WEBVTT - Tesla's Vehicles Sales Have Investors Feeling Optimistic 0:00:02.759 --> 0:00:10.600 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.640 --> 0:00:14.600 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:17.880 Eastern on Apple Coarclay and Android Auto with the Bloomberg 0:00:17.960 --> 0:00:21.080 Business App. Listen on demand wherever you get your podcasts, 0:00:21.400 --> 0:00:23.120 or watch us live on YouTube. 0:00:23.880 --> 0:00:26.080 All right, we've been talking a lot about Tesla this morning. 0:00:26.120 --> 0:00:29.520 There delivery numbers came in weaker than expected. We had 0:00:29.600 --> 0:00:33.199 Dan Ives and Webbush Securities on earlier and he was 0:00:33.240 --> 0:00:36.280 just saying, hey, relative to maybe the whisper number, they 0:00:36.320 --> 0:00:38.120 came in a little bit better than expected. Here, let's 0:00:38.120 --> 0:00:40.480 get the broad overview of what's happening at our good 0:00:40.479 --> 0:00:44.000 friends at Tesla stops up about two point eight percent today, 0:00:44.040 --> 0:00:46.120 but it's down about twenty four percent you to date. 0:00:46.159 --> 0:00:50.120 Return to Pierre Farragu, head of Global Technology Infrastructure at 0:00:50.159 --> 0:00:51.120 New Street Research. 0:00:51.400 --> 0:00:52.360 Pierre, thanks so much for. 0:00:52.360 --> 0:00:56.280 Joining us here. How do you think about these Tesla numbers? 0:00:56.320 --> 0:00:58.920 What does it mean for the near and intermediate term 0:00:59.040 --> 0:00:59.920 story at Tesla? 0:01:00.160 --> 0:01:01.640 Yes, as you said, there is a bit of a 0:01:01.960 --> 0:01:06.480 positive surprise, like people tracking very precisely deliveries in various 0:01:06.520 --> 0:01:10.039 markets while expecting slightly lower numbers. The surprise comes from 0:01:10.080 --> 0:01:13.560 the US. The US did is a place where it's 0:01:13.560 --> 0:01:15.720 the most difficult to track the number of Tesla being 0:01:15.760 --> 0:01:20.360 delivered and the US bit expectations. So that's a model 0:01:20.400 --> 0:01:23.880 while coming in doing actually quite well. That's good, But 0:01:24.040 --> 0:01:25.760 then at the end of the day you have to 0:01:25.800 --> 0:01:28.959 remember the big picture. We are down thirteen persons here 0:01:29.000 --> 0:01:33.200 on air. So we are facing a situation where Tesla 0:01:33.280 --> 0:01:36.840 is struggling to sell cars. A gross margin is in 0:01:36.880 --> 0:01:41.000 the latins. To me, Tesla facing good demons should be 0:01:41.040 --> 0:01:43.959 able to defend like mid mid twenties ghost margin. So 0:01:44.920 --> 0:01:47.360 we have like we are facing like a core business, 0:01:47.480 --> 0:01:49.240 not to business that is really at a very low 0:01:49.280 --> 0:01:53.320 point that is struggling. And so that's the difficulty. You have, 0:01:53.440 --> 0:01:56.720 like one structural difficulty that is relatively that we understand 0:01:56.760 --> 0:02:00.880 relatively well. It's that with their current product, Tesla has 0:02:01.000 --> 0:02:05.400 kind of saturated its opportunity. Tesla needs lower highs points 0:02:05.520 --> 0:02:08.680 to keep growing and that's in the plan they're working 0:02:08.720 --> 0:02:11.560 on it. And then you have a number of other issues. 0:02:11.600 --> 0:02:14.360 You know, electric cars are less fashionable than they were 0:02:14.400 --> 0:02:17.880 a couple of years ago. The Tesla brand has suffered, 0:02:18.880 --> 0:02:22.239 particularly in Europe where numbers are down like almost forty 0:02:22.240 --> 0:02:27.359 percent on air and so it is definitely it's difficult 0:02:27.440 --> 0:02:31.600 to quantify, but it is a significant headwind as well. 0:02:32.360 --> 0:02:35.720 And Overhall, you know, the economy is not the best 0:02:35.840 --> 0:02:38.239 you can imagine for Auto DIMA. 0:02:38.320 --> 0:02:40.760 Yeah, I mean when we look at the mag seven stocks, 0:02:40.760 --> 0:02:43.639 we see Tesla as the primary laggard this year, down 0:02:43.680 --> 0:02:46.600 about twenty three percent. And of course we know that 0:02:46.639 --> 0:02:49.680 investors have really been vying for Mask's attention as has 0:02:49.680 --> 0:02:52.800 been really politically involved. So as we're seeing these numbers 0:02:52.840 --> 0:02:56.400 come through, what do things like moving forward? Are these 0:02:56.480 --> 0:03:00.320 numbers a massive impact or are the Tesla loyalists still 0:03:00.320 --> 0:03:03.799 out there? And is there some further positivity to come? 0:03:04.240 --> 0:03:07.600 Yes, you the Testla stock has been on a roller coaster. 