Speaker 1: From Marhard.
Speaker 2: We're Innovation of Money and Power Collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed loved Love.
Speaker 3: I'm carolinehide A Bloomberg's World Headquarters in New York, and
Speaker 3: I'm Ed Lovelow in San Francisco.
Speaker 4: This is Bloomberg Technology.
Speaker 5: Coming up divest oor ban legislation. It clears the House
Speaker 5: and it heads to the Senate. That's this week.
Speaker 3: Tik Target prepares to take this to the courts and
Speaker 3: exhaust all legal fights.
Speaker 5: Will have full coverage ahead.
Speaker 4: Plus, we take a deep dive into Tesla as chaos
Speaker 4: erupts internally and Elon must shifts the company's focus from
Speaker 4: a cheaper model to the ROBOTAX will bring you the
Speaker 4: findings from our Bloomberg Big.
Speaker 3: Take and salesforce's talks with Informatica. They fizzle as a
Speaker 3: company struggle to agree on terms of a deal, all
Speaker 3: according to Sources'll discuss that and so much more throughout
Speaker 3: this sabb At.
Speaker 4: First, the other big story we're tracking is the passage
Speaker 4: of the ban or divest TikTok bill on the hill.
Speaker 4: We passed the House over the weekend. The expectation is
Speaker 4: it will pass the Senate in the coming days. Bloomberg
Speaker 4: Intelligence and This are in house researchers saying there's a
Speaker 4: ninety percent chance it will go through the Senate and
Speaker 4: be passed into law. These are the publicly traded social
Speaker 4: media names. Some downward pressure on names like Meta and Snap,
Speaker 4: alphabet pair and a Google a little higher. But I'm thinking,
Speaker 4: of course about YouTube. The landscape for social media in
Speaker 4: this country is front and center this week, Caroline.
Speaker 3: And also what's happening abroad, the EU opening a new
Speaker 3: investigation into TikTok as well. We're reporting all of this
Speaker 3: as you just really focus on what's happening in the US.
Speaker 4: Said.
Speaker 3: In the coming days, the Senate expected to vote on
Speaker 3: that legislation requiring TikTok's Chinese parent company, bike Dance to
Speaker 3: divest its ownership stake in the app.
Speaker 5: President Joe Biden has said, look, design that legislation pretty promptly.
Speaker 3: If we gets through for more, let's bring in Bloomberg's
Speaker 3: Alex Barinka.
Speaker 5: It's been a busy.
Speaker 3: Weekend, so this is kind of a Dondale law.
Speaker 4: It does.
Speaker 6: This bill passing seems almost inevitable. The Senate is expected
Speaker 6: to take it up this week. President Joe Biden has
Speaker 6: said he will sign it immediately, and TikTok inside is
Speaker 6: already scrambling over the weekend.
Speaker 5: After the bill passage.
Speaker 6: On Saturday, we broke the news that the General Council
Speaker 6: in the US for TikTok and Byte Dance, Eric Anderson,
Speaker 6: who's been in charge of convincing the National Security Interagency
Speaker 6: Committee that TikTok is doing enough to prevent any user
Speaker 6: data from getting to China, is actually being pushed out
Speaker 6: of his role. So the changes are happening internally. The
Speaker 6: company is also sending memos to its employees promising that
Speaker 6: if this bill passes this week, that will not be
Speaker 6: the end of the story. By Dance and TikTok both
Speaker 6: intend to fight this to every extent of the legal
Speaker 6: battles possible before considering any kind of divestitor or separation
Speaker 6: from TikTok Chinese parent company.
Speaker 1: By Dance, I to Alkeds.
Speaker 4: At the beginning of the show about the BI or
Speaker 4: Bloomberg Intelligence assessed of whether or not this will pass
Speaker 4: through the Senate and be passing to law ninety percent.
Speaker 4: There are other piece of analysis is that if there
Speaker 4: were to be a legal challenge by TikTok and its
Speaker 4: US users, they assign a seventy percent chance that the
Speaker 4: US government would be successful in court. Over the weekend,
Speaker 4: we also had a lot of kind of internal news
Speaker 4: at TikTok. What else have you reported, Alex.
Speaker 6: Well, those pressures on the legal side, you know, it's
Speaker 6: interesting to see those numbers. There are a number of
Speaker 6: kind of legal avenues that TikTok might take. We saw
Speaker 6: them when the state of Montana looked to ban the app.
Speaker 6: Stand behind a number of users who actually sued, there
Speaker 6: might also be folks like small businesses or other organizations
Speaker 6: who feel like they're being harmed. So certainly the pressure
Speaker 6: is on here in the US. And then just this
Speaker 6: morning ed as Caroline mentioned, the European Union opened a
Speaker 6: new probe into whether byte Dance violated the block new
Speaker 6: Content law when it launched an app called TikTok lights
Speaker 6: app in France and Spain without providing a full risk assessment.
Speaker 6: So if you're internal at TikTok right now, you are
Speaker 6: not only dealing with this inevitable passage of the bill
Speaker 6: that bi Bloodberg Intelligence puts at ninety percent passage. You're
Speaker 6: also having to fend off continued pushes for find scrutiny
Speaker 6: over privacy, and again just the intense, unprecedented attention that
Speaker 6: this move by US Congress has made, and perhaps has
Speaker 6: got lawmakers and other geographies thinking, if the US is
Speaker 6: doing something like this, should we be taking a closer look?
Speaker 4: Bloomberg Zalx Brinka literally minute by minute reporting on this.
Speaker 4: It's been a busy weekend, it will be a busy
Speaker 4: week for you. Let's keep a conversation going. Bring in
Speaker 4: Rachel Tippograph, the founder and CEO of mick Mac, an
Speaker 4: e commerce marketing platform for multi channel brands. You understand
Speaker 4: the entire lens here, the user's interest in TikTok, the
Speaker 4: potential of TikTok in this country in the e commerce context,
Speaker 4: and the competition out there. I talked about the chances
Speaker 4: of this bill passing. I believe you see it passing
Speaker 4: as well.
