WEBVTT - Lennar Forecast Disappoints in Challenging Market for Builders 0:00:02.720 --> 0:00:10.600 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.640 --> 0:00:14.600 Bloomberg Intelligence podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:17.880 easterne on Apple, Coarclay, and Android Auto with the Bloomberg 0:00:17.960 --> 0:00:21.080 Business App. Listen on demand wherever you get your podcasts, 0:00:21.400 --> 0:00:23.120 or watch us live on YouTube. 0:00:24.079 --> 0:00:27.160 Let's switch gears to the housing market. Lenar, one of 0:00:27.200 --> 0:00:29.760 the big home builders out there, reported some numbers. We're 0:00:29.760 --> 0:00:31.280 going to break that down and get a better sense 0:00:31.280 --> 0:00:34.000 of what's happening out there in the US housing market. 0:00:34.000 --> 0:00:35.600 To do that, we check with Drew Reddink. He covers 0:00:35.600 --> 0:00:39.479 all the housing stuff for Bloomberg Intelligence. He's safely asconced 0:00:39.520 --> 0:00:42.080 down there in Princeton, New Jersey. You forgot that there's 0:00:42.080 --> 0:00:44.760 a train into New York City from Princeton, but we'll 0:00:44.800 --> 0:00:46.800 get to that later. Drew, talk to us about Leonar. 0:00:46.840 --> 0:00:48.640 What did you hear from our folks there. 0:00:49.680 --> 0:00:52.680 Yeah, it was a pretty tough quarter for Lenar. Orders 0:00:52.680 --> 0:00:56.040 were actually pretty solid there of twelve percent from last year. 0:00:56.080 --> 0:00:59.040 But what management said is that they can see continued 0:00:59.080 --> 0:01:01.560 pressure in the house market and that they had increased 0:01:01.560 --> 0:01:04.880 their use of sales incentives to drive traffic and demand. 0:01:05.000 --> 0:01:08.120 Now for a little bit of context last quarter, and 0:01:08.160 --> 0:01:10.720 we'll wait to see how three Q ultimately shapes out. 0:01:10.760 --> 0:01:15.039 But last quarter, incentives represented thirteen percent of the average 0:01:15.040 --> 0:01:18.400 selling price at home. By comparison, in a normal market 0:01:18.480 --> 0:01:21.760 that's about five to six percent, and some of the 0:01:21.760 --> 0:01:24.839 most important markets Florida, Texas, it's as high as seventeen 0:01:24.959 --> 0:01:28.200 to eighteen percent. So you could see, you know, just 0:01:28.280 --> 0:01:30.839 the extent of how much they're having incentivized to drive 0:01:30.880 --> 0:01:34.039 traffic through the doors, and we saw that ultimately play 0:01:34.040 --> 0:01:36.119 out in the results. Their average order price is down 0:01:36.120 --> 0:01:39.520 about twelve percent, and their guidance for next year, I 0:01:39.560 --> 0:01:41.760 excuse me for four Q was a little soft on 0:01:41.800 --> 0:01:45.400 the orders and delivery side of the business. Now, if 0:01:45.480 --> 0:01:48.240 Lenard comes out and tells us that they intentionally pull 0:01:48.320 --> 0:01:51.160 are intentionally pulling back on deliveries because they think they 0:01:51.200 --> 0:01:54.480 could capture some margin upside, I think that could be 0:01:54.520 --> 0:01:57.880 well received. But at the same time, their four Q 0:01:58.040 --> 0:02:01.000 margin guide is still weaker than ex So they did 0:02:01.040 --> 0:02:04.000 say they have some optimism with rates coming down in 0:02:04.040 --> 0:02:06.920 the FED cutting rates, but we'll be listening on the 0:02:06.960 --> 0:02:09.200 call to see if that's actually materializing. 0:02:10.000 --> 0:02:12.239 So, Drew, do you see this as isolated to Lenar 0:02:12.520 --> 0:02:14.560 or a broader theme here in the housing market. I mean, 0:02:14.600 --> 0:02:17.359 of course, we have luxury home builder Toll Brothers reporting 0:02:17.520 --> 0:02:18.639 about a month ago today. 0:02:20.360 --> 0:02:22.280 Yeah, so Lenar is a little bit of a different 0:02:22.320 --> 0:02:26.120 animal within the public space. You have to remember, they're 0:02:26.160 --> 0:02:29.760 primarily focused on driving higher sales volumes, and what they've 0:02:29.800 --> 0:02:32.800 said consistently over the last couple of years is that 0:02:32.840 --> 0:02:36.400 they're willing to sacrifice gross margin to drive volumes. So 0:02:36.440 --> 0:02:38.760 when you see a weakness in demand for Lenar, you're 0:02:38.760 --> 0:02:41.480 going to see it show up primarily in their gross margin. 