Speaker 1: Caroline Hide of Bloomberg's World tad quarters in New York
Speaker 1: and the Mad Ludlow in San Francisco. This is Bloomberg
Speaker 1: Technology coming up in this our merger. Monday returns after
Speaker 1: a quiet year for M and A in the US
Speaker 1: dealmakers they raised to get tech transactions across the line.
Speaker 1: We break them down and it could be a huge
Speaker 1: win for the Biden Administration's pushed to loosen Beijing's access
Speaker 1: to the semiconductor industry, as Japan weighs joining curbs on
Speaker 1: China and the well unorthodox management styles of Elon Musk
Speaker 1: and Sam bagmun Freed Tech and Media founder and board
Speaker 1: member Arianna Huffington's joins to explain why it's bad for business. First,
Speaker 1: so many news headlines breaking when it comes to M
Speaker 1: and A this Monday. I kind of keep track of them,
Speaker 1: but luckily we know somebody they can Yeah, exactly not
Speaker 1: a nine of course, Microsoft buying that steak in the
Speaker 1: London Stock ex Change. It's been a whirlwind of well
Speaker 1: getting into the week of M and A space. In fact,
Speaker 1: I think it's been to seventy billion dollars of M
Speaker 1: and A rush is coming before this holiday and that's
Speaker 1: just from Sunday into Monday. Let's push it on with
Speaker 1: Bloombergs Katie Ruth, who has been across several of these stories.
Speaker 1: And Katie just talk us through some of the reasoning
Speaker 1: behind the sudden florry of deals. Sure, great to be
Speaker 1: with you. So we see a lot of deals happening
Speaker 1: before the end of the year. Sometimes, um, there's an
Speaker 1: eagerness to wrap things up before the holidays, especially because
Speaker 1: people don't want deals to die before the holidays. So um,
Speaker 1: you know, we had been reporting on the Kopa situation
Speaker 1: for a while. Our understanding is that there had been
Speaker 1: talks for months. But yes, it finally got done. Although
Speaker 1: with Kopa this was part of a wave of take
Speaker 1: privates this year, in particular by Toma looking at enterprise software.
Speaker 1: UM with with the emngine Horizon situation, there had been
Speaker 1: a bidding war between them and Santa Fee, which backed
Speaker 1: out yesterday and then late last night we broke the
Speaker 1: story that Amin came through and made an offer. But yes,
Speaker 1: this is quite the murger Monday. Uh you may imagtion
Speaker 1: The Microsoft also took a stake in the London Stock Exchange.
Speaker 1: It's interesting time a year for all of this to happen.
Speaker 1: It was interesting as well the premium that Tomer Bravo
Speaker 1: is willing to put on Cooper I think seventy seven
Speaker 1: premium over the closing price from the day that you
Speaker 1: guys first reported that that Cooper was up for sales.
Speaker 1: So it's kind of an interesting development. A lot happening
Speaker 1: in four D eight hours. It's a sprint finish to
Speaker 1: end the year. How does that set us up for Katie,
Speaker 1: because I know there are other deals that we're tracking
Speaker 1: as we go forward. Absolutely, so we are expecting, at
Speaker 1: least from what we hear from dealmakers, that will be
Speaker 1: pretty active on the M and A front, particularly with
Speaker 1: tech M and A. I mean, one thing that you know,
Speaker 1: observers of the stock mark it have noticed is that
Speaker 1: TEX stocks are down substantially and it took a while
Speaker 1: for sellers and buyers to agree on price, especially with volatility,
Speaker 1: and so people are expecting that at this point tech
Speaker 1: companies are going to be less likely to be in
Speaker 1: deni all about where they're worth in um. It makes
Speaker 1: it a good time for for buyers to look and
Speaker 1: buy things on the cheek. Bloomberg's Katie Ruth their care
Speaker 1: I can tell you Katie is a jet setter. She's
Speaker 1: on a plane, she's in cities all around the world
Speaker 1: chasing these deals. She's never in one place. It's no
Speaker 1: wonder she's able to keep it all in her mind.
Speaker 1: We have a lot more discussed, Katie, Ruth, thank you
Speaker 1: very much. Let's take into it more with Robert Profuset,
Speaker 1: who chairs the Global m and a practice over at
Speaker 1: law firm. Jones Day, December twelve, Merger Monday, Why why now?
Speaker 1: Well U two has been down compared to one, but
Speaker 1: it's still was five trillion dollars. It was just fabulous.
Speaker 1: And one of the things that always happens in a
Speaker 1: market correction is it takes Katie mentioned it, it takes
Speaker 1: time for buyers and sellers to figure out, well, what's
Speaker 1: the real number? UM? What am I really worth? UM?
Speaker 1: Famous quote by build Parcelves was you are what your
Speaker 1: record says you are. In in Wall Street parlance, that
Speaker 1: means the market dictates what you're worth at that particular
Speaker 1: important time. But it's very hard to adjust. I mean,
Speaker 1: the m Gen deal was interesting, almost done at a
Speaker 1: all time high. For the Target Horizon Tomo Bravo deal,
Speaker 1: it's not surprising. It was difficult to get to a
Speaker 1: deal it even though it's a huge premium to their market.
