WEBVTT - Spike in Mail Theft Fueled by Black Market 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carole Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.680 plus technology, politics, economics, all purtnising the power of Business 0:00:13.680 --> 0:00:17.119 Week reporters and editors not to mention our journalists and 0:00:17.120 --> 0:00:20.000 analysts in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.239 Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.400 --> 0:00:25.200 You can also listen to our radio show at two 0:00:25.200 --> 0:00:27.880 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.920 --> 0:00:31.840 YouTube search Bloomberg Global News. Well. Among the headlines we 0:00:31.840 --> 0:00:34.239 are following at this hour about the Russian invasion of 0:00:34.720 --> 0:00:39.559 and war with Ukraine is more businesses exiting, Credit Suites 0:00:39.600 --> 0:00:42.680 Group and Abu Dhabi's Well Fund will stop investing in Russia, 0:00:42.720 --> 0:00:46.560 while beer makers Carlsberg and Heineken announcing plans to exit 0:00:46.600 --> 0:00:49.240 the country. So we have been following that. We've also 0:00:49.280 --> 0:00:51.400 been following what's going on with Ukraine's I T and 0:00:51.440 --> 0:00:54.640 tech community in a big way. Buscar Chalk Revordy is 0:00:54.760 --> 0:00:58.680 Dean of Global Business at the Fletcher School at Tufts University. That, 0:00:58.960 --> 0:01:01.760 Dean joins us once again on the phone from Boston. 0:01:02.240 --> 0:01:05.800 How are you, Dean. I'm doing very well, thank you 0:01:05.880 --> 0:01:07.720 and you we're doing well. It's good to have you 0:01:07.760 --> 0:01:10.200 back with us. UM. I wanted to just start by 0:01:10.280 --> 0:01:12.760 because you are in constant conversations and Carolin I have 0:01:12.800 --> 0:01:14.280 talked a lot over the last month, in the last 0:01:14.280 --> 0:01:16.920 five six weeks about the I T community on the 0:01:16.959 --> 0:01:21.000 ground in Ukraine and how much international businesses, American businesses 0:01:21.040 --> 0:01:25.080 rely on tech workers in that part of the world. UM, 0:01:25.120 --> 0:01:27.960 but you're in constant contact with with the I T 0:01:28.160 --> 0:01:31.560 community there and give us an idea of what's happening. 0:01:31.680 --> 0:01:37.199 Has it been disrupted and if they're still able to work, Yes, 0:01:37.240 --> 0:01:42.600 absolutely so, no question, it has been disrupted and they are. 0:01:42.800 --> 0:01:46.800 The community, of course, is spread out across the country, 0:01:46.920 --> 0:01:50.960 and in my conversations with them, UM, I realized that 0:01:51.280 --> 0:01:53.800 you know Ukraine, you know, just to look at the 0:01:53.800 --> 0:01:57.400 map will remind us of the fact that Ukraine is 0:01:57.440 --> 0:02:01.880 a very large geographic area. So the I T community 0:02:02.040 --> 0:02:05.880 is spread out across the country and they literally seem 0:02:06.000 --> 0:02:08.440 to break the country up into what they called the 0:02:08.480 --> 0:02:11.400 hot zone and you know, perhaps the cooler zones and 0:02:11.440 --> 0:02:14.359 the cooler zones are towards the western side of the country, 0:02:14.480 --> 0:02:17.800 and many of the I T firms that are still 0:02:17.840 --> 0:02:21.760 operating are on the western side or they have relocated 0:02:22.400 --> 0:02:26.600 their personnel and and and other equipment to the western side. 0:02:27.080 --> 0:02:31.560 So they're adapting their adjusting, and certainly the ones that 0:02:31.600 --> 0:02:35.399 are based on the western edge of the country, they're 0:02:35.440 --> 0:02:39.440 operating and they're looking for business well. And as Tim said, 0:02:39.480 --> 0:02:43.359 you know, we unfortunately as a result of this war 0:02:43.600 --> 0:02:48.440 in Ukraine, we are realizing what a important and large 0:02:48.440 --> 0:02:50.520 I T and tech community is in Ukraine and how 0:02:50.560 --> 0:02:54.600 many you know, global companies interact or rely on that 0:02:54.639 --> 0:02:58.600 tech community. From what I understand, you have been as 0:02:58.600 --> 