1 00:00:02,080 --> 00:00:05,880 Speaker 1: This is Bloomberg Intelligence with Alex Steinhl and Paul'sweenye. 2 00:00:06,000 --> 00:00:09,200 Speaker 2: The real AP performance has been the US corporate high yield. 3 00:00:09,360 --> 00:00:11,680 Speaker 3: Are the companies lean enough? Have they trimmed all the fats? 4 00:00:11,800 --> 00:00:14,960 Speaker 2: The semiconductor business is a really cyclical. 5 00:00:14,560 --> 00:00:18,680 Speaker 1: Business, breaking market headlines and corporate news from across the globe. 6 00:00:18,720 --> 00:00:21,360 Speaker 3: Do investors like the M and A that we've seen? 7 00:00:21,560 --> 00:00:24,640 Speaker 2: These are two big time blue chip companies. 8 00:00:24,800 --> 00:00:28,400 Speaker 3: The window between the peak and cut changing super fast. 9 00:00:28,560 --> 00:00:32,479 Speaker 1: Bloomberg Intelligence with Alex Steinhl and Paul'sweenye. 10 00:00:31,960 --> 00:00:36,360 Speaker 2: On Bloomberg Radio. On Today's Bloomberg Intelligence Show, we dig 11 00:00:36,400 --> 00:00:38,680 Speaker 2: inside the big business stories impacting Wall Street and the 12 00:00:38,680 --> 00:00:39,440 Speaker 2: global markets. 13 00:00:39,479 --> 00:00:41,440 Speaker 3: Each and every week we provide in depth research and 14 00:00:41,560 --> 00:00:43,320 Speaker 3: data on some of the two thousand companies and one 15 00:00:43,400 --> 00:00:46,120 Speaker 3: hundred and thirty industries our analysts cover worldwide. 16 00:00:46,240 --> 00:00:47,879 Speaker 2: Today, we'll take a look at how one company is 17 00:00:47,920 --> 00:00:50,239 Speaker 2: looking to fix your terrible board meetings. 18 00:00:50,400 --> 00:00:52,960 Speaker 3: Plus we'll discuss why many Swings Day voters say they're 19 00:00:53,000 --> 00:00:56,000 Speaker 3: worried about violence surrounding the US presidential election. 20 00:00:56,480 --> 00:00:59,440 Speaker 2: But first we dive into big tech and in Vidia. 21 00:00:59,440 --> 00:01:02,440 Speaker 2: This week, maker gave a bullish forecast for second quarter. 22 00:01:02,280 --> 00:01:04,920 Speaker 3: Revenue Nvidia also reported that its sales in the first 23 00:01:04,959 --> 00:01:07,280 Speaker 3: quarter more than triple to twenty six billion, and this 24 00:01:07,360 --> 00:01:11,200 Speaker 3: shows that spending on artificial intelligence computing remains strong for more. 25 00:01:11,240 --> 00:01:15,679 Speaker 2: We were joined by Kunjon Sobani, Bloomberg Intelligence Senior semiconductor analyst. 26 00:01:16,040 --> 00:01:18,880 Speaker 2: We first asked for his takeaways from Nvidia's results. 27 00:01:19,160 --> 00:01:22,520 Speaker 4: Demand on most of their products keep running ahead of supply. 28 00:01:23,400 --> 00:01:27,839 Speaker 4: We don't see any slowing down in terms of purchasing 29 00:01:27,880 --> 00:01:31,520 Speaker 4: from their customers. In fact, beyond their largest cloud customer, 30 00:01:31,680 --> 00:01:34,920 Speaker 4: enterprise and consumer intern companies are coming in strong, so 31 00:01:35,120 --> 00:01:37,559 Speaker 4: we don't see any sort of big risk that says 32 00:01:37,560 --> 00:01:38,720 Speaker 4: they cannot continue. 33 00:01:38,800 --> 00:01:41,240 Speaker 2: So, Kunjon, I was selling Alexon. When we get smart 34 00:01:41,240 --> 00:01:43,160 Speaker 2: people on like yourself, I like to ask the question 35 00:01:43,200 --> 00:01:47,120 Speaker 2: about competition. I'm kind of surprised that, you know, in 36 00:01:47,200 --> 00:01:51,600 Speaker 2: Nvidia has this competitive leadership position relative to everybody else. 37 00:01:51,800 --> 00:01:55,600 Speaker 2: How proprietary is their chip design versus I don't know 38 00:01:55,640 --> 00:01:58,960 Speaker 2: the AMDs of the world, even as Cisco. What is 39 00:01:59,000 --> 00:02:00,920 Speaker 2: the competitive landscape? 40 00:02:01,200 --> 00:02:03,800 Speaker 4: Yeah, I mean, look, they were I would say almost 41 00:02:03,880 --> 00:02:07,360 Speaker 4: two to even arguably three years ahead of everyone, and 42 00:02:07,400 --> 00:02:10,120 Speaker 4: it's not easy in the chip landscape to catch up 43 00:02:10,200 --> 00:02:13,240 Speaker 4: when someone has that kind of a lead. They have 44 00:02:13,400 --> 00:02:18,360 Speaker 4: actually aggressively gone out and out in it their peers. 45 00:02:18,440 --> 00:02:21,160 Speaker 4: Before they were on an eighteen to twenty four month 46 00:02:21,360 --> 00:02:23,720 Speaker 4: product cycle, Now they are on a twelve month product cycle. 47 00:02:24,000 --> 00:02:26,280 Speaker 4: So they just keep staying ahead of their combination. Their 48 00:02:26,320 --> 00:02:29,680 Speaker 4: combination is trying to catch up. AMD has made significant 49 00:02:29,720 --> 00:02:34,200 Speaker 4: progress and now is another second viral alternative in the market. 50 00:02:34,320 --> 00:02:36,919 Speaker 4: Hence you see that in their significant growth as well. 51 00:02:37,200 --> 00:02:39,920 Speaker 4: But we don't think at this point there is anyone 52 00:02:39,919 --> 00:02:43,519 Speaker 4: else who can rival the total system tco and performance 53 00:02:43,560 --> 00:02:43,920 Speaker 4: that they have. 54 00:02:44,360 --> 00:02:46,639 Speaker 3: I was mentioning earlier that Nvidia gets about forty percent 55 00:02:46,680 --> 00:02:49,480 Speaker 3: its revenue from the big four players, Microsoft, Meta Alphabet, 56 00:02:49,520 --> 00:02:52,320 Speaker 3: and Amazon. What kind of risk is that, if any? 57 00:02:53,720 --> 00:02:55,799 Speaker 4: I mean there have been concerns around it. So there's 58 00:02:55,840 --> 00:02:58,040 Speaker 4: two good data points that came out of this print. 59 00:02:58,080 --> 00:03:01,400 Speaker 4: One that concentration did rid use for the very first time, 60 00:03:01,960 --> 00:03:04,840 Speaker 4: and what we liked it, It was not reduced because 61 00:03:04,880 --> 00:03:07,760 Speaker 4: the cloud guys slowed their purchasing. In fact, those top 62 00:03:07,840 --> 00:03:10,640 Speaker 4: four guys that are expected to increase their capec spent 63 00:03:10,760 --> 00:03:12,920 Speaker 4: by forty five percent this year and they are all 64 00:03:12,960 --> 00:03:15,800 Speaker 4: lined up to purchase its newest Blackwell products. But what 65 00:03:16,040 --> 00:03:19,320 Speaker 4: was good was that the share was taken by strong 66 00:03:19,520 --> 00:03:22,079 Speaker 4: enterprise demand, which we really like because that is much 67 00:03:22,120 --> 00:03:23,520 Speaker 4: more diversified and sticky. 68 00:03:24,200 --> 00:03:26,600 Speaker 2: Kunjan. Let's say I'm at Amazon and I buy one 69 00:03:26,600 --> 00:03:29,360 Speaker 2: of nvidious chips. When do I have to replace it? 70 00:03:29,960 --> 00:03:30,240 Speaker 5: Question? 71 00:03:32,560 --> 00:03:34,440 Speaker 4: There's two answers to it. If we were in a 72 00:03:34,520 --> 00:03:39,400 Speaker 4: normal sector semicaractor cycle like you are in smartphones or PCs, 73 00:03:39,760 --> 00:03:42,840 Speaker 4: the refreshed time would be longer, so I would say 74 00:03:43,760 --> 00:03:46,560 Speaker 4: on ideally three to five years. But what's going on 75 00:03:46,640 --> 00:03:48,880 Speaker 4: right now is all of these customers are just racing 76 00:03:48,920 --> 00:03:52,120 Speaker 4: against each other, so they cannot afford to stop. So 77 00:03:52,160 --> 00:03:54,880 Speaker 4: as soon as a newer, better chip is available that 78 00:03:54,920 --> 00:03:57,400 Speaker 4: they can change, they are going to change. 79 00:03:57,480 --> 00:04:00,840 Speaker 3: What would stop all this? We know that AI is 80 00:04:00,840 --> 00:04:02,400 Speaker 3: going to grow, We know that there will be demand 81 00:04:02,400 --> 00:04:04,640 Speaker 3: for chips. We know all that. That's a structural shift 82 00:04:05,320 --> 00:04:08,400 Speaker 3: within the economy. But what makes it cyclical? 83 00:04:10,120 --> 00:04:13,800 Speaker 4: I think the first point of cyclicality would be when 84 00:04:13,960 --> 00:04:17,600 Speaker 4: the demand momentum stops, which we haven't seen no signs of. Look, 85 00:04:17,640 --> 00:04:20,440 Speaker 4: the supply keeps on coming up, so at some point 86 00:04:20,800 --> 00:04:24,039 Speaker 4: demand is going to be meeting supply. And after that, 87 00:04:24,120 --> 00:04:26,479 Speaker 4: if we see any kind of weakness in demand. Look, look, 88 00:04:26,520 --> 00:04:30,040 Speaker 4: if the largest cloud providers don't see return on that investment, 89 00:04:30,240 --> 00:04:33,760 Speaker 4: don't see monetization benefit, don't see their earnings and revenue 90 00:04:33,760 --> 00:04:36,679 Speaker 4: grow from these investments, that's when we can start worrying 91 00:04:36,720 --> 00:04:38,279 Speaker 4: about sort of a cyclical DOWNTOWND. 92 00:04:38,720 --> 00:04:43,200 Speaker 2: All right, So how else in your universe of semiconductors, 93 00:04:44,480 --> 00:04:45,880 Speaker 2: how else do you if you play this trend? 