WEBVTT - Apple's Downgrade and Tesla's Deliveries 0:00:01.720 --> 0:00:05.360 From Mahard where Innovation of Money and Power colle in 0:00:05.480 --> 0:00:07.000 Silicon Valley, NBN. 0:00:07.320 --> 0:00:11.360 This is Bloomberg Technology with Caroline Hyde and Ed Ludlove. 0:00:24.720 --> 0:00:27.920 I'm Caroline Hyder Bloomberg's World headquarters in New York, and 0:00:28.000 --> 0:00:29.480 I'm Ed Lovelow in San Francisco. 0:00:29.560 --> 0:00:32.440 This is Bloomberg Technology Happy twenty twenty four. 0:00:32.760 --> 0:00:34.879 Yeah, a brand new year, and coming up on our 0:00:34.920 --> 0:00:38.760 first program of the year, Full market coverage ahead, US 0:00:38.840 --> 0:00:41.599 stocks and bonds. Look, they kickstart the day in. 0:00:41.560 --> 0:00:44.519 The red and we'll look at the movers, weighing on 0:00:44.560 --> 0:00:48.239 the benchmarks as Apple drops amid a Barclay's downgrade on 0:00:48.360 --> 0:00:50.840 calling iPhone demand details ahead, plus. 0:00:50.600 --> 0:00:52.680 The latest read on the health of the EV market. 0:00:52.720 --> 0:00:56.200 That's as Tesla falls behind China's EYD in terms of production. 0:00:56.640 --> 0:00:59.040 That and so much more coming up on the show. 0:00:59.080 --> 0:01:01.360 But first it's check in on the markets, because when 0:01:01.400 --> 0:01:02.960 we know that we've had the push the pull of 0:01:02.960 --> 0:01:04.920 the Apple and the Tesla with of course some of 0:01:04.959 --> 0:01:08.080 those sales maybe up to expectations, but losing when it 0:01:08.080 --> 0:01:10.240 comes to a key Chinese competitor. But and now's that 0:01:10.280 --> 0:01:12.440 currently off by one and quarter percent. Two year yields 0:01:12.480 --> 0:01:14.880 sell off. This is a global bond market sell off. 0:01:14.880 --> 0:01:17.040 We've seen it in the UK over in Europe in particular. 0:01:17.360 --> 0:01:19.560 And remember we've got a lot of corporate issuants coming through. 0:01:19.600 --> 0:01:23.360 Some slight supply side issues probably at play here a 0:01:23.360 --> 0:01:25.800 little bit with the boring costs Bloomberg dollar indext that 0:01:25.959 --> 0:01:28.640 rises on higher. Have we called it right that we're 0:01:28.640 --> 0:01:31.160 going to see as many rate cuts in twenty twenty 0:01:31.160 --> 0:01:34.360 four as the market currently anticipates. Market just recalibrating that 0:01:34.360 --> 0:01:36.080 this morning. Move on, have a look at what's happening 0:01:36.080 --> 0:01:38.200 in the world of crypto, because as the dollar strengthens, 0:01:38.240 --> 0:01:40.600 it's interesting the bitcoin does too. We are up four 0:01:40.640 --> 0:01:43.760 tens percent for bitcoin versus us or actually eclipsing that 0:01:43.920 --> 0:01:46.720 forty five thousand dollars hand or are all important as 0:01:46.760 --> 0:01:49.600 we watch out for that ETF where the SEC approves 0:01:49.680 --> 0:01:50.920 the spot bitcoin ETF. 0:01:51.920 --> 0:01:55.360 Yeah, and the logic follows understandably that most crypto related 0:01:55.440 --> 0:01:56.000 stocks in. 0:01:55.920 --> 0:01:58.040 The equities markets are also higher. 0:01:58.080 --> 0:02:00.640 Some of the familiar names you see high single digit 0:02:01.120 --> 0:02:04.560 gains in the green. One exception to that rule is Coinbase, 0:02:04.680 --> 0:02:07.760 softer by four point four percent. Happen even lower, I 0:02:07.800 --> 0:02:10.280 guess look at the performance of that stock in twenty 0:02:10.280 --> 0:02:12.960 twenty three, and then look at the run up that 0:02:13.000 --> 0:02:15.440 it had from the end of October through to the 0:02:15.520 --> 0:02:19.520 year end. Maybe there is some profit taking or you know, 0:02:19.760 --> 0:02:22.320 rs I think was eighty going into the pre market 0:02:22.320 --> 0:02:24.919 this morning. There's something going on there. We're not entirely 0:02:24.919 --> 0:02:28.239 sure what it is. The biggest single story and downward 0:02:28.240 --> 0:02:32.000 pressure on the market more broadly is Apple. Barkley's downgrading 0:02:32.240 --> 0:02:35.280 to underweight, a new price target slightly lower one hundred 0:02:35.280 --> 0:02:38.320 and sixty dollars per share. They basically said, we're looking 0:02:38.360 --> 0:02:41.200 at the volumes and mix for the iPhone fifteen, we're 0:02:41.200 --> 0:02:43.640 not convinced. They're also saying that if we get an 0:02:43.680 --> 0:02:47.919 iPhone sixteen, we don't see the technological upgrades in that 0:02:47.960 --> 0:02:51.280 generation to move this stock high. Remember, Apple had multiple 0:02:51.320 --> 0:02:54.520 quarters in twenty twenty three where expectations were missed, but 0:02:54.560 --> 0:02:57.640 the stock continued to run up. That's an interesting equation 0:02:57.760 --> 0:03:00.160 going into it, and it's the biggest points drag as 0:03:00.160 --> 0:03:01.799 it stands on both the NAS that one hundred and 0:03:01.880 --> 0:03:04.040 the S and P five hundred this Tuesday morning, and 0:03:04.080 --> 0:03:04.600 look when. 0:03:04.440 --> 0:03:06.720 It's just shy of two point nine trillion dollar market 0:03:06.720 --> 0:03:10.320 cap the odd percentage point does have a huge impact 0:03:10.520 --> 0:03:12.760 on the overall SMP. Let's just talk about all of 0:03:12.800 --> 0:03:15.880 this with Iako Yoshioka put Poto, manager over at Wealth 0:03:15.919 --> 0:03:18.720 Enhancement Group. Is so good to kick off twenty twenty 0:03:18.720 --> 0:03:20.639 four with you, Iaco and just talk to us a 0:03:20.680 --> 0:03:23.520 little bit about some of the impact of these Magnificent seven. 0:03:23.560 --> 0:03:26.440 The impact that Apple had had is fifty percent run 0:03:26.440 --> 0:03:28.360 off in twenty twenty three, and then on the day 0:03:28.680 --> 0:03:30.720 of course, people starting to think that they can really 0:03:31.000 --> 0:03:33.360 continue to outperform. That seems to be questioned. 0:03:34.680 --> 0:03:38.200 Hi Caroline, Happy new year to you. Yes, you know, 0:03:38.320 --> 0:03:42.760 with Apple, it's probably our least favorite among the Magnificent seven. 0:03:43.480 --> 0:03:47.080 You know, tech overall without fifty six percent as a 0:03:47.120 --> 0:03:49.280 sector within the F and P five hundred and twenty 0:03:49.320 --> 0:03:52.240 twenty three. So starting off twenty twenty four with a 0:03:52.280 --> 0:03:56.240 little bit of a breather, not a big surprise here. 0:03:56.360 --> 0:03:59.360 And then with Apple, you know, as Barclay's mentioned in 0:03:59.400 --> 0:04:03.000 their down you know, the slowing of their overall hardware 0:04:03.080 --> 0:04:06.520 sales is going to be a problem. And you know, 0:04:06.600 --> 0:04:09.160 the one thing that keeps the stock up with all 0:04:09.200 --> 0:04:12.160 the buybacks, but you know, when the multiple is closer 0:04:12.280 --> 0:04:15.520 to thirty times. It's just less attractive sort of on 0:04:15.560 --> 0:04:17.479 a you know, going forward basis. 0:04:17.480 --> 0:04:22.520 Here, how much does the reaction in Apple signify a 0:04:22.600 --> 0:04:26.640 broader concern that all of the fantastic growth inequities and 0:04:26.680 --> 0:04:29.200 the tech sect we saw in twenty twenty three it's 0:04:29.279 --> 0:04:32.479 not going to carry through to twenty twenty four. 0:04:32.760 --> 0:04:36.320 Hi, ed, Yes, you know, reversals tend to happen in January. 0:04:36.360 --> 0:04:38.720 You know, we all love to hear about the dogs 0:04:38.720 --> 0:04:41.280 of the Dow and how they tend to perform better 0:04:41.480 --> 0:04:45.320 in January, and so, you know, we do see a 0:04:45.320 --> 0:04:49.280 little bit of profit taking clearly going on today in 0:04:49.360 --> 0:04:52.480 many of these Magnificent seven names. You know, we like 0:04:52.640 --> 0:04:55.560 technology from a long term perspective. I think a lot 0:04:55.600 --> 0:04:58.000 of these names have a lot of growth in them 0:04:58.120 --> 0:05:01.359 over the long term. However, you know, in the short term, 0:05:01.480 --> 0:05:04.640 you know, profit taking happens. It's good to lock in 0:05:04.680 --> 0:05:06.880 some of those great returns that we saw in twenty 0:05:06.920 --> 0:05:10.520 twenty three and pay those taxes in twenty twenty five. 0:05:11.520 --> 0:05:14.280 In order to realize some of those returns last year, 0:05:14.680 --> 0:05:19.080 you needed to buy seven names, the Magnificent Seven. How 0:05:19.080 --> 0:05:21.600 will that be different in twenty twenty four, there were 0:05:21.600 --> 0:05:23.920 so many unique stories within those seven. You know, in 0:05:24.000 --> 0:05:28.000 Video was a really clear AI story on the compute side. 0:05:28.560 --> 0:05:31.000 Can it just continue on or do you have to 0:05:31.000 --> 0:05:34.360 go very specific? Forget the bundle of seven. The magnificent 0:05:34.400 --> 0:05:35.800 one is when you've got to go down. 0:05:37.160 --> 0:05:41.159 Well, in Video was definitely a leader within that magnificent seven, 0:05:41.360 --> 0:05:44.360 up over two hundred and thirty nine percent. I believe 0:05:44.400 --> 0:05:48.520 in twenty twenty three, you know, will that repeat not likely? 