Speaker 1: Before the story broke um, they were trading at four
Speaker 1: or five times that value just eighteen months ago. So
Speaker 1: it's very hard that one of the big There are
Speaker 1: two issues that happen in these circumstances, and one of
Speaker 1: them is this dislocation on value. What what is it
Speaker 1: really worth? So things are starting to settle out, maybe
Speaker 1: in terms of what the equity markets say, bo, what
Speaker 1: what do we really need with all your years of experience,
Speaker 1: I mean one of the top M and a corporate
Speaker 1: governance lawyers out there, And when you're talking to these businesses,
Speaker 1: what from a macro perspective do they want to see?
Speaker 1: Is it the federal reserve stopping on the hiking front.
Speaker 1: Is it some sort of calmness when it comes to
Speaker 1: overall volatility, Because what's interesting is, yes, we've had a
Speaker 1: sell off overall in the market, but for example, the
Speaker 1: fear gauge, the volatility index hasn't been a real at
Speaker 1: a real elevated level from real perspective, in these discussions
Speaker 1: you're having with people who want to use the huge
Speaker 1: amounts of cash they got to put to work. What
Speaker 1: do they want to see? Well, it's it is stability. Um.
Speaker 1: One of the things about twenty this, this not just
Speaker 1: this most recent period, is I can can more stuff
Speaker 1: happen in a in a short period of time. And
Speaker 1: we've been through I mean, you know we as awesome messed.
Speaker 1: I think ed mentioned it earlier. We went through twelve
Speaker 1: years of virtually of just quiet interest rates, nothing going
Speaker 1: on in that environment, and all of a sudden, it's
Speaker 1: a debate. Is a tenure going to five fifty or
Speaker 1: six hundred? You know? I mean, how does that happen?
Speaker 1: And then we've got we've got war, We've got all
Speaker 1: this stuff. So part of it is just some stability um,
Speaker 1: and businesses need to do that. But when you when
Speaker 1: you think about it from m Gen's point of view, Um,
Speaker 1: you know, horizon as I'm not an expert on this
Speaker 1: on this sort of stuff, but I understand they've got
Speaker 1: some great drugs. Am Gen, like every other big farment,
Speaker 1: has got stuff coming off patent. It's always got to
Speaker 1: replenish itself, and it's got a powerful balance sheet. I
Speaker 1: think it's a billion hundred fifty billion dollar market gap
Speaker 1: come through something and they got They got a bridge
Speaker 1: loan for the deal for twenty eight billion dollars. This
Speaker 1: is in the same market where people say they can't
Speaker 1: borrow money. Well, it's something everybody can have. Some people
Speaker 1: can borrow money. It's just that everybody can't bought for
Speaker 1: all money like they could. So it's a it's it's
Speaker 1: gonna be it's gonna to be a more fundamental market
Speaker 1: rather than a financial market. And and the tomb of
Speaker 1: Bravo deal is important too. For one other thing, there
Speaker 1: is a tremendous amount of private equity that was that
Speaker 1: was raised in the last several years, trillions, literally trillions
Speaker 1: of dollars that's got to be put to use because
Speaker 1: of the way they're economics work. Not that they would
Speaker 1: not that they do deals they think are good deals,
Speaker 1: but there there's some pressure to get that money applied. Well,
Speaker 1: there's some companies out there in the technology space, on
Speaker 1: the biotech space that also have an awful lot of money.
Speaker 1: They're also keen to do deals. But the regulators we
Speaker 1: were just talking last week the prolificence of the prominence
Speaker 1: of the FTC just everywhere, whether it's looking at what
Speaker 1: meth has been doing in terms of money where it's
Speaker 1: looking what Microsoft is buying in the gaming space, how
Speaker 1: much is regulation and way for the people you talk to.
Speaker 1: It's a factor. Um. And certainly like the Microsoft Activision
Speaker 1: deal and and even as Simon and Schuster, much smaller
Speaker 1: deal but kind of important in some way in terms
Speaker 1: of what it says that that deal was blown off
Speaker 1: by any trust reasons. On the other hand, the government
Speaker 1: has been their track record has not been too good
Speaker 1: this last and most recent period, um, United uh, United Health, Alumina,
Speaker 1: that Sugar deal, a lot of things. So just because
Speaker 1: they moved to block a deal doesn't mean it will
Speaker 1: be blocked. Um. But it's certainly a factor. And this
Speaker 1: administration is taking an aggressive view of this, but in
Speaker 1: all candor, I'm not sure it's all that more aggressive
Speaker 1: than than the Trump administration on these things. It's just
Speaker 1: a factor. And one of the realities is, you know,
Speaker 1: the Microsoft deal. I know some people were acting like
Speaker 1: that was surprising. I would have been surprised if they
Speaker 1: would have just said, Okay, it's Microsoft after all. I mean,
Speaker 1: you have to take a look at it. Now, do
Speaker 1: you have to sue I? I I don't know, so
Speaker 1: I don't think that's really changed. But they're like a
Speaker 1: lot of things in this world we're in there, there's
Speaker 1: a little bit more rhetoric. Hey, Bob, let's look at
Speaker 1: this from a slightly different angle. Caroline is talking about
Speaker 1: some of the big names out there that are going
Speaker 1: shopping right because they had a strong balance sheet, because
Speaker 1: they see opportunity. The other side of the table, there
Speaker 1: are those under duress, the four sellers. When we think
Speaker 1: about the market right now, the market, what role does
Speaker 1: the four seller play in global M and A activity?
