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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along

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Speaker 1: with my co host of Bonnie Quinn. Every business day

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Speaker 1: we bring you interviews from ceo, market pros, and Bloomberg experts,

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Speaker 1: along with essential market moving news. Find the Bloomberg Markets

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Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,

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Speaker 1: and on Bloomberg dot com. Tiva Pharmaceuticals reported earnings this morning.

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Speaker 1: The stock is off about seven point four percent today's

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Speaker 1: trading eleven dollars and eighty six cents a share. But

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Speaker 1: here today the stock is not nearly Let's break down

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Speaker 1: the earnings and the key issues facing Tiva Pharmaceuticals. We

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Speaker 1: do that today with Corese Schultz, CEO of Tiva Pharmarmaceuticals.

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Speaker 1: Cour thanks so much for joining us here. Let's kick

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Speaker 1: it off, get right to it. Talk to us about

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Speaker 1: your earnings for the most recent period and your outlook

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Speaker 1: for this year. Thanks Paul, great to be with you

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Speaker 1: and Monny. I think the earnings report for the fourth

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Speaker 1: quarter is a really solid one, and I think the

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Speaker 1: whole report for twenty is also very solid. You could say,

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Speaker 1: we had, of course, lots of operational challenges due to

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Speaker 1: the COVID nineteen pandemic pandemic, but in all manufacturing sites,

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Speaker 1: in our whole logistical network, we managed to overcome it.

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Speaker 1: Basically serve the two on a million patients we serve

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Speaker 1: every day without Generics in a pretty steady way, and

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Speaker 1: supporting healthcare systems worldwide. At the same time, we managed

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Speaker 1: our cost well, so they were down for the third

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Speaker 1: year in a row. We managed to increase our earnings slightly,

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Speaker 1: which was also positive. And then we continue to pay

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Speaker 1: down debt. And I'm shure you know by now over

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Speaker 1: the last three years, I've been paying down the two

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Speaker 1: ten billion dollars and we'll continue to do so in

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Speaker 1: in this year and in the common years. So all

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Speaker 1: in all, we've stabilized the business. Yes, core of favorable

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Speaker 1: credit markets for sure. I want to ask you about

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Speaker 1: that more in a moment, But first, the vaccine distribution

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Speaker 1: in Israel has been among the best in the world,

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Speaker 1: and you've obviously been very much part of that. How

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Speaker 1: does that continue and have you have you plans to

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Speaker 1: expand that internationally if you advice for other countries. So

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Speaker 1: it's absolutely correct that we are taking care of the

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Speaker 1: whole logistical side of the vaccination program in Israel. So

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Speaker 1: basically picking up the cargo from the cargo plane signated

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Speaker 1: our chio logistics center, repacking, ensuring freezing and cooling and distribution,

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Speaker 1: making sure it gets out to the four hundred vaccination

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Speaker 1: centers in Israel, and that it's the right amount that

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Speaker 1: gets to the right center at the right time. All

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Speaker 1: all of course to ensure that we have a maximum

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Speaker 1: utilization of the vaccines that Israel is receiving from FIFER

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Speaker 1: and from Moderna at at the current important time. So

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Speaker 1: we have great i'd say, insight into how that works

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Speaker 1: right now, I would say the only country where we

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Speaker 1: really have an operational capability to to help out in

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Speaker 1: the same way would probably be in the U s

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Speaker 1: where we have the distributor company called and and we'll

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Speaker 1: be more than happy to help out the distribution. We're

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Speaker 1: not currently law, but but who knows, maybe in the

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Speaker 1: common months there will be a role for us to

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Speaker 1: play there to secure fastness effective distribution of vaccines relevant locations.

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Speaker 1: So UH core Tiva is one of the Farmer Circle

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Speaker 1: companies that is being sued by the US as relates

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Speaker 1: to the opioid crisis. Also, company is part of an

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Speaker 1: alleged drug fixing. Cartel talk to gives an update on

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Speaker 1: these legal issues, because I'm not reading some Wall Street research.

