Speaker 1: This is Bloomberg Business Week Daily, reporting from the magazine
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Speaker 1: and trends shaping today's complex economy. Plus global business finance
Speaker 1: and tech news as it happens. Bloomberg Business Week Daily
Speaker 1: with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2: Hi, everyone, welcome to the weekend edition of Bloomberg Business Week.
Speaker 2: A US government shutdown and as a result, a monthly
Speaker 2: jobs report from the government that didn't happen. And catch
Speaker 2: the latest on all of this, just head to the
Speaker 2: Bloomberg or Bloomberg dot Com. Also this week, and from Washington,
Speaker 2: pharma stocks rallying on an announcement from the White House.
Speaker 2: We've got a deep dive into what exactly it means
Speaker 2: for drug companies and for patients.
Speaker 3: And the mobile satellite company who stocks shot up as
Speaker 3: well as it looks to go against Elon and SpaceX.
Speaker 3: Then from Amazon's device overhaul to take on Apple in
Speaker 3: the era of AI and metas latest day eyeglasses, to
Speaker 3: Peloton pumping up prices and Aura's new ceramic ring. What
Speaker 3: you need to know from Bloomberg's Mark German. That and
Speaker 3: the exercise suit that amplifies your muscles by way of
Speaker 3: electric pulses and maybe makes you look like a superhero.
Speaker 2: Yes, indeed, all that to come. We start with earnings
Speaker 2: officially just around the corner, but a few companies getting
Speaker 2: us warmed up, including Carnival Corporation, the world's largest cruise
Speaker 2: operator with a fleet of more than ninety ships and
Speaker 2: brands including Carnival Cruise Line its name, Sake Brand, Holland
Speaker 2: America Lines, Princess Seaborn, and a few more.
Speaker 3: The company a great read on the consumer, on travel,
Speaker 3: and on the economy. Josh Weinstein, President, CEO and chief
Speaker 3: Climate Officer of Carnival Corporation joined us on the day
Speaker 3: the company reported record revenue and raised its full year
Speaker 3: earnings forecast for the third straight quarter. Still, investors weren't impressed.
Speaker 4: We did set a record for demand for our yield,
Speaker 4: and that was across North American brands and European brands,
Speaker 4: both coming in four percent higher year over year, which
Speaker 4: is great consistency. We also saw that that improvement was
Speaker 4: driven both by the ticket pricing and on board spending.
Speaker 4: So all the trends that we have are really quite
Speaker 4: positive and it's all helped lead to thirteen percent ROIIC,
Speaker 4: something we haven't seen since got about twenty years now,
Speaker 4: the highest operating income in EBITDA on a per unit
Speaker 4: basis that we've seen in twenty years, record net income.
Speaker 4: So the teams are working hard and delivering over delivering,
Speaker 4: and we'll continue to try to do that.
Speaker 3: We're going to talk about all of that. Stiefel, an
Speaker 3: analyst over at Steple, pointing to a lower than expected
Speaker 3: fourth quarter net yields guidance. It's a measure of the
Speaker 3: amount of revenue you earn per available lower birthday. Are
Speaker 3: you just being conservative with this guidance because it sounds
Speaker 3: like things are going pretty well.
Speaker 4: Yeah, things are going pretty well. It's consistent to what
Speaker 4: we said the guidance would be back in June if
Speaker 4: you backed into what the fourth quarter would be. As
Speaker 4: a matter of fact, we kept the second half overall
Speaker 4: consist in to where we were in December because we
Speaker 4: did experience a lot of volatility over the first half
Speaker 4: of the year given macroeconomic geopolitical events. But what we
Speaker 4: saw is, you know, we've outperformed every single quarter and
Speaker 4: that includes the third quarter, and we're going to work
Speaker 4: hard to try to outperform. Again, we're projecting yields in
Speaker 4: the fourth quarter that demand to be, you know, nicely
Speaker 4: over four percent, just like we ended the third quarter.
Speaker 4: So the trajectory is the trajectory is good.
Speaker 2: I'm Josh, great to have you here, and I'm looking
Speaker 2: at your share price for the year up almost eighteen percent,
Speaker 2: so easily outperforming the broader market. I mean, what's going
Speaker 2: on with the consumer? You guys track the ins and
Speaker 2: outs of it in terms of bookings, what the spend
Speaker 2: is on the ship when they get off the ship.
Speaker 2: So I'm just curious, how do you characterize the consumer
Speaker 2: and who's who's going on who's jumping on board with
Speaker 2: you guys.
Speaker 4: So I'd say the consumer is strong. I think that's
Speaker 4: a pretty consistent word that we've been using for the
Speaker 4: past couple of years. And yes, we do see ebbs
Speaker 4: and flows, and we see gyrations in the backdrop and
Speaker 4: the macroeconomics. But at the end of the day, what
Speaker 4: we have to offer is a very very amazing value
Speaker 4: to what you can get by doing any other type
Speaker 4: of holiday, any other type of vacation, and people pay
Speaker 4: for it. And the great thing is even though they're
Speaker 4: paying more for our experiences than they did last year
Speaker 4: and the year before and the year before that, the
Speaker 4: gap to land based vacations is still huge. And so
Speaker 4: if there is a weakness and pull back in consumer sentiment,
Speaker 4: that bodes very well for us because people are looking
Speaker 4: to stretch their dollar even further and figuring out how
Speaker 4: do I get an amazing holiday because I need one,
Speaker 4: and spend as thoughtfully as I possibly can, and we
Speaker 4: turn up very well when you line us up against
Speaker 4: the alternatives.
Speaker 2: Well, it's cool about talking with you, and I know
Speaker 2: Carnival is your big brand, but I mean you have
Speaker 2: multiple brands, and I know you've consolidated internment in terms
Speaker 2: of some of the groupings. But you talked about positive
Speaker 2: momentum on all of the brands or is there one
Speaker 2: in particular that you're really seeing some standout activity.
Speaker 4: Well, you know, we have a as I said in
Speaker 4: my notes this morning, we have an internal leader board
Speaker 4: obviously with our with our eight world class brands, and
Speaker 4: we encourage the competition and everybody sees who's on top
Speaker 4: and who's marching forward. And you know, the two strongest
Speaker 4: brands on top of our leader board of returns are
Speaker 4: Carnival Cruise Line, which is America's cruise line, and Iida Cruises,
Speaker 4: which is which is the equivalent in Germany. And the
Speaker 4: great thing is as strong as they are and as
Speaker 4: high as they are, they're they're looking over their shoulder
Speaker 4: because everybody is making improvement year over year, and that
Speaker 4: stretches across both North America and Europe as well. And
Speaker 4: the great thing is, despite the fact that we're showing
Speaker 4: so much improvement, only about half of our brands are
Speaker 4: back to where they were in returns since before our
Speaker 4: pause before twenty twenty. Only half of them are at
Speaker 4: their historical peak. So I know the latent demand. They'll
Speaker 4: part of the latent potential that is in our brands,
Speaker 4: and they are marching forward at pace and you can
Speaker 4: see the results on a consolidated basis for the corporation.
Speaker 1: Josh.
Speaker 2: One of the things we always talk about is, and
Speaker 2: we have folks here who are They do one cruise,
Speaker 2: they do another cruise, they do another cruise. And I've
Speaker 2: been on a.
Speaker 5: Carnival ship where I'm talking about Charlie Pah, Yeah I am.
Speaker 5: But I've been on an elevator where I've talked to
Speaker 5: people in the elevator and they're like, yeah, you know,
Speaker 5: this is our tenth cruise or a fifth cruise. I
Speaker 5: am curious what's the mix between new passengers who are
Speaker 5: experienced Carnival for the first time versus those who are
Speaker 5: coming back for a second, third, fourth, fifth, whatever time
Speaker 5: on one of your ships.
Speaker 4: Yeah, so I'll speak holistically and then I can get
Speaker 4: a little bit more specific. But holistically, we got about
Speaker 4: a third of our guests at any one time are
Speaker 4: going to be new to cruise, and the remainder is
Speaker 4: going to be a mix of brand loyalists and those
Speaker 4: who cruise in general, and they might go on various
Speaker 4: brands and they're back on board one of our ships
Speaker 4: one of our brands. It really is dependent on the
Speaker 4: profile of the brand and the cruise because there is
Speaker 4: a huge different in between a three night or quick
Speaker 4: getaway for the weekend out of Miami and going on
Speaker 4: a Quneyard ship for one hundred and twenty night world cruise.
Speaker 3: Josh, I want to have a quick corporate finance question
Speaker 3: with you, because you said something on the call that
Speaker 3: got my interest, and I know a lot of interest
Speaker 3: from investors. Leverage is now down to three point six
Speaker 3: times net debt to ibadah, you'll be able to return
Speaker 3: cash to shareholders when that metric gets to three point
Speaker 3: five percent. Can you get more color here on the
Speaker 3: size and scope of that just thirty seconds, what a
Speaker 3: dividend would look like, what buybacks would look like, and
Speaker 3: when exactly that would happen.
Speaker 4: Well, what we said on the call is, you know,
Speaker 4: we finally got that line of site to three and
Speaker 4: a half times, and from a pro form of perspective,
Speaker 4: after we do a couple of things that we talked
Speaker 4: about on the call, we expect to get to that
Speaker 4: three and a half times, you know, very early in
Speaker 4: our fiscal twenty twenty six, and that really gives us
Speaker 4: freedom to not only continue to responsibly de lever but
Speaker 4: also start that process of returning cash to shareholders. Having
Speaker 4: a dividend is very important to us. Historically we've been
Speaker 4: a dividend paying company, and we know that that opens
Speaker 4: new doors for investors. It gives ongoing yield, and that's
Speaker 4: a great thing for a company to be able to
Speaker 4: guarantee to its shareholders. So that is really priority one
Speaker 4: after that continuing deleveraging, and that will happen in early
Speaker 4: twenty twenty six.
Speaker 3: That was Josh Weinstein, President, CEO and Chief Climate Officer
Speaker 3: of Carnival Corporation.
Speaker 2: Also happening this week, the AI build out and spend continues.
Speaker 2: Corwe was one of the big stories. Shares of the
Speaker 2: company surged after it signed a deal to supply meta
Speaker 2: platforms with as much as fourteen point two billion dollars
Speaker 2: worth of computing power, underscoring the massive cost of developing
Speaker 2: and running advanced AI models while attracting AI and technology
Speaker 2: investments is something the Kingdom of Bahrain is focused on
Speaker 2: as it continues to diversify its economy away from oil.
Speaker 3: On that we were joined by Her Excellency nor Bent
Speaker 3: d Lee al KULAIF, CEO of the Bahrain Economic Development
Speaker 3: Board and also the Kingdom's Minister of Sustainable Development. Her
Speaker 3: focus bringing investment into Bahrain, including data centers.
