WEBVTT - AT&T to Buy EchoStar Spectrum Licenses for About $23 Billion 0:00:02.720 --> 0:00:10.600 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.600 --> 0:00:14.560 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:17.880 Eastern on Apple Coarclay, and Android Auto with the Bloomberg 0:00:17.920 --> 0:00:21.080 Business App. Listen on demand wherever you get your podcasts, 0:00:21.360 --> 0:00:23.120 or watch us live on YouTube. 0:00:23.760 --> 0:00:26.200 Okay, so we have some big news. Echo Star Wars 0:00:26.239 --> 0:00:28.560 agreed to sell spectrum licenses to AT and T for 0:00:28.600 --> 0:00:31.520 about twenty three billion dollars. I'm looking at Echo Star 0:00:31.600 --> 0:00:35.159 shares right now, they're up seventy seven percent. So we 0:00:35.240 --> 0:00:37.960 wanted to talk about this right so our producers are scrambling. 0:00:38.000 --> 0:00:40.879 It's a mad dash. Who are we gonna get. We're 0:00:40.880 --> 0:00:43.479 gonna pull in someone who's hanging in Nantucket. That's right, 0:00:43.479 --> 0:00:47.280 it's John Butler, Bloomberg Intelligence Senior telecom atalysts. 0:00:47.400 --> 0:00:47.680 John. 0:00:47.840 --> 0:00:50.600 We really appreciate you taking the tele for album. 0:00:50.840 --> 0:00:52.000 Good morning guys. 0:00:51.720 --> 0:00:54.520 Good morning. Yes, we pull on the big guns. So 0:00:54.680 --> 0:00:57.760 explain to us right off the bat, what does this 0:00:57.840 --> 0:00:58.360 deal mean. 0:00:59.560 --> 0:01:03.920 So obviously, given the price action, it is huge for EchoStar, 0:01:04.120 --> 0:01:07.920 and I think at issue for them is they've been 0:01:07.959 --> 0:01:11.440 trying to build their own five G network to compete 0:01:11.440 --> 0:01:14.200 with the big guys, and they have the spectrum to 0:01:14.319 --> 0:01:17.280 do it, but they didn't have the capital to do it. 0:01:17.319 --> 0:01:20.840 They really have an outsized debtload that they've really been 0:01:20.880 --> 0:01:26.440 struggling to service. And the FCC intervened here and they've 0:01:26.480 --> 0:01:31.360 been pressuring on the head of EchoStar, Charlie Urgan, to 0:01:32.200 --> 0:01:36.040 either use the spectrum and start to fill those airwaves 0:01:36.280 --> 0:01:39.319 or to sell it. And so I think this is 0:01:39.440 --> 0:01:42.560 maybe the first of maybe even more moves to sell 0:01:42.640 --> 0:01:45.319 more Spectrum on the part of the company. But given 0:01:45.360 --> 0:01:49.840 the price tag, it alleviates that capital crunch, and so 0:01:50.120 --> 0:01:54.440 any risk of default here I think is minimized now 0:01:54.680 --> 0:01:58.640 in the wake of this deal, And so investors are 0:01:58.720 --> 0:02:01.800 breathing a big sire Leave talk. 0:02:01.640 --> 0:02:05.400 To me a little bit, John about this price. Twenty 0:02:05.440 --> 0:02:10.679 three billion dollars, nine billion more than EchoStar paid for 0:02:11.240 --> 0:02:14.760 the Spectrum, five billion more than the appraised value is 0:02:14.800 --> 0:02:18.119 at and t getting value out out of this twenty 0:02:18.200 --> 0:02:20.720 three billion dollar deal? Are they grossly overpaying? 0:02:21.880 --> 0:02:26.960 So I'll say Spectrum is like houses on Nantucket, you know, 0:02:28.040 --> 0:02:31.160 the price just continues to go up over the years, 0:02:31.240 --> 0:02:34.320 you know, particularly with the advent of AI now and 0:02:34.400 --> 0:02:38.799 the need for more capacity to carry that added traffic. 0:02:39.639 --> 0:02:42.320 It's really not a concern on my part as to 0:02:42.440 --> 0:02:44.639 whether or not AT and T is going to get 0:02:44.680 --> 0:02:49.000 a good return on this investment. And again all kitting aside, 0:02:49.040 --> 0:02:53.120 I go back to that analogy that really spectrum does increate, 0:02:53.720 --> 0:02:57.799 It tends to increase in value over time. It's a 0:02:57.960 --> 0:03:00.800 very ill liquid market, so it's hard to really get 0:03:01.280 --> 0:03:05.400 a good feel for their fair value of different frequencies. 