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Speaker 1: You're listening to Bloomberg Markets with Bonny Quinn and Paul

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Speaker 1: Sweeney on Bloomberg Radio. Well, over the last couple of weeks,

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Speaker 1: we've seen obviously a rise, a surge, if you will,

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Speaker 1: in civil unrest, public demonstrations, uh, stemming from the death

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Speaker 1: of George Floyd and the use of police force against minorities.

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Speaker 1: And there's actually been the use of various forms of

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Speaker 1: the U. S military to deal with this. A number

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Speaker 1: of retired generals and animals have spoken out with alarm

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Speaker 1: really about adding active duty military to law enforcement and

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Speaker 1: using the Insurrection Act to get that done. We are

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Speaker 1: so fortunate this morning to have retired Admiral UH, Navy

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Speaker 1: Admiral James Stavrita's former military commander and NATO and a

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Speaker 1: Bloomberg Opinion commons to join US. Admiral, thanks so much

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Speaker 1: for taking your time. You wrote a column uh just

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Speaker 1: recently about uh, you know, using US active duty military

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Speaker 1: for some of these civil issues. Give us your thoughts

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Speaker 1: and that you're that you want to express as well

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Speaker 1: some of your colleagues in senior military. Sure, let's start,

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Speaker 1: Paul with just kind of doing the numbers around the

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Speaker 1: country and matching the challenges with what resources are available.

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Speaker 1: So in this country there are close to a million

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Speaker 1: law enforcement officers and then we also have five hundred

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Speaker 1: thousand National Guard. These are uniformed personnel. They're associated with

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Speaker 1: the Department of Defense, but key difference they work for governors,

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Speaker 1: their citizens soldiers. They're not full time soldiers. So when

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Speaker 1: you add up law enforcement and National Guard, it's one

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Speaker 1: point five million. Um. I have not seen anything in

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Speaker 1: the challenges of protecting these protesters, making sure these demonstrations

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Speaker 1: stay peaceful, stopping any violent crime, stopping looting, those are

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Speaker 1: all real challenges, but it is a set of challenges

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Speaker 1: one point five million men and women can handle. So

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Speaker 1: my view and that of many of my senior military colleges,

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Speaker 1: don't take the active duty military, who are sworn to

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Speaker 1: uphold the Constitution in the United States, who have a

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Speaker 1: significant role defending the nation outside of our national borders.

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Speaker 1: Don't bring those active duty folks inside the country and

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Speaker 1: apply them against protesters. Not an appropriate use of the

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Speaker 1: Department of the Defense active duty personnel. Yeah, Admiral's Tavrida's

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Speaker 1: it's money. Just on that note, I mean, it's very

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Speaker 1: unusual to see retired officers speaking out about a candidate

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Speaker 1: or a party, or particularly what a president might say.

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Speaker 1: And we saw it this time. We not just saw

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Speaker 1: it from one what we saw it from several four

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Speaker 1: former chairman of the Joint chiefs of Staff in fact.

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Speaker 1: So it's not just that it's ill advised, it's actually

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Speaker 1: being condemned, would you say it is? And this is

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Speaker 1: a really import and point, Vonnie. I've never seen the

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Speaker 1: entire active duty four star military community so significantly united

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Speaker 1: on a key issue. So it goes from people like

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Speaker 1: General Maddis and General Kelly who are actually part of

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Speaker 1: the administration at one time and have been very ritiscent

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Speaker 1: about speaking out across the spectrum, to people like Admiral

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Speaker 1: mccraven or General John Allen who have been fairly critical

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Speaker 1: of the president. Two people like myself, we're kind of

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Speaker 1: centrists who are in the middle. As you mentioned four

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Speaker 1: chairmen and the Joint chiefs of Staff. That's really quite

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Speaker 1: remarkable to get that unanimity of view across this whole community,

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Speaker 1: and it's because it really touches the nerve when you

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Speaker 1: send active duty military against the citizens in this country.