0:02:42.160 --> 0:02:46.280 That being said, the issues that they're facing are really 0:02:46.320 --> 0:02:48.480 across the spectrum. I mean, no builder can get away 0:02:48.480 --> 0:02:51.760 from the fact that affordability continues to hover near the 0:02:51.760 --> 0:02:54.959 lowest levels of all time. I think that the recent 0:02:55.040 --> 0:02:58.160 pullback in rates will help a little bit, but in 0:02:58.240 --> 0:03:00.360 terms of it being you know, the silver bowl for 0:03:00.400 --> 0:03:02.720 the broader housing market and getting us back to normalized 0:03:02.800 --> 0:03:04.960 levels of demand, you know, I think I think there's 0:03:05.000 --> 0:03:08.240 other factors at play that prevent that from happening immediately. 0:03:08.760 --> 0:03:11.880 So drew rates remain incredibly high, especially for the average 0:03:11.880 --> 0:03:13.720 home buyers. So what do you make of the fact 0:03:13.760 --> 0:03:16.280 that the S one to five home The index at 0:03:16.280 --> 0:03:18.480 tract home builders is up thirteen percent. 0:03:18.639 --> 0:03:21.640 You're today, Yeah, great question. 0:03:21.680 --> 0:03:24.280 And if you look at how the stocks have behaved 0:03:24.520 --> 0:03:27.120 really since mid June, they're up over thirty percent, and 0:03:27.160 --> 0:03:30.680 that was really the stocks moving in anticipation of rates 0:03:30.720 --> 0:03:32.680 coming down. In the FED cutting rates, you could also 0:03:32.720 --> 0:03:35.720 see that and how mortgage rates have responded. They moved 0:03:35.760 --> 0:03:37.600 up ahead of the rate cut, and if you look 0:03:37.600 --> 0:03:40.200 at where rates are today, actually they're up twenty five 0:03:40.240 --> 0:03:43.760 basis points since the FED cut. It's kind of reminiscent 0:03:43.800 --> 0:03:45.640 of the last time they cut when rates, you know, 0:03:45.800 --> 0:03:48.680 rallied pretty low ahead of the rate cut and then 0:03:48.720 --> 0:03:52.360 after that actually came in, you saw rates move back higher. 0:03:52.440 --> 0:03:55.240 So I certainly think that, you know, builder stocks are 0:03:55.240 --> 0:03:58.320 always going to react to rates. The group right now 0:03:58.440 --> 0:04:02.320 is trading at about one point nine times book. There's 0:04:02.320 --> 0:04:03.800 an old rule of thumb in the industry that you 0:04:03.800 --> 0:04:06.200 buy the builders at one one times, you sell them 0:04:06.240 --> 0:04:09.720 at two times. Certainly, there have been cases where they've 0:04:09.760 --> 0:04:12.640 traded outside those ranges over the last twenty years or so, 0:04:13.200 --> 0:04:15.320 but what has been pretty consistent is that once they 0:04:15.320 --> 0:04:17.640 get to that kind of two point two to and 0:04:17.680 --> 0:04:22.360 a quarter times book, there has been resistance from evaluation perspective, 0:04:22.400 --> 0:04:23.520 so it's something to keep an eye on. 0:04:24.080 --> 0:04:26.960 Drew talk to us about the existing home market today. 0:04:26.960 --> 0:04:29.440 How's that is? Are people that are sitting on their homes? 0:04:29.480 --> 0:04:31.440 Are they any incentive to get out? 0:04:32.800 --> 0:04:35.080 Yeah? Great question. I mean, the existing home market is 0:04:35.080 --> 0:04:38.840 still pretty much frozen. Volumes are twenty to twenty five 0:04:38.880 --> 0:04:42.640 percent below what would be considered normal, And you're right, 0:04:42.680 --> 0:04:46.760 the incentive just isn't there. You have, you know, fifty 0:04:46.800 --> 0:04:49.400 to seventy five percent of mortgages are below four and 0:04:49.400 --> 0:04:52.440 a half percent, So even as the headline rate comes 0:04:52.440 --> 0:04:55.719 down to six and a quarter, we're still talking about 0:04:55.720 --> 0:04:58.800 a pretty big delta. When you layer on top of 0:04:58.839 --> 0:05:00.840 that that, you know, it's not just the rate they're 0:05:00.880 --> 0:05:03.279 trading in, but home prices are up fifty percent from 0:05:03.279 --> 0:05:06.240 twenty nineteen. So when you look at the total cost 0:05:06.320 --> 0:05:10.480 of ownership, factoring in property taxes and higher insurance costs, 0:05:10.839 --> 0:05:13.039 that monthly payment is significantly higher. 