Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
Speaker 1: my co host Matt Miller.
Speaker 2: Every business day we bring you interviews from CEOs, market pros,
Speaker 2: and Bloomberg experts, along with essential market moven news.
Speaker 1: Find the Bloomberg Markets podcast called Apple Podcasts or wherever
Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast.
Speaker 1: Daniel de martinoz Booth Joints and she's the CEO in
Speaker 1: chief Strategistic QI Research. Danielle The market likes with your
Speaker 1: fed Chairman j Powell had to say, shoulday, what's your takeaway?
Speaker 3: Well, he didn't say much, Okay, I mean at the
Speaker 3: beginning he.
Speaker 4: Kind of read a lot of his answers.
Speaker 3: I'm like, dude, you're still reading your your statements over
Speaker 3: quit reading already.
Speaker 2: I thought that was weird. I honestly, I listened. I
Speaker 2: was on Comfort Radio, and I thought it was awkward.
Speaker 2: Why isn't this guy like taking a stand one way
Speaker 2: or the other one? Why even bother having the if
Speaker 2: you're not going to.
Speaker 3: Say at the dot plot, oh it's meaningless. You know,
Speaker 3: we've got all these employment reports and CPI reports before
Speaker 3: we get to December twelfth and thirteen, So disregard that.
Speaker 4: I mean, it was it was I'm like, dude, do
Speaker 4: you know you're talking out loud?
Speaker 3: You're like on TV TV, right, yeah, I mean this, dude,
Speaker 3: And I think what was disappointing was that so many
Speaker 3: of the reporters asked the same regurgitated question we reworded
Speaker 3: over and over and abotton. I can somebody please take
Speaker 3: off the gag order and let somebody ask him about
Speaker 3: the balance sheet already?
Speaker 5: All right, tell us about the balance sheet. What would
Speaker 5: you like about the balance sheet?
Speaker 3: Well, I mean, gosh, you've seen other deposits, liabilities. My mentor,
Speaker 3: doctor Lacey Hunt, you always I follow them every single week.
Speaker 3: We're about to break underneath fifteen trillion.
Speaker 4: When the data hit tomorrow afternoon.
Speaker 2: Wait, what do you say about Lacy Hunt from Hooisington, Right.
Speaker 4: Yeah, he's my mentor.
Speaker 2: Oh so he's taught me how.
Speaker 3: I mean, every single week the Fed's data comes out
Speaker 3: and it shows you weekly liquidity on bank balance sheets,
Speaker 3: and you've gone from just about seventeen trillion to next
Speaker 3: week tomorrow afternoon, you're going to break fifteen trillion. You've
Speaker 3: had two trillion dollars of liquidity sucked out of the
Speaker 3: system because there's like a one point five multiple on
Speaker 3: every dollar of quantity of tightening shows up as one
Speaker 3: point five dollars of liquidity pulling being pulled out of
Speaker 3: the system, which is why your bcy go functions on fire.
Speaker 2: Okay, you've lost me and Paul already. I'm gonna say
Speaker 2: you see why I go.
Speaker 3: That's your bankruptcy function. Look, it's companies rely on liquidity,
Speaker 3: and right now we're seeing banks continue to tighten lending standards.
Speaker 3: I mean, I'll be up and ready on Monday morning
Speaker 3: for the Senior Loan Officer survey, but the Dallas Fed
Speaker 3: has a more frequent lending survey, and it's just got
Speaker 3: getting tighter and tighter and tighter. Everything we heard from
Speaker 3: Capital One ally they're seeing normalization in defaults and credit
Speaker 3: card delinquencies and auto default.
Speaker 2: Wait, you said normalization doing air quotes.
Speaker 3: Normalization air quotes, that means that means it's going above subprime.
Speaker 3: So it's not contained to subprimes. I love to quote pernanky,
Speaker 3: but it's not contained a subprime. And that's what we're seeing.
Speaker 4: We've seen about a twelve and.
Speaker 3: A half fold increase of prime all loans being downgraded
Speaker 3: into subprime territory based on where they're trading right now
Speaker 3: on bank balance sheets. We've never seen anything like this,
Speaker 3: and it's because when you put the rent on hold,
Speaker 3: the auto payment on hold, when you paid people twenty
Speaker 3: five hundred dollars extra a month, when you put the
Speaker 3: mortgages on, everything went on hold.
Speaker 4: So we saw and Moody's has done some good work
Speaker 4: on this.
Speaker 3: We saw insane levels of Fico's score inflation during the
Speaker 3: pandemic and now it's all coming back to bite because
Speaker 3: weges just aren't there and layoffs. You've got continuing jobless
Speaker 3: claims up six weeks in a row north of one
Speaker 3: point eight. They're just on top of where they were
Speaker 3: in twenty sixteen.
Speaker 1: So is your biggest concern that the consumer is not
Speaker 1: nearly as strong as maybe we think it is.
Speaker 3: Oh, I think the consumers telling you they're not as strong.
Speaker 3: I mean, if you looked inside of the final University
Speaker 3: of Michigan consumer sentiment print at the medium tersile and
Speaker 3: top tersile of earners, they're like, job cuts are coming,
Speaker 3: and it's the lowest tersile that doesn't see it. Coming,
Speaker 3: but we're seeing it come out in the data week
Speaker 3: after week after week. I was I was talking to
Speaker 3: Daily Jobcuts dot Com, the founder, and he's like, November
Speaker 3: seasonally a quiet time. People don't fire people into Thanksgiving
Speaker 3: and in the holidays, and he's like, it's out.
Speaker 4: They've come out of the gate. He seemed to twenty
Speaker 4: five companies close in two days.
Speaker 2: This is the Austrian hangover coming after all of that
Speaker 2: insane stimulus stimulus, it's still going on. Remember that Canes
Speaker 2: versus High k Rap video. Look, I mean crisis you've got.
Speaker 3: You've got some people are going to be paying their
Speaker 3: mortgage for the first time in December. That's how long
Speaker 3: FHA Forbearance has been going since March of twenty two.
Speaker 2: All Right, I got a listener question here writing in,
Speaker 2: did Danielle listen to the Drunken Miller interview with Paul
Speaker 2: Tudor Jones? Stan thinks rates are going higher because of
Speaker 2: an out of control debt profile of the US. Do
Speaker 2: you agree?
Speaker 4: I don't, No, I don't.
Speaker 3: I mean, we've been spending like drunken sailors since Reagan
Speaker 3: was in office. It's just I think Wall Street wants
Speaker 3: a narrative right now.
