WEBVTT - Lilly Falls as Weight-Loss Pill Data Overshadows Sales Beat 0:00:02.720 --> 0:00:10.600 Bloomberg Audio Studios, Podcasts, radio news. You're listening to the 0:00:10.600 --> 0:00:14.600 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:18.560 Eastern on Applecarclay, and Android Auto with the Bloomberg Business App. 0:00:18.640 --> 0:00:21.920 Listen on demand wherever you get your podcasts, or watch 0:00:21.960 --> 0:00:23.120 us live on YouTube. 0:00:23.760 --> 0:00:25.520 Eli Lilly, it. 0:00:25.560 --> 0:00:28.240 Had a salespaper. Shares are taken ahead, Yeah, Lily shares 0:00:28.240 --> 0:00:31.720 it down about fourteen percent. There is something overshadowing that. 0:00:31.840 --> 0:00:33.919 For that, we're going to bring in Damien Gardett's Bloomberg 0:00:33.960 --> 0:00:36.960 News health reporter. Damian, thanks for joining us here in 0:00:37.000 --> 0:00:41.199 the studio. So it looks like this experiment, this drug experiment, 0:00:41.240 --> 0:00:43.600 the weight loss pill, and that's the thing here. It 0:00:43.640 --> 0:00:46.640 didn't do as well in the study as Wall Street had. 0:00:46.560 --> 0:00:50.120 Expected exactly so it met its goals and it helped 0:00:50.120 --> 0:00:51.680 people lose weight, which was the whole point of it. 0:00:51.680 --> 0:00:54.960 This was enrolling people with obesity, but that weight loss 0:00:55.000 --> 0:00:58.520 was about eleven percent of body weight, and Wall Street 0:00:58.560 --> 0:01:01.040 was hoping to see something more kin to fourteen to 0:01:01.080 --> 0:01:04.720 fifteen percent, which would match what's seen with the injectible 0:01:05.000 --> 0:01:07.960 GLP one weight loss medicines like with GOVI from rival 0:01:08.000 --> 0:01:11.320 Novo Nordisk. So despite the trial being a success, and 0:01:11.360 --> 0:01:14.360 despite this pill seemingly on the path to winning FDA 0:01:14.400 --> 0:01:16.800 approval and hitting the market as early as next year, 0:01:17.240 --> 0:01:22.600 the reaction, as you mentioned, was dramatically negative formulaly because these, 0:01:22.680 --> 0:01:25.640 you know, single digit percentage differences are perceived to be 0:01:25.959 --> 0:01:29.479 massively important to the ultimate financial future. It's medicine. 0:01:29.720 --> 0:01:32.399 Here's the thing for me knowing someone that does this 0:01:32.480 --> 0:01:37.319 GLP one thing, whatever it is. You gotta reduce the 0:01:37.319 --> 0:01:40.200 side effects of the nausea, and this one didn't. And 0:01:40.240 --> 0:01:43.319 that was the I know people that use it and 0:01:43.400 --> 0:01:45.720 use the injection or saying, boy, when the oral one 0:01:45.760 --> 0:01:49.160 comes out, I'm told that the side effects will be 0:01:49.400 --> 0:01:52.720 dramatically less, which is a huge selling point, and I 0:01:52.720 --> 0:01:54.040 guess that's not what they saw here. 0:01:54.120 --> 0:01:57.680 Basically, in this study, they saw gastro intestinal side effects 0:01:57.680 --> 0:02:00.280 that were comparable to the injectible one, which your point 0:02:00.400 --> 0:02:02.360 could be viewed as a negative. There was a I 0:02:02.400 --> 0:02:05.120 think there was a home run scenario where Lily's pill 0:02:05.160 --> 0:02:07.680 would both lead to a greater percentage of body weight 0:02:07.760 --> 0:02:11.200 loss and as you mentioned, have fewer of the nausea 0:02:11.720 --> 0:02:12.520 vomiting field. 0:02:12.560 --> 0:02:15.760 Plus that were we being the pharmaceutical biotech, and we're 0:02:15.760 --> 0:02:20.000 in the early innings of this GLP type obesity thing. 0:02:20.760 --> 0:02:22.320 I can't imagine why it's not going to get better 0:02:22.360 --> 0:02:24.880 and better and better and better, or I don't know 0:02:24.880 --> 0:02:27.000 the science. Maybe we're already at that limit. We are 0:02:27.080 --> 0:02:29.480 at the limit of this whatever this thing is. 0:02:29.639 --> 0:02:31.239 I don't think so. I mean, in granted, you know 0:02:31.280 --> 0:02:34.680 clinical trials need to play out. Science biology famously unpredictable, 0:02:34.880 --> 0:02:37.240 but I would say the space is moving in two directions. 