0:05:49.279 --> 0:05:51.560 And we have to remember that in twenty twenty two, 0:05:51.760 --> 0:05:56.080 in video was down over fifty percent, and so that 0:05:56.320 --> 0:05:58.839 you know, great growth that we saw in twenty twenty 0:05:58.880 --> 0:06:01.680 three was after significant decline. 0:06:02.360 --> 0:06:02.560 You know. 0:06:02.680 --> 0:06:05.920 Longer term, we continue to like Nvidia and you know 0:06:06.000 --> 0:06:08.719 what they are doing. They continue to grow their total 0:06:08.720 --> 0:06:12.600 addressable market with you know, starting with gaming, leading into 0:06:12.640 --> 0:06:15.719 machine learning and then going on to the data center 0:06:16.279 --> 0:06:18.719 and AI, and so we continue to like that. We 0:06:18.800 --> 0:06:20.480 just don't think that it's going to have the type 0:06:20.480 --> 0:06:24.400 of returns that we experience in twenty twenty three. And 0:06:24.480 --> 0:06:28.000 diversification really wasn't your friend in twenty twenty three. But 0:06:28.279 --> 0:06:30.839 I think going into twenty twenty four, we believe that 0:06:31.000 --> 0:06:33.960 a broadening of the overall market is what's going to 0:06:34.000 --> 0:06:35.080 benefit investors. 0:06:35.640 --> 0:06:38.240 Ah, So talk about that broadening, IACO. Do you go 0:06:38.360 --> 0:06:41.560 broader within the US, do you go for smaller market 0:06:41.560 --> 0:06:43.760 capitalizations or do you go global? 0:06:45.080 --> 0:06:45.240 Yeah? 0:06:45.320 --> 0:06:47.600 I think you go all of it. You know, we 0:06:47.640 --> 0:06:50.640 saw in at the end of twenty twenty three small 0:06:50.680 --> 0:06:55.559 caps had a significant comeback in November and December, having 0:06:55.640 --> 0:06:57.840 you know, I think December small caps are up over 0:06:57.880 --> 0:07:01.560 twelve percent, and so you know how having that diversification 0:07:01.920 --> 0:07:04.640 really helps out. And then you know, I know we 0:07:04.680 --> 0:07:07.640 talked about the dollar sort of rebounding at least recently, 0:07:08.040 --> 0:07:11.880 but you know, the dollar weakness does help out international 0:07:11.920 --> 0:07:15.400 and emerging market stocks. So we expect some of that 0:07:15.440 --> 0:07:19.880 broadening to benefit overall investors, especially as interest rates you know, 0:07:19.960 --> 0:07:22.320 come down, or at least if that's the expectation. 0:07:23.680 --> 0:07:27.040 So you said, how perhaps Apple was you know, the 0:07:27.120 --> 0:07:31.760 least favored among some of those key names. Which one 0:07:31.800 --> 0:07:34.320 is your star forma? Which name do you have to 0:07:34.360 --> 0:07:35.800 hold onto with both hands? 0:07:36.760 --> 0:07:40.640 You know, we really like Microsoft. I think here it's 0:07:40.680 --> 0:07:45.320 a broad again, diversified name. They've got so many areas 0:07:45.320 --> 0:07:48.920 of growth, they continue to grow within cloud. They do 0:07:49.000 --> 0:07:54.240 have the partnership with open Ai in regards to artificial intelligence, 0:07:54.600 --> 0:07:57.680 and so we like all of that. They continue to grow, 0:07:58.600 --> 0:08:01.880 you know, outlook in Microsoft three sixty they have co 0:08:02.160 --> 0:08:06.640 Pilot which launched in November, which will introduce more AI 0:08:07.400 --> 0:08:11.760 capabilities across all of the Microsoft platform, and so we 0:08:11.800 --> 0:08:14.000 continue to like Microsoft over the long term. 0:08:15.120 --> 0:08:17.760 A Yaka Yo Shoka of WELC and Hansman Group. Just 0:08:17.800 --> 0:08:20.120 a terrific way to kick off what I'm sure is 0:08:20.120 --> 0:08:22.360 going to be a ginormous year for the Magnificent seven 0:08:22.440 --> 0:08:32.720 or otherwise, Thank you very much. Turning to the ev 0:08:32.880 --> 0:08:36.760 Or auto makers, Tesla topping Q for delivery estimates, Rivian 0:08:36.880 --> 0:08:40.000 falling short, beating on production. Will start with Tesla with 0:08:40.000 --> 0:08:43.480 our Global Auto's za Or editor Craig Tude's out of London. 0:08:43.800 --> 0:08:46.160 So Tesla does four hundred and eighty four thy five 0:08:46.240 --> 0:08:48.480 hundred and seven EV's in the final three months of 0:08:48.520 --> 0:08:52.280 the year. It beats estimates, It beats the target of 0:08:52.320 --> 0:08:55.080 one point eight million vehicles for the year. But the 0:08:55.120 --> 0:08:58.000 other storyline is that they lose their crown as the 0:08:58.040 --> 0:08:59.439 world's biggest seller of EV's. 0:09:00.640 --> 0:09:03.080 Yeah, that's right, and it wasn't particularly close. In the 0:09:03.080 --> 0:09:07.480 fourth quarter, BYD outsold Tesla by about forty two thousand evs. 0:09:08.240 --> 0:09:10.920 So this was a trend that we really could see 0:09:10.960 --> 0:09:14.040 coming just looking at you know how BYD was trending, 0:09:14.080 --> 0:09:18.280 particularly in China. They really dominate to that market and 0:09:18.360 --> 0:09:21.880 have done so in sort of dramatic fashion very quickly. 0:09:22.280 --> 0:09:24.240 Just a few years ago. You know, this was a 0:09:24.280 --> 0:09:28.520 company that decided to make a full transition to only 0:09:28.880 --> 0:09:31.679 battery electric and plug in hybrid sales for their lineup 0:09:32.080 --> 0:09:36.959 and in very short order managed to pass up Tesla 0:09:37.000 --> 0:09:39.760 in that market. They're now ahead on a global basis, 0:09:39.800 --> 0:09:42.120 and this is a company that you know, you hear 0:09:42.200 --> 0:09:46.160 Elon Musks talk about vertical integration and sort of controlling 0:09:46.160 --> 0:09:48.880 your own destiny, making all of your parts or many 0:09:48.920 --> 0:09:51.679 of your parts in house. BYD does that to an 0:09:51.679 --> 0:09:54.559 even greater extent than Tesla does. They make their own batteries, 0:09:54.840 --> 0:09:57.600 they make chips. So this is a company that has 0:09:57.679 --> 0:10:00.040 kind of you know, out Tesla and Tesla in the 0:10:00.000 --> 0:10:00.560 the last couple of. 0:10:00.559 --> 0:10:03.120 Years and selling at a pace five hundred and twenty 0:10:03.120 --> 0:10:06.319 six four hundred and nine fully electric in the last quarter. 0:10:06.480 --> 0:10:09.160 But there is going to be increasing competition coming on 0:10:09.200 --> 0:10:13.080 its home turf. BYD is selling cheaper cars, it's making 0:10:13.120 --> 0:10:15.760 therefore less profit than Tesla is, and they're likely to 0:10:15.840 --> 0:10:18.880 even more competition coming from China as well. How do 0:10:18.880 --> 0:10:20.520 you think Tesla will fare in that, Craig. 