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Speaker 1: It should only be done in extreme circumstances. Um, And

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Speaker 1: this does not appear to be a moment that would

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Speaker 1: call for that Admiral. On Sunday, Colin Palcole and Paliform

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Speaker 1: and UH Joint Chiefs and Chairman and Secretary of State

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Speaker 1: call that Republican lawmakers for really having quote nothing to

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Speaker 1: say about President Trump's militarization of protest security. What is

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Speaker 1: your sense of kind of what your expectations are for

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Speaker 1: what Congress should be doing here as it relates to

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Speaker 1: the military's use. Well, I I stand with General Powell

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Speaker 1: on this, and and I think the way to phrase

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Speaker 1: it is the way you just did, Paul is Um,

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Speaker 1: it's not incumbent just upon Democrats or just upon Republicans

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Speaker 1: to stand up in this moment. And this really touches

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Speaker 1: on why are these protests occurring. This is a significant

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Speaker 1: moment in American history. We need the Congress to be

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Speaker 1: part of the solutions. And so that runs the gamut

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Speaker 1: I would say from UH initiating appropriate reform in police

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Speaker 1: departments around the country. It includes calling on the administration

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Speaker 1: the executive branch not to use active duty military against

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Speaker 1: peaceful protesters. UM. It includes providing resources to address the

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Speaker 1: economic impact that comes out of COVID. So we need

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Speaker 1: our Congress to step up on all those kinds of issues.

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Speaker 1: I have tried to shine a spotlight on this issue

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Speaker 1: of active duty military not being used against these protests. Yeah,

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Speaker 1: and real stupid, as you've just said a few moments ago,

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Speaker 1: that this is not the moment for it. Do you

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Speaker 1: ever envisage that there might be a moment for it's

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Speaker 1: that the active military would be called out against US citizens.

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Speaker 1: I think it's unlikely, but it has happened a couple

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Speaker 1: of times in our history. Um. Once was most recently

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Speaker 1: in the Los Angeles riots in the early nineties. And

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Speaker 1: and here's a key distinction, Vonnie, if we are going

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Speaker 1: to bring active duty in in a moment like that

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Speaker 1: where a city is on flames, and um, there's really

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Speaker 1: no semblance of order in the city. It's got to

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Speaker 1: be under local authorities. It can't be driven from Washington,

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Speaker 1: d C. And a circumstance like that. And then a

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Speaker 1: second example would be back in the sixties when some

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Speaker 1: of the southern states refused to integrate their schools and

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Speaker 1: federal truths were required during the Kennedy administration. So yes,

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Speaker 1: there are extreme circumstances where this might be called for,

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Speaker 1: this is not one of them, and never should active

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Speaker 1: duty military be used against peaceful protesters. That's a violation

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Speaker 1: of the constitution. Admiral, just about the thirty seconds here,

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Speaker 1: what did you think of General Mark Milly, the current

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Speaker 1: Chairman of the Joint Chiefs, accompanying the President Lafayette Square.

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Speaker 1: I think it was a mistake, and I think of

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Speaker 1: General Milly had that one to do over again, he

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Speaker 1: would not have done so short of a direct order. UM.

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Speaker 1: I know he is uncomfortable being involved in politics and

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Speaker 1: he knows that's not his role. I I thank god

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Speaker 1: that he did not appear in the photo op on

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Speaker 1: the steps of the church. Um, let's hope that he

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Speaker 1: can stay out of politics. We need the military to

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Speaker 1: stay out of politics the act of duty military. Admiral

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Speaker 1: steud is definitely looking forward to reading more of your opinions.

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Speaker 1: Always enjoy listening to what you have to say. Of course,

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Speaker 1: former military commander of NATO and a Bloomberg Opinion columnistics

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Speaker 1: ordinarily decorated soldier as well, So thank you in general

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Speaker 1: for for joining us so Paul, it is really an

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Speaker 1: interesting time and of course you know a couple of

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Speaker 1: presidents cited, and I think that that moment has passed

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Speaker 1: in this particular you know week of social unrest, but

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Speaker 1: it came close at one one or two points there

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Speaker 1: last weekend to it definitely escalating for the worst it was.

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Speaker 1: And I think the Admiral's commentary about the kind of

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Speaker 1: you know, mixing politics with the military is it's a

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Speaker 1: it's a it's something that he's been concerned about, I

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Speaker 1: know really for the last several years and again having uh,

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Speaker 1: you know, probably come into the four where once again

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Speaker 1: with some of these civil unrest and demonstrations and and

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Speaker 1: the use of the military in kind of managing them.