0:03:08.360 --> 0:03:10.400 It's like a very low performer this year, but it 0:03:10.520 --> 0:03:13.880 was like a clear outperformer last last year. And as 0:03:13.919 --> 0:03:17.160 you said, you know, it's following, it's following. You know, 0:03:17.760 --> 0:03:20.120 the political care if I may say, of the CEO 0:03:21.080 --> 0:03:26.560 in a musk and like this has created this situation. 0:03:27.320 --> 0:03:30.000 Now if you look at the stock, you know, since 0:03:30.120 --> 0:03:33.840 you know, like April first, what you see that what 0:03:34.040 --> 0:03:36.800 tends to really move the stock is actually the new 0:03:36.880 --> 0:03:41.000 flow around how the company is now focused on deploying 0:03:41.240 --> 0:03:45.840 fleets of robot taxes. They've just started that in a 0:03:45.840 --> 0:03:49.720 couple of weeks ago, like late late last months, and 0:03:49.760 --> 0:03:52.360 I think that's going to be the primary driver of 0:03:52.440 --> 0:03:55.880 the stock going forward. Of course, there is a lot 0:03:55.920 --> 0:03:58.960 of uncertainty on you know, how fast TESTA is going 0:03:59.000 --> 0:04:01.320 to be able to deploy ROBOTEXI. I'll even make your 0:04:01.560 --> 0:04:05.440 proffits like generate the profits out of the robotex Frietz. 0:04:06.000 --> 0:04:08.840 But the size of the price is so gigantic and 0:04:08.920 --> 0:04:11.120 so much more than yotel business that right, this is 0:04:11.160 --> 0:04:13.320 probably what drives us start going forward. 0:04:13.880 --> 0:04:15.840 Pierre, thank you so much for joining us. Always appreciate 0:04:15.840 --> 0:04:18.359 getting your thoughts there. Pierre fargu He's set of Global 0:04:18.440 --> 0:04:21.880 Technology Infrastructure at New Street Research. 0:04:23.880 --> 0:04:27.560 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:04:27.640 --> 0:04:31.039 weekdays at ten am Eastern on Applecarplay and Android Auto 0:04:31.120 --> 0:04:34.200 with the Bloomberg Business App. Listen on demand wherever you 0:04:34.240 --> 0:04:37.240 get your podcasts, or watch us live on YouTube. 0:04:38.040 --> 0:04:39.880 All right, let's get back to Tesla. It's being we've 0:04:39.880 --> 0:04:43.160 been talking about today. They reported some delivery numbers give 0:04:43.200 --> 0:04:45.400 it a little bit light of forecast. Stocks up a 0:04:45.400 --> 0:04:47.640 little bit today and Dan ives and what Bush Security 0:04:47.680 --> 0:04:50.160 suggested that might be because the wish for numbers out 0:04:50.160 --> 0:04:53.320 there were a little bit lower, so the company exceeded them. 0:04:53.720 --> 0:04:56.800 So we're there. But there's surely been some negative sentiment 0:04:56.839 --> 0:04:59.560 around Tesla stock. It's down twenty five percent year to date, 0:05:00.120 --> 0:05:04.000 some concerns about Elon Musk and his commitment to the company. 0:05:04.720 --> 0:05:07.599 But there's still a lot to like out there about 0:05:07.640 --> 0:05:10.760 Tesla if you look at the numbers. And that's what 0:05:10.760 --> 0:05:13.240 our next guest does, Matt Winkler. He's editor in chief 0:05:13.240 --> 0:05:17.039 emeritus of Bloomberg News. He founded Bloomberg News. To me, 0:05:17.160 --> 0:05:18.640 that's the point here, and he joins us here on 0:05:18.680 --> 0:05:21.160 our Bloomberg and Active Broker studio. Matt, thanks so much 0:05:21.160 --> 0:05:23.120 for joining us. You've got to call him out today 0:05:23.160 --> 0:05:25.680 with your colleague Hinte saying, Hey, if you look at 0:05:25.720 --> 0:05:28.880 the numbers here at Tesla, it's an extraordinary story. 