0:03:01.920 you said, you know, entire with many members of that 0:03:02.080 --> 0:03:04.440 community on the ground. I believe they call themselves the 0:03:04.520 --> 0:03:08.160 I T Army. What are you hearing though, about what 0:03:08.200 --> 0:03:13.320 they are seeing, their expectations maybe about when this ends? Uh? 0:03:13.360 --> 0:03:16.000 And what is the future? Can they even think about 0:03:16.040 --> 0:03:20.520 it at this point? Yes? So of course, uh, you know, 0:03:20.560 --> 0:03:24.680 their guests as to how and when this ends is 0:03:25.040 --> 0:03:28.640 um just as challenging you know, for them as it 0:03:28.720 --> 0:03:30.880 is for us, and you know us being all those 0:03:31.200 --> 0:03:34.240 of us who are watching this UH, this war UH 0:03:34.320 --> 0:03:36.880 in in horror and shocks on the outside because the 0:03:37.000 --> 0:03:41.560 end game is still unclear. What they are doing is 0:03:42.080 --> 0:03:45.680 they have set up backup plans and they are continuing 0:03:45.720 --> 0:03:47.640 to at least the ones, as I mentioned on the 0:03:47.680 --> 0:03:51.520 western side of the country see themselves as the economic 0:03:52.400 --> 0:03:57.960 soldiers food soldiers in this war. President Zelenski has encouraged UH, 0:03:58.760 --> 0:04:03.680 everybody who is a significant contributor to the economy to 0:04:03.840 --> 0:04:07.600 do their best to keep the economy running. They have 0:04:07.760 --> 0:04:11.400 also the Ukrainian government has made some significant changes to 0:04:11.440 --> 0:04:15.280 the tax code and they have essentially made the tax 0:04:15.320 --> 0:04:19.960 scheme simple, pay two percent tax and it's voluntary. It's voluntary. 0:04:20.040 --> 0:04:22.600 So they're trying to encourage people to get back to 0:04:22.680 --> 0:04:24.880 work to keep the economy running. And they see the 0:04:24.920 --> 0:04:28.039 I T industry as the prime engine for the economy 0:04:28.040 --> 0:04:30.880 to be running because it's the one industry that can 0:04:31.000 --> 0:04:36.039 survive as long as the internet infrastructure survives. So this 0:04:36.160 --> 0:04:39.560 industry has at least the ones that have been successful 0:04:40.279 --> 0:04:44.480 have got internet connectivity, they have got backup power. UH, 0:04:44.560 --> 0:04:48.359 they are storing their data offshore, and they're continuing to 0:04:48.400 --> 0:04:51.200 do work with their science. As you mentioned, they do 0:04:51.320 --> 0:04:53.960 see themselves as the i T Army. They see that 0:04:54.000 --> 0:04:58.800 they are contributing to the war by keeping people employed, 0:04:59.360 --> 0:05:02.640 by bringing in revenues and potentially contributing to the TACH 0:05:02.640 --> 0:05:05.560 survenues that the government sorely needs in order to you know, 0:05:05.680 --> 0:05:11.200 keep everything that it is doing uh operating. So here 0:05:11.240 --> 0:05:14.560 here's my question. If you're a startup right now and 0:05:14.839 --> 0:05:18.360 you have a germ of an idea and you're somewhere 0:05:18.360 --> 0:05:21.640 outside of Ukraine but you need I T workers, are 0:05:21.680 --> 0:05:24.920 you less likely to look to Ukraine for that I 0:05:25.080 --> 0:05:28.000 T work given the disruptions there? And my question is 0:05:28.040 --> 0:05:30.160 really about long term economic damage to the country as 0:05:30.160 --> 0:05:33.000 a result of this, because I imagine that if you're 0:05:33.120 --> 0:05:35.840 if you're looking for stability, it perhaps isn't the right 0:05:35.839 --> 0:05:40.440 place to go right now if you're that startup founder. Absolutely, 0:05:40.480 --> 0:05:43.800 and I would empathize with everybody who is either a 0:05:43.800 --> 0:05:47.159 startup or an established company, because when you're looking to 0:05:47.200 --> 0:05:50.000 get any kind of outsource work done, whether it's I 0:05:50.160 --> 0:05:53.919 T or any other kind of service, you're looking for 0:05:54.080 --> 0:05:58.000 not only quality, but also agreements at the service level 0:05:58.120 --> 0:06:01.359 and the stability you know that even if I have 0:06:01.800 --> 