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Speaker 1: Time for Bloomberg Opinion. Let's turn to Bloomberg Opinion columns

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Speaker 1: Tara la Chappelle. She covers entertainment, telecommunications and deals for

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Speaker 1: Bloomberg Opinion. Tara, thanks so much for joining us here.

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Speaker 1: You know, I'm a big fan of m and a market.

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Speaker 1: Like to see deals come across the tape. Usually on

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Speaker 1: that Merger Monday, we see some big deals and I

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Speaker 1: always the first thing I do when I see a deal,

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Speaker 1: uh story out as I go to the bottom of

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Speaker 1: the story to see who the advisors are on the deal.

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Speaker 1: Talk to us a little bit about what's happening in

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Speaker 1: the world of M and A. How are bankers getting

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Speaker 1: deals done? Yes, I mean the world of M and

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Speaker 1: A is is very old school, and that it all

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Speaker 1: still revolved around meeting in person. You know, the handshake

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Speaker 1: is the final way to steal the deal. And it's

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Speaker 1: a lot of travel and you know, I think some

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Speaker 1: bankers you know, would still be willing to get on

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Speaker 1: a plane for you know, something a hundred billion dollar

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Speaker 1: deal like the astro Zenica UM talks that were reported

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Speaker 1: over the weekend with Gill lead. But at the same time,

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Speaker 1: I think, you know, a lot of people are still

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Speaker 1: reluctant to travel UM. A lot of CEOs, especially at

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Speaker 1: companies that are a bit more tech savvy like Verizon

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Speaker 1: we saw this with for instance, are willing to look

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Speaker 1: at doing pretty sizeable deals negotiating them over things like

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Speaker 1: Zoom video conferences. In the case of Verizon, just a

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Speaker 1: few weeks ago, they bought a company called Blue Jeans Networks,

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Speaker 1: which happens to be a video conferencing company a lot

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Speaker 1: like Zoom, and so they bought a video conferencing company,

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Speaker 1: but they also negotiated that deal over video chat, which

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Speaker 1: is really unusual for the M and A world, And

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Speaker 1: I think it's something more and more bankers and CEOs

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Speaker 1: are going to start to embrace in these next few

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Speaker 1: months and quarters. As you know, people are still a

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Speaker 1: little bit hesitant to go completely back to normal. So Tara,

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Speaker 1: in your opinion piece today, you point out that M

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Speaker 1: and A is actually down fift this year, but may

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Speaker 1: pick up eventually when when things start to reopen a

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Speaker 1: little wider across the United States. But in terms of

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Speaker 1: these deals that you are seeing, that four hundred million

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Speaker 1: dollar deal for Blue Jean's networks, for example, are they

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Speaker 1: because of the pandemic or had they been envisaged before

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Speaker 1: the pandemic. I think you know what we're hearing is

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Speaker 1: that there were deals that were probably in the works

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Speaker 1: just before the pandemic, maybe even some transactions that were

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Speaker 1: pretty close to getting announced or you know, getting close

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Speaker 1: to agreeing on the terms at least, and then the

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Speaker 1: crisis hit and it kind of just puts everything on hold.

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Speaker 1: It would make sense for bankers to kind of go

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Speaker 1: after those deals first and try to get those across

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Speaker 1: the finish line. Now, if the strategic logic is still

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Speaker 1: there and if you can still come to some sort

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Speaker 1: of agreement on the price, which is obviously difficult. We're

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Speaker 1: seeing that in the case of Tiffany and l V

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Speaker 1: m H, where they probably both still want to do

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Speaker 1: the deal, but the price may not make as much

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Speaker 1: sense at this point. Um. But then I think there

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Speaker 1: are other industries where, you know, some of these companies

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Speaker 1: are still flush with cash, they still have growth needs,

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Speaker 1: and it probably makes sense if they can get any

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Speaker 1: company is a little bit cheaper because of this, that

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Speaker 1: it makes sense to do that. Of course, there's not

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Speaker 1: a whole lot of opportunities for it since the market

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Speaker 1: is up the way it is, but I still think,

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Speaker 1: you know, all roads are going to lead to deals

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Speaker 1: with this. I think there's just a lot of pent

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Speaker 1: up demand and a lot of companies that need the growth. So, Ara,

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Speaker 1: what are you hearing about when you when you talk

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Speaker 1: to bankers across the street and other sources you have.

