Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
Speaker 1: my co host Matt Miller. Every business day we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. Of course, here in
Speaker 1: the US, we have the SMP year to date off
Speaker 1: more than and asked that close to thirty percent. When
Speaker 1: you go over to the UK, it's not nearly as bad.
Speaker 1: The foot seat down around nine percent from it's high
Speaker 1: of the year. Uh so just some you know, a
Speaker 1: little bit better performance. But it's been a crazy, i
Speaker 1: don't know week or ten days or over the UK.
Speaker 1: Let's get the latest what's going on in the UK
Speaker 1: and new euro markets. We do that with Tim Craighead.
Speaker 1: He's a director of Research and senior European strategist for
Speaker 1: Bloomberg Intelligence. He's based in London. Tim, crazy time for
Speaker 1: the UK market and just the I'm talking to stock market,
Speaker 1: the currency market, the bond market in the last ten day.
Speaker 1: Because you're only down from a pounds but at the
Speaker 1: beginning of your a pound was a dollar thirty five,
Speaker 1: right now it's a dollar twelve. The currency issue is
Speaker 1: always an interesting when year to date, I'll make it
Speaker 1: even sound better, year to date that puts he's down
Speaker 1: about five and a half percent, but again in local currency.
Speaker 1: Um so, look, it has been crazy. Actually used that
Speaker 1: word earlier this morning and something I was writing, and um,
Speaker 1: you know, part of this is what's going on with politics,
Speaker 1: with a new Prime minister putting forward some policies that
Speaker 1: clearly have calls disturb Part of this is um folding
Speaker 1: through into the bond markets, where we've had a Catharsis
Speaker 1: of sorts because of some you know, I won't go
Speaker 1: into the detail, but this thing called liability driven investments,
Speaker 1: which is how pension plans across the UK have been
Speaker 1: trying to deal with the low interest rate environment, has
Speaker 1: caused sort of havoc um at all sorts of issues,
Speaker 1: like even the Bank of England, while it wants to
Speaker 1: tighten policy, it's had to be buying bonds to make
Speaker 1: sure that the market was functioning appropriately. All sorts of
Speaker 1: craziness and in the end, um, you know, we end
Speaker 1: up with the UK trading at about the foot see
Speaker 1: trading at about eight point seven times forward earnings, which
Speaker 1: is pretty freaking nice from the standpoint evaluation. The question
Speaker 1: is where do we go from here? And we're looking
Speaker 1: right in the teeth of of the third quarter earnings,
Speaker 1: and I think that's the that's the key for the
Speaker 1: overall European market right now. We haven't seen negative revisions.
Speaker 1: We think their heads are still spinning from what's happened
Speaker 1: over the past couple of weeks, right, but um, well,
Speaker 1: you know the thing, Matt, I think this is like
Speaker 1: super interesting. You know, there's always a question of consensus
Speaker 1: numbers and you know, are they Is that really what
Speaker 1: investors are thinking? The third quarter maybe the period where
Speaker 1: we see negative revisions, but stocks bounced because the market
Speaker 1: is already there. Um and if that's the case, along
Speaker 1: with some technical indicators that show a washout, maybe that's
Speaker 1: in a good indication. But I think you gotta watch
Speaker 1: how stocks trade on bad news. Shell today was off
Speaker 1: on bad news. That's not a good indication. So in
Speaker 1: the UK and across Europe, I mean, is the expectation
Speaker 1: that a recession is going to be longer, deeper, perhaps
Speaker 1: than maybe the market's discounting or what's the market discounting?
Speaker 1: Do you think? Yeah, so, our our work is suggesting
Speaker 1: that the market right now is discounting a low single
Speaker 1: digit decline in earnings for two thousand twenty three. If
Speaker 1: we end up having excuse me, plus cut in two
Speaker 1: thousand twenty three earnings and broadly across Europe at least
Speaker 1: to have some downside, you know. And it's one of
Speaker 1: those things where um did everybody's talking recession um, but
Speaker 1: there's still hope that we sort of skirt through UM.
Speaker 1: And frankly, part of this weather exactly part of this
Speaker 1: is going to be the weather. You know, how cold
Speaker 1: is it and how much energy do we have to
Speaker 1: curtail from a business perspective to keep people warm? You know, Man,
Speaker 1: I thought I just pictured Tim Hard at work at
Speaker 1: his desk in Queen Victoria Street. Not the case, niece, France.
Speaker 1: Explain yourself, Tim, what are you doing in these France?
