Speaker 1: You're listening to Bloomberg Markets with Bonny Quinn and Paul
Speaker 1: Sweeney on Bloomberg Radio. Well, over the last couple of weeks,
Speaker 1: we've seen obviously a rise, a surge, if you will,
Speaker 1: in civil unrest, public demonstrations, uh, stemming from the death
Speaker 1: of George Floyd and the use of police force against minorities.
Speaker 1: And there's actually been the use of various forms of
Speaker 1: the U. S military to deal with this. A number
Speaker 1: of retired generals and animals have spoken out with alarm
Speaker 1: really about adding active duty military to law enforcement and
Speaker 1: using the Insurrection Act to get that done. We are
Speaker 1: so fortunate this morning to have retired Admiral UH, Navy
Speaker 1: Admiral James Stavrita's former military commander and NATO and a
Speaker 1: Bloomberg Opinion commons to join US. Admiral, thanks so much
Speaker 1: for taking your time. You wrote a column uh just
Speaker 1: recently about uh, you know, using US active duty military
Speaker 1: for some of these civil issues. Give us your thoughts
Speaker 1: and that you're that you want to express as well
Speaker 1: some of your colleagues in senior military. Sure, let's start,
Speaker 1: Paul with just kind of doing the numbers around the
Speaker 1: country and matching the challenges with what resources are available.
Speaker 1: So in this country there are close to a million
Speaker 1: law enforcement officers and then we also have five hundred
Speaker 1: thousand National Guard. These are uniformed personnel. They're associated with
Speaker 1: the Department of Defense, but key difference they work for governors,
Speaker 1: their citizens soldiers. They're not full time soldiers. So when
Speaker 1: you add up law enforcement and National Guard, it's one
Speaker 1: point five million. Um. I have not seen anything in
Speaker 1: the challenges of protecting these protesters, making sure these demonstrations
Speaker 1: stay peaceful, stopping any violent crime, stopping looting, those are
Speaker 1: all real challenges, but it is a set of challenges
Speaker 1: one point five million men and women can handle. So
Speaker 1: my view and that of many of my senior military colleges,
Speaker 1: don't take the active duty military, who are sworn to
Speaker 1: uphold the Constitution in the United States, who have a
Speaker 1: significant role defending the nation outside of our national borders.
Speaker 1: Don't bring those active duty folks inside the country and
Speaker 1: apply them against protesters. Not an appropriate use of the
Speaker 1: Department of the Defense active duty personnel. Yeah, Admiral's Tavrida's
Speaker 1: it's money. Just on that note, I mean, it's very
Speaker 1: unusual to see retired officers speaking out about a candidate
Speaker 1: or a party, or particularly what a president might say.
Speaker 1: And we saw it this time. We not just saw
Speaker 1: it from one what we saw it from several four
Speaker 1: former chairman of the Joint chiefs of Staff in fact.
Speaker 1: So it's not just that it's ill advised, it's actually
Speaker 1: being condemned, would you say it is? And this is
Speaker 1: a really import and point, Vonnie. I've never seen the
Speaker 1: entire active duty four star military community so significantly united
Speaker 1: on a key issue. So it goes from people like
Speaker 1: General Maddis and General Kelly who are actually part of
Speaker 1: the administration at one time and have been very ritiscent
Speaker 1: about speaking out across the spectrum, to people like Admiral
Speaker 1: mccraven or General John Allen who have been fairly critical
Speaker 1: of the president. Two people like myself, we're kind of
Speaker 1: centrists who are in the middle. As you mentioned four
Speaker 1: chairmen and the Joint chiefs of Staff. That's really quite
Speaker 1: remarkable to get that unanimity of view across this whole community,
Speaker 1: and it's because it really touches the nerve when you
Speaker 1: send active duty military against the citizens in this country.
