Speaker 1: I'm Caroline Hyder Bloomberg's World sead quarters in New York,
Speaker 1: and I made Ludlow also in New York this week.
Speaker 1: This is Bloomberg Technology coming up samm Gunfried. He responds
Speaker 1: to charges in a detailed posts saying in still funds
Speaker 1: or stashed billions away. And scrutiny of Disney leadership continues,
Speaker 1: with activist investor Nelson Pelts nominating himself to the company board.
Speaker 1: What could this mean for Bob Biga? And we talk
Speaker 1: with a venture capital founder backed by Melinda French Gates
Speaker 1: about her new fund dedicated to investments in longevity, the
Speaker 1: spending power and influence of women and diverse communities. But
Speaker 1: first let us check in on these markets, because once again, friends,
Speaker 1: it was a day of macro affecting your benchmarks and
Speaker 1: looking at the CPI print, the inflation data actually show
Speaker 1: aid drop in overall prices in the month of December
Speaker 1: versus the month of November, down north point one percent.
Speaker 1: If you look at month or month overall, we're still
Speaker 1: seeing that CPI showing that inflation is cooling, maybe even
Speaker 1: peaked that as the market liked nascack up six cents
Speaker 1: of percent all country World Index now up for five
Speaker 1: straight days, similar moves to the NAZTAC five stup days.
Speaker 1: It's the longest winning street we've seen since July twenty two.
Speaker 1: And really the key move was in borrowing costs yields bonds.
Speaker 1: We see yields come down by twelve basis points on
Speaker 1: a five year, but across the curve we see borrowing
Speaker 1: costs fall. As we think the Federal Reserve it's going
Speaker 1: to start slowing that pace of hiking. Certainly we're hearing
Speaker 1: from a libany of the members of the f O
Speaker 1: m C talking about now just a quarter of a
Speaker 1: percentage point is a new norm. Let's flipping it on
Speaker 1: because I wanted to look at there for what happens
Speaker 1: to the US dollar. The US dollar has been on
Speaker 1: a weakening trajectory. In fact, it was down versus basically
Speaker 1: every single G ten currency. Look at the Japanese N.
Speaker 1: The w c RS function World Currency Rankings on the
Speaker 1: Bloomberg shows that the Japanese N on the day was
Speaker 1: up more than two point four percent than nor we Chrone,
Speaker 1: Ozzie dollar, Europe all doing well. This, of course is
Speaker 1: a story of strength versus the US dollard. Yeah, we've
Speaker 1: got some breaking news also happening after market. Carrow Apple
Speaker 1: saying in a regulatory filing that Tim Cook's salary for
Speaker 1: three his compensation will be reduced to a more modest
Speaker 1: million dollars. They're saying the regulatory filing that Tim Cook
Speaker 1: had some influence on this, and going forward they'll re
Speaker 1: evaluate his pay relative to peers, bringing it more in
Speaker 1: line to the eighty to ninety percentile, which you know,
Speaker 1: still a lot of money, but interesting development, happy areas.
Speaker 1: There's a sort of modest reaction down a tenth to
Speaker 1: a cent on Apples dog in that after ours move,
Speaker 1: we got the reaction we expected when inflation came in
Speaker 1: in line with expectation. When it came to tech dogs,
Speaker 1: that was kind of one of the primary movers. Interesting
Speaker 1: forward ten straight days of gains, its longest streak on record.
Speaker 1: No real catalysts or news in the news cycle, but
Speaker 1: interesting to see that performance to start the year from
Speaker 1: Ford as it shifts towards E V East. Tesla up
Speaker 1: three tens and one percent. It had been lower for
Speaker 1: much of the session. Disney, We're gonna get into investors.
Speaker 1: It's not clear whether this was kind of part of
Speaker 1: the broader market move or investors cheering the activism that
Speaker 1: we're seeing from Tryann and Nelson Pelts. We're going to
Speaker 1: talk about that in just a moment. In t SMC
Speaker 1: really interesting, it's US listed shares. It's a d r
Speaker 1: S up six point four percent this Thursday. The company
Speaker 1: cutting its capex in response to slowing demand, particularly consumer electronics.
Speaker 1: Revenue forecast for the FISC WAL first quarter slightly below
Speaker 1: street expectations, but they're saying they're seeing improvement of supply,
Speaker 1: particularly for automotive and how there's been a shortage of
Speaker 1: chips there. Bitcoin interesting, We continue to see strength and bitcoin.
Speaker 1: I want to get straight to a Bloomberg tuminal chart
Speaker 1: behind me. There's still this really high correlation right between
Speaker 1: bitcoin and technology stocks, and that this hasn't add to
Speaker 1: that futures in this charts case. I think it will
Speaker 1: be really interesting carry to look at this correlation as
Speaker 1: we go forward. Right the narratives move now to twenty
Speaker 1: five basis point hikes in the short term from the
Speaker 1: Federal Reserve that's got the tech balls coming out. Well,
Speaker 1: if the balls are out for stocks might not seek
Speaker 1: some continued momentum for bitcoin as well. Well, let's look
Speaker 1: at what might be a more bearish and narrative. Currently
Speaker 1: in crypto, we have breaking news that the SEC is
Speaker 1: suing the crypto brokerages Genesis and Gemini. This is for
Speaker 1: offering unregistered securities through their joint Earned product as it
Speaker 1: was called. Now, this is all, of course, the product
Speaker 1: to do with Cameron Winkle us and currently the attack
Speaker 1: he's making on DCG S Barry Silvert. They've been fighting
Speaker 1: back and forth about really who's to blame for what
Speaker 1: has been well, the fallout ever since the Earned program
Speaker 1: has of course been a problem following the claps of
Speaker 1: crypto more broadly. But the SEC really deeming that basically
Speaker 1: you cannot be using these sorts of products that let
Speaker 1: customers loan out their assets in exchange for interest payments,
Speaker 1: and they're saying, of course this is unregistered securities. Shinnalie
Speaker 1: Bassett joins us for more so, the SEC once again
Speaker 1: weighing in on crypto, certainly in a big way. Caroline,
Speaker 1: here you have the SEC has complained here calling into
Speaker 1: question Genesis and Gemini in the same complaint. Now, why
Speaker 1: is that interesting? We have again to your point that
Speaker 1: you're making here these two counterparties that had previously been
Speaker 1: suiting over how the situation has been handled since holding withdrawals.
