1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day, we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,520 --> 00:00:15,520 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,600 --> 00:00:18,439 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:22,000 Speaker 1: at Bloomberg dot com slash podcast. Let's break down this 7 00:00:22,079 --> 00:00:24,680 Speaker 1: Disney news. We do that with uh shann Allie Bastick. 8 00:00:24,760 --> 00:00:26,400 Speaker 1: She covers all things Wall Street. She joins us here 9 00:00:26,400 --> 00:00:29,639 Speaker 1: on a Bloomberg Interactive Broker studio, and keithan Ranganathan. She 10 00:00:29,880 --> 00:00:33,000 Speaker 1: is the senior media analyst for Bloomberg Intelligence. Keith, I 11 00:00:33,000 --> 00:00:35,479 Speaker 1: want to start with you. What do you think is 12 00:00:36,080 --> 00:00:39,600 Speaker 1: kind of job one on Bob Iger's to do list 13 00:00:40,280 --> 00:00:44,920 Speaker 1: in his return to the CEO spot. Yeah, thanks, thanks 14 00:00:44,920 --> 00:00:47,159 Speaker 1: Paul for having me. So, I think job number one 15 00:00:47,240 --> 00:00:50,959 Speaker 1: is kind of really re examining scrutinizing the streaming strategy. 16 00:00:51,000 --> 00:00:53,320 Speaker 1: Obviously they've done really, really well when it comes to 17 00:00:53,320 --> 00:00:57,280 Speaker 1: subscriber numbers, but that is not the focus anymore. It's 18 00:00:57,320 --> 00:01:01,640 Speaker 1: all about economics. It's all about stability, and we know 19 00:01:01,720 --> 00:01:04,640 Speaker 1: they've had some huge losses in the streaming department, and 20 00:01:04,680 --> 00:01:06,440 Speaker 1: it looks like they're going to lose another three billion 21 00:01:06,480 --> 00:01:09,960 Speaker 1: dollars this year. Um So, unless you know Bob Eiger 22 00:01:10,040 --> 00:01:13,240 Speaker 1: goes back to the drawing board, uh sees exactly what 23 00:01:13,319 --> 00:01:16,160 Speaker 1: needs to be trimmed, whether it's marketing expenses, whether it's 24 00:01:16,160 --> 00:01:19,200 Speaker 1: a whole real realignment of the content strategy. I think 25 00:01:19,240 --> 00:01:22,440 Speaker 1: that is the number one item on us to do list, Jinale, 26 00:01:22,440 --> 00:01:25,479 Speaker 1: What are you hearing from your contract contacts on Wall Street? 27 00:01:25,560 --> 00:01:28,160 Speaker 1: What what needs to be done? What needs to be done? Well, 28 00:01:28,280 --> 00:01:30,759 Speaker 1: they have two activist investors here that has a lot 29 00:01:30,840 --> 00:01:33,000 Speaker 1: of suggestions and what they want to do, and they 30 00:01:33,080 --> 00:01:34,920 Speaker 1: might take more of a stake. According to Wall Street 31 00:01:34,959 --> 00:01:38,320 Speaker 1: journals reporting Tryan in particular, they might want to expand 32 00:01:38,360 --> 00:01:40,800 Speaker 1: their steak as well as seek a board seat. Tryon 33 00:01:40,880 --> 00:01:42,959 Speaker 1: has how much? I heard they bought an eight hundred 34 00:01:42,959 --> 00:01:45,959 Speaker 1: million dollars worth of stock, but this is an eight 35 00:01:46,080 --> 00:01:49,320 Speaker 1: billion dollar company. So and you were asking, I just 36 00:01:49,360 --> 00:01:51,680 Speaker 1: did some quick backup a manible maths. When you look 37 00:01:51,720 --> 00:01:54,600 Speaker 1: at today's stock price, Bob I. Eiker himself has about 38 00:01:54,640 --> 00:01:57,120 Speaker 1: ninety million worth of shares, so and again that his 39 00:01:57,280 --> 00:02:00,200 Speaker 1: declined significantly this year, so and he might own more 40 00:02:00,240 --> 00:02:04,680 Speaker 1: than that decides what's publicly disclosed, So what will now 41 00:02:04,880 --> 00:02:07,080 Speaker 1: third Point also want. They also have a small steak 42 00:02:07,120 --> 00:02:09,079 Speaker 1: as well. Remember these are not steaks that are big 43 00:02:09,160 --> 00:02:13,239 Speaker 1: enough to immediately cause a lot of change, especially in Kias. 44 00:02:13,400 --> 00:02:17,359 Speaker 1: That's like ESPN that initially there was some change wanted 45 00:02:17,400 --> 00:02:19,640 Speaker 1: in terms of monetizing more of what we've already seen. 46 00:02:20,000 --> 00:02:21,880 Speaker 1: But remember, Bob Eiger, to your point on the Wall 47 00:02:21,919 --> 00:02:25,679 Speaker 1: Street perspective, this is one of the most beloved CEOs 48 00:02:25,919 --> 00:02:29,200 Speaker 1: across Wall Street. This is somebody that bankers, investors fall 49 00:02:29,280 --> 00:02:31,320 Speaker 1: over themselves for. But a guy in according to the 50 00:02:31,360 --> 00:02:35,040 Speaker 1: Wall Street Journal report, Tryan in particular, doesn't necessarily want 51 00:02:35,120 --> 00:02:38,799 Speaker 1: him there in this capacity. You know, Shenalie just brought 52 00:02:38,840 --> 00:02:41,240 Speaker 1: up the ESPN boy, there was a time and you 53 00:02:41,280 --> 00:02:43,640 Speaker 1: and I remember not so long ago when this was 54 00:02:43,800 --> 00:02:47,320 Speaker 1: the profit driver for the entire company. Now with cord 55 00:02:47,360 --> 00:02:50,200 Speaker 1: cutting not so much, what do you think Bob Iger 56 00:02:50,240 --> 00:02:52,920 Speaker 1: and the board are thinking about ESPN. I mean, this 57 00:02:52,960 --> 00:02:55,520 Speaker 1: is a real head screature, Paul Um. You know this 58 00:02:55,760 --> 00:02:58,400 Speaker 1: is Yes, it is the profit over It continues to 59 00:02:58,400 --> 00:03:00,560 Speaker 1: be a huge profit driver though let me it's still 60 00:03:00,960 --> 00:03:04,079 Speaker 1: is generating about four points three billion dollars in Ibada 61 00:03:04,200 --> 00:03:07,080 Speaker 1: every year. The problem, though, is that the revenue is 62 00:03:07,120 --> 00:03:09,639 Speaker 1: shrinking rapidly as you have more and more court cutting, 63 00:03:09,639 --> 00:03:12,280 Speaker 1: and Bob Iger himself just recently said that, you know, 64 00:03:12,360 --> 00:03:16,040 Speaker 1: courd cutting has reached unprecedented levels, and you know, there 65 00:03:16,120 --> 00:03:18,560 Speaker 1: might just be a point in time that comes very 66 00:03:18,560 --> 00:03:21,280 Speaker 1: soon when you know, the switch finally goes off. But 67 00:03:21,320 --> 00:03:22,799 Speaker 1: at the same time they have so they have the 68 00:03:22,840 --> 00:03:25,480 Speaker 1: shrinking revenue base, they have subscribers going away, but they 69 00:03:25,480 --> 00:03:29,160 Speaker 1: have sports rights. Disney by far pace the highest sports 70 00:03:29,240 --> 00:03:32,119 Speaker 1: rights in the media ecosystem at nine billion dollars every year. 71 00:03:32,400 --> 00:03:35,000 Speaker 1: They have an NBA deal that's coming up. You know, 72 00:03:35,000 --> 00:03:37,240 Speaker 1: there are all of these different sports rights that that 73 00:03:37,280 --> 00:03:40,000 Speaker 1: are coming up for renewal where we've seen like huge, 74 00:03:40,160 --> 00:03:44,440 Speaker 1: huge increases in rights fees, you know, thirty So it's 75 00:03:44,440 --> 00:03:47,000 Speaker 1: gonna be interesting to see exactly what bob Iger looks 76 00:03:47,000 --> 00:03:49,240 Speaker 1: to do. Does he make that shift finally, that that 77 00:03:49,360 --> 00:03:53,480 Speaker 1: big jump into streaming kind of pivoting away from the 78 00:03:53,520 --> 00:03:55,880 Speaker 1: TV ecosystem. But then again, it's gonna be a tough 79 00:03:55,880 --> 00:03:59,040 Speaker 1: balancing act because, as I said, you know, the suite 80 00:03:59,040 --> 00:04:01,520 Speaker 1: of networks does bring in more than four billion dollars. 81 00:04:01,520 --> 00:04:05,000 Speaker 1: But what do you mean? I mean ESPN They already 82 00:04:05,000 --> 00:04:08,040 Speaker 1: have ESPN Plus, right, but I still if I stream, 83 00:04:08,160 --> 00:04:11,680 Speaker 1: if I subscribe to ESPN Plus, which I do, I 84 00:04:11,680 --> 00:04:16,039 Speaker 1: still can't see all the games. Yeah, that's exactly what 85 00:04:16,080 --> 00:04:18,000 Speaker 1: it is. So ESPN Plus is kind of this watered 86 00:04:18,000 --> 00:04:20,680 Speaker 1: down version with like more like second tier sports content. 87 00:04:21,040 --> 00:04:23,359 Speaker 1: All of the market properties are on you know, the 88 00:04:23,400 --> 00:04:26,480 Speaker 1: main TV networks, right, whether it's uh, you know, the NFL, 89 00:04:26,560 --> 00:04:30,480 Speaker 1: the NBA, really all top tier properties. And so the 90 00:04:30,560 --> 00:04:32,599 Speaker 1: question is, you know, do they kind of kind of 91 00:04:32,600 --> 00:04:36,240 Speaker 1: finally take that step and move everything to uh, you know, 92 00:04:36,560 --> 00:04:38,720 Speaker 1: ESPN Plus and then obviously bump up the price pretty 93 00:04:38,720 --> 00:04:41,920 Speaker 1: significantly as well. Please please Dear God that there are 94 00:04:41,920 --> 00:04:44,880 Speaker 1: other things that Wall Street has wanted from this company. 