Speaker 1: It should only be done in extreme circumstances. Um, And
Speaker 1: this does not appear to be a moment that would
Speaker 1: call for that Admiral. On Sunday, Colin Palcole and Paliform
Speaker 1: and UH Joint Chiefs and Chairman and Secretary of State
Speaker 1: call that Republican lawmakers for really having quote nothing to
Speaker 1: say about President Trump's militarization of protest security. What is
Speaker 1: your sense of kind of what your expectations are for
Speaker 1: what Congress should be doing here as it relates to
Speaker 1: the military's use. Well, I I stand with General Powell
Speaker 1: on this, and and I think the way to phrase
Speaker 1: it is the way you just did, Paul is Um,
Speaker 1: it's not incumbent just upon Democrats or just upon Republicans
Speaker 1: to stand up in this moment. And this really touches
Speaker 1: on why are these protests occurring. This is a significant
Speaker 1: moment in American history. We need the Congress to be
Speaker 1: part of the solutions. And so that runs the gamut
Speaker 1: I would say from UH initiating appropriate reform in police
Speaker 1: departments around the country. It includes calling on the administration
Speaker 1: the executive branch not to use active duty military against
Speaker 1: peaceful protesters. UM. It includes providing resources to address the
Speaker 1: economic impact that comes out of COVID. So we need
Speaker 1: our Congress to step up on all those kinds of issues.
Speaker 1: I have tried to shine a spotlight on this issue
Speaker 1: of active duty military not being used against these protests. Yeah,
Speaker 1: and real stupid, as you've just said a few moments ago,
Speaker 1: that this is not the moment for it. Do you
Speaker 1: ever envisage that there might be a moment for it's
Speaker 1: that the active military would be called out against US citizens.
Speaker 1: I think it's unlikely, but it has happened a couple
Speaker 1: of times in our history. Um. Once was most recently
Speaker 1: in the Los Angeles riots in the early nineties. And
Speaker 1: and here's a key distinction, Vonnie, if we are going
Speaker 1: to bring active duty in in a moment like that
Speaker 1: where a city is on flames, and um, there's really
Speaker 1: no semblance of order in the city. It's got to
Speaker 1: be under local authorities. It can't be driven from Washington,
Speaker 1: d C. And a circumstance like that. And then a
Speaker 1: second example would be back in the sixties when some
Speaker 1: of the southern states refused to integrate their schools and
Speaker 1: federal truths were required during the Kennedy administration. So yes,
Speaker 1: there are extreme circumstances where this might be called for,
Speaker 1: this is not one of them, and never should active
Speaker 1: duty military be used against peaceful protesters. That's a violation
Speaker 1: of the constitution. Admiral, just about the thirty seconds here,
Speaker 1: what did you think of General Mark Milly, the current
Speaker 1: Chairman of the Joint Chiefs, accompanying the President Lafayette Square.
Speaker 1: I think it was a mistake, and I think of
Speaker 1: General Milly had that one to do over again, he
Speaker 1: would not have done so short of a direct order. UM.
Speaker 1: I know he is uncomfortable being involved in politics and
Speaker 1: he knows that's not his role. I I thank god
Speaker 1: that he did not appear in the photo op on
Speaker 1: the steps of the church. Um, let's hope that he
Speaker 1: can stay out of politics. We need the military to
Speaker 1: stay out of politics the act of duty military. Admiral
Speaker 1: steud is definitely looking forward to reading more of your opinions.
Speaker 1: Always enjoy listening to what you have to say. Of course,
Speaker 1: former military commander of NATO and a Bloomberg Opinion columnistics
Speaker 1: ordinarily decorated soldier as well, So thank you in general
Speaker 1: for for joining us so Paul, it is really an
Speaker 1: interesting time and of course you know a couple of
Speaker 1: presidents cited, and I think that that moment has passed
Speaker 1: in this particular you know week of social unrest, but
Speaker 1: it came close at one one or two points there
Speaker 1: last weekend to it definitely escalating for the worst it was.
Speaker 1: And I think the Admiral's commentary about the kind of
Speaker 1: you know, mixing politics with the military is it's a
Speaker 1: it's a it's something that he's been concerned about, I
Speaker 1: know really for the last several years and again having uh,
Speaker 1: you know, probably come into the four where once again
Speaker 1: with some of these civil unrest and demonstrations and and
Speaker 1: the use of the military in kind of managing them.
Speaker 1: Time for Bloomberg Opinion. Let's turn to Bloomberg Opinion columns
Speaker 1: Tara la Chappelle. She covers entertainment, telecommunications and deals for
Speaker 1: Bloomberg Opinion. Tara, thanks so much for joining us here.
Speaker 1: You know, I'm a big fan of m and a market.
Speaker 1: Like to see deals come across the tape. Usually on
Speaker 1: that Merger Monday, we see some big deals and I
Speaker 1: always the first thing I do when I see a deal,
Speaker 1: uh story out as I go to the bottom of
Speaker 1: the story to see who the advisors are on the deal.
