1 00:00:13,680 --> 00:00:16,280 Speaker 1: I'm Caroline Hana Blue Mugs World headquarters in New York 2 00:00:16,840 --> 00:00:19,360 Speaker 1: and Mad Love though in San Francisco. This is bloom 3 00:00:19,360 --> 00:00:22,720 Speaker 1: Bug Technology. Coming up this hour, the FTC is front 4 00:00:22,720 --> 00:00:27,080 Speaker 1: and center. Federal regulators looking to block Microsoft's sixty billion 5 00:00:27,080 --> 00:00:29,920 Speaker 1: dollar acquisition of Activision Blizzard, saying the tie up between 6 00:00:29,920 --> 00:00:34,280 Speaker 1: the Xbox maker and the game publisher would harm competition. Plus, 7 00:00:34,320 --> 00:00:37,839 Speaker 1: the FTC has opened its campaign to block Metters acquisition 8 00:00:38,080 --> 00:00:40,880 Speaker 1: of a virtual reality company. We had the story straight 9 00:00:41,120 --> 00:00:44,400 Speaker 1: from the San Jose Federal courtroom, and Russia builds on 10 00:00:44,440 --> 00:00:47,280 Speaker 1: Elon Musk and his bankers. That's as they consider providing 11 00:00:47,360 --> 00:00:50,320 Speaker 1: him with new margin loans backed by Tesla Stock to 12 00:00:50,360 --> 00:00:54,000 Speaker 1: replace the riskiest Twitter debt. We've got details of that later. 13 00:00:54,400 --> 00:00:57,120 Speaker 1: But first the FTC did what we thought the FTC 14 00:00:57,280 --> 00:01:01,160 Speaker 1: might do. They've stuck to the promise they're going tougher 15 00:01:01,440 --> 00:01:03,240 Speaker 1: on Big M and A, particularly in the text space. 16 00:01:03,320 --> 00:01:05,640 Speaker 1: Lena Carna Coles promised that and she follows through. And 17 00:01:05,760 --> 00:01:08,000 Speaker 1: let's dig into all of this in d C. I 18 00:01:08,040 --> 00:01:09,360 Speaker 1: want to follow the news. You want to get to 19 00:01:09,400 --> 00:01:11,080 Speaker 1: where the regulators are looking to block that. So it's 20 00:01:11,080 --> 00:01:13,640 Speaker 1: seen nine billion dollar deal and of course, it's all 21 00:01:13,680 --> 00:01:16,000 Speaker 1: about a question of competition, whether or not it would 22 00:01:16,040 --> 00:01:18,680 Speaker 1: be harmed by this deal. Lea. Nilan has been breaking this. 23 00:01:18,800 --> 00:01:21,480 Speaker 1: You had the scoop Leah and back before we got 24 00:01:21,520 --> 00:01:24,600 Speaker 1: the announcement from the FTC. Just talk to us about 25 00:01:24,640 --> 00:01:28,479 Speaker 1: the reasoning behind this decision. Yeah, it's really interesting. I mean, 26 00:01:28,600 --> 00:01:31,039 Speaker 1: a lot of the focus in the Microsoft Activision deal 27 00:01:31,120 --> 00:01:34,160 Speaker 1: has been on the console market, but the FTC said 28 00:01:34,200 --> 00:01:37,039 Speaker 1: that it's actually not as worried about the console market 29 00:01:37,120 --> 00:01:40,080 Speaker 1: as it is about where gaming might be going in 30 00:01:40,120 --> 00:01:43,760 Speaker 1: the future, which is into subscriptions and the cloud. UM. 31 00:01:43,800 --> 00:01:45,720 Speaker 1: And they said that's a major reason why they have 32 00:01:45,800 --> 00:01:49,600 Speaker 1: concerns about this deal is acquiring Activision is going to 33 00:01:49,640 --> 00:01:53,360 Speaker 1: give Microsoft a great library of games that will give 34 00:01:53,360 --> 00:01:55,760 Speaker 1: it sort of an insurmountable lead in these two sort 35 00:01:55,800 --> 00:01:59,080 Speaker 1: of emerging markets. UM. Given that Microsoft also already has 36 00:01:59,120 --> 00:02:03,279 Speaker 1: some advantages with its you know, cloud based um cloud 37 00:02:03,280 --> 00:02:05,800 Speaker 1: based service, making it a little bit cheaper for it 38 00:02:05,880 --> 00:02:08,640 Speaker 1: than other gaming companies to offer this kind of a service. 39 00:02:09,520 --> 00:02:12,280 Speaker 1: And yet, and yet Microsoft had been trying to get 40 00:02:12,320 --> 00:02:14,440 Speaker 1: ahead of this, been trying to do deals a decade 41 00:02:14,480 --> 00:02:17,160 Speaker 1: deal done of course just yesterday with Nintendo for access 42 00:02:17,200 --> 00:02:20,160 Speaker 1: to cool of duty. UM. We understand that they sat 43 00:02:20,160 --> 00:02:22,760 Speaker 1: down with Lena Khan yesterday to trying to explain the reasoning. 44 00:02:22,760 --> 00:02:27,520 Speaker 1: It seemingly hasn't landed. No. I mean, the FTC, particularly 45 00:02:27,600 --> 00:02:30,120 Speaker 1: under Lena Khan, has been very, very worried about the 46 00:02:30,160 --> 00:02:32,480 Speaker 1: sort of deals that the tech giants are doing. As 47 00:02:32,480 --> 00:02:35,600 Speaker 1: you mentioned, you know, today the FTC started its lawsuit 48 00:02:35,680 --> 00:02:40,799 Speaker 1: against Meta over the acquisition of a virtual reality startup. UM. 49 00:02:40,840 --> 00:02:43,799 Speaker 1: You know, the Microsoft folks came to d C. They 50 00:02:43,800 --> 00:02:46,000 Speaker 1: had offered a lot of concessions, I mean, not just 51 00:02:46,480 --> 00:02:48,880 Speaker 1: these ten year deals with the other console makers. They 52 00:02:48,919 --> 00:02:52,840 Speaker 1: had reached an agreement with the Communication Workers of America 53 00:02:53,000 --> 00:02:56,760 Speaker 1: to offer labor neutrality if any of the gaming studios 54 00:02:56,840 --> 00:03:00,640 Speaker 1: wanted to unionize, which they thought, you know, FTC would 55 00:03:00,639 --> 00:03:04,320 Speaker 1: look kindly upon. Um. They had also offered some uh 56 00:03:04,760 --> 00:03:07,919 Speaker 1: conditions related to employment noncompetes that they thought that FTC 57 00:03:08,040 --> 00:03:10,200 Speaker 1: would like, and that was not quite enough to do 58 00:03:10,240 --> 00:03:13,880 Speaker 1: it for in the end. I guess Leah, those conditions 59 00:03:14,080 --> 00:03:17,880 Speaker 1: or offers that Microsoft made are academic, right, they weren't enough. 60 00:03:17,960 --> 00:03:20,680 Speaker 1: What's the timeline from this point? Just because the FTC 61 00:03:21,080 --> 00:03:23,240 Speaker 1: has voted in this direction, it doesn't mean the deal 62 00:03:23,320 --> 00:03:27,080 Speaker 1: is dead. No, No, this is UM. They voted for 63 00:03:27,200 --> 00:03:30,840 Speaker 1: an administrative complaint. That means that from here it goes 64 00:03:30,960 --> 00:03:34,000 Speaker 1: to a trial within the FTC before the FTC's in 65 00:03:34,080 --> 00:03:38,280 Speaker 1: house UM administrative law judge. That sort of a process 66 00:03:38,560 --> 00:03:40,560 Speaker 1: is going to take several months. You know, probably we 67 00:03:40,600 --> 00:03:45,120 Speaker 1: would not have a decision, an initial decision, until next summer, 68 00:03:45,240 --> 00:03:48,080 Speaker 1: next fall, UM. And from there, you know, Microsoft can 69 00:03:48,120 --> 00:03:50,880 Speaker 1: still appeal several times. So this is by no means 70 00:03:50,960 --> 00:03:53,960 Speaker 1: the end. And Microsoft says it intends to litigate UM 71 00:03:54,000 --> 00:03:56,800 Speaker 1: there is this is not the only regulatory approval they need. 72 00:03:56,840 --> 00:03:59,800 Speaker 1: They still need approval in the UK and also in 73 00:03:59,840 --> 00:04:02,880 Speaker 1: the EU are the two main other ones, and UM, 74 00:04:02,960 --> 00:04:05,400 Speaker 1: neither of those jurisdictions we're going to make a ruling 75 00:04:05,480 --> 00:04:08,000 Speaker 1: on on this deal until at least the spring March 76 00:04:08,080 --> 00:04:11,520 Speaker 1: or April. So Microsoft is still going to keep forward 77 00:04:11,720 --> 00:04:14,840 Speaker 1: with moving towards regulatory approval there as it tries to 78 00:04:14,880 --> 00:04:17,640 Speaker 1: litigate here in the US. I kind of love this 79 00:04:17,680 --> 00:04:21,839 Speaker 1: story because there's a process that happens, but there's also 80 00:04:21,920 --> 00:04:25,480 Speaker 1: fighting talk. I saw headlines crossing the Bloomberg from Activision CEO, 81 00:04:25,640 --> 00:04:29,719 Speaker 1: for example, what is their public position the companies about 82 00:04:29,720 --> 00:04:33,000 Speaker 1: what they want out this. Yeah, I mean both companies 83 00:04:33,040 --> 00:04:35,279 Speaker 1: have said, we want this deal to close. We want 84 00:04:35,279 --> 00:04:37,680 Speaker 1: this deal. We think it's good for consumers because it 85 00:04:37,720 --> 00:04:41,120 Speaker 1: expands access to gaming UM in ways that they wouldn't 86 00:04:41,160 --> 00:04:46,040 Speaker 1: have now through these cloud and subscription based products UM. 87 00:04:46,160 --> 00:04:48,599 Speaker 1: Right now, Activision does not have any its games on 88 00:04:48,640 --> 00:04:52,880 Speaker 1: any of these subscription uh subscription based products, and you know, 89 00:04:53,120 --> 00:04:57,960 Speaker 1: so obviously this would expand access UM and both of 90 00:04:58,000 --> 00:05:00,560 Speaker 1: them say that they are committed to fighting. Now. You know, 91 00:05:00,680 --> 00:05:04,120 Speaker 1: the deadline for the deal isn't until next summer, so 92 00:05:04,160 --> 00:05:06,359 Speaker 1: they'll probably have to look at it extending it because 93 00:05:06,360 --> 00:05:09,440 Speaker 1: of the length of the FTC's process, but you know 94 00:05:10,120 --> 00:05:14,200 Speaker 1: they might be willing to do that. Bloomberg's lead Nylon 95 00:05:14,320 --> 00:05:17,720 Speaker 1: Carrol said it fantastic reporting. Thank you. All right, let's 96 00:05:17,720 --> 00:05:20,839 Speaker 1: move on to San Jose, where federal regulators are opening 97 00:05:20,839 --> 00:05:24,839 Speaker 1: their campaign to block Metas acquisition of the virtual reality 98 00:05:24,920 --> 00:05:28,640 Speaker 1: company within Bloomberg's Alex Brinka is down at the courthouse. 