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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along

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Speaker 1: with my co host of Bonnie Quinn. Every business day

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Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,

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Speaker 1: along with essential market moving news. Find the Bloomberg Markets

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Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts,

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Speaker 1: and on Bloomberg dot com. I want to point out

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Speaker 1: that stocks are higher, they are spiking just a little

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Speaker 1: bit because we have word that President Trump has approved

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Speaker 1: a revised stimulus package. This is coming from Larry Cuddler,

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Speaker 1: who's speaking on Fox Business right now again. President Trump

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Speaker 1: has approved a revised stimulus package. He spoke with Mark Meadows,

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Speaker 1: the chief of staff on the Treasury Secretary, Steve Manuchien.

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Speaker 1: Of course, we all know that he is just one

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Speaker 1: of the people involved in all of this. Right, the

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Speaker 1: Democrats also have to sign on to anything, and obviously

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Speaker 1: the Republicans have to sign on, although presumably they would.

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Speaker 1: We don't know what's in this revised Tomla's package. We'll

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Speaker 1: see how much comes out, but it does signal a

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Speaker 1: willingness for President tomp to do a U turn on

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Speaker 1: that idea that he was completely shutting down all stimulus

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Speaker 1: package conversations A look a bit more of that in

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Speaker 1: a moment, But while we are wait more details, let's

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Speaker 1: bring in Eric maltunas senior et F analyst for Bloomberg Intelligence. Eric,

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Speaker 1: obviously this is changing the narrative for the day, but

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Speaker 1: do talk to us about everything that's happened this week

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Speaker 1: in terms of Morgan Stanley buying Eating Vance and also

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Speaker 1: you know, Vanguard returning assets to China's state funds. There's

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Speaker 1: a lot going on in the t F space. Yeah. No,

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Speaker 1: this is giant asset managers doing big things, starting with

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Speaker 1: the Morgan Stanley. Um. This was a little bit of

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Speaker 1: a shock apparently Eating Vance went to Morgan Stanley, which

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Speaker 1: I don't blame them. If I'm running legacy mutual fund

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Speaker 1: shop and I don't really have a strong et s

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Speaker 1: game or passive game, I would look to go to

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Speaker 1: merge with people get really big. That way, you have

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Speaker 1: scale and you can lower fees and maybe compete more

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Speaker 1: aggressively get some extra distributions. So it makes sense that bistically,

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Speaker 1: I do think that what Morgan Stanley was after with

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Speaker 1: eat Advance was direct indexing, which is sort of like

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Speaker 1: separately managed accounts that are for advisors. We think that

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Speaker 1: demand is overstated. If you look, direct indexing maybe took

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Speaker 1: in three four or five billion this year. ETS have

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Speaker 1: taken in about three and fifty. So you know, it's

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Speaker 1: going to be tough for Morgan Stanley to compete against

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Speaker 1: ets and traditional index funds with these ventures. But for now,

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Speaker 1: it's I think a smart move by them because the

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Speaker 1: bigger you get than it's easier to lower the fees,

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Speaker 1: and that is really the name of the game. And

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Speaker 1: where a lot of the flows are going is funds

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Speaker 1: that are on the cheaper side. So that's the Morgan

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Speaker 1: Stanley situation. So pretty good, but I think they'll struggle

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Speaker 1: long term. But without that E t F solution. So

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Speaker 1: you know, what is E t F solution for a

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Speaker 1: big shop like a Morgan Stanley, d A BYDA build.

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Speaker 1: How do you really increase your share there? Here's what

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Speaker 1: everybody's doing. They're basically buying the end customer. And so

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Speaker 1: if you Morgan Stam has a bunch of advisors, if

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Speaker 1: you have access in distribution we call captive audience, then

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Speaker 1: you can pretty much give you have some control over

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Speaker 1: what you give them. The question is even that captive audience.

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Speaker 1: I just don't I don't know if they're going to

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Speaker 1: want a Calvert mutual fund. A Calvert e s G

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Speaker 1: mutual fund charges you know, let's say seventy to eight

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Speaker 1: basis points. You can get a Vanguard e s G

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Speaker 1: E T S or black Rock one for ten to fifteen.

