WEBVTT - Smartphone Tariff Exemptions, Meta's Antitrust Trial 0:00:02.520 --> 0:00:09.760 Bloomberg Audio Studios, podcasts, radio news from the heart of 0:00:09.840 --> 0:00:15.560 where innovation, money and power collide in Silicon Valley and beyond. 0:00:16.000 --> 0:00:39.960 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:36.040 --> 0:00:39.279 Live from San Francisco. This is Bloomberg Technology, coming up, 0:00:39.400 --> 0:00:42.519 not off the hook. President Trump says tech tariffs are 0:00:42.560 --> 0:00:47.080 coming for electronics, saying the reprieve was only temporary, plus 0:00:47.200 --> 0:00:51.080 a potential breakup Meta faces the FTC, which says the 0:00:51.120 --> 0:00:55.320 tech giant is a monopoly for owning Instagram and WhatsApp, 0:00:55.640 --> 0:00:58.680 and an all female crew defying gravity. We bring you 0:00:58.720 --> 0:01:03.160 the details of Blue Origins historical space mission. We also 0:01:03.280 --> 0:01:06.560 have some breaking news crossing the Bloomberg terminal, and it 0:01:06.600 --> 0:01:08.880 comes from the New York FED who have published and 0:01:08.959 --> 0:01:13.760 released their March survey of consumer expectations. The main headline 0:01:13.959 --> 0:01:17.399 one year US inflation expectations rising to three point six 0:01:17.440 --> 0:01:19.839 percent from three point one percent in the month of March. 0:01:19.840 --> 0:01:23.840 But there's also a feeling here that unemployment expectations are 0:01:23.920 --> 0:01:27.080 also moving higher, and that we could see unemployment move 0:01:27.160 --> 0:01:29.720 to a level jumping four point six percent according to 0:01:29.720 --> 0:01:33.600 that survey, to early pandemic levels. A lot to pack 0:01:33.800 --> 0:01:36.640 into this show. Let's get out to Bloomberg's Ryan Vastelica, 0:01:36.680 --> 0:01:39.880 who's across the technology sector for US. Okay, a lot 0:01:39.880 --> 0:01:43.240 of information over the weekend. Right now, those big, big 0:01:43.240 --> 0:01:46.679 tariff numbers don't apply to electronics, but tariffs are coming. 0:01:46.680 --> 0:01:49.480 What are you seeing in tech shares this morning? Hey, 0:01:49.520 --> 0:01:50.040 good morning. 0:01:50.160 --> 0:01:52.600 So right now we are seeing a pretty broad based 0:01:52.760 --> 0:01:56.800 rally companies like Apple, EhP, the hardware side of things, 0:01:56.880 --> 0:01:59.560 the chip side of things, either, I'll do them pretty 0:01:59.640 --> 0:02:02.080 well so far today, it seems like people are interpreting 0:02:02.120 --> 0:02:04.720 this as maybe at least a step in the right direction, 0:02:04.800 --> 0:02:08.400 perhaps a softer stance after some of the hardline numbers 0:02:08.400 --> 0:02:12.600 that really send stocks reeling, you know, previous couple of days. 0:02:13.680 --> 0:02:15.839 What's interesting, We're just showing shares of Apple up three 0:02:15.840 --> 0:02:18.239 point seven percent, not as high as they were and 0:02:18.280 --> 0:02:20.240 perhaps the pre market, but one of the names we 0:02:20.360 --> 0:02:24.080 focused on, wool Street, is still treading water. Right Ryan, 0:02:24.120 --> 0:02:28.160 I'm thinking about profit expectations and basically we're kind of stuck. 0:02:28.360 --> 0:02:31.760 No one is adjusting their forecasts for how these companies 0:02:31.760 --> 0:02:33.080 are going to be impacted going forward. 0:02:33.120 --> 0:02:36.080 What do you say, Yeah, absolutely so, this is a 0:02:36.120 --> 0:02:39.240 major major issue. Especially as people start to consider maybe 0:02:39.360 --> 0:02:42.360 whether these stocks look attractive following how much they've come down. 0:02:42.440 --> 0:02:45.640 So far, we haven't seen analysts really cut their estimates 0:02:45.639 --> 0:02:49.720 too dramatically on Apple, Nvidia or the other check names, 0:02:49.880 --> 0:02:52.160 or you know, the tech sector in general. That suggests 0:02:52.160 --> 0:02:54.240 that even though these stocks have come down quite a bit, 0:02:54.400 --> 0:02:57.400 their pes may not be as attractive