1 00:00:01,720 --> 00:00:05,360 Speaker 1: From Mahard where Innovation of Money and Power colle in 2 00:00:05,480 --> 00:00:07,000 Speaker 1: Silicon Valley, NBN. 3 00:00:07,320 --> 00:00:11,360 Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove. 4 00:00:24,720 --> 00:00:27,920 Speaker 3: I'm Caroline Hyder Bloomberg's World headquarters in New York, and 5 00:00:28,000 --> 00:00:29,480 Speaker 3: I'm Ed Lovelow in San Francisco. 6 00:00:29,560 --> 00:00:32,440 Speaker 2: This is Bloomberg Technology Happy twenty twenty four. 7 00:00:32,760 --> 00:00:34,879 Speaker 3: Yeah, a brand new year, and coming up on our 8 00:00:34,920 --> 00:00:38,760 Speaker 3: first program of the year, Full market coverage ahead, US 9 00:00:38,840 --> 00:00:41,599 Speaker 3: stocks and bonds. Look, they kickstart the day in. 10 00:00:41,560 --> 00:00:44,519 Speaker 2: The red and we'll look at the movers, weighing on 11 00:00:44,560 --> 00:00:48,239 Speaker 2: the benchmarks as Apple drops amid a Barclay's downgrade on 12 00:00:48,360 --> 00:00:50,840 Speaker 2: calling iPhone demand details ahead, plus. 13 00:00:50,600 --> 00:00:52,680 Speaker 3: The latest read on the health of the EV market. 14 00:00:52,720 --> 00:00:56,200 Speaker 3: That's as Tesla falls behind China's EYD in terms of production. 15 00:00:56,640 --> 00:00:59,040 Speaker 3: That and so much more coming up on the show. 16 00:00:59,080 --> 00:01:01,360 Speaker 3: But first it's check in on the markets, because when 17 00:01:01,400 --> 00:01:02,960 Speaker 3: we know that we've had the push the pull of 18 00:01:02,960 --> 00:01:04,920 Speaker 3: the Apple and the Tesla with of course some of 19 00:01:04,959 --> 00:01:08,080 Speaker 3: those sales maybe up to expectations, but losing when it 20 00:01:08,080 --> 00:01:10,240 Speaker 3: comes to a key Chinese competitor. But and now's that 21 00:01:10,280 --> 00:01:12,440 Speaker 3: currently off by one and quarter percent. Two year yields 22 00:01:12,480 --> 00:01:14,880 Speaker 3: sell off. This is a global bond market sell off. 23 00:01:14,880 --> 00:01:17,040 Speaker 3: We've seen it in the UK over in Europe in particular. 24 00:01:17,360 --> 00:01:19,560 Speaker 3: And remember we've got a lot of corporate issuants coming through. 25 00:01:19,600 --> 00:01:23,360 Speaker 3: Some slight supply side issues probably at play here a 26 00:01:23,360 --> 00:01:25,800 Speaker 3: little bit with the boring costs Bloomberg dollar indext that 27 00:01:25,959 --> 00:01:28,640 Speaker 3: rises on higher. Have we called it right that we're 28 00:01:28,640 --> 00:01:31,160 Speaker 3: going to see as many rate cuts in twenty twenty 29 00:01:31,160 --> 00:01:34,360 Speaker 3: four as the market currently anticipates. Market just recalibrating that 30 00:01:34,360 --> 00:01:36,080 Speaker 3: this morning. Move on, have a look at what's happening 31 00:01:36,080 --> 00:01:38,200 Speaker 3: in the world of crypto, because as the dollar strengthens, 32 00:01:38,240 --> 00:01:40,600 Speaker 3: it's interesting the bitcoin does too. We are up four 33 00:01:40,640 --> 00:01:43,760 Speaker 3: tens percent for bitcoin versus us or actually eclipsing that 34 00:01:43,920 --> 00:01:46,720 Speaker 3: forty five thousand dollars hand or are all important as 35 00:01:46,760 --> 00:01:49,600 Speaker 3: we watch out for that ETF where the SEC approves 36 00:01:49,680 --> 00:01:50,920 Speaker 3: the spot bitcoin ETF. 37 00:01:51,920 --> 00:01:55,360 Speaker 2: Yeah, and the logic follows understandably that most crypto related 38 00:01:55,440 --> 00:01:56,000 Speaker 2: stocks in. 39 00:01:55,920 --> 00:01:58,040 Speaker 4: The equities markets are also higher. 40 00:01:58,080 --> 00:02:00,640 Speaker 2: Some of the familiar names you see high single digit 41 00:02:01,120 --> 00:02:04,560 Speaker 2: gains in the green. One exception to that rule is Coinbase, 42 00:02:04,680 --> 00:02:07,760 Speaker 2: softer by four point four percent. Happen even lower, I 43 00:02:07,800 --> 00:02:10,280 Speaker 2: guess look at the performance of that stock in twenty 44 00:02:10,280 --> 00:02:12,960 Speaker 2: twenty three, and then look at the run up that 45 00:02:13,000 --> 00:02:15,440 Speaker 2: it had from the end of October through to the 46 00:02:15,520 --> 00:02:19,520 Speaker 2: year end. Maybe there is some profit taking or you know, 47 00:02:19,760 --> 00:02:22,320 Speaker 2: rs I think was eighty going into the pre market 48 00:02:22,320 --> 00:02:24,919 Speaker 2: this morning. There's something going on there. We're not entirely 49 00:02:24,919 --> 00:02:28,239 Speaker 2: sure what it is. The biggest single story and downward 50 00:02:28,240 --> 00:02:32,000 Speaker 2: pressure on the market more broadly is Apple. Barkley's downgrading 51 00:02:32,240 --> 00:02:35,280 Speaker 2: to underweight, a new price target slightly lower one hundred 52 00:02:35,280 --> 00:02:38,320 Speaker 2: and sixty dollars per share. They basically said, we're looking 53 00:02:38,360 --> 00:02:41,200 Speaker 2: at the volumes and mix for the iPhone fifteen, we're 54 00:02:41,200 --> 00:02:43,640 Speaker 2: not convinced. They're also saying that if we get an 55 00:02:43,680 --> 00:02:47,919 Speaker 2: iPhone sixteen, we don't see the technological upgrades in that 56 00:02:47,960 --> 00:02:51,280 Speaker 2: generation to move this stock high. Remember, Apple had multiple 57 00:02:51,320 --> 00:02:54,520 Speaker 2: quarters in twenty twenty three where expectations were missed, but 58 00:02:54,560 --> 00:02:57,640 Speaker 2: the stock continued to run up. That's an interesting equation 59 00:02:57,760 --> 00:03:00,160 Speaker 2: going into it, and it's the biggest points drag as 60 00:03:00,160 --> 00:03:01,799 Speaker 2: it stands on both the NAS that one hundred and 61 00:03:01,880 --> 00:03:04,040 Speaker 2: the S and P five hundred this Tuesday morning, and 62 00:03:04,080 --> 00:03:04,600 Speaker 2: look when. 63 00:03:04,440 --> 00:03:06,720 Speaker 3: It's just shy of two point nine trillion dollar market 64 00:03:06,720 --> 00:03:10,320 Speaker 3: cap the odd percentage point does have a huge impact 65 00:03:10,520 --> 00:03:12,760 Speaker 3: on the overall SMP. Let's just talk about all of 66 00:03:12,800 --> 00:03:15,880 Speaker 3: this with Iako Yoshioka put Poto, manager over at Wealth 67 00:03:15,919 --> 00:03:18,720 Speaker 3: Enhancement Group. Is so good to kick off twenty twenty 68 00:03:18,720 --> 00:03:20,639 Speaker 3: four with you, Iaco and just talk to us a 69 00:03:20,680 --> 00:03:23,520 Speaker 3: little bit about some of the impact of these Magnificent seven. 70 00:03:23,560 --> 00:03:26,440 Speaker 3: The impact that Apple had had is fifty percent run 71 00:03:26,440 --> 00:03:28,360 Speaker 3: off in twenty twenty three, and then on the day 72 00:03:28,680 --> 00:03:30,720 Speaker 3: of course, people starting to think that they can really 73 00:03:31,000 --> 00:03:33,360 Speaker 3: continue to outperform. That seems to be questioned. 74 00:03:34,680 --> 00:03:38,200 Speaker 5: Hi Caroline, Happy new year to you. Yes, you know, 75 00:03:38,320 --> 00:03:42,760 Speaker 5: with Apple, it's probably our least favorite among the Magnificent seven. 76 00:03:43,480 --> 00:03:47,080 Speaker 5: You know, tech overall without fifty six percent as a 77 00:03:47,120 --> 00:03:49,280 Speaker 5: sector within the F and P five hundred and twenty 78 00:03:49,320 --> 00:03:52,240 Speaker 5: twenty three. So starting off twenty twenty four with a 79 00:03:52,280 --> 00:03:56,240 Speaker 5: little bit of a breather, not a big surprise here. 80 00:03:56,360 --> 00:03:59,360 Speaker 5: And then with Apple, you know, as Barclay's mentioned in 81 00:03:59,400 --> 00:04:03,000 Speaker 5: their down you know, the slowing of their overall hardware 82 00:04:03,080 --> 00:04:06,520 Speaker 5: sales is going to be a problem. And you know, 83 00:04:06,600 --> 00:04:09,160 Speaker 5: the one thing that keeps the stock up with all 84 00:04:09,200 --> 00:04:12,160 Speaker 5: the buybacks, but you know, when the multiple is closer 85 00:04:12,280 --> 00:04:15,520 Speaker 5: to thirty times. It's just less attractive sort of on 86 00:04:15,560 --> 00:04:17,479 Speaker 5: a you know, going forward basis. 87 00:04:17,480 --> 00:04:22,520 Speaker 2: Here, how much does the reaction in Apple signify a 88 00:04:22,600 --> 00:04:26,640 Speaker 2: broader concern that all of the fantastic growth inequities and 89 00:04:26,680 --> 00:04:29,200 Speaker 2: the tech sect we saw in twenty twenty three it's 90 00:04:29,279 --> 00:04:32,479 Speaker 2: not going to carry through to twenty twenty four. 91 00:04:32,760 --> 00:04:36,320 Speaker 5: Hi, ed, Yes, you know, reversals tend to happen in January. 92 00:04:36,360 --> 00:04:38,720 Speaker 5: You know, we all love to hear about the dogs 93 00:04:38,720 --> 00:04:41,280 Speaker 5: of the Dow and how they tend to perform better 94 00:04:41,480 --> 00:04:45,320 Speaker 5: in January, and so, you know, we do see a 95 00:04:45,320 --> 00:04:49,280 Speaker 5: little bit of profit taking clearly going on today in 96 00:04:49,360 --> 00:04:52,480 Speaker 5: many of these Magnificent seven names. You know, we like 97 00:04:52,640 --> 00:04:55,560 Speaker 5: technology from a long term perspective. I think a lot 98 00:04:55,600 --> 00:04:58,000 Speaker 5: of these names have a lot of growth in them 99 00:04:58,120 --> 00:05:01,359 Speaker 5: over the long term. However, you know, in the short term, 100 00:05:01,480 --> 00:05:04,640 Speaker 5: you know, profit taking happens. It's good to lock in 101 00:05:04,680 --> 00:05:06,880 Speaker 5: some of those great returns that we saw in twenty 102 00:05:06,920 --> 00:05:10,520 Speaker 5: twenty three and pay those taxes in twenty twenty five. 103 00:05:11,520 --> 00:05:14,280 Speaker 2: In order to realize some of those returns last year, 104 00:05:14,680 --> 00:05:19,080 Speaker 2: you needed to buy seven names, the Magnificent Seven. How 105 00:05:19,080 --> 00:05:21,600 Speaker 2: will that be different in twenty twenty four, there were 106 00:05:21,600 --> 00:05:23,920 Speaker 2: so many unique stories within those seven. You know, in 107 00:05:24,000 --> 00:05:28,000 Speaker 2: Video was a really clear AI story on the compute side. 108 00:05:28,560 --> 00:05:31,000 Speaker 2: Can it just continue on or do you have to 109 00:05:31,000 --> 00:05:34,360 Speaker 2: go very specific? Forget the bundle of seven. The magnificent 110 00:05:34,400 --> 00:05:35,800 Speaker 2: one is when you've got to go down. 111 00:05:37,160 --> 00:05:41,159 Speaker 5: Well, in Video was definitely a leader within that magnificent seven, 112 00:05:41,360 --> 00:05:44,360 Speaker 5: up over two hundred and thirty nine percent. I believe 113 00:05:44,400 --> 00:05:48,520 Speaker 5: in twenty twenty three, you know, will that repeat not likely? 