WEBVTT - Walmart's Business Mix-Shift Aids Sales, Profit 0:00:02.920 --> 0:00:10.719 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business 0:00:10.720 --> 0:00:13.960 Wait inside from the reporters and editors who bring you 0:00:14.000 --> 0:00:18.360 America's most trusted business magazine, plus global business, finance and 0:00:18.400 --> 0:00:22.880 tech news. The Bloomberg Business Week Podcast with Carol Messer 0:00:23.040 --> 0:00:25.800 and Tim Stenebeck from Bloomberg Radio. 0:00:27.000 --> 0:00:29.400 Listen to Walmart shares as we talked about at the 0:00:29.440 --> 0:00:32.720 top surgeing pushing the retailer's market value over five hundred 0:00:32.760 --> 0:00:35.360 billion dollars for the first time after I posted stronger 0:00:35.400 --> 0:00:39.000 than expected first quarter earnings and boosted it annual. 0:00:38.840 --> 0:00:41.720 Sales and profit forecasts. So we wanted to know more. 0:00:41.880 --> 0:00:44.319 It's the e commerce business, it's the store business, it's 0:00:44.320 --> 0:00:46.440 the average ticket spend. There's a lot going on, Tim, 0:00:46.440 --> 0:00:47.199 when we talk about. 0:00:47.040 --> 0:00:49.800 Well, also the outlook, we welcome Bloomberg Intelligence Senior Retail, 0:00:49.840 --> 0:00:53.440 Staples and Packaged Food analyst Jen bartashis at a Bloomberg 0:00:53.440 --> 0:00:57.160 Intelligence headquarters in Princeton. Okay, Jen, break it down for 0:00:57.240 --> 0:00:59.920 us investors. Certainly loved it, But what do we learn 0:01:00.000 --> 0:01:01.640 about the business today and what can you tell us 0:01:01.640 --> 0:01:02.760 about the broader economy? 0:01:03.720 --> 0:01:06.000 So we learned a couple of things about the business today. 0:01:06.240 --> 0:01:08.440 The first is that some of the investments Walmart has 0:01:08.480 --> 0:01:11.319 been making are really starting to play out. They're able 0:01:11.360 --> 0:01:14.800 to consistently grow operating income ahead of revenue, which is 0:01:14.840 --> 0:01:16.839 a great story for them to be able to tell 0:01:17.360 --> 0:01:20.559 they're gaining market share, and ultimately their e commerce business 0:01:20.600 --> 0:01:23.080 is a really showing signs of taking off. So all 0:01:23.120 --> 0:01:26.200 of these things together really are working for the company. 0:01:26.520 --> 0:01:29.640 We're also seeing that consumers are still value focused and 0:01:29.680 --> 0:01:32.320 Walmart is offering that value to people not just from 0:01:32.319 --> 0:01:35.240 a price perspective, but also from things like convenience, and 0:01:35.240 --> 0:01:37.480 that's what's helping to draw in some of those higher 0:01:37.520 --> 0:01:39.279 income households that they've been talking about. 0:01:39.800 --> 0:01:42.640 Well, when it comes to what they expect in terms 0:01:42.680 --> 0:01:44.559 of adjusted earnings coming at the high end or slightly 0:01:44.560 --> 0:01:46.560 above its original guidance of two twenty three to two 0:01:46.640 --> 0:01:49.120 thirty seven per share revenue growth of three to four 0:01:49.160 --> 0:01:51.520 percent for the full year, it was it analyst just 0:01:51.560 --> 0:01:54.240 too low on it, or was that's kind of what 0:01:54.280 --> 0:01:57.760 the business was, and Walmart's just surprising and doing better 0:01:57.800 --> 0:01:59.160 than not everybody really thought. 0:01:59.520 --> 0:02:03.040 And the thought, yeah, well, Walmart, you know, came into 0:02:03.040 --> 0:02:05.480 the year with their initial guidance a little bit conservative 0:02:05.880 --> 0:02:09.280 because it was really unsure where where the consumer was 0:02:09.320 --> 0:02:11.480 and where they would be. So you know, today they 0:02:11.600 --> 0:02:13.040 nudged up that guidance. 0:02:12.680 --> 0:02:13.160 A little bit. 0:02:13.160 --> 0:02:16.040 They're at the high end of their previously stated range. 