as they seem 0:02:57.440 --> 0:02:59.800 if it turns out the E and the PE ratio 0:03:00.240 --> 0:03:02.799 is sort of artificially high as it stands right now. 0:03:02.840 --> 0:03:04.760 So this is something we're going to be watching, especially as. 0:03:04.639 --> 0:03:07.480 We get into earning season, any kind of commentary on 0:03:07.560 --> 0:03:09.240 what to expect them by the remainder of the year. 0:03:09.720 --> 0:03:12.320 You know, we haven't yet seen whether companies are going 0:03:12.360 --> 0:03:15.320 to be issuing forecasts at the rate they have in 0:03:15.360 --> 0:03:18.160 the past. Some companies have pulled their forecast is given 0:03:18.200 --> 0:03:20.600 the uncertain environment. So there's still a lot of questions 0:03:20.680 --> 0:03:23.120 out there about what we could expect. That puts the 0:03:23.160 --> 0:03:26.079 idea of what fair value is into question, and that's 0:03:26.080 --> 0:03:28.320 why we're seeing a lot of you know, people waiting 0:03:28.320 --> 0:03:30.680 to see what analysts are doing and what estimates look 0:03:30.800 --> 0:03:31.760 like after a month or so. 0:03:32.720 --> 0:03:35.040 There's a lot of people that want technology companies to 0:03:35.080 --> 0:03:38.320 see steep revisions in their guidance to feel comfortable. There 0:03:38.320 --> 0:03:40.240 are lots of people who say they don't care. Bloomers. 0:03:40.280 --> 0:03:42.480 Brian Vassenica busy couple of weeks for you and I 0:03:42.600 --> 0:03:45.400 coming up. Here's what President Trump had to say about 0:03:45.480 --> 0:03:48.080 tariff's yesterday. He was speaking on Air Force One. 0:03:48.680 --> 0:03:50.800 Well, that's going to be an anspert soon and we'll 0:03:51.480 --> 0:03:52.520 we'll be discussing it. 0:03:52.560 --> 0:03:54.160 But we'll also talk to companies. 0:03:54.200 --> 0:03:57.880 You know, you have to show a certain flexibility, so 0:03:58.000 --> 0:04:01.920 such products might lose flexibility some products for some products. 0:04:01.960 --> 0:04:06.440 Yeah, maybe we're j are now by IDC's Ryan Reef, 0:04:06.440 --> 0:04:10.000 Group vice President for the company's worldwide Device Tracker Suite, 0:04:10.040 --> 0:04:13.640 which of course includes phones, tablets, wearables, so much more so. 0:04:13.680 --> 0:04:16.960 The state of play is actually not clear. Right Friday night, 0:04:17.000 --> 0:04:19.520 we kind of believed it was a reprieve of consumer 0:04:19.560 --> 0:04:22.719 electronics in particular not being subject to the one hundred 0:04:22.760 --> 0:04:25.880 and twenty five percent level tariff. By Sunday you have 0:04:25.920 --> 0:04:28.760 the administration saying it is not a pause or a reprieve. 0:04:29.120 --> 0:04:33.240 It's just that we will have electronic specific tariffs to come. 0:04:33.560 --> 0:04:35.479 When you got to your desk, this morning. Where do 0:04:35.520 --> 0:04:36.400 you think that we stood. 0:04:38.480 --> 0:04:40.640 I think we said that personally in my opinion is 0:04:40.640 --> 0:04:43.000 I think this was part of the master plan. It's 0:04:43.000 --> 0:04:45.280 hard to actually know if that will actually be the 0:04:45.560 --> 0:04:47.919 or was the case, but I think, you know, I 0:04:47.920 --> 0:04:51.880 think generally the at least on the tech aspect of 0:04:52.279 --> 0:04:55.040 these tariffs that we've all seen and announced on April second, 0:04:55.640 --> 0:04:58.159 there was no way that the economy was going to 0:04:58.200 --> 0:05:01.360 sustain around these, really from the US side, but really 0:05:01.360 --> 0:05:03.080 both sides, I think if you really boil it down, 0:05:03.120 --> 0:05:06.839 so I think many were expecting this. That was just 0:05:07.000 --> 0:05:10.000 discussed on previous interviews that you guys have had today. 0:05:10.240 --> 0:05:12.240 But I think now it sort of comes back to 0:05:12.320 --> 0:05:14.560 actually the previous Ryan that from your team that you 0:05:14.640 --> 0:05:16.920 just had on made a good point, right. I think 0:05:17.080 --> 0:05:20.839 we're not seeing supply chains move that much. There's Ben Pullan. 