114 00:05:49,279 --> 00:05:51,560 Speaker 5: And we have to remember that in twenty twenty two, 115 00:05:51,760 --> 00:05:56,080 Speaker 5: in video was down over fifty percent, and so that 116 00:05:56,320 --> 00:05:58,839 Speaker 5: you know, great growth that we saw in twenty twenty 117 00:05:58,880 --> 00:06:01,680 Speaker 5: three was after significant decline. 118 00:06:02,360 --> 00:06:02,560 Speaker 6: You know. 119 00:06:02,680 --> 00:06:05,920 Speaker 5: Longer term, we continue to like Nvidia and you know 120 00:06:06,000 --> 00:06:08,719 Speaker 5: what they are doing. They continue to grow their total 121 00:06:08,720 --> 00:06:12,600 Speaker 5: addressable market with you know, starting with gaming, leading into 122 00:06:12,640 --> 00:06:15,719 Speaker 5: machine learning and then going on to the data center 123 00:06:16,279 --> 00:06:18,719 Speaker 5: and AI, and so we continue to like that. We 124 00:06:18,800 --> 00:06:20,480 Speaker 5: just don't think that it's going to have the type 125 00:06:20,480 --> 00:06:24,400 Speaker 5: of returns that we experience in twenty twenty three. And 126 00:06:24,480 --> 00:06:28,000 Speaker 5: diversification really wasn't your friend in twenty twenty three. But 127 00:06:28,279 --> 00:06:30,839 Speaker 5: I think going into twenty twenty four, we believe that 128 00:06:31,000 --> 00:06:33,960 Speaker 5: a broadening of the overall market is what's going to 129 00:06:34,000 --> 00:06:35,080 Speaker 5: benefit investors. 130 00:06:35,640 --> 00:06:38,240 Speaker 3: Ah, So talk about that broadening, IACO. Do you go 131 00:06:38,360 --> 00:06:41,560 Speaker 3: broader within the US, do you go for smaller market 132 00:06:41,560 --> 00:06:43,760 Speaker 3: capitalizations or do you go global? 133 00:06:45,080 --> 00:06:45,240 Speaker 4: Yeah? 134 00:06:45,320 --> 00:06:47,600 Speaker 5: I think you go all of it. You know, we 135 00:06:47,640 --> 00:06:50,640 Speaker 5: saw in at the end of twenty twenty three small 136 00:06:50,680 --> 00:06:55,559 Speaker 5: caps had a significant comeback in November and December, having 137 00:06:55,640 --> 00:06:57,840 Speaker 5: you know, I think December small caps are up over 138 00:06:57,880 --> 00:07:01,560 Speaker 5: twelve percent, and so you know how having that diversification 139 00:07:01,920 --> 00:07:04,640 Speaker 5: really helps out. And then you know, I know we 140 00:07:04,680 --> 00:07:07,640 Speaker 5: talked about the dollar sort of rebounding at least recently, 141 00:07:08,040 --> 00:07:11,880 Speaker 5: but you know, the dollar weakness does help out international 142 00:07:11,920 --> 00:07:15,400 Speaker 5: and emerging market stocks. So we expect some of that 143 00:07:15,440 --> 00:07:19,880 Speaker 5: broadening to benefit overall investors, especially as interest rates you know, 144 00:07:19,960 --> 00:07:22,320 Speaker 5: come down, or at least if that's the expectation. 145 00:07:23,680 --> 00:07:27,040 Speaker 3: So you said, how perhaps Apple was you know, the 146 00:07:27,120 --> 00:07:31,760 Speaker 3: least favored among some of those key names. Which one 147 00:07:31,800 --> 00:07:34,320 Speaker 3: is your star forma? Which name do you have to 148 00:07:34,360 --> 00:07:35,800 Speaker 3: hold onto with both hands? 149 00:07:36,760 --> 00:07:40,640 Speaker 5: You know, we really like Microsoft. I think here it's 150 00:07:40,680 --> 00:07:45,320 Speaker 5: a broad again, diversified name. They've got so many areas 151 00:07:45,320 --> 00:07:48,920 Speaker 5: of growth, they continue to grow within cloud. They do 152 00:07:49,000 --> 00:07:54,240 Speaker 5: have the partnership with open Ai in regards to artificial intelligence, 153 00:07:54,600 --> 00:07:57,680 Speaker 5: and so we like all of that. They continue to grow, 154 00:07:58,600 --> 00:08:01,880 Speaker 5: you know, outlook in Microsoft three sixty they have co 155 00:08:02,160 --> 00:08:06,640 Speaker 5: Pilot which launched in November, which will introduce more AI 156 00:08:07,400 --> 00:08:11,760 Speaker 5: capabilities across all of the Microsoft platform, and so we 157 00:08:11,800 --> 00:08:14,000 Speaker 5: continue to like Microsoft over the long term. 158 00:08:15,120 --> 00:08:17,760 Speaker 2: A Yaka Yo Shoka of WELC and Hansman Group. Just 159 00:08:17,800 --> 00:08:20,120 Speaker 2: a terrific way to kick off what I'm sure is 160 00:08:20,120 --> 00:08:22,360 Speaker 2: going to be a ginormous year for the Magnificent seven 161 00:08:22,440 --> 00:08:32,720 Speaker 2: or otherwise, Thank you very much. Turning to the ev 162 00:08:32,880 --> 00:08:36,760 Speaker 2: Or auto makers, Tesla topping Q for delivery estimates, Rivian 163 00:08:36,880 --> 00:08:40,000 Speaker 2: falling short, beating on production. Will start with Tesla with 164 00:08:40,000 --> 00:08:43,480 Speaker 2: our Global Auto's za Or editor Craig Tude's out of London. 165 00:08:43,800 --> 00:08:46,160 Speaker 2: So Tesla does four hundred and eighty four thy five 166 00:08:46,240 --> 00:08:48,480 Speaker 2: hundred and seven EV's in the final three months of 167 00:08:48,520 --> 00:08:52,280 Speaker 2: the year. It beats estimates, It beats the target of 168 00:08:52,320 --> 00:08:55,080 Speaker 2: one point eight million vehicles for the year. But the 169 00:08:55,120 --> 00:08:58,000 Speaker 2: other storyline is that they lose their crown as the 170 00:08:58,040 --> 00:08:59,439 Speaker 2: world's biggest seller of EV's. 171 00:09:00,640 --> 00:09:03,080 Speaker 7: Yeah, that's right, and it wasn't particularly close. In the 172 00:09:03,080 --> 00:09:07,480 Speaker 7: fourth quarter, BYD outsold Tesla by about forty two thousand evs. 173 00:09:08,240 --> 00:09:10,920 Speaker 7: So this was a trend that we really could see 174 00:09:10,960 --> 00:09:14,040 Speaker 7: coming just looking at you know how BYD was trending, 175 00:09:14,080 --> 00:09:18,280 Speaker 7: particularly in China. They really dominate to that market and 176 00:09:18,360 --> 00:09:21,880 Speaker 7: have done so in sort of dramatic fashion very quickly. 177 00:09:22,280 --> 00:09:24,240 Speaker 7: Just a few years ago. You know, this was a 178 00:09:24,280 --> 00:09:28,520 Speaker 7: company that decided to make a full transition to only 179 00:09:28,880 --> 00:09:31,679 Speaker 7: battery electric and plug in hybrid sales for their lineup 180 00:09:32,080 --> 00:09:36,959 Speaker 7: and in very short order managed to pass up Tesla 181 00:09:37,000 --> 00:09:39,760 Speaker 7: in that market. They're now ahead on a global basis, 182 00:09:39,800 --> 00:09:42,120 Speaker 7: and this is a company that you know, you hear 183 00:09:42,200 --> 00:09:46,160 Speaker 7: Elon Musks talk about vertical integration and sort of controlling 184 00:09:46,160 --> 00:09:48,880 Speaker 7: your own destiny, making all of your parts or many 185 00:09:48,920 --> 00:09:51,679 Speaker 7: of your parts in house. BYD does that to an 186 00:09:51,679 --> 00:09:54,559 Speaker 7: even greater extent than Tesla does. They make their own batteries, 187 00:09:54,840 --> 00:09:57,600 Speaker 7: they make chips. So this is a company that has 188 00:09:57,679 --> 00:10:00,040 Speaker 7: kind of you know, out Tesla and Tesla in the 189 00:10:00,000 --> 00:10:00,560 Speaker 7: the last couple of. 190 00:10:00,559 --> 00:10:03,120 Speaker 3: Years and selling at a pace five hundred and twenty 191 00:10:03,120 --> 00:10:06,319 Speaker 3: six four hundred and nine fully electric in the last quarter. 192 00:10:06,480 --> 00:10:09,160 Speaker 3: But there is going to be increasing competition coming on 193 00:10:09,200 --> 00:10:13,080 Speaker 3: its home turf. BYD is selling cheaper cars, it's making 194 00:10:13,120 --> 00:10:15,760 Speaker 3: therefore less profit than Tesla is, and they're likely to 195 00:10:15,840 --> 00:10:18,880 Speaker 3: even more competition coming from China as well. How do 196 00:10:18,880 --> 00:10:20,520 Speaker 3: you think Tesla will fare in that, Craig. 