WEBVTT - SJ's Jindel on Walmart Buying Jet.com: Insulting Mistake(Audio)

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<v Speaker 1>Broadcasting live to New York, Bloomberg even to Washington, d C.

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<v Speaker 1>Bloomber to Boston, Bloomberg twelve hundred to San Francisco, Bloomberg

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<v Speaker 1>nine to the country and around the globe the Bloomberg

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<v Speaker 1>Radio Plus Appen Bloomberg Dot Gone. This is taking stock Walmart.

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<v Speaker 1>Walmart has ruled brick and mortar retail, but what about

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<v Speaker 1>e commerce? It has spent billions to expand its online operations.

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<v Speaker 1>Walmart has hired thousands of workers, open two offices in

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<v Speaker 1>Silicon Valley, and it's built a large e commerce distribution center.

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<v Speaker 1>And now it's buying Jet dot Com. Will that help

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<v Speaker 1>Walmart in its battle against Amazon? That's next? Right now,

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<v Speaker 1>Let's go to Charlie Pellett in the Bloomberg news room

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<v Speaker 1>for Bloomberg Business. Flat man, I think of him Fox

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<v Speaker 1>Amazon down one tenth of one percent, of Walmart down

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<v Speaker 1>six tenths of one percent. Stocks are lower, pulling back

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<v Speaker 1>from a record will changed and fluctuating. Right now, We've

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<v Speaker 1>got the SMP five hundred index down four to seventy eight.

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<v Speaker 1>To drop there of two tenths of one percent down,

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<v Speaker 1>Industrials down thirty nine, a decline also of two tenths

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<v Speaker 1>of one percent. The nastak Compositive Index down eighteen to

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<v Speaker 1>fifty two oh to a drop of four tenths of

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<v Speaker 1>one percent. A lot of concern the gains will be

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<v Speaker 1>hard to extend as companies wrap up a fifth straight

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<v Speaker 1>quarter of earnings declines. Schelle Meyer's head of US Economics

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<v Speaker 1>at Bank of America Merrill Lynch, And on Bloomberg Television

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<v Speaker 1>this morning, she was asked how the July jobs report

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<v Speaker 1>might have altered her views about the September FED meeting.

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<v Speaker 1>We didn't change our FED call. We've been in the

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<v Speaker 1>December camp and I feel just as confident about that. UM.

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<v Speaker 1>The labor market data has been clearly rebussed. On a

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<v Speaker 1>six month moving average, we're running at just under hundred

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<v Speaker 1>ninety thousand monthly job growth. That's quite strong. That's all

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<v Speaker 1>bit better than what we were expecting. However, on the

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<v Speaker 1>other side, the GDP numbers, I've looked a lot bit softer. UM.

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<v Speaker 1>We've seen some weekending and I'm survey data as well.

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<v Speaker 1>Steinhoff International Holdings European Acquisitions free has swept across the

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<v Speaker 1>Atlantic as the South African retailer agreed to buy Mattress

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<v Speaker 1>firm holding for about two point four billion dollars. That

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<v Speaker 1>announcement sent the company's shares soaring. In the US, shares

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<v Speaker 1>of Mattress Firm rallying one hundred four percent, up thirty

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<v Speaker 1>three ninety seven to sixty three dollars and seventy two cents.

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<v Speaker 1>Burger King's latest new items and latest item taking a

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<v Speaker 1>stab at Chippolti Mexican grill as In introduces the waparrito. Now,

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<v Speaker 1>let's take a look at some of the other stories

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<v Speaker 1>making news. Thank you, Charlie from the Boomberg news room.

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<v Speaker 1>I'm Raimi in aescentio. Donald Trump is focusing his economic

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<v Speaker 1>message on boosting jobs and making America more competitive. In

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<v Speaker 1>a speech today to the Detroit Economic Club, Trump said

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<v Speaker 1>his proposals include reducing regulations, increasing energy production, and tax reform.

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<v Speaker 1>I will have one overriding goal when it comes to regulation.

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<v Speaker 1>I want jobs and I want wealth to stay in America.

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<v Speaker 1>Hillary Clinton will deliver an address on the economy on Thursday.

