sort of validated by the fact that Donald Trump 137 00:07:28,440 --> 00:07:30,880 Speaker 1: got kicked off Twitter. That's sort of appointed supports his 138 00:07:30,960 --> 00:07:33,080 Speaker 1: point is that these algorithms are written in a way 139 00:07:33,120 --> 00:07:36,240 Speaker 1: that you know, sort of effectively censored conservatives, even those 140 00:07:36,280 --> 00:07:38,640 Speaker 1: who aren't literally kicked off the platform feel that they 141 00:07:38,720 --> 00:07:40,840 Speaker 1: are sort of shadow band or or that there's a 142 00:07:40,840 --> 00:07:44,480 Speaker 1: thumb on the scale preventing their virality. And so I 143 00:07:44,480 --> 00:07:47,360 Speaker 1: think the question how these things are written? Do we 144 00:07:47,360 --> 00:07:49,480 Speaker 1: have transparency into the way these things are written? And 145 00:07:49,560 --> 00:07:52,840 Speaker 1: ultimately you know which tweets you know go viral, which 146 00:07:52,840 --> 00:07:54,960 Speaker 1: one s don't is hugely consequential, and I think that's 147 00:07:54,960 --> 00:07:58,560 Speaker 1: what this is really about. There's also the question of 148 00:07:58,560 --> 00:08:02,320 Speaker 1: whether a free speech to square can really exist on 149 00:08:02,360 --> 00:08:05,239 Speaker 1: the Internet or anywhere. Reneed the rest of the Stanford 150 00:08:05,280 --> 00:08:10,160 Speaker 1: Internet Observatory wrote in The Atlantic, the public square metaphor 151 00:08:10,200 --> 00:08:14,120 Speaker 1: places wholly unrealistic expectations on what social media is or 152 00:08:14,200 --> 00:08:17,240 Speaker 1: should be. It may simply be that when networks grow 153 00:08:17,280 --> 00:08:22,080 Speaker 1: past a certain size, they become unmanageable. I mean, do 154 00:08:22,120 --> 00:08:27,520 Speaker 1: you think Twitter has ever really been a public town square? Well, no, 155 00:08:27,800 --> 00:08:29,680 Speaker 1: because of this reason of algorithms. You know, in a 156 00:08:29,680 --> 00:08:33,120 Speaker 1: public down square, um, you can shout whatever it is 157 00:08:33,160 --> 00:08:35,000 Speaker 1: you want to shout, and the people around you are 158 00:08:35,000 --> 00:08:37,080 Speaker 1: going to hear it. On Twitter, the whole you know, 159 00:08:37,160 --> 00:08:39,600 Speaker 1: mechanic of the of the platform, the whole idea of 160 00:08:39,600 --> 00:08:41,960 Speaker 1: it is your tweet can go out to millions of 161 00:08:41,960 --> 00:08:44,600 Speaker 1: people who didn't make the choice of following you, you know, 162 00:08:44,720 --> 00:08:47,840 Speaker 1: just because um, you know, it gets it starts taking off, 163 00:08:47,880 --> 00:08:50,880 Speaker 1: and then the algorithm boost situ into feeds all around 164 00:08:50,920 --> 00:08:54,280 Speaker 1: the world. So it's really sort of fundamentally unlike a 165 00:08:54,360 --> 00:08:57,520 Speaker 1: town um square, where you know, you're sort of um, 166 00:08:57,559 --> 00:08:59,160 Speaker 1: your reach is sort of limited by the volume of 167 00:08:59,200 --> 00:09:01,560 Speaker 1: your voice. UM. You know, that's obviously not the case 168 00:09:01,600 --> 00:09:04,480 Speaker 1: on Twitter. I do agree that these these platforms have 169 00:09:04,600 --> 00:09:07,240 Speaker 1: all become sort of ungovernable if you just look at 170 00:09:07,240 --> 00:09:10,560 Speaker 1: the um, you know, the empirical reality. Both Democrats and 171 00:09:10,600 --> 00:09:13,199 Speaker 1: Republicans are livid at Twitter. The Republicans are livid that 172 00:09:13,240 --> 00:09:16,319 Speaker 1: Trump and some of his allies got booted. The Democrats 173 00:09:16,320 --> 00:09:18,560 Speaker 1: think that Twitter is the reason Trump and some of 174 00:09:18,600 --> 00:09:21,360 Speaker 1: his allies moved from the fringe to the political mainstream 175 00:09:21,360 --> 00:09:23,760 Speaker 1: in the first place. The same debate obviously happens you know, 176 00:09:23,880 --> 00:09:27,840 Speaker 1: arguably even more um caustically over Facebook. So you know, 177 00:09:27,920 --> 00:09:31,440 Speaker 1: I I think that these platforms play a huge role 178 00:09:31,480 --> 00:09:34,840 Speaker 1: in the discourse of the country. UM. Twitter especially to 179 00:09:34,880 --> 00:09:37,160 Speaker 1: a weird degree, because even though it's smaller than Facebook 180 00:09:37,200 --> 00:09:40,360 Speaker 1: by numbers, it has a disproportionate share of journalists spending 181 00:09:40,400 --> 00:09:43,080 Speaker 1: all day there, and so things sort of make their 182 00:09:43,120 --> 00:09:46,240 Speaker 1: way from Twitter into the nightly news and the local 183 00:09:46,240 --> 00:09:49,560 Speaker 1: news and the daily papers all around the country. And um, 184 00:09:49,600 --> 00:09:52,440 Speaker 1: it is obviously the case that these these questions are 185 00:09:52,760 --> 00:09:55,760 Speaker 1: fundamentally political, and um, you know, the way that these 186 00:09:55,760 --> 00:09:59,640 Speaker 1: platforms have have navigated these questions as obviously uh alienated 187 00:09:59,640 --> 00:10:03,280 Speaker 1: both sides. So the question is, you know, should if 188 00:10:03,440 --> 00:10:07,800 Speaker 1: if if, as you say, Twitter is ungovernable or maybe ungovernable, 189 00:10:07,920 --> 00:10:10,000 Speaker 1: then then then what should happens? You know, it's a 190 00:10:10,040 --> 00:10:14,200 Speaker 1: private company, is the Elon is Elon Musk the answer? 191 00:10:14,240 --> 00:10:16,760 Speaker 1: And if if not Elon Musk, is it? Is it 192 00:10:16,800 --> 00:10:21,160 Speaker 1: a public utility? Is it? Is it something else? Um, 193 00:10:21,280 --> 00:10:23,880 Speaker 1: I personally think it's probably not Elon Musk. You know, 194 00:10:23,920 --> 00:10:27,120 Speaker 1: there's been a lot of um, a lot of people 195 00:10:27,240 --> 00:10:29,559 Speaker 1: mainly Elon Musk, you know, sort of allies and supportae 196 00:10:29,600 --> 00:10:31,120 Speaker 1: of the past couple of days saying hey, look at 197 00:10:31,320 --> 00:10:34,240 Speaker 1: for instance, Bloomberg, look at the Washington Post. The Washington 198 00:10:34,240 --> 00:10:36,480 Speaker 1: Post was bought by Jeff Bezos. There's a really critical 199 00:10:36,480 --> 00:10:39,600 Speaker 1: difference between the Bloomberg Washington Post model and we love 200 00:10:39,679 --> 00:10:43,560 Speaker 1: what Elon Musk is proposing, you know, UM, Bloomberg and 201 00:10:43,559 --> 00:10:47,440 Speaker 1: and bezos don't march into the editorial boards editorial board 202 00:10:47,520 --> 00:10:50,280 Speaker 1: rooms at at at Bloomberg Media and at the Washington 203 00:10:50,360 --> 00:10:54,120 Speaker 1: Post and demanded change in coverage. They pledge not to UM. 204 00:10:54,200 --> 00:10:56,280 Speaker 1: Musk is sort of doing the opposite. He has essentially 205 00:10:56,280 --> 00:10:59,679 Speaker 1: pledged to alter the way that information is shared. And 206 00:10:59,760 --> 00:11:03,040 Speaker 1: this NATed on on Twitter. So there is a question 207 00:11:03,040 --> 00:11:05,559 Speaker 1: of media consolidation. He's obviously not the first billionaire to 208 00:11:05,559 --> 00:11:08,360 Speaker 1: get into