Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: Search Bloomberg Clobal News, Well Affirm Clarina after Pay. You
Speaker 1: know the names and the big players when it comes
Speaker 1: to the buy now, pay later industry, also known as bnpls.
Speaker 1: They are the subject of this week's Bloomberg Business Week
Speaker 1: cover story. That magazine issue now on newstands. It's also
Speaker 1: online of Bloomberg dot com, slash business Week and on
Speaker 1: the Bloomberg terminal. A great group in the byeline as
Speaker 1: made to Prez, Evan Weinberger and Jenny Seraine, all chipping
Speaker 1: in on the story. As Made Press is Projects and
Speaker 1: Investigations reporter for Bloomberg News as May joins us on
Speaker 1: the phone from California. Joe well Bur is with us now.
Speaker 1: He's editor of Bloomberg Business Week. He's with us in
Speaker 1: the Bloomberg Interactive Broker Studio. So Joel, the concept of
Speaker 1: buy now, pay later, it really took off over the
Speaker 1: last couple of years. What could go wrong with, you know,
Speaker 1: buying something now but paying later. It sounds so good,
Speaker 1: like it's pretty good, just give it to me now.
Speaker 1: So so what really stood out here was how much
Speaker 1: we were all suddenly being indated with with sort of
Speaker 1: these offers, like you go to a checkout and it's
Speaker 1: sort of like, you know, do you want to pay
Speaker 1: in four easy payments? And we were sort of like,
Speaker 1: where did this come from? Like it is suddenly everywhere,
Speaker 1: and lo and behold. It really took off during the
Speaker 1: pandemic and we were all doomed scrolling and hoping consumption
Speaker 1: would bail us out of a pandemic and you know,
Speaker 1: or at least maybe feel better for a moment. And
Speaker 1: it turned out that this industry just boomed on it.
Speaker 1: But now we're seeing economic headwinds. Regulators have taken note,
Speaker 1: and lo and behold, old as. We'll talk with as
Speaker 1: may here. Uh, there's good old fashioned debt problems even
Speaker 1: when you're you know, supposedly paying and four for easy payments.
Speaker 1: So so as may As you kind of dove into
Speaker 1: this topic, the topic I'm curious. There's a real fundamental
Speaker 1: loophole that the by now pay later industry is built on,
Speaker 1: which was it's one thing if you pay in five payments,
Speaker 1: but it's another and four. Why why that distinction and
Speaker 1: why does it matter so much? Yeah, So this story
Speaker 1: really focuses on the pay and for a model in particular,
Speaker 1: and that's what really unites these companies, so Affirm after
Speaker 1: pay Learner. They all kind of do different stuff, but
Speaker 1: there their main product is paying for, or one of
Speaker 1: their main products is paying for and that's what they
Speaker 1: all do the same. And so the way that they're
Speaker 1: able to really change the consumer credit game was by
Speaker 1: bypassing consumer protection regulations. That explains one of the reasons
Speaker 1: why these two have just seemingly exploded overnight. And so
Speaker 1: if you take the Truth in Lending Act, for example,
Speaker 1: that's a landmark law and acted and it requires extensive
Speaker 1: disclosures for what are called unsecured consumer loans split into
Speaker 1: payments are five or more. The law doesn't touch pay
Speaker 1: in four because it's pay in four four payments. And
Speaker 1: so that's a really like, you know, that's a really
Speaker 1: easy way to understand some of the loopholes that they've
Speaker 1: been able to, um, you know, bypass and and take
Speaker 1: off as a result. Well, let's talk about taking off,
Speaker 1: Like how big have these companies become? Because right, the
Speaker 1: bigger also kind of sets up the problem that you know,
Speaker 1: that they could become a bigger problem down the road,
Speaker 1: especially as we talk about recession. Feels like on a
Speaker 1: daily basis, So how big has this industry become? Usage
Speaker 1: has increased, you know, over the past few years, usage
Speaker 1: increase every year. So consumers, you know, they're really making
Speaker 1: up a larger part of particularly e commerce spending. Um
Speaker 1: they're slowly creeping into brick and mortar, but it's really
Speaker 1: just e commerce. So we're looking at at like, you know,
Speaker 1: a few percent um two percentage points of consumer spending online,
Speaker 1: but obviously growing, you know, every single day. As far
Speaker 1: as valuations, I mean, if you look at Clarna, the
Speaker 1: value has dropped significantly recently, but it's still worth seven
Speaker 1: billion dollars after pay was sold to Block, the Digital
Speaker 1: Payments Company for twenty nine billion dollars. So these companies
Speaker 1: are are very big. They're making Hey, they're missing billionaires. Um.