Speaker 6: Yeah, absolutely, it's important. I mean it's coming, it's not
Speaker 6: it's already there. So we've had a WS set up
Speaker 6: the first hyperscale data center in the Middle East in
Speaker 6: Battery in a few years back. And again, as I mentioned,
Speaker 6: the reason they chose Betteran is because of the regulation,
Speaker 6: but also the strength of the human capital. You mentioned Oracle,
Speaker 6: but we also have some regional and local investments for
Speaker 6: data centers. So we're definitely seeing growth in that region
Speaker 6: where international companies that wish to use that and take
Speaker 6: advantage could come and plug and play and take advantage
Speaker 6: of the data centers already available. But really because of
Speaker 6: the demand, there's a lot of potential and opportunities for
Speaker 6: companies that still wish to have data centers in the
Speaker 6: region to come also and take advantage of that.
Speaker 2: So I am curious. You said very optimistic. What's the
Speaker 2: biggest pertal obstacle right now in you attracting further investment.
Speaker 2: What's the thing that's difficult in terms of what you do.
Speaker 6: I wouldn't say difficult, but we have to have a
Speaker 6: lot of conversations to explain in the business environment and
Speaker 6: talk about their characteristics what makes us different. But it's
Speaker 6: all very very exciting, so we don't mind that at all.
Speaker 2: And I also do think about, you know, something that's
Speaker 2: certainly been front and set sent front of mind for us,
Speaker 2: excuse me, and certainly coming off the you in General Assembly,
Speaker 2: and you know, watching the turmoil that we've seen in
Speaker 2: the in the in the region, how important is that
Speaker 2: to the folks that you're talking with. It's companies, big
Speaker 2: name companies that we know other investors in terms of investing.
Speaker 2: Obviously not every kingdom or area within the Middle East
Speaker 2: is the same, but you know the turmoil and the
Speaker 2: and certainly the war that we've seen between Israel and Hamas,
Speaker 2: how much of that the political situation sometimes slows things down.
Speaker 6: You absolutely need safety and stability for companies to thrive,
Speaker 6: for the economy to grow, and for us in Betty
Speaker 6: and the region as a whole, We've always advocated for
Speaker 6: a piece, We've always played a part on a regional level,
Speaker 6: on an international level to advocate for a piece and stability,
Speaker 6: and we continue to do that. At the same time,
Speaker 6: the countries are very much focused on their economic strategies,
Speaker 6: economic plans and continue to have conversations with companies and
Speaker 6: for those that have any doubt, we just say come
Speaker 6: and talk to us. We will, we will show you.
Speaker 6: We will explain to you that the current business environment,
Speaker 6: but we are blessed to have to have a very
Speaker 6: stable in it, in a safe business environment.
Speaker 2: I have one last question too, and I'm just curious
Speaker 2: when you do have questions with investors obviously well known companies,
Speaker 2: big companies. I'm sure folks do their homework, but what
Speaker 2: is the thing that you think they don't really understand
Speaker 2: about Bahrain and in terms of the economy and what
Speaker 2: you guys are doing.
Speaker 6: I think how diversified the economy is something probably people
Speaker 6: do not realize and given the journey and we've had
Speaker 6: a long journey off reform, our journey in reform and
Speaker 6: achieving the diversification that we're achieved today with eighty five
Speaker 6: percent of the economy being non oil, with a large
Speaker 6: manufacturing sector in nuge for financial services sector and others as well,
Speaker 6: it's something people do not realize and what that means
Speaker 6: is for years and years, for decades, we've built knowledge
Speaker 6: and know how in our people, in our infrastructure, in
Speaker 6: our regulation and the way we do business and the
Speaker 6: way we work with the private sector as well. So
Speaker 6: that's something that I think always surprises people when we
Speaker 6: talk to them.
Speaker 3: Our thanks to her Excellency or bent Lee al Koulev,
Speaker 3: CEO of the Bobrain Economic Development Board and also the
Speaker 3: Kingdom's Minister of Sustainable Development.
Speaker 2: Coming up on Bloomberg BusinessWeek, once doc at Shot up
Speaker 2: this week on news and analyst upgrade and a mission
Speaker 2: to maybe go head ahead with SpaceX.
Speaker 3: The president of AST space Mobile is next. This is Bloomberg.
Speaker 1: This is Bloomberg Business Week Daily with Carol Masser and
Speaker 1: Tim Stenovek on Bloomberg Radio.
Speaker 2: If you think of satellites in space, you often think
Speaker 2: about Elon Musk and SpaceX, and yet there are a
Speaker 2: few other players in the space, among them Ast space Mobile.
Speaker 2: Shares of the company man taking off this week, up
Speaker 2: about two hundred and ten percent year to date. It
Speaker 2: is a nearly twenty three No, it's more than twenty
Speaker 2: three billion dollar market cap. It's a wireless telecom company
Speaker 2: deploying satellites in space to be accessible for smartphones. And
Speaker 2: Barclay's raise the firm's price target to sixty dollars a
Speaker 2: year from thirty seven and keeps an overweight rating on
Speaker 2: the share stock at sixty five and change. Delighted to
Speaker 2: have with us, Scott Wasnwski. He is president of AST
Speaker 2: Space Mobile, as we said, joining us from Boston. So
Speaker 2: great to have you here with us. Scott, You've got
Speaker 2: to be busy. It sounds like you're super busy. If
Speaker 2: I do a search. There's like various press releases coming out.
Speaker 2: You're Bluebirds satellites eight to sixteen. They're in various stages
Speaker 2: of production. My understanding is you guys have plan launches
Speaker 2: every one to two three months on average this year
Speaker 2: and into next year. You're on track to complete forty
Speaker 2: five used to raise by early next year and expect
Speaker 2: forty five to sixty satellites in orbit by the end
Speaker 2: of twenty twenty six. Tell me if I've got it
Speaker 2: all right, and tell us about this build out and
Speaker 2: capabilities and who ultimately is signing up to use it.
Speaker 7: Well, thank you for having us. You know, our company
Speaker 7: is entirely focused on this opportunity of providing wireless access
Speaker 7: from space directly to the phone in your pocket. So
Speaker 7: to do this, we're vertical integrated. We build our own
Speaker 7: satellites as you were just discussing, and we're based in
Speaker 7: Texas here in the United States, and we're partnered with
Speaker 7: over fifty mobile network operators globally. That's how we go
Speaker 7: to market because that's those are the folks who have
Speaker 7: the customers today nearly three billion of them with the
Speaker 7: partners that we have. So we're focused on building this
Speaker 7: network out We have about an eight year history as
Speaker 7: a company. We have over thirty seven hundred patent and
Speaker 7: patent pending claims on developing this new technology. It sounds
Speaker 7: far fetched at first, talking to your regular small phone
Speaker 7: in your pocket from low earth orbit, but that's the
Speaker 7: capability that we have. And this is really important, I
Speaker 7: think for everyone because there's six billion phones out there
Speaker 7: in the world, and as we know, we depend on
Speaker 7: connectivities so much and it's very important that that phone works,
Speaker 7: whether it's convenience, peace of mind, or emergencies, and that's
Speaker 7: what we're focused on.
Speaker 3: Starlink has partnered with T Mobile. You have partnered with
Speaker 3: AT and T and Verizon. What can you tell customers
Speaker 3: about when they can actually expect continuous coverage nationally and
Speaker 3: perhaps even globally as a result of this partnership.
Speaker 7: Right, And so we actually have investment from about six
Speaker 7: different mobile network operators around the world, as well as
Speaker 7: American Tower, who's the largest tower company in the world.
Speaker 7: In Google and so in the United States. Yes, like
Speaker 7: you said, we're partnered with AT and T and Verizon,
Speaker 7: both investors, and it's very important for us to have
Speaker 7: that close relationship because the way, we've built a company,
Speaker 7: our services built purpose built for the mobile phone in
Speaker 7: your pocket, so that it just works. And the key
Speaker 7: there is to be deeply integrated with the operator and
Speaker 7: solve the operator's problem so they can deliver value to
Speaker 7: their customers. So we're organized today around getting service out
Speaker 7: next year, and we're currently have about five satellites in orbit.
Speaker 7: We just announced our plans to deliver number six and
Speaker 7: seven to the launch pad and as you said earlier,
Speaker 7: we're looking to put up forty five to sixty by
Speaker 7: the end of next year. And so this capability is
Speaker 7: very important in the United States but also around the world.
Speaker 2: Well, tell us like who you anticipate or who are
Speaker 2: right now your biggest customers. I'm curious about commercial, residential,
Speaker 2: and I'm also curious about government.
Speaker 7: Well, that's right. And the important thing about our company
Speaker 7: too is you know, space has historically been a bit
Speaker 7: of a niche. You know, if you live in a
Speaker 7: rural area or if you're on a plane and you
Speaker 7: want connectivity, there are nice little markets there. But this
Speaker 7: is about going to the mass market. The six billion
Speaker 7: mobile phones in the world, and so that goes for
Speaker 7: people who live, work, and travel go in and out
Speaker 7: of coverage who have greater ability to pay and want
Speaker 7: that convenience, as well as people who live perhaps in
Speaker 7: rural areas who don't have good connectivity or are one
Speaker 7: to pay a little bit more a month to have
Speaker 7: cellular broadband. Again, this is not a text service. This
Speaker 7: is a cellular broadband service that we'll be selling. So
Speaker 7: that's our US and really developed economy story. When you
Speaker 7: go around the world, there's many countries though, where there's
Speaker 7: over two billion people today who don't have good three
Speaker 7: G or better service on their phones. That means two
Speaker 7: G or nothing, and so market by market, our services
Speaker 7: valuable to the users and the operators who support those
Speaker 7: end users. And then you mentioned US government. That's been
Speaker 7: a relatively new ad to our story in the last
Speaker 7: two years, but given the defense and space backdrop in
Speaker 7: the United States, this is something that's been front and
Speaker 7: center for US for the last two years, and we're
Speaker 7: already providing services to the US government for a more bit.
Speaker 2: So, Scott, you probably know this little company called SpaceX
Speaker 2: that is out there and I'm just curious. They did
Speaker 2: a deal with Echo Star. They became the first company
Speaker 2: to a mask control of the satellite constellations in outer space,
Speaker 2: the launch infrastructures to deliver them there, and the potential
Speaker 2: for direct connections with mobile devices on the ground. So
Speaker 2: there's SpaceX. There are kind of the big behemoth there,
Speaker 2: the big player. There's you guys, there's Amazon dot Com
Speaker 2: is global stock in the race for ubiquitous covers. How
Speaker 2: do you plan to compete with starlink, which already has
Speaker 2: thousands of satellites in orbit.
Speaker 7: Right, and I think for the lame and it's important
Speaker 7: to distinguish between service to a dish that you might
Speaker 7: put on your house or on a car or on
Speaker 7: a plane, and then the phone in your pocket. Right,
Speaker 7: we all have Wi Fi at home, and then we
Speaker 7: have a cell phone for when we're on the go.
Speaker 7: So this is a market, the cellular market from space
Speaker 7: that's brand new. You've seen some players start to enter it,
Speaker 7: including Apple and Starlink, but we've been at this for
Speaker 7: about eight years. This solution is tailor made, purpose built
Speaker 7: for this solution. This is not an add on news
Speaker 7: service for us. This is all we do and that's
Speaker 7: why we've been able to garner such incredible support from
Speaker 7: network operators globally, like like at and T and Verizon
Speaker 7: in the US, Votaphone in Europe, racketin Mobile in Japan,
Speaker 7: Bell Canada who we just announced cellular broadband testing in
Speaker 7: from Canada today with who's also an investor in US.