Speaker 7: Absolutely, it'll be the big news headline this week that
Speaker 7: the band will likely happen. But we at Mickmac don't
Speaker 7: believe that this is.
Speaker 5: The end of the story.
Speaker 7: TikTok has become one of the most powerful platforms in
Speaker 7: the world. At mickmac on any given day. We now
Speaker 7: see TikTok as our second most traffic platform, Meta being
Speaker 7: number one, TikTok being number two. We have to remember
Speaker 7: TikTok didn't enter the cultural zeitgeist until twenty nineteen, and
Speaker 7: fast forward today it is leap frogged YouTube, Snap, Pinterest,
Speaker 7: and of course X in terms of brand investment and traffic.
Speaker 7: So we don't believe this will be the end of TikTok.
Speaker 7: TikTok will absolutely fight this the way that they did
Speaker 7: with Trump and twenty twenty and Montana last year. That
Speaker 7: will then create some time for a divestiture to really
Speaker 7: come to life. And why wouldn't Salesforce or Microsoft or
Speaker 7: Adobe or Walmart, Amazon or Meta make a lane and
Speaker 7: grab for.
Speaker 5: This because percent of Americans youth TikTok.
Speaker 3: Well, the reason they might not is because China won't
Speaker 3: let them.
Speaker 5: We've also got a factory. Of course it might not
Speaker 5: sell it, or indeed they wouldn't.
Speaker 3: Let the access to the technology, but let's go with
Speaker 3: the fact that maybe they are able to buy it
Speaker 3: here in the US. I'm just interested amidst this uncertainty
Speaker 3: because they still got a year if this goes past
Speaker 3: the Senate, they then got a year to sell themselves.
Speaker 3: Do any of your twelve hundred brands that use you,
Speaker 3: that come through you start to pull back on their
Speaker 3: investment and tiktoks you think at all?
Speaker 7: You know this has been a part of the dialogue
Speaker 7: for the past year that a ban could happen, and
Speaker 7: for some of the advertisers we've seen a slight pause.
Speaker 7: That being said, TikTok traffic at Mickmac has grown forty
Speaker 7: percent year every year. So by and large, we continue
Speaker 7: to see fortune one thousand brands invest in the platform.
Speaker 7: And not only are they investing it from an advertising standpoint,
Speaker 7: they're starting to invest in it in terms of a
Speaker 7: standalone com channel now with the advent of TikTok shops.
Speaker 7: So we're not seeing brands pull back. But the reality
Speaker 7: is with advertising it's very easy to turn on and off.
Speaker 7: We saw this happen with Meta, with YouTube with x
Speaker 7: and so brands have options. If they choose not to
Speaker 7: invest in TikTok, they're going to reallocate spend to other
Speaker 7: social channels as well as programmatic like the Tride Desk or.
Speaker 1: CTV like Roku.
Speaker 7: So I'm not overly worried in terms of what will
Speaker 7: happen in the advertising landscape. There's plenty of options for
Speaker 7: brands to drive reach, awareness and conversion.
Speaker 4: There's the advertising side of the equation, there's the eyeballs.
Speaker 4: And it was interesting that over the weekend Elon Mosk,
Speaker 4: the CEO of X, the platform formerly known as Twitter,
Speaker 4: gave his opinion that TikTok should not be banned in
Speaker 4: the USA, even though such a band may benefit his
Speaker 4: own platform X therein lies the value of it. You
Speaker 4: talk to the e commerce side, But for me, the
Speaker 4: thing we never talk about that much is fifty percent
Speaker 4: or most of all Americans use TikTok. That is scale
Speaker 4: that many other platforms don't have.
Speaker 5: Absolutely.
Speaker 7: I mean, it's why TikTok is now our second most
Speaker 7: traffic channel at mickback Meta is number one. There's very
Speaker 7: few places for you to reach all US American households,
Speaker 7: and so to reach fifty percent of them with essentially
Speaker 7: one ad by on TikTok is extremely powerful and per Musk,
Speaker 7: I mean, we're talking about setting a precedent that really
Speaker 7: interferes with the First Amendment, which is why at MCMAC
Speaker 7: we believe that if things can play out, a divestiture
Speaker 7: is most likely the best outcome for everyone. Bite Dance
Speaker 7: might not see it that way, but in terms of
Speaker 7: the US government, if I were them.
Speaker 1: I would be pushing for a divestiture.
Speaker 4: I don't think by Dance we would see it that way. No,
Speaker 4: a second, guy, I actually misspoke. I said that Elon
Speaker 4: Musk was the CEO of X. He's not Lindy acarino is.
Speaker 4: But given the last seven days that I've had and
Speaker 4: the number of companies that Elon Musk is CEO of,
Speaker 4: I think the world will forgive me. Rachel tippograph of
Speaker 4: Mick mac Thank you very much for your analysis. Now
Speaker 4: coming up internal chaos at Tesla, where Elon Musk is
Speaker 4: CEO and he's shifting his focus from a cheaper model
Speaker 4: to the ROBOTAXI. We put a really important piece out
Speaker 4: last night in the Bloomberg Big Take, and that's coming
Speaker 4: up next.
Speaker 5: Karen, so well read brilliant reporting.
Speaker 3: Meanwhile, let's just dig into what was also happening on Friday.
Speaker 3: Remember when in Video was down ten percent, it lost
Speaker 3: woman to billion dollars in market capitalization. Today it's up,
Speaker 3: but only one point three percent. We're actually fading some
Speaker 3: of that rally in this big tech in a AI play.
Speaker 8: This is a Bloomberg Technology.
Speaker 4: Bloomberg big take, Tesla consumed by chaos amid CEO Elon
Speaker 4: Musk shift of a focus from new cheaper models to
Speaker 4: clearly a Robotaxi in Caroline. What we tried to do
Speaker 4: is clarify what's going on. And my understanding is this
Speaker 4: is Elon Musk. He's come back in and said, yes,
Speaker 4: Robotaxi is the focus. A cheaper EV is not completely scrapped,
Speaker 4: but it is confusing. You've read the Big Take. I
Speaker 4: don't know. Did we give you some clarity and where
Speaker 4: we stand you?