0:06:06.240 you know, a great talent and capital I want the 0:06:06.320 --> 0:06:07.839 work done and I want to make sure that the 0:06:07.839 --> 0:06:10.440 work doesn't get disrupted by something like a war going on. 0:06:10.800 --> 0:06:15.719 So um, absolutely, people are concerned about the risk. That said, 0:06:16.040 --> 0:06:19.599 a lot of companies, startups included, are looking for ways 0:06:19.600 --> 0:06:22.920 in which they can help this war effort. So my 0:06:23.160 --> 0:06:25.640 ask for the startups would be take on some of 0:06:25.680 --> 0:06:28.000 the risk. And some of the folks are spoken within 0:06:28.040 --> 0:06:31.559 this I d Army. They're saying they have tried to 0:06:31.720 --> 0:06:35.000 ensure against many of the priss and the contingencies. Of 0:06:35.040 --> 0:06:38.400 course that's not guaranteed. Well, great to check in with 0:06:38.440 --> 0:06:42.800 you once again. Another important important aspect certainly to this 0:06:43.240 --> 0:06:46.760 story in this reality buscar check Orty, he's doing of 0:06:46.800 --> 0:06:49.760 Global business at the Fletcher's School at Tufts University, joining 0:06:49.839 --> 0:06:52.120 us once again on the phone from Boston. Really appreciate 0:06:52.680 --> 0:06:54.400 his time on this Monday. I mean, I feel like 0:06:54.440 --> 0:06:56.359 I learned so much about Ukraine right in terms of 0:06:56.360 --> 0:07:00.560 the I T community, remarkable resilience. You're listening to Business Week, 0:07:00.560 --> 0:07:05.279 Carl Master, Tim Stanovic. This is Bloomberg Radio. This is 0:07:05.320 --> 0:07:09.279 Bloomberg business Week with Carol Messer and Bloomberg Quick Takes. 0:07:09.360 --> 0:07:14.240 Tim Stenovic on Bloomberg Radio Now for something um a 0:07:14.280 --> 0:07:16.640 little bit different, but definitely on our radar. It's a 0:07:16.680 --> 0:07:18.800 story coming up in the New is Shoe of Bloomberg 0:07:18.800 --> 0:07:20.720 business Week, out later this week, already online and on 0:07:20.800 --> 0:07:23.240 the Bloomberg and Tim. It's about a Smike, a spike 0:07:23.400 --> 0:07:25.640 in mail theft, and it's been fueled by a black 0:07:25.680 --> 0:07:28.560 market for stolen checks. The story by Jack gil I'm 0:07:28.600 --> 0:07:31.280 cybersecurity correspondent at Bloomberg News. He joins us from the 0:07:31.360 --> 0:07:33.640 ninety and one studio in Washington, d C. With us 0:07:33.640 --> 0:07:36.120 in person here in New York City. Joel Weber, editor 0:07:36.240 --> 0:07:38.480 at Bloomberg Business Week. He's with us in the Bloomberg 0:07:38.520 --> 0:07:42.120 Interactive Broker studio. Joel, It's interesting. We talked so much 0:07:42.160 --> 0:07:47.000 about hacking and cybersecurity and then I read a story 0:07:47.080 --> 0:07:49.560 like this, and it's like, does it get any more 0:07:49.600 --> 0:07:53.640 old school than stealing checks from the mail and trying 0:07:53.680 --> 0:07:58.200 to change who they're addressed to. Yeah, there are the 0:07:58.240 --> 0:07:59.960 new ways of hacks, and then I guess there's like 0:08:00.040 --> 0:08:03.320 the ultimate old school. This does involve technology? It does? 0:08:03.400 --> 0:08:06.960 It does? And Jack's story and reporting like totally caught 0:08:07.080 --> 0:08:11.640 r I because it was just like wait what And 0:08:12.160 --> 0:08:18.080 the whole scheme centers on basically getting people's mail like hardmail. Uh, 0:08:18.120 --> 0:08:22.080 there's been a raft of thefts of mail keys which 0:08:22.280 --> 0:08:26.560 can open boxes. There's all these Telegram videos online of 0:08:26.560 --> 0:08:29.239 of these grabbing as much meal as they can, stuffing 0:08:29.240 --> 0:08:33.400 it into cars getaway vehicles. But that's where it gets interesting, 0:08:33.440 --> 0:08:37.120 because what do you do with those those checks that 0:08:37.120 --> 0:08:39.120 are in the mail that you're still paying your your 0:08:39.160 --> 0:08:42.839 bills with. Jack, Well, this is an interesting theft or 0:08:42.840 --> 0:08:44.800 a thing of a string of thefts, right, It's like 0:08:44.800 --> 0:08:47.120 we're kind of bringing it back here, as you mentioned, 0:08:47.160 --> 0:08:49.800 to the old school, and what's happening here is it's 0:08:49.800 --> 0:08:52.240 a new twist, I would say on an on an 0:08:52.240 --> 0:08:55.120 old problem. It's not new that people have tried to 0:08:55.160 --> 0:08:57.800 fish letters out of the mailbox, right, but it is 0:08:57.840 --> 0:09:00.760 a new phenomenon that they are taking these checks, putting 0:09:00.800 --> 0:09:03.920 them on apps like Telegram, and selling them by the thousands. 