Speaker 1: Am I am at? I am at a conference where
Speaker 1: tomorrow I will be presenting on some of the longer
Speaker 1: term structural issues that are causing higher for longer inflation
Speaker 1: and what does it mean? So all right, let's front runner.
Speaker 1: Let's front run your talk, what are some of the
Speaker 1: structure reasons. So so our basic premise, and I'm I'll
Speaker 1: give full credit to Gina Martin Adams because a lot
Speaker 1: of this is based off some of the good work
Speaker 1: that she's been doing. But you think about demographics that
Speaker 1: are reducing labor supply all else being equal, You think
Speaker 1: about deglobalization, which is reducing are accelerating the trend of
Speaker 1: the cheap import to be in a source of disinflation.
Speaker 1: You know, that's that's yesterday's news. Anything about decarbonization, which
Speaker 1: is not only driving investments that are sucking up basic commodities,
Speaker 1: but it's also reducing investment in things like hydrocarbon fuels,
Speaker 1: all of which keep energy prices and probably even underlying
Speaker 1: metals higher for longer. You take those three and you
Speaker 1: end up with inflation that yes, it may come off
Speaker 1: the boil, but we're not going back to pre pandemic levels.
Speaker 1: And if inflation is that way, then bond rates, you know,
Speaker 1: interest rates are going to stay somewhat elevated, and that
Speaker 1: all helps drive increased politility in markets. So it's it's
Speaker 1: you know, it's one of those things where then it
Speaker 1: depends there's still opportunities because you know, markets do price
Speaker 1: some of this stuff in. But clearly, UM, we've been
Speaker 1: through a rough patch and there's still some slopping just
Speaker 1: to come. All I know is that when I'm asked
Speaker 1: to speak at the conference, it's usually in Cleveland in January,
Speaker 1: you know, not Nice France. I seem to think, Paul,
Speaker 1: you you've made the trip from New York to con
Speaker 1: be course, I think I might have done. That might
Speaker 1: be right, he might be right there calling me out.
Speaker 1: Tim Craig, head Director Research, Senior European strategist for Bloomberg Intelligence,
Speaker 1: reporting live from Nice. I guess okay. Plus, I just
Speaker 1: finished up their first in person get together since March
Speaker 1: of That was in Vienna. That closed up yesterday. A
Speaker 1: lot going on in the global space, so we need
Speaker 1: to check in with Amina Baker, chief OPEC correspondent and
Speaker 1: Dubai Deputy Bureau Chief for Energy Intelligence. I mean, and
Speaker 1: I know you're back in London after spending time in Vienna.
Speaker 1: I'd love to start with just this crazy stories about
Speaker 1: the UM the North Stream leaks caused by detonations, uh
Speaker 1: and maybe a sign of of of sabotage. What's the
Speaker 1: latest that you know. Um. Yeah, the latest is that
Speaker 1: there is the Swedish investigation into the pipeline leaks and
Speaker 1: their suspicion is of sabotage. Um. And uh yeah, they
Speaker 1: basically said that they there might have been an incident.
Speaker 1: They're still investigating. We understand that Russia isn't part of
Speaker 1: the team that it's investigating what happened. But um, they
Speaker 1: said that there was also extensive damage calls to these pipelines,
Speaker 1: and there's no clear timeline or budget on how these
Speaker 1: pipelines are going to be repaired, so a lot of
Speaker 1: uncertainty there. So I mean, obviously they're not coordinating with Russia,
Speaker 1: nobody is in the West. But OPEC seems to be right. Um.
Speaker 1: The I just think astounding the cut. Even if they
Speaker 1: don't really cut two million barrels and we're hearing that, um,
Speaker 1: the reality could be could be less than a million. Um,
Speaker 1: it still sends a message to the West. OPEC is
Speaker 1: firmly on the side of China and Russia in this
Speaker 1: sort of new paradigm, this new world order. Could it
Speaker 1: be any clearer? Or am I just seeing this too cynically? Uh,
Speaker 1: it's you're stating the obvious, and you're stating something that
Speaker 1: I think the general public would like to buy into.
Speaker 1: And more and more, I think this war has really
Speaker 1: polarized the East and the West, and taking a neutral
Speaker 1: stance against this war is no longer acceptable. I find that,
Speaker 1: you know, countries are being forced to to take sides,
Speaker 1: and if they don't take sides, UH, their actions are
Speaker 1: are immediately and indicative of which side they're on. And
Speaker 1: that's the case with OPEC plus. I think. I mean
Speaker 1: at the UN General Council, you saw many of the
Speaker 1: Gulf States, actually all of the Gulf States voted UH
Speaker 1: against the war. Everybody wants to see an end to
Speaker 1: this humanitarian crisis. It's it's not fair to to let
Speaker 1: it to go on. UM. With OPEC plus, yes, the
Speaker 1: headline figure is two million bears garls a day cut.
