Speaker 1: From Marhart where Innovation, money and power Collie in Silicon Vallet, Nbon.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: I'm Caroline Heide and Bloomberg's Wilter Quarters in New York
Speaker 2: at Amed Ludlow in San Francisco.
Speaker 3: This is Bloomberg Technology.
Speaker 2: Coming up full earnings coverage ahead of course, as Palatine
Speaker 2: plunges after issuing pretty disappointing forecast, will.
Speaker 4: Break down the numbers.
Speaker 3: Plus we push ahead to earnings out after the bell
Speaker 3: from chip giant Nvidia. Does the AI rally have staying power?
Speaker 2: And speaking of semiconductors, look, we're looking at the communications
Speaker 2: giant Huawei, maybe building a secret network of chip fabrications
Speaker 2: center across China. We'll bring you the y from our
Speaker 2: Bloomberg's c said, but first there, let's check in on
Speaker 2: these markets. Because well, even though we've got anxiety, it
Speaker 2: feels as though a short squeeze in the bond market
Speaker 2: is helping lift the tech stocks high. We're looking at
Speaker 2: more than one point six, we said, let's call it
Speaker 2: on the Nasdaq. On the upside, there is still much
Speaker 2: hope on the earning still to come, even though some
Speaker 2: of those earnings are about to dive into We're looking
Speaker 2: pretty ugly. I'm looking at a two year yeeld being
Speaker 2: squeezed higher. Therefore the boring costs come down nine basis
Speaker 2: points almost ten. We're seeing it across the entire curve,
Speaker 2: and you're seeing it across the entire world. You're seeing
Speaker 2: really bonbuying across in the UK and Europe. Here in
Speaker 2: the US as well, many feeling that basically we've been
Speaker 2: some technical elements at play here. We've been soling off
Speaker 2: so hard, so fast, and some ugly data when you're
Speaker 2: looking at the PMI data certainly slowing in Europe. Seeing
Speaker 2: weakness here in the US means maybe that bad news
Speaker 2: is good news at least on the day we're seeing
Speaker 2: the Golden Dragon China Index. Of course, this is a
Speaker 2: Naska Golden Dragon.
Speaker 1: Just shining like that.
Speaker 2: Actually, there has been buying in the Chinese names as well,
Speaker 2: even after we've seen such a selloff on the CSI
Speaker 2: three hundred, for example, at the training at the lowest.
Speaker 2: Since November, we've been on a look at what's happening
Speaker 2: in terms of the world a bitcoin look. We're mid
Speaker 2: this macro picture of bad news being good news. The
Speaker 2: dollar is selling off as many feel that perhaps the
Speaker 2: Fed can't tighten into that sort of moon music. Dollar
Speaker 2: goes lower, Bitcoin goes up five percentage point end, but
Speaker 2: go into the micro The earnings.
Speaker 3: Yeah, the big story and video expectations incredibly high. What
Speaker 3: we're forecasting is top line growth sixty five percent to
Speaker 3: eleven billion dollars in the fiscal second quarter. Institution investors
Speaker 3: want even more. They're looking for twelve billion dollars of
Speaker 3: sales data center the majority of that. Does the AI
Speaker 3: story have staying power? Is there still demand for the
Speaker 3: H one hundreds? What about the GH two hundred, the
Speaker 3: next gen GPU with greater memory capacity? How does that
Speaker 3: drive the story for in video for the rest of
Speaker 3: the year. Options market pricing a ten percent swing. This
Speaker 3: is almost four percent of the s and P five hundred.
Speaker 3: It is more than thirty percent of the nazdette one
Speaker 3: hundreds rally year to date. We care and we cannot
Speaker 3: wait for these earnings after the bell. The others end
Speaker 3: of the scale, opposite story is Peloton. The sock at
Speaker 3: a record low after it's fiscal fourth quarter earnings. It's
Speaker 3: guiding for the fiscal first quarter revenue of six hundred million,
Speaker 3: way below expectations even at the high end of its
Speaker 3: given range. The story in the quarter gone well, the
Speaker 3: seat Post issue a recall seven hundred and fifty thousand.
Speaker 3: People say, yeah, I do want a new seat post
Speaker 3: that was way above what Peloton expected. Subscribers hit past
Speaker 3: subscribers lost in the quarter twenty nine thousand. The story
Speaker 3: of Peloton going from a hardware maker to a subscription
Speaker 3: and software based provider is unraveling a little bit. Let's
Speaker 3: get more on these Peloton earnings. I'm ringing in Schwetter
Speaker 3: Cojuria everquaisi Alyss. Schweeder has an inline rating on the
Speaker 3: stock and a ten dollars price target Sweda. What worried
Speaker 3: you most about what you heard from Peloton?
Speaker 5: Well, thanks for having me ed. It's always great to
Speaker 5: be on. There are a few things. One is a Peloton.
Speaker 6: It's clear.
Speaker 5: It is clear that they are having some potentially structural
Speaker 5: issues in terms of being their.
Speaker 6: Ability to sell more hardware.
Speaker 5: The fundamental question for Peloton remains whether there are already
Speaker 5: enough number of households and.
Speaker 6: Owners for fitness equipment already.
Speaker 5: And the reason why I say that is because yes,
Speaker 5: it was a seasonally soft quarter, but they also changed pricing.
Speaker 6: On their hardware.
Speaker 5: They've also been marketing against it and Peloton is a
Speaker 5: very well known brand, and yet they came in below expectations.
Speaker 5: Understood that the seat recall did not help their brand,
Speaker 5: Imagine did not help in terms of the pausing of
Speaker 5: the subscription, So that fundamental question is in play in
Speaker 5: terms of the sustainability of top line growth. The second
Speaker 5: thing is profitability, even on Ibida. The Ibida for the
Speaker 5: coorting quarter came in low expectations and their guidance also
Speaker 5: is below where the street was for first fiscal quarter.
Speaker 5: That said, they guide it to positive free cashule in
Speaker 5: the back half of the next criscal year, and partly
Speaker 5: it is because they are going to be leaning into
Speaker 5: the holiday quarter. What this tells us is it is
Speaker 5: very difficult to drive top line growth.
Speaker 6: As well as show meaningful.