0:05:14.120 --> 0:05:16.039 I mean, so, I mean, I'm going to speak for 0:05:16.320 --> 0:05:19.040 the normal lenders of the world, the Sebastians of the world. 0:05:19.240 --> 0:05:22.480 How are young people getting into the ownership these days? 0:05:22.480 --> 0:05:24.239 You get about thirty second Street to fix this problem 0:05:24.240 --> 0:05:24.960 for us. 0:05:25.680 --> 0:05:28.200 Yeah, a great question, and afraid to kick. Can't be 0:05:28.279 --> 0:05:31.000 fixed that quick. But what we're actually seeing is a 0:05:31.040 --> 0:05:33.560 significant shift towards the rental market. If you look at 0:05:33.560 --> 0:05:38.560 household formations over the last quarter, household growth was exclusively 0:05:38.680 --> 0:05:43.880 driven by renner occupied units. So it has become increasingly challenging, 0:05:43.880 --> 0:05:46.719 and we see that the rental market has been the beneficiary. 0:05:47.279 --> 0:05:50.200 I don't know, man, I mean, Sebastian Nora. I feel 0:05:50.200 --> 0:05:51.960 for you, guys. I don't know how the young folks 0:05:52.120 --> 0:05:54.520 today take forever are going to do it. If you're 0:05:54.520 --> 0:05:56.840 reading a home building analyst of Bloomberg Intelligence, thanks so 0:05:56.920 --> 0:05:58.160 much for joining us. He's down there in Prince of 0:05:58.160 --> 0:06:01.000 New Jersey again, Leonora fill the effects of kind of 0:06:01.000 --> 0:06:03.039 a little bit of a tougher market at their rates 0:06:03.080 --> 0:06:04.640 come down a little bit, but they're still, you know, 0:06:04.720 --> 0:06:07.839 higher than a lot of people want them to be. 0:06:07.960 --> 0:06:11.080 And still these new homebuilders have to, you know, supply 0:06:11.120 --> 0:06:13.159 a lot of incentives just to get people into the homes. 0:06:13.560 --> 0:06:16.160 So we'll stay on top of that. Stay with us. 0:06:16.279 --> 0:06:18.599 More from Bloomberg Intelligence coming up after this. 0:06:22.240 --> 0:06:25.960 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:06:26.040 --> 0:06:29.440 weekdays at ten am Eastern on Applecarclay, and Android Auto 0:06:29.520 --> 0:06:32.599 with the Bloomberg Business app. Listen on demand wherever you 0:06:32.640 --> 0:06:36.040 get your podcasts, or watch us live on YouTube. 0:06:36.760 --> 0:06:39.440 So obviously some big news out there in Hollywood. ABC 0:06:40.680 --> 0:06:43.640 pulling Jimmy Kimmel's show, I guess indefinitely. I'm not sure 0:06:43.640 --> 0:06:47.679 what that means over some content that some folks found objectionable. 0:06:48.200 --> 0:06:51.640 And this feature the chairman of the FCC, the Federal 0:06:51.680 --> 0:06:55.600 Communications Commission, which is responsible for licensing television stations across 0:06:55.960 --> 0:06:59.839 the country, mister Brendan Carr playing a pretty big role, 0:07:00.240 --> 0:07:03.240 getting the support also of President Trump. Let's see how 0:07:03.279 --> 0:07:07.080 this plays out from a regultary perspective. Matthew Shechittenhelm, He's 0:07:07.160 --> 0:07:10.600 immediate litigation analyst for Bloomberg Intelligence. Matt talk to us 0:07:10.600 --> 0:07:14.920 about the role that the FCC and the chairman, mister Carr, 0:07:14.960 --> 0:07:17.360 are playing in what appears to be, I guess a 0:07:17.400 --> 0:07:20.720 free speech issue with the ABC television network. 