Speaker 1: This is Bloomberg Business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news as it happened. Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. Among the big headlines from
Speaker 1: this past week Tesla's Elon Musk taking a stake in Twitter.
Speaker 1: Figure that one out, Tim, Yeah, that was pretty surprising
Speaker 1: on Monday morning. And then we've got the perfect person
Speaker 1: to break down what that means to the world's richest
Speaker 1: man and of course the social media platform as well.
Speaker 1: Our conversation with Cathy Wood is coming up. Also ahead,
Speaker 1: the president of Mattel on the retail industry's new normal.
Speaker 1: We're still trying to figure out normal. I gotta say that.
Speaker 1: And also Oakview Groups CEO Tim Lwacky, he breaks down
Speaker 1: the company's big bet on Vegas. We're talking three billion dollars,
Speaker 1: so for some serious money there, ye. Plus our editor's
Speaker 1: roundtable profiles a GOP Senate hopeful who's going full Maga
Speaker 1: in a hotly contested and highly priced Pennsylvania primary running
Speaker 1: against Dr Oz. That's our domestic cover story story. I
Speaker 1: couldn't put down all of that to come. We begin
Speaker 1: with the war in Ukraine, now more than six weeks old.
Speaker 1: Russia is facing new international sanctions on the heels of
Speaker 1: apparent war crimes in town surrounding Kiev that were among
Speaker 1: the first targets of the invading Russian forces. In the meantime,
Speaker 1: companies with workers on the ground there are taking steps
Speaker 1: to hell. Andy Kurtzak is founder and CEO of Just Answer.
Speaker 1: It's a site that connects people with doctors, lawyers, vets, mechanics,
Speaker 1: and other experts seven and he's had more than two
Speaker 1: employees caught inside the war zone. They're all live and
Speaker 1: uh and doing as well they could possibly be doing
Speaker 1: in the situation that we're in. So all of our
Speaker 1: preparations have paid off. We've been asking to keep them
Speaker 1: all safe and so far it's working. And you in
Speaker 1: your notes you said that six of them are currently fighting,
Speaker 1: and those who are fighting are still being paid a salary. Yeah,
Speaker 1: so what we what we promised to them even before
Speaker 1: the war started, when we thought that this might happen.
Speaker 1: Was we'd pay them fifty percent of their salary in
Speaker 1: addition to the sellary they get for being in the military,
Speaker 1: and then we guarantee their jobs when they come back victory. Hey,
Speaker 1: and if we can take a step back, UM, and
Speaker 1: we're grateful that you've given us some time. What are
Speaker 1: you I mean, it's hard for any of us, UM,
Speaker 1: I think in terms of some of the atrocities that
Speaker 1: we're seeing in some of the news coverage of what's
Speaker 1: going on in Ukraine right now. What are you hearing,
Speaker 1: UM from your team members who are on the ground
Speaker 1: in Ukraine, UM, hearing pretty much what you're seeing in
Speaker 1: the news, which is it's dreadful. It's terrible. I mean
Speaker 1: that that that seeing the bodies and the torture and
Speaker 1: the reality now that they've taken back some of their
Speaker 1: territories near Kiev is just awful, I mean, and they're
Speaker 1: horrified for those who the rest of the world is.
Speaker 1: For those that have stayed on the ground, um, and
Speaker 1: decided not to leave Ukraine, why is that? Well, so
Speaker 1: a few reasons, I mean, So we have of the
Speaker 1: two eight now employees that we have in Ukraine, thirty
Speaker 1: nine of them have We've been able to get them out,
Speaker 1: but the rest either they can't get out because of
Speaker 1: there are men between eighteen and sixties against the law
Speaker 1: for that that leave the country. And then we've got
Speaker 1: people that that you know, maybe their spouse or their
Speaker 1: their family members are stuck there and so they don't
Speaker 1: want to leave either. So some of the women are
Speaker 1: staying by the side of the men that are forced
Speaker 1: to stay in Ukraine. And then we've even got like
Speaker 1: what the woman that leads their office in Ukraine, her
Speaker 1: son just turned eighteen, so he can't leave even so
Speaker 1: she's not leaving her son behind. What's the message that
Speaker 1: that you want to send to other people in Silicon Valley,
Speaker 1: other Americans who are here in the United States, and
Speaker 1: really just just watching this play out. I mean, I
Speaker 1: think a lot of people have this feeling that, well, Okay,
Speaker 1: the government's doing what it can do. There's only so
Speaker 1: much I can do. You know. The first thing is
Speaker 1: that this aspects all of us. This is not some
Speaker 1: small skirmish in Eastern Europe. This is about democracy and
Speaker 1: about freedom and East versus West. This is everything that
Speaker 1: we worried about during the Cold War. It's actually happening now.
Speaker 1: And you know, this aspects all of us, and so
Speaker 1: we all need to do our part to help. You know, Andy,
Speaker 1: I do wonder too, and obviously you're doing everything and
Speaker 1: anything you can to help UM, your team that are
Speaker 1: there in Ukraine. How do you though our audience a
Speaker 1: business investing audience as well, obviously caring though about the
Speaker 1: humanitarian aspect. But when you look at the market over
Speaker 1: in Europe, you know, will this ultimately lead to kind
Speaker 1: of a business rethink about exposure, whether it's in Ukraine,
Speaker 1: whether it's Russia, Like, how what's what's the what is
Speaker 1: it the longer lasting UM strategy that stays with us
Speaker 1: because of this? Yeah, so we've already seen lots of
Speaker 1: companies boycotting Russia and hopefully more will continue to do that.
Speaker 1: And you know, as this this goes on, what my
Speaker 1: hope is that companies will not just think about boycotting
Speaker 1: Russia but also buying Ukrainian goods and services. I mean,
Speaker 1: this war is about Russian's aggression and bombs and tanks,
Speaker 1: but it's also about the economy and sanctions, and we
Speaker 1: can all do a part to help the Ukrainian side
Speaker 1: of this. And so that's what just answers trying to
Speaker 1: do and I hope any other companies will do it
Speaker 1: as well. Andy, you and your family are actually planning
Speaker 1: to go to the border of Ukraine. This is a
Speaker 1: mission to deliver medical aid, body armor, laptops and more. Um,
Speaker 1: you're taking your kids? Why why is this important to you? Well, so,
Speaker 1: when my family and I got together a few weeks
Speaker 1: ago and we're deciding what we wanted to do for
Speaker 1: spring break. You know, normally we would go to Hawaii
Speaker 1: when my mom lives and we love. We just couldn't
Speaker 1: dare to go somewhere fun for spring break when our
Speaker 1: friends and colleagues and the people of Ukraine are suffering
Speaker 1: so much, And so we got together the family, and
Speaker 1: we decided that we wanted to go and help. Is
Speaker 1: there a message in terms of the governments that are
Speaker 1: out there, who have already imposed a lot of certainly
Speaker 1: economic and business sanctions, as you mentioned, a lot of
Speaker 1: companies pulling out. Um, what more do you think should
Speaker 1: be done at this point? I mean they should continue
Speaker 1: to escalate the sanctions. They should continue to send UM
Speaker 1: military UH equipment and any humanitarian supplies as well. So
Speaker 1: there's a lot more to be done. I mean, they've
Speaker 1: got a lot of people in Ukraine that are ready
Speaker 1: and willing to fight, but they need the supplies in
Speaker 1: order to maintain this this war and to and to
Speaker 1: beat back Russia and for democracy. They're fighting for our
Speaker 1: democracy just as much as their own. That was Andy Kurtzig,
Speaker 1: He's founder and CEO of Just Answer. We wish he
Speaker 1: and his family well as they had the Eastern Europe
Speaker 1: to help his employees and take part in the broader
Speaker 1: humanitarian relief efforts in the region. Coming up next, our
Speaker 1: Editors Roundtable spotlights a former Ray Dalio disciple who's looking
Speaker 1: to make waves in the political world by taking a
Speaker 1: page from former President Donald Trump's playbook. You're listening to
Speaker 1: Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes Tim Stinovik
Speaker 1: from Bloomberg Radio. Our domestic cover story in the magazine
Speaker 1: was also a Bloomberg Big Take and among the most
Speaker 1: read articles on the Bloomberg terminal this past week. I
Speaker 1: gotta say to him, I started reading. It was the
Speaker 1: first thing I read that morning, and I just couldn't stop. Yeah,
Speaker 1: I had the same experience with it. I mean anything
Speaker 1: that Josh writes, it's just fantastic. It's a profile of
Speaker 1: David McCormick, formerly president of the world's biggest hedge fund,
Speaker 1: Bridgewater Associates. He's now running for a Senate seat in Pennsylvania,
Speaker 1: and well, people who know him, they're not surprised by
Speaker 1: his political ambitions. Some of his rhetoric is raising eyebrows. Yeah, indeed,
Speaker 1: So why is the one time champion of diversity and
Speaker 1: inclusion now going full maga. Well to find out, we
Speaker 1: turned to our editors round Table. Bloomberg. Business Week National
Speaker 1: correspondent Josh Green wrote the piece He joins us along
Speaker 1: with the editor of Business Week, Jill Webber. Just a
Speaker 1: couple of months ago, David McCormick was the CEO of Bridgewater,
Speaker 1: which is the world's largest hedge fund, and that means
Speaker 1: he was basically under Ray Dalio. Many people probably more
Speaker 1: familiar with Ray Dalio than David McCormick. But in you know, January,
Speaker 1: when he announced that he was gonna be running for
Speaker 1: the Senate seat in Pennsylvania. Uh, it basically has meant
Speaker 1: that there's this has become the hot race that everyone
Speaker 1: is starting to watch um the election. This is the primary, right,
Speaker 1: and we'll see who emerges victorious in May. Um. That's
Speaker 1: again just the primary, but already it is shaping up
Speaker 1: to be the most expensive primary in U. S. Senate history. Uh.