Speaker 1: Talk to us a little bit about what's happening in
Speaker 1: the world of M and A. How are bankers getting
Speaker 1: deals done? Yes, I mean the world of M and
Speaker 1: A is is very old school, and that it all
Speaker 1: still revolved around meeting in person. You know, the handshake
Speaker 1: is the final way to steal the deal. And it's
Speaker 1: a lot of travel and you know, I think some
Speaker 1: bankers you know, would still be willing to get on
Speaker 1: a plane for you know, something a hundred billion dollar
Speaker 1: deal like the astro Zenica UM talks that were reported
Speaker 1: over the weekend with Gill lead. But at the same time,
Speaker 1: I think, you know, a lot of people are still
Speaker 1: reluctant to travel UM. A lot of CEOs, especially at
Speaker 1: companies that are a bit more tech savvy like Verizon
Speaker 1: we saw this with for instance, are willing to look
Speaker 1: at doing pretty sizeable deals negotiating them over things like
Speaker 1: Zoom video conferences. In the case of Verizon, just a
Speaker 1: few weeks ago, they bought a company called Blue Jeans Networks,
Speaker 1: which happens to be a video conferencing company a lot
Speaker 1: like Zoom, and so they bought a video conferencing company,
Speaker 1: but they also negotiated that deal over video chat, which
Speaker 1: is really unusual for the M and A world, And
Speaker 1: I think it's something more and more bankers and CEOs
Speaker 1: are going to start to embrace in these next few
Speaker 1: months and quarters. As you know, people are still a
Speaker 1: little bit hesitant to go completely back to normal. So Tara,
Speaker 1: in your opinion piece today, you point out that M
Speaker 1: and A is actually down fift this year, but may
Speaker 1: pick up eventually when when things start to reopen a
Speaker 1: little wider across the United States. But in terms of
Speaker 1: these deals that you are seeing, that four hundred million
Speaker 1: dollar deal for Blue Jean's networks, for example, are they
Speaker 1: because of the pandemic or had they been envisaged before
Speaker 1: the pandemic. I think you know what we're hearing is
Speaker 1: that there were deals that were probably in the works
Speaker 1: just before the pandemic, maybe even some transactions that were
Speaker 1: pretty close to getting announced or you know, getting close
Speaker 1: to agreeing on the terms at least, and then the
Speaker 1: crisis hit and it kind of just puts everything on hold.
Speaker 1: It would make sense for bankers to kind of go
Speaker 1: after those deals first and try to get those across
Speaker 1: the finish line. Now, if the strategic logic is still
Speaker 1: there and if you can still come to some sort
Speaker 1: of agreement on the price, which is obviously difficult. We're
Speaker 1: seeing that in the case of Tiffany and l V
Speaker 1: m H, where they probably both still want to do
Speaker 1: the deal, but the price may not make as much
Speaker 1: sense at this point. Um. But then I think there
Speaker 1: are other industries where, you know, some of these companies
Speaker 1: are still flush with cash, they still have growth needs,
Speaker 1: and it probably makes sense if they can get any
Speaker 1: company is a little bit cheaper because of this, that
Speaker 1: it makes sense to do that. Of course, there's not
Speaker 1: a whole lot of opportunities for it since the market
Speaker 1: is up the way it is, but I still think,
Speaker 1: you know, all roads are going to lead to deals
Speaker 1: with this. I think there's just a lot of pent
Speaker 1: up demand and a lot of companies that need the growth. So, Ara,
Speaker 1: what are you hearing about when you when you talk
Speaker 1: to bankers across the street and other sources you have.
Speaker 1: I mean, is the expectation that the M and A
Speaker 1: market's really not going to come back until we really,
Speaker 1: you know, get a vaccine and kind of put this
Speaker 1: pandemic behind us, or is there a sense that you know,
Speaker 1: companies and bankers and lawyers can adapt and can kind
Speaker 1: of start getting things done even beforehand. Well, we'll see.