0:09:03.920 --> 0:09:06.360 And it's pretty straightforward. I mean, I've even looked at 0:09:06.360 --> 0:09:08.440 a bunch of YouTube videos about putting these a nail 0:09:08.440 --> 0:09:11.760 polish remover, uh, stripping away the ink that you may 0:09:11.800 --> 0:09:14.400 be right out to your your power company, maybe for 0:09:14.480 --> 0:09:16.800 your mortgage or your rent check. Or Grandma sent it 0:09:17.040 --> 0:09:19.680 or or right, yeah, Grandma sends you fifty bucks for 0:09:19.720 --> 0:09:22.120 your birthday, you know, in lieu of a nice knitted sweater. 0:09:22.520 --> 0:09:25.160 And guess what this thing gets posted online? Someone over 0:09:25.520 --> 0:09:27.560 over draws your account like a gentleman. We spoke with 0:09:27.640 --> 0:09:30.640 your in the DC area and it's off to the races. 0:09:30.679 --> 0:09:33.560 So the whole thing here the scam is basically if 0:09:33.600 --> 0:09:37.200 you can remove who the check was was made out to, 0:09:38.320 --> 0:09:42.000 but keep the the amounts right so or do you 0:09:42.040 --> 0:09:44.800 just strip it all and sell? Are you selling a 0:09:44.840 --> 0:09:46.960 blank check? When you do it this way, you're essentially 0:09:47.000 --> 0:09:49.960 selling a blink check. And one of the victims we 0:09:50.000 --> 0:09:53.400 spoke with said that, you know, he found out at first, 0:09:53.400 --> 0:09:55.120 he found out about it because I called him up 0:09:55.120 --> 0:09:57.400 and said, hey, did you try to make a credit 0:09:57.400 --> 0:09:59.360 card pavement for such a chuch bank? And he says, 0:09:59.360 --> 0:10:00.640 how do you know? I said, well, I'm looking at 0:10:00.640 --> 0:10:03.200 your check right now, and he was very much taken aback. 0:10:03.600 --> 0:10:05.760 But then, you know, about a week later he said 0:10:05.760 --> 0:10:08.880 that somebody tried to withdraw a much larger amount than he, 0:10:09.160 --> 0:10:11.480 of course had in his account at the time. His 0:10:11.600 --> 0:10:14.199 bank had already been flagged for this and and said, oh, 0:10:14.240 --> 0:10:16.760 look there's another check that got pounced. So I think 0:10:16.760 --> 0:10:19.719 it really it's kind of a guess, right, how much 0:10:19.800 --> 0:10:22.000 is somebody going to have in their account? Maybe they 0:10:22.040 --> 0:10:25.240 seem wealthy, you know, maybe we'll try for a thousand bucks. 0:10:25.840 --> 0:10:27.880 If it doesn't work, you know, no skin off our nose. 0:10:27.920 --> 0:10:30.120 If it does, well, here's a stack of twenties. We 0:10:30.120 --> 0:10:32.640 can now go around town with. Okay, jack, So many questions, 0:10:32.640 --> 0:10:36.640 so little time. But I do wonder, uh, if somebody 0:10:36.679 --> 0:10:39.679 makes a checkout to themselves, aren't they incriminating themselves then? 0:10:39.760 --> 0:10:41.199 Or do they make it out to cash? How does 0:10:41.200 --> 0:10:43.520 that work? So there are a few different ways that 0:10:43.600 --> 0:10:46.000 could do this. Um, you know, these these channels that 0:10:46.040 --> 0:10:48.600 we had talked about, This professor at Georgia State, uh, 0:10:48.679 --> 0:10:52.640 David Mayman, had actually tracks not just stolen checks, but 0:10:52.720 --> 0:10:56.640 stolen identities, bank account information, so user names and passwords 0:10:56.679 --> 0:10:59.520 to get into these accounts. So I wouldn't put it 0:10:59.520 --> 0:11:03.199 past these folks to actually create fraudulent identities that they 0:11:03.280 --> 0:11:05.480 then used to make a check out to themselves to 0:11:06.080 --> 0:11:09.800 you know, a Joe Smith or maybe a less suspicious 0:11:09.840 --> 0:11:13.240 looking name. Perhaps go to a check cashing place. It 0:11:13.320 --> 0:11:16.120 might not be as reputable as a major bank and 0:11:16.600 --> 0:11:18.800 walk out of the bank with the stack of twenties. 