WEBVTT - Broadcom to Buy VMware for $61 Billion 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all purtnising the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:19.640 analyst in more than one and twenty countries. You can 0:00:19.640 --> 0:00:23.239 download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.400 --> 0:00:25.160 You can also listen to our radio show at two 0:00:25.160 --> 0:00:27.840 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.880 --> 0:00:32.080 YouTube search Bloomberg Global News. But it was just this 0:00:32.120 --> 0:00:34.959 past weekend that the news broke that Broadcom was said 0:00:35.000 --> 0:00:36.640 to be and talked about vm Ware. Well, it became 0:00:36.680 --> 0:00:39.280 official this morning. Dina bas is Seattle bureau chief for 0:00:39.360 --> 0:00:42.320 Bloomberg News. Dina joins us now on the phone from Seattle. 0:00:42.360 --> 0:00:44.880 We got some more details, thanks to you and to 0:00:45.200 --> 0:00:49.240 Leanna Baker Dinah, sixty one billion dollars. It's a record 0:00:49.320 --> 0:00:52.000 tech deal. There's a ghost shop provision here. What else 0:00:52.040 --> 0:00:55.840 do does our investor audience need to know? Uh? You know, so, 0:00:56.600 --> 0:00:58.960 Broadcom was basically saying that vm Ware is going to 0:00:58.960 --> 0:01:00.640 become the new name for its off for a business, 0:01:00.720 --> 0:01:03.080 is going to become the focus of a software business 0:01:03.080 --> 0:01:05.920 that they've been building for the last couple of years. Uh. 0:01:05.959 --> 0:01:08.400 There is also a go shop provision in here, though, 0:01:08.440 --> 0:01:10.680 so vm Ware can for a limited period of time 0:01:10.760 --> 0:01:14.119 try to find other bidders. So we'll we'll see if 0:01:14.160 --> 0:01:17.640 that creates additional late, late breaking drama in this deal. Boy, 0:01:17.720 --> 0:01:19.360 it's good to be vm Ware, right, I guess at 0:01:19.360 --> 0:01:21.040 this point, I mean who else wants it? Or who 0:01:21.040 --> 0:01:24.080 should want vm ware? Dina. You know, vm Ware has 0:01:24.120 --> 0:01:26.920 partnerships with all of the major cloud companies, so and 0:01:26.959 --> 0:01:29.200 the closest one is with Amazon's cloud business, So we're 0:01:29.200 --> 0:01:32.600 talking Amazon, Microsoft, Google. The problem is that in the 0:01:32.640 --> 0:01:35.759 current regulatory environment, it's going to be difficult for any 0:01:35.800 --> 0:01:38.800 of those companies to to put together a deal potentially. 0:01:39.120 --> 0:01:41.040 Uh that that's going to be a little hard with 0:01:41.360 --> 0:01:44.560 the scrutiny that regulators are putting on on large tech. UH. 0:01:44.600 --> 0:01:48.400 Intel another chip maker. Obviously Intel CEO used to be 0:01:48.440 --> 0:01:51.680 the CEO of vm Ware. UH. Cisco is another name 0:01:51.720 --> 0:01:54.240 that's been been mentioned, But we don't know what's going 0:01:54.280 --> 0:01:57.520 to happen from here on out. All right, So we 0:01:57.560 --> 0:01:59.960 have a very smart audience, I know that. But if 0:02:00.000 --> 0:02:02.600 they're not familiar with Broadcommon, vm Ware, what is it 0:02:03.080 --> 0:02:05.480 about these companies, what do they do and what is 0:02:05.480 --> 0:02:08.680 it about them that maybe makes a good combination. Well, 0:02:09.000 --> 0:02:11.200 you have to look back at broadcomms M and a 0:02:11.320 --> 0:02:14.239 strategy over the past couple of years. They're a hardware company, 0:02:14.240 --> 0:02:17.400 a chip maker, but in order to reduce their exposure 0:02:17.440 --> 0:02:19.800 to the cyclicality of the chip industry, they've been buying 0:02:19.880 --> 0:02:23.440 up software companies. They bought a big part of Semantic, 0:02:23.600 --> 0:02:27.160 they bought ci A technologies and part of what they 0:02:27.200 --> 0:02:29.480 do UM. When they do that, it's almost a private 0:02:29.480 --> 0:02:32.120 equity like strategy. They look at these companies that are 0:02:32.120 --> 0:02:36.000 a little bit more mature, but have solid, successful product 0:02:36.000 --> 0:02:38.760 lines that