Speaker 1: This is Bloomberg Business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business finance and tech news as it happened. Sloomberg
Speaker 1: Business Week with Carol Messer and Tim Stenovic on Bloomberg Radio. Hi, everyone,
Speaker 1: welcome to the weekend edition of Bloomberg Business Week. I'm
Speaker 1: Carol Masser, of course, Maddie Mills in for Tim Stanovic,
Speaker 1: who is on leave. Well, a holiday short and trading
Speaker 1: week and a job's report in the US, and then
Speaker 1: a former president pleading not guilty to thirty four counts
Speaker 1: of falsifying business records in an alleged criminal scheme to
Speaker 1: manipulate the twenty sixteen election. It was a busy week,
Speaker 1: to say the least. It was a very busy week.
Speaker 1: And coming up this hour a bit of perspective on
Speaker 1: the first ever indictment and criminal charges of an ex
Speaker 1: commander in chief and what that means for the twenty
Speaker 1: twenty four presidential election. Plus our BusinessWeek team explains how
Speaker 1: a group of undercover labor organizers are making serious progress
Speaker 1: in unionization efforts at the likes of Amazon, Starbucks and more.
Speaker 1: Get ready to learn about salting. Not a new concept,
Speaker 1: but it's back in favor. All right, all of that
Speaker 1: to come, We begin with the ten companies to Watch
Speaker 1: for the second quarter, based on scenarios from our Bloomberg
Speaker 1: Intelligence researchers, each with important catalysts coming in the next
Speaker 1: few months. The list follows our roundup of fifty Companies
Speaker 1: to Watch, revealed back in January. This new list includes
Speaker 1: companies in ai IT, beauty and banking, sneakers and in
Speaker 1: the selling of stocks. It's kind of a mixed list.
Speaker 1: I love it with the details. Joining us right now
Speaker 1: the editor of Bloomberg Business Week, Joe Webber and Tim Craighead,
Speaker 1: He's director of Research Content and senior European equity strategist
Speaker 1: for Bloomberg Intelligence. Guys, thanks so much for being here
Speaker 1: at love. When we do these lists, Joe, let's kick
Speaker 1: it off remind us how it all comes together. So
Speaker 1: we do this exercise called fifty Companies to Watch that
Speaker 1: publishes in our Gear Ahead issue in January, and we
Speaker 1: love that project so much that we started talking to
Speaker 1: Bloomberg Intelligence last year about how can we keep this going,
Speaker 1: and we came up with this idea to do ten
Speaker 1: companies every quarter, and what we want to do here
Speaker 1: is really talk about just that quarter. These are these
Speaker 1: are whereas the fifty companies to watch is for the
Speaker 1: whole year. We just want to talk about who could
Speaker 1: shine or maybe not not have such a great outing
Speaker 1: in a given quarter. And so what the analysts at
Speaker 1: b I, led by Tim do is basically have their
Speaker 1: magical spreadsheets that they push everything through and what they're
Speaker 1: really looking at for these quarters are catalysts and those
Speaker 1: are the things that allow them to kind of discern
Speaker 1: the tin companies that we want to talk about on
Speaker 1: any given quarter. Um. And what I what I like
Speaker 1: about it is that there's always this element of surprise.
Speaker 1: There's there's a global nature to this. There's companies you've
Speaker 1: never ever heard of. But that surprise is part of
Speaker 1: what I think brings a little bit of the charm
Speaker 1: to it. Well, we have to say before you got started, Um,
Speaker 1: we were talking a little bit with Tim before we
Speaker 1: went on air, and like we were surprised about a
Speaker 1: name like Gap. We'll get into that in just a moment. Tim,
Speaker 1: come on in and talk to us about the met metrics.
Speaker 1: You know that you look to kind of put this
Speaker 1: list together, absolutely, and thanks for thanks for having us
Speaker 1: the list, whether it's the fifty for the year or
Speaker 1: it's the ten and a quarter. As Joel said, has
Speaker 1: a catalyst, and there's there's actually three pieces to it,
Speaker 1: with the catalyst being a very critical one. The first one, however,
Speaker 1: is that our analysts has to have a high, high conviction,
Speaker 1: strong view. The second pieces that view needs to be
Speaker 1: different from what the market generally is perceiving, and that
Speaker 1: could be, you know, our expectation for revenue or earnings, um,
Speaker 1: it could be the expectation of a restructuring and what
Speaker 1: its impact could be. But comparing that to consensus or
Speaker 1: what we think investors are embedding m is a critical.
Speaker 1: So it's a strong view that's differentiated. And then there's
Speaker 1: that catalyst. It's a trigger that we think can happen
Speaker 1: that will bring the market around to our view. And
Speaker 1: that's how we work. It's this three pillar approach. And
Speaker 1: as you've said, it's across regions, there's positives, there's negatives,
Speaker 1: it's across all sectors, and yeah, it's it's a good
Speaker 1: bottom up list, which I think is particularly interesting right
Speaker 1: now in a world that's so macro top down driven.
Speaker 1: It's refreshing to take a bottom up look at something
Speaker 1: that's a little different. Hallelujah. I'm tired of macro talk.
Speaker 1: Give me specifics exactly. We love We love to name names,
Speaker 1: Carol and I speaking of naming those names though, Tim,
Speaker 1: can you just run us through the winners here? Who
Speaker 1: are the ten companies on the list? Yeah? Sure? Thing
Speaker 1: so Asia, there's two. One is an insurance company called AIA.
Speaker 1: The other is Hong Kong Exchanges, which is the stock
Speaker 1: exchange in Hong Kong. In Europe there's three. There's a
Speaker 1: bank BBVA, it's a big Spanish bank, but as we'll talk,
Speaker 1: there's a Mexican element to it. Cap Gemini, which was
Speaker 1: one of the biggest it service companies globally, and Bestas,
Speaker 1: which is one of the biggest producers of wind turbines
Speaker 1: in the US. There's a consumer bent the things. Uh,
Speaker 1: there's Sketchers, there's Gap stores, Alta Beauty and Casey's General Stores.
Speaker 1: But they all have a little bit of a different
Speaker 1: twist in terms of why we're either positive or negative.
Speaker 1: And last but not least, GFL Environmental, which is a
Speaker 1: waste management company that we've got actually a little bit
Speaker 1: of concern about Can I ask a question about the
Speaker 1: consumer piece in the US, Why do you think it
Speaker 1: was so heavily weighted to these consumer discretionary names. Yeah,
Speaker 1: well so there's it's interesting, you know, there are they
Speaker 1: all are in different businesses. So you've got footwear, you've
Speaker 1: got a peril, you've got beauty, you've got convenience stores.
Speaker 1: And what what our analysts are looking at is, again,
Speaker 1: what is the market thinking generally, there's a concern about
Speaker 1: where consumer spending is going. Consumer discretionary activity cases, for example,
Speaker 1: is we think susceptible to that risk, you know, the
Speaker 1: potential of trading down, you go into a convenient story,
Speaker 1: you buy a little bit less, you buy something cheaper.
Speaker 1: They all they are also looking to expand beyond their
Speaker 1: core of four Midwestern states where they're less well known,
Speaker 1: and it just presents a risk to what we think
Speaker 1: consensus is embedding. The other three are all very company
Speaker 1: specific stories that are that go beyond the economic cycle.
Speaker 1: So sketchers there, we all know those shoes. They're certainly
Speaker 1: quite compy, but they're going beyond the US business and
Speaker 1: they're opening in India, they're opening in Canada, so there's
Speaker 1: new distribution, there's a partnership with targets, its expanding their base.
Speaker 1: We think there's upside opportunity gap. A new CEO was
Speaker 1: coming in. They've re merchandise old Navy where they had
Speaker 1: problems last year. They've proven already to Banana Republic can
Speaker 1: do better than it was you know, not long ago,
Speaker 1: and they can adopt that to the gap itself. This
Speaker 1: is only a three billion dollar market cap company, you know,
Speaker 1: think about the brand and a new CEO comes in,
Speaker 1: We think that there's a real story to be had
Speaker 1: and alta, you know, a lot of our a lot
Speaker 1: of your listeners are gonna are gonna know this from
Speaker 1: the standpoint of the beauty shop. People are going back
Speaker 1: to the office, and regardless of the economy, people want
Speaker 1: to look nice, not consumer discretionaries, consumer staple inn That
Speaker 1: was truly so Tim. What about some some of the
Speaker 1: macro kind of pressures that obviously the economy has been
Speaker 1: been facing with with say inflation, which continues to you know,
Speaker 1: stick around and you know, defy the Federal Reserve a
Speaker 1: little bit. How does that plan to if at all?
Speaker 1: How you guys look at these companies in the quarter ahead. Well,
Speaker 1: I guess a couple of things come to mind. Their
Speaker 1: jol One is GFL. Now, this is a waste management company.
Speaker 1: They have been really driven by M and A in
Speaker 1: terms of acquiring companies, and that's fueled their expansion with
Speaker 1: higher inflation, higher interest rates, and you know, we do
Speaker 1: think that the FED is going to be higher for
Speaker 1: longer as opposed to necessarily pivoting quickly. But I won't
Speaker 1: get into the macro. Higher interest rates put a crimp
Speaker 1: on what we think they can do in terms of
Speaker 1: this M and A fueled growth. And by the way,
Speaker 1: recycled paper is very depressed right now as well, so
Speaker 1: we see some risk to GFL, even though you think
Speaker 1: of waste man management is kind of being a countercyclical business.