Speaker 7: So these are capabilities that have been developed with the
Speaker 7: network operator in mind. We are focused on making their
Speaker 7: network better so that they can deliver the value to
Speaker 7: the customer.
Speaker 2: Are you not saying that you're competing with SpaceX and Starlink,
Speaker 2: that you're completely different businesses.
Speaker 7: Well, we plan to go after the cellular user through
Speaker 7: the mobile network operator. They also have a strategy, as
Speaker 7: you said, that they're pursuing. But this is a market
Speaker 7: that we think is big. It's gonna be worth tens
Speaker 7: of billions of dollars. There's six billion phones out of
Speaker 7: there that out in the world to go in and
Speaker 7: out of coverage, and all of us know that feeling
Speaker 7: when we don't have a signal, it's you're helpless, and
Speaker 7: so we think that and all of our over fifty
Speaker 7: network operator partners think that this is something that really
Speaker 7: enhances the value of the cellul other plan that almost
Speaker 7: all of us have, certainly in the United States, and
Speaker 7: so that is a strategy.
Speaker 8: That's good.
Speaker 7: That's going to be a nice robust market and we
Speaker 7: expect with our technology to be the leader in that
Speaker 7: because we're doing broadband from space.
Speaker 3: You mentioned your work with the US government over the
Speaker 3: last two years. Can you expand on that a little bit?
Speaker 3: What exactly are you doing for the US government?
Speaker 7: Yeah, so it's probably worth taking a step back. You know,
Speaker 7: we currently operate the five largest satellites and lower Earth
Speaker 7: orbit commercially. You know that lower orbit for the layman is.
Speaker 7: You know, that's what the space station is. It's much
Speaker 7: closer to the planet. It's that lag you experienced when
Speaker 7: you have a geosynchronous satellite. LEO solves all that. So
Speaker 7: we have the largest satellites deployed in lowerth orbit. The
Speaker 7: one we're shipping to the launch pad in two weeks
Speaker 7: is three times the size, over twenty four hundred square feet.
Speaker 7: So this is a unique technology that was developed to
Speaker 7: talk to the small phone and to do it well
Speaker 7: and to navigate cellular air crowded cellular airwaves. But it
Speaker 7: also has other applications. So with our US government business,
Speaker 7: we see up to ten different use cases, both communications
Speaker 7: and non communications that can support the US government mission
Speaker 7: for defense, and importantly, one of the ones we're testing
Speaker 7: in orbit today and we've been doing it for over
Speaker 7: a year, has really strategic and valuable implications, including potentially
Speaker 7: for the Golden Dome project.
Speaker 3: You also mentioned the notion that it's not just texting
Speaker 3: and being able to make calls. This is broadband delivered
Speaker 3: from a satellite to wherever you are in the world.
Speaker 3: That's the idea here. What is the experience using the
Speaker 3: phone in that environment and how could that be different
Speaker 3: or similar than using a five GLTE network. What are
Speaker 3: the speeds we're talking here?
Speaker 7: That's right, And so from the beginning, and this again,
Speaker 7: this is why we've been partnered with the network operators.
Speaker 7: They've been in the room with us, testing and developing
Speaker 7: this tech for five plus years. And what means is
Speaker 7: we're integrated on the back end. You remember, everyone's got
Speaker 7: a vision in their mind of calls in the old days,
Speaker 7: where someone would be connecting the call and doing this. Well,
Speaker 7: that technology still exists in the world, it's just done
Speaker 7: with serve and with software, and so we're deeply integrated
Speaker 7: on that side of the business so that the phone
Speaker 7: just works. And so this is a native cellular broadband experience.
Speaker 7: The user doesn't know that there's a difference unless we
Speaker 7: want them to. And they can do text calling, native calling,
Speaker 7: video streaming, and they can do all these applications and
Speaker 7: it feels just like you're using your phone on an
Speaker 7: LT in five G network. So how fast?
Speaker 3: Like what are we talking megabits per second here? Up
Speaker 3: and down?
Speaker 7: So we've tested over twenty megabits per second to the
Speaker 7: cell in the past couple of years with our satellites
Speaker 7: in orbit with the you know, there was mention of
Speaker 7: a spectrum deal a moment ago. We did our own
Speaker 7: spectrum transaction earlier this year, a very similar type of spectrum,
Speaker 7: which is about forty plus megahertz in the United States,
Speaker 7: and with forty megahertz we can deliver one hundred and
Speaker 7: twenty megabits to the cell on the ground. Now, how
Speaker 7: you manage all the network traffic and how do you
Speaker 7: go to market is a critical decision we make with
Speaker 7: our partners around the world, including in the United States.
Speaker 7: But there's only one way to get broadband capabilities from space,
Speaker 7: and that's with a big satellite, and we have the biggest.
Speaker 3: On the connection side of things. We're wondering too about
Speaker 3: the experience of being inside and outside. Anyone who's used
Speaker 3: like a garment head unit, for example, on a bike
Speaker 3: knows that you have to use it outside to get
Speaker 3: the cell signal. Can this coverage go inside buildings?
Speaker 7: That's right, we can do one wall in. So some
Speaker 7: of the success factors for that are the fact that
Speaker 7: again we have a big satellite and we also use
Speaker 7: low band spectrum. That's part of our partnership with AT
Speaker 7: and T and Verizon is combining some low band spectrum
Speaker 7: that they have from decades ago, and so the low
Speaker 7: band spectrum propagation characters are the best, and as you
Speaker 7: go into midband even then it's still pretty good. So
Speaker 7: we can do about one wall in, which means a building,
Speaker 7: means a car, means a plane.
Speaker 2: Ah okay, that's what we were because I think there
Speaker 2: were some folks like kind of messaging what is he
Speaker 2: talking about? Hey, you mentioned that you guys have picked
Speaker 2: up spectrum forty megahertz. Do you want to buy any
Speaker 2: more if some comes up for auction.
Speaker 7: Well, in the space world, there's two big bands of
Speaker 7: spectrum that matter. It's called L and S. We just
Speaker 7: purchased long term access to the L band in the
Speaker 7: United States and Canada earlier this year, and that gives
Speaker 7: us a big chunk of spectrum, the biggest available in
Speaker 7: the most valuable wireless mark in the world, which is
Speaker 7: the US. We also purchased an international filing that allows
Speaker 7: us to go around the world and pick up other
Speaker 7: pieces of spectrum for Space, So we're pretty happy with
Speaker 7: our spectrum position now for those two moves. This again
Speaker 7: is consistent with our historical strategy of sharing cellular spectrum
Speaker 7: with the operators, but it gives us more lanes of
Speaker 7: traffic and the ability to do better services to more subscribers.
Speaker 7: So we like our strategy in both of those two
Speaker 7: bands that matter.
Speaker 2: All Right, We've got to run, so appreciate this deep dive.
Speaker 2: I hope you'll come back keep us abreast of what
Speaker 2: you guys are working on.
Speaker 3: That was Scott was Newski, president of AST Space Mobile.
Speaker 2: Still ahead on Bloomberg BusinessWeek. Pharmaceutical stocks popping up this
Speaker 2: week on actions by the White House.
Speaker 9: Visors committing to for all of the infrascriptured medications to Medicaid.
Speaker 9: It will be at the most favored nations. Prices is
Speaker 9: going to have a new Jim back to on bringing
Speaker 9: Medicaid costs down.
Speaker 3: And talk of cheaper drugs for Americans. That's next. This
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Speaker 3: Wall Street had long feared that President Trump would follow
Speaker 3: through with threats to impose aggressive drug pricing policies, eroding
Speaker 3: the pharmaceutical industry's profitability and depressing share prices. Those feares,
Speaker 3: though largely laid to rest this week after Pfizer cut
Speaker 3: a deal with the White House, the company negotiating a
Speaker 3: three year reprieve on drug import tariffs in exchange for
Speaker 3: a promise to reduce what it charges Medicaid. Here's why.
Speaker 3: As your CEO Albert Borla at the White House alongside
Speaker 3: President Trump.
Speaker 11: The big winner of this deal clearly will be the
Speaker 11: American pace. There is no doubt about it. They are
Speaker 11: the ones that will see significant impact in their ability
Speaker 11: to buy medicines. But I would argue that it is
Speaker 11: not the only winner. I think who else is a
Speaker 11: winner here? It is American innovation and American economy.
Speaker 9: Another meeting next week on this. We have another great
Speaker 9: company coming in similar kind of numbers, but we're going
Speaker 9: to show you some one thousand percent drops in prices.
Speaker 9: There has never been anything like this in the history
Speaker 9: of medicine.
Speaker 3: That was President Trump you just heard, and Pfizer CEO
Speaker 3: Albert Borla. I just hope my high school math teacher
Speaker 3: is not listening about a thousand percent drop.
Speaker 5: Yeah.
Speaker 3: Now, because we're not going to get into for another
Speaker 3: day the math mathing there, Let's bring in Damien Garde.
Speaker 3: He's Bloomberg News health reporter. He's been very busy, He's
Speaker 3: taken some time to join us here in the Bloomberg
Speaker 3: Interactive Brokers studio. Are drug price is going to go
Speaker 3: down as a result of this.
Speaker 10: For the vast majority of Americans. No, I sincerely doubt it.
Speaker 10: There is no reason to conclude that based on what
Speaker 10: we learned at least yesterday from Albert Borla in the
Speaker 10: Oval Office and the promises that Pfiser has made. We
Speaker 10: can get into the nitty gritty, but I think the
Speaker 10: main thing the promise to Medicaid. An important caveat there
Speaker 10: is that patients on Medicaid Medicaid already pays the lowest
Speaker 10: available in the United States. It is legally obligated to
Speaker 10: get that. So the notion that Pfeiser making a commitment
Speaker 10: to lower that further would change the out of pocket
Speaker 10: costs for patients, I just don't think there's much there.
Speaker 10: And furthermore, in terms of Pfiser's business only about five
Speaker 10: percent of that business accounts for doing business with medicaid.
Speaker 10: That's where business probably too many times. And I think
Speaker 10: the main thing that should drive the reaction here is
Speaker 10: that in this announcement, Pfizer, which has a fiduciary duty
Speaker 10: to maximize its profits and to update shareholders on its guidance,
Speaker 10: did not update its guidance. The company said this thing
Speaker 10: that ostensibly means we're going to make less money, at
Speaker 10: least that's how the president characterized it, but didn't actually
Speaker 10: say we're going to make less money, which of course
Speaker 10: legally they're required to do. I feel like that through
Speaker 10: line is maybe the lens maybe not cynicism, but the
Speaker 10: lens of reality that people should look at these announcements.
Speaker 3: Look no further than the share price reaction.
Speaker 2: I said, yes, sir, I'm like, why is this stock rallying?
Speaker 2: They're going to make less money. I just made no sense.
Speaker 2: Everyone's like, well, it's all about the Tireff thing, and
Speaker 2: I'm like, true, and that is certainly a part of it.
Speaker 2: But I'm like, they're going to make less money. How
Speaker 2: can this be a good thing?
Speaker 1: Right?
