WEBVTT - Zoom CFO: Primary Goal Post-IPO Is Organic Growth

0:00:02.640 --> 0:00:05.320
<v Speaker 1>Welcome to the Bloomberg Penel Podcast. I'm Paul swing you

0:00:05.360 --> 0:00:07.680
<v Speaker 1>along with my co host Lisa Brahma Waits. Each day

0:00:07.720 --> 0:00:10.240
<v Speaker 1>we bring you the most noteworthy and useful interviews for

0:00:10.280 --> 0:00:12.520
<v Speaker 1>you and your money. Whether at the grocery store or

0:00:12.560 --> 0:00:15.480
<v Speaker 1>the trading floor. Find a Bloomberg Penl podcast on Apple

0:00:15.520 --> 0:00:17.960
<v Speaker 1>podcast or wherever you listen to podcasts, as well as

0:00:17.960 --> 0:00:23.840
<v Speaker 1>at Bloomberg dot com. Paul, I am so excited we

0:00:23.840 --> 0:00:27.080
<v Speaker 1>get to speak with the CFO of one of the

0:00:27.120 --> 0:00:29.960
<v Speaker 1>hottest initial public offerings over the past few years, if

0:00:30.000 --> 0:00:33.080
<v Speaker 1>not the hottest of public offering so far this year

0:00:33.120 --> 0:00:36.200
<v Speaker 1>based on how much the price popped. We're talking, of course,

0:00:36.360 --> 0:00:41.040
<v Speaker 1>about Zoom Video Communications. Kelly Stuckelberg, the chief financial officer

0:00:41.120 --> 0:00:45.000
<v Speaker 1>of the company, joins us right now from San Jose, California. Kelly,

0:00:45.040 --> 0:00:49.600
<v Speaker 1>congratulations an initial public offering that by most measures was

0:00:49.640 --> 0:00:53.600
<v Speaker 1>absolutely a blowout success. Thank you. Good morning, Good morning.

0:00:53.760 --> 0:00:56.440
<v Speaker 1>So I want to talk about profitability because Zoom was

0:00:56.600 --> 0:00:59.720
<v Speaker 1>one of the few unicorns that is coming to market,

0:01:00.080 --> 0:01:03.720
<v Speaker 1>is an I p O and actually making money. How

0:01:03.760 --> 0:01:06.600
<v Speaker 1>important is that to you to continue to make money

0:01:06.640 --> 0:01:10.360
<v Speaker 1>even as you invest in the business. Well, we're really

0:01:10.400 --> 0:01:13.440
<v Speaker 1>focused on continuing to grow and indust for growth and

0:01:13.480 --> 0:01:17.560
<v Speaker 1>taking market share. That is our primary objective. And yet

0:01:17.600 --> 0:01:20.319
<v Speaker 1>we do that at the company with discipline and we're

0:01:20.440 --> 0:01:23.080
<v Speaker 1>very thoughtful about it, so ensuring that the investments we're

0:01:23.120 --> 0:01:27.000
<v Speaker 1>making in growth are giving us a proper returns. That's

0:01:27.000 --> 0:01:29.440
<v Speaker 1>how we think about it. We're we're very frugal in

0:01:29.480 --> 0:01:32.280
<v Speaker 1>the way that we approach it in general. So, Kelly,

0:01:32.280 --> 0:01:33.800
<v Speaker 1>can you give us a sense of how you think

0:01:33.800 --> 0:01:37.560
<v Speaker 1>about your business. I'm guessing it's more than simply video conferencing.

0:01:37.760 --> 0:01:39.920
<v Speaker 1>So it gives a sense of what you view as

0:01:39.959 --> 0:01:43.480
<v Speaker 1>your market opportunity that you your company goes after. Yeah,

0:01:43.520 --> 0:01:46.959
<v Speaker 1>thank you. So we really view that video is the

0:01:47.000 --> 0:01:50.480
<v Speaker 1>future of communications. Video is the new voice, is how

0:01:50.520 --> 0:01:53.440
<v Speaker 1>we think about it. So we think that you it's

0:01:53.480 --> 0:01:56.000
<v Speaker 1>going to become ubiquitous in the way that people communicate,

0:01:56.040 --> 0:01:58.760
<v Speaker 1>and we're really changing the way that people use video

0:01:58.840 --> 0:02:02.120
<v Speaker 1>every day. So, for example, when we did our road

0:02:02.200 --> 0:02:05.640
<v Speaker 1>so a couple of weeks ago, Eric zoomed into all

0:02:05.680 --> 0:02:08.160
<v Speaker 1>of the meetings. So I traveled, but he dooms. So

0:02:08.200 --> 0:02:10.399
<v Speaker 1>I think this is the first time that a CEO

0:02:10.520 --> 0:02:12.480
<v Speaker 1>has not traveled in the way and that it was

0:02:12.720 --> 0:02:16.120
<v Speaker 1>really powerful. For example, we even we had a lunch

0:02:16.240 --> 0:02:18.640
<v Speaker 1>in New York for two hundred people and Eric zoomed.

0:02:18.680 --> 0:02:21.320
<v Speaker 1>He's done a huge screen there. Everybody could communicate with it.

