WEBVTT - Coinbase Cooperating With SEC on Users Metric as News of Hack Emerges 0:00:02.520 --> 0:00:10.560 Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg business 0:00:10.560 --> 0:00:14.720 Weekdaily reporting from the magazine that helps global leaders stay 0:00:14.760 --> 0:00:18.800 ahead with insight on the people, companies, and trends shaping 0:00:18.840 --> 0:00:23.760 today's complex economy. Plus global business, finance and tech news 0:00:23.800 --> 0:00:27.840 as it happens. The Bloomberg Business Week Daily Podcast with 0:00:27.960 --> 0:00:31.760 Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:32.440 --> 0:00:34.879 I'm looking right now at shares of Coinbase. They're down 0:00:34.920 --> 0:00:37.319 about six and a half percent. They fell as much 0:00:37.320 --> 0:00:39.239 as eight point nine percent. This was this after The 0:00:39.240 --> 0:00:42.680 New York Times reported that the SEC has been investigating 0:00:42.720 --> 0:00:45.960 Coinbase whether or not it misstated its user numbers in 0:00:46.159 --> 0:00:48.479 past disclosures. I want to bring in Stacey Marie Ishmel. 0:00:48.560 --> 0:00:52.479 She's executive editor for Crypto and Payments. She joins us 0:00:52.479 --> 0:00:54.920 here in the Bloomberg BusinessWeek Studio. What do we know 0:00:55.000 --> 0:00:55.320 about this? 0:00:55.840 --> 0:00:58.200 Well, I think the first thing we know is, and 0:00:58.320 --> 0:00:59.680 this is going to come as a surprise to a 0:00:59.680 --> 0:01:01.480 lot of few wells, that the SEC has not in 0:01:01.480 --> 0:01:05.039 fact dropped any in all of its potential enforcement actions 0:01:05.040 --> 0:01:07.360 against crypto companies. You know, there was a move over 0:01:07.400 --> 0:01:10.480 the past couple of months for this very important financial 0:01:10.480 --> 0:01:12.800 regulator to say, hey, when it comes to crypto, we're 0:01:12.840 --> 0:01:16.039 largely not going to be looking into most things. So 0:01:16.080 --> 0:01:18.560 it was interesting to see you both the New York 0:01:18.560 --> 0:01:22.120 Times story and then the confirmation statement from Coinbase that 0:01:22.200 --> 0:01:25.640 this was an ongoing investigation coming out of the Genstler era, 0:01:26.160 --> 0:01:28.360 at a time when I think a lot of folks 0:01:28.400 --> 0:01:31.319 in the industry had thought, okay, good, all clear, there's 0:01:31.360 --> 0:01:33.360 no hangovers and we don't need to worry about anything. 0:01:33.400 --> 0:01:35.880 Is there something different about this case than the cases 0:01:35.880 --> 0:01:36.800 that have been dropped. 0:01:37.120 --> 0:01:39.119 I think one of the key points is it does 0:01:39.160 --> 0:01:42.639 relate to sort of a very bread and butter SEC issue, 0:01:42.680 --> 0:01:46.040 which is are you being accurate and transparent in your disclosures? 0:01:46.680 --> 0:01:50.240 And at heart of it is this idea that, according 0:01:50.280 --> 0:01:52.960 to the SEC's allegations, or i should say, according to 0:01:53.040 --> 0:01:58.080 the allegations represented in the New York Times story, Coinbase 0:01:58.240 --> 0:02:02.840 had previously you used a verified user figure of one 0:02:02.920 --> 0:02:06.280 hundred million, which they stopped using a couple of years ago, 0:02:06.360 --> 0:02:09.400 and according to the SEC that that figure was initially misleading. 0:02:10.440 --> 0:02:13.480 So this is the second piece of news that we're 0:02:13.520 --> 0:02:16.720 getting in regards to Coinbase just today. 