the media ownership game, but he's the first 209 00:11:08,360 --> 00:11:10,560 Speaker 1: at least in this you know, sort of cohort to 210 00:11:10,640 --> 00:11:14,200 Speaker 1: do so with an express agenda behind that. And that 211 00:11:14,240 --> 00:11:18,200 Speaker 1: agenda is not UM the sustainment of media or you know, 212 00:11:18,280 --> 00:11:21,680 Speaker 1: public information. It's a it's got a political bent to it. 213 00:11:21,800 --> 00:11:24,800 Speaker 1: So you know, whether Twitter and these other platforms ought 214 00:11:24,840 --> 00:11:28,000 Speaker 1: to be UM regulated as public utilities or not UM 215 00:11:28,679 --> 00:11:33,280 Speaker 1: I think, you know, to me, it's concerning that one individual, 216 00:11:33,400 --> 00:11:35,520 Speaker 1: by the way, it could be a you know, you know, 217 00:11:35,600 --> 00:11:38,080 Speaker 1: I'm a democratic, could be a Democrat want individual to 218 00:11:38,080 --> 00:11:40,800 Speaker 1: take over one of these companies with an express purpose 219 00:11:40,960 --> 00:11:44,080 Speaker 1: of UM changing the way that the group terms of 220 00:11:44,120 --> 00:11:47,560 Speaker 1: service and the algorithm works. Which again is ultimately about 221 00:11:47,760 --> 00:11:50,880 Speaker 1: who controls the discourse and are you know these sort 222 00:11:50,920 --> 00:11:55,880 Speaker 1: of fringe uh physicians able to be disseminated in mainstream 223 00:11:55,920 --> 00:11:58,440 Speaker 1: to millions and millions of people and what that does 224 00:11:58,480 --> 00:12:01,040 Speaker 1: to our politics. So he's basically got an agenda in 225 00:12:01,080 --> 00:12:04,000 Speaker 1: that sense. Um. I think his agenda is uh. It 226 00:12:04,080 --> 00:12:06,880 Speaker 1: might be aligned with the economic incentives of the board 227 00:12:06,920 --> 00:12:09,080 Speaker 1: of the shareholders, but it's probably aligned with the public 228 00:12:09,120 --> 00:12:13,280 Speaker 1: did well. It remains to be seen exactly what his 229 00:12:13,400 --> 00:12:17,200 Speaker 1: agenda is. Teddy Goff, co founder and partner at Precision Strategy, 230 00:12:17,240 --> 00:12:19,080 Speaker 1: is always good to have you back here on the show. 231 00:12:19,520 --> 00:12:23,280 Speaker 1: Coming up, Elon Musk hinting at a hospital. It's hostile takeover, 232 00:12:23,400 --> 00:12:25,440 Speaker 1: but what will really happen. We're gonna have a conversation 233 00:12:25,440 --> 00:12:29,160 Speaker 1: with Stanford professor Curtis mill helped about why this particular 234 00:12:29,160 --> 00:12:33,440 Speaker 1: takeover attempt might matter more than the many others that 235 00:12:33,520 --> 00:12:51,440 Speaker 1: have come before it. This is Bloomberg. Elon Musk set 236 00:12:51,600 --> 00:12:53,720 Speaker 1: he made his best and final offer for Twitter last 237 00:12:53,720 --> 00:12:56,040 Speaker 1: week at forty three billion dollars, but is now hinting 238 00:12:56,120 --> 00:12:58,720 Speaker 1: at a hostile takeover that would involve a tender offer 239 00:12:58,840 --> 00:13:01,760 Speaker 1: backed by other susters I want to bring in Curtis 240 00:13:01,760 --> 00:13:04,320 Speaker 1: mill helped Stanford Law School professor and senior fellow for 241 00:13:04,320 --> 00:13:08,200 Speaker 1: a broader view of this and talk about what's particularly 242 00:13:08,240 --> 00:13:12,680 Speaker 1: notable about this potentially hostile takeover. Professor Millpop, thank you 243 00:13:12,760 --> 00:13:15,840 Speaker 1: so much for joining us. You have studied hostele takeovers 244 00:13:15,880 --> 00:13:19,760 Speaker 1: all over the world. What makes how this is evolving 245 00:13:19,840 --> 00:13:24,120 Speaker 1: here different from what you've seen before? Well, I think 246 00:13:24,200 --> 00:13:27,640 Speaker 1: in terms of the the actual offer itself there, this 247 00:13:27,720 --> 00:13:30,360 Speaker 1: is so far playing out according to a standard playbook 248 00:13:30,360 --> 00:13:33,600 Speaker 1: in the United States of an unsolicited bid for a 249 00:13:33,640 --> 00:13:38,400 Speaker 1: public company followed by the target company's management adopting defensive 250 00:13:38,400 --> 00:13:41,560 Speaker 1: measure of the poison pill. So so far, nothing so 251 00:13:41,559 --> 00:13:43,880 Speaker 1: so special. But when you think about the company that 252 00:13:44,040 --> 00:13:47,040 Speaker 1: is the target here, a social media company, I think 253 00:13:47,080 --> 00:13:49,360 Speaker 1: this is quite unique and it really picks up on 254 00:13:49,400 --> 00:13:53,120 Speaker 1: the conversation you are having with your previous guests about 255 00:13:53,640 --> 00:13:57,160 Speaker 1: who gets to control public discourse in the form of 256 00:13:57,200 --> 00:14:00,000 Speaker 1: these these platforms, and so I think that's very distinct 257 00:14:00,040 --> 00:14:04,120 Speaker 1: of many social media companies and other tech companies have 258 00:14:04,160 --> 00:14:09,559 Speaker 1: adopted dual class capitalization structures, meaning that the founders retained 259 00:14:09,600 --> 00:14:15,160 Speaker 1: control of the enterprise by ownership of stock with super 260 00:14:15,240 --> 00:14:19,040 Speaker 1: voting rights. Twitter did not do that, and now we're 261 00:14:19,040 --> 00:14:23,520 Speaker 1: seeing one of the potential consequences of an unsolicited bid 262 00:14:23,600 --> 00:14:26,440 Speaker 1: for the company. Switch raises a lot of very fascinating 263 00:14:26,480 --> 00:14:29,920 Speaker 1: new new questions that we haven't seen before. It's interesting, 264 00:14:29,960 --> 00:14:34,240 Speaker 1: given how criticized the dual class share structure has been 265 00:14:34,400 --> 00:14:37,920 Speaker 1: at Facebook at Google in terms of potentially giving those 266 00:14:37,960 --> 00:14:42,479 Speaker 1: founders too much power, how likely is it that Twitter's 267 00:14:42,480 --> 00:14:48,520 Speaker 1: poison pill defense will actually work well? So the board 268 00:14:48,600 --> 00:14:51,960 Speaker 1: is instituted the poison pill without shi Older approval, which 269 00:14:52,000 --> 00:14:54,760 Speaker 1: is of course the beauty of the poison pill for 270 00:14:54,760 --> 00:14:59,000 Speaker 1: for US managers. Unlike defensive measures in other parts to 271 00:14:59,000 --> 00:15:01,680 Speaker 1: the world and the uk A in Europe or in Japan, 272 00:15:02,200 --> 00:15:05,640 Speaker 1: where shareholders would have to approve the defensive measure, in 273 00:15:05,640 --> 00:15:08,840 Speaker 1: the United States it's not required, but they will have 274 00:15:08,920 --> 00:15:13,440 Speaker 1: to answer ultimately to the shareholders. They cannot simply sit 275 00:15:13,520 --> 00:15:16,680 Speaker 1: behind the poison pill. They're going to have to justify 276 00:15:16,680 --> 00:15:20,800 Speaker 1: why not letting elon must tender offer go forward is 277 00:15:20,840 --> 00:15:23,640 Speaker 1: in the best interests of the corporation and it's UH 278 00:15:23,640 --> 00:15:27,320 Speaker 1: and its shareholders. But I think that this may lend 279 00:15:27,360 --> 00:15:32,880 Speaker 1: momentum to the movement toward adoption of dual class capitalization structures. 