0:02:21.320 --> 0:02:24.280
<v Speaker 1>It was amazing. How much does your business model rely

0:02:24.680 --> 0:02:28.240
<v Speaker 1>on an infrastructure upgrade to five G because I know

0:02:28.280 --> 0:02:30.600
<v Speaker 1>people have been talking about how that will be a

0:02:30.680 --> 0:02:34.080
<v Speaker 1>game changer in terms of how people interface with one

0:02:34.080 --> 0:02:37.480
<v Speaker 1>another via video. So how are you sort of thinking

0:02:37.520 --> 0:02:41.200
<v Speaker 1>about that evolution? Yeah, so we have our own data

0:02:41.240 --> 0:02:44.960
<v Speaker 1>set of strategy and our platform which allows people to

0:02:45.040 --> 0:02:49.120
<v Speaker 1>have a really high quality streaming video experience today, whatever

0:02:49.160 --> 0:02:51.080
<v Speaker 1>networks that they're working on. That's one of the really

0:02:51.160 --> 0:02:55.000
<v Speaker 1>unique things about Zoom. It's adaptable to people's device and

0:02:55.040 --> 0:02:58.040
<v Speaker 1>network capabilities. So when we think about five G, we

0:02:58.120 --> 0:03:00.480
<v Speaker 1>just think that this is bringing more opportunity earners for

0:03:00.520 --> 0:03:04.040
<v Speaker 1>people to use video in other places on the go.

0:03:05.040 --> 0:03:07.079
<v Speaker 1>We're not reliant on it though, We just think it's

0:03:07.080 --> 0:03:09.920
<v Speaker 1>going to extend the opportunity for us. Kelly, give us

0:03:09.919 --> 0:03:15.480
<v Speaker 1>a sense of the competitive landscape that Zoom participates in. Yeah,

0:03:15.520 --> 0:03:18.600
<v Speaker 1>there are lots of legacy providers out there that we

0:03:18.680 --> 0:03:21.519
<v Speaker 1>have seen. I think the thing to remember is that

0:03:21.919 --> 0:03:24.200
<v Speaker 1>what's unique about Zoom. It was built from the ground

0:03:24.320 --> 0:03:26.880
<v Speaker 1>up to the video first. So everything about our product,

0:03:26.960 --> 0:03:31.200
<v Speaker 1>our user interfaced, our technology, our data center approach is

0:03:31.320 --> 0:03:33.639
<v Speaker 1>geared towards being video first. And a lot of the

0:03:33.720 --> 0:03:36.400
<v Speaker 1>legacy players that are out there today they were built

0:03:36.440 --> 0:03:39.280
<v Speaker 1>for another purpose. They were built for screen steering, or

0:03:39.320 --> 0:03:42.040
<v Speaker 1>they were built to be an audio first and video

0:03:42.200 --> 0:03:44.800
<v Speaker 1>came later. And just think about it. You need a

0:03:44.920 --> 0:03:47.880
<v Speaker 1>very different approach to have a high quality, real time

0:03:47.920 --> 0:03:51.560
<v Speaker 1>streaming video and that's really what makes you so unique

0:03:51.600 --> 0:03:53.880
<v Speaker 1>and so much better than some of the legacy providers.

0:03:54.080 --> 0:03:56.040
<v Speaker 1>One concern that I'm sure a lot of companies have

0:03:56.480 --> 0:04:00.120
<v Speaker 1>is privacy because if they are conducting meetings, uh and

0:04:00.240 --> 0:04:03.800
<v Speaker 1>chats through the Zoom technology and that could potentially expose

0:04:03.880 --> 0:04:06.640
<v Speaker 1>private information, how do you how do you counter those concerns?

0:04:07.600 --> 0:04:11.280
<v Speaker 1>Of course, security and privacy is at the forefront of

0:04:11.320 --> 0:04:13.280
<v Speaker 1>everything that we do. We have a c I O

0:04:13.520 --> 0:04:16.240
<v Speaker 1>and a show that think about this every single day,

0:04:16.880 --> 0:04:22.320
<v Speaker 1>and the product itself was architected to ensure that. Meaning data,

0:04:22.800 --> 0:04:25.120
<v Speaker 1>it's your record, meaning data, you have the opportunity to

0:04:25.160 --> 0:04:27.960
<v Speaker 1>either record it into your own for example, on your

0:04:27.960 --> 0:04:30.760
<v Speaker 1>own premises or in our cloud, which is highly secure

0:04:30.760 --> 0:04:34.760
<v Speaker 1>because it's our own private cloud data center that we're running. So, Kelly,

0:04:34.800 --> 0:04:36.040
<v Speaker 1>just give us a sense of kind of what are

0:04:36.040 --> 0:04:39.080
<v Speaker 1>the growth drivers for your company. Obviously the company has

0:04:39.120 --> 0:04:42.480
<v Speaker 1>a tremendous valuation in the public marketplace officely, the market

0:04:42.520 --> 0:04:46.720
<v Speaker 1>is certainly expecting strong growth. What are the growth drivers? Yeah,

0:04:46.760 --> 0:04:49.800
<v Speaker 1>so there are really three key growth initiatives were focused

0:04:49.839 --> 0:04:53.120
<v Speaker 1>on this year. It's continuing to move up market and

0:04:53.120 --> 0:04:56.920
<v Speaker 1>expanding into the enterprise, which is a key opportunity for us.

0:04:57.600 --> 0:05:01.520
<v Speaker 1>It is continuing to grow international. We have a flash year,

0:05:01.560 --> 0:05:03.840
<v Speaker 1>we had a little less than our revenue came from

0:05:03.839 --> 0:05:07.800
<v Speaker 1>international markets, and so there's tremendous opportunity head there as well.