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Speaker 1: I mean, is the expectation that the M and A

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Speaker 1: market's really not going to come back until we really,

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Speaker 1: you know, get a vaccine and kind of put this

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Speaker 1: pandemic behind us, or is there a sense that you know,

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Speaker 1: companies and bankers and lawyers can adapt and can kind

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Speaker 1: of start getting things done even beforehand. Well, we'll see.

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Speaker 1: I do think so that bankers are going to try

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Speaker 1: their darndists to try to get deals done. You know,

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Speaker 1: I think that they know there are companies that were

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Speaker 1: on the lookout for deals before this, So why not

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Speaker 1: keep trying and why not try to adapt to this

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Speaker 1: you know, new normal, if you want to call it that,

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Speaker 1: you know, we are seeing you know, and tells that

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Speaker 1: a deal over zoom video chat. As more and more

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Speaker 1: companies become comfortable with, you know, not meeting as often

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Speaker 1: in person, not doing as much travel, having to do

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Speaker 1: diligence and do due diligence, and new kind of inventive ways,

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Speaker 1: you could see some companies more comfortable with that than others,

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Speaker 1: you know, some industries that might just be hard to do.

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Speaker 1: Like I've heard investor's kind of half jokingly say that

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Speaker 1: a big oil giant that wants to survey some land

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Speaker 1: for a beleaguered oil company somewhere in America could use

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Speaker 1: a drone, let's say, to try to look at that

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Speaker 1: land and look at that property, which I don't know

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Speaker 1: how feasible that is but I do think people are

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Speaker 1: starting to think, you know, how can we look at

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Speaker 1: this differently and still get deals done? Yeah? I mean definitely,

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Speaker 1: dnes are being used in all sorts of sectors. Why

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Speaker 1: not this one? Right? Talk to us about companies also

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Speaker 1: getting ready for an onslaught of interested buyers. You site

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Speaker 1: a statistic which states that more than two dozen public

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Speaker 1: companies adopted so called poison pills between March and mid April.

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Speaker 1: Why is that? Yeah, this is fascinating. So a law firm,

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Speaker 1: I believe it was K and L. They said that

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Speaker 1: more than two dozen US companies have adopted poison pills,

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Speaker 1: which is a lot more than we saw last year.

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Speaker 1: And I think that tells you that there are vulnerable companies,

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Speaker 1: companies that were probably you know, their businesses were shut

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Speaker 1: during these lockdowns and really affected by the lack of

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Speaker 1: consumer demand. That they are worried about activist shareholders coming

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Speaker 1: in now or opportunistic buyers. You know, pe firms are

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Speaker 1: going to be on the prow and I think they're

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Speaker 1: starting to put their guards up and say, you know,

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Speaker 1: we we don't want to be bought on the sheep.

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Speaker 1: We don't want to be you know, take an advantage

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Speaker 1: of in this crisis. So you're starting to see some

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Speaker 1: companies put up their defenses. But I think it's interesting

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Speaker 1: because just the environment that we're in right now, so

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Speaker 1: there's been a lot of social activism over inequality. You know,

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Speaker 1: we have the unemployment rate as high as it is,

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Speaker 1: it's a really touchy thing to have an activist campaign

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Speaker 1: or pe company, you know, using this as an opportunity

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Speaker 1: like that. Tara, thank you so much for we're joining us.

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Speaker 1: We always love having you on Terra La Chapelle Entertainment,

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Speaker 1: Telecommunications and deals columns for Bloomberg Opinion. You can read

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Speaker 1: Terror's work at Bloomberg dot com, Slash Opinion plus all

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Speaker 1: the other great opinion columns that we have. You can

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Speaker 1: also get it at O. P. I N Go on

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Speaker 1: the Bloomberg terminal. The Bloomberger Opinion folks do outstanding work.

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Speaker 1: I highly recommend it. Well. Some big news out of

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Speaker 1: Apple today, not necessarily a new product introduction or a

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Speaker 1: new phone or anything like that, but certainly news on

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Speaker 1: the back end they're going to make their own chips

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Speaker 1: and what does this really mean for Apple and for

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Speaker 1: other players in that tech supply chain. To answer that

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Speaker 1: we welcome Dan Ives. He's an equity analyst at wed

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Speaker 1: Bush Securities and a Penn State alum. I should know Dan.