95 00:04:44,960 --> 00:04:47,280 Speaker 1: You know, I'm looking at Third Points initial letter, and 96 00:04:47,320 --> 00:04:50,479 Speaker 1: they wanted the company to use free cash flow to 97 00:04:50,560 --> 00:04:54,520 Speaker 1: pay down debt more meaningfully, repurchase shares and suspend a 98 00:04:54,560 --> 00:04:57,760 Speaker 1: cash tive and and as far as streaming goes, they 99 00:04:57,760 --> 00:04:59,800 Speaker 1: really want them to work faster and harder to in 100 00:05:00,040 --> 00:05:02,880 Speaker 1: Great Hulu into the Disney Plus platform. So it's not 101 00:05:02,920 --> 00:05:06,600 Speaker 1: just ESPN streaming it's Hulu also, which has been you know, 102 00:05:06,680 --> 00:05:09,960 Speaker 1: a long prized asset that of course Comcast had that 103 00:05:10,040 --> 00:05:13,160 Speaker 1: stake in as well. And I think there there are 104 00:05:13,200 --> 00:05:15,160 Speaker 1: a lot of things here that Wall Street wants them 105 00:05:15,240 --> 00:05:17,559 Speaker 1: to do, and we did not see them happening too quickly. 106 00:05:17,600 --> 00:05:19,479 Speaker 1: That we did see some movement towards these things under 107 00:05:19,480 --> 00:05:21,839 Speaker 1: shape that I will say that if you on the 108 00:05:21,880 --> 00:05:24,880 Speaker 1: Disney screen d I S Equity go. If you type 109 00:05:24,960 --> 00:05:26,800 Speaker 1: d d I S go, you can see how much 110 00:05:26,839 --> 00:05:29,320 Speaker 1: debt they have coming to you about forty five billion 111 00:05:29,360 --> 00:05:33,640 Speaker 1: dollars over the next thirty years. So that could be 112 00:05:33,720 --> 00:05:37,600 Speaker 1: reshaped if you pull up a cop screen. See this 113 00:05:37,640 --> 00:05:39,640 Speaker 1: is what we like to do. And look at Disney 114 00:05:39,760 --> 00:05:44,080 Speaker 1: versus Netflix and Amazon. They have drastically underperformed the others. 115 00:05:44,160 --> 00:05:46,760 Speaker 1: Amazon you can tell me geth okay, they have this 116 00:05:46,839 --> 00:05:49,080 Speaker 1: big cloud business. I get it. Or you can order 117 00:05:49,160 --> 00:05:52,480 Speaker 1: stuff from them online. I've done it. Netflix, what do 118 00:05:52,600 --> 00:05:56,640 Speaker 1: they have over Disney? Do they just have better content? 119 00:05:57,680 --> 00:05:59,839 Speaker 1: I wouldn't say it's better content. I would say Disney 120 00:05:59,839 --> 00:06:02,320 Speaker 1: are combly has the best content in the media business. 121 00:06:02,320 --> 00:06:04,880 Speaker 1: But Netflix now is a pure place story right It's 122 00:06:04,960 --> 00:06:07,360 Speaker 1: and and investors like that. Wall Street likes that they 123 00:06:07,400 --> 00:06:10,599 Speaker 1: like pure play businesses where it's an uncomplicated, clean story. 124 00:06:11,080 --> 00:06:14,039 Speaker 1: With Disney, you do have a lot of exposure to 125 00:06:14,240 --> 00:06:17,120 Speaker 1: the linear TV business, and we know the linear TV 126 00:06:17,200 --> 00:06:20,799 Speaker 1: business isn't secular decline and those headwinds are only mounting. 127 00:06:21,200 --> 00:06:24,520 Speaker 1: So that's something that investors really don't like. Alright, great stuff. 128 00:06:24,600 --> 00:06:27,280 Speaker 1: As always, our go to a person for all things media, 129 00:06:27,279 --> 00:06:30,279 Speaker 1: Geith wrong Enough, and she is the senior media annals 130 00:06:30,320 --> 00:06:32,840 Speaker 1: for Bloomberg Intelligence and Shinnelli Bassa giving us the Wall 131 00:06:32,880 --> 00:06:36,400 Speaker 1: Street angle. Why because she is our Wall Street ace 132 00:06:36,560 --> 00:06:39,440 Speaker 1: here at Bloomberg News bringing it all together here around 133 00:06:39,480 --> 00:06:44,960 Speaker 1: tabling it. I'm still on Twitter, but I don't know. 134 00:06:45,120 --> 00:06:48,479 Speaker 1: I could dump it tomorrow and that I'd just find 135 00:06:48,560 --> 00:06:50,479 Speaker 1: them off Facebook. I feel like a lot of people 136 00:06:51,200 --> 00:06:53,080 Speaker 1: I thought that a lot of people would bail on 137 00:06:53,120 --> 00:06:57,839 Speaker 1: Twitter for you know, ethical reasons, because at least the 138 00:06:57,880 --> 00:07:00,960 Speaker 1: people around me that I fall or who followed me 139 00:07:01,080 --> 00:07:07,159 Speaker 1: I feel like, are pretty left leaning, um and not 140 00:07:07,480 --> 00:07:11,160 Speaker 1: libertarian in the sense that Elon Musk is, and a 141 00:07:11,200 --> 00:07:15,560 Speaker 1: lot of them seem very angry, you know, about the 142 00:07:15,560 --> 00:07:20,040 Speaker 1: takeover from Elon, but at the same time, um, they're 143 00:07:20,080 --> 00:07:23,240 Speaker 1: just addicted that's I love the meme that Elon Musk 144 00:07:23,360 --> 00:07:28,080 Speaker 1: posted today or yesterday, um with lois from Family Guy, who, 145 00:07:28,160 --> 00:07:30,440 Speaker 1: by the way, is one of my all time favorite 146 00:07:30,440 --> 00:07:34,280 Speaker 1: cartoon characters. And she's looking at this bottle of prescription 147 00:07:34,360 --> 00:07:38,800 Speaker 1: medication and clearly shaking because she wants to grab a 148 00:07:38,920 --> 00:07:41,560 Speaker 1: pill of Twitter, you know. And the idea is that's 149 00:07:41,560 --> 00:07:44,080 Speaker 1: what Donald Trump is doing, man deep saying he covers 150 00:07:44,120 --> 00:07:46,440 Speaker 1: all things tech, and that means, for better worse, he 151 00:07:46,640 --> 00:07:48,800 Speaker 1: covers Twitter and all that kind of stuff in the 152 00:07:48,840 --> 00:07:52,200 Speaker 1: social media platforms. What do you think is going on 153 00:07:52,560 --> 00:07:55,679 Speaker 1: there with Twitter? I mean, is this a viable business? 154 00:07:55,920 --> 00:07:58,600 Speaker 1: Can he support the debt? Is this he gonna get ugly? 155 00:07:58,640 --> 00:08:00,120 Speaker 1: I mean there were rumors a couple days ago that 156 00:08:00,160 --> 00:08:04,040 Speaker 1: this thing would go dark. Well so clearly with you know, 157 00:08:04,280 --> 00:08:08,080 Speaker 1: him having laid off about seventy eight percent of the staff, 158 00:08:08,120 --> 00:08:12,320 Speaker 1: and we don't know whether the infrastructure, you know, and 159 00:08:12,400 --> 00:08:15,880 Speaker 1: the back end people who really make sure that the 160 00:08:15,960 --> 00:08:18,400 Speaker 1: app and website are up and running are still there. 161 00:08:18,480 --> 00:08:22,000 Speaker 1: Like Look, when you do mass firings like this, the 162 00:08:22,080 --> 00:08:25,160 Speaker 1: real risk is you don't know who is critical to 163 00:08:25,880 --> 00:08:29,320 Speaker 1: your development velocity. And if he has figured that out, 164 00:08:29,680 --> 00:08:32,240 Speaker 1: great for him and you know things will be fine. 165 00:08:32,240 --> 00:08:34,160 Speaker 1: It seems like not very many people as the answer 166 00:08:34,200 --> 00:08:37,360 Speaker 1: that question. I mean, if you say he fired seventy 167 00:08:38,160 --> 00:08:44,240 Speaker 1: of the staff and it's working fine so for now. Yeah, 168 00:08:44,320 --> 00:08:46,720 Speaker 1: but I mean it's been days and days and days 169 00:08:46,720 --> 00:08:49,800 Speaker 1: with millions and millions of users. This is the thing 170 00:08:50,200 --> 00:08:52,560 Speaker 1: what I've learned from the smart people like men Deep 171 00:08:52,600 --> 00:08:56,640 Speaker 1: and others in tech. You have to iterate every day. 172 00:08:56,720 --> 00:08:58,200 Speaker 1: I mean, how many times you go on the LinkedIn 173 00:08:58,280 --> 00:09:00,960 Speaker 1: You're like, oh, that's new, and you have to have 174 00:09:01,040 --> 00:09:04,760 Speaker 1: that every single day. And I'm guessing, okay, maybe they 175 00:09:04,800 --> 00:09:09,960 Speaker 1: will we stay five but so you have to assume 176 00:09:09,960 --> 00:09:13,800 Speaker 1: they cut us aside. Answer that question, especially for listeners 177 00:09:13,840 --> 00:09:15,440 Speaker 1: who may be trying to connect to me on LinkedIn? 178 00:09:15,840 --> 00:09:18,080 Speaker 1: How many times do I go on LinkedIn once every 179 00:09:18,080 --> 00:09:23,800 Speaker 1: three or four months? But Twitter? Twitter once every maybe 180 00:09:23,840 --> 00:09:26,480 Speaker 1: three or four times a day? Yeah? Yeah, okay, there 181 00:09:26,480 --> 00:09:29,560 Speaker 1: you go. Well, So look, I think in terms of 182 00:09:29,600 --> 00:09:32,760 Speaker 1: the usage, no one questions that. You know, Twitter is 183 00:09:32,760 --> 00:09:36,640 Speaker 1: a unique platform, and I think the competition risk is low. 184 00:09:36,720 --> 00:09:38,840 Speaker 1: So even if you know there are all these things 185 00:09:38,920 --> 00:09:42,320 Speaker 1: going on, and he has brought back uh formal president 186 00:09:42,400 --> 00:09:44,880 Speaker 1: from and some people are happy some are not. But 187 00:09:45,240 --> 00:09:47,760 Speaker 1: at the end of the day, the platform is addictive 188 00:09:47,760 --> 00:09:51,200 Speaker 1: and there isn't an alternative. The key question is is 189 00:09:51,240 --> 00:09:54,040 Speaker 1: it a good model in terms of what he's trying 190 00:09:54,080 --> 00:09:58,439 Speaker 1: to do with subscriptions, blue checks and all the changes 191 00:09:58,559 --> 00:10:01,160 Speaker 1: that he wants to do with the company that is 192 00:10:02,559 --> 00:10:05,560 Speaker 1: smaller than it was in terms of headcount. So how 193 00:10:05,559 --> 00:10:08,400 Speaker 1: do you drive all these product changes when you get 194 00:10:08,480 --> 00:10:11,440 Speaker 1: rid of so many people. Maybe he has a pulse 195 00:10:11,520 --> 00:10:14,120 Speaker 1: on who the right talent is to, you know, make 196 00:10:14,160 --> 00:10:16,600 Speaker 1: these changes, but I don't think so. In like, if 197 00:10:16,640 --> 00:10:19,080 Speaker 1: you're cost cutting, then your focus should be cost cutting. 