0:02:37.280 --> 0:02:40.480 One combination medicines that add GLP one to other things 0:02:40.480 --> 0:02:42.560 that can lead to more dramatic weight loss, and then 0:02:42.639 --> 0:02:45.600 two more convenient things like pills that you can take 0:02:45.639 --> 0:02:48.120 that maybe don't have the same effect on body weight, 0:02:48.200 --> 0:02:50.680 but that would be cheaper to manufacture, presumably cheaper to 0:02:50.800 --> 0:02:54.040 acquire for patients because these injectables have list prices of 0:02:54.120 --> 0:02:57.200 inexcess of one thousand dollars a month. So in the 0:02:57.240 --> 0:02:59.560 best case scenario, let's say five years from now, there 0:02:59.560 --> 0:03:02.880 will be an armamentarium of weight loss medicines. If you 0:03:03.240 --> 0:03:05.799 an armamentarium, which I think I stumbled over a whole 0:03:05.800 --> 0:03:08.440 bunch of them, like in an armory. Let's say so 0:03:08.480 --> 0:03:11.440 a physician yes, a physician, could you know, diagnose a 0:03:11.480 --> 0:03:14.080 patient and say, for some people you will need an 0:03:14.080 --> 0:03:16.240 injectable that you can lose twenty five percent of your 0:03:16.240 --> 0:03:18.359 body weight on. For some people you may be good 0:03:18.360 --> 0:03:20.840 with an oral medicine where you lose a single digit 0:03:20.960 --> 0:03:23.280 or even ten percent of your body weight, or mixing 0:03:23.360 --> 0:03:26.680 and matching using one for maintenance and the upside being 0:03:26.960 --> 0:03:29.919 theoretically this will one become a massive one hundred billion 0:03:29.960 --> 0:03:32.760 dollar market for the pharmaceutical industry, but two have knock 0:03:32.800 --> 0:03:34.480 on beneficial effects for people's health. 0:03:34.680 --> 0:03:36.560 So where do we stand with the pills? I mean, 0:03:36.600 --> 0:03:39.360 what other competition is out there? Who else is working 0:03:39.400 --> 0:03:40.960 on one that we should keep an eye on as well. 0:03:41.200 --> 0:03:44.680 So Novo Nordisk has an oral version of the injectable 0:03:44.720 --> 0:03:49.040 week govy. It is not as convenient or I would 0:03:49.040 --> 0:03:51.920 say innovative frankly, as Lily's pill, because it's basically just 0:03:52.040 --> 0:03:55.080 a bunch of wgovy shoved into a tablet that you 0:03:55.160 --> 0:03:57.880 eat and it sits in your gut and administers the 0:03:57.920 --> 0:04:00.520 drug there. And that it comes with restriction. You can't 0:04:00.520 --> 0:04:01.680 take it with food, you have to do it in 0:04:01.680 --> 0:04:04.800 the morning. It's not really as attractive a commercial product, 0:04:04.840 --> 0:04:07.000 I think it's fair to say as Lilies, but there 0:04:07.000 --> 0:04:11.440 are other oral options from smaller biotech companies that we 0:04:11.560 --> 0:04:14.080 may see them progress to the market. There's also a 0:04:14.120 --> 0:04:16.479 lot of m and a speculation around these firms that 0:04:16.520 --> 0:04:19.440 a company like Pfizer, for example, which kind of crashed 0:04:19.440 --> 0:04:21.159 and burned with its first attempt to make a GLP 0:04:21.240 --> 0:04:24.160 one pill, might acquire them. So this is very much 0:04:24.200 --> 0:04:26.040 a space to watch. I would say a year from now, 0:04:26.080 --> 0:04:28.880 it's quite likely that it will look demonstrably different than 0:04:28.920 --> 0:04:29.640 it looks right now. 0:04:29.760 --> 0:04:32.480 So as I look at the PGeo table, which kind 0:04:32.480 --> 0:04:36.320 of breaks down where the revenue comes from Lily, where 0:04:36.480 --> 0:04:39.679 is the cardio metabolic health is at the sector again, 0:04:39.760 --> 0:04:43.159 now that's that sector is sixty five percent of total revenue. 