WEBVTT - Cisco Buys Splunk and Tech IPOs 0:00:01.440 --> 0:00:05.760 From Marhart where Innovation, Money and Power Collie in Silicon 0:00:05.840 --> 0:00:06.720 Vallet NBN. 0:00:07.080 --> 0:00:11.320 This is Bloomberg Technology with Caroline Hyde and Ed loved Love. 0:00:26.120 --> 0:00:28.360 Live from Bloomberg's World headquarters in New York. I'm Caroline 0:00:28.400 --> 0:00:28.840 High and i me. 0:00:28.880 --> 0:00:31.200 Ladlow right next door. This is Bloomberg Technology. 0:00:31.240 --> 0:00:31.680 Coming up. 0:00:31.760 --> 0:00:35.040 Cisco buying Splunk and a twenty eight billion dollar deal 0:00:35.080 --> 0:00:36.600 that pushes it into AI. 0:00:37.040 --> 0:00:38.639 Will bring you the terms of the deal and what. 0:00:38.600 --> 0:00:39.960 It means for em and A and from m and 0:00:40.000 --> 0:00:41.840 A to IPOs, we'll get a read on the state 0:00:41.840 --> 0:00:44.839 of the market with Jeff Thomas from NASDAK as companies 0:00:45.000 --> 0:00:46.480 see their trading debut. 0:00:46.280 --> 0:00:47.960 Pop begin to fade. 0:00:48.320 --> 0:00:50.480 Plus, we'll bring you the latest in the media world. 0:00:50.600 --> 0:00:53.240 Robert Murdoch steps down from the Fox and News Corp. 0:00:53.360 --> 0:00:56.000 And writers and studios that are inching closer. 0:00:55.640 --> 0:00:56.120 To a deal. 0:00:56.560 --> 0:00:58.960 All that and so much more ahead, Let's bringing Jim Fish, 0:00:59.000 --> 0:01:01.040 analyst of Pipe Sanla, who has a neutral rating on 0:01:01.080 --> 0:01:03.800 Cisco fifty seven dollars price target and ultimately, is this 0:01:03.880 --> 0:01:05.560 a good deal despite the amount that they're paying in 0:01:05.600 --> 0:01:07.160 terms of premium? 0:01:07.560 --> 0:01:08.720 Yeah, thanks for having me. 0:01:08.760 --> 0:01:14.479 First off, Secondly on your question here, look Splunkhead been 0:01:15.200 --> 0:01:18.039 a target for Cisco for a little while here Back 0:01:18.080 --> 0:01:21.320 in January of twenty twenty two, it was rumored that 0:01:21.440 --> 0:01:25.520 Cisco had made a offer at that point. Now today 0:01:25.560 --> 0:01:28.920 you get the conclusion of that, or almost conclusion as 0:01:28.920 --> 0:01:32.160 we work through a nine to twelve month deal cycle here. 0:01:32.040 --> 0:01:33.520 On this one forward to close. 0:01:33.920 --> 0:01:36.479 But this is the name that we have pointed out 0:01:36.520 --> 0:01:40.280 for quite some time that is most strategic to Cisco 0:01:40.440 --> 0:01:43.039 when you look at what Chuck Robbins and his team are. 0:01:42.920 --> 0:01:48.080 Trying to do around AI cloud security, this one just 0:01:48.160 --> 0:01:48.920 fits the bill. 0:01:49.040 --> 0:01:52.840 It really merges that world between app experiences that they 0:01:52.880 --> 0:01:56.000 call it with the security side and fills a big 0:01:56.040 --> 0:01:58.480 hole in the security portfolio that we pointed out for 0:01:58.520 --> 0:02:02.880 a long time in the security Incident and Event management 0:02:03.000 --> 0:02:06.600 or SIM space. Splunks the big eight hundred pound gorilla 0:02:06.680 --> 0:02:09.200 in that space, and it really is the backbone of 0:02:09.240 --> 0:02:12.800 security operations centers, and Cisco really needed that kind of 0:02:12.840 --> 0:02:15.880 backbone to really push the push the envelope a little 0:02:15.919 --> 0:02:18.720 bit more on its security business that's really been lagging 0:02:18.760 --> 0:02:21.600 against other security peers out there in terms of a 0:02:21.680 --> 0:02:22.080 growth ring. 0:02:22.320 --> 0:02:25.120 So Chuck Robins reckons this transaction is going to close 0:02:25.400 --> 0:02:27.679 in nine to twelve months, and then Gary Steele, who 0:02:27.720 --> 0:02:30.760 is the CEO of Splunk, is going to join the 0:02:30.760 --> 0:02:34.040 executive team reporting to Chuck Robbins. You gave an excellent 0:02:34.120 --> 0:02:38.800 explanation there of what Splunk brings to Cisco. Have a 0:02:38.840 --> 0:02:41.200 second go at it from a layman's perspective. 