WEBVTT - Meta Provides Earnings Relief, Palantir CEO Interview 0:00:14.200 --> 0:00:16.840 I'm Caroline Hinna Blue Mugs World headquarters in New York, 0:00:17.280 --> 0:00:19.960 and I made Ludlow in San Francisco. This is Bloomberg 0:00:19.960 --> 0:00:22.759 Technology in Carolina, post fed rally for then as that 0:00:22.880 --> 0:00:26.400 one progress in the battle and inflation warning on rates 0:00:26.400 --> 0:00:28.639 and we haven't even got two earnings yet. Macro and 0:00:28.680 --> 0:00:31.240 the micro is super important for certain names to ed. 0:00:31.320 --> 0:00:35.040 Let's talk about it. Meta surging after earnings relief, plans 0:00:35.080 --> 0:00:37.959 to buy back shares, the company focusing on efficiency, were 0:00:37.960 --> 0:00:40.040 digging into the short term cost cuts and the long 0:00:40.120 --> 0:00:42.279 term goals as it also wins quarter approval to buy 0:00:42.360 --> 0:00:47.440 VR startup within plus my exclusive conversation with Palenteer CEO 0:00:47.840 --> 0:00:51.800 Alex carp who has some pointed words for shareholders and 0:00:51.960 --> 0:00:54.840 potential new hires and crypto hackers. Still more money than 0:00:54.880 --> 0:00:58.720 ever before. In two that's as Cathy Woods ARC doubles 0:00:58.720 --> 0:01:01.880 down on it's one million dollar talget for bitcoin. First, 0:01:02.160 --> 0:01:04.120 I want to go straight to our bloome bag report 0:01:04.160 --> 0:01:06.480 to Alex Brinka, who has all the key takeaways from 0:01:06.480 --> 0:01:09.000 metas Zarnings addicts, what were the top lines? I mean, 0:01:09.040 --> 0:01:12.040 the biggest thing here with this stock bub I think 0:01:12.120 --> 0:01:14.720 is going to be the cost cutting. Meta has had 0:01:14.959 --> 0:01:17.319 some kind of shaky ground with investors over the last 0:01:17.319 --> 0:01:20.000 twelve months because of how much they say they're spending 0:01:20.040 --> 0:01:22.760 on things like this far flung vision of the virtual 0:01:22.760 --> 0:01:25.680 reality metaverse. Well, they have come back to earth, it seems, 0:01:25.840 --> 0:01:30.120 and actually lower their expectations for three for their costs 0:01:30.200 --> 0:01:34.080 to about eighty nine to billion dollars and expenses for 0:01:34.120 --> 0:01:36.480 the year. I think the icing on the cake on 0:01:36.480 --> 0:01:40.160 that that's probably exciting investors is the addition of forty 0:01:40.160 --> 0:01:43.280 billion dollars to their share a purchase plan. Again. Metas 0:01:43.280 --> 0:01:46.240 stock sold off the most ever, the most free year 0:01:46.280 --> 0:01:50.080 ever in two It's recovered a little bit, certainly more today, 0:01:50.120 --> 0:01:52.160 but adding a little bit to that buy back has 0:01:52.200 --> 0:01:55.160 certainly got folks excited now in terms of the broader 0:01:55.240 --> 0:01:58.080 market and what we might also see from Alphabet tomorrow. 0:01:58.240 --> 0:02:01.000 I'm looking at the top line staments for the first 0:02:01.080 --> 0:02:04.360 quarter for revenue, they're projecting at twenty six to twenty 0:02:04.400 --> 0:02:07.760 eight and a half billion dollars. That basically straddles the 0:02:07.760 --> 0:02:10.639 average analyst expectations. So I think there might be some 0:02:10.720 --> 0:02:13.120 clues under the hood here that the general malaise in 0:02:13.160 --> 0:02:15.920 the ad market is leveling off similar to what we 0:02:15.960 --> 0:02:18.560 heard from Snap yesterday. But as the earnings call gets 0:02:18.560 --> 0:02:21.600 started here, I'm sure that there'll be questions on both 0:02:21.680 --> 0:02:26.240 costs metaverse aspirations and where that revenue stabilization is coming from. 0:02:26.400 --> 0:02:29.040 And I'm sure competition with a company that you focus 0:02:29.080 --> 0:02:31.960 a lot in on, which is TikTok. So it is 0:02:32.000 --> 0:02:34.840 notable that we're getting that by that push up in 0:02:34.880 --> 0:02:37.080 the shares, but we're still half of where we are 0:02:37.120 --> 0:02:39.480 in the value of Meta stock from this time last 0:02:39.560 --> 0:02:42.480 year anything in terms of where their market share is 0:02:42.520 --> 0:02:45.079 looking all their own