94 00:04:46,480 --> 00:04:49,719 Speaker 4: Look, it's still Nvidia still remains sort of the best 95 00:04:49,760 --> 00:04:52,719 Speaker 4: pure play AI play in semiconductors. So I don't know 96 00:04:52,760 --> 00:04:54,560 Speaker 4: why you would want to look elsewhere, but if you 97 00:04:54,760 --> 00:04:59,120 Speaker 4: were forced to, we also like you know, players like 98 00:04:59,200 --> 00:05:02,360 Speaker 4: broad Common MA when it comes to AI networking, and 99 00:05:02,520 --> 00:05:06,919 Speaker 4: it comes to the ask chips, which and media's largest 100 00:05:06,920 --> 00:05:10,599 Speaker 4: customers are designing themselves. So these are the two areas 101 00:05:10,680 --> 00:05:13,920 Speaker 4: where we see significant growth coming in over the next 102 00:05:13,920 --> 00:05:14,520 Speaker 4: two years. 103 00:05:14,720 --> 00:05:18,640 Speaker 2: Our thanks to Kunjan Sobani, Bloomberg Intelligence senior semiconductor analysts. 104 00:05:19,000 --> 00:05:21,640 Speaker 3: We move now to the home improvement retailer. Low's Lowe 105 00:05:21,680 --> 00:05:24,000 Speaker 3: said the comparable sales fell four point one percent in 106 00:05:24,040 --> 00:05:26,800 Speaker 3: the first quarter, though they were better than analysts projected. 107 00:05:27,000 --> 00:05:29,719 Speaker 2: This all comes as uncertainty around interest rates and inflation 108 00:05:29,839 --> 00:05:32,120 Speaker 2: continue to weigh on home improvement demand. 109 00:05:32,279 --> 00:05:33,680 Speaker 3: For more on all of this, we were joined by 110 00:05:33,760 --> 00:05:36,280 Speaker 3: Drew Redding, Bloomberg Intelligence US home building analyst. 111 00:05:36,520 --> 00:05:39,039 Speaker 2: First asked Drew for his key takeaways on Loew's most 112 00:05:39,040 --> 00:05:39,680 Speaker 2: recent report. 113 00:05:40,080 --> 00:05:41,720 Speaker 6: Quarter was a little bit of a tug of war 114 00:05:41,920 --> 00:05:45,400 Speaker 6: between sales and margins. Part of that sales performance was 115 00:05:45,480 --> 00:05:47,400 Speaker 6: due to the fact that there was a more promotional 116 00:05:47,480 --> 00:05:50,400 Speaker 6: environment out there. If you think back to when Home 117 00:05:50,440 --> 00:05:53,719 Speaker 6: Deepot reported last week, they cite a late start to 118 00:05:53,760 --> 00:05:57,080 Speaker 6: spring is something that muted sales lows actually said. Spring 119 00:05:57,120 --> 00:05:58,919 Speaker 6: got off to a good start, and that has to 120 00:05:58,960 --> 00:06:02,200 Speaker 6: do with them being more we're aggressive on promotions as 121 00:06:02,240 --> 00:06:04,440 Speaker 6: part of their Spring Fest, and I think that really 122 00:06:04,480 --> 00:06:07,080 Speaker 6: speaks to, you know, what we're seeing really across the 123 00:06:07,120 --> 00:06:09,720 Speaker 6: retail landscape with the consumer, and that's that they're looking 124 00:06:09,760 --> 00:06:12,920 Speaker 6: for value wherever they could get it. Now, they did 125 00:06:13,000 --> 00:06:15,960 Speaker 6: reaffirm their full year operating margin guidance, but that's going 126 00:06:16,000 --> 00:06:19,720 Speaker 6: to require the company to execute on some internal initiatives. 127 00:06:19,720 --> 00:06:22,480 Speaker 6: In the back half of the year. Loses made good 128 00:06:22,520 --> 00:06:26,760 Speaker 6: progress in improving their their margin profile and them narrowing 129 00:06:26,800 --> 00:06:29,480 Speaker 6: the gap with home Depot has really been a key 130 00:06:29,560 --> 00:06:32,680 Speaker 6: that investors have kind of you know, grasped onto. So 131 00:06:32,720 --> 00:06:34,279 Speaker 6: the fact that they're taking a little bit of a 132 00:06:34,320 --> 00:06:37,480 Speaker 6: step back here maybe making them a little bit uneasy. 133 00:06:37,680 --> 00:06:40,159 Speaker 3: How much would the stock have to re rate for 134 00:06:40,560 --> 00:06:43,960 Speaker 3: investors and analysts to say, okay, fine, the margins are suffering, 135 00:06:43,960 --> 00:06:45,760 Speaker 3: but at least the volume and the sales are there. 136 00:06:46,320 --> 00:06:49,400 Speaker 6: Yeah, Well, the stock is still trading above you know, 137 00:06:49,480 --> 00:06:51,320 Speaker 6: the ten year average, even if you go back to 138 00:06:51,920 --> 00:06:55,040 Speaker 6: prior to the pandemic. So from a pure valuation perspective, 139 00:06:55,680 --> 00:06:58,120 Speaker 6: you know, it's still a little bit elevated. The move 140 00:06:58,160 --> 00:07:00,640 Speaker 6: they've made on margins and now rowing the gap with 141 00:07:00,680 --> 00:07:03,159 Speaker 6: Home Depot has been impressive over the last couple of years, 142 00:07:03,240 --> 00:07:05,880 Speaker 6: So I think, you know, the bulls would argue that 143 00:07:05,920 --> 00:07:08,000 Speaker 6: this is kind of a one off, and as we 144 00:07:08,000 --> 00:07:10,680 Speaker 6: get to the back half of the year, margins start 145 00:07:10,720 --> 00:07:14,320 Speaker 6: to improve as they implement some of their PPI initiatives, 146 00:07:14,720 --> 00:07:17,280 Speaker 6: And in terms of sales, you know, we're not expecting 147 00:07:17,280 --> 00:07:20,080 Speaker 6: a huge rebound in sales this year and the second 148 00:07:20,120 --> 00:07:22,640 Speaker 6: half comps will definitely get easier, but even Lows has 149 00:07:22,640 --> 00:07:25,360 Speaker 6: stated that comps may turn positive, but that's not a 150 00:07:25,400 --> 00:07:29,000 Speaker 6: reflection of an improved demand. Environment. It's strictly a reflection 151 00:07:29,120 --> 00:07:31,600 Speaker 6: of easier comps. So we think as we get into 152 00:07:31,600 --> 00:07:34,200 Speaker 6: twenty twenty five, that's when we would expect the market 153 00:07:34,200 --> 00:07:36,200 Speaker 6: to see more of a turn, as we get more 154 00:07:36,200 --> 00:07:38,000 Speaker 6: of a rebound and existing home sales. 155 00:07:38,600 --> 00:07:41,640 Speaker 2: How about lumber, that's something they buy a lot of. 156 00:07:42,080 --> 00:07:44,600 Speaker 2: How's the cost of lumber these days? How's that impacting 157 00:07:44,920 --> 00:07:45,840 Speaker 2: their margins? 158 00:07:46,360 --> 00:07:49,160 Speaker 6: Yeah, lumber is about ten percent of sales for both 159 00:07:49,200 --> 00:07:53,280 Speaker 6: Home Depot and Low's. Lumber was really more of a story. 160 00:07:53,360 --> 00:07:56,480 Speaker 6: Last year was extremely volatile, so you saw the impact 161 00:07:56,520 --> 00:07:58,800 Speaker 6: on the on their top line. There not so much 162 00:07:58,800 --> 00:08:01,520 Speaker 6: of a story this year. I think Cody, particularly lumber 163 00:08:01,560 --> 00:08:03,040 Speaker 6: are going to have less of an impact in the 164 00:08:03,080 --> 00:08:04,160 Speaker 6: near term. 165 00:08:04,240 --> 00:08:06,200 Speaker 3: So you feel like we're not going to really see 166 00:08:06,520 --> 00:08:08,760 Speaker 3: a benefit in hold twenty twenty five. I mean, some 167 00:08:08,800 --> 00:08:10,480 Speaker 3: analysts are looking for the back half of this year 168 00:08:10,480 --> 00:08:12,280 Speaker 3: maybe some improvement, but for you, it's really like a 169 00:08:12,360 --> 00:08:13,320 Speaker 3: year out kind of thing. 170 00:08:14,600 --> 00:08:16,400 Speaker 6: Well, I think as we get to the end of 171 00:08:16,440 --> 00:08:18,160 Speaker 6: this year, I think you'll start to see a little 172 00:08:18,200 --> 00:08:19,880 Speaker 6: bit of a turn, and you know, a lot of 173 00:08:19,880 --> 00:08:23,440 Speaker 6: that is predicated upon with what happens in the housing market. Obviously, 174 00:08:23,520 --> 00:08:25,960 Speaker 6: people are looking for the FED to cut rates at 175 00:08:25,960 --> 00:08:28,200 Speaker 6: some point this year. Obviously not as much as we 176 00:08:28,280 --> 00:08:31,040 Speaker 6: had hoped for previously, but we think that you know, 177 00:08:31,080 --> 00:08:33,840 Speaker 6: when you when you look at existing home sales, we're 178 00:08:34,080 --> 00:08:36,199 Speaker 6: you know, at the lowest levels in you know, more 179 00:08:36,240 --> 00:08:39,560 Speaker 6: than two decades. So there's not a whole lot lower 180 00:08:39,600 --> 00:08:42,559 Speaker 6: we can go absent you know, a broader economic decline 181 00:08:42,559 --> 00:08:44,360 Speaker 6: where you start to see a lot of job loss. 182 00:08:44,679 --> 00:08:46,280 Speaker 6: So we think that you know, if it's come in 183 00:08:46,280 --> 00:08:47,760 Speaker 6: a little bit, you could kind of start to build 184 00:08:47,800 --> 00:08:50,520 Speaker 6: a little momentum ending this year carrying into next year. 185 00:08:50,880 --> 00:08:53,080 Speaker 6: When we think, you know, bigger picture about the home 186 00:08:53,080 --> 00:08:56,200 Speaker 6: improvement market, there's some there's some solid tail winds out there. 187 00:08:56,640 --> 00:08:58,960 Speaker 6: You know, you have homeowners who are sitting on record 188 00:08:59,000 --> 00:09:01,680 Speaker 6: amount of home equity. When you think about you know, 189 00:09:01,720 --> 00:09:03,800 Speaker 6: the rise and home prices we've seen over the last 190 00:09:03,840 --> 00:09:07,040 Speaker 6: several years, you've got an aging housing stock, and I 191 00:09:07,040 --> 00:09:10,199 Speaker 6: think the fact that mobility has been so low is 192 00:09:10,240 --> 00:09:12,400 Speaker 6: going to continue to encourage people to invest in their 193 00:09:12,400 --> 00:09:14,560 Speaker 6: house And I think what kind of triggers that is 194 00:09:14,640 --> 00:09:16,280 Speaker 6: rates coming back in a little bit so you can 195 00:09:16,360 --> 00:09:17,520 Speaker 6: start to tap that equity. 