0:04:43.400 --> 0:04:46.120 So that's a big deal for Lily. 0:04:45.960 --> 0:04:48.200 And that's not inclusive of this oral drug which isn't 0:04:48.200 --> 0:04:50.400 even approved yet. So I mean, as you mentioned these 0:04:50.480 --> 0:04:53.719 data overshadowing, Lily had like a blowout quarter. They're approved 0:04:53.760 --> 0:04:57.320 medicine for obesity and the same thing is sold for diabetes. 0:04:57.320 --> 0:05:00.080 Both of them beat estimates, they raised revenue guide and 0:05:00.400 --> 0:05:03.520 profit guidance. They're doing very very well, but I think 0:05:03.720 --> 0:05:05.680 the stock reaction today is sort of an illustration of 0:05:05.720 --> 0:05:08.960 just how much is baked into the potential of these medicines. 0:05:09.000 --> 0:05:12.320 Lily has flirted with being a trillion dollar valuation company. 0:05:12.320 --> 0:05:15.560 They're not there anymore, but that's strictly a reflection of 0:05:15.600 --> 0:05:18.320 what people believe will come of this class of medicine. 0:05:18.360 --> 0:05:20.360 So, speaking of the potential, then, so why is the 0:05:20.400 --> 0:05:23.600 science behind these pills? Why is it such a challenge. 0:05:24.480 --> 0:05:28.719 I mean, getting what you can do in an injectable medicine, 0:05:28.760 --> 0:05:31.720 getting that down into a pill has been deviled the 0:05:31.760 --> 0:05:35.360 drug industry for many, many years because there are safety concerns, 0:05:35.400 --> 0:05:38.760 there are dosing concerns. The ideal product is like a 0:05:38.760 --> 0:05:41.680 superpill that prolongs your life and et cetera. But there's 0:05:41.720 --> 0:05:44.320 a reason we have so few of those, and it's 0:05:44.360 --> 0:05:47.599 basically just the trial and error and the unpredictability of biology. 0:05:48.240 --> 0:05:50.159 And I think these companies are always trying to bend 0:05:50.160 --> 0:05:52.200 the curves of failures. But like it remains true that 0:05:52.279 --> 0:05:55.279 roughly one in ten medicines actually makes it from the 0:05:55.400 --> 0:05:57.599 lab to the pharmacy. 0:05:57.720 --> 0:06:03.120 My freshman year college chemistry lab partner went on to 0:06:03.160 --> 0:06:08.080 become like this crazy smart dude played a wide receiver 0:06:08.120 --> 0:06:13.200 in the NFL. Then he became a signist an astronaut 0:06:13.720 --> 0:06:16.960 space shuttle crazy and I was like, I was like, dude, 0:06:17.000 --> 0:06:19.440 can you carry me in this chemistry classic because I'm 0:06:19.440 --> 0:06:22.039 not really into it? And he was super smart. So 0:06:23.080 --> 0:06:24.839 and then that he didn't peak there, he didn't He 0:06:24.839 --> 0:06:26.599 didn't peak in the NFL. I guess he peaked the 0:06:26.800 --> 0:06:27.760 flying around in space. 0:06:27.960 --> 0:06:28.360 So good. 0:06:28.360 --> 0:06:31.080 There. What's the next thing that you're looking for in 0:06:31.080 --> 0:06:33.880 a pharmer's space here? What's the next big mover here 0:06:34.000 --> 0:06:35.880 on a company level that you're looking. 0:06:35.680 --> 0:06:39.440 At for weight loss specifically or just more broadly. 0:06:39.600 --> 0:06:41.000 Yeah, I think everything. 0:06:41.040 --> 0:06:44.200 Actually MRK is working on. Speaking of pills, they're working 0:06:44.200 --> 0:06:47.599 on a pill version that would be basically a superstat 0:06:47.720 --> 0:06:51.840 It would lower bad cholesterol to a level that cannot 0:06:51.880 --> 0:06:54.960 be done with oral medicines that exists right now, and 0:06:55.000 --> 0:06:58.000 that it kind of follows this same trajectory that I 0:06:58.000 --> 0:07:01.680 think we're seeing big pharma company years ago after statinshe 0:07:01.760 --> 0:07:04.640 generic kind of moved away from primary care medicines because 0:07:04.640 --> 0:07:06.640 it's difficult, you have to run big trials, it's expensive. 