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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. Let's get over to Spotify.

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Speaker 1: Here's a story. It's just I don't know if it's

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Speaker 1: just another tech story, another tech company laying off people,

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Speaker 1: but I mean the stock like the other tech names.

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Speaker 1: So naming these announcements. It's up two point three. Let's

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Speaker 1: bringing Githa Rogan Anthon. She covers all things media, digital media,

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Speaker 1: all that stuff for Bloomberg Intelligence. So keita talk to

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Speaker 1: us about Spotify. What's going on there with the company. Yes,

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Speaker 1: it looks very much Paul, like you know, this company

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Speaker 1: also fell into the same trap as other tech companies.

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Speaker 1: They kind of overestimated demand just based on pandomic trends,

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Speaker 1: and they, I guess they hire too many people. They

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Speaker 1: basically double their head count from you know, about four thousand,

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Speaker 1: five hundred people to all most close about ten thousand

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Speaker 1: just over a span of two years. And now what

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Speaker 1: are they faced with. Their faced with a subscriber slowdown,

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Speaker 1: They're faced with advertising headwinds. Uh So there's a pullback

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Speaker 1: across the business um and so they have to react.

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Speaker 1: And this is exactly what they're doing. Is about a

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Speaker 1: six percent got in their workforce that they announced this morning.

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Speaker 1: So but you know, it's Spotify. When I think about

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Speaker 1: the revenues drivers that you just highlighted advertising and subscriber

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Speaker 1: goth but didn't Apple Music just you know, raise their prices.

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Speaker 1: Doesn't give Spotify some rooms or maybe raise some prices.

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Speaker 1: You know, that's a great point. I mean, you know,

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Speaker 1: as we think about pricing power in the music streaming business, yes, exactly.

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Speaker 1: You know, Spotify has held its price constant for you know,

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Speaker 1: the longest period of times at about ten dollars. Apple

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Speaker 1: just just raised it about eleven dollars a month. So

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Speaker 1: the general expectation is, yes, they will be able to

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Speaker 1: raise prices or they potentially will do it sometime in

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Speaker 1: the first quarter. But again, where does that get you? Okay,

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Speaker 1: you have about two hundred million subscribers, so that gives

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Speaker 1: you an additional two million dollars of revenue annually. Again,

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Speaker 1: not enough to mop the needle. You know. There's an

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Speaker 1: opinion piece by Sarah Green Carmichael. I don't know if

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Speaker 1: you've seen it, but she says layoffs often leave companies

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Speaker 1: worse off, and she goes through the data, um, not

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Speaker 1: just in terms of profitability, but just in terms of morale.

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Speaker 1: Morale A lot of times it seems to break companies.

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Speaker 1: You know, even those who are left are scurrying to

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Speaker 1: look for other jobs. They hate management now, um, you know,

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Speaker 1: they're not on board with the mission. Are these companies,

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Speaker 1: not just Spotify, but across you know, the board, especially

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Speaker 1: after they had such a difficult time hiring people last year?

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Speaker 1: Are they shooting themselves in the foot themselves in the

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Speaker 1: foot trying to um, you know, sail so close to

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Speaker 1: the wind? I don't think so. I think and especially

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Speaker 1: if you read kind of uh, you know, Spotify the

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Speaker 1: CEO danielis letter, he said he might have been over

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Speaker 1: ambitioned is And I think this is one of the

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Speaker 1: things that we're seeing across in all of their investments

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Speaker 1: actually with Spotify. So if you just look at Spotify,

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Speaker 1: just very basically at their business model for every one

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Speaker 1: of dollars of revenue that they generate, they pay out

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Speaker 1: about seventy to seventy five cents to the record labels,

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Speaker 1: so they really have no control over their content costs,

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Speaker 1: which is what has kind of prompted this whole move

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Speaker 1: for them to kind of really push into podcasts. This

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Speaker 1: has been this really big source of investments for them.

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Speaker 1: They've invested over a billion dollars right into the podcast market.

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Speaker 1: They signed on the Obama as they signed on Prince Harry. Uh,

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Speaker 1: you know, Joe Rogan, was that the only differentiator otherwise,

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Speaker 1: get Apple Music and you're good to go. Yeah, exactly,

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Speaker 1: so that you know, you have to own content. This

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Speaker 1: is exactly what Netflix did, right. You have to have

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Speaker 1: your own shows because content is the differentiator. The only

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Speaker 1: thing is they've just spent too much for podcasts. They've

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Speaker 1: already spent about one to one and a half billion dollars.

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Speaker 1: It's only generated about two hundred millions so far in revenue.

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Speaker 1: So there's just you know, we've come to a point

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Speaker 1: when the industry really doesn't care about subscriber growth. And

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Speaker 1: Spotify they already have a share of the music streaming market.

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Speaker 1: There is a lot of runway for them to go

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Speaker 1: grow in terms of subscribers, but nobody cares about subscribers anymore.

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Speaker 1: They care about profits. And there's just no sustainable um

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Speaker 1: or there's just the model just doesn't show us that

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Speaker 1: this company can get to significant profitability anytime soon. So

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Speaker 1: is you own the stock just on the come here

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Speaker 1: that you just think it's it's a growth market. It

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Speaker 1: is a growth market. And you know, if you just

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Speaker 1: kind of look at music streaming, I think it's a

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Speaker 1: defensive business. We have traditionally we've just not seen um

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Speaker 1: as much churn in the music streaming business as compared

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Speaker 1: to let's say video streaming, because you know, typically you

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Speaker 1: you you subscribe to multiple video streaming services, whereas in

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Speaker 1: the audio business it's just it's either a Spotify or

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Speaker 1: an Apple or an Amazon. Um. So you know, there's

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Speaker 1: there's uh, there's much less chance for streaming, much less

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Speaker 1: chance for churn. Sorry, but um you know, these investments

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Speaker 1: had a really kind of depressed to stop, all right.

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Speaker 1: Keith a great stuff as always, Keith Roganathan. She's a

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Speaker 1: US media analyst for Bloomberg Intelligence. She covers it all.

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Speaker 1: She is the expert. We love getting a few minutes

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Speaker 1: of her time or three weeks in to a new year.

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Speaker 1: So far, so good. We got stocks up three and

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Speaker 1: a half percent, we got bonds up a couple to

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Speaker 1: three percent, a little bit better than last year. How

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Speaker 1: about the rest of the year, Hans Olsen, We're gonna

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Speaker 1: ask him that question. He's the c i O fiduciary

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Speaker 1: trust company that got a jillion dollars of assets under management.

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Speaker 1: He joins us here in our Bloomberg Inactor Broker studio.

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Speaker 1: We appreciate him taking to schoot you down from Connecticut, Hans,

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Speaker 1: when coming into this year, what were you telling your

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Speaker 1: clients after what was really a disastrous year for the

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Speaker 1: sixty forty portfolio out there? Yeah. Yeah, a lot of

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Speaker 1: the trends that we saw in force last year we

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Speaker 1: thought would bleed into this year, you know, sort of

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Speaker 1: the reset of the price of money, Uh, concerns about

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Speaker 1: you know, where interest rates top out and would we

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Speaker 1: see a recession or not. So what we're what we

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Speaker 1: thought right this The rally that we've seen over the

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Speaker 1: last three weeks or so sort of fits, uh that

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Speaker 1: of a of a counter trend rally, you know, bear

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Speaker 1: market rally amidst a trend that I'm not sure that

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Speaker 1: we've we've necessarily seen the bottom yet, could retest the bottom,

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Speaker 1: but um, certainly we're like to see some more downside

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Speaker 1: volatility here. So we're just about to get into the

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Speaker 1: thick of it in terms of earning season, right, we

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Speaker 1: get the big industrial companies reporting, UM as well as

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Speaker 1: you know Microsoft and Teslas of the weirdos as well. Um,

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Speaker 1: what do you expect in terms of the earnings? You know,

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Speaker 1: we thought there would be an earning slowdown or is

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Speaker 1: it going to materialize? We've had we lowered the bar enough.

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Speaker 1: I think we will see an earning slowdown. Right, So

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Speaker 1: if you look back even um, I don't know, eight

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Speaker 1: weeks or so for the fourth quarter, Uh, the expectations

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Speaker 1: that the earnings would be up something like three or

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Speaker 1: four percent. Now the expectations will come in close to

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Speaker 1: down somewhere four or five. So I think we're going

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Speaker 1: to exit a very awful year in a difficult way, right, Um.

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Speaker 1: And the question is does that set the stage for

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Speaker 1: more I think in the early part yes it does. Um.

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Speaker 1: You know, the expectations for this year are are I

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Speaker 1: think modest and growing more modest by the day. The

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Speaker 1: question really is what happens to margins? Right, So you know,

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Speaker 1: the expectation this year is that revenues will be up

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Speaker 1: what three percent but two or three percent, and earnings

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Speaker 1: will be up four five So that says that the

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Speaker 1: margins have to expand at this point in the cycle.

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Speaker 1: Against this inflation back black backdrop, you would expect to

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Speaker 1: see margins contract rather than expand. So that's got to

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Speaker 1: get resolved. We will talk about earnings, and we'll talk

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Speaker 1: about it a lot over the next few weeks. But

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Speaker 1: at the end of the day, it still feels like

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Speaker 1: the Fed is kind of the narrative here that people

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Speaker 1: need to pay attention to. I mean, Matt's in the

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Speaker 1: argument we need to see the FED remain firm here

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Speaker 1: fifty basis points. Here's just one man's opinion. That's just

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Speaker 1: one man's opinion. But the man has a beard, um,

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Speaker 1: So we tend to pay attention um, and a good

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Speaker 1: bed and a good beard, thank you. But what what

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Speaker 1: are the good folks that fiduciary trust? Those are people

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Speaker 1: I really pay attention to. What what are you guys

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Speaker 1: thinking about this federal reserve? And maybe what's a good

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Speaker 1: policy for them to pursue. Yeah, I think you have

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Speaker 1: to squeeze the life out of inflation, and that means

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Speaker 1: that you you keep rates high enough until there's no

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Speaker 1: question that it's gone. And there's still a question. I mean,

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Speaker 1: I think Larry Summers has been right on the mark

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Speaker 1: with this, right. He says it's going to be hard,

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Speaker 1: it's going to take some time. If you look at

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Speaker 1: the PC numbers, which will see later this week, UM,

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Speaker 1: my guess is that they're going to come in with

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Speaker 1: that four and a half five, which is still a

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Speaker 1: multiple multiple or so greater than where the Fed wants it.