198 00:10:19,280 --> 00:10:22,280 Speaker 1: If you want to expertise product avelopment velocity, then that 199 00:10:22,320 --> 00:10:25,120 Speaker 1: should be a focus. You can do both simultaneously. You know. 200 00:10:25,120 --> 00:10:28,120 Speaker 1: It's funny as you say that, I'm thinking about Disney 201 00:10:28,160 --> 00:10:30,679 Speaker 1: because I was reading in the story last night and 202 00:10:31,440 --> 00:10:34,199 Speaker 1: early this morning. What they need to do is cut 203 00:10:34,240 --> 00:10:39,600 Speaker 1: costs for the streaming business and also boost subscribers for 204 00:10:39,679 --> 00:10:43,320 Speaker 1: the streaming business. So and maybe even the price right, 205 00:10:43,360 --> 00:10:46,640 Speaker 1: so they want to pay less for the product that 206 00:10:46,679 --> 00:10:52,480 Speaker 1: they're selling and charge more for it. Is that possible? Well, look, 207 00:10:52,960 --> 00:10:55,520 Speaker 1: anything is possible. I don't know if Disney's in your Wheelhouse. 208 00:10:55,559 --> 00:10:58,040 Speaker 1: We can't have woken up without you know, getting into 209 00:10:58,040 --> 00:11:00,920 Speaker 1: this story, right. Yeah, but look the end of the day, 210 00:11:01,240 --> 00:11:03,160 Speaker 1: for one thing you have to make sure is you 211 00:11:03,200 --> 00:11:06,000 Speaker 1: have the right people in charge. For the most time, 212 00:11:06,120 --> 00:11:09,280 Speaker 1: we kept hearing like Ellen isn't gonna run Twitter. Now 213 00:11:09,320 --> 00:11:11,600 Speaker 1: it looks like he's the one who's doing it. He's 214 00:11:11,640 --> 00:11:16,160 Speaker 1: not bringing anyone externally. So I think to me, there 215 00:11:16,200 --> 00:11:18,880 Speaker 1: are a lot of question marks around the vision. If 216 00:11:18,920 --> 00:11:20,760 Speaker 1: you have the vision, if you lay out the vision 217 00:11:20,920 --> 00:11:23,800 Speaker 1: and you're executing towards it, I think you get everyone 218 00:11:23,840 --> 00:11:26,600 Speaker 1: on board. In this case. I don't know if there's 219 00:11:26,640 --> 00:11:29,959 Speaker 1: a vision and every day it's something new, yes, you can, 220 00:11:30,040 --> 00:11:32,920 Speaker 1: you know, talk about stuff, but to execute on it, 221 00:11:33,360 --> 00:11:35,560 Speaker 1: you really need to, you know, have a vision. And 222 00:11:35,600 --> 00:11:37,400 Speaker 1: I think that's what's missing here. You know, I'm looking 223 00:11:37,400 --> 00:11:39,560 Speaker 1: at the Bloomberg Terminal, the f A, and the most 224 00:11:39,600 --> 00:11:45,160 Speaker 1: recent estimates for Twitter before it's taken public private a 225 00:11:45,160 --> 00:11:49,480 Speaker 1: billion dollars a billion too, and there's like thirteen billion 226 00:11:49,559 --> 00:11:52,280 Speaker 1: of debt on there, if not more. That's a lot 227 00:11:52,320 --> 00:11:57,720 Speaker 1: of leverage thirteen times. I mean, that's even before we 228 00:11:57,760 --> 00:12:00,520 Speaker 1: had some of these advertisers pulling back. That's the exactly. 229 00:12:00,600 --> 00:12:05,560 Speaker 1: So from my perspective, they're they're already down almost in 230 00:12:05,640 --> 00:12:08,760 Speaker 1: terms of the advertising revenue because a lot of advertisers 231 00:12:08,800 --> 00:12:13,280 Speaker 1: have pulled out, and the reason is brand safety, because 232 00:12:13,280 --> 00:12:15,600 Speaker 1: they have gotten rid of all the you know, people 233 00:12:15,679 --> 00:12:18,360 Speaker 1: moderating content. Brand safety is a big issue. So I 234 00:12:18,400 --> 00:12:21,199 Speaker 1: wouldn't be surprised in the near term they lose more 235 00:12:21,240 --> 00:12:24,079 Speaker 1: advertising revenue and they can offset a little bit of 236 00:12:24,160 --> 00:12:26,240 Speaker 1: it using the lower costs because they have fired sev 237 00:12:27,200 --> 00:12:29,880 Speaker 1: of the staff. But net net, you're not gonna make 238 00:12:29,920 --> 00:12:32,880 Speaker 1: a big jump in even dug growth because this is 239 00:12:32,920 --> 00:12:35,719 Speaker 1: gonna be tough. And remember those fixing up people want 240 00:12:35,760 --> 00:12:40,839 Speaker 1: their money back. It's strange. Alright, let's talk about the 241 00:12:40,880 --> 00:12:45,400 Speaker 1: streaming business, because it turns out it's easier to get subscribers. 242 00:12:45,760 --> 00:12:47,960 Speaker 1: It's a little bit harder to make money off of 243 00:12:48,000 --> 00:12:51,480 Speaker 1: those subscribers. And for the Walt Disney Company, it was 244 00:12:51,520 --> 00:12:53,959 Speaker 1: such a big deal that they made a big change 245 00:12:53,960 --> 00:12:56,480 Speaker 1: at the top, bringing back to Bob e to b 246 00:12:56,600 --> 00:12:58,320 Speaker 1: CEO for a couple of years. I'm gonna have talked 247 00:12:58,320 --> 00:13:00,480 Speaker 1: to Mark Douglas. He's smart on all this stuff. He'st 248 00:13:00,480 --> 00:13:04,240 Speaker 1: president and CEO of Mountain Mountain is an advertising software 249 00:13:04,280 --> 00:13:10,520 Speaker 1: company enabling brands to drive measurable conversions, revenue, and site business. Hey, Mark, 250 00:13:10,960 --> 00:13:13,800 Speaker 1: it turns out I guess that again, a lot of 251 00:13:13,800 --> 00:13:16,760 Speaker 1: these streaming companies are realizing it's hard to make money. 252 00:13:16,800 --> 00:13:19,760 Speaker 1: Maybe we need to think about advertising. What did you 253 00:13:19,800 --> 00:13:23,320 Speaker 1: make the news at Disney today? Well, I mean it 254 00:13:23,480 --> 00:13:26,600 Speaker 1: was I think a shock to everyone. I've talked to 255 00:13:26,960 --> 00:13:30,520 Speaker 1: folks at Disney as recently as the middle of last week, 256 00:13:30,600 --> 00:13:33,160 Speaker 1: and if they had any idea this was about to happen, 257 00:13:33,200 --> 00:13:36,000 Speaker 1: they did a very good job of hiding that. So 258 00:13:36,080 --> 00:13:39,800 Speaker 1: I think it was definitely shocking news. Um. But you know, 259 00:13:39,960 --> 00:13:44,320 Speaker 1: these are um challenging times in the television industry, mainly 260 00:13:44,360 --> 00:13:46,880 Speaker 1: because there's a lot of innovation, a lot of change. 261 00:13:46,960 --> 00:13:50,200 Speaker 1: And so if you have a track record of managing 262 00:13:50,280 --> 00:13:54,480 Speaker 1: large companies but haven't had a track record and and 263 00:13:54,480 --> 00:13:57,679 Speaker 1: I'm not saying of you know, essentially innovating while doing that, 264 00:13:57,840 --> 00:14:00,320 Speaker 1: you're that's probably gonna be a real challenge for you. 265 00:14:00,679 --> 00:14:04,080 Speaker 1: I don't know if that was the case, um with 266 00:14:04,360 --> 00:14:07,959 Speaker 1: the person Bob is replacing, but I think Bob Iger 267 00:14:08,120 --> 00:14:11,760 Speaker 1: definitely has that track record, and that's why Disney needs them. Well, 268 00:14:12,720 --> 00:14:15,400 Speaker 1: I mean, you need to, as the CEO of a 269 00:14:15,440 --> 00:14:18,840 Speaker 1: company that's worth when Bob Iger was running it, you know, 270 00:14:19,040 --> 00:14:23,760 Speaker 1: two hundred billion dollars, not only innovate and make money 271 00:14:23,800 --> 00:14:30,080 Speaker 1: on the products that you're developing, but also somehow take 272 00:14:30,120 --> 00:14:33,720 Speaker 1: care of succession. Right, you can't just leave with nobody 273 00:14:33,720 --> 00:14:36,920 Speaker 1: good in charge, or at least two people good in charge. 