1 00:00:00,040 --> 00:00:14,960 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live 2 00:00:15,040 --> 00:00:18,759 Speaker 1: from the heart of Silicon Valley with Ed Larrowe in 3 00:00:18,960 --> 00:00:19,800 Speaker 1: San Francisco. 4 00:00:22,600 --> 00:00:26,280 Speaker 2: This is Bloomberg Tech coming up. US equity markets drop 5 00:00:26,360 --> 00:00:31,319 Speaker 2: after TSMC's results, topping expectations, but also spending more to 6 00:00:31,400 --> 00:00:34,959 Speaker 2: meet AI related demand, including a bigger commitment to its 7 00:00:35,080 --> 00:00:38,640 Speaker 2: US buildout. US Peronic makes a three point two billion 8 00:00:38,680 --> 00:00:40,360 Speaker 2: dollar bet on Texas. 9 00:00:40,560 --> 00:00:41,880 Speaker 3: We speak with the CEO. 10 00:00:41,600 --> 00:00:46,080 Speaker 2: Of the autonomous Maritime drone company and Texas Governor Greg Abbott, 11 00:00:46,080 --> 00:00:50,920 Speaker 2: and later this hour Ryan Cohen, CEO of GameStop, joins 12 00:00:50,960 --> 00:00:54,000 Speaker 2: us to discuss the company's bid for eBay, the future 13 00:00:54,000 --> 00:00:58,240 Speaker 2: of gaming, and a lot more chip makers are weighing 14 00:00:58,440 --> 00:01:03,080 Speaker 2: on technology stock stop. Broadly, the concern is AI spending. 15 00:01:03,200 --> 00:01:07,360 Speaker 2: The catalyst tsmc quarterly results. They actually raised the sales, 16 00:01:07,400 --> 00:01:10,840 Speaker 2: outlooked beat across the board, and then said capital expenditures 17 00:01:11,080 --> 00:01:14,560 Speaker 2: would be higher not just this year, but for three 18 00:01:14,640 --> 00:01:18,399 Speaker 2: years now. The market's kind of recalculating and saying, are 19 00:01:18,440 --> 00:01:20,880 Speaker 2: we worried about how much higher spending is going to 20 00:01:20,920 --> 00:01:24,680 Speaker 2: get and how is it justifying current valuations? These are 21 00:01:24,680 --> 00:01:27,760 Speaker 2: what the markets look like right now. Underperformance in chip stocks. 22 00:01:27,959 --> 00:01:31,760 Speaker 2: For what it's worth, ces US listed shares, the ADRs, 23 00:01:32,080 --> 00:01:35,000 Speaker 2: they've kind of off session lows that we are markedly 24 00:01:35,120 --> 00:01:38,000 Speaker 2: no lower. That takes us to today's big number. Two 25 00:01:38,040 --> 00:01:42,000 Speaker 2: hundred and sixty five billion dollars. That's the total value 26 00:01:42,440 --> 00:01:46,200 Speaker 2: of TSMC's planned US investment after the chip maker added 27 00:01:46,280 --> 00:01:50,760 Speaker 2: another one hundred billion dollars for just four new semiconductive fabs. 28 00:01:50,800 --> 00:01:51,800 Speaker 3: Blimbo Senior tech. 29 00:01:51,720 --> 00:01:55,400 Speaker 2: Editor Mike Shepard has more one hundred billion dollars is 30 00:01:55,520 --> 00:01:58,040 Speaker 2: a lot more, but it's for just four fabs. That's 31 00:01:58,080 --> 00:02:02,080 Speaker 2: the reality of the economics of building out infrastructure. 32 00:02:02,520 --> 00:02:03,760 Speaker 3: What do we need to know about. 33 00:02:03,480 --> 00:02:06,880 Speaker 4: This, Well, this is a number that has been in 34 00:02:06,920 --> 00:02:11,320 Speaker 4: circulation since the beginning of the year when TSMC indicated 35 00:02:11,360 --> 00:02:13,960 Speaker 4: to the US that it would be building those four 36 00:02:14,040 --> 00:02:18,000 Speaker 4: additional plants, bringing the total plan for Arizona to ten 37 00:02:18,120 --> 00:02:22,679 Speaker 4: fabs plus two packaging plants over an indetermined amount of time. 38 00:02:22,760 --> 00:02:24,880 Speaker 5: It takes a long time to construct these. 39 00:02:24,680 --> 00:02:28,280 Speaker 4: Facilities, and really an even longer time to actually start 40 00:02:28,320 --> 00:02:32,359 Speaker 4: production and delivering. They began production at the four nanometer 41 00:02:32,560 --> 00:02:35,519 Speaker 4: process level back in twenty twenty four, and the three 42 00:02:35,600 --> 00:02:39,080 Speaker 4: nanometer process level at a second fab outside Phoenix is 43 00:02:39,120 --> 00:02:42,280 Speaker 4: only to be ready next year, So we are talking 44 00:02:42,320 --> 00:02:46,639 Speaker 4: at more geological terms in terms of time than something 45 00:02:46,680 --> 00:02:50,440 Speaker 4: immediate and around the corner. But it is a huge commitment, 46 00:02:50,480 --> 00:02:53,399 Speaker 4: and it was driven in part by the Trump administration's 47 00:02:53,480 --> 00:02:57,440 Speaker 4: pressure on Taiwan with tariffs. At the beginning of last year, 48 00:02:57,560 --> 00:03:01,400 Speaker 4: TSMC had pledged to increase a sixty five billion dollar 49 00:03:01,440 --> 00:03:04,960 Speaker 4: investment agreed to under President Joe Biden to one hundred 50 00:03:05,000 --> 00:03:07,919 Speaker 4: and sixty five billion dollars soon after Trump took office, 51 00:03:08,040 --> 00:03:11,160 Speaker 4: but that clearly wasn't enough, and we saw them step 52 00:03:11,200 --> 00:03:14,040 Speaker 4: forward with this commitment under the pressure of tariffs to 53 00:03:14,080 --> 00:03:15,680 Speaker 4: add another one hundred billion to it. 54 00:03:16,480 --> 00:03:18,600 Speaker 2: That's the I'm kind of interested in, Right, There's a 55 00:03:18,639 --> 00:03:22,720 Speaker 2: lot of focus on bigger numbers. Sometimes numbers get bigger 56 00:03:22,760 --> 00:03:26,040 Speaker 2: because the environment is more expensive, right inflation on the 57 00:03:26,080 --> 00:03:30,160 Speaker 2: labor construction materials side. Did TSMC tell us anything more 58 00:03:30,200 --> 00:03:32,799 Speaker 2: about why they their bullish on America? 59 00:03:34,240 --> 00:03:38,360 Speaker 4: Well, in part because if you look back at CEO C. 60 00:03:38,560 --> 00:03:41,760 Speaker 4: S Way's comments back in June, he is saying that 61 00:03:41,840 --> 00:03:44,280 Speaker 4: it will take years to meet all the demand for 62 00:03:44,520 --> 00:03:48,640 Speaker 4: chips that his company makes from US customers and that's really. 63 00:03:48,400 --> 00:03:49,440 Speaker 3: True across the board. 64 00:03:49,720 --> 00:03:52,520 Speaker 4: You also heard that in your conversations with the CEO 65 00:03:52,640 --> 00:03:55,720 Speaker 4: of s ke Heinez saying that, look, the memory shortage 66 00:03:55,800 --> 00:03:58,840 Speaker 4: is real and it will be here through twenty thirty. 67 00:03:58,880 --> 00:04:02,760 Speaker 4: And that is because of the precedented demand created. 68 00:04:02,320 --> 00:04:03,400 Speaker 5: By the AI boom. 69 00:04:03,640 --> 00:04:06,320 Speaker 4: There is so much need for chips and process to 70 00:04:06,480 --> 00:04:10,920 Speaker 4: go into all those AI data centers being built across 71 00:04:10,960 --> 00:04:12,640 Speaker 4: the US and elsewhere in the world. 72 00:04:12,840 --> 00:04:13,400 Speaker 6: And that's on. 73 00:04:13,400 --> 00:04:18,000 Speaker 4: Top of already existing demand for other consumer devices and products, 74 00:04:18,120 --> 00:04:21,200 Speaker 4: and all of those chips need to be made someplace. 75 00:04:21,440 --> 00:04:25,560 Speaker 4: TSMC is looking to diversify geographically out of Taiwan, where 76 00:04:25,600 --> 00:04:29,120 Speaker 4: it principally makes most of its products, and it wants 77 00:04:29,120 --> 00:04:30,800 Speaker 4: to put more of it here in the US. And 78 00:04:30,839 --> 00:04:34,039 Speaker 4: part is the hedge geopolitically, and part also because yes, 79 00:04:34,200 --> 00:04:36,839 Speaker 4: it does need to serve the US customer base more 80 00:04:37,040 --> 00:04:40,839 Speaker 4: and also recognize that the political pressure here in Washington 81 00:04:41,200 --> 00:04:44,000 Speaker 4: to expand and invest not only in Taiwan but other 82 00:04:44,040 --> 00:04:45,559 Speaker 4: major economies is very strong. 83 00:04:45,640 --> 00:04:48,800 Speaker 2: At Bloomberg's, Mike Shephard, thank you very much. Let's get 84 00:04:48,839 --> 00:04:51,960 Speaker 2: more on TSMC's results and bring in Tammy Chew, Behrenberg's 85 00:04:52,120 --> 00:04:55,440 Speaker 2: head of tech Equity Research TSMC hiked. 86 00:04:55,160 --> 00:04:57,960 Speaker 3: Its sales outlook but also boosted. 87 00:04:57,520 --> 00:05:00,720 Speaker 2: Its spending plans for you, Tammy, which was the more 88 00:05:00,720 --> 00:05:01,560 Speaker 2: important metric. 89 00:05:03,279 --> 00:05:07,120 Speaker 7: So from a semi equipment company perspective, in my view, 90 00:05:07,160 --> 00:05:10,960 Speaker 7: both are important because reason being is normally a good 91 00:05:11,000 --> 00:05:14,440 Speaker 7: idea to say. Semi equipment companies will benefit from the 92 00:05:14,440 --> 00:05:17,760 Speaker 7: strong capex of TSMC, where they raise already twice in 93 00:05:17,800 --> 00:05:20,640 Speaker 7: this year, but at the same time, we do want 94 00:05:20,680 --> 00:05:23,120 Speaker 7: to see that TSMC is doing well for their own 95 00:05:23,160 --> 00:05:26,560 Speaker 7: business to be able to support the higher capex spending 96 00:05:26,640 --> 00:05:30,919 Speaker 7: level for longer. TSMC called today that the AI industry 97 00:05:31,080 --> 00:05:34,400 Speaker 7: is new and demand will go all the way into 98 00:05:34,440 --> 00:05:37,440 Speaker 7: twenty twenty nine twenty thirty, which is a positive side 99 00:05:38,240 --> 00:05:40,159 Speaker 7: in my view for the semi equipment industry. 100 00:05:41,000 --> 00:05:43,480 Speaker 2: Tammy, we're going to get to ASML in just a moment, 101 00:05:43,520 --> 00:05:49,200 Speaker 2: pretty much the critical key chip equipment name. But the 102 00:05:49,800 --> 00:05:54,200 Speaker 2: reaction of US equity markets to TSMC saying not just 103 00:05:54,320 --> 00:05:57,000 Speaker 2: this year's spending will be higher, but over a number 104 00:05:57,040 --> 00:05:59,839 Speaker 2: of years, it's kind of raised the expectation for the 105 00:06:00,040 --> 00:06:03,880 Speaker 2: TEX environment overall in the near time socks it down 106 00:06:03,960 --> 00:06:06,640 Speaker 2: because of that. Why is that a negative in the first. 