Speaker 1: Usually it's when it bought things bottom it's the four
Speaker 1: sellers that at start the level of activity. Usually it's
Speaker 1: because of over leverage. That's not going to be the
Speaker 1: case this time. It's it's just a it's just a
Speaker 1: function of the world we've just lived in. In the
Speaker 1: last several years. I mean, there was equity available at
Speaker 1: very aggressive prices for all sorts of ideas, whether they
Speaker 1: were in the e V space or biotech or unime,
Speaker 1: equity was there that those markets are closed. Um, the
Speaker 1: public markets are absolutely close for that sort of stuff,
Speaker 1: and the private markets are very difficult, not like they were,
Speaker 1: and a lot of businesses were were financed based on
Speaker 1: the assumption that equity could be there. Well, it's not
Speaker 1: going to be there, and they can't borrow money when
Speaker 1: they're in the startup mode. Um, So there's gonna be
Speaker 1: a lot of merging um. And I think firms like
Speaker 1: you know, I talking about tom of Brabo, they're in
Speaker 1: the news, they're perfectly well situated for this sort of thing.
Speaker 1: There's just going to have to be a lot of
Speaker 1: activity because some companies are frankly going to get close
Speaker 1: to running out of money. They don't have revenue or
Speaker 1: very much and they got to pay the bills. We
Speaker 1: will see if and when that happens. Bob Profuse at
Speaker 1: Global m H at Giants Day, Thank you very much.
Speaker 1: Now coming up a potential win for the US and
Speaker 1: it's quest to loosen China's access to chip making technology
Speaker 1: is Japan considers similar clubs to the by An administration.
Speaker 1: This is Bloomberg Bloomberg's learned that Japan and the Netherlands
Speaker 1: have agreed in principle to join the US in tightening
Speaker 1: chip making machinery exports to China. That according to sources,
Speaker 1: that is a potential blow to Beijing's technology ambitions. The
Speaker 1: two countries are likely to announce soon that there will
Speaker 1: adopt at least some of the measures the US rolled
Speaker 1: out in October. Stacy razgone Bernstein, Managing director and Senior
Speaker 1: analyst of US Semiconductors SO Stacy Bloomberg. Sources say that
Speaker 1: these two governments are considering curbs on chip making equipment
Speaker 1: for fourteen nanometer or more advanced chips. And I want
Speaker 1: to get straight to you on whether that actually has
Speaker 1: any result or helps the US reach the result that
Speaker 1: it's aiming for, which is too It's stated aim to
Speaker 1: stop the Chinese government having access to technology that could
Speaker 1: be used for military uses. My understanding, and I know
Speaker 1: that you know this face inside and out, is that
Speaker 1: even with twenty eight nanometer, you can use some of
Speaker 1: those chips in military function. So does this actually get
Speaker 1: the result that the US is pushing for this coalition on.
Speaker 1: I mean, it depends on what you're doing. Of course,
Speaker 1: there are military applications that use older generation chips, and
Speaker 1: in fact, many of these applications use all kinds of
Speaker 1: chips from from many types of generations. Um By limiting
Speaker 1: the access to portune nanimators and below, though, you're going
Speaker 1: to limit access to anything that that's really higher performance,
Speaker 1: especially around the compute side of things. That's where you're
Speaker 1: going to see more of that advanced logic. And so
Speaker 1: this will prevent those sorts of chips from from this
Speaker 1: principle from getting into into military hands in China. Stacy meanwhile,
Speaker 1: China as well to dispute over the USX for controls
Speaker 1: with the w t O. Ultimately, how damaging is this
Speaker 1: to China, to Beijing and production chips, it's damaging. I
Speaker 1: mean it stops them. If it holds, it stops them
Speaker 1: from developing their own local ecosystem to design, manufacture and
Speaker 1: build leading edge semiconductors. And they are not prevented from
Speaker 1: developing the CAPE further developing the capability to build older
Speaker 1: generation parts. They can do that, but anything that is
Speaker 1: to be used for advanced computing UM, either from a
Speaker 1: design side or from a manufacturing side, we want to
Speaker 1: stop them, and that is something that's gonna be very difficult,
Speaker 1: if not impossible, for them to build up from a
Speaker 1: from a local standpoint. And now with these new blockades
Speaker 1: from the Netherlands and from Japan UM, this may finally
Speaker 1: close the window on it UM. If if if all
Speaker 1: of this kind of comes together with the US, there's
Speaker 1: not a whole lot that China can do from a
Speaker 1: local standpoint to build that stuff up on their own.
Speaker 1: The reason we're tracking these three companies stacy, three countries,
Speaker 1: sorryes because of the companies. You know that this small
Speaker 1: group of key players land Research, k l A A
Speaker 1: s mL. What is your assessment of what these cubs
Speaker 1: and the plan cubs are doing to impact those companies
Speaker 1: top and bottom lines? So it's important to remember like
Speaker 1: why are they doing this? Why do we care about
Speaker 1: the Netherlands? In Japan? So China already cannot make the
Speaker 1: most bleeding edge semiconductors That requires a tool set that
Speaker 1: has already been banned. UM. However, if you're going to
Speaker 1: sort of like a couple of generations back but still
Speaker 1: pretty advanced, like fourteen nanometers, they're all are There are
Speaker 1: alternatives to the U S companies. UM. You can get
Speaker 1: alternative to to what sm L cells from companies like
Speaker 1: Nikon in Japan. You can get alternatives to what companies
Speaker 1: like a MAP and land cell from companies like Tokyo Electron.