280 00:15:32,880 --> 00:15:36,640 Speaker 1: There already is considerable momentum around this. Many of the 281 00:15:36,720 --> 00:15:39,200 Speaker 1: I p o s in recent years have been founder 282 00:15:39,280 --> 00:15:43,160 Speaker 1: control dual class UH structures. And I think that other 283 00:15:43,200 --> 00:15:46,520 Speaker 1: founders out there who are coming through the through the 284 00:15:46,560 --> 00:15:49,080 Speaker 1: pipeline are going to be looking at this and asking 285 00:15:49,120 --> 00:15:53,320 Speaker 1: themselves whether they want to someday be faced with the 286 00:15:53,360 --> 00:15:56,960 Speaker 1: situation that that the Twitter board is and probably concluding no, 287 00:15:57,200 --> 00:15:59,360 Speaker 1: we we did not. So I think this is going 288 00:15:59,440 --> 00:16:02,520 Speaker 1: to lend, you know, momentum to the controversy over dual 289 00:16:02,600 --> 00:16:06,040 Speaker 1: class talk and the question whether is this actually in 290 00:16:06,080 --> 00:16:09,680 Speaker 1: the best interests of society because these founders can be 291 00:16:10,080 --> 00:16:13,800 Speaker 1: um insulated from short term market pressures, or does this 292 00:16:13,960 --> 00:16:18,320 Speaker 1: just reinforce having a small number of extraordinarily wealthy people 293 00:16:18,840 --> 00:16:24,640 Speaker 1: controlling these incredibly important and powerful platforms. We're looking at 294 00:16:24,720 --> 00:16:27,600 Speaker 1: a graph here of the amount of followers that Musk 295 00:16:27,640 --> 00:16:31,680 Speaker 1: has on Twitter, about a third of the daily active 296 00:16:31,760 --> 00:16:37,560 Speaker 1: users on Twitter overall, a third a third of Twitter's 297 00:16:37,600 --> 00:16:40,080 Speaker 1: daily active users. You know, how does that change the 298 00:16:40,120 --> 00:16:44,760 Speaker 1: equation here quickly? Does that make this you know, UH 299 00:16:45,200 --> 00:16:50,760 Speaker 1: more unfair or gosh, I don't know what the word is, 300 00:16:50,800 --> 00:16:55,840 Speaker 1: but there's something different. Well, I think, just going back 301 00:16:55,920 --> 00:16:57,960 Speaker 1: to the conversation you have with the previous guests, we 302 00:16:58,000 --> 00:17:01,280 Speaker 1: have this anomalous situation which we live in a capitalist society. 303 00:17:01,360 --> 00:17:03,800 Speaker 1: This is a pro for profit firm. The board of 304 00:17:03,840 --> 00:17:06,040 Speaker 1: directors of Twitter is charged with doing what's in the 305 00:17:06,080 --> 00:17:09,080 Speaker 1: best financial interests of the shareholders. And yet we have 306 00:17:09,119 --> 00:17:13,080 Speaker 1: a corporation that is enormously powerful and influential in public 307 00:17:13,119 --> 00:17:17,879 Speaker 1: discourse and in political discourse, uh specifically. So that's a 308 00:17:17,960 --> 00:17:21,840 Speaker 1: very unique situation, and I think that the way this 309 00:17:21,840 --> 00:17:24,480 Speaker 1: plays out is going to have ramifications in Washington, of 310 00:17:24,520 --> 00:17:28,719 Speaker 1: course and elsewhere, because this is not just a garden dry, 311 00:17:28,800 --> 00:17:34,200 Speaker 1: hostile takeover. Curtis Mill helped Stanford Law School professor, thank 312 00:17:34,200 --> 00:17:45,000 Speaker 1: you so much for sharing your perspective with us. Today 313 00:17:45,359 --> 00:17:47,840 Speaker 1: shares a riv and lower today, the electric vehicle maker 314 00:17:47,880 --> 00:17:50,800 Speaker 1: has been hampered by the global chip crisis, but is 315 00:17:50,840 --> 00:17:54,200 Speaker 1: trying to ramp out put Bloomberg's at Ludlow toward Rivan's 316 00:17:54,240 --> 00:17:59,399 Speaker 1: factory in Illinois, with the company's CEO productions ramping up 317 00:17:59,440 --> 00:18:02,359 Speaker 1: here in normal Illinois at Rivan three point three million 318 00:18:02,440 --> 00:18:05,520 Speaker 1: square for e V factory. The company's building three different 319 00:18:05,560 --> 00:18:09,000 Speaker 1: electric vehicles, and it's not easy going. Our biggest challenge 320 00:18:09,040 --> 00:18:12,359 Speaker 1: today really resides around the supply chain. It's a small 321 00:18:12,400 --> 00:18:15,359 Speaker 1: subset of the components in our vehicle, which we do 322 00:18:15,520 --> 00:18:19,080 Speaker 1: have on a constrained basis, and it's limiting the overall 323 00:18:19,080 --> 00:18:21,720 Speaker 1: output for production. A big part of the problem a 324 00:18:21,800 --> 00:18:24,760 Speaker 1: lack of semiconductors. The plant is split up with two 325 00:18:24,760 --> 00:18:28,800 Speaker 1: separate body lines and two separate general assembly lines. One 326 00:18:28,840 --> 00:18:32,280 Speaker 1: fork is dedicated to consumer products. Rivan is focused on 327 00:18:32,320 --> 00:18:35,000 Speaker 1: its battery electric pickup called our one T, but it's 328 00:18:35,040 --> 00:18:38,280 Speaker 1: also working on small volumes of the R one S SUV. 329 00:18:39,040 --> 00:18:41,480 Speaker 1: The other body in general assembly lines are building two 330 00:18:41,600 --> 00:18:44,280 Speaker 1: versions of an electric delivery van for Amazon. But the 331 00:18:44,320 --> 00:18:47,640 Speaker 1: ability to share the core technology backbone between those battery 332 00:18:47,680 --> 00:18:52,200 Speaker 1: pack drive units, network architecture, e SU topology, the electronic stack, 333 00:18:52,240 --> 00:18:55,119 Speaker 1: the perception stack really is what fueled the ability to 334 00:18:55,400 --> 00:18:57,800 Speaker 1: go quickly. We got a behind the scenes look at 335 00:18:57,800 --> 00:19:02,480 Speaker 1: the plant where workers were alongside hundreds of highly automated 336 00:19:02,560 --> 00:19:05,800 Speaker 1: robotic arms. Sheet metal, steel and aluminum is brought in 337 00:19:05,920 --> 00:19:10,320 Speaker 1: as coils. Massive industrial stamps generating huge force shape the 338 00:19:10,359 --> 00:19:13,840 Speaker 1: metal into panels that fitness specific product. The body shop 339 00:19:14,040 --> 00:19:17,120 Speaker 1: fuses all of the panels and structural parts together using 340 00:19:17,160 --> 00:19:20,120 Speaker 1: advanced welding techniques. Then it's to a high tech paint 341 00:19:20,160 --> 00:19:23,560 Speaker 1: shop where multiple coats are applied. Next, we're off to 342 00:19:23,640 --> 00:19:26,679 Speaker 1: general assembly, where the top hat or body is married 343 00:19:26,720 --> 00:19:31,080 Speaker 1: with the skateboard, which includes the motors, battery pack, and telematics. 