0:02:16.639 --> 0:02:20.840 Yes today, Yes, totally. There was also a reported hack. 0:02:21.120 --> 0:02:22.680 Tell us what's going on with that. 0:02:22.760 --> 0:02:27.679 Yeah, this one is arguably a bigger deal in that 0:02:27.800 --> 0:02:31.600 it's happening now and it affects very sensitive customer data. 0:02:31.639 --> 0:02:35.680 So Coinbase put out a statement and regulatory filing earlier 0:02:35.720 --> 0:02:40.920 today that hackers had targeted some of their overseas kind 0:02:40.960 --> 0:02:45.280 of contractors and workers and brought offered them bribes to 0:02:45.440 --> 0:02:49.760 seal sensitive customer data. Now, when we're talking sensitive customer data, 0:02:49.760 --> 0:02:52.360 we're not just talking about email addresses and passwords. It's 0:02:52.360 --> 0:02:55.240 like photographs of your government ID, you know, things people 0:02:55.280 --> 0:02:58.400 would have had to submit to verify their identities. In 0:02:58.440 --> 0:03:02.120 some cases it was you know, physical addresses, mailing addresses, 0:03:02.520 --> 0:03:04.240 you know, so you can imagine with those government nineties. 0:03:04.280 --> 0:03:06.480 It's also things like date of birth. There might be 0:03:06.480 --> 0:03:09.840 other forms of contact information. So that is, you know, 0:03:10.000 --> 0:03:13.400 in a moment in which crypto companies are have been 0:03:13.400 --> 0:03:16.959 on a kind of a charm offensive since the since 0:03:16.960 --> 0:03:20.160 President Trump was inaugurated, to say, you know, hey, crypto 0:03:20.240 --> 0:03:22.880 is safe, it's reliable. It's the future of finance. To 0:03:22.880 --> 0:03:25.280 have something that comes in and sort of reminds people 0:03:25.360 --> 0:03:28.560 that crypto companies are high value targets for hackers is 0:03:28.639 --> 0:03:30.160 the timing is a little bit challenging for them. 0:03:30.240 --> 0:03:33.160 Well, speaking of timing, I mean Coinbase probably wanted us 0:03:33.160 --> 0:03:35.040 talking about their inclusion in the S and P five 0:03:35.120 --> 0:03:38.000 hundred this week, which was remarkable given the fact that 0:03:38.040 --> 0:03:40.880 we saw the stock move higher by twenty four percent 0:03:41.040 --> 0:03:43.800 YEP on Tuesday as a result of the news that 0:03:43.840 --> 0:03:45.400 it would be included in the S and P five 0:03:45.480 --> 0:03:47.000 under replacing Discovery replacing the. 0:03:47.000 --> 0:03:49.040 Stock companies, which you know, I think is kind of 0:03:49.120 --> 0:03:50.680 exactly what we're talking about here. And if you think 0:03:50.680 --> 0:03:53.800 of Discover Financial as like the bastion of what some 0:03:53.840 --> 0:03:56.600 people in cryptoil liked to call old finance or traditional finance, 0:03:56.640 --> 0:03:59.920 and then this crypto exchange coming in and being like 0:04:00.120 --> 0:04:02.400 or the future of finance, and then you know, the 0:04:02.440 --> 0:04:06.040 news cycle is like time out some reminders about the 0:04:06.160 --> 0:04:07.440 risks embedded in innovation. 0:04:08.680 --> 0:04:10.920 Does it I don't want to ask you if it 0:04:10.920 --> 0:04:13.480 taints the moment at all, But for me, the news 0:04:13.560 --> 0:04:15.480 earlier this week about its inclusion in the S and 0:04:15.480 --> 0:04:20.440 P five hundred, it felt really symbolic as a recognition 0:04:20.560 --> 0:04:26.680 that this asset class was being recognized by as a 0:04:26.680 --> 0:04:27.719 blue chip essentially. 0:04:28.520 --> 0:04:32.000 Yeah, and I think one of you know, having been 0:04:32.200 --> 0:04:34.560 somebody paying close attention to this for a minute, one 0:04:34.600 --> 0:04:38.080 of the things that really struck me is that feels 0:04:38.080 --> 0:04:40.080 like it happens all the time. Like you know, Emily, 0:04:40.120 --> 0:04:44.440 you remember when we were doing stories about the Super 0:04:44.480 --> 0:04:48.839 Bowl of Crypto, when you had FTX and others being like, 0:04:48.920 --> 0:04:51.239 come join, do these amazing things. And then what happens 0:04:51.279 --> 0:04:53.520 to FDx very shortly after it filed for bankruptcy sand 0:04:53.520 --> 0:04:56.680 bankqueint Freed was in handcuffs being accused of massive fraud. 