Speaker 1: I'm Caroline Hide of Bloomberg's San Francisco Viuro and Imed Ludlow.
Speaker 1: This is Bloomberg Technology Earnings, Earnings, Earnings, TESLA IBM layoffs.
Speaker 1: We know the stories. They come thick and fast they do,
Speaker 1: and the fact that we had such volatile day of
Speaker 1: trading and managed to push off those lows. Microsoft didn't
Speaker 1: manage to hold us down. But we've got to get
Speaker 1: to some of these earnings that still come after the bell.
Speaker 1: Tesla one of them accelerating cost reduction plans as profit
Speaker 1: it tops analysts estimates class The Senate takes up a
Speaker 1: bill to band TikTok nationwide after dozens of universities take
Speaker 1: action to block the Chinese owned app, and the space
Speaker 1: company rocket Lab lifts off from the Virginia Space Area
Speaker 1: as its first US lawn. Could has become a SpaceX,
Speaker 1: a small payloads earnings continuous, and Tesla as the one
Speaker 1: we've been waiting for, partly because there are so many
Speaker 1: headlines all the time, but partly because this is a
Speaker 1: global company with global vision of what's happening with the consumer.
Speaker 1: Tests up a lot of emphasis that it's China plants
Speaker 1: where a lot of the problems were yet comes straight
Speaker 1: to after ours reaction, we bounced around and market wasn't
Speaker 1: really sure what to make of it. Top and bottom
Speaker 1: line be I go straight to fourth quarter adjusted EPs
Speaker 1: a dollar nineteen cents to share because slightly above expectations.
Speaker 1: The big takeaway, I suppose beyond that is Tesla committing
Speaker 1: to this compounded annual growth rate of fifty saying they'll
Speaker 1: do around one point eight million units in production. Three.
Speaker 1: Let's get straight to Bloomberg. Shawn o'caine over in Austin, Texas,
Speaker 1: Sean give us the main takeaways from this earnings print. Well,
Speaker 1: I think one of the big things is that we
Speaker 1: realize there's maybe a little bit of it hit to
Speaker 1: the margins, but I think not as much as people
Speaker 1: are expecting. You know, it's obviously not a kind of
Speaker 1: margin growth that Tesla has been working with over the
Speaker 1: last couple of quarters. But we have to remember that
Speaker 1: their biggest cuts that they've made to their bracing game
Speaker 1: after a Q four. So I think there's going to
Speaker 1: be a lot more of the margin story to be
Speaker 1: told when we get to the next earnings call. So
Speaker 1: from this one, I think one of the big things
Speaker 1: we're looking at, is is really just you know, how
Speaker 1: how much inventory they left the year with sixteen days
Speaker 1: of inventory, the most that they've had since exiting a year.
Speaker 1: And and yeah, those troubles that they had in China,
Speaker 1: Shanna came, thank you for the breakdown. We've just got
Speaker 1: some breaking news coming from another key technology platform, you'll
Speaker 1: know it Meta Platforms making its decision ending the suspension
Speaker 1: of Trump's accounts. Well, we understand they were stand reinstating
Speaker 1: Trump's Facebook and Instagram and accounts after two years of
Speaker 1: course of being banned from the platforms says it's ending
Speaker 1: the suspension of Trump's accounts across Instagram and indeed across Facebook, following,
Speaker 1: of course, what happened on January six and Capitol Hill
Speaker 1: back into twenty one. We'll have more of that a
Speaker 1: little bit later in the show. And indeed Digital World
Speaker 1: that position shares are falling three postmarket in reaction to that.
Speaker 1: But let's get back to the story of the day.
Speaker 1: When it comes to Tesla and of course the numbers
Speaker 1: that we got out from the company and profit meeting Tashchini,
Speaker 1: we please to say Art director of Investment Analysis and
Speaker 1: Institutional Strategies, is with us, and of course your bullish,
Speaker 1: your bullish on Tesla in the long term, in the
Speaker 1: hair and the now, the production focus is there the
Speaker 1: demand to meet it? Well, you're absolutely right, you know,
Speaker 1: our our focus is over the five year forecast. UM.
Speaker 1: You know, Telsa's our top position in our r k
Speaker 1: q E t f UM. But so in terms of
Speaker 1: you know this this production goal, UM, you know they
Speaker 1: did mention. I think if you go back to they
Speaker 1: they're still on track over you know, a number of
Speaker 1: years to meet their compound and your growth rate. I
Speaker 1: think that the fears of UM, you know, margin and
Speaker 1: demand troubles are pretty overblown. You know our research we've
Speaker 1: used right slat of forecast UM Tesla's gross margins over
Speaker 1: time and basically for every cumult of doubling in production,
Speaker 1: you get a corresponding reduction in price. We also know
Speaker 1: that they're unveiling a new vehicle platform which is should
Speaker 1: be roughly half the cost of the Model three and Y.
Speaker 1: I think that could be a custom built autonomous vehicle
Speaker 1: that's gonna help margins. It's gonna give a huge bump
Speaker 1: to margins in the long term, because I think autonomous
Speaker 1: platforms could have really attractive margin structures and recurring revenue
Speaker 1: associated with them. Um. And then you know the last
Speaker 1: thing all hat is like the main story here is
Speaker 1: that evs are growing. Right, So evs as a category
Speaker 1: grew sixty percent year every year, while gas powered cars
Speaker 1: were down like seven percent. So that's where Tesla is.
Speaker 1: I'd i'd be worried about traditional autos if anything. Are
Speaker 1: you're worried in any way about the impact of Elon
Speaker 1: Musk himself on demand for test is going forward? Is
Speaker 1: in any way that being shown up in the demand erosion? Yeah.
Speaker 1: Elon Musk has always been a pretty controversial figure. Um.