Speaker 1: Now what does the complaints say? As you said, they're
Speaker 1: looking at the unregistered offer and sale of securities to
Speaker 1: US retail investors. You also have the SEC talking about
Speaker 1: the marketing from both parties here, both parties, and I
Speaker 1: want to be very specific, it is Genesis Global Capital,
Speaker 1: the subsidiary of that large Genesis trading desk here that
Speaker 1: is part of the defendants being named in this complaint,
Speaker 1: but both of them marketing these assets to investors and
Speaker 1: being called into question by the SEC. Now, remember this
Speaker 1: comes just days after that big open letter you saw
Speaker 1: from Cameron winkle Boss, after a number of correspondences between DCG,
Speaker 1: that Digital Currency Group, that big entity run by Barry Sobert,
Speaker 1: as well as the Winkel Bosses twins Gemini for this
Speaker 1: gem the earned product. And it's days after you have
Speaker 1: Cameron Winklevoss alleging here private lies and accounting fraud. And
Speaker 1: also in the same week that you have Barry Silber,
Speaker 1: the head of Digital Currency Group, also reaching out to
Speaker 1: investors with a very large multi page question and answer
Speaker 1: here that addresses how Digital Currency Group uses the proceeds
Speaker 1: of loans borrowed from Genesis Capital, the same asset here
Speaker 1: in question that is under the sec review. Now there
Speaker 1: will be a lot of questions both from investors as
Speaker 1: well as regulators on where the money went, what, what
Speaker 1: kind of money was lost, how you get it back.
Speaker 1: But at the end of the day, as I said before,
Speaker 1: these two are being named the complaint together after days
Speaker 1: and days and days months really sparring. And so how
Speaker 1: they handle this when they're both listed together as under
Speaker 1: the complaint of the Securities and Exchange Commission. Yeah, this
Speaker 1: is an interesting development in POD because Bloom reported last
Speaker 1: week according to sources, that federal prosecutors were looking into
Speaker 1: Barrios Barry Silber in the Digital Currency Group. So now
Speaker 1: we have this triangle, right, Vinkl Voss Silber regulators. As
Speaker 1: you said, the complaint is joint between them. Bring tie
Speaker 1: that all together. What is the relationship as it stands
Speaker 1: now between Barry silver and the Winkl Voss brothers twins
Speaker 1: as it stands Remember they have been both kind of
Speaker 1: at war here, uh, And I think what's worth kind
Speaker 1: of pointing out here is the difference between how Genesis
Speaker 1: frames this issue versus the wink of Voss twins. We
Speaker 1: reported in late November actually that when Genesis was out
Speaker 1: kind of looking for money, we had reported they had
Speaker 1: reached out to a number of big investors to try
Speaker 1: to really stave off some of these issues. As they
Speaker 1: did that, they revealed all of these loans that existed
Speaker 1: between Genesis as well as other Digital Currency Group experts
Speaker 1: here or entities here. Now remember those entities um investors
Speaker 1: of Digital Currency Group did have clarity into how the
Speaker 1: entity worked. So the big reveal here then becomes now
Speaker 1: you know, regulators asking questions about where the money went
Speaker 1: at the end of the day, but also the allegations
Speaker 1: being made by Gemini and Gemini earns products on behalf
Speaker 1: of those more than three hundred thousand customers. Remember when
Speaker 1: you look at Digital Currency Groups response to this publicly,
Speaker 1: they said this is a way for Gemini to be
Speaker 1: deflecting blame. But again the way that this is culminating
Speaker 1: now they both are under this complaint for the sec
Speaker 1: Let's weave all of this narrative together, Shinali, because a
Speaker 1: lot of the reasons that the funds have been trapped
Speaker 1: in Genesis is because of the ongoing fallout across crypto.
Speaker 1: Then in many parts wasn't just started by the collapse
Speaker 1: of fd X. It came much prior to that. Actually
Speaker 1: some of them related to lending products themselves. But just
Speaker 1: talk to us about what we've heard from sat Magman
Speaker 1: Free today about the st X full out and really
Speaker 1: how all of this is one big similar collapse that
Speaker 1: is just having so much of a contagion effect. Yeah,
Speaker 1: it's really interesting because we've heard of course Sam Bigen
Speaker 1: freed before the indictment came out, him have his media tour,
Speaker 1: but then since he's been on house arrest, we've seen
Speaker 1: him tweet here and there, and now we have a
Speaker 1: sub stack coming out as well in which he's detailing
Speaker 1: kind of his defense here on this idea that he
Speaker 1: didn't steal funds, he didn't stash them anywhere. That the
Speaker 1: name of this sub stack was ft X pre Mortem Overview.
Speaker 1: He also links the issue to how he was treated
Speaker 1: by rivals. He's been complaining about finance and the handling
Speaker 1: of assets for a while here. Now, at the end
Speaker 1: of the day, what happened in the middle of last year,
Speaker 1: Luna three Arrows, people lost a lot of money, and
Speaker 1: it's spirals from there, and it's kind of as simple
Speaker 1: as that, alright, bloom bog Stionnali Bassett keeping us posted
Speaker 1: on every twist and turn in an industry under duress,
Speaker 1: executives under the spotlight, And speaking of executives under the
Speaker 1: spot let's talk about Disney, where activists invested. Nelson Pelts
Speaker 1: has nominated himself to the board. This could become a
Speaker 1: highly public abait over Disney's returning CEO, Bob Iger and
Speaker 1: his leadership. Bloomberg's managing editor for Global Business, Creating Harrison
Speaker 1: with us in New York. I guess the question you
Speaker 1: go straight to is what is Nelson Peltz trying to
Speaker 1: get out of this Well, he's trying to get the
Speaker 1: things out of it. Then Nelson Peltz is always trying
Speaker 1: to get out of these things, right, which is we
Speaker 1: can squeeze cost savings, we can run this business more efficiently.