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Speaker 1: So the job is not done yet. And you know,

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Speaker 1: they really the question will be what is the relationship

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Speaker 1: between the price of money and the price of stuff?

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Speaker 1: And that's the question that the Fed hasn't asked, and

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Speaker 1: I think it was said in the earlier segment. You

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Speaker 1: know you have to Um, no one wants to go

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Speaker 1: down as the FED chairman it fails. No one wants

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Speaker 1: to be the twentieth century g William Miller, Yes or right?

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Speaker 1: Who wants that, uh you know, sort of next to

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Speaker 1: their name. Um, yeah, totally agree, And I guess we'll see.

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Speaker 1: I've noticed financial conditions keep getting looser and looser. Um,

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Speaker 1: we three and a half percent unemployment. Uh, it seems

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Speaker 1: like they have a long way to go, although we

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Speaker 1: do see insurance inflation coming down. I want to ask

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Speaker 1: about hedge funds, and I guess only your wealthiest clients

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Speaker 1: get access to the Citadel's, the Bridgewaters, the d E Shaws.

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Speaker 1: But if you get access to the biggest hedge funds,

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Speaker 1: the biggest multi strategy hedge funds, you still knocked the

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Speaker 1: ball out of the park last year. It doesn't matter

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Speaker 1: what happens. Earnings doesn't matter for in a recession, doesn't matter,

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Speaker 1: stocks go down. What do you think about, um, the

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Speaker 1: shift that we're seeing from you know, long only hedge funds.

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Speaker 1: You know, you could be a single pick a single name,

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Speaker 1: a superstar and ride it with them to now multi strategy,

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Speaker 1: multi manager hedge funds that are doing well. Yeah, I'm

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Speaker 1: I'm a skeptic of hedge funds, and I think you're right.

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Speaker 1: You know, if you f you that top one percent um,

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Speaker 1: that's where to be, and you're going to pay for

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Speaker 1: it to right in the top twenty made two billion

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Speaker 1: dollars last year, but they lost two hundred and eight billion.

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Speaker 1: There you go, there you go, And I just think

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Speaker 1: you can replace a lot of that that market exposure

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Speaker 1: with with other vehicles at a fraction of the cost. Again,

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Speaker 1: they're always exceptions, um, And the Citadels and the like

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Speaker 1: will will always stand out, and the ELTs will always

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Speaker 1: stand out that way, But um, they are the exceptions.

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Speaker 1: The rule is much more disappointing. You know, I noticed

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Speaker 1: last year international markets. We talked to our international Bloomberg

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Speaker 1: Intelligence people like Tim Craig head over in London and

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Speaker 1: pointing out throughout the year, how you know international markets

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Speaker 1: have outperformed the US. How do you think about that?

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Speaker 1: In Yeah, I think that's probably going to be the

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Speaker 1: sleeper story, right, the sleeper market three, which is, um,

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Speaker 1: we expected the worst for Europe in many respects. It

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Speaker 1: did not happen. Right, didn't have a cold winter, they

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Speaker 1: didn't run out of energy, the pipeline infrastructure didn't collapse. Um.

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Speaker 1: You know, inflation seems to be abating there. Uh and uh,

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Speaker 1: you know those those markets have performed exceptionally. Well, if

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Speaker 1: you're an American investor and we're right about the dollar

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Speaker 1: that we've essentially seen peak dollar in this in this cycle,

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Speaker 1: then international markets of all flavors are are gonna look

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Speaker 1: pretty interesting this year. So I think that's gonna be

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Speaker 1: the sleeper story. I mean, when your most exciting tech

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Speaker 1: company is s A P. Yeah, that's definitely a sleeper story,

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Speaker 1: that is right. But that maybe is the good thing.

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Speaker 1: You know, they like semens and big manufacturing and that

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Speaker 1: kind of stuff. That's the cultural energy. Look at the

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Speaker 1: rotation that you've seen in both the sp and UM

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Speaker 1: the MSc. I acqui. So the some of the Darling

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Speaker 1: stocks fell out, like Tesla's, the metas the endvideos, right,

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Speaker 1: what come? What replaces it? Exxon? Uh uh, Proctoring, gamble

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Speaker 1: Um and Berkshire halfaway. We're just a few, So I

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Speaker 1: mean it's it's there's an interesting rotation that's going on

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Speaker 1: in the markets right now that will likely continue well

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Speaker 1: into this year. How much attention do we have to

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Speaker 1: pay to Washington d C. I'm so jaded by this

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Speaker 1: whole debt ceiling thing because you know, I remember back

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Speaker 1: when um Adam Johnson was here at Bloomberg, he did

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Speaker 1: a special when the US got downgraded and everybody poured

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Speaker 1: into treasuries. So it wasn't the horrible faith that we expected.

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Speaker 1: Now they're doing it again, and I think everyone believes

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Speaker 1: they'll eventually find a solution. Is totally political, but it

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Speaker 1: could cause some ripples in financial markets, right yeah, it could.

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Speaker 1: It could. I mean you don't when you start playing

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Speaker 1: around the full faith and credit, Um, you know that's

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Speaker 1: hostage that you don't want to take. Um because some

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Speaker 1: people want to take that hostage gladly sell. Yeah. Not

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Speaker 1: a good outcome. But the interesting thing last time that

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Speaker 1: we went through this, we actually it up in a

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Speaker 1: really good place, right so we saw we saw the

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Speaker 1: deficit come down after that. What the credit rating agencies

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Speaker 1: didn't like was the process. And this process isn't going

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Speaker 1: to get any better at this time, right Um. If anything,

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Speaker 1: it will be worse. I think the thing that we

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Speaker 1: should be looking for is a resolution through the most

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Speaker 1: unusual ways, which would be a discharge petition, which is

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Speaker 1: where basically, because of the what happened a couple of

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Speaker 1: weeks ago in the House, and because of these factions

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Speaker 1: that exist in the in the majority party, you could

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Speaker 1: see basically a coalition of the willing cut a deal,

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Speaker 1: go right around the part of the party leadership and

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Speaker 1: take it to the floor for a vote and get

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Speaker 1: it done. You know, Hans, one of the things I've

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Speaker 1: been I've been asking is just kind of what's who

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Speaker 1: are gonna be the leaders of this market? To the

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Speaker 1: extent we do have a sustained move upward here, I

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Speaker 1: mean over the last twelve fifteen years it's been technology,

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Speaker 1: but it just feels like that might not be the

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Speaker 1: case here. How do you think about market leadership going forward? Yeah,

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Speaker 1: which is this gets back to the whole idea of

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Speaker 1: of this rotation going on within the market, a new

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Speaker 1: leadership emerging, and I think it's more of the average

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Speaker 1: stock versus the favored stock, right if you and if

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Speaker 1: you proxy that for the SSP equal weight versus the

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Speaker 1: market gap weight, that equal weighted version of the index

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Speaker 1: has done very well over the last couple of years.

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Speaker 1: Last year it outperformed the market cap weighted by about

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Speaker 1: four basis points, pretty noteworthy, and it's doing the same

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Speaker 1: thing this year. If if the narrative is correct around

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Speaker 1: um China reopening, we don't go into recession. If your

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Speaker 1: escapes recession, which is the story this morning, and we

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Speaker 1: have we we escape it, or at least have a

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Speaker 1: mild one, then you're going to want more of the

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Speaker 1: cyclical names, right, Energy I think will be one of

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Speaker 1: the standouts. Industrials will be another one, materials um and

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Speaker 1: that's very different from the communication services the text of

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Speaker 1: the past four or five years. Yeah, I mean energy.

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Speaker 1: I'm just looking at x on mobile up on a

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Speaker 1: trailing twelve month basis, So that was certainly a leader

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Speaker 1: question is for a lot of folks like me that

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Speaker 1: I missed trade. So but you know we've got w

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Speaker 1: tech crude oil up again here at barrel. Hans Olson

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Speaker 1: Hans Olsen, ce IO of Fiduciary Trust Company. Uh, he's

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Speaker 1: based in Boston, but he's in here in New York

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Speaker 1: for some unknown reason, nefarious reason, I'm sure, but he

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Speaker 1: has to come to New York. I know. There's a

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Speaker 1: lot of reason, a lot of ways to get in

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Speaker 1: trouble here. So that's what I'm just calling out. Anyway,

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Speaker 1: he joins us in a Bloomberg and studio. We appreciate it.

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Speaker 1: Our c suite conversation for the day. We're talking information

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Speaker 1: technology grid dynamics g d y N is a ticker

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Speaker 1: to put in here your Bloomberg terminal. We're joined today

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Speaker 1: by Leonard Lipschitz. He's the CEO of grid Dynamics. Uh, Leonard,

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Speaker 1: thanks so much for joining us here. First of all,

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Speaker 1: just give us the thirty thousand foot overview of what

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Speaker 1: grid Dynamics is. How do you fit into that tex stack?

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Speaker 1: Thank you for having Grid Dynamics is a global tech

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Speaker 1: story engineer company. We generally consulted conidate with the largest

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Speaker 1: most respective global brands and were so optimize and deliver

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Speaker 1: the digital solutions to our clients. We drive the business

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Speaker 1: of jewelity. We create innovation into the solutions, and we

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Speaker 1: are known in digital commerce, artificial intelligence, the cloud roll

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Speaker 1: out to help all clients expanding prospers. So that's pretty

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Speaker 1: much what greeting empasies. So one of the things we

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Speaker 1: we've noticed just from some of the big tech companies

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Speaker 1: over the last couple of quarters is that the economic

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Speaker 1: headwinds which are are are global in nature. They are

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Speaker 1: in fact hitting the technology growth story and we're seeing

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Speaker 1: tech stocks reflect that in the under performance we saw

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Speaker 1: last year. How's it impacting your business your clients? Well, um,

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Speaker 1: it is always you know, the headlines about something which

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Speaker 1: happened in the world. When it comes to our specialization

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Speaker 1: and I consulting specifically, UH, with addressing the client needs

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Speaker 1: were broadly um, diversified. So yes, when we see some

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Speaker 1: pressures coming in the tech world, UM, we find some

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Speaker 1: continuous growth in a manufacturing space, there are you know,

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Speaker 1: life signs that are broader way of addressing them. You know,

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Speaker 1: they need some digital transformation. So UM we should kind

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Speaker 1: of mixed signals. Some of them are extremely you know,

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Speaker 1: prospering and growing, some of them more moderate and constraint.