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Speaker 1: And so the e t S is just so much cheaper.

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Speaker 1: It's liquid there, it's tax efficient. So it's difficult even

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Speaker 1: with the captive audience to do that. But a lot

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Speaker 1: of the issuers, Goldman, Vanguard, Swab, what they're doing is

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Speaker 1: they have e t s and they can use their

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Speaker 1: captive audience get some assets and flows, and then that

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Speaker 1: brings people outside of the captive audience to those e

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Speaker 1: t s. So that's the new name of the game

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Speaker 1: is it's have some investors lined up, launch y e

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Speaker 1: t f s, get assets in there, and try to

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Speaker 1: attract retail investors outside of that. Morgan Stanley appears to

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Speaker 1: be doing something like that. They're just gonna try to

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Speaker 1: use direct indexing and mutual funds to do it, and

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Speaker 1: I just think it will be harder without the e

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Speaker 1: t F. Yeah, it's so interesting how the landscape has

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Speaker 1: changing I mean, I guess it always needs to change.

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Speaker 1: We have a great story on the Bloomberg today. But

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Speaker 1: wealthy American families being told by their advisors they need

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Speaker 1: to act now or risk losing millions of dollars in

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Speaker 1: case Democrats win back the White House and Senate and

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Speaker 1: all of the loopholes that President Trump ushered in in

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Speaker 1: terms of state tax rules get reversed. How much does

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Speaker 1: this impact the E T F space? Eric, I mean,

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Speaker 1: are these people that sort of buy E T F?

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Speaker 1: Or is that not even in their sphere of vision? Um. So,

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Speaker 1: you know Obama before he left, he had tried to

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Speaker 1: put through the fiduciary rule. The Trunk dismantled that fiduciary

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Speaker 1: rule if Biden were to win and reinforce that, Um,

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Speaker 1: which we think is a pretty good rule, basically just

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Speaker 1: says if you're a wealth manager and you're advising clients,

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Speaker 1: you need to keep their best interests at heart. Um.

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Speaker 1: It's really sad they need a rule for that, but anyway,

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Speaker 1: they that's the rule. And so essentially that would mean

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Speaker 1: that the best interest would mean cheap and you possibly

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Speaker 1: could be sued or gailed at if you put somebody

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Speaker 1: in say a mutual fund because you've got to you know,

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Speaker 1: a commission on it or something. So the more that

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Speaker 1: fiduciary rule is in play, the better it would be

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Speaker 1: for E T F and passive. Now if they put

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Speaker 1: taxes on trading or capital gains, um, I don't know,

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Speaker 1: maybe that would hurt everybody at the same time, and

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Speaker 1: ets to be part of that. The other thing is

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Speaker 1: a Biden administration. Mike mcgloan was just writing, and I

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Speaker 1: agree with them. Could be better for a bit poin

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Speaker 1: ets to be launched. We think that that's ultimately positive

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Speaker 1: too so, but Biden, unlike Bernie, is pretty moderate, so

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Speaker 1: I don't see a ton changing. I just I think

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Speaker 1: that d O the d L rule. Otherwise it was

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Speaker 1: the fiduciary rule is probably the main thing to keep

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Speaker 1: your eye on if Biden wins. Hey, Erica saw a

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Speaker 1: story on the Bloomberg. Uh, Vanguard returning twenty one billion

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Speaker 1: dollars in assets to China's state funds. What's going on there? Yeah,

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Speaker 1: this is a unique Uh honestly didn't know they managed

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Speaker 1: that much for the Chinese government. Um. You know, when

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Speaker 1: we look at Vanguard, their international exposure is pretty weak

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Speaker 1: compared to other issuers like black Rock, because mostly in

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Speaker 1: other places there's a commission based system UM, and they

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Speaker 1: haven't moved to that fee based fiduciary system, which is

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Speaker 1: mostly happening in the US anyway. UM. For all intents

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Speaker 1: and purposes, what happened here is they're just giving back

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Speaker 1: a twenty one billion that they managed for institutions. That

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Speaker 1: is a tough business. Institutions wants you to do all