0:03:05.440 --> 0:03:08.120 But I have no doubt that at the end of 0:03:08.160 --> 0:03:11.280 the day, even expensive is going to prove cheap here 0:03:11.360 --> 0:03:11.760 for them. 0:03:12.000 --> 0:03:14.000 Hey, John, can you take a little bit into how 0:03:14.040 --> 0:03:15.919 this is going to expand AT and T's network. 0:03:17.480 --> 0:03:22.040 So if you look at the spectrum holdings of Verizon, 0:03:22.120 --> 0:03:25.920 T Mobile and AT and T and spectrum, I'll just 0:03:26.000 --> 0:03:29.160 take a step back for listeners that don't know, when 0:03:29.160 --> 0:03:32.280 you're making a caller transmitting data over the area, you're 0:03:32.280 --> 0:03:35.960 doing it using spectrum. And the more you have think 0:03:36.000 --> 0:03:37.880 of it like the width of a pipe. The more 0:03:37.960 --> 0:03:41.920 you have, the fatter the pipe, the faster the download speeds. 0:03:42.080 --> 0:03:45.720 And so AT and T intends to put this spectrum 0:03:45.760 --> 0:03:50.760 to use almost immediately to really enhance the download speeds 0:03:50.800 --> 0:03:54.680 of the network. And so network quality gets better, word 0:03:54.760 --> 0:03:57.680 gets around, people begin to say AT and T has 0:03:57.720 --> 0:04:02.680 a better network. From a branding standpoint, there's a real 0:04:02.720 --> 0:04:07.240 benefit here. And then longer term again, as AI continues 0:04:07.320 --> 0:04:11.680 to scale up and ifrincing those queries that we make 0:04:11.720 --> 0:04:14.040 and the answers we get back. Now, a lot of 0:04:14.080 --> 0:04:15.840 that's going to be done at the edge of the 0:04:15.880 --> 0:04:19.720 network where you need that big fat pipe to support 0:04:19.800 --> 0:04:23.520 that traffic. So I think in their minds, those are 0:04:23.560 --> 0:04:27.040 the two things there, after improving the network quality and 0:04:27.120 --> 0:04:31.919 the brand image and having the pipes to move the 0:04:32.040 --> 0:04:34.920 traffic that's coming down the road here and. 0:04:34.960 --> 0:04:37.960 John yesterday, on a call with investors, AT and t's 0:04:38.000 --> 0:04:41.520 CEO Stanky said that, you know, regulators shouldn't be concerned 0:04:41.600 --> 0:04:45.440 that this transaction was going to put too much wireless spectrum, 0:04:45.440 --> 0:04:47.160 I guess in the hands of one of the largest 0:04:47.160 --> 0:04:50.120 telecom carriers. That's what he told investors. But do you 0:04:50.200 --> 0:04:53.520 think regulators are going to bulk at this No. 0:04:53.680 --> 0:04:57.600 I think regulators have been behind prompting the sale, if 0:04:57.640 --> 0:05:00.560 that's the right way to put it. So again, the 0:05:00.680 --> 0:05:04.200 FCC was really on Echo Star to sell some of 0:05:04.240 --> 0:05:11.159 that spectrum. They're educated and well educated and wireless as 0:05:11.240 --> 0:05:15.440 regulators to know that it was probably going to be 0:05:15.560 --> 0:05:17.640 one of the big guys that would step up and 0:05:17.680 --> 0:05:20.880 buy it. If I look at at and T spectrum 0:05:20.920 --> 0:05:27.200 holdings the whole, they had a competitive disadvantage or less 0:05:27.240 --> 0:05:31.680 holdings in the band or the frequencies that they purchased 0:05:31.720 --> 0:05:37.440 from Echo Star here. So I don't think there's any 0:05:37.520 --> 0:05:42.040 sort of regulatory argument against the deal here, but I 0:05:42.040 --> 0:05:45.560 would defer to our legislative analysts in Washington to really 0:05:45.600 --> 0:05:47.880 make the call there. But I'm not concerned. 0:05:48.440 --> 0:05:51.520 Stay with us for more Bloomberg Intelligence coming up after this. 0:05:54.080 --> 0:05:57.799 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:05:57.880 --> 0:06:00.920 weekdays at ten am Eastern on album Barklay and Android 0:06:00.960 --> 0:06:04.279 Auto with the Bloomberg Business app. Listen on demand wherever 0:06:04.320 --> 0:06:07.440 you get your podcasts, or watch us live on YouTube. 