WEBVTT - GameStop Investor on 'Good Guy vs Bad Guy' Trading Face-Off 0:00:01.400 --> 0:00:04.160 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.160 --> 0:00:06.240 with my co host of Bonnie Quinn. Every business day 0:00:06.280 --> 0:00:10.400 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.440 --> 0:00:13.640 along with essential market moving news. Find the Bloomberg Markets 0:00:13.640 --> 0:00:17.040 Podcast on Apple podcast or wherever you listen to podcasts, 0:00:17.040 --> 0:00:20.000 and on Bloomberg dot com. Now, I want to get 0:00:20.040 --> 0:00:22.480 to somebody who knows I'm no aful lot about game Stop. 0:00:22.560 --> 0:00:25.400 He's been involved with the company for a decade. He's 0:00:25.440 --> 0:00:29.639 portfolio manager at Permit Capital and his name is John Broderick. So, John, 0:00:30.160 --> 0:00:33.000 thanks for joining. I have to ask you if you 0:00:33.040 --> 0:00:35.680 can give us any details that you can about you know, 0:00:36.000 --> 0:00:38.600 how you own game Stop and what you own right now. 0:00:39.920 --> 0:00:42.120 I'm sure I can't really go into the details of 0:00:42.159 --> 0:00:45.760 what we own right now. We reduce our position somewhat 0:00:46.240 --> 0:00:50.760 given the meteoric rise of stock. UM but we UM 0:00:50.800 --> 0:00:53.160 and I'll just I'll just leave it there. UM. But 0:00:53.440 --> 0:00:55.640 you know, we got involved with the stocks ten years 0:00:55.640 --> 0:00:58.720 ago because it was just just this amazing UM it 0:00:58.800 --> 0:01:02.400 had this amazing business where they were engaging with UM 0:01:02.440 --> 0:01:06.400 this very dedicated group of customers. The power of rewards 0:01:06.400 --> 0:01:09.720 customers and it was a very efficient business model that 0:01:09.959 --> 0:01:13.640 that fell on hard times with digital disintermediation, a lot 0:01:13.680 --> 0:01:17.120 of turnover in C suite. UM. But we believe, we 0:01:17.200 --> 0:01:19.880 believe in the company, and we stuck with it. UM. 0:01:19.920 --> 0:01:23.720 In fact, we we I partnered with Kurt Wolf that 0:01:23.800 --> 0:01:26.000 has to be a capital uh this time last year, 0:01:26.000 --> 0:01:29.160 and we ran a proxy campaign successfully and got ten 0:01:29.160 --> 0:01:32.720 new board members, including Kurt Um onto the board. And 0:01:32.760 --> 0:01:35.039 I think that that, UM my sense is that that 0:01:35.080 --> 0:01:37.920 caught the attention of other people and special to retail, 0:01:38.480 --> 0:01:43.280 particularly Ryan Cohen, who UM you know it understands a 0:01:43.280 --> 0:01:46.360 lot about specialty retail, at least on in the online domain. 0:01:46.920 --> 0:01:50.680 And UM, it's just we we've never looked back from there. 0:01:51.600 --> 0:01:56.480 So game Stop is a trading halted. Uh. Once again here, John, Look, 0:01:56.520 --> 0:01:58.080 can you tell us I'm not sure if you've if 0:01:58.080 --> 0:01:59.640 you've been in touch with anybody at the company over 0:01:59.680 --> 0:02:02.880 the last level days. What are they thinking, uh in 0:02:03.000 --> 0:02:04.840 terms of what's going on in the marketplace. I have 0:02:04.920 --> 0:02:08.680 no idea. I have no idea. My my sense is 0:02:08.720 --> 0:02:12.200 that they're talking. I would have to imagine that there's 0:02:12.200 --> 0:02:15.639 been a lot of internal discussion about this. UM. Uh. 0:02:15.680 --> 0:02:18.920 You know about the situation, UM, but I have no 0:02:19.040 --> 0:02:21.800 I have no idea. I I what the what the 0:02:21.800 --> 0:02:25.040 company UM's planning to do, what they might do? I 0:02:25.080 --> 0:02:27.200 just have no idea. I think they're about to were 0:02:27.200 --> 0:02:29.000 about to close the quarters. So they are in a 0:02:29.040 --> 0:02:32.160 blackout period and they will be UM for another couple 0:02:32.160 --> 0:02:34.600 of weeks. UM. But you know, certainly with the move 0:02:34.680 --> 0:02:36.080 in the stock, I'm sure there are a lot of 0:02:36.080 --> 0:02:40.040 people inside game stop talking about what they you know, 