107 00:06:06,480 --> 00:06:12,320 Speaker 7: Instance, in our view, the semi equipment and also TSMC 108 00:06:12,400 --> 00:06:15,839 Speaker 7: share price has been down after that massive announcement despite 109 00:06:16,200 --> 00:06:20,000 Speaker 7: the revenue upgrade, et cetera, because of the all did 110 00:06:20,040 --> 00:06:24,760 Speaker 7: well over the past two months and the investor expectation 111 00:06:24,920 --> 00:06:28,440 Speaker 7: has been increasing dramatically. So in our view, it just 112 00:06:28,480 --> 00:06:31,160 Speaker 7: to take a brief and also at the same time, 113 00:06:31,680 --> 00:06:34,560 Speaker 7: the news flow from the memory sector has been a 114 00:06:34,560 --> 00:06:37,120 Speaker 7: bit volatile from a share price aspective, which is also 115 00:06:37,200 --> 00:06:41,120 Speaker 7: adding pressure to the very popular AI trade. So in 116 00:06:41,120 --> 00:06:44,400 Speaker 7: our view it would just be a short term profit 117 00:06:44,480 --> 00:06:46,880 Speaker 7: taking sort of anything fundamentally went wrong. 118 00:06:48,360 --> 00:06:50,760 Speaker 2: Let's go to ASML. We didn't have a show on 119 00:06:50,839 --> 00:06:53,280 Speaker 2: Tuesday and Wednesday of this week because of FED chair 120 00:06:53,440 --> 00:06:57,560 Speaker 2: WASH's testimony, but ASML also lifted its and your sales 121 00:06:57,600 --> 00:07:00,640 Speaker 2: forecast for the second time this year and said it 122 00:07:00,680 --> 00:07:03,120 Speaker 2: is going to expand its own capacity and how that 123 00:07:03,200 --> 00:07:06,120 Speaker 2: manifests is a greater number of units on the low 124 00:07:06,240 --> 00:07:09,600 Speaker 2: NA and high NA side. Just your your overall reaction 125 00:07:09,760 --> 00:07:11,200 Speaker 2: to what ASML said. 126 00:07:12,880 --> 00:07:18,040 Speaker 7: ASML's earning yesterday has been amazing in terms of how 127 00:07:18,080 --> 00:07:20,520 Speaker 7: they revised up the four year guidance for the second 128 00:07:20,520 --> 00:07:23,440 Speaker 7: time this year. As you suggested Besides the revenue, I 129 00:07:23,480 --> 00:07:26,559 Speaker 7: would point out ASML also revised up the grosso margin 130 00:07:26,640 --> 00:07:29,680 Speaker 7: expectation for this year from mid point fifty two percent 131 00:07:29,840 --> 00:07:33,920 Speaker 7: to midpoint fifty five percent, which all suggesting that ASML 132 00:07:34,040 --> 00:07:38,400 Speaker 7: is seeing incremental demand coming from their customers and customers 133 00:07:38,400 --> 00:07:42,600 Speaker 7: just need more capacity over time. So therefore, from my perspective, 134 00:07:42,640 --> 00:07:46,520 Speaker 7: I believe that ASML has been showing, based on their numbers, 135 00:07:46,880 --> 00:07:51,560 Speaker 7: that the whole AI investment capex expansion capacity addition is 136 00:07:51,600 --> 00:07:54,600 Speaker 7: not coming to an end at any time, and the 137 00:07:54,680 --> 00:07:58,640 Speaker 7: share price move of yesterday from ASML side is very 138 00:07:58,640 --> 00:08:01,480 Speaker 7: similar to the logic of TSA and see the share 139 00:08:01,520 --> 00:08:04,040 Speaker 7: process done really well over the past three months. Is 140 00:08:04,440 --> 00:08:07,960 Speaker 7: expectation has been high, so we are taking a little pause, 141 00:08:08,440 --> 00:08:11,640 Speaker 7: but we do believe that the result yesterday of ASML 142 00:08:11,680 --> 00:08:15,880 Speaker 7: has been very strong and showing the level of customer 143 00:08:15,920 --> 00:08:17,440 Speaker 7: spending is only going up. 144 00:08:19,800 --> 00:08:23,720 Speaker 2: ASML is in a position where there's essentially a backlog 145 00:08:23,840 --> 00:08:27,440 Speaker 2: right orders are queued up all the way to twenty 146 00:08:27,560 --> 00:08:31,120 Speaker 2: twenty eight. We've spent a lot of time recently on 147 00:08:31,160 --> 00:08:33,800 Speaker 2: the show thinking in the context of memoryships, about the 148 00:08:33,960 --> 00:08:37,400 Speaker 2: historic boom and bus cycles, the cyclical nature of those 149 00:08:37,800 --> 00:08:41,520 Speaker 2: how does ASML manage that on its critical machines across 150 00:08:41,600 --> 00:08:44,599 Speaker 2: logic and memory, right, you know, it has a backlog, 151 00:08:44,720 --> 00:08:47,440 Speaker 2: it wants to increase capacity, but in the end, what 152 00:08:47,480 --> 00:08:49,720 Speaker 2: happens if the demand tapers off or falls away. 153 00:08:51,720 --> 00:08:55,400 Speaker 7: So from ASML perspective, they are normally very very cautious 154 00:08:55,480 --> 00:08:58,439 Speaker 7: when they are adding capacity or committing to adding more 155 00:08:58,440 --> 00:09:02,000 Speaker 7: capacity because the equipment company want to drive on those 156 00:09:02,120 --> 00:09:05,440 Speaker 7: ANPTI capacity through the downturn as you suggest it. So 157 00:09:06,160 --> 00:09:09,560 Speaker 7: we believe that ASML has been talking with customers on 158 00:09:09,600 --> 00:09:13,120 Speaker 7: the very frequent basis to understand what's the real demand 159 00:09:13,160 --> 00:09:15,880 Speaker 7: of the customers and try to understand what's it and 160 00:09:16,000 --> 00:09:19,400 Speaker 7: market driver for those before they build capacity. And of 161 00:09:19,440 --> 00:09:22,320 Speaker 7: course they have to balance the demand from both logic 162 00:09:22,400 --> 00:09:26,079 Speaker 7: and memory customers. And we do believe that at this 163 00:09:26,120 --> 00:09:29,160 Speaker 7: point of time they are treating both of the sector 164 00:09:29,600 --> 00:09:33,559 Speaker 7: as super growthy part of the cycle. Therefore they have 165 00:09:33,640 --> 00:09:35,440 Speaker 7: been building for both of them instead of, you know, 166 00:09:35,480 --> 00:09:37,120 Speaker 7: try to select which customer. 167 00:09:36,760 --> 00:09:37,720 Speaker 6: They want to serve first. 168 00:09:38,160 --> 00:09:42,120 Speaker 7: We are in the environment that every component in this 169 00:09:42,240 --> 00:09:45,320 Speaker 7: AI supply chain is under shortage, so therefore we believe 170 00:09:45,360 --> 00:09:48,360 Speaker 7: that ASML has been speaking to customer understand the real 171 00:09:48,520 --> 00:09:51,760 Speaker 7: enquirement and building for both of the sectors in order 172 00:09:51,760 --> 00:09:55,120 Speaker 7: to fulfill more incremental demand in the coming years. 173 00:09:56,240 --> 00:10:02,440 Speaker 2: We were just showing ASML's top customers unsurprised TSMC, Samsung Intel, 174 00:10:02,800 --> 00:10:04,560 Speaker 2: but I was looking at the two q net system 175 00:10:04,600 --> 00:10:07,720 Speaker 2: sales by region as well. Right, most of this equipment 176 00:10:07,800 --> 00:10:11,480 Speaker 2: is going to South Korea, then Taiwan thirty percent of Taiwan, 177 00:10:11,520 --> 00:10:13,640 Speaker 2: but only nine percent to the US. 178 00:10:13,880 --> 00:10:15,600 Speaker 3: We started this show talking. 179 00:10:15,280 --> 00:10:19,720 Speaker 2: About TSMC's increased commitment to the United States. Do you 180 00:10:19,800 --> 00:10:23,440 Speaker 2: expect over time more ASML equipment to come here to America? 181 00:10:24,880 --> 00:10:28,600 Speaker 7: Yes, because they're regional cells. On a quarterly basis can 182 00:10:28,640 --> 00:10:32,400 Speaker 7: be lumpy depending on which customer will receive more shipment 183 00:10:32,440 --> 00:10:36,000 Speaker 7: in this year. With Samsung further expanding their fabs in 184 00:10:36,040 --> 00:10:39,240 Speaker 7: the US, with TSMC expanding further in the US with 185 00:10:39,360 --> 00:10:43,680 Speaker 7: incremental commitment, we do believe that US sales will increase 186 00:10:43,720 --> 00:10:46,800 Speaker 7: on the quarterly basis going forward, but the pattern can 187 00:10:46,840 --> 00:10:50,440 Speaker 7: be lumpy, which doesn't really suggest that TSMC or other 188 00:10:50,480 --> 00:10:52,880 Speaker 7: players is causing their investment in the US. Is just 189 00:10:53,000 --> 00:10:57,079 Speaker 7: lumpiness of the factor of the equipment. Given that SMOs 190 00:10:57,120 --> 00:11:00,800 Speaker 7: equipment is sold for more than two hundred million per equipment, 191 00:11:01,080 --> 00:11:04,880 Speaker 7: So therefore, who receives what really moved the quarterly. 192 00:11:04,480 --> 00:11:08,719 Speaker 2: Trand Temy Chu, Berenberg's head of Tech research. Great to 193 00:11:08,760 --> 00:11:11,240 Speaker 2: have you back on Bloomberg Tech, Thank you very much. 194 00:11:11,720 --> 00:11:15,080 Speaker 2: As the AI world gears up for a big earning season, 195 00:11:15,080 --> 00:11:18,480 Speaker 2: one of the industry's key figures was spotted enjoying pork 196 00:11:18,559 --> 00:11:21,960 Speaker 2: skewers in Tokyo, and video CEO Jensen Wong enjoyed the 197 00:11:21,960 --> 00:11:26,680 Speaker 2: finger food alongside Japanese suppliers to court their support for 198 00:11:26,720 --> 00:11:30,120 Speaker 2: the AI supply chain. Those present included executives of companies 199 00:11:30,120 --> 00:11:34,120 Speaker 2: like Yorksha and Tokyo Electron, both of which supply essential 200 00:11:34,200 --> 00:11:37,920 Speaker 2: components from videos AI systems. Not only that, Japan is 201 00:11:37,960 --> 00:11:42,000 Speaker 2: planning to purchase twenty seven thousand, five hundred next generation 202 00:11:42,160 --> 00:11:46,360 Speaker 2: Reuben chips to build an AI for robots. 203 00:11:46,080 --> 00:11:46,840 Speaker 3: Okay coming up. 204 00:11:46,920 --> 00:11:50,760 Speaker 2: Saronic makes a three point two billion dollar bet on Texas. 