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<v Speaker 1>Dissatisfied Republicans now have an alternative to Donald Trump. Conservative

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<v Speaker 1>Evan McMullen is running for president. He's a CIA veteran

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<v Speaker 1>and former chief policy director of the House of Representatives,

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<v Speaker 1>he tells ADC News quote. I humbly allfer myself as

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<v Speaker 1>a leader who can give millions of disaffected Americans a

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<v Speaker 1>conservative choice for presidents. Delta Airlines has canceled around four

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<v Speaker 1>hundred fifty flights so far today after its computer systems

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<v Speaker 1>crashed worldwide. Thousands of passengers have been stranded on a

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<v Speaker 1>busy travel day. That number is likely to grow. More

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<v Speaker 1>than a thousand flights were delayed, according to flight tracking

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<v Speaker 1>site flight Stats. About eleven hours into the outage, limited

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<v Speaker 1>flights had resumed, but widespread delays cancelations are ongoing, and

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<v Speaker 1>the parents of a thirty year old woman found dead

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<v Speaker 1>after she went for a run near her home in

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<v Speaker 1>Howard Beach Queen's say they're counting on authorities to catch

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<v Speaker 1>their daughter's killer. Karina Patronto's mother says the assailant must

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<v Speaker 1>know the world is seeking justice. A ten thou dollar

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<v Speaker 1>award is being offered for information leading to an arrest.

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<v Speaker 1>Global News twenty four hours a day, powered by more

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<v Speaker 1>than journalists and analysts in more than one twenty countries.

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<v Speaker 1>I'm Ramie in Essensio. This is Bloomberg, Charlie, and we

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<v Speaker 1>thank you, and again recapping Stock's lawre SMP five index

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<v Speaker 1>down four to eight, a drop there of two tents

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<v Speaker 1>of one percent. I'm Charlie Peloton. That's a Bloomberg business flash.

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<v Speaker 1>This is taking Stock with Kathleen Hayes and Pimpox on

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<v Speaker 1>Bloomberg Radio. Three point three billion dollars. Three point three

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<v Speaker 1>billion dollars is the price that Walmart says it will

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<v Speaker 1>pay for the e commerce startup Jet dot Com. Here

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<v Speaker 1>to tell us more is strategic Jinder. He is the

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<v Speaker 1>president of s J Consulting and he's got details, all right,

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<v Speaker 1>So states, tell me a little bit about this deal

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<v Speaker 1>from your perspective and maybe just give people a quick

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<v Speaker 1>sentence about your background so they understand how you come

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<v Speaker 1>to be an expert in this world of retail but

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<v Speaker 1>also logistics. You know, we have worked in the space

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<v Speaker 1>of transportation and logistics from the perspective of how it

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<v Speaker 1>helps shippers, including retailers. UH, and we have many of

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<v Speaker 1>them as our customers who are in brick and mortar

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<v Speaker 1>and online retail. UH developed their distribution strategy to get

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<v Speaker 1>the products either to the stores or get it into

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<v Speaker 1>hands of the consumer. And there are two elements to

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<v Speaker 1>e commerce success. One is having a good technology that

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<v Speaker 1>helps people find that you're very use the friendly to

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<v Speaker 1>buy online. But then the more expensive than the challenging

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<v Speaker 1>part is getting those orders and getting them out through

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<v Speaker 1>a good warehouse, distribution system and transportation network that gives

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<v Speaker 1>the customers a wonderful experience in getting the right product

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<v Speaker 1>on the right date, in right condition. Alright, So sate

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<v Speaker 1>to the distribution systems that are used by companies like

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<v Speaker 1>Walmart and Amazon, and you fill in the blank. Do

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<v Speaker 1>they use one that is common or do they have

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<v Speaker 1>very heterogeneous distribution systems? Are they really that different? So

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<v Speaker 1>they're they're not very different in a very simple sense

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<v Speaker 1>for the people are listening to this. The differences come

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<v Speaker 1>in the way that the information gets received and processed

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<v Speaker 1>to get into the hand of the people who are

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<v Speaker 1>picking those items, and then getting it into the boxes,

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<v Speaker 1>and then getting those boxes out of those buildings in

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<v Speaker 1>the hands of the people who are gonna move them

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<v Speaker 1>through the country, through the market or the city to

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<v Speaker 1>get it in the hands of the person who has

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<v Speaker 1>ordered it. Okay, that's the ordering and distribution sections. The

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<v Speaker 1>technology piece that you described is that why Walmart is

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<v Speaker 1>buying jet dot com. There is probably the only thing

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<v Speaker 1>they could be getting from Jet dot com. And I've

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<v Speaker 1>been paying attention and I even tested Jet dot com.