197 00:10:21,720 --> 00:10:24,440 Speaker 7: It's a massively competitive market, and you're right to call 198 00:10:24,480 --> 00:10:28,600 Speaker 7: out that the price differences here between Tesla and BYD 199 00:10:28,720 --> 00:10:33,840 Speaker 7: are hugely different. The estimate for the average transaction price 200 00:10:34,400 --> 00:10:38,000 Speaker 7: for Tesla among analysts survey by Bloomberg is you know, 201 00:10:38,040 --> 00:10:41,000 Speaker 7: something on the order of forty five thousand dollars. BID 202 00:10:41,160 --> 00:10:44,360 Speaker 7: is roughly half that. So this is a very different 203 00:10:44,600 --> 00:10:47,679 Speaker 7: couple of companies. But we are seeing BYD also move 204 00:10:47,800 --> 00:10:50,200 Speaker 7: up market, whereas you know, Tesla has been moving in 205 00:10:50,240 --> 00:10:54,160 Speaker 7: the other direction, right, And so you know, the China 206 00:10:54,200 --> 00:10:57,679 Speaker 7: market is hugely competitive. Musk himself will tell you it's 207 00:10:57,720 --> 00:11:01,520 Speaker 7: the most competitive in the world weather bew ideas able 208 00:11:01,600 --> 00:11:03,280 Speaker 7: to sort of weather that. I think they've you know, 209 00:11:03,400 --> 00:11:05,880 Speaker 7: really made a statement in terms of their ability to 210 00:11:06,240 --> 00:11:09,360 Speaker 7: do so. But it only will get more difficult in 211 00:11:09,440 --> 00:11:11,760 Speaker 7: the year to come, especially as we see, you know, 212 00:11:11,880 --> 00:11:14,360 Speaker 7: some of the cell phone makers in China enter the 213 00:11:14,400 --> 00:11:19,000 Speaker 7: space and do so through contract manufacturing arrangements with some 214 00:11:19,080 --> 00:11:21,160 Speaker 7: of the state owned companies, and that's going to be 215 00:11:21,280 --> 00:11:23,720 Speaker 7: a trend that's really interesting to watch in twenty twenty four. 216 00:11:24,840 --> 00:11:27,080 Speaker 2: Craig I was in the hot seat this morning for Rivian, 217 00:11:27,080 --> 00:11:30,600 Speaker 2: and when I was writing about production and delivery, it 218 00:11:30,679 --> 00:11:33,880 Speaker 2: was interesting the severity of the share reaction. Right, they 219 00:11:33,960 --> 00:11:37,280 Speaker 2: quite comfortably beat their full year production guidance, but you 220 00:11:37,360 --> 00:11:39,640 Speaker 2: were drilling down and made a wonderful chart that looks 221 00:11:39,640 --> 00:11:42,600 Speaker 2: at kind of how sequentially deliveries have started to lag 222 00:11:42,640 --> 00:11:42,880 Speaker 2: a bit. 223 00:11:44,240 --> 00:11:46,400 Speaker 7: Yeah, I think this is a company that you know, 224 00:11:46,559 --> 00:11:50,040 Speaker 7: was really production constraint that was their issue for sort 225 00:11:50,080 --> 00:11:53,000 Speaker 7: of you know, quarter after quarter, which ad you documented 226 00:11:53,040 --> 00:11:56,520 Speaker 7: really well. You know, this is a company that's managed 227 00:11:56,559 --> 00:11:58,600 Speaker 7: to sort out some of the kinks and in production 228 00:11:58,760 --> 00:12:03,439 Speaker 7: and over some of the growing pains the the deliveries, 229 00:12:04,200 --> 00:12:06,520 Speaker 7: you know, part of the equation. They still have some 230 00:12:06,559 --> 00:12:08,960 Speaker 7: work to do and of course, you know, the the 231 00:12:09,000 --> 00:12:13,679 Speaker 7: investors aren't going to look particularly fondly when you outproduce, 232 00:12:14,240 --> 00:12:17,160 Speaker 7: you know, relative to deliveries by the amount that that 233 00:12:17,880 --> 00:12:18,679 Speaker 7: Rivian did in. 234 00:12:18,600 --> 00:12:19,319 Speaker 8: The fourth quarter. 235 00:12:19,559 --> 00:12:21,960 Speaker 7: There's going to be some concern about whether you're pushing 236 00:12:22,000 --> 00:12:24,480 Speaker 7: on a string and whether you may need to cut 237 00:12:24,520 --> 00:12:27,440 Speaker 7: prices you know, in the future, and so that will 238 00:12:27,440 --> 00:12:29,960 Speaker 7: be something for us to watch. Also, I'm you know, 239 00:12:30,200 --> 00:12:34,160 Speaker 7: very curious and whether you know the delivery van production, 240 00:12:34,960 --> 00:12:38,839 Speaker 7: you know, and the change in Rivian being constrained to 241 00:12:38,920 --> 00:12:41,880 Speaker 7: only being able to deliver those to Amazon to just 242 00:12:42,240 --> 00:12:44,720 Speaker 7: you know, very late in the quarter, uh, sort of 243 00:12:44,840 --> 00:12:46,679 Speaker 7: being able to sort of get out of that deal 244 00:12:46,840 --> 00:12:51,440 Speaker 7: and you know, start delivering delivery vehicles to to other customers. 245 00:12:51,720 --> 00:12:53,680 Speaker 7: You know, maybe there was a complication with that in 246 00:12:53,720 --> 00:12:55,760 Speaker 7: the fourth quarter that accounts for this differential. 247 00:12:56,480 --> 00:12:59,560 Speaker 3: We're going to drill in to demand side equation of 248 00:12:59,600 --> 00:13:01,920 Speaker 3: all these things so much more. With that credited out. 249 00:13:01,960 --> 00:13:03,719 Speaker 3: Always great to have you, Thank you, And later on 250 00:13:03,760 --> 00:13:05,280 Speaker 3: the show, we are going to do a real deep 251 00:13:05,320 --> 00:13:08,520 Speaker 3: dive on Tesla in particular Dan Levy from Barkley's going 252 00:13:08,559 --> 00:13:11,720 Speaker 3: to be joining us on his latest thought. And note, meanwhile, 253 00:13:11,960 --> 00:13:14,560 Speaker 3: let's talk about well the other Elon Musk company when 254 00:13:14,640 --> 00:13:16,360 Speaker 3: one of what's six or seven of them, we're going 255 00:13:16,400 --> 00:13:18,880 Speaker 3: to talk X because Fidelity has just cut the valuation 256 00:13:19,040 --> 00:13:21,680 Speaker 3: of the state that it has in the social media company. 257 00:13:21,920 --> 00:13:24,200 Speaker 3: This is the latest in a series of markdowns by 258 00:13:24,240 --> 00:13:27,320 Speaker 3: Fidelity ever since Musk concluded the acquisition of the social 259 00:13:27,360 --> 00:13:29,240 Speaker 3: media platform all the way back in October twenty twenty 260 00:13:29,280 --> 00:13:32,000 Speaker 3: two feels like a lifetime ago. Someone who's been tracking 261 00:13:32,000 --> 00:13:34,560 Speaker 3: that ever since. As Blue Merg's Kurt Wagner and we 262 00:13:34,880 --> 00:13:38,160 Speaker 3: got the numbers, just remind us how much they're cutting 263 00:13:38,200 --> 00:13:39,840 Speaker 3: and what sort of number we're now looking at for 264 00:13:39,840 --> 00:13:41,680 Speaker 3: evaluation of Twitter now. 265 00:13:41,760 --> 00:13:45,720 Speaker 9: Xeh, I believe the cut from the end of November, 266 00:13:45,720 --> 00:13:49,360 Speaker 9: I think it was was around eleven percent, but in total, 267 00:13:49,800 --> 00:13:53,720 Speaker 9: more than seventy percent. The value has been cut down 268 00:13:53,840 --> 00:13:56,520 Speaker 9: since the close of the acquisition. Now you will remember 269 00:13:56,600 --> 00:13:58,800 Speaker 9: that was a forty four billion dollar acquisition at the 270 00:13:58,880 --> 00:13:59,800 Speaker 9: end of twenty twenty two. 271 00:14:00,400 --> 00:14:01,200 Speaker 4: If it's been cut. 272 00:14:01,080 --> 00:14:02,960 Speaker 9: By more than seventy percent, we're now looking at a 273 00:14:02,960 --> 00:14:05,760 Speaker 9: company that at least Fidelity believes is valued closer to 274 00:14:05,800 --> 00:14:08,760 Speaker 9: twelve and a half thirteen billion dollars. And so, you know, 275 00:14:08,800 --> 00:14:11,160 Speaker 9: to put that into a little bit of historical perspective, 276 00:14:11,200 --> 00:14:14,200 Speaker 9: you may remember Caroline back in way back in twenty sixteen, 277 00:14:14,200 --> 00:14:16,920 Speaker 9: Twitter almost ald the Disney almost ald the salesforce. The 278 00:14:16,960 --> 00:14:19,880 Speaker 9: company was around the same value way back then in 279 00:14:19,920 --> 00:14:24,400 Speaker 9: twenty sixteen as it is today per Fidelity. So you know, 280 00:14:24,440 --> 00:14:28,240 Speaker 9: We've just seen a huge erasure of value from X 281 00:14:28,280 --> 00:14:29,240 Speaker 9: since Elon took over. 282 00:14:30,400 --> 00:14:33,280 Speaker 2: The curious thing about this is that Fidelity is one 283 00:14:33,320 --> 00:14:37,520 Speaker 2: of the investment firms that participated in the take private 284 00:14:37,560 --> 00:14:41,400 Speaker 2: deal in the first place. Behind this, I guess we 285 00:14:41,480 --> 00:14:45,880 Speaker 2: don't know, you know, the fact is behind Fidelity's decisional 286 00:14:45,920 --> 00:14:47,120 Speaker 2: how they arrived. 287 00:14:46,800 --> 00:14:47,600 Speaker 4: At that valuation. 288 00:14:47,800 --> 00:14:50,920 Speaker 2: But you've done some reporting on how the financials have 289 00:14:51,080 --> 00:14:53,000 Speaker 2: changed in the last twelve months. 290 00:14:54,160 --> 00:14:56,200 Speaker 9: Yeah, we talked about this, ed if you'll remember, right 291 00:14:56,280 --> 00:14:58,960 Speaker 9: before the new year, right, we had a story come 292 00:14:59,000 --> 00:15:02,840 Speaker 9: out and Bloomberg that the advertising revenue at X is 293 00:15:02,880 --> 00:15:05,680 Speaker 9: projected to be you know, somewhere around two point five billion, 294 00:15:05,800 --> 00:15:07,520 Speaker 9: and that may even be on the high side, right, 295 00:15:07,520 --> 00:15:09,400 Speaker 9: because some of these productions were made earlier in the 296 00:15:09,480 --> 00:15:12,280 Speaker 9: quarter before Elon went on stage at deal Book and 297 00:15:12,920 --> 00:15:16,320 Speaker 9: you know, started swearing at Twitter's advertising partners, and so 298 00:15:17,120 --> 00:15:20,920 Speaker 9: you know, the value of Twitter's business or excuse me, 299 00:15:20,920 --> 00:15:23,120 Speaker 9: the size of Twitter's business has just decreased so much. 300 00:15:23,680 --> 00:15:25,920 Speaker 9: Even just a few years ago before Elon showed up, 301 00:15:25,960 --> 00:15:27,560 Speaker 9: you know, they were bringing in more than five billion 302 00:15:27,560 --> 00:15:29,560 Speaker 9: dollars a year, most of that in advertising revenue. We're 303 00:15:29,560 --> 00:15:33,840 Speaker 9: now talking you know about half of that. And a 304 00:15:33,880 --> 00:15:36,800 Speaker 9: lot of this is quite frankly self inflicted, right. A 305 00:15:36,880 --> 00:15:39,520 Speaker 9: lot of the issues that they've had seem to be 306 00:15:39,560 --> 00:15:43,040 Speaker 9: things they could have avoided with you know, some different approaches, 307 00:15:43,120 --> 00:15:44,760 Speaker 9: I think to the advertising business. 308 00:15:45,000 --> 00:15:48,680 Speaker 3: And to that end, self inflicted wounds as they are 309 00:15:49,600 --> 00:15:53,680 Speaker 3: does ultimately bother the management, the leadership of the erosion 310 00:15:53,680 --> 00:15:56,280 Speaker 3: of value might well bother some of the partners who 311 00:15:56,320 --> 00:15:58,800 Speaker 3: well went in on the deal to take private, but 312 00:15:59,200 --> 00:16:03,160 Speaker 3: ultimately us real pressure being put on turning this company 313 00:16:03,160 --> 00:16:04,600 Speaker 3: around and building back is value. 