Speaker 5: Expansion in the bottom line, and for this company, this
Speaker 5: balance is going to be the biggest challenge. How are
Speaker 5: they going to show sustainable positive free cash flow and
Speaker 5: at the same time drive top line growth And we're
Speaker 5: seeing that they're having challenges already.
Speaker 3: So what's the answer?
Speaker 2: I mean, pm A comital market saying I like the
Speaker 2: ton of phrase. They should bear hug their loyalists. Basically,
Speaker 2: be smaller, be healthier, be more niche should we remind
Speaker 2: ourselves that this isn't a mass market player.
Speaker 6: I would agree with that.
Speaker 5: I mean, we had a tactical underperform into the print
Speaker 5: for that reason, because we thought that profitability for the
Speaker 5: quarter is going to be in question and that that
Speaker 5: came true. And I think that at this point that
Speaker 5: I would somewhat agree with that. Now the question is
Speaker 5: can Peloton be a standalone company for the foreseeable future?
Speaker 5: Is this something that can last as a standalone company?
Speaker 5: And I would argue that it may not. I mean,
Speaker 5: the pot as soon as they get to positive free
Speaker 5: cash on a sustainable basis with some sort of modestly
Speaker 5: higher top line growth, people the company may be looking
Speaker 5: for acquisition targets.
Speaker 3: Schweter, your ten dollar price target, your inline rating on
Speaker 3: the stock is in review. After the numbers, do you
Speaker 3: assess this company as a technology company or does it
Speaker 3: just make fitness equipment?
Speaker 5: With vary As the CEO, I would have to say,
Speaker 5: they're they're pivoting to a technology company.
Speaker 6: And the reason why you say.
Speaker 5: That is because they are managing the company. The leadership
Speaker 5: team is managing the company as a technology company with
Speaker 5: a great focus on the subscription piece.
Speaker 6: It is clear that that's what the intrinsic value of
Speaker 6: the company is.
Speaker 5: The retention of the subscribers is high, intrinsically high still
Speaker 5: even though the term was sequentially higher in the quarter.
Speaker 6: But that's where that's where the value of the company is.
Speaker 5: And the companies is actually focusing on the subscription piece.
Speaker 6: And some of the examples are.
Speaker 5: That they are allowing the three tiers of the subscription
Speaker 5: there they have several hundreds of thousands of monthly active
Speaker 5: users for the free subscription tier. They are also expanding
Speaker 5: those tiers into different price points. They're focusing more and
Speaker 5: their ability to enter these households at a lower price point.
Speaker 5: I think that that's their focus. The question is whether
Speaker 5: it's going to work or not.
Speaker 2: That's the question. Shwerda Kasharia, we want to thank you
Speaker 2: shout up because understand you're on vacation and you've come
Speaker 2: on to discuss all of this, diggest the numbers and.
Speaker 4: Give it to our audience.
Speaker 1: We really appreciate it.
Speaker 2: Great to stick with you. I mean, let's get on though,
Speaker 2: because we've got other earnings that are all important for
Speaker 2: the direction of the entire market at this stage. And
Speaker 2: VideA the chip company of course front and center when
Speaker 2: it comes to this AI frenzy and it's our ending tonight.
Speaker 2: We've been talking about it all week me Meg Intelligence
Speaker 2: senior semiconductor analyst Kanjunzman who's here with us, and so
Speaker 2: much baked in people raising their price targets into these numbers.
Speaker 2: Do you think we're going to see the sort of
Speaker 2: sixty five percent increase in revenue the market's anticipating.
Speaker 7: I do think there's a high confidence we see that number,
Speaker 7: and the primary driver of that is going to be
Speaker 7: their data center segment and driven by the A one
Speaker 7: hundreds and h one hundred hardware systems. Remember, data center
Speaker 7: is estimated to almost double on a year over a
Speaker 7: year basis and add about not of fifteen billion dollars
Speaker 7: to a company that did twenty seven billion last year.
Speaker 7: There could be some addition from the gaming, but it's
Speaker 7: primarily going to come from the data center segment.
Speaker 3: You know you're coming at this from the Bloomberg Intelligence
Speaker 3: analysis perspective, right. The story is, does the AI momentum
Speaker 3: have staying power. So what do you need to hear
Speaker 3: from Nvidia to believe that, you know, the hyperscalers and
Speaker 3: the LLLM developers and everyone else continues to buy into
Speaker 3: AI for the rest of the year and beyond.
Speaker 7: I mean, look, since the last running call, we have
Speaker 7: seen a lot of demand strength signals that the demand
Speaker 7: is there and rising. The two key things we want
Speaker 7: to hear is can they ship to the demand and
Speaker 7: are they able to get successfully their additional supply here?
Speaker 7: And also a validation on visibility and backlog orders going
Speaker 7: into the next year.
Speaker 3: You know, I think for me, Caroline, the big question
Speaker 3: as well is technology leadership. You know we've covered on
Speaker 3: the show. AMD has its own offering in the GPOs
Speaker 3: GPUCPU hybrid space. Intel wants a piece of the pie.
Speaker 3: I wonder how they maintain their leadership.
Speaker 2: It does come down to market dynamics here Conngenta and
Speaker 2: really it's felt like in videos the only game in town.
Speaker 2: Just look at it's trillion dollar market valuation when it
Speaker 2: comes on bets and AI, is it or are other
Speaker 2: players playing catch up here?
Speaker 7: When look at the most fastest growing market right now
Speaker 7: in semiconductors, so definitely other players are trying to get
Speaker 7: a piece of it and are playing catch up. We
Speaker 7: don't expect Nvidia to lose its leadership anytime soon, but
Speaker 7: I think there's definitely room for other players to grab
Speaker 7: a piece of pie, which is again a huge pie,
Speaker 7: and a small percentage could add in the order of
Speaker 7: billions of dollars to their revenues.
Speaker 3: When the bar is high, and when the stakes are high,
Speaker 3: there's always room for disappointment. How worried are you about
Speaker 3: the supply issue at TSMC being able to hand over
Speaker 3: enough chips.