196 00:09:17,880 --> 00:09:20,200 Speaker 2: True, how many stores as lows have and are they 197 00:09:20,240 --> 00:09:23,480 Speaker 2: adding stores, are they pairing backstores? Kind of worthy with 198 00:09:23,480 --> 00:09:24,880 Speaker 2: their store count these days. 199 00:09:25,000 --> 00:09:28,760 Speaker 6: Yeah, so they're under two thousand. It's an interesting dynamic. 200 00:09:28,880 --> 00:09:32,560 Speaker 6: So their competitor, Home Depot, is actually embarking on their 201 00:09:32,559 --> 00:09:35,600 Speaker 6: first store expansion in a long time. Lows, on the 202 00:09:35,600 --> 00:09:37,600 Speaker 6: other hand, has cut back. They got out of their 203 00:09:37,600 --> 00:09:41,000 Speaker 6: Canadian business, which reduced their store count. But what they're 204 00:09:41,040 --> 00:09:44,280 Speaker 6: doing from a store perspective is really introducing new formats. 205 00:09:44,320 --> 00:09:48,120 Speaker 6: So they're starting to go after the rural customer. Their 206 00:09:48,160 --> 00:09:51,720 Speaker 6: stores tend to be located in more rural locations compared 207 00:09:51,720 --> 00:09:54,960 Speaker 6: to Home Depot, which are more densely populated locations, and 208 00:09:55,000 --> 00:09:57,680 Speaker 6: they found success with that, so they're starting to compete 209 00:09:57,679 --> 00:10:00,400 Speaker 6: more with the detractor supplies of the w world. They're 210 00:10:00,440 --> 00:10:05,400 Speaker 6: also introducing Lows outlets, so if you think of, you know, 211 00:10:05,920 --> 00:10:08,600 Speaker 6: appliances that might have things and scratches, you could go 212 00:10:08,640 --> 00:10:11,600 Speaker 6: there and get heavily discounted items. And that's another way 213 00:10:11,640 --> 00:10:14,400 Speaker 6: they're looking to kind of, you know, drive traffic through 214 00:10:14,440 --> 00:10:15,120 Speaker 6: the Low's brand. 215 00:10:15,280 --> 00:10:18,360 Speaker 3: Okay, now you're speaking my language. You put outlet there 216 00:10:18,400 --> 00:10:20,880 Speaker 3: and I'm like, boom, we will go find things that 217 00:10:20,920 --> 00:10:21,440 Speaker 3: are cool. 218 00:10:21,520 --> 00:10:22,520 Speaker 2: I don't do outlets either. 219 00:10:23,160 --> 00:10:26,319 Speaker 3: I know you don't do outlets. That's my thing. It's 220 00:10:26,400 --> 00:10:29,160 Speaker 3: just my thing. Even if I had a bazillion dollars, 221 00:10:29,200 --> 00:10:31,400 Speaker 3: I wouldn't pay full price part of the hunt. Okay, 222 00:10:31,960 --> 00:10:35,160 Speaker 3: AnyWho so drew based on all this, If I wanted 223 00:10:35,160 --> 00:10:38,040 Speaker 3: to play this housing market right now, what is the 224 00:10:38,080 --> 00:10:40,200 Speaker 3: best play? And I say that because it's not like 225 00:10:40,240 --> 00:10:44,080 Speaker 3: the housing market that the demand isn't there, The supply 226 00:10:44,280 --> 00:10:46,880 Speaker 3: might not be there, the costs are a little too high, 227 00:10:47,000 --> 00:10:50,240 Speaker 3: mortgage rates are too high, but eventually it'll normalize. What's 228 00:10:50,280 --> 00:10:51,840 Speaker 3: the best way to capitalize? 229 00:10:52,480 --> 00:10:55,280 Speaker 6: We think right now, kind of sitting at the top 230 00:10:55,320 --> 00:10:59,800 Speaker 6: of the broader housing ecosystem is the home builders. We think, 231 00:11:00,040 --> 00:11:02,800 Speaker 6: you know, from a supply perspective, they're in a good position. 232 00:11:03,640 --> 00:11:06,479 Speaker 6: Their ability to buy down mortgage rates and make payments 233 00:11:06,800 --> 00:11:10,400 Speaker 6: more palatable to the consumers is something that differentiates them 234 00:11:10,520 --> 00:11:13,680 Speaker 6: versus the resale market. They're going to grow community counts 235 00:11:13,720 --> 00:11:15,560 Speaker 6: in the coming year, so we really think that they're 236 00:11:15,640 --> 00:11:18,640 Speaker 6: still in a good position from a competitive perspective. And 237 00:11:18,760 --> 00:11:21,240 Speaker 6: when you look at you know, within the home building space, 238 00:11:21,280 --> 00:11:24,960 Speaker 6: you have the large, well capitalized, publicly traded homebuilders who 239 00:11:25,000 --> 00:11:28,040 Speaker 6: have access to land, access to labor, and you compare 240 00:11:28,080 --> 00:11:30,760 Speaker 6: that versus the smaller private piers, and you have to 241 00:11:30,760 --> 00:11:34,960 Speaker 6: remember home building is a very fragmented industry, particularly outside 242 00:11:35,280 --> 00:11:38,559 Speaker 6: some of the largest markets. But those smaller private peers 243 00:11:38,840 --> 00:11:42,520 Speaker 6: tend to rely on regional banks for growth capital. And 244 00:11:42,679 --> 00:11:45,679 Speaker 6: with you know, a slowing economy and more concern there, 245 00:11:45,920 --> 00:11:48,040 Speaker 6: you're starting to see a poolback and lending. So we 246 00:11:48,080 --> 00:11:50,719 Speaker 6: think it's a good opportunity for those larger builders to 247 00:11:50,760 --> 00:11:51,720 Speaker 6: continue to take share. 248 00:11:52,120 --> 00:11:55,200 Speaker 2: Our thanks to Drew reading Bloomberg Intelligence, US home building analyst. 249 00:11:55,240 --> 00:11:56,880 Speaker 3: All right, coming out, we're going to say on retail 250 00:11:56,880 --> 00:11:58,760 Speaker 3: and breakdown targets quarterly results. 251 00:11:59,000 --> 00:12:01,840 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 252 00:12:01,880 --> 00:12:04,240 Speaker 2: depth research and data on two thousand companies and one 253 00:12:04,360 --> 00:12:07,319 Speaker 2: hundred and thirty industries. You can access Bloomberg Intelligence via 254 00:12:07,320 --> 00:12:09,400 Speaker 2: bi go on the terminal. I'm Paul Sweeney and. 255 00:12:09,440 --> 00:12:11,400 Speaker 3: I'm Alex Steel, and this is Bloomberg. 256 00:12:18,320 --> 00:12:22,720 Speaker 1: This is Bloomberg Intelligence with Alex Steel and Paul Sweeney 257 00:12:23,000 --> 00:12:24,240 Speaker 1: on Bloomberg Radio. 258 00:12:25,360 --> 00:12:27,600 Speaker 3: We look now at the retailer target. This week, the 259 00:12:27,600 --> 00:12:30,840 Speaker 3: company reported first quarter earnings that missed analyst expectations and 260 00:12:30,880 --> 00:12:33,000 Speaker 3: at sales fell about three percent year over year. 261 00:12:33,240 --> 00:12:36,400 Speaker 2: Target also said it remains cautious on discretionary spending over 262 00:12:36,400 --> 00:12:39,800 Speaker 2: the coming months, despite having optimism for later this year. 263 00:12:40,080 --> 00:12:43,079 Speaker 2: For more, we were joined by Jennifer bartashis Bloomberg Intelligence 264 00:12:43,080 --> 00:12:45,520 Speaker 2: Senior analyst Retail, Staples and packaged Food. 265 00:12:45,679 --> 00:12:48,160 Speaker 3: We first asked jen for her reaction to this week's report. 266 00:12:48,480 --> 00:12:52,200 Speaker 7: Target missed on profit, but they are very optimistic about 267 00:12:52,360 --> 00:12:54,480 Speaker 7: second quarter and for the rest of the year, and 268 00:12:54,559 --> 00:12:56,640 Speaker 7: so I think there's a little bit of reticence about 269 00:12:56,920 --> 00:12:59,600 Speaker 7: how realistic that is when it comes to second quarter 270 00:12:59,679 --> 00:13:02,080 Speaker 7: in terms so same store sales. You know, Target says 271 00:13:02,120 --> 00:13:04,079 Speaker 7: that they're going to return to profit, like they're going 272 00:13:04,120 --> 00:13:08,040 Speaker 7: to return to growth in second quarter. It's feasible, but 273 00:13:08,160 --> 00:13:10,920 Speaker 7: remember last year second quarter is when they had the 274 00:13:10,960 --> 00:13:13,520 Speaker 7: blowback from all of the boycotts, so they have a 275 00:13:13,600 --> 00:13:17,640 Speaker 7: really easy comparison when you talk about a year over year. 276 00:13:17,720 --> 00:13:20,960 Speaker 7: So that return to growth, yes, but there's a caveat 277 00:13:21,000 --> 00:13:23,520 Speaker 7: around it. That means to me that the second half 278 00:13:23,559 --> 00:13:25,920 Speaker 7: is going to be really important if they're going to 279 00:13:25,920 --> 00:13:28,160 Speaker 7: reach those goals that they put out to is the. 280 00:13:28,160 --> 00:13:33,480 Speaker 2: Target shopper the same similar no relation to the Walmart shopper. 281 00:13:33,840 --> 00:13:37,040 Speaker 7: Well, historically speaking, the Target shopper has been a slightly 282 00:13:37,120 --> 00:13:39,760 Speaker 7: higher income household. They tend to be a little bit 283 00:13:39,800 --> 00:13:45,240 Speaker 7: more fashion forward, fashion focus type individuals, so there's been overlap. 