0:02:42.080 --> 0:02:44.720 What is Splunk? What are we talking about here? 0:02:45.480 --> 0:02:47.600 Yeah, so gets back to actually the name of Spunk. 0:02:47.680 --> 0:02:52.000 Really, what Splunk is named after is going splunking, which 0:02:52.040 --> 0:02:54.120 is going cave diving, and in this case, it's going 0:02:54.160 --> 0:02:58.359 after essentially data, trying to understand your data, being able. 0:02:58.160 --> 0:02:58.960 To search through it. 0:02:59.080 --> 0:03:02.959 So when you have a you know, breach for example, 0:03:03.080 --> 0:03:05.000 that you don't know about, but you can kind of 0:03:05.000 --> 0:03:08.280 search through all of your data with spunks tools and 0:03:08.400 --> 0:03:10.640 be able to find you know what's actually going on 0:03:10.720 --> 0:03:13.080 inside your environment, which is why it's so important for 0:03:13.160 --> 0:03:16.680 your security operations center as well as for an instant 0:03:17.040 --> 0:03:20.960 response and management perspective. And actually, while we talk about 0:03:21.000 --> 0:03:24.080 Splunk as a security tool, its foundation was actually on 0:03:24.120 --> 0:03:28.040 the IT operation side, in sort of the performance management. 0:03:28.160 --> 0:03:30.280 So how is your network actually performing? 0:03:30.320 --> 0:03:34.000 How how are your applications performing via on prem or 0:03:34.040 --> 0:03:37.000 in the cloud as we shift to you know, a 0:03:37.080 --> 0:03:40.680 nature AWS Google environment and being able to manage across 0:03:40.720 --> 0:03:43.520 the entire environment, not just you know, on prem and 0:03:43.520 --> 0:03:45.440 that's been a big shift for Spunk over the last 0:03:45.480 --> 0:03:45.920 few years. 0:03:45.920 --> 0:03:46.119 Here. 0:03:46.360 --> 0:03:48.920 Yeah, I knew that, we knew that. I was just checking. 0:03:50.160 --> 0:03:50.360 Jim. 0:03:50.440 --> 0:03:52.360 We're a smart guy, So thank you. 0:03:53.280 --> 0:03:55.440 I don't serve ability. 0:03:55.840 --> 0:03:56.560 Let me just ask you this. 0:03:56.600 --> 0:03:58.280 A regulator is going to let this one go through, 0:03:58.320 --> 0:03:59.920 I said, Chuck thinks nine to twelve. 0:04:01.680 --> 0:04:03.480 Yeah, it's a question we're getting this morning. 0:04:04.040 --> 0:04:07.080 We're actually we cover VMware as well, and that's been 0:04:07.120 --> 0:04:10.320 a fun one in terms of regulation. I'd argue a 0:04:10.440 --> 0:04:13.200 longer time period on that one. Look, I think you're 0:04:13.240 --> 0:04:17.080 starting to see things go through. Even of VMware size. 0:04:17.720 --> 0:04:21.320 For Cisco and Splunk, there's a little bit of overlap 0:04:21.360 --> 0:04:24.719 in terms of, for example, market share with the powerful 0:04:24.760 --> 0:04:28.560 combination of app Dynamics, thousand Dies and now Spunk altogether, 0:04:29.720 --> 0:04:31.960 but there really isn't much on the security side, and 0:04:32.320 --> 0:04:37.320 so from the both the application experiences and the security businesses. 0:04:37.640 --> 0:04:40.360 While Splunk is a decent sized i'm sorry one, while 0:04:40.440 --> 0:04:43.120 Cisco is a decent sized player in each as well. Splunk, 0:04:44.160 --> 0:04:46.520 you know, the two of them combined are really still 0:04:46.560 --> 0:04:49.960 part of this really fragmented set of industries that there 0:04:49.960 --> 0:04:53.320 really isn't the antitrust issue here in our. 0:04:53.320 --> 0:04:57.080 View, What then, of the competitive landscape those that Splunk 0:04:57.240 --> 0:05:00.000 was up against Data Dog based here in New York, 0:05:00.040 --> 0:05:02.320 com thing in Dina Trace as well. Digital's actually under 0:05:02.320 --> 0:05:03.520 pressure some three percent to day. 0:05:03.560 --> 0:05:04.760 Does it not make it more attractive? 