0:05:20.960 --> 0:05:22.599 We expect there's going to be a lot more just 0:05:23.120 --> 0:05:24.839 to get done what you can just in case it's 0:05:24.839 --> 0:05:27.320 a Q two thing. But even from the the the 0:05:27.440 --> 0:05:29.720 imamless side of the street, you know, it seems like 0:05:29.760 --> 0:05:32.800 everyone's kind of holding ground because of the uncertainty across 0:05:32.800 --> 0:05:33.120 the board. 0:05:34.360 --> 0:05:37.320 You published some really interesting data from IDC this morning 0:05:37.720 --> 0:05:41.680 on the smartphone market in the first quarter, and this 0:05:41.720 --> 0:05:43.839 is the market share figures, right, And this is why 0:05:43.880 --> 0:05:46.800 we keep focusing on Apple in particular. You see that 0:05:46.920 --> 0:05:51.240 after you know, Samsung single biggest player after Samsung, but 0:05:51.440 --> 0:05:54.080 generally the market grew one point five percent in the 0:05:54.080 --> 0:05:56.360 first three months of this year. I'm seeing a lot 0:05:56.400 --> 0:05:59.520 of evidence that there was some front running because people 0:05:59.560 --> 0:06:01.920 knew towns were coming. How much did that factor into 0:06:01.920 --> 0:06:02.479 your research? 0:06:04.000 --> 0:06:06.839 There's definitely a play of it into the numbers being 0:06:06.960 --> 0:06:09.200 you know, I guess growth in the first quarter and 0:06:09.200 --> 0:06:11.440 so forth, but I don't know that it was as 0:06:11.560 --> 0:06:14.480 drastic as what we sort of saw some media headlines 0:06:14.520 --> 0:06:16.800 towards the end of March. What we're seeing is a 0:06:16.839 --> 0:06:20.279 lot of that activity works now it's coming to fruition, 0:06:20.720 --> 0:06:23.920 especially with the pause on tech. So there's really two 0:06:23.960 --> 0:06:26.080 ways to think about this. The supply side understands what 0:06:26.120 --> 0:06:28.560 they're up against day to day, hour to hour, right, 0:06:28.600 --> 0:06:30.680 you know, there's either a tariff on or off. If 0:06:30.680 --> 0:06:32.600 it's off, you make a decision of do you want 0:06:32.640 --> 0:06:35.320 to just speed up things to try to produce, build 0:06:35.360 --> 0:06:38.800 and ship. The consumer side is not that sort of 0:06:38.839 --> 0:06:42.479 straightforward because generally, I think what we the industry is 0:06:42.480 --> 0:06:44.880 looking at, we're certainly looking at, is does all of 0:06:44.920 --> 0:06:49.000 this uncertainty that's consistent like basically owning the news, does 0:06:49.040 --> 0:06:53.120 that just overall slow down economic demand? Not tech related, 0:06:53.120 --> 0:06:55.800 but just in general, we believe it does. I think 0:06:56.120 --> 0:06:58.520 that's also a factor that these OEMs Apple and who 0:06:58.680 --> 0:07:00.280 have to build in you don't want to up too 0:07:00.320 --> 0:07:02.120 much in and they haven't sit there that people aren't 0:07:02.120 --> 0:07:03.520 willing to buy because they're concerned. 0:07:04.520 --> 0:07:06.880 Ran you just said the supply side does know what's 0:07:06.920 --> 0:07:10.600 going on? You really think that, well, you know, let's 0:07:10.600 --> 0:07:12.720 take Apple as a case study. Right The reporting from 0:07:12.800 --> 0:07:15.400 Mark German is that the strategy right now in the 0:07:15.400 --> 0:07:18.760 case of the iPhone is prioritize iPhones built in India 0:07:19.080 --> 0:07:21.360 move them to the United States. I think in India 0:07:21.360 --> 0:07:24.360 they do about thirty million handsets a year. That's nothing 0:07:24.480 --> 0:07:27.320 in the scheme of things of the overall production. Given 0:07:27.320 --> 0:07:29.400 that most of those iPhones go to a big market 0:07:29.400 --> 0:07:31.760 in America, do you really think that they have a 0:07:31.800 --> 0:07:35.720 plan to adjust and that they understand what the administration 0:07:35.840 --> 0:07:37.640 is doing with electronics tariffs. 