0:02:40.040 --> 0:02:44.160 what they can you know, what they can do UM strategically, John, 0:02:44.200 --> 0:02:46.280 I have to ask you what you make of this movement? So, 0:02:46.960 --> 0:02:49.400 I mean literally more than three million members of this 0:02:49.400 --> 0:02:52.800 Wall Street Beth subreddit now, and the kind of language 0:02:52.800 --> 0:02:56.520 on here is so I mean, it's it's deserves studying 0:02:56.560 --> 0:02:59.040 in itself. It's that rhetoric that we've been getting used 0:02:59.080 --> 0:03:02.480 to about, you know, the think going to the moon 0:03:02.600 --> 0:03:05.200 and the rocket emojis and so on, and you know, 0:03:05.280 --> 0:03:06.840 take all the cash you can afford to lose and 0:03:06.880 --> 0:03:10.160 bye bye bye. Is this something that should ever be 0:03:10.200 --> 0:03:16.000 associated with a stock? UM? I don't know. UM, I 0:03:16.040 --> 0:03:18.600 guess I guess I would say why not? Uh, you know, 0:03:18.680 --> 0:03:20.799 it's a it's a it's a free market, and it's 0:03:20.800 --> 0:03:24.280 a free wold and um, you know, as long as 0:03:24.280 --> 0:03:27.920 the people in those chat rooms are are not you know, 0:03:28.600 --> 0:03:32.600 telling lies or you know, or disclosing material not public information. 0:03:33.120 --> 0:03:35.360 I just don't see how that's an issue. People are 0:03:35.360 --> 0:03:38.320 free to talk about investing ideas, you know, I think 0:03:38.360 --> 0:03:41.800 that there is something there's always you know, you want 0:03:41.840 --> 0:03:43.480 speech to be free, but you also want to speech 0:03:43.480 --> 0:03:46.480 to be responsible. And I'm not I'm not that familiar 0:03:46.520 --> 0:03:48.600 with small street sets, but what I have seen is 0:03:48.960 --> 0:03:52.920 it's really just a lat of um um recycling of 0:03:52.960 --> 0:03:55.560 the same you know, of the same emojis, you know, 0:03:55.560 --> 0:03:58.720 the rocket to the moon and and uh diamond pans 0:03:59.040 --> 0:04:02.360 and and so on. And I think that the I think, 0:04:02.360 --> 0:04:06.720 what what what these amateur investors have have sniffed out 0:04:07.320 --> 0:04:11.800 is how vulnerable um the short the short sellers are here. 0:04:11.840 --> 0:04:15.600 There's a short interest based on the most recent AS 0:04:15.680 --> 0:04:17.760 three data that I thought, maybe it's a little bit higher. 0:04:18.400 --> 0:04:21.960 I don't know how that resolved. Yeah, I just want 0:04:22.000 --> 0:04:23.400 to follow up if I can, Paul, I hope you 0:04:23.440 --> 0:04:27.640 don't mind. Um, how are they sticking it to the man? 0:04:28.000 --> 0:04:30.919 If there's pushing the stock higher, they're only sticking to 0:04:31.000 --> 0:04:33.640 the short sellers, John, I, I don't understand how they 0:04:33.640 --> 0:04:37.719 think they're getting the better of the institutional money that 0:04:37.800 --> 0:04:39.960 are in some of these stocks. And we're talking about 0:04:40.040 --> 0:04:43.880 the major institutions like black Rock and Vanguard. They're happy 0:04:44.120 --> 0:04:47.839 out with this movement. That's a fair point, you know, 0:04:47.839 --> 0:04:50.880 it's a fair point that you know, if they're if 0:04:50.920 --> 0:04:53.559 they're sticking it to um, you know, a large hedge 0:04:53.560 --> 0:04:56.560 fund that has a big short position, or is Wong 0:04:56.640 --> 0:05:00.520 Poots or something, certainly, you know they might be hurting them, 0:05:00.560 --> 0:05:04.960 but creating an enormous opportunity and and windfall for other 0:05:05.480 --> 0:05:09.919 long oriented institutional holders. UM I would I would say 0:05:09.960 --> 0:05:13.279 to that that, uh, you know they I think the 0:05:13.360 --> 0:05:15.680 narrative here is just it's sort of the us against 0:05:15.760 --> 0:05:18.000 them narrative. It's the dark side and the light side. 0:05:18.240 --> 0:05:20.880 It's a it's a and it's it's you know where 0:05:21.640 --> 0:05:24.440 Ryan Cohen is. They're kind of hero. Um. There's a 0:05:24.440 --> 0:05:26.880 guy named d F