Speaker 7: I think, look, the supply is definitely going to be,
Speaker 7: like I said, a key factor going into today's call,
Speaker 7: in the near term. I'm not as worried because the
Speaker 7: company seems confident that they've garnered enough supply to meet
Speaker 7: at least the guided numbers, which are driven by them.
Speaker 7: I would definitely like to see if they can meet
Speaker 7: the long term, especially the twenty twenty four numbers, and
Speaker 7: gather supply for that.
Speaker 3: You remind us of something very important that the guided
Speaker 3: numbers did come from the company, and that's why that
Speaker 3: note from City about institutional investors seeing even greater upline
Speaker 3: growth is worth bearing in mind. Conjent Siavani the Bloomberg
Speaker 3: Intelligence thank you time for talking tech first Up. India
Speaker 3: is now the first country to land a spacecraft near
Speaker 3: the Moon's south pole. The Chandrayan three launched last month
Speaker 3: and is carrying a rover now tasks of analyzing the
Speaker 3: chemical makeup of the Moon's surface. Russia recently tried to
Speaker 3: land in the same area but crashed into the Moon
Speaker 3: following an engine malfunction. And foreign investors are selling off
Speaker 3: China's blue chip stocks, extending the streak of outflows over
Speaker 3: the course of thirteen days, the longest on record. Data
Speaker 3: track by Bloomberg found that investors have offloaded the equivalent
Speaker 3: of ten point seven billion dollars between August seventh and eighteen.
Speaker 3: Some of the stocks most sold include solar company lang
Speaker 3: Gee Ev, maker byd and medical supply maker Mindre And.
Speaker 3: Speaking of which, telecommunications giant Huawei may be building a
Speaker 3: secret network of chip fabrication centers across China. That's according
Speaker 3: to the Semiconductor Industry Association, the leading global trade group
Speaker 3: for chips. Huawei has been blacklisted by the US Department
Speaker 3: of Commerce amid tensions with China and a shadow chips
Speaker 3: manufacturing network will allow the company to skirt those US sanctions.
Speaker 8: Caroline.
Speaker 2: We're going to be digging into that story so much
Speaker 2: a little bit later in the show, but for here
Speaker 2: and now, let's just talk about a meeting that's going on.
Speaker 2: It's the SEC perhaps imposing new requirements on hedge funds,
Speaker 2: on private equity firms to disclose fees, which is aimed
Speaker 2: at impacting, of course, investors helping them. We'll see what
Speaker 2: the market makes of it, but we mention Ali basych
Speaker 2: Is here. And ultimately, why are venture capital companies that
Speaker 2: we talk about a lot from this show, like Andresen
Speaker 2: Horowitz worried about these new rules?
Speaker 9: Andresen Horowitz and remember, you have to think about these
Speaker 9: other funds like Tiger Global and d One that had
Speaker 9: been traditional headfunds moving more into the private equity structure,
Speaker 9: venture capital structures.
Speaker 6: What they're initially concerned.
Speaker 9: About is straightforward, very much new rules for a seventeen
Speaker 9: trillion dollar industry that had not based this much disclosure
Speaker 9: or scrutiny before. But the industry has ballooned quite meaningfully.
Speaker 9: I will also say, even though they're concerned about these
Speaker 9: new rules, one of which involves sidecar vehicles, and these
Speaker 9: are preferential treatment which often apply to large investors that
Speaker 9: tend to co invest and do all sorts of other
Speaker 9: deals with them. The SEC is trying to level the
Speaker 9: playing field in terms of fee structures. Now, importantly, there
Speaker 9: have already been large wins for the investment industry when
Speaker 9: it comes to the rules as they have been put
Speaker 9: out today. When you look at the open meeting, they
Speaker 9: are still very much discussing these rules.
Speaker 3: But the Commission is.
Speaker 9: Made out of five members, in which three of them
Speaker 9: are democratic expected to vote in favor of these rules.
Speaker 9: Where the industry has already won is this idea of
Speaker 9: a grandfathering provision, so existing agreements with investors.
Speaker 1: Will continue to live on.
Speaker 6: So this will be for.
Speaker 9: New investors and new agreements that are being made. There's
Speaker 9: also an idea here of indemnification. There is a worry
Speaker 9: that the standard of negligence would also be made more strict,
Speaker 9: which would, in theory, according to industry participants, restrict certain
Speaker 9: forms of risk taking because it would be easier to
Speaker 9: sue your investment advisor. There's another thing I want to
Speaker 9: pull up here, let's pull up a screen here from
Speaker 9: pangaeas Terry Haynes, who's already weigh in with a lot
Speaker 9: of doubt. Remember, the MFA has already said it could
Speaker 9: potentially sue within two weeks. But then Terry Haynes also
Speaker 9: believes that the SEC gets stopped in its tracks and
Speaker 9: will ultimately get shut down in its venture here because
Speaker 9: the courts may put this plan on hold and the
Speaker 9: court lower courts won't be convinced that the SEC would
Speaker 9: be likely to prevail on appeal.
Speaker 1: So there's a lot of.
Speaker 9: Doubt on how much these rules see.
Speaker 3: The light of day.
Speaker 1: But certainly it is.
Speaker 9: A moment of tension between these private funds and their
Speaker 9: main regulators.
Speaker 2: Who lies on how much transparency ultimately investors get Shanani Us,
Speaker 2: we thank you so much for the breakdown. Meanwhile, coming up,
Speaker 2: we're going to be talking to the CEO of Financial
Speaker 2: Platform Ramp. This is the company securing some three hundred
Speaker 2: million dollars an additional funding and time is going to
Speaker 2: do with us from New York, from San Francisco.
Speaker 4: This is booting bag technology.
Speaker 2: Time now for work shifting is where we look at
Speaker 2: the changing landscape of the labor market amid some advances
Speaker 2: in technology, and today we're focused on how corporate legal departments, well,
Speaker 2: they're tentatively embracing artificial intelligence by harnessing AI to do
Speaker 2: the grunt work on tasks like reviewing simple contracts in
Speaker 2: house counsel that can reduce the time and the money
Speaker 2: of course needed.
Speaker 4: To perform those tasks to a fraction of what would
Speaker 4: be needed by humans.
Speaker 2: But since generator of AI is new, the industry is
Speaker 2: navigating critical questions around the security and the quality of
Speaker 2: the data.