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Speaker 1: Thanks so much for joining us here. How big is

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Speaker 1: this news from Apple about their chips. Yeah, it's great

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Speaker 1: to be here. It's big in terms of you know,

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Speaker 1: cooking Coopercino of talk for over a decade about this

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Speaker 1: potential move, and it's really shot across about Intel and

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Speaker 1: other semi players that Apple is just going to have

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Speaker 1: more and more control of their devices. You've seen it

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Speaker 1: on the iPhone. Now it goes to the max. And

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Speaker 1: I think this is gonna be a trend. You're gonna

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Speaker 1: see more and more as Apple looks from more full

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Speaker 1: control over its devices. So Dan also thinking about do

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Speaker 1: they make chips for their other products as well or

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Speaker 1: as just just for the back Yeah, if you look

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Speaker 1: on the processors side, they've done it from a chip

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Speaker 1: perspective in their iPhones as well as some of their

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Speaker 1: other chord devices. And now there was a view that

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Speaker 1: this Mac move maybe could have happened three or four

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Speaker 1: years ago, but in terms of some of the technology

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Speaker 1: innovations on the arms side, wasn't there. This is probably

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Speaker 1: about a year ahead expectations. If you look relative to

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Speaker 1: the streets perspective, I viewed as an incremental positive for

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Speaker 1: Apple and incremental negative for Intel, just given what this

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Speaker 1: really says about going forward in terms of how Apple

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Speaker 1: is really viewing the chip ecosystem, especially in their own devices.

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Speaker 1: Now we knew this was coming for a little bit

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Speaker 1: of time done, So why is the market reacting now?

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Speaker 1: Because this has really been something it's always on the

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Speaker 1: com I mean, if you go back two thousand and

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Speaker 1: five when Cook talked, you know, and when they were

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Speaker 1: to talk about the grand vision from Apple, but it

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Speaker 1: was thought that this is something from a Mac perspective

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Speaker 1: that really couldn't happen. The fact that they ripped the

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Speaker 1: band aid off and now it's going to be likely

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Speaker 1: announcing June at the Virtual Developer Conference. It's a surprise,

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Speaker 1: and I think it just shows the innovation that Apple

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Speaker 1: has been taking. More and more, even when you look

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Speaker 1: at some of the five G battle versus Qualcom, more

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Speaker 1: and more you're gonna see Apple continue to look to

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Speaker 1: own the chips, build it because they want more control

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Speaker 1: over their devices. And what that says for investors, it's

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Speaker 1: more margins, more cash flow. It also gives more risk

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Speaker 1: though to the company, right, because if it's if there's

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Speaker 1: any kind of supply disruption, you know, in its own ranks,

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Speaker 1: that's that's worse than than you know, if a supplier

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Speaker 1: has a supply disruption. No doubt it does put more risk.

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Speaker 1: But I've about as much confidence in Cook and Cupertino

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Speaker 1: as I do in Selly Cell and turtle Land and Airplane.

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Speaker 1: And I think it comes down to the confidence that

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Speaker 1: Cook and Apple bill with investors. The more control they have,

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Speaker 1: they have more control over launches, over timing, and over

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Speaker 1: even profitabile anywhere they could take it. So I think

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Speaker 1: this is something, at least from the vestor perspective, you

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Speaker 1: want to see have Apple have a more control. And

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Speaker 1: also it's more differentiation versus the HPS, the Della's traditional

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Speaker 1: PC given it's not the Saame chip. So Dan, you know,

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Speaker 1: I'm looking at the Apple chart here, another all time

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Speaker 1: high a day. What's the call out there on the

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Speaker 1: street here for Apple in the world of that that's

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Speaker 1: likely to be altered for the certainly the near term,

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Speaker 1: maybe intermediate term, maybe even long term. Yeah, the call

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Speaker 1: I continue view a year from now, there's a two

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Speaker 1: trillion dollar market cap, and I think the first step

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Speaker 1: is to get through this COVID nineteen dark storm, and

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Speaker 1: you've seen it get down through the services business that's

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Speaker 1: about five to six hundred billion weekly. From evaluation perspective,

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Speaker 1: now it's the drum mold to just a massive iPhone

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Speaker 1: twelve products cycle with five G we think about three

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Speaker 1: fifty million of nine fifty million iPhones world wider in

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Speaker 1: the window of an upgrade opportunity. You start to put

