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Speaker 1: Welcome to the Bloomberg Penel Podcast. I'm Paul swing you

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Speaker 1: along with my co host Lisa Brahma Waits. Each day

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Speaker 1: we bring you the most noteworthy and useful interviews for

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Speaker 1: you and your money. Whether at the grocery store or

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Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple

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Speaker 1: podcast or wherever you listen to podcasts, as well as

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Speaker 1: at Bloomberg dot com. Paul, I am so excited we

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Speaker 1: get to speak with the CFO of one of the

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Speaker 1: hottest initial public offerings over the past few years, if

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Speaker 1: not the hottest of public offering so far this year

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Speaker 1: based on how much the price popped. We're talking, of course,

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Speaker 1: about Zoom Video Communications. Kelly Stuckelberg, the chief financial officer

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Speaker 1: of the company, joins us right now from San Jose, California. Kelly,

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Speaker 1: congratulations an initial public offering that by most measures was

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Speaker 1: absolutely a blowout success. Thank you. Good morning, Good morning.

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Speaker 1: So I want to talk about profitability because Zoom was

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Speaker 1: one of the few unicorns that is coming to market,

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Speaker 1: is an I p O and actually making money. How

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Speaker 1: important is that to you to continue to make money

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Speaker 1: even as you invest in the business. Well, we're really

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Speaker 1: focused on continuing to grow and indust for growth and

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Speaker 1: taking market share. That is our primary objective. And yet

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Speaker 1: we do that at the company with discipline and we're

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Speaker 1: very thoughtful about it, so ensuring that the investments we're

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Speaker 1: making in growth are giving us a proper returns. That's

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Speaker 1: how we think about it. We're we're very frugal in

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Speaker 1: the way that we approach it in general. So, Kelly,

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Speaker 1: can you give us a sense of how you think

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Speaker 1: about your business. I'm guessing it's more than simply video conferencing.

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Speaker 1: So it gives a sense of what you view as

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Speaker 1: your market opportunity that you your company goes after. Yeah,

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Speaker 1: thank you. So we really view that video is the

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Speaker 1: future of communications. Video is the new voice, is how

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Speaker 1: we think about it. So we think that you it's

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Speaker 1: going to become ubiquitous in the way that people communicate,

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Speaker 1: and we're really changing the way that people use video

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Speaker 1: every day. So, for example, when we did our road

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Speaker 1: so a couple of weeks ago, Eric zoomed into all

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Speaker 1: of the meetings. So I traveled, but he dooms. So

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Speaker 1: I think this is the first time that a CEO

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Speaker 1: has not traveled in the way and that it was

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Speaker 1: really powerful. For example, we even we had a lunch

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Speaker 1: in New York for two hundred people and Eric zoomed.

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Speaker 1: He's done a huge screen there. Everybody could communicate with it.

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Speaker 1: It was amazing. How much does your business model rely

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Speaker 1: on an infrastructure upgrade to five G because I know

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Speaker 1: people have been talking about how that will be a

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Speaker 1: game changer in terms of how people interface with one

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Speaker 1: another via video. So how are you sort of thinking

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Speaker 1: about that evolution? Yeah, so we have our own data

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Speaker 1: set of strategy and our platform which allows people to

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Speaker 1: have a really high quality streaming video experience today, whatever

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Speaker 1: networks that they're working on. That's one of the really

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Speaker 1: unique things about Zoom. It's adaptable to people's device and

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Speaker 1: network capabilities. So when we think about five G, we

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Speaker 1: just think that this is bringing more opportunity earners for

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Speaker 1: people to use video in other places on the go.

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Speaker 1: We're not reliant on it though, We just think it's

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Speaker 1: going to extend the opportunity for us. Kelly, give us

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Speaker 1: a sense of the competitive landscape that Zoom participates in. Yeah,

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Speaker 1: there are lots of legacy providers out there that we

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Speaker 1: have seen. I think the thing to remember is that

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Speaker 1: what's unique about Zoom. It was built from the ground

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Speaker 1: up to the video first. So everything about our product,

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Speaker 1: our user interfaced, our technology, our data center approach is

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Speaker 1: geared towards being video first. And a lot of the

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Speaker 1: legacy players that are out there today they were built

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Speaker 1: for another purpose. They were built for screen steering, or

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Speaker 1: they were built to be an audio first and video

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Speaker 1: came later. And just think about it. You need a

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Speaker 1: very different approach to have a high quality, real time

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Speaker 1: streaming video and that's really what makes you so unique

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Speaker 1: and so much better than some of the legacy providers.