274 00:14:37,200 --> 00:14:40,280 Speaker 1: So the idea is that Bob Iger leaves shapec is 275 00:14:40,320 --> 00:14:42,760 Speaker 1: a successor. Shape is not good enough, and now they 276 00:14:42,800 --> 00:14:45,240 Speaker 1: have zero bench, there's no one else to choose from. 277 00:14:45,320 --> 00:14:49,080 Speaker 1: They have to call Bob Eiger back. Isn't that crazy? Well? 278 00:14:49,520 --> 00:14:52,320 Speaker 1: I may, that's one way of looking at it, But 279 00:14:52,520 --> 00:14:56,400 Speaker 1: I think also, um, look a lot of you you 280 00:14:56,440 --> 00:14:59,000 Speaker 1: have a lot of things have changed since Bob left. 281 00:14:59,040 --> 00:15:02,080 Speaker 1: You have Netflix and Ring the market, Disney them in 282 00:15:02,200 --> 00:15:06,680 Speaker 1: terms of bad supported streaming, Disney themselves announced with Disney 283 00:15:06,720 --> 00:15:08,880 Speaker 1: Plus they're going to be doing the same. You have 284 00:15:08,960 --> 00:15:13,520 Speaker 1: Apple actually a lot of rumors about Apple um about 285 00:15:13,560 --> 00:15:17,440 Speaker 1: to do the same. Um. Just the world has changed 286 00:15:17,480 --> 00:15:20,520 Speaker 1: in terms of the economic conditions, and so you know, 287 00:15:20,680 --> 00:15:24,000 Speaker 1: it's it's when you have someone who has this fifteen 288 00:15:24,080 --> 00:15:28,440 Speaker 1: year track record, knows the business. Sometimes you know, you 289 00:15:28,520 --> 00:15:31,000 Speaker 1: go back to the bench, so to say, and that's 290 00:15:31,040 --> 00:15:34,280 Speaker 1: what they did here. I get your point completely, but 291 00:15:34,360 --> 00:15:36,280 Speaker 1: I also don't think it was a it's a bad 292 00:15:36,360 --> 00:15:39,200 Speaker 1: choice to say, Look, let's let's go with let's let's 293 00:15:39,240 --> 00:15:41,960 Speaker 1: redo this, let's do this one more time, two years, 294 00:15:42,480 --> 00:15:44,720 Speaker 1: line it up for the future, and then, you know, 295 00:15:44,800 --> 00:15:46,920 Speaker 1: hopefully be in a much stronger place at the end 296 00:15:46,920 --> 00:15:49,560 Speaker 1: of that. Mark, what if you left Mountain, what have 297 00:15:49,680 --> 00:15:51,920 Speaker 1: you found something else? Maybe you want to dedicate the 298 00:15:51,960 --> 00:15:54,360 Speaker 1: rest of your life to charity, so you give it 299 00:15:54,400 --> 00:15:58,120 Speaker 1: to Ryan. Ryan Reynolds takes over. He makes it maybe 300 00:15:58,160 --> 00:16:00,040 Speaker 1: a year and a half too. He's no good. You 301 00:16:00,080 --> 00:16:01,800 Speaker 1: can't do the business. It's just a pretty face and 302 00:16:01,880 --> 00:16:05,120 Speaker 1: reads a script. Do you got a plan B for that? 303 00:16:05,280 --> 00:16:10,200 Speaker 1: Someone else gonna take over? I the least, don't pass 304 00:16:10,200 --> 00:16:14,360 Speaker 1: along that description. I don't think Ryant that's a pretty 305 00:16:14,440 --> 00:16:18,440 Speaker 1: face reading the script. But the and but I'll make 306 00:16:18,440 --> 00:16:22,880 Speaker 1: sure he knows that you said that. Okay, all right, 307 00:16:22,960 --> 00:16:25,520 Speaker 1: but you do look at the case of Salesforce. Totally 308 00:16:25,520 --> 00:16:28,880 Speaker 1: different company, it's totally different industry. The only people most 309 00:16:28,880 --> 00:16:32,440 Speaker 1: people know that um Mark Bennioff left, you know, did 310 00:16:32,480 --> 00:16:35,600 Speaker 1: that he left the company? At that he had built 311 00:16:35,680 --> 00:16:38,520 Speaker 1: and went off and did something else and wound up 312 00:16:38,720 --> 00:16:41,960 Speaker 1: and left some very capable people in charge. But he 313 00:16:42,000 --> 00:16:44,560 Speaker 1: wound up coming back. And that's what we're talking about here, 314 00:16:44,920 --> 00:16:49,080 Speaker 1: that DNA to build and to see the opportunities and 315 00:16:49,080 --> 00:16:52,119 Speaker 1: to be willing to take the risk that is very, 316 00:16:52,480 --> 00:16:55,280 Speaker 1: very hard to find. And when you have it formally 317 00:16:55,280 --> 00:16:58,120 Speaker 1: as your CEO, and now as as you know someone 318 00:16:58,160 --> 00:17:00,720 Speaker 1: that was on your board and that person is willing 319 00:17:00,800 --> 00:17:03,200 Speaker 1: to come back at a critical moment, I think it's 320 00:17:03,200 --> 00:17:04,960 Speaker 1: always going to be the right choice. And it was 321 00:17:05,000 --> 00:17:07,760 Speaker 1: the right choice for Salesforce, It's probably gonna be the 322 00:17:07,880 --> 00:17:10,160 Speaker 1: right choice for Disney, and those are not the only 323 00:17:10,200 --> 00:17:13,639 Speaker 1: two examples of that happening. Yeah. Well, Mark, I've covered 324 00:17:13,640 --> 00:17:15,840 Speaker 1: this stock for thirty years and in my take today 325 00:17:16,000 --> 00:17:17,879 Speaker 1: as I read this was this is not a victory 326 00:17:17,960 --> 00:17:20,400 Speaker 1: lap for Bob Iger. It's an admission that his succession 327 00:17:20,400 --> 00:17:23,760 Speaker 1: plan was a complete failure. He had a great he 328 00:17:23,800 --> 00:17:26,360 Speaker 1: had a great one at one point with Jay Russulo 329 00:17:26,440 --> 00:17:29,040 Speaker 1: and Tom Stagg's, but he blew that up as well. 330 00:17:29,080 --> 00:17:32,240 Speaker 1: So here we are, Um, he only has two years. 331 00:17:33,040 --> 00:17:34,919 Speaker 1: I think one of his top jobs, in addition to 332 00:17:34,960 --> 00:17:37,760 Speaker 1: fixing the streaming is to find a successor. I mean, 333 00:17:38,280 --> 00:17:40,720 Speaker 1: I wonder if they're gonna go external, internal, any thoughts 334 00:17:40,720 --> 00:17:44,719 Speaker 1: you're hearing the well, I think I think that's not 335 00:17:44,800 --> 00:17:48,199 Speaker 1: his first priority. I mean, this was announced yesterday. Today 336 00:17:48,440 --> 00:17:51,960 Speaker 1: is his literally is his first day back. I think 337 00:17:52,000 --> 00:17:56,960 Speaker 1: the first priority is vision where they want to be. Um, 338 00:17:57,000 --> 00:17:59,680 Speaker 1: there's a lot of people who left Disney and very 339 00:17:59,760 --> 00:18:03,080 Speaker 1: see in your roles who um, I wouldn't be surprised 340 00:18:03,080 --> 00:18:06,119 Speaker 1: if they came back also, um who left over the 341 00:18:06,200 --> 00:18:09,359 Speaker 1: last year or so. So I think it's first, what's 342 00:18:09,400 --> 00:18:11,640 Speaker 1: the vision. Let's make sure we have the right team 343 00:18:11,800 --> 00:18:15,320 Speaker 1: execute on that vision. And I do think that if 344 00:18:15,359 --> 00:18:19,000 Speaker 1: you're Bob, you you are looking at the situation and saying, look, 345 00:18:19,400 --> 00:18:23,080 Speaker 1: we want to make sure that twenty four months from now, UM, 346 00:18:23,160 --> 00:18:26,600 Speaker 1: when we do this again, that we have what's you know, 347 00:18:26,720 --> 00:18:29,800 Speaker 1: really the companies in the right place and the team 348 00:18:29,920 --> 00:18:32,120 Speaker 1: is in the right place and and and learn from 349 00:18:32,119 --> 00:18:34,639 Speaker 1: that and that that I think that's what's going to happen. 350 00:18:35,000 --> 00:18:38,040 Speaker 1: But you have to just keep reiterating you you can't 351 00:18:38,119 --> 00:18:42,920 Speaker 1: lead a company. Leaders have vision. Leaders have are fearless 352 00:18:43,000 --> 00:18:45,280 Speaker 1: and and you know, and they know where they want 353 00:18:45,280 --> 00:18:48,400 Speaker 1: to go. And that's that's task number one. And and 354 00:18:48,480 --> 00:18:51,159 Speaker 1: what about Mark? What about I feel like there's so 355 00:18:51,240 --> 00:18:53,159 Speaker 1: much they've left on the table in terms of the 356 00:18:53,200 --> 00:18:56,160 Speaker 1: stream business. Right, I have Disney and I have Hulu, 357 00:18:56,200 --> 00:18:58,800 Speaker 1: and I have Espn Plus, and I still can't watch 358 00:18:58,920 --> 00:19:01,200 Speaker 1: the games that I want to watch. I'm not gonna 359 00:19:01,200 --> 00:19:04,159 Speaker 1: go back to cable um. Like a lot of people, 360 00:19:04,600 --> 00:19:07,359 Speaker 1: I just want everything in one place as well? Is that? 361 00:19:07,480 --> 00:19:09,440 Speaker 1: Am I the only one who wants it that way? 362 00:19:09,480 --> 00:19:11,919 Speaker 1: Are they smart to have, you know, ten different apps 363 00:19:11,960 --> 00:19:13,560 Speaker 1: for their content or do they need to make a 364 00:19:13,640 --> 00:19:16,960 Speaker 1: change there? Well? They I mean they're they have a 365 00:19:17,040 --> 00:19:20,760 Speaker 1: really good lineup of assets here. Hulu gives them live 366 00:19:20,840 --> 00:19:24,000 Speaker 1: con excuse me, gives them live content as well as 367 00:19:24,000 --> 00:19:27,640 Speaker 1: original content. They have Disney have ABC, they have Espn, 368 00:19:28,080 --> 00:19:31,120 Speaker 1: they have the Disney Plus, have Star I mean literally 369 00:19:31,160 --> 00:19:34,720 Speaker 1: I was watching the latest Star Wars last night, So, 370 00:19:34,840 --> 00:19:37,080 Speaker 1: I mean they have an incredible bunch of content. The 371 00:19:37,080 --> 00:19:39,160 Speaker 1: other thing I don't think most people think about when 372 00:19:39,160 --> 00:19:42,320 Speaker 1: it comes to TV in general, it's under monetized. Then 373 00:19:42,400 --> 00:19:45,920 Speaker 1: more people watch television than use social It has three 374 00:19:45,960 --> 00:19:49,119 Speaker 1: times the engagement three hours a day watching TV For 375 00:19:49,160 --> 00:19:52,159 Speaker 1: the average individual, an hour day on social media, but 376 00:19:52,200 --> 00:19:55,600 Speaker 1: somehow makes less money. So this, this is a business 377 00:19:55,680 --> 00:19:59,240 Speaker 1: that is primed for, you know, to really expand the 378 00:19:59,280 --> 00:20:03,399 Speaker 1: monetization move beyond just upfronts. From monetization, really moved to 379 00:20:03,520 --> 00:20:06,840 Speaker 1: capturing more revenue with the with that triple that engagement. 