344 00:19:31,240 --> 00:19:34,199 Speaker 1: Moving along the line, everything from doors and windshields to 345 00:19:34,280 --> 00:19:37,840 Speaker 1: the steering wheel and entertainment systems are added. After final 346 00:19:37,880 --> 00:19:40,320 Speaker 1: tweaks and quality checks, it's off to the lot to 347 00:19:40,359 --> 00:19:43,119 Speaker 1: await delivery. Rivim forecasts it will build twenty five th 348 00:19:43,560 --> 00:19:46,760 Speaker 1: dvs this year across the two consumer models and ten 349 00:19:46,760 --> 00:19:49,200 Speaker 1: thousand vans for Amazon. It built little more than t 350 00:19:50,119 --> 00:19:53,200 Speaker 1: v s in Q one. Despite the challenges, the production 351 00:19:53,320 --> 00:19:59,120 Speaker 1: rate is improving. It's incredibly exciting to see records being 352 00:19:59,160 --> 00:20:02,320 Speaker 1: set in terms of the output or the production rate. 353 00:20:02,760 --> 00:20:05,119 Speaker 1: Things said almost on a daily basis. To meet that 354 00:20:05,160 --> 00:20:08,720 Speaker 1: demand long term, Rivian plans a second five billion dollar 355 00:20:08,760 --> 00:20:11,960 Speaker 1: plant in Georgia and hopes lessons learned in Illinois will 356 00:20:12,000 --> 00:20:15,000 Speaker 1: help it hit the ground running. Ed Ludlow Bloomberg News 357 00:20:15,119 --> 00:20:22,120 Speaker 1: in normal Illinois are Ed Ludlow there well Gladet University 358 00:20:22,119 --> 00:20:24,840 Speaker 1: an Educational Institution for the Deaf and Heart of Hearing 359 00:20:24,960 --> 00:20:28,480 Speaker 1: is getting the commencement speech of its dreams. Apple CEO 360 00:20:28,560 --> 00:20:31,040 Speaker 1: Tim Cook has agreed to deliver the speech after a 361 00:20:31,080 --> 00:20:34,159 Speaker 1: student invited him via Twitter. In American sign language, he 362 00:20:34,240 --> 00:20:37,720 Speaker 1: describes how blown away students across campus were by Apple's 363 00:20:37,720 --> 00:20:51,440 Speaker 1: original movie Coda. Cook will speak at Gladet on Friday. 364 00:20:51,760 --> 00:20:54,280 Speaker 1: Welcome back to Bloomberg Technology. I'm emily changing in San Francisco. 365 00:20:54,359 --> 00:20:57,560 Speaker 1: Let's get back to our top story. Elon Musk trying 366 00:20:57,560 --> 00:21:00,399 Speaker 1: to buy Twitter, the world's richest man. Twee in his 367 00:21:00,480 --> 00:21:04,000 Speaker 1: latest salvo that if he successfully acquired Twitter, the board 368 00:21:04,080 --> 00:21:07,720 Speaker 1: salary would be zero dollars. For more on the most 369 00:21:07,760 --> 00:21:10,959 Speaker 1: recent twist and turns are at Ludlow back with us, 370 00:21:11,000 --> 00:21:13,919 Speaker 1: and that's not all. Yeah, it's it's an interesting tweet 371 00:21:13,960 --> 00:21:16,520 Speaker 1: to make. And he's been digging at this idea about 372 00:21:16,800 --> 00:21:20,639 Speaker 1: fiduciary duty that Twitter's board has to present his offer 373 00:21:20,880 --> 00:21:23,239 Speaker 1: to existing shareholders. By the way, we're looking again at 374 00:21:23,240 --> 00:21:25,359 Speaker 1: that seven and a half cent gain on Monday, biggest 375 00:21:25,400 --> 00:21:29,200 Speaker 1: jump since April four, when Mosques stake in Twitter the 376 00:21:29,240 --> 00:21:33,120 Speaker 1: original state was first disclosed. And it's interesting because he's 377 00:21:33,160 --> 00:21:35,399 Speaker 1: trying to make this about being the right thing in 378 00:21:35,440 --> 00:21:39,520 Speaker 1: the interest of shareholders. And his additional point is the 379 00:21:39,640 --> 00:21:42,159 Speaker 1: board in not passing on that offer a and not 380 00:21:42,200 --> 00:21:45,359 Speaker 1: fulfilling their fiduciary duty. But also they don't have the 381 00:21:45,400 --> 00:21:50,040 Speaker 1: same vested interest as shareholders. Why he keeps poking at 382 00:21:50,080 --> 00:21:52,119 Speaker 1: the number of shares or the volume of shares that 383 00:21:52,160 --> 00:21:55,040 Speaker 1: Twitter's board has. If you strip out Jack Dorsey, who 384 00:21:55,040 --> 00:21:57,680 Speaker 1: steps down from the board anyway later this year's he's 385 00:21:57,720 --> 00:21:59,879 Speaker 1: saying that they can't have economic interests the line with 386 00:22:00,000 --> 00:22:02,480 Speaker 1: shareholders because they own a negligible amount of stock. And 387 00:22:02,600 --> 00:22:04,280 Speaker 1: luckily for you have I had a few hours of 388 00:22:04,320 --> 00:22:08,440 Speaker 1: free time today, so we crunch the numbers. Thank you, ed, 389 00:22:09,000 --> 00:22:11,560 Speaker 1: And this is the point, right, These are negligible volumes 390 00:22:11,600 --> 00:22:14,280 Speaker 1: of shares that each board member has. Most of the 391 00:22:14,280 --> 00:22:16,520 Speaker 1: board members on Twitter's board are paid a salary for 392 00:22:16,600 --> 00:22:18,800 Speaker 1: what is essentially a part time job. It ranges from 393 00:22:18,800 --> 00:22:21,360 Speaker 1: say two hundred thousand, three hundred thousand dollars, and they 394 00:22:21,359 --> 00:22:24,639 Speaker 1: have negligible amounts of shares. Even in the case, for example, 395 00:22:24,720 --> 00:22:28,560 Speaker 1: let's pick out Omid Cordistani has four thousand shares, that's 396 00:22:28,600 --> 00:22:32,240 Speaker 1: only zero point zero point zero point zero two of 397 00:22:32,320 --> 00:22:34,960 Speaker 1: the flow, and so he keeps hammering home this idea, 398 00:22:35,080 --> 00:22:37,000 Speaker 1: do what's in the best interest of shareholders, and his 399 00:22:37,080 --> 00:22:39,520 Speaker 1: main argument appears to be because they don't hold that 400 00:22:39,600 --> 00:22:42,400 Speaker 1: much stock on the board, they're not aligned with those interests, right, 401 00:22:42,480 --> 00:22:44,560 Speaker 1: And of course they it's still got Jack Dorsey on 402 00:22:44,560 --> 00:22:46,520 Speaker 1: the board. Who's got it been out almost a three 403 00:22:46,520 --> 00:22:49,160 Speaker 1: percent stick. But that's only un till may thank you. 404 00:22:49,440 --> 00:22:52,000 Speaker 1: I want to continue this conversation about Twitter's board and 405 00:22:52,040 --> 00:22:54,320 Speaker 1: what the board could do to stop our potential takeover 406 00:22:54,520 --> 00:22:56,960 Speaker 1: by Elon Musk, and what Musk needs to do if 407 00:22:56,960 --> 00:22:59,680 Speaker 1: he's really serious. I'm joined out by Andy Freeman, co 408 00:22:59,840 --> 00:23:04,120 Speaker 1: had of the Shareholder Activism practice at Olshan from Uloski. Any. 409 00:23:04,240 --> 00:23:07,400 Speaker 1: First of all, how much does it matter that Twitter's 410 00:23:07,400 --> 00:23:11,240 Speaker 1: board members without Jack Dorsey don't collectively own a large 411 00:23:11,320 --> 00:23:14,240 Speaker 1: number of shares? Is that unusual? Yeah, Hiamily, thanks for 412 00:23:14,240 --> 00:23:17,080 Speaker 1: having me on. You know, it's it's not too unusual. 