0:04:57.000 --> 0:05:01.359 And so like crypto goes through, much like crypto prices themselves, 0:05:01.480 --> 0:05:04.800 these moments in which that long awaited day for many 0:05:04.839 --> 0:05:10.520 executives is institutional acceptance, retail acceptance, and tim to your point, 0:05:10.560 --> 0:05:13.800 this idea of we are a legitimate asset class, we 0:05:13.839 --> 0:05:16.560 are a contender, you should take us seriously, and then 0:05:16.640 --> 0:05:20.640 something happens in the market where they're like, or here 0:05:20.640 --> 0:05:22.080 are some bad things like can happened instead. 0:05:22.240 --> 0:05:24.720 But it's interesting because now that if they want to 0:05:24.720 --> 0:05:27.000 be treated like a you know, a public company in 0:05:27.040 --> 0:05:29.279 the s and P. Five hundred, they're going to be 0:05:29.839 --> 0:05:33.760 up to the scrutiny of just like any other public company. 0:05:33.839 --> 0:05:35.599 So I thought it was a very interesting point that 0:05:35.600 --> 0:05:38.599 you made in the beginning that like this SEC probe, 0:05:39.360 --> 0:05:41.160 it's not unique to crypto. 0:05:40.760 --> 0:05:45.159 Companies, certainly not. And you know it's it's the we're 0:05:45.160 --> 0:05:47.200 in an interesting period in which crypto companies, when they're 0:05:47.200 --> 0:05:51.159 being scrutinized, it's not because of the assets underlying them, right, 0:05:51.200 --> 0:05:54.560 It's more like you are doing big company things. This 0:05:54.640 --> 0:05:56.440 is the big company behavior we expect. 0:05:57.040 --> 0:06:00.120 Stacey Mrie Stacey re Ishmael, Executive editor for cript Do 0:06:00.240 --> 0:06:03.680 and Payments at Bloomberg News. You can check out the 0:06:03.880 --> 0:06:06.479 entire teams reporting on the Bloomberg terminal and of course 0:06:06.520 --> 0:06:08.200 at Bloomberg dot com. 0:06:08.520 --> 0:06:12.360 You're listening to the Bloomberg Business Week Daily podcast. Catch 0:06:12.440 --> 0:06:15.160 us live weekday afternoons from two to five eas during 0:06:15.320 --> 0:06:19.279 listen on Applecarplay and Android Auto with the Bloomberg Business app, 0:06:19.440 --> 0:06:21.720 or watch us live on YouTube. 0:06:22.560 --> 0:06:25.080 Let's bring in Dana Telsey. She's found her CEO and 0:06:25.160 --> 0:06:28.680 Chief Research Officer of Telsey Advisory Group for Specialty all 0:06:28.680 --> 0:06:31.280 Things retail. Dana, I want to start with Walmart, even 0:06:31.279 --> 0:06:34.080 though this is not a company that you particularly follow. 0:06:34.120 --> 0:06:38.200 One of your colleagues does that, but the company did 0:06:38.240 --> 0:06:42.919 say that it is going to pass on costs to consumers, 0:06:43.279 --> 0:06:46.719 not yet but soon. We saw shares fall. How do 0:06:46.760 --> 0:06:48.400 you take the results that we got from the company 0:06:48.480 --> 0:06:51.360 today in the context of what we know about tariffs 0:06:51.880 --> 0:06:54.560 and also the way that you've been talking about potentially 0:06:54.600 --> 0:06:56.279 empty shelves in the next couple of weeks. 0:06:56.520 --> 0:06:58.599 A couple things, and thank you very much for having me. 0:06:59.000 --> 0:07:01.839 First of all, if a like Walmart, with the skies 0:07:01.880 --> 0:07:05.320 and scale of Walmart is going to raise prices because 0:07:05.320 --> 0:07:08.719 of the external environment out there, what does it say 0:07:08.760 --> 0:07:11.920 for all the others? So everyone, given the headwinds of 0:07:12.040 --> 0:07:16.040 carries and costs that are out there, price increases are coming. However, 0:07:16.200 --> 0:07:18.480 it may be selective. It's not going to be across 0:07:18.600 --> 0:07:22.200 the board. It'll be called surgical, whatever word you want 0:07:22.200 --> 0:07:24.560 to use, it'll be surgical and what it is. But 0:07:24.640 --> 0:07:27.320 I've even heard we have this price tracker where we've 0:07:27.320 --> 0:07:30.080 been tracking eighty items and it comes out every Tuesday, 0:07:30.320 --> 0:07:33.000 same eighty items. And we have seen of the eighty 0:07:33.040 --> 0:07:36.040 items we track, around twenty percent of them have a price, 0:07:36.080 --> 0:07:39.040 have had a price increase each week, and it changes. 