Speaker 1: I do think so that bankers are going to try
Speaker 1: their darndists to try to get deals done. You know,
Speaker 1: I think that they know there are companies that were
Speaker 1: on the lookout for deals before this, So why not
Speaker 1: keep trying and why not try to adapt to this
Speaker 1: you know, new normal, if you want to call it that,
Speaker 1: you know, we are seeing you know, and tells that
Speaker 1: a deal over zoom video chat. As more and more
Speaker 1: companies become comfortable with, you know, not meeting as often
Speaker 1: in person, not doing as much travel, having to do
Speaker 1: diligence and do due diligence, and new kind of inventive ways,
Speaker 1: you could see some companies more comfortable with that than others,
Speaker 1: you know, some industries that might just be hard to do.
Speaker 1: Like I've heard investor's kind of half jokingly say that
Speaker 1: a big oil giant that wants to survey some land
Speaker 1: for a beleaguered oil company somewhere in America could use
Speaker 1: a drone, let's say, to try to look at that
Speaker 1: land and look at that property, which I don't know
Speaker 1: how feasible that is but I do think people are
Speaker 1: starting to think, you know, how can we look at
Speaker 1: this differently and still get deals done? Yeah? I mean definitely,
Speaker 1: dnes are being used in all sorts of sectors. Why
Speaker 1: not this one? Right? Talk to us about companies also
Speaker 1: getting ready for an onslaught of interested buyers. You site
Speaker 1: a statistic which states that more than two dozen public
Speaker 1: companies adopted so called poison pills between March and mid April.
Speaker 1: Why is that? Yeah, this is fascinating. So a law firm,
Speaker 1: I believe it was K and L. They said that
Speaker 1: more than two dozen US companies have adopted poison pills,
Speaker 1: which is a lot more than we saw last year.
Speaker 1: And I think that tells you that there are vulnerable companies,
Speaker 1: companies that were probably you know, their businesses were shut
Speaker 1: during these lockdowns and really affected by the lack of
Speaker 1: consumer demand. That they are worried about activist shareholders coming
Speaker 1: in now or opportunistic buyers. You know, pe firms are
Speaker 1: going to be on the prow and I think they're
Speaker 1: starting to put their guards up and say, you know,
Speaker 1: we we don't want to be bought on the sheep.
Speaker 1: We don't want to be you know, take an advantage
Speaker 1: of in this crisis. So you're starting to see some
Speaker 1: companies put up their defenses. But I think it's interesting
Speaker 1: because just the environment that we're in right now, so
Speaker 1: there's been a lot of social activism over inequality. You know,
Speaker 1: we have the unemployment rate as high as it is,
Speaker 1: it's a really touchy thing to have an activist campaign
Speaker 1: or pe company, you know, using this as an opportunity
Speaker 1: like that. Tara, thank you so much for we're joining us.
Speaker 1: We always love having you on Terra La Chapelle Entertainment,
Speaker 1: Telecommunications and deals columns for Bloomberg Opinion. You can read
Speaker 1: Terror's work at Bloomberg dot com, Slash Opinion plus all
Speaker 1: the other great opinion columns that we have. You can
Speaker 1: also get it at O. P. I N Go on
Speaker 1: the Bloomberg terminal. The Bloomberger Opinion folks do outstanding work.
Speaker 1: I highly recommend it. Well. Some big news out of
Speaker 1: Apple today, not necessarily a new product introduction or a
Speaker 1: new phone or anything like that, but certainly news on
Speaker 1: the back end they're going to make their own chips
Speaker 1: and what does this really mean for Apple and for
Speaker 1: other players in that tech supply chain. To answer that
Speaker 1: we welcome Dan Ives. He's an equity analyst at wed
Speaker 1: Bush Securities and a Penn State alum. I should know Dan.
Speaker 1: Thanks so much for joining us here. How big is
Speaker 1: this news from Apple about their chips. Yeah, it's great
Speaker 1: to be here. It's big in terms of you know,
Speaker 1: cooking Coopercino of talk for over a decade about this
Speaker 1: potential move, and it's really shot across about Intel and
Speaker 1: other semi players that Apple is just going to have
Speaker 1: more and more control of their devices. You've seen it
Speaker 1: on the iPhone. Now it goes to the max. And
Speaker 1: I think this is gonna be a trend. You're gonna
Speaker 1: see more and more as Apple looks from more full
Speaker 1: control over its devices. So Dan also thinking about do
Speaker 1: they make chips for their other products as well or
Speaker 1: as just just for the back Yeah, if you look
Speaker 1: on the processors side, they've done it from a chip
Speaker 1: perspective in their iPhones as well as some of their
Speaker 1: other chord devices. And now there was a view that
Speaker 1: this Mac move maybe could have happened three or four
Speaker 1: years ago, but in terms of some of the technology
Speaker 1: innovations on the arms side, wasn't there. This is probably
Speaker 1: about a year ahead expectations. If you look relative to
Speaker 1: the streets perspective, I viewed as an incremental positive for
Speaker 1: Apple and incremental negative for Intel, just given what this
Speaker 1: really says about going forward in terms of how Apple
Speaker 1: is really viewing the chip ecosystem, especially in their own devices.