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Speaker 1: One concern that I'm sure a lot of companies have

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Speaker 1: is privacy because if they are conducting meetings, uh and

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Speaker 1: chats through the Zoom technology and that could potentially expose

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Speaker 1: private information, how do you how do you counter those concerns?

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Speaker 1: Of course, security and privacy is at the forefront of

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Speaker 1: everything that we do. We have a c I O

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Speaker 1: and a show that think about this every single day,

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Speaker 1: and the product itself was architected to ensure that. Meaning data,

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Speaker 1: it's your record, meaning data, you have the opportunity to

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Speaker 1: either record it into your own for example, on your

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Speaker 1: own premises or in our cloud, which is highly secure

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Speaker 1: because it's our own private cloud data center that we're running. So, Kelly,

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Speaker 1: just give us a sense of kind of what are

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Speaker 1: the growth drivers for your company. Obviously the company has

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Speaker 1: a tremendous valuation in the public marketplace officely, the market

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Speaker 1: is certainly expecting strong growth. What are the growth drivers? Yeah,

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Speaker 1: so there are really three key growth initiatives were focused

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Speaker 1: on this year. It's continuing to move up market and

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Speaker 1: expanding into the enterprise, which is a key opportunity for us.

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Speaker 1: It is continuing to grow international. We have a flash year,

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Speaker 1: we had a little less than our revenue came from

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Speaker 1: international markets, and so there's tremendous opportunity head there as well.

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Speaker 1: And then it's continued growth in zoom Phone, which was

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Speaker 1: a new product that became g A in January. We're

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Speaker 1: really excited about it extends our product suite from you

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Speaker 1: know video and now into audio zoom phone as well.

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Speaker 1: What's the barrier to entry at this point, given the

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Speaker 1: fact that big companies are having their own in house

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Speaker 1: kinds of operations where they can interface with each other

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Speaker 1: via video. Yeah, I think it's it's one thing to

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Speaker 1: do video, it's another thing to do video in an

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Speaker 1: enterprise grade level and to do it really with reliability

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Speaker 1: and quality every single time that somebody joins. The unite

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Speaker 1: thing about Zoom and because of the way that our

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Speaker 1: architection was built is you can have up to packet loss,

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Speaker 1: so up to forty percent data loss and still have

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Speaker 1: a great experience. Other providers we see you start to

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Speaker 1: have a degraded experience when you're like at fifteen percent

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Speaker 1: packet loss. So that really speaks to the investment in

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Speaker 1: the in the infrastructure and the architecture that we have

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Speaker 1: built and the adaptability of our platform to meet the

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Speaker 1: needs of people that are again on the go using

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Speaker 1: different devices in different locations. Kelly, is is M and

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Speaker 1: A a part of Zoom's growth strategy going forward. You know,

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Speaker 1: it hasn't been historically, but it's certainly something that we

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Speaker 1: will continue to look for. If we could find a

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Speaker 1: great company that could be additive either from a culture

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Speaker 1: and a UM talent perspective and or technology perspective, we

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Speaker 1: would certainly be open to that and we're always looking

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Speaker 1: for great opportunities in that area. One thing that I'm

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Speaker 1: curious about, just to quickly hear from you, you Kelly,

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Speaker 1: as we see this roster of I p O is

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Speaker 1: line up for later this year. What sort of the

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Speaker 1: takeaway that you learn from the whole I p O

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Speaker 1: process right now as a unicorn that you know there

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Speaker 1: are many great companies you ship coming to market, and

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Speaker 1: there's really strong investor demand for great companies and great performance,

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Speaker 1: and you know, we're really focused on continuing to executecause

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Speaker 1: that's what we can um we can manage, and we