0:11:18.880 --> 0:11:21.360 And these dudes and du dats man, they're not trying 0:11:21.400 --> 0:11:24.079 to hide, right, They actually are posting photos of themselves 0:11:24.160 --> 0:11:28.160 with piles of money. They are. I mean, some of 0:11:28.160 --> 0:11:30.960 these videos I have to say no one other word 0:11:31.080 --> 0:11:33.600 is just wild. I mean there are there are just 0:11:33.720 --> 0:11:36.160 stacks of maile like flowing out of this one guy's 0:11:36.200 --> 0:11:38.080 back seat when you open up at the back of it, 0:11:38.400 --> 0:11:41.280 another guy's photograph with a you know, a real sort 0:11:41.280 --> 0:11:43.800 of you know ear to ear grin pulling a you know, 0:11:43.840 --> 0:11:46.599 a stack at Andrew Jackson's out of a out of 0:11:46.679 --> 0:11:50.199 an envelope that he just got. Um, they don't hide themselves, 0:11:50.200 --> 0:11:51.640 and you know, the folks we spoke to you said, 0:11:51.720 --> 0:11:54.920 is because there's no incentive for them to be anonymous. 0:11:54.960 --> 0:11:59.240 These thefts have increased while the rate of at least 0:11:59.280 --> 0:12:01.559 federal prosecuts of this mails have to have gone down. 0:12:01.640 --> 0:12:04.360 So you know, you'd be the judge about how often 0:12:04.400 --> 0:12:07.120 someone's actually gonna get caught and how how big of 0:12:07.160 --> 0:12:09.160 a problem do we think this is. I mean, I 0:12:09.160 --> 0:12:11.560 know it's going to be difficult to put number on it. 0:12:11.600 --> 0:12:13.840 But how how big of a spike in mail theft 0:12:13.880 --> 0:12:16.080 are we seeing? So, I mean, if you look at 0:12:16.080 --> 0:12:18.720 the numbers that so the the the watchdog, the Inspector 0:12:18.760 --> 0:12:21.360 General for the USPS says that at least in the 0:12:21.480 --> 0:12:24.040 last year or so, the check thefts have gone up 0:12:24.080 --> 0:12:26.560 by about a hundred and sixty one percent. Or rather, 0:12:26.840 --> 0:12:29.960 complaints of mail thefts now the postal services. Not all 0:12:30.080 --> 0:12:33.679 those are indeed bona fide. Maybe somebody lost how to 0:12:33.760 --> 0:12:36.240 check lost in the mail, got upset reported as stolen 0:12:36.240 --> 0:12:38.360 and it was fine. But you know, by and large, 0:12:38.400 --> 0:12:39.960 when we talked to some of the experts, some of 0:12:40.000 --> 0:12:42.440 the officials who study this, they say, look, these numbers 0:12:42.480 --> 0:12:46.319 are significantly going up. And just by you know, Bloomberg's 0:12:46.360 --> 0:12:49.760 view of looking at on these telegram channels of our own, 0:12:50.120 --> 0:12:54.319 I mean just anecdotally, every day, every hour, almost every minute, 0:12:54.960 --> 0:12:57.839 you know, these things get posted. Unbelievable. All right, we 0:12:57.920 --> 0:13:01.479 gotta leave with their jackuell um uh He is Sobersecurity 0:13:01.480 --> 0:13:03.880 correspondent Bloomberg News from our ninety nine one studio in 0:13:03.880 --> 0:13:06.160 Washington and our thanks to Jill Webber, editor a Bloomberg 0:13:06.160 --> 0:13:09.839 Business Week. You're listening to Bloomberg Business Week with Carol 0:13:09.920 --> 0:13:15.000 Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So, 0:13:15.040 --> 0:13:17.960 one of the stocks that we've been watching in today's session, 0:13:18.200 --> 0:13:21.400 and that is Test Lab stock is pretty much holding 0:13:21.440 --> 0:13:24.720 onto its highs, up about seven point seven percent this company. 