0:06:08.120 --> 0:06:10.000 So a lot of headlines in the news. One of 0:06:10.040 --> 0:06:12.559 them that caught my eye this was Eli Lilly. Okay, 0:06:12.600 --> 0:06:16.279 so their weight loss pill. It's moving a little bit closer, 0:06:16.320 --> 0:06:19.360 one step closer to this potential approval. This came after 0:06:19.440 --> 0:06:21.520 results from its latest trial. So what we want to 0:06:21.560 --> 0:06:23.520 do is get more details from that. Let's bring in 0:06:23.560 --> 0:06:26.680 Sam Fazzelli. He is Bloomberg Intelligence Director of Research for 0:06:26.760 --> 0:06:31.000 Global Industries and Senior Pharmaceuticals, joining us from London. Sam, 0:06:31.040 --> 0:06:34.520 welcome back to the show. So this is the second 0:06:34.560 --> 0:06:36.680 trial of the pill, I believe, So how is it 0:06:36.720 --> 0:06:37.719 different this time around? 0:06:38.800 --> 0:06:40.640 It is, Lisa, thank you for having me back. 0:06:40.720 --> 0:06:42.960 And I'm sorry that Paul is in here for me 0:06:43.040 --> 0:06:44.880 to give him grief because he always tells me off 0:06:44.960 --> 0:06:45.479 the technia. 0:06:45.640 --> 0:06:46.640 He always busts your. 0:06:46.600 --> 0:06:48.160 Job next time. 0:06:48.720 --> 0:06:54.760 And so look, this is a large trial in dibet 0:06:54.880 --> 0:06:58.839 diabetic patients, but it will be diabetic patients, so they're 0:06:58.880 --> 0:07:02.920 looking at the impact in that population. That population tends 0:07:02.960 --> 0:07:07.320 to have less of a weight loss for our variety 0:07:07.320 --> 0:07:10.320 of reasons. But it's come out exactly where we thought 0:07:10.320 --> 0:07:12.840 it would come out, actually maybe a little bit better 0:07:13.440 --> 0:07:17.880 than people's lowered expectations after that first trial read out 0:07:17.920 --> 0:07:19.840 a couple of weeks ago, if you remember when the 0:07:19.880 --> 0:07:24.480 stock got hit severely Lily stock, and so we're see 0:07:24.640 --> 0:07:29.080 about ten percent weight loss and still the same high 0:07:29.200 --> 0:07:33.600 levels of discontinuations. This is a long trial, so you 0:07:33.680 --> 0:07:35.520 even find a whole bunch of people and place would 0:07:35.520 --> 0:07:38.040 discontinue because they get bored, they want to go and 0:07:38.040 --> 0:07:40.800 get wed loss from another drug. So it's actually pretty 0:07:40.800 --> 0:07:42.760 decent data. And I think you can see that Nova 0:07:42.880 --> 0:07:45.400 is sold off on the back of this because it's 0:07:45.400 --> 0:07:49.360 a small molecular pill. It's a pilly can take, relatively 0:07:49.360 --> 0:07:54.600 easily manufactured, and you can take without too much complications 0:07:54.600 --> 0:07:57.280 in terms of don't eat to eat, take in the morning, 0:07:57.320 --> 0:07:58.800 takeing the evening, that sort of stuff. 0:07:58.920 --> 0:08:01.680 And that's the key, Sam. And I'm wondering how much 0:08:01.680 --> 0:08:04.320 of a game changer this is because it's not an injection, right, 0:08:04.360 --> 0:08:07.040 it's a pill. You're looking at an industry that by 0:08:07.080 --> 0:08:10.920 twenty thirty is projected to be ninety five billion dollars. 0:08:10.960 --> 0:08:14.720 So if this goes Eli Lilly's way, is it a 0:08:14.720 --> 0:08:15.920 game changer for the company? 0:08:16.800 --> 0:08:18.480 Yeah, I mean it has gone their way. 0:08:18.600 --> 0:08:22.440 This is unless something shows up in the enormous number 0:08:22.440 --> 0:08:25.120 of files that they file to the FDA, or side 0:08:25.120 --> 0:08:26.080 effects or something. 0:08:26.560 --> 0:08:29.720 This is a drug that's likely to get approved. 