0:05:06.080 --> 0:05:08.640 You know? It's interesting, right because M and A can 0:05:08.720 --> 0:05:09.680 be disruptive to. 0:05:11.160 --> 0:05:15.520 The business being bought and potentially act as a tailwind 0:05:15.800 --> 0:05:16.880 for competitors. 0:05:17.520 --> 0:05:19.400 Look, I don't cover Davia Dog. 0:05:19.440 --> 0:05:21.640 That's carved by my peer, Rob Ewens, but you know, 0:05:21.720 --> 0:05:25.720 David Dog itself has been doing good things in sort 0:05:25.760 --> 0:05:29.080 of cloud observability and that's where essentially workloads are going 0:05:29.120 --> 0:05:32.960 correct and is considered one of, if not the leaders, 0:05:32.960 --> 0:05:37.520 in that observability space. But when you kind of stack 0:05:37.600 --> 0:05:40.840 up what Splunk could do for Cisco, you know, it 0:05:40.880 --> 0:05:44.760 does make Cisco a more relevant competitor in this space, 0:05:45.080 --> 0:05:48.840 especially given Cisco has a huge reach, right and Gary 0:05:48.960 --> 0:05:51.120 and Chuck talked about it on the call this morning, 0:05:51.160 --> 0:05:54.520 where about two thirds of Spunk as domestic and a 0:05:54.560 --> 0:05:57.799 third is international. Well, while Cisco has arguably the best 0:05:57.920 --> 0:06:01.520 go to market program out there and can really penetrate 0:06:01.560 --> 0:06:05.719 their roughly a million customers with splunks. 0:06:05.680 --> 0:06:08.760 Offering, and so that could potentially box out a competitor. 0:06:09.040 --> 0:06:11.480 When do you think about it, Jim Fish or Piper Sandler, 0:06:11.600 --> 0:06:13.280 just not just so good on the deal, but also 0:06:13.320 --> 0:06:14.440 where it fits in the landscape. 0:06:14.440 --> 0:06:16.320 Also very kind about me, Thank you very much. 0:06:16.360 --> 0:06:18.159 Now, coming up from the show, we're going to turn 0:06:18.160 --> 0:06:21.279 from M and A to IPO's. Jeff Thomas, Executive vice 0:06:21.320 --> 0:06:24.599 president of nasdaq's Corporate Platforms, is joining us next character. 0:06:24.880 --> 0:06:27.240 Meanwhile, look, let's just get to check in on how 0:06:27.240 --> 0:06:30.640 these IPOs are the week affairing, because instagrat actually it's 0:06:30.680 --> 0:06:33.280 still clinging to a gain over the last three days, 0:06:33.320 --> 0:06:35.760 but coming off well from that pop after. 0:06:35.520 --> 0:06:36.480 Its initial IPO. 0:06:36.839 --> 0:06:40.119 We're currently training at thirty spot zero five, a tiny 0:06:40.200 --> 0:06:42.600 gain on the thirty dollars pricing, but is that we 0:06:42.760 --> 0:06:44.960 know remaining open Look up an eye for you from 0:06:45.000 --> 0:06:45.360 New York. 0:06:45.440 --> 0:06:46.599 This's a Bluemberg technology. 0:06:57.880 --> 0:07:00.960 We're just taking you over to a either then happening 0:07:01.000 --> 0:07:03.320 the Bloomberg Global Credit Form. It's not a way in London. 0:07:03.520 --> 0:07:06.720 You've got panels and KKR, Apollo, Barclays. They're all discussing 0:07:06.839 --> 0:07:09.280 at this very moment the rise of private credit. And 0:07:09.360 --> 0:07:10.720 if you want to be digging into that a little 0:07:10.720 --> 0:07:11.880 bit more, you can go to Life, go on a 0:07:11.880 --> 0:07:15.280 Bloomberg terminal. But the credit more broadly ed is important 0:07:15.280 --> 0:07:17.440 to our viewers in technology, whether it happens to be 0:07:17.480 --> 0:07:19.600 the public companies seeking to raise funds to the bond 0:07:19.640 --> 0:07:20.880 market and indeed the private. 0:07:20.720 --> 0:07:21.200 Co yeh lok. 0:07:21.200 --> 0:07:24.160 Cost of capital is important to any technology company. It's 0:07:24.200 --> 0:07:25.880 a part of the balance Sheeper. Think back to May 0:07:26.280 --> 0:07:28.720 Apple and Meta returned to the blue chip usbon market, 0:07:28.760 --> 0:07:29.800 we get super excited. 