0:10:21.720 --> 0:10:24.440 It's a massively competitive market, and you're right to call 0:10:24.480 --> 0:10:28.600 out that the price differences here between Tesla and BYD 0:10:28.720 --> 0:10:33.840 are hugely different. The estimate for the average transaction price 0:10:34.400 --> 0:10:38.000 for Tesla among analysts survey by Bloomberg is you know, 0:10:38.040 --> 0:10:41.000 something on the order of forty five thousand dollars. BID 0:10:41.160 --> 0:10:44.360 is roughly half that. So this is a very different 0:10:44.600 --> 0:10:47.679 couple of companies. But we are seeing BYD also move 0:10:47.800 --> 0:10:50.200 up market, whereas you know, Tesla has been moving in 0:10:50.240 --> 0:10:54.160 the other direction, right, And so you know, the China 0:10:54.200 --> 0:10:57.679 market is hugely competitive. Musk himself will tell you it's 0:10:57.720 --> 0:11:01.520 the most competitive in the world weather bew ideas able 0:11:01.600 --> 0:11:03.280 to sort of weather that. I think they've you know, 0:11:03.400 --> 0:11:05.880 really made a statement in terms of their ability to 0:11:06.240 --> 0:11:09.360 do so. But it only will get more difficult in 0:11:09.440 --> 0:11:11.760 the year to come, especially as we see, you know, 0:11:11.880 --> 0:11:14.360 some of the cell phone makers in China enter the 0:11:14.400 --> 0:11:19.000 space and do so through contract manufacturing arrangements with some 0:11:19.080 --> 0:11:21.160 of the state owned companies, and that's going to be 0:11:21.280 --> 0:11:23.720 a trend that's really interesting to watch in twenty twenty four. 0:11:24.840 --> 0:11:27.080 Craig I was in the hot seat this morning for Rivian, 0:11:27.080 --> 0:11:30.600 and when I was writing about production and delivery, it 0:11:30.679 --> 0:11:33.880 was interesting the severity of the share reaction. Right, they 0:11:33.960 --> 0:11:37.280 quite comfortably beat their full year production guidance, but you 0:11:37.360 --> 0:11:39.640 were drilling down and made a wonderful chart that looks 0:11:39.640 --> 0:11:42.600 at kind of how sequentially deliveries have started to lag 0:11:42.640 --> 0:11:42.880 a bit. 0:11:44.240 --> 0:11:46.400 Yeah, I think this is a company that you know, 0:11:46.559 --> 0:11:50.040 was really production constraint that was their issue for sort 0:11:50.080 --> 0:11:53.000 of you know, quarter after quarter, which ad you documented 0:11:53.040 --> 0:11:56.520 really well. You know, this is a company that's managed 0:11:56.559 --> 0:11:58.600 to sort out some of the kinks and in production 0:11:58.760 --> 0:12:03.439 and over some of the growing pains the the deliveries, 0:12:04.200 --> 0:12:06.520 you know, part of the equation. They still have some 0:12:06.559 --> 0:12:08.960 work to do and of course, you know, the the 0:12:09.000 --> 0:12:13.679 investors aren't going to look particularly fondly when you outproduce, 0:12:14.240 --> 0:12:17.160 you know, relative to deliveries by the amount that that 0:12:17.880 --> 0:12:18.679 Rivian did in. 0:12:18.600 --> 0:12:19.319 The fourth quarter. 0:12:19.559 --> 0:12:21.960 There's going to be some concern about whether you're pushing 0:12:22.000 --> 0:12:24.480 on a string and whether you may need to cut 0:12:24.520 --> 0:12:27.440 prices you know, in the future, and so that will 0:12:27.440 --> 0:12:29.960 be something for us to watch. Also, I'm you know, 0:12:30.200 --> 0:12:34.160 very curious and whether you know the delivery van production, 0:12:34.960 --> 0:12:38.839 you know, and the change in Rivian being constrained to 0:12:38.920 --> 0:12:41.880 only being able to deliver those to Amazon to just 0:12:42.240 --> 0:12:44.720 you know, very late in the quarter, uh, sort of 0:12:44.840 --> 0:12:46.679 being able to sort of get out of that deal 0:12:46.840 --> 0:12:51.440 and you know, start delivering delivery vehicles to to other customers. 0:12:51.720 --> 0:12:53.680 You know, maybe there was a complication with that in 0:12:53.720 --> 0:12:55.760 the fourth quarter that accounts for this differential. 0:12:56.480 --> 0:12:59.560 We're going to drill in to demand side equation of 0:12:59.600 --> 0:13:01.920 all these things so much more. With that credited out. 0:13:01.960 --> 0:13:03.719 Always great to have you, Thank you, And later on 0:13:03.760 --> 0:13:05.280 the show, we are going to do a real deep 0:13:05.320 --> 0:13:08.520 dive on Tesla in particular Dan Levy from Barkley's going 0:13:08.559 --> 0:13:11.720 to be joining us on his latest thought. And note, meanwhile, 0:13:11.960 --> 0:13:14.560 let's talk about well the other Elon Musk company when 0:13:14.640 --> 0:13:16.360 one of what's six or seven of them, we're going 0:13:16.400 --> 0:13:18.880 to talk X because Fidelity has just cut the valuation 0:13:19.040 --> 0:13:21.680 of the state that it has in the social media company. 0:13:21.920 --> 0:13:24.200 This is the latest in a series of markdowns by 0:13:24.240 --> 0:13:27.320 Fidelity ever since Musk concluded the acquisition of the social 0:13:27.360 --> 0:13:29.240 media platform all the way back in October twenty twenty 0:13:29.280 --> 0:13:32.000 two feels like a lifetime ago. Someone who's been tracking 0:13:32.000 --> 0:13:34.560 that ever since. As Blue Merg's Kurt Wagner and we 0:13:34.880 --> 0:13:38.160 got the numbers, just remind us how much they're cutting 0:13:38.200 --> 0:13:39.840 and what sort of number we're now looking at for 0:13:39.840 --> 0:13:41.680 evaluation of Twitter now. 0:13:41.760 --> 0:13:45.720 Xeh, I believe the cut from the end of November, 0:13:45.720 --> 0:13:49.360 I think it was was around eleven percent, but in total, 0:13:49.800 --> 0:13:53.720 more than seventy percent. The value has been cut down 0:13:53.840 --> 0:13:56.520 since the close of the acquisition. Now you will remember 0:13:56.600 --> 0:13:58.800 that was a forty four billion dollar acquisition at the 0:13:58.880 --> 0:13:59.800 end of twenty twenty two. 0:14:00.400 --> 0:14:01.200 If it's been cut. 0:14:01.080 --> 0:14:02.960 By more than seventy percent, we're now looking at a 0:14:02.960 --> 0:14:05.760 company that at least Fidelity believes is valued closer to 0:14:05.800 --> 0:14:08.760 twelve and a half thirteen billion dollars. And so, you know, 0:14:08.800 --> 0:14:11.160 to put that into a little bit of historical perspective, 0:14:11.200 --> 0:14:14.200 you may remember Caroline back in way back in twenty sixteen, 0:14:14.200 --> 0:14:16.920 Twitter almost ald the Disney almost ald the salesforce. The 0:14:16.960 --> 0:14:19.880 company was around the same value way back then in 0:14:19.920 --> 0:14:24.400 twenty sixteen as it is today per Fidelity. So you know, 0:14:24.440 --> 0:14:28.240 We've just seen a huge erasure of value from X 0:14:28.280 --> 0:14:29.240 since Elon took over. 0:14:30.400 --> 0:14:33.280 The curious thing about this is that Fidelity is one 0:14:33.320 --> 0:14:37.520 of the investment firms that participated in the take private 0:14:37.560 --> 0:14:41.400 deal in the first place. Behind this, I guess we 0:14:41.480 --> 0:14:45.880 don't know, you know, the fact is behind Fidelity's decisional 0:14:45.920 --> 0:14:47.120 how they arrived. 0:14:46.800 --> 0:14:47.600 At that valuation. 0:14:47.800 --> 0:14:50.920 But you've done some reporting on how the financials have 0:14:51.080 --> 0:14:53.000 changed in the last twelve months. 0:14:54.160 --> 0:14:56.200 Yeah, we talked about this, ed if you'll remember, right 0:14:56.280 --> 0:14:58.960 before the new year, right, we had a story come 0:14:59.000 --> 0:15:02.840 out and Bloomberg that the advertising revenue at X is 0:15:02.880 --> 0:15:05.680 projected to be you know, somewhere around two point five billion, 0:15:05.800 --> 0:15:07.520 and that may even be on the high side, right, 0:15:07.520 --> 0:15:09.400 because some of these productions were made earlier in the 0:15:09.480 --> 0:15:12.280 quarter before Elon went on stage at deal Book and 0:15:12.920 --> 0:15:16.320 you know, started swearing at Twitter's advertising partners, and so 0:15:17.120 --> 0:15:20.920 you know, the value of Twitter's business or excuse me, 0:15:20.920 --> 0:15:23.120 the size of Twitter's business has just decreased so much. 0:15:23.680 --> 0:15:25.920 Even just a few years ago before Elon showed up, 0:15:25.960 --> 0:15:27.560 you know, they were bringing in more than five billion 0:15:27.560 --> 0:15:29.560 dollars a year, most of that in advertising revenue. We're 0:15:29.560 --> 0:15:33.840 now talking you know about half of that. And a 0:15:33.880 --> 0:15:36.800 lot of this is quite frankly self inflicted, right. A 0:15:36.880 --> 0:15:39.520 lot of the issues that they've had seem to be 0:15:39.560 --> 0:15:43.040 things they could have avoided with you know, some different approaches, 0:15:43.120 --> 0:15:44.760 I think to the advertising business. 