Speaker 1: Another one that sort of plays into this idea about
Speaker 1: inflation and higher interest rates is BBVA, the Banko bill Bao,
Speaker 1: the SKAYA. It's a big Spanish bank. They've got a
Speaker 1: big Mexican business where loan growth is actually quite resilient.
Speaker 1: They've got a big Spanish business that is very interest
Speaker 1: rate sensitive, so when interest rates go up, their net
Speaker 1: interest margin or profitability improves. That's a classic banks story
Speaker 1: and Frankly, the market seems to be preoccupied with their
Speaker 1: Turkey exposure, but that's now actually very small and we
Speaker 1: think it's well reserved and not a problem. So we
Speaker 1: think the market's focused on the wrong thing and not
Speaker 1: on the right thing, which is actually a positive story
Speaker 1: on interest rate. Tim, I guess yea. I'm still stuck
Speaker 1: on the gap because wasn't this like a seventy billion
Speaker 1: dollar market cap company at its heyday room to grow? Yew?
Speaker 1: It is so interesting to I mean literally, I Carol,
Speaker 1: I looked that up before we got on Eric because
Speaker 1: I was curious, like, Tim, are you sure about this? Yeah?
Speaker 1: I mean seventy billion to three and a half billion.
Speaker 1: It's now a small cap even though you think of
Speaker 1: the brand versus Casey's, which you know is a good company.
Speaker 1: But I think a lot of folks probably aren't to
Speaker 1: wear Casey's at eight and a half or alta in
Speaker 1: the mid twenties. Guys, Thank you so much, Tim, Joel
Speaker 1: Thanks to the editor Bloomberg Business Week, Joel Weber and
Speaker 1: Tim Craighead. He's director of Research Content and Senior European
Speaker 1: equity strategist for Bloomberg Intelligence. Joel will be back with
Speaker 1: us a bit later on. Explore the fullest of companies
Speaker 1: and more details though in the new issue, and be
Speaker 1: sure to check it out online at Bloomberg dot com,
Speaker 1: slash BusinessWeek and on the Bloomberg terminal. Of course, it's
Speaker 1: very cool and interactive. A lot of little moving bitmoji's there,
Speaker 1: so you got to check it out online. I love
Speaker 1: when there's some visuals that move online. All right, Coming up,
Speaker 1: we look at the ripple effects of the Trump indictment
Speaker 1: with Tim O'Brien and Bloomberg Opinion, who literally wrote the
Speaker 1: book on the art of being the Donald long before
Speaker 1: he was ever in the White House. This is Bloomberg.
Speaker 1: Thing is Bloomberg Business Week with Carol Masser and Tim
Speaker 1: Stenebec from Bloomberg Radio. I'm Carol Master with Madison Moves
Speaker 1: this week. As this office is done time and time again,
Speaker 1: we today uphold our solemn responsibility to ensure that everyone
Speaker 1: stands equal before the law. No amount of money and
Speaker 1: no amount of power changes that enduring American principle. We
Speaker 1: have to save our country. God bless you all. God
Speaker 1: bless you all. And I never thought anything like this
Speaker 1: could happen in America. Never thought it could happen. The
Speaker 1: only crime that I have committed is to fearlessly defend
Speaker 1: our nation from those seek to destroy it. Well, the
Speaker 1: two men you just heard from are on opposite sides
Speaker 1: of a first of its kind legal battle Manhattan District
Speaker 1: Attorney Alvin Bragg followed by former President Donald Trump at
Speaker 1: his home Marilago, both from this past Tuesday, and the
Speaker 1: two meeting in court this past week in the Big
Speaker 1: Apple as Donald Trump, the first former US president to
Speaker 1: be indicted, pled not guilty to thirty four counts of
Speaker 1: falsifying business records in an alleged criminal scheme to manipulate
Speaker 1: the twenty sixteen election, and he's accused of using hush
Speaker 1: money to bury damaging information about an affair to help
Speaker 1: boost his campaign's prospects. It's the legal worlds, right, maddie.
Speaker 1: Interconnecting or cross connecting with politics with business like it
Speaker 1: all just kind of came together, all right, Well, it
Speaker 1: seemed only right to have our Tim O'Brien in. Tim
Speaker 1: his senior executive editor of Bloomberg Opinion. A former editor
Speaker 1: and reporter for The New York Times. He is the
Speaker 1: author of Trump Nation, The Art of Being the Donald
Speaker 1: that was published back in two thousand and five. He
Speaker 1: joined Maddie and Me to help explain the fallout. Well,
Speaker 1: I don't know if it's a big page in our history.
Speaker 1: I think, like everything around Donald Trump, it's another referendum
Speaker 1: on our national identity and our institutions and what we
Speaker 1: want out of leadership and the rule of law and
Speaker 1: process more generally. And I think one of the challenges
Speaker 1: of the trump eras he challenges us to think about
Speaker 1: what we value and who we are. And I think,
Speaker 1: ideally the things that we try to value as a
Speaker 1: community that transcends political or ideological divides. But he's a
Speaker 1: person who actually lives in the divide. He pushes it apart,
Speaker 1: like you know, Hercules at the temple trying to knock
Speaker 1: the pillars down. And so I think today, you know,
Speaker 1: I think this was a slender case. I don't think
Speaker 1: it was the most weighty of the cases that he's facing.
Speaker 1: I think it's the first chapter of a long slog
Speaker 1: through a legal tar pit that he is afraid of
Speaker 1: and burdened by. Very subdued. Yeah, I mean, I think
Speaker 1: a lot of energy has gone out of the bubble.
Speaker 1: But he was subdued in court. However, on his social
Speaker 1: media feed he was as chatty and as bonkers as
Speaker 1: you could imagine, which I don't think his lawyers want
Speaker 1: him to be. Well, his lawyer said afterwards that he's
Speaker 1: going to commit to not posting about it on social media,
Speaker 1: which how do you? Yeah? Right? And when he was
Speaker 1: in the White House, they said don't tweet without supervision,
Speaker 1: he did it anyway, He's going to do whatever he wants. Yeah,
Speaker 1: I think it's a come uppance. You know, he's someone
Speaker 1: who's used to being in control of process in his image,
Speaker 1: and he's trotted out on a public stage and humiliated,
Speaker 1: even if the charges aren't the weightiest there are. I'm
Speaker 1: surprised that you think that it's humiliating given the weight
Speaker 1: of the charges. Now, well, he's a New Yorker, he's
Speaker 1: a native New Yorker. He made his bones here. This
Speaker 1: is a place where he got discovered, where he carried
Speaker 1: down the family business, where he triumphed. And he's basically
Speaker 1: being told by a court in that same city that
Speaker 1: you are a criminal and that we're going to prosecute
Speaker 1: you for it. And had he not been president, he
Speaker 1: would have been perp walked and handcuffed too, so that
Speaker 1: would any of us would be humiliated by that. He's
Speaker 1: also I think he will digest that as he does,
Speaker 1: and it will feed his desire to fight back. I
Speaker 1: don't think that means he's capitulating, but I don't think
Speaker 1: he was happy. Timmy, you did write a book and
Speaker 1: you spent a lot of time with the president. How
Speaker 1: do you think about the time you spent with the
Speaker 1: president a lot of conversations with him, and how you
Speaker 1: think about kind of what's happened since then? And then, Well,
Speaker 1: he was such a different person during the time that
Speaker 1: I spent Well, he was a New York real estate
Speaker 1: developer who had a TV show, and he was an
Speaker 1: amazing cartoon character. But he wasn't the most powerful man
Speaker 1: on the planet who oversaw national security and access to
Speaker 1: the nuclear codes and was reshaping the Republican Party in
Speaker 1: his own image. He is a constant. He is the
Speaker 1: most consequence political figure of the twenty first century bar none,
Speaker 1: and I think that's through sheer force of his personality
Speaker 1: and the capitulation of his party. I think around substituting
Speaker 1: the acquisition of power for the embrace of values, I
Speaker 1: think the traditional classic Republican consertive values, lower taxes, less regulation,
Speaker 1: conservative court, a robust, hawkish foreign policy. That's all been
Speaker 1: turned into like a quisine art in the Trump era.
Speaker 1: And what substitute for that is suspicion of expertise, suspicions
Speaker 1: of authority, suspicions of institutions, all on the service of
Speaker 1: a narrow elite grabbing power and holding onto it. Well,
Speaker 1: that relatability is part of what you've said makes him
Speaker 1: such a formidable candidate. I wonder if you see this
Speaker 1: trial as something that will hurt or help his relatability
Speaker 1: on the national stage heading into the election. You know,
Speaker 1: I don't know. I do think that his supporters, you know,
Speaker 1: forgive him everything. He's got a vice lock. I think
Speaker 1: on about thirty percent of the Republican electric that makes
Speaker 1: him a power broker in the primary season. I think
Speaker 1: independent voters and moderate Republicans and moderate Democrats learned who
Speaker 1: he is through his first term in office, and I
Speaker 1: don't think he's going to get them back. And I
Speaker 1: think I don't think he's a viable national candidate. You
Speaker 1: don't think, no, not anymore. No. I mean, look, he
Speaker 1: lost the midterms in twenty in twenty eighteen, you know,
Speaker 1: he lost the general in twenty twenty, he lost the
Speaker 1: mid terms and his party lost them in terms of
Speaker 1: twenty twenty two. So no, I don't think he's a
Speaker 1: national candidate, and I don't think the strategy will forge
Speaker 1: a national consensus for the party. And that's why they're
Speaker 1: in a hostage video with Donald Trump because they need
Speaker 1: to get through primary season with his voters, but they
Speaker 1: can't win a national election with those voters. Because that's
Speaker 1: what's fascinating to me, still his hold on the Republican
Speaker 1: Party and how they are so careful about not wanting
Speaker 1: to come out and criticize him, even you know, as
Speaker 1: he's going through this process. I mean, so when does
Speaker 1: that go away? Is it after that? I don't think
Speaker 1: it goes away. I think it's just going to get
Speaker 1: tested in the primary and will have to see. It'll
Speaker 1: be interesting to see what Mitch McConnell does with that, right.
