WEBVTT - Bloomberg Businessweek Weekend - July 29th, 2022 0:00:01.040 --> 0:00:05.400 This is Bloomberg Business Week inside from the reporters and 0:00:05.600 --> 0:00:09.160 editors who bring you America's most trusted business magazine, plus 0:00:09.240 --> 0:00:13.160 global business finance and tech news as it happened. Bloomberg 0:00:13.240 --> 0:00:16.759 Business Week with Carol Messier and Bloomberg Quick Takes Tim 0:00:16.800 --> 0:00:21.360 Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend 0:00:21.480 --> 0:00:24.599 edition of Bloomberg Business Week. While markets are digesting a 0:00:24.720 --> 0:00:27.520 second straight seventy five bases point hike from the Federal 0:00:27.560 --> 0:00:29.840 Reserve and a promise to carry on and it's fight 0:00:29.880 --> 0:00:32.760 against inflation and Tim, we also got a second consecutive 0:00:32.800 --> 0:00:36.320 quarter of negative GDP growth in the US. It was 0:00:36.320 --> 0:00:38.400 a lot, It was a lot. All of this, though, 0:00:38.440 --> 0:00:40.920 Carol said, against the backdrop of an earning season that's 0:00:40.960 --> 0:00:43.080 really kicking into high gear right now. I mean, here 0:00:43.080 --> 0:00:46.920 a few names, right, Microsoft, Alphabet, Meta Platforms, Apple and 0:00:46.960 --> 0:00:49.120 Amazon all reporting this week. In fact, it's you know, 0:00:49.280 --> 0:00:51.199 a market cap half of the market cap of the 0:00:51.280 --> 0:00:53.400 S and P five founder. It's pretty incredible, Like blows 0:00:53.400 --> 0:00:55.680 your mind, it really does. So ahead on this broadcast, 0:00:55.760 --> 0:00:58.200 we're gonna talk to a suite of top executives, including 0:00:58.240 --> 0:01:01.800 the CEOs of Chipotle and tell on their latest results 0:01:01.800 --> 0:01:05.560 and their outlooks. For the rest of talking Burritos and Barbie, 0:01:05.720 --> 0:01:07.520 we're also going to speak with the founder and CEO 0:01:07.520 --> 0:01:10.600 of Susie Cakes, go behind the scenes of an HBO drama, 0:01:10.760 --> 0:01:14.880 and dig into regulators delayed crackdown on popular by now 0:01:15.000 --> 0:01:17.560 pay later platform sounds like a pretty good program, right 0:01:17.600 --> 0:01:19.720 would stick around all about to come. We begin there 0:01:19.760 --> 0:01:22.000 with a catch up on crypto from the finance section 0:01:22.040 --> 0:01:25.440 of the magazine. Digital Tokens plunged this year. They've taken 0:01:25.760 --> 0:01:28.720 the crypto exchange coin based down with them too. Now, 0:01:28.880 --> 0:01:32.559 US regulators are investigating the company and whether it improperly 0:01:32.600 --> 0:01:35.800 let Americans trade digital assets that should have been registered 0:01:35.880 --> 0:01:39.200 as securities. Bloomberg business Week columnist Max Chafkin is here 0:01:39.200 --> 0:01:41.280 to break down the battle between coin base and the 0:01:41.480 --> 0:01:44.680 sec It's a story that takes us back to September. 0:01:45.840 --> 0:01:47.800 We've had two things that have happened over the last 0:01:47.800 --> 0:01:50.240 couple of years with coin Base, as the kind of 0:01:50.280 --> 0:01:53.880 crypto market, said Booms. This company has moved kind of 0:01:54.080 --> 0:01:56.559 closer into the kind of center of the cultural as right, guys, 0:01:56.760 --> 0:01:59.960 and as they as a company approached a direct list 0:02:00.040 --> 0:02:03.320 thing last year one of which is that the company 0:02:03.360 --> 0:02:06.160 kind of embraced it is kind of like culture war thing. 0:02:06.240 --> 0:02:10.160 It It basically told its employees that they couldn't, you know, 0:02:10.240 --> 0:02:12.920 protests in favor of Black Lives Matter, which won a 0:02:12.960 --> 0:02:16.560 lot of praise from you know, right wing types you know, 0:02:16.600 --> 0:02:18.399 who are sort of into that kind of thing. And 0:02:18.480 --> 0:02:21.560 at the same time, the company was sort of making 0:02:21.600 --> 0:02:24.760 some some pretty significant changes to its business to allow 0:02:25.160 --> 0:02:28.079 more of these kind of lightly traded they're sometimes called 0:02:28.120 --> 0:02:31.480 all coins if you want a clean for these. These 0:02:31.480 --> 