Speaker 3: Did you really just highlighted how much perhaps we've seen
Speaker 3: a re orientation of Elon Musk back on the Tesla business,
Speaker 3: back in demon mode for all the pros and the
Speaker 3: cons that gives. I mean, in particular, you articulate so
Speaker 3: well some of the negatives that have been felt by people.
Speaker 5: Let go at the company.
Speaker 4: I think one really clear thing is that loads of
Speaker 4: executives at Tesla said Elon, please do the twenty five
Speaker 4: thousand dollars EV do it cheap. Elon said, no, we
Speaker 4: are doing Robotaxi, and there's a difference of philosophy. But
Speaker 4: the cheap part is misunderstood. It's not canceled or scrapped.
Speaker 4: It just looks different to what we thought. So a
Speaker 4: lots to discuss.
Speaker 3: Yeah, the fact that basically it can be wrong. Doubt
Speaker 3: this is a cheaper model for other purposes, a more broadly,
Speaker 3: more wide reaching company that ultimate investors are trying to
Speaker 3: get their hands around, and share prices reflect that. Craig Traudell,
Speaker 3: who has been helping edit this beautiful creation that Ed
Speaker 3: Ludlow and Anna Halla put together.
Speaker 5: Over this weekend.
Speaker 3: Craig, your key takeaway, and I think for many investors
Speaker 3: is right now, what are the priorities?
Speaker 5: And that's it.
Speaker 3: The priority right now is Robotaxi, but for a greater good,
Speaker 3: for a broader, cheaper offering.
Speaker 9: Yeah, you know, I was talking with some of our
Speaker 9: colleagues at bn F and I think, you know the
Speaker 9: idea that maybe what Elon may make the case to
Speaker 9: Wall Street tomorrow is we already have a twenty five
Speaker 9: thousand dollar car. He will be spinning when he says that.
Speaker 9: But when you sort of take into account gas savings
Speaker 9: and tax credits and so on and so forth. You know,
Speaker 9: the Model three, after the price cuts of the last
Speaker 9: year plus, is getting pretty darn close to that and so,
Speaker 9: you know, I think that what we'll see from Tesla
Speaker 9: in the months to come is this attempt to kind of,
Speaker 9: you know, further emphasize the value that they're offering with
Speaker 9: the Model three and the Model Y per Ed's reporting,
Speaker 9: you know, apply some of the work that's going into
Speaker 9: the platform that they want to use to underpin the
Speaker 9: robo taxi to bring the Model three and Model Y
Speaker 9: costs down even further. I think the real question is
Speaker 9: whether or not that's going to cut it for Wall Street,
Speaker 9: because they want to see some new product.
Speaker 4: You know, we tried to give some clarity on that.
Speaker 4: We try to give some clarity on the layoffs. And
Speaker 4: the way that one source put it to me is
Speaker 4: deliveries were down twenty percent sequentially in the first quarter.
Speaker 4: So must turn around to the other bosses and said,
Speaker 4: if deliveries are down twenty percent, let's just cut headcount
Speaker 4: twenty percent. Not for any reason to do with cost
Speaker 4: saving necessarily, but this is like the Elon Musk playbook,
Speaker 4: Craig right, and when you edited the Big take. I
Speaker 4: hope that you got the sense that this is Elon
Speaker 4: Musk pulling the strings on this.
Speaker 9: Yeah, you know, and it takes me back a little
Speaker 9: bit to the Walter Isaacson biography, where you know, I
Speaker 9: feel like the word delete was in that book, you know,
Speaker 9: at least fifty times in terms of you know, whenever
Speaker 9: you know Tesla or SpaceX or these various companies that
Speaker 9: he runs, you know, run into trouble. He just comes
Speaker 9: in and wants to cut everything and get rid of
Speaker 9: everything and question why, you know, companies are doing things,
Speaker 9: building things, Why do we need that part or component
Speaker 9: or why are we doing this process? I think the
Speaker 9: question is, you know, whether he's sort of cut to
Speaker 9: the bone here, and you know, we're even sort of
Speaker 9: seeing some questioning of whether or not he's effectively doing
Speaker 9: that in these price cuts over the weekend, whether there
Speaker 9: are going to be any earnings left in China, you know,
Speaker 9: in terms of how far they've gone with the Model
Speaker 9: three and the Model hy in that market.
Speaker 3: I mean, the key point here, Craig is we all
Speaker 3: think about this bigger picture and then look ahead to
Speaker 3: the micro Let's a little over twenty four hours and
Speaker 3: we get the earnings.
Speaker 4: Yeah, I mean just shout out to Craig and to Donna.
Speaker 4: In twenty four hours we will have earnings FINGO again
Speaker 4: and we'll find out on what I would say is
Speaker 4: probably one of the most important earning statements and calls
Speaker 4: in Tesla's history, because investors just want some clarity on
Speaker 4: what the strategy is. Craig, in one word or one sentence,
Speaker 4: what are you watching for.
Speaker 9: Just as much hype around AI and for self driving
Speaker 9: as we can possibly imagine. I think that's the expectation
Speaker 9: because there aren't many other cards to play.
Speaker 3: Crochedel brilliant editing throughout this weekend on so much important reporting.
Speaker 5: Thank you.
Speaker 3: Let's get into those earnings and more broadly across the
Speaker 3: tech sector.
Speaker 5: Megan Horneman, CIO.
Speaker 3: Verdant's Capital Advisors, I understand Vernin's Capital Advisors does have
Speaker 3: some exposure to Tesla, and more broadly, have you feeling
Speaker 3: have you felt that the market is priced in some
Speaker 3: of the worst here for a business like Tesla, for
Speaker 3: some of the less than magnificent magnificent seven.
Speaker 10: I think, from broadly speaking, I still think there's some downside,
Speaker 10: specifically because these some of these stacks Tesla included have
Speaker 10: been really driven by momentum. It's been a pretty big
Speaker 10: decline that we've seen in Tesla, But the clarity's not there.