Speaker 1: And then it pits him against doctor Oz is the
Speaker 1: other kind of front runner. So you have David McCormick
Speaker 1: hedge fund background, who's gone full MAGA versus Oz, who
Speaker 1: everyone knows from you know, his days as America's doctor
Speaker 1: from Oprah. Uh So, So, Josh, let's talk about McCormick
Speaker 1: because this transformation from hedge fund CEO to MAGA has
Speaker 1: taken a lot of people who worked with him in
Speaker 1: in finance and at Bridgewater very much by surprise. Yeah,
Speaker 1: you know, it's funny. It's a political reporter, you know.
Speaker 1: I often see candidates and people sort of gradually switched
Speaker 1: positions and kind of change their profile. I've never seen
Speaker 1: anything like what David McCormick has done, going from CEO
Speaker 1: of the world's largest hedge fund. You know, a guy
Speaker 1: who fits in comfortably at Davos um and in the
Speaker 1: hedge fund world, transform himself, as I say in the piece,
Speaker 1: faster than Clark cannon a phone booth into a China bashing,
Speaker 1: uh immigrant bashing, pro Trump uh maga acolyte. But McCormick
Speaker 1: has concluded, I think correctly that if you want to
Speaker 1: win office in a Republican primary, this is still Donald
Speaker 1: Trump's party and you need to demonstrate your allegiance to
Speaker 1: Donald Trump. So it come as a shock to a
Speaker 1: lot of his former colleagues from the hedge fund world,
Speaker 1: who know him as this urbane guy with a PhD
Speaker 1: from Princeton. I have to say one of my favorite lines,
Speaker 1: I guess there's someone you talked to who worked with
Speaker 1: McCormick who asked, is Connecticut Dave McCormick the real one?
Speaker 1: Or is Pennsylvania Day McCormick the real one? Or is
Speaker 1: the real Dave McCormick a chameleon, will be whatever he
Speaker 1: needs to be to succeed. I mean, I feel like
Speaker 1: this is what politics have become, especially if you're playing
Speaker 1: with the Republican Party. Right, they're all kind of cow
Speaker 1: towing still Josh to Donald Trump. Yeah they are. I
Speaker 1: mean McCormick is fascinating on so many levels. You know,
Speaker 1: as you said, he lived in uh, you know, Bridgewater
Speaker 1: is based in Westport, Connecticut, and for the last ten years,
Speaker 1: you know, he's been this this friendly, widely respected hedge
Speaker 1: fund manager. But then he moved to Pennsylvania in order
Speaker 1: to run for the Senate seat, and you know, has
Speaker 1: created this entirely different persona. Uh. You know, to some level,
Speaker 1: when politicians run, there's a little bit of an artistice there.
Speaker 1: But his transformation has been so extreme that legitimately shocked
Speaker 1: a lot of people that I talked to who kind
Speaker 1: of thought they knew him, and now we're wondering, like,
Speaker 1: you know, who is the real guy here. But I
Speaker 1: think on another level, it's pretty transparent what's going on.
Speaker 1: You know, there's a there's a school of thought amongst
Speaker 1: some Republican Mitch McConnell, the Senate Minority leader from Kentucky, especially,
Speaker 1: is trying to push the idea that the Republican Party
Speaker 1: is moving beyond Trump, that Trump's Trump's power has faded,
Speaker 1: his time has passed. And I think the Republican Senate
Speaker 1: primary and McCormick's example in particular, shows that that is
Speaker 1: simply not the case. That if that, if you want
Speaker 1: to win election, all of these guys, including doctor Oz,
Speaker 1: who I spent some time with for the piece. Have
Speaker 1: concluded the way to get elected is to demonstrate your
Speaker 1: allegiance to Trump. Dr as another guy who spent years
Speaker 1: in Pennsylvania. Right, I'm being santastic. We just want to
Speaker 1: know where you caught up with him. Well, I mean
Speaker 1: that That's one of the weirder turns in this piece was,
Speaker 1: you know, Oz doesn't like to talk to national reporters, um,
Speaker 1: but I decided to go hang out with him get
Speaker 1: a flavor of his campaign. Anyway, showed up early to
Speaker 1: a campaign event in Bluebell, Pennsylvania, and I wandered in
Speaker 1: the men's room h and low and behold, Dr Oz
Speaker 1: is the only guy in there. So uh, seeing the
Speaker 1: serendipitous opportunity, I introduced myself. I said, I was working
Speaker 1: on a profile on McCormick, and Oz right there in
Speaker 1: the men's room just started fulminating about McCormick and Bridgewater
Speaker 1: and head fund guy, I should say. Dr Oz, who's
Speaker 1: surprisingly literate and all things fine and he had a
Speaker 1: degree from the Wharton School, was frustrated that that McCormick
Speaker 1: has managed to get away with this transformation to the
Speaker 1: degree that he has because polls show there haven't been
Speaker 1: a lot of them, but the most recent poll I
Speaker 1: saw a show that McCormick is actually leading this primary
Speaker 1: race over oz Um. So it's an interesting contrast of
Speaker 1: of of styles and backgrounds, but they're all seeking to
Speaker 1: basically be the same person, and that is, you know,
Speaker 1: the candidate that Donald Trump decided to endorse, because I
Speaker 1: think that will be if it happened, that'll be the
Speaker 1: decisive factor in this in this primary rate. So you
Speaker 1: know where is Trump in this. He's he's been quiet
Speaker 1: so far. If he does come out in support of someone,
Speaker 1: what do you think happens, what unfolds from there? Well,
Speaker 1: it's interesting. The Washington Post reported on Wednesday that McCormick
Speaker 1: is actually down in mar A Lago trying to win
Speaker 1: over Trump's endorsement. So so clearly, you know, McCormick is
Speaker 1: trying to close the deal, as as they would say
Speaker 1: in the hedge fund world. Whether whether or not he does, though,
Speaker 1: it is kind of uncertain. Before McCormick and os got
Speaker 1: in the race, there was another leading Republican candidate who
Speaker 1: Trump did endorse, a guy named Sean Parnell, who wound
Speaker 1: up having to leave the race in November after allegations
Speaker 1: of spousal and child abuse. UM McCormick won his endorsement
Speaker 1: campaigned with him. That was taken by a sign uh
Speaker 1: from some people in Trump World. In Pennsylvania Republican politics.
Speaker 1: You know, maybe Trump will lean in that direction, but
Speaker 1: it's Trump and you just never know until he decides.
Speaker 1: Often he decides things on a whim. But both candidates,
Speaker 1: as I say, if he's Oz is OZ has the
Speaker 1: support of Melania Trump, so he's not without his his
Speaker 1: advocates in Trump World. But until Donald Trump makes up
Speaker 1: his mind, I think it's wide open race. So much drama,
Speaker 1: and yet this is all for a primary, Josh. So
Speaker 1: we're gonna We're gonna see who Republicans pick. What does
Speaker 1: it look like on the other side of the aisle
Speaker 1: On the Democratic side, there two candidates running, Connor Lamb
Speaker 1: or moderate Congressman John Setterment big early blue color lieutenant governor.
Speaker 1: Who is about is sharp a contrast and personality and
Speaker 1: style as you could possibly have um with the CEO
Speaker 1: of Bridgewater. That was Bloomberg Business Week National correspondent Josh Green,
Speaker 1: along with the editor Joel Webber, on this week's domestic
Speaker 1: cover story. We're gonna have more from our editor's roundtable
Speaker 1: in just a bit. Coming up next though, on Bloomberg
Speaker 1: Business Week, why Kathy Wood thinks Elon Musk's newsteak and
Speaker 1: Twitter could portend to shake up in the c suite.
Speaker 1: We'll speak with the Arc invest founder, ce IO and CEO.