0:13:25.440 --> 0:13:28.120 I haven't done the math in the last half hour 0:13:28.200 --> 0:13:30.440 or so or hour, but it looks like it's on 0:13:30.480 --> 0:13:32.520 pace to add about eighty five billion to its market 0:13:32.520 --> 0:13:34.800 cap today. Not too shabby. It's been on a tear. 0:13:34.880 --> 0:13:38.440 I think it's up around the past ten trading days. Uh. Yeah, 0:13:38.520 --> 0:13:40.560 that was before the stock split was announced. That was 0:13:40.600 --> 0:13:43.280 before that's with today's game. So that's with today's game. 0:13:43.320 --> 0:13:45.720 If you propose stock split right, I'd love those. West 0:13:45.720 --> 0:13:47.719 Coast correspondent for Bloomberg News. He joins us from the 0:13:47.720 --> 0:13:50.600 Bloomberg nine sixties studio in San Francisco, also joining us 0:13:50.640 --> 0:13:54.000 on camera for our YouTube audience, h D. When it 0:13:54.000 --> 0:13:57.920 comes to stock splits, nothing fundamental changes about a company 0:13:58.040 --> 0:14:00.360 when more shares are created. And in this day age 0:14:00.559 --> 0:14:03.400 when you can buy slices of stock through trash wa 0:14:03.600 --> 0:14:07.480 the delity, Robin Hood and more, why do we still 0:14:07.520 --> 0:14:10.960 see investor optimism with an announcement like this. Yeah, I 0:14:10.960 --> 0:14:13.160 mean we've been having this debate on Bloomberg television and 0:14:13.240 --> 0:14:16.840 radio all day. Right. Essentially, the rationale in the past 0:14:16.920 --> 0:14:19.480 has been to lower the barrier to entry. You know, 0:14:19.520 --> 0:14:22.479 a thousand dollars a share for the retail investor who 0:14:22.680 --> 0:14:25.160 only wants to buy a few shares, you can't get 0:14:25.240 --> 0:14:27.920 access to them. Now, you made the good point. You 0:14:27.960 --> 0:14:30.240 could go on one of the trading apps or platforms 0:14:30.240 --> 0:14:33.160 and buy a fraction of a share um, but it's 0:14:33.160 --> 0:14:35.800 not the same sensation, right, And remember that Elon Musk 0:14:35.800 --> 0:14:39.200 has talked about this in the past. Tesla shareholders retail 0:14:39.200 --> 0:14:43.840 investors are normally people who own the vehicles, they own 0:14:43.920 --> 0:14:46.960 the Tesla energy products. They believe in the long term thesis, 0:14:46.960 --> 0:14:49.920 they believe in Elon Musk, And it's about shared ownership 0:14:49.960 --> 0:14:52.840 and democratizing that ownership. And we don't know what the 0:14:52.920 --> 0:14:54.360 rational is here. All we have is the eight K 0:14:54.520 --> 0:14:56.280 filing and the tweet to go on, Right, but you'd 0:14:56.280 --> 0:15:00.280 assume that lowering that barried entries what their motivation was. Well, 0:15:00.320 --> 0:15:02.200 and it's interesting because I was thinking about, right, you 0:15:02.280 --> 0:15:06.360 reduced when you do buybacks. That's initially when investors get excited, 0:15:06.400 --> 0:15:08.680 and because you reduce the amount of shares and then 0:15:08.720 --> 0:15:13.000 improves your earnings per share. Right, that's just simple math. Yeah, 0:15:13.160 --> 0:15:15.960 and you know the way the mechanics of this will work. 0:15:16.040 --> 0:15:18.320 We don't know, because again in the eight K filing, 0:15:18.560 --> 0:15:21.000 all they said was they're going to ask shareholders to 0:15:21.040 --> 0:15:23.760 approve the idea of a stock split at the annual meeting. 0:15:23.800 --> 0:15:26.760 But in the past, what usually happens is you you 0:15:26.840 --> 0:15:29.120 do a split three for one, five, one, twenty, foe, 0:15:29.240 --> 0:15:32.800 whatever it may be, and you offer a nominal tent 0:15:32.960 --> 0:15:36.440 of a cent value for each additional share you issue. 0:15:36.480 --> 0:15:39.160 But I think what's really interesting is that it depends 0:15:39.160 --> 0:15:40.760 on how big the split is. But a lot of 0:15:40.760 --> 0:15:43.240 folks they've been talking about whether Tester could be included 0:15:43.280 --> 0:15:46.120 on the dal Jones Industrial Average, for example, because the 0:15:46.160 --> 0:15:48.800 mechanics of that index work differently to the SMP five 0:15:49.480 --> 0:15:52.000 and therefore you have a broader slice of the population 0:15:52.440 --> 0:15:55.480 having a slice of Tesla investing in this company. Okay, 0:15:55.480 --> 0:16:00.240 so the news coming out in a tweet before even 0:16:00.240 --> 0:16:02.400 the a K came out, and what if you follow 0:16:02.440 --> 0:16:05.800 Tesla really closely, it doesn't really have a formal