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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence podcast. Catch us live weekdays at ten am

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Speaker 1: Eastern on Apple, Cocklay and Android Auto with the Bloomberg

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Speaker 1: Business app. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: I look at the Bloomberg terminal and the top story

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Speaker 2: all morning long has been about shares of Capital One

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Speaker 2: AMEX tumbling, along with some other banks that issue credit cards,

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Speaker 2: following President Trump's announcement that he is calling on these

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Speaker 2: companies to cap interest rates at ten percent a year,

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Speaker 2: which could threaten their profits billions in profits for the industry.

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Speaker 3: Let's bring in now, Nathan Dean.

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Speaker 2: Nathan is our senior policy analyst at Bloomberg Intelligence, and Nathan,

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Speaker 2: one thing that we need to make clear, President Trump

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Speaker 2: calling for this is not the same as him actually

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Speaker 2: having authority to do this. Is this something in which

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Speaker 2: he has the authority to call for a cap on

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Speaker 2: interest rates for credit card companies?

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Speaker 4: No, it's not, And that should be the first question

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Speaker 4: that these investors look at is how would President Trump

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Speaker 4: implement this? Because look, he said that in effective January twentieth,

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Speaker 4: that there would be a one year cap at ten percent,

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Speaker 4: but really there's no way that he can implement this.

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Speaker 4: There has been legislation from Senators Bernie Sanders the Independent,

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Speaker 4: and obviously Josh Holly the Republican to actually put in

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Speaker 4: a cap for five years, but that legislation really hasn't

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Speaker 4: gone anywhere. Now, the industry averages around twenty one percent.

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Speaker 4: Going down to ten percent, obviously you're going to see

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Speaker 4: a significant decline in what the interest would be to

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Speaker 4: these banks, and obviously that we're starting to see what

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Speaker 4: the potential of that would be in the stock market.

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Speaker 4: But you know our note that we put out the

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Speaker 4: clients this morning, he said, look, we only see a

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Speaker 4: thirty percent chance of this happening in twenty twenty six.

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Speaker 4: The more likely scenario is that President Trump uses the regulators. Ironically,

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Speaker 4: it would be one of the consumer the Consumer Financial

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Speaker 4: Protection Bureau, the regulator that they've been moving to get

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Speaker 4: rid of. But they would use the regulators in the

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Speaker 4: bully pulpit to pressure these firms to actually lower interest

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Speaker 4: rates on their own. But after that, you know, these

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Speaker 4: credit card company banks, they can continue to operate as is.

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Speaker 5: Let's say this policy actually did go into fact in

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Speaker 5: terms of timeline, how long would it take for some

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Speaker 5: of these companies to actually cap their rates.

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Speaker 6: So it'd be fairly quickly.

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Speaker 4: I mean, obviously it wouldn't be so much an operational

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Speaker 4: standpoint of capping the rate at ten percent, But the

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Speaker 4: question would be what are you going to do with

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Speaker 4: the credit risk that comes out of that, because you

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Speaker 4: know a lot of these reward programs think of those

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Speaker 4: you know, those fancy lounges at JFK and at DCA

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Speaker 4: and Reagan. You know, a lot of that is paid

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Speaker 4: for by the fact that you have high quality credit

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Speaker 4: and you have low quality credit consumers as part of this,

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Speaker 4: and so one of the note that we put on

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Speaker 4: in the morning this morning showed that if you were

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Speaker 4: to curred the tail this down to ten percent, banks

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Speaker 4: would be a little bit more choosy about who they

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Speaker 4: are offering credit to. You would actually see a decline

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Speaker 4: in terms of the number of users or credit cards,

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Speaker 4: which ultimately could have a small impact on Visa, MasterCard

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Speaker 4: and so forth. But a lot of those reward programs

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Speaker 4: that people enjoy would likely dry up as well, which

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Speaker 4: is not something that I think a lot of the

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Speaker 4: American populace would want to see, especially during an election year.