413 00:23:17,720 --> 00:23:21,000 Speaker 1: And that line of arguing is just quite frankly, not 414 00:23:21,040 --> 00:23:24,240 Speaker 1: going to get Musk very far. The board is protected 415 00:23:24,280 --> 00:23:28,840 Speaker 1: by the Broadly Way and the differential aspects of Delaware's 416 00:23:28,840 --> 00:23:32,600 Speaker 1: Business Judgment Rule UM so going forward with a fiduciary 417 00:23:32,720 --> 00:23:36,240 Speaker 1: duty based argument, when you have a company and a 418 00:23:36,320 --> 00:23:40,359 Speaker 1: board like Twitters, which I view is you know, highly defended, 419 00:23:40,400 --> 00:23:43,760 Speaker 1: the it's a staunch defensive profile. You have a company here, 420 00:23:44,080 --> 00:23:46,040 Speaker 1: and I look at a hundred or so public companies 421 00:23:46,080 --> 00:23:49,040 Speaker 1: a year to assess the pathway to a hostile bid. 422 00:23:49,560 --> 00:23:51,640 Speaker 1: You know, looking at Twitter, they have a classified board 423 00:23:51,680 --> 00:23:55,320 Speaker 1: structure in place. Yes, they're looking to potentially declassified, but 424 00:23:55,400 --> 00:23:58,800 Speaker 1: that's a three to three year out plan. Uh So 425 00:23:58,840 --> 00:24:01,920 Speaker 1: for now they're they're protected in the way that they 426 00:24:01,920 --> 00:24:04,600 Speaker 1: only have one third, roughly one third of their board 427 00:24:04,960 --> 00:24:07,160 Speaker 1: up for election this year, and in fact that number 428 00:24:07,280 --> 00:24:09,520 Speaker 1: this year is just two directors out of the what 429 00:24:09,600 --> 00:24:13,000 Speaker 1: will be a ten member board. You need majority control 430 00:24:13,119 --> 00:24:17,320 Speaker 1: to uh forced through a hostile bid like Musk's here 431 00:24:17,520 --> 00:24:21,360 Speaker 1: and um, when you think about Twitter's profile again, shareholders 432 00:24:21,400 --> 00:24:24,520 Speaker 1: can't call special meetings, they can't act by consent, they 433 00:24:24,560 --> 00:24:28,439 Speaker 1: can't remove directors without cause. He needs to somehow find 434 00:24:29,119 --> 00:24:31,680 Speaker 1: a way to give shareholders a voice. We've been hearing 435 00:24:31,680 --> 00:24:33,960 Speaker 1: that through his Twitter feed over the past several days, 436 00:24:34,000 --> 00:24:37,040 Speaker 1: and you know, there it's starts saying he doesn't have 437 00:24:37,080 --> 00:24:39,200 Speaker 1: a pathway. He has a strategy here, and we'll see 438 00:24:39,240 --> 00:24:42,640 Speaker 1: if he employs it. So let's talk about that. If 439 00:24:42,680 --> 00:24:44,960 Speaker 1: he really wants to get this done. If Elon Musk 440 00:24:45,040 --> 00:24:47,080 Speaker 1: really wants to get this done, what does he need 441 00:24:47,160 --> 00:24:50,040 Speaker 1: to do? In my view, it's it's a one two 442 00:24:50,040 --> 00:24:53,800 Speaker 1: punch strategy. He launches a hostile tender offer, and knowing 443 00:24:53,880 --> 00:24:57,080 Speaker 1: Musk his pension for four twenty cannabis jokes, why not 444 00:24:57,160 --> 00:25:02,160 Speaker 1: Wednesday for twenty launching off normal tender offer and combine 445 00:25:02,200 --> 00:25:06,240 Speaker 1: that simultaneously with launching a proxy strategy. And it's a 446 00:25:06,280 --> 00:25:08,040 Speaker 1: little bit of an out of the box strategy. But 447 00:25:08,119 --> 00:25:10,560 Speaker 1: Musk is an out of the box guy. Uh. It's 448 00:25:10,560 --> 00:25:12,840 Speaker 1: called a withhold proxy fight. And what he would do 449 00:25:12,920 --> 00:25:15,600 Speaker 1: He missed the vote on nominating for this year. Uh, 450 00:25:15,600 --> 00:25:19,159 Speaker 1: that ship sailed late in late February. So those two candidates, 451 00:25:19,200 --> 00:25:22,120 Speaker 1: he can't nominate for those seats himself. What he can 452 00:25:22,200 --> 00:25:26,160 Speaker 1: do is run a full blown proxy fight seeking to 453 00:25:26,280 --> 00:25:29,240 Speaker 1: ensure that those two directors do not get a majority 454 00:25:29,280 --> 00:25:32,560 Speaker 1: of the votes cast at the annual meeting. Importantly, what 455 00:25:32,600 --> 00:25:34,800 Speaker 1: it does is it gives him a platform for a 456 00:25:34,840 --> 00:25:38,560 Speaker 1: shareholder referendum on his offer. He uses those two directors 457 00:25:38,600 --> 00:25:40,760 Speaker 1: who would be in the what I call the firing 458 00:25:40,840 --> 00:25:44,680 Speaker 1: line in terms of Igan Durban and Patrick Pischett and 459 00:25:44,960 --> 00:25:48,040 Speaker 1: puts the full weight of the pressure on their election 460 00:25:48,400 --> 00:25:51,840 Speaker 1: in order to try to prevent them from from receiving 461 00:25:51,840 --> 00:25:53,840 Speaker 1: the votes they need to be elected, and that would 462 00:25:53,840 --> 00:25:56,439 Speaker 1: be the way that shareholders can have a voice. So 463 00:25:56,840 --> 00:25:59,119 Speaker 1: how likely is it that he can pull off a 464 00:25:59,160 --> 00:26:02,560 Speaker 1: one two punch or would this require more punches than 465 00:26:02,640 --> 00:26:06,800 Speaker 1: Elon Musk has hands. It's it's gonna look the board, 466 00:26:06,840 --> 00:26:08,800 Speaker 1: the way the board is situated and the way it's 467 00:26:08,800 --> 00:26:10,880 Speaker 1: heavily guarded, the way I see kind of to give 468 00:26:10,920 --> 00:26:14,040 Speaker 1: it a Star Wars analogy, the board right now is 469 00:26:14,080 --> 00:26:16,400 Speaker 1: sitting there at like the Death Star with the force 470 00:26:16,440 --> 00:26:19,720 Speaker 1: field protection of it's it's heavily defended. If the board 471 00:26:19,760 --> 00:26:21,879 Speaker 1: wants to sit back and just say no and do 472 00:26:21,920 --> 00:26:25,440 Speaker 1: a resistant, robust strategy for twelve to fourteen months, they 473 00:26:25,440 --> 00:26:28,840 Speaker 1: can do just that. But that's not to say must 474 00:26:28,880 --> 00:26:31,119 Speaker 1: can't mount pressure and he can do it through this 475 00:26:31,280 --> 00:26:34,040 Speaker 1: withhold strategy. But that's just a small bite at the 476 00:26:34,080 --> 00:26:36,480 Speaker 1: apple in my view. The really big bite at the 477 00:26:36,480 --> 00:26:40,480 Speaker 1: apple comes next year at the annual meeting. Even though 478 00:26:41,119 --> 00:26:44,480 Speaker 1: the facto majority control won't be up. What you do, 479 00:26:44,560 --> 00:26:47,040 Speaker 1: have our four directors out of the ten up in 480 00:26:48,600 --> 00:26:51,639 Speaker 1: with two of them being biggas Uh, the CEO and 481 00:26:51,680 --> 00:26:55,560 Speaker 1: the chairman, so you can get effective control in three. 482 00:26:56,000 --> 00:26:58,000 Speaker 1: I know it's nobody really wants to wait that long. 483 00:26:58,080 --> 00:27:00,520 Speaker 1: But what you do is you start to You start 484 00:27:00,560 --> 00:27:02,560 Speaker 1: to chip away at them. You keep the pressure on. 485 00:27:02,680 --> 00:27:04,919 Speaker 1: You run the proxy fight this year. You try to 486 00:27:05,000 --> 00:27:10,159 Speaker 1: build and mobilize a the withhold strategy to reject the 487 00:27:10,200 --> 00:27:12,199 Speaker 1: two directors this year. And you see where that gets you. 488 00:27:12,240 --> 00:27:14,440 Speaker 1: Maybe it's enough to move the needle and the board 489 00:27:14,480 --> 00:27:16,200 Speaker 1: sees the writing on the wall and know that they're 490 00:27:16,200 --> 00:27:18,480 Speaker 1: going to face the music soon enough. All right, love 491 00:27:18,480 --> 00:27:20,840 Speaker 1: all the metaphors from the gloves to the death star. 492 00:27:20,960 --> 00:27:23,240 Speaker 1: Andy Freeman, co ed of the share Older Actives in 493 00:27:23,280 --> 00:27:27,480 Speaker 1: practice at Ocean from Wolowski, thank you so much. As 494 00:27:27,480 --> 00:27:31,320 Speaker 1: we were talking, the trial date was set for those 495 00:27:31,359 --> 00:27:35,800 Speaker 1: Tesla investors suing over go private tweet that Elon musk 496 00:27:36,200 --> 00:27:40,960 Speaker 1: Uh sent all those years ago, still making ways. That 497 00:27:41,080 --> 00:27:46,520 Speaker 1: trial now set for January sevent so early next year, 498 00:27:47,520 --> 00:27:51,160 Speaker 1: come up, will we see a crypto based social network 499 00:27:51,280 --> 00:27:53,240 Speaker 1: or is it too early? We're gonna talk about that 500 00:27:53,280 --> 00:27:55,680 Speaker 1: and much more with Mercedes Bent of Light Speed Venture 501 00:27:55,720 --> 00:27:59,080 Speaker 1: Partners well discuss all things consumer, crypto, n f T 502 00:27:59,320 --> 00:28:01,879 Speaker 1: S and more. And that is next. This is Bloomberg 503 00:28:16,920 --> 00:28:19,920 Speaker 1: Crypto market swings continuous. Bitcoin drops to its lowest level 504 00:28:19,920 --> 00:28:23,280 Speaker 1: in more than a month, along with other digital assets tumbling. 