communications 0:16:05.800 --> 0:16:11.560 department those days, which is I think still so so yesterday, Tim, 0:16:11.600 --> 0:16:14.680 What is that it doesn't have a formal communications Yeah, 0:16:14.680 --> 0:16:16.480 I mean what Elon Musk does all the they have 0:16:16.480 --> 0:16:19.360 a formal communications. It's called Twitter and media. Well that's 0:16:19.440 --> 0:16:22.120 that's why. But it but it truly is that that's 0:16:22.240 --> 0:16:25.360 unique in the sense of large companies like this. But 0:16:25.440 --> 0:16:27.720 we have more questions than we have answers. Right, this 0:16:27.760 --> 0:16:29.520 is what you and I are discussing now. And don't 0:16:29.600 --> 0:16:32.200 shed a tear for me. But it's difficult, you know, 0:16:32.280 --> 0:16:34.560 covering Tesla, you come in for a lot of criticism 0:16:34.720 --> 0:16:38.240 for from Tesla owners test the shareholders to say, oh, 0:16:38.240 --> 0:16:41.080 we get it. You know, why can't you guys report 0:16:41.120 --> 0:16:44.280 on this and that they disbanded disbanded their press team 0:16:44.280 --> 0:16:47.920 in UM But that's the point, you know, there isn't information. 0:16:47.920 --> 0:16:49.840 We don't know what the rationale behind this move was. 0:16:49.880 --> 0:16:51.680 We don't know what the stock split will be in 0:16:51.760 --> 0:16:54.160 terms of the ratio. We just have an idea that 0:16:54.200 --> 0:16:56.600 it will happen if shareholders of appre We don't even 0:16:56.600 --> 0:16:58.800 know where the annual meeting is. You know, last year 0:16:58.880 --> 0:17:00.760 is in October. The year before it was in June. 0:17:01.240 --> 0:17:03.680 It's difficult, all right, So what do we know? Like 0:17:03.720 --> 0:17:06.320 I always think about, you know, God blessed Jina Martin Adams, 0:17:06.320 --> 0:17:09.720 because whenever we're like lost among debates, whether it's about markets, 0:17:09.880 --> 0:17:12.239 rates or blah blah blah, She's like, Okay, here are 0:17:12.240 --> 0:17:15.280 the fundamentals. Here's what folks are saying about earnings and stuff. 0:17:15.400 --> 0:17:17.960 What do we know fundamentally about Tesla in terms of 0:17:18.000 --> 0:17:21.040 its growth trajectory? We just saw, right, the German facility 0:17:21.080 --> 0:17:23.920 being opened up, But so what do we know it? Yeah, 0:17:24.160 --> 0:17:26.200 this is the question. And by the way, you pointed 0:17:26.200 --> 0:17:29.920 out the stock move, it's one fords worth of value gained. 0:17:30.000 --> 0:17:34.120 But until that move today, the stock was down here today, right, 0:17:34.640 --> 0:17:37.119 that's a nice metric, right, But the stock has been 0:17:37.200 --> 0:17:39.240 under pressure. It's caught up in this narrative around the 0:17:39.240 --> 0:17:42.280 outlook for higher rates and the fed um and also 0:17:42.440 --> 0:17:44.879 you know what drives it higher. Well, you're right, Berlin's 0:17:44.880 --> 0:17:47.679 online now, Austin will come on line next month in April. 0:17:47.760 --> 0:17:50.199 That will add to their production. And then in Shanghai 0:17:50.440 --> 0:17:54.160 you have a resurgent COVID nineteen situation that's halted production 0:17:54.160 --> 0:17:57.600 at Testas plant. According to Bloomberg, sources. The cars built 0:17:57.600 --> 0:18:00.520 in China, those are the profit drivers, right, iron margin 0:18:00.640 --> 0:18:04.080 vehicles because they've produced more efficiently there. So you know, 0:18:04.119 --> 0:18:06.600 amongst all the noise, I think you know, Wall Street investors, 0:18:06.600 --> 0:18:09.560 institutional investors will look at this and say, as Tim said, 0:18:09.640 --> 0:18:14.720 it doesn't really fundamentally change much. Thank you. I appreciate that, um, 0:18:14.840 --> 0:18:17.159 because this is something I've been talking about whenever we 0:18:17.240 --> 0:18:20.680 talk Stark splits. Hey, uh, ed you mentioned the shutdown 0:18:20.720 --> 0:18:25.000 in Shanghai, the disruption there in general. How is how 0:18:25.080 --> 0:18:29.160 is Tesla doing managing the supply chain crisis? Yeah, Look, 0:18:29.160 --> 0:18:33.000 Tesla has demonstrated over the duration of the supply chain crisis, 0:18:33.040 --> 0:18:35.160 which from memory has been going on for about two 0:18:35.160 --> 0:18:38.720 and a half years, but they've demonstrated their more nimbles. 