0:08:30.080 --> 0:08:31.480 The question is how do you use it. 0:08:31.800 --> 0:08:34.720 You've got the injectibles once a week, once a week, 0:08:34.800 --> 0:08:38.280 not a big ask, very fine needle. People even tell 0:08:38.320 --> 0:08:40.400 me they don't even notice the needle going in and out, 0:08:40.440 --> 0:08:45.160 but still you don't see the needle. So what is 0:08:45.160 --> 0:08:48.920 its it? Ten percent weight loss versus twenty percent weight loss? 0:08:49.320 --> 0:08:51.760 So what is the right way forward here? Some people 0:08:51.800 --> 0:08:54.760 are needlephobic, it's going to be helpful for those. Some 0:08:54.800 --> 0:08:57.080 people can't get access to the drug because it's hard 0:08:57.080 --> 0:09:00.680 to manufacture. The other ones that are injectibles sterile manufacturing. 0:09:00.760 --> 0:09:02.360 So there's lots of room for this. And of course 0:09:02.400 --> 0:09:04.599 there's this other thing that I think a lot of 0:09:04.600 --> 0:09:08.120 people keep thinking about, is you've got your big weight 0:09:08.160 --> 0:09:11.280 loss with your injectables six months, in nine months, in 0:09:11.360 --> 0:09:14.800 twelve months, in switch to this and help you maintain 0:09:15.000 --> 0:09:18.800 You might not even need the higher doses, which are 0:09:18.800 --> 0:09:21.080 causing some side effects. Maybe you can get away with 0:09:21.120 --> 0:09:23.200 a lower dose and maintain that weight loss. 0:09:23.679 --> 0:09:25.720 They would have to do a trial to prove that though. 0:09:26.320 --> 0:09:28.640 So, Sam, as you're talking, a question kind of popped 0:09:28.640 --> 0:09:31.520 into my head. You're talking about all the different advantages 0:09:31.559 --> 0:09:34.600 to it. What about has there been any talk about price, 0:09:34.720 --> 0:09:38.319 like how much could this pill cost compare to an injection? 0:09:39.640 --> 0:09:42.480 I mean, it would be an error for these companies 0:09:42.520 --> 0:09:46.160 to start competing with themselves on price with their products. 0:09:47.320 --> 0:09:50.320 If you find that actually you can go with the 0:09:50.360 --> 0:09:53.160 lower dose of this. Your margins are a bit better, 0:09:53.840 --> 0:09:56.400 definitely because there's no device involved. But I don't know 0:09:56.440 --> 0:09:59.720 what the small molecule manufacturing because they're not all small 0:09:59.760 --> 0:10:03.080 malley ques are easy to make, right, and it may 0:10:03.120 --> 0:10:06.040 be small discount perhaps, I don't know, but but I 0:10:06.480 --> 0:10:08.079 doubt that this will come out at a. 0:10:08.160 --> 0:10:10.400 Level that's significantly lower. 0:10:11.440 --> 0:10:13.560 On the other hand, it does have lower weight loss, 0:10:13.600 --> 0:10:16.440 so maybe maybe there is an opportunity to kind of 0:10:17.400 --> 0:10:19.360 I see pari pass whu if whatever, If that's the 0:10:19.400 --> 0:10:22.079 right phrase, in line with its weight loss that you're getting. 0:10:23.280 --> 0:10:26.800 I want to branch out and talk just biotech on 0:10:26.840 --> 0:10:29.880 a bigger scale for a moment because M and A 0:10:30.080 --> 0:10:32.960 hass you know, been pretty active right and in the 0:10:33.000 --> 0:10:36.040 sector we had Merk buying Verona Pharma I think it 0:10:36.080 --> 0:10:39.520 was for their respiratory treatment recently. What's the outlook for 0:10:39.640 --> 0:10:40.679 M and A there? And I know one of the 0:10:40.760 --> 0:10:42.959 hurdles for biotech, and it's sort of an ongoing hurdle 0:10:43.080 --> 0:10:46.120 is changes to regulatory framework, So talk to us a 0:10:46.120 --> 0:10:46.760 little bit about that. 0:10:46.880 --> 0:10:52.000 Yeah, did that those changes if you're talking about perhaps 0:10:52.040 --> 0:10:57.880 the from an FTC perspective, those those have not hindered 0:10:58.200 --> 0:11:00.480 and ideals. When we counted a whole bunch of deals 0:11:00.760 --> 0:11:02.280 in the first half of this year, and it looked 0:11:02.280 --> 0:11:05.160 like a pretty strong year for deals, and that's not 0:11:05.200 --> 0:11:06.240 even including. 