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Speaker 2: Yeah, especially since they already paid the eight hundred and

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Speaker 2: ninety five dollars and ho fee and want to get

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Speaker 2: something for it. Nathan, you mentioned that there has been

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Speaker 2: legislation proposed to target these interesst rate levels at these

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Speaker 2: credit card issuers. Now that President Trump has made this

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Speaker 2: something of a rallying cry, do you think that that

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Speaker 2: legislation will have more of a chance of getting anywhere?

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Speaker 7: So?

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Speaker 4: You know, normally I would say more so in twenty

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Speaker 4: twenty seven, less so in twenty twenty six. The reason

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Speaker 4: being is in an election year. And look, when President

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Speaker 4: Trump proposed there are a lot of Democrats on Capitol

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Speaker 4: Hill that actually would be in favor of this. You

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Speaker 4: want to cap credit card interest rates at ten percent,

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Speaker 4: You could probably get a significant number of Democrats to say, yeah,

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Speaker 4: we're on board. But the problem here for the president

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Speaker 4: is that there's probably an unspoken Republican populace. And I'm

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Speaker 4: specifically looking at the House Financial Services Committee and the

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Speaker 4: Senate Banking Committe at the moment that have bank allies

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Speaker 4: that are completely against this move. And so what I

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Speaker 4: think will happen is is that if President Trump said

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Speaker 4: that we want to push this legislation. And if the

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Speaker 4: folks on the Senate side say, look, we want to

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Speaker 4: work on this legislation, the most step that you would

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Speaker 4: have is have a hearing to talk about that legislation.

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Speaker 4: So hearing plus debate, plus negotiations plus an election year,

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Speaker 4: that just is in a timeline to get it done

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Speaker 4: before November twenty twenty six. I think the real risk

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Speaker 4: is if you see this in twenty twenty seven, but

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Speaker 4: by then, you know this issue may be moot and

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Speaker 4: off the President's mindset.

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Speaker 5: Nathan, I'm just looking at the market reaction here from

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Speaker 5: some of these credit card issuers, Capital One, American Express,

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Speaker 5: just their share prices falling more substantially than some of

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Speaker 5: the banks like JP Morgan. How much more significant would

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Speaker 5: the impact be on these credit card issuers versus say,

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Speaker 5: the big banks that are also issuing credit cards.

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Speaker 4: Well, it's a story of diversification in revenue. I mean

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Speaker 4: the Capital One, the American Express, you know, the credit

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Speaker 4: card issuers. You know, it certainly drives higher bulk of

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Speaker 4: their revenue than it thinks of like the JP Morgans

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Speaker 4: and Bank Americas which have investment banking, commercial banking and

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Speaker 4: other types of operations. And that's part of the reason

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Speaker 4: why policy risks is hitting these companies more so than

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Speaker 4: others is because you know, if you look at Capital

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Speaker 4: one in an American Express in particular, you know there's less

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Speaker 4: of a deregulatory story to tell than what you're seeing

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Speaker 4: in the big banks at the moment. You know, when

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Speaker 4: they say that deregulation for the banking industry is coming,

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Speaker 4: they're most likely saying deregulation is coming for those big

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Speaker 4: banks in terms of capital requirements of returning towards those banks.

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Speaker 4: You know, Capital One in Americans Express have a different

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Speaker 4: type of operating model and as a result, this issue

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Speaker 4: in particular is more exposed. But I would just say,

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Speaker 4: is that risk for these companies continue because it's a

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Speaker 4: Republican issue, it's a democratic issue, and as a result,

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Speaker 4: this bipartisan issue is going to continue. In the headlines, Nathan.

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Speaker 2: Before we let you go just very quickly here, Senator

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Speaker 2: Tom tillis pushing back against this idea of the President

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Speaker 2: targeting J.

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Speaker 3: Powell and the Federal Reserve.

