WEBVTT - Grill Makers Are the Hottest Things in IPOs 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Karl Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.680 plus technology, politics, economics, all partnising the power of Business 0:00:13.680 --> 0:00:17.159 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.000 analyst in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.239 Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.400 --> 0:00:25.200 You can also listen to our radio show at two 0:00:25.200 --> 0:00:27.880 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.920 --> 0:00:31.360 YouTube search Bloomberg glovel News. Let's get to a little 0:00:31.360 --> 0:00:33.560 bit more of those COVID headlines. We talked about COVID 0:00:33.640 --> 0:00:36.760 nineteen cases in the UK, rising the most in the world, 0:00:36.840 --> 0:00:39.240 as virus restrictions ended in England, New York City no 0:00:39.360 --> 0:00:42.199 plans for new indoor mask mandates. We know what's going 0:00:42.240 --> 0:00:44.879 on in l A, Southeast Asia, continuing to reel from 0:00:44.920 --> 0:00:47.199 a fresh wave of the virus. Well. Earlier today on 0:00:47.240 --> 0:00:50.040 Bloomberg TV and Radio, Dr Anthony Fauci caught up with 0:00:50.080 --> 0:00:52.920 our own David Weston to talk about the rising cases 0:00:52.920 --> 0:00:55.400 and as pleaded people check it out, but among the 0:00:55.600 --> 0:00:59.560 vaccinated people, that's a significant risk. And that's the reason 0:00:59.600 --> 0:01:04.000 why we are practically pleading with people to please, if 0:01:04.000 --> 0:01:08.920 you're not vaccinated yet, seriously consider getting vaccinated because this 0:01:09.000 --> 0:01:13.320 is a nasty virus, particularly if you're unvaccinated. All right, 0:01:13.360 --> 0:01:15.680 of course, Dr Anthony Fauci there earlier, M Blomberg RADI 0:01:15.720 --> 0:01:17.560 hum Blomberg TV. Let's see what our next guest has 0:01:17.600 --> 0:01:19.840 to say about all of this. Dr Justin Zogi is 0:01:19.920 --> 0:01:22.119 with us. He's chief medical officer at LA based here. 0:01:22.200 --> 0:01:25.080 They provide telehealth services and doctor house calls to over 0:01:25.280 --> 0:01:28.880 seventy five million Americans. He's on the phone in l A. 0:01:29.000 --> 0:01:31.720 Dor Zoggy, Good to have you here. How are you 0:01:31.840 --> 0:01:33.760 and tell me what you're seeing when it comes to 0:01:33.959 --> 0:01:39.039 COVID cases, specifically out there on the West Coast. Hi, Carol, 0:01:39.120 --> 0:01:42.080 thank you so much for having me on your show. Sure, um, 0:01:42.400 --> 0:01:44.840 you know you're right. I'm based in Los Angeles, and 0:01:45.200 --> 0:01:47.880 in Los Angeles there's been a significant rise in COVID 0:01:47.960 --> 0:01:52.640 cases over in the past two weeks and it is 0:01:52.720 --> 0:01:56.120 quite concerning it. As a result, as you know, Los 0:01:56.160 --> 0:02:00.680 Angeles has reinstated the mask mandate um, and you know 0:02:01.160 --> 0:02:05.480 there are breakthrough cases happening. Obviously, vaccination is the most 0:02:05.560 --> 0:02:09.320 important thing for people to do UM and even among 0:02:09.400 --> 0:02:11.959 those who are vaccinated, there are some breakthrough cases. So 0:02:12.040 --> 0:02:15.359 we are seeing some patients who have been vaccinated and 0:02:15.440 --> 0:02:18.120 are getting the vaccine. That being said, those who are 0:02:18.240 --> 0:02:22.040 vaccinated have a much lower likelihood of ending up in 0:02:22.080 --> 0:02:26.240 the hospital or of dying, and so we do strongly 0:02:26.880 --> 0:02:29.400 urge all of our patients to get vaccinated. Of those 0:02:29.440 --> 0:02:32.240 people who are not vaccinated and get this COVID nineteen 0:02:32.280 --> 0:02:34.160 as a result of the delta variant, how bad is it? 0:02:36.280 --> 0:02:38.799 It can be quite severe. It's in fact it's the 0:02:38.919 --> 0:02:43.400 most contagious and we think the most severe strain of 0:02:43.480 --> 0:02:47.200 the COVID nineteen virus um. It's thought that this is 0:02:47.240 --> 0:02:53.000 actually