Speaker 1: So there are alternatives, and that's why it's important. I
Speaker 1: think you get everybody on the same page here. Um.
Speaker 1: In terms of the impact on the company's balancies, at
Speaker 1: least to the US ends, they've kind of sized this
Speaker 1: um and there's actually only a few of them that
Speaker 1: are impacted in video. On the ex side, although they've
Speaker 1: been able to develop alternative products that they're selling instead,
Speaker 1: and for now that's closing the gap. And on the
Speaker 1: semi cap side, there was some impact, Lamb said, I
Speaker 1: think it was somewhere between two and a half two
Speaker 1: and two and a half billion dollars a year. Aim
Speaker 1: At was similar, although they think that they can bring
Speaker 1: that down to more like the billion to a billion
Speaker 1: and a half. I think kind of kind of range. Um.
Speaker 1: It's also important to remember though from a from an
Speaker 1: equipment side, it may get less over time because you
Speaker 1: figure if the capacity is needed and it is not
Speaker 1: being built in China, eventually it may be built somewhere else.
Speaker 1: So from the equipment players, this may turn out to
Speaker 1: be somewhat temporary. We may find that all of this
Speaker 1: capacity is not permanently lost, but it will take some
Speaker 1: time and some rejiggering of the supply chains to to
Speaker 1: get it delta elsewhere. Or if it's not built in China.
Speaker 1: You're right about Land Research is an example. I think
Speaker 1: they did say it would impact to the tune of
Speaker 1: two half billion dollars. Caroline and I had Doug Passenger
Speaker 1: on the show actually a couple of weeks ago. He
Speaker 1: did points out that their workarounds essentially UM in terms
Speaker 1: of licensing or alternative products. Is China going to have
Speaker 1: success they're pushing those alternatives. You know that the sanctions
Speaker 1: themselves are fairly targeted about what is and what is
Speaker 1: not banned UM and and the issue is like some
Speaker 1: of the equipment I mean, I mean land Max catchers say,
Speaker 1: and I may be using an atcher or to make
Speaker 1: fortune animator chips and maybe using the same atuer to
Speaker 1: do twenty eight man in your chips. So there's a
Speaker 1: bit of a judgment call, I think in terms of
Speaker 1: how this stuff actually will get to get UM applied.
Speaker 1: But the general characteristics of what is banned and what
Speaker 1: is not are fairly got and dried. I mean, LAMB
Speaker 1: presumably can contrive to develop alternative products. Whether or not
Speaker 1: that's going to be a viable path that I don't know. UM.
Speaker 1: Some of the product companies, at least like an nvidio
Speaker 1: for example. It's not equipment, it's actual chips that have
Speaker 1: been done. They've actually been able to develop alternative products
Speaker 1: that come in sort of just below the threshold, and
Speaker 1: so right now they can sell those. The issue with
Speaker 1: that those of specials you're never going to rise. So
Speaker 1: the gap between what is legal and available to Southern
Speaker 1: China and what is available in the rest of the
Speaker 1: world over time is going to get bigger and bigger
Speaker 1: and bigger, and so eventually, you know, these sort of
Speaker 1: substances may may no longer be suitable for what they're replacing.
Speaker 1: Geer political macro to the micro of how effects all
Speaker 1: these companies you watch. We thank you always on these stories.
Speaker 1: Beency Managing director and senior analyst Stacy Baskin. Ticket Master
Speaker 1: apologizes again, this time involves bad funny. The Wall Street
Speaker 1: Journal reports hundreds of fans who bought tickets were turned
Speaker 1: away from the Artists concert in Mexico City on Friday
Speaker 1: because security officers fought their tickets were Carrol fake. This
Speaker 1: after ticket Master said it's system had been overwhelmed with
Speaker 1: an unprecedented number of people with fake tickets. Mexico's Office
Speaker 1: of the Federal Prosecutor for the Consumer said over the
Speaker 1: weekend that fans with legitimate tickets would be refunded, and
Speaker 1: then it asked ticket Master for a report explaining what
Speaker 1: had happened in a little bit of d h r
Speaker 1: V there, Yeah, a little bit. And I mean talking
Speaker 1: of apologies, I mean some people call some ma'men freed, right,
Speaker 1: he's still on his apology tour as many and dobing
Speaker 1: it at the moment. And it's across well media outlets
Speaker 1: such as ours, it's across social media, particularly such as Twitter,
Speaker 1: and it's actually a pretty heated spaces debate. And you
Speaker 1: and I ed we're testing out spaces as a way
Speaker 1: in which we want to conduct our conversations bringing our audience.