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Speaker 1: this work for like one basis point, and it's just

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Speaker 1: a lot of efforts. So they want to give that

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Speaker 1: back and put their focus on what I call the

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Speaker 1: holy grail, which is the retail investor in China. You know,

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Speaker 1: there's a billion people there. It's like three Americas. And

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Speaker 1: what they've done is teamed up with a financial and

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Speaker 1: a robo advisor, and they're hoping that they can do

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Speaker 1: what they did here over there, because that would the

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Speaker 1: robo advisors fee based right up their alley. So I

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Speaker 1: think they're just streamlining their focus away from institutions onto retail. Interesting. Eric,

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Speaker 1: thank you so much for joining us. We always loved

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Speaker 1: talking about the E T F business. Nobody better on

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Speaker 1: the street to do with an Eric Baltunus. He's been

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Speaker 1: doing the E t S since I think the beginning

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Speaker 1: of the E t F business for Bloomberg Intelligence, he's

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Speaker 1: a senior et F analysts and Fannie. It's it's just

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Speaker 1: interesting here as we think about the E t F business.

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Speaker 1: The feed differential is so key, and it's such an

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Speaker 1: attractive vehicle for retail investors. Yeah, for sure, and some

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Speaker 1: of them not last very long and some of them

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Speaker 1: are around forever. So definitely you know an area to

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Speaker 1: study if you're again getting involved in them. But Paul,

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Speaker 1: I just want to return to the stimulus headline. I mean,

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Speaker 1: this changes the dynamic going into the weekend once again.

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Speaker 1: If the President is willing for talks to go ahead,

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Speaker 1: does suddenly Nancy Pelosi become more willing to reach a

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Speaker 1: deal or was it was it fine that that we

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Speaker 1: weren't going to have a deal before the election for

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Speaker 1: the Dems. Will see, but stocks certainly moving higher. The

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Speaker 1: International Council of Shopping Center is this Holiday shopping Intentions

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Speaker 1: survey is out? It's hard to believe it's coming close.

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Speaker 1: We're already in the middle of October, and so let's

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Speaker 1: welcome Tommy, President and Chief Executive Officer of the I C. S. C.

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Speaker 1: And Tom. There's a lot unpacking here. You represented a

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Speaker 1: sample of one thousand and four US respondents, but your

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Speaker 1: members of number over seventy thousand. So before we get

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Speaker 1: to what seems to be rosier than you might expect, outlook,

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Speaker 1: talk to us about how your members are faring right now,

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Speaker 1: how many are open, how many are losing money? Well,

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Speaker 1: good morning, and thanks for having me on. You know,

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Speaker 1: I think we're in a very uncertain environment. Obviously, you

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Speaker 1: know the our industry is that the epicenter of the

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Speaker 1: pandemic and stay at home orders and other safety requirements,

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Speaker 1: and so I think it varies depending upon where you

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Speaker 1: are in the country, and obviously you know the nature

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Speaker 1: of retail um that you offer. But I think generally speaking,

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Speaker 1: our members have done a good job of managing through

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Speaker 1: a unprecedented period of time. We are looking forward to

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Speaker 1: the holiday season and expected to be I would say

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Speaker 1: solid for a variety of reasons, um most most significantly

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Speaker 1: because I think consumers spending over the course of this

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Speaker 1: past year has been less than you know, we would

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Speaker 1: have hoped for given the pandemic, and people will lean

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Speaker 1: in more significantly into the holiday as a result. So Tom,

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Speaker 1: just give us a sense, UM's kind of mall traffic.

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Speaker 1: I guess if you will. I'm not sure how you

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Speaker 1: guys really measure it. Small traffic this year, how how

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Speaker 1: down is it? Well? I think it clearly clearly traffic

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Speaker 1: will be down this year for obvious reasons. I mean

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Speaker 1: there's you know, obviously occupancy restrictions. I mean, clearly consumer

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Speaker 1: is concerned about safety and security. I think a lot

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Speaker 1: of the malls have done a lot obviously to try

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Speaker 1: to alleviate those concerns, everything from mass requirements to you know,

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Speaker 1: putting up one way aisles and contact barriers, and the

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Speaker 1: retailers as well. But you know, this holiday season, you know,

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Speaker 1: e commerce will continue to grow. I think the trends

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Speaker 1: that we've seen over the course of the pandemic will

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Speaker 1: continue to be front and center use of e commerce.