Speaker 1: This is Bloomberg Broadcasting from the financial capital of the world,
Speaker 1: Bloomberg eleven oh in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one oh six one to San Francisco,
Speaker 1: Bloomberg nine sixty to the country Sirius XM Chado one
Speaker 1: nine team and around the globe the Bloomberg Business app
Speaker 1: and Bloomberg Radio dot com. This is Bloomberg Business Week. Well,
Speaker 1: big story this week. It was all over Twitter, it
Speaker 1: was everywhere. It was all about Elon Musk's investment in Twitter,
Speaker 1: taking a steak, so called passive steak, of more than
Speaker 1: nine percent in the platform. Well, our Innvest Management has
Speaker 1: large positions in both Tesla and Twitter. Cathy Wood is
Speaker 1: the founder, CEO, and ce IO of the company, and
Speaker 1: in our wide ranging conversation, we start with her take
Speaker 1: on Musk's big move, especially in light of his friend
Speaker 1: Jack Dorsey's recent departure. He's certainly making a statement, and
Speaker 1: it's a statement about censorship. He he doesn't agree with censorship. UH.
Speaker 1: For as smooth functioning democracy as he has tweeted, I
Speaker 1: believe uh and so I think he's sending a strong
Speaker 1: signal to the new CEO. UH. And I I also
Speaker 1: know there's some controversy about why Jack left having to
Speaker 1: do with this new CEO. So a few messages there.
Speaker 1: Have you talked to Ellen at all about it? No?
Speaker 1: I have not, Okay, UM, and would you be buying
Speaker 1: either more Tesla or Twitter on the news? And let's
Speaker 1: throw on Tesla also having this record first quarter? Um,
Speaker 1: is this a catalyst to buy more of these shares
Speaker 1: in your view? On Tesla? We post our trades at
Speaker 1: the end of every day, so many will know that
Speaker 1: we have. It is the largest position in our flagship
Speaker 1: portfolio and in most portfolios where we hold it. But
Speaker 1: we have been selling recently because of how well it
Speaker 1: has done relative to the rest of the stocks in
Speaker 1: our portfolio. So it has levitated relative and uh and
Speaker 1: so it's been a good source of cash. We've taken
Speaker 1: profits and read employed them into other stocks that we
Speaker 1: thought were being unfairly penalized here. Uh, and I think
Speaker 1: one of the reasons for that is Tesla's in the
Speaker 1: indexes the broad based disease, and most of our other
Speaker 1: stocks are not. And uh, that's a big problem out
Speaker 1: there in terms of the way capital is being allocated
Speaker 1: these days in the public equity markets. Kathy, how much
Speaker 1: would Tesla have to fall for you to start buying again? Well,
Speaker 1: you know, even now, we're going to put out another
Speaker 1: model on geth hub In. I'm going to say within
Speaker 1: a week. Our last one is from about a year ago,
Speaker 1: and uh, you'll see from that model that our price
Speaker 1: expectation at that time was three thousand dollars. So there's
Speaker 1: still a lot of running room ahead for Tesla, But
Speaker 1: relative to the other names in our portfolio, even though
Speaker 1: that's a you know, a triple or nearly a triple,
Speaker 1: other names in our portfolio we believe will deliver much
Speaker 1: more than that over the next five years. Because they
Speaker 1: have been hit so hard, they're not in indexes, and
Speaker 1: so when there are risk off periods, traditional investors really
Speaker 1: diversify and sell our stocks as they move closer to
Speaker 1: their benchmarks. The benchmarks against which they are measured. So
Speaker 1: it's a great buying opportunity for us. I will say,
Speaker 1: I can't believe how long that buying opportunity lasted, from
Speaker 1: February of a year ago to a few weeks ago.
Speaker 1: But we think the concentration of our portfolios towards our
Speaker 1: highest conviction names will pay off. As for Twitter, I
Speaker 1: think there are some investors relieved that someone is willing
Speaker 1: to speak up and say, hey, you're going to ruin
Speaker 1: this platform if you continue to censor it, uh in
Speaker 1: somewhat uh random ways. Uh. So, so I think that's good.
Speaker 1: I will say, this could be setting up for another
Speaker 1: leadership change at Twitter. Uh, you never know, and so
Speaker 1: that will bring with it perhaps some uncertainly, uncertainty and dislocation,
Speaker 1: so especially as it relates to advertisers. So so we
Speaker 1: shall see, so cathy uncertainty potentially at Twitter, a potential
Speaker 1: leadership change. Who are the names that you would like
Speaker 1: to see lead Twitter? Who could do a great job
Speaker 1: in your opinion? Oh, I am not going to speculate
Speaker 1: on that, you know, And to be honest, we haven't
Speaker 1: thought about it that carefully. Uh, there are names flying around,
Speaker 1: but I wouldn't want to throw out anything there unless
Speaker 1: unless we felt very strongly uh so, we we will
Speaker 1: wait to see whose names are put forth, but whoever
Speaker 1: is put forth, and I'm not jumping to this conclusion automatically.
Speaker 1: I'm saying it's one of many possibilities. It will lead
Speaker 1: to be are Garwal changing the policy of the company
Speaker 1: to you know, really open source, uh the the censorship
Speaker 1: or or call people out on censorship, h or it
Speaker 1: will be a management change. I don't know what's going
Speaker 1: to happen at all. We are just getting started with
Speaker 1: Kathy Wood here on Bloomberg Business Week. We should know
Speaker 1: that the day after we talked to her, Tim Twitter
Speaker 1: announced that Elon Musk would also be taking a seat
Speaker 1: on the company's board. So to her point, didn't feel
Speaker 1: very passive, and it doesn't. It's not playing out that way. Yeah,
Speaker 1: some really pression comments from her. I mean this is
Speaker 1: literally hours after our interview that big move came from
Speaker 1: Twitter CEO. It was not a passive investment, as Kathy
Speaker 1: would correctly predicted. Carol. When we come back, we're going
Speaker 1: to get her take on the broader social media landscape,
Speaker 1: putting money to work in China and the big problem
Speaker 1: that she sees with passive index investing. Yeah, great paper
Speaker 1: that they put out in social media on that. You're
Speaker 1: listening to Bloomberg Business Week. This is Bloomberg. You're listening
Speaker 1: to Bloomberg Business Week with Carol Messer and Bloomberg Quick
Speaker 1: Takes Tim Ston from Bloomberg Radio. Let's get right back
Speaker 1: to our interview with Kathy Wood. We already talked about
Speaker 1: Elon Musk's big bet on Twitter. She weighed in on that.
Speaker 1: So what about the other big players in the social
Speaker 1: media space? What does she think is she making any
Speaker 1: bets there? Tim Well one part two of our conversation,
Speaker 1: the Arc invest founder, CEO and ce IO tells us
Speaker 1: why she's not yet ready to pour money into those companies.
Speaker 1: Carol and who's winning the fight for more eyeballs? I
Speaker 1: think what's happening the ground is shifting underneath social media.
Speaker 1: I don't think anyone understood until Facebook reported or gave
Speaker 1: guidance for the first quarter how provocatively disruptive uh TikTok
Speaker 1: had become. I mean, I know I've seen my children
Speaker 1: and and and their generations spend a lot more time
Speaker 1: on TikTok and and wondered, you know, how how would
Speaker 1: this impact Facebook? But I also know that there's a
Speaker 1: huge advertising shift from linear TV to so shal So
Speaker 1: you have those two opposing forces. While it appears that
Speaker 1: TikTok is being much more disruptive than we thought, and
Speaker 1: not just Facebook, but Netflix has talked about it as well.
Speaker 1: This is competition for the consumer's time. Uh, And so
Speaker 1: I think again, the ground is shifting. And if you
Speaker 1: think about it a Facebook, a Facebook, When you think
Speaker 1: about Instagram and Facebook itself, it's all about me, me, me,
Speaker 1: It's you know, I am central. If you think about TikTok,
Speaker 1: it's about how can I entertain you. It's a completely
Speaker 1: different d n A. So I'm not so sure that
Speaker 1: that Reels is going to make it the way that
Speaker 1: Stories did. Stories was about me, me, me, Facebook God,
Speaker 1: that TikTok is a completely different animal here. Hey, Kathy,
Speaker 1: gotta ask you about Chinese stocks. You and I have
Speaker 1: certainly had conversations, and you've made investments in, you've gotten out,
Speaker 1: you've got you know, and I just want to know
Speaker 1: where you are in Chinese stocks right now because we've
Speaker 1: seen quite a bounce back in the last couple of
Speaker 1: days still down a lot. If I look at something
Speaker 1: like the Nasdack Golden Dragon, would you be committing new money?
Speaker 1: Do you have faith in Chinese authorities actually making Chinese
Speaker 1: comping much more transparent for U S investors, especially when
Speaker 1: it comes to financially sensitive information. Well, I think that
Speaker 1: the government is showing that at the margin, it's going
Speaker 1: to make moves, but they're going to be marginal moves.