0:07:39.200 --> 0:07:41.840 Sometimes there may be a promotion, sometimes there's an event, 0:07:42.120 --> 0:07:45.520 but just on a tracker basis, price increases are coming. 0:07:45.720 --> 0:07:46.760 There's a reason. 0:07:46.520 --> 0:07:49.600 Why, in my mind, there has been some pull forward 0:07:49.600 --> 0:07:51.480 to sales the tracker. 0:07:51.600 --> 0:07:53.480 This is fascinating to me that you have this tracker. 0:07:53.960 --> 0:07:56.720 Is is there rhyme or reason too the types of 0:07:56.800 --> 0:08:00.360 products that are being that are increasing in price. 0:08:00.520 --> 0:08:03.360 Well, we track the same items every week, and it 0:08:03.360 --> 0:08:06.400 could their legacy items, whether it's a pair of Levi's 0:08:06.560 --> 0:08:08.720 or it's a Barbie doll, whatever. 0:08:08.480 --> 0:08:08.880 It may be. 0:08:09.720 --> 0:08:12.560 There isn't a rhyme or reason. But what's happening is 0:08:12.600 --> 0:08:15.200 that we expect when we heard about these tariffs, we 0:08:15.280 --> 0:08:17.640 need a way to be able to track it. And 0:08:17.680 --> 0:08:21.160 so this way, look what Walmart just said, prices increases 0:08:21.160 --> 0:08:24.160 are coming. Let's see what this tracker shows in the 0:08:24.200 --> 0:08:27.560 next four weeks in terms of pricing. So it's very interesting. 0:08:27.800 --> 0:08:30.240 Michael McKee had mentioned, you know, the difference that we're 0:08:30.240 --> 0:08:33.160 seeing in the soft data and the hard data that 0:08:33.240 --> 0:08:37.720 consumers are saying that they're really pessimistic, but we're not 0:08:37.920 --> 0:08:42.280 necessarily seeing that yet in hard data or earnings reports. 0:08:42.559 --> 0:08:44.960 Are you do you agree with that thesis or are 0:08:45.040 --> 0:08:47.360 you seeing pockets in some of these earnings reports that 0:08:47.520 --> 0:08:49.040 consumers are feeling the pain. 0:08:49.000 --> 0:08:49.800 A little bit of each. 0:08:49.920 --> 0:08:52.160 When you think about where there's been a slow down, 0:08:52.640 --> 0:08:55.120 luxury brands has been a slow down. You take a 0:08:55.160 --> 0:08:57.800 look at the high end. LVMH reported a negative three 0:08:57.840 --> 0:09:01.960 percent same store sales decline. That's typically weaker for an LVMH. 0:09:02.360 --> 0:09:06.320 You're seeing other companies that are brand leaders at not 0:09:06.440 --> 0:09:09.120 the luxury price points, but where there's brand leaders, where 0:09:09.120 --> 0:09:13.040 there's innovation. Look at today's results that came out of Birkenstock. 0:09:13.480 --> 0:09:16.880 You had a high teen sales increase, you increase the 0:09:16.880 --> 0:09:19.080 guidance for the year on sales the high end of 0:09:19.080 --> 0:09:22.840 the previous range seventeen percent plus, and you increase your ajusity. 0:09:22.920 --> 0:09:25.520 But da, what do they have? They have newness and 0:09:25.520 --> 0:09:28.959 innovation at the same time. I met with Tapestry on Tuesday, 0:09:29.000 --> 0:09:33.439 I met with Levi's yesterday. Tapestry and Levi's and Birkenstock 0:09:33.800 --> 0:09:38.360 heritage companies with authenticity that are reinventing their product. You 0:09:38.400 --> 0:09:41.079 know what they're doing. They're capturing a younger consumer. And 0:09:41.240 --> 0:09:44.640 companies like Coach, which is owned by Tapestry, a fifteen 0:09:44.679 --> 0:09:47.120 percent increase in averaging retail selling price. 0:09:47.400 --> 0:09:48.800 Why it's new and different. 0:09:48.960 --> 0:09:50.880 Emily and I are smiling right now because on our 0:09:50.960 --> 0:09:52.839 editorial call this morning, I said, we have to ask 0:09:52.920 --> 0:09:55.920 Dan about Birkenstock shares are up what six percent? You 0:09:55.920 --> 0:09:58.480 were on surveillance with Tom Keen and me last week. 0:09:58.559 --> 0:10:00.760 We asked you to name one company to watch. You 0:10:00.800 --> 0:10:02.719 said it was Birkenstock. You called this why are you 0:10:02.760 --> 0:10:03.760 bullish on Birkenstock? 