Speaker 10: So, I think the relief that you're seeing in the
Speaker 10: share price reaction is twofold or maybe even threefold one.
Speaker 10: It alleviates the threat that the Trump administration was really
Speaker 10: going to come down hard with an aggressive policy that
Speaker 10: would be on the books, that would really constrain what
Speaker 10: drug companies could charge. Instead, we get this voluntary, relatively
Speaker 10: vague promise from Pfizer that is expected to set a
Speaker 10: template for the company's peers, Eli, Lilly, Murck, etc. They
Speaker 10: will probably all have their day at the Oval Office
Speaker 10: to do a similar kind of dog and pony show.
Speaker 10: And then furthermore, what's established is that if you make
Speaker 10: those promises, you get a reprieve from tariffs. Which is
Speaker 10: the other kind of overhang for the entire sector, is
Speaker 10: this fear that the import of medicines from Europe would
Speaker 10: face levies of the President has said one hundred two
Speaker 10: hundred percent, the notion that if you just go out
Speaker 10: there and say we're going to follow what the administration
Speaker 10: wants on drug pricing, we get that alleviation.
Speaker 2: Debbie, just quickly, just to be fair, I mean, has
Speaker 2: Pfizer come back and said this is going to impact
Speaker 2: us financial or it's not going to invit haven't gotten
Speaker 2: any clarification from the company on this.
Speaker 10: They have not there hasn't been a follow on filing
Speaker 10: with the SEC kind of making clear that they're restating
Speaker 10: any guidance. And furthermore, what they've said is that the
Speaker 10: terms of their agreement with the White House are confidential,
Speaker 10: so respectfully, we can only conclude what's been said publicly.
Speaker 3: Damien sit Ti, We're going to bring in Angie Frank.
Speaker 3: She's CEO of the private health company calder Rose. The
Speaker 3: firm does drug discount management. It uses AI as well
Speaker 3: as communicating with different parties involved in the negotiating process
Speaker 3: to get consumers the best prices. She joins us from Wisconsin. Angie,
Speaker 3: I'll ask you the same question that I asked Damien,
Speaker 3: because you're right in the middle of this drug pricing thing.
Speaker 3: Are drug price is going to come down as a
Speaker 3: result of what we saw at the White House yesterday.
Speaker 12: I think what Damian said there's some truth to that.
Speaker 13: I think at the end of the day, we won't
Speaker 13: all feel it immediately, but I do think.
Speaker 12: Drug prices are going to come down.
Speaker 13: I think the announcement yesterday is a big change to
Speaker 13: the system, and it is the first step in what
Speaker 13: I think will be multiple steps were certainly opening up
Speaker 13: more channels for patients to access their drugs at more
Speaker 13: affordable prices. And I think the underlying the Medicaid price
Speaker 13: that states currently pay is going to come down based
Speaker 13: on Pfizer's announcement yesterday.
Speaker 10: Well that's interesting. What would the mechanism for that be,
Speaker 10: because that's what I found myself wondering even yesterday in
Speaker 10: the announcement, which granted was lacking key details for obvious reasons.
Speaker 10: Is very new, but why would this kind of set
Speaker 10: in motion a snowball that would end with patients paying
Speaker 10: less at the pharmacy count?
Speaker 12: Yeah?
Speaker 13: Yeah, so I think, you know, if you look at
Speaker 13: the overall list prices starting to come down to an
Speaker 13: MFN like number, and that openings yes most favored nations exactly,
Speaker 13: and that opening up more channels for patients to access
Speaker 13: their drugs at lower rates. I do think the direct
Speaker 13: model that the the website that was also announced, which
Speaker 13: opens up a channel for patients to be purchasing directly
Speaker 13: at lower.
Speaker 12: Costs, could really have a.
Speaker 13: Ripple effect on the way benefits are offered and how
Speaker 13: employers and self insured employers start constructing benefit plans that
Speaker 13: give their employees access to drugs, which may bypass other
Speaker 13: players in the system, the traditional players in the system,
Speaker 13: middlemen that have been making money off of off of
Speaker 13: drug pricing and discounts and rebate models that really didn't
Speaker 13: benefit patients directly. So I think I think the new
Speaker 13: channels being opened up and the new price point at
Speaker 13: mac's most favored nation will over the longer term, have
Speaker 13: a pretty significant impact.
Speaker 2: Nothing confuses me as much as like picking up prescription
Speaker 2: and cupons and pharmacy benefits, and I don't know, it's
Speaker 2: just kind of crazy, Damien. The PBMs, the pharmacy benefit managers,
Speaker 2: they are being looked at closely like another layer that
Speaker 2: drives up costs, and so that is certainly part of
Speaker 2: the narrative here. So does that potentially remove that in
Speaker 2: what we heard from the president and the CEO of
Speaker 2: Pfizer yesterday, But then throw in this trump OURX, Like
Speaker 2: what role is that play.
Speaker 10: That we need to see play out? But I think
Speaker 10: through the eyes of Pfizer and certainly people in the
Speaker 10: pharmaceutical industry, there is an optimism and maybe a hope
Speaker 10: that the agreement announced, if in fact it's a template
Speaker 10: for other companies, will shift the White House's attention away
Speaker 10: from pharmaceutical manufacturers and toward the PBMs and the other
Speaker 10: middleman that you mention. And I think to Angie's point,
Speaker 10: there is a potential that trump our X, this sort
Speaker 10: of direct to patient offering that we've heard about. You know,
Speaker 10: there are arguments is suggest how popular that might be.
Speaker 10: How many people who don't have insurance would be willing
Speaker 10: to pay out of pocket hundreds or even thousands of
Speaker 10: dollars a year for a medicine.
Speaker 3: Is that what trump our X would offer is an
Speaker 3: insurance like this is not covered by insurance.
Speaker 10: It would be a cash pay business. And so we
Speaker 10: assume that the majority of customers for it would be
Speaker 10: uninsured or underinsured, because otherwise they could get the drum
Speaker 10: it's much cheaper through their insurance carrier. But the opportunity,
Speaker 10: I realize we're getting kind of in weeds here. The
Speaker 10: opportunity is that if one of those direct offerings we're
Speaker 10: selling instead to employers rather than patients themselves, then they
Speaker 10: would be truly bypassing the middlemend that exists. This is
Speaker 10: sort of the Mark Cuban model that he's as drugs exactly.
Speaker 10: So if Trump and you know, I'm using my imagination here.
Speaker 10: This is not something anybody's announced. If trump Orex, the
Speaker 10: website that has not yet launched but has been described,
Speaker 10: were to expand its aperture to include employers, then we
Speaker 10: could be talking about legitimate savings for all parties involved
Speaker 10: and a huge change to the way it's done.
Speaker 3: Now, Angie, come on back in here and talk a
Speaker 3: little bit about the innovation side of things, because Albert
Speaker 3: Borla at the White House said it's not just the
Speaker 3: American patient that who will be a big winner, but
Speaker 3: it would also be the American innovation and the American economy.
Speaker 3: Perhaps there are those out there who might say, okay, well,
Speaker 3: if companies, drug companies aren't able to make as much
Speaker 3: money from the drugs that they sell, R and D
Speaker 3: in this space might suffer. We know it's expensive run
Speaker 3: the clinical trials and to do the the R and D.
Speaker 3: What do you think it means for American innovation when
Speaker 3: it comes to pharmaceuticals.
Speaker 13: Well, I think it was great. I agree with Albert
Speaker 13: on all points. I think it's great for America that
Speaker 13: we're moving manufacturing and that level of innovation, job.
Speaker 12: Creation, et cetera to the US.
Speaker 13: When you when you simplify the supply chain and the
Speaker 13: pricing mechanisms for for our current you know, drug pricing model.
Speaker 13: When you simplify that today there's that we lack so
Speaker 13: much transparency and how prices are established and who gets
Speaker 13: which price, And to your point earlier, Carol, where you
Speaker 13: mentioned you know, the coupons and the copays and all
Speaker 13: these things are so confusing. They're confusing by by design.
Speaker 13: People are making a lot of money off of that
Speaker 13: confusion and that opacity. When you simplify and drive more transparency,
Speaker 13: you have less waste in the system, and that waste
Speaker 13: will feed the top the funnel. That will be dollars
Speaker 13: that can go directly to the top of the innovation
Speaker 13: funnel and enable manufacturers to continue to work on and
Speaker 13: innovate more drugs and more medication therapies that help patients
Speaker 13: with you know, life saving and life changing conditions.
Speaker 12: So it takes two and a half.
Speaker 13: Billion dollars to bring a drug to market, So every
Speaker 13: dollar of waste compromises our ability to invest in.
Speaker 12: More and more therapy.
Speaker 13: So I think it's going to have a tremendous impact
Speaker 13: over the long run.
Speaker 2: And you just got about a minute left. I mean,
Speaker 2: just talk to us about what you do. It's a
Speaker 2: data engine, it's information you have. It looks like a
Speaker 2: couple of different constituencies that you work with. But just
Speaker 2: give us an idea and what that tells you about
Speaker 2: kind of the drug industry and drug pricing industry, what
Speaker 2: you have been seeing.
Speaker 13: Yeah, we really have a technology platform where re ingest
Speaker 13: you know, large volumes of data. We apply logic and
Speaker 13: rules around various pricing programs and discounts and rebates, and
Speaker 13: then we ensure price integrity that the right price is
Speaker 13: going to the right set of patients and the right.
Speaker 12: For that particular therapy.
Speaker 13: So we're really driving quite a bit of price integrity
Speaker 13: in the system. The constituents that we work with include
Speaker 13: both pharmaceutical manufacturers and providers, and we really believe fundamentally
Speaker 13: that ensuring that the providers and the manufacturers can work
Speaker 13: more closely directly together benefits Americans, benefits patients, benefits innovation.
Speaker 3: Our thanks to Damian Garday, Bloomberg News health reporter and
Speaker 3: Angie Frank's, CEO of the private health company Caldero's, which
Speaker 3: focuses on drug discount management.
Speaker 2: And that wraps up our first hour of the weekend
Speaker 2: edition of Bloomberg Business Week from Bloomberg Radio, coming up
Speaker 2: in the next sixty minutes. This past week was full
Speaker 2: of stories and news in the consumer tech gadget space.
Speaker 2: It all coming at us from Amazon's device overhaul to
Speaker 2: take on Apple and also something on Peloton's price hike, so.
Speaker 3: Putting a ceramic ring on it courtesy of Aura and
Speaker 3: the thing Mark German really wanted to talk about. Plus
Speaker 3: meet the parents, foreign buyers and all cash consumers buying
Speaker 3: up luxury apartments in New York City.
Speaker 2: And how did sheat onlooking your best? You will be
Speaker 2: shocked literally what you need to know about the Catalyst suit.
Speaker 2: This is Bloomberg Business Week.
Speaker 3: I'm Carol Masser and I'm Tim stenevec Stay with us.
Speaker 3: Today's top stories and global business headlines are coming up
Speaker 3: right now.
Speaker 1: This is Bloomberg Business Week Daily, reporting from the magazine
Speaker 1: that helps global leaders stay ahead with insight on the people,
Speaker 1: companies and trends shaping today's complex economy. Plus global business,
Speaker 1: finance and tech news as it happens. Bloomberg Business Week
Speaker 1: Daily with Carol Masser and Tim Stenevek on Bloomberg Radio.