0:02:34.360 are basically, you know, it's like the crypto equivalent of 0:02:34.360 --> 0:02:36.880 a penny stock. So so some of them, you know, 0:02:36.919 --> 0:02:39.360 of course are are are legitimate. Some of them have 0:02:39.480 --> 0:02:43.079 sort of gone nowhere. But what has happened, um over 0:02:43.120 --> 0:02:45.639 the last year or so is that coin Base went 0:02:45.720 --> 0:02:48.960 from being you know, kind of seen as a relatively 0:02:49.160 --> 0:02:52.280 sober minded, you know, one of the more um, you know, 0:02:52.520 --> 0:02:55.919 conservative of the crypto and exchanges insofar as that's possible, 0:02:56.160 --> 0:03:00.320 to kind of embracing a more um edgy, you know, 0:03:00.840 --> 0:03:03.920 confrontational pose with regulators. UM. Part of that is this 0:03:04.000 --> 0:03:07.560 kind of like cultural component. Part of it is listing 0:03:07.800 --> 0:03:11.080 lots and lots more of these um alt coins um 0:03:11.120 --> 0:03:15.160 probably most famously Doze, which is like a joke cryptocurrency 0:03:15.280 --> 0:03:19.280 that that the company added um uh in may. So 0:03:19.320 --> 0:03:23.680 I do wonder what's the responsibility of these companies to investors, 0:03:24.160 --> 0:03:26.280 you know, in terms of what they are offering up, 0:03:26.400 --> 0:03:29.040 like you know, buy or beware, Like who's responsible at 0:03:29.040 --> 0:03:33.200 this point? Yeah? Absolutely, coin bys has done some of that. Um. 0:03:33.639 --> 0:03:37.280 The thing that happened to this company is that, you know, 0:03:37.320 --> 0:03:40.760 as I said, it followed initially, Coinny says a long history. 0:03:40.800 --> 0:03:42.920 You know, it's been around, I think for almost ten years, 0:03:42.960 --> 0:03:46.000 backed by some of the biggest names in tech. Um 0:03:46.040 --> 0:03:49.040 what happened is that it sort of fell behind the 0:03:49.120 --> 0:03:52.560 ball on these kind of lesser known currencies. So you 0:03:52.640 --> 0:03:56.520 had this sort of meme stock moment happened, and and competitors, 0:03:57.160 --> 0:04:02.119 most notably Binance, basically distinguished themselves by allowing a lot 0:04:02.200 --> 0:04:05.320 more different securities or or sorry we're not I guess 0:04:05.360 --> 0:04:07.200 we're not allowed to call them securities because because that's 0:04:07.240 --> 0:04:10.440 kind of coin business whole position. But um uh, these 0:04:10.480 --> 0:04:13.960 different digital assets and coin base kind of in this 0:04:14.040 --> 0:04:17.599 frenzy to catch up, I think, basically allowed a lot 0:04:17.600 --> 0:04:20.120 more of these things on and that's kind of where 0:04:20.160 --> 0:04:22.960 they find themselves today. Where you have UM. You have 0:04:23.040 --> 0:04:26.920 this Department of Justice UH arrest of a former coin 0:04:26.960 --> 0:04:30.840 based employee who's you know, accused of basically insider trading UM. 0:04:30.920 --> 0:04:34.760 And then you have the SEC saying that some of 0:04:34.800 --> 0:04:38.720 these tokens that we're being traded are in fact unlicensed securities. 0:04:38.880 --> 0:04:41.359 The upshot of that is that, you know, the SEC 0:04:41.640 --> 0:04:44.080 is is you know, maybe suggesting or interested in the 0:04:44.200 --> 0:04:47.400 question of whether or not coin bases operating you know, 0:04:47.480 --> 0:04:50.240 unlicensed security change, which would be really bad for the business. 0:04:50.320 --> 0:04:53.280 They've put out after these these UM complaints drop the 0:04:53.360 --> 0:04:54.920 d o J one on the SEC one. And it's 0:04:54.920 --> 0:04:57.760 important to say that coin base has not itself been 0:04:57.880 --> 0:04:59.640 named in any of these complaints. You know, they're not 0:04:59.680 --> 0:05:02.599 shar they haven't been sued UM. And although you know 0:05:02.640 --> 0:05:05.200 Bloomberg is reported on this you know investigation, you know 0:05:05.240 --> 0:05:08.600 they have some see, haven't taken any UM formal action UM. 0:05:08.680 --> 0:05:12.160 Their position, the company's position is that it doesn't list securities. 