0:15:45.000 --> 0:15:48.680 And to that end, self inflicted wounds as they are 0:15:49.600 --> 0:15:53.680 does ultimately bother the management, the leadership of the erosion 0:15:53.680 --> 0:15:56.280 of value might well bother some of the partners who 0:15:56.320 --> 0:15:58.800 well went in on the deal to take private, but 0:15:59.200 --> 0:16:03.160 ultimately us real pressure being put on turning this company 0:16:03.160 --> 0:16:04.600 around and building back is value. 0:16:05.800 --> 0:16:08.160 Well, they're in a unique position, right, and not only 0:16:08.240 --> 0:16:11.560 are they not a publicly traded company, but a lot 0:16:11.560 --> 0:16:14.960 of their investors are sort of investing in Elon Musk 0:16:15.080 --> 0:16:18.200 and X may be one of part of that investment, 0:16:18.240 --> 0:16:20.200 but they also want to be involved with Elon when 0:16:20.240 --> 0:16:23.320 it comes to SpaceX or neuralink or boring company or 0:16:23.360 --> 0:16:25.480 whatever types of things he does, right, And so I 0:16:25.520 --> 0:16:28.320 think there's a lot more patience from the people who 0:16:28.440 --> 0:16:31.440 invest alongside Elon Musk because they see the bigger picture, 0:16:31.480 --> 0:16:33.680 right and they say, Okay, maybe we are losing some 0:16:33.760 --> 0:16:36.400 money on our X investment right now, but the relationship 0:16:36.440 --> 0:16:38.480 that we've built with Elon. The support that we're giving 0:16:38.560 --> 0:16:40.800 him on that side will pay off in some of 0:16:40.800 --> 0:16:43.080 the other businesses that he runs. Right at least, that's 0:16:43.080 --> 0:16:44.720 how it's working right now now. I don't think there's 0:16:44.720 --> 0:16:47.320 going to necessarily be a willingness to just continue to 0:16:47.640 --> 0:16:49.960 run this into the ground over time, but I think 0:16:50.000 --> 0:16:52.320 he has a little bit more runway than most companies 0:16:52.360 --> 0:16:55.880 would in this situation because of all the other businesses 0:16:55.920 --> 0:16:56.440 that he has. 0:16:57.640 --> 0:17:00.320 Bloomberst Cowagonist Star in the year with the store of 0:17:00.680 --> 0:17:02.720 X the company and platform for me known as Twitter. 0:17:03.040 --> 0:17:05.880 Just as we started twenty twenty three, some things don't change. 0:17:06.040 --> 0:17:07.520 Happy new year to you now. Coming up here on 0:17:07.520 --> 0:17:11.639 Bloomberg Technology, another big, big story, Biden blocks chip making 0:17:11.640 --> 0:17:15.720 equipment to China. Details behind the administration's attempts to curtail 0:17:16.160 --> 0:17:37.400 China's tech advances. That's coming up next. This is Bloombog Technology. Okay, 0:17:37.400 --> 0:17:39.399 it's time for talking tech. First up in the news, 0:17:39.480 --> 0:17:43.240 Dish Network and Echo Star finalizing their merger. The two 0:17:43.280 --> 0:17:45.400 companies close the deal on December thirty. 0:17:45.480 --> 0:17:45.720 First. 0:17:45.800 --> 0:17:48.679 The move comes as Dish chairman Charlie Ergin seeks to 0:17:48.680 --> 0:17:52.320 move away from the dwindling pay TV businesses into wireless 0:17:52.320 --> 0:17:55.680 services to challenges the likes of Verizon AT and T 0:17:56.119 --> 0:17:59.400 and T Mobile and Bido's bid for live streaming company 0:17:59.520 --> 0:18:03.120 Joy lapses. The three point six billion dollar offer did 0:18:03.200 --> 0:18:07.000 not get approval by December thirty, first deadline from regulators 0:18:07.040 --> 0:18:10.399 by whose first announced the present potential acquisition back in 0:18:10.440 --> 0:18:13.080 November of twenty twenty, as the Chinese search giant was 0:18:13.119 --> 0:18:16.320 trying to get into advances in the digital video arena. 0:18:16.359 --> 0:18:19.719 Plus in the UK, BT Group may face some fines. 0:18:19.760 --> 0:18:23.920 The telecom company missed UK deadlines to move data out 0:18:23.920 --> 0:18:28.119 of core network equipment, which was manufactured by China's Huawei. 0:18:28.400 --> 0:18:31.000 The UK banned the usage of Huawei from its telicon 0:18:31.040 --> 0:18:35.240 infrastructure back in twenty twenty over national security concerns. 0:18:35.320 --> 0:18:39.080 Caroc Let's stick on those national security concerns the geopolitics, 0:18:39.119 --> 0:18:42.200 that is China versus or developed nations at the moment 0:18:42.240 --> 0:18:46.480 because chib equipment manufacturer ASML faced over there in the Netherlands, 0:18:46.480 --> 0:18:49.360 it's canceled shipments for some of its machines that were 0:18:49.400 --> 0:18:51.600 headed to China at the request of the Biden administration. 0:18:51.840 --> 0:18:54.440 This is calling to people familiar with the matter for more. 0:18:54.720 --> 0:18:57.840 We're welcomed in Mackenzie Hawkins joining us NOLU from Washington. 0:18:57.840 --> 0:19:00.879 And the interesting thing is they front run basically the 0:19:01.040 --> 0:19:03.040 date that the ban was coming in. They had to 0:19:03.080 --> 0:19:05.880 hold back even when well theory they were still allowed 0:19:05.920 --> 0:19:08.639 to be selling them right exactly. 0:19:08.800 --> 0:19:11.800 So the Dutch government had actually imposed restrictions on these 0:19:11.840 --> 0:19:14.600 machines that were set to go into effect on January first, 0:19:14.960 --> 0:19:17.959 but the Biden administration pressured the Dutch government to cancel 0:19:18.040 --> 0:19:21.720 licenses for ASML through the end of last year because 0:19:21.760 --> 0:19:23.800 they were worried that China could use those chip making 0:19:24.000 --> 0:19:26.560 machines to continue making semiconductor advances. 0:19:27.200 --> 0:19:29.280 This is an instance where it's really important to be 0:19:29.359 --> 0:19:32.920 clear what we're talking about chip making equipment, or more 0:19:32.960 --> 0:19:37.240 specifically the cutting edge of ultra violet lithography machines, and 0:19:37.520 --> 0:19:42.040 this is what ASML defined that as but in layman's terms, 0:19:42.560 --> 0:19:45.760 it is the ability to cram as many transistors onto 0:19:45.760 --> 0:19:50.760 a chip as possible etch on in the smallest form factor. 0:19:51.080 --> 0:19:54.840 And the relevance Mackenzie, as you know, is that reporting 0:19:55.040 --> 0:19:57.560 last year about Huawei and what they were able to 0:19:57.600 --> 0:20:01.040 do at the cutting edge using ASML machine, but some 0:20:01.160 --> 0:20:03.880 different machines exactly. 0:20:04.000 --> 0:20:04.160 So. 0:20:04.200 --> 0:20:07.560 The most advanced chip making machines are so called EUV machines. 0:20:07.600 --> 0:20:10.280 ASML is the only company that makes these machines, and 0:20:10.359 --> 0:20:13.359 the Dutch government has banned ASML from sending those machines 0:20:13.400 --> 0:20:18.160 to China for a long time. But Huawei, China's tech giant, 0:20:18.560 --> 0:20:20.720 was able to produce a ship with its chip making 0:20:20.760 --> 0:20:25.200 partner Smith using DUV machines, which are still highly advanced, 0:20:25.240 --> 0:20:28.080 but a slightly less advanced model that ASML was still 0:20:28.080 --> 0:20:30.600 allowed to ship to China. And so what the US 0:20:30.600 --> 0:20:32.560 had been working with the Dutch government on was a 0:20:32.600 --> 0:20:35.840 set of restrictions on the shipment of those immersion DUV 0:20:36.000 --> 0:20:40.480 machines to Beijing, and the Dutch government implemented such a restriction, 0:20:40.600 --> 0:20:43.200 but gave a lag time to ASML to continue making 0:20:43.240 --> 0:20:46.639 shipments through January. First, the US stepped in and said, 0:20:46.920 --> 0:20:48.960 you need to actually cancel those shipments. And those are 0:20:49.000 --> 0:20:49.880 the conversations that. 0:20:49.840 --> 0:20:50.960 Happened over the last time. 0:20:51.480 --> 0:20:54.040 There is some interesting politics behind this as well. So, 0:20:54.080 --> 0:20:57.560 according to Bloomberg's reporting, US National Security Advisor Jake Sullivan 0:20:57.600 --> 0:20:59.919 phones the Dutch and says, can you get a sm 0:21:00.240 --> 0:21:02.879 to do it? And the Dutch say just phone them yourselves, 0:21:03.040 --> 0:21:04.600 make their request direct. 