cannibalization with the fact that they're 0:02:45.240 --> 0:02:47.840 you know, discounting giving cheap ads on reels for example, 0:02:47.960 --> 0:02:50.799 exactly that that is that reels narrative is one that 0:02:50.840 --> 0:02:53.800 was really big last earning cycle, and I'm sure they'll 0:02:53.800 --> 0:02:56.480 get questions now. Reels is their answer to TikTok. It's 0:02:56.480 --> 0:02:58.480 short form videos that served up to you based on 0:02:58.520 --> 0:03:01.400 an algorithm. It's really dicky, and users are liking it, 0:03:01.440 --> 0:03:04.320 and they've shown some kind of strides and getting users 0:03:04.320 --> 0:03:06.680 on board and spending more time there. The problem is 0:03:06.760 --> 0:03:09.239 it doesn't make as much money for them as other 0:03:09.280 --> 0:03:12.519 places where they could serve ads on Facebook and Instagram. 0:03:12.600 --> 0:03:14.960 So last earning cycle three months ago they said this 0:03:14.960 --> 0:03:17.320 will be a twelve to eighteen month process until they 0:03:17.320 --> 0:03:20.720 can close that gap a hundred percent. I'm sure folks 0:03:20.760 --> 0:03:22.760 are looking to get an answer on the progress on 0:03:22.760 --> 0:03:24.560 that front. Hey, Alex, As you wrote in the top 0:03:24.639 --> 0:03:27.519 live blog, investors have been laser focused on spending. But 0:03:27.560 --> 0:03:30.640 the number that caught my eyes this two billion Facebook 0:03:30.680 --> 0:03:34.080 core platform use it based seventy million growth from the 0:03:34.080 --> 0:03:36.640 same time last year. How surprising is that It's a 0:03:36.640 --> 0:03:39.040 bit surprising. Remember, Facebook has been around for what almost 0:03:39.040 --> 0:03:41.760 two decades now, so to see a rise of seventy 0:03:41.760 --> 0:03:45.800 million users and actually clear that benchmark of two billion 0:03:45.840 --> 0:03:49.240 people using Facebook every day is an interesting little number 0:03:49.400 --> 0:03:52.119 for a platform that's been around for a while. They've 0:03:52.120 --> 0:03:54.600 been making changes to Facebook. They've been bringing in things 0:03:54.640 --> 0:03:57.600 like reels. It seems like they're listening to what users 0:03:57.600 --> 0:04:01.120 are liking from perhaps other platforms and bringing that into 0:04:01.440 --> 0:04:04.080 their legacy app. So I'm sure that they will be 0:04:04.080 --> 0:04:07.040 bragging about that mark. Zuckerberg was in the statement in 0:04:07.080 --> 0:04:10.280 the release about that and also about what he's calling 0:04:11.240 --> 0:04:14.080 which is the Year of Efficiency. So those two things 0:04:14.240 --> 0:04:16.400 definitely seem to be the top two that they are 0:04:16.440 --> 0:04:20.159 selling to investors as they let out these earnings today. 0:04:20.400 --> 0:04:23.920 Alex breenca just the perfect summation of all that we've 0:04:23.920 --> 0:04:26.040 just got in the last hour or so. Let's get 0:04:26.279 --> 0:04:28.520 even more of a deep dive for you. Debra Ajo 0:04:28.560 --> 0:04:31.159 Williamson is with US Principle Analyst have written insider Intelligence, 0:04:31.200 --> 0:04:33.120 and you were looking at the daily active users of 0:04:33.160 --> 0:04:36.320 Facebook as well and the engagement. It's interesting both snap 0:04:36.360 --> 0:04:39.200 on Facebook well met to the parent company showing people 0:04:39.240 --> 0:04:42.800 are still coming to their platforms that adding eyeballs, but 0:04:43.040 --> 0:04:47.080 what about the actual revenues about the ads that being bought. Yeah, well, 0:04:47.120 --> 0:04:49.039 I mean it is a good sign, just to say 0:04:49.120 --> 0:04:51.640 right straight out, it is a good sign that both 0:04:51.720 --> 0:04:55.040 daily active users and monthly active users for a platform 0:04:55.120 --> 0:04:58.400 like Facebook that is you know, quite quite old in 0:04:59.080 --> 0:05:03.400 social network to terms, is still gaining right So there, 0:05:03.400 --> 0:05:06.400 really you have to take that is as an important sign. 0:05:06.960 --> 0:05:09.880 Um that said that, you know, I'm pretty confident that 0:05:10.000 --> 0:05:12.719 the gains are mostly going to be outside of the 0:05:12.800 --> 0:05:16.440 core advertising markets, which would be the United States and Europe. 