Speaker 1: You know. He argues that Disney has been overpaying for
Speaker 1: assets for a while, especially the Fox steal from a
Speaker 1: few years back. Um. You know, he criticizes them for
Speaker 1: having gone after Sky which they did not win. But
Speaker 1: we're willing to bid up the price quite a bit
Speaker 1: on he has it's time to shake things out and
Speaker 1: uh and and and have a little more focused on
Speaker 1: operating margins and restored the dividend. He's calling for the
Speaker 1: dividend to be restored by five Remember that went away
Speaker 1: early in the pandemic, as it did for many companies. Now,
Speaker 1: none of these perhaps challenges and concerns must be that
Speaker 1: much of a shock to Disney. They know that they've
Speaker 1: had some issues. They've just announced changes at the board level,
Speaker 1: perhaps in a focus at least on success should but
Speaker 1: ultimately they're not gonna want Pelts on the board. No,
Speaker 1: they very much do not want Pelts on the board.
Speaker 1: I think Bob Iger would like to, you know, have
Speaker 1: a chance to run this show himself without without input
Speaker 1: from Nelson Um. But they are, you know, sort of
Speaker 1: acknowledging that there's at least some public facing changes that
Speaker 1: they need to make. One interesting little piece of brinkmanship
Speaker 1: is that Pelts was supposed to unveil his big campaign
Speaker 1: this week, and it's Disney actually got out ahead of
Speaker 1: it with the announcement of the change in this board. Now,
Speaker 1: it says Susan Arnold had already hit the age limit
Speaker 1: or I'm starry, not the age limit, but the tenure
Speaker 1: limit to be on the board. Um. But the coincidence
Speaker 1: is there if you want to read into it. Um.
Speaker 1: They also did announce that they're establishing a succession committee
Speaker 1: at the board level. So that's a signal to investors, Hey,
Speaker 1: we know we need to you know, set our course
Speaker 1: on the future and decide who will eventually replace Bob
Speaker 1: Iger in a couple of years. UM. That is very much,
Speaker 1: you know, sort of a first volley in what is
Speaker 1: likely to be a months long five This is like
Speaker 1: one of those stories where you actually do some contexts
Speaker 1: of recent history where you know Iger has returned to
Speaker 1: see having retired quote unquote, they don'tly just renewed JPEX
Speaker 1: contract before he was dismissed. Essentially, we actually asked our
Speaker 1: audience if Pelts has a point? Here? Does Pelts have
Speaker 1: a point? Um? These are the results from the Twitter
Speaker 1: poll that we did. I'm not entirely surprised by this.
Speaker 1: Respondents asking who who is Pelts? The answer really is
Speaker 1: he's a classic activist, isn't he? And he built up
Speaker 1: that stake in November. Um, I guess does he have
Speaker 1: any track record? Of achieving these things. Absolutely. He changed
Speaker 1: Disney absolutely, and you can argue that he already has
Speaker 1: with these moves, right. Um, but you know, you look
Speaker 1: at examples like Procter and Gamble General Electric, the executives
Speaker 1: of those companies would say he very much changed it.
Speaker 1: There's a great example of DuPont, which is a company
Speaker 1: that he didn't actually win his activist fight, but the
Speaker 1: CEO was out months later. They had a bunch of
Speaker 1: cast cuts there now. So he is a big deal
Speaker 1: and he will make his presence felt, and some analysts
Speaker 1: say maybe they need to listen to the point thing.
Speaker 1: Great to have you here, Thank you so much, cause
Speaker 1: Bloomberg's managing editor of Global Business, Claydon Harrison. Meanwhile, coming up,
Speaker 1: we've got a little bit of sprinkling of VC action,
Speaker 1: right Eddie. We're talking about pitch Book. It's out with
Speaker 1: its new report on the state adventure capital in two.
Speaker 1: Spoiler alert, it's not too pretty. More on that. Next,
Speaker 1: this is Bloomberg. We raised this round in a context
Speaker 1: where the business was growing incredibly well. We grew AX one,
Speaker 1: we grew almost forex in twenty two. Yes, the market
Speaker 1: is more difficult. Um, I think there is much greater
Speaker 1: scrutiny of our financial financial performance. You're and so on,
Speaker 1: but underlying, you know, the numbers really did speak for themselves.
Speaker 1: That was Peppy co founder and co CEO Rejewla poor
Speaker 1: A talking with Carrol twenty four hours ago about the
Speaker 1: current environment for raising money, and I think we've got
Speaker 1: to get some context on this. This is the talking
Speaker 1: point beyond Silicon Valley where founders and those who have
Speaker 1: backed them historically are thinking about what on earth is
Speaker 1: going on in all sorts of economies. Carl Stanford, lead
Speaker 1: vcn lists at pitch Book, joins us from San Francisco.
Speaker 1: Pitchbook out with its report for two and the State
Speaker 1: of Venture Capital two in summary, was a transition year, right, Kyle.
Speaker 1: It was difficult, It was hard, There was a pullback
Speaker 1: in funding overall. What is the conclusion that you guys
Speaker 1: reached when you took to a look back at the year.
Speaker 1: I think a transition year is a really were a
Speaker 1: really good way to describe what we saw in two.
Speaker 1: Throughout the year, the momentum of the venture market that
Speaker 1: had really grown in faded pretty quickly from Q one,
Speaker 1: which we saw as in the most active quarter in
Speaker 1: our dataset to Q four, we saw deal count drop,
Speaker 1: we saw deal value drop sixty which is an incredible
Speaker 1: number when you look at where that is coming from,
Speaker 1: though a lot of that is coming from the unicorns,
Speaker 1: the late stage, the gross age of venture which really
Speaker 1: saw a huge amount of capital pushed into the market
Speaker 1: of the past few years, which when when you see
Speaker 1: the crossover investors pull out and readjust their investment strategy,
Speaker 1: that capital, that is those late stages every led on
Speaker 1: came out pretty quickwo. I think what's really interesting in Caroline,
Speaker 1: and I've have been discussing this every single day, is
Speaker 1: how actually it wasn't completely doom and gloom, and it
Speaker 1: may not be complete dooming Glean three because at the
Speaker 1: early stage, you know seed precede um, that there seems
Speaker 1: to be more appetite to deploy capital because right if
Speaker 1: you're a venture capitalist, you take a long term view.
