WEBVTT - Marvell Technology Rallies, GitLab Falls, Microchip Gains on Earnings Forecast

0:00:02.520 --> 0:00:08.720
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, The.

0:00:08.720 --> 0:00:12.560
<v Speaker 2>Stock Movers Report, your roundup of companies making moves in

0:00:12.600 --> 0:00:15.880
<v Speaker 2>the stock market, harnessing the power of Bloomberg Data.

0:00:16.680 --> 0:00:18.720
<v Speaker 3>Let's take a look at how some of the stocks

0:00:19.120 --> 0:00:21.640
<v Speaker 3>on the move today A Paul Sweny alongside Normal liv

0:00:21.680 --> 0:00:23.840
<v Speaker 3>We're joined by Billy Lipscholes. Billy, what you got first today?

0:00:23.880 --> 0:00:26.760
<v Speaker 1>Yeah, I want to start with Marvel Technology ticker mr

0:00:27.040 --> 0:00:29.680
<v Speaker 1>VL right now at more than seven percent, trading at

0:00:29.680 --> 0:00:33.479
<v Speaker 1>the highest level guys since late February. This comes after

0:00:33.920 --> 0:00:37.479
<v Speaker 1>some pretty strong guidance from the company CEO kind of

0:00:37.720 --> 0:00:40.080
<v Speaker 1>laying down, laying to bed some of the investor concerns

0:00:40.320 --> 0:00:43.680
<v Speaker 1>about AI and AI consumption. They also announced plans to

0:00:43.680 --> 0:00:46.640
<v Speaker 1>acquire startup Celestial AI for about three point twenty five

0:00:46.760 --> 0:00:49.720
<v Speaker 1>billion dollars. Looking through some of the analyst reaction, basically

0:00:49.760 --> 0:00:52.440
<v Speaker 1>saying at the end of the day, the management team

0:00:52.560 --> 0:00:55.320
<v Speaker 1>was very confident not only for next year, but also

0:00:55.360 --> 0:00:58.840
<v Speaker 1>looking beyond twenty twenty eight, looking at that Celestial aideal,

0:00:59.160 --> 0:01:02.200
<v Speaker 1>according to Jeff, saying that that helps provide a CPO story.

0:01:02.400 --> 0:01:06.240
<v Speaker 1>Jury's still out, but basically, if they aren't giving revenue

0:01:06.319 --> 0:01:09.360
<v Speaker 1>ramping from that deal until Q four of twenty twenty

0:01:09.400 --> 0:01:12.000
<v Speaker 1>eight fiscal year has some time to work.

0:01:12.640 --> 0:01:15.560
<v Speaker 4>Seeing shares of Marvel down about ten percent so far

0:01:15.640 --> 0:01:17.920
<v Speaker 4>this year, You're also got your eyes on get Lab.

0:01:18.160 --> 0:01:21.840
<v Speaker 1>Yeah, get Lab ticker GTLB talk about being down right now,

0:01:21.959 --> 0:01:25.880
<v Speaker 1>down more than sixteen percent. Stocks trading at the lowest

0:01:25.959 --> 0:01:29.360
<v Speaker 1>level since June twenty twenty three on a trailing twelve

0:01:29.400 --> 0:01:33.560
<v Speaker 1>month average, down about forty three percent. Today's weakness comes

0:01:33.600 --> 0:01:36.840
<v Speaker 1>after earnings. Really not a bad report all things considered,

0:01:36.880 --> 0:01:38.880
<v Speaker 1>but when you look under the surface and kind of

0:01:38.880 --> 0:01:42.200
<v Speaker 1>calling out some of the reaction from Bloomberg Intelligence's Sunil

0:01:42.400 --> 0:01:47.480
<v Speaker 1>rag Goopaul saying that basically concerns around AI headwins for

0:01:47.520 --> 0:01:50.600
<v Speaker 1>the company four it's seat based revenue models continuing to

0:01:50.640 --> 0:01:54.760
<v Speaker 1>show up overall consumer growth below consensus. Reading through some

0:01:54.840 --> 0:01:57.600
<v Speaker 1>of the trading notes that I get in the morning,

0:01:58.040 --> 0:02:00.520
<v Speaker 1>kind of not much going on in this market. You

0:02:00.600 --> 0:02:02.800
<v Speaker 1>really want to see growth. You want to see kind

0:02:02.800 --> 0:02:05.120
<v Speaker 1>of an ability to show that not only are you

0:02:05.160 --> 0:02:07.680
<v Speaker 1>benefiting from AI at a minimum, that you're not potentially

0:02:07.680 --> 0:02:10.079
<v Speaker 1>at risk of AI. Get Lab not showing up in

0:02:10.080 --> 0:02:10.680
<v Speaker 1>either regard.

0:02:11.080 --> 0:02:14.480
<v Speaker 3>I had no idea what get lab does thankfully Bloomberg

0:02:14.520 --> 0:02:18.120
<v Speaker 3>has the dees function description. You're an application software company,

0:02:18.200 --> 0:02:19.880
<v Speaker 3>so trying to get the AI wave there.

