WEBVTT - Bloomberg Businessweek Weekend - April 8th, 2022 0:00:01.080 --> 0:00:05.400 This is Bloomberg Business Week Inside from the reporters and 0:00:05.600 --> 0:00:09.200 editors who bring you America's most trusted business magazine, plus 0:00:09.240 --> 0:00:13.160 global business, finance and tech news as it happened. Bloomberg 0:00:13.240 --> 0:00:16.759 Business Week with Carol Messer and Bloomberg Quick Takes Tim 0:00:16.800 --> 0:00:21.400 Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend 0:00:21.520 --> 0:00:24.919 edition of Bloomberg Business Week. Among the big headlines from 0:00:24.920 --> 0:00:28.600 this past week Tesla's Elon Musk taking a stake in Twitter. 0:00:28.680 --> 0:00:31.000 Figure that one out, Tim, Yeah, that was pretty surprising 0:00:31.040 --> 0:00:32.960 on Monday morning. And then we've got the perfect person 0:00:33.040 --> 0:00:35.280 to break down what that means to the world's richest 0:00:35.320 --> 0:00:38.040 man and of course the social media platform as well. 0:00:38.120 --> 0:00:41.560 Our conversation with Cathy Wood is coming up. Also ahead, 0:00:41.600 --> 0:00:44.559 the president of Mattel on the retail industry's new normal. 0:00:45.120 --> 0:00:47.159 We're still trying to figure out normal. I gotta say that. 0:00:47.560 --> 0:00:51.280 And also Oakview Groups CEO Tim Lwacky, he breaks down 0:00:51.280 --> 0:00:54.320 the company's big bet on Vegas. We're talking three billion dollars, 0:00:54.320 --> 0:00:56.960 so for some serious money there, ye. Plus our editor's 0:00:57.040 --> 0:01:00.360 roundtable profiles a GOP Senate hopeful who's going full Maga 0:01:00.480 --> 0:01:04.560 in a hotly contested and highly priced Pennsylvania primary running 0:01:04.560 --> 0:01:08.039 against Dr Oz. That's our domestic cover story story. I 0:01:08.040 --> 0:01:10.520 couldn't put down all of that to come. We begin 0:01:10.600 --> 0:01:13.600 with the war in Ukraine, now more than six weeks old. 0:01:13.680 --> 0:01:16.920 Russia is facing new international sanctions on the heels of 0:01:16.959 --> 0:01:20.520 apparent war crimes in town surrounding Kiev that were among 0:01:20.560 --> 0:01:24.160 the first targets of the invading Russian forces. In the meantime, 0:01:24.280 --> 0:01:26.959 companies with workers on the ground there are taking steps 0:01:27.000 --> 0:01:30.600 to hell. Andy Kurtzak is founder and CEO of Just Answer. 0:01:30.720 --> 0:01:34.240 It's a site that connects people with doctors, lawyers, vets, mechanics, 0:01:34.240 --> 0:01:37.280 and other experts seven and he's had more than two 0:01:37.600 --> 0:01:41.800 employees caught inside the war zone. They're all live and 0:01:41.600 --> 0:01:43.640 uh and doing as well they could possibly be doing 0:01:43.640 --> 0:01:45.959 in the situation that we're in. So all of our 0:01:45.959 --> 0:01:48.240 preparations have paid off. We've been asking to keep them 0:01:48.240 --> 0:01:50.800 all safe and so far it's working. And you in 0:01:50.840 --> 0:01:53.760 your notes you said that six of them are currently fighting, 0:01:53.840 --> 0:01:56.560 and those who are fighting are still being paid a salary. Yeah, 0:01:56.600 --> 0:01:58.720 so what we what we promised to them even before 0:01:58.720 --> 0:02:01.279 the war started, when we thought that this might happen. 0:02:01.400 --> 0:02:03.760 Was we'd pay them fifty percent of their salary in 0:02:03.800 --> 0:02:06.320 addition to the sellary they get for being in the military, 0:02:06.520 --> 0:02:09.600 and then we guarantee their jobs when they come back victory. Hey, 0:02:09.639 --> 0:02:11.440 and if we can take a step back, UM, and 0:02:11.480 --> 0:02:13.919 we're grateful that you've given us some time. What are 0:02:13.960 --> 0:02:17.079 you I mean, it's hard for any of us, UM, 0:02:17.120 --> 0:02:19.400 I think in terms of some of the atrocities that 0:02:19.440 --> 0:02:21.399 we're seeing in some of the news coverage of what's 0:02:21.400 --> 0:02:24.000 going on in Ukraine right now. What are you hearing, 0:02:24.600 --> 0:02:26.600 UM from your team members who are on the ground 0:02:26.600 --> 0:02:29.400 in Ukraine, UM, hearing pretty much what