Speaker 1: And as Joel said, though, you know, were we may
Speaker 1: we may see the party coming to an end or
Speaker 1: at least um, you know, getting a little bit less fun.
Speaker 1: And yeah, that happened. Um. You know that Clarina headline, Uh,
Speaker 1: you know when the valuation got got slashed recently was
Speaker 1: really interesting because it was sort of like if everything
Speaker 1: seemed like it was going great for this industry and
Speaker 1: then you saw that valuation gets last night, it was
Speaker 1: sort of like, wait, what so what what is what
Speaker 1: is your reporting bear out there? What like, what what's
Speaker 1: going on with the industry and why are valuations maybe
Speaker 1: continuous Suddenly there's I mean there's a number of reasons.
Speaker 1: So first of all, losses are up there, say being
Speaker 1: you know, more people obviously, you know, usage has increased,
Speaker 1: so they're having more customers. But also more customers are
Speaker 1: unable to pay back their loans. So investors obviously don't
Speaker 1: like that. Stocks are way down, you know, competition is increasing.
Speaker 1: Apple recently announced that it would get into the game
Speaker 1: with its version of paying for work called Apple Pay. Later,
Speaker 1: PayPal joined the crew a couple of years ago with
Speaker 1: its version of paying for You know, even big banks
Speaker 1: these days are looking at the n p L. It's
Speaker 1: less so pay and for and more so just like
Speaker 1: kind of old fashioned uh installment loans that they want
Speaker 1: to apply the b NPL name too, because it's such
Speaker 1: a hot name. Um But also we sawt you know,
Speaker 1: we looked at Consumer Financial Protection Bureau complaints their database,
Speaker 1: and complaints are mounting, and then of course regulation is
Speaker 1: likely coming. UMPP is now looking into this industry and
Speaker 1: trying to really figure out like what kind of consumer
Speaker 1: harm is happening, And we definitely found that there was
Speaker 1: absolutely consumer harm being happening. I mean, in part because
Speaker 1: it's just so easy to get these own you know,
Speaker 1: the credits, the old traditional credit system, you know, excludes
Speaker 1: people unfairly a lot of the times, but it also
Speaker 1: sometimes you know, prohibits people from being able to take
Speaker 1: on debt because they truly cannot you know, they truly
Speaker 1: cannot take on debt because they're not going to be
Speaker 1: able to pay it back. And this is a problem.
Speaker 1: You know, the b NFL industry often will give you
Speaker 1: a loan even if you can't qualify elsewhere. So you know,
Speaker 1: that's really the heart of a lot of the problems,
Speaker 1: as will you go through the business model here and
Speaker 1: how these companies make money because I've seen these checking
Speaker 1: out when I'm buying stuff online and they offer essentially
Speaker 1: zero percent interest if you paying for in some cases,
Speaker 1: So how do they how do they make money if
Speaker 1: they're they're not charging you for the ability to pay
Speaker 1: back over time exactly, you know, so so you usually
Speaker 1: paying for is always interest free. You can get hit
Speaker 1: with late fees, but primarily what b NFL companies do
Speaker 1: to make money is that they charge the merchant a
Speaker 1: percentage of whatever it is you're buying, and the merchant
Speaker 1: thinks that that's worth it because they you're more like
Speaker 1: to buy with these things, so you're there's less quote
Speaker 1: quote unquote cart abandonment. You're not going to walk away
Speaker 1: from your card. You're actually gonna go through with the purchase.