0:21:06.000 --> 0:21:08.879 Exactly. So first you had Jake Sullivan reaching out to 0:21:08.920 --> 0:21:12.600 the Dutch government. They say contact ASML. The US has 0:21:12.600 --> 0:21:15.720 this conversation with ASML, and then you see the Dutch 0:21:15.720 --> 0:21:18.040 revoke some of these licenses. So you're working with a 0:21:18.040 --> 0:21:20.800 little bit of a workaround here where the Dutch government 0:21:20.840 --> 0:21:22.280 wants to be able to point to the US and 0:21:22.320 --> 0:21:25.200 say this restriction is coming from Washington. And of course 0:21:25.240 --> 0:21:28.560 you saw the US tighten its restrictions on overall chip 0:21:28.600 --> 0:21:32.440 making equipment and advanced computing exports to China earlier this year, 0:21:32.680 --> 0:21:37.480 additionally affecting some Dutch machines, some of the emerging duvelethography 0:21:37.520 --> 0:21:40.600 equipment from ASML. So you have a bit of a 0:21:40.720 --> 0:21:44.760 tension between Washington and Amsterdam as the US plas ahead 0:21:44.800 --> 0:21:48.720 with its chip war against Beijing and the Dutch, the Japanese, 0:21:48.720 --> 0:21:50.840 other governments around the world are sort of dragged. 0:21:50.560 --> 0:21:51.520 Into a well as well. 0:21:52.640 --> 0:21:55.440 Bloomberg's Mackenzie Hawk and it's just terrific reporting. Worth noting 0:21:55.480 --> 0:21:57.400 chip stocks are underpressure today carrec. 0:21:57.520 --> 0:22:00.920 Yeah, particularly in China, those that would depend on such 0:22:01.000 --> 0:22:04.120 sort of EUV lithography. We thank you so much McKenzie 0:22:04.119 --> 0:22:17.160 has always. 0:22:12.760 --> 0:22:15.680 Welcome back to bliogow Technology Ed Lovelow here in San Francisco, 0:22:15.880 --> 0:22:16.280 and I'm. 0:22:16.160 --> 0:22:17.720 Karen Hide in New York. Let's get you a quick 0:22:17.760 --> 0:22:19.440 check on these markets. First day, I've traded A twenty 0:22:19.480 --> 0:22:21.680 twenty four and will there's a little bit of profit 0:22:21.720 --> 0:22:23.960 taking risk coming off the table. Call it what you will. 0:22:24.119 --> 0:22:26.760 We're reassessing how much rates are going to rise all 0:22:26.840 --> 0:22:29.119 fall and how quickly they might be cut. Here in 0:22:29.160 --> 0:22:31.240 the United States in particular, we're looking at therefore two 0:22:31.280 --> 0:22:33.760 year yield that backs up at some seven basis points. 0:22:33.760 --> 0:22:35.920 It's a global bond sell off, and indeed it's in 0:22:35.960 --> 0:22:38.120 everything sell off. Kind of a day equities down and 0:22:38.160 --> 0:22:40.240 bonds were seeing then aw's like one hundred curry off 0:22:40.280 --> 0:22:42.800 by one point four percent. Worst day for generally tech 0:22:42.800 --> 0:22:45.560 stocks is December the twentieth. Now we are seeing bitcoin 0:22:45.600 --> 0:22:47.480 though still getting a little bit of love. We anticipate, 0:22:47.520 --> 0:22:49.520 of course, a spot Bitcoin et have been signed off 0:22:49.560 --> 0:22:52.600 as as soon as June January eighth, January tenth, we're 0:22:52.600 --> 0:22:54.840 looking at it up some three point seven percent, eclipsing 0:22:54.880 --> 0:22:57.480 that forty five thousand dollars handle. Moving on and look 0:22:57.480 --> 0:22:59.359 at some of the individual players that we're looking at, 0:22:59.400 --> 0:23:02.280 because well, when you are seeing a juggernaut such as 0:23:02.320 --> 0:23:05.640 Apple on the downside after a keynote out of Barclays, well, 0:23:05.720 --> 0:23:08.040 no wonder the overall benchmarks fall and we're off by 0:23:08.040 --> 0:23:10.840 more than three percent for a company that's worth well 0:23:10.840 --> 0:23:13.119 at one point three trillion dollars, So no wonder it 0:23:13.160 --> 0:23:15.600 has a key points waiting micro strategy. Of course, a 0:23:15.640 --> 0:23:17.600 lot of the cryptonames on the higher side. As bitcoin 0:23:17.680 --> 0:23:20.240 goes high, we know micro strategy of course, key element 0:23:20.280 --> 0:23:22.320 of the balance sheet is indeed and bitcoin we're up 0:23:22.320 --> 0:23:25.119 eleven percent. Lastly though, just looking at Tesla, and this 0:23:25.160 --> 0:23:29.280 has been the news of the morning. Ultimately Tesla managing 0:23:29.280 --> 0:23:31.240 to live up to the one point eight million for 0:23:31.320 --> 0:23:34.760 the full year in terms of evs sold, but it's 0:23:34.760 --> 0:23:37.400 been eclipsed by a big Chinese player now and we've 0:23:37.400 --> 0:23:39.480 got a dissectors to how much that really matters. 0:23:40.080 --> 0:23:41.480 Yeah, it's interesting that the stocks flat. 0:23:41.520 --> 0:23:42.520 I mean, it's kind of been a way over the 0:23:42.520 --> 0:23:45.119 place since the market open, markedly higher than lower, and 0:23:45.119 --> 0:23:47.520 then higher and then lower again. Let's keep the conversation 0:23:47.600 --> 0:23:50.239 going and bringing Dan Livy Ananist for Barkleys who has 0:23:50.240 --> 0:23:52.720 an equal weight rating on Tesla a two hundred and 0:23:52.760 --> 0:23:54.200 sixty dollars price target. 0:23:54.840 --> 0:23:56.600 What is the storyline for you? Dan? 0:23:56.800 --> 0:24:00.760 You know, you meet the stated one point eight million target, 0:24:00.760 --> 0:24:04.040 But I remember a year ago the first earning score 0:24:04.119 --> 0:24:07.280 of the year in January twenty twenty three, musked outing, well, 0:24:07.280 --> 0:24:09.840 we could do two million maybe, So what does the 0:24:09.840 --> 0:24:11.480 score cards show? 0:24:11.880 --> 0:24:12.439 All told? 0:24:14.160 --> 0:24:17.840 Hey, Edon Carlin, thank you so much for having me. Yeah. 0:24:18.280 --> 0:24:22.359 I think the story of twenty twenty three was that 0:24:23.160 --> 0:24:26.480 we were pulling back from a period of evuphoria. And 0:24:26.520 --> 0:24:30.520 if we just contrast what's going on now versus where 0:24:30.520 --> 0:24:33.119 we were two years ago, where the market was fully 0:24:33.160 --> 0:24:37.760 supply constrained and demand was not at all concerned. 0:24:37.920 --> 0:24:39.160 That's not the case now. 0:24:39.320 --> 0:24:43.199 Now we have questions about demand, even so much to 0:24:43.240 --> 0:24:47.120 the point that Tesla acknowledged on the last earnings call 0:24:47.520 --> 0:24:49.840 that there were some macro concerns and it would not 0:24:50.000 --> 0:24:53.960 be producing as much as it could in its Often 0:24:54.000 --> 0:24:57.399 and Berlin facilities simply because of some of these macro questions. 0:24:57.440 --> 0:25:01.000 And so the story going forward is, you know, how 0:25:01.000 --> 0:25:04.600 do we deal with this period of some demand uncertainty 0:25:04.880 --> 0:25:06.000 within the EB market? 0:25:07.520 --> 0:25:10.280 The storyline that we're leading on at Bloomberg is that 0:25:10.400 --> 0:25:13.800 Tesla's lost its crown to BYD. BYD the sort of 0:25:13.840 --> 0:25:18.040 biggest standalone seller of battery electric vehicles, and we knew. 0:25:17.840 --> 0:25:18.520 That was coming. 0:25:19.359 --> 0:25:23.400 Does it matter if Tesla is eclipsed by BYD, which 0:25:23.440 --> 0:25:27.960 is kind of predominantly focused on the domestic Chinese market. 0:25:29.600 --> 0:25:33.280 It doesn't necessarily matter per se in the sense that 0:25:33.400 --> 0:25:36.879 there is room for multiple players. And if we just 0:25:36.960 --> 0:25:40.880 break apart the markets, yes, BYD eclipse Tesla. This year 0:25:41.960 --> 0:25:47.320 within battery electric vehicles, Tesla still BYD Tesla was at 0:25:47.640 --> 0:25:50.920 one point eight million, I believe BYD on battery electrics 0:25:51.240 --> 0:25:54.760 was one point six million something along those lines, with 0:25:54.880 --> 0:25:58.680 the remainder being plug in hybriardy vehicles. If you look 0:25:58.680 --> 0:26:01.359 at it on a regional base, that's where the dynamics 0:26:01.400 --> 0:26:04.720 really vary, because in the US, Tesla is still the 0:26:05.040 --> 0:26:06.800 dominant EV name. 0:26:07.840 --> 0:26:09.040 You know, in Europe. 0:26:08.760 --> 0:26:11.639 Tesla is still a top three or so player in 0:26:11.680 --> 0:26:15.640 the beeB market. China Tesla is still you know, top 0:26:15.720 --> 0:26:19.760 two or three. It's BYD that's really taken the crown. 