you're seeing in 0:02:29.440 --> 0:02:31.960 the news, which is it's dreadful. It's terrible. I mean 0:02:32.000 --> 0:02:35.560 that that that seeing the bodies and the torture and 0:02:35.919 --> 0:02:39.600 the reality now that they've taken back some of their 0:02:39.840 --> 0:02:43.400 territories near Kiev is just awful, I mean, and they're 0:02:43.639 --> 0:02:46.160 horrified for those who the rest of the world is. 0:02:46.320 --> 0:02:49.679 For those that have stayed on the ground, um, and 0:02:49.960 --> 0:02:52.880 decided not to leave Ukraine, why is that? Well, so 0:02:53.480 --> 0:02:55.800 a few reasons, I mean, So we have of the 0:02:55.800 --> 0:02:59.440 two eight now employees that we have in Ukraine, thirty 0:02:59.520 --> 0:03:01.920 nine of them have We've been able to get them out, 0:03:02.800 --> 0:03:05.440 but the rest either they can't get out because of 0:03:06.000 --> 0:03:08.639 there are men between eighteen and sixties against the law 0:03:08.680 --> 0:03:11.119 for that that leave the country. And then we've got 0:03:11.120 --> 0:03:14.440 people that that you know, maybe their spouse or their 0:03:14.520 --> 0:03:16.720 their family members are stuck there and so they don't 0:03:16.720 --> 0:03:18.160 want to leave either. So some of the women are 0:03:18.160 --> 0:03:21.560 staying by the side of the men that are forced 0:03:21.600 --> 0:03:24.040 to stay in Ukraine. And then we've even got like 0:03:24.040 --> 0:03:26.320 what the woman that leads their office in Ukraine, her 0:03:26.360 --> 0:03:29.560 son just turned eighteen, so he can't leave even so 0:03:29.720 --> 0:03:33.040 she's not leaving her son behind. What's the message that 0:03:33.040 --> 0:03:36.360 that you want to send to other people in Silicon Valley, 0:03:36.360 --> 0:03:39.080 other Americans who are here in the United States, and 0:03:39.480 --> 0:03:42.320 really just just watching this play out. I mean, I 0:03:42.400 --> 0:03:45.400 think a lot of people have this feeling that, well, Okay, 0:03:45.400 --> 0:03:47.600 the government's doing what it can do. There's only so 0:03:47.680 --> 0:03:50.280 much I can do. You know. The first thing is 0:03:50.320 --> 0:03:53.400 that this aspects all of us. This is not some 0:03:53.640 --> 0:03:58.800 small skirmish in Eastern Europe. This is about democracy and 0:03:58.840 --> 0:04:01.480 about freedom and East versus West. This is everything that 0:04:01.520 --> 0:04:05.000 we worried about during the Cold War. It's actually happening now. 0:04:05.720 --> 0:04:07.880 And you know, this aspects all of us, and so 0:04:07.960 --> 0:04:10.320 we all need to do our part to help. You know, Andy, 0:04:10.440 --> 0:04:12.640 I do wonder too, and obviously you're doing everything and 0:04:12.680 --> 0:04:15.240 anything you can to help UM, your team that are 0:04:15.280 --> 0:04:19.680 there in Ukraine. How do you though our audience a 0:04:19.720 --> 0:04:23.120 business investing audience as well, obviously caring though about the 0:04:23.200 --> 0:04:26.480 humanitarian aspect. But when you look at the market over 0:04:26.520 --> 0:04:30.120 in Europe, you know, will this ultimately lead to kind 0:04:30.120 --> 0:04:33.920 of a business rethink about exposure, whether it's in Ukraine, 0:04:33.960 --> 0:04:37.080 whether it's Russia, Like, how what's what's the what is 0:04:37.120 --> 0:04:40.680 it the longer lasting UM strategy that stays with us 0:04:40.720 --> 0:04:43.440 because of this? Yeah, so we've already seen lots of 0:04:43.480 --> 0:04:48.160 companies boycotting Russia and hopefully more will continue to do that. 0:04:49.000 --> 0:04:53.000 And you know, as this this goes on, what my 0:04:53.120 --> 0:04:56.159 hope is that companies will not just think about boycotting 0:04:56.240 --> 0:04:59.320 Russia but also buying Ukrainian goods and services. I mean, 0:04:59.320 --> 0:05:02.960 this war is about Russian's aggression and bombs and tanks, 0:05:03.000 --> 0:05:05.840 but it's also about the economy and sanctions, and we 0:05:05.880 --> 0:05:08.719 can all do a part to help the Ukrainian side 0:05:08.720 --> 0:05:10.960 of this. And so that's what just answers trying to 