0:11:05.840 --> 0:11:09.440 The Verona one. The thing here is a lot of 0:11:09.960 --> 0:11:12.679 executives in the biotech boord I'll still looking at their 0:11:12.679 --> 0:11:16.080 share price charts thinking back to those beautiful days of 0:11:16.600 --> 0:11:18.680 two or three years ago where the share prices were 0:11:18.720 --> 0:11:21.319 seventy eighty percent higher and thinking is it the right 0:11:21.360 --> 0:11:22.120 thing for them to do? 0:11:22.160 --> 0:11:22.640 To sell? 0:11:23.200 --> 0:11:26.880 Clearly some have got to the point of accepting that, 0:11:26.920 --> 0:11:28.600 and some have done it from a position of strength. 0:11:28.720 --> 0:11:32.319 Verona was rocketing up before they got taken out at whatever, 0:11:32.360 --> 0:11:35.800 over one hundred dollars a share, so Farmer is definitely interested. 0:11:36.320 --> 0:11:38.880 Maybe if the interest rate environment, going back to what 0:11:38.920 --> 0:11:41.800 we were just hearing earlier, does go in favor of 0:11:43.200 --> 0:11:45.760 cost of capital coming down, maybe you'll start seeing some 0:11:45.760 --> 0:11:49.280 more deals, and of course that would also help biotech 0:11:49.360 --> 0:11:52.480 valuations potentially in general. So maybe there would be an 0:11:52.480 --> 0:11:54.360 interesting time to look out to in the next six 0:11:54.400 --> 0:11:55.319 to twelve months. 0:11:55.440 --> 0:11:56.080 All right, Sam, and. 0:11:56.080 --> 0:11:58.920 The last minute, do you have here another article caught 0:11:58.960 --> 0:12:01.720 my eye. President from Health and Human Services Secretary Robert 0:12:01.800 --> 0:12:04.280 Kennedy Junior. There there are leslie funny to ban the 0:12:04.320 --> 0:12:08.000 COVID vaccine within months. Did this surprise you at all? 0:12:09.679 --> 0:12:12.720 Well, yes, no. 0:12:13.640 --> 0:12:17.520 The thing is it's rumor, and I think the HS 0:12:17.320 --> 0:12:20.800 has said, look, there's no nothing that we can tell 0:12:20.840 --> 0:12:23.400 you today that we're back this. I think that would 0:12:23.400 --> 0:12:28.080 be a mistake. And choice is what Americans have always 0:12:28.360 --> 0:12:30.240 valued in the freedom that the US has. 0:12:30.760 --> 0:12:32.560 Let's just leave the choice there, give. 0:12:32.440 --> 0:12:35.280 People all the information, do the scientific work that the 0:12:35.520 --> 0:12:39.040 HS wants to do, and just leave it open and 0:12:39.120 --> 0:12:42.040 give it to the discussion between physicians and patients and 0:12:42.080 --> 0:12:43.080 subjects and people. 0:12:43.559 --> 0:12:44.720 I think that's the right way. 0:12:44.960 --> 0:12:47.440 Whether that will happen or not, but if it does happen, 0:12:48.000 --> 0:12:50.360 we've got a bad time for Biontic and Moderna because 0:12:50.360 --> 0:12:51.880 that's the only source of revenue. 0:12:52.480 --> 0:12:55.600 Stay with us for more Bloomberg Intelligence coming up after this. 0:12:58.480 --> 0:13:01.880 You're listening to the Bloomberg and Intelligence podcast. Catch us 0:13:01.920 --> 0:13:04.960 live weekdays at ten am Eastern on Apple, Corplay and 0:13:04.960 --> 0:13:08.240 Android Auto with the Blueberg Business app. Listen on demand 0:13:08.280 --> 0:13:11.840 wherever you get your podcasts, or watch us live on YouTube. 0:13:13.040 --> 0:13:16.280 What's also a piece of America are eyewear. Right, you 0:13:16.400 --> 0:13:19.040 go out and it's like you're styling, You're wearing your 0:13:19.080 --> 0:13:22.520 fancy sunglasses. It's a nice day out. You know, you 0:13:22.640 --> 0:13:25.000 have to look good when you're going out. So this 0:13:25.160 --> 0:13:27.760 is taking us to the competitive eyewear space. 0:13:27.800 --> 0:13:28.319 We're saying. 0:13:28.400 --> 0:13:31.240 Sources are saying that the maker of ray Band sunglasses, 0:13:31.320 --> 0:13:33.880 I have my own pair, as the Lord looks out again, 0:13:33.880 --> 0:13:36.400 they're considering increasing their steak in Nikon. 