Speaker 1: And then also your cart is going to be bigger,
Speaker 1: You're gonna buy more stuff because you think you're human
Speaker 1: monkey or your monkey brain things that it's cheaper because
Speaker 1: you're only paying and fo you're praying and for payments
Speaker 1: not all, you know, not one big price tag at once.
Speaker 1: So primarily mergency and make up a big part of
Speaker 1: the of the revenue of across the board for these companies. Um.
Speaker 1: You also, you know they do with some Klarna and
Speaker 1: a firm for example, also have longer term interest loans
Speaker 1: that they offer until they make some interest off that.
Speaker 1: But this is kind of their main selling point. I mean,
Speaker 1: they really say the merchants are their primary customer. You know,
Speaker 1: we as shoppers think that we're getting the good deal,
Speaker 1: but really it's merchants that are their primary customer. Um.
Speaker 1: So that's really the and that's and that's also sorry.
Speaker 1: What what they say helps distinguish them from credit cards
Speaker 1: because it makes them better than credit cards because credit
Speaker 1: card companies, you know, they may are credit card issuers,
Speaker 1: they make a lot of money off of the invite
Speaker 1: and fees that they charge on people that don't play
Speaker 1: their bills on time. The other thing that's really fascinating
Speaker 1: that as Man goes into and you can read it
Speaker 1: on your own, is about how there's a whole shadow
Speaker 1: credit industry that's sprung up here too, all right, it's
Speaker 1: a great read. It's the cover story. Joe Weber as
Speaker 1: may depress. Thank you so much. This is Bloomberg. This
Speaker 1: is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes,
Speaker 1: Tim Stinovic on Bloomberg Radio. All right on the Bloomberg Today.
Speaker 1: An update on how funding plans from monkey poks are
Speaker 1: at risk because of an impasse on Capitol hillover additional
Speaker 1: aid for COVID nineteen meantime timp there are nearly thirty
Speaker 1: six d monkey pox cases across almost every state DC
Speaker 1: in Puerto Rico. Maybe it doesn't sound like a lot,
Speaker 1: but do you remember when COVID didn't sound like a
Speaker 1: lot either. I'm not saying apples to apples, no, not
Speaker 1: apples to apples. But at the same time, the World
Speaker 1: Health Organization, you know, make taking the extraordinary step over
Speaker 1: the weekend of declaring it an emergency. Let's get into
Speaker 1: it with Dr Tom Inglesby, director at Center for Health
Speaker 1: Security Think JOHNS. Hopkins at Bloomberg School of Public Health.
Speaker 1: Dr angles He joins us on the phone from Baltimore,
Speaker 1: the Bloomberg School of Public Health that is supported by
Speaker 1: Michael R. Bloomberg founder of Bloomberg GALP and Bloomberg Philanthropies.
Speaker 1: Dr Engels, be great to have you with us. I
Speaker 1: mentioned the extraordinary step of that we heard from the
Speaker 1: World Health Organization essentially for the second time in three years, declaring,
Speaker 1: you know, another global health emergency this time monkey poks.
Speaker 1: How should we be thinking about this, especially in the
Speaker 1: context of what we've learned about viruses over the last
Speaker 1: two and a half close to three years. Yeah, well,
Speaker 1: first of all, very good to be with you, Thanks
Speaker 1: for having me. Um. I think, Um, you're right to
Speaker 1: think about kind of the frequency with which we're seeing
Speaker 1: these new viruses and and uh, in the past, in
Speaker 1: between big events, I think we've kind of started to
Speaker 1: to think that they won't happen again. But I think
Speaker 1: we're really looking at kind of the new global normal.