205 00:11:50,960 --> 00:11:54,960 Speaker 2: We speak with Dino Mavrukas, Seronic CEO and Texas Governor 206 00:11:55,200 --> 00:11:56,040 Speaker 2: Greg Abbott. 207 00:11:56,480 --> 00:11:57,520 Speaker 3: This is Woomberg Tech. 208 00:12:11,640 --> 00:12:15,920 Speaker 2: Texas is quickly becoming the epicenter of America's next industrial 209 00:12:15,960 --> 00:12:21,040 Speaker 2: buildout from AI data centers and semiconductor fabs to defense technology. Now, 210 00:12:21,400 --> 00:12:24,720 Speaker 2: autonomous shipbuilder Saronic is making its own major bet on 211 00:12:24,760 --> 00:12:27,560 Speaker 2: the state. The company's announced a three point two billion 212 00:12:27,600 --> 00:12:31,200 Speaker 2: dollar investment building a next gen shipyard at the Port 213 00:12:31,200 --> 00:12:35,679 Speaker 2: of Brownsville, manufacturing medium to large class autonomous surface vessels. 214 00:12:35,960 --> 00:12:39,319 Speaker 2: Joining US now for an exclusive conversation are Seronic CEO 215 00:12:39,559 --> 00:12:43,240 Speaker 2: Dino Mavrucas and Texas Governor Greg Abbott, alongside our Bloomberg 216 00:12:43,280 --> 00:12:46,559 Speaker 2: Texas Bureau Chief Julie Fine. Governor Abbott, Good morning to 217 00:12:46,600 --> 00:12:50,320 Speaker 2: you from San Francisco. If we could, I'd like to 218 00:12:50,360 --> 00:12:53,320 Speaker 2: start with a sort of operational update please on the 219 00:12:53,360 --> 00:12:55,680 Speaker 2: flooding situation in your state. I know it's something that 220 00:12:55,720 --> 00:12:56,880 Speaker 2: you want to communicate on. 221 00:12:58,080 --> 00:12:59,840 Speaker 5: Sure listen. Well, thank you for offering that. 222 00:13:01,360 --> 00:13:04,760 Speaker 8: We've been following all day, yesterday, all last night and today. 223 00:13:05,240 --> 00:13:08,400 Speaker 8: The massive flooding going on in central and South Texas. 224 00:13:08,920 --> 00:13:12,200 Speaker 8: It's the same area where we had the massive Fourth 225 00:13:12,280 --> 00:13:13,880 Speaker 8: of July flooding last year. 226 00:13:14,120 --> 00:13:15,880 Speaker 5: The difference this year is we're actually. 227 00:13:15,640 --> 00:13:18,839 Speaker 8: Getting more rain over the past twenty hours and over 228 00:13:18,880 --> 00:13:21,320 Speaker 8: the next twenty four hours than we got last year. 229 00:13:22,640 --> 00:13:26,920 Speaker 8: Overnight there was one life lost. We are continuing to 230 00:13:26,920 --> 00:13:31,520 Speaker 8: servee resources. We've made almost eighty rescues already. I we'll 231 00:13:31,559 --> 00:13:34,960 Speaker 8: be leaving here after this interview to go focus on 232 00:13:35,160 --> 00:13:40,080 Speaker 8: our current response in regions ranging from the Curveville area 233 00:13:40,240 --> 00:13:42,640 Speaker 8: all the way down to Uvalde to Del Rio to 234 00:13:42,800 --> 00:13:46,280 Speaker 8: Laredo where we expect continue flooding. I just want to 235 00:13:46,320 --> 00:13:49,360 Speaker 8: make sure that all Texans know that we have more 236 00:13:49,400 --> 00:13:53,839 Speaker 8: than one three hundred Texas personnel, the National Guard, Texas 237 00:13:53,880 --> 00:13:58,160 Speaker 8: Department of Public Safety. We have all resources, boats, helicopters 238 00:13:58,200 --> 00:14:01,120 Speaker 8: available to make sure we will be doing everything possible 239 00:14:01,320 --> 00:14:02,839 Speaker 8: to save human life. 240 00:14:03,720 --> 00:14:06,200 Speaker 9: Governor Abbott, I just want to follow on that briefly, 241 00:14:06,280 --> 00:14:09,439 Speaker 9: as you remember just a horrible time last year when 242 00:14:09,440 --> 00:14:12,720 Speaker 9: there was that flooding in the same area. Your advice 243 00:14:12,880 --> 00:14:17,160 Speaker 9: to anybody in the area that sees this water that 244 00:14:17,320 --> 00:14:19,960 Speaker 9: is concerned, what should they do and where should they go? 245 00:14:20,840 --> 00:14:23,560 Speaker 8: So great, great question, and you all are one of 246 00:14:23,600 --> 00:14:26,160 Speaker 8: the best communicators to the general public that we can 247 00:14:26,240 --> 00:14:28,640 Speaker 8: have out there with the news media sharing this what 248 00:14:28,720 --> 00:14:31,360 Speaker 8: I'm about to tell you, and that is there are 249 00:14:31,520 --> 00:14:35,200 Speaker 8: rapidly rising rivers that will continue to rise through the 250 00:14:35,240 --> 00:14:36,800 Speaker 8: remainder of today and tomorrow. 251 00:14:37,920 --> 00:14:40,880 Speaker 5: If you do not need to be out, don't go out. 252 00:14:41,400 --> 00:14:45,480 Speaker 8: We have one leading reason why people may lose their 253 00:14:45,520 --> 00:14:47,960 Speaker 8: life and the rising waters like this is because people 254 00:14:48,080 --> 00:14:53,720 Speaker 8: drive into waterways and get swept away. There's an old saying, turnaround, 255 00:14:53,760 --> 00:14:58,480 Speaker 8: don't drown, and that applies here. Second, because rivers are 256 00:14:58,560 --> 00:15:02,040 Speaker 8: rising so rapidly, if you're near a river, try to 257 00:15:02,080 --> 00:15:04,080 Speaker 8: get away from that river so you can protect your 258 00:15:04,120 --> 00:15:06,880 Speaker 8: own life. Each individual in the state of Texas has 259 00:15:06,880 --> 00:15:09,840 Speaker 8: the full capability of protecting and saving their own life 260 00:15:09,920 --> 00:15:12,680 Speaker 8: right now by staying away from the rising rivers and 261 00:15:12,800 --> 00:15:13,800 Speaker 8: not driving into it. 262 00:15:15,160 --> 00:15:17,240 Speaker 2: Governor Abbit, thank you very much for that. It's a 263 00:15:17,240 --> 00:15:23,120 Speaker 2: REMINDERU Splionbo Tech Audience. Saronic, a defense tech startup focused 264 00:15:23,160 --> 00:15:27,360 Speaker 2: on autonomous maritime drones, investing three point two billion dollars 265 00:15:27,600 --> 00:15:30,000 Speaker 2: in the state of Texas a facility at the. 266 00:15:29,920 --> 00:15:30,840 Speaker 3: Port of Brownsville. 267 00:15:31,040 --> 00:15:35,800 Speaker 2: Dina Mavrucus Seronic, CEO, Welcome back to Bloomberg Tech. The 268 00:15:35,880 --> 00:15:38,760 Speaker 2: question we get most often is often the simple one, 269 00:15:38,960 --> 00:15:39,840 Speaker 2: why Texas? 270 00:15:39,880 --> 00:15:42,480 Speaker 3: What did Texas do to win your business? 271 00:15:44,640 --> 00:15:46,760 Speaker 10: Before I even talk about that, I just want to 272 00:15:46,800 --> 00:15:49,840 Speaker 10: say our thoughts and prayers go out to everybody involved 273 00:15:50,000 --> 00:15:53,040 Speaker 10: in the flooding SARONI keeps that very very front of 274 00:15:53,080 --> 00:15:56,280 Speaker 10: mine and we're very proud to call Texas home and 275 00:15:56,400 --> 00:15:58,880 Speaker 10: invest in the community here. So Governor, if there's anything 276 00:15:58,920 --> 00:16:01,480 Speaker 10: that we can do to support, please let us know. Sure, 277 00:16:01,720 --> 00:16:04,480 Speaker 10: thank you, Texas. Texas is a great state. I mean 278 00:16:04,560 --> 00:16:08,160 Speaker 10: the leadership and the partners with the governor. We're building 279 00:16:08,160 --> 00:16:10,360 Speaker 10: a next generation shipyard. We're going to go and build 280 00:16:10,400 --> 00:16:13,960 Speaker 10: the most advanced, most efficient, highest throughput shipyard, not only 281 00:16:14,000 --> 00:16:16,760 Speaker 10: in the country, but in the world. So when when 282 00:16:16,800 --> 00:16:20,280 Speaker 10: you're doing that, you're looking for land availability, you're looking 283 00:16:20,280 --> 00:16:22,840 Speaker 10: for deep water access. Those things are kind of binary. 284 00:16:22,840 --> 00:16:26,320 Speaker 10: You either have them or you don't. What really tipped 285 00:16:26,320 --> 00:16:30,320 Speaker 10: the scales was the workforce, the people down in Brownsville 286 00:16:30,320 --> 00:16:32,840 Speaker 10: that we're going to build this company in this project 287 00:16:32,960 --> 00:16:36,680 Speaker 10: around and then the partnership with the state and local government. 288 00:16:37,000 --> 00:16:40,560 Speaker 10: It's the governor's leadership and support, the partnership with the state, 289 00:16:40,960 --> 00:16:43,480 Speaker 10: Cameron County, and the city and the Port of Brownsville 290 00:16:43,560 --> 00:16:46,560 Speaker 10: that helped bring this generational project to life. 291 00:16:48,000 --> 00:16:51,160 Speaker 2: Do you know Brownsville close proximity to SpaceX, So that 292 00:16:51,280 --> 00:16:56,240 Speaker 2: was interesting that the workforce was the tipping point. How 293 00:16:56,280 --> 00:16:59,600 Speaker 2: competitive is it in your industry right now in hiring 294 00:16:59,640 --> 00:17:02,720 Speaker 2: the best people across lots of different disciplines. 295 00:17:04,880 --> 00:17:07,320 Speaker 10: I think what you're seeing it's actually more collaborative than 296 00:17:07,320 --> 00:17:11,320 Speaker 10: it's competitive. You're building up industry, you're building up infrastructure, 297 00:17:11,359 --> 00:17:12,960 Speaker 10: You're investing in the community. 298 00:17:13,240 --> 00:17:14,480 Speaker 6: When you look at. 299 00:17:14,359 --> 00:17:16,399 Speaker 10: What we're going to do in Brownsville, we're going to 300 00:17:16,440 --> 00:17:20,040 Speaker 10: invest billions of dollars, not just into infrastructure, but into 301 00:17:20,160 --> 00:17:23,680 Speaker 10: the local region. We're going to create ten thousand jobs, 302 00:17:23,960 --> 00:17:26,199 Speaker 10: and we're going to create one hundred and sixty billion 303 00:17:26,240 --> 00:17:29,000 Speaker 10: dollars of economic impact in the region. And that's just 304 00:17:29,119 --> 00:17:32,800 Speaker 10: over the next ten years. Right With companies like SpaceX 305 00:17:32,840 --> 00:17:36,879 Speaker 10: and others doing that, it creates an entire ecosystem, not 306 00:17:36,960 --> 00:17:38,840 Speaker 10: only in that part of the state, but in the 307 00:17:39,000 --> 00:17:39,600 Speaker 10: entire state. 