314 00:16:05,800 --> 00:16:08,160 Speaker 9: Well, they're in a unique position, right, and not only 315 00:16:08,240 --> 00:16:11,560 Speaker 9: are they not a publicly traded company, but a lot 316 00:16:11,560 --> 00:16:14,960 Speaker 9: of their investors are sort of investing in Elon Musk 317 00:16:15,080 --> 00:16:18,200 Speaker 9: and X may be one of part of that investment, 318 00:16:18,240 --> 00:16:20,200 Speaker 9: but they also want to be involved with Elon when 319 00:16:20,240 --> 00:16:23,320 Speaker 9: it comes to SpaceX or neuralink or boring company or 320 00:16:23,360 --> 00:16:25,480 Speaker 9: whatever types of things he does, right, And so I 321 00:16:25,520 --> 00:16:28,320 Speaker 9: think there's a lot more patience from the people who 322 00:16:28,440 --> 00:16:31,440 Speaker 9: invest alongside Elon Musk because they see the bigger picture, 323 00:16:31,480 --> 00:16:33,680 Speaker 9: right and they say, Okay, maybe we are losing some 324 00:16:33,760 --> 00:16:36,400 Speaker 9: money on our X investment right now, but the relationship 325 00:16:36,440 --> 00:16:38,480 Speaker 9: that we've built with Elon. The support that we're giving 326 00:16:38,560 --> 00:16:40,800 Speaker 9: him on that side will pay off in some of 327 00:16:40,800 --> 00:16:43,080 Speaker 9: the other businesses that he runs. Right at least, that's 328 00:16:43,080 --> 00:16:44,720 Speaker 9: how it's working right now now. I don't think there's 329 00:16:44,720 --> 00:16:47,320 Speaker 9: going to necessarily be a willingness to just continue to 330 00:16:47,640 --> 00:16:49,960 Speaker 9: run this into the ground over time, but I think 331 00:16:50,000 --> 00:16:52,320 Speaker 9: he has a little bit more runway than most companies 332 00:16:52,360 --> 00:16:55,880 Speaker 9: would in this situation because of all the other businesses 333 00:16:55,920 --> 00:16:56,440 Speaker 9: that he has. 334 00:16:57,640 --> 00:17:00,320 Speaker 2: Bloomberst Cowagonist Star in the year with the store of 335 00:17:00,680 --> 00:17:02,720 Speaker 2: X the company and platform for me known as Twitter. 336 00:17:03,040 --> 00:17:05,880 Speaker 2: Just as we started twenty twenty three, some things don't change. 337 00:17:06,040 --> 00:17:07,520 Speaker 2: Happy new year to you now. Coming up here on 338 00:17:07,520 --> 00:17:11,639 Speaker 2: Bloomberg Technology, another big, big story, Biden blocks chip making 339 00:17:11,640 --> 00:17:15,720 Speaker 2: equipment to China. Details behind the administration's attempts to curtail 340 00:17:16,160 --> 00:17:37,400 Speaker 2: China's tech advances. That's coming up next. This is Bloombog Technology. Okay, 341 00:17:37,400 --> 00:17:39,399 Speaker 2: it's time for talking tech. First up in the news, 342 00:17:39,480 --> 00:17:43,240 Speaker 2: Dish Network and Echo Star finalizing their merger. The two 343 00:17:43,280 --> 00:17:45,400 Speaker 2: companies close the deal on December thirty. 344 00:17:45,480 --> 00:17:45,720 Speaker 4: First. 345 00:17:45,800 --> 00:17:48,679 Speaker 2: The move comes as Dish chairman Charlie Ergin seeks to 346 00:17:48,680 --> 00:17:52,320 Speaker 2: move away from the dwindling pay TV businesses into wireless 347 00:17:52,320 --> 00:17:55,680 Speaker 2: services to challenges the likes of Verizon AT and T 348 00:17:56,119 --> 00:17:59,400 Speaker 2: and T Mobile and Bido's bid for live streaming company 349 00:17:59,520 --> 00:18:03,120 Speaker 2: Joy lapses. The three point six billion dollar offer did 350 00:18:03,200 --> 00:18:07,000 Speaker 2: not get approval by December thirty, first deadline from regulators 351 00:18:07,040 --> 00:18:10,399 Speaker 2: by whose first announced the present potential acquisition back in 352 00:18:10,440 --> 00:18:13,080 Speaker 2: November of twenty twenty, as the Chinese search giant was 353 00:18:13,119 --> 00:18:16,320 Speaker 2: trying to get into advances in the digital video arena. 354 00:18:16,359 --> 00:18:19,719 Speaker 2: Plus in the UK, BT Group may face some fines. 355 00:18:19,760 --> 00:18:23,920 Speaker 2: The telecom company missed UK deadlines to move data out 356 00:18:23,920 --> 00:18:28,119 Speaker 2: of core network equipment, which was manufactured by China's Huawei. 357 00:18:28,400 --> 00:18:31,000 Speaker 2: The UK banned the usage of Huawei from its telicon 358 00:18:31,040 --> 00:18:35,240 Speaker 2: infrastructure back in twenty twenty over national security concerns. 359 00:18:35,320 --> 00:18:39,080 Speaker 3: Caroc Let's stick on those national security concerns the geopolitics, 360 00:18:39,119 --> 00:18:42,200 Speaker 3: that is China versus or developed nations at the moment 361 00:18:42,240 --> 00:18:46,480 Speaker 3: because chib equipment manufacturer ASML faced over there in the Netherlands, 362 00:18:46,480 --> 00:18:49,360 Speaker 3: it's canceled shipments for some of its machines that were 363 00:18:49,400 --> 00:18:51,600 Speaker 3: headed to China at the request of the Biden administration. 364 00:18:51,840 --> 00:18:54,440 Speaker 3: This is calling to people familiar with the matter for more. 365 00:18:54,720 --> 00:18:57,840 Speaker 3: We're welcomed in Mackenzie Hawkins joining us NOLU from Washington. 366 00:18:57,840 --> 00:19:00,879 Speaker 3: And the interesting thing is they front run basically the 367 00:19:01,040 --> 00:19:03,040 Speaker 3: date that the ban was coming in. They had to 368 00:19:03,080 --> 00:19:05,880 Speaker 3: hold back even when well theory they were still allowed 369 00:19:05,920 --> 00:19:08,639 Speaker 3: to be selling them right exactly. 370 00:19:08,800 --> 00:19:11,800 Speaker 10: So the Dutch government had actually imposed restrictions on these 371 00:19:11,840 --> 00:19:14,600 Speaker 10: machines that were set to go into effect on January first, 372 00:19:14,960 --> 00:19:17,959 Speaker 10: but the Biden administration pressured the Dutch government to cancel 373 00:19:18,040 --> 00:19:21,720 Speaker 10: licenses for ASML through the end of last year because 374 00:19:21,760 --> 00:19:23,800 Speaker 10: they were worried that China could use those chip making 375 00:19:24,000 --> 00:19:26,560 Speaker 10: machines to continue making semiconductor advances. 376 00:19:27,200 --> 00:19:29,280 Speaker 2: This is an instance where it's really important to be 377 00:19:29,359 --> 00:19:32,920 Speaker 2: clear what we're talking about chip making equipment, or more 378 00:19:32,960 --> 00:19:37,240 Speaker 2: specifically the cutting edge of ultra violet lithography machines, and 379 00:19:37,520 --> 00:19:42,040 Speaker 2: this is what ASML defined that as but in layman's terms, 380 00:19:42,560 --> 00:19:45,760 Speaker 2: it is the ability to cram as many transistors onto 381 00:19:45,760 --> 00:19:50,760 Speaker 2: a chip as possible etch on in the smallest form factor. 382 00:19:51,080 --> 00:19:54,840 Speaker 2: And the relevance Mackenzie, as you know, is that reporting 383 00:19:55,040 --> 00:19:57,560 Speaker 2: last year about Huawei and what they were able to 384 00:19:57,600 --> 00:20:01,040 Speaker 2: do at the cutting edge using ASML machine, but some 385 00:20:01,160 --> 00:20:03,880 Speaker 2: different machines exactly. 386 00:20:04,000 --> 00:20:04,160 Speaker 4: So. 387 00:20:04,200 --> 00:20:07,560 Speaker 10: The most advanced chip making machines are so called EUV machines. 388 00:20:07,600 --> 00:20:10,280 Speaker 10: ASML is the only company that makes these machines, and 389 00:20:10,359 --> 00:20:13,359 Speaker 10: the Dutch government has banned ASML from sending those machines 390 00:20:13,400 --> 00:20:18,160 Speaker 10: to China for a long time. But Huawei, China's tech giant, 391 00:20:18,560 --> 00:20:20,720 Speaker 10: was able to produce a ship with its chip making 392 00:20:20,760 --> 00:20:25,200 Speaker 10: partner Smith using DUV machines, which are still highly advanced, 393 00:20:25,240 --> 00:20:28,080 Speaker 10: but a slightly less advanced model that ASML was still 394 00:20:28,080 --> 00:20:30,600 Speaker 10: allowed to ship to China. And so what the US 395 00:20:30,600 --> 00:20:32,560 Speaker 10: had been working with the Dutch government on was a 396 00:20:32,600 --> 00:20:35,840 Speaker 10: set of restrictions on the shipment of those immersion DUV 397 00:20:36,000 --> 00:20:40,480 Speaker 10: machines to Beijing, and the Dutch government implemented such a restriction, 398 00:20:40,600 --> 00:20:43,200 Speaker 10: but gave a lag time to ASML to continue making 399 00:20:43,240 --> 00:20:46,639 Speaker 10: shipments through January. First, the US stepped in and said, 400 00:20:46,920 --> 00:20:48,960 Speaker 10: you need to actually cancel those shipments. And those are 401 00:20:49,000 --> 00:20:49,880 Speaker 10: the conversations that. 402 00:20:49,840 --> 00:20:50,960 Speaker 4: Happened over the last time. 403 00:20:51,480 --> 00:20:54,040 Speaker 2: There is some interesting politics behind this as well. So, 404 00:20:54,080 --> 00:20:57,560 Speaker 2: according to Bloomberg's reporting, US National Security Advisor Jake Sullivan 405 00:20:57,600 --> 00:20:59,919 Speaker 2: phones the Dutch and says, can you get a sm 406 00:21:00,240 --> 00:21:02,879 Speaker 2: to do it? And the Dutch say just phone them yourselves, 407 00:21:03,040 --> 00:21:04,600 Speaker 2: make their request direct. 