WEBVTT - Tesla Cars Recall and Apple's EU Antitrust Challenges 0:00:01.440 --> 0:00:06.720 From Marhard where Innovation, money and power Collie in Silicon Valley, NBN. 0:00:07.040 --> 0:00:11.080 This is Bloomberg Technology with Caroline Hyde and Ed Ludlove. 0:00:25.040 --> 0:00:27.880 I'm Caroline Heinder Blomberg's Weltead quarters in New York, and 0:00:27.920 --> 0:00:29.520 I'med Ludlow in San Francisco. 0:00:29.680 --> 0:00:31.720 This is Bloomberg Technology coming up. 0:00:31.760 --> 0:00:35.680 Tesla recalls two million cars to fix autopilot's safety flows. 0:00:36.000 --> 0:00:37.080 Well breakdown what it. 0:00:37.040 --> 0:00:39.560 Means for drivers and indeed the eed maker as it 0:00:39.600 --> 0:00:41.040 faces its biggest recall ever. 0:00:42.200 --> 0:00:44.160 And Apple is set to be hit by an EU 0:00:44.240 --> 0:00:47.839 antitrust order in its fight with Spotify over rules that 0:00:47.880 --> 0:00:51.480 govern the iPhone makers music streaming rivals. Will break down 0:00:51.520 --> 0:00:52.319 the potential ban. 0:00:53.080 --> 0:00:56.080 Plus, for the first time ever, Netflix is revealing viewer 0:00:56.160 --> 0:00:59.000 data on every show in an effort to boost transparency 0:00:59.200 --> 0:01:01.120 that's in the way of the whole with strikes. We'll 0:01:01.120 --> 0:01:03.480 discuss that and so much more throughout this hour. 0:01:03.680 --> 0:01:07.000 The other top top story is Tesla, and actually Tesla's 0:01:07.000 --> 0:01:11.360 declines have really accelerated. This is a recall in name 0:01:11.520 --> 0:01:15.520 only of two million vehicles. Tesla plans to fix the 0:01:15.680 --> 0:01:19.360 issues around autopilot with over the air software updates. Those 0:01:19.400 --> 0:01:21.920 started on the twelfth, which was yesterday. Let's get the 0:01:21.920 --> 0:01:25.240 full picture and bring in Bloombergs keep laying out of Washington, DC. 0:01:25.440 --> 0:01:28.840 What do we know about this Tesla auto pilot recall? Well, 0:01:28.840 --> 0:01:31.480 this recall is years in the making. Literally. 0:01:31.920 --> 0:01:35.760 NITSA, which is the top auto safety regulator here in Washington, 0:01:36.160 --> 0:01:40.120 first began looking at autopilot in twenty sixteen, and the 0:01:40.160 --> 0:01:42.880 pace of the investigation is definitely picked up under the 0:01:42.880 --> 0:01:47.680 Biden administration. The agency launched the current probe into autopilot 0:01:47.800 --> 0:01:50.560 in twenty twenty one, and then they also launched a 0:01:50.640 --> 0:01:55.520 probe into Tesla's full self drive beta system in twenty 0:01:55.560 --> 0:02:00.280 twenty two, and NITA said that those probes were This 0:02:00.680 --> 0:02:03.600 recalls a product of those probes that Tesla has agreed 0:02:03.640 --> 0:02:07.480 to recall almost all of their cars across all models 0:02:07.960 --> 0:02:11.000 and push out this update, which they say will address 0:02:11.400 --> 0:02:14.919 some of the flaws with making sure drivers are fully 0:02:14.919 --> 0:02:19.000 engaged and aware that the cars are not capable of 0:02:19.080 --> 0:02:23.920 driving themselves. The autopilot system is also subject to several 0:02:23.960 --> 0:02:28.320 other investigations of other agencies. Tesla's faced criticism of their 0:02:28.360 --> 0:02:31.119 marketing of the systems, with people pointing out that there 0:02:31.120 --> 0:02:33.200 are no cars currently on the road that are capable 0:02:33.280 --> 0:02:34.200 of full self driving. 0:02:34.720 --> 0:02:35.320 I mean, what is it? 0:02:35.320 --> 0:02:38.240 The agency has open more than fifty special crash investigations 0:02:38.280 --> 0:02:41.160 involving Tesla cars that are suspected to be linked with 0:02:41.160 --> 0:02:44.080 the autopilot. Ultimately, it feels as though this is just 0:02:44.400 --> 0:02:47.480 an awareness an education process to the driver. Why isn't 0:02:47.520 --> 0:02:50.760 this something that other regions are looking into, not just 0:02:50.760 --> 0:02:51.600 the United States. 