Speaker 3: So slowly, slowly we go.
Speaker 2: Meanwhile, let's look at another way in which work has
Speaker 2: shifted and maybe got a little bit cheaper for you,
Speaker 2: because financial services platform RAMPS just raised three hundred million
Speaker 2: dollars for a total valuation of five point eight billion.
Speaker 2: We spoke with one of the investors, Keith Roboy of
Speaker 2: Founder's Fund, who had some thoughts on well AI more
Speaker 2: broadly in the space stick listen, and.
Speaker 10: Some of these technologies are disruptive, and they disrupt incumbents
Speaker 10: and their powers, and some actually enabling cumbents to get stronger.
Speaker 10: AI is most likely going to generate more power for
Speaker 10: large tech, large market tech companies not really be a substitute,
Speaker 10: and if there is a substitute, it's probably going to
Speaker 10: be open AI, which we've investigated.
Speaker 2: Unfortunately, he's also invested in RAMP, and RAMP CEO Eric
Speaker 2: Lyman is here on the back of his fundraise, and
Speaker 2: we're not going to start on AI, even though that's
Speaker 2: where Keith was going at that point. But we're going
Speaker 2: to go on this environment for fundraising. You've got it,
Speaker 2: you've got the money, but you have significantly cut your valuation.
Speaker 3: Why do that?
Speaker 4: Why was it just you.
Speaker 2: Needed the money in the here and the now.
Speaker 11: This was an opportunistic raise really for us. We were
Speaker 11: approached by our investors who were excited by the extraordinary
Speaker 11: growth we announced that we were. The fact we reach
Speaker 11: over three hundred million dollars in annualized revenue less than
Speaker 11: three and a half years from the launch for products
Speaker 11: where the fastest ever. And really it's just about investing customers.
Speaker 11: Most of our competitors and most of the industry are
Speaker 11: spending less on their customer experience. Ramp's purpose is to
Speaker 11: help our customers' businesses be more profitably, more efficient with
Speaker 11: every dollar spent, and we view this as an extraordinary
Speaker 11: opportunity to increase not only our balance sheet, but also
Speaker 11: increase the pace at which we can invest in innovations
Speaker 11: for our customers. So we're super excited to do this.
Speaker 3: Eric on the three hundred million in annualized revenue. There
Speaker 3: will be lots of founders watching this show who may
Speaker 3: be able to raise opportunistically as you put it, or
Speaker 3: face you know, unfavorable terms. How much emphasis did investors
Speaker 3: put on that metric and what other metrics did they
Speaker 3: want to see from you before they signed off on
Speaker 3: the round.
Speaker 11: Of course, I mean, I think for most investors it's
Speaker 11: a simple proposition. Is this a large market? Are you
Speaker 11: building a product that can serve an extraordinary number of customers?
Speaker 11: Is to structurally great business? And last, is this a
Speaker 11: product that customers love? For us, what made the raise
Speaker 11: simple was first the growth of the business. Since the
Speaker 11: last raised, transaction volume on RAMS platform is increased by
Speaker 11: a factor of over six into the tens of billions
Speaker 11: of dollars per year. We are the number one rated
Speaker 11: spend management platform in the United States, and we believe
Speaker 11: there's no better deal in business. We help the average
Speaker 11: business save three and a half percent per year on
Speaker 11: their expenses from corporate cards, expense management to accounting automation,
Speaker 11: and I think investors were really excited for the prospects
Speaker 11: of RAMP taking on what has been a pretty sleepy
Speaker 11: industry classically.
Speaker 2: How do you take it on with this three hundred million?
Speaker 2: Is it more about marketing spend? Is it organic growth?
Speaker 2: Is it inorganic and purchasing.
Speaker 11: Yeah, it's two sets of things. First, it's that customer experience.
Speaker 11: So at the time of the last raise, we had
Speaker 11: saved all time for customers one hundred million dollars. Now
Speaker 11: that figures over six hundred million dollars in over eight
Speaker 11: and a half million hours of work. And we've done
Speaker 11: that by launching into new verticals. When we last launched,
Speaker 11: we were only a corporate card with expense management. We're
Speaker 11: now the fastest growing accounts payable platform in the US
Speaker 11: recently spend in a procurement, travel and the like. So
Speaker 11: some of this is making the experience better for the
Speaker 11: average customer, and some of this is reaching more businesses.
Speaker 11: The number of businesses that use RAMP today number over
Speaker 11: fifteen thousand, whether that's small businesses to leading publicly traded companies,
Speaker 11: and so a lot of this really is expanding and
Speaker 11: taking market share.
Speaker 3: Eric, your pitch is that incentives are aligned, right, what's
Speaker 3: good for your customers is good for you and what's
Speaker 3: good for the advice versa. Does that sound too good
Speaker 3: to be true?
Speaker 11: You know, we think aligned businesses and customer obsessed businesses win.
Speaker 11: I think for too long, this was an industry where
Speaker 11: if you were a bank you could move money and
Speaker 11: if you weren't you couldn't. And as the world went
Speaker 11: from no phones the flip phones, iPhones, your credit card
Speaker 11: never got better. And I think ramps growth really is
Speaker 11: a reflection of our end alignment really is with the
Speaker 11: winning recipe. Helping customers spend less we think, in the
Speaker 11: long run will allow us to grow faster as we have,
Speaker 11: will allow our businesses to be more more profitable and
Speaker 11: long term enduring, which we also think makes for a
Speaker 11: better bottom line, not just for customers but for RAMP
Speaker 11: as well.
Speaker 2: It's interesting Keith was sort of saying, look, this is
Speaker 2: a moment where companies have to get more realistic about
Speaker 2: what they're worth about valuations. You've clearly done that and
Speaker 2: taken it on in this opportunistic fashion. What are the
Speaker 2: other headaches for you? Though in this macro environment, is
Speaker 2: it talent?
Speaker 3: Is it?
Speaker 2: You know, just continuing to get more clarity on why
Speaker 2: this economy goes. How do you ensure that you can
Speaker 2: grow the business in a mindful manner right now?