408 00:21:06,000 --> 00:21:08,879 Speaker 10: Exactly. So first you had Jake Sullivan reaching out to 409 00:21:08,920 --> 00:21:12,600 Speaker 10: the Dutch government. They say contact ASML. The US has 410 00:21:12,600 --> 00:21:15,720 Speaker 10: this conversation with ASML, and then you see the Dutch 411 00:21:15,720 --> 00:21:18,040 Speaker 10: revoke some of these licenses. So you're working with a 412 00:21:18,040 --> 00:21:20,800 Speaker 10: little bit of a workaround here where the Dutch government 413 00:21:20,840 --> 00:21:22,280 Speaker 10: wants to be able to point to the US and 414 00:21:22,320 --> 00:21:25,200 Speaker 10: say this restriction is coming from Washington. And of course 415 00:21:25,240 --> 00:21:28,560 Speaker 10: you saw the US tighten its restrictions on overall chip 416 00:21:28,600 --> 00:21:32,440 Speaker 10: making equipment and advanced computing exports to China earlier this year, 417 00:21:32,680 --> 00:21:37,480 Speaker 10: additionally affecting some Dutch machines, some of the emerging duvelethography 418 00:21:37,520 --> 00:21:40,600 Speaker 10: equipment from ASML. So you have a bit of a 419 00:21:40,720 --> 00:21:44,760 Speaker 10: tension between Washington and Amsterdam as the US plas ahead 420 00:21:44,800 --> 00:21:48,720 Speaker 10: with its chip war against Beijing and the Dutch, the Japanese, 421 00:21:48,720 --> 00:21:50,840 Speaker 10: other governments around the world are sort of dragged. 422 00:21:50,560 --> 00:21:51,520 Speaker 4: Into a well as well. 423 00:21:52,640 --> 00:21:55,440 Speaker 2: Bloomberg's Mackenzie Hawk and it's just terrific reporting. Worth noting 424 00:21:55,480 --> 00:21:57,400 Speaker 2: chip stocks are underpressure today carrec. 425 00:21:57,520 --> 00:22:00,920 Speaker 3: Yeah, particularly in China, those that would depend on such 426 00:22:01,000 --> 00:22:04,120 Speaker 3: sort of EUV lithography. We thank you so much McKenzie 427 00:22:04,119 --> 00:22:17,160 Speaker 3: has always. 428 00:22:12,760 --> 00:22:15,680 Speaker 2: Welcome back to bliogow Technology Ed Lovelow here in San Francisco, 429 00:22:15,880 --> 00:22:16,280 Speaker 2: and I'm. 430 00:22:16,160 --> 00:22:17,720 Speaker 3: Karen Hide in New York. Let's get you a quick 431 00:22:17,760 --> 00:22:19,440 Speaker 3: check on these markets. First day, I've traded A twenty 432 00:22:19,480 --> 00:22:21,680 Speaker 3: twenty four and will there's a little bit of profit 433 00:22:21,720 --> 00:22:23,960 Speaker 3: taking risk coming off the table. Call it what you will. 434 00:22:24,119 --> 00:22:26,760 Speaker 3: We're reassessing how much rates are going to rise all 435 00:22:26,840 --> 00:22:29,119 Speaker 3: fall and how quickly they might be cut. Here in 436 00:22:29,160 --> 00:22:31,240 Speaker 3: the United States in particular, we're looking at therefore two 437 00:22:31,280 --> 00:22:33,760 Speaker 3: year yield that backs up at some seven basis points. 438 00:22:33,760 --> 00:22:35,920 Speaker 3: It's a global bond sell off, and indeed it's in 439 00:22:35,960 --> 00:22:38,120 Speaker 3: everything sell off. Kind of a day equities down and 440 00:22:38,160 --> 00:22:40,240 Speaker 3: bonds were seeing then aw's like one hundred curry off 441 00:22:40,280 --> 00:22:42,800 Speaker 3: by one point four percent. Worst day for generally tech 442 00:22:42,800 --> 00:22:45,560 Speaker 3: stocks is December the twentieth. Now we are seeing bitcoin 443 00:22:45,600 --> 00:22:47,480 Speaker 3: though still getting a little bit of love. We anticipate, 444 00:22:47,520 --> 00:22:49,520 Speaker 3: of course, a spot Bitcoin et have been signed off 445 00:22:49,560 --> 00:22:52,600 Speaker 3: as as soon as June January eighth, January tenth, we're 446 00:22:52,600 --> 00:22:54,840 Speaker 3: looking at it up some three point seven percent, eclipsing 447 00:22:54,880 --> 00:22:57,480 Speaker 3: that forty five thousand dollars handle. Moving on and look 448 00:22:57,480 --> 00:22:59,359 Speaker 3: at some of the individual players that we're looking at, 449 00:22:59,400 --> 00:23:02,280 Speaker 3: because well, when you are seeing a juggernaut such as 450 00:23:02,320 --> 00:23:05,640 Speaker 3: Apple on the downside after a keynote out of Barclays, well, 451 00:23:05,720 --> 00:23:08,040 Speaker 3: no wonder the overall benchmarks fall and we're off by 452 00:23:08,040 --> 00:23:10,840 Speaker 3: more than three percent for a company that's worth well 453 00:23:10,840 --> 00:23:13,119 Speaker 3: at one point three trillion dollars, So no wonder it 454 00:23:13,160 --> 00:23:15,600 Speaker 3: has a key points waiting micro strategy. Of course, a 455 00:23:15,640 --> 00:23:17,600 Speaker 3: lot of the cryptonames on the higher side. As bitcoin 456 00:23:17,680 --> 00:23:20,240 Speaker 3: goes high, we know micro strategy of course, key element 457 00:23:20,280 --> 00:23:22,320 Speaker 3: of the balance sheet is indeed and bitcoin we're up 458 00:23:22,320 --> 00:23:25,119 Speaker 3: eleven percent. Lastly though, just looking at Tesla, and this 459 00:23:25,160 --> 00:23:29,280 Speaker 3: has been the news of the morning. Ultimately Tesla managing 460 00:23:29,280 --> 00:23:31,240 Speaker 3: to live up to the one point eight million for 461 00:23:31,320 --> 00:23:34,760 Speaker 3: the full year in terms of evs sold, but it's 462 00:23:34,760 --> 00:23:37,400 Speaker 3: been eclipsed by a big Chinese player now and we've 463 00:23:37,400 --> 00:23:39,480 Speaker 3: got a dissectors to how much that really matters. 464 00:23:40,080 --> 00:23:41,480 Speaker 4: Yeah, it's interesting that the stocks flat. 465 00:23:41,520 --> 00:23:42,520 Speaker 2: I mean, it's kind of been a way over the 466 00:23:42,520 --> 00:23:45,119 Speaker 2: place since the market open, markedly higher than lower, and 467 00:23:45,119 --> 00:23:47,520 Speaker 2: then higher and then lower again. Let's keep the conversation 468 00:23:47,600 --> 00:23:50,239 Speaker 2: going and bringing Dan Livy Ananist for Barkleys who has 469 00:23:50,240 --> 00:23:52,720 Speaker 2: an equal weight rating on Tesla a two hundred and 470 00:23:52,760 --> 00:23:54,200 Speaker 2: sixty dollars price target. 471 00:23:54,840 --> 00:23:56,600 Speaker 4: What is the storyline for you? Dan? 472 00:23:56,800 --> 00:24:00,760 Speaker 2: You know, you meet the stated one point eight million target, 473 00:24:00,760 --> 00:24:04,040 Speaker 2: But I remember a year ago the first earning score 474 00:24:04,119 --> 00:24:07,280 Speaker 2: of the year in January twenty twenty three, musked outing, well, 475 00:24:07,280 --> 00:24:09,840 Speaker 2: we could do two million maybe, So what does the 476 00:24:09,840 --> 00:24:11,480 Speaker 2: score cards show? 477 00:24:11,880 --> 00:24:12,439 Speaker 4: All told? 478 00:24:14,160 --> 00:24:17,840 Speaker 8: Hey, Edon Carlin, thank you so much for having me. Yeah. 479 00:24:18,280 --> 00:24:22,359 Speaker 1: I think the story of twenty twenty three was that 480 00:24:23,160 --> 00:24:26,480 Speaker 1: we were pulling back from a period of evuphoria. And 481 00:24:26,520 --> 00:24:30,520 Speaker 1: if we just contrast what's going on now versus where 482 00:24:30,520 --> 00:24:33,119 Speaker 1: we were two years ago, where the market was fully 483 00:24:33,160 --> 00:24:37,760 Speaker 1: supply constrained and demand was not at all concerned. 484 00:24:37,920 --> 00:24:39,160 Speaker 8: That's not the case now. 485 00:24:39,320 --> 00:24:43,199 Speaker 1: Now we have questions about demand, even so much to 486 00:24:43,240 --> 00:24:47,120 Speaker 1: the point that Tesla acknowledged on the last earnings call 487 00:24:47,520 --> 00:24:49,840 Speaker 1: that there were some macro concerns and it would not 488 00:24:50,000 --> 00:24:53,960 Speaker 1: be producing as much as it could in its Often 489 00:24:54,000 --> 00:24:57,399 Speaker 1: and Berlin facilities simply because of some of these macro questions. 490 00:24:57,440 --> 00:25:01,000 Speaker 1: And so the story going forward is, you know, how 491 00:25:01,000 --> 00:25:04,600 Speaker 1: do we deal with this period of some demand uncertainty 492 00:25:04,880 --> 00:25:06,000 Speaker 1: within the EB market? 493 00:25:07,520 --> 00:25:10,280 Speaker 2: The storyline that we're leading on at Bloomberg is that 494 00:25:10,400 --> 00:25:13,800 Speaker 2: Tesla's lost its crown to BYD. BYD the sort of 495 00:25:13,840 --> 00:25:18,040 Speaker 2: biggest standalone seller of battery electric vehicles, and we knew. 496 00:25:17,840 --> 00:25:18,520 Speaker 4: That was coming. 497 00:25:19,359 --> 00:25:23,400 Speaker 2: Does it matter if Tesla is eclipsed by BYD, which 498 00:25:23,440 --> 00:25:27,960 Speaker 2: is kind of predominantly focused on the domestic Chinese market. 499 00:25:29,600 --> 00:25:33,280 Speaker 1: It doesn't necessarily matter per se in the sense that 500 00:25:33,400 --> 00:25:36,879 Speaker 1: there is room for multiple players. And if we just 501 00:25:36,960 --> 00:25:40,880 Speaker 1: break apart the markets, yes, BYD eclipse Tesla. This year 502 00:25:41,960 --> 00:25:47,320 Speaker 1: within battery electric vehicles, Tesla still BYD Tesla was at 503 00:25:47,640 --> 00:25:50,920 Speaker 1: one point eight million, I believe BYD on battery electrics 504 00:25:51,240 --> 00:25:54,760 Speaker 1: was one point six million something along those lines, with 505 00:25:54,880 --> 00:25:58,680 Speaker 1: the remainder being plug in hybriardy vehicles. If you look 506 00:25:58,680 --> 00:26:01,359 Speaker 1: at it on a regional base, that's where the dynamics 507 00:26:01,400 --> 00:26:04,720 Speaker 1: really vary, because in the US, Tesla is still the 508 00:26:05,040 --> 00:26:06,800 Speaker 1: dominant EV name. 509 00:26:07,840 --> 00:26:09,040 Speaker 8: You know, in Europe. 510 00:26:08,760 --> 00:26:11,639 Speaker 1: Tesla is still a top three or so player in 511 00:26:11,680 --> 00:26:15,640 Speaker 1: the beeB market. China Tesla is still you know, top 512 00:26:15,720 --> 00:26:19,760 Speaker 1: two or three. It's BYD that's really taken the crown. 