0:02:16.200 --> 0:02:18.520 I wouldn't be surprised if at second quarter earnings they 0:02:18.560 --> 0:02:21.919 actually adjust their guidance for the full year. But it's 0:02:22.000 --> 0:02:24.480 really they're staying a little bit conservative just because there 0:02:24.520 --> 0:02:26.600 are a lot of factors at play that affect consumers. 0:02:26.639 --> 0:02:29.280 Still listen, they're massive, right, and they certainly play into 0:02:29.320 --> 0:02:31.400 a certain sect. I would say, I think it's fair 0:02:31.440 --> 0:02:34.080 to say of the consumer. Although we've known, you know, 0:02:34.080 --> 0:02:36.600 coming off the pandemic and just other times that we 0:02:36.639 --> 0:02:39.960 feel like their customer base has widened out, has it? 0:02:40.040 --> 0:02:42.679 What do we know really about the demographics of who 0:02:42.720 --> 0:02:43.720 is the Walmart chopper? 0:02:44.560 --> 0:02:47.880 Well, historically you would have considered about fifty percent of 0:02:47.880 --> 0:02:50.400 their customer base to be in that lower income household 0:02:51.200 --> 0:02:53.680 type of demographic. But today what they talked about was 0:02:53.720 --> 0:02:56.680 that when they did write their demographics, between those who 0:02:56.680 --> 0:02:59.240 aren't under fifty thousand, those fifty thousand to one hundred 0:02:59.280 --> 0:03:02.480 thousand households over one hundred thousand dollars a year. It's 0:03:02.480 --> 0:03:04.720 about a third of their business each So that's a 0:03:04.919 --> 0:03:08.800 meaningful shift in the way that their consumer based and 0:03:08.840 --> 0:03:11.280 it really does bode well for them going forward that 0:03:11.280 --> 0:03:13.280 they should be able to retain some of those higher 0:03:13.320 --> 0:03:15.919 income consumers who tend to spend more and they tend 0:03:15.919 --> 0:03:17.640 to buy more discretionary items as well. 0:03:17.720 --> 0:03:20.640 Hey, Jen, those higher income consumers, those folks who are 0:03:20.680 --> 0:03:22.840 in more than one hundred thousand dollars a year, are 0:03:22.919 --> 0:03:26.720 they flocking to Walmart right now because they're looking for value? 0:03:26.960 --> 0:03:29.720 Or is Walmart doing a good job of offering items 0:03:29.800 --> 0:03:33.160 that those wealthier households tend to go out and shop for. 0:03:33.280 --> 0:03:36.280 Which one is it? If you were to say it's one. 0:03:36.080 --> 0:03:38.880 Of these things, well, I would say initially when we 0:03:38.960 --> 0:03:41.520 had really high food inflation, it was the price draw. 0:03:42.080 --> 0:03:45.040 But Walmart's been investing in upgrading their stores, improving the 0:03:45.080 --> 0:03:48.840 customer experience, and once you got those customers in the door, 0:03:49.240 --> 0:03:51.480 they saw that there were other changes that were happening 0:03:51.520 --> 0:03:54.440 with regards to merchandising that is appealing to them. So 0:03:55.160 --> 0:03:58.240 it's a story of two parts. The first part was price, 0:03:58.320 --> 0:04:03.160 and now it's also about service conveniences that leads into 0:04:03.160 --> 0:04:06.640 that omnichannel e commerce growth of over twenty one percent 0:04:06.720 --> 0:04:09.920 from a global basis. People like the idea of being 0:04:09.920 --> 0:04:11.920 able to order, have it shipped to their house or 0:04:12.000 --> 0:04:14.520 pick it up a curbside, and that's really driving a 0:04:14.520 --> 0:04:16.880 lot of the interest in the company. 0:04:16.920 --> 0:04:18.599 Yeah, talk a little bit about that. How is Walmart 0:04:18.600 --> 0:04:21.159 Plus doing, especially when compared to Amazon Prime. How do 0:04:21.160 --> 0:04:22.840 you look at these two programs together. 