0:10:04.120 --> 0:10:07.640 Because their footwear overall has wide appeal. You have the 0:10:07.679 --> 0:10:10.800 flywheel of younger customers that are being attracted to the brand. 0:10:11.120 --> 0:10:14.840 It's not just open toed sandals, it's closed toed shoes. 0:10:14.880 --> 0:10:16.360 Also, you look at the. 0:10:16.320 --> 0:10:19.600 Expansion opportunities they have with their own stores. They only 0:10:19.600 --> 0:10:22.000 have around ten stores in the US. They have wholesale 0:10:22.040 --> 0:10:24.320 accounts who have stores, but of their own. You take 0:10:24.320 --> 0:10:27.840 a look at Asia, which is a rising market for them. 0:10:28.120 --> 0:10:30.360 You look at the fact that they bring in goods 0:10:30.360 --> 0:10:31.320 they're made in Europe. 0:10:31.800 --> 0:10:34.760 Yes, they have terif exposure, but not the as significant 0:10:34.880 --> 0:10:38.480 teriff exposure. And look at their adjustinity bitdam margins, I 0:10:38.559 --> 0:10:41.280 mean you're in exos to thirty one percent. I don't 0:10:41.320 --> 0:10:44.520 have many companies that are generating mid to high teen 0:10:44.600 --> 0:10:48.800 sales increases with increasing EBITDA margins in an environment where 0:10:49.200 --> 0:10:50.120 the uncertainty. 0:10:50.360 --> 0:10:52.240 But you're seeing a little bit in footwear. 0:10:52.440 --> 0:10:55.160 You look at some of the other brands, Socony thirty 0:10:55.160 --> 0:10:58.600 percent increase in sales by Wolverine worldwide, Merrill up in 0:10:58.640 --> 0:10:59.880 excess to thirteen percent. 0:11:00.400 --> 0:11:02.160 So newness drives demand. 0:11:02.400 --> 0:11:05.080 Yeah, Maryls are having a comeback. I've seen a couple 0:11:05.240 --> 0:11:07.240 Marrals on the streets of New York City and that 0:11:07.360 --> 0:11:08.040 was like a shoe that. 0:11:07.960 --> 0:11:09.559 I want, I like to hear when I was like 0:11:09.600 --> 0:11:10.360 a child's But. 0:11:10.559 --> 0:11:11.600 They're coming back, you know. 0:11:11.760 --> 0:11:14.000 Dan, I was looking at the S and P five 0:11:14.120 --> 0:11:17.760 hundred sectors, the group levels. What was the top performing 0:11:17.800 --> 0:11:21.000 this year so far? What's the worst? Consumer Staples is 0:11:21.000 --> 0:11:24.400 one of the best performing groups. Consumer discretionary is one 0:11:24.400 --> 0:11:28.880 of the worst. How are investors supposed to invest in 0:11:28.960 --> 0:11:31.440 the consumer space at large? How should they be thinking 0:11:31.440 --> 0:11:33.559 about kind of the direction of travel when. 0:11:33.360 --> 0:11:36.520 You those when you think about exactly the difference with 0:11:36.559 --> 0:11:40.440 staples and discretionary staples as essentials, it's what you need, 0:11:40.520 --> 0:11:41.280 not what you want. 0:11:41.679 --> 0:11:44.040 And when you think about this environment where we don't. 0:11:43.840 --> 0:11:45.880 Know what the price increases is going to be We've 0:11:45.880 --> 0:11:49.320 all seen the backward looking data of consumer confidence, and 0:11:49.440 --> 0:11:53.600 so they're being careful. And so with staples, that's careful. 0:11:54.000 --> 0:11:57.680 With discretionary, it feels you have spending power. There's always 0:11:57.679 --> 0:12:00.199 the old adage that goes when the stock market it 0:12:00.280 --> 0:12:03.679 goes up, people feel great and spending can happen when 0:12:03.760 --> 0:12:07.160 the stock market comes down. You know, mind the hatchets, 0:12:07.200 --> 0:12:09.800 you know, be careful. And so look what we've had 0:12:09.880 --> 0:12:13.000 over the past two months. That's what you've had. Companies 0:12:13.120 --> 0:12:16.280 in the consumer area are reporting first quarter earnings. Now 0:12:16.559 --> 0:12:19.360 when you look at Walmart and what's to come, if 0:12:19.400 --> 0:12:21.880 they're saying prices are going up, that's going to be 0:12:21.920 --> 0:12:23.040 the mantra going forward. 