Speaker 11: Yeah, it's a really great question, and in part this
Speaker 11: is exactly why we're so excited. You know, I think
Speaker 11: that this is an uncertain rate environment. You know, this
Speaker 11: is one of the fastest rise in interest rates really
Speaker 11: in forty years. And to have additional capital to almost
Speaker 11: double the balance sheet and be able to invest deeply
Speaker 11: no matter the nature of the market, was super excited.
Speaker 11: I think to your point, so many other firms are
Speaker 11: hiring less many or doing reductions in force. So many
Speaker 11: other firms are making the customer experience worse in order
Speaker 11: to shore at margins. And for us, as much as
Speaker 11: we've grown, we truly believe we have ninety nine percent
Speaker 11: plus of the market to go. Fifteen thousand businesses a
Speaker 11: lot of businesses, but there's millions of businesses that could
Speaker 11: be using ramp.
Speaker 3: Eric one word answer, Do you need more sales reps
Speaker 3: or more engineers?
Speaker 12: Well?
Speaker 11: Both?
Speaker 3: Both? All right? Right, conditioning one word, no, it was
Speaker 3: you met my condition three hundred million dollars round a
Speaker 3: down round, but it still sounds like you guys are
Speaker 3: in growth mode. Thank you very much. Okay, welcome back
Speaker 3: to bloombog Technology. Ed Ludlow here in San Francisco.
Speaker 2: I'm Caroline Hein in New York, and let's check in
Speaker 2: on these markets because actually we're growing higher. We're managing
Speaker 2: to shake off some of the anxiety because today bad
Speaker 2: news is good news. Today we saw the economic data
Speaker 2: coming from the US and notably from Europe, those pmis
Speaker 2: just looking. But does that mean that central banks have
Speaker 2: to pull back on their focus on inflation we're seeing
Speaker 2: and that's that one hundred and one point four percent
Speaker 2: the two year yields sinking dramatically, and in fact, we're
Speaker 2: seeing bon yields pulled down across the curve and across
Speaker 2: the globe. We're downline basis points. This is many A
Speaker 2: talking about a short squeeze. How far, how fast we've
Speaker 2: already run up in terms of boring costs. Bitcoin up
Speaker 2: one point nine percent, almost two percent higher on the day,
Speaker 2: twenty six thousand, three hundred. As we see the dollar
Speaker 2: week and moving on and look at some individual names
Speaker 2: that were so important to this market. Today Peloton twenty four,
Speaker 2: I mean a quarter of its market capitalization wiped out
Speaker 2: because they are losing sales, they're losing subscriptions, and they're
Speaker 2: not turning around this business quickly enough. Doesn't we need
Speaker 2: to become once again more niche.
Speaker 4: We're down.
Speaker 2: We're seeing Netflix so on the higher side, Netflix tiving
Speaker 2: a great day as we see some particular data coming
Speaker 2: from Antenna, saying it looks as though we're still seeing
Speaker 2: subscriptions added in the United States as we see that
Speaker 2: cracked down on passwords, and in Vidia it's up two
Speaker 2: point three percent. This has been of a rollercoaster over
Speaker 2: the last few days. Ed as we look towards the
Speaker 2: all important earnings after this bill, bell can we draw
Speaker 2: I've hire in terms of revenue by some sixty five percent,
Speaker 2: but they're some of the public new traded companies.
Speaker 8: We're talking about it though.
Speaker 3: Now mega day in public markets. That's so many headlines
Speaker 3: in private markets and money being raised. Cell therapy contract
Speaker 3: manufacturer Solaris has raised two hundred and fifty five million
Speaker 3: from investors to build a high tech plant over in
Speaker 3: New Jersey, which is an important US hub for pharmaceutical
Speaker 3: industry production and research. Joining us here in San Francisco
Speaker 3: is Fabian girling House, co founder and CEO of Solaris.
Speaker 3: So this business is South San Francisco based. But you've
Speaker 3: raised a ton of cash to build a very high tech, robotic,
Speaker 3: software driven plant in New Jersey.
Speaker 8: Why New Jersey, that's correct.
Speaker 12: New Jersey is a hub for biopharmaceutical manufacturing in the US,
Speaker 12: so it's natural next up before expanding to Europe and
Speaker 12: ultimately to Asia. So delighted to announce that today we
Speaker 12: raised a two hundred and fifty five million dollar blockbuster.
Speaker 12: Is seriously to accelerate access to life saving cell therapies.
Speaker 8: That's where we're up to at Solaris.
Speaker 12: By deploying our fully automated self a manufacturing platform, the
Speaker 12: cell Shuttle, in smart factories around the globe to meet
Speaker 12: total patient demands.
Speaker 3: The idea is that if you are, for example, Bristol,
Speaker 3: one of the people or companies in your round developing
Speaker 3: a cell therapy, you can scale up, help them take
Speaker 3: it from a research driven project to a commercial project.
Speaker 3: How does it work?
Speaker 8: That's exactly right. Let's take a look at the problem.
Speaker 12: First, cell therapies are a breakthrough in modern medicine that
Speaker 12: have proven their potential to cure very aggressive diseases that
Speaker 12: were previously untreatable. We've actually seen children with very aggressive
Speaker 12: types of blood cancers get cured the cancer free ten
Speaker 12: years later. But right now, self aber manufacturing with manual
Speaker 12: conventional methods is expensive, failure prone, and impossible to scale.
Speaker 12: So that limits access and as a result, patients are
Speaker 12: dying on the weightlist. Let me make this really real
Speaker 12: and imagine. Imagine that your child has cancer and there
Speaker 12: is an FDA approved cell therapy on the market that
Speaker 12: could most likely would cure your child. Yet your kids
Speaker 12: still dies because the patients are unable to access these
Speaker 12: cell therapies because of the manufacturing bottleneck.
Speaker 8: That's the problem that we're solving.
Speaker 3: It's a lot, Caroline. That is a reality that no
Speaker 3: one wants to imagine that if Fabian makes a good
Speaker 3: point FDA approval, there's regulatory risk in this.
Speaker 2: Yeah, emotive Fabian is what you're sparking there, But to reality,
Speaker 2: regulatory approval is necessary.
Speaker 4: What are the risks around that?
Speaker 2: Because that could deeply hold back the way in which
Speaker 2: your business grows.