0:04:23.960 --> 0:04:27.120 Well, it's a good question. When I look at Walmart Plus, 0:04:26.920 --> 0:04:30.800 it's really about locking in loyalty. The majority of the 0:04:30.880 --> 0:04:32.839 uses for things that are shipped to home and a 0:04:32.880 --> 0:04:37.360 lot of grocery orders you can order unlimited amounts, you know, 0:04:37.440 --> 0:04:40.320 and have it delivered or ship. When it comes to Amazon, 0:04:40.960 --> 0:04:44.599 they did launch a new subscription program for grocery at 0:04:44.680 --> 0:04:46.440 nine to ninety nine a month on top of your 0:04:46.440 --> 0:04:51.720 annual membership Prime fee. But so clearly Amazon is seeing 0:04:51.800 --> 0:04:53.719 some of the success that Walmart has had with that 0:04:53.760 --> 0:04:57.760 subscription model and see that there is a convenience play 0:04:57.760 --> 0:04:59.840 to be had with consumers who are who are interested 0:04:59.839 --> 0:05:00.800 in that sort of service. 0:05:01.040 --> 0:05:04.240 Are the folks who are using buy online pickup in store? 0:05:04.839 --> 0:05:07.040 Is it true that they're going in and actually buying 0:05:07.080 --> 0:05:09.880 more once they get to the store, because that's a 0:05:09.920 --> 0:05:12.920 way that you know, that's a way that companies hope, 0:05:13.040 --> 0:05:15.559 that brick and mortar companies hope to get folks inside 0:05:15.600 --> 0:05:16.720 the store to buy more. 0:05:17.480 --> 0:05:19.880 It does happen more often than you would think, because 0:05:19.920 --> 0:05:22.400 people are on their way to the store and they think, oh, 0:05:22.480 --> 0:05:24.160 I forgot to add this to my order. I'm just 0:05:24.200 --> 0:05:25.680 going to hop it and grab it. And when they're 0:05:25.680 --> 0:05:27.920 in the store, then that adds like two or three things, 0:05:28.000 --> 0:05:30.440 three things wow by the time they get to the checkout. 0:05:30.720 --> 0:05:33.719 So it is something that actually really does happen. It's 0:05:33.720 --> 0:05:35.880 not with every order, but it's it's more often than 0:05:35.920 --> 0:05:36.760 most people would think. 0:05:36.800 --> 0:05:38.200 All right, sounds really rosy. 0:05:38.920 --> 0:05:42.760 And you know they also saw what traffic and unit 0:05:42.920 --> 0:05:47.920 increases that helped out sales growth grocery business fueling the growth. 0:05:47.640 --> 0:05:48.359 Over at Walmart. 0:05:48.440 --> 0:05:51.800 Yet they did cut workers, right, They are very cognizant 0:05:51.880 --> 0:05:55.200 of higher costs generally, I guess across their world as 0:05:55.200 --> 0:05:59.560 well as kind of everybody's world. So any commentary color around. 0:05:59.320 --> 0:06:02.800 That, Yeah, sure, Walmart is a very much an everyday 0:06:02.800 --> 0:06:05.800 low cost provider as well as an everyday low price provider, 0:06:06.320 --> 0:06:08.919 and part of that is really being disciplined with regards 0:06:08.920 --> 0:06:11.800 to costs. Now, we saw announcements in the last month 0:06:11.880 --> 0:06:14.640 about things like closing down the health clinics. We saw 0:06:14.640 --> 0:06:17.799 the announcements about corporate job cuts. Those are in fact 0:06:17.920 --> 0:06:22.040 likely related to a certain degree. But Walmart is one 0:06:22.080 --> 0:06:23.680 of the things they do is they're not afraid to 0:06:23.720 --> 0:06:25.920 try something, but if it doesn't pan out, they pull 0:06:26.000 --> 0:06:29.640 back and they reassess, and so some of those cuts 0:06:29.720 --> 0:06:32.320 that we saw are really a reflection of that attitude 0:06:32.360 --> 0:06:33.080 towards their business. 0:06:33.160 --> 0:06:35.800 Hey, if there's one business that you think that we 0:06:35.839 --> 0:06:37.760 should be kind of keeping on our radar that maybe 0:06:37.800 --> 0:06:39.960 Walmart's going to be moving into aggressively that could move 0:06:40.000 --> 0:06:41.200 the needle top and bottom line. 0:06:41.200 --> 0:06:42.719 Just twenty seconds left, what would it be? 0:06:42.880 --> 0:06:44.560 I think I thought I heard you say fintech on 0:06:44.640 --> 0:06:46.520 TV earlier, but I don't know if that's it. 0:06:47.600 --> 0:06:49.680 If we looked at what Walmart's doing in their international 0:06:49.760 --> 0:06:52.640 segment with fintech, there's a lot to be excited about. 