Speaker 2: But you know, Reagan boosted spending on the military. We
Speaker 2: were talking yesterday to Paul's mentor, Cam Harvey from Duke,
Speaker 2: and he pointed out that next year we're gonna have
Speaker 2: interest payment costs of nine hundred billion dollars. We're gonna
Speaker 2: pay more to service our debt than we do to
Speaker 2: fund the military.
Speaker 5: Yep.
Speaker 3: Actually we passed that up in the at the end
Speaker 3: of the fiscal year, about six hundred and eighty five
Speaker 3: billion for military, eight hundred and eight billion fiscal year
Speaker 3: ended August thirty one interest payments. So we've already we've
Speaker 3: already rounded that. And I the shame about the fiscal
Speaker 3: spending right now is it's.
Speaker 4: Not doing much.
Speaker 3: There's it's not creating anything. Like there's no Hoover Dam,
Speaker 3: there's no Holland Tunnel.
Speaker 2: There's so little way.
Speaker 1: They're working like crazy out there, the people out in Jersey, right,
Speaker 1: John Tucker, they were building that Oh.
Speaker 6: Yeah, number those gigantic cranes by the Gateway project.
Speaker 4: Question, I stand correct, Hey we're building a tunnel.
Speaker 2: Yeah, it'll be ready.
Speaker 4: I'm I'm always on the bridges going to LaGuardia.
Speaker 5: Sorry, exactly, So is recession in your scenario? In your I.
Speaker 4: Think I think recession starts the current quarter.
Speaker 5: Okay, this quarter Q four.
Speaker 3: As of this morning's jobless claims data, the only state
Speaker 3: holdout right now that does not have rising continuing jobless
Speaker 3: claims year over here is Kentucky.
Speaker 4: Well, I mean Florida, but that's that's a base effect
Speaker 4: from Hurricane Ian. So that's gonna go away here. But
Speaker 4: that's it.
Speaker 3: I mean September twenty twenty two, there were zero states
Speaker 3: with rising continuing jobless claims.
Speaker 4: Now we got fifty.
Speaker 5: Okay, so you have a recession in your outlook?
Speaker 2: How deep?
Speaker 5: How long?
Speaker 3: I think it's gonna last longer than we think because
Speaker 3: we've pulled so much demand forward. We're seeing one furniture
Speaker 3: company after another go out of business that had been
Speaker 3: in business for one hundred years because we pulled so
Speaker 3: much demand forward with all that stimulus money.
Speaker 2: All Right, that's the hangover, dude.
Speaker 4: It is a hangover, yes, but it's not as funny
Speaker 4: as the movie.
Speaker 2: So so should the Fed?
Speaker 5: What should the Fed do here?
Speaker 3: I think I think the Fed's on hold, I really do.
Speaker 3: But again, it's about the balance sheet. Nobody's talking about Voldemort.
Speaker 4: I'm saying it out loud. It's about the balance sheet, people,
Speaker 4: It's real.
Speaker 2: The worry. The worry is that the Fed went too
Speaker 2: far right because, like Cam said, if you take out
Speaker 2: whatever they call it, rent equivalent, inflation is below two percent.
Speaker 2: And our buddy j Hatfield from Infrastructure Capital a smart one.
Speaker 2: He's got his CPI dash R where they replace the
Speaker 2: housing component with ky Schiller and that's one point three
Speaker 2: percent year over year compared to the four point Everything's
Speaker 2: great in Dallas, right.
Speaker 3: Well, no, Actually, war notices in the state of Textas
Speaker 3: have gone through the roof. That's what's hard to believe.
Speaker 3: And it's no longer like super cheap to live there.
Speaker 3: So I mean, Austin's a cesspool of when it comes,
Speaker 3: it's it's residential real estate ground zero.
Speaker 2: It's a mess again.
Speaker 3: And I'm a longhorn, and I mean, I love, I
Speaker 3: love Austin, but they overbuilt.
Speaker 5: They overbuilt, and there's and they don't have any infrastructure for.
Speaker 2: The true but they have limescooters. That's all I care about.
Speaker 1: Burn Martino, CEO and chief strategist Research.
Speaker 7: You're listening to the Team Ken's Are Live program Bloomberg
Speaker 7: Markets weekdays at ten am eastering on Bloomberg dot com,
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Speaker 1: A little bit of a M and a trade in
Speaker 1: the theme park business, Cedar Fair, six Flags, they're getting
Speaker 1: together all Stock merger.
Speaker 5: Let's break down a little bit.
Speaker 2: We can do that with Jody Laura.
Speaker 1: She covers the entertainment companies for Bloomberg Intelligence from the
Speaker 1: credit side. So, Jody, thanks so much for joining us here. Boy,
Speaker 1: I'm looking at the balance sheets of these two companies.
Speaker 5: They're almost the.
Speaker 1: Exact same two and a half billion dollars of debt,
Speaker 1: about five hundred million of ibadas, so they're both levered
Speaker 1: pretty highly around five times leverage. Here from your perspective,
Speaker 1: what's the rational for putting these two companies together?
Speaker 8: Fuir So, Paul, I mean, I think I think that's
Speaker 8: a great question. Is that really at the end of
Speaker 8: the day, why are these companies joining? And I think
Speaker 8: it really comes down to the fact that the tailwinds
Speaker 8: that they experienced during the pandemic have sort of petered off,
Speaker 8: and now they're saying what's next for these companies, they've
Speaker 8: experienced tremendous weather related issues this year.
Speaker 9: That have sort of marred their opportunity and.
Speaker 8: Benefiting from people spending on leisure.
Speaker 2: Too hot, Yeah.
Speaker 8: Well, so subplace was too hot, others it was too rainy.
Speaker 8: It was just you know, a mix of storms and
Speaker 8: events that have happened. I mean, you look in the
Speaker 8: southern California area and it was too hot and then
Speaker 8: there were floods, and then it was rainy, and it's
Speaker 8: just I mean, each of their calls, other than this
Speaker 8: one today, which obviously was just focused on the m
Speaker 8: and a transaction, but the past two quarters, that was
Speaker 8: sort of the explanation behind it was we didn't do
Speaker 8: well or as well as expected, and we didn't get
Speaker 8: as much season pass buyers because of the effects of weather.
Speaker 8: And I don't I know if that's necessarily going to
Speaker 8: go away, but I think what they're hoping is the
Speaker 8: expansion of their footprint will sort of diversify them enough
Speaker 8: to make it so that weather isn't as much of
Speaker 8: an issue. I don't know if that's necessarily what I'd
Speaker 8: hang my hat on, but that's certainly their argument.