0:07:06.680 --> 0:07:08.680 If they fail, you lose a lot of money. And 0:07:08.760 --> 0:07:11.280 move toward oncology and rare diseases. I feel like we're 0:07:11.320 --> 0:07:13.240 seeing and I think GLP one was sort of the 0:07:13.360 --> 0:07:15.800 trojan horse in some ways of this. We're seeing the 0:07:15.800 --> 0:07:18.160 major drug companies move back toward primary care, trying to 0:07:18.200 --> 0:07:20.520 invent medicines that would be taken by millions of people 0:07:20.560 --> 0:07:22.640 and they would actually address the number one killer of Americans, 0:07:22.640 --> 0:07:24.720 which is heart disease. So I think that's a trend 0:07:24.720 --> 0:07:26.800 that I'm following, and we'll get data from that murk pill, 0:07:26.840 --> 0:07:27.960 I believe by the end of the year. 0:07:28.040 --> 0:07:30.240 All Right, I mean you and Sam Fizzelli, you guys, 0:07:30.280 --> 0:07:31.880 do whatever you do in that healthcare thing. Just tell 0:07:31.960 --> 0:07:34.800 us when something important is happening. Damien Gardelli, a healthcare 0:07:34.840 --> 0:07:36.920 reporter for Bloomberg News, joinings life here in our Bloomberg 0:07:36.960 --> 0:07:39.880 Interactive Broker studio. You know, back in my trading days, man, 0:07:40.120 --> 0:07:43.200 I'd go to my healthcare guy, I say, hey, can 0:07:43.240 --> 0:07:46.160 I buy Lily today? It's down fifteen percent. I mean, 0:07:46.880 --> 0:07:49.760 it feels like an entry point to me, and hopefully 0:07:49.760 --> 0:07:51.760 Mianas will have a good idea what's going on space. 0:07:51.800 --> 0:07:53.400 I mean, you hear the GLP ones are supposed to 0:07:53.520 --> 0:07:55.800 lower cholesterol, but then you have other He was just 0:07:55.800 --> 0:07:57.800 talking about another cholesterol, yes, and coming out. 0:07:57.840 --> 0:08:01.360 But I mean these GLP things have been I see 0:08:01.400 --> 0:08:03.120 a new story every day. How they help this, they 0:08:03.280 --> 0:08:05.600 cure this, they lowered the risk of this. It's not 0:08:05.720 --> 0:08:09.240 just so I don't know what's going. Healthcare space is 0:08:09.280 --> 0:08:12.960 a tough, tough one to invest in. I think that's 0:08:12.960 --> 0:08:16.360 why there's mds and PhDs all over the place in 0:08:17.120 --> 0:08:18.840 investment firms investing in that space. 0:08:20.600 --> 0:08:24.280 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:08:24.360 --> 0:08:27.760 weekdays at ten am Eastern on Applecarplay and Android Auto 0:08:27.840 --> 0:08:30.920 with the Bloomberg Business App. Listen on demand wherever you 0:08:30.960 --> 0:08:33.920 get your podcasts, or watch us live on YouTube. 0:08:34.280 --> 0:08:35.800 Almost the last time you went to a movie at 0:08:35.800 --> 0:08:37.559 a movie theater, oh, it was a. 0:08:37.480 --> 0:08:38.959 Tough We were supposed to go to the other weekend 0:08:39.000 --> 0:08:42.720 and see like Superman, but that didn't happen. I watch 0:08:42.760 --> 0:08:45.280 a lot of them, like I stream them, like for example, Minecraft, 0:08:45.320 --> 0:08:46.959 like I saw at home and then I didn't go 0:08:47.000 --> 0:08:49.320 to the theater to see it. Right, that's what like 0:08:49.320 --> 0:08:50.360 Warner Brothers is dealing. 0:08:50.600 --> 0:08:53.240 Yeah, exactly right, So but I'm Warner Brothers Discovery they 0:08:53.240 --> 0:08:56.680 put out results. I don't know. I mean, my expectations 0:08:56.720 --> 0:08:59.200 are really low for this company, but they I thought 0:08:59.200 --> 0:09:01.480 they were pretty decent stocks. Trading off a little bit here, 0:09:02.000 --> 0:09:04.040 let's get the latest on what's happening at One Brother's 0:09:04.080 --> 0:09:06.440 Discovery and even maybe a little bit on our friends 0:09:06.480 --> 0:09:09.920 at Peloton. Jen Sherman's my buddy there. She's a person 0:09:09.960 --> 0:09:11.959 I drink with. Of course, either wrong anah in us. 0:09:12.160 --> 0:09:13.640 I'm not gonna do it with some dude. I mean, 0:09:13.679 --> 0:09:15.520 you know, why would you do that. She's your friend 0:09:15.520 --> 0:09:18.920 in your head exactly exactly where friends so githerrang and nothing. 0:09:18.960 --> 0:09:21.720 She actually is the analyst on all this media stuff. 