284 00:13:45,320 --> 00:13:48,600 Speaker 7: But Walmart has slowly been encroaching on what has been 285 00:13:48,640 --> 00:13:52,360 Speaker 7: Target's kind of main audience, and Target has seen that 286 00:13:52,720 --> 00:13:56,480 Speaker 7: their customers are under a lot of pressure because they're 287 00:13:56,520 --> 00:13:59,080 Speaker 7: sort of middle income households. There's been a lot of 288 00:13:59,080 --> 00:14:02,520 Speaker 7: inflationary press sure, a lot of cutbacks and discretionary spending, 289 00:14:02,880 --> 00:14:05,560 Speaker 7: so there's been kind of pressure from both sides, and 290 00:14:05,640 --> 00:14:08,360 Speaker 7: so Walmart says they're going to up their private label game, 291 00:14:08,440 --> 00:14:11,080 Speaker 7: especially in apparel. That could be a threat to Target, 292 00:14:11,160 --> 00:14:14,440 Speaker 7: but it is one of Target's core strengths. So if 293 00:14:14,480 --> 00:14:17,560 Speaker 7: they can get people to come back and start engaging again, 294 00:14:17,960 --> 00:14:21,800 Speaker 7: that's really what historically has helped Target drive their success. 295 00:14:22,200 --> 00:14:24,680 Speaker 3: So reaffirming their guidance for the full year, I mean, 296 00:14:24,800 --> 00:14:26,360 Speaker 3: like you mentioned, that means they're going to have to 297 00:14:26,400 --> 00:14:28,480 Speaker 3: really deliver in the back of what are the levers 298 00:14:28,600 --> 00:14:29,640 Speaker 3: they can pull to do that. 299 00:14:30,240 --> 00:14:32,720 Speaker 7: So from a profit perspective, they have a lot of 300 00:14:32,760 --> 00:14:34,800 Speaker 7: things that are that they've been doing in terms of 301 00:14:34,840 --> 00:14:37,920 Speaker 7: cost control, in terms of streamlining their supply chain. Their 302 00:14:37,960 --> 00:14:40,800 Speaker 7: inventory was down in another seven percent this quarter. Those 303 00:14:40,800 --> 00:14:43,160 Speaker 7: are all great things because it helps make them more 304 00:14:43,200 --> 00:14:47,200 Speaker 7: efficient and cost effective. So from a margin perspective, you know, 305 00:14:47,320 --> 00:14:50,880 Speaker 7: there's still some runway to continue to expand margins. The 306 00:14:50,960 --> 00:14:53,000 Speaker 7: real question is are they going to be able to 307 00:14:53,080 --> 00:14:57,360 Speaker 7: drive sales growth. What's concerning is that the in store 308 00:14:57,400 --> 00:15:01,720 Speaker 7: sales for same store sales are still significantly lower. And 309 00:15:02,040 --> 00:15:05,160 Speaker 7: you know, part of the idea behind the discretionary categories 310 00:15:05,200 --> 00:15:06,960 Speaker 7: is that people come into stores and they browse and 311 00:15:07,000 --> 00:15:10,040 Speaker 7: they find an outfit or they find an accessory. And 312 00:15:10,240 --> 00:15:13,200 Speaker 7: it's great that digital sales are reaccelerating, but if people 313 00:15:13,240 --> 00:15:15,880 Speaker 7: aren't in the store, that's a hard thing for Target 314 00:15:15,920 --> 00:15:16,440 Speaker 7: to deal with. 315 00:15:16,720 --> 00:15:19,400 Speaker 2: Hey, Jen, want to think back to the Walmart releases 316 00:15:19,440 --> 00:15:21,920 Speaker 2: that I've really paid attention to. I always see double digit, 317 00:15:22,000 --> 00:15:25,800 Speaker 2: maybe twenty percent e commerce sales growth. How does Target 318 00:15:25,840 --> 00:15:26,200 Speaker 2: do there? 319 00:15:26,560 --> 00:15:26,760 Speaker 6: Well? 320 00:15:26,840 --> 00:15:30,080 Speaker 7: Target actually does pretty well in terms of digital sales growth, 321 00:15:30,120 --> 00:15:33,360 Speaker 7: but there's a very different strategy. Walmart is pursuing a 322 00:15:33,400 --> 00:15:36,840 Speaker 7: strategy of as many possible items as possible on the 323 00:15:36,840 --> 00:15:39,360 Speaker 7: Walmart dot Com. They do a lot of third party sales. 324 00:15:39,800 --> 00:15:42,840 Speaker 7: When it comes to Target, their broader assortment is much 325 00:15:42,840 --> 00:15:46,440 Speaker 7: more curated, and so they are very thoughtful about which 326 00:15:46,520 --> 00:15:49,880 Speaker 7: vendors they bring onto the target dot com to enhance 327 00:15:49,920 --> 00:15:53,240 Speaker 7: the offering that Target has. So they're different approaches to 328 00:15:53,360 --> 00:15:56,720 Speaker 7: e commerce. Both are seeing some success, but you can't 329 00:15:56,720 --> 00:15:59,720 Speaker 7: really compare them strictly side by side. 330 00:16:00,040 --> 00:16:03,160 Speaker 3: What other company, like what did you make of then TJX, 331 00:16:03,200 --> 00:16:05,960 Speaker 3: for example, because in some ways they can be immune 332 00:16:06,160 --> 00:16:09,680 Speaker 3: from the slowdown, right because everyone me included, we'll go shop. 333 00:16:09,720 --> 00:16:12,520 Speaker 3: There are we seeing that reflected in the numbers? 334 00:16:13,000 --> 00:16:15,120 Speaker 7: I mean, I think the strong results from TJX just 335 00:16:15,240 --> 00:16:18,360 Speaker 7: underscore that people still like the treasure hunt, but people 336 00:16:18,440 --> 00:16:21,680 Speaker 7: are seeking value and one of the things that Target 337 00:16:21,720 --> 00:16:25,040 Speaker 7: talked about is that they need to reinforce that value proposition. 338 00:16:25,360 --> 00:16:28,920 Speaker 7: That's part of why they've rejiggered their entire Target loyalty 339 00:16:28,960 --> 00:16:33,000 Speaker 7: program with Target Circle TJX, everybody knows you can go 340 00:16:33,120 --> 00:16:36,200 Speaker 7: and you have the potential to find something that is 341 00:16:36,240 --> 00:16:40,040 Speaker 7: an amazing deal, and that's enough to draw people into stores. 342 00:16:40,920 --> 00:16:43,120 Speaker 7: Target has has gotten a little bit away from that. 343 00:16:43,440 --> 00:16:46,280 Speaker 3: Yeah, yeah, see polism. So pauls, we've been in a TJX. 344 00:16:46,560 --> 00:16:48,600 Speaker 3: I don't think he truly understands the beauty of this. 345 00:16:48,720 --> 00:16:50,479 Speaker 2: I went to my first Walmart last weekend. 346 00:16:50,680 --> 00:16:53,160 Speaker 3: Yeah, I'm so. That's like a semi gold star. So 347 00:16:53,360 --> 00:16:56,560 Speaker 3: they have not only just discounted stuff, but they have 348 00:16:56,680 --> 00:17:00,920 Speaker 3: the runway and that's the jam. That is designer stuff 349 00:17:00,960 --> 00:17:03,040 Speaker 3: on some serious sale and you can get that on 350 00:17:03,120 --> 00:17:05,520 Speaker 3: clearance and you're looking at like a ninety percent off 351 00:17:05,560 --> 00:17:07,600 Speaker 3: a designer kind of situation. 352 00:17:07,840 --> 00:17:09,600 Speaker 2: Do you know beforehanded whether it's going to be there? 353 00:17:09,640 --> 00:17:12,920 Speaker 3: No, that's that's that's fun. Then you add the treasure hunt, 354 00:17:12,920 --> 00:17:15,399 Speaker 3: and you don't know the beauty that will be unveiled 355 00:17:15,480 --> 00:17:17,520 Speaker 3: as you go in. Am I selling this appropriately? 356 00:17:17,600 --> 00:17:17,800 Speaker 6: Jen? 357 00:17:18,400 --> 00:17:21,080 Speaker 7: Absolutely? I mean that is that is some of the appeal. 358 00:17:21,240 --> 00:17:22,920 Speaker 7: You just you never know what you're going to find, 359 00:17:22,960 --> 00:17:24,800 Speaker 7: and so you go as often as you as you 360 00:17:24,840 --> 00:17:27,520 Speaker 7: can because there's a chance you'll find that amazing deal. 361 00:17:27,920 --> 00:17:31,800 Speaker 2: What's the promotional environment out there, Jenner. Are the Walmarts, 362 00:17:31,880 --> 00:17:35,040 Speaker 2: the tjx's, the targets. Are they putting out a lot 363 00:17:35,040 --> 00:17:37,520 Speaker 2: of promotions to get people in the store or to 364 00:17:37,520 --> 00:17:38,240 Speaker 2: click that button. 365 00:17:38,600 --> 00:17:42,320 Speaker 7: The promotional environment has been escalating, and so we talk 366 00:17:42,400 --> 00:17:45,600 Speaker 7: you hear Walmart talk about rollbacks that's basically putting things 367 00:17:45,680 --> 00:17:48,959 Speaker 7: on sale or discounts. Target talked about cutting prices by 368 00:17:49,000 --> 00:17:51,160 Speaker 7: the end of the summer up to five thousand items, 369 00:17:51,240 --> 00:17:53,840 Speaker 7: all for essential So the idea is to try to 370 00:17:54,760 --> 00:17:57,639 Speaker 7: advertise that there's value proposition there and you know in 371 00:17:57,760 --> 00:18:00,800 Speaker 7: force that they're they're looking at for the customer, trying 372 00:18:00,800 --> 00:18:03,720 Speaker 7: to get people to engage in coming back and perhaps 373 00:18:03,800 --> 00:18:06,480 Speaker 7: buying a little bit more. And let's be honest, it 374 00:18:06,520 --> 00:18:09,000 Speaker 7: doesn't hurt from a public relations perspective when you have 375 00:18:09,119 --> 00:18:12,200 Speaker 7: the White House talking about retailers not being responsible enough 376 00:18:12,440 --> 00:18:15,920 Speaker 7: and rolling back costs on essentials. So there's certainly a 377 00:18:15,960 --> 00:18:18,119 Speaker 7: little bit of a play there to help appease some 378 00:18:18,160 --> 00:18:19,119 Speaker 7: of that political pressure. 379 00:18:19,160 --> 00:18:20,359 Speaker 3: Is but that doesn't make me want to buy the 380 00:18:20,400 --> 00:18:21,880 Speaker 3: stock though, No. 381 00:18:21,920 --> 00:18:26,119 Speaker 7: But you know it does help ultimately from a consumer perspective. 