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Speaker 1: Before we go any further into what's going on at

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Speaker 1: grid in the in the tech world in general, I

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Speaker 1: gotta ask what you did as UM global lighting business

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Speaker 1: head at at Ford Motor Company. What does that? What

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Speaker 1: does that mean you you design and implement the headlights

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Speaker 1: strategies or how's that work? You're going back decades ago? Um, well,

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Speaker 1: I was very fortunate to start my career after the

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Speaker 1: advanced degrees from various universities at Fort Mootor Company, and UH,

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Speaker 1: right of the bat, we were facing the again the

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Speaker 1: revolution and lightning with modern technology like H A D

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Speaker 1: lamps and uh, you know Elergy technologies, and I just

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Speaker 1: happened to be in the forefront. So we were working

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Speaker 1: with Ford and then later when Ford spun off this

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Speaker 1: Janet the division I was again fortunate to spare had

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Speaker 1: a lot of innovations in the global very very renowned

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Speaker 1: brands to change their entire behavior and comes to front lighting. No,

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Speaker 1: that's fascinating. Let's get back then to tech. Now, I'm

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Speaker 1: wondering how much of a concern rising rates are for

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Speaker 1: you and for the industry. UM. And we've heard from

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Speaker 1: a number of players on the West Coast that, um,

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Speaker 1: the software spend uh, and I guess in general I

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Speaker 1: T spending could be challenged this year. UM. How do

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Speaker 1: you how do you see that good dynamics? Well, um, well,

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Speaker 1: let's just let me answer the second question first, and

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Speaker 1: they'll come back to the interest rates. So yes, UM,

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Speaker 1: and the and the soft forth spend. Um, you see

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Speaker 1: some pressure. So is with the industrial budget? Um? Start

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Speaker 1: the first downturn we've facing the company, We've been around

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Speaker 1: for sety years. Typically what makes the difference is how

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Speaker 1: critical the applications are for the client. Again, when we

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Speaker 1: come to the health of the company, it's about the pricing, personalization,

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Speaker 1: supply chain, logistics. UM. You know, competitive innovation. So typically

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Speaker 1: when you are in the midst of the very critical

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Speaker 1: path for the competitive advantage and the clients are relying

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Speaker 1: on you. There's a little bit of another behavior during

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Speaker 1: the you know, some of the constraints with the client,

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Speaker 1: they rely on their partners, like the supply partners like

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Speaker 1: gre Dynamics, UM, just to lebage some of the risks

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Speaker 1: in turn to their own budgets. So in general, I

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Speaker 1: feel very bullish for the year. Of course, UM, you know,

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Speaker 1: everybody kind of watches where the raids are. But this

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Speaker 1: is more about the sentiment than the true behavior. And

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Speaker 1: then I mean we'll go to the earnings call um

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Speaker 1: and you know very soon in a month, and then

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Speaker 1: we'll have more details about our performance. But I see

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Speaker 1: that we have the UM, I would say for three

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Speaker 1: on the road map perspective, a pretty comfortable expectation going

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Speaker 1: toward the second half of the year. As part of

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Speaker 1: the interest rates, UM, everybody is watching them because again

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Speaker 1: many industries depend on our loans and particularly United States

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Speaker 1: and again how plans. Majority of the are you large brands,

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Speaker 1: enterprises and texts in the US. So yes, as we

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Speaker 1: see a little bit over the tampering on the forecasting

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Speaker 1: in terms of the future of the interest rates, some

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Speaker 1: of their clients become a little bit more open to

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Speaker 1: discuss long term plans. Um. You know, I don't have

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Speaker 1: the magic one to you know, the crystal bolt of

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Speaker 1: forecast exact numbers, but we we definitely have a little

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Speaker 1: bit better sentiment today than it could have been like

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Speaker 1: two or three months ago. So, Leonard, your your companies

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Speaker 1: based out there in Silicon Valley, San Ramon, California. What

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Speaker 1: are you and maybe not you guys, but what are

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Speaker 1: your neighbors doing in terms of firing people laying off people.

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Speaker 1: We've seen, you know, a whole bunch of tech companies

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Speaker 1: announced layoffs, you know, including today most recently Spotify. What's

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Speaker 1: going on out there with you guys. Well, we are

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Speaker 1: headquartered in in the Bay Area, but we also have

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Speaker 1: a very strong presence in Texas, you know, Atlanta, Georgia,

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Speaker 1: New York, Jersey, you know, South East, as well as

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Speaker 1: mos As West, so we're quite diversified around the US

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Speaker 1: from the client bates as well as Europe. Still, yes,

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Speaker 1: I think, you know, Silicon Valley is notorious for those

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Speaker 1: ramp up and ram downs. Um. I would say if

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Speaker 1: you read your own you know publication, which you're a

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Speaker 1: big fan of, Bloomberg in a subscriber for a while. Uh,

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Speaker 1: you can tell that in the last two years some

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Speaker 1: of the big tax you know, expressed a very very

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Speaker 1: strong growth, and during the growth they added a lot

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Speaker 1: of headcounts. So it's a little bit of opportunity to um.

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Speaker 1: Somebody mentioned green the addicts. I hope that people not

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Speaker 1: offended by that term, because of of course, as a

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Speaker 1: treasure of people lose the job. But if you compare

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Speaker 1: the head count of the big tech today versus three

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Speaker 1: years ago, it's still very very strong for us frank

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Speaker 1: as an opportunity to hire really good people are out

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Speaker 1: of the industry and we were constrained with you know,

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Speaker 1: crazy uh spendings, but we are very bullish that you know,

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Speaker 1: there's a place of great e many school quality people

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Speaker 1: as will continue to expend all right, great stuff. Leonards Lifts,

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Speaker 1: CEO of grid Dynamics, the ticker is g d y

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Speaker 1: N for your Bloomberg terminal got about a nine million

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Speaker 1: dollar market cap there in the information technology consulting business, uh,

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Speaker 1: you know, and their business, as Mr stated, it's still

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Speaker 1: pretty strong. But again, as we've heard from a lot

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Speaker 1: of tech companies over the past couple of quarters. You know,

427
00:23:36,600 --> 00:23:39,600
Speaker 1: the economic headwindes that are affecting so many other industries, Uh,

428
00:23:39,640 --> 00:23:42,760
Speaker 1: they're also affecting uh information technology and just the tech

429
00:23:42,800 --> 00:23:45,080
Speaker 1: spend in general. So we'll pay attention to some of

430
00:23:45,080 --> 00:23:48,080
Speaker 1: those tech companies coming up in this earning season to

431
00:23:48,080 --> 00:23:55,000
Speaker 1: get an outlook for It's a good day in the

432
00:23:55,040 --> 00:23:57,880
Speaker 1: Market's not so much if you're you know somebody's tech

433
00:23:57,920 --> 00:24:00,000
Speaker 1: companies just you know, last year is such a tough

434
00:24:00,160 --> 00:24:02,399
Speaker 1: run for them in a rising interest rate environment. We

435
00:24:02,480 --> 00:24:04,800
Speaker 1: got some news out today on another big tech name,

436
00:24:04,840 --> 00:24:07,920
Speaker 1: Salesforce dot com. It's got an activist investor in there.

437
00:24:08,080 --> 00:24:09,399
Speaker 1: What does that mean for the company? What does that

438
00:24:09,440 --> 00:24:11,560
Speaker 1: mean for management? On a rock ran a senior tech

439
00:24:11,560 --> 00:24:14,680
Speaker 1: anals for Bloomberg Intelligence Joints is on the phone. What

440
00:24:14,760 --> 00:24:18,000
Speaker 1: does Elliott want? What do you think when if they

441
00:24:18,040 --> 00:24:20,080
Speaker 1: get a voice at the board, if they get a

442
00:24:20,160 --> 00:24:21,880
Speaker 1: zoom call with the board, what do you think they're

443
00:24:21,920 --> 00:24:25,000
Speaker 1: gonna ask? So I think they're gonna ask them to

444
00:24:25,000 --> 00:24:27,240
Speaker 1: be a little more responsible with the way they spend

445
00:24:27,280 --> 00:24:29,959
Speaker 1: their money. Frankly, and you know the number one thing

446
00:24:30,040 --> 00:24:34,000
Speaker 1: for us is Salesforce spends more on sales and marketing

447
00:24:34,040 --> 00:24:36,800
Speaker 1: than any company their size, you know, on a gap

448
00:24:36,840 --> 00:24:40,719
Speaker 1: basis of their revenue goes to sales and marketing compared

449
00:24:40,760 --> 00:24:45,960
Speaker 1: to let's say for Article or the SAP or about

450
00:24:46,000 --> 00:24:48,840
Speaker 1: eleven percent for Microsoft what it calls for that difference.

451
00:24:48,840 --> 00:24:52,520
Speaker 1: Do you think did they just buy more expensive dinners? Yeah?

452
00:24:52,760 --> 00:24:54,919
Speaker 1: I think see what happens is in the cloud based

453
00:24:54,960 --> 00:24:58,159
Speaker 1: software world and everything is growth was everything, you know,

454
00:24:58,200 --> 00:25:00,879
Speaker 1: they would just push a lot money on sales and

455
00:25:00,960 --> 00:25:03,520
Speaker 1: marketing and some get some you know growth out of it.

456
00:25:03,840 --> 00:25:06,680
Speaker 1: They do a lot of conferences, they are all over

457
00:25:06,720 --> 00:25:09,880
Speaker 1: the world. But factly speaking, that is absolutely true when

458
00:25:09,880 --> 00:25:12,760
Speaker 1: you are a startup, a brand new company. But Salesforce

459
00:25:12,760 --> 00:25:15,000
Speaker 1: has been around for twenty four years now, so they

460
00:25:15,080 --> 00:25:17,520
Speaker 1: really don't need to do that anymore. Um So, I

461
00:25:17,560 --> 00:25:19,920
Speaker 1: think that's going to be a big area of focus

462
00:25:19,920 --> 00:25:24,280
Speaker 1: and ARBUO in terms of the rest of the layoffs.