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Speaker 1: They do weigh on the stock. What's the latest, Yeah,

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Speaker 1: So the latest on the opioid litigation is really that

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Speaker 1: we more than a year ago agreed to a framework

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Speaker 1: with the states and the plane of lawyers that represent

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Speaker 1: the subdivision, so counties, citizen and so on, and unfortunately

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Speaker 1: we have not sort of got across the finishing line

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Speaker 1: and we don't have the framework settlement turned into firm settlements.

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Speaker 1: We did this together with four other companies, the three

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Speaker 1: big distributors in Johnson and Johnson, and nobody has reached

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Speaker 1: the point where, you know, everybody signs a firm settlement.

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Speaker 1: One of the reasons is that we have fifty states involved,

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Speaker 1: we have fift planning lawyers, five companies, and even though

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Speaker 1: each company does their own settlement at the end of

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Speaker 1: the day, it has just proven difficult to get everybody

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Speaker 1: to sort of sit down and do the final details.

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Speaker 1: And it has not helped that the COVID nineteen pandemic

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Speaker 1: has delayed basically all trials, so all the trials that

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Speaker 1: could have been trigger points by motivating people to get

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Speaker 1: the framework into a firm settlement. All these trials have

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Speaker 1: been delayed and they're still being delayed due to COVID nineteen,

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Speaker 1: so I'm very optimistic that the actual framework will be implemented.

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Speaker 1: We are offering free generics box and for all states.

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Speaker 1: That's a key product in sort of treating overdose, so

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Speaker 1: basically reducing deaths from overdoses, which is a key concern

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Speaker 1: of course, in the phase of the substance misuse among

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Speaker 1: the American population. The other companies are basically offering cash

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Speaker 1: that can be used to help get people off their

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Speaker 1: situation with substance abuse. So the only good solution for

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Speaker 1: the American public is, of course, as this framework gets

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Speaker 1: into a firm settlement, and I hope this will happen.

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Speaker 1: I'm optimistic it will happen, but I'm a little doubtful

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Speaker 1: about the timing, simply due to the fact that there

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Speaker 1: is no legal pressure on the parties to get signed

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Speaker 1: on the door line. So speak yeah, well, we'll definitely

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Speaker 1: continue to follow that one. Finally, Core, you talked about

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Speaker 1: the credit markets. Obviously they're hugely favorable for likes of Tever.

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Speaker 1: In fact, yields now lower than when they were still

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Speaker 1: rated investment grade by ratings agencies before it have it

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Speaker 1: became a fallen angel? Do you continue to just raise

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Speaker 1: raise money on the credit markets to pay down debt?

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Speaker 1: So we only raised money, you could say, when we

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Speaker 1: have to, because we're paying down debt out of our

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Speaker 1: operational cash throw as we go along. We did that

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Speaker 1: last year with roughly two billion. We're going to do

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Speaker 1: this year with a bit more than two billions. And

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Speaker 1: the next time where we really need to refinance, that

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Speaker 1: is in two thousand twenty three, or that's the ditch

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Speaker 1: stack of two thousand twenty three, that's about around four billion.

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Speaker 1: That's more than what we expect our operational cash flow

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Speaker 1: will be. So we will look like to do a

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Speaker 1: refinancing about a year from now, where we will look

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Speaker 1: at refinancing two thousand twenty three and potentially some of

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Speaker 1: two thousand twenty five. All right, well we have to

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Speaker 1: say goodbye to you there, but thank you very much

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Speaker 1: for giving us some of your time today earnings day

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Speaker 1: and then always always such a busy day. That's Coral

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Speaker 1: Schultze is a pharmaceuticals a CEO, joining us there after

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Speaker 1: an excellent earnings season. You know, coming off of those

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Speaker 1: march loads of last year, the sps of about seventy five,

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Speaker 1: and a lot of folks are starting to get worried