0:05:12.200 --> 0:05:15.200 These things are digital assets and and therefore you know 0:05:15.200 --> 0:05:17.799 it's it's in full compliance. I guess they was wondered 0:05:17.800 --> 0:05:19.560 to Max, like, if we find out that there's some 0:05:19.600 --> 0:05:22.880 internal conversations, you know, basically to the extent of, yeah, 0:05:22.880 --> 0:05:24.240 we don't really think this is anything, but we got 0:05:24.240 --> 0:05:25.560 to put it on our platform because if we don't, 0:05:25.600 --> 0:05:28.600 somebody else's Like you do wonder like what's the responsibility 0:05:28.680 --> 0:05:31.320 of a company and its leaders when they maybe they 0:05:31.360 --> 0:05:33.600 don't believe in something, but at the same time they 0:05:33.600 --> 0:05:36.600 know investors are interested in it. Right, And this has 0:05:36.680 --> 0:05:38.440 kind of been something I think has been kind of 0:05:38.480 --> 0:05:41.400 whispered about in in crypto circles, but maybe not said 0:05:41.400 --> 0:05:44.640 publicly until these um, you know, until this happened last week, 0:05:44.640 --> 0:05:46.240 which is that you know, there are a lot of 0:05:46.279 --> 0:05:50.400 assets on coin base that are pretty obscure, right, They're 0:05:50.440 --> 0:05:54.279 not It's not like bitcoin and ethereum. It's it's things 0:05:54.839 --> 0:05:57.960 like pot call, which is a you know, social network 0:05:58.000 --> 0:06:00.839 for pets. Right, it's very lightly traded um. And you 0:06:00.839 --> 0:06:03.840 know you can buy it pointment. And and there's a 0:06:03.920 --> 0:06:06.760 question about what when you when you when you invest 0:06:06.760 --> 0:06:09.440 in that token, what exactly are you doing? And I 0:06:09.480 --> 0:06:12.680 think the the kind of coin based position, right is 0:06:12.680 --> 0:06:15.760 that you're buying a you know, you're not buying a security, 0:06:15.800 --> 0:06:17.320 You're buying some kind of token that's going to be 0:06:17.440 --> 0:06:19.880 useful in this company. But I think that, you know, 0:06:19.920 --> 0:06:23.000 the reality is a lot of people who are transacting 0:06:23.120 --> 0:06:26.760 in these digital assets are are basically gambling, right, and 0:06:26.760 --> 0:06:29.200 and and then so there's a question about whether or 0:06:29.240 --> 0:06:31.520 not that should be regulated. And then there's also a 0:06:31.600 --> 0:06:33.760 question whether or not, you know, there's even a problem 0:06:33.800 --> 0:06:35.680 with that. That was Bloomberg Business Week. Call him this, 0:06:35.800 --> 0:06:39.400 Max Chafkin coming up. Mattel's CEO talks toys, Barbie Dolls, 0:06:39.400 --> 0:06:42.240 hot wheels, and Elon Musk. Yeah, you're gonna buy an 0:06:42.279 --> 0:06:44.159 Elon Musk doll if they have one? They don't know. 0:06:44.200 --> 0:06:46.200 That sounds kind of weird. That's the kind of a 0:06:46.240 --> 0:06:49.400 weird question to ask. If he comes O. Sorry, sorry, 0:06:49.440 --> 0:06:51.960 how about an Elon Musk action figure? Is that better? 0:06:52.080 --> 0:06:53.600 As long as it comes with a Tesla and a 0:06:53.720 --> 0:06:57.120 space X rocket? Okay? Fair? You're listening to Bloomberg Business Week. 0:06:57.320 --> 0:07:09.760 This is Bloomberg. This is Bloomberg Business Week with Carol 0:07:09.800 --> 0:07:14.040 Masser and Bloomberg Quick Takes. Tim Steinovik from Bloomberg Radio. 0:07:15.400 --> 0:07:17.680 Well the beets hoping it's latest seventy five basis point 0:07:17.720 --> 0:07:20.760 high will help bring down prices and so is our 0:07:20.800 --> 0:07:23.800 next guest and cries as German and CEO of Mattel 0:07:23.880 --> 0:07:26.240 the manufacture of course of Barbie and hot wheels and 0:07:26.280 --> 0:07:29.600 so much more. America's second largest toymaker recently reported second 0:07:29.640 --> 0:07:33.520 quarter results. Even as persistent inflation ways on margins, Mattel well, 0:07:33.600 --> 0:07:36.760 it's maintaining its full year guidance. These were excellent results 0:07:36.760 --> 0:07:40.840 for Mattel without eight consecutive quarter of topin growth. Our 0:07:40.880 --> 0:07:47.200 profits also grew significantly, with adjusted operating income up despite 0:07:47.280 --> 0:07:52.360 high inflation, and following a record first half, we expect 0:07:52.400 --> 0:07:55.120 