Speaker 1: Got Disney. You look at Disney there love their theme
Speaker 1: park business. Comcast loves its universal theme park business. They're
Speaker 1: both of those companies are increasing dramatically. They're capital spending
Speaker 1: in those businesses. Is that just a benefit of scale
Speaker 1: and that six Flags and Sedar don't enjoy that same
Speaker 1: kind of scale, so this is one way to get there?
Speaker 9: Well, I would say.
Speaker 8: That they definitely have a lot of scale, particularly six Flags.
Speaker 9: Maybe even some would argue too much scale. It's a
Speaker 9: different business model.
Speaker 8: When you're dealing with regional versus very focused theme parks. Right,
Speaker 8: So Disney, like SeaWorld, benefits from having Florida, having Southern California,
Speaker 8: and so that of course helps them from a cash
Speaker 8: flow perspective, more consistency because they don't have to shut
Speaker 8: down for part of the year.
Speaker 9: For six Flags and Cedar Fair, it's.
Speaker 8: A little bit more regional. The type of customer is
Speaker 8: a little bit different. It's not as much destination. They're
Speaker 8: hoping to shift that a little bit and you're certainly
Speaker 8: seeing that. You know, Cedar Fair does have hotels at
Speaker 8: some of their properties, and so I think that the
Speaker 8: thought process is is that once you're a bit larger,
Speaker 8: you can more actively have a branding and maybe more
Speaker 8: of a presence everywhere you go. So if you're a
Speaker 8: card carrier of a six Flags Great Adventure, you can
Speaker 8: go to any six Flags. Perhaps maybe maybe that's the play,
Speaker 8: is that you know a customer can participate in any area.
Speaker 2: Well, can I ask about the dreaded phrase merger of equals?
Speaker 5: I think they're.
Speaker 2: Saying this themselves, like they think it's a good idea
Speaker 2: to spin that. Daimler Chrysler said the same thing, and
Speaker 2: it was anything but I mean, what a load of bs?
Speaker 10: What?
Speaker 2: What's who's buying? Who's buying whom?
Speaker 10: Here? Right?
Speaker 9: So they structured the deal interestingly, So Cedar Fair is.
Speaker 8: An LP or an MLP specifically, so a limited partnership
Speaker 8: right now, so they have unit holders.
Speaker 9: Six Flags is your standard CE corporation.
Speaker 8: And the way that they structured it is that Cedar
Speaker 8: Fair will get fifty one point two percent of the
Speaker 8: new company shares outstanding. And the reason why they did
Speaker 8: that is I think it sort of helps them to
Speaker 8: not trigger the change of control provision for bondholders, meaning
Speaker 8: bond holders can't then put back the bonds at one
Speaker 8: oh one percent of par and so that of course
Speaker 8: frees up some cash for the two companies. It makes
Speaker 8: it a really stock for stock transaction, except for the
Speaker 8: dividends that Six Flags shareholders get with the closure of
Speaker 8: the deal. And so I think it's an interesting structure.
Speaker 8: It makes it a little bit more beneficial for bondholders
Speaker 8: in some sense, particularly the Six Flags bondholders. We saw
Speaker 8: the bond's rally today and that's a function of the
Speaker 8: fact that you know, Cedar Fair does to some extent,
Speaker 8: they've had better results, at least recently, and their business
Speaker 8: model has been.
Speaker 9: A little bit more.
Speaker 2: Right, well, they have, it's been stronger. They have Cedar Point,
Speaker 2: which I grew up going to that in Sandusky. They
Speaker 2: have the Beast. It's King's Island in Cincinnati. When I
Speaker 2: was a kid. That was the longest, the fastest, the
Speaker 2: tallest wooden roller coaster in the world. Jody, You've got
Speaker 2: I'm guessing, uh, real amusement park experience.
Speaker 5: What are the.
Speaker 2: Best rides out there? What are the rides that the
Speaker 2: roller coaster freaks are psyched about?
Speaker 9: Well, there are quite a few.
Speaker 8: It's funny because I have this conversation a lot with
Speaker 8: I'm gonna name job Ira Jersey, who sits in my
Speaker 8: little Hubble in Princeton. His his son is a roller
Speaker 8: coaster enthusiast, so we're constantly trading discussions about all the
Speaker 8: different roller coasters out there, so which ones are the best?
Speaker 9: I mean, I'm a traditionalist.
Speaker 8: I still I grew up well, you know, grew up
Speaker 8: relative once it finally came out the Batman, the original
Speaker 8: Batman ride not you know, that was in Great Adventure.
Speaker 8: I just always have a soft spot for that, as
Speaker 8: well as for Steel Force, which is at Dorney Park.
Speaker 9: And so, I mean those are just rides.
Speaker 8: That I always went to just because it was a
Speaker 8: regional sort of feel that said. I mean, you know,
Speaker 8: Disney obviously has its.
Speaker 2: Own sort of space mountain right.
Speaker 8: Well, they have Guardians with the Galaxy Now, which was
Speaker 8: certainly an intense ride, definitely different. I mean from an
Speaker 8: innovation standpoint, they certainly do a different sort of innovation
Speaker 8: than what you see at the three regional guys.
Speaker 5: All right, Jerdi, thanks so much for joining us. Appreciate it.
Speaker 1: Jody Lorii credit analysts Bloomberg Intelligence breaking down this Cedar
Speaker 1: Fair and six Flags a deal that it's a merger
Speaker 1: of vehicles is what they're calling it. But trying to
Speaker 1: get a little bit of scale in that theme park business.
Speaker 7: You're listening to the tape Cat's are Line program M
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Speaker 7: thirty Darkening door.
Speaker 5: Here is Doug Adams.
Speaker 1: He's a global cohead of ECM, that would be Equity
Speaker 1: capital Markets at Citybank, one of my former places of employee.
Speaker 1: I used to run the street with Tyler Dixon.
Speaker 5: We were due deals.
Speaker 1: One day he called me out and says, hey, I
Speaker 1: just took down a bunch of this clear channel stock.
Speaker 1: Can you tell me what the radio bis how where
Speaker 1: radio company works? I was like, what I mean, that's
Speaker 1: the kind of risk we would take back in the day.
Speaker 1: Maybe stupid risk, but anyway, Doug Adams does a I'm
Speaker 1: sure a better job than Tyler.
Speaker 2: Doug.
Speaker 5: Thanks so much for joining us here, appreciate it.
Speaker 1: Talk to us about the equity capital markets these days.
Speaker 5: It's tough market, tough geopolitical issues.