0:05:16.960 --> 0:05:20.400 Um and and that is where Meta has been able 0:05:20.440 --> 0:05:24.120 to for a long time now generate a significant portion 0:05:24.160 --> 0:05:27.600 of revenue be able to charge more for advertising, uh, 0:05:27.720 --> 0:05:31.440 sophisticated advertisers. And so I think where you're seeing the 0:05:31.480 --> 0:05:34.159 dichotomy here is UM and this is true for staff 0:05:34.200 --> 0:05:37.120 as well. Is that because the growth is in areas 0:05:37.279 --> 0:05:40.919 where there is UM you know, where underdeveloped markets or 0:05:41.240 --> 0:05:45.960 um you know, underdeveloped advertising businesses. Uh, that is impacting 0:05:46.160 --> 0:05:51.159 the the overall revenue picture for the company. Wells also 0:05:51.200 --> 0:05:53.440 to be put into perspective, which I know you highlight 0:05:53.480 --> 0:05:55.720 time and time again. I mean, this is an enormous 0:05:55.760 --> 0:05:58.080 amount of revenue. This company is pulling in thirty two 0:05:58.120 --> 0:06:00.479 billion on a quartity basis, more than a hundred and 0:06:00.520 --> 0:06:03.600 sixteen on an annual But revenue is down and it's 0:06:03.640 --> 0:06:07.400 been down for three straight. Court is now absolutely and 0:06:07.560 --> 0:06:09.560 you know, if we pull back to look at the 0:06:09.600 --> 0:06:12.840 full year, uh, you know, as we expected, Meta closed 0:06:12.839 --> 0:06:15.839 the year with its first year over year decline in 0:06:15.960 --> 0:06:20.080 AD revenue. But the downturn was slightly less than we thought, 0:06:20.200 --> 0:06:24.920 about one percent versus are expected two percent decline. Uh. 0:06:25.120 --> 0:06:27.960 But you know that's that's not actually a good sign 0:06:28.040 --> 0:06:32.359 when you think and pull back to one which was 0:06:32.400 --> 0:06:36.360 a year when worldwide AD revenue grew nearly thirty seven percent. 0:06:37.040 --> 0:06:39.960 So we are we've seen a huge swing in the 0:06:40.000 --> 0:06:44.400 performance of this company, partially because of external factors like 0:06:44.720 --> 0:06:48.520 the worldwide economy, the changes that Apple made to its 0:06:48.560 --> 0:06:53.039 privacy that affect the effectiveness and the efficiency of the advertising, 0:06:53.680 --> 0:06:56.680 but also I mean it's true that I think when 0:06:56.720 --> 0:06:59.599 you think about where Mark Zuckerberg has been focusing his 0:06:59.680 --> 0:07:02.920 time and attention, it's been on the metaverse. And I 0:07:02.960 --> 0:07:05.560 think to some extent last year he took his eye 0:07:05.600 --> 0:07:08.039 off of the ball of the fact that Facebook and 0:07:08.080 --> 0:07:13.760 Instagram are the two biggest worldwide social platforms and there's 0:07:13.760 --> 0:07:16.640 still room to grow. And I think that was something 0:07:16.680 --> 0:07:20.760 that I think they're trying to rectify now going into well, 0:07:20.760 --> 0:07:24.040 he called three year of efficiency, which sounds very much 0:07:24.080 --> 0:07:26.520 like something shareholders have wanted to hear for some time. 0:07:26.560 --> 0:07:29.840 The other thing shareholders like to hear, Deborah, is buy 0:07:29.920 --> 0:07:32.720 backs and more of them, Meta boosting their buy back 0:07:32.760 --> 0:07:36.080 authorization by forty billion. We're sharing on the screen, Uh, 0:07:36.240 --> 0:07:39.760 this chart? Is this just Meta buying its own dip? Yes? 0:07:39.800 --> 0:07:42.760 So this is an area because insider intelligence focuses mostly 0:07:42.840 --> 0:07:45.680 on looking at revenue and usage metrics, UM I can't 0:07:45.680 --> 0:07:49.360 specifically comment on that, but I think anything just bottom 0:07:49.440 --> 0:07:53.080 line that Meta is doing to you know, to improve 0:07:53.320 --> 0:07:57.560 its its profitability, to reduce expenses, to you know, to 0:07:57.680 --> 0:08:00.880 counteract this sort of revenue shortfall is going to be 0:08:00.960 --> 0:08:04.040 good for the company. Deborrah Williamson, thank you so much 0:08:04.040 --> 0:08:07.040 for joining us principal analysts and