0:07:39.320 --> 0:07:41.880 I don't think that they are guesstimating the plan. I 0:07:41.960 --> 0:07:44.960 think that some companies, this is speculation, Just be very clear, 0:07:46.200 --> 0:07:49.120 would you know, either have some discussions that have been 0:07:49.560 --> 0:07:52.920 ongoing since you know, the election prior to that. That's 0:07:52.960 --> 0:07:55.680 just what you know, big companies do every election year. 0:07:56.200 --> 0:07:57.640 But I would think that they were very focused on 0:07:57.720 --> 0:08:00.720 terrorists because that's what this administration ran on. And I 0:08:00.720 --> 0:08:02.960 don't think that they know every detail, but I would 0:08:03.000 --> 0:08:06.720 assume that some of these big companies were either forewarned 0:08:06.840 --> 0:08:09.880 or you'll have some heads up, but maybe not. And 0:08:09.960 --> 0:08:12.800 I think that that the India piece keeps coming up 0:08:13.360 --> 0:08:15.720 with iPhone and I think is very interesting, no question 0:08:15.760 --> 0:08:18.200 in my mind. Prior to you know, April second and 0:08:18.240 --> 0:08:22.360 even this election, the plan was to ramp up more 0:08:23.360 --> 0:08:24.800 towards the end of a set, like you know, more 0:08:24.840 --> 0:08:29.360 assembly and manufacturing India. That's been pretty well disclosed. But 0:08:29.400 --> 0:08:32.120 whether or not this shifts things that quickly to be 0:08:32.120 --> 0:08:34.480 able to feed the US market, I'm a little bit 0:08:34.480 --> 0:08:36.120 more on the skeptical side of that, But I think 0:08:36.120 --> 0:08:39.040 that these these sort of pause or exemptions, whatever you 0:08:39.080 --> 0:08:41.280 want to call them, on China, that's going to be 0:08:41.280 --> 0:08:43.319 the focus. You're trying to build as much where it's 0:08:44.040 --> 0:08:45.839 most efficient in the product lines you. 0:08:45.800 --> 0:08:56.240 Ned Ryan Reeth for d C with some timely data, 0:08:58.200 --> 0:09:01.760 often more than a decade since perch seeing Instagram and WhatsApp. 0:09:01.880 --> 0:09:05.800 Meta is facing a landmark trial by the FTC alleging 0:09:05.800 --> 0:09:09.560 it made quote killer acquisitions that stifle competition for more 0:09:09.559 --> 0:09:12.680 blombergs Riley Griffin joins us on set. We're underway. What's 0:09:12.679 --> 0:09:13.920 the latest headlines out of DC. 0:09:14.440 --> 0:09:17.400 We have heard that introductory remarks have begun and the 0:09:17.480 --> 0:09:20.120 FTC is laying out a case in which it's alleging 0:09:20.120 --> 0:09:24.439 that Meta engage in a buy or bury strategy, squashing 0:09:24.480 --> 0:09:27.840 the competition and ultimately degrading the quality of the apps 0:09:28.160 --> 0:09:29.280 that Meta now aren't. 0:09:29.480 --> 0:09:31.280 We're going to point out on what you just said 0:09:31.760 --> 0:09:34.520 the headlines emerging. This is a behind closed doors proceedings. 0:09:35.600 --> 0:09:38.800 So the counter argument from Meta is pretty straightforward. Actually, 0:09:38.840 --> 0:09:40.839 let's bring it up a quote from the chief Legal 0:09:40.880 --> 0:09:44.240 Council at Meta that wrote over the weekend. But basically 0:09:44.320 --> 0:09:46.600 they're pointing out that how can you have a monopoly 0:09:46.640 --> 0:09:49.920 in a market where other players have very similar numbers 0:09:49.960 --> 0:09:53.560 to their own, citing TikTok and YouTube in particular, and 0:09:53.679 --> 0:09:56.920 arguing Meta has a less than thirty percent market share 0:09:57.280 --> 0:09:58.360 in those markets. 0:09:58.880 --> 0:10:01.640 It's an amazing argument, in part because the FDC has 0:10:01.640 --> 0:10:04.840 centered this around Snap and Meta is saying anybody with 0:10:04.920 --> 0:10:08.520 a kid at home knows that TikTok is a great 0:10:08.559 --> 0:10:12.280 competitor to Instagram. What I find so interesting about this 0:10:12.520 --> 0:10:15.640 ed is that one of Meta's reputational weaknesses over the 0:10:15.720 --> 0:10:18.960 years has been that it copies its competitors, and here 0:10:19.040 --> 0:10:21.720 in this case, Meta's legal team is actually using that 0:10:21.800 --> 0:10:22.920 to its advantage. 