0:12:23.160 --> 0:12:24.680 We got to get you to weigh in on Dick's 0:12:24.679 --> 0:12:28.040 buying foot Locker. Dick shares down about sixteen percent right now, 0:12:28.080 --> 0:12:32.360 Footlocker hire by eighty five percent, but that's still you know, 0:12:32.400 --> 0:12:34.079 going back to like just a few months ago. I 0:12:34.080 --> 0:12:37.280 think those are like December levels that we're saying, what 0:12:37.320 --> 0:12:38.520 does it say to you? I mean, this is the 0:12:38.559 --> 0:12:39.960 end of an era for foot Locker. This is a 0:12:39.960 --> 0:12:42.840 company that's been a public company since nineteen eighty What 0:12:42.840 --> 0:12:43.920 does this m and A mean to you. 0:12:44.320 --> 0:12:47.040 So overall on the M and A, where's the scale 0:12:47.080 --> 0:12:50.400 and where's the synergies? Foot Locker on its own is 0:12:50.440 --> 0:12:54.480 taking a long time to undergo this transformation, even under 0:12:54.559 --> 0:12:58.040 a well recognized, well respected. 0:12:57.400 --> 0:12:58.440 CEO, Mary Dillon. 0:12:58.520 --> 0:12:59.360 She came from Malta. 0:12:59.440 --> 0:13:03.160 Right, great things at Alta ed Stack. Basically you know 0:13:04.040 --> 0:13:08.319 Legacy Dix, his father founded it, Lauren Hobart. They basically 0:13:08.480 --> 0:13:11.480 reinvented what Dix was with Dick's House of Sport. You 0:13:11.600 --> 0:13:13.880 talk to every real estate landlord. What do they all 0:13:13.880 --> 0:13:15.079 want Dick's House of Sport? 0:13:15.480 --> 0:13:15.720 Why? 0:13:15.800 --> 0:13:20.000 Because it brings traffic. What's the difference between Dix and Footlocker. 0:13:20.480 --> 0:13:23.719 The customer base of Footlocker the eighteen to twenty five 0:13:23.800 --> 0:13:27.160 year old guy. The customer base at Dix could be 0:13:27.200 --> 0:13:29.880 more families. What do you get with both of it? 0:13:30.280 --> 0:13:33.120 And granted the stock is down because the certainty of 0:13:33.160 --> 0:13:36.880 the execution at Dix's, Dix alone was there and you 0:13:36.880 --> 0:13:39.920 could basically see the path of growth with House the Sport. 0:13:40.480 --> 0:13:44.200 Putting it together, there's work to be done, transformation to 0:13:44.240 --> 0:13:46.840 be done with foot Locker gives them more buying power. 0:13:47.120 --> 0:13:50.000 Let's see what Dix does because what ed Stack says 0:13:50.120 --> 0:13:52.520 is he's got the vision. He had the vision before 0:13:52.520 --> 0:13:54.240 with House of Sport. Let's see what he can do 0:13:54.280 --> 0:13:55.160 with foot locker. 0:13:55.000 --> 0:13:56.920 Just thirty seconds. Sounds like you're optimistic. This is a 0:13:56.920 --> 0:13:57.320 good deal. 0:13:57.920 --> 0:14:01.720 I think it's the valuation basically at six times and 0:14:01.800 --> 0:14:07.200 seventeen times, PE's not bad from that spectrum. What is 0:14:07.200 --> 0:14:09.920 it time length? And can you keep the focus on 0:14:09.960 --> 0:14:12.880 Dick's and Dick's House a Sport while you're integrating full 0:14:12.960 --> 0:14:14.400 lockers the question go forward? 0:14:14.760 --> 0:14:17.120 All right, Dana, appreciate you joining us from talk to retail. 0:14:17.160 --> 0:14:19.520 Not a better voice out there, Dana Telsey, founder, CEO, 0:14:19.880 --> 0:14:23.280 chief Research Officer of Telsey Advisory Group, joining us here 0:14:23.320 --> 0:14:25.080 in the Bloomberg a BusinessWeek Studio. 0:14:26.480 --> 0:14:30.600 This is the Bloomberg Business Week Daily Podcast. Listen live 0:14:30.680 --> 0:14:33.920 each weekday starting at two pm Eastern on Applecarflay, and 0:14:33.920 --> 0:14:36.960 Android Auto with the Bloomberg Business App. You can also 0:14:37.080 --> 0:14:40.720 listen live on Amazon Alexa from our flagship New York station, 0:14:41.280 --> 0:14:43.920 Just say Alexa play Bloomberg eleven thirty. 