382 00:18:26,320 --> 00:18:29,240 Speaker 7: If you think that it's a better value to shop there, 383 00:18:29,359 --> 00:18:31,640 Speaker 7: or that you're getting more for your money, you're more 384 00:18:31,640 --> 00:18:34,080 Speaker 7: inclined to shop there, and that ultimately leads to your 385 00:18:34,080 --> 00:18:36,159 Speaker 7: traffic and your sales, and that is what is appealing 386 00:18:36,200 --> 00:18:36,879 Speaker 7: to investors. 387 00:18:37,440 --> 00:18:40,879 Speaker 2: What are the dollar stores seeing these days? Are they 388 00:18:40,920 --> 00:18:43,960 Speaker 2: seeing a pickup in traffic, maybe the people trading down 389 00:18:44,040 --> 00:18:45,439 Speaker 2: from a Walmart or Target. 390 00:18:46,400 --> 00:18:48,760 Speaker 7: There's been some trade down into the dollar stores, and 391 00:18:48,800 --> 00:18:50,760 Speaker 7: we tend to see that every time we go through 392 00:18:50,840 --> 00:18:53,639 Speaker 7: sort of an economic depression. One of the challenges for 393 00:18:53,680 --> 00:18:56,199 Speaker 7: the dollar stores is that people are coming in, but 394 00:18:56,359 --> 00:19:00,640 Speaker 7: they've abandoned the discretionary spending, even though at dollar store 395 00:19:00,640 --> 00:19:05,480 Speaker 7: the discretionary spending is not that expensive, so their consumables mix. 396 00:19:05,520 --> 00:19:07,920 Speaker 7: For example, a Dollar General is is close to eighty 397 00:19:07,960 --> 00:19:10,760 Speaker 7: percent of their sales are what would could be considered 398 00:19:10,800 --> 00:19:14,440 Speaker 7: consumable items. That is good in terms of people coming 399 00:19:14,440 --> 00:19:16,480 Speaker 7: into the store, but it's not great for the long 400 00:19:16,560 --> 00:19:20,000 Speaker 7: term mix for the company because those are very low 401 00:19:20,040 --> 00:19:23,880 Speaker 7: margin sales. They're high frequency, but people have been really 402 00:19:23,960 --> 00:19:26,600 Speaker 7: watching those, you know, watching their wallets, and so the 403 00:19:26,640 --> 00:19:29,280 Speaker 7: basket sizes are a little smaller, the mix is more 404 00:19:29,440 --> 00:19:32,199 Speaker 7: just you know, more consumable. So we'll be watching for 405 00:19:32,240 --> 00:19:35,760 Speaker 7: any signs that they're getting some hir income households coming 406 00:19:35,800 --> 00:19:38,920 Speaker 7: in to spend on those more discretionary items, or that 407 00:19:39,040 --> 00:19:42,080 Speaker 7: their their core consumers are loosening spending a little bit. 408 00:19:42,440 --> 00:19:45,119 Speaker 7: But honestly, this quarter is probably not going to be 409 00:19:45,200 --> 00:19:45,440 Speaker 7: you know. 410 00:19:45,440 --> 00:19:48,360 Speaker 3: Panning out No, definitely not. I'm target falling the most, 411 00:19:48,400 --> 00:19:50,240 Speaker 3: I should say, going back to Target the most is 412 00:19:50,280 --> 00:19:53,359 Speaker 3: November of twenty twenty two. Does that feel extreme to you, 413 00:19:53,480 --> 00:19:57,760 Speaker 3: considering that the actual numbers weren't like terrible terrible. 414 00:19:58,320 --> 00:20:01,399 Speaker 7: I think you shouldn't distarget it for being target. I 415 00:20:01,400 --> 00:20:04,919 Speaker 7: guess this is my response to that. And what I mean, Like, 416 00:20:05,000 --> 00:20:06,960 Speaker 7: what I mean by that is, you know, Target has 417 00:20:07,080 --> 00:20:11,639 Speaker 7: always been about the fashion. It's been about the discretionary categories. 418 00:20:11,640 --> 00:20:14,879 Speaker 7: It's been about home decor, it's been about things you 419 00:20:14,920 --> 00:20:17,719 Speaker 7: know of that nature. They've never tried to be you know, 420 00:20:18,280 --> 00:20:21,400 Speaker 7: heavy on the essentials category. And so when you've got 421 00:20:21,440 --> 00:20:23,840 Speaker 7: consumer weakness and you've got people who aren't spending in 422 00:20:23,840 --> 00:20:26,840 Speaker 7: those categories, it's hard to beat up Target for being 423 00:20:26,960 --> 00:20:29,800 Speaker 7: true to what their values are. And so what I 424 00:20:29,800 --> 00:20:31,960 Speaker 7: would say is, you know, if we see some improvement 425 00:20:32,000 --> 00:20:35,640 Speaker 7: in just the discretionary spending, Target will start to take 426 00:20:35,680 --> 00:20:38,600 Speaker 7: off again. You know, their sales will accelerate, people will 427 00:20:38,640 --> 00:20:40,920 Speaker 7: be coming back. It seems more of a waiting game 428 00:20:40,960 --> 00:20:43,240 Speaker 7: for when the consumer is ready for that at this point. 429 00:20:43,240 --> 00:20:46,199 Speaker 3: Our thanks to Jim Bartasha's Bloomberg Intelligence Senior analysts for 430 00:20:46,240 --> 00:20:47,720 Speaker 3: Retail staples and packaged food. 431 00:20:47,920 --> 00:20:50,600 Speaker 2: On Bloomberg Intelligence Radio, we bring you all the top 432 00:20:50,640 --> 00:20:53,240 Speaker 2: analysts providing in depth research and data on two thousand 433 00:20:53,280 --> 00:20:54,960 Speaker 2: companies and one hundred and thirty industries. 434 00:20:55,040 --> 00:20:57,239 Speaker 3: We also have something here at Bloomberg called Bloomberg New 435 00:20:57,359 --> 00:20:59,680 Speaker 3: Energy Finance, and the idea behind it is to provide 436 00:20:59,760 --> 00:21:04,040 Speaker 3: data on commodities, power, transport, industries, buildings and agriculture and 437 00:21:04,119 --> 00:21:05,280 Speaker 3: also new technology. 438 00:21:05,480 --> 00:21:07,680 Speaker 2: This week we also looked at a BNF report that 439 00:21:07,760 --> 00:21:10,600 Speaker 2: said governments and companies need to spend an extra thirty 440 00:21:10,640 --> 00:21:14,320 Speaker 2: four trillion dollars on the clean energy transition between now 441 00:21:14,520 --> 00:21:16,919 Speaker 2: and twenty fifty to reach net zero emissions. 442 00:21:17,119 --> 00:21:20,399 Speaker 3: For more, we're drawn by Aiman Farhat, Bloomberg European Power 443 00:21:20,400 --> 00:21:21,399 Speaker 3: and Renewables reporter. 444 00:21:21,840 --> 00:21:24,879 Speaker 2: We first asked in for more context on the BNEF report. 445 00:21:25,160 --> 00:21:27,280 Speaker 5: I mean they were pool outlines two scenarios. One of 446 00:21:27,320 --> 00:21:29,280 Speaker 5: them is exactly that trying to get to net zero 447 00:21:29,320 --> 00:21:32,080 Speaker 5: by twenty fifty, So it is possible it will cost 448 00:21:32,080 --> 00:21:34,240 Speaker 5: something like one hundred and fifteen trillion dollars between now 449 00:21:34,280 --> 00:21:37,320 Speaker 5: and twenty fifty, and twenty percent more than the actual 450 00:21:37,560 --> 00:21:39,080 Speaker 5: kind of base case, which is if we just go 451 00:21:39,119 --> 00:21:41,399 Speaker 5: along with all the all the different technologies actually make 452 00:21:41,400 --> 00:21:44,000 Speaker 5: economical sense. So the net zero scenario is about governments 453 00:21:44,000 --> 00:21:46,240 Speaker 5: putting in policy and putting in drivers to make it 454 00:21:46,240 --> 00:21:46,840 Speaker 5: happen faster. 455 00:21:47,200 --> 00:21:50,840 Speaker 2: Are the big I guess players globally. I'm thinking just 456 00:21:51,000 --> 00:21:55,760 Speaker 2: the West broadly defined China. Do we have global buy 457 00:21:55,840 --> 00:21:58,399 Speaker 2: in to any of this right now or is it 458 00:21:58,560 --> 00:21:59,639 Speaker 2: just piecemeal? 459 00:22:00,040 --> 00:22:01,440 Speaker 5: I think that's a good question. I think one of 460 00:22:01,480 --> 00:22:03,679 Speaker 5: the things that the report does is look till twenty fifty, 461 00:22:03,720 --> 00:22:05,159 Speaker 5: but as well as that, they also look for the 462 00:22:05,160 --> 00:22:07,199 Speaker 5: next like five ten years, and they show that the 463 00:22:07,240 --> 00:22:09,320 Speaker 5: investment level that's being planned for the next even just 464 00:22:09,320 --> 00:22:11,880 Speaker 5: so twenty thirty isn't really there to keep on track 465 00:22:11,920 --> 00:22:13,639 Speaker 5: to be reaching that zero. It isn't even there to 466 00:22:13,640 --> 00:22:16,120 Speaker 5: be reaching any kind of these scenarios. So I'd say 467 00:22:16,119 --> 00:22:18,240 Speaker 5: what the report redes say is that it is possible 468 00:22:18,280 --> 00:22:20,720 Speaker 5: we have to really stop moving immediately, and that most 469 00:22:20,720 --> 00:22:23,240 Speaker 5: players aren't moving fast enough. It's all a bit too slow. 470 00:22:23,560 --> 00:22:26,000 Speaker 3: Say that number again, about how many trillions of dollars? 471 00:22:26,080 --> 00:22:28,760 Speaker 5: More so, it's two hundred and fifteen trillion for net zero, 472 00:22:28,840 --> 00:22:31,040 Speaker 5: So that's about thirty four trillion dollars more than the 473 00:22:31,080 --> 00:22:31,880 Speaker 5: base case. 474 00:22:31,760 --> 00:22:34,120 Speaker 3: Oh my gosh, Okay, where does that is that all 475 00:22:34,160 --> 00:22:36,480 Speaker 3: going to come from governments? I mean, at the end 476 00:22:36,520 --> 00:22:38,840 Speaker 3: of the day, whether it's through taxes, et cetera. 