0:02:53.800 --> 0:02:57.360 I think a lot of this is centered on Tesla's marketing. 0:02:57.400 --> 0:03:00.320 As I mentioned of the systems in the view hicles. 0:03:00.360 --> 0:03:03.040 I mean, they have the system that they're calling full 0:03:03.040 --> 0:03:06.880 self drive, and even they acknowledge that the cars are 0:03:06.919 --> 0:03:09.799 not capable of driving themselves. So I think that's why 0:03:09.800 --> 0:03:11.880 there's a bigger focus on this in the United States 0:03:12.160 --> 0:03:13.200 right now, a. 0:03:13.160 --> 0:03:15.919 Little bit more of a marketing message perhaps, and indeed 0:03:15.960 --> 0:03:19.320 just making people, oh, basically have their hands on the 0:03:19.680 --> 0:03:22.239 steering wheel that little bit more. Keith Lang, really great 0:03:22.240 --> 0:03:23.560 to have you on the show. Thank you so much 0:03:23.600 --> 0:03:26.160 for joining us. Meanwhile, let's stick on Tesla and at 0:03:26.200 --> 0:03:29.160 least it's leader Elon Musk because x we understand a course, 0:03:29.200 --> 0:03:31.240 his social media platform is on track to bring in 0:03:31.360 --> 0:03:33.960 roughly two and a half billion dollars in advertising revenue 0:03:34.160 --> 0:03:37.440 in twenty twenty three. It's a significant slump from priors. 0:03:37.520 --> 0:03:39.920 It's all according to people familiar with the matter. We know, 0:03:40.040 --> 0:03:42.000 we want to talk to one Kirk Wagner now who 0:03:42.120 --> 0:03:44.800 put out this story and just give us the context here. 0:03:44.880 --> 0:03:46.040 How much of a fall off is it? 0:03:47.280 --> 0:03:50.120 Yeah, I mean it's well over forty percent from the 0:03:50.200 --> 0:03:53.080 last full year that the company reported, which is twenty 0:03:53.120 --> 0:03:55.520 twenty one. Obviously last year we didn't get full numbers 0:03:55.560 --> 0:03:57.640 because the deal had closed in the middle of the year. 0:03:58.000 --> 0:03:59.440 But you know, this is a huge deal. 0:03:59.520 --> 0:04:02.720 Twitter or now X has historically made about ninety percent 0:04:02.720 --> 0:04:05.720 of its revenue from advertising, right, And so when you 0:04:05.760 --> 0:04:09.640 see this big decline in their core main business, it's 0:04:09.680 --> 0:04:10.800 obviously not a great sign. 0:04:10.840 --> 0:04:12.440 And that's why you see Elon out. 0:04:12.480 --> 0:04:14.320 You know, a couple of weeks ago, he was saying, hey, 0:04:14.560 --> 0:04:18.000 this advertising issue could lead to real trouble for the company. 0:04:18.040 --> 0:04:21.560 He's talked about bankruptcy before, right, And that's because this 0:04:21.600 --> 0:04:23.520 core part of their business is really struggling. 0:04:23.960 --> 0:04:26.280 Ka, you and I have been crunching numbers and talking 0:04:26.320 --> 0:04:29.440 as sources about what's happening right now because a lot 0:04:29.520 --> 0:04:32.000 changed from the second to the third quarter, third quarter 0:04:32.080 --> 0:04:35.840 to fourth quarter. Minderstanding is it's seventy five percent ads, 0:04:36.320 --> 0:04:38.760 and then the twenty five percent that remains isn't just 0:04:38.800 --> 0:04:42.760 subscriptions for premium or premium plus, right, it's data licensing. 0:04:42.920 --> 0:04:45.680 Yeah, actually more data licensing than subscriptions. You know, what 0:04:45.680 --> 0:04:48.480 our understanding is that the subscription part of that business 0:04:48.520 --> 0:04:51.479 is very small. I think the external estimates are about 0:04:51.480 --> 0:04:53.440 one hundred and twenty million a year. We'd heard that 0:04:53.480 --> 0:04:56.200 there's just over like a million PAIN subscribers right now. 0:04:56.360 --> 0:04:59.400 The data licensing historically has been you know, a much 0:04:59.440 --> 0:05:00.839 bigger business, five hundred. 0:05:00.560 --> 0:05:01.599 Plus million dollars. 0:05:01.640 --> 0:05:03.680 And that's for you know, people who are paying for 0:05:03.760 --> 0:05:06.400 access to what we call the fire hose of tweets, right, 0:05:06.480 --> 0:05:08.800 all of the tweets that are coming through public tweets. 