0:07:21.280 --> 0:07:22.400 Yeah, that's right, Paul Win. 0:07:22.480 --> 0:07:26.280 When you saw Brendan Carr go on that podcast the 0:07:26.360 --> 0:07:30.440 other day, he was stressing the FCC's role as the 0:07:30.600 --> 0:07:34.720 regulator of the broadcast TV stations that are all across 0:07:34.760 --> 0:07:37.800 the country that have to get a license to carry 0:07:37.840 --> 0:07:40.120 their content, and the law says that they have to 0:07:40.160 --> 0:07:43.920 act in the public interest. And Brendan Carr has been 0:07:43.960 --> 0:07:47.160 taking a very aggressive approach to the meaning of what 0:07:47.360 --> 0:07:49.960 is in the public interest. We have a long history 0:07:50.640 --> 0:07:52.960 under that provision of the law goes back. 0:07:52.840 --> 0:07:55.000 To Nixon, the Reagan era. 0:07:55.600 --> 0:07:59.040 Historically, the FCC used to look at whether broadcasters were 0:07:59.080 --> 0:08:02.640 being fair or not and whether they were being balanced. 0:08:02.760 --> 0:08:05.800 They've largely gotten out of that business. Brendan Carr seems 0:08:05.800 --> 0:08:11.400 to be reinvigorating the push to get into broadcast content 0:08:11.480 --> 0:08:14.040 decisions that you know, and and so this was a 0:08:14.080 --> 0:08:17.280 threat to Disney that this is this is potentially a 0:08:17.360 --> 0:08:22.000 distortion of the news by broadcasting these comments on on 0:08:22.000 --> 0:08:25.480 on Jimmy Kimmel's show that sort of triggered action first 0:08:25.520 --> 0:08:29.880 from smaller companies Next Star and Sinclair, and then Disney 0:08:29.960 --> 0:08:30.640 followed along. 0:08:32.000 --> 0:08:34.800 So, I know you mentioned that the FCC likely couldn't 0:08:34.800 --> 0:08:38.679 have found a news distortion violation by Disney or any 0:08:38.720 --> 0:08:42.040 of the other broadcasters based specifically on Kimmel's comments. Do 0:08:42.040 --> 0:08:43.320 you mind expanding a bit there? 0:08:44.080 --> 0:08:48.360 Yeah, so I'm really skeptical that that would have gone anywhere. 0:08:48.800 --> 0:08:54.000 That the FCC's news distortion rule is extremely narrow. First 0:08:54.040 --> 0:08:57.480 of all, it applies to news. Uh, there's there's a 0:08:57.520 --> 0:08:59.640 direct FCC decision that says, look, we're not going to 0:08:59.679 --> 0:09:03.160 apply this to an entertainment program. And then even with 0:09:03.200 --> 0:09:08.640 respect to news, it's very limited to the FCC needs 0:09:08.679 --> 0:09:13.160 to see evidence that management of the station knew what 0:09:13.200 --> 0:09:17.240 it was saying was false and ran the story anyway. Otherwise, 0:09:17.280 --> 0:09:18.880 the FCC has said, look, we need to get out 0:09:18.920 --> 0:09:22.040 of the way of editorial decisions, leave breathing room for 0:09:23.320 --> 0:09:26.800 news to do their job. That's historically been the approach, 0:09:26.840 --> 0:09:29.480 and Brendan Carr is working against that precedent. What this 0:09:29.640 --> 0:09:33.080 was really about, though, is these companies need to stay 0:09:33.160 --> 0:09:35.360 in the good graces of the FCC. It's not so 0:09:35.440 --> 0:09:37.559 much the threat that the FCC is going to win 0:09:37.640 --> 0:09:40.720 on a case like this. These companies need the FCC 0:09:40.880 --> 0:09:44.480 to finish a couple rulemakings that are deregulating the whole sector, 0:09:45.000 --> 0:09:48.040 and so if the FCC asked them to do something, 0:09:48.520 --> 0:09:51.200 they have a strong incentive to do it because they 0:09:51.360 --> 0:09:54.760 want other actions from this FCC that will help their business. 0:09:55.120 --> 0:09:58.320 Does that partially explain to some degree the actions from 0:09:58.640 --> 0:10:00.480 Next Star, which is one of the largest owners of 0:10:00.520 --> 0:10:03.120 TV stations in the country, and they have a pending 0:10:03.160 --> 0:10:06.880 acquisition of Tegna, which is a TV broadcasting company that's 0:10:06.920 --> 0:10:07.920 in front of the FCC. 0:10:07.800 --> 0:10:09.920 Right now, that's exactly right. 0:10:10.000 --> 0:10:13.480 And so that's a six billion dollar deal, and it 0:10:13.600 --> 0:10:16.440 depends on the FCC easing a rule. 0:10:16.520 --> 0:10:17.440 Right now, there's an. 0:10:17.360 --> 0:10:19.400 FCC rule on the book that says you can only 0:10:19.440 --> 0:10:23.480 reach about thirty nine percent of US households. This deal 0:10:23.520 --> 0:10:26.600 would reach seventy percent or eighty percent of US households. 