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Speaker 1: about a bubble. And when you see stories like the

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Speaker 1: game stop and all the spacks coming out, just adding

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Speaker 1: to the concerns about are we a bubble? Uh? In

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Speaker 1: this particularly in the equity markets. Let's chat about that

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Speaker 1: with Jim Paulson. He's a chief investment strategist for the

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Speaker 1: Louthhole Group. Joining us on the phone from Minneapolis, Minnesota. Jim,

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Speaker 1: thanks so much for joining us again here again a

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Speaker 1: extraordinary move off the march lows here. How are you

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Speaker 1: viewing the markets right here? Yeah, Paul, thanks for having

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Speaker 1: me today. Yeah, I am. I think that you know,

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Speaker 1: there's certainly a lot of the indicators, sentiment indicators and

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Speaker 1: like have certainly come up a fair amount and should

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Speaker 1: could certainly bring in will bring sometime this year correction. Uh,

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Speaker 1: I think we we could get at least one of those.

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Speaker 1: I think it's going to come a little later, but

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Speaker 1: I think that's very possible. But this this narrative that's

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Speaker 1: out there, it's gotten really strong. This the idea of

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Speaker 1: the bubble major market mania bubble that's developing, it will

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Speaker 1: resolve the collapse like the dot com collapse. I think

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Speaker 1: that's got really low probability. Um. Yes, we've we've come

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Speaker 1: up a lot from them March lows. But but if

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Speaker 1: you look at over the last year, we might be

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Speaker 1: up fifteen over the last three years, I think we've

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Speaker 1: analyzed around thirteen. And during the last two years, for example,

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Speaker 1: of twenty four months, roughly this this SP five hundred

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Speaker 1: has suffered to cline in late eighteen and thirty four

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Speaker 1: percent decline last year. I just can't tell you another

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Speaker 1: period where we ended up in a bubble during the

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Speaker 1: twenty after twenty four month period where we had two

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Speaker 1: really nasty our markets almost over the same time period.

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Speaker 1: And then if you look more broadly, Paul Um you

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Speaker 1: know Russell large value UH international markets have gone nowhere

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Speaker 1: for the last three years. There's still roughly flat and

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Speaker 1: until November small caps hadn't moved higher. So I think

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Speaker 1: it's overblown, I really do. You know. One of the

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Speaker 1: things that presses me is talk about the Greenspan put well,

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Speaker 1: we've got a vaccine. Put how much you're going to

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Speaker 1: sell this market off when you know that by faller

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Speaker 1: or so by the end of this year, there's pandemic

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Speaker 1: is gonna wind down a lot more. We've got a

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Speaker 1: policy put, We've got another trillion dollar stimulus for MEEF

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Speaker 1: package coming. It seems like every month, how much you're

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Speaker 1: gonna sell off in the face of that, We've got

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Speaker 1: an earning revival put going on earn These estments are

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Speaker 1: coming up every day, and we've gotta we've got a

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Speaker 1: bubble watch put. Can we really have a bubble when

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Speaker 1: so many are worried about it? I don't know. Those

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Speaker 1: are the things I throw out. I guess, for how

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Speaker 1: long can the federal Reserve and fiscals TOI met a

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Speaker 1: slash pandemic relief keep the demand coming for these companies.

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Speaker 1: I mean, you walk around any major city right now

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Speaker 1: and it's absolutely it's terrifyingly bare well. The lonnie I,

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Speaker 1: I personally don't know if we need a lot of

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Speaker 1: our stimulus. That one of the things that's greatly underestimated

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Speaker 1: is that there's about a one year to two year

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Speaker 1: lag and historically between when stimulus is introduced and when

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Speaker 1: it starts to really impact the economy. So we're going

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Speaker 1: to get a lot of juice from what we started

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Speaker 1: to introduce last year, let alone the new stuff we're

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Speaker 1: bringing now into the party. And at the end of

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Speaker 1: the day, Um, the real issue is reopening and it's stimulus.