513 00:26:20,080 --> 00:26:22,800 Speaker 1: And it's China where we saw a lot of bid 514 00:26:22,920 --> 00:26:26,199 Speaker 1: sales accelerate The other story that we saw merging in 515 00:26:26,280 --> 00:26:30,280 Speaker 1: twenty twenty three was the rise of Chinese exports to 516 00:26:30,440 --> 00:26:34,480 Speaker 1: Europe and to other markets. So, yes, there's more competition 517 00:26:34,600 --> 00:26:37,520 Speaker 1: Tesla from BYD, but there is still room for Tesla 518 00:26:37,800 --> 00:26:40,280 Speaker 1: to grow. It's just a question of in the markets 519 00:26:40,280 --> 00:26:42,600 Speaker 1: where Tesla is serving, where is the demand for that? 520 00:26:43,000 --> 00:26:45,360 Speaker 3: Yeah, and spin us then into twenty twenty four, when 521 00:26:45,359 --> 00:26:48,120 Speaker 3: we're thinking of a BYD getting into Hungary and producing there, 522 00:26:48,160 --> 00:26:52,040 Speaker 3: when we're thinking of two very different price points, ultimately 523 00:26:52,600 --> 00:26:55,040 Speaker 3: remain on top for Tesla in terms of profits and 524 00:26:55,080 --> 00:26:58,720 Speaker 3: revenue because they make more expensive cars. Will Tesla ever 525 00:26:58,800 --> 00:27:00,480 Speaker 3: want to go lower to be able to serve and 526 00:27:00,480 --> 00:27:02,639 Speaker 3: get in on that highly competitive state that there is 527 00:27:02,680 --> 00:27:04,680 Speaker 3: in China or should we be staying in its lane? 528 00:27:06,560 --> 00:27:09,800 Speaker 1: Well, that's ultimately the goal for Tesla, right. That was 529 00:27:09,840 --> 00:27:14,800 Speaker 1: something that they outlined at their investor day last March, 530 00:27:14,880 --> 00:27:19,160 Speaker 1: the path to megascale. Right, you know, twenty twenty four, 531 00:27:19,320 --> 00:27:23,080 Speaker 1: from a volume perspective for Tesla, we're at two million units. 532 00:27:23,080 --> 00:27:25,240 Speaker 8: That's below consensus of two point two million. 533 00:27:25,600 --> 00:27:28,440 Speaker 1: So it is some growth, it's low double digit growth 534 00:27:28,520 --> 00:27:30,280 Speaker 1: versus twenty twenty three, but. 535 00:27:30,280 --> 00:27:32,800 Speaker 8: It is below you know the long. 536 00:27:32,600 --> 00:27:35,760 Speaker 1: Term growth curve Tesla has laid out, and that's really 537 00:27:35,800 --> 00:27:37,840 Speaker 1: because there is not much in the way of do 538 00:27:38,000 --> 00:27:41,480 Speaker 1: incremental product for Tesla in twenty twenty four. Yes, their 539 00:27:41,520 --> 00:27:44,280 Speaker 1: cyber truck that we think that's niche, it's really Model 540 00:27:44,280 --> 00:27:48,040 Speaker 1: three and why, which are somewhat dated models. And so 541 00:27:48,240 --> 00:27:51,000 Speaker 1: really the story for Tesla on volume growth going forward 542 00:27:51,080 --> 00:27:53,520 Speaker 1: is going to be modeled to whenever that is released. 543 00:27:53,560 --> 00:27:57,040 Speaker 1: We have that as you know, sometime in twenty twenty five, 544 00:27:57,280 --> 00:27:59,560 Speaker 1: where they really go down to that lower price point. 545 00:28:00,080 --> 00:28:02,560 Speaker 1: Are ways to go to get to that lower price point, 546 00:28:02,840 --> 00:28:04,439 Speaker 1: they have to drive out a lot of cost to 547 00:28:04,480 --> 00:28:04,960 Speaker 1: get there. 548 00:28:05,560 --> 00:28:07,840 Speaker 3: Let's just go back to this cyber truck because that 549 00:28:08,080 --> 00:28:11,000 Speaker 3: was something that I'm sure frustrated you and many an 550 00:28:11,040 --> 00:28:13,679 Speaker 3: analyst investor is they didn't strip out give us the 551 00:28:13,720 --> 00:28:16,760 Speaker 3: intricacies of how many they actually sold. Was it five 552 00:28:16,840 --> 00:28:19,159 Speaker 3: hundred on the low end, was it five thousand on 553 00:28:19,200 --> 00:28:21,639 Speaker 3: the high end? Was where do you think the cyber 554 00:28:21,680 --> 00:28:24,200 Speaker 3: truck is landing? And doesn't really matter if it's just 555 00:28:24,240 --> 00:28:26,439 Speaker 3: getting people in to have a look at the other cars. 556 00:28:28,560 --> 00:28:31,960 Speaker 8: It was probably a small set of volumes. 557 00:28:32,000 --> 00:28:35,119 Speaker 1: We modeled in something like two hundred units. 558 00:28:35,760 --> 00:28:38,680 Speaker 8: You know possible it was below that number. 559 00:28:39,440 --> 00:28:42,720 Speaker 1: Look, I think Tesla has has been clear that there 560 00:28:42,760 --> 00:28:46,240 Speaker 1: are a number of production challenges along the way that 561 00:28:46,360 --> 00:28:49,440 Speaker 1: need to be met with Cybertruck, and so that's why 562 00:28:49,520 --> 00:28:53,680 Speaker 1: to us, yeah, cybertruck is a different model for them, 563 00:28:53,720 --> 00:28:57,440 Speaker 1: and it does help give some model diversification which they've needed. 564 00:28:57,800 --> 00:29:03,480 Speaker 1: That being said, we'd set our expectations accordingly on cyber truck. 565 00:29:03,800 --> 00:29:05,880 Speaker 1: We're assuming that you know, you're not going to get 566 00:29:05,920 --> 00:29:08,680 Speaker 1: more than twenty thousand units in twenty twenty four. 567 00:29:08,720 --> 00:29:11,160 Speaker 8: Because it is such a slow ramp. There are likely 568 00:29:11,240 --> 00:29:12,920 Speaker 8: some questions as well. On demand. 569 00:29:14,000 --> 00:29:16,640 Speaker 1: We think that it will draw on some consumers who 570 00:29:16,680 --> 00:29:18,560 Speaker 1: want more of a lifestyle type vehicle, But if we 571 00:29:18,560 --> 00:29:23,120 Speaker 1: don't see cyber truck really penetrating that core large pickup. 572 00:29:22,760 --> 00:29:26,760 Speaker 8: Market which is used for work purposes and commercial purposes. 573 00:29:27,680 --> 00:29:30,080 Speaker 2: Dan, I want to go back to the demand question 574 00:29:30,320 --> 00:29:32,680 Speaker 2: and zoom out. You can apply it to the legacy 575 00:29:32,680 --> 00:29:35,560 Speaker 2: auto names Ford and GM. You can bring in Rivin 576 00:29:35,680 --> 00:29:39,040 Speaker 2: you want, But there is certainly a question now about 577 00:29:39,880 --> 00:29:43,160 Speaker 2: the wave of first or early adopters being gone and 578 00:29:43,240 --> 00:29:47,160 Speaker 2: how you just go after the everyday household. Tesla has 579 00:29:47,240 --> 00:29:50,560 Speaker 2: used price cuts as its lever the federal tax credit 580 00:29:50,600 --> 00:29:54,040 Speaker 2: in this country is clearly a big factor. How do 581 00:29:54,160 --> 00:29:56,800 Speaker 2: you model demand for this year. 582 00:29:58,960 --> 00:30:04,080 Speaker 1: Volume the EV market will increase even for the legacy 583 00:30:04,200 --> 00:30:09,280 Speaker 1: players where there are questions on demand and where clearly 584 00:30:09,360 --> 00:30:12,720 Speaker 1: they are slowing the pace of volume, there is still 585 00:30:12,920 --> 00:30:18,080 Speaker 1: going to be growth, you know, from a subsidy standpoint. 586 00:30:18,120 --> 00:30:21,000 Speaker 1: In the US, one key step forward is that the 587 00:30:21,040 --> 00:30:23,280 Speaker 1: seventy five hundred dollars credit will now be made on 588 00:30:23,320 --> 00:30:26,440 Speaker 1: a point of sale basis, meaning you get it immediately 589 00:30:26,440 --> 00:30:29,120 Speaker 1: when you purchase the vehicle as opposed to when you're 590 00:30:29,120 --> 00:30:30,600 Speaker 1: filing your taxes. 591 00:30:30,240 --> 00:30:31,560 Speaker 8: So that can help. 592 00:30:31,640 --> 00:30:36,200 Speaker 1: That being said, there are some vehicles losing eligibility, and 593 00:30:36,680 --> 00:30:39,920 Speaker 1: as you note that, there is clearly a question about 594 00:30:40,200 --> 00:30:44,080 Speaker 1: you know, going from the early adopters to the early majority, 595 00:30:44,360 --> 00:30:46,480 Speaker 1: where now you have to deal with the questions of 596 00:30:46,600 --> 00:30:51,200 Speaker 1: range anxiety and charging availability, and so these are all 597 00:30:51,240 --> 00:30:54,800 Speaker 1: things that need to be addressed. So I think that 598 00:30:54,840 --> 00:30:58,720 Speaker 1: there is clearly still path forward for EV volumes to 599 00:30:58,760 --> 00:31:02,560 Speaker 1: be increasing in in twenty twenty four. It's just that 600 00:31:02,640 --> 00:31:05,880 Speaker 1: the pace of growth is slowing. The other piece of this, 601 00:31:06,000 --> 00:31:07,760 Speaker 1: and you alluded to this on the point of the 602 00:31:07,760 --> 00:31:10,200 Speaker 1: price cut. Tous Look can cut its price because it's 603 00:31:10,320 --> 00:31:14,280 Speaker 1: cost structure allows it to do so. For the legacy automakers, 604 00:31:14,560 --> 00:31:17,280 Speaker 1: they've struggled with evs on the cost front, and there's 605 00:31:17,320 --> 00:31:21,480 Speaker 1: only so much that they can cut on price because 606 00:31:21,680 --> 00:31:23,120 Speaker 1: the costs are what they are. 607 00:31:23,400 --> 00:31:25,160 Speaker 8: So they have some work to do on the cost 608 00:31:25,240 --> 00:31:26,040 Speaker 8: side so. 609 00:31:25,920 --> 00:31:29,800 Speaker 1: That they can sell more volumes at a more appropriate price. 610 00:31:29,840 --> 00:31:32,320 Speaker 3: Cort Danley Vee, it's been so good to get you 611 00:31:32,400 --> 00:31:34,600 Speaker 3: on the back of these production numbers today, of course, 612 00:31:34,640 --> 00:31:37,800 Speaker 3: DANLEYB of Barclay's, we thank you so much and sales 613 00:31:37,880 --> 00:31:40,240 Speaker 3: data at that. Meanwhile, the coming up, we're going to 614 00:31:40,280 --> 00:31:43,000 Speaker 3: be talking about Apple facing a ban on imports of 615 00:31:43,040 --> 00:31:45,480 Speaker 3: its watches. You know, it's on ice of the short term, 616 00:31:45,520 --> 00:31:47,400 Speaker 3: but what about the longer term? The conversation is up 617 00:31:47,400 --> 00:31:50,560 Speaker 3: next with James Gagan Technology Litigator over at Alan and. 618 00:31:50,520 --> 00:31:53,920 Speaker 2: Overary and what's we got, Yeah, quick check at Maderna 619 00:31:53,960 --> 00:31:57,960 Speaker 2: that's really spiking, shares up around sixteen percent as it stands, 620 00:31:58,000 --> 00:32:02,040 Speaker 2: trading at their highest levels since late August of twenty 621 00:32:02,080 --> 00:32:06,360 Speaker 2: twenty three, the news being that the stock has been 622 00:32:06,360 --> 00:32:11,040 Speaker 2: given an upgrade to outperform from performing. Oppenheimer the firms, 623 00:32:11,040 --> 00:32:14,280 Speaker 2: saying they expect to see real return to top line 624 00:32:14,320 --> 00:32:17,480 Speaker 2: sales grow Formerderna in twenty twenty five, and they're talking 625 00:32:17,480 --> 00:32:21,160 Speaker 2: about increased visibility on the sale of COVID nineteen vaccine. 