to continue growing in the second half. All in all, 0:07:55.160 --> 0:07:57.800 we're very happy with the position we are in. We 0:07:57.920 --> 0:08:02.240 expect to when market share going forward, and we reiterated 0:08:02.520 --> 0:08:08.480 fullier guidance for strong top line growth, increase profitability, higher 0:08:08.520 --> 0:08:11.080 growth margin. And all of this is in spite of 0:08:11.480 --> 0:08:14.840 significant inflation and negative currency impact. So are you like, 0:08:14.920 --> 0:08:17.320 come on, investors, you still got it wrong. Look, we 0:08:17.360 --> 0:08:20.640 are very focused on managing the company. We have been 0:08:20.640 --> 0:08:25.800 growing now consistently. We're executing on our strategy we have 0:08:26.000 --> 0:08:28.120 you know, we won market share for two years in 0:08:28.120 --> 0:08:30.200 a row and we expect to win market share this 0:08:30.280 --> 0:08:33.920 year as well. Our supply chain is in very good shape. 0:08:34.559 --> 0:08:38.240 All of our own and operated factories are fully um 0:08:38.600 --> 0:08:44.000 fully operational. Product is flowing in. We're seeing we're expecting 0:08:44.040 --> 0:08:47.319 a second half retail sales to be above the first 0:08:47.320 --> 0:08:52.120 half levels. We're seeing the industry growing as well. What 0:08:52.400 --> 0:08:55.560 happened that your margin is drunk? That maybe even caught 0:08:55.559 --> 0:09:01.240 you guys by surprise. No, the margin impact was expected. 0:09:01.920 --> 0:09:04.400 It was factored into our guidance. We talked about it 0:09:04.440 --> 0:09:07.840 at the beginning of the year. Uh, and if anything, 0:09:07.960 --> 0:09:13.040 it's getting better actually because we did revise our guidance 0:09:13.040 --> 0:09:17.800 on gross margin UM Uh, not by much, but nevertheless 0:09:18.200 --> 0:09:23.880 a positive you know, uplift. We're able to upset currency 0:09:23.960 --> 0:09:30.200 negative currency impact and maintain and reiterate our guidance for 0:09:30.240 --> 0:09:35.720 the full year. So the margin, the margin reduction was 0:09:35.840 --> 0:09:39.640 very much expected and and said, you know, factored into 0:09:39.880 --> 0:09:42.600 into our guidance at the beginning of the year. Over time, 0:09:43.040 --> 0:09:46.040 over time, we do expect that the combination of pricing 0:09:46.160 --> 0:09:49.120 and cost savings will more than exceed the impact of 0:09:49.160 --> 0:09:53.319 inflation and contribute to margin expansion. Give me an idea 0:09:53.360 --> 0:09:56.320 of what you're seeing with pricing power right now? Where 0:09:56.320 --> 0:10:01.320 are you able to raise prices so that consumers will 0:10:01.360 --> 0:10:05.559 continue to pay, but you can better cover increasing costs 0:10:05.600 --> 0:10:09.760 on your side without destructing demand. As pricing is one 0:10:09.800 --> 0:10:14.960 of the options we consider in times of inflation. Uh sorry, 0:10:15.000 --> 0:10:18.400 this is not obviously unique to Mattel or unique to 0:10:18.440 --> 0:10:22.840 the toy industry. But we've said before and we're being 0:10:23.000 --> 0:10:26.120 very consistent about it, is that when we raise prices, 0:10:26.720 --> 0:10:30.280 we always keep consumers in mind. We're being very thoughtful 0:10:30.320 --> 0:10:33.319 and strategic and are committed to maintaining the highest quality 0:10:33.920 --> 0:10:38.480 and best value for consumers. We haven't seen, um, you know, 0:10:38.559 --> 0:10:42.480 any negative impact for the pricing actions we too class year. 0:10:43.679 --> 0:10:48.800 We just took another action that will become that will 0:10:49.240 --> 0:10:52.760 be factored into our numbers in the second half. Um 0:10:52.800 --> 0:10:55.280 and this is something that we previously announced, So this 0:10:55.360 --> 0:10:58.960 is not new news and we haven't seen a negative impact. 