0:10:23.600 --> 0:10:25.199 It's going to go on and on, and we will 0:10:25.200 --> 0:10:27.559 cover it throughout the week. Riley Griffin, thank you very much. 0:10:27.600 --> 0:10:30.800 Let's get more on Meta's historic trial. William Kovacic, George 0:10:30.840 --> 0:10:34.880 Washington University Law School, Global Competition Professor of Law and Policy, 0:10:35.320 --> 0:10:39.000 joins us now And even before the proceedings got underway 0:10:39.040 --> 0:10:42.760 this morning. This morning, William, the chair of the FTC, 0:10:42.840 --> 0:10:46.240 gave the news to an interview to Fox Business and 0:10:46.320 --> 0:10:51.360 basically came out strongly, we see Meta as monopoly. What 0:10:51.400 --> 0:10:53.360 do you make of that? The timing of that comment 0:10:53.400 --> 0:10:54.920 and the timing of the interview. 0:10:55.679 --> 0:10:58.599 I think he's trying to underscore the commitment of the 0:10:58.640 --> 0:11:02.280 Commission to carry this case forward. There have been lots 0:11:02.320 --> 0:11:05.840 of questions raised about whether the interest of the White 0:11:05.880 --> 0:11:08.880 House and the case, the lobbying by Meta of the 0:11:08.920 --> 0:11:12.360 White House might lead to a settlement some action that 0:11:12.400 --> 0:11:14.880 would sell the case out. And I think what the 0:11:14.960 --> 0:11:17.920 Chair is trying to do in a variety of interviews, 0:11:17.920 --> 0:11:20.640 including this morning, is to say, in his words, we're 0:11:20.720 --> 0:11:22.760 keeping our foot to the gas. We're not going to 0:11:22.840 --> 0:11:23.320 back down. 0:11:24.320 --> 0:11:26.080 I should point out for an audience, you're a former 0:11:26.160 --> 0:11:30.240 member of the FTC and you chair the agency between 0:11:30.240 --> 0:11:31.960 March two thousand and eight March two thousand and nine. 0:11:32.040 --> 0:11:34.080 You and I, I feel like over the years have 0:11:34.160 --> 0:11:37.800 discussed the threat of an antitrust action against Meta and 0:11:37.840 --> 0:11:41.960 others many times, and so I ask, how does this one, 0:11:42.000 --> 0:11:45.840 this trial compare and does it have teeth? This does 0:11:45.880 --> 0:11:46.440 have teeth. 0:11:46.800 --> 0:11:50.480 There are formidable obstacles in the path of the FTC, 0:11:50.559 --> 0:11:54.400 prevailing obstacles that Judge Bozburg, who's trying the case, is 0:11:54.480 --> 0:11:59.440 mentioned before. But the requested relief is deadly serious. The 0:11:59.480 --> 0:12:03.880 divested sure of both Instagram and WhatsApp. The FTC has 0:12:04.000 --> 0:12:07.319 marshaled a good body of evidence, it seems that comes 0:12:07.600 --> 0:12:09.880 in many ways right out of the files of Meta 0:12:09.960 --> 0:12:13.480 itself the words of its senior leadership. So it's going 0:12:13.520 --> 0:12:16.160 to try the case in many ways by showing that 0:12:16.559 --> 0:12:19.920 Meta itself believed that it had market power and it 0:12:20.000 --> 0:12:23.600 believed that the acquisitions would suppress competition. Now Meta has 0:12:23.640 --> 0:12:26.680 some good responses to this, as Riley just mentioned, but 0:12:27.559 --> 0:12:30.800 this is a This is a deadly serious exercise. 0:12:30.240 --> 0:12:30.880 For the company. 0:12:31.280 --> 0:12:35.000 And if the judge finds liability and takes the remedial 0:12:35.080 --> 0:12:38.280 path that is available to the FTC and to the judge, 0:12:38.640 --> 0:12:40.920 we could see a major divestiture that would affect the 0:12:40.920 --> 0:12:42.000 company dramatically. 0:12:43.080 --> 0:12:46.360 A major divestiture. I mean, I I what are the 0:12:46.440 --> 0:12:48.720 chances of that the odds? How do you even model 0:12:48.760 --> 0:12:50.720 for that in a trial scenario. 