Speaker 1: In this case, I think there are three years to
Speaker 1: um to comply with our audit requirements. Uh. So they're
Speaker 1: they're they're talking that they're they're they're they're they're talking,
Speaker 1: and so we'll see what happens. Uh. You know, common
Speaker 1: prosperity to us means that profit margins are high profit
Speaker 1: margins are not a good thing, and so we have
Speaker 1: steered away from anything with a high profit margin. Uh.
Speaker 1: And we have focused on those companies and we've we've
Speaker 1: in our flagship strategy, we're out completely. We've shifted towards
Speaker 1: something like SE Limited in Singapore, but in a more
Speaker 1: specialized strategies. We're looking for very low margin companies that
Speaker 1: are consistent with common prosperity. Uh, you know, really distributing
Speaker 1: goods and services into lower tier cities, for example, or
Speaker 1: providing transportation, so expung uh neo, we have bought their
Speaker 1: very low margin. It's all about next gen transportation in
Speaker 1: a world where you know, human driven cars are are
Speaker 1: still relative to the eligible drivers, still very low percentage.
Speaker 1: So uh, We're we're interested there JD logistics in the
Speaker 1: logistics area using drones, but lots of innovation. They're doing
Speaker 1: a lot again pushing into the lower tier cities, So
Speaker 1: we're we're a bit gun shy. We don't think that
Speaker 1: the Chinese government is thinking very much about treating capital well,
Speaker 1: but we know there are huge opportunities consistent with common prosperity,
Speaker 1: and so we will have an allocation. But until things
Speaker 1: change dramatically meaning more of a friendly to capital, we'll
Speaker 1: probably keep that exposure pretty low. Hey, Kathy, one thing,
Speaker 1: I mean, you and your team are very good about research, right,
Speaker 1: and you open it up to the world and you
Speaker 1: want to have these conversations. I am curious when we
Speaker 1: look at the world specifically what's going on in Ukraine
Speaker 1: and Russia. China's relationships specifically with it seems like wanting
Speaker 1: to continue some kind of relationship with Russia. Um, how
Speaker 1: is that problematic do you think for investors going forward
Speaker 1: and ultimately Chinese companies? And is there kind of a
Speaker 1: rethink on what our global markets ultimately will be like
Speaker 1: longer term? You are a longer term think individual. Yes, yes, Well,
Speaker 1: one thing I do know about China is uh, it's
Speaker 1: a survivor and it really does want to be um,
Speaker 1: it really wants to be in the lead in terms
Speaker 1: of innovation. So we, given our sole focus on disruptive innovation,
Speaker 1: are not going to dismiss China. But these geopolitical strains
Speaker 1: are not going to be good again, it's capital unfriendly.
Speaker 1: We do know that innovation solves problems, and starting with COVID, uh,
Speaker 1: we we we we had a lot of problems. Now
Speaker 1: with the Ukraine Russia, the Russian invasion of Ukraine, we
Speaker 1: have a lot more problems, uh. And so we think
Speaker 1: innovation generally is going to help solve those problems. And
Speaker 1: so we're happy that the market is now turning its
Speaker 1: sites back to innovation being a good thing and non
Speaker 1: index stocks being uh an area of great opportunity. So, Kathy,
Speaker 1: you know one thing I want to get to and
Speaker 1: this is something you guys have been writing about over
Speaker 1: at ARC and that is passive versus active. When it
Speaker 1: comes to indexing, there has been, as you know, so
Speaker 1: much money going into passive indexing UH, and investments not
Speaker 1: a good thing ultimately. Do you think investors in that
Speaker 1: world are going to ultimately be burned? One of the
Speaker 1: reasons I founded our invest is I believed that, taken
Speaker 1: to an extreme, which is where I think it is now,
Speaker 1: that index based investing was going to lead to the
Speaker 1: most massive misallocation of capital in history. And I think
Speaker 1: that's happening. And you saw what happened to our pure play,
Speaker 1: innovation based strategy over the past year. When fears about
Speaker 1: inflation and interest rates picked up. There was risk off UH,
Speaker 1: and this movement back to broad based benchmarks and other
Speaker 1: benchmarks and away from our strategies. And so we saw
Speaker 1: a stock like in vite Go from sixty dollars to
Speaker 1: seven or eight dollars in the span of a year. UM.
Speaker 1: This this doesn't make any sense, UH. We have in
Speaker 1: our portfolio and we have used this risk off period
Speaker 1: to concentrate towards our highest conviction names. We've gone in
Speaker 1: the flagship portfolio from fifty eight names I believe down
Speaker 1: to thirty five, which is essentially saying, Okay, we're not
Speaker 1: so sure that these these twenty two or twenty three
Speaker 1: stocks are going to be UH the as a pure
Speaker 1: play of disruptive innovation as we are that these other
Speaker 1: thirty five are. And of course Tesla is UH the
Speaker 1: leader of the gang there. So UM, yes, we've we've
Speaker 1: been UM, we've been surprised that it UH the risk
Speaker 1: off lasted that long, that the shift into passive and
Speaker 1: indexed lasted that long, but it set us up for
Speaker 1: some great opportunities here. Um, as we have so many
Speaker 1: problems to to solve, and innovation is the right way
Speaker 1: to solve those projects. Cathy, what would you say to
Speaker 1: somebody who's listening right now who says, study after study
Speaker 1: that they read shows that the on average, the active
Speaker 1: manager does not outperform the benchmarks, especially after fees year
Speaker 1: in and year out. Yes, well, we certainly have our
Speaker 1: Our time horizon is a five year investment time horizon,
Speaker 1: and I would agree with you. I think the vast
Speaker 1: majority of active managers have underperformed. We have significantly outperformed
Speaker 1: over that five year period at a compound annual rate.
Speaker 1: UH and I think one of the reasons there is
Speaker 1: under performance is this benchmark hugging behavior. So they they
Speaker 1: they are very close to their benchmarks and then they
Speaker 1: and and that to me is is as close to
Speaker 1: passive investing as you can get, and then they charge
Speaker 1: a fee for it. We are not in those indexed stocks.
Speaker 1: We are really focused on the future, not on the past.
Speaker 1: Indexes are where they are because of what has happened historically.
Speaker 1: Uh and the those at the highest end of the
Speaker 1: index is the largest positions are there because of past performance.
Speaker 1: If we are right, we are facing the most uh,
Speaker 1: the most disrupted innovation in the history of the world.
Speaker 1: Five innovation platforms genomic sequencing, adaptive robotics, energy storage, artificial intelligence, gens,
Speaker 1: blockchain technology. They involve fourteen technologies and there are all
Speaker 1: kinds of convergences between and among them. So they're setting
Speaker 1: up for explosive growth opportunities, but they're not being well
Speaker 1: followed well research. That's one of the reasons we do
Speaker 1: publish our research. We want to um We want to
Speaker 1: educate investors, but not just investors, we want to educate
Speaker 1: parents and grandparents. Here how here's how the world is changing.
Speaker 1: Make sure to guide your children or your grandchildren towards
Speaker 1: the right side of change so they don't end up
Speaker 1: working for these companies who are going to be completely disrupted.
Speaker 1: So I think many people you know a case in point,
Speaker 1: and I don't think Facebook is going to necessarily be
Speaker 1: a bad stock going forward, but the fact that a
Speaker 1: disruptor like Facebook could be disrupted so quickly is an
Speaker 1: important case in point. That was Cathy would have our
Speaker 1: invest always great to catch up with her. You can
Speaker 1: access the entire interview. Find that on our podcast feed
Speaker 1: at Bloomberg dot com or wherever you get your podcasts.
Speaker 1: That wraps up the first hour of the weekend edition
Speaker 1: of Bloomberg Business Week from Bloomberg Radio. I'm Carol Masser
Speaker 1: and I'm Tim Stanabek. Ahead in our next hour, oak
Speaker 1: View Group is rolling the dice on Las Vegas in
Speaker 1: a big way, to the tune of three billion dollars.
Speaker 1: CEO Tim light Wacky tells us what he sees on
Speaker 1: since Cities Horizon, hoping an NBA team will be part
Speaker 1: of that too. Write years in the making, right it
Speaker 1: takes a while. Plus, our Business Week team spotlights a
Speaker 1: fintech startup that seven hundred thousand people think is ready
Speaker 1: to revolutionize banking in Black America. It's an incredible read.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week inside from
Speaker 1: the reporters and editors who bring you America's most trusted
Speaker 1: business magazine, plus global business, finance and tech news. As
Speaker 1: it happened, Sloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovik on Bloomberg Radio. Hi, I'm Carol
Speaker 1: Messer and I'm Tim Stanovic. Blady ahead in our second
Speaker 1: hour of the weekend edition of Bloomberg Business Week, including
Speaker 1: a few groups CEO Tim Lwecky on his firm's Vegas venture,
Speaker 1: plus Mattel President and CEO Richard Dixon on supply chain
Speaker 1: sustainability and the toy making giants fight against inflation. Are
Speaker 1: you also ready for a Barbie movie? Um? Yeah, I
Speaker 1: think Whether I am ready or not, it's coming. Come on,
Speaker 1: just go with it. Just I mean, there's some big
Speaker 1: names in this movie. There is. It's incredible, al right.