0:05:09.040 --> 0:05:11.200 And so that business I believe has stayed maybe a 0:05:11.240 --> 0:05:14.400 little bit stronger because it's not as impacted by you know, 0:05:14.440 --> 0:05:16.960 Elon Musk coming out and saying the things that he 0:05:17.040 --> 0:05:18.800 says that advertisers are bothered by. 0:05:18.760 --> 0:05:21.000 Right and real quick. An ex executive did respond to 0:05:21.040 --> 0:05:23.480 our story. You can read his full statement in the story, 0:05:23.520 --> 0:05:26.000 which says, we gave an incomplete picture of what their 0:05:26.000 --> 0:05:29.120 business currently looked like Bloombo's technologies. Kirt Wagner, thank you, Kara, 0:05:29.200 --> 0:05:29.719 what you got? 0:05:29.960 --> 0:05:32.600 Well, let's dive into time for talking tech head because 0:05:32.839 --> 0:05:34.599 we're going to stick on the world of Elon Musk. 0:05:34.640 --> 0:05:38.039 But SpaceX this time will sell insider shares ninety seven 0:05:38.080 --> 0:05:40.560 dollars apiece and a tender offer a price increase that 0:05:40.640 --> 0:05:42.839 moves the value of the space and Satellite company closer 0:05:43.000 --> 0:05:46.560 to one hundred and eighty million dollars, according to sources. Meanwhile, 0:05:46.720 --> 0:05:50.160 Tesla posted a video showing improvements it's made in its 0:05:50.240 --> 0:05:55.120 humanoid robot prototype dubbed the Optimus. But the human Mimicking 0:05:55.160 --> 0:05:57.800 Machine is part of Tesa's venture into developing AI, and 0:05:57.839 --> 0:06:02.040 it utilizes a trained neural nets work to perform basic 0:06:02.120 --> 0:06:04.640 tasks mat me have a bit of a dance as well, 0:06:04.760 --> 0:06:07.920 as you can see in this current video. Banwhile ever, 0:06:08.000 --> 0:06:11.000 in New York, the law could require social media platforms 0:06:11.000 --> 0:06:14.000 to provide data app nom charge to third party apps 0:06:14.000 --> 0:06:16.760 that allow users to block hate speech, which has been 0:06:16.760 --> 0:06:19.440 surging online now. This comes after x and Reddit began 0:06:19.600 --> 0:06:21.960 charging third party apps earlier this year. 0:06:22.360 --> 0:06:25.279 Ed what for Got coming up on the show. Apple 0:06:25.400 --> 0:06:28.480 is in the crosshairs of EU antitrust regulators about its 0:06:28.520 --> 0:06:31.200 app store rules for music. Rival's going to bring all 0:06:31.240 --> 0:06:34.880 those details on that Bloomberg exclusive plus Netflix ready to 0:06:34.920 --> 0:06:38.240 tell the world how many people watch it shows. We 0:06:38.279 --> 0:06:41.120 will have all of that data next. Very quickly shares 0:06:41.120 --> 0:06:43.480 a Betsy of pair the decline of as much as 0:06:43.480 --> 0:06:45.760 eight and a half percent, currently down five percent, on 0:06:45.839 --> 0:06:49.440 track for their biggest drop since September, cutting eleven percent 0:06:49.480 --> 0:06:53.120 of the marketing workforce, and also giving us an update 0:06:53.120 --> 0:06:56.279 on their outlook for the fourth quarter. Gross merchandise volume 0:06:56.320 --> 0:06:58.960 is going to drop in the low single digits. Top 0:06:59.000 --> 0:07:01.000 line growth two to three percent. But this is a 0:07:01.040 --> 0:07:04.440 real slow down and clearly things not going well for Etsy. 0:07:04.520 --> 0:07:18.320 The stockdown four percent. This is Bloomberg technology. Apple is 0:07:18.360 --> 0:07:20.440 set to be hit by a ban on its app 0:07:20.480 --> 0:07:24.520 store rules that govern music streaming rivals and a potential 0:07:24.600 --> 0:07:28.240 hefty fine that according to Bloomberg sources, the EU regulators 0:07:28.400 --> 0:07:31.840 are putting the finishing touches to a decision that would 0:07:31.840 --> 0:07:36.000 prohibit Apple's practice of blocking music services from pushing their 0:07:36.120 --> 0:07:39.720 users away from the app store and iOS to alternative 0:07:39.720 --> 0:07:43.120 subscription options. The decision is slated to come early next year. 0:07:43.200 --> 0:07:46.160 Let's bring in Bloomberg's