0:26:20.080 --> 0:26:22.800 And it's China where we saw a lot of bid 0:26:22.920 --> 0:26:26.199 sales accelerate The other story that we saw merging in 0:26:26.280 --> 0:26:30.280 twenty twenty three was the rise of Chinese exports to 0:26:30.440 --> 0:26:34.480 Europe and to other markets. So, yes, there's more competition 0:26:34.600 --> 0:26:37.520 Tesla from BYD, but there is still room for Tesla 0:26:37.800 --> 0:26:40.280 to grow. It's just a question of in the markets 0:26:40.280 --> 0:26:42.600 where Tesla is serving, where is the demand for that? 0:26:43.000 --> 0:26:45.360 Yeah, and spin us then into twenty twenty four, when 0:26:45.359 --> 0:26:48.120 we're thinking of a BYD getting into Hungary and producing there, 0:26:48.160 --> 0:26:52.040 when we're thinking of two very different price points, ultimately 0:26:52.600 --> 0:26:55.040 remain on top for Tesla in terms of profits and 0:26:55.080 --> 0:26:58.720 revenue because they make more expensive cars. Will Tesla ever 0:26:58.800 --> 0:27:00.480 want to go lower to be able to serve and 0:27:00.480 --> 0:27:02.639 get in on that highly competitive state that there is 0:27:02.680 --> 0:27:04.680 in China or should we be staying in its lane? 0:27:06.560 --> 0:27:09.800 Well, that's ultimately the goal for Tesla, right. That was 0:27:09.840 --> 0:27:14.800 something that they outlined at their investor day last March, 0:27:14.880 --> 0:27:19.160 the path to megascale. Right, you know, twenty twenty four, 0:27:19.320 --> 0:27:23.080 from a volume perspective for Tesla, we're at two million units. 0:27:23.080 --> 0:27:25.240 That's below consensus of two point two million. 0:27:25.600 --> 0:27:28.440 So it is some growth, it's low double digit growth 0:27:28.520 --> 0:27:30.280 versus twenty twenty three, but. 0:27:30.280 --> 0:27:32.800 It is below you know the long. 0:27:32.600 --> 0:27:35.760 Term growth curve Tesla has laid out, and that's really 0:27:35.800 --> 0:27:37.840 because there is not much in the way of do 0:27:38.000 --> 0:27:41.480 incremental product for Tesla in twenty twenty four. Yes, their 0:27:41.520 --> 0:27:44.280 cyber truck that we think that's niche, it's really Model 0:27:44.280 --> 0:27:48.040 three and why, which are somewhat dated models. And so 0:27:48.240 --> 0:27:51.000 really the story for Tesla on volume growth going forward 0:27:51.080 --> 0:27:53.520 is going to be modeled to whenever that is released. 0:27:53.560 --> 0:27:57.040 We have that as you know, sometime in twenty twenty five, 0:27:57.280 --> 0:27:59.560 where they really go down to that lower price point. 0:28:00.080 --> 0:28:02.560 Are ways to go to get to that lower price point, 0:28:02.840 --> 0:28:04.439 they have to drive out a lot of cost to 0:28:04.480 --> 0:28:04.960 get there. 0:28:05.560 --> 0:28:07.840 Let's just go back to this cyber truck because that 0:28:08.080 --> 0:28:11.000 was something that I'm sure frustrated you and many an 0:28:11.040 --> 0:28:13.679 analyst investor is they didn't strip out give us the 0:28:13.720 --> 0:28:16.760 intricacies of how many they actually sold. Was it five 0:28:16.840 --> 0:28:19.159 hundred on the low end, was it five thousand on 0:28:19.200 --> 0:28:21.639 the high end? Was where do you think the cyber 0:28:21.680 --> 0:28:24.200 truck is landing? And doesn't really matter if it's just 0:28:24.240 --> 0:28:26.439 getting people in to have a look at the other cars. 0:28:28.560 --> 0:28:31.960 It was probably a small set of volumes. 0:28:32.000 --> 0:28:35.119 We modeled in something like two hundred units. 0:28:35.760 --> 0:28:38.680 You know possible it was below that number. 0:28:39.440 --> 0:28:42.720 Look, I think Tesla has has been clear that there 0:28:42.760 --> 0:28:46.240 are a number of production challenges along the way that 0:28:46.360 --> 0:28:49.440 need to be met with Cybertruck, and so that's why 0:28:49.520 --> 0:28:53.680 to us, yeah, cybertruck is a different model for them, 0:28:53.720 --> 0:28:57.440 and it does help give some model diversification which they've needed. 0:28:57.800 --> 0:29:03.480 That being said, we'd set our expectations accordingly on cyber truck. 0:29:03.800 --> 0:29:05.880 We're assuming that you know, you're not going to get 0:29:05.920 --> 0:29:08.680 more than twenty thousand units in twenty twenty four. 0:29:08.720 --> 0:29:11.160 Because it is such a slow ramp. There are likely 0:29:11.240 --> 0:29:12.920 some questions as well. On demand. 0:29:14.000 --> 0:29:16.640 We think that it will draw on some consumers who 0:29:16.680 --> 0:29:18.560 want more of a lifestyle type vehicle, But if we 0:29:18.560 --> 0:29:23.120 don't see cyber truck really penetrating that core large pickup. 0:29:22.760 --> 0:29:26.760 Market which is used for work purposes and commercial purposes. 0:29:27.680 --> 0:29:30.080 Dan, I want to go back to the demand question 0:29:30.320 --> 0:29:32.680 and zoom out. You can apply it to the legacy 0:29:32.680 --> 0:29:35.560 auto names Ford and GM. You can bring in Rivin 0:29:35.680 --> 0:29:39.040 you want, But there is certainly a question now about 0:29:39.880 --> 0:29:43.160 the wave of first or early adopters being gone and 0:29:43.240 --> 0:29:47.160 how you just go after the everyday household. Tesla has 0:29:47.240 --> 0:29:50.560 used price cuts as its lever the federal tax credit 0:29:50.600 --> 0:29:54.040 in this country is clearly a big factor. How do 0:29:54.160 --> 0:29:56.800 you model demand for this year. 0:29:58.960 --> 0:30:04.080 Volume the EV market will increase even for the legacy 0:30:04.200 --> 0:30:09.280 players where there are questions on demand and where clearly 0:30:09.360 --> 0:30:12.720 they are slowing the pace of volume, there is still 0:30:12.920 --> 0:30:18.080 going to be growth, you know, from a subsidy standpoint. 0:30:18.120 --> 0:30:21.000 In the US, one key step forward is that the 0:30:21.040 --> 0:30:23.280 seventy five hundred dollars credit will now be made on 0:30:23.320 --> 0:30:26.440 a point of sale basis, meaning you get it immediately 0:30:26.440 --> 0:30:29.120 when you purchase the vehicle as opposed to when you're 0:30:29.120 --> 0:30:30.600 filing your taxes. 0:30:30.240 --> 0:30:31.560 So that can help. 0:30:31.640 --> 0:30:36.200 That being said, there are some vehicles losing eligibility, and 0:30:36.680 --> 0:30:39.920 as you note that, there is clearly a question about 0:30:40.200 --> 0:30:44.080 you know, going from the early adopters to the early majority, 0:30:44.360 --> 0:30:46.480 where now you have to deal with the questions of 0:30:46.600 --> 0:30:51.200 range anxiety and charging availability, and so these are all 0:30:51.240 --> 0:30:54.800 things that need to be addressed. So I think that 0:30:54.840 --> 0:30:58.720 there is clearly still path forward for EV volumes to 0:30:58.760 --> 0:31:02.560 be increasing in in twenty twenty four. It's just that 0:31:02.640 --> 0:31:05.880 the pace of growth is slowing. The other piece of this, 0:31:06.000 --> 0:31:07.760 and you alluded to this on the point of the 0:31:07.760 --> 0:31:10.200 price cut. Tous Look can cut its price because it's 0:31:10.320 --> 0:31:14.280 cost structure allows it to do so. For the legacy automakers, 0:31:14.560 --> 0:31:17.280 they've struggled with evs on the cost front, and there's 0:31:17.320 --> 0:31:21.480 only so much that they can cut on price because 0:31:21.680 --> 0:31:23.120 the costs are what they are. 0:31:23.400 --> 0:31:25.160 So they have some work to do on the cost 0:31:25.240 --> 0:31:26.040 side so. 0:31:25.920 --> 0:31:29.800 That they can sell more volumes at a more appropriate price. 0:31:29.840 --> 0:31:32.320 Cort Danley Vee, it's been so good to get you 0:31:32.400 --> 0:31:34.600 on the back of these production numbers today, of course, 0:31:34.640 --> 0:31:37.800 DANLEYB of Barclay's, we thank you so much and sales 0:31:37.880 --> 0:31:40.240 data at that. Meanwhile, the coming up, we're going to 0:31:40.280 --> 0:31:43.000 be talking about Apple facing a ban on imports of 0:31:43.040 --> 0:31:45.480 its watches. You know, it's on ice of the short term, 0:31:45.520 --> 0:31:47.400 but what about the longer term? The conversation is up 0:31:47.400 --> 0:31:50.560 next with James Gagan Technology Litigator over at Alan and. 0:31:50.520 --> 0:31:53.920 Overary and what's we got, Yeah, quick check at Maderna 0:31:53.960 --> 0:31:57.960 that's really spiking, shares up around sixteen percent as it stands, 0:31:58.000 --> 0:32:02.040 trading at their highest levels since late August of twenty 0:32:02.080 --> 0:32:06.360 twenty three, the news being that the stock has been 0:32:06.360 --> 0:32:11.040 given an upgrade to outperform from performing. Oppenheimer the firms, 0:32:11.040 --> 0:32:14.280 saying they expect to see real return to top line 0:32:14.320 --> 0:32:17.480 sales grow Formerderna in twenty twenty five, and they're talking 0:32:17.480 --> 0:32:21.160 about increased visibility on the sale of COVID nineteen vaccine. 