Speaker 1: You know, you know you're not going to have an
Speaker 1: exit for for a while. Is that a fair assessment
Speaker 1: of the psychology I suppose of this industry right now? Yeah,
Speaker 1: that's exactly right. When you think about seed stage companies
Speaker 1: or even Series A, Series B, those companies, even the
Speaker 1: most successful ones are years and years away from the
Speaker 1: public markets, so they do have a little bit of
Speaker 1: an immediate installation from the broader Macwick economy. But we
Speaker 1: do believe that there is still some deflation to come
Speaker 1: out of this market after the exuberance, and the longer
Speaker 1: the macro volatility persists, we do expect early stage and
Speaker 1: seed to start to see that crunch that the late
Speaker 1: stages is seen. Right now, go global for US if
Speaker 1: you can, because well, it's interesting. Is the outperformance of
Speaker 1: late last couple of months of the public markets in
Speaker 1: Europe visit v the US. I'm interested. Of course, that
Speaker 1: comes from a lower base, whether Europe and other areas
Speaker 1: we've heard from Textiles for example, talking about exuberance and
Speaker 1: excitement going on in Africa, and at least from a
Speaker 1: seed stage around and indeed from the actual startup culture
Speaker 1: there at the moment. Are we likely to still see
Speaker 1: the money in Silicon Valley, New York or is it
Speaker 1: going to spread out a little bit more? I think
Speaker 1: we've seen the spread out really happened over the past
Speaker 1: few years. But when you look at the data, the
Speaker 1: way we tracked data, and all the capital being located
Speaker 1: in the headquarters of the fund. We at seventy seven
Speaker 1: billion dollars raised in Silicon Valley this year. UM. A
Speaker 1: lot of those huge mega funds that we see being
Speaker 1: raised our headquarters are by firm's headquartered in Silicon Valley.
Speaker 1: So when you look at the data, it does look
Speaker 1: very concentrated. But we do believe, especially from kind of
Speaker 1: the the change towards zoom and towards a more global
Speaker 1: venture market, we will see that capital spread out UM.
Speaker 1: One interesting notable report is that the Silicon value of
Speaker 1: the Bay Area actually saw less than of deal count
Speaker 1: in the US for the second quarter in a row,
Speaker 1: which is the first time that's happened in our data set. UM.
Speaker 1: And so even though the capital is staying here, there
Speaker 1: is a much more global venture economy. Would that be
Speaker 1: you know, moving the capital to the Midwest or to
Speaker 1: some of the second tier cities in the US, or
Speaker 1: to seeing capital go to Latin America or Europe. We've
Speaker 1: seen a lot of growth everywhere and talk to us.
Speaker 1: Can you break it down by industry Where remained relatively healthy,
Speaker 1: Where was able to weather some of the concerns, All
Speaker 1: were able to break it out as much as well.
Speaker 1: Hell Care fintech cybersecurity store remains pretty resilient in the
Speaker 1: face of a recessionary environment. I'm not sure any sector
Speaker 1: really weather the storm in two. I think everyone was.
Speaker 1: Every sector was there right for some kind of pull
Speaker 1: back from VC because of the exuberance, and then the
Speaker 1: media we saw one. But when we look from a
Speaker 1: sector of perspective, the first place we look is the
Speaker 1: public markets. Fintech had a really difficult year. Cloud has
Speaker 1: stayed a little bit better, and you can see that
Speaker 1: reflected in the valuations that are coming across in the
Speaker 1: private market. I think that there's two data points I
Speaker 1: want to hit with you really quickly. Kyled it they
Speaker 1: even though they weren't necessarily the deals in two. I
Speaker 1: think I'm right in saying that actually venture capitalists all
Speaker 1: around the world launched quite a few new funds, right.
Speaker 1: They at least got their war chests set up. If
Speaker 1: they didn't then deploy them right, and we may not
Speaker 1: see them deployed this year. The other data set that
Speaker 1: really catches my eyes that about capital invested in female
Speaker 1: founded companies. Could you just speak to us about that
Speaker 1: that trend that you saw in four female companies. Yeah,
Speaker 1: I think female founder companies have been um, you know, uh,
Speaker 1: a point of interest for for much of the industry.
Speaker 1: In the past few years. UM, there's been a lot
Speaker 1: of new funds that have been raised by female gps.
Speaker 1: There's been a lot of uh, you know, you know,
Speaker 1: help from the industry to make sure that there's more
Speaker 1: capital going to female founding companies. I think one data
Speaker 1: point that gets tossed around there is the percentage that
Speaker 1: is raised by female founding companies of the total deal value.
Speaker 1: And the unfortunate part of that is that it is
Speaker 1: very low, and no matter whey you cncisate, it's not
Speaker 1: going to look great. But a lot of that is
Speaker 1: is influenced by the huge deals that we've been seeing
Speaker 1: over the past few years. We had eight hundred fifty
Speaker 1: seven hundred million dollar deals closed in one we had
Speaker 1: a you know, a four hundred fifty of those closes
Speaker 1: in and many of those are artists, older companies, and
Speaker 1: they have been started by by by men, and so
Speaker 1: there has been a push towards more investment in female
Speaker 1: founding companies and hope, we're hoping that because of the
Speaker 1: fundraising that has been done by by female led gps
Speaker 1: as well as the initiative of you know, the broader industry,
Speaker 1: that we will see a sustained growth in investment into
Speaker 1: female founding companies, and we've got a female lad fund
Speaker 1: coming on a little bit later in the show, Carl,
Speaker 1: just briefly from the diversity's perspective, many have been worrying that,
Speaker 1: you know, it's a recent trend that money had been
Speaker 1: put to work in this and therefore when we go
Speaker 1: back retrench worry people go back to their previous old norms.
Speaker 1: Are you hearing that three people are still gonna be
Speaker 1: stood by ensuring their backing diverse founders, diversity of thought
Speaker 1: In a similar way from investment, we we thought the
Speaker 1: exact same thing was going to happen to the small,
Speaker 1: small ecosystems that had really popped up in the Midwest
Speaker 1: and then hadn't had the local fundraising and had received
Speaker 1: a lot of capital from the East Coast or a
Speaker 1: Bay area. What we did see, though, there was a
Speaker 1: sustained growth in the smaller markets, and we believe that
Speaker 1: whether it be in female founding companies or whether they
Speaker 1: be even more diverse founder um group, we do believe
Speaker 1: that there has been the sustaina momentum behind that um,
Speaker 1: and we do believe that should be a good year
Speaker 1: because of the number of funds that were raised to
Speaker 1: focus on those different initiatives. Thank you for REMINISCINGO and
Speaker 1: pushing us forward to Carl Stanford. We thank you. VC
Speaker 1: anless over at pitchbook time for top tech calls. First
Speaker 1: up Netflix Jefferies upgrading to buy from hold with a
Speaker 1: new price target for three five dollars. The firm seas
Speaker 1: upside surprises to the company's operating margin and believes the
Speaker 1: second half of twenty three and should be good for Netflix,
Speaker 1: but also looks at electronic cards, Take two and some
Speaker 1: toy stocks despite short term pressure points. Moving on to
Speaker 1: Best Buy downgraded by X and BNP Paraba from outperformed
Speaker 1: to neutral. The new price target now seventy four dollars,
Speaker 1: implying a four teen percent decrease from its last price.