Speaker 1: And and you know, I don't think Kevin McCarthy, he's
Speaker 1: just not as I think, as sophisticated a politicians as
Speaker 1: Miss McConnell is. And I think he's a Trumps sickopant.
Speaker 1: And I think if the Republicans want to re viable
Speaker 1: national strategy have to move around sickofancy. I'm curious too
Speaker 1: about the Fourteenth Amendment piece that you've written about him.
Speaker 1: Is there a chance that this is all hypothetical, right?
Speaker 1: But is there a chance that Trump cannot be president again?
Speaker 1: I know Congress can override that, but do Republicans in
Speaker 1: Congress want to do that? Well? I you know, that'll
Speaker 1: be a test that you're You're referring to the Department
Speaker 1: of Justice cases. One is about the Espionage Act violations
Speaker 1: pertaining to classify documents going tomorrow lago. The other one
Speaker 1: is whether or not he incided an insurrection on January sixth.
Speaker 1: There's ample evidence to make a case for both of those.
Speaker 1: The Fourteenth Amendment precludes anyone from who led an insurrection
Speaker 1: from running for federal office, instituted after the Civil War
Speaker 1: to keep Confederates out. Depending on how the laws interpreted, interpreted,
Speaker 1: and applied, that could come into play if the DOJ
Speaker 1: prosecutes him, and we don't know yet that they will.
Speaker 1: Was gonna ask you to tim just quickly. We just
Speaker 1: got about twenty seconds. You expect the other cases to
Speaker 1: go forward and maybe could be more difficult for yeah,
Speaker 1: and I think he's well aware of those And I
Speaker 1: think though, the weariness you've seen in his face is
Speaker 1: of what's ahead. That was Tim O'Brien, Senior Executive editor
Speaker 1: of Bloomberg Opinion, a former editor and reporter for The
Speaker 1: New York Times and author of the literal book on
Speaker 1: Trump called Trump Nation, The Art of Being the Donald.
Speaker 1: He was the one voice I really wanted to weigh
Speaker 1: in after everything that happened this past week. Right, it's
Speaker 1: still ahead. On Bloomberg Business Week, some leading American companies
Speaker 1: are facing renewed pressure from organized labor as employees within
Speaker 1: their own ranks act discreetly to rally colleagues to the cause.
Speaker 1: More on the undercover union organizers that's next. This is Bloomberg.
Speaker 1: Please sees Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Stenebec from Bloomberg Radio. Every One. Carol Masser here with
Speaker 1: Madison Mills. This week. The US labor market and focus
Speaker 1: this past week thanks to several data points, including Friday's
Speaker 1: monthly government release. What are the trends though, when it
Speaker 1: comes to today's workforce is the resurgence of union interest
Speaker 1: in organizing, which brings us to a very detailed story
Speaker 1: featured in this week's double issue of Bloomberg Business Week,
Speaker 1: about the secret force behind a number of labor union wins.
Speaker 1: It's such a cool story, Carol, with so many interesting anecdotes.
Speaker 1: So get ready everyone to learn about the inside organizers
Speaker 1: school well in the process of salting. Thanks to Josh Idolsam,
Speaker 1: Bloomberg News labor reporter, who wrote the story and joined
Speaker 1: us once again with the editor of Bloomberg BusinessWeek, Joel Weber.
Speaker 1: We haven't had a lot of whole a lot of
Speaker 1: organized labor in the United States for decades. It's been
Speaker 1: on the decline. But salting has been around for a while,
Speaker 1: and it basically means that there are people who will
Speaker 1: organize within companies and draw people to their cause, right,
Speaker 1: and that has been a thing that's like an undercover
Speaker 1: agent on exactly. And when you think about these labor
Speaker 1: wins that we've seen over the course of the past
Speaker 1: year and change, companies like Amazon have been affected by this, Starbucks, Chipotle.
Speaker 1: This is happening. And Josh, who I think is probably
Speaker 1: the best labor reporter in the country, came to us
Speaker 1: with this idea. That was like, well, who's behind this?
Speaker 1: It's it's this, these salts, and he had an opportunity
Speaker 1: to actually get up close with what this movement has
Speaker 1: looked like. So, Josh, take us inside what this actually
Speaker 1: looks like in practice, and is you know, according to
Speaker 1: the sources that you have in the story, you know
Speaker 1: this is going to be a thing that we're going
Speaker 1: to see much more about other companies too. The context
Speaker 1: here is that union organizing is very difficult in the
Speaker 1: United States, and while there is a law on the books,
Speaker 1: as we've written about before a Business Week that gives
Speaker 1: people the right to organize without retaliation, in practice, the
Speaker 1: remedies if companies fire people because they're organizing are weak
Speaker 1: and very slow, and companies have lots of tactics that
Speaker 1: their disposal to try to prevent organizing, including mandatory anti
Speaker 1: union meetings where you might have your manager making ominous
Speaker 1: predictions about what could happen if you organize. And in
Speaker 1: this moment when organized labors at a historic low in
Speaker 1: the number of people in the unions in the US,
Speaker 1: there has been a particular revival of interest not just
Speaker 1: in organizing in general, but in this a salting tactic
Speaker 1: which involves getting a job having the intention to organize
Speaker 1: it while you're there. And there are very loose informal
Speaker 1: versions of that, and there are very planned out versions,
Speaker 1: like we've seen at Starbucks, where a group of people
Speaker 1: got hired undercover, had ways to present themselves to the
Speaker 1: company to not just not announced that they were trying
Speaker 1: to unionize, but really not seem like the kind of
Speaker 1: person that would try to unionize, and then on the
Speaker 1: job worked hard to be good workers and good coworkers
Speaker 1: who would be respected by management and buy their coworkers,
Speaker 1: and to figure out who could be leaders that had
Speaker 1: been there a while in particular who could play a
Speaker 1: key role in launching a union campaign, and to make
Speaker 1: sure that when they did launch a union campaign, they
Speaker 1: would do it together in a large group at once,
Speaker 1: in a way that would be harder to crush with retaliation.
Speaker 1: One of the things that really stood out to me, Josh,
Speaker 1: was I guess I had this preconceived notion of how,
Speaker 1: you how somebody who was organizing would go about doing it,
Speaker 1: and it would be like, you know, you would make
Speaker 1: a bunch of noise and draw people to your cause.
Speaker 1: And it turned out to be almost the exact opposite.
Speaker 1: According to Key Reporting, take us through. You know, one
Speaker 1: of the one of the ways that you write about
Speaker 1: the assalts were able to win people over, I'm thinking
Speaker 1: very messy jobs people. This idea sometimes like norm Moray,
Speaker 1: that affect to union organizers, someone who stands on a
Speaker 1: table by themselves and gives a speech. And what it
Speaker 1: made the campaign at Starbucks effective, among other things, is
Speaker 1: that you had a group of workers, about fifty of them,
Speaker 1: go public together and on the way there. One of
Speaker 1: the things that was talked about at this inside organizers
Speaker 1: school that I've visited, where people gather to discuss how
Speaker 1: to organize and in particular how to solve One point
Speaker 1: that one of the organizers made is about the importance
Speaker 1: of taking on thankless jobs on the job, like unclogging
Speaker 1: the drain at the Starbucks. That doing so is something
Speaker 1: that makes the company less likely to fire you or
Speaker 1: suspect you of disloyalty, and it's also something that builds
Speaker 1: trust with your coworkers. Something that is not always realized
Speaker 1: by people outside of union organizing world is that workers
Speaker 1: tend to be more interested in hearing at union organizing
Speaker 1: from coworkers if they think those co workers also are
Speaker 1: serious about their jobs and are good coworkers that they
Speaker 1: can rely on. I also love the anecdote from your story, Josh,
Speaker 1: about workers or salters applying for jobs and really pouring
Speaker 1: it on thick, making up stories about like my mom
Speaker 1: really loving the Starbucks cream and how that just changed
Speaker 1: the way that they view the working world. Is just
Speaker 1: so it's to get the job. It's just such a
Speaker 1: good anecdote. It's so it's such great reporting from you.
Speaker 1: But can you talk about any instances in which this
Speaker 1: form of unionizing might backfire, not just on the psalters,
Speaker 1: but on other employees as well. So there are employees
Speaker 1: who have said to me or to others that they
Speaker 1: felt burned or upset when they learned that people they
Speaker 1: have been working with were salts and they hadn't known it.