0:05:11.000 --> 0:05:13.040 do and I hope any other companies will do it 0:05:13.080 --> 0:05:15.200 as well. Andy, you and your family are actually planning 0:05:15.240 --> 0:05:18.080 to go to the border of Ukraine. This is a 0:05:18.120 --> 0:05:22.640 mission to deliver medical aid, body armor, laptops and more. Um, 0:05:22.960 --> 0:05:25.800 you're taking your kids? Why why is this important to you? Well, so, 0:05:25.960 --> 0:05:28.239 when my family and I got together a few weeks 0:05:28.240 --> 0:05:30.479 ago and we're deciding what we wanted to do for 0:05:30.520 --> 0:05:33.200 spring break. You know, normally we would go to Hawaii 0:05:33.200 --> 0:05:36.240 when my mom lives and we love. We just couldn't 0:05:36.320 --> 0:05:39.320 dare to go somewhere fun for spring break when our 0:05:39.560 --> 0:05:42.800 friends and colleagues and the people of Ukraine are suffering 0:05:42.839 --> 0:05:45.440 so much, And so we got together the family, and 0:05:45.480 --> 0:05:47.680 we decided that we wanted to go and help. Is 0:05:47.720 --> 0:05:50.040 there a message in terms of the governments that are 0:05:50.040 --> 0:05:52.440 out there, who have already imposed a lot of certainly 0:05:52.440 --> 0:05:55.279 economic and business sanctions, as you mentioned, a lot of 0:05:55.279 --> 0:05:58.760 companies pulling out. Um, what more do you think should 0:05:58.760 --> 0:06:01.000 be done at this point? I mean they should continue 0:06:01.040 --> 0:06:04.080 to escalate the sanctions. They should continue to send UM 0:06:04.360 --> 0:06:10.599 military UH equipment and any humanitarian supplies as well. So 0:06:10.960 --> 0:06:12.760 there's a lot more to be done. I mean, they've 0:06:12.800 --> 0:06:14.640 got a lot of people in Ukraine that are ready 0:06:14.640 --> 0:06:17.560 and willing to fight, but they need the supplies in 0:06:17.640 --> 0:06:20.600 order to maintain this this war and to and to 0:06:20.760 --> 0:06:24.520 beat back Russia and for democracy. They're fighting for our 0:06:24.560 --> 0:06:27.560 democracy just as much as their own. That was Andy Kurtzig, 0:06:27.560 --> 0:06:30.000 He's founder and CEO of Just Answer. We wish he 0:06:30.080 --> 0:06:32.159 and his family well as they had the Eastern Europe 0:06:32.160 --> 0:06:34.240 to help his employees and take part in the broader 0:06:34.320 --> 0:06:37.480 humanitarian relief efforts in the region. Coming up next, our 0:06:37.600 --> 0:06:41.839 Editors Roundtable spotlights a former Ray Dalio disciple who's looking 0:06:41.880 --> 0:06:44.479 to make waves in the political world by taking a 0:06:44.480 --> 0:06:47.640 page from former President Donald Trump's playbook. You're listening to 0:06:47.680 --> 0:07:01.320 Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business 0:07:01.440 --> 0:07:05.120 Week with Carol Messer and Bloomberg Quick Takes Tim Stinovik 0:07:05.360 --> 0:07:09.840 from Bloomberg Radio. Our domestic cover story in the magazine 0:07:09.960 --> 0:07:12.640 was also a Bloomberg Big Take and among the most 0:07:12.720 --> 0:07:15.760 read articles on the Bloomberg terminal this past week. I 0:07:15.760 --> 0:07:17.880 gotta say to him, I started reading. It was the 0:07:17.920 --> 0:07:21.480 first thing I read that morning, and I just couldn't stop. Yeah, 0:07:21.520 --> 0:07:23.280 I had the same experience with it. I mean anything 0:07:23.320 --> 0:07:26.120 that Josh writes, it's just fantastic. It's a profile of 0:07:26.160 --> 0:07:29.480 David McCormick, formerly president of the world's biggest hedge fund, 0:07:29.520 --> 0:07:33.240 Bridgewater Associates. He's now running for a Senate seat in Pennsylvania, 0:07:33.400 --> 0:07:36.240 and well, people who know him, they're not surprised by 0:07:36.280 --> 0:07:40.960 his political ambitions. Some of his rhetoric is raising eyebrows. Yeah, indeed, 0:07:41.080 --> 0:07:43.800 So why is the one time champion of diversity and 0:07:43.840 --> 0:07:47.000 inclusion now going full maga. Well to find out, we 0:07:47.120 --> 0:07:50.000 turned to our editors round Table. Bloomberg. Business Week National 0:07:50.000 --> 0:07:53.200 correspondent Josh Green wrote the piece He joins