0:10:26.600 --> 0:10:28.880 They need the FCC not only to approve the deal, 0:10:29.320 --> 0:10:30.960 but to scrap that rule first. 0:10:31.120 --> 0:10:34.040 If they don't do that, the deal's going nowhere. 0:10:34.679 --> 0:10:37.560 And so when Brendan Carr goes on this podcast and 0:10:37.559 --> 0:10:41.719 says local stations, would you please do this? You saw 0:10:41.760 --> 0:10:46.360 an almost immediate response from Next Star and Sinclair, followed 0:10:46.360 --> 0:10:49.000 by a thank you from Brendan Carr. 0:10:49.440 --> 0:10:51.680 I mean, what's the likelihood of this deal being approved? 0:10:51.679 --> 0:10:53.560 I mean, of course that would be massive to have 0:10:53.640 --> 0:10:57.319 that amount of way ownership there. 0:10:58.000 --> 0:11:03.800 Yeah, all signals are that this deregulation will move ahead 0:11:03.920 --> 0:11:07.240 at the FCC. This has been a priority for Republicans 0:11:07.320 --> 0:11:09.880 in FCC circles for a long time, and I think 0:11:09.880 --> 0:11:12.959 it will advance. There is a very difficult legal question 0:11:13.640 --> 0:11:16.720 looming as to whether the FCC can change that thirty 0:11:16.800 --> 0:11:19.319 nine percent cap. There's a strong argument on the other 0:11:19.400 --> 0:11:21.959 side that Congress must do it, and I think we're 0:11:21.960 --> 0:11:25.120 going to have a tough court fight on exactly that issue. 0:11:25.160 --> 0:11:27.760 I think the FCC probably can win that fight, but 0:11:27.840 --> 0:11:30.000 it might depend on what court ends up hearing it, 0:11:30.120 --> 0:11:32.880 what set of three judges ends up hearing it first. 0:11:33.200 --> 0:11:35.000 All right, Matt, thanks so much for joining us. Appreciate 0:11:35.040 --> 0:11:39.040 it as always. Matt Chuttenholm, he's media litigation analyst. He's 0:11:39.120 --> 0:11:43.160 kind of really the litigation and the regulatory guye that 0:11:43.200 --> 0:11:45.839 we chat with when it comes to all things related 0:11:45.880 --> 0:11:47.640 to the media and the regulation of the media. And 0:11:47.679 --> 0:11:50.960 clearly this is a big issue for the ABC Television network, 0:11:51.000 --> 0:11:55.480 for Walt Disney in general, and of course other parties 0:11:55.520 --> 0:11:58.000 involved there, whether it be next to our Sinclaarence, some others. 0:11:58.000 --> 0:11:59.880 So we'll keep an eye on that, but it's certainly 0:12:00.559 --> 0:12:03.760 a big news, a big piece of news in the 0:12:04.200 --> 0:12:07.640 TV business. Stay with us. More from Bloomberg Intelligence coming 0:12:07.679 --> 0:12:08.480 up after this. 0:12:12.160 --> 0:12:15.880 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:12:15.960 --> 0:12:19.320 weekdays at ten am Eastern on Applecarclay, and Android Auto 0:12:19.440 --> 0:12:22.520 with the Bloomberg Business App. Listen on demand wherever you 0:12:22.559 --> 0:12:25.520 get your podcasts, or watch us live on YouTube. 0:12:26.240 --> 0:12:29.079 All my personal take on energy and where we get 0:12:29.160 --> 0:12:31.079 energy going forward is I think we're just gonna need 0:12:31.120 --> 0:12:35.720 pretty much everything. If fossil fuels, guess oil and gas, 0:12:36.360 --> 0:12:39.600 the renewable stuff, the water, the wind, whatever, I think 0:12:39.600 --> 0:12:43.360 we're gonna need at all, and that includes nuclear as well. 0:12:43.400 --> 0:12:45.079 And I've been really fascinated by some of the new 0:12:45.080 --> 0:12:47.680 technologies in the nuclear I don't think we're talking about 0:12:47.679 --> 0:12:50.640 building a new three mile island or anything. But James Walker. 0:12:50.640 --> 0:12:52.400 He's the CEO and board member of a company called 0:12:52.480 --> 0:12:56.040 Nano Nuclear Energy. It is a publica traded company on Nasdaq. 