0:10:59.400 --> 0:11:02.520 You know. These actions are very methodical and thought through 0:11:02.880 --> 0:11:05.360 what is selling, what is not. Where are you seeing 0:11:05.400 --> 0:11:10.640 maybe some consumer sensitivity because of the overall inflationary environment. Well, 0:11:10.720 --> 0:11:14.480 in the in the second quarter, we saw comprehensive growth, 0:11:14.880 --> 0:11:20.320 uh you know, in constant currency, we were up in 0:11:20.800 --> 0:11:24.760 double digit strong double digit in North America, Emia and 0:11:24.880 --> 0:11:28.800 Latin America. We grew in all of our reported categories 0:11:29.400 --> 0:11:33.439 and in three in our three power brands, Barbie, Hot Wheels, 0:11:33.600 --> 0:11:39.080 and Fisher Price. So the performance was pretty pretty comprehensive 0:11:39.160 --> 0:11:43.439 with some really strong numbers. We did say that Hot Wheels, 0:11:43.480 --> 0:11:47.280 as an example, is on on track to achieve its 0:11:47.360 --> 0:11:53.520 fifth record year in a row. Uh, Barbie is just 0:11:53.640 --> 0:11:57.760 coming off an all time high one and we said 0:11:57.760 --> 0:12:01.680 that we expect to be sales for Barbie to be comparable, 0:12:01.760 --> 0:12:05.600 so we're holding a very high bar and even all 0:12:05.760 --> 0:12:08.880 the pretty pretty strong performance across the board. So we 0:12:08.880 --> 0:12:11.040 were talking about the Barbie movie. Do you anticipate making 0:12:11.080 --> 0:12:14.360 more money from the movie and your partnership on the 0:12:14.360 --> 0:12:17.000 Barbie movie or more from the lift that the Barbie 0:12:17.080 --> 0:12:21.559 brand gets thanks to the movie. We absolutely see the 0:12:21.640 --> 0:12:26.840 opportunity as as incremental to our toy business. Our strategy 0:12:26.920 --> 0:12:29.480 to capture the full value of our i P is 0:12:29.520 --> 0:12:33.679 about participating in highly a creative business verticals that are 0:12:33.720 --> 0:12:37.560 adjacent to the toy industry and are also driven by 0:12:37.840 --> 0:12:41.640 big franchises and big brands, but we want them and 0:12:41.720 --> 0:12:44.560 expect them to be a creative in and of themselves. 0:12:45.240 --> 0:12:48.880 So the partnership or you know, the Barbie movie and 0:12:48.920 --> 0:12:53.000 the the The partnership that we have with Warner Brothers 0:12:53.679 --> 0:12:57.599 um is such that we have a maningful economic participation 0:12:58.040 --> 0:13:00.719 uh in in the Barbie movie as well us for 0:13:00.880 --> 0:13:03.520 that matter, all of our multi projects, we do have 0:13:03.600 --> 0:13:07.960 economic participation, and of course we understand that in success 0:13:08.000 --> 0:13:12.080 there will be a benefit for the toy business, but 0:13:12.880 --> 0:13:16.240 we do expect the economic participation outside of the toy 0:13:16.320 --> 0:13:19.160 aisle as well. We do not fund the movie. We 0:13:19.240 --> 0:13:24.199 do not uh you know, participate in in movie financing. 0:13:24.280 --> 0:13:27.000 This is not our expertise and not our business. But 0:13:27.120 --> 0:13:31.400 we do participate economically both as the I T owner, 0:13:32.080 --> 0:13:34.840 as the owner of the brand, and as a producer. 0:13:35.480 --> 0:13:37.920 We are a producer on all of our projects. Do 0:13:37.960 --> 0:13:39.600 you get a piece of the box office? You know, 0:13:40.800 --> 0:13:46.200 we haven't been specific in the commercial terms, but box 0:13:46.240 --> 0:13:50.800 office and research are part of the equation of uh 0:13:50.880 --> 0:13:54.600 of of you know, of typical participations. Hey, can we 0:13:54.640 --> 0:13:57.079 talk to you about SpaceX? Tell us about the collaboration. 0:13:57.120 --> 0:13:59.800 It's a multi year agreement that Mattel has announces SpaceX 0:13:59.800 --> 0:14:04.480 to produce toys and collectibles. Yeah, this is an exciting 0:14:04.520 --> 0:14:08.920 partnership to create space exploration toys and collectibles under the 0:14:08.960 --> 0:14:13.120 Matchbox brand. The toys will come out next year. The 0:14:13.240 --> 0:14:17.839 collectible uh toys will be available on Mattel Creation or 0:14:17.920 --> 0:14:22.240 Director consumer side. And this is really about um, you know, 0:14:22.480 --> 0:14:27.560 scaling our portfolio. Um, it's about innovation. It's about thinking 0:14:27.600 --> 0:14:31.080 out of the box and bringing new partners to the 0:14:31.120 --> 0:14:34.480 toy aisle. That was Mattel's CEO, Enn Cries. Still waiting 0:14:34.520 --> 0:14:37.840 on an