477 00:22:39,240 --> 00:22:40,840 Speaker 5: So that's going to be coming from government, from like 478 00:22:40,880 --> 00:22:43,359 Speaker 5: private investment. I mean, this covers everything. This covers everything 479 00:22:43,359 --> 00:22:45,680 Speaker 5: from grid to evs to you know, like how you're 480 00:22:45,720 --> 00:22:47,680 Speaker 5: going to be getting your solar panels on your houses, 481 00:22:47,920 --> 00:22:50,320 Speaker 5: getting wind farms in the sea. It really covers everything. 482 00:22:50,520 --> 00:22:52,200 Speaker 5: But it just shows that when you take a holistic view, 483 00:22:52,280 --> 00:22:54,640 Speaker 5: the cost is very high. You know, when you break 484 00:22:54,640 --> 00:22:55,960 Speaker 5: it down by year, it might be you know, a 485 00:22:55,960 --> 00:22:59,080 Speaker 5: few trillion per year, but over twenty sixtyeth period, that 486 00:22:59,200 --> 00:23:01,480 Speaker 5: is a lot of money for the world to bear. 487 00:23:02,000 --> 00:23:04,600 Speaker 2: So Aiman, talk to us about the next ten years. 488 00:23:04,600 --> 00:23:08,080 Speaker 2: What are some of the critical milestones that need to 489 00:23:08,119 --> 00:23:10,480 Speaker 2: be met here? It feels like it's more than just 490 00:23:10,520 --> 00:23:12,280 Speaker 2: everybody's going to have an electric vehicle. 491 00:23:12,720 --> 00:23:12,920 Speaker 6: Yeah. 492 00:23:12,960 --> 00:23:14,840 Speaker 5: So when I was reading through this beautiful ten fifty 493 00:23:14,840 --> 00:23:16,480 Speaker 5: page report, thing one thing that really stuck out to 494 00:23:16,520 --> 00:23:18,320 Speaker 5: me at first is the report says that right now 495 00:23:18,359 --> 00:23:20,800 Speaker 5: we start the tenure countdown, in ten years time, there 496 00:23:20,800 --> 00:23:23,440 Speaker 5: will be one ice vehicle sold. It'll be all electric 497 00:23:23,520 --> 00:23:26,119 Speaker 5: vehicles being sold. They want to triple renewables in that 498 00:23:26,119 --> 00:23:27,880 Speaker 5: period as well to be on track for next year, 499 00:23:27,880 --> 00:23:29,800 Speaker 5: and then triple them again in the next twenty years. 500 00:23:29,800 --> 00:23:31,760 Speaker 5: So it really is kind of everything is doubling down. 501 00:23:32,040 --> 00:23:32,280 Speaker 6: You know. 502 00:23:32,440 --> 00:23:35,040 Speaker 5: They have this whole section about sustainable aviation fuel, trying 503 00:23:35,040 --> 00:23:37,560 Speaker 5: to decarbonize aviation. I think they said that something like 504 00:23:37,640 --> 00:23:40,840 Speaker 5: the crops you have to grow to get this spio 505 00:23:40,880 --> 00:23:43,320 Speaker 5: mass to get the stainial aviation fuel will take up 506 00:23:43,359 --> 00:23:45,359 Speaker 5: as much space as the whole European Union. So some 507 00:23:45,400 --> 00:23:47,680 Speaker 5: of these numbers are just really really huge, but are 508 00:23:47,760 --> 00:23:49,440 Speaker 5: needed in the next ten fifteen years. 509 00:23:49,720 --> 00:23:52,399 Speaker 3: And that's so important because we also need the stuff 510 00:23:52,440 --> 00:23:55,560 Speaker 3: for food and things, so there's also that that poses 511 00:23:55,600 --> 00:23:59,919 Speaker 3: a lot of issues. I'm also curious as to the 512 00:24:00,240 --> 00:24:04,439 Speaker 3: divide between developed and emerging markets when it comes to energy, 513 00:24:04,520 --> 00:24:06,879 Speaker 3: because you know, Europe, in the US, we may have 514 00:24:06,920 --> 00:24:09,280 Speaker 3: the money to tax and then maybe have the money 515 00:24:09,320 --> 00:24:12,959 Speaker 3: to put forth, but India is sure doesn't, Africa sure doesn't, 516 00:24:13,359 --> 00:24:16,520 Speaker 3: parts of Southeast Asia sure don't. How does the report 517 00:24:16,520 --> 00:24:18,520 Speaker 3: address that lack of financing? 518 00:24:19,000 --> 00:24:21,119 Speaker 5: Yeah, it's interesting I think on both hands on some 519 00:24:21,160 --> 00:24:23,399 Speaker 5: ways when it comes to like example, grid grid is 520 00:24:23,440 --> 00:24:25,280 Speaker 5: a huge thing, one of the actually the second biggest 521 00:24:25,280 --> 00:24:27,639 Speaker 5: costs to come into this twenty fifteen trillion, and actually 522 00:24:27,640 --> 00:24:29,640 Speaker 5: in some of the developing nations, as you said India 523 00:24:29,680 --> 00:24:32,000 Speaker 5: for example, because the grid is actually knew there, it's 524 00:24:32,040 --> 00:24:33,800 Speaker 5: easier to upgrade it and to kind of build it out, 525 00:24:33,880 --> 00:24:35,720 Speaker 5: you know, when you're talking about the British grid or 526 00:24:35,720 --> 00:24:38,080 Speaker 5: the American grid, these ones are much older and harder 527 00:24:38,119 --> 00:24:39,720 Speaker 5: to move forward. But then when it comes to things 528 00:24:39,760 --> 00:24:42,000 Speaker 5: like renewables, you know, we still see lots of coal, 529 00:24:42,040 --> 00:24:44,479 Speaker 5: lots of gas, lots of fossil fuels being used in 530 00:24:44,640 --> 00:24:47,560 Speaker 5: Southeast Asia into the twenty thirties just because you know, 531 00:24:47,600 --> 00:24:50,800 Speaker 5: they need that. Supply demand is growing, econditioning demand is growing, 532 00:24:51,040 --> 00:24:52,760 Speaker 5: you know, a growing middle class, which means that they 533 00:24:52,800 --> 00:24:54,240 Speaker 5: just need to keep up and they can't be going 534 00:24:54,240 --> 00:24:56,080 Speaker 5: on too renewables as quickly as Europe can. 535 00:24:56,119 --> 00:24:59,760 Speaker 2: For example, our thanks to Aman Farhat Lumberg European Power 536 00:24:59,800 --> 00:25:01,000 Speaker 2: and Renewables Reporter. 537 00:25:01,200 --> 00:25:02,600 Speaker 3: Coming up on the program, we're going to take a 538 00:25:02,600 --> 00:25:04,520 Speaker 3: look at how one company is looking to fix your 539 00:25:04,680 --> 00:25:05,760 Speaker 3: terrible board meetings. 540 00:25:05,840 --> 00:25:08,960 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio providing in 541 00:25:09,000 --> 00:25:11,239 Speaker 2: depth research and data on two thousand companies and one 542 00:25:11,320 --> 00:25:14,360 Speaker 2: hundred and thirty industries. You can access Bloomberg Intelligence via 543 00:25:14,400 --> 00:25:15,520 Speaker 2: Big on the terminal. 544 00:25:15,720 --> 00:25:18,639 Speaker 3: I'm Paul Sweeney and I'm Alex Steel, and this is Bloomberg. 545 00:25:24,200 --> 00:25:28,560 Speaker 1: This is Bloomberg Intelligence with Alex Steel and Paul Sweeney 546 00:25:28,920 --> 00:25:30,160 Speaker 1: on Bloomberg Radio. 547 00:25:31,320 --> 00:25:34,080 Speaker 3: We move now to politics. Half of swing state voters 548 00:25:34,119 --> 00:25:37,440 Speaker 3: say they're worried about violence surrounding the US presidential election. Now, 549 00:25:37,440 --> 00:25:40,120 Speaker 3: that's according to the May Bloomberg News Morning Console poll. 550 00:25:40,359 --> 00:25:42,840 Speaker 2: Many swing state voters also said they're worried that the 551 00:25:42,880 --> 00:25:46,640 Speaker 2: growing presence of artificial intelligence could one day diminish privacy 552 00:25:46,720 --> 00:25:47,800 Speaker 2: and hurt job prospects. 553 00:25:47,920 --> 00:25:50,240 Speaker 3: For more, we were joined by Jody Schneider, political news 554 00:25:50,240 --> 00:25:52,480 Speaker 3: director for Bloomberg TV and Radio, and we first asked 555 00:25:52,520 --> 00:25:55,440 Speaker 3: Jody about violence being that big concern in the latest poll. 556 00:25:55,800 --> 00:25:58,400 Speaker 8: We've been doing this poll now since last fall, as 557 00:25:58,440 --> 00:26:03,080 Speaker 8: you know, Paul, and we've been asking about the candidates themselves, 558 00:26:03,080 --> 00:26:05,720 Speaker 8: and we continued to ask about that, but we wanted 559 00:26:05,760 --> 00:26:08,399 Speaker 8: to ask on some issues as well, and this seemed 560 00:26:08,440 --> 00:26:10,960 Speaker 8: to be one that's percolating out there quite a bit 561 00:26:11,840 --> 00:26:14,080 Speaker 8: that we hear a lot from and so we went 562 00:26:14,119 --> 00:26:18,200 Speaker 8: and asked the voters themselves, as in these swing states, 563 00:26:18,200 --> 00:26:21,240 Speaker 8: in these seven swing states, and as you noted, about 564 00:26:21,280 --> 00:26:24,080 Speaker 8: half say they are concerned about that, and it seems 565 00:26:24,119 --> 00:26:29,000 Speaker 8: to be pretty evenly split between Republicans and Democrats in 566 00:26:29,080 --> 00:26:32,920 Speaker 8: terms of that concern. So that's real and that could 567 00:26:33,000 --> 00:26:36,160 Speaker 8: affect them in terms of how they vote, perhaps whether 568 00:26:36,240 --> 00:26:40,920 Speaker 8: they vote, because both parties really need a big turnout. 