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Speaker 1: Can't really do that, but we're going to get that.

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Speaker 1: I mean, the biggest stimulus in the room isn't the

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Speaker 1: fiscal policy or monetary policy. It's a shot in the

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Speaker 1: arm because by you know, if you think that sentiments

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Speaker 1: too giddy right now in the investment markets, what's it

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Speaker 1: gonna be like on VC day when we declare victory

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Speaker 1: over COVID in the fall and there's gonna be heard

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Speaker 1: that's fascinated and they are free to roam again and

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Speaker 1: taking entertainment and social interaction demand. That will be spin.

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Speaker 1: I mean, people are going to feel a palatable route.

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Speaker 1: Do you should rethink this whole vaccine thing? Jim? What

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Speaker 1: do you think? So? Jim? Where are you in terms

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Speaker 1: of are you in this rotation play that's worked so

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Speaker 1: well for investors released since September? Kind of you know,

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Speaker 1: maybe on the margin, lightning up on the Apples and

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Speaker 1: the Amazons of the world and and looking for some

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Speaker 1: of those cyclical names, maybe some of the small cap

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Speaker 1: names that in fact would and will benefit from a

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Speaker 1: reopening here. How do you feel about that? Where where

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Speaker 1: are you? Yeah? I definitely, uh, we've been overweighted what

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Speaker 1: I call broader marketplace or UH at least since the

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Speaker 1: middle last year or so. But you know, I would

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Speaker 1: include you know, small caps, cyclicals, UH value stocks, high

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Speaker 1: beta and international markets in that mix. I definitely want

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Speaker 1: to be overweighted there, but I wouldn't exactly I be

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Speaker 1: their way to tack the new era. But I don't

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Speaker 1: think I totally get out of it. I think it's

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Speaker 1: going to continue. It's gonna underperform, probably, but it's gonna

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Speaker 1: continue to participate, and it holds you up on bad days,

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Speaker 1: you know, if it really the cyclicals and those more

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Speaker 1: violably broader marketplace have greater volatility, and on those days,

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Speaker 1: if you own some new era, it's gonna hold you up.

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Speaker 1: So I own some of both. One of the things

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Speaker 1: I'd say, Paul is that what I found consumer confidence

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Speaker 1: is still very depressed. And Tavanni's point, you know, people

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Speaker 1: still feel pretty concerned about where we're at here. But

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Speaker 1: if we are going to get people vaccinated here, I

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Speaker 1: think consumer confidence is going to rally even more. And

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Speaker 1: what I found is a very close relationship between improvements

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Speaker 1: in main street confidence and what happens to these broader

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Speaker 1: marketplaces like small caps and and I think there's still

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Speaker 1: quite a bit of that ahead of us when you

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Speaker 1: look ahead over the next year. Well, I'm looking forward

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Speaker 1: to speaking to you throughout this whole process. No doubt

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Speaker 1: it's going to be a fascinating year. Thanks for joining today.

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Speaker 1: Jim Pulls in a CEE IO at the loose Hold Group.

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Speaker 1: The second impeachment trial of former President Trump really gets

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Speaker 1: underway today. Let's get the latest with June Grasso, Bloomberg

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Speaker 1: News legal analyst, host of Bloomberg Law. You can hear

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Speaker 1: that weeknights at ten pm Wall Street Time on Bloomberg Radio.