us along 0:07:53.240 --> 0:07:56.040 with the editor of Business Week, Jill Webber. Just a 0:07:56.040 --> 0:07:58.840 couple of months ago, David McCormick was the CEO of Bridgewater, 0:07:58.960 --> 0:08:01.880 which is the world's largest hedge fund, and that means 0:08:01.880 --> 0:08:04.840 he was basically under Ray Dalio. Many people probably more 0:08:04.840 --> 0:08:08.680 familiar with Ray Dalio than David McCormick. But in you know, January, 0:08:08.720 --> 0:08:10.840 when he announced that he was gonna be running for 0:08:11.360 --> 0:08:15.920 the Senate seat in Pennsylvania. Uh, it basically has meant 0:08:15.960 --> 0:08:18.840 that there's this has become the hot race that everyone 0:08:18.920 --> 0:08:22.320 is starting to watch um the election. This is the primary, right, 0:08:22.560 --> 0:08:26.280 and we'll see who emerges victorious in May. Um. That's 0:08:26.320 --> 0:08:28.760 again just the primary, but already it is shaping up 0:08:28.800 --> 0:08:32.640 to be the most expensive primary in U. S. Senate history. Uh. 0:08:32.679 --> 0:08:35.400 And then it pits him against doctor Oz is the 0:08:35.400 --> 0:08:37.960 other kind of front runner. So you have David McCormick 0:08:38.240 --> 0:08:43.520 hedge fund background, who's gone full MAGA versus Oz, who 0:08:43.920 --> 0:08:47.319 everyone knows from you know, his days as America's doctor 0:08:47.440 --> 0:08:52.160 from Oprah. Uh So, So, Josh, let's talk about McCormick 0:08:52.360 --> 0:08:59.240 because this transformation from hedge fund CEO to MAGA has 0:08:59.360 --> 0:09:01.760 taken a lot of people who worked with him in 0:09:01.760 --> 0:09:05.120 in finance and at Bridgewater very much by surprise. Yeah, 0:09:05.120 --> 0:09:06.960 you know, it's funny. It's a political reporter, you know. 0:09:07.000 --> 0:09:10.360 I often see candidates and people sort of gradually switched 0:09:10.720 --> 0:09:14.280 positions and kind of change their profile. I've never seen 0:09:14.360 --> 0:09:18.320 anything like what David McCormick has done, going from CEO 0:09:18.400 --> 0:09:21.160 of the world's largest hedge fund. You know, a guy 0:09:21.240 --> 0:09:25.000 who fits in comfortably at Davos um and in the 0:09:25.000 --> 0:09:28.480 hedge fund world, transform himself, as I say in the piece, 0:09:28.640 --> 0:09:32.640 faster than Clark cannon a phone booth into a China bashing, 0:09:33.240 --> 0:09:39.400 uh immigrant bashing, pro Trump uh maga acolyte. But McCormick 0:09:39.440 --> 0:09:42.760 has concluded, I think correctly that if you want to 0:09:42.760 --> 0:09:45.959 win office in a Republican primary, this is still Donald 0:09:46.000 --> 0:09:49.079 Trump's party and you need to demonstrate your allegiance to 0:09:49.160 --> 0:09:51.440 Donald Trump. So it come as a shock to a 0:09:51.480 --> 0:09:53.800 lot of his former colleagues from the hedge fund world, 0:09:54.000 --> 0:09:57.720 who know him as this urbane guy with a PhD 0:09:57.800 --> 0:10:00.400 from Princeton. I have to say one of my favorite lines, 0:10:00.800 --> 0:10:02.720 I guess there's someone you talked to who worked with 0:10:03.200 --> 0:10:06.679 McCormick who asked, is Connecticut Dave McCormick the real one? 0:10:06.760 --> 0:10:08.880 Or is Pennsylvania Day McCormick the real one? Or is 0:10:08.920 --> 0:10:11.600 the real Dave McCormick a chameleon, will be whatever he 0:10:11.640 --> 0:10:14.120 needs to be to succeed. I mean, I feel like 0:10:14.120 --> 0:10:16.920 this is what politics have become, especially if you're playing 0:10:16.920 --> 0:10:19.720 with the Republican Party. Right, they're all kind of cow 0:10:19.800 --> 0:10:24.120 towing still Josh to Donald Trump. Yeah they are. I 0:10:24.120 --> 0:10:26.920 mean McCormick is fascinating on so many levels. You know, 0:10:26.920 --> 0:10:29.600 as you said, he lived in uh, you know, Bridgewater 0:10:29.720 --> 0:10:32.400 is based in Westport, Connecticut, and for the last ten years, 0:10:32.880 --> 0:10:36.880 you know, he's been this this friendly, widely respected hedge 0:10:36.920 --> 0:10:39.760 fund manager. But then he moved to Pennsylvania in order 0:10:39.760 --> 0:10:41.839 to run for the Senate seat, and you know, has 0:10:41.840 --> 0:10:45.880 created this entirely different persona. Uh. You know, to some level, 0:10:45.960 --> 0:10:48.800 when politicians run, there's a little bit of an artistice there. 