Speaker 1: First up this hour though a story featured in this
Speaker 1: week's issue of Bloomberg Business Week, all about the most
Speaker 1: hyped startup in Black America, you might call it, and
Speaker 1: it is called Greenwood. Bloomberg News retail reporter Jordan Holman
Speaker 1: co wrote the piece with Brett Pulley. Jordan is actually
Speaker 1: up here in our New York City studios from Atlanta,
Speaker 1: taking part in this week's editor's round Table along with
Speaker 1: Bloomberg Business Week editor Joel Weber. And this is all about,
Speaker 1: you know, the future with with the future of banking
Speaker 1: could look like, right, and to be an app on
Speaker 1: a phone is sort of what a lot of banks
Speaker 1: aspired to do. What's unique about Greenwood is that post
Speaker 1: George Floyd, they the founders behind this recognized that there
Speaker 1: are just a huge group of Black Americans, Latin X
Speaker 1: Americans who lack access to black owned, minority owned banking.
Speaker 1: And they realized that maybe this, this route through Neil Banking,
Speaker 1: even though I don't think maybe the founders necessarily knew
Speaker 1: any of this at the time, could basically open up
Speaker 1: financial market, the financial market um and allow them to
Speaker 1: tap into a huge group of people who have never
Speaker 1: really been catered to in this way. So Greenwood was
Speaker 1: basically formed, and then everyone's been waiting for it ever since.
Speaker 1: Seven hundred thousand people have been on this waiting list
Speaker 1: and just recently, slowly we're starting to see some of
Speaker 1: them get access. So Jordan's who who are the people
Speaker 1: behind this vision and and how have they mass mastered hype? Right,
Speaker 1: that's such a great description. So the founders are Paul Judge,
Speaker 1: he comes from the tech world, um. And then you
Speaker 1: have Ryan Glover who's also UM entertainment and they both
Speaker 1: live in Atlanta. So like you said, they are not
Speaker 1: from the finance world at all. But what they really
Speaker 1: do know is culture and they know how to make content.
Speaker 1: And so for all of the seven hundred thousand people
Speaker 1: who signed up not knowing what this app was yet
Speaker 1: having this name Greenwood, which obviously has these historical residencies, um,
Speaker 1: when you think about the massacre and touls Uh, they
Speaker 1: just know how to market this really well. And they
Speaker 1: brought in civil rights icon Andrew Young, you have Killer Mike,
Speaker 1: who is for the younger group. Um. So they've done
Speaker 1: just such a good job of building the hype. What's
Speaker 1: happening now is rolling out the product. What does that
Speaker 1: look like? Is it actually going to solve this racial
Speaker 1: wealth gap that is so entranced in the country. And
Speaker 1: then also will it provide. Um, will it like live
Speaker 1: up to what middle class black and Latino Americans want,
Speaker 1: which is this a banking service, super accessible that understands
Speaker 1: their needs, um, and that really speaks to them. I
Speaker 1: mean my question is will really be a bank? Right?
Speaker 1: And this has been the problem, like your story, just
Speaker 1: so getting into the fear that many Black Americans have
Speaker 1: had when trying to access the established bank community, which
Speaker 1: is increasingly or is has largely been run by white
Speaker 1: individuals that have kind of pushed them out. What I
Speaker 1: love about this piece is we do dive into the
Speaker 1: history about basically the horror of being a black person
Speaker 1: banking in America. And it starts all the way back
Speaker 1: at the end of the Civil War and was that
Speaker 1: civil rights movement, But it's so much longer than that.
Speaker 1: And there was Freedman's Bank, which, uh, the Congress enacted
Speaker 1: and said, oh, for the first time African Americans are
Speaker 1: earning wages, They're coming out of slavery, and so African
Speaker 1: Americans got really excited about the prospect of one earning money,
Speaker 1: saving it and hopefully building that generational wealth. But it
Speaker 1: was so mismanaged. This bank was run by white people. Um,
Speaker 1: you know, there's speculation all of these things, and so
Speaker 1: when a bubble happened, most of the depositors lost their money.
Speaker 1: And then you see and throughout the years it did
Speaker 1: not get better. There's redlining, there's all of this. So
Speaker 1: what Greenwood has the opportunity to be is a black
Speaker 1: owned bank or neo bank that is bringing in all
Speaker 1: of these important icons and saying, hey, we are for you,
Speaker 1: and we are rolling out content around financial literally see,
Speaker 1: and we're gonna make it fun. We're not you're not
Speaker 1: thinking about like going into a bank and maybe not
Speaker 1: being understood. But Jordan, what you do also is right
Speaker 1: about this tension that exists. Even though Greenwood has these ambitions,
Speaker 1: it's still working within a system that is dominated by banks,
Speaker 1: by what you describe as essentially white controlled banks, because
Speaker 1: it has to use another bank in order to provide
Speaker 1: its banking services. You write that the fintech is setting
Speaker 1: out to build a black powered banking system being funded
Speaker 1: by white controlled banks, and its services provided by another
Speaker 1: white controlled bank. Explain what's going on there, but also
Speaker 1: how Greenwood is trying to make it different. For sure,
Speaker 1: So as a neil bank, you are not a bank.
Speaker 1: You need to be ensured by fdi C Bank. And
Speaker 1: so when the founders went out, like at the very beginning,
Speaker 1: as they were trying to build this up there like
Speaker 1: it would be great to be backed by a black
Speaker 1: owned bank. But the reality in this country right now
Speaker 1: is that there's only about twenty black owned banks left
Speaker 1: in America just don't exist. Yeah, and they do not
Speaker 1: have the scale of the largest banks that we all
Speaker 1: probably bank with. And so when they were building the system,
Speaker 1: they realized they did have to work with the white
Speaker 1: owned bank because that is our financial system right now.
Speaker 1: So even though you know, they were trying to be revolutionary, Uh,
Speaker 1: one of the founders told us, the revolution is complicated.
Speaker 1: And so even they do have the Founders do have
Speaker 1: majority's share of it, but a lot of it, you know,
Speaker 1: white owned banks are involved. They are the investors. Um
Speaker 1: Greenwood is backed by Wells Fargo, JP, Morgan, Truest, all
Speaker 1: of those. And that's just the complicated reality of banking
Speaker 1: as a black American. That was Bloomberg News retail reporter
Speaker 1: Jordan Holman along with business Week editor Joe Weber. Check
Speaker 1: out the entire editor's roundtable. You can do that at
Speaker 1: business Week Dot com and also be sure to read
Speaker 1: our international cover story on social media's role in the
Speaker 1: French press eidential election. You're listening to Bloomberg Business Week.
Speaker 1: Coming up next Mattel's president on rising production costs and
Speaker 1: the company's next big growth play. And I wonder if
Speaker 1: that includes Barbie hitting the big screen. You made sure
Speaker 1: to get a question in there about Yeah, this is Bloomberg.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovik from Bloomberg Radio. We'll check out
Speaker 1: shares of toymaker Mattel. They have seen a double digit
Speaker 1: percentage rebound since falling to a six month low back
Speaker 1: in October. We often check in with the company's CEO,
Speaker 1: E Non Cries, and this week President and CEO Richard
Speaker 1: Dixon was here in the studio to map out Mattel's
Speaker 1: growth plans and supply chain strategy, including a recent move
Speaker 1: to double the number of its employees in Mexico. Part
Speaker 1: of the strong performance of our supply chain this year
Speaker 1: is attributable to our scale, our expertise, and are flexible model.
Speaker 1: We've spent the last several years through a capital light
Speaker 1: program consolidating our footprint geographically, We've re oriented much of
Speaker 1: our manufacturing footprint to be more flexible, and as you mentioned,
Speaker 1: recently expanded our facilities in Mexico, um and for a
Speaker 1: variety of reasons cost reduction, consolidation. Obviously, close to shore
Speaker 1: helps with shipping and speed to market um and in general,
Speaker 1: I think the supply chain for Mattel has been a
Speaker 1: competitive advantage. You know, while the world is dealing with
Speaker 1: incredible challenges both in supply chain issues inflation issues, I
Speaker 1: think the performance that we've had in our supply chain
Speaker 1: has really proven that it's a competitive advantage from Mattel.
Speaker 1: You guys were doing this prepad and Netmaic, weren't you.
Speaker 1: We've been working on this for several years. It's part
Speaker 1: of a capital light model, that's correct. How much of
Speaker 1: though the tensions the geopolitical this is one of the
Speaker 1: big macro rethinks that we're having right now about we're
Speaker 1: seeing it certainly the energy market, I mean energy oil
Speaker 1: obviously very important to plastics as we know, But how
Speaker 1: are you rethinking about kind of where you're getting things
Speaker 1: because you're like, you know what, geo politically we can't
Speaker 1: say globalization is going to cure all that helps us.