380 00:20:07,280 --> 00:20:09,000 Speaker 1: And so I think you're gonna see a lot of 381 00:20:09,040 --> 00:20:12,600 Speaker 1: consolidation and content business. I think companies like Disney, you're 382 00:20:12,600 --> 00:20:14,960 Speaker 1: gonna figure out how to monetize them much more effectively. 383 00:20:15,040 --> 00:20:17,919 Speaker 1: Bob is on record talking about them in the past. 384 00:20:18,200 --> 00:20:20,640 Speaker 1: And once you monetize them more effectively, then you're gonna 385 00:20:20,640 --> 00:20:23,439 Speaker 1: look to buy more content more TV networks. So this 386 00:20:23,520 --> 00:20:25,439 Speaker 1: is gonna be an exciting two years. I think this 387 00:20:25,560 --> 00:20:28,959 Speaker 1: is kicking off a wave of a lot of changes 388 00:20:29,040 --> 00:20:32,160 Speaker 1: in the business model and consolidation in terms of TV networks. 389 00:20:32,160 --> 00:20:33,639 Speaker 1: All right, Mark, great stuff, and you want to talk 390 00:20:33,680 --> 00:20:36,879 Speaker 1: about an under monetized audience, I'll give you over the 391 00:20:36,880 --> 00:20:40,720 Speaker 1: air radio. Mark Douglas, President and CEO of Mountain joining 392 00:20:40,800 --> 00:20:45,560 Speaker 1: us onto this Disney News. I want to get right 393 00:20:45,640 --> 00:20:48,359 Speaker 1: to our next guest, Michael Nathanson, Founding partner and senior 394 00:20:48,359 --> 00:20:51,159 Speaker 1: Research Annel set MOFA at Nathanson and Folks he is 395 00:20:51,200 --> 00:20:54,560 Speaker 1: just one of the top voices on Wall Street covering 396 00:20:54,600 --> 00:20:57,440 Speaker 1: the media industry. He knows all the players. I want 397 00:20:57,440 --> 00:20:59,479 Speaker 1: to get his thoughts here on the Disney news. Mike, 398 00:20:59,480 --> 00:21:01,600 Speaker 1: thanks so much for joining us here. When you saw 399 00:21:01,600 --> 00:21:04,200 Speaker 1: the news, What do you think here? What do you 400 00:21:04,240 --> 00:21:07,640 Speaker 1: think is going on at the House of Mickey Well? First, 401 00:21:07,680 --> 00:21:10,960 Speaker 1: if it was a joke, Paul Um, I thought someone 402 00:21:10,960 --> 00:21:15,159 Speaker 1: who was playing a joke on me. Um. After realizing 403 00:21:15,240 --> 00:21:16,920 Speaker 1: it was real, I don't know if you can hear this, 404 00:21:17,080 --> 00:21:21,359 Speaker 1: lens alligned me breaking out, But if I realized it 405 00:21:21,440 --> 00:21:26,280 Speaker 1: was real, Um, it made sense to me. We have 406 00:21:26,680 --> 00:21:31,560 Speaker 1: these you know, been a doubt about streaming economics. We 407 00:21:31,840 --> 00:21:35,840 Speaker 1: thought that that Disney strategy RESI the streaming had changed 408 00:21:35,880 --> 00:21:39,280 Speaker 1: a lot. They had gone broader and moved away from 409 00:21:39,320 --> 00:21:42,679 Speaker 1: kind of their tent poles, And it made sense to 410 00:21:42,720 --> 00:21:46,040 Speaker 1: me because we had not recommended Disney. We think the 411 00:21:46,119 --> 00:21:49,000 Speaker 1: losses and streaming a way too large. We thought the 412 00:21:49,040 --> 00:21:53,000 Speaker 1: company was too optimistic about their businesses ahead. I think 413 00:21:53,040 --> 00:21:55,400 Speaker 1: Bob brings a real clear eyed view of what they 414 00:21:55,400 --> 00:21:57,520 Speaker 1: have to do to kind of fix their company. Isn't 415 00:21:57,520 --> 00:22:00,919 Speaker 1: there anyone else in the d and nine thousand employees 416 00:22:00,960 --> 00:22:04,840 Speaker 1: at Walt Disney. I mean, this guy is uh, you know, 417 00:22:04,920 --> 00:22:08,000 Speaker 1: seventy one. He's retired for a couple of years now, 418 00:22:08,200 --> 00:22:12,560 Speaker 1: and he picked his own successor. Um, don't they have, 419 00:22:12,800 --> 00:22:17,840 Speaker 1: like at two billion dollar companies plans like with a 420 00:22:17,920 --> 00:22:21,879 Speaker 1: third string guy and a fourth string guy. Yes. To 421 00:22:22,200 --> 00:22:27,600 Speaker 1: be fair, the bench that was in place when Bob 422 00:22:27,640 --> 00:22:31,840 Speaker 1: made the decision had been hurt by succession planning that 423 00:22:31,880 --> 00:22:35,960 Speaker 1: went awry. Do you remember they had picked Tom Staggs 424 00:22:36,000 --> 00:22:39,080 Speaker 1: to be the CEO and he left and they had 425 00:22:39,080 --> 00:22:41,600 Speaker 1: a bake off for that job Jay Rozzulo. So they 426 00:22:41,600 --> 00:22:44,240 Speaker 1: had a really strong bench that they were building towards 427 00:22:44,240 --> 00:22:49,040 Speaker 1: succession planning, and that bench became weaker Uh as part 428 00:22:49,040 --> 00:22:53,360 Speaker 1: of the planning. I don't think there's anyone who has 429 00:22:53,400 --> 00:22:57,400 Speaker 1: the too Bob Brings is. Bob brings the level of success. 430 00:22:57,880 --> 00:23:01,840 Speaker 1: He's able to look look things honestly and share bad news, 431 00:23:02,400 --> 00:23:04,480 Speaker 1: and I think when you're a new CEO it's really 432 00:23:04,480 --> 00:23:07,680 Speaker 1: hard to communicate bad news. He can share bad news 433 00:23:07,680 --> 00:23:11,359 Speaker 1: with us, the bad news being cord cutting is running amuck. UH. 434 00:23:11,400 --> 00:23:14,760 Speaker 1: Streaming will not be profitable. The company needs to generate 435 00:23:14,840 --> 00:23:17,679 Speaker 1: more cash flow, and I think I think you know, 436 00:23:17,760 --> 00:23:20,760 Speaker 1: it takes someone with that type of success and experience 437 00:23:20,800 --> 00:23:23,560 Speaker 1: to be able to deliver bad news and then radically 438 00:23:23,560 --> 00:23:28,040 Speaker 1: make changes. And streaming isn't profitable. Michael, What why do 439 00:23:28,080 --> 00:23:30,280 Speaker 1: we want to own this stock? Is it because they 440 00:23:30,320 --> 00:23:34,600 Speaker 1: have an awesome cruise line business? Is it because every 441 00:23:34,640 --> 00:23:37,720 Speaker 1: family in the country has to take um their kids 442 00:23:37,760 --> 00:23:41,479 Speaker 1: to the parks at least once? Um? But I mean, 443 00:23:41,520 --> 00:23:44,359 Speaker 1: what else do they have If it's ESPN, I guess 444 00:23:44,720 --> 00:23:48,120 Speaker 1: is fantastic, But you've got to have cable, and who 445 00:23:48,160 --> 00:23:52,400 Speaker 1: wants to have cable anymore? Right? So so let's let's 446 00:23:52,480 --> 00:23:55,640 Speaker 1: let's look at there's there's three pieces to the puzzle. 447 00:23:55,960 --> 00:23:59,359 Speaker 1: There's the park business, which is a great business that 448 00:24:00,240 --> 00:24:02,440 Speaker 1: um generally you know, a ton of free cash flows 449 00:24:02,520 --> 00:24:06,280 Speaker 1: managed really well. That business is exceptionally good. There's a 450 00:24:06,280 --> 00:24:09,199 Speaker 1: linear network business that we know is heading in the 451 00:24:09,240 --> 00:24:13,960 Speaker 1: wrong direction, a skyby mashed free cash flow. It has 452 00:24:14,000 --> 00:24:17,000 Speaker 1: not been managed that way as of late. That business 453 00:24:17,000 --> 00:24:19,880 Speaker 1: is not the reason why we're excited about Disney. That's 454 00:24:19,920 --> 00:24:23,200 Speaker 1: going to be managed. It's a streaming business. We don't 455 00:24:23,240 --> 00:24:28,719 Speaker 1: think playing abroad gell entertainment streaming strategy the way Netflix 456 00:24:28,800 --> 00:24:31,479 Speaker 1: doing it. Amazon Prime is doing it is good football 457 00:24:31,520 --> 00:24:35,440 Speaker 1: Disney company. Right, Walt Disney has these strong brand, strong temples, 458 00:24:35,480 --> 00:24:40,159 Speaker 1: family based content, they should basically have less subscribers that 459 00:24:40,240 --> 00:24:42,800 Speaker 1: pay a higher price. Right. So when I look at 460 00:24:42,880 --> 00:24:46,480 Speaker 1: the stock, what's embedded in the stock as of yesterday 461 00:24:46,480 --> 00:24:49,760 Speaker 1: morning or last night was you know, three and a 462 00:24:49,800 --> 00:24:53,000 Speaker 1: half billion dollars of losses in streaming. Right, it doesn't 463 00:24:53,000 --> 00:24:57,040 Speaker 1: make any sense when you don't need to spend all 464 00:24:57,040 --> 00:24:59,920 Speaker 1: that money on extremeous content when you have the temples 465 00:25:00,119 --> 00:25:02,919 Speaker 1: they have. So the path they went down about two 466 00:25:03,000 --> 00:25:08,240 Speaker 1: years ago was to challenge Netflix in terms of the 467 00:25:08,280 --> 00:25:11,880 Speaker 1: long term potential of the business to be a global, 468 00:25:12,440 --> 00:25:16,160 Speaker 1: you know, massive player and have subs as high as 469 00:25:16,160 --> 00:25:18,600 Speaker 1: the sky. They could still have a great business with 470 00:25:18,600 --> 00:25:22,479 Speaker 1: with not having the same you know focus to just 471 00:25:22,520 --> 00:25:25,240 Speaker 1: be all things all people. Right, That's