0:06:52.680 --> 0:06:54.960 And so whatever they can adapt and bring more into 0:06:55.000 --> 0:06:56.679 the US and what they're trying to do with fintech 0:06:56.720 --> 0:06:58.200 here could be a catalyst. 0:06:58.200 --> 0:06:59.120 All right, interesting stuff. 0:06:59.160 --> 0:07:01.760 As always, Hey, thank you so much Bloomberg Intelligence senior 0:07:01.800 --> 0:07:05.080 retail Staples and packaged food analysts, our own Jen buttarsis 0:07:05.160 --> 0:07:08.400 uh with really the rundown on everything to do with Walmart. 0:07:08.440 --> 0:07:12.760 Today, you're listening to the Bloomberg Business Week podcast Can't 0:07:12.920 --> 0:07:15.920 Just Live weekday afternoons from two to five pm Eastern 0:07:16.080 --> 0:07:18.480 Listen on Apple car Play and and Brout Auto with 0:07:18.520 --> 0:07:22.240 a Bloomberg Business app or want us Live on YouTube. 0:07:23.040 --> 0:07:25.400 You may have done it or someone in your family. 0:07:25.440 --> 0:07:28.119 We're talking about DNA testing with a company like twenty 0:07:28.120 --> 0:07:31.040 three and me or ancestry dot com. Interesting to find 0:07:31.040 --> 0:07:33.280 out more about you know, of course, where your family's 0:07:33.320 --> 0:07:36.560 ancestry composition is, right, We all talk about it. We 0:07:36.600 --> 0:07:39.560 find out, Hey, you know, did you know my family's 0:07:39.600 --> 0:07:39.960 done it? 0:07:40.080 --> 0:07:40.360 All right? 0:07:40.400 --> 0:07:43.800 Well, the DNA testing industry was aiming for a bit more, 0:07:43.840 --> 0:07:46.960 to a world where the medical community added genetic testing 0:07:47.000 --> 0:07:48.960 to its standard operating procedures. 0:07:48.960 --> 0:07:50.360 I don't know, Carol. Maybe you find out stuff you 0:07:50.360 --> 0:07:53.400 don't necessarily want to know sure about your family or relative. 0:07:53.520 --> 0:07:54.160 That's part of the story. 0:07:54.240 --> 0:07:56.360 Hey, I've got a half sister. It's all part of 0:07:56.360 --> 0:07:58.960 the cell. Don't I don't, at least I don't know. 0:07:59.080 --> 0:08:02.520 Yet after here's and millions of spit kits, the doctors 0:08:02.520 --> 0:08:05.600 still don't care when it comes to this type of testing, 0:08:06.000 --> 0:08:08.679 at least for companies that are mass market. Mass market 0:08:08.680 --> 0:08:11.920 genetic streamings remain well apart from the medical mainstream, and 0:08:12.120 --> 0:08:14.240 for one of the players in the industry, twenty three 0:08:14.240 --> 0:08:17.000 and meters, it's actually never made a profit. Carol. It's 0:08:17.040 --> 0:08:19.440 the cover story of the new issue of Bloomberg BusinessWeek. 0:08:19.440 --> 0:08:21.640 It's on newstands, it's online on the Bloomberg and here 0:08:21.640 --> 0:08:23.960 with us as Bloomberg News healthcare reporter Kristin B. Brown 0:08:24.040 --> 0:08:25.080 joining us in the studio. 0:08:25.320 --> 0:08:25.920 Great story. 0:08:26.120 --> 0:08:29.280 I'm so glad you could be here. DNA tests for everyone, 0:08:29.360 --> 0:08:32.560 lots of genetic data, and bam, research gets a boost 0:08:32.720 --> 0:08:35.800 and moves faster, and we create a roadmap for living 0:08:35.840 --> 0:08:38.800 to age one hundred. That's in your story. That was 0:08:38.840 --> 0:08:39.280 the plan. 0:08:39.640 --> 0:08:42.240 That was the plan, Yes, and yet it did not 0:08:42.960 --> 0:08:45.640 quite go according to plant, which I will say is 0:08:45.679 --> 0:08:49.160 often the case in science. Right we have a big finding, 0:08:49.200 --> 0:08:51.840 more like wow, we just have to do this like 0:08:52.000 --> 0:08:55.160 one or two things, and then we'll solve all disease, 0:08:55.240 --> 0:08:56.920 which is almost literally what. 0:08:56.880 --> 0:08:57.679 They thought would happen. 