99 00:05:28,680 --> 00:05:31,599 Speaker 1: She's been there all day long. What was the story 100 00:05:31,640 --> 00:05:36,039 Speaker 1: of the day and how did things play out? Yeah, 101 00:05:36,040 --> 00:05:39,080 Speaker 1: so they started opening statements. Witnesses are starting right now, 102 00:05:39,120 --> 00:05:40,920 Speaker 1: and the big story of the day is the FDC 103 00:05:41,080 --> 00:05:44,880 Speaker 1: is trying to kind of push this novel argument uphill 104 00:05:44,960 --> 00:05:48,599 Speaker 1: to prove that this deal could hurt future competition in 105 00:05:48,640 --> 00:05:52,400 Speaker 1: the virtuality fitness space. You're just talking about the Microsoft 106 00:05:52,400 --> 00:05:56,200 Speaker 1: activision also looking at future competition. This is kind of 107 00:05:56,200 --> 00:06:00,520 Speaker 1: a torch that FDC chair Um has been taking saying, Look, 108 00:06:00,760 --> 00:06:04,920 Speaker 1: we need to get the regulations um right now before 109 00:06:04,960 --> 00:06:07,480 Speaker 1: a company has a monopoly. So they tried to make 110 00:06:07,520 --> 00:06:10,600 Speaker 1: that argument. The FDC also laid out some really interesting 111 00:06:10,600 --> 00:06:15,560 Speaker 1: evidence showing their case Um that Meta has been was 112 00:06:15,680 --> 00:06:20,200 Speaker 1: building a VR fitness app internally and they scrapped that. Actually, 113 00:06:20,200 --> 00:06:22,920 Speaker 1: when Apple had some interest in the company they ended 114 00:06:22,960 --> 00:06:26,440 Speaker 1: up acquiring, they scrapped that instead to acquire the company 115 00:06:26,480 --> 00:06:29,720 Speaker 1: called Within, and in doing so, they basically took a 116 00:06:29,720 --> 00:06:34,320 Speaker 1: potential future rival, that internal potential UM app that Meta 117 00:06:34,320 --> 00:06:37,200 Speaker 1: would build off the table, and that's what hurt competition. 118 00:06:37,279 --> 00:06:40,240 Speaker 1: So some back and forth there on both sides in 119 00:06:40,360 --> 00:06:43,440 Speaker 1: terms of what the two litigants are pushing for. Talk 120 00:06:43,520 --> 00:06:46,240 Speaker 1: to us about the back and forth from metas perspective, 121 00:06:46,480 --> 00:06:48,359 Speaker 1: how are they trying to argue that, look, they weren't 122 00:06:48,360 --> 00:06:54,760 Speaker 1: actually building something internally. Uh, there was charts and there 123 00:06:54,760 --> 00:06:57,119 Speaker 1: were words. They basically threw up an organ chart saying, 124 00:06:57,120 --> 00:06:59,880 Speaker 1: look from Mark Zuckerberg all the way down the chain, 125 00:07:00,240 --> 00:07:02,760 Speaker 1: it was a no at every step In terms of 126 00:07:02,800 --> 00:07:05,520 Speaker 1: the effort to build this internally. It was only a 127 00:07:05,560 --> 00:07:08,479 Speaker 1: brainstorming exercise. And then they realized that actually building this 128 00:07:08,520 --> 00:07:11,080 Speaker 1: app internally there were too many obstacles. It was too 129 00:07:11,080 --> 00:07:13,000 Speaker 1: hard to do, so the best course of action was 130 00:07:13,040 --> 00:07:16,120 Speaker 1: to go out and acquire. We also heard metas Council 131 00:07:16,200 --> 00:07:19,679 Speaker 1: more Hanson come out and say, look, this this nascent 132 00:07:19,720 --> 00:07:22,680 Speaker 1: competition argument the FTC is making. They think that they 133 00:07:22,720 --> 00:07:24,520 Speaker 1: have no evidence here and that it could have a 134 00:07:24,600 --> 00:07:28,200 Speaker 1: chilling effect on any vertical deals in the future because 135 00:07:28,200 --> 00:07:30,960 Speaker 1: companies might be afraid to go out and buy companies 136 00:07:31,000 --> 00:07:34,280 Speaker 1: they don't compete with just because they're big, because the 137 00:07:34,320 --> 00:07:38,000 Speaker 1: FDC might then get involved. So some real pushback. They're saying, look, 138 00:07:38,200 --> 00:07:40,760 Speaker 1: the core of of the FTCs argument is not true 139 00:07:40,960 --> 00:07:42,880 Speaker 1: in terms of what they layout over the next eight days. 140 00:07:42,920 --> 00:07:44,840 Speaker 1: I think that's so important that you really bring the 141 00:07:44,920 --> 00:07:48,760 Speaker 1: context more broadly here, Alex, because this isn't just also 142 00:07:48,960 --> 00:07:52,760 Speaker 1: about the nacency of this particular type of technology, but 143 00:07:52,840 --> 00:07:56,160 Speaker 1: also the nacency of Meta zone pivot into the Meta BHUs. 144 00:07:56,280 --> 00:07:57,600 Speaker 1: What does it mean for them the fact that they 145 00:07:57,600 --> 00:07:59,800 Speaker 1: pegged everything on this space and then being stopped from 146 00:07:59,800 --> 00:08:04,120 Speaker 1: doing in organic growth in it, and Met as a 147 00:08:04,160 --> 00:08:06,920 Speaker 1: company who has pushed into new spaces through acquisition. We 148 00:08:06,920 --> 00:08:09,280 Speaker 1: saw that with Instagram, we saw that with with WhatsApp, 149 00:08:09,440 --> 00:08:12,160 Speaker 1: So you can imagine that them going out inquiring an 150 00:08:12,160 --> 00:08:14,640 Speaker 1: app like this is meant to layer on top of 151 00:08:14,720 --> 00:08:18,520 Speaker 1: their oculus, which was also an active position headset to 152 00:08:18,600 --> 00:08:20,880 Speaker 1: move into this space. They are a year in to 153 00:08:21,000 --> 00:08:24,160 Speaker 1: being renamed Meta after the Metaverse, which is the virtual 154 00:08:24,200 --> 00:08:26,880 Speaker 1: reality world that they're working on building. It is a 155 00:08:26,880 --> 00:08:30,560 Speaker 1: strategy that Mark Zuckerberg has caught a lot of detractors 156 00:08:30,640 --> 00:08:33,360 Speaker 1: UM coming his way. The stock is way down because 157 00:08:33,360 --> 00:08:35,640 Speaker 1: of the money they're pouring into this, so this kind 158 00:08:35,679 --> 00:08:38,199 Speaker 1: of test for them in this court. They say, if 159 00:08:38,200 --> 00:08:40,880 Speaker 1: the judge blocks this, if they award the injunction, they're 160 00:08:40,880 --> 00:08:43,880 Speaker 1: gonna walk away from this transaction. So pretty high stakes 161 00:08:43,920 --> 00:08:46,040 Speaker 1: here for Meta in terms of what they're trying to 162 00:08:46,080 --> 00:08:48,280 Speaker 1: build in virtual reality, which they say is not only 163 00:08:48,280 --> 00:08:51,880 Speaker 1: the future of Meta, but the future of computing in general. 164 00:08:52,240 --> 00:08:55,160 Speaker 1: UM in the next generation of the computing era and 165 00:08:55,280 --> 00:08:57,120 Speaker 1: exploring care. It has been so good to have you 166 00:08:57,160 --> 00:08:58,760 Speaker 1: on the ground there in San Jose. We thank you 167 00:08:58,840 --> 00:09:01,120 Speaker 1: so much. And and we've got to break it down. 168 00:09:01,240 --> 00:09:04,559 Speaker 1: We've got to go throughout the FTCs focus on M 169 00:09:04,640 --> 00:09:06,360 Speaker 1: and A. And we can do that with the perfect guest, 170 00:09:06,360 --> 00:09:09,800 Speaker 1: American Antrtrust Institute President Diana Moss down in d C, 171 00:09:10,360 --> 00:09:14,960 Speaker 1: Diana today just is emblematic of what currently it feels 172 00:09:14,960 --> 00:09:18,160 Speaker 1: like the administration's focus on M and A, particularly within technology. 173 00:09:18,200 --> 00:09:21,400 Speaker 1: We shouldn't be surprised, Nakanist did us this direction. What 174 00:09:21,440 --> 00:09:23,199 Speaker 1: do you make of the doubling down from the FTC 175 00:09:23,320 --> 00:09:27,000 Speaker 1: at the moment, I think this is very much in 176 00:09:27,480 --> 00:09:32,720 Speaker 1: keeping with the chairs promises, UH and the Assistant Attorney 177 00:09:32,760 --> 00:09:35,400 Speaker 1: General's promises to really take a hard look at the 178 00:09:35,400 --> 00:09:38,640 Speaker 1: digital sector. And for good reason. You know, the digital 179 00:09:38,679 --> 00:09:43,600 Speaker 1: sector is um has grown dramatically in the last twenty years. UH. 180 00:09:43,720 --> 00:09:46,959 Speaker 1: They are coming off an acquisition spree that peaked in 181 00:09:47,040 --> 00:09:51,640 Speaker 1: about It is absolutely a growth by acquisition model as 182 00:09:51,679 --> 00:09:55,720 Speaker 1: opposed to a in our get a do it yourself model. 183 00:09:55,800 --> 00:09:58,880 Speaker 1: It's sort of the buyer build question. So with the 184 00:09:58,920 --> 00:10:02,200 Speaker 1: digital business ecosystems that is the name of the game. 185 00:10:02,280 --> 00:10:06,360 Speaker 1: It is to acquire and grow largely through ocquisition, and 186 00:10:06,440 --> 00:10:10,560 Speaker 1: both the Microsoft Activision and the Metal within are really 187 00:10:10,600 --> 00:10:14,920 Speaker 1: really good leading examples of this growth by acquisition strategy 188 00:10:15,120 --> 00:10:19,000 Speaker 1: and the competition problems that they raised because they are 189 00:10:19,720 --> 00:10:26,840 Speaker 1: very large companies with dominant positions. Diana, that word competition, 190 00:10:27,800 --> 00:10:31,400 Speaker 1: That's the bit that I think consumers, investors struggle to 191 00:10:31,440 --> 00:10:35,719 Speaker 1: understand or at least struggle to sympathize with the FTC with, Right, 192 00:10:35,800 --> 00:10:39,679 Speaker 1: Is the FTC doing this because it wants to foster competition? 