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Speaker 1: the math around it some of the parts. I mean,

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Speaker 1: I think this is a stock has a fore in

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Speaker 1: front of it, and I think you're going to continue

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Speaker 1: to see this get re rated. In our view on

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Speaker 1: fang stocks and tech, where we're still in the sixth

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Speaker 1: seventh inning, still think there's twenty more in this rallies

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Speaker 1: to look at the rest of the year, what's next

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Speaker 1: for what's the next sort of launch of products, and

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Speaker 1: when we'll look into we'll be ready to eat them up. Yeah,

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Speaker 1: in terms of a proper perspective, we know about iPhone twelve,

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Speaker 1: the air pods. If you look at that, they're insulated

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Speaker 1: to sell about five million units this year verse sixty

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Speaker 1: five million last year. So I think there'll be a

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Speaker 1: new device there at w launching, but the big thing

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Speaker 1: is going to be on services. Right now, the missing

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Speaker 1: piece in the puzzle is content for Apple services on

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Speaker 1: the streaming side video. I continue to think between now

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Speaker 1: and the rest of this year they look to acquire

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Speaker 1: a major Hollywood studio to fill that content void, especially

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Speaker 1: in what you're seeing from Disney, Netflix and others, HBO,

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Speaker 1: Peacock going after this massive streaming opportunity. I think that's

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Speaker 1: probably the next piece in the puzzle that investors are

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Speaker 1: hoping to see. Just Dan thinking about these fang stocks here,

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Speaker 1: just kind of rip thing once again. What's your thought

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Speaker 1: on kind of it's just this group overall, it's had

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Speaker 1: such a great run. Give us your thoughts. Look, my

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Speaker 1: view is that it's a These are safety blanket stocks,

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Speaker 1: you know, category five COVID storm, which is how they've

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Speaker 1: continued to navigate, and many of them hit all time highs.

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Speaker 1: But ultimately think the second part of that is the rebound.

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Speaker 1: I think they're stronger, forgotten stronger, and you're seeing it

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Speaker 1: from streaming in Netflix and e commerce and Amazon, social

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Speaker 1: media and engagement with Facebook and advertising and Google, and

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Speaker 1: then you look at Apple that's one where you have

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Speaker 1: a massive icepline cycle in their rise. And I still

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Speaker 1: think sang names wed this market higher and overall in tech.

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Speaker 1: That's why we continue to think it's a green light

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Speaker 1: to own these names, especially on the second half macro

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Speaker 1: recovery place, which will be the other leg in these stocks.

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Speaker 1: All right, thank you so much for joining us today.

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Speaker 1: Down always great to speak with you. That is done.

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Speaker 1: I'ves equity analyst Dad web Bush Securities, And the course,

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Speaker 1: Apple was higher today by about two and a half percent,

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Speaker 1: not the best performer among the TEX stocks, but in

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Speaker 1: the SMP five hundred it'd certainly helped. But we saw

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Speaker 1: advanced micro devices of more than five percent today, Poul

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Speaker 1: and Video up more than Yeah, it's actually the tech

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Speaker 1: stox getting a lift here and h and as Dan

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Speaker 1: has mentioned, you know, they've been obviously the drivers in

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Speaker 1: this market for more than a decade, both on the

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Speaker 1: upside and the downside. Here. So Apple another all time

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Speaker 1: high today, just extraordinary. Moving to a slightly different asset

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Speaker 1: class now on that Adventure Capital were excited to be

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Speaker 1: joined by Mark Klein, who's president and CEO of st

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Speaker 1: Rock Capital. Now, of course, some early backing. That's sort

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Speaker 1: of Rock did very profitable exits include Facebook, Twitter, drop Box,

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Speaker 1: and Lift. And the current portfolio companies include course Era, Lime,

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Speaker 1: next Door, palant Here among them as well. So clearly

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Speaker 1: some smart guys there with you, Mark, including yourself outside

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Speaker 1: of Rock Capital. Mark, give us a picture of the

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Speaker 1: environment right now, because obviously we're looking at private equity,

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Speaker 1: you know, really raining in its horns, if you like.