Speaker 1: We will continue to have infectious disease crises in the world,
Speaker 1: and we just need to get prepared for them, have
Speaker 1: good stockpiles of medicine, be ready to react quickly. And
Speaker 1: I'm really happy that the World Health Organization declared a
Speaker 1: public health emergency because I think it helps focus the
Speaker 1: intention of countries and hopefully get more resources for the response.
Speaker 1: So it means, since we've learned so much over the
Speaker 1: last two two and a half years because of COVID,
Speaker 1: we're going to get the next pandemic or infectious disease crisis.
Speaker 1: We're gonna get it right. We're gonna be really well prepared. Right, Sorry,
Speaker 1: I can't stop laughing. Forgive me. I grew up in
Speaker 1: a large family with a lot of sarcasm. I think
Speaker 1: we are. It doesn't always feel like it, but we
Speaker 1: are building new capacities in the world. In the United States,
Speaker 1: we have this time around. We have a vaccine that's
Speaker 1: ready to go. We don't have nearly enough of it,
Speaker 1: but the vaccine was created some time ago, so as
Speaker 1: opposed to COVID vaccine, which took about a year to
Speaker 1: come online, we do have vaccine that's ready to go.
Speaker 1: We do have a medicine that works against this virus
Speaker 1: that's also ready to go. It's just a matter of
Speaker 1: getting it in the to the places that need it
Speaker 1: fast enough and getting it getting doctors and healthcare providers
Speaker 1: very aware of this illness so they can not to
Speaker 1: test for and know to get the vaccine and the
Speaker 1: treatment for people who need it. So forget, but and
Speaker 1: forgive me my sarcasm. But I can't tell you how
Speaker 1: many you know, Dr Englesby people have come up to me.
Speaker 1: They know what we do for a living. We we
Speaker 1: know we have incredible access to the likes of someone
Speaker 1: like yourself who are on the front lines and are
Speaker 1: hearing about it, seeing about it directly. Um people coming
Speaker 1: up to me, They're like, are you worried about this?
Speaker 1: And I don't know what the right answer is. Yeah,
Speaker 1: I mean, I think if you are in a high
Speaker 1: risk group, then I do think you should be worried
Speaker 1: about it. Right now, that high risk group is men
Speaker 1: who have sex with men, and uh so a lot
Speaker 1: of attention is now being focused on providing that community
Speaker 1: with information awareness, especially the healthcare providers who take care
Speaker 1: of that demographic. Making sure that they have access to
Speaker 1: vaccine is quickly as we get vaccine online. If you're
Speaker 1: not in that group, then I think it's it's reasonable
Speaker 1: to be paying attention to it, just to be tracking it.
Speaker 1: But it is not now posing a risk to the
Speaker 1: general population. It is possible that if we don't get
Speaker 1: control of it over time, that it could move into
Speaker 1: different groups of people in the United States, but this
Speaker 1: is not a disease that spreads like COVID or influence
Speaker 1: the person to person through the air. This requires very
Speaker 1: close contact, skin to skin contact or household contact between
Speaker 1: people are very close to each other. So it's never
Speaker 1: gonna be like what we experienced the COVID, but it's
Speaker 1: something to pay attention to get it right. It has
Speaker 1: in in past years when it was mostly in Africa,
Speaker 1: in a number of countries in Africa, it did have
Speaker 1: um some mortality associate with it, you know, single digit
Speaker 1: percentages between one per five. It is not does not
Speaker 1: appear to be killing people yet in the world. There
Speaker 1: have been a few cases of people die, but very
Speaker 1: very very small numbers. But it is causing very painful
Speaker 1: illness um for long painblell illness for for some of
Speaker 1: the people who've gotten it. So I really want to
Speaker 1: make sure that we do everything we can to contain
Speaker 1: it and end in the United States it doesn't become
Speaker 1: a problem that lasts and that's out there as as
Speaker 1: another thing that people have to were worried about. Can
Speaker 1: you be really quick ted seconds, Are we ready for
Speaker 1: the next COVID like pandemic as a society just quickly?