0:05:08.320 --> 0:05:12.200
<v Speaker 1>And then it's continued growth in zoom Phone, which was

0:05:12.240 --> 0:05:15.040
<v Speaker 1>a new product that became g A in January. We're

0:05:15.040 --> 0:05:18.760
<v Speaker 1>really excited about it extends our product suite from you

0:05:18.800 --> 0:05:22.159
<v Speaker 1>know video and now into audio zoom phone as well.

0:05:22.640 --> 0:05:24.680
<v Speaker 1>What's the barrier to entry at this point, given the

0:05:24.720 --> 0:05:28.359
<v Speaker 1>fact that big companies are having their own in house

0:05:28.440 --> 0:05:31.039
<v Speaker 1>kinds of operations where they can interface with each other

0:05:31.400 --> 0:05:34.520
<v Speaker 1>via video. Yeah, I think it's it's one thing to

0:05:34.920 --> 0:05:38.000
<v Speaker 1>do video, it's another thing to do video in an

0:05:38.120 --> 0:05:42.320
<v Speaker 1>enterprise grade level and to do it really with reliability

0:05:42.320 --> 0:05:46.039
<v Speaker 1>and quality every single time that somebody joins. The unite

0:05:46.040 --> 0:05:47.680
<v Speaker 1>thing about Zoom and because of the way that our

0:05:47.760 --> 0:05:51.360
<v Speaker 1>architection was built is you can have up to packet loss,

0:05:51.360 --> 0:05:53.440
<v Speaker 1>so up to forty percent data loss and still have

0:05:53.560 --> 0:05:56.640
<v Speaker 1>a great experience. Other providers we see you start to

0:05:56.680 --> 0:05:58.719
<v Speaker 1>have a degraded experience when you're like at fifteen percent

0:05:58.760 --> 0:06:02.520
<v Speaker 1>packet loss. So that really speaks to the investment in

0:06:02.560 --> 0:06:05.400
<v Speaker 1>the in the infrastructure and the architecture that we have

0:06:05.480 --> 0:06:07.880
<v Speaker 1>built and the adaptability of our platform to meet the

0:06:07.880 --> 0:06:09.640
<v Speaker 1>needs of people that are again on the go using

0:06:09.680 --> 0:06:13.000
<v Speaker 1>different devices in different locations. Kelly, is is M and

0:06:13.080 --> 0:06:17.080
<v Speaker 1>A a part of Zoom's growth strategy going forward. You know,

0:06:17.360 --> 0:06:20.200
<v Speaker 1>it hasn't been historically, but it's certainly something that we

0:06:20.240 --> 0:06:22.680
<v Speaker 1>will continue to look for. If we could find a

0:06:22.720 --> 0:06:25.680
<v Speaker 1>great company that could be additive either from a culture

0:06:26.000 --> 0:06:30.599
<v Speaker 1>and a UM talent perspective and or technology perspective, we

0:06:30.600 --> 0:06:33.279
<v Speaker 1>would certainly be open to that and we're always looking

0:06:33.279 --> 0:06:36.080
<v Speaker 1>for great opportunities in that area. One thing that I'm

0:06:36.080 --> 0:06:38.839
<v Speaker 1>curious about, just to quickly hear from you, you Kelly,

0:06:38.920 --> 0:06:41.200
<v Speaker 1>as we see this roster of I p O is

0:06:41.320 --> 0:06:44.200
<v Speaker 1>line up for later this year. What sort of the

0:06:44.240 --> 0:06:46.680
<v Speaker 1>takeaway that you learn from the whole I p O

0:06:46.800 --> 0:06:53.000
<v Speaker 1>process right now as a unicorn that you know there

0:06:53.000 --> 0:06:55.120
<v Speaker 1>are many great companies you ship coming to market, and

0:06:55.160 --> 0:06:59.880
<v Speaker 1>there's really strong investor demand for great companies and great performance,

0:07:00.279 --> 0:07:02.919
<v Speaker 1>and you know, we're really focused on continuing to executecause

0:07:02.960 --> 0:07:05.800
<v Speaker 1>that's what we can um we can manage, and we

0:07:05.839 --> 0:07:08.520
<v Speaker 1>can control. And I think that's what I learned. That's

0:07:08.520 --> 0:07:10.440
<v Speaker 1>what investors want to hear is the confidence in the

0:07:10.480 --> 0:07:12.440
<v Speaker 1>management team that they're going to continue to focus on

0:07:12.520 --> 0:07:16.480
<v Speaker 1>keeping the investors um I think interests at heart while

0:07:16.520 --> 0:07:19.840
<v Speaker 1>continuing to grow into it thoughtfully. Kelly, just real quickly,

0:07:19.880 --> 0:07:24.200
<v Speaker 1>what's the biggest risk to your growth story? It's it's

0:07:24.240 --> 0:07:27.320
<v Speaker 1>our own execution, right. It really comes down to our

0:07:27.360 --> 0:07:29.720
<v Speaker 1>team and our ability to continue to execute. This is

0:07:29.760 --> 0:07:31.720
<v Speaker 1>what we focus on every single day when we get

0:07:31.760 --> 0:07:34.560
<v Speaker 1>up and come to work. Kelly Stuckelberg, thank you very much.

0:07:34.640 --> 0:07:37.920
<v Speaker 1>Kelly as a chief financial officer from Zoom Video Communications

0:07:38.000 --> 0:07:54.280
<v Speaker 1>joining us on the phone from San Jose. Right now,

0:07:54.320 --> 0:07:57.280
<v Speaker 1>we are hitting new record highs on both the SMP

0:07:57.640 --> 0:08:00.760
<v Speaker 1>and the Nasdak in the United States, which has been

0:08:01.080 --> 0:08:04.760
<v Speaker 1>the sweet spot globally in terms of economic growth as

0:08:04.760 --> 0:08:08.200
<v Speaker 1>well as asset flow at least in joining us now

0:08:08.240 --> 0:08:11.160
<v Speaker 1>to talk about whether that can continue is Clive Gilmour.