Speaker 1: There are situations where it becomes a talking point for management.
Speaker 1: Of course, sometimes it's a talking point for management about
Speaker 1: people who are not in fact assaults. There is a
Speaker 1: cat and mouse game sometime where as we get into
Speaker 1: in the story, an executive, According to one of these
Speaker 1: workers organizers, an executive told a new hire, you should
Speaker 1: be careful about trusting this person or this person or
Speaker 1: this person because they could be undercover operatives for the union.
Speaker 1: And the person who was told that then went back
Speaker 1: and talked to a worker they did trust, who in
Speaker 1: fact was someone who again got and hired at that
Speaker 1: job with the intention of organizing it, and that person
Speaker 1: had been a barista many times before. And one of
Speaker 1: the things that this piece makes clear is often people
Speaker 1: who are assaulting are people who also need a job
Speaker 1: and are already in the industry and are coming in
Speaker 1: seeing and understanding themselves and being understood by their coworkers
Speaker 1: even after they tell them that they were salt that
Speaker 1: they're making a choice about getting a job at a
Speaker 1: particular place because they see an opportunity there to organize.
Speaker 1: And sometimes that means putting up with loneliness and stress
Speaker 1: from having to conceal things. Sometimes it means moving across
Speaker 1: the country. And there are people who found it harder
Speaker 1: than they expected, and there are people who, by doing it,
Speaker 1: discovered that they want to spend their life in the
Speaker 1: labor movement. Based on what you saw and you're reporting,
Speaker 1: what does it kind of tell you about either the
Speaker 1: fragility or the strength of the labor movement? Well, this
Speaker 1: new influx of people who want to salt it reflects
Speaker 1: the allure of the labor movement and how for many
Speaker 1: people who care about all sorts of equality and progressive
Speaker 1: issues in society, they see transformation in the workplace as
Speaker 1: key to broader social change and broader fairness. It also
Speaker 1: reflects the desperation of labor organizers in the US in
Speaker 1: their sense that the deck is stacked against them. The
Speaker 1: number of people interest in insulting shows a certain energy,
Speaker 1: particularly among young people, and a certain commitment and a
Speaker 1: constituency that is willing to go to real lengths and
Speaker 1: make sacrifices to be part of this work. That said,
Speaker 1: the prominent victories of the past year and a half,
Speaker 1: whether it's at Starbucks and Amazon or places like Chipotle
Speaker 1: or Apple or Trader Joe's, none of those has led
Speaker 1: to a union collective bargaining agreement yet. And these companies
Speaker 1: that fought unsuccessfully in many cases to prevent people from
Speaker 1: choosing to unionize may not easily agree to any kind
Speaker 1: of contract that the union would organizer schools who knew?
Speaker 1: I mean, I feel like I learned so much in
Speaker 1: this story, and it was just the anecdotes are so good.
Speaker 1: Absolutely all right, Well, that's of course. Josh Idelson, Bloomberg
Speaker 1: News Labor Reporter, Bloomberg Business Week Editor, Till Webber. We'll
Speaker 1: be back in the next hour. You're listening to Bloomberg
Speaker 1: Business Week. Up next, more on our workforce, this time
Speaker 1: with a view from the top, specifically help wanted chief
Speaker 1: financial officers. We'll explain when we come back. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Tim Stenovec from Bloomberg Radio. I'm Carol Master with Madison
Speaker 1: Mills this week. So, as we mentioned earlier, this was
Speaker 1: another big week when it comes to data on the
Speaker 1: US workforce, and our next guest has some keen insight
Speaker 1: on one particular area of employment that's seeing strong demand yep.
Speaker 1: Amelia Tiagi is the co founder and CEO of the
Speaker 1: executive talent consultant Business Talent Group, which is owned by
Speaker 1: the executive search and consulting firm Hydric and Struggles, and
Speaker 1: right now things are looking robust for the firm. So
Speaker 1: we do a study every year tracking the trends that
Speaker 1: we're seeing across the market. We literally study thousands of
Speaker 1: inquiries that we hear from all sectors of the economy.
Speaker 1: We're seeing broad based growth and we're actually seeing that
Speaker 1: as the economy gets choppier and there's more uncertainty out there,
Speaker 1: that folks are really turning to on demand solutions because
Speaker 1: they want that kind of flexibility. They still need to
Speaker 1: get things done and they need it fast, but they
Speaker 1: don't want to necessarily make long term commitments. The big
Speaker 1: story though, is the rise in demand for the interim CFO.
Speaker 1: We saw demand for an interim CFOs double over the
Speaker 1: last year. So what is that of that, because because
Speaker 1: typically a CFO and if anything I've learned, you know,
Speaker 1: coming off the financial crisis, the Great Financial Crisis, is
Speaker 1: that CFOs were crucial to keeping companies running, making sure
Speaker 1: those balance sheets are sound and solid, and he has
Speaker 1: had money same thing during the pandemic, right, we know
Speaker 1: that this is an important position. So tell us about
Speaker 1: why this trend is happening. You're exactly right. It's a
Speaker 1: critical position, and I think it's getting harder. I think
Speaker 1: that's what's happening is that the CFOs office is under
Speaker 1: more pressure and as there's more uncertainty in the economy,
Speaker 1: we're seeing turnover in the role. There's some burnout among CFOs.
Speaker 1: There's a lot of companies also that are experiencing changes
Speaker 1: in what the skills are that they truly need in
Speaker 1: that role as there shifts in the economy, So people
Speaker 1: pull in an interim CFO. Often when the old CFO
Speaker 1: goes out, you need somebody in really fast. You can't
Speaker 1: have any time with that role vacant, especially in this
Speaker 1: kind of economy. That's so interesting to me because I've
Speaker 1: always thought of the type of person to pursue a
Speaker 1: CFO role as someone who would not want to quit
Speaker 1: when things get tough and when the economy gets a
Speaker 1: little bit tighter. So I guess I just I would
Speaker 1: not have anticipated that being the type of role where
Speaker 1: you see a lot of turnover, just given some macroeconomic headwinds.
Speaker 1: Some of what we're seeing is some skill realignment out there,
Speaker 1: you know. I think the traditional skills of a CFO
Speaker 1: just sort of those financial skills, oh, I think a
Speaker 1: ticket to play, and the CFO is increasingly being asked
Speaker 1: to wear a number of additional hats, especially in this
Speaker 1: kind of environment. In some situations, they're being asked to
Speaker 1: raise money and others. They're asked to manage cash in
Speaker 1: a whole different way. They're asked to help with restructuring,
Speaker 1: they may even be asked to assist with big IT projects.
Speaker 1: It's a lot of hats and with that skill alignment,
Speaker 1: I think you're finding different changes going on in the role.
Speaker 1: We also find the other trend that's happening behind the scenes.
Speaker 1: We work with a network of over twenty thousand professionals
Speaker 1: who want to be independent. They've chosen a different path.
Speaker 1: They don't want to be in a traditional role five
Speaker 1: or ten or twenty years. They like going from project
Speaker 1: to project. There's a lot of people who enjoy that
Speaker 1: and who are seeking it out. And we're seeing growth
Speaker 1: on the talent side as well, and changes in what
Speaker 1: senior level talent really want. That's Amelia Tiagi, co founder
Speaker 1: and CEO of the Executive Talent consultant Business Talent Group.
Speaker 1: The unit is owned by the executive search and consulting
Speaker 1: firm Hydrick and Struggles. Amelia is also the daughter of
Speaker 1: Massachusetts Senator Elizabeth Warren. We just thought that was a
Speaker 1: fun fact, right, I throw it in there, Yeah, just
Speaker 1: throw it in all right. Well, that wraps up the
Speaker 1: first hour of the weekend edition of Bloomberg Business Week
Speaker 1: from Bloomberg Radio. Ahead in our next hour, we head
Speaker 1: to Hollywood for some new developments, both on screen and
Speaker 1: behind the scenes. Yep, one major studio is hoping a
Speaker 1: new blockbuster hit can help ease the pain of an
Speaker 1: old multi billion dollar mistake, while a looming writers strike
Speaker 1: threatens to bring the US entertainment industry to a standstill.
Speaker 1: Will explain. Plus we've got a breakdown of the six
Speaker 1: trillion dollars ocean economy. I'm Carol Masser and I'm Mattie Mills.
Speaker 1: This is Bloomberg Busines this week. Stay with us. Today's
Speaker 1: top stories in global business. Headlines are coming up right now.
Speaker 1: This is Bloomberg Business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine. Plus
Speaker 1: global business, finance and tech news as it happened. Sloomberg
Speaker 1: Business Week with Carol Messer and Tim Stenevec on Bloomberg Radio.
Speaker 1: Karl Masser here with Madison Mills this week. Plenty ahead
Speaker 1: in our second hour of the weekend edition of Bloomberg
Speaker 1: Business Week, including how I blowout opening of John Wick
Speaker 1: Chapter four, you know, the latest installment in the hyper
Speaker 1: successful action film series is yes, great for Lionsgate, but
Speaker 1: still not going to fix its streaming service, Stars Horse Stars. Plus,
Speaker 1: we've got the CEO and founder of C three AI
Speaker 1: on a short seller's claims, also protecting the six trillion
Speaker 1: dollar economy that employs hundreds of millions of people, and
Speaker 1: what you see when you and a year inside America's
Speaker 1: most vulnerable important profession. It's all in a new book, Carol.