Speaker 1: We're not ready, but I think we are removing in
Speaker 1: positive directions. We just can't take our eye off the ball,
Speaker 1: all right, really appreciate it. Thank you so much. Dr
Speaker 1: Tom Inglesby. He's director of the Center for Health Security
Speaker 1: at the Johns Hopkins Bloomberg School of Public Health, of course,
Speaker 1: supported by Michael R. Bloomberg, founder of Bloomberg LP and
Speaker 1: Bloomberg Philanthropy. You're listening to Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well,
Speaker 1: this guy is not so friendly as Jeff Blue in
Speaker 1: Frontier battle to over buying Deep discounter Spirit Airlines. The
Speaker 1: battle is over, as you know, Jeff Blue clinching a
Speaker 1: deal one day after Spirit called off a plan merger
Speaker 1: with Frontier. Well, today, Barry Biffle, he's the president CEO
Speaker 1: Frontier Airlines, telling Bloomberg our own Katie Greifeld about walking
Speaker 1: away from that deal with Spirit but mm hinting it
Speaker 1: might not all be over. So I'm not gonna speculate.
Speaker 1: But look, we're always looking for ways to save more consumers, Mike, So,
Speaker 1: so I'm not gonna close the door, but let's let's
Speaker 1: let them, uh, you know, pursue their path and we'll
Speaker 1: see how it goes. Barry, Jeff Blues calling the doors,
Speaker 1: We'll see how it goes. That's what he said exactly.
Speaker 1: We'll time, we'll tell Well, uh, let's get to it
Speaker 1: with our own Blueberg Intelligence senior Aero Aerospace, Defense and
Speaker 1: Airlines analyst, George Ferguson. He's on the phone from New Jersey.
Speaker 1: George is so glad to have you back with him
Speaker 1: and myself. So are you surprised that it kind of
Speaker 1: went this way? And do you agree that maybe the
Speaker 1: door still might be open for Frontier? So not surprised
Speaker 1: that it went this way? Um, you know really, I
Speaker 1: think after we saw Jeff blue uh, you know up
Speaker 1: there proposed usls UM, I think if if Frontier had
Speaker 1: more to bring, they would have brought it, and we
Speaker 1: just didn't see him bring anything, I think, significantly more
Speaker 1: to the deal to try to win it. And so
Speaker 1: she seemed him, you know me that they were just
Speaker 1: trying to convince shareholders that in the long run it
Speaker 1: was better to put Speed together with Frontier. Um. But
Speaker 1: they again we weren't ready to bring cash and so um,
Speaker 1: so I wasn't surprised if it was interesting that they
Speaker 1: I think we never really finally got a vote yesterday
Speaker 1: or itally of a vote. Um. So it just tells
Speaker 1: me that the Cheryls just weren't going to be We're
Speaker 1: gonna be suede. I mean, there's definitely some discussion in
Speaker 1: the marketplace today that, Um, there are people that are
Speaker 1: worried that you know, the d O J you know
Speaker 1: and I trust wouldn't let this go through. I just
Speaker 1: I don't see it, like I don't see either of
Speaker 1: these airlines being so critical to the US UM, you know,
Speaker 1: travel business that they couldn't let them, you couldn't put
Speaker 1: them together. Just they're just not big enough. Um, will
Speaker 1: help us in the country and us George, help us
Speaker 1: understand sort of the test for regulators in a situation
Speaker 1: like this, because this is a highly regulated industry. So
Speaker 1: what does what what does Spirit and Jeff Blue? What
Speaker 1: do they have to prove to regulators in order for
Speaker 1: regulators to sign off on this? Okay, so I'm gonna
Speaker 1: I'm gonna punt on this one because I have a
Speaker 1: I have a colleague that spends all day long on
Speaker 1: the hearth and or whatever index, you know, they're used,
Speaker 1: and and I'm just gonna say, you know that they're