463
00:25:24,560 --> 00:25:27,520
Speaker 1: Um do you see this as a concern. I mean,

464
00:25:27,560 --> 00:25:30,640
Speaker 1: if they're starting to cut people, it's gonna be hard

465
00:25:30,640 --> 00:25:33,040
Speaker 1: to turn that around anything need to. I mean, Salesforce,

466
00:25:33,080 --> 00:25:35,520
Speaker 1: I think is a special case because as we pointed out,

467
00:25:35,520 --> 00:25:39,639
Speaker 1: they've hired thirty one people in two years. They you know,

468
00:25:39,720 --> 00:25:43,080
Speaker 1: boosted their head count by like sixty. But the other

469
00:25:43,600 --> 00:25:45,440
Speaker 1: big tech companies are in this in the same boat.

470
00:25:46,720 --> 00:25:48,480
Speaker 1: So the way you want to think about it is

471
00:25:48,680 --> 00:25:52,240
Speaker 1: there is a very large correlation between revenue growth and

472
00:25:52,400 --> 00:25:55,199
Speaker 1: employee growth. Let's say, you know, for the sake of argument,

473
00:25:55,280 --> 00:25:57,400
Speaker 1: it's one is to one or slightly less than one

474
00:25:57,440 --> 00:26:00,000
Speaker 1: is to one. Now, if these if if your thes

475
00:26:00,040 --> 00:26:02,040
Speaker 1: is is right, or if you believe take spending will

476
00:26:02,040 --> 00:26:04,120
Speaker 1: come back, you know, next year or the year after.

477
00:26:04,520 --> 00:26:06,879
Speaker 1: They have no choice but to hire people because they

478
00:26:07,240 --> 00:26:10,520
Speaker 1: needed not just in sales and marketing but software developers

479
00:26:10,560 --> 00:26:13,119
Speaker 1: to come up with new products or to expand services.

480
00:26:13,400 --> 00:26:16,800
Speaker 1: So I'm not concerned about the head counter you know edition.

481
00:26:17,040 --> 00:26:19,359
Speaker 1: The question is where the allocation goes. Are you going

482
00:26:19,400 --> 00:26:21,120
Speaker 1: to put that money in R and D or you're

483
00:26:21,119 --> 00:26:23,360
Speaker 1: going to put that money in you know, sales and marketing.

484
00:26:23,600 --> 00:26:25,160
Speaker 1: And I think that's really going to be a big

485
00:26:25,200 --> 00:26:27,679
Speaker 1: difference for salesforce. I think they will have to be

486
00:26:27,680 --> 00:26:30,359
Speaker 1: a little more responsible with the way they spend money.

487
00:26:30,480 --> 00:26:33,159
Speaker 1: And then also about their you know, acquisitions. They have

488
00:26:33,240 --> 00:26:36,200
Speaker 1: spent so much money the last few years in acquisitions.

489
00:26:36,440 --> 00:26:39,000
Speaker 1: I think that the Elliott can ask them to you know,

490
00:26:39,040 --> 00:26:42,520
Speaker 1: focus more on organic growth, cost control, and then buybacks.

491
00:26:43,320 --> 00:26:45,879
Speaker 1: So all right, so let's stay with just kind of

492
00:26:45,920 --> 00:26:48,840
Speaker 1: the Silicon Valley layoff story, if you will. I mean,

493
00:26:48,880 --> 00:26:52,840
Speaker 1: are these the you know, the high and demand engineer

494
00:26:53,000 --> 00:26:57,119
Speaker 1: software folks. I can't imagine, because all I've heard for

495
00:26:57,160 --> 00:27:00,359
Speaker 1: the last twenty years coming out of Silicon Valley, and

496
00:27:00,480 --> 00:27:02,600
Speaker 1: that includes you know, some of the you know, the

497
00:27:02,640 --> 00:27:05,119
Speaker 1: Googles of the world in the Facebook, they just can't

498
00:27:05,160 --> 00:27:08,439
Speaker 1: get enough of that talent. Are they letting that talent go?

499
00:27:10,119 --> 00:27:12,000
Speaker 1: I think it is a mix of both. I'm not

500
00:27:12,200 --> 00:27:14,560
Speaker 1: you know, I've never looked at the breakdown of you know,

501
00:27:14,560 --> 00:27:18,240
Speaker 1: who got laid off in this particular you know cycle,

502
00:27:18,359 --> 00:27:20,320
Speaker 1: but I think it will be a lot of people

503
00:27:20,440 --> 00:27:23,480
Speaker 1: in you know, sales and marketing, a lot of people

504
00:27:23,520 --> 00:27:26,119
Speaker 1: in HR and other support functions, as well as some

505
00:27:26,200 --> 00:27:29,160
Speaker 1: developers also. I'm sure that's not the case. But having

506
00:27:29,160 --> 00:27:32,400
Speaker 1: said that, I've said this repeatedly that the unemployment rate

507
00:27:32,480 --> 00:27:35,440
Speaker 1: for a lot of these categories, whether it's software developers,

508
00:27:35,560 --> 00:27:39,480
Speaker 1: database administrators, is so low. I mean it's it's you know,

509
00:27:39,520 --> 00:27:42,359
Speaker 1: two percent or sometimes even below that. Um, you know,

510
00:27:42,440 --> 00:27:45,679
Speaker 1: they will have no problem finding a job anywhere, and

511
00:27:45,720 --> 00:27:48,520
Speaker 1: the reason for that is every industry it doesn't have

512
00:27:48,640 --> 00:27:53,120
Speaker 1: to be taking you know, energy transportation. You know, all

513
00:27:53,160 --> 00:27:57,160
Speaker 1: of these people are hiring technology people to digitize their businesses.

514
00:27:58,680 --> 00:28:01,520
Speaker 1: By the way, I wanted to ask you about at GPT. Right,

515
00:28:01,600 --> 00:28:05,880
Speaker 1: Microsoft is investing in this AI company, well, an Open

516
00:28:05,920 --> 00:28:08,480
Speaker 1: Eye AI, which runs chat GPT. I've been trying to

517
00:28:08,480 --> 00:28:10,960
Speaker 1: get on it all morning, but it's just too crowded.

518
00:28:11,000 --> 00:28:14,760
Speaker 1: Everybody wants to use it. It's an artificial intelligence. I

519
00:28:14,760 --> 00:28:17,359
Speaker 1: guess to paper, I was going to use it to

520
00:28:17,680 --> 00:28:20,040
Speaker 1: build an e t F. Me and Katie Greifeld, we're

521
00:28:20,040 --> 00:28:21,600
Speaker 1: gonna do that. My brother wants to use it to

522
00:28:21,640 --> 00:28:25,240
Speaker 1: write a song. You know, UM investors are using it

523
00:28:25,359 --> 00:28:29,960
Speaker 1: or or or UH bankers are using it to pitch investors. UM.

524
00:28:30,200 --> 00:28:32,520
Speaker 1: Is this going to be incredibly successful or is it

525
00:28:32,720 --> 00:28:34,400
Speaker 1: just a fat right now that's going to burn out.

526
00:28:35,800 --> 00:28:38,640
Speaker 1: Ce AI in general is going to be generally successful

527
00:28:38,760 --> 00:28:40,920
Speaker 1: because it's not going to be only a product like

528
00:28:41,000 --> 00:28:44,160
Speaker 1: this where you know, it's it's a chat, you know, judge,

529
00:28:44,200 --> 00:28:47,560
Speaker 1: GPT like a product, but almost everything that we do,

530
00:28:47,640 --> 00:28:50,000
Speaker 1: any software application that we use, and it could be

531
00:28:50,040 --> 00:28:53,520
Speaker 1: Spotify as well. As you were discussing or Microsoft Word

532
00:28:53,720 --> 00:28:57,640
Speaker 1: or or anything else. Um, it has to get more sophisticated.

533
00:28:57,720 --> 00:29:01,360
Speaker 1: It has to have the ability of to to understand

534
00:29:01,400 --> 00:29:05,040
Speaker 1: things and give you better results. So AI infusion across

535
00:29:05,080 --> 00:29:07,680
Speaker 1: all software products is one of the biggest trends that

536
00:29:07,720 --> 00:29:10,160
Speaker 1: we will see over the next few years. And then

537
00:29:10,200 --> 00:29:12,760
Speaker 1: one of the key things about you know, this investment

538
00:29:12,920 --> 00:29:15,440
Speaker 1: is you know, the back end for this is Microsoft's

539
00:29:15,440 --> 00:29:18,200
Speaker 1: cloud platform. So the more people use, you know, it's

540
00:29:18,240 --> 00:29:21,640
Speaker 1: good for the usage or the consumption of those cloud services.

541
00:29:21,880 --> 00:29:23,440
Speaker 1: And I think that is going to be a big

542
00:29:23,680 --> 00:29:26,280
Speaker 1: story for the next few years. All Right, good stuff

543
00:29:26,320 --> 00:29:28,520
Speaker 1: as always on a rogronic. He's a tech analyst at

544
00:29:28,520 --> 00:29:34,240
Speaker 1: Bloomberg Intelligence, talking about all things tech, tech, labor force layoffs,

545
00:29:34,840 --> 00:29:37,520
Speaker 1: and chat GPT. That is the new thing, right, I mean,

546
00:29:37,560 --> 00:29:39,000
Speaker 1: that's kind of like the last few weeks, and I'm

547
00:29:39,000 --> 00:29:41,040
Speaker 1: excited to get on it. I'm in line. I'm waiting.

548
00:29:44,000 --> 00:29:47,760
Speaker 1: Let's talk a little bit about the venture viz venture

549
00:29:47,800 --> 00:29:52,680
Speaker 1: debt investing in startups. How's that marketplace these days? In

550
00:29:52,760 --> 00:29:54,520
Speaker 1: a rising interest rate environment. We're gonna check in with

551
00:29:54,560 --> 00:29:58,120
Speaker 1: Kyle Brown. He's a c IO and president of Trinity Capital.

552
00:29:58,520 --> 00:30:02,480
Speaker 1: Nastack simbol T r I N. Mr. Brown graduated from

553
00:30:02,520 --> 00:30:05,280
Speaker 1: Arizona State, whose best men's basketball team is coached by

554
00:30:05,320 --> 00:30:08,280
Speaker 1: the greatest college point guard of all time? Who's that?