0:05:29.080 --> 0:05:29.400 Still. 0:05:30.080 --> 0:05:32.680 Yeah, and I, by the way, thank you for having me. 0:05:32.880 --> 0:05:38.440 And I would invoke our founder Mike Bloomberger himself, who 0:05:38.960 --> 0:05:43.200 when he was Mayor of New York would say often 0:05:43.880 --> 0:05:47.200 in God, we trust everyone else bring data, and so 0:05:47.360 --> 0:05:52.040 the data compiled by Bloomberg shows that this ed startup 0:05:52.120 --> 0:05:55.960 would call Tesla, founded by engineers Martin Eberhart and Mark 0:05:56.000 --> 0:05:59.800 Tarpening in two thousand and three, is still the world's 0:05:59.839 --> 0:06:03.360 low largest automaker, ninth largest public company, and worth more 0:06:03.400 --> 0:06:06.320 than the gross domestic product of Saudi Arabia. And for 0:06:06.400 --> 0:06:10.120 all its might as a global sales leader, Toyota Motor Corp. 0:06:10.760 --> 0:06:14.000 Is about a quarter of Tesla's more than one trillion 0:06:14.080 --> 0:06:17.880 dollar valuation as of today, after the very numbers that 0:06:17.920 --> 0:06:19.840 you reported, and by the way, the stock is up 0:06:19.839 --> 0:06:27.080 the most since June. Okay, so initially the media take 0:06:27.320 --> 0:06:30.680 was negative, negative, negative, and people with the most at stake, 0:06:30.720 --> 0:06:34.320 which is where the data is, say not so fast. 0:06:34.760 --> 0:06:36.840 And there's a reason for that. You know what we 0:06:36.920 --> 0:06:39.680 did my college pay and I is we asked that 0:06:39.800 --> 0:06:44.000 very question. Okay, with all this negative news that is prevailing, 0:06:44.160 --> 0:06:47.400 that is the prevailing narrative. Why is that, through thick 0:06:47.440 --> 0:06:51.080 and thin every single month this year, Tesla is still 0:06:51.120 --> 0:06:57.800 worth more than Toyota, and Bloomberg's own alternative artificial intelligence 0:06:57.839 --> 0:07:03.000 function DSX tells there are plenty of reasons. One is 0:07:03.040 --> 0:07:08.000 that if you just took out the vehicle itself. There's 0:07:08.040 --> 0:07:12.880 still a trillion dollar market capitalization on the autonomous striving 0:07:13.240 --> 0:07:17.080 that is coming soon to everyone through Tesla. So there 0:07:17.080 --> 0:07:19.600 are all kinds of reasons why Tesla has the value 0:07:19.640 --> 0:07:21.080 that it has. But I would like to share with 0:07:21.120 --> 0:07:23.680 you something that I got from a Bloomberg user this 0:07:23.760 --> 0:07:27.240 morning at an email. He said, we don't need AI 0:07:27.400 --> 0:07:31.520 to understand why Tesla critics are losing. Critics are either 0:07:31.560 --> 0:07:35.920 motivated by hate we've seen that politics, or a misunderstanding 0:07:35.920 --> 0:07:39.800 of time. Tesla represents the most extraordinary array of products, 0:07:39.840 --> 0:07:42.520 some of which are destined to become core components of 0:07:42.560 --> 0:07:46.800 the future economy and life of humanity. That's from our 0:07:47.200 --> 0:07:51.800 Bloomberg user, John Billings, who's in Washington, DC. So this 0:07:51.880 --> 0:07:54.000 is a big part of the story that everybody misses. 0:07:54.040 --> 0:07:57.560 And if you just look at quarterly sales reports, that's 0:07:57.560 --> 0:07:58.960 not going to give you the picture. But I would 0:07:59.040 --> 0:08:02.240 say even in that context, the Model Why was the 0:08:02.280 --> 0:08:05.720 best selling vehicle in the world in twenty twenty three, 0:08:06.280 --> 0:08:10.160 twenty twenty four, and poised to be certainly the best 0:08:10.400 --> 0:08:15.200 ev selling vehicle in twenty twenty five and maybe again 0:08:15.440 --> 0:08:19.320 repeat and the reason why the deliveries were slow in 0:08:19.360 --> 0:08:23.600 the first in the second quarter was because they were retooling, renovating, 0:08:24.320 --> 0:08:28.520 updating the model. Why sales are way up in Norway 0:08:28.760 --> 0:08:31.680 and Spain by the way, so so much for the 0:08:31.720 --> 0:08:32.679 demand problem. 