Aggie Cantrell out of Germany for 0:07:46.240 --> 0:07:49.280 more on this. This is anti steering provisions that the 0:07:49.320 --> 0:07:52.920 EU is trying to address, and the potential penalty for 0:07:52.960 --> 0:07:55.960 Apple is large. A fine, what do we know about it? 0:07:57.360 --> 0:07:59.800 Yes, so essentially the fine itself could be up to 0:07:59.800 --> 0:08:02.920 ten percent of annual sales to Apple and that's a 0:08:02.960 --> 0:08:05.520 real concern for the company, of course, and in the 0:08:05.520 --> 0:08:09.360 past we've seen that the EU has really been at 0:08:09.360 --> 0:08:13.280 the forefront of incredibly tough regulations on big tech. This 0:08:13.720 --> 0:08:20.080 is especially coming from the EU's antitrust Amodivestia and this 0:08:20.200 --> 0:08:22.880 is also coming at a time when the EU is 0:08:22.920 --> 0:08:28.240 about to launch its digital markets at Provision next year 0:08:28.280 --> 0:08:30.640 in March, and that's going to be a critical focus 0:08:30.720 --> 0:08:34.880 for big tech because essentially that's designating companies like Apple 0:08:35.160 --> 0:08:39.160 as gatekeepers for our online ecosystem, and that really means 0:08:39.200 --> 0:08:43.120 that those companies need to conduct their business practices in 0:08:43.160 --> 0:08:46.800 a way that is not anti competitive for the smaller 0:08:46.840 --> 0:08:48.600 players in the market, and that is what is. 0:08:48.559 --> 0:08:49.480 Being discussed here. 0:08:49.760 --> 0:08:53.480 This suit was originally brought forward by Spotify almost four 0:08:53.559 --> 0:08:56.480 years ago. And what we're essentially seeing now is that 0:08:56.520 --> 0:08:58.840 Apple may have to change its practices. It may have 0:08:58.920 --> 0:09:03.760 to allow for platforms to facilitate the app store to 0:09:03.800 --> 0:09:08.080 facilitate people being able to. 0:09:07.200 --> 0:09:09.600 Go to other subscription platforms like Spotify. 0:09:09.920 --> 0:09:12.800 And the reason for this for Apple to changing their praxices, 0:09:12.840 --> 0:09:14.800 this isn't the first time that they've actually thought about 0:09:14.800 --> 0:09:16.839 doing this off the back of EU legislation. 0:09:17.200 --> 0:09:20.680 We also saw this, for instance when the app Apple 0:09:20.679 --> 0:09:21.280 app Store. 0:09:21.559 --> 0:09:24.800 The Apple announced earlier this year that they would make 0:09:25.080 --> 0:09:28.560 we would most likely have to consider allowing third party 0:09:28.559 --> 0:09:34.000 app stores to access access to iPhones as of twenty 0:09:34.040 --> 0:09:36.400 twenty four off the back of the Digital Markets app. 0:09:37.160 --> 0:09:40.600 Other than competition, the EU is being pretty busy. Aggie 0:09:40.720 --> 0:09:42.760 is also being busy when it comes to labor protection. 0:09:42.920 --> 0:09:45.360 Just tell us what they're considering or proposing when it 0:09:45.360 --> 0:09:49.520 comes to workers of well delivery for example or over. 0:09:50.880 --> 0:09:51.040 Yes. 0:09:51.120 --> 0:09:53.960 So essentially, the Platform Workers Directive is about trying to 0:09:54.000 --> 0:09:57.960 standardize the labor rights for gig economy workers. Essentially, there 0:09:58.000 --> 0:10:00.000 are a lot of people who work for these platum 0:10:00.120 --> 0:10:04.200 forms that are currently deemed self employed, and the EU 0:10:04.360 --> 0:10:07.840 believes that around five million so about nineteen percent of 0:10:07.880 --> 0:10:11.959 the self employed platform workers in the EU are misclassified 0:10:11.960 --> 0:10:15.160 and should actually be considered employees, and they have bailt 0:10:15.160 --> 0:10:19.000 out a system of criteria. These criteria include, does the 0:10:19.040 --> 0:10:21.520 platform you work or have control over your hours? Do 0:10:21.559 --> 0:10:23.400 you have an upper limit on how much you can 0:10:23.440 --> 0:10:27.000 earn on that platform? Is their control over your appearance 0:10:27.080 --> 0:10:30.199 or your conduct while you're working on their platform? And 0:10:29.920 --> 0:10:34.679 so what most people would consider standard aspects of being employed. 