Speaker 10: From a broadly speaking from the Magnificent seven this earning season,
Speaker 10: they've got a lot, they have a lot to prove.
Speaker 1: Valuations are very elevated.
Speaker 10: And if we don't see this come through from an
Speaker 10: earnings perspective, I think there's more downside and a little
Speaker 10: bit more of evaluation correction.
Speaker 3: What I love about your notes your analysis, Megan, is
Speaker 3: just how deep you go into sort of ultimately how
Speaker 3: powerful and encompassing those Magnificent seven players have been. I'm
Speaker 3: reading your note that in fact five with the Magnificent
Speaker 3: seven companies, so you're talking in video, Amazon, Meta, Alphabet,
Speaker 3: and Microsoft have expected to be the top five contributors to.
Speaker 5: Urin your earnings growth for the S and P.
Speaker 3: Basically, if they don't give us what we need, earnings
Speaker 3: more broadly going to fall across the rest of the
Speaker 3: S and P.
Speaker 10: They'll definitely be I think a lot weaker than the
Speaker 10: anticipation right now, and the anticipation is only for about
Speaker 10: er point five percent year of ver year earnings growth,
Speaker 10: So there's a lot writing on these Magnificent seven. I
Speaker 10: think that's also why you're seeing the markets. They're kind
Speaker 10: of moving. They're up a little bit today, but moving sideways.
Speaker 10: They're going to wait for They're waiting for earnings. They're
Speaker 10: also waiting from an economics standpoint, the PCE that we
Speaker 10: get later this week, personal income and spending.
Speaker 1: And then that first read on GDP for the first quarter.
Speaker 4: Megan good Morning is ed in San Francisco. There's a
Speaker 4: UBS note this morning doing the rounds. A lot of
Speaker 4: people are talking about it, and they've cut their view
Speaker 4: on the Big six to neutral from overweight. But they're
Speaker 4: basically saying tough comps this quarter. And I think that
Speaker 4: they're kind of suggesting that if you go away from
Speaker 4: the Big six or mag seven, what if you want
Speaker 4: to call it, there is some other technology out there.
Speaker 4: There are other corners of the market to play in.
Speaker 4: Do you share that thesis?
Speaker 10: Yes, absolutely, And you know these stocks have had a
Speaker 10: great run, but they have to now. As we mentioned,
Speaker 10: the valuations are very high and people are looking for
Speaker 10: outside of that to make money, not just in the
Speaker 10: large cap space, but I think if you look in
Speaker 10: the small and MiGCAP space. I think there's a little
Speaker 10: bit more of value there. They haven't participated in this
Speaker 10: rally in the large cap space, and if you look
Speaker 10: from a long term perspective, from a valuation standpoint, they're
Speaker 10: historically cheap versus the S and P five hundred, they're
Speaker 10: in the same both though from an earnings perspective that
Speaker 10: there's a lot of uncertainty around earnings in the next
Speaker 10: couple quarters. But if you can withstand that volatility and
Speaker 10: look longer term, these may be some opportunities in the market.
Speaker 4: Megan, there is quite a lot riding on earnings, I
Speaker 4: feel like this season, and lots of people say, well,
Speaker 4: if earnings don't deliver for us, particularly on the Big
Speaker 4: six mag seven, then tech will fall away and the
Speaker 4: market will go with it. We like drama on the show, okay,
Speaker 4: but realistically, how worried are you about the stakes in
Speaker 4: the coming weeks.
Speaker 1: I'm quite worried.
Speaker 10: We had a little bit more than a five percent
Speaker 10: correction in the market over the past couple of weeks.
Speaker 1: That was not enough, in my opinion.
Speaker 10: To really warrant these to look at these elevated evaluations
Speaker 10: and then also take all of these mountings that we
Speaker 10: have from an economics standpoint, from a geopolitical standpoint, from
Speaker 10: a federal reserve standpoint, I think there still is a
Speaker 10: little bit too much optimism about what the Federal Reserve
Speaker 10: can do.
Speaker 1: And our bigger risk here is what is inflation going
Speaker 1: to do?
Speaker 10: Are we really in the midst of a reignition? I
Speaker 10: guess you could say of inflation. If that's the case,
Speaker 10: these stocks and these earnings expectations and these valuations are
Speaker 10: just not sustainable.
Speaker 4: Megan Hornman, Vernet's Capital Advisor, is really appreciate your time
Speaker 4: on the show.
Speaker 5: I'm now been talking tech.
Speaker 3: First up, calls are growing for a crackdown on X
Speaker 3: in Australia after two knife attacks have occurred in Sydney
Speaker 3: over the past ten days alone. Now, graphic content from
Speaker 3: the stabbings as well as misinformation spread quickly as both
Speaker 3: attacks unfolded, and that's now prompted five government ministers to
Speaker 3: consider bringing in.
Speaker 5: Tougher laws for social media companies.
Speaker 3: Plus ten Cent shares well, they've staged big rally since December,
Speaker 3: and now we know that China's biggest internet firm has
Speaker 3: just nailed down an earlier then anticipated debut of its
Speaker 3: mobile game Dungeon and Fighter Mobile. It's a marquee title
Speaker 3: expected to refresh and aging pipeline and drawing new users,
Speaker 3: so shares, tick tire that much more. And Japan's UNTI
Speaker 3: Trust regulator has its eyes on Google this after it
Speaker 3: says the tech giant used tactics that limited Yahoo Japan's
Speaker 3: ability to compete in targeted search ads. Now, the watchdog
Speaker 3: says that Google's parent Alphabet changed its conduct as soon
Speaker 3: as they flagged the practice. That will keep on monitoring
Speaker 3: this US firm.
Speaker 11: Apple's next big thing is a push into on device
Speaker 11: large language models. Apple's been working on several major projects
Speaker 11: for years, including home robots, foldable iPads, and augmented reality glasses,
Speaker 11: but the biggest and most important project coming this year
Speaker 11: is a push into generative AI. Apple's approach will be
Speaker 11: a little bit different than the competition like Google, OpenAI
Speaker 11: and Meta. Instead of powering Jenai on cloud based servers,
Speaker 11: the functions will work on the iPhone itself, using the
Speaker 11: on device software processors and other chips. That makes it quicker,
Speaker 11: more secure, and Apple believes more functional and more accurate.