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Speaker 1: But those retailers that really merge their e commerce platforms

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Speaker 1: with their physical retail platforms will do the best. You

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Speaker 1: will see a continuation of things like curbside pick up

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Speaker 1: and click and collect, etcetera be front and center, um,

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Speaker 1: particularly during the holiday season, where there'll be significant you know,

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Speaker 1: there'll be significant tension in just the delivery system given

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Speaker 1: the you know, the volume that will take place, and

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Speaker 1: people will want the comfort of going and doing curbside

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Speaker 1: pick up to make sure that they have the goods

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Speaker 1: in place. I also think I would not you know,

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Speaker 1: I wouldn't read to my into this year as it

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Speaker 1: relates to a future trend. I mean, it's hard to

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Speaker 1: know how all of these things will impact, you know,

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Speaker 1: the long term nature the way people's shop in retail.

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Speaker 1: I do know right now, Um, you know, certainly the

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Speaker 1: consumer is going to put safety front and center, and

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Speaker 1: they're much more efficient in their shopping. I mean, they're

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Speaker 1: much more purposeful. If you go to a store, you're

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Speaker 1: much more likely to know exactly what you want to purchase,

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Speaker 1: you're gonna go purchase it, and you're gonna leave. And

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Speaker 1: and that's again back to safety and a focus upon that. So, Tom,

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Speaker 1: your outlook forecasts increased spending with a longer holiday shopping season,

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Speaker 1: hoping out in that regard, that's a rosy outlook. Does

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Speaker 1: it depend on stimulus And if we don't get stimulus,

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Speaker 1: will this forecast change entirely? Yeah? I think there's obviously

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Speaker 1: it's a very difficult year to make a forecast, and

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Speaker 1: so I think when we look at um at one

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Speaker 1: point percent spending increase, you know, it assumes that things

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Speaker 1: like stimulus would take place that it certainly is assumes

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Speaker 1: that the unemployment picture remains stable. Uh. And certainly you

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Speaker 1: know that we've managed the pandemic has managed effectively over

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Speaker 1: the course of the next number of months. If government

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Speaker 1: stimulus does not come through, which I think is critical

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Speaker 1: not just for our industry but for the overall economy,

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Speaker 1: to be perfectly honest with you, uh. And there's significant

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Speaker 1: spikes in the virus, obviously that's going to have a

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Speaker 1: negative impact upon our forecast. You know what's driving our forecast,

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Speaker 1: quite frankly, is if you look at people are spending

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Speaker 1: a lot less on things that they traditionally spent things

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Speaker 1: it's spent money on going out to eat, for example,

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Speaker 1: entertainment for example. And so that we believe that some

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Speaker 1: of that money that would have historically been spent in

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Speaker 1: those things will be contributed to holiday spending. And and

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Speaker 1: I think you know, family uh is highly important right now.

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Speaker 1: Uh And and parents with kids will likely invest in

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Speaker 1: the holiday to try to help kids that are obviously

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Speaker 1: going through a challenging period of time. As well through

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Speaker 1: the pandemic. Tom, just give us a sense here. We

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Speaker 1: hear that the US is still way overstored that shopping uh,

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Speaker 1: that these retailers need to cut their store count. How

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Speaker 1: do you view that? Yes, well, I think it's hard

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Speaker 1: to measure that right now, because you don't really you know, again,

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Speaker 1: we're in the midst of kind of an unprecedented period

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Speaker 1: of time. I think what I would generally say is

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Speaker 1: that those retailers that went into the pandemic in you know,

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Speaker 1: relatively stable shape with a strong balance sheet, are going

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Speaker 1: to emerge from the pandemic um you know, Okay, those

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Speaker 1: retailers that went into the pandemic where they were suffering

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Speaker 1: from a declining, declining revenue and did not have a

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Speaker 1: strong balance sheet. Obviously, we've seen the ramifications of it,

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Speaker 1: and we've seen you know, a lot of store closures.