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Speaker 1: Joining us on the phone, June, talk to us a

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Speaker 1: little bit about what we can expect from the actual

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Speaker 1: trial aspect here going forward. Well, what's going to happen

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Speaker 1: today is probably starting out the same as yesterday, which

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Speaker 1: is there were going to be a video presentation of

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Speaker 1: what happened during the riot, and you can expect that

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Speaker 1: the house managers are going to lay out their case

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Speaker 1: in chronological order, so you're going to see a mix

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Speaker 1: of talking and video, and they're hoping that this will

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Speaker 1: sort of bring the senators back to that minute when

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Speaker 1: they faced the crowd and proved to them that President

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Speaker 1: Trump should be guilty of of inciting the crowd. Are

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Speaker 1: we absolutely certain that the time has passed when we

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Speaker 1: might actually have witnesses as that decision come and gone

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Speaker 1: at this point June, Well, the decision hasn't been made

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Speaker 1: about witnesses, but the feeling is from all the reporting

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Speaker 1: that there is probably not going to be any witnesses

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Speaker 1: because basically of the time factor, you have both sides

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Speaker 1: wanting this to end quickly. The Democrats want Joe Biden

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Speaker 1: to be able to get on with his agenda, and

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Speaker 1: they also want to present a concise case unlike the

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Speaker 1: last time, and the Republicans just wanted to be over.

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Speaker 1: But I think they're going to be missing. The House

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Speaker 1: managers are going to be missing an element of their

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Speaker 1: case if they don't have witnesses, because we don't know

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Speaker 1: what president former President Trump's reactions to the riot are.

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Speaker 1: We would have to hear that from witnesses, and also

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Speaker 1: the delay he took in doing anything to stop it,

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Speaker 1: and that goes to his intent and connects him to

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Speaker 1: the crowd. And that's the important part of their case

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Speaker 1: and the hard part. They have to connect him to

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Speaker 1: what happened. And that's bold, sorry jump in, but that's

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Speaker 1: what I find astonishing. So you can understand how Republicans

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Speaker 1: may not want witnesses, but I'm not quite sure why

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Speaker 1: the House managers don't want witnesses so badly. I know,

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Speaker 1: you join you say that it's the it's the Biden

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Speaker 1: agenda and so on, but you know, well, no, I

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Speaker 1: definitely think that they should have some witnesses. I think

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Speaker 1: that they're afraid that it will get into For example,

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Speaker 1: if you have a witness, then you have then the

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Speaker 1: other side is going to call a witness, so it

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Speaker 1: will drag it out. But I mean, look at Clinton's

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Speaker 1: impeachment trial, there were witnesses, and right now the Democrats

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Speaker 1: are in control. There were no witnesses at the last

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Speaker 1: impeachment trial of Donald Trump because they are Publicans were

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Speaker 1: in control and didn't want witnesses. So you know, from

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Speaker 1: my way of thinking, witnesses on at least one the

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Speaker 1: issue of President Trump's intent would really go a long way.

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Speaker 1: But also maybe the Democrats the House managers are thinking, well,

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Speaker 1: nothing is going to get seventeen Republicans to vote with us,

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Speaker 1: so why drag it out. It's hard to tell, June,

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Speaker 1: what do you think the Republican or the defendants defense

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Speaker 1: in fact will be? What a good question, Paul, because

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Speaker 1: I didn't necessarily get an answer. Yes, I know. The

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Speaker 1: problem was, you know, yesterday what should have been a

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Speaker 1: day that was fairly easy for them because they could

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Speaker 1: have made legal arguments, even though the legal arguments weren't strong.

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Speaker 1: What we saw that and it sort of echoed what

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Speaker 1: their brief was. Their first brief was you know, filled

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Speaker 1: with errors. There was a typo on the first page,

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Speaker 1: and it was very disjointed. And so the defense yesterday

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Speaker 1: from Mr Caster, I mean, was rambling, almost nonsensical at times,

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Speaker 1: and with the second lawyers shown there were conflicting arguments.

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Speaker 1: It was, you know, it was too soon to try

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Speaker 1: President Trump. There wasn't enough procedure, he didn't have any time.

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Speaker 1: But then it was too late to try him because

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Speaker 1: he was out of office, and there were factual mistakes

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Speaker 1: about the timeline of impeachment. So I mean, I suppose

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Speaker 1: what their best argument will be is what the hardest

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Speaker 1: part of the House Manager's cases, which is proving that

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Speaker 1: connecting President Trump to the actual assault on the capital,

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Speaker 1: and that is I mean, that's going to be tough.