0:07:30.200 --> 0:07:31.200 Haven't heard anything since. 0:07:31.400 --> 0:07:34.080 So I just wanted to remind our audience, like tech, 0:07:34.080 --> 0:07:36.280 companies in debt pay close attention. 0:07:36.040 --> 0:07:38.960 Particularly when rates from the treasury perspective are on the rise, 0:07:38.960 --> 0:07:42.000 and whether in Central Bank really starts to impact the 0:07:42.040 --> 0:07:44.320 desire there. Meanwhile, I mean this all comes in a 0:07:44.320 --> 0:07:46.600 global narrative when we're thinking of the health of the 0:07:46.720 --> 0:07:49.840 twenty twenty three IPO landscape. At the moment, we're facing 0:07:49.920 --> 0:07:53.200 uncertainty after Armen in Stacart reverse gains after popping during 0:07:53.240 --> 0:07:53.840 their debut. 0:07:54.160 --> 0:07:56.239 So let's get a little tape new Egsaba Girl Digital. 0:07:56.280 --> 0:07:57.880 He's here for more a weldcare line. 0:07:57.920 --> 0:08:00.160 It is really pretty interesting here because we did, of 0:08:00.200 --> 0:08:03.320 course have the big IPO pops last week for ARM, 0:08:03.360 --> 0:08:06.800 and then earlier this week for both Instacart and Kleviyo. 0:08:06.960 --> 0:08:10.120 Here's ARM, though, giving back its first twenty four percent 0:08:10.200 --> 0:08:13.880 gain that first day pop down each subsequent day overall 0:08:14.200 --> 0:08:16.360 down about one point seven percent. So what really raises 0:08:16.400 --> 0:08:18.760 the question begs the question of whether or not this 0:08:18.880 --> 0:08:21.040 IPO window is healthy. In fact, if we take a 0:08:21.080 --> 0:08:23.320 look at both ARM and cart, we are going to 0:08:23.400 --> 0:08:25.520 see over this time period there's the ARM loss, but 0:08:25.600 --> 0:08:28.240 KRT actually a small gain here a four tens of 0:08:28.280 --> 0:08:29.840 one percent, not so shabby. 0:08:30.040 --> 0:08:31.760 But what comes to mind for me why I. 0:08:31.720 --> 0:08:34.319 Was initially questioning whether or not these pops were good enough. 0:08:34.360 --> 0:08:36.200 If we take a look at what happened back in 0:08:36.240 --> 0:08:39.120 the pandemic, we of course had Airbnb up one hundred 0:08:39.120 --> 0:08:42.280 and thirteen percent, a firm up sixty four percent, Bumble 0:08:42.400 --> 0:08:44.679 up almost one hundred percent, and then posh up one 0:08:44.720 --> 0:08:45.720 hundred and forty two percent. 0:08:45.920 --> 0:08:49.360 So the pops that we've seen over the last two weeks. 0:08:48.880 --> 0:08:53.080 Not quite as strong. Have we greased the IPO window. 0:08:53.160 --> 0:08:55.920 It's not entirely clear at this point. More needs to 0:08:55.920 --> 0:08:56.560 be seen. 0:08:56.440 --> 0:08:56.880 For sure. 0:08:57.120 --> 0:09:00.600 You know Shnalibus was on the show yesterday lamenting how 0:09:00.840 --> 0:09:03.040 that's it now? All the IPOs ha done. We've covered 0:09:03.080 --> 0:09:05.440 them to death. There won't be any tillbuck and stock. 0:09:05.480 --> 0:09:07.920 And she's really sad about it. That's not quite true, though, 0:09:07.960 --> 0:09:08.520 is it abby? 0:09:08.600 --> 0:09:10.839 Yeah, we to be seen. It's good. 0:09:10.840 --> 0:09:13.000 It's going to have a lot to do with this macro. 