555
00:30:08,440 --> 00:30:12,600
Speaker 1: Bobby Hurley, Jersey City, New Jersey, St. Anthony's and Duke

556
00:30:13,120 --> 00:30:14,840
Speaker 1: uh Kyle. Thanks so much for joining us here. Talk

557
00:30:14,880 --> 00:30:18,240
Speaker 1: to us about just to start off, what is Trinity Capital.

558
00:30:18,240 --> 00:30:20,960
Speaker 1: Where do you guys play in the capital markets? Well,

559
00:30:21,000 --> 00:30:24,800
Speaker 1: thanks Matt, Thanks Paul. Trinity Capital. We are a provider

560
00:30:24,840 --> 00:30:27,760
Speaker 1: of capital to growth stage companies' introre dead as one

561
00:30:27,760 --> 00:30:31,040
Speaker 1: product we provide, but we really focus on companies growing

562
00:30:31,040 --> 00:30:35,719
Speaker 1: in annual growth rate who have raised significant equity dollars

563
00:30:35,760 --> 00:30:39,400
Speaker 1: fifty plus million dollars of equity, They've proven out their technology,

564
00:30:39,720 --> 00:30:42,720
Speaker 1: they've really identified a market, they've got a they've got

565
00:30:42,720 --> 00:30:45,160
Speaker 1: a moat around that technology, and they're really scaling and

566
00:30:45,200 --> 00:30:47,440
Speaker 1: we come in to provide capital to help them grow.

567
00:30:47,960 --> 00:30:50,840
Speaker 1: And we really focus on execution type risk um and

568
00:30:50,880 --> 00:30:54,960
Speaker 1: so we're helping these companies go from you of of

569
00:30:55,080 --> 00:30:58,160
Speaker 1: run rate as they reach either profitability or head towards

570
00:30:58,160 --> 00:31:00,240
Speaker 1: an I p O or M and a type transit action.

571
00:31:00,320 --> 00:31:02,400
Speaker 1: So we're an extension of runway and a compliment to

572
00:31:02,440 --> 00:31:04,520
Speaker 1: the equity that they've raised. So what's the market like

573
00:31:04,640 --> 00:31:07,920
Speaker 1: for those companies? Um, is it harder and harder for

574
00:31:07,960 --> 00:31:11,160
Speaker 1: them to get access. So it's a really interesting market

575
00:31:11,240 --> 00:31:14,840
Speaker 1: right now. Um, You've got a ton of equity out there, right,

576
00:31:14,880 --> 00:31:17,400
Speaker 1: maybe even a record amount of venturer capital and private

577
00:31:17,400 --> 00:31:20,320
Speaker 1: equity that's looking at to be placed. And then you

578
00:31:20,400 --> 00:31:23,959
Speaker 1: have the idea that they want revaluations. Right, there's been

579
00:31:24,080 --> 00:31:27,120
Speaker 1: very lucrati evaluations for founders to the last you know,

580
00:31:27,640 --> 00:31:30,520
Speaker 1: five years, and so there's a lot of capital, but

581
00:31:30,600 --> 00:31:32,840
Speaker 1: they are looking for deals. And so you have a

582
00:31:32,920 --> 00:31:35,640
Speaker 1: variety of situations. One is a company that really needs

583
00:31:35,680 --> 00:31:38,640
Speaker 1: equity um, and maybe it's not growing at the pace

584
00:31:38,640 --> 00:31:40,160
Speaker 1: that they were before and it's gonna be difficult for

585
00:31:40,200 --> 00:31:42,200
Speaker 1: that company to to get that equity. And then you

586
00:31:42,240 --> 00:31:44,320
Speaker 1: have companies that continue to do well in the face

587
00:31:44,360 --> 00:31:47,760
Speaker 1: of adversity, but in spite of that, they're going to

588
00:31:47,800 --> 00:31:50,960
Speaker 1: see their company revalued. And so it's really you know,

589
00:31:51,040 --> 00:31:53,400
Speaker 1: it's it's happening slowly. I don't know that it's quite

590
00:31:53,400 --> 00:31:56,160
Speaker 1: happened yet, but you know, these these tech companies are

591
00:31:56,200 --> 00:31:59,120
Speaker 1: getting revalued similar to what's happened in the public markets.

592
00:31:59,800 --> 00:32:01,960
Speaker 1: And talked to us about I mean, you know, the

593
00:32:01,960 --> 00:32:04,160
Speaker 1: startup companies. It was for the longest time, it was

594
00:32:04,200 --> 00:32:06,160
Speaker 1: this top line growth, top line growth, maybe even just

595
00:32:06,280 --> 00:32:10,479
Speaker 1: subscriber growth, don't worry about profits. But that's really seemed

596
00:32:10,760 --> 00:32:12,800
Speaker 1: to change. Talk to us about that and how how

597
00:32:12,800 --> 00:32:15,959
Speaker 1: you factor that into analysis? Sure, I mean, so our

598
00:32:16,040 --> 00:32:18,560
Speaker 1: underwriting is always factored on you know, does this company

599
00:32:18,560 --> 00:32:20,080
Speaker 1: have the ability to turn the corner? And do they

600
00:32:20,120 --> 00:32:23,000
Speaker 1: have lovers in place to control burn? And does the

601
00:32:23,000 --> 00:32:25,200
Speaker 1: burn make sense? You know, are they spending to grow

602
00:32:25,640 --> 00:32:28,280
Speaker 1: because the unit and economics makes sense. And I think

603
00:32:28,600 --> 00:32:31,480
Speaker 1: you know what's interesting is our portfolio. We've got ninety

604
00:32:31,480 --> 00:32:34,720
Speaker 1: plus portfolio companies today. Our portfolio started making changes twelve

605
00:32:34,720 --> 00:32:37,400
Speaker 1: to eighteen months ago, kind of in advance of what

606
00:32:37,400 --> 00:32:40,000
Speaker 1: you're seeing in the public markets today. So many of

607
00:32:40,000 --> 00:32:44,240
Speaker 1: these companies made the hard decision a year ago, knowing

608
00:32:44,520 --> 00:32:46,920
Speaker 1: that they were in the middle of tough times. Uh,

609
00:32:46,960 --> 00:32:49,320
Speaker 1: their and their investors of course, have seen this before,

610
00:32:49,720 --> 00:32:51,760
Speaker 1: and so a lot of those changes have already been made,

611
00:32:52,080 --> 00:32:53,719
Speaker 1: and so a lot of these companies are really kind

612
00:32:53,720 --> 00:32:56,120
Speaker 1: of weathering the storm. They're raising the amount of capital

613
00:32:56,160 --> 00:32:58,560
Speaker 1: they need to get to you know, plus years down

614
00:32:58,680 --> 00:33:01,200
Speaker 1: down the road. UH, so they can get to better

615
00:33:01,280 --> 00:33:05,320
Speaker 1: days and raise equity at better valuations. So it's it's UH.

616
00:33:05,360 --> 00:33:08,000
Speaker 1: I think the most most changes have been made. They

617
00:33:08,000 --> 00:33:10,560
Speaker 1: continue to be made, but I think it just happens

618
00:33:10,560 --> 00:33:12,800
Speaker 1: sooner than what you're seeing in the public markets. Have

619
00:33:13,040 --> 00:33:18,040
Speaker 1: you seen an increased demand from investors UM for access

620
00:33:18,080 --> 00:33:21,280
Speaker 1: to your UH, to your firm, because it does seem like,

621
00:33:21,760 --> 00:33:26,040
Speaker 1: you know, private credit has been a huge UM trend

622
00:33:26,360 --> 00:33:29,520
Speaker 1: over the last sex say, six months to a year. Yeah,

623
00:33:29,560 --> 00:33:32,920
Speaker 1: we we certainly have UM. You know, there's the idea

624
00:33:33,000 --> 00:33:34,800
Speaker 1: is that there is if you do, if you invest

625
00:33:34,960 --> 00:33:37,840
Speaker 1: right during this time with valuations in some cases kind

626
00:33:37,840 --> 00:33:40,720
Speaker 1: of being had, there could be an opportunity for some

627
00:33:40,800 --> 00:33:43,560
Speaker 1: outsize warrant returns. And you know, in our world, the

628
00:33:43,560 --> 00:33:45,440
Speaker 1: majority of our returns and if you look at the

629
00:33:45,480 --> 00:33:47,320
Speaker 1: returns we've been generating for a long time, it's all

630
00:33:47,360 --> 00:33:50,320
Speaker 1: it's mostly current pay. It's it's it's rate, it's fee.

631
00:33:50,800 --> 00:33:53,960
Speaker 1: We are a true lender, secured lender, but we also

632
00:33:54,000 --> 00:33:56,720
Speaker 1: get warrants. There's some additional upside and in our world

633
00:33:56,760 --> 00:33:58,600
Speaker 1: that that tends to kind of cover your losses and

634
00:33:58,720 --> 00:34:02,800
Speaker 1: provide investors with some additional upside. If valuations are being

635
00:34:02,840 --> 00:34:06,640
Speaker 1: had and we are getting warrants that those newer valuations,

636
00:34:06,640 --> 00:34:09,680
Speaker 1: it provides some potential for some some additional upside down

637
00:34:09,719 --> 00:34:12,040
Speaker 1: the road. And so I think investors see that certainly,

638
00:34:12,600 --> 00:34:14,960
Speaker 1: and UM, I think we see it as well. What's

639
00:34:14,960 --> 00:34:19,239
Speaker 1: the concern about um uh non performing loans? I have

640
00:34:19,280 --> 00:34:22,520
Speaker 1: a listener who writes in to ask, you know, assuming

641
00:34:22,560 --> 00:34:25,279
Speaker 1: you have none right now, um, if if we get

642
00:34:25,280 --> 00:34:28,440
Speaker 1: a recession, what do you expect that that number to

643
00:34:28,480 --> 00:34:31,879
Speaker 1: grow to that zero percent to grow too? So, I mean,

644
00:34:32,200 --> 00:34:33,960
Speaker 1: losses are a part of our our world. You know,

645
00:34:34,000 --> 00:34:35,799
Speaker 1: we we have you know, you can look at our

646
00:34:35,800 --> 00:34:38,760
Speaker 1: warrant gains recently. We we have significant kind of equity

647
00:34:38,800 --> 00:34:40,920
Speaker 1: realized gains that cover some of our losses. It's just

648
00:34:40,960 --> 00:34:43,280
Speaker 1: part of our model. So we expect there to be losses.