0:09:21.920 --> 0:09:26.160 She's down there in our Princeton University sprawling campus. Hey, Gaeta, 0:09:26.160 --> 0:09:28.440 talk to us about Warner Brothers Discovery, because there are 0:09:28.480 --> 0:09:30.319 like a lot of traditional media comedies trying to make 0:09:30.320 --> 0:09:34.240 that transition from the good old days of linear television, 0:09:34.400 --> 0:09:37.480 cable television, all that kind of stuff to the streaming world. 0:09:37.600 --> 0:09:39.320 What did you learn from Warner Brother's Discovery. 0:09:40.600 --> 0:09:42.960 Yeah, so, Paul, what we really saw was, you know, 0:09:43.000 --> 0:09:45.640 a continuation of the same. So the streaming business is 0:09:45.679 --> 0:09:48.439 doing really well. The studio business is doing extremely well. 0:09:49.120 --> 0:09:52.600 But TV Networks, which is really eighty percent off their ibadah, 0:09:53.040 --> 0:09:55.520 is still struggling, and we saw a twenty five percent 0:09:55.840 --> 0:10:00.200 slump in their TV Networks ibadah. So you know, that 0:10:00.240 --> 0:10:02.480 continues to be a pain point. And while there was 0:10:02.520 --> 0:10:07.040 initially some you know, obviously some excitement about the turnaround 0:10:07.120 --> 0:10:10.000 and both the streaming and the studio businesses, the fact 0:10:10.000 --> 0:10:14.120 that there is absolutely no respite inside for TV is 0:10:14.160 --> 0:10:15.840 extremely distressing and that's. 0:10:15.679 --> 0:10:18.560 Why their shares are down like seven percent. Okay, So 0:10:18.880 --> 0:10:21.040 talk to me about the companies in the process of 0:10:21.080 --> 0:10:24.320 splitting itself into two separate entities, right, So where do 0:10:24.400 --> 0:10:26.959 we stand with that? What are the pros and cons 0:10:26.960 --> 0:10:27.680 that go along with that? 0:10:28.760 --> 0:10:30.559 Yeah, so this is you know, one of the best 0:10:30.559 --> 0:10:34.040 ways for them, or at least you know, the fact 0:10:34.080 --> 0:10:36.920 that they've kind of decided to do this really follows 0:10:36.920 --> 0:10:39.400 a pattern in most of the media landscape where they're selling. 0:10:39.720 --> 0:10:42.199 They're kind of separating the low growth assets from the 0:10:42.240 --> 0:10:44.200 slightly higher growth assets. The low growth or the low 0:10:44.240 --> 0:10:48.880 growth assets being the TV business. That for Warner Brothers, 0:10:48.920 --> 0:10:51.800 that split will happen in the middle of next year, 0:10:52.840 --> 0:10:56.080 and really the strategy here is to unlock shareholder value 0:10:56.080 --> 0:10:58.280 because you know that, you know, they combine their Warner 0:10:58.280 --> 0:11:03.000 Brothers business with a Discovery you know networks. Of course 0:11:03.040 --> 0:11:07.280 that really hasn't gone anywhere. And so finally everybody in 0:11:07.320 --> 0:11:09.360 the in the in the media world is doing this 0:11:09.440 --> 0:11:12.880 where they're kind of separating out the secularly challenged TV networks. 0:11:13.320 --> 0:11:13.440 Uh. 0:11:13.960 --> 0:11:16.160 The only problem here is that we still really don't 0:11:16.200 --> 0:11:18.760 have a very clear strategy. So they have to really 0:11:18.760 --> 0:11:20.719 outline that, and I think that is part of the 0:11:20.760 --> 0:11:23.760 reason why we're also kind of seeing this the decline 0:11:23.800 --> 0:11:24.640 and shares this morning. 0:11:25.400 --> 0:11:28.920 All Right, they had the studio had a good quarter here, 0:11:29.640 --> 0:11:33.120 a couple in some some hits like Sinners, a Minecraft movie, 0:11:33.200 --> 0:11:35.720 Final Destination, Bloodlines and things like that. Talk to us 0:11:35.720 --> 0:11:39.320 about the studio and maybe it's kind of it's forward slate. 0:11:39.640 --> 0:11:40.760 How does that look for the company? 0:11:41.600 --> 0:11:43.560 The forward say it, Actually, it looks really good, Paul. 0:11:43.920 --> 0:11:48.320 You know, they just had their major DC reboot with Superman. Uh, 0:11:48.520 --> 0:11:51.160 and they're what they're really trying to do now going forward. 0:11:51.200 --> 0:11:53.600 I mean, they didn't have a Superman movie for years. 