Speaker 1: I love that, and actually it's pretty upsetting in terms
Speaker 1: of what's going on, but we'll get to that a
Speaker 1: little bit later. On First up this hour, a couple
Speaker 1: of stories from the world of media and entertainment from
Speaker 1: our team at the magazine. One on a streaming service
Speaker 1: that lions Gate is yep, still looking to unload, and
Speaker 1: another about a writers strike that could impact our binge watching. Carol,
Speaker 1: what is your heart like skipping? I mean, my heart
Speaker 1: rate is really elevated right now. I can get bloom
Speaker 1: without it. You'll get through and you'll get through it
Speaker 1: all right. Well. Bloomberg News reporter Thomas Buckley works in
Speaker 1: our La bureau. He's smack in the middle of all
Speaker 1: things Entertainment, Thomas joined us. The editor Bloomberg business Week,
Speaker 1: Toll Webber back with us again as well. So what's
Speaker 1: at store for lions Gate? Who really has has bet
Speaker 1: the house on john Wick? Well, let me tell you
Speaker 1: what I mean. First, I'd be remiss if I didn't
Speaker 1: say that you're going to be absolutely loving john wickfull
Speaker 1: when you go see it. Enjoys upon two and the
Speaker 1: three I'm coming up, can't wait? Yeah, exactly. There are
Speaker 1: actually no plans for a seque when john Wick one
Speaker 1: came out, sis tremendous feet to have gotten this far
Speaker 1: with the franchise. It's exactly right. And and john Wick
Speaker 1: has really moved into one of them Lionsgate's largest franchises
Speaker 1: of late they will so you own the rights to
Speaker 1: the likes of Twilight and Hunger Games. And what's interesting,
Speaker 1: it's struxtaposing the strength of that film studio against some
Speaker 1: of the weakness in its streaming service operations. And that's
Speaker 1: precisely why the company is seeking to demerge Wishes and effects,
Speaker 1: say Unwind Emerger that they created in twenty sixteen from
Speaker 1: the acquisition of Stars for four point four billion dollars.
Speaker 1: The acquisition has not delivered for them. The combined market
Speaker 1: CAB of the company now is around half that, and
Speaker 1: so they're exactly and their feeling is once they unwind
Speaker 1: the two distinct businesses, investors will see more value in
Speaker 1: each rather than the sum of the parts. Why didn't
Speaker 1: streaming I mean, come on, help me out here, Thomas.
Speaker 1: I mean, streaming supposed to be all the rage, and
Speaker 1: I know we're kind of getting some full during of that,
Speaker 1: I feel like over the last year or so, because
Speaker 1: we do have so many different services. But why did
Speaker 1: it not work out? I mean, Stars was the home
Speaker 1: of an Outlander. Didn't we know that that was kind
Speaker 1: of a huge as well, and some other things. Yeah,
Speaker 1: but why did it work out? So? Yeah, right to
Speaker 1: a last sense, streaming was all the rage, dealers all
Speaker 1: the rage. The issue is that investors really have shifted
Speaker 1: their focus from what used to be, you know, entirely
Speaker 1: subscribe the growth to now profitability with the rights of
Speaker 1: interest rates and seeing how a lot of these tech
Speaker 1: companies adapt to this new normal. In streaming, there is
Speaker 1: an enormous cash burn associated with the business. I mean,
Speaker 1: you saw, for example, the departure last year of the
Speaker 1: Disney chief executive officer Bob Chapec as a result of
Speaker 1: a one point five billion dollar loss in a single
Speaker 1: course run streaming. So I think that now the attention
Speaker 1: has turned to that side of the business a little more,
Speaker 1: investors a much more favoring you know, solid studio operations
Speaker 1: that can be arms dealers rather than prioritized shows for
Speaker 1: their own streaming operation. Well, it seems like Lionsgate didn't
Speaker 1: exactly help the Stars case here based on some comments
Speaker 1: that you got from a source who basically said that
Speaker 1: a John Wicks spinoff was pulled from the Stars lineup
Speaker 1: after Amazon and Comcast Peacock streaming service offered Lionsgate one
Speaker 1: hundred million dollars for the show. That seems tough. It
Speaker 1: seems tough for Stars. And this is what's quite interesting.
Speaker 1: I mean, it's tough for Stars, but great for Lionsgate
Speaker 1: because I think that there when you have a real
Speaker 1: you know, equity story for the studio going forward, as
Speaker 1: they can farm out you know, very high value, high
Speaker 1: price properties like this to the highest bidder, that highest
Speaker 1: bidder is unlikely to be Stars for any of its
Speaker 1: show is going forward because it starts, you know, relative
Speaker 1: to likes of Netflix, is you know, under a fifth
Speaker 1: the size of Netflix and you know, fellow competitors. So
Speaker 1: I think that, you know, going forwards, it is going
Speaker 1: to be tougher for Stars to compete. And I think
Speaker 1: that you know, the people who run Stars have said
Speaker 1: that of their own volition as well. But it puts
Speaker 1: signs get in a great studio wherein they can you know,
Speaker 1: sell as I mentioned, to the highest bidder and and
Speaker 1: do very well from their existing franchises. Okay, so there's
Speaker 1: some other stuff happening in Hollywood, like a potential writer strike,
Speaker 1: and it's we've seen that before, but it's been a
Speaker 1: little while. So what what the timeline look like here
Speaker 1: and what are the you know, the issues because I
Speaker 1: think streaming comes up yet again in that whole conversation. Right, yeah, absolutely,
Speaker 1: So the last time we saw a significant right strike,
Speaker 1: as you mentioned, was probably in two thousand and seven,
Speaker 1: when the strike lasted about one hundred days, give or take,
Speaker 1: and it costs the LA economy, you know, anywhere between
Speaker 1: two and three billion dollars. That's because all Hollywood productions
Speaker 1: shut down during a writer strike. I mean scripts have
Speaker 1: to be finasted and reworked during production. Obviously, that can't
Speaker 1: happen if all your writers are picketing the lines at
Speaker 1: the moment. What's the stake is really, in part residuals
Speaker 1: from streaming. A number of writers feels their conditions necessarily
Speaker 1: as good as they were ten years ago, and the
Speaker 1: rise of streaming has really affected them in that regard.
Speaker 1: And what's interesting is there is some parallel. Give them
Speaker 1: the two thousand and seven writes a strike the main
Speaker 1: point of contention that happened to be DVD residuals, and
Speaker 1: we're seeing the same sort of thing. Now. You said
Speaker 1: something it was like a technology interpretation. Please do you
Speaker 1: not remember those? Ye? What does that mean? It does
Speaker 1: no good. No, it's just it's so interesting the DVD
Speaker 1: thing in comparison to what I was thinking about reading
Speaker 1: your story as someone who's I shouldn't bring up laser
Speaker 1: discs then either, huh, I guess I'll be like laughed
Speaker 1: out of the studio VHS is I mean all of it.
Speaker 1: But it's so interesting because one of the things that
Speaker 1: the writers are thinking about is the performance of their
Speaker 1: shows and whether or not they should be getting a
Speaker 1: premium if their show gets a lot of clicks or
Speaker 1: makes it into the Netflix Top ten. As someone who
Speaker 1: works on our social team mainly, I would never want
Speaker 1: to be judged the clicks, because that can also be
Speaker 1: a bad thing if it doesn't go well. What are
Speaker 1: your sources saying about that? Yeah? Absolutely, And this is
Speaker 1: a fascinating thing, right, I mean I think that previously
Speaker 1: writers who are writing for TV, I mean, when their
Speaker 1: shows were widely syndicated around the world, you know, they
Speaker 1: would benefit from that very consistent income and could plan accordingly.
Speaker 1: Now I think you know, if a writer is paid
Speaker 1: upfront for a show and it happens to then break
Speaker 1: into the top ten, and there's very limited upside for
Speaker 1: them because the performance based bonus is that much smaller
Speaker 1: than it is for, say, by comparison a big film
Speaker 1: released in theaters and how well that doesn't the box office.
Speaker 1: I think a lot of them are thinking, We'll look,
Speaker 1: we're seeing our shows breaking in the top ten, racking
Speaker 1: up you know, hundreds of millions of hours worth of viewing,
Speaker 1: and we're not being compensated fairly for it. So what
Speaker 1: are the goals that the Writer's Guild is seeking out for?
Speaker 1: So basically they are working under a current contract that
Speaker 1: expires on May first, and so they've sat down there
Speaker 1: with the studios and promotans and you know, perhaps that
Speaker 1: loggerheads not making much progress yet, but what they're seeking
Speaker 1: is a number of assurances, certainly as regards to residual compensation,
Speaker 1: so that they're better paid for that shows going forward.