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Speaker 1: can control. And I think that's what I learned. That's

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Speaker 1: what investors want to hear is the confidence in the

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Speaker 1: management team that they're going to continue to focus on

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Speaker 1: keeping the investors um I think interests at heart while

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Speaker 1: continuing to grow into it thoughtfully. Kelly, just real quickly,

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Speaker 1: what's the biggest risk to your growth story? It's it's

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Speaker 1: our own execution, right. It really comes down to our

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Speaker 1: team and our ability to continue to execute. This is

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Speaker 1: what we focus on every single day when we get

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Speaker 1: up and come to work. Kelly Stuckelberg, thank you very much.

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Speaker 1: Kelly as a chief financial officer from Zoom Video Communications

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Speaker 1: joining us on the phone from San Jose. Right now,

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Speaker 1: we are hitting new record highs on both the SMP

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Speaker 1: and the Nasdak in the United States, which has been

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Speaker 1: the sweet spot globally in terms of economic growth as

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Speaker 1: well as asset flow at least in joining us now

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Speaker 1: to talk about whether that can continue is Clive Gilmour.

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Speaker 1: He's CEO and Group Chief Investment Officer at Mondrean Investment Partners,

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Speaker 1: over seeing about fifty billion dollars from London usually, but

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Speaker 1: he is joining us here in our Bloombergada Interactive Brokers Studios. Clive,

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Speaker 1: I do want to ask, do you think from your

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Speaker 1: vantage point that the US is still the place to

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Speaker 1: go or that this rally is basically at its peak

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Speaker 1: and is going to peter out. Yeah, it's an interesting

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Speaker 1: question because I've been reflecting recently on the different forms

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Speaker 1: of capitalism that exists in the United States and elsewhere.

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Speaker 1: In the United States, the return to shareholder is sacrosanct.

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Speaker 1: In Japan, In contental Europe in particular, they want to

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Speaker 1: find a better balance between labor and capital. The argument

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Speaker 1: they use is that's a better long term methodology, whereas

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Speaker 1: the US one is used for short term gain. So

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Speaker 1: the question is, are we still on a run of

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Speaker 1: backing economic elements like low interest rates that support that

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Speaker 1: short termism, Where are we going to see a gradual

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Speaker 1: shift to the longer term? International markets trade at a discount,

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Speaker 1: a significant discount in some cases, so perhaps we're at

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Speaker 1: the pitch point where people should consider investing more internationally

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Speaker 1: than in the United States alone. Well, it's interesting, I

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Speaker 1: was I was looking at just the UAR today performance

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Speaker 1: from you know, the STARKS or the CAC or the

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Speaker 1: Dacks index of Europe. The performance there is essentially on

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Speaker 1: par with the SMP. So we're seeing European equities, so

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Speaker 1: it doesn't feel like there's quote unquote value in European markets.

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Speaker 1: How do you view some of the developed European markets? Yeah, well,

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Speaker 1: in answer to the first question, you know, I talked

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Speaker 1: about that different form of capitalism. One way that reflects

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Speaker 1: itself is in sectorial splits between markets on a global basis.

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Speaker 1: So the US has a significantly larger piece in technology,

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Speaker 1: and it's that technology part of the market that's driven

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Speaker 1: to a great extent the u s higher through the

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Speaker 1: NASDAC before outperforming the SMP significantly. If you look at

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Speaker 1: the rest of the world, why has there been an

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Speaker 1: adjustment just like there has been of the SMP. It's

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Speaker 1: merely an adjustment back to an interest rate policy that

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Speaker 1: seems to be underwriting stock markets. In other words, moved

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Speaker 1: back towards either zero or negative real interest rates, which

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Speaker 1: we personally believe is unsustainable on a long term basis.