Speaker 1: How much of that is also at play in this
Speaker 1: that might make you do even more aggressive moves in
Speaker 1: terms of protecting that supply chain. It's a really important
Speaker 1: part of our strategic roadmap, and I think as you've
Speaker 1: seen over the last several years, by example, you know,
Speaker 1: through consolidation as well as geographically expanding our footprint, UM
Speaker 1: offsetting if you will, any reliability on any particular market whatsoever,
Speaker 1: and in fact UM opening up various different plants in
Speaker 1: different countries for the same brand gives us the flexibility,
Speaker 1: the nimbleness that we need UM to accommodate and to
Speaker 1: always keep the business moving despite political issues that may
Speaker 1: be arising in local markets. It's proven incredibly effective, particularly
Speaker 1: our performance in one We're in a quiet period currently,
Speaker 1: but you can see the performance in large part due
Speaker 1: to our our ability to effectively get product to consumers
Speaker 1: and retailers on time. So if there's a problem somewhere,
Speaker 1: it's very easy to say, Okay, plant number A, you've
Speaker 1: got problems plant number ERE, We're just gonna amp it up. Yeah. Well,
Speaker 1: I wouldn't say it's that easy, but certainly it's not easy,
Speaker 1: but you're not a CEO. We have incredible expertise that
Speaker 1: have been with a company of a very long time
Speaker 1: and added new talent as well, but strategically made a
Speaker 1: concerted effort over the last several years. So you know,
Speaker 1: we didn't have to react in real time because we
Speaker 1: were already moving strategically. But did you say when that happened,
Speaker 1: You're like, man, we're waiting ahead of the game because
Speaker 1: we would have had to do some shift. We we
Speaker 1: certainly felt confident in our strategy and in the plans
Speaker 1: that we had and executing bar none within the industry
Speaker 1: besting class. And I think that continues to be a
Speaker 1: strength of Mattel and we're building upon strength. Yeah, Richard,
Speaker 1: what about when it comes to rising commodities costs? This
Speaker 1: is something that affects every company, whether you know, not
Speaker 1: just companies that you know, our airlines or oil companies.
Speaker 1: But the price of of uh W t I is
Speaker 1: up more than thirty five percent just this year. Tell
Speaker 1: uses a lot of plastic you have to ship stuff.
Speaker 1: Uh how does that hit margins? Well? Look, uh, you know,
Speaker 1: cost factors have been you know a real issue in
Speaker 1: our business and in every business for that matter, and
Speaker 1: we've had a couple of years of significant inflation and
Speaker 1: we do this year is different. This year is to
Speaker 1: hate to tell you there's a lot of plastic and
Speaker 1: toys there are working on that too. We've got a
Speaker 1: lot of sustainability efforts in place, UM. But it looked
Speaker 1: through a combination of pricing UH and cost savings, we
Speaker 1: expect to exceed inflation over time UM and through higher
Speaker 1: prices or better manufacturing or lower There's not a silver bullet,
Speaker 1: right so I mean there there are pricing adjustments and
Speaker 1: strategies that will take place across our portfolio, and there's
Speaker 1: also cost savings as well that we've been also sharing
Speaker 1: and enjoying as part of our structural simplification plans. The
Speaker 1: two combined, if you will, many gate inflation to some
Speaker 1: degree and contribute to the margin expansion that we have
Speaker 1: UH shared over time. UM. Granted, we've we've spent a
Speaker 1: lot of time talking about the impact of inflation and
Speaker 1: supply chain, but as you can see from our results
Speaker 1: and from the guidance that we've given particularly in a
Speaker 1: quiet period right now, but from our two thousands to
Speaker 1: me on the side, again, as we take as we
Speaker 1: take strategic price increases and look for cost savings. The
Speaker 1: most important part of our consumer proposition is to make
Speaker 1: sure our consumers really do love and get the value
Speaker 1: and innovation that our toys provide. But you're confident that
Speaker 1: the consumer can handle price increases, that the consumer is
Speaker 1: willing to pay, that you have that pricing power at
Speaker 1: Mattel to raise those prices. I believe that our brands
Speaker 1: resonate with consumers around the world, and I think it's
Speaker 1: going to be um the innovation and the brand reputation
Speaker 1: and the quality that ultimately consumers judge uh and and
Speaker 1: jury in the in the toy industry. Where is the
Speaker 1: big growth Because we talk about you guys, I've talked
Speaker 1: with the folks at w W E. I mean you
Speaker 1: have these partnerships, these alliances. You have older collectibles n
Speaker 1: f T s I assume play into the older collector
Speaker 1: of Mattel brands content creation, Barbie movie, Like, when is
Speaker 1: that happening? Where's the real growth going forward? And answer
Speaker 1: it all in two minutes? Well, I think you have
Speaker 1: to stay, take a step back and look at our
Speaker 1: our strategic roadmap, which has really been to be an
Speaker 1: I P driven high performing toy companies, very Disney esque. Well,
Speaker 1: it's it's it's very Mattel. You know. We we have
Speaker 1: a portfolio of incredibly strong i P many of which
Speaker 1: as you mentioned, and there are a lot of brands
Speaker 1: within our portfolio that have you know, stood the test
Speaker 1: of time and could be revitalized. Masters of the Universe
Speaker 1: is a great example of that. A huge property in
Speaker 1: the eighties, ran dormant for decades and we brought it back. No,
Speaker 1: I didn't play with might might have missed my generation.
Speaker 1: I don't know. I don't know that. But anyway, it's
Speaker 1: back and it's it's arguably better than ever. Um. But
Speaker 1: I think that the growth strategy of tel is really
Speaker 1: to continue to expand our i P into verticals, digital
Speaker 1: gaming content and f t s as you mentioned. But
Speaker 1: is it the adult collector that's the real like, where's
Speaker 1: the growth come from? It's both, It's it's literally across
Speaker 1: the board. If you look at our performance, every category
Speaker 1: that we're in and we're in seven categories, all grew.
Speaker 1: We grew market share across the world. Our biggest most
Speaker 1: important franchise brands are all in growth mode. Barbie, Fisher, Price,
Speaker 1: Hot Wheels, American Girl, Thomas, the Tank Engine, our games portfolio,
Speaker 1: you know, single largest card game in the world. You know,
Speaker 1: we've done a lot of work. Were vital in our
Speaker 1: brands with the Mattel playbook that we take a lot
Speaker 1: of pride and innovation, cultural relevance and executional excellence have
Speaker 1: been the forefront of making our business successful. That's Mattel
Speaker 1: President and CEO Richard Dixon. By the way, Carol, I
Speaker 1: know you are pretty excited about that live action Barbie
Speaker 1: movie that's right now in production. You couldn't figure out
Speaker 1: where the set is, so I guess you're just go
Speaker 1: to TMZ to get the pics. I was hoping for
Speaker 1: a few clues. Is it, Ryan Gosling, Margot Robbie. Come on,
Speaker 1: it's gonna be a lot of fun. I gotta keep
Speaker 1: that stuff under wraps them so people like you don't
Speaker 1: show up on setting. All right, Still to come on
Speaker 1: Bloomberg Business Week. The cultural and demographic shift taking place
Speaker 1: as wealthy consumers you know where they're going. Well, we're
Speaker 1: not going to tell, but they are definitely leaving New
Speaker 1: York City. Okay, find out which southern market is reaping
Speaker 1: the benefits of the Big Apple Exodus. I think you
Speaker 1: can guess if you're a regular listener of this program.
Speaker 1: This is Bloomberg Broadcasting from the financial capital of the
Speaker 1: World Bloomberg eleven Frio in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one O six one to San Francisco,
Speaker 1: Bloomberg nine sixty to the country Sirius XM Chado one
Speaker 1: nineteen and around the globe the Bloomberg Business app and
Speaker 1: Bloomberg Radio dot Com. This is Bloomberg Business Week. Another
Speaker 1: story that was among our most read when it hit
Speaker 1: the Bloomberg Terminal takes us to Palm Beach, Florida and
Speaker 1: it's sizzling retail scene. It is the lead story in
Speaker 1: this week's Pursuit section Bloomberg News. Wealthy reporter Amanda Gordon
Speaker 1: co wrote the piece, and she explains that the coastal
Speaker 1: town is making the resort lifestyle feel more full time,
Speaker 1: thanks in part to a high end mall known as
Speaker 1: the Royal Point Siena Plaza. All these New York brands
Speaker 1: have opened there since the pandemic started, and what we
Speaker 1: find is that there's a sort of sense of community
Speaker 1: that you know, the mall culture has always helped foster
Speaker 1: you know, in the suburbs when they were first being developed.