0:08:57.679 --> 0:08:59.880 With the human genome. But then as we start on 0:09:00.080 --> 0:09:03.960 hangling it, we realized, oh, this is just like way 0:09:04.360 --> 0:09:08.240 more complicated than we realized, and that turned out to 0:09:08.240 --> 0:09:10.319 be trouble for a company. It's like twenty three and 0:09:10.360 --> 0:09:12.720 meters that wanted you to be able to just spit 0:09:12.760 --> 0:09:16.040 in a tube and learn, you know, all of the 0:09:16.040 --> 0:09:18.000 diseases you might be at risk for, But it turns 0:09:18.040 --> 0:09:21.319 out there's not just one gene for heart disease. There 0:09:21.360 --> 0:09:24.200 are so many genes we don't even know what they all. 0:09:24.720 --> 0:09:27.000 It's so complicated and they all interact and we don't 0:09:27.040 --> 0:09:30.240 know how they interact. So they're they're trying to for 0:09:30.320 --> 0:09:32.760 some of these things do what's called a polygenic risk 0:09:32.760 --> 0:09:34.560 wore and say, based on all of these genes, you 0:09:34.640 --> 0:09:37.880 might have a risk, But it winds up being more 0:09:38.000 --> 0:09:40.880 like you're slightly more elevated to risk, not an actual 0:09:40.960 --> 0:09:43.880 roadmap for what do you do to stay healthy and 0:09:44.040 --> 0:09:45.200 live to one hundred. 0:09:45.040 --> 0:09:46.960 And in a small portion of the folks who do 0:09:47.000 --> 0:09:48.719 the test, it does come back with some sort of 0:09:48.800 --> 0:09:52.079 result that says, Okay, you do have the characteristics of 0:09:53.400 --> 0:09:56.319 this sort of genetic you know, I don't even know 0:09:56.360 --> 0:09:59.800 the proper terminology variant, genetic variant, thank you. But then 0:10:00.000 --> 0:10:02.680 treatment for that, as you note in your story, can 0:10:02.679 --> 0:10:04.840 be incredibly expensive. 0:10:04.840 --> 0:10:09.840 Right, So, monogenic diseases, there's a lot of them. That's 0:10:10.000 --> 0:10:13.800 that's genes, a single gene that causes a disease. There's 0:10:13.840 --> 0:10:15.440 a lot of them, but they're usually. 0:10:15.200 --> 0:10:16.040 Very very rare. 0:10:16.120 --> 0:10:19.760 And because they're rare, and the therapies are also very complicated, 0:10:20.120 --> 0:10:24.120 you know, fancy high tech things, they're expensive, small population, 0:10:24.280 --> 0:10:26.679 small market. So we have gotten a few of these 0:10:26.880 --> 0:10:31.280 therapies so far, but definitely not the you know, therapies 0:10:31.360 --> 0:10:36.120 that we expected for very common diseases like Alzheimer's, like cancer. 0:10:36.200 --> 0:10:40.079 So we've gotten therapies that have a small market and so. 0:10:40.080 --> 0:10:41.559 Therefore they're really really pricey. 0:10:41.760 --> 0:10:44.160 We talked about people spitting in a tube. I'm not 0:10:44.200 --> 0:10:46.920 gonna ask for show of hands in the control room. 0:10:46.960 --> 0:10:48.160 We're here. But you did it. 0:10:48.280 --> 0:10:48.720 I did it. 0:10:48.840 --> 0:10:50.280 Yeah, I did not do it. 0:10:50.320 --> 0:10:52.360 I have spitt in so many tubes in the course 0:10:52.400 --> 0:10:55.560 of my journalism career, but I did for this particular. 0:10:55.120 --> 0:10:57.240 Story too, And it wasn't the typical twenty three and 0:10:57.360 --> 0:10:58.679 me twenty dollars. 