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Speaker 1: What you're saying is actually fascinating, which is, at a

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Speaker 1: certain point investors aren't going to just look for people

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Speaker 1: for for companies to give them as much money as

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Speaker 1: possible in the form of shared by backs and dividends,

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Speaker 1: and they're actually going to start looking at sort of

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Speaker 1: the sort of social implications and the investments. And we

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Speaker 1: have actually started to see a shift in that way

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Speaker 1: in the United States. What makes you think that that

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Speaker 1: shift will lead investors overseas well? That argument about sustainability

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Speaker 1: is obviously a really really strong on and the way

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Speaker 1: we analyze equities at Mandron is to use a dividend

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Speaker 1: discount model, so that takes the dividends today and looks

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Speaker 1: like the spected future growth in those dividends. So sustainability

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Speaker 1: is a key element of what we do, especially as

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Speaker 1: you look out after year three for example. So no

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Speaker 1: one knows when the exact moment will be when that

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Speaker 1: will change. All we can say is the skew of

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Speaker 1: outcomes is increasingly on the upside for investing outside the

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Speaker 1: United States relative to in the United States. And indeed,

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Speaker 1: we do three DDM models, one on a central case,

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Speaker 1: one on a worse, one on a best and even

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Speaker 1: though central case real returns are lower because markets have

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Speaker 1: gone up, the skew is still positive, whereas in the

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Speaker 1: US increasingly that skew is looking negative. You mentioned Japan earlier.

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Speaker 1: What is your view on Japan given that they've, you know,

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Speaker 1: the stagnation that economies done with over the last decade

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Speaker 1: or so. Yeah, that's a good question. I started my

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Speaker 1: much from about onwards, Japan was a no go area.

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Speaker 1: And it was a no go area because the market

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Speaker 1: had become inflated, but more pertinently, perhaps because companies there

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Speaker 1: gave little regard to shareholders and certainly had alarmingly low

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Speaker 1: returnal equity. For example, what's happened over the last thirty

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Speaker 1: had died in the wall approach. In other words, it

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Speaker 1: doesn't wish to change that much. However, in the recent

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Speaker 1: past they have begun to embrace some of Arebe's reforms

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Speaker 1: in the extent that they are now looking at trying

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Speaker 1: to improve r o E and also look at dividends

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Speaker 1: as a way forward for shareholders. And that's crucial because remember,

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Speaker 1: the Japanese have a rapidly aging population with incredibly low

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Speaker 1: bond yields and a demand for income from that aging population.

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Speaker 1: Dividends from equities are becoming an increasingly large part of that.

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Speaker 1: We're still actually underweight in Japan for choice, but only

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Speaker 1: just and that is against a position of being significantly

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Speaker 1: underweight for most of the last twenty years. Clud Gilmore,

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Speaker 1: thank you so much. Clud Gilmore as a CEO and

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Speaker 1: Group c i O of Montreal Investment Partners joining us

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Speaker 1: today in New York on our Bloomberg Interactive Brooker Studio.

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Speaker 1: Right now, I think we do have Bruce Levine from

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Speaker 1: the Center for Soulomnia Therapies at University of Pennsylvania. Just

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Speaker 1: let's get us started with a sense of what your

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Speaker 1: team is working on. In Lehman's terms, but we're working

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Speaker 1: on is using the patient's own immune system and retraining

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Speaker 1: it to recognize cancer. Now, this is uh uh not

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Speaker 1: intuitive because the immune system is designed to recognize foreign invaders,

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Speaker 1: and cancer is derived from your own cells, So what

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Speaker 1: we're doing is putting in a genetically engineered receptor that

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Speaker 1: makes your immune systems recognized cancer. So PUS kind of

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Speaker 1: give us a sense of kind of where you are

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Speaker 1: in your research, where is it mat and a kind

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Speaker 1: of go to market type scenario, where are you and

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Speaker 1: your team right now? Well, we treated three patients in

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Speaker 1: ten that had between three and a half and eight

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Speaker 1: pounds of leukemia destroy These are patients that had no

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Speaker 1: other options. Based on those reports, we signed an alliance

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Speaker 1: with twenty in twelve with Novardes to develop this technology

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Speaker 1: and commercialize at which they have. They conducted to global

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Speaker 1: pivotal clinical trials, one in pediatric leukemia and other. Amphoma

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Speaker 1: received FDA approval August for pediatric leukemia and May first

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Speaker 1: for lamphoma, so this was the first FDA approve TEIN therapy.

