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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Let's bring in Ross Gerber. He has thoughts on both

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Speaker 2: of these companies. He's president and CEO of Gerber Kawasaki

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Speaker 2: Wealth and Investment Management. They've got about four billion in

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Speaker 2: assets under management, and he's with us from my bet

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Speaker 2: lovely Santa Monica, California. How warm is it by you?

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Speaker 3: Seventy five?

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Speaker 4: And Sonny, I'm right next to the beach too, so

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Speaker 4: I don't want to rub it.

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Speaker 1: That's enough, We're moving on.

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Speaker 2: We're done with you.

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Speaker 4: No, we're so glad to have you here.

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Speaker 3: Ask me.

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Speaker 2: I know, I know, I know, I'm a sucker for

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Speaker 2: paying here. Hey, what story is more interesting to you? Ross?

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Speaker 2: Is it Tesla and the possible combination of SpaceX x

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Speaker 2: AI or is it Disney?

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Speaker 4: Well, the Disney story is a little bit sad for

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Speaker 4: me because I'm just like, I've owned this compedy for

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Speaker 4: my whole life.

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Speaker 3: And and Iger has done.

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Speaker 4: A great job sort of refixing the business and getting

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Speaker 4: good movies back in the theaters and such, but they

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Speaker 4: just can't seem to get the momentum going. And the

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Speaker 4: valuation for Disney just makes no sense. It's so cheap

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Speaker 4: relative to what they're willing to play for Warner Brothers assets,

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Speaker 4: which are garbage compared to Disney. But they just seem like,

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Speaker 4: maybe this company needs to be broken up. Wow, that's

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Speaker 4: part of it, that's part of it.

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Speaker 1: What does that look like? What does that breakup look like?

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Speaker 3: Ross?

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Speaker 4: Well, see, Josh and Dana are both great executives, so

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Speaker 4: like they have like the fact they have to pick

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Speaker 4: one is the problem because Dana runs entertainment and Josh

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Speaker 4: runs the theme parks and all this kind of stuff,

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Speaker 4: and they're just completely different businesses with different skill sets.

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Speaker 4: And maybe they should be co CEOs, even though I

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Speaker 4: hate that formula for businesses. Disney's just the parts are

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Speaker 4: worth more than the whole. And we've waited five plus

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Speaker 4: years since the pandemic for them to do something good

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Speaker 4: and they haven't. So it's time for change at Disney,

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Speaker 4: and I think it's breaking up the business and spinning

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Speaker 4: off ESPN.

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Speaker 1: Would that be the only thing spun off? It would

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Speaker 1: just ESPN would be.

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Speaker 4: No, it should be three companies the way I see.

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Speaker 1: It, what should they be?

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Speaker 4: Well, you have theme parks, resorts and experience. Oh that

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Speaker 4: the cruise ships is one, and then you have you know,

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Speaker 4: your streaming business as the other, and then you have

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Speaker 4: ESPN Sports as the third right, so you have entertainment

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Speaker 4: that's non sports, and then you have a pure sports play.

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Speaker 4: Would that they just sold ten percent to the NFL?

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Speaker 1: Would that work with all the cross pollination that happens

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Speaker 1: these days, Like you know, you go on a Disney

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Speaker 1: cruise and the Disney IP is everywhere you go see

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Speaker 1: a Disney film, and if it's a popular film, that

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Speaker 1: ends up becoming something that is an attraction at one

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Speaker 1: of the parking resorts. It's supposed to be this virtual

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Speaker 1: cycle that for years worked out really well. Could they

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Speaker 1: still do that as separate companies?

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Speaker 4: Yes, and I think it still works now that way,

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Speaker 4: you know, but like explain how the sports business really

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Speaker 4: matters when it comes to going, you know, on a cruise.

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Speaker 4: It's nice to have ESPN on the TV there, but

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Speaker 4: there's no relationship really. So I get when you're making

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Speaker 4: a movie you wanted to go through the streamers, but

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Speaker 4: I'm saying keep that all together. And then they licensed

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Speaker 4: all their IP to the theme parks and resorts anyway,

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Speaker 4: so it would just be an exclusive licensing agreement.