Speaker 1: But I think what stood out for me, and we're
Speaker 1: gonna discuss much more about whether or not sp is
Speaker 1: going to be at the Senate hearing or indeed the
Speaker 1: House hearing, but the fact that we are getting our
Speaker 1: news from Twitter spaces, that this idea of citizen journalism
Speaker 1: it's really coming to a fault, and in large part
Speaker 1: it's sort of spirited by crypto. Yeah, then you asked
Speaker 1: the question about SPF or why is he going to
Speaker 1: go or not go as a case byb before Congress
Speaker 1: and Clappers or Hill, when you can get all the
Speaker 1: information you need from him live on any given social
Speaker 1: media platform. I think that's the frustration of these lawmakers
Speaker 1: have as well. Yeah, and in some part though, I mean,
Speaker 1: I know people have been very critical of lawmakers when
Speaker 1: it comes to their real understanding acute technological understanding of
Speaker 1: social media, for example, And we've had Mark Zuckerberg and
Speaker 1: the likes dragged up in front of them. What about
Speaker 1: the will understanding in crypto two? And what about the
Speaker 1: people that are actually asking questions on these Twitter spaces.
Speaker 1: Welcome back to Bloomberg Technology. I'm Karine Hide in New
Speaker 1: York with Eddudlow in San Francisco, and there's a day
Speaker 1: where tech stalks we're actually pushing higher like that. That's ed.
Speaker 1: But let's talk about one name that's kind of languishing
Speaker 1: at the moment. Yeah, and it's Tesla. And it's really
Speaker 1: hard to understand why there's no specific news drive and
Speaker 1: not at least this Monday, the stock down more than
Speaker 1: six percent, trading at a three week low. Yes, there
Speaker 1: are a lot of headlines over the aggregate of a
Speaker 1: week right, we talked all about the pullbacking production in Shanghai.
Speaker 1: We talked about the Bloomberg News report that Elon Musk
Speaker 1: is considering switching some of the unsecured debt for margin
Speaker 1: loans in his financing of the Twitter deal, which would
Speaker 1: be backed by Tesla stock. That could be bringing some
Speaker 1: downward pressure. Then there's also Elon Musk himself, what he's
Speaker 1: saying on Twitter, his actions over the weekend, which I
Speaker 1: know we're going to go into. I just want to
Speaker 1: bring up this chart really quickly and get into some technicals.
Speaker 1: We don't often do this, but it's interesting. From its
Speaker 1: one high, there's this sort of clear downward channel trend
Speaker 1: for Tesla stock, where on multiple occasions it's tested key
Speaker 1: levels of support, key levels of resistance, but it's still
Speaker 1: continues this downward slide. And it's really hard to pick
Speaker 1: out why a lot of analysts don't necessarily agree on
Speaker 1: what is supporting or not supporting the stock as the case.
Speaker 1: Maybe you know, when we've reported about questions on demand
Speaker 1: from China, a lot of the Tesla retail investors and
Speaker 1: fans pushed back and say that can't be the case.
Speaker 1: But we've also reported that Tesla's cut prices. So question
Speaker 1: I have, and I know we're going to get into
Speaker 1: this with our guests in the moment, is how much
Speaker 1: is it just Elon Musk? Right? Is there a key
Speaker 1: man risk element? Is there a distraction element? Retail investors
Speaker 1: have been worried about that head and yeah, we want
Speaker 1: to dig into it. Want to dig into Elon Musk's management.
Speaker 1: Start a little bit more with someone who has built businesses,
Speaker 1: helped steer them on boards, and now is focused on
Speaker 1: behavioral change and sign them to about Arianna Hufington's She says,
Speaker 1: in fact that Elon Musk's management style there is an
Speaker 1: example of poor business strategy after he told employees to
Speaker 1: embrace hardcore work experience at Twitter. In an op ed
Speaker 1: for The Information, Havington writes that worker mental health is
Speaker 1: more important than ever as an essential part of business strategy,
Speaker 1: proving not only employee productivity, but also recruitment and retention.
Speaker 1: She labels Musk burnout denier. Of course, it's Huvington has
Speaker 1: focused on building healthier corporate environments through her Thrive Global campaign,
Speaker 1: In fact, signed by more than a hundred leading companies.
Speaker 1: Ariana Huvington's found a CEO Thrive Global is with us Now, Arianna,
Speaker 1: you write in an op ed and on LinkedIn that
Speaker 1: Mask is kind of a count a case study for leadership.
Speaker 1: Just talk us about why is such a powerful counter
Speaker 1: case study. But Caroline, at the very moment when you
Speaker 1: have major multinational companies like Fiser, Accentual, Sales Force, Walmart
Speaker 1: investing into their employees well being, mental health and seeing
Speaker 1: the business results in terms of recruitment, retention, productivity, we
Speaker 1: have Ellen Mask, whi is a genius when it comes
Speaker 1: to understanding energy in cars, clearly not understanding human energy
Speaker 1: and acting and expecting his employees to act as though
Speaker 1: and work fueled by burnout leads to pick performance and
Speaker 1: great business results, and we see that it doesn't. We
Speaker 1: see a chaotic process of decision making which clearly is
Speaker 1: not benefiting Twitter, and it's obviously not benefiting Tesla because
Speaker 1: to adds points about why is There'sla stock down? There's
Speaker 1: no question that Ellen Mask is the genius behind Tesla.