Speaker 1: gonna want to make sure that it doesn't mean that
Speaker 1: the industry is too concentrated and that consumer is going
Speaker 1: to pay a lot more for fairs. And so again
Speaker 1: I'm going to drop back on there four major airlines
Speaker 1: in front of the Southwest, American, United and Delta already
Speaker 1: right have a huge amount of the marketplace. Is not
Speaker 1: going to be a lot of the marketplace. There's already
Speaker 1: competitors underneath the combined to the last school be there, right,
Speaker 1: we'll have we'll have a growing frontier underneath there. And
Speaker 1: the group you you of this industry as airlines are
Speaker 1: always being born, um, you know, and so we've got
Speaker 1: Breeze and a Velo and you name it. So speaking
Speaker 1: of Blue right, yeah, And so I'm just having I
Speaker 1: have a hard time imagining someone saying there isn't enough
Speaker 1: competition in this industry, because there's a heck of a
Speaker 1: lot of companies in this industry always working to take
Speaker 1: fairs down on each other always. Yeah, I mean right,
Speaker 1: you know this the cycles of you know, tons of
Speaker 1: airline names and then we see consolidation and then we
Speaker 1: see more airline names, and then we see consolidation. Like right,
Speaker 1: you've seen this movie several times before. I don't know
Speaker 1: if it's harder to get into it now. I don't know.
Speaker 1: I'm even this quarter. If you think about it, the
Speaker 1: airlines are approaching levels of capacity and they're nowhere near
Speaker 1: that level of profitability. I mean Southwest did breach that today.
Speaker 1: That did a nice job. They said they see fair
Speaker 1: softening into three Q. They guided much lower than their
Speaker 1: twenty nineteen results. They aren't getting back all the increases
Speaker 1: in costs. It's a very competitive marketplace. George, before we
Speaker 1: let you go, help us understand what a confined Jet
Speaker 1: Blue Spirit would look like. It's going to be run
Speaker 1: by the CEO and just wants to know you're going
Speaker 1: to get mint on Spirit. Yeah, there's no way. I mean,
Speaker 1: how do they do this? These are different cultures. Yeah,
Speaker 1: so I think they will. I think it's absolutely going
Speaker 1: the Jet Blue direction. It'll be a kindler, gentler, low
Speaker 1: cost carrier. I think you will get mint on some uh,
Speaker 1: some of the routes right there, the routes you can
Speaker 1: get people to pay up for. It's it's they're gonna
Speaker 1: have to reconfigure all the Spirit airplanes, repaint them all
Speaker 1: and I think every you know, everyone to be sort
Speaker 1: of kindler and gentler and there and there and there
Speaker 1: we do those interiors, right, Yep, that's a bunch of
Speaker 1: money involved. Yeah, that we'll put out a piece of research.
Speaker 1: They put some numbers on that. Does it still just
Speaker 1: ten seconds? Still be? Is it still though? A discount?
Speaker 1: Deep discount airline? Don't know, not deep discount. I think
Speaker 1: a discount, but not a deep discount. Maybe called a funding.
Speaker 1: Very interesting day, well maybe then a little bit of
Speaker 1: a new strategy there for for Jet Blue. George Ferguson,
Speaker 1: we ran out of time. We wanted to talk a
Speaker 1: little bit about the air show in the UK, but
Speaker 1: we're gonna have to bring you back for that because
Speaker 1: I'm just curious about some of the major trends going forward.
Speaker 1: George Ferguson, He's senior Aerospace, Defense and Airlines analyst at
Speaker 1: Bloomberg Intelligence and must read on the Bloomberg when it
Speaker 1: comes to all things in this industry. Thank you so much.
Speaker 1: This is Bloomberg. I'm broom a journal Yeah, but you
Speaker 1: let me drive, no, no, no, who's please? I'll ride gravels.