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Speaker 3: I think it's actually quite simple.

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Speaker 4: I think the real issue is extracting value from the

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Speaker 4: very valuable assets and IP that Disney has while everybody's

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Speaker 4: fighting over crappy IP and assets, like Disney has the

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Speaker 4: best assets in Hollywood.

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Speaker 3: So you know, I don't know.

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Speaker 4: I just don't think they have a future of the market,

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Speaker 4: saying like, wait, we don't see this future that you're

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Speaker 4: making for us. Iigers ready to leave, you know. So

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Speaker 4: I actually think this story is pretty interesting because you know,

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Speaker 4: the entertainment business is never going to be the same

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Speaker 4: after this murder goes through, and I don't know what

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Speaker 4: it looks like on the other side.

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Speaker 2: One more company, Well, I expect to you in one question. No,

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Speaker 2: forgive me, I broke in on you. But I do

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Speaker 2: wonder you know Roscoe back a few years and I

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Speaker 2: remember doing this deep dive on Disney and talking with

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Speaker 2: Bob and all the executives and just this whole idea,

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Speaker 2: like Tim said, this cross pollination and people.

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Speaker 1: Well before Bob left for the first time, yeah, this.

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Speaker 2: Is right exactly. And you know, people talked about the

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Speaker 2: value of ESPN, like it that's the value of the company.

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Speaker 2: But it sounds like there is value in a lot

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Speaker 2: of parts today and hence why you would argue for

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Speaker 2: breaking it up into three. Is that is that true?

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Speaker 3: Yeah?

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Speaker 4: I mean I love the parks and resorts and cruise business.

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Speaker 4: I mean that business is killing it for them. It's

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Speaker 4: tons of cash flow. Like people love the cruises. They

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Speaker 4: just launched a few ships. They've got a great business there.

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Speaker 4: I love the streaming business they finally, I mean, once

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Speaker 4: they get this all under one roof, under Disney plus Hulu,

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Speaker 4: Disney Plus is a is a great streamer and a

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Speaker 4: real competitor out there to the other streamers. And then

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Speaker 4: you got ESPN, which is now like dominating sports again

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Speaker 4: and really has a piece of every major you know

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Speaker 4: league out there from a broadcasting perspective. But ESPN financials

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Speaker 4: don't make any sense next to the cruise ship financials

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Speaker 4: because ESPN loses money having these big events you know

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Speaker 4: that we all want on ESPN, and they make money

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Speaker 4: when there aren't big events. Actually it's kind of a

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Speaker 4: weird business. So they just don't compliment each other. And

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Speaker 4: you saw it in the earning support, which was generally

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Speaker 4: a very good report for Disney, and the stock gets

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Speaker 4: hammered because when you look at all the moving parts.

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Speaker 3: It's never consistent.

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Speaker 4: And so I just think if they were able to

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Speaker 4: prove that these assets I think are worth closer to

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Speaker 4: one hundred and fifty dollars a share, and that's what

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Speaker 4: it was trading at, then I'd say I wouldn't be

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Speaker 4: saying this one hundred dollars a share. You got to

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Speaker 4: break up this company and find value for shareholders after

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Speaker 4: five years of waiting.

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Speaker 1: Okay, Disney down seven point four percent at one O

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Speaker 1: four forty three right now, from in your view, the

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Speaker 1: move to break up a company into separate parts, to

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Speaker 1: combine a company in two different companies intech to one company.

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Speaker 1: Let's talk a little bit about Elon Musk being in

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Speaker 1: advanced talks to combine SpaceX with Xai. This according to

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Speaker 1: people familiar with the matter. You had a really interesting

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Speaker 1: comment out on social media earlier today. You wrote, Yeah,

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Speaker 1: x was out of money, merged with Xai, Xai out

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Speaker 1: of money, merged with SpaceX, SpaceX out of money, merged

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Speaker 1: with Tesla when they are all out of money? Dot

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Speaker 1: dot dot. You obviously are not a fan of this idea.