Speaker 2: Plenty ahead in our second hour of the weekend edition
Speaker 2: of Bloomberg Business Week, including Thanks Mom and Dad for
Speaker 2: the apartment, just one of the trends going on in
Speaker 2: the New York City real estate market.
Speaker 3: And you may look like a superhero wearing it, and
Speaker 3: it just might supercharge your muscles while doing so. Our
Speaker 3: own Chris Rouser takes the Catalyst suit for a spin.
Speaker 2: First up Fall. Maybe the time when the air gets
Speaker 2: cool and Starbucks tries to get you to buy the
Speaker 2: Pumpkins spice latte, But it also means it's the time
Speaker 2: the consumer tech companies show off their latest wares ahead
Speaker 2: of the holiday shopping season, and this year there was
Speaker 2: no exception.
Speaker 3: With what you need to know on it all, we
Speaker 3: were joined by Bloomberg News Managing editor for Global Consumer
Speaker 3: Tech Mark German on the good, the bad, and what
Speaker 3: Mark says will be the device of the holiday season.
Speaker 14: These are the Meta RAE band displays. These are metas
Speaker 14: first display glasses. I haven't set them up yet, they
Speaker 14: just came into the office. These are the first mainstream
Speaker 14: smart glasses with a screen and the lens. We've talked
Speaker 14: about them significantly and then it has what's called the
Speaker 14: neural wristband. You put this around your wrist and that
Speaker 14: allows you to track your finger movements in your motion
Speaker 14: in order to navigate the user interface of the glasses.
Speaker 14: So I'm actually really excited to diving in really using
Speaker 14: them and eventually publishing my review. Three eight hundred dollars
Speaker 14: they went on sale. It's some ray band and lens
Speaker 14: crafter stores, best buy stores. So excited to dive into these.
Speaker 3: What's the learning curve using this mark? How do you
Speaker 3: have to be trained to use it? Do you have
Speaker 3: to do a demo to use it? Can you just
Speaker 3: use it out of the box? Is this Is it
Speaker 3: going to be easy for consumers?
Speaker 14: Yeah, they think that you need this crazy demo, and
Speaker 14: so they're not letting anyone buy it who doesn't get
Speaker 14: the demo. I got the demo at Meta's headquarters a
Speaker 14: few weeks ago, so they were pretty comfortable with me
Speaker 14: just getting out of the box. There's probably going to
Speaker 14: be some sort of They tell me a video that
Speaker 14: plays on the glasses that you know when you first
Speaker 14: do the first boot, tells you how to use the thing.
Speaker 14: There's a little bit of a learning curve. Fifteen twenty
Speaker 14: minutes or so on the learning curve as well, And
Speaker 14: so it's going to take a little bit of time
Speaker 14: to get used to it if you're new to it,
Speaker 14: to get it up and running. But I think people
Speaker 14: will eventually like this technology. My hope is eventually it
Speaker 14: moves to a hand an eye tracking like setup so
Speaker 14: you don't need the neural wristband, something similar to how
Speaker 14: the vision pro is operated. But definitely, I think this
Speaker 14: is a category that's going to take off unbelievable.
Speaker 2: I know when you talked about this last time, I
Speaker 2: mean kind of I think both of us were blown
Speaker 2: away and looking at your video that was on the
Speaker 2: Bloomberg about how to use it learning curves. You know,
Speaker 2: there's these videos to kind of have, you know, we
Speaker 2: figure out how to use things. But when I think
Speaker 2: about learning curves, Peloton, I feel like is still on
Speaker 2: a learning curve. And the stock has swung. They're upping prices.
Speaker 2: Explain this to us and is this the way forward
Speaker 2: for this company?
Speaker 14: So it's a mixed bag, right. The stock is down
Speaker 14: probably because of the changes in pricing. They hiped prices
Speaker 14: between a couple hundred bucks and seven hundred bucks in
Speaker 14: the I end depending on which bikes or treadmills you're
Speaker 14: looking to purchase. They hiked subscriptions between a couple bucks
Speaker 14: and five bucks, depending on which subscription you're getting. So
Speaker 14: Wall Street doesn't like that because that's going to lead
Speaker 14: to regression, even more regression in terms of user numbers.
Speaker 14: It's going to lead to people leaving their subscriptions, it's
Speaker 14: going to lead to people maybe not wanting to buy
Speaker 14: the devices themselves because of the higher price points. And so,
Speaker 14: you know, Wall Street usually likes a price hike, but
Speaker 14: in terms of Peloton, they really seem to despise it.
Speaker 14: On the other side of the coin, I think the
Speaker 14: hardware that they rolled out today is extraordinarily impressive. This
Speaker 14: new CEO has been in the building for a little
Speaker 14: bit less than ten months actually, I think maybe ten
Speaker 14: months to the day today, and they've got five or
Speaker 14: six new hardware devices. Under the prior CEO who was
Speaker 14: there two and a half years or so, they did
Speaker 14: basically nothing in terms of new product launches or innovation.
Speaker 14: So I think they deserve a lot of credit for
Speaker 14: working overtime and really fast to get this new equipment out,
Speaker 14: and so we'll see what really happens with these user
Speaker 14: numbers based on these price increases, but clearly Wall Street
Speaker 14: is terrified.
Speaker 3: Okay, let's move on to another wearable in the Aura Ring,
Speaker 3: a five hundred dollars version of its smart ring, this
Speaker 3: one ceramic. We should remind everyone a lot of this
Speaker 3: stuff coming out right now because this is the holiday season.
Speaker 3: This is when people do holiday shopping. We traditionally get
Speaker 3: a lot of new devices and gadgets out during this time.
Speaker 3: Mark this new URR ring. I was surprised that Aura
Speaker 3: has such a high valuation now raised money. Bloomberg News
Speaker 3: reported on this in recent weeks. What can you tell
Speaker 3: us about this ring and what it does for the
Speaker 3: business or could do for the business.
Speaker 14: I think it's going to do nothing for the business.
Speaker 14: This is absolutely the same ring they launched. I think
Speaker 14: it was last October. It's the Worr Ring four. It's
Speaker 14: just coming out in a new finish that's one hundred
Speaker 14: dollars more expensive, So it's the ceramic finish. I have
Speaker 14: the ceramic blue one arriving at the office tomorrow, so
Speaker 14: looking forward to taking that for a spin as well
Speaker 14: to see if there is anything more meaningful about it.
Speaker 14: But this is just probably a marketing lever and maybe
Speaker 14: raise ASP slightly.
Speaker 3: Okay, five hundred dollars for.
Speaker 14: A smart ring, interesting price point, Let's see what happens.
Speaker 14: But ours are really fantastic business. But the problem is
Speaker 14: is that there are ten billion dollars in terms of
Speaker 14: the evaluation right now. So they're too expensive to get
Speaker 14: acquired right and they're they're not worth enough to be
Speaker 14: like some major hardware company. But they're they're getting there.
Speaker 14: They need more types of devices, they need to expand
Speaker 14: beyond rings into other types of hardware.
Speaker 4: Yeah.
Speaker 2: I was going to say when it comes to things
Speaker 2: like this technology devices consumer tech mark, I mean, are
Speaker 2: we that easy?
Speaker 11: You know?
Speaker 2: You just put a different finish on and we're like, yeah,
Speaker 2: I'm going to spend the money. We're not that easy,
Speaker 2: are we?
Speaker 14: Uh depends sometimes maybe, I don't know, We'll see. I
Speaker 14: don't think people are going to buy the ceramic version.
Speaker 14: I think it's going to be super niche. I think
Speaker 14: people are more into a couple of hundred dollar version.
Speaker 14: The reason these are doing so well is because of
Speaker 14: like FSA, HSAY whatever accounts. People are using that to
Speaker 14: buy these devices, and then a lot of people maybe
Speaker 14: not a lot of people, but some people have the
Speaker 14: AMX Platinum and the AMX plat. They just did their
Speaker 14: big price increase and part of that there's like a
Speaker 14: two hundred dollars annual or a ring credit on there
Speaker 14: now unfortunately, and they should change this. That doesn't work
Speaker 14: with the subscription. You have to pay like six or
Speaker 14: seven bucks a month to use an Aura or seventy
Speaker 14: dollars a year, but the two hundred a year you
Speaker 14: get from AMX it's kind of a scam because you
Speaker 14: need to buy the new hardware and Aura doesn't come
Speaker 14: out with new hardware every year. That's neither here nor there,
Speaker 14: but that might be driving some purchases too.
Speaker 3: Is this is this is Aura? I mean, and you
Speaker 3: wrote the story, you know, just a couple of weeks
Speaker 3: ago about the multi billion dollar valuation. Is this a
Speaker 3: hardware company or is it a software company software as
Speaker 3: a service.
Speaker 14: Well, it's both. They would be kind of they would
Speaker 14: be fine if they didn't have this subscription, But it's
Speaker 14: really the subscription and the annual subscription in particular, that
Speaker 14: I think it is driving things. You know, they always
Speaker 14: say hardware is hard Hardware is very bad margin wise,
Speaker 14: it's not a good business. But when you're able to
Speaker 14: put a software product on top of it that has
Speaker 14: a ninety percent margin, you're in pretty good shape. This
Speaker 14: is why Apple shifted to services almost a decade ago now,
Speaker 14: because they knew that Harward sales were flatlining. They knew
Speaker 14: margins could potentially go down. They knew they would have
Speaker 14: to adjust prices, and the way to create recurring revenue
Speaker 14: is putting something on top that's necessary. And Aura and
Speaker 14: whoop and some other peloton, of course is the post
Speaker 14: child of this. Have figured out this hardware plus software
Speaker 14: business model.
Speaker 2: All right, Speaking of hardware, let's go to your story
Speaker 2: that's out about Amazon overhauling its devices to take on
Speaker 2: Apple and the AI era. What do we need to
Speaker 2: know and what kind of stood out for you?
Speaker 14: They look really cool. I think I think Panos, he's
Speaker 14: the SVP of hardware now at Amazon and Alexa and Services,
Speaker 14: has done a really nice job on redesigning the hardware
Speaker 14: at the Echoes and the Echo shows three new kindle scribes.
Speaker 14: These are kindles that you can read on, but you
Speaker 14: can also write on and drawn. It's sort of like
Speaker 14: a scratch pad. I think they looked terrific. And these
Speaker 14: are going to do pretty well. The new Color Scribe
Speaker 14: six hundred and thirty dollars is the most expensive Kindled
Speaker 14: device ever. I think, actually the most expensive device from
Speaker 14: Amazon since the failed virophone from a decade ago. I
Speaker 14: think it's going to do really well for me. I
Speaker 14: actually like this new mid tier Kindlescribe. It has a backlight.
Speaker 14: It looks like real, really nice bright white paper, but
Speaker 14: obviously digital. So I might get one of those to
Speaker 14: do some reading. I need to go back to reading,
Speaker 14: and maybe I'll get one of those for the holidays.
Speaker 2: Tell me all, I s I need some books.
Speaker 15: Mark.