193 00:10:39,720 --> 00:10:42,640 Speaker 1: In other words, have many players in the metaverse, which, 194 00:10:42,720 --> 00:10:45,480 Speaker 1: let's be honest, isn't a real thing yet, or they 195 00:10:45,520 --> 00:10:48,600 Speaker 1: want to prevent monopolies or is it the same idea? 196 00:10:49,840 --> 00:10:53,079 Speaker 1: I think it's they're the same idea, right. The antitrust 197 00:10:53,120 --> 00:10:55,800 Speaker 1: laws in the United States are designed to promote and 198 00:10:55,840 --> 00:10:59,719 Speaker 1: preserve and protect competition for the benefit of consumers and 199 00:11:00,000 --> 00:11:03,160 Speaker 1: workers and smaller businesses that might be trying to get 200 00:11:03,160 --> 00:11:07,040 Speaker 1: a foothold in markets or expand in markets. Um of course, 201 00:11:07,400 --> 00:11:10,920 Speaker 1: that rationale, which is very consumer facing and worker facing 202 00:11:10,960 --> 00:11:14,680 Speaker 1: and smaller business facing, can run up against rationales for 203 00:11:14,760 --> 00:11:19,160 Speaker 1: why companies might need think they need to be bigger, 204 00:11:19,200 --> 00:11:22,480 Speaker 1: to innovate more or innovate more quickly, and be more 205 00:11:22,559 --> 00:11:26,400 Speaker 1: dynamic to ultimately bring new products to market and serve 206 00:11:26,480 --> 00:11:29,960 Speaker 1: consumer demands. So there is a very strong tension there. 207 00:11:30,120 --> 00:11:33,520 Speaker 1: But in the digital sector, I think the balances have tipped, 208 00:11:34,160 --> 00:11:37,000 Speaker 1: as we've seen in these two cases, but also UH 209 00:11:37,040 --> 00:11:40,480 Speaker 1: the d o j's case in Google, the FTCs case 210 00:11:40,520 --> 00:11:44,720 Speaker 1: in in Facebook, and and several state cases that uh, 211 00:11:44,760 --> 00:11:47,920 Speaker 1: there is a significant dominance problem in in some of 212 00:11:47,960 --> 00:11:51,960 Speaker 1: the leading digital tech players and that competition really needs 213 00:11:52,000 --> 00:11:54,560 Speaker 1: to be scrutinized very carefully. And M and A of 214 00:11:54,600 --> 00:11:59,839 Speaker 1: course is one of the leading ways that these companies grow. DIN. 215 00:12:00,080 --> 00:12:02,840 Speaker 1: Do you have any sympathy for within in this in 216 00:12:02,880 --> 00:12:06,720 Speaker 1: this instance would matter in the startup within? You know, 217 00:12:06,800 --> 00:12:09,800 Speaker 1: one thing we've learned is, of course that the metaverse 218 00:12:09,920 --> 00:12:14,800 Speaker 1: is a nascent idea. It needs capital, access to talent 219 00:12:14,920 --> 00:12:19,000 Speaker 1: to grow and to continue. You worried that there would 220 00:12:19,040 --> 00:12:22,520 Speaker 1: be an over stifling of innovation if bigger tech companies 221 00:12:22,559 --> 00:12:28,720 Speaker 1: aren't allowed to go out and acquire smaller companies. So 222 00:12:28,800 --> 00:12:31,560 Speaker 1: that's a that's a really good question, and it comes 223 00:12:31,640 --> 00:12:35,360 Speaker 1: up a lot in like discourse. UM, but what is 224 00:12:35,400 --> 00:12:40,240 Speaker 1: the better pathway to innovation. Is it to encourage competition 225 00:12:40,360 --> 00:12:44,360 Speaker 1: by smaller rivals, independent market players, and have them grow 226 00:12:44,920 --> 00:12:49,000 Speaker 1: into significant market players that could then challenge these incumbent 227 00:12:49,120 --> 00:12:52,719 Speaker 1: companies right the large digital text um? Or is it 228 00:12:52,760 --> 00:12:55,800 Speaker 1: and we do that through promoting antitrust enforcement? Or is 229 00:12:55,840 --> 00:13:01,000 Speaker 1: it to provide a pipeline or a feed of these 230 00:13:01,000 --> 00:13:05,199 Speaker 1: startups and smaller companies into the big digital ecosystems knowing 231 00:13:05,240 --> 00:13:08,640 Speaker 1: that they will be acquired and uh and claiming that 232 00:13:08,640 --> 00:13:12,880 Speaker 1: that somehow will increase the ability of companies to increase innovation. 233 00:13:13,240 --> 00:13:16,760 Speaker 1: There's a real tension there. Um. But again I think 234 00:13:16,800 --> 00:13:19,640 Speaker 1: the balances have tipped. And and for example, in the 235 00:13:19,720 --> 00:13:24,720 Speaker 1: meadow Within case, the purchase of Within, which has this 236 00:13:25,240 --> 00:13:29,880 Speaker 1: leading VR fitness app supernatural um takes out a really 237 00:13:29,880 --> 00:13:33,160 Speaker 1: important source of competition in a market that is all 238 00:13:33,280 --> 00:13:36,240 Speaker 1: that that already does not have very much competition. So 239 00:13:36,280 --> 00:13:39,199 Speaker 1: we worry about that when you eliminate competition in an 240 00:13:39,240 --> 00:13:44,720 Speaker 1: already concentrated market. In the Microsoft Activision case, that also 241 00:13:45,040 --> 00:13:49,040 Speaker 1: that acquisition also eliminates important competition on the outside of 242 00:13:49,080 --> 00:13:53,640 Speaker 1: a digital business ecosystem, and we worry about those acquisitions 243 00:13:53,640 --> 00:13:56,719 Speaker 1: when there isn't already a lot of competitions. So if 244 00:13:56,720 --> 00:14:00,520 Speaker 1: you're in the camp where competition serves the interests of innovation, 245 00:14:00,720 --> 00:14:02,720 Speaker 1: or in the other camp, which is we need big 246 00:14:02,760 --> 00:14:06,679 Speaker 1: companies to acquire smaller companies to continue to innovate, that 247 00:14:06,720 --> 00:14:09,960 Speaker 1: really frames out the debate. It's also an interesting debate 248 00:14:10,080 --> 00:14:12,520 Speaker 1: to be having as we head towards basically a real 249 00:14:12,559 --> 00:14:15,559 Speaker 1: pullback already upon us in terms of VC funding, real 250 00:14:15,600 --> 00:14:17,800 Speaker 1: pullback in terms of the free money that we're also 251 00:14:17,920 --> 00:14:21,720 Speaker 1: used to. And I'm wondering what ways do we tend 252 00:14:21,760 --> 00:14:24,920 Speaker 1: to see big companies that are sitting on a ton 253 00:14:24,960 --> 00:14:27,760 Speaker 1: of cash be able to foster innovation in the space 254 00:14:27,800 --> 00:14:30,000 Speaker 1: they want to see grow if it isn't just by 255 00:14:30,160 --> 00:14:33,960 Speaker 1: trying to do deals and actually acquire them out right right, 256 00:14:34,080 --> 00:14:38,000 Speaker 1: the very good question, and again the growth by acquisition 257 00:14:38,040 --> 00:14:42,000 Speaker 1: model really serves as a as a funnel for a 258 00:14:42,040 --> 00:14:44,720 Speaker 1: lot of a lot of the free cash that companies have. 259 00:14:45,000 --> 00:14:46,960 Speaker 1: But I think you have to look a little bit 260 00:14:47,000 --> 00:14:50,120 Speaker 1: deeper at the culture of the companies, at the way 261 00:14:50,160 --> 00:14:53,920 Speaker 1: the digital ecosystems are structured with with a platform with 262 00:14:54,040 --> 00:14:57,120 Speaker 1: lots of cloud technology, where we've seen lots of acquisitions 263 00:14:57,120 --> 00:15:00,440 Speaker 1: in the last many years, but also these constellation of 264 00:15:00,640 --> 00:15:04,600 Speaker 1: apps that exists in the ecosystem. That's a complex business 265 00:15:04,640 --> 00:15:08,080 Speaker 1: model and it's the value proposition, and it's really supercharged. 266 00:15:08,160 --> 00:15:11,520 Speaker 1: So if you have market power in a platform or 267 00:15:11,520 --> 00:15:15,239 Speaker 1: in cloud technology, all of those pieces of the ecosystem 268 00:15:15,280 --> 00:15:20,240 Speaker 1: work together where where um um uh market power can 269 00:15:20,280 --> 00:15:24,880 Speaker 1: be leveraged throughout the ecosystem. And so that complicates the 270 00:15:24,920 --> 00:15:28,320 Speaker 1: innovation story as well. And in fact, my charge supercharge 271 00:15:28,360 --> 00:15:33,080 Speaker 1: incentives to buy smaller rivals because by buying a new 272 00:15:33,120 --> 00:15:37,840 Speaker 1: application like a like gaming content or VR app content, 273 00:15:38,240 --> 00:15:42,400 Speaker 1: fitness app content, you're able then to connect that content 274 00:15:42,560 --> 00:15:47,600 Speaker 1: to um to the platform a platform, and to supercharge 275 00:15:47,640 --> 00:15:50,960 Speaker 1: it with value with cloud technology. So it's a very 276 00:15:51,040 --> 00:15:56,080 Speaker 1: complex business proposition. It's a value proposition, but also poses 277 00:15:56,160 --> 00:16:01,600 Speaker 1: really complicated problem strand I trust enforcers in crafting complaints. 