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Speaker 1: It's hard for me to predict, you know, how what

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Speaker 1: the long term impact of that will be once we

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Speaker 1: emerge in the pandemic. I'm quite confident of of really

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Speaker 1: two things. One, I think, you know, the industry has

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Speaker 1: gone through lots of shocks in the past, and I

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Speaker 1: think like this, but it's going through lots of shops

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Speaker 1: and it will emerge from this. But and I think

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Speaker 1: retailers are very entrepreneur in data, and I think that

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Speaker 1: they will they will adapt as well. Hey, Tom, thanks

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Speaker 1: so much for joining us. We really appreciate your thoughts.

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Speaker 1: Tommy Gee, President, Chief Executive Officer of the International Council

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Speaker 1: of Shopping Centers, giving us his thoughts about the retail

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Speaker 1: holiday shopping season coming up. Well, President Donald Trump is

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Speaker 1: planning to get back on the campaign trout. The question

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Speaker 1: is is that wise for someone who has recently been

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Speaker 1: diagnosed with COVID nineteen UH. To get the answers to

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Speaker 1: that and other questions, we welcome Lauren Sour, Assistant Professor

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Speaker 1: of Emergency Medicine the John Hopps JOHNS. Hopkins School of Medicine,

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Speaker 1: and should note that the Bloomberg School of Public Health

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Speaker 1: is supported by Michael Bloomberg, founder of Bloomberg LP and

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Speaker 1: Bloomberg Philanthropies, as well as this radio and TV operation.

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Speaker 1: Dr Sour thanks so much for joining us here. So again,

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Speaker 1: President Trump is itching to get back on the campaign trail,

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Speaker 1: potentially having a rally. I guess tomorrow is that wise

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Speaker 1: for someone who again has recently been diagnosed with COVID

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Speaker 1: nineteen no, in fact that it actually violates the CDC

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Speaker 1: guidelines about self isolation. And I think a lot of

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Speaker 1: people saw the UM interview that he had with Sean

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Speaker 1: Hannity where he was coughing, and we've seen him, you know,

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Speaker 1: having these challenging breathing processes on video in both his

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Speaker 1: return from Walter Reid but also in more recent videos,

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Speaker 1: and anyone who sees that can see that he is

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Speaker 1: still experiencing symptoms of COVID nineteen and should definitely be

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Speaker 1: self isolating for a minimum of two weeks. Is there

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Speaker 1: a point beyond which from de severere and x metho

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Speaker 1: zone and whatever else he's taking stops becoming useful. All

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Speaker 1: of these drugs have different periods of utility and are

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Speaker 1: given it at different times, and it's important to remember

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Speaker 1: that they're all still experimental for the treatment of COVID

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Speaker 1: nineteen or or infection with stars covie too, so we

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Speaker 1: don't actually know the full breadth of um of how

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Speaker 1: and when the drugs are useful. I think rem Desiviere

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Speaker 1: we have a lot of information on this UM, you know,

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Speaker 1: ten five and tender course of of them, oftentimes administered

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Speaker 1: in the hospital. They're almost exclusively administered in the hospital

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Speaker 1: with regeneron we you know, you want to see in

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Speaker 1: these monocola antibodies, the patients being monitored, their auntibody levels

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Speaker 1: routinely being checked um and and honestly, we don't often

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Speaker 1: discharge people so quickly with steroids like the President was

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Speaker 1: with deem xizone and UM. So that is a is

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Speaker 1: a concerning sort of development in how that drug was

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Speaker 1: administered and then how he's monitored post administration. So, Professor,

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Speaker 1: this treatment how or is that something that you think

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Speaker 1: is going to be widely deployed for patients. I'm just

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Speaker 1: wondering how the President Trump's doctors kind of zeroed in

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Speaker 1: on that as potential treatment. Um and it appears at

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Speaker 1: least to be successful in the President's case. Yeah, I

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Speaker 1: think we can't really know if it was successful in

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Speaker 1: the President's case because we don't have a lot of

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Speaker 1: data in a nice, well designed clinical trial. And so,