626 00:32:21,200 --> 00:32:23,719 Speaker 2: That's a big move of sixteen percent on Maderna in 627 00:32:23,720 --> 00:32:29,760 Speaker 2: this this Bloomberg Technology. 628 00:32:39,320 --> 00:32:41,440 Speaker 3: Let's just check in on shares of Apple because they 629 00:32:41,440 --> 00:32:43,640 Speaker 3: took a hit and so therefore have the big benchmarks. 630 00:32:43,760 --> 00:32:46,520 Speaker 3: It's all after Barclay's cut the tech giant to underweight 631 00:32:46,560 --> 00:32:49,440 Speaker 3: for the first time since twenty nineteen, following expectations of 632 00:32:49,440 --> 00:32:51,880 Speaker 3: what they see as soft demand for its latest iPhone, 633 00:32:52,000 --> 00:32:55,000 Speaker 3: saying they expect quote a reversion after a year when 634 00:32:55,080 --> 00:32:58,320 Speaker 3: most quarters were missed and the stock out performed nevertheless 635 00:32:58,520 --> 00:33:01,600 Speaker 3: joining us now Bloomberg's. And that's the point, isn't it. 636 00:33:01,640 --> 00:33:04,160 Speaker 3: We just think back to the February earnings that they 637 00:33:04,240 --> 00:33:07,920 Speaker 3: posted twenty twenty three, and they missed the streets expectations, 638 00:33:07,960 --> 00:33:10,800 Speaker 3: but still shares rallied almost fifty percent on the twenty 639 00:33:10,840 --> 00:33:14,440 Speaker 3: twenty three So why does Barklays now think it can't 640 00:33:14,480 --> 00:33:15,720 Speaker 3: manage to pull that out of the bag? 641 00:33:16,960 --> 00:33:19,760 Speaker 11: Yeah, Barkleys has seen some holes in the Apple story. 642 00:33:19,920 --> 00:33:23,040 Speaker 11: I mean, certainly you've had four quarters plus in a 643 00:33:23,120 --> 00:33:27,480 Speaker 11: row of holiday declines. The earnings report that's coming at 644 00:33:27,480 --> 00:33:30,520 Speaker 11: the end of January early February will indicate that Q 645 00:33:30,680 --> 00:33:33,280 Speaker 11: one was either in line, maybe a little bit more 646 00:33:33,280 --> 00:33:35,720 Speaker 11: a little bit less in the prior quarter. You have 647 00:33:35,960 --> 00:33:39,600 Speaker 11: these patent situations which are likely to crop up in 648 00:33:39,680 --> 00:33:43,240 Speaker 11: higher frequency. Now, given the success that Massimo has had 649 00:33:43,320 --> 00:33:46,640 Speaker 11: over the past few months, you're not seeing anything in 650 00:33:46,680 --> 00:33:50,120 Speaker 11: the twenty twenty four product pipeline that is in the 651 00:33:50,160 --> 00:33:53,840 Speaker 11: short term going to juice sales to any considerable degree. 652 00:33:54,200 --> 00:33:58,480 Speaker 11: So they're sensing some fragility there in the Apples story, 653 00:33:58,480 --> 00:34:01,880 Speaker 11: and that's what sent the shares down pretty considerably. You know, 654 00:34:01,920 --> 00:34:05,880 Speaker 11: this Tuesday morning after New Year's Day, there's certainly going 655 00:34:05,920 --> 00:34:10,200 Speaker 11: to be new iPhones. I'm not expecting anything significant the 656 00:34:10,239 --> 00:34:13,000 Speaker 11: bigger picture. There will be some camera improvements on the 657 00:34:13,040 --> 00:34:16,680 Speaker 11: smaller Pro model, but some minor size and preases of 658 00:34:16,680 --> 00:34:20,000 Speaker 11: the displays on both of the hind iPhones. You're going 659 00:34:20,040 --> 00:34:24,200 Speaker 11: to get the biggest iPad revamp in five six years. 660 00:34:24,640 --> 00:34:27,120 Speaker 11: You're also getting the Vision Pro that's going to be 661 00:34:27,120 --> 00:34:30,239 Speaker 11: coming within the next thirty days a month or so. 662 00:34:31,040 --> 00:34:33,359 Speaker 11: But certainly I'm not expecting the vision pros to drive 663 00:34:33,400 --> 00:34:36,520 Speaker 11: a lot of revenue, certainly this year or even. 664 00:34:36,320 --> 00:34:37,400 Speaker 4: In twenty twenty five. 665 00:34:38,040 --> 00:34:40,920 Speaker 11: The iPad should do pretty well for that segment, but 666 00:34:41,000 --> 00:34:44,560 Speaker 11: that has been underperforming the last couple of years or so, 667 00:34:45,360 --> 00:34:48,799 Speaker 11: and the iPhone I would expect to be stagnants. Not 668 00:34:48,840 --> 00:34:52,719 Speaker 11: necessarily in hypergrowth. It is as it has been, you know, 669 00:34:52,760 --> 00:34:53,640 Speaker 11: in prior years. 670 00:34:53,680 --> 00:34:55,440 Speaker 8: But certainly you know. 671 00:34:55,440 --> 00:34:57,680 Speaker 11: It is a risk to bet against Apple because they 672 00:34:57,719 --> 00:35:01,239 Speaker 11: always do seem to find a way to come out 673 00:35:01,239 --> 00:35:03,280 Speaker 11: with numbers that could surprise the street. 674 00:35:04,239 --> 00:35:06,720 Speaker 2: Yeah, the share performance of twenty twenty three would speak 675 00:35:06,719 --> 00:35:09,040 Speaker 2: to that argument. Bloombogs Mark German, thank you very much 676 00:35:09,080 --> 00:35:11,960 Speaker 2: for the latest on the stock. The other story is 677 00:35:11,960 --> 00:35:14,719 Speaker 2: that Apple's facing a ban on imports of its watches. 678 00:35:14,840 --> 00:35:18,400 Speaker 2: The company is now seeking alternate paths to overcome a 679 00:35:18,480 --> 00:35:21,960 Speaker 2: patent infringement loss that forced its most popular Apple Watch 680 00:35:22,000 --> 00:35:25,200 Speaker 2: models off shelves over the holidays. Here to keep the 681 00:35:25,239 --> 00:35:29,520 Speaker 2: conversation going is James Gagan, technology litigator at Alan and Ovary, 682 00:35:29,560 --> 00:35:34,880 Speaker 2: who's practice focuses on high tech intellectual property, international trade competition. 683 00:35:35,640 --> 00:35:37,959 Speaker 2: There are some avenues they can go down on a fix. 684 00:35:38,000 --> 00:35:41,560 Speaker 2: There are some deadlines coming up, but in the first instance, 685 00:35:41,600 --> 00:35:45,000 Speaker 2: it was a wild holiday period where Apple seemed to 686 00:35:45,000 --> 00:35:48,759 Speaker 2: rely on procedural wrangling to push back as best they 687 00:35:48,760 --> 00:35:52,479 Speaker 2: could against that original ITC decision, which was two months ago. 688 00:35:54,480 --> 00:35:56,960 Speaker 12: Yeah, that's right, ed, and thanks very much for having me. 689 00:35:57,480 --> 00:35:59,799 Speaker 12: You know, as someone who practices in the International Trade 690 00:35:59,800 --> 00:36:02,160 Speaker 12: Comme quite a bit, this has been an interesting case 691 00:36:02,840 --> 00:36:04,920 Speaker 12: so follow I think what it shows is that when 692 00:36:04,960 --> 00:36:08,160 Speaker 12: companies like Apple are facing a potential import ban in 693 00:36:08,200 --> 00:36:11,880 Speaker 12: the International Trade Commission, they can actually consider during the 694 00:36:11,920 --> 00:36:15,200 Speaker 12: lawsuit making changes to their product designs and then getting 695 00:36:15,239 --> 00:36:19,320 Speaker 12: authorization to sell those redesigned products, even if the Commission 696 00:36:19,320 --> 00:36:22,920 Speaker 12: would find infringement and order a ban on the current models. 697 00:36:22,920 --> 00:36:24,880 Speaker 12: And this is a common plan B that we see 698 00:36:25,400 --> 00:36:28,400 Speaker 12: often in these cases, at least based on my review 699 00:36:28,400 --> 00:36:31,440 Speaker 12: of the Commission's public decisions, that doesn't appear to have 700 00:36:31,440 --> 00:36:34,319 Speaker 12: happened here. Apple didn't have an authorized backup design it 701 00:36:34,360 --> 00:36:36,920 Speaker 12: could switch to, and so when the Commission decided to 702 00:36:37,000 --> 00:36:39,759 Speaker 12: order that ban on the Series nine and Ultra two 703 00:36:39,840 --> 00:36:43,120 Speaker 12: watches at the end of October, you've seen Apple scrambling 704 00:36:43,160 --> 00:36:46,240 Speaker 12: to implement these emergency strategies over the last several weeks, 705 00:36:46,680 --> 00:36:48,560 Speaker 12: and so I think it shows that when companies don't 706 00:36:48,600 --> 00:36:51,200 Speaker 12: litigate this plan B and they don't have a fallback 707 00:36:51,239 --> 00:36:53,880 Speaker 12: position in these cases, then they're exposing the business to 708 00:36:53,960 --> 00:36:56,840 Speaker 12: lost sales, and I think it limits their options going. 709 00:36:56,600 --> 00:36:59,880 Speaker 3: Forward, and not only just to lost sales, but also 710 00:37:00,000 --> 00:37:03,240 Speaker 3: so probably a mental impact on a consumer that suddenly 711 00:37:03,320 --> 00:37:07,000 Speaker 3: questions that the winning formula and technology of an Apple. 712 00:37:07,120 --> 00:37:10,239 Speaker 3: To that end, if Apple does want certainty in the 713 00:37:10,280 --> 00:37:12,280 Speaker 3: here and the now, what do they need to pursue 714 00:37:12,400 --> 00:37:14,480 Speaker 3: How do we see this being ironed out? Is it 715 00:37:14,600 --> 00:37:16,840 Speaker 3: just about settlement or in agreement with Massimo? 716 00:37:18,719 --> 00:37:21,760 Speaker 12: Well, it could be settlement that would bring certainty, you Caroline. 