they can you know, continue running and bring 0:02:38.800 --> 0:02:42.040 in money and and ring costs out of At the 0:02:42.080 --> 0:02:45.200 same time, software tends to be a more regular flow 0:02:45.240 --> 0:02:48.359 of revenue than than hardware and chips in particular, which 0:02:48.360 --> 0:02:51.079 are as I mentioned, very cyclical. So when you look 0:02:51.120 --> 0:02:53.560 at vm ware, you have a company that pioneered a 0:02:53.560 --> 0:02:58.399 type of software called virtualization software, and UM, even though 0:02:58.400 --> 0:03:00.880 that technology is being surpa asked by the sorts of 0:03:00.919 --> 0:03:03.720 things people are using more frequently in the cloud. They 0:03:03.800 --> 0:03:06.280 still have a very strong position. They're still very deeply 0:03:06.320 --> 0:03:09.440 embedded in a very large number of corporate networks and 0:03:09.440 --> 0:03:12.800 their software basically helps you reduce the number of servers 0:03:12.800 --> 0:03:14.919 that you have to use and cut costs. Well, I 0:03:14.960 --> 0:03:17.520 think about where we were yesterday Informatica in Vegas, right, 0:03:17.520 --> 0:03:19.919 and this was yes cloud, but it was also about 0:03:20.280 --> 0:03:23.160 taking data, making it intelligent, doing lots of different things 0:03:23.240 --> 0:03:25.799 with it. Like it's just this. I feel like there's 0:03:25.800 --> 0:03:27.720 a lot of crossover happening within the tech INDs right 0:03:27.760 --> 0:03:29.720 with so much data is how do you make it 0:03:29.800 --> 0:03:33.760 valuable to different customers? So Sodina, what what does Broadcom 0:03:33.880 --> 0:03:36.800 end up doing with vm where? Now? How why are 0:03:36.840 --> 0:03:41.600 these companies better off together than they would be by themselves. Well, 0:03:41.760 --> 0:03:43.840 vm Ware has been in a tough spot for the 0:03:43.920 --> 0:03:45.960 last couple of years. There's been a lot of financial 0:03:46.040 --> 0:03:48.080 engineering going on around the company. So if you if 0:03:48.080 --> 0:03:50.840 you go back historically, vm Ware was a very successful startup, 0:03:51.160 --> 0:03:54.000 was bought by e MC and probably the most valuable 0:03:54.400 --> 0:03:56.640 tech deal you know in the history in terms of 0:03:56.640 --> 0:03:58.400 what e MC paid for it and what it ended 0:03:58.480 --> 0:04:01.520 up making them in money. But then e MC gets 0:04:01.520 --> 0:04:04.240 bought by Dell. Vm ware has been you know, spun 0:04:04.280 --> 0:04:06.320 awesome doll back into you know, it's been there's been 0:04:06.320 --> 0:04:08.480 a lot of backports about where what's gone on with 0:04:08.520 --> 0:04:10.600 them and all that's going on. They've been trying to 0:04:10.600 --> 0:04:13.080 come up with a strategy to deal with this uh 0:04:13.200 --> 0:04:16.320 legacy product line that I talked about before, this virtualization software. 0:04:16.320 --> 0:04:19.600 How do they modernize, how do they regain the leadership 0:04:19.720 --> 0:04:22.320 role they once had in a market that's bypassed them, 0:04:22.320 --> 0:04:24.440 And so they've been investing in a lot of different 0:04:24.440 --> 0:04:28.960 areas and security, mobile device management, networking, but still the 0:04:29.000 --> 0:04:31.560 vast majority of the revenue is coming from this older software. 0:04:31.560 --> 0:04:34.000 So he've been struggling to figure out what the strategy 0:04:34.040 --> 0:04:36.120 is as a standalone company in terms of how they're 0:04:36.120 --> 0:04:39.440 going to continue growing. Their revenue growth has ticked down 0:04:39.480 --> 0:04:42.000 into the single digits where two years ago, three years 0:04:42.000 --> 0:04:45.160 ago was in the double digits. That's been challenging. Being 0:04:45.240 --> 0:04:49.040 owned by Broadcom freeze them from having to worry about that. Broadcom. 