0:08:32.720 --> 0:08:35.000 How are you thinking about it in relation to peers? 0:08:35.040 --> 0:08:36.480 I mean, I know a lot of people have really 0:08:36.480 --> 0:08:41.439 been clamoring for Musk to turn his attention back to Tesla. 0:08:41.520 --> 0:08:42.800 And I mean when you think about some of these 0:08:42.920 --> 0:08:46.040 numbers that were parsing, as you mentioned, and your story 0:08:46.600 --> 0:08:48.840 that everything about Tesla these days has really been ranging 0:08:48.840 --> 0:08:51.320 from bad to worse. So when you think about the 0:08:51.320 --> 0:08:55.200 future of the company in comparison to peers, you know, 0:08:55.240 --> 0:08:57.640 what are just some of the things that you expect 0:08:57.960 --> 0:08:59.880 in terms of performance moving forward? 0:09:00.000 --> 0:09:02.480 Well, let's just look at the past ten years. By 0:09:02.480 --> 0:09:08.679 the way, twenty fifteen, most of the analysts that provide 0:09:08.720 --> 0:09:12.200 forecasts were negative about Tesla. Barrish, don't buy the stock. 0:09:12.679 --> 0:09:18.280 But what happened. Tesla's ninety seven point seven billion dollars 0:09:18.320 --> 0:09:21.559 of revenue last year is more than thirty times it's 0:09:21.600 --> 0:09:26.920 sales a decade ago. Now that outperforms even China's byd Okay, 0:09:27.040 --> 0:09:30.439 which has been the star of late in the media narrative. 0:09:32.000 --> 0:09:38.280 But if you look at something like Tesla's earnings before interest, taxes, depreciation, hamorgtization, 0:09:39.000 --> 0:09:42.120 it's more than three hundred times the company's profit a 0:09:42.160 --> 0:09:47.720 decade ago. Number two byd grew only fifteen times. You know, 0:09:47.840 --> 0:09:51.480 if you look at Tesla's current market capitalization, it's thirty 0:09:51.559 --> 0:09:55.000 one times it's value a decade ago, which is just 0:09:55.080 --> 0:09:58.280 another way of saying that among the top ten automakers 0:09:58.760 --> 0:10:03.000 that Tesla competes with, Tesla's revenue growth, it's profit, and 0:10:03.040 --> 0:10:07.199 its market value are superior, according to data compiled by Bloomberg. 0:10:07.559 --> 0:10:12.439 Always brand value. Last question, One could argue the evaluation 0:10:12.520 --> 0:10:16.480 has always had a big, big Elon Musk premium based 0:10:16.480 --> 0:10:21.199 into it. His brand arguably has been diminished over the 0:10:21.280 --> 0:10:24.400 last six months with his political actions in doge A. 0:10:24.640 --> 0:10:26.600 Is that a concern or should it be a concern 0:10:26.679 --> 0:10:28.840 for investors? And you think is there a long term 0:10:28.880 --> 0:10:29.760 brand issue? 0:10:29.760 --> 0:10:30.360 Do you think so? 0:10:30.520 --> 0:10:34.600 I'm not qualified to answer that question, However, somebody who 0:10:35.200 --> 0:10:38.200 probably is is Nicholas Coelis, who's the co founder of 0:10:38.280 --> 0:10:41.160 Data Trek, and he's been covering the auto industry since 0:10:41.200 --> 0:10:45.480 the nineteen eighties, which is kind of when I sort 0:10:45.480 --> 0:10:50.679 of entered the picture and he says, there's something that 0:10:50.880 --> 0:10:55.000 is no Algo spreadsheet can understand, which is why hero 0:10:55.160 --> 0:10:57.600 led companies are often so valuable. Yep, yep. 0:10:57.640 --> 0:11:00.600 Interesting. All right, Matt, great column as always. Matt Winkler, 0:11:00.720 --> 0:11:04.960 Editor in chief, Emeritis, founder of Bloomberg News. I think 0:11:04.960 --> 0:11:07.720 he drives around one of these Tesla things. I kind 0:11:07.720 --> 0:11:10.200 of went there last time. I got my young youngest 0:11:10.520 --> 0:11:13.280 a hybrid Honda, so I'm kind of getting there. But 0:11:13.640 --> 0:11:15.720 give me the hey close, give me the gass. 0:11:16.320 --> 0:11:17.320 Mapple. Thank you so much. 0:11:17.360 --> 0:11:18.160 We appreciate that. 0:11:19.840 --> 0:11:23.520 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:11:23.600 --> 0:11:27.000 weekdays at ten am Eastern on Applecarplay and Android Auto 0:11:27.120 --> 0:11:30.160 with the Bloomberg Business app, Listen on demand wherever you 0:11:30.200 --> 0:11:33.200 get your podcasts, or watch us live on YouTube. 