0:08:11.240 --> 0:08:15.160
<v Speaker 1>He's CEO and Group Chief Investment Officer at Mondrean Investment Partners,

0:08:15.440 --> 0:08:18.720
<v Speaker 1>over seeing about fifty billion dollars from London usually, but

0:08:18.800 --> 0:08:23.400
<v Speaker 1>he is joining us here in our Bloombergada Interactive Brokers Studios. Clive,

0:08:23.520 --> 0:08:25.960
<v Speaker 1>I do want to ask, do you think from your

0:08:26.080 --> 0:08:28.280
<v Speaker 1>vantage point that the US is still the place to

0:08:28.360 --> 0:08:32.280
<v Speaker 1>go or that this rally is basically at its peak

0:08:32.400 --> 0:08:34.959
<v Speaker 1>and is going to peter out. Yeah, it's an interesting

0:08:35.080 --> 0:08:40.160
<v Speaker 1>question because I've been reflecting recently on the different forms

0:08:40.200 --> 0:08:43.240
<v Speaker 1>of capitalism that exists in the United States and elsewhere.

0:08:43.760 --> 0:08:47.160
<v Speaker 1>In the United States, the return to shareholder is sacrosanct.

0:08:47.880 --> 0:08:51.400
<v Speaker 1>In Japan, In contental Europe in particular, they want to

0:08:51.440 --> 0:08:54.800
<v Speaker 1>find a better balance between labor and capital. The argument

0:08:54.840 --> 0:08:58.360
<v Speaker 1>they use is that's a better long term methodology, whereas

0:08:58.400 --> 0:09:01.600
<v Speaker 1>the US one is used for short term gain. So

0:09:01.640 --> 0:09:04.520
<v Speaker 1>the question is, are we still on a run of

0:09:05.040 --> 0:09:08.840
<v Speaker 1>backing economic elements like low interest rates that support that

0:09:08.920 --> 0:09:11.480
<v Speaker 1>short termism, Where are we going to see a gradual

0:09:11.480 --> 0:09:15.280
<v Speaker 1>shift to the longer term? International markets trade at a discount,

0:09:15.600 --> 0:09:18.880
<v Speaker 1>a significant discount in some cases, so perhaps we're at

0:09:18.920 --> 0:09:22.560
<v Speaker 1>the pitch point where people should consider investing more internationally

0:09:22.760 --> 0:09:25.440
<v Speaker 1>than in the United States alone. Well, it's interesting, I

0:09:25.480 --> 0:09:28.359
<v Speaker 1>was I was looking at just the UAR today performance

0:09:28.440 --> 0:09:30.679
<v Speaker 1>from you know, the STARKS or the CAC or the

0:09:30.800 --> 0:09:34.320
<v Speaker 1>Dacks index of Europe. The performance there is essentially on

0:09:34.440 --> 0:09:37.320
<v Speaker 1>par with the SMP. So we're seeing European equities, so

0:09:37.400 --> 0:09:41.240
<v Speaker 1>it doesn't feel like there's quote unquote value in European markets.

0:09:41.559 --> 0:09:44.960
<v Speaker 1>How do you view some of the developed European markets? Yeah, well,

0:09:45.040 --> 0:09:47.040
<v Speaker 1>in answer to the first question, you know, I talked

0:09:47.040 --> 0:09:50.000
<v Speaker 1>about that different form of capitalism. One way that reflects

0:09:50.040 --> 0:09:53.920
<v Speaker 1>itself is in sectorial splits between markets on a global basis.

0:09:54.320 --> 0:09:57.880
<v Speaker 1>So the US has a significantly larger piece in technology,

0:09:58.160 --> 0:10:01.160
<v Speaker 1>and it's that technology part of the market that's driven

0:10:01.440 --> 0:10:03.719
<v Speaker 1>to a great extent the u s higher through the

0:10:03.800 --> 0:10:07.560
<v Speaker 1>NASDAC before outperforming the SMP significantly. If you look at

0:10:07.559 --> 0:10:09.120
<v Speaker 1>the rest of the world, why has there been an

0:10:09.160 --> 0:10:12.520
<v Speaker 1>adjustment just like there has been of the SMP. It's

0:10:12.640 --> 0:10:16.600
<v Speaker 1>merely an adjustment back to an interest rate policy that

0:10:16.679 --> 0:10:21.319
<v Speaker 1>seems to be underwriting stock markets. In other words, moved

0:10:21.400 --> 0:10:25.320
<v Speaker 1>back towards either zero or negative real interest rates, which

0:10:25.400 --> 0:10:29.040
<v Speaker 1>we personally believe is unsustainable on a long term basis.