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Speaker 1: If this for a criminal case, which it's not. I

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Speaker 1: don't think you could prove that beyond a reasonable doubt

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Speaker 1: with the kind of evidence they have. Now it's not

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Speaker 1: a criminal trial, and the as we've seen before, the

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Speaker 1: senators can do whatever they want. But I think that

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Speaker 1: that element is going to be something that the defense

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Speaker 1: can really focus on. You know President Trump speech, yes

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Speaker 1: it was, it was heated, but he also said, which

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Speaker 1: isn't played very much. What there was also a part

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Speaker 1: of that speech, because I listened to the whole thing

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Speaker 1: where he said, let's go to the capitol, let's march peacefully.

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Speaker 1: There was one there was one sentence about marching peaceful.

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Speaker 1: They could take that sentence and use that to make

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Speaker 1: their case that he did not want them to storm

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Speaker 1: the capitol. He had no idea that this was going

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Speaker 1: to happen. And since there'll be no witnesses, most likely

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Speaker 1: they may be able to make a good argument out

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Speaker 1: of that. I mean, they have a case to make.

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Speaker 1: Very very briefly, do introducing some of these new videos

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Speaker 1: or anything. Does that help with state cases or d

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Speaker 1: A cases down the line in any way. Well, I

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Speaker 1: think that those videos are what the federal prosecutors and

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Speaker 1: the FBI have been looking at to try to and

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Speaker 1: they've been charging people based on those videos. I mean

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Speaker 1: you'll see a charge and you'll see what the charges

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Speaker 1: and then you see the video of that person doing

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Speaker 1: something like throwing, you know, breaking through barriers. So yes,

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Speaker 1: those videos are going to be used. And that's tough

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Speaker 1: evidence to get by. It's very hard to say, for example, oh,

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Speaker 1: I didn't take this out of I didn't steal anything

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Speaker 1: from the capital when there's a picture of you, you know,

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Speaker 1: walking out with the podium of Jesse Pelosi. So I mean,

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Speaker 1: that is really tough to have it. I expect a

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Speaker 1: lot of play deals and I think the fans are

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Speaker 1: going to try to flip a lot of people. June,

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Speaker 1: we have to leave it there, but thank you so much,

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Speaker 1: and of course we'll be tuning into Bloomberg Law for

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Speaker 1: further updates. Kristin Bryant is a Bloomberg opinion columnists covering

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Speaker 1: industrial companies, also spacks and so much more. But he's

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Speaker 1: written a great column on Elon Musk's bitcoin bet. He

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Speaker 1: says it's a bean encounter as a nightmare. Chris, thanks

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Speaker 1: for joining. So the backstory is that Ellen decided to

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Speaker 1: put eight thirty billion dollars worth of Tesla's cash, not

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Speaker 1: his own cash, but Tesla's cash into bitcoin, and of

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Speaker 1: course we saw a variety of responses. So many of them,

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Speaker 1: as you can imagine, were absolutely thrilled with this idea,

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Speaker 1: and you know, recommended other companies do the same. But

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Speaker 1: what say you, was that advisable? M hm? So, to clarify,

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Speaker 1: a one and a half billion dollars of Tesla's cat

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Speaker 1: has gone into the bit climates is still an awful

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Speaker 1: lot in the context of Tesla's overall cash balance of

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Speaker 1: about nineteen billion, and yes, obviously a very risky approach

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Speaker 1: given how volatile bitcoin is. But the point of my

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Speaker 1: column is to focus on on a rather geeky point,

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Speaker 1: which is how you account for bitcoin, because cryptocurrencies are

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Speaker 1: still so new that the accounting authorities haven't yet developed

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Speaker 1: sort of real standards to how this is done, or

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Speaker 1: at least the ones that they have sort of imposed