Speaker 1: Who when that genius is distracted by auctioning espresso machines
Speaker 1: from Twitter and moving beds into conference rooms and traveling
Speaker 1: fauci on Twitter, if our investor in Tesla. I would
Speaker 1: be worried about why isn't he focusing on Tesla, especially
Speaker 1: during a time of growing competition. What's interesting is this
Speaker 1: sort of hero status of sleeping in the office of
Speaker 1: I mean San Batman Freed, who were about to talk
Speaker 1: about much more in terms of the crypto world, falling
Speaker 1: asleep on bean bags and almost its being something that
Speaker 1: they wanted to show the vcs and the potential investors. Look,
Speaker 1: how then dynamic and and focuses he is the minute
Speaker 1: he wakes up and comes to give you a pitch.
Speaker 1: When can we stop having this sort of idea of
Speaker 1: cultish fanaticism around certain people and an ability to do
Speaker 1: it all at about to our sleep. Well, actually the
Speaker 1: majority of the world has opted. That's what it's so fascinating,
Speaker 1: especially because of the pandemic. We went from sleep deprivation, exhaustion,
Speaker 1: bre not fuel at work being a badge of honor
Speaker 1: and celebrated to the opposite. I mean, we have major
Speaker 1: CEOs now, including Satya Natella and Jeff Bezos. When he
Speaker 1: would say of Amazon talking about getting eight hours of sleep.
Speaker 1: We have major elite athletes like Lebron James and Tom
Speaker 1: Brady and Roger Federer talking about the importance of recovery
Speaker 1: four peak performance and all these people are very hard working, Carol,
Speaker 1: and I wanted to say, this is not about not
Speaker 1: working hard. This is about working smart and not having
Speaker 1: the diminishing returns we've all experienced when we were exhausted
Speaker 1: and burned out and running on empty And so the
Speaker 1: science and the data are so unequivocal. And that's what
Speaker 1: I find fascinating because I'm a big admirer of Villain Masks.
Speaker 1: He's unqu tronably a genius. So somebody who understands so
Speaker 1: perfectly energy renewable energy when it comes to cars is
Speaker 1: missing out, is actually using incredibly outdated modes of human
Speaker 1: energy when it comes to how he wants to run
Speaker 1: his businesses Ariana is Elon Must not just going back
Speaker 1: to his playbook. I want to bring up something you
Speaker 1: said in your op ed that he's showing the downsides
Speaker 1: of a model fueled by burnout and lack of sleep
Speaker 1: in his own decision making. And that made me think
Speaker 1: about the reporting from twenty eighteen when Must said he
Speaker 1: was sleeping on the production line with his engineers. You know,
Speaker 1: he does have a good track record of getting these
Speaker 1: companies be a Tesla, be it SpaceX through moments of duress.
Speaker 1: And you look at those two companies now, they are
Speaker 1: the clear market incumbents for both electric vehicles and commercial
Speaker 1: space launch. Absolutely, And I think two things have happened. One,
Speaker 1: the culture has moved on, and the pandemic has dramatically
Speaker 1: accelerated the cultural shift away from celebrating as Caroline was saying,
Speaker 1: burnout and wearing it as a badge of success. When
Speaker 1: Elon Musk asked his Twitter employees to commit to a hardcore,
Speaker 1: intense way of working, twelve hundred of them resigned. That
Speaker 1: would not have happened in What happened with the pandemic
Speaker 1: is that people looked at their lives and what do
Speaker 1: they value, And millions of people said, we value hard work,
Speaker 1: we value being completely engaged by our work, but we
Speaker 1: also don't want to be defined by our work, and
Speaker 1: we want to be able to also prioritize our own
Speaker 1: health and well being. So that's the moment we're in
Speaker 1: right now. And I have no doubt that Evillen mask
Speaker 1: started applying that scientific, clear data point around how to
Speaker 1: best work and achieve business results. He would be even
Speaker 1: more phenomenally amazing across all his companies. Arianna, you've been
Speaker 1: a board member and an executive, a leader at a
Speaker 1: number of companies technology sector in the media. Give me
Speaker 1: some concrete proposals that you think Elon Musk should put
Speaker 1: into play to fix the situation at Twitter, to improve
Speaker 1: performance of Tesla. What advice would you give him then
Speaker 1: to change what has been the case so far? Well,
Speaker 1: the first thing is along the lines of what we're discussing,
Speaker 1: kind of recognizing that he is going to make better
Speaker 1: decisions when he's not running on empty, when he's not
Speaker 1: exhausted to get a good night's sleep, in other words,
Speaker 1: get a good night's sleep, but recharge, work hard. He's
Speaker 1: always going to work hard. You work our Caroline works hard,
Speaker 1: and work hard. That's kind of table stakes. But we
Speaker 1: all know also that our work depends on judgment, and
Speaker 1: his work and his achievements and what he does for
Speaker 1: his companies depends on the quality of his decisions. And
Speaker 1: look at the quality of his decision has not been good.
Speaker 1: There have been so many reversals, and there's been kind
Speaker 1: of so much trolling of figures, the Twitter files and
Speaker 1: all that, and that's all a huge distraction, and that
Speaker 1: really is my big hop that he recognizes how much
Speaker 1: more effective he would be as a leader and how
Speaker 1: much better the business results would be if he looked
Speaker 1: at the science and data of pig performance. I mean,
Speaker 1: it's interesting, is it mentions that your expertise having been
Speaker 1: a board member of Uber, for example, and holding executives
Speaker 1: to account, making sure that there is the right governance
Speaker 1: in place. Many might look at two of these two
Speaker 1: leaders to single out Elon Masks. Some magnnfried that they
Speaker 1: either have people on their boards who perhaps yes people,
Speaker 1: or they don't really have much of a board at all.