Speaker 1: Now we knew this was coming for a little bit
Speaker 1: of time done, So why is the market reacting now?
Speaker 1: Because this has really been something it's always on the
Speaker 1: com I mean, if you go back two thousand and
Speaker 1: five when Cook talked, you know, and when they were
Speaker 1: to talk about the grand vision from Apple, but it
Speaker 1: was thought that this is something from a Mac perspective
Speaker 1: that really couldn't happen. The fact that they ripped the
Speaker 1: band aid off and now it's going to be likely
Speaker 1: announcing June at the Virtual Developer Conference. It's a surprise,
Speaker 1: and I think it just shows the innovation that Apple
Speaker 1: has been taking. More and more, even when you look
Speaker 1: at some of the five G battle versus Qualcom, more
Speaker 1: and more you're gonna see Apple continue to look to
Speaker 1: own the chips, build it because they want more control
Speaker 1: over their devices. And what that says for investors, it's
Speaker 1: more margins, more cash flow. It also gives more risk
Speaker 1: though to the company, right, because if it's if there's
Speaker 1: any kind of supply disruption, you know, in its own ranks,
Speaker 1: that's that's worse than than you know, if a supplier
Speaker 1: has a supply disruption. No doubt it does put more risk.
Speaker 1: But I've about as much confidence in Cook and Cupertino
Speaker 1: as I do in Selly Cell and turtle Land and Airplane.
Speaker 1: And I think it comes down to the confidence that
Speaker 1: Cook and Apple bill with investors. The more control they have,
Speaker 1: they have more control over launches, over timing, and over
Speaker 1: even profitabile anywhere they could take it. So I think
Speaker 1: this is something, at least from the vestor perspective, you
Speaker 1: want to see have Apple have a more control. And
Speaker 1: also it's more differentiation versus the HPS, the Della's traditional
Speaker 1: PC given it's not the Saame chip. So Dan, you know,
Speaker 1: I'm looking at the Apple chart here, another all time
Speaker 1: high a day. What's the call out there on the
Speaker 1: street here for Apple in the world of that that's
Speaker 1: likely to be altered for the certainly the near term,
Speaker 1: maybe intermediate term, maybe even long term. Yeah, the call
Speaker 1: I continue view a year from now, there's a two
Speaker 1: trillion dollar market cap, and I think the first step
Speaker 1: is to get through this COVID nineteen dark storm, and
Speaker 1: you've seen it get down through the services business that's
Speaker 1: about five to six hundred billion weekly. From evaluation perspective,
Speaker 1: now it's the drum mold to just a massive iPhone
Speaker 1: twelve products cycle with five G we think about three
Speaker 1: fifty million of nine fifty million iPhones world wider in
Speaker 1: the window of an upgrade opportunity. You start to put
Speaker 1: the math around it some of the parts. I mean,
Speaker 1: I think this is a stock has a fore in
Speaker 1: front of it, and I think you're going to continue
Speaker 1: to see this get re rated. In our view on
Speaker 1: fang stocks and tech, where we're still in the sixth
Speaker 1: seventh inning, still think there's twenty more in this rallies
Speaker 1: to look at the rest of the year, what's next
Speaker 1: for what's the next sort of launch of products, and
Speaker 1: when we'll look into we'll be ready to eat them up. Yeah,
Speaker 1: in terms of a proper perspective, we know about iPhone twelve,
Speaker 1: the air pods. If you look at that, they're insulated
Speaker 1: to sell about five million units this year verse sixty
Speaker 1: five million last year. So I think there'll be a
Speaker 1: new device there at w launching, but the big thing
Speaker 1: is going to be on services. Right now, the missing
Speaker 1: piece in the puzzle is content for Apple services on
Speaker 1: the streaming side video. I continue to think between now
Speaker 1: and the rest of this year they look to acquire
Speaker 1: a major Hollywood studio to fill that content void, especially
Speaker 1: in what you're seeing from Disney, Netflix and others, HBO,
Speaker 1: Peacock going after this massive streaming opportunity. I think that's
Speaker 1: probably the next piece in the puzzle that investors are
Speaker 1: hoping to see. Just Dan thinking about these fang stocks here,
Speaker 1: just kind of rip thing once again. What's your thought
Speaker 1: on kind of it's just this group overall, it's had
Speaker 1: such a great run. Give us your thoughts. Look, my
Speaker 1: view is that it's a These are safety blanket stocks,
Speaker 1: you know, category five COVID storm, which is how they've
Speaker 1: continued to navigate, and many of them hit all time highs.
