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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: dot com, the radio plus mobile LAP and on your radio,

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Speaker 1: this is a Bloomberg Business Flash and I'm Karen. Moscow's

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Speaker 1: docks are rising, trimming the SNP five hundreds weekly decline

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Speaker 1: as a rally and crew prices boosted energy producers. We

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Speaker 1: checked the markets every fifteen minutes throughout the trading day.

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Speaker 1: On Boloomberg. The SNP five hundred is up six tenths

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Speaker 1: per cent or twelve points, to twenty fifty four. Dow

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Speaker 1: Jones Industrial average up six tenths percent, or a hundred

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Speaker 1: nine points to seventeen thousand, six hundred fifty one. The

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Speaker 1: nasdacs of half percent or twenty five points to forty

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Speaker 1: eight seventy three ten. Your treasury down seven thirty seconds,

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Speaker 1: the yield one point seven one percent. The yield on

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Speaker 1: the two year points seven zero percent. Nim X scrude

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Speaker 1: oil up five point three percent or a dollar ninety

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Speaker 1: eight to thirty twenty four of arrol Comax gold is

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Speaker 1: up to ten percent or two dollars twenty cents at

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Speaker 1: twelve thirty nine seventy and ounce. The euro and dollar

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Speaker 1: thirteen ninety The n one oh eight points. It's to

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Speaker 1: Federal Reserve Bank of New York. President William Dudley says

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Speaker 1: uncertainty over the outlook for the U S economy is

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Speaker 1: higher than usual, which calls for a conscious and gradual

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Speaker 1: approach to interest rate increases. Dudley spoken a speech in

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Speaker 1: Connecticut City. Graves, head of equity Trading, and Derek ben Dean,

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Speaker 1: will leave after almost eight years at the firm. And Okay,

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Speaker 1: Your Resources and Energy, a company controlled by South African

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Speaker 1: President Jacob Zuma's friends, the Guptas, said members of the

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Speaker 1: family resigned from its management and board following a sustained

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Speaker 1: political attack. And that's a Bloomberg business flash. Tom and

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Speaker 1: Mike Karen, thanks so much, greatly appreciate we finished strong

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Speaker 1: for the week. Folks. We're thrilled to bring you usef

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Speaker 1: squality of Cantor Fitzgerald right now to give you perspective.

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Speaker 1: There's a ranking system on the Bloomberg and it's stunning out.

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Speaker 1: USEF has terrific rankings across Amazon, Alphabet, Facebook, LinkedIn and

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Speaker 1: others as well, he joins us. Now, of course on

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Speaker 1: the soap opera does your Yahoo. You just have to

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Speaker 1: protect you. I want to make clear, folks, there's a

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Speaker 1: lot of speculation and rumor in this discussion you have, Well,

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Speaker 1: we're Mercer Mayer be involved in these negotiations or she

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Speaker 1: basically been pushed aside by the board. Hi, Tom, So

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Speaker 1: my understandings that Marissa Meyer is not involving these negotiations,

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Speaker 1: not because he got she got pushed out, um by

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Speaker 1: the board for any reason other than um, she is

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Speaker 1: a potential uh bidder um if it comes to having

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Speaker 1: a couple of private equity guys participates. So that's right

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Speaker 1: where I wanted to go. I mean, we've got Alphabet

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Speaker 1: and Play and Verizon in play. You know, I think

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Speaker 1: of you and Mark Bhany and all the others that

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Speaker 1: follow the company. Do you just presume that and I'm

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Speaker 1: gonna pick David Rubinstein The Carlyles of the world jump in.

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Speaker 1: I mean, do you just assume that's gonna happen over

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Speaker 1: the weekend? It may happen. So remember they actually extended

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Speaker 1: the deadline to the to the eight team, so these

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Speaker 1: bidders have an additional week to think through things. But

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Speaker 1: we still think Verizon probably makes them most sense only

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Speaker 1: because Verizon already owns all they have a strong man

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Speaker 1: in uh Tim Armstrong running a o l. In fact,

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Speaker 1: we remember that Tim has made some overtures to UH Yahoo,

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Speaker 1: went to Marissa before they got acquired by Verizon to

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Speaker 1: try to get together, and now under the umbrella Verizon,

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Speaker 1: he's got even a stronger hand. But going back to

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Speaker 1: UM private equity, Yeah, we think Project Equity could definitely

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Speaker 1: be playing a big role. But I don't think they

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Speaker 1: can pay as much to review. It's a small company.