308 00:17:41,440 --> 00:17:44,720 Speaker 9: Governor Abbitt, we just heard Dino talk about the workforce. 309 00:17:44,760 --> 00:17:44,960 Speaker 3: Again. 310 00:17:45,000 --> 00:17:47,359 Speaker 9: That's ten thousand jobs. So I'd like to hear about 311 00:17:47,359 --> 00:17:50,399 Speaker 9: the plans on how you plan to develop that workforce 312 00:17:50,440 --> 00:17:52,600 Speaker 9: to make sure there are enough people available. 313 00:17:54,160 --> 00:17:56,520 Speaker 8: I'll tell you this that is Texas ranks number one 314 00:17:56,520 --> 00:17:59,240 Speaker 8: of the United States for having the best workforce. Texas 315 00:17:59,320 --> 00:18:01,680 Speaker 8: ranks number one for adding more new jobs than any 316 00:18:01,720 --> 00:18:04,000 Speaker 8: of the state and there's reasons for that, and that 317 00:18:04,080 --> 00:18:07,359 Speaker 8: is because we work more than state to make sure 318 00:18:07,359 --> 00:18:10,960 Speaker 8: we have the best trained and qualified workforce. We have 319 00:18:11,000 --> 00:18:14,720 Speaker 8: these massive education programs across the state. One is through 320 00:18:14,720 --> 00:18:18,680 Speaker 8: the Texas State Technical College, two is through our two 321 00:18:18,720 --> 00:18:21,800 Speaker 8: year colleges, but three is through our universities, and we 322 00:18:22,200 --> 00:18:26,560 Speaker 8: focus our education in Texas on real life job skills 323 00:18:26,880 --> 00:18:30,440 Speaker 8: that will ensure that when a student graduates or completes 324 00:18:30,480 --> 00:18:32,359 Speaker 8: the course study there, they're going to be ready to 325 00:18:32,400 --> 00:18:35,080 Speaker 8: go straight into the workforce. And we talk to Dinner, 326 00:18:35,280 --> 00:18:38,359 Speaker 8: We talked to Saronic about what our capabilities are to 327 00:18:38,400 --> 00:18:41,520 Speaker 8: make sure that we would be able to develop the 328 00:18:41,560 --> 00:18:45,080 Speaker 8: workforce they need. That's exactly what Elon Musk found with 329 00:18:45,119 --> 00:18:48,240 Speaker 8: Regardless SpaceX is what other companies that are coming into 330 00:18:48,240 --> 00:18:50,840 Speaker 8: the state of Texas are realizing. I talk to these 331 00:18:50,880 --> 00:18:53,960 Speaker 8: CEOs all the time they're coming to the state of Texas, 332 00:18:54,119 --> 00:18:57,040 Speaker 8: and they tell me the leading reason where they're coming 333 00:18:57,080 --> 00:19:00,159 Speaker 8: to the state is because we do have that pipeline 334 00:19:00,280 --> 00:19:02,960 Speaker 8: of well trained workforce and we will be able to 335 00:19:03,000 --> 00:19:05,399 Speaker 8: deliver it for Saronic, just like we have been for 336 00:19:05,560 --> 00:19:08,800 Speaker 8: all these other companies. Where Texas now is home to 337 00:19:08,880 --> 00:19:11,560 Speaker 8: more fortune five hundred company headquarters than any other state 338 00:19:12,000 --> 00:19:15,160 Speaker 8: because in part of the workforce and supply that. 339 00:19:15,160 --> 00:19:19,160 Speaker 9: We have, Governor Abbott, when you look down the road 340 00:19:19,280 --> 00:19:21,800 Speaker 9: five years, what does the Rio Grand Valley look like 341 00:19:21,920 --> 00:19:22,720 Speaker 9: with this edition? 342 00:19:24,440 --> 00:19:27,919 Speaker 8: So it has changed dramatically. You're familiar with it. Maybe 343 00:19:28,000 --> 00:19:30,800 Speaker 8: many Americans watching the show may not be familiar with it. 344 00:19:30,880 --> 00:19:32,880 Speaker 5: But listen, the real Grand. 345 00:19:32,720 --> 00:19:37,000 Speaker 8: Valley has historically been an agricultural region and things like that. 346 00:19:37,080 --> 00:19:39,639 Speaker 8: But when you look at some changes taking place, you know, 347 00:19:39,680 --> 00:19:43,119 Speaker 8: you mentioned one obviously with Starbase down there in Cameron County, 348 00:19:43,119 --> 00:19:46,159 Speaker 8: which is near the Brownsville area. With Saronic, which is 349 00:19:46,200 --> 00:19:50,840 Speaker 8: going to be near the Brownsville area, is a massive 350 00:19:50,880 --> 00:19:55,199 Speaker 8: explosion of economic activity. And because of that kind of 351 00:19:55,200 --> 00:19:56,920 Speaker 8: going back to the education component, what. 352 00:19:57,240 --> 00:19:58,720 Speaker 5: Our universities are doing. 353 00:19:58,960 --> 00:20:03,120 Speaker 8: Our universities are establishing campuses and expanding campuses in those 354 00:20:03,160 --> 00:20:04,880 Speaker 8: regions to make sure that we. 355 00:20:04,880 --> 00:20:05,920 Speaker 5: Will be educating soon. 356 00:20:06,000 --> 00:20:07,640 Speaker 8: It's not just to be able to go to work 357 00:20:07,640 --> 00:20:10,840 Speaker 8: for Saronic, but also to fill the other education needs 358 00:20:10,840 --> 00:20:14,560 Speaker 8: in the entire area. But going back now, the Cameron 359 00:20:14,600 --> 00:20:17,080 Speaker 8: County area where this project is going to be located, 360 00:20:17,560 --> 00:20:20,840 Speaker 8: is going to be one of the fastest growing regions 361 00:20:21,040 --> 00:20:25,280 Speaker 8: in the entire state. So we're building out transportation facilities 362 00:20:25,400 --> 00:20:27,680 Speaker 8: of the facilities to make sure this is going to. 363 00:20:27,640 --> 00:20:29,160 Speaker 5: Be a thriving community. 364 00:20:29,400 --> 00:20:33,200 Speaker 8: But it also shows how Texas is the most diversified 365 00:20:33,240 --> 00:20:36,520 Speaker 8: economy in the United States, not just with regard to 366 00:20:36,760 --> 00:20:41,080 Speaker 8: different business sectors, but geographically in the state. Obviously we 367 00:20:41,119 --> 00:20:44,520 Speaker 8: had the booming Dallas and Austin and Houston areas, but 368 00:20:44,560 --> 00:20:47,560 Speaker 8: now we have the booming Real Grand area and so 369 00:20:47,680 --> 00:20:50,760 Speaker 8: our state is absolutely booming. We cannot be more proud 370 00:20:50,760 --> 00:20:53,360 Speaker 8: to have Saronic down there and the jobs are providing. 371 00:20:53,560 --> 00:20:55,080 Speaker 5: So get this real quick number. 372 00:20:56,080 --> 00:20:58,480 Speaker 8: Over the course of the coming years, the Soroonica is 373 00:20:58,480 --> 00:21:00,800 Speaker 8: going to be adding more than are up to at 374 00:21:00,840 --> 00:21:04,560 Speaker 8: least ten thousand new jobs at seventy five thousand dollars 375 00:21:05,080 --> 00:21:07,639 Speaker 8: per job. At least when you put it all together, 376 00:21:08,000 --> 00:21:11,800 Speaker 8: they're going to be injecting seven hundred and fifty million 377 00:21:11,880 --> 00:21:14,280 Speaker 8: dollars in paychecks for our fellow Texans. 378 00:21:14,440 --> 00:21:16,879 Speaker 5: That's going to make a massive difference in our state. 379 00:21:18,119 --> 00:21:21,879 Speaker 2: Do you know we're going to put up you know, 380 00:21:22,119 --> 00:21:24,119 Speaker 2: let me just jump in because there's another big moment 381 00:21:24,160 --> 00:21:28,159 Speaker 2: this week for you sentcom sharing this video the first 382 00:21:28,200 --> 00:21:31,200 Speaker 2: combat use of autonomous surface vessels by the US military. 383 00:21:31,280 --> 00:21:35,480 Speaker 2: Your technology, What was the biggest lesson from that operation? 384 00:21:37,359 --> 00:21:40,640 Speaker 10: I mean, it's it's delivering the capabilities to our war fighters. 385 00:21:40,680 --> 00:21:41,640 Speaker 5: It's beaten scale. 386 00:21:41,760 --> 00:21:44,880 Speaker 10: That's what Taronic has been based around since the day 387 00:21:44,920 --> 00:21:47,919 Speaker 10: we founded the company. We looked around and we said, 388 00:21:47,960 --> 00:21:51,240 Speaker 10: what is the capability that our navy is missing, right, 389 00:21:51,280 --> 00:21:53,600 Speaker 10: and how do we build that fast and get that 390 00:21:53,680 --> 00:21:56,960 Speaker 10: to our war fighters to deliver real combat power. 391 00:21:57,160 --> 00:21:58,680 Speaker 5: And that's actually actually exactly what. 392 00:21:58,560 --> 00:22:01,960 Speaker 10: We're doing in Brownsville is well, there's a shipbuilding crisis 393 00:22:02,000 --> 00:22:04,879 Speaker 10: in this country right now. China build this two hundred 394 00:22:04,920 --> 00:22:08,600 Speaker 10: and thirty to one. Our naval fleet is actually shrinking. 395 00:22:08,680 --> 00:22:12,800 Speaker 10: We have zero point one percent of global shipbuilding capacity. 396 00:22:13,119 --> 00:22:17,240 Speaker 10: Port Alpha is going to turn all of that around. 397 00:22:17,320 --> 00:22:22,160 Speaker 10: On day one our initial our initial phase of the project, 398 00:22:22,400 --> 00:22:25,080 Speaker 10: this will be the largest shipyard in the country. We 399 00:22:25,119 --> 00:22:27,879 Speaker 10: will have one hundred and fifty thousand gross tons of 400 00:22:27,920 --> 00:22:31,320 Speaker 10: shipbuilding capacity, which means we will one point five x 401 00:22:31,359 --> 00:22:34,439 Speaker 10: the commercial shipbuilding capacity in the United States. 402 00:22:34,680 --> 00:22:35,800 Speaker 6: And that's just phase one. 403 00:22:36,560 --> 00:22:37,840 Speaker 10: We're going to take that all the way up to 404 00:22:37,880 --> 00:22:41,359 Speaker 10: two million gross tons of capacity twenty xing the current 405 00:22:41,359 --> 00:22:44,800 Speaker 10: capacity in this country, and that's what we need. And 406 00:22:44,840 --> 00:22:47,359 Speaker 10: in Brownsville, what you're going to see is the development 407 00:22:47,960 --> 00:22:50,080 Speaker 10: with SpaceX already being there. It's just going to become 408 00:22:50,080 --> 00:22:52,840 Speaker 10: a critical core door, not just for business and commerce, 409 00:22:53,119 --> 00:22:54,760 Speaker 10: but for national security. 