insider intelligence, and the 0:08:07.080 --> 0:08:10.080 other story we can't get away from. Open ai introducing 0:08:10.280 --> 0:08:13.960 a twenty dollar per month subscription for a premium version 0:08:14.200 --> 0:08:17.800 of chat GPT. Chat GPT Plus will offer access to 0:08:17.880 --> 0:08:21.360 the chat pot even during peak times, with faster responses 0:08:21.560 --> 0:08:24.480 to type queries and early access to new features. Open 0:08:24.520 --> 0:08:27.800 Ai is eagerly trying to find viable business models to 0:08:27.880 --> 0:08:30.559 cover the high cost of running its products, including of course, 0:08:30.760 --> 0:08:34.800 the multimillion billion dollar I should say deal with Microsoft. 0:08:43.080 --> 0:08:47.240 Shares of Pelaton absolutely soaring as the company reported improved 0:08:47.320 --> 0:08:50.320 cash flow and a narrower net loss in the last quarter. 0:08:50.520 --> 0:08:53.719 CEO Barry McCarthy saying, the questions about the viability of 0:08:53.760 --> 0:08:57.440 the business they put to bed? Have they joining us now? 0:08:57.559 --> 0:09:02.360 Shretter Cajuria, director of Internet Pretty Research, ever care should 0:09:02.960 --> 0:09:06.480 are they put to bed? Is extinction behind us? I 0:09:06.559 --> 0:09:08.920 think so first, Paul, thanks for having me. I think 0:09:09.200 --> 0:09:12.080 if a question is not about extinction anymore, I guess 0:09:12.160 --> 0:09:15.160 the question is whether this is going to be an 0:09:15.200 --> 0:09:17.920 epic comeback, which is what Barry said in his in 0:09:18.000 --> 0:09:21.360 his letter, I call it a very very spractical comeback 0:09:21.720 --> 0:09:24.440 right now with the free dash blows that they posted, 0:09:24.520 --> 0:09:28.679 excluding some of the one supplier related costs, what is 0:09:29.120 --> 0:09:33.760 becoming increasingly clear is that this business is self sustainable 0:09:34.320 --> 0:09:36.440 on a free dash bow basis, which is what their 0:09:36.559 --> 0:09:40.920 number one priority was. Board remains unclear is what how 0:09:40.960 --> 0:09:44.199 should you think about growth for this company? You mentioned comeback. 0:09:44.240 --> 0:09:47.000 We asked our own audience if they felt that this 0:09:47.080 --> 0:09:50.120 was evidence of the Peloton come back. These are the results. 0:09:50.160 --> 0:09:56.240 Pretty overwhelming. No, not convince sixty six of respondents. I 0:09:56.240 --> 0:09:59.000 guess what is it that the consumer feels right now 0:09:59.080 --> 0:10:01.800 for Peloton? But how do we assess the user base 0:10:01.840 --> 0:10:05.520 and the growth potential based on the bullish commentary? For management, 0:10:05.760 --> 0:10:08.840 there's certainly a very good fall line for those who 0:10:08.880 --> 0:10:12.959 own the device. The NBA score remains very high. Uh, 0:10:13.000 --> 0:10:17.320 the usage and engagement with the product remains very robust, 0:10:17.400 --> 0:10:20.160 and the retention grades are intrinsically very high. For this 0:10:20.280 --> 0:10:22.280 business when we compare them to some of the other 0:10:22.320 --> 0:10:27.040 subscription based businesses. What is unclear is how many more 0:10:27.160 --> 0:10:31.920 of these UH Internet connected home fitness equipment can they 0:10:31.960 --> 0:10:34.520 sell in the market. What is the actual growth rate? 0:10:34.559 --> 0:10:37.960 How fast is the industry blowing? And can Felton grow 0:10:38.040 --> 0:10:40.320 faster than the overall industry? Are we tapping out of 0:10:40.320 --> 0:10:44.840 the market opportunity or is it is this something that 0:10:44.920 --> 0:10:47.679 can grow in the double digital thrate. The juries are well, 0:10:47.800 --> 0:10:49.520 sorry to interrupted. I was going to say the jury 0:10:49.559 --> 0:10:51.680 is out. As I look across the cell side reaction, 0:10:52.160 --> 0:10:55.920 I guess the concern is we we believe Barry McCarthy 0:10:55.920 --> 0:10:58.760 in the near term, we don't yet have any evidence 0:10:58.800 --> 0:11:01.600 of what the growth story two or three years from now. 0:11:01.679 --> 0:11:05.200 That seems to be the skepticism out there. That's exactly right. 