0:10:34.880 --> 0:10:38.200 And if two of those five criteria are fulfilled, the 0:10:38.280 --> 0:10:42.520 proposal is essentially that then those people would be considered employees. 0:10:42.679 --> 0:10:44.640 But this is still in a preliminary discussion. 0:10:44.800 --> 0:10:48.840 The deal has been met, but it's still awaiting approvals 0:10:48.840 --> 0:10:50.040 from the European Parliament. 0:10:50.520 --> 0:10:53.959 Business models under fire, Aggie Cantrell, thank you so much 0:10:54.000 --> 0:10:54.680 for joining us. 0:10:54.760 --> 0:10:59.000 Meanwhile, let's stick on a part of Europe. Because Airbnb's Irish. 0:10:58.640 --> 0:11:01.800 Unit has agreed to pay the Italian tax authorities five 0:11:01.840 --> 0:11:04.040 hundred seventy six million euros, which is two hundred and 0:11:04.040 --> 0:11:07.360 six hundred twenty one million US dollars, to settle allegations 0:11:07.360 --> 0:11:09.640 that it hadn't paid enough tax from twenty seventeen to 0:11:09.640 --> 0:11:12.000 twenty twenty one. Now the home showing company says it 0:11:12.000 --> 0:11:15.760 doesn't acknowledge quote any liability as part of the settlement, 0:11:15.840 --> 0:11:18.920 according to the regulatory filing ed what's going viral? 0:11:19.760 --> 0:11:23.240 Yeah, what has been going viral is Netflix releasing viewer 0:11:23.320 --> 0:11:26.600 data on every single show a movie on its service. 0:11:26.720 --> 0:11:29.160 Is the first time that what the streaming giant says 0:11:29.200 --> 0:11:32.880 will be regular, reports Bloomberg's Flex Gillette joins us, Now, 0:11:32.960 --> 0:11:37.680 this is the biggest disclosure from Hollywood or any streaming 0:11:37.760 --> 0:11:42.040 service anyway. Infinite amounts of data on eighteen thousand titles. 0:11:42.400 --> 0:11:44.960 What do we actually learn from it? Or we learned 0:11:45.000 --> 0:11:45.240 a lot. 0:11:45.320 --> 0:11:47.800 I mean, we've been waiting for this moment for ten years, 0:11:48.200 --> 0:11:51.679 wondering what exactly people are watching on Netflix. And I 0:11:51.760 --> 0:11:55.560 think the biggest takeaway from yesterday is that, you know, 0:11:55.760 --> 0:11:58.760 more than fifty percent of the view in the first 0:11:58.800 --> 0:12:01.920 six months of the year was driven by Netflix originals, 0:12:01.960 --> 0:12:07.560 so original movies, original TV series, And that's sort of 0:12:07.559 --> 0:12:10.680 a validation of all the spending that has been done 0:12:11.040 --> 0:12:14.960 on original programming by these streaming services over the past 0:12:15.040 --> 0:12:15.679 several years. 0:12:16.240 --> 0:12:19.000 I got to say, I haven't watched a single minute 0:12:19.000 --> 0:12:21.040 and in any of those I mean, maybe that's what's 0:12:21.080 --> 0:12:23.040 more to a parent than it is to intend netflix 0:12:23.160 --> 0:12:26.240 lack of addiction. But ultimately this has been forced in 0:12:26.320 --> 0:12:29.720 some way by the strikes. Why was this transparency wanted. 0:12:29.640 --> 0:12:34.160 Well, the creative community has been demanding more transparency for years. 0:12:34.240 --> 0:12:35.800 I mean, there was really no way to know of 0:12:35.880 --> 0:12:38.160 your show was a hit, was it a failure. You 0:12:38.280 --> 0:12:40.679 kind of had to take this streamer's word for it. 0:12:40.760 --> 0:12:43.640 And so Netflix, you know, yesterday acknowledged that part of 0:12:43.679 --> 0:12:47.720 this was that by keeping this data to themselves, it 0:12:47.760 --> 0:12:51.240 had built up all this mistrust with their creative partners. 0:12:51.640 --> 0:12:54.480 And so yeah, this is a way for everybody to 0:12:54.520 --> 0:12:56.440 know this is where you stand, this is what people 0:12:56.480 --> 0:13:00.240 are watching. And it's a big flex by Netflix also 0:13:00.320 --> 0:13:04.200 because it's going to show the world how much more 0:13:04.240 --> 0:13:06.760 people are watching on Netflix than any of the competitors. 