0:10:29.400 --> 0:10:31.920
<v Speaker 1>What you're saying is actually fascinating, which is, at a

0:10:31.960 --> 0:10:34.880
<v Speaker 1>certain point investors aren't going to just look for people

0:10:35.320 --> 0:10:38.040
<v Speaker 1>for for companies to give them as much money as

0:10:38.080 --> 0:10:41.559
<v Speaker 1>possible in the form of shared by backs and dividends,

0:10:41.600 --> 0:10:44.240
<v Speaker 1>and they're actually going to start looking at sort of

0:10:44.280 --> 0:10:47.840
<v Speaker 1>the sort of social implications and the investments. And we

0:10:47.920 --> 0:10:50.160
<v Speaker 1>have actually started to see a shift in that way

0:10:50.240 --> 0:10:52.920
<v Speaker 1>in the United States. What makes you think that that

0:10:53.080 --> 0:10:58.200
<v Speaker 1>shift will lead investors overseas well? That argument about sustainability

0:10:58.559 --> 0:11:01.520
<v Speaker 1>is obviously a really really strong on and the way

0:11:01.559 --> 0:11:04.880
<v Speaker 1>we analyze equities at Mandron is to use a dividend

0:11:04.920 --> 0:11:07.800
<v Speaker 1>discount model, so that takes the dividends today and looks

0:11:07.800 --> 0:11:11.559
<v Speaker 1>like the spected future growth in those dividends. So sustainability

0:11:11.679 --> 0:11:14.280
<v Speaker 1>is a key element of what we do, especially as

0:11:14.280 --> 0:11:17.960
<v Speaker 1>you look out after year three for example. So no

0:11:18.000 --> 0:11:21.120
<v Speaker 1>one knows when the exact moment will be when that

0:11:21.200 --> 0:11:24.480
<v Speaker 1>will change. All we can say is the skew of

0:11:24.520 --> 0:11:29.280
<v Speaker 1>outcomes is increasingly on the upside for investing outside the

0:11:29.360 --> 0:11:32.679
<v Speaker 1>United States relative to in the United States. And indeed,

0:11:32.679 --> 0:11:36.000
<v Speaker 1>we do three DDM models, one on a central case,

0:11:36.080 --> 0:11:38.600
<v Speaker 1>one on a worse, one on a best and even

0:11:38.600 --> 0:11:42.960
<v Speaker 1>though central case real returns are lower because markets have

0:11:43.000 --> 0:11:46.320
<v Speaker 1>gone up, the skew is still positive, whereas in the

0:11:46.400 --> 0:11:50.840
<v Speaker 1>US increasingly that skew is looking negative. You mentioned Japan earlier.

0:11:50.880 --> 0:11:54.280
<v Speaker 1>What is your view on Japan given that they've, you know,

0:11:54.320 --> 0:11:56.920
<v Speaker 1>the stagnation that economies done with over the last decade

0:11:57.000 --> 0:12:00.079
<v Speaker 1>or so. Yeah, that's a good question. I started my

0:12:00.240 --> 0:12:04.240
<v Speaker 1>career in Japan in the early nineteen eighties, and pretty

0:12:04.320 --> 0:12:08.400
<v Speaker 1>much from about onwards, Japan was a no go area.

0:12:08.760 --> 0:12:10.640
<v Speaker 1>And it was a no go area because the market

0:12:10.640 --> 0:12:15.120
<v Speaker 1>had become inflated, but more pertinently, perhaps because companies there

0:12:15.320 --> 0:12:20.280
<v Speaker 1>gave little regard to shareholders and certainly had alarmingly low

0:12:20.360 --> 0:12:24.720
<v Speaker 1>returnal equity. For example, what's happened over the last thirty

0:12:24.800 --> 0:12:28.400
<v Speaker 1>years is perhaps testament to the fact that Japan has

0:12:28.440 --> 0:12:30.920
<v Speaker 1>had died in the wall approach. In other words, it

0:12:30.960 --> 0:12:34.640
<v Speaker 1>doesn't wish to change that much. However, in the recent

0:12:34.800 --> 0:12:39.000
<v Speaker 1>past they have begun to embrace some of Arebe's reforms

0:12:39.240 --> 0:12:42.839
<v Speaker 1>in the extent that they are now looking at trying

0:12:42.840 --> 0:12:46.959
<v Speaker 1>to improve r o E and also look at dividends

0:12:47.000 --> 0:12:50.320
<v Speaker 1>as a way forward for shareholders. And that's crucial because remember,

0:12:50.600 --> 0:12:54.720
<v Speaker 1>the Japanese have a rapidly aging population with incredibly low

0:12:54.760 --> 0:12:59.439
<v Speaker 1>bond yields and a demand for income from that aging population.

0:13:00.400 --> 0:13:04.040
<v Speaker 1>Dividends from equities are becoming an increasingly large part of that.

0:13:04.440 --> 0:13:07.640
<v Speaker 1>We're still actually underweight in Japan for choice, but only

0:13:07.800 --> 0:13:11.239
<v Speaker 1>just and that is against a position of being significantly

0:13:11.320 --> 0:13:15.440
<v Speaker 1>underweight for most of the last twenty years. Clud Gilmore,

0:13:15.480 --> 0:13:17.439
<v Speaker 1>thank you so much. Clud Gilmore as a CEO and

0:13:17.520 --> 0:13:21.120
<v Speaker 1>Group c i O of Montreal Investment Partners joining us

0:13:21.320 --> 0:13:23.720
<v Speaker 1>today in New York on our Bloomberg Interactive Brooker Studio.