0:04:49.240 --> 0:04:51.479 You know, I spoke to Broadcom Software president Tom Croft 0:04:51.520 --> 0:04:53.400 this morning and he said, look, you know, yes, they're 0:04:53.440 --> 0:04:55.839 single digit revenue business. But that's the type of business 0:04:55.920 --> 0:04:59.200 we run very well. Um and so VM work gets 0:04:59.240 --> 0:05:02.040 to be you outside of the stock market scrutiny of 0:05:02.160 --> 0:05:05.520 around its growth rates, and Broadcom will will try again 0:05:05.560 --> 0:05:07.680 to squeeze costs out of it and and focus on 0:05:07.760 --> 0:05:11.000 profit of you know, this aging product line. Heyda. What's 0:05:11.040 --> 0:05:13.200 going on just more broadly in the tech industry, especially 0:05:13.240 --> 0:05:16.119 as we're seeing kind of the big tech really under fire. 0:05:16.160 --> 0:05:18.400 If you look at certainly the performance in the equity 0:05:18.440 --> 0:05:20.440 markets this year so far. But there's been a lot 0:05:20.480 --> 0:05:23.479 of tech deals, right, and some big ones this year. Sure, 0:05:23.560 --> 0:05:27.000 obviously you know there's Microsoft Activision at sixty nine billion, 0:05:27.040 --> 0:05:28.720 he said earlier. This one is the biggest tech deal. 0:05:28.760 --> 0:05:31.119 But that's only if you consider Microsoft activision of gaming 0:05:31.160 --> 0:05:34.840 or entertainment deal. I suppose what we're seeing right now 0:05:35.080 --> 0:05:38.279 is kind of a confluence of different, potentially conflicting factors. 0:05:38.320 --> 0:05:41.839 So companies valuations are going down because the market is 0:05:41.880 --> 0:05:46.040 going down, So acquiring a company becomes potentially cheaper. That said, 0:05:46.120 --> 0:05:48.599 the company doing the acquisition, if they are doing it 0:05:48.680 --> 0:05:50.880 by stock, well, their stock is going down to so 0:05:50.920 --> 0:05:53.720 you have to weigh that and We talked at the 0:05:54.040 --> 0:05:57.920 top of this conversation about the increasingly difficult regulatory environment 0:05:57.920 --> 0:06:00.520 around large deals. So you have a cup of different 0:06:00.520 --> 0:06:03.480 forces pulling on things, but valuations are going down and 0:06:03.480 --> 0:06:06.600 that that may enable some more opportunistic buying for those 0:06:06.600 --> 0:06:09.640 buyers that that can get their deals approved by regulators 0:06:09.680 --> 0:06:13.200 and have the cash or the stock to do it. 0:06:13.400 --> 0:06:15.320 Kind of fascinating just to see what's going on and 0:06:15.360 --> 0:06:17.840 what is so far, I feel like a very crazy 0:06:17.880 --> 0:06:21.320 financial market year, Dina explained, so much. Thank you so much, 0:06:21.400 --> 0:06:24.320 Tina basked, she Seattle bureau chief that Bloomberg News joining 0:06:24.400 --> 0:06:28.560 us on the phone from Seattle. So again, right, we 0:06:28.640 --> 0:06:30.760 heard about the deal just not even a week ago, 0:06:31.120 --> 0:06:32.640 and here you have it. Yeah, but you know, in 0:06:32.680 --> 0:06:34.560 just a few minutes, we're gonna talk about Stays big take, 0:06:34.880 --> 0:06:39.560 which is about you know, the troubles brewing in tech. Yeah, exactly. 0:06:39.640 --> 0:06:41.720 This will get you thinking in a big way. This 0:06:41.800 --> 0:06:46.719 is Bloomberg. You're listening to Bloomberg Business Week with Carol 0:06:46.760 --> 0:06:51.240 Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. 0:06:51.800 --> 0:06:55.720 So more Americans died of drug overdoses in then any 0:06:55.800 --> 0:06:58.000 previous year to mention these numbers, more than a hundred 0:06:58.000 --> 0:07:01.080 thousand Americans, that's up fift from the previous year. More 0:07:01.080 --> 0:07:04.920 than eighty thousand died using opioids. And just yesterday we 0:07:04.960 --> 0:07:07.600 got where that Teva will pay ten million to settle 0:07:07.960 --> 0:07:10.800 opioid related claims that just in West Virginia. And remember 0:07:10.840 --> 0:07:12.880 earlier this year, tim there was news that for the 0:07:12.960 --> 0:07:15.520 largest U S corporations have agreed to pay roughly twenty 0:07:15.720 --> 0:07:19.000 six billion to settle a tsunami of lawsuits linked to 0:07:19.040 --> 0:07:23.040 claims that their business practices help you the deadly opioid crisis. Well, 0:07:23.040 --> 0:07:25.960 we've got an expert voice with