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Speaker 1: Like five billion in revenue is a reached to say

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Speaker 1: the least, and I believe that's descending within the plan.

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Speaker 1: It's shocking they have a ten percent maybe it's the

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Speaker 1: most fifteen percent EVA down margin. What's the excitement, Well,

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Speaker 1: the excitement is what you could do with it, right,

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Speaker 1: I mean, the company, as you're point, has been melting

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Speaker 1: ice cube for the last three years plus and Marissa,

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Speaker 1: with all the investment that she's made, it hasn't really

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Speaker 1: pent out all that. Well that said, taken in into

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Speaker 1: a Verizon that already hasn't a well, UM, taken into

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Speaker 1: Google or Alphabet, I'm not sure whether that really will happen,

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Speaker 1: but theoretically taken into another entity, stripping out a great

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Speaker 1: amount of of of uh the costs realizing some synergies

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Speaker 1: you could dramatically increase the profitability. This is a company

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Speaker 1: that includes way too many people for its size, way

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Speaker 1: too many people. Well, one area where they have people

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Speaker 1: is yeah who Japan. Verizon says they're willing to talk

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Speaker 1: about buying it, But why what would you do with that?

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Speaker 1: Um I suspect there are only two things they can do.

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Speaker 1: They can either uh sell it outright to soft bank,

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Speaker 1: or they can um distributed to shareholders and let shareholders

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Speaker 1: do something with it. But Verizon as an entity strategically,

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Speaker 1: there's really nothing there for them. Well, here's the bottom

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Speaker 1: line question, and Matt Levine, writing for Bloomberg View today

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Speaker 1: really sums it up. The prize in the middle of

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Speaker 1: this box that is one of those boxes you have

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Speaker 1: to untangle is the Ali Baba shares. Who gets them

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Speaker 1: in the end and how do they get there? So

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Speaker 1: um Ali Baba would not be part at least as

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Speaker 1: of our understanding. Now Ali Bubba is not part of

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Speaker 1: the Verizon negotiations, of the of the Google negotiations, and

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Speaker 1: certainly not part of the private Equi negotiations. So the

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Speaker 1: way it would work is that they the buyer would

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Speaker 1: only buy Yahoo Coore. They may buy Yahoo Japan to

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Speaker 1: your point um, and then the rest will basically continue

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Speaker 1: to trade in the open market as a stub to

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Speaker 1: Ali Baba the company. So we all just wait for

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Speaker 1: them to monetize that. You buy the stock of you

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Speaker 1: know what's left, and wait for them to sell the

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Speaker 1: Alabama shairs. Correct well, as a shareholder, you could get

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Speaker 1: some sort of consideration for your ownership of Yahoo Core

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Speaker 1: plus in Japan, and you'd keep a stub. You'd keep

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Speaker 1: a share of Ali Babba or some fraction of the

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Speaker 1: share of Ali Baba based on your ownership. Yes, and

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Speaker 1: then you can do anything with it. You can sell

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Speaker 1: in the open market or you hope that made the

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Speaker 1: Ali Bubba and does Major buy back buy it from

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Speaker 1: you thirty six thirty nine for share? Is there an

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Speaker 1: arbitrage opportunity here? I understand yourself side and you have

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Speaker 1: a responsibility to look long term and the measure risk, etcetera, etcetera.

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Speaker 1: But are you storming around Cantor Fitzgerald today saying we

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Speaker 1: gotta do this, we gotta do that. We've waited too long,

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Speaker 1: We've this The Sauba has been going on for two

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Speaker 1: or three years, and everything every every every time we

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Speaker 1: thought something was going to happen immediately, it didn't. So

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Speaker 1: we're we're holding our breath this time around, because let's

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Speaker 1: just see if that's in cf A level three guys,

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Speaker 1: to hold your breath strategy. What's your Matthew, what's the string?

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Speaker 1: Absolutely do things. There's arbitrage because there's really absolutely no

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Speaker 1: value put on on a core right now, and to

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Speaker 1: your point early, it's probably worth somewhere between you know,

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Speaker 1: five to seven billion dollars. Okay, what's the CFO do?