0:13:40.120 --> 0:13:42.600
<v Speaker 1>Right now, I think we do have Bruce Levine from

0:13:42.800 --> 0:13:46.640
<v Speaker 1>the Center for Soulomnia Therapies at University of Pennsylvania. Just

0:13:46.720 --> 0:13:49.000
<v Speaker 1>let's get us started with a sense of what your

0:13:49.000 --> 0:13:52.160
<v Speaker 1>team is working on. In Lehman's terms, but we're working

0:13:52.160 --> 0:13:56.439
<v Speaker 1>on is using the patient's own immune system and retraining

0:13:56.520 --> 0:14:02.000
<v Speaker 1>it to recognize cancer. Now, this is uh uh not

0:14:02.200 --> 0:14:07.280
<v Speaker 1>intuitive because the immune system is designed to recognize foreign invaders,

0:14:07.320 --> 0:14:11.240
<v Speaker 1>and cancer is derived from your own cells, So what

0:14:11.280 --> 0:14:16.040
<v Speaker 1>we're doing is putting in a genetically engineered receptor that

0:14:16.480 --> 0:14:20.480
<v Speaker 1>makes your immune systems recognized cancer. So PUS kind of

0:14:21.120 --> 0:14:22.560
<v Speaker 1>give us a sense of kind of where you are

0:14:22.680 --> 0:14:25.240
<v Speaker 1>in your research, where is it mat and a kind

0:14:25.240 --> 0:14:28.360
<v Speaker 1>of go to market type scenario, where are you and

0:14:28.400 --> 0:14:32.840
<v Speaker 1>your team right now? Well, we treated three patients in

0:14:33.040 --> 0:14:37.160
<v Speaker 1>ten that had between three and a half and eight

0:14:37.160 --> 0:14:40.800
<v Speaker 1>pounds of leukemia destroy These are patients that had no

0:14:40.920 --> 0:14:45.240
<v Speaker 1>other options. Based on those reports, we signed an alliance

0:14:45.240 --> 0:14:50.440
<v Speaker 1>with twenty in twelve with Novardes to develop this technology

0:14:50.480 --> 0:14:55.000
<v Speaker 1>and commercialize at which they have. They conducted to global

0:14:55.120 --> 0:14:59.479
<v Speaker 1>pivotal clinical trials, one in pediatric leukemia and other. Amphoma

0:15:00.040 --> 0:15:07.080
<v Speaker 1>received FDA approval August for pediatric leukemia and May first

0:15:07.120 --> 0:15:11.560
<v Speaker 1>for lamphoma, so this was the first FDA approve TEIN therapy.

0:15:11.680 --> 0:15:15.120
<v Speaker 1>There is another product on the market for lamphoma that's

0:15:15.240 --> 0:15:19.600
<v Speaker 1>Gilead kites Yes Carda. At PEN, we're focused on the

0:15:19.680 --> 0:15:24.040
<v Speaker 1>next generation of these therapies, making them smarter going into

0:15:24.200 --> 0:15:27.040
<v Speaker 1>solid cancers, and we have a PEN spin out community

0:15:27.280 --> 0:15:31.240
<v Speaker 1>that is developing some of these next generation therapies versus

0:15:31.320 --> 0:15:33.360
<v Speaker 1>is incredibly exciting for me to hear what you're working

0:15:33.440 --> 0:15:36.440
<v Speaker 1>on because there have been so many UH cancers that

0:15:36.520 --> 0:15:39.080
<v Speaker 1>have killed people who we all have been close to

0:15:39.240 --> 0:15:41.040
<v Speaker 1>sort of think that there could be some kind of

0:15:41.680 --> 0:15:45.760
<v Speaker 1>remedy new remedy is very exciting. I'm just wondering about

0:15:46.000 --> 0:15:49.520
<v Speaker 1>the sort of standardization of some of these cart c

0:15:49.880 --> 0:15:53.120
<v Speaker 1>UH cart cell therapies, just considering the fact that you

0:15:53.200 --> 0:15:55.520
<v Speaker 1>have to use people's own cells, they tend to be

0:15:55.640 --> 0:15:58.280
<v Speaker 1>much more expensive, and I'm just wondering what the focus

0:15:58.520 --> 0:16:00.480
<v Speaker 1>is and trying to sort of streamline ms they can

0:16:00.520 --> 0:16:03.360
<v Speaker 1>be used in a more broad based level. Yeah, so

0:16:03.520 --> 0:16:06.840
<v Speaker 1>the challenge here is the raw material is the patient's

0:16:06.880 --> 0:16:11.440
<v Speaker 1>own cells, and it varies every time. As far as standardization,

0:16:11.640 --> 0:16:16.640
<v Speaker 1>we are making improvements in the manufacturing, implementing automation, making

0:16:16.720 --> 0:16:21.760
<v Speaker 1>the process shorter, but we will go from what is

0:16:21.840 --> 0:16:24.040
<v Speaker 1>now a three week turned around to maybe a two

0:16:24.080 --> 0:16:29.280
<v Speaker 1>week or shorter turnaround. Now, this does have implications and scale.

0:16:29.320 --> 0:16:31.880
<v Speaker 1>It's not really scaling up. You can't scale to a

0:16:31.960 --> 0:16:34.240
<v Speaker 1>five thousand leader or a ten thousand leader a lot,

0:16:34.320 --> 0:16:37.920
<v Speaker 1>but we can improve what we're doing, and I would

0:16:37.960 --> 0:16:41.280
<v Speaker 1>say I think of this as a remote organ transplant

0:16:41.360 --> 0:16:44.920
<v Speaker 1>or remote stem cell transplant rather than something you're going

0:16:45.000 --> 0:16:48.000
<v Speaker 1>to have on a on a shelf. I can speak

0:16:48.000 --> 0:16:51.119
<v Speaker 1>to you about the so called off the shelf cell therapies,

0:16:51.240 --> 0:16:54.800
<v Speaker 1>and there there is justification for that because there are

0:16:54.840 --> 0:16:57.560
<v Speaker 1>patients from whom we don't get enough food cells to

0:16:57.680 --> 0:17:00.880
<v Speaker 1>generate a product. But the issue for these is just

0:17:01.080 --> 0:17:03.840
<v Speaker 1>like I can't give you my own liver without you

0:17:03.960 --> 0:17:06.359
<v Speaker 1>being on lifelong I mean a suppression. Those of the

0:17:06.480 --> 0:17:09.720
<v Speaker 1>show therapies don't last very long and patients have to

0:17:09.840 --> 0:17:15.199
<v Speaker 1>transition to another definitive therapy. Bruce Levine, thank you so much.