Speaker 1: Do you think as we had to some sort of
Speaker 1: economic slowdown in the downtown, people will put more focus
Speaker 1: on corporate governance? Oh? Absolutely. I mean it's actually stunning
Speaker 1: that fd X did not have a board. Isn't it
Speaker 1: stunning that um, you know, major vcs invested in a
Speaker 1: company without a board? I mean, and of Adober Actually
Speaker 1: I saw firsthand the dangers are burnout and the decisions
Speaker 1: it led to that almost brought down the company. And
Speaker 1: we saw what happened with the FDx. So we have
Speaker 1: so many examples that is now time to stop celebrating
Speaker 1: an outmoderate way of working. Actually, Caroline, I've looked at
Speaker 1: where they started. It goes back to the Industrial Revolution
Speaker 1: when we're kind of really started revering machines. And the
Speaker 1: gold with machines is to minimize downtime. And that's the
Speaker 1: same goal with software. But for the human operating system,
Speaker 1: downtime is not a bug, it's a feature. And once
Speaker 1: we accept that, it changes the way we around businesses.
Speaker 1: I mean, gonn as we structure our Monday to Friday
Speaker 1: almost in a way that was when Henry Ford first
Speaker 1: was pioneering. It is in many ways back dated. I'm
Speaker 1: interested in your expertise, not only the common governance in
Speaker 1: your experience, but also as a woman who led the
Speaker 1: charge in a in a new form of media. You
Speaker 1: must be fascinated to watch what which was doing as
Speaker 1: a new form of media in a way citizen journalism,
Speaker 1: we all call it. How are you seeing? How do
Speaker 1: you think that landscape will evolve? Well, what is amazing
Speaker 1: now is that when I launched the Huffington Past two
Speaker 1: thousand five before you were born, Caroline, and you know,
Speaker 1: we the farcus and the vision was to democratize media
Speaker 1: Now we've seen, you know, the democratization of media, and
Speaker 1: there is a lot of great stuff about it, but
Speaker 1: I've also seen how people gathering around just what they believe.
Speaker 1: The hot danger of confirmation bias and only reading things
Speaker 1: that you agree with is a tremendous danger for democracy
Speaker 1: and for the truth. I still find Twitter to be
Speaker 1: a chaotic experience. You know, when I use the platform,
Speaker 1: I can't tell if it's improved or if it's got worse.
Speaker 1: It's certainly changing. What is your kind of view on
Speaker 1: the platform itself, the content that gets generated from it,
Speaker 1: the news that spreads through it, well, it's definitely changing,
Speaker 1: but and you don't know how far it will change.
Speaker 1: I think it's interesting that the Eleen mask still agrees
Speaker 1: that some people should be banned. It's just that he
Speaker 1: may think that people he would ran are different maybe
Speaker 1: than the people you would run or I would ran.
Speaker 1: But the principle that free speech doesn't mean that you
Speaker 1: can cry fire in a crowded theater is still prevailing,
Speaker 1: which is very interesting. All Right, Five Holdings founder and
Speaker 1: CEO Arena Huffington's thank you so much for sharing some
Speaker 1: of your time with Caroline, and I thank you coming up,
Speaker 1: we'll discuss what to watch for in Sam Bankman Freed's
Speaker 1: house hearing on Tuesday, that and much more. Of course,
Speaker 1: this is Bloomberg now. Of course, all eyes are still
Speaker 1: on the ft x is founder CEO Sam Bankman Freed,
Speaker 1: as he is expected to testify just virtually on Tuesday
Speaker 1: in front of the House Financial Services Committee over in
Speaker 1: Capitol Hill in peace to say our own Snai Bassa
Speaker 1: is headed to DC in real life right after the show.
Speaker 1: Thank you sticking around with us, and look, what are
Speaker 1: we anticipating for him to say that knew that we
Speaker 1: haven't already heard in some form of apology tour already.
Speaker 1: One thing that's interesting is you have the new CEO,
Speaker 1: John Ray speaking first, and then Sam Bateman Freed speaking
Speaker 1: after we hear according to sources, that will be in
Speaker 1: the afternoon, and so there's a bit of time in between.