0:10:58.360 --> 0:11:01.079 Thing, right, This is a very high Yeah, so twenty 0:11:01.080 --> 0:11:05.040 three meters. Latest offering is it's doing sequencing, not genotyping, 0:11:05.040 --> 0:11:08.920 which is a fancier They're literally decoding every little bit 0:11:09.080 --> 0:11:11.560 of all of the protein coding regions of your genome, 0:11:11.559 --> 0:11:15.680 which are the ones that we think cause disease, and 0:11:16.040 --> 0:11:19.559 in doing that they really hope to get this really holistic, 0:11:19.760 --> 0:11:24.199 nuanced picture of the genome for me. In the sequencing, 0:11:24.240 --> 0:11:27.520 they actually didn't find anything. And then in the genotyping, 0:11:27.520 --> 0:11:31.120 which is a sort of more low budget option, they 0:11:31.160 --> 0:11:34.079 found that I might be at risk risk or Celiac disease. 0:11:34.120 --> 0:11:35.880 But I can tell you I had avocado toast this 0:11:35.960 --> 0:11:39.360 morning for breakfast. It went fine. It went fine, So 0:11:40.800 --> 0:11:44.120 for me at least, this is almost one thousand dollars test, 0:11:44.760 --> 0:11:48.400 and I learned that I might have a disease that 0:11:48.480 --> 0:11:51.160 I don't have, So I don't know, Well, did. 0:11:51.040 --> 0:11:53.240 You do anything about that? Like I'm curious. Did it 0:11:53.360 --> 0:11:54.920 cause you to say, well, maybe I'll have a doctor 0:11:54.960 --> 0:11:55.520 look into this. 0:11:55.640 --> 0:11:58.200 Well, you know, usually if you have Celiac disease, you 0:11:58.280 --> 0:12:01.040 know you have a violent reaction when you eat gluten, 0:12:01.160 --> 0:12:03.079 So I was I felt pretty confident. It also said 0:12:03.120 --> 0:12:06.640 I might one day develop glaucoma, I have a slightly 0:12:06.679 --> 0:12:09.920 increased risk, but you can't actually do anything about that. 0:12:10.120 --> 0:12:11.880 So it's it's I don't know what to do with 0:12:11.960 --> 0:12:14.120 that knowledge. I felt like I sort of have spent 0:12:14.160 --> 0:12:17.680 that thousand dollars on some shoes instead. Maybe I don't know, 0:12:17.920 --> 0:12:18.720 preach into the choir. 0:12:19.120 --> 0:12:22.319 Well, the medical community right has been to some extent 0:12:22.360 --> 0:12:25.600 they haven't embraced this idea. Yeah, So I mean, is 0:12:25.600 --> 0:12:27.839 that part of the problem. Is it just a case 0:12:27.880 --> 0:12:30.520 that it's complicated and maybe it is the right idea 0:12:30.679 --> 0:12:33.360 or like in your reporting, like, how are like what's 0:12:33.400 --> 0:12:35.040 the kind of feedback on this? 0:12:35.240 --> 0:12:38.440 So I started looking into I wrote this story because 0:12:38.480 --> 0:12:41.840 I started wondering, you know, for for the decade I've 0:12:41.920 --> 0:12:44.160 covered this topic, people have told me, you know, this 0:12:44.200 --> 0:12:46.079 is the year genetics is going to catch on, this 0:12:46.120 --> 0:12:48.280 is the year, this is finally the year. No this year, 0:12:48.600 --> 0:12:51.240 and it just it just never happened. And so I 0:12:51.280 --> 0:12:54.600 started asking some of my longtime sources, you know, is 0:12:54.640 --> 0:12:57.560 this is this happening? You know, what's what's the status. 0:12:57.240 --> 0:12:57.640 Here, guys? 0:12:57.920 --> 0:12:59.960 And I was surprised to hear from many people who 0:13:00.000 --> 0:13:03.400 who had been boosters for the genome, who are now 0:13:03.440 --> 0:13:07.280 saying we're not sure it's ever going to happen, and amazing, Yeah, 0:13:07.600 --> 0:13:11.080 and you know, with science, you never you never know. 0:13:11.320 --> 0:13:14.640 Maybe we'll turn a corner, we'll find something that will 0:13:14.679 --> 0:13:17.760 suddenly unlock everything. But based on what we know now, 0:13:18.240 --> 0:13:23.000 it does feel like it's just so complicated that for 0:13:23.080 --> 0:13:27.520 the average healthy person, there won't be value really in 0:13:27.520 --> 0:13:29.560 getting a genetic street. Now, if you have a history 0:13:29.600 --> 0:13:32.360 of cancer in your family, if you want to become 0:13:32.400 --> 0:13:34.120 a parent and you want to make sure you don't 0:13:34.160 --> 0:13:37.120 have any genetic conditions lurking in your genome, you could 0:13:37.160 --> 0:13:40.000 pass on that stuff all worth it. But if you're 0:13:40.000 --> 0:13:44.120 just an average healthy person trying to live their best life, 0:13:45.280 --> 0:13:47.079 it just really seems like there's not going to be 0:13:47.160 --> 0:13:48.040 value in these tests. 