update. Tough on that Elon Musk action figure doll, 0:14:37.920 --> 0:14:39.800 whatever you want to call it, Carol, He was pretty 0:14:39.880 --> 0:14:42.040 mum on that. Certainly more to come on Bloomberg Business 0:14:42.040 --> 0:14:44.760 Week or see Suitet. Lineup continues with the CEO of 0:14:45.040 --> 0:14:47.400 Echo bat find out why he says Lead is the 0:14:47.440 --> 0:14:50.000 world's best recycling story. Yeah, that's an interesting one. But 0:14:50.000 --> 0:14:52.920 he's also thinking about how the Pivot evs with their 0:14:53.040 --> 0:14:56.800 lithium ion batteries is also affecting his world. This is 0:14:56.800 --> 0:15:05.080 Bloomberg broadcasting from the financial capital of the World, Bloomberg 0:15:05.120 --> 0:15:08.640 eleven Frio in New York to Washington, d C. Bloomberg 0:15:09.600 --> 0:15:12.800 to Boston, Bloomberg one oh six one does San Francisco, 0:15:12.880 --> 0:15:16.360 Bloomberg nine sixty to the country. Sirius XM CHADO one 0:15:16.440 --> 0:15:19.560 nineteen and around the globe, the Bloomberg Business app and 0:15:19.600 --> 0:15:25.200 Bloomberg Radio dot com. This is Bloomberg Business Week, Bloomberg 0:15:25.240 --> 0:15:28.360 ANAF recently reporting have a tipping point for battery electric 0:15:28.440 --> 0:15:32.080 vehicle ascendency has been reached globally and it's about once 0:15:32.120 --> 0:15:35.240 five of new car sales go fully electric, everything changes, 0:15:35.360 --> 0:15:37.920 according to a Bloomberg analysis of the nineteen countries that 0:15:37.960 --> 0:15:39.920 have made the e V pivot, which kind of got 0:15:40.000 --> 0:15:43.600 us wondering about battery recycling overall. Well, fortunately we got 0:15:43.600 --> 0:15:46.760 Marcus Randolf with us. He's executive chairman, CEO and president 0:15:46.880 --> 0:15:50.880 Echo Bad. It's the world's biggest recycler of batteries. Marcus, 0:15:50.880 --> 0:15:53.280 give us a macro view of your world right now 0:15:53.320 --> 0:15:55.840 and help us understand the biggest challenges your company is facing. 0:15:55.920 --> 0:15:57.960 Let me start with the quiz. I love this because 0:15:57.960 --> 0:16:00.720 it's surely helps people understand what bad areas are about. 0:16:00.800 --> 0:16:03.760 What do you think is the most highly recycled products. 0:16:03.920 --> 0:16:05.560 I know what it is because I looked at the website. 0:16:05.680 --> 0:16:07.800 But but you put your paper out on the curb, 0:16:08.000 --> 0:16:12.680 you know, and your battery lead Battery recycling and recovery 0:16:12.720 --> 0:16:16.520 of lead through the recycling process. So so lead is 0:16:16.920 --> 0:16:20.880 by far the world's best recycling start. And we're talking 0:16:20.880 --> 0:16:25.120 about batteries like during cell batteries. Those aren't let lithium ion, 0:16:25.320 --> 0:16:29.120 just lithium referring to lead acid batteries. Now, so so 0:16:29.160 --> 0:16:32.600 you find, well, well, the car batteries, car batteries, those 0:16:32.640 --> 0:16:35.200 big black boxes card with the two little posts on 0:16:35.560 --> 0:16:37.600 those things, we recycle a hundred and three million of 0:16:37.600 --> 0:16:39.520 those years. So what happens is we moved to e VS. 0:16:39.600 --> 0:16:41.960 What does that mean for you? EBS does two things. 0:16:42.080 --> 0:16:44.920 One is, obviously it opens up the world for lithium 0:16:44.960 --> 0:16:46.800 ion batteries, which are very different. But one of the 0:16:46.800 --> 0:16:49.720 things that gets missed is EVS also used lead acid batteries. 0:16:49.760 --> 0:16:51.560 So a lot of people say lead acid batteries are 0:16:51.560 --> 0:16:53.680 going to die, they're going to re replaced by lithium. 