505 00:28:23,359 --> 00:28:26,040 Speaker 1: Our crypto contributortional I Bossic here with more snale. How 506 00:28:26,040 --> 00:28:27,720 Speaker 1: long is this going to keep up? It's a great 507 00:28:27,800 --> 00:28:31,080 Speaker 1: question here because we did see cryptocurrencies drop. We saw 508 00:28:31,160 --> 00:28:34,600 Speaker 1: Bitcoin dropped about thirty eight thousand, five hundred and eighty 509 00:28:34,880 --> 00:28:37,159 Speaker 1: at some point today. But at the other hand, we 510 00:28:37,200 --> 00:28:39,760 Speaker 1: are seeing it rebound. We have it now above forty 511 00:28:41,000 --> 00:28:44,080 Speaker 1: almost forty one thousand, really volatile here, Emily. But the 512 00:28:44,160 --> 00:28:46,840 Speaker 1: question here is twofold one. What is going to be 513 00:28:46,840 --> 00:28:50,640 Speaker 1: the next catalyst to help push bitcoin higher because right 514 00:28:50,640 --> 00:28:54,240 Speaker 1: now it is staying within this tight range. And the 515 00:28:54,280 --> 00:28:56,840 Speaker 1: second question is kind of get much lower. You do 516 00:28:56,920 --> 00:28:59,760 Speaker 1: have some strategists like at twenty two V research that 517 00:28:59,800 --> 00:29:03,600 Speaker 1: these you can get significantly lower down to the thirty levels. 518 00:29:03,640 --> 00:29:05,560 Speaker 1: So the question is who is right? And the question 519 00:29:05,640 --> 00:29:08,720 Speaker 1: is also to what extent does this depend on other factors? 520 00:29:08,800 --> 00:29:13,920 Speaker 1: As risk aversion starts to be more volatile and broader markets. Alright, Shnali, 521 00:29:14,080 --> 00:29:16,120 Speaker 1: thanks so much. Stay with us as we move onto 522 00:29:16,160 --> 00:29:20,640 Speaker 1: our next topic, and that is crypto communication. That is 523 00:29:20,680 --> 00:29:24,000 Speaker 1: the subject of musk discussion with Elon Musk trying to 524 00:29:24,080 --> 00:29:26,400 Speaker 1: buy Twitter to to to talk about that and more. 525 00:29:26,440 --> 00:29:29,080 Speaker 1: I want to bring in Mercedes Bent partner at light 526 00:29:29,080 --> 00:29:32,320 Speaker 1: Speed Venture Partners and Mercedes. As we know, there's a 527 00:29:32,400 --> 00:29:36,720 Speaker 1: huge crypto community on Twitter, and I'm curious what you 528 00:29:36,800 --> 00:29:40,840 Speaker 1: think Musk sort of butting in here, potentially even making 529 00:29:40,880 --> 00:29:45,160 Speaker 1: a hostile takeover or attempting a hostile takeover, what having 530 00:29:45,240 --> 00:29:49,360 Speaker 1: Musk more involved in Twitter could mean for the crypto community. 531 00:29:50,240 --> 00:29:53,719 Speaker 1: The crypto community is extremely fond of Elon Musk, and 532 00:29:53,960 --> 00:29:56,800 Speaker 1: he in some ways I think is lead agent amongst 533 00:29:56,880 --> 00:30:01,120 Speaker 1: the believer crowd, and I think that if he were 534 00:30:01,280 --> 00:30:04,160 Speaker 1: to become more involved in the community. I certainly think 535 00:30:04,320 --> 00:30:06,400 Speaker 1: there's been a lot of speculation around whether that would 536 00:30:06,440 --> 00:30:10,400 Speaker 1: mean a more decentralized messaging platform, whether the you know, 537 00:30:10,440 --> 00:30:13,400 Speaker 1: a centralized entity is necessarily the best. There's a lot 538 00:30:13,400 --> 00:30:16,360 Speaker 1: of talk about what type of speech would be allowed. Um, 539 00:30:16,360 --> 00:30:19,440 Speaker 1: but I believe the crypto enthusiasts to be extremely, extremely happy. 540 00:30:19,760 --> 00:30:23,120 Speaker 1: So much of the conversation has been around cryptocurrencies and 541 00:30:23,160 --> 00:30:27,480 Speaker 1: payments and the economy and assets and investing. Twitter does 542 00:30:27,720 --> 00:30:30,920 Speaker 1: allow for some of this through the Lightning network. How 543 00:30:31,080 --> 00:30:37,520 Speaker 1: then does social media and commerce start to merge. I 544 00:30:37,520 --> 00:30:40,040 Speaker 1: think this is one of the big areas that has 545 00:30:40,120 --> 00:30:43,800 Speaker 1: been not fully realized yet in the crypto space, is 546 00:30:43,840 --> 00:30:47,240 Speaker 1: a social network that is entirely crypto neated. And I 547 00:30:47,280 --> 00:30:49,480 Speaker 1: think there's a couple of different ways that it could 548 00:30:49,520 --> 00:30:52,520 Speaker 1: come about. I think, as as you're mentioning messaging, if 549 00:30:52,520 --> 00:30:56,240 Speaker 1: we think about a crypto native messaging solution, whether that 550 00:30:56,480 --> 00:31:00,320 Speaker 1: is um happenings through an existing messaging network or sport, 551 00:31:00,600 --> 00:31:03,240 Speaker 1: there's a lot of really interesting players saying, hey, how 552 00:31:03,280 --> 00:31:06,320 Speaker 1: do you message somebody who has a wallet that you 553 00:31:06,360 --> 00:31:08,720 Speaker 1: can see there's really interesting stuff in it. You know, 554 00:31:08,840 --> 00:31:12,440 Speaker 1: you might share some affinities or identities, but you don't 555 00:31:12,440 --> 00:31:14,880 Speaker 1: have no way to contact them. So there needs to 556 00:31:14,920 --> 00:31:18,959 Speaker 1: be a core messaging infra layer of both the application 557 00:31:19,040 --> 00:31:23,240 Speaker 1: and infra layer to to kind of solve this. Mercedes, 558 00:31:23,640 --> 00:31:26,120 Speaker 1: talk to us about what's happening on the consumer front 559 00:31:26,120 --> 00:31:30,160 Speaker 1: when it comes to cryptocurrency. Obviously, we hear so much 560 00:31:30,160 --> 00:31:31,880 Speaker 1: about n F t s, and for so many people 561 00:31:31,880 --> 00:31:34,720 Speaker 1: it's just should I buy bitcoin or not? What do 562 00:31:34,760 --> 00:31:37,000 Speaker 1: you think are the main trends They're really going to 563 00:31:37,320 --> 00:31:42,240 Speaker 1: define the consumer side of the market this year. I 564 00:31:42,280 --> 00:31:44,400 Speaker 1: think one of the really big areas that there was 565 00:31:44,440 --> 00:31:46,680 Speaker 1: a lot of talk about last year but continues to 566 00:31:46,720 --> 00:31:49,840 Speaker 1: be this year is DOW tooling DOWS to centralize. Autonomous 567 00:31:49,920 --> 00:31:53,640 Speaker 1: organizations are a new type of entity where people form 568 00:31:53,800 --> 00:31:57,200 Speaker 1: around an interest or a purpose. There's the Ukrainian Down, 569 00:31:57,240 --> 00:32:00,880 Speaker 1: there's the Climate Dows, there's DOWS focused on sports where 570 00:32:00,920 --> 00:32:03,840 Speaker 1: investors in down like companies that are not fully dows, 571 00:32:04,040 --> 00:32:06,680 Speaker 1: the companies like fan controlled football as well. And we 572 00:32:06,800 --> 00:32:09,520 Speaker 1: think that these organization types are going to be a 573 00:32:09,560 --> 00:32:14,840 Speaker 1: really popular way for people to collectively organize and vote 574 00:32:15,120 --> 00:32:19,760 Speaker 1: and act together on the interest area that they care about. 