Speaker 1: You know, I'd say, at a minimum, what what do
Speaker 1: we have to to go buy? Its really Tesla's results, Um,
Speaker 1: you know, against the Tesla alone in the fourth quarter,
Speaker 1: we know, groove sales by every year, while in that
Speaker 1: same quarter global auto sales were down roughly eight So
Speaker 1: that's what we have to go off of. Um. You know,
Speaker 1: he's a he's a cult figure. I think he's really
Speaker 1: the person to drive the company towards reaching that full
Speaker 1: self driving goal, um, where you can actually launch an
Speaker 1: autonomous ride hill platform. Um. You know, so we're happy
Speaker 1: that he's committed to Tesla and sticking on for that. TSH.
Speaker 1: I want to bring some some more information, I suppose
Speaker 1: to our audience about what you were talking about in
Speaker 1: the shareholder deck. Tesla's talking about its next generation vehicle
Speaker 1: platform under development, additional details to be shared at the
Speaker 1: invested day March the first three I think that's what
Speaker 1: you were saying about your You suspect that that is
Speaker 1: some form of fully autonomous vehicle for the future. I
Speaker 1: wanted being it back to the here and now again
Speaker 1: because a lot of what Tesla hinted at was the
Speaker 1: problems of or were largely China related. It basically talked
Speaker 1: about the production issues largely being centered on the Shanghai plant.
Speaker 1: You look at margins where they came in, you look
Speaker 1: around the narrative on a SPS average selling price. We
Speaker 1: went to our audience, okay, and we said, did those
Speaker 1: price cuts in North America, Europe, China push you to
Speaker 1: consider buying a Tesla? These are the results pretty clear,
Speaker 1: although I would point out they changed over the course
Speaker 1: of the day, you know, with with a good number
Speaker 1: of ballots casts. I suppose yes, testers global price cuts
Speaker 1: have tempted at least our audience to buy affordability. Is
Speaker 1: Tesla too expensive right now for a consumer? You know?
Speaker 1: I think so, first of all, and I'm glad you
Speaker 1: showed that chart. One of the things that we learned
Speaker 1: is that since the price cuts, um, you know, lead
Speaker 1: times have actually extended a bit, so we do not
Speaker 1: you know, we're already getting sort of initial indications of
Speaker 1: demand here. We also know that the price cuts made
Speaker 1: more vehicles eligible tax credits. Of course, we don't actually
Speaker 1: model text credits in our analysis. We think evs are
Speaker 1: the solution longer term compared to gas powered cars, regardless
Speaker 1: of regulation. UM. So you know, I again, I think
Speaker 1: really that that's the picture here, Um that electric vehicles
Speaker 1: are taking share, Tesla's the market leader. Um, they're just
Speaker 1: invested in in additional capacity. Um. You know, they're at
Speaker 1: a single digit low percentage points of total auto sales.
Speaker 1: So I think there's still Tesla is um and evs
Speaker 1: against still single digit percentage of total auto sales as well.
Speaker 1: So I think you know that there's room to grow
Speaker 1: on both of those. We've got a lot of questions
Speaker 1: on Twitter for you from our audience as well, most
Speaker 1: of them related to testas energy business. What did we
Speaker 1: learn about the energy business going forward? Will it be
Speaker 1: more of a star? Yeah, so they did highlight the
Speaker 1: energy business recently and again with that UM factory expansion.
Speaker 1: They talked how you know they've they've they've seen some
Speaker 1: good growth in that business overall. All, like our our
Speaker 1: model is mostly focused on vehicles, we think that they
Speaker 1: should UM. Well, you know, Tesla Energy does offer a
Speaker 1: really interesting proposition to consumers, and actually we've done some
Speaker 1: work to show that energy storage combined with bitcoin mining
Speaker 1: can offer a great proposition to even use um make
Speaker 1: more use of renewable sources. But you know that aside,
Speaker 1: what should you focus on for Tesla UM? In our opinion,
Speaker 1: it's electric vehicles and autonomy. Those are the two main
Speaker 1: stories here that I'd watch over the next five years. Yeah,
Speaker 1: it's really quickly. Gen month Sor of Loot points out
Speaker 1: that they guided to around one point eight million vehicles
Speaker 1: four twenty three, which, if you track a fifty percent
Speaker 1: compound annual growth rate, doesn't make any sense based on
Speaker 1: last year's number. Do you see what I'm saying? Yeah,
Speaker 1: so last year, um, you know, year over year, yet
Speaker 1: it does fall short of that fifty But if you
Speaker 1: go back to UM, you'd still be coming in over
Speaker 1: that a few year period, uh, with the growth rate.
Speaker 1: So I think that's what they meant in their press release.
Speaker 1: Of course, I'm sure a lot of people will harp
Speaker 1: on that figure. UM, But again, I think longer term,
Speaker 1: the story is electric vehicles are here to stay, and
Speaker 1: I'd be really worried if I was Forward or the
Speaker 1: other traditional auto manufacturers were the majority of their installed
Speaker 1: based in the vehicles that they sell or gas powered cars,
Speaker 1: which we see declining. UM, that's not going away. And
Speaker 1: by the way, they don't have a great autonomous solution either.
Speaker 1: They killed that project. So I think that's where the
Speaker 1: concern should be focused here on the traditional auto market. Actually,
Speaker 1: the other question from our audience for you is what
Speaker 1: does Zelon Musk have to say on March the first,
Speaker 1: the invested day to convince us of that future that
Speaker 1: goes beyond Tesla just being a car company. Well, like
Speaker 1: I said, I mean, I'm excited to hear more about
Speaker 1: the autonomous vehicle. They had said that they would mass
Speaker 1: produce a purpose stilt autonomous car in war UM. We
Speaker 1: think that this could totally change Tesla's business model. You know,
Speaker 1: our price target for six split adjusted is around fift
Speaker 1: dollars per share. I think over sixty of Tesla's enterprise value,
Speaker 1: you know, could be attributable to that autonomous ride hill platform.