Speaker 1: We're probably going to see a cut of a million
Speaker 1: barrels a day a little bit under UH. We'll see
Speaker 1: how that goes. It depends on the countries. UM. It
Speaker 1: does send a bad signal to many of the consumer states.
Speaker 1: You saw the reaction from the US, from the Biden administration,
Speaker 1: especially UH saying that it's it's the wrong move. UH.
Speaker 1: And on. The move was criticized. Um, but oil prices
Speaker 1: didn't move that much. They're at dollars. I mean that
Speaker 1: was like a two percent jump, so um. Because there
Speaker 1: is so much uncertainty in the market. I mean, the
Speaker 1: reason they took this step is one, there's an unprecedented
Speaker 1: uncertainty on both the demand and the supply side. We've
Speaker 1: never seen this level of uncertainty before in the past
Speaker 1: three decades or so, so they needed to prepare themselves.
Speaker 1: They needed to free up more spare capacity city in
Speaker 1: anticipation that when the EU sanctions and when the price
Speaker 1: caps come into effect, we are going to see a
Speaker 1: disruption and oil supply from Russia. At Energy Intelligence we
Speaker 1: estimate UM oil supply from Russia to be reduced by
Speaker 1: a million point to UH one point two sorry million
Speaker 1: barrels a day. Uh And somebody needs to make up
Speaker 1: for that supply. So if they don't cut now and
Speaker 1: free up more spare capacity, they won't be able to
Speaker 1: supply the market again. UM. So I would just wait
Speaker 1: and see how open plus reacts when we get a disruption.
Speaker 1: I'm sure some of that supply is going to come back.
Speaker 1: I mean just about thirty seconds how bad is it
Speaker 1: going to be from an energy consumption and availability this
Speaker 1: winter in Europe? Well, Uh, it is. I mean, we
Speaker 1: we've heard that a lot of European countries have have
Speaker 1: stalked up. They seem to be better place and UH
Speaker 1: compared to UH in previous months. They're prepared. But the
Speaker 1: problem is not just this winter, how about the coming
Speaker 1: one UM. Energy crisis is going to continue with us
Speaker 1: for a while. So yeah, alright, good stuff. Amina Baker,
Speaker 1: Baker chief OPEC corresponded and to buy Deputy Bureau Chief
Speaker 1: for Energy Intelligence, giving us kind of the latest coming
Speaker 1: out of the European energy UH situation very difficult with
Speaker 1: the war obviously UH in Ukraine and the supply that
Speaker 1: was critical for much of Europe from Russia now dramatically curtailed.
Speaker 1: We had the OPEC plus meeting in Vienna the past
Speaker 1: couple of days, and again the headline coming out of
Speaker 1: there is OPEC plus agreeing to cut production by two
Speaker 1: million barrels per day UM and we'll have to see
Speaker 1: what that means for this market going forward. We want
Speaker 1: to continue our energy discussion. We started off this half
Speaker 1: hour kind of getting from the European perspective coming out
Speaker 1: of Vienna. On the global stage, Let's take a look
Speaker 1: at the U S energy space. We do that with
Speaker 1: Scott Levine, senior energy and industry analysts for Bloomberg Intelligence.
Speaker 1: And Scott we've had a little bit of a stabilization
Speaker 1: here in oil prices. Talked to us about the oil stocks.
Speaker 1: You know, I think about some of the oil services
Speaker 1: names that you follow, like how Haliburton and Schlumbers A
Speaker 1: those stocks have done great. Is the energy play done
Speaker 1: for investors or is you still more room to go?
Speaker 1: I think there is more room to go, Paul Um.