Speaker 1: You know, it does feel like, you know, we constantly
Speaker 1: see this as things change, especially in terms of how
Speaker 1: we consume content. Thomas is that, you know, it's got
Speaker 1: to kind of catch up right with the players in it,
Speaker 1: so that they are just like compensated. I'm curious what
Speaker 1: outside observers are saying that. Do they have a good
Speaker 1: point that it makes sense because things are changing exactly
Speaker 1: it is changing. I think that, you know, it's interesting
Speaker 1: because as I think about this story, it can sometimes
Speaker 1: feel a bit like inside Baseball. But the truth is
Speaker 1: there are some real world, you know, ramifications for us
Speaker 1: of you as I mean, certainly during the last writer
Speaker 1: strike you had shows from the Simpsons, the Desperate Housewives
Speaker 1: that all had to make do with far shorter seasons
Speaker 1: because Hollywood just ground to a halt. So I think that,
Speaker 1: you know, even though it might feel like inside Baseball
Speaker 1: at times, we will be affected as fans of these shows,
Speaker 1: if they don't find a resolution in the coming weeks,
Speaker 1: what do you think the potential impact of that is
Speaker 1: going to look like? In which specific shows don't worry
Speaker 1: like watching things Maddie's terrified specifically? Can I'm sorry, let's
Speaker 1: just and finance succession, right, because it's already done and
Speaker 1: that's the that's the only thing that I live and
Speaker 1: die for. But what are what are the other ones
Speaker 1: in production right now that we need to worry about,
Speaker 1: and what's the timeline? Like, let me let me read
Speaker 1: that back to you. Every US movie and TV show
Speaker 1: is stopping as writer strike CLOBs like, truly, this is
Speaker 1: an existential one, right, Thomas, exactly, It's it's pretty pervasive. Um.
Speaker 1: What I will say is that you know, hopefully what
Speaker 1: happens in the situations and they can't find a resolution
Speaker 1: and people do go on strike, you know, the risk
Speaker 1: are very very high profile shows, you know, being outright canceled.
Speaker 1: It's probably quite low. I think that what we saw
Speaker 1: in the last Right to strike is that, you know,
Speaker 1: the shows that were canceled are probably you know, shows
Speaker 1: that the studios weren't necessarily that event on renewing anyway, Um,
Speaker 1: so there is a comfort there. And also put any
Speaker 1: fan of reality TV that you know that a genre
Speaker 1: doesn't necessary you know, that much writing at all. If
Speaker 1: any I think you know, their appetites will be satiated
Speaker 1: and the thank god, yeah, I hope you like reruns
Speaker 1: though it could be a little bit right like and
Speaker 1: remember last time, the part of the joy was like,
Speaker 1: you know, people took a little break, and I remember
Speaker 1: more than a few actors who looked a little different
Speaker 1: when they came back. There was the continuity. Folks were like, wait, wait, wait,
Speaker 1: wait a minute, we got a problem here. Okay, So
Speaker 1: timeline May first, exactly, so that's when the contract expires.
Speaker 1: And so currently negotiations being had between the two parties.
Speaker 1: And I hope that resolution before May first, all right,
Speaker 1: And and are you hearing anything moving on that front
Speaker 1: at the moment, I'm not hearing a lot of resolution.
Speaker 1: I'm hearing with our talks, and that is it our
Speaker 1: thanks to Bloomberg News reporter Thomas Buckley and Bloomberg BusinessWeek
Speaker 1: editor Joel Weber, you're listening to Bloomberg business Week. Still ahead,
Speaker 1: the promise of artificial intelligence meets the intrigue of a
Speaker 1: short seller's allegations. Publicly traded C three AI takes its
Speaker 1: biggest stock hit ever at a time when the demand
Speaker 1: for its tech is at a fever pitch. We'll talk
Speaker 1: with the CEO next. This is Bloomberg. Please sees Bloomberg
Speaker 1: Business Week with Carol Messer and Tim Stenebec from Bloomberg Radio.
Speaker 1: I'm Carol Masser along with Madison Mills. This week, artificial
Speaker 1: intelligence everyone is talking about, even Jamie Diamonds, CEO of
Speaker 1: JP Morgan Chase mentioning it in his annual letter to
Speaker 1: shareholders this past week among many other things. But AI
Speaker 1: was in there. AI was in there, and one player
Speaker 1: in the space is AI developer C three AI, whose
Speaker 1: customers include the US Department of Defense, Raytheon Technologies, and
Speaker 1: New York Power Authority. Shares of the company's sword about
Speaker 1: a month ago, following a revenue forecast and comments by
Speaker 1: the CEO that we're both upbeat and led to more
Speaker 1: than a handful of an US raising price targets on
Speaker 1: the company. This week, though Mattie was a little bit different.
Speaker 1: The stock dropped the most ever in a single day
Speaker 1: after short seller at Kerrisdale Capital alleged quote serious accounting
Speaker 1: and disclosure issues at the enterprise software developer. Well, for
Speaker 1: some clarity on the business, we cut up with Tom Siebel.
Speaker 1: He's the founder, chairman and CEO of C three AI
Speaker 1: and the firm's third largest shareholder. Well, I think this
Speaker 1: was a enormously creative and successful effort by a notorious
Speaker 1: short seller who it's widely reported as under investigation by
Speaker 1: the Department of Justice in the SEC okay, and has
Speaker 1: drug and alcohol convictions. And it's highly creative, highly successful
Speaker 1: to issue this screed that contains not a word of truth. Okay,
Speaker 1: short the stock published this letter knowing that would move
Speaker 1: the stock. And I think this person made an excess
Speaker 1: of one hundred million dollars. So it was very creative,
Speaker 1: very successful, attempted what appears to be successful stock price manipulation.
Speaker 1: So John, that's the story. So Tom, so the charges
Speaker 1: or allegations of this short seller. That's saying that you guys,
Speaker 1: are you know, presenting yourself as being in a high
Speaker 1: margin SaaS software service businesses rather than one based on
Speaker 1: lower margin consulting. This is the letter they put on
Speaker 1: are you a consulting company or are you a software
Speaker 1: as a service business. About eighty five percent of our
Speaker 1: revenue comes from software subscriptions in fifteen to twenty comes
Speaker 1: from consulting services. This person of this short seller alleges
Speaker 1: that we report to get your ninety nine percent profit
Speaker 1: margins off of our largest customer, VANGE, which is Baker Hughes.
Speaker 1: And there is nothing in any financial statement that we'll
Speaker 1: support that. It's a complete fiction. And he says, because
Speaker 1: it's ninety nine percent margin, there's something must be something
Speaker 1: wrong with it. Um, well, he's you know, he's subtracting
Speaker 1: apples from oranges to try to come up with some
Speaker 1: sort of nefarious act. He alleges that the fact that
Speaker 1: we have unbuild receivables is very serious, suspicious, and good
Speaker 1: software companies don't have unbuild receivable holes. And in the
Speaker 1: neglects to mention you know, the many many companies like
Speaker 1: UH Salesforce, Data, Dog, IBM, adobes, An, Alterics, SAP, all
Speaker 1: of which have many many, you know, very large unbuild receivables.
Speaker 1: Unbuilding receivables is just um, you know, something for which
Speaker 1: you've recognized revenue for which you haven't submitted the invoice yet.
Speaker 1: It's very common in the industry. It's well understood, and
Speaker 1: he's trying to imply that there's something wrong with that.
Speaker 1: There's nothing wrong with that. It's proper accounting. But the
Speaker 1: guy succeeded. I mean, sometimes crime pays, and it's paid
Speaker 1: off for this person in a big way. So we
Speaker 1: you know, we after our hats are off to him.
Speaker 1: So UM, and I want to get into what you
Speaker 1: guys are doing in terms of AI because that's initially
Speaker 1: why we asked you to come on UM. In terms
Speaker 1: of your accounting. Deloitte Touch they're the one who got
Speaker 1: the letters. You're comfortable with their accounting, You've talked with them.
Speaker 1: You're comfortable with their disclosures. Our disclosures are correct, our accounting,
Speaker 1: our accounting is absolutely correct. We have we have unqualified
Speaker 1: opinion statements from our independent auditors. We have best practices
Speaker 1: in terms of accounting, in terms of audit committee practices,
Speaker 1: and that I mean, this is just a bunch of
Speaker 1: poppy cock. This is a trick that this this character
Speaker 1: played on the market. And you know, he made somewhere
Speaker 1: between one hundred and two hundred million dollars at the
Speaker 1: expense of C three shareholders and so and no regulators
Speaker 1: have reached out to you or the first that firm
Speaker 1: hasn't reached out to you. Uh, they have not reached
Speaker 1: out to us. And while it's widely reported that these
Speaker 1: guys are under investigation by the SEC and the Department
Speaker 1: of Justice for stock price manipulation, we've not been approached
Speaker 1: by either of those regulatary bodies about this firm. And
Speaker 1: have you been buying any of the shares on the downfall?
Speaker 1: M me personally or C three? Uh? Both. I have
Speaker 1: not been buying stock in the market. As you know,
Speaker 1: the stock is up about I think one hundred percent
Speaker 1: year to date, Okay, and it's been you know, we've
Speaker 1: reported in our earnings announcement that you know, business is
Speaker 1: quite good and the business's climate is quite good. And
Speaker 1: my only hope is that these this short seller in particular,
Speaker 1: and the short sellers short sellers out there, hold on
Speaker 1: to their stock because they're going to get in my opinion,
Speaker 1: they're going to get crushed real quickly. And then we'll
Speaker 1: pivot to AI A promise. How do you refute the
Speaker 1: short seller's argument that part of your success and gains
Speaker 1: is related just to the ticker name and the overall
Speaker 1: hype around AI right now, I think, I mean, that's
Speaker 1: just a silly statement. I mean, is I think the
Speaker 1: name AI. I mean, I think there's no value probably
Speaker 1: attributed to that. The fact that we're in the AI market.