Speaker 1: I'm sure the companies don't have a lot of confidence
Speaker 1: maybe in their forecasts or kind of just even the
Speaker 1: next couple of quarters. What are the kind of conversations
Speaker 1: you have with clients these days about their capital structure?
Speaker 11: Now, I appreciate the opportunity to share our thoughts with you,
Speaker 11: and you're right, it's a complicated market right now. We're
Speaker 11: dealing with a number of issues globally and there's a
Speaker 11: lot of uncertainty, and so clients are trying to manage
Speaker 11: their balance sheets, trying to manage their forecasts through that time.
Speaker 11: I do think we are expecting there to be some
Speaker 11: capital raising come in. There are companies that need to
Speaker 11: raise capital over the coming weeks and months. But you know,
Speaker 11: as far as the IPO market, I think what we've
Speaker 11: seen in the performance, and we were just talking about it,
Speaker 11: some of the aftermarket performance hasn't been as strong as
Speaker 11: folks that expected or anticipated, and so in reality, we're
Speaker 11: probably waiting until twenty twenty four until we start to
Speaker 11: see a bigger pipeline of newly issued public IPOs.
Speaker 2: So does that mean it's going to twenty twenty four
Speaker 2: is going to be a better year than twenty twenty
Speaker 2: three for i POS.
Speaker 11: That's certainly what we're hoping at this point.
Speaker 10: I mean, it's been a what.
Speaker 2: If we fall into a recession, is it still does
Speaker 2: it still look like it could be a good year
Speaker 2: for i pos.
Speaker 11: There are a lot of companies lining up, and a
Speaker 11: lot of them have secular growth as opposed to being
Speaker 11: exposed to cyclical aspects in their business. The one thing
Speaker 11: that we have seen and we're tracking, you know, over
Speaker 11: a thousand companies privately private companies right now, and you know,
Speaker 11: there's a lot of really interesting, really exciting companies. The
Speaker 11: real question is when is the right time for them
Speaker 11: to go public. When are they going to get the
Speaker 11: reception both at the IPO but importantly are they going
Speaker 11: to see the aftermarket performance? And that's been the biggest
Speaker 11: struggle of the recent vintage.
Speaker 1: You know, I've some of the deals that came public
Speaker 1: Doug after the Labor Day had what they called marquee investors.
Speaker 5: I'm not sure what the term is. I never had
Speaker 5: them in my deals.
Speaker 1: I just whatever that top application was. I gave Fiddel
Speaker 1: like twice that amount and I'm done. What are these
Speaker 1: marquey investors? How does that come into it is that important.
Speaker 11: Yeah, we refer to them today as kind of corner
Speaker 11: service as investors. And you know, part of it is
Speaker 11: in a market that's reopening like we're going through. Part
Speaker 11: of it is how do I de risk de risk
Speaker 11: a transaction? And so those investors act in two things.
Speaker 11: One is they take some of the potential supply and
Speaker 11: the second thing that they do is provide a validation
Speaker 11: for investors and give them confidence other a broader group
Speaker 11: of investors that people have done more work, they've met
Speaker 11: the company privately early on, and they're willing to go
Speaker 11: on the cover of perspectives, and so that provides greater
Speaker 11: validation in the market.
Speaker 1: So what's the you know, where are we in terms
Speaker 1: of the private equity business and the private credit business
Speaker 1: Because it seems like companies can stay private a lot longer.
Speaker 5: There's so many sources of capital for them.
Speaker 1: They don't need maybe to go public as much as
Speaker 1: maybe they did prior.
Speaker 5: Where are we in that continuum these days?
Speaker 11: And so at say, we run our public and private
Speaker 11: capital raising all through our group in equity capital market,
Speaker 11: and we are seeing that convergence, right, And so investors
Speaker 11: or companies are thinking about what do I raise capital?
Speaker 11: What are the alternatives in the private market? What are
Speaker 11: the alternatives in the public market? And how do I
Speaker 11: think about that? And you're right, you know, they are
Speaker 11: more alternatives today in the private market, But that's not
Speaker 11: a perfect market today either, as we've seen. I think
Speaker 11: that the real question for companies is is their strategic
Speaker 11: value in being public?
Speaker 10: And what's the value?
Speaker 11: It helps in retention of employees, it helps that it's
Speaker 11: an acquisition currency, and for many companies it helps from event,
Speaker 11: branding event for them. And so there are different reasons
Speaker 11: to go public than just raising the capital.
Speaker 2: At the time of the IPO, I mean, how much
Speaker 2: have you when you're looking at your employees right in
Speaker 2: your group, have you seen a shift from the amount
Speaker 2: of women and men you hire to take companies public
Speaker 2: and the amount of women and men you hire to
Speaker 2: give them money on the private side. I mean, you've
Speaker 2: been at city since like Nirvana, right, so yeah, the band.
Speaker 2: You've been at a city since the early nineties, right.
Speaker 10: Have.
Speaker 11: You know in terms of where people are spending their time.
Speaker 11: You know, we've asked our team to really focus on
Speaker 11: understanding what companies needs are and then thinking about the
Speaker 11: public market solutions as well as private market solution, and
Speaker 11: so the teams are versatile to be able to talk
Speaker 11: to clients about the different alternatives that exist. And that's
Speaker 11: one of the things that we've been really focused on
Speaker 11: is understanding the client and coming up with solutions at
Speaker 11: best at their needs.
Speaker 1: You know, in the private I know source of IPOs
Speaker 1: across the street of private private financed private equity finance companies,
Speaker 1: and you always are talking to your private equity clients
Speaker 1: about kind of what their needs are. There haven't been
Speaker 1: a lot of IPO activity for several years now. I
Speaker 1: would think the backlog from the big private equity companies
Speaker 1: like guys, you give me a five minute window. I
Speaker 1: got to get some stuff out the door because I
Speaker 1: need some monetizations, I need to mark these things. I
Speaker 1: need some gains to show my LPs. Where is the
Speaker 1: backlog you know out there on the street these days.
Speaker 11: I think the there's no question private equity firm are
Speaker 11: evaluating their portfolio companies and trying to decide which are
Speaker 11: the right ones to exit in the public market and
Speaker 11: which are the right companies to exit in the private market,
Speaker 11: and they do that all the time. I think with
Speaker 11: a better functioning leverage finance market. One of the things
Speaker 11: that has happened is that the notion of a dual
Speaker 11: track process has become back in viable alternatives for companies
Speaker 11: versus just having one alternative. Having multiple alternatives always help
Speaker 11: those sponsors. But you're right, there are under a lot
Speaker 11: of pressure to return capital to their LPs as they
Speaker 11: look to raise the.