0:14:44.840 --> 0:14:48.160 All right, well, Cutter's offering of a luxury Boeing seven 0:14:48.280 --> 0:14:51.520 forty seven. President Donald Trump has set off alarm bells 0:14:51.520 --> 0:14:55.840 within the US intelligence and diplomatic community, where gifts from 0:14:55.880 --> 0:14:59.800 foreign powers have long been viewed with suspicion. Jamie terrib 0:15:00.160 --> 0:15:04.000 writes the story today. She's Bloomberg News national security reporter, 0:15:04.040 --> 0:15:07.360 and she joins us on Zoom from Washington, DC to 0:15:07.400 --> 0:15:11.360 discuss give us the latest on what is going on 0:15:11.720 --> 0:15:14.840 right now. Trump is potentially getting a plane. 0:15:15.280 --> 0:15:19.640 He has been offered a reportedly four hundred million dollar 0:15:19.800 --> 0:15:25.960 luxury jumbo jet by the Qatari government for his use, 0:15:26.040 --> 0:15:30.000 because he has been quite vocal about his frustration with 0:15:30.200 --> 0:15:33.920 Boeing for the delays in the delivery of the Air 0:15:33.960 --> 0:15:37.080 Force one jets that he has asked for during his 0:15:37.120 --> 0:15:40.920 first administration. The current Air Force one planes that he 0:15:41.080 --> 0:15:47.280 uses are decades old, and they certainly don't compare when 0:15:47.400 --> 0:15:50.680 you stand them up against, you know, the sort of 0:15:50.720 --> 0:15:56.320 the luxury furnishings, French interior designed comfort that a Katari 0:15:56.400 --> 0:16:01.400 royal family would enjoy in the air. But of the 0:16:01.560 --> 0:16:04.840 question of the gift, the question of the plane itself 0:16:05.560 --> 0:16:08.280 being used by the President of the United States has 0:16:08.400 --> 0:16:11.920 raised all kinds of concerns, whether they're legal or ethical. 0:16:12.520 --> 0:16:13.480 But I've been. 0:16:13.360 --> 0:16:17.280 Focusing a lot more on the security concerns that are 0:16:17.280 --> 0:16:21.359 inherent with accepting any kind of gift, let alone a plane. 0:16:21.640 --> 0:16:24.320 Let's talk about those security concerns. I can't stop laughing 0:16:25.520 --> 0:16:28.200 when you quoted Thad Troy, a former station chief with 0:16:28.240 --> 0:16:31.360 the CIA, who said, if we had built the plane 0:16:31.400 --> 0:16:33.480 knowing it was going to a foreign government, we would 0:16:33.520 --> 0:16:36.680 probably have bugged it. Like that's just the way it 0:16:36.720 --> 0:16:39.880 works when it comes to one country in another country, 0:16:39.880 --> 0:16:42.680 when it comes to national intelligence, when it comes to 0:16:42.720 --> 0:16:46.040 the CIA, what did you learn in your reporting about 0:16:46.240 --> 0:16:50.200 this being a national security challenge for the US. 0:16:51.240 --> 0:16:54.600 There wasn't a single person, whether they were a former 0:16:54.760 --> 0:17:01.000 three letter agency, intelligence, foreign service, international intelligence officers that 0:17:01.080 --> 0:17:04.840 I spoke to who said for sure that plane would 0:17:04.840 --> 0:17:09.200 be bogged in some fashion, whether it was by special 0:17:09.240 --> 0:17:13.760 interests from the host family or from you know, self 0:17:13.760 --> 0:17:14.600 interest within. 0:17:14.480 --> 0:17:17.359 That country, or allies or friends. 0:17:16.920 --> 0:17:21.120 Or adversaries hacking into surveillance systems. It's still it's it's 0:17:21.240 --> 0:17:25.000 very porous before it gets the word that they used 0:17:25.040 --> 0:17:28.400 a lot to me was hardened, and it gets hardened 0:17:28.400 --> 0:17:34.600 when it becomes a DoD approved aircraft. And you know, 0:17:34.960 --> 0:17:36.920 I didn't even know a lot of these things when 0:17:36.920 --> 0:17:39.440 I was working on this and talking to all these people. 0:17:39.600 --> 0:17:43.399 But the airplane itself needs to be hardened to withstand 0:17:43.440 --> 0:17:47.800 an explosion, It needs to be able to continue, it 0:17:47.840 --> 0:17:50.520 needs to be able to fuel air to air, It 0:17:50.920 --> 0:17:54.240 has a surgical center. It's basically a flying White House, 0:17:54.320 --> 0:17:56.320 complete with a situation room. 0:17:56.440 --> 0:17:58.080 So the first. 