0:10:49.400 --> 0:10:53.600 But his transformation has been so extreme that legitimately shocked 0:10:53.640 --> 0:10:55.679 a lot of people that I talked to who kind 0:10:55.679 --> 0:10:58.360 of thought they knew him, and now we're wondering, like, 0:10:58.480 --> 0:11:01.320 you know, who is the real guy here. But I 0:11:01.360 --> 0:11:04.600 think on another level, it's pretty transparent what's going on. 0:11:04.720 --> 0:11:06.760 You know, there's a there's a school of thought amongst 0:11:06.760 --> 0:11:11.240 some Republican Mitch McConnell, the Senate Minority leader from Kentucky, especially, 0:11:11.600 --> 0:11:14.200 is trying to push the idea that the Republican Party 0:11:14.240 --> 0:11:18.520 is moving beyond Trump, that Trump's Trump's power has faded, 0:11:18.640 --> 0:11:21.800 his time has passed. And I think the Republican Senate 0:11:21.840 --> 0:11:25.200 primary and McCormick's example in particular, shows that that is 0:11:25.240 --> 0:11:27.760 simply not the case. That if that, if you want 0:11:27.760 --> 0:11:31.040 to win election, all of these guys, including doctor Oz, 0:11:31.559 --> 0:11:33.319 who I spent some time with for the piece. Have 0:11:33.520 --> 0:11:36.680 concluded the way to get elected is to demonstrate your 0:11:36.720 --> 0:11:39.199 allegiance to Trump. Dr as another guy who spent years 0:11:39.240 --> 0:11:43.240 in Pennsylvania. Right, I'm being santastic. We just want to 0:11:43.240 --> 0:11:46.319 know where you caught up with him. Well, I mean 0:11:46.360 --> 0:11:48.880 that That's one of the weirder turns in this piece was, 0:11:49.000 --> 0:11:52.080 you know, Oz doesn't like to talk to national reporters, um, 0:11:52.320 --> 0:11:54.280 but I decided to go hang out with him get 0:11:54.280 --> 0:11:57.360 a flavor of his campaign. Anyway, showed up early to 0:11:57.400 --> 0:12:00.560 a campaign event in Bluebell, Pennsylvania, and I wandered in 0:12:00.600 --> 0:12:04.160 the men's room h and low and behold, Dr Oz 0:12:04.200 --> 0:12:06.880 is the only guy in there. So uh, seeing the 0:12:06.960 --> 0:12:09.800 serendipitous opportunity, I introduced myself. I said, I was working 0:12:09.800 --> 0:12:12.880 on a profile on McCormick, and Oz right there in 0:12:12.880 --> 0:12:16.600 the men's room just started fulminating about McCormick and Bridgewater 0:12:16.720 --> 0:12:20.120 and head fund guy, I should say. Dr Oz, who's 0:12:20.160 --> 0:12:22.559 surprisingly literate and all things fine and he had a 0:12:22.640 --> 0:12:26.400 degree from the Wharton School, was frustrated that that McCormick 0:12:26.440 --> 0:12:28.640 has managed to get away with this transformation to the 0:12:28.679 --> 0:12:31.360 degree that he has because polls show there haven't been 0:12:31.360 --> 0:12:32.920 a lot of them, but the most recent poll I 0:12:32.920 --> 0:12:35.480 saw a show that McCormick is actually leading this primary 0:12:35.600 --> 0:12:39.440 race over oz Um. So it's an interesting contrast of 0:12:39.200 --> 0:12:42.200 of of styles and backgrounds, but they're all seeking to 0:12:42.240 --> 0:12:44.920 basically be the same person, and that is, you know, 0:12:45.160 --> 0:12:47.760 the candidate that Donald Trump decided to endorse, because I 0:12:47.760 --> 0:12:50.240 think that will be if it happened, that'll be the 0:12:50.280 --> 0:12:53.240 decisive factor in this in this primary rate. So you 0:12:53.280 --> 0:12:55.960 know where is Trump in this. He's he's been quiet 0:12:56.080 --> 0:12:59.200 so far. If he does come out in support of someone, 0:12:59.400 --> 0:13:02.040 what do you think happens, what unfolds from there? Well, 0:13:02.120 --> 0:13:05.400 it's interesting. The Washington Post reported on Wednesday that McCormick 0:13:05.480 --> 0:13:07.920 is actually down in mar A Lago trying to win 0:13:08.000 --> 0:13:11.959 over Trump's endorsement. So so clearly, you know, McCormick is 0:13:11.960 --> 0:13:13.920 trying to close the deal, as