Speaker 1: But ultimately think the second part of that is the rebound.
Speaker 1: I think they're stronger, forgotten stronger, and you're seeing it
Speaker 1: from streaming in Netflix and e commerce and Amazon, social
Speaker 1: media and engagement with Facebook and advertising and Google, and
Speaker 1: then you look at Apple that's one where you have
Speaker 1: a massive icepline cycle in their rise. And I still
Speaker 1: think sang names wed this market higher and overall in tech.
Speaker 1: That's why we continue to think it's a green light
Speaker 1: to own these names, especially on the second half macro
Speaker 1: recovery place, which will be the other leg in these stocks.
Speaker 1: All right, thank you so much for joining us today.
Speaker 1: Down always great to speak with you. That is done.
Speaker 1: I'ves equity analyst Dad web Bush Securities, And the course,
Speaker 1: Apple was higher today by about two and a half percent,
Speaker 1: not the best performer among the TEX stocks, but in
Speaker 1: the SMP five hundred it'd certainly helped. But we saw
Speaker 1: advanced micro devices of more than five percent today, Poul
Speaker 1: and Video up more than Yeah, it's actually the tech
Speaker 1: stox getting a lift here and h and as Dan
Speaker 1: has mentioned, you know, they've been obviously the drivers in
Speaker 1: this market for more than a decade, both on the
Speaker 1: upside and the downside. Here. So Apple another all time
Speaker 1: high today, just extraordinary. Moving to a slightly different asset
Speaker 1: class now on that Adventure Capital were excited to be
Speaker 1: joined by Mark Klein, who's president and CEO of st
Speaker 1: Rock Capital. Now, of course, some early backing. That's sort
Speaker 1: of Rock did very profitable exits include Facebook, Twitter, drop Box,
Speaker 1: and Lift. And the current portfolio companies include course Era, Lime,
Speaker 1: next Door, palant Here among them as well. So clearly
Speaker 1: some smart guys there with you, Mark, including yourself outside
Speaker 1: of Rock Capital. Mark, give us a picture of the
Speaker 1: environment right now, because obviously we're looking at private equity,
Speaker 1: you know, really raining in its horns, if you like.
Speaker 1: And I'm wondering if the same is true a venture
Speaker 1: capital with the market drop earlier this year, did valuations
Speaker 1: decrease significantly? Are they? Are they still at those levels
Speaker 1: or are they coming back? Sure? Thanks luck, Um. You know,
Speaker 1: obviously the market, the public markets collapsed at the beginning
Speaker 1: of the COVID crisis, going down, you know, anywhere between
Speaker 1: thirty and depending on what inducry, and they've subsequently rallied
Speaker 1: almost all of them back about is you note NAZAC
Speaker 1: making a new high yesterday. Um. On the venture capital side,
Speaker 1: I think you had a bifurcation. Um. Venture capital valuations
Speaker 1: tend to lag in the private valuations tend to lag
Speaker 1: what happens in the public markets. And when you do
Speaker 1: have almost a v in the in the public market.