two fiftent more contagious than the original strain, right, 0:02:53.120 --> 0:02:57.480 which explains why it's spreading like wildfire and why people 0:02:57.520 --> 0:03:00.160 who have even been vaccinated are getting it. How the 0:03:00.200 --> 0:03:03.040 distinction is that if you have been vaccinated and you 0:03:03.160 --> 0:03:06.720 get it, uh, there's a you'll be much less likely 0:03:06.840 --> 0:03:11.280 to have severe consequences, meaning much lower likelihood of dying 0:03:11.360 --> 0:03:14.320 from the vaccine, much lower likelihood of ending up in 0:03:14.320 --> 0:03:17.519 the hospital, and also less severe symptoms. Just generally you 0:03:17.600 --> 0:03:22.840 may have some you know, cold cold like symptoms, cough, uh, fever, 0:03:23.120 --> 0:03:24.919 and in some pieces it can be more severe, but 0:03:25.320 --> 0:03:27.880 generally you're vaccinated. That's the best line of defense we 0:03:27.960 --> 0:03:32.000 have the country overall, and I feel like the world 0:03:32.120 --> 0:03:36.200 overall continues to in a large way. Of course, it's 0:03:36.200 --> 0:03:40.440 not a straight path forward. Continue to reopen, but it's tricky. 0:03:41.960 --> 0:03:45.840 Do the lifting of restruction restrictions excuse me, and the 0:03:45.920 --> 0:03:51.520 continued reopening make you nervous? You know, I think it's 0:03:51.600 --> 0:03:56.240 it's a Balasi act, right. Keeping things closed has significant 0:03:56.280 --> 0:04:00.360 consequences um on everyone. Right, We've we've heard of the 0:04:00.440 --> 0:04:04.760 impact of the lockdown on school children, for example, and 0:04:04.840 --> 0:04:07.680 the impact that has on their development, with the CDC 0:04:07.880 --> 0:04:10.440 coming out and saying that we need to reopen schools 0:04:10.480 --> 0:04:13.800 because of the impact of the lockdown on children. Similarly, 0:04:14.160 --> 0:04:16.640 you know, we were just hearing on the headlines about 0:04:16.680 --> 0:04:19.560 the impact on the stock market and travel, um and 0:04:19.600 --> 0:04:21.600 people's mental health. You know, I'm seeing a lot of 0:04:21.640 --> 0:04:25.440 patients with depression anxiety from the lockdown, and so there 0:04:25.760 --> 0:04:29.680 is a significant cost associated with the lockdown and with 0:04:29.839 --> 0:04:34.160 these restrictions um at the same time, for a long time, 0:04:34.320 --> 0:04:38.520 it has been our best defense against COVID nineteen. The 0:04:38.800 --> 0:04:42.760 silver lining here is that with vaccination, you know, that 0:04:42.880 --> 0:04:45.480 will free us up to open up even more right 0:04:45.800 --> 0:04:49.520 and will allow us to avoid these these restrictions and 0:04:50.279 --> 0:04:54.080 will help us to return to more normalcy. It's it's 0:04:54.120 --> 0:04:56.480 it's really a balancing act. But if I can give 0:04:56.560 --> 0:04:59.720 one one, uh, you know, one message to to our 0:04:59.800 --> 0:05:02.400 list centers here is if you have not yet been 0:05:02.520 --> 0:05:07.800 vaccinated to please do do consider getting vaccinated, because this 0:05:07.960 --> 0:05:10.440 is this is our way of freeing ourselves from the 0:05:10.480 --> 0:05:13.679 shackle of COVID nineteen and going back to more normal. 0:05:14.400 --> 0:05:19.200 Thoughts on people wearing masks even if they're vaccinated, you know, 0:05:19.480 --> 0:05:22.560 I think that uh you know, I'm as difficult as 0:05:22.600 --> 0:05:25.960 it is in Los Angeles with wearing indoor masks. I 0:05:26.040 --> 0:05:28.520 do think it's the right call, right because we have 0:05:28.680 --> 0:05:33.320 been seeing significant rise in cases, and you know, where 0:05:33.360 --> 0:05:37.240 as a complete shutdown has significant impacts as really challenging 0:05:37.320 --> 0:05:40.360 to do, simply telling people to wear a mask when 0:05:40.400 --> 0:05:44.640 they're indoors is less restricting than you know, not leaving 0:05:44.680 --> 0:05:48.200 the home at all. We're limiting contact completely. And I 0:05:48.360 --> 0:05:51.200 do think that you know, given given that we were 0:05:51.240 --> 0:05:54.760 seeing breakthrough cases and people who are vaccinated, I think 0:05:54.800 --> 0:05:58.159 it makes sense to have people wear face masks indoors, 0:05:58.560 --> 0:06:01.400 right And I think this this will just help protect 0:06:01.720 --> 0:06:05.640 both the vaccinated and unvaccinated people in our in our communities. 