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Speaker 2: He says he will oppose any off Trump's FED nominees,

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Speaker 2: including the chair until this issue is resolved with regards

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Speaker 2: to the criminal indictment that's been threatened against the Fed.

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Speaker 2: You think that will have an impact on the President

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Speaker 2: on the White House.

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Speaker 4: It will if Senator Thomas falls through with it, and

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Speaker 4: it will depending on what his definition resolved is because

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Speaker 4: the Senate Banking Committee is thirteen to eleven and he

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Speaker 4: can effectively jam that nomination up.

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Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 5: Scarlett, it looks like we have Lululemon rising as holiday

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Speaker 5: sales show signs of a rebound. To explain that we

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Speaker 5: have Punam Goyle. She is senior US Commerce and Retail

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Speaker 5: analyst at Bloomberg Intelligence Poonham. I'm not a big Lululemon shopper,

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Speaker 5: so it was only recently that I discovered that they

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Speaker 5: actually have a membership, which is really interesting. I can't

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Speaker 5: help but wonder what is this loyalty program? How does

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Speaker 5: it influence repeat purchase behavior and margins for the company.

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Speaker 8: Yeah, so the loyalty program is not something that Lulu

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Speaker 8: Lemon has had for a long long time, but it

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Speaker 8: does help, just like with any other loyalty program. You know,

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Speaker 8: it gives you perks, You have access to lul Lemon merchandise,

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Speaker 8: you have access to Little Lemon events, et cetera. And

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Speaker 8: it does bring the member who enjoys the Little Lemon

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Speaker 8: experience to keep coming back. It's an added reward for

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Speaker 8: those who have been loyal to the company. But make

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Speaker 8: no mistakes, that is not what's going to drive the turnaround.

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Speaker 8: Their turnaround needs a lot more than that.

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Speaker 2: Yeah, I mean, loyalty programs are something that most brands

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Speaker 2: have and Lulua Lemon has some more structural issues. Let

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Speaker 2: me just jump in here because we have a headline

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Speaker 2: showing than Alphabet when it rose as much as one

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Speaker 2: point seven percent, it actually surpass four trillion dollars in

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Speaker 2: market value. This comes after Apple reportedly has chosen Alphabet's

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Speaker 2: Gemini to run its aipowered.

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Speaker 3: Sery this year. That's according to CNBC. Put On, let

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Speaker 3: me get back to you here.

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Speaker 2: When it comes to Lululemon, separate from the loyalty program,

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Speaker 2: Lulu has pre announced fourth quarter sales and it comes

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Speaker 2: in at the higher end of its guidance. This is

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Speaker 2: kind of surprising because Lulu Lemon has struggled to connect

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Speaker 2: with choppers the last couple of quarters.

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Speaker 8: Yes, you can say that it's surprising, but at the

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Speaker 8: end of the day, the sales are still down. The

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Speaker 8: estimate was for sales to be down negative one to

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Speaker 8: three percent, so maybe you're close to minus one. That's

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Speaker 8: still now where we expect Lemon to be. This doesn't

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Speaker 8: tell me that the turnaround is you know, has started

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Speaker 8: and is underway and things wil begin to improve quarter

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Speaker 8: after quarter. I think it's good, but I need a

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Speaker 8: lot more to be confident that the turnaround will begin

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Speaker 8: to take place.

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Speaker 5: What are some of the macroeconomic trend trends that are

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Speaker 5: driving Lululemon's customer base.

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Speaker 3: Is it inflation?

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Speaker 5: Is it just an overall change in discretionary spending patterns?

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Speaker 6: What is it?