569 00:26:41,480 --> 00:26:44,199 Speaker 8: It's going to be, as everyone expects, a close election, 570 00:26:44,600 --> 00:26:47,080 Speaker 8: close in terms of the popular vote, and of course 571 00:26:47,200 --> 00:26:51,080 Speaker 8: that affects the electoral college, which is where it comes 572 00:26:51,119 --> 00:26:53,120 Speaker 8: down to where the rubber meets the road. 573 00:26:53,160 --> 00:26:58,000 Speaker 3: If you will, Jody, does the fear sway how people 574 00:26:58,000 --> 00:26:59,400 Speaker 3: are going to vote. 575 00:26:59,359 --> 00:27:03,320 Speaker 8: Well, I think it more could affect whether they vote, Alex, 576 00:27:03,400 --> 00:27:06,160 Speaker 8: I really think that's part of it. If you fear that, 577 00:27:06,359 --> 00:27:09,000 Speaker 8: you know, perhaps there's going to be violence surrounding this, 578 00:27:09,240 --> 00:27:12,720 Speaker 8: or there's this kind of fear about things, maybe you say. 579 00:27:12,880 --> 00:27:15,480 Speaker 8: And we've seen a lot of polling around the fact 580 00:27:15,480 --> 00:27:19,040 Speaker 8: that there isn't a lot of excitement around either candidate. 581 00:27:19,600 --> 00:27:22,080 Speaker 8: We had at one point polls showing that they wish 582 00:27:22,160 --> 00:27:25,840 Speaker 8: there was someone other than Biden. Or Trump, but this 583 00:27:25,880 --> 00:27:27,600 Speaker 8: is who we have, This is who's going to be 584 00:27:27,640 --> 00:27:31,320 Speaker 8: on the ballots, and so I think it's more going 585 00:27:31,359 --> 00:27:34,080 Speaker 8: to be a turnout issue. We'll see now. Of course, 586 00:27:34,560 --> 00:27:37,200 Speaker 8: we do this pulling and we all talk about polls 587 00:27:37,240 --> 00:27:41,040 Speaker 8: a great deal in an election year like this, but 588 00:27:41,320 --> 00:27:44,479 Speaker 8: it's still it's still about five and a half months 589 00:27:44,520 --> 00:27:47,920 Speaker 8: out before the election, and a lot of people don't 590 00:27:47,920 --> 00:27:51,240 Speaker 8: make up their minds fully until after Labor Day. So 591 00:27:51,400 --> 00:27:54,720 Speaker 8: this is still this is an issue that could affect voting, 592 00:27:55,040 --> 00:27:58,920 Speaker 8: but we still have plenty of time before people actually 593 00:27:58,960 --> 00:27:59,639 Speaker 8: start voting. 594 00:28:00,160 --> 00:28:02,800 Speaker 2: So Jody, aside from these issues, what are kind of 595 00:28:02,560 --> 00:28:07,640 Speaker 2: the key issues that are polling has kind of illuminated 596 00:28:07,720 --> 00:28:09,480 Speaker 2: are kind of going to be the key issues for 597 00:28:09,520 --> 00:28:11,240 Speaker 2: these candidates through the election. 598 00:28:11,960 --> 00:28:13,560 Speaker 3: Yeah, so the race is narrowing. 599 00:28:13,640 --> 00:28:17,640 Speaker 8: According to again, these are seven swing states where we think, 600 00:28:17,760 --> 00:28:19,879 Speaker 8: you know, a lot of the election will be determined. 601 00:28:20,160 --> 00:28:23,240 Speaker 8: And we found that six and ten of the voters 602 00:28:23,480 --> 00:28:29,000 Speaker 8: worry about misinformation, not only violence but misinformation. Forty six 603 00:28:29,040 --> 00:28:34,160 Speaker 8: percent had concerns about perhaps foreign interference in the election. 604 00:28:35,040 --> 00:28:39,920 Speaker 8: So that's an interesting take. We've seen former President Trump's 605 00:28:40,240 --> 00:28:43,920 Speaker 8: swing state lead dipping slightly. He is still ahead in 606 00:28:43,960 --> 00:28:46,520 Speaker 8: many of these swing states according to our poll, but 607 00:28:46,800 --> 00:28:49,520 Speaker 8: it has dipped slightly since the last time we pulled 608 00:28:49,800 --> 00:28:52,520 Speaker 8: about a month ago, So that could be viewed as 609 00:28:52,560 --> 00:28:56,360 Speaker 8: a little bit of encouraging news for those who support Biden, 610 00:28:56,400 --> 00:28:59,280 Speaker 8: but those who support Trump say, well, he's still ahead there, 611 00:29:00,120 --> 00:29:03,360 Speaker 8: So we have that. We also have that Biden gaining 612 00:29:03,400 --> 00:29:08,280 Speaker 8: ground from April in each of the competitive sun Belt states, 613 00:29:08,880 --> 00:29:13,640 Speaker 8: So that's an interesting factor that he's gaining there. The 614 00:29:13,680 --> 00:29:16,680 Speaker 8: states where he needs to win. He absolutely must win 615 00:29:16,720 --> 00:29:21,720 Speaker 8: what we're calling those blue wall states of Wisconsin, Pennsylvania, Michigan, 616 00:29:21,760 --> 00:29:25,480 Speaker 8: which he won last time, which Hillary Clinton famously did 617 00:29:25,480 --> 00:29:29,440 Speaker 8: not win in her race against Donald Trump. We're finding 618 00:29:29,560 --> 00:29:32,800 Speaker 8: that he is doing a little bit better there. They're 619 00:29:32,880 --> 00:29:37,600 Speaker 8: separated by no more than two percentage points in those 620 00:29:37,720 --> 00:29:40,840 Speaker 8: blue wall states, so very close there. 621 00:29:41,080 --> 00:29:44,640 Speaker 3: Judy, when you talked about misinformation, do we have an 622 00:29:44,640 --> 00:29:46,760 Speaker 3: idea where voters are going to get their information if 623 00:29:46,760 --> 00:29:49,120 Speaker 3: they're worried about misinformation. 624 00:29:49,440 --> 00:29:51,880 Speaker 8: Well, that's a really good question, Alex and so many 625 00:29:51,880 --> 00:29:54,400 Speaker 8: of them talk about misinformation, but then they go to 626 00:29:54,560 --> 00:29:58,440 Speaker 8: places where they are, you know, where there's potentially misinformation 627 00:29:58,640 --> 00:30:02,320 Speaker 8: and a lot of voters are getting their news from 628 00:30:02,360 --> 00:30:06,080 Speaker 8: a lot of places that we don't necessarily consider traditional 629 00:30:06,120 --> 00:30:10,280 Speaker 8: news outlets, so it's an interesting question. We did ask 630 00:30:10,320 --> 00:30:13,760 Speaker 8: about TikTok. That's been a big issue the US government 631 00:30:13,880 --> 00:30:18,960 Speaker 8: has under legislation that was passed for emergency funding for 632 00:30:19,160 --> 00:30:21,600 Speaker 8: Ukraine and other places in the world. It was in 633 00:30:21,640 --> 00:30:25,600 Speaker 8: there a ban on TikTok if the Chinese parent by 634 00:30:25,680 --> 00:30:28,320 Speaker 8: Dance does not sell it. We asked these swing state 635 00:30:28,400 --> 00:30:30,840 Speaker 8: voters whether they thought it was a good idea to 636 00:30:30,960 --> 00:30:34,360 Speaker 8: ban TikTok, and almost half said they thought it was, 637 00:30:34,920 --> 00:30:38,719 Speaker 8: So another interesting wrinkle there in terms of information all right. 638 00:30:38,720 --> 00:30:41,360 Speaker 3: Thanks to Jody Schneider, political news director for Bloomberg TV 639 00:30:41,480 --> 00:30:42,480 Speaker 3: and Radio, we. 640 00:30:42,440 --> 00:30:44,720 Speaker 2: Now moved to the cloud space. ZECH, a cloud based 641 00:30:44,720 --> 00:30:47,320 Speaker 2: software company, is now trying to fix any potential dread 642 00:30:47,440 --> 00:30:49,200 Speaker 2: you may have for an upcoming board meeting. 643 00:30:49,360 --> 00:30:52,280 Speaker 3: The company distills hundreds of pages of corporate documents and 644 00:30:52,320 --> 00:30:55,080 Speaker 3: your interactive websites for boards to expedite meetings, and even 645 00:30:55,160 --> 00:30:58,040 Speaker 3: has an AI product, and recently ZEK announced it closes 646 00:30:58,080 --> 00:31:01,240 Speaker 3: seven and a half million dollar investment led by Salesforce Ventures. 647 00:31:01,560 --> 00:31:03,280 Speaker 2: For more and all this, we were joined by ZECH 648 00:31:03,360 --> 00:31:06,719 Speaker 2: co founder Edward Norton. We first asked him more about 649 00:31:06,760 --> 00:31:08,040 Speaker 2: what zech is trying to do. 650 00:31:08,360 --> 00:31:15,000 Speaker 9: We're trying to make the experience between management of organizations, 651 00:31:15,760 --> 00:31:19,200 Speaker 9: and I say that meaning corporations or nonprofits because obviously 652 00:31:19,280 --> 00:31:22,840 Speaker 9: we've got a couple of million nonprofit organizations in this 653 00:31:22,920 --> 00:31:25,560 Speaker 9: country that have governance and boards and stuff like that. 654 00:31:26,320 --> 00:31:30,520 Speaker 9: We're trying to take what we feel is an increasingly 655 00:31:30,560 --> 00:31:34,959 Speaker 9: toxic dynamic and reform it into being what it's supposed 656 00:31:35,000 --> 00:31:40,680 Speaker 9: to be, which is a relationship that propels in organizations, supports, 657 00:31:40,880 --> 00:31:45,360 Speaker 9: you know, brings additional leverage positivity to an organization. And 658 00:31:45,720 --> 00:31:49,440 Speaker 9: we you know, I've definitely had some people say to me, like, 659 00:31:49,480 --> 00:31:51,440 Speaker 9: you have an interesting day job, why would you get 660 00:31:51,520 --> 00:31:52,240 Speaker 9: involved in a. 661 00:31:52,480 --> 00:31:54,400 Speaker 2: Your day job. Just for folks that on the radio, 662 00:31:54,560 --> 00:31:56,480 Speaker 2: Edward Norton actor has been in a bunch of movies 663 00:31:56,520 --> 00:31:57,280 Speaker 2: and all that kind of stuff. 