the appeal is 472 00:25:25,280 --> 00:25:28,560 Speaker 1: that this price, what are you paying? Not paying very 473 00:25:28,640 --> 00:25:31,880 Speaker 1: much at all for streaming if it becomes profitable or 474 00:25:31,920 --> 00:25:35,240 Speaker 1: even break even to where it is today. Right, I 475 00:25:35,320 --> 00:25:37,800 Speaker 1: felt to the previous regime was not going to make 476 00:25:37,800 --> 00:25:39,679 Speaker 1: that happen because they were weathered to a strategy that 477 00:25:39,720 --> 00:25:42,879 Speaker 1: was blowed and just folks that that are listening to 478 00:25:42,880 --> 00:25:46,280 Speaker 1: our thirty three analysts that cover the Walt Distian Company 479 00:25:46,520 --> 00:25:50,280 Speaker 1: have buys, only five have hold ratings. Michael Nathanson was 480 00:25:50,359 --> 00:25:53,639 Speaker 1: one of those hold ratings, So we've got that right. Hey, Michael, 481 00:25:53,680 --> 00:25:56,560 Speaker 1: I think you know, if I'm the board of directors, 482 00:25:56,760 --> 00:25:58,240 Speaker 1: one of the things I say is, hey, turn around 483 00:25:58,240 --> 00:26:01,719 Speaker 1: this company fixed streaming, but also delivered to us, you know, 484 00:26:01,840 --> 00:26:04,760 Speaker 1: as soon as possible a succession plan, and try to 485 00:26:04,800 --> 00:26:07,760 Speaker 1: get it right this time. You know, bring back stags, 486 00:26:07,840 --> 00:26:10,359 Speaker 1: bring back for solo. The street will take either of those. 487 00:26:10,400 --> 00:26:13,720 Speaker 1: I think, how do you think the succession will work 488 00:26:13,800 --> 00:26:17,600 Speaker 1: in two years? Yeah? Good, good question. By the way, 489 00:26:17,600 --> 00:26:19,919 Speaker 1: we were a hold until this morning when we upgrade 490 00:26:19,960 --> 00:26:23,280 Speaker 1: this good stuff stuff. Yeah, so we were old. Yeah, 491 00:26:23,280 --> 00:26:26,040 Speaker 1: it wasn't fun being against what Disney Company. But to 492 00:26:26,080 --> 00:26:29,560 Speaker 1: your point, I think the mistake was Bob was not 493 00:26:29,600 --> 00:26:32,679 Speaker 1: a creative person. He worked in the parks his whole career. 494 00:26:32,960 --> 00:26:34,840 Speaker 1: You could say that I wasn't creative, But you know, 495 00:26:34,920 --> 00:26:38,800 Speaker 1: Iger was ahead of programing at ABC, worked at ABC Sports. 496 00:26:39,160 --> 00:26:43,800 Speaker 1: He then became very close to um the content creators 497 00:26:43,800 --> 00:26:47,240 Speaker 1: at Disney, and helped help there. So I think you 498 00:26:47,280 --> 00:26:49,080 Speaker 1: need someone from the other side of the house. You 499 00:26:49,119 --> 00:26:52,080 Speaker 1: don't need a park exact use someone from the content side. 500 00:26:52,200 --> 00:26:55,760 Speaker 1: I would spend my time that was Bob identifying two 501 00:26:55,800 --> 00:26:59,720 Speaker 1: or three people who are the content creators too, to 502 00:27:00,160 --> 00:27:02,000 Speaker 1: be my successors. You know, it can't be someone from 503 00:27:02,000 --> 00:27:06,399 Speaker 1: the park side. Alight, all right, Michael Nathans and good stuff. 504 00:27:06,400 --> 00:27:10,399 Speaker 1: Really appreciated big news, big news also um MOFA Nathans 505 00:27:10,480 --> 00:27:12,439 Speaker 1: and upgrading the stock here today from a hold to 506 00:27:12,440 --> 00:27:17,000 Speaker 1: a bye. So good stuff there. Michael Nathanson, founding Partner 507 00:27:17,000 --> 00:27:19,679 Speaker 1: and senior Research Channels at MOFAT Nathanson here and the 508 00:27:19,680 --> 00:27:22,120 Speaker 1: stock is is higher here. I think you know, investors 509 00:27:22,160 --> 00:27:25,520 Speaker 1: are are looking for Bob By at the bare minimum 510 00:27:25,520 --> 00:27:27,560 Speaker 1: to just kind of steady the ship. It maybe give 511 00:27:27,640 --> 00:27:31,400 Speaker 1: some direction and give some U confidence and it's maybe 512 00:27:31,440 --> 00:27:32,720 Speaker 1: some kind of a little bit of a turnaround. And 513 00:27:32,720 --> 00:27:34,480 Speaker 1: it's not like we should turn in the entire company, 514 00:27:34,680 --> 00:27:39,160 Speaker 1: but there's definitely some big fixes it. Let's get now 515 00:27:39,200 --> 00:27:43,560 Speaker 1: to my co host on the television show Bloomberg E 516 00:27:43,640 --> 00:27:46,359 Speaker 1: t f i Q. Katie Greifeld, joins us in the 517 00:27:46,400 --> 00:27:49,800 Speaker 1: Interactor Broker studio. We broadcast at one pm. So let's 518 00:27:49,800 --> 00:27:52,480 Speaker 1: make this quick. Uh, what are we talking about? On 519 00:27:52,480 --> 00:27:54,359 Speaker 1: the show today. On the show today, we're going to 520 00:27:54,440 --> 00:27:56,479 Speaker 1: talk about e t f s. We're gonna talk a 521 00:27:56,480 --> 00:28:00,240 Speaker 1: little bit though about the Gray Skille Bitcoin Trust. Is 522 00:28:00,280 --> 00:28:02,440 Speaker 1: not an e t F. As you know, I'm obsessed 523 00:28:02,480 --> 00:28:06,960 Speaker 1: with it. This thing. It closed Friday at at discount 524 00:28:06,960 --> 00:28:09,880 Speaker 1: to its underlying holdings. This is a ten billion dollar tracks. 525 00:28:09,920 --> 00:28:11,960 Speaker 1: Why is that by? Why is such a I know 526 00:28:12,040 --> 00:28:15,080 Speaker 1: I ask people this every couple of days, but why 527 00:28:15,160 --> 00:28:18,719 Speaker 1: is such a huge discount? Do investors just not believe 528 00:28:18,800 --> 00:28:22,000 Speaker 1: that Gray Scale has all of the bitcoin it should 529 00:28:22,280 --> 00:28:24,560 Speaker 1: or let me tell you about it. So it's been 530 00:28:24,600 --> 00:28:27,640 Speaker 1: treating at a discount for going on a year now. 531 00:28:27,720 --> 00:28:29,960 Speaker 1: So that's just because of the way this trust is 532 00:28:30,000 --> 00:28:33,000 Speaker 1: set up so long before f t X, right back 533 00:28:33,000 --> 00:28:35,600 Speaker 1: when we thought Sam bankman Fried was a super genius 534 00:28:35,600 --> 00:28:38,120 Speaker 1: who was going to fix the world. Yes, back when 535 00:28:38,120 --> 00:28:41,400 Speaker 1: we were young and different people. But it has so 536 00:28:41,440 --> 00:28:43,840 Speaker 1: this discount it's been around for a while, it's widened 537 00:28:44,160 --> 00:28:48,080 Speaker 1: dramatically in the past couple of weeks, and I mean 538 00:28:48,160 --> 00:28:51,080 Speaker 1: I've been asking around why because basically what that means 539 00:28:51,120 --> 00:28:54,400 Speaker 1: is that people are offloading shares of GPDC quicker than 540 00:28:54,440 --> 00:28:57,880 Speaker 1: they're selling bitcoin. It was just something that conversation with 541 00:28:58,000 --> 00:29:01,520 Speaker 1: James Stayford of Bloomberg Intelligence. His take is that people 542 00:29:01,600 --> 00:29:03,920 Speaker 1: just want to get away from anything that could have 543 00:29:04,000 --> 00:29:06,400 Speaker 1: any hint of contagion risk right now, even if it's 544 00:29:06,440 --> 00:29:09,680 Speaker 1: only a remote possibility. So if you think of it 545 00:29:09,720 --> 00:29:11,640 Speaker 1: from that lens, that kind of makes sense. Because you 546 00:29:11,680 --> 00:29:15,240 Speaker 1: think about gray Skills Parent, that would be buying opportunity 547 00:29:15,360 --> 00:29:17,520 Speaker 1: right assuming you don't think Bitcoin is going to drop 548 00:29:17,560 --> 00:29:21,160 Speaker 1: more than no. But what James is saying is that 549 00:29:21,200 --> 00:29:24,440 Speaker 1: if you think about gray Skills parent Digital Currency Group, 550 00:29:24,440 --> 00:29:28,160 Speaker 1: they also own Genesis. That's a Barry Silbert company. Yes, 551 00:29:28,240 --> 00:29:31,640 Speaker 1: that's the Barry Silver Empire. Uh, the Empire is a 552 00:29:31,640 --> 00:29:35,360 Speaker 1: little bit shaky right now relative to how it appeared 553 00:29:35,360 --> 00:29:37,960 Speaker 1: to be two weeks ago. So there's just a lot 554 00:29:38,000 --> 00:29:40,959 Speaker 1: of fear in this industry right now. There's been cascading 555 00:29:41,080 --> 00:29:43,560 Speaker 1: blow ups. No one knows where to look next. And 556 00:29:43,600 --> 00:29:46,640 Speaker 1: even though by you know everything that we know Gray 557 00:29:46,680 --> 00:29:49,680 Speaker 1: Skill is absolutely fine, there's just a lot of fear 558 00:29:50,920 --> 00:29:54,760 Speaker 1: in the marketplace generally defined. Do people feel like this 559 00:29:55,960 --> 00:30:00,440 Speaker 1: is a defining moment for crypto bump in the road 560 00:30:00,760 --> 00:30:03,280 Speaker 1: part of just the growing process for new classet class 561 00:30:03,320 --> 00:30:06,680 Speaker 1: Where are we takes, it feels a little panicky. It's 562 00:30:06,760 --> 00:30:11,000 Speaker 1: absolutely a life altering event. It's absolutely an existential moment. 