0:12:52.280 --> 0:12:55.520 I suppose that if we were looking at a betting 0:12:55.600 --> 0:12:59.760 shop and we were trying to place odds, Meta would 0:12:59.760 --> 0:13:02.480 have an advantage. And the reason for the advantage is 0:13:02.480 --> 0:13:04.800 that it's going to be able to marshal arguments that 0:13:04.880 --> 0:13:07.400 we don't have market power in this market niche that 0:13:07.480 --> 0:13:11.520 the FDC has defined that the FTC can't toss aside TikTok, 0:13:11.640 --> 0:13:16.080 YouTube and x and other social network providers. Uh, and 0:13:16.080 --> 0:13:17.840 that's gonna that's going to be a hard hurdle to 0:13:17.840 --> 0:13:20.520 get over, So I give I give a I give 0:13:20.520 --> 0:13:24.480 a modest advantage to to to Meta in handling the case, 0:13:25.000 --> 0:13:27.280 But a lot of the FDC's evidence is going to 0:13:27.320 --> 0:13:29.360 come right out of its files. We're going to have 0:13:29.480 --> 0:13:33.120 senior executives on the stand giving us a really an 0:13:33.200 --> 0:13:36.600 unprecedented look at how the company operates, and that's what 0:13:36.720 --> 0:13:39.760 always makes trials risky and dangerous for defendants. 0:13:40.640 --> 0:13:44.000 We're just showing again Jennifer Neustad, Meta's chief legal officer's 0:13:44.120 --> 0:13:47.280 argument over the weekend, which is exactly as you explain. 0:13:47.400 --> 0:13:49.680 Look at the traffic and audience size of TikTok and 0:13:49.720 --> 0:13:52.640 YouTube and their argument metas argument that they have a 0:13:52.679 --> 0:13:54.680 less than thirty percent market share. Could we just go 0:13:54.760 --> 0:13:57.080 back to where we started, which was the FTC chair 0:13:57.080 --> 0:14:00.600 on Fox Business this morning. Ahead of the election of 0:14:00.640 --> 0:14:03.040 President Trump, a lot of people looked at jd Vance 0:14:03.160 --> 0:14:07.280 and his attitude towards big tech. It does seem in 0:14:07.320 --> 0:14:11.360 the early stages that President Trump listens to jd Vance 0:14:11.640 --> 0:14:14.440 about oversight of big tech in the antitrust context. What 0:14:14.440 --> 0:14:15.040 do you make of that? 0:14:16.400 --> 0:14:19.520 I think he is listening and perhaps there's a predisposition 0:14:19.640 --> 0:14:23.600 to listen and listen favorably, because notice the number of 0:14:23.640 --> 0:14:27.040 occasions on which the President has suggested that were it 0:14:27.160 --> 0:14:31.720 not for decisions made by Meta by Google in twenty twenty, 0:14:31.960 --> 0:14:34.760 that he would have gained reelection. So I don't think 0:14:34.800 --> 0:14:37.760 he's disposed in a general way to be fond of 0:14:37.800 --> 0:14:40.680 these companies. And I think he has accepted many of 0:14:40.680 --> 0:14:43.240 the arguments that the Vice president has offered to him, 0:14:43.520 --> 0:14:46.520 So he has there are a lot of reasons for 0:14:46.600 --> 0:14:50.000 which he might be very wary about taking a settlement 0:14:50.040 --> 0:14:52.840 that would be good for Meta here. I suspect he'll listen, 0:14:53.240 --> 0:14:56.800 but he's not ordinarily disposed to think that they are 0:14:57.240 --> 0:14:58.520 a particularly good actor. 0:15:00.160 --> 0:15:03.000 William Cove Church of the George Washington University Law School, 0:15:03.000 --> 0:15:05.160 and of course, former f TC chair himself, thank you. 0:15:14.320 --> 0:15:18.880 Cryptocurrency platform Cracking is expanding beyond digital currencies by now 0:15:18.920 --> 0:15:22.560 offering US equity and ETF trading. Joining US now Cracking 0:15:22.600 --> 0:15:25.480 co CEO Argent Setti along with my mate Bloombau Shnali 0:15:25.520 --> 0:15:27.240 Bassectionali take it away Rgin. 0:15:27.280 --> 0:15:29.040 Thanks for joining us. Of course, this is a big 0:15:29.080 --> 0:15:33.320 move by kracking to get into traditional stocks, and my 0:15:33.560 --> 0:15:36.200 question is how much is this a move to take 0:15:36.240 --> 0:15:40.360 on Robinhood Coinbase in a much larger way in terms 0:15:40.440 --> 0:15:43.560 of providing a one stop shop for clients. 