Speaker 12: Absolutely so, the Celciattle platform that we've developed is actually
Speaker 12: not a medical device, so doesn't need to go through
Speaker 12: its own clinical trials before it can be used. What
Speaker 12: does need FDA approval are the clinical trials by the sponsors.
Speaker 12: That is to say, the buyer to companies. The farmer
Speaker 12: company is our clients, and our IDMO business actually supports
Speaker 12: them through this process with regulatory support.
Speaker 2: Okay, so I'm sure that to grease the wheels and
Speaker 2: people wanting to come back and use your technology, they're
Speaker 2: going to have to see some regulatory approval. So still
Speaker 2: some lines of things that you can't control. What you
Speaker 2: can control, though, is how you market yourself, not just
Speaker 2: as you say in the US and New Jersey, but
Speaker 2: also worldwide. You just mentioned Europe and Asia. We're exactly
Speaker 2: looking there.
Speaker 12: Yeah, so locations aren't finalized in Europe and Asia, but
Speaker 12: as we mentioned, we just announced that we're opening up
Speaker 12: the world's first IDMO smart factory in Bridgewater, New Jersey.
Speaker 12: That's a site with one hundred and eighteen thousand square
Speaker 12: feet that's about the size of two football fields, filled
Speaker 12: with robots, all manufacturing cures for cancer and fully automated fashion.
Speaker 12: We're actually deploying up to fifty cell shuttles in there.
Speaker 12: That'll get us up to about a forty thousand cell
Speaker 12: therapy doses produced per year.
Speaker 8: And just to put.
Speaker 12: That into perspective for you, that's about ten times as
Speaker 12: many cell therapy doses produced out of a facility of
Speaker 12: the size compared with manual conventional cell dimnufacturing methods by
Speaker 12: conventional CDMOS, so tenx in productivity. How are we achieving
Speaker 12: this Well, We've designed, built tested a fully automated robotic
Speaker 12: cell manufacturing solution called the cell Shuttle. The cell Shuttle
Speaker 12: is about the size of an Amazon truck. Inside you've
Speaker 12: got about two robots and then it combines the functionality
Speaker 12: of about one hundred different bench top instruments in one machine.
Speaker 12: Net effect, it brings down the cost of manufacturing and
Speaker 12: the labor. We're actually bringing down labor and facility size
Speaker 12: by about ninety percent.
Speaker 8: So what that means, I.
Speaker 12: Said, with a facility of the same size and the
Speaker 12: same workforce, we can actually produce ten times as many
Speaker 12: cell therapy doses per year compared with conventional manufacturing approaches.
Speaker 3: So you've not selected a site for a third US
Speaker 3: plan or a European site, but you're looking.
Speaker 12: We've got two sites in the US at this point.
Speaker 12: We've got the site in South San Francisco where based
Speaker 12: for pre clin caproscity development clinical manufacturing, and then the
Speaker 12: New Jersey side for clinical and commercial scale manufacturing. And
Speaker 12: as the next step, we're going to open up a
Speaker 12: site in Europe in twenty twenty four and then thereafter.
Speaker 8: To go to Asia as well well.
Speaker 3: When you do announce that site, you can come back
Speaker 3: on Bloomberg Technology and tell Caroline and I take you
Speaker 3: up on a baby and you mentioned a lot of
Speaker 3: big numbers. One you didn't mention was your company's valuation.
Speaker 3: Two hundred and fifty five million for a Series C
Speaker 3: is a lot of money a unicorn, at least at
Speaker 3: this stage.
Speaker 8: It's a fair question.
Speaker 12: Respectfully, we're still a private company, so we're not disclosing
Speaker 12: the precise valuation. What I can tell you is that
Speaker 12: this is a massive round with a massive step up
Speaker 12: in valuation.
Speaker 8: So while everybody else in this market.
Speaker 12: Seems to be raising either flat rounds or down rounds,
Speaker 12: we raised at a massive step up in valuation, so
Speaker 12: we're very happy with the result. On top of that,
Speaker 12: it's a blockbuster round. Two hundred and fifty five million dollars.
Speaker 12: That's more money than other companies have raised in their IPO.
Speaker 12: So we're very proud of this result and I think
Speaker 12: it certainly reflects the excitement and the confidence in the
Speaker 12: investor community for what we've built already, the speed with
Speaker 12: what with which we've built the cell Shuttle platform, and
Speaker 12: the future strategy, the plans for what's to come, as
Speaker 12: well as the data that we've produced and published on
Speaker 12: our website.
Speaker 8: Today.
Speaker 2: To be fair, RAMP had raised three hundred millions, so
Speaker 2: slightly pipping you to the post, but it is still
Speaker 2: a phenomenal amount of money, Fabian, and clearly your optimism
Speaker 2: is there. Let's look at who invested in new co
Speaker 2: disruptive technology. He's the vcarm of Coke Industries. Of course,
Speaker 2: we've also got some individuals and most notably you've got
Speaker 2: some sort of strategic investors. Can you talk to us
Speaker 2: a little bit about the likes of Bristol mask Wi like,
Speaker 2: are they customers future customers as well as being backers?
Speaker 8: Absolutely so.
Speaker 12: As you mentioned, our round was led by Coco Shoptive Technologies,
Speaker 12: with new investors participating, specifically DFJ growth in Bloomberg's family Office,
Speaker 12: Willett Advisors and Bristol Myers Squip, and then we had
Speaker 12: really strong participation from our insiders as well, notably Eclipse,
Speaker 12: ABC and Dasheng.
Speaker 8: I'm very grateful for all of their support. On Bristol
Speaker 8: Mayo squib.
Speaker 12: As you mentioned Global Pharmaceutical Company, a self therapy leader,
Speaker 12: We're very proud to have them as an investor in
Speaker 12: this round, and we're certainly also working with them on
Speaker 12: the corporate partnership. So more news to come in the
Speaker 12: near future.
Speaker 3: Here just to point out in my called Bloomberg, the
Speaker 3: founder majority owner at Bloomberg LP is of course the
Speaker 3: parent company of Bloomberg Media and Bloomberg Television. Final question
Speaker 3: from me, and I want to go back to what
Speaker 3: Caroline was asking you. If your research stage customers don't
Speaker 3: get those FDA approvals, you can't ramp up the commercial
Speaker 3: stage of output. You know, how how do you make
Speaker 3: sure that that process does happen.