410 00:22:55,720 --> 00:22:58,040 Speaker 2: Do you know we just have about sixty seconds left 411 00:22:58,040 --> 00:23:01,359 Speaker 2: in the program. You said this is phase one, would 412 00:23:01,359 --> 00:23:03,159 Speaker 2: you just give us a look into the future in 413 00:23:03,240 --> 00:23:03,800 Speaker 2: phase two? 414 00:23:05,320 --> 00:23:06,240 Speaker 5: Absolutely so. 415 00:23:06,680 --> 00:23:09,359 Speaker 10: Basing the initial phase of the project on eight hundred 416 00:23:09,359 --> 00:23:13,399 Speaker 10: and thirty five acres, we talked about massive land of availability. 417 00:23:13,440 --> 00:23:16,480 Speaker 10: We have the ability to expand up to and over 418 00:23:16,680 --> 00:23:20,800 Speaker 10: four thousand acres. We're going to continue to invest, continue 419 00:23:20,840 --> 00:23:23,480 Speaker 10: to build out infrastructure, and keep in mind we are 420 00:23:23,520 --> 00:23:26,919 Speaker 10: building a brand new shipyard. This is built from the 421 00:23:26,960 --> 00:23:29,119 Speaker 10: ground up to be the most advanced, to be the 422 00:23:29,160 --> 00:23:34,000 Speaker 10: most efficient, but most importantly, add net new capacity, brand 423 00:23:34,040 --> 00:23:37,280 Speaker 10: new shipbuilding capabilities to this country in a way that 424 00:23:37,359 --> 00:23:39,000 Speaker 10: we haven't seen since World War Two. 425 00:23:40,920 --> 00:23:45,080 Speaker 2: Texas Governor Greg Abbott, Seronic CEO Dina Mavrucas. Of course, 426 00:23:45,119 --> 00:23:48,240 Speaker 2: our Texas Bureau Chief Julie Fine, really appreciate all of 427 00:23:48,280 --> 00:23:51,160 Speaker 2: your time this morning. Again, Saronic, A three point two 428 00:23:51,200 --> 00:23:52,840 Speaker 2: billion dollar commitment. 429 00:23:52,920 --> 00:23:54,040 Speaker 3: To South Texas. 430 00:23:54,600 --> 00:23:58,600 Speaker 2: Coming up here on Bloomberg Tech, Ryan Cohen, the GameStop CEO, 431 00:23:58,800 --> 00:24:03,760 Speaker 2: joins us to discuss his and game Stops bid for eBay. 432 00:24:04,000 --> 00:24:06,080 Speaker 2: We're going to talk about the future of gaming. We're 433 00:24:06,080 --> 00:24:08,280 Speaker 2: going to talk about the future of a lot of things. 434 00:24:09,200 --> 00:24:11,640 Speaker 2: This is what markets look like right now. We are 435 00:24:11,720 --> 00:24:15,639 Speaker 2: down and it is chip stock semiconductors really weighing on 436 00:24:15,680 --> 00:24:20,960 Speaker 2: the technology sector. TSMC, the world's biggest chip manufacturer, raised 437 00:24:21,000 --> 00:24:23,480 Speaker 2: its sales outlook. It beat across the board, but it 438 00:24:23,560 --> 00:24:26,680 Speaker 2: also said spending will be higher, not just this year 439 00:24:27,240 --> 00:24:29,840 Speaker 2: by the eight billion dollars, but in aggregate over a 440 00:24:29,920 --> 00:24:32,720 Speaker 2: number of years. So the market's taking that commentary on 441 00:24:32,760 --> 00:24:35,720 Speaker 2: the highest spending environment and is now a little worried 442 00:24:35,760 --> 00:24:39,760 Speaker 2: about it. The highest spending does it justify the valuations 443 00:24:39,800 --> 00:24:42,880 Speaker 2: of some of these companies. We're halfway through the program. 444 00:24:42,920 --> 00:24:46,119 Speaker 2: We have a very big conversation coming up next. Do 445 00:24:46,240 --> 00:24:49,359 Speaker 2: not go far from San Francisco. This is Bloomberg Tech. 446 00:24:59,440 --> 00:25:02,920 Speaker 2: Welcome back Bloomberg Tech. Chip stocks are dragging the market lower. 447 00:25:02,960 --> 00:25:07,320 Speaker 2: TSMC's US listed shares are off session lows, but lower 448 00:25:07,359 --> 00:25:10,680 Speaker 2: the world's biggest contract manufacturer for chips raised its sales 449 00:25:10,760 --> 00:25:13,600 Speaker 2: outlook beat across the board, but said spending this year 450 00:25:13,960 --> 00:25:16,440 Speaker 2: and over the next few years will be higher. So 451 00:25:16,520 --> 00:25:18,520 Speaker 2: now the market's like looking at that and saying, okay, 452 00:25:19,520 --> 00:25:24,160 Speaker 2: even higher spending expectations across AI. How does that relate 453 00:25:24,200 --> 00:25:26,280 Speaker 2: to valuations right now? That's kind of the story. We 454 00:25:26,320 --> 00:25:30,280 Speaker 2: also have a deal confirmation. Uber has agreed to buy 455 00:25:30,320 --> 00:25:33,760 Speaker 2: Delivery Hero forteen point eight billion US dollars in euro 456 00:25:33,960 --> 00:25:35,760 Speaker 2: terms forty one euros. 457 00:25:35,400 --> 00:25:36,359 Speaker 3: Fifty cents a share. 458 00:25:36,800 --> 00:25:40,200 Speaker 2: It gets Uber into fifty markets outside of the United 459 00:25:40,240 --> 00:25:43,000 Speaker 2: States that's not in private equity, is taking a role 460 00:25:43,080 --> 00:25:46,520 Speaker 2: and buying Delivery Hero's business in some markets that Uber 461 00:25:46,560 --> 00:25:48,840 Speaker 2: is not taking on one of the most read stories 462 00:25:48,840 --> 00:25:51,280 Speaker 2: on Bloomberg this morning, But it's a pat show, so 463 00:25:51,320 --> 00:25:53,840 Speaker 2: I wanted to bring you just the basic details. 464 00:25:54,800 --> 00:25:55,600 Speaker 3: Here's the big one. 465 00:25:55,800 --> 00:25:59,480 Speaker 2: One of the biggest potential deals in technology is game 466 00:25:59,560 --> 00:26:03,480 Speaker 2: stops attempt to buy eBay. In May, the video game 467 00:26:03,520 --> 00:26:07,840 Speaker 2: retailer and it's CEO Ryan Cohen, launched an unsolicited fifty 468 00:26:07,920 --> 00:26:11,000 Speaker 2: six billion dollar bid for the e commerce platform. eBay 469 00:26:11,040 --> 00:26:15,080 Speaker 2: rejected the offer, calling it neither credible nor attractive. Since then, 470 00:26:15,600 --> 00:26:18,920 Speaker 2: Cohen has scrapped a controversial multi billion dollar pay package, 471 00:26:19,359 --> 00:26:23,920 Speaker 2: and GameStop shareholders have approved increasing the company's authorized sharecount, 472 00:26:24,000 --> 00:26:28,400 Speaker 2: giving it more flexibility to pursue strategic transaction. So where 473 00:26:28,440 --> 00:26:32,119 Speaker 2: does the deal stand now? Ryan Cohen joins us on 474 00:26:32,119 --> 00:26:34,880 Speaker 2: Bloomberg Television and Radio. Right, thank you for your time, 475 00:26:35,240 --> 00:26:40,120 Speaker 2: and good morning, welcome to Bloomberg Tech. On the long 476 00:26:40,160 --> 00:26:42,880 Speaker 2: list of things that have happened since May, our audience 477 00:26:42,920 --> 00:26:46,560 Speaker 2: just has a very simple question view, which is what's changed, 478 00:26:46,920 --> 00:26:48,800 Speaker 2: what's developed in that period of time. 479 00:26:51,600 --> 00:26:56,080 Speaker 11: There has been a complete failure by the media to 480 00:26:56,240 --> 00:27:02,200 Speaker 11: explain why this transaction makes sense. And on my track 481 00:27:02,240 --> 00:27:06,960 Speaker 11: record chewing in game Stop, it speaks for themselves. My 482 00:27:07,040 --> 00:27:10,280 Speaker 11: alignment with shareholders, I'm putting five hundred million dollars of 483 00:27:10,320 --> 00:27:14,879 Speaker 11: my own money into the transaction. The high margin growth 484 00:27:14,920 --> 00:27:19,120 Speaker 11: opportunities for this business within live commerce, which company has 485 00:27:19,160 --> 00:27:22,600 Speaker 11: not been doing well, and using game Stop stores as 486 00:27:22,720 --> 00:27:27,080 Speaker 11: nodes for both the marketplace and live commerce is huge 487 00:27:27,080 --> 00:27:29,920 Speaker 11: because the business today in live commerce is tiny. And 488 00:27:29,960 --> 00:27:33,040 Speaker 11: then building out a digital marketplace for in game items, 489 00:27:33,080 --> 00:27:36,680 Speaker 11: those are just like some of the high growth opportunities 490 00:27:36,680 --> 00:27:40,080 Speaker 11: within the business. And then there is the cost takeout 491 00:27:40,119 --> 00:27:44,840 Speaker 11: opportunity I've committed to taking out two billion dollars within 492 00:27:44,880 --> 00:27:51,080 Speaker 11: the first year, and that's just the beginning. So this 493 00:27:51,200 --> 00:27:54,720 Speaker 11: whole narrative that the business is going to be too 494 00:27:54,800 --> 00:28:00,280 Speaker 11: leveraged is a fantasy invented by the media and it's 495 00:28:00,320 --> 00:28:01,280 Speaker 11: just simply in our trill. 496 00:28:04,680 --> 00:28:10,320 Speaker 2: On the banking side, let's go there. You lined up 497 00:28:10,359 --> 00:28:12,920 Speaker 2: some banking support, right, and I think that one of 498 00:28:12,960 --> 00:28:16,399 Speaker 2: the concerns that Moody's put out there as an example 499 00:28:17,440 --> 00:28:20,679 Speaker 2: was the credit rating and the credit worthiness of the 500 00:28:20,720 --> 00:28:24,359 Speaker 2: combined entity. So again another question from the audience is 501 00:28:25,280 --> 00:28:30,040 Speaker 2: explain the banking support that you've secured since May, but 502 00:28:30,119 --> 00:28:34,480 Speaker 2: also that concern that the debt component of it, what 503 00:28:34,560 --> 00:28:38,760 Speaker 2: the credit negative outlook would be for a combined entity 504 00:28:38,800 --> 00:28:40,680 Speaker 2: based on the plan that you've just outlined. 505 00:28:43,720 --> 00:28:46,960 Speaker 11: We have a highly confident letter from our bankers, We 506 00:28:47,040 --> 00:28:49,840 Speaker 11: have a lot of parties that are interested in this transaction, 507 00:28:50,840 --> 00:28:55,840 Speaker 11: and the most important thing ultimately, if we can't get 508 00:28:55,840 --> 00:28:58,920 Speaker 11: the debt, then it means that eBay can't get the debt, 509 00:28:59,200 --> 00:29:02,920 Speaker 11: and eBay can and get the debt, so its entire 510 00:29:03,040 --> 00:29:05,720 Speaker 11: narrative is simply not trill. 