0:06:06.320 --> 0:06:09.280 Um and just the way to mitigate the glowth of 0:06:09.320 --> 0:06:13.880 the virus until more people are vaccinated. Great to check 0:06:13.920 --> 0:06:16.359 in with you. Thank you so much, Dr Justin Zoggi. 0:06:16.400 --> 0:06:19.000 He's chief medical officer at Heel on the Phone in 0:06:19.279 --> 0:06:21.800 l A. Check out their website, their business where they 0:06:21.839 --> 0:06:26.240 are doing telehealth and doctor house calls, growing six since 0:06:26.360 --> 0:06:29.240 May due to the COVID nineteen demand. Of course, he 0:06:29.520 --> 0:06:32.039 is chief medical officer at Hell. As we mentioned, they 0:06:32.080 --> 0:06:35.560 are l A based. This is Bloomberg Business Week with 0:06:35.760 --> 0:06:40.559 Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. 0:06:40.960 --> 0:06:43.080 All right, let's get to it an online story at 0:06:43.120 --> 0:06:46.040 Bloomberg dot com. On at Bloomberg business Week dot com, 0:06:46.120 --> 0:06:48.119 I should say, and who knew, from the iconic Weber 0:06:48.200 --> 0:06:51.080 to the BBQ guys, groolmakers are the hottest thing when 0:06:51.120 --> 0:06:53.000 it comes to post pandemic I p S. Let's get 0:06:53.000 --> 0:06:56.120 into what's going on. Joining us is Bloomberg News Deals 0:06:56.160 --> 0:06:59.120 reporter Crystal Ce and Bloomberg Business weekender Joel Webber, both 0:06:59.160 --> 0:07:02.040 in our Interactive Brokers studio. Are you grilling a lot? 0:07:02.640 --> 0:07:05.360 You know you would think that, um, I would grill 0:07:05.400 --> 0:07:07.360 every day since my last name is Webber and it's 0:07:07.400 --> 0:07:09.720 spelled the same way. So let's just get that out 0:07:09.760 --> 0:07:12.560 of the out of the way. To start with, I'm 0:07:12.680 --> 0:07:15.960 not related. If I were related, you know, I wouldn't 0:07:15.960 --> 0:07:19.080 be sitting here right now. I would be you know, 0:07:19.160 --> 0:07:21.280 getting ready for an I p O at a grill. 0:07:22.040 --> 0:07:23.880 But you know, the story is really interesting, I think 0:07:23.920 --> 0:07:26.720 because it speaks to I mean, do you remember, like 0:07:26.840 --> 0:07:29.160 not that long ago girl where we were talking about 0:07:29.200 --> 0:07:31.720 like the dearth of companies that were in the public 0:07:31.800 --> 0:07:34.920 markets are going public, going public? And then all of 0:07:34.960 --> 0:07:37.840 a sudden, you know, we just had a huge change 0:07:37.880 --> 0:07:41.560 to that, and companies like Webber and and now Trigger, 0:07:42.600 --> 0:07:45.120 who you would think would have remained private for as 0:07:45.160 --> 0:07:48.840 long as they wanted, are testing the public markets. Yeah, exactly, 0:07:48.920 --> 0:07:50.840 So Crystal, come on in on this and your story 0:07:50.880 --> 0:07:53.280 here in terms of what we're seeing, because it is 0:07:53.680 --> 0:07:57.240 a really hot part of no pun intended pun intended hot, 0:07:57.280 --> 0:08:00.280 part of the I p O market. Yeah, actually there 0:08:00.320 --> 0:08:02.280 are two I p O s like you mentioned Trigger 0:08:02.640 --> 0:08:05.960 and Whoever. There's also a s Bag deal and after 0:08:06.080 --> 0:08:08.040 we publish a story, we actually found it as a 0:08:08.080 --> 0:08:11.760 fourth company in the girl space going publics called Solo Stove. So, like, 0:08:11.840 --> 0:08:14.400 I think people are just like wondering, like why there's 0:08:14.400 --> 0:08:17.360 so many girl companies. And the biggest question though, is 0:08:17.480 --> 0:08:19.880 as everybody start going out again, like all these companies 0:08:19.920 --> 0:08:22.360 going to be as hot as they were during the pandemic. 