0:11:05.240 --> 0:11:08.520 So what is in their control was cutting down costs, 0:11:08.600 --> 0:11:13.280 headcount reduction, variabilizing the cost from fixed costs of variable costs, 0:11:13.280 --> 0:11:18.360 as well as UH inventory management, better inventory demand management, 0:11:18.360 --> 0:11:20.120 and all that they have done. And it's in the 0:11:20.160 --> 0:11:22.480 past and they've done a great job since very came 0:11:22.520 --> 0:11:24.920 on board. What is not in their control is really 0:11:25.000 --> 0:11:27.960 driving demand. How much of a balance will they need 0:11:28.000 --> 0:11:31.000 to do with marketing spend to drive this incremental demand 0:11:31.360 --> 0:11:35.200 uh and also maintain positive recshual profitability. And what is 0:11:35.280 --> 0:11:38.840 also what is unclear among those who are not very 0:11:38.880 --> 0:11:42.440 happy with Peloton is the recent shift in outsourcing their 0:11:42.480 --> 0:11:45.920 customer service and so they experience that customers used to 0:11:46.000 --> 0:11:49.280 have is not the same in terms of expecting the 0:11:49.480 --> 0:11:51.880 you know, the the customer service that they have been 0:11:52.559 --> 0:11:56.319 as well as the delivery expectations of the equipment. Yeah, 0:11:56.320 --> 0:11:59.400 you've got to build your own. I'm I'm interested. Therefore, 0:11:59.480 --> 0:12:01.679 in what they now need to prioritize and execute on. 0:12:01.880 --> 0:12:04.480 Is it more important than these partnerships like the exporting 0:12:04.520 --> 0:12:07.040 goods Amazon that they work out, or is it about 0:12:07.080 --> 0:12:10.000 self investment ensuring that they are updating the act as 0:12:10.080 --> 0:12:12.880 they need to, that they are improving customer services they 0:12:12.880 --> 0:12:15.360 need to. It will be a blend of bolt Uh. 0:12:15.520 --> 0:12:19.400 It is very clear that customer service needs to be 0:12:19.400 --> 0:12:21.640 better than what it has been at the US and best, 0:12:21.960 --> 0:12:26.080 but increasingly important is the incremental user base that they 0:12:26.080 --> 0:12:30.600 will get. So the key growth drivers that they will 0:12:30.640 --> 0:12:33.880 benefit from our not only the distribution partners that you 0:12:34.000 --> 0:12:37.120 called out and increasing those who include include more retailers, 0:12:37.120 --> 0:12:40.640 but also international markets. They launched tread in Australia they 0:12:40.679 --> 0:12:44.920 could expand into different countries as well as product category 0:12:45.000 --> 0:12:49.400 expansion and what they call fitnesses and service product which 0:12:49.440 --> 0:12:52.240 is really the rental program, as well as certified creon 0:12:52.400 --> 0:12:54.719 which is if you own some cells that you want 0:12:54.720 --> 0:12:57.360 to sell that and that drives. Essentially, they are trying 0:12:57.360 --> 0:13:01.200 to make it easy for an average customer do do 0:13:01.400 --> 0:13:05.560 buy this relatively more expensive equipment right? They also relied, 0:13:05.600 --> 0:13:08.480 of course on promotions and holiday season sales thanks to 0:13:08.760 --> 0:13:12.680 Schwetter Cajurior Director of Internet Equity Research at Evercred. Now 0:13:12.720 --> 0:13:16.600 coming up some of my exclusive conversation with Palenteers CEO 0:13:16.920 --> 0:13:21.840 Alex Carp That is always come next, a fascinating combative conversation. 0:13:22.000 --> 0:13:38.120 This is Bloomberg Palentier, the at times mysterious data analysis 0:13:38.200 --> 0:13:41.720 software firm, is making more commercial deals. It's a change 0:13:41.720 --> 0:13:45.280 of strategy for a company that's thrived in chaos, winning 0:13:45.320 --> 0:13:48.920 government and military contracts from the pandemic and war in Ukraine. 0:13:49.080 --> 0:13:52.320 I sat down for an exclusive interview with Palans CEO 0:13:52.400 --> 0:13:55.360 Alex Carp and asked him how vestors should view him 0:13:55.440 --> 0:13:59.319 his view on Silicon Valley and global text perspective on Palenteer. 