Speaker 12: That's it's a really good point. So in most cases
Speaker 12: there's a clinical trial required. There's one exception when when
Speaker 12: a drug is already FDA approved on the market, it
Speaker 12: already has FDA approval.
Speaker 8: So then if you if.
Speaker 12: We stick exactly to the process that does farming company
Speaker 12: is running internally today and we just switch out the
Speaker 12: underlying manufacturing platform to the cell shuttle. In principle that
Speaker 12: does not necessitate a new clinical trial, but we can
Speaker 12: move into manufacturing directly.
Speaker 8: So there are there are shortcuts.
Speaker 2: I mean, great to have some time with you. Thanks
Speaker 2: for bringing the enthusiasm the drive. Fabian gelling House course,
Speaker 2: co founder and CEO Ofcillaris. There wean while coming up
Speaker 2: look in an effort to skirt us restriction, Huawei maybe
Speaker 2: secretly building a network of semiconductive production. We'll have more
Speaker 2: on the warning against the blacklisted company and how the
Speaker 2: Biden administration may take action.
Speaker 1: Well, let's go.
Speaker 2: More global as well and focus on India for a moment.
Speaker 2: Snap As we head Spray, we're just seeing it not
Speaker 2: barely moving, but the parent company of Snapchat is appointing
Speaker 2: a former Google executive to lead its India operations, and
Speaker 2: of course it's striving to become a more major social
Speaker 2: media force there and a key growth market. The company
Speaker 2: also announced a new localized organizational structure for the region
Speaker 2: and the teams and those are going to be charge
Speaker 2: of content. They're going to be in charge of the
Speaker 2: creator ecosystems, and they're all going to be reporting to
Speaker 2: the new exec who's Pulvit Trevedi from New York as
Speaker 2: Ruber Technology.
Speaker 3: We want to return to a story that we mentioned
Speaker 3: earlier about Huawei. A trade group is warning that the
Speaker 3: telecommunications company might be secretly building a network for chips
Speaker 3: production in an effort to skirt US curbs and more.
Speaker 3: Let's bring in the reporter who broke that story, Blue Besi,
Speaker 3: inking with me on set in San Francisco. This is
Speaker 3: not straightforward explained the basics of what you found last year.
Speaker 1: As we know, sorry not last year.
Speaker 13: Huawei has essentially been blacklisted by the US government. It's
Speaker 13: very difficult for US based companies to supply them with technology, and.
Speaker 1: Most important among that is.
Speaker 13: Basically cutting Huawei off from its supply of chips. And
Speaker 13: what this report says, and the backs up some reporting
Speaker 13: that we've done earlier, is that really Huawei is trying
Speaker 13: to go to do a DIY effort to build a
Speaker 13: local network that can replace that overseas supply of these
Speaker 13: crucial components which will keep it in business, keep it
Speaker 13: able to make these telecommunications systems its primary business.
Speaker 2: Okay, So basically it uses other companies other names to
Speaker 2: try and get equipment that otherwise it wouldn't be able
Speaker 2: to get hold of. Ian who's been shining a light
Speaker 2: on all of this. How have you managed to realize
Speaker 2: this is occurring?
Speaker 13: Yeah, I mean, we originally broke the news that one
Speaker 13: of these Chinese companies was in fact connected to Uahwei.
Speaker 13: That was a fact, took effectively a shell company using
Speaker 13: government money buying US and other equipment to continue Huawei's
Speaker 13: ability to get these components, and the US Department of
Speaker 13: Commerce went on to blacklist that company. And now what
Speaker 13: we've found is more industry information and got a reaction
Speaker 13: out of the US government that's said it wasn't just
Speaker 13: that particular company, it was other companies as well that
Speaker 13: are indeed.
Speaker 1: Already on the blacklist.
Speaker 13: They've continued or they've stockpiled US equipment other foreign equipment
Speaker 13: to stay in production. And they are, in fact, even
Speaker 13: though the name doesn't say so, supplying Huawei with some
Speaker 13: of the components, or attempting to supply Huawei with some
Speaker 13: of the components that it needs.
Speaker 1: KYC.
Speaker 2: You know your customer, boy, it must be hard for
Speaker 2: a lot of these companies right now.
Speaker 13: Yeah, I mean there's where does the burden of proof lie?
Speaker 13: Where does the investigation lie? And it's a complicated process.
Speaker 13: Tracing individual chip shipments and things like that is next
Speaker 13: to impossible. Where is a tighter area of focus is
Speaker 13: that some of these chip making pieces of equipment are
Speaker 13: worth tens of millions of dollars, even hundreds of million dollars,
Speaker 13: So obviously there aren't as.
Speaker 1: Many of those.
Speaker 13: They're an easier thing to track where they're going, who's
Speaker 13: using them, and what they're using them for. Nonetheless, because
Speaker 13: regulations are evolving and are being effectively tightened, this is
Speaker 13: a kind of a moving process.
Speaker 3: I just want to point out that Huawei p XW
Speaker 3: for Gen, Ginhoa, the other companies identified by the SIA
Speaker 3: and reported by Bloomberg did not respond to requests for comment.
Speaker 3: You notice that you noted that in your prior reporting.
Speaker 3: The BIS then acted based on that prior reporting. What
Speaker 3: have they said in response to this latest article.
Speaker 13: I when we put that in our story and they said, look,
Speaker 13: we're not surprised that Chinese government money is going into
Speaker 13: efforts to try to keep for this enterprise underway.
Speaker 1: If we perceived this to be a threat to national security.
Speaker 13: We will take the action required to firophrase what they said,
Speaker 13: and obviously that implies that we might say more restrictions Ian.
Speaker 2: It's an amazing piece of reporting. Thank you very much.