278 00:16:01,600 --> 00:16:04,040 Speaker 1: But the ultimate concern, I'm sure as you know, is 279 00:16:04,080 --> 00:16:07,000 Speaker 1: that all of all of this gets locked up in 280 00:16:07,040 --> 00:16:10,160 Speaker 1: a single ecosystem, which makes it very difficult for for 281 00:16:10,240 --> 00:16:13,400 Speaker 1: small arrivals to get into those markets. I think, Diana, 282 00:16:13,440 --> 00:16:16,600 Speaker 1: we're just starting this conversation and will certainly continue it 283 00:16:16,640 --> 00:16:18,600 Speaker 1: in the weeks and months to come. American Anti Trust 284 00:16:18,680 --> 00:16:23,000 Speaker 1: Institute President Diana Moss, thank you coming up. Elon Musk 285 00:16:23,160 --> 00:16:25,800 Speaker 1: under pressure as bankers struggle to find buyers for the 286 00:16:25,800 --> 00:16:28,560 Speaker 1: Twitter debt used for the purchase of the company after 287 00:16:28,600 --> 00:16:32,600 Speaker 1: the billionaire promised to turn around its finances. This is Bloomberg, 288 00:16:41,960 --> 00:16:44,880 Speaker 1: So Elon Musk's bankers and considering replacing some of the 289 00:16:44,960 --> 00:16:47,800 Speaker 1: riskiest and level the costliest debt that he led on 290 00:16:47,800 --> 00:16:51,320 Speaker 1: Twitter with new margin loans back by Tesla stock that 291 00:16:51,360 --> 00:16:55,240 Speaker 1: he'd personally be responsible for repaying. Is actually but one 292 00:16:55,280 --> 00:16:59,160 Speaker 1: of three pretty big bloomberg scoop surrounding Tesla today and Ed, 293 00:16:59,240 --> 00:17:01,280 Speaker 1: as always, you were behind a couple of them. Just 294 00:17:01,360 --> 00:17:04,000 Speaker 1: run us through some of the other stories that play 295 00:17:04,040 --> 00:17:05,960 Speaker 1: when it comes to you. Yeah, I mean the debt 296 00:17:05,960 --> 00:17:08,679 Speaker 1: burdens important, right, one point two billion dollars of payments 297 00:17:08,680 --> 00:17:10,480 Speaker 1: and least they something had to give there. The other 298 00:17:10,520 --> 00:17:13,879 Speaker 1: two are the testers cutting production as in Shanghai, so 299 00:17:13,960 --> 00:17:16,920 Speaker 1: the market's a bit worried about demand in China, which 300 00:17:16,960 --> 00:17:19,199 Speaker 1: is the biggest TV market currently and the second. As 301 00:17:19,240 --> 00:17:22,639 Speaker 1: we reported, the China chief at Tessa has moved to 302 00:17:22,680 --> 00:17:24,840 Speaker 1: Austin to kind of get things going there, which is 303 00:17:25,119 --> 00:17:27,640 Speaker 1: a really interesting time when everyone's questioning what is Elon 304 00:17:27,720 --> 00:17:30,840 Speaker 1: Musk doing any given day with which company? Yeah, and 305 00:17:31,080 --> 00:17:34,160 Speaker 1: rumors swirl as to his leadership at all these various companies. 306 00:17:34,160 --> 00:17:36,320 Speaker 1: And we want to get back to the reason that 307 00:17:36,359 --> 00:17:38,760 Speaker 1: people think is distracted, which of course is Twitter. And 308 00:17:38,840 --> 00:17:41,280 Speaker 1: Shini Vassa was one of the by lines on this 309 00:17:41,560 --> 00:17:44,040 Speaker 1: scoop that came out last night and just has continued 310 00:17:44,080 --> 00:17:47,720 Speaker 1: to fascinate us today of the debt. Talk to us 311 00:17:47,760 --> 00:17:50,679 Speaker 1: a little bit about how much pressure this shows that 312 00:17:50,760 --> 00:17:52,560 Speaker 1: all of them are under at the moment. Listen, the 313 00:17:52,720 --> 00:17:55,480 Speaker 1: unsecured part of this debt is the part that the 314 00:17:55,480 --> 00:17:57,879 Speaker 1: banks are most worried about. They had promising interest rate 315 00:17:57,920 --> 00:18:01,160 Speaker 1: of eleven point seven per cent, and we know that 316 00:18:01,320 --> 00:18:04,280 Speaker 1: junkie debt, risky debt, junk debt here has really gotten 317 00:18:04,359 --> 00:18:07,199 Speaker 1: much more expensive for the banks to be carrying, so 318 00:18:07,240 --> 00:18:10,600 Speaker 1: they could take real losses here because of that promised 319 00:18:10,760 --> 00:18:14,480 Speaker 1: rate there. Remember, there's a benefit here potentially, and this 320 00:18:14,560 --> 00:18:16,720 Speaker 1: is just a discussion that the bankers are really having 321 00:18:16,760 --> 00:18:19,280 Speaker 1: here four musques to be doing this, and that one 322 00:18:19,320 --> 00:18:22,680 Speaker 1: benefit would be to really start to lower that burden 323 00:18:22,880 --> 00:18:25,679 Speaker 1: of that one point two billion dollars worth of interest payments. 324 00:18:25,680 --> 00:18:28,800 Speaker 1: He would have to make Twitter revenue right even that 325 00:18:29,000 --> 00:18:31,600 Speaker 1: last year. Absolutely, So you know, if you're paying more 326 00:18:31,640 --> 00:18:34,200 Speaker 1: than you're essentially making, it is a very difficult burden 327 00:18:34,200 --> 00:18:35,679 Speaker 1: to be taking on as you're trying to turn the 328 00:18:35,680 --> 00:18:38,480 Speaker 1: ship around. Now, I want to like shadow this a 329 00:18:38,480 --> 00:18:41,119 Speaker 1: little bit with the scuttle butt that's going on in 330 00:18:41,280 --> 00:18:44,280 Speaker 1: Wall Street right now. Why this matters so much because 331 00:18:44,359 --> 00:18:46,320 Speaker 1: as the banks trying to offload this debt, you have 332 00:18:46,359 --> 00:18:49,320 Speaker 1: the by side really negotiating just so hard to bring 333 00:18:49,359 --> 00:18:51,679 Speaker 1: the cost of that debt down because a lot of 334 00:18:51,800 --> 00:18:54,760 Speaker 1: big firms would love to be buying this debt cheaply 335 00:18:55,119 --> 00:18:57,959 Speaker 1: sixty cents on the dollar maybe last the banks are like, 336 00:18:58,160 --> 00:19:02,439 Speaker 1: no way, is that happening in our lifetimes hopefully, but 337 00:19:02,640 --> 00:19:04,040 Speaker 1: because if they did that, they would have to take 338 00:19:04,000 --> 00:19:06,640 Speaker 1: bigger and bigger losses. But the negotiation, if they were 339 00:19:06,720 --> 00:19:10,600 Speaker 1: to sell this debt below par, which might happen, is 340 00:19:10,640 --> 00:19:13,240 Speaker 1: one option. But the other option here could be these 341 00:19:13,280 --> 00:19:16,280 Speaker 1: martinal laws. Yeah, well the markets changed since April. Don't 342 00:19:16,280 --> 00:19:18,200 Speaker 1: ask me what it's going to look like throughout my lifetime. 343 00:19:18,200 --> 00:19:22,960 Speaker 1: Bloomberg Shonali Bassek. Let's get to Disney streaming service Disney Plus, 344 00:19:23,000 --> 00:19:26,359 Speaker 1: which is debuted. It's ad supported service, coming with strict rules, 345 00:19:26,359 --> 00:19:30,399 Speaker 1: no alcohol commercials, no political spots, no ads from competitors 346 00:19:30,400 --> 00:19:33,120 Speaker 1: Carrot Interesting, isn't it because it's about a month on 347 00:19:33,359 --> 00:19:36,480 Speaker 1: from Netflix's ads sponsored one, and they do have a 348 00:19:36,520 --> 00:19:40,200 Speaker 1: beer ad ed right, But they've learned from the experience 349 00:19:40,200 --> 00:19:42,399 Speaker 1: with Hulu where they already have ads just half as 350 00:19:42,480 --> 00:19:44,720 Speaker 1: much now on Disney Plus. We'll be right back. This 351 00:19:44,800 --> 00:19:59,280 Speaker 1: is Bloomberg against almost any measure. It was a record year, 352 00:19:59,720 --> 00:20:01,920 Speaker 1: not in terms of the amount of funding going to 353 00:20:01,960 --> 00:20:05,080 Speaker 1: private companies, but the number of deals that were actually done. 354 00:20:05,160 --> 00:20:07,639 Speaker 1: So we were moving at a pace of almost a 355 00:20:07,720 --> 00:20:11,040 Speaker 1: hundred companies being funded every day. In a lot of ways, 356 00:20:11,080 --> 00:20:14,760 Speaker 1: it felt like there were there was too much money 357 00:20:14,840 --> 00:20:18,040 Speaker 1: chasing despite the fact that it was so many deals, 358 00:20:18,080 --> 00:20:23,200 Speaker 1: too few deals. Oh where we were in CB insights 359 00:20:23,200 --> 00:20:26,000 Speaker 1: Brian Lee there and interestingly, actually, as we keep talking 360 00:20:26,040 --> 00:20:28,680 Speaker 1: about the slowdown in BC funding at the moment, amid 361 00:20:28,680 --> 00:20:31,520 Speaker 1: all the concerns, we actually that learned that phone paid 362 00:20:31,560 --> 00:20:34,240 Speaker 1: today and some Walmart owned digital payments Bran is actually 363 00:20:34,240 --> 00:20:36,160 Speaker 1: seeing as much as one billion dollars from the likes 364 00:20:36,160 --> 00:20:40,359 Speaker 1: of General Atlantic and Tiger Global, Catter Investment Authority and Microsoft. 365 00:20:40,400 --> 00:20:43,560 Speaker 1: So it seems that some deals potentially still getting done 366 00:20:43,560 --> 00:20:46,480 Speaker 1: if you're the right size, right space. Yeah, the headline 367 00:20:46,520 --> 00:20:50,800 Speaker 1: is that the value overall globally VC value deals down right, 368 00:20:50,880 --> 00:20:53,399 Speaker 1: But actually what we learned from the Prequeen data we 369 00:20:53,480 --> 00:20:55,800 Speaker 1: learned from CB Insights in the last twenty four hours 370 00:20:55,840 --> 00:20:57,639 Speaker 1: is that it does depend on geography. So in that 371 00:20:57,720 --> 00:21:01,080 Speaker 1: case that deals in India in China the dollar value 372 00:21:01,160 --> 00:21:03,760 Speaker 1: is down fift twenty two year on year in USA 373 00:21:03,800 --> 00:21:07,560 Speaker 1: it's according to greet Queen. But those are just two markets. 