Speaker 11: With iOS eighteen coming in September after being introduced in
Speaker 11: June at the Worldwide Developers Conference, Apple plans to include
Speaker 11: a slew of new AI features that will help users
Speaker 11: in their daily lives.
Speaker 4: I'm Mark German. This is power on. Okay, let's get
Speaker 4: a check in on the market and one asset I
Speaker 4: guess we haven't to us much about is bitcoin. We
Speaker 4: sent the headline five pm Pacific on eight point nineteen.
Speaker 4: The halving has occurred and as such it cuts in
Speaker 4: half the rewards. The paid to mine is twenty four
Speaker 4: to seven. We trade in bitcoin, so we're at sixty
Speaker 4: five thousand, sixty six thousand US dots partocon right now.
Speaker 4: Where we're seeing a more pronounced, delayed suppose reaction to
Speaker 4: the harving is in those assets that do not trade
Speaker 4: twenty four to seven. In other words, the US traded
Speaker 4: equities or stocks to the crypto links coinbases off its
Speaker 4: session highs but have been up seven percent. Riot another
Speaker 4: block chambered platform up nine percent. Some names moving to
Speaker 4: the downside Marathon Digital Holdings down three point nine percent.
Speaker 4: There was a headline on the term or Caroline that
Speaker 4: the harving was a bit of a limp, but as
Speaker 4: you know, I think we should be excited about it.
Speaker 4: I think there's still a lot to discuss there.
Speaker 5: We're still parties virtual or in real life.
Speaker 3: I want to know how many of those invites you
Speaker 3: went to ed But one person hosting one of those
Speaker 3: halving parties was Chris Klein, Bitcoin Ira COO and co founder.
Speaker 3: For this and so much more so, you watched it
Speaker 3: happen when it occurred on Friday night. But now the
Speaker 3: reality and what's interesting is, you know, maybe there are
Speaker 3: some players miners out there now that don't get rewarded
Speaker 3: as much.
Speaker 5: Maybe we've see an impact on the shared price.
Speaker 3: But ultimately this is meant to drive the increase of bitcoins.
Speaker 5: Will it?
Speaker 4: Yes?
Speaker 12: Absolutely, thanks for having me, and yeah, we had some
Speaker 12: good parties last week for the having You're right, it
Speaker 12: does punish the producers of the asset class.
Speaker 4: You will see.
Speaker 12: Salce headlines this morning that it came off with a whimper.
Speaker 12: That's pretty typical for having events. It's usually three to
Speaker 12: six months where you start seeing some impacts of that
Speaker 12: supply constraint that takes place.
Speaker 4: Supply constraint has not yet taken place. I actually want
Speaker 4: to focus on that for a minute, because I think
Speaker 4: you guys had a pretty good quarter, and actually since
Speaker 4: the start of the year, whether you are focused on
Speaker 4: the underlying technology or you're participant in the marketplace for
Speaker 4: crypto related assets, things have been quite cheery. Put that
Speaker 4: into context for us, as everyone was bracing for the harving,
Speaker 4: they were also doing business and carrying on with it.
Speaker 12: Yes, absolutely, it's kind of interesting. You expect this like
Speaker 12: big time square event where everything changes, like the year
Speaker 12: has turned over, and in reality it's just we've hit
Speaker 12: another block, the next two hundred and ten thousandth block
Speaker 12: in which it's in our code, it's in our DNA
Speaker 12: to cut or cut the rewards and then limit that supply.
Speaker 12: This is not happening in a vacuum either, so you've
Speaker 12: got ets that are taking a line line's share of
Speaker 12: those of these things. Right now, we have a few
Speaker 12: billion dollars of assets clients or client assets under custody
Speaker 12: inside of our platform, and there'll be more and more
Speaker 12: when less and less is available, which is really in
Speaker 12: contrast to the Almighty dollar and the way the US
Speaker 12: dollar works today. We actually reward producers of currency every
Speaker 12: four years with things called reelections, right.
Speaker 4: That I get the parallel of we have a big
Speaker 4: part of our audience that are focused on largely the blockchain, right,
Speaker 4: they probably don't care about any given direction of the
Speaker 4: movement in bitcoin or or its current price. But there
Speaker 4: is now a big market of people that does. And
Speaker 4: many of them argue because of the finite supply, and
Speaker 4: I'm repeating myself to audience. We always talk about this,
Speaker 4: but bitcoin can only ever go up in price because
Speaker 4: of that limited because that's actually yeah. The other story
Speaker 4: of the first quarter was liquidity. This is quite a
Speaker 4: liquid market, yes, where a lot of sounds. How do
Speaker 4: we square those two?
Speaker 12: How do you square that with liquidity is a difficult question.
Speaker 12: Probably bigger nerds that can handle that for you. But
Speaker 12: don't forget the divisibility of bitcoin. It you don't trade
Speaker 12: in one bitcoin. It goes down to the eleventh decimal point,
Speaker 12: which is known as the satoshi. And as we get
Speaker 12: further and further down that scarcity, you're going to start
Speaker 12: seeing the impact where people will be, Wow, you're a
Speaker 12: one bitcoiner, and that.
Speaker 4: Will be a huge deal. I think it.
Speaker 12: Also, you can't have this conversation about bitcoin having without
Speaker 12: talking about inflation.
Speaker 4: They're very intertwined. Today.
Speaker 12: I was reading a study this morning Northwest Musical came out.
Speaker 12: Average Americans think they need one and a half million
Speaker 12: dollars in order to retire comfortably, which is.
Speaker 4: A pretty large number.
Speaker 12: However, what's really staggering is that just three years ago
Speaker 12: the same report was at nine hundred and fifty thousand.
Speaker 12: So in just three years, Americans feel like they need
Speaker 12: fifty three percent more money to retire comfortably. And that's
Speaker 12: part of why folks are looking at diversification of currency,
Speaker 12: and bitcoin is a opportunity for that.