0:13:07.440 --> 0:13:09.720 And it's important for the act is in the context 0:13:09.720 --> 0:13:11.600 of the strikes we just had, because this was at 0:13:11.640 --> 0:13:12.600 the center of tools. 0:13:13.320 --> 0:13:16.160 Yeah, I mean, also the compensation model in terms of 0:13:17.000 --> 0:13:21.680 you know, rewarding you know, creators and actors you know, 0:13:21.720 --> 0:13:25.040 and writers residuals based on you know, if your show 0:13:25.160 --> 0:13:27.640 was really popular. Part of that was you need to 0:13:27.640 --> 0:13:30.000 know what's popular. Now that data is going to go 0:13:30.040 --> 0:13:33.240 to the guilds anyways, but it also now allows the 0:13:33.240 --> 0:13:36.400 rest of the world to check this out. You know, 0:13:36.440 --> 0:13:41.000 you can bet that every writer, actor, producer, even the 0:13:41.000 --> 0:13:43.439 competitors are going to be pouring through this data wanting 0:13:43.480 --> 0:13:45.560 to know, Okay, this is what people are actually watching. 0:13:46.559 --> 0:13:48.480 Thin begs for Lexilatt, thank you so much. 0:13:55.720 --> 0:13:58.520 I think investors need to get confident that the. 0:13:58.520 --> 0:14:01.000 FED is done raising rates. I don't think they need 0:14:01.040 --> 0:14:01.800 to lower them a. 0:14:01.720 --> 0:14:04.040 Bunch for the IPO market to happen, but I think 0:14:04.400 --> 0:14:07.120 are to pick up. But I do think they need 0:14:07.160 --> 0:14:09.760 to get a sense that may rate rising is done, 0:14:09.840 --> 0:14:13.000 which you know, who knows. I expect we'll see more 0:14:13.000 --> 0:14:15.040 tech IPOs in twenty twenty four than we saw on 0:14:15.080 --> 0:14:17.240 twenty twenty three, but that's not very hard to do. 0:14:17.960 --> 0:14:18.880 You don't need many. 0:14:19.560 --> 0:14:22.200 Important As we look ahead to FED Day, which is 0:14:22.200 --> 0:14:24.720 today a little few hours ahead of time, Mitchell Green 0:14:24.840 --> 0:14:28.440 of lead Edged Capital with his outlook on what fed's decisions. 0:14:28.040 --> 0:14:29.040 Mean for the IPO market. 0:14:29.120 --> 0:14:31.720 Joining us now with her perspective Rachel Gering's just Ey 0:14:31.800 --> 0:14:36.360 ipo practice cohed and is Rachel the IPO market, particularly 0:14:36.400 --> 0:14:39.280 tech IPOs go be dictated by Macro or is there 0:14:39.320 --> 0:14:41.720 some more well LP pressure that's going to come in. 0:14:42.880 --> 0:14:45.120 I think it'll actually be a combination of both. 0:14:45.240 --> 0:14:49.160 But the improving macro backdrop is certainly going to help 0:14:49.240 --> 0:14:52.400 the situation and making it encouraging. Sitting here today, as 0:14:52.400 --> 0:14:53.920 I look ahead to twenty twenty. 0:14:53.640 --> 0:14:58.520 Four, Rachel, just like me getting organized with my holiday shopping. 0:14:59.040 --> 0:15:02.280 My understanding is and behind the scenes, there's a lot 0:15:02.320 --> 0:15:05.960 of work going in to preparing for IPOs in twenty 0:15:06.080 --> 0:15:10.480 twenty four, the groundwork and confidential filings. Does that tally 0:15:10.560 --> 0:15:14.080 with what you're hearing from clients and from your network. 0:15:15.240 --> 0:15:18.000 Absolutely, not only what we're hearing from clients, but what 0:15:18.000 --> 0:15:23.560 we're experiencing firsthand. Really encouraged by the amount of preparation 0:15:23.800 --> 0:15:27.440 companies are putting into their IPO plans, whether that's for 0:15:27.480 --> 0:15:30.360 twenty twenty four or even beyond into twenty twenty five. 0:15:30.760 --> 0:15:34.120 Clients are really taking this opportunity. 0:15:34.240 --> 0:15:41.000 Of the lacking of IPOs happening today, that's being used 0:15:41.040 --> 0:15:43.200 and the time is being used today to prepare for 0:15:43.240 --> 0:15:46.320 the future and really to be able to optimize when 0:15:46.360 --> 0:15:49.640 the market does return, allowing these companies that optionality to 0:15:50.240 --> 0:15:52.960 take hold of that market opportunity when it's right for them. 0:15:53.800 --> 0:15:57.440 There is a market mechanics story happening where companies are 0:15:57.560 --> 0:16:02.640 filing confidentially and then doing nothing sitting on it. In 0:16:02.680 --> 0:16:05.720 your experience, how much flexibility does that actually give a 0:16:05.760 --> 0:16:10.960 company filing confidentially on the timing and method of going public. 