575 00:32:20,080 --> 00:32:23,520 Speaker 1: And so I think that DOWS and really need right 576 00:32:23,520 --> 00:32:27,280 Speaker 1: now a discovery layer and an aggregation layer to say, hey, 577 00:32:27,400 --> 00:32:30,360 Speaker 1: here's all these interest areas you might have. You can 578 00:32:30,440 --> 00:32:34,680 Speaker 1: find them and participate in these communities with tokens and 579 00:32:34,680 --> 00:32:36,920 Speaker 1: actually put your money where you're about this. So I 580 00:32:36,920 --> 00:32:39,960 Speaker 1: think next you know, we might see dows replacing even 581 00:32:40,080 --> 00:32:43,000 Speaker 1: Facebook groups in the future. Yeah, it's fascinating. I mean, 582 00:32:43,040 --> 00:32:46,719 Speaker 1: what other applications of dows do you see really taking 583 00:32:46,760 --> 00:32:50,120 Speaker 1: off in the next year. We've seen fundraising for Ukraine, 584 00:32:50,160 --> 00:32:53,760 Speaker 1: we've seen investing, we've seen investing in n f t s. 585 00:32:54,200 --> 00:32:58,480 Speaker 1: But what's the next phase. It's a great question. I 586 00:32:58,520 --> 00:33:00,960 Speaker 1: wish I had the crystal ball. I think that we're 587 00:33:00,960 --> 00:33:04,480 Speaker 1: going to continue to see people say, hey, you're invested, 588 00:33:04,560 --> 00:33:07,400 Speaker 1: We're interested in doing this collective action. It might be 589 00:33:07,480 --> 00:33:09,920 Speaker 1: investment clubs. This is a big one that we're seeing 590 00:33:10,280 --> 00:33:13,880 Speaker 1: companies like Syndicate and are, you know, putting together groups 591 00:33:13,880 --> 00:33:17,280 Speaker 1: and saying you can invest together. It might be I mean, 592 00:33:17,320 --> 00:33:19,600 Speaker 1: I'm a venture capitalist, but it might also be an 593 00:33:19,600 --> 00:33:23,560 Speaker 1: alternative to funding. Think about angel list and other crowdfunding networks. 594 00:33:23,800 --> 00:33:25,320 Speaker 1: That one is a really big one that I think 595 00:33:25,360 --> 00:33:26,880 Speaker 1: is going to be on the rise later this year. 596 00:33:28,040 --> 00:33:30,600 Speaker 1: Mercedes has been so much to watch partner at light 597 00:33:30,640 --> 00:33:33,400 Speaker 1: Speed Venture Partners. Thank you for joining us along with 598 00:33:33,440 --> 00:33:44,440 Speaker 1: Lumberg Shinali Bask We're on the cost of one of 599 00:33:44,480 --> 00:33:47,600 Speaker 1: the busiest wedding seasons in forty years. As life continued 600 00:33:47,640 --> 00:33:51,200 Speaker 1: to return to normal post pandemic, fashion rental platform rent 601 00:33:51,240 --> 00:33:53,400 Speaker 1: the Runway posted its fourth quarter earnings last week, and 602 00:33:53,400 --> 00:33:56,360 Speaker 1: while they saw revenue grow more than from last year, 603 00:33:56,360 --> 00:33:59,200 Speaker 1: the company is still reported in that loss that but 604 00:33:59,320 --> 00:34:02,600 Speaker 1: it was narrow were than expected. Joining me now, CEO, 605 00:34:02,960 --> 00:34:05,840 Speaker 1: Jen him Engen, great to have you back with us. Look, 606 00:34:06,400 --> 00:34:08,880 Speaker 1: you know you've been telling the story since Rent the 607 00:34:08,920 --> 00:34:12,879 Speaker 1: Runway went public and unfortunately it seems like many investors 608 00:34:13,160 --> 00:34:15,719 Speaker 1: aren't buying it. You have shares down more than sevent 609 00:34:16,719 --> 00:34:19,040 Speaker 1: um since the I p O. Why do you think 610 00:34:19,080 --> 00:34:22,760 Speaker 1: that still is? Well? First of all, we're so proud 611 00:34:22,800 --> 00:34:24,839 Speaker 1: of our Q four results. We beat on the top 612 00:34:24,920 --> 00:34:27,680 Speaker 1: line in the bottom line, and I think one for 613 00:34:27,760 --> 00:34:30,960 Speaker 1: your really one for us showed the resilience of our 614 00:34:31,000 --> 00:34:34,120 Speaker 1: business model through a year that was anything but normal. 615 00:34:34,640 --> 00:34:37,320 Speaker 1: And now we're entering into one of the best macro 616 00:34:37,480 --> 00:34:40,640 Speaker 1: environments ever for Rental and we're excited to have the 617 00:34:40,680 --> 00:34:44,480 Speaker 1: investor community watch us grow. So let's talk about the 618 00:34:44,480 --> 00:34:47,520 Speaker 1: boon for weddings this year. What kind of an impact 619 00:34:47,719 --> 00:34:52,319 Speaker 1: do you think that will have on the business. It 620 00:34:52,480 --> 00:34:57,360 Speaker 1: really drives cost efficient customer acquisition for us. So we've 621 00:34:57,400 --> 00:35:00,200 Speaker 1: seen that people come to Rent the Runway because have 622 00:35:00,239 --> 00:35:02,799 Speaker 1: an upcoming event and then we're able to give them 623 00:35:02,800 --> 00:35:05,560 Speaker 1: an incredible experience and convert them into kind of an 624 00:35:05,560 --> 00:35:08,880 Speaker 1: everyday subscriber. So what it does is that the growth 625 00:35:08,920 --> 00:35:12,000 Speaker 1: this year and events builds our business not only for 626 00:35:12,840 --> 00:35:17,080 Speaker 1: two and we gave guidance oft revenue growth for this year, 627 00:35:17,280 --> 00:35:21,000 Speaker 1: but it also builds our customer funnel for years to come. 628 00:35:21,320 --> 00:35:24,280 Speaker 1: So this is just incredible for our business all around. 629 00:35:25,560 --> 00:35:28,359 Speaker 1: That said, you still got investors out there who think 630 00:35:28,400 --> 00:35:30,759 Speaker 1: costs are are are still too high, that it's going 631 00:35:30,800 --> 00:35:33,279 Speaker 1: to be difficult to turn a profit. You say, rent 632 00:35:33,320 --> 00:35:37,200 Speaker 1: the runway will be profitable. What is the strategy? So 633 00:35:37,480 --> 00:35:42,239 Speaker 1: we in our last investor call addressed profitability. We can 634 00:35:42,239 --> 00:35:45,120 Speaker 1: get to profitability with the cash that we currently have. 635 00:35:45,719 --> 00:35:49,759 Speaker 1: We gave the number of average subscribers three thousand subscribers 636 00:35:49,800 --> 00:35:52,840 Speaker 1: were at positive free cash flow. We're managing the business 637 00:35:52,840 --> 00:35:55,360 Speaker 1: to that positive free cash flow. We gave a target 638 00:35:55,360 --> 00:35:57,239 Speaker 1: that we're gonna be a just e bit of profitable 639 00:35:57,320 --> 00:35:59,719 Speaker 1: within the next three to five quarters. And as you 640 00:35:59,719 --> 00:36:02,120 Speaker 1: can see, our gross margins are just a even of 641 00:36:02,200 --> 00:36:04,880 Speaker 1: margins and our free cash flow margins have been growing 642 00:36:04,960 --> 00:36:08,360 Speaker 1: quarter of a quarter and as revenue has been growing 643 00:36:08,400 --> 00:36:12,360 Speaker 1: and kind of returning to the business we have incredible 644 00:36:12,400 --> 00:36:14,960 Speaker 1: operating leverage because this is a business with a lot 645 00:36:15,000 --> 00:36:18,200 Speaker 1: of fixed costs. We've built that offe space for a 646 00:36:18,280 --> 00:36:22,439 Speaker 1: subscriber base that can be much larger, and you'll see 647 00:36:22,440 --> 00:36:25,680 Speaker 1: it be much larger this year. So here's the question, 648 00:36:25,800 --> 00:36:29,720 Speaker 1: is address for you know, five weddings this year enough 649 00:36:30,000 --> 00:36:36,319 Speaker 1: to convert those users into long term paying subscribers. Well 650 00:36:36,440 --> 00:36:40,040 Speaker 1: fift of our subscribers are former customers, so we've done 651 00:36:40,080 --> 00:36:43,600 Speaker 1: a great job historically at converting those one time renders 652 00:36:43,640 --> 00:36:48,080 Speaker 1: into subscribers. We're doing an even more sophisticated job this 653 00:36:48,160 --> 00:36:51,600 Speaker 1: year at positioning subscription from the get go as a 654 00:36:51,680 --> 00:36:54,920 Speaker 1: cost efficient way to get dressed for multiple events, because 655 00:36:54,960 --> 00:36:57,080 Speaker 1: we know that it's not just the two point six 656 00:36:57,080 --> 00:36:59,960 Speaker 1: million weddings. That means two point six million rehearsaled inner 657 00:37:00,120 --> 00:37:03,719 Speaker 1: and bachelorette parties and Sunday brunches and honeymoons and gallas. 658 00:37:04,200 --> 00:37:07,120 Speaker 1: So we're really trying to leverage this momentum in the 659 00:37:07,160 --> 00:37:09,959 Speaker 1: macro environment to show people that there's a better way. 660 00:37:10,320 --> 00:37:14,040 Speaker 1: And then remember that the cost of clothing has gone 661 00:37:14,160 --> 00:37:16,920 Speaker 1: up year over the year, which means the value proposition 662 00:37:16,960 --> 00:37:21,680 Speaker 1: of renting becomes even higher. But could this boon and 663 00:37:21,719 --> 00:37:24,960 Speaker 1: weddings be temporary? What happens next year? What are the 664 00:37:24,960 --> 00:37:30,319 Speaker 1: trends next year if it's not um a wedding bonanza. Well, 665 00:37:30,400 --> 00:37:35,080 Speaker 1: our business, you know, is built on way more than 666 00:37:35,120 --> 00:37:39,840 Speaker 1: just parties. So seventent of how people rent is for 667 00:37:40,040 --> 00:37:43,480 Speaker 1: their everyday life, for going to work, for casual occasions. 668 00:37:43,680 --> 00:37:46,319 Speaker 1: All rent the Runway needs in order to grow is 669 00:37:46,320 --> 00:37:49,160 Speaker 1: an environment where we're not sheltered at home. So we're 670 00:37:49,239 --> 00:37:53,799 Speaker 1: so encouraged by the macro environment where people are just 671 00:37:53,920 --> 00:37:56,520 Speaker 1: returning to normal, and that means they're returning to rent 672 00:37:56,560 --> 00:37:59,279 Speaker 1: the runway. What weddings are this year are just an 673 00:37:59,280 --> 00:38:03,239 Speaker 1: accelerant that will bring millions of new customer awareness into 674 00:38:03,280 --> 00:38:05,800 Speaker 1: the brand and we're then able to convert them again 675 00:38:05,840 --> 00:38:09,040 Speaker 1: for many years to come. So how are our conversations 676 00:38:09,040 --> 00:38:12,000 Speaker 1: with investors going? You know, now that you have to 677 00:38:12,040 --> 00:38:17,799 Speaker 1: answer to these public market investors instead of venture capitalists. 678 00:38:17,800 --> 00:38:19,720 Speaker 1: What do you think it is that they still don't 679 00:38:20,360 --> 00:38:24,239 Speaker 1: appreciate about the story? Well, I think that we've had 680 00:38:24,239 --> 00:38:27,480 Speaker 1: a lot less time to educate the investor market than 681 00:38:27,520 --> 00:38:29,920 Speaker 1: we did in the private markets. Remember we only went 682 00:38:29,960 --> 00:38:33,919 Speaker 1: public in Q four, and I think that this year 683 00:38:34,239 --> 00:38:36,080 Speaker 1: is going to be a year where we can show 684 00:38:36,480 --> 00:38:39,080 Speaker 1: progression in all of our margins, which can we can 685 00:38:39,080 --> 00:38:42,120 Speaker 1: show very strong revenue growth this year. We've given strong 686 00:38:42,160 --> 00:38:45,319 Speaker 1: guidance against Q one and against the full year, and 687 00:38:45,360 --> 00:38:47,880 Speaker 1: I think that it's all about building a track record. 688 00:38:47,960 --> 00:38:51,640 Speaker 1: We don't expect things to change overnight. We want people 689 00:38:51,680 --> 00:38:54,080 Speaker 1: to watch us, to be engaged with this brand, and 690 00:38:54,120 --> 00:38:56,960 Speaker 1: we're really excited to show people what we can do. 691 00:38:58,040 --> 00:39:00,759 Speaker 1: So do you think that share price is going to 692 00:39:00,840 --> 00:39:05,200 Speaker 1: turn around? I think it will all right. Paid the 693 00:39:05,239 --> 00:39:08,680 Speaker 1: picture for the next year, we say equation and the 694 00:39:08,719 --> 00:39:12,200 Speaker 1: macro environment that we're facing. I mean the picture for 695 00:39:12,200 --> 00:39:14,000 Speaker 1: the next year is that we're going to have a 696 00:39:14,040 --> 00:39:17,640 Speaker 1: revenue base that enables us to drive the business towards 697 00:39:17,680 --> 00:39:20,560 Speaker 1: adjusted the bit of profitability. We're going to continue to 698 00:39:20,640 --> 00:39:23,360 Speaker 1: make the right choices to build a business for the 699 00:39:23,440 --> 00:39:27,880 Speaker 1: long term, which means increasing our subscriber engagement, which drives 700 00:39:27,920 --> 00:39:31,120 Speaker 1: higher our crew over time, which brings customers into the brand. 701 00:39:31,320 --> 00:39:34,400 Speaker 1: We're making it easier to find clothing that fits you 702 00:39:34,480 --> 00:39:36,960 Speaker 1: that you love. So I think that this is really 703 00:39:36,960 --> 00:39:40,080 Speaker 1: the beginning of the next chapter of our business and 704 00:39:40,200 --> 00:39:45,680 Speaker 1: really excited to outline for investors, this very clear path 705 00:39:45,719 --> 00:39:49,440 Speaker 1: to profitability that we have, all right, Jennifer Hyman, CEO 706 00:39:49,680 --> 00:39:54,360 Speaker 1: of Rent the Runway, thank you as always for stopping by. 707 00:39:55,440 --> 00:39:58,040 Speaker 1: And that does it for this edition of Bloomberg Technology. 708 00:39:58,120 --> 00:40:00,640 Speaker 1: Stay with us all week when we break now Big 709 00:40:00,760 --> 00:40:06,120 Speaker 1: Tech Earnings kicking off with Netflix tomorrow andres Wanston, TransUnion 710 00:40:06,520 --> 00:40:09,040 Speaker 1: Senior Vice President will be joining us to discuss. And 711 00:40:09,080 --> 00:40:11,480 Speaker 1: don't forget to check out our new podcasts. You can 712 00:40:11,520 --> 00:40:15,399 Speaker 1: find it on the terminal, Apple, Spotify, wherever you get 713 00:40:15,400 --> 00:40:19,000 Speaker 1: your podcasts. I'm Emily Changing in San Francisco. This is 714 00:40:19,040 --> 00:40:19,520 Speaker 1: Blueberg