0:13:36.520 --> 0:13:36.720 Now. 0:13:37.000 --> 0:13:39.600 The company has really been pushing ahead with these smart 0:13:39.600 --> 0:13:42.600 glasses initiative, so we want to find out more about it, right, 0:13:42.640 --> 0:13:45.120 so let's go to Diana Gomez. She is Bloomberg Intelligence 0:13:45.200 --> 0:13:49.120 senior equity research analyst. Diana, thanks for joining us up. 0:13:49.160 --> 0:13:52.000 So how much they want to boost their steak? And 0:13:52.120 --> 0:13:54.600 I kinda and what's the current holding at. 0:13:56.160 --> 0:13:58.800 Hi, Yes, thank you for having me. So at the moment, 0:13:59.400 --> 0:14:04.040 it's uh about a nine percent stake, and the reports 0:14:04.080 --> 0:14:06.320 we are getting is that there is a potential interest 0:14:06.360 --> 0:14:10.520 to increase that to about twenty percent, which would be 0:14:11.280 --> 0:14:13.880 in the order working at the current market cap maybe 0:14:13.920 --> 0:14:17.040 a three hundred million dollars or so, which given a 0:14:17.120 --> 0:14:22.560 se or Euxotica's cash position would not be quite material, 0:14:22.640 --> 0:14:28.440 but still quite a sizable stake in Nikon from a 0:14:28.480 --> 0:14:31.880 few years of quite a long experience as in their 0:14:31.960 --> 0:14:34.240 joint venture Connectending that. 0:14:34.520 --> 0:14:38.200 Connect the dots for us though, because what does Nikon 0:14:38.400 --> 0:14:41.080 have that Luxotica wants. 0:14:42.920 --> 0:14:46.800 Besides the brand name that is quite well known to 0:14:47.720 --> 0:14:54.200 even the consumer side outside the professional sector, there is 0:14:54.600 --> 0:14:58.400 the technology and the know how that can be utilized 0:14:58.440 --> 0:15:02.440 and leveraged by both companies. So we are talking about 0:15:02.680 --> 0:15:07.280 the distribution of SLR combined with nohow and brand a 0:15:07.320 --> 0:15:11.160 strong brand name of a company like Nikan. And they 0:15:11.200 --> 0:15:15.040 have been partnering in different areas. One of them which 0:15:15.080 --> 0:15:19.840 is quite an emerging ones is the myopia control which 0:15:19.920 --> 0:15:23.920 is which are these lenses that are meant to solve 0:15:23.960 --> 0:15:28.440 the progression of myopia in children, which is quite important 0:15:28.480 --> 0:15:34.120 given that forecasts are that's by twenty fifty about half 0:15:34.120 --> 0:15:37.800 of the world population could be suffering from myopia. So 0:15:37.880 --> 0:15:42.400 it's it's quite an interesting area as an example of 0:15:42.440 --> 0:15:46.840 those where they are collaborating, particularly in China where they 0:15:46.840 --> 0:15:51.600 are selling already some of these myopia controllances. With the 0:15:51.720 --> 0:15:55.840 FDA approval for the SEL or auxosticasles still being in 0:15:56.160 --> 0:15:57.440 the pipeline as well. 0:15:57.480 --> 0:16:00.000 And in quick thirty seconds, Diana, what are who are 0:16:00.080 --> 0:16:02.920 some of Nikon's competitors in there in the space and 0:16:03.240 --> 0:16:04.720 who does it supply. 0:16:06.360 --> 0:16:12.280 So they would be competing with other wcees and also 0:16:13.800 --> 0:16:20.240 even photographic kind of equipment, and the space is quite 0:16:20.840 --> 0:16:24.560 diverse at the moment because even with so or Auxotic 0:16:24.600 --> 0:16:30.080 at this partnership just potential extended partnership just shows how 0:16:30.520 --> 0:16:33.360 the company is going more into the medical technology and 0:16:33.480 --> 0:16:38.920 medical devices filled in terms of trying to also find 0:16:39.600 --> 0:16:42.120 medical issues just looking at the eye. So that's a 0:16:42.120 --> 0:16:47.880 new area where companies within the optomological and visual space 0:16:47.920 --> 0:16:52.640 are looking at and WNCES companies that are potentially with 0:16:52.680 --> 0:16:57.560 the consumer more known for the photo cameras also play 0:16:57.600 --> 0:17:01.320 a role with So it's all quite well integrated and 0:17:01.720 --> 0:17:03.200 in the world of smart classes. 