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Speaker 8: Yeah, so the macro economy has been you know, good

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Speaker 8: and bad. Consumer has been doing well. Little Lemon, you

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Speaker 8: could argue sits in the affluent space of activewear. But

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Speaker 8: that said, it's not that the customer is pressured and

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Speaker 8: that's why their sales have fallen. It is that they

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Speaker 8: have lacked innovation and execution has been weak. So the

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Speaker 8: key here is a company specific issue that they need

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Speaker 8: to resolve, and they are working towards it. We will

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Speaker 8: be getting a new CEO, hopefully at some point in

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Speaker 8: twenty twenty six, and it'll really be then where we

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Speaker 8: can see who comes in, what's the strategy, and how

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Speaker 8: does lulle Lemon re engage. It's for a customer that

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Speaker 8: probably still loves the brand but just hasn't found enough

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Speaker 8: new to keep going back and back.

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Speaker 7: Yeah.

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Speaker 3: Absolutely.

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Speaker 2: I think about the competitors that Lululemon faces in the space.

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Speaker 2: It ranges from Jerry to all the other big names

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Speaker 2: out there, including Nike, which offers perhaps similar at leisure

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Speaker 2: wear but at a lower price point too. When it

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Speaker 2: comes to this new CEO, Calvin McDonald, the currency is

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Speaker 2: such as step down at the end of January, and

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Speaker 2: I know Elliott has been a big player in pushing

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Speaker 2: for Jane Nielsen, the former CFO at Ralph Lauren, to

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Speaker 2: replace him. What's the latest on that. Do we presume

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Speaker 2: that Jan Nielsen is going to be the next CEO?

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Speaker 8: I mean we don't know yet right, so it's definitely

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Speaker 8: one of the contenders and could be. And I think

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Speaker 8: as long as they get a product led executive, which

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Speaker 8: he is, Little Lemon could be in good hands to

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Speaker 8: continue this turnaround.

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Speaker 2: So founder Chip Wilson is also kind of involved here.

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Speaker 2: That's another name that we haven't heard from in a while.

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Speaker 2: He founded the company. He no longer sits on the board,

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Speaker 2: but he still owns about nine percent of the stock.

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Speaker 2: How much do you pay attention to what he says?

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Speaker 8: Who know, we definitely look at it. Look what he

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Speaker 8: said was important. He counted the company, the company was

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Speaker 8: grounded on innovation, on products, and I think he makes

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Speaker 8: fair points that the company needs to kind of really

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Speaker 8: re engage to the customer and go back to its roots,

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Speaker 8: which is are you still ahead of the competition? Like

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Speaker 8: you know you mentioned earlier competition has increased, and it has,

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Speaker 8: but competition was always there. But where is Little Lemon

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Speaker 8: ahead of it? Can you get similar at leisure pants

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Speaker 8: or leggings at Vori or at Aloe or at Leta.

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Speaker 8: How does Little Lemon stand out today? And that's the

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Speaker 8: big question that they need to answer.

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Speaker 5: Punam What might be the next drivers of revenue growth

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Speaker 5: for Lululemon.

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Speaker 7: It's all product.

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Speaker 8: I think you know, they are engaging in new product innovation,

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Speaker 8: and as we see that roll out and see that resonate,

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Speaker 8: we think that is what will drive back traffic. Little

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Speaker 8: Lemon was a store in the mall that for me

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Speaker 8: was like Apple right, no matter how dead the mall was,

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Speaker 8: the store had people in it. Today when I walk in,

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Speaker 8: that is not the case. So to see that comeback

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Speaker 8: is going to be driven by two things. In my mind,

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Speaker 8: one is execution and the other is product.

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Speaker 3: Stay with us from Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: I'm Scarlett Foo and we've got some news about the

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Speaker 2: top AI company, kind of the poster child for AI,

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Speaker 2: in Vidia teaming up with the top pharma name Eli Lilly.

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Speaker 2: The two are going to work together within Nvidia investing

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Speaker 2: a billion dollars into an AI drug laboratory. What does

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Speaker 2: that mean? What are they going to use it? For

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Speaker 2: Let's bring in Sam Fizzelli. He has Bloomberg Intelligence's director

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Speaker 2: of Research for Global Industries and senior pharmaceuticals analysts. He

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Speaker 2: always gives us his read on the biotech sector. Sam,

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Speaker 2: good to speak with you. How do you make sense

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Speaker 2: of this headline in Vidia investing a billion dollars in

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Speaker 2: an AI drug lab with Eli Lilly got it.