563 00:30:11,080 --> 00:30:13,760 Speaker 1: But if you look past I don't know, the past 564 00:30:13,800 --> 00:30:18,720 Speaker 1: couple of years, really all of Bitcoin's existence, trawl downs 565 00:30:18,760 --> 00:30:21,280 Speaker 1: are not unusual. If you think back to pass blow 566 00:30:21,360 --> 00:30:25,040 Speaker 1: ups Mount Gox, for example, that was the exchange a 567 00:30:25,080 --> 00:30:28,360 Speaker 1: couple of years ago. That exchange blew up spectacularly. It 568 00:30:28,480 --> 00:30:31,320 Speaker 1: was hacked. It was a huge scandal. And still and 569 00:30:31,440 --> 00:30:34,080 Speaker 1: what did Mount Cox stand for? I was hoping you 570 00:30:34,080 --> 00:30:37,000 Speaker 1: would tell me. So. Mount Cox was the first really 571 00:30:37,120 --> 00:30:44,080 Speaker 1: big and popular crypto exchange. It was founded as an 572 00:30:44,080 --> 00:30:47,640 Speaker 1: exchange for playing cards in the Dungeons and Dragons type 573 00:30:47,640 --> 00:30:52,000 Speaker 1: of game. It was called Magic the Gathering online exchange 574 00:30:52,880 --> 00:30:58,320 Speaker 1: Mount I never played Magic the Gathering neither did I really. 575 00:30:58,920 --> 00:31:01,360 Speaker 1: I have two brothers who Dungeons and Dragons. Guy, I 576 00:31:01,360 --> 00:31:03,760 Speaker 1: bet I was, you know what. I was mildly into 577 00:31:03,800 --> 00:31:06,200 Speaker 1: it in like third or fourth grade, before I had 578 00:31:06,280 --> 00:31:09,920 Speaker 1: any inkling as to how it worked, just because I 579 00:31:10,000 --> 00:31:12,760 Speaker 1: also loved Deaf Leopard Pyromania at the time. It was 580 00:31:12,800 --> 00:31:17,240 Speaker 1: my favorite record. So, you know, people change, I thought 581 00:31:17,280 --> 00:31:20,160 Speaker 1: you were like a motorcycle guy, which seems unintuitive to 582 00:31:20,200 --> 00:31:22,680 Speaker 1: also say that you were into I'm telling you this 583 00:31:22,760 --> 00:31:26,400 Speaker 1: is a long time ago, ka, before I developed, you know, 584 00:31:28,120 --> 00:31:33,080 Speaker 1: before I turned into a man in any in any case, 585 00:31:33,280 --> 00:31:36,160 Speaker 1: um you know. So so Mount Cox was the first 586 00:31:36,200 --> 00:31:40,960 Speaker 1: one to fantastically um implode, and we've since had a 587 00:31:41,040 --> 00:31:43,200 Speaker 1: number of events a lot this year. It seems like 588 00:31:43,200 --> 00:31:45,400 Speaker 1: more than ever this year, but maybe that's because of 589 00:31:45,440 --> 00:31:49,360 Speaker 1: the size. One of the open questions is what happened 590 00:31:49,360 --> 00:31:52,920 Speaker 1: to this like half a billion dollars worth of coins 591 00:31:52,960 --> 00:31:55,680 Speaker 1: on the ft X exchange. I think the debate right 592 00:31:55,720 --> 00:31:58,240 Speaker 1: now is was there a hack? SPF said in his 593 00:31:58,480 --> 00:32:01,920 Speaker 1: famous you know, off the record conversation with his friend 594 00:32:01,960 --> 00:32:04,520 Speaker 1: as a reporter for Vox Beautiful, it was a hack, 595 00:32:04,880 --> 00:32:09,360 Speaker 1: but maybe it was the Bahamian authorities, um, you know, 596 00:32:09,960 --> 00:32:13,200 Speaker 1: asking him to get it so that the US authorities couldn't. 597 00:32:13,200 --> 00:32:14,800 Speaker 1: It's like, I think, one of the most fun and 598 00:32:14,840 --> 00:32:18,760 Speaker 1: mysterious issues of the whole Oh. Absolutely, I mean, this 599 00:32:18,840 --> 00:32:21,760 Speaker 1: is an existential moment, but as a journalist, it's just 600 00:32:21,800 --> 00:32:24,960 Speaker 1: an embarrassment of riches. There's so many different threads to 601 00:32:25,000 --> 00:32:28,760 Speaker 1: pull on here, uh, and I mean just the players involved. 602 00:32:29,200 --> 00:32:33,920 Speaker 1: We talked about Elizabeth Holmes just got eleven years in prison. Yes, right, 603 00:32:33,960 --> 00:32:36,840 Speaker 1: wasn't that on Friday? I think, and I wonder what 604 00:32:36,880 --> 00:32:40,960 Speaker 1: kind of prison did she um dupe more people? Was 605 00:32:41,000 --> 00:32:44,200 Speaker 1: she the source of more financial ruin than Sam Bankman Freed? 606 00:32:44,280 --> 00:32:46,640 Speaker 1: I was actually hoping you would speculate on that, and 607 00:32:46,720 --> 00:32:49,360 Speaker 1: I don't speculate. The question is where do you rank 608 00:32:49,520 --> 00:32:52,720 Speaker 1: these people in terms of how much damage they've done? 609 00:32:52,800 --> 00:32:55,320 Speaker 1: F t x more than a million creditors. That's just 610 00:32:55,400 --> 00:32:57,320 Speaker 1: a staggering number. I mean, I'm sure of them only 611 00:32:57,360 --> 00:33:00,720 Speaker 1: had a hundred dollars or so on fts. The top 612 00:33:00,760 --> 00:33:04,280 Speaker 1: fifty had at least twenty one million apiece. The top 613 00:33:04,320 --> 00:33:07,880 Speaker 1: two had more than two million each. And it's like 614 00:33:08,240 --> 00:33:12,320 Speaker 1: Bernie made Off, Elizabeth Homes same, Bankman Freed. Are always 615 00:33:12,360 --> 00:33:15,320 Speaker 1: people playing in the same league. I don't know under investigation, well, 616 00:33:15,320 --> 00:33:16,840 Speaker 1: if there is even I don't even know if there's 617 00:33:16,840 --> 00:33:18,840 Speaker 1: fraud here, right, I mean do we know yet? I 618 00:33:18,880 --> 00:33:20,560 Speaker 1: don't know. I don't know. I don't know, And I 619 00:33:20,560 --> 00:33:22,959 Speaker 1: would not make that kind of accusation, no idea. All right, 620 00:33:23,120 --> 00:33:27,280 Speaker 1: Katie Gray felt, uh, we have some crypto stuff, so 621 00:33:27,280 --> 00:33:32,240 Speaker 1: that was good. We appreciate that. West Kosova, he is 622 00:33:32,280 --> 00:33:35,240 Speaker 1: the host of Bloomberg Big Take podcast West, What do 623 00:33:35,320 --> 00:33:39,560 Speaker 1: you have for us here? Thanks for having me on again. Yes, 624 00:33:39,760 --> 00:33:43,360 Speaker 1: this morning, we have a really interesting show that's based 625 00:33:43,440 --> 00:33:47,200 Speaker 1: on a story that Sheridan Prasso wrote about Shean, which 626 00:33:47,280 --> 00:33:51,240 Speaker 1: is the world's largest online retailer of clothes as the 627 00:33:51,320 --> 00:33:55,040 Speaker 1: Chinese company, they sell a ton of fast fashion. These 628 00:33:55,080 --> 00:33:57,719 Speaker 1: are clothes that are really cheap. They're kind of on trend, 629 00:33:57,760 --> 00:33:59,640 Speaker 1: you buying without having to think too much because it 630 00:33:59,720 --> 00:34:02,120 Speaker 1: costs so little, you wear them for a while, and 631 00:34:02,160 --> 00:34:05,880 Speaker 1: really they're kind of meant to be disposable, which is 632 00:34:06,000 --> 00:34:08,040 Speaker 1: why they keep people coming back for more and more. 633 00:34:08,160 --> 00:34:11,759 Speaker 1: But it then causes all kinds of problems. Yeah, I 634 00:34:11,760 --> 00:34:17,759 Speaker 1: mean fast fashion. It's a notoriously awful product. I mean 635 00:34:18,000 --> 00:34:22,920 Speaker 1: for the environment, it's bad for humanity, it's bad. Movies 636 00:34:22,960 --> 00:34:28,000 Speaker 1: have been made about the disastrous impact, and consumers continue 637 00:34:28,040 --> 00:34:32,520 Speaker 1: to go back for more. Yeah, and it's because you know, 638 00:34:32,640 --> 00:34:36,080 Speaker 1: you can just buy and buy these things, and especially um, 639 00:34:36,120 --> 00:34:38,080 Speaker 1: you know, younger people who kind of want to be 640 00:34:38,120 --> 00:34:40,160 Speaker 1: trendy and don't have a lot of money to spend. 641 00:34:40,160 --> 00:34:42,479 Speaker 1: It becomes kind of like a fun thing to do 642 00:34:42,719 --> 00:34:46,280 Speaker 1: and don't care apparently about the people who are employed 643 00:34:46,280 --> 00:34:49,600 Speaker 1: in making this clothing, right, yes, and that of course 644 00:34:49,719 --> 00:34:52,880 Speaker 1: is the subject of the story and our podcast. So 645 00:34:53,000 --> 00:34:57,600 Speaker 1: she In Uh makes uh a lot of his clothes 646 00:34:57,880 --> 00:35:00,919 Speaker 1: from cotton that comes from the ship Jan region, which 647 00:35:00,960 --> 00:35:03,880 Speaker 1: is this northwestern region of China that we've heard a 648 00:35:03,880 --> 00:35:06,319 Speaker 1: lot about in the news because the US and other 649 00:35:06,320 --> 00:35:10,360 Speaker 1: countries have accused the Chinese government of imposing this campaign 650 00:35:10,400 --> 00:35:13,680 Speaker 1: of forced labor on the weaker Muslim people there, putting 651 00:35:13,680 --> 00:35:17,560 Speaker 1: the internment camps and as part of that, forcing them 652 00:35:17,560 --> 00:35:22,960 Speaker 1: to work in different industries, including harvesting of cotton. And 653 00:35:23,040 --> 00:35:26,000 Speaker 1: so what this story is all about is that Sheridan Prasso, 654 00:35:26,080 --> 00:35:29,479 Speaker 1: the reporter, went to try to find out where does 655 00:35:29,560 --> 00:35:32,640 Speaker 1: the cotton in clothing from Sheen come from? And she 656 00:35:32,960 --> 00:35:37,359 Speaker 1: who she went and she actually tested garments that came 657 00:35:37,400 --> 00:35:39,759 Speaker 1: from there and found out that yes, indeed, it does 658 00:35:39,880 --> 00:35:43,200 Speaker 1: come from that region. And what are what are some 659 00:35:43,239 --> 00:35:48,000 Speaker 1: of the western retailers that that that may be involved 660 00:35:48,000 --> 00:35:50,319 Speaker 1: in the process, what what do they say? What's kind 661 00:35:50,320 --> 00:35:54,120 Speaker 1: of the feedback you're getting from the industry. Well, what's 662 00:35:54,160 --> 00:35:58,400 Speaker 1: interesting about this is sherry reports is that because she 663 00:35:58,640 --> 00:36:03,000 Speaker 1: In is entirely online, they don't have really any retail operations. 