0:02:19.960 --> 0:02:22.560
<v Speaker 4>Yeah, okay, yeah.

0:02:22.000 --> 0:02:24.840
<v Speaker 3>What else we have? We got another one for us, Microchip.

0:02:24.880 --> 0:02:28.760
<v Speaker 1>We'll cap off with Microchip Technology, semiconductor manufacturer. I'll get

0:02:28.760 --> 0:02:32.480
<v Speaker 1>that off the top. Take your MCCHP, a thirty three

0:02:32.480 --> 0:02:34.959
<v Speaker 1>and a half billion dollar company. Right now, it's trading

0:02:35.040 --> 0:02:39.440
<v Speaker 1>up almost ten percent, best days since mid August. This

0:02:39.520 --> 0:02:43.480
<v Speaker 1>came again. We're still in the thick of tech earning season,

0:02:43.680 --> 0:02:46.720
<v Speaker 1>so the company beat expectations on the top and bottom

0:02:46.760 --> 0:02:49.240
<v Speaker 1>line again, maybe getting a bit of a benefit from

0:02:49.240 --> 0:02:51.160
<v Speaker 1>those Marvel numbers. But when you look at the analyst

0:02:51.240 --> 0:02:55.560
<v Speaker 1>reactions basically saying that strong booking, showing up management talking

0:02:55.639 --> 0:02:58.200
<v Speaker 1>up its backlog, it does seem like things are going

0:02:58.280 --> 0:03:00.280
<v Speaker 1>quite well. Keeping in mind that the company he did

0:03:00.280 --> 0:03:04.280
<v Speaker 1>pre announce booking strengths back a little while ago, so

0:03:04.360 --> 0:03:06.720
<v Speaker 1>really looking at some of the management commentary on the call,

0:03:06.880 --> 0:03:11.440
<v Speaker 1>does seem optimistic again. Ticker MCCHP on Microchip up more

0:03:11.480 --> 0:03:12.280
<v Speaker 1>than eight percent.

0:03:12.520 --> 0:03:14.760
<v Speaker 3>I told us about the new issue market. Where are

0:03:14.800 --> 0:03:17.160
<v Speaker 3>we because we had a flurry right after Labor Day

0:03:17.840 --> 0:03:20.040
<v Speaker 3>and we're still seeing stuff or they've kind of shut

0:03:20.080 --> 0:03:21.200
<v Speaker 3>down for the well.

0:03:21.200 --> 0:03:24.160
<v Speaker 1>We reported yesterday that a Medline, which could raise five

0:03:24.200 --> 0:03:26.520
<v Speaker 1>billion dollars, would be the biggest deal of the year,

0:03:26.560 --> 0:03:30.520
<v Speaker 1>expected to start that formal marketing process early next week.

0:03:30.600 --> 0:03:34.000
<v Speaker 1>That's a Carlisle, Blackstone, h and f asset in the

0:03:34.000 --> 0:03:37.360
<v Speaker 1>healthcare space gonna be a big one. So that'll likely

0:03:37.440 --> 0:03:41.080
<v Speaker 1>make some bankers years in an odd deal. You know,

0:03:41.200 --> 0:03:42.640
<v Speaker 1>really don't see these deals at the end of the

0:03:42.680 --> 0:03:43.480
<v Speaker 1>tail end of the year, and.

0:03:43.480 --> 0:03:44.880
<v Speaker 4>A lot of action we've really been seeing in the

0:03:44.920 --> 0:03:46.120
<v Speaker 4>healthcare space more broadly.

0:03:46.240 --> 0:03:48.600
<v Speaker 1>So yeah, it kind of you when you talk to

0:03:48.640 --> 0:03:51.200
<v Speaker 1>investors in bankers, they're hoping that this can kind of

0:03:51.200 --> 0:03:53.760
<v Speaker 1>open up private equity. There still is not the demand

0:03:53.800 --> 0:03:55.880
<v Speaker 1>that we're seeing for biotech in particular, which is such

0:03:55.920 --> 0:03:58.680
<v Speaker 1>a big deal for the new issue market. But Medline

0:03:58.680 --> 0:03:59.680
<v Speaker 1>will be a good test.

0:04:00.200 --> 0:04:02.280
<v Speaker 3>If it's owned by these big private equity companies they've

0:04:02.280 --> 0:04:05.000
<v Speaker 3>had an issue like this is how private acty was

0:04:05.040 --> 0:04:07.320
<v Speaker 3>first explained to me when I was a kid. It's

0:04:07.360 --> 0:04:10.320
<v Speaker 3>easy to raise the money, it's really easy to deploy

0:04:10.360 --> 0:04:13.920
<v Speaker 3>the money. It's really hard to monetize your investments. That's

0:04:13.960 --> 0:04:17.000
<v Speaker 3>where the real skill comes in. Where's that's been a

0:04:17.080 --> 0:04:18.080
<v Speaker 3>challenge for private acuity.