Speaker 1: Next exactly, So what what's it used to be back
Speaker 1: in the day, My day, we could take a company
Speaker 1: public with just a thought, you know, an idea. Now
Speaker 1: you have to have revenue, you have to have profits,
Speaker 1: you have to have defendable franchises. It seems tougher and tougher.
Speaker 1: Where are you where's the market now? In terms of
Speaker 1: I wanted to bring my company public?
Speaker 5: What would you tell me?
Speaker 11: I'd have to have we focus on company that are
Speaker 11: either profitable or a clear path to profitability in the
Speaker 11: near term. And that's what investors want. When we're in
Speaker 11: a market that's reopening, you have to really open the
Speaker 11: market with the highest quality companies. Rebuild the confidence. That's
Speaker 11: been challenge over the last twenty four months. You know,
Speaker 11: one of the things going back to twenty twenty one.
Speaker 11: You know, we prior to twenty twenty one or twenty
Speaker 11: twenty there was an argument that companies are staying private
Speaker 11: too long, and in twenty twenty one everyone said companies
Speaker 11: are going public too early. And so finding that right balance,
Speaker 11: especially in a market that's recovering, it's not a straight line.
Speaker 11: And so starting with the strongest companies, rebuilding that confidence
Speaker 11: in the public markets, and then giving options to companies
Speaker 11: in terms of you know, when and how and how
Speaker 11: large to raise capital becomes important.
Speaker 5: Are there any sectors out there that you're seeing more
Speaker 5: or less demand from from your clients?
Speaker 2: Hey, we want.
Speaker 1: More energy, or we want more tech, or you know
Speaker 1: what are you hearing from your clients?
Speaker 11: The clients are focused on growth and quality of company.
Speaker 11: So don't think it's necessarily those.
Speaker 2: Two things didn't used to be the same thing, right,
Speaker 2: growth and quality. And when you say quality you mean
Speaker 2: like free cash flow, right, or.
Speaker 11: We're profitability or path to profitability. People that have built
Speaker 11: a moat around their businesses and are differentiated. There's a
Speaker 11: lot of companies working on really interesting as I mentioned earlier,
Speaker 11: you know, strategies and disrupting traditional industries. But the real
Speaker 11: question is have they proven that they can actually operate
Speaker 11: as a business as opposed to a plan in those
Speaker 11: in those areas. But we're seeing companies in certainly in
Speaker 11: the software space and technology. More broadly, we're seeing companies
Speaker 11: in the consumer space. Healthcare has been one of the
Speaker 11: most active spaces in the capital markets, but we're also
Speaker 11: seeing companies in financial services, real estate and others trying
Speaker 11: to figure out when will be the right time to
Speaker 11: access the public market.
Speaker 1: Are hedge funds where where the hedge funds in terms
Speaker 1: of buyers of IPOs are just new issues? How important
Speaker 1: are they to you know, an underwriutter like city.
Speaker 11: Look all the investors, the active equity investors are important,
Speaker 11: So long only accounts and mutual funds, hedge funds all
Speaker 11: make up kind of the complexion of the investor base.
Speaker 11: And one of the things is we look at the
Speaker 11: IPOs that came post Labor Day. It wasn't a demand issue,
Speaker 11: right Those transactions were multiple times over subscribed.
Speaker 10: You know.
Speaker 11: The challenge has been the aftermarket performance, and part of
Speaker 11: that is goes to whether you're a hedge fund or
Speaker 11: a long only investor, you know, the average or the
Speaker 11: typical active equity investor are trilling their indexes because the
Speaker 11: indexes have been dominated by a small number of stocks,
Speaker 11: and so if the stock isn't performing well, they can't
Speaker 11: chase that in the aftermarket. They have to cut their
Speaker 11: losses rather than suffer.
Speaker 1: Because I kept wondering, because I said, back in my day,
Speaker 1: I know where you're buying here, here, here, how much
Speaker 1: you're buying. So if the stock does fall, I know
Speaker 1: you're coming in to buy more. But it seems like
Speaker 1: we didn't see that this.
Speaker 11: Yeah, I think there's some technical factors and some fundamental factors.
Speaker 11: I think the technical factors is the underperformance by the
Speaker 11: active equity investment in investor relative to their benchmark. And
Speaker 11: the fundamental challenge has been you know that tenure has
Speaker 11: moved pretty significantly since labor Day, so the cost of
Speaker 11: capital for these companies has gone up significantly.
Speaker 5: All right, Doug, great stuff.
Speaker 1: Appreciate you taking a few minutes your time to come
Speaker 1: across the street and talk to us. Doug Adams, he's
Speaker 1: co head Global cohead of ECM four City.
Speaker 7: You're listening to the tape CANSUR Live program Bloomberg Markets
Speaker 7: weekdays at ten am Eastern on Bloomberg Radio, the tune
Speaker 7: in app, Bloomberg dot Com, and the.
Speaker 10: Bloomberg Business App.
Speaker 7: You can also listen live on Amazon Alexa from our
Speaker 7: flagship New York station, Just say Alexa Play Bloomberg eleven thirty.
Speaker 1: There's a thing met here in the healthcare business called
Speaker 1: Obesity Week. It used to be a quiet annual meeting
Speaker 1: of weight loss specialists and a few farmer reps. But
Speaker 1: over four days in Dallas this month, it became clear
Speaker 1: that the new obesity drugs are changing that along with
Speaker 1: everything else in their path.
Speaker 5: Lisa Jarvis joins us to break it down.
Speaker 1: Lisa is a calumnist with Bloomberg Opinion covering biotech, healthcare,
Speaker 1: and the pharmaceutical biz. Lisa, can you put into perspective
Speaker 1: what these GLP one drugs are? How impactful are they?
Speaker 1: Where are we going with this stuff? Because it came
Speaker 1: out of nowhere and that's all anybody can talk about
Speaker 1: these days.
Speaker 12: Right, Thanks for having me. Well, yeah, they're taking the
Speaker 12: world by storm, that's for sure. They've been used. This
Speaker 12: class of drugs has been used for a long time
Speaker 12: for diabetes, and you know a side effect was weight loss,
Speaker 12: and so they decided to amp that up and you know,
Speaker 12: explore the drugs for use for use, just for weight loss,
Speaker 12: and the difference between what they can do and kind
Speaker 12: of all the older diet pills that existed is best.