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Speaker 1: on on bitcoin is sort of pretty outdated, and the

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Speaker 1: accounting of the bitcoin is going to cause Tesla all

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Speaker 1: kinds of problems, as I can explain. Um, the chief

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Speaker 1: problem is this, Essentially, if the price of bitcoin falls,

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Speaker 1: then Tesla will have to book an impairment that this

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Speaker 1: price goes back up again. It's not allowed to write

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Speaker 1: up the value of its bitcoin holding, so in a sense,

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Speaker 1: it can only lose Chris here. You know, as we've

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Speaker 1: seen companies, obviously the line item on the balance sheet

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Speaker 1: is cash and marketable securities. Bitcoin arguably is I guess

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Speaker 1: it's a marketable security, but it's a very violatile one,

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Speaker 1: as you point out in your column here. Um, so

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Speaker 1: what is a company like Tesla going to do here?

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Speaker 1: Because the marketer market on this thing is crazy given

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Speaker 1: the volatility. So what do they do? Do they hedge it? Well,

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Speaker 1: that's a good question. I think they didn't say anything

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Speaker 1: about hedging. Would be very surprised if they hedge it.

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Speaker 1: I mean, obviously a lot of companies do hedge their

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Speaker 1: foreign currency exposure. But it seems to me like tesser

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Speaker 1: Is is making an outright bet here on on the

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Speaker 1: price of bitcoin. Um, what they're gonna have to do

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Speaker 1: is is classify as an intangible asset on on the

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Speaker 1: balance sheet rather than lump it in with their cash

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Speaker 1: holdings or as a financial investment. And as I say,

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Speaker 1: well that that might end up doing, unfortunately, is hurting

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Speaker 1: Tadler's earnings because you might have an odd situation where

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Speaker 1: let's say the price of bitcoin is sold by one third,

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Speaker 1: which is historically you know, not unlikely, incredibly volatile acid

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Speaker 1: um Keadler having bought one and a half billion dollars work,

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Speaker 1: would have to book a five hundred million dollar lost

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Speaker 1: against its holdings that quarter, which obviously, you know, for

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Speaker 1: a company that still isn't that profitable, would actually be

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Speaker 1: quite problematic. Now, of course, analysts would be able to

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Speaker 1: look at the market price and say all that, actually

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Speaker 1: the price of bitcoin is has now gone back up

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Speaker 1: again and and and so this is uh, you know,

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Speaker 1: only a paper loss. Nevertheless, my point is that, um,

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Speaker 1: you know, a lot of people were saying, oh, look,

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Speaker 1: Tessler has bought bitcoin. Other companies are now going to

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Speaker 1: diversify their cash holdings and do something similar. I think,

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Speaker 1: unless these accounting rules are updated, a lot of companies

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Speaker 1: will be very uh you know, in this inclined to

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Speaker 1: do that because they don't want to have to explain

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Speaker 1: to their investors every cause of well, you know, the

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Speaker 1: price has gone up and down and we're booking and

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Speaker 1: impairment and are lot you know, we're actually making losses

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Speaker 1: and it's the profits due to our bitcoin investment. I

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Speaker 1: think that a lot of let's say, more mature companies

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Speaker 1: might find that problematic. Have you been able to speak

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Speaker 1: with anybody who wonders allowed about what might happen? So

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Speaker 1: we know that central banks have literally, you know, in

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Speaker 1: the last little while, just begun to take things like

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Speaker 1: cryptocurrencies seriously, and you know what they might mean for

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Speaker 1: the financial universe and so on. Is there a world

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Speaker 1: in which regulators and accounting regulators do have a separate

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Speaker 1: category for cryptocurrencies? I mean, this morning, he must tweeted

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Speaker 1: out that he's buying Dodge. Now, well, I think it's

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Speaker 1: fanness that the accounting authority is recognized that this is

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Speaker 1: a new world and that they do need to respond.