Speaker 3: In the meantime, just very briefly, we didn't get a
Speaker 3: chance to talk about the Nest branded hardware again. I
Speaker 3: said it would be sort of round the world with
Speaker 3: Mark German. In terms of tech devices. What do we
Speaker 3: need to know about Alphabet's lineup?
Speaker 14: It's kind of whatever. The most interesting thing to me
Speaker 14: is they announced this hundred dollars speaker, but it doesn't
Speaker 14: come out until the spring, which I guess is anywhere
Speaker 14: between March and the end of May. Why they released
Speaker 14: it so early, announced it so early before the release only,
Speaker 14: I don't know.
Speaker 12: God knows.
Speaker 14: I guess they wanted to just tell a more cohesive
Speaker 14: story and try to get out in front of some
Speaker 14: of the Apple announcements coming up in the next several months.
Speaker 14: Moving to two K video quality, I think that's good.
Speaker 14: Ring at Amazon the other day or yesterday they announced
Speaker 14: four K video, So it's kind of interesting to the Amazon
Speaker 14: and Google are completely two different spectrums of video quality
Speaker 14: in the same week.
Speaker 2: Hey, really quickly twenty thirty seconds. What do you think
Speaker 2: is going to be the big hot consumer tech item
Speaker 2: this holiday shopping season?
Speaker 14: Ooh, smart glasses. I think the Reban meta glasses I
Speaker 14: think are going to do pretty well. And of course
Speaker 14: the iPhone seventeen pro has just been blockbuster for Apple.
Speaker 14: They can't make them fast enough, so this is really
Speaker 14: big stuff for Apple this year.
Speaker 3: Hey, we're speaking with Mark German, and he's Bloomberg News
Speaker 3: Managing editor for Global Consumer Tech. He joins us from
Speaker 3: a Los Angeles Mark more on the H one B story.
Speaker 3: You know, we saw so many tech CEOs just a
Speaker 3: couple of weeks ago at the White House at that dinner.
Speaker 3: I was surprised to see a decision such as this
Speaker 3: from the President, given that it would affect the companies
Speaker 3: that these individuals run so negatively. Why don't you think
Speaker 3: we've heard a collective message from the tech community on
Speaker 3: the H one B visa issue yet?
Speaker 12: Oh?
Speaker 14: I mean, Tim, you know the answer to that. It's
Speaker 14: because they're scared of Donald Trump and they don't want
Speaker 14: to push back on this H one visa issue only
Speaker 14: for Trump to hit back at them with tariffs or
Speaker 14: starting to charge Apple more tariffs than they're already paying today.
Speaker 8: Right.
Speaker 14: I think they are worried if they fight on this issue,
Speaker 14: they'll come back and be hit harder on other issues,
Speaker 14: maybe issues that they consider more fundamental to their lobbying efforts.
Speaker 14: You're not going to see Apple push back publicly against
Speaker 14: this H one B issue. They would have done so already. Instead,
Speaker 14: they're going to work with lobbyists and other groups behind
Speaker 14: the scenes to have them do their bidding for them.
Speaker 14: But you're not going to see them push back publicly.
Speaker 14: That's not going to happen.
Speaker 3: That was Mark German, managing editor for Global Consumer Tech.
Speaker 3: After we spoke to Mark on it Wednesday, he reported
Speaker 3: that Apple has hit pause on a planned overhaul to
Speaker 3: its Vision pro headset to redirect resources toward a more
Speaker 3: urgent effort developing smart glasses that can rival products from
Speaker 3: Meta platform.
Speaker 2: The smart glass war it is on.
Speaker 3: He loves these things from Meta.
Speaker 2: It's like, right, we talked about all these things when
Speaker 2: we had him join us, and wait, wait you guys,
Speaker 2: I don't.
Speaker 3: Want to talk about it about everything. I want to
Speaker 3: talk about this olast on these classes. I mean, he
Speaker 3: told us this a couple of weeks ago when he was,
Speaker 3: you know, at their headquarters trying these for the first time.
Speaker 3: He said, these are these are game changing.
Speaker 2: He's a tough audience, and so when he's really into something,
Speaker 2: you know, you really take notice. All right, everybody, you're
Speaker 2: listening to Bloomberg Business Week coming up. Thanks mom and
Speaker 2: dad for the apartment and hey, thanks everybody for paying
Speaker 2: all cash for apartments.
Speaker 3: It's just one of the trends, or maybe a couple
Speaker 3: of the trends happening in the NYC real estate market.
Speaker 3: This is Bloomberg.
Speaker 1: This is Bloomberg Business Week Daily with Carol Masser and
Speaker 1: Tim Steneveek on Bloomberg Radio.
Speaker 2: Mortgage It's in the US rose at the end of
Speaker 2: September for the first time since July, shifting direction after
Speaker 2: steady string of declines. Now, even with that uptick, borrowing
Speaker 2: costs as still around their lowest levels in almost a year,
Speaker 2: creating opportunities for both house hunters and owners seeking to refinance.
Speaker 3: In Manhattan, home sales jumped to the highest level in
Speaker 3: more than two years, as affluent buyers, armed with cash
Speaker 3: thanks to a boost from the stock boom and last
Speaker 3: year's rich Wall Street bonuses, forged ahead on deals. For
Speaker 3: an update on the New York City real estate picture,
Speaker 3: we recently checked in with Louise Phillips Forbes. She's a
Speaker 3: real estate broker with Brown Harris Stevens. She's been in
Speaker 3: the industry for more than three decades and its close
Speaker 3: to six billion dollars in sales.
Speaker 16: Look, my old motto is, you know, marry your home
Speaker 16: in date threeate and have that motto.
Speaker 2: I mean, wait, marry the home and date the rate.
Speaker 16: Yes, I mean I had my first mortgage, Guys, my
Speaker 16: first mortgage was like eight point three five or something,
Speaker 16: and I had it as low as two point eight five.
Speaker 16: And you know, so and so I just think that
Speaker 16: I think it's about getting educated in the buying power ships.
Speaker 16: And I always say, certainly in the last eighteen months.
Speaker 16: I'm like, listen, guys, it's okay to buy when interest
Speaker 16: rates are high if you can afford the carry for
Speaker 16: a period of time, you were paying less for the
Speaker 16: home than if it was lower.
Speaker 3: But some people have been carrying that for like three
Speaker 3: years now and they thought, Okay, well I can do
Speaker 3: this with like a seven year arm and it'll retel drops.
Speaker 16: They haven't, but they are, and those individuals got much
Speaker 16: more home if they are inconvenience. Listen. I had a
Speaker 16: roommate when I bought my apartment first because to me,
Speaker 16: it was about owning my home instead of renting. So
Speaker 16: we make compromises, and you don't go on that extra
Speaker 16: trip for you if you want to be in that
Speaker 16: school district for your kids. So those decisions were made
Speaker 16: and have been being made. But the market, you know,
Speaker 16: is definitely this fall is feeling, there's an energy in
Speaker 16: it despite it being an election. Oh you about New
Speaker 16: York City, New York City our market specifically?
Speaker 2: Yeah, sorry, Now I am curious though when it comes
Speaker 2: to activity, are there multiple bids? Still Give us an idea,
Speaker 2: give us some color around.
Speaker 16: Sectors happening in some cases yes, square sector well, I
Speaker 16: think that the one bedroom market. I mean, listen, I
Speaker 16: did a development project that I converted and I've got
Speaker 16: a couple of left at three ninety three Western Avenue,
Speaker 16: a seven hundred and ninety two square foot one bedroom
Speaker 16: just rented for seven thousand dollars. Oh, so if you
Speaker 16: can own, try to own. So the one bedroom market
Speaker 16: has seen especially if you have low carrying costs. They
Speaker 16: are seeing multiple bids. Anything under two million is also
Speaker 16: very efficient if it's priced right. If you're not priced right,
Speaker 16: it's not happening. And the market is very knowledgeable and observant,
Speaker 16: meaning buyers.
Speaker 3: What about the higher end, what are you seeing with
Speaker 3: foreign buyers? We love to talk to you about where
Speaker 3: those buyers are coming from us.
Speaker 16: It depends on what country, but they are they've doubled
Speaker 16: in the last year.
Speaker 15: We have at what level?
Speaker 16: I think that the lower end, we don't have the
Speaker 16: olive arts necessarily, but but you have people who are
Speaker 16: looking for the future and want to pull money out
Speaker 16: of their government or their country.
Speaker 3: Where are they coming from?
Speaker 16: Mexico, Ukraine. We've seen for myself a lot from Korea
Speaker 16: and a lot from China.
Speaker 2: So okay, So we love to talk obviously real estate,
Speaker 2: but also politics and how it is. So give us
Speaker 2: an idea because that's interesting. In terms of foreign buying,
Speaker 2: have you noticed an uptick in terms of the political wins?
Speaker 12: How well?
Speaker 16: I think. I have somebody trying to purchase a piece
Speaker 16: of property from me who basically says, I'm concerned about
Speaker 16: out the mayor, and they're trying to buy from from Jakarta,
Speaker 16: and I'm like, how much you know? Like were you
Speaker 16: here when de Blasio was here?
Speaker 12: Were you here.
Speaker 16: When you know We've lived through difficult mayors or mayors
Speaker 16: that were not pro real estate. But I think that
Speaker 16: it becomes a conversation for people as a negotiating tool
Speaker 16: more so than it's preventing them from making a decision.
Speaker 2: So I find that it's negotiating. So if they want
Speaker 2: to buy something, somebody has some pressure to say reduce
Speaker 2: the price, because yes.
Speaker 16: And if I've been on the market for sixty days,
Speaker 16: which I have on this piece of property and it's
Speaker 16: still sitting and they're like, listen, I'm happy to pay this,
Speaker 16: I'm not going to pay that, and I'm not concerned.
Speaker 16: I'm happy to wait till after the mayoral election, and
Speaker 16: the truth of the matter is that people if you
Speaker 16: look at the rhythm of deals historically these elections, there
Speaker 16: is a surge afterwards, but it doesn't change the result
Speaker 16: no matter what the result is.
Speaker 3: What happened during the Deplasio administration to real estate, you
Speaker 3: made reference.
Speaker 16: To it, I just think that I just think that
Speaker 16: they were decisions that were not collaborative. And if you
Speaker 16: think about in twenty nineteen, I mean the the rental
Speaker 16: law of twenty nineteen that prevents conversions from occurring, that
Speaker 16: was all actually Cuomo and Cuomo is not that far
Speaker 16: from the policies that Mandami is holding. And I would
Speaker 16: say that in my interpretation, in my understanding, that a
Speaker 16: lot of politicians in these times make a lot of
Speaker 16: promises that are not actually able to be accomplished in
Speaker 16: the manner that they're trying to. The collaboration of the
Speaker 16: state is necessary, exactly.
Speaker 3: I'm glad you brought that up, because that's one time.
Speaker 3: Time is like you need to have all money on
Speaker 3: board to make a lot of these things happen. So
Speaker 3: it might sound look, I'm not talking about any specific
Speaker 3: candidate in particutionar, but you know there are promises that
Speaker 3: are made on a campaign trail. If you don't have
Speaker 3: buy in from Albany, you're not necessarily going to be
Speaker 3: able to enact those policies for sure.