D. I'll just leave it at that, 0:05:27.800 --> 0:05:30.560 UM who's also kind of a folk hero. And it's 0:05:30.640 --> 0:05:33.040 them versus the sort of big guys on Wall Street, 0:05:33.920 --> 0:05:36.240 whether those big guys right, the big guys on Wall 0:05:36.240 --> 0:05:38.560 Street quote unquote or not a monolithic group. It's a 0:05:38.640 --> 0:05:41.520 very diverse group of people. But UM, they just that's 0:05:41.600 --> 0:05:44.520 kind of a simple narrative. And whether or not it's 0:05:44.520 --> 0:05:47.080 whether or not what in fact they're doing is really 0:05:47.080 --> 0:05:50.320 sticking it to the man, as you say, I uh, 0:05:50.400 --> 0:05:51.920 you know, I don't think they see it that way. 0:05:51.960 --> 0:05:54.440 They just say, okay, if we can, um, you know, 0:05:54.720 --> 0:05:57.320 take a you know, a hedge fund to its knees. 0:05:57.440 --> 0:06:00.400 That that's that's good enough for them. All right, John, 0:06:00.680 --> 0:06:04.200 you've been a shareholder in this company, UM, what can 0:06:04.240 --> 0:06:09.320 you tell us about the business? What's the investment thesis here? Yeah? 0:06:09.400 --> 0:06:12.520 I mean this is a company that UM, you know, 0:06:12.640 --> 0:06:15.080 if you if you if you turn back five years 0:06:15.120 --> 0:06:17.400 when um, maybe even longer than that. Now with Paul 0:06:17.520 --> 0:06:19.920 Rains a CEO, is a company that was performing really 0:06:19.920 --> 0:06:23.280 really well. The returns on invested capital far keep that 0:06:23.440 --> 0:06:27.640 of the other UM of the other specialty retailers out there. 0:06:28.040 --> 0:06:29.680 And they again they just fell on hard times. They 0:06:29.680 --> 0:06:32.120 had a lot of turnover in the CEO suite. UM 0:06:32.240 --> 0:06:35.440 Digital disti amreiation really hurt, the length of the console 0:06:35.520 --> 0:06:39.919 cycle really hurt. And the UM the the there is 0:06:40.040 --> 0:06:43.400 just the company just fell on hard times. UM. But 0:06:44.160 --> 0:06:46.520 when you when you when you think about this category, 0:06:46.640 --> 0:06:49.280 how big the video game industry is, and what kind 0:06:49.279 --> 0:06:51.440 of role they can play in it. There's a big, 0:06:51.480 --> 0:06:53.560 big opportunity here. I don't know if they're going to 0:06:53.600 --> 0:06:56.680 be able to capitalize that. I don't think anybody knows, UM, 0:06:56.720 --> 0:06:59.000 but there is a big opportunity where you already have 0:06:59.160 --> 0:07:03.680 four millions dedicated power up rewards members to UM. You know, 0:07:03.720 --> 0:07:05.560 if you can figure out a way to re engage 0:07:05.640 --> 0:07:09.920 that customer, you can figure out a way to uh 0:07:10.040 --> 0:07:12.679 to to just excite I think that's Ryan Cohen's wards 0:07:12.720 --> 0:07:16.400 more in his UH in his letter to the shareholders. 0:07:16.400 --> 0:07:17.920 If you can figure out a way to excite these 0:07:18.280 --> 0:07:21.720 these members, you know, there's a lot of uh you know, 0:07:21.720 --> 0:07:24.640 there's there's a lot of revenue potential there. What would 0:07:24.640 --> 0:07:26.480 you say to the leadership now of game Stop? What 0:07:26.520 --> 0:07:29.640 should they do with all of this extra cash? Presumably 0:07:29.800 --> 0:07:31.520 they should be very very afraid that it will all 0:07:31.560 --> 0:07:34.200 go away very quickly and that the stock might drop. 0:07:34.320 --> 0:07:36.160 Don't don't know that that would happen, but it's a 0:07:36.480 --> 0:07:41.080 sure possibility. What should they do today and tomorrow? You 0:07:41.120 --> 0:07:43.680 know they're look pretty deposition is actually pretty good. So 0:07:43.720 --> 0:07:46.280 I don't think that they need could necessarily issue stock 0:07:46.800 --> 0:07:50.560 um and uh, I think that they should just sort 0:07:50.560 --> 0:07:53.560 of keep doing what they're is distracting as this is. 0:07:53.840 --> 0:07:56.360 You know, I think I've got a hundred million dollar 0:07:56.480 --> 0:08:00.960 at the money UM shelf registration done. You know, maybe 0:08:00.960 --> 0:08:03.120 they raised some equity here. I don't know, they don't 0:08:03.160 --> 0:08:05.720 really need the money. They they they're liquidity again, it's 0:08:05.760 --> 0:08:08.880 pretty good. Um, if there is an opportunity, maybe they 0:08:08.960 --> 0:08:12.440 see an opportunity here to raise some more capital to 0:08:12.440 --> 0:08:16.760 to uh just finance some of those uh those growth initiatives. 