0:15:44.960 --> 0:15:47.360 Yeah. So if you take a step back on the market, 0:15:47.680 --> 0:15:50.600 I think a lot of people think of crypto and 0:15:50.640 --> 0:15:54.440 traditional equities and traditional finance differently than we don't, which 0:15:54.480 --> 0:15:59.160 is our core customer base is professional traders and they 0:15:59.240 --> 0:16:01.760 exist all over the world very similarly in the way 0:16:01.760 --> 0:16:06.280 in which they think, eat and trade, and so Coinbase 0:16:06.360 --> 0:16:10.320 we think, and Robinhood in terms of prosumers and people 0:16:10.360 --> 0:16:13.200 getting onboard and into crypto. And then you have you know, 0:16:13.240 --> 0:16:16.160 other companies similar to Interactive Brokers that focus on professional 0:16:16.200 --> 0:16:19.640 trading and day trading. So for us, our goal has 0:16:19.680 --> 0:16:22.840 always been to be a leader in crypto assets, but 0:16:22.920 --> 0:16:24.880 also be a leader in the way in which our 0:16:25.000 --> 0:16:28.720 professional trading and customers and clients want to trade, may 0:16:28.760 --> 0:16:31.600 that be long term or short term, and so this 0:16:31.680 --> 0:16:33.480 is a this is a part of the path for 0:16:33.560 --> 0:16:37.320 us to continue to do that. In addition, we you know, 0:16:37.400 --> 0:16:41.200 we went to an agreement to acquire a company called 0:16:41.320 --> 0:16:47.080 Ninja Trader that focuses on professional trading for retail derivatives. 0:16:47.640 --> 0:16:50.240 So what you see us doing is just go across 0:16:50.240 --> 0:16:53.239 a wider range of asset classes, including equities and commodities. 0:16:53.280 --> 0:16:55.320 What does it mean for you financially Because of course, 0:16:55.360 --> 0:16:57.600 when you think about krack and, a lot of investors 0:16:57.640 --> 0:17:02.560 are awaiting highly anticipated one day IPO, what can you 0:17:02.600 --> 0:17:04.960 tell us about that path and how this helps. 0:17:04.760 --> 0:17:05.359 You get there? 0:17:06.800 --> 0:17:09.840 So, the most important thing for krack And is its clients, 0:17:10.280 --> 0:17:14.080 and what our clients care about is transparency, security and 0:17:14.160 --> 0:17:17.600 counterparty risk. And so as we continue to expand globally, 0:17:17.760 --> 0:17:22.160 not just here in the United States, but Europe, UK, Canada, 0:17:22.280 --> 0:17:25.879 Australia and now and to Asia, the thing that our 0:17:25.920 --> 0:17:30.800 clients care about most is that counterparty risk and regulatory clarity, 0:17:30.840 --> 0:17:33.679 and so what we're seeing is more regulatory clarity and 0:17:33.760 --> 0:17:37.239 eventually market stability in the crypto ecosystem and so on. 0:17:37.320 --> 0:17:39.680 Behalf of our clients will always want to be transparent 0:17:39.720 --> 0:17:43.359 with our financials, what we're doing, proof of reserves, etc. 0:17:44.440 --> 0:17:46.719 And if we do decide to go public, it'll be 0:17:47.080 --> 0:17:48.160 a journey along the way. 0:17:49.480 --> 0:17:52.200 Timing is everything. Oh, jenn, I found it so interesting 0:17:52.240 --> 0:17:53.879 to see your release because if you think about the 0:17:53.880 --> 0:17:57.080 business model right of Robinhood or a coinbase, they very 0:17:57.160 --> 0:18:01.679 much focus on volatility. Volatility drives volumes and transaction. How 0:18:01.760 --> 0:18:04.359 much is that a factor for you in this initiative. 0:18:06.640 --> 0:18:11.920 So it's look, if you're thinking about their clients, then 0:18:12.280 --> 0:18:14.840 you are thinking about all the milestones along the way. 0:18:14.840 --> 0:18:18.159 That is the most important. So, as I mentioned before, 0:18:18.320 --> 0:18:21.400 being transparent with our financials, being transparent with our reserves 0:18:21.440 --> 0:18:23.960 and their deposits, being transparent about what the products are, 0:18:24.280 --> 0:18:28.520 making sure that our exchange is fair right, there's no rebates, 0:18:28.560 --> 0:18:30.520 there's no discounts to the way in which all of 0:18:30.600 --> 0:18:33.720 our customers and clients interact with our exchange. That's what's 0:18:33.760 --> 0:18:37.320 most important. Volatility in the market is volatility in the market. 