0:17:03.720 --> 0:17:06.840 Stay with us for more Bloomberg Intelligence coming up after this. 0:17:09.040 --> 0:17:12.760 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:17:12.840 --> 0:17:15.920 weekdays at ten am Eastern on Apple Corplay and Android 0:17:15.920 --> 0:17:19.240 Auto with the Bloomberg Business app. Listen on demand wherever 0:17:19.280 --> 0:17:22.400 you get your podcasts, or watch us live on YouTube. 0:17:23.200 --> 0:17:24.639 All right, I want to move on to this story. 0:17:24.680 --> 0:17:27.040 We heard it yesterday or Sted right the management now 0:17:27.080 --> 0:17:29.840 they're trying to reassure their investors. This is after the 0:17:29.840 --> 0:17:33.120 Trump administration while they block construction of its almost finished 0:17:33.200 --> 0:17:35.840 Rhode Island wind farm. So we want to dig more 0:17:35.880 --> 0:17:39.240 into this story. Let's bring in Patricio Alvarez, Bloomberg Intelligence, 0:17:39.280 --> 0:17:42.879 equity research analysts, power and gas utilities. Who better to 0:17:42.920 --> 0:17:46.000 talk to them than this. So what does this mean 0:17:46.040 --> 0:17:48.800 for Orsad's plan share sale? That's what I wanted to 0:17:48.800 --> 0:17:49.280 start right. 0:17:49.200 --> 0:17:55.800 There, absolutely, So let's begin where Oristed's management NA went 0:17:55.920 --> 0:17:59.760 ahead with a plan for inequity increase. 0:18:00.080 --> 0:18:01.200 That's quite substantial. 0:18:01.280 --> 0:18:05.240 So that's sixty billion kroner that they announced on August eleventh. 0:18:05.640 --> 0:18:08.280 That was nearly forty six percent of their market cap 0:18:08.320 --> 0:18:11.320 back then, So it is a significant size of an 0:18:11.400 --> 0:18:15.320 equity increase. And that was mainly to cover the construction 0:18:15.640 --> 0:18:19.639 of Revolution Wind and that was because the company was 0:18:19.680 --> 0:18:23.600 not able to sell a stake in that project. That's 0:18:23.600 --> 0:18:26.840 mainly like, that's really their their key funding strategy is 0:18:26.920 --> 0:18:30.280 to sell stake selles in there in the projects that 0:18:30.320 --> 0:18:32.280 they're building. They were not able to do so, so 0:18:32.359 --> 0:18:36.240 they needed to go for this massive equity increase. Now 0:18:36.240 --> 0:18:39.320 that the stop work order that you just mentioned, I 0:18:39.359 --> 0:18:41.240 think most of the market did not see that coming, 0:18:41.280 --> 0:18:44.080 given that the project was already eighty percent of the way. 0:18:44.680 --> 0:18:47.439 Forty five out of sixty five wind blades were already 0:18:47.440 --> 0:18:50.680 on the ground. So this is you know, this is unprecedented. 0:18:51.040 --> 0:18:55.080 I think the Empire Wind stop work order and then 0:18:55.160 --> 0:18:57.960 restart is different in the way that the project was 0:18:58.000 --> 0:19:00.840 not as as far in advance as this one. So 0:19:01.240 --> 0:19:04.760 it will dampen investor confidence ahead of the ahead of 0:19:04.760 --> 0:19:07.360 the plan that could increase. But we do know that 0:19:07.400 --> 0:19:10.280 the backing of the Danish government, which has committed a 0:19:10.400 --> 0:19:15.600 fifty fifty percent pro rata share of that it could increase. Well, 0:19:15.720 --> 0:19:19.760 we'll give some reassurance and will probably help secure those funds. 