Speaker 1: Other analysts weighing in on this stock before Goldman Sacks,
Speaker 1: for instance, upgraded shares best Buy last month from a
Speaker 1: cell rating to neutral, lifting their target price to three dollars. Finally,
Speaker 1: security software named c Scaler downgraded at Morgan Stanley's slower
Speaker 1: growth for security landscape lowering its price target from one
Speaker 1: six two to one tenny. A little bit positives and
Speaker 1: some secular tail wins there for that stock carrow. Fascinating
Speaker 1: group to keep close eye on. Welcome back to Bloomberg
Speaker 1: Technology and we've got to talk to see a little
Speaker 1: bit of it. Stick with it, and let's go to
Speaker 1: San Francisco. You're not there, but some key players are.
Speaker 1: There is a new fund in play in SF. Cake
Speaker 1: Ventures it's just closed its first fund, seventeen millillion dollar vehicle.
Speaker 1: It's going to invest in minority founders, those building products
Speaker 1: for changing demographics across America. Backers include Bag of America,
Speaker 1: Melinda French Gates, Pivotal Ventures founder Many Woodard is joining
Speaker 1: us now from the studio, and Mini. I mean congratulations
Speaker 1: and talk to us about the layers. I liked the
Speaker 1: description you called cake Ventures the layers in which you're
Speaker 1: going to be targeting when looking to deploy your money exactly.
Speaker 1: Thanks for having me having me so. Cake Ventures is
Speaker 1: focused on big technological changes combined with demographic shifts, and
Speaker 1: we back and invest capital into companies that touch areas
Speaker 1: of demographic change, including aging and longevity, increased spending power
Speaker 1: of women, and the rise of a new majority. Talk
Speaker 1: to us about the rise of a new majority, because
Speaker 1: I think that's a really fascinating shift. Just sort of
Speaker 1: talking about tech adopters who are coming from well minority
Speaker 1: led areas, particularly more more, the people of color Asian
Speaker 1: communities that are building something culturally as well as financially,
Speaker 1: really correct. Um. You know, these three groups, Asian, Black,
Speaker 1: and Latinos have an increasing influence on Internet culture, UH,
Speaker 1: increasing their spending power, and I think for Cake Ventures
Speaker 1: that means that this is an area that we want
Speaker 1: to invest in and invest in quite early and many congratulations.
Speaker 1: As Caroline said, it's really interesting to speak to a
Speaker 1: new name in the world of venture capital. We've been
Speaker 1: talking to founders, you know, a week pretty much about
Speaker 1: how difficult it's been to raise money for those startups
Speaker 1: in this environment. And I kind of want to put
Speaker 1: the same question to you. You know, who are your LPs,
Speaker 1: Where did the money come from? And how how hard
Speaker 1: was it for you to get this vehicle finalized. Well,
Speaker 1: we have great LPs like Pivotal Ventures and Melinda French
Speaker 1: Gates Company, Bank of America, Sindonna Capital, UH Foundry Group
Speaker 1: fund of funds like that, UM, and you know, we
Speaker 1: are in a really challenging time for entrepreneurs and for
Speaker 1: emerging fund managers. UM. I won't deny that, but UM,
Speaker 1: you know, if you were building, there's never been a
Speaker 1: better time to be building something uh game changing in technology,
Speaker 1: and the capital is out there. But it is a
Speaker 1: difficult time and will continue to be a difficult time
Speaker 1: over the next several months, several months to a year
Speaker 1: um for people starting new companies. Hey, many, I'm also
Speaker 1: really interested in you as well. You know, I'm reading
Speaker 1: that you guys are kind of kind of cut five
Speaker 1: hundred thousand dollar checks that kind of increment. You know,
Speaker 1: how are you going to do business? Are you're gonna
Speaker 1: go out there and have one on ones with these founders?
Speaker 1: Are you inviting pitches and pitch decks to come into you?
Speaker 1: I just want to know how it works, essentially. So
Speaker 1: I've already invested in in twelve companies out of this portfolio. UM.
Speaker 1: I'm I'm a long time venture capitalists. I was at
Speaker 1: five hundred startups before as a VC and UH also
Speaker 1: was a scout at light Speed, and so I have
Speaker 1: a really great deep network of people in venture who
Speaker 1: know me, know my investing thesis and track record and
Speaker 1: who I can work with and collaborate with in order
Speaker 1: to do great deals. Now, I also go out and
Speaker 1: and hunt for deal which is one of my favorite
Speaker 1: things to do is finding new undiscovered founders building something
Speaker 1: that fits into the three layers of the cake. And
Speaker 1: that's really exciting for me. Where are these founders based?
Speaker 1: More often than not money. So although I'm based in
Speaker 1: San Francisco, six of the companies that I've invested in
Speaker 1: so far have been outside of quote unquote Silicon Valley
Speaker 1: San Francisco Bay area. And that's something that will continue
Speaker 1: to press on. You know. I think that great innovation
Speaker 1: comes from many different places, uh, And we're excited to
Speaker 1: invest in places that are outside of Silicon Valley as
Speaker 1: well as companies that originate from right here. And let's
Speaker 1: dig in a little bit more to those layers that
Speaker 1: I so love you talking about. But thinking about the
Speaker 1: way in which you're looking at demographic changes, longevity, and
Speaker 1: they're like, what companies are there for you backed what
Speaker 1: are the sort of problems Ultimately they're trying to fix.
Speaker 1: One of my companies is called Guaranteed, and they are
Speaker 1: using technology to change end of life in hospice care.