0:11:53.640 --> 0:11:55.880 Their DC strategy was in a mess. You know, it 0:11:55.920 --> 0:11:58.760 was a mess. They had so many movies out there, 0:11:58.800 --> 0:12:02.000 it was all confusing lines. But I think finally they've 0:12:02.080 --> 0:12:04.320 kind of they're going to write that ship. So they've 0:12:04.320 --> 0:12:07.640 committed to a pretty strong slate of about twelve to 0:12:07.679 --> 0:12:12.080 fourteen movies going forward. The big thing for them is 0:12:12.120 --> 0:12:15.440 to really get Studio EBITDA to about three billion dollars, 0:12:15.440 --> 0:12:17.080 and they seem to be well on their way. I mean, 0:12:17.160 --> 0:12:20.840 last year was a complete mess. This year definitely much 0:12:20.920 --> 0:12:23.000 much better. They're actually if you just look at box 0:12:23.000 --> 0:12:26.560 office performance overall, they already have about a twenty five 0:12:26.640 --> 0:12:29.040 twenty six percent share of the domestic box office, so 0:12:29.080 --> 0:12:32.000 they're only very slightly behind Disney. So they're definitely doing 0:12:32.000 --> 0:12:34.880 well and their strategy is working. They have a pretty 0:12:34.880 --> 0:12:36.000 good content pipeline. 0:12:36.080 --> 0:12:38.640 All right, let's switch over at Peloton. How is this 0:12:38.720 --> 0:12:41.880 company doing? I mean, is there subscribers? Are they continuing 0:12:41.880 --> 0:12:44.840 to come in? Are people still using this equipment as 0:12:44.920 --> 0:12:46.200 much as they used to? 0:12:47.720 --> 0:12:51.400 So for Peloton, really and the story has not been 0:12:51.440 --> 0:12:54.680 so much on subscribers, unfortunately. It has really been more 0:12:54.800 --> 0:12:59.080 about trimming the fat literally at the company and kind 0:12:59.120 --> 0:13:01.400 of getting profits into full focus. And if you just 0:13:01.440 --> 0:13:03.960 saw this quarter's results and what they reported for the 0:13:03.960 --> 0:13:06.360 full year. For fiscal twenty twenty five, I mean, the 0:13:07.520 --> 0:13:10.000 progress that they've made in terms of profitability has been 0:13:10.040 --> 0:13:14.640 absolutely outstanding. So they reported adjusted IBADAH that came in 0:13:14.679 --> 0:13:19.240 about nineteen twenty percent higher than guidance and consensus their 0:13:19.840 --> 0:13:23.200 forward guidance, So fiscal twenty twenty six suggested EBITDA guidance 0:13:23.280 --> 0:13:26.200 is also was also way above consensus. So the way 0:13:26.200 --> 0:13:29.640 that they're kind of optimizing their operating expenses has been 0:13:29.679 --> 0:13:33.880 absolutely stellar. You know, just everything in terms of workforce reduction, 0:13:33.960 --> 0:13:37.600 in terms of inventory management, you know, op X costs, 0:13:37.640 --> 0:13:41.800 marketing expenses, everything has been absolutely top notch. The only 0:13:41.880 --> 0:13:45.600 problem for them is reintegrating demand. And that's where you know, 0:13:45.640 --> 0:13:48.280 we're kind of really kind of seeing this disconnect because 0:13:48.360 --> 0:13:52.040 the financial metrics are really good, but the subscriber metrics, 0:13:52.120 --> 0:13:53.320 unfortunately are not. 0:13:54.120 --> 0:13:57.079 Is there a credible plan there to reignite growth there? 0:13:58.679 --> 0:14:01.120 I just kind of it feels like, you know, everybody 0:14:01.160 --> 0:14:05.240 who's got one's got one. How did they think talk 0:14:05.240 --> 0:14:06.280 about that part of the story. 