Speaker 1: I think that, you know, a rising scene kind of
Speaker 1: lifts all boats, and so we're clearly a leader in
Speaker 1: enterprise AI. Enterprise AI looks like a half a trillion
Speaker 1: dollar addressable market in that room many years C three,
Speaker 1: AI is in a position to establish, if not the
Speaker 1: leading position, a leading position in that market. So there's
Speaker 1: no question that some of the upward pressure on the
Speaker 1: stock is due to the realization of the size of
Speaker 1: the addressable market opportunity that C three phases and quickly
Speaker 1: here I just wonder, as CEO, how do you not
Speaker 1: get C sick on these market moves because you had
Speaker 1: all these games then obviously a tough couple of days here,
Speaker 1: what is your thinking around strategizing for your long term
Speaker 1: goals despite the market vaults. It's very easy I ignore
Speaker 1: the market and focus on the long term goals. Our
Speaker 1: business is to build a great company, have satisfied customers,
Speaker 1: have a cash positive, profitable business, market leadership position, and
Speaker 1: you know, if we do that, we can just look.
Speaker 1: We have I think last of last quarter or something
Speaker 1: like eight hundred and fifty million dollars in the bank.
Speaker 1: So we are unquestionably and ongoing concern And I think
Speaker 1: if we focus on the big picture here, stay focused
Speaker 1: on the big picture, I think this will work very
Speaker 1: very well for the shareholders. But we don't really look
Speaker 1: at day to day or minute to minute, or even
Speaker 1: month to month. I think, you know, as far as
Speaker 1: we're concerned, the market could closed for five years. But
Speaker 1: I think this is going to I think this is
Speaker 1: going to work out very well for the shareholders, the employees,
Speaker 1: and the customers in the long run. And that's my job.
Speaker 1: So the reason I don't get seasick is I don't
Speaker 1: look at it. So Tom just got about thirty five
Speaker 1: forty seconds here. So I mean, what is the big
Speaker 1: win for you guys in the next six months that
Speaker 1: you say, hey, listen, Churchsellers, you've just so got it wrong. Oh,
Speaker 1: I think that if you're on the short side of
Speaker 1: this year. I mean, our business is good, okay, and
Speaker 1: we're in a position, you know, we trans recently transition
Speaker 1: to a consumption based pricing model. That's really well received
Speaker 1: by the market. We expect to see you know, you know,
Speaker 1: as the fad when the fad gets ready to take
Speaker 1: its foot off the brakes. Okay, as it relates to
Speaker 1: dealing with inflation, I think you're going to see C
Speaker 1: three as a very rapidly growing, market leading enterprise application
Speaker 1: software company that's profitable, cash positive, and that'll be reflected
Speaker 1: in market valuation. Tom Cebell, thank you so much of
Speaker 1: C three A eyes we said, a lot of analysts
Speaker 1: upgrading the stock last month. Still to come on Bloomberg
Speaker 1: Business Week, a dire warning about the health of the
Speaker 1: world's oceans and they're multi trillion dollars impact on well
Speaker 1: just about everything. More on building up one of the
Speaker 1: world's most valuable assets. This is Bloomberg. Please sees Bloomberg
Speaker 1: Business Week with Carol Masser and Tim Stenevic from Bloomberg Radio.
Speaker 1: I'm Carol Master with Madison Mills. This week. Well, there
Speaker 1: was a few stories over the past week. Actually I'm
Speaker 1: sure there was a ton more, but here's two highlights.
Speaker 1: One about the dealing with the rising waters around Venice.
Speaker 1: This has been a chronic problem, but they're now using
Speaker 1: sea walls to protect the city, but in doing so,
Speaker 1: it's impacting the local fishing industry and you know, possibly
Speaker 1: leading to dry canals, which creates a whole other bunch
Speaker 1: of problems. Yeah, and another slew of stories about those
Speaker 1: storms resurrected what was once the largest body of fresh
Speaker 1: water west of the Mississippi River a long time ago,
Speaker 1: back to the ice age, setting the stage for a disaster,
Speaker 1: this sprain and upending agriculture supply chains, all of it, Carol.
Speaker 1: Needless to say, there's a lot going on when it
Speaker 1: comes to the Earth's ebbs and flows of water. Doctor
Speaker 1: Debrah Brosnin is head of the international scientific consulting company
Speaker 1: that bears her name, and the firm addresses environmental risks
Speaker 1: and climate change. She herself is a marine scientist and
Speaker 1: environmental risk expert. She joined us from her work in
Speaker 1: the Caribbean. So, believe it or not, I am out
Speaker 1: here in Antigua and Barbuda because we're working on exactly
Speaker 1: the issues you've been talking about. How do we create
Speaker 1: more resilient coastlines, how do we create more resilient communities?
Speaker 1: And what we're doing is we're leveraging nature. Carl Reeves
Speaker 1: break ninety five percent of a wave's energy, and they
Speaker 1: protect the shoreline from storm search but they also keep
Speaker 1: sand on the beach, which helps tourism. So we are
Speaker 1: doing a major reef restoration project with a man called
Speaker 1: John Paul Lagoria called Ocean Shot, and we're also restoring
Speaker 1: dunes to provide a barrier, and in doing so, we're
Speaker 1: providing training and local jobs as well. So that's why
Speaker 1: I'm out here, because we're advancing those projects and it's
Speaker 1: very exciting. Yeah, No, John Ball Djoria, I'm interesting. So
Speaker 1: what I want to ask you, as someone who has
Speaker 1: done a fair amount of diving and seen how our
Speaker 1: coral reefs have really been ruined over the last decade
Speaker 1: or so, tell us what you're seeing. First of all,
Speaker 1: like where we are when it comes to coral reefs
Speaker 1: around the world. We hear the stories about the Great
Speaker 1: Barrier Reef and the bleaching of the reefs. So talk
Speaker 1: to us about kind of where we are and how
Speaker 1: we can get our way back. So I think it's
Speaker 1: fair to say that we are in a fairly dire
Speaker 1: situation with coral reefs, and coral reefs have been declining.
Speaker 1: There's an estimate we've last between thirty and fifty percent
Speaker 1: of reefs already and that we may lose another thirty
Speaker 1: percent if we don't intervene. So around the world, and
Speaker 1: I've seen it in my lifetime too. When you go
Speaker 1: on the ocean one of the areas we're working on,
Speaker 1: only two percent of the stony corals are left on
Speaker 1: the reef, so two percent cover so and that pattern
Speaker 1: has been repeated time and time in different parts of
Speaker 1: the world in the tropics. But what we are seeing,
Speaker 1: and here's where the good news comes in, the situation
Speaker 1: is bad enough that people are really understanding that we've
Speaker 1: got to start taking action. So we're seeing action in
Speaker 1: several places. One is in trying to grow resilient calls
Speaker 1: that are resilient against temperature rise, for instance, and several
Speaker 1: groups are doing those. We have resilient calls called Beta
Speaker 1: as a company that's working on them. So people are investing,
Speaker 1: literally investing money in growing resilient calls that can then
Speaker 1: be outplanted on two weeks. We ourselves are actually building
Speaker 1: reefs that will provide all of these services I spoke about.
Speaker 1: And so we're seeing around the world and interest in
Speaker 1: restoring coral reefs but not at a small scale, at
Speaker 1: the sort of industrial scale that we need to be intervening.
Speaker 1: So both calls and the restructure itself, we're seeing a
Speaker 1: lot of effort on that, and that is the hopeful sign.
Speaker 1: So we're starting to see in some places a call
Speaker 1: to begin to come back naturally, but a lot of
Speaker 1: it through human intervention. And on that human intervention, can
Speaker 1: you talk about man made coral reefs and to what
Speaker 1: extent those can be effective as kind of a replacement
Speaker 1: for the real thing. I think we've got to be
Speaker 1: honest and say we're going to have to help nature,
Speaker 1: and that means doing man made coral reefs, and they
Speaker 1: can be effective. We've studied coral reefs enough to know
Speaker 1: what's the secret source, and basically that is the structure
Speaker 1: of the reef itself that it looks like it kind
Speaker 1: of looks like Manhattan. You know, there's a penthouse for
Speaker 1: certain species and the basement for species like lobsters. So
Speaker 1: when you create a reef, you want to create all
Speaker 1: of these different all of these different habitats, basically, all
Speaker 1: of these different layers, and that creates the opportunity for
Speaker 1: biodiversity to come back. And so we know how to
Speaker 1: build those now we also can model the effect that
Speaker 1: they have on maintaining sand on the beach, so we
Speaker 1: know where should we put them, how big should they be,
Speaker 1: how white should they be. So we do have the
Speaker 1: science and technology. What we need now is both the
Speaker 1: investment and the action to do it. How quickly does
Speaker 1: a reef come back when you deploy these efforts. It's
Speaker 1: a slow process, so it's called grow relatively slowly, but
Speaker 1: in the right conditions we can get growth of a
Speaker 1: few of several inches a year, which is with a
Speaker 1: lot of calls, that's actually pretty good growth. That's why
Speaker 1: we need to actually build the reef structure itself, so
Speaker 1: we give the call a foundation to growth, so we
Speaker 1: actually get the reef back a lot faster. So within
Speaker 1: a few years or even immediately undeployment, we can start
Speaker 1: to see the benefits of reef and over time we
Speaker 1: build up the biodiversity. If I can just follow for
Speaker 1: a moment, I do wonder, with rising sea levels as
Speaker 1: we build these reefs, is it a case that we're
Speaker 1: going to have to kind of increasingly be building the
Speaker 1: reefs closer and closer to what was land but is
Speaker 1: now new rising sea levels and can you keep up
Speaker 1: or can we as a world in society keep up?