511 00:29:08,160 --> 00:29:10,680 Speaker 2: I didn't explain that question very well. Ryan if I'm 512 00:29:10,800 --> 00:29:12,440 Speaker 2: self reflective honest about it. So I'm just going to 513 00:29:12,640 --> 00:29:15,600 Speaker 2: go back to it. Your financing letter is from Ted right, 514 00:29:15,640 --> 00:29:19,280 Speaker 2: and it was widely reported to depend on the combined 515 00:29:19,320 --> 00:29:23,240 Speaker 2: company maintaining investment grade credit rating, and then Moodies came 516 00:29:23,280 --> 00:29:25,600 Speaker 2: out and said that this deal would be credit negative 517 00:29:26,520 --> 00:29:30,440 Speaker 2: for the combined company. Have you taken steps to address that. 518 00:29:34,440 --> 00:29:37,959 Speaker 11: Nobody has reached out to us, including the credit agencies, 519 00:29:38,600 --> 00:29:42,720 Speaker 11: but the pro forma company is going to be investment grade. 520 00:29:45,160 --> 00:29:50,000 Speaker 2: We talked to the beginning of the conversation about shareholders improving, 521 00:29:50,440 --> 00:29:55,600 Speaker 2: increasing sorry the company's authorized share count. Does that allow 522 00:29:55,680 --> 00:29:59,440 Speaker 2: you to do something new that you couldn't have otherwise 523 00:29:59,480 --> 00:30:01,520 Speaker 2: done in the context of the eBay deal? 524 00:30:05,400 --> 00:30:07,040 Speaker 6: Yeah, I mean we yes, it does. 525 00:30:09,040 --> 00:30:09,800 Speaker 3: And what would that be? 526 00:30:13,120 --> 00:30:15,920 Speaker 6: Buy the business by eBay? 527 00:30:17,440 --> 00:30:19,600 Speaker 2: I posted on x that you were coming on the show, 528 00:30:19,840 --> 00:30:23,280 Speaker 2: and you know, in the context of what you've done 529 00:30:25,080 --> 00:30:28,400 Speaker 2: with financial mechanics of late you know, the question that 530 00:30:28,520 --> 00:30:31,520 Speaker 2: existing Games Stop shareholders sent me over and over again is, 531 00:30:31,840 --> 00:30:36,120 Speaker 2: you know, you're asking them to accept pretty significant dilution, 532 00:30:36,880 --> 00:30:39,960 Speaker 2: and they're basically asking, like, what's the payoff for them 533 00:30:40,000 --> 00:30:41,360 Speaker 2: in accepting that dilution? 534 00:30:43,640 --> 00:30:45,480 Speaker 6: There's different forms of dilution. 535 00:30:46,080 --> 00:30:52,440 Speaker 11: Most dilution is diluted to shareholders. When you're buying a 536 00:30:52,480 --> 00:30:58,880 Speaker 11: business and I've committed to pulling two billion dollars. 537 00:30:58,440 --> 00:31:01,400 Speaker 6: Of costs out. So if you do the math and. 538 00:31:01,400 --> 00:31:06,240 Speaker 11: Buying a business for fifty six billion, and the business 539 00:31:06,800 --> 00:31:09,400 Speaker 11: is forecasted to make over three and a half billion, 540 00:31:11,520 --> 00:31:13,920 Speaker 11: that's the consensus for twenty twenty six. 541 00:31:14,200 --> 00:31:14,680 Speaker 6: Plus what. 542 00:31:16,720 --> 00:31:18,880 Speaker 11: I would be pulling out in costs, so you're at 543 00:31:19,000 --> 00:31:22,239 Speaker 11: over five and a half billion of EBADA, and then 544 00:31:22,280 --> 00:31:25,440 Speaker 11: the ability to take this platform and build a much, 545 00:31:25,520 --> 00:31:26,760 Speaker 11: much larger business. 546 00:31:28,800 --> 00:31:29,880 Speaker 6: The upside is huge. 547 00:31:29,880 --> 00:31:32,240 Speaker 11: So I wouldn't go and buy a business if I 548 00:31:32,280 --> 00:31:34,560 Speaker 11: didn't think I can take it from fifty six billion 549 00:31:34,760 --> 00:31:38,920 Speaker 11: and turn it into multiples larger. So it's a creative 550 00:31:39,000 --> 00:31:42,960 Speaker 11: to shareholders. But most of the time when companies are 551 00:31:43,000 --> 00:31:46,560 Speaker 11: issuing shares, it's dilutive and earnings per share goes down. 552 00:31:46,760 --> 00:31:50,440 Speaker 11: In this case, it's a different story. But most of 553 00:31:50,480 --> 00:31:54,280 Speaker 11: the time you have management teams. A good example is 554 00:31:54,320 --> 00:31:58,160 Speaker 11: this company that collect tons of risk free compensation and 555 00:31:58,160 --> 00:31:59,800 Speaker 11: they're not aligned with shareholders. 556 00:32:00,200 --> 00:32:02,440 Speaker 6: In this case, that's not the case. 557 00:32:05,480 --> 00:32:08,080 Speaker 2: You had the letter from TD you said earlier, you 558 00:32:08,080 --> 00:32:09,959 Speaker 2: were going to put five hundred million dollars of your 559 00:32:10,000 --> 00:32:13,520 Speaker 2: own money into this transaction. Outside of that, is there 560 00:32:13,560 --> 00:32:17,600 Speaker 2: any other financing support, any other parties that since mid 561 00:32:17,640 --> 00:32:19,040 Speaker 2: May you've pulled into it. 562 00:32:20,800 --> 00:32:24,400 Speaker 11: We've had a lot of parties come to us, and 563 00:32:24,440 --> 00:32:27,440 Speaker 11: there's been a lot of interest from the capital markets. 564 00:32:30,000 --> 00:32:33,440 Speaker 2: We're live on Bloomberg Television and Bloomberg Radio with Ryan Cohen, 565 00:32:33,480 --> 00:32:36,959 Speaker 2: the CEO of game Stop. We're talking about Ryan and 566 00:32:37,000 --> 00:32:40,920 Speaker 2: gamestops bid to buy eBay. Really simple question. Has anyone 567 00:32:40,960 --> 00:32:45,240 Speaker 2: from eBay, the management team or the board reached back 568 00:32:45,280 --> 00:32:48,520 Speaker 2: out to you or responded to you in this interim period? 569 00:32:51,520 --> 00:32:51,600 Speaker 4: No. 570 00:32:51,720 --> 00:32:53,040 Speaker 6: I hope they do, but. 571 00:32:55,080 --> 00:32:58,480 Speaker 11: They're entrenched and they're hiding behind their advisors. 572 00:32:59,480 --> 00:33:02,360 Speaker 2: If I go to Teddy dot com on any browser, 573 00:33:02,400 --> 00:33:05,880 Speaker 2: I'm diverted back to GameStop dot com. 574 00:33:05,920 --> 00:33:10,240 Speaker 11: Why I'm focused on game Stop. 575 00:33:10,840 --> 00:33:13,280 Speaker 2: The roost of the question is, let's say that you 576 00:33:13,400 --> 00:33:19,600 Speaker 2: proceed with this. There's a very wide range of opinion speculation. Basically, 577 00:33:19,640 --> 00:33:23,400 Speaker 2: why does Ryan Cohen want to buy eBay? At one 578 00:33:23,480 --> 00:33:26,680 Speaker 2: extreme is the idea that you just want to be 579 00:33:26,760 --> 00:33:30,720 Speaker 2: the CEO of eBay rather than GameStop. At the other 580 00:33:30,880 --> 00:33:33,640 Speaker 2: end is the idea that you have a bigger plan, 581 00:33:33,680 --> 00:33:35,520 Speaker 2: a master plan. You kind of talked about it a 582 00:33:35,560 --> 00:33:39,640 Speaker 2: little bit earlier, But what's the reality here? What is 583 00:33:39,680 --> 00:33:44,040 Speaker 2: the bigger picture for a combined entity or referencing Teddy 584 00:33:44,080 --> 00:33:47,720 Speaker 2: dot com, there's some history there, but a sort of 585 00:33:47,800 --> 00:33:51,520 Speaker 2: conglomerate a holding company. 586 00:33:52,080 --> 00:33:57,760 Speaker 11: eBay is a platform that I can build into something 587 00:33:58,560 --> 00:34:03,240 Speaker 11: much more profitable and much larger. The ability to take 588 00:34:04,520 --> 00:34:09,200 Speaker 11: game stop stores and our experience in gaming and refurbished 589 00:34:09,280 --> 00:34:14,440 Speaker 11: tech and collectibles combined with eBay and be a leader 590 00:34:14,760 --> 00:34:19,640 Speaker 11: in live commerce, build out an in game digital marketplace, 591 00:34:21,200 --> 00:34:25,640 Speaker 11: use the stores for the same day authentication, and ultimately 592 00:34:26,000 --> 00:34:30,160 Speaker 11: pull down pull out significant cost and none of these 593 00:34:30,200 --> 00:34:33,839 Speaker 11: things come at the expense of growth. It's actually the opposite. 594 00:34:34,120 --> 00:34:36,840 Speaker 11: The more efficient you get, the easier it is to grow. 595 00:34:38,120 --> 00:34:40,759 Speaker 11: It makes too much sense. So that's why I want 596 00:34:40,760 --> 00:34:42,640 Speaker 11: to business. That's why I want to buy it. It's 597 00:34:42,680 --> 00:34:47,560 Speaker 11: not that complicated. There is such overlap between the businesses 598 00:34:48,360 --> 00:34:51,040 Speaker 11: and my experience is in e commerce. 599 00:34:52,120 --> 00:34:52,319 Speaker 7: Right. 600 00:34:53,280 --> 00:34:55,760 Speaker 3: Are you prepared to improve the offer? 601 00:34:55,800 --> 00:35:01,000 Speaker 6: Ryan, I'm not going to negotiate against myself. 602 00:35:01,040 --> 00:35:02,400 Speaker 3: But that might be what it takes. 603 00:35:03,480 --> 00:35:04,640 Speaker 6: We'll see what happens ed. 604 00:35:05,400 --> 00:35:07,279 Speaker 2: You've talked about this a little bit recently. A lot 605 00:35:07,280 --> 00:35:08,919 Speaker 2: of people point out to me you've done a number 606 00:35:08,960 --> 00:35:13,360 Speaker 2: of interviews in quick succession, right what happens to EBA 607 00:35:13,520 --> 00:35:14,240 Speaker 2: just keeps saying. 608 00:35:14,280 --> 00:35:14,320 Speaker 3: No. 609 00:35:19,280 --> 00:35:22,640 Speaker 11: Ultimately, it's going to be the owners of the business 610 00:35:22,760 --> 00:35:27,640 Speaker 11: that are going to decide who's more competent, who's more 611 00:35:27,680 --> 00:35:33,279 Speaker 11: aligned with shareholders, and who's more capable of building a much, 612 00:35:33,360 --> 00:35:39,400 Speaker 11: much larger business. So the management team can only aide 613 00:35:39,440 --> 00:35:42,400 Speaker 11: for so long. And I would love for this to 614 00:35:42,480 --> 00:35:48,480 Speaker 11: be a collaborative process and a consensual process. 