649
00:34:43,320 --> 00:34:46,440
Speaker 1: We expect there to be um, some non accruals. It's

650
00:34:46,480 --> 00:34:49,480
Speaker 1: just part of how our world works. Can you quantify that?

651
00:34:49,560 --> 00:34:52,160
Speaker 1: I mean what I know Matthew have earlier was saying

652
00:34:52,160 --> 00:34:56,239
Speaker 1: he thought, um, we'd see nine percent default rate. Now

653
00:34:56,280 --> 00:34:58,319
Speaker 1: that was I think an outlier, But what what what

654
00:34:58,360 --> 00:35:01,600
Speaker 1: do you expect this year? We've seen a historic loss right.

655
00:35:01,640 --> 00:35:03,160
Speaker 1: We've been doing this since, you know, going back to

656
00:35:03,200 --> 00:35:05,480
Speaker 1: the the real estate crash in two thousand and eight,

657
00:35:05,480 --> 00:35:08,319
Speaker 1: we've seen a kind of annual two percent, historic kind

658
00:35:08,320 --> 00:35:12,880
Speaker 1: of loss rate. UM that really hasn't changed much. UM.

659
00:35:12,920 --> 00:35:14,960
Speaker 1: You know, the companies that we have in our portfolio

660
00:35:15,000 --> 00:35:17,000
Speaker 1: and that we're seeing in our space, it's not it's

661
00:35:17,000 --> 00:35:18,480
Speaker 1: not really a matter of are they going to go

662
00:35:18,560 --> 00:35:21,759
Speaker 1: away or not? UM. These companies have real technology, there's

663
00:35:21,800 --> 00:35:23,840
Speaker 1: real value, real I P. And in our world we

664
00:35:23,880 --> 00:35:26,080
Speaker 1: do a lot of equipment financing. There's really equipment value

665
00:35:26,080 --> 00:35:28,600
Speaker 1: there that's that's worth something in a in a downturn scenario,

666
00:35:29,080 --> 00:35:31,719
Speaker 1: it's really more about at what value are they going

667
00:35:31,760 --> 00:35:34,200
Speaker 1: to raise capital at and and what that And that

668
00:35:34,280 --> 00:35:37,520
Speaker 1: impacts equity investors and shareholders more than it investors secured

669
00:35:37,640 --> 00:35:40,239
Speaker 1: lender who's sitting at a very low loaned value. I

670
00:35:40,239 --> 00:35:43,600
Speaker 1: think we are average loaned values under fift loan to value,

671
00:35:43,600 --> 00:35:46,960
Speaker 1: and so UM that impacts us less because most of

672
00:35:46,960 --> 00:35:48,560
Speaker 1: our returns made up of rate and feet like I

673
00:35:48,600 --> 00:35:51,120
Speaker 1: said before, so we haven't historically seen that be a

674
00:35:51,200 --> 00:35:54,239
Speaker 1: huge impact to us. UM. I I do expect will

675
00:35:54,280 --> 00:35:57,200
Speaker 1: continue to see it. You know, companies struggle raising that capital.

676
00:35:57,280 --> 00:36:00,239
Speaker 1: That might lead to some some defaults, but you know,

677
00:36:00,440 --> 00:36:02,920
Speaker 1: being senior secured against companies that have you know, a

678
00:36:02,960 --> 00:36:05,560
Speaker 1: hundred plus million dollar valuations and real i P were

679
00:36:05,560 --> 00:36:07,960
Speaker 1: typically in a pretty good spot to weather that type

680
00:36:07,960 --> 00:36:09,920
Speaker 1: of storm. Kyle, what are some of the sectors that

681
00:36:10,000 --> 00:36:14,359
Speaker 1: you guys favor investing in? So we focus a lot

682
00:36:14,440 --> 00:36:17,440
Speaker 1: on manufacturing. Uh, there's a lot that goes underneath that.

683
00:36:17,520 --> 00:36:20,360
Speaker 1: It could be food and beverage, it could be frontier

684
00:36:20,480 --> 00:36:23,640
Speaker 1: tech like an Axiom space where they're using our tools

685
00:36:23,680 --> 00:36:27,000
Speaker 1: to build the first commercial space station. We focus on

686
00:36:27,080 --> 00:36:30,960
Speaker 1: mission critical equipment, equipment that company cannot survive without. And

687
00:36:31,000 --> 00:36:33,319
Speaker 1: so whether or not they turn into Google or not,

688
00:36:33,560 --> 00:36:35,640
Speaker 1: you know, there's real value there whoever does buy them

689
00:36:35,719 --> 00:36:38,840
Speaker 1: or or or you know, there's real value in that equipment.

690
00:36:38,880 --> 00:36:42,000
Speaker 1: So we focus on manufacturing. Actually really bullish on that space.

691
00:36:42,040 --> 00:36:44,440
Speaker 1: I think you're seeing more and more focus on infrastructure

692
00:36:44,440 --> 00:36:46,320
Speaker 1: in the US, and they need a lot of tools,

693
00:36:46,360 --> 00:36:49,960
Speaker 1: a lot of equipment, so we see a lot happening there. Um.

694
00:36:50,000 --> 00:36:52,560
Speaker 1: You know, we also we continue to see a lot

695
00:36:52,560 --> 00:36:55,200
Speaker 1: of enterprise sas although you know, I think you're seeing

696
00:36:55,200 --> 00:36:58,400
Speaker 1: a lot of revaluations happening there. Um, that's not going away,

697
00:36:58,480 --> 00:37:00,080
Speaker 1: and that's a that's a pretty big part of our

698
00:37:00,080 --> 00:37:03,640
Speaker 1: portfolio as well. So you know, Manufacturing, Enterprise SASS and

699
00:37:03,680 --> 00:37:06,719
Speaker 1: then uh, you know, life science and healthcare. I think

700
00:37:06,719 --> 00:37:08,799
Speaker 1: that that correction happened a long time ago, and you're

701
00:37:08,800 --> 00:37:11,399
Speaker 1: starting to see some really interesting opportunities there as well.

702
00:37:11,600 --> 00:37:14,120
Speaker 1: What's you know that Uh, what's the biggest challenge to

703
00:37:14,160 --> 00:37:17,719
Speaker 1: your growth? Because I just reminded that it's difficult to

704
00:37:17,719 --> 00:37:20,480
Speaker 1: find workers. I know that in tech, Uh there are

705
00:37:20,480 --> 00:37:22,640
Speaker 1: a lot of pink slips going out, so maybe that

706
00:37:22,719 --> 00:37:24,919
Speaker 1: would help, um, but a lot of people we talked

707
00:37:24,920 --> 00:37:28,440
Speaker 1: to say they have to go to Canada to find um,

708
00:37:28,480 --> 00:37:32,480
Speaker 1: you know, workers with the skills that they need. Ye know. Um,

709
00:37:32,520 --> 00:37:35,080
Speaker 1: I don't know that our our portfolio companies, you know,

710
00:37:35,120 --> 00:37:37,600
Speaker 1: think about our portfolio there, maybe they're not quite big enough.

711
00:37:37,640 --> 00:37:40,000
Speaker 1: But I'm just wondering what are the challenges to growth

712
00:37:40,040 --> 00:37:45,160
Speaker 1: that you see out there? Sure, Um, you know, inflation

713
00:37:45,160 --> 00:37:50,160
Speaker 1: obviously continues to be a difficult, especially for consumer type products. Um.

714
00:37:50,200 --> 00:37:52,719
Speaker 1: You know, I think that if you see a recession,

715
00:37:52,800 --> 00:37:54,640
Speaker 1: there's gonna be a one to your time period where

716
00:37:54,680 --> 00:37:56,080
Speaker 1: it's just gonna be a little bit slower, you're not

717
00:37:56,080 --> 00:37:58,719
Speaker 1: gonna have these growth rates. Maybe it's a little bit

718
00:37:58,760 --> 00:38:02,080
Speaker 1: less than that. So I think, you know, capitalization and

719
00:38:02,120 --> 00:38:04,200
Speaker 1: making sure you've got runway to whether a storm is

720
00:38:04,320 --> 00:38:06,360
Speaker 1: absolutely on the forefront of all of our all of

721
00:38:06,360 --> 00:38:09,520
Speaker 1: our company's minds, and and it should be. Um, they've

722
00:38:09,560 --> 00:38:12,719
Speaker 1: got real technology. It's very disruptive. Uh, and they were

723
00:38:12,760 --> 00:38:15,640
Speaker 1: disrupting old archaic businesses. But it's not necessarily the best

724
00:38:15,680 --> 00:38:18,240
Speaker 1: technology that wins the day. It's the best capitalized company

725
00:38:18,239 --> 00:38:21,000
Speaker 1: that wins the day. Often, he Kyle, you took your

726
00:38:21,000 --> 00:38:23,520
Speaker 1: company Trinity to Capital Public. What was the strategy behind

727
00:38:23,520 --> 00:38:27,200
Speaker 1: that for you and your your colleagues? So, Um, we

728
00:38:27,239 --> 00:38:29,040
Speaker 1: decided many years ago we want to be the best

729
00:38:29,080 --> 00:38:30,680
Speaker 1: in the world at this We wanted to be a

730
00:38:30,719 --> 00:38:33,640
Speaker 1: solution that was everything for growth stage companies, above and

731
00:38:33,640 --> 00:38:36,320
Speaker 1: beyond that cheap receivable financing you can get from a bank.

732
00:38:36,680 --> 00:38:39,200
Speaker 1: We wanted to be the alternative lender of choice, and

733
00:38:39,280 --> 00:38:41,560
Speaker 1: access to the capital markets was key. We're a BBC.