374 00:21:07,600 --> 00:21:10,240 Speaker 1: So the question I guess is where is money still flowing? 375 00:21:10,480 --> 00:21:13,800 Speaker 1: Where is the opportunity which subsectors? And luckily, you know, 376 00:21:13,800 --> 00:21:15,640 Speaker 1: we can talk about this a week long if you're like, yeah, 377 00:21:15,680 --> 00:21:18,000 Speaker 1: we're going to keep on talking about until the year 378 00:21:18,119 --> 00:21:20,159 Speaker 1: is done, until the next year is through. But what 379 00:21:20,320 --> 00:21:21,719 Speaker 1: the perfect guests to talk about it in the here 380 00:21:21,760 --> 00:21:23,919 Speaker 1: and the now. It's needed to Horney. Here's with us, 381 00:21:23,920 --> 00:21:27,400 Speaker 1: director of research at pitchbook for more and just talk 382 00:21:27,480 --> 00:21:29,679 Speaker 1: to us about what you're learning at pitch but what 383 00:21:29,720 --> 00:21:32,439 Speaker 1: you're seeing in terms of the great highs that we 384 00:21:32,520 --> 00:21:35,160 Speaker 1: came from what two and now looking into twenty three 385 00:21:35,240 --> 00:21:37,600 Speaker 1: is going to look like for VC checks. Yeah, I mean, 386 00:21:37,640 --> 00:21:41,320 Speaker 1: it's been truly astonishing a couple of years, and I 387 00:21:41,359 --> 00:21:44,200 Speaker 1: think as you look forward over the next eighteen months, 388 00:21:44,200 --> 00:21:45,760 Speaker 1: I think the most important thing to do is actually 389 00:21:45,800 --> 00:21:48,600 Speaker 1: look backwards and get a sense of what's happening over 390 00:21:48,600 --> 00:21:50,360 Speaker 1: the past couple of years in the venture markets, which 391 00:21:50,400 --> 00:21:52,000 Speaker 1: is in a lot of ways led us to worry 392 00:21:52,040 --> 00:21:54,440 Speaker 1: out today. And so if you think about the dry 393 00:21:54,480 --> 00:21:56,359 Speaker 1: powder number, so money that hasn't been invested in the 394 00:21:56,440 --> 00:21:59,400 Speaker 1: end vehicles, there's five and sixty plus billion dollars globally, 395 00:21:59,720 --> 00:22:01,760 Speaker 1: and I think the narrative over the past couple of 396 00:22:01,840 --> 00:22:04,560 Speaker 1: years was that even in the case of a downturn, 397 00:22:04,880 --> 00:22:06,840 Speaker 1: you're gonna end up in a world where there was 398 00:22:07,000 --> 00:22:09,920 Speaker 1: enough money to help supplement the industry and prop it up. 399 00:22:10,359 --> 00:22:12,560 Speaker 1: If you you pull that layer back a little bit 400 00:22:12,560 --> 00:22:14,040 Speaker 1: and you take a look at what's happening under the 401 00:22:14,040 --> 00:22:16,080 Speaker 1: hood of the fundraising numbers, well, you see as the 402 00:22:16,080 --> 00:22:18,080 Speaker 1: majority that has actually in late stage vehicles, you know, 403 00:22:18,119 --> 00:22:21,560 Speaker 1: we've raised a trillion five right over the last five years, 404 00:22:21,800 --> 00:22:23,639 Speaker 1: and that's more money than we raised in the twenty 405 00:22:23,720 --> 00:22:26,479 Speaker 1: years before that. And so you've had this enormous run 406 00:22:26,600 --> 00:22:29,159 Speaker 1: of capital that's really bottlenecked. And so I think the 407 00:22:29,200 --> 00:22:32,280 Speaker 1: story of the venture today it's actually a story of concentration. 408 00:22:32,760 --> 00:22:34,920 Speaker 1: So when you have money raised in the late stage 409 00:22:34,920 --> 00:22:37,960 Speaker 1: of that capacity, if you if you think about where 410 00:22:37,960 --> 00:22:39,920 Speaker 1: it's gonna go, it's gonna have to flow into larger 411 00:22:40,000 --> 00:22:42,360 Speaker 1: check sizes. And so over the last call it, six 412 00:22:42,440 --> 00:22:44,840 Speaker 1: or seven years, you've seen the medium check size and 413 00:22:44,920 --> 00:22:47,919 Speaker 1: the average check size literally triple. And then if you 414 00:22:47,920 --> 00:22:50,719 Speaker 1: think about where that money is flowing from a company 415 00:22:50,800 --> 00:22:55,240 Speaker 1: size perspective, you've seen forty six percent of the entire 416 00:22:55,280 --> 00:23:00,400 Speaker 1: market cap of venture capital effectively um sit in unicornpanies. 417 00:23:00,640 --> 00:23:03,640 Speaker 1: And that's relative to sixteen percent just a decade ago. 418 00:23:04,160 --> 00:23:06,080 Speaker 1: And one of the things I think it's really interesting 419 00:23:06,200 --> 00:23:08,680 Speaker 1: is if you take the total value of unicorn companies 420 00:23:08,960 --> 00:23:11,119 Speaker 1: and you run that against net asset values of the 421 00:23:11,240 --> 00:23:14,560 Speaker 1: entire global venture market, that value is actually twice the 422 00:23:14,640 --> 00:23:17,439 Speaker 1: size of the entire net asset value of venture. So 423 00:23:17,480 --> 00:23:19,160 Speaker 1: what that tells you is that the market, the money 424 00:23:19,200 --> 00:23:21,240 Speaker 1: that's been flowing into these companies, it's not even coming 425 00:23:21,240 --> 00:23:24,240 Speaker 1: from the venture ecosystem. And so what you've seen is 426 00:23:24,240 --> 00:23:28,359 Speaker 1: that you've got corporates that are actually buoying UM a 427 00:23:28,440 --> 00:23:31,000 Speaker 1: lot of these transactions and nontraditional investors. And I think 428 00:23:31,040 --> 00:23:33,520 Speaker 1: today on a global basis, close to half of venture 429 00:23:33,560 --> 00:23:36,240 Speaker 1: capital use of the late stage are being led by 430 00:23:36,320 --> 00:23:40,800 Speaker 1: by corporation like phone playing Walmart backed company Microsoft is 431 00:23:40,800 --> 00:23:44,919 Speaker 1: getting in there alongside traditional vcs like General Atlantic just 432 00:23:44,960 --> 00:23:47,879 Speaker 1: talk us. Therefore, where all this money that is sitting 433 00:23:47,880 --> 00:23:49,840 Speaker 1: there looking for a home is going to go? Are 434 00:23:49,880 --> 00:23:51,520 Speaker 1: they going to start to spread out more than there? 435 00:23:51,520 --> 00:23:53,160 Speaker 1: Are they going to get more excited about the seed 436 00:23:53,240 --> 00:23:55,280 Speaker 1: rounds once again, or are they going to have to 437 00:23:55,280 --> 00:24:00,679 Speaker 1: look for bigger, more assured deals in this of nervous 438 00:24:01,480 --> 00:24:03,680 Speaker 1: So what I think is most interesting about the dynamic 439 00:24:03,720 --> 00:24:07,560 Speaker 1: today is that it's not like there's an incredible amount 440 00:24:07,600 --> 00:24:10,080 Speaker 1: of money that's ready to be deployed. I think the 441 00:24:10,119 --> 00:24:12,920 Speaker 1: pace of investments in the venture ecosystem was masked a 442 00:24:12,960 --> 00:24:15,919 Speaker 1: bit by capital that was coming from non traditional ventures 443 00:24:15,920 --> 00:24:18,320 Speaker 1: and corporate balance sheets. And so I think today what 444 00:24:18,359 --> 00:24:21,920 Speaker 1: you're gonna see is a shift, probably not in terms 445 00:24:22,000 --> 00:24:25,000 Speaker 1: of opportunity sets in terms of how fast money gets 446 00:24:25,000 --> 00:24:27,040 Speaker 1: deployed to the ecosystem, but I think you're gonna see 447 00:24:27,040 --> 00:24:29,720 Speaker 1: people look for complete different dynamics within the balance sheets 448 00:24:29,720 --> 00:24:31,560 Speaker 1: and the capital structures of the management teams that they're 449 00:24:31,560 --> 00:24:33,760 Speaker 1: investing in. And so you might still have early stage 450 00:24:33,840 --> 00:24:37,000 Speaker 1: rounds and midstage rounds, late stage rounds, but that capital 451 00:24:37,040 --> 00:24:38,800 Speaker 1: is not going to come to market unless those companies 452 00:24:38,800 --> 00:24:40,840 Speaker 1: can actually put that money to work efficiently, and they're 453 00:24:40,840 --> 00:24:42,800 Speaker 1: gonna look for signs of that. So I actually don't 454 00:24:42,840 --> 00:24:45,200 Speaker 1: think over the next twelve eighteen months you're gonna find 455 00:24:45,240 --> 00:24:49,320 Speaker 1: people shifting their investment strategy, deploying to different sectors or areas. 456 00:24:49,440 --> 00:24:52,040 Speaker 1: I think it's going to be shifting in the operational 457 00:24:52,080 --> 00:24:54,639 Speaker 1: capacity of the teams and the ability to manage capital 458 00:24:54,680 --> 00:24:58,520 Speaker 1: at scale. Needs are One of the questions we've been 459 00:24:58,560 --> 00:25:03,000 Speaker 1: asking is that about valuations, right, And there's a lot 460 00:25:03,040 --> 00:25:06,400 Speaker 1: that's top of mind right now, higher rates, costs of capital. 