Speaker 3: But you're looking at what we're saving for our pensions
Speaker 3: and for our retirement a little bit more. Because you've
Speaker 3: got in your name bitcoin, IRA, you don't just offer bitcoin,
Speaker 3: you offer us some other cryptocurrencies. But more broadly, at
Speaker 3: the moment, this coming of an ETF was meant to
Speaker 3: tempt in the so called boomers to get them back
Speaker 3: into allocating to an attempted to illocate into bitcoin. But
Speaker 3: what about the rest of the old coins? And how
Speaker 3: you seeing interest pick up as we start to talk
Speaker 3: more of an ATHTF two.
Speaker 12: Yeah, the ETHTF is starting to get some build up.
Speaker 12: We should maybe expect that later this year. I don't
Speaker 12: get excited because I waited seven years for the Bitcoin
Speaker 12: ETF to get approved, But there are a slew of coins,
Speaker 12: thousands of them on our platform. There's about sixty five
Speaker 12: different coins that are available or currencies available today, and
Speaker 12: they're all served different utilities. Ethereum is really the backbone
Speaker 12: of the future of the web or Internet as we
Speaker 12: can think of it, which is designed for smart contracts. Actually,
Speaker 12: I wish my ten year old daughter was here. She
Speaker 12: was on a podcast I think last week, and she
Speaker 12: has one associations for these Bigcoin is money a theory
Speaker 12: as contracts ripples banks, and like coin is her favorite shopping.
Speaker 4: I actually think that the huge body of our audience
Speaker 4: get that they appreciate just simplifying things a little bit.
Speaker 4: Chris Klein, Bigcoin, I ra Aco and co found. It's
Speaker 4: great to have you on the program here in San Francisco.
Speaker 4: Thank you. Let's talk about the entertainment industry. I chatted
Speaker 4: with Kevin May, a former CEO of TikTok and former
Speaker 4: Disney chairman, and we talked about you Guessed It, TikTok's troubles,
Speaker 4: but also Disney's leadership, two big stories in that world
Speaker 4: of late. He's also the co CEO of Candle Media,
Speaker 4: which owns Coco Melon creator Moonbug Entertainment, So I had
Speaker 4: to ask him if we should expect more coming from
Speaker 4: the company. Smash hit children's series listen to this.
Speaker 2: We are planning and movies hasn't been I don't think
Speaker 2: of officially announcement actually, but there was a movie coming up,
Speaker 2: hopefully that will be either theatrically released or beyond on
Speaker 2: a streaming service. I'm thinking it could be theatrically released
Speaker 2: and that would be great. That's probably in two years
Speaker 2: we'll have a Cocomelon movie. And you're right about licensing
Speaker 2: and merchandising when you have the reach and depth of
Speaker 2: engagement that we have with our properties with kids and
Speaker 2: their parents. By the way, there's a huge amount of
Speaker 2: co viewing of Cocomelon or other properties. Something like forty
Speaker 2: percent of all views are also seen by a parent,
Speaker 2: and we've done the work to know that for sure.
Speaker 2: That does lend itself to developing a whole set of
Speaker 2: licensed properties that are based on that character. Toys, t shirts,
Speaker 2: soft lines, bedroom who trends, all the stuff that you'd expect.
Speaker 4: We're in all of it, Kevin, You've mentioned it several times.
Speaker 4: Over the course of the conversation. I'm sure it's come
Speaker 4: up at Jeffreys and it's a big part of your
Speaker 4: history and your present. It's Disney. Who do you think
Speaker 4: should be the next CEO of Disney? And I'll jump
Speaker 4: in and ask if you'd throw your own hat into
Speaker 4: that ring.
Speaker 2: Well, I have pretty busy I have a tech funder
Speaker 2: that i've I've that i'm working that, I'm working with them,
Speaker 2: a co founder of I have Candle Media, I'm doing
Speaker 2: some other stuff. And Disney has a very very solid
Speaker 2: set of leaders below Bob, so there they have a
Speaker 2: great bench. They have people that have been there a
Speaker 2: long time that really understand the Disney culture, that just
Speaker 2: be value and prominence and dynamism of brands. And I
Speaker 2: think most likely they'll go internal and fine, and they
Speaker 2: have candidates that I think are are wonderful. So that's
Speaker 2: where I think it's going to go.
Speaker 4: And my hat.
Speaker 2: I have not tossed my hat in the ring actually,
Speaker 2: so you know I'm doing my thing at this point.
Speaker 4: There are many streaming platforms to choose from. You kind
Speaker 4: of summed it there. One of the names you didn't mention,
Speaker 4: for example, was Paramount Plus and then and Peacock is
Speaker 4: one that I think about a lot. Is there a
Speaker 4: world in which all of these survive independently or do
Speaker 4: you see some consolidation? And I know you must get
Speaker 4: asked that all the time by the financial press, or
Speaker 4: find mental networks like ours, But again I point to
Speaker 4: the idea, you're sat on the other side of the table,
Speaker 4: the content creator, and you've got some power and interest
Speaker 4: in where it's distributed.
Speaker 2: Like I don't, I can't. I don't know what the
Speaker 2: future of Paramount Plus and Peacock are. Obviously I don't
Speaker 2: have a crystal ball. I do think that there's a
Speaker 2: scale issue with them. I do believe not every single
Speaker 2: studio can have an associated streaming service that has the
Speaker 2: same prospects as a Disney or as a Max or
Speaker 2: as a Netflix or Amazon for that matter, And I
Speaker 2: left those out, but that's obviously even a huge player
Speaker 2: as as Apple TV plus. I do think consolidation is inevitable.
Speaker 2: You know that is just natural economics one on one
Speaker 2: and an industry start off and everything's about growth and
Speaker 2: cost of capital was very inexpensive back when Netflix started
Speaker 2: the ball rolling, I think that there was very free
Speaker 2: access to capital and a lot of patients by on
Speaker 2: behalf of investors. And I think as the industry is mature,
Speaker 2: and as you're starting to kind of trade more household
Speaker 2: and as natural growth starts to level off, always consolidation
Speaker 2: happens and people then you have to start focusing on
Speaker 2: costs and cost synergies, and the synergy is inherent and
Speaker 2: possibly and mergers and the like. And I think that
Speaker 2: is a natural course for any any growth sector to
Speaker 2: evolve into. And I think that's what you're saying in streaming.