0:08:16.760 --> 0:08:19.040 But I just described you know, I don't know how 0:08:19.080 --> 0:08:24.240 capital intensive they're uh they're initiatives might be, but you know, 0:08:24.640 --> 0:08:26.480 it might make sense at these levels to do that. 0:08:26.960 --> 0:08:29.360 And and frankly, you know, the stock is so elevated. 0:08:29.640 --> 0:08:31.600 You know, let's say that they issued I'm gonna throwing 0:08:31.640 --> 0:08:34.640 this number out there. If they issued half a million shares, okay, 0:08:34.640 --> 0:08:36.280 and they're raised, I don't know where the stock is 0:08:36.320 --> 0:08:38.720 now A hundred three hundred thirty dollars. If a hundred 0:08:38.840 --> 0:08:42.640 million dollars of capital, who can't fifty five minutes down 0:08:42.679 --> 0:08:45.560 in the chair, and you know that's not really not 0:08:45.600 --> 0:08:49.000 even a surrounding her. As a former banker, that would 0:08:49.000 --> 0:08:53.040 be my advice. John Broderick, Portfolio managed for Permit Capital. 0:08:53.080 --> 0:08:57.079 Thanks so much for joining us. We appreciate that. We 0:08:57.160 --> 0:08:59.600 want to continue this conversation now with two more people 0:08:59.640 --> 0:09:01.440 who know a lot about what's going on. We have 0:09:01.480 --> 0:09:04.200 Jim Anderson, the CEO of Social Flow on the phone 0:09:04.200 --> 0:09:06.439 with us. Sara Phonts like in studio, she's Bloomberg a 0:09:06.440 --> 0:09:09.040 cross us a reporter. Sarah, let me quickly get to 0:09:09.080 --> 0:09:11.480 you because give us an update. We've had a clamp 0:09:11.520 --> 0:09:13.720 down from the brokerages and a lot of these stocks. 0:09:13.800 --> 0:09:16.320 Right now, where do we stand right? We have so 0:09:16.440 --> 0:09:20.240 from robin Hood. We've heard from another app called Trading 0:09:20.280 --> 0:09:23.680 to one two also Interactive Brokers. So where we stand 0:09:23.720 --> 0:09:26.840 now is that it seems as though robin Hood has 0:09:26.920 --> 0:09:30.040 actually made it as though no new shares of a 0:09:30.080 --> 0:09:32.640 couple of stocks can can be purchased. So game stop 0:09:32.800 --> 0:09:38.600 AMC no kia Over at Interactive Brokers, they made some 0:09:38.880 --> 0:09:42.640 changes to their margin requirements and they also made it 0:09:43.080 --> 0:09:47.480 so that no new options positions can actually be opened 0:09:47.520 --> 0:09:49.400 in some of these stocks as well, and that also 0:09:49.440 --> 0:09:52.680 includes BlackBerry, the likes of Trading Too one two for example, 0:09:53.080 --> 0:09:55.480 they seem to be saying that they're no longer taking 0:09:55.559 --> 0:09:58.679 new users because they're just inundated with volume at the time. 0:09:59.040 --> 0:10:02.280 And it's just been back and forth really for the 0:10:02.320 --> 0:10:06.520 past twenty four hours. But yesterday evening after markets closed 0:10:06.520 --> 0:10:09.280 after four pm, for a short period of time, we 0:10:09.320 --> 0:10:11.920 saw a reddit go private, then we saw Shar's fall. 0:10:12.000 --> 0:10:13.760 They came back public. But now this is weighing on 0:10:13.800 --> 0:10:16.680 the stairs too. Jim, I want to bring you in, Jamanderson, 0:10:16.720 --> 0:10:18.960 CEO of so Social Flow, Jim, give us a sense. 