Speaker 1: I think it'll have attractive software like margins. It will
Speaker 1: become a recurring revenue stream as opposed to you know,
Speaker 1: one off vehicle sales that we see today. It's gonna
Speaker 1: totally change the game and their way ahead. And we
Speaker 1: see that they have nearly a billion miles driven in
Speaker 1: full self driving data. They have millions of cars on
Speaker 1: the road collecting data. Um, that's much more than competitors.
Speaker 1: Director of Investment Analysis and Institutional Strategies Tasha KINI very
Speaker 1: good to catch up. Thank you for your quick reactions.
Speaker 1: That tests the print. Meanwhile, another big story that's just broken,
Speaker 1: IBM has announced job coups. The company will lay off
Speaker 1: about one point five percent of its worldwide workforce, which
Speaker 1: amounts to roughly four thousand jobs. You see the share
Speaker 1: reaction in after hours their IBM also released earnings, delivering
Speaker 1: an upbeat forecast in the wake of its restructuring plans.
Speaker 1: Carrect interesting, We're going to talk about restructuring a certain
Speaker 1: businesses a little bit more now because more earnings from
Speaker 1: more slim down. A T and T CEO John Stanky
Speaker 1: is gonna be joining us for peace to say from
Speaker 1: San Francisco Bloomberg, We're going to talk earnings a little
Speaker 1: bit more because A T and t s reaction to
Speaker 1: them positive over the trading day, and this is as
Speaker 1: they add customers, even though perhaps three cash flow forecast
Speaker 1: miss some anest expectations. Want to dig into what is
Speaker 1: a slimmer perhaps lean a mina A T and T
Speaker 1: with none other than it's CEO John Stanky. We're joyfully
Speaker 1: welcoming him to the show. Six and a half percent
Speaker 1: higher on the day. John, just talk to us about
Speaker 1: what you think the investor base heard and liked. Is
Speaker 1: it the fact that you're adding these customers. Is it
Speaker 1: that you're able to share some of the costs going forward. Well,
Speaker 1: thanks for having me in, and I think what we're
Speaker 1: seeing maybe today is kind of a continued story and
Speaker 1: accumulation of the last several quarters. Obviously to your opening,
Speaker 1: we've been focusing the business to be much more adept
Speaker 1: in the communications space, and we started that work in
Speaker 1: earnest about two and a half years ago, two years ago,
Speaker 1: and completed the Warner Media transaction early part of last year,
Speaker 1: and I think investors were stepping back and asking is
Speaker 1: this the right place to go and are they going
Speaker 1: to be able to execute around it? And I think
Speaker 1: what you've seen over the last couple of quarters, in
Speaker 1: particular in the third and fourth quarter, where we continue
Speaker 1: to grow the business, we continue to pick up the
Speaker 1: customer base, and now we're seeing the profitability and cash
Speaker 1: accretion back into the business as we've made those investments
Speaker 1: and managed to run the business better. I think they're
Speaker 1: starting to gain confidence in that and rightly so. And
Speaker 1: you know, we intend to kind of stay focused on
Speaker 1: that and keep moving forward with that strategy. Invest is confident.
Speaker 1: What about consumers at the moment? John, You've got a
Speaker 1: great bird's eye perspective on how much consumers want to
Speaker 1: be spending? Can you pass on costs? What does the
Speaker 1: macro get like? Well, you know, we do have a
Speaker 1: we have a broad scale of consumers at every end
Speaker 1: of the socioeconomic stream, and I think there's probably you know,
Speaker 1: a couple of different stories in this. Clearly the low
Speaker 1: end of the consumer basis stressed a bit more. Um
Speaker 1: we tend to see that exhibit in them taking a
Speaker 1: little bit more time to pay their bill, or to
Speaker 1: call in and ask for arrangements to pay their bill,
Speaker 1: or possibly recharge a little less frequently if they're a
Speaker 1: prepaid subscriber. But it's not that they aren't buying the service,
Speaker 1: and it's not that they aren't paying. They're trying to
Speaker 1: manage it within an overall stressed environment where I think
Speaker 1: they're making other choices on more discretionary items that they're
Speaker 1: moving out and just trying to balance their overall their
Speaker 1: overall obligations. At the top to the market, it's still
Speaker 1: really strong. Um you know, we're coming off a good
Speaker 1: volume year. I think it will temper a little bit
Speaker 1: as we move into this year, but it's still going
Speaker 1: to be pretty healthy. And it's just indicative of how
Speaker 1: ingrained in life I think the products and service as
Speaker 1: we sell our Hey, John, I want to jump on that.
Speaker 1: You know, the cell side reaction or that conclusion seems
Speaker 1: to be your prioritizing financial growth over subscribe a grave
Speaker 1: Yet in the fourth quarter you added what six d
Speaker 1: and fifty six thousand new phone subscribe as strong growth
Speaker 1: in the fiber optic business. They right, Is it a
Speaker 1: case of financial growth? Subscribe a grateful Can you achieve both?
Speaker 1: It's it's both, and um, I actually probably would not
Speaker 1: agree with that conclusion. And we will share a creative
Speaker 1: this year in the industry and both wireless and in
Speaker 1: our fixed broad dawn business, and so um you know,
Speaker 1: we are growing not only share, but we're growing profitability
Speaker 1: and it's coming from getting the right customers the right way.
Speaker 1: And we think we've done a really good job of
Speaker 1: tuning our offers into the right segments where we've been
Speaker 1: under penetrated to be able to gain that share. And
Speaker 1: we've been working really hard on restructuring our business and
Speaker 1: our constructure, and we can do both at the same time,
Speaker 1: and I think as a result of that, we can
Speaker 1: drive profitability growth at the same time that we're able
Speaker 1: to grow the business at the top one. Hey, John,
Speaker 1: we're a technology show. We pride ourselves and talking about technology.