as they would say 0:13:13.920 --> 0:13:16.640 in the hedge fund world. Whether whether or not he does, though, 0:13:16.679 --> 0:13:20.400 it is kind of uncertain. Before McCormick and os got 0:13:20.400 --> 0:13:23.439 in the race, there was another leading Republican candidate who 0:13:23.440 --> 0:13:27.040 Trump did endorse, a guy named Sean Parnell, who wound 0:13:27.080 --> 0:13:30.000 up having to leave the race in November after allegations 0:13:30.040 --> 0:13:34.240 of spousal and child abuse. UM McCormick won his endorsement 0:13:34.520 --> 0:13:38.440 campaigned with him. That was taken by a sign uh 0:13:38.600 --> 0:13:41.679 from some people in Trump World. In Pennsylvania Republican politics. 0:13:41.760 --> 0:13:44.200 You know, maybe Trump will lean in that direction, but 0:13:44.280 --> 0:13:46.840 it's Trump and you just never know until he decides. 0:13:47.080 --> 0:13:50.479 Often he decides things on a whim. But both candidates, 0:13:50.840 --> 0:13:52.599 as I say, if he's Oz is OZ has the 0:13:52.600 --> 0:13:55.440 support of Melania Trump, so he's not without his his 0:13:55.840 --> 0:13:58.840 advocates in Trump World. But until Donald Trump makes up 0:13:58.880 --> 0:14:01.800 his mind, I think it's wide open race. So much drama, 0:14:02.520 --> 0:14:04.920 and yet this is all for a primary, Josh. So 0:14:05.280 --> 0:14:08.439 we're gonna We're gonna see who Republicans pick. What does 0:14:08.480 --> 0:14:10.000 it look like on the other side of the aisle 0:14:10.240 --> 0:14:13.400 On the Democratic side, there two candidates running, Connor Lamb 0:14:13.480 --> 0:14:21.040 or moderate Congressman John Setterment big early blue color lieutenant governor. 0:14:21.200 --> 0:14:24.800 Who is about is sharp a contrast and personality and 0:14:24.920 --> 0:14:28.240 style as you could possibly have um with the CEO 0:14:28.320 --> 0:14:32.160 of Bridgewater. That was Bloomberg Business Week National correspondent Josh Green, 0:14:32.240 --> 0:14:35.080 along with the editor Joel Webber, on this week's domestic 0:14:35.080 --> 0:14:37.560 cover story. We're gonna have more from our editor's roundtable 0:14:37.640 --> 0:14:40.040 in just a bit. Coming up next though, on Bloomberg 0:14:40.040 --> 0:14:43.000 Business Week, why Kathy Wood thinks Elon Musk's newsteak and 0:14:43.040 --> 0:14:45.640 Twitter could portend to shake up in the c suite. 0:14:45.840 --> 0:14:49.000 We'll speak with the Arc invest founder, ce IO and CEO. 0:14:49.360 --> 0:14:58.680 This is Bloomberg Broadcasting from the financial capital of the world, 0:14:58.800 --> 0:15:02.240 Bloomberg eleven oh in New York to Washington, d C. 0:15:02.440 --> 0:15:07.160 Bloomberg to Boston, Bloomberg one oh six one to San Francisco, 0:15:07.200 --> 0:15:10.680 Bloomberg nine sixty to the country Sirius XM Chado one 0:15:10.720 --> 0:15:13.680 nine team and around the globe the Bloomberg Business app 0:15:13.800 --> 0:15:19.280 and Bloomberg Radio dot com. This is Bloomberg Business Week. Well, 0:15:19.360 --> 0:15:22.040 big story this week. It was all over Twitter, it 0:15:22.120 --> 0:15:25.680 was everywhere. It was all about Elon Musk's investment in Twitter, 0:15:26.120 --> 0:15:28.720 taking a steak, so called passive steak, of more than 0:15:28.800 --> 0:15:31.600 nine percent in the platform. Well, our Innvest Management has 0:15:31.720 --> 0:15:34.760 large positions in both Tesla and Twitter. Cathy Wood is 0:15:34.760 --> 0:15:37.600 the founder, CEO, and ce IO of the company, and 0:15:37.600 --> 0:15:41.000 in our wide ranging conversation, we start with her take 0:15:41.080 --> 0:15:44.160 on Musk's big move, especially in light of his friend 0:15:44.400 --> 0:15:49.200 Jack Dorsey's recent departure. He's certainly making a statement, and 0:15:49.840 --> 0:15:54.320 it's a statement about censorship. He he doesn't agree with censorship. UH. 0:15:54.600 --> 0:15:58.120 For as smooth functioning democracy as he has tweeted, I 0:15:58.120 --> 0:16:01.440 believe uh and so I think he's sending a strong 0:16:01.480 --> 0:16:06.640 signal to the new CEO. UH. And I I also 0:16:06.720 --> 0:16:10.040 know there's some controversy about why Jack left having to 0:16:10.080 --> 0:16:13.040 do with this new CEO. So a few messages there. 