0:10:19.040 --> 0:10:21.760 I mean, what's different about this from my perspective. I've 0:10:21.800 --> 0:10:24.320 been in this stocks game for thirty years and people 0:10:24.360 --> 0:10:27.240 always trying to squeeze shorts. But what's different this time 0:10:27.640 --> 0:10:30.880 is social media and how that's leveraging the voices here. 0:10:30.880 --> 0:10:34.400 What are you seeing? Yeah, exactly, I think you know this. 0:10:34.400 --> 0:10:35.959 This has some of the hallmarks of a pump and 0:10:36.040 --> 0:10:37.760 dump scheme. I know you've been talking about that, and 0:10:38.080 --> 0:10:40.280 that's obviously a concern, but it sort of meets the 0:10:40.280 --> 0:10:42.959 emotion of a mega rally, right. That's what difference is 0:10:43.040 --> 0:10:46.040 time is the social media is the mechanism by which 0:10:46.080 --> 0:10:48.360 is being amplified. But it's it's not clear if the 0:10:48.440 --> 0:10:51.559 greater joy is coming from actually making money, but from 0:10:51.559 --> 0:10:53.720 sticking it to the hedge fund in the long street types. 0:10:53.760 --> 0:10:56.880 And that's pretty remarkable. Yeah, But as I keep saying, Sarah, 0:10:56.960 --> 0:10:59.280 you know, they're only sticking it to the short hedge funds. 0:10:59.280 --> 0:11:01.400 They're not sticking to the long hedge ones of anything. 0:11:01.440 --> 0:11:04.680 They're helping them out, you would think so. But something 0:11:04.720 --> 0:11:06.599 that has been interesting lately is if there's an E 0:11:06.679 --> 0:11:08.920 t F that's g v I P GO and it 0:11:08.920 --> 0:11:12.560 actually tracts hedge fund long positions too. And while today 0:11:12.760 --> 0:11:15.360 it's having a bounce back up about three percent or so, 0:11:15.360 --> 0:11:19.080 so outpacing the market, the SMP, for example, is up 0:11:19.120 --> 0:11:20.920 a lesser. I'm trying to pull it up right now, 0:11:20.960 --> 0:11:22.959 one and a half percentum. But if you look for 0:11:23.040 --> 0:11:24.720 the past couple of days, there's been talk of some 0:11:24.760 --> 0:11:26.640 of these hedge funds having to de gross and what 0:11:26.760 --> 0:11:30.040 that's done is weighed unpopular long hedge fund positions as well. 0:11:30.320 --> 0:11:32.439 Before today we had seen this g v I P 0:11:32.640 --> 0:11:35.640 E t F down five straight days. Yesterday was down 0:11:35.640 --> 0:11:39.800 four point three percent. Meanwhile, your most shorted basket was 0:11:39.920 --> 0:11:43.040 up nine percent. So you see others being pulled into 0:11:43.080 --> 0:11:44.960 it too. And yes, they might mostly be sticking it 0:11:45.000 --> 0:11:48.600 to Melvin Capital, to Andrew Left, to Citron, for example, 0:11:48.840 --> 0:11:50.719 But the way they view it, it it seems, especially when 0:11:50.720 --> 0:11:52.360 you look at these message boards and you read the 0:11:52.360 --> 0:11:54.360 way that they speak, they see it as a a 0:11:54.440 --> 0:11:57.960 larger entity. They see it as a larger establishment, and 0:11:58.040 --> 0:12:01.400 they say that if they can be successful and they 0:12:01.480 --> 0:12:05.760 can prove that they can move markets and get a 0:12:05.800 --> 0:12:08.640 group of people together and make a lot of money 0:12:08.679 --> 0:12:10.440 on on the behalf of some of them, then then 0:12:10.480 --> 0:12:13.680 they're sticking it to the man. So yeah, it's interesting. 0:12:13.720 --> 0:12:17.240 And Jim, you know, I've seen from some Wall Streets strategists, 0:12:17.240 --> 0:12:19.800 you know, lists of stocks that have a lot of 0:12:20.040 --> 0:12:22.240 short interest. I mean, is your expectation as you take 0:12:22.280 --> 0:12:24.560 a look at what's happening on social media, is this 0:12:24.640 --> 0:12:26.480 something that's a flash in the pan or do you 0:12:26.480 --> 0:12:28.360 think this might be with us for a while, this 0:12:28.440 --> 0:12:31.120 type of trading. You know, my expectation, this is gonna 0:12:31.120 --> 0:12:33.800 be with us for a while. Again, the emotion is law, right, 0:12:33.840 --> 0:12:35.960 I mean, look at where we are politically and what's 0:12:36.000 --> 0:12:37.679 going on in the world of politics, and I think 0:12:37.679 --> 0:12:40.800 this is just the financial manifestation of that. So to say, oh, 0:12:40.840 --> 0:12:42.480 it's just a flash on the plant pan and it's 0:12:42.480 --> 0:12:45.679 going to go away maybe not supported by people's emotion. 