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Speaker 4: No, you know, it's not that it's just first of all,

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Speaker 4: you're saying there Elon Musten talks with himself, like who's

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Speaker 4: he in talks with? I don't think Elon must talks

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Speaker 4: to anybody. He's gonna do this. So he's gonna merge

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Speaker 4: all three companies because he has to, and he needs

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Speaker 4: to because Tesla has forty four billion on the books

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Speaker 4: and they need the money. And every one of his

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Speaker 4: projects is well out into the future. So I'm not

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Speaker 4: going to tell you whether I think all these ideas

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Speaker 4: are going to work or not work.

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Speaker 3: I don't bet against Elon.

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Speaker 4: I think that's up for the future to determine, you know,

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Speaker 4: But all these businesses are incredibly capital intensive with very

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Speaker 4: very questionable profit margins or even viability, Like data centers

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Speaker 4: in space is not a viable business. Let's be real,

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Speaker 4: It's very expensive to build a data center on Earth.

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Speaker 4: Now imagine putting it up in space. Like this is

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Speaker 4: just we're getting into this level of absurdity. So that's

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Speaker 4: why I put it out there, like what happens next?

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Speaker 4: So I've got like eighteen projects that are incredibly capital intensive.

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Speaker 4: Will people just keep giving Elon Musk money forever? But

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Speaker 4: a lot of it's the same people who he's made

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Speaker 4: money for just giving him back the money they've made

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Speaker 4: for the next project. And so that's why I put

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Speaker 4: the dot dot dot. It's like, well, what happens when

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Speaker 4: this all comes together, because that's what's going to happen.

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Speaker 4: It's all going to come together as one, and then

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Speaker 4: what happens to that business looking forward? They'll have to

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Speaker 4: raise money. And so that's what this looks like in

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Speaker 4: my mind as we go out over the next twelve months.

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Speaker 2: As an investor. You have invested in shares of Tesla,

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Speaker 2: you buy and sell. You've done that, We've talked about

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Speaker 2: that a million times. You've owned you own Tesla Cars.

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Speaker 2: What is it for you that you need to own

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Speaker 2: X too? I own Xay, that's right, Okay, So I'm

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Speaker 2: just curious. So you obviously like what, you know a

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Speaker 2: lot of what Elon's doing. You know, what is it

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Speaker 2: that has to happen that makes you say I'm done?

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Speaker 4: No, I please don't say that I like what Elon's doing.

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Speaker 3: I actually abhor him.

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Speaker 4: Okay, He's doing horrendous things that I don't agree with

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Speaker 4: at all, and I want to make that very very clear.

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Speaker 4: On a personal level, I think his behavior is disgusting okay,

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Speaker 4: And I think his viewpoints are disgusting and he's destroyed

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Speaker 4: the brand. But he is one of the greatest engineers

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Speaker 4: of our time, and he's a great inventor and he

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Speaker 4: gets He's built a lot of amazing things. So I

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Speaker 4: don't discount that, and I'm invested in that. But that said,

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Speaker 4: you know, at some point this all has to come

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Speaker 4: together and actually work, and that's you know, you know,

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Speaker 4: the big question. So I don't bet against Elon, and

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Speaker 4: I am sort of betting for him, or I I

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Speaker 4: I Actually what I say is I bet with crazy

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Speaker 4: people sometimes and that's worked for me over my life.

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Speaker 4: And you know, so I have a certain path with him,

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Speaker 4: and I think he's crazy and maybe he pulls this

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Speaker 4: stuff off, you know.

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Speaker 2: Yeah, So you're willing to make the bet on Elon

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Speaker 2: still just got a bet, figu.

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Speaker 4: Well look at the other side of the coins. You

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Speaker 4: have Tim Cook at Apple. You won't do anything. This

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Speaker 4: guy is so risk adverse, he's scared to get in

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Speaker 4: the water, you know what I mean. And so like

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Speaker 4: Apple's just sitting on the cusp of the AI revolution,

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Speaker 4: like with binoculars, going.

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Speaker 3: Who do I pay next? Because I haven't done.

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Speaker 4: Anything, So you know you have Elon on one end

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Speaker 4: of the risk spectrum and you have Tim Ross.

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Speaker 2: We gotta go. Always love talking with you, Ross Gerber