0:18:37.600 --> 0:18:39.239 That's always going to be the case. I care more 0:18:39.240 --> 0:18:41.400 about the slope and the long term growth for what 0:18:41.520 --> 0:18:44.960 access to capital markets and debt markets give our customers 0:18:45.320 --> 0:18:46.480 more than anything else. 0:18:47.520 --> 0:18:50.679 Rogen elsewhere in your portfolio, Empire, you were an investor 0:18:50.720 --> 0:18:55.320 in Xai and post Xai and x you know, there's 0:18:55.359 --> 0:18:58.520 clearly a long term view to look at payments and 0:18:58.560 --> 0:19:01.720 look at other financial service offerings that could you see 0:19:01.800 --> 0:19:04.200 working with Linda and the team on something like that. 0:19:05.480 --> 0:19:09.080 Yeah, I think what's really important is where our clients 0:19:09.119 --> 0:19:12.240 and customers are so today you can think of us 0:19:12.320 --> 0:19:16.760 as trading, but you know there's also products for savings 0:19:16.840 --> 0:19:19.560 in yield depending on the type of customer. And then 0:19:19.560 --> 0:19:23.159 eventually you can think about payments, payments and remittances in 0:19:23.280 --> 0:19:26.119 order to facilitate you know, peer to peer commerce or 0:19:26.240 --> 0:19:27.800 business to peer commerce. 0:19:28.440 --> 0:19:30.159 So again, those will be journeys along the. 0:19:30.119 --> 0:19:32.760 Way, which is we've created the platform and the infrastructure 0:19:32.800 --> 0:19:35.639 to be able to provide this, and we're already partnering. 0:19:35.240 --> 0:19:36.320 With folks to do that today. 0:19:36.359 --> 0:19:38.560 So almost you know, ten percent of our transactions today 0:19:38.560 --> 0:19:41.199 are and through our experiences. It's through people connecting through 0:19:41.240 --> 0:19:42.120 our API argent. 0:19:42.240 --> 0:19:46.239 One question I have as a former private investor in 0:19:46.320 --> 0:19:49.719 so many ways, you're very familiar with the xaxai story, 0:19:50.000 --> 0:19:54.240 but what about the potential for tokenization to make assets 0:19:54.359 --> 0:19:58.119 like this more public? How quickly can you get there? 0:20:00.359 --> 0:20:04.119 Technologically we can get there tomorrow, It's more about regulatory clarity, 0:20:04.320 --> 0:20:07.240 What is the legal and client relationship. How do you 0:20:07.280 --> 0:20:10.000 think about which assets real world assets that we talk 0:20:10.040 --> 0:20:13.840 about bringing on into crypto and making it programmable. So 0:20:14.280 --> 0:20:17.320 what I'd say is that what we're doing now, given 0:20:17.320 --> 0:20:19.600 that the future of training is pretty much borderless. It's 0:20:19.600 --> 0:20:21.880 around the clock, it's twenty four to seven in crypto 0:20:21.960 --> 0:20:24.960 rails has allowed that is that this lays the ground 0:20:25.000 --> 0:20:27.520 with groundwork not just for myself but the other exchanges 0:20:27.560 --> 0:20:31.320 worldwide to be able to provide equities and digitize them 0:20:31.359 --> 0:20:34.080 to become more programmable. So tokenization of equities is a 0:20:34.160 --> 0:20:37.200 term you hear a lot about. I think when you 0:20:37.240 --> 0:20:41.360 think about global liquidity pools and global access to capital 0:20:41.440 --> 0:20:44.520 and then demand for these assets no matter where they 0:20:44.560 --> 0:20:46.840 might be in the US or Europe, I actually think 0:20:46.880 --> 0:20:49.800 this lays a great groundwork for companies to start thinking 0:20:49.840 --> 0:20:52.480 about how they should list who they should work with 0:20:52.520 --> 0:20:55.479 and where those global equidity pools come from. 0:20:56.000 --> 0:20:58.800 Cracking co CEO Argent SETI greats have you back on 0:20:58.840 --> 0:21:01.080 the program and bloom Begstell's thank you for bringing it 0:21:01.119 --> 0:21:03.760 up to us. Now coming up on the show, Electronics 0:21:04.080 --> 0:21:08.440 expecting a temporary reprieve from tariffs, but President Trump says 0:21:08.560 --> 0:21:10.760 there are more tariffs on the way. We'll have more 0:21:10.800 --> 0:21:22.159