Speaker 16: And I think that that is that is by design
Speaker 16: so that there can be simpatico between the two or
Speaker 16: negotiations of those two offices. But I just think that
Speaker 16: how to accomplish better housing, you can look at the
Speaker 16: things like for the eighty five, the new tax that
Speaker 16: has just come in, it's our new four to twenty one,
Speaker 16: which is affordable housing. I think that the restrictions that
Speaker 16: have been put forth into that new tax abatement, it
Speaker 16: may not lead to as much housing as we're hoping
Speaker 16: because of some things like there, if you do a
Speaker 16: union more than one hundred unit building, your minimum income
Speaker 16: I mean yournum minimum wage goes up costing twenty percent
Speaker 16: additional hard cost. So it's just a delicate balance. And
Speaker 16: I just remember the days when you want a developer
Speaker 16: Boughder certificate and somebody sold it to somebody else and
Speaker 16: they do what they do, which is build amazing affordable housing,
Speaker 16: and it's just gotten a lot more complicated.
Speaker 2: Yeah, it's a I mean, I just feel like when
Speaker 2: it comes to a lot of major cities right, affordable housing.
Speaker 2: It's just it's something we've been talking about for I feel.
Speaker 16: Like forever, and you can't do it. One politician can't
Speaker 16: do it. It has to be the state, it has
Speaker 16: to be the city, and it has to be the
Speaker 16: city assembly.
Speaker 2: In a longer term, you know, commitment to doing it.
Speaker 2: We are talking with Louise Phillips Forbes. She's real estate
Speaker 2: broker Brown Harris Stevens here in our Bloomberg Interactive Broker studio.
Speaker 2: A couple of rapid fires. So homestaying on the market longer,
Speaker 2: yes or no? Like in the I know compared to
Speaker 2: I guess.
Speaker 16: It's shortened in the first two quarters, elongated a little
Speaker 16: bit in the summer, and it seems to be a
Speaker 16: little more efficient in the upcoming weeks that we've seen
Speaker 16: in September, although it's hard to figure that out based
Speaker 16: on the Jewish holidays as well as getting back to school.
Speaker 2: So first time home buyers are we seeing more.
Speaker 16: Of them older than they've been in a long time,
Speaker 16: averages forty years?
Speaker 2: All right? What about parents buying places for.
Speaker 16: Kids all day long? So all day long, and it's
Speaker 16: not for it's with and even grandparents, because honestly, the
Speaker 16: conversations and the council that I've had with some family
Speaker 16: members is you can give it to them after you're.
Speaker 2: Gone, or they can enjoy it today.
Speaker 16: And I just had that happen today and accepted offer
Speaker 16: where we're facilitating that, and I mean I have a
Speaker 16: I mean I talked to my kids about that also.
Speaker 16: I mean, they really want to work hard for what
Speaker 16: they have, but I would rather be with them enjoying
Speaker 16: it and they and I'm there debt. I am their
Speaker 16: institutional debt.
Speaker 12: All right.
Speaker 2: Another one I just want to ask you real quickly,
Speaker 2: cash buying, all cash still strong.
Speaker 16: Cash is king?
Speaker 2: Is that the foreign folks or not necessarily most of
Speaker 2: them are foreign, But that's okay.
Speaker 16: They they that is typical because of how they pull
Speaker 16: that money out. It's also too complicated to try to
Speaker 16: get credit for them if they're not a residence that
Speaker 16: makes sense. So so cash is still king for them.
Speaker 16: But again it is really we're we're doing we're doing
Speaker 16: deals that are through a trust and they're the they're
Speaker 16: the institution, they're the bank, so they're coming across as cash.
Speaker 2: That's my rapid fire list.
Speaker 3: Okay, I just want to make sure that all that
Speaker 3: one that's like that has that might have a little
Speaker 3: longer of an answer. Consolidation in the industry. So the
Speaker 3: big news this week Compass is buying Anywhere for one
Speaker 3: and a half billion dollars anywhere. People might not be
Speaker 3: familiar with the parent company, but they own Coldboralt Banker,
Speaker 3: Corkoran and Southeby's International Realty. How does that change your world?
Speaker 3: At Brown Harris Stevens.
Speaker 16: And we've all been observing the Zillow Compass battle around
Speaker 16: the private listing and you know, let's sake, claic rumor
Speaker 16: was it and I don't know if it's factual or not,
Speaker 16: but Berkshire Hathway was what the original hope of the
Speaker 16: first choice for Compass to acquire when that was not
Speaker 16: possible anywhere. You know, they have a lot of debt
Speaker 16: and that that senior debt. It's only a stock exchange.
Speaker 16: What it does for them in the New York market
Speaker 16: is they're capturing forty percent of that market.
Speaker 2: It'll be interesting.
Speaker 3: But as.
Speaker 16: You know, Compare they're smaller, but they're they're national, and
Speaker 16: I would say that you know, it gives them a
Speaker 16: stronghold on a market that they really want.
Speaker 3: So how much of New York City does will Compass.
Speaker 16: Have forty percent of the market share right after the acquisition,
Speaker 16: And I think that what I would say to that,
Speaker 16: And again, bigger is not always better. It's really hard
Speaker 16: to maintain culture. And there are one hundred and seventy
Speaker 16: nine thousand new agents, And how do you feel special?
Speaker 12: You know?
Speaker 16: And I mean Robert Repkin is an impressive young man
Speaker 16: and a a major operator and a visionary, so I
Speaker 16: respect and admire him. I'm not a fan of the
Speaker 16: private listing platform.
Speaker 3: That was Louise Phillips Forbes, real estate broker with Brown
Speaker 3: Harris Stevens. She specializes in New York City.
Speaker 2: All right, everybody's still ahead. On Bloomberg BusinessWeek, what Bloomberg's
Speaker 2: Chris Rouser calls the little cheat when it comes to
Speaker 2: feeling fit.
Speaker 17: I discovered the Catalyst suit, which is an EMS suit.
Speaker 17: It's a stemsuit, like you like physical therapists use after
Speaker 17: you get an injury. They kind of zap your muscles
Speaker 17: with electricity and it encourages your muscles to work harder.
Speaker 17: More of it tenses up, and then it heals.
Speaker 3: It heals stronger, winds Us along with the owner of Catalyst,
Speaker 3: maker of the Catalyst Suit. This is Bloomberg.
Speaker 1: This is Bloomberg Business Week Daily with Carol Masser and
Speaker 1: Tim Stenoveek on Bloomberg Radio.
Speaker 2: Well, it's the jolt that tickles your muscles, and suit
Speaker 2: it up in the Catalyst Jen for you might look
Speaker 2: a bit like one of the Avengers. It's pretty cool.
Speaker 2: It is all part of looking and feeling your best.
Speaker 2: As Bloomberg Pursuits editor Chris Rouser writes about the new
Speaker 2: issue of Bloomberg Business Week with Pursuits devoted to the
Speaker 2: pursuit of wellness. Here with Morris Chris Rouser along with
Speaker 2: Brendan Kennedy, the CEO of Monte Mayer, it's the owner
Speaker 2: of Catalyst, and they both are here in our studio. Welcome, Welcome.
Speaker 2: First of all, I got to start with you, Chris.
Speaker 2: How did this come on your radar? I mean, I
Speaker 2: know you are always kind of the king when it
Speaker 2: comes to things that you can try to feel better
Speaker 2: to look back.
Speaker 17: Yeah, I'm a fitness person, I'm a wellness person. I'll
Speaker 17: try anything once. If you ask me to do a
Speaker 17: form of exercise with you, I will do it. So
Speaker 17: I've done everything solid core, PHYZEQ fifty seven, zoomba, you
Speaker 17: name it, I've done it, hot yoga, hotter yoga.
Speaker 3: And something in a chair yo.
Speaker 17: Yes, yes, there was briefly a PILATEUS studio in Manhattan
Speaker 17: called Shaes twenty three because you did all the exercises
Speaker 17: in a chair and it was on twenty third Street.
Speaker 17: So at the beginning of the year, I just was
Speaker 17: thinking about how overwhelming wellness has gotten. There's endless podcasts,
Speaker 17: The Manisphere podcasts are just like telling you so many
Speaker 17: different things every week to do. There's businesses where you
Speaker 17: can spend like seven thousand dollars a month where you
Speaker 17: go and you get tested for all the stuff every month,
Speaker 17: get ai to tell you what to eat and what exercise.
Speaker 17: Just feels very overwhelming. And I thought, Okay, what's the
Speaker 17: response to that.
Speaker 15: What is my response to that.
Speaker 17: I want to cheat, I want to cheat code, I
Speaker 17: want an easy way out.
Speaker 15: I want to hack.
Speaker 17: And so we got the whole Pursuits team together to
Speaker 17: think to like go out and do research and figure
Speaker 17: out what like the hot wellness hacks right now that
Speaker 17: makes it easier for you because at the end of
Speaker 17: the day. What you really need to do is exercise,
Speaker 17: You need to sleep, you need to talk to people,
Speaker 17: and you need to eat. Well, that's basically all you
Speaker 17: need to do. So like, what are the things that
Speaker 17: can sort of hack your into doing those more easily?
Speaker 17: And so as I was doing my research, I discovered
Speaker 17: the Catalyst suit, which is an EMS suit. It's a
Speaker 17: stimsuit like you like physical therapists use after you get
Speaker 17: an injury. They kind of zap your muscles with electricity
Speaker 17: and it encourages your muscles to work harder. More of
Speaker 17: it tenses up, and then it heals stronger. And so
Speaker 17: that technology is now a suit that you can wear
Speaker 17: and you can do workouts and it like supercharges your workouts.
Speaker 3: Okay, I know the guy who owns the company is
Speaker 3: sitting right here, but I'm still going to put you
Speaker 3: on the spot, Crisp, because I see technology like this
Speaker 3: and I'm like, yeah, does it actually work?
Speaker 15: I have to tell you it actually works.
Speaker 17: You're not just saying muscles through my blazer, but it
Speaker 17: really totally works. I did it for six months after
Speaker 17: having a pair of injuries. I had foot surgery. You guys,
Speaker 17: remember I fractured my elbow I was like out of
Speaker 17: the gym for months. I felt kind of bummed about it,
Speaker 17: and it really got me back going. Yeah, you really
Speaker 17: see results that it helped my posture. I lost weight, gain muscle.
Speaker 2: All right, So Brendan, come on in. You are the
Speaker 2: owner of Catalyst. Talk to us about this device, kind
Speaker 2: of how it came to be and tell us little
Speaker 2: bit about the business.
Speaker 15: Yeah.
Speaker 18: So I joined EMS about four years ago, and I
Speaker 18: was a little skeptical at first too. My wife had
Speaker 18: used it about seven years ago.
Speaker 3: EMS is electric electric electrical muscle stimulation.