Speaker 1: That's kind of the history of malls. And in this instance,
Speaker 1: there's this big boom post maybe post COVID or at
Speaker 1: least at the moment, and and this mall has become
Speaker 1: a hub for the sort of dynamism that's in the community. Well,
Speaker 1: I also think about the community in general, right, You
Speaker 1: know this firsthand because you've been going back and forth there.
Speaker 1: I mean, how many people all of a sudden have
Speaker 1: moved down there. And I feel like there's been kind
Speaker 1: of a juice in terms in terms of energy that's
Speaker 1: down there, right, a mix of kind of old money
Speaker 1: new money. Right, There's been a lot of movement and
Speaker 1: it's playing at it feels like in the retail sector
Speaker 1: as well. Yes, so there are in fact, while this
Speaker 1: mall has taken sort of become a hub for New
Speaker 1: York brands, uh, there are there's activity all over town
Speaker 1: where um, you know, vacancies are being filled and new
Speaker 1: shops are coming in. And one of the drivers of
Speaker 1: this is actually something we've probably talked about before, which
Speaker 1: is the New York restaurants and the fact is that
Speaker 1: although people are craving the new and special, especially if
Speaker 1: you have decided to uproot yourself from where you've been
Speaker 1: living and you're in a new community, you also crave
Speaker 1: the familiar, right and you also crave that sort of
Speaker 1: kinetic energy of running into people that you know. And
Speaker 1: and someone told me while I was reporting the story,
Speaker 1: it's not even what, it's who. It's the fact that
Speaker 1: when you go to this place and there's a lot
Speaker 1: of outdoor space, beautiful landscaping, and it's not kind of
Speaker 1: like fancy and and sort of in a form or
Speaker 1: daunting way. It's it's very informal, which is kind of
Speaker 1: like Palm Beach, but you run into people. It's like,
Speaker 1: as you write, a country club in some ways, and
Speaker 1: it serves as, uh, sort of a country club of sorts,
Speaker 1: especially at a time when well, people do things there
Speaker 1: that you're not allowed to do at country clubs, like
Speaker 1: actually have what business dinners? You're not allowed to do that.
Speaker 1: I didn't know that, uh. And also the waiting list
Speaker 1: of these country clubs are so long that these newcomers
Speaker 1: aren't going to be able to get in anytime soon. Yes,
Speaker 1: there is sort of a democratic nature to uh, to
Speaker 1: common spaces. It's not a public space, you know, it's
Speaker 1: not a town space like the park across the way. Um.
Speaker 1: But at the same time, you know, it's a it's
Speaker 1: a well groomed space that is welcoming. And Samantha David,
Speaker 1: who you know, had the idea to come in and
Speaker 1: revive this. This place actually great timing because it all
Speaker 1: got into place. Sant Ambrose came in before you know,
Speaker 1: in two thousand sixteen, so ahead of the pandemic. Basically,
Speaker 1: well if you think about it, right, Yeah, everything was
Speaker 1: set up, all the foundation was laid for this to happen.
Speaker 1: And one of the interesting things is that now they're
Speaker 1: now that they have sort of the basics down um
Speaker 1: and they have these galleries in from New York, so
Speaker 1: there's this different kind of cultural life going on. And
Speaker 1: Jeff Coon's was down there for his opening and by
Speaker 1: the way, his work sold for eight millions, So this
Speaker 1: is a mall where you know, a piece of art
Speaker 1: can be bought for eight million. Uh. But in any case,
Speaker 1: the restaurant that's going to be developed out of a
Speaker 1: now vacant building two hundred seats on the waterfront, it's
Speaker 1: actually going to be the only restaurant that's public um
Speaker 1: on the island because the other dining areas are in
Speaker 1: the clubs. So it's just adding an amenity, and it
Speaker 1: means that, you know, the Palm Beach might become more
Speaker 1: open in a way, right you do you feel like
Speaker 1: when you're when you've I've been down there just for
Speaker 1: work and stuff, and it's it does feel like it's
Speaker 1: the price of the clubs and it's just very exclusive
Speaker 1: and there isn't a lot of at least this is
Speaker 1: a few years ago, pre pandemic um, and this does
Speaker 1: feel like a very very different take. What is it doing?
Speaker 1: It just sounds like that it's revitalizing all kinds of
Speaker 1: retail space in the area. Yes, I mean there there
Speaker 1: are lots of other areas where you can shop. It's
Speaker 1: not that Palm Beach needs more retail, but I do
Speaker 1: think that we'll see it all being upgraded. I'm wondering
Speaker 1: about the sense of permanence that you got from the
Speaker 1: people you interviewed, the people you spoke to. Are these
Speaker 1: people moving from New York City to Palm Beach? Is
Speaker 1: this permanent? Well? One of the things that we note
Speaker 1: in the story is that people are getting younger, who
Speaker 1: are who are moving and they have kids. And you know,
Speaker 1: the enrollment since the pandemic started at the private school
Speaker 1: on the island is up thirty. So what I have
Speaker 1: learned from my interviews is that the people here, the
Speaker 1: people who have moved, love the fact that they can
Speaker 1: run over to the school and five minutes someone said,
Speaker 1: I don't have to go to Randall's Island to see
Speaker 1: a soccer game. You know, So there is the sense
Speaker 1: that there's less friction. That's Bloomberg News Wealth Team reporter
Speaker 1: Amanda Gordon read more on the Royal Point Sienna Plaza
Speaker 1: in the Pursuit section of the magazine. You're listening to
Speaker 1: Bloomberg Business Week, Still ahead, Why Oakview Group is betting
Speaker 1: big on Las Vegas. CEO Tim Lae Wacky joins us. Next,
Speaker 1: this is Bloomberg. You're listening to Bloomberg Business Week with
Speaker 1: Carol Messer and Bloomberg Quick takes Tim Stinovich from Bloomberg Radio. Alright,
Speaker 1: so till we know the Oakview Group. Man, they have
Speaker 1: built state of the art arenas. They've done it in Seattle,
Speaker 1: New York, Austin, and now they're going after since city
Speaker 1: here with more on the company's plans is CEO and
Speaker 1: co founder of the development company, Tim lae Wacky. We
Speaker 1: previously caught up with him and New York Islanders owner
Speaker 1: John Ladecki back in November. That was for the grand
Speaker 1: opening the UBS Arena here in New York. Yeah, and
Speaker 1: before we talked about Oak's bet on Vegas, Tim gave
Speaker 1: us an update on his Long Island Arena just under
Speaker 1: five months into operation, and everything is an education obviously,
Speaker 1: the biggest issue We've had to work with this transportation
Speaker 1: and how we get people there, how you drive there,
Speaker 1: how you get out of the parking lot. Um, you
Speaker 1: gotta deal with crosstown and so there's no way to
Speaker 1: reinvent that. I've I've learned at the end of the day,
Speaker 1: crosstown traffic is crosstown traffic. And so what we had
Speaker 1: to deal with on the turnpikes and on getting people
Speaker 1: to and from the building, we have to inherit the system. Now,
Speaker 1: all of that's gonna change in May when we open
Speaker 1: up both sides of the Long Island Railroad station that
Speaker 1: service UBS. So that's gonna help us and be able
Speaker 1: to get us getting customers both ways. On the Long
Speaker 1: Island railroad line, so that that that we're looking forward
Speaker 1: to that. But in the arena itself, the v I
Speaker 1: P hospitality has been unbelievable. We've sold out of all
Speaker 1: of this. I think we have one suite left, which
Speaker 1: is fantastic. Our club seats sold fairly well. We we
Speaker 1: only have a couple of dozen club seats left. Sponsorships
Speaker 1: gone well. But we were talking about how hard it
Speaker 1: is to open up four arenas in six months, but
Speaker 1: how almost impossible it is to think about opening up
Speaker 1: four arenas in six months in the middle of COVID.