0:08:22.600 --> 0:08:24.760 And that's the question that we really try to answer him. 0:08:25.080 --> 0:08:29.040 And so first of all, why why do we think that, um, 0:08:29.240 --> 0:08:31.600 these companies who have been private and clearly you know, 0:08:31.720 --> 0:08:33.440 had a good run in the private market for so long, 0:08:33.480 --> 0:08:34.719 why do we think they're going in public all of 0:08:34.760 --> 0:08:37.280 a sudden at the same time. Yeah, So the interesting 0:08:37.280 --> 0:08:39.400 thing about this is that they're not using the proceas 0:08:39.480 --> 0:08:41.280 to growth the company. Like you said, they've been around 0:08:41.320 --> 0:08:43.880 for the longest time. They actually very established, you have, 0:08:44.000 --> 0:08:47.560 they're very profitable. A lot of the existing investors actually 0:08:47.640 --> 0:08:49.559 using this as a good opportunity to cash out. So 0:08:49.640 --> 0:08:52.839 as equity markets at all time high. What's better way 0:08:52.920 --> 0:08:55.040 to do it other than do an I P O 0:08:55.200 --> 0:08:59.559 and do I here top peak. It sounds right, it's 0:08:59.559 --> 0:09:01.719 hop sure that I mean, I guess the question is 0:09:01.760 --> 0:09:03.280 on the other side of the pandemic. We are a 0:09:03.320 --> 0:09:06.480 grilling family. My husband's at there in December January grilling 0:09:06.600 --> 0:09:10.680 often on our porch. But I mean, does the grill 0:09:11.000 --> 0:09:15.360 craze continue your endemic? We asked that question the banker 0:09:15.520 --> 0:09:17.280 I spoke to from City Group. He was saying that 0:09:17.360 --> 0:09:20.079 he grows actually when he was working from home. So 0:09:20.240 --> 0:09:24.240 this is the potential hybrid working model. You know, if 0:09:24.280 --> 0:09:26.760 you're home and you you have a lunch break, you 0:09:26.840 --> 0:09:28.960 can just go out for a fifteen minute break girl, 0:09:29.080 --> 0:09:31.439 stay a girl like a burger, and come back in. 0:09:31.920 --> 0:09:36.000 So that potential longevityo of this hybrid working model could 0:09:36.080 --> 0:09:38.760 benefit them. But also he's saying that people are picking 0:09:38.840 --> 0:09:40.439 it up as a hobby. It's not just that a 0:09:40.520 --> 0:09:43.559 one time purchase. You're also buying the accessories you also like, 0:09:43.679 --> 0:09:46.240 topping up on your existing grill. So even though that 0:09:46.360 --> 0:09:49.120 one time big ticket item was bought this year, their 0:09:49.160 --> 0:09:53.199 potential purchases coming up. My my joke on this story 0:09:53.240 --> 0:09:55.240 when we were first kind of kicking it around, was 0:09:55.360 --> 0:09:59.800 like to me, you know whoever, especially it's like this 0:10:00.120 --> 0:10:03.560 is a hundred year old piece of technology that really 0:10:03.679 --> 0:10:06.040 has not changed at all. It's like you put fire 0:10:06.480 --> 0:10:09.360 in a metal thing and and get what you get. 0:10:09.679 --> 0:10:12.920 And what's interesting though is as I sort of like 0:10:13.080 --> 0:10:16.360 started reading around the story, there is actually some tech 0:10:16.440 --> 0:10:19.679 going on that's pretty great to um and what are what? 0:10:19.920 --> 0:10:24.400 Why are grilling heads so excited about where the two 0:10:24.440 --> 0:10:28.040 companies have gone. It's become like a i LT device 0:10:28.240 --> 0:10:31.360 Almost a lot of these grills, especially the higher end 0:10:31.400 --> 0:10:34.000 model that could cause like thousands of dollars. They are 0:10:34.120 --> 0:10:36.680 tech enabled that you can connect it to your WiFi. 0:10:36.800 --> 0:10:39.160 There's an app and you can control the temperature so 0:10:39.280 --> 0:10:40.880 you don't really have to like stand around and wait 0:10:40.960 --> 0:10:42.559 for your meat to smoke for fourteen now is you 0:10:42.559 --> 0:10:44.360 can just go to bed and next the next morning 0:10:44.600 --> 0:10:47.760 it's there. So that really just you know, transform the 0:10:47.800 --> 0:10:51.400 company into a bit of a tech company, and obviously 0:10:51.480 --> 0:10:53.880 the tech valuation is very favorable. Well that, I mean 0:10:53.960 --> 0:10:56.120 the other thing is right there are it's there's the 0:10:56.200 --> 0:10:58.480 grills were a grill in a smoker house. I mean, 0:10:58.520 --> 0:10:59.960 I've woken up in the morning or in the middle 0:10:59.960 --> 0:11:01.880 of the night and you know there's brisket that's been 0:11:01.920 --> 0:11:05.360 cooking for hours. I mean, that's another part of this story, right, 0:11:05.679 --> 0:11:07.000 I think the other part of the stories that I 0:11:07.840 --> 0:11:10.560 need an updated invite to come over to your house 0:11:12.640 --> 0:11:14.520 for a while. It's really good. Yeah, but that's true, 0:11:14.559 --> 0:11:17.080 like people often have more than one of these devices 0:11:17.200 --> 0:11:20.040 like you have. You have different needs and people getting 0:11:20.040 --> 0:11:23.559 more and more into these cooking hobbies, and you have 0:11:23.640 --> 0:11:26.240 all these cooking shows that are building big bugs, and 0:11:26.360 --> 0:11:29.760 they often advertise on these YouTube cooking shows or like 0:11:30.160 --> 0:11:32.880 magazines that are food related. So yeah, it's it's a 0:11:32.920 --> 0:11:35.880 big business. So I still can't believe I didn't think Webber. 0:11:36.000 --> 0:11:41.559 I'm really upset. I'm shocked. The other thing that it 0:11:41.679 --> 0:11:44.240 bears mentioning here is like they're sure there's the company 0:11:44.600 --> 0:11:47.800 aspect of that, but the Mannings actually figure into this one. 0:11:48.200 --> 0:11:50.599 Talk to us about um what Elien and Peyton have 0:11:50.720 --> 0:11:54.199 pulled off. Yeah, they are actually existing back of baby 0:11:54.280 --> 0:11:57.319 que Guys, which is a retailer for barbecue griels, and 0:11:57.520 --> 0:12:01.400 they're going public there s back with reported UM. I mean, 0:12:01.480 --> 0:12:04.679 spac it's another hot topic of the year and the 0:12:04.760 --> 0:12:08.120 past two years, and a lot of the spag deos 0:12:08.200 --> 0:12:12.320 tend to be unprofitable companies or people companies that are 0:12:12.440 --> 0:12:14.800 looking into very very far ahead in the future, like 0:12:14.920 --> 0:12:18.080 the space traveling electric vehicles, So it's not often then 0:12:18.120 --> 0:12:21.160 you get actually a profitable company that has an established 0:12:21.200 --> 0:12:23.959 track record. So this could really get people excited. It's 0:12:24.000 --> 0:12:26.079 just not just because of the growing element, but that 0:12:26.440 --> 0:12:28.520 it seems like a legitimate company. So can I throw 0:12:28.600 --> 0:12:31.120 in pools into this? Why not? Because that's part of it. 0:12:31.200 --> 0:12:35.079 I do not have a city backyard. It's really small, um, 0:12:35.400 --> 0:12:37.079 so pools are part of it, right that they have 0:12:37.160 --> 0:12:39.800 also taken off, It's part of this story. It's the 0:12:40.040 --> 0:12:43.520 entire home improvement trend that we saw the past year. 0:12:43.520 --> 0:12:46.079 At least three pool companies have gone public in the 0:12:46.120 --> 0:12:49.960 past year. All have seen shares rose more than faulty 0:12:50.040 --> 0:12:54.960 percent during this period. So everything that's that involves your 0:12:54.960 --> 0:12:58.720 immediate surrounding your home is getting an upgrade and all 0:12:58.800 --> 0:13:02.920 of these companies that benefit. And it makes me just think, like, 0:13:03.080 --> 0:13:06.840 especially off of today's headlines and everybody getting cold feed, 0:13:06.880 --> 0:13:09.920 it's like, you know, this is exactly what that trades about. 0:13:09.960 --> 0:13:13.360 Which is like, how can you find, uh, some companies 0:13:13.440 --> 0:13:16.600 that are are benefiting from you know, longevity of people 0:13:16.679 --> 0:13:19.520 staying at home? Right right? This like peak growth idea 0:13:19.640 --> 0:13:22.079 or peak pan you know, pandemic place. Having said that, 0:13:22.240 --> 0:13:24.240 robin Hood is also something just to do a quick 0:13:24.360 --> 0:13:26.880 before you leave robin Hood going public, how do we 0:13:26.960 --> 0:13:28.839 read that? Is that a sign of a peak in 0:13:28.920 --> 0:13:32.320 the market or something else? They are also a pandemic beneficiary. 