734
00:38:41,719 --> 00:38:44,120
Speaker 1: We distribute out the majority or all of our earnings annually,

735
00:38:44,280 --> 00:38:47,520
Speaker 1: so we can't grow unless we can raise capital. And uh,

736
00:38:47,600 --> 00:38:49,640
Speaker 1: you know, recently we just got approved by the SEC

737
00:38:50,040 --> 00:38:52,440
Speaker 1: for our public companies. Is really interesting our public company

738
00:38:52,480 --> 00:38:54,880
Speaker 1: to manage an r I A where we can manage

739
00:38:54,920 --> 00:38:57,560
Speaker 1: additional funds off bouance sheet and it's owned by our

740
00:38:57,560 --> 00:39:00,000
Speaker 1: public company, so it gives us the ability to grow

741
00:39:00,239 --> 00:39:02,239
Speaker 1: on balance sheet when the public markets are open, and

742
00:39:02,280 --> 00:39:04,040
Speaker 1: it's the creative and it makes sense to investors, and

743
00:39:04,040 --> 00:39:06,680
Speaker 1: then we can raise money privately, all to the benefit

744
00:39:06,719 --> 00:39:09,600
Speaker 1: of our shareholders as well. So, um, you know, it's

745
00:39:09,600 --> 00:39:11,800
Speaker 1: gonna take a lot of capital to continue to build

746
00:39:11,880 --> 00:39:13,959
Speaker 1: and grow and become that one stop shop for growth

747
00:39:14,000 --> 00:39:17,120
Speaker 1: stage companies. But I think we've got the platform, uh,

748
00:39:17,160 --> 00:39:19,200
Speaker 1: and it's the opportunities right for us to be able

749
00:39:19,200 --> 00:39:21,799
Speaker 1: to do that. All right, good stuff. Appreciate getting the

750
00:39:21,800 --> 00:39:25,600
Speaker 1: low down. Kyle Brown, cee IO and president of Trinity Capital.

751
00:39:25,640 --> 00:39:29,200
Speaker 1: Again that is a public traded company on nastack. The

752
00:39:29,239 --> 00:39:32,520
Speaker 1: company rang the bell list Tuesday. Actually the tickers t

753
00:39:32,960 --> 00:39:37,960
Speaker 1: r I, N they all know how much Matt and

754
00:39:38,000 --> 00:39:41,279
Speaker 1: I love the big take stories in depth reporting, some

755
00:39:41,400 --> 00:39:45,200
Speaker 1: really cool topics in our reporters and editors. They go

756
00:39:45,440 --> 00:39:47,280
Speaker 1: deep and needed to bring you some really good stories.

757
00:39:47,320 --> 00:39:49,640
Speaker 1: It's so good, and we've got a podcast for the

758
00:39:49,680 --> 00:39:53,279
Speaker 1: Bloomberk Big Take, and it's hosted by West Kosova. West,

759
00:39:53,280 --> 00:39:55,880
Speaker 1: thanks so much for joining us share Westcasova, what do

760
00:39:55,920 --> 00:39:59,000
Speaker 1: you got for us here on your podcast? Coming up?

761
00:40:00,200 --> 00:40:03,920
Speaker 1: So today's episode is really interesting. It's about how Americans

762
00:40:03,960 --> 00:40:06,719
Speaker 1: are driving more. We're all getting back in our cars,

763
00:40:06,840 --> 00:40:11,160
Speaker 1: driving instead of flying, and yet we're using less gasoline

764
00:40:11,520 --> 00:40:16,920
Speaker 1: than ever before. So gasoline usage has not returned to

765
00:40:17,120 --> 00:40:21,200
Speaker 1: pre COVID levels. And so it's this indication that you know,

766
00:40:21,239 --> 00:40:23,800
Speaker 1: we've all talked forever about we're gonna reduce our depending

767
00:40:23,800 --> 00:40:27,239
Speaker 1: on gasoline, and it's actually starting to happen. Now gasoline

768
00:40:27,280 --> 00:40:30,279
Speaker 1: uses ticking downward even though we're using you know, our

769
00:40:30,320 --> 00:40:33,960
Speaker 1: cars even more. Yeah, I mean, I so I'm the

770
00:40:33,960 --> 00:40:35,920
Speaker 1: wrong person to talk to about this because I've never

771
00:40:36,000 --> 00:40:37,760
Speaker 1: had a car that gets more than like thirteen miles

772
00:40:37,719 --> 00:40:41,200
Speaker 1: a gallon but includes the Chevy Silverado with the thin

773
00:40:41,280 --> 00:40:43,480
Speaker 1: about like thirteen point six it's a six point two

774
00:40:43,560 --> 00:40:46,720
Speaker 1: lead V eight. But I've been test driving a Kia

775
00:40:46,800 --> 00:40:49,880
Speaker 1: e V six and electric vehicle over the last week

776
00:40:50,440 --> 00:40:53,480
Speaker 1: and it's like eye opening. I never even think about

777
00:40:53,480 --> 00:40:56,239
Speaker 1: a gas station. I would say five dollars a month

778
00:40:56,280 --> 00:40:59,520
Speaker 1: if I had an e v UM. Is this why

779
00:41:00,040 --> 00:41:02,200
Speaker 1: the figures are moving down, More people using the e vs,

780
00:41:02,280 --> 00:41:05,200
Speaker 1: more people uh driving cars that get you know, better

781
00:41:05,239 --> 00:41:08,439
Speaker 1: mileage than me. Yeah, you nailed both of them. Ev

782
00:41:08,719 --> 00:41:11,279
Speaker 1: use is um you know up you see it now

783
00:41:11,320 --> 00:41:13,239
Speaker 1: like it used to be. Oh, tesla is the whole thing,

784
00:41:13,520 --> 00:41:16,640
Speaker 1: and now everybody's getting into it. So that's going up.

785
00:41:16,680 --> 00:41:19,640
Speaker 1: Even though evs are only one percent of car sales,

786
00:41:19,880 --> 00:41:21,759
Speaker 1: it's going to start kind of picking up. The other

787
00:41:21,800 --> 00:41:25,120
Speaker 1: big thing is joining the Obama administration, they started putting

788
00:41:25,120 --> 00:41:29,360
Speaker 1: stricter you know, mileage standards, and they started in California

789
00:41:29,400 --> 00:41:32,440
Speaker 1: and then everybody else followed. And so the cars on

790
00:41:32,480 --> 00:41:34,400
Speaker 1: the fleet right now just kind of cars on the

791
00:41:34,480 --> 00:41:36,960
Speaker 1: road are more efficient than ever before. And those two

792
00:41:37,000 --> 00:41:40,360
Speaker 1: things largely are combining to just let us drive longer

793
00:41:40,400 --> 00:41:42,520
Speaker 1: with less gasoline. By the way, is that everything I

794
00:41:42,560 --> 00:41:48,320
Speaker 1: mean gasoline? I assume that the lion share of gasoline

795
00:41:48,400 --> 00:41:54,080
Speaker 1: usage globally is personal transportation vehicles. It's cars, and of

796
00:41:54,080 --> 00:41:55,759
Speaker 1: course it's a lot of delivery. And me think about

797
00:41:55,760 --> 00:41:58,439
Speaker 1: what happened during the pandemic. You know that so much

798
00:41:58,440 --> 00:42:01,080
Speaker 1: more delivery you have instead of text cabs, you have many,

799
00:42:01,120 --> 00:42:03,439
Speaker 1: many more ubers and lifts all over the place on

800
00:42:03,360 --> 00:42:05,399
Speaker 1: the road. So I mean you even think about that,

801
00:42:05,520 --> 00:42:08,560
Speaker 1: like all those miles piling up and gasoline used going down.

802
00:42:08,640 --> 00:42:11,080
Speaker 1: It really is this indication of kind of like what

803
00:42:11,120 --> 00:42:13,399
Speaker 1: the future holds. But I am seeing a lot of

804
00:42:13,440 --> 00:42:15,560
Speaker 1: the lot more. And I just noticed over the past

805
00:42:15,600 --> 00:42:19,560
Speaker 1: few weeks of the Amazon electronic vans delivering stuff, so

806
00:42:19,920 --> 00:42:23,000
Speaker 1: a lot of that fleet is switching to cleaner fuels too.

807
00:42:23,160 --> 00:42:25,399
Speaker 1: So all this stuff coming down the road, and part

808
00:42:25,440 --> 00:42:28,040
Speaker 1: of the podcast we talked about as well, Okay, so fine,

809
00:42:28,200 --> 00:42:29,880
Speaker 1: but does that mean gasoline is going away? And of

810
00:42:29,960 --> 00:42:31,680
Speaker 1: course the answer is no, And it's gonna be a

811
00:42:31,920 --> 00:42:36,680
Speaker 1: very slow, bumpy, kind of painful ride down because we

812
00:42:36,800 --> 00:42:39,800
Speaker 1: still have all of these refineries and everything in business

813
00:42:39,880 --> 00:42:42,480
Speaker 1: and trying to unwind that is going to be pretty

814
00:42:42,520 --> 00:42:45,400
Speaker 1: messy stuff. What does the future look I'm looking at

815
00:42:45,600 --> 00:42:48,319
Speaker 1: right now. I gotta buy a Dodge Challenger hell cap

816
00:42:48,400 --> 00:42:50,319
Speaker 1: before they stopped making them. This is the last year.

817
00:42:51,280 --> 00:42:54,239
Speaker 1: That's a very much gasoline. You have to you have to.

818
00:42:54,600 --> 00:42:57,840
Speaker 1: I want I want it desperately. But um, I'm worried

819
00:42:57,920 --> 00:43:00,719
Speaker 1: that at some point there won't be any as stations,

820
00:43:00,960 --> 00:43:03,800
Speaker 1: you know, or you know, it might not be legal

821
00:43:03,920 --> 00:43:07,040
Speaker 1: for me to drive a car that imbibes gasoline like that?

822
00:43:07,719 --> 00:43:11,680
Speaker 1: Is that, um a legit a valid concern? Wes I

823
00:43:11,719 --> 00:43:13,239
Speaker 1: think you're gonna be okay for as long as you're

824
00:43:13,280 --> 00:43:15,080
Speaker 1: gonna drive that car. I mean, I really that they're

825
00:43:15,120 --> 00:43:16,600
Speaker 1: going to say, okay, these cars are legal. Look what

826
00:43:16,680 --> 00:43:19,279
Speaker 1: happened when gasoline became unleaded. You know, you could still

827
00:43:19,360 --> 00:43:22,320
Speaker 1: drive your leaded gasoline car, but over a long period

828
00:43:22,360 --> 00:43:24,920
Speaker 1: of time, it finally became impossible to find leading gasoline.