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Speaker 9: Very nice to talk to you again today. Look, I

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Speaker 9: think these are the brillion dollar club getting together.

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Speaker 7: A billion dollars is probably dropping.

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Speaker 9: The ocean for both of them is over five years,

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Speaker 9: and I think the aim of this, at the end

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Speaker 9: of the day is to try and automate and speed

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Speaker 9: up as much of the partly the drudgery of doing

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Speaker 9: lab work, because lab work just like as if you

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Speaker 9: were a doctor in a clinical setting, you need to

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Speaker 9: take a lot of notes, a lot of details. But

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Speaker 9: at the same time, I think they're investing in what

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Speaker 9: appears to be automating twenty four to seven experiments, things

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Speaker 9: that human beings just can't do. And I know, having

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Speaker 9: been a scientist, that sometimes your life is on hold

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Speaker 9: because you have to go back and deal with your experiments, yourselves,

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Speaker 9: or whatever it is that you're running, So a lot

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Speaker 9: of these things I think could speed up and also

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Speaker 9: make the life of the scientists.

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Speaker 7: A little bit easier.

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Speaker 9: At the end of the day, though, I think the

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Speaker 9: aim here is to try and get scientific discoveries translated

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Speaker 9: to drugs quicker and get them to mark quicker.

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Speaker 5: Sam. What does this mean for ELI Lilly's rivals? Do

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Speaker 5: you expect that we'll see some of its competitors also

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Speaker 5: ramp up their AI endeavors given its partnership with the

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Speaker 5: company like Nvidia.

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Speaker 7: Well a lot of pretty much all pharma companies.

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Speaker 9: Then I just want to point you to a recent

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Speaker 9: survey that EI Bloomberg Intelligence has done that looked at

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Speaker 9: ten different industries, one of which being the pharmaceutical industry,

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Speaker 9: asked executives, what are you doing with this?

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Speaker 7: What are you trying to get to? What is the aim?

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Speaker 7: At the end? Everybody is at this.

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Speaker 9: This is not something specific to Lily and you know Google,

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Speaker 9: for example, has has through Deep Mind, has created an

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Speaker 9: ergentic AI called Google Scientists. Is like I think four

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Speaker 9: agents or five agents who interact with each other and

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Speaker 9: check each other's hypothesis.

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Speaker 7: So a lot of this is going on.

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Speaker 9: In all companies, but of course, here we have Lily,

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Speaker 9: one of the richest farmer companies around in terms of

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Speaker 9: the amount of cash browd that's got really being able

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Speaker 9: to who spend the money with that really impacting it.

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Speaker 7: It's balance sheet and cash flow.

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Speaker 9: And I'm pretty sure everybody's at this, but really this

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Speaker 9: is the Newstjule if you like absolutely.

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Speaker 2: Like you said, it's a drop in the bucket for

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Speaker 2: both of these companies. But when you have a number

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Speaker 2: like one billion dollars and these big brand names, it

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Speaker 2: gets people's attention. What also gets my attention, Sam, is Maderna.

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Speaker 2: Maderna obviously one of the vaccine makers during the pandemic,

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Speaker 2: but it's had a rough go at it recently because

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Speaker 2: it's so dependent on these vaccines and we have an

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Speaker 2: administration that is kind of anti vaccine right now. Yet

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Speaker 2: madernal pre announced at the JP Morgan Healthcare conference that

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Speaker 2: it's US COVID business did better than expected.

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Speaker 3: Is Maderna starting to stabilize.

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Speaker 7: Well, one would hope.

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Speaker 9: So that's stuck with their aim of growing twenty twenty

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Speaker 9: six point ten percent.