0:11:34.000 --> 0:11:36.840 I'd say one of the more competitive industries I see 0:11:36.840 --> 0:11:39.080 out there day in and day out. As a wireless business. 0:11:39.120 --> 0:11:42.000 You got the Big three, eighteen T Verizon, Team Mobile, 0:11:42.040 --> 0:11:45.280 and I mean it's all on price. I mean it's 0:11:45.320 --> 0:11:47.760 all kind of the same. I don't know that. Being said, 0:11:47.800 --> 0:11:50.720 I've been with Verizon since the beginning of wireless, so 0:11:50.760 --> 0:11:53.760 maybe likewise get no churing going there. John Butler, he 0:11:53.760 --> 0:11:56.600 covers all this stuff for Bloomberg Intelligence. John Butler, senior 0:11:57.040 --> 0:11:59.680 telecom anaists for Bloomberg Intelligence. He's based down there in 0:11:59.720 --> 0:12:03.000 print in New Jersey. John, what's the state of the 0:12:03.040 --> 0:12:07.440 wireless industry today? Again, you've got those big three? How competitive? 0:12:07.520 --> 0:12:09.640 Is it? Hyper competitive? Paul? 0:12:09.720 --> 0:12:12.640 It really is interesting. Just as you said, there's a 0:12:12.720 --> 0:12:16.880 lot the Big three at and T verizing T Mobile. 0:12:16.920 --> 0:12:19.760 They're always slugging it out with themselves. But now that 0:12:19.840 --> 0:12:24.200 you've got the cable operators coming in offering wireless at 0:12:24.360 --> 0:12:28.760 very enticing price points, and their brand strength is getting better, 0:12:28.840 --> 0:12:31.680 and so they're becoming more and more of an issue 0:12:32.240 --> 0:12:35.440 quarter and in quarter about well, we as analysts sort 0:12:35.440 --> 0:12:38.840 of measure as the health of a telecom and any 0:12:38.840 --> 0:12:41.760 given quarter as we look at the number of net 0:12:41.800 --> 0:12:46.200 news smartphone subscribers that carrier ads or phone net ads 0:12:46.200 --> 0:12:49.400 as they're called. And what we've seen every quarter is 0:12:49.440 --> 0:12:52.720 the cable operators now are getting even up to half 0:12:52.800 --> 0:12:56.280 the net ads in a given quarter, So they're becoming 0:12:56.320 --> 0:13:00.160 a big factor. Having said all that, I'm impressed with 0:13:00.280 --> 0:13:04.720 how the carriers are keeping their service revenue growth pretty steady. 0:13:05.320 --> 0:13:07.880 You know, telecom is not a growth business. So if 0:13:07.880 --> 0:13:11.400 you're getting three to five percent growth in your service revenue, 0:13:12.080 --> 0:13:14.360 it's a pretty good quarter. And I think we're in 0:13:14.440 --> 0:13:18.319 for more of that this quarter with the exception of Horizon. 0:13:18.360 --> 0:13:20.120 Then we can talk more about that if. 0:13:20.080 --> 0:13:21.839 You want, John. 0:13:22.120 --> 0:13:24.680 When I think about wireless carriers and I think about 0:13:24.720 --> 0:13:26.680 some of these phone providers, it feels as though everyone 0:13:26.720 --> 0:13:28.920 has their brand that they stick to. And as we 0:13:28.920 --> 0:13:31.080 were mentioning earlier, does it really feel like there's necessarily 0:13:31.160 --> 0:13:34.959 anything to entice people to hop around? But given all 0:13:34.960 --> 0:13:37.240 of this in regards to marketing or really just being 0:13:37.280 --> 0:13:41.319 able to drive demand, where are you seeing? Which company 0:13:41.360 --> 0:13:42.800 are you seeing as the biggest leader here? 0:13:43.160 --> 0:13:47.280 Team Mobile is the runaway hit Nora. It's amazing. They really. 0:13:48.960 --> 0:13:52.320 Team Mobile Tuesdays, they have giveaways once a week. They're 0:13:52.640 --> 0:13:57.840 brilliant marketers, just brilliant, And it's funny if you rewind 0:13:57.880 --> 0:14:01.040 the clock fifteen years they had a near death experience, 0:14:01.120 --> 0:14:03.040 Like I didn't think that carrier was going. 0:14:03.000 --> 0:14:05.520 To make it. They brought in a very. 0:14:05.400 --> 0:14:09.960 Dynamic CEO named John Ledger, who really turned around the brand. 