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Speaker 1: There is another product on the market for lamphoma that's

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Speaker 1: Gilead kites Yes Carda. At PEN, we're focused on the

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Speaker 1: next generation of these therapies, making them smarter going into

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Speaker 1: solid cancers, and we have a PEN spin out community

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Speaker 1: that is developing some of these next generation therapies versus

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Speaker 1: is incredibly exciting for me to hear what you're working

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Speaker 1: on because there have been so many UH cancers that

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Speaker 1: have killed people who we all have been close to

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Speaker 1: sort of think that there could be some kind of

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Speaker 1: remedy new remedy is very exciting. I'm just wondering about

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Speaker 1: the sort of standardization of some of these cart c

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Speaker 1: UH cart cell therapies, just considering the fact that you

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Speaker 1: have to use people's own cells, they tend to be

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Speaker 1: much more expensive, and I'm just wondering what the focus

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Speaker 1: is and trying to sort of streamline ms they can

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Speaker 1: be used in a more broad based level. Yeah, so

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Speaker 1: the challenge here is the raw material is the patient's

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Speaker 1: own cells, and it varies every time. As far as standardization,

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Speaker 1: we are making improvements in the manufacturing, implementing automation, making

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Speaker 1: the process shorter, but we will go from what is

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Speaker 1: now a three week turned around to maybe a two

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Speaker 1: week or shorter turnaround. Now, this does have implications and scale.

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Speaker 1: It's not really scaling up. You can't scale to a

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Speaker 1: five thousand leader or a ten thousand leader a lot,

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Speaker 1: but we can improve what we're doing, and I would

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Speaker 1: say I think of this as a remote organ transplant

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Speaker 1: or remote stem cell transplant rather than something you're going

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Speaker 1: to have on a on a shelf. I can speak

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Speaker 1: to you about the so called off the shelf cell therapies,

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Speaker 1: and there there is justification for that because there are

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Speaker 1: patients from whom we don't get enough food cells to

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Speaker 1: generate a product. But the issue for these is just

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Speaker 1: like I can't give you my own liver without you

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Speaker 1: being on lifelong I mean a suppression. Those of the

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Speaker 1: show therapies don't last very long and patients have to

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Speaker 1: transition to another definitive therapy. Bruce Levine, thank you so much.

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Speaker 1: Bruce Levine is a Barbara and Edward nett Are Professor

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Speaker 1: in gene a cancer gene therapy. He's at the Center

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Speaker 1: for Cellular Immunotherapy is at the University of Pennsylvania. Is

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Speaker 1: also a co founder of Community, a pen spin out

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Speaker 1: working with nove artists. Let's switch gears right now to

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Speaker 1: the home sharing business. It was reported today that Marryott

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Speaker 1: International is expanding its home sharing business to the US

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Speaker 1: as Airbnb diversifies its own business ahead of an expected

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Speaker 1: initial public offering. To get us up to speed on

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Speaker 1: this store. Are we welcome Patrick Clark Pat his real

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Speaker 1: estate a reporter for Bloomberg News. He joins us on

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Speaker 1: our Bloomberg Interactive Broker studio. Pat, thanks so much for

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Speaker 1: being with us. So this is so Marriott already has

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Speaker 1: a home sharing business, but they're just they're bringing it

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Speaker 1: to the US. Is that the news here? That's right?

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Speaker 1: What they've called they've called in the past home sharing

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Speaker 1: pilot started in London. I think in May they they

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Speaker 1: proclaimed that a success and expanded into Paris, Rome and Lisbon.

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Speaker 1: Now they're bringing it to the U S and they're

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Speaker 1: also expanding it outside the US. I think it's gonna

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Speaker 1: be a hundred destinations around the world, many of them

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Speaker 1: real sort of tourism spots um Bar harbor in the US,

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Speaker 1: like Tahoe. I think I saw sat Bart's um the

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Speaker 1: Amalfi coast of Italy. So those types is pretty good.

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Speaker 1: It sounds pretty good to me too. I will say, UM,

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Speaker 1: I have to wonder. I'm trying to understand they're trying

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Speaker 1: to counter the air and b nb's of the world.