Speaker 12: You know, in the past. You know, basically what you
Speaker 12: could expect was at the most about five percent weight
Speaker 12: loss with some of these older diet pills, and it
Speaker 12: was often not sustainable. With Wegovi, which is Nova nerdist
Speaker 12: drug and with Minjaro, which is Lily's drugs still not
Speaker 12: yet approved for weight loss, but expected to be by
Speaker 12: the end of this year. You know, you're looking at
Speaker 12: somewhere between fifteen even up to twenty five percent some
Speaker 12: of the newer drugs that are in the pipeline, you know,
Speaker 12: for segments of the population up to thirty percent of
Speaker 12: their body weight. So it's pretty dramatic and needless to say,
Speaker 12: and it's really taken the world by storm.
Speaker 2: I just want to lose like ten to fifteen percent
Speaker 2: of my body weight. But apparently, sorry, Novo Nordisk has
Speaker 2: put the starter doses on hold because they just can't
Speaker 2: make enough. And we asked the CEO today Lars for
Speaker 2: Regard Jurgensen, you know, what are you going to do
Speaker 2: about the supply. He's so cagy about it. He's like,
Speaker 2: we have a plan, but I can't like tell you
Speaker 2: about it, which is why if you're like boosting capacity
Speaker 2: at factories, or if you're making it in a different country,
Speaker 2: or like, why would you not be able to tell
Speaker 2: us about it. I don't get that.
Speaker 12: Yeah, I mean it's been an ongoing to struggle with
Speaker 12: all of these drugs, the fact that they can't keep
Speaker 12: up with demand. I think the issue is less than
Speaker 12: actual ingredient and then drug itself and more of the
Speaker 12: vials that they put it into. And so they've been
Speaker 12: really you're right cage about it and been really careful
Speaker 12: about allowing new people out of the drugs. The problem is,
Speaker 12: you know, there's this whole gray market of compounding, compounded
Speaker 12: pharmacies that are offering the drugs. So people are starting
Speaker 12: on it, buying it from kind of telehealth places somewhat sketchy,
Speaker 12: I would say. And yeah, I.
Speaker 2: Heard a commercial yesterday on Bloomberg Radio on Serious XM
Speaker 2: Channel one nineteen, and it was for what sounded like
Speaker 2: probably a pretty sketchy place saying like, hey, call us up,
Speaker 2: we can charge this to your insurance trust US, and
Speaker 2: I was thinking, cool, because it's one thousand dollars a month, right,
Speaker 2: can they charge at LISA to my insurance or do
Speaker 2: I have to pay myself.
Speaker 12: Well, that's the thing with these drugs right now. Very
Speaker 12: few people are able to get them covered by insurance,
Speaker 12: you know, because insurers are worried about how much it's
Speaker 12: going to cost in the long term. If everybody goes
Speaker 12: on them, and the idea is that you take them
Speaker 12: for life, and you know, that could be a significant
Speaker 12: burn into most plans given the number of people in
Speaker 12: the US who are of a body weight where they
Speaker 12: would qualify for these drugs. When it comes to the telehealth,
Speaker 12: they're often charging less, probably because they're getting it from
Speaker 12: a different source and you're maybe taking it not in
Speaker 12: the pen form, and maybe you're having to inject the
Speaker 12: drug itself. It wouldn't be something I would recommend. I've
Speaker 12: written another column about that that I think most doctors
Speaker 12: would say, don't do that, just hold off and try
Speaker 12: to try to get it from you know, the real
Speaker 12: deal this is.
Speaker 2: You know, Lars was telling us this morning too, because
Speaker 2: I said, dude, I don't want like, I don't care
Speaker 2: that much about stomach problems. I definitely don't want suicidal thoughts,
Speaker 2: which some reports have said, you know, that's a possibility potential.
Speaker 2: And then I'm terrified of needles, and he said, you
Speaker 2: know a lot of people like to go to the
Speaker 2: doctor once a week and get a shot. Is that
Speaker 2: possibly true? Like I can't even get my couch to
Speaker 2: go to the gym. I'm definitely not going to find
Speaker 2: time to go to the doctor.
Speaker 12: You know, I think so well, you don't have to
Speaker 12: go to the doctor. You do it at home yourself,
Speaker 12: just like you do with if you had diabetes. Because
Speaker 12: the people who are taking ozen Pick instead of we
Speaker 12: go be ozen Pick is the same drug, lower dose
Speaker 12: for diet approof for diabetes. But there's good news for
Speaker 12: you in the sense that there are pills that are
Speaker 12: in the works that you know, could replace the need
Speaker 12: for needles. The weight loss might not be quite as dramatic,
Speaker 12: we don't know yet, but it could still be substantial.
Speaker 12: And some of those pills you might not even need
Speaker 12: to take as often as as the injection. So there's
Speaker 12: a lot of different things that are in development. Because
Speaker 12: obviously at a market that people are pegging at like
Speaker 12: one hundred billion dollars by twenty thirty. Everybody wants to.
Speaker 10: Get on it.
Speaker 1: So, yeah, is there any scenario like I I was
Speaker 1: going to ask you a size of the business, but
Speaker 1: that's that's a big size. Is this always going to
Speaker 1: be or is this expect it to always be a
Speaker 1: prescription type situation or they're being over at the counter
Speaker 1: option at some point.
Speaker 12: I think, I think we're going to stick to a
Speaker 12: prescription for the foreseeable future in the sense that people
Speaker 12: are going to want insurance to pay for it, and
Speaker 12: oftentimes with over the counter that's that's not something that
Speaker 12: insurance always covers. But you know, especially as we start
Speaker 12: to see this drug, more data come out for the
Speaker 12: health outcomes. So you know, we're talking about weight loss,
Speaker 12: but Novo has offered some data showing that taking this
Speaker 12: drug can reduce the risk of heart attacks and strokes
Speaker 12: by twenty percent. That's substantial. There's a lot of other
Speaker 12: trials running trying to show other health benefits, whether that's
Speaker 12: you know, chronic kidney disease, you know NAFH which is
Speaker 12: a NASH which is a fatty liver disease, or even addictions.
Speaker 12: So I think probably we're not going to see it
Speaker 12: over the counter, and the market is just so potentially
Speaker 12: huge as a prescription drug.
Speaker 1: It's kind of odd to think about this to be
Speaker 1: a drug you have to commit to for life. I mean,
Speaker 1: it's one thing if you're doing that for a disease
Speaker 1: or something that you.