0:12:46.000 --> 0:12:47.880 But the other thing I'll add is, you know, we 0:12:47.880 --> 0:12:49.880 we typically look at big tech, right, look at the 0:12:49.880 --> 0:12:52.760 facebooks and the twitters and YouTube and by Google, et cetera. 0:12:52.840 --> 0:12:54.800 But look at the names that we're talking about. Those 0:12:54.840 --> 0:12:57.439 are there, But really this is read it and Discord 0:12:57.600 --> 0:13:00.760 and the stock trading app robin Hood. You know, this 0:13:00.840 --> 0:13:02.960 is not just a big tech story. There's lots of 0:13:03.040 --> 0:13:05.640 smaller tech involved as well. And I think that the 0:13:05.760 --> 0:13:07.920 morphing and evolving of this to not just be a 0:13:07.920 --> 0:13:10.320 big tech story is another piece that we need to follow. 0:13:11.040 --> 0:13:14.920 Sarah mc is down the moment. I'm just curious, is 0:13:14.960 --> 0:13:17.440 this because of the rules that the brokerage is put 0:13:17.440 --> 0:13:19.560 in place? And are we going to see a return 0:13:19.640 --> 0:13:22.840 to some kind of normality because runaters are not happy 0:13:22.840 --> 0:13:25.199 about this. They're not happy about not being able to 0:13:25.240 --> 0:13:27.600 take on the free market in all its glory. They're 0:13:27.600 --> 0:13:29.360 not happy about it at all. And it does seem 0:13:29.360 --> 0:13:31.680 to be the case earlier today. So for example, game 0:13:31.679 --> 0:13:35.040 Stop is currently down. You mentioned a MC currently down. 0:13:36.120 --> 0:13:38.480 They were just halted due to a volatility halt and 0:13:38.520 --> 0:13:41.240 they just became unhlted and are moving once again. But yeah, 0:13:41.280 --> 0:13:43.240 when you looked at the news coming out this morning, 0:13:43.240 --> 0:13:45.240 the first to really cross the tape was from Robin 0:13:45.320 --> 0:13:48.199 Hood that customers were saying that they were facing restrictions 0:13:48.240 --> 0:13:51.640 on buying some of these stocks. And you immediately, I mean, 0:13:51.679 --> 0:13:54.040 I mean immediately you looked at Game Stop and it 0:13:54.080 --> 0:13:58.200 turned negative after trading above five dollars a share just 0:13:58.360 --> 0:14:01.800 within a few minutes. So does seem to be where 0:14:01.840 --> 0:14:04.720 this is stemming from today? All right, both of you, 0:14:04.800 --> 0:14:07.520 thank you so much for your insights. We continue to 0:14:07.520 --> 0:14:11.560 follow this story all day. Obviously, the regulators and you know, 0:14:11.760 --> 0:14:14.199 agencies like the FED aren't or can't do anything much 0:14:14.200 --> 0:14:16.839 about this yet. But the brokerages are taking matters into 0:14:16.880 --> 0:14:19.200 their own hands. Will see how the likes of the 0:14:19.240 --> 0:14:22.800 Reggit traders respond to that throughout the Dame that is 0:14:22.880 --> 0:14:25.440 Jim Anderson of Social Flow and of course our own 0:14:25.440 --> 0:14:28.920 Saraponza across as a reporter here at Bloomberg. And once 0:14:28.960 --> 0:14:32.240 again a MC is down. But don't forget it did 0:14:32.320 --> 0:14:35.240 have that more than runoff the other day, so it 0:14:35.280 --> 0:14:38.080 has plenty of room to spare. And in terms of 0:14:38.080 --> 0:14:40.480 the major industries, we're seeing a bounce back today, the 0:14:40.600 --> 0:14:45.320 SMB up one and a half percent. But we're going 0:14:45.360 --> 0:14:47.720 to talk something slightly different now because we want to 0:14:47.760 --> 0:14:51.120 bring in our next guest, who apparently, as as as 0:14:51.160 --> 0:14:52.440 far as we know, let's put it that way, he 0:14:52.440 --> 0:14:54.280 has nothing to do with game stoff these days. Jim 0:14:54.360 --> 0:14:57.840 Keen is CEO of Steelcase, which is a leading manufacturer 0:14:57.920 --> 0:15:02.040 furniture for offices, hospitals, and class rooms. Jim, first of all, 0:15:02.040 --> 0:15:04.360 I presume, I mean, are you tempted as a as 0:15:04.360 --> 0:15:09.240 a civilian to join this this uh this town car Well, 0:15:09.280 --> 0:15:11.600 I am a video gamer. I love playing video games, 0:15:11.640 --> 0:15:15.280 but I'm standing on the sidelines for this. Yeah, I 0:15:15.320 --> 0:15:18.880 mean I think it's it's it's it's probably wise talk 0:15:18.920 --> 0:15:22.280 to us about orders. Are people looking for furniture to 0:15:22.280 --> 0:15:24.800 go back to offices, hospital and classrooms at any greater 0:15:24.880 --> 0:15:26.680 other rate than they were over the last few months 0:15:27.560 --> 0:15:30.520 at this point, I'd say it's still pretty um muted. 