0:13:59.400 --> 0:14:03.760 Take listen, we are a company whose most important purpose 0:14:03.880 --> 0:14:07.199 is to power the West to to even higher heights 0:14:07.559 --> 0:14:10.360 in the commercial and in the government context. And we've 0:14:10.360 --> 0:14:12.640 done this in any terror in the kinds of the pandemic, 0:14:12.679 --> 0:14:14.880 and the context of war, in the context of data protection. 0:14:15.280 --> 0:14:17.280 And you really can't do that if you're going to 0:14:17.400 --> 0:14:21.960 also transfer those technologies indirectly directly your adversaries, and we've 0:14:22.000 --> 0:14:25.560 never done it. You're talking on stage about how your 0:14:25.640 --> 0:14:28.800 public company and you have a responsibility to your shareholders. 0:14:28.800 --> 0:14:31.640 And at times in the last twenty years, shareholders have 0:14:31.720 --> 0:14:33.640 complained to you like why are you doing this it's 0:14:33.720 --> 0:14:36.920 loss making or why are you not doing that? And 0:14:37.400 --> 0:14:40.080 we talked about your strategy. Investors haven't really cheered it. 0:14:40.120 --> 0:14:43.280 If you clearly go off the share price performance, what 0:14:43.400 --> 0:14:45.600 is your message to them today about the dealers are 0:14:45.600 --> 0:14:49.120 announcing honest for that. So we are a company that 0:14:49.280 --> 0:14:52.960 has a primary mission. The primary mission is to make 0:14:53.320 --> 0:14:58.080 the West stronger and better whatever that mission has secondarily 0:14:58.280 --> 0:15:02.000 led to to see one percent Tager over twenty years, 0:15:02.000 --> 0:15:04.720 thirty five percent Kager in the US government and the 0:15:04.760 --> 0:15:06.640 share price is the thing is I think a little 0:15:06.640 --> 0:15:09.200 bit of a red herring because all teck us down. 0:15:09.240 --> 0:15:11.240 I don't think our shares have been any more punished 0:15:11.240 --> 0:15:14.920 than anyone else's. So if you are an investor and 0:15:14.960 --> 0:15:18.560 you want to go long on transforming our country and 0:15:18.680 --> 0:15:21.720 our allies, you have a home appound here. I have 0:15:21.920 --> 0:15:25.120 never ever, ever wavered from that statement. And if you 0:15:25.160 --> 0:15:27.680 don't want to invest in us because of that, you shouldn't. 0:15:27.680 --> 0:15:30.560 And if you're invest in us thinking I'm gonna change, 0:15:30.560 --> 0:15:33.880 you're making a mistake. You we lay our cards on 0:15:33.920 --> 0:15:38.120 the table. There is nothing besides transparency, or we haven't. 0:15:38.760 --> 0:15:41.000 When we went to the Ukraine, I didn't ask them 0:15:41.040 --> 0:15:43.320 can you pay us? I said here's the product. If 0:15:43.360 --> 0:15:45.200 I had gone to standard investor be like, well, you 0:15:45.200 --> 0:15:47.440 can't do this until they pay you. When we started 0:15:47.440 --> 0:15:50.280 off in America on the pandemic and in Britain, we said, look, 0:15:50.320 --> 0:15:53.720 we can help. This is the primary mission of our company. 0:15:54.080 --> 0:15:56.960 And I think where I'm very aligned with investors is 0:15:57.160 --> 0:16:00.280 they're hearing the truth. I'm not saying, hey, we might 0:16:00.360 --> 0:16:03.320 change this prosop policy. We might do crazy deals in 0:16:03.360 --> 0:16:07.080 adversarial countries, we might put the other missions ahead of 0:16:07.080 --> 0:16:08.720 our point. No. And by the way, I tell the 0:16:08.720 --> 0:16:12.600 most important investors that every day Palntarians, and I tell 0:16:12.600 --> 0:16:15.480 our retail investors, whom I revere that every time I 0:16:15.520 --> 0:16:18.640 go on TV. And you know when you're buying, when 0:16:18.680 --> 0:16:21.480 you buy a pounder in a spirit of transparency. You 0:16:21.680 --> 0:16:26.080 yourself has sold stock regularly since the lockoff expiry in 0:16:26.840 --> 0:16:30.880 one um, in the full, in the fairness of full transparency. 