Speaker 1: But I gotta I gotta put the hard questions to
Speaker 1: you as well. So I ask it like this, how
Speaker 1: much visibility have you really got through the end of
Speaker 1: the year. Is it that five G continues to drive
Speaker 1: this growth? People buying new handsets, is the consumer strong
Speaker 1: or actually you being a bit conservative here because you
Speaker 1: don't know what's going to happen. Well, you know, Visibility
Speaker 1: in general, I would say over the last two years
Speaker 1: has probably been a bit more challenge given the environment
Speaker 1: we're in. But I'd take it at two levels. There's
Speaker 1: the visibility on the geopolitical side, which I'm not going
Speaker 1: to sit here and tell you that I'm better than
Speaker 1: people who do that every day for a living. I mean,
Speaker 1: I don't know when somebody who leads a large country
Speaker 1: somewhere around the globe is going to do something really
Speaker 1: silly or stupid that could have a big impact not
Speaker 1: only on a T and T but literally every for
Speaker 1: profit enterprise around the globe that I have no visibility
Speaker 1: to or any better visibility than anybody else. But the
Speaker 1: visibility on how the economy is performing, I think we
Speaker 1: have reasonable visibility. I think we've been pretty conservative in
Speaker 1: our assumptions. Moving into three, I would point back to
Speaker 1: our performance in two is a point Inflation clearly peaked
Speaker 1: last year. We were hit by that. Um we were
Speaker 1: able to navigate through that through a lot of good
Speaker 1: management techniques, combination of managing our cost structure as well
Speaker 1: as and sure we were driving the right value into
Speaker 1: our consumer base. UM, I don't think we're going to
Speaker 1: see an environment that's probably more dynamic than what we
Speaker 1: saw last year. We'll have new challenges to work through,
Speaker 1: but this is a management team that's shown itself to
Speaker 1: be pretty adaptable and pretty agile and being able to
Speaker 1: adjust to those things. And I feel our assumptions on
Speaker 1: our guidance or are consistent with what we can do there.
Speaker 1: It feels like you're getting creative to John. Of course,
Speaker 1: you're focused on the good things the investors want to see, dividends,
Speaker 1: debt payment, of course, after what had been a lot
Speaker 1: of building up of debt over M and A and
Speaker 1: now the unwinding of that. I'm interested in how you're
Speaker 1: doing joint ventures. I was interested, for example, in the
Speaker 1: black Rock Giggle Power deal. And the way that you're
Speaker 1: going to be offering fiber. Is this about ensuring that
Speaker 1: you're spreading the risk as you still continue to invest
Speaker 1: in the fiber plan. It's a combination of things. Certainly,
Speaker 1: it's a dynamic of taking a new investment thesis that
Speaker 1: frankly is probably not well proven in the market today,
Speaker 1: and sharing some of that risk as we prove it
Speaker 1: in and I'm trying to be responsive to share owners
Speaker 1: and ensure that as we consume capital and invested, that
Speaker 1: they can gain confidence that we can do that wisely.
Speaker 1: And I think we've done a really good job of
Speaker 1: that in our traditional lines of business over the last
Speaker 1: couple of years. Since this is a new approach um,
Speaker 1: what I've told the street and what I want to
Speaker 1: do here is make sure that as we put the
Speaker 1: first tranche of investment and that we can come back
Speaker 1: and show them that we can do this right and
Speaker 1: earn a very competitive return with it. And to the
Speaker 1: extent that we do that, and when we do that,
Speaker 1: will of course put our foot on the accelerator and
Speaker 1: go a little bit faster and do a little bit more.
Speaker 1: And this allows us to do it with a partner.
Speaker 1: It allows us to offload some of the risks during
Speaker 1: that proven period, so that I think it keeps everybody
Speaker 1: comfortable on the continue income production capabilities of the existing
Speaker 1: business while trying to find a new vector for growth.
Speaker 1: A new vector for growth. Everyone said five G is
Speaker 1: it the way we're all going to have connected devices?
Speaker 1: Where industry is going to connect is it here in
Speaker 1: here and now, John, Well, it's not here, and it's
Speaker 1: full maturity. And I think what I would first say
Speaker 1: is we shouldn't underestimate what I will call the meat
Speaker 1: and potatoes aspect of investing in the new five G spectrum,
Speaker 1: in the new five G equipment, which allowed for more
Speaker 1: capacity on wireless networks, and what wireless operators have done
Speaker 1: with that compath City is have have individuals move into
Speaker 1: new devices and buy up on more robust plans with
Speaker 1: higher value, and that's driven our poos up. And without
Speaker 1: that capacity and without that increased performance, that wouldn't have
Speaker 1: taken place. But that's not the be all end all
Speaker 1: the five G. The beyond all the five G is
Speaker 1: the capabilities that brings in to enable what you were
Speaker 1: talking about before I came on the show, which is
Speaker 1: things like autonomous vehicles, so that if Tesla decides to
Speaker 1: bring a vehicle to market and they need to have persistent,
Speaker 1: high quality connectivity everywhere that vehicle goes, that's when five
Speaker 1: G is really going to shine. And the networks are
Speaker 1: just getting now to the point where they're more ubiquitous
Speaker 1: and scaled enough to do those types of things. And
Speaker 1: I do believe that will open up new revenue streams,
Speaker 1: all right, A T and T C I, John Stanky,
Speaker 1: I'm glad you've been watching the show in that coverage
Speaker 1: of Test. It will get you on in another ninety
Speaker 1: days time and see how you're doing. It's finally come out.
Speaker 1: Meta has indeed announced its decision to reinstate former President Trump.