Speaker 2: It will happen there too.
Speaker 4: Kevin, I'm pushing my luck here. I'm being told we
Speaker 4: got to go. But I would be remiss if I
Speaker 4: didn't ask you about TikTok, just your assessment, having been
Speaker 4: inside and now on the outside, of what you think
Speaker 4: will happen. I know you don't have a crystal ball,
Speaker 4: but you know the political will is to divestiture of
Speaker 4: US ops, and TikTok seems to think that domiciling US
Speaker 4: user data in US based servers is the answer. It's
Speaker 4: hard for me to call.
Speaker 2: I haven't been in TikTok for several years now, so
Speaker 2: I'm just observing it the way everyone else is observing
Speaker 2: it at this point, I will say this about TikTok.
Speaker 2: It's a great team. It's an independent company, although it Chinese,
Speaker 2: it is not, you know, as far as I know,
Speaker 2: run by the government in China or anything else. I
Speaker 2: don't know. I'm not familiar with all the different security
Speaker 2: concerns that our government may or may not have. But
Speaker 2: I do know that the folks that the folks that
Speaker 2: I dealt with at TikTok or high quality people. The
Speaker 2: product is obviously super impressive and engaging and has taken
Speaker 2: over larger parts of the media and social media landscapes already.
Speaker 2: I don't know what's going to happen. It does seem
Speaker 2: to be bipartisan, more so than most issues these days,
Speaker 2: so it's going to be interesting. I hope that I
Speaker 2: hope the right thing happens there.
Speaker 4: That was Candle Media co CEO Kevin Mayer Caroline.
Speaker 3: What a wide ranging conversation, brilliant ed. Meanwhile, though, look,
Speaker 3: we've got to switch gears because it's Earth Day.
Speaker 5: Happy Earth Day.
Speaker 3: Let's take this opportunity to look at the latest world
Speaker 3: of climate tech. In bench Capital, I'm very pleased to
Speaker 3: bring in sim Capital founder and managing partner Sita Chandremon
Speaker 3: Class three on today's vcpol sustainability as a service?
Speaker 5: What is that?
Speaker 3: That as your ethos, that is your underpinning. What does
Speaker 3: sustainability as a service look like?
Speaker 5: It's a great question.
Speaker 13: I think I'd probably first dissect the question around sustainability
Speaker 13: because there's so much public rhetoric right now on what
Speaker 13: it actually means. So we are trying to tackle how
Speaker 13: do we produce more or the same with less? And
Speaker 13: there's new technologies that are trying to combat this. But
Speaker 13: the way that we think about it is like, how
Speaker 13: can we invest in consumption infrastructure, in the picks and shovels,
Speaker 13: in supply chain software, in new data platforms that really
Speaker 13: allows us to be much more sustainable in an economic way.
Speaker 13: So that's sort of why we landed on this coined term,
Speaker 13: if you will, the new SaaS or sustainability as a service.
Speaker 3: You've been raising money and for as someone who's leading
Speaker 3: it as GP, still a lot of money from the
Speaker 3: fund to allocate, So tell me fifty million where the
Speaker 3: priorities to be putting money to you? Where you can
Speaker 3: make the most impact from how I basically interact with
Speaker 3: the climate as a capital It's.
Speaker 5: A great question.
Speaker 13: I you know, we're still investing out of our first fund,
Speaker 13: but we're actually really focused on our second fund right now.
Speaker 5: And the ethos has been happening is that second fund.
Speaker 13: Our second fund target is eighty And you know, the
Speaker 13: thing that I think a lot of consumers struggle with
Speaker 13: is like, how can you really capitalize on your individual
Speaker 13: purchases or your activities if you will. And one of
Speaker 13: the things we always come back to is that sustainable
Speaker 13: solutions are not really long term sustainable if they're not
Speaker 13: cost effective and if they don't really if they don't
Speaker 13: really inhibit the consumer's life that drastically on a day
Speaker 13: to day because at the end of the day, I mean,
Speaker 13: we're sitting in a Bloomberg office. We live in a
Speaker 13: capitalist society, so we need to focus on investments, and
Speaker 13: we need to focus on solutions that don't totally change
Speaker 13: the way that we behave at least not so drastically.
Speaker 5: I'm going to kind of a flight still for example, exactly.
Speaker 13: And it's a lot of the times as an investor,
Speaker 13: we're thinking about how do we evaluate businesses that are
Speaker 13: a lot more practical, that aren't necessarily from the echo
Speaker 13: chambers of you need to be net zero tomorrow. So
Speaker 13: that's really where we're sort of leaning our biases these days.
Speaker 4: CITA. We've done a lot of reporting on the program
Speaker 4: about funds new funds that are focused on manufacturing industrial funds,
Speaker 4: but they have the same thesis, just very specifically, what's
Speaker 4: the opportunity for you. Is it on something tangible hardware
Speaker 4: or are you also looking at software application as well.
Speaker 13: We're definitely looking across both areas, but our personal biases
Speaker 13: towards the latter, I mean, to be very frank, the
Speaker 13: genesis of the fund really started because we felt like, wow,
Speaker 13: there was a lot of capital being deployed into the
Speaker 13: broad climate crisis or the sustainability transition. From a sheer
Speaker 13: volume standpoint, the vast majority of this capital was going
Speaker 13: into hard assets, long duration if you will, slightly risk
Speaker 13: your bets. And while that's a super noble ambition, if
Speaker 13: you will, and I'm so happy to know funding is
Speaker 13: out there for those initiatives, at the end of the day,
Speaker 13: this transition is not going to happen just because we
Speaker 13: have these decade defining technologies. We also need the picks
Speaker 13: and shovels. Sort of the point I was making earlier
Speaker 13: around really software that will actually connect the dots between
Speaker 13: the new technologies that exist and the end user, be
Speaker 13: it the consumer businesses. So we have a strong bias
Speaker 13: towards really investing in these slightly more scalable, slightly more
Speaker 13: asset light, much more software focused opportunities.