829
00:43:25,040 --> 00:43:27,680
Speaker 1: Probably a similar thing like that. You've got plenty of

830
00:43:27,800 --> 00:43:30,279
Speaker 1: time to to get your phone out of that car.

831
00:43:31,000 --> 00:43:33,520
Speaker 1: So West, what are what are the what's the energy

832
00:43:33,760 --> 00:43:36,680
Speaker 1: complex the energy industry? What are they saying about kind

833
00:43:36,719 --> 00:43:40,279
Speaker 1: of the future of gasoline demand and maybe how they're

834
00:43:40,280 --> 00:43:43,520
Speaker 1: gonna adapt. Well, I mean they're already preparing for it now.

835
00:43:43,560 --> 00:43:45,399
Speaker 1: I mean they're looking at the future you're thinking about, okay,

836
00:43:45,520 --> 00:43:47,400
Speaker 1: so what sort of investment should we make. One of

837
00:43:47,440 --> 00:43:49,279
Speaker 1: the things we talked about on the podcast is how

838
00:43:49,480 --> 00:43:51,360
Speaker 1: Biden administration is saying, you know, hey, why don't you

839
00:43:51,360 --> 00:43:54,239
Speaker 1: guys build refineries? We need more. You're saying, well, you know,

840
00:43:54,360 --> 00:43:56,480
Speaker 1: looking down the road, is this gonna be viable? Costs

841
00:43:56,520 --> 00:43:58,600
Speaker 1: billions of dollars to build these things, and so they're

842
00:43:58,640 --> 00:44:01,000
Speaker 1: instead investing in another the things. You know, of course

843
00:44:01,080 --> 00:44:04,360
Speaker 1: there's um, there's these al and there's jet fuel, and

844
00:44:04,480 --> 00:44:07,320
Speaker 1: there's a lot of plastics you know, I'll derive from petroleum.

845
00:44:07,440 --> 00:44:10,680
Speaker 1: So there could be shifts to those more profitable things

846
00:44:10,800 --> 00:44:13,440
Speaker 1: as gasoline rides down, and so all of that is

847
00:44:13,480 --> 00:44:15,320
Speaker 1: going to kind of be this this big kind of

848
00:44:15,480 --> 00:44:19,120
Speaker 1: major change over from gasoline to other petroleum kind of products,

849
00:44:19,520 --> 00:44:24,680
Speaker 1: hopefully not plastics that's nasty. Um, what do you think

850
00:44:24,680 --> 00:44:29,120
Speaker 1: about E VS versus hydrogen? I guess it's not necessarily

851
00:44:29,160 --> 00:44:32,560
Speaker 1: an either or question, but um, what I'm asking is

852
00:44:32,680 --> 00:44:35,360
Speaker 1: are there going to be more alternative power sources to

853
00:44:35,440 --> 00:44:38,480
Speaker 1: rival gasoline? That's a really good question. I mean all

854
00:44:38,520 --> 00:44:40,160
Speaker 1: of it comes down to can you make money off

855
00:44:40,200 --> 00:44:42,600
Speaker 1: of it? I mean, just now we're starting to see that,

856
00:44:43,160 --> 00:44:46,200
Speaker 1: you know, battery powered cars can be profitable. That's why

857
00:44:46,200 --> 00:44:48,520
Speaker 1: everyone's getting into it. I don't know that anybody in

858
00:44:48,600 --> 00:44:51,960
Speaker 1: a serious way has invested in like hydrogen or sometimes

859
00:44:52,040 --> 00:44:55,320
Speaker 1: you see these cars run on you know, uh, you know,

860
00:44:55,480 --> 00:44:57,719
Speaker 1: waste material and this other kind of stuff. Becoming like

861
00:44:57,800 --> 00:44:59,840
Speaker 1: a really big thing. But I don't know, like you

862
00:45:00,800 --> 00:45:02,919
Speaker 1: only takes one person to do it, and suddenly there's

863
00:45:02,920 --> 00:45:06,160
Speaker 1: a market in our You mentioned California. I mean you

864
00:45:06,239 --> 00:45:09,080
Speaker 1: think of California and I just think it traffic jams.

865
00:45:09,239 --> 00:45:11,719
Speaker 1: I mean, you know, I mean, everybody drives. There's no

866
00:45:12,120 --> 00:45:17,000
Speaker 1: little to no mass transportation. You know this. I wont

867
00:45:17,000 --> 00:45:19,399
Speaker 1: if that's ever going to change. I mean, it doesn't

868
00:45:19,400 --> 00:45:22,840
Speaker 1: seem like mass transportation gets the support or the I

869
00:45:22,920 --> 00:45:27,000
Speaker 1: guess that nobody cares in America. So is that gonna

870
00:45:27,239 --> 00:45:29,719
Speaker 1: is that the future was? I don't know. I mean

871
00:45:29,800 --> 00:45:32,680
Speaker 1: they've always been talking about it and we've been terrible.

872
00:45:32,760 --> 00:45:36,640
Speaker 1: You look at Europe, you can get anywhere on mass transportation.

873
00:45:37,000 --> 00:45:39,520
Speaker 1: We did an episode of the podcast recently about how

874
00:45:39,640 --> 00:45:42,840
Speaker 1: cities like London are starting to charge a lot of

875
00:45:42,920 --> 00:45:45,479
Speaker 1: money to drive a gasoline powered car into the center

876
00:45:45,520 --> 00:45:47,920
Speaker 1: of the city, and so they're not just trying to

877
00:45:48,000 --> 00:45:50,879
Speaker 1: reduce the traffic, but trying to say you should buy

878
00:45:50,880 --> 00:45:52,560
Speaker 1: an e V because you can drive those in the

879
00:45:52,640 --> 00:45:54,960
Speaker 1: city without having to pay. So they're trying to change

880
00:45:55,080 --> 00:45:58,760
Speaker 1: people's behavior by making it painful to drive balloting cars.

881
00:45:59,360 --> 00:46:02,719
Speaker 1: So what's the bottom line for oil West. Um. You know,

882
00:46:03,120 --> 00:46:05,320
Speaker 1: we're looking at eighty dollars in change for bail of

883
00:46:05,400 --> 00:46:08,520
Speaker 1: West barrel of West Texas Intermediate, and some people are

884
00:46:08,600 --> 00:46:10,680
Speaker 1: saying the reopening of China and the lack of a

885
00:46:10,880 --> 00:46:14,600
Speaker 1: deep procession in Europe could drive that price even higher. UM.

886
00:46:15,040 --> 00:46:16,920
Speaker 1: I guess you're you're looking at you're taking a much

887
00:46:17,000 --> 00:46:21,239
Speaker 1: longer term view. Yeah, and that's actually a really interesting thing.

888
00:46:21,280 --> 00:46:23,880
Speaker 1: We get into it on the show today. UM, is

889
00:46:23,920 --> 00:46:26,640
Speaker 1: about how you think, oh, well, so you know, demand

890
00:46:26,719 --> 00:46:28,759
Speaker 1: for gasoline is gonna go lower, so maybe we're gonna

891
00:46:28,760 --> 00:46:30,640
Speaker 1: get some relief from these high gas prices. And the

892
00:46:30,680 --> 00:46:34,080
Speaker 1: answer is, yeah, that's gonna happen, um, But it's gonna

893
00:46:34,120 --> 00:46:36,520
Speaker 1: happen in the long term because in a medium term,

894
00:46:36,600 --> 00:46:39,120
Speaker 1: especially when these oil companies are trying to adjust to

895
00:46:39,239 --> 00:46:41,920
Speaker 1: a new future and trying to ride down as profitably

896
00:46:42,000 --> 00:46:44,600
Speaker 1: as possible, there could be price shocks, there could be

897
00:46:44,680 --> 00:46:48,600
Speaker 1: temporary shortages, um, all leading to you know, higher prices.

898
00:46:48,719 --> 00:46:51,399
Speaker 1: And you know, the three Bloomberg journalists on the show,

899
00:46:51,520 --> 00:46:56,200
Speaker 1: Lynn Dowan, John z Jou and Millie Munchi are just amazing.

900
00:46:56,640 --> 00:46:59,000
Speaker 1: They write about this thing about this all the time,

901
00:46:59,080 --> 00:47:01,400
Speaker 1: and they are really really interested in talking about it,

902
00:47:01,520 --> 00:47:03,600
Speaker 1: all right, that's great stuff. West Kasova. He's a host

903
00:47:03,680 --> 00:47:07,480
Speaker 1: of Bloomberg The Big Take podcasts in uh this week

904
00:47:07,520 --> 00:47:11,719
Speaker 1: to talk about Gasolene. Gasolene starts its long slow ride down.

905
00:47:11,840 --> 00:47:14,239
Speaker 1: That's the podcast. I don't know, Matt, I I kind

906
00:47:14,280 --> 00:47:18,800
Speaker 1: of always envisioned you in a internal combustion engine vehicle.

907
00:47:19,080 --> 00:47:21,640
Speaker 1: I well, yusting out with a beard. I just can't

908
00:47:21,640 --> 00:47:23,239
Speaker 1: see you going evy with the beard. I mean I

909
00:47:23,520 --> 00:47:27,200
Speaker 1: I I'm open to both. So variety is the spice

910
00:47:27,239 --> 00:47:29,239
Speaker 1: of life. There you go. And again that four D

911
00:47:29,280 --> 00:47:32,440
Speaker 1: F one fifty ev that I drove, that was awesome.

912
00:47:32,480 --> 00:47:34,920
Speaker 1: The lightning, Yeah, the lightning that kind of turned my

913
00:47:35,040 --> 00:47:39,040
Speaker 1: eyes a little bit. Thanks for listening to the Bloomberg

914
00:47:39,160 --> 00:47:42,520
Speaker 1: Markets podcast. You can subscribe and listen to interviews with

915
00:47:42,560 --> 00:47:47,400
Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller.

916
00:47:47,680 --> 00:47:51,920
Speaker 1: I'm on Twitter at Matt Miller. Put on ball Sweeney

917
00:47:51,920 --> 00:47:54,560
Speaker 1: I'm on Twitter at pt Sweeney. Before the podcast, you

918
00:47:54,600 --> 00:47:56,960
Speaker 1: can always catch us worldwide at Bloomberg Radio