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Speaker 1: And I'm wondering if the same is true a venture

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Speaker 1: capital with the market drop earlier this year, did valuations

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Speaker 1: decrease significantly? Are they? Are they still at those levels

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Speaker 1: or are they coming back? Sure? Thanks luck, Um. You know,

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Speaker 1: obviously the market, the public markets collapsed at the beginning

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Speaker 1: of the COVID crisis, going down, you know, anywhere between

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Speaker 1: thirty and depending on what inducry, and they've subsequently rallied

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Speaker 1: almost all of them back about is you note NAZAC

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Speaker 1: making a new high yesterday. Um. On the venture capital side,

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Speaker 1: I think you had a bifurcation. Um. Venture capital valuations

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Speaker 1: tend to lag in the private valuations tend to lag

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Speaker 1: what happens in the public markets. And when you do

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Speaker 1: have almost a v in the in the public market.

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Speaker 1: The movements are actually pretty quick. So there were some

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Speaker 1: cases where companies were in need of financing and did

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Speaker 1: significantly down rounds UM and as, but there were others

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Speaker 1: that continue to perform and actually we're having up rounds

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Speaker 1: during the last couple of months. What we've seen in

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Speaker 1: the secondary markets is there is a fair amount of

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Speaker 1: selling that has gone on UM at discounts to UM

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Speaker 1: prior rounds that had occurred in the last three, six

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Speaker 1: or nine months. I think those are fairly fleeting, and

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Speaker 1: the opportunity set becomes, uh, the ability to move against

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Speaker 1: the opportunity set is pretty rapid as blocks of stock

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Speaker 1: come up for sale and you have to make a

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Speaker 1: determination whether you want to participate or not, and then

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Speaker 1: they move away, especially when you have equity markets rallying

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Speaker 1: like they did over the last couple of weeks. So

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Speaker 1: mark one of the areas as we think about this

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Speaker 1: pandemic world that apps uh you know, maybe as a

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Speaker 1: little bit of a beneficiaries education technology with this schooling

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Speaker 1: from home, how do you think about that space and

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Speaker 1: you know, where as what are some opportunities do you

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Speaker 1: think going forward? Sure? Um, well, I I actually think

433
00:24:16,320 --> 00:24:21,560
Speaker 1: that unlike simply a covid telwin that some other industries

434
00:24:21,600 --> 00:24:25,359
Speaker 1: are enjoying. I think you're now seeing a fundamental shift

435
00:24:25,520 --> 00:24:30,560
Speaker 1: in education and online education and just bringing it home

436
00:24:30,760 --> 00:24:34,199
Speaker 1: the idea of having a college student and let's just

437
00:24:34,200 --> 00:24:37,080
Speaker 1: say they're graduating senior starting as a freshman next year,

438
00:24:37,440 --> 00:24:40,560
Speaker 1: and that you're looking at a private education bill called

439
00:24:40,640 --> 00:24:44,040
Speaker 1: seventy five dollars a year and the first six months

440
00:24:44,119 --> 00:24:47,560
Speaker 1: is going to be spent virtually UM to go to

441
00:24:48,080 --> 00:24:51,240
Speaker 1: some very nice liberal arts school. I think that the

442
00:24:51,280 --> 00:24:54,160
Speaker 1: world is going to shift away a bit from that. UM.

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00:24:54,200 --> 00:24:57,600
Speaker 1: In the public markets, you see significant performance by some

444
00:24:57,680 --> 00:25:02,200
Speaker 1: of the online education company these like CHEG that's almost

445
00:25:02,200 --> 00:25:05,919
Speaker 1: doubled since the pandemic started, or to you, which is

446
00:25:06,280 --> 00:25:09,000
Speaker 1: about the same. So I do think the markets starting

447
00:25:09,040 --> 00:25:12,879
Speaker 1: to recognize in the public markets that the need for

448
00:25:13,080 --> 00:25:18,600
Speaker 1: online education is actually structurally shifting. We're fortunate that we

449
00:25:18,680 --> 00:25:22,000
Speaker 1: have two of those names in our portfolio, Course Era

450
00:25:22,240 --> 00:25:26,480
Speaker 1: and Course hero Um, both that are experiencing as you

451
00:25:26,520 --> 00:25:30,880
Speaker 1: can imagine, and this is documented in public information, uh

452
00:25:30,920 --> 00:25:35,160
Speaker 1: extreme you know, usage of their products and and sort

453
00:25:35,160 --> 00:25:38,440
Speaker 1: of way outside of what they had initially determined from