Speaker 1: The reality here is that while these stocks have had
Speaker 1: a great year, as you mentioned, they've had a lousy
Speaker 1: run for the preceding five years, decade longer than that, right,
Speaker 1: like so uh, so, you know, the backdrop here is
Speaker 1: that the industry had been obsessed with growth and UH
Speaker 1: had ignored returns and as result of that had lost
Speaker 1: the confidence of the investment community, and so uh in
Speaker 1: order to get that back, they really need to demonstrate
Speaker 1: UH discipline. And so in a year where you've seen
Speaker 1: oil push a hundred and twenty dollars in the in
Speaker 1: March after the invasion of of Ukraine, Uh. Even before that,
Speaker 1: we saw oil prices rise, and investors really wanted to
Speaker 1: make sure that the industry was going to be measured
Speaker 1: in terms of uh, capitalizing that and growing in a
Speaker 1: discipline manner. And so we've seen that and uh, and
Speaker 1: I think the companies continue to demonstrate confidence that they
Speaker 1: will be restrained and and grow within a certain level
Speaker 1: of of of rational behavior. And is there any way
Speaker 1: to talk them out of that? I mean, is there
Speaker 1: any way to get them to pull all the oil
Speaker 1: out of the ground here, because otherwise we have to
Speaker 1: send our president over to Saudi Arabia having him court
Speaker 1: Mohammed bin Salmon or um, you know, change the rules
Speaker 1: so that we can remove sanctions from countries like Venezuela
Speaker 1: and tap their oil, Like why don't we just get
Speaker 1: our own? The industry can't grow like that, you know,
Speaker 1: even though you can add a little bit more rigs
Speaker 1: here on the margin here and there, etcetera. To ramp
Speaker 1: up production and ramp down production is a much more
Speaker 1: gradual process. So even in an environment like this, you
Speaker 1: see a spike and oil of ten fifteen dollars in
Speaker 1: a given week, and we've seen it up eight dollars
Speaker 1: or close to that. This week. You're not gonna see
Speaker 1: rig count on Friday jump by fifteen or twenty or
Speaker 1: anything like that, will be up by one or two. See,
Speaker 1: I think I'm just gonna go down to Texas myself
Speaker 1: and put a hole in the ground and get some
Speaker 1: re equipment. What's come back? Is it just that discipline?
Speaker 1: Do they not trust the government um or do they
Speaker 1: not really have that much spare capacity to tap? Yeah?
Speaker 1: Now there is this capacity. I think the it's a
Speaker 1: combination of the way the business works and the fact
Speaker 1: that gramping production is a gradual process, and also the
Speaker 1: past five years. And then they're committed to winning investors
Speaker 1: back to this sector after a lengthy all in turn,
Speaker 1: and and and they're committed to grow in a rational manner.
Speaker 1: That's really the key answer that. All right, anytime we
Speaker 1: talk energy, we need to get the political angle because
Speaker 1: it is a political football. And to do that, we
Speaker 1: welcome Joe Matthew Bloomberg News down and watching need CEC.
Speaker 1: We got Mint Bloomberg Interactive Brooker Studio in New York.
Speaker 1: Sound on from here today right from this spot. Yes,
Speaker 1: oh nice, alright, Joe. So this administration it's not well
Speaker 1: loved by our good friends down in Texas and Oklahoma.
Speaker 1: How do you think the administration or the just the
Speaker 1: political wins in d C are about our energy policy? Well,
Speaker 1: it's just it really has become a game of trust here, right.
Speaker 1: I had a former energy official from the Trump administration
Speaker 1: on the program last night and he says, hey, we
Speaker 1: got the band rolling here within a year. That that
Speaker 1: the Biden administration, if there were guarantees that came with
Speaker 1: the pleas for more production, could in fact start to
Speaker 1: see a meaningful increase within a year or so. I
Speaker 1: don't know if that's even realistic, but the Biden administration says, no,
Speaker 1: they're sitting on nine thousand, you know, Lisa's right. Still,
Speaker 1: absolutely they are. And of course the truth is probably
Speaker 1: somewhere in between because a lot of these companies haven't
Speaker 1: been approved to do some of the stuff they want.
Speaker 1: The political capital that was spent though on that fist
Speaker 1: bump is pretty remarkable here, and even Democrats are really
Speaker 1: angry about this. I don't know if you saw this
Speaker 1: tweet from Chris Murphy and Connecticut the Senator, I thought
Speaker 1: the whole point of selling arms to the Gulf States
Speaker 1: despite their human rights abuses, nonsensical Yemen war, working against
Speaker 1: US interests in Oblibias, Dan, etcetera. Was when an actual
Speaker 1: crisis came, the Gulf could choose America over Russia and China.
Speaker 1: And that's kind of what we're talking about here in
Speaker 1: the tweets from a Democrat from Connecticut. That is painful. Um,
Speaker 1: And yet we do sell them a ton of very
Speaker 1: serious weapons with which they kill a lot of people,
Speaker 1: you know, And I think it's difficult to stomach, especially
Speaker 1: if they're gonna side with Russia and China at a
Speaker 1: time like this. What about releasing the SPR. I mean,
Speaker 1: I thought back in the day that was for emergency purposes,
Speaker 1: but it seems like now it's for They goes on
Speaker 1: for a pretty long time here. It's kind of amazing
Speaker 1: that the conversation now though, is really about refilling it
Speaker 1: and whether the United States will go by Middle East
Speaker 1: oil at a premium to refill the SPR. That's gonna
Speaker 1: be a whole fun conversation after the holl of these two.