Speaker 1: I want to drive. It's good question drive. This is
Speaker 1: good ride for the clobemular thing. Well up on Bloomberg
Speaker 1: Radio list. Indeed, everybody, we are just about nine minutes
Speaker 1: away from the closing bell on this Thursday. A lot
Speaker 1: going on, and we are seeing a rally underway another
Speaker 1: risk trade, building on the games that we got in
Speaker 1: yesterday's trade. I'm talking about the equity markets in particular.
Speaker 1: You heard Charlie talking about it. More than one percent
Speaker 1: gains on each of those major averages right now. Tim, Yeah,
Speaker 1: I wonder if this is a bear market rally like
Speaker 1: our guest yesterday said, or if you know it's here
Speaker 1: to stay. Let's take into the tech part of this
Speaker 1: with James chock Mark partner and technology Analystic Clockwise Capital.
Speaker 1: James joining us on the phone from Miami this afternoon. James,
Speaker 1: good to have you back with us. It's been a while.
Speaker 1: How are you. I'm well, pleasure to be with you. Well,
Speaker 1: let's talk tech because it's a sector that you watch
Speaker 1: really closely. Um, worst is it behind us? I mean,
Speaker 1: we've gotten some important tech earnings this week. We've learned
Speaker 1: a lot. Is the worst behind us when it comes
Speaker 1: to the sell off. Well, I think what you can
Speaker 1: gather from this week's earnings, especially looking at you know,
Speaker 1: the tech bell, whether it's like Microsoft and Google, is
Speaker 1: that the secular shifts that we're seeing on the digital
Speaker 1: and digital transformation side are far stronger than the macro
Speaker 1: pressures that we're seeing. And I think there's also seeing
Speaker 1: a bifurcation between the highest best of breed quality UM
Speaker 1: that can weather the storm, UM, the weather the macro storm,
Speaker 1: and the company and the companies that I have been
Speaker 1: having micro issues UM that benefited from COVID but now
Speaker 1: are having trouble gaining their footing once again. So, you know,
Speaker 1: we remain optimistic. Obviously the macro pictures something that no
Speaker 1: company is immune from, but at least gathering from the
Speaker 1: results that we've seen this week, there's certainly reason for optimism,
Speaker 1: especially given the valuation. Okay, so help us understand which
Speaker 1: companies you consider sort of the leaders here versus which
Speaker 1: ones can't handle this new macroeconomic environment. I want to
Speaker 1: start with meta platforms, which is just can't get a
Speaker 1: break when it comes to shareholders. UM. Is it is
Speaker 1: that one of the ones that's going to be left behind.
Speaker 1: I think as it stands right now, if we look
Speaker 1: at it in a vacuum in July, it looks like
Speaker 1: it will be I think there are structural issues, um
Speaker 1: that the company needs to overcome. Um. Not granted, the
Speaker 1: comps will get easier next year once they Anniverse three.
Speaker 1: The privacy changes bright Apple, but I think it's TVT
Speaker 1: and there are some bright spots which impressions growth and
Speaker 1: the team um ad impressions as why the AU number
Speaker 1: taken up slightly higher. Um. But at the end of
Speaker 1: the day, you know it's I think that's in the
Speaker 1: show new story camp stands right now. Yeah, I mean
Speaker 1: that's a big, potentially big shift in terms of their business,
Speaker 1: right and so who knows that story yet to be told?
Speaker 1: All right? When you look at some of the other names,
Speaker 1: I mean what we got from Microsoft was that kind
Speaker 1: of calming for you? Absolutely? UM. And I think at
Speaker 1: one point on Meta said, I think the lesson learned
Speaker 1: is anytime you have a company changed their name, you
Speaker 1: have to, uh, you have to take a second look
Speaker 1: at it. I mean we saw the same thing with
Speaker 1: Square changing the block, right, Yeah, what you start to Microsoft, Um,
Speaker 1: I think it was very incurrent. I think coming out
Speaker 1: of COVID. Some companies are worst positions. Some companies are
Speaker 1: UH positions with the via the status quo. Some companies
Speaker 1: are better position and I think Microsoft is definitely in
Speaker 1: the latter camp. The cloud services continue to drive a business.