Speaker 1: And so our our company are folks that do this
Speaker 1: the development side, all of the architectural firms, all of
Speaker 1: our general contractors. When you sit there and look at
Speaker 1: the ubs and realize we opened that up in the
Speaker 1: middle of COVID, and we open up Climate Pledge and
Speaker 1: then and Market and Savannah and now the Moody Center
Speaker 1: opens up in two weeks in Austin UM. It's really
Speaker 1: it shows human will power. We can we can get
Speaker 1: through all of this, we can make this work. We
Speaker 1: can be optimistic and entrepreneurial. And we've been rewarded because
Speaker 1: business is really fantastic at all three of the arenas,
Speaker 1: and in Austin we have twelve concerts in the first
Speaker 1: month that are all completely sold out. It's incredible. All right, Tim,
Speaker 1: let's go all in on Vegas. Tell us what you
Speaker 1: want to do? Their three billion dollars in calling it
Speaker 1: an entertainment campus. What is this all about? The concept is,
Speaker 1: if you look at live entertainment in Vegas, it is doubled, tripled,
Speaker 1: and quadrupled with the number of shows and the number
Speaker 1: of artists that want to play there. And ironically, although
Speaker 1: there's five arenas in the market place, only one of
Speaker 1: them is fairly new, and that is the where the
Speaker 1: Golden Nights play at the Mobile Arena. So the concept
Speaker 1: is there that we build a point of destination where
Speaker 1: the hotel, the casino, the arena, and a new theater
Speaker 1: are all interconnected and intertwined, designed together so that when
Speaker 1: you stay in the hotel, you could go right into
Speaker 1: the arena, right into the theater. We try to think
Speaker 1: about a point of destination. It becomes a district for
Speaker 1: live entertainment, similar to what l A Live was in
Speaker 1: Los Angeles. Now we create that in Las Vegas. We're
Speaker 1: the first resort that you're going to pass when you
Speaker 1: come into the fifteen and you're driving in from Southern California,
Speaker 1: where five minutes from the airport. So instead of going
Speaker 1: right into the strip and the congestion, you go left
Speaker 1: into our our district, and our property is right next
Speaker 1: to where the Bright Line terminal would be that would
Speaker 1: connect a speed train between Southern California and Las Vegas.
Speaker 1: So it's kind of a vision for where we think
Speaker 1: the future of Vegas is. And we've seen hotels and
Speaker 1: properties built around the exhibition business and the convention center business.
Speaker 1: This is being built around the live entertainment business. Tim
Speaker 1: where are you in development right now? When is it
Speaker 1: gonna open? We we it's gonna take a while, so
Speaker 1: we're probably a year away from pushing dirt. We've brought
Speaker 1: on both Populous and Gensler to help us design the
Speaker 1: arena and to help us design the district. We're bringing
Speaker 1: in some pretty smart people on getting us through the entitlement.
Speaker 1: But we're in a perfect part of the town as
Speaker 1: it relates to traffic. We're probably the least congested piece
Speaker 1: of property because we're at the fifteen and the two fifteen,
Speaker 1: So a lot of access on and off both of
Speaker 1: those freeways to our particular piece of property. But I
Speaker 1: think we're probably pushing dirt next year, and then this
Speaker 1: is going to take about three years to build, so
Speaker 1: we're looking at by the time we open. It's so
Speaker 1: interesting to talk to developers with a time horizon like
Speaker 1: this because so often we're talking next six or twelve
Speaker 1: months in financial markets and trying to get an understanding
Speaker 1: of the gauge of consumer tims. So so help us
Speaker 1: understand the calculus that goes into making a long term
Speaker 1: bet like this, that you know that you're comfortable investing
Speaker 1: billions of dollars and saying, hey, this thing is going
Speaker 1: to work out. What tells you that's that's that that's
Speaker 1: the case. So by the way, you're right, you're in
Speaker 1: minutes and hours right, if you look at the world
Speaker 1: you live in, just it turned to look at what
Speaker 1: just happened with jet Blue. So what we have to
Speaker 1: do is kind of it requires a little bit of
Speaker 1: nostrodamus and an entrepreneurial spirit. You've got to see three
Speaker 1: or four years down the road where all this is going. Well,
Speaker 1: if you segment the thinking here and say, first of
Speaker 1: all Vegas gonna get any less popular, I don't think.
Speaker 1: So you look at what what Resorts World built, their
Speaker 1: phenomenal new development there, and there's new developments with the
Speaker 1: Found Blue and others coming online. So I think the
Speaker 1: demand for people that want to go to Vegas is
Speaker 1: going to be fantastic. Is live entertainment going to continue
Speaker 1: to grow there? Fact is there's more residencies and more artists.
Speaker 1: When when we started with Selene Dion at Caesar's, there
Speaker 1: were a half dozen artists that did residencies and live
Speaker 1: entertainment in Las Vegas. Now there's over thirty different residencies
Speaker 1: of artists that ultimately are doing extended stays in Las Vegas.
Speaker 1: If you look at sports now, you suddenly see what
Speaker 1: happened with the Raiders in the new stadium. You look
Speaker 1: at how well the Golden Knights have done. It's pretty amazing.
Speaker 1: Because what you've got to think about with Vegas is
Speaker 1: it's not the two to three million people that live there,
Speaker 1: it's the fifty million people that come in from all
Speaker 1: over the world in order to spend time there. And
Speaker 1: obviously we want to be in a position where we
Speaker 1: prepare and build an arena that if the NBA decides
Speaker 1: to look at Las Vegas, we would meet all of
Speaker 1: the standards and we would create an economic upside within
Speaker 1: that arena that would help make the NBA a economic
Speaker 1: feasible proposition to somebody in Las Vegas. Yeah, Sports, you
Speaker 1: definitely are thinking about this and all of this. How
Speaker 1: big is it? An if if of an NBA team,
Speaker 1: What are the conversations to him that you're having around
Speaker 1: that so far? Well, we we It's very clear to
Speaker 1: us that there's only a couple of people that are
Speaker 1: going to make this decision on the NBA in Vegas.
Speaker 1: One is the commissioner, Adam Silver, and the other is
Speaker 1: the ownership group and the thirty owners. They have to
Speaker 1: decide if they want to expand that's not our decision.
Speaker 1: Nor do we know something that no one else knows.
Speaker 1: So we don't have any expectation, any guarantee, or any
Speaker 1: promises made to us from the NBA. And by the way,
Speaker 1: this arena and this district that we're building, it will
Speaker 1: work just fine with of entertainment and other sporting events.
Speaker 1: And so we can live off of music, we could
Speaker 1: live off of UFC, we could live off of boxing,
Speaker 1: We could live off of other events that we could
Speaker 1: ultimately activate into the arena, and without the NBA, we
Speaker 1: don't have the calendar issues, so our dates are much
Speaker 1: more populous for those kind of events. That said, if
Speaker 1: the NBA gets to a point where they look at expansion,
Speaker 1: we certainly have Climate Pledge Arena in Seattle that is
Speaker 1: a perfect arena now for basketball. We've designed all of
Speaker 1: our naming rank deal, sponsorship deal, suite deals, premium deals
Speaker 1: so that we have the upside of the revenue for
Speaker 1: the NBA. We have an ownership group and partners with
Speaker 1: David Bonderman and the local partners in Seattle that are
Speaker 1: ready to step into the NBA. So now you combine
Speaker 1: that with Vegas, and yes, we do have conversations going
Speaker 1: on with books that are interested in the NBA in Vegas.
Speaker 1: To have two world class arenas that are two standards
Speaker 1: met for the NBA, that both have the economic wherewithal
Speaker 1: to drive the kind of revenue necessary. Now it's just
Speaker 1: awaiting their decision if they When we started Climate Pledge
Speaker 1: Arena and we started the construction of that that arena
Speaker 1: in Seattle, we didn't have the guarantee of the NHL
Speaker 1: but we knew they would come. Well, I think we
Speaker 1: feel that same way in Vegas. Where are you when
Speaker 1: it comes to naming rights. We're at the UBS Arena
Speaker 1: in Long Island. Um, you mentioned the Climate Pledge arena.
Speaker 1: What are you thinking for this project in Vegas? Yeah,
Speaker 1: so obviously we're gonna get Moody Center open next which
Speaker 1: which is a couple of weeks from now. By the way,
Speaker 1: one of our first events is George Straight and Willie Nelson,
Speaker 1: So that's two nights of those two that's gonna be fun.
Speaker 1: I think we then will turn our attention towards not
Speaker 1: only the planning and the design of Las Vegas, but
Speaker 1: the economics of Las Vegas. Our group, our Global Partnership Group,
Speaker 1: has sold more naming rights for arenas than anybody naming rights.
Speaker 1: If I had to guess, I'm looking at what Crypto
Speaker 1: just paid removed a bowls and that was thirty million plus.
Speaker 1: It's probably in that ballpark. If you're a gambling man,
Speaker 1: would'll it be a crypto company? Well? I am a
Speaker 1: gambling man. That's why I'm betting's rebillion on Vegas tonight.
Speaker 1: I'm not going to make that commitment, but at the
Speaker 1: end of the day. I think we've already heard from
Speaker 1: about a half dozen companies that are interested because they
Speaker 1: understand that fifty million people coming into Vegas from all
Speaker 1: over the world and the platform this arena could have.
Speaker 1: That's Tim Lae Wacky. He's CEO and co founder of
Speaker 1: oak View Group. And that wraps up the weekend edition
Speaker 1: of Bloomberg Business Week from Bloomberg Radio. Thanks so much
Speaker 1: for joining us. I'm Carol Masser and I'm Tim Stanabeck.
Speaker 1: Be sure to tune into Bloomberg Business Week Monday through Friday.
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Speaker 1: You're just everywhere, aren't you. Yeah, they can't get rid
Speaker 1: of me. We don't want to have a good weekend.
Speaker 1: This is Bloomberg.