0:17:15.320 --> 0:17:17.640
<v Speaker 1>Bruce Levine is a Barbara and Edward nett Are Professor

0:17:17.800 --> 0:17:21.040
<v Speaker 1>in gene a cancer gene therapy. He's at the Center

0:17:21.119 --> 0:17:24.200
<v Speaker 1>for Cellular Immunotherapy is at the University of Pennsylvania. Is

0:17:24.280 --> 0:17:27.600
<v Speaker 1>also a co founder of Community, a pen spin out

0:17:28.200 --> 0:17:46.159
<v Speaker 1>working with nove artists. Let's switch gears right now to

0:17:46.240 --> 0:17:49.720
<v Speaker 1>the home sharing business. It was reported today that Marryott

0:17:49.720 --> 0:17:53.280
<v Speaker 1>International is expanding its home sharing business to the US

0:17:53.840 --> 0:17:57.399
<v Speaker 1>as Airbnb diversifies its own business ahead of an expected

0:17:57.440 --> 0:17:59.639
<v Speaker 1>initial public offering. To get us up to speed on

0:17:59.720 --> 0:18:02.000
<v Speaker 1>this store. Are we welcome Patrick Clark Pat his real

0:18:02.119 --> 0:18:04.520
<v Speaker 1>estate a reporter for Bloomberg News. He joins us on

0:18:04.520 --> 0:18:07.520
<v Speaker 1>our Bloomberg Interactive Broker studio. Pat, thanks so much for

0:18:07.640 --> 0:18:11.199
<v Speaker 1>being with us. So this is so Marriott already has

0:18:11.240 --> 0:18:12.960
<v Speaker 1>a home sharing business, but they're just they're bringing it

0:18:13.000 --> 0:18:14.840
<v Speaker 1>to the US. Is that the news here? That's right?

0:18:14.920 --> 0:18:17.840
<v Speaker 1>What they've called they've called in the past home sharing

0:18:17.920 --> 0:18:23.040
<v Speaker 1>pilot started in London. I think in May they they

0:18:23.280 --> 0:18:27.400
<v Speaker 1>proclaimed that a success and expanded into Paris, Rome and Lisbon.

0:18:28.119 --> 0:18:30.200
<v Speaker 1>Now they're bringing it to the U S and they're

0:18:30.200 --> 0:18:32.680
<v Speaker 1>also expanding it outside the US. I think it's gonna

0:18:32.680 --> 0:18:37.440
<v Speaker 1>be a hundred destinations around the world, many of them

0:18:38.680 --> 0:18:42.040
<v Speaker 1>real sort of tourism spots um Bar harbor in the US,

0:18:42.160 --> 0:18:46.280
<v Speaker 1>like Tahoe. I think I saw sat Bart's um the

0:18:46.359 --> 0:18:49.479
<v Speaker 1>Amalfi coast of Italy. So those types is pretty good.

0:18:49.880 --> 0:18:51.879
<v Speaker 1>It sounds pretty good to me too. I will say, UM,

0:18:52.000 --> 0:18:54.160
<v Speaker 1>I have to wonder. I'm trying to understand they're trying

0:18:54.160 --> 0:18:56.280
<v Speaker 1>to counter the air and b nb's of the world.

0:18:56.359 --> 0:18:58.840
<v Speaker 1>That's sort of how this was framed. You're kind of

0:18:59.200 --> 0:19:01.440
<v Speaker 1>shaking your head a little bit, and I'm wondering is

0:19:01.520 --> 0:19:05.840
<v Speaker 1>it really because home rental that kind of concept is

0:19:06.000 --> 0:19:09.600
<v Speaker 1>evocative of a different, different kind of model than airbnb

0:19:09.760 --> 0:19:13.280
<v Speaker 1>s Perhaps all of these models are converging on themselves.

0:19:13.359 --> 0:19:16.639
<v Speaker 1>I think, I mean, the Marriott will do something that

0:19:17.040 --> 0:19:20.600
<v Speaker 1>is doing something that looks like home sharing. Um, I

0:19:20.680 --> 0:19:23.160
<v Speaker 1>don't know that they're doing it for the reason why

0:19:24.720 --> 0:19:27.440
<v Speaker 1>people use a homeshare to find a place to stay

0:19:27.480 --> 0:19:29.680
<v Speaker 1>in New York, right, which is often because they want

0:19:29.920 --> 0:19:32.960
<v Speaker 1>um a cheaper maybe also a slightly different version of

0:19:33.040 --> 0:19:35.320
<v Speaker 1>what they would get um in a hotel in in

0:19:36.280 --> 0:19:38.600
<v Speaker 1>You know, I stay in my rent homes with my

0:19:38.680 --> 0:19:40.560
<v Speaker 1>family and we go on vacation because we want the

0:19:40.600 --> 0:19:42.760
<v Speaker 1>space and we want you know, separate bedrooms in the

0:19:42.880 --> 0:19:46.000
<v Speaker 1>kitchen and all of that, and we sometimes do it