Speaker 4: What is the pitch then to LPs very quickly, just
Speaker 4: how do you sell it to them?
Speaker 13: The vision I'm probably I'm probably going to say away
Speaker 13: from that, just because we know we try to keep
Speaker 13: those conversations in private, but also more so, it really
Speaker 13: depends on what your perspective is on the transition. But
Speaker 13: our stance is very much that you know, over our lifetime,
Speaker 13: one of the greatest transitions, or one of the greatest problems,
Speaker 13: if you will, is this sustainability transition. But as a
Speaker 13: function of that, it's also one of the greatest wealth
Speaker 13: creation opportunit unities, and we need to be able to
Speaker 13: find ways in which we can invest in that transition
Speaker 13: in a much more asset light way, in a way
Speaker 13: that is a little bit more tangible. Sort of to
Speaker 13: go back to her thesis a little bit, or to
Speaker 13: answer Caroline's first question as well around consumers. You know,
Speaker 13: in the US where we sit, and this is also
Speaker 13: pretty akin to a lot of developed countries, the biggest
Speaker 13: shareholder of the economy or the biggest stakeholders or consumers,
Speaker 13: we hold over seventy percent of the GDP so on aggregate.
Speaker 13: This is a massive moving power mechanism and consumers. If
Speaker 13: we're forced to change every facet of our lives, what
Speaker 13: we do, how we spend our time, how we move,
Speaker 13: it forces businesses to also change the way they do business.
Speaker 13: And that really is the essence of how we think
Speaker 13: about the space.
Speaker 3: I'm talking about, how you move, That's why you're in
Speaker 3: companies like Cowboy, Tomorrow Farms, How we eat, how we consume?
Speaker 5: Sime Capital, founder and managing Ponda. Great to have you
Speaker 5: with us. Thank you so much, Seeta s Tremun classroy Ed.
Speaker 4: If you got coming up another big story and they
Speaker 4: keep coming. Salesforce talks with Informatica fizzle out. In fact,
Speaker 4: there ain't no talks at all. We'll talk about those
Speaker 4: details next. This is Bloomberg Technology Data management company. Informatica
Speaker 4: said it's not engaged in takeover talks following reports that
Speaker 4: discussions with sales Force had call let's get the analysis
Speaker 4: with Anna rag Rana of Bloomberg Intelligence. So that was
Speaker 4: the chronology, right. Bloomberger reported there were talks. Then Bloomberger
Speaker 4: reported that they had called specifically over price. It's the
Speaker 4: sticking point. And now Informatica has been forced I guess
Speaker 4: to come out and say no talks, but I don't
Speaker 4: think many people really understood the deal anyway, Ana rag Yeah,
Speaker 4: I don't know.
Speaker 14: We are happy that there's no deal for salesforce sake.
Speaker 14: I mean, Informatica is not growing at that seam readers salesforces,
Speaker 14: and you know, we're happy with the way what Salesforce
Speaker 14: has down over the last twelve to twenty four months,
Speaker 14: stayed away from deals, focused on margins, focus on organic
Speaker 14: growth rate, and I hope for their sake they stick
Speaker 14: to that at least for the near term, because as
Speaker 14: as you remember, this was the biggest criticism for Salesforce
Speaker 14: for several years, that they move into slightly profitable territory
Speaker 14: and then they'll go out and buy something big and
Speaker 14: then you know, shareholders don't get the benefit of the
Speaker 14: leverage that comes from a SaaS model.
Speaker 5: To that end.
Speaker 3: Well, this was going to be the biggest deal since
Speaker 3: all the way back to Slack being bought for twenty.
Speaker 5: Seven billion dollars.
Speaker 3: I'm interested there for what is it that they just
Speaker 3: wanted to add and what would you like them to
Speaker 3: add organically if not inorganically.
Speaker 4: Yeah.
Speaker 14: See, one of the things is Salesforce has no shortage
Speaker 14: of i would say opportunities in the long run. They
Speaker 14: have a massive customer base on sales, automation and customer
Speaker 14: service a lot of that. What they have to do
Speaker 14: is make sure these products work well. Now, when they
Speaker 14: were looking at buying Informatica, they actually bought a company
Speaker 14: called Mutsoft a few years ago that does some stuff
Speaker 14: that's very similar to Informatica. Informatica is slightly larger than
Speaker 14: mule Soft when it comes to that. But honestly, they
Speaker 14: just reported Salesforce reported that MuleSoft grew twenty two percent
Speaker 14: the last time we had their numbers. That's a massive
Speaker 14: growth rate for a company internally what they're doing on
Speaker 14: data management. Informatica, on the other hand, if you look
Speaker 14: at Consensus is growing at six seven percent. So from
Speaker 14: our side, I was surprised that they are even you know,
Speaker 14: considering at this point, given all the opportunities they have
Speaker 14: organically and.
Speaker 3: RAG so great to always get your perspective and why
Speaker 3: perhaps you like the idea that EM and A isn't
Speaker 3: going thick and fast over over at CRM and Ran
Speaker 3: Ran and we thank you.
Speaker 5: Bloomberg Intelligence, all.
Speaker 3: Things Salesforce, all things well, busy, busy Monday day. We're
Speaker 3: talking TikTok, We're talking legal regulatorations, We're talking your big Take,
Speaker 3: which is a mastery.
Speaker 4: To d Yeah, and it's all happening at once. I
Speaker 4: think it's gonna be a massive week, you know, earning
Speaker 4: start in Earnest Tesla massive obviously with the show, it
Speaker 4: was an important way to start the week. So recap
Speaker 4: on the podcast. Really grateful. So many of you are
Speaker 4: listening to the show as a podcast and your way
Speaker 4: to work your way home wherever you are in the world.
Speaker 4: You can get it on Apples, Spotify, and iHeart. We
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Speaker 4: and San Francisco join us for the next four days.
Speaker 4: This is Bloomberg Technology