Speaker 18: Exactly, and just like a doctor or physical therapist will
Speaker 18: put STEM on you to heal a muscle. It's the
Speaker 18: same time technology and doctors have been using it for
Speaker 18: sixty years. If you go to Europe, there are ms
Speaker 18: studios where there's thousands of them where people will go
Speaker 18: in and work out. I went in skeptically and tried
Speaker 18: it about four years ago during COVID and it's amazing
Speaker 18: for me. It compresses time. I can get two hour
Speaker 18: workout workout that would normally take me two hours in
Speaker 18: a gym, I can do it in twenty minutes and
Speaker 18: it's a whole body workout. It hits the little muscles
Speaker 18: in your back that you might miss in a gym
Speaker 18: or skip leg day. Is your whole body, twenty six
Speaker 18: pads at once, and it stimulates your muscle. Just like
Speaker 18: your brain sends a signal to your muscle to contract,
Speaker 18: the suit sends the same muscles, the same signals, and
Speaker 18: it hits ninety percent of your muscles. And so it's
Speaker 18: amazing and it works. It's efficient, it's fast, it's safe,
Speaker 18: and it compresses time for me.
Speaker 17: So you were a client, I was a class who
Speaker 17: became an investor, and now you're the owner.
Speaker 18: Yes, it's something I'm really passionate about. I use it
Speaker 18: three days a week, so twenty minutes each time, basically
Speaker 18: an hour a week. That little prep, a little clean up,
Speaker 18: but compared to changing and driving to a gym and
Speaker 18: working out for two hours, I can do it in
Speaker 18: twenty minutes. I can do it at home. I travel
Speaker 18: with it.
Speaker 15: It's spectacular, all right.
Speaker 2: So what does it cost?
Speaker 18: So the suit retails for three thousand dollars. There's an app,
Speaker 18: and there's trainers on the app, so you pick. I
Speaker 18: want to focus on strength, I want to focus on cardio.
Speaker 18: Maybe I'm going to focus on my oar legs or
Speaker 18: my ad. I'm fifty years old. I've worked out in
Speaker 18: gyms for forty years. This is the first I've done Ironman.
Speaker 18: I've done marathons, I've done every kind of fitness activity
Speaker 18: you can do. I'm very active. This is the first
Speaker 18: time I've had ABS at fifty three, right, It's never
Speaker 18: happened before. It's all because of suit. I can turn
Speaker 18: up the abs and hit those hit those muscles. Three
Speaker 18: thousand dollars. You follow a trainer on the app and
Speaker 18: that person leads you through a twenty minute workout.
Speaker 3: People might know you from your days in cannabis, medical
Speaker 3: cannabis specifically. You were one of the co founders of Tilray.
Speaker 3: You led the company. It's publicly traded now you're no
Speaker 3: longer involved in cannabis. What was the process that got
Speaker 3: you to buying Catalyst and talk a little bit about
Speaker 3: the challenges the companies had before you came on board
Speaker 3: and what you're trying to do now to get it
Speaker 3: away from those challenges.
Speaker 18: Absolutely so, I think cannabis. You know, I started in
Speaker 18: cannabis back in twenty eleven, so fourteen years ago, and
Speaker 18: back then people thought it was crazy, right, is what
Speaker 18: is he doing? He went to Yale, he has an MBA,
Speaker 18: Why is he going into cannabis? And he's throwing away
Speaker 18: his whole career. But I could see the future. I
Speaker 18: could see what was going to happen. I knew that
Speaker 18: country after country was going to legalize, the US States
Speaker 18: were going to legalize, and so I saw the opportunity.
Speaker 18: I saw what was going to happen. I see the
Speaker 18: same thing in EMS. If you go to Europe, there's
Speaker 18: these studios everywhere with people working out in suits. And
Speaker 18: I think five years from now, everyone in the US
Speaker 18: will be familiar with EMS. They'll either have a suit
Speaker 18: or they'll go to gym and work out in that
Speaker 18: suit because it's the future of fitness.
Speaker 2: Well, Christy, I mean, you do cover so much about
Speaker 2: wellness and fitness. We talk about it with you all
Speaker 2: the time. I mean, how do you slot this sin
Speaker 2: What are you hearing kind of from maybe the industry
Speaker 2: about maybe is this kind of a next way?
Speaker 17: Yeah, I mean this is definitely We've done stories about
Speaker 17: EMS suits before, as plastic surgeons in New York City
Speaker 17: offer it. There's some startups that offer sort of similar
Speaker 17: things where you go to a studio. For me, this
Speaker 17: really fit into my normal system of going to Berry's
Speaker 17: boot camp. You know, I'm a big barriers person and
Speaker 17: doing my normal weightlifts, and then I added this in. Yeah,
Speaker 17: two or three times a week twenty minutes, and that's
Speaker 17: where I really supercharged everything else that I did. And
Speaker 17: especially on a day when you know, like Brendan said,
Speaker 17: if you're too busy or you're traveling or whatever, you
Speaker 17: can just kind of toss it in. And although I
Speaker 17: have not taken it on a plane before, so I
Speaker 17: brought it with me. So this is what it looks like.
Speaker 15: Is it quite big? It's not really.
Speaker 3: So for those listening on radio christs holding up the
Speaker 3: vest portion. But there's also that that sort of there's
Speaker 3: another portion that.
Speaker 12: Goes all the way down.
Speaker 17: Yes, that's free around your legs, and there are armbands
Speaker 17: that go with it and you have to get it
Speaker 17: wet for the stem pads to like really.
Speaker 3: Work today with a heart rate monitor too, it's kind
Speaker 3: of the same thing exactly, Okay.
Speaker 18: Very similar.
Speaker 2: So what do you see as your market? Is it
Speaker 2: a case of selling directly to consumers? Is it about
Speaker 2: setting up places like the Peloton model to some extent
Speaker 2: where you could go and actually get on a peloton
Speaker 2: and be at a at a physical locale. I mean
Speaker 2: peloton kind of went back and forth. What's the model
Speaker 2: in terms of growing this business?
Speaker 18: So right now there are thousands of consumers that own
Speaker 18: the suit and they work out at their homes or
Speaker 18: at the office or in their hotel rooms while they're traveling,
Speaker 18: and they work out with the app.
Speaker 15: There are also.
Speaker 18: Maybe two to three hundred studios in the US that
Speaker 18: use a suit. Many of them use the Catalyst suit,
Speaker 18: and so you can go to an EMS studio if
Speaker 18: you're mostly in a big city and try it, and
Speaker 18: so they use a Catalyst suit. And so it's both
Speaker 18: supplying to studios and we're seeing more and more of
Speaker 18: those open, and then also to consumers.
Speaker 3: What's the moat that you have here, because if this
Speaker 3: is big in Europe, you're doing it here in the US.
Speaker 3: People might catch on, they might see that it's working.
Speaker 3: Copycats could come in. What separates here hyper protect the brand?
Speaker 18: I think there's two moats. I think the first moat
Speaker 18: is oddly any MS suit is regulated like a toaster
Speaker 18: in Europe, and so many facts can just make them
Speaker 18: and sell them here. It's regulated by the FDA, and
Speaker 18: so this suit is FDA cleared and so we went
Speaker 18: through the FDA process in order to sell it to consumers.
Speaker 18: That's that's one mote. I think the second moat is
Speaker 18: the content. There's there's hundreds of workouts online that you
Speaker 18: can engage in the app. Actually is what sends the
Speaker 18: impulse impulses to That's what's apps. You yes, and so
Speaker 18: the app does it family.
Speaker 2: To get them to do other things just saying no,
Speaker 2: forgive me go ahead.
Speaker 18: No, I think it's the content and the FDA clearance
Speaker 18: really the two moats.
Speaker 2: What about competition or just the wellness world at large,
Speaker 2: Like it feels like, you know, we go through these
Speaker 2: fads and waves and trends.
Speaker 3: Yeah, you don't want this to end up in the
Speaker 3: same pile as the thigh master.
Speaker 2: I think, hey, everybody should have a thigh master. No,
Speaker 2: I'm just kidding, But how do you make sure.
Speaker 18: I think strength is important no matter what you do, right,
Speaker 18: And so I use my suit three day this week,
Speaker 18: twenty minutes I run, So I have cardio. You can
Speaker 18: you work out on treadmill wearing the suit. People do that,
Speaker 18: but I think strength will always be there. Strength will
Speaker 18: always be important. It fixes your posture. Bone density for
Speaker 18: a lot of people is really important. People on GLP
Speaker 18: one drugs lose strength, and so this suit helps people
Speaker 18: of different demographics in ages very quickly.
Speaker 3: You can work out while you're wearing the suit, and
Speaker 3: also wear the suit independently while you're not working out,
Speaker 3: or you're always working out while you're wearing There are people.
Speaker 18: That do freestyle workouts, which means this suit is charging
Speaker 18: impulsing and they're folding laundry or doing the dishes or
Speaker 18: walking on a treadmill.
Speaker 2: I think you and I need these. You're still doing
Speaker 2: it real quickly.
Speaker 15: Yes, yeah, oh yeah, I'm in.
Speaker 2: I got to tell you. I go to a doctor
Speaker 2: and they say it's all about strength and getting your
Speaker 2: muscles and building muscle strengths. So it totally makes sense. Gentlemen,
Speaker 2: Thank you so much, really appreciate it. Brendan Kennedy, chief
Speaker 2: executive officer of Monty Marr, the owner of Catalysts, joining
Speaker 2: us here in studio along with our own Chris Rouser,
Speaker 2: He's editor of Bloomberg Pursuits. You can check out and
Speaker 2: read more about Chris's experience. It was a really fun read.
Speaker 2: It's in the new issue of Bloomberg BusinessWeek in the
Speaker 2: Pursuit section. I'm in I know you are.
Speaker 3: I don't know if this is a thing where like
Speaker 3: we uh share share. I don't think it works like
Speaker 3: that because it has.
Speaker 17: To be sized to you.
Speaker 15: But actually, like you and I, we could we could
Speaker 15: maybe do that.
Speaker 3: We could try it cool. It's pretty cool. Yeah, I'm
Speaker 3: like you, Chris, I'll try any workout class one.
Speaker 2: Can I get one from my face? Like to tighten
Speaker 2: up the muscles?
Speaker 15: I don't. I don't think you would want.
Speaker 17: It's sometimes it buzzes you to your bones, like it
Speaker 17: really like you you get used to it, but it
Speaker 17: really is a lot.
Speaker 3: It can be really Are you going to stick with it?
Speaker 15: Yes? Yeah, yeah, okay, I'm going to keep doing it,
Speaker 15: I think. Yeah.
Speaker 3: All right, Well, we'll keep you accountable, Okay, please do
Speaker 3: That's Bloomberg Pursuits editor Chris Rouser, along with Brandon Kennedy's
Speaker 3: CEO of Monte Mayer. It's the owner of Catalysts.
Speaker 2: And that wraps up the weekend edition of Bloomberg BusinessWeek
Speaker 2: from Bloomberg Radio. Thank you so much for joining us be.
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Speaker 3: dot com always on the Bloomberg terminal. I'm Tim Stenebeck
Speaker 3: and I'm Carol Masser.
Speaker 2: Tim and I are going to go put on our
Speaker 2: Catalyst suits.
Speaker 3: I would try one of these, Labor, definitely try one
Speaker 3: of these.
Speaker 2: Have a great and safe weekend. Everyone, stay with us.
Speaker 2: Today's top stories in global business headlines coming in right now.