0:32:21.200 --> 0:32:23.719 That's a big move of sixteen percent on Maderna in 0:32:23.720 --> 0:32:29.760 this this Bloomberg Technology. 0:32:39.320 --> 0:32:41.440 Let's just check in on shares of Apple because they 0:32:41.440 --> 0:32:43.640 took a hit and so therefore have the big benchmarks. 0:32:43.760 --> 0:32:46.520 It's all after Barclay's cut the tech giant to underweight 0:32:46.560 --> 0:32:49.440 for the first time since twenty nineteen, following expectations of 0:32:49.440 --> 0:32:51.880 what they see as soft demand for its latest iPhone, 0:32:52.000 --> 0:32:55.000 saying they expect quote a reversion after a year when 0:32:55.080 --> 0:32:58.320 most quarters were missed and the stock out performed nevertheless 0:32:58.520 --> 0:33:01.600 joining us now Bloomberg's. And that's the point, isn't it. 0:33:01.640 --> 0:33:04.160 We just think back to the February earnings that they 0:33:04.240 --> 0:33:07.920 posted twenty twenty three, and they missed the streets expectations, 0:33:07.960 --> 0:33:10.800 but still shares rallied almost fifty percent on the twenty 0:33:10.840 --> 0:33:14.440 twenty three So why does Barklays now think it can't 0:33:14.480 --> 0:33:15.720 manage to pull that out of the bag? 0:33:16.960 --> 0:33:19.760 Yeah, Barkleys has seen some holes in the Apple story. 0:33:19.920 --> 0:33:23.040 I mean, certainly you've had four quarters plus in a 0:33:23.120 --> 0:33:27.480 row of holiday declines. The earnings report that's coming at 0:33:27.480 --> 0:33:30.520 the end of January early February will indicate that Q 0:33:30.680 --> 0:33:33.280 one was either in line, maybe a little bit more 0:33:33.280 --> 0:33:35.720 a little bit less in the prior quarter. You have 0:33:35.960 --> 0:33:39.600 these patent situations which are likely to crop up in 0:33:39.680 --> 0:33:43.240 higher frequency. Now, given the success that Massimo has had 0:33:43.320 --> 0:33:46.640 over the past few months, you're not seeing anything in 0:33:46.680 --> 0:33:50.120 the twenty twenty four product pipeline that is in the 0:33:50.160 --> 0:33:53.840 short term going to juice sales to any considerable degree. 0:33:54.200 --> 0:33:58.480 So they're sensing some fragility there in the Apples story, 0:33:58.480 --> 0:34:01.880 and that's what sent the shares down pretty considerably. You know, 0:34:01.920 --> 0:34:05.880 this Tuesday morning after New Year's Day, there's certainly going 0:34:05.920 --> 0:34:10.200 to be new iPhones. I'm not expecting anything significant the 0:34:10.239 --> 0:34:13.000 bigger picture. There will be some camera improvements on the 0:34:13.040 --> 0:34:16.680 smaller Pro model, but some minor size and preases of 0:34:16.680 --> 0:34:20.000 the displays on both of the hind iPhones. You're going 0:34:20.040 --> 0:34:24.200 to get the biggest iPad revamp in five six years. 0:34:24.640 --> 0:34:27.120 You're also getting the Vision Pro that's going to be 0:34:27.120 --> 0:34:30.239 coming within the next thirty days a month or so. 0:34:31.040 --> 0:34:33.359 But certainly I'm not expecting the vision pros to drive 0:34:33.400 --> 0:34:36.520 a lot of revenue, certainly this year or even. 0:34:36.320 --> 0:34:37.400 In twenty twenty five. 0:34:38.040 --> 0:34:40.920 The iPad should do pretty well for that segment, but 0:34:41.000 --> 0:34:44.560 that has been underperforming the last couple of years or so, 0:34:45.360 --> 0:34:48.799 and the iPhone I would expect to be stagnants. Not 0:34:48.840 --> 0:34:52.719 necessarily in hypergrowth. It is as it has been, you know, 0:34:52.760 --> 0:34:53.640 in prior years. 0:34:53.680 --> 0:34:55.440 But certainly you know. 0:34:55.440 --> 0:34:57.680 It is a risk to bet against Apple because they 0:34:57.719 --> 0:35:01.239 always do seem to find a way to come out 0:35:01.239 --> 0:35:03.280 with numbers that could surprise the street. 0:35:04.239 --> 0:35:06.720 Yeah, the share performance of twenty twenty three would speak 0:35:06.719 --> 0:35:09.040 to that argument. Bloombogs Mark German, thank you very much 0:35:09.080 --> 0:35:11.960 for the latest on the stock. The other story is 0:35:11.960 --> 0:35:14.719 that Apple's facing a ban on imports of its watches. 0:35:14.840 --> 0:35:18.400 The company is now seeking alternate paths to overcome a 0:35:18.480 --> 0:35:21.960 patent infringement loss that forced its most popular Apple Watch 0:35:22.000 --> 0:35:25.200 models off shelves over the holidays. Here to keep the 0:35:25.239 --> 0:35:29.520 conversation going is James Gagan, technology litigator at Alan and Ovary, 0:35:29.560 --> 0:35:34.880 who's practice focuses on high tech intellectual property, international trade competition. 0:35:35.640 --> 0:35:37.959 There are some avenues they can go down on a fix. 0:35:38.000 --> 0:35:41.560 There are some deadlines coming up, but in the first instance, 0:35:41.600 --> 0:35:45.000 it was a wild holiday period where Apple seemed to 0:35:45.000 --> 0:35:48.759 rely on procedural wrangling to push back as best they 0:35:48.760 --> 0:35:52.479 could against that original ITC decision, which was two months ago. 0:35:54.480 --> 0:35:56.960 Yeah, that's right, ed, and thanks very much for having me. 0:35:57.480 --> 0:35:59.799 You know, as someone who practices in the International Trade 0:35:59.800 --> 0:36:02.160 Comme quite a bit, this has been an interesting case 0:36:02.840 --> 0:36:04.920 so follow I think what it shows is that when 0:36:04.960 --> 0:36:08.160 companies like Apple are facing a potential import ban in 0:36:08.200 --> 0:36:11.880 the International Trade Commission, they can actually consider during the 0:36:11.920 --> 0:36:15.200 lawsuit making changes to their product designs and then getting 0:36:15.239 --> 0:36:19.320 authorization to sell those redesigned products, even if the Commission 0:36:19.320 --> 0:36:22.920 would find infringement and order a ban on the current models. 0:36:22.920 --> 0:36:24.880 And this is a common plan B that we see 0:36:25.400 --> 0:36:28.400 often in these cases, at least based on my review 0:36:28.400 --> 0:36:31.440 of the Commission's public decisions, that doesn't appear to have 0:36:31.440 --> 0:36:34.319 happened here. Apple didn't have an authorized backup design it 0:36:34.360 --> 0:36:36.920 could switch to, and so when the Commission decided to 0:36:37.000 --> 0:36:39.759 order that ban on the Series nine and Ultra two 0:36:39.840 --> 0:36:43.120 watches at the end of October, you've seen Apple scrambling 0:36:43.160 --> 0:36:46.240 to implement these emergency strategies over the last several weeks, 0:36:46.680 --> 0:36:48.560 and so I think it shows that when companies don't 0:36:48.600 --> 0:36:51.200 litigate this plan B and they don't have a fallback 0:36:51.239 --> 0:36:53.880 position in these cases, then they're exposing the business to 0:36:53.960 --> 0:36:56.840 lost sales, and I think it limits their options going. 0:36:56.600 --> 0:36:59.880 Forward, and not only just to lost sales, but also 0:37:00.000 --> 0:37:03.240 so probably a mental impact on a consumer that suddenly 0:37:03.320 --> 0:37:07.000 questions that the winning formula and technology of an Apple. 0:37:07.120 --> 0:37:10.239 To that end, if Apple does want certainty in the 0:37:10.280 --> 0:37:12.280 here and the now, what do they need to pursue 0:37:12.400 --> 0:37:14.480 How do we see this being ironed out? Is it 0:37:14.600 --> 0:37:16.840 just about settlement or in agreement with Massimo? 0:37:18.719 --> 0:37:21.760 Well, it could be settlement that would bring certainty, you Caroline. 