454
00:25:38,640 --> 00:25:41,639
Speaker 1: you know, just general understanding of the marketplace. So I

455
00:25:41,680 --> 00:25:44,720
Speaker 1: do think that there is these tail winds, uh, and

456
00:25:44,800 --> 00:25:48,120
Speaker 1: the structural shift will will lead to more and more

457
00:25:48,240 --> 00:25:53,520
Speaker 1: opportunities in the public market for private education. Private education

458
00:25:53,600 --> 00:25:57,080
Speaker 1: companies actually coming public, and there are several of them

459
00:25:57,119 --> 00:26:02,080
Speaker 1: that are now multibillion dollar privately valued companies right including

460
00:26:02,119 --> 00:26:04,600
Speaker 1: I'm sure of course Ero, which is one that you

461
00:26:04,640 --> 00:26:06,520
Speaker 1: know so many people have signed up for it still

462
00:26:06,560 --> 00:26:10,760
Speaker 1: private or involved in that. But who wins out here?

463
00:26:10,800 --> 00:26:14,080
Speaker 1: Because there are many, many great companies I'm looking at

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00:26:14,200 --> 00:26:17,080
Speaker 1: you know, the peer group of CHEG right now, and

465
00:26:17,080 --> 00:26:19,880
Speaker 1: you're seeing vite horizons. Strategic education is a very interesting

466
00:26:19,880 --> 00:26:22,920
Speaker 1: one as well. Obviously u K twelve. Does it depend

467
00:26:22,920 --> 00:26:24,720
Speaker 1: on what teachers you get? Doesn't depend on how many

468
00:26:24,720 --> 00:26:27,119
Speaker 1: people sign up? Does it depend on you know, what

469
00:26:27,280 --> 00:26:30,600
Speaker 1: you get with your certificate at the end, Well, I mean,

470
00:26:30,680 --> 00:26:35,320
Speaker 1: I think first of all, lumping all of online education

471
00:26:35,560 --> 00:26:40,280
Speaker 1: or even in one bucket is challenging. On one side,

472
00:26:40,359 --> 00:26:43,760
Speaker 1: you have the corporate training side, which is a plural

473
00:26:43,840 --> 00:26:46,960
Speaker 1: site or a skill soft. Then you go through obviously

474
00:26:46,960 --> 00:26:51,520
Speaker 1: the case you twelve, post secondary and lifelong learning, and

475
00:26:51,520 --> 00:26:55,119
Speaker 1: and I think in each segment there are clearly folks

476
00:26:55,160 --> 00:26:58,720
Speaker 1: that are executing better than others um I think. In fact,

477
00:26:58,720 --> 00:27:01,800
Speaker 1: Plura site announced that they're are doing an offering yesterday

478
00:27:01,840 --> 00:27:07,439
Speaker 1: after the stocks rallied materially during the pandemic. But I

479
00:27:07,520 --> 00:27:10,600
Speaker 1: think a lot of them have an opportunity to be successful.

480
00:27:10,640 --> 00:27:14,320
Speaker 1: I think the you know, the proverbial butts and seats

481
00:27:14,320 --> 00:27:17,199
Speaker 1: businesses I think are a little harder than uh, the

482
00:27:17,280 --> 00:27:19,960
Speaker 1: online side. But if you look at the you know,

483
00:27:20,080 --> 00:27:26,320
Speaker 1: the eu demis of the world, udacities, master classes just copies.

484
00:27:26,359 --> 00:27:28,560
Speaker 1: I mean, there's plenty of them. Hey, Mark, thanks so

485
00:27:28,640 --> 00:27:30,800
Speaker 1: much for journing us to really appreciate that Mark client

486
00:27:30,840 --> 00:27:34,160
Speaker 1: presidency of st Rock Capital based in San Francisco, on

487
00:27:34,560 --> 00:27:38,040
Speaker 1: some of the venture capital opportunities out there, and spend

488
00:27:38,080 --> 00:27:40,600
Speaker 1: some time talking about the educational technology and clearly this

489
00:27:40,720 --> 00:27:43,800
Speaker 1: pandemic world, as we all have kids at home, whether

490
00:27:43,840 --> 00:27:46,880
Speaker 1: it's grade school or college, trying to work from home

491
00:27:46,960 --> 00:27:50,080
Speaker 1: on the educational front is a challenge, to say the least,