664 00:31:57,400 --> 00:32:01,600 Speaker 9: Yeah, the and I and I will, I will admit that, 665 00:32:02,000 --> 00:32:06,320 Speaker 9: you know, on the surface, like a software platform for 666 00:32:07,040 --> 00:32:12,720 Speaker 9: for board governance features seems pretty esoteric, but it grew 667 00:32:12,800 --> 00:32:15,520 Speaker 9: out of it grew out of my own experiences over 668 00:32:15,520 --> 00:32:19,040 Speaker 9: the last thirty years, not disimilar to years from serving 669 00:32:19,080 --> 00:32:22,520 Speaker 9: on the board of arts organizations. Serving on you know, 670 00:32:22,640 --> 00:32:26,000 Speaker 9: conservation organization boards. And then as I built my own companies, 671 00:32:27,560 --> 00:32:30,920 Speaker 9: and I've built a few software companies that we had 672 00:32:30,920 --> 00:32:34,040 Speaker 9: our own boards, people like Fred Wilson from Union Square 673 00:32:34,160 --> 00:32:37,600 Speaker 9: or you know Excel or Graylock or these these firms. 674 00:32:38,520 --> 00:32:40,800 Speaker 9: We were on the management side and we were experiencing 675 00:32:40,840 --> 00:32:43,160 Speaker 9: what it meant to have a board. And then when 676 00:32:43,160 --> 00:32:44,880 Speaker 9: I sold one of my companies and I joined the 677 00:32:44,920 --> 00:32:48,360 Speaker 9: board of GoFundMe, the company that acquired us, you know, 678 00:32:48,400 --> 00:32:52,240 Speaker 9: I started sitting on corporate boards and we my partners, 679 00:32:52,240 --> 00:32:55,480 Speaker 9: and I really started feeling that that this there was 680 00:32:55,520 --> 00:32:57,680 Speaker 9: this elephant in the room, which is that is that 681 00:32:58,120 --> 00:33:00,920 Speaker 9: companies go through four to eight times a year. They 682 00:33:00,920 --> 00:33:03,440 Speaker 9: go pencils down to get ready for this thing that 683 00:33:03,640 --> 00:33:06,920 Speaker 9: essentially to them feels like a hall monitoring moment. And 684 00:33:07,040 --> 00:33:08,920 Speaker 9: board members, on the other hand, when I was a 685 00:33:08,960 --> 00:33:11,080 Speaker 9: board member, you got thirty six hours before the meeting, 686 00:33:11,080 --> 00:33:13,160 Speaker 9: You get a ninety page PDF and you're supposed to 687 00:33:13,200 --> 00:33:15,800 Speaker 9: read it in the airport terminal, and then you go 688 00:33:15,800 --> 00:33:17,440 Speaker 9: to the meeting and get it read back to you. 689 00:33:17,440 --> 00:33:18,040 Speaker 2: You know what I mean. 690 00:33:18,160 --> 00:33:20,800 Speaker 3: Like there was just so you're looking to make it 691 00:33:21,040 --> 00:33:24,600 Speaker 3: a more what interactive visual engaging experience. 692 00:33:24,680 --> 00:33:28,480 Speaker 9: I think we say two things. One is quantitatively, board 693 00:33:28,480 --> 00:33:30,960 Speaker 9: meetings are an enormous waste of time for everybody, and 694 00:33:31,000 --> 00:33:33,000 Speaker 9: that has to do with the amount of redundant time 695 00:33:33,040 --> 00:33:36,360 Speaker 9: waste on setting these meetings up and the presentation materials. 696 00:33:36,400 --> 00:33:39,200 Speaker 9: And that can be crushed down by having cloud based 697 00:33:40,040 --> 00:33:43,480 Speaker 9: AI powered tools that make it like a tenth the 698 00:33:43,560 --> 00:33:46,200 Speaker 9: time for a company. On zech, a company can set 699 00:33:46,240 --> 00:33:48,400 Speaker 9: up for a board meeting in one tenth the time 700 00:33:48,920 --> 00:33:53,320 Speaker 9: that they were using to prep before it. Board members 701 00:33:53,360 --> 00:33:56,680 Speaker 9: should get to read something that's you know, you wouldn't 702 00:33:56,720 --> 00:33:59,840 Speaker 9: read in the New York Times or Bloomberg on a PDF. 703 00:33:59,880 --> 00:34:03,080 Speaker 9: You read it in a mobile friendly scroll right that 704 00:34:03,240 --> 00:34:06,320 Speaker 9: we expect that now and so everything about the user 705 00:34:06,360 --> 00:34:09,000 Speaker 9: interface should be easier for both sides of the table. 706 00:34:09,320 --> 00:34:11,720 Speaker 9: But also think about this, think about how much time, 707 00:34:12,200 --> 00:34:17,160 Speaker 9: how many professional talented people with time is valuable sit 708 00:34:17,239 --> 00:34:21,960 Speaker 9: there in board meetings, approving minutes, approvals, approving stock option packages, 709 00:34:22,160 --> 00:34:23,759 Speaker 9: things that they ought to be able to do from 710 00:34:23,800 --> 00:34:27,360 Speaker 9: the airport lounge in advance. So we built governance function 711 00:34:27,440 --> 00:34:29,160 Speaker 9: that can be interactive and mobile. 712 00:34:29,160 --> 00:34:32,160 Speaker 2: And also, so your customer is the board. 713 00:34:32,480 --> 00:34:35,560 Speaker 9: The customer is the company and the board. You know, yeah, 714 00:34:35,920 --> 00:34:41,080 Speaker 9: both sides, management and board members suffer in different ways, 715 00:34:41,120 --> 00:34:43,680 Speaker 9: and we've tried to reform it. But when you crush 716 00:34:43,760 --> 00:34:47,760 Speaker 9: the redundant inefficiency of time waste, you improve the quality 717 00:34:47,800 --> 00:34:49,719 Speaker 9: of the meeting too, because a board meeting should be 718 00:34:49,719 --> 00:34:53,799 Speaker 9: a forward looking experience, not a You don't want to 719 00:34:53,840 --> 00:34:58,400 Speaker 9: spend hours looking backward. Everybody can ingest the looking backward 720 00:34:58,440 --> 00:35:01,359 Speaker 9: part before the meeting. You want meeting to be propulsive 721 00:35:01,520 --> 00:35:04,600 Speaker 9: and additive to where the company or the organization is 722 00:35:04,600 --> 00:35:07,040 Speaker 9: trying to go. And the best thing about what people 723 00:35:07,040 --> 00:35:08,920 Speaker 9: are saying to us is not just oh, we really 724 00:35:08,960 --> 00:35:11,439 Speaker 9: love the user interface. It's much easier, it's easier to read. 725 00:35:12,120 --> 00:35:15,040 Speaker 9: We love that they're saying to us. This has radically 726 00:35:15,120 --> 00:35:19,000 Speaker 9: improved the quality and the value of the meeting itself 727 00:35:19,040 --> 00:35:21,040 Speaker 9: and what we're getting out of our board. 728 00:35:21,840 --> 00:35:23,759 Speaker 3: So you guys just raised about seven and a half 729 00:35:23,760 --> 00:35:28,080 Speaker 3: million Series A led by Salesforce Ventures, including some other 730 00:35:28,120 --> 00:35:29,759 Speaker 3: guys as well. What are you gonna do with it? 731 00:35:30,120 --> 00:35:31,520 Speaker 3: And what's sort of your angle here? 732 00:35:32,160 --> 00:35:34,759 Speaker 9: Well, you know, I think if you look at I mean, 733 00:35:34,800 --> 00:35:39,000 Speaker 9: first of all, Salesforce to this day is still I mean, 734 00:35:39,000 --> 00:35:44,600 Speaker 9: they still are the greatest innovator in cloud based corporate tools. 735 00:35:45,040 --> 00:35:48,120 Speaker 9: And I've known Mark Benyov a long time, even though 736 00:35:48,560 --> 00:35:50,239 Speaker 9: I never told him that we were doing this with 737 00:35:50,280 --> 00:35:52,200 Speaker 9: his own team until it was done, because I didn't 738 00:35:52,239 --> 00:35:54,360 Speaker 9: I didn't want to, you know, I didn't want it 739 00:35:54,400 --> 00:35:57,040 Speaker 9: to come from the top down. The Salesforce team is 740 00:35:57,080 --> 00:36:00,520 Speaker 9: really phenomenal. But you know, our fantasy was to work 741 00:36:00,560 --> 00:36:06,520 Speaker 9: with Salesforce because really nobody, nobody understands the business of 742 00:36:07,480 --> 00:36:11,000 Speaker 9: cloud based corporate tools better than they do. And I 743 00:36:11,040 --> 00:36:13,120 Speaker 9: also like their ethos as a company. I think they 744 00:36:13,160 --> 00:36:16,560 Speaker 9: have a great customer service ethos there. But you know, 745 00:36:16,600 --> 00:36:19,960 Speaker 9: if you look at think about today, would you ever 746 00:36:20,000 --> 00:36:24,400 Speaker 9: get a FedEx package with signature tabs on your legal documents? 747 00:36:24,440 --> 00:36:24,480 Speaker 7: No? 748 00:36:24,600 --> 00:36:28,520 Speaker 9: You get it in DocuSign now right. You don't manage 749 00:36:28,520 --> 00:36:31,760 Speaker 9: your cap table in Excel spreadsheets anymore. You use Karta. 750 00:36:32,320 --> 00:36:35,960 Speaker 9: And we've made this evolution towards lots of aspects of 751 00:36:36,000 --> 00:36:39,719 Speaker 9: corporate function have gone into the cloud, but this really 752 00:36:39,760 --> 00:36:43,680 Speaker 9: critical function hasn't. And we think that on a business level, 753 00:36:43,719 --> 00:36:46,160 Speaker 9: to be honest, if you look at you know, Karta, 754 00:36:46,280 --> 00:36:49,360 Speaker 9: which is a seven billion dollar private company and DocuSign 755 00:36:49,480 --> 00:36:52,920 Speaker 9: is a fifteen billion dollar public company. There's an enormous 756 00:36:52,960 --> 00:36:59,400 Speaker 9: market in relatively low priced corporate software tools, and we 757 00:36:59,440 --> 00:37:02,480 Speaker 9: really thought that this was a good business. We think 758 00:37:02,520 --> 00:37:06,960 Speaker 9: there's a very large marketplace of companies and nonprofit orgs 759 00:37:07,040 --> 00:37:10,239 Speaker 9: that need to reform this critical piece. 760 00:37:10,560 --> 00:37:12,680 Speaker 3: All right, thanks? Is that co founder Edward Norton