0:13:32.520 --> 0:13:34.319 They actually acquired a lot of volume, a lot of 0:13:34.480 --> 0:13:37.520 users during this you know work from home period where 0:13:37.559 --> 0:13:40.240 people had not much to do except for setting home 0:13:40.280 --> 0:13:42.640 in trading stocks. And what we know is that they 0:13:42.640 --> 0:13:45.480 are going to list on July twenty nine and attend 0:13:45.520 --> 0:13:48.280 a work show. Are done virtually, and they will have 0:13:48.360 --> 0:13:50.760 a huge component in the I p O allocated to 0:13:50.880 --> 0:13:54.000 retail investors, which are their own users. It will be 0:13:54.040 --> 0:13:57.160 allocated through their platform, which is something that has only 0:13:57.240 --> 0:13:59.240 been done like one or twice. So it will be 0:13:59.320 --> 0:14:01.400 interesting how it turns out. All right, ChIL, given a 0:14:01.480 --> 0:14:04.360 choice between a grill smoker, a pool and a piece 0:14:04.360 --> 0:14:09.200 of robin Hood, what would you take les about? I'll 0:14:09.240 --> 0:14:12.439 take I mean being a webber, even though I'm not 0:14:12.559 --> 0:14:15.480 related to the Weber. There is nothing I can you know, 0:14:15.800 --> 0:14:18.240 just embrace the namesake, I think, and go with the 0:14:18.320 --> 0:14:20.920 grill or it for the weekend show. I'll have to 0:14:20.960 --> 0:14:23.960 work it in untill Webber Editor Bloomberg Business Week. Here 0:14:23.960 --> 0:14:26.760 in our interactor Broker's studio along with Crystal See Deals 0:14:26.800 --> 0:14:30.680 reporter at Bloomberg News. You're listening to Bloomberg Business Week 0:14:30.920 --> 0:14:34.840 with Carol Masser and Bloomberg Quick Takes Tim Stinovic on 0:14:35.040 --> 0:14:37.320 Bloomberg Radio. All right, let's get to it. Because the 0:14:37.440 --> 0:14:40.640 U s UK and their allies formally attributed the Microsoft 0:14:40.720 --> 0:14:43.640 Exchange hack to actors affiliated with the Chinese government and 0:14:43.720 --> 0:14:47.680 accused the Chinese government of a broad array of malicious 0:14:47.680 --> 0:14:51.240 cyber activities, escalating last week's tensions between the White House 0:14:51.280 --> 0:14:53.280 and China. That's one of our big macro stories today 0:14:53.360 --> 0:14:56.280 that we're gonna get into. Plus how China's crackdown on 0:14:56.560 --> 0:14:59.160 ride hailing giant de d raises a lot of questions 0:14:59.160 --> 0:15:01.680 about the future of an investment in Chinese startups. It's 0:15:02.320 --> 0:15:05.200 two big themes that we've been talking about ongoing with 0:15:05.320 --> 0:15:08.560 our own Andy Brown. He is Bloomberg New Economy editorial director, 0:15:08.640 --> 0:15:11.000 and he joins US on this Monday on the phone 0:15:11.080 --> 0:15:13.400 in New York City. Um, Andy, let me just start 0:15:13.440 --> 0:15:16.520 with um, first of all, the headline here about the US, 0:15:16.600 --> 0:15:19.520 the UK and their allies, you know, formally pointing the 0:15:19.560 --> 0:15:23.600 finger at the Chinese government for that Microsoft Exchange hack. Um. 0:15:23.880 --> 0:15:26.000 I don't know, how do you assess the damage of 0:15:26.120 --> 0:15:29.400 something like that or how do the two sides navigate 0:15:29.480 --> 0:15:33.160 through something like that. Yeah, well, this, this is this 0:15:33.360 --> 0:15:37.840 really is huge. Um, this has been going on for years. 