Speaker 1: And to what extent does he start to answer some
Speaker 1: of the things we know that John Ray has not
Speaker 1: only put in the bankruptcy filing but also in his
Speaker 1: own testimony that is posted on the House Financial Services
Speaker 1: Committee website right now. Those allegations include combing going of
Speaker 1: funds as well as a failure to implement visually any
Speaker 1: systems or controls necessary for a company to be entrusted
Speaker 1: with other people's money. Now we know that tam bang
Speaker 1: Bean Freed has spoken a lot, including today on a
Speaker 1: Twitter spaces as well, and it's worth taking a look
Speaker 1: at what he said, and we can expect him to
Speaker 1: reiterate some of this tomorrow. And it's that right now
Speaker 1: he has no data about anything, so that all he
Speaker 1: can go off of is his memory. Remember, he's no
Speaker 1: longer the sea of the company, so there is certain
Speaker 1: amount of data that he's no longer proven to. But
Speaker 1: with that said, he was in charge from the beginning
Speaker 1: of f t X, and he also said that he
Speaker 1: bared responsibility for making sure he did the right things
Speaker 1: as a company, and he had a massive failure there
Speaker 1: no matter what. So we've known over time that he's
Speaker 1: taken some responsibility for some things. But at the end
Speaker 1: of the day, he has been a very very careful
Speaker 1: to really recuse himself and distance himself from the idea
Speaker 1: of ft X investing customer assets to his knowledge and
Speaker 1: commingling to his knowledge. You're right that we get a
Speaker 1: sort of Acts one and then Act two with John
Speaker 1: Ray the third, who's the current f t X CEO
Speaker 1: or administrator testifying. It's not as if though they're gonna
Speaker 1: bump into each other in the hallway and have an
Speaker 1: awkward hug or something. Is an SPF testifying from elsewhere?
Speaker 1: Uh yeah, not a lot of hugging these days, for sure. Ed. So, yes,
Speaker 1: he's testifying virtually, and remember he is testifying tomorrow, he's
Speaker 1: slated to testify. But we also have to talk about
Speaker 1: the idea here that the Senate has already said, and
Speaker 1: this is shared Brown and Pat Toomey had said in
Speaker 1: a statement that they are unwilling Sam big Befrieen's council
Speaker 1: has said that they're unwilling to accept service of a subpoena.
Speaker 1: And so why he's testifying at a one branch here
Speaker 1: and not the other is or one chamber rather than
Speaker 1: the other, is an interesting question. What he said earlier
Speaker 1: today on this podcast is that he wants to be
Speaker 1: able to make sure that he's able to give a
Speaker 1: full account rather than uh, you know, and incomplete account here.
Speaker 1: But you know, the point that we've been making all
Speaker 1: day here is why is he willing to give those
Speaker 1: in complete accounts? To the media, but not not the
Speaker 1: lawmakers here who are responsible for constituents and have also,
Speaker 1: by the way, in large part taken money from him
Speaker 1: in the form of political donations as well. Just talking
Speaker 1: about media, this piece run by the Australian Financial Review
Speaker 1: about an inn a circle powerhouse at FTC ft X
Speaker 1: the using I think it was telegram. Was it forms
Speaker 1: of me of signication? Signals similar idea? Cool? What did
Speaker 1: they call the name of the chat and how are
Speaker 1: we seeing him respond to it? Allegedly wire fraud was
Speaker 1: the name of the chat with his inner circle, and
Speaker 1: he did respond immediately on Twitter and said if this
Speaker 1: is true, then I wasn't a member of that inner circle.
Speaker 1: I'm quite sure it's just false. I've never heard of
Speaker 1: such a group. But it's something he may be asked
Speaker 1: about again in the series of many things he may
Speaker 1: be asked about. I would say also in the Unusual
Speaker 1: Whales podcast, the last question was kind of interesting. They
Speaker 1: asked him about that that the money he gave to
Speaker 1: the Block executive, and that is something that he did
Speaker 1: not answer and hopped off the podcast at that point.
Speaker 1: For so between the lawmakers that he had given money
Speaker 1: to as well as the media organizations, he might get
Speaker 1: a lot of questions about the type of influence he
Speaker 1: was trying to wield and why I know what the
Speaker 1: three of us are going to be doing on Tuesday
Speaker 1: Bloomberg Sinnali Basset, thank you very much, noise by the
Speaker 1: rich world were expecting. So today's going viral is Elon
Speaker 1: Musk's own appearance and a Dave Chappelle and Chris Rock
Speaker 1: show in San Francisco. Now the billionaire was brought on
Speaker 1: stage wearing an I Love Twitter t shirt to some
Speaker 1: pretty mixed applause. As you heard, they're actually it was
Speaker 1: booze that generally took over. Must didn't have a chance
Speaker 1: to speak. It was practically bood off stage, and the
Speaker 1: video was taken by someone who snuck in a camera
Speaker 1: to the event, posted on Twitter before the account suddenly
Speaker 1: got deleted because Mono reported Matt Novac posted it on YouTube,
Speaker 1: and in a tweet, Must wrote, technically years and ten
Speaker 1: percent booze except during quiet periods, but still that's a
Speaker 1: lot of booze, which is the first for me in
Speaker 1: real life. Frequently, in case our audience Karro couldn't hear,
Speaker 1: I just want to point out very quick that Dave
Speaker 1: Chappelle was saying that some of the people booing were
Speaker 1: perhaps those that Musk had fired from Twitter. That was
Speaker 1: what he was saying on stage. I mean, it's comedy
Speaker 1: is always very edgy and close to the line, isn't
Speaker 1: it end? But I have to say it felt like
Speaker 1: that perhaps has a bit of a come up and
Speaker 1: spree lunch. Yeah. I mean it's hard to know what
Speaker 1: to say is funny or not funny, but clearly there
Speaker 1: was a strong reaction there. Well, that does it for
Speaker 1: this addition of Bloomberg Technology, tell us your thoughts on Twitter.
Speaker 1: But tomorrow we have Parallel Alter Network CEO. This has
Speaker 1: boom there