0:12:56.280 --> 0:12:59.959 NNE is the ticker. He'sat there in Salt Lake Sea, 0:13:00.040 --> 0:13:02.360 the Utah, which I've been to a million times, but 0:13:02.640 --> 0:13:04.320 quite frankly, I just go to the airport and then 0:13:04.360 --> 0:13:05.640 I hop in a car and drive up to one. 0:13:05.600 --> 0:13:06.360 Of the ski resorts. 0:13:07.400 --> 0:13:10.439 That's my asied that's ideal assault. Like, James, thanks so 0:13:10.559 --> 0:13:12.280 much for joining us here. Talk to us about your 0:13:12.320 --> 0:13:16.760 company and kind of this whole technology around micro reactors. 0:13:16.880 --> 0:13:19.000 Talk to us of what that technology is and is 0:13:19.040 --> 0:13:19.640 it a thing. 0:13:21.080 --> 0:13:23.760 Sure, it's it's definitely a thing. It's it should be 0:13:23.760 --> 0:13:25.959 the next big thing because there's a there's a big 0:13:26.000 --> 0:13:28.480 sort of energy bottleneck coming in the country. There's huge 0:13:28.559 --> 0:13:33.920 energy demands reindustrialization, electrification, but also significant demands from the 0:13:33.920 --> 0:13:37.280 tech industry. They need gigawatts and gigawats of power and 0:13:37.679 --> 0:13:39.200 they need that a lot of the time to be 0:13:39.600 --> 0:13:42.319 off grid, to be co located with them and need 0:13:42.360 --> 0:13:45.480 to be output power consistently over decades, and like that's 0:13:45.520 --> 0:13:47.960 put them in bed with nuclear and that's it's kind 0:13:47.960 --> 0:13:49.800 of why there's this hot space at the moment in 0:13:49.840 --> 0:13:52.800 the nuclear industry and you're seeing so much investment go 0:13:52.880 --> 0:13:54.760 into it. The new the US is trying to build 0:13:54.760 --> 0:13:57.360 back nuclear infrastructure as fast as it can just to 0:13:57.520 --> 0:14:00.800 enable this sort of massive scale up of new clear power. 0:14:01.200 --> 0:14:04.160 So our company is obviously involved in that. We make 0:14:04.200 --> 0:14:08.240 advanced reactor systems. They're lots smaller than the conventional ones. 0:14:08.360 --> 0:14:11.360 But the idea here is that you can. You can 0:14:11.440 --> 0:14:13.080 maduce these things and sort of roll them out like 0:14:13.080 --> 0:14:16.160 products and deploy them and assemble them and output power anywhere. 0:14:16.920 --> 0:14:20.160 Meta, Amazon, Google, Microsoft, all these big names seem to 0:14:20.160 --> 0:14:22.080 be going nuclear. And in your own words, it seems 0:14:22.080 --> 0:14:24.880 as though we're in the middle of a nuclear renaissance. 0:14:25.200 --> 0:14:27.520 What do you make of this, in particular in regards 0:14:27.520 --> 0:14:28.520 to the tech sector. 0:14:30.200 --> 0:14:32.880 Well, I would say this is a pretty unprecedented time. 0:14:33.000 --> 0:14:36.560 Like previously with nuclear, everyone always thought of renaissance was 0:14:36.560 --> 0:14:39.560 coming with it because theoretically it should be the cheapest 0:14:39.600 --> 0:14:43.040 and easiest form of power in the world, but it 0:14:43.400 --> 0:14:46.600 never really came. But what's happened now is that it's say, 0:14:46.640 --> 0:14:48.360 for instance, if you're a big data center, if you 0:14:48.400 --> 0:14:51.840 are the Googles or the Microsoft's of the world, you 0:14:51.920 --> 0:14:54.240 need you need a lot of power. But even if 0:14:54.240 --> 0:14:57.120 you were to have all the gas and coal that 0:14:56.720 --> 0:14:59.840 you needed or with anything like that, you would still 0:14:59.880 --> 0:15:03.600 need to massively upgrade the national grid to a point 0:15:03.640 --> 0:15:06.000 where it could begin outputting the power that you require, 0:15:06.080 --> 0:15:09.400 and the infrastructure of costs that will be involved upgrading 0:15:09.440 --> 0:15:11.560 the grid might be five trillion dollars something like that. 0:15:12.280 --> 0:15:14.800 So they're not in the business of doing that, but 0:15:14.840 --> 0:15:18.200 they need the power. So with a with nuclear you 0:15:18.280 --> 0:15:19.720 don't need to be on the grid. You could be 0:15:19.760 --> 0:15:22.200 off grid and you could just build a reactor wherever 0:15:22.240 --> 0:15:24.960 you want and use a micro grid and then outlay 0:15:24.960 --> 0:15:26.920 