Speaker 1: All right, So we just want to get a sense here, Scott,
Speaker 1: of of the the big oil companies that you cover
Speaker 1: here in the US, are they bullish about oil longer
Speaker 1: term is the peak oil discussion thing in the past.
Speaker 1: But you're you're bullish on these companies, right, I am
Speaker 1: and UH. I think that the the biggest issue the
Speaker 1: companies really have had UH with the Biden administration is
Speaker 1: really the fact that they've been demonized with regard to UH,
Speaker 1: the whole energy transition. They're being made to be the
Speaker 1: black hat essentially, right. I think all the major oil
Speaker 1: field companies have renewable energy businesses, they're all involved in
Speaker 1: these types of things, but they feel like they've just
Speaker 1: been the whipping boy for so long, and the reality
Speaker 1: is the heart of their business. If you're Haliburton, if
Speaker 1: your slumberj is oil and gas production, okay, and it
Speaker 1: will be ten years from now, and it will be
Speaker 1: twenty years from now. Despite the fact that they're harvesting
Speaker 1: and growing all of these energy transition businesses to support
Speaker 1: hydrogen battery storage, slumberside and announcement theory yesterday that they're
Speaker 1: supporting lithium mining. They're involved in all those businesses, but
Speaker 1: they have feel like the government hasn't been forthright about
Speaker 1: the reality of the energy transition, how long it will take,
Speaker 1: and they feel like the demonization of carbon has has
Speaker 1: gone way too far. Look as the as the Saudi is,
Speaker 1: how they feel about Europeans burning trash to stay warm
Speaker 1: this winter. There's such a political side of this, and
Speaker 1: and it's such a global situation now that the United
Speaker 1: States may really find itself having to lean into this.
Speaker 1: The Biden administration wants to forward this transition. But as
Speaker 1: even Elon Musk, the king of the electric car, will
Speaker 1: tell you, we need more oil now to make that happen. So,
Speaker 1: I mean his administration are they sensitive to that, because
Speaker 1: I don't see it. I mean the kind of the
Speaker 1: comments that Scott sees from his companies. Just President Biden,
Speaker 1: what was he getting off a helicopter or something on
Speaker 1: the lawn at the White House saying the Middle Eastern
Speaker 1: trip to Saudi or aven trip wasn't about all. Didn't
Speaker 1: regret it, of course, but he said that before they
Speaker 1: went to so we wouldn't have this segment right now.
Speaker 1: But of course it was about oil largely, and it
Speaker 1: was about security. But you can't have security without oil
Speaker 1: and vice versa. Yes, Look, this is uh, this is
Speaker 1: an issue when you also hear reports now on the
Speaker 1: terminal about loosening sanctions against Venezuela. So you know which
Speaker 1: bad guy do you want to buy for room? All right,
Speaker 1: Joe Matthew, thanks so much for joining us on short notice.
Speaker 1: Joe Matthew Uh covering off Things, Washington, d C. For
Speaker 1: Bloomberg newsm Sound absolutely good stuff. Scott Levin, he covers
Speaker 1: the energy uh space Industrial space for Bloomberg Intelligence. Thanks
Speaker 1: those guys for joining us here in our Bloomberg Interactive
Speaker 1: Brokers studio. Looking at Wacoud oil, it's up seventy one
Speaker 1: eighty eight dollars forty five cents of barrel for w
Speaker 1: t I Crude. Well, this Elon Musk Twitter story is
Speaker 1: kind of like, you know, an accident you pass on
Speaker 1: the road. You can't you can't, you know, you can't
Speaker 1: help yourself at slowing down and take a look. And
Speaker 1: this has just been just an amazing saga here. So
Speaker 1: we want to break it down in some detail. We're
Speaker 1: gonna do that with Dan Ives, Managing Director and senior
Speaker 1: Equity analyst for web Bush Securities, also joining us here
Speaker 1: in our Bloomberg Interactive Broker Studios Men Deep Seeing. He's
Speaker 1: our senior technology analyst Bloomberg Intelligence. Dan, let's start with you,
Speaker 1: is Elon Musk gonna get this company? And if so,
Speaker 1: what's he gonna do with it? An easy part for
Speaker 1: Musk is actually buying It's a hard part. It's gonna
Speaker 1: be fixing it. I mean, Twitter has really been a
Speaker 1: disaster for the last four or five years, and from
Speaker 1: a growth perspective. But I think now there's still some
Speaker 1: high steaks poker going on between Musk and the Twitter
Speaker 1: board lawsuit. You're going to Delaware's the web and das
Speaker 1: away and I think to find nthing continues to be
Speaker 1: front and center, especially the debt financing, and I think
Speaker 1: that's caused some nervousness at Lease on the stock. Um
Speaker 1: is he going to be able to buy it? What's
Speaker 1: your what's your thoughts on whether or not he actually
Speaker 1: gets this deal done? Yeah? I believe now, especially the
Speaker 1: writing on the wall going into Delaware, I believe as
Speaker 1: early as next week he will own Twitter. You know,
Speaker 1: in terms of where this ultimately ends up the board,
Speaker 1: I think we'll agree to this, but you know, obviously
Speaker 1: what does that mean, Dan? I mean, if he's gonna
Speaker 1: own Twitter, he has to raise billions and billions of dollars.