0:09:13.120 --> 0:09:15.240 I mean, the macro environment right now relative to the 0:09:15.240 --> 0:09:16.560 FED is not so great, and it's. 0:09:16.480 --> 0:09:17.160 Not also bad. 0:09:17.200 --> 0:09:19.040 Take a look at Clavio still holding on to a 0:09:19.040 --> 0:09:20.720 gain of five point three percent. And I would also 0:09:20.800 --> 0:09:23.199 point to back in the day there was a company 0:09:23.200 --> 0:09:25.760 that ipoed, and in the first couple of months we 0:09:25.880 --> 0:09:30.040 go into the Bloomberg terminal, this stock absolutely tanked down 0:09:30.160 --> 0:09:32.800 you can see here, down more than fifty percent of 0:09:32.840 --> 0:09:35.080 those couple of months. It came back in a big, 0:09:35.120 --> 0:09:37.120 big way, though, And at this point is that more 0:09:37.120 --> 0:09:39.880 than seven hundred percent since that ipo? Any any takers 0:09:39.880 --> 0:09:42.280 on what this is and why these IPOs right now? 0:09:42.360 --> 0:09:43.360 Maybe we shouldn't bring to me. 0:09:43.520 --> 0:09:46.040 It wasn't around then Okay. 0:09:45.840 --> 0:09:47.720 So it was Meta Facebook. 0:09:48.240 --> 0:09:50.800 Oh yeah, so previously known as Facebook. 0:09:50.840 --> 0:09:53.360 Yes, previously known as Facebook at that time had a 0:09:53.480 --> 0:09:56.760 very very difficult first couple of months. But if we 0:09:56.840 --> 0:09:59.040 take a look at what Facebook has done, Meta has 0:09:59.080 --> 0:10:02.319 done since that, I po, well, not so shabby at all, 0:10:02.400 --> 0:10:04.280 especially given last year's big plunge. 0:10:04.320 --> 0:10:05.240 It's really come back. 0:10:05.520 --> 0:10:07.480 So you know, it's just too early to say what's 0:10:07.480 --> 0:10:08.679 going on with these IPOs A bit. 0:10:08.760 --> 0:10:11.559 That's why people say I'm a long term investor. 0:10:11.840 --> 0:10:14.080 Yes, that is a that is a perfect chart for 0:10:14.240 --> 0:10:16.560 the idea of a long term investor, not a trader. 0:10:16.679 --> 0:10:21.439 Bloomberg's Abagail do Little the b chartress name on point. 0:10:21.520 --> 0:10:22.080 Thank you so much. 0:10:22.120 --> 0:10:24.360 Okay, let's stick with the IPO market and bring in 0:10:24.360 --> 0:10:28.320 our next guest. It has been a busy few days, 0:10:28.440 --> 0:10:32.000 right carro with three listing, some on the Nasdaq, some 0:10:32.080 --> 0:10:34.360 on the New York Stock Exchange. Let's go to the 0:10:34.440 --> 0:10:36.640 Nasdack side of this story and bring in Jeff Thomas. 0:10:36.679 --> 0:10:40.120 And Jeff I want to start by asking you, you know, 0:10:40.240 --> 0:10:42.920 we say here on the Bloomberg Technology Show, the euphoria 0:10:42.960 --> 0:10:46.600 of the IPO winding opening up was short lived. Is 0:10:46.600 --> 0:10:48.720 that your conclusion as well. 0:10:50.520 --> 0:10:52.640 I think, you know, companies look at the IPO as 0:10:52.679 --> 0:10:53.440 a moment in time. 0:10:53.520 --> 0:10:54.720 It's a financing event. 0:10:54.880 --> 0:10:58.440 It creates great opportunities for liquidity for their shareholders, creates 0:10:58.440 --> 0:11:01.200 an acquisition currency by their stock. So I don't think 0:11:01.200 --> 0:11:03.199 they get too hung up on exactly how their stocks 0:11:03.240 --> 0:11:05.040 trading day day to day. If you look at what's 0:11:05.040 --> 0:11:06.840 happening this week, you know, we had kind of a 0:11:06.880 --> 0:11:10.360 hawkish pause by the Fed yesterday where again they paused 0:11:10.440 --> 0:11:13.120 rates but had some hawkish overtones. So of course that's 0:11:13.200 --> 0:11:15.560 going to drive them macro. That's going to drive some 0:11:15.600 --> 0:11:17.439 of these stocks. But when you look at the pipeline 0:11:17.440 --> 0:11:20.040 that we've got with some great companies lined up to 0:11:20.080 --> 0:11:21.959 get out to the market both in Q four and 0:11:22.040 --> 0:11:24.480 a really strong pipeline in the first half of next year, 0:11:24.679 --> 0:11:26.840 I think there's still a lot of reasons to be optimistic. 