the power through that system to a data center or 0:15:26.960 --> 0:15:30.600 an AI center, anything like that. So the tech industry 0:15:30.600 --> 0:15:32.400 has sort of settled on this as the solution, the 0:15:32.440 --> 0:15:35.480 long term solution. And then in the interim, you know, 0:15:35.720 --> 0:15:39.320 they'll yield do anything. It'll be geothermal, they'll use gas'll 0:15:39.360 --> 0:15:41.480 they'll use wind and solar as much as they can. 0:15:41.920 --> 0:15:44.760 But like in their long term strategy, they realize that 0:15:45.040 --> 0:15:47.400 for what they actually need, the large scale of it, 0:15:47.520 --> 0:15:49.200 nuclear is gonna have to be a major component, if 0:15:49.360 --> 0:15:51.000 not the largest, component of that solution. 0:15:51.560 --> 0:15:54.200 All right, your company, Nano nuclear Energy, it's got a 0:15:54.200 --> 0:15:56.320 market cap of one point eight billion. Stock is up 0:15:56.320 --> 0:15:58.360 three hundred percent of the trailing twelve months. It's up 0:15:58.400 --> 0:16:01.360 seventy three percent year to dat, it's up thirteen percent today. 0:16:01.720 --> 0:16:04.920 I think you sold some technology to somebody. I go 0:16:05.000 --> 0:16:06.880 to your P and L. You don't have a nickel 0:16:06.920 --> 0:16:09.280 of revenue. What is going on with your stock? Explain 0:16:09.320 --> 0:16:10.960 to me what the investment theme is out there in 0:16:11.000 --> 0:16:12.120 the marketplace for your company. 0:16:13.160 --> 0:16:15.720 It's it's the same with every advanced reactor company at 0:16:15.760 --> 0:16:18.240 the moment, they're all in the same boat. We're all 0:16:18.240 --> 0:16:21.000 building things. But the reason why Nano has particular interest 0:16:21.080 --> 0:16:24.280 is that we have construction projects already scheduled. We have 0:16:24.360 --> 0:16:27.080 a big project. They've been building the first the US's 0:16:27.160 --> 0:16:30.800 first microrector at the University of Illinois, and we actually 0:16:30.800 --> 0:16:34.360 should be building Canada's first microrector at the same time 0:16:34.440 --> 0:16:37.680 up at Chalk River on Canadian Nuclear Laboratory land. So 0:16:37.960 --> 0:16:40.680 there's huge interest in what we're doing, and so we're 0:16:40.680 --> 0:16:44.960 getting an enormous amount of support. And what the institutional 0:16:45.000 --> 0:16:47.640 investment is doing now is that they're hedging their bets. 0:16:47.680 --> 0:16:49.600 They know that nuclear is going to take off, and 0:16:49.600 --> 0:16:52.280 now they're beginning to bet on companies. And there's already 0:16:52.320 --> 0:16:56.000 a sort of a convergence of you know, in a 0:16:56.040 --> 0:16:59.040 hot sector, you'll have twenty companies come out of the woodwork, 0:16:59.080 --> 0:17:01.400 but already they're sort of being squeezed down to a 0:17:01.400 --> 0:17:04.280 handful of leading companies and we're one of them. And 0:17:04.280 --> 0:17:06.879 that's why you're seeing like this huge market interest in 0:17:06.960 --> 0:17:10.760 US because it's it's positioning. Everyone's positioning themselves for essentially 0:17:10.800 --> 0:17:11.360 the future. 0:17:12.520 --> 0:17:16.600 Well, we definitely touched on your stock performance. Here, tell 0:17:16.640 --> 0:17:19.120 me what sets you apart from your competitors though. 0:17:20.480 --> 0:17:24.159 So, I mean, we've kept things very simple. We know 0:17:24.320 --> 0:17:27.920 that the technology we're utilizing is going to work. High 0:17:27.920 --> 0:17:30.880 temperature gas reactors have been used for decades. All we're 0:17:30.920 --> 0:17:33.000 doing is scaling them down. But on top of that, 0:17:33.040 --> 0:17:36.840 we're actually utilizing a special form of fuel which eliminates 0:17:38.359 --> 0:17:42.080 the necessity the necessity to have all these redundant safety 0:17:42.080 --> 0:17:44.800 systems you can co locate with. If it was a 0:17:44.880 --> 0:17:46.720 data center in AI, you could be pressed right up 0:17:46.720 --> 0:17:49.000 against them. You could even