Speaker 1: People are starting to back out. Now, surely the banks,
Speaker 1: well maybe the banks will try as well in terms
Speaker 1: of debt financing. So how does he does he have
Speaker 1: to sell Tesla shares? Yeah, so he So it's a
Speaker 1: great question because obviously it's weight on Tesla. He's sold
Speaker 1: already a significant trying about fifties billion in terms of
Speaker 1: tests of stock. You know, we've estimate he could sell
Speaker 1: upwards of another three big allion, but I think that's
Speaker 1: sort of a contained amount. Now when you talk about
Speaker 1: partners or other sort of banling, that obviously would add
Speaker 1: to some of the financing stress. But and it continues
Speaker 1: to be arguing. And know we've talked about four is
Speaker 1: that this was a nightmare deal from us and now
Speaker 1: ultimately he's basically trading in Calvia are testa stock for
Speaker 1: a two dollars slice of pizza and Twitter. That's I
Speaker 1: fully agree with that, But this is of his own making.
Speaker 1: Mendip Singh here, I want to bring you in. Let's
Speaker 1: assume Elon must buys Twitter. Realistically, you've known this company
Speaker 1: for a long time. Realistically, what can he do to
Speaker 1: improve the fortunes of Twitter? Well, so think of any
Speaker 1: social media company, right, it's all about the network and
Speaker 1: you know the daily active users and how they engage,
Speaker 1: and ultimately you can monetize the eyeballs. Granted, Twitter hasn't
Speaker 1: done a great job, but that's where I think it's fixable.
Speaker 1: It's not something that you know, nobody can fix. It's tough,
Speaker 1: but I think Twitter is a unique asset simply because
Speaker 1: of you know, the engagement and the community aspect they have,
Speaker 1: and he has talked about, you know, it should have
Speaker 1: a better constructure. Right now, Twittor has the most bloated
Speaker 1: constructure among all the social media names. So I think
Speaker 1: the first thing is to clean up the constructure, but
Speaker 1: also figure out a way to monetize the engagement better
Speaker 1: and I'll be a combination of both ads and subscriptions.
Speaker 1: And then deep, I mean the balance sheet. Assuming he
Speaker 1: does raises twelve and a half billion dollars of debt,
Speaker 1: this seems gonna be leveraged. Just by my super back
Speaker 1: at the envelope, you know, ten times or something ebitda,
Speaker 1: I mean I need to seem to be two to
Speaker 1: three or four times ebitda. Well, so that's where he
Speaker 1: can raise the ibada and and that's what I mean,
Speaker 1: like if once you clean up the constructure, you introduce subscriptions,
Speaker 1: and look, it's not that easy. I mean, we can
Speaker 1: talk about a plan, but there is no kind of
Speaker 1: playbook here. He's gonna try things out and he has
Speaker 1: to find someone to run the company first. He's not
Speaker 1: going to do it himself. So clearly a lot of unknowns.
Speaker 1: But we know Twitter was the most inefficient when it
Speaker 1: comes to the social media platforms, and I think there
Speaker 1: is a clean out that can be done over there.