Speaker 1: On course, Instagram and Facebook most cut WADNA joined us
Speaker 1: now to discuss and we knew it's what Trump wanted,
Speaker 1: that's right, Yeah, And we kind of expected. I think
Speaker 1: this is what Facebook was going to do too, because
Speaker 1: what we said and what they had said was they
Speaker 1: needed to basically figure out is there still a heightened
Speaker 1: risk of you know, violence in this case, right, That's
Speaker 1: why he was suspended on after January six, and you
Speaker 1: know it's been two years, right, so I think they
Speaker 1: it would have been hard for them to come up
Speaker 1: with a good reason to keep him off. Instead, they're
Speaker 1: bringing him back and saying if he has more violations,
Speaker 1: he'll be suspended again quite quickly. Right. And they also
Speaker 1: said it will end in the coming weeks, extends to
Speaker 1: Facebook and Instagram. You know, I thought we knew this
Speaker 1: was coming, right, Yeah, it's it's not unexpected, especially with
Speaker 1: what we saw from Twitter. Right, He's been back on
Speaker 1: Twitter or could be back on Twitter for the last
Speaker 1: couple of months. He has not yet tweeted, So I
Speaker 1: think the big question now is when will we actually
Speaker 1: hear from him? Right? Facebook was very helpful for him
Speaker 1: during the election. He has a huge base there. I
Speaker 1: imagine he'll be back on Facebook and I don't know
Speaker 1: how quickly. Yeah. Interesting, and of course the digital world
Speaker 1: acquisition shares we're falling on the back of businesses, obviously
Speaker 1: a new social media for Aye that they've been making himself. Ultimately,
Speaker 1: will we see better criticized, of course, but they're going
Speaker 1: to be criticized either direction. All Right, Tesla is making
Speaker 1: more cars than they can sell. They're doing whatever they
Speaker 1: can to sell cars, and customers haven't responded that enthusiastically yet.
Speaker 1: Tesla is running into kind of a buzz saw of issues,
Speaker 1: many of which have nothing to do with Elon Musk.
Speaker 1: You've got interest rates going up, which makes its cars
Speaker 1: more expensive. You have problems in China, which is one
Speaker 1: of its biggest markets, and you have competition from rival automakers.
Speaker 1: You know, Ford is bringing out these cars that weren't
Speaker 1: around a few years ago that are really competitive. Customers
Speaker 1: are starting to take a second look at other brands.
Speaker 1: But really, there's this other problem. Musk desperately wants to
Speaker 1: be considered funny. And it is this desire, which we
Speaker 1: see play out every day on Musk's Twitter account, that
Speaker 1: may be starting to hurt Musk's most important asset, his
Speaker 1: own reputation. At the end of the last quarter in December,
Speaker 1: the company started frantically cutting prices, and you might think
Speaker 1: maybe they would have, you know, an epic quarter as
Speaker 1: must predicted. In fact, they did not meet expectations that
Speaker 1: sent the stock down further, kind of creating a sense
Speaker 1: of failure and disarray. You're starting to see investors, analysts,
Speaker 1: even some people who are big fans of Tesla and
Speaker 1: big fans of Musk say something that would have almost
Speaker 1: been unthinkable a couple of years ago, which is that
Speaker 1: Musk needs to step back. He needs to either find
Speaker 1: a way to spend less time on Twitter, or, if
Speaker 1: he's committed to Twitter, to spend less time with Tesla.
Speaker 1: And it was absolutely fascinating read that Max Chafkin and
Speaker 1: Dana Hall had on the Blue Business Week Today front
Speaker 1: cover basically just brutal and analysis of how he's not
Speaker 1: that funny ultimately, but his decision to try and get
Speaker 1: these laughs has almost eroded some value of Elon Musk.
Speaker 1: Interesting Tasha Kearney, of course from ARCS saying at the
Speaker 1: moment that isn't an issue for Tesla going forward, things
Speaker 1: that ultimately the CEO is still a benefit rather than
Speaker 1: a hindrance. But I thought it was a great quote
Speaker 1: in this story that just basically said, look, you're not
Speaker 1: going to boast about you buying a Tesla anymore. And
Speaker 1: they're saying somewhere between basic and cringe if we're going
Speaker 1: to be saying that you're about the other side of
Speaker 1: the argument is that this is all part of Musk's
Speaker 1: master plan, you know, the focus all on him, free advertising,
Speaker 1: free discussion around although he bought Twitter fort four billion dollars.
Speaker 1: But you know what I mean, and you look at
Speaker 1: the regularly true fightings and Tesla say it's time and
Speaker 1: time again Elon Musk is central central to our future success.
Speaker 1: You know, we talk about key Man risk, they're intertwined
Speaker 1: Tesla and Elon Musk story. Now, speaking of Twitter, a
Speaker 1: new Twitter whistle blower has told Congress that the company
Speaker 1: continued to violate privacy and data security protections even after
Speaker 1: Musks takeover. Bloomberg's Emily burn Baum is in d C.
Speaker 1: Give us the details of what this whistle blower is claiming. Yeah,
Speaker 1: thanks so much for having me. Um. So, this new
Speaker 1: twittle Twitter whistle blower um, A lot of his allegations
Speaker 1: focus on this program internally, a Twitter called god Mode,
Speaker 1: which allowed any Twitter employee to access any Twitter users account,
Speaker 1: either to delete tweets or to access or to tweet themselves.