0:11:26.960 --> 0:11:30.440 The VIX continues to be relatively low, indices are still 0:11:30.760 --> 0:11:33.280 well up for the year, and I think companies that 0:11:33.360 --> 0:11:36.200 raised capital back in twenty twenty and twenty twenty one 0:11:36.840 --> 0:11:39.559 i'll really some pretty healthy valuations. They're going to need 0:11:39.800 --> 0:11:42.040 to go back and raise another round of capital, and 0:11:42.080 --> 0:11:43.600 so it'll be a choice do they want to raise 0:11:43.640 --> 0:11:46.520 that capital privately or do they want to tap the 0:11:46.520 --> 0:11:48.520 public markets. And I think there's a lot of reasons 0:11:48.559 --> 0:11:50.520 to expect that many of them will come to the 0:11:50.520 --> 0:11:51.440 public markets. 0:11:51.640 --> 0:11:54.520 Speaking to your colleague Karen last week on the day 0:11:54.559 --> 0:11:56.560 of the arm listing, Jeff, and when you're looking at 0:11:56.600 --> 0:11:59.400 one hundred and fifty seven active s ones or f 0:11:59.480 --> 0:12:02.839 one file, how many of those companies that are eyeing 0:12:02.840 --> 0:12:04.720 the markets are going to have to use the play 0:12:04.760 --> 0:12:08.520 But we've just seen Cornerstone Investors Limited supply to ensure 0:12:08.520 --> 0:12:11.400 you get that initial pop, given well, Instacata is on 0:12:11.440 --> 0:12:12.280 the downside already. 0:12:13.600 --> 0:12:15.640 Well, look, I think it's all about how you want 0:12:15.640 --> 0:12:17.959 to build your book. Companies are always going to want 0:12:18.000 --> 0:12:20.480 to have those long term anchor investors. There's always going 0:12:20.520 --> 0:12:22.960 to be room for some companies that or some investors 0:12:22.960 --> 0:12:24.760 that are going to be short term in nature. 0:12:25.000 --> 0:12:26.400 And that's because, honestly. 0:12:26.200 --> 0:12:28.160 When you look at the opening cross where we're bringing 0:12:28.160 --> 0:12:31.240 together buyers and sellers for that all important first trade 0:12:31.280 --> 0:12:34.079 through our technology called the IPO Book Viewer, the only 0:12:34.120 --> 0:12:36.600 people that can sell into that transaction are the people 0:12:36.600 --> 0:12:38.840 that got shares on the IPO. So there's of course 0:12:38.880 --> 0:12:40.800 going to be buyers that got fewer shares than they wanted. 0:12:40.840 --> 0:12:42.120 Those are going to be the ones that are looking 0:12:42.160 --> 0:12:44.280 to acquire more shares, And then you've got to have 0:12:44.320 --> 0:12:46.320 some sellers in there as well. That's why we see 0:12:46.320 --> 0:12:49.400 the stabilization. A agent sometimes taking an hour to even 0:12:49.440 --> 0:12:51.320 three hours to open these stocks because a lot of 0:12:51.320 --> 0:12:53.200 times it's having to flush out the sellers and find 0:12:53.200 --> 0:12:56.120 people that are looking to unload the stock in addition 0:12:56.160 --> 0:12:58.120 to all the long term shareholders that they bring in 0:12:58.160 --> 0:12:58.800 through the IPO. 0:12:59.040 --> 0:13:00.800 Yeah, that was a key no hour that we're talking 0:13:01.040 --> 0:13:03.520 well this time last week around on Jeff. I'm interested 0:13:03.559 --> 0:13:05.120 there for as to who's coming in to want to 0:13:05.120 --> 0:13:07.760 be that demand, that marginal purchaser. Is it we're getting 0:13:07.760 --> 0:13:09.760 more retail interest? Does it largely tend to be the 0:13:09.760 --> 0:13:11.840 institutions that are willing to take the risk right now? 0:13:12.760 --> 0:13:15.439 Yeah, I think it's really the institutional investors that are 0:13:15.440 --> 0:13:17.520 going to be the major major. 