0:16:13.280 --> 0:16:15.880 Have you talked to Ellen at all about it? No? 0:16:16.120 --> 0:16:19.520 I have not, Okay, UM, and would you be buying 0:16:19.680 --> 0:16:22.080 either more Tesla or Twitter on the news? And let's 0:16:22.080 --> 0:16:26.280 throw on Tesla also having this record first quarter? Um, 0:16:26.440 --> 0:16:28.920 is this a catalyst to buy more of these shares 0:16:28.920 --> 0:16:32.800 in your view? On Tesla? We post our trades at 0:16:32.800 --> 0:16:36.080 the end of every day, so many will know that 0:16:36.160 --> 0:16:39.800 we have. It is the largest position in our flagship 0:16:39.800 --> 0:16:43.520 portfolio and in most portfolios where we hold it. But 0:16:43.640 --> 0:16:47.760 we have been selling recently because of how well it 0:16:47.800 --> 0:16:50.760 has done relative to the rest of the stocks in 0:16:50.800 --> 0:16:55.280 our portfolio. So it has levitated relative and uh and 0:16:55.400 --> 0:16:58.080 so it's been a good source of cash. We've taken 0:16:58.120 --> 0:17:01.840 profits and read employed them into other stocks that we 0:17:01.880 --> 0:17:07.240 thought were being unfairly penalized here. Uh, and I think 0:17:07.240 --> 0:17:09.119 one of the reasons for that is Tesla's in the 0:17:09.200 --> 0:17:12.760 indexes the broad based disease, and most of our other 0:17:12.800 --> 0:17:15.320 stocks are not. And uh, that's a big problem out 0:17:15.320 --> 0:17:18.119 there in terms of the way capital is being allocated 0:17:18.160 --> 0:17:20.880 these days in the public equity markets. Kathy, how much 0:17:20.880 --> 0:17:24.680 would Tesla have to fall for you to start buying again? Well, 0:17:24.720 --> 0:17:27.720 you know, even now, we're going to put out another 0:17:28.080 --> 0:17:32.240 model on geth hub In. I'm going to say within 0:17:32.280 --> 0:17:36.200 a week. Our last one is from about a year ago, 0:17:36.480 --> 0:17:40.200 and uh, you'll see from that model that our price 0:17:40.320 --> 0:17:44.280 expectation at that time was three thousand dollars. So there's 0:17:44.320 --> 0:17:48.560 still a lot of running room ahead for Tesla, But 0:17:49.040 --> 0:17:51.600 relative to the other names in our portfolio, even though 0:17:51.640 --> 0:17:54.280 that's a you know, a triple or nearly a triple, 0:17:55.080 --> 0:17:58.560 other names in our portfolio we believe will deliver much 0:17:58.600 --> 0:18:01.080 more than that over the next five years. Because they 0:18:01.119 --> 0:18:04.960 have been hit so hard, they're not in indexes, and 0:18:05.040 --> 0:18:10.600 so when there are risk off periods, traditional investors really 0:18:10.680 --> 0:18:13.879 diversify and sell our stocks as they move closer to 0:18:13.960 --> 0:18:17.679 their benchmarks. The benchmarks against which they are measured. So 0:18:17.720 --> 0:18:21.000 it's a great buying opportunity for us. I will say, 0:18:21.119 --> 0:18:24.280 I can't believe how long that buying opportunity lasted, from 0:18:24.400 --> 0:18:28.000 February of a year ago to a few weeks ago. 0:18:28.840 --> 0:18:32.159 But we think the concentration of our portfolios towards our 0:18:32.200 --> 0:18:36.119 highest conviction names will pay off. As for Twitter, I 0:18:36.160 --> 0:18:39.560 think there are some investors relieved that someone is willing 0:18:39.600 --> 0:18:41.560 to speak up and say, hey, you're going to ruin 0:18:41.640 --> 0:18:45.679 this platform if you continue to censor it, uh in 0:18:46.400 --> 0:18:52.479 somewhat uh random ways. Uh. So, so I think that's good. 0:18:52.520 --> 0:18:55.840 I will say, this could be setting up for another 0:18:55.920 --> 0:18:59.600 leadership change at Twitter. Uh, you never know, and so 0:18:59.720 --> 0:19:03.840 that will bring with it perhaps some uncertainly, uncertainty and dislocation, 0:19:04.080 --> 0:19:08.199 so especially as it relates to advertisers. So so we 0:19:08.240 --> 0:19:12.480 shall see, so cathy uncertainty potentially at Twitter, a potential 0:19:12.560 --> 0:19:15.000 leadership change. Who are the names that you would like 0:19:15.040 --> 