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Speaker 7: But you know, if you look back at the beginning

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Speaker 7: of the year, where.

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Speaker 9: The company in twenty twenty five started with guidance and

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Speaker 9: where we ended up, we're a good five six hundred

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Speaker 9: million dollars short of what the hope was at the

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Speaker 9: beginning of the year. So everybody, I think it knows

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Speaker 9: that this is a very difficult market to call for

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Speaker 9: exactly the reasons you just highlighted. There is a constant

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Speaker 9: change in the way that the administration in the US

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Speaker 9: and not just the US elsewhere is also dealing with vaccination,

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Speaker 9: particularly in the COVID side of things. Other vaccinations are

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Speaker 9: still pretty much well settled and at least outside the US.

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Speaker 9: The problem was so that MODERNA is going to face

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Speaker 9: or has been facing, is that there are lots of

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Speaker 9: people that I think my patent colleagues say there at

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Speaker 9: this twenty various directions of legal cases or trials going

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Speaker 9: on different groups saying you're infringing my patterns, so you

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Speaker 9: in fringe my patterns, and you need.

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Speaker 7: To because there was billions and billions of dollars revenues.

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Speaker 9: So some of that is coming potentially in the March timeframe,

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Speaker 9: pretty lightly against a trial coming up against our breaches

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Speaker 9: another company that's listed in the US. So some of

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Speaker 9: that is I think something that might keep people from

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Speaker 9: getting too excited about modern as guidance today.

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Speaker 3: Sam very quickly.

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Speaker 5: Obviously, the end of the pandemic has made it hard

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Speaker 5: for pharmaceutical companies US officials curbing the people who are

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Speaker 5: eligible for them. What then, are the next growth catalysts

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Speaker 5: for vaccine makers?

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Speaker 9: Oh, well, I think a lot of these companies are

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Speaker 9: trying to use the technology, which is the mRNA technology,

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Speaker 9: those with an mRNA technology to develop cancer therapies.

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Speaker 7: You remember, at the end of the day, what you're

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Speaker 7: trying to do is get an.

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Speaker 9: Immune response, which is what vaccines do against something relatively

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Speaker 9: foreign in infectious diseases Eca virus. In cancer, you're trying

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Speaker 9: to get cancers that's killed and recognized by the immune system.

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Speaker 7: That's where these guys are great.

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Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast live weekdays at

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Speaker 1: ten am. He's done on Apple, Cocklay and Android Auto

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Speaker 1: with the Bloomberg Business app. Listen on demand wherever you

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Speaker 1: get your podcasts, or watch us live on YouTube.

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Speaker 6: You know the Bonnie Rate song I Don't I Can't

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Speaker 6: Make You Love Me?

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Speaker 5: You have to sing it for us?

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Speaker 6: Well, no, I'll spare you that. I feel like that's

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Speaker 6: how Paramounts sky dances. Feeling that dramas is never ending,

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Speaker 6: they made some new moves to try and get Warner

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Speaker 6: Brothers to dump Netflix and choose them. And Keith Ranganathan

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Speaker 6: with Bloomberg Intelligence is here. She's going to try to

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Speaker 6: sort this out for us. Do I sense a desperation

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Speaker 6: on the part of Paramount's sky dance. It seems not

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Speaker 6: the cost of getting Warner Brothers, but the cost of

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Speaker 6: not getting Warner Brothers, that's the big issue.

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Speaker 10: Yeah, absolutely, John, You're absolutely right. And this is the truth.

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Speaker 10: This is the hard hitting truth for really all of

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Speaker 10: these legacy media companies, right, you know, how much are

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Speaker 10: they going to lose out if Netflix actually does go up,

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Speaker 10: you know, end up winning this whole bidding war for

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Speaker 10: Warner Brothers. And that's really what we see today from

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Speaker 10: Paramount basically, you know, uh, the whole letter to shareholders

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Speaker 10: as well as the legal the lawsuit that they've that

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Speaker 10: they just filed basically threatening a proxy fight. So things

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Speaker 10: are kind of getting very very interesting, somewhat I would say,

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Speaker 10: even somewhat ugly.