0:13:17.240 --> 0:13:18.440 Buyers of IPOs. 0:13:18.760 --> 0:13:20.319 You know, you kind of look at how the class 0:13:20.360 --> 0:13:23.480 of twenty twenty and twenty twenty one perform. Obviously a 0:13:23.520 --> 0:13:25.080 lot of those didn't turn out the way that the 0:13:25.080 --> 0:13:28.400 investors were hoping to Now you come into this year again, 0:13:28.440 --> 0:13:31.040 the indices are up, the volatility is low. They're going 0:13:31.080 --> 0:13:32.959 to be looking for ways to differentiate, and that means 0:13:32.960 --> 0:13:34.920 they're going to have to take some risks in terms 0:13:34.960 --> 0:13:36.800 of some new issues. So we see a lot of 0:13:36.800 --> 0:13:38.760 demand on the buy side. I think, really what it is, 0:13:38.800 --> 0:13:41.440 it's the companies coming to market, the banker's kind of 0:13:41.520 --> 0:13:45.160 adjusting the valuations to match the expectations of the market, 0:13:45.360 --> 0:13:48.559 and of course that all important narrative around profitable growth 0:13:48.559 --> 0:13:50.120 and not just growth at all costs. 0:13:50.440 --> 0:13:51.520 You know, I want to go back to something that 0:13:51.559 --> 0:13:53.920 Caroline pointed out that if there is anything in common 0:13:53.960 --> 0:13:57.240 across the last week, it was the Cornerstone investor the 0:13:57.320 --> 0:14:00.480 small flow. But I get what you just said about 0:14:01.040 --> 0:14:03.440 the buyers, But these some of these IPOs were like 0:14:03.480 --> 0:14:07.120 ten x oversubscribed. Why is there not the same tenex 0:14:07.840 --> 0:14:09.840 demand three days of trading in. 0:14:11.480 --> 0:14:13.240 You know, I think there's always going to be buyers 0:14:13.280 --> 0:14:15.560 at different price levels. And again, what you have to 0:14:15.600 --> 0:14:18.280 remember here is that companies are laying out their vision 0:14:18.360 --> 0:14:20.920 for the future, that they're saying, here's where we can get 0:14:20.920 --> 0:14:23.720 to in terms of revenue, in terms of earnings, and 0:14:23.760 --> 0:14:25.560 so the investors are going to be watching not just 0:14:25.600 --> 0:14:27.640 in the first few days after the IPO, but. 0:14:27.640 --> 0:14:28.800 The first few quarters. 0:14:28.920 --> 0:14:30.960 And that's really what's going to determine the success of 0:14:31.000 --> 0:14:33.400 these companies is can they come out of the gates strong, 0:14:33.800 --> 0:14:35.840 can they hit their numbers in the first few quarters. 0:14:36.000 --> 0:14:38.560 And I think that's really what's going to tell the 0:14:38.560 --> 0:14:40.800 story IPO market versus the first few days of trading. 0:14:41.040 --> 0:14:44.360 We were just talking about long term investment THESS following 0:14:44.360 --> 0:14:46.880 on from the Messa listing years and years ago. Jeff Thomas, 0:14:46.880 --> 0:14:48.560 and we thank you so much, executive vice president of 0:14:48.640 --> 0:14:56.600 Nasdak's Corporate Platforms. 0:14:58.080 --> 0:14:59.080 Right time for talking tech. 0:14:59.120 --> 0:15:02.720 First off, Japanese electronics company Toshiba is clearing. 0:15:02.440 --> 0:15:03.920 A new path to go private. 0:15:03.960 --> 0:15:07.320 It received a thirteen point five billion dollar buyout from 0:15:07.360 --> 0:15:10.880 the Japan Industrial Partner's private equity fund, which now holds 0:15:10.880 --> 0:15:13.040 nearly eighty percent of all the company's shares. 0:15:13.040 --> 0:15:14.040 The deal pays the way. 0:15:13.880 --> 0:15:16.880 For the fund to squeeze out the remaining shareholders and 0:15:16.920 --> 0:15:20.200 take full control of the company. And Google's considering dropping 0:15:20.240 --> 0:15:23.160 chip maker Broadcom as a supplier of AI chips as 0:15:23.200 --> 0:15:26.360 soon as twenty twenty seven. That's according to report from 0:15:26.400 --> 0:15:29.400 The Information. Apparently, Google executives has set out a goal 0:15:29.480 --> 0:15:32.720 earlier this year to move away from Broadcom after a 0:15:32.760 --> 0:15:35.480 standoff over the cost of its chips. However, in the 0:15:35.560 --> 0:15:38.520 last few minutes, Google has just issued a statement saying 0:15:38.760 --> 0:15:42.160 it sees quote no change in its relationship with Broadcon. 