0:19:20.520 --> 0:19:23.480 I know the stock took a big hit, fell to 0:19:23.520 --> 0:19:27.639 a record low, but it bounced back again. I believe 0:19:27.640 --> 0:19:31.680 it started trading again right overseas and rallied. And why 0:19:31.800 --> 0:19:33.000 is that more? That was it over sold? 0:19:33.000 --> 0:19:33.080 It? 0:19:33.119 --> 0:19:34.440 Investors think it was over sold, you. 0:19:34.359 --> 0:19:37.560 Think, I think I think there was a big mix 0:19:37.600 --> 0:19:39.919 of boats. So the stop work order came came in 0:19:39.960 --> 0:19:43.360 Friday after market and I think markets didn't have time 0:19:43.400 --> 0:19:48.399 to digest the implications to the equity increase after you know, 0:19:48.400 --> 0:19:51.000 we had a bank holiday in the UK, so markets 0:19:51.040 --> 0:19:53.919 open up this morning and that was mainly because of 0:19:53.960 --> 0:19:56.840 these reassurance of Oysted. So the company came out with 0:19:56.840 --> 0:19:59.880 a statement saying that the Danish government has actually reached 0:20:00.040 --> 0:20:04.200 rated or reaffirmed their intent to participate at least in 0:20:04.480 --> 0:20:07.679 fifty point one percent of that equity increase, with the 0:20:07.760 --> 0:20:11.000 remaining set to be underwritten. So the company, the company 0:20:11.040 --> 0:20:14.520 tried to instill some confidence, you know, reta into the plan. 0:20:14.840 --> 0:20:17.159 And as we know, we think that the backing of 0:20:17.160 --> 0:20:20.840 the Danish government is a big endorsement for this equity increase. 0:20:21.119 --> 0:20:24.600 So we do think it will go ahead, but perhaps 0:20:24.600 --> 0:20:27.359 we will have to wait into early September where there 0:20:27.359 --> 0:20:29.120 will be an a GM and see where the share 0:20:29.160 --> 0:20:30.160 price is trading at them. 0:20:31.200 --> 0:20:34.919 Can you walk us through the president's arguments against offshore 0:20:35.200 --> 0:20:37.800 wind and then and then what supporters are saying, the 0:20:38.040 --> 0:20:39.879 pros and the hans against it? 0:20:41.280 --> 0:20:41.560 Sure? 0:20:41.600 --> 0:20:45.760 So, yeah, the administration has flagged that there are several 0:20:45.800 --> 0:20:49.840 issues with wind development in general. Firstly that it could 0:20:49.840 --> 0:20:54.879 impact the environment for whales, so that it could actually 0:20:54.960 --> 0:20:59.040 hurt whales, that birds could fly into the wind blades, 0:20:59.119 --> 0:21:02.000 and and then on the other on the other side 0:21:02.000 --> 0:21:05.200 of or on shore, there's also a community resistance. There's 0:21:05.200 --> 0:21:08.359 been there's been a few protests actually saying that that 0:21:08.400 --> 0:21:12.879 the offshore wind doesn't look good on the horizon. So 0:21:12.960 --> 0:21:17.000 these are these are several things. But but again or 0:21:17.000 --> 0:21:19.200 State actually had all the permits for for for this, 0:21:19.560 --> 0:21:23.360 for this farm to go ahead, and several studies actually 0:21:23.840 --> 0:21:28.080 you know, countering the impact of these of this offshore 0:21:28.080 --> 0:21:31.960 wind farms versus their benefit. Offshore wind has been a 0:21:32.080 --> 0:21:35.880 niche technology in in the US is still a nascent industry. 0:21:36.200 --> 0:21:37.760 It's a bit more advanced in Europe, but in the 0:21:37.840 --> 0:21:40.080 US we still have only a handful of megawats. 0:21:40.680 --> 0:21:43.280 But still it's it's an important part of the energy mix. 0:21:43.359 --> 0:21:47.400 It will help uh decarbonize the economy, will help add 0:21:47.640 --> 0:21:52.040 more electrons into the grid and avoid using more expensive gas. 0:21:52.280 --> 0:21:54.879 And in the time we have left, Patricio, can you 0:21:54.920 --> 0:21:58.840 talk to us a little bit about Orsted's competition, their 0:21:58.960 --> 0:22:03.040 rivals in this space and what this possible setback for 0:22:03.119 --> 0:22:06.080 them might mean for the competition. Is this, you know, 0:22:06.320 --> 0:22:08.640 actually an advantage does it give them an advantage in some. 0:22:08.600 --> 0:22:13.160 Way, So perhaps outside of the US, I would say 0:22:13.160 --> 0:22:16.119 there there will be you know, there's possibly some silver 0:22:16.240 --> 0:22:20.440 linings for other competitors. We cover other companies like RWE, 0:22:20.920 --> 0:22:24.040