0:13:48.200 --> 0:13:50.760 It raises the question about what the future is for 0:13:50.880 --> 0:13:52.760 twenty three and METERI, And that's a big part of 0:13:52.800 --> 0:13:55.560 your cover story for Bloomberg Business Week, the idea that 0:13:56.160 --> 0:13:58.400 the stock has been under pressure over the last few years, 0:13:58.400 --> 0:14:01.240 down more than ninety four percent over that period of time. 0:14:01.320 --> 0:14:04.560 Richard Branson lost over one hundred million dollars on it 0:14:04.600 --> 0:14:08.719 going public. What is the future for twenty three and me? 0:14:08.800 --> 0:14:09.439 As a business. 0:14:09.640 --> 0:14:11.920 Yeah, So, I mean they're in a real tough spot. 0:14:12.000 --> 0:14:15.280 They just got an extension to try and get their 0:14:15.280 --> 0:14:17.360 stock back up over a dollar. They have until I 0:14:17.400 --> 0:14:20.680 believe November they'll be delisted. Yeah, the concern is that 0:14:20.680 --> 0:14:23.520 they will be delisted, and I think and a move 0:14:23.760 --> 0:14:28.280 to prevent that from happening, CEO and Wojiski has filed 0:14:28.320 --> 0:14:32.400 an intent to take the company private herself to you know, 0:14:32.440 --> 0:14:35.640 buy it, buy it back basically, So that could be 0:14:35.680 --> 0:14:38.560 one thing we see. But I think that you know, 0:14:38.640 --> 0:14:40.280 it's a really rocky road ahead for them. 0:14:40.560 --> 0:14:43.080 Well, you know, it's interesting and I don't know, is 0:14:43.120 --> 0:14:46.760 this a company that might benefit being private in terms 0:14:46.840 --> 0:14:50.080 of having the time, the luxury, maybe the money, you know, 0:14:50.160 --> 0:14:51.280 to kind of figure this. 0:14:51.160 --> 0:14:54.840 Out based on what the stock did when she filed 0:14:54.840 --> 0:14:56.840 that eight k I would say that the market things 0:14:56.840 --> 0:15:00.240 that would benefit from from going private. It's it's it's 0:15:00.280 --> 0:15:04.560 a hard company because it's part consumer, part drug development, 0:15:04.680 --> 0:15:07.760 and the investors in those two different kinds of companies, 0:15:07.800 --> 0:15:11.160 and has said this herself, they kind of have different expectations. 0:15:11.160 --> 0:15:13.600 So it's a weird blend of things, and that has 0:15:13.640 --> 0:15:16.440 created an additional challenge on top of you know, having 0:15:16.520 --> 0:15:18.760 a consumer product that a lot of consumers maybe don't 0:15:18.800 --> 0:15:19.400 want anymore. 0:15:19.640 --> 0:15:23.520 So what about the data and the data breaches that 0:15:23.560 --> 0:15:25.680 we've heard about the security of this information? I mean 0:15:25.760 --> 0:15:28.280 years ago, years ago, I'm going to say, my mom 0:15:28.360 --> 0:15:30.160 was right. She was like, why would I want to 0:15:30.160 --> 0:15:33.240 give a company this type of information once it's out there? 0:15:33.560 --> 0:15:35.560 And I was actually defended. I was saying, no, you 0:15:35.560 --> 0:15:37.280 know these you know, this type of stuff stays safe. 0:15:37.600 --> 0:15:39.760 Fast forward a few years, there's a big data breach. 