Speaker 1: That's that fits into the aging and longevity layer of
Speaker 1: the cape. Were super excited to UM to back that company. UM.
Speaker 1: I've also invested in a company called Pamper, which focuses
Speaker 1: on nails and nail art. That fits into the women,
Speaker 1: uh women layer of the cake. UM and we're we're
Speaker 1: excited to continue, you know, filling out the layers of
Speaker 1: the cake with amazing companies building uh, not only consumer products,
Speaker 1: but also building in the business, business and enterprise space.
Speaker 1: I mean, one of the things I'm always fascinated by
Speaker 1: when we we have vcs on I guess it's not
Speaker 1: just as simple as you handing over the money, right
Speaker 1: and I guess when you when you launch a thematic fund,
Speaker 1: my question to you is what other help do you
Speaker 1: offer these founders. What is it your pitch to them
Speaker 1: on why they should partner with you, why they should
Speaker 1: take your check over somebody else's. So I built Cake
Speaker 1: to own the white space around demographic chain change, because
Speaker 1: demographic change is what is going to impact every single
Speaker 1: company that is being started today, whether you know it
Speaker 1: is strictly focused on aging or whether it is a
Speaker 1: more generalized company and so one of the things that
Speaker 1: UH founders and entrepreneurs looked to me and KEG four
Speaker 1: is really helping them understand and define which demographic changes
Speaker 1: are going to be the most impactful to their companies
Speaker 1: and how to take advantage of those in a way
Speaker 1: that is both authentic and helps accelerate their growth. We
Speaker 1: were talking just about the economic environment when we now
Speaker 1: find ourselves and some have said, you know, obviously DIA
Speaker 1: strates to VC, but exciting times and seed and some
Speaker 1: many have thought maybe the talent, the talent is being
Speaker 1: let go at the moment with the countless layoffs means
Speaker 1: people are going to build right now. Do you abide
Speaker 1: by that thesis or you thinking, actually, now is the
Speaker 1: time that you're looking for. The companies have already been
Speaker 1: built and perhaps aren't taking such a risk in this time. No, definitely,
Speaker 1: you know, layoffs are really challenging time for anyone. No
Speaker 1: one you know wants to hear about big companies laying
Speaker 1: off a large amount of their staff. But you know,
Speaker 1: just like UH during the Great Financial Crisis, a lot
Speaker 1: of those a lot of those people ended up starting
Speaker 1: companies that are that have been category defining companies like
Speaker 1: Airbnb and Uber, and I think that because we are
Speaker 1: in a recession and we are in a um you know,
Speaker 1: we are really in a challenging economic time, a lot
Speaker 1: of people will now start to uh start new companies
Speaker 1: of their own and these can be the you know,
Speaker 1: the next big companies that that experience amazing growth. Alright,
Speaker 1: Monique Wild of Cake Ventures, were so grateful to have
Speaker 1: you day one, you know, officially of the vehicle launch,
Speaker 1: and in best of luck to you and the founders
Speaker 1: that you invest in. What what is happening is there
Speaker 1: is clearly themes playing out in front of Orise every
Speaker 1: day on the show, we're discussing the same thing, which is, okay,
Speaker 1: there might be a pullback in in investments from the
Speaker 1: VC world, not in early you know, precede seed stage companies.
Speaker 1: That's number one. Number two, we are seeing thematic investors
Speaker 1: look to focus on prioritize get capital to those that
Speaker 1: need it most women led startups, minority groups US And
Speaker 1: yes it's repetition, but this is what we're talking about
Speaker 1: every every single day on the show. It seems it's
Speaker 1: literally happening in real time and it's interesting to hear
Speaker 1: the dovetailing of what pitch Book has seen and the commitment,
Speaker 1: yes it is still always coming from a small base,
Speaker 1: but the resilient commitment to women minority led businesses even
Speaker 1: throughout the back end of two that you know, many
Speaker 1: have worried, Many have worried as we are into some
Speaker 1: sort of downturn, that there will be the first ones
Speaker 1: to be left behind, sort of the last ones in
Speaker 1: first ones out mentality. But that doesn't seem to be
Speaker 1: bearing out. That doesn't seem to be the case. And
Speaker 1: ultimately people want to particularly Gen Z millennials, want to
Speaker 1: invest and spend with purpose. In some way, it feels
Speaker 1: like something that you just say, but actually it's not
Speaker 1: just talking to talk. We're walking the walk in somewhere.
Speaker 1: We're seeing people get build and getting the fund in
Speaker 1: closing those rounds and actually writing those checks already what
Speaker 1: was it twelve. We're seeing the data and then from
Speaker 1: you know, investors, I mean, we're seeing it in action,
Speaker 1: you know the story behind it. Next, I think we've
Speaker 1: got to also focus a little bit on public markets
Speaker 1: because we forget, actually we're so focused right now on
Speaker 1: private There's a lot going on in the world of
Speaker 1: stocks will be right back. This is Bloomberg malcome back
Speaker 1: to me technology. I'm Caroline Hine in New York and
Speaker 1: pay please say still in New York is one Ed
Speaker 1: Ludlow only for one more day. But let's talk your
Speaker 1: favorite let's talking. Yeah, it's interesting. There's a lot in
Speaker 1: the news flow right now around electric vehicle and a
Speaker 1: lot in the market. So I thought i'd tied all together.
Speaker 1: The first thing that com actually was Lucid. I wrote
Speaker 1: a story this morning about Lucid's four year twenty two.
Speaker 1: They produced just over seven thousand vehicles, exceeding just that
Speaker 1: their guidance or target. Remember, Lucid cut it targets twice
Speaker 1: in side the year, saying they'd make twenty thousand vehicles.
Speaker 1: They cut its fourteen thousand. They cut it against seven
Speaker 1: thousand and all told, the end of the year they
Speaker 1: produced just over seven thousand, but delivered very few to customers.