461 00:25:07,119 --> 00:25:11,200 Speaker 1: How do you justify evaluations for private companies? They've come down? 462 00:25:11,680 --> 00:25:13,840 Speaker 1: But I guess that when you're Avenge captist and you 463 00:25:13,840 --> 00:25:16,119 Speaker 1: look at them as that one hundred for for example, 464 00:25:17,119 --> 00:25:19,840 Speaker 1: and you see that then as that one hundred performance 465 00:25:19,880 --> 00:25:21,520 Speaker 1: here to day and some of the piers of these 466 00:25:21,560 --> 00:25:25,160 Speaker 1: private companies, how are we valuing growth companies? How are 467 00:25:25,160 --> 00:25:28,640 Speaker 1: we valuing and benchmarking what's out there in those companies 468 00:25:28,640 --> 00:25:31,560 Speaker 1: they're still yet to go public. Yeah, I think it's 469 00:25:31,560 --> 00:25:33,080 Speaker 1: a great question and one that a lot of people 470 00:25:33,080 --> 00:25:34,800 Speaker 1: are trying to figure out right now, because I think 471 00:25:34,840 --> 00:25:38,120 Speaker 1: the pace at which private companies are marked down tends 472 00:25:38,160 --> 00:25:40,360 Speaker 1: to lack what we're seeing in the public markets right now. 473 00:25:40,640 --> 00:25:42,359 Speaker 1: I think that creates a lot of noise for the 474 00:25:42,359 --> 00:25:44,920 Speaker 1: limited partners that are trying to invest in net new 475 00:25:44,920 --> 00:25:46,880 Speaker 1: funds because they're trying to get a sense of truly 476 00:25:47,240 --> 00:25:49,439 Speaker 1: what those marks look like relative to the public markets. 477 00:25:49,480 --> 00:25:50,639 Speaker 1: You know, one of the things we talked about a 478 00:25:50,720 --> 00:25:54,399 Speaker 1: pitchwork quite a bit is that in times of market distortions, 479 00:25:54,880 --> 00:25:57,000 Speaker 1: um or or of excess what we've seen our last 480 00:25:57,000 --> 00:25:59,240 Speaker 1: couple of years, every sleeve of the market tends to 481 00:25:59,280 --> 00:26:02,280 Speaker 1: operate in its own little silo, whether it's series A, seed, 482 00:26:02,640 --> 00:26:04,760 Speaker 1: late stage, etcetera. And I think what you're seeing today 483 00:26:04,800 --> 00:26:07,520 Speaker 1: is that the markets are actually operating relatively similar and 484 00:26:07,560 --> 00:26:09,359 Speaker 1: they're taking their cues from each other. And so the 485 00:26:09,440 --> 00:26:11,119 Speaker 1: chart you just held up, you look at our venture 486 00:26:11,119 --> 00:26:14,080 Speaker 1: back TYPO index down sixty plus percent relative to a 487 00:26:14,119 --> 00:26:17,200 Speaker 1: NAZEX down. If you were to pull our pull out 488 00:26:17,240 --> 00:26:19,480 Speaker 1: the sas companies of that index, for example, and you 489 00:26:19,480 --> 00:26:21,600 Speaker 1: were to run a sales number for each of the 490 00:26:21,600 --> 00:26:23,720 Speaker 1: aggregate of those companies in that index, and then look 491 00:26:23,720 --> 00:26:25,680 Speaker 1: at the price of sales multiple. You would have seen 492 00:26:25,720 --> 00:26:28,840 Speaker 1: that gone from fifty three times to three times today. 493 00:26:28,920 --> 00:26:30,399 Speaker 1: And then if you were to look at that index 494 00:26:30,400 --> 00:26:32,399 Speaker 1: for companies that actually had any free cash flow and 495 00:26:32,480 --> 00:26:34,639 Speaker 1: ran the same exact metric of price of sales, you 496 00:26:34,640 --> 00:26:36,960 Speaker 1: would see those companies straighting at twenty two times. And 497 00:26:36,960 --> 00:26:40,960 Speaker 1: so the market is telling you, effectively that we need 498 00:26:41,000 --> 00:26:43,480 Speaker 1: profitable growth and a unit of a r R is 499 00:26:43,480 --> 00:26:46,320 Speaker 1: not worth the same without free cashual to justify it. 500 00:26:46,440 --> 00:26:48,760 Speaker 1: And I think what you're gonna see is that those 501 00:26:48,760 --> 00:26:51,280 Speaker 1: companies are gonna end up getting following on funding and 502 00:26:51,359 --> 00:26:53,159 Speaker 1: their marks are going to be higher on a relative 503 00:26:53,200 --> 00:26:55,720 Speaker 1: basis um. And then those who don't have that, I 504 00:26:55,760 --> 00:26:59,240 Speaker 1: think you're gonna see the valuations declined precipitously. So, going 505 00:26:59,280 --> 00:27:01,200 Speaker 1: back to what Caro and I were discussing at the 506 00:27:01,240 --> 00:27:04,159 Speaker 1: beginning of the segment, right, the high bar set in 507 00:27:04,960 --> 00:27:07,840 Speaker 1: one and that not all markets are created equally. We 508 00:27:07,840 --> 00:27:10,760 Speaker 1: actually asked our audience, what is T three look like 509 00:27:10,840 --> 00:27:13,680 Speaker 1: for startups in terms of fundraising. These are the results 510 00:27:14,359 --> 00:27:19,440 Speaker 1: for almost fifty bleak. Almost fifty depends on sector and size. 511 00:27:19,720 --> 00:27:23,119 Speaker 1: Needs are bleak or depends on sector and size. I 512 00:27:23,119 --> 00:27:25,560 Speaker 1: think it depends on sector and size, and I think 513 00:27:25,560 --> 00:27:28,600 Speaker 1: the gap between bleak and man bleak is going to 514 00:27:28,640 --> 00:27:32,000 Speaker 1: be a lot wider for a lot of companies. All right, needs, 515 00:27:32,000 --> 00:27:34,960 Speaker 1: I'll tell any director of research at pitch book, thank 516 00:27:35,000 --> 00:27:38,080 Speaker 1: you very much. So here's another story we're watching, Peter 517 00:27:38,200 --> 00:27:41,320 Speaker 1: tile placing a two and fifty million dollar bet on 518 00:27:41,400 --> 00:27:44,600 Speaker 1: a venture debt fund. The venture debt firm to Cora 519 00:27:44,760 --> 00:27:47,760 Speaker 1: Capital was started this year by Kerry Finley, a former 520 00:27:47,800 --> 00:27:51,080 Speaker 1: partner at well known Third Point. Its targets private companies 521 00:27:51,119 --> 00:27:55,400 Speaker 1: industry in industries like property, technology and fintech with predictable 522 00:27:55,400 --> 00:27:57,800 Speaker 1: cash flows and assets that too, Cora can used to 523 00:27:57,800 --> 00:28:01,480 Speaker 1: actually underwrite the risk. It is un usually large investment 524 00:28:01,480 --> 00:28:04,040 Speaker 1: by Peter Shills standards, the size of which has not 525 00:28:04,119 --> 00:28:07,159 Speaker 1: yet been previously reported. I think what's interesting about this 526 00:28:07,240 --> 00:28:10,000 Speaker 1: carries I've come across venture debt in the past. I've 527 00:28:10,040 --> 00:28:12,600 Speaker 1: done a few stories over the years where it's included 528 00:28:12,640 --> 00:28:17,640 Speaker 1: alongside the traditional venture equity investment. But usually what happens 529 00:28:17,720 --> 00:28:22,080 Speaker 1: is the venture debt party were saying, Oh, we're confidently 530 00:28:22,280 --> 00:28:24,639 Speaker 1: lending this money to you based on the money you 531 00:28:24,760 --> 00:28:28,080 Speaker 1: raise in the future to pay us back. Role right now, Look, 532 00:28:28,080 --> 00:28:29,600 Speaker 1: think about what we've just spoken about. That seems a 533 00:28:29,600 --> 00:28:31,639 Speaker 1: little bit of a hairy proposition. Yeah, And I think 534 00:28:31,680 --> 00:28:33,639 Speaker 1: a lot of people are being attractible. The companies are 535 00:28:33,640 --> 00:28:36,000 Speaker 1: being attracted if they need money to go the debt 536 00:28:36,080 --> 00:28:38,280 Speaker 1: route because they don't want to be having to mark 537 00:28:38,320 --> 00:28:41,560 Speaker 1: down what the valuations are from an equity perspective. And 538 00:28:41,600 --> 00:28:45,360 Speaker 1: I think this is really speaking to pitch books entire 539 00:28:45,400 --> 00:28:49,000 Speaker 1: point and the idea that perhaps people are just going 540 00:28:49,040 --> 00:28:50,920 Speaker 1: to have to think that much more creatively in the 541 00:28:50,960 --> 00:28:53,200 Speaker 1: ways in which they want to invest. Yes, it's like 542 00:28:53,240 --> 00:28:55,360 Speaker 1: what different ways in which is the money going to 543 00:28:55,360 --> 00:28:58,400 Speaker 1: be operationally used? But also which bit of the capital 544 00:28:58,440 --> 00:29:00,360 Speaker 1: structure do you want to be in, and just more 545 00:29:00,360 --> 00:29:02,959 Speaker 1: thoughtful about the way in which you're gonna put your 546 00:29:03,000 --> 00:29:04,760 Speaker 1: money to work in this space. I think it's really 547 00:29:04,800 --> 00:29:06,680 Speaker 1: interesting that what is it you fifty million coming from 548 00:29:06,680 --> 00:29:09,320 Speaker 1: Peter Teal, but there's a hundred a million alongside that, 549 00:29:09,440 --> 00:29:12,120 Speaker 1: and clearly carry she's got a lot of experience in 550 00:29:12,160 --> 00:29:16,520 Speaker 1: this space. Yeah, and also global look around the world, 551 00:29:16,600 --> 00:29:18,440 Speaker 1: not just US and China. I think that's the story 552 00:29:18,440 --> 00:29:20,880 Speaker 1: of this week. Yeah, I was hoping. Sadly, I'm not 553 00:29:20,920 --> 00:29:23,080 Speaker 1: hearing all that much about being deployed in Europe right here, 554 00:29:23,160 --> 00:29:26,280 Speaker 1: right now. But let's talk about some other areas and 555 00:29:26,280 --> 00:29:29,000 Speaker 1: which perhaps the money has actually been driving drying up 556 00:29:29,040 --> 00:29:32,480 Speaker 1: a little bit. And remember and how excited we got 557 00:29:32,520 --> 00:29:34,480 Speaker 1: in the world of e sports, how much he thought 558 00:29:34,480 --> 00:29:37,320 Speaker 1: the industry was going to boom, how much celebrities and 559 00:29:37,320 --> 00:29:40,720 Speaker 1: and people were really diverting some of their funding towards 560 00:29:40,760 --> 00:29:42,640 Speaker 1: the space. And now actually the sources we understand are 561 00:29:42,640 --> 00:29:46,400 Speaker 1: actually dwindling. The signs pretty abound that athletic competition via 562 00:29:46,520 --> 00:29:49,960 