0:15:30.560 --> 0:15:32.280 I mean, people are mostly working from home, as you know, 0:15:32.440 --> 0:15:37.040 especially large corporations, certainly health care classrooms, education are doing 0:15:37.080 --> 0:15:40.520 things as they prepare for what's next, and uh, of 0:15:40.520 --> 0:15:42.960 we're seeing corporate office is beginning to take those actions 0:15:43.000 --> 0:15:46.520 as well. So well, it hasn't necessarily turned into orders, 0:15:46.600 --> 0:15:50.680 yet we're seeing an increasing activity because with the vaccine coming, 0:15:50.920 --> 0:15:54.040 there's an end in sight. And what what we're hearing 0:15:54.040 --> 0:15:56.440 from our clients. In fact, I just had a conversation 0:15:56.520 --> 0:15:58.720 yesterday with one of our clients, the head of real 0:15:58.800 --> 0:16:02.120 estate of you know me, your kind of top fifty company, 0:16:02.280 --> 0:16:04.320 had just got off the phone with his CEO who 0:16:04.320 --> 0:16:05.680 wanted to know how are they were going to come 0:16:05.720 --> 0:16:07.640 back to the office. How are they're changing the office 0:16:07.680 --> 0:16:10.720 to prepare for what's next. So, uh, it's on everyone's 0:16:10.760 --> 0:16:14.880 mind and I think it's all coming So Jim, I 0:16:14.920 --> 0:16:17.560 guess we'll all figure out at the same time. Uh, 0:16:17.680 --> 0:16:19.920 you know how and to what the great people will 0:16:19.920 --> 0:16:21.880 go back to the office. What do you think employees 0:16:22.840 --> 0:16:25.400 want and need when they come back to the office. 0:16:25.960 --> 0:16:28.720 Great questions. So we we spent this last year's studying 0:16:28.920 --> 0:16:31.840 actually connecting with people around the world as they were 0:16:31.840 --> 0:16:34.600 working from home to learn about their work from home 0:16:34.680 --> 0:16:38.080 experience and to try to understand what they might expect 0:16:38.160 --> 0:16:40.600 when they come back to the office. So and we 0:16:40.680 --> 0:16:42.320 learned a ton. I mean, we learned a lot about 0:16:42.320 --> 0:16:45.080 the work from home experience. What we learned about their 0:16:45.080 --> 0:16:48.520 expectations is, Uh, first of all, safety, You know, safety 0:16:48.800 --> 0:16:51.840 is not going to be less of the concern. Vaccines 0:16:51.880 --> 0:16:53.680 are gonna solve a lot of problems, but they're not 0:16:53.680 --> 0:16:56.600 going to completely eliminate COVID. Safety will still be on 0:16:56.600 --> 0:16:58.880 the minds of people, particularly as they come back to 0:16:58.960 --> 0:17:02.240 offices that had over time become you know, really dense, 0:17:02.360 --> 0:17:05.560 really open. There's going to be some common sense adjustments 0:17:05.600 --> 0:17:08.479 I think needed to reassure people that when they come 0:17:08.480 --> 0:17:10.400 back to the office that they'll be safe and it'll 0:17:10.440 --> 0:17:13.359 be safe to take off their masks again. A second 0:17:13.359 --> 0:17:17.000 thing we heard from everyone is belonging. Uh, the the 0:17:17.040 --> 0:17:20.080 relationships we all built when we can work face to face, 0:17:20.200 --> 0:17:24.919 we're still leveraging. But over time those relationships begin to atrophy, 0:17:25.000 --> 0:17:27.240 and it doesn't help us with that new employee who joined. 0:17:27.280 --> 0:17:30.159 It doesn't help us as we change teams or organizations shift. 