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Speaker 1: you know, there's so many factors that go into the

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Speaker 1: President's medical care. He is getting the best of the

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Speaker 1: best medical care, and so one of the reasons we

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Speaker 1: use clinical trials is to weed out some of those

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Speaker 1: confounding factors. Um, you know, standard of care, the other

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Speaker 1: things he's been given, the supportive care, he got, the fluids,

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Speaker 1: all of those other things when he made it his

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Speaker 1: way into the hospital. So while it is probably UM,

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Speaker 1: you know, we'll probably learn a lot more about these UH,

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Speaker 1: these monoclonal antibodies soon as they go through this clinical

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Speaker 1: trial protocol. UM, we can't really stay explicitly. We can

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Speaker 1: guess that they helped, but we can't say explicitly that

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Speaker 1: they did. UM. We use monoclonal antibodies and monoclonal antibody

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Speaker 1: cocktails in many other situations and they are effective. UM,

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Speaker 1: and we know their utility, which is I'm sure why

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Speaker 1: we're general and many other UH pharmaceutical companies have gone

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Speaker 1: down the path of creating them for COVID nineteen. But

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Speaker 1: until we have that good clinical trial data, we just

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Speaker 1: can't make any generalizations from this one very specific, very

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Speaker 1: high level of care case. Yeah, doctors, our is physical

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Speaker 1: exertion detrimental beyond a certain point. So we know the

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Speaker 1: doctors recommend that you stay active and that you try

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Speaker 1: and keep all of your bodily functions as functioning as

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Speaker 1: possible during this it's not really helpful to rest in

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Speaker 1: fact of anything, It just gives the virus a better chance.

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Speaker 1: But beyond a certain point, you have to ask the question,

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Speaker 1: if the resident is getting better, is there a chance

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Speaker 1: that he'll relapse by exerting himself so much, going on rallies,

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Speaker 1: being on TV every nice and every morning. Yes, it's

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Speaker 1: absolutely a risk. And you know he's on dexim foflon

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Speaker 1: or was when he was discharged, And so steroids can

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Speaker 1: make you feel better in the moment a lot better

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Speaker 1: in the moment um, and so he does have the

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Speaker 1: potential to sort of overdo it um and overexert and

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Speaker 1: possibly cause challenges to his breathing and his recovery UM

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Speaker 1: and and potentially do more harm to himself. So you know,

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Speaker 1: I'm not a physician, so I am, and I'm not

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Speaker 1: on his clinical care team, but I will say that

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Speaker 1: there we have seen in our data, at least from Hopkins,

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Speaker 1: but also I think more broadly across the globe that

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Speaker 1: people do have these short term recoveries and then um

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Speaker 1: get a lot worse. So if you overdo it in

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Speaker 1: that short term recovery space, you have the potential to

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Speaker 1: get a lot worse um and and not recover as

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Speaker 1: as effectively as you did that first go around. So

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Speaker 1: just real quickly, dr um. I think President Trump is

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Speaker 1: going to get a medical exam on top of Carlson

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Speaker 1: tonight on by the Fox Doctor. What should we be

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Speaker 1: looking for there? You know, I'm honestly not sure there's

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Speaker 1: much to look for there. I think it's seems from

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Speaker 1: everything I've heard like it will be a publicity stunt. Um.

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Speaker 1: We have seen this doctor who is going to be

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Speaker 1: examining him push misinformation about hydroxychloric quin and about um,

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Speaker 1: the the risks associated with coronavirus and how it was

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Speaker 1: not much difference than the flu um. So I think

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Speaker 1: a lot of it is going to be a narrative

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Speaker 1: that the President potentially is pushing, and that you know,

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Speaker 1: the findings are not going to actually tell us much

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Speaker 1: about his medical status. There's medical care certainly, um. He

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Speaker 1: would not let anything go out that that says that

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Speaker 1: anything beyond the narrative that he's controlling about his recovery

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Speaker 1: and his wellness. So I think that we're going to

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Speaker 1: get very limited information about how well he is doing.