Speaker 2: Have to, but this is more on the other hand, Dude,
Speaker 2: I'm committed to like hogen DAWs and Heinekens for life, right,
Speaker 2: And you know, I might even spend less on we
Speaker 2: go Vi Euros Epic if I can. You know, I
Speaker 2: don't know, Like I don't know how much it's gonna
Speaker 2: limit my cravings to drink alcohol, to eat sugary foods,
Speaker 2: to smoke cigarettes. But apparently it helps Lisa with all
Speaker 2: those things.
Speaker 12: It's so far anecdotally at least, it seems to be
Speaker 12: helping with all those and it's now being studied as
Speaker 12: for addiction. So whether that's alcohol, you know, other drugs,
Speaker 12: illicit drugs, or other things. But you know, and you
Speaker 12: can think of sugar in that same way. I've talked
Speaker 12: to a lot of people who are taking these drugs
Speaker 12: and they just most of them say almost instantly, like
Speaker 12: within the first twenty four hours, they feel a change
Speaker 12: in the they're kind of brain signals telling them to eat.
Speaker 12: And so I think some of the concern is more
Speaker 12: about making sure people are getting enough nutrition, to be
Speaker 12: honest with you, because for some people, their diet is
Speaker 12: so depressed that they just aren't they're not craving. They're
Speaker 12: not craving Krispy Creaming anymore.
Speaker 2: That's the the interesting thing is, uh, well a couple things.
Speaker 2: Can this reduce fat only and not reduce muscle mass?
Speaker 2: And then also if people are smoking more weed, are
Speaker 2: they gonna need this to counteract the munchies?
Speaker 12: Well, fair enough, although they might not desire the weed,
Speaker 12: to be honest with you, if they're taking the drug.
Speaker 12: So that's one thing. It's just hard. Everyone has a
Speaker 12: different experience with it. Some people like just lose their
Speaker 12: desire for you know, whatever was their vice. So on
Speaker 12: that news, Yeah, I mean, you know, I think I
Speaker 12: think there's a lot to a lot to we still
Speaker 12: just don't know, you know, about how long people are
Speaker 12: even gonna want to, for example, not enjoy some of
Speaker 12: those things in life. I spoke with some doctors or
Speaker 12: said they have patients who just want to take a
Speaker 12: break because they want to go out to dinner and
Speaker 12: for their birthday and.
Speaker 2: To have their cake and eat it too.
Speaker 12: Or at least pause. But so yeah, so there's sort
Speaker 12: of like a lot of discussion about what how is
Speaker 12: this sustainable in the long term? You take down the dose,
Speaker 12: could you take breaks? You know, how could we think
Speaker 12: about what it looks like in the long term so
Speaker 12: that you can maintain that weight loss. And like you said,
Speaker 12: you know, thinking about the muscle mass too. And I'll
Speaker 12: just note the companies are also looking at ways of
Speaker 12: combining these drugs with drugs that help you sustain your
Speaker 12: muscle mass, so it.
Speaker 1: Could be a whole new I'm gonna let I'm gonna
Speaker 1: let other people take the lead on this. I'm gonna
Speaker 1: be a big time follower at least drivers. Thanks so
Speaker 1: much for joining us.
Speaker 7: You're listening to the tape Can's Are Live program Bloomberg
Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the
Speaker 7: tune in app, Bloomberg dot Com, and.
Speaker 10: The Bloomberg Business App.
Speaker 7: You can also listen live on Amazon Alexa from our
Speaker 7: flagship New York station, Just say Alexa, play Blue.
Speaker 5: Let's kind of continue that legal thing.
Speaker 1: Our next guest Nouvelle Gonzalo, founder Gonzalo Law Group. She
Speaker 1: joins us live here in our Bloomberg Interactive Brokers studio,
Speaker 1: or she get.
Speaker 13: Her JD b B Ohio State University, right, the Ohio
Speaker 13: State University in conjunction with Oxford University in England too.
Speaker 4: But yes, I feel like.
Speaker 2: Those two are on the same level as they're excellent.
Speaker 2: They're both excellent university exactly.
Speaker 6: One has a better football.
Speaker 1: One has a better football depending upon how you define
Speaker 1: football throat all. Right, let's talk about Meta first, because
Speaker 1: they have been sued by California and like, I don't know,
Speaker 1: forty seven other states talk about harmful youth marketing.
Speaker 2: What's going?
Speaker 1: I mean the stock nobody cares in the stock sotocks
Speaker 1: of one hundred fifty five percent. From a legal perspective,
Speaker 1: is there anything there?
Speaker 10: Oh?
Speaker 13: My gracious, this is huge. This is an amazing case
Speaker 13: because you were looking at over forty three attorney generals
Speaker 13: from different states that are this case against Meta. And
Speaker 13: we're talking about a platform that owns Facebook, Instagram, Messenger, WhatsApp.
Speaker 13: There's about four billion users worldwide.
Speaker 2: What's that threads Twitter competitor?
Speaker 10: Right?
Speaker 13: Yes, yes, so you know, this is huge and we
Speaker 13: have not seen this type of bipartisan support with forty
Speaker 13: three you know, states going against them. But essentially, what
Speaker 13: the issue is here, this is not only data privacy law,
Speaker 13: but this is data privacy law and children because essentially,
Speaker 13: what the states are arguing is that, hey, you are
Speaker 13: intentionally harming children with how you're handling your platforms, the
Speaker 13: futures that you're putting in place. And there were memos,
Speaker 13: internal memos that were leaked from Meta into the public marketplace,
Speaker 13: and we found out that Meta was aware of the
Speaker 13: harm that some of its futures caused to children. And
Speaker 13: so now the states are in an uprising over this.
Speaker 13: So that's what we're doing. That's what we're watching with
Speaker 13: this case and watching the impact with it. And essentially
Speaker 13: some of the main concerns because you might say, okay, well, look, listen,
Speaker 13: isn't this just business as usual? You know, people want
Speaker 13: companies want to have platforms that their users want to
Speaker 13: be on. They want to make it user friendly, they
Speaker 13: want people to be engaging with it, So how is
Speaker 13: this that different? But the concern here is not just that, Okay,
Speaker 13: we have an engaging platform. People are using it. But
Speaker 13: the concern here is that they have at a platform
Speaker 13: that is specifically geared toward and working to psychologically hook kids.
Speaker 13: And so we say, okay, well, what futures are that?
Speaker 13: I mean, isn't it just kids, you know, online socializing
Speaker 13: with one another. But actually we see the comparison like
Speaker 13: future the filters they say are promoting body dysmorphia and
Speaker 13: eating disorders. They're you know, saying, oh, did you have that?