Speaker 2: With your colleague w Wu from in Taiwan, Bloomberg's inking
Speaker 2: pacts of breaking it down. Meanwhile, we are some more
Speaker 2: breaking news for you. We work now Courses understand a
Speaker 2: lot of stress on the business. It's running up advisors
Speaker 2: again for help on a restructuring struggling with a really
Speaker 2: heavy debt load. Of course some poor financial performances that
Speaker 2: have come to light of late, and of course earlier
Speaker 2: this month they told investors there's substantial doubt about its
Speaker 2: ability to stay in business. It wants to avoid Chapter
Speaker 2: eleven bankruptcy filing AIRD, it wants to restructure its debts
Speaker 2: outside of court. So understanding that they've hired real estate
Speaker 2: advisor Hilco Global once again, it's tapping the consultant Alvarez
Speaker 2: and Marcel, and they've re engaged law firm Kirkland and Ellis. Basically,
Speaker 2: they need to kind of reduce and get out of
Speaker 2: some of some very expensive leases in their more expensive markets.
Speaker 2: The company is saying to us at the moment, they're
Speaker 2: investing their product offerings and taking it necessary steps to
Speaker 2: reduce rent and tendancy costs. We're off by sixteen percent,
Speaker 2: but it's a penny stock air yep company.
Speaker 3: We continue to track and its future.
Speaker 2: Now for today's going viral, we're watching what's trending online,
Speaker 2: and today it is the release of the latest Star
Speaker 2: Wars series on Disney Plus. I guess the first and
Speaker 2: the second episode of been dropped for ahsoka in debuted
Speaker 2: on the streaming platform last night. Ed I know you're
Speaker 2: a bit of a Star Wars ma'am. Did you watch it?
Speaker 2: Did you like it?
Speaker 3: I absolutely watched episode one. I for went episode two.
Speaker 3: I saved it for later in the week. But it's
Speaker 3: just incredible to see on everything from x to Instagram
Speaker 3: to Google trends people talking about ah Soca. You know,
Speaker 3: it's a really highly anticipated next spin off from the
Speaker 3: Star Wars universe.
Speaker 2: And kind of some emotion around it, right one of
Speaker 2: the lead characters. No spoilers about any of what's happening
Speaker 2: inside the episodes, but on externally, they actually lost a
Speaker 2: key character died suddenly in Italy over the or an Ithaca.
Speaker 4: I believe it was.
Speaker 3: Yes, so never any spoilers in bluembog technology. But Ray Stevenson,
Speaker 3: who played one of the villains or plays one of
Speaker 3: the villains in the Ahsoca series, did pass away in
Speaker 3: May of this year after production had rapped, and there
Speaker 3: was a tribute to him, which loads of people have
Speaker 3: talked about on social media. And when I posted X
Speaker 3: that I was going to be watching it, actually quite
Speaker 3: a few people replied and said, you know, it's a
Speaker 3: nice moment for Ray Stevenson, who has a lot of
Speaker 3: fans out there.
Speaker 2: Yes, certainly does. Meanwhile, I mean we're going to dive
Speaker 2: into what's happening more broadly in Hollywood right now.
Speaker 3: Yeah, all of this because the focus of Hollywood right
Speaker 3: now is Studios released the details of their contract proposal
Speaker 3: to the film's industry screenwriters. It's the latest and their
Speaker 3: bid to end a month long strike that stalled production
Speaker 3: and delayed new releases across the entertainment industry. That is
Speaker 3: why we are so focused right now on the content slate.
Speaker 3: We're going to bring in Bloomberg's Lucas Shaw, who leads
Speaker 3: our screen time coverage Lucas, you've tracked this day by day.
Speaker 3: What is the latest on these negotiations, and the latest
Speaker 3: is not good.
Speaker 14: I would say, you know, there have been a resumption
Speaker 14: in conversations. Between the resumption conversations between the Hollywood studios
Speaker 14: and screenwriters and the you know, they had gone quiet
Speaker 14: during that period that was seen.
Speaker 3: As as a positive.
Speaker 14: The fact that the studios chose to voice their proposal
Speaker 14: and then kind of bring on counterfire from the w
Speaker 14: GA is a sign that they're really struggling to find
Speaker 14: common ground on a couple of big issues.
Speaker 2: Yeah, what was it the writers gilber America was really
Speaker 2: faring back.
Speaker 1: I think there was being told, there being.
Speaker 2: Lectured, and ultimately it feels as though there's no meeting
Speaker 2: in the minds here ultimately about the profitability the take
Speaker 2: home money from a lot of these studios and what's
Speaker 2: ultimately getting into the hands of the writers here.
Speaker 8: Yeah.
Speaker 14: I mean it's tricky because the studios did come to
Speaker 14: the writers with a fairly substantial proposal.
Speaker 8: You know, they changed their offer on a number of fronts.
Speaker 14: But there are a couple of key sticking points, one
Speaker 14: of which is sort of this share in upside and
Speaker 14: another of which is this idea of having a minimum
Speaker 14: number of writers in a room. The studios are saying,
Speaker 14: why can't that be up to the showrunner, the person
Speaker 14: in charge of the show, But the writers want the
Speaker 14: studios to promise that, and honestly.
Speaker 3: It reflects a little bit of a lack of trust.
Speaker 14: Between some of the writer's members and right, I should say,
Speaker 14: among different members of the guild.
Speaker 3: You know, we'd reported that Ted Sarandos, the Netflix co CEO,
Speaker 3: and Bob Iger, the Disney CEO, had come in to
Speaker 3: play a role, but it sounds like it's not helped
Speaker 3: very much. Bloombols luc Is sure, thank you for the
Speaker 3: latest on that.
Speaker 2: Carro, I mean fascinating as that continues to unfold and
Speaker 2: the technology angle that is at play here as well
Speaker 2: with AI and what that means for the future of
Speaker 2: work within the industry. I'm sad to say that that
Speaker 2: does it for this edition of Bluebog Technology though.
Speaker 3: Yeah, the big one after market in Vidia fiscal second
Speaker 3: quarter earnings twenty four hours from now, you and I
Speaker 3: will go big on it once again. But we have
Speaker 3: had a lot in the show so you can recap.
Speaker 3: Don't forget to check out the podcast wherever you get
Speaker 3: your podcasts on the Bloomberg platforms, but also on Apple, Spotify,
Speaker 3: and iHeart My goodness, what a week has been so
Speaker 3: far from San Francisco and over in New York. This
Speaker 3: is Bloomberg Technology.