615 00:35:48,880 --> 00:35:52,880 Speaker 6: That's my preference, that's number one. But if that doesn't happen, 616 00:35:52,920 --> 00:35:53,520 Speaker 6: then it's going to. 617 00:35:53,520 --> 00:35:56,400 Speaker 11: Be shareholder's decision because they're the owners of the business. 618 00:35:57,840 --> 00:35:58,000 Speaker 3: Right. 619 00:35:58,120 --> 00:36:00,640 Speaker 2: I do want to talk a lot more about the 620 00:36:00,680 --> 00:36:03,600 Speaker 2: game Stop business, a lot more about eBay, and we're 621 00:36:03,640 --> 00:36:05,160 Speaker 2: going to take a break and come back and do 622 00:36:05,200 --> 00:36:07,480 Speaker 2: that talk about what's really happening. I have a final 623 00:36:07,520 --> 00:36:10,600 Speaker 2: question from the audience that I promised I would put 624 00:36:10,640 --> 00:36:13,480 Speaker 2: to you, and it's from game Stop shareholders. A lot 625 00:36:13,560 --> 00:36:16,120 Speaker 2: of Game Stop shareholders have asked about the warrants that 626 00:36:16,280 --> 00:36:20,040 Speaker 2: expire in October. You know, another recent or relatively recent 627 00:36:20,040 --> 00:36:23,280 Speaker 2: financial tracks action from the company. What should they expect 628 00:36:23,320 --> 00:36:27,080 Speaker 2: happens with those warrants between now in October of this year. 629 00:36:29,600 --> 00:36:34,400 Speaker 6: I don't have a crystal ball. I can't answer that question. 630 00:36:36,360 --> 00:36:38,960 Speaker 2: Okay, their expectation is that when they expire. I think 631 00:36:39,000 --> 00:36:41,440 Speaker 2: the date talks over twenty six is that's the outcome. 632 00:36:42,400 --> 00:36:47,280 Speaker 11: Ed people that have invested alongside me when it comes 633 00:36:47,320 --> 00:36:51,680 Speaker 11: to Chewy or game Stop and me committing five hundred 634 00:36:51,680 --> 00:36:55,279 Speaker 11: million dollars into eBay, they've done They've done. 635 00:36:55,400 --> 00:36:59,120 Speaker 6: Very very well. So I don't have a crystal ball. 636 00:36:59,680 --> 00:37:02,439 Speaker 11: I can predict the future, nor can anyone that I've 637 00:37:02,440 --> 00:37:09,080 Speaker 11: ever met. But GameStop is a business that was on 638 00:37:09,120 --> 00:37:14,440 Speaker 11: the brink of bankruptcy and everybody was betting against it 639 00:37:14,520 --> 00:37:17,480 Speaker 11: for a good reason, and now the company is making 640 00:37:17,520 --> 00:37:19,560 Speaker 11: more money than it's ever made in its history. 641 00:37:20,520 --> 00:37:23,279 Speaker 2: Ryan Cohen, CEO GameStop, you're sticking around, We're going to 642 00:37:23,320 --> 00:37:24,960 Speaker 2: take a break, and then we're going to talk about 643 00:37:24,960 --> 00:37:27,440 Speaker 2: that business, GameStop and what it's doing. 644 00:37:28,120 --> 00:37:29,879 Speaker 3: We'll be right back. This is Bloomberg Tech. 645 00:37:36,520 --> 00:37:39,919 Speaker 2: Okay, we're live on Bloomberg Tech with GameStop CEO Ryan Cohen. 646 00:37:40,000 --> 00:37:43,000 Speaker 2: Let's put the eBay deal, potential deal aside for a moment, 647 00:37:43,040 --> 00:37:45,759 Speaker 2: whatever happens to eBay. Game stops are one of the 648 00:37:45,800 --> 00:37:48,360 Speaker 2: biggest names in gaming. I get a lot of questions 649 00:37:48,360 --> 00:37:51,080 Speaker 2: about that, and Ryan, if you're up for it, let's 650 00:37:51,080 --> 00:37:53,920 Speaker 2: start with Grand Theft Auto six. You know it's expected 651 00:37:53,960 --> 00:37:56,600 Speaker 2: to be one of the biggest entertainment launchers ever. You 652 00:37:56,680 --> 00:37:59,600 Speaker 2: go to GameStop dot com, pre orders are available, what 653 00:37:59,600 --> 00:38:02,120 Speaker 2: do you say what a customer is telling you? 654 00:38:03,960 --> 00:38:06,080 Speaker 6: Ed, I want to go back and talk about eBay. 655 00:38:07,000 --> 00:38:08,799 Speaker 11: I want to know if you wanted to build, if 656 00:38:08,840 --> 00:38:14,000 Speaker 11: you wanted to build the trillion dollar business, and you 657 00:38:14,120 --> 00:38:17,760 Speaker 11: had the existing management team, A guy running the company 658 00:38:17,800 --> 00:38:21,120 Speaker 11: makes thirty million bucks a year, hasn't bought a single 659 00:38:21,120 --> 00:38:24,200 Speaker 11: share in the open market, and then you have someone 660 00:38:24,239 --> 00:38:26,040 Speaker 11: that's committed five hundred million might. 661 00:38:26,040 --> 00:38:29,000 Speaker 6: Me Perry, So we don't have to talk in hypotheticals. 662 00:38:29,760 --> 00:38:33,440 Speaker 11: Who's more competent and capable of building a larger business. 663 00:38:35,400 --> 00:38:37,480 Speaker 11: I want you to look at your viewers in the 664 00:38:37,600 --> 00:38:40,799 Speaker 11: eyes and tell them, are you going to bet on 665 00:38:40,800 --> 00:38:45,520 Speaker 11: an entrench management team running the business or me someone 666 00:38:46,080 --> 00:38:49,399 Speaker 11: I went head to head against Amazon selling thirty pound 667 00:38:49,440 --> 00:38:53,440 Speaker 11: bags of dog food turned around a very tough situation 668 00:38:53,560 --> 00:38:57,000 Speaker 11: at GameStop, and now the company is making lots of money. 669 00:38:57,120 --> 00:38:59,839 Speaker 6: I really want to know your opinion, Ryan. 670 00:39:00,120 --> 00:39:03,440 Speaker 2: I'm not here to answer the question. The audience doesn't 671 00:39:03,440 --> 00:39:06,719 Speaker 2: care what I think about this deal. They're here for you. 672 00:39:06,880 --> 00:39:08,880 Speaker 2: But the link to Grand Theft Auto six for what 673 00:39:08,920 --> 00:39:12,680 Speaker 2: it's worth. GameStop has twenty two hundred stores across the 674 00:39:12,760 --> 00:39:14,000 Speaker 2: jurisdictions it operates in. 675 00:39:14,160 --> 00:39:14,319 Speaker 7: Right. 676 00:39:15,280 --> 00:39:19,480 Speaker 2: It sells hardware, video games, consoles that are going discless 677 00:39:20,120 --> 00:39:24,240 Speaker 2: at some point you need to hire people for those stores. 678 00:39:25,400 --> 00:39:28,560 Speaker 2: People are looking at what they know about the proposed 679 00:39:28,560 --> 00:39:31,520 Speaker 2: structure of this deal that's on the table, and trying 680 00:39:31,560 --> 00:39:33,799 Speaker 2: to understand, in part what we talked about earlier, right, 681 00:39:33,840 --> 00:39:37,280 Speaker 2: taking the costs out of the combined business, to understand 682 00:39:37,320 --> 00:39:40,000 Speaker 2: what the plan is here, what the master plan is 683 00:39:40,040 --> 00:39:41,480 Speaker 2: for the combined entity. 684 00:39:41,320 --> 00:39:42,400 Speaker 3: So let's go with that. 685 00:39:42,680 --> 00:39:47,600 Speaker 2: Like, what is the synergistic play here between eBay the 686 00:39:47,640 --> 00:39:51,680 Speaker 2: e commerce business and GameStop, which right now is a 687 00:39:51,680 --> 00:39:56,400 Speaker 2: brick and mortar business selling video games, consoles, collectibles. 688 00:39:57,719 --> 00:40:00,960 Speaker 11: We are going to unlock live commerace. We're going to 689 00:40:01,080 --> 00:40:04,480 Speaker 11: use the stores for same day authentication. I'll give you 690 00:40:04,480 --> 00:40:07,120 Speaker 11: an example let's just talk about trading cards right now. 691 00:40:07,280 --> 00:40:11,160 Speaker 11: Right the biggest mast shoe on eBay is fraud. 692 00:40:11,480 --> 00:40:13,200 Speaker 6: So they've done really well. 693 00:40:12,880 --> 00:40:17,040 Speaker 11: On authenticity guarantee because you know, when you buy an 694 00:40:17,080 --> 00:40:18,480 Speaker 11: item now and it's got. 695 00:40:18,360 --> 00:40:20,880 Speaker 6: The AG certification, it's legit. 696 00:40:21,719 --> 00:40:25,920 Speaker 11: It's going through a centralized model right now. So the 697 00:40:26,040 --> 00:40:28,799 Speaker 11: seller's shipping it costs a lot of money. There's a 698 00:40:28,800 --> 00:40:33,560 Speaker 11: few fulfillment centers, take some time, and then it goes 699 00:40:33,600 --> 00:40:38,520 Speaker 11: to the buyer can ultimately go Once these businesses are together, 700 00:40:38,600 --> 00:40:42,600 Speaker 11: we've got sixteen hundred nodes, they're within a fifteen minute 701 00:40:42,680 --> 00:40:45,399 Speaker 11: drive of eighty percent of the population, and you can 702 00:40:45,440 --> 00:40:50,040 Speaker 11: authenticate the item same day or cheaper. So that's just 703 00:40:50,239 --> 00:40:55,600 Speaker 11: one item. Live commerce, the business is getting smoked. Live 704 00:40:55,640 --> 00:40:59,160 Speaker 11: commerce is a trillion dollar addressable market. It's really really 705 00:40:59,239 --> 00:41:02,080 Speaker 11: big in Asia. There's some competitors in the US that 706 00:41:02,120 --> 00:41:03,400 Speaker 11: are doing very very well. 707 00:41:03,680 --> 00:41:05,320 Speaker 6: eBay is not doing very well. 708 00:41:05,680 --> 00:41:09,480 Speaker 11: So the ability to go and use our nodes or 709 00:41:09,520 --> 00:41:14,000 Speaker 11: as studios and as fulfillment and logistics for content creators 710 00:41:14,880 --> 00:41:18,239 Speaker 11: is huge. And then we have a bit of experience 711 00:41:18,400 --> 00:41:21,279 Speaker 11: in gaming when it comes to the by trade and 712 00:41:21,320 --> 00:41:25,600 Speaker 11: someone the buy selling trade model. So the ability for 713 00:41:25,760 --> 00:41:29,719 Speaker 11: us to use eBay's rails to build out an in 714 00:41:29,880 --> 00:41:34,680 Speaker 11: game digital marketplace is huge. So those are just some 715 00:41:34,760 --> 00:41:39,839 Speaker 11: of the opportunities to take this business and build it 716 00:41:39,840 --> 00:41:43,680 Speaker 11: into something that the existing management team on a standalone 717 00:41:43,719 --> 00:41:45,520 Speaker 11: basis can never do. 718 00:41:48,040 --> 00:41:52,040 Speaker 2: So the situation is collectibles are clearly a central part 719 00:41:52,560 --> 00:41:53,200 Speaker 2: of the plan. 720 00:41:53,520 --> 00:41:55,000 Speaker 3: Right if this deal goes through the. 721 00:41:54,920 --> 00:41:59,640 Speaker 2: Combined entity On gaming, it sounds like you are preparing 722 00:41:59,680 --> 00:42:03,040 Speaker 2: for a world where gaming is discless. There will be 723 00:42:03,080 --> 00:42:07,480 Speaker 2: a trade in secondhand trade in, but that this is 724 00:42:07,480 --> 00:42:10,440 Speaker 2: the umbrella point, right, Like if the hardware makers Sony 725 00:42:10,719 --> 00:42:14,480 Speaker 2: Xbox are reportedly moving to diskless on the console side, 726 00:42:15,080 --> 00:42:20,080 Speaker 2: future game launches are digital only. Where does that fit 727 00:42:20,120 --> 00:42:24,080 Speaker 2: in for your business plan and the combined entity? 