0:15:42.360 --> 0:15:45.640 Broadcompared some of his stock declients plus in Video is 0:15:45.640 --> 0:15:49.000 betting on India's potential to become a key global market 0:15:49.080 --> 0:15:51.840 for AI. During a trip to the country earlier this month, 0:15:51.920 --> 0:15:55.520 CEO Jensen Hwang visited multiple cities and met with leaders, 0:15:55.560 --> 0:15:58.160 including Prime Minister Mody Caroline. 0:15:57.840 --> 0:15:59.120 Fascinating global perspective. 0:15:59.120 --> 0:16:00.680 Meanwhile, I mean, let's just stick on the world of 0:16:00.760 --> 0:16:03.720 artificial intelligence, because this week we've had so much Amazon, 0:16:03.800 --> 0:16:08.119 Google both integrating more generative AI products into their offerings. 0:16:08.320 --> 0:16:10.480 Well, today we've got some similar news out of Microsoft. 0:16:10.560 --> 0:16:13.240 The company will start rolling out as AI Assistant from 0:16:13.240 --> 0:16:16.440 Windows as soon as Tuesday. Will be widely available in 0:16:16.640 --> 0:16:19.760 office apps starting November the first This is for corporate customers. 0:16:19.960 --> 0:16:22.560 We're going to be bringing in now Rishid Juluria, it's 0:16:22.560 --> 0:16:25.560 managing director of Software Equitan Research over at RBC Capital Markets. 0:16:25.720 --> 0:16:27.880 Currently on an outform rating on the shares of Microsoft. 0:16:27.960 --> 0:16:30.360 And what is this to show you about the ability 0:16:30.400 --> 0:16:33.920 to integrate underlying technology largely coming from open AI that 0:16:34.120 --> 0:16:36.440 quickly into its own product offerings. 0:16:37.560 --> 0:16:39.040 Yeah, and thanks so much for having me. Look. 0:16:39.040 --> 0:16:40.520 I think this shows us a couple of things, right. 0:16:40.560 --> 0:16:43.880 It shows us that Microsoft isn't selling vaporware. The fact 0:16:43.880 --> 0:16:47.760 that there's a timeline on getting Windows Copilot out, that's 0:16:47.840 --> 0:16:50.480 as you mentioned in five days. The fact that we're 0:16:50.480 --> 0:16:54.240 talking forty days until Office U sixty five copilot comes out. 0:16:54.720 --> 0:16:57.480 This is incredible timing and contrast that with what we 0:16:57.520 --> 0:17:00.360 see alswhere and enterprise software micros off. 0:17:00.240 --> 0:17:01.840 Is clearly boo moving really quickly. 0:17:02.360 --> 0:17:04.880 What I think is two things that really come out 0:17:04.880 --> 0:17:07.560 to this for me. Number one is Microsoft is actually 0:17:07.560 --> 0:17:11.320 integrating all of these aspects. So your Office rough cty 0:17:11.320 --> 0:17:14.760 five copilot talks to your Windows Copilot, talks to your browser, 0:17:14.800 --> 0:17:17.440 talks to your Bing copilot. So there's actually a very 0:17:17.480 --> 0:17:21.400 integrated generative AI experience across the entire Microsoft stack, which 0:17:21.400 --> 0:17:24.600 I think is incredible and really showcases the portfolio approach 0:17:24.640 --> 0:17:27.720 Microsoft has. The second thing is, you know, the question 0:17:27.760 --> 0:17:29.560 we have to ask is how is Microsoft able to 0:17:29.560 --> 0:17:33.280 move soft fast. Remember, they have a huge headstart versus 0:17:33.280 --> 0:17:36.040 anyone else because they invested in open AI going back 0:17:36.080 --> 0:17:37.000 to twenty nineteen. 0:17:37.400 --> 0:17:40.280 And you know, Microsoft was, you know, deeply. 0:17:40.000 --> 0:17:44.239 Thinking about generative AI long before chat tpt became a 0:17:44.240 --> 0:17:46.480 household name, you know, almost about a year ago. 0:17:46.800 --> 0:17:50.680 They Richie You pointed out they're integrating this into existing platforms. 0:17:50.720 --> 0:17:54.960 And Microsoft has always been really good at selling software 0:17:55.040 --> 0:17:57.560 that loads of others give away for free. So my 0:17:57.640 --> 0:18:00.360