Speaker 1: Dan does, does this sour? What has been your very
Speaker 1: bullish call on Tesla in a sense that perhaps Elon
Speaker 1: Musk is losing focus? Is that factor into your analysis? Well,
Speaker 1: I think that's been some of the worry here is
Speaker 1: that he's going to juggle a lot of balls. This
Speaker 1: stay sacks as well as Twitter as Mandy. I do
Speaker 1: believe he farms out the management of it in terms
Speaker 1: of Twitter, but there's nowhere. This is just a disaster
Speaker 1: deal from Musk, and it's weighed on Tesso Stock and
Speaker 1: then and now I think it's been put a little
Speaker 1: in the penalty box until this soap opera cleared. His
Speaker 1: text messages that were released as a result of court
Speaker 1: case included one um between Elon Musk and someone called
Speaker 1: t J. That's why the speculated that that's his ex
Speaker 1: wife to Lula Riley starts out with a tweet from her.
Speaker 1: She says, quote, can you buy Twitter and then delete it? Please?
Speaker 1: X X? This is gonna Is it? Just too optimistic
Speaker 1: and hopeful Dan that there's any chance he does that. Look,
Speaker 1: I think the bigger issue for Musk is that once
Speaker 1: he signed those documents, he crossed the invisible gray line
Speaker 1: and now he's going to ultimately on Twitter, and he
Speaker 1: got cold feet. He tried to escape through it in
Speaker 1: terms of the Bob issue, which is a big issue,
Speaker 1: and now he essentially's going to own a house that
Speaker 1: he doesn't want to live him. Alright, guys, this is
Speaker 1: just amazing and and man, deeper stuff to finish up here. Um,
Speaker 1: you know, I guess the question is what advertisers do?
Speaker 1: Do you think? Are you hearing anything from the avertizing
Speaker 1: community in terms of this changing ownership? Not truly. I
Speaker 1: think Twitter is more brand focused, so nothing changes. They
Speaker 1: were never big in direct response ads, so it's not
Speaker 1: as if you know they have stopped innovating. Twtor was
Speaker 1: all about, okay, showing a display at every four or five. Uh,
Speaker 1: you know, feed and look, I think I mean to
Speaker 1: give Ellen credit. You have to look at what he
Speaker 1: has accomplished, you know, when it comes to building a
Speaker 1: supercomputer and robots, so nothing is impossible. That one really
Speaker 1: is man saying Bloomberg Intelligence. We appreciate you hearing it
Speaker 1: being alive in Bloomberg inter Active Broker Studio and Dan
Speaker 1: Ives managing Director and senior equity analysts on wed Bush
Speaker 1: Securities with some unvarnished take on Elon Musk and his
Speaker 1: move to acquire Twitter. That's sixty forty portfolio thing that
Speaker 1: we kind of grew up with that didn't work out
Speaker 1: so well this year. We've got stocks off anywhere from
Speaker 1: twenty to thirty percent this year, and we should have
Speaker 1: been shorting rates. We should have been shorting rates and
Speaker 1: get made a tuner in seventy four percent gain this year,
Speaker 1: and that's what we should have been doing. Whiter sid Yeah,
Speaker 1: that's a nice Sorry sied Hyder is the name of
Speaker 1: the hedge fund fund. He did that, But a ton
Speaker 1: of hedge fund managers have made a killing this year. Yeah, yep,
Speaker 1: if you can be nimble on those rates, Joe Meyer,
Speaker 1: CEO and founder of Meyer Capital Joints is here, Joe.
Speaker 1: I'd love to get your perspective on kind of what
Speaker 1: we've all experienced year to date, for kind of how
Speaker 1: did you guys navigate through it and what's your outlook. Hey,
Speaker 1: Matt and Paul, thanks so much for having me on
Speaker 1: to get today. Um, you know, obviously been an interesting year.
Speaker 1: Crypto got hammered from the get go and the technology
Speaker 1: has gotten beat up. We we started really starting to
Speaker 1: go back into technology in the middle of June, June
Speaker 1: seventeen to be exact. Uh, we just felt that it
Speaker 1: had hit the bottom and it basically has come back
Speaker 1: down and almost tested that low and so you know,
Speaker 1: we're we're excited about it. I mean, look, it's been
Speaker 1: a difficult year. You know, if you take a look
Speaker 1: at rates. Tom Bark in the Philly Fed really signaled
Speaker 1: what the Fed was gonna do about four or five
Speaker 1: months ago when he came out very very hockeyish and
Speaker 1: and they've been following through on that. So I think
Speaker 1: you know, to your point six isn't working right now.
Speaker 1: But you can't look at the world through one one lens.
Speaker 1: I mean you have to look at it overall. Obviously
Speaker 1: that the works for some but not all. If younger
Speaker 1: should be I guess you want to buy low anyway, Um,
Speaker 1: and if we're not at the bottoms um, we're pretty
Speaker 1: low right now. So what do you like? What? What stocks?