0:17:30.840 --> 0:17:33.119 So people want a sense of belonging, They want to 0:17:33.160 --> 0:17:35.840 be connected with each other, and they're looking forward to 0:17:35.920 --> 0:17:38.320 coming back to the office for that reason as well, 0:17:38.880 --> 0:17:41.800 and I think UM thirdly as productivity, we heard this 0:17:41.840 --> 0:17:44.240 a lot well. In some ways people were able to 0:17:44.280 --> 0:17:47.320 sustain pretty high levels of productivity at home, and in 0:17:47.320 --> 0:17:50.000 some cases people felt they were even more productive because 0:17:50.040 --> 0:17:52.959 they could work in an uninterrupted way for longer periods 0:17:53.000 --> 0:17:56.360 of time. People also realize they're missing something, they're they're 0:17:56.359 --> 0:17:58.080 not learning as much from their colleagues. They are not 0:17:58.160 --> 0:18:02.040 able to have maybe some of the more informal task 0:18:02.440 --> 0:18:05.440 pascit learning opportunities that you have when you when you 0:18:05.520 --> 0:18:07.359 kind of just brush up against people, or you get 0:18:07.400 --> 0:18:10.280 to see how someone handles the situation kind of from 0:18:10.280 --> 0:18:12.520 the side. So those are some of the things people 0:18:12.520 --> 0:18:15.680 are looking forward to as they think about coming back 0:18:15.680 --> 0:18:17.879 to the office. So, Jim, you know, where are you 0:18:17.920 --> 0:18:21.480 seeing the orders coming in from these days? Is more hospitals? 0:18:21.560 --> 0:18:25.920 Is it more headquarters with you know, desks and lamps 0:18:25.960 --> 0:18:28.240 and you know, standing desks and things like that, or 0:18:28.560 --> 0:18:31.280 or have you had to pivot your supply chain and 0:18:31.320 --> 0:18:38.320 your your work environment differently. Well, I'd say, first of all, 0:18:38.359 --> 0:18:41.159 it's different by regions. So it's a global company. UM 0:18:41.440 --> 0:18:44.280 Asia was the first to see the COVID crisis, but 0:18:44.680 --> 0:18:46.800 also Asia was the first to come out of it, 0:18:46.840 --> 0:18:49.000 and they haven't really seen the second and third waves 0:18:49.000 --> 0:18:52.359 the way we have in Europe and the US. So 0:18:52.560 --> 0:18:57.119 in Asia we're seeing business return to more normal levels 0:18:57.119 --> 0:19:00.240 across across a wide range of companies, and that's good 0:19:00.240 --> 0:19:02.639 sign for the rest of our business because you know, 0:19:02.760 --> 0:19:04.919 eventually we hope to be in that same spot. In 0:19:05.000 --> 0:19:09.960 markets like the US, customers like healthcare organizations, education have 0:19:10.080 --> 0:19:14.120 remained pretty strong throughout. I'd say where orders have been 0:19:14.160 --> 0:19:16.720 the weak as it's among the largest companies who are 0:19:16.760 --> 0:19:21.600 often in headquarters buildings in the largest cities. That's where 0:19:21.600 --> 0:19:23.480 the commutes are the toughest that you have to deal 0:19:23.520 --> 0:19:26.800 with elevators and things like that. So the very largest 0:19:26.800 --> 0:19:29.440 customers have cut back the most, and our business has 0:19:29.480 --> 0:19:33.160 been the strongest among mid market, smaller companies that aren't 0:19:33.160 --> 0:19:35.240 facing a lot of the same challenges. They're more distributed 0:19:35.240 --> 0:19:37.879 around the country. So, Jim, when when you talk to 0:19:38.280 --> 0:19:41.720 UH senior managers of the of the companies that you 0:19:41.840 --> 0:19:45.120 do business with, what do they ultimately believe will be 0:19:45.680 --> 0:19:49.040 the kind of the new normal workforce? Will everybody come back? 0:19:49.119 --> 0:19:52.600 Will everybody come back on a kind of a split 0:19:52.680 --> 0:19:57.639 type of schedule will what's what's the thinking. So the 0:19:57.720 --> 0:20:00.520 thinking is that most people will work from home a 0:20:00.600 --> 0:20:02.960 day or two a week if that's what they choose 0:20:03.000 --> 0:20:04.680 to do, and that the last part of it is 0:20:04.720 --> 0:20:08.960 really important. It's about choice. I'd say this is not 0:20:09.160 --> 0:20:12.800