0:18:38.720 --> 0:18:41.160 So in the case of semi conductors, they've said, we're 0:18:41.200 --> 0:18:44.040 impacted by a shortage of semi conductors, but what we're 0:18:44.040 --> 0:18:47.320 able to do is use alternative semi conductors and rewrite 0:18:47.359 --> 0:18:50.120 the code on our end. Remember, semi conductors are used 0:18:50.160 --> 0:18:54.439 to transmit electronic single signals essentially, um, what where they 0:18:54.440 --> 0:18:57.240 have less flexibilities on the commodities side, right, you can't 0:18:57.560 --> 0:19:01.600 impact raw price, raw materials prices that degree. But Tesla 0:19:01.680 --> 0:19:03.880 also has long term contracts with a lot of metal 0:19:03.960 --> 0:19:07.199 supplies for example, so they are hurting. They did discuss 0:19:07.240 --> 0:19:10.240 at the prior innings about the potential for margin erosion. 0:19:10.400 --> 0:19:13.200 But what did they do? Guys? They raised prices because 0:19:13.240 --> 0:19:15.720 the demands there and they have pricing power which a 0:19:15.720 --> 0:19:19.000 lot of corporate America can't necessarily say right now with 0:19:19.080 --> 0:19:21.560 higher input costs. It does feel like in terms of visibility, 0:19:21.600 --> 0:19:23.639 we see more and more players getting into this market. 0:19:23.640 --> 0:19:25.600 But it does feel like there's been a lot of 0:19:25.640 --> 0:19:28.399 writing about this that in terms of at least for them, 0:19:28.440 --> 0:19:31.680 maybe mid term, longer term, I mean, Tesla is kind 0:19:31.680 --> 0:19:36.160 of fairly entrenched in this market. Yeah. I would say 0:19:36.200 --> 0:19:38.600 that the most bullish elements of the street would argue, 0:19:38.600 --> 0:19:41.320 and I'm talking about cell side analysts, but people don't 0:19:41.359 --> 0:19:44.600 want an electric vehicle necessarily, they want a Tesla. You 0:19:44.640 --> 0:19:46.480 know that there's two different things here. If you believe 0:19:46.480 --> 0:19:49.400 in the transition, right and so the demand that's out 0:19:49.400 --> 0:19:51.879 there for Tesla products, remember their supply constrained. You go 0:19:51.920 --> 0:19:53.439 on Tesla dot com right now and try and get 0:19:53.480 --> 0:19:56.080 yourself a vehicle. You could be waiting until August or 0:19:56.080 --> 0:19:58.880 you could be rating until October November of this year. 0:19:58.960 --> 0:20:02.200 That's how backlog they are. But that's not really that's 0:20:02.200 --> 0:20:04.560 an outlaw. That's what would have been an outlier in 0:20:04.600 --> 0:20:07.320 a different world. But if you want an electric car 0:20:07.359 --> 0:20:10.160 from Ford right now, you're probably gonna have to wait 0:20:10.200 --> 0:20:12.960 in a similar amount of time. That's true, And so 0:20:13.119 --> 0:20:16.359 let's bring it full circle to Shanghai. In February, Tesla 0:20:16.440 --> 0:20:20.560 delivered fifty six thousand vehicles from that plant, which indicates 0:20:20.560 --> 0:20:24.440 that their stated capacity of food vehicles a year from China, 0:20:24.840 --> 0:20:27.680 they're actually beating that. But now the plant shut down, 0:20:27.760 --> 0:20:30.439 and so what's incredible is that Tesla is able to 0:20:30.760 --> 0:20:34.320 navigate the supply chain crunch, bring new plants online, but 0:20:34.560 --> 0:20:38.240 maintain volumes globally and pull ahead. Whereas you know, you 0:20:38.240 --> 0:20:40.520 see a lot of the other legacy players they argue, well, 0:20:40.680 --> 0:20:43.359 we're having some problems lifting up our production ramp because 0:20:43.359 --> 0:20:46.560 of supply chain constraints. Yeah, it's pretty impressive how he's 0:20:46.560 --> 0:20:48.960 been able to navigate so much, But I go back 0:20:48.960 --> 0:20:50.399 to when he wanted to open up the facility in 0:20:50.480 --> 0:20:52.399 China and how quickly he got the deal done Like 0:20:52.880 --> 0:20:55.639