0:16:53.800 --> 0:16:55.800 Not true. You know, they're still going to be used. 0:16:55.840 --> 0:16:57.920 Admittedly they don't use as much lead acid as a 0:16:58.000 --> 0:17:00.600 car does, but there's still it's still ancial part of 0:17:00.920 --> 0:17:02.840 our going forward business. So how much demand or what 0:17:02.880 --> 0:17:04.760 are you seeing like in your business? The thing you're 0:17:04.800 --> 0:17:07.000 never going to get away from is what is it 0:17:07.040 --> 0:17:08.800 mean to have this big boom and e v s 0:17:08.840 --> 0:17:10.840 and what is that going to do for lithium? So 0:17:10.960 --> 0:17:13.440 you know that the low end of projections is sort 0:17:13.440 --> 0:17:16.360 of compound annual growth rate. You know that didn't really 0:17:16.400 --> 0:17:18.320 matter how much when you know you're just selling a 0:17:18.320 --> 0:17:20.159 few of easy year, which is where we were it 0:17:20.280 --> 0:17:23.760 or ten years, everybody's worried about lithium. But now now, 0:17:23.800 --> 0:17:26.400 I mean, you know, including plug in electric hybrids, last 0:17:26.440 --> 0:17:28.640 year there were six point six million electric vehicle soul 0:17:28.760 --> 0:17:31.320 six point six million, almost double what they were the 0:17:31.359 --> 0:17:34.320 prior year. So you say, where's this industry going? For US? 0:17:34.520 --> 0:17:37.800 Lithium is both our greatest threat and our greatest opportunity. 0:17:38.000 --> 0:17:39.919 So you you look at what we're trying to do 0:17:39.960 --> 0:17:42.960 as we go forward, and that's to be we are 0:17:43.000 --> 0:17:45.480 by far the industry leader and let asset side, and 0:17:45.520 --> 0:17:48.800 we are rapidly becoming. So on the lithium you have 0:17:48.880 --> 0:17:52.240 to because we want to, you know, to be honest, 0:17:52.320 --> 0:17:54.640 I mean, it is going to be challenging for let 0:17:54.720 --> 0:17:57.000 us batteries or a long term because lithium are just 0:17:57.119 --> 0:18:00.600 their energy density is much more favorable and ability to 0:18:00.680 --> 0:18:03.600 fully discharge is better, so they have big advantages. But 0:18:03.720 --> 0:18:05.960 on costs, they get killed. And so if you have 0:18:06.040 --> 0:18:08.760 low cost applications where you need big surges of power. 0:18:08.960 --> 0:18:11.639 That's right down the world of lead acid batteries. As 0:18:11.680 --> 0:18:13.960 you get over to cars that have long, steady draws 0:18:13.960 --> 0:18:17.760 at last for hours, lithium batteries are fantastic. They're just expensive. 0:18:17.960 --> 0:18:20.119 They're hard to recycle. So I give you the numbers 0:18:20.119 --> 0:18:26.000 for lead acid recycling and recovery lithium recoveries. Now, the 0:18:26.119 --> 0:18:29.639 u e U is trying to legislate sixty percent recovery 0:18:29.760 --> 0:18:31.600 and there are a lot of companies that are making it. 0:18:31.800 --> 0:18:35.479 How usable is it on the other side of that recycling? Uh? 0:18:35.840 --> 0:18:38.200 It is and it isn't. You look at lithium batteries. 0:18:38.240 --> 0:18:40.480 You know, the lithium, nickel, and cobalt deposits in the 0:18:40.600 --> 0:18:43.159 US are not very good. So all this sus come 0:18:43.200 --> 0:18:46.480 from from someplace else. Then the manufacturers are very interested 0:18:46.480 --> 0:18:49.360 in retaining control through the recycling process. So let add 0:18:49.400 --> 0:18:51.119 the battery. You get rid of it out of your car, 0:18:51.240 --> 0:18:53.159 you leave it at pet boys and they give it 0:18:53.160 --> 0:18:56.360 to us, and it just disappears in the system. In lithium, 0:18:56.400 --> 0:18:58.800 the car manufacturers want to own that stuff right through 0:18:58.840 --> 0:19:01.960 the process. That kind of the takeaways here is you're 0:19:01.960 --> 0:19:03.639 going to see a lot of demand. I think there 0:19:03.640 --> 0:19:05.639 are a lot of questions about is there enough supply. 0:19:06.000 --> 0:19:09.080 You know, the recycling is really important, particularly because the 0:19:09.119 --> 0:19:12.480 manufacturers weren't on the resources. But starts a different world. 0:19:12.520 --> 0:19:14.920 But the question I think that you're asking is when 0:19:14.920 --> 0:19:19.399 you recycle it it is recycling? Is it comes back 0:19:19.880 --> 0:19:24.440 to write the matterufactor or is it it did well? Actually, 0:19:24.720 --> 0:19:27.320 so what happens? So they don't have the deposits, so 0:19:27.440 --> 0:19:29.919 they ship the materials here, they make the batteries, or 0:19:29.960 --> 0:19:31.879 they make them in chump. By the way, China has 0:19:32.160 --> 0:19:34.560 remember the giga factories, Well China has about ten times 0:19:34.560 --> 0:19:37.680 more in the US does. So you start severely disadvantage. 