0:15:40.040 --> 0:15:42.640 Yeah, I mean, Anne has said that she thinks that 0:15:42.800 --> 0:15:45.800 privacy concerns has been one of the reasons kit sales 0:15:45.840 --> 0:15:48.040 have slowed. She said that in the past, and you 0:15:48.080 --> 0:15:51.560 know that could definitely be what's going on. One analyst 0:15:51.640 --> 0:15:53.320 joke to me that twenty three and meters would probably 0:15:53.320 --> 0:15:55.280 do better to just give the kit away for free 0:15:55.400 --> 0:15:58.840 in exchange for getting people's data, because that is the 0:15:58.880 --> 0:16:00.840 most valuable as they have. 0:16:01.360 --> 0:16:04.600 How much we've talked about generative AI, and you think 0:16:04.640 --> 0:16:07.880 about the more data that comes into the pool, whether 0:16:08.000 --> 0:16:09.920 or not that can help kind of be a turning point, 0:16:10.120 --> 0:16:11.000 like more information. 0:16:11.320 --> 0:16:14.480 I mean, they have fifteen million genomes. That is one 0:16:14.520 --> 0:16:18.240 of the biggest genetic databases on par with ancestry and 0:16:18.680 --> 0:16:22.520 the you know, country of China. So that's that's really valuable. 0:16:22.560 --> 0:16:25.440 And so if they can keep growing that asset, that 0:16:25.480 --> 0:16:26.080 could be big. 0:16:26.280 --> 0:16:27.880 And to be clear, there was a data breach of 0:16:27.920 --> 0:16:29.040 people's personal information. 0:16:29.120 --> 0:16:31.000 Yes, there was a data breach my personal and it 0:16:31.040 --> 0:16:32.880 did contain some genetic information. 0:16:32.960 --> 0:16:35.760 All right, Elizabeth our producer, YouTube producer and me, we're 0:16:35.760 --> 0:16:38.240 both with your mom about this in terms of the information. 0:16:39.160 --> 0:16:41.760 Any questions that you still have, you've reported this story out, 0:16:41.840 --> 0:16:45.320 you're thinking about it, what questions are still kind of 0:16:45.320 --> 0:16:46.040 top of mind for you? 0:16:46.160 --> 0:16:49.800 Yeah, I mean I think for me, you know, having 0:16:49.840 --> 0:16:52.240 covered this field for a decade, it was sort of 0:16:52.280 --> 0:16:54.760 an existential crisis to actually do this story and be, 0:16:55.320 --> 0:16:58.600 you know, questioning whether the thing that I have governed 0:16:58.640 --> 0:17:02.160 for a decade really doesn't matter. So I think that 0:17:02.560 --> 0:17:05.159 I just want to see how this science unfolds and 0:17:05.200 --> 0:17:08.040 what value we will wind up getting from the genome, 0:17:08.080 --> 0:17:10.239 because I don't think that it's going to wind up 0:17:10.280 --> 0:17:13.879 having been for not that we sequenced the human genome 0:17:13.920 --> 0:17:15.639 twenty years ago, but I think what we're going to 0:17:15.720 --> 0:17:19.040 get isn't what we expected. So that's still to be written. 0:17:19.119 --> 0:17:19.720 It's fascinating. 0:17:19.720 --> 0:17:21.560 I remember kind of early on in my career, like 0:17:21.600 --> 0:17:23.840 you know, they'd map something and we do a story, 0:17:23.880 --> 0:17:25.639 and then when they finally completed it, like it was 0:17:25.720 --> 0:17:27.760 just like why, you know, now we have all the 0:17:27.760 --> 0:17:29.560 information what we can do with it? But here, we 0:17:29.600 --> 0:17:32.160 are here, we are here, we are more to come. 0:17:32.320 --> 0:17:34.800 That means more stories from you, more cover stories. Bloomberg 0:17:34.800 --> 0:17:37.960 News healthcare reporter Kristin V. Brown on this week's Bloomberg 0:17:37.960 --> 0:17:40.280 BusinessWeek cover story, which you can get online on the 0:17:40.320 --> 0:17:42.800 Bloomberg and catch it also on the newstand. 0:17:42.920 --> 0:17:44.679 So you didn't you haven't done one of the customers, 0:17:44.680 --> 0:17:44.879 I have it. 0:17:44.920 --> 0:17:45.720 One of my brothers had. 0:17:45.840 --> 0:17:48.000 Yeah, my sister did it. But I think, okay, if 0:17:48.080 --> 0:17:49.640 she did it, then it's out there. 0:17:49.720 --> 0:17:52.119 Yeah, we know people, it's definitely out there. 0:17:52.320 --> 0:17:52.720 Connected. 0:17:56.000 --> 0:17:59.840 You're listening to the Bloomberg Business Week podcast. 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