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<v Speaker 1>Then I started getting promotional material for them. In my view,

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<v Speaker 1>I am absolutely shocked that the board and the CEOs

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<v Speaker 1>are falling for this. Buying Jet dot Com is Noway're

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<v Speaker 1>going to help them compete with the Amazon. It is

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<v Speaker 1>almost insulting to think that Jet dot com can compete

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<v Speaker 1>with And why is that? Because Jet dot Com is

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<v Speaker 1>like a baby going up against pim Fox. He can't walk,

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<v Speaker 1>he can't talk. Jet dot com is nothing. But if

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<v Speaker 1>they had to be five million for it to buy

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<v Speaker 1>its technology a little bit, and maybe the name, the

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<v Speaker 1>only thing they get from Jet dot com, the name

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<v Speaker 1>that better than Walmart dot Com. But I can tell

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<v Speaker 1>you they could have hired former FedEx executives who have

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<v Speaker 1>done great job in branding a name, and they could

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<v Speaker 1>have given them a better name for a few million

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<v Speaker 1>dollars because Walmart dot com reminds the young teenagers and

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<v Speaker 1>the millennium generation that after Grandpa's and they don't buy

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<v Speaker 1>from Walmart dot com no matter how good the deal is.

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<v Speaker 1>Walmart buying Jet dot Com has been described in the

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<v Speaker 1>same paragraph as something called gain sharing. This is luring

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<v Speaker 1>buyers to add items to their orders to cut the

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<v Speaker 1>shipping costs and to pay with a debit card instead

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<v Speaker 1>of a credit card to reduce transaction fees. Is that

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<v Speaker 1>how you understand it as well? There is an element

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<v Speaker 1>to it, but that is nothing, nothing complicated. Walmart, if

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<v Speaker 1>with all the millions of dollars it paid to bring

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<v Speaker 1>on companies like Deloitte Tush, that was one disaster a

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<v Speaker 1>few years ago. And they've gone from one disaster of

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<v Speaker 1>hiring wrong people to build their e common strategy to

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<v Speaker 1>now buying jet dot com to think it is going

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<v Speaker 1>to be a savior. It will go down pain in

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<v Speaker 1>the history of online retail dot com businesses as the

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<v Speaker 1>most expensive acquisition and the worst one. It was not

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<v Speaker 1>even what I founded million. Why do you think Doug McMillan,

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<v Speaker 1>the chief executive of Walmart, decided to go ahead and

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<v Speaker 1>do this because the people in Bentonville, Walmart headquarters, have

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<v Speaker 1>gotten desperate because their online retail sales are declining. The

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<v Speaker 1>growth rate from being at twenty seven percent growth rate

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<v Speaker 1>in first quarter of to being seven percent in the

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<v Speaker 1>first quarter of sixteen. And they're in a panic mode

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<v Speaker 1>and they are buying companies no matter what it is,

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<v Speaker 1>just to show that they're trying to do something and

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<v Speaker 1>they're actually doing the wrong thing. The board of directors

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<v Speaker 1>of Walmart should stop the PI executives from closing on

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<v Speaker 1>it until they get some fairness opinion, not some bankers

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<v Speaker 1>who don't understand it, but from people who understand the

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<v Speaker 1>core business that this is. And Walmart shares it down

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<v Speaker 1>about a half a percent down even more such as

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<v Speaker 1>a desperation acquisition. And Jet dot Com think about it,

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<v Speaker 1>they were just valued at only one point three billion

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<v Speaker 1>in November, and who else was gonna buy them? Giving

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<v Speaker 1>them six months to a year, they would have run

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<v Speaker 1>out of cash and there would have been nothing left

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<v Speaker 1>for Jet dot Com. Certise Gender President s J Consulting Group,

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<v Speaker 1>thank you very much giving us his thoughts on Walmart

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<v Speaker 1>dot Com or Walmart buying Jet dot Com price tag

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<v Speaker 1>three point three billion in satitious words, bad dollars. This

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<v Speaker 1>is taking stock. I'm pim Fox. This is Bloomberg coming up.

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<v Speaker 1>David Malpass. He has been named to Donald Trump's economic team.

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<v Speaker 1>We're going to learn about taxes, trade, and government regulations.

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<v Speaker 1>That's next,