0:14:10.000 --> 0:14:13.960 He made himself the face of the brand. They branded 0:14:14.000 --> 0:14:18.400 it as this sort of hip, counter culture, consumer friendly brand. 0:14:19.040 --> 0:14:22.000 People just love it. And in the meantime, they've done 0:14:22.040 --> 0:14:25.800 a great job updating the network and upgrading it so 0:14:26.920 --> 0:14:29.600 and after buying Sprint, of course, they now have the 0:14:29.680 --> 0:14:32.680 scale to really compete with AT and T and Verizon. 0:14:32.720 --> 0:14:36.200 They've gone from a distant third in the industry to 0:14:36.320 --> 0:14:40.560 now the second largest wireless carrier. And they just they 0:14:40.720 --> 0:14:44.400 lead the industry and net ads quarter in in quarter out, 0:14:45.280 --> 0:14:47.800 which is a testament to the power of their marketing. 0:14:48.440 --> 0:14:51.480 All Right, I'm a Verizon wireless customer, been one since 0:14:51.520 --> 0:14:54.440 the beginning of this whole wireless thing. Me too, by 0:14:54.520 --> 0:14:57.400 the way, exactly, So what's the story for those guys 0:14:57.440 --> 0:14:59.640 in terms of how they're dealing with the competition. 0:15:00.160 --> 0:15:03.760 I think it's easy to sort of play armchair CEO here, 0:15:03.800 --> 0:15:07.520 but I think Verizon is making a bit of a 0:15:07.600 --> 0:15:11.880 mistake by not meeting rivals in promotions. They really take 0:15:11.920 --> 0:15:15.800 the high ground. They want to protect a premium brand image. 0:15:15.800 --> 0:15:18.680 For years and years they had the best network out there. 0:15:18.800 --> 0:15:21.680 I still think they have the edge there, but that 0:15:21.760 --> 0:15:24.560 gap is closing, particularly in the minds of a lot 0:15:24.600 --> 0:15:28.560 of consumers that don't follow the industry. T Mobile keeps 0:15:28.600 --> 0:15:31.440 banging away that they have the best network in the US, 0:15:31.520 --> 0:15:35.040 and so that sort of premium brand image that Verizon 0:15:35.120 --> 0:15:37.720 had is beginning to erode. 0:15:37.840 --> 0:15:41.240 And yet they're not meeting T Mobile or the cable. 0:15:40.920 --> 0:15:45.840 Guys sort of you know, tip for tad on promotions 0:15:45.960 --> 0:15:50.040 and so on the margin. In recent quarters at least 0:15:50.080 --> 0:15:54.240 they've lost phone subscribers. Not a lot, but it's beginning 0:15:54.240 --> 0:15:57.160 to really chip away for them, and it's chipping away 0:15:57.200 --> 0:16:02.160 at their service revenue growth again because I just don't 0:16:02.200 --> 0:16:03.600 think they're promoting enough. 0:16:04.680 --> 0:16:04.920 John. 0:16:05.000 --> 0:16:08.120 So you've got the big three, what is the leadest 0:16:08.160 --> 0:16:10.440 with M and A in the space? Is there anything 0:16:10.520 --> 0:16:11.440 left to consolidate? 0:16:12.160 --> 0:16:13.160 Not much, Nora. 0:16:13.320 --> 0:16:17.640 You know there's been where the telcos are really looking 0:16:17.680 --> 0:16:20.880 for growth is on the broadband side, and you've seen 0:16:20.920 --> 0:16:26.800 a lot of consolidation there with the Verizon most recently 0:16:26.840 --> 0:16:30.520 buying Frontier, which is a big fiber provider. They really 0:16:30.560 --> 0:16:35.680 have strength in several states across the US. AT and 0:16:35.720 --> 0:16:38.440 T has done a really good job. They're buying Luman's 0:16:38.520 --> 0:16:42.920 fiber business. So you've got consolidation there on the wireless side. 0:16:43.000 --> 0:16:45.280 You've seen t mobiles snapping up a lot of the 0:16:45.400 --> 0:16:52.240 independent and private prepaid brands like Mint Mobile is one 0:16:52.240 --> 0:16:55.120 of their most recent They're buying TDS, which is a 0:16:55.160 --> 0:16:59.760 small regional wireless carrier. So there really is nothing left 0:16:59.800 --> 0:17:03.680 here or except for big transformational acquisitions, and they really 0:17:03.720 --> 0:17:05.800 would be gigantic on that scale. 