0:17:58.040 --> 0:18:01.800 The idea of having something like that at being given 0:18:01.960 --> 0:18:07.240 to the US by a foreign government and not doing 0:18:07.520 --> 0:18:11.919 all kinds of security sweeps to establish that it's clean 0:18:12.000 --> 0:18:14.800 and it's fine, and then going in and fortifying it, 0:18:15.080 --> 0:18:20.320 weaponizing it and getting it ready for the president, it's 0:18:20.920 --> 0:18:24.200 it just seems I was told it would take months, 0:18:24.240 --> 0:18:29.080 if not years to accomplish everything to everyone's satisfaction. So 0:18:30.480 --> 0:18:33.359 I don't know if those security concerns will make a 0:18:33.400 --> 0:18:36.439 difference or not, but that was definitely something that the 0:18:36.440 --> 0:18:39.400 people that I speak to that was immediately where their 0:18:39.440 --> 0:18:39.960 minds went. 0:18:40.760 --> 0:18:43.840 So in terms of the security concerns, and we talk 0:18:43.880 --> 0:18:50.080 about potentially bugging spy, where are there any other concerns 0:18:50.280 --> 0:18:54.520 like tech like tech related security concerns that come about 0:18:54.600 --> 0:18:59.919 with a foreign party giving the US a plane. 0:18:59.520 --> 0:19:03.399 The technical concerns that I I mean, there were people 0:19:03.400 --> 0:19:05.760 who were talking to me who said they didn't want 0:19:05.840 --> 0:19:08.879 to say what they were thinking because they didn't want 0:19:08.920 --> 0:19:13.680 to give any one idea. Well, you know, I mean 0:19:13.720 --> 0:19:17.280 installing a kill switch, you know, playing with the mechanism. 0:19:17.760 --> 0:19:20.199 That is some seriously scary stuff. I thought you were 0:19:20.200 --> 0:19:22.359 going to be talking about, like, you know, a microphone 0:19:22.400 --> 0:19:25.120 hidden behind the wall of the plane or something. I mean, 0:19:25.119 --> 0:19:26.959 that is some seriously scary stuff. 0:19:27.359 --> 0:19:30.760 I spoke to someone who was living across the road 0:19:30.880 --> 0:19:33.840 from the US embassy in Moscow during the Cold War, 0:19:33.960 --> 0:19:37.920 and he said that the listening devices were inside the concrete, 0:19:37.960 --> 0:19:42.800 in the bricks. So the idea of wiring and behind 0:19:42.800 --> 0:19:45.960 the molding and all these beautiful furnishings is not out 0:19:46.000 --> 0:19:46.240 of the. 0:19:46.200 --> 0:19:47.320 Realm of possibility. 0:19:47.760 --> 0:19:49.520 So you know, I mean, you just have to have 0:19:49.560 --> 0:19:53.920 an imagination and you can imagine how creative you can 0:19:53.960 --> 0:19:56.760 be with what you install. And where there could be 0:19:56.840 --> 0:20:00.639 cameras inside, there could be a loaf case tracker that 0:20:00.720 --> 0:20:03.520 will tell you exactly where the president is at any time. 0:20:03.880 --> 0:20:06.159 So these are all things that not only like in 0:20:06.359 --> 0:20:11.600 danger he's saved in security, but also could give anyone 0:20:11.960 --> 0:20:15.280 intelligence on the sort of communications and conversations that he 0:20:15.359 --> 0:20:18.240 might be having with people. On the plane with him 0:20:18.320 --> 0:20:20.280 or with people you know elsewhere. 0:20:21.000 --> 0:20:26.480 This is remarkable. Well yeah, yeah, you actually really have. 0:20:26.560 --> 0:20:28.800 But what you also point out in your piece the 0:20:29.240 --> 0:20:33.359 criticism that the president has gotten from people who've been 0:20:33.359 --> 0:20:36.480 allied with him, including Ben Shapiro, Laura Lumer, and others. 0:20:37.240 --> 0:20:40.080 But he's kind of holding firm, at least with his 0:20:40.119 --> 0:20:42.399 public comments that this is the type of gift he 0:20:42.440 --> 0:20:43.440 would accept. 0:20:44.119 --> 0:20:47.680 Well, it's become a poison chalice in a way, because 0:20:49.040 --> 0:20:52.520 you know, it is it is a tremendous honor that 0:20:52.600 --> 0:20:55.000