stalk all things when 0:07:26.000 --> 0:07:28.960 it comes to the opioid epidemic here in the United States, 0:07:29.040 --> 0:07:32.000 Dr Caleb Alexander, as Professor of Epidemiology at the Johns 0:07:32.000 --> 0:07:36.600 Hopkins Bloomberg School of Public Health. Dr Alexander is we 0:07:36.600 --> 0:07:38.600 should know it has been an expert for plaintiffs in 0:07:38.640 --> 0:07:43.720 opioid litigation. Dr Alexander, how are you fine? Thanks for 0:07:43.760 --> 0:07:46.560 having me, Well, you've been working on something. You've been developing, 0:07:46.600 --> 0:07:50.040 the Opioid Industry Document Archive. It's launched by Johns Hopkins 0:07:50.160 --> 0:07:53.360 University and u c SF. We should know that JOHNS. 0:07:53.360 --> 0:07:55.360 Hopkins Bloomberg School of Public Health that is supported by 0:07:55.400 --> 0:07:58.720 Michael R. Bloomberg, founder of Bloomberg LP and Bloomberg Philanthropies. 0:07:58.960 --> 0:08:04.160 What is the Opioid Industry Document Archive? The Archives is 0:08:04.200 --> 0:08:07.320 an effort to shine the bright light of day on 0:08:07.840 --> 0:08:13.680 millions of documents that have been generated through ongoing opioid litigation. 0:08:14.360 --> 0:08:19.280 It provides an opportunity for members of the public breath 0:08:19.480 --> 0:08:25.600 to have lost a loved one, researchers, historians, legal scholars, 0:08:25.640 --> 0:08:29.320 and others to be able to examine the corporate practices 0:08:29.920 --> 0:08:33.320 that has contributed to the worst drug epidemic in our 0:08:33.360 --> 0:08:36.920 country's history. You know what's what's fascinating to me, Dr 0:08:36.960 --> 0:08:39.240 Alexander and I think about this When any of the 0:08:39.320 --> 0:08:43.760 drug companies seem to um come to a settlement to 0:08:44.120 --> 0:08:47.280 settle those opioid related claims, they usually say, what we 0:08:47.320 --> 0:08:51.000 did nothing wrong. When you look at this archive and 0:08:51.080 --> 0:08:55.800 you are able to see these documents, is that not 0:08:56.040 --> 0:09:00.640 fair event to say that? Well? It him. It's an 0:09:00.679 --> 0:09:03.439 excellent question, and I should start by saying that it's 0:09:03.559 --> 0:09:08.080 unusual that out of litigation we get this opportunity to 0:09:08.200 --> 0:09:12.800 actually put these sorts of documents in the public domain 0:09:13.040 --> 0:09:17.920 all too often, unfortunately, uh these documents remain field and 0:09:17.920 --> 0:09:21.439 and the public never has an opportunity to actually see, 0:09:21.840 --> 0:09:28.520 uh see these types of internal corporate communications, emails, presentations, 0:09:28.559 --> 0:09:32.440 sales reports, budgets and the like. And you know, I 0:09:32.480 --> 0:09:35.640 don't think we would be seeing settlements of billions and 0:09:35.760 --> 0:09:38.160 billions of dollars. You just pointed out the one for 0:09:38.280 --> 0:09:42.280 twenty six billion with four of the country's largest corporations. 0:09:42.480 --> 0:09:45.079 I don't think we would be seeing settlements of that 0:09:45.320 --> 0:09:49.480 magnitude if there wasn't longdoing that had taken place, Dr Alexander. 0:09:49.520 --> 0:09:52.080 We we are getting, you know, thanks to the Opioid 0:09:52.080 --> 0:09:55.360 Industry Document Archive, to some really great work by a 0:09:55.440 --> 0:09:58.000 journalists who've dug into this over the last few years, 0:09:58.200 --> 0:10:00.400 we are getting a good understanding of what some companies 0:10:00.400 --> 0:10:03.559 have done with regards to their marketing of these pharmaceuticals. 