0:17:06.240 --> 0:17:07.879 So I'm just not seeing it. 0:17:08.119 --> 0:17:10.639 So John, just real quickly here, is this an r 0:17:10.720 --> 0:17:13.960 POO story? Is this just raising prices to consumers? Is 0:17:13.960 --> 0:17:16.919 that the growth story here for most of these big. 0:17:16.800 --> 0:17:21.200 Guys, it's raising it's raising prices, Paul, Definitely, that's how 0:17:21.200 --> 0:17:24.480 you're getting that three to five percent service revenue growth. 0:17:24.480 --> 0:17:26.560 But I think another part of the story and one 0:17:26.640 --> 0:17:30.800 to watch is that Telco expansion into broadband. They're doing 0:17:30.840 --> 0:17:35.239 a great job there expanding into fiber and both that 0:17:35.440 --> 0:17:39.520 and fixed wireless access which is getting broadband over the air. 0:17:40.200 --> 0:17:41.879 So I think we're going to see a lot of 0:17:41.880 --> 0:17:45.600 growth and increasing amount of growth to be precise, in 0:17:45.680 --> 0:17:48.320 coming quarters coming from that end of the business. 0:17:48.600 --> 0:17:50.280 All right, John, thanks so much for joining us. Always 0:17:50.280 --> 0:17:53.280 appreciate getting update from you. John Butler. He's a senior 0:17:53.320 --> 0:17:56.280 telecom analyst for Bloomberg Intelligence. He's based down there in 0:17:56.320 --> 0:18:00.560 our Princeton office looking at this the telecom stocks here, 0:18:00.760 --> 0:18:03.000 they've actually got some decent returns this year. I was 0:18:03.000 --> 0:18:07.440 looking at the AT and T, Verizon, T Mobile, AT 0:18:07.560 --> 0:18:10.800 and T year to dates up twenty five percent, Verizon's 0:18:10.880 --> 0:18:13.080 up nine percent, and T Mobiles up eight percent, and 0:18:13.160 --> 0:18:16.600 on a trailing twelve month basis EIGHTE and T's up 0:18:16.720 --> 0:18:20.200 fifty percent, Verizon six percent, and T Mobile thirty three percent. 0:18:20.280 --> 0:18:22.959 So for stocks that kind of grow top line, as 0:18:23.040 --> 0:18:24.919 John was saying, kind of three eight to five percent, 0:18:25.520 --> 0:18:28.120 some pretty decent returns as they try to expand their 0:18:28.119 --> 0:18:31.359 business lines away from their core wireline and wireless and 0:18:31.600 --> 0:18:33.719 get increasingly into broadbands. So we'll keep an eye on 0:18:33.720 --> 0:18:35.639 some of those telecom names. 0:18:37.320 --> 0:18:41.000 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:18:41.080 --> 0:18:44.560 weekdays at ten am Eastern on Applecarcklay and Android Auto 0:18:44.600 --> 0:18:47.639 with the Bloomberg Business app. Listen on demand wherever you 0:18:47.680 --> 0:18:50.840 get your podcasts, or watch us live on YouTube. 0:18:51.240 --> 0:18:54.000 Jeffrey Palmer joins as Senior vice president, head of Multi 0:18:54.400 --> 0:18:58.000 Asset Solutions. I'm not sure what that is, but I'm 0:18:58.000 --> 0:19:00.000 going to say it has to do with some alternative investment, 0:19:00.280 --> 0:19:04.680 maybe some real investments like real estate. Jeff, thanks so 0:19:04.720 --> 0:19:07.520 much for joining us here. Coeny Steers, I've known this 0:19:08.520 --> 0:19:11.480 asset manager on the street forever, but I've never done 0:19:11.520 --> 0:19:15.040 business with them because you don't really own media stocks, 0:19:15.040 --> 0:19:18.359 which was my game. You guys own real estate reads 0:19:18.640 --> 0:19:21.639 stuff like that. Talk to us about your how you 0:19:21.680 --> 0:19:23.679 guys look at the marketplace where you see opportunity. 0:19:23.880 --> 0:19:26.719 Yeah, so thanks for having me this morning. So we focus, 0:19:26.760 --> 0:19:29.800 as you mentioned, on real assets and alternative income strategies, 0:19:29.800 --> 0:19:36.080 and those real assets strategies in particular real estate, infrastructure, commodities, 0:19:36.400 --> 0:19:39.320 natural resource equities, in short, things that are exposed to 0:19:39.359 --> 0:19:41.840 the real economy that have real ties to the economy, 0:19:42.400 --> 0:19:46.000 inflation sensitive assets. So that's certainly been a really important 0:19:46.000 --> 0:19:49.199 part of the world these days. And then that all 0:19:49.280 --> 0:19:51.960 kind of fits in also to that alternatives universe that 0:19:52.359 --> 0:19:56.280 we think offers diversification to your traditional stock and bond portfolio. 