0:15:38.640 --> 0:15:41.160 I think that's you know, you have to recognize that 0:15:41.320 --> 0:15:46.880 this this, uh, these accusations of Chinese cyber attacks have 0:15:47.040 --> 0:15:51.320 been poisoning US China relations for more than a decade UM. 0:15:51.440 --> 0:15:53.760 And this is one really sort of recalls an episode 0:15:53.800 --> 0:15:56.720 that I reported on extensively. It was about it was 0:15:56.760 --> 0:16:00.800 about a decade ago UM when Chinese military hack has 0:16:01.080 --> 0:16:06.720 got into Google servers and came very close to stealing 0:16:06.920 --> 0:16:10.920 Google source code, and that triggered a whole chain of 0:16:10.960 --> 0:16:15.920 events which ultimately led to Google exiting China or taking 0:16:16.000 --> 0:16:19.400 its um it's search engine out of China. This one, 0:16:19.560 --> 0:16:23.760 I think it is significant that Microsoft is at the 0:16:23.840 --> 0:16:28.280 heart of it. Another iconic US tech company, but also 0:16:28.400 --> 0:16:32.760 one that has invested over the years massively in China 0:16:33.280 --> 0:16:36.960 in spite of not getting much revenue out of China 0:16:37.120 --> 0:16:41.040 at all. I mean, Microsoft has been so dedicated to 0:16:41.520 --> 0:16:46.120 China's economic and technical development. It has its largest R 0:16:46.200 --> 0:16:50.600 and d UM unit in the world, facility in the 0:16:50.720 --> 0:16:55.640 world outside of the United States in China. So you know, 0:16:56.560 --> 0:16:58.760 later on top of that, what we've been seeing in 0:16:58.960 --> 0:17:03.600 terms of the Chinese government's crackdown on big Chinese tech companies, 0:17:03.640 --> 0:17:06.960 concerns about information we see it as you write about 0:17:07.480 --> 0:17:12.560 again about D d UM, what does it mean longer term? Andy, 0:17:12.600 --> 0:17:16.800 when it comes to foreign investment in Chinese companies or 0:17:16.840 --> 0:17:19.719 in China large you know better than all of us, 0:17:20.280 --> 0:17:22.280 UH and anybody's been reporting on business news for a 0:17:22.359 --> 0:17:25.840 long time, is that, you know, global multinational companies all 0:17:25.880 --> 0:17:27.560 they wanted to do is have some kind of presence 0:17:27.600 --> 0:17:29.680 in China, and we're really kind of willing to do 0:17:29.800 --> 0:17:32.119 anything to have some kind of footprint on the ground. 0:17:32.760 --> 0:17:35.480 Does that change going forward because of all of this 0:17:35.600 --> 0:17:38.760 that's going on. Look, I think I think you have 0:17:38.960 --> 0:17:44.600 to see this in the context of a steady deterioration 0:17:45.160 --> 0:17:48.800 UH in U S China relations. I mean, it just 0:17:48.920 --> 0:17:55.840 seems like we're getting revelations almost daily. Um. You know, 0:17:56.320 --> 0:17:58.399 it's so just in the last couple of days, the 0:17:58.600 --> 0:18:03.960 Biden administration has warned US companies against doing business in 0:18:04.119 --> 0:18:09.320 Hong Kong. Janney Yellen, the Treasury secretary. US Treasury Secretary, 0:18:09.960 --> 0:18:14.720 has announced that she's not going to restart the Security 0:18:14.800 --> 0:18:17.920 and Economic Dialogue, which has been the prime platform for 0:18:18.080 --> 0:18:23.680 US China negotiation on their bilateral relationship since the George W. 0:18:24.040 --> 0:18:28.359 Bush administration. Janet Yellen also, in an interview with The 0:18:28.440 --> 0:18:31.920 New York Times, UM has called into question whether or 0:18:31.960 --> 0:18:36.359 not the US is um going to you know, is 0:18:36.400 --> 0:18:39.960 going to keep to this the trade agreement that was 0:18:40.040 --> 0:18:44.680 the crowning achievement of UM, you know, the the last 0:18:44.760 --> 0:18:48.840 Trump administration. UM. So it's it's it really is all 0:18:48.960 --> 0:18:51.480 sort of falling apart. And then you know, you look 0:18:51.520 --> 0:18:53.960 at you look at this episode UM with d D 0:18:54.600 --> 0:18:57.320 and the announcement basically by the Chinese side that they're 0:18:57.880 --> 0:19:00.040 they're not gonna they're not going to allow you a 0:19:00.320 --> 0:19:02.800 Chinese companies to list in the US. And now you 0:19:02.920 --> 0:19:06.520 start getting capital market decoupling on top of all of 0:19:06.560 --> 0:19:09.479 the rest of it. So, Andy, there are worries, right 0:19:09.560 --> 0:19:13.399 and then there are the financial markets and investors who say, Yep, 0:19:13.440 --> 0:19:16.120 I'm worried, but I still see opportunity. You actually caught 0:19:16.200 --> 0:19:18.040 up with one that I think is a really key 0:19:18.160 --> 0:19:20.000 voice in trying to figure out what does this mean? 0:19:20.080 --> 0:19:24.240 What are the investment implications? Um, when it comes to 0:19:24.280 --> 0:19:27.439 what's going on in China. So I think two things. 