Speaker 1: The movements are actually pretty quick. So there were some
Speaker 1: cases where companies were in need of financing and did
Speaker 1: significantly down rounds UM and as, but there were others
Speaker 1: that continue to perform and actually we're having up rounds
Speaker 1: during the last couple of months. What we've seen in
Speaker 1: the secondary markets is there is a fair amount of
Speaker 1: selling that has gone on UM at discounts to UM
Speaker 1: prior rounds that had occurred in the last three, six
Speaker 1: or nine months. I think those are fairly fleeting, and
Speaker 1: the opportunity set becomes, uh, the ability to move against
Speaker 1: the opportunity set is pretty rapid as blocks of stock
Speaker 1: come up for sale and you have to make a
Speaker 1: determination whether you want to participate or not, and then
Speaker 1: they move away, especially when you have equity markets rallying
Speaker 1: like they did over the last couple of weeks. So
Speaker 1: mark one of the areas as we think about this
Speaker 1: pandemic world that apps uh you know, maybe as a
Speaker 1: little bit of a beneficiaries education technology with this schooling
Speaker 1: from home, how do you think about that space and
Speaker 1: you know, where as what are some opportunities do you
Speaker 1: think going forward? Sure? Um, well, I I actually think
Speaker 1: that unlike simply a covid telwin that some other industries
Speaker 1: are enjoying. I think you're now seeing a fundamental shift
Speaker 1: in education and online education and just bringing it home
Speaker 1: the idea of having a college student and let's just
Speaker 1: say they're graduating senior starting as a freshman next year,
Speaker 1: and that you're looking at a private education bill called
Speaker 1: seventy five dollars a year and the first six months
Speaker 1: is going to be spent virtually UM to go to
Speaker 1: some very nice liberal arts school. I think that the
Speaker 1: world is going to shift away a bit from that. UM.
Speaker 1: In the public markets, you see significant performance by some
Speaker 1: of the online education company these like CHEG that's almost
Speaker 1: doubled since the pandemic started, or to you, which is
Speaker 1: about the same. So I do think the markets starting
Speaker 1: to recognize in the public markets that the need for
Speaker 1: online education is actually structurally shifting. We're fortunate that we
Speaker 1: have two of those names in our portfolio, Course Era
Speaker 1: and Course hero Um, both that are experiencing as you
Speaker 1: can imagine, and this is documented in public information, uh
Speaker 1: extreme you know, usage of their products and and sort
Speaker 1: of way outside of what they had initially determined from
Speaker 1: you know, just general understanding of the marketplace. So I
Speaker 1: do think that there is these tail winds, uh, and
Speaker 1: the structural shift will will lead to more and more
Speaker 1: opportunities in the public market for private education. Private education
Speaker 1: companies actually coming public, and there are several of them
Speaker 1: that are now multibillion dollar privately valued companies right including
Speaker 1: I'm sure of course Ero, which is one that you
Speaker 1: know so many people have signed up for it still
Speaker 1: private or involved in that. But who wins out here?
Speaker 1: Because there are many, many great companies I'm looking at
Speaker 1: you know, the peer group of CHEG right now, and
Speaker 1: you're seeing vite horizons. Strategic education is a very interesting
Speaker 1: one as well. Obviously u K twelve. Does it depend
Speaker 1: on what teachers you get? Doesn't depend on how many
Speaker 1: people sign up? Does it depend on you know, what
Speaker 1: you get with your certificate at the end, Well, I mean,
Speaker 1: I think first of all, lumping all of online education
Speaker 1: or even in one bucket is challenging. On one side,
Speaker 1: you have the corporate training side, which is a plural
Speaker 1: site or a skill soft. Then you go through obviously
Speaker 1: the case you twelve, post secondary and lifelong learning, and
Speaker 1: and I think in each segment there are clearly folks
Speaker 1: that are executing better than others um I think. In fact,
Speaker 1: Plura site announced that they're are doing an offering yesterday
Speaker 1: after the stocks rallied materially during the pandemic. But I
Speaker 1: think a lot of them have an opportunity to be successful.
Speaker 1: I think the you know, the proverbial butts and seats
Speaker 1: businesses I think are a little harder than uh, the
Speaker 1: online side. But if you look at the you know,
Speaker 1: the eu demis of the world, udacities, master classes just copies.
Speaker 1: I mean, there's plenty of them. Hey, Mark, thanks so
Speaker 1: much for journing us to really appreciate that Mark client
Speaker 1: presidency of st Rock Capital based in San Francisco, on
Speaker 1: some of the venture capital opportunities out there, and spend
Speaker 1: some time talking about the educational technology and clearly this
Speaker 1: pandemic world, as we all have kids at home, whether
Speaker 1: it's grade school or college, trying to work from home
Speaker 1: on the educational front is a challenge, to say the least,