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Speaker 1: That's sort of how this was framed. You're kind of

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Speaker 1: shaking your head a little bit, and I'm wondering is

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Speaker 1: it really because home rental that kind of concept is

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Speaker 1: evocative of a different, different kind of model than airbnb

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Speaker 1: s Perhaps all of these models are converging on themselves.

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Speaker 1: I think, I mean, the Marriott will do something that

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Speaker 1: is doing something that looks like home sharing. Um, I

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Speaker 1: don't know that they're doing it for the reason why

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Speaker 1: people use a homeshare to find a place to stay

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Speaker 1: in New York, right, which is often because they want

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Speaker 1: um a cheaper maybe also a slightly different version of

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Speaker 1: what they would get um in a hotel in in

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Speaker 1: You know, I stay in my rent homes with my

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Speaker 1: family and we go on vacation because we want the

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Speaker 1: space and we want you know, separate bedrooms in the

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Speaker 1: kitchen and all of that, and we sometimes do it

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Speaker 1: through Airbnb or v R B O. But but um, yeah,

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Speaker 1: I think you're as you said, that's sort of a

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Speaker 1: home rental business, which makes sense as an extension of

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Speaker 1: of sort of Marriotts bread and butter. Right, If I'm

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Speaker 1: a Marriott Loyalty Program member and I travel for business

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Speaker 1: all all the time, and I accrue points, and now

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Speaker 1: I want to go on vacation with my family, and

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Speaker 1: what I want is a home rental, not a not

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Speaker 1: a suite in a hotel somewhere. It makes sense for

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Speaker 1: Marriott to be able to offer me that home rental. Now,

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Speaker 1: is that direct competition with Airbnb? You know? Way it

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Speaker 1: is because I would um, otherwise go and book that

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Speaker 1: home on airbat me instead of uh, you know, instead

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Speaker 1: of staying inside this sort of Marriot loyalty ecosystem. Now,

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Speaker 1: um does Airbnb? You know? The amount of crossover is

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Speaker 1: sort of a point of contention. I would say that

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Speaker 1: the hotel companies have largely said many of them have

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Speaker 1: said it's a different guest than the one that that

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Speaker 1: were servant. So what has been just overall the Airbnb

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Speaker 1: impact on the hotel business? Yeah, I mean there's you know,

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Speaker 1: I think Airbnb says they have six million listings around

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Speaker 1: the world, so that's just a lot of supply. Um.

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Speaker 1: I think it depends on on the place there are.

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Speaker 1: You know some places you could say there are. I

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Speaker 1: mean in New York you have thousands, tens of thousands

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Speaker 1: of more sort of places to stay than you would

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Speaker 1: pre Airbnb. Uh, whether or not that has had an

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Speaker 1: impact on how much a hotel in New York can

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Speaker 1: get for its room. I guess it's a little bit murky.

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Speaker 1: You would think it would have to have some impact. Uh,

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Speaker 1: there's also seems to be, you know, virtually limitless demand

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Speaker 1: for hotel rooms in Manhattan. They add, uh, you know,

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Speaker 1: they had thousands of hotel rooms in New York every

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Speaker 1: year and without seemingly a large impact on occupancy rates.

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Speaker 1: So um, you know it's it's it's unclear who's threatening here?

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Speaker 1: Who here? Right? Is Is Mary going to take a

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Speaker 1: bite out of Airbnb's business with this new offering? I

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Speaker 1: couldn't doubt it is is are they defending themselves? Do they?

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Speaker 1: Are they worried about losing business? Pat Clark, thank you

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Speaker 1: so much for that. Pat Clark is a realistate reporter

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Speaker 1: here at Bloomberg News. Thanks for listening to the Bloomberg

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Speaker 1: P and L podcast. You can subscribe and listen to

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Speaker 1: interviews at Apple Podcasts or whatever podcast platform you prefer.

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Speaker 1: M Paul Sweeney, I'm on Twitter at pt Sweeney. I'm

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Speaker 1: Lisa abram Woyit's I'm on Twitter at Lisa abram Woits

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Speaker 1: one before the podcast. You can always catch us worldwide

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Speaker 1: on'm Bloomberg Radio.