0:19:37.680 --> 0:19:40.399 You don't have many giga factories, you don't have many resources. 0:19:40.480 --> 0:19:42.000 Then you get on the back end of this and 0:19:42.119 --> 0:19:44.720 right now there isn't a single company in the US 0:19:44.760 --> 0:19:48.399 that can make cathode quality lithium ion batteries. So they 0:19:48.440 --> 0:19:51.399 process it here, send it back to China, then it 0:19:51.400 --> 0:19:54.320 comes back here again. You know. So where this industry 0:19:54.320 --> 0:19:56.280 has got to evolve is it needs to get to 0:19:56.359 --> 0:19:59.520 where we have the full cycle processing capability here, and 0:19:59.560 --> 0:20:03.040 we're unique is Eco BAT, because we're in the front 0:20:03.119 --> 0:20:06.040 end of that and we do the logistics, the discharging, 0:20:06.040 --> 0:20:09.359 the disassembly, the shredding, the production of what's called black mass, 0:20:09.359 --> 0:20:11.200 which is sort of all of the metals and one 0:20:11.359 --> 0:20:13.640 then it goes off to others who handle the very 0:20:13.680 --> 0:20:15.680 back into the process. Right based on what you're seeing 0:20:15.680 --> 0:20:18.760 this pivot right to alternative energy EVA. What are you 0:20:18.800 --> 0:20:20.560 seeing or how quickly you know as you as you 0:20:20.600 --> 0:20:23.480 think about the story and lead it is the best 0:20:23.520 --> 0:20:26.159 recycled product. And it's also if you don't get it 0:20:26.240 --> 0:20:28.399 right on the recycled side, you are not going to 0:20:28.520 --> 0:20:32.520 have the climate changing elements necessary to deal with windpower 0:20:32.520 --> 0:20:35.440 and solar power. You need energy storage. That was Marcus Randolph, 0:20:35.560 --> 0:20:38.280 CEO of Eco Bat. The company calls itself the world's 0:20:38.280 --> 0:20:41.520 biggest recycler of batteries. You're listening to Bloomberg Business Week. 0:20:41.600 --> 0:20:44.760 Up next, we go from batteries to burritos. Another big 0:20:44.800 --> 0:20:48.480 quarter for the king of fast casual dining. We're talking Chipotle, 0:20:48.640 --> 0:20:51.120 Mexican Grill. Get me some gwalk right now, we're getting 0:20:51.320 --> 0:20:54.920 extra all right, we catch up with the CEO, Brian 0:20:55.040 --> 0:21:05.440 Nicol He joins us. Next, this is bloom Bark. You're 0:21:05.480 --> 0:21:09.399 listening to Bloomberg Business Week with Carol Messer and Bloomberg 0:21:09.440 --> 0:21:14.600 Quick Takes Tim Stinovik from Bloomberg Radio. Shares of Chippotle 0:21:14.760 --> 0:21:17.879 Mexican Grill rolling big time this week. On Wednesday, the 0:21:17.960 --> 0:21:21.080 day after releasing its latest quarterly update, the fast casual 0:21:21.080 --> 0:21:24.600 giant reported second quarter earnings that topped analyst projections. The 0:21:24.600 --> 0:21:27.639 burrito maker is adding new locations and customers are proving 0:21:27.640 --> 0:21:30.199 they're willing to pay more. The company also provided an 0:21:30.280 --> 0:21:34.359 upbeat sales forecast, despite rising food costs and pressure on 0:21:34.359 --> 0:21:37.280 those wages, those are going up. Chipotle Chairman and CEO 0:21:37.320 --> 0:21:39.760 Brian Nichol joined us to help break down the numbers. 0:21:39.960 --> 0:21:45.000 Our customer mix definitely over indexes with higher income, and 0:21:45.560 --> 0:21:49.960 we saw that group actually increase their purchase frequency with us, 0:21:50.440 --> 0:21:53.200 and their spend was also a little bit up. So 0:21:53.400 --> 0:21:56.840 what we concluded is we've seen some trade down and 0:21:57.400 --> 0:22:00.520 people are switching some occasions in digipol way, so we 0:22:00.640 --> 0:22:04.440 feel like we're gaining market share for our company. Uh 0:22:04.480 --> 0:22:06.159 And then at the same token, we did see a 0:22:06.720 --> 0:22:09.000 slight slow down with the lower income consumer from a 0:22:09.000 --> 0:22:12.680 purchase frequency standpoint, but not in their absolute spend. And 0:22:13.200 --> 0:22:14.960 you know, the thing that was really powerful for us 0:22:15.000 --> 0:22:18.200