0:16:12.280 --> 0:16:14.600 I think it really does provide a lot of optionality, 0:16:14.840 --> 0:16:19.960 and it's definitely a course we would always recommend for clients. One, 0:16:20.200 --> 0:16:24.440 it's allowing companies confidentially, as you mentioned, to work through 0:16:24.680 --> 0:16:28.480 that process with the Securities and Exchange Commission, work through 0:16:28.520 --> 0:16:32.400 those comments and so forth, without the pressure of needing 0:16:32.440 --> 0:16:36.600 to go on file publicly eminently, and as the broader 0:16:36.640 --> 0:16:41.840 macro backdrop continues to play out and continue to improve, 0:16:42.000 --> 0:16:44.720 that's when companies can really choose the timing that's right 0:16:44.760 --> 0:16:47.600 for them, but be ready have that, have a lot 0:16:47.640 --> 0:16:51.400 of the review process complete, be ready for that roadshow, 0:16:52.320 --> 0:16:54.800 and then really complete a very efficient process in that 0:16:54.920 --> 0:16:56.680 last part of the IPO journey. 0:16:56.680 --> 0:16:58.920 And then be ready to be a public facing company 0:16:58.960 --> 0:17:02.400 in many ways. Member, speaking to Fijisimo over at Instacart 0:17:02.440 --> 0:17:04.680 after their listing, I was like, well, how is it off? 0:17:04.720 --> 0:17:06.560 Your first cord rouping in public companies, just like I've 0:17:06.600 --> 0:17:08.400 kind of been doing this for ages because they've been 0:17:08.440 --> 0:17:11.040 waiting to go public for so long, they've had all 0:17:11.040 --> 0:17:12.639 that documentation and rythmarole. 0:17:12.720 --> 0:17:15.360 Anyway to that point, are you likely. 0:17:15.240 --> 0:17:18.880 To see, well, some of the companies that do eventually 0:17:18.920 --> 0:17:22.040 becoming go public have a similar sort of business model 0:17:22.040 --> 0:17:23.919 to an instacot in terms of showing some sort of. 0:17:23.880 --> 0:17:25.600 Evidence of profitability. 0:17:25.640 --> 0:17:27.159 Do they have to be talking up AI a lot 0:17:27.200 --> 0:17:29.720 at the moment or will more types of companies come. 0:17:30.600 --> 0:17:33.080 I think we're going to continue seeing companies come to 0:17:33.119 --> 0:17:37.720 market from a broad range of sectors. I anticipate looking 0:17:37.760 --> 0:17:40.320 ahead to twenty twenty four, it will probably be much 0:17:40.359 --> 0:17:45.359 of the same, so meaning large companies scale already with 0:17:45.480 --> 0:17:49.600 profitability or eminently reaching profitability. So I don't anticipate that 0:17:49.840 --> 0:17:53.840 changing immediately. But as the current crap of IPOs continue 0:17:53.840 --> 0:17:57.320 to perform, this very next crap of IPOs perform, well, 0:17:57.760 --> 0:18:01.159 then I see the IPO opportunities broad mean to others 0:18:01.200 --> 0:18:04.760 kind of that more traditional tech type company, probably in 0:18:04.760 --> 0:18:06.440 the later part of twenty twenty four. 0:18:07.200 --> 0:18:11.159 Ultimately, do you think the sort of pressure that a 0:18:11.160 --> 0:18:12.879 lot of these companies are on the to go public 0:18:12.920 --> 0:18:15.080 for a liquidity event to give money back to LPs 0:18:15.119 --> 0:18:18.119 to employees. Has it become in some way unsustainable? Have 0:18:18.160 --> 0:18:21.040 there been too many VC backed companies of late? 0:18:22.280 --> 0:18:24.879 Well, when we definitely are seeing you know, a rise 0:18:24.920 --> 0:18:28.360 in VC backed companies and then long long holdings, right, 0:18:28.400 --> 0:18:30.720 So there's definitely pent up demand. When you think about 0:18:30.760 --> 0:18:34.480 pe VC investors, they've been holding these investments for a 0:18:34.480 --> 0:18:39.439 long period of time, definitely anxiously awaiting a monetization event 0:18:39.480 --> 0:18:42.840 of some sort. We're seeing the IPO market, you know slow, 0:18:43.000 --> 0:18:45.600 the m and A market slow, So definitely a lot 0:18:45.600 --> 0:18:49.440 of pent up demand. But at the same time, the 0:18:49.800 --> 0:18:53.720 PE investors, those VC investors are also recognizing the importance, 0:18:53.960 --> 0:18:58.040 particularly around valuation. We still have that valuation tension of 0:18:58.080 --> 0:19:01.280 what you know, buyers want to sell and buy at 0:19:01.359 --> 0:19:05.200 versus what companies want, you know, what companies are targeting themselves, 0:19:05.280 --> 0:19:07.919 So that valuation tension is still there. 0:19:08.160 --> 0:19:08.760 I think to get. 0:19:08.720 --> 0:19:12.119 Deals done going into twenty twenty four, having realistic pricing 0:19:12.119 --> 0:19:14.360 expectations as an absolute must. 0:19:15.280 --> 0:19:17.720 Rachel, what about the competing forces? What are the biggest 0:19:17.760 --> 0:19:21.800 factors that are causing technology companies in particular to hit pause, 0:19:21.880 --> 0:19:24.800 hit the brakes and hold them ongoing public. 0:19:25.800 --> 0:19:29.199 Really, I think the broader macro backdrop, I think is 0:19:29.240 --> 0:19:32.679 one reason why companies are waiting on the sidelines. 0:19:34.040 --> 0:19:35.280 We'll see what happens today. 0:19:35.359 --> 0:19:37.800 I think everyone is expecting the Fed to hold tight 0:19:37.800 --> 0:19:40.760 on interest rates. You know, we've had IPOs and high 0:19:40.760 --> 0:19:43.840 interest rate environments before, so it doesn't mean that we 0:19:43.880 --> 0:19:44.720 can't continue. 0:19:44.920 --> 0:19:46.080 It's the predictability. 0:19:46.480 --> 0:19:49.399 I think companies want to know that rate hikes have 0:19:49.520 --> 0:19:52.720 stopped and then even see some encouragement that they might 0:19:52.760 --> 0:19:55.320 even start to come down sometime in twenty twenty four. 0:19:55.640 --> 0:19:58.480 So that level of predictability will be definitely helpful for 0:19:58.520 --> 0:20:01.720 the IPO backdrop, and then broader macro trends that the 0:20:01.800 --> 0:20:05.280 data is trending in the right direction. So it provides 0:20:05.320 --> 0:20:08.760 hope for twenty twenty four, absent any unforeseen shack. 0:20:09.280 --> 0:20:11.400 Rachil Gering of Ey, thank you so much. 0:20:18.520 --> 0:20:20.560 Welcome back to Blue meag Technology. IM Caline Hide in 0:20:20.600 --> 0:20:20.960 New York. 0:20:21.680 --> 0:20:23.600 I met love though in San Francisco, Caro. I was 0:20:23.640 --> 0:20:26.840 going to bring you a magic market moment, but then 0:20:26.920 --> 0:20:29.400 trading on the NAZAQ one hundred in the session conspired 0:20:29.440 --> 0:20:31.920 against me. This is what the NAZAT one hundred looks 0:20:31.960 --> 0:20:34.920 like here to date, and we're way off session highs 0:20:35.280 --> 0:20:38.719 this this morning, but for just a moment, we're at 0:20:38.760 --> 0:20:41.199 a fifty percent year to date gain on the Nasdaq 0:20:41.280 --> 0:20:43.040 one hundred. And the reason I bring you up bring 0:20:43.040 --> 0:20:44.520 that up so you look at the far left n 0:20:44.600 --> 0:20:47.080 side of the screen. A lot of that recent momentum 0:20:47.280 --> 0:20:49.960 has come since November first, which was the last FED 0:20:50.040 --> 0:20:52.960 meeting on the Nasdaq one hundred. More than one hundred 0:20:53.000 --> 0:20:56.520 names that largely hire multiple software stocks than megacaps, some 0:20:56.560 --> 0:20:58.439 of the EV names as well, and that's why I 0:20:58.520 --> 0:21:02.080 track that index. It is FED decision day. The expectation 0:21:02.280 --> 0:21:05.680 for this meeting absolutely nothing's going to happen, But think 0:21:05.680 --> 0:21:08.679 about twenty twenty four and the narrative that's coming. The 0:21:08.720 --> 0:21:11.480 white numbers that you're looking at are the forecast for 0:21:11.520 --> 0:21:13.960