Speaker 1: Um are you a fan of right now? Yeah? So
Speaker 1: we were big into workforce automation. So anything that can
Speaker 1: be done finding the right technology people or the right
Speaker 1: worker skills is very very difficult and there's a lot
Speaker 1: of repetitive tasks that can be done, uh with with technology.
Speaker 1: So we're not only buying public companies, were also acquiring
Speaker 1: some private companies in that space. And you kind of
Speaker 1: made your fortune in that area back in the day.
Speaker 1: We've we've been an entrepreneur and four of our three
Speaker 1: companies are currently owned by public companies. So, uh, those
Speaker 1: are all companies I found it and so it's it's
Speaker 1: been fun. That's all been fin tech and technology and
Speaker 1: I and so I have a strong bias for Obviously
Speaker 1: I like UI Path. I think they're doing some very
Speaker 1: interesting things with workforce automation. And if you take a
Speaker 1: look at some of the security needs that are out there,
Speaker 1: you've got z scale er. Uh, you know, that Z scale.
Speaker 1: I thinks at one three that's basically a discount from
Speaker 1: where it was well lots ago. M Ui Path is
Speaker 1: significantly beat up, but you know it's a mirror company's
Speaker 1: I think right now it's been as high as the
Speaker 1: ninety one company I've been into for a very very
Speaker 1: long time is Zebra. So Zebra is if you see
Speaker 1: all the bar code scanners that's all about the Internet
Speaker 1: of Things and tracking and soil. Those feed into the
Speaker 1: E r P systems and allow people to have a
Speaker 1: digital twin, if you will, meaning what can they see
Speaker 1: in the digital world that it is a physical world,
Speaker 1: and Zebra really drives that. For those of you playing
Speaker 1: along at home, I just want to get the tickers
Speaker 1: out Zebra z z b R A um UI path
Speaker 1: is path p A t H that's a ticker and
Speaker 1: Z scaler as z s you like micro strategy as well.
Speaker 1: Is that a play? So everybody thinks it's a bit
Speaker 1: plain play, and it certainly is, but it's also a
Speaker 1: technology play. But here's here's where they're going. And so
Speaker 1: my son who is is doing some interesting things, you know,
Speaker 1: as we talk about it, and really at a confidence
Speaker 1: about a year ago, called Bankless Permission List, I guess
Speaker 1: is the name of it. But basically what we saw
Speaker 1: there is it's really about web three doto and everybody
Speaker 1: wants to call it the metaverse, whatever you want to
Speaker 1: call it. It's the decentralization of work of stuff, of
Speaker 1: systems of everything, and that's really what what three dotto is,
Speaker 1: and quite frankly, I think that Michael Saylor and his
Speaker 1: team understand that. And I think if you buy micro
Speaker 1: Strategies today, you're getting it for bitcoin, but you're also
Speaker 1: getting their enterprise business for free, and you're getting their
Speaker 1: start up mode um web three datto for free. And
Speaker 1: if you look back on any of these names in
Speaker 1: five years, you're gonna say, I'm glad I was on
Speaker 1: the Man Paul and Joe Joe Joe. Is it true
Speaker 1: that you spend four years of your life inside of
Speaker 1: an army tank? I did spend actually five years active
Speaker 1: duty another eight in the reserves. I was on M
Speaker 1: one and M one A one tanks. And so when
Speaker 1: I see when I see some of the things with
Speaker 1: tanks going on in the Ukraine, I cringe a little bit,
Speaker 1: But I also know that technology is last are where
Speaker 1: are you stay. Where were you stationed. I was in
Speaker 1: Germany and then I was also in the States. Was
Speaker 1: actually in the reserve during the first called for but
Speaker 1: a lot of my friends were overseas. And you know
Speaker 1: what nobody really recognizes. We've got Veterans Day coming up
Speaker 1: here about for SOMETHINGOW days. You know, it's the families
Speaker 1: that really do a lot for our veterans, because if
Speaker 1: the families at home aren't aren't supporting your soldiers and
Speaker 1: their men and women in the field, that it makes
Speaker 1: it difficult. Joe, thanks for your service. We really appreciate it,
Speaker 1: and thanks for coming on today. Joe Meyer, CEO and
Speaker 1: founder of Meyer Capitol. Thanks for listening to the Bloomberg
Speaker 1: Markets podcast. You can subscribe and listen to interviews with
Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller.
Speaker 1: I'm on Twitter at Matt Miller three. Pet On Ball
Speaker 1: Sweeney I'm on Twitter at pt Sweeney. Before the podcast,
Speaker 1: you can always catch us worldwide at Bloomberg Radio.