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Speaker 1: I mean my experiences followed the CFO and all this

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Speaker 1: Ken Goldman would be part of you know, some private

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Speaker 1: equity coming into compete against Verizon or Google. Correct, that's

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Speaker 1: my that's that's our understanding. If if if probatly ends

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Speaker 1: up deciding to to make it okay, don't be a

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Speaker 1: stranger somehow. I think we'll talk to you Monday. Used

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Speaker 1: to squality, Thank you so much with cancer Fitzgerald A

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Speaker 1: nice briefing there on. Yeah, I want to make clear, Uh, Mike,

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Speaker 1: what a train wreck for so long? You know, idea

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Speaker 1: of waiting too long? I mean, I guess I could

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Speaker 1: lie if my own shares and yeah, hoo, I can

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Speaker 1: lie him say I don't own him, but yeah, I'm

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Speaker 1: pleased to say I never have, you know, I mean

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Speaker 1: some people made some money in this thing. Yes, well,

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Speaker 1: and Matt Levin really sums it up well when you

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Speaker 1: always is piece, he also has a great well he's

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Speaker 1: talking about Philadelphia seventies sixers in basketball. And then the

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Speaker 1: general manager, Sam Hinky, resigned, and he resigned by writing

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Speaker 1: a resignation letter in the form of a Hedge Fund

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Speaker 1: annual letter to its clients, which Matt finds very hilarious.

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Speaker 1: But as he points out, um, everybody wants to be

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Speaker 1: a contrarian these days. And in its simplest form, contrarian

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Speaker 1: ism is a thing's price goes down and you buy it,

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Speaker 1: or in the case of many money managers, you buy

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Speaker 1: it it's price goes down, and then you say I

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Speaker 1: found deep value in my portfolio. In deep vailue is

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Speaker 1: the new phrase. You hear it everywhere. And you know, folks,

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Speaker 1: I'm going to go back to the you know, and

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Speaker 1: and what has been a very strange wreek And we're

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Speaker 1: honored by our guests that have appeared with us to

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Speaker 1: give us wisdom. There's a linear function within all that

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Speaker 1: we do, whether it's finance or economics. And at the

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Speaker 1: back end is this mysterious thing epsilon, the Greek letter.

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Speaker 1: It looks like an e, sort of a rounded E.

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Speaker 1: I don't think anybody in the architecture of our system

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Speaker 1: has a clue what that epsilon is right now. I mean,

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Speaker 1: I'm still i Olivier Blanchard said to me today he

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Speaker 1: does not believe in negative interest rates. That's profound. I mean,

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Speaker 1: that's a big deal that a guy like that would

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Speaker 1: just flat out stated they're not going to fix things. Bizarre. Yeah, well,

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Speaker 1: I mean, what are you gonna do? What's your what's

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Speaker 1: your wisdom? We got retail sales next week, do we

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Speaker 1: That's gonna be important because they didn't do so well

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Speaker 1: last but and we also saw car sale US go down,

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Speaker 1: So maybe we're going to We're gonna have issues seconds.

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Speaker 1: The savings rate is up, Chris Lowe mentioned it earlier.

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Speaker 1: Is the savings rate up? Good for America? Michael McKee,

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Speaker 1: It's one of those things you got to put in context.

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Speaker 1: If it's up and the money is being used to

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Speaker 1: invest in uh growth, Yes, if it's up and people

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Speaker 1: are just basically hiding it under the mattress. No, which

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Speaker 1: seems to be the paradox of thrift if everybody says

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Speaker 1: at once, it's good for each individual and not for

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Speaker 1: society as a home. And one of the forty articles

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Speaker 1: in Japan this weekend mysterious about strong yend. There was

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Speaker 1: an entire article about I'm gonna guess ten thousand yen

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Speaker 1: notes because so many people are keeping money under the mattress,

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Speaker 1: because the phrase goes in Japan to show the this

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Speaker 1: has been a great week. We've had just fantastic guests,

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Speaker 1: all of our team, yes, all of except why you

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Speaker 1: he did nothing? But other than that, we particularly Lisa

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Speaker 1: Abramowitz for showing up today from Bloomberg gad Fly We

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Speaker 1: are produced by Boden as his birthday. I was paid

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Speaker 1: to say that. Ken follow our global technical director from

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Speaker 1: New York Bloomberg Surveillance