0:19:46.040 --> 0:19:49.080
<v Speaker 1>through Airbnb or v R B O. But but um, yeah,

0:19:49.119 --> 0:19:50.760
<v Speaker 1>I think you're as you said, that's sort of a

0:19:50.840 --> 0:19:54.520
<v Speaker 1>home rental business, which makes sense as an extension of

0:19:54.760 --> 0:19:56.640
<v Speaker 1>of sort of Marriotts bread and butter. Right, If I'm

0:19:56.640 --> 0:19:59.800
<v Speaker 1>a Marriott Loyalty Program member and I travel for business

0:19:59.840 --> 0:20:02.199
<v Speaker 1>all all the time, and I accrue points, and now

0:20:02.240 --> 0:20:04.280
<v Speaker 1>I want to go on vacation with my family, and

0:20:04.400 --> 0:20:07.280
<v Speaker 1>what I want is a home rental, not a not

0:20:07.400 --> 0:20:09.920
<v Speaker 1>a suite in a hotel somewhere. It makes sense for

0:20:10.040 --> 0:20:12.439
<v Speaker 1>Marriott to be able to offer me that home rental. Now,

0:20:13.320 --> 0:20:16.960
<v Speaker 1>is that direct competition with Airbnb? You know? Way it

0:20:17.119 --> 0:20:19.720
<v Speaker 1>is because I would um, otherwise go and book that

0:20:19.840 --> 0:20:23.439
<v Speaker 1>home on airbat me instead of uh, you know, instead

0:20:23.480 --> 0:20:27.320
<v Speaker 1>of staying inside this sort of Marriot loyalty ecosystem. Now,

0:20:27.880 --> 0:20:32.480
<v Speaker 1>um does Airbnb? You know? The amount of crossover is

0:20:32.560 --> 0:20:34.240
<v Speaker 1>sort of a point of contention. I would say that

0:20:34.320 --> 0:20:37.720
<v Speaker 1>the hotel companies have largely said many of them have

0:20:37.880 --> 0:20:40.680
<v Speaker 1>said it's a different guest than the one that that

0:20:40.800 --> 0:20:44.920
<v Speaker 1>were servant. So what has been just overall the Airbnb

0:20:45.040 --> 0:20:49.440
<v Speaker 1>impact on the hotel business? Yeah, I mean there's you know,

0:20:49.520 --> 0:20:52.359
<v Speaker 1>I think Airbnb says they have six million listings around

0:20:52.359 --> 0:20:54.800
<v Speaker 1>the world, so that's just a lot of supply. Um.

0:20:55.520 --> 0:20:57.520
<v Speaker 1>I think it depends on on the place there are.

0:20:57.680 --> 0:21:00.440
<v Speaker 1>You know some places you could say there are. I

0:21:00.520 --> 0:21:02.600
<v Speaker 1>mean in New York you have thousands, tens of thousands

0:21:02.640 --> 0:21:05.040
<v Speaker 1>of more sort of places to stay than you would

0:21:05.359 --> 0:21:09.760
<v Speaker 1>pre Airbnb. Uh, whether or not that has had an

0:21:09.800 --> 0:21:12.240
<v Speaker 1>impact on how much a hotel in New York can

0:21:12.320 --> 0:21:14.840
<v Speaker 1>get for its room. I guess it's a little bit murky.

0:21:14.840 --> 0:21:17.000
<v Speaker 1>You would think it would have to have some impact. Uh,

0:21:17.400 --> 0:21:20.280
<v Speaker 1>there's also seems to be, you know, virtually limitless demand

0:21:20.359 --> 0:21:24.920
<v Speaker 1>for hotel rooms in Manhattan. They add, uh, you know,

0:21:25.160 --> 0:21:27.840
<v Speaker 1>they had thousands of hotel rooms in New York every

0:21:27.920 --> 0:21:33.560
<v Speaker 1>year and without seemingly a large impact on occupancy rates.

0:21:33.640 --> 0:21:38.880
<v Speaker 1>So um, you know it's it's it's unclear who's threatening here?

0:21:38.960 --> 0:21:41.080
<v Speaker 1>Who here? Right? Is Is Mary going to take a

0:21:41.119 --> 0:21:43.440
<v Speaker 1>bite out of Airbnb's business with this new offering? I

0:21:43.480 --> 0:21:47.080
<v Speaker 1>couldn't doubt it is is are they defending themselves? Do they?

0:21:47.080 --> 0:21:50.639
<v Speaker 1>Are they worried about losing business? Pat Clark, thank you

0:21:50.680 --> 0:21:53.000
<v Speaker 1>so much for that. Pat Clark is a realistate reporter

0:21:53.119 --> 0:21:57.800
<v Speaker 1>here at Bloomberg News. Thanks for listening to the Bloomberg

0:21:57.840 --> 0:21:59.960
<v Speaker 1>P and L podcast. You can subscribe and listen to

0:22:00.080 --> 0:22:03.280
<v Speaker 1>interviews at Apple Podcasts or whatever podcast platform you prefer.

0:22:03.640 --> 0:22:06.159
<v Speaker 1>M Paul Sweeney, I'm on Twitter at pt Sweeney. I'm

0:22:06.240 --> 0:22:08.919
<v Speaker 1>Lisa abram Woyit's I'm on Twitter at Lisa abram Woits

0:22:08.960 --> 0:22:11.800
<v Speaker 1>one before the podcast. You can always catch us worldwide

0:22:11.840 --> 0:22:12.800
<v Speaker 1>on'm Bloomberg Radio.