0:19:16.960 to see lead Twitter? Who could do a great job 0:19:17.000 --> 0:19:19.879 in your opinion? Oh, I am not going to speculate 0:19:19.960 --> 0:19:23.080 on that, you know, And to be honest, we haven't 0:19:23.240 --> 0:19:27.119 thought about it that carefully. Uh, there are names flying around, 0:19:27.240 --> 0:19:30.680 but I wouldn't want to throw out anything there unless 0:19:31.040 --> 0:19:34.600 unless we felt very strongly uh so, we we will 0:19:34.640 --> 0:19:38.240 wait to see whose names are put forth, but whoever 0:19:38.600 --> 0:19:42.160 is put forth, and I'm not jumping to this conclusion automatically. 0:19:42.160 --> 0:19:44.919 I'm saying it's one of many possibilities. It will lead 0:19:44.960 --> 0:19:49.160 to be are Garwal changing the policy of the company 0:19:49.280 --> 0:19:55.440 to you know, really open source, uh the the censorship 0:19:56.400 --> 0:20:00.439 or or call people out on censorship, h or it 0:20:00.520 --> 0:20:03.280 will be a management change. I don't know what's going 0:20:03.280 --> 0:20:06.359 to happen at all. We are just getting started with 0:20:06.400 --> 0:20:08.639 Kathy Wood here on Bloomberg Business Week. We should know 0:20:08.840 --> 0:20:11.840 that the day after we talked to her, Tim Twitter 0:20:11.840 --> 0:20:13.960 announced that Elon Musk would also be taking a seat 0:20:13.960 --> 0:20:17.240 on the company's board. So to her point, didn't feel 0:20:17.320 --> 0:20:20.160 very passive, and it doesn't. It's not playing out that way. Yeah, 0:20:20.240 --> 0:20:22.240 some really pression comments from her. I mean this is 0:20:22.280 --> 0:20:25.320 literally hours after our interview that big move came from 0:20:25.320 --> 0:20:28.240 Twitter CEO. It was not a passive investment, as Kathy 0:20:28.240 --> 0:20:30.679 would correctly predicted. Carol. When we come back, we're going 0:20:30.720 --> 0:20:33.320 to get her take on the broader social media landscape, 0:20:33.480 --> 0:20:36.160 putting money to work in China and the big problem 0:20:36.200 --> 0:20:39.440 that she sees with passive index investing. Yeah, great paper 0:20:39.440 --> 0:20:42.119 that they put out in social media on that. You're 0:20:42.160 --> 0:20:55.200 listening to Bloomberg Business Week. This is Bloomberg. You're listening 0:20:55.240 --> 0:20:58.960 to Bloomberg Business Week with Carol Messer and Bloomberg Quick 0:20:59.040 --> 0:21:03.679 Takes Tim Ston from Bloomberg Radio. Let's get right back 0:21:03.720 --> 0:21:06.760 to our interview with Kathy Wood. We already talked about 0:21:06.760 --> 0:21:09.480 Elon Musk's big bet on Twitter. She weighed in on that. 0:21:10.000 --> 0:21:12.159 So what about the other big players in the social 0:21:12.160 --> 0:21:14.360 media space? What does she think is she making any 0:21:14.359 --> 0:21:16.320 bets there? Tim Well one part two of our conversation, 0:21:16.359 --> 0:21:19.440 the Arc invest founder, CEO and ce IO tells us 0:21:19.600 --> 0:21:22.560 why she's not yet ready to pour money into those companies. 0:21:22.640 --> 0:21:25.960 Carol and who's winning the fight for more eyeballs? I 0:21:26.000 --> 0:21:29.520 think what's happening the ground is shifting underneath social media. 0:21:29.920 --> 0:21:36.160 I don't think anyone understood until Facebook reported or gave 0:21:36.200 --> 0:21:42.639 guidance for the first quarter how provocatively disruptive uh TikTok 0:21:42.720 --> 0:21:46.080 had become. I mean, I know I've seen my children 0:21:46.119 --> 0:21:49.879 and and and their generations spend a lot more time 0:21:49.960 --> 0:21:53.680 on TikTok and and wondered, you know, how how would 0:21:53.720 --> 0:21:56.760 this impact Facebook? But I also know that there's a 0:21:56.920 --> 0:22:00.760 huge advertising shift from linear TV to so shal So 0:22:00.840 --> 0:22:04.119 you have those two opposing forces. While it appears that 0:22:04.240 --> 0:22:07.639 TikTok is being much more disruptive than we thought, and 0:22:07.720 --> 0:22:11.399 not just Facebook, but Netflix has talked about it as well. 0:22:11.440 --> 0:22:15.879 This is competition for the consumer's time. Uh, And so 0:22:16.040 --> 0:22:18.879