0:19:56.880 --> 0:20:00.639 So I cover Reads for our equities teams. Super happy 0:20:00.640 --> 0:20:01.280 to have you here. 0:20:01.760 --> 0:20:02.560 As I'm looking at. 0:20:02.480 --> 0:20:05.399 Read's performance this year, I mean, we're seeing shares that 0:20:05.680 --> 0:20:08.200 didn't really do much. I'm looking at engageentsuff about four 0:20:08.240 --> 0:20:11.000 tenths of a percent so far this year. What are 0:20:11.000 --> 0:20:13.840 you seeing in terms of performance and opportunities within the 0:20:13.840 --> 0:20:16.359 read space, any particular sub sectors that you're keeping an 0:20:16.400 --> 0:20:16.679 eye on. 0:20:16.960 --> 0:20:18.840 Yeah, so, I mean we should also kind of think 0:20:18.880 --> 0:20:21.280 about the year has already been full of a whole 0:20:21.280 --> 0:20:23.600 bunch of rotation. It was a pretty good first quarter 0:20:23.800 --> 0:20:25.520 for reads. They've cooled off a little bit in the 0:20:25.520 --> 0:20:27.920 second quarter, and that sort of is the mirror image 0:20:28.160 --> 0:20:31.920 from the broader SMP. Broadly speaking, we think that reads 0:20:31.960 --> 0:20:35.520 are pretty fairly valued, actually, you know, attractive relative to 0:20:35.920 --> 0:20:39.840 broader equity markets. Within the reed space, you know, there's 0:20:39.840 --> 0:20:43.080 certain areas that we like, and then within the within 0:20:43.119 --> 0:20:45.960 the private real estate space, I would also add, you know, 0:20:46.000 --> 0:20:49.160 there's areas like open air shopping centers that have become 0:20:49.440 --> 0:20:51.320 you know, to us, we think our finding a bottom 0:20:51.320 --> 0:20:53.679 and in that private space is a little bit different 0:20:54.000 --> 0:20:55.400 than the listed space as well. 0:20:56.080 --> 0:20:58.600 In private space, Let's just like I always made the 0:20:58.640 --> 0:21:02.080 mistake of commercial real estate just oh it's office so 0:21:02.200 --> 0:21:05.359 much more. I've now learned that through people kind of 0:21:05.400 --> 0:21:07.600 pointing it out to me. Where do in commercial real 0:21:07.680 --> 0:21:09.800 estate broadly defined, where do you guys see value in 0:21:09.840 --> 0:21:10.440 the private side. 0:21:10.520 --> 0:21:13.560 Yeah, so Nora will tell you that office is only 0:21:13.600 --> 0:21:17.240 about three or four percent of the total listed index. 0:21:17.280 --> 0:21:20.480 Now that's down and our team has been underweight office 0:21:20.520 --> 0:21:23.120 for a long time, and so we've really benefited from 0:21:23.200 --> 0:21:26.560 that trade. So within that space I mentioned in the 0:21:26.560 --> 0:21:29.440 private space, that open air retail, it looks a little 0:21:29.440 --> 0:21:32.480 bit better. In listed markets, we favored things like multi 0:21:32.480 --> 0:21:36.639 family homes. Within healthcare maybe a little bit nicheer, but 0:21:37.440 --> 0:21:40.760 you know, senior living areas. Certainly, Data centers have been 0:21:40.960 --> 0:21:43.600 a very important part. That's true not only in real estate, 0:21:43.840 --> 0:21:46.359 but also things tied to that in the infrastructure space 0:21:46.400 --> 0:21:46.760 as well. 0:21:47.080 --> 0:21:50.000 So you mentioned open air shopping centers. Do you mind 0:21:50.000 --> 0:21:52.200 just explaining to our listeners what exactly that is, because 0:21:52.200 --> 0:21:54.600 I know a lot of people were talking for a 0:21:54.640 --> 0:21:56.520 long time about the death of the mall, so. 0:21:57.320 --> 0:21:59.640 Meat to that, and this is not quite the mall, 0:22:00.119 --> 0:22:02.960 the renaissance of the mall, if you like. So think 0:22:02.960 --> 0:22:07.080 about in some cases outlet centers or in some cases 0:22:07.480 --> 0:22:12.280 open air outside where you have necessity based shopping center, 0:22:12.359 --> 0:22:15.200