Speaker 1: Um And essentially, the whistleblower says, the FTC should really
Speaker 1: look into this because the company is flagrantly violating its
Speaker 1: consent to cry. Indeed, your story says a companie was
Speaker 1: shared with the Justice Department, the Federal Trade Commission, the
Speaker 1: FTC is, say our members of Congress. Ultimately, where does
Speaker 1: this get taken? Emily? So? The FTC already opened an
Speaker 1: inquiry into Twitter's privacy practices last year after a different
Speaker 1: Twitter whistleblower came forward. So that was Peter zako Um
Speaker 1: also known as Mudge and the hacking community. UM. He
Speaker 1: was Twitter's head of privacy and he came out. You know,
Speaker 1: there was a congressional hearing. He said there are horrible
Speaker 1: security and privacy violations across this platform. So the FTC
Speaker 1: had already opened that investigation um and they have just
Speaker 1: broadened it UM and this is probably going to be
Speaker 1: the next thing that investigators are looking at as they
Speaker 1: seek to UM find the company. The question still goes
Speaker 1: on about regulation across the board. Emily urn bound there
Speaker 1: on all focused on Twitter, But let's turn our attention
Speaker 1: to the other key social media player that has taken
Speaker 1: markets chef from a lot of these players and edits TikTok.
Speaker 1: And we get again focused from Congress on whether or
Speaker 1: not they want to ban TikTok outright. Liver of course
Speaker 1: been a Republican senator, Joshally tweeting that he will present
Speaker 1: a bill to ban the popular app nationwide. Now, of
Speaker 1: course we're already getting little tick bits, aren't we, in
Speaker 1: terms of what the Texas University is driving ensure that
Speaker 1: they confront run any sort of federal action here, but
Speaker 1: it really is building it's specific action of how well
Speaker 1: in this case that the Texas governor statewide is trying
Speaker 1: to remove access to TikTok I've got a question when
Speaker 1: we get into it about actually who's really under pressure
Speaker 1: here because state level, right, what we're all waiting on
Speaker 1: is a federal level response to this story. Yeah, let's
Speaker 1: get to it. Let's ask some more questions. Let's get
Speaker 1: Alex Bronco, who of course covers this company. So in
Speaker 1: debt Alex, I guess slightly unsurprising that the bagging of
Speaker 1: the drum keeps on coming. It keeps coming in Josh
Speaker 1: Holly has been one of the loudest bangers of that drum.
Speaker 1: This newest bill is actually one of two that are
Speaker 1: now starting to flot around in Congress, with Josh Holly
Speaker 1: tweeting that he believes that TikTok, because it's own by
Speaker 1: Chinese company, is a quote back door into American lives.
Speaker 1: He's worried about potential data sharing to the Chinese government,
Speaker 1: so he is putting this bill through. Now, you talked
Speaker 1: about pressure. There's obviously pressure here on TikTok, but there's
Speaker 1: also pressure on this kind of national security review that's
Speaker 1: been going on for years under the Biden administration. You'll
Speaker 1: note whether it's the Texas governor or Josh Holly, the
Speaker 1: Senator there are a lot of Republicans were being very
Speaker 1: loud about TikTok. It does seem like the Democrats are
Speaker 1: being a little bit quier, perhaps because Biden's Biden's administration
Speaker 1: is the one who is kind of doing this in
Speaker 1: depth national security review of TikTok. It seems that they
Speaker 1: are kind of waiting and deferring to that process to
Speaker 1: come to a conclusion before they pile on or speak
Speaker 1: really publicly about what they think should happen with TikTok
Speaker 1: at large. Well, in TikTok's response was to say, okay,
Speaker 1: we reach a deal with Oracle where we have us
Speaker 1: use a day to house the hon Oracle servers, which
Speaker 1: are domiciled in the United States. So access to use
Speaker 1: the data was the worry. It seems like that's even
Speaker 1: the concern anymore. It goes deeper than that, And this
Speaker 1: conversation shifted and we started talking about it um on
Speaker 1: this show before it shifted in Congress. Tiktop speed is
Speaker 1: basically decided by an algorithm. Everybody's feed is different. It's personalized.
Speaker 1: That concerned that there could be some influence on that
Speaker 1: feed or influence on the most influential creators on TikTok
Speaker 1: that that could actually be um the the idea that's
Speaker 1: coming front and center. You'll remember the last time we
Speaker 1: talked really big about influence on social media when it
Speaker 1: had a big impact in the political sphere. Uh, the
Speaker 1: very first time. It was kind of in sixteen around
Speaker 1: the election. I know, were eighteen months out from the
Speaker 1: next to gust presidential election. But as you know, Congress
Speaker 1: gets its feed on the ground, this new Congress gets
Speaker 1: feed on the ground. I'm sure they are thinking about
Speaker 1: how a bad actor, or if they see China as
Speaker 1: a bad actor, how they might be able to influence
Speaker 1: the feed of an app that's becoming stickier and stickier
Speaker 1: with folks spending more time on it in American particular,
Speaker 1: alex It's an interesting global story as well, isn't it?
Speaker 1: And I'm not sure how much you can speak to it.
Speaker 1: But of course India took its first step spanned it Europe.
Speaker 1: It's interestingly considering the amount of European regulation the front
Speaker 1: runs the US, they really haven't been as focused on
Speaker 1: TikTok as the United States has. From this perspective, when
Speaker 1: we do have division among Democrats Republicans, are they going
Speaker 1: to come together over this. Do you think whether they
Speaker 1: come together formally, It seems like at least their voices
Speaker 1: are coming together. In the past few weeks, Europe did
Speaker 1: start to turn an eye to TikTok. You saw the
Speaker 1: European regulators who are talking a lot about the new
Speaker 1: data security acts that's coming it down this year in Europe,
Speaker 1: basically going to TikTok CEO saying, look, we're not happy
Speaker 1: with your content moderation as it stands today. If if
Speaker 1: if these new acts came in place today and not
Speaker 1: in September, the company might be in a little bit
Speaker 1: of hot water when it comes to EU data security laws.