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Speaker 1: And in fact, I think he's creating a false that

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Speaker 1: he is not infectious and safe and healthy. Um that

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Speaker 1: how's the potential to do some detriment to the broader

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Speaker 1: understanding of how we manage UM post hospital discharge. It

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Speaker 1: would be funny, except a lot of people will be watching,

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Speaker 1: and so it's not at all funny. Dr Lawrence Ours,

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Speaker 1: thank you very much, show Assistant Professor Emergency Medicine at

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Speaker 1: Johns Hopkins. Well, we have some deal activity in the

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Speaker 1: chips business. A M. D In talks about arrival Zilenx

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Speaker 1: for thirty billion dollars. To break down the details, we

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Speaker 1: welcome On and Trinivaston's senior semiconductor and hardware analysts for

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Speaker 1: Bloomberg Intelligence. He is one of the top chip analysts

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Speaker 1: on the street and we appreciate getting some of his time.

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Speaker 1: So On and big number here, thirty billion dollar deal.

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Speaker 1: What do you make of it? Yeah, it's hey, Paul,

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Speaker 1: good morning, Thank you for having me. So this is

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Speaker 1: in our view of both an offensive as as well

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Speaker 1: as a defensive deal for MD. If you look at

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Speaker 1: what's happening in the computing space, I mean this have

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Speaker 1: used this ice cream shop analogy before, which is that

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Speaker 1: computing has been evolving from an ice cream shop that

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Speaker 1: contains mostly vanilla, strawberry and chocolate into a remarkably diverse

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Speaker 1: ice cream shop with multiple flavors. You have general purpose

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Speaker 1: GPUs that m Video make, you have fp t a

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Speaker 1: s that xy links and Alterra make, and all of

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Speaker 1: these ice cream buckets if you may have been expanding

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Speaker 1: inside and expanding in use because of the different kinds

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Speaker 1: of workloads who've been seeing, which in turn is being

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Speaker 1: driven by the clouds. So Intel has this wide library

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Speaker 1: of assets um and, but they haven't been able to

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Speaker 1: put it together. So simply put, their ice cream machine

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Speaker 1: is broken. What is in video doing? In Video has

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Speaker 1: been able to put together specialty ice cream buckets in

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Speaker 1: terms of melanox and in terms of general purpose GPUs

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Speaker 1: very effectively, and with the ARM deo, it is now

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Speaker 1: gramatically expanding into the even love strawberry and chocolate main

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Speaker 1: mainstave flavors. So a m D was up until this

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Speaker 1: point doing really well in vanilla strawberry chocolate, taking share

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Speaker 1: from Intel, but it's specialty flavors are weak. So this

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Speaker 1: Zielenk steal gives them access to wider array of specialty

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Speaker 1: ice cream buckets as well as being able to play

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Speaker 1: in the mainstap flavors. So the computing market is changing,

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Speaker 1: and uh D is responding partially to accelerated share games

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Speaker 1: from Intel and partially to have an alternative to both

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Speaker 1: the Intel platform and the video platform for the next decade.

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Speaker 1: ZILENX on mixed programmable ships for wireless networks, does it

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Speaker 1: want to get acquired? Look, okay, at this point we've

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Speaker 1: talked about this in the semiconductor industry. Um is that

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Speaker 1: scale matter, platforms matter, Right, So if you look at

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Speaker 1: what Intel's capability is, it's been able to put together

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Speaker 1: or has attention on paper, the ability to put together

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Speaker 1: these different ice cream sundays for specialty workloads for cloud computing. Right. So,

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00:24:18,320 --> 00:24:20,960
Speaker 1: if you were a specialty ice cream flavor and you're

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Speaker 1: saying I'm only going to make the topic or only

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Speaker 1: the sprinkles or only the hard flood said you have,

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00:24:28,640 --> 00:24:32,080
Speaker 1: you run the risk of being marginalized. Versus if you

436
00:24:32,280 --> 00:24:35,440
Speaker 1: are a part of a big ice cream shop, then

437
00:24:35,600 --> 00:24:38,560
Speaker 1: your tompics are going to be my more widely used

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00:24:38,920 --> 00:24:41,439
Speaker 1: your specialty ice cream flavor. He's going to be a