717 00:37:21,800 --> 00:37:24,240 Speaker 12: But if companies like Apple that are in this position 718 00:37:24,360 --> 00:37:27,920 Speaker 12: want certainty, then they need to implement hardware or software 719 00:37:28,000 --> 00:37:30,960 Speaker 12: changes to the products and then prove that those changes 720 00:37:31,040 --> 00:37:34,120 Speaker 12: do not infringe the patents, and then obtain authorization to 721 00:37:34,200 --> 00:37:37,640 Speaker 12: import and sell these new product versions. And so according 722 00:37:37,640 --> 00:37:40,480 Speaker 12: to Apple, it has already started this process. It's already 723 00:37:40,520 --> 00:37:43,880 Speaker 12: presented redesigns to US customs, and it's said that it 724 00:37:43,960 --> 00:37:46,120 Speaker 12: expects the decision. I think by the end of next week. 725 00:37:46,640 --> 00:37:49,200 Speaker 12: It's confidential. We don't know what that redesign will look like. 726 00:37:49,600 --> 00:37:52,000 Speaker 12: But when companies go this route and they need a 727 00:37:52,080 --> 00:37:55,560 Speaker 12: quick approval to get products back on the market, generally 728 00:37:55,600 --> 00:37:58,480 Speaker 12: they'd want to present customs with a very simple hardware 729 00:37:58,560 --> 00:38:01,759 Speaker 12: or software change that they've already implemented and that there's 730 00:38:01,800 --> 00:38:04,960 Speaker 12: no dispute, doesn't infringe the patterns, and often this means 731 00:38:05,120 --> 00:38:08,600 Speaker 12: removing the infringing future completely from the product. So it 732 00:38:08,680 --> 00:38:12,160 Speaker 12: is possible that Apple could get approval to sell these 733 00:38:12,200 --> 00:38:14,560 Speaker 12: watches again, but they may not have the same features 734 00:38:14,560 --> 00:38:17,440 Speaker 12: that they do right now, including one oxygen monitoring. 735 00:38:18,200 --> 00:38:21,920 Speaker 2: That is the fascinating part for me that we reported 736 00:38:22,040 --> 00:38:26,080 Speaker 2: on December twenty eighth that Apple sees software as being 737 00:38:26,120 --> 00:38:29,280 Speaker 2: the long term fix, but it relates to a specific 738 00:38:29,360 --> 00:38:31,920 Speaker 2: functionality on a hot piece. 739 00:38:31,680 --> 00:38:34,280 Speaker 4: Of hardware, a wearable. 740 00:38:34,239 --> 00:38:36,280 Speaker 2: Who are the people on the other side of the table, 741 00:38:36,400 --> 00:38:41,279 Speaker 2: customs who are reviewing the compromise and then deciding if 742 00:38:41,280 --> 00:38:44,200 Speaker 2: it works or not because it is a software fix 743 00:38:44,800 --> 00:38:47,440 Speaker 2: to hardware functionality. 744 00:38:47,080 --> 00:38:47,560 Speaker 4: That's right. 745 00:38:47,640 --> 00:38:51,480 Speaker 12: So Apple is asking for approval from a specific branch 746 00:38:51,520 --> 00:38:55,680 Speaker 12: of customs that their entire job is to administer these 747 00:38:55,719 --> 00:38:59,440 Speaker 12: exclusion orders from the Commission, So they're very experienced in 748 00:38:59,520 --> 00:39:02,880 Speaker 12: assessing these types of redesigns. But it is true that 749 00:39:02,920 --> 00:39:06,000 Speaker 12: if Apple is proposing some sort of complicated software fix, 750 00:39:06,239 --> 00:39:08,600 Speaker 12: we don't know, but if they are, then it would 751 00:39:08,600 --> 00:39:12,400 Speaker 12: be challenging to get a fix like that through customs 752 00:39:12,400 --> 00:39:13,840 Speaker 12: in the time they have a lot of and so 753 00:39:14,880 --> 00:39:18,240 Speaker 12: you know, for example, Apple may want to present the cleanest, 754 00:39:18,360 --> 00:39:20,880 Speaker 12: most obvious fix that it can to get these products 755 00:39:20,960 --> 00:39:23,120 Speaker 12: back on the market. We know that the Apple Watch 756 00:39:23,160 --> 00:39:25,800 Speaker 12: series SC can be sold because it's not equipped to 757 00:39:25,840 --> 00:39:28,400 Speaker 12: measure blood oxygen levels, and so Apple may be presenting 758 00:39:28,440 --> 00:39:29,880 Speaker 12: a solution with us such as that. 759 00:39:30,360 --> 00:39:32,520 Speaker 3: James Gagan, we thank you for pushing us forward on 760 00:39:32,560 --> 00:39:35,400 Speaker 3: this technology Litigator, someone who knows the ITC well, We 761 00:39:35,520 --> 00:39:37,680 Speaker 3: really appreciate it. Verrett Allen and Ovary. 762 00:39:45,840 --> 00:39:49,400 Speaker 6: There are now other products out there that we can 763 00:39:49,520 --> 00:39:52,759 Speaker 6: use to gain exposure to bitcoin in this moment, and 764 00:39:52,880 --> 00:39:55,920 Speaker 6: it's just a moment of uncertainty between now we think 765 00:39:56,560 --> 00:40:01,480 Speaker 6: and January January eighth to tenth, somewhere in that range perhaps, 766 00:40:02,440 --> 00:40:04,680 Speaker 6: but we're out of an abundance of caution. 767 00:40:04,840 --> 00:40:08,520 Speaker 3: Didn't want to take any risk that abundance of caution 768 00:40:08,880 --> 00:40:11,640 Speaker 3: that Kathy would have. ARC Investor talks about is why 769 00:40:11,680 --> 00:40:16,160 Speaker 3: they exited Grayscale Bitcoin Trust but actually plow their money 770 00:40:16,200 --> 00:40:20,160 Speaker 3: from our next generation ETF instead into pro Shares Bitcoin 771 00:40:20,200 --> 00:40:23,120 Speaker 3: Strategy ETF. All of this, of course on the question 772 00:40:23,239 --> 00:40:25,960 Speaker 3: of whether or not gray scale Bitcoin Trust will indeed 773 00:40:26,440 --> 00:40:29,799 Speaker 3: be converted into an ETF. And all of this, of course, 774 00:40:29,840 --> 00:40:32,680 Speaker 3: the anticipation of an approval of a spot bitcoin ETF 775 00:40:33,160 --> 00:40:36,560 Speaker 3: investment opportunity has been driving the price of bitcoin up 776 00:40:36,560 --> 00:40:39,960 Speaker 3: more broadly past forty five thousand. Uti Yang is here 777 00:40:39,960 --> 00:40:42,600 Speaker 3: to break it all down. So there's the intricacies of 778 00:40:42,680 --> 00:40:47,080 Speaker 3: who and how and when, but ultimately any spot bitcoin 779 00:40:47,160 --> 00:40:50,120 Speaker 3: ETF is going to be good for holders of the 780 00:40:50,160 --> 00:40:52,400 Speaker 3: bitcoin of bitcoin in and of itself. 781 00:40:53,239 --> 00:40:56,200 Speaker 13: Yeah, so we're looking at a big wig coming ahead 782 00:40:56,239 --> 00:41:00,560 Speaker 13: for the bigcoin industry. There's wide expectation there CC will 783 00:41:00,600 --> 00:41:03,320 Speaker 13: make a decision finally on whether they will approve a 784 00:41:03,480 --> 00:41:09,520 Speaker 13: spot bcoin ETF. So we saw bicoin really rallied in 785 00:41:09,560 --> 00:41:14,040 Speaker 13: the past year based on the anti anticipation of this news, 786 00:41:14,200 --> 00:41:18,600 Speaker 13: which analysts thinks will drive institutional funding into bigc one. 787 00:41:19,160 --> 00:41:22,479 Speaker 13: But still there's uncertainty and approval is not one hundred 788 00:41:22,560 --> 00:41:24,240 Speaker 13: percent guaranteed. 789 00:41:23,920 --> 00:41:26,759 Speaker 3: And many embracing paths for a buy the room and 790 00:41:26,840 --> 00:41:28,839 Speaker 3: sell the news kind of fact. Maybe we even see 791 00:41:28,840 --> 00:41:31,200 Speaker 3: a bit of a dip as and when it is infanty, 792 00:41:31,320 --> 00:41:33,719 Speaker 3: it does get approved, But do you know any of 793 00:41:33,760 --> 00:41:36,839 Speaker 3: the details is to actually what happens. Say January eighth 794 00:41:36,840 --> 00:41:40,280 Speaker 3: to tenth, the SEC says yes, will immediately the ETF 795 00:41:40,360 --> 00:41:43,600 Speaker 3: be there for the tradings that take days or weeks 796 00:41:43,640 --> 00:41:45,000 Speaker 3: or months to be executed on. 797 00:41:45,360 --> 00:41:49,440 Speaker 13: We don't know yet if the SEC does approve a 798 00:41:49,480 --> 00:41:53,280 Speaker 13: big one ETF fund. It seems that all the issuers 799 00:41:53,320 --> 00:41:56,799 Speaker 13: and operators that are associated with a big one et 800 00:41:56,960 --> 00:42:00,239 Speaker 13: F are have been preparing to get ready to launch 801 00:42:00,360 --> 00:42:04,680 Speaker 13: and to trade the shares. Coinbase, for example, which is 802 00:42:04,719 --> 00:42:08,000 Speaker 13: the custodian provider for a lot of these pecoin ETF 803 00:42:08,040 --> 00:42:11,920 Speaker 13: issuers told us last week that they're operationalready. Once they 804 00:42:11,920 --> 00:42:13,960 Speaker 13: get the green light, they are able to handle the 805 00:42:14,080 --> 00:42:15,080 Speaker 13: volume and the trades. 806 00:42:15,800 --> 00:42:16,439 Speaker 3: So we'll see. 807 00:42:16,680 --> 00:42:20,080 Speaker 13: It seems like everybody is preparing as if they will 808 00:42:20,120 --> 00:42:23,040 Speaker 13: be able to get approval. But then we'll get to 809 00:42:23,080 --> 00:42:26,560 Speaker 13: see how much trading or how much buying eventually it 810 00:42:26,560 --> 00:42:28,160 Speaker 13: will contribute to Bitcoin. 811 00:42:28,719 --> 00:42:30,880 Speaker 3: And just as I know, my husband is a senior 812 00:42:31,160 --> 00:42:34,000 Speaker 3: manager over there at Coinbase. But meanwhile, Hiang, we thank 813 00:42:34,040 --> 00:42:36,040 Speaker 3: you so much for all the details. We brace ourselves. 814 00:42:36,040 --> 00:42:38,000 Speaker 3: That's going to be busy for the next couple of 815 00:42:38,080 --> 00:42:40,600 Speaker 3: days for her and indeed anyone who's out there in 816 00:42:40,640 --> 00:42:43,359 Speaker 3: the world of crypto and interestingly and of course now 817 00:42:43,400 --> 00:42:44,960 Speaker 3: that does it for our first edition of lue Meg 818 00:42:44,960 --> 00:42:46,160 Speaker 3: Technology twenty twenty four. 819 00:42:46,880 --> 00:42:49,080 Speaker 2: Yeah, one day into the new year. I'm not going 820 00:42:49,120 --> 00:42:51,400 Speaker 2: to say what the story of the year is because 821 00:42:51,440 --> 00:42:53,560 Speaker 2: after twenty twenty three you just wouldn't. 822 00:42:53,160 --> 00:42:55,200 Speaker 4: Take that risk. Recap on the podcast. 823 00:42:55,239 --> 00:42:57,640 Speaker 2: Thank you to listening on apples, Spotify and on the 824 00:42:57,640 --> 00:42:59,880 Speaker 2: Bloomberg platforms from New York and SF. 825 00:43:00,280 --> 00:43:01,600 Speaker 4: This is Bloomberg Technology.