Speaker 1: So it seems like whether or not they formally come
Speaker 1: together and follow India's lead and banning it, or if
Speaker 1: it just seems to be kind of a really heated
Speaker 1: moment where folks are taking notice of TikTok, the voices
Speaker 1: are getting louder. You tend to be has tended to
Speaker 1: be a bit stricter with its data privacy laws. We
Speaker 1: know that Congress could be a little bit of a
Speaker 1: tough place to navigate when it comes to bill so
Speaker 1: perhaps the US will be a step behind, But it
Speaker 1: does seem like across the globe, TikTok has eyes on
Speaker 1: it from all of kind of the right people for
Speaker 1: consumer protection and some of the wrong people. If you're
Speaker 1: in the seat of the company, Bloomberg's Atles Brink are
Speaker 1: just terrific reporting on all things TikTok, not just today,
Speaker 1: but over the course of course of a week. Tomorrow
Speaker 1: timely FCC Commissioner Brendan car will join us here on
Speaker 1: Bloomberg Technology Live to talk all things TikTok in an
Speaker 1: exclusive interview. One Caroline that we've been waiting a little
Speaker 1: while for now I can't wait for that. Meanwhile, let's
Speaker 1: turn our attention to crypto for a moment, because well,
Speaker 1: the bancrupt lender Genesis is working to get some money
Speaker 1: back from the man that is known as Bitcoin Jesus.
Speaker 1: Now overall, Genesis says rogervert owes them more than a
Speaker 1: twenty million dollars, alleging that he failed to settle options
Speaker 1: transactions that expired in December. There on early Backer, of course,
Speaker 1: a bitcoin said on Twitter that he has the funds
Speaker 1: to pay Gensis, but this is a breach of their agreement.
Speaker 1: Now coming up, should we go to space a major
Speaker 1: rocket launch in the United States and it wasn't SpaceX,
Speaker 1: this is Bloomberg salesforce. You might have seen a sprinkling
Speaker 1: of celebrity around this company. Maybe it's Matthew McConaughey and
Speaker 1: an ad maybe it's Will I Am performing a drill force.
Speaker 1: They're big marketing event. What about giving actual corporate advice?
Speaker 1: That's for some of the reporting. Is that them, him
Speaker 1: and the many of the CEO of this massive software
Speaker 1: company depending on celebrities for some pretty high level corporate
Speaker 1: discussions have a question for many an activist investor now,
Speaker 1: and there's three involved in the stock re member, is
Speaker 1: is the CEO distracted and is he really being focused
Speaker 1: on profit where he should be? And of course this
Speaker 1: is some reporting coming out of the Financial Times. No
Speaker 1: one they were what they call him celeb schmoozing CEO.
Speaker 1: But it is interesting that at least one or two
Speaker 1: people they spoke to have been really caught off guard
Speaker 1: by them coming out of the celebrities coming out of
Speaker 1: quite high level conversations. So mart Benioff has lost two
Speaker 1: co CEOs in the last few years. We're talking about
Speaker 1: two pretty well known celebrities having major influence in the company.
Speaker 1: Can I take you back now that you're here in
Speaker 1: San Francisco to two thousand and sixteen, when that Salesforce
Speaker 1: Towers first built, and at the time, bear with me,
Speaker 1: there was stories and reports in the media about a
Speaker 1: a zen Master living with Mark Benioff in his house,
Speaker 1: Master Hahn, Vietnamese Buddhist monk, and when he was building
Speaker 1: Salesforce Tower, apparently he took under advisement what these Buddist
Speaker 1: monks had to say about building the ultimate space for
Speaker 1: employee relaxation. It's all I'm saying is he has a
Speaker 1: track record of seeking guidance from those not normally associated
Speaker 1: with the world of tech. Well said. And maybe I
Speaker 1: think there was a lot of coverage at the time
Speaker 1: about all the Salesforce Tower actually sinking, rather than sayings
Speaker 1: that was all the narratives blaming that exactly. But what's
Speaker 1: so interesting is that these activists that come on boarders
Speaker 1: like questioning this behavior. Ultimately, I thought it was interesting,
Speaker 1: real questioning his philanthropy. I've never heard many and investor
Speaker 1: really questioned the deep phil agendas of his voice association
Speaker 1: with this city in particular. Yeah, exactly, I can understand
Speaker 1: worries about a distraction by bringing in the wrong celebrity
Speaker 1: for technological advice. Whill I am. I know he has
Speaker 1: a gadgetal too, but I don't know how much he
Speaker 1: knows about Sorry sales, But ultimately I do think it's
Speaker 1: notable that I wouldn't want to see him being distracted
Speaker 1: from philanthropy personally for the focus on profitable But you know,
Speaker 1: we talked this week about dream Force, the expense of
Speaker 1: dream Force and what it is. You know, it's a CRM, right,
Speaker 1: but salesforces this brand that everyone knows and clearly there's
Speaker 1: been a benefit for it for that now investing guy,
Speaker 1: isn't he right? But investors now saying Okay, get this
Speaker 1: under control. Yeah, profits first. Maybe it's a I don't
Speaker 1: think it's a Budhist mantra, writes a mantra coming from activists.
Speaker 1: Unionization in tech is a global discussion, and Amazon workers
Speaker 1: in Coventry in the UK took part in a part
Speaker 1: of a historic strike, disrupting the e commerce chance operations
Speaker 1: for the first time in that nation. Zzie Burden has
Speaker 1: more from that. We're in Coventry in the English Midlands,
Speaker 1: where Amazon workers are striking for the first time in
Speaker 1: the UK. You can see the GMB union behind me
Speaker 1: has set up camp at the entrance to the warehouse
Speaker 1: and it's stopping workers on their way in asking if
Speaker 1: they want to join the strike join the union. So
Speaker 1: far about three hundred workers are expected to have joined
Speaker 1: at least and it's all about pay. They're asking for
Speaker 1: a fifty percent raise five zero to fifteen pounds an hour.
Speaker 1: This roise isn't going to impact how Amazon Amazon does business.