Speaker 6: No, No, I have none of that. What I'm what
Speaker 6: I'm fascinated by. Look, there's a ton of studies that
Speaker 6: show us that social media is in general toxic, but
Speaker 6: it's especially toxic to children. But so are lots and
Speaker 6: lots of other things. Hey, if are probably regulated for you. Yeah,
Speaker 6: but isn't this something parents are supposed.
Speaker 2: To regulate with their keep I was thinking exactly so.
Speaker 6: And you know, to me, the bigger concern with Meta
Speaker 6: I still call it Facebook is they and Google Google
Speaker 6: just dominate online advertising. It seems like there's a little
Speaker 6: bit of an anti trust question. How are two companies driving,
Speaker 6: you know, the vast majority of ads online. It seems
Speaker 6: there should be some competition.
Speaker 2: It does seem I was gonna ask you, Novelle, is
Speaker 2: this kind of a way in for prosecutors who have
Speaker 2: concerns about monopolistic behaviors but just can't seem to bust
Speaker 2: them on that kind of like you know, when they
Speaker 2: were going after al Capone, they wanted to get him
Speaker 2: for organized crime, and they actually ended up getting him
Speaker 2: on taxi. So I just wonder if they're trying to
Speaker 2: is that way for them to go in the back
Speaker 2: door or and maybe kind of break up or minimize
Speaker 2: a little bit the power of someone like Meta.
Speaker 13: I'd say that it's possible, but it's not likely. And
Speaker 13: that's because they're not asking them to break up their companies.
Speaker 13: They're asking them to regulate how they're obtaining information on
Speaker 13: the users and to really comply with data privacy laws.
Speaker 13: And so that's a different question that we're asking. And
Speaker 13: so when we're saying, okay, you're doing psychological research on
Speaker 13: how to make sure things are engaging for children, how
Speaker 13: to make sure that you're hooking them, you have research
Speaker 13: that shows it's harming them. But then you say, we're
Speaker 13: not doing anything wrong. What's the problem here? This is
Speaker 13: very similar to what we saw with the tobacco companies.
Speaker 13: What we saw with Big Pharma, and so we have
Speaker 13: to look at this really closely. It's not just a
Speaker 13: matter of okay, right, parents need to regulate what the
Speaker 13: students are doing, what the kids are doing. So, but
Speaker 13: if you have the information, you know what to regulate.
Speaker 6: So you lived in Europe for a long time, Yes,
Speaker 6: Europeans seem to take the right to privacy laws much
Speaker 6: more seriously than we do in the United States. Wouldn't
Speaker 6: those sort of things that say, it's my data and
Speaker 6: I can control it, and Facebook or for that matter, Apple, Google,
Speaker 6: Amazon can't be selling and reselling. Isn't that the choke
Speaker 6: point to generate some control over not only how these
Speaker 6: companies affect us, but specifically what we allow them to
Speaker 6: do with our minor children's data.
Speaker 13: Berry That is an excellent question, and I couldn't agree more.
Speaker 13: What we're seeing in the United States is we take
Speaker 13: a lot of our privacy laws from the European model
Speaker 13: with the General Data Protection Regulation or the GDPR, and
Speaker 13: so we're taking our laws a lot from that, or
Speaker 13: kind of adopting our own set, but not as.
Speaker 6: Strict that we seem to be much looser than the European.
Speaker 13: We're by state, so we'll see, you know, each state
Speaker 13: has their own sets of regulations California, Illinois, and so forth,
Speaker 13: but we are looking at how they do things and
Speaker 13: the reality is, yes we have those regulations, Yes we
Speaker 13: have it to protect, but if they're not being followed,
Speaker 13: then that's the problem. And that's what's being alleged here
Speaker 13: that they're violating some of the children's.
Speaker 2: Data protection laws.
Speaker 13: And so if that, I will tell you if they
Speaker 13: violated either the children's Data protection privacy laws or even
Speaker 13: any of our state ones, they absolutely most likely violated
Speaker 13: the global ones, because anytime you have a user from
Speaker 13: the EU any part of Europe, the GDPR comes into effect.
Speaker 13: So I will tell you it's most likely also that
Speaker 13: the EU regulators are watching this case very closely, because
Speaker 13: if they are in fact found to be in violation
Speaker 13: of privacy laws consumer protection laws, then we're also going
Speaker 13: to see probably some issues abroad as well.
Speaker 6: What are the damages if Meta loses the case? What
Speaker 6: sort of options are going to take place? Is this
Speaker 6: going to be them riting a big check or are
Speaker 6: they going to have to change how they do business?
Speaker 13: I think we'll see a variety of things. One of
Speaker 13: the things that ended up coming up is they were
Speaker 13: launching getting ready to launch Instagram Kids. And so Instagram
Speaker 13: Kids was a flatform, a platform for children age thirteen
Speaker 13: and under, and so you're talking about some of the
Speaker 13: most vulnerable parts of our population. Children's minds are not
Speaker 13: even developed yet. And so they did this and they
Speaker 13: were in works with it. Another memo was leaked and
Speaker 13: when that was found out, over forty US states went
Speaker 13: ahead and wrote Mark Zuckerberg and said, listen, please stop it,
Speaker 13: don't do it, don't move forward with it, and they did.
Speaker 13: They paused it. So we might see injunctions here, so
Speaker 13: a pause on work that they're doing or projects that
Speaker 13: are in the works. We might see change in the
Speaker 13: platform and modification. We'll some disclosures, more disclosures because you
Speaker 13: can't which you don't know is out there happening to
Speaker 13: your child. So if you think, oh, what's the harm
Speaker 13: and letting them, you know, have their comparison like Future
Speaker 13: put their filters on. But if you don't know that
Speaker 13: there's research that this harms your child and there's an
Speaker 13: intent or problem, you can't regulate it.
Speaker 2: So you'll see disclosures.
Speaker 5: All right, Noville, thank you, so much for joining us.
Speaker 1: Novelle Gonzalo, a founder of Gonzalo Law Group, bring us
Speaker 1: up to date on some of the legal challenges out
Speaker 1: there for meta as somebody, anybody in this case, the
Speaker 1: States trying to get a handle on some of the
Speaker 1: content that's being consumed out there, particularly by kids, so
Speaker 1: we'll stay on top of that.
Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can
Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever
Speaker 2: podcast platform you prefer. I'm Matt Miller. I'm on Twitter
Speaker 2: at Matt Miller nineteen seventy three. And I'm Faull Sweeney.
Speaker 5: I'm on Twitter at pt Sweeney.
Speaker 1: Before the podcast, you can always catch us worldwide at
Speaker 1: Bloomberg Radio