Speaker 1: The market liked it, though, It's kind of relief we
Speaker 1: saw in the stock up almost five percent. Tesla was
Speaker 1: actually significantly lower at the open. Despite you know, there
Speaker 1: was this logic that you get the inflation print where
Speaker 1: we thought it would be. The FED will raise rates
Speaker 1: and lower increments tested trades at twenty five times forward earnings,
Speaker 1: maybe it would get caught up with the rest of
Speaker 1: the tech trade. It didn't, although it did close up
Speaker 1: three tenths of one percent and Ford up one point
Speaker 1: six percent. It's tenth straight session higher in the green,
Speaker 1: longest streak on record. I think that's really interesting. There's
Speaker 1: no hard news peg, but we did get that data
Speaker 1: last week about its full year twenty two EV sales
Speaker 1: in particular, so I thought to take a look at
Speaker 1: this chart because Ford is now the number two seller
Speaker 1: of electric vehicles in the United States. But this kind
Speaker 1: of tells the story, right, those big bars last year
Speaker 1: and this year for Tesla. It's e V sales globally, right,
Speaker 1: and one point three million at the end of two
Speaker 1: globally granted. But I put that US data for Ford
Speaker 1: next to it because that's principally where they're selling. Right.
Speaker 1: You've got like the the F one e one hit,
Speaker 1: the Lightning being released, the transit van, but the mainstay
Speaker 1: of what they're selling is the Mustang Mackie sixty thod
Speaker 1: or so units. So context is king right. You know,
Speaker 1: Ford is catching up, They're closing the gap. My question
Speaker 1: to all our guests going forward, is you know, is
Speaker 1: the competition coming for Tesla. That chart is simply there
Speaker 1: to demonstrate this is the market incumbent with Tesla. Right.
Speaker 1: That lead is so dramatic, it is hugely and it
Speaker 1: means so many funds are exposed, so many still committed
Speaker 1: to that stock, but some questioning how committed they should be.
Speaker 1: Let's talk to one Mark stokell a love because he's
Speaker 1: outspoken as a CEO and senior portfolio manager over Adam's Funds,
Speaker 1: which has a two point six billion dollars under management.
Speaker 1: And Mark a great quote the called r I which
Speaker 1: was immediately why I Eddie was like, we need to
Speaker 1: get this man and again, and it's because you said,
Speaker 1: with all the moving parts, basically said that there's currently
Speaker 1: too many unknowns to get a good handle on what
Speaker 1: an appropriate valuation is for Tesla. You see as a
Speaker 1: potentially a train wreck, is it? Well, it could be.
Speaker 1: I mean I think if you if you have a
Speaker 1: stock that's down, I think that's the beginning of train
Speaker 1: wreck anyway, if if it if it isn't in its
Speaker 1: own right, But I do think that there are For
Speaker 1: first of all, it's a it's a great company. But
Speaker 1: one of the things that we spent we try to
Speaker 1: spend a lot of time doing when we're looking at
Speaker 1: stocks is trying to separate the difference between a great
Speaker 1: company and a really good stock. And I do believe
Speaker 1: it's a great company. We just don't believe it's a
Speaker 1: great stock right now. And you know, some of the
Speaker 1: unknowns uh you know, have been have been pretty well documented.
Speaker 1: You know ed talked about about some of them. Um.
Speaker 1: You know, when you go from having a over a
Speaker 1: three month three month wait list to get to get
Speaker 1: a car to none when you see price price cuts
Speaker 1: in China. Now, granted China is a little different market,
Speaker 1: but they do have competition, so you know, how long
Speaker 1: until those price cuts come to the United States? And
Speaker 1: so you you you put those things together and then
Speaker 1: trying to figure out what's the appropriate price for that?
Speaker 1: What are you supposed to pay for for for for
Speaker 1: these earnings? And you know, there are a lot of
Speaker 1: people that will say, well, now it's trading at twenty
Speaker 1: four times I think it's twenty four times something like that. Um,
Speaker 1: so it's down for it sounds significantly so, and it's down,
Speaker 1: so that must be okay, And that's not the way
Speaker 1: I think investors are supposed to look at it. Uh.
Speaker 1: And what I meant by unknowns is because we don't know,
Speaker 1: because it's unclear whether how long the price cuts are
Speaker 1: gonna have to keep going in China, whether they're going
Speaker 1: to come to the United States. Um, why why would
Speaker 1: you jump in now? Why wouldn't you just wait to
Speaker 1: to let the dusk clear? Because I don't think it's
Speaker 1: going to get away from you? Ikaroking It estimated p
Speaker 1: currently training at thirty times that maybe even more innovated
Speaker 1: to certain degree. Mark are what do you need to hear?
Speaker 1: Is it the cult around you know, mosque, the way
Speaker 1: he can talk up a stock? Is it the fundamentals
Speaker 1: you need to see change in China? Yes? Is there
Speaker 1: anything that could be fixed and would immediate make you
Speaker 1: go ah, this is getting back to a good stock again.
Speaker 1: I wouldn't say immediately, but certainly there are some things.
Speaker 1: I think the rhetoric, I mean, one of the interesting things,
Speaker 1: and we I said this in a meeting yesterday is
Speaker 1: when's the last time Musk tweeted something that was silly?
Speaker 1: I mean he's done, he does it a lot, But
Speaker 1: I think he's starting to get it. I mean, I
Speaker 1: think he's starting to get that that that, you know,
Speaker 1: much of the things that he's doing outwardly is not
Speaker 1: helping not helping Tesla, So we he it appears he's
Speaker 1: backed off of that. I do think, I mean, demands
Speaker 1: the issue. And frankly, it's not just the United States
Speaker 1: and talked about Ford. Uh you know, they've they've got
Speaker 1: really good, robust competition in China. Um, I think it's
Speaker 1: waiting a quarter or two to see where is demand
Speaker 1: really going to shake out? You know. And the other
Speaker 1: thing is said, you know, they've sort of had this
Speaker 1: market to themselves for quite a long time. Uh. And
Speaker 1: and and you know there are other companies that can
Speaker 1: make good evs. Certainly Tesla makes a good ev but
Speaker 1: other companies do as well. I mean, the must than
Speaker 1: is pretty cool. Actually, hey Mark, I just want to
Speaker 1: point out real quick, you guys do hold Tesla shares,
Speaker 1: don't you. We We we do own it. I will
Speaker 1: be quick to tell you that we are underweighted. We
Speaker 1: we're benchmarked to the SP five hundred, So we own it.