Speaker 1: video games doesn't really have anywhere near the earnings potential 563 00:29:49,960 --> 00:29:52,840 Speaker 1: that investors are originally anticipated. And we want to therefore 564 00:29:52,840 --> 00:29:55,400 Speaker 1: go to a great story on the Terminal dot com 565 00:29:55,440 --> 00:29:57,320 Speaker 1: that you can read today done by Cecilia. Does that 566 00:29:57,880 --> 00:30:01,360 Speaker 1: Antarsio of course, who is here with the insight, and 567 00:30:02,480 --> 00:30:05,240 Speaker 1: Cecilia talked to us about the deep dive you've done, 568 00:30:05,240 --> 00:30:08,640 Speaker 1: the money, the share more of money that went towards 569 00:30:08,720 --> 00:30:11,960 Speaker 1: this space pre COVID then COVID suddenly sort of shut 570 00:30:12,000 --> 00:30:14,800 Speaker 1: down all these gatherings of together away. You'd watch the 571 00:30:15,320 --> 00:30:18,280 Speaker 1: E sports unfold, then it take back up what's sort 572 00:30:18,280 --> 00:30:20,320 Speaker 1: of going wrong in this space at the moment. Sure, 573 00:30:20,480 --> 00:30:23,520 Speaker 1: so four point five billion was invested in the sports 574 00:30:23,520 --> 00:30:25,960 Speaker 1: in two thousand and eighteen, a lot of which was 575 00:30:26,000 --> 00:30:29,240 Speaker 1: from sports business billionaires who believed that the sports could 576 00:30:29,240 --> 00:30:31,640 Speaker 1: one day scale on the level of maybe the National 577 00:30:31,680 --> 00:30:35,680 Speaker 1: Basketball Association. But over the last couple of years, E 578 00:30:35,800 --> 00:30:39,400 Speaker 1: sports organizations who field teams for these competitive leagues have 579 00:30:39,520 --> 00:30:43,040 Speaker 1: had trouble becoming as profitable as money had hoped. Part 580 00:30:43,040 --> 00:30:46,400 Speaker 1: of that was due to COVID due to lockdown restrictions 581 00:30:46,440 --> 00:30:51,040 Speaker 1: that prevented fans from watching the sports live at a stadiums, 582 00:30:51,120 --> 00:30:54,400 Speaker 1: But some analysts say that actually this is something that's 583 00:30:54,480 --> 00:30:57,040 Speaker 1: masking a greater problem in E sports, which is the 584 00:30:57,120 --> 00:31:01,760 Speaker 1: challenge of structuring a business allows a company to turn 585 00:31:01,760 --> 00:31:04,360 Speaker 1: a money, to turn a profit off of I P 586 00:31:04,600 --> 00:31:09,280 Speaker 1: that publishers ultimately own. Talk to us about where perhaps 587 00:31:09,320 --> 00:31:13,080 Speaker 1: money is still from a fledgling perspective going what people 588 00:31:13,120 --> 00:31:15,400 Speaker 1: are still seeing opportunities in these sports, but fees it 589 00:31:15,440 --> 00:31:20,200 Speaker 1: feels like it's more individuals right, rather than teams. Sure, 590 00:31:20,320 --> 00:31:23,840 Speaker 1: so players are the sports players are learning are earning 591 00:31:23,960 --> 00:31:27,840 Speaker 1: large salaries um playing competitive gaming a very small percentage though, 592 00:31:27,920 --> 00:31:29,720 Speaker 1: So if your kids are thinking about it, tell them 593 00:31:29,760 --> 00:31:33,280 Speaker 1: that there are slim chances fix and seven figures are 594 00:31:33,280 --> 00:31:36,160 Speaker 1: going to top the sports players in games like League 595 00:31:36,200 --> 00:31:39,400 Speaker 1: of Legends. Gaming publishers are also earning some amount of 596 00:31:39,440 --> 00:31:43,400 Speaker 1: money from the sports ventures um through franchise fee. So 597 00:31:43,480 --> 00:31:46,000 Speaker 1: teams that do decide to feel the sports teams in 598 00:31:46,000 --> 00:31:49,320 Speaker 1: their leagues might offer payments as large as twenty million 599 00:31:49,360 --> 00:31:54,000 Speaker 1: dollars to participate. Cecilia is a brilliant read, and we've 600 00:31:54,040 --> 00:31:56,600 Speaker 1: loved being able to dissect a little bit more with you, Cecilia. 601 00:31:56,720 --> 00:32:00,200 Speaker 1: To Anastasia, there we thank you. Meanwhile, coming up, we've 602 00:32:00,200 --> 00:32:02,360 Speaker 1: got to do it F t X. The drama it 603 00:32:02,400 --> 00:32:04,880 Speaker 1: continues to unfold, of course, is the new CEO and 604 00:32:04,920 --> 00:32:08,120 Speaker 1: the bankruptcy lawyers. They're said to be meeting with federal prosecutors. 605 00:32:08,240 --> 00:32:11,280 Speaker 1: What's interesting, though, is someday will seeing some money to 606 00:32:11,320 --> 00:32:13,479 Speaker 1: be made in the space. Sylvia Jablonsky is among us 607 00:32:14,000 --> 00:32:16,360 Speaker 1: defiance E t S has talked about how short E 608 00:32:16,440 --> 00:32:31,520 Speaker 1: t F that she's developed as a bloom Bag, well 609 00:32:31,640 --> 00:32:34,600 Speaker 1: f t X, and many other frankly crypto related companies 610 00:32:34,640 --> 00:32:38,160 Speaker 1: are feeling the heat. Defiance. C ETFs has been benefiting 611 00:32:38,280 --> 00:32:41,680 Speaker 1: from turmoil in the cryptocurrency industry, with its daily Short 612 00:32:41,800 --> 00:32:45,040 Speaker 1: Digital Economy e t F staring more than twenty since 613 00:32:45,080 --> 00:32:49,040 Speaker 1: his inception this September. Definance TTS CEO and c O 614 00:32:49,160 --> 00:32:52,160 Speaker 1: and please to say, Sylvia Jablonsky joins us now to discuss. 615 00:32:52,200 --> 00:32:54,560 Speaker 1: Can we start with the basics, what is the e 616 00:32:54,640 --> 00:32:57,720 Speaker 1: t F and then we'll get onto why is it benefiting? Sure, 617 00:32:57,880 --> 00:33:00,400 Speaker 1: thank you so much for having me. So what are 618 00:33:00,480 --> 00:33:03,880 Speaker 1: et F does? I bit is it gives investors access 619 00:33:04,040 --> 00:33:07,480 Speaker 1: to the inverse performance of some of the stocks that 620 00:33:07,520 --> 00:33:11,640 Speaker 1: are correlated to or best represent the crypto ecosystem, So 621 00:33:11,760 --> 00:33:16,480 Speaker 1: for example, stock side coin based, Galaxy, micro Strategy, Block 622 00:33:16,720 --> 00:33:19,160 Speaker 1: robin Hood. These are names that are highly correlated to 623 00:33:19,200 --> 00:33:22,600 Speaker 1: the price of bitcoin, for example, and and really popped 624 00:33:22,600 --> 00:33:26,000 Speaker 1: when bitcoint bitcoin popped over the past year. But since 625 00:33:26,040 --> 00:33:28,960 Speaker 1: bitcoin has fallen from seventy seventy thousand to where it 626 00:33:29,040 --> 00:33:31,800 Speaker 1: is now, these names have fallen in tandem along with 627 00:33:31,840 --> 00:33:34,800 Speaker 1: the overhang of macro risks. So a lot of trainers 628 00:33:34,840 --> 00:33:38,280 Speaker 1: out there know about short currency bitcoin funds and they 629 00:33:38,280 --> 00:33:41,200 Speaker 1: get their exposure that way. But at a fight, we thought, well, 630 00:33:41,200 --> 00:33:43,440 Speaker 1: there's a much bigger picture here actually, because there's so 631 00:33:43,520 --> 00:33:47,120 Speaker 1: much contagion between equities that are related to crypto and 632 00:33:47,200 --> 00:33:51,200 Speaker 1: really benefit from and generated revenues from crypto as it rises. 633 00:33:51,280 --> 00:33:53,640 Speaker 1: So if that's going any other way, you know, there's 634 00:33:53,640 --> 00:33:55,320 Speaker 1: got to be a product to capture the short there, 635 00:33:55,320 --> 00:33:57,640 Speaker 1: and that's what we're trying to do. Okay, So what 636 00:33:57,680 --> 00:34:02,440 Speaker 1: happens if the market takes a pause and we, over 637 00:34:02,480 --> 00:34:06,240 Speaker 1: a longer term period start to see both crypto related 638 00:34:06,280 --> 00:34:11,880 Speaker 1: equities and just more broadly digital assets rebound. Yeah, yeah, 639 00:34:11,920 --> 00:34:14,279 Speaker 1: So in that case, so what you want to do 640 00:34:14,320 --> 00:34:16,080 Speaker 1: is you want to look at a fun like IBIT 641 00:34:16,200 --> 00:34:18,600 Speaker 1: when you have the view that markets are going to fall, 642 00:34:18,680 --> 00:34:20,640 Speaker 1: or when you're looking to the head your position. So 643 00:34:21,000 --> 00:34:23,400 Speaker 1: if crypto starts to rebound, you can think about it 644 00:34:23,440 --> 00:34:26,080 Speaker 1: as the hedge to having a portfolio, or you can 645 00:34:26,200 --> 00:34:28,160 Speaker 1: transition to another e t F like a n f 646 00:34:28,239 --> 00:34:30,680 Speaker 1: TC for example, that is long all of those types 647 00:34:30,680 --> 00:34:32,840 Speaker 1: of companies as well. So there are a few crypto 648 00:34:32,840 --> 00:34:35,680 Speaker 1: et F products out there. There are single stocks out there, obviously, 649 00:34:35,719 --> 00:34:38,200 Speaker 1: the investors can get back into like coin based in 650 00:34:38,239 --> 00:34:40,239 Speaker 1: the robinhood whatever they sort of like if their view 651 00:34:40,320 --> 00:34:42,520 Speaker 1: is changing. But the point is that, you know, you 652 00:34:42,560 --> 00:34:45,080 Speaker 1: sort of have tools that represent both sides of the trade, 653 00:34:45,320 --> 00:34:47,400 Speaker 1: and that's really what we're striving to do, is to 654 00:34:47,440 --> 00:34:50,520 Speaker 1: give investors access to those products. And you know, they're 655 00:34:50,520 --> 00:34:54,040 Speaker 1: typically hedge fun types of products, so it really democratizes this. 656 00:34:54,239 --> 00:34:56,960 Speaker 1: The average retail trader who we know is highly interested 657 00:34:57,000 --> 00:34:59,800 Speaker 1: in crypto and luckily a lot of these and the 658 00:35:00,160 --> 00:35:05,160 Speaker 1: publicly traded companies probabicly regulated companies. And I'm interested, though, Sylvia, 659 00:35:05,239 --> 00:35:08,600 Speaker 1: what demand has been like a full long the sector. 