0:16:31.200 --> 0:16:34.640 In the last year or so, I've only sold for 0:16:34.720 --> 0:16:38.000 tax reasons. There's been no financial sales. I'm grateful to 0:16:38.000 --> 0:16:40.920 be here with you in Palo Alto. I'm surprised to 0:16:40.960 --> 0:16:43.040 be here with you in Palo Alto. You've you've talked 0:16:43.040 --> 0:16:48.320 about monoculture in Silicon Valley. You moved the company to Colorado, 0:16:48.920 --> 0:16:51.680 and you've not come back often in the last three 0:16:51.720 --> 0:16:55.120 years because the Silicon Valley is obviously failed in this 0:16:55.200 --> 0:16:59.480 mission to produce technology that's useful and that the useful 0:16:59.520 --> 0:17:01.600 for the world. It makes it a better place. And 0:17:01.640 --> 0:17:04.400 we were I think the first reasonably large company to leave, 0:17:05.040 --> 0:17:07.120 and now I'm very happy to come back and say, look, 0:17:07.440 --> 0:17:10.960 you know on occasion, you know, our position is a 0:17:11.000 --> 0:17:13.760 position we're proud of. And be surrounded again by people 0:17:13.760 --> 0:17:17.000 who disagree with me. There are many wokes engineers I 0:17:17.000 --> 0:17:18.879 think those are words you've used, that have lost their 0:17:18.960 --> 0:17:22.160 jobs recently at some tech giants. I know that you're 0:17:22.200 --> 0:17:25.119 looking at growth. Are you open to hiring those engineers? 0:17:26.040 --> 0:17:28.520 Do not join parent here if you're not willing to 0:17:28.520 --> 0:17:32.960 support the US militaryans allies. You can have, by the way, 0:17:32.960 --> 0:17:35.800 any political opinion you want, as long as that's not 0:17:35.920 --> 0:17:38.479 a question for you. If it is a question for you, 0:17:38.600 --> 0:17:44.040 do not punt here is not your home. Unapologetic, uncompromising. 0:17:44.480 --> 0:17:48.359 You know, he knows where he stands. He is completely 0:17:48.400 --> 0:17:52.199 comfortable with palenters offering to government, to security services. And 0:17:52.240 --> 0:17:54.240 that was just a small glimpse of a man that 0:17:54.359 --> 0:18:05.120 many in Silicon Valley of shunned because he has shunned them. 0:18:05.119 --> 0:18:07.480 Welcome back to Bloomberg Technology and Caroline had in New 0:18:07.560 --> 0:18:09.600 York and to end New and San Francisco and the 0:18:09.640 --> 0:18:13.480 tech sector really getting lift off today, unsurprisingly from the 0:18:13.520 --> 0:18:16.560 macro strands from the FED. Yeah yeah, And I think 0:18:16.560 --> 0:18:18.960 I'm saying this is kind of the first big post 0:18:19.000 --> 0:18:21.560 FED rally since July. And I go straight to one chart, 0:18:21.800 --> 0:18:24.840 which is now DA futures jump, two year yield goes down. 0:18:24.880 --> 0:18:27.720 It is a snapshot of the story, and we have 0:18:27.760 --> 0:18:30.359 one of the great Bloomberg minds joining us at the 0:18:30.359 --> 0:18:31.840 moment who can get into this. But my point is 0:18:31.920 --> 0:18:35.120 very simple. Twenty five basis point hike and a warning 0:18:35.160 --> 0:18:38.120 from pal that while they're making progress on inflation, they 0:18:38.240 --> 0:18:41.120 still foresee hikes to come. So for the market, it's 0:18:41.119 --> 0:18:43.879 about when does the policy pivot come. But in the 0:18:43.880 --> 0:18:47.120 context of tech, you ask the question, higher rates discount 0:18:47.160 --> 0:18:49.400 the present value of future profits, and that is why 0:18:49.440 --> 0:18:52.960 we look so closely at the relationship between yields and 0:18:53.119 --> 0:18:55.920 the NASA one NAZAC futures. In this case. You talked 0:18:55.960 --> 0:18:58.480 about bitcoin earlier, but let's just talk about risk assets. 0:18:58.480 --> 0:19:00.920 It was a pretty broadly I'm looking at them as 0:19:00.920 --> 0:19:03.879 that one, but also more speculative corners of the market, 0:19:03.960 --> 0:19:06.760 so the Arc Innovation ETA and also the Goldman Sachs 0:19:07.040 --> 0:19:10.359 Nonprofitable Tech Index. In other words, these stocks that trade 0:19:10.359 --> 0:19:13.879 at high wall extreme multiples, high multiples some relief for 0:19:13.920 --> 0:19:16.520 them because they have also been the most downtrodden corners 0:19:16.520 --> 0:19:20.480 of the market through this hiking cycle. And now we 0:19:20.520 --> 0:19:22.720 start to look at there's some more positive future, and 0:19:22.760 --> 0:19:25.040 that includes bitcoin, which, let's be honest, carry you and 0:19:25.080 --> 0:19:28.520 I both said earlier it's a risk asset inflation hedge 0:19:28.760 --> 0:19:31.080 not so much. Not yet, let's get into all of it. 0:19:31.160 --> 0:19:33.800 We're really pleased to say back two days in a 0:19:33.880 --> 0:19:36.920 row is about Lee's with us, and really you were 0:19:37.320 --> 0:19:41.320 racing yourself for the technology reaction to this macro story. First, 0:19:41.359 --> 0:19:44.560 let's dig into the tech starres and the rally on upwards. 