Speaker 1: We're own it, but we're underweight. And frankly, if you
Speaker 1: have a second. I'll talk a little bit about that,
Speaker 1: because I think it's mean to us. The volatility of Tesla,
Speaker 1: both on the upside and the downside, is such that
Speaker 1: we think being out of it completely exposes you too
Speaker 1: much to to to the SP five hundred, So we
Speaker 1: are underweighted. That's kind of a sort of market structure
Speaker 1: and dynamics point. We showed a banner essentially on the
Speaker 1: show a second ago about Tesla's expansion plans in China
Speaker 1: being on paws and what Bloomberg reported even I it
Speaker 1: was according to sources, this plan to double the capacity
Speaker 1: of the Shanghai plant to nearly two million vehicles annually
Speaker 1: is on the whole due to influence from the Chinese government.
Speaker 1: The concern is that Elon Musk, who is also the
Speaker 1: CEO SpaceX and and SpaceX offering the starlink product is
Speaker 1: concerning to the Chinese government because if starlink would be
Speaker 1: able to use in mainland China, it could bypass Chinese firewalls,
Speaker 1: et cetera. Just bringing you the Bloomberg reporting latest on that.
Speaker 1: My question, how core is the China story to a
Speaker 1: name like Tesla and how closely our investors like you
Speaker 1: watching the economy in China. It's it's very important and
Speaker 1: I do think actually it's interesting. I think the reporting
Speaker 1: that you just talked about is likely correct. I also
Speaker 1: wonder how much of the putting putting it on pause was.
Speaker 1: We see a lot more competition now that we do.
Speaker 1: It's six months ago, a year ago, and and and
Speaker 1: therefore it might be prudent to to slow your role
Speaker 1: a little bit um rather than go full full force.
Speaker 1: But we we do look at not only do we
Speaker 1: look at the number of vehicles that are being being delivered,
Speaker 1: we we do look at a geography in China. China
Speaker 1: is a big market and that's why I mean, that's
Speaker 1: why there are a lot of other ev players in there. Um,
Speaker 1: So it is it is important. Can we talk a
Speaker 1: little bit about Disney and my understanding is you have
Speaker 1: a very smallholding of Disney. But you know, we've talked
Speaker 1: in the show about what's happening with activists, Investor Trey
Speaker 1: and Nelson Pelts. Does Pelts have a point? That is
Speaker 1: the question? I think the short answer is absolutely. You know,
Speaker 1: let's let's let's look at a couple of facts. One
Speaker 1: is I think it starts. I think the issues with
Speaker 1: Disney start at the top. And I don't mean Bob
Speaker 1: I your I mean the board. I think the board
Speaker 1: has The board has sat around and watched this company
Speaker 1: since two thousand sixteen underperformed the S and P five
Speaker 1: hundred by almost sixty and but for one director, they've
Speaker 1: all sat through all of that. Uh. They also sat
Speaker 1: through trying to figure out how to find a successor
Speaker 1: for Eiger year after year. I mean he I think
Speaker 1: it was four different contracts, the extensions that he had
Speaker 1: before before he ended up vanded up picking shapec um.
Speaker 1: But he does. He does have a point. And I
Speaker 1: think that in many respects Bob Iger. There's a halo
Speaker 1: around Bob Iger. And people say, well, you know, but
Speaker 1: it's Disney. Well, it is Disney, but but the performance
Speaker 1: of Disney has been miserable. Uh. And and you know,
Speaker 1: I think that Nelson Pell's I'm not a big fan
Speaker 1: of activists in general, but but I think that he
Speaker 1: can bring a discipline too. He may be able to
Speaker 1: bring a discipline to Disney that it's been lacking. Uh,
Speaker 1: you know, with whether it's on expenses, whether it's on
Speaker 1: where M and a um, there are a lot of
Speaker 1: things that did it has done wrong. But again everybody,
Speaker 1: everybody has this soft spot in their heart for Disney
Speaker 1: and and soft spot in their heart form for Bob Iger.
Speaker 1: But at the end of the day, it's for us.
Speaker 1: It's an investment, and that investment has not been very good.
Speaker 1: So you're having one of twelve seats be Nelson Pell's
Speaker 1: when he's come and been very honest about I'm not
Speaker 1: looking to replace Iger. I'm just you know, I think
Speaker 1: we could use some strategy help. I think that the
Speaker 1: Pells might be able to help them. Mark Sto call
Speaker 1: very matter of facts with the investors perspective, No magic
Speaker 1: with Disney, Senior portfolio manager in CEO Adams found Mark
Speaker 1: so call, We're great, what to have you on? But
Speaker 1: today's going viral. We had to do the story coming
Speaker 1: out of Twitter in Asia because did you hear Singapore
Speaker 1: office of Twitter it's Asia headquarters. No less, Eddie. We're
Speaker 1: told to empty out their desks and vacate the premises
Speaker 1: by the end of the day. This is all according
Speaker 1: to people familiar with the situation, and we kind of
Speaker 1: know why in a musk continuing to lower expenses around
Speaker 1: the globe, but you know more than anyone in or
Speaker 1: was he even paying his rent? So there's so many
Speaker 1: threads to this. The first is that that office was
Speaker 1: gutted unfortunately. You know, there was a big victim of
Speaker 1: the layoffs. But it's completely in congress with the policy
Speaker 1: at San Francisco office. Because remember in San Francisco, according
Speaker 1: to sources, and you've seen the photos, they put beds
Speaker 1: into the office so that employees could sleep there overnight,
Speaker 1: which of course upset the city efficient sinks he took beds.
Speaker 1: So am I right? He's not paying the landlords in
Speaker 1: San Francisco, but everyone's still made to work there, whereas
Speaker 1: perhaps he's not. Maybe that's the argument here, perhaps paying
Speaker 1: over in Singapore, and that's why they they kicked out.
Speaker 1: Didn't the landlords say that there's still a current tenant.
Speaker 1: He's just not paying the rent. You imagine, just stop
Speaker 1: paying your rent. Well, that's what's happening here. Don't go
Speaker 1: doing that meanwhile, that does it. From this edition of
Speaker 1: Bloom Technology Friday, were pleased to say we're having a
Speaker 1: music conversation Luminate CEO Rob Jonas, who is in charge
Speaker 1: of the world's largest music data company, and speaking of
Speaker 1: audio don't forget to check out the podcast I Heart Radio, Apple, Spotify,
Speaker 1: wherever you get your podcast. There's a lot to review
Speaker 1: this week. This is Bloomberg