Speaker 1: The adoption is there, and then you have new optionality
Speaker 1: like on initiatives such as on the gaming side. UM.
Speaker 1: So that's one that that we like and we own.
Speaker 1: What about I just want to ask about Google before
Speaker 1: we start looking forward Google? Also, how do you feel
Speaker 1: about that one? Google? We like it, we own it,
Speaker 1: not as much in size as some other companies, just
Speaker 1: given that advertising as discretionary as it is. You know,
Speaker 1: that's one of the first things that pulled back. But
Speaker 1: the reading the tea leaves there. UM, you can you can,
Speaker 1: I think, deduce that you know, this is a company
Speaker 1: with first party data on like a Facebook, UM that
Speaker 1: can weather the macro storm a little bit better than
Speaker 1: UM than others. And at the same time you're seeing
Speaker 1: the strength of their platform and and UH, I think
Speaker 1: that bright days are ahead for Google. UH in terms
Speaker 1: of you know which companies will perform better provide a
Speaker 1: better return over the next six months. I think there
Speaker 1: other other companies that will. But Google our threact away
Speaker 1: was certainly neutral deposits. All right, let's talk Amazon, because
Speaker 1: last time you're on with us, James, it was back
Speaker 1: in April you said that Amazon has more levers than
Speaker 1: any other make a cap out there as you said
Speaker 1: that you liked it as your opinion on Amazon change
Speaker 1: at all, And we get reminder, you know, just a
Speaker 1: few minutes we're gonna hear from the company on its
Speaker 1: latest report. Uh No, the opinion on the company hasn't changed.
Speaker 1: I think, you know, if we have to look back
Speaker 1: and about our positioning at that point, probably underappreciated the
Speaker 1: the Fed's influenced, you know, on the market. But structurally speaking, Um,
Speaker 1: the company is certainly um more sound than it's ever been.
Speaker 1: And I think you can argue that a lot of
Speaker 1: these companies, Amazon included, have come out of COVID, come
Speaker 1: out of managing the macro issues and managing the inflationary
Speaker 1: issues better than they would have otherwise. So I think
Speaker 1: the companies are stronger and more member, more agile results
Speaker 1: of this. And I think for the quarter, you know,
Speaker 1: we've seen retail results, you know, mixed bag there, but
Speaker 1: you know, top line possibly, you know, under pressure because
Speaker 1: of the macrobe and the bottom line. They're working through
Speaker 1: the costuges. But as we look forward into three Q
Speaker 1: in the back after this year, I think that's where
Speaker 1: you're gonna see the leverage that we talked about last time,
Speaker 1: uh comes to fruition. So we remain very bullish on
Speaker 1: Amazon and it remains our largest position. Yeah. I think
Speaker 1: about whether there's an Apple or Amazon, how much they
Speaker 1: are entrenched in my world personally. Um, and when I
Speaker 1: go to buy something, how quickly I go to Amazon
Speaker 1: because I kind of know and I just for the
Speaker 1: first time actually went to a locker had something delivered,
Speaker 1: and it was like such a great positive experience. Great news.
Speaker 1: You're gonna get to go to dr Amazon soon. I
Speaker 1: don't know about that. Um Hey, James, real quickly? Uh
Speaker 1: ten seconds if Amazon comes in week, is at a
Speaker 1: buying opportunity very quickly? Please? Yes? I mean in short, yes, absolutely? Uh,
Speaker 1: you know I know you can be quick. Thank you
Speaker 1: so much. We love talking. We still like ten extra
Speaker 1: seconds for you to jameson so we don't actually gotta run.
Speaker 1: James Shock he's partner and tech analyst over at Clockwise Capital,
Speaker 1: joining us on the phone from Miami. Thanks for listening
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