Speaker 1: Now that's a good question. So I think what we
Speaker 1: when we think about restoring coral reefs or building reefs.
Speaker 1: We have to build reefs for the future, not for
Speaker 1: what the reef is, not for what our conditions are today.
Speaker 1: But if we get one foot sea level rise, where
Speaker 1: a three foot sea level rise, where do we need
Speaker 1: those reefs in ten years, in twenty and fifty years time.
Speaker 1: So we build the reefs. We start the reefs so
Speaker 1: that they will be the kind of reefs we need,
Speaker 1: you know, through climate change. And can I back up
Speaker 1: like completely here, doctor Brosnan, because I wonder if you
Speaker 1: can just explain maybe one example of how coral reefs
Speaker 1: impact our environment in a way that an everyday listener
Speaker 1: or viewer would be able to understand, who may not
Speaker 1: have had a touch point with coral reef resch research previously. Yes,
Speaker 1: how many of your listeners like to walk on the beach?
Speaker 1: I'll put probably everyone. And if you're walking on a
Speaker 1: tropical beach, the sand that you're walking on is sand
Speaker 1: that was made from a coral reef, from the erosion
Speaker 1: of the coral itself. Secondly, the reason you can walk
Speaker 1: on a very beautiful tropical beach is because the reef
Speaker 1: itself keeps sand. Not only makes the sand, but then
Speaker 1: it keeps it on the beach. So every time you
Speaker 1: go and lie on a tropical beach, say thank you
Speaker 1: to the coral reef. No actually said, no, it's so
Speaker 1: perfectly said. So when you talk about a reef to
Speaker 1: coming back, you said a few years. So is it
Speaker 1: five years, is it three years? Is a ten years
Speaker 1: or more? Yeah, it depends on the longer the reef exists,
Speaker 1: the better it gets. So if you build the structure
Speaker 1: of reef and you put the reef out and if
Speaker 1: you plant calls on it's for instance, we have caral
Speaker 1: nurseries and we're growing calls just like you would growth
Speaker 1: ball plants in a nursery, and then we plant those
Speaker 1: calls out on the reef structure. So now our reef
Speaker 1: is starting to come back quickly because we're getting fish
Speaker 1: and we have corals. So effectively we have a reef.
Speaker 1: We have a functional reef, but over two years, five years,
Speaker 1: ten years, into the next hundred years, the biodiversity on
Speaker 1: that reef if it stays. Health will increase, the fish
Speaker 1: life will increase, and so within I mean we're seeing
Speaker 1: within four months, we've already seen in one of our
Speaker 1: reef modules twenty five species of fish have moved on
Speaker 1: to this reef that we build. Now, that's amazing. So
Speaker 1: and these fish aren't there. The calls are doing fine.
Speaker 1: So the system is beginning to regenerate. All we had
Speaker 1: to do was give it the fighting chance and give
Speaker 1: it a reef in the habitat. That was doctor Deborah Brosnan.
Speaker 1: She's a marine scientist and environmental risk expert who heads
Speaker 1: the international scientific consulting company that bears her name. You
Speaker 1: can listen to the full conversation on our podcast feed.
Speaker 1: You're listening to Bloomberg Business Week coming up, how teaching
Speaker 1: in America has become one of the nation's most vulnerable positions.
Speaker 1: This is Bloomberg. You're listening to Bloomberg Business Week with
Speaker 1: Carol Messer and Tim Stenevic from Bloomberg Radio. Hi everyone,
Speaker 1: Carol Master here with Madison Mills. This week. By one measure,
Speaker 1: there are more than four million teachers in the United States,
Speaker 1: taking into account all k through twelve public and private schools.
Speaker 1: Plus adult education and career and technical schools. In all,
Speaker 1: teachers make up about two and a half percent of
Speaker 1: the working population. Investigative reporter and New York Times best
Speaker 1: selling author Alexandra Robbins spent a year inside the teaching profession.
Speaker 1: It's all in her new book The Teachers. A Year
Speaker 1: inside America's most vulnerable Important profession, right, and she looked
Speaker 1: at it from a lot of different perspectives, different kinds
Speaker 1: of teachers, different geographies, if you will. Bloomberg News Deputy
Speaker 1: team leader for US Equities, Jess Metton, and I spoke
Speaker 1: with Robins about her work. I wanted to write sort
Speaker 1: of a fast paced, fund to read book that both
Speaker 1: shows the public what's really going on in schools and
Speaker 1: also shows them that educators working conditions right now are unacceptable.
Speaker 1: At the same time, teachers are still able to find
Speaker 1: joy and hope and optimism, and so I hope to
Speaker 1: motivate readers to fight for teachers and for teachers to
Speaker 1: feel more of a sense of solidarity. So what I
Speaker 1: did was I followed three teachers for a school year.
Speaker 1: There's Penny, a middle school math teacher in the South. Miguel,
Speaker 1: a special ed teacher out West and Rebecca and East
Speaker 1: Coast Elementary School teacher. So readers could go behind the
Speaker 1: scenes with them for a school year and see what's
Speaker 1: really going on in schools and so anecdotally, whenever you
Speaker 1: were following them, what did you find? What is actually
Speaker 1: going on at schools? Oh? Boys, it's the public has
Speaker 1: no idea what a teacher's day is actually like, teachers
Speaker 1: are under siege from all sides. Districts and sometimes even
Speaker 1: principles are piling on extra time consuming responsibilities on teachers
Speaker 1: that they can't possibly fulfill because they don't have the
Speaker 1: support staff, the resources, the time, or the money to
Speaker 1: do it. Students are much more disruptive than they were
Speaker 1: before the pandemic, and just one disruptive student can affect
Speaker 1: an entire class. And parents, Oh it's I think we're
Speaker 1: seeing the most accusatory and invasive parents in the history
Speaker 1: of American education. All of this is piling on teachers
Speaker 1: at the same time as there's just just general stigma,
Speaker 1: general sense of disrespect for the profession, and that has
Speaker 1: to change. It has to So how did we get here? So, yeah,
Speaker 1: a lot of people have said, well, it wasn't like
Speaker 1: this in the nineteen nineties. There was respect for teachers
Speaker 1: in the nineteen nineties. I think a couple of things change.
Speaker 1: One is online access to teachers. We have the Internet, now,
Speaker 1: we have social media, we have email. Grades are posted
Speaker 1: online twenty four to seven. Parents can check them, so
Speaker 1: there's more of a sense of I guess access and immediacy. Also,
Speaker 1: what changed is in the early two thousands when high
Speaker 1: stakes testing became a thing and teachers jobs ended up
Speaker 1: hinging in some cases and their pay hinging on how
Speaker 1: well a student, their students did on one particular test
Speaker 1: on one particular day, and that didn't take a new
Speaker 1: account whether the child was well fed, whether there were
Speaker 1: attentive parents at home, whether there was a trauma, whether
Speaker 1: they had resources at home. And it kind of started
Speaker 1: this climate of fear in schools, and I think that
Speaker 1: also has played into the strange relationship now between teachers
Speaker 1: and parents. Investigative reporter and New York Times best selling
Speaker 1: author Alexandra Robbins talking about her new book The Teachers,
Speaker 1: A Year inside America's most vulnerable important profession. Bloomberg's just
Speaker 1: met in with Carol there as well. For the full conversation,
Speaker 1: check out our podcast feed on Apple or at Bloomberg
Speaker 1: dot com. You got to say that book to The
Speaker 1: New York Times just put out a list in the
Speaker 1: past week of top non fiction books to read, and
Speaker 1: this came up on it. So did a book by
Speaker 1: our own Ashley Vans. Just putting that we love Ashley Vans.
Speaker 1: We certainly do, all right. That reps up the weekend
Speaker 1: edition to Bloomberg Business Week from Bloomberg Radio. Thank you
Speaker 1: so much for joining us. I'm Carol Masser and I'm
Speaker 1: Madison Mills. Be sure to tune into Bloomberg Business Week
Speaker 1: Monday through Friday, starting at three pm mostertime on Bloomberg Radio.
Speaker 1: You can also watch your daily broadcast on YouTube. Just
Speaker 1: search Bloomberg Global News and we're simulcast on Bloomberg Originals
Speaker 1: available at Bloomberg dot com, Slash Originals, and streaming platforms
Speaker 1: like Roku, Amazon, Fire TV, Samsung TV Plus and more.
Speaker 1: And find our Bloomberg BusinessWeek podcast at Bloomberg dot com,
Speaker 1: Apple or wherever you get your podcasts. The latest edition
Speaker 1: of the magazine is also out now. The double issue
Speaker 1: available on newsstands now at Bloomberg dot com and has
Speaker 1: always on the Bloomberg Terminal, have a good and safe weekend.
Speaker 1: Stay with US. Today's top stories and global business headlines
Speaker 1: are coming up right now.