660 00:35:08,880 --> 00:35:12,600 Speaker 1: You're someone who speaks much about well where assets currently 661 00:35:12,680 --> 00:35:14,879 Speaker 1: or trading where they should be trading. You can often 662 00:35:14,920 --> 00:35:17,360 Speaker 1: take a view from the all perspective, all people gone 663 00:35:18,120 --> 00:35:22,520 Speaker 1: about to expect some sort of pop back in some way. Yeah, Caroline, 664 00:35:22,520 --> 00:35:24,279 Speaker 1: And actually you just made a really great point there. 665 00:35:24,320 --> 00:35:27,560 Speaker 1: So the other, you know, benefit of looking at shorting 666 00:35:27,560 --> 00:35:31,759 Speaker 1: equities versus just shorting a cryptocurrency itself is that it's 667 00:35:31,760 --> 00:35:33,759 Speaker 1: going to take a lot of these companies a while 668 00:35:33,800 --> 00:35:36,239 Speaker 1: to recover. So even if crypto starts to inch up 669 00:35:36,560 --> 00:35:40,520 Speaker 1: until the broader market recovers and tech recovers. Companies like 670 00:35:40,520 --> 00:35:42,840 Speaker 1: coin based, robin Hood, Galaxy, the companies you mentioned before. 671 00:35:42,880 --> 00:35:45,560 Speaker 1: They're probably gonna have a lag to crypto itself too, 672 00:35:45,680 --> 00:35:49,000 Speaker 1: just because of the overhang of inflation and raising things 673 00:35:49,000 --> 00:35:50,440 Speaker 1: like that. So I think we have some time on 674 00:35:50,480 --> 00:35:53,520 Speaker 1: this trade um in terms of investors coming in, you know, 675 00:35:53,600 --> 00:35:56,120 Speaker 1: absolutely right. I mean, the time for value creation is 676 00:35:56,480 --> 00:35:58,920 Speaker 1: when markets are dismal. But I think that because of 677 00:35:59,120 --> 00:36:01,120 Speaker 1: f t X and these started this, you know, in 678 00:36:01,120 --> 00:36:03,480 Speaker 1: the intro there, because of f t X, there's so 679 00:36:03,600 --> 00:36:07,279 Speaker 1: much sort of apprehension to get back into into the 680 00:36:07,320 --> 00:36:10,120 Speaker 1: sector for some of the retail traders that dove in heavily, 681 00:36:10,480 --> 00:36:12,960 Speaker 1: until we get some regulation, until we get some clarity 682 00:36:13,000 --> 00:36:15,920 Speaker 1: around you know, crypto and how the end investors protected. 683 00:36:16,000 --> 00:36:17,520 Speaker 1: So I do think that it's going to be a 684 00:36:17,560 --> 00:36:21,120 Speaker 1: slow role on this um longer term. You know, I'm 685 00:36:21,200 --> 00:36:25,040 Speaker 1: fully bullish on blockchain technology, digital assets and tokenization, but 686 00:36:25,080 --> 00:36:26,719 Speaker 1: I do think in the short term that it's going 687 00:36:26,719 --> 00:36:29,120 Speaker 1: to be a little bit tough and you might benefit 688 00:36:29,160 --> 00:36:30,960 Speaker 1: more on the short side than you will on the 689 00:36:31,000 --> 00:36:34,000 Speaker 1: long side. So we are a bit worried about the 690 00:36:34,080 --> 00:36:36,680 Speaker 1: lack of new ways in which to gain exposure from 691 00:36:36,680 --> 00:36:40,560 Speaker 1: a regulator perspective, you know, I'm not There are actually 692 00:36:40,600 --> 00:36:43,000 Speaker 1: a lot of good ways to gain exposure, but they're 693 00:36:43,040 --> 00:36:46,160 Speaker 1: not all costs efficient. So I think the looking at 694 00:36:46,200 --> 00:36:47,920 Speaker 1: a short equity fund is a good way to do it. 695 00:36:47,920 --> 00:36:49,680 Speaker 1: Obviously the way we're kind of going about it, because 696 00:36:49,719 --> 00:36:51,799 Speaker 1: you just buy an ETF long in your account, right, 697 00:36:51,800 --> 00:36:54,040 Speaker 1: It's is as easy as can be in terms of 698 00:36:54,080 --> 00:36:56,520 Speaker 1: the short futures funds. You know, as long as there's 699 00:36:56,520 --> 00:36:59,200 Speaker 1: sort of enough supply to build the fund and rebounds 700 00:36:59,239 --> 00:37:01,279 Speaker 1: and on a daily aces, and you have clarity and 701 00:37:01,320 --> 00:37:04,719 Speaker 1: transparency on what's in the actual fund, how much of 702 00:37:04,719 --> 00:37:06,680 Speaker 1: it is actually sure bitcoin, and how much of it 703 00:37:06,760 --> 00:37:08,560 Speaker 1: is you know, sort of filled with something else. You 704 00:37:08,600 --> 00:37:10,879 Speaker 1: want to make sure you're getting pure exposure. I think 705 00:37:10,960 --> 00:37:13,759 Speaker 1: that's important, and there are two really great options out there. 706 00:37:14,160 --> 00:37:16,399 Speaker 1: And then I think investors can also short single name 707 00:37:16,440 --> 00:37:18,799 Speaker 1: stocks if they'd like to. But I think you know 708 00:37:18,840 --> 00:37:22,520 Speaker 1: the broader picture about will you know products be approved 709 00:37:22,520 --> 00:37:25,719 Speaker 1: in terms of um an ethery TF for you know, 710 00:37:25,920 --> 00:37:28,560 Speaker 1: some of the different types of cryptocurrencies out there. I 711 00:37:28,600 --> 00:37:31,120 Speaker 1: think that this is just my sense that regulators might 712 00:37:31,160 --> 00:37:33,239 Speaker 1: take some pause just because of what's going on sort 713 00:37:33,239 --> 00:37:35,719 Speaker 1: of the f TX issue, and they might seek to 714 00:37:35,760 --> 00:37:38,000 Speaker 1: kind of come up with some rules and stabilize the 715 00:37:38,000 --> 00:37:43,279 Speaker 1: industry before you know, kind of approving the more nuanced products. 716 00:37:43,320 --> 00:37:47,440 Speaker 1: Sylvia's always said, great to get your perspective, Sylvia define 717 00:37:47,480 --> 00:37:58,319 Speaker 1: CTFC saying, this is a day we've worked toward for 718 00:37:58,360 --> 00:38:01,480 Speaker 1: a long time. We ever start pushing for her release. 719 00:38:02,120 --> 00:38:05,080 Speaker 1: It took painstaking, the intense negotiations, and I want to 720 00:38:05,120 --> 00:38:09,000 Speaker 1: thank all the hard working public servants across my administration 721 00:38:09,400 --> 00:38:14,839 Speaker 1: who worked tirelessly to secure her release. President Biden, they're 722 00:38:15,239 --> 00:38:17,759 Speaker 1: on the release of Britney Grinder. Now. This is a 723 00:38:17,880 --> 00:38:20,480 Speaker 1: course going viral wherever you look at the w NBA 724 00:38:20,640 --> 00:38:23,200 Speaker 1: start being released from detention in Russia. After the US 725 00:38:23,239 --> 00:38:26,480 Speaker 1: swapped for Victor about the so called Merchant of Death, 726 00:38:26,800 --> 00:38:29,080 Speaker 1: an arms dealer that Russia has been working for years 727 00:38:29,080 --> 00:38:32,280 Speaker 1: to free. Now Grinder has been sent to nine years 728 00:38:32,320 --> 00:38:35,480 Speaker 1: and moved to a penal colony. Last month, the Phoenix 729 00:38:35,520 --> 00:38:38,400 Speaker 1: Mercury basketball star who played in Russia during the off season, 730 00:38:38,600 --> 00:38:41,600 Speaker 1: pleaded guilty to drug smuggling in July after customs officials 731 00:38:41,800 --> 00:38:45,000 Speaker 1: were found vape cartridges containing cannabis or in her luggage 732 00:38:45,000 --> 00:38:47,759 Speaker 1: at Moscow Airport back in February. It has been a 733 00:38:47,880 --> 00:38:51,640 Speaker 1: long journey ad and there really reminded everyone how important 734 00:38:51,680 --> 00:38:53,800 Speaker 1: this story is. No matter where you were on social 735 00:38:54,360 --> 00:38:56,640 Speaker 1: look to hammer home the point. I've got Google trends 736 00:38:56,719 --> 00:38:59,239 Speaker 1: up on my screen. Brittney Grinder is number one by 737 00:38:59,440 --> 00:39:01,680 Speaker 1: a sack of millions in terms of what people are 738 00:39:01,680 --> 00:39:04,880 Speaker 1: searching for this Thursday. Everyone around the globe has been 739 00:39:04,920 --> 00:39:07,080 Speaker 1: tracking this case, and it's not the first time I 740 00:39:07,080 --> 00:39:09,879 Speaker 1: think that she's actually been high up the charts on Google. Carry. Yeah, 741 00:39:09,960 --> 00:39:15,399 Speaker 1: what is the seventh most sought after or searched for athletes? Two? 742 00:39:15,440 --> 00:39:17,120 Speaker 1: I think the numbers say. And also there was a 743 00:39:17,120 --> 00:39:19,239 Speaker 1: great video I think that you sought out from well 744 00:39:19,760 --> 00:39:22,680 Speaker 1: a local sports team near you. Yeah, Steve Kerr. Yeah, 745 00:39:22,840 --> 00:39:25,520 Speaker 1: everyone's talking about it. That's what matters. It does that 746 00:39:25,600 --> 00:39:27,920 Speaker 1: does it? Of course? For this edition of Bloomberg Technology, 747 00:39:28,040 --> 00:39:30,359 Speaker 1: go talk about us. Huh. Yeah, don't forget to check 748 00:39:30,360 --> 00:39:32,960 Speaker 1: out our podcast wherever you get your podcast, Apple, I 749 00:39:33,120 --> 00:39:35,719 Speaker 1: Heeart and Spotify. This is Bloomberg