728 00:42:24,760 --> 00:42:28,640 Speaker 11: It doesn't matter. It doesn't matter at all. Software it 729 00:42:28,680 --> 00:42:32,560 Speaker 11: mattered in the past. Software today makes up less than 730 00:42:32,600 --> 00:42:34,640 Speaker 11: twelve percent of the business and. 731 00:42:34,600 --> 00:42:36,680 Speaker 6: Collectibles makes up over half. 732 00:42:36,560 --> 00:42:39,960 Speaker 11: The business, So it's totally totally irrelevant. 733 00:42:42,880 --> 00:42:46,120 Speaker 2: Is there anything that you learned from the NFT marketplace 734 00:42:47,320 --> 00:42:51,239 Speaker 2: experiment at game Stop that you think you can put 735 00:42:51,239 --> 00:42:54,760 Speaker 2: into practice if the deal goes through in this combined entity? 736 00:42:54,960 --> 00:42:56,560 Speaker 3: What was the takeaway for you from that. 737 00:42:58,400 --> 00:42:59,160 Speaker 6: What does that mean? 738 00:43:01,640 --> 00:43:02,439 Speaker 3: Game Stop has. 739 00:43:02,360 --> 00:43:05,960 Speaker 2: Looked at digital business lines outside of the physical world. 740 00:43:06,600 --> 00:43:09,240 Speaker 2: What did you learn from GameStop looking at those markets? 741 00:43:11,920 --> 00:43:14,120 Speaker 6: Do you know how much money game Stop is making today? 742 00:43:14,840 --> 00:43:15,160 Speaker 3: Please? 743 00:43:15,920 --> 00:43:18,359 Speaker 11: One hundred and forty three million in Q one by 744 00:43:18,400 --> 00:43:20,520 Speaker 11: a stop aerating earnings in the company's history. 745 00:43:20,880 --> 00:43:23,120 Speaker 3: There was surprise at the strength of earnings recently. 746 00:43:24,320 --> 00:43:27,239 Speaker 11: But again the audio, does everybody in the everybody in 747 00:43:27,280 --> 00:43:29,280 Speaker 11: the media wants game Stop to fail? 748 00:43:29,520 --> 00:43:31,480 Speaker 6: Explain that to me ed? 749 00:43:31,880 --> 00:43:37,160 Speaker 11: Why everybody in the media, in the mainstream media wants 750 00:43:37,320 --> 00:43:41,520 Speaker 11: game Stop to fail? You've got there's nothing more American 751 00:43:42,280 --> 00:43:46,120 Speaker 11: then game Stop committing its balance sheet and this company, 752 00:43:46,400 --> 00:43:51,640 Speaker 11: which is a great American company, eBay being aligned with shareholders, 753 00:43:52,560 --> 00:43:57,960 Speaker 11: that's how this country was built. Is risking your own capital. 754 00:43:58,440 --> 00:44:00,719 Speaker 11: And if the business succeeds, you make money, and if 755 00:44:00,719 --> 00:44:03,480 Speaker 11: the business fails, you'll lose a lot of money. And 756 00:44:03,520 --> 00:44:07,600 Speaker 11: what I want to understand is why everybody wants game 757 00:44:07,680 --> 00:44:12,040 Speaker 11: Stop to fail both it's core business and in this 758 00:44:12,239 --> 00:44:19,360 Speaker 11: transaction well world do we live in where we're betting against, 759 00:44:19,840 --> 00:44:26,560 Speaker 11: We're we're rooting for the an entrenched management team that 760 00:44:26,600 --> 00:44:30,320 Speaker 11: has no skin in the game, and someone that's risking 761 00:44:30,400 --> 00:44:33,080 Speaker 11: their own capital, and there's nothing more American than. 762 00:44:32,920 --> 00:44:35,520 Speaker 6: That you want us to fail. 763 00:44:35,560 --> 00:44:40,040 Speaker 2: I want to understand that, Ryan, I'm a technology journalist. 764 00:44:40,400 --> 00:44:42,919 Speaker 2: I'll host the Tech show on Bloomberg. When this deal 765 00:44:43,000 --> 00:44:47,840 Speaker 2: broke in May, I my team invited you onto the show, 766 00:44:47,880 --> 00:44:50,600 Speaker 2: and it took a number of months. You're now here 767 00:44:50,640 --> 00:44:53,160 Speaker 2: on the show, and in advance of you coming on 768 00:44:53,200 --> 00:44:55,719 Speaker 2: the show, I posted on social media that you were 769 00:44:55,760 --> 00:44:58,560 Speaker 2: coming on the show. I always give our audience opportunity 770 00:44:58,600 --> 00:45:02,880 Speaker 2: to ask their questions. That's what we're doing here, giving 771 00:45:02,920 --> 00:45:06,080 Speaker 2: you an opportunity to present I think that the one 772 00:45:06,120 --> 00:45:09,440 Speaker 2: outsiding thing is people asking when will they see a 773 00:45:09,480 --> 00:45:13,520 Speaker 2: sort of codified plan from you, a business plan presented 774 00:45:13,600 --> 00:45:17,160 Speaker 2: for this combined entity on paper. You've explained a bit 775 00:45:17,200 --> 00:45:19,919 Speaker 2: of it in the course of this conversation, but that's 776 00:45:20,400 --> 00:45:22,680 Speaker 2: why the audience is here to listen to you to 777 00:45:22,800 --> 00:45:26,040 Speaker 2: explain the future of a business that is a combination 778 00:45:26,200 --> 00:45:29,760 Speaker 2: of gamestock and eBay. 779 00:45:30,600 --> 00:45:33,840 Speaker 11: Well, I'm going to bring that plan directly to shareholders. 780 00:45:33,640 --> 00:45:38,200 Speaker 11: It's not going to be through a TV show. 781 00:45:38,239 --> 00:45:39,880 Speaker 6: You can count on it. It's going to be directly 782 00:45:39,960 --> 00:45:40,680 Speaker 6: to shareholders. 783 00:45:42,160 --> 00:45:44,040 Speaker 3: And do you have a timeline for that, Ryan. 784 00:45:46,120 --> 00:45:49,560 Speaker 11: We've had an influx of parties that have come to 785 00:45:49,600 --> 00:45:53,840 Speaker 11: ask and they're interested and then do course, the plan 786 00:45:53,960 --> 00:45:54,920 Speaker 11: is going to be made. 787 00:45:54,719 --> 00:46:02,120 Speaker 6: Public by in the short and also building a much 788 00:46:02,280 --> 00:46:06,440 Speaker 6: larger business. I mean, you know, what is the goal 789 00:46:06,480 --> 00:46:08,520 Speaker 6: of business? What is my goal? 790 00:46:09,160 --> 00:46:10,640 Speaker 11: I own a lot of stock and I don't have 791 00:46:10,680 --> 00:46:15,640 Speaker 11: any perverse incentives, so it's to make the business a 792 00:46:15,680 --> 00:46:18,880 Speaker 11: lot more profitable and to maximize shareholder value. 793 00:46:19,040 --> 00:46:21,600 Speaker 6: So that's the plan. It's not that complicated. 794 00:46:22,160 --> 00:46:26,520 Speaker 11: And I've spoken about huge growth areas within cutting costs 795 00:46:26,880 --> 00:46:30,959 Speaker 11: that's just short term, but live commerce and building out 796 00:46:31,120 --> 00:46:33,879 Speaker 11: an in game digital marketplace. 797 00:46:34,480 --> 00:46:35,560 Speaker 6: So I've shared that with you. 798 00:46:36,080 --> 00:46:38,920 Speaker 11: But everyone in the past have said, well, what's the 799 00:46:38,960 --> 00:46:42,279 Speaker 11: business plan, what's the business plan? But they only do 800 00:46:42,360 --> 00:46:45,560 Speaker 11: that with game Stop for whatever reason. Well, you know 801 00:46:45,600 --> 00:46:50,240 Speaker 11: what the business plan is to make money. Game Stop 802 00:46:50,320 --> 00:46:55,279 Speaker 11: just reported its highest earnings in the company's history with 803 00:46:55,400 --> 00:46:58,840 Speaker 11: a fraction of the stores, and everybody in the media 804 00:46:58,880 --> 00:47:01,560 Speaker 11: said game Stop was feel So the plan is to 805 00:47:01,600 --> 00:47:05,520 Speaker 11: make more money. The plan is to maximize shareholder value. 806 00:47:05,680 --> 00:47:09,400 Speaker 11: Am I going to go and share my proprietary plan 807 00:47:09,920 --> 00:47:13,640 Speaker 11: and every single detail and give it out to my competitors. 808 00:47:14,360 --> 00:47:18,880 Speaker 6: That'd be a pretty stupid thing to do, right. 809 00:47:19,000 --> 00:47:21,520 Speaker 2: We have literally thirty seconds left in the show. Again, 810 00:47:22,680 --> 00:47:25,200 Speaker 2: are you prepared to raise your offer for eBay? You 811 00:47:25,400 --> 00:47:28,640 Speaker 2: set out your vision, but the action you're willing to 812 00:47:28,640 --> 00:47:29,319 Speaker 2: take to do it. 813 00:47:32,040 --> 00:47:35,000 Speaker 11: I'm not going to call my shots, but we're coming 814 00:47:35,040 --> 00:47:36,360 Speaker 11: for eBay one way or another. 815 00:47:38,760 --> 00:47:43,839 Speaker 2: Ryan Cohen, CEO of GameStop and extended conversation on Bloomberg Tech, 816 00:47:43,880 --> 00:47:45,000 Speaker 2: Thank you for your time. 817 00:47:45,920 --> 00:47:48,920 Speaker 3: So does it for this edition of Bloomberg Tech. 818 00:47:49,560 --> 00:47:53,040 Speaker 2: Recap that conversation with Gameslop, cr Ryan Cohen, the others 819 00:47:53,280 --> 00:47:54,080 Speaker 2: in the program. 820 00:47:54,120 --> 00:47:55,600 Speaker 3: There was a lot of technology news. 821 00:47:55,640 --> 00:47:58,160 Speaker 2: You know where to find the podcast on the Bloomberg 822 00:47:58,239 --> 00:48:00,560 Speaker 2: Terminal online, San Francisco. 823 00:48:00,680 --> 00:48:01,719 Speaker 3: This is Bloomberg Tech.