0:37:21.800 --> 0:37:24.240 But if companies like Apple that are in this position 0:37:24.360 --> 0:37:27.920 want certainty, then they need to implement hardware or software 0:37:28.000 --> 0:37:30.960 changes to the products and then prove that those changes 0:37:31.040 --> 0:37:34.120 do not infringe the patents, and then obtain authorization to 0:37:34.200 --> 0:37:37.640 import and sell these new product versions. And so according 0:37:37.640 --> 0:37:40.480 to Apple, it has already started this process. It's already 0:37:40.520 --> 0:37:43.880 presented redesigns to US customs, and it's said that it 0:37:43.960 --> 0:37:46.120 expects the decision. I think by the end of next week. 0:37:46.640 --> 0:37:49.200 It's confidential. We don't know what that redesign will look like. 0:37:49.600 --> 0:37:52.000 But when companies go this route and they need a 0:37:52.080 --> 0:37:55.560 quick approval to get products back on the market, generally 0:37:55.600 --> 0:37:58.480 they'd want to present customs with a very simple hardware 0:37:58.560 --> 0:38:01.759 or software change that they've already implemented and that there's 0:38:01.800 --> 0:38:04.960 no dispute, doesn't infringe the patterns, and often this means 0:38:05.120 --> 0:38:08.600 removing the infringing future completely from the product. So it 0:38:08.680 --> 0:38:12.160 is possible that Apple could get approval to sell these 0:38:12.200 --> 0:38:14.560 watches again, but they may not have the same features 0:38:14.560 --> 0:38:17.440 that they do right now, including one oxygen monitoring. 0:38:18.200 --> 0:38:21.920 That is the fascinating part for me that we reported 0:38:22.040 --> 0:38:26.080 on December twenty eighth that Apple sees software as being 0:38:26.120 --> 0:38:29.280 the long term fix, but it relates to a specific 0:38:29.360 --> 0:38:31.920 functionality on a hot piece. 0:38:31.680 --> 0:38:34.280 Of hardware, a wearable. 0:38:34.239 --> 0:38:36.280 Who are the people on the other side of the table, 0:38:36.400 --> 0:38:41.279 customs who are reviewing the compromise and then deciding if 0:38:41.280 --> 0:38:44.200 it works or not because it is a software fix 0:38:44.800 --> 0:38:47.440 to hardware functionality. 0:38:47.080 --> 0:38:47.560 That's right. 0:38:47.640 --> 0:38:51.480 So Apple is asking for approval from a specific branch 0:38:51.520 --> 0:38:55.680 of customs that their entire job is to administer these 0:38:55.719 --> 0:38:59.440 exclusion orders from the Commission, So they're very experienced in 0:38:59.520 --> 0:39:02.880 assessing these types of redesigns. But it is true that 0:39:02.920 --> 0:39:06.000 if Apple is proposing some sort of complicated software fix, 0:39:06.239 --> 0:39:08.600 we don't know, but if they are, then it would 0:39:08.600 --> 0:39:12.400 be challenging to get a fix like that through customs 0:39:12.400 --> 0:39:13.840 in the time they have a lot of and so 0:39:14.880 --> 0:39:18.240 you know, for example, Apple may want to present the cleanest, 0:39:18.360 --> 0:39:20.880 most obvious fix that it can to get these products 0:39:20.960 --> 0:39:23.120 back on the market. We know that the Apple Watch 0:39:23.160 --> 0:39:25.800 series SC can be sold because it's not equipped to 0:39:25.840 --> 0:39:28.400 measure blood oxygen levels, and so Apple may be presenting 0:39:28.440 --> 0:39:29.880 a solution with us such as that. 0:39:30.360 --> 0:39:32.520 James Gagan, we thank you for pushing us forward on 0:39:32.560 --> 0:39:35.400 this technology Litigator, someone who knows the ITC well, We 0:39:35.520 --> 0:39:37.680 really appreciate it. Verrett Allen and Ovary. 0:39:45.840 --> 0:39:49.400 There are now other products out there that we can 0:39:49.520 --> 0:39:52.759 use to gain exposure to bitcoin in this moment, and 0:39:52.880 --> 0:39:55.920 it's just a moment of uncertainty between now we think 0:39:56.560 --> 0:40:01.480 and January January eighth to tenth, somewhere in that range perhaps, 0:40:02.440 --> 0:40:04.680 but we're out of an abundance of caution. 0:40:04.840 --> 0:40:08.520 Didn't want to take any risk that abundance of caution 0:40:08.880 --> 0:40:11.640 that Kathy would have. ARC Investor talks about is why 0:40:11.680 --> 0:40:16.160 they exited Grayscale Bitcoin Trust but actually plow their money 0:40:16.200 --> 0:40:20.160 from our next generation ETF instead into pro Shares Bitcoin 0:40:20.200 --> 0:40:23.120 Strategy ETF. All of this, of course on the question 0:40:23.239 --> 0:40:25.960 of whether or not gray scale Bitcoin Trust will indeed 0:40:26.440 --> 0:40:29.799 be converted into an ETF. And all of this, of course, 0:40:29.840 --> 0:40:32.680 the anticipation of an approval of a spot bitcoin ETF 0:40:33.160 --> 0:40:36.560 investment opportunity has been driving the price of bitcoin up 0:40:36.560 --> 0:40:39.960 more broadly past forty five thousand. Uti Yang is here 0:40:39.960 --> 0:40:42.600 to break it all down. So there's the intricacies of 0:40:42.680 --> 0:40:47.080 who and how and when, but ultimately any spot bitcoin 0:40:47.160 --> 0:40:50.120 ETF is going to be good for holders of the 0:40:50.160 --> 0:40:52.400 bitcoin of bitcoin in and of itself. 0:40:53.239 --> 0:40:56.200 Yeah, so we're looking at a big wig coming ahead 0:40:56.239 --> 0:41:00.560 for the bigcoin industry. There's wide expectation there CC will 0:41:00.600 --> 0:41:03.320 make a decision finally on whether they will approve a 0:41:03.480 --> 0:41:09.520 spot bcoin ETF. So we saw bicoin really rallied in 0:41:09.560 --> 0:41:14.040 the past year based on the anti anticipation of this news, 0:41:14.200 --> 0:41:18.600 which analysts thinks will drive institutional funding into bigc one. 0:41:19.160 --> 0:41:22.479 But still there's uncertainty and approval is not one hundred 0:41:22.560 --> 0:41:24.240 percent guaranteed. 0:41:23.920 --> 0:41:26.759 And many embracing paths for a buy the room and 0:41:26.840 --> 0:41:28.839 sell the news kind of fact. Maybe we even see 0:41:28.840 --> 0:41:31.200 a bit of a dip as and when it is infanty, 0:41:31.320 --> 0:41:33.719 it does get approved, But do you know any of 0:41:33.760 --> 0:41:36.839 the details is to actually what happens. Say January eighth 0:41:36.840 --> 0:41:40.280 to tenth, the SEC says yes, will immediately the ETF 0:41:40.360 --> 0:41:43.600 be there for the tradings that take days or weeks 0:41:43.640 --> 0:41:45.000 or months to be executed on. 0:41:45.360 --> 0:41:49.440 We don't know yet if the SEC does approve a 0:41:49.480 --> 0:41:53.280 big one ETF fund. It seems that all the issuers 0:41:53.320 --> 0:41:56.799 and operators that are associated with a big one et 0:41:56.960 --> 0:42:00.239 F are have been preparing to get ready to launch 0:42:00.360 --> 0:42:04.680 and to trade the shares. Coinbase, for example, which is 0:42:04.719 --> 0:42:08.000 the custodian provider for a lot of these pecoin ETF 0:42:08.040 --> 0:42:11.920 issuers told us last week that they're operationalready. Once they 0:42:11.920 --> 0:42:13.960 get the green light, they are able to handle the 0:42:14.080 --> 0:42:15.080 volume and the trades. 0:42:15.800 --> 0:42:16.439 So we'll see. 0:42:16.680 --> 0:42:20.080 It seems like everybody is preparing as if they will 0:42:20.120 --> 0:42:23.040 be able to get approval. But then we'll get to 0:42:23.080 --> 0:42:26.560 see how much trading or how much buying eventually it 0:42:26.560 --> 0:42:28.160 will contribute to Bitcoin. 0:42:28.719 --> 0:42:30.880 And just as I know, my husband is a senior 0:42:31.160 --> 0:42:34.000 manager over there at Coinbase. But meanwhile, Hiang, we thank 0:42:34.040 --> 0:42:36.040 you so much for all the details. We brace ourselves. 0:42:36.040 --> 0:42:38.000 That's going to be busy for the next couple of 0:42:38.080 --> 0:42:40.600 days for her and indeed anyone who's out there in 0:42:40.640 --> 0:42:43.359 the world of crypto and interestingly and of course now 0:42:43.400 --> 0:42:44.960 that does it for our first edition of lue Meg 0:42:44.960 --> 0:42:46.160 Technology twenty twenty four. 0:42:46.880 --> 0:42:49.080 Yeah, one day into the new year. I'm not going 0:42:49.120 --> 0:42:51.400 to say what the story of the year is because 0:42:51.440 --> 0:42:53.560 after twenty twenty three you just wouldn't. 0:42:53.160 --> 0:42:55.200 Take that risk. Recap on the podcast. 0:42:55.239 --> 0:42:57.640 Thank you to listening on apples, Spotify and on the 0:42:57.640 --> 0:42:59.880 Bloomberg platforms from New York and SF. 0:43:00.280 --> 0:43:01.600 This is Bloomberg Technology.