0:10:03.760 --> 0:10:05.360 The cat, though, is out of the bag and the 0:10:05.400 --> 0:10:07.360 proof is in the pudding. As Carol mentioned, more than 0:10:07.360 --> 0:10:10.120 a hundred thousand overdose deaths here in the United States 0:10:10.160 --> 0:10:13.920 just last year. What now does the United States do? 0:10:14.040 --> 0:10:16.800 What can we do to start preventing these deaths and 0:10:16.800 --> 0:10:20.920 to get these numbers to come down. Well, there are 0:10:21.040 --> 0:10:25.360 many abatement activities that are underway in cities and counties 0:10:25.400 --> 0:10:28.480 around the country. And we know, for example, that there 0:10:28.520 --> 0:10:34.800 are highly safe, highly effective FDA approved treatments for opioid addiction, 0:10:34.960 --> 0:10:39.360 and we need to scale these up massively. But but 0:10:39.440 --> 0:10:42.560 the real focus of the Archives is really to allow 0:10:42.679 --> 0:10:46.720 for us to learn what took place within these corporations 0:10:46.800 --> 0:10:52.120 so as to prevent these sorts of activities from occurring again. 0:10:52.559 --> 0:10:57.520 And we have a president which is tobacco. The Opioid 0:10:57.640 --> 0:11:01.800 Archives sits upon a fire or kind of tobacco industry 0:11:01.880 --> 0:11:06.480 documents that's been used for decades to reveal industry strategies, 0:11:06.520 --> 0:11:10.120 to question science, hast doubt about the health harms of 0:11:10.120 --> 0:11:13.840 its products, and delayed public health regulation. And and you 0:11:13.920 --> 0:11:17.400 think the most documents there have been very important policies 0:11:17.440 --> 0:11:20.840 put in place regarding tobacco, such as state and local 0:11:20.960 --> 0:11:26.760 ordinances mandating smoke free public spaces and workplaces. Well, we 0:11:26.840 --> 0:11:29.080 certainly could talk for a long time on this, and 0:11:29.120 --> 0:11:31.480 hopefully we can talk again in the future because we've 0:11:31.520 --> 0:11:34.240 unfortunately run out of time. But interesting and important work 0:11:34.280 --> 0:11:36.200 that you guys are doing, and as you said, It's 0:11:36.200 --> 0:11:39.480 not often that we get people have access public access 0:11:39.520 --> 0:11:42.240 to all of the documents involved in in cases like this. 0:11:42.360 --> 0:11:46.720 Dr Caleb Alexander's, professor of Epidemiology at Johns Hopkins Bloomberg 0:11:46.760 --> 0:11:49.680 School of Public Health, joining us on the phone from Baltimore. 0:11:49.679 --> 0:11:52.800 Of course, the school is supported by Michael Bloomberg, founder, 0:11:52.800 --> 0:11:56.319 Bloombergalpy and Bloomberg Philanthropies, and Dr Alexander's we said served 0:11:56.320 --> 0:12:01.040 as an expert for plaintiffs and opioid litigation. This is 0:12:01.080 --> 0:12:05.040 Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes 0:12:05.120 --> 0:12:08.599 Tim Stinovic on Bloomberg Radio. Well the cover of the 0:12:08.640 --> 0:12:11.080 new issue of Bloomberg Business Week. It's also Today's Bloomberg 0:12:11.080 --> 0:12:13.640 Big Take. It's how the tech route isn't just cyclical, 0:12:13.720 --> 0:12:16.600 it is well earned and it is overdue. The story 0:12:16.640 --> 0:12:20.080 by Bradstone and Lazette Chapman. It's this week's cover story, 0:12:20.120 --> 0:12:23.520 as Carol mentioned, is available on newsstands, on the Bloomberg 0:12:23.720 --> 0:12:26.280 and at Bloomberg dot com. Slash business Week with us 0:12:26.280 --> 0:12:28.520 Now to tell us all about it is Jeff Muscus, 0:12:28.600 --> 0:12:31.440 Senior Features editor for Bloomberg Business Seek. He's with us 0:12:31.440 --> 0:12:34.559 in the Bloomberg Interactive Broker Studio along with Joel Webber, 0:12:34.640 --> 0:12:38.840 the editor of Bloomberg Business Week, who's with us as well. Joel. So, so, 0:12:39.440 --> 0:12:42.199 all good things must come to an end, and it's 0:12:42.200 --> 0:12:44.880 certainly seeming like that's happening in Silicon Valley. Yeah, we 0:12:44.960 --> 0:12:46.720 kind of called the bottom and now it's coming out, 0:12:46.800 --> 0:12:49.560 you know, to Nazac two days, it's creeping back out 0:12:49.600 --> 0:12:54.559 since we kind of put the finishing touches, said, uh, 0:12:54.640 --> 0:12:58.120 it'll regress tomorrow. I'm sure. Um, But basically, you know, 0:12:58.240 --> 0:13:01.400 we do a tech you every year, and what we 0:13:01.480 --> 0:13:04.120 really wanted to talk about here, and I think it 0:13:04.280 --> 0:13:08.760 just became impeccably unfortunate timing because every it's like the 0:13:08.800 --> 0:13:10.960 world caught up to the ideas that we had in 0:13:10.960 --> 0:13:14.839 this package is everything has started to change. The VC 0:13:15.040 --> 0:13:18.760 backed funny money, when money was free, led to a 0:13:18.800 --> 0:13:24.120 lot of uh, you know, exorbitant ideas and investments and 0:13:24.200 --> 0:13:28.439 SPACs and crypto and we're seeing an aggression to the norm. 0:13:28.520 --> 0:13:32.040 I think, or and what Jeff really set out to 0:13:32.080 --> 0:13:34.520 do and as the architect of this package and brad 0:13:34.559 --> 0:13:36.840 Stone and was that, like you mentioned, wrote the cover story, 0:13:36.880 --> 0:13:39.319 which I think is the the in the Today's big Take, 0:13:39.440 --> 0:13:41.000 which really sets the table. But there's a lot of 0:13:41.040 --> 0:13:44.640 other things in this package that helped kind of amplify 0:13:44.679 --> 0:13:48.080 this idea. So Jeff being the guiding hand that put 0:13:48.080 --> 0:13:50.640 all of these stories together, Like, what were you what 0:13:50.760 --> 0:13:54.000 were you setting out to accomplish? Sure? Well, like you said, Joel, 0:13:54.160 --> 0:13:56.480 we sort of started out from the position of okay, 0:13:56.520 --> 0:13:59.160 well you know here we are sort of um returning 0:13:59.240 --> 0:14:02.440 to very degrees of a new version of normal as 0:14:02.480 --> 0:14:04.760 people returned to their offices and that sort of thing. 0:14:05.280 --> 0:14:08.880 And so for the first time really in in two years, 0:14:08.920 --> 0:14:12.600 we're taking a sustained and marginally less COVID inflicted look 0:14:12.640 --> 0:14:15.160 at where is the tech industry now? Where are all 0:14:15.200 --> 0:14:17.760 these you know, big name companies that you know, a 0:14:17.800 --> 0:14:20.080 lot many of us haven't. I haven't been looking that 0:14:20.200 --> 0:14:24.040 squarely act for the past couple of years. And what 0:14:24.080 --> 0:14:26.360 does the tech world look like now? And where's it going? 0:14:26.960 --> 0:14:29.320 And with that in mind, you know a lot of 0:14:29.360 --> 0:14:32.320 our best writers and reporters here at Bloomberg News and 0:14:32.360 --> 0:14:34.920 on the Tech team, uh took a look at some 0:14:35.000 --> 0:14:39.359 of our our biggest, bold faced name targets from Instagram 0:14:39.400 --> 0:14:42.800 and TikTok uh, to Google and all the way down. 0:14:43.160 --> 0:14:45.280 Uh and then you know, sort of looking forward to 0:14:45.360 --> 0:14:48.240 where is the tech world going. We have a bunch 0:14:48.280 --> 0:14:52.000 of interesting looks both that things like prediction markets that 0:14:52.040 --> 0:14:56.440 are sort of on the bubble of regulation and biotech 0:14:57.280 --> 0:15:00.760 stories like this, look at h what they're called better 0:15:00.800 --> 0:15:05.120 odds babies, the science of pologenic risk scoring that might 0:15:05.160 --> 0:15:07.280 well just be the next big thing. So one of 0:15:07.280 --> 0:15:09.280 the things that I loved about the package was like, 0:15:09.320 --> 0:15:13.240 they're serious stuff. But then there's like the perfect encapitulation 0:15:13.240 --> 0:15:15.080 of everything that Jeff talking about is just remember the 0:15:15.120 --> 0:15:19.320 scooter craze. Want to start to feel a little bit 0:15:19.360 --> 0:15:23.520 like a segue now, Uh, it survived the pandemic mostly, Jeff, 0:15:23.600 --> 0:15:26.840 But why why why was it like such a perfect 0:15:27.000 --> 0:15:29.600 story to include in this context. Well, like you're saying 0:15:29.600 --> 0:15:32.600 a minute ago, Joel, that you know, right before the pandemic, 0:15:32.640 --> 0:15:36.240 the bottom started to drop out of this uh wave 0:15:36.600 --> 0:15:41.440 basically decade long cash burning as a means of not 0:15:41.520 --> 0:15:44.920 just survival, but as the main strategy for a huge 0:15:44.960 --> 0:15:49.720 part of the venture backed tech industry. And uh so 0:15:50.040 --> 0:15:53.480 the scooter craze was well suited for that moment where 0:15:53.560 --> 0:15:56.640 the whole deal was Okay, well, you know this or 0:15:56.680 --> 0:16:00.320 that mega fund is going to give you guys nine 0:16:00.360 --> 0:16:02.720 figure checks on the regular to go out and build 0:16:02.720 --> 0:16:06.320 an exploicit monopoly. Now go do it um and coming 0:16:06.320 --> 0:16:09.040 out of the pandemic for for a variety of reasons, 0:16:09.200 --> 0:16:12.320 or you know, as people start to to need things 0:16:12.360 --> 0:16:16.160 like scooters again, we come back to find these companies 0:16:16.200 --> 0:16:18.960 sort of clinging to life to varying degrees and without 0:16:19.000 --> 0:16:22.360 the easy access to capital that everybody got used to. Hey, Jeff, 0:16:22.360 --> 0:16:23.920 I feel like one of the things that I feel 0:16:23.920 --> 0:16:25.720 like with every guest, and you often hear like pets 0:16:25.760 --> 0:16:29.960 dot com, pets dot com, Like, are we likning exactly? 0:16:30.600 --> 0:16:34.560 Are we lining like this tech route that we're seeing. 0:16:34.800 --> 0:16:37.960 Is it similar to what we saw in two thousand? 0:16:38.160 --> 0:16:41.040 I mean, are those comparisons fair or is it different? 0:16:41.400 --> 0:16:45.400 I think we're still ways off the sort of industry 0:16:45.440 --> 0:16:48.040 wide carnage that we saw at the end of the 0:16:48.080 --> 0:16:50.960 dot com bubble, But Brad and Lazett are smart to 0:16:51.800 --> 0:16:53.640 draw the comparison, at least in terms of the hype 0:16:53.720 --> 0:16:57.280 machine between you know, the sort of infamous pets dot 0:16:57.360 --> 0:17:00.320 Com super Bowl ads and the Super Bowl ads we 0:17:00.320 --> 0:17:02.840 saw this year. With all those crypto celebrities. Yeah, the 0:17:02.880 --> 0:17:05.600 crypt the crypto pets comparison. My favorite was the Larry 0:17:05.640 --> 0:17:08.520 David one because I'm just a big Larry David. There's 0:17:08.560 --> 0:17:13.840 some other ones that are pretty good too. But so, 0:17:14.080 --> 0:17:16.679 you know, what does VC actually had to say about this, 0:17:16.760 --> 0:17:19.520 because that figures into Brandon was that story to bring 0:17:19.600 --> 0:17:22.960 it back to today's big take, right, like because they're 0:17:23.000 --> 0:17:27.480 undaunted really right? Yeah, for what it's worth, most of 0:17:26.800 --> 0:17:31.080 the sort of mainline VC types that you would want 0:17:31.080 --> 0:17:33.000 to talk to you and that Brandon Lizette went out 0:17:33.000 --> 0:17:35.600 to for for this kind of piece, you know, kind 0:17:35.600 --> 0:17:38.440 of said, well, the next next thing is coming, like 0:17:39.480 --> 0:17:42.480 this is going to expose the businesses that aren't ready 0:17:42.600 --> 0:17:45.000 for the next moment for what they are, and the 0:17:45.160 --> 0:17:47.760 people who have done the work to prepare for a 0:17:47.760 --> 0:17:49.720 storm like this are gonna be just fine. Well, and 0:17:49.960 --> 0:17:53.120 more new money keeps coming in, right, Like we talked 0:17:53.160 --> 0:17:55.360 about all these these these startup companies that are able 0:17:55.359 --> 0:17:58.199 to stay private for what ten years and right, and 0:17:58.240 --> 0:18:00.600 they don't have to tap the public. Just straight Carol 0:18:00.640 --> 0:18:03.680 Andrees and Horowitz announced directly four point five billion dollar 0:18:03.760 --> 0:18:09.720 fund for crypto, just for crypto, top or. I mean, 0:18:09.760 --> 0:18:11.320 it could have been a long time in the process 0:18:11.400 --> 0:18:13.639 or chasing the next big thing and and trying to 0:18:13.680 --> 0:18:16.200 figure out where it kind of goes from here. And 0:18:16.240 --> 0:18:19.000 so I think just again to bring it back to 0:18:19.000 --> 0:18:21.199 to to brad Stone and like why we wanted to 0:18:21.200 --> 0:18:23.879 do this on the cover, it was like there is 0:18:23.920 --> 0:18:26.600 a controlled burn every once in a while that hits, 0:18:26.640 --> 0:18:28.840 and like that's kind of what it feels like right now, 0:18:28.840 --> 0:18:31.440 where it's like, let's suppress some of the funny money, 0:18:31.760 --> 0:18:35.879 let's go back to basics. And while that's happening, you 0:18:35.920 --> 0:18:38.239 know what. I think We talked about this yesterday with 