0:14:07.080 --> 0:14:09.760 Yeah, so it's really going to be a little bit hard. 0:14:10.120 --> 0:14:11.719 I mean, yeah, on the margin, I think they can 0:14:11.760 --> 0:14:14.160 do some things to kind of reignite a little bit 0:14:14.160 --> 0:14:16.920 of the hardware sales, but in terms of a sustainable 0:14:17.000 --> 0:14:20.600 go forward strategy that is really still pretty unclear. Paul, So, 0:14:20.640 --> 0:14:22.680 I think right now, what they're really trying to do 0:14:22.800 --> 0:14:26.120 is again really get you know, more costs out of 0:14:26.160 --> 0:14:30.600 the system, maybe increase subscription prices a little bit, so 0:14:30.760 --> 0:14:33.200 kind of pad that top line a little bit. But 0:14:33.240 --> 0:14:36.080 in terms of you know, the overall subscription growth story, 0:14:36.960 --> 0:14:38.960 I'm not so sure that's really going to be a 0:14:39.040 --> 0:14:41.760 volume story. I think it's it's going to you know, 0:14:42.160 --> 0:14:45.400 focus more on kind of rates and price and improving 0:14:45.440 --> 0:14:46.920 pricing and either how much. 0:14:46.760 --> 0:14:49.280 Of that, you know, cutting costs includes cutting jobs. 0:14:50.320 --> 0:14:53.400 Yeah, they did actually you know, announce a six percent 0:14:53.560 --> 0:14:56.200 workforce reduction as well, so a lot of it is 0:14:56.240 --> 0:14:57.680 going to come down to cutting jobs. 0:14:58.040 --> 0:15:01.240 All right, Just one quick thing on Warner Brothers Discovery. 0:15:01.280 --> 0:15:04.440 What's the timing of this separation it's. 0:15:04.280 --> 0:15:07.640 Going to So they announced the formal plan in June. 0:15:07.800 --> 0:15:10.760 It's going to happen by Midge twenty twenty six, so 0:15:10.800 --> 0:15:11.800 by middle of next year. 0:15:12.200 --> 0:15:14.040 Okay, all right, we'll keep an eye on that. Gith 0:15:14.040 --> 0:15:16.040 Throng and at and she covers all the media stuff 0:15:17.000 --> 0:15:20.120 for Bloomberg intelligence down there for them to display. 0:15:20.120 --> 0:15:21.440 I mean, you see Comcasts do it right. 0:15:21.560 --> 0:15:25.120 Yeah, I think it is simply because you hope that 0:15:25.120 --> 0:15:28.880 the two parts have more total value than they do together, 0:15:29.320 --> 0:15:32.800 and so you're concerned that the high growth business is 0:15:32.840 --> 0:15:36.640 being pulled down by the slower growth cable networks. So 0:15:36.680 --> 0:15:39.320 you split them out and see how far this, you know, 0:15:39.440 --> 0:15:42.760 the streaming business in the studio can fly, I guess 0:15:42.880 --> 0:15:44.560 is kind of the thought there. So we see it 0:15:44.560 --> 0:15:47.720 all the time and lots of different industries, and there 0:15:47.800 --> 0:15:49.840 was a time, you know, when all these assets made 0:15:50.280 --> 0:15:53.360 sense to be together. But the fortunes, the economic fortunes 0:15:53.360 --> 0:15:56.200 of the cable network and broadcast network business have been 0:15:56.240 --> 0:16:01.480 permanently damaged, and it gets worse every year. So you know, 0:16:01.520 --> 0:16:03.560 you just got to cut those out and see how 0:16:03.560 --> 0:16:06.520 they trade on a standalone basis. Maybe ultimately they get acquired, 0:16:07.000 --> 0:16:09.880 or maybe some of these networks maybe get together the 0:16:09.920 --> 0:16:12.880 Comcast stuff. Maybe we'll get together with the Warner brother 0:16:12.920 --> 0:16:15.120 stuff and just become bigger and get some cross energy. 0:16:15.160 --> 0:16:17.240 So we'll see how that plays out. But we're seeing 0:16:17.280 --> 0:16:18.480 that across the media space. 0:16:18.520 --> 0:16:20.000 Here. 0:16:20.640 --> 0:16:24.320 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:16:24.400 --> 0:16:27.800 weekdays at ten am Eastern on Applecarclay, and Android Auto 0:16:27.920 --> 0:16:30.960 with the Bloomberg Business app. Listen on demand wherever you 0:16:31.000 --> 0:16:34.000 get your podcasts, or watch us live on YouTube. 