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Speaker 5: Jifah, I'm just reading this report It says that the

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Speaker 5: lawsuit is aiming to force out into the open more

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Speaker 5: details about Netflix's takeover agreement. What exactly is this lawsuit alleging?

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Speaker 5: What is it supposed to do here? And is it

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Speaker 5: just posturing?

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Speaker 10: Perhaps it's a yeah, I think it's all of the above, Alex.

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Speaker 10: So really, what we're you know, so we have one

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Speaker 10: number which is there for the streaming and the studio assets.

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Speaker 10: Remember the whole Warner Brothers transaction is about two different

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Speaker 10: uh units really, so one is the streaming and the

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Speaker 10: studio assets, and for that we already have a deal

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Speaker 10: from Netflix for about twenty eight dollars a share. Now,

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Speaker 10: what is a shear What is really, so to speak,

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Speaker 10: in the air, so to speak, is the remaining part

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Speaker 10: of the business, which is the TV network business, what

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Speaker 10: is called the global networks or Discovery Global. And here

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Speaker 10: is where, you know, there is a lot of questions

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Speaker 10: about where exactly that should be valued. So Paramount pretty

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Speaker 10: much has come out and said that it should be

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Speaker 10: valued at zero dollars a share. And they base their

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Speaker 10: argument on the recent trading debut of Versunt, which is

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Speaker 10: the cable network spinoff from Comcast, which has fared really

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Speaker 10: really poorly. In its first week, the stock off almost

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Speaker 10: thirty percent, and so that you know, Paramount kind of

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Speaker 10: using that as their defense for valuing these Water Brothers

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Speaker 10: networks next to nothing. Warner Brothers, on the other hand,

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Speaker 10: obviously internally has a number for those networks. They you know,

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Speaker 10: according to reports, I think it's worth about three to

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Speaker 10: four dollars a share. So that's really where a lot

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Speaker 10: of this discrepancy is kind of stemming from. And what

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Speaker 10: Paramount is asking in this lawsuit is to really clarify

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Speaker 10: all of these aspects. What is the stub value, what

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Speaker 10: is you know, what are all the different financial details

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Speaker 10: on the Netflix deal, and what is the risk adjusted

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Speaker 10: uncertainty that you know, Warner Brothers is ascribing to the

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Speaker 10: thirty dollars offer from Paramount, So they say they're really

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Speaker 10: asking WBD to kind of spell it all out and

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Speaker 10: come out in the open.

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Speaker 6: So, I mean, are they doing this on the cheap? Whint?

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Speaker 6: It's just pony up more money? Uh Paramount?

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Speaker 10: Yeah, So you know right now there, you know, offer

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Speaker 10: is obviously thirty dollars a share, which Warner Brothers has

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Speaker 10: called inadequate and inferior to the Netflix deal of course,

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Speaker 10: you know, Paramount keeps arguing that their offer is all

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Speaker 10: cash versus Netflix, which is you know, partly cash and

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Speaker 10: partly stock. And you know, the stock is obviously has

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Speaker 10: been really like it's it's been going down in value,

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Speaker 10: so again that part of it is a little bit

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Speaker 10: of a question mark, but really this is you know,

440
00:21:55,520 --> 00:21:57,640
Speaker 10: I think ultimately what's going to happen is they are

441
00:21:57,680 --> 00:21:59,520
Speaker 10: going to have to sweeten the deal. There is no

442
00:21:59,520 --> 00:22:01,640
Speaker 10: doubt about that because we haven't seen a whole lot

443
00:22:01,640 --> 00:22:04,560
Speaker 10: of faction in terms of the Warner Brothers shareholders actually

444
00:22:04,640 --> 00:22:07,720
Speaker 10: tendering their shares, and that's really what it's going to

445
00:22:07,720 --> 00:22:09,359
Speaker 10: come down to. So only about two percent of the

446
00:22:09,400 --> 00:22:12,479
Speaker 10: shares have been tendered, which means that the shareholders are

447
00:22:12,480 --> 00:22:16,560
Speaker 10: really waiting for a higher bid. So Paramount I think

448
00:22:16,680 --> 00:22:19,600
Speaker 10: has to you know, raise the offer ultimately.