Speaker 1: What it will do is actually start to bring some
Speaker 1: of that money that Amazon generates back into the economy. Now,
Speaker 1: Amazon has its own problems. It's having to deal with
Speaker 1: people adjusting back to their pre pandemic spending habits. It's
Speaker 1: already said that it's going to cut about eighteen thousand
Speaker 1: jobs across its branches around the world. That's about one
Speaker 1: percent of its total workforce, the biggest call in it's
Speaker 1: near thirty year history. And here in the UK it's
Speaker 1: closing three warehouses, opening two more. But it's adding to discontent.
Speaker 1: This is a company that is hostile to unions. This
Speaker 1: is a company that doesn't take health and safety seriously,
Speaker 1: and this is a company that simply as something its
Speaker 1: workers in our Now, what's also significant about this strike
Speaker 1: is it shows that the discontent has spread beyond the
Speaker 1: public sector to the private sector. No longer is it
Speaker 1: just the chaos across travel, healthcare, teaching, the civil service.
Speaker 1: Now it's the private sector to It gives new meaning
Speaker 1: to the warnings about a wage price spiral, because if
Speaker 1: Amazon were to high its prices in response to covering
Speaker 1: this bigger wage bill, it would add surely to the
Speaker 1: inflation problems that the UK is facing. Bimbos Lozzie Burden
Speaker 1: there now from down on Earth to up in space.
Speaker 1: Rocket Lab had its first US launch last night. You
Speaker 1: can see it there on your screen and I'm delighted
Speaker 1: to say. The CEO of the company, Pezebec, joins us
Speaker 1: now on the phone. He's on the move. One question
Speaker 1: from our Alreudien for you. How many launches are going
Speaker 1: to come from the United States this year, Peter here,
Speaker 1: So thanks very much for somewhere between four and six,
Speaker 1: and we're probably about fifteen launches in total between our
Speaker 1: global launch sites. There was a moment where we see
Speaker 1: on our screens launched successful. We're waiting. It's tense, it's scary.
Speaker 1: Are the satellite is going to deploy Peter, and they deployed.
Speaker 1: How traumatic was that for you in the moment, Well,
Speaker 1: I knew what was going on. For not very traumatic
Speaker 1: at all. We have ground stations placed around the world UM,
Speaker 1: and one of the ground stations went offline, as they
Speaker 1: do occasionally, was one in Australia, so there was probably
Speaker 1: a snake called around it and tied it up or
Speaker 1: something like that. But twenty minutes later we had another
Speaker 1: part of another ground station UM and we had contact
Speaker 1: with the vehicle over Africa. So we're all. We're all happy.
Speaker 1: But for those watching you probably wondering what was going on,
Speaker 1: but you all successful and happy to see uh hundred
Speaker 1: and cooky purpose customer on all. But it's a quite
Speaker 1: an emotional right for an investor as well, because the
Speaker 1: stock soared and he was pointing it out pre market.
Speaker 1: It was up, up, up and away and then seems
Speaker 1: to sort of crash back down to Earth. I'm interested
Speaker 1: as to what you think happened to the stock market reaction. Look,
Speaker 1: I mean with within the space fictor especially, but I
Speaker 1: mean in general, there's very little correlation, frustratingly between a bench.
Speaker 1: So you know, we went to the moon, last year
Speaker 1: Vanessa and a varioustoric mission and in you know, the
Speaker 1: stock didn't really change either. So I think in this
Speaker 1: the current market, there's very very kind of little or
Speaker 1: or oblique influences on the stock price. But you know,
Speaker 1: we just continued to execute and in ultimately, you know,
Speaker 1: the market will catch up. Hey, Peter, how tight is
Speaker 1: capacity right now? Industry wide related demark to demand? If
Speaker 1: you did more launches, would you be able to fill
Speaker 1: the three hundred kilogram payload quota? Yeah? Look, I mean
Speaker 1: were the dominant force in the small dedicated launch globally
Speaker 1: right now? And um, you know, I think I think
Speaker 1: we we we fly the vast majority of everything there.
Speaker 1: We're the you know, the real capacity crunch is around
Speaker 1: about in the five twenty seven time frame, where they're
Speaker 1: about on medium size launch and that's why we're developing
Speaker 1: the Neutron launch vehicle, which of the significantly larger launch.
Speaker 1: Good to meet them, Peter on that. I've got a
Speaker 1: lot of questions on Twitter when they found out you
Speaker 1: were coming on when is Neutron going to be ready?
Speaker 1: And does it just render Electron obsolete? You know, So
Speaker 1: Neutron will be on the pad in four and Noah doesn't.
Speaker 1: Electron service are a very important small satellite dedicated market,
Speaker 1: so it certainly doesn't make an obsolute rocket lad founder
Speaker 1: and CEO Peter bag just an astonishing achievement, you know,
Speaker 1: bearing in mind how dominant spaces in this industry Carrow,
Speaker 1: and they did it their first US launch. What about
Speaker 1: this net? You were telling me all of so helicopter
Speaker 1: with nets that sometimes catch another time, but they want
Speaker 1: it to be reusable. They're going to catch the booster
Speaker 1: with a helicopter midair. They haven't quite got there yet.
Speaker 1: We'll get him back on to talk about it. Let's
Speaker 1: do that meanwhile. Of course that does it for this
Speaker 1: edition a Bloomberg Technology. But you have got to stay
Speaker 1: tuned for tomorrow Thursday. Commissioner Brendan Carr, don't forget a
Speaker 1: lot to recaps and check out our podcast wherever you
Speaker 1: get your podcast, I Heeart Radio, Spotify, Apple. It's been
Speaker 1: a busy week. Layoffs continue, earnings continue, and we will
Speaker 1: be across everything out of the technology sector. This is
Speaker 1: Bloomberg