0:18:38.280 --> 0:18:41.199 Sarah Fryer on on this show. It's like even the 0:18:41.240 --> 0:18:43.639 Metas of the world have to look themselves in the 0:18:43.680 --> 0:18:45.959 mirror and realize that, you know, TikTok is eating their 0:18:46.040 --> 0:18:48.879 lunch and they have to basically take their business model 0:18:48.960 --> 0:18:51.920 and and basically come up with a way of fighting back, right, 0:18:51.960 --> 0:18:56.080 And like even even Meta has to deal with this stuff, 0:18:56.160 --> 0:18:59.440 right the biggest companies in the world, so text obviously 0:19:00.240 --> 0:19:02.680 ever changing. It's why it makes it so much fun 0:19:02.680 --> 0:19:07.439 to talk about. But even the Sacred Cows, you know, 0:19:07.440 --> 0:19:10.920 there comes the moment that everything is cyclical. Yeah, it's 0:19:10.920 --> 0:19:13.920 pretty remarkable. Right, it's the big tech that are having 0:19:13.960 --> 0:19:16.800 to kind of do some soul searching, that's right. Whereas 0:19:16.880 --> 0:19:18.760 you know, the last couple of times we we sort 0:19:18.760 --> 0:19:21.480 of talked about something like this, as as Brandon's point 0:19:21.480 --> 0:19:23.479 out in the piece, you know, it was something that 0:19:23.520 --> 0:19:25.640 the rest of the industry could more or less look 0:19:25.680 --> 0:19:28.240 at or call out as an outlier, a pharaonis or 0:19:28.320 --> 0:19:31.640 even though we work the damage here, as you were saying, 0:19:31.680 --> 0:19:34.000 a moment ago is too broad based to just sort 0:19:34.040 --> 0:19:38.760 of ignore as cost doing business, great timing, you know, 0:19:38.800 --> 0:19:44.280 we just we just do it every week. Remember Joe 0:19:44.359 --> 0:19:50.960 called the bottom, Remember this day, Remember pressure Joe Webber. 0:19:51.000 --> 0:19:53.520 He's the editor of Bloomberg Business Week and Jeff Muskus 0:19:53.520 --> 0:19:56.520 is senior features editor at Bloomberg Business Week, both in studio. 0:19:56.640 --> 0:20:00.320 This is the cover story now on newsstands, on and 0:20:00.440 --> 0:20:09.240 on the Bloomberg This is Bloomberg Radio. I'm a journal Yeah, 0:20:09.359 --> 0:20:11.359 but you let me drive. Oh no, no, no, no, 0:20:13.480 --> 0:20:17.320 all right, please, I'll do the right gravels. I want 0:20:17.320 --> 0:20:25.240 to drive. It's a good question. Good drive. This is 0:20:25.280 --> 0:20:31.080 the drive to the clothes. Well don on Bloomberg Radio. 0:20:31.400 --> 0:20:33.000 All right, we are just about ten a half minutes 0:20:33.080 --> 0:20:36.959 left in today's trading session. It is time to drive 0:20:37.000 --> 0:20:38.480 to the clothes and we've got a good guest who's 0:20:38.480 --> 0:20:40.879 gonna give us some specific names that he's interested in. 0:20:41.000 --> 0:20:43.720 Max Washerman is the founder and a senior portfolio manager 0:20:43.720 --> 0:20:46.240 at Miramark Capital. Max joining us this afternoon on the 0:20:46.240 --> 0:20:50.480 phone from Northbrook, Illinois. Max, how are you. I'm doing well? 0:20:50.560 --> 0:20:52.320 Thank you well. Before we get to some of the 0:20:52.560 --> 0:20:53.919 picks that you have, I just want to get your 0:20:53.960 --> 0:20:56.400 take on on the markets and what we're seeing right now. 0:20:56.880 --> 0:20:59.840 Two days in a row of gains for the Indusseas. 0:21:00.240 --> 0:21:03.000 Are we out of the woods? I don't think necessary 0:21:03.040 --> 0:21:04.680 we're out of the woods, but I think we're trying 0:21:04.720 --> 0:21:07.560 to find a bottom. And with the Federal Reserve released 0:21:07.600 --> 0:21:10.600 some notes the other day and basically didn't surprise anyone 0:21:10.880 --> 0:21:14.359 on the downside, meaning they're not giving any shockers, so 0:21:14.440 --> 0:21:16.560 that helped. And also I think with some of the 0:21:16.600 --> 0:21:19.720 retail numbers that came out Donald the General Dollar Store 0:21:19.760 --> 0:21:22.640 basically coming out and saying that the consumer is not dead. 0:21:23.400 --> 0:21:25.720 With an over sold market, I think you're getting some life. 0:21:26.000 --> 0:21:27.760