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00:22:19,520 --> 00:22:21,800
Speaker 5: Keith, it kind of feels like this bidding war has

450
00:22:21,840 --> 00:22:24,840
Speaker 5: no end in sight. We get some new escalation every day.

451
00:22:24,840 --> 00:22:29,679
Speaker 5: From a regulatory perspective, perhaps, is there any limitation for

452
00:22:29,760 --> 00:22:32,560
Speaker 5: how much longer this can go on? And what does

453
00:22:32,600 --> 00:22:35,520
Speaker 5: it do for the terms of the deal for you know,

454
00:22:35,560 --> 00:22:36,960
Speaker 5: if it keeps shrogging on much.

455
00:22:36,760 --> 00:22:40,560
Speaker 10: Longer, Yeah, it's definitely not good for anybody, right. It

456
00:22:40,640 --> 00:22:43,080
Speaker 10: just kind of keeps adding to the uncertainty here. But

457
00:22:43,119 --> 00:22:45,200
Speaker 10: in terms of the dates and what we know so far,

458
00:22:45,800 --> 00:22:49,720
Speaker 10: January twenty first, so far is the deadline that Paramount

459
00:22:49,800 --> 00:22:53,720
Speaker 10: has set for the Warner Brothers Discovery shareholders to tender

460
00:22:53,760 --> 00:22:56,040
Speaker 10: their shares. Now, they can very well come back and

461
00:22:56,160 --> 00:23:00,320
Speaker 10: extend that deadline, or you know, they may not. They

462
00:23:00,320 --> 00:23:02,119
Speaker 10: may choose to walk away from the deal, or they

463
00:23:02,200 --> 00:23:04,840
Speaker 10: may you know, choose to raise the offer. So again,

464
00:23:04,960 --> 00:23:07,919
Speaker 10: a lot up in the air at this point. Just

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00:23:08,000 --> 00:23:10,119
Speaker 10: it's we're kind of playing a waiting game here, Alex.

466
00:23:10,440 --> 00:23:13,320
Speaker 6: What would they what a proxy fight? What would that

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00:23:13,359 --> 00:23:13,760
Speaker 6: look like?

468
00:23:14,920 --> 00:23:17,240
Speaker 10: That is going to be really ugly, And I don't think,

469
00:23:18,119 --> 00:23:21,240
Speaker 10: you know, obviously that kind of changes a lot of things,

470
00:23:21,480 --> 00:23:26,600
Speaker 10: you know. I think the Warner Brothers Discovery shareholders, however,

471
00:23:26,760 --> 00:23:30,000
Speaker 10: do believe that the board the management is doing the

472
00:23:30,080 --> 00:23:33,240
Speaker 10: right thing. I think they do believe that the Netflix

473
00:23:33,240 --> 00:23:35,320
Speaker 10: offer is actually superior, and I think that they do

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00:23:35,400 --> 00:23:38,159
Speaker 10: believe that the TV networks are actually worth something, something

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00:23:38,520 --> 00:23:42,639
Speaker 10: much more than what Paramount is suggesting. So again, I

476
00:23:43,080 --> 00:23:45,440
Speaker 10: don't necessarily know that a proxy fight would be productive

477
00:23:45,440 --> 00:23:46,480
Speaker 10: for Paramount.

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00:23:46,760 --> 00:23:51,439
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