be sited in the middle 0:17:49.000 --> 0:17:52.040 of a population center. There's no risk to anybody around 0:17:52.080 --> 0:17:57.000 you because the reactor has no chance of having a meltdown, 0:17:57.040 --> 0:18:00.879 and conventional civil nuclear power plant can. So it's a 0:18:01.000 --> 0:18:06.760 very different kind of tech and so and already more 0:18:06.800 --> 0:18:10.640 novel techs I think having a bit of a struggle, whereas, 0:18:11.200 --> 0:18:13.840 for instance, high temperature gas reactors that utilize try so 0:18:14.000 --> 0:18:16.560 that seems to be almost the most popular model amongst 0:18:16.600 --> 0:18:18.639 developers at the moment. And so we've got that, but 0:18:19.119 --> 0:18:21.840 our key One of our better strategies is that we've 0:18:21.840 --> 0:18:24.440 made a reactor as big as you can possibly make 0:18:24.520 --> 0:18:27.439 it and still move all the components by road, and 0:18:27.480 --> 0:18:29.440 that means we will be able to have factory level 0:18:29.480 --> 0:18:33.399 processes that just continuously manufacture these things. We can ship 0:18:33.440 --> 0:18:36.880 everything by road, assemble it there, and then we don't 0:18:36.920 --> 0:18:41.280 need to have big construction as big construction projects at 0:18:41.320 --> 0:18:45.560 the site itself with individual licensing processes. So we're simplifying 0:18:45.560 --> 0:18:48.000 things as much as we possibly can. That's why we've 0:18:48.000 --> 0:18:49.320 proven to be pretty popular. 0:18:49.800 --> 0:18:51.880 I'm just looking at kind of what's moving your stock here. 0:18:51.880 --> 0:18:53.800 I know that you guys recently signed a letter of 0:18:53.840 --> 0:18:56.840 intent for the proposed sale of its odin low pressure 0:18:56.920 --> 0:19:01.200 currant micro designed to Cambridge adam Or, a UK based 0:19:01.240 --> 0:19:02.760 company talked to us about that deal. 0:19:03.800 --> 0:19:06.199 So that we were streamlining the company. We have a 0:19:06.240 --> 0:19:10.080 reactor called the Kronos reactor. That's our that's our flagship product. 0:19:10.720 --> 0:19:12.840 That's the one we'll be building at University of Illinois 0:19:13.000 --> 0:19:15.840 and at Chalk River in Canada. And the other reactors 0:19:15.840 --> 0:19:18.320 that we were developing, like the low Key reactor and 0:19:18.359 --> 0:19:21.040 the Zeus reactor, they were also high temperature gas reactors. 0:19:21.600 --> 0:19:26.840 So the Odium reactor, it's a fantastic system, but we 0:19:26.560 --> 0:19:29.199 we let the team, the technical team take that on 0:19:29.520 --> 0:19:31.760 to develop themselves so we can concentrate fully on that 0:19:31.840 --> 0:19:35.560 Kronos reactor, so that that streamlining of the organization is 0:19:35.600 --> 0:19:40.320 obviously very important. We're scaling up very quickly, but we're 0:19:40.359 --> 0:19:42.760 going to need, you know, ninety five percent of our 0:19:42.800 --> 0:19:46.040 technical personnel working on this Kronos reactor. And when you're 0:19:46.040 --> 0:19:48.359 focused like that and building, you know, it does have 0:19:48.400 --> 0:19:50.120 a positive market influence. 0:19:50.000 --> 0:19:52.000 All right. James A is a former investment banker. I 0:19:52.040 --> 0:19:53.720 would say take advantage of the stock price and sell 0:19:53.800 --> 0:19:56.639 some stock, but I see you have been selling stock periodically, 0:19:56.680 --> 0:19:58.760 so good for you. Good source of capital here. James Walker, 0:19:59.240 --> 0:20:02.040 CEO on board matter of a Nano Nuclear Energy. It 0:20:02.080 --> 0:20:04.520 is a puply traded company NNE. I'm kind of one 0:20:04.560 --> 0:20:06.720 of those folks to say, I think nuclear has got 0:20:06.760 --> 0:20:09.879 to be part of the energy solution because all I 0:20:09.920 --> 0:20:12.560 hear from these data centers, there are gonna be tons 0:20:12.600 --> 0:20:15.399 and tons of energy going forward, and I guess nuclear 0:20:15.480 --> 0:20:17.080 is going to be a part of that to some extent. 0:20:17.800 --> 0:20:22.480