0:04:18.120 --> 0:04:20.200
<v Speaker 1>It's been a challenge for private equity. It's been a challenge,

0:04:20.200 --> 0:04:22.760
<v Speaker 1>particularly in the US. I go back to the middle

0:04:22.800 --> 0:04:26.440
<v Speaker 1>of this year's sale point, a tom Bravo asset pushed

0:04:26.480 --> 0:04:29.400
<v Speaker 1>on price. According to investors, they priced above range. They're

0:04:29.400 --> 0:04:33.559
<v Speaker 1>down seventeen percent. Wow, NQ Global down twenty eight percent.

0:04:33.640 --> 0:04:36.040
<v Speaker 1>So when you look at the pree deals performance, you're

0:04:36.040 --> 0:04:39.520
<v Speaker 1>buying IPOs for alpha generation, you want to outperform on

0:04:39.560 --> 0:04:41.960
<v Speaker 1>an average basis the entire year here in the US

0:04:42.040 --> 0:04:43.720
<v Speaker 1>only up seven percent, so you're trailing the S and

0:04:43.720 --> 0:04:46.279
<v Speaker 1>P five hundred. You've got private equity leverage to sell

0:04:46.360 --> 0:04:48.200
<v Speaker 1>down overhang. So Medline is going to be a good

0:04:48.200 --> 0:04:51.000
<v Speaker 1>test of kind of deal execution, just given that it's

0:04:51.000 --> 0:04:52.279
<v Speaker 1>been in the hopper for some time.

0:04:52.320 --> 0:04:54.600
<v Speaker 4>What are you hearing in terms of expectations for next year?

0:04:56.200 --> 0:05:00.880
<v Speaker 1>Head yet, opium raised, rains eternal. I mean bankers like

0:05:01.360 --> 0:05:04.880
<v Speaker 1>bankers are candid right, expectations we're high for twenty twenty five,

0:05:05.080 --> 0:05:07.359
<v Speaker 1>it was a fine year. Expectations are that we should

0:05:07.360 --> 0:05:09.200
<v Speaker 1>at least match where we're at in twenty twenty six.

0:05:09.279 --> 0:05:12.360
<v Speaker 1>The big question is do private equity sponsors show up,

0:05:12.400 --> 0:05:14.360
<v Speaker 1>are they willing to get these deals out of the door?

0:05:14.640 --> 0:05:17.880
<v Speaker 1>And if that doesn't happen, is there enough tech companies

0:05:18.800 --> 0:05:20.680
<v Speaker 1>that can kind of carry the baton. There's a lot

0:05:20.720 --> 0:05:22.800
<v Speaker 1>of debate around who would go public and how to

0:05:22.800 --> 0:05:23.880
<v Speaker 1>fil some of that volume.

0:05:24.120 --> 0:05:26.760
<v Speaker 3>Yeah, I would think, and I've been proven wrong that

0:05:26.839 --> 0:05:28.279
<v Speaker 3>if I'm private ECUA, I actually want to get these

0:05:28.279 --> 0:05:31.039
<v Speaker 3>things out the door. I need to monetize these things

0:05:31.080 --> 0:05:33.320
<v Speaker 3>because I need to go out return that capital to

0:05:33.640 --> 0:05:35.560
<v Speaker 3>my ALP so I can raise more capital and get

0:05:35.640 --> 0:05:39.239
<v Speaker 3>more management fees. But I know they're just just loath

0:05:39.400 --> 0:05:42.400
<v Speaker 3>to do a down round like this IPO something at

0:05:42.440 --> 0:05:43.520
<v Speaker 3>below where they're carrying.

0:05:43.680 --> 0:05:45.560
<v Speaker 1>Well, that's the tough part, right. So if you are

0:05:45.839 --> 0:05:47.320
<v Speaker 1>in the market or want to be in the market

0:05:47.360 --> 0:05:49.240
<v Speaker 1>for another fund, well, people want to see where your

0:05:49.279 --> 0:05:51.760
<v Speaker 1>IR is. If I take you public at a discount

0:05:51.800 --> 0:05:53.560
<v Speaker 1>to where we bought it, I'm not really delivering on

0:05:53.600 --> 0:05:54.200
<v Speaker 1>those metroles.

0:05:55.400 --> 0:05:59.400
<v Speaker 2>The Stock Movers Report from Bloomberg Radio. Check back with

0:05:59.480 --> 0:06:02.799
<v Speaker 2>us throughout for the latest roundup of companies making news

0:06:02.839 --> 0:06:06.120
<v Speaker 2>on Wall Street and for the latest market moving headlines.

0:06:06.360 --> 0:06:10.359
<v Speaker 2>Listen to Bloomberg Radio Live. Catch us on YouTube, Bloomberg

0:06:10.400 --> 0:06:13.479
<v Speaker 2>dot com, and on Applecarplay and Android Auto with the

0:06:13.520 --> 0:06:14.880
<v Speaker 2>Bloomberg Business App.