664 00:36:03,000 --> 00:36:05,040 Speaker 1: You know, you go into h and M, you go 665 00:36:05,080 --> 00:36:08,480 Speaker 1: into Zara Gap. You know, all these clothing retailers and 666 00:36:08,680 --> 00:36:10,959 Speaker 1: if you look at the labels on those clothes, allow 667 00:36:11,000 --> 00:36:13,600 Speaker 1: of them come from Thailand. Now they come from Malaysia, 668 00:36:13,600 --> 00:36:16,160 Speaker 1: they come from Vietnam. About their places, uh, in in 669 00:36:16,400 --> 00:36:21,200 Speaker 1: part because uh, you know, manufacturing is easier, even cheaper 670 00:36:21,200 --> 00:36:23,920 Speaker 1: than it is in China, but also because they can 671 00:36:24,120 --> 00:36:29,000 Speaker 1: avoid the problems of sourcing cotton that then becomes problematic 672 00:36:29,040 --> 00:36:33,120 Speaker 1: because of the Xinjiang region and everything that's involved in 673 00:36:33,160 --> 00:36:36,920 Speaker 1: the politics of not sourcing materials from there. Isn't it 674 00:36:37,040 --> 00:36:43,160 Speaker 1: dangerous to even be reporting in that part of the world. Um, well, 675 00:36:43,960 --> 00:36:47,680 Speaker 1: I don't know that there's a danger. Person in this story. 676 00:36:47,840 --> 00:36:51,600 Speaker 1: She had bought garments that came from she and she 677 00:36:51,719 --> 00:36:54,960 Speaker 1: sent them out to a lab to have them tested. Uh. 678 00:36:55,000 --> 00:36:58,399 Speaker 1: And then they use this very interesting process which should 679 00:36:58,400 --> 00:37:01,000 Speaker 1: be listening to the podcast you can here Erry explained 680 00:37:01,000 --> 00:37:02,800 Speaker 1: she is I wanted the guests on the show today. 681 00:37:03,239 --> 00:37:06,960 Speaker 1: Um where they tested and they are able to determine 682 00:37:07,440 --> 00:37:12,480 Speaker 1: not only did this cotton come from Shinjang Um, but 683 00:37:12,640 --> 00:37:15,759 Speaker 1: exactly where like they know because of the way they 684 00:37:15,760 --> 00:37:18,520 Speaker 1: tested that it didn't just come from China and didn't 685 00:37:18,600 --> 00:37:21,719 Speaker 1: just come from particular region. It came exactly from there. 686 00:37:21,760 --> 00:37:25,279 Speaker 1: That's how sophisticated the testing is. Now. Well, you know, 687 00:37:25,360 --> 00:37:27,839 Speaker 1: before this story was I didn't even I wasn't even 688 00:37:27,880 --> 00:37:29,600 Speaker 1: aware of this company, never heard of it before. But 689 00:37:29,680 --> 00:37:32,239 Speaker 1: it's a big company. Uh. You got some reporting in 690 00:37:32,239 --> 00:37:36,440 Speaker 1: their backed by investors including Sequoia Capital and I d 691 00:37:36,640 --> 00:37:39,680 Speaker 1: G Capital. She And conducted a funding round this year 692 00:37:39,680 --> 00:37:43,040 Speaker 1: that put its value at one hundred billion dollars. So 693 00:37:43,120 --> 00:37:44,800 Speaker 1: this is a big company. Do we have any response 694 00:37:44,960 --> 00:37:48,640 Speaker 1: from the company. Uh, yeah, you're right, it is huge. 695 00:37:48,680 --> 00:37:50,839 Speaker 1: And it's funny because I hadn't really heard about it either. 696 00:37:50,920 --> 00:37:52,839 Speaker 1: But you know I talked to my daughters, they sure 697 00:37:52,960 --> 00:37:55,440 Speaker 1: heard about it. And you talked to you know, young people, 698 00:37:55,520 --> 00:37:58,080 Speaker 1: they know all about this company. And so just go 699 00:37:58,160 --> 00:38:00,400 Speaker 1: to show you like you go on TikTok, and there 700 00:38:00,400 --> 00:38:04,040 Speaker 1: are people who who like put out on TikTok all 701 00:38:04,120 --> 00:38:06,600 Speaker 1: their she in halls where they show all the clothes 702 00:38:06,600 --> 00:38:09,319 Speaker 1: that they got um, and so this has become kind 703 00:38:09,360 --> 00:38:15,480 Speaker 1: of like a thing. Um. The company says that they 704 00:38:15,520 --> 00:38:20,279 Speaker 1: may have agreements with supply suppliers and the suppliers tell 705 00:38:20,400 --> 00:38:24,680 Speaker 1: them that the clothing is all uh, you know, made humanly, 706 00:38:24,920 --> 00:38:27,960 Speaker 1: and that's the sourcing of the material is smiling, that is, 707 00:38:28,080 --> 00:38:31,279 Speaker 1: share your rights. There's an interesting sort of buying that 708 00:38:31,400 --> 00:38:37,000 Speaker 1: she and finds itself in because they're Chinese company. If 709 00:38:37,000 --> 00:38:41,080 Speaker 1: they deny that the clothing came or the cotton came 710 00:38:41,239 --> 00:38:44,279 Speaker 1: from Shenjang, then they could get themselves in trouble with 711 00:38:44,400 --> 00:38:47,680 Speaker 1: China because China claims that there's absolutely nothing wrong with 712 00:38:47,719 --> 00:38:50,160 Speaker 1: sourcing it and they say that there is no forced 713 00:38:50,239 --> 00:38:54,200 Speaker 1: labor UH. And then of course if they say that 714 00:38:55,120 --> 00:38:57,080 Speaker 1: it does come from there, then they get in trouble 715 00:38:57,400 --> 00:38:59,640 Speaker 1: with Western government. So they're kind of in between. But 716 00:38:59,680 --> 00:39:03,800 Speaker 1: they're responses. There is no forced labor used in Jinjang, 717 00:39:03,880 --> 00:39:07,280 Speaker 1: that is the Chinese government's UH position, and their suppliers 718 00:39:07,280 --> 00:39:11,319 Speaker 1: certified that the clothing is made UH correctly. So But 719 00:39:11,800 --> 00:39:16,480 Speaker 1: I mean um Chinjang is Chinese. She and his Chinese 720 00:39:16,480 --> 00:39:19,759 Speaker 1: TikTok is Chinese. I'm guessing your kids aren't. But are 721 00:39:19,800 --> 00:39:26,920 Speaker 1: the customers for She and mostly Chinese UM consumers Uh. 722 00:39:27,280 --> 00:39:30,440 Speaker 1: She sells close all over the world, in Europe, in 723 00:39:30,480 --> 00:39:34,120 Speaker 1: the United States, everywhere, UH, And so they are truly 724 00:39:34,160 --> 00:39:37,200 Speaker 1: a global retailer, so many many of the customers, I mean, 725 00:39:37,239 --> 00:39:39,960 Speaker 1: Ali Baba is a global retailer too, but most of 726 00:39:40,000 --> 00:39:43,719 Speaker 1: their pyres are in Asia. Right, It's not like you 727 00:39:43,800 --> 00:39:46,600 Speaker 1: and I are gonna say, hey, I need a vacuum 728 00:39:46,600 --> 00:39:48,400 Speaker 1: cleaner and go online and get it at Ali Baba. 729 00:39:48,440 --> 00:39:52,319 Speaker 1: It's just not as likely as someone in Asia buying it. 730 00:39:53,239 --> 00:39:56,360 Speaker 1: That's right. Although, um, for this clothing, because it's cheap 731 00:39:56,800 --> 00:39:59,000 Speaker 1: and it's easy to ship, you know, it just comes 732 00:39:59,040 --> 00:40:01,880 Speaker 1: in a little envelope like anything else. Uh, then it 733 00:40:02,120 --> 00:40:05,560 Speaker 1: shipped all over the world. And because the uh, these 734 00:40:05,560 --> 00:40:08,800 Speaker 1: things don't meet the threshold for value that the U 735 00:40:08,960 --> 00:40:11,480 Speaker 1: S Customs Enforcement Agency would like take a look at 736 00:40:11,520 --> 00:40:14,319 Speaker 1: these things. They just come to the mail and you know, 737 00:40:14,320 --> 00:40:17,279 Speaker 1: we're talking millions and millions of packages. So there's no 738 00:40:17,360 --> 00:40:20,480 Speaker 1: way that the US can track every envelope that comes in. 739 00:40:20,640 --> 00:40:23,000 Speaker 1: All right, was great stuff as always, West Coast of 740 00:40:23,040 --> 00:40:25,960 Speaker 1: a host of Bloomberg's Big Take podcast. You can listen 741 00:40:25,960 --> 00:40:28,280 Speaker 1: to The Big Take podcast on I Heart Radio, app, 742 00:40:28,320 --> 00:40:31,640 Speaker 1: Apple and anywhere else you get your podcast and listen 743 00:40:31,640 --> 00:40:34,200 Speaker 1: to The Big Take every night out of eleven pm 744 00:40:34,200 --> 00:40:39,160 Speaker 1: Wall Street Time on Bloomberg Radio. Thanks for listening to 745 00:40:39,200 --> 00:40:42,719 Speaker 1: the Bloomberg Markets podcast. You can subscribe and listen to 746 00:40:42,760 --> 00:40:46,920 Speaker 1: interviews of Apple Podcasts or whatever podcast platform you prefer. 747 00:40:47,320 --> 00:40:51,279 Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller three. 748 00:40:51,640 --> 00:40:54,200 Speaker 1: Pet On false Sweeney I'm on Twitter at pt Sweeney. 749 00:40:54,239 --> 00:40:56,920 Speaker 1: Before the podcast, you can always catch us worldwide at 750 00:40:56,920 --> 00:40:57,960 Speaker 1: Bloomberg Radio