439
00:24:41,480 --> 00:24:46,399
Speaker 1: part of vast number of ice cream sundays rather be

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00:24:47,160 --> 00:24:52,680
Speaker 1: ending we're talking about chips, right, Yes, but the ice

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Speaker 1: creamility comes in handy, don't you think. So I talked

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Speaker 1: to us about valuation here. I'm looking at the Bloomberg

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Speaker 1: Intelligence research and I see zylenx here at forty times

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00:25:04,000 --> 00:25:07,480
Speaker 1: uh earnings. Seems like a big multiple to me. What's

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00:25:07,480 --> 00:25:10,760
Speaker 1: that mean for m D? Yeah? So m D is

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00:25:10,800 --> 00:25:13,120
Speaker 1: going to have to use a lot out of its

447
00:25:13,160 --> 00:25:15,800
Speaker 1: stock currency for them. So we think that you know,

448
00:25:16,359 --> 00:25:19,160
Speaker 1: roughly two third stock one third cash, and that will

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Speaker 1: maximize their leverage. We think, um, you mean, if you

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Speaker 1: look at what Broad comes at four times, but we

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Speaker 1: think that they could do this deal. Was that two

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00:25:27,280 --> 00:25:32,639
Speaker 1: third two third equity one third that that that driven cash?

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00:25:32,760 --> 00:25:35,120
Speaker 1: So that's the way we're thinking that the deal might

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00:25:35,119 --> 00:25:36,920
Speaker 1: be structured. Either way, there's going to be a lot

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00:25:36,960 --> 00:25:39,880
Speaker 1: of stock in Voltimus deal. Are they getting a better

456
00:25:39,920 --> 00:25:42,199
Speaker 1: price because we're in pandemic times? Or I mean, is

457
00:25:42,200 --> 00:25:45,480
Speaker 1: there an actual extra premium because these companies have what

458
00:25:45,520 --> 00:25:49,560
Speaker 1: we need right now? Yeah? So, shockingly enough, the pandemic

459
00:25:49,680 --> 00:25:54,160
Speaker 1: hasn't um sort of dramatically altered the vector of computing.

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00:25:54,160 --> 00:25:57,360
Speaker 1: If anything, it's accelerated it. So we've heard this from

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Speaker 1: all the cloud services companies, all the changes that you

462
00:26:00,119 --> 00:26:02,480
Speaker 1: were expecting over the next few years have just been

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00:26:03,200 --> 00:26:06,720
Speaker 1: dramatically accelerated as a result of the pandemic and pushed

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00:26:06,880 --> 00:26:10,960
Speaker 1: or pulled forward right, And these are the building blocks

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00:26:11,000 --> 00:26:15,120
Speaker 1: that tower those changes. So you resoom call that you're

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00:26:15,280 --> 00:26:19,040
Speaker 1: on six hours today is being powered by these chips.

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00:26:19,080 --> 00:26:22,639
Speaker 1: So the fact that there's demands there means that there's

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00:26:22,720 --> 00:26:26,399
Speaker 1: landscape changes beneath the herd. If you may all right

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00:26:26,440 --> 00:26:29,280
Speaker 1: on and keep us honest and not to date, you

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00:26:29,280 --> 00:26:31,080
Speaker 1: know you will be following this throughout the day and

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00:26:31,200 --> 00:26:33,760
Speaker 1: into next week on a swing. US and a senior

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Speaker 1: semiconductor and hardware analyst for Bloomware Intelligence ice cream Analysts

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Speaker 1: exactly have been talked to you for me. Thanks for

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00:26:42,520 --> 00:26:45,679
Speaker 1: listening to the Boomberg Markets podcast. You can subscribe and

475
00:26:45,800 --> 00:26:49,560
Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform

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00:26:49,600 --> 00:26:52,720
Speaker 1: you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonny

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00:26:52,760 --> 00:26:55,600
Speaker 1: Quinn and Paul Sweeney I'm on Twitter at pt Sweeney.

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Speaker 1: Before the podcast, you can always catch us worldwide at

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00:26:58,359 --> 00:27:03,119
Speaker 1: Bloomberg Radio. H uh uh u