0:16:34.480 --> 0:16:39.320 Intel coming into the crosshairs of President Trump day, particularly 0:16:39.320 --> 0:16:41.840 the CEO saying he's got to go. I mean, I 0:16:41.880 --> 0:16:46.000 have no idea where that came from. I'm guessing Man 0:16:46.080 --> 0:16:48.280 Deep Sing is read up on this. If nothing else, 0:16:48.360 --> 0:16:52.200 Man Deep seeing senior tech analyst from Bloomberg Intelligence, President 0:16:52.240 --> 0:16:55.520 Trump calling for this CEO of Intel to quit not 0:16:55.760 --> 0:16:58.280 He says he's conflicted. Can you give us the backstory 0:16:58.320 --> 0:16:59.640 what's going on here? As far as you know? 0:17:00.480 --> 0:17:04.080 I mean, most likely it has to do with the 0:17:04.119 --> 0:17:10.320 minority investments that the Intel CEO has in companies within China, 0:17:10.560 --> 0:17:15.080 and they may have some ties to the Chinese government 0:17:15.119 --> 0:17:17.600 in some way. And look, he used to be a VC, 0:17:17.960 --> 0:17:23.359 so this guy has had multiple roles. He used to 0:17:23.359 --> 0:17:26.200 be the CEO of Cadence, then he was a VC 0:17:27.119 --> 0:17:31.240 with you know, multiple investments in startups across the globe. 0:17:31.359 --> 0:17:36.359 So I'm guessing the board Intel board before they appointed 0:17:36.720 --> 0:17:39.399 him as the CEO, did their due diligence in terms 0:17:39.440 --> 0:17:43.080 of looking at all these aspects, and to my mind, 0:17:43.960 --> 0:17:47.719 I mean, it obviously is a surprise that, you know, 0:17:49.040 --> 0:17:51.760 I mean, his credentials are being questioned here given the 0:17:51.840 --> 0:17:53.560 reputation he has in the valley. 0:17:54.520 --> 0:18:00.720 Is the American citizen I'm not sure, probably, but I mean, 0:18:01.040 --> 0:18:03.320 those are the type of things he would expect the 0:18:03.359 --> 0:18:05.199 board to do their due diligence on. 0:18:05.280 --> 0:18:09.560 For a company like Intel, which has had multiple CEOs 0:18:09.600 --> 0:18:13.479 and clearly is looking for a big turnaround, A lot 0:18:13.560 --> 0:18:16.760 of people felt this guy had the credentials, you know, 0:18:16.840 --> 0:18:19.399 in terms of having the experience to turn around a 0:18:19.400 --> 0:18:23.320 big ship like Intel. And I mean, so far, it's 0:18:23.320 --> 0:18:25.520 too early to call out how good of a job 0:18:25.640 --> 0:18:29.359 he was doing. Still early days with his strategy, but 0:18:29.560 --> 0:18:34.320 clearly he has plans to keep the foundry business and 0:18:34.440 --> 0:18:38.520 turn around the core chip design business, and he has 0:18:39.080 --> 0:18:42.760 raised a lot of cash. So I would say still 0:18:42.800 --> 0:18:47.159 early days with his strategy. But this clearly puts, you know, 0:18:47.280 --> 0:18:50.160 a wrench in terms of his strategy. 0:18:50.320 --> 0:18:54.320 Just as per Wiki Wikipedia, it says that he is 0:18:54.359 --> 0:18:58.400 a Malaysian born American business executive. So that's all I got. 0:18:58.880 --> 0:19:01.679 Well, something you brought up that they probably you know, 0:19:01.760 --> 0:19:04.840 people already knew about this. You know, this is no secret. 0:19:05.600 --> 0:19:08.439 My question is why now? Why bring this up? 0:19:08.440 --> 0:19:08.600 Now? 0:19:08.640 --> 0:19:11.000 Why the timing now? And the company has been struggling, right, 0:19:11.040 --> 0:19:13.600 it's chairs now or down what they're down three percent 0:19:13.640 --> 0:19:16.040 this morning? But why do you think this has taking 0:19:16.040 --> 0:19:16.560 place now? 0:19:17.240 --> 0:19:20.919 I think it's because Senator Tom Cotton, he wrote a 0:19:21.000 --> 0:19:25.040 letter to the Intel board. They obviously found out some 0:19:25.200 --> 0:19:30.000 things that he the Senator highlighted, you know, the links 0:19:30.040 --> 0:19:34.640 to some of the Chinese companies, small companies that had 0:19:34.680 --> 0:19:39.200 ties to the Chinese government. And I think the board 0:19:39.280 --> 0:19:42.320 probably has to come up with an answer in terms 0:19:42.320 --> 0:19:44.920 of the you know, the concerns that were raised by 0:19:44.960 --> 0:19:45.520 a senator. 0:19:46.400 --> 0:19:49.720 Has the company responded at all to the senator or 0:19:49.760 --> 0:19:50.119 the president? 0:19:50.200 --> 0:19:53.840 I mean they have in terms of the initial response, 0:19:54.080 --> 0:19:58.840 But to the best of my knowledge, I think the 0:19:58.840 --> 0:20:03.359 board clearly is defending uh, you know, the credentials of 0:20:04.040 --> 0:20:09.120