0:19:44.600 --> 0:19:46.520 This is because they've been the most beaten up of late. 0:19:47.000 --> 0:19:49.600 Yes and Ed had a great summary, making my job 0:19:49.640 --> 0:19:52.320 a lot easier, but a lot of textures really extended 0:19:52.359 --> 0:19:55.000 their gains even hitting session highs. You have the legs 0:19:55.000 --> 0:19:59.119 of neda Amazon alphabet all soaring north of two because, 0:19:59.480 --> 0:20:02.160 let's face it, they were pummeled last year. They don't 0:20:02.200 --> 0:20:04.720 really like rising interest rates because that's not good for them, 0:20:04.720 --> 0:20:07.840 that's not good for their projected profits. So now it's 0:20:07.880 --> 0:20:10.480 welcome used they're happy, they celebrated it, they cheered it. 0:20:10.720 --> 0:20:13.200 As Ed mentioned, nastag is up two percent and it's 0:20:13.280 --> 0:20:16.159 probably just going to be the start for them. And today, 0:20:16.160 --> 0:20:19.560 of course, of Meta, I'm sure you're covered it. Also postmarket, 0:20:19.520 --> 0:20:22.720 they're trading well because of sales speed and Rosie outlooks. 0:20:22.760 --> 0:20:25.119 So maybe it's the start of a new regime. As 0:20:25.200 --> 0:20:28.640 some people have said. On a daylight today, there's two 0:20:28.680 --> 0:20:31.119 places I go, fed go on the Bloomberg term and 0:20:31.119 --> 0:20:32.840 all just to get a sense of where we sit 0:20:33.240 --> 0:20:36.280 with rates in this country. But then I go to bitcoin, 0:20:36.440 --> 0:20:39.400 and you heard us talking about it bitcoin the risk 0:20:39.480 --> 0:20:43.240 asset reaction is that a fair moved by me to 0:20:43.320 --> 0:20:46.879 make it kind of is because so bitcoin, for some 0:20:46.960 --> 0:20:49.320 reason dip a little bit around two thirty when power 0:20:49.400 --> 0:20:52.000 were starting to speak, but since then it's soared four percent. 0:20:52.320 --> 0:20:54.600 Last I checked before I walked over here, it was 0:20:54.880 --> 0:20:56.920 it paired some of its games, but still up around 0:20:57.040 --> 0:20:59.840 point three. So a lot of the people said that, 0:21:00.000 --> 0:21:03.399 you know, this is like bitcoin is behaving like a texture. 0:21:03.440 --> 0:21:07.200 So it's obviously rising as well. But I talked about 0:21:07.200 --> 0:21:09.879 this yesterday. Arcane Research said that it's going to be 0:21:09.920 --> 0:21:12.360 a bad month for a bitcoin because the FEDS path 0:21:12.520 --> 0:21:15.040 is still unclear, Like, yes, we got a downshift today 0:21:15.240 --> 0:21:17.680 only twenty five bibs, but then are we going to pause? 0:21:17.720 --> 0:21:20.120 Are we gonna pivot? So it still remains to be seen, 0:21:20.119 --> 0:21:22.280 but there are still some people who are very bullish 0:21:22.280 --> 0:21:24.440 on bitcoin. I mean, it's worth remembering that quite often 0:21:24.440 --> 0:21:27.960 the moves we see precisely after the FED announcement and 0:21:28.119 --> 0:21:31.800 press conference are completely undone the next day, so we wait, 0:21:31.880 --> 0:21:35.640 we watch for tomorrow's at price action. But longer term, 0:21:35.680 --> 0:21:38.520 the bulls are still very bullish about bitcoin. I mean, 0:21:38.640 --> 0:21:41.560 we're gonna sell past twenty three thousand, according to one 0:21:41.600 --> 0:21:44.920 particular e t F queen. Yes, so twenty three thousand 0:21:45.000 --> 0:21:46.800 is where we're at today. But according to the e 0:21:46.920 --> 0:21:49.240 t F queen named Kathy Would, we're going to hit 0:21:49.480 --> 0:21:52.920 one one million in the next decade, which is really 0:21:52.960 --> 0:21:55.800 just seven years from now, and she said several reasons, 0:21:55.800 --> 0:22:00.359 But then that's four thousand two higher from where we 0:22:00.400 --> 0:22:03.359