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Speaker 1: It's been on their radar for a few years now. Interestingly,

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Speaker 1: Japan's accounting authorities I think are the most forward thinking here.

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Speaker 1: They've already got a policy where essentially they allow companies

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Speaker 1: to to mark to market the value of their holdings

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Speaker 1: the international as of the i f r S rules,

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Speaker 1: which are used widely outside of UH the United States,

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Speaker 1: they're a bit different, but they they're slightly more nuanced

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Speaker 1: than the US approach, So I think, yes, they are looking.

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Speaker 1: But interestingly, the the US had an opportunity in October

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Speaker 1: when they find Financial Accounting Standards Board met to decide

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Speaker 1: they were going to look at and going forward in

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Speaker 1: terms of their technical agenda, and they declined to make

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Speaker 1: cryptocurrencies and item on that agenda suggesting and they don't

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Speaker 1: see it as a big parity, and it may well be,

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00:24:45,440 --> 00:24:48,159
Speaker 1: of course, but you know, Tesla remains an outlier. I

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Speaker 1: wrote about another company, micro Strategy, which had put you know,

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Speaker 1: a billion dollars into its UH into bitcoin, and they've

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Speaker 1: already seen you know, the price go up a lot

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Speaker 1: and their share prices booming. But the same time they've

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Speaker 1: also had to book impairments already because the price is

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Speaker 1: so volatile. But apart from these two prominent outliers, and

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Speaker 1: also Squares invested a bit, you haven't yet seen a

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Speaker 1: lot of other companies do this. And as I said,

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Speaker 1: given these accounting issues, until they're solved, maybe big way

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Speaker 1: so what do we has Tesla said Chris, kind of

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Speaker 1: what they want to do with this investment. Do they

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Speaker 1: view it as an investment per se? Why did they

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Speaker 1: do this? Well, I mean the in the disclosures they

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Speaker 1: say it's a matter of diversifying their cash holdings. And

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Speaker 1: I suppose you know, literally you because it said, well, okay,

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Speaker 1: we don't get much return on on cash at the moment,

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Speaker 1: so why not look for other opportunities. But of course

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Speaker 1: I don't think anybody takes that, uh, you know literally

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Speaker 1: in the center. Of course, there are far safer opportunities

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Speaker 1: to diversify your cash holdings. I mean, this is is clearly,

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Speaker 1: you know, a bet on on bitcoin, and and one

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Speaker 1: that's probably taken some of its investors by surprise. I

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Speaker 1: think there were some reporting out of the Times of

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Speaker 1: London this morning that some of the investors have said, well, look,

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Speaker 1: we're happy for you to do this, but you know,

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Speaker 1: there should be some limit on how much you should

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Speaker 1: be able to invest in in bitcoin, because you know,

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Speaker 1: Taysler until recently it was pretty cash strapped. Last year,

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Speaker 1: of course it went out and raised about twelve billion

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Speaker 1: from um investors. Now much more cash on the balance sheet,

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Speaker 1: but I think a lot of investors would be pretty

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Speaker 1: upset if they weren't spent it all on bitcoin, because

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Speaker 1: quite clearly the price can go up, but it can

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Speaker 1: also go down. Fascinating story, Chris, thanks for bringing it

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Speaker 1: to us. Chris Bryant Calmness covering industrial companies for Bloomberg Opinion.

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Speaker 1: He's based in Berlin. Thanks for listening to the Boomberg

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Speaker 1: Markets podcast. You can subscribe and listen to interviews at

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00:26:48,400 --> 00:26:52,040
Speaker 1: Apple Podcasts or whatever a podcast platform you prefer. I'm

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00:26:52,080 --> 00:26:55,240
Speaker 1: Bonnie Quinn. I'm on Twitter at Barney Quinn and Paul

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00:26:55,280 --> 00:26:58,160
Speaker 1: Sweeney I'm on Twitter at pt Sweeney. Before the podcast,

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Speaker 1: you can always catch us worldwide Bloomberg Radio m