0:19:27.640 --> 0:19:33.119 First of all, UM, investors still largely see opportunity in 0:19:33.280 --> 0:19:38.240 China that they tech invests in particular, see China as being, 0:19:38.880 --> 0:19:43.040 you know that the fastest growing source of consumer demand 0:19:43.200 --> 0:19:46.720 in the world, and so they're going to be there. Um. 0:19:47.119 --> 0:19:50.000 That's the first takeaway, regardless of everything that's going on. 0:19:50.280 --> 0:19:54.040 But what they are seeing is a lot of disruption 0:19:54.280 --> 0:19:58.080 in the near term. The reason that China was actually 0:19:58.320 --> 0:20:02.560 encouraging its tech companies to list outside of China is 0:20:02.640 --> 0:20:08.920 because the regulators within the financial regulators within China understood 0:20:09.000 --> 0:20:12.080 that Chinese markets simply weren't ready for that volume of 0:20:12.119 --> 0:20:15.080 I p o s. And what's going to happen now, 0:20:15.600 --> 0:20:19.000 according to the investors that I've been talking to, is 0:20:19.560 --> 0:20:22.000 that they're going to list now in in China, which 0:20:22.040 --> 0:20:24.200 and by the way, it takes a lot longer list 0:20:24.280 --> 0:20:27.000 in China than it does in the United States, and 0:20:27.320 --> 0:20:32.960 this is potentially going to deter UH investment in startups 0:20:33.200 --> 0:20:37.720 and damage China's entire innovation ecosystem. So there will be 0:20:37.800 --> 0:20:43.840 some implications it definitely Yeah, real real, real, short term, 0:20:44.160 --> 0:20:48.600 real short term disruption UH in you know the the 0:20:49.560 --> 0:20:52.960 people forget actually you know that that the initial wave 0:20:53.240 --> 0:20:58.960 of Chinese tech companies were funded and nurtured by foreign investors, 0:20:59.200 --> 0:21:02.680 most of them US investors. And even though that balance 0:21:02.760 --> 0:21:04.880 is now shifted where most of the money is coming 0:21:04.920 --> 0:21:08.480 from China, foreign investors still have a critical role to 0:21:08.600 --> 0:21:12.280 play UH in the development of Chinese technology, and this 0:21:12.520 --> 0:21:15.080 calls into question whether or not they're going to be 0:21:15.119 --> 0:21:17.399 able to free the invest Well, I highly recommend everybody 0:21:17.480 --> 0:21:20.320 check out Andy's latest column because it does have his 0:21:20.400 --> 0:21:22.600 interview he did with Gary Riischel, who he and his 0:21:22.720 --> 0:21:25.520 firm have invested in college endowment funds at a number 0:21:25.560 --> 0:21:28.320 of Chinese uniforms. So there's this incredible back and forth 0:21:28.560 --> 0:21:31.680 between Andy and Gary. Andy Brown, thank you, editorial director 0:21:31.720 --> 0:21:39.399 of Bloomberg New Economy brow the journal. Now but you 0:21:39.520 --> 0:21:44.520 let me drive Oh no, no, no, no, please, I'll 0:21:44.560 --> 0:21:54.240 do the right lest I want to drive just drives 0:21:54.320 --> 0:22:06.160 the question. Yeah, drive to the globe. Thanks, we'll drying 0:22:06.280 --> 0:22:10.320 us dawn radius. All right, just about ten and a 0:22:10.320 --> 0:22:13.840 half minutes left until today's closing bell. Charlie, of course, 0:22:13.880 --> 0:22:17.560 breaking down, uh, those major equity averages. We are down 0:22:17.640 --> 0:22:20.399 across the board, just off our loads of the session. 0:22:20.440 --> 0:22:22.960 But there is a question out there, you know, is 0:22:23.560 --> 0:22:26.200 economic growth has it peaked? So let's get to it 0:22:26.359 --> 0:22:28.960 with our market close guest, time for the drive to 0:22:29.000 --> 0:22:31.359 the close. You back. Puri is chief investment officer of 0:22:31.400 --> 0:22:34.159 America's of A Deutsche Bank Wealth back with us on 0:22:34.280 --> 0:22:37.040 the phone from New York City. De Back, Good to 0:22:37.119 --> 0:22:40.960 have you here with us. So what do you see 0:22:41.119 --> 0:22:45.560